Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Thursday, November 13, 2025 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Nathan J. Mazurek
  • Chief Financial Officer — Walter Michalec
  • President, Distributed Power Solutions — Geo Murickan

Need a quote from a Motley Fool analyst? Email [email protected]

RISKS

  • Gross Margin Decline — Third quarter gross margin decreased to 9% from 20% due to an unfavorable sales mix, specifically poor margins on the final five eBoost units delivered for a large school district project.
  • Increased Operating Loss — Operating loss from continuing operations rose to $1.4 million compared to $714,000 in the year-ago quarter, with net loss increasing to $1.8 million from $738,000.
  • Reduced Cash Balance — Cash on hand declined to $17.3 million from $41.6 million at prior year-end, primarily driven by a $16.7 million special dividend and $4 million in income tax payments.

TAKEAWAYS

  • Revenue -- $6.9 million in the third quarter, an increase of 7.4% year over year, driven by higher service sales in the Critical Power Solutions business.
  • Year-to-Date Revenue -- $22 million for the first nine months, up 68%, primarily due to demand for eBoost mobile charging solutions.
  • Gross Profit -- $640,000 in the third quarter, with a gross margin of 9% versus 20% in the prior year, resulting from an unfavorable sales mix.
  • Non-GAAP Operating Loss -- $196,000 loss in the third quarter, compared to $865,000 income in the prior-year period, excluding overhead, R&D, D&A, and nonrecurring professional fees.
  • Net Loss from Continuing Operations -- $1.8 million in the third quarter versus $738,000 in the same period a year earlier.
  • Cash Position -- $17.3 million as of September 30, 2025, representing $1.56 per share and zero bank debt.
  • Working Capital -- $22.8 million at quarter-end, down from $26.7 million at prior year-end.
  • Completed Landmark eBoost Project -- Delivery of the final five eBoost units completed a 25-unit, $1.3 million school district fleet electrification project, one of the largest of its type nationally.
  • New Orders and Pipeline -- Secured a $725,000 order from the city of Long Beach for a 250-kilowatt eBoost unit and a $1.6 million follow-on order from SparkCharge for four 275-kilowatt eBoost pure energy units; both scheduled for delivery by year-end.
  • Expansion in Distributed Power -- Over $700,000 in distributed power deliveries and $750,000 in new orders, including a major fitness chain's peak shaving deployment.
  • Product Launch Pipeline -- 1.25-megawatt modular natural gas power platform set for launch by year-end 2025, targeting large data centers, industrials, universities, and hospitals.
  • PowerCore Rebranding -- HomeBoost product rebranded as PowerCore, with launch events on December 15 and 17; positioned as a scalable natural gas power and EV charging solution for residential and light commercial markets.
  • Guidance Reaffirmed -- Revenue guidance of $27 million to $29 million for full year 2025, targeting approximately 20% year-over-year growth.
  • International Channel Expansion -- Pursuing international EV growth via eBoost franchise partnerships generating licensing, technology transfer, and revenue-sharing streams.
  • Management Commentary on Margin Outlook -- CEO Mazurek said, "Fourth quarter, the mix is much more favorable to us. And and we expect them to bounce back."

SUMMARY

Pioneer Power Solutions (PPSI 6.91%) reported moderate revenue growth and significant new product traction but experienced notable margin erosion and wider operating losses attributed to weaker sales mix in the third quarter. Management highlighted strong eBoost deliveries to both municipal and commercial customers, continued penetration of distributed power applications, and provided a pipeline update including the upcoming PowerCore launch and a modular data center power platform release. Significant decreases in cash and working capital were directly linked to a special dividend and tax payments. International expansion is underway through franchise arrangements targeting high-growth EV adoption markets.

  • Management attributed the quarterly margin pressure to the final deliveries on the major school bus fleet electrification project, with CEO Mazurek stating, "The last five units for the for the large school district that we did were were not good. Not good for us even below what we'd experienced earlier in the year for whatever those reasons were. And it's not important to discuss openly here. But that that hurt."
  • Ongoing rental deployments for a major online retailer are transitioning to anticipated permanent unit sales in 2026, with management suggesting a move from "probably five to 20 units next year from a for a purchase."
  • The new modular natural gas power system is designed for quick deployment in high-growth verticals demanding reliable on-premise power, including data centers with advanced AI and edge compute needs.
  • PowerCore is positioned as a platform extending Pioneer Power Solutions' reach into light commercial markets requiring scalable, resilient on-site generation and EV charging.

INDUSTRY GLOSSARY

  • eBoost: Pioneer Power Solutions' branded mobile electric vehicle charging solution, available in various configurations including high-capacity off-grid and grid-tied units.
  • PowerCore: Rebranded residential and light commercial power generation and EV charging system, integrating natural gas/propane generation with fast DC charging and backup functionality.
  • Distributed Power: Modular or mobile energy systems enabling generation and management of electricity onsite, independent of centralized utility grids.
  • Peak Shaving: Strategy for reducing electricity usage during periods of maximum demand, often via onsite power or energy storage solutions.

