Pioneer Power Solutions, Inc. Q4 FY2024 earnings call

• Sold Pioneer Custom Electrical Products unit (PSEP) for $50 million in cash and equity, with $48 million cash and a 6% stake in Mill Point's Volterra's energy transition platform. - Declared a one-time special cash dividend of $1.50 per share. - e-Boost grew to a multimillion dollar business with various products launched, including e-Boost Mini, Mobile, GOAT, POD. - Critical Power segment had a backlog of $19.8 million at end of 2024. - Announced refinement of HOMe-Boost residential solution to serve high-end residential and light commercial segments, with launch expected later in 2025.

The Critical Power segment (anchored by e-Boost) had significant growth in 2024. Full year 2024 revenue was $22.9 million, up 106% from $11.1 million in 2023. Fourth quarter 2024 revenue was $9.8 million, a 265% increase from $2.7 million in Q4 2023. Full year gross profit was $5.5 million (24% margin), while Q4 gross profit was $2.8 million (29% margin). The Critical Power segment had a backlog of $19.8 million at the end of 2024, a 19% increase from the end of 2023.

• Reaffirmed 2025 revenue guidance of $27 million to $29 million. - Expect quarter-by-quarter cadence of $6 million to $8 million per quarter in 2025. - Revenue guidance for 2025 does not include HOMe-Boost revenue.

• Macro economic events could impact outlook. - Changes in administration and potential slowdown in economy could affect business.

Q: On the strong backlog and growth in e-Boost or outlook, what's sort of the driving that? Where are the customer segments you're seeing the activity? And how is the visibility look at this point in the year in terms of new demand coming in?

A: New demand is from government, quasi-government groups like transit, school buses, ports, transit authorities. New demand is always coming in.

Q: On the gross margin front, I think your fourth quarter gross margins were around 29% on nice revenues. Should we expect these levels going forward or was there something onetime in this fourth quarter that resulted in these gross margins?

A: Product sales growth and leasing growth will affect gross margins; the mix of product and service in Q4 was favorable but full gross margin picture should be similar or better going forward Q: Juxtaposing your fourth quarter revenues with your 2025 guidance, it seems like a run rate of $6 million to $8 million versus $10 million, which you realized in the fourth quarter. Is there a reason for this?

A: There was a large project with the Los Angeles Department of Transportation in Q4 that boosted revenue; 2025 guidance is $6M-$8M per quarter with 80% baked in already and pipeline supporting the year Q: Would you be looking for some strategic opportunities or would you rather do some organic in-house product mix?

A: Open to all opportunities, including strategic acquisitions, but will not take on bleeders; looking for ancillary power solutions in mobile or permanent distributed generation Q: Do you think any macro economical events or tariffs or any other uncertainties could have an impact on your outlook for 2025?

A: Macro events are baked into outlook; quasi-governmental agencies are already moving to electric, and tariffs/chaos would have general impact but nothing specific to severely affect