Earnings call transcript: Beam Global’s Q3 2025 results miss expectations

Beam Global reported its third-quarter 2025 financial results, revealing a greater-than-anticipated loss in earnings per share (EPS) and a significant revenue shortfall. The company posted an EPS of -$0.28, missing the forecast of -$0.25. Revenue for the quarter was $5.8 million, falling short of the $8.77 million forecast. Following the announcement, Beam Global’s stock experienced a slight dip in aftermarket trading, reflecting investor concerns over the company’s performance. InvestingPro data shows the company has been struggling with profitability, with a -$1.54 diluted EPS over the last twelve months.

Key Takeaways

• Beam Global missed both EPS and revenue expectations for Q3 2025.
• The company reported a net loss compared to a net profit in the same quarter last year.
• Operating expenses and salaries have been reduced as part of cost-saving measures.
• Beam Global is focusing on growth in the Middle East and African markets.
• The stock showed a minor decline in aftermarket trading.

Company Performance

Beam Global’s performance in Q3 2025 was marked by a notable decline compared to the same period in 2024. The company reported a net loss of $4.9 million, a stark contrast to the $1.3 million net profit in the previous year. Revenues for the year-to-date stand at $19.2 million, down from $40.9 million in 2024. Despite these setbacks, Beam Global has made strides in product innovation and cost reduction, which may position it for future growth.

Financial Highlights

• Revenue: $5.8 million, down from expectations and previous quarters.
• Earnings per share: -$0.28, below the forecast of -$0.25.
• Gross margin: Negative $28,000, indicating a 0.5% gross margin loss.
• Cash balance: $3.3 million, decreased from $4.6 million in December 2024.

Earnings vs. Forecast

Beam Global’s Q3 2025 results showed an EPS of -$0.28, missing the forecast of -$0.25 by 12%. The revenue came in at $5.8 million, significantly below the $8.77 million forecast, marking a 33.87% shortfall. This underperformance is a deviation from the company’s historical trend, where it had previously reported profits.

Market Reaction

Following the earnings release, Beam Global’s stock saw a slight decrease of 0.55% in aftermarket trading, with the price settling at $1.8. This reaction reflects investor apprehension about the company’s ability to meet future targets, especially given the missed earnings and revenue expectations. The stock remains near its 52-week low of $1.33, indicating ongoing challenges.

Outlook & Guidance

Beam Global remains optimistic about its future, focusing on expanding its presence in the Middle East and African markets. The company anticipates a return of interest from the U.S. federal market and potential recurring revenue streams in 2026. Despite the current quarter’s challenges, Beam Global is committed to diversifying its product portfolio and capitalizing on emerging market opportunities.

Executive Commentary

CEO Desmond Wheatley emphasized the company’s resilience and innovation, stating, "We are 1,000 times better company today than we were back in 2020." He also highlighted the proactive approach Beam Global takes in its operations: "We do not let things happen to us. We make things happen." Wheatley remains confident in the broader trend of electrification, asserting, "Electrification is happening with absolute certainty across the board."

Risks and Challenges

• Market Saturation: Increasing competition in the electric vehicle and battery markets could impact growth.
• Supply Chain Issues: Potential disruptions could affect production and delivery timelines.
• Macroeconomic Pressures: Economic downturns may limit customer spending and investment.
• Technological Changes: Rapid advancements in technology could render current products obsolete.
• Regulatory Changes: Shifts in government policy could impact market dynamics and demand.

Q&A

During the earnings call, analysts inquired about the potential of Beam Global’s wireless charging technology for autonomous vehicles and the company’s specialized battery development for drones. Concerns were also raised regarding manufacturing capacity and stock price performance, with executives addressing these topics by highlighting the company’s strategic initiatives and cost management efforts.

Full transcript - Beam Global (BEEM) Q3 2025:

Conference Operator: Good afternoon, and welcome to the Beam Global Third Quarter 2025 Operating Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead.

Lisa Potok, Chief Financial Officer, Beam Global: Hi, good afternoon, and thank you for participating in Beam Global’s Third Quarter 2025 Operating Results Conference Call this Friday afternoon. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, President, CEO, and Chairman of Beam Global. Desmond will be providing an update on recent activities at Beam, followed by a question-and-answer session. First, I’d like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam’s expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam’s most recently filed Form 10-K and other periodic reports filed with the SEC.

The content of this call contains time-sensitive information that is accurate only as of today, November 14th of 2025. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Next, I’d like to provide an overview of our financial results for Beam’s Q3 of 2025. For the third quarter of 2025, our revenues were $5.8 million, and our year-to-date as of September of 2025 was $19.2 million, compared to $40.9 million for year-to-date September of 2024. The revenue decrease is largely unfavorable due to the order timing, which we believe will turn around in future quarters. Desmond’s going to discuss this in further detail momentarily.

Revenues for the nine months ending September 30, 2025 were diverse across commercial entities and state and local governments, with significant rebalancing towards our enterprise customers, whereas 67% of those revenues were derived from commercial customers compared to only 31% in the same period of 2024. Additionally, for the same period, our international customers comprised 39% of all revenues in 2025 versus 20% in 2024. Our contracted backlog as of the end of Q3 2025 was $8 million. Our gross profit for Q3 2025 was a negative $28,000, or a 0.5% gross margin loss. This was driven by the impacts of fixed overhead allocations on reduced reported sales compared to an 11% gross margin for the same period in 2024. The gross profit for 2025 and 2024 includes a non-cash negative impact of $800,000 for depreciation and amortization.

