Nuvve Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 14, 2024

There are 4 speakers on the call.

Operator

Good morning, and welcome to the Nuvi Holding Corporation First Quarter 2024 Earnings Conference Call. All participants will be in listen only mode. After today's presentation, Please note this event is being recorded. On today's call are Gregory Quillon, Chief Executive Officer and David Robson, Chief Financial Officer of Nuvi. Earlier today, Nuvi issued a press release announcing its first quarter 2024 results.

Operator

Following prepared remarks, we will be opening the call up for questions. Before we begin, I would like to remind you that this call may contain forward looking statements. While these forward looking statements reflect Nuvi's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward looking projections. These risk factors are discussed in Nuvi's filings with the SEC and in the earnings release issued today, which are available on our website. Nuvi undertakes no obligation to revise or update any forward looking statements to reflect future events or circumstances.

Operator

With that, I would like to turn the call over to Gregory Quillane, Chief Executive Officer of Nuvi. Gregory?

Speaker 1

Thank you, and good afternoon to everyone here today. Thank you for joining our Q1 2024 results call. We are pleased to have the ability to update you on the progress we are making in scaling our business and positioning Nuvi for our future growth. The global environment in the electric vehicle space remains tough. The negative perception is real, especially in the consumer space.

Speaker 1

We can also see that through the outcome of companies such as Piscare, Tritium and in the free space such as Proterra. Since Snooey became a public company, our focus has been on the school bus business, which is heavily supported by EPA funding. This funding is essential for school districts to adopt clean transportation and bring the cost of school buses down. The current process of releasing funding makes the adoption a curriculum like in nature. School districts are waiting for the outcome of the funding before making the decisions.

Speaker 1

The Q1 2024 has always been expected to be in between 2 different fundings and we have no need to be soft. We remain very excited about our leadership position in the school bus space and it's still one of our key revenue drivers for 2024, so it makes the revenue very lumpy. In order to smooth out our revenue and expand our business, we have recently announced 2 key projects. The first one is with the Fresno Economic Opportunities Commission. In January, we announced that NUI had been selected by the Board of $16,000,000 transportation and renewable energy project.

Speaker 1

I can share with you today that we have signed a contract with Fresno EOC to execute on this project when key subsidies have been finalized, which we expect to be over the next 60 days. As a reminder, this project includes the deployment of 60 plus charging stations, 2.5 Megawatt of solar generation and 1.6 Megawatt hour of batteries. Nuvi will not only drive the project development, but through its GIVE platform, Nuvi will manage the energy on the sites for the next 10 years. We are proud to support the Fresno EOC in achieving its vision in deploying clean transportation and renewable energy generation in order to reduce the pollution in the Fresno County. We also now expect that the initial $16,000,000 will be recognized over the next 24 months.

Speaker 1

In February, we also announced that NUV had been selected in partnership with Eformula, a prominent Taiwanese energy solution provider in order to deliver on a project driven by Thai Power Corporation. This project based in Silshu include 90 plus charging station for shuttles, solar and storage. Though the contract negotiations are being finalized, the project is not only exciting on its own, but it opens the door to many other projects on this island. You can find more details on our V2G Hub projects on our Hub website, www.newvv2ghubs.com. As we have announced in 2023, battery deployments are always associated with the EV deployments.

Speaker 1

The capabilities of our platform to manage EV batteries make it perfect to manage both EV and stationary storage or stationary storage alone. In this critical moment of electrification of transportation, our platform is the only one to provide a common place of electrification and energy management while providing grid services. The integration of electric vehicles into the electric system is extremely challenging when also considering for many other segments that are increasing the electric energy consumption. We have always said that V2G is key to such integration. We are pleased to see that a couple of weeks ago was held a very significant conference on V2G in San Diego, the city where Nuvi was founded and where we are headquartered.

Speaker 1

But I keep on asking what is V2gs if it does not provide a service to the end users? V2G is a great technology, but to get it adopted, it requires to articulate the value proposition. We have developed our value proposition around 3 aspects: vehicle readiness guaranteeing to the user the vehicle with ready when they need it energy management, which includes the trade off between charging the vehicle at the lowest cost and providing grid services in order to generate revenue. And finally, battery life extension based on always charging the battery at the exact level that the driver needs. The combination of our GIVE platform that manages the electric vehicle batteries and stationary storage in real time with Astrea, our AI platform for the forecasting allows us to truly provide these services.

