Beam Global Stock

Good day, and welcome to the Beam Global Second Quarter 2026 Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead.

Good afternoon, and thank you for participating in Beam Global's second quarter 2026 operating results conference call. We appreciate you joining us today. Desmond Wheatley, President, CEO and Chairman of Beam Global is joining me. We are both in San Diego today. Desmond will be giving his thoughts on 2026 and providing an update on recent activities at Beam Global followed by a question-and-answer session.

But first, I'd like to remind you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the SEC. The content of this call contains time-sensitive information that is accurate only as of today, August 19, 2026. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

Let me start with a few key highlights. Our revenue in second quarter was $8.6 million. It's up 21% year-over-year and 174% over the first quarter, a clear signal that the business is reaccelerating after a slow start to the year. We converted a substantial portion of our backlog into shipments during the quarter and backlog ended June at $5.4 million. We continue to operate with no debt, no going concern qualification and an unused $100 million line of credit.

Operationally, the quarter was active. We booked more than $0.5 million in drone and autonomous robotics battery orders in a single week. We extended our federal GSA and source well momentum with repeat EV Arc orders from Dallas, Daniels County and the City of Long Beach, and we completed our relocation of our manufacturing operations to Yuma, Arizona, a move that we expect to generate approximately $2.7 million in rent savings alone over the 5-year lease term when compared to what we have historically spent manufacturing in San Diego. Dean will take you through the business in more detail in a moment.

Turning to the financials. Our second quarter revenue was $8.6 million, an increase of 21% compared to the $7.1 million in the second quarter of 2025, an increase of 174% over the $3.1 million we reported in the first quarter. On gross profit, we reported $1.5 million or a gross margin of 17.8% compared to $1.4 million or 20.3% in the second quarter of '25. Both periods included $700,000 of noncash depreciation and intangible amortization and cost of revenues. Excluding these items, our adjusted non-GAAP gross margin was 26.2% compared to 29.6% in the prior year period.

We expect our margins to improve as our volumes continue to recover, reducing the impact of our fixed overhead on each unit sale and as our cost-reduction initiatives take further effect. Our operating expenses were $4.5 million compared to $5.9 million a year ago, which included a $1.4 million stock grant. Excluding that item, our operating expenses were essentially flat year-over-year. Our first half results absorbed a $1 million noncash provision for credit losses related to a single customer balance reserved in accordance with our policy, largely offset by reductions in our compensation, our facilities and our other G&A expenses. We maintain a positive relationship with that customer and continue to work toward collecting the balance.

Our net loss was $3.1 million or $0.14 per share compared to $4.3 million or $0.28 per share a year earlier. The quarter's net loss included a $1.1 million of noncash charges. Excluding these items, our non-GAAP net loss was $2 million compared to $1.8 million in the prior year quarter. For the 6 months, net loss was $9.9 million or $0.47 per share compared to $19.8 million or $1.30 per share, which included last year's $10.8 million goodwill impairment. We believe the improvement in both our GAAP and non-GAAP results, together with our 21% revenue growth over the prior year quarter reflects our initiatives to expand our opportunities, our disciplined cost structure and the largely fixed nature of our noncash charges and is indicative of our meaningful operating leverage as our revenue recovers. We remain debt-free with an unused $100 million line of credit, and we believe we are well positioned to fund operations and support our growth initiatives.

In closing, the second quarter marked a clear re-acceleration in our business. Our revenue grew sharply, our net loss narrowed. Our diversification continued to gain traction, and our cost structure remain disciplined. We believe the actions we are taking are positioning Beam Global for more stable and scalable growth as market conditions continue to evolve in our favor.

I will now turn the call over to Desmond to provide a business update.

Thank you, Lisa, and thank you to all of you for joining us today for this earnings call. At risk of being a little bit repetitive, I'm just going to go back over a couple of those numbers for you. So in the second quarter of 2026, we did return to growth at the top line. 174% increase in revenue over the prior quarter. Growth at the gross margin level with about a 30% improvement in gross margin over the prior quarter. That's 30 percentage points better gross margin and in the per quarter, and a simultaneous significant reduction in operating costs, about $0.5 million less in spending in the first half of this year than in the same period in 2025.

Now we're happy about this level of growth, but particularly because it's come from the very deliberate strategic diversifications that we've been focusing on for the last several quarters. Europe is now contributing more or less the same amount of revenue as the United States is. When we first created Beam Europe, I commented at the time that I thought that the contribution from that, the largest market in the world for our products would, at some point, outstrip revenue contributions from the United States. Not at the expense of growth in the United States accretively. Well, Europe is now producing as much revenue as in the United States. I suppose time will tell who will win the race. But of course, we will continue pushing for growth in both markets and also in the Middle East, where we believe we will see significant activity as soon -- as things settle down in the Gulf.

At any rate, Europe continues to generate significant revenues for us but even more importantly, very large opportunities and no matter which market comes out on top, Beam Global wins the race. I'll come back to the European opportunities in a few minutes. Our battery business is also making significant contributions with some of the most exciting technology and solutions that we've ever had. We generated revenues from our diverse set of new products during the quarter and also continue to bring in recurring revenue through innovative business models that we've uniquely developed. We continue to grow our intellectual property portfolio with two new patents being issued to us during the period, one in Europe for battery solutions and one in the United States for our innovative, robust and reliable energy generation technology. These new patents expand the moat around Beam Global and cement our competitive advantage in the most active markets and technologies of the day. The batteries that we are producing for drones, robotics, AI, data centers and weapon systems are state-of-the-art. And we continue to make extensive breakthroughs in that area of the business while protecting the intellectual property that we're developing with these patents.

While I'm on intellectual property, we just recently announced that a breakthrough battery technology, which we've developed for AI data centers was accepted for a presentation at AECON 2026 in Qatar from amongst 1,800 submissions. This new technology will allow us to provide large amounts of power very rapidly for certain vital data center applications. Interestingly, this is the technology that we developed for defense systems that have similar requirements in terms of rapid discharge capabilities. Batteries generally don't like doing that kind of stuff. It's a real testament to the progress of our battery scientists and engineers that they'd come up with a safe, efficient and effective way of doing this. Clearly, the intellectual property that we've developed is important enough to those people who understand these things that, as I said, selected us among 1,800 submissions for presentation at this very esteemed event. And we'll go on to actually demonstrate that technology or present that technology at the battery show in the United States this year as well.

There were weeks in the second quarter when we brought in over $0.5 million of orders for batteries for applications like drones. Now drone batteries are not very large. So you can imagine what this means in terms of orders. Also be clear that we don't make cheap commoditized off-the-shelf solutions, we make highly specialized, complex, reliable, energy dense and robust batteries in form factors, which actually suit drone manufacturers. While other companies try to get those manufacturers to build their drones around large squares and rectangles, we're uniquely able to create batteries and form factors, which allow the manufacturers to create specialized airframes without the burden of having to design around a cheap battery solution. Beyond that, because our batteries are more energy dense, the cost per stored energy is lower because of our robust and safe technologies around preventing thermal runaway and just generally managing battery cells better than the cheap options do, we're able to provide a highly engineered and complex solution.

In the long run, that cost of drone manufacturer is less. But most importantly, it allows them to execute on their missions with a bespoke solution rather than trying to make something off-the-shelf work. The additional layers of safety that our batteries deliver to these companies are also a very important factor in their decision-making process. You don't have to think very hard to consider how damaging it is for a drone operator to have one of their systems fail because of battery has caught fire or failed to deliver energy to the motors. That's an expensive error, not just in terms of replacing the drone itself, but also in reputational cost and potential risk on the ground. Our battery solutions are complex and highly safe, and so we significantly reduced the risk for the manufacturers and the operators.

Our Beam Flight Drone Recharging Platform, which is patented, does for drones what EV ARC does for electric vehicles. We're able to deploy charging for drones and locations without construction and without any connection to the electrical grid. This means that drones can find their missions and recharge without returning to an operator. But clearly, that's a very significant advantage in a contested environment where an enemy might follow a drone back to an operator while it needs to be recharged. But Beam fly, the drone can recharge without ever returning to the operator, thus denying the enemy, the opportunity to locate that operator. We also believe that beam flight will be very important in terms of the scaling of drone operations around industries like package delivery, where drones with limited range can touch down and refuel on route, thus extending their range and capabilities significantly.

It should be apparent that we are increasingly becoming a vital and vertically integrated platform for the drone industry through our ability to provide pieces of the puzzle which are absolutely vital to their success. High-quality, energy dense and safe batteries and innovative, robust and scalable means to recharge it on, so that they can be more effective on their missions. This is clearly a market with a great deal of growth ahead, and Beam Global is already playing a role in its success. I'm confident that we will be reporting more and more significant contributions to the drone industry as we continue to evolve.

But it's not only drones. We're also producing batteries for robotics, AI controlled devices and even wildfire detection. Obviously, wildfires have been in the news a lot recently. Our ability to provide safe and energy-dense batteries for devices, which can be deployed in remote locations and detect fires long before humans might do so is clearly very relevant at a time when wildfires seem to be growing in intensity and in their destructive nature. Fighting wildfires is an extremely expensive business, and the damage that they cause, of course, is very much more expensive. Providing solutions to an industry that can reduce or prevent wildfires is another excellent market vertical for us, and it fits very well with our existing technology and superb engineering progress.

Similarly, our ability to generate electricity and deliver it to our customers in a manner which is more reliable and robust than that, which you get from the utility grid is another highly current topic and one for which we're continuing to receive new patents and recognition. We've long been recognized for our almost unique ability to create products, which deliver rapidly deployed and highly scalable energy generation and storage infrastructure for the electrification of transportation. But the days of our being a single product, single country, single customer company are long over. We're now a vertically integrated platform and a platform for solutions serving the most exciting and vibrant technologies and industries of today.

Beam Global is focused on energy, mobility and intelligence. And we're producing patented products for those verticals and selling them to excellent customers globally. We've often been branded, as I said, as an electric vehicle charging company. But if you look at what we actually provide to the electrification of transportation, what you'll see is that we don't provide charging services or even the appliances, which charge the vehicles. What we provide are rapidly deployed, highly scalable, highly robust and very dependable sources of electrical energy for the electrification of transportation. We just do it in really innovative and patent-protected manners without construction without electrical work and without the requirement to extend the utility grid and of course, without vulnerability to black out some [indiscernible].

Much of what we've learned from manufacturing these products and deploying them in the harshest environments in the world, the hottest, the coldest, the wetest, the windiest places you can imagine, has informed the way we design our other energy infrastructure products and also played a role in advancing our battery technologies. Our off-group products are adding capacity at a time when data centers, AI, the electrification of industry, the electrification of transportation are making demands on the existing utility grid for which it was never intended. The EV industry is certainly out of favor with public markets at the moment, and yet it continues to drive significant amounts of revenue for us. That lack of market favor is primarily in the United States. In Europe and in the Middle East, we're seeing tremendous appetite for products like ours. But even here in the United States, we've seen encouraging new developments in the second quarter.

our GSA or General Services Administration contract, which is the contract that we have with the federal government, which is recently renewed by the way. And our source well procurement channel make it easy for customers like a City of Dallas, Stanis Lost County, the City of Long Beach and many others to make multiple evac acquisitions from us. In Massachusetts, we were the new community electric vehicle sharing company to provide charging infrastructure then. Most interestingly, with no unit cost for the energy. And if you think about that, if you're running a car sharing company, and you don't have a unit cost for the energy, that tremendously reduces your operating costs and makes it much more likely that you'll be successful in that endeavor. Beam Global is uniquely able to provide rapidly deployed and highly scalable infrastructure without the need for construction or electrical work and without ever producing a utility bill. And that capability becomes very much more exciting when you include our patented and unique off-grid autonomous wireless charging solution, which is absolutely ideal for autonomous vehicles.

Our ability to provide highly scalable infrastructure, which allows those autonomous vehicles to recharge without any human intervention and without any unit cost for the energy is, I believe, a fundamentally important shift for that burdening industry. I don't think anybody doubts anymore that autonomous vehicles are here to stay and that there will be a very significant growth in their use in the future. We're seeing companies like Waymo and others deploying in cities even as complex as London. They're going to need an awful lot of infrastructure to support that and a whole lot of electricity. We can provide the infrastructure in innovative ways, which are much less disruptive and expensive, and we can provide them with the electricity at no cost, no unit cost that is and no impact to the grid or requirement for capacity increases. Most importantly, because of our patented Wireless Charging Autonomous Solution, we're able to refuel their vehicles without them having to return somewhere to have a human being do that. That's real autonomy. And I think it will be really important to the industry. We're uniquely positioned to provide that solution, and we have it well patented. And I can assure you that our customers with existing autonomous vehicles are backing that theory up.

I've just returned from Europe, where I've been working out of our Beam Europe offices in Belgrade. While I was there, we made several business development trips to governments and commercial entities alike across the region. We have a growing installed base of EV ARC and other products in Europe now. And as we've learned repeatedly through our history, the best way to sell our products is to have them deployed for customers because when other people see them, they want them. Beyond that, the results delivered by those deployments that we've done in Spain, Montenegro, Romania, Hungary, Serbia and other places have been staggering. We're seeing more than 90% utilization rates and tremendous amounts of energy generated and delivered to electric vehicles in locations where it would have been either too expensive, too disruptive or even impossible to extend the utility grid. By the way, those are not always remote locations. We quite often find our ability to deploy in the middle of cities leaves them from the tremendously expensive and disruptive operations of digging up their streets and extending cabling to places where people want to charge their cars.

You may be aware that New York City is our largest municipal customer, and all of those systems are deployed within highly urbanized areas. In Europe, I met with government ministers and senior executives at very large corporations. And in every instance, I was encouraged to see that they already knew who we were, and in many cases, had already seen our products. We're now going through the procurement processes with our Beam Europe team. All of these countries and companies know that they're going to need a tremendous amount of infrastructure in the next decade. All of them are looking for ways to deploy quickly without disruption and in ways which will not negatively impact their utility grids. They're now seeing our providing precisely those solutions in the field. They're now seeing our happy customers who are delighted that they elected to use our solutions instead of going through the lengthy expensive, risky and onerous process of construction electrical work.

They're now seeing that it's possible to run large fleets of vehicles on nothing but locally generated and stored electricity without ever paying a utility bill and without being vulnerable to blackouts and brownouts and other lack of capacity related risks. We may have been ahead of our time for much of our existence, but our time certainly seems to be arriving in Europe. Again, this is not about providing EV chargers or EV charging services. We leave that to others. This is about providing highly robust and innovative electrical generation and electrical storage infrastructure in locations which are vital to the operations of these types of organizations. Anybody can buy a charger and get the services behind it. But getting that charger installed and getting electricity to it, it's a very burdensome project and full of risk. Our products solve for that risk and also provide sources of emergency power which are increasingly recognized as vital by the types of organizations we target.

Our products also provide extra capacity to overburden grids. And I can't find anybody in government or industry who doesn't recognize that, that's a serious risk and one that we are solving. These solutions again derived from the suite of patented technologies that we've developed and evolved into a platform which addresses energy, mobility and intelligence. And it's not just innovative technology that we're providing to the electrification of transportation. We've also introduced business models, which have appended the normal thinking and been extremely popular with our customers and their guests. Part of the reason that we're so well known in the Balkins is because of our highly visible deployment of Belgrade International Airport. As a deployment, which is a sponsorship funded, creating a profitable recurring revenue stream for us and providing electric vehicle charging at the airport without construction or disruption or a utility bill. It's making electric vehicle charging actually free to the visitors of their premium parking. And the best part about this model is that Globus insurance, that's the company who is sponsoring it is extremely happy with the results. Like any insurance company, they are good at data analysis and crunching numbers. The positive reactions that they're seeing, the cost per impression and all around positive impacts of this deployment have made them continually happy and increasingly happy with their investment and incline to renew their agreements with us. We also announced in the second quarter the expansion of our recurring revenue sponsorship model through further deployments in the region.

