Tritium, a leading provider of electric vehicle (EV) charging solutions, reported record revenue for the fiscal year ending June 30, 2023, achieving $185 million, a 115% increase year-over-year. The company also saw a significant improvement in its gross margin, which reached 4% for the first half of the calendar year. Tritium's Tennessee factory has successfully scaled up, hitting record unit production, and the company has secured new strategic customer partnerships. The company plans to launch its MyTritium software platform before the end of the year and is set to introduce a 400-kilowatt modular and scalable charger in 2024.
Key takeaways from the call:
- Tritium reported significant revenue growth, with sales orders reaching $146 million and a backlog of approximately $99 million.
- The company's production has increased significantly, with 7,800 units built for the fiscal year and 5,100 units built for the six-month period ending June 30.
- Tritium has secured financing commitments of up to $75 million to meet expected strong demand in 2024.
- The company has secured new customer partnerships, including a major European utility, a global fleet company, and a global automotive OEM.
- Tritium plans to offer a high-power 250-mile range addition in 10 minutes to appeal to public charging network operators and fleet customers.
- Tritium expects to achieve EBITDA positive in the first half of the next year.
During the earnings call, Tritium discussed the significant improvement in its financial performance over the past two years, attributing much of this to the ramp-up of its Tennessee facility. The company saw consistent growth in gross margin and expects this trend to continue. Tritium achieved a gross margin of 4% in the first half of the calendar year and aims to reach a guidance of 10% to 12% in the second half.
Tritium also mentioned that it has $140 million in inventory, which includes spare parts, finished goods, and chargers that are in transit. The company believes that remote monitoring services will be a significant source of revenue and plans to roll it out aggressively. The different customer segments, including fuel, fleet, and charging network, contribute to varying volumes and margins.
The company plans to adjust overhead and SG&A to align with sales forecasts. Tritium also mentioned its plan to address interest expenses and debt servicing, mentioning the possibility of converting some debt to equity and using cash generated from operations to pay down debt. The company has a supportive relationship with its debt providers.
Tritium's CEO, Jane Hunter, explained that the company's strong first-half revenue was partly due to delayed orders from the previous year. Production records were broken in May and June, but July and August saw lower production due to stock-taking and manufacturing production optimization activities. Hunter expressed confidence in the second half and mentioned strategic customers with imminent purchase orders, as well as ongoing negotiations with American CPOs.
Tritium's expected CapEx for 2023 is $7.95 million, with modest requirements for 2024. Hunter noted that the shift from backlog-driven to flow-driven orders may result in a slightly lower backlog entering 2024, as customers now provide forecasts and letters of intent instead of secured purchase orders. Despite this change, the company remains confident in its revenue and margin growth prospects.
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