Nuvve Holding Corp. (NVVE) Q3 2026 Earnings Call Transcript

Good morning, and welcome to the Nuvi Holding Corporation Third Quarter 2026 Earning Conference Call. Please note this event is being recorded. On today's call are Gregory Poilon, Chief Executive Officer, and David Robson, Chief Financial Officer of Nuvi. Earlier today, Nuvi filed an 8K with the SEC Office Earnings Release of its Q326. Following 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 newbies' 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 newbies' filings with the SEC and in the earnings release issued today, which are available on our website. NUVI 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 Pallon, Chief Executive Officer of NUVI.

Gregory.

The third quarter marks the outcome of a long effort to build Nuvi around focused solidaries. Over the past year and a half, we created dedicated companies for each of our markets, including Nuvi Japan, Nuvi New Mexico, and Astraea, each with its own team, its own customers, and its own path to funding, with a lean holding company on top. The structure is now in place, And we have reduced head count and overhead significantly. We can now focus fully on executing in each of those businesses. You will see it in the numbers David will walk through. Operating costs were $4.6 million this quarter, then for $7.5 million in the second quarter. Our objective is simple. Each business should fund its own growth, and the holding company should carry only the cost of being a public company. Over time, our goal is for the subsidiaries to also cover those public company costs. Let me go through our main businesses. First, Japan. Nubi Japan's first project, a 2-megawatt, 8-megawatt-hour battery storage system in Mino City, Kifu Prefecture, is on track to come online this quarter. Once operational, the system will be aggregated and optimized on a new platform in the Japanese electricity markets. Building on this first project, Nubi Japan is now focused on behind-the-meter distributed batteries, a market that is moving very fast with both large systems and a growing number of smaller ones. Nubi Japan keeps an asset-light model. It does not own the batteries. It aggregates and optimizes them. Nubi Japan is self-funded today, and we see Japan as one of the most A solid foundation of our business going into 2027. Second, New Mexico. UV New Mexico was formed to execute on our statewide price agreement, Electrify New Mexico. That agreement is still moving forward, but slowly, while battery storage opportunities with rural corporates and municipalities are moving much faster. So that is where we are focusing. Keep Carson Electric Cooperative selected Nuvi New Mexico to deploy two 5-megawatt, 25-megawatt-hour battery systems at two sites in northern New Mexico under our battery-as-a-service model. Under this model, the cooperative gets the battery with no upfront capital while Nuvi operates them, and we are financing this project together with partners. This system will support peak load management and grid resiliency, back up critical facilities such as healthcare, fire and rescue, and participate in the Western energy imbalance market. We are working with Kid Car Center with definitive agreements. In Socorro, the city of Socorro was awarded $610,000 instead funding to work with Socorro Electric Corporate and NUVI New Mexico on the design and engineering of a planned 5-megawatt, 20-megawatt-hour battery system and substation. Together, these projects represent 15-megawatt and 60-megawatt-hour of battery storage in New Mexico, and the model is designed to be replicated across other Every role of corporate and municipalities in the state. Third, Astraea. As announced in our recent press release, we launched Astraea as a standalone company owned by Nuvi and Camerai. Astraea brings our AI forecasting platform to co-ops and municipal utilities, many of which have small teams and are facing fast load growth. Astraea gives them a forecast of up to two weeks ahead and one week back. Forecasting is becoming the critical hedge in energy storage. Astraea has demonstrated that it can raise battery revenue by 15%, which can represent as much as 25% in the value of the project increase. That is why we believe Astraea deserves to be its own company. Our plan is for Astraea to raise capital on its own without needing to be majority owned by Nuvi. This allows Australia to fund its growth directly from investors without drawing on Nuvi's cash, while our shareholders keep a meaningful stack in its upside. Finally, Europe. Looking forward, we see the largest opportunity for Nuvi in stationary battery storage in Europe. Our long experience in vehicle-to-grid gives us a real advantage in managing batteries. We know how to stack multiple grid services on the same asset and optimize Each asset individually, and with Astraea, we have best-in-class forecasting. Our strategy is to move beyond providing services and to own and operate batteries, starting with a pipeline of large-scale projects in Central and Eastern Europe. Owning these assets is also central to our capital market strategy, building a balance sheet of contracted revenue-generating batteries in our path to uplisting newly backed into the national exchange. We are working on the financing of those projects and expect to provide dates as definitive agreements are signed. With that, I will turn the call over to David to review our financial results.

David.

