Beam Global Q4 2024 Earnings Call Transcript

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Provided by Quartr
April 11, 2025

Key Takeaways

  • 2024 revenues of $49.3 million more than doubled any prior full-year result (excluding 2023), driving a five-year revenue CAGR of 68%.
  • Gross margin improved to 15% GAAP (21% adjusted), up 13 percentage points year-over-year due to engineering design changes, material cost reductions and operational efficiencies.
  • Uncertainty in U.S. federal EV strategy and new tariffs have slowed government orders, reducing reliance on federal customers and causing lumpiness in the order cadence.
  • Strategic expansion into Europe, the Middle East and Africa—including a Serbia acquisition—allows lower-cost production, CE certification and defense against U.S. tariffs.
  • Beam Global introduced a diverse product portfolio (BeamSpot, BeamBike, BeamPatrol, BeamWell, BeamScoot) and a reseller network to drive growth and pursue recurring-revenue models.
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Earnings Conference Call
Beam Global Q4 2024
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Operator

Good day, and welcome to the Beam Global Year End twenty twenty four Operating Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead, ma'am.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

Thank you. Good afternoon and thank you for participating in Beam Global's year end twenty twenty four operating results conference call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, President, CEO and Chairman of Beam. Desmond will be providing an update on recent activities at Beam followed by a question and answer session.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

First, I'd like to communicate to you that during this call, management will be making forward looking statements, including statements that address Beam's expectations for future performance or operational results. Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10 ks and other periodic reports filed with the SEC. The content of this call contains time sensitive information that is accurate only as of today, April 11. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

Next, I would like to provide an overview of our financial results for Beam's year of 2024. Our 2024 revenues are $49,300,000 more than double any previous year's revenue in the company's history, excluding 2023. It's January increase over 'twenty two revenues. And additionally, we have a five year revenue CAGR of 68%. We believe that this decrease in revenue is a result of order timing and uncertainty in the U.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

S. Government's zero emission vehicle strategy related to the presidential election. These matters have mainly impacted our larger federal customers, and we do not believe that they signify any fundamental reduction in global demand for our products. We have continued to invest in our sales resources with new hires in both The U. S.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

And Europe in 2024, and we have further expanded our selling resources who are paid when they achieve sales, so they do not cost us money. Our backlog as of December 31 is $5,600,000 We generated a positive gross margin for the twelve months ending 'twenty four of 15% compared to 2% in 2023, an improvement of 13 percentage points year over year. Our gross profits included a $3,100,000 for noncash depreciation and intangible amortization, which negatively impacts our profits. Net of these noncash items, our gross margin was 21%. The continued improvement in gross margin is primarily because we are able to recognize the engineering design changes to our EV ARC that resulted in cost reductions to our bill of materials and labor efficiencies.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

Additionally, there were reductions in material costs as a result of purchasing discounts as well as operational improvements and positive margins generated from the acquisitions in Europe. Additionally, our engineering and operations teams continue to identify further cost reductions and efficiencies, which, along with the support from our Europe acquisition, we believe as our revenue grows in the future, our fixed overhead absorption will continue to improve, resulting in improved gross margin. Our operating expenses for 2024 were $19,000,000 compared to $17,500,000 in 'twenty three. If you back out the $400,000 positive impact of the noncash expenses, which is non GAAP, and back out the full year operating expenses for the Europe acquisition of $3,800,000 The increase year over year is $1,600,000 which is mainly attributable to salaries and benefits of $700,000 related to the new hires that we did in 'twenty four, 400,000 related to outside services, partially related to the acquisition and $400,000 related to marketing expenses. Our loss from operations was $11,700,000 for the year ended 'twenty four compared to $16,300,000 for 'twenty three.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

When you back out the noncash, non GAAP items that included $3,700,000 for depreciation and amortization, dollars 3,300,000.0 for stock based comp and $400,000 for the allowance for credit loss, offset by the $4,700,000 change in the fair value of contingent consideration liabilities pertaining to the true up of the earn out payment for the Amiga acquisition, the noncash loss from operations was $8,900,000 for 'twenty four compared to loss from operations of $11,800,000 for 'twenty three. The non GAAP loss from operations decreased 24% year over year due to the increased gross profit of the 13 percentage points in 'twenty four and the management of our operating expenses. As for our cash balance at December of 'twenty four, it was $4,600,000 compared to $10,400,000 at the end of 'twenty three. The cash decrease between 'twenty three and 'twenty four included cash payments for our acquisitions of $3,200,000 Net cash used for operating activities was $2,200,000 for the twelve months ended December of 'twenty four compared to $13,300,000 for the same period in 'twenty three. We have historically met our cash needs through a combination of debt and equity financing and more recently through our increasing gross profit contributions.

