Q4 2025 Microvast Holdings Inc Earnings Call
Speaker #1: Thank you for standing by. This is a conference operator. Welcome to Microvast's full year 2025 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded.
Operator: Thank you for standing by. This is the conference operator. Welcome to Microvast's Full Year 2025 Earnings Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. I would now like to turn the conference over to Microvast Investor Relations. Please go ahead.
Operator: Thank you for standing by. This is the conference operator. Welcome to Microvast's Full Year 2025 Earnings Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. I would now like to turn the conference over to Microvast Investor Relations. Please go ahead.
Speaker #1: I would now like to turn the conference over to Microvast's investor relations. Please go ahead.
Speaker #2: Thank you, operator, and thank you, everyone, for joining our update today. This is Rodney Worthen, Chief Financial Officer of Microvast, and with me on today's call is Mr. Wu, Founder, Chairman, and Chief Executive Officer of Microvast.
Rodney Worthen: Thank you, operator, and thank you everyone for joining our update today. This is Rodney Worthen, Chief Financial Officer of Microvast. With me on today's call is Mr. Wu, Founder, Chairman, and Chief Executive Officer of Microvast. Mr. Wu will start off with a high-level overview of our 2025 results before providing some operational and business updates. I will then discuss our financials in more detail before handing it back to Mr. Wu to wrap up with our outlook for 2026 and closing remarks. Ahead of this call, Microvast issued its 2025 full year earnings press release, which can be found on the investor relations section of our website, ir.microvast.com. We have also posted a slide presentation to accompany management's prepared remarks for today's call.
Rodney Worthen: Thank you, operator, and thank you everyone for joining our update today. This is Rodney Worthen, Chief Financial Officer of Microvast. With me on today's call is Mr. Wu, Founder, Chairman, and Chief Executive Officer of Microvast. Mr. Wu will start off with a high-level overview of our 2025 results before providing some operational and business updates. I will then discuss our financials in more detail before handing it back to Mr. Wu to wrap up with our outlook for 2026 and closing remarks. Ahead of this call, Microvast issued its 2025 full year earnings press release, which can be found on the investor relations section of our website, ir.microvast.com. We have also posted a slide presentation to accompany management's prepared remarks for today's call.
Speaker #2: Mr. Wu will start off with a high-level overview of our 2025 results before providing some operational and business updates. I will then discuss our financials in more detail before handing it back to Mr. Wu to wrap up with our outlook for 2026 and closing remarks.
Speaker #2: Ahead of this call, Microvast issued its 2025 full-year earnings press release, which can be found on the investor relations section of our website.
Speaker #2: IR dot microvast dot com. We have also posted a slide presentation to accompany management's prepared remarks for today's call. As a reminder, please note that this call may include forward-looking statements.
Rodney Worthen: As a reminder, please note that this call may include forward-looking statements. These statements are based on current expectations and assumptions and should not be relied upon as representative of views for subsequent dates. We undertake no obligation to revise or release the results of any revision to these forward-looking statements due to new information or future events. Actual results may differ materially from expectations due to a variety of risks and uncertainties. For more information on material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. We may also discuss non-GAAP financial measures during this call. These measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.
Rodney Worthen: As a reminder, please note that this call may include forward-looking statements. These statements are based on current expectations and assumptions and should not be relied upon as representative of views for subsequent dates. We undertake no obligation to revise or release the results of any revision to these forward-looking statements due to new information or future events. Actual results may differ materially from expectations due to a variety of risks and uncertainties. For more information on material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. We may also discuss non-GAAP financial measures during this call. These measures should be considered in addition to and not as a substitute for or in isolation from GAAP results.
Speaker #2: These statements are based on current expectations and assumptions and should not be relied upon as representative views for subsequent dates. We undertake no obligation to revise or release the results of any revision to these forward-looking statements due to new information or future events.
Speaker #2: Actual results may differ materially from expectations due to a variety of risks and uncertainties. For more information on material risks and other important factors that could affect our financial results, please refer to our filings with the SEC.
Speaker #2: We may also discuss non-GAAP financial measures during this call. These measures should be considered in addition to, and not as a substitute for or in isolation from, GAAP results.
Speaker #2: These non-GAAP measures have been reconciled to their most comparable GAAP metrics in the tables included at the end of our press release and our slide presentation.
Rodney Worthen: These non-GAAP measures have been reconciled to their most comparable GAAP metrics in the tables included at the end of our press release and our slide presentation. After the conclusion of this call, a webcast replay will be available on the investor relations section of Microvast website. Now, I will turn the call over to Mr. Wu to kick things off.
Rodney Worthen: These non-GAAP measures have been reconciled to their most comparable GAAP metrics in the tables included at the end of our press release and our slide presentation. After the conclusion of this call, a webcast replay will be available on the investor relations section of Microvast website. Now, I will turn the call over to Mr. Wu to kick things off.
Speaker #2: After the conclusion of this call, a webcast replay will be available on the investor relations section of Microvast's website. Now, I will turn the call over to Mr. Wu to kick things off.
Speaker #3: Hello, everyone, and a welcome. Thank you for joining us today. As always, I want to start by reminding you of our core mission. Founded in Texas in 2006, Microvast has grown into a global leader in advanced battery technologies with over 890 patents granted or pending and our electrified solution successfully deployed worldwide.
