- Record company Q3 revenue, increased 26.6% year over year to
$101.4 million
- Gross margin increased from 22.3% to 33.2%, a 10.9 percentage
point improvement year over year
Microvast Holdings, Inc. (NASDAQ: MVST) (“Microvast” or the
“Company”), a technology innovator that designs, develops and
manufactures lithium-ion battery solutions, today announced
unaudited condensed consolidated financial results for the third
quarter ended September 30, 2024 (“Q3 2024”).
Results for Q3 2024
- Revenue of $101.4 million, compared to $80.1 million in Q3
2023, an increase of 26.6%
- Gross margin increased to 33.2% from gross margin of 22.3% in
Q3 2023; Non-GAAP adjusted gross margin increased to 33.9%, up from
24.2% in Q3 2023
- Operating expenses of $27.5 million, compared to $44.7 million
in Q3 2023; Adjusted operating expenses of $22.0 million, compared
to $30.3 million in Q3 2023
- Net profit of $13.2 million, compared to net loss of $26.2
million in Q3 2023; Non-GAAP adjusted net profit of $16.8 million,
compared to non-GAAP adjusted net loss of $10.3 million in Q3
2023
- Net profit per share of $0.04 compared to net loss per share of
$0.08 in Q3 2023; Non-GAAP adjusted net profit per share of $0.05,
compared to non-GAAP adjusted net loss per share of $0.03 in Q3
2023
- Adjusted EBITDA of positive $28.6 million in Q3 2024, compared
to Adjusted EBITDA of negative $5.3 million in Q3 2023
- Capital expenditures of $30.6 million, compared to $59.9
million in Q3 2023
- Cash, cash equivalents, restricted cash and short-term
investments of $115.0 million as of September 30, 2024, compared to
$93.8 million as of December 31, 2023, and $114.7 million as of
September 30, 2023
Results for Nine Months Ended September 30, 2024 (“YTD
2024”)
- Revenue of $266.4 million, compared to $202.0 million in the
nine months ended September 30, 2023 (“YTD 2023”), an increase of
31.9%
- Gross margin increased to 29.3% from gross margin of 16.9% in
YTD 2023; Non-GAAP adjusted gross margin increased to 30.6%, up
from 19.2% in YTD 2023
- Operating expenses of $171.9 million, compared to $119.9
million in YTD 2023; Adjusted operating expenses of $145.0 million,
compared to $72.8 million in YTD 2023
- Net loss of $90.0 million, compared to net loss of $81.8
million in YTD 2023; Non-GAAP adjusted net loss of $61.0 million,
compared to non-GAAP adjusted net loss of $30.2 million in YTD
2023
- Net loss per share of $0.28 compared to net loss per share of
$0.26 in YTD 2023; Non-GAAP adjusted net loss per share of $0.19,
compared to non-GAAP adjusted net loss per share of $0.09 in YTD
2023
- Adjusted EBITDA of negative $30.4 million in YTD 2024, compared
to Adjusted EBITDA of negative $17.0 million in YTD 2023
- Capital expenditures of $43.8 million, compared to $153.6
million in YTD 2023
Please refer to the tables at the end of this press release for
reconciliations of gross profit to non-GAAP adjusted gross profit,
and net loss to non-GAAP adjusted net loss and non-GAAP adjusted
EBITDA.
2024 Outlook
- For full year 2024, the Company is targeting a revenue growth
of 15% to 18% year over year and Q4 revenue guidance of $90 million
to $95 million
- Continue to maintain gross margin profile with a target range
of 25% to 30%
- Ongoing R&D progress towards new product development,
including our ME6 ESS container solution, enhanced silicon-based
cells, and solid state batteries
- Bolstering our revenue streams through continued strategic
partner expansions, and innovating products and services that
support the global energy transformation
- Focus on sustained profitability through our regional
efficiency improvements and leveraging our established business
segments to improve liquidity and financial strength
Webcast Information
Company management will host a conference call and webcast on
November 12, 2024, at 4:00 p.m. Central Time, to discuss the
Company's financial results. The live webcast and accompanying
slide presentation will be accessible from the Events &
Presentations section of Microvast’s investor relations website
(https://ir.microvast.com/events-presentations/events). A replay
will be available following the conclusion of the event.
About Microvast
Microvast is a global leader in providing battery technologies
for electric vehicles and energy storage solutions. With a legacy
of over 17 years, Microvast has consistently delivered cutting-edge
battery systems that empower a cleaner and more sustainable future.
