Pioneer achieves 150% revenue growth to $8.4M, driven by Eboost orders and positive outlook for HomeBoost launch.

OPERATOR - (00:00:00)

Materially. Please refer to the cautionary text regarding forward looking statements contained in the earnings release issued earlier today, Thursday, August 14, which applies to the content of the call. I would now like to turn the call over to Nathan Masrick, Chairman and CEO. Nathan, please go ahead. Thank you, Brett. Good afternoon and thank you all for joining us today. I am pleased to report that we delivered strong financial results for the second quarter of 2025, continuing a trend that really began mid year last year 2024. Specifically, revenue increased 150% year over year to $8.4 million and our non GAAP operating income from continuing operations was a positive $218,000. A significant driver of the second quarter revenue growth and profitability improvement was continued execution on the 25 unit E Boost order for one of the largest public school districts in the United States. This landmark project to date the largest RFP ever awarded for a mobile charging system which directly supports charging the school district's initial fleet of 200 electric school buses. After delivering the initial 10 units in the first quarter, we delivered the majority of the balance during the second quarter. While the early units carried higher costs due to the complexity of ramping up a project of this scale, our operations team achieved meaningful gains in productivity and cost optimization as the build out progressed. As a result, gross profit on these units more than doubled in the second quarter. Additionally, this particular school district is scheduled to receive another 600 electric school buses over the next two years and we expect to provide additional E Boost units to support this ongoing program in the second quarter. We also delivered initial units under our agreement with our channel partner SparkCharge. The Spark Charge deal, potentially worth up to $10 million, is a direct result of Pioneer's collaborative relationship with this customer and more importantly reflects the increasing demand for mobile, clean and rapidly deployable EV charging solutions. Strategically, we continue to be highly encouraged by the breadth and quality of the opportunities ahead. We are actively quoting and designing solutions for a host of government type agencies, transit authorities, Robotaxi enterprises, shipping ports and several major national package delivery providers as they all advance their commitment to electrifying their own fleet operations. The electric school bus market in particular continues to show strong momentum and remains a key focus area for us. These end customers are fully committed to a zero emission future and typically have already ordered and received a significant number of either buses, vans and other fleet vehicles, making a return to traditional vehicles highly unlikely. We also see immediate and long term growth potential in autonomous mobility, particularly the burgeoning Robotaxi segment which is essentially an all electric market as the adoption of Robotaxis accelerates, the demand for flexible scalable charging infrastructure is growing in parallel. We believe Pioneer's mobile charging platform is uniquely suited to meet the needs of this market, offering an ideal solution for decentralized on demand EV charging. Simply put, the growth of Robotaxis aligns directly with Pioneer's growth. At the end of the second quarter our total backlog was approximately $18 million, representing a decline of 23% compared to the prior quarter, primarily due to the fulfillment of several larger orders that contributed to our strong revenue growth year to date. Beyond the current backlog, we are seeing continued momentum in our growing sales pipeline. We are actively engaged in discussions with dozens of municipalities, transit authorities, shipping ports, autonomous driving enterprises and several major national package delivery providers. In addition to our core E Boost platform, we are preparing to launch our residential and light commercial power system Home Boost in the second half of 2025. Home Boost integrates a prime rated natural gas engine with optional DC fast charging, giving homeowners and small facility owners the ability to generate 100% of their energy and charging needs 24. 7 if desired or needed. Home Boost essentially functions as a private power plant operating independently or alongside the grid and is ideally suited for both residential and critical commercial loads such as medical facilities and small scale manufacturers. Early feedback from prospective customers and partners has been overwhelmingly positive and we believe this innovative product will be a key growth driver for 2026 and beyond. The introduction of Home Boost is a significant expansion of our addressable market and product scope. In contrast to E Boost, where E Boost charging features lead the value proposition to the customer, Home Boost's delivery of pure, resilient power leads Home Boost's value proposition. Fast DC charging is an additional feature of the unit. In summary, the second quarter marked another meaningful step towards a step forward in our growth trajectory and path to profitability. Our performance reflects not only strong execution and increasing operational efficiency, but also the accelerating demand for innovative off grid power solutions across multiple sectors. Looking ahead, we remain focused on scaling our core business, delivering on our backlog and planning the launch of Home Boost. Our strong performance in the first half of the year combined with increasing visibility into the second half reinforces our confidence in both the strength of our business and the demand environment. With that, I will turn the call over to Walter.