Without this non-cash expense, which is non-GAAP, our gross margins for Q3 of 2025 would be 13%, with a gross profit of $700,000, and Q4 2024 would be a gross margin of 18%, with a gross profit of $2 million. Our gross margin year-to-date September 30 of 2025 was 10% compared to a gross margin of 12% for the same period ended in 2024. Our year-to-date September 30 of 2025, excluding the non-cash items of depreciation and intangible amortization, was 22%, compared to 18% in 2024, a 4 percentage point increase. The company has continued to recognize synergies and report positive gross margins from the company’s acquisitions. We expect the company’s revenue to grow in the future, and the company’s fixed overhead absorption will improve. The total operating expenses were $4.8 million for Q3 of 2025, compared to a credit of $50,000 in 2024.

Remember that our 2024 operating expenses included a $6.1 million non-cash change in the fair value of contingent consideration for the Amiga acquisition. Without the non-cash item, which is non-GAAP, it does make the expenses more comparable, our operating expenses improved $1.5 million, which is a 30 percentage point increase. The decrease in expenses year over year is mostly attributable to efficiencies implemented, driving a decrease of $600,000 for salaries and benefits, $300,000 for sales and marketing, and $300,000 in other DNA, which is mainly savings in our European operations. Our total operating expenses were $26.8 million for Q3 of 2025, which included non-cash totaling $15.4 million, which is mainly $10.8 million for the impairment of goodwill that we recorded in Q2 of 2025. Without these non-cash expenses, operatings were $11.4 million and improvement of $1.8 million and 14 percentage points over the same period in 2024.

The Q3 net loss was $4.9 million compared to $1.3 million net profit for the same period in 2024. The third quarter 2025 net loss, excluding non-cash items, which is non-GAAP, was $2.8 million compared to $3 million for the same period in 2024, an improvement of $0.2 million, or 7%. The year-to-date net loss as of September 30 of 2025, excluding non-cash items, was $7 million, compared to $5.8 million for the same period in 2024. Our cash balance at the end of September was $3.3 million, compared to $3.4 million at June 30 of 2025 and $4.6 million on December of 2024. Our working capital balance at September 30 was $10.9 million, compared to $9.8 million at June 30, an increase of $1.1 million. We have historically met our cash needs through a combination of debt and equity financing, and more recently through our increasing gross profit contributions.

I will now turn the call over to Desmond to provide our business update.

Desmond Wheatley, President, CEO, and Chairman, Beam Global: Thank you, Lisa, and thank you all for joining us here today to go through this update on Beam Global’s operating activities and third quarter results. I’m speaking to you today from Abu Dhabi in the United Arab Emirates, where it’s 1:30 A.M. on Saturday morning. It’s been a busy and a kind of long day, and it’s also been a busy week. Actually, it’s been a couple of busy weeks on the road. If I’m not the usual ball of fire that you get on these earnings calls, don’t for one minute put that down to any lack of enthusiasm for Beam Global or what we’re doing. It’s just that my batteries are running a bit low, and it’s possible you may detect some of that in the way that I deliver my comments. The truth is actually anything but a lack of enthusiasm.

I’ve been having an exciting and very fruitful week here in Abu Dhabi, and I’m absolutely thrilled about what we’ve done in creating Beam Middle East. We’ve literally just this week opened our new offices here. For those of you who are not aware of this, Beam Middle East is a new company which we set up as a joint venture with the Platinum Group, chaired by His Royal Highness Sheikh Mohammed Sultan bin Khalifa Al Nahyan. Look him up, please. The Platinum Group’s a multi-billion dollar conglomerate which is very active in technology, real estate, financial services, energy, gold, foodstuffs, and other industries across the Middle East and increasingly Africa. The joint venture is a 50/50 equity partnership between Beam Global and Platinum, each owning half of the equity in the entity.

It’s excellently structured for Beam Global because any and all costs which we incur supporting Beam Middle East in the pre-profit stages are returned from 100% of the first profits that come into the company. Said another way, we get paid back for any costs we incur before there’s any profit share with the Platinum Group. I’ve been working with the Platinum Group now for several months, first closing the joint venture agreement and then setting up the new entity in Abu Dhabi, which includes setting up and opening our new offices here.

I’ve also just spent the last week with them creating opportunities for growth for Beam Middle East, and I’m happy to report that I’ve found them at all times to be very willing and capable partners whose knowledge of the way the United Arab Emirates work, combined with their excellent relationships at the highest levels, seems very likely to create fantastic opportunities for us here. Monday through Wednesday of this week, Beam Middle East was prominently represented at DriftX, which is an autonomous vehicle, drone, electric vehicle, and robotics trade show and exhibition. This was a fantastic show for us. We had a booth prominently positioned next to the main stage, and more importantly, we also had an EV ARC and a BeamBike set up directly in front of the main entrance of the exhibition. We were the only EV charging infrastructure product at the event which actually worked.

We provided charges to the VIPs who drove electric vehicles to the event. We were certainly also the only company with fully autonomous off-grid rapidly deployed charging infrastructure solutions, and we were also the only company with a fully autonomous off-grid electric bicycle solution. It’s interesting that although the show was full of fantastic new technology, drones delivering packages, autonomous air taxis, autonomous vehicles of every shape and size for law enforcement, the military, agriculture, food delivery, and countless other applications, nobody there had a way to rapidly deploy highly scalable charging infrastructure for all these vehicles. Beyond that, all the vehicles that were there still require a human being to plug them in to charge, which is hardly very autonomous. It was a fantastic opportunity for Beam Middle East to demonstrate that we have solutions for both of these challenges.

