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NanoXplore Inc. reported its financial results for the third quarter of 2025, revealing a slight miss in earnings per share (EPS) compared to market expectations. The company posted an EPS of -0.0155 USD, falling short of the forecasted -0.0125 USD. Revenue also lagged behind projections, coming in at $33.13 million against an anticipated $35.89 million. Despite these misses, the company’s stock showed resilience, with a modest increase of 0.41% in the following trading session. According to InvestingPro analysis, NanoXplore maintains a GOOD financial health score of 2.8, suggesting solid fundamental strength despite the earnings miss.
Key Takeaways
- NanoXplore’s Q3 2025 revenue declined year-over-year, from $33.9 million to $30.4 million.
- Adjusted EBITDA improved to $1.4 million, up from $572,000 last year.
- The company is advancing its graphene production capabilities with new equipment and plant expansions.
- The stock price remained stable, reflecting investor confidence despite earnings misses.
Company Performance
NanoXplore’s performance in Q3 2025 showed mixed results. While revenue decreased compared to the same quarter last year, the company achieved improved gross margins and EBITDA. This suggests operational efficiencies are taking effect, even as the broader commercial vehicle market faces challenges. The company’s strategic focus on graphene production and enhanced materials appears to be a key driver of its ongoing efforts to capture market share. InvestingPro data reveals the company’s strong liquidity position with a current ratio of 2.22, while maintaining moderate debt levels. For deeper insights into NanoXplore’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Financial Highlights
- Revenue: $30.4 million, down from $33.9 million year-over-year
- Adjusted Gross Margins: 22.4%, a 150 basis point increase from the previous year
- Adjusted EBITDA: $1.4 million, up from $572,000 last year
- Cash and Cash Equivalents: $20.7 million
- Operating Cash Flow: $4.9 million inflow
Earnings vs. Forecast
NanoXplore’s EPS of -0.0155 USD missed the forecast of -0.0125 USD, marking a negative surprise of approximately 24%. Revenue also fell short, with actual figures at $33.13 million compared to the expected $35.89 million. This performance reflects challenges in meeting market expectations, although the impact on stock price was minimal.
Market Reaction
Following the earnings release, NanoXplore’s stock experienced a slight increase of 0.41%, closing at $2.42. This movement suggests that investors are maintaining confidence in the company’s long-term strategy, despite the earnings miss. The stock remains within its 52-week range, with a low of $2.03 and a high of $2.89. InvestingPro analysis indicates the stock generally trades with low price volatility, with a beta of 0.91, and is currently trading below its Fair Value, suggesting potential upside opportunity. Additional InvestingPro Tips reveal important insights about the company’s profitability outlook and market position.
Outlook & Guidance
Looking ahead, NanoXplore expects fiscal year 2025 sales to remain flat at approximately $130 million. The company anticipates $15 million in incremental revenue from new programs in fiscal 2026. The expansion of graphene production capabilities and partnerships with major companies are expected to support future growth. With a market capitalization of $297.63 million and trailing twelve-month revenue growth of 12.92%, the company shows promising momentum. Analysts maintain a bullish stance on the stock, though two analysts have recently revised their earnings expectations downward for the upcoming period.
Executive Commentary
CEO Sourges Nazarpour emphasized the company’s focus on operational improvements and maintaining a strong balance sheet. He highlighted the ongoing demand and undersupply in the graphene market. CFO Pedro Acevedo noted the expected revenue contributions from new programs, which are set to begin early in the new fiscal year.
Risks and Challenges
- Macroeconomic uncertainty could impact customer demand in the commercial vehicle market.
- The U.S. economic policies and tariffs may affect the company’s operations.
- The graphene market’s undersupply poses both an opportunity and a challenge for scaling production efficiently.
- Capital expenditures for plant expansions may strain financial resources in the short term.
Q&A
During the earnings call, analysts inquired about the phased approach to the company’s expansion projects and the market fundamentals for graphene. Management addressed these concerns, reaffirming the strong demand and strategic positioning in the graphene sector.
Full transcript - NanoXplore Inc (GRA) Q3 2025:
Conference Operator: Good day, and thank you for standing by. Welcome to the NanoXplore Third Quarter Fiscal twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during the session, you’ll need to press 11 on your telephone.
You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Pierre Therese, Vice President of Corporate Development.
