Electrovaya Q1 FY2026 Earnings Call - Revenue up ~40%, profitable quarter while Jamestown and new products set the next test

Conference Operator: Welcome to the Electrovaya Q1 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, John Gibson, CFO. You may begin.

John Gibson, CFO, Electrovaya: Thank you. Good afternoon, everyone, and thank you for joining today’s call to discuss Electrovaya’s Q1 2026 financial results. Today’s call is being hosted by Dr. Raj DasGupta, CEO of Electrovaya, and myself, John Gibson, CFO. Today, Electrovaya issued a press release concerning its business highlights, financial results for the quarter ended December 31, 2025. If you would like a copy of the release, you can access it on our website. If you want to view our financial statements and management discussion and analysis, you can access those documents on the SEDAR+ website at www.sedarplus.ca, the SEC’s EDGAR website at sec.gov/edgar, or at our updated website at www.electrovaya.com. As with previous calls, comments today are subject to the normal provisions relating to forward-looking information.

We will provide information relating to our current views regarding market trends, including their size and potential for growth and our competitive position within our target markets. Although we believe that the expectations reflected in such forward-looking statements are reasonable, they do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements. Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company’s press release announcing the Q1 fiscal 2026 results and the most recent Annual Information Form and Management’s Discussion and Analysis under Risks and Uncertainties, as well as in other public disclosure documents filed with Canadian and U.S. securities regulatory authorities.

Also, please note that all the numbers discussed on this call are in U.S. dollars, unless otherwise noted. Now I’d like to turn the call over to Raj.

Dr. Raj DasGupta, CEO, Electrovaya: Thank you, John, and good evening, everyone. It is a pleasure to speak with you today as we review our first quarter fiscal 2026 results. Q1 provided a strong start to the year. Historically, this has been our weakest quarter due to seasonality in our core material handling vertical. Despite that, we continue to demonstrate meaningful momentum. Revenue increased nearly 40% year-over-year, margins improved materially, and we maintained profitability, delivering approximately $2 million in EBITDA and over and about $1 million in net income. I’ll begin by highlighting key operational developments during the quarter and year to date, followed by updates on our product and manufacturing initiatives. During the quarter, we further strengthened our balance sheet through a combination of solid operational performance, support from our financial partners, and the equity raise completed in November 2025.

We ended Q1 with the financial foundation to execute the next phase of our strategy, including expansion of manufacturing capacity in Jamestown, New York, expansion into new verticals, and continued development of next-generation products and technologies. Within our core material handling vertical, we continue to make strong progress. Our new OEM integrated high-voltage battery systems, developed over the past 2 years, are now scheduled to begin commercial deliveries in March 2026. We also made deliveries during the quarter to an existing global defense contractor for our new vehicle platform, expanding our relationship to two distinct applications with that OEM. We expect Defense to become a meaningful contributor to revenue this fiscal year and a strategic priority for the company over the long term. In robotics, we initiated commercial deliveries of our latest modular 48-volt battery systems to a robotic OEM partner this January.

We view robotics as a high-growth vertical aligned with our technological strengths, and we expect deployments to accelerate. Testing of our initial airport ground support equipment battery systems continues across multiple locations and climate conditions with a leading U.S. airline. While this process has taken a bit longer than initially anticipated, we remain optimistic and believe this product line represents a meaningful long-term opportunity. We also established a Japanese subsidiary during the quarter to support growing demands across Japan and the broader Asia Pacific region. We are seeing encouraging interest across multiple verticals and believe this presence will support long-term growth in the region. Turning to some product development activities. Demand trends in automation, robotics, advanced mobility, and energy storage for data center infrastructure are increasingly aligned with Electrovaya’s core strengths, which include safety, cycle life, and high-power capability.

