Wallbox Q3 2025 Earnings Call - Margin Upswing and Strategic Sales Reinvestment Amid Revenue Headwinds

Conference Operator: Hello, everyone, and welcome to WALLBOX’s Third Quarter twenty twenty five Earnings Conference Call and Webcast. At this time, all participants’ lines have been placed in listen only mode to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. I would now like to turn the call over to Michael Wilhelm from Wabox. Michael, please go ahead.

Michael Wilhelm, Investor Relations, Wallbox: Thank you, and good morning and good afternoon to everyone listening in. Thank you for joining today’s webcast to discuss Wabox’s third quarter twenty twenty five results. This event is being broadcast over the web and can be accessed from the Investors section of our website at investors.wobox.com. I’m joined today by Henrik Assassion, Wobox CEO and Luis Boada, Wobox CFO. Earlier today, we issued our press release announcing results for the third quarter ended 09/30/2025, which can also be found on our website.

Before we begin, I would like to remind everyone that certain statements made in today’s call are forward looking and may be subject to risks and uncertainties relating to future events and or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company’s most recent public filings with the SEC, including in the annual report on Form 20 F for the fiscal year ended 12/31/2024, filed on 05/06/2025. We will be presenting unaudited financial statements in IFRS format that reflects management’s best assessment of actual results. Also, please note that we use certain non IFRS financial measures on this call and reconciliations of these measures are included in the presentation posted on the Investors section of our website.

Also, a copy of these prepared remarks can be obtained from the Investor Relations website under the Quarterly Results section, so you can more easily follow along with us today. So with that out of the way, I will turn it over to Henrik.

Henrik Assassion, CEO, Wallbox: Thank you, Michael, and thanks, everyone, for joining us today. We will start today’s call with an overview of our third quarter twenty twenty five results, provide our perspective on the EV market and spend time discussing our strategic progress. Luis will offer a closer look at our financial results and our key financial metrics before I close the conversation to highlight what we are focused on for the remainder of the year. Q3 revenue landed at €35,500,000,000 below our expectations, but up 2% compared to the same period last year. The largest offender has been AC sales across all global regions.

In the case of Europe, there have been operational headwinds and changing product regulation creating delivery challenges, impacting the overall order intake. For the North American market, the strong contrast in terms of EV market growth between The U. S. And Canada creates a blurred view. The U.

S. Had one of the strongest quarters ever, while Canada had one of the slowest quarters since Q1 twenty twenty three in terms of EV sales. These market trends we see are reflected in our results. The contribution of APAC and South America has been limited as resources have been shifted to focus on our key markets. DC sales have been the highlight of this quarter, reflecting the ongoing strong recovery we have seen during 2025.

This category is showing strong growth compared to both last quarter, up 40% and last year, up 34%. We have seen progress with our commercial partners and solid demand for our new generation Supernova product due to its solid performance and reliability. In total, during the third quarter, we delivered over 33,000 ACD units and close to 170 DC units. Gross margin was 39.8 percent in the third quarter, which exceeds the 37% to 39% guided range. This reflects a 200 basis point increase compared to last quarter, resulting from improved bill of material costs, higher prices and the impact of carbon credits.

Looking ahead, there are several levers we believe can be pulled to sustainably improve the gross margin, which Luis will comment on later. Moving to the organizational setup. Labor costs and operating expenses landed at €22,900,000 This reflects a 6% improvement compared to last quarter and a 28 improvement compared to the same period last year. In the case of cash cost, which is the finance labor cost and OpEx, excluding R and D activation, noncash items and one off expenses, the result is even more impressive as we achieved a 34% year over year reduction. I am pleased with the ongoing progress on efficiency while we are achieving consistent revenue levels, allowing us to make steps toward profitability every quarter.

Going forward, we continue to balance cost reduction and investments to achieve a net positive efficiency We plan to accelerate investments to reinforce our sales organization, including customer service to support revenue growth. One of the first major steps in this plan is the appointment of our new CEO, Nazzi Alasdway. Nasi brings experience and expertise in developing scalable commercial models and driving expansion in strategic markets. In addition, we will integrate our different sales team across product segments for a more holistic approach, centralized execution and additional efficiency gains. Adjusted EBITDA for the 2025 was minus €6,900,000 below our guided range but improving 8% quarter over quarter.

