NextNRG (NasdaqCM:EZFL) Q3 2025 Earnings Call November 17, 2025 08:30 AM ET Company ParticipantsJoel Kleiner - CFOSharon Cohen - Head of Investor RelationsMichael Farkas - CEO and, Executive ChairmanOperatorWelcome to the NextNRG Third Quarter 2025 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After today's session, we will conduct a question-and-answer session. If anyone should require operator assistance during the conference, please press star zero on your te ...

Financial Data and Key Metrics Changes - Revenue for Q3 2025 reached $22.9 million, representing a 232% year-over-year increase from $6.9 million in Q3 2024 and up from $19.7 million in Q2 2025 [12] - Gross profit margins expanded from 8% in Q2 to 11% in Q3, indicating improved operational efficiencies alongside revenue growth [12][13] - Operating loss for the quarter was $9 million, which included a $5.6 million non-cash stock-based compensation charge, while the adjusted operating loss was $3.4 million, down from $5.2 million in Q2 [12][13] Business Line Data and Key Metrics Changes - The company added an 11th new market, Fort Myers, Florida, contributing to increased gallons delivered and unlocking volume-based supplier discounts, which helped increase profit margins from 8% to 11% [5] - The energy division's pipeline includes projects for municipalities and commercial facilities, focusing on on-site power generation, advanced battery storage, and smart microgrid control systems [19][20] Market Data and Key Metrics Changes - The company is focusing on high-demand sectors such as healthcare and large-scale commercial facilities that require continuous power, reflecting a strategic shift towards reliability and resilience [6] - The demand for smart microgrids and distributed infrastructure is intensifying as energy needs grow, particularly in relation to AI and data centers [24] Company Strategy and Development Direction - The company aims to create a fully connected energy ecosystem that integrates generation, storage, distribution, and fueling, positioning itself as a leader in the energy transition [4][10] - Future strategies include deepening market presence with mobile fuel delivery and advancing renewable distributed infrastructure [11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the urgent need for expanded energy generation and infrastructure, emphasizing that the current grid cannot keep pace with accelerating demand [9][24] - The company is optimistic about its position to address energy challenges, with a focus on scaling operations and improving margins [10][26] Other Important Information - The company has taken steps to strengthen liquidity by refinancing its truck fleet and streamlining its debt profile, enhancing financial flexibility [15] - The CEO is now free from non-compete restrictions, allowing the company to fully engage in all forms of EV charging [17] Q&A Session Summary Question: Details on energy division projects - The energy division's pipeline includes projects for municipalities and commercial facilities, focusing on on-site power generation, advanced battery storage, and smart microgrid systems [19][20] Question: Sustainability of margin improvements - Margin expansion is sustainable due to structural changes in the business, including optimized routes and increased gallons delivered, which lower per-unit costs [22][23] Question: Impact of urgent energy demand on NextNRG - The growing demand for energy, especially related to AI and data centers, positions NextNRG favorably for providing integrated energy solutions [24] Question: Timeline for sustainable positive cash flow - The path to positive cash flow is linked to continued revenue growth, further margin expansion, and disciplined spending, with improvements expected as new markets mature [25][26]

Core Viewpoint - The State Council of China has issued measures to stimulate private investment, emphasizing the importance of private investment as a key indicator of economic vitality and aiming to create an environment where private capital can thrive [1][2]. Group 1: Policy Measures - The newly released measures include 13 targeted policies to enhance private investment, focusing on ensuring that private investors feel confident and capable of investing [1]. - The measures aim to expand market access for private investment in key sectors such as nuclear power, hydropower, and oil and gas pipelines, which have traditionally been dominated by state-owned enterprises [2][3]. Group 2: Investment Growth and Trends - In the first three quarters of the year, private investment in non-real estate projects grew by 2.1% year-on-year, with infrastructure investment increasing by 7% and manufacturing investment by 3.2% [2]. - The measures allow for private capital to hold more than 10% in qualifying projects, which is expected to significantly enhance the growth potential for private investment [3]. Group 3: Energy Sector Developments - The private economy in the energy sector has been expanding, with significant participation from private enterprises in new nuclear power projects and hydropower stations [4]. - The number of private electricity sales companies has reached over 2,400, accounting for nearly 60% of the total, indicating a robust growth in the private sector's role in energy distribution [5]. Group 4: Regulatory Environment - The government is working to lower entry barriers for private companies in the energy sector, with over 85% of electricity facility construction now involving private enterprises [6]. - New regulations are being implemented to ensure fair access to energy infrastructure for all market participants, promoting competition and transparency in the energy market [7][8].

