Beam Global Q4 FY2024 earnings call

• Revenue in 2024 was over double prior years, with a 124% increase from 2022. - Continued investment in sales resources with new hires in U.S. and Europe. - Backlog as of December 31, 2024, was $5.6 million. - Gross margin improved due to engineering design changes, material cost reductions, and acquisitions in Europe. - Expanded business in 2024 through acquisition, product portfolio expansion, geographic expansion, new patents, and recurring revenue models. - Introduced new products like BeamBike, BeamPatrol, BeamSpot, BeamWell, and BeamScoot, with some already sold or in development.

Beam Global's 2024 revenues were $49.3 million, more than double any previous year's revenue excluding 2023, representing a 124% increase over 2022 revenues and a 5-year revenue CAGR of 68%. Gross margin for the 12-months ending 2024 was 15% GAAP, improving to 21% non-GAAP. European operations contributed approximately 1/4 of 2024 revenue.

• Management expects to reach positive cash flow this year even without growth, as all EV ARC sales will be at new increased prices, COGS reduced by cost savings, and no further cash outlays from acquisitions. - Anticipates growth in new products and geographies, with transition to new customers and markets despite short-term challenges in U.S. federal orders.

• Uncertainty in U.S. government's zero-emission vehicle strategy related to the presidential election impacting federal orders. - Tariffs and other negative impacts to the global economy could affect the trajectory to positive cash flow. - Serbia being on the tariff list, though potential for reduced tariffs is seen as a positive factor.

Q: Can you review your product introduction timeline in terms of the new products, do you have prototypes for many of the products, including the streetlight product? And I mean, are you expecting initial sales from many of these products this year? Or could it stretch into '26 as well?

A: I'm certainly expecting to sell them to 2026 but no, I got to tell you, I think the interest that we're seeing in BeamBike particularly, actually, people love BeamBike. Everywhere I go, people love BeamBike. And that was a product that we actually developed to save lives to allow people to charge their bicycles outdoors instead of plugging them into their apartments and burning themselves to death, when the batteries catch fire which unfortunately, sometimes do, but we've seen a lot of interest in the U.S. and in Europe for BeamBike. BeamPatrol, I think, has got a lot of potential as well with law enforcement, border patrol and others, both in the U.S. and in Europe. These electric motorcycles are really getting traction with those law enforcement communities. But they just don't want to figure out how to do a charging infrastructure or can't. So we solve that for them. BeamSpot, we've already sold. We are making some dramatic improvements to that as -- that's not to be that surprising. We did that with EV ARC as well. and BeamScoot the last 1 that we haven't really sort of officially done the marketing launch on that, but again, very popular. Then BeamWell, we've already sold that. It's on its way to the Middle East now. So we can say we've sold BeamWell, we've sold BeamScoot, BeamSpot rather, and I believe we're going to get a lot of traction with bike and motorcycle products as well.

Q: On BeamWell, the desalination equipment. Do you guys -- do you work with an outside provider, and you do not do that or how do you integrate that into your equipment, please?

A: That's absolutely right. The desalination has been around for a long time. I had my first experience of it 4 years ago when I went to sea as a young engineer, on ships, we had to turn salt water into fresh water. Of course, there wasn't any other source. So it's been around for a long time. So I was very comfortable with it. And when this opportunity came up to create this life-saving product for NGOs in Gaza, I immediately knew what we had to do. And so yes, we've tried and tested technology. We don't have any risk where that's concerned. Our European team has done a fantastic job of integrating desalination plant onto the BeamWell product and also the four ruggedized electric scooters to give the e-mobility to deliver the food and water to those people who badly need it and medical supplies as well, by the way. So it's all tried and tested technology. And it's based on our EV ARC platform, so they're are covered by those patents and CE rated. So we're in a great spot where that's concerned. As I say, it's -- the first is already on its way to the Middle East now, and I'll be there to welcome it, frankly, at the end of April, and we already have a significant array of very interesting parties who will be reviewing that. And then we have one in particular who we're working with to take into Gaza.

Q: Last for me, please is on recurring revenue. I think I caught your comments on, so it's the sponsorship revenue, and is that most of it now, but then is there also Amiga product maintenance recurring revenue? Or is that going forward on some of the smart city products?

A: We do have some recurring revenue around maintenance, but I'm much more interested in these new models. It's certainly the sponsorship model. As you know, I've talked about that for a long time. It took me a long time to get that done. And I didn't or being a European team did it. But I think where you're going to see us go -- as we are going to increasingly as we add more and more intelligence to these smart cities products, we already have great relationships. This Romania trip has been fantastic for me. This Congress of Mayors seeing their response to our smart city products. They want this intelligence. And some of them will want to make capital purchases for it. But even when they do, there's going to be a data, a recurring revenue stream from data. And then I sincerely believe that in the future, we will offer entire things, hardware, software and data as a service, and so create some good recurring revenue. And by the way, that's the perfect use for our line of credit. We’ve got fixed price on that, we know how much the money cost. That would be a perfect time to dip into that line of credit to deploy infrastructure, which we can then take a recurring revenue stream. And of course, the simple arithmetic to figure out how to cover the cost of the money and then make a profit on top of that.