Lisa Potok
Lisa Potok
Chief Financial Officer at Beam Global

I will now turn the call over to Desmond to provide a business update.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Right. Thank you, Lisa, And thank all of you for joining us for Beam Global's twenty twenty four full year earnings call and for your support on this fantastic company. I'm probably going to repeat a couple of things that Lisa said because I think there were some couple of very important comments that she made there. So just bear with me while I do that. I'm speaking to you tonight from Belgrade in Serbia, where I'm spending a few days before going to Abu Dhabi and Dubai early next week.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Earlier today, I was in Bucharest where I spoke to a congress of over 100 mayors and other government leaders about the value and importance of being global products in their markets. I'm doing the same in Abu Dhabi and in Dubai. And when I'm finished there, I'll spend a week in Spain with our partners, Hefei, as we crisscross the country meeting with prospective customers. While in Bucharest, also met with our first Romanian customers who now have EV ARC systems operating in that country. I was honored to speak to the Congress of Mayors where Beam Global received the award for the most innovative product in sustainable transportation infrastructure.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

There was an impressive array of products and solutions at this very well attended Congress. So being selected as the most innovative and best product was an honor and recognition indeed of the tremendous value that Beam Global's products deliver to our customers. There's tremendous investment in Romania at the moment in transportation infrastructure with funds coming from the European Union and other sources. We never have an active and we now have an active and successful reseller in Romania. So I look forward to further expanding our opportunities in this market.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

But there's so much opportunity in Europe, The Middle East and Africa for Bean Global's products, and it certainly is very appropriate that we're focusing on taking advantage of those opportunities. Anybody who hasn't been sleeping under a rock for the last couple of months will know that the market conditions in The United States are far from ideal at the moment. Things were already challenging for everybody in the EV or sustainability spaces with the new administration's decidedly negative view on these fantastic new technologies. And now the tariffs have raised a whole new level of uncertainty within our industry and across the broader markets. It's hard to comment too much on the impact of the tariffs at the moment because no one really knows, and they're changing daily.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

But suffice it to say that we have good defenses in play for just about anything that can come down the pipe where tariffs are concerned. It's a great thing that Veeam Global is in a position to take advantage of a massive new set of opportunities, which are neither subject to the Trump administration's tariffs or negative outlook on electric vehicles. I've been spending a lot of time on this side of The Atlantic, and I intend to continue to focus a lot of my time and energy on expanding our opportunities in Europe, The Middle East and Africa. The current business development trip I'm on is a good example of that. Now I know a lot of you don't have time to listen to this entire call, so I'm going to start out by giving you a few headlines.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

As Lisa said, Beam Global's revenue in 2024 was more than 2x greater than any full year in our history except for 2023. Our five year cumulative annual revenue growth rate stands at 68%, an incredible rate of growth. Sales to non government entities increased dramatically throughout the year with corporate sales contributing 64% of our total in the fourth quarter. In 2024, we increased our gross margins from 1.3 to 15% GAAP. But gross profit net of noncash is running at over 21%, that we brought in over CHF 10,000,000 of cash from CHF 50,000,000 in revenue.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Our cash burn, net of acquisition related spend, was less than GBP 400,000 a month. We're getting more efficient every day, and our gross profit contributions are increasingly paying our bills. We have about GBP 14,000,000 in working capital, which gives us about thirty five months of run rate on our current cash and cash like resources. We remain debt free. Our continuing gross margin improvement puts us on a trajectory for positive cash flow this year.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Tariffs and other negative impacts to global economy could have an impact on this trajectory, but what is clear is that the actions that I and the management team are taking have set us on the right path where the things that are within our control are concerned. We expanded Bean Global's business in 2024 through another acquisition. We the most significant expansion of our product portfolio in our history. We implemented the most significant geographic expansion in our history. We continue to win new patents in both our energy storage and infrastructure businesses.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We generated recurring revenue from a new business model. We initiated a program of resellers, agents and distributors as a sales force multiplication strategy without adding to our operating costs. To sum up, while we're facing some of the most challenging times we've ever seen in The U. S, the steps we've taken to expand geographically and with our new product portfolio have set us up for success regardless of what takes place in The United States over the next couple of years. Going to have a couple of rough quarters for sure.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Q4 twenty twenty four illustrated that. And frankly, we're going to see a bit more of the same in the first quarter of twenty twenty five. This is a matter of timing. We've previously derived a great deal of our revenue from sales to the U. S.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Federal government of our EV ARC product. We were not expecting this election result until late in 2024. Now we're in the process of transitioning to sales to non U. S. Federal government customers and have a vastly expanded product portfolio.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

This doesn't happen overnight. It's a process, not an event. But we have all the pieces in place, and we're executing on our plan. And now for more detail on some of the above comments. 2024 was indeed a year of tremendous expansion for Being Global.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It was a year in which we introduced more new sustainable transportation and energy security products in the last quarter than we've done in the last decade. It was also a year in which we expanded geographically into markets with billions of potential new customers for Beam. We completed another acquisition in Serbia, which will make our products less expensive, more effective and harder to compete with. We won new patents as we continue to build our intellectual property portfolio. Using our technological differentiation, we won new customers with unique requirements that we believe only we can fulfill.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