I've long believed that this can be an extremely successful model for us. It creates a profitable recurring revenue stream, and it provides a mechanism for us to deploy larger volumes of our products to customers who do not provide the capital for the infrastructure. they see benefits to far more lucrative for them than simply supplying kilowatt ours. And again, we're expanding this business now. So we're proving it I'm coattail see many more such deployments in the future in Europe. And I think it's only a matter of time before American entities start to see that they can benefit more by spending their advertising and marketing dollars on this type of infrastructure deployment and the benefit that they receive from billboards or other more traditional advertising media. Let's face it, off-grid, renewably energized, free electric vehicle charging and energy security infrastructure is a hell of a lot more exciting than a billboard is. If you're looking to enhance your brand image, consumers are going to be a lot more impressed by you providing them free fuel than they would be by you putting up another billboard along the freeway.

Remember, these deployments are not targeted electric vehicle drivers. They're targeted to everyone who sees the striking attractive and high visible infrastructure which we deploy. Globus Insurance is not interested in the number of people who charge their electric vehicles on the branded systems, not solely anyway, although that is an impressive and growing number of people. They're much more interested in the 7 million people a year that transit the airport and walk past their heavily branded systems when exiting or entering. It's about creating highly visible and attractive infrastructure that enhances a corporation's brand image, dispensing electricity into electric vehicles as secondary and important. We're also continuing to see success in our smart cities infrastructure solution deployments. During the second quarter, we deployed these sorts of solutions in more than 30 cities across 5 countries.

The revenue from these deployments is, of course, important. But from a strategic growth point of view, expanding our footprint and getting more and more of our products in front of customers makes us more stable but also creates a platform from which we can sell our other solutions. We've already seen this working. Much of the revenue that we're now generating is coming from customers for whom we've deployed products before and often quite different products from those that were more recently selling to them. Our strategy of creating a vertically integrated platform, producing unique and intellectual property protected products for energy, mobility and intelligence is paying off. While our products are diverse, they're all related and that they all have aspects of these three pillars. Most of the customers that we have for one or more of our products can be equally interested in the rest of our portfolio or at least be very clear on who in their organization would be.

Vertical integration is helping us control costs and create further barriers to entry for the competition. For example, I'm not aware of anybody in our industry who creates their own batteries. I'm not aware of anybody in the drone industry that makes batteries and charging infrastructure products, which we're able to generate and store their own energy and be deployed anywhere. I'm not aware of anybody in the smart cities infrastructure industry who has so much experience around the electrification of mobility as we do. And the electrification of mobility is going to be a massive essential pillar in the deployment of future smart cities. I'm not aware of anybody in any of the industries that we serve who is able to deploy rapidly scale autonomous wireless infrastructure for the autonomous vehicles that are coming and in fact, already here. Autonomous vehicles are certainly going to play a very major role in the future of mobility, and we have a unique and patented and tried and tested solution, which is paradigm shifting for them.

In the second quarter, we demonstrated our product platform to make it in the Emirates event, which took place in Abu Dhabi. Even during a war, when there's tremendous amount of uncertainty in that region, this event was very well attended. And interesting, at least from my point of view, any reduction in attendees was at the consumer level, which we don't really focus on, while corporate and government leaders were there in abundance. We were extremely busy during the several days that we were there, meeting with the leaders of law enforcement, military, government, energy and transportation and oil and gas and many others from across the Middle East. The unique attributes of our products were not lost on this audience, and our Beam Middle East team is now following up with senior decision makers in a region that has an abundance of sunshine, an abundance of cash and a powerful ambition to be technology leaders, particularly in the fields of mobility and smart cities infrastructure.

We actually sold one of our demonstration units right there and then at the show. It's now deployed and providing charging in Abu Dhabi. The disruption in the Middle East has certainly gone on longer than I think any of us anticipated. Nobody can pretend that business and investments are advancing at the same pace as they were before the war. However, there's a great deal of confidence that this war will come to an end eventually, whatever the outcome. And that when it does, the entire Gulf region will return to an aggressive investment posture. Beam Middle East, with our highly influential joint venture partner, the Platinum Group is in the perfect position to take advantage of that return to investment. We are continuing to advance opportunities and relationships, and I continue to remain confident that when there's an end to the hostilities and a return to something like normality over there, we will reap the fruits of these efforts.

Beam Global is now truly a global technology platform company, providing energy generation, storage and security to vital new industries like AI data centers, drones, robotics and new and innovative forms of mobility. We're being increasingly recognized for the value of our intellectual property and our ability to provide technology solutions that are vital and add a great deal of value to our customers. Our centers of excellence in the Western United States, the Midwest, Europe and the Middle East, place us firmly where the action is with a product platform, which could not be more relevant for the fastest-growing industries and markets of today. We're doing all of this while retaining our tremendous discipline with cash and equity. We still have a far lower number of shares outstanding than any of our newer peers, 5 to 10x less and most of the companies that we're often bundled with, incorrectly, I must add.

We still have no debt and a $100 million line of credit, which remains untapped and is dry powder for us in the event that we receive the very large orders, which we anticipate and which we continue to work on. I mentioned at the top of the call that we've also significantly reduced our operating costs about $0.5 million in operating cost reduction in the first half from the same period prior year. A big and important step in that direction has been our moving our manufacturing facilities from San Diego, California, where it's incredibly expensive and impressive from a regulatory point of view to operate the type of manufacturing that our business requires. Now we're in Yuma, Arizona, where more or less exactly the opposite conditions exist. We announced in the quarter that we'll save just under $3 million in lease payments alone as a result of this move.

Beyond that, labor savings, compliance savings, tax savings and savings on just about every aspect of our business will be realized as a result of this move. You're now looking at Beam Global, which has significantly expanded its presence in its technology portfolio and is generating revenues from those new technologies and new geographic locations in a way that we have not previously. You're looking at Beam Global, which grew revenues 174% quarter-over-quarter. You're looking at Beam Global that improved gross margins by 30% over quarter -- quarter-over-quarter and a Beam Global that significantly reduced operating costs while delivering highly relevant and well patented products to some of the most highly sought-after customers in the world. If you're looking at a Beam Global that's increasingly becoming a technology platform for drones with our drone battery solutions and recharging solutions. I fully intend that we will continue to increase our presence in that industry and the role that we play in it.

You're looking at a Beam Global app for the moment at least, is stuck in a valuation with a bunch of EV charging stocks. Yes, we don't provide EV charging. We provide highly robust and secure energy generation and storage products, which, amongst other things, make EV charging work in more innovative ways than anybody else that I know of. We intend to break out of that route because the value of our products and technologies is undeniable. Our ambition to grow the business is matched only by our discipline in how we do it. And our history is one of proving again and again that we have the right products and the right stuff to build an incredible growth engine for our employees, our customers and above all, our shareholders.

Thank you for your time and attention. And now I'll hand the call back to the operator and take any questions that you may have.

[Operator Instructions] The first question comes from Craig Irwin with ROTH Capital Partners.

Desmond, I was hoping you could speak maybe a little bit more about the order book. You have saved some good progress there, particularly around Europe, the Middle East and your drone-related products in North America. Can you maybe just unpack for us the areas of highest growth in the order book this last quarter. And are you seeing the trends that you play that have played out in your revenue as far as the strong quarter that you just booked. You've seen those same trends continue in the and in the overall revenue generation in the current quarter?

Yes. So we've seen increase in orders across the board. But I must say the battery and energy storage business is certainly standing at least from a percentage point of view, albeit coming from a lower base in the first place. But you're right that the -- particularly the stuff that we're doing for some of these defense applications, drones, those sorts of things are -- they're playing an increasingly important role for us, and we are playing an increasingly important role for them. And as I said, a couple of times during my comments. I think you should anticipate that you're going to see us getting a lot more involved in those industries because it just turns out that the platform that we have created over the last several years has just positioned us very well, and the timing is very good for us now to take advantage of everything that we've learned creating these energy storage solution, deploy them in very harsh environments, creating these form factors, which are unusual and difficult to reproduce for most people in the industry. I think you might remember, I think it was a quarter ago or something that we announced that we were developing batteries for a company called [indiscernible] that makes an underwater drone where real estate and silence and heat and, I think, terribly important. And they just don't know of anybody else who can do what we can do. And that is also true of some of the very high energy density, high energy release battery solutions that we're doing for weapon systems. And now advancing into the data center market. So order book is telling us that we're shooting at the right targets. Our order book is also telling us that the investments that we made in international expansion were absolutely the right thing to do. I got a lot of flak when I raised money to make the acquisitions to get us into Europe. Good God, hindsight now, that was absolutely the perfect thing to do. Open massive markets to us, enabled us to get into the Middle East, and we're -- the types of orders that we're getting there for products across the board show us that, that was the right thing to do. So I'm enthusiastic about this. I think we're definitely shooting at the right targets and the order book is backing that up.

I also wanted to ask about the gross margin progress. So this, again, was another healthy gross margin quarter. And there's a little bit of blue sky between where you are now and what your longer-term gross margin targets are. Can you maybe discuss the margins on some of these new business opportunities, particularly in Europe, I know that the EV market was just absolutely brutal as far as competition. And in defense markets and others, the customers want their suppliers to make money. They're not there to put you out of business. Can you maybe just give us a little bit of detail on margins and the expected margins from your current book of business?

Yes. So you're absolutely right that there's still a big gap between where we are and where we want to be. A good deal of that has to do with volume. For instance, the major element of the pickup that we saw between the first quarter and the second quarter simply producing a lot more product and getting it out of the door and overcoming our fixed overhead allocations. We've got a lot further to go there. As you see our non-GAAP margins 26%, 27% right now. And we say non-GAAP, all that is doing, it's GAAP except that we're reversing out the noncash contributions. But unit economics are way better than that. And so that tells us that we've got a lot of ground to gain in gross margin without changing anything else except increasing volume. And obviously, we're working very hard towards that. But there is still a lot of opportunity for cost reduction, even beyond just increased volume. And the good news is, particularly around things that we're doing around batteries and in the drone industry and other areas like that, we're -- because we do difficult stuff that other people can't do or at least the majority cannot -- are not doing. I've always been a fan of margin expertise, and that's where we are. We don't make commodity products. We make products which are difficult for other people to make and then we make them well and make them in a really robust manner. So I have often said that I think this is a 50% gross margin business. We're halfway there. When you back out the noncash items, and we're way more than halfway there when you look at unit economics. Unit economics on some of our more expensive products as much as 40% gross margin now. That's an important metric because once you get enough volume to overcome the fixed over allocations, that 40% gross margin becomes what we end up reporting. So we're on track. I'm not -- am I happy? No. Will I ever -- you've known me a lot of years, Craig, you've never known I'd be happy with anything, but we're moving in the right direction. And I think the team is doing a great job. Volume will deliver a great deal of this and then continuing to do the difficult things that other people can't do. Your last point about the competitive environment in Europe around EVs. So two things there. First of all, EV sales in Europe, up 35% year-over-year. Anyone who thinks the EV is dead is just completely missing the mark. We're in an anomalous period in the United States right now, which is going to come to an end with certainty. And in the rest of the world, EV sales are growing very dramatically. I was in Norway recently, 95% of new vehicle registrations, electric. I was in the Netherlands. 65% of new vehicle registrations, electric. You drive around streets in Norway in the Netherlands, you don't see any bi-electric cars. So it's absolutely happening. And so -- but your point is absolutely correct that it's very competitive there. But it's not our products. Remember, we're not in the EV charging business. We don't make EV chargers, highly impressive business. We don't offer EV charging services is a highly competitive business. We make very hard to manufacture with full of intellectual property, energy generation and storage systems which provide the power for other people's low-margin EV chargers, but we have really no competition in that space. We're operating in many tenders now. We -- our products are in many tenders, but of course, we hope to win. Europe selling over there are slightly different. You end up in these tender vehicles, and we're in a lot of them now, which is part of the reason we feel so bullish about the future in Europe. And we're in them alone because there simply isn't another product out there yet, which can compete with us. And again, we have very good patents and intellectual property protection, and we intend to defend those vigorously.

Okay. And then last question, if I may. You're clearly shooting at the right targets now. My question is, are you shooting at any elements? Is there anything that can make a dramatic impact on your P&L over the course of the next year that we could potentially see booked within the next couple of quarters.

Well, again, you've known me a long time. And the fact is, the answer to your question is, yes, I am. I can't obviously go into any details around all those things. And the thing about shooting elephants is oddly enough, even though they're big targets. Sometimes you have to shoot at quite a lot of them to bring one down. But I've had a history of doing what I said I was going to do over the years, sometimes it takes me longer and we have had a very hard time. There's no question about that. The reduction in in acquisition from government entities of our products after we basically wound up a federal selling machine it's been very tough on us. The boy, are we coming out of the fire quickly. But there's -- honestly, Craig, the honest best answer I give you is there's never a time when I am not trying to bring down something which is going to be fundamentally shift for this company. And I got of energy, and I have a lot of passion for the business. And I'm not alone. There are many other members on our team now, senior members and others alike who are shooting at very large targets, single signature away from doing something which completely changed our whole trajectory, can never guarantee we're going to get there and even less win. But we do have the right products, the right industry, shooting at the right targets, and again, a history of performing. So I feel personally, my personal view, I have a high degree of certainty that we will get there, but I do have to caveat that by saying that's my personal point of view.

Well, congratulations on the significant movement this quarter.

Thanks very much, Craig.

The next question comes from Tate Sullivan with Maxim Group.

And you ended your prepared remarks with a mention of the -- your intention to actively participate in the drone and robotic markets. Can you comment on your competitive advantages with your customized battery in those markets? And are competitors? I think you hinted out less flexible in general with their solutions than your battery business.

Yes. I think -- I mean, look, it's -- you can't have a drone if you have a power source for it. And we do two things really cleverly. We have a way of recharging them without human interaction and in remote locations. And again, remember, when I say remote location, I'm not talking necessarily about the middle of a national park or on a contested battlefield. Sometimes that's just a rooftop in the middle of Los Angeles or something like that. So we've got that piece of it. And yes, our ability to create these highly energy dense, very safe and bespoke form factored energy storage solutions is a major leg up for us. But there's another part of it too, which I think is really interesting. If you look at all of our existing customers, yes, Army still our largest customer, Marine Corps in the top 10, laws of enforcement, border patrol, European militaries and all those sort of things. You can see where we are positioned to where we're kind of a center of something here. And they are certainly very aggressively looking towards drones and robotics to improve their operations one way or another, and we are very well positioned for that. And so beyond that, again, everything that we've learned over the last decade or so of deploying infrastructure in very tough environments, creating energy storage solutions for very tough environments and marrying that with our existing customer base, I think, puts us in a really, really interesting place where this is concerned, and I do intend to capitalize on that to the extent that I can.

And then can you -- you got comments on the wireless charging opportunity, and certainly with more autonomous vehicles. But can you remind me of the scope of your existing wireless charging pens? Is it integrating the wireless charging pad with your EV art design? Do you have some patents on the wireless charging itself can go on to [ deal ] there, please?

Yes. So you're absolutely right. We will remain relatively agnostic on the charging interface itself, but just as we have always done with every other type of EV charger. That was a very deliberate and conscious decision on our part, recognizing what competitive blood bath that was going to be and also how rapidly things would change. What's really important about what we can do is our ability to deploy wireless charging rapidly at scale and without construction or electoral work and do it in a way where we can disperse it. If you think about a city environment, where, let's say, a robo taxi is operating. We can put charging no more than 2 minutes away from every drop off or pick up point that a city does, and we can do it without construction electrical work, impact to the grid or the tremendously high cost of electricity and infrastructure that are required when you bring all of those robo taxis back to a central location, plug them into very high-speed charging and have human beings do that. We can replace that entire model. You don't need super fast charging, which damages the vehicles. You don't need superfast sharing, which is incredibly expensive. You don't need to be incredibly expensive electricity burden with demand charges and all these other things. In fact, you can operate your fleet on zero unit cost for energy without construction, without electrical work, without human beings. And the wireless charting solution that we have, we talk a lot about robo taxi because that's what gets the press. But it's also incredibly interesting for drayage, logistics, material rehandling for drones for robotics and for all sorts of other equipment as well. And our ability to deploy in the very robust and dynamic way that we can is the major differentiator for us. And again, I'm not aware of anybody in the world today who can match us, and we have good intellectual property protection over those patents.

