Beam Global Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, and thank you for participating in Beam Global's second quarter 2026 operating results conference call.

We appreciate you joining us today. Desmond Wheatley, President, CEO, and Chairman of Beam Global, is joining me. We are both in San Diego today. Desmond will be giving his thoughts on 2026 and providing an update on recent activities at Beam Global, followed by a question and answer session. But first, I'd like to remind you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the SEC.

The content of this call contains time-sensitive information that is accurate only as of today, August 19th, 2026. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Let me start with a few key highlights. Our revenue in the second quarter was $8.6 million. It is up 21% year-over-year and 174% over the first quarter, a clear signal that the business is re-accelerating after a slow start to the year. We converted a substantial portion of our backlog into shipments during the quarter and backlog ended June at $5.4 million. We continue to operate with no debt, no going concern qualification, and an unused $100 million line of credit. Operationally, the quarter was active.

We booked more than a half a million dollars in drone and autonomous robotics battery orders in a single week. We extended our federal GSA and Sourcewell momentum with repeat EV ARC orders from Dallas, Stanislaus County, and the City of Long Beach. We completed our relocation of our manufacturing operations to Yuma, Arizona, a move that we expect to generate approximately $2.7 million in rent savings alone over the five-year lease term when compared to what we have historically spent manufacturing in San Diego. Desmond will take you through the business in more detail in a moment. Turning to the financials, our second quarter revenue was $8.6 million, an increase of 21% compared to the $7.1 million in the second quarter of 2025, and an increase of 174% over the $3.1 million we reported in the first quarter.

On gross profit, we reported $1.5 million or a gross margin of 17.8%, compared to $1.4 million or 20.3% in the second quarter of 2025. Both periods included a $700,000 of non-cash depreciation and intangible amortization in cost of revenues. Excluding these items, our adjusted non-GAAP gross margin was 26.2%, compared to 29.6% in the prior year period. We expect our margins to improve as our volumes continue to recover, reducing the impact of our fixed overhead on each unit sale and as our cost reduction initiatives take further effect. Our operating expenses were $4.5 million compared to $5.9 million a year ago, which included a $1.4 million stock grant. Excluding that item, our operating expenses were essentially flat year-over-year.

Our first half results absorbed a $1.1 million non-cash provision for credit losses related to a single customer balance reserved in accordance with our policy, largely offset by reductions in our compensation, our facilities, and our other G&A expenses. We maintain a positive relationship with that customer and continue to work toward collecting the balance. Our net loss was $3.1 million or $0.14 per share compared to $4.3 million or $0.28 per share a year earlier. The quarter's net loss included a $1.1 million of non-cash charges. Excluding these items, our non-GAAP net loss was $2 million compared to $1.8 million in the prior year quarter. For the six months, net loss was $9.9 million or $0.47 per share compared to $19.8 million or $1.30 per share, which included last year's $10.8 million goodwill impairment.

We believe the improvement in both our GAAP and non-GAAP results together with our 21% revenue growth over the prior year quarter reflects our initiatives to expand our opportunities, our disciplined cost structure, and the largely fixed nature of our non-cash charges, and is indicative of our meaningful operating leverage as our revenue recovers. We remain debt-free with an unused $100 million line of credit, and we believe we are well positioned to fund operations and support our growth initiatives. In closing, the second quarter marked a clear re-acceleration in our business. Our revenue grew sharply, our net loss narrowed, our diversification continued to gain traction, and our cost structure remained disciplined. We believe the actions we are taking are positioning Beam Global for more stable and scalable growth as market conditions continue to evolve in our favor.

I will now turn the call over to Desmond to provide a business update.

Thank you, Lisa, and thank you to all of you for joining us today for this earnings call. At risk of being a little bit repetitive, I am just going to go back over a couple of those numbers for you. In the second quarter of 2026, we did return to growth at the top line, 174% increase in revenue over the prior quarter. Growth at the gross margin level, with about a 30% improvement in gross margin over the prior quarter. That is 30 percentage points better gross margin than in the prior quarter. And a simultaneous significant reduction in operating costs, about $500,000 less in spending in the first half of this year than in the same period in 2025.

Now, we are happy about this level of growth, but particularly because it has come from the very deliberate strategic diversifications that we have been focusing on for the last several quarters. Europe is now contributing more or less the same amount of revenue as the U.S. is. When we first created Beam Europe, I commented at the time that I thought that the contribution from that, the largest market in the world for our products, would at some point outstrip revenue contributions from the U.S., not at the expense of growth in the U.S., accretively. Well, Europe is now producing as much revenue as the U.S. is.

I suppose time will tell who will win the race, but of course, we will continue pushing for growth in both markets and also in the Middle East, where we believe we will see significant activity as soon as things settle down in the Gulf. At any rate, Europe continues to generate significant revenues for us, but even more importantly, very large opportunities. And no matter which market comes out on top, Beam Global wins the race. I will come back to the European opportunities in a few minutes. Our battery business is also making significant contributions with some of the most exciting technology and solutions that we have ever had. We generated revenues from our diverse set of new products during the quarter and also continued to bring in recurring revenue through innovative business models that we have uniquely developed.

We have continued to grow our intellectual property portfolio with two new patents being issued to us during the period, one in Europe for battery solutions and one in the U.S. for our innovative, robust, and reliable energy generation technology. These new patents expand the moat around Beam Global and cement our competitive advantage in the most active markets and technologies of the day. The batteries that we are producing for drones, robotics, AI, data centers, and weapon systems are state-of-the-art, and we continue to make extensive breakthroughs in that area of the business while protecting the intellectual property that we are developing with these patents. While I am on intellectual property, we just recently announced that a breakthrough battery technology, which we have developed for AI data centers, was accepted for a presentation at IECON 2026 in Qatar from amongst 1,800 submissions.

This new technology will allow us to provide large amounts of power very rapidly for certain vital data center applications. Interestingly, this is technology that we developed for defense systems that have similar requirements in terms of rapid discharge capabilities. Batteries generally don't like doing that kind of stuff. It's a real testament to the prowess of our battery scientists and engineers that they've come up with a safe, efficient, and effective way of doing this. Clearly, the intellectual property that we've developed is important enough to those people who understand these things that they, as I said, selected us amongst 1,800 submissions for presentation at this very esteemed event. We'll go on to actually demonstrate that technology or present that technology at the battery show in the U.S. this year as well.