Yang Wu: Hello, everyone, and welcome. Thank you for joining us today. As always, I want to start by reminding you of our core mission. Founded in Texas in 2006, Microvast has grown into a global leader in advanced battery technologies, with over 890 patents granted or pending and our electrified solution successfully deployed worldwide. We are proud to be a driving force in a global energy transition, building a more sustainable future, one battery at a time. We are excited about our upcoming product launches. The 55Ah cell combines the high power performance of our 48Ah cell with the high energy output of our 53.5Ah cell, converging into a very exciting platform. We are also launching our next generation LTO cell, which provides high power output and ultra-fast charging capability.
Yang Wu: Hello, everyone, and welcome. Thank you for joining us today. As always, I want to start by reminding you of our core mission. Founded in Texas in 2006, Microvast has grown into a global leader in advanced battery technologies, with over 890 patents granted or pending and our electrified solution successfully deployed worldwide. We are proud to be a driving force in a global energy transition, building a more sustainable future, one battery at a time. We are excited about our upcoming product launches. The 55Ah cell combines the high power performance of our 48Ah cell with the high energy output of our 53.5Ah cell, converging into a very exciting platform. We are also launching our next generation LTO cell, which provides high power output and ultra-fast charging capability.
Speaker #3: We are proud to be a driving force in the global energy transition, building a more sustainable future, one battery at a time. We are excited about our upcoming product launches.
Speaker #3: The 55 amp-hour cell combines the high-power performance of our 48 amp-hour cell with the high-energy output of our 53.5 amp-hour cell, converging into a very exciting platform.
Speaker #3: We are also launching our next-generation LTO cell, which provides high-power output and fast charging capability. It's particularly well suited for rail and tram, specialty vehicles, high-torque applications, and AGVs.
Yang Wu: It's particularly well-suited for rail and tram, specialty vehicles, high torque applications, and AGVs. Join me on slide four, and I will provide a brief overview of our 2025 results. We are thrilled to achieve another year of record annual revenue of $427.5 million, representing a 12.6% year-over-year increase. While we navigated a shifting landscape, we delivered an annual gross margin of 28.6%. This change was primarily attributable to an inventory impairment charge, which negatively impacted our gross margin by 7.6 percentage points. Our GAAP net loss for the year was $29.2 million. On a non-GAAP basis, we achieved an adjusted net profit of $13 million. In 2025, we recorded a non-GAAP adjusted EBITDA of $44.7 million.
Yang Wu: It's particularly well-suited for rail and tram, specialty vehicles, high torque applications, and AGVs. Join me on slide four, and I will provide a brief overview of our 2025 results. We are thrilled to achieve another year of record annual revenue of $427.5 million, representing a 12.6% year-over-year increase. While we navigated a shifting landscape, we delivered an annual gross margin of 28.6%. This change was primarily attributable to an inventory impairment charge, which negatively impacted our gross margin by 7.6 percentage points. Our GAAP net loss for the year was $29.2 million. On a non-GAAP basis, we achieved an adjusted net profit of $13 million. In 2025, we recorded a non-GAAP adjusted EBITDA of $44.7 million.
Speaker #3: Join me on slide four, and I will provide a brief overview of our 2025 results. We are thrilled to achieve another year of record annual revenue of $427.5 million, representing a 12.6% year-over-year increase.
Speaker #3: While we navigated a shifting landscape, we delivered an annual gross margin of 28.6%. This change was primarily attributed to an inventory impairment charge, which negatively impacted our gross margin by 7.6 percentage points.
Speaker #3: Our GAAP net loss for the year was $29.2 million. On a non-GAAP basis, we achieved adjusted net profit of $13 million. In 2025, we recorded a non-GAAP adjusted EBITDA of $44.7 million.
Speaker #3: This demonstrates that we are not only able to grow our top line, but also that we are making the necessary adjustments to leverage our operations as we continue to scale.
Yang Wu: This demonstrates that we are not only able to grow our top line, but also that we are making the necessary adjustments to leverage our operations as we continue to scale. While our full year revenue landed just below guidance due to both evolving regulatory shifts in the Korean market and customer platform ramp-up delays, our underlying fundamentals remained strong. We delivered 2025 revenue growth at an industry-leading gross margin, demonstrating the high value our customers place on Microvast technology. The momentum in EMEA is encouraging as we continue into 2026, particularly as the previous vehicle platform delays in the region begin to resolve, to reach SOP. In Asia Pacific, while we navigated the regulatory environment in Korea, we are focused on a long-term view of our Huzhou phase 3.2 expansion, which is expected to bring additional capacity online in 2026.
Yang Wu: This demonstrates that we are not only able to grow our top line, but also that we are making the necessary adjustments to leverage our operations as we continue to scale. While our full year revenue landed just below guidance due to both evolving regulatory shifts in the Korean market and customer platform ramp-up delays, our underlying fundamentals remained strong. We delivered 2025 revenue growth at an industry-leading gross margin, demonstrating the high value our customers place on Microvast technology. The momentum in EMEA is encouraging as we continue into 2026, particularly as the previous vehicle platform delays in the region begin to resolve, to reach SOP. In Asia Pacific, while we navigated the regulatory environment in Korea, we are focused on a long-term view of our Huzhou phase 3.2 expansion, which is expected to bring additional capacity online in 2026.
