Microvast Holdings, Inc. (MVST) on Q1 2024 Results - Earnings Call Transcript
Unidentified Company Representative: Thank you, Operator, and thank you everyone for joining us today. With me on today’s call are Mr. Yang Wu, Founder, Chairman and CEO; and Ms. Nancy Smith, Interim CFO. Mr. Wu will start off with a high level overview of the quarter before providing some operational updates. Ms. Smith will then discuss our financials in more detail before handing it back to Mr. Wu to wrap up with our second quarter 2024 outlook. Ahead of this call, Microvast issued its first quarter earnings press release, which can be found on the Investor Relations section of the company’s website, ir.microvast.com. In addition, we have posted a slide presentation of the company website to go along with management’s prepared remarks. As a reminder, please note that statements made during this call are forward-looking and based on current expectations and assumptions. They should not be relied upon as representative of views for subsequent dates and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements due to new information or future events. Actual results may differ materially from expectations due to a variety of risks and uncertainties. For more information on material risks and other important factors that could affect our financial results, please refer to our filings with the SEC. We may also discuss non-GAAP financial measures during this call. These measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. These non-GAAP measures have been reconciled to their most comparable GAAP metrics in the tables included at the end of our press release. After the conclusion of this call, a webcast replay will be available on the Investor Relations section of the Microvast website. And now, I will turn the call over to Mr. Wu for opening remarks. Yang Wu: Thank you and thank you everyone for joining today’s call. Please turn to Slide 3 as I cover a few highlights from the first quarter. The business posted record first quarter revenue with 73% growth year-over-year in Q1 2024. Delivering revenue of $81.4 million. We achieved this growth while maintaining a growth margin of 21.2%, a 10.9%-point improvement year-over-year. This incredible growth comes largely from sales increases in our APAC and EMEA businesses year-over-year. We saw triple-digit age growth in both regions, 640% and 184% for IPAC and EMEA, respectively. Please join me on Slide 5. The company was successful in expanding its commercial vehicle footprint with additional customers and projects in America and Europe alike. We have begun to tap into the Canadian market and are working with American LCV OEM for ramp-up expected in the second quarter. We closed the first quarter with a backlog of $348.3 million and continue to strive for operational efficiency. The company posted significant improvements to adjusted gross margin at 22.6%, a 9.1-percentage-point increase year-over-year. The company posted yet another banner quarter and we expect continued growth and successes. So this also came with challenges. In addition to the current market sentiment facing the cleantech industry, we continue to navigate U.S. financing hurdles. Turning to Slide 6, we have some exciting new customers in the United States specialty vehicle market and European e-trailer market. These customers will utilize Gen 4 packs with our 53.5-amp-hour cell technology. While we aren’t quite ready to announce the projects publicly, we have made significant progress with the customers on product ramp-up and the prototype development. Additionally, we are excited to be working with German OEM engineers on the prototype fuel cell truck that will be bought at IAA 2024. I would now like to turn the call over to Mrs. Smith to discuss our financials in more detail. Nancy Smith: Thank you, Mr. Wu, and thank you everyone for joining in. I’ll spend the next few minutes discussing our quarter one 2024 financial results. Please turn to Slide 8 and I will summarize the main line items from our Q1 P&L. We booked a record first quarter with quarter one revenue of $81.4 million, an increase of 73% from $47 million in quarter one 2023. This growth was driven primarily by strong sales demand at both our APAC and EMEA markets for commercial vehicles as OEMs continue to adopt our technology. Our gross margin improved to 21.2% in quarter one 2024, compared to 10.3% in quarter one 2023. After adjusting for non-cash settled share based compensation expense in our cost of sales, adjusted gross margin increased to 22.6% in quarter one 2024, compared to 13.5% in quarter one 2023. That’s a 9.1-percentage-point improvement. Operating expenses were $40.9 million in quarter one 2024, compared to $36.2 million in quarter one 2023, an increase of 13% from the prior year period. After adjusting for non-cash SBC expense in SG&A, our adjusted operating expenses in quarter one 2024 were $30.1 million, compared to $19.8 million in quarter one 2023, an increase of $10.3 million. This is mainly due to increasing headcount costs. GAAP net loss was $24.8 million in quarter one 2024, compared to net loss of $29.6 million in quarter one 2023. After adjusting for non-cash SBC expense and changes in fair value of our warrant liability, adjusted net loss was $13 million in quarter one 2024, compared to an adjusted net loss of $11.7 million in quarter one 2023. The impact of these adjustments is shown in Slide 9 and reconciliations of these non-GAAP metrics to the most comparable GAAP metrics are included in the tables at the end of our earnings press release. Slide 10 shows the geographic breakdown of our revenue for