The company's innovative approach and dedication to excellence have
positioned it as a trusted partner for customers around the world.
Microvast was founded in 2006 and is headquartered in Stafford,
Texas.
For more information, please visit www.microvast.com.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements include, but are not limited to, statements
about future financial and operating results, our objectives,
expectations and intentions with respect to future operations,
products and services; and other statements identified by words
such as “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “objective,” “plan,” “project,”
“predict,” “outlook” “should,” “will,” “would,” or the negative of
these terms, or other comparable terminology intended to identify
statements about the future. These forward-looking statements
include, but are not limited to, statements regarding our industry
and market sizes, and future opportunities for us. Such
forward-looking statements are based upon the current beliefs and
expectations of management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond our control. Actual results and the timing of events may
differ materially from the results anticipated in these
forward-looking statements.
Many factors could cause actual results and the timing of events
to differ materially from the anticipated results or other
expectations expressed in the forward-looking statements,
including, among others: (1) our ability to remain a going concern;
(2) risk that we may not be able to execute our growth strategies
or achieve profitability; (3) risk that we will be unable to raise
additional capital to execute our business plan or pay our debts as
they come due, which may not be available on acceptable terms or at
all; (4) restrictions in our existing and any future credit
facilities; (5) risks of operations in China; (6) the effects of
mechanics liens filed by contractors that we do not have sufficient
funds to pay; (7) the effects of existing and future litigation;
(8) changes in general economic conditions, including increases in
interest rates and associated Federal Reserve policies, a potential
economic recession, and the impact of inflation on our business;
(9) changes in the highly competitive market in which we compete,
including with respect to our competitive landscape, technology
evolution or regulatory changes; (10) changes in availability and
price of raw materials; (11) labor relations, including the ability
to attract, hire and retain key employees and contract personnel;
(12) heightened awareness of environmental issues and concern about
global warming and climate change; (13) risk that we are unable to
secure or protect our intellectual property; (14) risk that our
customers or third-party suppliers are unable to meet their
obligations fully or in a timely manner; (15) risk that our
customers will adjust, cancel or suspend their orders for our
products; (16) risk of product liability or regulatory lawsuits or
proceedings relating to our products or services; (17) the
effectiveness of our information technology and operational
technology systems and practices to detect and defend against
evolving cyberattacks; (18) changing laws regarding cybersecurity
and data privacy, and any cybersecurity threat or event; (19) the
effects and associated cost of compliance with existing and future
laws and governmental regulations, such as the Inflation Reduction
Act; (20) economic, financial and other impacts such as a pandemic,
including global supply chain disruptions; and (21) the impacts of
geopolitical events, including the ongoing conflicts between Russia
and Ukraine and between Israel and Hamas. Microvast’s annual,
quarterly and other filings with the U.S. Securities and Exchange
Commission identify, address and discuss these and other factors in
the sections entitled “Risk Factors.”
Actual results, performance or achievements may differ
materially, and potentially adversely, from any forward-looking
statements and the assumptions on which those forward-looking
statements are based. There can be no assurance that the data
contained herein is reflective of future performance to any degree.
You are cautioned not to place undue reliance on forward-looking
statements as a predictor of future performance as forward-looking
statements are based on estimates and assumptions that are
inherently subject to various significant risks, uncertainties and
other factors, many of which are beyond our control.
All information set forth herein speaks only as of the date
hereof, and we disclaim any intention or obligation to update any
forward-looking statements as a result of developments occurring
after the date hereof except as may be required under applicable
securities laws. Forecasts and estimates regarding our industry and
end markets are based on sources we believe to be reliable,
however, there can be no assurance these forecasts and estimates
will prove accurate in whole or in part.
All references to the “Company,” “we,” “us” or “our” refer to
Microvast Holdings, Inc. and its consolidated subsidiaries other
than certain historical information which refers to the business of
Microvast prior to the consummation of the Business
Combination.
Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, Microvast has disclosed in this earnings release
non-GAAP financial measures, including non-GAAP adjusted gross
profit (loss), non-GAAP adjusted EBITDA and non-GAAP adjusted net
loss, which are non-GAAP financial measures as defined under the
rules of the SEC. These are intended as supplemental measures of
our financial performance that are not required by, or presented in
accordance with U.S. generally accepted accounting principles
(“GAAP”).
