Nuvve Holding Corporation (NVVE), a green energy technology company specializing in electric vehicle (EV) charging solutions, has reported a decline in its first-quarter revenues for 2024, recording $780,000 compared to $1.85 million in the corresponding period last year.
The decrease was attributed to lower charger hardware sales, which were affected by the timing of Environmental Protection Agency (EPA) funding awards. Despite the revenue drop, Nuvve has seen an improvement in margins and a decrease in operating costs. Looking ahead, the company anticipates a revenue range of $15 million to $20 million for the full year and is confident about its backlog and upcoming projects.
Key Takeaways
- Nuvve's Q1 2024 revenues fell to $780,000 from $1.85 million in Q1 2023.
- Margins on product and service revenues improved significantly to 34.7%.
- Operating costs, excluding cost of sales, decreased to $7.5 million.
- The company has a record hardware and service backlog valued at $19 million.
- Nuvve expects 2024 revenues to be between $15 million and $20 million.
- Two key projects were announced, one with the Fresno Economic Opportunities Commission and another with e-Formula in Taiwan.
Company Outlook
- Nuvve anticipates commissioning its backlog of customer orders from 2023 and early 2024.
- The company is optimistic about winning new business in EV chargers and stationary batteries.
- An increase in the School Bus business is expected in the second and third quarters due to EPA funding rounds.
- Nuvve is executing on previously received awards, which will contribute to 2024 revenues.
Bearish Highlights
- The company experienced a significant decrease in charger hardware sales.
- The timing of EPA funding awards impacted revenue negatively.
- School bus orders and timelines are dependent on school districts, which adds uncertainty.
Bullish Highlights
- Margins on product and service revenues have seen a substantial increase.
- Operating costs have been reduced compared to the previous quarter.
- The hardware and service backlog reached a milestone, promising future revenue.
Misses
- Q1 2024 revenue missed the previous year's figures.
- The company expects to decrease inventory by a few million dollars by year-end, indicating a potential overstock in the past.
Q&A Highlights
- Gregory Poilasne mentioned a soft first quarter but remains positive about the pickup in the school bus business in upcoming quarters.
- Specific dates for school bus orders are determined by the districts, which may affect the timing of revenue recognition.
- Nuvve is excited about the progress and is looking forward to future updates.
In conclusion, Nuvve Holding Corporation has faced challenges in the first quarter of 2024 but remains positive about its future prospects. The company is banking on its substantial backlog and the anticipated growth in the school bus business to drive revenues for the remainder of the year. Despite the setbacks, improved margins and reduced operating costs show strengths in Nuvve's operational efficiency. Investors and stakeholders will be watching closely as the company aims to capitalize on its strategic projects and navigate the uncertainties of funding and order timelines.
InvestingPro Insights
Amidst a challenging first quarter, Nuvve Holding Corporation (NVVE) has shown resilience with improved margins and a reduction in operating costs. To provide a clearer picture of the company's financial health and future prospects, here are some insights based on real-time data from InvestingPro and InvestingPro Tips:
InvestingPro Data:
- Market Capitalization: As of the last report, Nuvve's market cap stands at a modest $4.53 million, highlighting its position as a smaller player in the green energy technology sector.
- Revenue Growth: Despite the recent revenue decline, the company has experienced a significant increase in revenue growth over the last twelve months, with a 55.06% surge, indicating potential for future expansion.
- Stock Performance: The stock has seen a significant return over the last week, with a price total return of 8.27%, signaling investor interest and potential market reevaluation of the company's value.
InvestingPro Tips:
1. Analysts anticipate sales growth in the current year, aligning with Nuvve's own revenue expectations of $15 million to $20 million. This could signify a turnaround from the first-quarter performance.
2. The stock's price volatility suggests that investors may experience sharp price movements, which could be advantageous for traders looking for short-term gains but may require caution for long-term investors.
These insights suggest that while Nuvve is navigating through a period of fluctuation, there are elements of growth and investor interest that could bode well for the future. For more detailed analysis and additional InvestingPro Tips, visit https://www.investing.com/pro/NVVE. There are 16 more tips available, which can provide a deeper understanding of Nuvve's potential and risks. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Newborn Acquisition Corp (NVVE) Q1 2024:
Operator: Good morning, and welcome to the Nuvve Holding Corporation First Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. On today's call are Gregory Poilasne, Chief Executive Officer; and David Robson, Chief Financial Officer of Nuvve. Earlier today, Nuvve issued a press release announcing its first quarter 2024 results. Following prepared remarks, we will be opening the call up for questions. Before we begin, I would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Nuvve's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking projections. These risk factors are discussed in Nuvve's filings with the SEC and in the earnings release issued today, which are available on our website. Nuvve undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances. With that, I would like to turn the call over to Gregory Poilasne, Chief Executive Officer of Nuvve. Gregory?
