Core Insights - Microvast Holdings, Inc. (NASDAQ: MVST) has been identified as a potential investment opportunity due to its revenue growth of 15% or more in the previous year and expected future growth [1] Group 1 - The company is categorized as a small to mid-cap firm, which is often sought after for investment due to their growth potential [1]

Group 1 - U.S. stock futures are slightly lower, with Dow futures down approximately 0.1% [1] - Celanese Corporation reported second-quarter financial results and provided third-quarter adjusted EPS guidance below market estimates, expecting earnings of $1.10 to $1.40 per share compared to estimates of $1.73 per share [1] - Celanese shares fell 15.5% to $40.00 in pre-market trading following the announcement [1] Group 2 - BigBear.ai Holdings, Inc. experienced a decline of 30.8% to $4.91 in pre-market trading after reporting worse-than-expected second-quarter results and cutting FY25 sales guidance [4] - PubMatic, Inc. shares dropped 28.7% to $7.55 in pre-market trading after issuing Q2 results and Q3 sales guidance below estimates [4] - Fluence Energy, Inc. shares dipped 14.3% to $7.83 in pre-market trading after mixed third-quarter financial results [4] - Archer Aviation Inc. fell 9.9% to $8.60 in pre-market trading due to a wider-than-expected quarterly loss [4] - Microvast Holdings, Inc. shares decreased by 10.2% to $2.72 after reporting disappointing quarterly sales [4] - TAT Technologies Ltd. saw a decline of 7.6% to $34.25 following weak quarterly sales [4]

[Financial Performance Highlights](index=1&type=section&id=Financial%20Performance%20Highlights) The company reported strong financial improvements in Q2 and year-to-date 2025, marked by significant revenue growth, gross margin expansion, and a shift to positive adjusted EBITDA [Second Quarter 2025 (Q2 2025) Performance](index=1&type=section&id=Second%20Quarter%202025%20%28Q2%202025%29%20Performance) Microvast reported record revenue of $91.3 million for Q2 2025, a 9.2% year-over-year increase. Gross margin expanded to 34.7% from 32.5% in Q2 2024. While the company recorded a GAAP net loss of $106.1 million, it achieved a significant turnaround with a positive non-GAAP adjusted EBITDA of $25.9 million, compared to a negative $78.4 million in the prior-year quarter Q2 2025 vs. Q2 2024 Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $91.3 million | $83.7 million | +9.2% YoY | | **Gross Margin** | 34.7% | 32.5% | +2.2 p.p. YoY | | **Operating Expenses** | $16.5 million | $126.7 million | -87.0% YoY | | **Net Loss (GAAP)** | ($106.1 million) | ($101.6 million) | Increased Loss | | **Net Loss per Share (GAAP)** | ($0.33) | ($0.32) | Increased Loss | | **Adjusted EBITDA (Non-GAAP)** | $25.9 million | ($78.4 million) | Significant Improvement | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $16.3 million | ($87.9 million) | Significant Improvement | - Cash, cash equivalents, and restricted cash increased to **$138.8 million** as of June 30, 2025, up from **$104.5 million** as of June 30, 2024, and **$109.6 million** as of December 31, 2024[6](index=6&type=chunk) [Year-to-Date 2025 (YTD 2025) Performance](index=1&type=section&id=Year-to-Date%202025%20%28YTD%202025%29%20Performance) For the first six months of 2025, revenue grew 25.9% year-over-year to $207.8 million. Gross margin saw a substantial increase to 36.0% from 26.9% in the same period last year. The company significantly reduced its GAAP net loss to $44.3 million from $126.4 million and achieved a positive adjusted EBITDA of $54.4 million, reversing a loss of $82.1 million in YTD 2024 YTD 2025 vs. YTD 2024 Financial Highlights | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $207.8 million | $165.0 million | +25.9% YoY | | **Gross Margin** | 36.0% | 26.9% | +9.1 p.p. YoY | | **Operating Expenses** | $42.0 million | $167.5 million | -74.9% YoY | | **Net Loss (GAAP)** | ($44.3 million) | ($126.4 million) | Reduced Loss | | **Net Loss per Share (GAAP)** | ($0.14) | ($0.40) | Reduced Loss | | **Adjusted EBITDA (Non-GAAP)** | $54.4 million | ($82.1 million) | Significant Improvement | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $35.6 million | ($100.9 million) | Significant Improvement | [Business Outlook and Corporate Information](index=2&type=section&id=Business%20Outlook%20and%20Corporate%20Information) The company maintains its 2025 revenue guidance and raises gross margin targets, while also providing corporate information and strategic priorities [2025 Full-Year Outlook](index=2&type=section&id=2025%20Full-Year%20Outlook) Microvast maintains its 2025 revenue guidance of $450 million to $475 million, representing 18% to 25% year-over-year growth. The company has raised its full-year gross margin target to a range of 30% to 32%. Key operational goals include