Operator
Hello, everyone, and welcome to Wallbox's Second Quarter 2026 Earnings Conference Call and Webcast. At this time, all participants' lines have been placed in listen-only mode to prevent any background noise. After the speaker's remarks, there will be an opportunity for a question-and-answer session. Analysts who wish to ask a question can place themselves into the queue by pressing star 1. I would now like to turn the call over to Michael Wilhelm from Wallbox.
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 2026 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 Enrique Alcussion, Wallbox CEO, and Isabel Lopez-Torquillo, Wallbox CFO. Earlier today, we issued a press release announcing results from the second quarter ended June 30th, 2026, which can also be found on our website. Before we begin, I'd like to remind everyone that certain statements made on today's call are forward-looking, that may be subject to risk and uncertainties relating to future events and or future financial performance of the company. Actual results could differ materially from those currently anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the SEC, including annual report on Form 20F for the fiscal year ended December 31st, 2025, filed on April 9th, 2026. We will be presenting on-adulted financial statements in IRS format that reflect management's best assessment of actual results. Also, please note that we use certain non-IRS 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 Quality 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 Enrique.
Thank you, Michael. And thanks everyone for joining us today. We will start today's call with an overview of our second quarter 2026 results, provide our perspective on order intake and backlog, and spend time discussing operational improvements. Isabel will offer a closer look at our financial results, key financial metrics, and our current financial position after the completion of the refinancing, including the new capital raise in the quarter. After, I will close the conversation to highlight what we are focused on for the upcoming quarters. Q2 revenue came in below our guided range at 23.9 million euros, down 19% compared to the previous quarter. During the quarter, we delivered approximately 22,900 AC units and 40 DC units. Important to mention here is that this is not a demand problem, as order intake for our AC and DC products was up 11% compared to the first quarter, reflecting solid sequential momentum. In fact, as order intake exceeded revenue, we have been building a backlog rather than losing business, resulting in close to 12 million euros of total backlog. The gap between what we book and what we invoice is the result of operational constraints related to the final stages of our restructuring process, in which we have been negotiating new terms with our vendors. This limited our ability to convert that improved order intake into shipments this quarter. The positive impact of building a backlog, and part of our plan, is enhanced visibility related to our supply needs and the possibility for more efficient, more reliable operations. Gross margin for the quarter was approximately 38%, at the low and off, but essentially in line with our guided range of 38% to 40%. The sequential improvement of 70 basis points in gross margin was a good outcome given the software top line, and a sign that our product mix and cost discipline held up even as volumes were constrained. Labor costs and operating expenses landed at 17.3 million euros, approximately flat compared to last quarter, but improving 29% year-over-year. The progress on the cost-based reduction is flattening out as we continue to invest selectively in sales and service capacity to support the backlog bill while holding the line on our broader cost base. In addition, as mentioned in the last earnings call, we continue to see options to reduce costs by improving processes and systems, reduce complexity in our operations and centralized activities. Adjusted EBITDA loss for the second quarter of 2026 was 7.8 million euros, outside of our guidance range and wider than the €6 million loss in the first quarter, but approximately flat compared to the same period last year. This was driven by the loss of operating leverage on lower revenue, as just discussed, and not by deterioration in unit economics. Gross margin held up, but with €23.9 million of revenue instead of the €33 to €36 million we guided to, we did not generate enough gross profit to absorb our cost base as planned. As the backlog converts into shipments in the coming quarters, we expect this operating leverage to work back in our favor. Although we did not achieve all our expectations in the second quarter, we have seen growth momentum in order intake, secure the longevity of the company with the completion of the refinancing process, including new capital, and improve the operations for near-term profitability improvement. The main driver to break through the profitability barrier is improved revenue levels, which are within reach as proven by the momentum increase as investment in sales and services are starting to show results. Europe, or EMEA, contributed 17.7 million euros of consolidated revenue, or approximately 74% of total top line. This reflects a 22% decrease compared to last quarter, again, a reflection of the invoicing gap rather than weaker demand. Regarding AC and DC charges order intake, EMEA was a real bright spot, growing 14% sequentially. We also strengthened our commercial reach in the region this quarter. In May, we announced a partnership with pre-Nobile LEED to support tax certification across Germany, France, the UK, Ireland and Spain, giving fleet operators and individual driver access to Pulsar Max, Pulsar Pro and EM4 charging solutions depending on their needs. We see this kind of channel partnership as an important way to convert our growing backlog into durable recurring demand. In addition, we are also seeing our Net Promoter Score improve and our response times on spare parts get faster. We are not yet where we want to be on this, but we are making progress, and we are dedicating additional resources to our priority markets, which are Spain, France, Benelux, and Germany, alongside North America. North America contributed 5.6 million euros, or approximately 23% of total revenue, reflecting a decrease of 16% compared to last quarter and approximately 55% compared to the same period last year. The slowdown can partly be attributed to the softer North American EB market, which is down 22% compared