Gregory Poilasne: Thank you and good afternoon to everyone here today. Thank you for joining our first quarter 2024 results call. We are pleased to have the opportunity to update you on the progress we are making in scaling our business and positioning Nuvve for future growth. The global environment in the electric vehicle space remains tough. The negative perception is real, especially in the consumer space. We can also see that through the outcome of companies such as [indiscernible], Tritium and in a free space such as Proterra. Since Nuvve became a public company, our focus has been on the school bus business, which is heavily supported by EPA funding. This funding is essential for school districts to adopt clean transportation and bring the cost of school buses down. The current process of releasing funding makes the adoption accordion like in nature. School districts are waiting for the outcome of the funding before making the decisions. The first quarter 2024 has always been expected to be in between two different fundings and we have known it will be soft. We remain very excited about our leadership position in the school bus space and it's still one of our key revenue drivers for 2024, so it makes the revenue very lumpy. In order to smooth out our revenue and expand our business, we have recently announced two key projects. The first one is with the Fresno Economic Opportunities Commission. In January, we announced that Nuvve had been selected by the board of the commission to deliver on the $16 million transportation and renewable energy project. I can share with you today that we have signed a contract with Fresno EOC to execute on this project when key subsidies have been finalized, which we expect to be over the next 60 days. As a reminder, this project includes the deployment of 60 plus charging stations, 2.5 megawatt of solar generation and 1.6 megawatt hour of batteries. Nuvve will not only drive the project development, but through its GIVe platform, Nuvve will manage the energy on the sites for the next 10 years. We are proud to support the Fresno EOC in achieving its vision in deploying clean transportation and renewable energy generation in order to reduce the pollution in the Fresno County. We also now expect that the initial $16 million will be recognized over the next 24 months. In February, we also announced that Nuvve has been selected in partnership with e-Formula, a prominent Taiwanese energy solution provider, in order to deliver on a project driven by Taipower Corporation. This project based in Hsinchu include 90-plus charging stations for shuttles, solar and storage. Though the contract negotiations are being finalized, the project is not only exciting on its own, but it opens the door to many other projects on this island. You can find more details on our V2G hub projects on our hub website www.nuvvev2ghubs.com. As we have announced in 2023, battery deployments are always associated with the EV deployments. The capabilities of our platform to manage EV batteries make it perfect to manage both EV and stationary storage or stationary storage alone. In this critical moment of electrification of transportation, our platform is the only one to provide a common place of electrification and energy management while providing great services. The integration of electric vehicles into the electric system is extremely challenging when also considering for many other segments that are increasing the electric energy consumption. We have always said that V2G is key to such integration. We are pleased to see that a couple of weeks ago was held a very significant conference on V2G in San Diego, the city where Nuvve was founded and where we are headquartered. But I keep on asking what is V2G if it does not provide a service to the end users. V2G is a great technology, but to get it adopted, it requires to articulate the value proposition. We have developed our value proposition around three aspects: vehicle readiness, guaranteeing to the user of the vehicle to be ready when they need it; energy management, which includes the trade-off between charging the vehicle at the lowest cost and providing grid services in order to generate revenue, and finally, battery life extension based on always charging the battery at the exact level that the driver needs. The combination of our GIVe platform that manages the electric vehicle batteries and stationary storage in real time with Astrea, our AI platform for the forecasting allows us to truly provide these services. Some of our competitors are reusing these terms very, very often without experience in doing it. But the first step in the EV adoption should never be neglected. The deployment phase where fleet managers are often left alone in making key decisions without the proper information. On our website www.nuvve.com, you can find multiple testimonials for different customers emphasizing how we have been here to help them execute their EV deployment vision and solve the different problems along the way. I’m proud of Nuvve’s service and the feedback that we are getting. Before I pass the microphone to David, I want to reaffirm our expectations for this year’s 2024 of $15 million to $20 million of revenue. We are managing our destiny and we are executing our business plan to achieve our target.
