Wallbox (WBX) Q1 2025 earnings call transcript

Thank you Charlie and good morning and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Warbox's first quarter 2025 results. This event is being broadcast over the web and can be accessed from the investor section of our website at investors. warbox. com. I'm joined today by Enric Osichon, Warbox CEO and Luis Buada, Warbox CFO. Earlier today we issued our press release announcing results from the first quarter and at March 31st 2025 which can be also found on our website. Before we begin, I would like to remind everyone that certain statements made on today's call are forward looking that may be subject to risks and uncertainties relating to future events and order future financial performance of the company.

Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the SEC, including the annual report on Form 20F for the fiscal year ended December 31st 2024, filed May 6th 2025. We will be presenting on another financial statement in IFRS format that reflects management's best assessment of actual results. Also, please note that we use certain non-IFRS financial measures on this call and recommendations of these measures are included in the presentation posted on the investor section of our website. Also, a copy of these prepared remarks can be obtained from the investor relations website under the quarterly results section, so you can more easily follow along with us today.

So with that out of the way, I will turn it over to Enric.

Thank you Michael and thanks everyone for joining us today. We will start this call reviewing highlights from the first quarter 2025 and spend time discussing commercial weeks, recent product introductions and the annual market. Luis, we offered a proper look at our financial results and our key financial metrics before I close the conversation to highlight what we're focused on for the remainder of the year. To earn revenue was 37.6 million euros, meeting the rise and range we provided in our last earnings call, an almost flat compared to last quarter, but down 13% year over year. If we look at the main drivers, there have been certain reasons and product categories performing well to offset with the results in others.

North America continues to deliver strong year over year performance across all fronts, AC chargers, DC fast chargers, and installation services. Compared to last year, euro has been down in all product categories, but as the new market is starting to improve, we expect to ramp up sales in the upcoming quarters. We have seen signs of improvements in the UK, brands, and Belgium compared to last quarter. In general, we are reaching stability and control as we consistently grow with key accounts and building meaningful value, especially in the home and business segment.

DC fast charging sales remain volatile and are dependent on large orders, resulting in other growth instead of a steady increase. However, we continue to own more new customers with the more recent example, Francis energy in the US. As the market evolves and customer expectations rise, we are committed to delivering the optimal DC fast charging solution. In total, during the first quarter, we delivered over 36,000 AC units and more than one hundred DC units. I will surely share more digital and key milestones and customer wins across both our home and business and fast charging segments. Overall, we are confident in our commercial position with the right customers, the right products, and the right distribution that are scored them, which is we see in the 37-39% guided range.

The results reflect a 634 basis for improvement compared to last quarter. The positive impact was mainly due to product mix and the impact of cross selling of AVL products. The remains room for improvement of the growth margin through the revision of hardware, but the space to reach an improvement is constrained by the existing high inventory levels. Ruiz will provide additional details regarding these initiatives shortly. Labor costs and operating expenses have decreased again quarter over quarter. Now, down 13% and have declined 23% compared to the same period last year. In the case of cash costs, which is the finest labor costs and topics, excluding around the activation, non-care items, and one of expenses, the result is even more impressive, and we achieve a 32% year-over-year reduction.

The newly implemented business unit structure introduced last year has proven effective in managing costs, providing greater insight and control. We have maintained, consistent revenue levels while significantly improving organizational efficiency. Our strategy remains focused on cost savings and expanding sales as the business unit structure is now also beginning to support revenue growth. The first quarter, 2025, adjusted a bit that has been our best result since recalling a public company, landing at minus 7.8 million euros and slightly better than the guidance provided last quarter. This result represents an improvement of 42% compared to last year and a solid proof point that we're executing well on the items we can control as we progress to become a profitable company.

Looking ahead, I am increasingly optimistic as we stabilize sales, build a strong backlog and seek in opportunities for growth. At the same time, we remain disciplined in right-facing organization and expanding growth margins as we continue to scale revenue. For the first quarter of 2025, Euro contributed 25.5 million euros of consolidated revenue, or 68% of total revenue. The European e-market showed fully growth of 21% compared to the same period last year, which is exciting to see considering the market's softness of last year. We expect this positive momentum to support an upward trend in selling over the coming quarters.