We are making strong progress on several key initiatives, including the rapid charging version of our null technology and new energy storage systems focused on high power, especially 800-volt DC architectures. Our ultra-fast charging power system cell development is advancing well. This product integrates a next-generation anode technology with our null platform, including our ceramic separator technology, to deliver enhanced safety and long cycle life while targeting 5-minute charge and discharge capability. We have seen significant application potential, ranging from high intensity robotic systems to data center infrastructure support, and we are targeting commercialization in 2027. In parallel, we are developing energy storage systems, energy storage systems designed for emerging 800-volt DC data center architectures. These systems are intended to provide short duration ride-through capability and manage rapid power fluctuations associated with workload shifts and generator transfers.

We are currently in early-stage discussions with potential partners in this area. To support these initiatives, we recently hired a new head of energy storage with extensive industry experience to help guide our technical and commercial strategy for this key area. We are also advancing our next generation ceramic separator technology, which is expected to further improve energy density and thermal stability beyond our current platform. We are already seeing strong results and are moving forward with plans to domestically scale up this strategically important technology. Closer to market, we plan to launch new products for Class Three material handling vehicles, as well as next generation software and analytics solutions at MODEX 2026, this coming April. Finally, regarding our Jamestown expansion, we have commenced both interior and exterior facility upgrades.

Initial dry room equipment required for cell manufacturing has been delivered, and we’ve begun hiring key personnel to support equipment installation and automation activities. This expansion remains a critical component to our strategy to increase capacity and support domestic production. With that, I will now turn the call over back to John for a detailed review of our financial results.

John Gibson, CFO, Electrovaya: Thanks, Raj. Electrovaya continued its steady growth into the first quarter of fiscal 2026. As Raj mentioned at the top of the call, the company has historically had lower revenues in this quarter due to customer seasonality. However, Q1 showed significant growth year-over-year, and we entered Q2 fiscal 2026 with a strong balance sheet and the capital to continue our engineering focus on new market verticals and support organic growth. Revenue for the quarter was $15.5 million, compared to $11.1 million in the prior year. Year-over-year growth of 39%. Our gross margins for the quarter were 32.9%, an increase of 240 basis points over the prior year gross margin of 30.5%. As is the case with previous quarters, gross margins are primarily driven by product mix.

However, managing suppliers, prices, and tariffs continues to be at the forefront of our activities as we scale. Management believes the company is well-positioned to maintain strong margins as we continue through 2026. Operating profit increased significantly year-over-year. Operating profit for Q1 was $1.4 million, compared to an operating loss of $0.2 million in the prior year, and the company generated a net profit of $1 million in the quarter, a significant increase from the net loss of $0.4 million in the prior year. Q1 now represents the fourth consecutive quarter of net profit and positive earnings per share, and we believe we can continue this trend of profitability into fiscal 2026 and beyond.

Our adjusted EBITDA was $2 million for the quarter, compared to $0.5 million in the prior year, an increase of $1.4 million, or 265%. EBITDA grew in the current year due to improved margins and managing operating costs. Adjusted EBITDA as a percentage of revenue was 13% for the quarter. The company generated positive cash flow from operations of $1.7 million, after accounting for net changes in working capital, compared to cash used in operating activities of $0.3 million in the prior year. The company ended the first quarter with positive net working capital of $51.9 million, compared to $12.6 million in the prior year, a current ratio of 6 compared to 1.6. A clear indicator of improved financial performance and management is committed to continuing this positive trend.

At December 31, our total debt was $27.3 million, compared to $15.3 million in the prior year. This debt includes both working capital debt and debt from the EXIM facility. The working capital debt was $10.9 million at the end of the quarter, a decrease of $4.4 million over the prior year. This improved debt balance was driven primarily from cash flows from operations. At the end of the quarter, we had drawn $16.4 million from the EXIM loan. We’re still in a period of no cash payments with EXIM, with interest payments starting on March 31, 2026, and principal payments starting March 31, 2027. During the quarter, sorry, the company raised gross proceeds of $28 million from an equity issuance.

