Beam Global's Q3 2025 Earnings Call: Contradictions Emerge on International Expansion, Ev Arc Mix, and Manufacturing Capacity

Date of Call: November 14, 2025

Financials Results

• Revenue: $5.8M in Q3 2025; YTD Sep 30, 2025 $19.2M vs $40.9M YTD Sep 30, 2024 (decline largely due to order timing)
• Gross Margin: Q3'25 gross profit -$28K (negative 0.5%); Q3'25 ex noncash D&A would be 13% (gross profit $0.7M) vs Q4'24 ex noncash 18% (gross profit $2.0M); YTD Sep 30'25 gross margin 10% vs 12% YTD Sep 30'24; YTD ex noncash margin 22% vs 18% in '24 (+4 ppt); includes $0.8M noncash D&A.
• Operating Margin: Operating expenses $4.8M in Q3'25 vs a $0.05M credit in Q3'24; total operating expenses including noncash $26.8M in Q3'25 (incl $15.4M noncash, mainly $10.8M goodwill impairment); ex noncash operating expenses $11.4M (improvement $1.8M vs prior year). Q3'25 net loss $4.9M vs $1.3M net profit in Q3'24; non‑GAAP Q3'25 net loss ex noncash $2.8M vs $3.0M in Q3'24 (improved $0.2M, 7%).

Guidance:

• Expect revenue growth and improved fixed‑overhead absorption as order timing normalizes.
• Delayed ~$3M federal‑funded EV ARC order is expected to be deployed after re‑budgeting, likely in H1 2026 (not expected in Q4'25).
• Confirmed backlog $8M (purchase orders); additional awards/tenders in Europe and Middle East are expected to convert to POs.
• Product gross margins running ~44% YTD; YTD ex‑noncash gross margin improved to 22% vs 18% prior year.
• Geographic (Europe, Middle East) and product diversification (batteries, BeamFlight, BeamWell, BeamBike) expected to drive new and recurring revenue in 2026.

Business Commentary:

• Revenue and Profitability Decline:
• Beam Global reported revenue of $5.8 million for Q3 2025, a significant decrease compared to $40.9 million for the same period in 2024.

• The decline was attributed to delays in federal funding for EV charging infrastructure projects and political unrest affecting European operations.

• Operating Expense Reduction:

• The company's total operating expenses were $4.8 million for Q3 2025, a 30 percentage point improvement from last year.

• Efficiency improvements and cost reductions, particularly in salaries, benefits, and marketing expenses, contributed to this reduction.

• Gross Margin Impact:

• Beam's gross margin for Q3 2025 was a negative 0.5%, impacted by overhead allocations on reduced sales.

• This was primarily due to the fixed overhead costs absorbed in a lower number of sales recognized during the quarter.

• Diversification and International Growth:

• Revenues from international customers accounted for 39% of all revenues in 2025, compared to 20% in 2024. Enterprise customers also increased to 67% of revenues from 31% in 2024.
• Diversification into new markets and product portfolios, like the partnership with Platinum Group for Beam Middle East, is driving this growth.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • "We expect the company's revenue to grow"; CEO: "I'm very bullish about our opportunities here"; described new Platinum Group JV in Middle East as a strong credibility driver; "we're 1,000x better company today than we were back in 2020." These statements emphasize confidence in future growth despite near‑term order timing headwinds.

Q&A:

• Question from Tate Sullivan (Maxim Group LLC, Research Division): On the wireless charging, had you gone through sales efforts with wireless charging before and are you seeing interest in the Middle East?
  Response: Wireless charging is critical for autonomous vehicles and drones; standards and market demand (autonomous/drone firms) now exist, so Beam expects increased activity and sales in coming weeks/months.

• Question from Tate Sullivan (Maxim Group LLC, Research Division): On the battery/energy storage business, is there a long trial period before customers place orders or is this a special situation?
  Response: Timing varies by customer: some (e.g., the referenced drone customer) can move quickly to orders after modest development, while others require longer development—Beam often receives paid engineering during that process.

• Question from Ryan Pfingst (B. Riley Securities, Inc., Research Division): Can you share the breakdown of the larger pipeline between battery opportunities and EV ARC opportunities at a high level?
  Response: Pipeline is increasingly diversified beyond EV ARC into batteries, BeamBike and other products with growing contributions from Europe and commercial customers; federal customer share has materially declined.

• Question from Ryan Pfingst (B. Riley Securities, Inc., Research Division): How should we think about the cadence for Beam Middle East to show up in backlog and results?
  Response: Beam Middle East, backed by Platinum Group, is generating real near‑term customer interest and credibility; sales should convert through normal processes relatively quickly but no precise timing given—announcements expected in the not‑too‑distant future.

• Question from Noel Parks (Tuohy Brothers Investment Research, Inc.): Where does total manufacturing capacity stand—flat year‑over‑year or has it grown?
  Response: U.S. capacity is underutilized; European acquisition added ~5x factory space and Kraljevo is more efficient—Kraljevo will supply Europe and Middle East until local assembly/manufacturing is justified.