Walter - (00:07:02)

Thank you Nathan and good afternoon everyone. Please be advised that we have included a non GAAP financial measure of operating income from continuing operations, which excludes corporate overhead expenses. Research and development costs, depreciation and amortization expense and non recurring professional fees. Please refer to our press release issued earlier today, August 14, 2025 for further information, including a reconciliation between GAAP and non GAAP financial measures. The press release can be found on our website at www.pioneerpowersolutions.com/investors investors unusual such non GAAP measures should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with US gaap. Instead, we believe this non GAAP measure should be used to supplement our financial measures derived in accordance with US GAAP in order to provide a more complete understanding of the trends affecting the business second quarter revenue was 8.4 million compared to 3.4 million in the year ago quarter, an increase of approximately 150%. The increase was primarily due to a significant increase in sales and rentals of our mobile EV charging platform E Boost. Second quarter gross profit was 1.3 million, where a gross margin of approximately 16% compared to a gross profit of 641,000 or a gross margin of approximately 19% in the second quarter of last year. The increase in gross profit was primarily due to the significant increase in sales and rentals of the company's E Boost equipment, along with improved profitability from the delivery of most of the remaining units in the 25 unit E Boost order for one of the largest public school districts in the United States. These gains were supported by enhanced productivity and cost optimizations achieved by our operations team as the build out advanced. During the second quarter of 2025, Pioneer incurred an operating loss from continuing operations of 1.7 million, unchanged from the 1.7 million operating loss from continuing operations recorded during the second quarter of last year. During the second quarter of 2020 5, Pioneer generated non GAAP operating income from continuing operations of 218,000, which again excludes corporate overhead expenses, R and D expense, depreciation and amortization and non recurring professional fees as compared to a non GAAP operating loss from continuing operations of 137,000 for the same quarter in 2024, a year over year improvement of 355,000. Net loss from continuing operations for the second quarter of 2025 was 1.2 million compared to a net loss from continuing operations of 1.7 million during the second quarter of 2024, an improvement of approximately 500,000. Taking a look at our balance sheet as of June 30, 2025, we had cash on hand of 18 million, 0 bank debt and working capital of approximately 24 million compared to 41.6 million of cash on hand, 0 bank debt and working capital Of 26.7 million as of December 31, 2024. The cash on hand as of June 30, 2025 represents cash per share of approximately $1.62. The decrease in our cash on hand during the first half of the year is primarily due to the payment of a one time special cash dividend of an aggregate of 16.7 million in January and the payment of federal and state income taxes totaling approximately 4 million during the second quarter. Today we are reaffirming our guidance for revenue of 27 million to 29 million for the full year of 2025. This concludes my remarks. I will now turn the call back over to Nathan.

Nathan Masrick - Chairman and CEO - (00:11:50)

Thank you, Walter. Operator, you can open the lines for questions.

OPERATOR - (00:11:57)

Thank you. Ladies and gentlemen, we will now be conducting the question and answer session. If you'd like to ask a question, please key in star and then one on your telephone keypad. A confirmation tone will indicate that a line is in the question queue. You may key in star and then two. To leave the question queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from Rob Brown of Lake Street Capital. Please go ahead.

Rob Brown - Equity Analyst at Lake Street Capital - (00:12:38)

Good afternoon and congratulations on all the progress.

Nathan Masrick - Chairman and CEO - (00:12:41)

Yeah, thank you, Rob.

Rob Brown - Equity Analyst at Lake Street Capital - (00:12:44)

First question's on the EBOOST order with the charging services company. I think you said it could be up to 10 million, just a little color on kind of how that rolls out. And what are the variables on the sizing there?

