Nuvve Holding Corp. (NASDAQ:NVVE) Q4 2023 Earnings Call Transcript March 28, 2024
Nuvve Holding Corp. misses on earnings expectations. Reported EPS is $-6.98 EPS, expectations were $-5.6. NVVE isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings, and welcome to Nuvve Holding Corp. Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Caroline King, Director of Joele Frank. Thank you, Ms. King. You may begin.
Caroline King : Thank you. 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 fourth quarter and full year 2023 results. Following prepared remarks, we will open 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, Caroline, and hello to everyone here today. Thank you all for joining our fourth quarter and full year 2023 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. In the fourth quarter, we saw strong year-over-year growth in orders, sales and deployment of charging stations connected to our GIVe V2G software platform, as well as grid service revenues. This positive momentum across the business allowed us to deliver revenue in line with our expectations of $8 million for the full year, and we see this growth tailwind continuing as we enter 2024. In charging station deployments, we’ve achieved another strong quarter adding 108 chargers to our proprietary V2G GIVe software.
We broke our own record of deployments in October and then again in November for a total increase in megawatts under management for the quarter of 18.2%. For the full year, this marked an increase of 44.6%. Growth in our megawatts under management represents long-term upside potential terms of both future grid service revenue and increased market awareness of and demand for our products and services as more people benefit from the value of our V2G software. While our deployments continue to be impacted by supply chain challenges that have slowed fuel certification since 2021. We are optimistic that the significant work we have done to strengthen our supply chain in 2023 has led a strong foundation for our success as these challenges alleviate in the coming year.
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Q&A Session
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As deployments continue to accelerate, we expect to see corresponding boost in market awareness and receptivity to Nuvve’s offering, bringing new customers and powering continued growth. Grid service revenues continue to grow in the fourth quarter, coming in at 8% increase compared to the corresponding period last year and 87% for the full year. While grid service revenue opportunities vary depending on the geography of deployment, we see opportunity ranges from $85 to $300 per kilowatt a year in some of the key end markets. Our integration with Circle K and key stationary battery OEMs is already delivering grid service revenues. We continue to see our European expansion as a path to significant megawatts under management growth and corresponding revenue generation across the world.
On the topic of partnerships, we are continuing to work with key international partners to scale our platform globally. In December, we announced the next step in our effort to scale in the Japanese stationary battery market through our partnerships with Toyota Tsusho and Japan’s Chubu Electric Power Miraiz Company. Through our expanded commercial agreement, we are paving the way for additional scale deployments in Japan required for grid support by providing revenue generating demand response and flexibility services. Our continued focus on honing our AI forecasting capabilities allows us to optimize or address challenges related to electric vehicle readiness, energy management and battery health, eliminating key pain points of EV ownership.
With the integration of our purpose built Astrea AI technology into our FleetBox charge management app now complete, we are reaping the benefits of this enhanced functionality in the form of additional revenue generation for our customers and in turn our company. Our AI technology is a key differentiator and sales enabled and we will continue to seek opportunities to innovate to ensure we remain on the cutting edge. Turning now to one of our most exciting growth opportunity, our V2G hub offering. Earlier this year, Nuvve was selected and approved by the Board of the Fresno Economic Opportunity Commission for a $16 million project to implement its turnkey fleet electrification program for Fresno EOC’s 50 shuttles fleet. Our expertise will help Fresno EOC ensure seamless transition to electrified fleet, offering the tools to manage energy efficiently, reduce operational costs, embrace renewable energy solutions.
With the adoption of our cutting edge electric vehicle software and infrastructure, we believe this project can serve as a model approach for modern efficient and eco-friendly public transportation. In addition to our hub in Fresno, we alongside our partner e-Formula are in the final stages of contract negotiation with Taiwan’s first electric vehicle V2G hub project for 95 EVs. Upon the successful negotiation of our final contract, our underlying business assumption would allow us to deploy a mix of unidirectional and bidirectional charging station ranging from 11 kilowatt to 150 kilowatt. The project is intended to spend over 20 years and has the potential to become a benchmark in the industry as we believe it is a testament to our role as a partner of choice.
We see V2G hubs as key trend of our future growth prospects as these large-scale projects allow us to bring the best of our capabilities and services in one centralized offering that opens the door to significant steady recurring revenue for years and even decades to come. We are seeing strong market receptivity for these hubs and believe our pipeline of interested customers will continue to grow as we make inroads on our existing projects. In recognition of the importance of this offering to our business, we have launched a dedicated website containing additional information, customer resources and the latest update on our ongoing projects at www.nuvvev2ghubs.com. Our ability to execute our growth strategy is supported by the steps we have taken to bolster our financial foundation.
Over the course of the year, we have made tremendous strides in our expense management and cost reduction effort, reducing year-over-year cost by $4.6 million. In addition, in the first quarter of 2024, we raised $9.6 million in new capital that will allow us to invest in major projects like our V2G hubs and support innovation across the business. With this capital infusion, we have strengthened our balance sheet and are moving forward with an improved cash position that will support our continued strategic execution for the foreseeable future. As we look to the year ahead, we expect to see continued strong growth throughout 2024 and remain on track to reach $15 million to $20 million in revenue for the year. Our outlook is based on our plans to continue applying our technology and expanding our partnership as well as our current trends in our operating environment and ou9r market share position.
We expect our backlog to be at an all-time high with a strong base to support our views on 2024 revenue. With that, I will turn over the conversation to David, who will provide more detail on our financials from the past quarter and year. David?
David Robson: Thanks, Gregory. I will start with a recap of fourth quarter 2023 results. In the fourth quarter, we generated total revenues of $1.64 million, compared to $1.15 million in the fourth quarter of 2022. The increase is attributed to a $0.3 million increase in product revenue and a $0.13 million increase in service revenue due to higher customer sale orders and shipments and an increase of $0.07 million in grant revenues. Product and service revenues for the quarter consisted of sales of DC and AC chargers of approximately $1.1 million, grid service revenues of $0.2 million and the balance primarily consisting of engineering services. Margins on product to service revenues were 24% for the fourth quarter 2023 compared to 32.7% for the fourth quarter 2022.
The decrease of 8.7% was primarily driven by the change in year-over-year sales mix between hardware and services. Operating costs, excluding cost of sales, was $7.9 million for the fourth quarter of 2023 compared to $9.2 million in the fourth quarter of 2022. The decrease was primarily attributed to lower compensation and benefits, marketing, insurance and travel, offset by increases in legal expense. As a result of our ongoing efforts to reduce costs, cash operating expenses excluding cost of sales, stock compensation and depreciation and amortization was $7 million in the fourth quarter of 2023, a $0.7 million decrease from $7.7 million in the third quarter. Net loss attributed to Nuvve common stockholders decreased in the fourth quarter of 2023 by $0.34 million to $7.52 million from $7.86 million in the prior year.