Speaker #3: While our full year revenue landed just below guidance due to both evolving regulatory shifts in Korea market and customer platform ramp-up delays, our underlying fundamentals remain strong.
Speaker #3: We delivered 2025 revenue growth at an industry-leading gross margin. Demonstrating the high-value our customers placed on Microvast technology. The momentum in EMEA is encouraging as we continue into 2026, particularly as the previous vehicle platform delays in the region begin to resolve the rich SOP.
Speaker #3: In APAC, while we navigated the regulatory environment in Korea, we have focused on a long-term via our Huzhou Phase 3.2 expansion. Which is expected to bring additional capacity online in 2026.
Speaker #3: We anticipate achieving serial production after the ramp-up period. Our focus on efficiency and profitability is a long-term commitment. The growth we have seen from 2022 through 2025, where our revenue has more than doubled, and our GAAP gross profit has gone up approximately 13 times.
Yang Wu: We anticipate achieving serial production after the ramp-up period. Our focus on efficiency and profitability is a long-term commitment. The growth we have seen from 2022 through 2025, where our revenue has more than doubled, our GAAP gross profit has gone up approximately 13 times, and we achieved positive adjusted EBITDA, is a testament to the increasing market demand for our high-performance products. We believe this trajectory continue to validate our ability to successfully commercialize our innovative technology and operate effectively in a maturing industry. Let's turn to slide 5 for an operational update on our Huzhou 3.2 expansion. I'm pleased to report that our Huzhou Phase 3.2 project is progressing well, with clean rooms and utility equipment already in operation.
Yang Wu: We anticipate achieving serial production after the ramp-up period. Our focus on efficiency and profitability is a long-term commitment. The growth we have seen from 2022 through 2025, where our revenue has more than doubled, our GAAP gross profit has gone up approximately 13 times, and we achieved positive adjusted EBITDA, is a testament to the increasing market demand for our high-performance products. We believe this trajectory continue to validate our ability to successfully commercialize our innovative technology and operate effectively in a maturing industry. Let's turn to slide 5 for an operational update on our Huzhou 3.2 expansion. I'm pleased to report that our Huzhou Phase 3.2 project is progressing well, with clean rooms and utility equipment already in operation.
Speaker #3: And we achieved positive adjusted EBITDA. It's a testament to the increasing market demand for our high-performance products. We believe this trajectory continues to validate our ability to successfully commercialize our innovative technology and operate effectively in a mature industry.
Speaker #3: Let's turn to slide five for an operational update on our Huzhou 3.2 expansion. I'm pleased to report that our Huzhou Phase 3.2 project is progressing well.
Speaker #3: With clean rooms and utility equipment already in operation, prior production for our 55 amp-hour cell has begun on the electrode section assembly and formation, and no load test has started.
Yang Wu: Trial production for our 55Ah cell has begun on the electrode section assembly and formation, and no-load tests have started. This expansion is a critical component of our growth strategy, as Phase 3.2 is expected to add up to 2 GWh of annual production capacity and anticipated to be modular across our LBC platform. Please turn to slide 6 for a look at how our technology translates into market-leading applications. Whether our customers need maximum energy for long-haul duty cycles or ultra-high power for rapid charging, Microvast has a high-performance solution. On the left, our HpCO 55Ah cell is a workhorse for high energy needs. It is purpose-built for segments where range and longevity are key. From city buses and heavy duty trucks to maritime vessels, it delivers an energy density required to keep those fleets running longer between charges.
Yang Wu: Trial production for our 55Ah cell has begun on the electrode section assembly and formation, and no-load tests have started. This expansion is a critical component of our growth strategy, as Phase 3.2 is expected to add up to 2 GWh of annual production capacity and anticipated to be modular across our LBC platform. Please turn to slide 6 for a look at how our technology translates into market-leading applications. Whether our customers need maximum energy for long-haul duty cycles or ultra-high power for rapid charging, Microvast has a high-performance solution. On the left, our HpCO 55Ah cell is a workhorse for high energy needs. It is purpose-built for segments where range and longevity are key. From city buses and heavy duty trucks to maritime vessels, it delivers an energy density required to keep those fleets running longer between charges.
Speaker #3: This expansion is a critical component of our growth strategy, as Phase 3.2 is expected to add up to 2 gigawatt-hours of annual production capacity and is anticipated to be modular across our LBC platform.
Speaker #3: Please turn to slide six for a look at how our technology translates into market-leading applications. Whether our customers need maximum energy for long-haul duty cycles or ultra-high power for rapid charging, Microvast has a high-performance solution.
Speaker #3: On the left, our HPCO 55 amp-hour cell is a workhorse for high-energy needs. It is purpose-built for segments where range and longevity are key, from city buses and heavy-duty trucks to maritime vessels.
Speaker #3: It delivers an energy density required to keep those fleets running longer between charges. On the right, our HPTO 37-amp-hour cell leads in ultra-fast charging and high-power performance combined with long cycle life.
