Nuvve Holding Corp. (NVVE) Q1 2024 Earnings Name Transcript

Nuvve Holding Corp. (NASDAQ:NVVE) Q1 2024 Earnings Convention Name Could 14, 2024 5:00 PM ET

Firm Individuals

Gregory Poilasne – Chief Govt Officer
David Robson – Chief Monetary Officer

Convention Name Individuals

Greg Pendy – Chardan

Operator

Good morning, and welcome to the Nuvve Holding Company First Quarter 2024 Earnings Convention Name. All individuals will likely be in listen-only mode. [Operator Instructions] After in the present day’s presentation there will likely be a chance to ask questions. [Operator Instructions] Please observe this occasion is being recorded. On in the present day’s name are Gregory Poilasne, Chief Govt Officer; and David Robson, Chief Monetary Officer of Nuvve. Earlier in the present day, Nuvve issued a press launch asserting its first quarter 2024 outcomes. Following ready remarks, we will likely be opening the decision up for questions.

Earlier than we start, I want to remind you that this name could include forward-looking statements. Whereas these forward-looking statements replicate Nuvve’s greatest present judgment, they’re topic to dangers and uncertainties that might trigger precise outcomes to vary materially from these implied by these forward-looking projections. These danger elements are mentioned in Nuvve’s filings with the SEC and within the earnings launch issued in the present day, which can be found on our web site. Nuvve undertakes no obligation to revise or replace any forward-looking statements to replicate future occasions or circumstances.

With that, I want to flip the decision over to Gregory Poilasne, Chief Govt Officer of Nuvve. Gregory?

Gregory Poilasne

Thanks and good afternoon to everybody right here in the present day. Thanks for becoming a member of our first quarter 2024 outcomes name. We’re happy to have the chance to replace you on the progress we’re making in scaling our enterprise and positioning Nuvve for future development. The worldwide setting within the electrical automobile area stays powerful.

The damaging notion is actual, particularly within the shopper area. We will additionally see that by the result of corporations akin to [indiscernible], Tritium and in a free area akin to Proterra.

Since Nuvve grew to become a public firm, our focus has been on the college bus enterprise, which is closely supported by EPA funding. This funding is important for varsity districts to undertake clear transportation and deliver the price of faculty buses down. The present strategy of releasing funding makes the adoption accordion like in nature. Faculty districts are ready for the result of the funding earlier than making the selections. The primary quarter 2024 has all the time been anticipated to be in between two completely different fundings and we have now recognized will probably be smooth. We stay very enthusiastic about our management place within the faculty bus area and it is nonetheless certainly one of our key income drivers for 2024, so it makes the income very lumpy.

To be able to easy out our income and broaden our enterprise, we have now just lately introduced two key tasks. The primary one is with the Fresno Financial Alternatives Fee. In January, we introduced that Nuvve had been chosen by the board of the fee to ship on the $16 million transportation and renewable vitality venture. I can share with you in the present day that we have now signed a contract with Fresno EOC to execute on this venture when key subsidies have been finalized, which we count on to be over the subsequent 60 days.

As a reminder, this venture consists of the deployment of 60 plus charging stations, 2.5 megawatt of photo voltaic technology and 1.6 megawatt hour of batteries. Nuvve is not going to solely drive the venture growth, however by its GIVe platform, Nuvve will handle the vitality on the websites for the subsequent 10 years. We’re proud to assist the Fresno EOC in attaining its imaginative and prescient in deploying clear transportation and renewable vitality technology with the intention to scale back the air pollution within the Fresno County. We additionally now count on that the preliminary $16 million will likely be acknowledged over the subsequent 24 months.

In February, we additionally introduced that Nuvve has been chosen in partnership with e-Formulation, a outstanding Taiwanese vitality answer supplier, with the intention to ship on a venture pushed by Taipower Company. This venture based mostly in Hsinchu embrace 90-plus charging stations for shuttles, photo voltaic and storage. Although the contract negotiations are being finalized, the venture isn’t solely thrilling by itself, nevertheless it opens the door to many different tasks on this island. You’ll find extra particulars on our V2G hub tasks on our hub web site www.nuvvev2ghubs.com.

As we have now introduced in 2023, battery deployments are all the time related to the EV deployments. The capabilities of our platform to handle EV batteries make it good to handle each EV and stationary storage or stationary storage alone. On this crucial second of electrification of transportation, our platform is the one one to supply a typical place of electrification and vitality administration whereas offering nice companies. The combination of electrical automobiles into the electrical system is extraordinarily difficult when additionally contemplating for a lot of different segments which are rising the electrical vitality consumption.

