NextNRG - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 delivered strong top-line expansion: revenue increased 166% year-over-year to $19.7M and gross profit rose 189% to $1.6M, while non-cash stock-based compensation (~$25.5M) drove a large operating loss ($30.8M) and net loss ($36.1M).
• Sequentially, revenue grew ~21% versus Q1 2025 ($16.3M), with gross profit stepping up meaningfully, reflecting scaling in mobile energy logistics and expanding enterprise activity.
• Strategic catalysts: partnership with Hudson Sustainable Group to accelerate energy infrastructure buildout, formation of a Strategic Advisory Board, and a comprehensive post-Q2 financial restructuring that reduced monthly cash burn by approximately $1M.
• July momentum: preliminary monthly revenue reached $8.19M (+236% YoY), marking the first time crossing $8M, which supports a near-term narrative of accelerating demand and execution.

What Went Well and What Went Wrong

What Went Well

• Revenue and gross profit surged: “We delivered another exceptional quarter with 166% revenue growth, demonstrating the power of our integrated energy platform…” — Michael D. Farkas, CEO.
• Strategic financing and partnerships: priority access to capital via Hudson Sustainable Group partnership and Strategic Advisory Board formation to support national infrastructure rollout.
• Operational trajectory: record July revenue of $8.19M (+236% YoY) underscores continued momentum and scale across enterprise customers and geographies.

What Went Wrong

• Profitability headwinds: operating loss of $30.8M and net loss of $36.1M in Q2 2025, largely driven by ~$25.5M non-cash stock-based compensation in connection with the new incentive plan.
• Margin structure remains early-stage: gross margin in single digits, indicating ongoing need for pricing, mix, and efficiency gains as the platform scales (see margin table below)*.
• Limited numeric guidance and no Q2 call transcript available in our source set, constraining visibility into forward OpEx, tax, and segment trajectories (press release only).

Transcript

Speaker 1

Good morning and welcome to the NextNRG Inc. second quarter 2025 earnings conference call. All participants are in a listen-only mode. After today's presentation, we will conduct a question and answer session. Should you need assistance, please signal a conference specialist by pressing * then 0 on your telephone keypad. Please note this event is being recorded. I would now like to turn the conference over to Jeff Ramson. Please go ahead.

Speaker 3

Thank you and good morning. Joining us today are Michael Farkas, our Chief Executive Officer and Executive Chairman, and Joel Kleiner, Chief Financial Officer. Before we begin, I'd like to remind you that today's remarks include forward-looking statements. These are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our filings with the SEC, including our most recent Form 10-K and Form 10-Q, for full discussion of these risks. With that, I'll turn the call over to Michael.

Speaker 2

Thank you, Jeff, and welcome everyone. I'd also like to welcome the many new shareholders who have joined us recently. Thank you for coming on this journey with us. This quarter represents a key moment in our growth story. It's a time when execution, commercial traction, and platform development are coming together, and where we can share how NextNRG Inc. is delivering on its vision. Our mission is to build a fully integrated energy platform, powered by AI and backed by our patented technology, connecting fueling, electrification, storage, and grid orchestration to deliver smarter, more resilient infrastructure for commercial and institutional customers. This includes on-site mobile fueling, AI-powered microgrids for local generation and battery storage, wireless in-motion EV charging systems, and the Next Utility Operating System, which is our AI software layer that ties all systems together.

This is about building infrastructure that works, systems that are intelligent, efficient, and built to meet the real operational needs of today's energy users. Q2 execution highlights. Number one, EzFill expansion. Following our investment in 99 new trucks, we've expanded to 15 metro markets, up from 10. In Q2 alone, we generated $19.7 million in revenues, bringing us to $36 million for the first half of 2025. That already exceeds our full-year 2024 volume of $27.7 million. EzFill's model is working. We enter a new market with a Fortune 50 anchor client, build operational density, and drive efficiency through route optimization and local logistics. We then expand deeper into that market off the heels of that anchor client. It's a blueprint we're continuing to scale. Number two, our smart microgrid traction. What's exciting is how our broader energy platform is gaining traction with many of our existing trusted client relationships.

It's demonstrating our platform's value going beyond fuel and into AI-enabled modern energy solutions. A Fortune 50 EzFill customer focused on a renewable transformation project. They asked us for a proposal to install a full smart microgrid platform solution, integrating solar, battery storage, and on-site generation. In the future, we expect this client to benefit from our wireless in-motion EV charging systems, delivering 100% uptime for their fulfillment equipment inside their facilities. In California, we're making progress on several healthcare deployments. Our AI-driven smart microgrid platform will integrate natural gas generators with solar panels and battery storage to provide both resilience and significant cost savings. These engagements show that the flywheel is starting to turn and that we can extend customer value way beyond traditional fueling. We're growing our commercial pipeline.