Nathan Masrick - Chairman and CEO - (00:12:57)

The real variables are what sizes they want, when they want them. It covers. There's a certain opening that they have. There's a window where we fixed pricing for buying, we fixed pricing for leasing, and we're holding certain inventory for them. So without disclosing too much, that's kind of how that works. We tried to get a together, we tried to get a fix on what they think they'll be using over call it a 24 month period and locking everybody into certain parameters.

Rob Brown - Equity Analyst at Lake Street Capital - (00:13:36)

Okay, perfect. Thank you. Then on the pipeline, I think there were several markets that were quite active and you said dozens of potential municipalities. But just a sense of how that pipeline matures, the timing on it, and how does that sort of build for orders that give you some visibility into next year?

Nathan Masrick - Chairman and CEO - (00:13:59)

Yeah, I mean, we'll be making announcements, as things happen, of significance. So that will help guide, let's say in the next couple of months, you know, government agencies or government themselves, whether it be state or local, you know, work at different paces. Everybody's different. They're almost like people. So that's kind of a slower pace. Usually the good is that they've made a commitment or they're halfway through a deep seated commitment to going all electric and are trying now to come up with the best solutions or, or mixture of solutions to support their charging. That's a wide market, a very slow moving market. Private business, however they're traded, whether they're privately held or they're publicly traded, businesses, you know, are motivated differently. You know, some of that helps us, some of it doesn't, but the speed of those markets are much quicker. So it's kind of, it's like what we're doing every day. It's a blend. The large school district is obviously that's part of a large metro city on the west coast of the United States. Spark Charge is a privately held business that is mostly serving private businesses, non government type businesses. The robo taxi market, which if you would have asked me three months ago, I would have said it's all talk, talk, talk, talk and we don't see anything. But they're way down the road in spending money and providing solutions and rolling out in a competitive way with each other, which makes it a much more significant market for us going forward and frankly probably the fastest as far as response time now to possible. It will be the fastest market for us.

Rob Brown - Equity Analyst at Lake Street Capital - (00:16:01)

Okay, thank you. And then I guess in the Home Boost product, you're talking about a launch here in the second half. Could you give us a sense of some of the milestones you expect with the rollout and how you see that launch at this point?

Nathan Masrick - Chairman and CEO - (00:16:16)

Yeah, so the launch has been a little bit delayed. We wanted to kind of roll out in July. All the delay is on me. We've been experimenting, or me primarily experimenting with it mechanically and electrically to both make sure its fit and form is super functional, attractive and not too big and easily transportable, and made some electrical changes to make things a little bit easier and more cost effective for everybody. But we're not factoring in any revenue for 25. That would be a big bonus. I really don't expect that at all to happen. We do expect orders to happen in 2025, accelerating in the first quarter of 2026, and then hope it's a meaningful part of our revenue for 2026.

Rob Brown - Equity Analyst at Lake Street Capital - (00:17:20)

Okay, great, thank you. I'll turn it over.

Nathan Masrick - Chairman and CEO - (00:17:23)

Thank you, Rob.

OPERATOR - (00:17:27)

Our next question comes from Manit Dale of HC Wainwright. Please go Ahead.

Manit Dale - Equity Analyst at HC Wainwright - (00:17:33)

Thank you. Good afternoon, everyone. Nathan, congrats on another strong quarter. Good to see the margins bounce back. You know, on that front. We expect margins to Should we expect margins to stay at these levels and maybe move higher, given that initial buildup costs are now out of the way?

Nathan Masrick - Chairman and CEO - (00:17:54)

Yeah, I think that we're always trying to improve the margins. So I think that the margin. The margin. The gross margins themselves should do no less than where they are and hopefully improve in the third quarter, of which, you know, we're halfway through call it. And. And improve. Continuing to improve in the fourth quarter. How much is, you know, is really on us, but that's. There should be no more margin erosion.

