Nuvve Holding Corp. (NASDAQ:NVVE) Q4 2024 Earnings Call Transcript

Nuvve Holding Corp. (NASDAQ:NVVE) Q4 2024 Earnings Call Transcript March 31, 2025

Operator: Good day and welcome to the Nuvve Holding Corporation Second Quarter [ph] Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today’s 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 quarterly report and fiscal year report. Following the prepared remarks, we will open up the call 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. Welcome to our Q4 2024 and fiscal year 2024 results call. I’m not going to try to sugarcoat it, 2024 has been an extremely challenging year. I should say horrible for the first time since 2021, our revenue went down compared to last year. We know that we are not an isolated case as it has been for most of the companies in our industry with many of them going out of business. Delays have been hearing us across the board. Concerning our K-12 school bus business, during the first two quarters of the year, many of the school district partners were expecting to receive the final EPA approval letters, which arrive sometimes with up to six-month delay, forcing them to hold on their purchase orders until they got the final approval later for their grants.

Q3, Q4 then picked up, but the damage was already done. In the same way, our hub projects have been impacted with delays due to their financing, taking more time than initially thought. And though we are confident that our financing will go through, we are still finalizing some terms. But we did not stay passive. First of all, we have been working hard on reducing our costs, especially our cash expenses. For fiscal year 2024, both our cash and non-cash operating expense, excluding cost of sales, went down by 33% compared to our fiscal year 2023 expenses. We are working every day on reducing our cash expenses, trying to minimize the impact into our operations, product development, and product qualification. I will give you more insight in a few minutes.

We have also been working hard on expanding our business in order to reduce our exposure to governmental funding, especially federal subsidies and accelerate revenue. With this potential reduction in electric vehicle subsidies, we have decided to move more aggressively into the stationary battery business. Our GIVe platform is very good at managing hard to predict batteries availability from electric vehicles such as school buses. It also does an exceptional job at managing stationary batteries and can help extract more value from these batteries. From our perspective, stationary batteries are essential to provide grid monetization, either behind a meter or in front of the meter, keeping the cost of energy equitable. We have now announced our first Battery-as-a-Service model in the United States.

Q&A Session

Our Battery-as-a-Service business model for electric cooperative allows the co-ops to deploy stationary batteries, reducing their exposure to coincidental peaks, a situation where the system is experiencing, a peak consumption, while the transmission system they are connected to is also experiencing a peak. These peaks make the cost of the kilowatt hour very expensive. Our service allows co-ops to keep the cost of energy low by reducing peaks, while also providing more resiliency to their members. We are also expanding our stationary business battery — stationary battery business in Japan, as we announced recently. The Japanese battery aggregation market has been expanding rapidly and value for our platform like ours is strong. Therefore, we have announced a couple of weeks ago we’re establishing a new entity in Japan.

This company is in the process of pursuing capital raising activities locally. Now intends to keep a controlling interest in the new entity, while bringing aboard local investors to support the local business and key capital needs. This is our second approach to reducing our cash expenses, sharing some equity of our local subsidiaries while leveraging our existing expenses in Japan in addition to generating potential future cash flow for Nuvve Holding for services and access to the platform. Now the last but not the least, back in the US, we have also been selected by the state of New Mexico to deploy a variety of electric vehicle and the corresponding infrastructure. The addressable market opportunity is estimated at $400 million of capital deployment which is large, complex and requires a significant focus from our organization, which is why we have decided that Ted Smith, our COO and President, will be 100% focused on this opportunity and will become the CEO of our local organization that has been driving this effort from the beginning and have created an amazing consortium of companies that we have — that we will be announcing very soon.

The purpose for which the company is organized is to serve as the designated local presence for the execution of the state purchase agreement, SWPA awarded to Nuvve Holding Corp. pursue on the Electrify New Mexico initiative and to develop construct, finance and operate a comprehensive suit of green energy and transportation electrification solution in New Mexico and surrounding states. These business activities include without limitation, a, turnkey electric vehicle charging infrastructure and related site development services; b, vehicle to grade B2G technology deployment and aggregation; c, stationary battery energy storage system; d, microbit and resilience hubs; e, electric corridor charging network and depot charging system; f, vehicle procurement, leasing and financing; and g, the valuation, acquisition, removal and replacement of internal conversion engine, ICE vehicle fleets and related infrastructure to accelerate fleet electrification.

This new LLC will also seek investment for local investors, while leveraging Nuvve Holding existing cash expenses and providing potential future cash flow to Nuvve Holding through services provided to the new LLC. In summary, though 2024 is extremely challenging, we have been able to survive it sometimes at an expensive price. During this period, we have been working on transforming the company, but we feel that we are now very well positioned as a grid modernization and vehicle-to-grid company to close on our key opportunities and accelerate our business expansion, working with both Cappello Global and ROTH Capital. And now, I will let David take you through the details of our financials. David?

