Microvast (MVST) - 2025 Q2 - Quarterly Results

Financial Performance Highlights 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 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] Year-to-Date 2025 (YTD 2025) Performance 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 The company maintains its 2025 revenue guidance and raises gross margin targets, while also providing corporate information and strategic priorities 2025 Full-Year Outlook 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] - Focusing on securing new customer wins to expand market presence in new and electrifying segments[11] Corporate Information 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] - 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][12] Consolidated Financial Statements (Unaudited) 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 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 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 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 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 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 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 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 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 Important disclosures include cautionary statements regarding forward-looking information and explanations of the company's use of non-GAAP financial measures Forward-Looking Statements 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] - Key risks include the ability to remain a going concern, achieve profitability, manage manufacturing, competition, raw material prices, and geopolitical events[14][15] Non-GAAP Financial Measures Explanation 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] - 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] - 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]