Expion360 Inc. Q4 FY2024 earnings call

• Expion360 focuses on energy storage solutions with safety, quality, and 12-year warranty.
• Product lines include e360, Edge battery with VHC heating, SmartTalk Bluetooth, and CAN bus communication.
• Progress in Home Energy Storage Solutions (HESS) with shipments starting in January 2025, benefiting from market growth and incentives.
• Exploration of partnership with NeoVolta to engineer a US-based battery manufacturing facility.
• Partnership with Scout Campers to equip campers with advanced lithium-ion batteries.
• Closed a $2.6 million registered direct offering and private placement in January 2025 for working capital and growth initiatives.

For the fourth quarter of 2024, revenue totaled $2 million, a 131% increase from the prior year period of $0.9 million. Gross profit was $438,552, which was 22.1% of revenue. For the full year 2024, revenue was $5.6 million, a 6% decrease from the prior year's $6 million. Gross profit for the full year was $1.2 million, or 20.5% of revenue. The product segments include RV, marine, LEV, home energy storage, and industrial applications. The RV market is recovering, marine uses support trolling motors and cabin electronics, LEV is transitioning to lithium, home energy storage is a growing market, and industrial applications are a future growth vertical.

• Anticipate incremental revenue of approximately $5 million for fiscal year 2025 from new OEM partnerships and distributors.
• Expected to increase profits by an estimated $1.4 million for fiscal year 2025 from these partnerships.
• Work towards additional OEM market penetration by adding features and improving energy density.

• Forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially.
• Tariffs pose a risk, and the company has taken steps like increased inventory and working with suppliers to address this.

Q: Congrats on solid revenue growth in Q4. Can you talk about what products and customers drove the performance?

A: Revenue growth was driven by expanding and new OEM relationships, with products like the Edge and new features like vertical heat conduction and Bluetooth leading the way.

Q: Gross margins took a dip in Q4 but I am assuming this is a good thing because of higher volumes. Can you talk about the gross margin profile in fiscal year 2025? Does this normalize in the low 20% range or do you see higher GMs with the rollout of your HESS product?

A: Historically operated just upwards of 20% gross margins. Q4 was in line with that, and management believes home energy storage market sales will help increase margins from 2024 levels.

Q: Tariffs are a big topic for those manufacturing outside the United States. Can you speak to what you have done recently to hedge your risk?

A: Brought in more inventory at the end of 2024 and early 2025 in anticipation of tariffs, worked with suppliers to share tariff burden, and passed some costs on to customers.

Q: Any update on new OEM partners and customers? Are the new products driving new relationships, especially with the slim form factor in RVs?

A: Doing well with new OEMs brought on board at the end of 2024, seeing growth with established OEMs, and expect to expand to other OEM brands due to expanded product line and features, with momentum carrying forward in 2025.