Nuvve Q2 2024 Earnings Report

Nuvve EPS Results

• Actual EPS: -$268.00
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Nuvve Revenue Results

• Actual Revenue: $0.80 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Nuvve Announcement Details

• Quarter: Q2 2024
• Date: 8/13/2024
• Time: N/A
• Conference Call Date: Tuesday, August 13, 2024
• Conference Call Time: 5:00PM ET

Nuvve (NASDAQ:NVVE) Corporation is a clean energy technology company specializing in vehicle-to-grid (V2G) solutions that enable electric vehicles to serve as distributed energy resources. Through its proprietary Grid Integrated Vehicle (GIVe) software platform, Nuvve aggregates electric vehicle batteries into a virtual power plant to provide grid services such as frequency regulation, peak shaving and demand response. The company’s technology supports bidirectional charging hardware and integrates with public charging networks, fleet vehicles and stationary energy storage systems.

Founded in 2010 and headquartered in Newark, California, Nuvve began as the Nevada Electric Vehicle Accelerator before rebranding to reflect its expanded global mission. Since its inception, the company has deployed V2G projects in North America and Europe, collaborating with utilities, charging-station operators and commercial fleets. These pilots have demonstrated how managed charging and discharging of EV batteries can capture value for fleet operators, reduce electricity costs and enhance grid stability while facilitating the integration of intermittent renewable energy sources.

Operating in multiple regions including the United States, Europe and the Asia-Pacific, Nuvve works with automakers, municipalities and energy providers to scale V2G infrastructure and services. Under the leadership of CEO Gregory Poilasne, the company continues to advance its software and hardware offerings, aiming to make two-way EV charging widely available. By bridging the transportation and energy sectors, Nuvve positions itself at the forefront of the global shift toward electrification and smarter, more resilient power grids.

Nuvve Q2 2024 Earnings Call Transcript

Key Takeaways

• The company no longer expects to reach its $15M–$20M 2024 revenue guidance due to project delays and timing of EPF funding awards, and will not update its forecast.
• Nuvi launched a joint SPV with Wise EV LLC to accelerate public EV charging deployments in Nevada using debt financing and non-dilutive prepaid services.
• Q2 revenue declined to $802K from $2.12M a year ago, driven by reduced charger hardware sales and delayed EPA funding awards.
• Megawatts under management rose 35.3% year-over-year to 27.1 MW, reflecting growth in EV chargers and stationary batteries deployments globally.
• Cash operating expenses (excluding non-cash charges) fell to $5.4M in Q2 from $7.3M a year ago, and the company expects these lower costs to continue.

Presentation

[Operator]

Please note this event is being recorded. On today's call are Gregory Poilasne, Chief Executive Officer, and David Robson, Chief Financial Officer of Nuvve. Earlier today, Nuvve issued a press release announcing its second quarter 2024 results. Following prepared remarks, we will open up the call 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 Nuvve'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.

[Operator]

These risk factors are discussed in Nuvve's filings with the SEC and in the earnings release issued today, which are available on our website. Nuvve undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances. With that, I would like to turn the call over to Gregory Poilasne, Chief Executive Officer of Nuvve. Gregory?

[Gregory Poilasne, CEO at Nuvve]

Thank you, and good afternoon to everyone here today. Thank you for joining our second quarter 2024 results call. We are pleased to have the opportunity to update you on the progress we believe we are making in scaling our business and positioning Nuvve for future growth. This second quarter has remained challenging for Nuvve, as school districts have been awaiting EPA funding approval letters before placing orders. The good news is that the EPA funding rounds 2 and 3 are finally moving forward, but after significant delays. This situation forced us to be more aggressive and review our operational processes tightly. We are now seeing orders picking up, and we expect that the following 3 quarters will see significant increase. But that also means that some recognized revenue expected in 2024 will slide into 2025.

