MVST - Earnings call transcript Q3 2024 | Microvast Holdings, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Microvast Third Quarter 2024 Earnings Call. [Operator Instructions] The conference is being recorded.

I would now like to turn the conference over to Microvast Investor Relations. ahead. go Please

Rodney Worthen

And update operator. everyone, joining for Thank thank quarterly today. our you, you,

on Mr. With Chairman call today's me are and Fariyal and Yang Ms. Khanbabi, CFO. CEO; Founder, Wu,

overview our start back Wu with some will remarks. to and Ms. financial Mr. discuss updates. XXXX to closing will business quarter before results Wu Mr. in operational a high-level detail outlook before of and off providing then our up Khanbabi wrap the handing it

its website, third be issued earnings of press Investor can Microvast Ahead this which quarter found Relations release, call, section ir.microvast.com. the on of our

We have prepared slide to remarks. accompany also management's posted a presentation

As publicly these to a risks future materially or upon variety to views any revise information for on call based forward-looking current include reminder, Actual expectations a undertake subsequent statements release and dates. from as results forward-looking the representative of We should or this no to may relied uncertainties. differ may new statements. due assumptions obligation results. These be are results revision note please to statements expectations and that not and due of

to more filings risks on other refer important information with that affect our results, please For the could SEC. and financial factors material our

These press metrics discuss comparable the end release. financial measures as most also results. addition tables to, isolation have during our a in their These this and the been to GAAP substitute call. non-GAAP should may included We non-GAAP GAAP of from, not be measures reconciled measures considered in in for at or

Relations of the replay section Microvast's After will website. this the be Investor webcast a on conclusion of call, available

call opening the turn over to will for I Mr. remarks. now Wu And

Yang Wu

joining you, everyone, today's you, call. Thank thank for and

key our X, will cover quarter. messages turn to and I Please from Slide third the

business profitability. the U.S., earlier communicated solid in has XXXX, challenging Microvast strategies EMEA the and U.S. implementing strategic in executing Throughout improving As the and despite keenly measures efficiency cost-cutting of while we on on our the in APAC this been are both focused we year, environment

profit is to I and million investment at is domestic for in Microvast adjusted I'm here of achievement lithium have net the EBITDA horizon. battery want This of $XX.X achieved battery us. happen. with a milestone This the thank to excited made profitability team and entire for the the million. U.S. lithium company incredible segment we both announce a historical the quarter an with manufacturing business a is it long-term a in that The difficult industry $XX

many and have the rapid commercialized in Microvast manufacturing the during process focusing learned We we as aim on products to innovating continue industrialized our period. growth times has technology our globally. both the business much grow over. stack We across and strategy our U.S. and

included, To our strategy reiterate like to shareholders business to I'd it. on what touch briefly our

The innovation. technologies. a battery many products of is containers core business remain company. and our and overhaulable on integrated focused foremost, technology our and We way, Microvast First industry-first ESS LFP products, is MEX including development with exciting newest the our technology on silicon-enhanced cell vertically driver product

our also battery. progress made all We have solid-state on material

stream transformation. revenue that and through broaden energy products support continually are We our the seeking global to services

the we To to With must strives achieve to also Microvast both market future high-demand and of share, achieve future growth. market goals, focus in advanced invest our shares. commercialization Microvast our continue current on further capturing innovation capture products. and product

core our profitability. sustained business aim and We continue to to attain optimize

exhibition density our quarter improved in sales enhanced of on successful a a will continues our join requirements This Microvast you Highlights from premier for new to silicon-based successful particularly Germany. technology customers. in me performance electric our the vehicle X. include reach, please Slide energy cell have of unveiling in EMEA. expanding at Now commercial if ever-evolving be mobility

challenges. we policy Global are are within platforms. certain we excited shifts vehicle Europe very the commercial U.S. without in trajectory of decelerated its the uncertainty light has this around rollout wasn't about While on, and quarter

India markets and prioritized growing such chemistries LFP rapidly addition, Thailand In with for have as high their performance. affordability

to business XXX% once record $XXX.X with saw maintaining EMEA. year-over-year, growth sales revenue million. quarter in a growth of the of growth percentage achieving achieved XX.X%, This point year-over-year. while We improvement posted increase being for largely historic XX.X gross growth XX% profitability, quarter third triple-digit Overall, addition more this incredible delivering a margin year-over-year. from EMEA in a comes We

exciting screening dump Slide is trucks. will on and X, Propel business Microvast Vehicle if will industry be our to mining, you leading company. Now fulfilling some orders their power construction crushing, in developments new we join segment. me have a Commercial and Indian mining

was in China. in the of has industry construction and at stood and machinery XXXX founded XCMG the forefront

We to serial of and construction expect with in equipment for our production to packs battery are proud year. them partner use their start next

to equipment finally, auxiliary and cell a and and utilize And expect is player supplying customer LGMG Microvast the ampere-hour see them This the of the by both major packs packs, revenues industry. mining end we ampere-hour with year. XX Gen technologies. will with X be XX.X our battery in our will

industry The applications. high-performance increasingly our segment has adopted heavy their cells for

to We adoption cell and by OEMs also success hybrid fuel segment. the as as in continue agriculture well find

to our detail. I more like turn would over to Khanbabi financials to the call now discuss Ms. in

Fariyal Khanbabi

on our going you, performance, and progress. our through you, for start QX Thank financial metrics key walking thank Wu, you tuning to everyone, that I'm focusing some XXXX in. underscore by Mr.