And last for me, on the -- since you did the San Diego transition of the lease transition at the end of the quarter, should we forecast any sort of costs in this current quarter related to moving the manufacturing to Arizona. And I mean, do you have mostly hourly workers in San Diego, any equipment moving costs for those kind of costs?

Yes. So obviously, there were some costs related to the move, but we did it like Beam does everything. We didn't spend a dollar or dime or a penny, where we didn't need to. We self performed a great deal of it because actually nobody is better qualified than our own people to move our machines and equipment and that sort of stuff around. So there is some cost related to that. But the real savings kick in basically moving forward from here, tremendous reductions, as I said, in rent, tremendous labor, compliance and all the other costs, literally $1 goes twice as far in Yuma, Arizona as it does in San Diego for just about everything that we do. And as far as our team is concerned, what's been fantastic about that is that everyone who we wanted has moved, and they're thrilled to go with it. So we're not going to have to go over there and start from scratch. We'll be taking the same equipment, the same tooling, same everything and even the same key people will be moving over there. And then as we do expand our labor force in Yuma, which, of course, we expect to, the typical labor rates that we'll be paying are about 3/4. Just hourly and the salaries, about 3/4 face value of what we pay in San Diego with. And then when you burden them with all the other costs that come along with that, much less expensive again for us. By the way, at time -- just to round out that, obviously, you can imagine that from our point of view, at a time when we're really aggressively getting back into growth and producing a lot more products, this idea of moving to a place where we just every day have much lower operating costs and at the same time, expanding revenue and margins it's very important for us, and I'm really enthusiastic about it.

Before to the next question. I just want to say for everybody to listen to the call. Remember, San Diego is only one of our facilities, the manufacturing move to Yuma. We also have factory facility in Chicago, where we make our batteries. And we have two factories, one in Belgrade and one in [indiscernible] Serbia, very much larger. We own all the land and building there. We have no lease liability there. What we have is an asset, which, while it depreciates on the balance sheet is, in fact, getting more valuable every day to the company. And I just as we expand further into these markets, the drones, robotics and things like that, I want everybody to understand, we have tremendous manufacturing capacity here with human beings have the training, electromechanical, structural and everything else like that, that can easily be transferred to these industries. So that's another reason that we're so bullish about that, that we've created this platform of technology now. That we are now using to address these exciting areas is because our people are -- have the capabilities and even most in many instances, the equipment and tooling to actually perform tasks in these new verticals that we previously have not been addressing. Sorry, I just wanted to make sure that we clear on that, and I'll go back to the next question, please.

The next question comes from Ryan Flint with B. Riley Securities.

This is Sandal on behalf of Ryan. I start on the batteries. So you mentioned that more than $0.5 million in drone and robotics orders in a single week. Can you give us a sense of where that business sits today in terms of revenue? And how -- what does the pipeline look like from here? And on the data center opportunity, is that a 2027 event, or we are further out than that?

Yes. So we don't segment the business owner. So I can't break out revenues per segment. we speak in loose terms about geographic revenue breakouts, but I have to be really careful on this because it's an accounting rule that we were on. So I can't give you the actual contributions from any of these groups. But I can tell you it's growing, and it's growing in the way that I want it to do with very, very high-quality sales and very high-quality customers. As to your question about the data center opportunity, I don't know. Obviously, every day we're reading and seeing about the power problems -- power crunch problems. Most of the time, people talk about utility-scale batteries for data centers. But what's being missed, and this is what our team is so cleverly, I think, identified. And again, we've got industry backing it up. It's not our opinion, is the fact that actually the energy requirements are not just about producing utility-scale energy for these things, but it's also about producing very large burst of energy, sometimes for very short periods of time. This is particularly true where AI is concerned, rather than just normal data centers because of the way those the AI data centers operate. They get these tremendous requirements for very large sources in power for very short periods of time. And as I said in my remarks, batteries don't like doing that. You have to really do a lot of good science and engineering to create battery solutions that are able to provide for that. And just serendipitously, we spent a lot of time developing that type of prowess for weapon systems, which require the same type of capabilities. And so the answer to your question is I don't know, but I'm pretty clear that it's going to be a very large opportunity for us, I believe. And we were, again, like a lot of other things we do uniquely positioned to take advantage of it.

And then on the recurring revenue, EV ARC deployments in Europe, the sponsorship funded rental in Serbia and Spain. So how big that -- how big can that model get? And does it change the margin profile?

Yes, it does. It's -- I mean, it's -- we expect it to be a highly profitable because it's a recurring revenue model that doesn't involve us selling the units they remain on our balance sheet. And the -- what we're not pricing that's based on electricity or anything else as mundane as that. What we're doing is we're competing with other forms of outdoor media, and it turns out that we're a very attractive solution for that. And so we expect that -- I'll get in trouble for this comment because people have been hearing me talking about the sponsorship model for years. And I've always been bullish about it. The difference between now and then is we're actually doing it now. We're pulling it off now, and we're seeing it scaling up. And so I -- honestly, I don't know what the potential for it is, but I think it could be very large. The world is going to need an awful lot of charging infrastructure deployed. They're going to need rapidly deployed charting infrastructure that's off grid. We have a unique solution for that. And then -- and our ability to find ways of paying for that which don't involve capital expenditure and don't involve people paying per kilowatt, which is a model, which I've got to say, I can't figure I make that work in my own head. This is a much better way of doing this. As I've often said before, charging from our point of view for charging cars is like try and charge for ketchup in a stake restaurant. I think we've uncovered the stake. We're going to give the ketchup away for free, and I believe that there's a very large opportunity. And it's an important recurring revenue, high margin opportunity for us as well. And of course, that's no business wants to turn them back on that.

Understood. And just last one on the Middle East front. Are you seeing any progress in terms of new orders or any conversations progressing?

Yes. Without a doubt. But I don't want to create any wrong questions here. The simple fact of the matter is people are feeling. At least in my experience, people are feeling pretty uncertain there at the moment. It's not surprising. The situation is changing daily. One minute, we've got an agreement, and where there's peace. The next minute, we're going to flatten the whole area and turn into a parking lot. None of us know what's going to happen tomorrow in that region. However, the things I said about it's sunshine rich, cash-rich and incredibly aggressive about moving to about new mobility models. I mean a lot of the things that we're talking about here in the U.S., autonomous vehicles, EV toll taxes, those sort of things, they're already actually using them in Abu Dhabi where our headquarters are. So it's a real shame. Timing has been a polling for us. I could never imagine that there's going to happen when we started Beam in Middle East in the third quarter of last year. Shame on me, I suppose, I don't know. But I'm confident this is -- it's a region that's not going to go away. This will come to an end. I don't think it's in anybody's interest to prolong it. Well, certainly not in ours, meaning the U.S'. And so I think it does come to an end. And when it does, as I said in my comments, we're going to be very well positioned to take advantage of that. Remember, this is a region that has publicly disclosed that they intend to spend $1 trillion on sustainable infrastructure, much of it focused on mobility in the next decade. And we have solutions which are actually ideally suited for the marketplace and a very, very good set up there with our relationship with the Platinum Group. When we were make it in the Emirates, I couldn't believe the quality of the meetings that we had, not some ranking officer in the police department, the police chief, not some lower officer in the military, but general-level people, not on lower office -- government minister, but top ministers coming to us. And why? Because they were being brought to us by our partners at the Platinum Group, who are incredibly influential there. That was always the role the role was designed to be a joint venture. We're operationally and product-wise and everything we control the organization completely. Their role is always to help us smooth over rough edges and bring us these types of opportunities and introductions. And I have to tell you, they earn their money. I'm very happy to be partnered with, and it worked very well for us. We just need this bloody war to come to an end and then we can get back to work over there.

Congratulations on the quarter.

Thank you very much.

We're coming to the end of our time, but I'm prepared to take -- I'll take another -- I guess, one more question here.

The next question comes from Brandon Brickman with Individual Investor.

Desmond, I appreciate everything you've shared about the quarter. One question I ask you to [indiscernible] real quick. But just looking at your manufacturing around the world, you manufacture here in the U.S., over in Europe. Segment it, if you could, but if you can't, I understand. I'm just curious, with all the facilities you have, what is the maximum out of revenue roughly do you think you could produce worldwide? And if you can break it down by continent?

I'm hesitant to throw that number out there because I'm going to get flat for it, but it's very significant. We have never come close to maxing out our facility in San Diego. We were capable of producing revenues in the hundreds, not the tens of millions of dollars across globally. And we've never come close to maxing our capabilities even in that facility. Our Yuma facility will be as capable of not mortal. And the greeting about these facility is that we intend to in-source a good deal of stuff that we have been outsourcing in San Diego. A great example of that coatings, sandblasting and painting, expensive, disruptive and something that we've been outsourcing in San Diego, we will, in the future, be in-sourcing that in Yuma. And that will further improve our gross margins and reduce risk and friction in terms of running the business. Now that's the San Diego, Yuma facility. We have another 30,000 square feet in Chicago for batteries and for other types of devices, which, as I've mentioned, our people have the skill sets to start getting involved in manufacturing some other very interesting things, which I intend to pursue. But in Serbia, we're 5x again bigger than that, under roof, 250,000 square foot under roof in Serbia and then another 6 acres upon which we can expand. And remember, we own the land, we own the buildings. We own everything over there. So we don't need anybody's permission to do anything and we have an incredibly friendly government there. So in terms of our expansion. So it's certainly not hyperbole to say that we can get to $1 billion in revenue with our existing facilities. But again, I want to be a little careful with that because people smear when I say things like that, and the way that people always smear when you talk about positive things and big plans. We've got loads of room for expansion and not just with our existing products with other interesting things that we intend to do as well. And the best part about that is with very little capital required to do it. And that's hurt us because we've had a cost center historically, which has been higher than we've needed for the revenue levels we're at, but it will pay us dividends when we do get into the much higher level revenues, and we don't need to expand a great deal of capital to execute on the growth.

Great quarter.

Thank you, Brandon.

This concludes the question-and-answer session. I would like to turn the conference back over to Desmond Wheatley for any closing line. Please go ahead.

Okay. Thanks, everybody, for excellent questions. Thanks for your attention and the time on this call right now. And as always, thanks for for caring and supporting this company. We're definitely showing at the right targets. We're aggressively growing into some very interesting spaces. Stay tuned. We're going to have more to talk to you about. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Beam Global First Quarter 2026 Operating Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Ms. Lisa Potok, Chief Financial Officer. Please go ahead, ma'am.

Hi. Good afternoon, and thank you for participating in Beam Global's First Quarter 2026 Operating Results Conference Call. We appreciate you joining us today. Desmond Wheatley, President, CEO and Chairman of Beam Global is joining me by phone. Desmond will be giving his thoughts on 2026 and providing an update on recent activities at Beam Global, followed by a question-and-answer session.

But first, I'd like to remind you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports with the SEC.

The content of this call contains time-sensitive information that is accurate only as of today, May 15, 2026. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

I'm going to go ahead and start with a couple a few key highlights. Our backlog grew 50% during the quarter from $6 million at December 31 of '25 to $9 million at March 31 of '26, with more than half attributable to the smart city applications, approximately 1/3 to energy storage and the balance to the EBR and related products. And perhaps most importantly, our Q2 2026 revenue through today has already exceeded our first quarter results, a clear signal that the business is accelerating.

Operationally, the quarter was active. We made our first EV Arc sale in Abu Dhabi for public EV charging. We launched a patented autonomous wireless charging system for autonomous vehicles, we were selected to supply patented battery systems for drones, supporting life-saving aerial operations globally. Beam Europe achieved a record $1.7 million in smart city infrastructure orders in a single week across Romania, Croatia, Montenegro, Serbia and Italy, approximately doubling the strongest weekly order volume achieved in 2025. And we secured the largest residential EVR orders to date in New York. We continue to operate with no debt, no going concern and an unused $100 million line of credit.

Turning to the financials. Our first quarter revenue was $3.1 million, a decrease of 51% compared to $6.3 million in Q1 of '25. The decline reflects order timing with 2 large orders moving out of the quarter, a seasonally slow period for our European operations and the ongoing reduction in federal government EV spending. Our international customers comprised 51% of revenues in Q1 of '26 versus 25% in Q1 of '25, and revenues from nongovernment commercial entities increased 48% year-over-year to represent 78% of our total revenues, continuing the diversification trend we have been executing against.

On gross profit, we reported a gross loss of $0.4 million or negative 13.3% compared to a gross profit of $0.5 million or 7.9% in Q1 of '25. Our gross results included $0.7 million of noncash depreciation and intangible amortization and cost of revenues. Excluding these items, the adjusted non-GAAP gross margin was 9.4%, compared to 20.6% in the prior year period. The decline reflects the impact of our fixed overhead allocations against the lower product volume and is not indicative of deterioration in our underlying unit economics, which continues to improve.

Our operating expenses were $6.3 million compared to $16 million in Q1 of '25. The prior period includes a noncash goodwill impairment charge of $10.8 million, not represented this quarter. Excluding that charge, our operating expenses increased approximately $1 million year-over-year. This is primarily due to a $1.8 million noncash provision for credit losses related to a single customer balance that was reserved in accordance with our policy. When we remove these one-timers, our reductions in compensate -- the reduction is related to compensation, facilities and other G&A expenses, which partially offset the increase.

Our net loss was $6.9 million compared to $15.5 million in Q1 of '25. The Q1 of '26 net loss includes the $3.5 million of noncash charges. Excluding these items, the non-GAAP net loss was $3.7 million compared to $3 million in Q1 of '25. We believe the relative consistency of our non-GAAP net loss across both periods despite a 51% decline in revenue reflects our disciplined cost structure and is indicative of our meaningful operating leverage as revenue recovers.

On liquidity, our working capital decreased $2.7 million to $6.2 million at March 31 of '26. Excluding the $1.8 million noncash credit loss provision, the underlying operational decrease was approximately $0.9 million. Our cash increased $1 million during the quarter. We remain debt-free, and we have an unused $100 million credit facility. And we believe we are well positioned to fund operations.

In closing, our Q1 was a challenging quarter on revenue.

Desmond, do you want to go ahead let me go ahead and hand it over to Desmond.

Okay. And thanks all of you for tuning into this first quarter. Lisa, maybe you could mute your phone just while you choke to death here on the other one. Yes. Thanks, everybody, for tuning into the call. It was only about a month ago that we had the earnings call for the release of our 10-K. And during that call, I went through a pretty comprehensive update on the happenings of 2025 in the first quarter of 2026, both operationally and financially. So I'm going to keep my comments fairly brief today and leave plenty of time for any questions that you may have.

Well, as Lisa said, our first quarter revenues in 2026 were not what we'd like them to have been, they are in no way an indication of an underlying or fundamental weakness in the business or our strategic plan. First quarter has historically always been a slow quarter for us, and that's particularly true of the contributions from our Beam Europe offices, where the Orthodox Christmas and New Year pushes well into January. And whether and other considerations tend to slow down the deployment of the traditional infrastructure products, which we manufacture and sell across Europe, like streetlights, traffic portals and other street furniture.