Yang Wu: On the right, our HpTO 37Ah cell leads in ultra-fast charging and high power performance combined with a long cycle life. This is ideal solution for rail and tram systems, AGVs, and high torque robotics. These are environments where power must be delivered instantly and recharged rapidly to maintain 24/7 operations. By offering this specialized duality, we show that Microvast isn't just a battery supplier, but a strategic partner capable of electrifying the most demanding industry and commercial segments globally. On slide 7, let's look at the progress in our all-solid-state battery milestones. Building upon our Q3 updates, we are entering an exciting new phase of development focused on high voltage bipolar integration. As shown in figure 1, our 12-layer monolithic stack has now surpassed 200 cycles while maintaining a 99.97% current efficiency.
Yang Wu: On the right, our HpTO 37Ah cell leads in ultra-fast charging and high power performance combined with a long cycle life. This is ideal solution for rail and tram systems, AGVs, and high torque robotics. These are environments where power must be delivered instantly and recharged rapidly to maintain 24/7 operations. By offering this specialized duality, we show that Microvast isn't just a battery supplier, but a strategic partner capable of electrifying the most demanding industry and commercial segments globally. On slide 7, let's look at the progress in our all-solid-state battery milestones. Building upon our Q3 updates, we are entering an exciting new phase of development focused on high voltage bipolar integration. As shown in figure 1, our 12-layer monolithic stack has now surpassed 200 cycles while maintaining a 99.97% current efficiency.
Speaker #3: This is an ideal solution for rail and tram systems, AGVs, and high-torque robotics. These are environments where power must be delivered instantly and recharged rapidly to maintain 24/7 operations.
Speaker #3: By offering this specialized duality, we show that Microvast isn't just a battery supplier, but a strategic partner capable of electrifying the most demanding industry and commercial segment globally.
Speaker #3: On slide seven, let's look at the progress in our all-solid-state battery milestones. Building upon our Q3 updates, we are entering an exciting new phase of development focused on high-voltage bipolar integration.
Speaker #3: As shown in Figure 1, our 12-layer monolithic stack has now surpassed 200 cycles while maintaining a 99.97% coulombic efficiency. This indicates minimal energy loss and validates the durability of full solid-state design.
Yang Wu: This indicates minimal energy loss and validates the durability of all-solid-state design. Even more significant is our new milestone, a 72-volt monolithic stack. By using a proprietary internal series connected bipolar architecture, we have achieved our highest stable voltage density to date. As illustrated in Figure 2, voltage capacity profile, this stack has successfully completed 100 cycles. The cross-section analysis in Figure 3 confirms a uniform layer construction, which is essential for long-term power stability by eliminating liquid electrolytes and external wiring. This architecture reduces weight and the system complexity, making it ideal for direct integration into next-generation robotics and high-power systems. This milestone shows the potential to scale our high-voltage all-solid-state platform, one that maintains structural integrity under stress. Now I will turn this call over to Ronnie to discuss our 2025 financials.
Yang Wu: This indicates minimal energy loss and validates the durability of all-solid-state design. Even more significant is our new milestone, a 72-volt monolithic stack. By using a proprietary internal series connected bipolar architecture, we have achieved our highest stable voltage density to date. As illustrated in Figure 2, voltage capacity profile, this stack has successfully completed 100 cycles. The cross-section analysis in Figure 3 confirms a uniform layer construction, which is essential for long-term power stability by eliminating liquid electrolytes and external wiring. This architecture reduces weight and the system complexity, making it ideal for direct integration into next-generation robotics and high-power systems. This milestone shows the potential to scale our high-voltage all-solid-state platform, one that maintains structural integrity under stress. Now I will turn this call over to Ronnie to discuss our 2025 financials.
Speaker #3: Even more significant is our new milestone, a 72-volt monolithic stack. By using the proprietary internal series-connected bipolar architecture, we have achieved our highest stable voltage density to date.
Speaker #3: As illustrated in Figure 2, voltage capacity profile. This stack has successfully completed 100 cycles. The cross-section analysis in Figure 3 confirms a uniform layer construction, which is essential for long-term power stability by eliminating liquid electrolytes and external wiring.
Speaker #3: This architecture reduces weight and system complexity, making it ideal for direct integration into next-generation robotics and high-power systems. This milestone shows the potential to scale our high-voltage all-solid-state platform.
Speaker #3: Once that maintains structural integrity under stress, now I will turn this call over to Rodney to discuss our 2025 financials.
Speaker #1: Thank you, Mr. Wu. Please join me on slide nine. We are pleased to report that Microvast achieved record annual revenue in 2025, reaching $427.5 million, a 12.6% increase compared to the $379.8 million in 2024.
Rodney Worthen: Thank you, Mr. Wu. Please join me on slide 9. We are pleased to report that Microvast achieved record annual revenue in 2025, reaching $427.5 million, a 12.6% increase compared to the $379.8 million in 2024. This growth was primarily due to a year-over-year increase in our sales volume, approximately 16.5% or 266 MWh. While our Q4 revenue of $96.4 million was impacted by evolving regulatory changes in South Korea and customer platform ramp-up delays in EMEA, our full year performance highlights the transformation in our margin profile and business expansion. Full year gross profit reached $122.1 million. This resulted in full year gross margin of 28.6% compared to 31.5% in 2024.
