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ClearSign Technologies Corp (CLIR)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 revenue was $0.045M, down sharply both sequentially and year over year, reflecting project milestone timing and lumpy revenue recognition; net loss widened to $1.872M as G&A rose and a one-time $0.26M non-cash RSU vesting flowed through expenses .
  • Liquidity strengthened markedly: cash and equivalents rose to ~$16.0M by quarter-end following ~$13M capital raised in Q2, including clirSPV’s ~$4.3M participation right exercise, bolstering customer and supplier confidence per management .
  • Commercial traction improved: initial engineering order for a 26‑burner retrofit in Texas (Birwelco/BIH for a Fortune 500 chemicals company) and sale of the largest burner to date (~90MM BTU/hr) via Devco in central Texas; additional Kern Energy engineering orders and successful start-up of a second multi-burner heater validate technology and expand references .
  • Near-term catalysts: shipment of a 20‑burner California project in late September, GET program report and demonstration on boiler burner efficiency/NOx in early September, and delivery of the 90MM BTU burner in Q3; regulatory tightening in Texas and Colorado supports medium-term demand .

What Went Well and What Went Wrong

What Went Well

  • Secured strategic orders: initial engineering for a four-heater retrofit totaling 26 ClearSign Core burners in Texas via Birwelco, signaling traction with a prominent EPC/heater supplier and Gulf Coast entrance. “This order is important… destined for a facility in Texas… and because of the prominence of… Birwelco” .
  • Largest burner sale to date (~90MM BTU/hr) into a central Texas gas processing facility via Devco, expanding channel partners and midstream exposure; delivery expected in Q3 .
  • Validation and follow-on at Kern: successful start-up of second multi-burner heater with emissions below guarantee and new engineering orders for two additional heaters (four burners total), deepening the California reference base .

What Went Wrong

  • Revenue fell to $45k due to milestone timing (“natural lumpiness”), down from $1.102M in Q1 and $150k in Q2’23, underscoring sensitivity to shipment schedules .
  • Net loss widened to $1.872M (from $1.108M in Q1), driven by higher G&A and a one-time non-cash $260k RSU vesting tied to a board transition, pressuring near-term P&L optics .
  • Operational cash consumption: net cash used in operations was ~$1.5M vs ~$0.05M generation in Q2’23 (prior-year benefited from milestone billings); China certification timeline remains delayed without significant update .

Financial Results

MetricQ2 2023Q1 2024Q2 2024
Revenue ($USD Thousands)$150 $1,102 $45
Gross Profit ($USD Thousands)$129 $437 $42
Total Operating Expenses ($USD Thousands)$1,758 $1,689 $2,179
Loss from Operations ($USD Thousands)$(1,629) $(1,252) $(2,137)
Net Loss ($USD Thousands)$(1,478) $(1,108) $(1,872)
EPS ($USD)$(0.04) $(0.03) $(0.04)
Weighted Avg Shares (Units)38,549,810 38,848,098 47,312,810

KPIs and Balance Sheet

KPIQ2 2024
Cash and Cash Equivalents ($USD Millions)$15.974
Shares Outstanding (Units)50,205,657
Interest Income ($USD Thousands)$77
Government Assistance ($USD Thousands)$185
Net Cash Used in Operations (quarter) ($USD Millions)$1.5

Segment breakdown: Not disclosed; business reported as single operating focus in combustion/sensing solutions .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ3–Q4 2024Not providedCompany does not provide guidance; mgmt highlighted shipping/ delivery milestones (e.g., 20-burner shipment late September; 90MM BTU burner delivery in Q3) Maintained (no formal guidance)
Operating ExpensesFY 2024Not providedNo formal guidance; noted one-time non-cash RSU vesting impacting Q2 G&A Maintained
Regulatory Tailwinds (NOx)2025–2026N/ATexas SIP/RACT revisions due late 2025–early 2026; Colorado NOx reduction targets (30% by end-2025; 50% by 2030) New context (non-financial)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023)Previous Mentions (Q1 2024)Current Period (Q2 2024)Trend
Process burner traction (California)Successful start-up of first 8-burner heater; BACT limits established based on ClearSign performance Second multi-burner start-up; additional engineering orders at Kern Follow-on engineering orders; 20-burner project shipping late September Strengthening
Gulf Coast/Texas entryN/AN/AInitial engineering order for 26 burners with Birwelco at a Fortune 500 chemicals facility Expanding geography
Sales channels via heater OEMsN/AN/AEngagement with Birwelco; “handful or half a dozen” heater companies as active partners Broadening channel
Hydrogen-capable burnerN/AEarly favorable performance shared on LinkedIn (in prior call remarks) Product offered for sale; strong interest from industry demonstration attendees Advancing commercialization
Boiler burner efficiency/NOx (GET program)N/AAnticipated 1200HP 2.5ppm NOx startup; GET program involvement noted Independent efficiency results “pleasing”; demonstration with ~70–80 attendees; report release expected early September Validation building
Regulatory backdrop (NOx)BACT determinations in SCAQMD —Texas reclassification to “serious” nonattainment; Colorado directives for 30% NOx reduction by end‑2025 Tailwind emerging
Cash runwayCash ~$5.6M YE’23 Cash $4.6M Q1; equity offering net ~$8.7M post-Q1 Cash ~$16M post ~$13M equity inflow incl. clirSPV $4.3M Strengthened