[Gregory Poilasne, CEO at Nuvve]

This is disappointing, but doesn't change our view on the school bus business in the long run. Concerning our project in Fresno, we had a great event in July, where the different parties got together for a breaking ground event. This allowed us to share more details about the project and help other customers understand the value that Nuvve platform can bring for such development. As a reminder, Nuvve software platform provides the ability to manage and optimize site-level EV charging and behind-the-meter solar and battery storage, and to aggregate resources across multiple sites to participate in ancillary services and grid service markets. This allows fleet operators to save money, transition to EV fleets faster, and optimize capital asset life. We also expect our other project in collaboration with Taiwan Power Company to kick off soon, as we are finalizing a contract with e-Formula, our local partner.

[Gregory Poilasne, CEO at Nuvve]

Expect to hear more soon on this project with a total deployment of 90+ charging stations. In the meantime, our pipeline of projects on the island is also expanding. As a reminder, you can find more details on our V2G hub projects on our hub website, www.nuvvev2ghubs.com. I now have some exciting news to share with you. To further expand the deployment of our technology, we have been working with a new partner, Wise EV, LLC, headquartered in Nevada. Through this relationship, we're excited to announce the launch of our joint SPV, special purpose vehicle. This SPV targets a deployment of public infrastructure on a first site in Nevada, leveraging a very attractive source of funding from NV Energy.

[Gregory Poilasne, CEO at Nuvve]

We expect this to be the first in a series of planned SPVs that allow us to accelerate Nuvve technology deployment, save money for EV drivers by providing attractive energy cost pricing and reliable equipment, and bring non-dilutive cash to Nuvve in the form of prepaid services. This first SPV will be financed through debt provided to the SPV for a total project cost of about $1.5 million. An event scheduled in Las Vegas on Thursday will allow us to promote the next set of projects. The consumer public infrastructure segment is not new to Nuvve. You might remember our engagement with Circle K last year in Europe. We believe this is a key segment that requires a deep integration into the electric system, and that is also supported by a significant amount of funding from various governments around the world.

[Gregory Poilasne, CEO at Nuvve]

We believe the SPV structure we have adopted makes our future revenue more forecastable and provides cash upfront. On the other hand, revenue recognition happened on a longer period. When we planned our 2024 revenue forecast in late 2023, we guided full year 2024 revenue to range between $15 million-$20 million. However, given project delays we are experiencing with some of the large customers and delays occurring in the timing of EPA funding award, as well as the structure of the project we are making for future revenue, we believe that we no longer anticipate we will achieve the $15 million-$20 million revenue target this year. Given the difficulty in forecasting the timing to convert our backlog and pipeline to revenue, we'll not be updating our revenue guidance for 2024.

[Gregory Poilasne, CEO at Nuvve]

Finally, earlier this quarter, we had announced we had engaged Cappello Global, a Los Angeles-based investment bank, in order to work on our strategic investment. This process is underway, and we hope to share an update with you over the next few months. The SPV is a good indication of our vision. In the meantime, we are managing our cash tightly. Now, I will let David take you through the details of our financials. David?

[David Robson, CFO at Nuvve]

Thanks, Gregory. I will start with a recap of second quarter 2024 results. In the second quarter, we generated total revenues of $802,000 , compared to $2.12 million in the second quarter of 2023. The decrease was primarily driven by the reduction in charger hardware sales and the related timing of EPA funding awards this year versus the prior year. Year-to-date, through June 30, 2024, total revenues were $1.6 million, which compares to $4 million for the prior year period. The year-over-year decrease in revenues is also primarily driven by the reduction in charger hardware sales due to the timing of EPA funding awards this year versus last year.

[David Robson, CFO at Nuvve]

Margins on products, services, and grant revenues were 24.9% for the second quarter of 2024, compared to 8% for the year ago period. Year-to-date margins through June 30, 2024, were 29.9%, compared with 14.2% for the year ago period. The increase is primarily due to improved pricing on hardware sales and a higher mix of service and grant revenues this quarter compared with last year. Excluding grant revenues, margins on product and service revenues were 10.1% for the second quarter of 2024, compared to 4.8% in the year ago period. As a reminder, margins can be lumpy from quarter to quarter, depending on the mix.

