Microvast Holdings, Inc.

Thank you for standing by. This is the conference operator. Welcome to the micro vast second quarter 2022 earnings call. As a reminder, all participants are in a listen only mode and the conference is being recorded. After the presentation, investment community professionals have the opportunity to participate in a question and answer session. To join the question queue, you may press star and then one on your telephone keypad. Should you need assistance during the conference call, you may signal for an operator by pressing star and then zero. I would now like to turn the conference over to Sarah Alexander, a MicroVAS General Counsel. Thank you. Please go ahead.

Thank you, John, and thanks to the audience for joining us today. Sasha Kelterborn, our President and Chief Revenue Officer, and Craig Webster, Chief Financial Officer, will host today's call. Ahead of this call, MicroVast issued its second quarter 2022 earnings press release, which can be found on the investor relations section of our website at ir.microvast.com. In addition, we have posted a slideshow to our website to accompany tonight's call. As a reminder, please note that we will be making forward-looking statements on this call. These statements are based on current expectations and assumptions and reflect our views only as of today. They should not be relied upon as representative about views as of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our annual report on Form 10-K filed in March and the 10-Q filed earlier today. In addition, during today's call, we may discuss non-GAAP financial measures, including adjusted gross profit, adjusted net loss, and adjusted EBITDA, which we believe are useful as supplemental measures of micro-VAS performance. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. These non-GAAP measures have been reconciled to their most comparable GAAP metric in the tables included at the end of our press release. A webcast replay of this call will also be available on the investor relations section of our company website. With that, I'll turn the call over to Sasha for some opening remarks.

Thank you, Sarah. Everyone, please turn to slide four of our presentation as I cover a few highlights from the second quarter. We posted 93% revenue growth during the quarter, delivered 64.4 million US dollars in Q2 2022. This revenue performance exceeded expectations, especially considering that our shipments, they're very slow in April and the first half of May, as a result, of the COVID lockdowns in Shanghai and the surrounding region. I want to thank our global team and especially our local team in China this quarter. Faced with many external challenges and situations that were out of their control, they rose to the occasion maintaining production throughout the lockdown and put us in a position to deliver strong quarterly results after the pace of shipments began to pick back up in the second half of May when the lockdown restrictions were eased. We had an outstanding month in June and we were able to make up the shortfall from the first half of the quarter. On a regional note, I would highlight that our market share in India continues to increase and it was again a key region for our revenue growth this quarter. We ended the second quarter with a strong backlog of 105.3 million U.S. dollars, driven by a healthy order intake of 47.8 million U.S. dollars. Our forecasted contracted revenue remained at a solid 2.5 billion U.S. dollars. Except backlog, our forecasted contract revenue is compromised entirely of customers located outside of China. When we refer to forecasted contract revenue, we are describing backlog plus management estimate for revenue we expect to realize from existing contractual relationships with customers. Most of these contracts include estimate volumes requirements. However, they do not typically include a volume commitment. We expect to realize current forecasted contract revenue figures between 2022 and 2031. The most prominent challenge in the second quarter continued to be raw material prices, which remain at elevated levels as a result of supply chain disruptions as well as worldwide inflation. Our unit costs across the board are tracking significantly higher than we anticipated at the beginning of the year. We are actively monitoring these trends and implementing mitigation strategies where possible, including optimizing longer-term supply contracts, identifying new and or additional sources of supply, and increasing our selling prices where possible. However, we expect raw material prices, especially for certain key materials like lithium and cobalt, to remain elevated through 2022 and possibly into 2023. Looking forward into 2023, we expect our order volume to increase. After we bring the new manufacturing capacities online in Huzhou, we expect this additional volume to increase our production visibility, enabling us to lock in higher volume commitments. please turn to slide number five, which highlights some of our key partnerships in the commercial vehicle market. SAFRA is a French bus OEM which has a dedicated unit specializing in the renovation of passenger transport equipment and active in propelling clean and sustainable mobility. One of SAFRA's core strategy centers on the construction and marketing of hydrogen buses under the Bus Innova and High City brands is the retrofitting of buses with hydrogen, the renovation and maintaining of passenger transport vehicles as well as customer service. Microvest is nominated as exclusive battery supplier and has signed a framework agreement up to 10 years with Zafra with a revenue forecast of over 150 million US dollars. Clean Logistics is a transport leader in the mobility revolution within commercial vehicle transport. Microbus has already delivered prototype systems for hydrogen buses and trucks for clean logistics. The expected volume forecast from 2023 to 2027 is approximately 1,300 to 5,000 vehicles. Weishai Power Group is an international company with business segments such as power system, commercial vehicles, aquaculture equipment, construction machinery, smart logistics, and marine transportation equipment. Its products are exported to more than 110 countries and regions. MicroVast is in the process of delivering battery systems to Weishai Power for its heavy truck tractor project with 4 million order volume only in Q2. XCMG is one of the most influential large-scale enterprises in China construction machinery industry. Its product portfolio includes various heavy-duty construction equipment, truck cranes, asphalt concrete paper, graders, Cold-miling machines, fire trucks, and microbus expect to deliver 50 sets to their 49-ton hydrogen heavy-duty trucks with a total revenue of 1.4 million U.S. dollars in 2022. Please turn to slide 6, which highlights some key wins during the second quarter, including an order from JBM Group for over 11 million U.S. dollars and another order from Switch in excess of 8 million U.S. dollars. We also continue to benefit from ongoing customer relationships, as example, Oshkosh, RideBus, ZF, King Long, and others. In total, the order intake for Q2 was $47.8 million. I will now turn the call over to Craig to review our financial performance of Q2.