Euro remains our largest region and we are committed to leveraging our position now that the e-market is starting to trend in the right direction again. North America was again a strong region for wallops and consumers at 11.4 million euros or 30% of total revenue. This represents a 100-42% year-over-year growth compared to the first quarter of 2024. The positive results in North America resulted from our activities across the world, including full strategy sales, supernova DC charging sales and installation services.

Besides, we secured large orders from key accounts as the U. S. million market continues to grow. Both APAC and LATAM remains more region for wallops but continue to have significant future potential. Now, contributing approximately 600,000 euros or 1% and 480,000 euros or 1% respectively. AC sales of 25.6 million euros, including AVL, represented approximately 60% of our global concentrated revenue. Down 14% year-over-year and slightly lower compared to last quarter.

Wicker AC selling in Europe during the first quarter was offset by a stronger than expected AC selling in North America, along with one of the best quarters of cross-selling AVLs in fourth. We continue to leverage the success of the M4 outside Germany. Examples include the TRAPAC, a global leader in food packaging, where we secure a project in Spain involving 48, E. M. 4 charger with electron absorber licenses, showcasing our full 10K solution. Additionally, we launch a pilot project with total energy. One of the world's largest energy companies deploying the E. M. 4 solution in Belgium.

This quarter success in North America is firmly achievable to a significant order from one of our key core accounts, where to move the charging subsidiary of Stellantes, which are certainly used to warm back look for the next quarter. This order serves as a major milestone and demonstrates the recognition to supporting the adoption. In addition, this month, we announced a new partnership in North America with another large carbon or factory company Nissan. Together with Nissan, we are launching a nationwide home unit charging program in Canada, which allows EV owners to purchase a wall of PULSA plus home charger. The program is designed to simplify the home charging journey and make it more accessible to a broader audience.

Another product that is outperforming our expectations is the recently launched PULSA Profopia, which is already shown in storm market action. We mentioned this product briefly during our last time in school, but now that the order of this open, we are starting to build a significant one-track. The PULSA Profopia is a refined version of our already successful PULSA platform designed to meet customer demands including connectivity requirements and is a rate of forming storming markets like in the UK. This is hence improved significantly in the first quarter, growing 41% compared to the previous one, now landing at 4 million euros or 11% of sales. This is a promising improvement, but does not yet reflect the full potential of the Supernova platform.

Our CPO customers remain conservative in the rollout of the infrastructure, and as we believe, profitability is a high priority. Customer product demand for reliability and functionality is keeping increasing. However, it is great to work with both existing and new customers including names such as relief, Rupjeera, plug-in best, produce energy, and so. We have sold a similar amount of units as the last quarter, but improved revenue due to increased sales of new generation chargers, with higher charging power and better margin profiles. In addition, we are continuing to develop our portfolio by securing new notifications that expand our other civil markets, while also offering adjacent services such as energy management and compatibility with backup battery solutions.

In the next section, I will provide additional details, software, services, and others continue to be important revenue drivers, consistent with the last quarter, generating 8 million euros in the first quarter. This represents 21% of total revenue and a 60% increase compared to the same period last year. Within this category, software continues to grow steadily, with 55% year-over-year growth.

However, installation services have been the primary driver increasing by 110% compared to the same period in 24. Largely due to the rollout of the state of Washington condominium program.

Diversifying into these activities is important not only to capture growth, but more importantly to support our customers with adjacent services were needed. As briefly mentioned during this earnings call, we continue to develop our DC fast charging portfolio, while strengthening our position in this segment. This includes new versions of our super long platform that capture faster, are more reliable and can help secure the best return on investment. However, our focus extends beyond charging speed, with even greater emphasis placed on safety, transparency, and compliance. The national type evaluation program and depth certification, marking an important milestone in our North American expansion. These certifications are a key requirement for EV chargers, involved in the sale of electricity, ensuring they display essential protection details, including the amount of electricity spent, the unit price, and the total cost.