Coincidentally, and unfortunately, from a timing point of view, we also had 2 large deployments of EVAR systems pushed from the first quarter into the second, which have had an outsized impact on our Q1 revenues. At first, we haven't lost those orders, both good orders, and we expect to recognize the revenue from them. Also has to be said that the war in the Middle East has not helped our efforts because we were actually anticipating some material revenues to come in from our new operations being Middle East. But those, like everything else in the region, seems to have been put on hold while the authorities and decision-makers prioritize dealing with the immediate impact of the war.

I've just spent a significant amount of time on our bin Middle East offices and -- Well, I certainly did absorb a lack of momentum where all business dealings are concerned. It's also very clear that the United Arab Emirates and the Gulf region in general are determined to get through this conflict and come out on the other side stronger with even more aggressive plans for future growth. And in fact, we did actually make our first sale of EVAR for public charging in Abu Dhabi while it was there a couple of weeks ago. We've already got it deployed for some other reasons, but this was for public charging.

So while we didn't get the material contribution to revenues that we've been hoping for in the first quarter, we have managed to make some sales in the Middle East since that time. And I'll spend a few minutes on my time in the Middle East later in the call.

Back to our results. Like any manufacturing company with facilities across the world, we have fixed overhead costs, which do not reduce when the volumes of products, which we deliver reduce. Those costs like rent, insurance and other day-to-day operational costs associated with owning and maintaining our factories stay pretty much exactly the same, whether we do a small volume of products or a very large volume. The result of this as you've seen in the first quarter is that our gross profits can be negatively impacted by the allocation of fixed overhead across a smaller number of units produced and delivered to the customer. That explains the decline that you see in the gross profits, which we reported during the quarter. But that's a metric that works both ways.

As our sales volumes return to growth, and we certainly believe they will, the allocation of those fixed overheads becomes less and less burdensome. And in fact, we get a great deal of operating leverage coming from the fact that we do not need to invest in infrastructure to produce higher volumes of products, we're already set up to do that.

I consider that the most important metric from an operational point of view are our unit economics. And those, I'm happy to report -- continue to improve and are currently running at greater than 30% across our entire portfolio, with some products are doing much better than that. That's to say at the unit level, we're spending less and less money to produce an individual product, while our revenue numbers stay fixed or in some cases, have even increased. That, in turn, means that as our volumes increase and our overhead allocations are diluted over larger volumes of products, there was improved unit economics will return even better gross margins in the future. We've demonstrated this to some extent over the last couple of years. as you've seen improving gross margins when our volumes have been consistent or growing.

So while our revenues and gross margins declined during the first quarter, this is not part of a broader trend. I can say this with a high degree of confidence because again, as Lisa said, our contracted backlog was 50% higher at the first -- at the end of the first quarter than it was at the beginning, showing growth in sales. Furthermore, I can tell you that as of today, we've already generated the same amount of revenue in just half of the second quarter as we generated in all of the first. And we now have the second half of the second quarter to continue this trend of both which we demonstrated so material in the fourth quarter of 2025, which if you remember, was 50% higher than the previous quarter.

Also worth pointing out that we often generate more revenue late in any given quarter than we do at the beginning. So that's another metric to consider. Incidentally, the FCC is currently considering a move away from quarterly filing for companies like ours, believing, as I do that biannual reporting would be just as useful for the investment community and much less impactful and expensive for the reporting companies. We spend an enormous amount of time and money going through this quarterly reporting. had we already moved to biannual reporting. I'm pretty confident that we could report a first half of this year, which would not raise eyebrows for anything other than books.

Our sales and backlog numbers are increasing at a time when, as I've already mentioned in previous calls, we're responding to a complete cessation of orders of our electric vehicle charted products what was previously our largest customer, the U.S. federal government. And I think this is proof positive that our strategy of diversifying our product portfolio and also the geographic markets into which we're selling is working. Simply put, even absent what was previously our largest customer contributing to our revenues, we're returning to growth in sales and backlog. Revenue contribution from international customers were over half of our first quarter revenues, up from under quarter during the same period last year. That's a trend which I think we're going to see continuing and even growing as the year progresses. This shows that without a doubt, it was the right move for us to expand internationally through our acquisitions in Europe and also the joint venture, which we created in Abu Dhabi with the Platinum Group. The fact I can tell you that as of this moment, the largest opportunities that we are currently addressing are all coming from our international expansion.

Similarly, our efforts to expand our selling beyond federal, state and municipal government customers are continuing to bear fruit. Sales to nongovernment entities in the first quarter were actually up by almost 50% and now comprise 78% of our total revenues in the quarter. When you consider the -- just 2 years ago, almost all of our revenues came from government contracts and the majority is also from the federal government, you can see that our efforts to broaden our sales funnel have really paid off.

I'm particularly enthusiastic about the way our products are being used by new customers and in ways that we haven't previously seen. It's certainly a new thing for us to have our teams of battery engineers and scientists now perfecting battery solutions for top secret weapons and highly specialized drones and robots. We now have U.S. law enforcement using our Beam patrol product, which is a bundle of 4 electric motorcycles and are rapidly deployed off-grid charging products. Incidentally, this is a very popular solution in the Middle East. We recently presented this product to the Chief of Police of Dubai and a cadre of senior ranking officers. Our Beam Middle East team is now putting together a proposal at the request of that law enforcement agency.

We now have Beam bike solutions operating in North America, Europe and the Middle East. This product bundle, which comprises 12 Beam bike -- Beam branded electric bicycles, rapidly deployed and highly scalable charging infrastructure and an application for Android or iOS which controls the bikes and allows for billing, geolocation and all of other fantastic utility is also creating opportunity revenue for us, which we've never had before. I actually believe that this new opportunity will also increasingly provide a source of recurring and very profitable revenue.

Another good example of a new technology solution, which we've recently introduced in the market, is our patented wireless autonomous charging for autonomous vehicles. Autonomous vehicles has been around for a long time, but as with so many things, solving for the last 5% of true autonomy has probably taken as much time investment and work as the first 95%. But it looks as though we're there now. Millions of miles have been safely and successfully driven by autonomous vehicles on city streets across the world. And the level of mainstream user adoption has surprised even many of the so-called experts in the field. So while solving for that last 5% of autonomy used to be the biggest hurdle facing the industry, now not surprisingly, the biggest challenge faced by operators of fleets of autonomous vehicles is actually how to charge them.

It might seem a bit surprising that the developers of this futuristic and very challenging technology have so far settled for predictable and traditional methods to charge autonomous vehicles. At the moment, operators of fleets have all their vehicles come to a central location where a human being has to plug them in and try to charge them as quickly as possible so they can fleet as many vehicles as possible across a limited number of charging cables. This is inefficient very expensive and certainly not autonomous.

Beam Global's patented wireless off-grid charging technology allows an autonomous fleet operator to deploy charging throughout their service on so that an autonomous taxi might never be more than 2 minutes away from the nearest wireless EVA. Our research shows that we're able to keep autonomous taxis full throughout the day by simply having them charged for short periods of time between each right. This means that tax is no longer have to go back to a central location where there's an incredibly expensive and inefficient infrastructure waiting for them.

It also means that the infrastructure that they rely on to fill their vehicles is not vulnerable to centralized failures such as those that you get during a blackout or for some other reason, the power fails to that centralized charging depot. Finally, it means that we can provide about twice as many rides per vehicle as the current traditional taxi model provides in the markets we've studied. I think what that does to the cost and revenue model of those operators, and you'll quickly appreciate why we're so bullish on this opportunity.

This Ateam technology is a game changer. I'm not alone in thinking that the autonomous vehicle are going to be the next big thing in transportation. And a unique, simple and highly efficient way of charging these vehicles will, I believe, bring very significant opportunities for growth. And this is particularly true in the Middle East where the regulatory environment and general appetite for these sorts of new technologies is much more favorable for the rapid and scaled growth that we expect to see.

So it's clear that this geographic and product portfolio diversification and expansion has been crucial to us, not just surviving the EV slowdown in the United States. But actually, it's been enabled us to take advantage of a whole new set of fantastic opportunities for which our products and technologies are ideally suited. I've said before that I'm convinced that the United States will refer to the electrification of transportation, probably starting most aggressively at the federal level. And when it does, we'll be ready to take advantage of that returning opportunity too. What will be different next time is that it will come on top of and be accretive to all the other revenue and profit opportunities that we've created in its absence.

This level of diversification will not only create opportunities for more revenue and profits, but it will also insulate us the kind of swings that we've just witnessed in this quarter where 1 or 2 large sales moving right can have an outsized impact on our results. We're going to continue both of these diversification efforts as we evolve. And as usual, we're going to continue to do so with an extreme sense of financial discipline, just as we always have.

On the product side, you can see us continue to create new intellectual property. In the first quarter, we were granted patents, which are important to defending our position with some of the unique and very relevant technologies we produce. These patents, which were granted both in the United States and Europe, other products, which enable us to maximize off energy, off-grade energy generation in which we're increasingly discovering are so very important in diverse markets across the world.

We also received another patent for our battery portfolio, which, as I've said previously in this call, is now creating opportunities in generating revenue for us in high-growth military and commercial applications, not least of which are the diverse and highly specialized unmanned vehicles or drones for which we are developing bespoke, highly energy dense and safe battery pack solutions.

The drone market appears to still be in its infancy. It's growing very rapidly, and it's probably just a tiny fraction of what it's set to become. Beam Global is producing batteries for unmanned vehicles which operate in the air, on the ground and both on and under the surface of the sea. Combining those activities with what we expect to see in terms of opportunity generation through our Beam flight product, I think you should anticipate ever increasing contributions to our business from our focus on the drone market. One of the most impressive attributes of our product portfolio is its universal appeal anywhere I've traveled across the globe.

I've just returned from a 6-week business trip, which attribute to Europe, the Middle East and Africa. I visited London, Dubai, Abu Dhabi, Narobin Pena, Dar es Salaam in Tanzania, Zanzibar in Tanzania and Kigali in Rwanda before returning to the Middle East and then ending my trip in New York City. And those are all very diverse and different environments. And yet the enthusiasm and genuine need that I continue to discover for our products is universal. It's no product -- it's no secret that our products create a lot of value in New York City, where since 2015, they providing rapidly deployed off-grid electric vehicle charging and crucially vital backup power during grid failures caused by hurricanes or lack of grid capacity.

Well, in terms of the utility grid constraints, the requirement for uninterrupted robust and reliable electricity and the provision of mobility or universal requirements, at least across those markets, which I visited in the last couple of years.

While in East Africa, I met with senior government ministers officials from the United Nations, NGOs and commercial enterprises. Our ability to deploy transportation and energy infrastructure without going through construction or electrical work turns out to be just as important in East Africa as in New York City, although perhaps for somewhat different reasons and also for many of the same reasons.

Certainly, when talking to the United Nations about deploying capital to democratize access to electricity and transportation in the region, being global products' ability to provide that type of infrastructure without an ecosystem of service providers, officials and regulators and regulations who can draw these types of projects out and make them much more expensive for reasons both legal and illegal -- it's a real game changer. It was encouraging to see the UN and other NGOs becoming so excited when they realize how much impact our products could have without all of the usual hurdles, risk and never-ending processes.

An indication of how much excitement there was around Beam Global perhaps and the impact of our products can have in East Africa was the amount of mainstream national press coverage that my trip received. I was, in most cases, at the airport, even sometimes at 1:00 in the morning by the press who were eager to question me about our energy and mobility products. I also spent time in interviews both in-studio and on-location discussing the merits of our approach and the enthusiasm of both government and enterprise in East Africa for these types of solutions. And again, these were not sort of esoteric niche publications. I'm talking about mainstream national media.

Beam Global already has product deployed across broad swaths of particularly West Africa, as a result of our acquisition of what is now Beam Europe. That team in Serbia has a great deal of experience in deploying infrastructure across many nations in Africa. That experience will be essential and a significant differentiator for us as we start to deploy our portfolio of innovative energy and transportation solutions.

And I look forward to bringing in news of our first wins in Africa and also the fantastic good our products enable in environments where people have not previously had access to reliable and robust sources of electricity and even less so to affordable transportation. Just as there was never a universal adoption of landline telephones in Africa and yet now everyone has a mobile phone. So I believe there will never be universal adoption of internal combustion engine vehicles. I do, however, feel certain that the young and growing population on the African continent will have access to mobility and that all of it will be electric.

We intend to provide solutions to cater to that enormous opportunity for growth. Products like our Beam bike and Beam Petrol, in particular, absolute perfect fit as our energy storage and generation solutions.

I also think it's likely there will never be a mass and universal adoption of centralized utility grid like those to which we were used in the West. Africa will have an opportunity to leapfrog that outdated model and develop an energy infrastructure, which is highly disintegrated and dispersed. -- generating and storing electricity close to where it's used in a manner which is rapidly scalable and does not rely on vast centralized power stations and equally vast transmission and distribution infrastructure. That's a very last century approach to energy infrastructure.

And I firmly believe that the future will find in Africa, which has universal access to electricity, most of which comes from renewable sources, which are generated and stored close to the load.

Now, of course, I'm describing an energy future in Africa, which has made up products just like the ones that being global patents and manufacturers today. And I firmly believe that market where over 60% of the population is under 25 years old, will comprise a very significant opportunity for our future growth.

And we opened Beam Middle East not only because that market where there's already a commitment to spend over $1 trillion on sustainable energy infrastructure over the next decade or say, provides excellent opportunity for our expansion. But also because the location of the Beam Middle East headquarters provides an excellent access gateway to the African continent. There's already significant investment from the United Arab Emirates and into sub-Saharan Africa. And the politics, economics and geography of that region make it an excellent portal for us.

While on the subject of the Middle East, we've just exhibited alongside our partners, the Platinum Group at MITT or Make It in the Emirates. This is certainly one of the largest, if not the largest trade events in the Gulf States. We had a prominent and highly visible booth, and we also had real-world deployment of our EV arc and Beam bite products working at the event. This was an excellent opportunity to get in front of the most influential decision-makers and purchasers in the region.

It was also an opportunity for us to further test the validity of our relationship with the Platinum Group tiered by Haines, [indiscernible]. They certainly did not come at wanting and in fact, again and again demonstrated their ability to bring the most influential leaders in the region to the Beam Middle East booth. Fortunately, our products are so compelling and unique that once we're introduced to these types of influential people, we do not have much difficulty in keeping their attention. The fact is that while there were many fantastic solutions don't display at this massive event you would have been hard-pressed to find any which were more relevant and better suited to the gulf markets than those which being global presented.

As a result, even during a time when we were justifiably concerned that the war might make the event less of a success than in previous years. We were actually very encouraged by the volume of attendees, and particularly the volume and quality of those attendees who visited our location. High-ranking members of the government, the military, the police and industry, particularly the oil and gas industry, visited and spent meaningful amounts of time learning about our solutions. I can't go into details at this point, but oil and gas is now using our products in the Middle East as strange as that might send to you. I look forward to releasing more information about this as permitted by our very excellent and very, very large customer over there.

The BMT Middle East has a significant amount of follow-up work at prosecuting all of these opportunities. And if sales are the best possible metric to judge 1 of these events, and I believe they are then we were certainly not disappointed in that area. In fact, we actually sold 1 of the units that we had on display right there and then and deployed it for a customer the following day. such as the robust and dynamic nature of our products that we can demonstrate electricity and mobility infrastructure products at a trade show and then have those products operating in the field for a customer less than 24 hours after the event includes.

Now before I wrap up, I just want to come back to the financials for a moment or 2 and echo a couple of other things that Lisa started out with. During 2025, we had to take a significant noncash impairment of goodwill, which was reflected in our net loss. This impairment of goodwill was driven by accounting rules. -- not by any belief on our part that there's been any decline in the value of our acquisitions. On the country, it should be obvious from the comments I've made during this call that our acquisitions are performing well and contributing significantly to the most material opportunities for growth that we have ahead of us.