With these strategic moves and others, we've created a platform for growth, which is unlike anything that we've had in the company's history. It's a very good thing that we've taken all these steps over the last couple of years because in The U. S. At least, we're operating in a period of uncertainty and challenge, which is unlike anything that we've seen. Let's deal with the elephant in the room.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We've had an election. It's no secret that the new administration has less than favorable views about electric vehicles, unless, of course, we're talking about the new Tesla, which the president just bought. The administration seeks to end the tax incentives for electric vehicle ownerships and the provision of low interest loans for auto manufacturers to make electric vehicles. They further want to halt the purchase of electric vehicles by federal agencies and to halt the purchase of electric vehicle charging infrastructure. Even more perplexing, the administration has instructed the General Services Administration or GSA to switch off existing electric vehicle charging stations, which are already paid for by the taxpayer and to find ways to get rid of the electric vehicles they already own.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

This is perplexing because with the money to buy them already spent, savings on electric vehicles are very obvious. We've heard from the GSA that this move will cost taxpayers about $1,000,000,000 And then, of course, the government will have to buy diesel and gas vehicles to replace all the electric ones they're getting rid of and pay for the fuel and maintenance and other costs associated with these moving forward. Goodness knows what we'll do in four years. Now I personally don't agree with this move on any level. It's gonna be expensive for the taxpayer, and I'm one of them.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It'll do nothing to prevent the inevitable electrification of transportation, but it may put us further behind the Chinese than we already are. From Beam Global's point of view, the administration's position on electric vehicles has created a new set of challenges for us and a significant impact on our pipeline of U. S. Sales opportunities. In the past, federal revenues have accounted for more than 50% of our total, and the pipeline which we publish is full of opportunities from federal buyers that, prior to the election, we had very good reason to believe would turn into revenues in the fairly short term.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It's important to note that none of these opportunities have gone away. That's to say that materially none of these buyers have contacted us and told us that they don't intend to move forward at some point. They remain interested in our products. However, we have to be realistic. We have to assume that the administration does what it says and therefore these federal opportunities, which I'm still certain will happen in the future because as I said, the electrification of transportation is inevitable, may take far longer than we anticipated to come to fruition.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I do believe that the federal government will return to being a significant opportunity for us in the future. In fact, the delays caused by the current administration may, in the long run, improve Beam Global's position of the federal government. At some point, they'll have to start restart, rather, electrifying their fleets. And the later they leave it, the more urgency they'll have for the installation of EV charging infrastructure. Urgency is our favorite word because we have the fastest deployed and most scalable EV charging infrastructure solutions available in the world today.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Just one more thought on the new administration. It turns out we have much more in common with them than many people might think. For over a decade, Beam Global has been espousing secure, inexpensive, reliable American energy. While we do not agree with the drill, baby, drill mantra or with reversing the great progress that American companies have made with electric vehicles and infrastructure, we do agree with the administration when it comes to sourcing energy locally and ensuring that America is an energy powerhouse moving into the next decade. I'll be spending time in Washington, D.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

C. In the coming months meeting with members of the Trump administration and showing them how B Global products, which are made in America, often by veterans, provide excellent energy security and an opportunity to grow onshore U. S. Industry. So while the federal government may not present a good opportunity for EV charging infrastructure at the we do believe that there may be other opportunities with our energy security products once we've had a chance to describe and demonstrate them to the new administration.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It's also really important to point out that though the federal government may be slowing down its efforts, there are many states like California, for example, and the 17 states that link their emission standards to California's who are doubling down on their electrification of transportation efforts. California is our largest state customer. New York City is our largest municipal customer. Neither of them show any indication of reversing the progress that they've made with EVs. On the contrary, if anything, we're seeing a return to increased activity from these entities.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It's also part of pointing out that while the Trump administration may not like electric vehicles, the consumer still does. Contrary to what you might have heard in the media, EV sales are up about 30% in The United States in the beginning of this year. Cadillac anticipates that fully onethree of its sales this year will be electric vehicles. EV sales continue to be a bright spot for many manufacturers, and American consumers are showing in droves that they like electric vehicles and they want more and more of them. This will increase demand for the charging infrastructure, and we're seeing some of that increase through a return to sales to non governmental entities as well as those efforts which I already mentioned in places like California, New York.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

