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Innventure, Inc.(INV) - 2025 Q1 - Earnings Call Transcript
INVInnventure, Inc.(INV)2025-05-15 22:00

Financial Data and Key Metrics Changes - The first quarter revenue was 200million,primarilyfrommanagementfeesrelatedtotheInVentusESGfund,aligningwithexpectationsandpreviouscommunicationsaboutrevenuegrowthbeingweightedtowardsthesecondhalfoftheyear[38]−Generalandadministrativeexpenseswereapproximately200 million, primarily from management fees related to the InVentus ESG fund, aligning with expectations and previous communications about revenue growth being weighted towards the second half of the year [38] - General and administrative expenses were approximately 20 million, with significant components including non-cash equity-based compensation and professional service fees [39] - A non-cash goodwill adjustment of 233millionwasrecordedduetoadecreaseinthecompany′ssharepriceandmarketcapitalization[40]−EBITDAforthequarterwasalossofapproximately233 million was recorded due to a decrease in the company's share price and market capitalization [40] - EBITDA for the quarter was a loss of approximately 248 million, with adjusted EBITDA reflecting a loss of 21.8million[41]BusinessLineDataandKeyMetricsChanges−Excelsiusispositionedattheforefrontofthetwo−phasedirect−to−chipliquidcoolingmarket,whichisexpectedtogrowsignificantlyduetoincreasingdatacenterbudgetsdrivenbyAIandevolvingchiptechnology[10][15]−Thecurrentliquidcoolingmarketisestimatedat21.8 million [41] Business Line Data and Key Metrics Changes - Excelsius is positioned at the forefront of the two-phase direct-to-chip liquid cooling market, which is expected to grow significantly due to increasing data center budgets driven by AI and evolving chip technology [10][15] - The current liquid cooling market is estimated at 1.3 billion, growing at an annual rate of approximately 30%, projected to reach 5billionby2028[14][15]MarketDataandKeyMetricsChanges−Worldwidedatacenterspendingwasapproximately5 billion by 2028 [14][15] Market Data and Key Metrics Changes - Worldwide data center spending was approximately 450 billion in 2024, expected to exceed 1trillionby2029,creatingafavorableenvironmentforcriticalinfrastructureproviderslikeExcelsius[10]−Theoverwhelmingmajorityofdatacentersstilluseinefficientair−cooledsolutions,withsingle−phasewatercoolingtechnologiesrepresentingonlyasmallpercentageofinstallations[10]CompanyStrategyandDevelopmentDirection−Thecompanyaimstobuildenterprisesthatcanachieveaminimumof1 trillion by 2029, creating a favorable environment for critical infrastructure providers like Excelsius [10] - The overwhelming majority of data centers still use inefficient air-cooled solutions, with single-phase water cooling technologies representing only a small percentage of installations [10] Company Strategy and Development Direction - The company aims to build enterprises that can achieve a minimum of 1 billion in enterprise value, with Excelsius being a key focus due to its market potential [6] - Excelsius is developing relationships with hyperscalers, multinational OEMs, global resellers, and AI as a service providers to drive growth [21][29] - The company is focused on enhancing its manufacturing capacity and partnerships with global contract manufacturers to meet anticipated market demands [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that 2025 will represent an inflection point for revenue growth at Excelsius, driven by significant demand from large global players [37] - The company is optimistic about the future, citing a substantial increase in lead generation and engagement with potential customers since February [70][72] Other Important Information - The company has seen a notable increase in its strategic partner network, growing by nearly 200% since the start of 2025, indicating strong market interest [29] - The average proposal size has increased significantly, reflecting a shift towards full-scale production opportunities [30] Q&A Session Summary Question: What drove the white label agreement with the OEM? - The relationship was driven by overall market demand, not solely by hyperscaler engagement [47][49] Question: Will the potential inflection point be served largely through the white label agreement? - The company expects some volume from those agreements but emphasizes a broader pool of engaged customers [54][56] Question: Can you comment on the pros and cons of flow versus pool-based cooling? - Flow-based cooling offers more reliability and excess fluid availability compared to pool boiling, which can lead to operational issues [61][63] Question: Will NVIDIA mitigate hotspots in the next generation architecture? - The response was cautious due to non-disclosure agreements [65] Question: Can you discuss the increase in lead generation and fulfillment capabilities? - There has been a significant spike in activity since late February, with a paradigm shift in conversations towards deployment of two-phase cooling solutions [70][72]