The company has utilized some of this cash for engineering and R&D efforts at the end of the quarter. The company had cash on hand of $22.7 million and availability within its banking facility of $9 million. We believe we have adequate liquidity to support our expansion into these new verticals and our anticipated growth as we continue through fiscal 2026.

Dr. Raj DasGupta, CEO, Electrovaya: ...The company made a solid start to fiscal 2026, maintaining disciplined progress across operations, which we see continuing into Q2. We expect to build on this momentum as we continue through the remainder of the fiscal year and are reaffirming our revenue guidance of 30% growth for fiscal 2026. Finally, I wanted to elaborate on one of the items detailed in the AGM material relating to the re-domiciling of the company. After our equity financing in November, and based on trading activity being substantially higher on the Nasdaq than the TSX, the company expects to lose its foreign private issuer status and be treated as a U.S. domestic filer under SEC rules. This change will subject the company to the full domestic reporting and governance regime, but absent a change in corporate domicile, without the structural and legal advantages typically available to U.S.-incorporated issuers.

In addition, as a U.S. domestic issuer, the company will become eligible for inclusion in certain U.S. equity indices. Taken together, these changes position us to broaden our investor base, improve trading liquidity, and ultimately enhance long-term value for our shareholders. That concludes our financial overview. Raj and I would now be pleased to hold the question and answer session.

Conference Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Once again, please press star one if you have a question or a comment. Our first question comes from Colin Rusch with Oppenheimer. Please proceed.

Colin Rusch, Analyst, Oppenheimer: Thanks so much, guys. You know, could you give us a bit of an update in terms of the scope and scale of the customers that are moving into your sales funnel, and then how quickly they’re moving through and how quickly they’re getting qualified on the product? We’re just curious about the velocity of some of that sales activity.

Dr. Raj DasGupta, CEO, Electrovaya: Thanks, Colin. Are you referring to just in general or specific verticals?

Colin Rusch, Analyst, Oppenheimer: You know, specific to material handling, just related to numbers.

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, Material Handling. So in terms of the end customers, there are, it’s dominated by a number of large Fortune 100 and Fortune 500 companies. The largest two buyers have given us very good indications of their demand over the next for the full fiscal year, which is partly how we determined our guidance for the year. And they are large retailers, generally, of course, like to take delivery, especially in the quarters outside of this reported quarter. So there, we have very good visibility. At the same time, we have a pipeline of new customers in various stages. Sometimes they’re just testing solutions.

More often, they have already done that, and they’re ordering small batches of systems to get to pilot and then full, full distribution scale. So there, there are various stages there, and that’s a pretty good place to be in that segment. So, we’re seeing good from there. We’re also now starting to add some additional sales resources to broaden that pool. But in the other verticals, I’ll talk about robotics there a bit. So we already have a number of partners we have, and we’re already now shipping growing numbers of batteries to a couple of these OEMs. For instance, if you visit our plant today, you’ll see quite a large number of smaller 48-volt battery systems under various stages of assembly, and that’s for robotic applications.

But, in addition to that, we’re, we are in discussions with approximately three or four additional OEMs in that space. Of course, you know, when you’re working on OEM projects, it takes, there is a time quotient, which is a little longer than a standardized product, which is the material handling product. The long answer to your question.

Colin Rusch, Analyst, Oppenheimer: No, that, that, that’s super helpful. And then I’m just curious about preparations for the pilot on the stationary storage project or, product. How those are proceeding, if you had any incremental interest since announcing the new product, where it’s a little bit different, you know, characteristics and, and performance specs. It seems like it’s, it’s really well-tuned to what we’re seeing on the data center side in terms of what the real needs are. So just curious about the, the timing on those pilots and, and growth and potential customers there.

Dr. Raj DasGupta, CEO, Electrovaya: A great question. So essentially, we’re coming out with two products for the energy storage space. One is more of a standardized product, which is based on the existing cell that we currently manufacture. And it’s a design for high power applications, still 30-minute, 1-hour energy storage. And for that product, we have pilots scheduled. One is a government-backed, a U.S. government-backed project, which we’ll hopefully announce soon. And then we are planning some internal pilots as well before we put them at customer sites. The second product, which I mentioned in our prepared remarks, is that 800-volt DC system. And that is something that we’ve been in discussions with, I’d say some generation, electricity generation companies.

