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ADVENT TECHNOLOGIES HOLDINGS, INC. (ADN)·Q1 2023 Earnings Summary

Executive Summary

  • Q1 2023 revenue of $0.98M and income from grants of $0.53M, totaling $1.51M; GAAP net loss was $(12.0)M, or $(0.23) per share .
  • Operating expenses fell $1.0M YoY to $11.6M due to administrative cost reductions, though R&D rose; gross margin remained negative (gross loss $(0.51)M) .
  • Management did not provide a 2023 revenue outlook given pipeline timing uncertainty; expects to provide revenue and grant outlook on the next call .
  • Liquidity is a key watch item: unrestricted cash was $19.5M at 3/31 and management said existing balances and projected operating cash flows are not sufficient for the next 12 months; company put in place a $50M equity line with Lincoln Park to provide optional access to capital .
  • Strategic developments provide medium-term catalysts: Hyundai JDA on HT-PEM MEAs, Siemens Energy initial order of 20 Serene systems for superyachts, Hood Park facility opening in Boston, and BASF agreement on closed-loop supply chain; Green HiPo funding contract progress remains pending .

What Went Well and What Went Wrong

What Went Well

  • Entered a Joint Development Agreement with Hyundai after successful technology assessment of Advent’s proprietary HT-PEM MEA; supports heavy-duty mobility roadmap (“we will pursue strategic joint development agreements”) .
  • Siemens Energy collaboration with an initial order of 20 methanol-powered Serene fuel-cell systems for 50–500 kW maritime auxiliary power solutions; potential broader applications beyond maritime .
  • Opened the Hood Park R&D and manufacturing facility to scale advanced membranes/electrodes; management expects the Ion Pair MEA to “significantly reduce the cost of our Serene flagship product suite” beginning in 2024 .
  • Quote: “We shall remain focused on successfully developing innovative fuel cell systems and expanding our collaboration agreements with world-class partners.” — CEO Dr. Vasilis Gregoriou .

What Went Wrong

  • No revenue guidance due to pipeline timing uncertainty; management emphasized long sales cycles and factors beyond Advent’s control .
  • Negative gross margin persisted with gross loss of $(0.51)M on $0.98M revenue; operating loss $(11.82)M reflects scale-up and R&D investment .
  • Liquidity strain: cash decreased $13.4M q/q to $19.5M; management stated existing cash and projected operating cash flows are not sufficient for the next 12 months, necessitating capital flexibility via the Lincoln Park facility .

Financial Results

Core P&L and Margin Comparison

MetricQ1 2022Q4 2022Q1 2023
Revenue ($USD Millions)$1.256 $1.957 $0.977
Income from Grants ($USD Millions)$0.508 $0.449 $0.534
Total Revenue + Grants ($USD Millions)$1.764 $2.406 $1.511
Gross Profit ($USD Millions)$(0.261) $(0.498) $(0.507)
Gross Margin %−20.8% (−0.261/1.256) −25.4% (−0.498/1.957) −51.9% (−0.507/0.977)
Operating Income (EBIT) ($USD Millions)$(13.099) $(50.084) $(11.824)
EBIT Margin %−1,043% (−13.099/1.256) −2,560% (−50.084/1.957) −1,210% (−11.824/0.977)
Net Income ($USD Millions)$(4.096) $(47.625) $(11.988)
Diluted EPS ($USD)$(0.08) $(0.92) $(0.23)

Note: Q4 2022 includes a $38.9M impairment charge, materially impacting margins and net loss .

Quarterly Trend (Revenue and EPS)

MetricQ2 2022Q3 2022Q4 2022Q1 2023
Revenue ($USD Millions)$2.225 $2.399 $1.957 $0.977
Diluted EPS ($USD)$(0.22) $(0.22) $(0.92) $(0.23)

Non-GAAP (as disclosed)

MetricQ1 2022Q1 2023
Adjusted EBITDA ($USD Millions)$(11.99) $(11.20)
Adjusted Net Loss ($USD Millions)$(12.48) $(12.38)

KPIs and Cash

KPIQ4 2022Q1 2023
Unrestricted Cash ($USD Millions)$32.9 $19.5 (−$13.4 q/q)
Net Cash Used in Operating Activities ($USD Millions)n/a (annual provided)$(11.448)
Inventories ($USD Millions)$12.620 $14.858 (+$2.238 q/q)
Capital Expenditures ($USD Millions)n/a (quarterly not disclosed)$1.9 (Q1 spending)
R&D Expense ($USD Millions)$2.458 (Q4) $3.141 (Q1)
Administrative & Selling Expense ($USD Millions)$9.258 (Q4) $8.489 (Q1)

Segment breakdown: Not disclosed in filings; revenue reported on a consolidated basis .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2023None providedNot providing; outlook to be given next calln/a
Income from GrantsFY 2023None providedNot providing; outlook to be given next calln/a
Other metrics (margins, OpEx, tax rate, segments, dividends)FY 2023Not guidedNot guidedn/a