In the meantime, the rest of the world continues to electrify transportation at a pace. Our international expansion moves have given us great opportunities for growth in the largest markets in the world for our products, but they've also created excellent defensive positions for us as we seek to continue our multiyear trend of growth even though even if we don't win meaningful sales to the U. S. Federal government. Another effect of the new administration policies is the potential impact that tariffs may have on our business.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We are consumers of steel, aluminum and copper and have many other parts and components which come from countries which are currently threatened with tariffs or operating under them. Our products are BABA compliant, which means that they comply with the Buy America, Build America requirements that certain federal and other government agencies have when buying products. We've historically endeavored to source materials and components from U. S. Producers wherever possible.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So achieving BABA compliance did not require significant changes to our manufacturing or purchasing process. For example, we typically only use U. S. Steel to make our products. It is, however, impossible in this day and age to make any complex product without sourcing at least some components from overseas.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Nevertheless, our historic reliance on U. S. Produced raw materials and components ought to reduce the impact of any tariffs on foreign imported items. Unfortunately, we've experienced rises in U. S.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Produced materials prices, which have already come about as a result of the new tariffs. For example, steel prices have increased in The U. S. As steel manufacturers and vendors react to the new pricing structures faced by importers. This is, of course, to be expected where any global commodities are concerned.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Here again, our moves into Europe are proving to be extremely beneficial for us. Our European operation based in Serbia is not subject to U. S. Tariffs, except when we bring components from there to The U. S.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

This means that we're able to procure out steel, aluminum and other materials without being subject to any new pricing. Well, I mean, except to the extent that global prices increase because of trade wars. I've mentioned before that we're able to produce our EV ARC product in Serbia less expensively than we can in The United States. This will be even more true in the new tariff environment in which we all have to operate, possibly. However, being global should have excellent protections in place to defend us from increasing costs as we leverage our Serbian operations in the coming months and quarters.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We'll be in a very special position of being able to continue to produce our products and sell them to customers in the largest markets in the world without being impacted by the tariffs to the same extent that we would have been had we not made these expansive moves into Europe. Serbia is on President Trump's tariff list for one of the highest tariff percentage rates because, as it happens, Serbia sells more to The United States than The United States sells to Serbia. However, the absolute numbers are minuscule. So we believe that it's very likely that in the event that tariff rates are negotiated, as has been suggested by the current administration, Serbia will end up in the lowest bracket. Jared Kushner has real estate development plans in Belgrade and President Trump's son recently visited.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We view these as good signs that Serbia will receive a receptive audience for reduced or zero tariffs. If that does end up being the case, we'll continue to use our Serbian operations to further reduce our cost of goods sold in The United States as well as for producing products for all the other new markets we're addressing. So just to summarize where we are as a result of the new administration. While it's true that we expect to see some reduction in federal orders in the coming months and quarters, we believe that our diversification moves have actually put us in an excellent position to continue to grow the company. What have we lost?

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

The opportunity to sell EV ARC products to federal entities in the short term. What have we gained? Billions of potential new customers in the expanded geographic markets to whom we can sell all of the new products which we've introduced in the last six months. And as I said, we believe that we've not lost the federal sales and that they have simply moved right and will give us opportunities for further growth, perhaps with more urgency when they return. The transition to these new customers, new markets and new products will inevitably create a certain degree of lumpiness in our order cadence and revenues.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We can actually see this as we look at the second half of twenty twenty four when we had a reduction in federal orders in the third and fourth quarters. And though we had impressive increases in enterprise sales, they were not enough to offset the reduction in federal sales during those periods when compared to our historically high 2023 revenues. Q1 of twenty twenty five is being similarly impacted, though we have solid plans in place to mitigate these negative influences throughout the rest of this year. Our 2024 revenues of approximately GBP 50,000,000, but still more than double any full year in our history except for 2023. But remember, in 2023, we increased our revenues from GBP 22,000,000 prior year to just under GBP 70,000,000.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Our five years revenue run rate now stands at $6,000,000.9000000 dollars 20 2 million dollars 60 7 million dollars and for 2024, '50 million. That's a five year CAGR, as I already said, of 68%. Twenty twenty three was heavily impacted by the single largest order that we've ever received from the U. S. Army.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

That $30,000,000 purchase order had to be delivered quickly because the Army needed charging infrastructure at speed which no one else in the industry could deliver. Had we pushed some of those revenues into 2024, we would not be talking about a decline in revenues today at all. Similarly, had we never received that order, we wouldn't be talking about a decline in revenue today because our five year revenues would have been $6,000,000 9 million dollars 20 2 million dollars 30 million dollars and then 50,000,000 That might have made a prettier revenue growth chart and paradoxically made us look like more of a growth engine than we do now. But the simple truth is, from a management point of view, looking at our growth over five years and considering all the new opportunities which we have through our new products and new geographies, we still feel strongly that Beam Global has only continued to enhance our growth potential. Looking at the composition of our revenues, shooting in the second half of twenty twenty four, is also enlightening.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We actually received more purchase orders in Q4 than we did in Q4 of twenty twenty three and also more than in Q3 of twenty twenty four when we first started seeing the impact of the potential from the election. Importantly, our enterprise orders increased by 49% during that time and actually made up 64% of our Q4 orders. This is the first time in a couple of years that enterprise orders have been greater than government orders, which is a testament to our efforts to increase our sales to corporate entities. Our European operation has also contributed meaningfully. About a quarter of our 2024 revenue came from our new European operations.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I've said it before, and I continue to believe that being global will actually derive more revenues outside of The United States in the future. And I say that still firmly believing that we'll continue to see sustained growth when viewed across more than a few quarters. The lion's share of our revenues in 2024 were still derived through the sale of EV ARC, with the majority of those in The United States. In 2025, we expect to see increases in contributions from our new portfolio of products and from the new geographies into which we're selling. To put it simply, while we've historically been a one country, one product and largely one customer company, we're now truly an international organization with a diverse portfolio of products, all of which appear to have a great deal of appeal to a far more diverse set of prospective customers.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So the really good news in 2024 revenue numbers is that they demonstrate that Beam Global can create meaningful revenues growing in new sectors even without material contribution from U. S. Government customers. Two trends are important to note here. The first is our five year CAGR, which is already noted is just under 70%.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

