Here are my thoughts on the Electrovaya ELVA earnings for calendar Q4 2025, fiscal Q1 2026,
Electrovaya gives full year revenue targets but not quarterly guidance so we used analyst estimates to understand market expectations. Analysts were looking for 16.7M of revenue and this came in at 15.6M +39% yoy, which was below analyst expectations and my expectations.
One important aspect to note for these revenue numbers is that calendar Q4 for Electrovaya sees significant seasonality. Looking into this topic, the reasoning is that blue chip companies like Walmart or Toyota do not make as many purchases during the holiday season. The prior calendar Q3 quarter had 20.5M of revenue with Q2 and Q3 being the stronger quarters for Electrovaya typically.
On profitability metrics, analysts were looking for 2.5M of adj EBITDA which landed at 2M. For GAAP EPS analysts expected 0.1 and this number came in at 0.2 in the quarter. Gross margin in the quarter was 33% which is the highest the company has achieved over the past year.
The company reaffirmed their revenue guidance of at least 30% growth for fiscal 2026. Considering this quarter’s revenue number came in lower than I was expecting, this re-affirming seems reasonable. Management mentions this number includes no revenue from airport ground transport which could bring upside. Additionally, they have mentioned previously that guidance factors in potential project delays.
Some highlights from the management commentary on the call include,
- Margins improved materially, maintaining profitability
- Historical seasonality in core material handling vertical
- New OEM integrated high voltage battery systems developed over past two years begin commercial delivery in March 2026
- Working with existing global defense contractor for a new vehicle platform, expanding to two distinct applications with this customer
- Initiated commercial deliveries of latest 48-volt battery systems to a robotic company in January
- Testing airport ground systems across multiple locations and climates with major airline (management did mention this process at this large airline is taking longer than initially anticipated)
- Established a Japanese subsidiary during the quarter
- Ultrafast charging power cell development is advancing well, working on next generation ceramic separator technology as well
- Launching new products for Class II material handling vehicles as well as demoing software and analytics solution in April at conference
- Jamestown expansion progressing with upgrades and initial drive room equipment for cell manufacturing has been delivered
- Drawing from EXIM loan for build out of Jamestown facility
- Jamestown to begin battery systems production fiscal Q4, battery cells fiscal Q1 2027 (This timeline is a little longer than I originally understood)
- 45X tax credits from Jamestown will improve margins
- Operating profit 1.4M vs -0.2M last year
- Net income 1M vs -0.4M last year
- Adj EBITDA 2M vs 0.5M last year
- Positive cash flow from operations of 1.7M
- Upgrading to US domestic filer status under SEC rules from dual listing (management mentions this allows the company to be included in indices and broadens investor base potential + liquidity)
- Material handling sector, two largest buyers from the company have given “very good indications of their demand” over the fiscal year
- Two new products in the energy storage space, one more standardized product, other is government backed
- Robotics sales ramping in current quarter (fiscal Q2)
- Addressable market within existing customers is massive, “early days”, “early innings”
- Can pass on increasing lithium prices if needed but haven’t raised product prices so far
Overall, this revenue number from the report was objectively lower than I expected while factoring in the seasonality. For this reason I trimmed my position by about half to around 6% for ELVA.
However, I’m still optimistic about the prospects for this business and I do believe the company has the potential upside I look for to be able to 3-4x over the next couple of years. Here are some reasons I continue to hold a medium sized position,
- Industry comps versus next generation batteries makers have Electrovaya attractively valued. Companies such as Amprius AMPX, Enovix ENVX, and SES AI Corporation SES are valued significantly more despite being much further away from profitability
- The profitability metrics for Electrovaya are improving significantly versus last year showing some of the efficiencies the company has gained
- The upgrading of filing status to US domestic should bring in a new class of institutional investors
- Their new facility in Jamestown will reach up to 3x the capacity of their current Toronto based operations
- There is still low market penetration for their main segment of material handling and companies like Walmart have seen the cycle data to gain more confidence in Electrovaya’s batteries
- Competitive barriers are massive for this industry as it presents a challenging CapEx barrier to entry. Companies such as T1 Energy which used to be in the battery business dropped off saying that making poly-silicon solar panels is “childs-play” compared to producing batteries