Speaker 1

Some of our competitors are reusing these terms very often without experience in doing it. But the first step in DV adoption should never be neglected. The deployment phase where fleet managers are often left alone in making key decisions without the proper information. On our website, www.nuvi.com, you can find multiple testimonials for different customers emphasizing how we have been here to help them execute their EV deployment vision and solve the different problems along the way. I'm proud of newbie's service and the feedback that we are getting.

Speaker 1

Before I pass the microphone to David, I want to reaffirm our expectations for this year's 2024 of $15,000,000 to $20,000,000 of revenue. We are managing our destiny and we are executing our business plan to achieve our target.

Speaker 2

Thanks, Gregory. I will start with a recap of Q1 2024 results. In the Q1, we generated total revenues of $780,000 compared to $1,850,000 in the Q1 of 2023. The decrease was primarily driven by the reduction in charger hardware sales impacted by the timing of EPA funding award. Margins on product and service revenues were 34.7% for the Q1 of 2024 compared to 21.2% in the year ago period.

Speaker 2

The increase is primarily due to a higher mix of service revenues and improved pricing on hardware sales this quarter compared with last year. As a reminder, margins can be lumpy from quarter to quarter depending on the mix. DC charger gross margins at standard pricing generally range from 15% to 25%, while AC charger gross margins are approximately 50%, but in dollar terms are small fraction of the revenue of the DC charger. Grid service revenue margins are generally 30%, while software and engineering service margins are as high as 100%. Operating cost, excluding cost of sales was $7,500,000 for the Q1 of 2024 compared to $7,900,000 for the Q4 of 2023 and $8,300,000 in the Q1 of 2023.

Speaker 2

We have continued to drive efficiencies through 2023 and into 2024, resulting in lower overhead costs. We expect to realize additional improvements in our operating expenses in future quarters this year. Cash operating expenses excluding cost of sales, stock compensation and depreciation and amortization expense declined to $6,300,000 in the Q1 of 2024 versus $6,900,000 in the Q4 of 2023 and $7,200,000 in the Q1 of 2023. Other income was $500,000 in the Q1 of 2024, up from $200,000 in the year ago quarter. The current period benefits from a non cash gain from the change in the fair value of warrants.

Speaker 2

Net loss attributable to Nuvi common stockholders decreased in the Q1 of 2024 to $6,700,000 from a net loss of $7,700,000 in Q1 of 2023. The improvement was primarily a result of lower operating expenses this quarter compared to the Q1 of 2023. Now turning to our balance sheet, we had approximately $5,300,000 in cash as of March 31, 2024, excluding $500,000 in restricted cash, which represents an increase of $3,700,000 from December 2023. The increase was a result of net capital raise of $8,500,000 during the quarter, primarily offset by $4,700,000 used in operating activities. During the quarter, inventories increased $5,200,000 to 6 $100,000 at March 31, 2024 as we purchased additional DC charging stations to support our sales pipeline.

Speaker 2

Accounts payable at the end of the Q1 of 2024 decreased by $200,000 to 1,500,000 dollars At the end of the Q1 of 2024, the balance sheet reflects the addition of a warrant liability related to warrants issued in connection to our capital raise in January. The warrants were valued at $3,800,000 on the issuance date and $3,100,000 at March 31, 2024, resulting in a $700,000 gain during the quarter recorded to other income. Now turning to our megawatts under management and estimated future good service revenues. As a reminder, megawatts under management is a metric we use to quantify the aggregated amount of electrical capacity from the deployment of our V1 gs and V2 gs chargers, which are primarily deployed in the electric school bus market in the U. S.

Speaker 2

And in light duty fleet deployments in Europe, in addition to stationary batteries. Currently, these chargers and batteries are located throughout the United States, Europe and Japan. Megawatts under management in the Q1 increased 6% over the Q4 of 2023, 26.6% from 25.1%, a 45.4% increase compared to the Q1 of 2023. In terms of its composition, 7.1 Megawatts were from stationary batteries and 19.5 Megawatts were from EV chargers. We continue to expect an acceleration in our megawatts under management as we go through the remainder of the year and continue to commission our backlog of customer orders we have earned in 2023 and the beginning of 2024.