The second, perhaps more important trend is that we've increased sales to non government customers in The U. S. And we've increased sales to our European entity. By the way, that's also true of the legacy businesses which we acquired in Europe. Even though our European operations concentrate heavily on setting up the factory facilities to make EV ARCs and also on training their people to sell those products, they were still able to grow the legacy business of selling street lighting and other powered steel structures and smart cities products while they were at it.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Another very important trend to make note of is our improving gross profitability. During the Q3 twenty twenty four earnings call, I reported that our unit level gross margins on EV ARCs were running in the 40% to 50% range. That's to say, every time we sell an EV ARC, we retain almost half of the revenue to offset our overhead costs. This is a dramatic and continued improvement. Our full year GAAP gross profits of 15% show again a significant improvement over prior year.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

And remember, we did higher volumes in the prior year, which means that our fixed overhead allocations were shared amongst a larger unit number of units, and yet we were still able to improve gross margins in 2024. Adjusted gross margins, removing noncash contributions and costs, came in at about 21.2% or over $10,000,000 This gross profit contribution is incredibly important to us because we're getting very close to producing enough of to cover all of our overheads and generate positive cash flow. In fact, if we maintain the gross profitability trend of 2024 and do the same revenue in 2025 that we did in 2024, in other words, no growth, then we would generate sufficient gross profit to cover all of our overhead costs. Let me say that again. Maintaining our gross profitability trend and replicating 2024 revenue gets us to cash flow.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Now of course, the entire Veeam team is working hard to generate growth in 2025, and we believe that we have the tools and opportunities to do that. But it's still useful to know that we now have the business operating at a level where even without growth, we can achieve positive cash flow. Possible that the impact of tariffs and other recessionary impacts on the economy could scuffle these plans, but we're not ignoring that prospect. And as I've already mentioned, we're taking advantage of our European expansion and operations in Serbia and in The Middle East and Africa to minimize the risk from those sorts of eventualities taking place in The U. S.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

In 2024, we still had some legacy backlog of EVARTs, which did not deliver at the new increased price. We also had not implemented all of the cost savings, which we're now taking advantage of. At the same time, we had several significant onetime uses of cash, mostly related to the acquisitions of both EMEA and Telkom. Now in 2025, materially all EV ARC sales will be made at the new increased price. Our COGS will be reduced by the cost savings that we've implemented, and we have no further cash outlays related to either of those acquisitions.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So again, even without growth or any further improvement in our gross profit, we're on track to reach positive cash flow this year. Not surprisingly, we're not planning for no growth in revenues, and we're certainly not planning to have no more improvement in our cost structure. Just another example of how vastly superior Beam Global is today to where it was just a couple of years ago before we had all these excellent elements of our evolution, which both reduce risk and drastically improve our opportunities. The faster cash flow has been assisted by our continued discipline where spending is concerned. During 2024, we held our operating costs steady even with the acquisitions and all the other developments we made.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We've historically always operated on a tight cash budget. It's one of our specialties. We continue to have no debt and our credit facility is still intact and untouched. We have enough cash and other cash and other contributors to working capital like AR and inventory of completed products, all of which we convert to cash in short periods of time so that we have sufficient financial resources to continue our operations to that period where we believe that we can be cash flow positive. Of course, at that time, we'll have a whole new universe of opportunities open to us as the business creates enough free cash to cover overhead and pay our bills.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Our two main areas of focus to create growth in 2025 will be geographic expansion and winning sales for our legacy products, products, but especially for the new and exciting products that we brought to market in the fourth quarter of twenty twenty four. Those new products include BeamSpot, Beam Bike, Beam Patrol, Beam Well and Beam Scoop as well as our street lighting, power electronics and energy storage product portfolios. We've already made the first sale of BeamSpot, and our engineering teams are working to optimize that product for more general rollout this year. Our BeamBike product is a combination of charging infrastructure and electric bicycles, which we deliver in a bundle. This product is an excellent fit for bike sharing programs across cities, resorts and tourist destinations, bike rentals and large campuses and even logistics requirements.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Beam Patrol is another product bundle, which provides rapidly deployed charging infrastructure and four law enforcement liberated electric motorcycles from our new partner, Zero Motorcycles. Recently, we were in Austin, Texas at a speedway for MotoGP, where Zero Motorcycles was offering test rides of their product directly from our Beam Patrol product. It was a fantastic event, lots of dual marketing opportunities and tremendous exposure for both Beam and Zero. Last week, we were at Broadway Pier in San Diego for TEVCON, which is a law enforcement and military trade show where first responders and others who serve are exposed to new technologies which can improve their missions. Here again, we had BEAM Patrol with zero motorcycles liberated for law enforcement.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