So if you look at these data centers, they’re often putting diesel gensets and turbines on-site for jet power generation. But those devices need, when you’re looking at these 800-volt architecture, they need a energy storage component to deal with the seconds to minutes of demand response there. And so that’s the system we’re very excited about. That’s under development right now, and that system will utilize this ultra-high power cell that we’re developing.

Eric Stein, Analyst, Craig Hallum: Great. Thanks, guys. I’ll hop back in queue.

Conference Operator: The next question comes from Daniel Magder with Raymond James. Please proceed.

Daniel Magder, Analyst, Raymond James: Afternoon, thanks for taking my questions here. Just curious, as it relates to these new verticals, given the announced deliveries in the defense sector, do you still expect robotics will be the second largest revenue driver in the near term, or could defense potentially leapfrog it?

Dr. Raj DasGupta, CEO, Electrovaya: We are expecting robotics this year to be larger than defense, but they’ll both be present in a material way.

Daniel Magder, Analyst, Raymond James: Okay, got it.

Dr. Raj DasGupta, CEO, Electrovaya: The robotics deliveries have just started in the current quarter, so there were zero deliveries in fiscal Q1.

Daniel Magder, Analyst, Raymond James: And I guess just a follow-up here, recognizing you have the EXIM loan, the New York State grants and incentives. Given, obviously, the growth in defense and the current administration’s focus on it, are there other potential government programs you think you could potentially be able to tap into?

Dr. Raj DasGupta, CEO, Electrovaya: We think so. This is something that we’re starting to look at. Currently, our number one focus is, of course, getting the partners, the right partners here. So we already have two very good, well-established defense contractor customers. We are in discussions with another two. One of them is planning to test our products. So, I think that’s the route we’re going at it. Eventually, as perhaps look at some of those opportunities you just mentioned.

Daniel Magder, Analyst, Raymond James: Got it. And, I guess lastly for me, given all the positive progress in other areas, is energy as a service still a key initiative for you? And, just wondering if you could provide any color on how it’s progressing.

Dr. Raj DasGupta, CEO, Electrovaya: It still is a key initiative. It is, we are—we have, what we’ve seen is some of the customers we thought would be going down that route, decided to make, purchase orders instead, which is great, of course. However, we are looking at a couple partnership opportunities to support energy as a service. One route is partnering with a group who has a large company who has a long history in supporting similar type of activities. And that’s something we’re considering pursuing.

Daniel Magder, Analyst, Raymond James: Got it. All right. Well, that’s it for me for now, and I’ll jump back in the queue. Thanks.

Conference Operator: The next question comes from Eric Stein with Craig Hallum. Please proceed.

Eric Stein, Analyst, Craig Hallum: Hi, everyone. Just jumping around between calls, so I apologize if I’m touching on things you already have. But maybe just material handling, I know that’s the lion’s share or the majority of your outlook here in fiscal 2026. But when you think about that growth and when you think about the opportunity going forward, how do you think of that between existing versus adding new customers, and, you know, maybe penetration level with those existing customers that you’ve currently got?

Dr. Raj DasGupta, CEO, Electrovaya: So today, Eric, we’re already supplying at various stages of penetration level, the world’s largest companies. And so you couldn’t have a better pool of end customers than we have. They all are relatively early in adoption rates, right? So if you look at the addressable market within our existing customers, it’s massive, right? So the need to bring in new end customers is actually not, you know, it’s important, but it’s the larger opportunity is selling more to the folks who are already buying the product. In terms of penetration rates, I’d say we’re still early days. The largest operator of our systems has a very large number of distribution centers globally. So I’d say we’re early innings with the existing customer base.