Compared to the same period last year, adjusted EBITDA loss narrowed by 68%, and this comparison is impacted by one off items incurred in Q3 twenty twenty four. The main reason for the guidance shortfall was softer than expected sales, as mentioned before. As a global player, we operate in a complex environment characterized by volatile market demand, driven by evolving subsidy frameworks and continually developing product regulations across countries and regions. To manage this, resiliency is crucial, and we believe we are well positioned for growth with a strong brand name, complete product portfolio, well known commercial partners, global reach and a more efficient organizational structure. The main area of focus to accelerate our path to profitability is restoring revenue growth.

For this reason, we are reinforcing our sales position and leveraging our existing margin positioning to elevate our performance across geographies and segments. For the 2025, Europe contributed €23,600,000 of consolidated revenue or 66% of total top line. This reflects a 3% increase in revenue for the region compared to last year, but was subdued compared to European EV market growth. We showed solid year over year improvements in selected countries such as Spain, France, Belgium and The UK. However, growth for their region has been softer than expected.

This can partly be attributed to operational headwinds and product regulations. In the quarter, the radio equipment directive came into force in the EU, which require us to switch to a new product, which has additional functionality but comes at a higher price point. This product shift and the related market education time impacted our order delivery. In addition, shipments were subdued due to longer lead times as we shifted one of our most popular products, the Pulsar Max, to a new technology platform for additional functionalities and improved cost. Overall, we believe the positive trend in the EV market for the European region will provide additional opportunities, which we believe we can capitalize on with our strategic position and complete product portfolio.

North America contributed €11,000,000 or 31% of the total revenue. Compared to the same period last year, this region is up 1318% at constant FX. This is consistent with the trend we have seen in the last quarters as we continue to perform well in the North American market. However, breaking down the region in terms of revenue growth compared to last quarter, we saw growth in The U. S, offsetting a slowdown in Canada.

This performance is even more impressive considering the Canadian market in the third quarter is down 49% compared to the same period last year. Both APAC and LatAm remain a small region for WALBOX, now contributing approximately €160,000 or one percent and €725,000 or 2%, respectively, for the quarter. As mentioned last quarter, we believe these regions have significant future potential but are currently not prioritized in our resource distribution. AC sales of €22,400,000 including ABL and Quasar, represented approximately 63% of our global completed revenue, down 16% compared to last quarter and down 5% year over year. This product category had a weak performance across all global regions, partly due to the operational headwinds in Europe and the soft EV market in Canada, I just discussed.

On the positive side, we continue to roll out the innovative Pacer two solution as commercial traction is gaining momentum and have discussions with additional OEMs to become compatible with the product. We are providing additional warranty on our Pulsar Max at no extra cost in addition to reinforcing the sales organization. This change reflects the product’s outstanding reliability and our commitment to delivering long term value to every customer. In addition, we have launched and expect to launch new features for additional customer value and an improved competitive edge. Earlier this year, we introduced a time of use tariff, allowing customers to optimize their energy consumption, and now we introduced a state of charge feature, operational insights into the charging status of the car.

Shortly, I will share more details about these functionalities and expected long term strategic impact. DG sales in the third quarter landed at €5,800,000 or 16% of sales, resulting in a significantly higher contribution to our total revenue for the quarter as compared to prior periods. Year over year, this category is up 34% and sequentially up 40%. As discussed in the previous quarter, we saw strong progress in the recovery of the DC sales, especially due to introduction of new generation supernovas and high demand in North America. Many clients are satisfied with the functionalities, quality and efficient installation, resulting in recurring orders.

For example, in the third quarter, we have announced additional commercial partnerships in both Europe and North America with Hera Group and Surcharge Corp, respectively. In the case of Hera Group, we’re already to provide 58 supernova 120 kilowatts DC fast chargers to be deployed across Central Northern Italy by the 2025. TrueCharge Corp. Is building a new public charging network in Canada across Alberta and British Columbia. The project will establish up to 24 high speed charging sites with 96 charging points along key travel corridors, creating an extensive regional fast charging hub and deploy supernova 180 kilowatts DC fast chargers.