These achievements allow all of us to expand its fast charging resolution, not only throughout California, but also nationwide. Complimenting our existing residential charging offerings and positioning us to take part in measuring infrastructure projects. With the recently announced partnership with transit energy, and leading charging operator in the US, we also immediately started selling the newly C-10 certified chip on mobile. We are excited regarding this commercial milestone, and we expect to be able to leverage this momentum by securing more new customers.

In addition to speed, safety, and compliance with key certifications, at World War, we also developed complementary solutions within our DC fast charging portfolio to help customers optimize their charging infrastructure. One example, resulting from our study partnership with Genoa, is a fully integrated charging solution that combines advanced DC fast charging, battery energy storage, and intelligent power distribution. The system features super low for charging capabilities of up to 240 kilowatts, along with a scalable battery storage of up to 21 megawatt-hours, provided by a product, as a direct company. For customers, the N2N charging insurance resolution provides many advantages, including produced with dependency, accelerated side deployment, and optimize energy usage for an improved charging experience. Another important product milestone, I would like to highlight, is the opening of pre-orders for the Quasar 2, our next generation by direction of DC charging.

Following the US notification secured every year, we have now launched pre-orders in collaboration with our partner KIA, designed to enable bidirectional capabilities for KIA ED9 drivers. Quasar 2, when combined with our World and its charging, and can provide backup power to offer up to three days. Features such as vehicle-to-home integration, solar compatibility, and installation and backup power make it a key part of our smart energy portfolio. The relevance of this technology was underscored during last week's widespread lack of in Spain and Portugal, where concerns about this stability and energy resilience came surely into focus. Quasar 2, empowers users to take control of their energy usage, and has self-sufficiency and secure energy supply during power outages, where excited about this launch with KIA as a foundational step for what we believe will be a transformative solution in the world's energy landscape.

The first quarter shows for the year-over-year growth in the business health in our residual market, which we define as all regions except China, providing an exciting proof point for all beliefs that EVs are keen to stay and provide a large growth opportunity. Promotion reported 1.7 billion in salt in Europe, North America, and rest of the world combined. We represent a 20% growth compared to last year.

The rest of the world is the fastest growing region, starting at a lower starting point. With Europe not far behind while the North America market growth has been slower. We believe the drivers of this growth include the availability of more affordable EVs and positive uptake due to increased government support in Europe. However, it remains important to note that certain demand can be temporarily accelerated or low due to factors which has the reaction of customers to changes in subsidies, new emissions, standards, tariffs, or other conditions outside our control. We underpin again, or we believe that the EV market will grow this year, but we think the EV sell in the first quarter might have been inflated by EV sales pushed by manufacturers into 2026 to start strong in a year where car manufacturers need to comply with new emissions standards.

Looking forward, we remain conservative due to the volatile matter environment which we expect will impact the wider automotive supply chain. Specifically, the impact of tariffs on the EV market still needs to be assessed as the relatively new EV supply chains can be particularly vulnerable due to the reliance on redness materials and a very higher price point than its ICA alternatives. Overall, it is clear that it is market volatility remains and the industry's sensitivity to shift in the macro environment will remain until the industry reaches a more mature state. Still, the consumer growth of the environmental resources rather than altars our commitment to rights as an organization in line with the volume and conditions even if they remain a moving target.

We remain optimistic that by focusing on the factors within our control, we can continue to grow over revenue, still in post and move closer to profitability. There is an impact of tariffs on world works we have been able to respond well due to our flexible footprint with productive facilities in different regions and our localized supply chain with multiple vendors. We release and the coronavirus to water to made in bets to make investment or move production lines.

But we continue to look for opportunities to perform flexibility to quickly adapt to changing policies. One important milestone we celebrated in the past quarter underpinning our flexible footprint is a wish for past 100,000 chargers produced in Arlington, Texas. It became a benefit in 2022. As our results show, the North American market becomes more and more important and by investing in domestic production, world reframes education to American businesses, supports local job growth and provides the businesses required to serve the rapidly expanding market nationwide and across borders. Luis, I'll turn it over to you to comment further on our financial details.