completing the Huzhou Phase 3.2 capacity expansion by year-end and focusing on new customer acquisition Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | **Revenue Growth** | 18% to 25% YoY | | **Revenue** | $450 million to $475 million | | **Gross Margin** | Updated to 30% to 32% | - Strategic priorities for 2025 include: - Completing the installation and commissioning of production equipment for the Huzhou Phase 3.2 expansion to meet strong customer demand[11](index=11&type=chunk) - Focusing on securing new customer wins to expand market presence in new and electrifying segments[11](index=11&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) Microvast will host a conference call and webcast on August 11, 2025, to discuss its financial results. The company positions itself as a global leader in battery technologies for electric vehicles and energy storage, with a history of over 18 years and more than 810 patents and patent applications - A conference call and webcast to discuss financial results is scheduled for August 11, 2025, at 4:00 p.m. Central Time[9](index=9&type=chunk) - Microvast, founded in 2006, is a global provider of battery technologies for EVs and energy storage solutions, holding over **810 patents** and patent applications[10](index=10&type=chunk)[12](index=12&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) Unaudited consolidated financial statements detail the company's balance sheet, income, and cash flow positions for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Microvast's total assets stood at **$1,004,692 thousand**, with total liabilities at **$648,562 thousand**. The company's cash position, including cash, cash equivalents, and restricted cash, improved to **$138,820 thousand** from **$109,601 thousand** at the end of 2024. Total equity decreased to **$356,130 thousand** from **$387,895 thousand** over the same period Key Balance Sheet Items (in thousands of U.S. dollars) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash, cash equivalents & restricted cash** | $138,820 | $109,601 | | **Total Current Assets** | $434,591 | $428,026 | | **Total Assets** | $1,004,692 | $951,867 | | **Total Current Liabilities** | $524,663 | $330,153 | | **Total Liabilities** | $648,562 | $563,972 | | **Total Equity** | $356,130 | $387,895 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported revenues of **$91,339 thousand** and a gross profit of **$31,723 thousand**. A significant change in the fair value of warrant liability and convertible loan of **$121,500 thousand** contributed heavily to the net loss of **$106,058 thousand**. For the six-month period, revenues were **$207,830 thousand** with a net loss of **$44,268 thousand**, a substantial improvement from the **$126,381 thousand** loss in the prior year period Key Income Statement Items - Q2 (in thousands of U.S. dollars) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | $91,339 | $83,675 | | **Gross Profit** | $31,723 | $27,195 | | **Total operating expenses** | ($16,504) | ($126,671) | | **Profit/(loss) from operations** | $16,214 | ($98,741) | | **Net loss** | ($106,058) | ($101,556) | Key Income Statement Items - YTD (in thousands of U.S. dollars) | Account | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Revenues** | $207,830 | $165,026 | | **Gross Profit** | $74,739 | $44,420 | | **Total operating expenses** | ($42,004) | ($167,548) | | **Profit/(loss) from operations** | $35,146 | ($121,859) | | **Net loss** | ($44,268) | ($126,381) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash generated from operating activities was **$44,323 thousand**, a significant improvement from **$2,142 thousand** in the same period of 2024. Net cash used in investing activities was **$5,078 thousand**, while financing activities used **$6,799 thousand**. The company's total cash, cash equivalents, and restricted cash increased by **$29,219 thousand** during the period, ending at **$138,820 thousand** Cash Flow Summary - Six Months Ended June 30 (in thousands of U.S. dollars) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash from operating activities** | $44,323 | $2,142 | | **Net cash used in investing activities** | ($5,078) | ($7,442) | | **Net cash (used in)/from financing activities** | ($6,799) | $28,488 | | **Increase in cash, cash equivalents and restricted cash** | $29,219 | $16,295 | | **Cash, cash equivalents and restricted cash at end of period** | $138,820 | $104,484 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP to non-GAAP financial measures, including gross profit, operating expenses, net profit, and EBITDA, to offer a clearer view of underlying performance [Gross Profit and Gross Margin Reconciliation](index=10&type=section&id=Gross%20Profit%20and%20Gross%20Margin%20Reconciliation) After adjusting for