NextNRG's Q3 2025 Earnings Call: Contradictions Emerge on Energy Infrastructure, Renewable Transition, Margins, Cash Flow, and Capital Constraints

Date of Call: November 17, 2025

Financials Results

• Revenue: $22.9M, up 232% YOY from $6.9M in Q3 2024; up $19.7M sequentially vs Q2 2025
• Gross Margin: 11% in Q3 2025, up from 8% in Q2 2025
• Operating Margin: Operating loss $9.0M (includes $5.6M noncash stock-based compensation); adjusted operating loss $3.4M, improved from $5.2M in Q2 2025

Business Commentary:

* Revenue Growth and Margin Expansion: - NextNRG reported revenue of $22.9 million for Q3, up 232% year-over-year from $6.9 million in Q3 of 2024, and up $19.7 million in Q2 2025. - The growth was driven by increased gallons delivered, unlocking volume-based supplier discounts, and expanding energy infrastructure initiatives.

• Operational Efficiency and Cost Reduction:
• NextNRG's gross profit margins increased from 8% in Q2 to 11% in Q3, demonstrating improved operational efficiencies and reduced costs.

• This was achieved by optimizing routes, enhancing driver efficiency, and securing more favorable supply contracts.

• Energy Infrastructure Pipeline and Market Demand:

• NextNRG's energy pipeline expanded, with over a dozen projects in progress, and several more qualified leads progressing through the pipeline.
• The increasing interest in integrated energy solutions has led to partnerships with solar hardware and battery storage companies, supporting the demand for reliable and resilient power sources.

• Investment in Emerging Technologies:
• NextNRG continues to progress in its bidirectional wireless on-charging initiative, with plans for a material update in the coming weeks.
• The company is positioned to benefit from the urgent need for expanded power generation, storage, and distribution due to growing energy demands.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management repeatedly framed Q3 as the company's strongest performance to date: "Revenue is growing, margins are expanding," CEO said. CFO reported revenue of $22.9M, "up 232% year-over-year," gross margin expansion to 11% and improving operating loss (adjusted $3.4M vs $5.2M in Q2), emphasizing momentum and pipeline progress.

Q&A:

• Question from Submitted Analyst (Submitted): The first question relates to our energy division. Can you give us more detail on the kinds of projects currently in your energy infrastructure pipeline? What types of facilities are engaging with you? And what solutions are they looking for?
  Response: Pipeline comprises municipalities and commercial facilities seeking integrated on-site solutions: power generation, advanced battery storage and smart microgrid controls—many customers already have solar and want storage+controls; NextNRG positioned as a single integrator for high-value, long-term deployments.

• Question from Submitted Analyst (Submitted): The company delivered the strongest margins in company history this quarter. How sustainable is this improvement? What are the main drivers of further margin expansion?
  Response: Management says margin expansion is sustainable and structural—driven by building density around anchor customers (route optimization and driver efficiency) and unlocking volume-based supplier discounts that lower per-unit costs.

• Question from Submitted Analyst (Submitted): You attended a conference where leaders emphasized urgent need for more power generation and infrastructure. How does this environment impact NextNRG?
  Response: Executive view: accelerating demand (AI, data centers, electrification) increases need for on-site generation, storage and smart distribution; NextNRG is well-positioned and already seeing pipeline benefits from that macro trend.

• Question from Submitted Analyst (Submitted): You've made progress reducing your operating loss this quarter but are still running a multimillion dollar loss. Can you lay out a clear timeline or framework for when investors can expect sustainable positive cash flow?
  Response: Path to positive cash flow depends on continued revenue growth, further margin expansion through scale and supplier discounts, and disciplined SG&A; management declined to give a specific date but says losses are narrowing each quarter.

Contradiction Point 1

Energy Infrastructure Pipeline and Customer Needs

It highlights a shift in the company's focus on energy infrastructure projects and the evolving needs of its customers, which could impact the company's strategic direction and investor expectations.