Thank you, and Rick. Good morning and good afternoon to everyone. We have started off 2025 with solid results. We have a new landing slightly above the right-hand range with 37.6 million euros. We have a slight uptick compared to last quarter that I'm 13% year over year. AC7 Europe remains soft but well compensated by a continued strong performance in the North American market in all the activities. In Europe, DV markets showed an improvement and we expect to see the results of this recovering market in the upcoming borders. Also, DC charging sales showed a positive turnaround after the low point last quarter, increasing 41%. Cross margin improved significantly quarter over quarter reaching 38.1% well within our right-hand range.

This improvement was primarily driven by a favorite old probe mix, particularly the positive contribution from our new generation of supernova chargers which carry higher margins. Looking ahead, we continue to identify additional inventory release and optimize below material. Q1, name or cost and effects total 25 million euros. Representing a 23% improvement compared to the same period that year and almost 3.8 million euros down quarter over quarter for 30%.

With revenue remaining flat quarter over quarter, these performance highlights a continuous operational efficiency gain. Business unit structure implemented last year is beginning to yield tangible benefits, particularly to enhance accountability and transparency. Cash cost, which is defined as labor costs and topics excluding R&D, activation, known cash items and one of expenses, declined even further than 7% year over year.

As we progress toward break events and positive cash flow, we remain focused on continuously optimizing the organization. Consolidated adjusted evidence and laws for the quarter was 7.8 million euros, our best resource since becoming a public company and represent a 42% improvement year over year. These progress have been driven primarily by continuous cost reductions, which have created a more efficient organization capable of reaching profitability at lower revenue levels.

Looking ahead, we anticipate top line growth in the coming quarters, allowing us to track closer to the adjusted EBITDA breakeven points. We ended the quarter with approximately 40.6 million euros of cash, cash equivalent and financial instruments. Lumps and borrowings total approximately 199 million euros at the end of the quarter, comprising 67 million euros in long-term debt and 132 million euros in short-term debt. Total debt remain broadly stable compared to Q4.

As mentioned during our last earnings call, we successfully negotiated an 18-month interest-only videos with our primary lenders, Santandera Mary A. We have since extended this agreement to include cash advance and the EVN city. As part of this arrangement, all these financial institutions have also committed to maintaining the existing short-term financial facilities at least within June 30, 2026. In line within the National Accounting Standards, and at this close in our recently filed 20, 24.4 million euros of borrowings were classified as current liability that year end, as not all agreements were finalized as of December 31, 2024. These expanded finance agreements significantly and has enhanced our liquidity visibility as we progress the work profitability in the coming quarters.

Cash generation and liquidity remain top priorities for the company. We are actively executing on several key initiatives, including basically traffic control, ongoing inventory reduction, and the consideration of potentially divesting certain non-port assets. CapEx for the first quarter total 0.7 million euros, of which 0.3 million euros were related to investments in property, plant, and equipment. Importantly, near all these PPE spend reflects historical capex associated with AVL rather than the new investments made during the quarter. Excluding these, first quarter PPE capex will have been minimal.

Looking ahead, we expect tapex to remain low as our pro portfolio is market-ready, and major infrastructure investments have largely been completed. That said, a modest update may occur in coming quarters, when inventory will continue to release cash achieving a 9% reduction quarter over quarter, that is, inventory down to 63.6 million euros. Year over year, inventory has increased by 29%, reflecting the effectiveness of our optimization efforts. And rate, I'll turn it back to you to provide some closing comments.

Thank you, Luis. 2020.5 is off to a good start with solid results in the first quarter and many milestones to celebrate. We are still not where we want to be, and we are making steps in the right direction, and the fundamentals remain solid. I'm becoming more and more excited about how we can leverage the existing global platform, with its diversified product portfolio, large geographical footprint, and key strategic commercial partners by continuing optimization and growth efforts to achieve profitability. We show strong cost discipline and improved visibility on the top line, allowing for better management of the organization. This will help us to address and manage the contributing volatility in the market, especially with the current economic uncertainty and potential impact of Paris.

In addition, we see opportunities to grow and build a meaningful backlog with existing partners. Overall, we are pleased with our progress, and we look forward to carrying on costing the roles as we keep building towards becoming a global leader in the charging energy management solutions.