Nobody can deploy charging infrastructure more robustly, faster, or less expensively than we can, and our patent-pending wireless charging infrastructure solution creates the perfect platform for autonomous vehicles. When not conducting their missions and when in need of a charging session, they can simply pull onto our engineered base pad and charge wirelessly without any human intervention. We had an unbelievable response to these capabilities and are already meaningfully engaged with several of the presenting companies. I was accompanied to this event by Ivan Plechinik, who runs our Beam Europe operations, members of our Beam Europe team from Serbia, and also members of our Beam Middle East team. All of us were extremely busy from early in the morning on the first day of the event to late in the evening on the last day.

I was actually invited to speak on the main stage to a very well-attended room about the impact that Beam Middle East will have on this region’s plans to electrify transportation and to invest $1 trillion on sustainable infrastructure in the coming decade. It gave me an excellent opportunity to speak to a room full of powerful decision-makers about the value that our products bring to the electrification of transportation, energy security, and smart city infrastructure. It was also an excellent opportunity for me to ensure that everybody there knew that Beam Middle East is the combination of a California-headquartered Nasdaq-traded company and the very powerful and influential Platinum Group. It cannot be overstated how important it is to have a local presence in this region and a well-respected partner when seeking success here. We now have both.

I was impressed time and time again by the Platinum Group’s ability to bring top leadership from government and the largest organizations in this region to meet with me. This allowed me and all the other members of our team to go straight to the benefits of our products and the value that they will bring without having to go through a lengthy and often risky process of creating credibility with a new audience. I’m very bullish about our opportunities here. After the event, I’ve just spent a day in Dubai meeting with two other autonomous vehicle companies, both of whom have significant opportunities for our EV ARC with its wireless charging integration. I also met with several drone companies who can benefit from the use of our patented BeamFlight autonomous drone charging system. This is something we used to call UAV ARC, but now we’re now calling it BeamFlight.

This fantastic product is one that I’ve had a patent on for a couple of years and originally developed for warfighting scenarios. BeamFlight can be deployed in contested environments and allow a drone operator to fly a drone out to a mission, and crucially, when the drone requires charging, it can land on BeamFlight to recharge instead of returning to the operator, causing risk of being targeted if the enemy follows the drone back to them. BeamFlight removes that risk, and it can be deployed anywhere without construction or electrical work or any other type of activity. It turns out there are a host of other commercial and military applications for this type of technology, and you’re going to see us focusing heavily on that in the coming months.

The great thing is that here in Abu Dhabi and the United Arab Emirates in general, the government and regulators are incredibly open to these new technologies, and the rate of acceleration of the use of drones and autonomous vehicles here is breathtaking, especially viewed from the U.S. experience. We’re actually able to work with drone developers and manufacturers and autonomous vehicle developers and manufacturers and move very quickly to creating solutions with them without being bogged down by time-consuming and often impossible regulatory barriers. Beyond that, the investment is here, and there’s a vibrant market for these types of solutions. We are not developing pie-in-the-sky products that might be used sometime in the distant future. These are solutions that are needed today, and Beam Global has the patented technology to provide them.

I’m really excited by the opportunities that I’m seeing here and by what I know that we’re going to release to solve for many of the challenges faced by both drone and autonomous vehicle operators. Beam has the perfect technology to solve for these challenges, and now that we have Beam Middle East and our partnership with the Platinum Group, we’re ideally positioned to put our technology innovations to work in this rapidly developing market where eye-watering investments are being made daily. Prior to coming to the Middle East, I was in London, and while there, I met with another drone company for whom we are currently developing batteries.

I can’t talk too much about this drone company or what they’re doing except to say that it’s a submersible, but I can tell you that our fantastic battery scientists in Chicago have already developed a solution which will provide this drone manufacturer with double the energy density and about twice the lifespan in a battery pack than the one they’re currently using. This will allow the drone to stay on mission for much longer, and it means that they’ll have to replace the battery much less frequently, which again allows them to stay on mission longer. We’re confident that the battery we’re developing for this drone, which we’re fitting into incredibly tight real estate, will also be much safer and reduce the risk of any type of thermal runaway event.

That means that the drones will be less likely to experience any kind of malfunction, making them more reliable, safer, and less expensive to operate. Now, it turns out that our batteries are actually more expensive to buy than the ones that they’re currently using, but their total cost of ownership for batteries will be reduced because of the tremendous expansion in utility that occur when you use ours. This is exactly the sort of application that our battery team are very good at attacking, and it’s perfectly in line with the strategy that I’ve always had for our battery operations, which is that we should not try to compete at the commodity level.

Rather, we should do the really difficult things for highly discerning customers and differentiate ourselves in ways that allow us to charge a margin which is much higher than the commodity could produce or could charge, but which creates so much value for our customers that they’re happy to pay it. That is certainly the case in this instance. We’ve seen a 21% increase in our energy storage systems business this year, and what’s exciting is that those revenues have come, yes, from some existing customers, but mostly from new customers bringing extremely challenging requirements to us, which we’re fulfilling in a unique and highly differentiated manner. We also continue to win new patents, further differentiating our batteries and other products from the competition. These are not empty patents.

They cover extremely important aspects of our differentiated technology and will provide real and meaningful value to our customers moving forward. This weekend, I’ll be traveling to Jordan, continuing my Middle Eastern odyssey, where I’ll be visiting the deployment of our BeamWell product, which is currently in use with the Royal Jordanian Armed Forces Medical Services in a field hospital. This fantastic technology solution provides electricity for cooking and the refrigeration of medical supplies, highly ruggedized e-mobility, and most importantly, a reliable source of drinking water from salt, brackish, or foul water. It’s our intention and the intention of the Royal Jordanian Armed Forces to move BeamWell into Gaza, where it will provide humanitarian relief for those in need in that war-ravaged region. There’s a lot of water in and around Gaza, but of course, it’s all salty or brackish, and we clean it up and make it drinkable.

