NextNRG (NASDAQ:NXXT) held its fourth-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Summary
NextEnergy Inc. reported a 195% revenue growth from $27.8 million in 2024 to $81.8 million in 2025, primarily driven by its mobile fueling business and strategic acquisitions.
The company improved its gross margin from 8.4% in 2024 to 10.4% by Q4 2025, indicating enhanced operational efficiency.
The company closed its first power purchase agreements for microgrid projects, highlighting a pipeline worth approximately $750 million, which promises long-term revenue streams.
NextEnergy Inc. recorded a GAAP net loss of $88.2 million for 2025, largely due to non-cash items like stock-based compensation and amortization, while adjusted EBITDA loss was $17.1 million.
Management emphasized the focus on reducing reliance on high-cost short-term debt and increasing operating cash flow through strategic growth in both fueling and energy infrastructure segments.
Full Transcript
OPERATOR
Good morning and welcome to the NextEnergy Energy Inc. Fourth quarter and full year 2025 earnings call. All participants are in a listen only mode. Following management’s prepared remarks, we will move to a pre submitted Q and A. This call is being recorded. Before we begin, I will turn it over to Sharon Cohen for the required forward looking statements disclosure. Sharon, please go ahead.
Sharon Cohen
Thank you. I’d like to begin by reminding everyone that today’s discussion will include forward looking statements within the meaning of the Private Securities Litigation Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that could cause actual results to differ materially. Please refer to our most recent SEC filings for a full discussion of relevant risk factors. Today’s call will also reference adjusted ebitda, a non GAAP (Generally Accepted Accounting Principles) financial measure, a full reconciliation of this measure to net loss. The most comparable GAAP (Generally Accepted Accounting Principles) measure is available in our earnings release located in the Investor tab of our website. Non GAAP (Generally Accepted Accounting Principles) financial measures should not be considered a substitute for GAAP (Generally Accepted Accounting Principles) results. On the call today is Michael DeFarkas, founder and chief Executive Officer as well as Joel Kleiner, Chief Financial Officer. Michael, the floor is yours.
Michael DeFarkas (Founder and Chief Executive Officer)
Thank you Sharon and good morning everyone. I want to begin with some numbers that will frame everything you’re about to hear. In 2024 NextEnergy generated $27.8 million in revenue, while in 2025 we generated $81.8 million. I want to repeat that 27.8 million to 81.8 million. That is about 195% growth in one single year. Our on site mobile fueling business was the driver of this growth. Following the completed merger of NextEnergy and Easy Fill, we integrated two acquisitions, Shelf Tap Up Assets and Yoshi. These acquisitions allowed us to enter into four new major markets, Phoenix, Austin, San Antonio and Houston, ending the year operating coast to coast and results reflected that. We posted seven consecutive months of record revenue and by May, our year to date revenue had already surpassed all of 2024. Most critically, our margins improved as we scaled. Our full year gross margin in fueling was 8.4%. By Q4 it had climbed to 10.4%. That is the direction we’re moving towards as we continue to optimize our operations, implement smarter customer acquisition, greater route density, increase of fuel mix deliveries and less wasted time in that curve. We are still early. I want to call out our fourth quarter specifically because it tells you where this business is headed. Q4 revenue was approximately $23 million. October 7.4 million November 7.5 December, $8 million December alone represented 253% year over year growth in revenue and 308% growth in fuel volumes. And that is the momentum we’re carrying into 2026. I also want to take a moment to highlight something specific because I believe it speaks to the quality of what we are building right now. Our largest commercial fleet customer, the largest global online retailer, is actively cutting other fuel vendors in certain markets and replacing them with us, NextEnergy. That does not happen by accident. That happens when service is cleaner, more reliable and more integrated than the alternatives. This is precisely what we designed our products and services to do. And it means that the opportunity with this one customer alone has not even reached its full potential. I want to talk about our energy infrastructure segment because this is where the Next chapter of NextEnergy is being written. We closed our first power purchase agreements, Sunnyside and Topanga Terrace Rehabilitation and Subacute Care Centers, both in California. Under these agreements, Next Energy will design and build fully integrated on site smart microgrids combining rooftop solar battery storage, gas generators and our patented AI driven controller. These are long term structured agreements with annual escalators built in. This is not equipment sales, but is contracted energy relationships that generate annuitized revenues over the long term, some as many as three decades. We believe finalizing these agreements validates the model. The market exists, customers are ready to commit and NextEnergy is ready to execute. Our pipeline of planned smart microgrid projects stands at approximately $750 million, spanning municipal, tribal, health care, multifamily and commercial facilities, all in various stages of development. We are now converting that pipeline into executed contracts. Before I turn it over, I want to explain something about how this part of the business operates because I think context matters when you’re looking at our numbers. We are deploying multimillion dollar energy infrastructure projects to large operational entities which require engineering studies, permitting utility interconnection approvals, project financing and organizational decision making that can span years. The contracts we are closing today are the result of development work that started 18 to 24 months ago. Therefore, when you look at the business, you should be looking at what we’ve already closed, what’s in the pipeline and how that builds from here. Because each contract represents millions of dollars in revenue and a proven track record accelerates the pipeline behind it. The fuel business funds the operation today. The energy business is where the exponential growth will come from. That is the architecture of this company. And 2025 was the year we demonstrated that both sides of the business can work. I will now turn it over to Joel to break down what is behind the numbers. Joel, thank you.
