Street Calls of the Week
Introduction & Market Context
American Battery Technology Company (NASDAQ:ABAT) presented its Q3 FY2025 financial results on May 15, 2025, highlighting significant progress in both its battery recycling operations and lithium production technology. The company, which focuses on creating a closed-loop battery materials supply chain, reported its first meaningful revenue generation while advancing several strategic initiatives.
ABAT shares have shown volatility over the past year, trading between $0.73 and $4.11, with the stock currently at $2.525, up 5.65% following the presentation.
Quarterly Performance Highlights
ABTC reported its first significant revenue of $1.0 million in Q3 FY25, compared to zero revenue in the same quarter last year. This milestone reflects the company’s transition from development to commercial operations in its battery recycling business. Despite this progress, the company reported a Cash Cost of Goods Sold of $2.3 million and Total Cost of Goods Sold of $3.7 million, indicating operations are not yet profitable.
The company has substantially increased throughput at its first battery recycling facility, more than doubling the total mass of battery material recycled while implementing multi-shift, 24/7 operations.
As shown in the following financial summary table:
The company’s cash position improved to $7.8 million from $6.0 million year-over-year, bolstered by increased government grant funding, which rose from $1.2 million to $2.0 million. ABTC also reported a significant increase in contracted government grants, which grew from $66.6 million to $205.7 million, and newly awarded transferrable investment tax credits of $59.6 million.
Battery Recycling Business Progress
ABTC has made substantial operational progress in its battery recycling business, implementing round-the-clock operations and increasing both shift counts and operators per shift to match growing battery feedstock throughput. The company continues to engage with multiple strategic partners for sourcing feedstock and selling recycled battery products.
The company’s circular business model aims to create a closed-loop system for battery materials, as illustrated in this diagram:
This approach addresses the growing need for sustainable battery materials as electric vehicle adoption increases. By recycling lithium-ion batteries from various sources including EVs, stationary storage, and consumer electronics, ABTC aims to reduce dependence on new mining while recovering valuable materials.
Lithium Production Developments
In addition to its recycling operations, ABTC reported significant progress in its primary lithium production business. The company completed its fourth drill program at the Tonopah Flats Lithium Project in Nevada, with core samples being assayed and characterized to evaluate the property and inform a pre-feasibility study.
ABTC has successfully completed a continuous, multi-week operation producing battery-grade lithium hydroxide (LiOH) material using its proprietary claystone-to-LiOH technology. Based on this success, the company has designed a commercial-scale lithium refinery with a planned capacity of 30,000 tonnes of lithium hydroxide per year.
A major development for the lithium business is a Letter of Interest from the Export-Import Bank of the United States for a $900 million low-interest loan, which could significantly accelerate the company’s production capabilities. Long-term commercial offtake agreements are reportedly under negotiation.
Financial Position and Outlook
While ABTC’s operating expenses increased significantly, with cash used in operating activities rising from $0.5 million to $10.3 million year-over-year, the company has taken steps to strengthen its financial position. ABTC entered into agreements to sell an unused legacy property in Fernley for $6.75 million and unused legacy water rights for $4.7 million.
The company’s cash used in investing activities decreased substantially from $5.0 million to $0.5 million due to reduced capital expenses for its first recycling facility, suggesting the major infrastructure investments have been completed.
ABTC’s quarterly summary highlights both progress and ongoing challenges:
The company faces the typical challenges of a pre-profit cleantech manufacturer, with significant operating expenses as it scales production. However, the combination of first commercial revenue, strategic asset sales, and substantial government support through grants and tax credits provides multiple pathways to improve its financial position.
As ABTC continues to ramp up operations in both its battery recycling and lithium production businesses, investors will be watching closely to see if the company can narrow its operating losses and accelerate revenue growth in coming quarters.
Full presentation:
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