to the same period last year. Order intake of AC and DC products in the region was approximately flat versus the first quarter, essentially stable and consistent with normal seasonality. We are increasingly reliant on a small number of large key accounts with a stable, if smaller base of long-tail customers. We expect a stronger contribution for large accounts in the second half of the year. LATAM was a revenue highlight this quarter, growing 64% sequentially. Although, from a small base, landing at 615,000 euros, or approximately 3%. APAC sales continue to be almost negligible, similar to last quarter. Both regions remain small for Walvo's at this moment. But the strong result improvement in LATAM shows how effectively selected distribution partners can contribute to sales growth. AC sales, including ABL and Quasar, totaled 15.8 million euros, or approximately 66% of global consolidated revenue, down 25% versus last quarter. However, order intake for AC overall was €22.6 billion, up 6% sequentially, with AC Europe and rest of the world the clear driver, as order intake there was up 26% quarter over quarter, while AC North America order intake declined modestly. As discussed, the revenue decline reflects the timing gap between that ordered intake and our ability to ship an invoice against it this quarter, rather than a change in underlying demand. We also launched the new Pulsar Pro across the European Union this quarter. Purpose will to simplify EV charging reimbursement for drivers, employers, fleets, and property managers through integrated MID-certified energy metering. Corporate vehicles account for around 60% of new car registrations across the EU, and we believe Pulsar Pro is well positioned to capture this workplace and share charging opportunity. DC sales landed at 1.6 million euros, or approximately 7% of revenue, down 37% versus last quarter. Again, largely a function of the same supply side timing constraints. The bright side is the DC order, which grew 80% sequentially to 3 million, with DC Europe and rest of the world more than doubling versus the first quarter. Our DC customer base is also diversifying as we are seeing more orders from smaller customers and becoming less dependent on a handful of large charge-con operators that we were in the past. We also completed the first real-world deployment of our supernova power ring architecture in Europe this quarter, installing a shared fast charging system at port desiges. The product is capable of delivering up to 400 kW to a single vehicle with a shared system capacity of up to 720 kW. Given the order intake trend, we are optimistic about the contribution power ring can make to DC growth as we move through the second half of the year. Software, services and others generated 6.5 million euros, or approximately 27% of total revenue, high 8% versus last quarter. Electromaps continue to stand up, growing strongly again, both sequentially and year over year. And this category overall gives us a growing high margin base of recurring revenue that is largely insulated from the hardware supply dynamics affecting AC and DC this quarter. In our addressable market, which we define as all regions except China, approximately 2.5 million EVs were sold during the second quarter, up 20% sequentially and up 30% year-over-year. Europe, our largest market, sold approximately 1.36 million EVs in the quarter, up 18% sequentially and up 28% year-over-year. The continued strong growth in the underlying market is consistent with the 14% sequential growth we saw in our EMEA order intake this quarter. North America sold approximately 373,000 EVs, up 12% sequentially, though still down 22% year-over-year, as the market continues to digest the removal of incentives and tax credits discussed on prior calls. The sequential improvement is an encouraging signal that the market may be stabilizing. Rest of World, which includes APAC and LATAM, was again the strongest growth pocket in our decibel market. Up 65% sequentially and up over 150% year-over-year, though it remains a small part of our current business given our deliberate decision to prioritize resources elsewhere. Overall, the EB transition continues to progress, and the market backdrop this quarter has been supportive. This positive market trend provides Walvo with plenty of opportunity to re-accelerate growth as investments in sales and service and improved operations are starting to pay off. Isabel, over to you.
Thank you, Enric. Good morning and good afternoon to everyone. Second quarter revenue was 23.9 million euros, outside our guided range, and down 19% sequentially. As Enric explained, the shortfall versus guidance was not the man driving. Order intake was up 11% versus last quarter. with stronger sequential gains in AC Europe and DC Europe and rest of the world. The gap reflects operational constraints during the final stages of our restructuring as final negotiations with vendors limited how much of that order intake we could convert into shipments and invoicing within the quarter, resulting in a backlog of close to 12 million euros. Although we rather convert orders directly into revenue, we are focused on building a backlog as it will allow us to streamline our operations, improve predictability, and unlock cost efficiencies. Gross margin for the second quarter was approximately 38% at the lower end of, but essentially in line with our guided range of 38% to 40%. This tells us the revenue shortfall was a volume story, not a mix or pricing story. In addition, as part of our financial strategy, we are having closer control of margins by shifting our priority to high-gross margin deals. Q2 labor costs and operating expenses total 17.3 million euros, down approximately 29% compared to the same period last year, and approximately flat sequentially, reflecting continued target investment in sales and service capacity, even as we held our broader cost base flat. We remain focused on cost control, but additional efficiencies will result from the implementation of better processes and systems. This is high priority as we work across the organization to identify opportunities to streamline processes, enhance flexibility and reduce fixed costs. Consolidated adjusted EBITDA loss for the quarter was €7.8 million versus our guided range of €5 million to €3 million and versus €6 million loss last quarter. To be clear on the drivers, this was a function of lower operating leverage on the softer top line, not a deterioration in gross margin or in our underlying cost discipline. As our backlog converts into