Wallbox N.V. Q2 FY2025 Earnings Call

Hello everyone and welcome to Wallbox's Second Quarter 2025 Earnings Conference Call and Webcast. I would now like to turn the call over to Michael Wilhelm from Wallbox. Michael, please go ahead.

Thank you and good morning and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Wallbox's Second Quarter 2025 Results. This event is being broadcast over the web and can be accessed from the Investors section of our website at investors.Wallbox.com. I am joined today by Enric Asuncion, Wallbox's CEO; and Luis Boada, Wallbox's CFO. Earlier today, we issued our press release announcing results from the second quarter ended June 30th, 2025, which can also be found on our website. Before we begin, I would like to remind everyone that certain statements made on today's call are forward-looking, and may be subject to risks and uncertainties relating to future events and/or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the SEC, including in the Annual Report on Form 20-F for the fiscal year ended December 31, 2024 filed on May 6, 2025. We will be presenting unaudited financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we use certain non-IFRS financial measures on this call, and reconciliations of these measures are included in the presentation posted on the Investor section of our website. Also, a copy of these prepared remarks can be obtained from the Investor Relations website, under the Quarterly Results section, so you can more easily follow along with us today. So with that out of the way, I'll turn it over to Enric.

Thank you, Michael, and thanks everyone for joining us today. We will start today's call reviewing highlights from the second quarter 2025, and spend time discussing commercial wins, strategic achievements, and the EV market. Luis will offer a closer look at our financial results and our key financial metrics before I close the conversation to highlight what we're focused on for the second half of the year. Q2 revenue was EUR 38.3 million, within our EUR 37 million to EUR 39 million guidance range, up 2% compared to last quarter but down 22% from a record high Q2 last year. The different revenue lines contributed similarly as the previous quarter with the growth resulting from increased AC sales and software. Sales in Europe incrementally improved compared to last quarter with countries such as Spain and Italy showing strong growth, but considering the solid EV market growth in the region, we are looking forward to improvements and further growth ahead. We are seeing sales accelerating with larger partners and we have decided to selectively invest in parts of our sales structure to capture the renewed market growth with smaller customers. North America has remained a strong contributor as we continue to develop our position in this region with existing and new partners. DC sales have been flat quarter-over-quarter, but we signed new partnerships and already see the results in orders for the second half of the year. In total, during the second quarter, we delivered over 39,000 AC units and more than 140 DC units. Most importantly, we built a significant backlog for both AC and DC, which increased by more than EUR 5 million. We aim to continue building our backlog to increase sales visibility and as a result improve our operational efficiency. Gross margin was 37.8% in the second quarter, which is within the 37% to 39% guided range. Compared to last quarter, the gross margin was stable as the revenue mix was similar as well. The additional gross margin improvements we are working on are not visible yet in the results. As we have been able to significantly reduce our inventory, which Luis will comment on later, this gives us an opportunity to improve gross margin in the future. On top of that, we continue to review our Bill of Material costs and are increasing our prices in certain regions. Improving the operational efficiency by right-sizing the organization remains on track. For the second quarter of 2025, labor costs and operating expenses are down 3% compared to last quarter and declined 25% compared to the same period last year. In the case of cash costs, which is defined as labor costs & OpEx excluding R&D activation, non-cash items and one-off expenses, the result is even more impressive as we achieved a 35% year-over-year reduction. It is great to see our efficiency improve each quarter as we edge closer towards profitability. We are achieving this expanded efficiency meanwhile consciously taking care of how our set-up is best serving our markets, business units and allowing us to capture maximum growth. If this means we need to selectively invest in the sales structure or customer support, we are doing so, but always with a profitability and return on investment mindset. The second quarter 2025 adjusted EBITDA is within our guided range, landing at minus EUR 7.5 million and reflecting a small improvement compared to last quarter. If we compare to the same period last year, adjusted EBITDA improved 33%. Our improvements towards operational breakeven are consistent, however our Q2 results could have been on the higher end of our guidance range. The main reason for this relative softness is a slower than expected decrease in operating expenses, which Luis will comment on. We are confident about our potential for the coming quarters. Overall, in the last couple of quarters, we have consistently been achieving our guidance reflecting our ability to control the business. This control is crucial as the European EV market resumes strong growth, allowing us to leverage the Wallbox platform. Wallbox has a leading set-up with a full product portfolio, geographically diversified position with a targeted market approach and strong commercial partnerships. We believe the combination of these elements sets us up for success. For the second quarter of 2025, Europe contributed EUR 26.1 million of consolidated revenue, or 68% of total topline. The European EV market has continued to recover well and showed 30% growth year-over-year for the second quarter. We have seen this growth trend reflected in our performance in certain countries, but not across the board. We recognize the importance of focusing on capturing the growth now that the market improves. With our strategic positioning across Europe with a complete product portfolio, we expect there are incremental growth opportunities in this region for the upcoming quarters. North America continued to be a cornerstone of our business performance and contributed EUR 11.4 million or 30% of the total revenue, the same as last quarter. The EV market growth has slowed down in this region, decreasing 5% compared to last year, but we continue to build out our position with our main partners such as Stellantis, Florida Power & Light, Ensol, and Generac. In parallel, we aim to replicate these types of partnerships with new partners and new regions. Both APAC and LatAm remain small regions for Wallbox, now contributing approximately EUR 260,000 or 1% and EUR 550,000 or 1% respectively for the quarter. These regions continue to have significant future potential, however, considering our efficiency efforts and refocus, are not our top priorities. AC sales of EUR 26.6 million, including ABL and Quasar, represented approximately 69% of our global consolidated revenue, with a 4% improvement compared to last quarter, and down 18% year-over-year. Compared to the record high quarter last year, the results in Europe have been weak, but with positive outliers in certain countries and a stronger outlook. For example, we have announced a collaboration with PowerGo to deploy EV charging solutions across hotels in the