Reconciliations to the most comparable GAAP measures, gross
profit and net income (loss), are contained in tabular form in the
unaudited financial statements below. Non-GAAP adjusted gross
profit is GAAP gross profit as adjusted for non-cash stock-based
compensation expense included in cost of revenues. Non-GAAP
adjusted net loss is GAAP net loss as adjusted for non-cash
stock-based compensation expense and change in valuation of warrant
and Convertible loan. Non-GAAP adjusted net loss per common share
is GAAP net loss per common share as adjusted for non-cash
stock-based compensation expense and change in valuation of warrant
and Convertible loan per common share. Non-GAAP adjusted EBITDA is
defined as net loss excluding depreciation and amortization,
non-cash settled share-based compensation expense, interest
expense, interest income, changes in fair value of our warrant and
Convertible loan and income tax expense or benefit.
We use non-GAAP adjusted gross profit, non-GAAP adjusted EBITDA
and non-GAAP adjusted net loss for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. We consider them to be important measures because they
help illustrate underlying trends in our business and our
historical operating performance on a more consistent basis. We
believe that these non-GAAP financial measures, when taken together
with their most directly comparable GAAP measures, gross profit and
net income (loss), provide meaningful supplemental information
regarding our performance by excluding certain items that may not
be indicative of our recurring core business operating results.
We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing our
performance and when planning, forecasting, and analyzing future
periods. These non-GAAP financial measures also facilitate
management’s internal comparisons to our historical performance. We
believe these non-GAAP financial measures are useful to investors
both because (1) they allow for greater transparency with respect
to key metrics used by management in its financial and operational
decision-making and (2) they are used by our institutional
investors and the analyst community to help them analyze the health
of our business. Accordingly, we believe that these non-GAAP
financial measures provide useful information to investors and
others in understanding and evaluating our operating results in the
same manner as our management team and board of directors.
Non-GAAP financial measures have limitations as an analytical
tool, and you should not consider them in isolation, or as a
substitute for, financial information prepared in accordance with
GAAP. For example, our calculation of non-GAAP adjusted EBITDA may
differ from similarly titled non-GAAP measures, if any, reported by
our peer companies, or our peer companies may use other measures to
calculate their financial performance, and therefore our use of
non-GAAP adjusted EBITDA may not be directly comparable to
similarly titled measures of other companies. The principal
limitation of non-GAAP adjusted EBITDA is that it excludes
significant expenses and income that are required by GAAP to be
recorded in our financial statements. In addition, it is subject to
inherent limitations as it reflects the exercise of judgments by
management about which expense and income are excluded or included
in determining this non-GAAP financial measure. In order to
compensate for these limitations, management presents non-GAAP
financial measures in connection with GAAP results. In addition,
such financial information is unaudited and does not conform to SEC
Regulation S-X and as a result, such information may be presented
differently in our future filings with the SEC. For example, with
respect to the warrant liability resulting from the merger, we now
exclude changes in fair value from net loss in our non-GAAP
adjusted EBITDA and non-GAAP adjusted net loss calculation, which
had not been done in prior periods.
MICROVAST HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars,
except share and per share data, or as otherwise noted)
September 30,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
63,585
$
44,541
Restricted cash, current
40,361
37,477
Short-term investments
—
5,634
Accounts receivable (net of allowance for
credit losses of $3,832 and $4,571 as of September 30, 2024 and