In addition, we are working on an exciting new product, which is leveraging our existing DC technology. This new product will be announced soon, and we believe it will revolutionize the DC fast charging concept. From a technology perspective, we anticipate this new solution based on the Tupanova platform will allow for higher power delivery than we ever offer before, but still have the cost efficiency, reliability, scalability, and small footprint our customers value in the existing solutions. We are very excited to launch this product as it underlines our flexibility to continue to innovate and leverage our existing feature proof platform while in parallel right size our organization and limited CapEx investment. The category software, services and others remain a consistent contributor to our business, this quarter generating €7,300,000 or 21% of the total revenue.

This reflects a small decrease compared to last quarter, but an 11% year over year increase. If we break down this category, we see the same trend as the previous quarter. Our software activities, with the largest contributor being Electromaps, showed the strongest growth, more than doubling the revenue compared to last year. Installation and service remains the largest contributor, but declined slightly compared to last quarter. We see opportunities for this category to continue to perform well as the fleet using our software continues to grow, and we will have more and more DC fast chargers in the field.

Today, we would like to provide you with another update on the innovation we are working on to become the ultimate energy partner and enhance the value of our products for our customers. Last quarter, we talked about our bidirectional charger, Wizard II, and its capabilities for enhanced energy management. Now we would like to comment on additional solutions we are bringing to the market, enabling all our chargers to provide additional energy management functionalities. As mentioned earlier in the call, at the beginning of this year, we have introduced the time of use tariff feature, which allow customers to input different daily tariffs provided by their utility. This information can then be used to schedule charging sessions within the WorldBox app and give customers the opportunity to optimize their energy costs based on the different tariffs available.

Currently, we have time of use tariffs data from more than 40,000 customers, which allow these customers to extract more value from their charger on car. The next step, which we are introducing now, is a state of charge feature, which provides the customer with insight into the battery level of the car and allows the customer to optimize energy usage based on its driving needs. Combining the wall of energy meter at the home, MOU studies from the utility, the energy generation of solar panels, and the state of charge of the car, the customer has all the elements to do energy management at

George Gianarakis, Analyst, Canaccord Genuity: the home, all power by wallets.

Henrik Assassion, CEO, Wallbox: With this complete solution, we have more insights and control to support the customer with optimizing their energy usage, receiving tailored energy price recommendations and in the long term, enhancing their energy security with the implementation of the Quasar two, which is enabled by this global infrastructure. In the future, we aim to leverage this infrastructure and this integrated global solution by introducing additional intelligence powered by AI for faster data processing and completely automatic smart charging. Until now, many of these features we just discussed have been provided in collaboration with partners, But by centralizing more and more of these features within the WorldBox ecosystem, we take another step towards establishing WorldBox as a leading energy player. The EV market continued to perform well in the third quarter of this year. And in our addressable market, which we define as all regions except China, 2,100,000 EVs were sold, reflecting a 39% growth compared to the same period of last year.

Europe, the largest leading market, continues to recover well compared to the last two years and is up 41% compared to the same period last year. It is great to see this momentum with positive trends emerging for Wallops in certain countries such as Spain, France, Belgium and The UK. However, this rapid growth is not yet fully reflected in all countries and therefore, in our results. But we believe we can better capitalize on this trend going forward with the reinforcements of our sales teams. Long term commitment to carbon emission reductions is essential with many European countries, including Spain and France and various organizations convened under the political initiative, State Charge Europe, pushing to uphold the EU’s 2,035 share emissions target, not only to decarbonize transport, but also to remain competitive globally in the long term as many indicators show that the future is electric.

In the case of the North American market, different elements impacted the growth in Q3, which was up 22% compared to last year. First, the Canadian market has been soft all year due to 100% tariffs on Chinese made cars and the end of the ICEV incentive program. This softness was offset by strong growth in The U. S. Market during the quarter, which was driven by the prevailing effect as consumers took advantage of the disappearing Fed EV tax credit at the September.