We are already discovering that BeamWell can provide many other valuable services. For instance, when we first developed it, we only assumed that the water would be used for cooking and drinking, but we have learned from the Jordanian medical services that they also really need it for dialysis and other medical procedures as well. Of course, these applications are not only needed in Gaza, but BeamWell is also a fantastic solution for many parts of the world which are ravaged either by war or natural disasters like hurricanes, floods, wildfires, or earthquakes. The United Arab Emirates, where I am today, is actually the largest donor of financial aid to that region, and I will be working with the Platinum Group and other influential people here in an effort to fund many more of these systems.

Further travels this year will take me to the Caribbean, where Jamaica has just experienced the most powerful hurricane in its history. Hurricanes are not more frequent than they used to be, but they certainly seem to be getting much more powerful, and the people in the Caribbean are very sensitive to the fact that they lose electricity and fresh water every time these types of severe weather events take place. Beam’s suite of off-grid energy generation, energy security, and now desalinization products are a perfect fit for solving these risks and challenges, and I’ll be working with U.S. government representatives and through other relationships to ensure that governments and commercial enterprises alike understand the tremendous capabilities which we can rapidly and scalably deploy in these island communities.

We already have EV ARC deployments in Puerto Rico and in the US Virgin Islands, so our product is well tested in these environments. During Hurricanes Irma and Maria, we were able to demonstrate our EV ARC product can withstand category five hurricane winds and continue to operate without incident. Also, notably this year during Hurricane Helene, our EV ARC products continued to operate during 140 mile per hour winds and absolutely uniquely in the industry while also submerged in up to eight feet of storm surge. Our customer there at the US Army informed us that our products were the only things that continue to operate and deliver electricity during Hurricane Helene. It’s clear that we have a fantastic solution to solve for the significant risks and challenges being faced by communities that are prone to extreme weather events, particularly high winds, flooding, and storm surge.

All of these opportunities and many others are new to our company and provide a host of new avenues for us to generate revenues and profits with the technologies that we’ve developed and deployed over the last many years. At a time when EV charging infrastructure deployment is being focused on less in the United States, particularly by the federal government and the current administration, I’m really thrilled that we’ve created products and technologies which have a vast array of potentials to solve real-world problems in places where there’s actually funding to pay for those solutions. The expansion of our product portfolio and our geographic expansions into Europe and now the Middle East mean that we’re decreasingly reliant upon the purchase of our products for EV charging in the United States.

I’m still very confident that we’ll have to deploy lots and lots of electric vehicle charging infrastructure in the U.S. in the future, but during this current lull, I’m also very confident that we’re going to see tremendous success with EV charging infrastructure products in other parts of the world where the growth of electric vehicles is still staggering. I can tell you that here in the Middle East, there are so many electric vehicles. It’s really mind-blowing. Sadly, almost all of them Chinese, but there’s tremendous growth over here and also in Europe. Also, through the deployment of our energy security, disaster preparedness, and smart city infrastructure products, we’re going to see a lot more growth there too. Not to mention the significant global appetite for the types of battery solutions that we’re able to provide through our patented portfolio of energy storage products.

Drones, submersibles, autonomous vehicles, electric vehicles, robots, and countless other applications are seeking highly energy-dense and safe battery solutions, and those are exactly the sort of energy storage systems that we create and manufacture in our Chicago facility. Our third quarter revenue of just under $6 million was not what we were expecting, largely because we’ve received an award from an existing customer from whom we would have received many, from whom we have already received many prior purchase orders, and this was to deliver just over $3 million worth of EV ARC s, and we expected to deliver those EV ARC systems in the third quarter of this year. We went so far as to manufacture them in our San Diego facility. However, it turns out that this order was originally funded by the Federal Highway Administration with dollars which had been approved by Congress.

Nevertheless, the current administration has seen fit to withhold those funds, and as a result, we’ve not deployed those systems as of yet. That’s the bad news. The good news is that I’ve known this customer for a long time, and I’ve recently talked to them, and they told me that they’re going to move ahead with the deployment anyway because they have separate funds with which to do it. We’ll have to go through a new budgeting process, which is why we were not able to do it in the third quarter, but in the end, it’ll be just like everything else to do with the electrification of transportation. It’s going to happen. It’s merely being delayed by the current administration.

I think it’s unlikely that it’ll happen in the fourth quarter this year, but I do think it’s very likely that it’ll happen in the first half of next year when the new budgets are finalized. Had we executed on that order, as we expected, we would be reporting closer to $10 million in revenues with significantly improved gross margins of around 20% GAAP. Our product gross margins are running about 44% year to date, so you can see that the dipping gross for Q3 is driven by overheads and fixed allocations on a lower number of system sales recognized in the third quarter. This reduction in revenue in Beam Global’s Q3 of 2025 is actually just driven by order timing rather than by anything fundamental. Had we delivered those units as we expected to, we’d be reporting another quarter of growth with further improvement in gross margins.

As it happens, we had a bit of a perfect storm of negative government activity both in the U.S. and in Europe during the third quarter. Our European operations also saw a reduction in the delivery of their legacy products, which we anticipated for the third quarter because of political unrest in Serbia and the Balkans. Here again, we do not expect that these orders are lost. They simply move right, and we are confident that we will deliver on them to some extent in the fourth quarter this year and certainly in 2026 early. Things are otherwise really picking up for us in Europe. Beam Europe actually contributed about 40% of our revenue in the third quarter, and what is really important is that we now have awards to tenders that we have been working on to deliver EV ARC systems to several cities across Europe.

