Earnings release
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XCHG Limited Reports Second Quarter 2024 Unaudited Financial Results December 13, 2024 HAMBURG, Germany, Dec. 13, 2024 (GLOBE NEWSWIRE) -- XCHG Limited (“XCharge” or the “Company”), (NASDAQ: XCH), a global leader in integrated EV charging solutions, today announced its unaudited financial results for the three months ended June 30, 2024. Operational Highlights Three months ended June 30, 2024 Six months ended June 30, 2024 DC fast charger deliveries 438 764 NZS charger deliveries 26 51 Total EV charger deliveries 619 1,155 Q2 2024 DC fast charger deliveries were 438, representing a decrease of 31.8% from 642 in the corresponding period of 2023. Q2 2024 Total EV charger deliveries were 619, representing a decrease of 5.4% from 654 in the corresponding period of 2023. DC fast charger deliveries in the first six months of 2024 were 764, representing a decrease of 30.0% from 1,092 in the corresponding period of 2023. Total EV charger deliveries in the first six months of 2024 were 1,155, representing an increase of 2.1% from 1,131 in the corresponding period of 2023. Management Remarks Mr. Yifei Hou, Chief Executive Officer of XCharge, commented, “We are pleased to achieve a resilient operating performance in the second quarter of 2024 despite the challenging macroeconomic environment. In this quarter, as we strove to meet customer demands and strengthen our leading position in the global industry, we delivered 26 Net Zero Series (“NZS”) chargers, representing substantial growth from the prior year, which brought our total NZS charger deliveries up to 51 for the first half of 2024. As a pioneer in the EV charger market, we are committed to enhancing our cutting-edge technologies and developing creative solutions to tackle energy problems, innovatively meeting our clients’ needs. Looking ahead, we will continue to invest in research and development, creating new commercialization opportunities and building a global green future.” Initial Public Offering (“IPO”) In September, the Company successfully completed its initial public offering of 3,462,223 American depositary shares ("ADSs") at a price of US$6.20 per ADS, including 128,888 ADSs that the underwriter partially exercised over-allotment options. Each ADS represents 40 Class A ordinary shares. The total offering size was approximately US$21.5 million before deducting the underwriting discounts and commissions and relevant expenses, with net proceeds of US$19.1 million. Financial Highlights for the Second Quarter of 2024 (in USD millions, except for per ordinary share data and percentage) Q2 2024 Q2 2023 % Change1 Revenues 9.0 12.2 (26.3) Gross profit 4.2 5.5 (23.9) Gross margin 46.1% 44.7% 1.4 Operating (loss)/income (0.9) 2.1 (144.9) Net (loss)/income (1.0) 2.0 (146.8) Adjusted2 net (loss)/income (0.9) 2.0 (146.0) Net (loss)/income attributable to ordinary shareholders (1.3) 0.5 (390.6) (Loss) /earnings per ordinary share-basic and diluted (0.002) 0.001 (336.5) __________________________________________ 1 Except for gross margin, where absolute change instead of percentage change is presented. 2 See “Use of Non-GAAP Financial Measures” and “Unaudited Reconciliation of GAAP and Non-GAAP Results” included in this release for further details. Revenues were US$9.0 million for the second quarter of 2024, representing a decrease of 26.3% from US$12.2 million for the same period of 2023. Product revenues were US$8.9 million for the second quarter of 2024, representing a decrease of 26.7% from US$12.1 million for the same period of 2023. The year-over-year decrease was mainly due to the decrease in deliveries to a major customer in Europe. Service revenues were US$0.1 million for the second quarter of 2024, representing an increase of 50% from US$0.1 million for the same period of 2023. The year-over-year increase was mainly due to the increase in maintenance services revenue.
