Innventure, Inc. (INV)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $0.224M, below S&P Global consensus of $0.58M as management reiterated that revenue growth is expected to inflect in 2H 2025 . Consensus from S&P Global shown for context; see Estimates Context section for details.*
• On S&P’s “Primary EPS,” INV printed 1.77 vs -0.19 consensus, but GAAP diluted EPS was -$3.10, driven by a non‑cash $233.2M goodwill impairment; adjusted EBITDA was -$21.8M . Consensus from S&P Global shown for context; see Estimates Context section for details.*
• Operating company momentum was the focus: management highlighted accelerating engagement for Excelsior (two‑phase liquid cooling), a ~300% spike in leads since late Feb, a ~200% expansion in the partner network YTD, and proposals now averaging $2–$4M—setting the stage for 2H revenue ramp .
• Liquidity actions post‑quarter added $27M gross proceeds via two convertible debentures ($18M on Apr 14, $9M on May 15), and founders converted ~$18M of related‑party debt to preferred equity, reducing annual interest expense by ~$3M .

What Went Well and What Went Wrong

• What Went Well
  • Management reiterated “confidence in achieving revenue growth inflection during the second half of 2025” and highlighted strong strategic positioning of Accelsius/Excelsior in two‑phase direct‑to‑chip liquid cooling .
  • Commercial traction signals: lead generation up ~300% since late Feb; strategic partner network up ~200% YTD; average proposal size moved from single‑unit POCs to $2–$4M, indicating pipeline maturation .
  • Manufacturing readiness: internal scale seen sufficient to reach profitability at ~100 racks/month, with a global contract manufacturer able to handle 10,000+ racks today; typical large orders could be fulfilled within ~90 days, supporting a 2H ramp narrative .
• What Went Wrong
  • Q1 revenue of $0.224M (largely management fees) missed S&P consensus ($0.58M) and declined sequentially vs Q4 as revenue remains back‑half weighted . Consensus from S&P Global shown for context; see Estimates Context section for details.*
  • GAAP loss per share of -$3.10 was impacted by a $233.2M non‑cash goodwill impairment tied to share price/market cap declines during late Feb–Mar; without the impairment, adjusted EBITDA still reflected a -$21.8M loss on ramp costs .
  • Q&A and commentary acknowledged a slower industry first half (tariff uncertainty and re‑orientation around Nvidia’s roadmap), pushing orders/evaluations later in 2025; management emphasized momentum into 2H .

Financial Results

P&L snapshot (oldest → newest)

Notes: Q3 2024 reflects predecessor LLC reporting; “Net Loss Attributable to Innventure LLC Unitholders” and basic loss per unit reflect the predecessor structure .

EPS/Unit (oldest → newest)

Balance sheet / cash

Q1 2025 actual vs S&P Global consensus

*Values retrieved from S&P Global.

Context:

• Management said Q1 revenue consisted of ~$0.2M in management fees (in line with their message that most revenue growth is expected in 2H 2025) .

Guidance Changes

No explicit quantitative guidance for revenue, margins, OpEx, OI&E, or tax rate was provided.

Earnings Call Themes & Trends

Management Commentary

• CEO: “Innventure reiterates confidence in achieving revenue growth inflection during the second half of 2025” and “confidence … has never been higher” around Accelsius/Excelsior momentum and ecosystem engagement .
• Excelsior CRO: Two‑phase New Cool enables free cooling 97% of the time in Singapore vs 34% for single‑phase; 6–8°C more headroom; dielectric refrigerant reduces risk from leaks; hot‑swappable, lower‑maintenance systems .
• Excelsior CRO: Lead gen +300% since late Feb; strategic partner network +~200% YTD; proposals now $2–$4M; deep hyperscaler evaluations underway (lab→POC→pilot) .
• CFO: Q1 G&A ~$20M (≈$5M non‑cash equity comp; ~$6M professional services; ~$6M payroll and other OpEx; ~$2M non‑cash amortization); non‑cash goodwill impairment $233.2M tied to share price/market cap dynamics; +$16.4M favorable non‑cash mark on warrants/earn‑outs; adjusted EBITDA loss $21.8M .

Q&A Highlights

• White‑label OEM: Relationship driven by OEM product strategy and broader market demand; not originated by a single hyperscaler; 2H availability expected to support ramp (separate from other channels) .
• Technology approach: Flow‑boiling vs pool‑boiling—Excelsior emphasized resilience, buffer against overload/dry‑out, and acceptable pump power/working‑fluid cost profile .
• Scale readiness: Internal capacity to profitability at ~100 racks/month; contract manufacturer can support 10,000+ racks; NA‑centric Tier‑1 supply chain reduces geopolitical risk .
• Macro cadence: Industry activity slower in H1 (tariffs, timing of Nvidia roadmap), with a visible acceleration into 2H .

Estimates Context

• For Q1 2025, S&P Global consensus for revenue was $0.58M (2 estimates) vs actual $0.224M (miss), consistent with management’s message that growth would be 2H weighted . Values retrieved from S&P Global.*
• S&P Global “Primary EPS” consensus was -$0.19 (1 estimate) vs actual 1.77 (beat), while GAAP diluted EPS was -$3.10 due to a non‑cash $233.2M goodwill impairment; investors should reconcile non‑GAAP vs GAAP performance carefully . Values retrieved from S&P Global.*
• Coverage depth remains thin (1–2 estimates), so estimate dispersion and revisions may be elevated as 2H order timing and revenue recognition become clearer.*

Key Takeaways for Investors

• The narrative remains a 2H revenue inflection driven by Excelsior’s two‑phase liquid cooling adoption cycle (hyperscalers/OEMs/colos/AIaaS) and white‑label OEM availability; watch for POC/pilot conversions and large‑order announcements .
• Q1 miss vs revenue consensus reflects timing, not demand: management reiterated back‑half weighting; operational signals (lead/proposal/partner metrics) point to pipeline maturation .
• GAAP loss was dominated by a non‑cash goodwill impairment; monitor adjusted EBITDA trajectory as volume scales, given comments on operating leverage at higher rack volumes .
• Manufacturing readiness and largely NA‑centric supply chain reduce tariff/geopolitical risk and support fulfillment within ~90 days on large orders—key for translating pipeline into revenue .
• Catalysts: formal POC/pilot wins converting to production orders, OEM white‑label launches, additional partner disclosures, and segment updates from AeroFlexx (e.g., certifications and customer roll‑outs) .
• Liquidity improved in Q2 via $27M gross proceeds from debentures; founders’ debt‑to‑equity conversion reduces interest burden—monitor cash burn vs fundraising cadence ahead of ramp .
• Risk factors: slippage in hyperscaler decision windows, competitive responses (including single‑phase incumbents and the one other two‑phase vendor cited), and the need to execute at scale .

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Additional operating updates (outside the Q1 print but relevant to momentum):

• AeroFlexx received APR Critical Guidance Recognition for recyclability for its mono‑material AeroFlexx Pak, supporting commercial validation and sustainability credentials for CPG engagement .

Footnote: *Values retrieved from S&P Global.