This is a perfect example of our strategy to expand both our product portfolio and the geographies into which we’re reaching because what’s happening is that while Europe is having some slowing on its traditional products caused by the political climate, which I’ve already mentioned, they’re able to find ways to increase their revenues with the new product portfolio that they’ve inherited as a result of being acquired by Beam Global. At the same time, Beam Global, the parent, is benefiting from increased revenue opportunities as a result of Beam Europe’s activities. You can see how these two strategies, geographic expansion and expanding product portfolios across both markets, are coming together to defend us from some of the worst aspects of the current market and to create growth in spite of these conditions.

I really don’t believe we’ve seen anything like what Europe will do, and I’m looking forward to continuing improvements in the % contribution from Europe to our overall revenue picture. Now, of course, we have the Middle East, where we fully expect to make further sales and garner more revenues. We’re bringing lots of new opportunities for growth to the company, even in trying times, and we’re doing it without spending vast sums of capital or taking on debt. We currently have about $8 million of backlog, and that doesn’t include the $3 million deployment that I just described to you a few minutes ago, and it also does not include any of the EV ARC deployments in European cities which are coming about as a result of the recent awards we have won from the tender processes.

The reason for this is because we don’t include anything in backlog until we have a hard and fast purchase order for it. When we actually hear of an award from a tender or receive a verbal award from a long-standing customer with whom we’ve done lots of business and always been paid, we don’t actually include those in backlog until those customers issue purchase orders to us, which is sometimes the very last thing they do just before we ship. Takeaway is that this $8 million worth of backlog that we currently have, which again are confirmed purchase orders, doesn’t really tell the full story about the commitments that we have to buy our products at this point, and of course, it also doesn’t include anything at all from the Middle East yet.

In some ways, you could say that we’re operating in the worst time in our history from a political point of view, both in the United States and, I’m afraid, say in the Balkans as well, and yet we’re finding ways to create new opportunities for growth, and we’re still winning business and executing on it. The battery business growth with the new contracts, some of them so secret that I can’t even talk about them, combined with other business activity, like the fact that we’ve already deployed BeamBike now for customers in the United States and in Abu Dhabi, shows that these expanded product portfolios are not only allowing us to make up for the shortfalls in the EV charging business, but in fact creating whole new avenues of growth.

In the case of BeamBike, much of the revenue that we receive from that initiative will, I believe, be recurring in the future, and in fact, I think you’re going to see us bringing in several new sources of recurring revenue in 2026 from both our product portfolio expansion and also geographic expansion. It just so happens that many of the new things that we’re working on lend themselves very well to recurring revenue opportunities in the way that EV ARC sales previously did not. Now, you might think that all of these initiatives that we’re working on would mean that we’d significantly increase our operating expenses, but the fact is that we’ve actually reduced operating expenses in the third quarter through increased efficiencies and appropriate belt tightening consistent with the new reality of no federal sales in the U.S.

You’ll note that we didn’t make any federal sales at all in the quarter. I’ll tell you this to continue to hammer home that Beam Global is now and has always been incredibly disciplined with cash and equity. We haven’t changed that philosophy, and we continue to figure out how to squeeze the maximum amount of value out of any investments that we make. This expansion into the Middle East, for example, has been done with very little capital because we’re able to support all except our sales activities from our fantastic facilities in Belgrade and Kragujevac until such time as we reach sufficient volumes here to warrant assembly and then manufacturing facilities. Of course, those will largely be paid for and justified by cash flows generated by the business here in Abu Dhabi and the broader Middle East.

We also view the Middle East, of course, as a gateway to Africa, and we’ll be concentrating a lot on expanding into that market, just as the Platinum Group does. To sum up, it was a bit of a tough quarter from a revenue point of view because of the unfortunate delay caused to a significant order which we should have delivered during the period, but at the same time, we’ve managed to significantly increase our opportunities for new streams of revenue, both one-time and recurring, with fantastic and exciting product offerings and equally fantastic and exciting new markets. We haven’t lost any of the orders that move right, so we’ll be able to take advantage of those in future periods, and the Beam team has continued to find ways to make our business more efficient and improve our products without increasing our overhead costs in any material way.

I’m grateful to them for their efforts, and I’m grateful to you for your support and for continuing to invest in and follow this fantastic company. I’ll now return the call to the operator and take any questions which you may have. Operator. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Tate Sullivan with Maxim Group. Please go ahead. Hi, Desmond. How are you? I think it’s two or three calls in a row, maybe, that you’re in the Middle East.

On the wireless charging, I remember the patent, but had you gone through sales efforts with wireless charging before? Are you hinting at that based on your experience in the Middle East with interest in that product? I’ve known for a long time that the wireless charging solution was going to be very important for the autonomous vehicle market. I think it’s also going to be very important for the general automotive market, but it won’t be until the automotive OEMs start to integrate receivers into the underside of their vehicles. The thing with wireless charging is it doesn’t do any good for us to deploy the chargers and the transmitters if the car companies are not installing the receivers on the underside of the vehicles. So far, they’ve been reluctant to do that for a couple of reasons.

The first one is that for a long time, there was not a standard in the industry. Just like it took a long time to get to a standard for the plug-in connectors, there was not a standard for wireless charging in the industry. That problem’s been solved, but also the car companies are reluctant to add cost to the vehicles through the addition of the wireless receivers so far. I think that’s wrong thinking, frankly, because I think consumers will be all over this. The idea that you can just drive your car up to station-like cars and walk away from it, not even plug it in, and it fills up wirelessly, I think will be something that consumers will demand.