With that, I would like to move to items for the next quarter. For the second quarter of 2025, we have the following expectation, driving with the 37 million euros to 39 million euros range, growth margin between 37% and 39%, and negatives adjusted in that between 5 million and 8 million euros.

With that, we will read the questions from our analysts. Welcome back, everyone. To our analysts, we ask that you pose one question when you follow up if needed, and re-enter the queue if there's more. This will allow each of you to ask your questions up front and we'll get as many additional questions as time allows. Charlie, I think you have some instructions for our analysts.

Thank you. Of course, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. When prepared to ask your question, please ensure you are unmuted locally. As a reminder, that's star followed by one on your telephone keypad.

Hi, George. Good morning. This is Andrej. Thank you for your question. So, a clear question about ABL. So, in terms of integration, we have done a lot of synergies between both companies in the last six months, I would say. A big part of the savings that we've seen in our organization and improvements of efficiency have come from this integration. So, I would say that we are almost done in terms of synergies that we can finance companies, and we are quite happy on the levels of OPEX and personnel that takes to run ABL at the revenues that we are seeing since we acquired them. So, in that regard, in terms of course, engineers, we are happy.

What's the main focus right now is in the cross-selling, of what we call cross-selling of our products, because here we have two opportunities. One opportunity is that take the products from ABL that ABL has been very successful selling in Germany and sell them all around Europe. And this is something that has been slowly growing, and we can say that this last Q1, we had the best worker ever in terms of EM4 sales.

And we are seeing really, really good traction of EM4 sales in France, in the Benelux area, and now also in Spain. So, we are starting to see that our historical or local sales teams are having good projects. And the example of that is what we commented that the TRAPAC deal or the total energy, the huge energy company, and we are doing this pilot, that is a lot of units, but we expect it to continue growing. So, this part, although has been maybe slower than we expected, is starting to bring meaningful revenue in our home and business organization. And we are happy with the product. We are happy with the support we are giving our customers, and we are starting to see the traction.

The other part of our legal cross-selling is what AVL can sell in Germany, from our historical product. Now, the supernovas, and the wall walks AC and home and business products. And maybe this part has been a little bit slower, but again, this last quarter, we've done great steps forward. We are more than an AVL AC customer, like the mobility house for Pulsar. And also, we have developed a whole team for selling fast charging, for selling supernova. We launched our supernova iRET, which is a supernova necessary to sell in Germany. And we have been creating this team. We sold some fast chargers. One of the first chargers we sold was in the Dusseldorf Airport. And we expect more to come, because this is one of the pilots of the Dusseldorf Airport.

So, we are introducing our products into the AVL sales organization, which is very successful. And we think this will create meaningful revenue. Again, these both cross-selling, we amount it around two million years of quarter today, but we believe that this can grow to the double digits in few quarters, as we continue to expand in new markets and more products.

And finally, in terms of the management and organization in the AVL, we have more than a new responsible for the whole central organization. He comes from the industry. He was responsible in one of our competitors in Germany. And this person has joined a couple of months alone. And we also expect to see some traction there, because he has experience not only in the AC charging side, which is what the AVL is experiencing also in the DC fast charging side.

In terms of other opportunities, we are not right now actively working on acquiring new assets. Our goal and our focus right now is make sure we are cash positive as soon as possible. And after that, once the company generates cash, we will probably start looking into opportunities. I think this time, the sort of time the market is growing well, something to do well, let's see going slow, so there's going to be opportunities.

Thank you.

So unfortunately, I cannot talk about, but we are in today, we have started forward to drive in Europe. This is the most important event for charging and energy solutions. It's happening in Germany. And again, we are presenting the Quasar that's going to be launching in Europe. As you know, we are working with Kia, another Carman of market where before in Europe, you know, blackouts were something that we no one expected, but now it's in the top of mind on some people. Thank you.

Thank you.