Now in the first quarter of 2026, we've taken another significant hit to the bottom line, again, driven by accounting rules rather than by what we actually believe is going on with the business. In this instance, we've reserved for a couple of million dollars worth of AR because the rules that actually tell us that that's what we need to do. But the fact is that we believe we will collect these monies, we have an excellent working relationship with a company to whom the AR is attributed. And in fact, I just met a day with them in New York this week looking at a whole host of new and material opportunities, which we hope to close together. This reserve has significantly impacted our bottom line and also our working capital. This is the impairment did last year, and that was purely driven by our share price. But in both cases, these are noncash items and not in my belief, truly reflective of what we're doing with the business. So I encourage you all to look at our financial performance absent these noncash impacts because it will give you a much better understanding for what's actually going on with the business and particularly where you're looking at the earnings per share, which are blown way out of proportion by these items.

We continue to be debt-free, except for a couple of vehicle leases and have sufficient cash and working capital to continue to execute on all of the opportunities that I've outlined during this call. Hence, no going concern.

As a measure of our financial discipline, we've managed to hold our net loss essentially flat even in the face of what I believe is an anomalous decline in revenue in the first quarter. We can only have done that through continuation of the rigorous discipline that we bring to all our financial activities. When our revenue cadence returns to growth, as I certainly expect it will, we believe that we'll see a significant improvement in both gross and net profitability, just as we have in the past.

Please remember that as I said at the beginning of this call, we've already generated the same amount of revenue in the first half of the second quarter that we did in all of the first quarter. So we have good reason to believe that we will return to growth this year, particularly in light of the fact that we very often get much more revenue in the second half of any given quarter than we do in the first.

So to sum up, while we are disappointed in the first quarter revenue number, which was largely driven by order timing in the war, we were nevertheless able to continue to create an environment and set foundations for significant growth throughout the rest of this year. We're delivering products for incredibly relevant segments of the economy, both in the United States and the rest of the world. The work that we're doing with drones and autonomous vehicles are setting us up for what I believe could be potentially catalytic change, while our diversified product portfolio and geographic expansion is laying the foundation for credible and sustainable growth with upside associated with each value proposition and downside protection against political or market volatility. I'm looking forward to future earnings calls this year in which I can relate more successes coming from each of the new verticals, which we've developed and many others.

For now though, I'll return the call to the operator and look forward to taking your questions. Thank you very much. Operator, over to you.

[Operator Instructions] And our first question for today will come from Tate Sullivan with the Maxim Group.

On the UAE, I think you said you had a UAE sale and delivery on the same day of the conference. Is that correct? And was it an EV what was the timing around that delivery?

Yes. So I want to start out by saying that, that is not actually the first deployment of our products in the region. I'm just not really able to go into detail on the other on the other deployment because of customer sensitivity so far. We don't believe that that's a situation that will persist because they're actually delighted with what we're doing. And I think we will be at some point in the future, able to discuss this -- but you are quite right. Yes, we had a customer who was so impressed by the product and whose need was urgent and bought the product right there essentially off the show and we deployed it rather than taking it back to a different location, we took it directly to customer location and deployed it. And it's -- what's interesting about that is it's actually for public EV charging.

We believe there's going to be a massive opportunity. More details on this on this customer coming up, but they are a significant and central player in public electric vehicle charging in the region. -- and they've got an awful lot of work to do. There's a really rapid increase in the deployment of electric vehicles last almost all Chinese in the region, but there's a heavy push towards electrification and they need a blockchain infrastructure. And our ability to solve for this customer in that location where they had some urgency to deploy literally within 24 hours at the end of the event was a record that none of them have seen before. and I think bodes very well for us as we continue to advance our sales there.

Do you have storage infrastructure? Do you have inventory available in the Middle East already with the joint venture partner SP570507878 Was that just related to the trade show?

No. We actually -- we had to rob another opportunity, which we believe will materialize. And we will -- we do -- we are able to ship quickly from our facilities and start at 4 weeks on the water from Serbia to get there. And so what we did is we approached the other opportunity, and we said, hey, listen, with your permission, we need to help this other customer out really quickly, and they gave us that permission and we have promised them that we would expedite shipping a further product for them from our Serbian facilities. And again, I can't go into detail on this thing either, but all I can tell us they said, "Okay, well, in that case, you need to ship a few more for us. So we agreed to do that.

Yes, it was a good. It was an excellent experience. And obviously, I mean, there's nothing like selling product directly to show, especially something like that. And then there's nothing also like being able to fulfill our customer requirement and with breathtaking speed that -- I mean, literally, they have a lot of experience deploying good-sized infrastructure where they have to go through all the pain of the permitting and planning and engineering and trenching and electrical work and all that sort of stuff. And we literally made their head spend that we were able to get them up and running in less than 24 hours from the receipt of the purchase order.

Your next question will come from Craig Irwin with ROTH Capital Partners.

It was nice to see the backlog come up so quickly in the first quarter. So congratulations there. I appreciate the really thorough commentary upfront. And one of the areas that I'm very interested in these days is the drone market, and I spent a week at the exponential Conference in Detroit, which is where most of the drone makers in the country gather to meet customers and regulators, et cetera. And you work with Race systems and then your other unnamed drone customer, are your only 2 publicly announced contracts? I assume that the customer engagement is also pretty substantial in that market as well. I met many companies there doing business with end customers that are off grid, everything from Safari game farm owners using drones to help stop poaching of endangered species through to people doing daily freed mapping of construction sites and obviously, oil and gas surveillance and security surveillance, many, many applications that are off-grid and you bring a credible solution. So can you maybe flush out for us what your engagement is with customers in the drone market. Do you see this as potentially additive to where you already have traction? And is there maybe another permutation of the EDR or your existing portfolio that would help you be super competitive in this market?

So that's a great question. I'm really sorry. I didn't get to see you actually that event. I hope to be there. But unfortunately, my travel in the Middle East and Africa preventing me from getting there on time. But look, you actually just brought up a couple of really interesting things. For example, the anti-poaching activities while I was in East Africa and well is in Kenya, I met with the Kenya Wildlife services? And it just so happens that they are desperate drone technologies to -- on that coaching, but also to do the census, the counting the numbers of the sort of the wild large game that's out there, it's 1 of the constant challenges is trying to figure out actually how many of these animals exist and where they are and what their needs and requirements are. So drones are going to play a very important role in that.

But I'll tell you what else is well, before I come off that, and yes, they need off-grid charging infrastructure just like our beam flight product to make that work because where they operate, they don't have electricity. They don't want to run generators. And there just isn't a better solution. So the answer to your question is, yes, we have a very viable, a very competitive solution for those types of things. And that's equally true in contested environments where you want to keep drones active in a mission in a contested environment, but you don't have infrastructure to support them. We have a game-changing product in Beam Flight to make that happen.

Additionally, we are also currently manufacturing batteries for one. You mentioned a couple of those instances. The drone market, as you are very aware, is highly secretive about certain aspects of things that they do. And so as a result, we don't get permission often from our drone customers to describe exactly what we're doing with them. But as I said in my comments, we're now in drones in the air on the land and on and under the sea, and we're at the very early stages of that. Our ability to make bespoke and highly energy dense batteries, which are form factor agnostic. So most owner operators don't want to carry around a big rectangle or a big heavy square, they want to try and fit energy storage into a form factor, which is more appealing to them. and we are uniquely -- to my knowledge, we are uniquely able to do that. And that's why we -- that's a big part of the reason we get selected by offer.

So we're at the very beginning of this, and I see it as a huge growth opportunities for us, particularly in light of the fact that we have American Bay batteries at a time when there's a huge amount of sensitivity around that. But I also want to come back to a couple of other things that you mentioned. It's not just about drones for us. It turns out that in Kenya, the Kenya Wildlife Services are also they have in common with everybody else who's involved in that space. The need for mobility solutions, which don't rely on liquid fuels and internal combustion engine vehicles. For the same reason, frankly, the U.S. Marine Corps doesn't want to rely on those any more expensive to get the fuel to a forward operating environment and lots of maintenance and risk associated with internal combustion and vehicles that just do not exist with batteries and electric motors.

And so one of the solutions that has got the most excitement there is our Beam petrol solution. You've all seen these incredibly brave people armed anti-poaching agents moving around on the Savannah trying to track down equally armed and dangerous cultures well, our ability to put them on to electric motorcycles as part of our Beam Patrol product and allow them to very rapidly and more or less silently get up on top of the bad guys it's just as important for those anti-coating guys, in fact, from it more so even than it is for the kind of law enforcement. As I mentioned, we presented this to the Dubai Police and the Abu Dhabi police department while we're there, and our teams are in the process of putting together a proposal for them right now because it's a perfect solution for them.

So I hope and I believe that you're going to see us not just increasing our growing penetration into those markets and playing a bigger and bigger role in the drone market. But I also think you're going to see us deploying a lot of other mobility solutions, electric motorcycles, electric bikes, off-road electric vehicles and those sorts of things to those types of environments where, again, liquid fuels are expensive. By the way, I can tell you that East Africa is having a real problem right now where fuel is concerned, the fuel prices are skyrocketing, there in ways that they're not here. They import most of their oil from the Middle East. None of it's getting to them because of the Strait of Hormuz.

And it's a really very, very serious problem. And Beam to the rescue, we showed up just at the perfect period of time where everyone is up my God, we can do all the stuff without relying on oil and using our own energy sources. So the timing has been very good for this. And it's a great question. And I want everybody to anticipate us doing a lot more within this drone market, but also with our other electric mobility solutions that don't require infrastructure or liquid fuels.

Well, Desmond in there, you mentioned fuel prices, right? And there's no coincidence that the used TV market in the U.S. was up about 40% as far as unit sales this last month. The U.S. consumers don't face fuel scarcity, but they face a much more expensive proposition when they go to file at their gas tanks. So we all know that EVs are out of favor with the investment public, but the value buyers, people that are spending their own precious dollars are buying EVs. And I would assume that this translates into still healthy utilizations across the charging networks out there. Can you maybe comment about what your customers are seeing from a utilization level on their as they have out in the field? Has this kind of swing in interest in UVs impacted the volume of incoming calls related to EV Arc sales. Do you see this maybe spending the curve a little bit for you as far as how this comes together for you in 2026?

Okay. First of all, I know you travel a lot just as I do. And one of the things that you know is when you travel a lot, is that everywhere you go in the world now, the adoption of electric vehicles is -- I mean, it's just phenomenal. Just what I've seen in the last couple of years, the increase in it. And again, particularly in places that seems antithetical why would petro states like the UAE and Bahrain Kuwait and Saudi driving electric vehicles. Well, because they figured out it's better to sell or all in is to burn it. It's as simple as that. And so we're seeing a massive increase in adoption rates. But you're also right that in the U.S., that falling out a favorite thing, which I suppose it's for another conversation for another time to talk about why that happened. But that thing is reversing now because people are seeing the edible -- being reminded yet again of the incredible volatility of the fuels that are related to the oil and gas industry and the vulnerability associated very interesting article in -- the Wall Street Journal this morning talking about the fact that we are -- oil prices have remained artificially low because the world is draining. It supplies that it's been sitting on its reserves rather -- but so that -- they think that there's more pain coming even if the Strait of Hormuz to open up tomorrow, they think there's a lot more pain coming later in the year where this is concerned, even if the federal government does have a fuel tax holiday, which, of course, the wisdom of that, that money gets spent on things like roads and stuff. So there are a lot of problems with that. But the long -- the short answer to your question is yes. And you can see that through the increase in the percentage of sales to commercial customers that we've made although the federal government is not buying at all, and we have seen some other reverses in some of the other governments.

And we're still -- those two -- the two orders that move right for us. Both of those were significant EV arc orders and going into environments where people who are feeling the strain from increased fuel prices and perhaps recognizing that the risk and vulnerability around this is not a risk they want to take. -- along with just increasing acceptance of electric vehicles. I think more and more people now are understanding that 300-plus miles of range is more than they need and the vehicles are very fun to drive, don't require any maintenance or anything else it doesn't take much to tip a consumer. And when they do, they tip really dramatically. So yes, sorry, long our short answer is yes. We are seeing increase in interest. And as far as the utilization rates of our existing UBX is concerned, they get hammered. And that's because a lot of times people put EV arcs where they can't put traditional infrastructure, and they do it because it's really vital to put the charting in those locations. And so we see lots and lots of EVs, which are basically at capacity. And that that's something we used to kind of shy away from, but now we're recognizing that's actually a real sales opportunity for us to go back and say, you did the right thing first time. It's time to repeat it 3 and 4x because the adoption rates, as we all anticipated have gone up significantly.

Your next question will come from Ryan Pfingst with B. Riley FBR.

Yes, I'll start on the backlog. Lisa mentioned that half of backlog is comprised by smart city solutions and 1/3 battery storage with the balance largely EV arc. Is this how you're envisioning the revenue mix going forward? Or are you more excited about certain segments or products outpacing the others?

The two things that I'm most excited about right now from a point of view of catalytic change in our business in the future. And of course, as the old Wall Street added says give a number or a date but don't give both. So I can't -- I'm going to tell you when exactly I think these things are going to happen. But the 2 things that I'm most excited about are first autonomous vehicles. I really -- I think again, you don't tend to see it so much in America, unless you're in markets like Austin and places where Waymo is already operating. But any of you who are on the call who have been to London will know how incredibly complicated it is to get around London. None of the streets are square or straight rather and street names change in the middle of the street and so really complicate a very hard place to drive around and yet we more get ready to deploy there with the regulatory approval. So it tells you that autonomous vehicles have really become a long way. They are much safer to operate. Think about what will happen to insurance rates, the lack of parking requirement, no liquid fuels because they'll all be electric.

I just think autonomy is going to be a huge deal. And what's broken in the autonomous vehicle market right now is the way people are charging. And they know it. We're talking to them and they are -- they totally understand the vulnerability, the cost the enormous task of trying to build these centralized charging depots with huge amounts of energy and a huge amount of risk associated with them. Our attended wireless autonomous charting solution totally solves for that totally solved for it. And so I feel very confident that at some point, we're going to make an announcement that we're getting -- we're doing something really meaningful there, and that's the sort of thing that could be a catalytic event for us. The other really -- the other thing I'm very excited about certainly is the drone market. I mean all of us read about that, and we've seen the valuations coming from Jon companies, but it's much more than that. the fact the matter is drones are just incredibly effective.

Craig mentioned a couple of things, doing inspections in oil and gas industry and monitoring agriculture and all these other things. We haven't even got -- we haven't even started on what you're going to see there -- and because we do some really special things with drones, both on the charting and the energy storage side of it, I think you should expect to see us playing a lot more in there.

To your revenue mix question, no, it's not necessarily the way I see the revenue mix moving forward. The quarter was somewhat jiggered, as I said already by these two relatively large orders that moved right. Had that not been the case, you would have seen a completely different percentage makeup. What I'm working hard to do is get this company to a point where the percentage makeup from any given contributor to our business line is just not meaningful. And that's so that we can afford to take these hits when they come along without it being impactful to the to the bigger impact -- a bigger story. But at the same time, yes, smart cities infrastructure is a very important part of our business, but we're a 3-legged stool. It's mobility, it's energy and its intelligence and infrastructure. and we're attacking all of those, and we expect to see growth in all of those areas. But as I say, the 2 things that have got me most excited right now autonomy and unmanned. And I really think that you're going to see some...

Everybody, remember, we -- 3 or 4 years ago, we were trading at $75 a share, $0.75 billion market cap. We are 1,000x the company we were then, but the market is not giving us credit for that because the market doesn't view us doing anything the market thinks is exciting right now I think that can change very quickly with things like autonomy and with -- in the drone market. And Beam has done a lot of work over the years developing a lot of very good patented technology that are perfect solutions for this.