non-cash share-based compensation, the non-GAAP adjusted gross profit for Q2 2025 was **$31,785 thousand** (34.8% margin), compared to **$28,676 thousand** (34.3% margin) in Q2 2024. For the six-month period, non-GAAP adjusted gross profit was **$74,863 thousand** (36.0% margin), up from **$47,039 thousand** (28.5% margin) in the prior year Non-GAAP Gross Profit Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Gross Profit (GAAP)** | $31,723 | $27,195 | $74,739 | $44,420 | | **Adjusted Gross Profit (Non-GAAP)** | $31,785 | $28,676 | $74,863 | $47,039 | | **Adjusted Gross Margin (Non-GAAP)** | 34.8% | 34.3% | 36.0% | 28.5% | [Operating Expenses Reconciliation](index=11&type=section&id=Operating%20Expenses%20Reconciliation) GAAP operating expenses for Q2 2025 were **$16,504 thousand**, a sharp decrease from **$126,671 thousand** in Q2 2024, primarily due to a large impairment loss in the prior year. After excluding non-cash share-based compensation, non-GAAP adjusted operating expenses were **$15,720 thousand** for the quarter Non-GAAP Operating Expenses Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating Expenses (GAAP)** | ($16,504) | ($126,671) | ($42,004) | ($167,548) | | **Adjusted Operating Expenses (Non-GAAP)** | ($15,720) | ($116,022) | ($40,579) | ($146,170) | [Net Loss to Adjusted Net Profit/(Loss) Reconciliation](index=12&type=section&id=Net%20Loss%20to%20Adjusted%20Net%20Profit%2F%28Loss%29%20Reconciliation) The company reconciled its Q2 2025 GAAP net loss of **$106,058 thousand** to a non-GAAP adjusted net profit of **$16,309 thousand**. This adjustment primarily accounts for a **$121,500 thousand** change in the fair value of warrant liability and convertible loan. This represents a significant turnaround from a non-GAAP adjusted net loss of **$87,858 thousand** in Q2 2024 Non-GAAP Net Profit/(Loss) Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss (GAAP)** | ($106,058) | ($101,556) | ($44,268) | ($126,381) | | **Adjusted Net Profit/(Loss) (Non-GAAP)** | $16,309 | ($87,858) | $35,642 | ($100,858) | | **Adjusted Net Profit/(Loss) per Share** | $0.05 | ($0.28) | $0.11 | ($0.32) | [Net Loss to EBITDA and Adjusted EBITDA Reconciliation](index=13&type=section&id=Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Microvast's non-GAAP adjusted EBITDA for Q2 2025 was a positive **$25,881 thousand**, a substantial improvement from a negative **$78,375 thousand** in Q2 2024. For the first six months of 2025, adjusted EBITDA was **$54,402 thousand**, compared to a loss of **$82,098 thousand** in the prior-year period. The reconciliation from GAAP net loss includes adjustments for interest, taxes, depreciation, amortization, changes in fair value of warrants/loans, and share-based compensation Non-GAAP Adjusted EBITDA Reconciliation (in thousands of U.S. dollars) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Loss (GAAP)** | ($106,058) | ($101,556) | ($44,268) | ($126,381) | | **EBITDA (Non-GAAP)** | ($96,486) | ($92,073) | ($25,508) | ($107,621) | | **Adjusted EBITDA (Non-GAAP)** | $25,881 | ($78,375) | $54,402 | ($82,098) | [Important Disclosures](index=3&type=section&id=Important%20Disclosures) Important disclosures include cautionary statements regarding forward-looking information and explanations of the company's use of non-GAAP financial measures [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements regarding future operations, financial position, growth, and business strategy. These statements are subject to significant business, economic, and competitive uncertainties. The company lists numerous risk factors that could cause actual results to differ materially, including the ability to remain a going concern, achieve profitability, manage manufacturing capacity, and navigate market competition and geopolitical events - Forward-looking statements cover future results, operational performance, growth strategy, and demand for products, but are subject to significant risks and uncertainties[13](index=13&type=chunk) - Key risks include the ability to remain a going concern, achieve profitability, manage manufacturing, competition, raw material prices, and geopolitical events[14](index=14&type=chunk)[15](index=15&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Microvast uses non-GAAP financial measures such as adjusted gross profit, adjusted EBITDA, and adjusted net profit to provide supplemental information on its financial performance. Management believes these measures help illustrate underlying business trends by excluding certain items, like non-cash stock-based compensation and changes in warrant valuation, that may not be indicative of recurring core operations. The company acknowledges the limitations of these measures and provides reconciliations to the most comparable GAAP figures - The company discloses non-GAAP measures to supplement GAAP results and provide additional information on financial performance[19](index=19&type=chunk) - Management uses these non-GAAP metrics for financial and operational decision-making, to evaluate period-to-period comparisons, and to assess underlying business trends[22](index=22&type=chunk) - Key adjustments to derive non-GAAP figures include excluding non-cash stock-based compensation, depreciation, amortization, and changes in the fair value of warrants and convertible loans[21](index=21&type=chunk)