Full Conference Call Transcript

Nathan J. Mazurek: Thank you, Corbin. Good afternoon, everyone, and thank you for joining us today. The third quarter was a highly successful period for Pioneer Power Solutions, Inc., highlighted by key equipment deliveries, strong order momentum, and significant penetration into the distributed power space. These achievements, combined with a robust project pipeline and Pioneer's continuing investment in product development, position us to realize our full year 2025 growth objectives and position us for accelerated growth in 2026. For the third quarter, we generated revenue of $6.9 million, an increase of 7.4% year over year, driven primarily by an increase in service sales from our critical power business.

Year to date, revenue reached $22 million, up 68% compared to the same nine-month period last year, driven primarily by demand for our eBoost mobile charging solutions. These results reflect our ongoing success in expanding our product scope, broadening our customer base, and capitalizing on large new vertical markets. Specifically, in the third quarter, we completed delivery of the last five eBoost units of a 25-unit order for a landmark school district project totaling $1.3 million. This project represents one of the largest school bus fleet electrification initiatives in the country and underscores our ability to deliver turnkey mobile charging solutions for heavy-duty, high-utilization electric vehicles.

This milestone strengthens our position as a leader in fleet electrification and highlights the growing demand for mobile, high-capacity energy solutions in the public sector. In the broader fleet electrification market, we delivered our eBoost Mobile OpenFlex unit to the city of Portland. This 175-kilowatt multifunctional unit features a level three fast charger, multiple level two chargers, and a grid-tie transfer switch. Pioneer Power Solutions, Inc.'s ability to design and implement the power-dense, flexible mobile power system further solidifies our reputation as a trusted vendor of complex, resilient, distributed power.

Also in Q3, we received a $725,000 order from the city of Long Beach, California, for an eBoost mobile stretch unit, a specialized 250-kilowatt off-grid EV charging system, which is scheduled to ship before year-end. Securing this project also highlights Pioneer Power Solutions, Inc.'s ability to craft custom, complicated, and value-driven power charging solutions. The last mile delivery market continues to represent strong demand for eBoost equipment. Following a successful pilot during the peak holiday shopping season last year, one of the world's largest online retailers placed a follow-up order for new eBoost units, which were delivered in the third quarter and indeed confirms the success of the initial pilot last year.

Based on current discussions with this retailer, we expect additional eBoost units to be deployed at many depots and distribution centers in 2026. Also, shortly after quarter-end, our strategic partner, SparkCharge, placed an additional order for four new eBoost pure energy 275-kilowatt units, valued at $1.6 million, as part of a multiyear purchase plan reinforcing eBoost's critical role in supporting rideshare and autonomous vehicle electrification. These units are also expected to be delivered by year-end. More importantly, Q3 marks the actualization of Pioneer Power Solutions, Inc.'s two most impactful growth initiatives. First, our natural expansion into the distributed power market and second, the technical completion of our residential power/charging unit originally known as HomeBoost, now rebranded as PowerCore.

Pioneer's expansion into the distributed power market was validated in Q3 with over $700,000 in product deliveries and an additional $750,000 in new purchase orders. The expertise gained in designing and integrating complex mobile power solutions with the original launch and evolution of the eBoost platform enabled us to smoothly transition to a pure custom distributed power suite of solutions. Indeed, Q3 deliveries of our distributed power solutions cut across a swath of verticals, including a large shopping center, a large condominium tower, and a solid waste processing facility. The new $750,000 distributed power order we received is from one of the largest fitness chains in the United States for a peak shaving application at its flagship facility.

Together, these wins underscore the increasing demand across various sectors for fast deployable flexible power solutions. Building on this early success, we are expanding our focus to serve the broader distributed power market and are excited to introduce a pre-engineered scalable power block system designed to meet the increasing energy requirements of large data centers, industrials, universities, and hospitals. Our 1.25-megawatt natural gas-fired, resilient, and modular power solution is engineered to provide reliable, redundant, efficient power for critical needs and the new surge in demand for on-premise compute power needs. We anticipate launching this innovative system by the end of 2025, exponentially expanding our ability to address the overall distributed power space.

Secondly, within the broadened product portfolio, our HomeBoost power unit product is being rebranded as PowerCore and is on track to launch later this year on December 15 and December 17 at a scheduled event hosted by Pioneer Power Solutions, Inc. at our Miami, Florida facility. We initially introduced HomeBoost as a residential product that seamlessly integrates distributed generation with EV charging. In its original form, HomeBoost offered homeowners the ability to combine prime power generation, natural gas or propane, with advanced fast EV charging and an automatic transfer switch to manage utility outages or go into island mode during extended grid outages.

