374Water, Inc. Q1 FY2025 earnings call

• 374Water is an industrial technology and services company focused on waste management, with the AirSCWO system offering a solution for waste destruction.
• In Q1, the AS system was ruggedized and optimized, with test results showing over 99.99% PFAS elimination in waste streams. Secured a contract with the University of North Carolina at Chapel Hill Collaboratory and advanced partner negotiations with RCRA Part B TSDF operators.
• In Q2, signed a term sheet with Crystal Clean, shifted focus to a biosolids destruction campaign in Orlando, and will deploy an AS6 unit to Detroit for a DoD demonstration.
• Strengthened leadership team and Board of Directors, with Raj Melkote as CTO and Steve Jones joining the Board.
• Product roadmap includes different AirSCWO models, and current/near-term operational footprint includes facilities in Florida and North Carolina with plans to deploy systems to multiple locations.

For the three months ended March 31, 2025, the company generated revenue of $543,000 compared to $315,000 in the prior year quarter. Revenue is primarily attributable to equipment manufacturing services, demonstrations, and from treatability study services. During the first quarter, services revenue increased by $376,000 due to a full-scale demonstration, offset by a decrease in equipment manufacturing revenue of approximately $162,000.

• Looking to the remainder of 2025, the company has line of sight to generate $4 million to $6 million in revenue.
• Based on current trajectory, believes it is on a path to achieving $250 million to $500 million in annual revenue in 5 years.

• Statements made on the call may include forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. Should review most recent Form 10-Q and 10-K for a more complete discussion of risks, particularly under the heading Risk Factors.

Q: You mentioned expecting one more TSDF definitive agreement perhaps in balance of the year. Do you have a forecast for what a typical destruction as a service deal would generate in revenue?

A: The revenue potential depends on the type of material and size of the AirSCWO unit. Initially starting with AirSCWO 6, and for AirSCWO 30, project annual revenue potential between $12 million and $20 million depending on material and utilization.

Q: When do you think the Department of Defense demo was expected to wrap up?

A: It's a several month process, will start mobilizing in June, be on-site in July, and have several months to complete demonstrations.

Q: When would the aqueous film destruction for North Carolina be expected to start and finish?

A: Actually in the process of arranging to pick up the initial 1,000 gallons and will start within the next month or so on that work.