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Otovo AS experienced a notable surge in its stock price following its Q3 2025 earnings call, with shares rising 21.91% to 0.83 USD. This increase comes despite the absence of specific earnings per share (EPS) data, suggesting investor optimism around the company’s strategic initiatives and future growth prospects. The stock’s movement is particularly significant given its 52-week range of 0.66 USD to 2.6 USD.
Key Takeaways
- Otovo plans to raise between $4.5 million and $8 million in new capital.
- The company is targeting positive operating cash flow by Q2 2026.
- Launch of an AI-driven home energy service platform is underway.
- Stock price increased by 21.91% following the earnings call.
Company Performance
Otovo’s Q3 2025 performance highlights its focus on innovation and strategic growth. The company is leveraging AI technology to develop a home energy service platform, aimed at expanding its customer base to 250,000 by 2028. Despite current financial challenges, Otovo’s initiatives reflect a commitment to long-term growth and market leadership in the energy sector.
Financial Highlights
- Capital raise: NOK 45-80 million ($4.5-$8 million) planned.
- Combined company valuation: Approximately NOK 469 million.
- Cash position: Expected to be NOK 190 million by early 2026.
Market Reaction
Following the earnings call, Otovo’s stock rose by 21.91%, marking a significant positive market reaction. This is attributed to investor confidence in the company’s strategic direction and upcoming innovations, despite the lack of immediate profitability. The stock’s performance is notable within its 52-week range, indicating renewed investor interest.
Outlook & Guidance
Otovo projects reaching 65,000 service subscribers in 2025, with a strategic goal of 200,000 in two years. The company also aims to achieve net income and expand into retail energy and grid trading. These targets reflect a focused approach to scaling operations and enhancing profitability.
Executive Commentary
CEO John Berger emphasized the transformative potential of AI, stating, "AI is going to make residential solar and commercial solar viable." Andreas, the founder, highlighted the strategic merger with Onvi, saying, "We believe that combining these two companies, we create an entity that can really address that, make people happy with their solar and battery systems every day for 20 years plus."
Risks and Challenges
- Achieving positive cash flow by Q2 2026 remains a critical challenge.
- Workforce reductions may impact operational capacity.
- The competitive landscape in the energy sector poses ongoing risks.
- Dependence on successful AI integration and customer acquisition.
- Macroeconomic factors could influence market conditions and consumer demand.
Q&A
During the earnings call, analysts inquired about the 60/40 exchange ratio between Otovo and Onvi, customer acquisition strategies, and AI’s role in reducing operational costs. The company clarified its funding plans and growth strategies, emphasizing a focus on sustainable development and innovation.
Full transcript - Otovo AS (OTOVO) Q3 2025:
Andreas, Founder and CEO of Otovo, Otovo: Good morning, everyone. It’s with excitement and trepidation that we present today’s news of a planned combination between Otovo and Onvi. We will today go through an agenda consisting of a presentation of the combination, an introduction of and by the new management, before opening up for your questions and our answers about the Q3 earnings, the combination, new capital, whatever questions you have. I’ll be starting out today. I’m a founder and CEO of Otovo, and I’ll be joined by John Berger, the founder and CEO of Onvi. This morning, we announced a transaction that creates a combination of Otovo in Europe and Onvi in the US. It’s a 60/40 exchange ratio, and Onvi today operates as Otovo USA in the US, and it creates the first AI-driven home energy service and financing platform present on both continents.
By combining Otovo and Onvi, we get access to two management groups, lots of experience, veterans from SunPower and the solar industry in the US, and my team of tech creators and platform builders in Europe. John Berger will become CEO of the combined entity, and I will move into a role as Chief Product Officer, with responsibility for solutions, product, and marketing. We also announced that we are raising new capital to fund the company. We have NOK 45 million committed in a raise at one kroner per share. That is 2% below the 60-day VWAP. It is at a premium to yesterday’s close of more than 40%. That NOK 45 million raise is supported by leading shareholders, prominent shareholders on both the Onvi side and the Otovo side, and new institutional investors.
The capital raise will go on on both the American and European sides, and the gross proceeds are planned to land between NOK 45 million and NOK 80 million, roughly $4.5 million and $8 million. This funds growth, geographic expansion, development of technology, and new sales. The more we raise, the faster that will go. The new capital and the new management combine to accelerate our new strategy to focus on service and maintenance, rapid repairs, and grid services. Those are segments with high margins and recurring revenue. We will be targeting the tens of millions of homeowners in the United States and in Europe, who have home energy assets like solar PV systems, batteries, generators, heat pumps, and other technologies. We will expand our leasing and our leasing platform for PV and battery, of course, as a continuing affair.