quarter one 2024 compared to the prior year period. As you can see, we booked outstanding sales increases. APAC sales were up 640% year-over-year and accounted for 29% of our revenue, up from just 7% a year ago. Our EMEA business was up by 184% year-over-year and accounted for 36% of our revenue, up from just 22% a year ago as key customers begin their vehicle ramp up. And with that, I’ll turn it back over to Mr. Wu to briefly go over our outlook for the second quarter. Thank you. Yang Wu: Thank you. Please turn to Slide 12, which provided a summary outlook for the upcoming months. For the second quarter, we expect the revenue to be in the range of $90 million to $98 million, up 25% from Q2 a year ago at the midpoint. This anticipated growth is primarily generated through increased deliveries to our APAC and EMEA commercial vehicle customers. We continue to strive for operational efficiencies and we are maintaining our target growth margins to be in the range of 20% to 25%. For APAC, we will be delivering 48-amp-hour and 53.5-amp-hour sales from our Huzhou facility. We plan to do this while also targeting growth in Southeast Asia and continuing R&D progress on the new upcoming products. In EMEA, we anticipate a Q2 2024 revenue to grow more than double year-over-year. Expect to deliver new prototypes to customers and plan to expand into additional commercial vehicle projects. For the Americas, we continue to focus on securing our Clarksville financing while remaining committed to fulfilling planned customers and revenue growth. We also continue exploring additional customer sales opportunities, including within the Canadian CV market. Thank you all for joining us today. We look forward to updating you on our progress again next quarter. Q - : Operator: Ladies and gentlemen, that concludes today’s conference call. Thank you for joining and you may now disconnect your lines.
Microvast Holdings, Inc. (NASDAQ:MVST) Achieves Impressive Financial Milestones
Microvast Holdings, Inc. (NASDAQ:MVST) has emerged as a significant contender in the lithium-ion battery manufacturing sector, demonstrating remarkable financial performance and investor confidence.
Here are three key insights from their recent achievements:
- Microvast reported record-high revenues and gross margins in the fourth quarter and full-year 2024, surpassing market expectations.
- The company's backlog increased by 45% sequentially, indicating strong demand for its innovative energy solutions.
- MVST's stock price has risen to $1.77, up by 14.19%, reflecting growing investor confidence in its future prospects.
Microvast Holdings, Inc. is renowned for its cutting-edge energy solutions and has recently been in the spotlight for its financial accomplishments. As of April 1, 2025, BOCOM International Holdings Company set a price target of $1.59 for MVST, while the stock was trading at $1.55, suggesting a potential upside of 2.58%. The company's latest financial results have been notably impressive, with Microvast surpassing expectations in both the fourth quarter and the full year of 2024.
The company achieved record-high revenues and gross margins, which is a positive sign for investors. Additionally, Microvast's backlog saw a 45% increase sequentially, showcasing the strong demand for its products. This growth is bolstered by management's guidance for continued expansion and robust gross margins.
The stock price of MVST has witnessed a significant uptick, currently trading at $1.77, up by 14.19% or $0.22. This increase reflects the investor confidence in the company's performance and future outlook. During the day, the stock's price fluctuated between $1.435 and $1.88, highlighting its volatility. Over the past year, MVST has experienced a high of $2.87 and a low of $0.152, indicating a broad range of price movements. With a market capitalization of approximately $575.6 million and a trading volume of 21,044,715 shares, Microvast's trading activity suggests strong investor interest. The company's capability to achieve record revenues and maintain strong gross margins positions it well for future growth in the competitive lithium-ion battery market.
Microvast Holdings, Inc. (NASDAQ:MVST) Achieves Impressive Financial Milestones
Microvast Holdings, Inc. (NASDAQ:MVST) has emerged as a significant contender in the lithium-ion battery manufacturing sector, demonstrating remarkable financial performance and investor confidence.
Here are three key insights from their recent achievements:
- Microvast reported record-high revenues and gross margins in the fourth quarter and full-year 2024, surpassing market expectations.
- The company's backlog increased by 45% sequentially, indicating strong demand for its innovative energy solutions.
- MVST's stock price has risen to $1.77, up by 14.19%, reflecting growing investor confidence in its future prospects.
Microvast Holdings, Inc. is renowned for its cutting-edge energy solutions and has recently been in the spotlight for its financial accomplishments. As of April 1, 2025, BOCOM International Holdings Company set a price target of $1.59 for MVST, while the stock was trading at $1.55, suggesting a potential upside of 2.58%. The company's latest financial results have been notably impressive, with Microvast surpassing expectations in both the fourth quarter and the full year of 2024.
The company achieved record-high revenues and gross margins, which is a positive sign for investors. Additionally, Microvast's backlog saw a 45% increase sequentially, showcasing the strong demand for its products. This growth is bolstered by management's guidance for continued expansion and robust gross margins.