Pierre Therese, Vice President of Corporate Development, NanoXplore: Good morning everyone and thank you for joining the discussion of NanoXport financial and operating results for the third quarter of fiscal twenty twenty five. The press release reporting these results was published yesterday after market close and can also be found on our website along with our financial statements and MD and A. These documents are also available on SEDAR plus Before we begin, I’d like to remind you that today’s remarks including management’s outlook and answer to questions contain forward looking statements. These forward looking statements represent our expectation as of today, 05/14/2025 and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties.
Actual results may differ materially and listeners are cautioned not to place undue reliance on these forward looking statements. A description of the risk factor that may affect future results is contained in NanoExplorer annual information form available on our corporate website and our filings with the Canadian Securities Administrator on CEDAR Plus. On the call with me this morning I have Sourges Nazarpour, NanoExplore Chief Executive Officer and Pedro Acevedo, our Chief Financial Officer. After remarks from Souros and Pedro, we’ll open the call to questions from financial analysts. Let me now turn the
Sourges Nazarpour, Chief Executive Officer, NanoXplore: call over to Souros. Thank you PY and good morning to everyone joining us on the call. I will first start with the review of the economy, more specifically tariffs and the impact on our business. I will then provide update on our expansion plan followed by our graphene sales activities and end my remarks with an update on our capital allocation plan. From a macro perspective, the current U.
S. Administration economic policies have had a short term disruptive effect on our customers and consequently in our business, which translated into an unstable operating environment. Short term, we experienced delays in program launched from existing customers and customers holding back orders. We believe the delayed programs will gradually resume between now and Q2 twenty twenty six. Our expansion in North Carolina is progressing well and as previously mentioned, it is supported by booked contracts with existing and new customers.
Our third quarter represented a challenging macro environment and consequently our revenue growth suffered. That being said, we executed well and our margins continued to increase, reflecting a greater acceptance of our graphene enhanced solutions across industries. Regarding our expansion plan for CSBG and dry process graphene, we have received positive signals, but still awaiting official confirmation from Hydro Quebec on the allocation of seven megawatt of electricity for our project. We met with Hydro Quebec to present the project and have been in contact with government officials regularly. Obviously, we’re unable to start this project without having the required power and constant delays in the process have been frustrating.
Currently, we are working on mitigating strategies and alternatives such as evaluating other jurisdictions or breaking the project into pieces. No decision has been made, but we’re getting closer to such a decision. Aside from that, we continued our activities with related stakeholders such as our construction partner and First Nation groups. As mentioned before, the dynamics of North American CSPG market haven’t changed, and the supply deficit is persisting and could only be exacerbated by tariffs on Chinese imports. As it relates to our dry process graphene, I’m pleased to report that we ordered the equipment needed to produce industrial volumes of dry process graphene within our Timin’s facility.
Capacity of this module is between 500 to 1,000 ton per year. We anticipate receiving the equipment by end of calendar twenty twenty five and the start production in 2026. This module is one of the modules of the upcoming CSPG dry process graphene plant facility. Setting up this production module enables us to supply larger volumes of dry process graphene to our testing partners. In respect to our direct graphene powder and masterbatch cell, validations and testing activities are ongoing.
Regarding our customers in drilling fluid and insulation foam, results have continued to be promising. Our drilling fluid customer is undergoing more well tests in various locations in The US for both onshore and offshore drilling. Even though we expect these validations to continue, we have started supplying graphene to this customer, and they’re actively marketing this new lubricant in industry trade shows. As it relates to our insulation foam customer, we’re almost done with all the testing, expecting to move to commercial rollout in the first plant of our customer during summer. This customer has several similar production facilities, and we expect to roll out this product to other manufacturing production plants as well.
Both these products are pillars of our future growth and winning these businesses will materially impact the future of NanoXplore and graphene market as a whole. Yes. We have spent years of development with our Fortune 500 partners and looking forward expanding our partnership with them. For our graphene enhanced composites products, overall demand continues to be strong, but delays in new program launch combined with the uncertainty created by potential tariffs clouded the near term outlook. These tariffs already had disruptive effect with volume reduction of programs while OEM get a handle on the potential impact of tariffs.