Overall, we create the all-in-one energy service and financing platform operating on two continents. It’s really the first company to solve the biggest problem in the PV industry, the long-term and problems of creating 25 years of well-working systems, financed and serviced, with maximum uptime. Our belief is that consumers have been short-changed for a long time. Now we have the solutions for them. We also aim for positive operating cash flow in Q2 2026, excluding one-time expenses such as severance and contract termination payments, et cetera. Good. Let me now dive into the new combined product. We’re creating a leading all-in-one home energy service and financing platform operating in the US, where our US headquarters are in Houston, and in Europe. It’s two unique businesses creating a combined global leader.
We’ve built out our ability to provide value for customers through solar, through battery, and through leasing, in Otovo over 10 years, and now we will be expanding that with more recurring revenue value-creating, revenue stacking, business lines, where service is front and center, but where we will also expand to retail energy, grid trading, and other upside as we go. Let’s double-click on that service element. Millions of customers across Europe and in the United States have invested in solar PV and batteries. The problem is that when these valuable assets that create savings for them every day in the form of lower electricity bills, trading upside in the battery, stop working because of malfunctions, weather, or faulty installations, they have no one to call. Why? Because as these systems have aged and the industry has gone through massive fluctuations, many of the original installers don’t exist anymore.
People find that they have slow, unreliable repairs for the big investments that they’ve made. That creates costly outages and value that is lost to the consumer. We’re confident that we can target these more than 30 million homeowners on both continents and tap into the $50 billion aftermarket of servicing and maintaining systems. In fact, we’re well on our way to do that. Over the last five years, we’ve built a vast leasing portfolio in Europe where we get paid every day to service and maintain those systems. In the third quarter of 2025, we also initiated a subscription, membership for service where customers get virtual help center available 24/7, rapid response, and discounts on repairs.
We can do remote diagnostics by putting their systems up in the cloud and telling people that it’s time for repairs or that something is malfunctioning on their system, like many of you probably experience with your cars today. Combined, we now have about 15,000 subscription customers at the end of Q3. These customers are either on leasing, where we get paid for the service, or they’re paying service subscription, subscribers with EUR 108 per year upfront payment, or they pay as they go at EUR 12 per month. 97% of subscribers have chosen the upfront payment with EUR 108 upfront. We are able to acquire these customers, as indicated in the message released in September about solar customers we acquired, at about half the yearly revenue from these customers. It is a very attractive segment for us.
15,000 today, ambition of 65,000 next year, 200,000 two years from now. How can we achieve that impressive growth? Through multiple avenues. First, Otovo has a customer base of more than 40,000 people. We want to tap into that. Our installer ecosystem has more than 300,000 systems that they’ve built over time that we can create service agreements on. On top of that, we can do traditional performance marketing, online marketing, to acquire customers against marketing payments. A third and exciting avenue is fleet deals to service systems owned by financial owners of lease paper, or by doing service agreements for original equipment manufacturers, from the big brands in battery, inverters, et cetera. We think the combined management has access to these companies in an extraordinarily privileged way, so we can keep growing that segment.
Then fourth, we can acquire customer books, and we’re seeing lots of opportunity there. Customer books from companies that are about to go out of business or are out of business, where their customers are without any coverage of service. That’s an attractive segment that converts really well. Based on this type of customer acquisition, we believe we can grow very, very rapidly. That leads to a very upbeat outlook for us. We believe that the potential here is immense on both sides of the pond. To build on the direct sales, the lease segment, we build this service segment and other solutions, both in the US and in Europe. In order to make sure that we have the funding to assure this growth, we are completing a fundraise of NOK 45 million-NOK 80 million. That is happening on both sides of the Atlantic.
More on that in a separate, or in the stock exchange notice. We have a backlog of projects that will be installed, helping us finance this transition. And we’ve done a cost reduction program that takes effect during this quarter, allowing us to stabilize cash flow on existing Otovo before adding growth from the service segment. We are well funded for 2026 and look forward to attacking that, with a product line that has very good EBITDA attributes. Now, let’s move on to introducing John Berger, who, when this combination completes, is intended to become the company’s Chief Executive Officer. John, over to you. Let’s get introduced to the new CEO. Good morning. Thank you, Andreas. This has been a long time in the works. I’ve admired what Andreas and the team have done, with being the founder of Otovo.
