Nuvve Holding Corp. Q1 FY2024 earnings call

• Global electric vehicle environment is tough, especially in the consumer space. School bus business is supported by EPA funding, but first quarter 2024 was soft due to funding reduction. • Announced two key projects: with Fresno Economic Opportunities Commission, signed a $16 million transportation and renewable energy project contract, key subsidies to be finalized in next 60 days; in partnership with e - Formula, selected for a project in Thailand involving 90 + charging stations for shuttles, solar and storage. • Emphasized V2G technology's value proposition around vehicle readiness, energy management, and battery life extension. Platform combines game platform and AI forecasting platform. • Expect School Bus business to pick up in second and third quarters with EPA Round 2 and Round 3.

In the first quarter of 2024, total revenues were $780,000, down from $1.85 million in the first quarter of 2023. Margins on product and service revenues were 34.7% in Q1 2024 compared to 21.2% in the year - ago period. DC charger gross margins generally range from 15% to 25%, AC charger gross margins are approximately 50% (but in dollar terms are a small fraction of DC charger revenue). Risk service revenue margins are generally 30%, while software and engineering service margins are as high as 100%. Hardware and service backlog reached a record $19 million on March 31, 2024, an increase of $15.1 million from $3.9 million on December 31, 2023. Megawatts under management in the first quarter increased 6% over the fourth quarter of 2023 to 26.6 megawatts, a 45.4% increase compared to the first quarter of 2023. It included 7.1 megawatts from stationary batteries and 19.5 megawatts from EV chargers.

• Expect 2024 revenue to be between $15 million and $20 million. • Anticipate acceleration in megawatts under management as the year progresses and backlog of customer orders is commissioned. • School Bus business expected to pick up in second and third quarters with EPA funding.

• Negative perception in the consumer electric vehicle space. • Reduction in EPA funding making school districts delay adoption decisions. • Uncertainty in contract negotiations for some projects.

Q: In light of the $15 million to $20 million in revenue guidance and the inventory uptick to $6.1 million, how much could a normalized year - end inventory level be and how does it relate to working capital and inventory for the $15 million to $20 million revenue?

A: 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, 3 to 4 months of inventory on hand of future sales.

Q: Can you give more color on notable dates for the EPA rounds hitting in 2Q and 3Q regarding school bus orders or timelines?

A: From what Gregory said in his remarks, is really the timing of when we see those announcements coming out in the Q2 to Q3 timing, but I don't have any more precision on that. And may be to answer more the question there is really about when we get the orders from the school districts, right? So I mean the Round 2, there are a few -- they are some that could be larger orders, and so we might publicize that. But it's really -- the time line is really in the hand of the school districts very often, right?