[David Robson, CFO at Nuvve]

DC charger gross margins at standard pricing generally range from 15%-25%, while AC charger gross margins are approximately 50%, but in dollar terms, are a smaller fraction of the revenue of a 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 $6 million for the second quarter of 2024, compared to $7.5 million for the first quarter of 2024, and $8.5 million for the second quarter of 2023. We have continued to drive efficiencies in 2024, resulting in lower overhead costs. We expect the lower operating costs we have realized this quarter to continue in future quarters.

[David Robson, CFO at Nuvve]

Cash operating expenses, excluding cost of sales, stock compensation, and depreciation and amortization expense, declined to $5.4 million in the second quarter of 2024, versus $6.3 million in the first quarter of 2024, and $7.3 million in the second quarter of 2023. Other income was $1.8 million in the second quarter of 2024, up from $0.3 million in the year ago quarter. The current period benefited from a non-cash gain from the change in the fair value of warrants. Net loss attributable to Nuvve common stockholders decreased in the second quarter of 2024 to $3.9 million, from a net loss of $8 million in the second quarter of 2023.

[David Robson, CFO at Nuvve]

The improvement was primarily a result of lower operating expenses and non-cash gains from the change in the fair value of warrants this quarter compared to the second quarter of 2023. Now, turning to our balance sheet. We had approximately $1.4 million in cash as of June 30, 2024, excluding $500,000 in restricted cash, which represents a decrease of $0.1 million from December 2023. The decrease was primarily a result of $8.7 million used in operating activities. Subsequent to the quarter ended June 30, 2024, in August, we received $1 million in proceeds from a short-term loan, which will be paid off in monthly payments with interest through March of 2025.

[David Robson, CFO at Nuvve]

During the quarter, inventories decreased by $0.1 million-$6 million at June 30, 2024, as we continue to reduce inventory levels. The net decline in inventory during the quarter was partially offset by the recording of LCFS credits at customer sites generated during the same period. Accounts payable at the end of the second quarter of 2024 was $1.9 million, an increase of $0.4 million compared to the first quarter of $1.5 million. Now, turning to our megawatts under management and estimated future grid service revenues.

[David Robson, CFO at Nuvve]

As a reminder, megawatts under management is a metric we use to quantify the aggregated amount of electrical capacity from the deployment of our V1G and V2G chargers, which are primarily deployed in the electric school bus market in the U.S. 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 second quarter increased 1.7% over the first quarter of 2024, to 27.1 megawatts from 26.6 megawatts. A 35.3% increase compared to the second quarter of 2023. In terms of its composition, 7.1 megawatts were from stationary batteries and 20 megawatts were from EV chargers.

[David Robson, CFO at Nuvve]

We continue to expect further growth 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 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 June 30, 2024, our hardware and service backlog decreased to $18.2 million, a decrease of $0.8 million from $19 million reported at March 31, 2024. The decrease is related to the conversion of backlog into sales this quarter, in addition to adjustments to contract amounts with two customers.

[David Robson, CFO at Nuvve]

Year-to-date, backlog in 2024 has increased by $14.3 million from $3.9 million at December 31, 2023, which is primarily related to a large hub project in Fresno, California, which was closed during Q1 of this year. That concludes my portion of the prepared remarks. Gregory, back to you to conclude.

[Gregory Poilasne, CEO at Nuvve]

Thanks, David. So this quarter, 2024, the second quarter, 2024, has remained challenging. We are very focused on closing on the large projects we have been awarded while the school bus segment is getting back on track. We also believe that expanding our reach within segments where we can bring significant value and where government support is strong, will allow us to diversify our sources of revenue and bring more quarter-to-quarter stability. These are also deployments where we feel like we have good control on the timing. Finally, we hope to share the progress we are making on our strategic path soon. Thank you.

[Operator]

We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Again, if you have a question, please press star, then one. Seeing no questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Gregory Poilasne for any closing remarks.

[Gregory Poilasne, CEO at Nuvve]

Again, I want to thank you for listening to us today, and looking forward to sharing more with you in the very near future. Bye-bye.

[Operator]

The conference is now concluded.

Participants

Executives

• David Robson, CFO
• Gregory Poilasne, CEO