What is different now is that because we have so much exposure to both autonomous vehicles and, frankly, also to drones, which will charge wirelessly in many instances off our BeamFlight product, we have companies with whom we can actually work. It is not like working with the Big Three or the large automotive companies. These autonomous vehicle companies are generally a bit scrappier and a hell of a lot more entrepreneurial in their approach to this, and the regulations are also a lot less stringent, particularly where I am today. What you are seeing now is because we have had this patent pending for some time and we have had the capability of doing this, we now have a market to provide it to, and that is why you are going to see an awful lot more activity on it in the coming weeks and months.

On the battery business or energy storage business, it sounds like you can’t provide too many details, but is there a long trial period for the customers before they place orders, or is this a special situation? Yeah, I mean, that’s going to be customer by customer. In the instance that I’m talking about now, I think you’re going to see a very quick move. I mean, I say very quick. There’s still some development things to do, but these guys are hot to trot. They’re, again, very entrepreneurial. They have an absolutely remarkable system that’s in demand, and the good news is they’re already using a battery.

As I said in my comments, what’s different about what we’re providing them is that we’ve doubled the energy density, which means that it can stay on mission for twice as long and also doubled the life expectancy of the battery in comparison to what they’re using today with a much safer and more robust solution. I think you’re going to see that a lot. A lot of drone operators are tending to go with kind of off-the-shelf battery solutions, which is not helpful to them for two reasons. The first one is that typically these highly commoditized solutions do not always have the level of quality that we produce, but also the drone manufacturers and operators are forced to design their devices around whatever square or rectangular box they’re delivered off the shelf from these types of manufacturers.

Beam can, very unusually, in fact, I think uniquely in the industry, make batteries in just about any shape, and because of that, we can fit into real estate that’s not necessarily ideal for the existing battery vendor. I think that’s going to, that has always been important to me. I don’t like the idea of drone operators, whether those are submersible or in the air or on the ground, having to design their products around a box. I want to make sure they design the product for the mission, and then we’ll design the batteries that they need for their real estate and do a better job of it.

As I mentioned in my comments, the result of that is our batteries will probably always be a bit more expensive than the off-the-shelf ones to buy, but from a total cost of ownership point of view, be less expensive per energy delivered because of the longer life and the increase in energy density. Sorry, long answer to your question. The short answer is, in some instances, we’ll be able to move quite quickly to orders. In other instances, we’ll have longer development periods, but we often get paid for that too, the engineering required to do that. Thank you, Desmond. Thank you, Tate. The next question is from Ryan Finkst with B. Riley FBR. Please go ahead. Hey, Desmond. Thanks for taking the question. Hi, Ryan. Pleasure. Thank you. It’s good to talk to you. Yeah, it is both.

The first one, a bit of a follow-up there. Earlier, you mentioned backlog is comprised of firm orders only, as you’ve done historically, but for the larger pipeline of awards that could include maybe MoUs or earlier stage agreements, can you share what the breakdown might look like there between battery opportunities and EV ARC opportunities, maybe at least at a high level? How to think about that? Yeah, I mean, the battery opportunities are increasing, and then the other contributions are coming from other products as well. I mean, we now have the entire portfolio of products in our Beam Europe facilities, and they’re contributing significantly to both backlog and to the sort of high-probability pipeline. And then our new products coming out too, I mean, as I mentioned, BeamBike, we already have BeamBike sold and deployed, and it’s contributing to growth in our backlog as well.

What’s really encouraging about this is while previously backlog and pipeline was made up almost entirely of EV ARC sales, and certainly in 2023 and 2024, very predominantly EV ARC sales to federal customers, now we’re looking at a situation where none of our pipeline or backlog is made up for federal customers. I shouldn’t say none. I think there are still a few instances, or for EV ARC anyway. We are seeing interest from the federal government in our disaster preparedness and energy security products, which I’ve often said we have a lot more in common with the current administration than a lot of people think because we do make Made in America energy security and US energy solutions. That’s contributing to the pipeline as well. Most importantly, what you’re seeing is much more diversified.

A lot more of it coming from commercial customers, a lot more of it not just EV ARC related, but related to the other new products that we’ve brought out over the last year or so, and certainly a significant and increasing contribution from our European operations as well. Understood. Appreciate that. Then second question, can you walk us through how you’re thinking about the cadence of Beam’s opportunity in the Middle East, maybe when we might start seeing Beam Middle East show up in backlog and results for Beam? Yeah, I better be careful about what I say here. As I said, I’ve had a very exciting week here. The event that we were at, DriftX, was just absolutely phenomenal, and we were very prominent in the way we were positioned at that event.

In fact, we had some extremely important people come and spend time with me. They did not spend time with anybody else at the event. A big part of that is because I think there was a powerful realization that the thing that was missing there was the thing that was vital to all the other devices and vendors, and that was that none of them can operate if they do not have the opportunity to fuel, to use the crudest term, to recharge, as it were, because it is all electric. All of these vehicles are electric. There is nothing there that is not electric. This goes back to the comments I made during my prepared comments, which is that electrification is happening with absolute certainty across the board. We are only going to delay it a little bit in the U.S., but it is happening everywhere else at a clip.

The requirement for charging infrastructure is really dramatic. Again, our ability to provide it wirelessly to autonomous vehicles so that they do not need to plug in, just, it has really been fantastic. All of that leads me to feel very enthusiastic about this market. I was not having theoretical down-the-road conversations with people. I am talking to people who have real needs today. There is always a process, and we are new to the market, but of course, we are new to the market with Platinum Group, and that gives us just a phenomenal credibility right off the bat. I mean, it really was impressive to see the Platinum Group executives who were there with me. They are connected at the very highest levels.

