Microvast Q4 Earnings Call Highlights

Key Points

• Microvast reported a record annual revenue of $427.5 million (up 12.6%) but saw gross margin decline to 28.6% largely due to a $32.5 million inventory impairment that cut margin by about 7.6 percentage points.
• Operating performance improved materially: the company posted an operating profit of $6.98 million, narrowed its GAAP net loss to $29.2 million, and recorded a non‑GAAP adjusted net profit of $13 million with adjusted EBITDA of $44.7 million, while generating $75.9 million in operating cash flow and ending the year with $169.2 million in cash.
• Management is prioritizing manufacturing ramp and product launches — notably the Huzhou phase 3.2 expansion (up to 2 GWh) and a new 55Ah cell — and expects 2026 to focus on achieving serial production, protecting margins, and diversifying high‑value customers despite regulatory and tariff headwinds.

Microvast NASDAQ: MVST reported full-year 2025 results highlighting record revenue growth, improved operating performance, and progress on manufacturing expansion and product development initiatives, while acknowledging market headwinds tied to regulatory and customer ramp timing.

2025 revenue grew to a record, with gross margin impacted by inventory impairment

Founder, Chairman, and CEO Yang Wu said the company delivered “another year of record annual revenue” and emphasized Microvast’s focus on scaling operations while maintaining what he described as industry-leading margins. For the full year, Microvast reported revenue of $427.5 million, up 12.6% from $379.8 million in 2024.

Chief Financial Officer Rodney Worthen attributed the year-over-year growth primarily to higher sales volume, stating that sales volume increased about 16.5%, or 266 megawatt hours. Worthen noted that fourth-quarter revenue of $96.4 million was pressured by “evolving regulatory changes in South Korea” and “customer platform ramp-up delays in EMEA,” though he said full-year results reflected margin and business expansion progress.

Microvast’s full-year gross profit was $122.1 million, and gross margin was 28.6%, down from 31.5% in 2024. Management attributed the change primarily to a $32.5 million inventory impairment charge related to specialized energy storage system (ESS) components, which Worthen said reduced gross margin by 7.6 percentage points. Excluding that non-cash charge, Worthen said underlying gross margin reflected a more favorable product mix and improved manufacturing efficiencies.

Operating results improved; non-GAAP profitability and EBITDA turned positive

On the bottom line, the company reported an operating profit of $6.98 million for 2025, compared with an operating loss of $116.1 million in 2024. Microvast posted a GAAP net loss of $29.2 million, narrowing from a net loss of $195.5 million the prior year.

Wu cited a non-GAAP adjusted net profit of $13 million and non-GAAP adjusted EBITDA of $44.7 million for 2025 as evidence of operating leverage as the company scales. Worthen said adjusted net profit reflected adjustments for $3.1 million in share-based compensation and $39.1 million in fair value changes related to the company’s warrant liability and convertible loan. For comparison, Microvast reported a non-GAAP adjusted net loss of $84.6 million and non-GAAP adjusted EBITDA of -$44.8 million in 2024.

Expenses declined sharply year over year, led by lower share-based compensation

Worthen said operating expenses totaled $118.3 million in 2025, down from $238.3 million in 2024. He highlighted several drivers:

• General and administrative expense fell by $23.7 million (down 29%), primarily due to a $17.4 million reduction in share-based compensation and a $8.6 million favorable foreign exchange impact tied to euro and RMB fluctuations.
• Research and development expense decreased by $7.0 million (down 16.9%), mainly due to a $5.5 million decrease in share-based compensation.
• Selling and marketing expense was described as relatively flat, decreasing $0.4 million (down 1.7%).

Regional revenue mix: EMEA led; U.S. grew sharply; APAC slightly down

Microvast reported differing trends across its major regions in 2025. Worthen said EMEA remained the company’s “strongest growth engine,” with revenue rising 13% year over year to $211.9 million from $187.7 million, representing about half of total revenue.

In the U.S., revenue increased 173% to $39.3 million from $14.4 million, representing 9% of total revenue. Worthen said the jump was “primarily driven by customers bringing forward deliveries due to uncertainty on tariff outcomes,” while adding that the company continues to build a domestic customer pipeline.

Asia Pacific revenue declined 1% to $176.3 million from $177.7 million. Worthen pointed to the regulatory landscape in South Korea as a factor, while reiterating a longer-term focus on capacity expansion in the region.

Manufacturing expansion, product roadmap, and 2026 focus

Wu highlighted operational progress at the company’s Huzhou phase 3.2 expansion, describing it as a key growth driver. He said clean rooms and utility equipment were already in operation, pilot production for the company’s 55Ah cell had begun on electrode section assembly and formation, and no-load tests had started. He added that phase 3.2 is expected to add up to 2 GWh of annual production capacity and is intended to be modular across Microvast’s LBC platform.

Wu also discussed upcoming product launches, including a 55Ah cell intended to combine aspects of the company’s existing 48Ah and 53.5Ah cells, and a next-generation LTO cell aimed at high-power and fast-charging applications such as rail and tram, specialty vehicles, high-torque applications, and automated guided vehicles (AGVs). He also provided updates on all-solid-state battery development, including a 12-layer monolithic stack surpassing 200 cycles with 99.97% coulombic efficiency and a 72-volt monolithic stack completing 100 cycles using an internal series-connected bipolar architecture.

On cash flow, Worthen said Microvast generated $75.9 million in net cash from operating activities, compared with $2.8 million in 2024. He noted the net loss was offset by factors including a $27.1 million decrease in inventory, $33.1 million in depreciation and amortization, $38.3 million in impairment/disposal/write-down items, and $39.1 million from fair value changes, partially offset by a $54.6 million increase in net receivables. The company ended 2025 with $169.2 million in cash, cash equivalents, and restricted cash, after a net cash increase of $59.6 million.

Looking to 2026, Wu said the company expects continued revenue growth but is assessing its profile amid evolving tariff structures and shifting geopolitical dynamics. He described the company’s priorities as focusing on high-margin deliveries while ramping Huzhou phase 3.2, which he said remains the “primary operational catalyst” for the year and is “on track to achieve serial production in 2026.” Wu also said Microvast made a targeted investment late in 2025 at its Crossville facility to establish a pack assembly line, with customer deliveries expected from that line in 2026.

Wu summarized 2026 objectives as: achieving production ramp-up milestones, protecting margins despite market volatility, and diversifying the customer base into stable, high-value markets.

About Microvast NASDAQ: MVST

Microvast Holdings, Inc, traded on NASDAQ under the symbol MVST, is a global provider of advanced lithium-ion battery solutions for transportation and stationary energy storage applications. The company designs, develops and manufactures a range of battery cells, modules and packs tailored to electric buses, commercial vehicles, passenger cars and grid storage systems. Its technology emphasizes fast charging, long cycle life and high energy density to meet stringent performance requirements in demanding operating environments.

Founded in 2006, Microvast has established a vertically integrated platform that spans research and development, pilot production and full-scale manufacturing.

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