financial Starting quarter. for the with core X, review Slide the will highlights we

commercial EMEA our $XXX.X QX record million was by a sales driven was technologies. As million, growth QX Mu in XX% Mr. reaching quarter up for increasingly by XXXX. This $XX.X from adopting revenue vehicles with mentioned, OEMs fueled strong

from margin quarter improved in up this QX XX.X% to XX.X%, XXXX. gross Our

point gross adjusted margin a X.X versus operational XX.X%, This efficiencies, scale including gross sustained rose to more economies a of and of increase lower raw prices. material Excluding noncash increase expenses, through prior combination product share-based period. percentage margin the to year due compensation the favorable is better factors, in mix

million reaching focus profitability. $XX positive, turned as sustainable achieving EBITDA on we Adjusted

QX profit $XX.X warrant in a We reported million substantial net and profit noncash loss million XXXX. in to loans, convertible items came share-based compensation an our adjusted a expenses net compared million, net liability $XX.X and as adjusted loss fair adjusting QX of XXXX. After in $XX.X changes value such million a GAAP for improvement net from QX to XXXX $XX.X of of of

Turning X. to Slide

We in compensation This May will were $XX.X R&D from a review control year and implementing the decrease $XX.X year. rest this of reduced and in XXXX, compared XXXX to in measures million sales across cost to in QX the P&L and detail. prior XX% share-based to reductions largely began G&A, expenses the period. reduction we Operating due QX marketing million in more

compensation impact in expenses $XX.X were these of at included XXXX share-based tables in the of million these noncash and reconciliations for our XXXX, to press end earnings expenses, of GAAP most million. the The our metrics $XX are million adjusting QX release. operating adjusted non-GAAP metrics $X.X adjustments of decrease After in comparable a QX to compared the

On XXXX prior Slide period. mix to for year breakdown the revenue QX XX, we show of the compared geographic our

and EMEA continue grew to revenue, up year-over-year partnerships accounted for of continue customers vehicle XXX% ago, Our our grow a by and ramps. from year XX% business we XX% key as their our quarterly

cash Net write-downs share-based and compensation flow. has million from Slide substantially XX, by been adjustments, our $XX.X impairments, we flow offset noncash impacted will for and million but cash and to of disposals. turn X-month the has loss including review briefly Please period $XX.X

X-month we've net an saw period, of flow received in operating while and negative our in we For cash adjustments a for positive $X.X aged net reduced We adjustment. from overall the liabilities outflow improvements million. receivables, substantially expenses

offset net a of we expenditures, outflow partially the saw activities, due From primarily investing million $XX short-term X-month by investments. period, to capital for

flow of had saw inflow stability. of increase For the $X.X period, with million, showing from we the a an improved cash of financing million. period, cash rates X-month combined in million financial we Overall, of exchange impact negative $XX.X a for net X-month $XX.X

we that believe market with financial that resilient EMEA. especially a profitable, foundation our demand, expanding We are building results in demonstrate

Our focus and our to sustainable margins profitability, on driving position. continues operational strengthen achieving efficiencies improving

believe strategic storage brings recognize to continue unfold, energy that to committed electric are as intrinsic our will value Microvast vision, executing and results and sectors. we to the the the that vehicle market We our

With and outlook of over back I it go Wu remainder our to remarks. the XXXX Mr. hand that, over will closing to for

Yang Wu

to turn year. for rest the outlook a summary of which Please the XX, you. Thank provides Slide

range revenue growth anticipated quarter, revenue to fourth be expect the to year to XX% the XX%. of we million $XX $XX full the range of in For in puts the which million,

We XX%. maintaining continue at to are our and strive we target for of efficiencies, operational margin gross least

our For production portfolio. improvements Huzhou facility continue to capacity to towards as at as extensive product add to well exciting business, our products progressing our APAC we target

for year-over-year, that revenue We and high-growth and also XX% upcoming business partners both an anticipate secure we will new achieve products. EMEA increase are working current to our strategic

ESS new expansion of on orders For we footprint platform. the securing our commercial segment, focused LFP future for while are American our vehicle MEX

facility. are for looking financing a options Clarksville full also We into for solution our

reiterate like level to through global would I profitability on is focus and regional growth. also efficiency on that the our

is We liquidity to route targeting healthy ability our maintain and margin EBITDA a revenue and long-term from sustained to to adjusted are key business in our profitability. growth the a established contributions improving the positive APAC. Consistent gross and EMEA profile providing

full operational cost strategic focus continues our customer cutting. efficiencies, growth, be on development, product to and reducing To liabilities summarize, key

legacy is would me to I as join as stockholders. investors take new Microvast well like a as who XX. welcome company Please to on to our moment Slide reinforce a

groundbreaking of aspire a planet Texas, in to be stack. cleaner I extensive U.S. holds energy Microvast the our solutions. founded a to that to electric where aim we create company strive all continue The trusted company. revolution energy And products headquartered With we product powering than pending. or our today steward be our technology to founded provider either XXX currently resilient still worldwide, more patents for a are innovation is equipment company and across granted global humanity. We of cutting-edge the a our and technology more

on our of technology. eyes At Microvast, remain the firmly future

overhaulable We announced our recently LFP-based an MEX, container. ESS high-performance have

container includes center to the in scale spectrum for cloud AI new everything from with value data excellent proposition total provides computation. a of utility customers This solar across applications. or a reliable of system and required storage Our and cost is ownership that an storage powering wind

Additionally, updating next our we We our Thank new technologies, high-performance historical unveiled leveraging quarter attending to quarter. you cell for update. at again provide density IAA for progress XXXX all applications. forward in multiple Germany, on you look that improved energy silicon

Operator

participating. This for concludes Thank you today's call. conference

You may now disconnect.

Microvast (MVST) 12 Nov 242024 Q3 Earnings call transcript