Earnings call transcript: Wallbox NV sees stock dip after Q4 2024 revenue drop

Wallbox (NYSE:WBX) NV’s recent earnings call for Q4 2024 revealed a 14% year-over-year decline in quarterly revenue, contributing to a 7.41% drop in the company’s stock price. Despite a 14% increase in full-year revenue to €162 million, the company’s gross margin fell below target, and adjusted EBITDA remained negative at -€88.43 million. The market reacted negatively, with premarket trading showing a 2.78% decline. According to InvestingPro data, the company operates with a significant debt burden of €272.92 million and faces challenges with cash burn, raising concerns about its financial stability.

Key Takeaways

• Wallbox’s Q4 revenue decreased by 14% year-over-year.
• Full-year revenue grew by 14% to approximately €162 million.
• Gross margin was 34.6%, below the target range of 38-40%.
• Stock price fell 7.41% following the earnings call.

Company Performance

Wallbox NV reported a mixed performance for 2024, with full-year revenue increasing by 14% to €162 million. However, the company faced challenges in Q4, with revenue declining by 14% compared to the previous year. The gross margin also fell short of expectations, coming in at 34.6%. Despite these setbacks, Wallbox made strides in reducing operating expenses and improving adjusted EBITDA by 21% year-over-year, although it remained negative.

Financial Highlights

• Full Year 2024 Revenue: €162 million, up 14% year-over-year
• Q4 Revenue: Down 14% year-over-year
• Gross Margin: 34.6% (target was 38-40%)
• Cash Position: €46 million, excluding a recent $10 million private placement
• Reduction in labor and operating expenses: 11% year-over-year

Market Reaction

Following the earnings call, Wallbox’s stock experienced a significant decline, dropping 7.41% to a price of €0.49. The stock had been trading near its 52-week low of €0.413, reflecting investor concerns over the company’s quarterly performance and future profitability. InvestingPro analysis indicates the stock is currently undervalued based on its Fair Value model, though investors should note its high price volatility (Beta of 2.03) and significant decline of 66.43% over the past year. Analyst price targets range from €0.50 to €2.00, suggesting potential upside despite current market pessimism. In premarket trading, the stock continued to decline by 2.78%, indicating persistent negative sentiment among investors.

Outlook & Guidance

Looking ahead, Wallbox has set a revenue target for Q1 2025, with expectations for gross margins to improve to between 37-39%. The company aims to achieve EBITDA breakeven at a quarterly revenue of €40-45 million. Wallbox is focusing on a balanced mix of fast charging and home/business charging solutions, with new product launches such as the Supernova UL and Pulsar Pro socket expected to drive future growth.

Executive Commentary

Henrique Ansencion, CEO of Wallbox, acknowledged the challenges faced by the EV industry in 2024, stating, "2024 has been a challenging year for the EV industry." He remained optimistic about the future, emphasizing, "We believe the transition to EVs is going to take place. It is only a matter of when not if." Ansencion also highlighted the company’s focus on profitable growth, stating, "Our goal is to generate profitable growth."

Risks and Challenges

• Continued pressure on gross margins could impact profitability.
• Market saturation and slower growth in Europe pose challenges.
• Macroeconomic factors and potential tariff impacts could affect costs.
• Achieving EBITDA breakeven remains a key financial goal.

Q&A

During the earnings call, analysts questioned Wallbox’s capital raise strategy and funding runway. The company detailed its path to profitability and cash flow positive status, addressing concerns about potential tariff impacts and manufacturing flexibility.

Full transcript - Wallbox NV (WBX) Q4 2024:

Operator: Hello, everyone, and welcome to Warbucks’s Fourth Quarter and Full Year twenty twenty four Earnings Conference Call and Webcast. My name is Charlie, and I’ll be your operator for today’s call. At this time, all participants’ lines have been placed in listen only mode to prevent any background noise. And now let’s turn the call over to Michael Wilhelm from Woolbox to begin. Michael, please go ahead.

Michael Wilhelm, Investor Relations, Wallbox: Thank you, Charlie, and good morning and good afternoon to everyone listening in. Thank you for joining today’s webcast to discuss Wolbach’s fourth quarter and full year twenty twenty four results. This event is being broadcast over the web and can be accessed from the Investors section of our website at investors.wallbox.com. I am joined today by Henrique Ansencion, Wallbox’s CEO and Luis Boala, Wallbox’s CFO. Earlier today, we issued our press release announcing results from the fourth quarter and year ended 12/31/2024, which can also be found on our website.

