Electrovaya Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Eric Stine - Craig-Hallum Capital Group LLC - Analyst : Hi, Raj. Hi, John. So maybe just starting with the on the guidance. I'm just curious, is this -- I know you alluded to this early in the year, so not necessarily a surprise, but would you characterize this as multiple customers doing this? Is it concentrated? I guess I'm just trying to get at how we should view that $45 million, is that a number that we view as a baseline or are there still some projects that potentially the timing could move?

Question: Eric Stine - Craig-Hallum Capital Group LLC - Analyst : Got it. Okay. I guess strengthens the view of '25. Okay. That's helpful just to have an idea around that. And then, just on Sumitomo, it sounds like first shipments in early fiscal '25. In the past, you've mentioned discussions with multiple other parties on the construction side and also in some other applications. So just curious if you can update on those. Do you feel like fiscal '25 is the year where we do see expansion to some other customers and applications?

Question: Eric Stine - Craig-Hallum Capital Group LLC - Analyst : Got it. Okay. Maybe last one for me, just on the financing side. I mean do you kind of view -- correct me if I'm wrong, but I think at least my thinking has been that these two financings are kind of tied together that the Jamestown financing is maybe not dependent, but the process would be helped quite a bit if you're able to refinance the current debt. Is that a fair characterization or not?

Question: Craig Irwin - Roth MKM - Analyst : Good evening, and thanks for taking my questions. So, Raj, you mentioned some of the different things you're doing for market development away from materials handling, some of the newer opportunities that you're facing down that you're working on actively. Can you maybe help us sort of rank the different opportunities there from a potential materiality standpoint? If we are looking at things you're possibly doing in Japan with Sumitomo or some of the other mining equipment producers and then some of the other high-voltage products that you're introducing, which one of these do you think could potentially make the largest contribution to revenue in 2025 or fiscal 2025? And are there other market opportunities you would call out as material that we should pay attention to and watch closely?

Question: Craig Irwin - Roth MKM - Analyst : That's very good to hear. Gross margins, you were again very strong, similar to last quarter. There seems to be continuous improvement in the character of the customers you're serving, the way you're pricing things into the market, and obviously, execution in Mississauga. Can you maybe talk to us a little bit about what's going right on the gross margin side? Is there any potential volatility that you're seeing right now that could impact margins sequentially in the fourth quarter? How should we think about potential margin development over the course of '25? Should we expect margin expansion from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2024 / 9:00PM, ELVA.TO - Q3 2024 Electrovaya Inc Earnings Call

Question: Craig Irwin - Roth MKM - Analyst : Excellent. Then, last question for me, I guess, is around the EBITDA. So this is your sixth sequential quarter where you've been solidly EBITDA positive. Obviously, if you're going to go out there for loans from a lending institution, be it a bank or some government agency, it's a nice thing to have, right? They're going to want to see profitability. But customers, very often, people forget, that they like to also see companies make a little bit of money and still feel comfortable that there's clear pricing and sustainability in the business. Can you maybe unpack for us what this profitability means for you as far as your customer relationships? You're picking up a number of Tier 1s, high-profile customers that I would think would be sensitivity to long-term staying power. And I was hoping you might be able to explain a little bit about how they're happy or how they might perceive the profitability of Electrovaya and your growth profile.

Question: Craig Irwin - Roth MKM - Analyst : Great. Well, congratulations on the commercial progress.

Question: Amit Dayal - H.C. Wainwright & Co., LLC - Analyst : Thank you. Good afternoon, everyone. So, Raj, with respect to sort of the non-material-handling side of the business going into fiscal 2025, are these orders still pilot level orders? If you could give us a sense of what your expectations are for the revenue mix in fiscal '25? We are at around $45 million in revenues for fiscal '24. Should we expect growth on that $45 million plus non-material handling to drive revenues for fiscal '25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2024 / 9:00PM, ELVA.TO - Q3 2024 Electrovaya Inc Earnings Call

Question: Amit Dayal - H.C. Wainwright & Co., LLC - Analyst : Understood. I mean the brand picture for you looks pretty strong. Industry trends are very favorable. Regulatory trends are very favorable. Is it maybe the financing aspect that is holding you back a little bit from really capturing the growth you could potentially have? And in that context, is there some sort of timeframe within which, let's say, by the end of calendar 2024, you could have the financing aspects lined up that could position you for the next 18, 24 months in a much solid position?

Question: Amit Dayal - H.C. Wainwright & Co., LLC - Analyst : Understood. That makes sense. In the press release, you have -- you're indicating some co-investment for a new product development. I'm not completely sure what this is about, but if you could provide some clarity, I would appreciate it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 13, 2024 / 9:00PM, ELVA.TO - Q3 2024 Electrovaya Inc Earnings Call

Question: Amit Dayal - H.C. Wainwright & Co., LLC - Analyst : Is this for sort of the construction end market or storage or something else?