Microvast Q2 Earnings Call Highlights

Microvast reported second-quarter revenue of $87.3 million, down 4.5% from the same period in 2025, as a tariff refund to a customer and lower U.S. sales weighed on results. The battery manufacturer also cited higher raw-material costs and lower production utilization as pressures on profitability. Chief Financial Officer Rodney Worthen said the quarterly revenue decline of $4.1 million was primarily driven by a $2.7 million tariff refund issued to a customer, which was recorded as a reduction in current-period revenue. Gross profit totaled $25.8 million, producing a gross margin of 29.5%, compared with 34.7% in the prior-year quarter. Worthen said margin declined mainly because of higher raw-material prices and lower production utilization, which reduced fixed-cost absorption. The effects were slightly offset by recognition of tariff refunds. Microvast recorded a GAAP net loss of $12 million in the second quarter. Its adjusted net loss was $5.3 million, compared with adjusted net profit of $16.3 million a year earlier. Non-GAAP adjusted EBITDA was $3.6 million, down from $25.9 million in the second quarter of 2025. Operating expenses increased 16.1% year over year to $27.5 million. General and administrative expense rose by $2.7 million, or 24.2%, largely due to a $2.6 million increase in legal and other professional-service fees. Research and development expense increased $1.1 million, or 14.8%, as the company expanded investment in new product development and incurred higher labor costs. Selling and marketing expense rose $1.3 million, or 38.5%, mainly due to higher service fees tied to customer-retention initiatives, partly offset by lower personnel costs. For the first six months of 2026, revenue fell by $60 million, or 28.8%, from the prior-year period. The company attributed the decline primarily to a 24.3% reduction in sales volumes, which fell to about 717 megawatt-hours from roughly 947 megawatt-hours a year earlier, as well as the $2.7 million tariff refund. First-half gross margin was 30.4%, compared with 36% in the first half of 2025. Operating expenses increased 3.3% to $54.6 million. Microvast reported GAAP net income of $36.2 million for the six-month period, while adjusted net loss was $19.9 million, compared with adjusted net profit of $35.6 million a year earlier. Non-GAAP adjusted EBITDA was negative $1.9 million, versus positive $54.4 million in the prior-year period. By region, European sales rose 35% in the second quarter and accounted for 61% of revenue, up fro...