3Q22 Results: Revenue Jumps 124.5% Y/Y; Gross Margin Declines by 12.1% Y/Y; Production Ramped Up to Satisfy Growing Demand



KEY POINTS
  • Revenue jumped by 124.5% Y/Y to $4.3 million, compared with $1.9 million in 3Q21. June contributed to more than 50% of the revenue for the quarter as the company successfully ramped up production and effectively addressed the supply chain constraints that affected sales in April and May. Complete results can be accessed here.
  • Electrovaya expects that its revenue will more than double to $11 million in 4Q22 due to increased production, personnel, and inventory levels to satisfy the growing order book and anticipated future demand. This should enable the company to fulfill its FY22 revenue forecast of $21-25 million.
  • The United States accounted for ~97% ($4.19 million) of the total battery sales revenue, reflecting a growing interest in material handling batteries in the region. Electrovaya plans to invest in manufacturing facilities (post FY23) in the US to increase capacity and serve this rapidly growing market. The US Climate Agreement that lays out a $369 billion expenditure to supercharge clean energy will act as a strong pillar to accelerate the burgeoning batteries market.
  • The company’s gross margin decreased to 25.2% from 37.3% in 3Q21. The decline was primarily attributable to changes in the product mix, price hikes in raw materials, higher shipping and logistics costs, and currency fluctuations. Electrovaya is taking initiatives to mitigate inflationary pressures, such as increasing product sales prices and buying critical components for delivery in 2022 and 2023, effectively locking current component costs and preventing additional price hikes.
  • Electrovaya expects FY23 revenues above $42 million, which is twice the estimated revenues for FY22.
  • The company believes its available liquidity, $2.9 million of accounts receivable, conversion of $5 million of inventory into saleable products, and $4.9 million of inventory in process, for which deposits have been recorded in prepaid expenses, is adequate working capital to support the anticipated growth.
ESTIMATES

• Revenue jumped by 124.5% Y/Y to $4.3 million, compared with $1.9 million in 3Q21. June contributed to more than 50% of the revenue for the quarter as the company successfully ramped up production and effectively addressed the supply chain constraints that affected sales in April and May. Complete results can be accessed here.

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