Joel Kleiner (Chief Financial Officer)
Michael Good morning. I want to walk through 2025 financials plainly because there is an important story inside these numbers that does not surface in the headline loss figure. Revenue for the full year came in at $81.8 million compared to $27.8 million in 2024, an increase of $54.1 million or 195% year over year. Cost of sales was 74.9 million, up from 26 million, rising proportionally with expanded volume and geographic footprint. Gross profit reached $6.9 million versus $1.8 million in 2024, nearly four times higher than year over year. Revenue scaled, gross margin improved and gross profit grew. That is the business working Gross margin expanded quarter over quarter throughout fiscal 2025, demonstrating the company’s ability to drive operational efficiency while continuing to grow its revenue base. Our GAAP net loss for 2025 was $88.2 million. I want to walk through the major components because the bulk of that figure is not cash out of the door and it’s important that you understand the distinction. The largest driver is stock based compensation which is totaled at $42.6 million. This is entirely non cash. This figure represents the equity cost of attracting and retaining the talent to execute a merger, integrate two fleet acquisitions, enter in four new states and close the company’s first energy infrastructure contracts all in a single year. It is all the primary reason for adjusted EBITDA that our adjusted EBITDA tells a fundamental different story than our net loss interest expense is $17.3 million. This includes $9.6 million in non cash amortization of debt discount, a GAAP accounting charge that does not represent current cash paid. The remainder reflects interest on our outstanding borrowings used to fund the company’s growth and working capital. We are committed to reducing our reliance on high cost short term debt as operating cash flow continues to scale. We also recorded an $8.5 million impairment charge. This is a one time non recurring non cash accounting adjustment related to assets recorded in connections with our merger and as part of the year end process. Those assets are evaluated under GAAP and we recorded a write down based on that assessment. This does not reflect any deterioration in relationships, contracts or operating assets. It impacts the reported net loss but has no effect on cash or how the business operates going forward. When you strip out these items, the non cash stock compensation interest inclusive of debt discount, amortization, depreciation amortization and the one time impairment you get to. Adjusted EBITDA loss of 17.1 million for 2025 compared to 8.9 million in 2024. Net cash used in operating activities was $16.7 million in 2025. We continue to fund the company’s growth through operating cash flow and equity capital market activity in debt facilities. Our February 2025 equity raise of $50 million provide critical working capital that supported the execution you see in these results. We are a growth company in a capital intensive industry and we continue to invest into expanding our energy infrastructure pipeline. Fuel business provides operational momentum. The energy business provides long term upside. They represent a company that generated $81.8 million in revenue and $6.9 million in gross profit in its first full year as a combined entity. I will turn it back to Michael for closing remarks.
Michael DeFarkas (Founder and Chief Executive Officer)
Thank you, Joel. I want to close with this. The energy market in the United States is fragmented, inefficient and expensive. Businesses that consume enormous amounts of energy. Commercial fleets, logistics operators, hospitals, distribution centers are managing that energy the same way they have for over 20 years. Working across multiple vendors with very little integration, visibility or control. We built a platform that changes that. On demand fueling with real time dispatch optimization on site micro grids that eliminate fragmented utility dependence and replace it with intelligent integrated infrastructure. A unified operating system that lets a business see, manage and optimize all of its energy needs in one place. Through our proprietary Next Energy dashboard. The fuel side of the platform works. We established that in 2025. The energy side is just now starting to convert pipeline into contracts and those contracts are long term high value and destined to compound. The progression is already starting to show up in the numbers and in what we have executed so far. $27.8 million to $81.8 million in revenues in one year. Gross profit nearly quadrupled seven consecutive months of record revenue. Our first energy infrastructure contracts signed and a pipeline at over $750 million. This is the year we just had. We are more focused on the next one. Thank you for all being here. I’ll now hand it back to Sharon to take us through the Q and A.
Sharon Cohen
Thank you Michael. We’ll now move to questions that were submitted in advance. The first question is for Joel. You recorded 42.6 million in stock based compensation in 2025. Who received that compensation? What was it tied to? And how should investors think about dilution going forward?