Manit Dale - Equity Analyst at HC Wainwright - (00:18:25)

Okay, understood. Thank you for that. And then, you know, it looks like your pipeline is really solid, Nathan. I mean, lots of opportunities from new avenues that you probably were not anticipating earlier. Like you said, the robotaxi stuff, you know, on the other side of it, you know, how are we going to manage, you know, this level of interest with the capacity we have? I'm just trying to get a sense of, you know, with the setup now or today, you know, how much revenues can the company support with the available capacity, etc. And how are you thinking of managing that part of the business going forward?

Nathan Masrick - Chairman and CEO - (00:19:01)

Yeah, so that's a discussion that we're having all the time in response to what we believe we can do. And then, of course, we have to respond in real time. So, you know, for the large order out west, the 25 unit order, we primarily for 22 out of those 25 units, you know, we used a contract manufacturer right there in Los Angeles. We would not have been able to deliver, you know, definitely not on time or not that amount in our current facility in Minneapolis for the balance of the year. We believe that we can deliver the balance of the orders in the year. Again, the mix helps. It's larger units with higher ticket prices, and we're able to do that in, I guess, a balanced and deliberate fashion. We will not be manufacturing this. We decided a while ago we will not be manufacturing the Home Boost unit ourselves. We're dealing 100% with one contract manufacturer in Minnesota. So really, I think that would be the majority of the growth in 2026, hopefully, is going to come from the Home Boost product. We kind of have that covered. What you're addressing is kind of the middle. You know, we get another 25 unit type order. Is it all the same? Not all the same. And how we handle that will probably do the same. We'll handle with a mix of doing it internally and or using contract manufacturers. There's no plan to expand the capacity in Minneapolis and there's no reason to fix from a regional point of view on somebody yet.

Manit Dale - Equity Analyst at HC Wainwright - (00:20:57)

Okay, well that's understandable from a revenue concentration perspective. Is majority of the revenues right now coming from states like California. And how do you expect this to evolve as homeboost comes to the market and maybe other solutions you bring to the market?

Nathan Masrick - Chairman and CEO - (00:21:15)

Yeah, thank you. That's a great. Right now it's definitely. California definitely is number one. And I don't see that really changing the market is just too big, too strong and there's too much incentive for the users to go electric and therefore helps with our solutions. Listen, success of Home Boost would be the greatest avenue for us diversifies the market. It's really as I said in the prepared remarks, it's leading with the power solution. Charging is an important but a feature. It's not necessary for the user to actually need the charging. And you really touched on something because again, we don't trumpet it yet because we haven't done enough but we're doing more and more or guiding to expanding the business to address more pure power type applications, bespoke distributed generation where we can help with our expertise in the generator part of the business so that we're less, I guess less relying on incentives to fuel the business. No pun intended.

Manit Dale - Equity Analyst at HC Wainwright - (00:22:36)

Understood. Also along those lines, Nathan, so you're not going to be sort of constrained by these federal budget cuts, et cetera because most of your customers are local, municipal, state level from for folks in that segment. The rest of them are private or public companies. Is that how we should look at it?

Nathan Masrick - Chairman and CEO - (00:22:58)

I would look at it with yes, with a caveat that federal budget cuts or whatever you want to call it, abandoning certain incentives, that doesn't help. Even states as rich are as strong as California and other states. Everybody likes likes when the federal government helps them out now that they've got to do all these incentives on their own and they are committed. Yes, that's true. But you know, in any market you take your foot off the pedal a little bit, it's not a positive for that particular market. So that's the caveat to what you're saying? Yeah, California's committed, Washington's committed, Oregon's committed, you know, Arizona's committed. In deep seated ways. It's them on their own.

Manit Dale - Equity Analyst at HC Wainwright - (00:23:51)

Okay, that's all I have, Nathan. I'll take my other questions offline. Thank you.

Nathan Masrick - Chairman and CEO - (00:23:56)

You're very welcome.

OPERATOR - (00:24:00)

Well, ladies and gentlemen, just a reminder, if you'd like to ask a question, please key in one. My apologies. Please key in star and then one on your telephone keypad. Our next question comes from Howard Root who is a private investor. Please go ahead.

Howard Root - Private Investor - (00:24:20)

Good afternoon. Thanks for taking my question and congratulations on the great growth in the quarter. That's very impressive.