Having said that, we continue to drive forward with investment in the new equipment and will continue to invest more as a part of our five year strategy plan. Large part of this investment will be in The United States and are supported by booked contracts with existing and new customers. As a matter of fact, our expansion in North Carolina progressed well with equipment expected to arrive in May, June time frame and revenues to pick up by August, September. Finally, I would like to say that we are focusing on what we control, which is operating improvement and making sure our balance sheet remains strong. I would like to thank the NanoExport team for their dedication, focus, and hard work in this challenging environment.
With that, I will now turn the call over to Pedro who will provide details about our financial performance.
Pedro Acevedo, Chief Financial Officer, NanoXplore: Good morning everyone. Today I will begin with a review of our Q3 results followed by an update on progress of our five year strategic plan and conclude with some commentary on near term CapEx spending and updated guidance for fiscal year twenty twenty five. Total revenues in Q3 were $30,400,000 compared to $33,900,000 last year. The reduction in revenue was mainly attributable to lower progress revenue recognition on new tooling being manufactured for three different customers as well as lower volumes from our two largest customers. While lower revenue recognition is purely attributable to timing, We believe the decrease in customer volumes reflects broader economic uncertainty affecting demand in the commercial vehicle market.
Adjusted gross margins as a percentage of sales continued to increase year over year reaching 22.4% during the quarter, an increase of 150 basis points. Despite lower sales during the quarter, the higher gross margins were in part driven by various manufacturing efficiency improvement initiatives, foreign exchange from a stronger U. S. Dollar and higher sales of graphene powder. This year over year margin improvement has been the trend for the last eleven quarters and we are pleased to see this positive momentum continue.
As a reminder to our shareholders and analysts, as the proportion of sales of graphene powder or graphene enhanced materials increases, gross margins as a percentage of sales will also increase. Adjusted EBITDA was $1,400,000 versus $572,000 last year. Looking at our segments, adjusted EBITDA was $1,320,000 in the Advanced Materials, Plastics and Composite Products segment compared to $1,260,000 last year and an adjusted EBITDA of $102,000 in Battery Cells and Materials segment compared to a loss of $688,000 last year. The positive EBITDA in the battery cells and materials segment was a significant improvement versus last year mainly due to R and D grants related to work done by Boltexplore on battery materials research, SR and ED tax credits and lower spending. With regard to our balance sheet and cash flows, we ended the quarter with $20,700,000 in cash and cash equivalent and $5,900,000 in operating loans and long term debt.
Operating cash flows amounted to an inflow of 4,900,000.0 in part due to operational performance and a reduction of non cash working capital. Cash flows from financing activities were an outflow of 1,800,000.0 which consisted mainly of repayments of lease liabilities and long term debt. Cash flows from investing activities were an outflow of 3,500,000.0 mainly related to capital expenditure payments related to The U. S. And Canadian plant expansions.
Our cash along with the unused space in our revolving credit lines resulted in a total liquidity of $30,700,000 at March 31. Moving now to an update on the financial aspects of our five year strategic plan. Regarding the expansion of graphene enhanced SMC capacity, expansion of our Saint Claty De Boulse plant continues. During the quarter, the new press and peripheral equipment were received and installed with final inspection and acceptance expected by the May. However, due to a reduced demand from our customer, the previously anticipated incremental production will be delayed and is now expected to begin no earlier than fiscal Q1 twenty twenty six.
Additional equipment related to the graphene enhanced SMC initiative is expected in late summer with production to begin in the second half of fiscal year twenty twenty six. Our US expansion which creates additional capacity for the composites business is also underway. During the quarter we completed lease negotiations and signed a lease for our new plant in Statesville, North Carolina about thirty minutes from our Newton, North Carolina plant. With most of the equipment arriving by the May, we expect production to start during the summer of twenty twenty five adding incremental revenues from a newly awarded program that is expected to generate over $10,000,000 annually. Turning now to our near term CapEx spending and fiscal year twenty twenty five guidance.
CapEx spending in the quarter was in line with previous guidance and we expect to spend $4,000,000 to $5,000,000 in the next two quarters as the bulk of equipment is being received and installed. We expect to then reduce to 2,000,000 to $3,000,000 or lower with a goal of less than $1,000,000 per quarter after that. We expect by the end of Q2 twenty twenty six to have completed the majority of the investments in our five year strategic plan related to this graphene enhanced SMC initiative. Finally, with regard to fiscal year twenty twenty five guidance as indicated during the last quarter’s analyst call the market for commercial vehicles was softening and since then we have not seen any improvements. Much of the anticipated growth for fiscal twenty twenty five was expected to come from increased volumes on existing programs and the launch of two new customer programs.