As mentioned during our last earnings call, in The U. S, EV sales still significantly depend on incentives and in addition to the charging sentiment under the new administration. We believe that in the short and midterm, the EV market will be impacted. Therefore, we work closely together with our key commercial partners to maintain our residential sales, but also shifting our focus more towards commercial AC sales and further accelerating our DC sales as these categories are less correlated with EV sales and more with the charging demand of existing fleet. The fastest growing EV market was the rest of the world, which includes APAC and LatAm, with 63% year over year growth.

As we continue refocusing resources And on Europe and North America, we have not been able to benefit from these growth, but it does underline the potential of these markets in the future as mentioned earlier in this call. Luis, I’ll turn it over to you to comment further on our financial details.

Luis Boada, CFO, Wallbox: Thank you, Andre. Good morning, and good afternoon to everyone. The third quarter revenue was softer than expected and landed at €35,500,000 outside our guided range but did improve 2% year over year. There were different factors impacting the top line, but the largest factor was lower than expected AC sales in all global regions. DC sales performed very well, growing 34% compared to the same period last year and up 40% sequentially.

This probe category was responsible for seeing mild growth in Europe and double digit growth in North America. Gross margin improved significantly with 200 basis points, landing at 39.8% and exceeding our guided range. The positive trend resulted from improved bill of materials, the impact of carbon credits, higher prices and a reduction of warranty costs. The build of materials is improving due to the switch to a new technology platform for selected AC products, which in parallel is improving the reliability and therefore reducing the warranty cost. We expect this impact to be more clearly visible as we continue to reduce our inventory and start to deliver these new products.

A new item contributing positively to our gross margin stems from carbon credits generated in the Canadian market through our existing products. The proceeds from these credits are reinvested into the EV market, offsetting discounts on our new products. The impact of higher prices resulted from the new generation Supernova sold in The U. S, which have better margins compared to the older versions. Overall, we believe there are different levers we can pull to stabilize gross margins and find additional improvements in the future.

Q3 labor costs and operating expenses totaled €22,900,000 representing a 28% improvement compared to the same period last year. We continue to rightsize the organization while investing in our sales organization as explained by Henrik. The key objective is to improve top line revenue, but to remain lean in our operations. Cash costs, which is defined as labor costs and OpEx, excluding R and D capitalization, noncash items and one off expenses declined even further, down 34% year over year. Considering the significant efficiency measures implemented over the past two years, we are pleased that we continue to identify new areas for optimization.

Consolidated adjusted EBITDA loss for the quarter was €6,900,000 slightly outside the guided range. This represents an 8% improvement versus the prior quarter, continuing the positive sequential trend observed throughout the year. The variance to guidance was primarily driven by softer top line performance as all other key variables met or exceeded expectations. To reach positive adjusted EBITDA, the reacceleration of revenue growth remains critical, a goal we are pursuing by reinforcing our sales organization and strengthening commercial execution. We ended the quarter with approximately €27,700,000 in cash, cash equivalents and financial instruments.

Loans and borrowings totaled €179,000,000 representing a slight sequential decrease and consisting of €67,000,000 in long term debt and €112,000,000 in short term debt. During the quarter, as part of our constructive ongoing conversations, we reached a standstill agreement with the majority of our banking pool, temporarily suspending payments of principal and interest. This agreement provides a stable framework to facilitate the development of a long term solution of our existing debt and for our capital structure in general. Our objective is for the remaining debt holders to join these discussions as we work toward a structure that aligns with Warbucks’ business plan and long term growth objectives. CapEx was light again this quarter and landed at €300,000 of which negative €100,000 was related to investments in property, plant and equipment.

The reason for the negative impact of PPE investments is an accrual adjustment during the quarter and stricter cost controls, which resulted in higher efficiency gains than expected. Compared to the same period last year, CapEx investment decreased 82%. Inventory continued to trend downward, totaling 50,800,000 at the end of Q3. This represents a 34% year over year reduction and a 10% decrease versus the previous quarter, equivalent to approximately €6,000,000 We are pleased with this progress as we continue to release cash from operations and the lower inventory levels position us to replenish at a more efficient build of materials, supporting further gross margin improvement in the coming quarters. In recent quarters, we have been focused on stabilizing WALBOX’s financial position.

