NeoVolta Inc. (NEOV) Earnings

Management highlights

### Leadership Transition - Jean Neelis appointed new Chief Financial Officer, effective May 18, 2026, bringing over 20 years of financial leadership experience in energy transition, technology, and manufacturing, most recently as CFO of SES AI Corporation. - Outgoing CFO and co-founder Steve Bond moves to the new role of Executive Vice President and President of Neovolta Power LLC, where he will lead the ramp-up of the Georgia manufacturing facility to commercial mass production, a mission-critical priority for the company. ### Georgia Manufacturing Facility Progress - Manufacturing equipment has begun arriving on site, with installation targeted for June 2026, and initial production ramping expected to begin in Q3 calendar 2026. The project remains on schedule, reaching this stage less than six months after the joint venture was formed in January 2026. - Neovolta Power is structured to be fully FEOC (Foreign Entity of Concern) compliant, making Neovolta one of the few U.S. suppliers able to offer domestically assembled systems that qualify for the IRS Section 45X advanced manufacturing production credits and Section 48E investment tax credits, creating a durable competitive advantage as demand for compliant products grows. - Neovolta increased its ownership stake in Neovolta Power from 60% to 80% during the quarter at no additional cash cost, retaining full board and operational control, and expanded its commercial agreement with partner POTUS Edge to support pre-production business development. ### Commercial Milestones - Secured the first CNI segment purchase order from leading U.S. developer Luminia LLC, the first step in an expected multi-year relationship with significant potential future revenue. - Continued residential network expansion; the company views the post-tax credit demand slowdown as temporary, as core drivers of residential storage adoption (resiliency, energy independence, cost savings) remain intact. - Preparing for commercial launch of the new NVWave modular residential platform, which is expected to improve per-system economics and installer throughput. The company is also developing a third-party ownership (TPO) financing model with Luminia that will allow homeowners to install systems with little to no upfront cost, lowering adoption barriers and generating recurring long-term revenue. - Received external industry recognition: named 2026 Energy Storage Company of the Year by Cleantech Breakthrough, selected from thousands of global nominations. ### Financial Update - Q3 gross profit was $0.9 million, with a 46% gross margin (36% excluding a prior-period inventory cost correction), up from 26% gross margin in Q3 FY2025, driven by improved product mix. - Total Q3 operating expenses were $3.6 million, up from $1.9 million year-over-year, reflecting deliberate investments in commercial/operational infrastructure, NVWave R&D, and pre-production manufacturing joint venture costs. - Net loss for Q3 was $3 million ($0.08 per share), up from $1.4 million ($0.04 per share) year-over-year, consistent with increased growth investment. - As of March 31, 2026, the company held $11.5 million in cash and $19.5 million in net working capital, a major improvement from the end of December 2025, driven by recent equity financing. A $3 million revolving credit facility was also established in April to add near-term liquidity.

Guidance

Management did not issue formal numeric revenue or earnings guidance for the full fiscal year, but provided the following forward-looking milestones and expectations: - Georgia manufacturing installation will be completed in June 2026, with initial production ramping starting in Q3 calendar 2026, and the facility remains on track to meet this timeline. - Commercial launch of the NVWave residential platform is expected by the end of Q4 FY2026 (the current quarter). - The residential storage demand slowdown caused by the expiration of the individual investment tax credit is expected to be temporary, with underlying demand drivers remaining intact. - Management expects to secure the required funding for the $8 million phase two capital contribution for Neovolta Power, due May 31, 2026, in the near term. - The company targets securing utility scale reference projects by the end of 2026, with long-term utility scale supply agreements expected to be finalized entering 2027, and has an internal target to utilize the facility's planned 2 gigawatt-hour annual production capacity.