We’ve all the time mentioned that V2G is essential to such integration. We’re happy to see that a few weeks in the past was held a really important convention on V2G in San Diego, town the place Nuvve was based and the place we’re headquartered. However I carry on asking what’s V2G if it doesn’t present a service to the top customers. V2G is a superb know-how, however to get it adopted, it requires to articulate the worth proposition.

We’ve developed our worth proposition round three points: automobile readiness, guaranteeing to the consumer of the automobile to be prepared after they want it; vitality administration, which incorporates the trade-off between charging the automobile on the lowest value and offering grid companies with the intention to generate income, and eventually, battery life extension based mostly on all the time charging the battery on the actual degree that the driving force wants.

The mixture of our GIVe platform that manages the electrical automobile batteries and stationary storage in actual time with Astrea, our AI platform for the forecasting permits us to actually present these companies. A few of our rivals are reusing these phrases very, fairly often with out expertise in doing it.

However step one within the EV adoption ought to by no means be uncared for. The deployment part the place fleet managers are sometimes left alone in making key choices with out the correct info. On our web site www.nuvve.com, you could find a number of testimonials for various clients emphasizing how we have now been right here to assist them execute their EV deployment imaginative and prescient and resolve the completely different issues alongside the way in which. I’m pleased with Nuvve’s service and the suggestions that we’re getting.

Earlier than I move the microphone to David, I wish to reaffirm our expectations for this yr’s 2024 of $15 million to $20 million of income. We’re managing our future and we’re executing our marketing strategy to attain our goal.

David Robson

Thanks, Gregory. I’ll begin with a recap of first quarter 2024 outcomes. Within the first quarter, we generated whole revenues of $780,000 in comparison with $1.85 million within the first quarter of 2023. The lower was primarily pushed by the discount in charger {hardware} gross sales impacted by the timing of EPA funding award.

Margins on product and repair revenues had been 34.7% for the primary quarter of 2024, in comparison with 21.2% within the yr in the past interval. The rise is primarily as a result of a better mixture of service revenues and improved pricing on {hardware} gross sales this quarter in contrast with final yr.

As a reminder, margins may be lumpy from quarter-to-quarter relying on the combo. DC charger gross margins at commonplace pricing usually vary from 15% to 25%, whereas AC charger gross margins are roughly 50%. However in greenback phrases are a small fraction of the income of the DC charger. Threat service income margins are usually 30%, whereas software program and engineering service margins are as excessive as 100%.

Working prices, excluding value of gross sales was $7.5 million for the primary quarter of 2024 in comparison with $7.9 million for the fourth quarter of 2023 and $8.3 million within the first quarter of 2022. We’ve continued to drive efficiencies by 2023 and into 2024, leading to decrease overhead prices. We count on to appreciate further enhancements in our working bills in future quarters this yr.

Money working bills, excluding value of gross sales, inventory compensation and depreciation and amortization expense declined to $6.3 million within the first quarter of 2024 versus $6.9 million within the fourth quarter of 2023 and $7.2 million within the first quarter of 2023. Different revenue was $0.5 million within the first quarter of 2024, up from $0.2 million within the yr in the past quarter. The present interval advantages from a non-cash acquire from the change within the truthful worth of warrants.

Internet loss attributable to newly widespread stockholders decreased within the first quarter of 2024 to $6.7 million from a web lack of $7.7 million in Q1 of 2023. The development was primarily a results of decrease working bills this quarter in comparison with the primary quarter of 2023.

Now, turning to our stability sheet. We had roughly $5.3 million in money as of March 31, 2024, excluding $0.5 million in restricted money, which represents a rise of $3.7 million from December 2023. The rise was a results of web capital increase of $8.5 million through the quarter, primarily offset by $4.7 million utilized in working actions.

In the course of the quarter, inventories elevated by $0.2 million to $6.1 million at March 31, 2024, as we bought further DC charging stations to assist our gross sales pipeline. Accounts payable on the finish of the primary quarter of 2024 decreased by $0.2 million to $1.5 million. On the finish of the primary quarter of 2024, the stability sheet displays the addition of a warrant legal responsibility associated to warrants issued in connection to our capital increase in January. The warrants had been valued at $3.8 million on the issuance date and $3.1 million at March 31, 2024, leading to a $700,000 acquire through the quarter recorded to different revenue.