Netherlands. The installations will feature Wallbox's eM4 and the Supernova DC fast charger. This collaboration brings together Wallbox's advanced charging technology and PowerGo's renewable energy-powered infrastructure to support the growing demand for sustainable mobility in the Netherlands. Besides, we are working on ramping up sales with new products such as the Pulsar Pro Socket and the Pulsar Max Socket with orders from Rexel, Sonepar, Libra, and others. AC sales in North America remain strong, growing 9% year-over-year. As mentioned before, we have continued to expand the scope of the activities with our commercial partners in the region. In addition, we delivered the first units of the Quasar 2, contributing more than EUR 100,000 in this quarter. This is a very exciting step for Wallbox and our partners, as we spearhead bi-directional charging, allowing us to create more value beyond driving your EV. Shortly, I will provide more about this milestone. DC has been the weakest link in our results compared to the same quarter last year, but after a weak performance in the second half of last year, we believe it has now stabilized and we expect that its performance will improve in the upcoming quarters. DC sales in the second quarter landed at EUR 4.2 million or 11% of sales, the same contribution to our total result as last quarter. After a period with a conservative approach from CPO customers regarding the roll-out of their infrastructure, we see opportunities to grow again with our existing partners and new partners and we saw our backlog for the second half of the year grow accordingly. Recently, we announced the expansion of our partnership with Ensol, which provides EV charging infrastructure in Texas, Florida, and Georgia. Initially, this partnership was focused on installing Wallbox's Pulsar line of AC chargers at residential and commercial sites. The new phase extends our partnership into DC fast charging for the first time, centered around Wallbox's Supernova charger, now certified under both CTEP and NTEP standards. Overall, the upward trend we see in the DC sales compared to the last quarters is exciting, both for topline growth and margin improvement. Software, services, and others have been the best performing business activities compared to the same period last year, growing 27% year-over-year. These activities generated EUR 7.6 million or 20% of the total revenue. Especially, software showed strong performance compared to last quarter, mainly driven by Electromaps, our eMSP service. The growing European EV market is creating more demand for public charging, which we can see in the increase of charging sessions managed by our software. Installation services continue to be the largest contributor of this category, but less than last quarter. Overall, we are happy to see that the category software, services, and others is performing well and is contributing significantly to the overall business performance. On our last earnings call, we commented on the pre-orders opening for Quasar 2 and the importance of this product as part of our Smart Energy Solutions. Now, the first units have been installed in Menifee, California. This groundbreaking project, in collaboration with Wallbox, Kia, and the University of California, Irvine, has the goal of accelerating EV infrastructure and enabling fully electric, energy-resilient communities. We are very excited about these developments as our mission is to be the ultimate energy player, and we believe these developments bring us closer to that reality. The Quasar 2 puts our customers in charge of their energy choices and offers innovative solutions, such as backup power and smart charging, to create value. Bringing this product live required significant research and development efforts internally, but also in collaboration with automotive partners to develop the product, standards, and protocols we know today, lowering the threshold and investment for widescale application in the future. After all these efforts, we are happy that the product is being installed and is already delivering real value to customers and communities across the U.S. In addition, as part of our Smart Energy Solutions, we have launched virtual power plants in California and New York through our partnership with Leap. The initiative is part of Wallbox Rewards, a newly launched smart charging program that enables Wallbox users to earn incentives by contributing to grid flexibility through their EV home chargers. We are going to leverage our installed base by connecting an aggregated pool of thousands of residential chargers with local energy programs, which will help utilities manage demand peaks, balance the variability of renewable generation, and improve overall grid stability. On top of the financial incentive to contribute to grid stability, users will enjoy the benefit of charging when electricity is cleaner and more affordable. The EV sales in our addressable market, which we define as all regions except China, continues to show growth in the second quarter and strengthens our belief that the future is electric. Rho Motion reported 1.9 million EVs sold in Europe, North America, and Rest of World combined, which represents a 23% increase compared to last year. The Rest of World and Europe both showed approximately 30% growth compared to the same period last year, while the North American market contributed negatively with a 5% decrease year-over-year. Europe is showing a strong recovery due to a larger range of more affordable vehicles and government support in certain countries. We are excited to see this turnaround, and we believe it will provide us with tailwinds, as Europe remains our largest market. While this recovery does differ per country and it is not across the board, we see strong growth in countries that historically had low adoption of EVs such as Spain. In the second quarter of 2025, more than 66,000 EVs were sold in Spain, which is more than EV leading countries such as Norway, Belgium, and the Netherlands. This is reflecting how quick the EV transition can accelerate in terms of absolute numbers once large car markets in our addressable scope are becoming electric. For the North American region, in the U.S., the EV market is about to lose key subsidies, such as the 30D tax credit, and is facing changing emission policies. In 2025, approximately 50% of EVs sold in the U.S. have been eligible for the 30D tax credit, according to Rho Motion. The removal of these credits and the changing sentiment under the new administration are expected to have an impact on the EV market. Nevertheless, we are confident regarding our capabilities to continue growing in the U.S. this year due to our strategic partners and the visibility on sales. However, we recognize the volatility and its potential impacts for future growth. Historically, Europe was the initial front runner of the EV adoption, then the North American market proved to be the largest growth opportunity, and now Europe is recovering fast. These market dynamics are another proof-point of the importance of being geographically diversified and the reason why we focus and redistribute our resources to cope with regional EV market volatility. If we look at our total addressable market, the EV market has been consistently growing and we believe the EV transition is on an irreversible path. However, adapting to the market dynamics with a flexible and resilient organizational structure is key until markets become more mature. Our objective is to have the right organization set-up, capture growth where it takes place, and achieve profitability. Luis, I'll turn it over to you to comment further on our financial details.