The response has been absolutely fantastic. And again, we've got lots of dual marketing opportunities for this. BeamWell is our war and disaster zone product, which provides electricity, fresh water and e mobility. BeamWell is rapidly deployed anywhere that is a requirement for those essential services. The system is already on its way to The Middle East, and I'll be visiting Jordan at the April to present a new product to a broad gathering of authorities in the region.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

It's utterly unique, very timely and creates tremendous value for the people that it serves. And also, I believe it will for being global too. We're thrilled to think that this life saving technology will be in Gaza soon if the Israelis permit it, and we have reason to believe they will. We also have some interesting ideas and plans to promote BeamScoop, which I'm looking forward to sharing with you through our normal marketing channels in the coming months as its launch. As you're thinking about Beam Global's prospects for 2025, you should be aware that the revenue generated from these new products is not the same as we've historically generated from EV ARC alone.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Let me give you the rundown. Beam Bike, when sold as a bundle with a dozen electric bicycles, will revenue for over $100,000 Beam Patrol, complete with four police liberated electric motorcycles, will generate revenue of $170,000 Beam Well sells for around 130 And Beam Scoot, when bundled with four electric scooters, will sell for a little over $100,000 When you consider that our average selling price for EV ARC has been around $70,000 you can perhaps see why we're confident that with this new range of products, particularly with all the new geographies into which we're selling, should put us in a position for significant revenue, whether or not we do much U. S. Federal government or EV ARC business this year. We've been very busy with the new product development and with geographic expansion because we're still aggressively focused on creating significant growth opportunities for this company, no matter what politics throws at us.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

But it's not all about new products. We're continuing to aggressively sell the legacy products that we acquired through both acquisitions we made in Serbia, and we're improving upon them. For example, having been a well respected manufacturer of streetlights for thirty years, because of our excellent engineering capabilities, we're now able to begin the process of integrating sensors, artificial intelligence, machine learning and network effects. So in the future, we'll be able to offer existing and new customers options where street lighting and other intelligent street furniture is concerned. They can continue to buy straightforward hardware solutions from us or they can like to buy more complex and intelligent solutions, which deliver multiple layers of value to them and to their constituents.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We intend to offer these product solutions either as capital sales or through finance options and perhaps one I'm most excited about as a service, creating meaningful sources of recurring revenue for Beam Global. The event, which I've just spoken at, in Bucharest, was largely focused on so called smart city solutions, and I was proud to note that Beam Global's product portfolio solves for more challenges than any other company I saw while I was there. That's probably why we won the Innovation Award. And it's not just new products that we're able to offer our customers. We've also introduced new business models, most notably with the success of our Driving on Sunshine sponsorship program with VINCI Airports.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

This recurring revenue model is a further new opportunity for Bing Global to create new sales and new recurring revenue stream without having to significantly invest in evolving our business. Earlier this year, I spent a month on a sales tour down the Aegean Coast and in Greece with our European sales team. It was an intense tour, seven days a week, breakfast, lunch and dinner, meeting with prospective customers like mayors, airports, local governments, EV charting companies, bike sharing companies and other entities who can gain value through owning our products. The reaction was overwhelmingly positive everywhere we went. We found customers with the same challenges and the same needs, and we were able to demonstrate to them how our portfolio of products solve for both.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I've never actually seen such a high ratio of positive reactions during a series of sales meetings. Now I'm back in Europe and returning to The Middle East to do it again. I'm convinced that these activities and the activities of our other sales team members will bear fruit. This combination of new and exciting products selling into new and expanded geographies, many of whom have even greater urgency than we find in The United States, is why I remain confident that we now have greater opportunities for growth than we've ever had in our history. Our method of selling is changing too.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Historically, we've made all of our sales with a small internal sales team. In the second half of twenty twenty four, we evolved our selling strategy to include agents, resellers and distributors. In fact, many of the meetings I had during my last European and Middle Eastern tours were set up by our external selling teams. And the same is true of this trip. In fact, this time, I'll actually spend more time with external selling resources than with our internal teams.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

The AV ARCs, I just saw in Romania, were sold by outside sales resources. What this means is that we now have a far expanded sales team, but because these external resources are only compensated when they sell products, we don't have similarly expanded operating costs. This evolution of our selling team goes hand in hand with our growth priorities of strategic and product portfolio expansion. It means that we can take our greatly expanded product portfolio and sell it into greatly expanded geographic opportunities but without having to invest significantly or even at all in expanded operating costs. In the second half of twenty twenty four, we added a new Vice President of Sales in The United States.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