Group 1 - The National Development and Reform Commission and the National Energy Administration released guidelines to promote the consumption and regulation of renewable energy, emphasizing the need for technological innovation in renewable energy consumption [1] - The guidelines highlight the integration of advanced technologies such as artificial intelligence, big data, and cloud computing as core supports for renewable energy consumption innovation [1] - The measures aim to enhance the electricity system's capacity for renewable energy consumption, regulatory resilience, and operational efficiency, laying a technical and institutional foundation for achieving carbon neutrality goals and building a new power system [1] Group 2 - Nanfang Technology focuses on digitalization of the power grid, flexible operation and maintenance, and diversified interaction between sources and loads, leveraging the "Silk Road InOS" operating system to form an industrial cluster for smart electricity and smart distribution [2] - Dongfang Electronics is comprehensively laying out distributed photovoltaic equipment, smart microgrids, integrated source-load-storage systems, centralized power generation, and energy management systems, positioning itself as a key technology supplier in the integrated source-load-storage and AI smart grid sectors [2]

Core Viewpoint - The development of smart microgrids in China has made significant progress in recent years, driven by supportive policies and practical applications across various sectors, although challenges remain in terms of regulations, business models, and market participation [1][2][3][4]. Policy Developments - The "Action Plan for Accelerating the Construction of a New Power System (2024-2027)" encourages the construction of smart microgrid projects tailored to local conditions [1]. - The National Energy Administration has recognized smart microgrids as a new type of resource aggregation entity, supporting their development in industrial enterprises and parks [1]. - In May 2025, the National Energy Administration included smart microgrids in the pilot directions for the construction of a new power system [1]. Practical Applications - Provinces like Jiangsu, Guangdong, and Shandong have launched numerous smart microgrid pilot projects across various scenarios, including residential, commercial, industrial parks, and islands [2]. - Industrial parks have utilized smart microgrids to achieve local consumption of renewable energy and reduce electricity costs, while islands have improved power supply stability and living conditions through these systems [2]. - The economic viability of smart microgrids is becoming apparent as the costs of renewable energy and storage decrease, leading to commercial applications [2]. Challenges - Existing policies lack clarity on property rights, operational models, and responsibility allocation for smart microgrids [2]. - There is a gap in top-level design, unified interface standards, and technical specifications, affecting equipment compatibility and system interoperability [2]. - A sustainable business model and mature operational model for smart microgrids are currently lacking, with few market participation cases and unclear trading mechanisms [2][4]. Recommendations for Development - It is essential to improve policies and regulations by establishing clear management methods for smart microgrid projects and developing a comprehensive technical standard and specification system [3]. - Innovative business models should be explored to broaden revenue channels for smart microgrid operators, including participation in ancillary service markets and demand response mechanisms [4]. - Establishing special subsidies and diversified financing channels is crucial to reduce investment costs and attract more social capital into smart microgrid projects [4].

Core Insights - The conference focused on the theme "Smart Microgrid, Green Future," bringing together experts, industry leaders, and government representatives to discuss new opportunities for the development of smart microgrids and support high-quality growth in the energy sector [1][2] Group 1: Conference Objectives and Structure - The conference aimed to create a dialogue platform across academia, industry, and commerce, addressing key topics such as cutting-edge technologies and operational models while promoting consensus and collaboration for the high-quality development of smart microgrids [2][3] - The event featured a "main forum + sub-forum" format, including work summaries, forward-looking discussions, keynote speeches, and high-level dialogues, with sub-forums focusing on "Intelligent Creation + Empowerment" [2] Group 2: Industry Development and Strategic Focus - The smart microgrid sector in China is entering a new phase characterized by policy empowerment, technological breakthroughs, and market activation, with an increasing demand for precise policy alignment, technical solutions, and collaborative efforts [1][2] - The China Energy Research Society's Smart Microgrid Committee aims to drive the industry towards high-quality development by focusing on policy execution, standard and market construction, technological innovation, and pilot demonstrations [3] Group 3: Practical Insights and Achievements - The conference showcased the practical achievements of State Grid Jiangsu Electric Power in promoting high-quality development of microgrids, highlighting the committee's role as a bridge in driving technological innovation and industry application [3] - Prior to the conference, experts and industry representatives conducted in-depth research at typical microgrid demonstration projects, gaining insights into advanced operational models and technical pathways for microgrid interaction with the grid [3]