Rodney Worthen: Thank you, Mr. Wu. Please join me on slide 9. We are pleased to report that Microvast achieved record annual revenue in 2025, reaching $427.5 million, a 12.6% increase compared to the $379.8 million in 2024. This growth was primarily due to a year-over-year increase in our sales volume, approximately 16.5% or 266 MWh. While our Q4 revenue of $96.4 million was impacted by evolving regulatory changes in South Korea and customer platform ramp-up delays in EMEA, our full year performance highlights the transformation in our margin profile and business expansion. Full year gross profit reached $122.1 million. This resulted in full year gross margin of 28.6% compared to 31.5% in 2024.
Speaker #1: This growth was primarily due to a year-over-year increase in our sales volume, approximately 16.5% or 266 megawatt-hours. While our fourth-quarter revenue of $96.4 million was impacted by evolving regulatory changes in South Korea and customer platform ramp-up delays in EMEA, our full-year performance highlights the transformation in our margin profile and business expansion.
Speaker #1: Full-year gross profit reached $122.1 million. This resulted in a full-year gross margin of 28.6%, compared to 31.5% in 2024. This change was primarily attributable to a $32.5 million inventory impairment charge related to specialized ESS components, which negatively impacted our gross margin by 7.6 percentage points.
Rodney Worthen: This change was primarily attributable to $32.5 million in inventory impairment charge related to specialized ESS components, which negatively impacted our gross margin by 7.6 percentage points. Excluding the impact of this specific non-cash charge, the underlying gross margin performance reflected a more favorable product mix and improved manufacturing efficiencies across our battery solution portfolio. Full-year operating expenses were $118.3 million compared to $238.3 million in 2024. General and administrative expenses for the year decreased by $23.7 million or 29% compared to 2024. The decline was primarily driven by $17.4 million reduction in share-based compensation expenses or SBC and a favorable $8.6 million impact from foreign exchange rate fluctuations related to the euro and RMB.
Rodney Worthen: This change was primarily attributable to $32.5 million in inventory impairment charge related to specialized ESS components, which negatively impacted our gross margin by 7.6 percentage points. Excluding the impact of this specific non-cash charge, the underlying gross margin performance reflected a more favorable product mix and improved manufacturing efficiencies across our battery solution portfolio. Full-year operating expenses were $118.3 million compared to $238.3 million in 2024. General and administrative expenses for the year decreased by $23.7 million or 29% compared to 2024. The decline was primarily driven by $17.4 million reduction in share-based compensation expenses or SBC and a favorable $8.6 million impact from foreign exchange rate fluctuations related to the euro and RMB.
Speaker #1: Excluding the impact of this specific non-cash charge, the underlying gross margin performance reflected a more favorable product mix and improved manufacturing efficiencies across our battery solution portfolio.
Speaker #1: Full-year operating expenses were $118.3 million, compared to $238.3 million in 2024. General and administrative expenses for the year decreased by $23.7 million, or 29%, compared to 2024.
Speaker #1: The decline was primarily driven by a $17.4 million reduction in share-based compensation expenses, or SBC, and a favorable $8.6 million impact from foreign exchange rate fluctuations related to the euro and RMB.
Speaker #1: Research and development expenses for the year decreased by $7 million, or 16.9%, compared to 2024. This reduction in R&D expense was primarily driven by a $5.5 million decrease in SBC.
Rodney Worthen: Research and development expenses for the year decreased by $7 million or 16.9% compared to 2024. This reduction in R&D expense was primarily driven by a $5.5 million decrease in SBC. Selling and marketing expenses for the year remained relatively flat compared to 2024, but overall decreased by $0.4 million or 1.7%. In 2025, we recorded an operating profit of $6.98 million and a GAAP net loss of $29.2 million. This is compared to an operating loss of $116.1 million and a net loss of $195.5 million in 2024.
Rodney Worthen: Research and development expenses for the year decreased by $7 million or 16.9% compared to 2024. This reduction in R&D expense was primarily driven by a $5.5 million decrease in SBC. Selling and marketing expenses for the year remained relatively flat compared to 2024, but overall decreased by $0.4 million or 1.7%. In 2025, we recorded an operating profit of $6.98 million and a GAAP net loss of $29.2 million. This is compared to an operating loss of $116.1 million and a net loss of $195.5 million in 2024.
Speaker #1: Selling and marketing expenses for the year remained relatively flat compared to 2024, but overall decreased by $0.4 million, or 1.7%. In 2025, we recorded an operating profit of $6.98 million and a GAAP net loss of $29.2 million.
Speaker #1: This is compared to an operating loss of $116.1 million and a net loss of $195.5 million in 2024. After adjusting for SBC of $3.1 million and fair value changes of our warrant liability and convertible loan of $39.1 million, we achieved non-GAAP adjusted net profit of $13 million.