Now turning to our megawatts beneath administration and estimated future good service revenues. As a reminder, megawatts beneath administration is symmetrically use to quantify the aggregated quantity {of electrical} capability from the deployment of our V1G and V2G chargers, that are primarily deployed within the electrical faculty bus market within the U.S. and in mild responsibility fleet deployments in Europe, along with stationary batteries. Presently, these chargers and batteries are situated all through the US, Europe and Japan.

Megawatts beneath administration within the first quarter elevated 6% over the fourth quarter of 2023, 26.6 from 25.1, a forty five.4% enhance in comparison with the primary quarter of 2023. By way of its composition, 7.1 megawatts had been from stationary batteries and 19.5 megawatts had been from EV chargers. We proceed to count on an acceleration in our megawatts beneath administration as we undergo the rest of the yr and proceed to fee our backlog of buyer orders we have now earned in 2023 and the start of 2024. Along with new enterprise, we anticipate profitable which we have now visibility to in our pipeline for each EV chargers and stationary batteries.

Now turning to backlog, on March 31, our {hardware} and repair backlog reached a milestone file for Nuvve at $19 million, rising by $15.1 million from $3.9 million at December 31, 2023. Our hub venture in Fresno, California, which we closed throughout Q1 of this yr was the first driver of the rise.

That concludes my portion of the ready remarks. Gregory, again to you to conclude.

Gregory Poilasne

Thanks, David. Although this [ph] first quarter 2024 has been smooth, this doesn’t come as a shock. Our expectations for 2024 haven’t modified. We count on the Faculty Bus enterprise to select up within the second and third quarter with the EPA Spherical 2 and Spherical 3. We’re additionally executing on the awards that we have now obtained in the beginning of the yr with a few of them contributing to our 2024 income. We stay up for sharing extra with you within the close to future.

Query-and-Reply Session

Operator

[Operator Instructions] Our first query comes from Brian Dobson with Chardan. Please go forward.

Greg Pendy

Hey it is Greg Pendy in for Brian Dobson.

Only a query, in mild of the $15 million to $20 million in income steering and proper now it seems to be just like the stock uptick to, I feel you mentioned $6.1 million. How a lot – what do you suppose a normalized year-end stock degree could possibly be? Do you suppose it could possibly be round $2 million? Or simply attempting to get a really feel the place the $15 million to $20 million, how a lot you possibly can burn off for working capital and stock? Thanks.

David Robson

Hey Greg, I feel that stock degree can come down a pair extra million {dollars} between now and the top of the yr. In fact, it actually depends upon the timing of once we ship orders. However I give it some thought as, name it, long term, three to 4 months of stock readily available of future gross sales.

Greg Pendy

Okay. Thanks. After which only one extra query. You talked about the EPA rounds hitting in 2Q and 3Q. Are you able to type of give us a bit bit extra colour on notable dates that we must be searching for inside these two quarters?

Gregory Poilasne

David, do you wish to take that?

David Robson

Greg, it simply reduce out one second. Might you simply repeat it another time? I did not hear.

Greg Pendy

Certain. Sorry about that. Simply in mild of the EPA round heading [ph] in 2Q and 3Q, are you able to name out any notable dates we must be searching that may be publicly launched on a few of these faculty bus orders or timelines?

David Robson

You understand, from what Gregory mentioned in his remarks is de facto that the timing of once we see these bulletins popping out within the Q2 to Q3 timing, however I haven’t got any extra precision than that.

Greg Pendy

Okay. No downside. All proper.

Gregory Poilasne

And perhaps to reply you extra, the query there may be actually about, when then we get the orders from the college districts, proper. So the spherical two, there are a couple of. There are some that could possibly be bigger orders, and so we would publicize that. Nevertheless it’s actually. The timeline is de facto within the hand of the college districts fairly often. Proper.

Greg Pendy

Okay. Understood. Okay. That is all I’ve. Thanks.

David Robson

Thanks.

Operator

This concludes our question-and-answer session. I want to flip the convention again over to Gregory Poilasne for any closing remarks.

Gregory Poilasne

We respect all people listening in in the present day, and we’re wanting ahead to sharing extra with you of the progress we’re making. We’re very enthusiastic about 2024 and on and searching ahead to communication about Q2. Thanks. Bye-bye.

Operator

The convention has now concluded. Thanks for attending in the present day’s presentation. It’s possible you’ll now disconnect.