December 31, 2023, respectively)
121,539
138,717
Notes receivable
10,937
23,736
Inventories, net
157,769
149,749
Prepaid expenses and other current
assets
23,483
25,752
Held-for-sale assets
19,897
—
Total Current Assets
437,571
425,606
Restricted cash, non-current
11,021
6,171
Property, plant and equipment, net
527,160
620,667
Land use rights, net
11,902
11,984
Acquired intangible assets, net
2,788
3,136
Operating lease right-of-use assets
19,468
19,507
Other non-current assets
11,090
9,661
Total Assets
$
1,021,000
$
1,096,732
Liabilities
Current liabilities:
Accounts payable
$
65,589
$
112,618
Advance from customers
42,950
43,087
Accrued expenses and other current
liabilities
104,202
148,284
Income tax payables
656
655
Short-term bank borrowings
66,177
35,392
Notes payable
56,314
63,374
Total Current Liabilities
335,888
403,410
Long-term bonds payable
43,157
43,157
Long-term bank borrowings
53,397
43,761
Warrant liability
1
67
Share-based compensation liability
119
199
Operating lease liabilities
16,326
17,087
Convertible loan with shareholder measured
at fair value
24,423
—
Other non-current liabilities
38,486
24,861
Total Liabilities
$
511,797
$
532,542
Shareholders’ Equity
Common Stock (par value of US$0.0001 per
share, 750,000,000 and 750,000,000 shares authorized as of
September 30, 2024 and December 31, 2023; 323,815,298 and
316,694,442 shares issued, and 322,127,798 and 315,006,942 shares
outstanding as of September 30, 2024 and December 31, 2023)
$
33
$
32
Additional paid-in capital
1,512,410
1,481,241
Statutory reserves
6,032
6,032
Accumulated deficit
(987,520
)
(897,501
)
Accumulated other comprehensive loss
(21,752
)
(25,614
)
Total Equity
$
509,203
$
564,190
Total Liabilities and Equity
$
1,021,000
$
1,096,732
MICROVAST HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars,
except share and per share data, or as otherwise noted)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
$
101,388
$
80,116
$
266,414
$
202,042
Cost of revenues
(67,776
)
(62,232
)
(188,382
)
(167,839
)
Gross profit
33,612
17,884
78,032
34,203
Operating expenses:
General and administrative expenses
(11,841
)
(24,980
)
(59,146
)
(68,874
)
Research and development expenses
(10,692
)
(13,241
)
(32,291
)
(33,609
)
Selling and marketing expenses
(4,963
)
(6,031
)
(15,580
)
(16,916
)
Impairment loss of long-lived assets
(12
)
(422
)
(64,924
)
(473
)
Total operating expenses
(27,508
)
(44,674
)
(171,941
)
(119,872
)
Subsidy income
1,082
442
2,351
1,156
Profit/(loss) from operations
7,186
(26,348
)
(91,558
)
(84,513
)
Other income and expenses:
Interest income
186
582
551
3,481
Interest expense
(4,290
)
(491
)
(8,116
)
(1,437
)
Changes in fair value of warrant and
convertible loan
2,766
(42
)
1,240
(25
)
Other income
7,399
127
7,864
673
Profit/(loss) before provision for
income taxes
13,247
(26,172
)
(90,019
)
(81,821
)
Income tax expense
—
—
—
—
Net profit/(loss)
$
13,247
$
(26,172
)
$
(90,019
)
$
(81,821
)
Less: net loss attributable to
noncontrolling interests
—
(42
)
—
(21
)
Net profit/(loss) attributable to
Microvast Holdings, Inc.'s shareholders
$
13,247
$
(26,130
)
$
(90,019
)
$
(81,800
)
Net profit/(loss) per common
share
Basic
$
0.04
$
(0.08
)
$
(0.28
)
$
(0.26
)
Diluted
$
0.03
$
(0.08
)
$
(0.28
)
$
(0.26
)
Weighted average shares used in
calculating net profit/(loss) per share of common stock
Basic
320,545,388
313,108,457
317,153,113
309,541,499
Diluted
367,031,181
313,108,457
317,153,113
309,541,499
MICROVAST HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars,
except share and per share data, or as otherwise noted)
Nine Months Ended September
30,
2024
2023
Cash flows from operating activities
Net loss
$
(90,019
)
$
(81,821
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Loss on disposal of property, plant and
equipment
810
832
Interest expense
2,248
—
Depreciation of property, plant and
equipment
22,442
14,643
Amortization of land use right and
intangible assets
581
593
Noncash lease expenses
2,004
2,108
Share-based compensation
30,289
51,641
Changes in fair value of warrant and
convertible loan
(1,240
)
25
(Reversal)/ allowance of credit losses
(237
)
(1,038
)
Write-down for obsolete inventories
3,032
928
Impairment loss from long-lived asset
64,924
473
Product warranty
10,353
9,017