Rodney Worthen: After adjusting for SBC of $3.1 million and fair value changes of our warrant liability and convertible loan of $39.1 million, we achieved a non-GAAP adjusted net profit of $13 million for the full year 2025. This is compared to non-GAAP adjusted net loss of $84.6 million in 2024. For 2025, we achieved non-GAAP adjusted EBITDA of $44.7 million, compared to non-GAAP adjusted EBITDA of a negative $44.8 million in 2024, which shows the improvement in our operational performance year-over-year. Reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables of this presentation in our earnings press release. Please turn to slide 10, where we will review our revenue by region.
Rodney Worthen: After adjusting for SBC of $3.1 million and fair value changes of our warrant liability and convertible loan of $39.1 million, we achieved a non-GAAP adjusted net profit of $13 million for the full year 2025. This is compared to non-GAAP adjusted net loss of $84.6 million in 2024. For 2025, we achieved non-GAAP adjusted EBITDA of $44.7 million, compared to non-GAAP adjusted EBITDA of a negative $44.8 million in 2024, which shows the improvement in our operational performance year-over-year. Reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables of this presentation in our earnings press release. Please turn to slide 10, where we will review our revenue by region.
Speaker #1: For the full year 2025, this is compared to non-GAAP adjusted net loss of $84.6 million in 2024. For 2025, we achieved non-GAAP adjusted EBITDA of $44.7 million.
Speaker #1: Compared to non-GAAP adjusted EBITDA of negative $44.8 million in 2024, which shows an improvement in our operational performance year over year. Reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables of this presentation and our earnings press release.
Speaker #1: Please turn to slide 10, where we will review our revenue by region. US revenue grew 173% year over year from $14.4 million in 2024 to $39.3 million in 2025.
Rodney Worthen: US revenue grew 173% year-over-year from $14.4 million in 2024 to $39.3 million in 2025, contributing to 9% of our total revenue mix. While the increase is primarily driven by customers bringing forward deliveries due to uncertainty on tariff outcomes, we continue to pursue and engage with new markets as we build our domestic customer pipeline. EMEA remains our strongest growth engine, with a 13% year-over-year revenue increase, growing to $211.9 million in 2025, compared to $187.7 million in 2024. This region again accounted for approximately half of our total revenue. In Asia Pacific, revenue declined slightly from $177.7 million in 2024 to $176.3 million in 2025, a 1% year-over-year decrease.
Rodney Worthen: US revenue grew 173% year-over-year from $14.4 million in 2024 to $39.3 million in 2025, contributing to 9% of our total revenue mix. While the increase is primarily driven by customers bringing forward deliveries due to uncertainty on tariff outcomes, we continue to pursue and engage with new markets as we build our domestic customer pipeline. EMEA remains our strongest growth engine, with a 13% year-over-year revenue increase, growing to $211.9 million in 2025, compared to $187.7 million in 2024. This region again accounted for approximately half of our total revenue. In Asia Pacific, revenue declined slightly from $177.7 million in 2024 to $176.3 million in 2025, a 1% year-over-year decrease.
Speaker #1: Contributing to 9% of our total revenue mix. While the increase was primarily driven by customers bringing forward deliveries due to uncertainty on tariff outcomes, we continue to pursue and engage with new markets as we build our domestic customer pipeline.
Speaker #1: EMEA remains our strongest growth engine, with a 13% year-over-year revenue increase, growing to $211.9 million in 2025 compared to $187.7 million in 2024. This region again accounted for approximately half of our total revenue.
Speaker #1: In Asia-Pacific, revenue declined slightly from $177.7 million in 2024 to $176.3 million in 2025, a 1% year-over-year decrease. While we navigate the current regulatory landscape in South Korea, we remain focused on the long-term potential of the region via our capacity expansions.
Rodney Worthen: While we navigate the current regulatory landscape in South Korea, we remain focused on the long-term potential of the region via our capacity expansions. Now turning to slide 11, we'll walk through our cash flow performance for 2025. We generated a net positive operating cash flow of $75.9 million, a significant improvement compared to $2.8 million in 2024. The net loss for the year was primarily offset by $27.1 million decrease in inventory, non-cash adjustments of $33.1 million in D&A, $38.3 million impairment disposal and write down, and $39.1 million from changes in fair value of our warrant liability and convertible loan. This was partially offset by $54.6 million increase in net receivables, and $11.1 million decrease in net liabilities and accrued expenses.
Rodney Worthen: While we navigate the current regulatory landscape in South Korea, we remain focused on the long-term potential of the region via our capacity expansions. Now turning to slide 11, we'll walk through our cash flow performance for 2025. We generated a net positive operating cash flow of $75.9 million, a significant improvement compared to $2.8 million in 2024. The net loss for the year was primarily offset by $27.1 million decrease in inventory, non-cash adjustments of $33.1 million in D&A, $38.3 million impairment disposal and write down, and $39.1 million from changes in fair value of our warrant liability and convertible loan. This was partially offset by $54.6 million increase in net receivables, and $11.1 million decrease in net liabilities and accrued expenses.
Speaker #1: Now, turning to slide 11, we'll walk through our cash flow performance for 2025. We generated a net positive operating cash flow of $75.9 million, a significant improvement compared to $2.8 million in 2024.