Segment performance

Neovolta reports total Q3 FY2026 revenue of $2 million, flat year-over-year. The 9-month total revenue is $13.3 million, up 262% year-over-year from $3.7 million. No explicit revenue contribution percentages are provided for individual segments, but performance details are as follows: - **Residential Segment**: This is Neovolta's historical foundation. Q3 revenue was impacted by a market-wide near-term headwind from the expiration of the federal solar investment tax credit for individuals at the end of December 2025, which drove the flat overall quarterly revenue. The company continues expanding its national installer and distributor network across new markets including Texas and Puerto Rico, and is preparing for the commercial launch of the new NVWave modular platform. - **CNI (Commercial & Industrial) Segment**: The segment achieved a key milestone in Q3 with its first purchase order from Luminia LLC, valued at approximately $1.9 million for 40 commercial industrial battery storage systems. This is the first transaction under a broader collaboration framework that could generate up to $39 million in potential future equipment revenue. - **Utility Scale Segment**: The segment is still in the pre-revenue pipeline development stage, with active customer discussions and strong early engagement from prospective partners. - **Neovolta Power (Manufacturing Joint Venture)**: This segment had no production revenue in the quarter, but its operating expenses contributed to the overall increase in consolidated operating expenses, as this is the first quarter of full consolidated reporting for the joint venture.

Risks & headwinds

- The company requires additional external capital to fund phase two and phase three manufacturing development for Neovolta Power, and while multiple financing options are under evaluation, there is no guarantee that capital will be secured on acceptable terms. - Near-term residential storage demand remains depressed following the expiration of the federal tax credit for individual homeowners, and the timing of a market recovery is uncertain. - Utility scale projects require extensive pre-qualification including bankability validation, QAQC inspections, and engineering sign-offs, and there is risk that first commercial orders could be delayed beyond current expectations. - The company is dependent on third-party cell suppliers to meet FEOC and domestic content requirements for IRA tax credits, and supply chain alignment with new compliance rules could create unforeseen challenges.

Analyst Q&A

• Q: The $8 million phase two capital contribution for Neovolta Power is targeted for May 31, pushed from April. What funding challenges exist, and can the company still hit upcoming manufacturing milestones? /

  A: The date shift was an agreed adjustment with the joint venture partner to accommodate document closing and a blackout period, not a sign of inability to raise funds. Management says it is evaluating multiple funding options (equity, debt, project financing) and is confident it will secure the required capital in the coming days to meet the milestone and keep the manufacturing project on schedule. (192 characters)

• Q: Given the temporary residential market slowdown, how is management controlling costs ahead of manufacturing ramp and NVWave launch? /

  A: Management is prioritizing cost efficiency across all areas, including NVWave product development and raw material spending. The company aims to launch NVWave by the end of the current quarter, and is coordinating product rollout timing with the third-party ownership program development with Luminia to align shipping schedules with actual customer demand. (240 characters)

• Q: How does Neovolta plan to overcome the current tepid residential market for the new NVWave product launch? /

  A: The new third-party ownership (TPO) financing model is expected to help Neovolta outperform the general market slowdown. The market has already shifted toward TPO structures after the end of the individual ITC, and installer and customer feedback is very positive for the combined product and financing offering, with potential for accelerated deployment. (228 characters)

• Q: What steps does Neovolta still need to complete to secure its first utility scale order? /

  A: UL certification is already complete with no major product design changes planned, so the product is qualified. Management is currently working with large multi-gigawatt offtake developers on reference projects, completing required QAQC inspections and engineering validations, and expects to lock in long-term supply agreements by early 2027, on schedule. (214 characters)

• Q: What is Neovolta's plan for cell supply to meet FEOC compliance requirements next year? /

  A: Neovolta is pursuing a mixed supply strategy, including non-Chinese cells from Southeast Asia that meet FEOC rules, and is in active discussions with U.S.-based suppliers, including facilities converting EV cell capacity to stationary storage. The company is aligning its supply mix to meet the latest IRS requirements for FEOC and domestic content tax credits. (197 characters)