KULR Technology Group (KULR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $2.43 million, down 10% year-over-year but up 39% sequentially, with contract/engineering service revenue up 76% year-over-year to $1.3 million, a record high.

• Total paying customers increased up to 53% year-over-year to 27, with service revenue customers up 86% and product revenue customers up 25%.

• Gross margin declined to 24% in Q2 2024 from 37% in Q2 2023, with net loss narrowing to $5.89 million.

• Significant investments in the Battery Center of Excellence and a new 17,500 sq ft facility in Webster, Texas, enhancing battery design, testing, and production capabilities.

• Major contracts secured with NASA, Bombardier Recreational Products, and a top Japanese automaker for battery cell testing.

Financial highlights

• Cash plus accounts receivable increased 40% and liabilities decreased 42% from end of 2023 to June 2024.

• Operating expenses decreased 17% year-over-year in Q2, with R&D down 32% and SG&A down 11%.

• Cash used from operating and investing activities fell 13% year-over-year for Q2.

• Net cash used in operations for the six months was $9.2 million; net cash provided by financing activities was $9.18 million.

• Gross profit dropped 43% to $573K in Q2 2024.

Outlook and guidance

• Management expects to resume year-over-year revenue growth in the second half of 2024, driven by new customer wins and expanded service offerings.

• Testing service capacity at the Texas facility is estimated at $2 million per quarter upon completion by end of Q3 2024.

• Testing services projected to become an $8–$10 million annual revenue business starting in 2025.

• Several expected product orders were delayed to the second half of 2024, with no assurance on timing.

• The first commercial KULR ONE Space battery (200 Wh) will be available in fall 2024.