And then I guess the last thing I'll say is Africa. You talk about 1 billion-plus people there, 60% under 25 years old. I don't think that there's no money there. There's a lot of money there. both internally and also coming from other parts of the world. The UN was talking about bringing Brussels money down for some of the things that we're talking about doing. There's a gigantic opportunity on that continent for us as well. And I just don't know of anybody that's better suited to it. as a better ability. Again, because of -- as I said in my comments, what gets people excited down there is if you can get everyone out of the ecosystem for deployment, construction, electrical work, permitting approvals. All of these are opportunities for graft and costs and corruption and all the things we just don't have any of that which opened a 20-foot container and relate to the systems to quote single invoice paid goodbye. And that's just a very powerful solution to bring to a market like that.

So I've got lots of stuff to get me really excited at the moment. And we've worked long and hard to position this company to do that. Our growth internationally and the growth in our product portfolio has positioned us just incredibly well to take care And we've got the discipline financially to survive swings in the market and other things like that and to the point where we can really take advantage of these things. That's going to be good for the company, good for our customers and very good for our shareholders.

I appreciate all that detail. And then secondly, just it sounds like revenue has really picked up here in the second half or rather the first half of the second quarter. Is it fair to expect further acceleration if the conflict in the Middle East is resolved, just given your opportunity there?

I think it's -- the fairest thing to expect is that if that conflict is not resolved, we are all in for a lot of hurt. I'm not just talking about being global. But also, it has been incredibly what's the best word I can use here without causing a fence. It's been a very unlucky timing for us that, that war to go because we have been making good progress there. Again, our partners in the plant and group are put us in front of the very, very much the right people, and we have very, very much the right products to do that. But it's tough to get anybody to move forward with any type of major investment or anything at the moment because again, they're thing. I'll just tell all of you.

While I was there, I had several sleepless nights because they were read warnings and alerts coming in because every time the administration did something like Project Freedom, for example, the Iranians struck at the Emirates. And again, it's not you're not infer or anything. It's not like there's bugs dropping around it, but it's just disruptive. You're not sleeping properly and everybody else is thinking that way too. And we need this to end right away as quickly as possible for everybody's sake, -- but I suppose the correlate to that is, yes, you're right that I believe that once it does come to a once things do free up over there, I think you're going to see some significant contributions to our revenue and to our bottom line from that market. That's why we went there. And it's -- if you do spend time in that region and if you do look at what's going on there, you don't need to go there, you can just Google it with autonomous vehicles with electrification of transportation and with their commitment to sustainable infrastructure and figuring out what to do with their oil other than burning it themselves. But just 1 other quick comment on this. The United Arab Emirates has pulled themselves out of OPEC -- now OPEC was previously limiting them to something like 3 million barrels a day. They have capacity to go to 5 million barrels a day. So the little bells going off of my head are they're going to more or less double their revenue the UAE where we are. And so there's going to be more cash for this kind of technology advancement, post oil world that they're building with vigor. And do we intend to contribute and to benefit from that.

The next question will come from Noel Parks with Touhy Brothers Investment.

I apologize if it turns that you've already touched on this I got on a little late. But I was wondering for -- particularly for the EV arcs, as we sort of see maybe coming full circle back with energy security suddenly back on the front pages. One product line that had been pretty robust for the industry in the charging industry overall, was the outlook for sort of return to base fleet type charging. And I just wondered if between either the U.S. or what you see in some of the emerging markets, sort of what the status of that business line is? .

I mean, fleet has always been a very big part of our business. And continues to be. But let operators are very good at figuring out total cost of ownership and figuring out what maintenance schedules look like. So they're the easiest people to convince about electric vehicles as soon as they get over the range anxiety. And then with a product like ours, we're able to go to a fleet operator and say to them, how would you like to have 0 unit costly energy moving forward? Think about what that means to budgeting. You imagine a fleet operator today, who has to budget what future diesel or gasoline prices haven't got a clue. And no idea. Nobody last year would have forecasted a gasoline prices were going to do what they're doing right now because nobody last year would have forecast that the stratus were going to get shut down by this war. So just the forecasting aspect of smart. With us, it's pretty easy to forecast the cost of unit cost of energy from our products. It's 0 forever. And so those sort of things have always been important to fleet operators. I think you're going to see more much more emphasis because of the points that Craig brought up about just the fact that these -- the oil prices and volatility and uncertainty around that are going to drive more and more people, particularly free operators to electric vehicles. and so that you're going to see more and more of that. But to your point about return to base type charging, I think that's very appropriate for certain types of fleet operators New York PD, who's one of our customers, lots of Army stuff that we do and all those are vehicles which do always return to a basin, they often spend a long time idle. Even if they were at 2 shifts, they still spend 8 hours a day idle somewhere. And those are really good at addressing those. We could charge pet vehicles at the same time off a single ABR at night time of our batteries. I'd still provide them with a full daily range replenishment that the average fleet vehicle needs. So that makes sense. But I'm actually much more interested in this highly diversified charting infrastructure, particularly where autonomous fleets are concerned, we don't want them going back to base -- we want them -- a taxi should drop you off somewhere be 2 minutes away from the nearest CBR and jump on it, spent 15 minutes on that get back all the range that it used on the last trip and just continue that rinse and repeat all day long, 24 hours a day. And as I say, our own research and what we've done is look very carefully at the miles that taxes drive the incidence of their uses. And we looked at all of that, and we have figured out that with an EV arc, we could keep an autonomous taxi operating and actually provide twice as many rights as a traditional taxi does or one that returns to a base just by giving them this top off charging the whole time. So charging becomes like WiFi everywhere. -- and the fleets are able to operate the whole time. And when you think about, again, what that does in terms of cost reduction, but also revenue increase per unit, it's really phenomenal. So lots of increase in fleet usage.

Great. Great. And I'm asking just of your sort of newer generation of product lines. I'm just wondering sort of beyond, say, EBR or the legacy streetlight business in Europe. -- which sort of the newer product lines is closest to, I don't know, sort of like maturity in terms of gross margins as opposed to some of the ones that are that are still a ways away, maybe just because they are so new.

Anything that's based on the AVR product line is the closest. And so that's Beam Petrol, Beam bike, Beam scoot, because they are based very heavily on the existing EVAR platform just performing completely different task and with different value propositions. The growth is the one that's easiest to forecast and manage because it's almost exactly the same production schedule. And by the way, that was a very deliberate strategy on our part. And I've always liked the idea of having a broad section of products that have a very narrow requirement from logistics, supply chain and manufacturing point for just the reason that you just brought up. Certainly, beam flight still very nascent, and a lot of that's to do with the fact that it has to be pretty much bespoke for the drone that it services. So it's harder to get the margin -- to forecast the margin currently on that. in the early days. However, it will create so much value that we anticipate to be able to get that on the top end. And then beam spot is still young. That's a street light replacement product, still young, and we're still making very significant improvements to that but the latest generation of that have been deployed cost far less money to produce and are much more impactful than the first that we deployed. And that's probably a journey that's got some legs on it. Just like -- we spent a long time getting that to the point where we can produce them as inexpensively as we can. And I believe and Lucy, you can correct me if wrong, but I believe that unit economics on AVRs now are better than 40%. We're 30-plus percent across our entire portfolio of products in terms of unit economic gross margin, unit economics, but I think the EDRs closer to 4%, particularly when we make them in Serbia.

This will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Desmond Wheatley for any closing remarks. Please go ahead.

Yes. Thanks again, everybody, for your time and for your continued interest. I just would again point out that this has been a bit of a disappointing from a revenue and gross margin point of view, a quarter, but it is in no way an indication of what's happening at the company. As I said earlier, we saw 1,000 times when we were back in when we the 3/4 of $1 billion market cap. And then also, please, please, guys. As you're right about us, particularly when you're talking about EPS. Please take into consideration the noncash impact on these things because it's just throwing us all over the place, that impairment charge last year, which again, our acquisitions are far better than we hoped them to be not worse, but we had to take that goodwill impairment. And then this other noncash event this year, it's just great to let people know that EPS numbers you all got a noncash stuff in it.

Not telling you your jobs, just on you how frustrating is to have these numbers sometimes get out there and people call me and they start screaming out and I said, did you read the filings -- but beyond that, just very grateful for your attention. Great questions and looking forward to the next one. So thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, and welcome to the Beam Global 2025 Year-End Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Lisa Potok, CFO. Please go ahead.

Hi. Good afternoon, and thank you for participating in Beam Global's 2025 Year-End Operating Results Conference Call. We appreciate you joining us today to hear an update on our business. Desmond Wheatley, President, CEO and Chairman of Beam Global, is joining me by phone from Europe on his way to the Middle East. Hopefully, we do not have any technical difficulties during this call. Desmond will be giving his thoughts on 2025 and providing an update on recent activities at Beam, followed by a question-and-answer session.

But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the SEC. The content of this call contains time-sensitive information that is accurate only as of today, April 9, 2026. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

While 2025 presented near-term revenue headwinds driven by the U.S. federal government reversing its fleet electrification program, it also marked a pivotal inflection point for Beam Global. We significantly reduced our reliance on government customers, expanded into international markets and exited the year with a strong momentum.

I'll start with a few key highlights. We delivered 56% sequential revenue growth from Q3 to Q4 of '25, and we fundamentally reshaped our revenue mix. Commercial customers represented 72% of revenue in '25, up from 38% in 2024. And 70% of our Q4 revenue came from our new and expanded portfolio of products, reflecting the growing breadth of our products' appeal. We ended the year with $6 million in backlog, no debt and access to a $100 million undrawn credit facility, giving us a strong financial flexibility as we move into 2026.

Turning back to revenue. Fourth quarter revenue was $9 million, up 7% year-over-year and 56% sequentially. For the full year, revenue was at $28.2 million compared to $49.3 million in 2024. This decline was primarily driven by a sharp reduction in U.S. federal orders, which fell from over 60% of our revenue in 2023 to less than 5% in 2025. At that same time, we grew our nonfederal government business significantly, making up some of the lost ground.

On profitability, our fourth quarter gross margin was 18%, and our full year gross margin was 13%. On a non-GAAP basis, excluding the noncash depreciation and amortization, gross margin improved to 23% in 2025, up from 21% in 2024, reflecting our continued improvement in our unit economics despite our lower volumes. Our operating expenses for the year were $31.1 million, including approximately $15 million in noncash charges, which was primarily related to the goodwill impairment and noncash compensation. The goodwill impairment in no way reflects management's objective view of the value of our acquisitions, which we believe are adding great value to the company.

The impairment comes as a result of accounting rules, whereas the fair value of the goodwill fell below its book value due to the sustained decline in our stock price in early '25. Excluding these items, our operating expenses were approximately $16.1 million, representing a 17% year-over-year reduction, which highlights our disciplined approach to cost management. Our net loss from operations before tax was $27.4 million or $9.5 million excluding noncash items, which is non-GAAP, compared to $8.6 million last year. The increase was primarily driven by the lower revenue.

Finally, on liquidity. We ended the year with $8.9 million in working capital. We continue to operate with strong working capital efficiency, converting the majority of our short-term assets into cash within approximately 180 days. Combined with our available credit facility, we believe we are well positioned to fund operations and support our growth initiatives.

In closing, we believe the actions we took in '25, diversifying our customer base, expanding internationally, improving our margins and maintaining financial discipline have positioned Beam Global for a more stable, scalable growth. We are entering '26 with momentum and confidence in our long-term trajectory.

I will now turn the call over to Desmond to provide a business update.

Well, thanks very much for that, Lisa. And thanks to all of you for joining this call. As Lisa pointed out, I am, in fact, in transit on my way to the Middle East at the moment. And so I don't have 100% faith in the connection that I'm on at the moment. But I'm going to go along with it, and I appreciate all of your patience and hanging in there with me. Timing wasn't ideal, but we're going to get it done anyway.

So Lisa just went through the numbers with you, a lot of noncash stuff in there. I'm going to repeat a little bit of what she said because I just want to make sure we make this really clear. And I really encourage you all to take a look at the noncash business, particularly where that impairment of goodwill is concerned because that was a big hit to us. And again, nothing whatsoever to do with our feeling about the value of our acquisitions, but I'll cover that again a bit in a minute.

In the fourth quarter of 2025, as she said, we did increase our revenues by 50% over the prior quarter, and that was about 7% increase over the same quarter prior year. At the same time, we reduced our operating costs and improved our gross margins, net of noncash items. We did all of this despite having no contributions to our revenues from our historically largest customer, the U.S. federal government, and despite putting in place several new avenues for sustainable growth like the formation of Beam Middle East, for example. The growth came as a result of our getting our existing and really importantly, new products in front of customers on whom we've not previously focused our sales efforts, both in the U.S. and internationally. This is a strategy that's worked, and it's continuing to work.

Full year 2025 was a year in which the Beam team demonstrated, without question, its ability to respond to the significantly changed market conditions within which we find ourselves. It was also a year in which we demonstrated the efficacy and appeal of our expanded product portfolio to broad market segments both in the United States and internationally, even in the face of these dramatic shifts in market appetite and U.S. government policies.

When we consider the fact that in prior years as much as 80% of our revenues came from sales of our EV ARC product to U.S. government agencies, and that as of January 6, 2025, that entire stream of federal revenue dried up for us like a light switch being turned off, it's indeed a testament to the broad appeal of our products and the tenacity of our team that we were able to, nevertheless, generate $30 million of revenue from other sources than those which we've historically been selling to for the last several years. In fact, our biggest year revenue was about $70 million. And when you take away federal sales from those revenues, we sold $10 million worth of stuff to everybody else. So you can see that we've actually tripled our sales to nonfederal customers in 2025.

Another way of looking at this is that had we -- had an election go the other way, we might reasonably have expected to do the same level of federal sales in 2025 as we've done in previous largest year. And that would have put us at a run rate of almost $90 million in 2025. So it's fair to say that the changing priorities of the new administration have had a very significant impact on our business. Equally fair to say that by tripling our revenues from non-U.S. federal customers, we've done a pretty good job of responding to that shift and tapping opportunities, which I will believe will be much larger for us in the future.

It's not actually easy to sell tens of millions of dollars of product to the U.S. Federal government. You have to create a selling and operational team, which can work within the strict confines of the regulatory environment, which the federal government as a marketplace requires. And we spent several years refining our processes and complying with ever more stringent regulations, which resulted in us becoming by the end of 2024, a company with significant administrative, sales and even operations organization geared towards serving the largest fleet in the world, the U.S. federal fleet.

When in January of 2025, sales opportunities from the federal government came to an abrupt end, we had to completely change our sales approach and a significant amount of our operational process as well. You could say we got knocked down in the third, but we went back to our corner. And when we came back out, we came out punching. As I often say to our team, you can manage the business or you can let the business manage you. The Beam team managed the business and took the steps necessary to ensure that we created new opportunities for growth rather than allowing the loss of our largest customer at the time to be an existential threat.

Now all of us have a high degree of confidence that the federal government will return as a customer in the future because the electrification of transportation is certain and our products actually become better and more relevant with every day that passes. A very good indicator of this is that the Federal General Services Administration, or GSA, who manages our federal purchasing contract, actually renewed that contract with us in 2025 and extended it through 2030. We believe that's a strong indication that the bureaucracy at least still recognizes the value of our products and sees a future where they'll want to again leverage this contract, and we'll be ready for them.

In the meantime, the steps that we've taken to evolve from being a one product, one customer company to being a company with a portfolio of incredibly relevant and compelling energy and infrastructure solutions have made us 1,000x the company that we were just a few years ago. Many people still think of us as a solar-powered electric vehicle charging infrastructure company, but there is so much more to the story.

I think of Beam Global as a 3-legged stool: energy storage and security, electric mobility and transportation and smart cities infrastructure. We have an expanded portfolio of excellent and patented products, which we're now successfully selling across all 3 of these sectors. Many people still think of us as a U.S. or even California organization. But here again, there's much more to the story.

