Microvast Holdings, Inc. Q3 FY2024 earnings call

Key Messages

• Microvast achieved profitability in Q3 2024 with a net profit of $13.2 million and adjusted EBITDA of $29 million.
• Focused on improving efficiency and profitability, with strategic cost cutting in the U.S. while solidifying business in EMEA and APAC.
• Commercial vehicle reach expanded in EMEA, with successful unveiling of silicon-based cell technology at a Germany exhibition. New business developments include partnerships with Propel, XCMG, and LGMG.
• Financials showed revenue growth, improved gross margin, reduced operating expenses by 38% from Q3 2023, and positive adjusted EBITDA.

In Q3 2024, Microvast achieved record revenue of $101.4 million, up 27% from $80.1 million in Q3 2023. The EMEA business grew by 212% year-over-year and accounted for 59% of the quarterly revenue. Gross margin improved to 33.2%, up from 22.3% in Q3 2023. Adjusted EBITDA was $29 million and net profit was $13.2 million, marking a historical milestone of profitability.

Forward-Looking Statements

• Fourth quarter revenue expected to be in the range of $90 million to $95 million, putting full year anticipated revenue growth in the range of 15% to 18%.
• Target gross margin of at least 25%.
• APAC business to focus on production capacity improvements at Huzhou facility.
• EMEA business aims for an 80% year-over-year revenue increase.
• U.S. segment to focus on expanding commercial vehicle footprint and exploring full financing solutions for Clarksville facility.

Risks

• The call mentioned that actual results may differ materially from expectations due to a variety of risks and uncertainties, including global policy shifts, market uncertainties, and challenges in the lithium battery manufacturing industry with a long-term investment horizon.