Nathan Masrick - Chairman and CEO - (00:24:26)

Thank you. Thank you, Howard.

Howard Root - Private Investor - (00:24:28)

Great. A couple of little questions. First for me on the gross margin, I'm impressed by going from 2% to 16% in one quarter. Quarter.

Nathan Masrick - Chairman and CEO - (00:24:36)

But as you look forward, I see that you answered the prior question. That should tick up hopefully. But when you bring HomeBoost on, will that be a temporary drag on gross margins as you or is that going to improve it longer term? How do you see the two products matching? Yeah, HomeBoost, you know, because we're not, I mean we have obviously, you know, engineering and design and you know, one time sunken cost and very little maintenance cost. But we're not going to be manufacturing the product. So we pretty, other than the SGA associated with it, we have a very fixed idea of what it's going to cost us. We're going to be pricing at a level that is going to be a consistent. Should move, especially with more volume, should move the gross margins up.

Howard Root - Private Investor - (00:25:25)

Okay, great. Is there a target gross margin you see with your overall business? Are you shooting for target 20 or 25% or is that 25% too much to ask in your product line?

Nathan Masrick - Chairman and CEO - (00:25:36)

Yeah. So if you take the full mix of the business, it really would depend on the success of Homeboost. 25% is not too much internally, longer term, we're asking for more. We're asking for 30 plus because as Eboost continues to grow, for the most part, when we want to, you know, we're taking on service for those units as well. And the service business is right there and it's becoming a more significant piece of what we're doing. So plus 30 is really the more medium term goals for us.

Howard Root - Private Investor - (00:26:12)

Great, great. And then I noticed a $1.4 million cash usage kind of listed as a sales type lease origination. Could you explain what that was? Is that a one time item or is that ongoing?

Nathan Masrick - Chairman and CEO - (00:26:26)

That was with the customer. We did a capital lease with them. So that's the use for it. That's how we booked it.

Howard Root - Private Investor - (00:26:35)

Okay. Is that a customary thing going forward or is that just a one off?

Nathan Masrick - Chairman and CEO - (00:26:41)

We're taking leasing opportunities kind of on a step by step basis. The now that you mention, I mean, I'll say you Know, we have X. And I don't even remember off the top of my head, you know, what we're expecting to do in lease or rental revenue for this year. But it is something that we would like to grow with the right customers, you know, under the right circumstances. You know, if you have a good counterparty, leasing is a much more profitable business business for us. It's a much higher return on assets for us.

Howard Root - Private Investor - (00:27:18)

Okay. And then in terms of guidance now, in the first half, you've done a little over 15 million and you're guiding to 27 to 29 million for the year, which would mean a little bit less in the second half. And I can kind of guess at that based on that large order and lumpiness as you're ramping up. But could you just give a little bit more color on how you get to the second half guidance being down from the first half?

Nathan Masrick - Chairman and CEO - (00:27:42)

Yeah. The real flip was that there were some units that we were able to get out really in June that I didn't expect that we'd be able to. You know, we don't. There are many things we don't do, but one is, you know, we don't sandbag it. You know, if we could invoice it, we did it. Did it make the revenue a little higher this quarter? It would be nice if it was, you know, a perfect form up through 25. Yeah. But I mean, if we can do it, then we're applying the labor and material to it and the customer is ready to take it. We invoice it. So it's just, I mean, we're so small that, you know, $2 million makes a big difference.

Howard Root - Private Investor - (00:28:23)

Okay, that's what I thought. And then in terms of the backlog at 18 million, is all of that $10 million order in your backlog or how do you define it? Defines backlog differently.

Nathan Masrick - Chairman and CEO - (00:28:35)

Yeah, so we define it the same way for at least, you know, it's actually non cancelable purchase orders that we expect to deliver in less than 12 months. So it's still the same.

Howard Root - Private Investor - (00:28:47)

Okay. All right. And then finally on the competitive side, just general terms, is there anything new in the competition on either the EBOOST or the homeboost product lines that you see out there or how do you see you're stacking up against the competition now?