We're actively working with our sales team and consultants to expand our reach across both our existing fleet client base and new commercial, municipal, and institutional targets. This pipeline is increasingly diverse and both behind the meter and in front of the meter. We're building off long-term partnerships, not just one-off installs. Our Utility Operating System continues to draw interest from utilities and governments. The sales cycles are longer than our other products, but this model generates long and recurring revenues. Average contracts will be about 20 to 25 to 30 years in duration, providing long visibility and contractual recurring revenues. We will continue to update you on their progress and future communications. Number four is our wireless in-motion charging. Our wireless EV charging continues to move towards commercialization. We're building the technical foundation and partnership ecosystem to create a path to scale when we go live.

With applications in fulfillment, logistics, and fleet depots, we will continue to invest in this capability and make consistent progress with the goal of going live in 2026. Number five, tariffs and the big beautiful bill. We're cognizant that investors are focused on the impacts of tariffs and the big beautiful bill. We want to take this opportunity to clarify that our equipment and parts are manufactured here in Florida. Yes, made in the great U.S. of A. By working with strong local partners, we're able to manage supply chain timelines and cost risks while accelerating delivery on our pipeline. This will help us to meet certain criteria to benefit from the big beautiful bill. Strategic focus. Looking ahead, our execution priorities are clear.

Expand our EzFill footprint centered around our anchor clients in each market, scale deployments of smart microgrids and battery storage, cross-sell infrastructure into our existing client base, advance commercialization of wireless charging, and drive efficiency in our operations and capital structure. We're building carefully with discipline, and we're seeing clear signals of traction. NextNRG is not just a fueling company. It is a clean, and it's not just a clean energy company. It's a platform built for resilience, built for integration, and built to scale with the needs of real operators. We're early, but we're building with purpose, and we're grateful for your belief in the opportunity ahead. With that, I'll turn it over to Joel for the financial review.

Speaker 0

Thank you, Michael. Let me walk through our second quarter financials and highlight the progress we're making toward our long-term financial goals. Start with revenue and gross profit. Q2 revenue was $19.7 million, up 166% year over year. First half revenue reached $36 million, compared to $27.7 million for all of 2024. Gross profit was $1.6 million, up from $0.6 million in Q1. Gross margin expanded from 3% in Q1 to 8% in Q2. When we set out to expand into new markets, we believe we could deliver strong top-line growth while capturing operating synergies. This quarter, we're beginning to demonstrate exactly that. Let's talk about operating expenses and stock compensation. Loss from operations was $30.8 million, but that includes a non-cash stock-based compensation charge of $25.5 million.

Adjusted operating loss excluding that charge was $5.2 million, compared to $5.8 million in Q1, reflecting the team's focus to reduce operating expenses and drive toward cash flow positive. I want to take a minute to explain that $25.5 million charge mentioned a moment ago. That charge reflects the launch of our new equity incentive plan, our first since the merger, designed to attract and retain top talent. While stock comp will remain part of our model, we don't expect future charges of this size to recur. Cash flow and capital structure. Cash used in operations was $6.4 million in the first half of 2025, down from $8.4 million year over year. A material improvement. We made meaningful progress on the balance sheet.

We converted a portion of our debt to equity, refinanced some of our truck fleet on better terms, and reduced our monthly debt service burden by close to $1 million. This increased flexibility strengthens our liquidity position and moves us closer to positive cash flow from operations. As we continue to execute our plan, driving top-line growth, managing burn, and accelerating our path to profitability, we plan to raise capital to help fuel our business strategy. We'll do so thoughtfully with a focus on preserving long-term shareholder value. With accelerating revenue, improving margins, better cash efficiency, and a more flexible balance sheet, we believe we're on a path to achieve break-even in the coming quarters while setting ourselves up to scale. We're staying focused on smart growth, and we're confident in the direction we're heading. Thank you for listening. Michael, back to you.

Speaker 2

Thank you, Joel. Before we open the call for questions, I want to take a moment to thank the people who are making our progress possible. To our shareholders, including many new ones, thank you for your belief in our vision and your continued support. To our customers and partners, we're honored to be solving complex energy challenges alongside you. To the entire NextNRG team, your dedication, innovation, and grit are what drive this company forward every day. We're building something meaningful, a smarter, more resilient energy platform designed for how the world works today and where it's headed tomorrow. We still have work to do, but we're executing with discipline and momentum, and we're excited about what lies ahead. Thank you. Operator, we can now open the call for questions.

