Good afternoon, and welcome to the Nuvve Holding Corporation Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

On today's call are Gregory Poilasne, Chief Executive Officer; and David Robson, Chief Financial Officer of Nuvve. Earlier today, Nuvve issued a press release announcing its second quarter 2024 results. Following prepared remarks, we will open up the call for questions.

Before we begin, I would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Nuvve's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking projections.

These risk factors are discussed in Nuvve's filings with the SEC and in the earnings release issued today, which are available on our website. Nuvve undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances.

With that, I would like to turn the call over to Gregory Poilasne, Chief Executive Officer of Nuvve.

Gregory?.

Thank you and good afternoon to everyone here today. Thank you for joining our second quarter 2024 results call. We are pleased to have the opportunity to update you on the progress we believe we are making in scaling our business and positioning Nuvve for future growth.

This second quarter has remained challenging for Nuvve as school districts have been awaiting EPA funding approval letters before placing orders. The good news is that the EPA funding rounds two and three are finally moving forward, but after significant delays.

This situation forced us to be more aggressive and review our operational processes tightly. We are now seeing orders picking up and we expect that the following three quarters will see significant increase, but that also means that some recognized revenue expected in 2024 will slide into 2025.

This is disappointing, but doesn't change our view on the school bus business in the long run. Concerning our project in Fresno, we had a great event in July where the different parties got together for a breaking ground event.

This allowed us to share more details about the project and help other customers understand the value that Nuvve platform can bring for such developments.

As a reminder, Nuvve GIVe software platform provides the ability to manage and optimize site-level EV charging and behind-the-meter solar and battery storage and to aggregate resources across multiple sites to participate in ancillary services and grid service markets.

This allows fleet operators to save money, transition to EV fleets faster and optimize capital asset life. We also expect our other project in collaboration with Taiwan Power Corporation to kick off soon as we are finalizing a contract with e-Formula, our local partner.

Expect to hear more soon on these projects with a total deployment of 90-plus charging stations. In the meantime, our pipeline of project on the island is also expanding. As a reminder, you can find more details on our V2G Hub projects on our Hub website, www.nuvvev2ghubs.com. I now have some exciting news to share with you.

To further expand the deployment of our technology, we have been working with a new partner, WISE-EV LLC headquartered in Nevada. Through this relationship, we're excited to announce the launch of our joint SPV, special purpose vehicle.

This SPV targets a deployment of public infrastructure on the first site in Nevada, leveraging a very attractive source of funding from Nevada Energy.

We expect this to be the first in a series of planned SPVs that allow us to accelerate Nuvve technology deployment, save money for EV drivers by providing attractive energy cost pricing and reliable equipment and bring non-dilutive cash to Nuvve in the form of prepaid services.

This first SPV will be financed through debt provided to the SPV for a total project cost of about $1.5 million. An event scheduled in Las Vegas on Thursday will allow us to promote the next set of projects. The consumer public infrastructure segment is not new to Nuvve. You might remember our engagement with Circle K last year in Europe.

We believe this is a key segment that requires a deep integration into the electric system and that is also supported by a significant amount of funding from various governments around the world. We believe the SPV structure we have adopted makes our future revenue more forecastable and provides cash up front.

On the other hand, revenue recognition happened on a longer period. When we planned our 2024 revenue forecast in late 2023, we guided full year 2024 revenue to range between $15 million to $20 million.

However, given project delays we are experiencing with some of the large customers and delays occurring in the timing of EPA funding award as well as the structure of the project we are making for future revenue, we believe that we no longer anticipate we will achieve the $15 million to $20 million revenue target this year.

Given the difficulty in forecasting the timing to convert our backlog and pipeline to revenue, we'll not be updating our revenue guidance for 2024. Finally, earlier this quarter, we had announced we had engaged Cappello Global, a Los Angeles-based investment bank in order to work on our strategic investment.

This process is underway and we hope to share an update with you over the next few months. The SPV is a good indication of our vision. In the meantime, we are managing our cash tightly. And now I will let David take you through the details of our financials.

David?.

Thanks, Gregory. I will start with a recap of second quarter 2024 results. In the second quarter, we generated total revenues of $802,000 compared to $2.12 million in the second quarter of 2023. The decrease was primarily driven by the reduction in charger hardware sales and the related timing of EPA funding awards this year versus the prior year.

Year-to-date, through June 30th, 2024, total revenues were $1.6 million, which compares to $4 million for the prior year period. The year-over-year decrease in revenues is also primarily driven by the reduction in charger hardware sales due to the timing of EPA funding awards this year versus last year.

Margins on products, services and grant revenues were 24.9% for the second quarter of 2024 compared to 8% for the year ago period. Year-to-date margins through June 30th, 2024, were 29.9% compared with 14.2% for the year ago period.