Company Performance - Microvast Holdings, Inc. reported quarterly earnings of $0.05 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, compared to a loss of $0.21 per share a year ago, representing an earnings surprise of +400.00% [1] - The company posted revenues of $91.34 million for the quarter ended June 2025, which missed the Zacks Consensus Estimate by 13.36%, compared to year-ago revenues of $83.68 million [2] - Over the last four quarters, Microvast has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - Microvast shares have increased approximately 39.6% since the beginning of the year, outperforming the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $116.69 million, and for the current fiscal year, it is $0.13 on revenues of $466.69 million [7] Industry Outlook - The Technology Services industry, to which Microvast belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry performance can significantly impact stock performance [5][8]

Financial Data and Key Metrics Changes - The company reported a record second quarter revenue of $91,300,000, representing a 9.2% year-over-year growth from $83,700,000 [9][20] - Gross margin improved to 34.7%, a 2.2 percentage point increase from 32.5% in the same period last year [9][21] - Adjusted net profit reached $16,300,000, a significant improvement from an adjusted net loss of $87,900,000 last year [22][23] - Positive adjusted EBITDA of $25,900,000 was reported, a turnaround from a negative adjusted EBITDA of $78,400,000 in Q2 2024 [23] Business Line Data and Key Metrics Changes - The company achieved an operating profit of $16,200,000 in the second quarter, indicating effective operational execution [9] - Year-to-date revenue increased by 25.9% to $208,000,000, driven by an increase of approximately 300 megawatt hours in sales volume [20] Market Data and Key Metrics Changes - EMEA business accounted for 43% of quarterly revenue, showing a slight year-over-year decline but a 31% improvement over the six-month period [24] - The U.S. revenue share increased from 2% to 5%, indicating progress with domestic customers [24] - APAC region grew by 34% in the quarter and 13% year-to-date compared to 2024, targeting higher margin opportunities [25] Company Strategy and Development Direction - The company is focused on continuous innovation, strategic growth objectives, and expanding capacity to meet growing customer demand [11][12] - Significant investments are being made to commercialize current and future advanced products, aiming for sustainable growth and profitability [12][13] - The Phase 3.2 expansion is expected to add about two gigawatt hours of annual production capacity, aligning with market demand [14][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a year-over-year revenue increase of 18% to 25% for the remainder of 2025, projecting revenue between $450,000,000 and $475,000,000 [29] - The company is committed to maintaining strong margins and expanding market reach through innovation and strategic collaboration [31] - Despite global dynamics and localized market pressures, proactive cost management positions the company for continued growth [31] Other Important Information - The company generated positive operating cash flow of $44,300,000 for the six-month period, reflecting disciplined growth strategies [25] - Total cash, cash equivalents, and restricted cash amounted to $138,800,000 at the end of the quarter, showcasing financial strength [26] Q&A Session Summary Question: What is the outlook for revenue growth in 2025? - The company is targeting a year-over-year revenue increase of 18% to 25%, projecting revenue between $450,000,000 and $475,000,000 [29] Question: How is the company addressing market pressures? - Management highlighted proactive cost management and a strategic focus on high-demand sectors as key to navigating market pressures [31]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Unaudited H1 2025 financial statements reflect improved operations, positive cash flow, and alleviated going concern doubts [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased, liabilities rose due to a new convertible loan, and stockholders' equity decreased | Balance Sheet Items | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total