Nuvve Holding Corp. Q3 FY2024 earnings call

• The third quarter was challenging but saw the fruit of ongoing efforts paying off, with expense reduction and margin increase while top-line sales picked up, including the kickoff of the hub project with the Fresno Economic Opportunity Commission. - School bus business sales started picking up after a sluggish start due to EPA approval delays, with benefits expected in Q4 but revenue sliding into 2025 and work on EPA round 4 underway. - Recognized revenue from the Fresno EOC project, which brings critical cash and secures 2025 revenue. - The Nuvve GIVe software platform connects various resources for grid modernization, helping fleet operators save money and optimize assets. - Signed a contract with e-Formula for the Taipower Corporation project, with a breaking ground event likely mid-February after Chinese New Year, involving 90+ charging stations and stationary storage using technology from the Fresno project. - Multiple sites signed up with WISE EV-LLC for public infrastructure, TEP applications submitted to NV Energy, and SPV structure adopted to accelerate deployment, make revenue more forecastable, and bring upfront cash. - Progress continuing with Capital Global on strategic investments, and Nuvve seen as a key grid modernization tool beyond just an EV company, with need existing regardless of federal EV mandates.

In the third quarter of 2024, Nuvve generated total revenues of $1.9 million, compared to $0.8 million in the second quarter of 2024 and $2.7 million in the third quarter of 2023. The $1.1 million quarter-over-quarter revenue increase was driven by a $0.9 million increase in service revenues and a $0.2 million increase in hardware revenue. $0.6 million of the service revenues earned this quarter related to the hub project in Fresno, California. When compared to the third quarter of 2023, revenues decreased by $0.8 million, impacted by non-recurring EV school bus sales of $0.9 million offset by higher service revenues. Year-to-date revenues through September 30, 2024 were $3.5 million, down from $6.7 million in the prior year period, with a decline of $3.2 million due to reduced charger hardware sales of $2.4 million and non-recurring EV bus sales of $0.9 million. Gross margins improved in the third quarter of 2024 to $1 million compared to $0.3 million in the same period last year. Year-to-date gross margins were $1.5 million versus $0.9 million in the prior year. Gross margins were boosted by improved pricing on hardware sales and a higher mix of service revenues. DC charger gross margins at standard pricing generally range from 15% to 25%, AC charger gross margins are approximately 50% (though smaller in dollar terms of DC chargers), grid service revenue margins are generally 30%, and software and engineering service margins are as high as 100%.

• Q4 revenue will see some benefits from school bus business and the Fresno project, but revenue is expected to slide into 2025 while working on EPA round 4. - The Fresno hub project secures strong baseline revenue for 2025. - Taipower project breaking ground likely mid-February after Chinese New Year. - SPV structure makes future revenue more forecastable. - Received $3.1 million in proceeds from convertible notes in October 2024, to be paid off in monthly payments with interest in cash or equity from February 2025 through April 2026.

• Delays in EPA funding awards negatively impacted hardware sales pace this year. - Cash flow risks due to cash operating losses and changes in working capital. - Project进展 risks, such as Taipower project not proceeding as planned or SPV deployments facing obstacles.