Before we begin, I would like to remind everyone that certain statements made on today’s call are forward looking that may be subjected to risks and uncertainties related to future events and or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company’s most recent public filings with the SEC, including the annual report on Form 20 F for the fiscal year ended 12/31/2023, filed on 03/21/2024. We will be presenting unaudited financial statements in IFRS format that reflect management’s best assessment of actual results. Also, please note that we use certain non IFRS financial measures on this call and reconciliations of these measures are included in the presentation posted on the Investors section of our website.

Also, a copy of these prepared remarks can be obtained from the Investor Relations website under the Quarterly Results section, so you can more easily follow along with us today. So with that out of the way, I will turn it over to Henrik.

Henrique Ansencion, CEO, Wallbox: Thank you, Michael, and thanks everyone for joining us today. I would like to start today’s call reflecting on 2024, which included exciting achievements and solid progress on the challenges we are facing. To start, 2024 has been a challenging year due to the slowdown in the EV market, which also impacted our results. If we look at the EV market in the main regions we operate in Europe, North America and rest of all which are all countries excluding China, the EV market only grew 6% year over year. This market growth continues to be subdued compared to initial market expectations.

However, at Worldworks, we believe that we are managing this down cycle in the EV transition as one of the best in the industry. Revenue for the full year totaled million, reflecting a 14% growth compared to last year. The main growth drivers were the full year contribution of ABL and solid growth in the North American market, up more than 40% year over year. We delivered more than 162,000 AC units and close to 1,000 DC units during the year, allowing us to surpass 1,000,000 charges sold in the history of workers. We have achieved these results with a more efficient organizational setup as we continue to drive down labor and operating expenditures, down 11 compared to last year.

As a result of this growth and cost optimization, we improved adjusted EBITDA by 21% year over year from negative million to negative million. We remain confident that last year’s strategic initiative will continue to improve our adjusted EBITDA with the positive impact of these efforts becoming more visible in the coming quarters. The new business unit structure introduced last quarter is allowing us to more efficiently service each target segment, home and business, fast charging and software supported by manufacturing. In parallel, our product portfolio continues to evolve with new versions of our chargers and software solutions and we believe we remain a technology leader in the space and find opportunities to improve our margins. Examples include achieving the UL certification for our bidirectional charger, the Quasar II as the first one in the industry and the launch of the new SuperNova and Pulsar versions such as the SuperNova UL, SuperNova two twenty, the fastest wall mounted DC charger today and the Pulsar Pro socket which is showing strong traction in the commercial segment.

We have strengthened our commercial relationship with parties such as ENGIE, Generac, Free2Move, Florida Power Light, Aeronovo and Avirdro Line and in 2024 raised an additional $45,000,000 from strategic investors. Excluding the $10,000,000 private placement that took place in February 2025 and announced earlier this week. While these are notable achievements considering the challenging market backdrop, we are not satisfied. It is important that we continue to focus on our strategic plan, continue to right size the organization and further secure the fundamentals to be successful in the long term. We believe we have an unparalleled platform for further growth with a complete product portfolio and global footprint coupled with strong commercial partnerships and the invaluable trust of our strategic investors.

In our opinion, the transition to this is going to take place. It is only a matter of when not if. Based on different indicators such as declining battery prices, introduction of affordable EV models and continued investments, we believe we are close to the inflection point and we are well positioned to benefit from the massive growth that lies ahead. Now, we will go into the highlights of the fourth quarter and share our perspective on the market. Afterwards, Luis will offer a closer look at our financial results and our key financial metrics.

And finally, I will return to close the conversation and provide Q1 twenty twenty five guidance. Q4 revenue was million, down 14% year over year and missing the item range we provided in our last earnings call, but it improved with eight percent compared to last quarter. The main reason was lower DC fast charger sales, which was down 34% quarter over quarter as certain customers pushed out expected orders. As commented on our previous earnings call, our CPU customers have been building up inventory as their focus has shift from highly accelerated rollout towards profitability. This trend was more significant than expected and is impacting the whole industry.