While we have made strong progress across multiple fronts, further improvements remain ahead. We will continue to prioritize self expansion, operational excellence, disciplined cash management, inventory reduction and limited CapEx investment alongside constructive ongoing discussions with our banking partners to establish a long term capital structure as soon as possible. Henrique, I’ll turn it back to you to provide some closing commentary.

Henrik Assassion, CEO, Wallbox: Thank you, Luis. The third quarter twenty twenty five results were mixed. Revenue came in below expectations, but overachieving expectations of gross margin, efficiency gains and operational improvement. Overall, I believe we are still heading in the right direction, especially considering strategic achievements, such as constructive progress with our banking partners that we are now looking to accelerate this momentum. The transition continues to move forward, though at different speeds in different regions.

And after a period of rightsizing the organization, we have identified where to invest in our sales organization to capitalize on that growth. In parallel, we continue to expand and improve our leading product portfolio while commercializing our bidirectional solution, Quasar two, introducing a revolutionizing DC fast charging concept and launching new software features to develop the ultimate energy management solution. All of these give us a solid platform, together with our strong commercial partnerships, to continue to drive revenue growth and progress toward profitability. Even though we are not yet where we want to be, the positive trend is clearly visible, and we make incremental steps each quarter. With that, I would like to discuss next quarter’s guidance.

For the 2025, we have the following expectation: revenue in the €36,000,000 to €39,000,000 range gross margin between 3840% and negative adjusted EBITDA between EUR 6,000,000 and EUR 4,000,000. With that, we are ready to take questions from our analysts.

Conference Operator: Certainly. At this time, we will be conducting a question and answer session. Your first question for today is from George Gianarakis with Canaccord Genuity.

George Gianarakis, Analyst, Canaccord Genuity: Hi, everyone. Thank you for taking my question. I sort of wanted to focus on market share, particularly in Europe. You gave some explanation around some product issues that you may have had. But can you just sort of talk about how that market share is trending and how you expect it to trend over the next few quarters?

Henrik Assassion, CEO, Wallbox: George, this is Henrik. So it depends on the product line and the country. I will say that a big part of the growth in EV sales that we share, first of all, it’s based on PHEV and EVs. And PHEV is obviously a big part of the EV sales or at least 50%. So the attachment rate on of PHVs versus EVs in terms of charges is not the same.

So normally, an EV has an attachment rate of 80% with an EV charger. And therefore, these user charges at work or in a public space if they don’t have a home charger. And the same happens with PHVs where the attachment is around 30%, so with lower attachment. And also, I think it’s important to remark that some of these Chinese EV manufacturers like Tesla are bringing their own products, And they, therefore, we don’t include it in our market share assessment when we look at the serviceable market. With all in all, in general, we believe that in countries like Spain, France, Belgium, The U.

K. And Germany, our market share remains stable or trending up. And markets like Benelux sorry, Netherlands, Italy and The Nordics, we’ve seen this quarter a trend going down. So if we look at the overall Europe, it will depend on the EV sales. But in general, what we are trying to do, given all these operational headwinds we’ve seen this last quarter with the change of platform and so on, is to maintain it or to increase market share moving forward in AC.

George Gianarakis, Analyst, Canaccord Genuity: Thank you. And maybe just to focus on the last question on the balance sheet. You mentioned this standstill agreement. When should we expect maybe some a little bit more of a formal announcement from the company around what should happen with the €179,000,000 in debt?

Michael Wilhelm, Investor Relations, Wallbox: George, I’ll take that one.

Luis Boada, CFO, Wallbox: As we announced, the standstill matures as of the December 9, and so that’s what we’re working towards.

George Gianarakis, Analyst, Canaccord Genuity: So we should expect some sort of news between now and the December 9.

Henrik Assassion, CEO, Wallbox: Is that the guidance?

Luis Boada, CFO, Wallbox: Correct.

Henrik Assassion, CEO, Wallbox: K. Thank you.

George Gianarakis, Analyst, Canaccord Genuity: You’re welcome.

Michael Wilhelm, Investor Relations, Wallbox: Okay. And that was it from us today. Thank you all for joining. We hope you found today’s call a good use of your time. Let us know if we can help you in any way.

Conference Operator: This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.