13-02-2025
NanoXplore Inc (NNXPF) Q2 2025 Earnings Call Highlights: Revenue Growth and Strategic Expansion ...
Total Revenue: $33.1 million, a 14% increase from Q2 last year.
Adjusted Gross Margin: 21.3%, an increase of 190 basis points year over year.
Adjusted EBITDA: $1.1 million, compared to a loss of $93,000 last year.
Advanced Materials, Plastics and Composite Products Segment EBITDA: $1.3 million, up from $416,000 last year.
Battery Cells and Material Segment EBITDA: Loss of $218,000, improved from a loss of $509,000 last year.
Cash and Cash Equivalents: $21 million at the end of the quarter.
Operating Cash Flow: Inflow of $1.5 million.
Total Liquidity: $31 million as of December 31.
Fiscal Year 2025 Revenue Guidance: $140 million to $155 million, expected to be on the lower end of this range.
Warning! GuruFocus has detected 2 Warning Sign with NNXPF.
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
NanoXplore Inc (NNXPF) reported a 14% increase in total revenues for Q2 2025 compared to the same quarter last year, reaching $33.1 million.
The company achieved its tenth consecutive quarter of margin expansion, with adjusted gross margins increasing by 190 basis points to 21.3%.
NanoXplore Inc (NNXPF) is preparing for a scale-up in production of dry process graphene, with plans for a larger scale pilot plant and new equipment expected to arrive by Q3 2025.
The company has received positive customer feedback on its dry process graphene, particularly regarding its competitive pricing, which has accelerated customer testing and decision-making.
NanoXplore Inc (NNXPF) maintains a strong liquidity position with $21 million in cash and cash equivalents and a total liquidity of $31 million as of December 31, 2024.
The threat of tariffs is creating uncertainty in the near term, impacting the North American supply chain and potentially affecting NanoXplore Inc (NNXPF)'s business.
The company is still awaiting confirmation from Hydro Quebec for additional electricity allocation, which is delaying the CSPG and dry process graphene expansion projects.
NanoXplore Inc (NNXPF) expects to be at the lower end of its fiscal year 2025 revenue guidance range of $140 million to $155 million due to macroeconomic headwinds and supply chain challenges.
Delays in new program launches and potential tariffs are contributing to a softer near-term demand environment for graphene-enhanced composite products.
The company faces ongoing challenges in the battery cells and materials segment, with an adjusted EBITDA loss reported for this segment in Q2 2025.
Q: Can you explain the gross margin expansion in the quarter and how it might trend for the rest of the year? A: There were no specific one-time factors affecting Q2 margins. We expect Q3 and Q4 to continue the trend of year-over-year improvement, although Q3 might be slightly softer compared to last year.
Q: How should we think about modeling fiscal 2026 given the wide-ranging consensus and expected growth? A: It's too early to provide specific guidance for fiscal 2026. However, we anticipate a more robust year due to new business initiatives and investments made over the past two years.
Q: With the guidance at the low end of the range, how confident are you in achieving it given macro uncertainties? A: There is significant uncertainty, especially with potential tariffs. We are monitoring the situation closely and expect better visibility by the third quarter.
Q: Could the five-year business plan shift more focus to North Carolina rather than Quebec due to tariffs? A: While tariffs could force us to rethink our strategy, we currently do not anticipate a drastic change to our five-year plan.
Q: Can you provide more details on the commercial rollout for graphene powder for fluid and foam clients? A: The rollout is expected in the second half of the year, starting with hundreds of tons and potentially moving to thousands of tons over a couple of years.
Q: What are the key dynamics of the North American CSPG market despite slowing EV sales? A: The North American market has a supply deficit, with about 80% of CSPG capacity coming from China. Even without EV growth, there is a significant demand for CSPG.
Q: Can you update us on the funding agreements for CSPG and dry process graphene facilities? A: We are awaiting power confirmation from Hydro Quebec. About 50% of the capital is expected from government programs, and we are monitoring potential changes in government policies.
Q: How might tariffs on steel and aluminum impact the shift to composite materials? A: While some non-critical parts could shift to composites, structural parts require significant engineering changes, so a quick shift is unlikely.
Q: What is the cost and pricing difference between dry process graphene and existing graphene processes? A: The dry process graphene has a significantly lower cost and selling price, designed to be competitive with carbon black, while maintaining current margins.
Q: Will there be any adjustments to graphite supply for NanoXplore? A: No adjustments are expected as the graphite market remains in oversupply.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