He’s done, has a lot of vision, and I look forward to working with him to take that vision, make it a reality, and take it to the next level. When you look at the three things that we see as far as, you know, attributes of the company and its strategy, the first one is AI. This is not a buzzword using AI just to get notice. We’ve actually built an entire software stack, app on Onvi that we are going to use across in the new Otovo. That has crushed out an immense amount of cost. It’s crushed out in both CapEx and OpEx and has created agents that do work far more efficiently. The second is, is that service, as Andreas said, is very underwhelming in both the EU and the United States.
are 33 million homes, as Andreas pointed out, that have some sort of power generation, and that, of course, that number is climbing. There is no one that comes to that homeowner and business owner as an also, market opportunity for us. And says, "We are going to be there to deliver and fix your power system, solar system, batteries, et cetera, on a timely basis, 48, 24, 12 hours or less basis." We are doing that, and we will spread that out. We will be the best in service, and we will have a relentless focus on the customer. As well as what, the last piece is, this space has been dislocated, to say the least. There is a lot of value and opportunity out there, and we see an immense amount of ability to buy other service companies in both the US and the EU.
Indeed, we even have some under LOI that contain tens of thousands of customers. We see this as a very great opportunity to come in and be greedy when others are very fearful. I would like to point out that the company will have plenty of cash. We recently just raised cash. We’ll be able to bring that cash to the table, plus the additional cash we’ll raise. We’ll be able to drive down the cost of the AI, and we have the right business model and strategy to generate significant net income growth, and we’ll be focused on generating that net income. Wonderful. With that, we’ll open up for the Q&A section. Please don’t be shy in leaving your questions. Maybe first, a quick disclaimer. I see that there’s a typo on the minimal amount raised in this version.
That is not correct here. It’s 45 million. In case that is ambiguous, I refer investors to the material that is published on the Euronext Stock Exchange for the correct amount there. Question is combination rationale. Can you, can you, the structure and valuation exchange ratio of the deal? I guess that ex means can you explain the structure and valuation? Yes, the structure is quite simple, in fact. Technically, this happens as an acquisition of Onvi by Otovo ASA. Onvi is the American entity that is a part of the combination. That acquisition happens at a valuation of NOK 189 million or thereabouts, creating a 60/40 exchange ratio between Otovo at stock price one and Onvi at that valuation. Now, that creates a combined entity of a 280 plus 189 million combined valuation.
and then we’re doing a capital raise of NOK 45 million-NOK 80 million on top of that. That will be the structure of the cap table after the transaction and capital increase happens. The rationale, my view is that, as explained in this presentation, both the European and the American energy system and the homeowners that exist in it is uninsured. People have been over-promising on day one, under-delivering on day two to 10,000. As this magnificent technology of solar panels, batteries, provide value for customers every day, not only if it works. We believe that combining these two companies, we create an entity that can really address that, make people happy with their solar and battery systems every day for 20 years plus. For me, that at least is the motivating factor. John, do you want to add something to that? Yeah, certainly.
When you look at the ability to solve a problem that’s pretty acute for customers, especially as utility bills are rising because of AI, energy usage, those panels underperforming actually leave a lot of dollars on the table that are very important to both American families and the families in the European Union, countries of the European Union. What we see is there is a vital service that needs to be provided to make sure that these assets are treated accordingly, just like utility assets, and they are repaired very quickly to provide that power to those homeowners to lower their bills and increasingly providing very important and needed financial, you know, income for consumers. Good. You are talking about quite rapid growth for the service business. Where will this growth come from? John, do you want to take that? Sure.
You may mention that there is a, several different ways to do this, and I can tell you we’re already executing this in both the United States and Europe, as you mentioned earlier, Andreas. First one is there’s a lot of service companies out there. Frankly, there’s a lot more than I thought there was. They’re stacking up. We have a very full pipeline. We have some under LOI. Are these small? You know, they’re small, but there’s tens of thousands of customers in some of these in both the EU and the US. I would say that we can get to somewhere between 50,000 and 100,000 very, very quickly, just with what we see. And frankly, we have a lot under LOI.