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Cost of revenues was US$4.8 million for the second quarter of 2024, representing a decrease of 28.2% from US$6.7 million for the same period of 2023. The year-over-year decrease was mainly due to the decrease in revenue. Gross margin was 46.1% for the second quarter of 2024, compared with 44.7% for the same period of 2023. The year-over-year increase was mainly due to our enhanced cost control measures. Selling and marketing expenses were US$2.3 million for the second quarter of 2024, representing an increase of 74.2% from US$1.3 million for the same period of 2023.The year-over-year increase was mainly due to increases in staff costs, sales commissions and advertising expenses for business expansion. Research and development expenses were US$1.2 million for the second quarter of 2024, representing an increase of 18.7% from US$1.0 million for the same period of 2023. The year-over-year increase was mainly due to the increase in staff costs for researching and developing new products. General and administrative expenses were US$1.6 million for the second quarter of 2024, representing an increase of 47.4% from US$1.1 million for the same period of 2023. The year-over-year increase was mainly due to increases in staff costs, tax expenses and professional service expenses. Operating (loss)/income was US$(0.9) million for the second quarter of 2024, compared with US$2.1 million for the same period of 2023. Net (loss)/income was US$(1.0) million for the second quarter of 2024, compared with US$2.0 million for the same period of 2023. Excluding changes in fair value of financial instruments and gain on extinguishment of convertible debt, adjusted net income (loss) was US$(0.9) million for the second quarter of 2024, compared with US$2.0 million for the same period of 2023. Net (loss)/income attributable to ordinary shareholders was US$(1.3) million for the second quarter of 2024, compared with US$0.5 million for the same period of 2023. Basic and diluted (loss) /earnings per ordinary share was US$(0.002) for the second quarter of 2024, compared with US$0.001 for the same period of 2023. Cash and cash equivalents were US$24.3 million as of June 30, 2024, compared with US$12.8 million as of March 31, 2024. About XCharge XCharge, founded in 2015, is a global leader in integrated EV charging solutions. The Company offers comprehensive EV charging solutions which primarily include the DC fast chargers, the advanced battery-integrated DC fast chargers, as well as its accompanying services. Through the combination of XCharge’s proprietary charging technology, energy storage system technology, and accompanying services, the Company enhances EV charging efficiency and unlocks the value of energy storage and management. Committed to providing innovative and efficient EV charging solutions, XCharge is actively working towards establishing a global green future that is critical to long-term growth and development. For more information, please visit: https://investors.xcharge.com/ Use of Non-GAAP Financial Measures We consider adjusted net income (loss), a non-GAAP financial measure as a supplemental measure to review and assess our operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We present this non-GAAP financial measure because it is used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of this non-GAAP measure facilitates investors’ assessment of our operating performance. This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using this non-GAAP financial measure is that it does not reflect all items of income and expense that affect our operations. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. We compensate for these limitations by reconciling this non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. We define adjusted net income (loss) as net income (loss) excluding changes in fair value of financial instruments and gain on extinguishment of convertible debt. For more information on these non-GAAP financial measures, please see the tables captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this release. Exchange Rate Information This announcement contains translations of certain EUR amounts into U.S. dollars and RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from EUR to U.S. dollars, from U.S. dollars to EUR, from RMB to U.S. dollars and from U.S. dollars to RMB are made at EUR1.0711 to US$1.00 and RMB7.2672 to US$1.00, the exchange rates on June 28, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that any amounts that could have been, or could be, converted into another currency, as the case may be, at any particular rate or at all. Safe Harbor Statement This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to”, or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law. For investor and media inquiries, please contact: XCharge
