AirJoule's Q3 2025 Earnings Call: Contradictions Emerge in R&D Strategy, Water Purchase Agreements, and Financial Performance

Guidance:

• JV full‑year 2025 spend expected at the higher end of the previously provided $17–$18M range.
• Company stated it has sufficient cash (~$26M at quarter end plus a subsequent $5M contribution) to support corporate and JV operations into 2026 commercialization.
• Productization priorities (increase chamber output, reduce system cost, ensure reliability) targeted to enable multi‑system deployments in 2026; A250 expected to precede A1000.
• Exploring Water Purchase Agreements (WPAs) where AirJoule would own/operate systems and sell water per gallon.

Business Commentary:

* Macro Trends and Demand for AirJoule Solutions: - AirJoule Technologies highlighted the explosive growth of AI infrastructure, which is driving significant demand for water and energy management solutions. - As AI workloads intensify, data centers face water and energy constraints, particularly in arid environments, which is a major challenge for the industry. - The convergence of these macro trends has created a critical need for AirJoule's platform technology, positioning the company to play a meaningful role in this transformation.

• Commercialization and Operational Milestones:
• The company achieved several critical milestones, including real-world deployment of its system in Texas, generating performance data, and validating its technology.
• Partnerships with leading industry players, such as Google, Microsoft, and Amazon, as well as recognition from the Net Zero Innovation Hub, have validated AirJoule's technology and market potential.

• These milestones are advancing AirJoule towards multi-system deployments and commercialization in 2026, strengthening its position in industrial-scale water from air solutions.

• Regulatory Tailwinds and Partnerships:

• AirJoule is benefiting from significant regulatory tailwinds, including the phase-out of high GWP refrigerants and the American Innovation and Manufacturing Act.
• These regulations create demand for alternative technologies, positioning AirJoule's refrigerant-free system as a solution to this transition.

• Partnerships with companies like Carrier to integrate AirJoule technology into HVAC systems further demonstrate the market's recognition of the company's innovative platform.

• Manufacturing and Productization Progress:

• The opening of the manufacturing facility in Newark, Delaware, signifies significant progress in scaling production capabilities and productizing the AirJoule platform.
• The company is focusing on increasing water output, reducing system costs, and ensuring reliability to deliver cost-effective and reliable systems to customers.
• These efforts are integral to achieving commercialization objectives and establishing AirJoule's leadership in industrial-scale water from air solutions.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted multiple validating milestones (Hubbard 24/7 deployment, Net Zero Innovation Hub win, ASU collaboration, ERDC ACRADA) and stated: "The progress we’ve made this quarter moves us meaningfully closer to our 2026 deployment goals." CFO: cash position and S‑3 filing provide capital flexibility to support commercialization.

Q&A:

• Question from Amit Dayal (H.C. Wainwright): I just want to go over a line from the press release that says data from Hubbard is accelerating commercial adoption. How should we sort of read this statement? Are you implying the potential pipeline, or are there some pilots that are taking place? Any clarity on this sentence would be very helpful. Also, in the last earnings call, you had talked about exploring product integration opportunities with GE Vernova. How is that going? Any color on contributing to commercialization efforts in 2026? The R&D spend was pretty low in 3Q — why? And what's the runway for the AirJoule JV after the $2.75M contribution and subsequent $5M post‑quarter?
  Response: Hubbard's 24/7 field data is catalyzing customer interest and pilot evaluations; GE Vernova integration work is in early/formulation stages; corporate R&D appears low because most R&D expense is borne at the JV (and a one‑time royalty reversal reduced corporate R&D); management says cash is sufficient to support corporate and JV through commercialization into 2026.

• Question from Jake Sekelsky (Alliance Global Partners): On the water purchase agreement model, can you comment on the types of customers showing interest? Would these be AirJoule‑owned and operated systems under this model?
  Response: Yes — WPAs envisage AirJoule owning, operating, and maintaining systems and selling water per gallon to customers lacking cheap, reliable municipal or groundwater (e.g., those who otherwise truck water), creating recurring, offtake‑like revenue.

• Question from Ryan Finks (B. Riley Principal Capital II): How important is the water purity advantage in commercial discussions with data centers and industrial customers, and how does AirJoule differentiate from other atmospheric water generation approaches? Also, how does the ASU validation help commercially or regulatory‑wise?
  Response: AirJoule's sorbent + vacuum distillation produces native distilled, zero‑TDS water and operates economically down to ~30% RH—differentiating on both quality and year‑round levelized cost of water versus conventional AWGs; ASU provides independent performance and water‑quality validation (regulatory approvals remain location‑dependent).

