NeoVolta Inc. Common Stock 2026 Q4 Earnings Call

Thank you, operator, and good afternoon, everyone. Welcome to NeoVolta's fourth quarter and fiscal year 2026 earnings conference call. I'm Ardes Johnson, Chief Executive Officer of NeoVolta, and I'm joined today by our Chief Financial Officer, Jing Nealis. Before we begin, I would like to remind everyone that our remarks today will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from what we discuss today. Please refer to the safe harbor statement on slide 2 of our investor presentation, as well as the risk factors included in our most recent annual report on Form 10-K and other filings with the SEC. We undertake no obligation to update forward-looking statements except as required by law.

Before turning to the year, I want to welcome Jing to her first earnings call as NeoVolta's Chief Financial Officer. Jing joined the company in May and brings more than 20 years of experience across the energy transition, manufacturing, technology, capital formation, and operational scale-up. She joined NeoVolta at an important point in our evolution, and I'm pleased to have her with us today. Jing will review our financial results, balance sheet position, and capital allocation priorities shortly. Last week, we marked an important milestone with the official opening of our Pendergrass, Georgia, manufacturing facility. That event reflected the culmination of progress we have made in building a state-of-the-art battery energy storage factory. We are now transitioning from commissioning, completing final certifications, and will be moving to the execution of production and ramp up over the coming months. Fiscal year 2026 was a defining year for NeoVolta.

We completed the strategic transformation of the company from a residential battery storage business into a multi-market energy storage platform serving residential, commercial and industrial, and utility-scale markets. That transformation was built through deliberate execution. We launched NeoVolta Power, our domestic BESS manufacturing platform in Pendergrass, Georgia. We expanded our commercial and industrial route to market, and we continue developing the NV Wave modular residential product. We established a multi-gigawatt power long-term U.S.-manufactured lithium iron phosphate cell supply relationship with SK On, and we added key leadership and financing capabilities to support the company's next phase of growth. At the same time, the fourth quarter was difficult for the residential storage market. Revenue reflected a sharp decline in traditional installer channel demand following changes in the federal incentive environment beginning in January of 2026.

This was a market-wide headwind, and it reinforced why it was strategically important for NeoVolta to diversify beyond a solely residential model. We remain optimistic on the long-term growth potential for the residential market. We now launch the NV Wave with its modular architecture and sub 30-minute installation design, as well as our third-party ownership financing offering. We firmly believe this positions us to improve installer economics, reduce upfront customer cost, and support a sequential recovery in residential volumes as fiscal year 2027 progresses. In fact, we have just received both the confirmation on the NV Wave's FEOC compliance and domestic content certification and have also received our first PO and expect delivery in the coming days. The central message is that NeoVolta is now much more than a residential energy storage company.

We've built a broader platform positioned to participate in the growing market for domestic energy storage across residential, C&I, and utility-scale markets. Over the past 12 months, we've built the necessary pieces of the platform. We strengthened the leadership team. We developed and launched the NV Wave product. We established a commercial and industrial route to market. We launched NeoVolta Power. We announced early utility scale demand through the non-binding letter of intent with Infinite Grid Capital. We received an independent opinion supporting the Pendergrass facility FEOC compliance position, and subsequent to fiscal year-end, we announced the strategic supply and manufacturing collaboration with SK On. That is meaningful progress in a relatively short period of time. The question now is not whether the strategic building blocks are in place. They are. The focus now is on execution, moving Pendergrass through the operational ramp, converting qualified demand into binding customer orders, and scaling the platform in a disciplined manner.

Let me spend a few minutes on the factory because it's rightly the area investors are focused on most closely. Following last week's grand opening event, the NeoVolta Power's facility in Pendergrass is officially open. The 210,600 square foot facility is a purpose-built domestic battery energy storage systems manufacturing platform designed to manufacture commercial, industrial, and utility scale BESS products. The facility is now moving from physical build-out to operational execution. The initial production line is advancing through commissioning and site acceptance tests, and initial production remains on track. Our immediate focus is on completing the remaining validation and quality processes, establishing repeatable production workflows, and preparing the line for customer deliveries. The facility is central to our strategy for several reasons.

First, it gives NeoVolta a controlled U.S.-based manufacturing platform in Georgia's battery manufacturing ecosystem with access to the I-85 logistics corridor, the Port of Savannah, and skilled regional workforce. Second, it is designed to support customers that increasingly prioritize domestic supply chains and BESS solutions positioned to meet applicable domestic content and FEOC-sensitive procurement requirements. Third, the facility provides a scalable base from which we can serve opportunities across C&I and utility scale markets. As we execute the production ramp, our priorities are straightforward: qualify the production processes, meet customers' quality standards, convert the opportunities we have developed into binding orders, deliver products to customers, and ultimately revenue to NeoVolta. Our collaboration with SK On is an important part of our strategy.

