Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Energy Vault Holdings Inc (NRGV, Financial) announced newly booked deals in Australia, indicating growth in key regions.
- The company is focusing on more predictable and recurring revenue streams, which is expected to smooth top-line volatility.
- Energy Vault Holdings Inc (NRGV) reported strong unit economics with a 27.8% gross margin, showing improved profitability.
- The company has a developed pipeline of $2.8 billion, with over half associated with existing customers or strategic partners.
- Energy Vault Holdings Inc (NRGV) maintains a strong balance sheet with over $110 million in cash and no debt.
Negative Points
- Revenue for the second quarter was $3.8 million, down from the prior year due to timing of projects and percentage of completion accounting.
- The company reported an adjusted EBITDA of negative $15.8 million, indicating ongoing financial challenges.
- Energy Vault Holdings Inc (NRGV) experienced a restructuring charge of $1.7 million, reflecting ongoing organizational adjustments.
- The company faces potential revenue recognition delays due to the timing of new project starts and large concurrent deployments.
- Energy Vault Holdings Inc (NRGV) is exposed to lumpy quarters due to EPC build schedules and external factors affecting project timelines.
Q & A Highlights
Q: Given the focus on owning and operating specific projects, are there specific applications of your technology where you're more likely to own and operate?
A: Robert Piconi, CEO: There is no specific technology focus for owning and operating. We evaluate projects based on economics and fit, not technology. For example, our Calistoga project combines green hydrogen with lithium-ion, while our Texas project is purely battery-based. We aim to optimize cash returns and profitability across our portfolio.
Q: Can you provide a performance update for the Rudong EVx system?
A: Robert Piconi, CEO: We are awaiting final approval for full grid operation. We are already charging and discharging to the grid, and our partner hosted a media day in June. Our team is on-site to take initial performance measurements, and we expect to announce metrics shortly.
Q: Regarding your two-year revenue guidance, what should we look for to increase confidence in meeting these targets?
A: Robert Piconi, CEO: Look for conversions of projects from our developed pipeline into bookings. Many deals are with strategic partners or existing customers, which gives us confidence. Expect announcements of larger projects, especially in regions like Australia, where we have strategic investors.
Q: How do you balance between build and transfer versus own and operate models?
A: Robert Piconi, CEO: It's more about portfolio optimization than customer-driven decisions. We analyze profit pools across the energy storage ecosystem and aim for a diversified portfolio. Owning and operating projects offers long-term EBITDA streams and reduces quarterly revenue lumpiness.
Q: With the new project in Italy, how does the implementation timeframe compare to previous projects?
A: Robert Piconi, CEO: The new modular pumped hydro system in Sardinia will move quickly due to its use of existing infrastructure. We've been testing this solution for 18 months, and it leverages proven components from pumped hydroelectric systems, allowing for faster deployment compared to previous projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