Management Commentary

  • “This order is important… destined for a facility in Texas… and because of the prominence of the engineering and heater manufacturer Birwelco… makes us well positioned to be part of the solutions they offer” — CEO Jim Deller on the 26‑burner Texas project .
  • “This is the largest boiler burner… at close to 90 million BTU/hr… sold in collaboration with… Devco… expect to deliver… in the third quarter” — CEO on Devco sale .
  • “We added approximately $13 million in cash to our balance sheet in the second quarter of 2024… reported… approximately $16 million in cash and cash equivalents [as of June 30]” — CFO Brent Hinds .
  • “Results were pleasing, both in terms of efficiency and the NOx emissions demonstrated [in GET program testing]” — CEO on boiler burner study .
  • “Government and regulatory processes take time… [Texas SIP/RACT] not due until late next year into early 2026… we should expect NOx requirements… pushed down ahead” — CEO on regulatory timing .

Q&A Highlights

  • Order pipeline context: CEO provided a simplifying heuristic of ~$100k per burner and cited 20 burners shipping to California in late September and 26 burners in a Texas engineering phase; plus Kern follow-on engineering and additional hot oil/crossover opportunities .
  • Resourcing: One engineering role open to support test furnace and field installs; management balancing staffing to protect senior engineers’ sales engagement while executing projects .
  • Demonstration impact: Strong engagement at Zeeco event, including supermajors and EPCs; active dialogue generating initiatives likely to turn into future opportunities .
  • Partner channels: Active relationships with “a handful or half a dozen” heater manufacturers; OEMs act as sales conduits influencing burner selection in retrofits .
  • GET program: Boiler burner comparison study results owned by GET; report expected early September; demo will showcase efficiency and NOx attributes .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable due to data access limits during retrieval; therefore, we cannot compare reported results to Street expectations at this time (the company also does not provide formal guidance) .

Key Takeaways for Investors

  • Revenue volatility is intrinsic to milestone-driven shipments; the late‑September shipment of 20 burners and Q3 delivery of the 90MM BTU burner should restore recognized revenue in H2 if schedules hold .
  • Liquidity is no longer the near-term constraint: ~$16M cash post ~$13M capital raises and clirSPV’s ~$4.3M participation provide working capital to scale deliveries and demonstrations; this may reduce counterparty risk perceptions in sales cycle .
  • Strategic channel development through heater OEMs (Birwelco, Devco, Zeeco collaboration) is a leverage point; successful Gulf Coast references could accelerate adoption in the largest U.S. market for current products .
  • Regulatory tightening (Texas nonattainment reclassification, Colorado NOx targets) increases the TAM for ultra‑low NOx solutions; permitting may front‑run formal rule changes, supporting quote activity ahead of SIP/RACT deadlines .
  • Technology validation is compounding: Kern multi‑heater successes, GET program efficiency/NOx results and demonstrations, and hydrogen‑capable burners broaden product credibility and applicability (including potential watertube boiler entry) .
  • Near-term focus: execution and shipment timing are the primary drivers of quarterly prints; monitor late‑September/early‑Q4 shipments, GET report release, and Texas project phase progression for trading catalysts .
  • Medium-term thesis: an expanding installed base, OEM channel proliferation, and regulatory tailwinds support a path to scaled orders; operating leverage depends on converting engineering phases into multi-burner equipment deliveries and maintaining capital discipline .