We are working closely with our CPO partners to understand the rollout plans including product requirements to improve our visibility and pipeline. In parallel, we have continued to sign up new commercial partners with the more recent example, Bif. This CPU operating in The United Kingdom (TADAWUL:4280) is expected to allow different versions of our Supernova product to further expand their charging network. Growth in AC of 14% quarter over quarter partly offset the slowdown in DC fast chargers, but not sufficiently to cover the gap to our guidance range. As previously mentioned, North America kept seeing significant growth as well as an uptick in other markets such as Belgium, France and The UK.

In total, during the fourth quarter, we delivered more than 38,000 AC units and more than 100 DC units. Gross margin was 34.6% in the fourth quarter, which is lower than our target range of 38% to 40% and guidance provided last quarter. The main items impacting the result were product mix due to the lower top line contribution of DC fast chargers and AVL. We are actively looking to unlock several gross margin expansion opportunities to reach and potentially exceed the 38%, forty % prior target range, which we will discuss shortly. On the cost side, one of the levers where we have greater control, we have made significant progress and continue to do so.

When we look at our cash costs, which is defined as labor costs and OpEx excluding around the activation, non cash items and one off expenses, we achieved a year over year reduction of 19%. We expect further improvements in the coming quarters as we continue to find ways to optimize organization with the further implementation of the new business unit structure. For the fourth quarter adjusted EBITDA was closer to the improvement trend we had seen earlier this year at a negative million and improved with 43 compared to last quarter. The main drivers were the bond swapping gross margin and a 10% quarter over quarter reduction in labor and OpEx costs. The cost improvement positions the company for the future but was not sufficient to cover the gap to the adjusted EBITDA guidance of million to million.

We monitor closely our sellout metrics and can see that the inventory in the channel is healthy and that our sell out performance generally outpaces or is in line with EV sales in our key markets. We therefore stand in a privileged position to capitalize on our anticipated massive growth of EV sales. Nevertheless, as the volatility in the market continues and top line visibility remains challenged, we continue to push for rightsizing the organizational structure and becoming profitable at current top line levels. For the fourth quarter twenty twenty four, Europe contributed million of consolidated revenue or 69% of total revenue and remains the largest region. Considering the softness in the European market based on the sellout data, we have been able to hold our market position and we believe this will result in an uptick in selling in the near future.

North America remained the strongest growth market in 2024 for wall walks and in the fourth quarter contributed million or 28% of the total revenue. This represents a 64% year over year growth compared to the fourth quarter of twenty twenty three, while the market in the region grew 12%. In the past, we mentioned the importance of North America market and we’re excited to see the progress we are making with our strategic partners such as Generac and Free2Move. It was great to see one of our pulsar being featured in the recent Super Bowl ad of Chip. For 2025, we see an opportunity to grow in this region despite the change in the EV sentiment, which I will comment on shortly.

APAC contributed or 2% and LatAm was approximately or 1%. AC sales of million including ABL represented approximately 72% of our global consolidated revenue. Compared to the previous quarter, the AC sales grew 14% mainly due to continued momentum in North America and increasing demand in Europe for the Pulsar family. Especially with the introduction of new Pulsar versions such as the Pulsar Pro and the Pulsar Max in the residential segment, there has been good traction. We see improvements in the upgraded versions of our products which are designed to be easier to install and offer new features.

Also, our software remains a key differentiator, enabling customers to efficiently manage their charges. The Worldworx app enhances our home EV charger providing features like real time monitoring, scheduling and remote operation via Wi Fi or Bluetooth. Our app is recognized as one of the best in the space which give us a clear competitive advantage. With digital core plant integration, our charges can contribute to greater stability and enable users to participate in energy markets, further reinforcing our leadership in smart charging solutions. The attractiveness of our smart charging solutions allow us to continue to support existing partners and signing up new partnerships.

Through our partnerships with the likes of Free2Move and Iberdrola (OTC:IBDRY), we continue to sell thousands of chargers to companies such as Jeep, Alfa Romeo, Mercedes, Volvo (OTC:VLVLY), Maserati and Hyundai (OTC:HYMTF). DC sales were million representing 8% of sales in the fourth quarter and much lighter than expected. As mentioned before, there is inventory build up with our CPO customers and orders have been pushed to 2025 as they slow down the rollout of their networks as the EV fleet is not growing as fast as expected. In The U. S, we launched Supernova at the beginning of 2024 which was a great milestone as we expanded our product offering in this region with fast charging.