Current Assets** | 434,591 | 428,026 | | **Total Assets** | **1,004,692** | **951,867** | | **Total Current Liabilities** | 524,663 | 330,153 | | **Total Liabilities** | **648,562** | **563,972** | | **Total Equity** | **356,130** | **387,895** | - A significant change in liabilities is the appearance of a convertible loan measured at fair value, which is classified as a current liability of **$181.5 million** as of June 30, 2025, compared to a non-current liability of **$104.6 million** at the end of 2024[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) H1 2025 operations show increased revenue, improved gross profit, and operating profit, offset by fair value losses | Metric | Three Months Ended June 30, 2025 ($ thousands) | Three Months Ended June 30, 2024 ($ thousands) | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 91,339 | 83,675 | 207,830 | 165,026 | | **Gross Profit** | 31,723 | 27,195 | 74,739 | 44,420 | | **Profit/(Loss) from Operations** | 16,214 | (98,741) | 35,146 | (121,859) | | **Net Loss** | (106,058) | (101,556) | (44,268) | (126,381) | | **Basic and Diluted EPS** | ($0.33) | ($0.32) | ($0.14) | ($0.40) | - A significant impairment loss of **$88.0 million** was recorded in the three and six months ended June 30, 2024, which did not recur at the same scale in 2025 (**$1.4 million**), contributing to the improved operating profit[18](index=18&type=chunk) - Changes in the fair value of warrant liability and convertible loan resulted in a substantial loss of **$121.5 million** for the three months ended June 30, 2025, and **$78.4 million** for the six months ended June 30, 2025, heavily impacting the net loss[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw significant positive operating cash flow, with overall cash and equivalents increasing to **$138.8 million** | Cash Flow Activity | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash generated from operating activities** | 44,323 | 2,142 | | **Net cash used in investing activities** | (5,078) | (7,442) | | **Net cash (used in)/ generated from financing activities** | (6,799) | 28,488 | | **Increase in cash, cash equivalents and restricted cash** | 29,219 | 16,295 | | **Cash, cash equivalents and restricted cash at end of period** | 138,820 | 104,484 | - The positive operating cash flow was driven by improved operational performance and non-cash charges, including a **$78.4 million** change in fair value of warrant liability and convertible loan, despite a net loss of **$44.3 million**[33](index=33&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, going concern alleviation, revenue sources, convertible loan, and legal proceedings - The company concluded that it is probable that management's plans, including forecasted cash inflow from operations and refinancing of short-term debt, will alleviate the substantial doubt about its ability to continue as a going concern[50](index=50&type=chunk)[51](index=51&type=chunk) | Geographic Region | Revenue for Six Months Ended June 30, 2025 ($ thousands) | Revenue for Six Months Ended June 30, 2024 ($ thousands) | | :--- | :--- | :--- | | China | 78,969 | 60,474 | | Other Asia & Pacific | 18,740 | 25,665 | | Europe | 98,935 | 75,666 | | U.S. | 11,186 | 3,221 | | **Total** | **207,830** | **165,026** | - The company is involved in multiple legal proceedings, including corporate governance actions, securities litigation, and other contract disputes; the potential financial exposure cannot be reasonably estimated at this time[125](index=125&type=chunk)[129](index=129&type=chunk)[140](index=140&type=chunk) - On May 28, 2024, the company entered into a **$25 million** convertible loan agreement with its CEO, Mr. Yang Wu, resulting in a recorded loss of **$78.2 million** on fair value changes for the six months ended June 30, 2025[114](index=114&type=chunk)[119](index=119&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 performance, strategic initiatives, and liquidity, noting going concern alleviation [Business and Strategy](index=36&type=section&id=Business%20and%20Strategy) Microvast specializes in advanced battery technology, pivoting to U.S. LFP production and advancing ASSB - The company is strategically pivoting its Clarksville, TN facility from NMC to LFP battery production to better serve the U.S. ESS market, citing lower costs, enhanced safety, and better environmental performance[157](index=157&type=chunk)[158](index=158&type=chunk) - In January 2025, Microvast announced a breakthrough in all-solid-state battery (ASSB) technology, demonstrating a 48-volt monolithic cell prototype that eliminates liquid electrolytes and offers improved energy density and safety[160](index=160&type=chunk) - As of the end of Q2 2025, the company's order backlog stood at **$320.0 