• Question from Sean Milligan (Needham & Company): On the WPA model, can you quantify pipeline interest (e.g., percentage of conversations)? And regarding the Net Zero Innovation Project, what is the scope/timing and expected outcomes?
  Response: WPA has broad traction — many dozens of customer discussions with strong reception and active negotiations for 2026/2027 — and will be a major commercialization route; the Net Zero Hub is a Denmark data‑center testbed to demonstrate circular waste‑heat‑to‑water use and industry visibility.

• Question from George Giannouriakis (Canaccord Genuity): For 2026 sequencing, will A250 dehumidification deployments come before A1000? And what defines success by end of 2026?
  Response: A250 (simpler two‑chamber unit) is expected to launch before the 16‑chamber A1000; success for 2026 is defined as firming a deployment pipeline and delivering products that achieve compelling dollars‑per‑gallon (or customer savings) economics.

Contradiction Point 1

R&D Spending and Focus

It involves a shift in the explanation for R&D spending, which could impact investor expectations regarding the company's research and development efforts.

Why is R&D spending low in Q3? Is the R&D completed? - Amit Dayal (H.C. Wainwright)

2025Q3: Most R&D spend is now borne at the joint venture level. The low direct R&D spend on our corporate balance sheet reflects a reversal of maintenance royalty expenses due to a restructuring of our agreement with Pacific Northwest National Laboratory. - Stephen Pang(CFO)

Can you explain the increase in R&D expenses? - Thomas Forte (D.A. Davidson)

2025Q2: R&D expenses increased approximately $13 million from the prior year. - Stephen Pang(CFO)

Contradiction Point 2

Water Purchase Agreement Model and Customer Interest

It highlights differing perspectives on the interest and traction of the Water Purchase Agreement model, which could influence the company's commercialization strategy and revenue projections.

Can you comment on the customer types interested in the water purchase agreement model? - Jake Sekelsky (Alliance Global Partners)

2025Q3: AirJoule would own and operate these systems. Interest comes from customers needing clean water without access to cheap and abundant municipal water or groundwater. They like AirJoule's solution but want assurance of consistent delivery and economics. - Brian Barton(CMO)

Can you explain the opportunity of combining AirJoule with gas turbines and reciprocating engines? - Julian Mitchell (Barclays)

2025Q2: And we have customers interested in purchasing the water from us directly as well as we can provide them the water. - Brian Barton(CMO)

Contradiction Point 3

R&D Focus and Strategy

It involves differing explanations for the company's R&D focus and strategy, which could impact investor understanding of the company's priorities and direction.

What is the current status of the FCH technology roadmap? - Andrew Silver (Zacks Investment Research)

2025Q3: We are at the point where we are very happy with how we have designed and executed this technology backlog. We are now moving forward with our plan, especially regarding our work on CO2 capture solutions. - Brian Barton(CMO)

Can you explain the increase in R&D expenses? - Thomas Forte (D.A. Davidson)

2025Q2: Our R&D efforts are also focused on developing products and services that directly address critical areas for our customers. - Stephen Pang(CFO)

Contradiction Point 4

Market and Strategic Focus

It highlights differing perspectives on the company's focus and priorities, which could influence strategic decision-making and investor confidence.

What is the current status of the FCH technology roadmap? - Andrew Silver (Zacks Investment Research)

2025Q3: Our strategy is to move more into the middle, like the 400,000 to 1 million dollar portable units. - Brian Barton(CMO)

Could you clarify how you'll allocate the $44 million to expand your addressable market and how long the expansion will take? - Rob Brown (Lake Street Capital Markets)

2025Q2: We will bring in a variety of models that go from 10,000, up to 1 million gallons per day. - Brian Barton(CMO)

Contradiction Point 5

Revenue Growth and Financial Performance

It involves differing expectations regarding financial performance and revenue growth, which are critical indicators for investors.

What drove the increase in backlog above $100 million? - Thomas Forte (D.A. Davidson)

2025Q3: The Heavy Lift team has secured 126.6 million dollars in new contracts during the quarter. - Brian Barton(CMO)

What drove the increase in R&D expenses? - Thomas Forte (D.A. Davidson)

2025Q2: In Q2, our backlog of Heavy Lift projects increased by 26 million dollars to 187 million dollars. - Stephen Pang(CFO)