Customer books from installers, obviously we know a few contractors, worked with some of the best in the world, and we’ve had a lot, already had some success in taking over some of those customers. Why is this an opportunity? Because there’s a big difference between installation and service, and mixing those two together has been the industry’s mistake, both on solar and in generators. We’re the service, not the installer. OEM partners, we have been fortunate to have a number of relationships.
We have some of those under contract, and we have been executing those, and we look forward to sharing that with the Europeans, and spread out and become that one-stop shop and, for these important partners, global partners of equipment manufacturing and so forth, so that they can make sure that they have their customers taken care of on the service side while they focus on making incredibly good products. Retail power has been a huge win here in Texas and the United States in acquiring customers and optimizing both the retail power around the customer where you can in the deregulated markets, which is all of the European Union, and providing the VPP or the power that goes back into the wholesale system and providing more value for the customer. Of course, there’s referral.
We’ve gotten a lot, a lot of those customers and more and more are coming our way. The last we’re able to provide with this combination is the financing in those applicable markets where customers come to us, as you’ve been doing, Andreas. I did a little bit of it in the United States before on the financing side of things. All this stacks up. If we had 250,000 customers, which is our target by 2028, we feel like that would generate a significant amount of net income. I know we’re going to put forth a plan when we close this transaction in December. We’ll have more details out for investors there, but it’d be quite exciting, to say the least. If you look at 250,000 customers on 33 million and climbing, that’s pretty small.
That is absolutely incredibly doable, and I’m looking forward to doing this with you in record time. Great. There’s a question here. Is the minimum NOK 45 million enough to fund the company to profitability? Yeah. The combined entity will have access to the cash on hand at the end of the year in Onvi, cash on hand at the end of the year in Otovo, plus NOK 45 million. We believe that is about NOK 40-45 million in cash on hand and then minimum NOK 45 million raised in the two entities. That brings us to approximately NOK 190 million at the beginning of 2026 with an upside, with an upside there. Is that sufficient? Yes. Or else we wouldn’t have done this. That wouldn’t have been the plan.
I think it’s worth keeping in mind that the cash attributes of the service segment are very good. The customers we’ve been getting in Europe so far are paying upfront, and we have the marketing cost later, and that cost is lower. It is a cash positive growth. Of course, we love that. It also layers recurring revenue that you don’t have to go out and chase tomorrow. Everything is additive. I think investors should keep in mind that for us, we have a fantastic head start on building the service product. We service 15,000 systems across Europe because we have to. Customers pay us every day for the leasing system, or they’ve signed up to be part of this.
We’re already over the hard part in the beginning, which is to make sure that you can service systems from the north of Norway to the south of Germany or south of Spain, because we already have the installer ecosystem. Every marginal customer just taps into that infrastructure. We don’t have to add operators on the call center. We don’t have to add more installers. We have that, and we know how to build it. I think we come across as confident about this. We certainly are. Yes, I get a reminder from the operator that viewers can submit questions to ir@investorweb.no. That’s ir@investorweb.no. Okay. Here’s a question. Onvi Inc. is incorporated in Texas in 2025 after John Berger quit SunPower that later filed Chapter 11.
What assets does this company have that justify the 60/40 split between the companies? Let me start on that, John. I’ll hand it over to you. From my perspective, what Onvi has is strong leadership, veterans from the industry, John himself and his leadership team that are capable and know how to build the type of operational structure that allows you to be distributed across large areas and provide top service to customers everywhere. Second, they have access. As John said, they know the equipment manufacturers. They’ve worked with them over several years. And frankly, during this process, John and his team have opened doors that have been closed to us in the past. That’s going to be important in order to build.
Fleet agreements with these equipment manufacturers that they are relying on to do recalls or repairs of systems that are in warranty, but where the original installer does not exist anymore. Leadership, access, technology. We have been building a platform over 10 years, and we see value, or we know value when we see it. John and his team, in the short time, have really challenged what you need to spend money on by using AI to replace software costs and human costs that would have otherwise arisen. To us, that sort of challenges us to be even leaner, use AI even more than we do today. I would put those forward as the main arguments. John, do you want to add something? No, that covers a lot of it.
What I would say is that obviously we raised several million dollars in cash as well, just recently, a couple of months ago. We will be able to bring that to the table. That, as you have reiterated several times, is in addition to what we raise here. I am quite confident we can even, you know, raise more cash than we have laid out here. More importantly, I see a very clear picture of generating cash, which is what a business is supposed to do, obviously. We can do that. Yes, I take lessons learned from an industry. It has been pretty hard hit. There will be other casualties in this space, particularly on the American side, unfortunately. I will be able to take those lessons learned and bring them to bear here.