Eric Stein, Analyst, Craig Hallum: Got it. And maybe following up on that, you know, I know that your thought process has been that your solution is really applicable to, you know, all sizes of facilities for those existing customers. And has that come to fruition? Are you thinking any differently about the opportunity? And I guess that just speaks to the size of the overall opportunity.

Dr. Raj DasGupta, CEO, Electrovaya: ... Yeah, the number of solutions like battery systems we deploy at a typical distribution center can vary widely. There doesn’t seem to be a limit to how large a site we can support. And it’s so I’d say that’s not really a factor.

John Gibson, CFO, Electrovaya: Yeah, I think we have a site, Eric, with over 300 batteries deployed in vehicles.

Eric Stein, Analyst, Craig Hallum: Yep. I was actually getting at it the other way, that there are some solutions out there that it’s, you know, it’s tougher to go to the medium and smaller sizes, which is obviously a big part of the market. Whereas that is an area where, you know, I would think that you do quite well in.

Dr. Raj DasGupta, CEO, Electrovaya: For sure. So, you know, there are plenty of sites operating our solution with probably under 10 systems. So there seems to be a broad range that we can service.

Eric Stein, Analyst, Craig Hallum: Okay. Let’s see. Maybe last one for me, just on the defense side. So just so I’m clear, so what you called out is just, you know, so expansion with one of, I think, you currently have two, defense contractors that you’ve been working with. So I guess first, just confirming that. And then secondly, when you talk about the two plus two additional you’re talking with, I mean, are these... I know it’s hard, you maybe can’t disclose a whole lot, but are these similar applications with those contractors, or is it using your solution in a wide range of things?

Dr. Raj DasGupta, CEO, Electrovaya: It appears, you know, we only know so much, but it appears these are different applications. So with the defense contractor we discussed in our prepared remarks, they initially, and they continue to use our solution for an autonomous land-based application. And the second application, which we just made initial deliveries for, is for a hybridized vehicle system. The second defense contractor is a submersible application. But in general, you know, we see defense as a good vertical for this technology, given the safety and high performance of our technology.

Eric Stein, Analyst, Craig Hallum: Yep, absolutely. Thank you.

Conference Operator: The next question comes from Craig Irwin with Roth Capital Partners. Please proceed, Craig.

Craig Irwin, Analyst, Roth Capital Partners: Hi, good evening, and thank you for taking my questions. So, Raj, I have a bunch of small questions around Jamestown that would be really, you know, important to understand as we shape the future. So the first one is, the CapEx outlook for this year. Can you maybe, shape that as far as the quarterly tempo and what your expectations are in this fiscal year? And then, associated with that, you know, where, where do you stand on the, the hiring and training of the workforce, that would be necessary, sort of in tandem with the installation and, and commissioning of that equipment?

Dr. Raj DasGupta, CEO, Electrovaya: Yes, Craig, I’ll let John answer the first part, and I’ll jump on the second part.

John Gibson, CFO, Electrovaya: Yeah. Hi, Craig. So essentially, where we were at the end of the quarter was we’d drawn $16 million, just over $16 million of the full $50 million EXIM loan. So we expect to spend that money before the end of the fiscal year, or at least, you know, 90% of it, kind of before the end of the fiscal year. So from a CapEx perspective, you’re gonna see an increase, certainly within Q2 and Q3. The majority of it will be within Q3 and Q4, though. So yeah, fully spending, or at least spending 90% of that loan, and including that CapEx within the fiscal year.

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, and on the second question, Craig, we are hiring people right now. So, about six months ago, we hired a senior individual from LG Chem, who was closely involved with one of their large-scale giga plants. And more recently, we’ve started hiring other employees. Some will be located at the site, who have experience with other battery manufacturing sites in the United States, some of which may have been closed down. We also hiring great talent, hoped to, you know, there’s a long list of folks we’re in process of giving offers to, and it seems to be an opportune time to bring in these types of individuals.

