Emeren Group Ltd Q4 2024 Earnings Call Transcript

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

Question: Philip Shen - Roth Capital Partners - Analyst : Hey everyone, thanks for taking my questions. I wanted to talk about the '25 guide. Specifically, can you share what the mix is between DSA revenue and IPP revenue, and if there's any other revenue in the third bucket? Thanks.

Question: Philip Shen - Roth Capital Partners - Analyst : Great. Sorry, I missed that. And you talked about how there's another incremental $100 million of DSA revenue that you're negotiating now. Do you have a sense for what the geographic mix of that DSA revenue is? Is it also European-concentrated? And then does it have similar -- do you expect high margins for that incremental $100 million? And then when do you think you could start to close the bulk or majority of that $100 million? Is that in the coming months, or do you think it might take most of '25 to secure the $100 million? Thanks.

Question: Philip Shen - Roth Capital Partners - Analyst : Great. Okay. And then can you talk about the types of counterparties for the $100 million that you're negotiating? Are there any repeat customers or partners, or are they mostly new customers and counterparties? Thank you.

Question: Philip Shen - Roth Capital Partners - Analyst : Okay. That's good. And then for 2025, sorry if I missed this, but did you guys share what your cash generation or free cash flow outlook might be? If you haven't, perhaps you can give us some color.

Question: Philip Shen - Roth Capital Partners - Analyst : Okay, great. Thanks for taking all my questions. I'll pass it on.

Question: Philip Shen - Roth Capital Partners - Analyst : Yes. Can you guys hear me?

Question: Philip Shen - Roth Capital Partners - Analyst : Great. Okay. So let's talk about the delays. You've consistently had pretty -- a number of delays that unfortunately result in expectations or results that are weaker than expectations. So do you think -- the delays in Europe and the US for government approvals and so forth, do you think we've seen the worst of it? Or do you think it could get worse from here? And if it's -- if we've seen the worst of it, how much could it improve? Do you expect to see improvements in '25? Or do we have to wait for '26? Thanks.

Question: Philip Shen - Roth Capital Partners - Analyst : Okay, thanks.

Question: Philip Shen - Roth Capital Partners - Analyst : Okay. So remind us for your US projects, what percentage is community solar and then what percentage might be larger scale in the 100 to 200-plus megawatt level?

Question: Philip Shen - Roth Capital Partners - Analyst : So 80% community solar --

Question: Philip Shen - Roth Capital Partners - Analyst : Sorry. Okay. Got it, so the inverse, 20% community solar. So what about for the utility-scale solar that's not community solar, do you have any AI or data center-type customers, hyperscaler-type customers that you are currently working with or that you plan to work with in the -- in future DSAs, for example?

Question: Philip Shen - Roth Capital Partners - Analyst : What percentage of the US market is working with DSA frameworks? Do you think it's still very small?

Question: Philip Shen - Roth Capital Partners - Analyst : I mean, it's big for you, but I mean for the overall market, is it becoming more common for the rest of the market, or is it more -- yes, go ahead.

Question: Philip Shen - Roth Capital Partners - Analyst : Okay.

Question: Philip Shen - Roth Capital Partners - Analyst : Interesting. Maybe one more, and then I'll pass it on. As it relates to power prices, what is the base case? Maybe talk about the top three countries in Europe. What's the base case you have for those end markets? We hosted a webinar with WoodMac recently and the outlook for retail power prices in Europe in general was maybe a little bit of an increase in '25, but then maybe it's flat or down even for '26 and '27. And so do you expect power prices to remain kind of at current levels? Or do you see upside, or what's your base case as you develop these projects and sell against them?

Question: Philip Shen - Roth Capital Partners - Analyst : Okay, thank you for taking all my questions.

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Great, thanks. Hey, Yumin, thanks for taking my questions. So the range for -- range of top-line expectation for this year, the DSA seems to be like a wide range of $10 million from $35 million to $45 million. What are the -- like what will it make -- how will it be at the lower end versus the higher end? Are there projects -- big projects that you expect to materialize, and timing is an issue, or are there some other things at play?

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Okay, understood. And then the pushout of the projects from this year into -- fourth quarter into next year -- or rather fourth quarter into the first half, do we know what the size of those projects was? Like if those had materialized, what would the revenue have been for the fourth quarter?

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Okay. Pretty big chunk. Okay. And then also like the outlook for gross margins. I think you mentioned the gross -- overall gross margins, the IPP gross margins, but I don't think guidance for DSA gross margins was provided. Is there a reason for that and does it depend on project to project? Or how should we look at that DSA segment gross margin?

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Got it. Yeah, I understand.

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Yeah. No, that was a good explanation. Thank you. And one last one. I know Phil also asked about this, the $100 million that you are additionally negotiating, is there possibility of upside from those projects? Like if you sign those in the next few months, is there any possibility that your revenues for 2025 will be able to recognize some of those revenues?

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Got it, understood. And then just -- actually, this probably will be the last one. Is there a mix of BESS versus only PV that is -- that you're looking at maybe different -- in different geographies, or how do you see the project mix in your pipeline?

Question: Sameer Joshi - H.C. Wainwright & Co., LLC - Analyst : Got it. Thanks a lot for taking my questions.