million**, with most orders expected to be fulfilled in 2025 and 2026[161](index=161&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) H1 2025 saw revenue growth, improved gross margin, and operating profit, offset by fair value losses | Metric | Six Months Ended June 30, 2025 ($ thousands) | Six Months Ended June 30, 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | 207,830 | 165,026 | 25.9% | | **Gross Profit** | 74,739 | 44,420 | 68.3% | | **Gross Margin** | 36.0% | 26.9% | N/A | | **Profit/(Loss) from Operations** | 35,146 | (121,859) | (128.8)% | | **Net Loss** | (44,268) | (126,381) | (65.0)% | - The increase in revenue for the first six months of 2025 was primarily driven by a significant increase in sales volume from **654.9 MWh** in 2024 to **947.2 MWh** in 2025[205](index=205&type=chunk) - General and administrative expenses for the six-month period decreased by **$32.9 million** (**69.5%**), mainly due to a **$14.8 million** reduction in share-based compensation and a **$10.9 million** positive foreign exchange impact[208](index=208&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by cash and positive operating cash flow, but additional financing is needed for U.S. expansion - Management has concluded that it is probable that its plans will alleviate substantial doubt about the company's ability to continue as a going concern, based on positive operating cash flow, a strong order backlog, and debt refinancing capabilities[217](index=217&type=chunk)[224](index=224&type=chunk) - The company's cash position as of June 30, 2025, was **$138.8 million**, including **$67.4 million** held by Chinese subsidiaries and **$17.3 million** by European subsidiaries, which are not readily available for U.S. operations[213](index=213&type=chunk)[214](index=214&type=chunk) - The Clarksville, TN expansion project requires additional financing to resume progress; the company is seeking alternative capital sources as proceeds from the Business Combination were insufficient and cash cannot be repatriated from China[226](index=226&type=chunk)[227](index=227&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from international trade, interest rates, and foreign currency, notably Renminbi and Euro - The company faces significant foreign currency exchange risk, with a large portion of transactions in Chinese Renminbi and Euros; a hypothetical **10%** adverse change in exchange rates could have resulted in a loss of **$16.4 million** as of June 30, 2025[242](index=242&type=chunk)[243](index=243&type=chunk) - The company is exposed to interest rate risk through its project finance loans in China and a convertible loan in the U.S., which are tied to the Loan Prime Rate and Term SOFR, respectively[240](index=240&type=chunk) - Ongoing trade developments between the U.S. and China, such as tariffs and import/export controls, may impact the company's ability to rely on its manufacturing centers in China[239](index=239&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of June 30, 2025, due to a material weakness in IT general controls; remediation is underway - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of June 30, 2025[249](index=249&type=chunk) - A material weakness persists related to information technology general controls (GITC) for the ERP system, specifically concerning developer access and monitoring of privileged users[252](index=252&type=chunk) - The company is executing a remediation plan that includes removing inappropriate system access and establishing more robust monitoring processes for user activities and permissions[253](index=253&type=chunk)[256](index=256&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with uncertain outcomes and unestimable potential financial impact - The company is defending against various legal proceedings, but the outcome and potential financial impact cannot be reasonably estimated at this stage[259](index=259&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for FY2024 have occurred - The report refers to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, indicating no material changes[260](index=260&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) Yixin Pan adopted a Rule 10b5-1 trading plan to sell shares, with no other similar plans by directors or officers - Yixin Pan adopted a Rule 10b5-1 trading plan on June 11, 2025, to sell up to **12,595** shares of common stock[264](index=264&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with or incorporated by reference into the Form 10-Q, including key agreements and certifications