Thank you, Enric. Good morning and good afternoon to everyone. The second quarter revenue landed within our guided range with EUR 38.3 million, reflecting a quarter-over-quarter improvement of 2%, but down compared to the record high quarter last year. Europe was soft, but did improve quarter-over-quarter and we expect further growth ahead. North America is consistent compared to last quarter and remains a large contributor to the overall business, growing nicely. DC sales have stabilized and show an upward trend, with backlog build-up. Gross margin was within our guided range and remained relatively stable quarter-over-quarter, reaching 37.8%. The product mix was similar, with higher Bill of Materials costs and freight marginally reducing gross margin. As mentioned by Enric, we see opportunities to improve gross margins, as we increase our shipments of new inventories with more efficient Bill of Materials and increase prices in certain regions. Q2 labor costs and OpEx totaled EUR 24.3 million, representing a 25% improvement compared to the same period last year. We continue to optimize the organization while revenue levels remain consistent, and we believe there is an opportunity to grow significantly with this cost structure, especially as we focus our investments towards sales, to capture the current EV market uplift in Europe. Cash costs, which is defined as labor costs and OpEx excluding R&D capitalization, non-cash items, and one-off expenses, declined even further, down 35% year-over-year. Even though we are making progress on the combined labor costs and OpEx result, this quarter showed a slight increase in OpEx due to additional freight, duty, and tariffs costs. This was unexpected, as we had to react to the consistently high demand in the U.S. Going forward, we see opportunities to better manage and mitigate these variances for greater margin read-through. Consolidated adjusted EBITDA loss for the quarter was EUR 7.5 million, on the lower side of the guided range. This was due to lower gross margin and limited quarter-over-quarter improvement in OpEx. However, when the result is compared with the second quarter of 2024, the adjusted EBITDA improved 33% year-over-year. Overall, we show continuous organizational efficiency improvements, which, combined with the expected revenue improvements in the quarters to come, will help us to achieve our goal of becoming adjusted EBITDA breakeven. We ended the quarter with approximately EUR 32.4 million of cash, cash equivalents, and financial instruments. During the quarter, we closed another investment round of approximately USD 15 million with more than USD 9 million from the Government of Spain through the Spanish Society for Technological Transformation and USD 5 million from existing investors, including Iberdrola and Orilla Asset Management. We appreciate the continuous support of our investors and their alignment regarding the future potential of the company, and welcome the strong addition of SETT to our cap table. Loans and borrowings totaled approximately EUR 182 million at the end of the quarter, comprising EUR 80 million in long-term debt and EUR 102 million in short-term debt. Total debt decreased EUR 18 million, 9% compared to last quarter. The main reason for the decline was a lower use of our working capital facilities, combined with repayments of small portions of debt that were due. For the majority of our loans and borrowings, we have an 18-month interest-only period with our primary lenders, as commented on in our previous earnings call. CapEx remained light and totaled EUR 1.0 million, of which EUR 0.4 million was related to investments in Property, Plant and Equipment. This reflects an already expected increase compared to last quarter, as mentioned in the Q1 earnings call. If we compare to the same period last year, CapEx investment decreased 62%. On inventory, we have made better than expected progress and continue to release cash. At the end of Q2, inventory landed at EUR 56.6 million, reflecting a 33% decrease year-over-year and 11% compared to last quarter or EUR 7 million. Another proof-point that operationally, on the items we can control, we are making solid progress. Enric, I'll turn it back to you to provide some closing commentary.

