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Energy Vault(NRGV) - 2025 Q1 - Earnings Call Transcript
NRGVEnergy Vault(NRGV)2025-05-12 21:30
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Financial Data and Key Metrics Changes - The company reported a revenue increase of 10% year over year, reaching 8.5million,drivenbyprojectsinAustraliaandanewlicensingagreementinIndia[26][9]−Grossmarginimprovedsignificantlyto57.18.5 million, driven by projects in Australia and a new licensing agreement in India [26][9] - Gross margin improved significantly to 57.1%, up from 26.7% a year ago, attributed to a favorable revenue mix from the India license agreement [26][9] - Adjusted EBITDA loss narrowed to 11.3 million from 14.5millionyearoveryear,reflectingimprovedgrossmarginsandreducedoperatingcosts[27][13]BusinessLineDataandKeyMetricsChanges−Thebacklogincreasedby4914.5 million year over year, reflecting improved gross margins and reduced operating costs [27][13] Business Line Data and Key Metrics Changes - The backlog increased by 49% year to date, totaling 648 million, with significant contributions from projects in the US and Australia [23][24] - The company has 2.6 gigawatt hours of projects in Australia either contracted or under agreement, with additional projects under construction [23][29] - The energy asset management business is progressing with seven projects, expected to deliver approximately 30millioninannualrecurringprojectEBITDAovertheirlifespan[29][15]MarketDataandKeyMetricsChanges−ThecompanyislargelyshieldedfromUStariffrisksduetoastrongpresenceinAustraliaandlicensingagreements,with9030 million in annual recurring project EBITDA over their lifespan [29][15] Market Data and Key Metrics Changes - The company is largely shielded from US tariff risks due to a strong presence in Australia and licensing agreements, with 90% of the backlog unaffected by tariffs [24][18] - The recent pause in US-China tariffs has reignited discussions for US battery deliveries, potentially leading to increased demand [18][39] Company Strategy and Development Direction - The company is focusing on expanding its build, own, and operate strategy, with a strong pipeline of storage asset ownership projects in the US and Australia [29][21] - The company aims to achieve approximately 100 million in recurring annual EBITDA from its owned and operated projects over the long term [29][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased bookings and project deliveries following the tariff pause, indicating a return to a more normalized contracting environment [18][44] - The company is committed to reducing operating expenses by 15% to 25% while continuing to invest in profitable engagements, particularly in the Australian market [27][14] Other Important Information - Cash increased by 57% quarter over quarter, reaching 47.2million,withexpectationstofurtherincreaseto47.2 million, with expectations to further increase to 60 million to $75 million by Q3 [10][28] - The company is in the process of project financing and ITC monetization for its Cross Trails project, expecting significant proceeds from these activities [28][10] Q&A Session Summary Question: Impact of tariffs on securing new bookings in the US - Management noted that the tariff situation had caused a "wait and see" approach among developers, but the recent pause in tariffs could lead to renewed contracting opportunities [39][42] Question: Guidance for 2025 and booked revenue - Over 80% of the company's revenue for 2025 is contracted, with expectations for additional bookings to be secured in light of the tariff pause [46][47] Question: Differentiators for India battery technology licensing - The company highlighted growth potential in India, flexibility in its technology, and a strong track record with customers as key differentiators [53][56] Question: Differences in project financing discussions - Management explained that having proven technology and long-term off-take agreements significantly de-risks project financing, making discussions with lenders more favorable [62][63]