Core Insights - Microvast Holdings, Inc. reported a record revenue of $91.3 million for Q2 2025, representing a 9.2% year-over-year increase, alongside a gross margin expansion to 34.7% [2][5][6] - The company recorded a GAAP net loss of $106.1 million but achieved a positive adjusted EBITDA of $25.9 million, indicating a focus on profitability and operational efficiency [2][6][13] Financial Results for Q2 2025 - Revenue reached $91.3 million, up from $83.7 million in Q2 2024, a 9.2% increase [5][6] - Gross margin improved to 34.7% from 32.5% in Q2 2024, with a non-GAAP adjusted gross margin of 34.8% [5][6] - Operating expenses decreased significantly to $16.5 million from $126.7 million in Q2 2024 [6] - Non-GAAP adjusted net profit was $16.3 million compared to a loss of $87.9 million in Q2 2024 [6] - Non-GAAP adjusted EBITDA was positive at $25.9 million, a significant improvement from a negative $78.4 million in Q2 2024 [6] Financial Results for Six Months Ended June 30, 2025 - Total revenue for the first half of 2025 was $207.8 million, up 25.9% from $165.0 million in the same period of 2024 [6] - Gross margin for YTD 2025 increased to 36.0% from 26.9% in YTD 2024 [6] - Net loss for the first half of 2025 was $44.3 million, a reduction from a loss of $126.4 million in YTD 2024 [6] - Non-GAAP adjusted net profit for the first half of 2025 was $35.6 million compared to a loss of $100.9 million in YTD 2024 [6] 2025 Outlook - The company maintains a target revenue growth of 18% to 25% year-over-year, with revenue guidance of $450 million to $475 million for the full year 2025 [13] - Targeted gross margin has been updated from 30% to 32% [13] - The company is focused on expanding production capacity to meet strong customer demand, with completion of the Huzhou Phase 3.2 expansion expected by year-end [13]

Financial Performance - Q2 2025 revenue reached $91.3 million, a 9.2% year-over-year increase[18] - Q2 2025 gross margin improved to 34.7%, a 2.2 percentage point increase year-over-year[18] - Adjusted EBITDA for Q2 2025 was $25.9 million[20] - The company achieved an adjusted net profit of $16.3 million for the quarter after accounting for non-cash items[57] Regional Revenue - APAC revenue for Q2 2025 was $47.658 million, a 34% increase year-over-year[60] - EMEA revenue for Q2 2025 was $38.885 million, a 17% decrease year-over-year[60] - USA revenue for Q2 2025 was $4.796 million, a 276% increase year-over-year[60] Cash Flow and Outlook - The company ended the period with $138.8 million in cash, including restricted cash, a $29.2 million increase[66] - The company is targeting revenue growth of 18-25% for 2025[70] - Revenue guidance for 2025 is $450-475 million[71] - The company is targeting a gross margin of 30-32% for 2025[72]

Core Viewpoint - Lithium battery concept stocks experienced a strong performance, driven by news of a significant supply disruption from a major player in the industry, CATL, which has temporarily halted operations at a mining project in China [1] Group 1: Stock Performance - Lithium Americas (LAC.US) rose over 10% - Albemarle (ALB.US) increased by more than 9% - Sociedad Química y Minera de Chile (SQM.US) gained over 7% - Microvast (MVST.US) saw an increase of over 6% [1] Group 2: Supply Disruption - CATL announced the suspension of a large mining project in Yichun, Jiangxi Province, due to the expiration of its mining license [1] - The company plans to resume production as soon as it obtains the necessary approvals [1] Group 3: Analyst Insights - Citigroup analyst Kate McCutcheon stated that the reduction of approximately 9,000 tons of lithium supply per month is not expected to cause a hard supply shortage, but it is likely to boost market sentiment in the short term [1] - Analyst Jack Shang estimated that the sentiment surrounding the supply disruption could drive lithium prices above $11,000 per ton in the coming days [1]

Core Viewpoint - Lithium battery concept stocks experienced a strong rally, driven by news of a significant supply disruption from a major player in the industry, CATL, which has temporarily halted operations at a large mining project in China [1] Group 1: Stock Performance - Lithium Americas (LAC.US) surged over 10% - Albemarle (ALB.US) increased by more than 9% - Sociedad Química y Minera de Chile (SQM.US) rose over 7% - Microvast (MVST.US) gained more than 6% [1] Group 2: Supply Disruption - CATL announced the suspension of operations at its mining site in Yichun, Jiangxi Province, due to the expiration of its mining license [1] - The company plans to resume production as soon as it obtains the necessary approvals [1] Group 3: Analyst Insights - Citigroup analyst Kate McCutcheon noted that the reduction of approximately 9,000 tons of lithium supply per month is not expected to cause a hard supply shortage, but it is likely to boost market sentiment in the short term [1] - Analyst Jack Shang estimated that the sentiment from the supply disruption could drive lithium prices above $11,000 per ton in the coming days [1]