Speaker #1: The net loss for the year was primarily offset by a $27.1 million decrease in inventory, and non-cash adjustments of $33.1 million in D&A, $38.3 million in impairment, disposal and write-down, and $39.1 million from changes in fair value of a warrant liability and convertible loan.
Speaker #1: This was partially offset by a $54.6 million increase in net receivables and an $11.1 million decrease in net liabilities in accrued expenses. Net cash used in investing activities totaled $16 million.
Rodney Worthen: Net cash used in investing activities totaled $16 million in 2025, primarily from $19.8 million in capital expenditures towards our Huzhou 3.2 expansion line, and partially offset by $3.8 million in asset disposals. From financing activities, we used $2.7 million in net cash, which included $85.7 million in new bank borrowing and $28.8 million in gross proceeds from the sale of common stock, offset by $96.1 million in repayments and $18.9 million in deferred CapEx. Finally, after recognizing $2.5 million in foreign exchange gain, we ended the year with a net increase in cash of $59.6 million, bringing our total cash equivalents, and restricted cash to $169.2 million as of year-end. Now I will turn the call over back to Mr.
Rodney Worthen: Net cash used in investing activities totaled $16 million in 2025, primarily from $19.8 million in capital expenditures towards our Huzhou 3.2 expansion line, and partially offset by $3.8 million in asset disposals. From financing activities, we used $2.7 million in net cash, which included $85.7 million in new bank borrowing and $28.8 million in gross proceeds from the sale of common stock, offset by $96.1 million in repayments and $18.9 million in deferred CapEx. Finally, after recognizing $2.5 million in foreign exchange gain, we ended the year with a net increase in cash of $59.6 million, bringing our total cash equivalents, and restricted cash to $169.2 million as of year-end. Now I will turn the call over back to Mr.
Speaker #1: In 2025, primarily from $19.8 million in capital expenditures towards our Hujo 3.2 expansion line, and partially offset by $3.8 million in asset disposals. From financing activities, we used $2.7 million in net cash, which included $85.7 million in new bank borrowing and $28.8 million in gross proceeds from the sale of common stock, offset by $96.1 million in repayments and $18.9 million in deferred capex.
Speaker #1: Finally, after recognizing $2.5 million in foreign exchange gain, we ended the year with a net increase in cash of $59.6 million, bringing our total cash, cash equivalents, and restricted cash to $169.2 million as of year-end.
Speaker #1: Now, I'll turn the call over back to Mr. Wu to go over our outlook for 2026 and closing remarks.
Rodney Worthen: Wu to go over our outlook for 2026 and closing remarks.
Rodney Worthen: Wu to go over our outlook for 2026 and closing remarks.
Speaker #2: Thank you. Please turn to slide 13. As we look ahead to 2026, we are entering a phase of business defined by strategic agility. While we expect continued revenue growth, our 2026 profile is being carefully assessed against the backdrop of evolving tariff structures and the shifting geopolitical dynamics.
Yang Wu: Thank you. Please turn to slide 13. As we look ahead to 2026, we are entering a phase of a business defined by strategic agility. While we expect to continue the revenue growth, our 2026 profile is being carefully assessed against a backdrop of evolving tariff structures and the shifting geopolitical dynamics. Our priorities remain clear, and we will continue to focus on high-margin deliveries. Our strategy is built on three actionable pillars, innovate, expand, and capture. We are future-focused, expanding our portfolio with specialized products and services as we strive to define the industry benchmark for performance and efficiency. We are supporting growth by symbolizing our production increases with accelerating customer demand while continuously optimizing workflows to reach a cash flow positive state. We are pursuing market share by transitioning our validated technologies from a development to full-scale deployment in high-margin segments.
Yang Wu: Thank you. Please turn to slide 13. As we look ahead to 2026, we are entering a phase of a business defined by strategic agility. While we expect to continue the revenue growth, our 2026 profile is being carefully assessed against a backdrop of evolving tariff structures and the shifting geopolitical dynamics. Our priorities remain clear, and we will continue to focus on high-margin deliveries. Our strategy is built on three actionable pillars, innovate, expand, and capture. We are future-focused, expanding our portfolio with specialized products and services as we strive to define the industry benchmark for performance and efficiency. We are supporting growth by symbolizing our production increases with accelerating customer demand while continuously optimizing workflows to reach a cash flow positive state. We are pursuing market share by transitioning our validated technologies from a development to full-scale deployment in high-margin segments.
Speaker #2: Our priorities remain clear, and we will continue to focus on high-margin deliveries. Our strategy is built on three actionable pillars: innovate, expand, and capture.
Speaker #2: We are future-focused, expanding our portfolio with specialized products and services as we strive to define the industry benchmark for performance and efficiency. We are supporting growth by synchronizing our production increases with accelerating customer demand.
Speaker #2: While continuously optimizing workflows to reach a cash flow positive state, we are pursuing market share by transitioning our validated technologies from development to full-scale deployment.
Speaker #2: In high-margin segments. Ultimately, our forward strategy is clear: accelerate our path to profitability by optimizing R&D to production cycles and scale with margin integrity.