Thanks, Gregory. I will start with a recap of third quarter 2026 results. In the third quarter, we generated total revenues of $1.09 million compared to $1.6 million in the third quarter of 2025. The decrease was primarily driven by a decline in EV charging station shipments, lower associated service revenues, and a decline in grant revenues. Margins on products, services, and grant revenues were 24% for the third quarter of 2026, compared to 52% for the year-ago period. Margins were lower in the quarter due to a lower mix of service revenues compared with last year, the write-down of certain costs related to the Troy Project, and higher charger replacement warranty costs. As a reminder, margins can be lumpy from quarter to quarter, depending on the mix. DC Charger gross margins at standard pricing generally range from 15% to 25%, while AC Charger gross margins are approximately 50%. But in dollar terms, there 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 $4.6 million for the third quarter of 2026, compared to $7.5 million for the second quarter of 2026, and $5.9 million for the third quarter of 2025. Expenses decreased over last quarter due to lower public company and legal expenses. Expenses declined over the year-ago period due to lower payroll expenses, professional fees, and legal expenses. Cash operating expenses, excluding cost of sales, stock compensation, depreciation and amortization expense, and other one-time cost was $4.5 million in the third quarter of 2026 versus $7.3 million in the first quarter of 2026. versus $5.8 million in the third quarter of 2025. This represents a decrease of $1.3 million in expenses over the same quarter last year. Other income net was $0.4 million in other expense in the third quarter of 2026, compared to $0.3 million in other income in the second quarter of 2025. The current period was impacted by lower non-cash gains from the change in the fair value of warrants, while prior period higher non-cash gains from the change in the fair value of convertible debt and warrants were partially offset by lower interest expense from borrowings. Net loss attributable to Nuvie Commons stockholders. Decreased in the third quarter of 2026 to $4.3 million from a net loss attributable to newbie stockholders of $4.5 million in Q2 of 2025. The decrease in net loss attributed to newbie common stockholders was primarily a result of lower operating losses partially offset by higher non-operating expense. Now, turning to our balance sheet, we had approximately $0.4 million in cash as of September 30, 2026, excluding $0.3 million in restricted cash, which represents a decrease of $0.5 million from June 30, 2026. The decrease was a result of $1.2 million used in operating activities, primarily offset by capital raised through the issuance of common stock and preferred stock. And the exercise of warrants, totaling $0.7 million. Inventories were flat at $0.6 million at September 30, 2026, compared to June 30, 2026. During the quarter, accounts receivable increased to $0.8 million at September 30, 2026, compared to $0.7 million at June 30, 2026. Accounts payable at the end of the third quarter of 2026 was $7.2 million, an increase of $2.8 million compared to the second quarter of 2026 of $4.4 million. Accrued expenses at the end of the third quarter of 2026 was $4.2 million, a decrease of $0.7 million compared to the second quarter of 2026 of $5 million. Now, turning to our megawatts under management and estimated future grid service revenues, As a reminder, megawatts under management is a metric we use to quantify the aggregated 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 U.S. and in light-duty fleet deployments in Europe, in addition to stationary batteries. Currently, these chargers and batteries are located throughout the United States, Europe, and Japan. Megawatts under management in the third quarter. Was flat at 29.9 megawatts compared to the second quarter of 2026, an increase of 13.3% compared to the second quarter of 2025. We continue to expect further growth in our megawatts under management in 2026 as we continue to commission our 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 our backlog, on September 30, 2026, our hardware and service backlog was $4.9 million, a decrease of $0.4 million from $5.3 million reported at June 30, 2026. The decrease is related to contracts with customers that converted into sales during the third quarter, offset by new orders we earned during the quarter. As we look at the next several quarters, we expect to see more developments in Japan, New Mexico, and Europe. We also anticipate benefits from changes we have made in our organization structure to reduce overhead costs. This concludes my portion of the prepared remarks. Gregory, back to you to conclude.

Thank you, David.

To summarize, we have a structured movie into focused businesses with a much lower cost base. Japan is self-funded and growing. New Mexico is building a pipeline of battery storage projects with rural cooperatives. Astraea is launched as a standalone company and will raise capital on its own. And in Europe, we are building towards owning and operating battery storage assets, which we believe is the largest value opportunity for our shareholders and our path to uplisting. I want to thank our employees for their hard work through this transition and our customers, partners, and shareholders for their continued support.

Thank you very much.

We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Once again, to join the question queue, please press star 1 on your telephone keypad. This concludes our question-and-answer session.

I would like to turn the floor back over to management for any closing comments.

We want to thank you for your attention today, and we are looking forward to sharing more with you about our progress over the next quarter.

Thank you very much. Bye-bye. Ladies and gentlemen, thank you for your participation today. This concludes today's call. Please disconnect your lines and have a wonderful day.