We have made a very successful launch and are still ramping up our commercial efforts and order book. In Q4, we received the IFRIGHT certification to sell our supernova in German and are in the process of receiving the CTEP certification to be compliant with regulations in California. Both of these certifications will expand our addressable market significantly as we continue to see enough customers that look for the product specification, reliability and high power to food premium ratio that Supernova can offer. Software (ETR:SOWGn), services and others contributed million for the fourth quarter, representing 20% of our total revenue and 18% growth compared to last quarter. We are excited by this segment’s rapid growth, which is already fueling a scalable competitive edge in our market.

As mentioned at the start of the call, 2024 has been a challenging year for EV sales. EV market growth was volatile and clearly below expectations, especially Europe has been soft, which was down 2% compared to the full year 2023. North America and rest of the world show more promising growth with respectively 1028% year over year growth rates. However, these markets are smaller, especially for wallboats and are still catching up. As reported by Roll Motion, in our addressable markets combined 6,100,000 EVs have been sold representing a 6% year over year growth.

Looking forward, while the near term market visibility remains low, long term prospects point to massive growth. For 2025, the industry firms such as Roll Motion expect the market to continue to grow with high double digits including North America and Europe with 2321% respectively. In Europe, stricter emission regulations come into effect and we see already strong initial sales numbers picking up in the last quarter of twenty twenty four and in the first month of the New Year. In North America, there is a change in sentiment now that the new administration has taken office. This has impacted certain subsidies such as navy and will impact fuel economy standards, limiting the legislative pressure to increase EV sales.

Other subsidy schemes such as the IRA, which includes the EV tax credit are currently being reviewed. Meanwhile, automakers keep betting on EVs long term and are allowing to keep certain incentives in place and push for regular phase out as more affordable EV models become available. Also several states continue with their own regulations and incentive programs. In the end, we believe that new administration is not opposed to EV’s but that the industry must be commercially viable without government support. There are many proof points that we are getting close to this inflection point with decreasing battery prices, more affordable car models and continuous investment.

Leaving any emissions, I am an environmental concerns aside, I’m a strong believer that EVs will eventually dominate the outdoor landscape. They are more efficient, better performers, cheaper to maintain, becoming cheaper to buy and safer. If we look at what this means for Woolbox, we recognize the proof points and are optimistic about the market. Nevertheless, we are very intentional about reaching profitability and cash generation independent of market growth. That’s why we’ve realigned the organization around the key levers we can control, gross margin, OpEx and working capital to drive sustainable growth and ensure our long term success.

Luis, I’ll turn it over to you to comment further on our financial details.

Michael Wilhelm, Investor Relations, Wallbox: Thank you, Henrik. Good morning and good afternoon to everyone. Our fourth quarter results are softer than expected and missing the guidance provided in our last earnings call. The revenue was million, down 14% year over year, but showed an improvement compared to the previous quarter. AC sales showed a strong recovery with 14% growth quarter over quarter.

The North American market continues to grow fast and the European business is recovering. However, PC sales were much lower than expected mainly due to inventory build up with customers and purchase orders being dragged to 2025. With 34.6%, the gross margin is lower than expected and outside the target range we communicated before. The main reason is weaker sales of DC fast charging and ABL, impacting the probe mix as these are higher than the group’s target margins. Looking forward, we continue to see opportunities to expand gross margin through improved bill of material cost, increased economies of scale and the introduction of newer version of our products with higher quality and expanded features.

Q4 labor costs and OpEx landed at EUR 28,800,000.0, which was flat compared to the same quarter last year, but does not clearly reflect the cost reduction achievements in the past year due to ABL entering the perimeter on 11/01/2023, an inclusion of one off items. On a full year basis, labor costs and OpEx decreased 11%. If we look at our cash cost instead, which is defined as labor costs and OpEx excluding R and D capitalization, non cash items and one off expenses, we achieved a year over year reduction of 19% in Q4. Cost control remains one of our highest priorities on our path to profitability. Among others, the activities we’re undertaking are rightsizing the organization, removing unnecessary spend and renegotiating necessary spend.