Unfortunately, the increase in volumes from existing programs has not taken place and the launch of the two new programs has been delayed by the customers. Based on the customers near term forecasts, we now expect sales for the fiscal year twenty twenty five to be at the same level of fiscal year twenty twenty four or approximately $130,000,000 While this is disappointing development following a strong first half of the year, we remain optimistic about the outlook for the following fiscal year. The launch of the two new programs as well as the launch of a newly awarded program for Statesville and anticipated growth in growth graphene powder sales are all expected to begin early in the new fiscal year collectively contributing a minimum of $15,000,000 in incremental revenue. This estimate is based on visibility we currently have with our customers though it remains subject to change depending on macroeconomic conditions. With that, I will pass back to Guerrero.
Pierre Therese, Vice President of Corporate Development, NanoXplore: Thank you, Pedro. Operator, we
Sourges Nazarpour, Chief Executive Officer, NanoXplore: can now open the line for questions.
Conference Operator: Our first question comes from Amr Ezzat with Ventum Capital Markets.
Amr Ezzat, Analyst, Ventum Capital Markets: Good morning. Thanks for taking my question. Morning. Morning. Sourish, you mentioned potentially, and I might have misheard, potentially breaking up the expansion plans into phases.
Should there be more delays. Just to clarify, since the CSPG and dry process graphene initiatives are inherently interlinked, What does scaling back interfaces mean? Does it just mean, like, reduced scope for both? I let’s start with four times instead of eight or something like that?
Sourges Nazarpour, Chief Executive Officer, NanoXplore: So so we are anticipating to make a decision about this program by the next release, which are full fiscal release that comes some sometime in September. That depends on the decision of the government related to the power requirement. We have received verbal approvals, but we haven’t yet received official letter. So within the next little while, we will decide to either go with the with the project as it is. And if we cannot get the required power, we can look into moving the project to different jurisdiction.
Clearly, we’re talking about United States or pretty much breaking the project to pieces. And when you talk about, you know, segmenting the project, it is a modular facility that can be chopped in half, but also can be broken to CSPG only or graphene, dry graphene process only. When it comes to the feedstock, if the decision is derived process, we have to provide the the feedstock needed for for that process, which has been, you know, difficult endeavor to find the the right high purity byproduct for that. So, again, it’s a little premature to comment on that. We should get more clarity in the next few months.
Amr Ezzat, Analyst, Ventum Capital Markets: Fantastic. And just to to be very clear, your macro stance on how attractive the CSPG market is, and obviously, the graphene market is, like, didn’t change. This is really a function of the delay in getting your incremental two megawatt power allocation.
Sourges Nazarpour, Chief Executive Officer, NanoXplore: Yeah. There’s no change in the market in the last you know, from the last quarter till now. Dry process graphene fundamentals is still valid, and CSPG market continues to be undersupplied in in in North America. So it’s more of a power requirement.
Amr Ezzat, Analyst, Ventum Capital Markets: Understood. Then in in the press release and in your prepared remarks, you you gave detail on graphene powder commercialization, I guess like citing that it’s very soon. Can you help us understand with more clarity the potential volume commitments that you would be getting either from drilling fluids or insulation foam? Are we talking about, you know, potentially one ton, or are we talking about, like, four tons? Can you just give us an order of magnitude, I guess?
Sourges Nazarpour, Chief Executive Officer, NanoXplore: You you mean 1,000 ton and 4,000 ton?
Amr Ezzat, Analyst, Ventum Capital Markets: Sorry. Yes. What what’s the correct one tons and 4,000.
Sourges Nazarpour, Chief Executive Officer, NanoXplore: Yeah. There are definitely more than one and four tons. So so on the on the drilling fluid, you know, it it’s both of these products, it depends also on the customer of our customer. Right? So we can talk about the the the total addressable market.
In the drilling fluid lubricant, you know, an average well is going to be between two to four tons of graphene to be used during the at the lubricant in in into the into the well. So, you know, if you’re looking at tens of thousands of wells that is done worldwide, that can give you an estimate of total addressable market. Of course, we’re not considering getting 100% of the market, but that should give you some some estimate of how big that can get. In the insulation foam, that single customer can start with hundreds of tons and moving to a thousand tons at maturity for that single customer. And, of course, the total addressable market is much higher.