First of all, we’re going to keep the accounting very simple. Whether it’s GAAP or IFRS, it’s going to be very simple, unlike some of the accounting back in my old company. We’re going to make sure that we have very clear communication with investors so they can see how we’re generating value, very clearly. I’m quite confident that we’re going to be focused on generating net income fairly quickly. We’ve got an enormous amount of opportunity ahead of us. More importantly, we’ve already seized on a lot of that opportunity, as you said, with some of the customer growth that we’ve already seen in a very, very short period of time. The AI is just amazing.
My folks think that, within the next few weeks, we’ll actually surpass what SunPower took over a decade to build and several hundred million dollars to build in a platform. It is truly astounding. We’re learning more and more about AI all the time, and we have a leading cutting edge, given the talent that we have on staff. I’m looking forward to making that. I think personally, and I know you agree, Andreas, AI is going to make residential solar and commercial solar viable, by far. It’s going to really enhance the value proposition for consumers. I entirely agree. Otovo has 40,000 customers who I think represent all the major data we need to train. Over a decade from our older system, we’ve collected the data from the inverters and the batteries, their feedback into our cloud.
We know which issues they have. We know which issues customers report to us. It’s a fantastic training ground. In addition to that, more than 3 million homes have been priced and assessed by our software. Also a fantastic training ground. Based on that, I think we can tap into an industry that is intense on labor. That’s exactly something that these generative models are good at challenging and good at cutting costs at. We’re excited to head into that. Okay. What will happen with Otovo USA? After the combination, Onvi will be Otovo’s operating platform and a subsidiary in the U.S., and will remain as a company. We will use that in Texas and in other states in the U.S. Yeah.
What’s the idea to learn more ahead of this deal? I’m not sure I understand the question, but I hope you’re learning as we are on this call. There is also quite substantial information on an extended version of the presentation that we gave now available in the software change. What is your expected cost base for the combined company? That cost base consists of what we have in the ongoing old Otovo in Europe, where the cost base is compressing, both in payroll, marketing, and operational expenses. Otovo Europe will, at the end of this quarter, have about 120 people on staff. Onvi is about 30. In general, Onvi and that ratio, I think, is representative more or less of cost.
Labor in the US is slightly more expensive than in Europe. That allows us to have a resource location arbitrage over time. In general, the software cost and other OpEx is very lean on the American side. I think that should give it at least a comparable indicator. Anything we should add to that, John? No, I think you’ve nailed it. You know, I want to highlight a little more of what you said, is that on the service, it’s very important that you have an operational center outside of areas that could be hit by storms, for instance, hurricanes. The ability to cross both sides of the Atlantic is something I’ve always coveted, is that you’ll never be down.
That’s critically important, especially when big storms get into the Gulf of Mexico and can really cover a lot of area in customer service territory that we have in the United States. I think that’s a big attribute. The cost structure in the EU is substantially below that in the United States. That’s going to be a real advantage. Of course, as you mentioned, and we’ve talked about it, including my answer to the previous question about AI and driving cost structure down, we’re quite confident that that is, and we’ve identified costs we can take out even further than what we have already seen and have today. We are very, very focused. I’m going to keep saying that.
I know you agree with it on net income and how we’re driving that, make cashflow positive, and then create a lot of net income. My personal compensation plan right now, probably will continue, is I don’t get paid anything until there’s net income. If you want to know, the ships have been burned in the bay, we are focused on getting to that point. I’m quite confident we’re going to get there, as we said during the Q2 quarter. Great. Can you substantiate the support for the NOK 45 million? Yes. That support exists from existing prominent shareholders in Otovo, existing prominent shareholders in Onvi, and credible institutional capital that supports the deal without owning in either stock. That capital raised is happening at NOK 1 per share. That is the same terms, both the exchange ratio and the capital raised.
We feel, you know, proud about that and very appreciative of the support from these three groups of investors, Otovo, Onvi, and new capital. They are roughly in equal shares, as of now. Then we’ll see how that develops, going forward. Good. We’ll never be down. I think that was a good motto to end this, John, not the companies and not the customers. Thank you for tuning in. We will end this webcast now. Thank you very much and have a nice day. Bye-bye.
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