Speaker 2

In addition to new business, we anticipate winning, which we have visibility to in our pipeline for both EV chargers and stationary batteries. Now turning to backlog. On March 31, our hardware and service backlog reached a milestone record for Nuvi at $19,000,000 increasing by $15,100,000 from 3,900,000 December 31, 2023. Our hub project in Fresno, California, which we closed during Q1 of this year, was the primary driver of the increase. That concludes my portion of the prepared remarks.

Speaker 2

Gregory, back to you to conclude.

Speaker 1

Thanks, David. Though this Q1 2024 has been soft, this does not come as a surprise. Our expectations for 2024 have not changed. Risks. We expect the school bus business to pick up in the 2nd and third quarter with the EPA round 2 and round 3.

Speaker 1

We are also executing on the awards that we have received at the beginning of the year with some of them contributing to our 2024 revenue. We look forward to sharing more with you in the near future.

Operator

Our first question comes from Brian Dobson with Chardan. Please go ahead.

Speaker 3

Hey, it's Greg Hendy in for Brian Dobson. Just a question, in light of the $15,000,000 to $20,000,000 in revenue guidance and right now it looks like the inventory uptick to I think you said $6,100,000 dollars How much what do you think a normalized year end inventory level could be? Do you think it could be around $2,000,000 or just trying to get a feel where the $15,000,000 to $20,000,000 how much you can burn off for working capital and inventory? Thanks.

Speaker 2

Hey, Greg. I think that inventory level can come down a couple more $1,000,000 between now and the end of the year. Of course, it really depends on the timing of when we deliver orders. But I think about it is, call it, longer term 3 to 4 months of inventory on hand of future sales.

Speaker 3

Okay, thanks. And then just one more question. You mentioned EPA rounds hitting in 2Q and 3Q. Can you kind of give us a little bit more color on notable dates that we should be looking out for within those two quarters?

Speaker 1

David, do you want me to take that? Greg,

Speaker 2

you just cut out one second. Can you just repeat it one more time? I didn't hear.

Speaker 3

Sure. Sorry about that. Just in light of the EPA rounds hitting in 2Q and 3Q, can you call out any notable dates we should be looking out that would be publicly released on some of these school bus orders or timelines?

Speaker 2

From what Gregory said in his remarks is really the timing of when we see those announcements coming out in the Q2 to Q3 timing, but I don't have any more precision than that.

Speaker 3

Okay. No problem. All right. And maybe I have

Speaker 1

to answer more the question there is really about when we get the orders from the school districts, right? So with the round 2, there are a few there are some that could be larger orders and so we might publicize that. But it's really the timeline is really in the hand of the school districts very often, right.

Speaker 3

Okay, understood. Okay, that's all I have. Thanks.

Speaker 2

Thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Gregor Leigh Quillan for any closing remarks.

Speaker 1

We appreciate everybody listening in today, and we are looking forward to sharing more with you of the progress we are making. We are very excited about 2024 and on and looking forward to our communication about Q2. Thank you. Bye bye.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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Key Takeaways

  • Q1 2024 revenues were $780,000 versus $1.85 million a year ago, driven lower by the timing of EPA funding awards, while overall margins rose to 34.7% on a higher mix of service revenues and improved hardware pricing.
  • Nuvi signed a $16 million Fresno Economic Opportunities Commission project to deploy 60+ charging stations, 2.5 MW of solar and 1.6 MWh of batteries, with its GIVE platform managing site energy for 10 years and revenue recognized over 24 months.
  • In partnership with Eformula, Nuvi is finalizing a Thai island project featuring 90+ chargers, solar and storage, opening doors to additional regional opportunities.
  • Nuvi’s integration of its GIVE and Astrea AI platforms uniquely combines V2G, energy management and battery life extension to deliver grid services, cost savings and guaranteed vehicle readiness.
  • The company reaffirmed its 2024 revenue guidance of $15–20 million, citing a record $19 million backlog and expected pick-up in school bus orders from EPA rounds 2 and 3 in Q2/Q3.
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Earnings Conference Call
Nuvve Q1 2024
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