Hi, Ryan. Thank you for your question. This is Rick. This is a very big question, because at the end, as we operate in multiple geographies and multiple segments, no? Maybe starting for what's the biggest part of our revenue, which is the home and business segment. These are AC chargers for home and for commercial opportunities. I will separate them between Europe and in the US. In the US, as we can see, last quarter, we've been able to roll 142%. There's a huge opportunity we're seeing there, and comparing to our competition, we see that historical players that used to focus on the hardware are now more focused, maybe on the operator operation of networks and less in selling good hardware with good software solutions.

We see an opportunity there in the US, and that's one of the reasons why I believe we are having this very big traction, because our competition first is not focusing as much on delivering the right solution for home and for businesses. And two, we have an edge in the US, which is our factory. This factory in the US, in Arlington, that we were able to produce 100,000 chargers in the last three years, also give us flexibility, give us capacity to manage much better than others, the situation with tariffs. And when looking at the US, there's some other competitors that are Chinese players, and they also now, with the tariff, create some friction with customers. So, I think when I look at the US, it's a very big market where we are capturing a lot, both because competition is not focusing as much in hardware with software solutions, and our American manufacturing.

When I look at home and business in Europe, here we have, I will say two or three pan-European competitors, they will be the likes of subtech, alphan, and probably easier, I will say, you're only, these are more local. And what we see is that those players that are very strong in their home markets, but straggle more when going into other geographies.

I think one of the key of World Works is that World Works was born in a market, which is a very big country, but with very low penetration today of EBS. So, World Works had, from day one, to expand and be strong in very different countries. So, today, World Works is very strong, and one of the top two of the three in France, in Germany, with ABL, in Spain, in Mereluks, in the UK, we're expanding very well. So, we have in this footprint, and having these strong presence in other markets, we believe that in short and mid-term world markets continue to roll, it will give us an advantage versus the others.

And also, for carbon manufacturers and utility companies, which are our most best part of our revenue, they want players that can operate in many markets and are strong in different markets. And just going now to the other part, which is our supernova sales and the fast charging sales, here I will say that the market is global, is not separated between US and Europe, it's more global players. And I will say, the two main competitors here, one being kind of power than the other, and it's interesting because they are obviously focusing on the highest, highest power, and that's where the main focus, they happen.

What we are finding right now is, yes, we have high power solutions, and we are launching up solutions to get closer to the 700 kilowatts. But we want to, and making sure that we are the most successful and the most efficient in the highest volume area of fast charging, which is 100 to 350 kilowatts. That's where we are focusing with our supernova solution, with our city solution, and making sure that we have a very cost-effective, high quality, and lowest cost of ownership solution that we can compete, rather than trying to compete in the megabat and 1.5 megabat region, which we obviously are developing products. We are focusing on having the best niche with the highest volume we believe is going to be in the following years.

Yeah. So I believe that looking into, well, first let me talk about the margins. So today, in fast charging, we are around 50% growth margins. And home and business, we are around 37 to 40% growth margins. We can be in home and business at 50% also. We are not there today, because we have still inventories, and we are reducing these inventories and making sure we can get cash from it. So once as these inventories keep being reduced, we will be expanding our growth margins in the home and business. But we prefer to focus on reducing inventories than obsolete inventories and have high rose margins. So we are in this 37 to 40% in the home business, side.

And when we look into the sales mix, I believe that for Q2, we should be in a similar mix. We're looking into similar than Q1, because our strategy for fast charging is to build more backlog. We've been having very volatile sales with fast charging, because our levels are backlog, we're small. What we're doing now is start building backlog with customers. So make sure we have a steady growth. And at the end, it becomes a more efficient operation. The reason why we build the backlog is this is right now, we are delivering and manufacturing a lot of fast chargers at the end of the quarter. This creates huge overhead and makes our operation more expensive.

So we are probably with customers planning better the deliveries, having orders to be delivered in successive quarters. And with this backlog being grown, not only we will have a steady growth on DC sales, and the mix will improve towards DC sales, but also we will have a more efficient operation and a lower cost in the manufacturing of fast charging.

Great. Appreciate all that detail. Thanks.

Thank you, Ryan. So this was our last question. Thank you all for joining us today. We hope you found today's call a good use of your time. Let us know if you can help you in any way.

Ladies and gentlemen, this concludes today's call. Thank you for joining me, Matt. Just