Core Viewpoint - The 2025 Smart Microgrid Innovation Development Conference was held in Changzhou, focusing on the theme "Smart Microgrid Green Future," gathering experts and energy company representatives to discuss policy directions, technological frontiers, and business models [1] Group 1: Smart Microgrid Overview - Smart microgrids are defined as power systems composed of distributed energy sources and electrical loads that can operate both in grid-connected and island modes [1] - As of May this year, the installed capacity of renewable energy in Jiangsu Province has exceeded 100 million kilowatts, accounting for 46% of the total installed capacity in the province [1] Group 2: Policy and Project Development - Jiangsu is actively implementing the national high-quality development plan for distribution networks, planning to construct 137 microgrid projects covering five major scenarios: smart manufacturing, building energy efficiency, vehicle-grid interaction, park source-grid-load-storage coordination, and virtual power plants [1] - Currently, 86 projects have been completed in the province, with 13 cities coordinating local characteristics for advancement [1] Group 3: Case Study - Changzhou - Changzhou has been recognized as one of the first cities in the country to implement large-scale vehicle-grid interaction applications, achieving significant results in the construction of vehicle-grid interaction projects and serving as a demonstration model [1]

Core Insights - The conference on smart microgrid innovation and development was held in Changzhou, Jiangsu, focusing on the theme "Smart Microgrid, Green Future" and aimed to discuss new opportunities for the development of smart microgrids in the energy sector [1][3]. Group 1: Objectives and Goals - The Smart Microgrid Committee aims to support the national "dual carbon" strategy and promote green energy transition, focusing on technological innovation and application in smart microgrids [3]. - The conference is designed to create a dialogue platform across academia, industry, and commerce, addressing key topics such as cutting-edge technologies and operational models while responding to policy directions and enterprise needs [5]. Group 2: Achievements and Developments - The Smart Microgrid Committee highlighted its achievements in technology promotion and standardization, identifying development bottlenecks and outlining the industry's growth trajectory [7]. - The conference showcased the practical efforts and leading outcomes of State Grid Jiangsu Electric Power in advancing high-quality development of microgrids, emphasizing the committee's role as a bridge in promoting technological innovation and industry application [7]. Group 3: Conference Structure and Activities - The conference lasted one day and was structured as a "main forum + sub-forums" format, featuring key segments such as work summaries, forward-looking discussions, keynote speeches, and high-level dialogues [5]. - Prior to the conference, experts and industry representatives conducted in-depth research at typical microgrid demonstration projects, gaining insights into the technological pathways and advanced operational models of Jiangsu's microgrid interactions with the grid [7].

Core Viewpoint - The construction of smart microgrids in Hangzhou faces challenges such as weak corporate willingness, a single profit model, an incomplete market mechanism, and significant safety risks [2][3][7]. Group 1: Current Status and Challenges - Hangzhou's power supply reliability exceeds 99.998%, ensuring sufficient electricity supply and quality, leading companies to prioritize economic returns when investing in photovoltaic and energy storage systems [2][7]. - The current microgrid users in Zhejiang primarily rely on photovoltaic "self-use and surplus electricity online" and energy storage "peak-valley price difference" to save energy costs [2][7]. - The existing market mechanism is not fully developed, with microgrid users mainly depending on limited profit models, and other services like frequency regulation and system backup are not included in market transactions [7][9]. Group 2: Supportive Policies and Technical Standards - National and provincial policies encourage the construction of smart microgrid projects, including the "Action Plan for Accelerating the Construction of a New Power System (2024-2027)" and local implementation opinions that provide financial incentives for photovoltaic projects [4][5]. - Since 2016, over twenty national standards related to microgrids have been released, with ongoing revisions and the establishment of a comprehensive standard system covering various aspects of microgrid development [5]. Group 3: Pilot Projects and Future Directions - Several pilot projects have been initiated in Hangzhou, including the West Lake Aerospace Zero Carbon Smart Energy Center and other integrated demonstration projects [6]. - Future work will focus on identifying key application scenarios, optimizing development strategies based on pilot project experiences, and enhancing policy coordination to support microgrid development [9][10].

Group 1: Company Overview - The company specializes in the research, design, system integration, and investment operation of photovoltaic power stations, while also engaging in new energy technologies and products such as energy storage and smart microgrids [3] - Founded in 2009, the company has a strong foundation with founders from prestigious universities and extensive experience in the energy sector [3] - The company has successfully transitioned to focus on photovoltaic new energy development and has contributed to the rise of mountain photovoltaic projects in Southwest China [3][4] Group 2: Business Strategy and Innovations - The company is undergoing a comprehensive strategic transformation, integrating energy with AI, robotics, computing power, and new materials [4] - Collaborations with Ant Group aim to leverage AI in design and operational management, enhancing efficiency in energy services [4] - Development of third-generation AI smart battery swap robots and partnerships with leading universities and manufacturers to enhance operational capabilities [4] Group 3: Market Expansion and Performance - The company is targeting overseas markets for its energy storage business, with a focus on Europe and the Middle East, having established a subsidiary in Amsterdam [5] - The company aims to provide integrated "photovoltaic + energy storage" solutions, enhancing its competitive edge in international markets [5] - The main revenue source remains photovoltaic system integration, with confidence in profit targets for the upcoming year due to favorable national policies [7]