He comes to us with a career built upon expanding outside sales teams. He's an expert in the art and he's going to be focused on the majority of his efforts in 2025 on sales force multiplication through the addition of these types of resources. Similarly, in Europe, we added Igor Lobovich, who his experience is very similar. Igor has also spent his professional career building reselling networks, except for him in Europe. We're also getting significantly increased exposure through the excellent new partnerships we've signed.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

As I just mentioned, our partner in the electric motorcycle arena, Zero Motorcycles, is already working with us to expand sales of their products with ours as we bundle their motorcycles onto our Beam Patrol product. In the last two weeks, we've seen just how much customer prospects love that bundle in both Texas and San Diego. And our Australian partner, Benzino Xero, who also has headquarters in Italy, is working with us to expand our sales into the Australian market and through representation in Italy. Benzino Zero is our partner for ruggedized scooters for our BEAM Well product and also for electric bikes to be integrated onto our BEAM bike product for bike sharing programs, resort and tourist town sales and anywhere where people want to operate electric bikes and are challenged by the infrastructure requirements, like New York City, for example. Our reseller relationships have already resulted in sales of EV ARC products in Romania, where I was earlier today, and Spain and The Middle East, and we're tracking opportunities in the Caribbean, Central And South America and on the African continent.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Never in our history have we had so many opportunities to sell so many different types of products into so many new markets. All of this without significant investment and while managing our operating costs in The United States. While all of this is going on, our engineering and product development teams are continuing to improve our products and the methods we use to make them. The result of this is that the products are better while costing less. Notably, in Europe, we recently received CE certification.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

This is a huge benefit to us as with the CE Mark, our products are now able to be sold across the European Union. The CE Mark also helps in The Middle East and Africa. In The United States, we're making an excellent progress with our updated UL certifications. These UL certifications are mostly important to federal customers and as such, they become less important to our sales because, as I mentioned earlier, we believe that federal sales will be a less important part of our revenue generation this year. Nevertheless, the modifications that we're making to the product as we go through the updated UL certification process is, we believe, going to result in further significant improvements to our products while we continue to concentrate on cost reductions.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So we're removing into the remaining three quarters of twenty twenty five with improved existing products, a vastly expanded product portfolio and even more vastly expanded set of geographic opportunities and with our direct and operating costs firmly under control. We've never had more opportunity for growth, and we remain debt free and have sufficient financial means to continue to execute on our plan. The public markets continue to be challenging for Bean Global and in fact for everybody in our space just about every other space at the moment. The new administration has created challenges to our sales opportunities, but we've actively and aggressively managed our business such that even in these extraordinary circumstances, we've defended ourselves from the possible downsides associated with these developments, while at the same time, creating the greatest opportunity for growth in our history. Remember, we used to be one product, one country and essentially one customer.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We now have a dozen products operating 18 nations and addressing countless others where billions of people live and work, who can be positively impacted by our products. During a recent all hands on deck meeting, I said to our employees, times are tough, but we are tougher. That's absolutely true. We're not idle for one moment in 2024, and we won't be in 2025. We took all the steps reasonably available for us to continue Beam Global's trajectory to becoming a highly profitable global player in the new energy and transportation industries, which was inevitable as they are massive.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I'm confident that the Beam team will continue this hard work and focus through 2025, which promises to be a seminal year in our history, a year in which we become truly global and in which we create positive cash flow and with it all the opportunities that, that milestone enables. As I said, the markets are tough at the moment. None of us expected to see our share price where it is. None of us expected to see the external pressures that we've experienced and that everybody else has experienced. But we're going to continue to do our job, keep our noses to the grindstone and keep up with this excellent expansion.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

That concludes my comments for the moment. And I'll now hand it back to the operator, and I look forward to answering your questions. Operator?

Operator

Thank you. We will now begin the question and answer session. And your first question today will come from Tate Sullivan with Maxim Group. Please go ahead.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Tate. How are you?

Tate Sullivan
Senior Research Analyst at Maxim Group

Hi. Hello, hello, Devin. Thanks for having an update. Can you review your product introduction time line in terms of the new products? Do you have prototypes for many of the products, including the Streetlight product?

Tate Sullivan
Senior Research Analyst at Maxim Group

And I mean, are you expecting initial sales from many of these products this year? Or could it stretch into 2026 as well, please?

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I'm certainly expecting sell them in 2026. But no, I got to tell you, I think what the interest that we're seeing in Beam Bike, particularly, actually, people love Beam Bike. Everywhere I go, people love BeanBike. And that was a product that we actually developed to save lives, to allow people to charge their bicycles outdoors instead of plugging them in their apartments and burning themselves to death when the batteries catch on fire, which unfortunately sometimes do. But we've seen a lot of interest in The U.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

S. And in Europe for Beam Bike. Beam patrol, I think, has got a lot of potential as well with law enforcement, border patrol and others both in The U. S. And in Europe.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

These electric motorcycles are really getting traction with those law enforcement communities, but they just don't want to figure out how to do the charging infrastructure or can't. So we solve that for them. BeamSpot, we've already sold. We are making some dramatic improvements to that. That was that's not to be that surprising.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We did that with EV ARC as well. And BeamScout is the last one that we haven't really sort of officially done the marketing launch on that, but again, very popular. And then BeamWell, we've already sold that. It's on its way to The Middle East now. So we can say we've sold Beamwell, we've sold BeamScout BeamScout, rather.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

And I believe we're going to get a lot of traction with bike and motorcycle products as well.