The increase is primarily due to improved pricing on hardware sales and a higher mix of service and grant revenues this quarter compared with last year. Excluding grant revenues, margins on product and service revenues were 10.1% for the second quarter of 2024 compared to 4.8% in the year-ago period.

As a reminder, margins can be lumpy from quarter-to-quarter depending on the mix. DC charger gross margins at standard pricing generally range from 15% to 25%, while AC charger gross margins are approximately 50%, but in dollar terms, are a smaller fraction of the revenue of a DC charger.

Grid service revenue margins are generally 30% while software and engineering service margins are as high as 100%. Operating costs, excluding cost of sales, was $6 million for the second quarter of 2024 compared to $7.5 million for the first quarter of 2024 and $8.5 million for the second quarter of 2023.

We have continued to drive efficiencies in 2024, resulting in lower overhead costs. We expect the lower operating costs we have realized this quarter to continue in future quarters.

Cash operating expenses, excluding cost of sales, stock compensation and depreciation and amortization expense declined to $5.4 million in the second quarter of 2024 versus $6.3 million in the first quarter of 2024 and $7.3 million in the second quarter of 2023.

Other income was $1.8 million in the second quarter of 2024, up from $0.3 million in the year ago quarter. The current period benefited from a noncash gain from the change in the fair value of warrants.

Net loss attributable to Nuvve common stockholders decreased in the second quarter of 2024 to $3.9 million from a net loss of $8 million in the second quarter of 2023. The improvement was primarily a result of lower operating expenses and noncash gains from the change in the fair value of warrants this quarter compared to the second quarter of 2023.

Now turning to our balance sheet. We had approximately $1.4 million in cash as of June 30th, 2024, excluding $0.5 million in restricted cash, which represents a decrease of $0.1 million from December 2023. The decrease was primarily a result of $8.7 million used in operating activities.

Subsequent to the quarter ended June 30th, 2024, in August, we received $1 million in proceeds from a short-term loan, which will be paid off in monthly payments with interest through March of 2025. During the quarter, inventories decreased by $0.1 million to $6 million at June 30th, 2024, as we continue to reduce inventory levels.

The net decline in inventory during the quarter was partially offset by the recording of LCFS credits at customer sites generated during the same period. Accounts payable at the end of the second quarter of 2024 was $1.9 million, an increase of $0.4 million compared to the first quarter of $1.5 million.

Now turning to our megawatts under management and estimated future grid service revenues.

As a reminder, megawatts under management was a metric we used to quantify the aggregated amount of electrical capacity from the deployment of our V1G and V2G chargers, which are primarily deployed in the electric school bus market in the US and in light-duty fleet deployments in Europe in addition to stationary batteries.

Currently, these chargers and batteries are located throughout the United States, Europe and Japan. Megawatts under management in the second quarter increased 1.7% over the first quarter of 2024 to 27.1 megawatts from 26.6 megawatts, a 35.3% increase compared to the second quarter of 2023.

In terms of its composition, 7.1 megawatts were from stationary batteries and 20 megawatts were from EV chargers.

We continue to expect further growth in our megawatts under management as we go through the remainder of the year and continue to commission our backlog of customer orders we have earned, in addition to new business, we anticipate winning, which we have visibility to in our pipeline for both EV chargers and stationary batteries.

Now turning to backlog. On June 30th, 2024, our hardware and service backlog decreased to $18.2 million, a decrease of $0.8 million from $19 million reported at March 31st, 2024. The decrease is related to the conversion of backlog into sales this quarter in addition to adjustments to contracts amounts with two customers.

Year-to-date, backlog in 2024 has increased by $14.3 million from $3.9 million at December 31st, 2023, which is primarily related to a large hub project in Fresno, California, which was closed during Q1 of this year. That concludes my portion of the prepared remarks. Gregory, back to you to conclude..

Thanks, David. For this quarter, 2024, the second quarter 2024 has remained challenging. We are very focused on closing on the last projects we have been awarded, while the school bus segment is getting back on track.

We also believe that expanding our reach within segments where we can bring significant value and where government support is strong will allow us to diversify our sources of revenue and bring more quarter-to-quarter stability. These are also deployments where we feel like we have good control on the timing.

Finally, we hope to share the progress we are making on our strategy path doing. Thank you..

We will now begin the question-and-answer session. [Operator Instructions] Seeing no questions, this will conclude our question-and-answer session. I would like to turn the conference back over to Gregory Poilasne for any closing remarks..

Again, I want to thank you for listening to us today and looking forward to sharing more with you in the very near future. Bye-bye..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..

End of Q&A:.