Thank you, Luis. Our second quarter 2025 results were in line with our guidance. The consistent improvement on the items we can control and the stable results give us confidence in our ability to accelerate improvements. As the EV market in Europe, our largest region, is recovering and our growth in the North American market remains, we believe we may print a stronger second half of the year. I can't stress enough that I strongly believe that the global platform we have built, with an innovative product portfolio, is leading the industry. As we start to leverage this platform and, in parallel, continue to work on the right organizational set-up, we believe profitability is within reach. With that, I would like to discuss next quarter's guidance. For the third quarter of 2025, we have the following expectations: Revenue in the EUR 38 million to EUR 41 million range; gross margin between 37% and 39%; a negative adjusted EBITDA between EUR 6 million and EUR 4 million. With that, we're ready to take questions from our analysts.

Welcome back everyone. To our analysts, we ask that you post one question with a follow-up if needed, then re-enter the queue if there is more. This will allow each of you to ask your questions up front and we'll get to as many additional questions as time allows. Paul, I think you have some instructions for our analysts.

And the first question today is coming from Jon Windham from UBS.

I just wanted to level set, it's been almost two years since the Generac investment. Just any color or commentary you have around the status of progress with that relationship.

Yes, you're correct. This year marks two years since Generac's first investment. Since then, we’ve begun to commercialize our home chargers with them in North America. Currently, one of Generac's product lines is EV chargers, specifically home EV chargers, which Wallbox integrates and they resell under the Generac brand through their various dealers. Over the past two years, we have also focused on integrating our apps and platforms within the Generac ecosystem, along with their products. Today, they not only offer Wallbox chargers but also an app that manages those chargers. We believe the solution we're providing to Generac's dealers and customers is the best available in North America. In terms of revenue, we have already seen traction, with several thousand units delivered to Generac for resale to their customers. Another key area is our commercial sales of Supernova, which we are developing in both North America and Europe, where Generac operates under the brand Pramac. We are pleased to have launched a new solution for fast charging. One significant challenge for charge point operators deploying fast chargers is power availability. While a location may have around 100 kilowatts, operators often need to provide more. A viable solution is pairing an industrial battery with a Supernova and our CCS controller software, which can deliver over 200 or 300 kilowatts. Additionally, when no customers are charging, the battery can be recharged. We launched this initiative a couple of quarters ago with Pramac, and we are starting to see interest from customers in the initial pilot tests of this technology. Overall, the partnership is progressing well. We hope to accelerate our pace, but there are many integrations and products we are developing together.

Perfect. Appreciate it. And if you'll allow me as a follow-up, slightly different question. Can you talk a little bit more about the Quasar 2, what that project is? And just if you could just provide some details about the offtake size, who the partners are?