Speaker 1

I understand that there were some emailed questions. Jeff Ramson, please go ahead, sir.

Speaker 3

Correct. Thank you. Yes, I've collected some questions, and Michael, I'll ask them for you. The first one relates to the flywheel that you discussed. Can you elaborate a bit more on what you mean by the flywheel and how that impacts your business?

Speaker 2

Okay. We have different technologies that are integrated together. While, when you combine them all, it's an amazing solution for many different companies out there, whether you're in the logistics space or any manufacturing. There's an issue today with generating electricity. There's not enough power out there. That's one of our main products and services that we provide. We assist companies in being able to generate electricity locally and store that electricity locally. In addition, if you have vehicles and you need wireless charging, we have the ability of providing you that as well. It's an entire ecosystem that we're building. You can select each of the individual components on its own, but you can have that entire ecosystem as well. Hypothetically speaking, we're talking about providing energy both before and after the meter, right? Before the meter, that's energy that we're typically selling to institutions, municipalities, utilities.

That's that model. After the meter, we're selling directly to the customer. By having all these technologies and all these capabilities, we're allowed to be able to service different customers as they need. You may have a customer that just needs energy generation and energy storage. They don't need charging. They don't need all the other functionality and features. We can provide them with that. We have locations that just need charging. We could provide them with that solution as well. We have an entire ecosystem where you could pick and choose each of the different services and products that we have to provide you exactly with what you need.

Speaker 3

Very good. Okay. Another question we got was, if you could talk a bit more about the California projects and maybe, you know, talk about timing and things like that.

Speaker 2

Okay. Excellent. The California projects that we're referring to are healthcare-oriented. They're for healthcare facilities. These facilities are mandated by law to have a certain amount of backup if the grid goes out. In these specs, we're looking at about 96 hours of backup time. When you look at our technology, it's not about renewables. It's not we're a solar company. We're actually deploying natural gas solutions as well as solar solutions on a hybrid smart microgrid. We're agnostic, and all of our technology is agnostic as to how we produce the fuel, whether it's done through burning petroleum or whether it's through nuclear or whether it's through natural gas or even coal. Our technology allows for the production of energy to be done a lot more efficiently with whatever way you're using, whatever fuel you're using to create that electricity.

It's very important to understand that we are not just a green energy company, but we're a company that allows, no matter how you're producing that energy, to do so way more efficiently. It's not only just from an energy perspective. It's from an operation and management perspective. Our client has used our technology in the real world, and it was a long-term project. It was backed by an $800+ million DOE collaboration. That utility that deployed our technology has reduced their O&M cost by almost 32%. You're talking about a grid. You're talking about a utility grid. You're talking billions of dollars that can be saved. Across the board, our technology digitizes a grid and allows for efficiencies that have never, ever been achieved beforehand.

Speaker 3

Got it. Okay. The last one I have here is talking about the technology. I believe you mentioned, or in the past as well, being agnostic to fuel source. Can you just talk a bit more about that?

Speaker 2

Could you repeat that question, please?

Speaker 3

Yeah, just talking about your technology and it being fuel-agnostic to the type of fuel source.

Speaker 2

Yes. Again, utilities have different ways of producing electricity, right? Right now, we have many of our commercial fuel clients focusing on transitioning to renewable solutions. Our legacy business allows us to service our customers of today and then assist them and hold their hands through that process. You are going to have customers that are going to always have some sort of legacy fueling. You want to have redundancy no matter what. The grid is not going away so fast. You need to implement all these different methodologies of producing electricity so that you have redundancy. You do not want to be dependent on any single fuel source. There is going to be nuclear. It is not going away. You are going to have natural gas plants. Those are still online for quite some time.

You are going to have your hydrogen and your solar and your energy storage and your wind. There are going to be different components of it. We need to make sure that we are not dependent on any single fuel source. The most important thing is whatever fuel we are using to create electricity, we need to be a lot more efficient in doing so. That is what we bring to the table.

Speaker 3

Okay. Those are the main questions I received. I think we're good on the questions.

Speaker 1

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Michael Farkas for any closing remarks.

Speaker 2

Thank you, everybody, for joining us on this journey. We still have a way to go. There's a lot of work that needs to be done. The energy space in its entirety is very, very antiquated. We need to digitize the grid globally. We believe with our technology being implemented, you're talking about annual savings over $0.5 trillion if every utility implemented our technologies. It is something that could be groundbreaking globally and impact everyone personally. Thank you, everybody.

Speaker 1

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.