I was on a call earlier on today, as a matter of fact, yesterday it was now, with Platinum Group and the CEO of an autonomous vehicle company. His response to me was, "I cannot say no to Dr. Hanaya Petray, who’s our representative of the Platinum Group." Just very well connected. All of that to say, I’m very bullish about the market. It would be foolish of me to try and put any type of precise timing on things because there will be a process, but I think it will happen, and I think it’s going to happen quickly. I think we’ll be announcing stuff in the not-too-distant future. I appreciate it, Desmond. Safe travels. Thank you very much. The next question is from Noel Parks with Towhee Brothers. Please go ahead. Hi, Noel. How are you? Hi. Great. Thanks. Good to talk to you.

Just had a few things. Could you just maybe talk a little bit about where your total company manufacturing capacity stands? And I guess I was thinking or just wondering if on a year-over-year basis, it was essentially flat or if there had been some growth. In terms of capacity? Yeah, manufacturing capacity. You mean? Yeah. Yeah. The truth is our manufacturing capacity is underutilized at the moment because, of course, we’ve had this decline. Let’s be frank. We had unbelievable growth between 2020 and the end of 2023, and a great deal of it was driven by the fact that the US was very heavily invested in and pushing very hard towards the electrification of transportation, and we were providing for that heavy focus.

We built infrastructure in the US to be able to cater to that, and we also built a sales machine to cater to that. It is quite specific, selling to the federal government, to the Army, to the Marine Corps, to the Pentagon, Navy, Space Force, and all the others that we have deployed for. It is a specific type of selling discipline, team, and process. Now, all of that has completely evaporated 100% because, of course, the new administration has different ideas about this stuff. We have had to pivot to do these other things. Fortunately, we do have the technology, and we manage our business. We do not let things happen to us. We make things happen, and that is why we are doing all these different and wonderful things. The federal government will come back for us. There is no question about that.

We will electrify, and when they do, frankly, they’ll come back with more urgency. I can’t say when that’s going to happen because I don’t know how long this thinking is going to continue, but there is no question that that is going to happen. Urgency is good for us because we deploy faster and more scalably than anybody else does. The answer to your question is we have excess capacity in the U.S. right now because of that slowing down, very obviously. Our acquisition in Europe got us five times the factory space that we have in the U.S. under roof and several acres of land upon which we can build. Again, we own all of that. We don’t lease it. We have no lease operating expenses or anything else there. We own all the land and buildings in that factory facility.

We have massive capacity on hand right now for expansion and for growth. That is really good and really important, again, because of where I am today, because our strategy in the Middle East is to invest in selling here. We’ve opened offices here, very attractive offices in Masdar City, which is the sustainability center pretty much of the Middle East, actually. We’ve opened offices here, but they are really focusing internally on selling and some administrative things that we have to do in the region. We do not as yet have any assembly or any manufacturing or even assembly facilities in the Middle East. The reason for that is because we do not need them because we are a four-week container ride away from our factory in Kragujevac.

What you’re going to see us doing is selling in the Middle East and then fulfilling those orders from our factory in Kragujevac, which has a massive increase in capacity. You asked me if we had an increase. Yes, we have. We’re more efficient in Kragujevac now and able to produce more EV ARC units than we were this time a year ago, and more of the rest of our products. In fact, the BeamBike products that are deployed in Abu Dhabi today were manufactured in Kragujevac in Serbia, and so is the EV ARC that is here, manufactured in Kragujevac in Serbia by Beam Europe. We’re going to use that capacity to support this market in the Middle East until such time as we hit volumes that we anticipate.

When we do hit those volumes, we’ll start to assemble here, not manufacture, but assemble components that are shipped here mostly from Beam Europe, but to some extent from the US as well from time to time, particularly batteries. We will move to full manufacturing facilities here when we hit those kind of volumes. I anticipate growth in the sale of all of our products in Europe as well, so we will use up that capacity there.

As I have said before, I anticipate a return to appetite for electric vehicles and charging infrastructure in the U.S. as well because, again, globally, EVs are growing rapidly, and we are a global company, and we are going to target those markets where there is good growth and good activity and then come back to the markets where there is taking the eye off the ball for a while at such time as that changes, which I am certain that it will. Great. Thanks. I was wondering, with the EV ARC installed base, are there any trends that you are seeing with either sort of maintenance and repair expense? I was thinking about the very earliest units as they are aging, just assuming that must be increasingly something you are dealing with. Yeah. We have thousands of EV ARCs deployed now. You are right.

I mean, obviously, one of the—it’s good news, bad news, right? You’ve brought out that last for a really long time. I mean, for goodness’ sakes, we’ve got unit 003 outside our offices. That thing’s been in operations now for 15 years. Yeah, you’ve got a fleet there that’s got some aspects of it that are aging. Actually, we had a couple of instances where we had things which go wrong with devices which we integrated into our product, which were made by other people in greater volume than we wanted or anticipated. We’ve had expenses associated with solving for those, and those are built into our financials right now. Those are our gross margins. The product is very well made. It’s very robust. We don’t cut corners in terms of the quality of the components that we use.