David Robson: Thanks, Gregory. I will start with a recap of first quarter 2024 results. In the first quarter, we generated total revenues of $780,000 compared to $1.85 million in the first quarter of 2023. The decrease was primarily driven by the reduction in charger hardware sales impacted by the timing of EPA funding award. Margins on product and service revenues were 34.7% for the first quarter of 2024, compared to 21.2% in the year ago period. The increase is primarily due to a higher mix of service revenues and improved pricing on hardware sales this quarter compared with last year. As a reminder, margins can be lumpy from quarter-to-quarter depending on the mix. DC charger gross margins at standard pricing generally range from 15% to 25%, while AC charger gross margins are approximately 50%. But in dollar terms are a small fraction of the revenue of the DC charger. Risk service revenue margins are generally 30%, while software and engineering service margins are as high as 100%. Operating costs, excluding cost of sales was $7.5 million for the first quarter of 2024 compared to $7.9 million for the fourth quarter of 2023 and $8.3 million in the first quarter of 2022. We have continued to drive efficiencies through 2023 and into 2024, resulting in lower overhead costs. We expect to realize additional improvements in our operating expenses in future quarters this year. Cash operating expenses, excluding cost of sales, stock compensation and depreciation and amortization expense declined to $6.3 million in the first quarter of 2024 versus $6.9 million in the fourth quarter of 2023 and $7.2 million in the first quarter of 2023. Other income was $0.5 million in the first quarter of 2024, up from $0.2 million in the year ago quarter. The current period benefits from a non-cash gain from the change in the fair value of warrants. Net loss attributable to newly common stockholders decreased in the first quarter of 2024 to $6.7 million from a net loss of $7.7 million in Q1 of 2023. The improvement was primarily a result of lower operating expenses this quarter compared to the first quarter of 2023. Now, turning to our balance sheet. We had approximately $5.3 million in cash as of March 31, 2024, excluding $0.5 million in restricted cash, which represents an increase of $3.7 million from December 2023. The increase was a result of net capital raise of $8.5 million during the quarter, primarily offset by $4.7 million used in operating activities. During the quarter, inventories increased by $0.2 million to $6.1 million at March 31, 2024, as we purchased additional DC charging stations to support our sales pipeline. Accounts payable at the end of the first quarter of 2024 decreased by $0.2 million to $1.5 million. At the end of the first quarter of 2024, the balance sheet reflects the addition of a warrant liability related to warrants issued in connection to our capital raise in January. The warrants were valued at $3.8 million on the issuance date and $3.1 million at March 31, 2024, resulting in a $700,000 gain during the quarter recorded to other income. Now turning to our megawatts under management and estimated future good service revenues. As a reminder, megawatts under management is symmetrically use to quantify the aggregated amount of electrical capacity from the deployment of our V1G and V2G chargers, which are primarily deployed in the electric school bus market in the U.S. and in light duty fleet deployments in Europe, in addition to stationary batteries. Currently, these chargers and batteries are located throughout the United States, Europe and Japan. Megawatts under management in the first quarter increased 6% over the fourth quarter of 2023, 26.6 from 25.1, a 45.4% increase compared to the first quarter of 2023. In terms of its composition, 7.1 megawatts were from stationary batteries and 19.5 megawatts were from EV chargers. We continue to expect an acceleration in our megawatts under management as we go through the remainder of the year and continue to commission our backlog of customer orders we have earned in 2023 and the beginning of 2024. In addition to new business, we anticipate winning which we have visibility to in our pipeline for both EV chargers and stationary batteries. Now turning to backlog, on March 31, our hardware and service backlog reached a milestone record for Nuvve at $19 million, increasing by $15.1 million from $3.9 million at December 31, 2023. Our hub project in Fresno, California, which we closed during Q1 of this year was the primary driver of the increase. That concludes my portion of the prepared remarks. Gregory, back to you to conclude.
Gregory Poilasne: Thanks, David. Though this [ph] first quarter 2024 has been soft, this does not come as a surprise. Our expectations for 2024 have not changed. We expect the School Bus business to pick up in the second and third quarter with the EPA Round 2 and Round 3. We are also executing on the awards that we have received at the beginning of the year with some of them contributing to our 2024 revenue. We look forward to sharing more with you in the near future.
Operator: [Operator Instructions] Our first question comes from Brian Dobson with Chardan. Please go ahead.
Greg Pendy: Hey it's Greg Pendy in for Brian Dobson. Just a question, in light of the $15 million to $20 million in revenue guidance and right now it looks like the inventory uptick to, I think you said $6.1 million. How much – what do you think a normalized year-end inventory level could be? Do you think it could be around $2 million? Or just trying to get a feel where the $15 million to $20 million, how much you can burn off for working capital and inventory? Thanks.
David Robson: Hey Greg, I think that inventory level can come down a couple more million dollars between now and the end of the year. Of course, it really depends on the timing of when we deliver orders. But I think about it as, call it, longer term, three to four months of inventory on hand of future sales.
Greg Pendy: Okay. Thanks. And then just one more question. You mentioned the EPA rounds hitting in 2Q and 3Q. Can you kind of give us a little bit more color on notable dates that we should be looking out for within those two quarters?
Gregory Poilasne: David, do you want to take that?
David Robson: Greg, it just cut out one second. Could you just repeat it one more time? I didn't hear.
Greg Pendy: Sure. Sorry about that. Just in light of the EPA around heading [ph] in 2Q and 3Q, can you call out any notable dates we should be looking out that would be publicly released on some of these school bus orders or timelines?
David Robson: You know, from what Gregory said in his remarks is really that the timing of when we see those announcements coming out in the Q2 to Q3 timing, but I don't have any more precision than that.
Greg Pendy: Okay. No problem. All right.
Gregory Poilasne: And maybe to answer you more, the question there is really about, when then we get the orders from the school districts, right. So the round two, there are a few. There are some that could be larger orders, and so we might publicize that. But it's really. The timeline is really in the hand of the school districts very often. Right.
Greg Pendy: Okay. Understood. Okay. That's all I have. Thanks.
David Robson: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Gregory Poilasne for any closing remarks.
Gregory Poilasne: We appreciate everybody listening in today, and we are looking forward to sharing more with you of the progress we are making. We are very excited about 2024 and on and looking forward to communication about Q2. Thank you. Bye-bye.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.