As part of the efficiency efforts, we have reduced headcount by 35% compared to the same period last year. Consolidated adjusted EBITDA loss for the quarter was million. Softer top line and lower than expected gross margin have been the main reasons why we did not land in our guided yet range. And yet, these results show a lean organization that provides an improved adjusted EBITDA margin on lower level of revenues. This will show incremental improvement on profitability in the upcoming quarters as the top line increases.

We ended the quarter with approximately EUR46 million of cash, cash equivalents and financial instruments. This is excluding the approximately USD10 million private placement announced earlier this week from our trusted strategic shareholders. Loans and borrowings were approximately US198 million at the end of the quarter with approximately million in long term debt and approximately million in short term debt. In order to strengthen our balance sheet, we successfully negotiated with our main lenders, Santander (BME:SAN) and EVVA for an interest only period of eighteen months starting in November 2024. We are now actively expanding that interest only period to another pool of loans to minimize loan repayments in 2025.

’20 ’20 ’4 loan repayments amounted to almost million. CapEx was again light, but slightly higher than the last quarter at million. Million was invested on property, plant and equipment. Full year PP and E and intangible CapEx excluding R and D capitalization was million, below EUR 10,000,000 as expected. This represents a 39% decrease in CapEx spend compared to the full year 2023.

Echoing earlier comments, we continue to expect limited CapEx because of significant investments made in the past to achieve our existing unique growth and global positioning with excess manufacturing capacity ripe for future growth. One of the other items we continue to book success with is the reduction of our inventory, which now lands a total million. That is a 23% reduction compared to the same period last year. We expect this optimization to continue as our business unit led organization manages the excess inventory down, which should in turn result in operating cash and improved margins. And Vik, I’ll turn it back to you to provide some closing commentary.

Henrique Ansencion, CEO, Wallbox: Thank you, Luis. I would like to end with what I started, which is to recognize 2024 was a challenging year for the

Michael Wilhelm, Investor Relations, Wallbox: EV

Henrique Ansencion, CEO, Wallbox: industry. However, challenging times are part of every industry and what is most important is managing these down cycles, especially

Michael Wilhelm, Investor Relations, Wallbox: in

Henrique Ansencion, CEO, Wallbox: a young industry that had experienced significant volatility. Being agile is crucial and Volvo has taken the opportunity to become a leaner and more efficient company that maintains a unique fit and strong propositions for the massive growth that lies ahead. 2025 will be another year of growth for the industry. We recognize that volatility in EV sales could persist as a transition of this magnitude takes time. However, at WorldVox, we are excited about what 2025 will bring.

We have made great progress in the past year and are starting to reap the benefits of these efforts with incremental improvements expected for the upcoming quarters. The goal of Wallbox is to generate profitable growth and we are getting closer and closer to these objectives. We believe that the platform we developed to generate shareholder value has all the elements in place including a diversified product portfolio, large geographical presence, key strategic partners, capacity in place and a great team. We have high ambitions in building out our leading position in the transition to sustainable mobility and we appreciate the continuous trust of our shareholders. We also aim to provide the market and our shareholders better insights in what lies ahead.

Therefore, we want to provide guidance on what we expect for the first quarter. Revenue in the million to million range, gross margin between 3739% and expecting a negative adjusted EBITDA between million and million negative. With that, we are ready to take questions from our analysts.

Michael Wilhelm, Investor Relations, Wallbox: Welcome back, everyone. To our analysts, we ask that you post one question with a follow-up if needed,

Henrique Ansencion, CEO, Wallbox: Of course.

Operator: Thank you. Our first question comes from Steven Gengaro of Stifel. Stephen, your line is open. Please go ahead.

Steven Gengaro, Analyst, Stifel: So I think two things. I think the first just at a high level, when we think about your mix going forward and I know you mentioned in the commentary some of the sort of regulatory changes

Michael Wilhelm, Investor Relations, Wallbox: or

Steven Gengaro, Analyst, Stifel: at least potential changes in The U. S. Market. How should we think about the mix of product? Do you think it evolves much because of maybe the lack of some of the heavy funding?

How do we think about how your mix might evolve particularly in The U. S. Market?