What types of projects are in your energy infrastructure pipeline, what facilities are engaged, and what solutions are they seeking? - Sharon Cohen(Investor Relations)

2025Q3: The pipeline includes projects for municipalities and commercial facilities, ranging from overlaying new components on existing infrastructure to full greenfield build-outs. Customers are typically seeking on-site power generation, advanced battery storage, and a smart microgrid control system. - Michael Farkas(CEO & Executive Chairman)

Can you explain the flywheel concept and its impact on the business? - Jeffrey Ramson(NextNRG Inc.)

2025Q2: We offer integrated technologies creating an energy ecosystem that combines power generation, storage, and wireless charging. This ecosystem allows us to service clients with various needs, ranging from energy generation and storage to wireless charging. By offering a mix of solutions, we cater to different customer requirements. - Michael Farkas(CEO & Executive Chairman)

Contradiction Point 2

Transition to Renewable Sources and Fuel Agnosticism

It involves the company's stance on transitioning to renewable sources and its fuel agnosticism, which could impact its market positioning and customer perceptions.

How sustainable is the margin improvement? What are the key drivers for margin expansion? - Sharon Cohen(Investor Relations)

2025Q3: Utilities have diverse methods for electricity production, and we support customers in transitioning to renewable sources. We facilitate energy efficiency regardless of fuel type, ensuring redundancy in power generation. Our technology optimizes efficiency with any fuel source, offering operational and management benefits. - Michael Farkas(CEO & Executive Chairman)

Is your technology agnostic to fuel type? - Jeffrey Ramson(NextNRG Inc.)

2025Q2: Our technology is agnostic and can optimize production efficiency across various fuel sources, including nuclear, natural gas, hydrogen, solar, wind, and coal. - Michael Farkas(CEO & Executive Chairman)

Contradiction Point 3

Sustainable Margin Improvement

It involves differing statements about the sustainability of margin improvements, which are crucial for investor confidence and financial planning.

How sustainable is the margin improvement? What are the key drivers of further margin expansion? - Sharon Cohen (Investor Relations)

2025Q3: Our margin expansion is sustainable due to structural changes in the business. By building density around anchor customers, we're optimizing routes, improving driver efficiency, and reducing driver expenses. - Joel Kleiner(CFO)

Can you explain the cost advantages that arise as the company scales? - Michael Bapis (Affinity Wealth Partners)

2022Q4: Today, we're moving closer to our structural cost advantage. Excluding the gain on the sale of our stake in Westar, our total structural cost advantage was $141 million for the fiscal year. - Michael McConnell(CEO)

Contradiction Point 4

Revenue Growth and Cash Flow Projections

It involves conflicting statements about the timeline and expectations for achieving sustainable positive cash flow, which is a critical financial milestone.

When can investors expect a clear timeline or framework for sustainable positive cash flow? - Sharon Cohen (Investor Relations)

2025Q3: Positive cash flow is tied to continued revenue growth, further margin expansion, and disciplined SG&A spend. The path to sustainability is not guided to a specific date, but we're seeing narrowing losses and expanding margins each quarter. - Michael Farkas(CEO)

When do you expect to generate positive free cash flow or EBITDA? - M. Bruce Berkowitz (Fairholme Capital Management)

2022Q4: We are focused on reducing our losses, which were $15.1 million in Q4, $50 million in the year and $123 million for the last 3 years. We're focused on reducing the equity issuance we've done in the past. - Michael McConnell(CEO)

Contradiction Point 5

Capital Constraints and Expansion

It highlights differing perspectives on the role of capital constraints in the company's expansion, which is essential for understanding the company's growth strategy and financial challenges.

Can you provide a timeline or framework for when sustainable positive cash flow can be expected? - Sharon Cohen(Investor Relations)

2025Q3: Positive cash flow is tied to continued revenue growth, further margin expansion, and disciplined SG&A spend. The path to sustainability is not guided to a specific date, but we're seeing narrowing losses and expanding margins each quarter. - Michael Farkas(CEO)

How did the hurricane affect third-quarter gallon deliveries? - Tate Sullivan(Maxim Group)

2022Q3: We are actively pursuing growth opportunities, including expansion in additional markets and development of new revenue streams. However, we recognize that we cannot pursue every opportunity without additional capital. - Arthur Levine(CFO)