With the transition to the PowerCore branding, the solution is positioned as a scalable, always-on power platform that integrates natural gas power generation and, at the user's discretion, combines fast DC charging into a single system architecture. This elevated design is not just aimed at the residential segment, but indeed also at light commercial and other resilience-demanding markets, where continuous reliable on-site power and EV charging are critical but not easily available. This offering essentially provides the user with their own natural gas-powered power plant. We continue to receive positive feedback from early customer demonstrations, and we believe that PowerCore will be a key growth driver for Pioneer Power Solutions, Inc. in 2026 and beyond.

PowerCore materially expands Pioneer Power Solutions, Inc.'s addressable market, moving us beyond large fleets and municipal deployments to permanent high-value installations that demand both power generation and/or high-capacity EV charging. This product represents the next chapter in our evolution toward providing fully resilient distributed power solutions. Finally, there are several countries around the world that are currently experiencing a high EV growth market supported by policies and incentives similar to US policies back in 2021. Pioneer Power Solutions, Inc. is actively engaging with several charging businesses in these thriving international EV markets through an eBoost franchise-type model where we are able to leverage our existing engineering and development expertise to help local partners achieve similar success.

These strategic alliances will enable faster adoption of EVs in those markets and provide Pioneer Power Solutions, Inc. an additional stream of revenue from licensing, technology transfer, and revenue share models. In summary, the third quarter reflects both continued operational execution and important strategic progress. We are expanding our reach, diversifying our revenue mix, and strengthening our foundation for long-term growth. Based on the momentum we have built and our visibility into the pipeline, we are reaffirming our full year 2025 revenue guidance of $27 million to $29 million, representing approximately 20% year-over-year growth. With that, I'll turn the call over to Walter for a detailed review of our financial results.

Walter Michalec: Thank you, Nathan, and good afternoon, everyone. Please be advised that we have included a non-GAAP financial measure of operating income or loss from continuing operations. This excludes corporate overhead expenses, research and development costs, depreciation and amortization expense, and nonrecurring professional fees. Please refer to our press release issued earlier today, November 13, 2025, for further information, including a reconciliation between GAAP and non-GAAP financial measures. The press release can be found on our website at pioneerpowersolutions.com/investors/newsroom. Such non-GAAP measures should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with US GAAP.

Instead, we believe this non-GAAP measure should be used to supplement our financial measures derived in accordance with US GAAP in order to provide a more complete understanding of the trends affecting the business. Third quarter revenue was $6.9 million compared to $6.4 million in the year-ago quarter, an increase of approximately 7%. The increase was primarily due to an increase in service sales from our Critical Power Solutions business. Third quarter gross profit was $640,000 or a gross margin of approximately 9% compared to a gross profit of $1.5 million, a gross margin of approximately 20% in the third quarter of last year. The decrease in gross profit was primarily attributable to an unfavorable sales mix.

During 2025, Pioneer Power Solutions, Inc. incurred an operating loss from continuing operations of $1.4 million compared to an operating loss from continuing operations of $714,000 in the third quarter of last year. Additionally, during 2025, Pioneer Power Solutions, Inc. incurred a non-GAAP operating loss from continuing operations of $196,000, which excludes corporate overhead expenses, R&D expense, depreciation and amortization, and nonrecurring professional fees, compared to a non-GAAP operating income from continuing operations of $865,000 for the same quarter in 2024. Net loss from continuing operations for 2025 was $1.8 million compared to a net loss from continuing operations of $738,000 during 2024.

Taking a look at our balance sheet, as of September 30, 2025, we had cash on hand of $17.3 million, zero bank debt, and working capital of approximately $22.8 million, compared to $41.6 million of cash on hand, zero bank debt, and working capital of $26.7 million as of December 31, 2024. The cash on hand as of September 30, 2025, represents cash per share of approximately $1.56. The decrease in our cash on hand compared to the prior year-end is primarily due to the payment of a one-time special cash dividend of an aggregate of $16.7 million in January and the payment of federal and state income taxes totaling approximately $4 million during the second quarter.

Today, we are reaffirming our guidance for revenue of $27 million to $29 million for the full year of 2025, which represents year-over-year growth of approximately 20%. This concludes my remarks, and I will now turn the call back over to Nathan.

Nathan J. Mazurek: Operator, you can open the lines for questions.

Operator: Thank you very much. At this time, we will conduct a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue. Please limit your questions to one question and one follow-up question. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star key. One moment, please, while we poll for questions. The first question comes from Amit Dayal from H.C. Wainwright. Please proceed with your questions, Amit.