Henrik, CEO, Wallbox: Hi, Stephen. Good morning. This is Henrik. So

Michael Wilhelm, Investor Relations, Wallbox: in

Henrik, CEO, Wallbox: The U. S, we are seeing that the the mix should should be improving towards, fast charging. We have been launching the the Supernova UL, the middle of last year. And and we have also, included the certifications of the NTP and CTP, which will be announced and launched, soon. Also, at the end, this increase our addressable market for fast charging in The US, which, you know, it’s a it’s a it’s a it’s a it’s a vector of growth for fast charging for us.

Also, the fact that we launched the product in the middle of last year or in q two last year, most of the deals and most of the accounts that that we we we have take time to mature. You know? And and in average, we are seeing that a deal for fast charging takes around two hundred days to start seeing, this or or big interesting revenues. Now at the beginning, the CPO makes a small order, test the test the product. And then after that, after two hundred days, you start seeing volume of orders.

So these two together, should make the the mix, increases. And our goal in The US as as we look at is eventually to be 50% fast, 50% home and business. We are seeing also, positive note in terms of growth for home home charging in North America this quarter. Sellout is growing nicely and as well selling. So it doesn’t look that it’s very impacted by new policies or new sentiments, or or maybe this is accelerating the orders of some electric cars because people is worried that some incentives might might disappear.

No? So in the short term, we are seeing a growth for home charging, but also we expect a growth for fast given the fact that we launched new products in this residential market and the opportunities are maturing.

Steven Gengaro, Analyst, Stifel: Okay. Thank you. And then any other question, I know this is a hard work to pinpoint with all the moving pieces. But when we think about kind of where you might be in twelve months or eighteen months and just sort of the I’m thinking about the path to being kind of EBITDA and then ultimately free cash flow positive. Like where do you think you are kind of in that evolution?

And maybe what do you think the backdrop or even the top line would need to look like to get you there?

Henrik, CEO, Wallbox: So, basically what we’ve done so far the last year, even it was a challenging year for the EV market, is being able to exceed in most markets or maintain our sales compared to the EV market EV vehicle sales. So we’ve been maintaining our market share or increasing it in many countries. For example, a clear example of that is North America. The EV market grew around 20%, and we’ve grown 40% in this in this market. So that means increasing market share, having new customers, and we can see this with all these new brands, we are launching.

So when we look at our performance, that’s what we are committing for the following twelve months, you know, being able to keep our market share. And we see less competition. We see new partnerships coming. And at the end, it will depend a lot on how the EV market performs. We are seeing positive things.

For example, Europe, if the emissions continue the emissions of relations continue and it looks like it’s gonna be like that, there’s a 20% growth potential. In North America, industry sources say 20%. So we are gonna be very dependent on EV sales and that’s gonna that’s what’s gonna impact our our performance. When you look about the revenues, now what revenue makes us profitable or EBITDA breakeven? We have to be given all the efforts we are doing, you know, we changed from a functional organization to a business unit organization and we’ve been doing strong efforts in reducing OpEx and CapEx.

And you can see this, but we are not still seeing the full impact of all these improvements, and we will start seeing it now in this quarter. With revenues of around €40,000,000 to €45,000,000, the company should be able to to be at breakeven once we reach the the size we we we are targeting. And this target size, we are targeting to be at least in at the end of Q2. We should be in that target size, which it will be fully reflected in Q3. So that’s these are the numbers.

So there’s upside potential with the EV sales. If there’s more EV sales, we will sell more because we are able to capture this market. I think there’s opportunities to capture it even more because the platform we have, we have the products, we have the global footprint. And at the end, we are not very dependent on specific regions. If Europe now grows and U.

S. Maybe doesn’t grow as fast, we are able to capture this growth. And we’re disrupting the cost to the to be able to at least revenue levels, be profitable and generate a bit positive.

Steven Gengaro, Analyst, Stifel: Great. Now thank you for all the detail.

Operator: Our next question comes from William Griffin of UBS. William, your line is open. Please proceed.

William Griffin, Analyst, UBS: Great. Thank you very much. My first question, just wanted to touch on tariffs here. You folks appear pretty well positioned just given your manufacturing footprint. But could you talk about maybe some possible areas of import tariff exposure and sort of how you’re positioning the company as the import tariff environment in The U.

S. Is evolving here?

Henrik, CEO, Wallbox: Thank you, William. Good morning. This is Henrik. So as you’re saying, I think there’s two hedges or two protections we have as a company. One is, obviously, a big part of our revenue, comes from Europe, and we manufacture in Europe.