Amr Ezzat, Analyst, Ventum Capital Markets: Then did you think you would be in a position to announce, you know, like, the size of these POs, or how how should we think about the cadence?
Pedro Acevedo, Chief Financial Officer, NanoXplore: We do our catalysts.
Sourges Nazarpour, Chief Executive Officer, NanoXplore: Yeah. We do our best to announce, both customers, both their names, and as well, the the volumes, but we have to get approval from the customer to do so.
Amr Ezzat, Analyst, Ventum Capital Markets: Okay. Great. Thank you. I’ll pass the line.
Conference Operator: Our next question comes from Rupert Merer with National Bank Financial.
Melissa Dean, Analyst, National Bank Financial: Hi, everyone. It’s just Melissa Dean here from Rupert today. Just on your outlook, could you give us an idea of what you’re seeing in your pipeline and what kind of conversations you’re having with customers that led you to anticipate a soft q four and a stronger first half of twenty twenty six?
Pedro Acevedo, Chief Financial Officer, NanoXplore: Well, customers typically give us the visibility. Typically, it’s two, three months out, sometimes more depending on the circumstances and then they adjust it on a regular basis. So for Q4 just addressing your first question Q4 we’re halfway through we already see that the Q4 is a bit on the soft side versus what we had earlier in the year and that’s why we have some confidence in what we believe is going to be the end year results for the company. Now going into the future, we do see some growth that is going to come back but that growth is on paper today and may be adjusted, down the road. We do know that there are new programs coming online so that that is kind of like a new a short thing.
There are delays in programs that we are seeing that they are going to start very soon so this is a good thing and there are new programs that are going to be or current programs that are active that we expect volumes to increase. What we’re seeing is just the the instability in the marketplace right now probably since the beginning of the year maybe even by the before the end of the calendar year 2024 we started seeing that the the market conditions were a little bit unstable and we can’t say specifically that the Trump election is causing this but there’s definitely situations in the market that are causing our biggest customers to have flatter levels of production and even sometimes in down production in their quarterly releases when when they provide that visibility. So right now I think that we do have very good visibility into the next year that’s why Suresh and I mentioned that we are very optimistic in our in our, near term and even long term, of course, forecasts.
Melissa Dean, Analyst, National Bank Financial: Perfect. Understood. And just on your pipeline, are you having any additional conversations toward towards additional long term offtake contracts with new customers? Or what can you give us there?
Pedro Acevedo, Chief Financial Officer, NanoXplore: Well, the long term customers really is that is more what Suresh was saying with those two customers that are
Amr Ezzat, Analyst, Ventum Capital Markets: in
Pedro Acevedo, Chief Financial Officer, NanoXplore: drilling fluids and, foams. Those two customers will will be announcing, with their permission at some future point, when the relationship becomes commercial, which one is soon gonna happen, and the other one is most likely gonna happen before the end of Calgary.
Melissa Dean, Analyst, National Bank Financial: Okay. Perfect. And last question for me. You’ve seen pretty strong cost control at both segments, but namely battery materials. Can you walk us through the main contributors to that and I guess what additional levers you have to pull there?
Pedro Acevedo, Chief Financial Officer, NanoXplore: On battery materials the big swing in the quarter really was related to the support that they are providing that this the battery materials team is providing to the battery R and D. So if you may recall we were granted a $3,000,000 3 year grant from the National Research Council last year the IRAP program and we leveraged the team in the Volta Explorer company to provide support on those initiatives which led to some revenues there We also had income investment tax credits that brought in revenues to offset some of the costs and we also had a lot less spending. Last year at this time we were still focused on the Gigafactory and still spending towards that goal. This quarter, in comparison we’re no longer spending that much money on these initiatives as we have kind of paused this initiative. We are still we still have the pilot facility we still are developing, r and d and that’s where those revenues have come from.
So that’s what contributed, for Volta, for the battery materials segment in the quarter.
Melissa Dean, Analyst, National Bank Financial: Perfect. I’ll leave it there. Thank you.
Conference Operator: I’m showing no further questions in queue at this time. I’d like to turn the call back to Pierre for closing remarks.
Pierre Therese, Vice President of Corporate Development, NanoXplore: Okay. Well, thank you, operator. And we would like to thank everyone for participating in this call and we wish everyone a great day. Thank you very much.
Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
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