Microvast Holdings, Inc. Reports Record Revenue Growth

Microvast Holdings, Inc. ((MVST)) has held its Q3 earnings call. Read on for the main highlights of the call.

Microvast Holdings, Inc. Reports Record Revenue Growth Amid Strategic Advancements

The latest earnings call from Microvast Holdings, Inc. was marked by a generally positive sentiment, underscored by record revenue growth, improved profit margins, and strategic partnerships. Despite challenges such as increased operating expenses and a reported GAAP net loss, the company showcased strong operational results and significant strategic progress.

Record Third Quarter Revenue

Microvast Holdings, Inc. achieved a record third quarter revenue of $123.3 million, representing a 21.6% increase compared to the previous year. This milestone highlights the company’s robust growth trajectory and its ability to capture market opportunities effectively.

Improved Gross Profit Margin

The company reported an improved gross profit margin of 37.6%, a 4.4 percentage point increase from the same period last year. This improvement reflects Microvast’s successful efforts in optimizing its operational efficiency and cost management.

Operational Profit Achieved

Microvast reported an operating profit of $13 million for the third quarter, with an adjusted net profit of $11.9 million and an adjusted EBITDA of $21.9 million. These figures underscore the company’s operational strength and financial health.

Phase 3.2 Expansion Near Completion

The Huzhou phase 3.2 expansion is nearing completion, expected to add up to two gigawatt-hours of annual production capacity by Q1 2026. This expansion is pivotal for meeting the growing market demand and enhancing Microvast’s production capabilities.

Partnership with Skoda Group

Microvast has established a partnership with Skoda Group for applications in rail and public transport, validating its technology in high-safety use cases. This strategic partnership is expected to bolster Microvast’s position in the transportation sector.

Positive Cash Flow

The company generated a positive operating cash flow of $59.5 million for the nine-month period, demonstrating its ability to maintain liquidity and fund its operations effectively.

Increased Revenue in EMEA

Revenue from the EMEA region accounted for 64% of the quarterly revenue, up from 59% year-over-year. This increase highlights the region’s growing importance in Microvast’s revenue mix.

Increased Operating Expenses

Operating expenses rose to $33.5 million for the quarter, a 22% increase year-over-year, primarily due to exchange loss and litigation expenses. Despite this increase, the company managed to achieve positive operational results.

GAAP Net Loss

Microvast reported a GAAP net loss of $1.5 million for the quarter. However, the adjusted net profit was positive, indicating the company’s underlying financial strength.

Forward-Looking Guidance

Microvast Holdings, Inc. provided robust guidance for the remainder of the fiscal year, reaffirming its annual revenue target of $450 to $475 million. The company raised its full-year gross margin projection to 32% to 35%, reflecting successful margin expansion efforts. The phase 3.2 expansion at the Huzhou facility is on track for completion by year-end, with initial production expected in Q1 2026. Microvast anticipates continued sales growth and strategic partnerships, particularly in the EMEA region, and further revenue growth in The Americas.

In conclusion, Microvast Holdings, Inc.’s earnings call highlighted a positive outlook with record revenue growth and strategic advancements. Despite some challenges, the company demonstrated strong operational results and provided optimistic guidance for the future, positioning itself well to leverage global electrification trends and deliver long-term shareholder value.