Pyrogenesis Canada (PYR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached just over CAD 4 million (USD 4 million), marking a 9% year-over-year increase and the third consecutive quarter of year-over-year growth, with a record backlog of CAD 54.9 million as of November 6, 2024.

• Gross margin improved to 42%, up 13 points sequentially and 12 points year-over-year, reflecting operational efficiency and cost-cutting, with net loss reduced to CAD 3.9 million, a 38% improvement from Q3 2023.

• Cost-cutting initiatives delivered over CAD 3 million in recurring annual savings, with SG&A expenses down CAD 2.6 million year-over-year in Q3.

• The company continues to diversify across three verticals: energy transition and emission reduction, commodity security and optimization, and waste remediation.

• The company changed its name to PyroGenesis Inc. and relocated headquarters to a larger office in downtown Montreal.

Financial highlights

• Revenue for Q3 2024 was CAD 4 million, up from CAD 3.9 million in Q2 and CAD 3.5 million in Q1; nine-month revenue was CAD 11.4 million, up CAD 2.1 million year-over-year.

• Gross profit was CAD 1.7 million (42% margin), compared to CAD 1.1 million (30%) in Q3 2023.

• SG&A expenses decreased to CAD 5 million from CAD 7.6 million in Q3 2023, mainly due to lower credit loss and reduced professional fees.

• Comprehensive loss was CAD 3.9 million, a 38% year-over-year reduction; nine-month comprehensive loss was CAD 6.9 million, down from CAD 18.7 million in 2023.

• Cash at September 30, 2024, was CAD 0.04 million, with a net working capital deficiency of CAD 10.4 million.

Outlook and guidance

• Management expects continued revenue growth and margin improvement, supported by a record backlog and ongoing cost efficiencies.

• No specific revenue or net income guidance for 2024 due to early-stage market adoption.

• Backlog is expected to convert into future revenues over subsequent quarters, with a significant portion in energy transition and emission reduction.

• Strategy focuses on leveraging plasma technology for heavy industry decarbonization, commodity security, and waste remediation.

• Company expects recurring revenue to increase as more plasma systems are sold and as energy transition trends accelerate.