Yes, it's true that we have thousands of our EV charging infrastructure and energy security products deployed across the United States, but we now also have products deployed in 23 nations globally. In addition to our factories in San Diego and Chicago, we now have 2 separate factory facilities in Europe, and we have sales and business development offices in Abu Dhabi in the Middle East, where I'm off to at the moment. Beam Middle East is the latest addition to the Beam Global family and is, at least in my opinion, probably the most important story from Beam Global's 2025.

This excellently structured joint venture with the Platinum Group, UAE, enables us to address a rapidly growing cash-rich market with our portfolio of products, which could not be any more relevant for that part of the world. The Gulf states have announced investments of over $1 trillion in the next decade on sustainable infrastructure as they diversify their economies and indeed their lifestyles away from solely petrochemicals. We formed a joint venture with the Platinum Group because they're a highly qualified and extremely influential entity within the United Arab Emirates. Chaired by His Highness Sheikh Mohammed Sultan Bin Khalifa Al Nahyan, the Platinum Group is a multibillion-dollar entity invested in a broad selection of industries. The Al Nahyan family, the family of our partner, Chairman, is the ruling family in the UAE and has unparalleled influence over just about everything that happens there. It is not a distant relative, by the way. We've opened sales and administrative offices in Abu Dhabi and have made only very modest capital investments there.

Our strategy is to sell and market our products in the region and will support the early sales we make from our Beam Europe factory in Serbia. We've already done this and prove the model is successful. Beam Europe is 4 hours flight from Abu Dhabi, and we can ship our products and containers from our factories in Serbia to our facilities in Abu Dhabi in about 4 weeks and very inexpensively. But we do also have some local employees, and we're able to leverage the Platinum Group's extensive SG&A infrastructure without having to recreate ourselves.

This is a fantastically efficient model and allows us to operate as though we've been there for years without having to learn the local ropes or build an administrative bureaucracy. Beyond that, the Platinum Group's influence is such that simply being part of their group is extremely helpful when we need anything. As our sales volumes increase in that region, and we certainly expect them to, we intend to assemble our products locally in the UAE with components and subassemblies, which are manufactured in our factories, both in the United States and Serbia. With further expansions in volume, we intend to evolve to a full manufacturing capability there in the UAE.

Because of our relationships with the Platinum Group, we'll have no difficulty identifying and acquiring factory facilities with very good economics. There's no shortage of qualified labor in the region. And again, the economics where employees are concerned are very good. Beam Global's contribution to the joint venture is our IP and our know-how.

The Platinum contribution is to leverage their relationships, their experiences and their influence in the region to lubricate any administrative and regulatory barriers we may encounter, and most importantly, to get us to the decision makers we need to sell our products. They have certainly not disappointed us thus far. We're already dealing with senior and influential decision-makers at some of the most important entities in the region. Stay tuned for more news on that.

Now Beam Middle East has been operating for about 6 months, and I can tell you that our model is already working. We're looking forward to being able to make some announcements in the not-too-distant future about early wins. And assuming the war in the region comes to an end before too long, we believe that we may be able to advance some of the other larger opportunities, upon which, we're already working.

Even if the war does drag on, we still believe that there will be significant opportunities for Beam Middle East within the Middle East itself and also as a gateway to Africa, which is a massive and very fertile market for our products. We've had a great deal of success with the U.S. and U.K. militaries, and our products' military applications has only increased at our off-grid energy infrastructure and energy storage products groups.

As it happens, I was actually on my way to the Middle East when the bombing started. And as a result, my last trip there was disrupted. However, as I've already told you, I'm on my way there now, and I look forward to advancing our initiatives with the Beam Middle East team. I'm hopeful that future earnings calls will give me the opportunity to report on some fantastic new opportunities there for our products.

Drones, autonomous vehicles, electrification of transportation, energy storage and security, smart cities infrastructure, micromobility and machine learning, all of these things are sought after in the UAE. All of these are things in, which Beam Global excels. The regulatory environment is much more welcoming than it is in the U.S., and they're enthusiastically seeking out technologies like ours to continue building on the ambitious steps they've already made.

On the energy storage side of the business, our team of scientists and engineers continue to win new patents in 2025. Now our patented and energy dense, safe and bespoke battery solutions are powering drones in the air, on the land and in the sea. In 2025, we also won a Fortune 500 automotive company as a battery customer. Our battery solutions are currently deployed in military applications, which are so secret that I cannot describe them.

We've kept vital electricity flowing to our customers during hurricanes and even in as much as 8 feet of storm surge because our products are hurricane-rated and flood-proof to 9 feet. That's part of the reason that they're listed on the FEMA or Federal Emergency Management Agency as disaster preparedness and resiliency solutions. We supplied electricity to earthquake responders, the police, EMTs and a whole host of military applications. We're working with developers of unmanned autonomous boats, which need lightweight and highly energy dense battery packs to execute the kind of missions that you've all seen on television recently.

And our BeamWell product is being used by the Royal Jordanian Armed Forces to provide electricity, mobility and desalination so that they can have drinking water where there's only dirty or salty water and robust mobility in war zones and disaster struck areas without relying on vulnerable traditional infrastructure or supply chains. Goodness knows we've all heard enough about attacking energy infrastructure in the Ukraine and in Iran recently to understand how relevant our products, which are immune to such centralized vulnerabilities, are increasingly becoming.

One of our battery customers, Ray Systems, in the United Kingdom is producing one of the strangest but most fantastic underwater drones I've ever seen. It's able to conduct long mission silently and efficiently, and will only get more effective with Beam Global's highly energy dense, low weight and safe battery technology, providing them with greater range, greater resilience and a lower total cost of ownership as a result of our ability to provide extended life batteries with increased energy density. Beam is, as far as we know, uniquely able to provide these sorts of bespoke battery solutions for incredibly challenging opportunities. We feel this is another great differentiator and certainly an opportunity for growth for us.

Our smart cities infrastructure business is evolving with ever-improved products and technologies. And it seems that our customers appreciate this and that we've not misjudged their appetite for these sorts of solutions. Twice in the first quarter of this year, we announced record weekly sales of our smart cities infrastructure products. In the first instance, we announced $1 million in sales in a single week. And then just a few weeks later, we announced $1.7 million sales of smart city products, again, in a single week. Annualize this, and you can see why we're so excited about this 1 vertical of our 3-legged stool.

I've driven down highways in Europe lined with our energy-efficient lighting infrastructure products. We're in the process of integrating our BeamSpot street lighting solution, which is onboard energy storage, tracking solar and light wind generation. With EV ARC electric vehicle charging, BeamBike electric bike sharing and several of our other smart cities infrastructure products under a single project for a single customer for the first time in our history. This is an excellent example of how taking products from across our portfolio and combining them into a single ecosystem can deliver energy security, energy savings, sustainable mobility and novel new approaches to how energy generation and infrastructure can improve the lives of the citizens our customers serve. It's a highly replicable model, and one which we intend to expand with these real-world test case is now available to us. It also has excellent potential as a source of future recurring high-margin revenue as we mature the deployments.

I started out by saying that we are so much more than a solar powered electric vehicle charging infrastructure company. And indeed, we are. But that's an area of business, which is still important to us and always will be. And I believe it will be increasingly important to us in the coming months and years. Electric vehicle adoption is still growing globally and is inevitable everywhere, even in the U.S. There's not a country on the planet that is planning for a future without EVs, and the need for rapidly deployed and highly scalable charging infrastructure is becoming more and more acute.

Despite the U.S. federal government's position on electric vehicles, in 2025, we shipped our electric vehicle charging and smart cities infrastructure products to Arizona, California, Colorado, Florida, Michigan, Oregon, New Jersey, Nevada, Texas, Washington, the District of Columbia, Massachusetts, New Mexico, Ohio, Illinois and Alabama in the U.S. and internationally to Quebec, Ontario and Alberta in Canada, and to Serbia, Spain, Romania, Greece, North Macedonia, Bosnia and Herzegovina, Croatia and Montenegro in Europe. And also to the Middle East. So you can see that while this is only one piece of our business, it's still an exciting, and at least from an international point of view, at the time being, very compelling growth opportunity.

But there are also some new and very exciting aspects of this business developing, which we are now addressing in unique and compelling ways. Autonomous vehicles are becoming more and more accepted. Companies like Waymo, Cruise Tesla, Lucid, Uber, Rivian and many others are expanding autonomous taxi operations and making them more mainstream every day. Millions of miles have been driven by these autonomous vehicles with far higher safety than human drivers.

And it's not just taxis and passenger cars. In fact, materials rehandling, logistics services and a whole host of other vehicle operations, including law enforcement, military and agricultural applications are moving towards fully driverless vehicles. One obvious and, until now, stubborn flaw with the model has been that all autonomous vehicles still require human beings to plug them in to recharge them. Notice that I didn't say fill them up with gas or diesel because in case you're wondering, there will not be mass adoption of autonomous internal combustion engine vehicles. They will certainly all be electric.

But the current model, in which autonomous vehicle operators build centralized locations with massive power infrastructure to which each of their autonomous vehicles must inefficiently return at the end of shift so that a human being can plug them into expensive and vulnerable electrical infrastructure is clearly flawed. In fact, it's one of the most significant barriers to the rapid deployment of these technologies in cities across the world.

Beam Global has a unique and patented solution to solve for this challenge. Our wireless and autonomous AV charging solution enables autonomous taxis and other types of autonomous vehicles to recharge regularly and without returning to any type of centralized infrastructure, and most importantly, to recharge without the requirement of human intervention. The vehicles charge themselves wirelessly on our unique and patented product. In fact, our autonomous wireless charging solution solves every problem that AV operators are facing from an infrastructure point of view. We can deploy rapidly at scale and with a fixed and certain budget across any city just about anywhere in the world.

Our solutions are immune to the type of centralized vulnerabilities that are currently facing AV operating companies, meaning that their fleet will continue to operate even if there's some kind of power failure. Our solution puts them in a position where they no longer need to rely on a single centralized hub to fuel their entire fleet. There's no unit cost for the energy, which we're providing to the taxis, which makes the economic model for operating a much more certain and stable. Because as we've seen, particularly right now, traditional electricity costs, especially when powered by natural gas, can be incredibly volatile. That makes it hard to forecast the economic model on your AVs.

The unit cost of energy on a Beam Global wireless fleet of autonomous charging infrastructure is always the same: 0. And because our intention is to have a wireless Beam Global charter within 2 minutes of any taxi drop off, those vehicles now no longer need to make the inefficient trips to centralized charging hubs because they can top off between every passenger trip. Our patented wireless EV ARC, combined with our recently announced partnership with HEVO, is already in front of several automotive manufacturers and AV companies. At the same time, we are actively working with logistics and material rehandling operators to provide wireless charging for their autonomous vehicles.

Abu Dhabi has publicly stated that it intends to be the autonomous vehicle leader of the world. The Middle East is headquartered in Abu Dhabi. At the same time, the Trump administration and the Department of Transportation has similarly expressed the wish for the U.S. where Beam Global's headquartered, to lead in that space. Autonomous vehicles are already providing services in cities in Europe, where Beam Europe operates. In short, we are present in all the most active markets for AVs, and we have a patented solution, which is a killer app for the future of AV infrastructure.

They may think it's early days in the AV space. But as The Wall Street Journal recently reported this time, it looks like AVs are really going to take off. And in fact, they could be the next thing, big thing in transportation. Beam Global has, as I said, the killer app for autonomous vehicle deployment. It's a solution that makes so much sense, and we have good intellectual property protection and a tremendous amount of experience in deploying this type of infrastructure across cities.

So while there may be a lot of negativity around electric vehicles and charging infrastructure in the United States at the moment, you don't have to dig very far to see that this is still an incredible opportunity for us because EV sales are continuing to grow globally, and especially because of our incredible and unique position in the autonomous vehicle space, which we believe creates opportunities for very significant growth. Remember, we experienced years of triple-digit growth when EV was popular theme on Wall Street. There are those that believe that AV will be even bigger. Both will certainly happen, and Beam Global will play an important role in their infrastructure requirements.

Beyond autonomous vehicles and EVs, we're also experiencing success with other electric mobility solutions. Our BeamPatrol, for example, electric motorcycle bundle is now being used by law enforcement in the United States. Our BeamBike, electric bicycle and infrastructure bundle is being used in the United States, Europe and the Middle East. And our Beam branded application, which manages the bikes and allows for billing and geolocation, et cetera, is available on both Apple and Android. We believe that in 2026, we will see significant growth in the deployment of our BeamBike electric bicycle solutions, as well as our other electrification of mobility and transportation products. And with BeamBike in particular, that's often a recurring revenue opportunity for us.

What other company can you think of that's producing such a relevant set of patented products for today's challenges and opportunities, while remaining debt-free, disciplined and lean? You can clearly see that our diversification of product portfolio, and also, international sales pipeline is creating significant opportunities for us and really started to pay off. We saw tremendous growth from 2020 through 2023, basically with a single product and a single customer in a single country. We now have multiple very relevant, very current products, which have a great deal of appeal for a broad section of customers in nations across the world.

And you don't have to take my word that this strategy is working. You only have to look at our numbers. Federal sales, which were, as we said in previous years, something like 80% of our revenues, were only 4% in 2025. And that wasn't new sales. It was mostly from ongoing service contracts. Our nonfederal government sales went from being around 20% of revenues to 96%. So clearly, our efforts to diversify away from federal sales have worked. Now it's still a work in progress, and we have a lot more to do, but we're taking the right steps, and those steps are generating positive results.

Similarly, that 80% of revenues that we got from the government was all derived, not surprisingly, in the United States. And frankly, so were the other 20% at that time. In 2025, almost half of our revenues came from international sales, and our current international backlog is more than half of our total, showing that our geographic diversification is also working. And all of that happened before we opened Beam Middle East, which, while it's certainly a challenging environment at the moment, I still believe will provide us with significant opportunities for very large growth in the future, assuming things calm down, which I know we all hope they will.

Our contracted backlog numbers also support the points I've been making to you. The international contribution to our $6 million of backlog at 12/31/25 was more than 50%, and our energy storage business contributing over 30% of backlog at that time. Just as I said, more than half of our current backlog of $9 million comes from our international operations. So you can see that we're still often viewed as a solely U.S.-based solar-powered electric vehicle charging infrastructure product company, but actually, only 11% of our backlog at 12/31/25 was derived from that part of the business. The rest of it has come from all our fantastic new products.

Now again, I want to come back to the fact that's still a very important part of our business, and it will continue to be, particularly as we launch our autonomous charging for autonomous vehicles, which will be performed by our patented off-grid products. But the really important point here is that we are successfully diversifying our business and creating lots of opportunities for U.S. and international growth beyond charging infrastructure products. Whereas in the past, we were heavily relying on one product, as I said, one customer and in one country.

We did all of this, by the way, while improving our gross margins, net of noncash items by 1.8% year-over-year and holding our operating costs flat or even lower, in fact, again, net of noncash items. A couple of points are worthy of making on both our gross margins and our operating expenses. First, on margins. That improvement net of noncash comes even with the increased burden of fixed overhead allocations, which result from our lower revenue number. That means that our unit economics, which are over 40% gross margin, improved to such an extent that we were able to absorb the negative impact of increased fixed overhead allocations and still come up with almost 2% increase in gross margin from the prior year. When volumes return, as we expect them to, the unit economic improvements we've made should help us report even greater improvements in gross margins.

And gross margins are more than just a metric. Every time we sell a product, we are better off from a cash point of view than we would be without selling that product. That might sound obvious. But of course, as you know, lots of companies are not like that. And that's how we're going to get to cash flow and to profitability, and that's a major area of focus for us.

Our operating expenses were flat, in fact, reduced year-over-year, excluding noncash items, even though we own Beam Middle East and push forward all the other initiatives I've described already and many others. The noncash amounts in our operating expenses were largely driven by that approximately $11 million of impairment of goodwill. We talked about this already, but I really want to drill this in.

