Financial Data and Key Metrics Changes - In Q3 2023, total revenues were $132.3 million, reflecting a decrease compared to the same period last year and the previous five quarters [47] - Gross profit increased by 48% to $9 million compared to $6.1 million during the same period last year, with a consolidated gross margin of 6.8% compared to 3.3% in the prior year [49] - Adjusted EBITDA loss was $0.6 million, an improvement from a loss of $1.7 million in the prior year period, mainly driven by improvements within the Infrastructure segment [54] Business Line Data and Key Metrics Changes - Infrastructure segment revenues increased by 19% to $31.8 million compared to the prior year, driven by strong performance in electrical services and EV businesses [51] - Telecommunications segment revenues experienced a 37% year-over-year decline, resulting in $100.4 million, attributed to continued declines in wholesale voice volume [20] - Infrastructure gross margin increased to 25.8% from 19.2% in the prior year, while Telecommunications gross margin was 0.8%, a slight increase compared to the prior year [21][22] Market Data and Key Metrics Changes - The EV charging infrastructure business accounted for 42% of the $139 million backlog, showing significant growth compared to the previous year [25] - Backlog levels slightly increased to approximately $139 million at September 30, 2023, compared to $138 million at the end of Q2 2023 [53] Company Strategy and Development Direction - The company aims to generate positive adjusted EBITDA in the full year of 2024 and is focused on integrating products and services across its Infrastructure segment [4][29] - The acquisition of Greenspeed is expected to enhance service offerings and operational efficiencies, allowing the company to serve clients in 25 states [16][43] - A comprehensive strategic plan is being developed, including a thorough evaluation of business segments and competitive analysis [40] Management Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the EV market due to higher interest rates and a volatile stock market but sees opportunities in addressing the lack of EV charging infrastructure [35] - The company remains optimistic about achieving positive adjusted EBITDA for Q1 2024 and the full year of 2024, supported by a strong backlog and diligent cost management [29][78] Other Important Information - The company has $57.2 million in cash, cash equivalents, and marketable securities, primarily for operations and debt service [57] - The integration of Greenspeed is on track to be completed by Q3 2024, with ongoing identification of efficiencies and sales opportunities [82] Q&A Session Summary Question: What types of electrical contracting jobs does Charge Enterprises work on? - Charge Enterprises offers a diversified portfolio of services, including projects with local and state governments, universities, healthcare systems, and stadiums, with the recent acquisition of Greenspeed expanding service reach [30] Question: Can dealerships get government funding for public EV charging infrastructure? - Dealers have a chance of getting funding for public charging stations, but most are not installing fast charging available to the public [60] Question: Is there a change in outlook regarding EV charging deployment expectations due to the interest rate environment? - Higher interest rates and market volatility may cause hesitation for EV buyers, but the company views the lack of EV charging infrastructure as an opportunity [35] Question: What is the outlook for the Telecommunications segment? - The company anticipates continued decline in wholesale voice volume but expects SMS capabilities to contribute positively to the Telecommunications segment in 2024 [74] Question: How is the integration of Greenspeed progressing? - The integration is going well, with efficiencies being identified and the ability to execute projects expanded from 13 to 25 states [76]
Charge(CRGE) - 2023 Q3 - Earnings Call Transcript