If we were building this plant a year ago, it would have been much harder to find this level of talent that we’re seeing in the market today.

Craig Irwin, Analyst, Roth Capital Partners: Understood. That’s a good thing. So, next question is, can you maybe give us some color on the revenue contribution out of the Jamestown facility this year? You know, I know your cell manufacturing is supposed to start at the end of the year, if you could just confirm the timeline for that. But do you expect any cell revenue in 2026 from the Jamestown facility? And, you know, roughly what percentage of revenue would you expect this facility to contribute?

Dr. Raj DasGupta, CEO, Electrovaya: ... Yeah, Craig, all along, we were anticipating Jamestown, especially at the cell level, contribution starting from fiscal 2027. So fiscal 2026 for us ends at September 30th, and there will be no cell contribution to revenue. Battery systems, on the other hand, that’s different. We will, you will likely see, some revenue generation out of that plant in our fiscal fourth quarter, both probably on a module and system side of things.

Craig Irwin, Analyst, Roth Capital Partners: Sorry, I meant calendar year. So I’m assuming that all of the cell manufacturing equipment will be in place in your fiscal year before the end of September, with commissioning work underway. But do you expect cell production in that facility in the first quarter of your fiscal seven, the last three months of this calendar year?

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, potentially, correct. Potentially, yes. Of course, it’s gonna. It doesn’t start out. We’ll make sure the output of the plant is matching what we need, of course, right? There’s a bit of a start-up period associated with that, but we could most definitely see some contribution in that quarter.

Craig Irwin, Analyst, Roth Capital Partners: Understood. Last question, if I may. Can you update us on 45X, what you think the benefit will be on equipment purchases, whether or not you’re seeing tariffed equipment impacted, and what you think the potential contribution is, you know, once you are manufacturing your own cells in Jamestown in fiscal 2027?

Dr. Raj DasGupta, CEO, Electrovaya: So there’ll be two parts of 45X. There’s the $10 per kWh associated with module production, and then there’s $35 per kWh associated with cell production. And under the new rules, under the Big Beautiful Bill Act, you can only get one or the other. So what we anticipate is we will start off with the $10 per kWh as we manufacture modules, and when the cell production hits a certain speed, we’ll transfer to the $35 per kWh and for the cells and sacrifice the modules.

Craig Irwin, Analyst, Roth Capital Partners: Excellent. Thank you for that. Congrats again on the progress.

Dr. Raj DasGupta, CEO, Electrovaya: Thanks, Craig.

Conference Operator: Up next is Amit Dayal with HC Wainwright. Please proceed.

Amit Dayal, Analyst, HC Wainwright: Thank you. Good afternoon, everyone. Most of my questions have been asked, but just with respect to the outlook for the year, you know, the backlog still is at $100 million-$125 million. So the, you know, the top-line guidance seems a little conservative. You know, can you maybe provide any color on what could drive upside to the 30% growth you are targeting this year?

John Gibson, CFO, Electrovaya: Yeah. So the growth is based on not just the backlog, but the frontlog as well. So that number you quoted is backlog plus frontlog. So essentially, we’re taking purchase orders we’ve received, purchase orders that we know are coming in, confirmation from customers of demand, and then our, you know, our estimates of run rate. And then what we do is we take that number and discount it back based on historic experience with customer delays or purchase order changes, et cetera. So, yeah.

Dr. Raj DasGupta, CEO, Electrovaya: Amit, you know, 30% growth is not a bad number. I think there, as you can see in our Q1, right, and some people forget this, there is some seasonality on our core material handling vertical. Sometimes distribution centers open a little later than they plan to, if they’re a new site. So there’s some of that activity you have to take into account. But, of course, there’s some upside. You know, we haven’t taken into account meaningful revenue from the airport ground equipment space, which could most certainly come into the current fiscal year. But overall, you know, we’re very focused on maintaining growth, maintaining the profitability, and these new product developments and new technology developments, in addition to the Jamestown setup.