• Question from Noel Parks (Tuohy Brothers Investment Research, Inc.): Any trends in maintenance/repair expense as the EV ARC installed base ages?
  Response: Thousands deployed and product is durable; warranty costs exist mostly from third‑party component failures—vertical integration (electronics acquisition) should reduce failures, warranty expense and improve margins.

• Question from Dick Grill (Private Investor): Do you foresee the share price rising from current levels and will you offer dividends?
  Response: Share price weakness is due to broad rotation out of growth stocks; management believes fundamentals have materially improved and expects eventual recovery but cannot predict timing; dividends are not a current priority.

Contradiction Point 1

International Expansion and Sales Focus

It involves the company's strategic focus and market expansion strategy, which are critical for understanding Beam Global's growth trajectory and market positioning.

Can you explain the timing and progression of Beam's opportunities in the Middle East? - Ryan Pfingst (B. Riley Securities, Inc.)

2025Q3: The Middle East presents a strong opportunity, with significant interest in Beam's products. The partnership with the Platinum Group provides credibility and access to high levels. The market is ripe for Beam's solutions. - Desmond Wheatley(CEO)

Is the energy storage business primarily focused on U.S. customers? Is international expansion feasible? - Tate Sullivan (Maxim Group)

2025Q2: The majority of the energy storage customers are still U.S.-based, but there is a strong potential for international expansion, particularly in Europe and the Middle East, where there is significant interest in new technologies. - Desmond Wheatley(CEO)

Contradiction Point 2

Opportunities and Sales Mix between Battery and EV ARC Products

It highlights conflicting information about the sales mix and opportunities between battery and EV ARC products, which is important for understanding the company's growth strategy.

What is the breakdown between battery and EV ARC opportunities in the award pipeline? - Ryan Pfingst (B. Riley Securities, Inc.)

2025Q3: Opportunities are increasing across both batteries and other products. EU products are contributing significantly, with a focus on commercial customers and not federal ones. The Middle East also presents new opportunities. - Desmond Wheatley(CEO)

Is the energy storage business primarily a U.S. customer business? Can it expand internationally? - Tate Sullivan (Maxim Group)

2025Q2: The majority of the opportunity in the pipeline has been allocated to energy storage. We've got a $35 million backlog for batteries, and that's really driven by EV ARC opportunities. - Desmond Wheatley(CEO)

Contradiction Point 3

Manufacturing Capacity and Utilization

It involves the company's manufacturing capacity and utilization, which are crucial factors in determining production levels and meeting demand, impacting revenue and operational efficiency.

What is your current total manufacturing capacity, and has it grown year-over-year? - Noel Parks(Tuohy Brothers Investment Research, Inc.)

2025Q3: Manufacturing capacity is underutilized due to reduced sales in the U.S. But significant capacity exists in Europe, with plans to assemble products in the Middle East when volumes increase. - Desmond Wheatley(CEO)

What is the current state of manufacturing capacity in Europe? - Noel Parks(Tuohy Brothers)

2025Q1: European capacity can handle about 5x the U.S. output. Legacy businesses are already growing in Europe, but supply chain is a hurdle. - Desmond Wheatley(CEO)

Contradiction Point 4

Role of EV ARC in Product Mix

It highlights the company's strategic focus on product mix, which can influence sales growth and market positioning.

What is the split of battery opportunities versus EV ARC opportunities within the larger award pipeline? - Ryan Pfingst(B. Riley Securities, Inc.)

2025Q3: EV ARC remains a significant opportunity, especially with expansion into the Middle East. - Desmond Wheatley(CEO)

How do you plan to balance the product mix between EV ARC and new products in 2025 or over the next few years? - Ryan Pfingst(B. Riley Securities)

2025Q1: I'm enthusiastic about the adoption of new products like BeamPatrol, BeamBike, and BeamScoot. I expect them to start generating orders soon and become significant contributors in future sales. - Desmond Wheatley(CEO)

Contradiction Point 5

Manufacturing Capacity Utilization

It involves differing statements about the utilization of manufacturing capacity, which could impact production and supply chain planning.

What is your total manufacturing capacity, and has it grown year-over-year? - Noel Parks(Tuohy Brothers Investment Research, Inc.)

2025Q3: Manufacturing capacity is underutilized due to reduced sales in the U.S. But significant capacity exists in Europe, with plans to assemble products in the Middle East when volumes increase. - Desmond Wheatley(CEO)

Can you provide an update on your product launch schedule and clarify whether these products will generate initial sales this year? - Tate Sullivan(Maxim Group)

2024Q4: I think on our -- on our manufacturing side, we've got enormous capacity in Europe, and we're continuing to build capacity, as well as finish some North American capacity. - Desmond Wheatley(CEO)