Yang Wu: Ultimately, our forward strategy is clear: accelerate our path to profitability by optimizing R&D to production cycles and scale with margin integrity. We are aiming to strike a balanced approach with our industry-leading margins, one that maintains the operational efficiencies we fought hard for in 2025, while absorbing the planned costs associated with the ramp-up of our Huzhou phase 3.2 expansion. This expansion remains our primary operational catalyst for the year. We are on track to achieve serial production in 2026. Phase 3.2 is a critical milestone that brings online the capacity necessary to meet upcoming demand for our next-generation cell technology. Looking at our global pipeline, we continue to see robust interest across EMEA, North America, and APAC.
Yang Wu: Ultimately, our forward strategy is clear: accelerate our path to profitability by optimizing R&D to production cycles and scale with margin integrity. We are aiming to strike a balanced approach with our industry-leading margins, one that maintains the operational efficiencies we fought hard for in 2025, while absorbing the planned costs associated with the ramp-up of our Huzhou phase 3.2 expansion. This expansion remains our primary operational catalyst for the year. We are on track to achieve serial production in 2026. Phase 3.2 is a critical milestone that brings online the capacity necessary to meet upcoming demand for our next-generation cell technology. Looking at our global pipeline, we continue to see robust interest across EMEA, North America, and APAC.
Speaker #2: We are aiming to strike a balanced approach with our industry-leading margins—one that maintains the operational efficiencies without hardball in 2025—while absorbing the planted costs associated with the ramp-up of our Hujo Phase 3.2 expansion.
Speaker #2: This expansion remains our primary operational catalyst for the year. We are on track to achieve serial production in 2026. Phase 3.2 is a critical milestone that brings online the capacity necessary to meet upcoming demand for our next-generation cell technology.
Speaker #2: Looking at our global pipeline, we continue to see robust interest across EMEA, North America, and APAC. Our business development teams are focused on high-barrier-to-entry segments.
Yang Wu: Our business development teams are focused on high barrier to entry segments, specifically heavy industrial and transit, where Microvast's vertical integration and technology provide a clear competitive advantage. Toward the end of 2025, we made a targeted investment in our Crossville facility to establish a pack assembly line, expanding our domestic capabilities and supporting anticipated customer demand. Customer deliveries are expected from the pack line in 2026 and additional updates throughout the year are anticipated. To summarize, our goals for 2026 remain set on three core objectives, achieving our production ramp-up milestones, protecting our margins despite market volatility, and diversifying our customer base into stable, high-value market. This disciplined approach is necessary for us to navigate near-term headwinds while continuing to build long-term value for our shareholders. Thank you very much, everyone, for joining us today.
Yang Wu: Our business development teams are focused on high barrier to entry segments, specifically heavy industrial and transit, where Microvast's vertical integration and technology provide a clear competitive advantage. Toward the end of 2025, we made a targeted investment in our Crossville facility to establish a pack assembly line, expanding our domestic capabilities and supporting anticipated customer demand. Customer deliveries are expected from the pack line in 2026 and additional updates throughout the year are anticipated. To summarize, our goals for 2026 remain set on three core objectives, achieving our production ramp-up milestones, protecting our margins despite market volatility, and diversifying our customer base into stable, high-value market. This disciplined approach is necessary for us to navigate near-term headwinds while continuing to build long-term value for our shareholders. Thank you very much, everyone, for joining us today.
Speaker #2: Specifically, heavy industrial and transit, where Microvast vertical integration and technology provide a clear competitive advantage. Toward the end of 2025, we made a targeted investment in our Cross-Vail facility to establish a pack assembly line, expanding our domestic capabilities and supporting anticipated customer demand.
Speaker #2: Customer deliveries are expected from the pack line in 2026, and additional updates throughout the year are anticipated. To summarize, our goals for 2026 remain set.
Speaker #2: Our focus is on three core objectives: achieving our production ramp-up milestones, protecting our margins despite market volatility, and diversifying our customer base into stable, high-value markets. This disciplined approach is necessary for us to navigate near-term headwinds while continuing to build long-term value for our shareholders.
Speaker #2: Thank you very much, everyone, for joining us today. While 2025 presented its share of challenges, it was also a year where Microvast proved its resilience, achieving record annual revenue and a significant shift toward profitability, with new products and opportunity on the horizon.
Yang Wu: While 2025 presented its share of challenges, it was also a year where Microvast proved its resilience, achieving record annual revenue and a significant shift toward profitability with new products and opportunity on the horizon. We look forward to updating you on our progress at Huzhou and our ongoing operational plans in the coming months. Operator, that concludes our prepared remarks.
Yang Wu: While 2025 presented its share of challenges, it was also a year where Microvast proved its resilience, achieving record annual revenue and a significant shift toward profitability with new products and opportunity on the horizon. We look forward to updating you on our progress at Huzhou and our ongoing operational plans in the coming months. Operator, that concludes our prepared remarks.
Speaker #2: We look forward to updating you on our progress at Hujo and our ongoing operational plans. In the coming months, operator, that concludes our prepared remarks.
Operator: This is the conference operator, and this concludes the webcast. Thank you for joining Microvast Full Year 2025 Earnings Call. You may now disconnect.
Operator: This is the conference operator, and this concludes the webcast. Thank you for joining Microvast Full Year 2025 Earnings Call. You may now disconnect.