Earnings Call Themes & Trends

TopicQ3 2022 MentionsQ4 2022 MentionsQ1 2023 MentionsTrend
Heavy-duty mobility (Hyundai JDA, HT-PEM)Tech assessment & auto interest; HT-PEM advantages JDA announced; focus on MEA and HT-PEM differentiation JDA reaffirmed; pipeline building; Ion Pair MEA targeted for 2024 Advancing from assessment to JDA; 2024 product integration path
Maritime/superyachtsMoUs with Neptune, Laskaridis Collaboration with Alfa Laval; marine solution; 20-unit initial order (partner unnamed) Siemens Energy collaboration; order of 20 Serene systems Expanding partnerships; initial orders secured
Telecom TowercosBOS Brandenburg agreement; Philippines delays emerging Vantage Towers Greece PoC; shift to Towercos after divestitures Continued focus; long sales cycle acknowledged Transition to Towerco sales; timing uncertainty
Green HiPo fundingEU ratification and scope outlined Working with Greek State on mechanism; jobs and capacity goals Site purchased in Kozani; contract signing timing pending; CEO chairs EU IPCEI Hy2Tech group Progress on planning/site; funding contract still pending
R&D – Ion Pair MEAL’Innovator program highlighted Ion-pair MEA to reduce Serene cost; differentiate power/lifetime Ion Pair MEA expected 2024; “two times power density, two times lifetime” target Clear cost/performance roadmap; 2024 integration
Capital/LiquidityCash reserves and spend detail Cash $32.9M; large impairment; cost focus Cash $19.5M; ELOC $50M with Lincoln Park; cash/OCF insufficient for 12 months Liquidity runway shortened; optional capital access in place

Management Commentary

  • Strategic focus: “We remain focused on expanding and executing our commercial pipeline… embed our technology and product portfolio in these key power sectors.” — CEO Vasilis Gregoriou .
  • Hood Park impact: “Hood Park will enable Advent to scale-up and deliver on the increasing global demand for electrochemical components… [Ion Pair MEA] will significantly reduce the cost of our Serene flagship product suite” .
  • Hyundai JDA significance: “The JDA solidifies… to further develop the HT-PEM technology… Advent will pursue strategic joint development agreements to achieve its goal of supplying key MEA components” .
  • Liquidity and capital: “Our existing cash balances and projected operating cash flows are not expected to be sufficient to support planned operations for the next 12 months… equity line of credit… up to $50 million” — CFO Kevin Brackman .
  • BASF partnership: “Very important… endorses our technology and our supply chain… closed loop process of these materials are a key” — CEO on BASF agreement .

Q&A Highlights

  • BASF agreement strengthens scale-up and precious metals management; seen as endorsement and supply-chain security for long-term growth .
  • Ion Pair MEA expected to at least double power density and lifetime; management targets product integration in 2024 and is building pipeline in telecom, marine, automotive, and defense (Honey Badger) .
  • Green HiPo: site purchased in Kozani; management proceeding with pre-planning while awaiting funding contract timing; emphasized broader EU hydrogen momentum .
  • Asia contract: Advent expects to be sole supplier after rigorous customer testing; highlights methanol and biofuels relevance in regions with liquid fuel logistics .

Estimates Context

  • S&P Global consensus estimates for Q1 2023 (EPS and revenue) were unavailable at the time of request due to data access limits; company did not provide 2023 revenue guidance on the call, citing pipeline timing uncertainty .
  • Implication: With declining revenue q/q and continued negative margins, sell-side models may need to reflect longer commercialization timelines and near-term funding optionality until Green HiPo and OEM collaborations translate to revenue .

Key Takeaways for Investors

  • Liquidity/watchlist: Cash fell to $19.5M; management flagged insufficient runway for 12 months and added a $50M ELOC; monitor capital raises and terms as a near-term stock driver .
  • Execution vs funding: Green HiPo remains a pivotal catalyst; site acquired and planning underway, but contract signing timing is the key binary event for sentiment and valuation .
  • Commercial traction building: Hyundai JDA, Siemens Energy order, BASF partnership, and Hood Park commissioning underscore strategic positioning; near-term revenue impact remains modest but de-risking technical adoption .
  • Margin path depends on cost curves: Ion Pair MEA expected to reduce Serene costs and improve performance in 2024; watch for evidence of cost-downs and durability improvements in field trials .
  • Telecom demand reset: Shift from MNOs to Towercos introduces sales-cycle delays; focus on proof-of-concepts and larger framework agreements will drive timing variability .
  • Non-GAAP context: Adjusted EBITDA and adjusted net loss were roughly flat YoY in Q1, suggesting underlying operating profile stabilized ex-fair value changes; however, scale remains insufficient to cover fixed costs .
  • Trading lens: Near-term stock moves likely tied to financing updates, Green HiPo contract milestones, and additional OEM/marine orders; risk/reward hinges on capital runway vs. commercialization visibility .