So here, we are less exposed to North American market. But, obviously, we’re growing a lot in the North American market. Market. Now we’ve seen a 40% growth. But in North American market, we have a factory, assembly facility in in Arlington, where we manufacture the charges.

We we the home charges and commercial charges, we sell in all North America and also some parts of South America. When I think about, risk, I don’t see a reason in terms of supply chain for this factory because we can manage and most of our supply chain, it’s localized. The bigger risk, I will say, is in the fast charging space where we still have a part of this fast charging is being manufactured in our Barcelona factory. And a big part of it, we ship it from Barcelona to Arlington. We are working on a plan in place in case that there will be a specific tariffs coming from Barcelona to The U.

S, trespass more of this manufacturing or more of this supply chain to North America. So we can do it. We have the space. We have the CapEx invested. The fact that we are doing most of this right now in Barcelona is from an operational efficiency.

There’s not enough volume to justify these two separate assembly lines, but our our factory in Arlingdon could do it. So if we see that’s necessary and, and at the end, it it makes financial sense, we can trespass more parts of this of this manufacturing in Arlington. And also, maybe if you think about China and importing goods from there, we’ve been working with our suppliers to make sure, you know, we we source from alternative suppliers or alternative factories they have around the world. So also, it has been it has been an ongoing effort since, I would say, one year ago at least. And we are well set, where almost of all of the materials come, have multiple sources.

I will pass it to Luis. One moment.

Michael Wilhelm, Investor Relations, Wallbox: Yeah. I was only going to add to that, William, that going back to Henrik’s prior point. Fast Charge is a relatively nonmaterial part of the business in The U. S. Where we see upside and also linking to other comments that we’ve been sharing with you, that business unit has a good margin.

So when you put all those things together, we see this as an incremental that we need to address, but we can manage accordingly.

William Griffin, Analyst, UBS: Very helpful. And my follow-up here is just on the $10,000,000 capital raise you announced a couple of days ago. Could you just elaborate on sort of how much funding runway or visibility that gives you? And do you need or see the need potentially for additional capital to reach more of a self funding level here?

Henrik, CEO, Wallbox: Thank you, William. This is Andre Gagarin and maybe I will pass it after that to Luis also to comment. Well, first of all, we are very proud that we can access capital markets and we have the support from our, strategic and long standing shareholders, which, you know, many of them are not only investors, they are also key customers like Iberdrola. I know Iberdrola is one of the biggest utilities in the world and also one of our biggest customers worldwide. And, you know, having them keep supporting the company and investing, I think, is a is a proof point of the products, the technology, and and all the the things all the value we create to to to our customers.

There’s many things we we with many levers we have in terms of cash, obviously, is the current cash at hand and the fundraising we’ve done. And at the end, what we are doing is make the company that operationally can, as soon as possible, be cash flow positive. How we are doing that? We have the inventory release, you know, so we still have a lot of inventories, EUR 70,000,000. We’ve been able last year to reduce it significantly, which at the end has released a lot of cash available every month and every quarter.

So this is an important part of how we are managing cash, also working capital. We have been optimizing and we’ll continue to invest in all our working capital and working with customers to have every payment and with suppliers to manage all of this. So all in all, what we are trying is to make sure we we don’t need more capital or at least the minimum capital and minimize dilution. If needed, and you know what? The end, that depends a lot on the top line.

The core production efforts are being made. The we are working on the gross margin. I think we’re doing an excellent job on the working capital as well, and you can see that when you view that. And also with another thing that we haven’t seen a big impact last year or we’re seeing now is all these, renegotiation with banks where we are not paying, the principal. We’re paying all the interest only for eighteen months, which at the end is what makes sense in a company that still is not generating cash and we hope to do that soon.

So with all these actions, we are working and we’re trying to make sure we don’t need to raise additional cash. And it will be very dependent on the top line. And if needed, I think the company has proven that has access to capital markets, but we’re trying to manage it with the current cash.

William Griffin, Analyst, UBS: All right. Thanks for the time. Talk to you guys soon.

Michael Wilhelm, Investor Relations, Wallbox: Okay. That’s our last question. And thank you all for joining us today. We hope you found today’s call a good use of your time. And let us know if we can help you in any way.

Operator: Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines.

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