Changes in operating assets and
liabilities:
Notes receivable
9,162
(22,372
)
Accounts receivable
18,157
(911
)
Inventories
(4,144
)
(54,473
)
Prepaid expenses and other current
assets
2,340
(12,666
)
Operating lease right-of-use assets
(1,821
)
(5,588
)
Other non-current assets
9,037
(653
)
Notes payable
(7,490
)
(26,070
)
Accounts payable
(47,234
)
53,400
Advance from customers
(197
)
515
Accrued expenses and other liabilities
(33,094
)
(1,374
)
Operating lease liabilities
(869
)
2,760
Other non-current liabilities
7,679
(319
)
Net cash used in operating
activities
(3,287
)
(70,350
)
Cash flows from investing activities
Purchases of property, plant and
equipment
(27,366
)
(153,574
)
Proceeds on disposal of property, plant
and equipment
9,830
879
Purchase of short-term investments
—
(425
)
Proceeds from maturity of short-term
investments
5,564
—
Net cash used in investing
activities
(11,972
)
(153,120
)
MICROVAST HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS-Continued
(In thousands of U.S. dollars,
except share and per share data, or as otherwise noted)
Nine Months Ended
September 30,
2024
2023
Cash flows from financing activities
Proceeds from borrowings
70,373
18,439
Repayment of bank borrowings
(31,824
)
(6,286
)
Convertible loan borrowing from a
shareholder
25,000
—
Payment for debt issue costs
(525
)
—
Deferred payment related to purchases of
property, plant and equipment
(16,389
)
—
Net cash generated from financing
activities
46,635
12,153
Effect of exchange rate changes
(4,598
)
(2,088
)
Increase (decrease) in cash, cash
equivalents and restricted cash
26,778
(213,405
)
Cash, cash equivalents and restricted
cash at beginning of the period
88,189
302,617
Cash, cash equivalents and restricted
cash at end of the period
$
114,967
$
89,212
Nine Months Ended
September 30,
2024
2023
Reconciliation to amounts on consolidated
balance sheets
Cash and cash equivalents
$
63,585
$
67,398
Restricted cash
51,382
21,814
Total cash, cash equivalents and
restricted cash
$
114,967
$
89,212
MICROVAST HOLDINGS,
INC.
RECONCILIATION OF GROSS PROFIT
TO ADJUSTED GROSS PROFIT
(Unaudited, in thousands of
U.S. dollars)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
$
101,388
$
80,116
$
266,414
$
202,042
Cost of revenues
(67,776
)
(62,232
)
(188,382
)
(167,839
)
Gross profit (GAAP)
$
33,612
$
17,884
$
78,032
$
34,203
Gross margin
33.2
%
22.3
%
29.3
%
16.9
%
Non-cash settled share-based compensation
(included in cost of revenues)
771
1,530
3,390
4,559
Adjusted gross profit
(non-GAAP)
$
34,383
$
19,414
$
81,422
$
38,762
Adjusted gross margin (non-GAAP)
33.9
%
24.2
%
30.6
%
19.2
%
MICROVAST HOLDINGS,
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED NET LOSS
(In thousands of U.S. dollars,
except per share data, or as otherwise noted)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net profit/(loss) (GAAP)
$
13,247
$
(26,172
)
$
(90,019
)
$
(81,821
)
Changes in fair value of warrant and
Convertible loan*
(2,766
)
42
(1,240
)
25
Non-cash settled share-based
compensation*
6,301
15,862
30,298
51,602
Adjusted Net Profit (Loss)
(non-GAAP)
$
16,782
$
(10,268
)
$
(60,961
)
$
(30,194
)
*The tax effect of the adjustments was
nil.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net profit (loss) per common
share-Basic (GAAP)
$
0.04
$
(0.08
)
$
(0.28
)
$
(0.26
)
Changes in fair value of warrant and
Convertible loan per common share
(0.01
)
—
—
—
Non-cash settled share-based compensation
per common share
0.02
0.05
0.09
0.17
Adjusted net profit (loss) per common
share-Basic (non-GAAP)
$
0.05
$
(0.03
)
$
(0.19
)
$
(0.09
)
MICROVAST HOLDINGS,
INC.
RECONCILIATION OF NET LOSS TO
EBITDA AND ADJUSTED EBITDA
(Unaudited, in thousands of
U.S. dollars)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net profit/(loss) (GAAP)
$
13,247
$
(26,172
)
$
(90,019
)
$
(81,821
)
Interest expense (income), net
4,104
(91
)
7,565
(2,044
)
Income tax expense
—
—
—
—
Depreciation and amortization
7,724
5,040
23,023
15,236
EBITDA (non-GAAP)
$
25,075
$
(21,223
)
$
(59,431
)
$
(68,629
)
Changes in fair value of warrant and
convertible loan
(2,766
)
42
(1,240
)
25
Non-cash settled share-based
compensation
6,301
15,862
30,298
51,602
Adjusted EBITDA (non-GAAP)
$
28,610
$
(5,319
)
$
(30,373
)
$
(17,002
)
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