The stock price of MVST has witnessed a significant uptick, currently trading at $1.77, up by 14.19% or $0.22. This increase reflects the investor confidence in the company's performance and future outlook. During the day, the stock's price fluctuated between $1.435 and $1.88, highlighting its volatility. Over the past year, MVST has experienced a high of $2.87 and a low of $0.152, indicating a broad range of price movements. With a market capitalization of approximately $575.6 million and a trading volume of 21,044,715 shares, Microvast's trading activity suggests strong investor interest. The company's capability to achieve record revenues and maintain strong gross margins positions it well for future growth in the competitive lithium-ion battery market.
Comparative Analysis of Battery Industry Players: Microvast Holdings, Inc. and Peers
- Microvast Holdings, Inc. faces a challenging market situation with a target price significantly below its current market price, indicating a pessimistic outlook.
- FREYR Battery (FREY) shows a less optimistic outlook with its target price below the current market value, reflecting financial challenges.
- CBAK Energy Technology, Inc. (CBAT) stands out with a positive growth potential among its peers, despite some financial instability.
Microvast Holdings, Inc. specializes in the design, development, and manufacture of battery systems for electric vehicles and energy storage solutions. Despite its innovative approach, MVST is currently facing a challenging market situation. Investment analysts have a pessimistic outlook on the stock, as its target price is set at -$0.03, which is 101.45% below the current stock price of $1.87.
In comparison, FREYR Battery (FREY) is another player in the battery industry. FREY's current stock price is $2.35, with a target price of $1.65, resulting in a price percentage difference of -29.60%. This indicates a less optimistic outlook compared to its current market value. FREY has a market cap of $329.80 million and an earnings per share (EPS) of -$0.11, with a price-to-earnings (PE) ratio of -3.63, reflecting its current financial challenges.
CBAK Energy Technology, Inc. (CBAT) presents a more positive scenario among its peers. With a current stock price of $0.96 and a target price of $1.28, CBAT shows a price percentage difference of 33.21%. This suggests a positive growth potential, making it stand out in the market. CBAT has a market cap of $86.33 million and an EPS of $0.12, although its PE ratio is -38.27, indicating some financial instability.
Eos Energy Enterprises, Inc. (EOSE) is another competitor in the energy storage sector. EOSE's current stock price is $4.80, but its target price is -$0.01, leading to a price percentage difference of -100.15%. This reflects a highly negative outlook. EOSE has a market cap of $1.05 billion and an EPS of -$2.46, with a PE ratio of -0.60, highlighting its financial difficulties.
Overall, while Microvast Holdings, Inc. faces a negative outlook with its target price significantly below its market price, CBAK Energy Technology, Inc. (CBAT) emerges as a company with the highest growth potential among its peers, despite some financial challenges.
Comparative Analysis of Battery Industry Players: Microvast Holdings, Inc. and Peers
- Microvast Holdings, Inc. faces a challenging market situation with a target price significantly below its current market price, indicating a pessimistic outlook.
- FREYR Battery (FREY) shows a less optimistic outlook with its target price below the current market value, reflecting financial challenges.
- CBAK Energy Technology, Inc. (CBAT) stands out with a positive growth potential among its peers, despite some financial instability.
Microvast Holdings, Inc. specializes in the design, development, and manufacture of battery systems for electric vehicles and energy storage solutions. Despite its innovative approach, MVST is currently facing a challenging market situation. Investment analysts have a pessimistic outlook on the stock, as its target price is set at -$0.03, which is 101.45% below the current stock price of $1.87.
In comparison, FREYR Battery (FREY) is another player in the battery industry. FREY's current stock price is $2.35, with a target price of $1.65, resulting in a price percentage difference of -29.60%. This indicates a less optimistic outlook compared to its current market value. FREY has a market cap of $329.80 million and an earnings per share (EPS) of -$0.11, with a price-to-earnings (PE) ratio of -3.63, reflecting its current financial challenges.
CBAK Energy Technology, Inc. (CBAT) presents a more positive scenario among its peers. With a current stock price of $0.96 and a target price of $1.28, CBAT shows a price percentage difference of 33.21%. This suggests a positive growth potential, making it stand out in the market. CBAT has a market cap of $86.33 million and an EPS of $0.12, although its PE ratio is -38.27, indicating some financial instability.
Eos Energy Enterprises, Inc. (EOSE) is another competitor in the energy storage sector. EOSE's current stock price is $4.80, but its target price is -$0.01, leading to a price percentage difference of -100.15%. This reflects a highly negative outlook. EOSE has a market cap of $1.05 billion and an EPS of -$2.46, with a PE ratio of -0.60, highlighting its financial difficulties.
Overall, while Microvast Holdings, Inc. faces a negative outlook with its target price significantly below its market price, CBAK Energy Technology, Inc. (CBAT) emerges as a company with the highest growth potential among its peers, despite some financial challenges.