Yeah. So this is very exciting, and this is for me, one of the most innovative projects that have ever been done in the EV charging world. We are the first CCS bidirectional charger being certified and delivered in North America, and I think we are several months, if not years ahead of the competition. What this product does, and I think I commented in the past, but I think it's good to remind everyone, it's not only a charger, it's also a bidirectional charger. So it allows you to discharge the battery of your electric car. And that means that in case of a blackout, it can behave as a backup generator. So you can power your home with the battery of your electric car. An electric car battery is a massive battery. It's a 100-kilowatt hour battery in the case of the Kia EV9, which is the car that we are starting to sell this product. We have partnered with Kia, and we are doing the first deliveries to Kia EV9 owners. A 100-kilowatt hour battery allows you to power a home for more than a day or even almost three days depending on your power consumption. So even if you don't have the car fully charged, you still will be able to use it as a backup generator. And it’s not only a backup generator. It also gives you the opportunity that if you have solar panels or the pricing of energy changes by the hour, you can charge when energy is cheaper and discharge when energy is more expensive. After many months and more than a year of working on this project, we have delivered the first units to Kia EV9 users. That's something we are doing slowly because we are slowly ramping up. We want to make sure that everything goes smoothly and well because we have more preorders and more demand than we are delivering today. So this last quarter, we delivered a few tens of units. But this is something that we will start to ramp up. By the end of the year in Q4, we believe we can exceed the 100 units or more per quarter and continue growing. This presents a very important opportunity for revenue growth for the company. Just to repeat about the opportunity here, it's not only a charger, it's something that can power your home. To give you an idea, 100 kilowatt hours, which I was referring to, is the equivalent of seven Tesla Powerwalls. So it’s a massive battery that you have basically for free because when you buy your electric car, you already have the electric car.

The next question will be from George Gianarikas from Canaccord Genuity.

You have Matt on here for George. Just to start off, it seems like the Supernova backlog is growing nicely. What kind of cadence should we expect for deployments going into the back half of this year and into '26? And what does that look like from a geographic standpoint?

Yes, this is Enric. Regarding the backlog, I understand you were asking about it. The positive aspect is that we typically focus on the increase in backlog as we progress. Notably, in the last quarter, our backlog has grown by more than EUR 5 million, approaching EUR 6 million. This increase primarily comes from AC sales in Europe and North America. We’re experiencing strong traction in North America, particularly in fast charging. Over the past couple of quarters, we have concentrated our business on a specific segment of the fast charging value chain, targeting between 80 kilowatts and 400 kilowatts. We believe this is where we can achieve significant volume and profitability for our company and for CPOs. As a result of this focus on product and service offerings, we have secured more backlog in fast charging. Looking ahead to the second half of the year, we anticipate that this nearly EUR 6 million increase in backlog can be converted in the first couple of quarters of Q3, which presents an exciting opportunity for us. We also expect to see further growth in fast charging, with more orders coming in Q3 and into Q4. Therefore, our primary focus for backlog growth will be in the fast charging segment of our business.

Great. And I guess just as a follow-up, could you give us the latest updates on the ABL acquisition? How is momentum tracking in Germany and kind of the other key markets for that?

In terms of profitability, we are very, very excited about the efforts we've done here. We've been able to integrate the company and make sure that there were no redundancies in terms of costs. So we're undertaking, as in general in the whole company, at least a 40% personnel cost and OpEx cost reduction during the last year, while we've been able to maintain the revenue levels and the sales of the previous year. Now the focus since we have done the integration and we have been able to obtain these synergies, is the growth basically. Germany is a market that is back to growth. Actually, for the year-to-date, the growth is more than 40% on EV sales and plug-in hybrid sales. So this is great news because Spain and Germany are our home European markets. Spain because it's Wallbox's home European market, and Germany because it's ABL. Both are growing more than 40%. In Spain, we are seeing this growth and the company is expanding at that rate or even more. In Germany, I believe we need to invest more in the sales side of the business. We are planning and we are actually working on hiring more salespeople. We have been working also on changing the leadership for the German ABL sales organization. Finally, an opportunity that I think we are already seeing, but there's even more growth potential is the cross-selling. When we acquired ABL at Wallbox, we were not selling double socket commercial chargers. That's a product we didn't have. Quarterly sales of this product outside Germany, so these are sales that we do in France, the Netherlands, or other markets amount to more than EUR 1 million a quarter. This is just three quarters since we started this cross-selling process. I believe that as we move forward, we are adding more opportunities. I actually commented in the last earnings call about these opportunities that eM4 was bringing. So there's especially growth potential there. In general, ABL, we are very satisfied with the work done so far. But I believe that the opportunity here is on growing the sales organization and the support organization in Germany.

Okay. That was our last question. Thank you all for joining us today. We hope you found today's call a good use of your time. Let us know if we can help you in any way.