revenue and we can accelerate sales momentum in the coming quarters, we expect the same cost base to support a meaningfully better adjusted Vita outcome. Now, moving to key financial items, we continue to progress on key milestones that materially strengthen our financial position. In May, the Commercial Court of Barcelona approved our Comprehensive Financial Restructuring Plan and following the expiration of the applicable objection and appeal periods without any challenges being filed. That court approval is now final and non-appealable. Following the effectiveness of the renewed capital structure, total loans and borrowings landed at 191.3 million euro, up from 168.2 million euro last quarter. The increase is related to the reclassification of trade payables to long-term debt. Approximately 13 million euro worth of payables was included in the restructuring. Additional working capital facility provided by our banking partners and several other items related to the refinancing. In addition, the majority of our debt has now been reclassified as long-term, with long-term debt increasing to 140.1 million euros from 44 million euros, and short-term debt, representing working capital lines decreased to 51.1 million euro from 124.2 million euro, reflecting maturities that have largely been pushed out toward 2030. Subsequent to quarter N, we completed the approximately 11.8 million euro equity rise contemplated under the plan, which include the previously announced 5 million investment from the Generalitat de Catalunya through IFEM together with the capitalization of accrued interest on the April Bridge Loan. In addition, separate from the intended fundraising related to the refinancing, we secured a separate 4 million euro investment from Focus on Next Frontier, the investment vehicle of Rafael Ruiz, who joined us as a new shareholder. In addition, we received approximately 10.5 million euros through Canada's Clean Fuel Credit Framework for 2025, generated by eligible EV charging activity across our connected AC charger base in Canada. In line with program requirements, these funds will be reinvested in the region to support and accelerate EV adoption, but they are also a good proof point that our connected install base can create value well beyond the initial hardware sale. Taken together with continued discipline, management of working capital, we believe these items support a strong liquidity position. We end the period with approximately 25.1 million euros in cash, cash equivalents and financial investments, a significant improvement compared to the 7.6 million euros we held at the end of the first quarter. TPEX was minimal again this quarter, essentially 0 versus 0.3 million in the first quarter, consistent with our continued discipline on capital expenditure as we prioritized leveraging our existing asset base. Inventory landed at 38.8 million euros, a reduction of 4% to last quarter and down 32% compared to the same period last year. As discussed, we are building a backlog this quarter as the priority right now is to establish a more robust, predictable operating rhythm with our suppliers. This includes better terms, more stable shipping schedules and more resilient supply chain overall. We view this as the necessary middle step between the cost discipline of the past several quarters and the re-acceleration of profitable growth. Separately, in early July, we received confirmation that the New York Stock Exchange has accepted our plan to regain compliance with its continued listed standards, following the notice we received in February regarding average global market capitalization and total stockholders' equity. This gives us an 18-month cure period with semi-annual reviews from the New York Stock Exchange to restore stockholders' equity or average market capitalization to at least $50 million over a consecutive 30-trading-day period. Importantly, this does not affect our normal course of business and our Class A shares have continued to be listed and traded on the New York Stock Exchange throughout. Overall, between the finalization of the restructuring, the new capital from Focus and IFM, the carbon credit proceeds and the New York Stock Exchange acceptance of our compliance plan, Wobox's financial position and long-term stability have improved significantly since our last earning call, even before accounting for the commercial momentum we are seeing in the business. Enric, I'll turn it back to you to provide some closing commentary.
Thank you, Isabel. Our second quarter results do not fully reflect the positive underlying momentum we are seeing. Although revenue was lower, order intake grew 11% sequentially, outpacing our ability to supply due to final vendor negotiations related to our refinancing plan. Demand for our products remains healthy, and we continue to build our backlog. This is the initial proof point that our renewed customer focus, supported by investments in our sales and service organization, is starting to pay off. In addition, we are focused on utilizing the opportunity of the backlog buildup to streamline the supply chain and improve the efficiency of our operations. We can improve our profitability by converting our growing backlog into more robust, predictable operations, better terms with our suppliers, steadier shipping, and a supply chain that is in line with the demand we are generating. As we enter the second half of 2026, we are operating from a position of renewed strength, with the financial restructuring finalized, our balance sheet strengthened, and our listing compliance plan accepted by the NICE. We have effectively removed the overhangs that define our first half. Our priority for the third quarter is clear, execution. We are now pivoting from rebuilding our foundation to converting our healthy order backlog into We have already addressed the operational bottlenecks caused by vendor negotiations, and with the new capital providing us with the necessary runway, our focus is on improving our throughput and delivering on the demand we are generating. While it will take time for this full operational efficiency to be reflected in our margins and adjusted EBITDA, the building blocks for a return to growth are now in place. With that momentum behind us, I would like to turn to our expectations for the third quarter. Revenue in the €29 million to €31 million range. Gross margin between 38% and 40%. A negative adjusted EBITDA between €6.5 million and €4.5 million. Thank you for your time.
Operator
This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