The collaboration includes a signed five-year agreement for SK On to supply 9 gigawatt hours of U.S. manufactured LFP battery cells to NeoVolta Power from 2027 to 2031. It is also tied to a framework for broader collaboration under which SK On would supply an additional 9 gigawatt hours of cells and purchase energy storage packs manufactured by NeoVolta Power, subject to finalization of commercial terms and order documents. Together, the signed agreement and broader framework are expected to support up to 18 gigawatt hours of combined activity between the companies. This relationship is strategically important for three reasons. First, it provides a multi-year manufactured LFP cell supply as we advance the factory in Pendergrass. Secondly, it establishes SK On as both a key supply chain partner and future customer for packs manufactured at the facility.

Third, the scale of the relationship supports our decision to accelerate our investment to build the second production line designed around pouch LFP cells. That second line could expand our Pendergrass manufacturing facility towards its target of 8 gigawatt hours of annual BESS production capacity in 2028. On the demand side, we have approximately 1.1 gigawatt hours of early demand visibility through a non-binding letter of intent with Infinite Grid Capital, representing approximately $200 million in potential deployments. Approximately $53 million has now been secured in a binding capacity reservation agreement. More broadly, the strategic relationships around our platform matter. LONGi, PotisEdge, Infinite Grid Capital, and SK On provide manufacturing expertise, supply chain depth, channel access, and early demand visibility. Together, this ecosystem provides important support as NeoVolta moves from commissioning into production. Let me close before I turn the call over to Jean.

Fiscal year 2026 was a year of meaningful transformation and progress. We built a broader platform, an 80% owner-owned domestic BESS manufacturing business, an expanded product portfolio, growing commercial and utility scale channels, strategic supply and manufacturing relationships, and a leadership team built for the next phase. Fiscal year 2027 is about operational execution. The factory in Pendergrass is officially open. The production ramp remains on track. Our priorities are clear. Execute the ramp, convert commercial opportunities into binding orders, advance the SK On collaboration, and manage capital prudently as we grow. We are proud of the progress the team has made, and we remain focused on disciplined execution. With that, I'll turn it over to Jean.

Thank you, Ardes, and good afternoon, everyone. I am pleased to be joining you for my first earnings call as NeoVolta's Chief Financial Officer. I'll begin with a brief review of our fiscal year 2026 financial results, then discuss our balance sheet, capital allocation priorities, and financing strategy as we advance the Pendergrass production ramp. For fiscal year 2026, revenue increased 58% to $13.3 million, compared with $8.4 million in fiscal year 2025. The performance reflects continued expansion of NeoVolta beyond its historical residential base. Fourth quarter revenue was approximately $13,000, compared with $4.8 million in the prior year fourth quarter. The decline primarily reflected the sharp slowdown in residential and traditional installer channel demand following changes in the federal incentive environment earlier in calendar year 2026.

While the fourth quarter result is clearly not representative of the scale of business we intend to build, it provides important context for the investments and the strategic decisions we made during fiscal year 2026. We responded to the changing residential market by advancing the NV Wave modular residential product design and our third-party ownership financing offering, while also accelerating our expansion into C&I and utility scale energy storage markets. For fiscal year 2026, our GAAP net loss was $21.5 million or $0.55 loss per share compared with a net loss of $5 million or $0.15 loss per share in fiscal year 2025. Fourth quarter GAAP net loss was $11.7 million, compared with $1.6 million in the same period prior year.

Fourth quarter GAAP net loss increase was primarily driven by a $3.9 million provision for credit losses and bad debt expenses, and $1.1 million of residential inventory reserves. The increased loss also reflects the investment phase of the company, the build-out, and the ramp preparation for the Pendergrass manufacturing facility, growth in personnel and operating capabilities associated with building a broader multi-market energy storage business. Beginning this quarter, we are introducing adjusted EBITDA as a supplemental non-GAAP measure to provide investors with additional visibility into our underlying operating performance as our business grows. For fiscal year 2026, adjusted EBITDA was negative $12.8 million, compared with negative $2.6 million in fiscal year 2025. Fourth quarter adjusted EBITDA was negative $8 million, compared with negative $0.7 million in the prior year fourth quarter.