Amit Dayal: Thank you. Good afternoon, everyone. Thank you for taking my questions. Nathan, looks like another strong quarter. You know, what's interesting is your end markets are getting increasingly diverse. I'm just wondering, you know, how you are creating your marketing awareness to reach across, you know, multiple segments that you are now playing in?

Nathan J. Mazurek: So excellent question. So, I mean, we started turning our attention to it because so many of the applications that we've been working on end up, you know, the heart of the expertise is really delivering this power. Adding a charger is an expertise or a series of chargers. But not as complicated all the time. To date, we've been doing it almost in a haphazard way. People either it's you know, we're being recommended from others based on other projects that we've done, or the same contractor or the same engineering firm. And then we had some significant success already in the third quarter.

Which really means that we need to put together a very, very focused team to focus on certain verticals. And that's what we plan on doing. One on the industrial side, and the other really focused on the on the larger modular edge computing type data center, where a 1.4 power block under the right circumstances that's quickly deployable you know, we should be benefiting from and offering some sort of a value proposition there.

Amit Dayal: Interesting. Thank you for that, Nathan. Then just one on the gross margin side. You attributed the softness this quarter to the sales mix. Do you expect some bounce back in the next quarter?

Nathan J. Mazurek: Yeah. So, I mean, we you know, we're already experiencing it, but, yes, we expect a bounce back. And you're right. You know, the issue was the gross margin. The last five units for the for the large school district that we did were not good. Not good for us even below what we'd experienced earlier in the year for whatever those reasons were. And it's not important to discuss openly here. But that hurt. City of Portland did achieve more or less the margins that we had set out for it, a little bit less against some execution issue, but overall okay, but not enough to command gross margins that we did the other quarter.

Fourth quarter, the mix is much more favorable to us. And we expect them to bounce back.

Amit Dayal: Okay. Thank you, Nathan. I'll get back in queue.

Operator: Thank you. Ladies and gentlemen, just a reminder, if you'd like to ask a question, please press star and then 1. If you'd like to ask a question, please press star and then 1. The next question comes from Rob Brown from Lake Street Capital. Please proceed with your questions, Rob.

Rob Brown: Good afternoon. Hey, Rob.

Nathan J. Mazurek: Hi. My first question is on the online retailer project and the expansion there. You talked sort of some opportunity in 2026. Could you kind of outline the scale of that relative to sort of what you've done or maybe the planning steps that need to happen here and how that might look next year?

Nathan J. Mazurek: Yeah. I mean, to date, what we've been doing with them is short term rentals. You know, we did a short term, a ninety day rental last year at the end of the year for the holiday period to help them with that and let them sort of prove it out under the more intense part of their year. This year, it's it's it's a six month rental, so the revenue is relatively small. And the discussions are, you know, pending, again, that these units work as we plan as the initial one did. They're talking about probably five to 20 units next year from a for a purchase.

Rob Brown: Okay. And she's moving from rental to a purchase model.

Nathan J. Mazurek: Yeah. So okay. Great. Great. And then on the on the on the modular sort of data center project, you talked a little bit about here. But that's how do you kinda see that opportunity? What's sort of the ideal application there? And I guess, sort of that larger megawatt unit is I assume, a fairly large, ASP on that, but you can give a sense sort of the range of what those units, sell for?

Nathan J. Mazurek: Yeah. So we're gonna do a formal kind of unveiling of this before the end of the year. You know, with the with the team around it and its own sort of cache. But I'll let Geo give you a little I don't know. Give Rob a little you know, a concise teasing view of it now, if you can, for in ninety seconds.

Geo Murickan: Yeah. Thank you, Nathan. Rob, so the what we have in the market engagement we've done we have seen in the data center market, the move to AI compute applications And one of the more immediate needs has been the need to test the AI compute loads because they are they have a very variant use compared to normal cloud compute load the data centers have today. So in order to test these, they need a lot of smaller systems on data center premises. That are behind the meter powered and can be actuated in a four to six months time frame. In order for them to scale and plan for the bigger data center cycles.

Beyond that, there are also industrials who are adding critical power applications across different retail sectors. So those are some of the markets that we are addressing in the next one to three years.

Rob Brown: Okay. Excellent. Thank you. I'll turn it over.

Operator: Thank you so much. Ladies and gentlemen, we have reached the end of the question and answer session. And now I'd like to turn the call back to Nathan J. Mazurek for closing remarks. Thank you, sir.

Nathan J. Mazurek: Thank you, Claudia. This quarter's results reflect strong execution and meaningful progress in expanding into new markets including distributed power. With a robust pipeline, strategic product launches like PowerCore, and continued operational momentum, we are well positioned to drive growth and achieve our full year 2025 objectives. Thank you for your continued support. We look forward to updating you on our next earnings call.

Operator: Thank you very much. Ladies and gentlemen, that does conclude today's call. Thank you very much for joining us. You may now disconnect your lines.