What Microvast (MVST) Said on Its Q3 Earnings Call

Key Points

• Revenue and profitability plunged: Q3 revenue fell 62.8% year over year to about $46 million as sales volumes dropped, while gross margin slid to 5.2% from 37.6%. Microvast reported a $76.8 million net loss, with inventory write-downs and asset impairments adding pressure.
• Liquidity and debt are major concerns: The company used $65.4 million in operating cash during the first nine months and ended Q3 with $124.4 million in cash, cash equivalents and restricted cash. Management is negotiating with lenders and exploring asset sales, and said substantial doubt about the company’s ability to continue as a going concern remains.
• Demand weakened across key markets: Sales declined sharply in Europe and Asia-Pacific amid softer commercial vehicle demand and reduced customer orders; U.S. revenue also fell. Management is cutting costs, while future production expansion depends on demand, financing and working capital.

Microvast NASDAQ: MVST reported a steep drop in third-quarter revenue and a $76.8 million net loss as weaker commercial vehicle demand, inventory write-downs and asset impairments weighed on the battery manufacturer’s results.

Chief Financial Officer Rodney Worthen said revenue fell $77.5 million, or 62.8%, from the prior-year quarter, to approximately $46 million. Sales volume declined to about 190 megawatt-hours from 502 megawatt-hours a year earlier, as customers in Europe and Asia-Pacific reduced orders amid softer demand for heavy trucks, port equipment and mining equipment.

Founder, Chairman and CEO Yang Wu said the company is focused on cutting costs, preserving liquidity and addressing near-term debt maturities. He said substantial doubt about Microvast’s ability to continue as a going concern has not been alleviated.

Margins and earnings deteriorate

Third-quarter gross margin fell to 5.2% from 37.6% a year earlier. Worthen said a $9.3 million write-down of obsolete inventory reduced the margin by 20.4 percentage points. Lower sales volumes, pricing pressure and reduced absorption of fixed manufacturing costs also compressed margins, he said.

Operating expenses rose to $69 million from $31.6 million, including $35.7 million in non-cash impairment charges tied primarily to operations in China, Germany and the United States. Worthen said the impairment testing was triggered by the decline in sales, gross margin and operating performance.

Microvast recorded a non-GAAP adjusted net loss of $76 million, compared with adjusted net profit of $11.9 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization were negative $60.8 million, versus positive $21.9 million in the prior-year quarter.

General and administrative expenses included a $5.1 million provision for a proposed litigation settlement. Worthen said the company’s self-insured retention is capped at $10 million, with remaining costs and fees expected to be covered by insurance. He cautioned that court approval and completion of the proposed settlement are not assured.

Regional demand and liquidity

European quarterly sales fell 64% to $27.8 million, while Asia-Pacific sales declined 65% to $13.5 million. Worthen cited softer demand and reduced orders from longstanding customers in both regions. In Asia-Pacific, he also pointed to regulatory and geopolitical dynamics and a shift toward lower-cost products in India.

U.S. quarterly revenue fell 31% to $4.5 million. Worthen attributed the decline primarily to the company’s largest customer bringing product into 2025 amid uncertainty about tariffs.

For the first nine months of 2026, revenue fell 41.5% from the same period in 2025, while gross margin declined to 24.4% from 36.6%. The company reported a $40.6 million GAAP net loss and a $96 million adjusted net loss for the nine months.

Microvast used $65.4 million in operating cash during the nine-month period, compared with $59.5 million generated a year earlier. It ended the quarter with $124.4 million in cash, cash equivalents and restricted cash, down $44.8 million after foreign exchange adjustments.

Wu said Microvast is negotiating with lenders to refinance, extend or restructure near-term debt and is exploring options including asset sales. The company is also reducing operating costs, deferring some discretionary capital spending and making targeted workforce reductions. The cost program is not fully implemented, and its cash costs have strained and may continue to strain liquidity, he said.

Manufacturing and research updates

Microvast has completed installation and commissioning of Phase 3.2 production equipment at its Huzhou, China, facility, Wu said. The ramp-up depends on factors including customer demand, production yields, qualification and working capital. Without a significant increase in volume, the line will operate below designed capacity.

At the company’s Clarksville, Tennessee, facility, the pack assembly line is substantially complete, but resuming full-scale construction depends on additional financing and strategic partnerships, Wu said.

Microvast also reported preliminary laboratory results for its solid-state and silicon-sulfur battery programs. Wu cautioned that both remain at an early prototype stage and require further validation, testing, scale-up and customer qualification; the laboratory results do not establish commercial readiness.

About Microvast (NASDAQ:MVST)

Microvast Holdings, Inc develops and manufactures lithium-ion battery technologies and energy storage solutions. The company offers battery cells, modules and packs, along with related battery components and systems designed for commercial vehicles, specialty vehicles, passenger vehicles and stationary energy storage applications.

Microvast emphasizes a vertically integrated approach that spans battery materials, cell development, manufacturing and system integration. Its product portfolio includes battery technologies based on different chemistries and form factors, allowing it to serve applications with varying requirements for energy density, power, safety, charging performance and operating life.

Founded in 2006 and headquartered in Stafford, Texas, Microvast serves customers in the United States, Europe and Asia.

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