We’re still disappointed sometimes by external components. That’s one of the reasons that I acquired a power electronics company last year in Serbia is because we use other people’s power electronics, and 99% of the failures we have on EV ARC s come from failures of other third-party products. We’re increasingly becoming vertically integrated because we can make the kind of components that are better suited for our products, make them work better, more efficient, but also, frankly, fail less often. Yes, we have seen costs associated with warranty expenditures. Again, those are all baked into our financials, but certainly not chronic, and it is a very robust and long-lived product, as evidenced by the fact that we have so many of the—in fact, very few of the—I think we have a better survivability rate than Rolls-Royce does in terms of product out in the field right now.

Very few of them have ever completely failed, and so almost all of them are still out there in the field and operating. Great. Thanks. That was interesting, sort of that the rationale for the electronics acquisition was because of component reliability. It does seem to make a compelling argument for vertical integration. Thanks. Really interesting. Yeah. Yeah. It’s reliability. There’s no question about that. It’s also that because we make very unique products, nobody makes anything that’s exactly right for what we do. We end up having to spend a lot of time kind of crowbarring, and our engineering teams have to kind of fidget with other people’s products to make them work precisely as we need them to in the very—don’t forget, in the U.S., we’re deployed in the hottest, and the coldest, and the wettest, and the windiest places.

There is also margin recapture. I just do not like buying other people’s boxes and paying them margin and paying for a lot of packaging and air and stuff that we do not need. It will make us a hell of a lot more efficient as we continue to vertically integrate and make the products much better and cost us less money to make them. Great. Thanks a lot. Thank you. The next question is from Eddie Call, a private investor. Please go ahead. Hello, Eddie. Thank you for being invested in our company. Eddie, you hear me? Mr. Call, your line is open on our end. Perhaps you have it muted on yours. Moving on, our next question. I am not hearing. No, he is not transmitting. The next question is from Dick Grill, the private investor. Please go ahead. Hello, Dick. Thank you. Hello? Yes, we can hear you. Yes.

Hello, Dick. I hear you now. My question is on the stocks. Back in December of 2020, the stock shares were at $73.78, and then in January, they dropped to $56, and March dropped to $40. Since then, it’s been in the $2 range. Do you foresee any time that the price per share on the stock is going to rise? Second question would be, are you going to offer any dividends? Yeah. So, Eddie, or Dick, rather, thank you for—Dick, thank you for bringing that voyage up. Yes, we have gone through that rotation out of growth stocks, particularly growth stocks related to electric vehicle infrastructure and anything to do with sustainability, frankly. I’m bound to add we are not alone. I track probably 30 or 40 stocks in our space.

Everybody’s chart looks exactly the same, even though some of those companies are not very good, and some of them are really very good. I count us amongst the very good companies. The market, what’s happened to the market? There was a massive rotation out of growth stocks. About $6.3 or $4 trillion moved into money markets. Almost all of that money came out of growth stocks when interest rates went up. That’s one contributor. Frankly, I’m just not expert enough to explain to you all the things that are going on in the broader markets. I can tell you this: we are 1,000 times better company today than we were back in 2020 when we were trading at $73. In every way, we’ve improved. We’ve improved our margins. We’ve improved our products. We’ve expanded our product portfolio. We’ve expanded the geographies into which we’ve gone.

We’ve acquired a European market. There is no aspect of our business which is not vastly improved over where we were back in 2020. Yet, we’ve seen this incredible decline in our share price. Again, so has everybody else. What our job is to do is to just continue making great products and selling them to great customers and doing them again because market rotations happen. We see this. We’ve seen this happen time and time again throughout the history of the stock market. I’m a believer in the market. I’m a believer that it will come back and that we will be rewarded because we’ve, through this time, shown great discipline, discipline with cash and discipline with our equity. We’ve thrived while the company from an operating point of view has thrived while the share price has gone in completely the opposite direction.

I believe that we will be rewarded for that. I often say I think we will see new highs again in the future. Next time, it will not be because of an EV bubble. It will be driven by just fundamentals because we are doing all the right things. We are blocking and tackling, and we are doing all the right things with discipline to grow a really fantastic company. I do believe that we will see the share price improve. It would be foolish of me to say when because I am no good at forecasting the market. If I was, I would probably be doing something else for a living. I am pretty good at doing what I do for a living, and so is everybody on my team. They are all working very hard to create the fundamentals for a good company.

Dividends, that’s something that may or may not be in our future. I mean, look, all companies aspire to dividends, and shareholder returns and shareholder value is our job. It’s job number one. It’s the number one thing that we think about every day, and we will not stop thinking about that as we move forward. I appreciate you being involved. Thank you because I’ve seen big improvements in the company, but the stock price stayed in the $2 range, and I’m thinking, boy, they’ve had more orders than they’ve ever had in production, and it seemed like the price would be going way up. It should be, and I believe it will. I believe it will. It’s just, again, the market, I think it’s safe to say the market’s not always as rational as people sometimes think it is.

But in the end, good companies that make good products and have discipline are rewarded and recognized by the market, and I believe that that’s coming for us. Okay. Thanks. Thank you very much. This concludes our question and answer session. I would like to turn the conference back over to Desmond Wheatley for any closing remarks. Yeah. I mean, I think that question from Dick was a hell of a way to end it here. As I said, we’re a thousand times the company we were back in 2020, more so now. I’ve seen nothing but opportunity for us here. Look, it’s a struggle to re-steer the ship, right? As I said earlier, we were very focused on the tremendous growth that was happening when the U.S. was heavily engaged in electrification of transportation.

We have got fantastic products that can do a whole lot of different things, and that growth is still very active across the world, and we are going to keep executing on it. You can count on us to do that. Continue with the discipline, continue with improving products, and continue increasing our opportunities. I am looking forward to that. Thanks all for being involved. Thanks for your time on the call this morning, or rather this afternoon, and look forward to more great things in the near future. The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

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