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IR Department Email: ir@xcharge.com Piacente Financial Communications Brandi Piacente Tel: +1-212-481-2050 Jenny Cai Tel: +86 (10) 6508-0677 Email: XCharge@tpg-ir.com Source: XCHG Limited XCHG LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS As of December 31, As of June 30, 2023 2024 US$ US$ ASSETS Current assets Cash and cash equivalents 15,660,786 24,258,144 Restricted cash 32,024 31,048 Accounts receivable, net 12,495,375 4,722,863 Amounts due from related parties 1,671,220 1,355,893 Inventories 6,656,708 7,481,488 Prepayments and other current assets 3,228,984 3,349,664 Total current assets 39,745,097 41,199,100 Non‑current assets Property and equipment, net 576,376 721,540 Intangible assets, net 27,130 12,256 Long-term investments 105,892 105,237 Operating lease right-of-use assets, net 505,417 1,967,458 Total non‑current assets 1,214,815 2,806,491 Total assets 40,959,912 44,005,591 LIABILITIES Current liabilities Short-term borrowings 5,560,027 8,887,761 Accounts payable 5,750,157 5,686,213 Contract liabilities 1,332,132 2,751,296 Operating lease liabilities—current 294,028 618,793 Convertible debts 12,516,331 - Financial liability 247,265 518,260 Accrued expenses and other current liabilities 5,027,620 4,803,217 Total current liabilities 30,727,560 23,265,540 Non‑current liabilities Operating lease liabilities—non-current 172,070 1,176,438 Other non-current liabilities 79,964 116,287 Total non‑current liabilities 252,034 1,292,725 Total liabilities 30,979,594 24,558,265 XCHG LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS As of December 31, As of June 30, 2023 2024 US$ US$ Commitment and contingencies - - Mezzanine equity
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Series Angel preference shares (US$0.00001 par value; 37,500,000 shares authorized, issued and outstanding as of December 31, 2023 and June 30, 2024. Liquidation preference of US$1,200,107 and US$1,192,681 as of December 31, 2023 and June 30, 2024) 1,176,340 1,176,340 Series Angel redeemable preference shares (US$0.00001 par value; 37,500,000 shares authorized, issued and outstanding as of December 31, 2023 and June 30, 2024. Redemption value of US$1,200,107 and US$1,192,681 as of December 31, 2023 and June 30, 2024; Liquidation preference of US$1,200,107 and US$1,192,681 as of December 31, 2023 and June 30, 2024) 1,176,340 1,176,340 Series A redeemable preference shares (US$0.00001 par value; 300,000,000 shares authorized, issued and outstanding as of December 31, 2023 and June 30, 2024. Redemption value of US$8,043,015 and US$8,292,329 as of December 31, 2023 and June 30, 2024; Liquidation preference of US$7,500,000 and US$7,500,000 as of December 31, 2023 and June 30, 2024) 8,043,015 8,292,329 Series A+ redeemable preference shares (US$0.00001 par value; 118,971,900 shares authorized, issued and outstanding as of December 31, 2023 and June 30, 2024. Redemption value of US$3,732,918 and US$3,602,251 as of December 31, 2023 and June 30, 2024; Liquidation preference of US$3,720,623 and US$3,703,251 as of December 31, 2023 and June 30, 2024) 3,795,370 3,795,370 Series B redeemable preference shares (US$0.00001 par value; 602,372,700 shares authorized, issued and outstanding as of December 31, 2023 and June 30, 2024. Redemption value of US$23,253,627 and US$23,597,312 as of December 31, 2023 and June 30, 2024; Liquidation preference of US$19,286,070 and US$19,252,636 as of December 31, 2023 and June 30, 2024) 25,825,948 26,248,252 Series B+ redeemable preference shares (US$0.00001 par value; 204,195,160 shares authorized, nil and 161,977,511 shares issued and outstanding as of December 31, 2023 and June 30, 2024. Redemption value of nil and US$9,547,792 as of December 31, 2023 and June 30, 2024; Liquidation preference of nil and US$9,120,503 as of December 31, 2023 and June 30, 2024) - 9,720,793 Total mezzanine equity 40,017,013 50,409,424 SHAREHOLDERS’ DEFICIT Ordinary shares (USD0.00001 par value, 3,728,605,400 shares authorized, 806,200,500 shares issued and outstanding as of December 31, 2023 and June 30, 2024) 8,062 8,062 Series Seed preference shares (US$0.00001 par value; 175,050,000 shares authorized, issued and outstanding as of December 31, 2023 and June 20, 2024) 2,000,000 2,000,000 Additional