Tate Sullivan
Senior Research Analyst at Maxim Group

And on Beamwell, the desalination equipment, do you work with an outside provider? You do not do that yourself? Or how do you integrate that into your equipment, please?

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

That's absolutely right. The desalination has been around for a long time. I had my first experience of it four years ago when I went to sea as a young engineer. On ships, we had to turn saltwater into freshwater, of course, so there wasn't any other source. So it's been around for a long time.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So I was very comfortable with it. And when this opportunity came up to create this life saving product for NGOs in Gaza, I immediately knew what we had to do. And so yes, we've tried and tested technology. We don't have any risk where that's concerned. Our European team has done a fantastic job of integrating desalination plant onto the BeamWell product and also the four ruggedized electric scooters to give the e mobility to deliver the food and water to those people who badly need it and medical supplies as well, by the way.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

So it's all tried and tested technology. And it's based on our EV ARC platform, so therefore, covered by those patents and CE rated. So we're in a great spot where that's concerned. As I say, it's the first is already on its way to The Middle East now. And I'll be there to well, to welcome it, frankly, at the April.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

And we already have a significant array of very interesting parties who will be reviewing that. And then we have one in particular who we're working with to take it into Gaza.

Tate Sullivan
Senior Research Analyst at Maxim Group

And last for me, please, on recurring revenue. I think I caught your comments on so it's the sponsorship revenue. And is that most of it now? But then is there also a Amiga product maintenance recurring revenue? Or is that going forward on some of the smart city products?

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

We have some recurring revenue around maintenance, but I'm much more interested in these new models. Certainly, the sponsorship model, as you know, I've talked about that for a long time. It me a long time to get that done. And in the end, I didn't. Our European team did it.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Bless them. But I think where you're to see us go, Tay, is we are going to increasingly, as we add more and more intelligence to these Smart Cities products, we already have great relationships. This Romania trip has just been fantastic for me, this Congress of Mayors, seeing their response to our smart cities products. They want this intelligence. And some of them will want to make capital purchases for it.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

But even when they do, there's going to be a data, a recurring revenue stream from data. And then I sincerely believe that in the future, we will offer these entire things, hardware, software and data as a service and so create some good recurring revenue. And by the way, that's the perfect use for our line of credit. We've got fixed price on that. We know how much the money costs.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

That would be a perfect time to dip into that line of credit to deploy infrastructure, which we can then take a recurring revenue stream. And of course, the simple arithmetic to figure out how to cover the cost of the money and then make a profit on top of it.

Tate Sullivan
Senior Research Analyst at Maxim Group

Thank you, Devin. Have a good trip in there.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Thank you, too. The best.

Operator

Our question and answer session. I would like to turn the conference back over to Desmond Wheatley for any closing remarks.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

Well, that was not very many questions. Okay. Great. I must have covered everything. Listen, as I said earlier, the markets, the share price, I feel it very, very deeply.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I have my entire net worth wrapped up in this company. I'm impacted just like everybody else's. I could never have imagined that we would find ourselves in the position that we're in right now. But I'm disciplined and so is the BEAM team. We're disciplined to keep on with our jobs and keep doing what we're doing.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

And as you've heard in my comments, the level of expansion in 2024 within a very, very disciplined cost structure has been breathtaking. I'm proud of what the team has done, and I know they're going to continue to do. And I believe in the markets. I believe that this is a cycle. And I believe that as we keep doing what we're doing and get to cash flow and profitability and keep developing great new products and unique new products and selling it to great customers in expanded geographies, that we will have a fantastically successful company and that the markets eventually will reward us for that.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

I can't guess at what the administration or what politics is going to do over the next couple of years, but even that's a cycle. And it will come to an end. In the meantime, we're going to keep our nose to the grind. And you can count on us to work very, very hard to maximize the value of this company in every way that's within our control. And with that, I thank you very much for your time and your attention.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

And please continue to support us. And if you have any comments or you want to talk to us directly, get in touch with Luke Higgins, who's our internal IR resource. He is ready and waiting for your calls and e mails. And that goes to just comments about how much information you're receiving I hope you're all receiving a hell of a lot more information than you'd used to from us, and we intend to continue with that.

Desmond Wheatley
Desmond Wheatley
Chairman, Chief Executive Officer & President at Beam Global

If you don't want to read it, just don't open it. We're going to keep letting you know what we're up to. Okay. Thank you, everybody.

Operator

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

Executives
    • Lisa Potok
      Lisa Potok
      Chief Financial Officer
    • Desmond Wheatley
      Desmond Wheatley
      Chairman, Chief Executive Officer & President
Analysts
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