Nathan Masrick - Chairman and CEO - (00:29:02)

Yeah, eboost, if anything, there's less, you know, charging has been tough. Some of the people who've started or tried to imitate, whether it's us or somebody Else or use a battery solution or even diesel type solution. Whatever it was, it doesn't really make a difference. You know, there's not enough air in the tank for everybody to keep going. So that's been actually unfortunate for those people, the employees and investors in some of those businesses. But that's been a benefit to us. On the Home Boost, we don't see anything yet. We're trying to be a little bit stealthy with it and not come out full force until we are actually ready to be full on it because we want to get the advantage of a first mover. But not really. Any competition to E Boost is, I don't want to say all the time, but 99% of the time is around the battery type product, which we don't really compete with that. You know, we're not, we're not. That's low power, low power density, much more expensive. And, you know, we, I don't want to say in a dismissive way, you know, we can do that too, and are contemplating even offering those solutions for those customers who really, really want that as part of their solution just to keep people out of this business.

Howard Root - Private Investor - (00:30:33)

Well, great, great. Congrats on the excellent quarter and the great work. Thanks.

Nathan Masrick - Chairman and CEO - (00:30:37)

Thank you, Howard.

OPERATOR - (00:30:42)

Thank you. Our next question comes from Bruce Geller of Geller Ventures. Please go ahead.

Bruce Geller - Investor - (00:30:49)

Hi, good afternoon.

Nathan Masrick - Chairman and CEO - (00:30:52)

Hey, good afternoon, Bruce.

Bruce Geller - Investor - (00:30:54)

Oh, hi. Do you see any potential application for your product to provide backup power to the data center market?

Nathan Masrick - Chairman and CEO - (00:31:04)

Yeah, so that's a big question. And I don't want to launch into a, you know, I don't know, a soliloquy on data centers today and power and so forth, but right now, pure backup power for a data center, you know, these units are too small. You know, even the largest unit that we do is, you know, that would be data Centers, you know, 1992. That's the level you talk seriously. You know, through our old, through the Volterras business, you know, the switchgear business that we sold, you know, we're intimately involved in that business. We were and you know, continue to monitor that business because we have an equity stake in it. You know, the amount of power that they're sucking and the amount, you know, per node of what backup is. You know, the bottom is 11 megawatt already and it's 99% at a time still. Diesel set, monster diesel, reciprocating engines.

Bruce Geller - Investor - (00:32:02)

Gotcha. To the point you just made.

Nathan Masrick - Chairman and CEO - (00:32:06)

What's the company's remaining equity stake in that business? It's about 6% in that platform and the business is doing extremely well. And, you know, we hope to benefit, you know, one day from, you know, from the value there. Great.

Bruce Geller - Investor - (00:32:27)

Thank you.

Nathan Masrick - Chairman and CEO - (00:32:29)

You're welcome.

OPERATOR - (00:32:34)

Our next question comes from Chris Buchowski, who's a private investor. Please go ahead.

Chris Buchowski - Private Investor - (00:32:41)

Hello. Congratulations on the great results from me as well. My question was already asked and answered. I also had the data center question. So thank you for addressing that. So I would just like to say good luck to us all.

Nathan Masrick - Chairman and CEO - (00:32:57)

Thank you. Chris. Thank you for calling in.

Chris Buchowski - Private Investor - (00:33:01)

No problem.

OPERATOR - (00:33:08)

Thank you, ladies and gentlemen, with no further questions in the question queue, I will now hand over for closing remarks.

Nathan Masrick - Chairman and CEO - (00:33:17)

Thank you, operator. With the robust sales pipeline, expanding market opportunities, and a clear path towards profitability, we believe Pioneer is exceptionally well positioned to lead in the rapidly evolving power and electric mobility landscape. Thank you all for joining. Thank you all for your continued support. And we look forward to updating you all on our next earnings call.

OPERATOR - (00:33:46)

Thank you. Ladies and gentlemen. That concludes this event. Thank you for attending. And you may now disconnect your lines.