paid-in capital 6,563,764 5,822,913 Accumulated other comprehensive income 1,824,365 1,858,054 Accumulated deficit (40,432,886) (40,651,127) Total shareholders’ deficit (30,036,695) (30,962,098) Total liabilities, mezzanine equity and shareholders’ deficit 40,959,912 44,005,591 XCHG LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) For the Three Months Ended June 30, 2023 2024 US$ US$ Revenues 12,204,385 8,997,506 Cost of revenues (6,748,376) (4,845,198) Gross profit 5,456,009 4,152,308 Operating expenses Selling and marketing expenses (1,291,521) (2,250,336) Research and development expenses (992,085) (1,178,086) General and administrative expenses (1,117,020) (1,646,991) Total operating expenses (3,400,626) (5,075,413) Government grants - 104 Operating income (loss) 2,055,383 (923,001)
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Changes in fair value of financial instruments (16,412) (256,771) Gain on extinguishment of convertible debt - 247,283 Interest expenses (37,316) (71,363) Interest income 31,268 52,693 Income (loss) before income taxes 2,032,923 (951,159) Income tax expense - - Net income (loss) 2,032,923 (951,159) Accretion of redeemable preference shares to redemption value (698,646) (368,607) Undistributed earnings attributable to redeemable preferred shareholders and Series Seed preferred shareholders of the Company (880,056) - Net income (loss) attributable to ordinary shareholders 454,221 (1,319,766) Net income (loss) 2,032,923 (951,159) Other comprehensive loss Foreign currency translation adjustment, net of nil income taxes 1,774,143 53,874 Total comprehensive income (loss) 3,807,066 (897,285) Earnings (loss) per ordinary share – Basic and diluted 0.001 (0.002) Weighted average shares outstanding used in calculating basic and diluted earnings per share ordinary share – Basic and diluted 656,200,500 806,200,500 XCHG LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) For the Six Months Ended June 30, 2023 2024 US$ US$ Revenues 19,589,628 20,149,953 Cost of revenues (11,038,743) (10,332,829) Gross profit 8,550,885 9,817,124 Operating expenses Selling and marketing expenses (2,460,884) (4,379,024) Research and development expenses (1,734,157) (2,165,705) General and administrative expenses (2,088,247) (3,307,565) Total operating expenses (6,283,288) (9,852,294) Government grants 2,367 31,206 Operating income (loss) 2,269,964 (3,964) Changes in fair value of financial instruments (16,819) (416,109) Gain on extinguishment of convertible debt - 247,283 Interest expenses (73,810) (115,156) Interest income 52,028 81,003 Income (loss) before income taxes 2,231,363 (206,943) Income tax expense - (11,298) Net income (loss) 2,231,363 (218,241) Accretion of redeemable preference shares to redemption value (1,019,628) (740,852) Undistributed earnings attributable to redeemable preferred shareholders and Series Seed preferred shareholders of the Company (799,231) - Net income (loss) attributable to ordinary shareholders 412,504 (959,093) Net income (loss) 2,231,363 (218,241) Other comprehensive loss Foreign currency translation adjustments 956,545 33,689 Total comprehensive income (loss) 3,187,908 (184,552) Earnings (loss) per ordinary share
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– Basic and diluted 0.001 (0.001) Weighted average shares outstanding used in calculating basic and diluted earnings per share ordinary shares – Basic and diluted 656,200,500 806,200,500 XCHG LIMITED UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS For the Three Months Ended June 30, 2023 2024 US$ US$ Net income (loss) 2,032,923 (951,159) Add: Changes in fair value of financial instruments 16,412 256,771 Gain on extinguishment of convertible debt - (247,283) Non-GAAP net income (loss) 2,049,335 (941,671) Earnings (loss) per ordinary share – Basic and diluted 0.001 (0.002) Add: Changes in fair value of financial instruments - - Gain on extinguishment of convertible debt - - Non-GAAP earnings (loss) per ordinary share – basic and diluted 0.001 (0.002) XCHG LIMITED UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS For the Six Months Ended June 30, 2023 2024 US$ US$ Net income (loss) 2,231,363 (218,241) Add: Changes in fair value of financial instruments 16,819 416,109 Gain on extinguishment of convertible debt - (247,283) Non-GAAP net income (loss) 2,248,182 (49,415) Earnings (loss) per ordinary share 0.001 (0.001) – Basic and diluted Add: Changes in fair value of financial instruments - - Gain on extinguishment of convertible debt - - Non-GAAP earnings (loss) per ordinary share – basic and diluted 0.001 (0.001)