David Robson: Thanks Gregory. I will start with a recap of fourth quarter 2024 results. In the fourth quarter, we generated total revenues of $1.8 million, compared to $1.6 million in the fourth quarter of 2023. The increase was primarily driven by higher charger hardware sales versus the same period last year. During the full year 2024, total revenues were $5.3 million, which compares to $8.3 million for the prior year period. The year-over-year decrease in revenues is also primarily driven by the reduction in charger hardware sales due to the timing of EPA funding awards this year versus last year, as well as the sales of school buses in the prior year period. Margins on products, services and grant revenues were 15.8% for the fourth quarter of 2024, compared with 29% for the year ago period.

Our gross margin percentage in the fourth quarter of 2024 was impacted by competitive pricing pressures on the sale of DC chargers to a single large customer. Year-to-date margins through December 31, 2024 were 33.1%, compared with 16.2% for the year ago period. The increase in the gross margin percentage was primarily due to overall higher pricing on hardware sales, nonrecurring EV bus sales and a higher mix of service and grant revenues compared with last year. Excluding grant revenues, margins on product and services were 11.4% for the fourth quarter of 2024, compared to 24% in the year ago period. On a full year basis not including grant revenues, the margins on product and service revenues was 27.5% in 2024, compared with 12.8% in the prior year.

As a reminder, margins can be lumpy from quarter-to-quarter depending on the mix. DC charger gross margins as stated 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. Grid service revenue margins are generally 30%, while software and engineering service margins are as high as 100%. Operating costs excluding cost of sales was $5.9 million for the fourth quarter of 2024 compared with $2.8 million for the third quarter of 2024 and $7.9 million for the fourth quarter of 2023. We have continued to drive efficiencies throughout 2024 resulting in lower overhead costs. We expect to lower operating costs we have realized this quarter to continue into future quarters.

On a full year basis, operating expenses decreased from $33.5 million in 2023 to $22.2 million in 2024, primarily driven by lower payroll, legal, public company expenses and consulting expenses. Cash operating expenses excluding cost of sales stock compensation and depreciation and amortization expense increased to $5.1 million in the fourth quarter of 2024 versus $2.2 million in the third quarter of 2024 and decreased by $1.8 million from $6.9 million in the fourth quarter of 2023. Other income was $515,000 in the fourth quarter of 2024 up from $130,000 in the year ago quarter. The current period benefited from non-cash gains from the change in fair value of convertible debt and warrants offset by higher interest expense related to short-term loans.

Net loss attributable to move eComm stockholders decreased in the fourth quarter of 2024 to $5.1 million from a net loss of $7.5 million in Q4 of 2023. The improvement was primarily a result of lower operating expenses. Now turning to our balance sheet. We had approximately $0.4 million in cash as of December 31, 2024 and excluding $0.3 million in restricted cash which represents a decrease of $1.2 million from December 2023. The decrease was primarily the result of $15.7 million used in operating activities offset by net capital raise of $8.5 million and cash receipts from short-term loans and promissory notes of $8.5 million. Subsequent to the year ended December 31, 2024 during the first three months of 2025 we raised an additional $2.6 million in gross proceeds through the combination of equity and debt offerings.

During the quarter inventory decreased by $1.1 million to $4.6 million at December 31, 2024 as we continue to reduce inventory levels. Accounts payable at the end of the fourth quarter of 2024 was $1.9 million a decrease of $0.3 million compared to the third quarter of $2.2 million. Accrued expenses at the end of the fourth quarter of 2024, was $3.4 million an increase of $0.1 million compared to the third quarter of $3.3 million. Now turning to our megawatts under management and estimated future grid service revenues. As a reminder, megawatts under management is a metric we used to quantify the aggregate 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 US and in light-duty fleet deployments in Europe in addition to stationary batteries.

Currently these charges and batteries are located throughout the United States, Europe and Japan. Megawatts under management in the fourth quarter increased 5.2% over the third quarter of 2024 to 30.7 megawatts from 29.2 megawatts, a 22.2% increase compared to the fourth quarter of 2023. In terms of its composition, 7.1 megawatts were from stationary batteries and 23.6 megawatts were from EV chargers. We continue to expect further growth in our megawatts under management, as we continue to commission our existing backlog of customer orders we have earned. 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 December 31, our hardware and service backlog increased to $18.3 million, an increase of $0.8 million from $17.5 million reported at September 30 2024.

This increase was related to contracts with customers that are expected to convert into sales in 2025. Year-to-date backlog has increased by $14.4 million from $3.9 million at December 31 2023, which is primarily related to a large hub project in Fresno California, which we began recognizing revenue in Q3 and continue to recognize revenue through Q4. As we look out to the next several quarters, we expect to see more activity on the Fresno Hub opportunity as this project gets built out. We also anticipate improvements in our cash burn resulting from the benefits of lower operating costs and improved gross margin dollars compared with last year. That concludes my portion of the prepared remarks. Gregory, back to you to conclude.

Gregory Poilasne: Thanks, David. Though very challenging from a revenue perspective 2024 has allowed us to work on our expense reduction and we are keeping on further reducing our cash expense without impacting our operations and opportunities. Finally, concerning our strategic path expect to hear soon from us. But I want to thank you and open the floor to questions.

Operator:

Gregory Poilasne: Thank you everybody.

Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.