Amit Dayal, Analyst, HC Wainwright: Understood. Thank you. And then on the solid-state side, any you know important milestones you are targeting to hit this year? Do these include maybe any pilots that could begin with customers?

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, good question. I didn’t discuss the solid-state battery much in the prepared remarks, but we had reached a certain level of development, I’d say, back in the summer, which was looking good, but we were somewhat hamstrung by equipment in terms of to get it to a pilot scale. We ordered the equipment several months back. It has arrived at our lab site already and is being installed. So we will start scaling up cells using our solid-state battery technology really from April onwards. And at that point, if things look good, we will start looking to sample them as well. So there’s definitely activity there. We’ve added a couple of key researchers to our team. Most definitely, we have not forgotten about that technology.

On the IP side as well, we’re close to being awarded some patents around our solid-state technology, but, you know, we’re in the back and forth with the examiners at the moment.

Graham Tanaka, Analyst, Tanaka Capital Management: Okay. Thank you, guys. That’s all I have.

Conference Operator: Next question comes from Jeffrey Campbell with Seaport Research Partners. Please proceed.

Jeffrey Campbell, Analyst, Seaport Research Partners: Good afternoon, gentlemen. Raj, my first question is, I assume the OEM integrated high-voltage batteries refers to Toyota heavy-duty MHE, but you can correct me if I’m wrong. If so, can you give us some color on how many models are integrated at present, and what it might look like over the next couple of years?

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, you’re probably correct. You are correct, yeah. The model I referred to is a high-voltage system, which is going into... There are a couple models of batteries and is going, we believe, into two distinct vehicle systems. And so there are orders for those vehicles already. The reason production is starting in March is it coincides with certification.

Jeffrey Campbell, Analyst, Seaport Research Partners: Okay, great. My next question was regarding the solutions you mentioned. I think you’re gonna have a place where you’re gonna display your solutions targeting Class Three MHE. I was wondering, is this going primarily to robotics applications, or will you also support more traditional Class Three equipment? Because I believe in the past, you’ve tended to identify Class Three as generally unable to support your margins.

Dr. Raj DasGupta, CEO, Electrovaya: It is the latter. So it’s our expanding in the material handling vertical with a Class Three product, which we normally had shied away from. We believe we can maintain those margins. The reason we’re developing that product is it has sort of been driven customer-driven, and but we will be able to maintain the margins with that product. It takes advantage of some aspects of the robotic battery systems that we’ve developed, so there’s some overlap in the design of the system.

Jeffrey Campbell, Analyst, Seaport Research Partners: Okay. Yeah, that’s very interesting. And I guess my last question for today is kind of a more open-ended one regarding the next-generation ceramic separator development that’s undergoing. I was just wondering, what are the specific areas that you see demanding improvement here? I’m not trying to be coy, but the existing tech is class-leading, so I’m interested in your insight here.

Dr. Raj DasGupta, CEO, Electrovaya: Yeah, that’s definitely a valid question. So the current technology is working well. It’s very well-validated. Of course, you wanna continue to improve that technology, and that’s one aspect of what we’re doing here. Improvements would be to make it thinner, make it even higher thermal stability, use new novel materials, which we’re working on. And also, the current separator is working very well. It’s being manufactured under contract in Japan. This one will be manufactured domestically. So that’s another, I wouldn’t say benefit, it’s just an addition. But it supports some activities, like, for instance, this high, super high, ultra-high power cells. It has a benefit there. Potentially, this new material can also be utilized in other cell formats. That would be a major breakthrough for us, but it’s too early to say.

Jeffrey Campbell, Analyst, Seaport Research Partners: Well, we’ll stay tuned for that. That sounds provocative. So thanks very much. I appreciate it.

Dr. Raj DasGupta, CEO, Electrovaya: Thank you.

Conference Operator: We have a follow-up coming from Colin Rusch with Oppenheimer. Please proceed.