Joel Kleiner (Chief Financial Officer)
Well, 2025 was not a normal year for this company. We did a merger and brought two fleets, built an executive team, an advisory board and launched an energy infrastructure business. I remind you all in the same year. The equity issue was tied to that build out. A lot of that work was compensated in equity and that’s what’s reflected in that figure. It’s not something you should expect to see at this level going forward. As things stabilize, those numbers come down. And Yes, we’re very aware of what dilution means to our shareholders and that’s always a part of the conversation and the decisions we make.
Sharon Cohen
Okay, thank you, Joel. Here’s another one for you. Cash at year end was 384,000 and the working capital deficit since approximately 25 million. The company has been relying on high interest instruments to fund operations. How does NextEnergy get through this next year 2026 and what does the financing plan look like?
Joel Kleiner (Chief Financial Officer)
Look, the cash position at the end, a year end, does not tell the whole story of where we are liquidity wise. Our cash position reflects the timing of debt facilities and operating cash flows, working capital and it doesn’t give the full picture of available liquidity. We have active debt facilities in place and we continue to have access to capital markets. And as we have demonstrated, like in our February 2025 equity raise, as the infrastructure contracts close and move towards construction, they bring project level financing structures that are standard in the industry and don’t rely solely on corporate balance sheet funding. We are not managing this business with just $384,000. We’re managing it on a combination of operational cash flow, debt facilities and the capital markets access we’ve consistently demonstrated. The goal for 2026 is to reduce our dependence on high cost short term debt by growing operating cash flow, increasing working capital and closing contracts that carry their own financing. That’s the plan and we’re going to execute against it.
Sharon Cohen
Thank you, Joel. Michael, the following questions I will direct to you. The energy infrastructure business is described as a long term growth engine of the company. When those contracts do start generating revenue, what does the margin profile actually look like and how does it compare to the fueling business?
Michael DeFarkas (Founder and Chief Executive Officer)
It is a completely different margin profile. The fueling business operates on fuel margins. We buy fuel, we deliver it and we earn the spread plus the service fee. Those margins are in the high single digits to low double digits and they improve as we optimize routes and density. The energy infrastructure business operates on a contracted rate over a multi decade agreement. Once those assets are deployed and operating, the ongoing cost structure is largely fixed. You have maintenance, monitoring and debt service related to project financing and the Revenue is locked in by contract with annual escalators. We expect the margin profile on a stabilized microgrid to be significantly higher than what we generate in fueling. The fueling business is a strong scalable cash generator. The energy business is a different kind of asset completely. And when those contracts start producing revenue, we believe it has the potential to meaningfully change the financial profile of this company.
Sharon Cohen
Thanks, Michael. Here’s the next question. Given the current cash position and working capital deficit, what does the path to cash flow break even look like? And what are the two or three things that need to happen operationally to get there?
Michael DeFarkas (Founder and Chief Executive Officer)
There are three things. First, the fueling business needs to continue scaling its gross profit. And it is. We went from 1.8 million in gross profit in 2024 to 6.9 million in 2025. And Q4 margins tell us there is more improvement ahead. Second, we need to close and monetize energy infrastructure contracts. Each one that closes and moves towards construction is expected to represent significant revenue. Significantly improve our cash position. And third, we need to right size our operating expenses relative to where the business actually is today, not where we are building to. We’ve been spending ahead of this revenue on the energy side, and that’s just the nature of how the business works. But as those contracts start closing and revenue comes in, that ratio flips. That’s what we’re focused on.
Sharon Cohen
Great. For our final question. As the fueling business matures and energy contracts begin to close, how is management thinking about capital allocation? Where does investment get prioritized? And what guardrails exist to prevent a company from overextending on either side of the business?
Michael DeFarkas (Founder and Chief Executive Officer)
Great question. The fueling business funds itself at this point. It generates positive operating cash flow and the capital requirements are largely tied to fleet expansion, which we can pace based upon demand. So the capital allocation question is really about the energy side. And there the discipline is built into the structure of how we develop projects. The capital to build each project comes with the project through project financing, not from corporate balance sheets. What we invest corporately is in the development and sales process, engineering work, permitting, customer relationships. And that’s a deliberate contained investment. It’s not open ended. The more projects we close, the cheaper and faster the next one gets. The guardrail is the model itself.
Sharon Cohen
Okay, thank you. That concludes our Q and A. Michael, any final words from you?
Michael DeFarkas (Founder and Chief Executive Officer)
Nope. Just want to say thank you. We are heads down and focused on execution and we’re looking forward to seeing you next quarter. Ladies and gentlemen, thank you so much.
OPERATOR
That does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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