Colin Rusch, Analyst, Oppenheimer: Thanks so much, guys. You know, you know, I was missing asking around the ground support equipment opportunity and how we should think about the cadence of that moving forward, going from piloting into a more substantial order and kind of the order of magnitude of that opportunity set for you guys right now?

Dr. Raj DasGupta, CEO, Electrovaya: What we’re looking at is to go to that more substantial order. We’ve already received some pilot orders, which are essentially already been delivered or some of them are mostly been delivered, but this would be a go to scale, right away. And so the opportunity we’re looking at with this first airline is for, for a reasonably large-scale deployment.

Colin Rusch, Analyst, Oppenheimer: Okay, great. I’ll take the rest offline. Thanks, guys.

Conference Operator: Once again, if you have a question or a comment, please press star one. The next question comes from Graham Tanaka with Tanaka Capital Management. Please proceed.

Graham Tanaka, Analyst, Tanaka Capital Management: Hi, guys. Thank you. I’m just putting this all together. You have a lot of moving parts, and I just wonder if you could summarize for the next two years, what are the main areas that can increase gross margins and operating margins versus decreasing? And on the decreasing side, if you could address your semiconductor content and what kind of cost increases you’re getting in semiconductors. Thank you.

Dr. Raj DasGupta, CEO, Electrovaya: So, overall, you know, as you saw in this current quarter, margins improved, going from about 30% to about 32%. We expect to maintain that level of activity, that level of improvement in the coming quarters. That’s sort of what we’re anticipating. Those, I’d say, relatively modest improvement in margins, but it comes with, you know, it correlates to improved financial results. The bigger change in margins will occur following Jamestown cell production coming online, and that will be due to, A, you know, the vertical integration, but B, the ability to leverage the 45X production tax credits. And the second part of your question on, I guess you mean you don’t mean semiconductors, you mean input materials.

We’re, you know, Electrovaya, our batteries are generally more expensive already, so input material price variations have an impact, of course, but I probably have a more nuanced impact than it does on our commodity-driven rivals.

Graham Tanaka, Analyst, Tanaka Capital Management: So, I just want to make sure that if there’s any issues on supply or cost increases in semiconductors, which we’re seeing across all Silicon Valley companies, whether you can cover any cost increases and can secure all supply that you think you might need in semiconductors. Thank you.

Dr. Raj DasGupta, CEO, Electrovaya: So in terms of material inputs, the one that, you know, has fluctuated is lithium carbonate pricing, but it hasn’t fluctuated enough for us to have any noticeable impact on margins. We, of course, can also update pricing to our customers, which we haven’t needed to, if those prices do go in the wrong direction enough. The only materials which probably are common with the semiconductor space is maybe alumina, but there, again, it’s not substantial enough in our bill of materials to have a major impact.

Graham Tanaka, Analyst, Tanaka Capital Management: Right. That’s great. I don’t know if you can have added it up, but what % of your business can be coming from military spending? You addressed defense, but it kind of goes into a few different areas. I’m just wondering if that is gonna rise as a % of the mix and are the margins gonna be lower in defense? Thank you.

Dr. Raj DasGupta, CEO, Electrovaya: So sorry, on the last part, margins in defense, we would expect to be higher. Now, the defense space, at least from our experience, it moves slowly in terms of qualification, and they’re very, very careful. A lot of testing validation goes into this. There’s also certain certifications. I don’t want to get too deep into it, but there’s mill and Navy certification levels that you have to achieve sometimes. So it moves... It’s a sticky space. Once you get designed in, you’re designed in. But in terms of how quickly it scales in volume, my anticipation is it scales slowly.

Conference Operator: We have no further questions in the queue. I’d like to turn the floor back to management for any closing remarks.

Dr. Raj DasGupta, CEO, Electrovaya: Now, that concludes our call this evening, and thank you for listening. We look forward to speaking with you again after we report our second quarter 2026 results. Have a wonderful evening.

Conference Operator: Goodbye. This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.