I've just spent the last few minutes pointing out how benefit -- beneficial our international expansion and our energy storage group have been to our overall businesses. So it should be clear that no one at Beam Global thinks that our acquisitions are worth less than they were when we made them. On the contrary, we are very happy with our acquisitions in Chicago and Serbia, and we never try to -- stop trying to make them better, of course.

The impairment of goodwill was driven entirely by accounting rules, let's say that the total value of our stock can't be less than the carrying value of the reporting unit. Because we've had a reduction in our share price and therefore, market cap, we had to impair our goodwill to reflect the new valuation of the whole company. Even though, as I already said, we actually believe that our acquisitions are worth more than we paid for them. Rules are rules. We don't break them.

To the balance sheet for a moment. We still have no debt except for a couple of vehicle payments, and have a very clean cap table with an extremely low number of common shares outstanding when compared to any of our so-called peers. No warrants to speak of and no other mechanisms, which might cause any investor concern. We still have our $100 million credit line available to us. And untap, untouched it and it's priced at SOFR plus 300 basis points, not as inexpensive as it was when we first negotiated it, still pretty good money and available to us any time we need it for rapid growth.

And while I know that it concerns some people that we operate with a low cash balance, we always have done. It's part of being lean. First of all, we have twice as much cash at March 31 as we did at December 31, twice as much cash at March 31 as we did at December 31. So it's not as if there's some terrible trend that anyone can draw conclusions from.

And secondly, as I've always said, working capital is a better metric when considering our business. We actually burned around $6 million of cash in all of 2025. On 12/31 of '25, we had around $9 million in working capital, of which about $6 million is AR. On March 31 of this year, we had twice as much cash and almost $7 million in AR. On top of that, we have over $9 million of contracted backlog now. We generally convert AR within a couple of months and backlog in a couple of months more. So taken as a whole, adding cash, AR and backlog, we have around $18 million of cash and stuff that will be turned into cash in the next short number of months. And that's without adding inventory, which, again, we generally convert pretty quickly.

Remember, we burned $6 million in all of 2025. So please, read more than the first line of our balance sheet if you want to have a realistic idea of how our performance might be affected by cash availability. Because as I said, between cash and the things that we will convert into cash in a short number of months, we're about $18 million, and we burned $6 million in all of 2025, do the arithmetic.

By the way, we have no going concern, and that's why. I know it would make some people more comfortable to see me load up the balance sheet with cash, even if it meant taking on debt, but debt costs money, and I've got cash flow in my sights, everybody at Beam Global does. We will continue to be very careful with cash and equity, as we've always been. And if you got any questions about our level of discipline, just take a look at our acquisitions, the tremendous expansion of our product portfolio and the international footprint we now cover and consider how little cash we use to make all of that happen.

Also remember that our unit economics provide gross profits of over 40%. So that every time we invoice for product, we have more cash than we did before that product left our factory. As we return to a higher volume of product shipped, as I'm confident we will, we generate more and more gross profit, reducing our reliance on any other cash resources we have.

So was 2025 a tough year with us, what with tariffs, a retreat from EVs, our biggest customer doing a U-turn on the electrification of its fleet and all the other challenges large and small that came along? Yes, it was. 2025 was a challenging year. Did we respond to that challenge by adding new products, finding new customers, addressing new geographies and creating what might be our biggest opportunity for growth yet, autonomous charging, drone products, Beam Middle East, our smart cities wins? Yes, we did. Did we do all of that while maintaining the highest level of financial and economic discipline? Yes, we did. And are we excited about 2026 and the rest of our future? You bet you. Yes, we are.

With that, I thank you for your time. I hope you were able to hear everything that I just said. And I appreciate your attention and your continued support of this company that we all love and that has so much very real potential. And with that, I'll now hand back to the operator and take any questions that you may have. Operator?

[Operator Instructions] The first question is from Craig Irwin with ROTH Capital Partners.

Great. First, congrats, the numbers were actually a little better than what we were looking for. It's an accomplishment in this environment, for sure.

So my first question is this, 70% of revenue in the fourth quarter came from new products. Are there any products that you would specifically call out as a large contribution in there, something that's really catching wind in its sales in the market? And then the 6 and change in revenue that they contributed, do you have an approximate number for the year ago? Or is this all fresh revenue in '25? Just so we can get a frame on the organic growth rate there.

Yes. So certainly, our smart cities infrastructure products are contributing significantly. And of course, a lot of that's also contributing to our international growth. Energy storage has picked up its head. And then we just have a much broader selection of products now, Craig. So it's not even that specifically any one of them is pulling hard away from the others.

It's just that what's really different about our business is, as I said during my comments, we only ever really had that single -- the EV ARC product. It was fantastically successful with it for many years, and we still are selling a lot of them, but I think the big thing now is just that we are -- we have a much more diversified group of products, and we're taking revenue from all of them one way or another. Sorry, you asked -- you were talking about the backlog, presumably, 6 million of backlog.

Sorry, not the -- I will ask about the backlog, but the revenue from that 70% from new products, right, $6.3 million. How many of those products were sold last year? And can you give us an approximate sort of year-over-year growth rate if there was a revenue contribution from them last year?

That's been really -- the growth rate has been really significant. I don't actually have the exact numbers percentage year-over-year growth, but it's -- but most of them are new. And so the growth rate has been really significant for us.

Now we've had the energy storage business for some time. We've been making batteries for some time, but we're just getting a lot better about how we -- how and what we target. And of course, we acquired much of the smart cities infrastructure business with -- through our acquisition in Serbia, but we've made that a very different business. It's -- they're very much modernized and up to date and doing some really exciting things now, which they didn't do in their history. Not because they weren't willing, but they just didn't have the technology and the other things that we're bringing to the table. And so it's been a really good marriage from that point of view.

That's good to hear. So then the backlog, right? $8 million, you are obviously executing because I know you book and ship pretty quick. Are there areas in the backlog where you feel that things are building, maybe supply chain is limiting your ability to ship that maybe we could have had a bigger quarter in the fourth quarter? Is there anything that you would call out in backlog as sort of indicative of changing momentum in the business after the strong finish in '25?

No. So it's a good -- I'm glad you asked that question because, actually, I should have been specific that, that backlog that we have will all be -- I mean, with possible of some minor and immaterial exceptions that will all be executed upon in the next quarter or 2. So it's -- none of it -- these are long-term sort of contracts that we're going to be taking money from in years to come. Not materially. There are a couple of little things in there. So that's the first thing to understand about it.

From a supply chain point of view, we're doing pretty well where that's concerned. But one thing, again, that our acquisition in Europe has done has allowed us to spread things out across the year a little bit better. That said, first quarter is historically a slow quarter for us. It's a slow quarter in the infrastructure business. It's also a slow quarter in Europe, particularly in the Balkans because their Christmas and New Year extends halfway through January, and there are other weather-related things.

But the good news is that the backlog that we do have right now will all convert -- materially, all convert in a short few number of months. And of course, as you can see, we had $6 million at 12/31. We now have $9 million. As you can no doubt, we imagine we have revenue quite a bit in the first quarter as well. And so we're clearly adding to it. More than just replacing it, we're adding to it.

Understood. Understood. Last question, if I may. So the re-up on GSA is encouraging. Can you maybe clarify for us if this could include slightly different formats of your existing products? There's -- there are emerging applications like drones out there where the government needs these for remote monitoring and other applications, and powering these drones is often quite problematic. I'm not calling that out as the example, but there will be other similar examples. If you were to have to modify the platform, is this something that could be covered under the GSA purchasing agreement at this time?

So better than modifying it, we actually have our patented BeamFlight product, and this is exactly what you've just essentially described. This is essentially an EV ARC, but for drones. It has a completely different form factor, but the same underlying technology. And we are able to deploy it in contested environments on borders anywhere, frankly, without any type of infrastructure requirement. No construction, no electrical work. It generates and stores its own electricity. Drones can land on it autonomously, refuel and take off.

Now I've had a pan on that for a couple of years. We haven't been able to do very much with it because as you know, until the last couple of years, drones haven't really taken off, to give the pan. But they are taking off in a major way right now. And we expect to see a lot of business on that -- from that product and also from the fact that we're now putting, we're making bespoke and highly energy dense batteries for drones in a way that nobody else is able to, to my knowledge.

To be specific to answer your question, that is not covered under our existing GSA contract. However, I do think it's very encouraging that GSA renewed our contract. I mean, they don't -- they're not out looking for work for nothing. There's a reason that they did that. And we believe that the long-term view is that electrification is going to play a major role in their future plans. And frankly, we've had enough conversations with people within the federal government to know that they believe that, too.

The next thing for us to do will, of course, be to do as we've done in the past with some of these big purchasing contracts where we add product. And you're absolutely right that what we're doing with drones between -- both between our Made in America batteries and our drone recharging product will be a major area of focus for us.

And so will autonomous vehicles. I mean, autonomous vehicles are -- again, we often hear stories about Waymo and Cruise and the taxi fleets. What we don't hear about is all the autonomous vehicles that are being increasingly used by militaries and for logistics and for all the other things that federal government, particularly the military, really needs them for. And our ability to get those vehicles refueled without infrastructure requirements and without human intervention, I also believe will be a major opportunity with us with the Feds.

So I spent a lot of time in my comments talking about how the federal government was by far our largest customer. U.S. Army is our largest customer. That literally came to a stop, January 6 of 2025. But we still view the U.S. federal government as a major opportunity for us because we will sell them our energy security products and storage products during this administration. And then when this administration is replaced by somebody who's more in favor of electrification and renewables, then we believe we'll see a massive increase of business back then too because they'll be 4 years further behind. And that urgency is so important to us because our products are rapidly deployed and scalable.

And I'll just give you 1 quick anecdote on that. We deployed something like 700 plugs for the U.S. Army in less time than they were able to put permitting and construction packages together to put traditional charger in the ground. So speed and urgency will be really important. And I believe that the Feds will be a great customer for us again in the future. It's not an accident that they replaced that contract and extended it for years.

The next question is from Tate Sullivan with Maxim Group.

Good to hear from you, Desmond. Can you just -- I didn't hear -- can you talk about BeamSpot a bit? Is BeamSpot in any of the backlog? Or are you focusing sales efforts regionally, anywhere? A little detail on that, please.

Yes. Yes. So BeamSpot is a bit of a paradigm. I love that product. And yes, it's great to say that it is now in the backlog. And actually, the deployment that's in the backlog right now is very exciting because, as I said in my comments, it's not just BeamSpot. It's a combination of BeamSpot, EV ARC, BeamBike and a whole bunch of our other stuff under a single project, which -- we're -- that's been one of our goals and part of our strategy for a long time is to create -- become a solutions provider and create ecosystems with our products. And although they all have the same underlying technology largely, they do a lot of different things for customers, and it's just great to see it coming together.

Beyond that, the other thing that's important to mention about BeamSpot is, as you probably remember, one of the deciding factors in my acquiring the company that we acquired in Serbia, which is now Beam Europe, was that, that turned us into the fourth largest streetlight manufacturer. Don't quote me on that. It might be the fifth or the sixth largest or the third largest. I think it moves around a little bit.

But certainly, in top single digits, largest streetlight manufacturer in Europe. And they -- what they've done with manufacturing of BeamSpot and improving it and getting it going has been fantastic. And on top of that, I additionally acquired a power electronics firm in Serbia, which allowed us to put bespoke power electronics in the latest version of BeamSpot.

So look, said another way, I can presell the negative, if you like. We were probably a little early on releasing BeamSpot because we didn't really know how to sell it, and we've made some very significant upgrades to it. We are much better at knowing how to sell it now, and we have made those upgrades to it. Now it's much more manufacturable than everything else. And I think you're going to see a lot more of it deployed in the near future and adding to our backlog.

Great to hear. And then is your primary assembly manufacturing facility now in Serbia Are you doing some of the battery storage work there as well? Or can you talk about the footprint in manufacturing footprint?

Yes. Yes. No, the answer is no. We are -- Chicago is still, without a question, our battery center of excellence. That's where our scientists and our engineers and technologists who are used to doing that. However, it is part of my plan in the future to start battery manufacturing in Serbia with the excellence and understanding that we have from our Chicago facility.

But manufacturing, we're certainly very good at manufacturing in Serbia. BeamSpot will, from a structural elements point of view, certainly be manufactured in Serbia because a lot of it is automated, and we just don't have the machines and everything in the U.S. to do that. We're still manufacturing in the U.S. Frankly, I would have done a lot more manufacturing in Serbia and probably brought some of that into this country if it wasn't for the tariffs. Serbia was hit with 37% tariffs, which is 1 of the highest of all the countries in the world, even though the entire trade is about $800 million. This is a drop in the bucket. Something about the magic in the equations that were used to work out these tariffs.

Now of course, those tariffs have been judged illegal or whatever by the Supreme Court, but there is still other tariffs, Section 232 and 300 and so on, that we have to contend with. So that put a bit of a fly in the ointment for the plan there. But now, of course, Beam Europe is the manufacturing center for our beginning efforts in Beam Middle East. Until we get to enough volume there to be manufacturing there, we will use the Serbia as a factory for all of Europe and the Middle East and indeed, into Africa.

And by the way, I didn't mention it in the call, but I'm going to East Africa next week. I'll be in Kenya, Tanzania and Rwanda. I'm not going there for sun time. I'm going to because we have tremendous opportunities there as well. And Serbia will be the manufacturing for that again until we get to sufficient volume to do it in the UAE.

The next question is from Ryan Pfingst with B. Riley FBR.

I wanted to come back to the battery product and drone opportunity. You mentioned the energy density. Can you just talk about some of the battery characteristics that make it an attractive product for drone manufacturers, perhaps even what the specific energy density actually is of your battery product? And is the opportunity mainly here in the U.S.? Or is there interest that you're fielding internationally as well?

Yes, those are all great questions. Thank you. So let's start with what differentiates us and why we would be interesting to a company like Ray Systems or to the several there. By the way, just to start off, we put batteries in more drones than I can talk about. Drone manufacturers are quite jealous of their proprietary information. And I wish -- there was a couple of names I wish I could mention to you right now, but I'm not allowed to. We have confidentiality agreements with them. But I just want you on the call to understand it's more than one. It's many, and there are really specific reasons that we do it.

So to your questions. First of all, most people, as you know, make batteries that are square or rectangles. Now, I have an engineering background. If I'm going to build a drone, I do not want to build it around somebody else's square or rectangle. Beam, we are able to make bespoke shaped batteries. We can fit energy storage into confined real estate spaces, and we're not slaves to squares and rectangles. And that's really important when you're making drones, particularly the higher up the value chain they are in terms of their missions that they've got to perform.

Ray System is a perfect example of this, an incredible device that travels silently underwater over a great distance, almost impossible to detect. They can't just be putting a big lumpy rectangle or square in there. And so our ability to give them energy density and bespoke shapes and real estate is really important.

The second thing is, yes, we can increase the energy density. We do increase the energy density. And most of that comes down to our proprietary and patented thermal energy management solutions. Because we're able to manage the thermal properties of the batteries without having external cooling or heating. And in very tight and efficient packaging, we can get more energy into the battery cells. We can take more energy out to those battery cells quickly without having the thermal problems. We also prevent thermal runaway, which is the thing that you've all seen with the fires and those sorts of stuff.

So all of these things are incredibly valuable to drone operators. They want safety. They want length of life. But it also turns out making -- turns out it makes the batteries less expensive to own. Even though our batteries are more expensive than off-the-shelf solutions that they can buy, they end up having a lower total cost of ownership because they last longer and the cost per store energy is lower and because they don't have to build their devices around shapes that they don't like.

So we bring a whole lot to this and a lot of experience and some excellent customers already, but we're just getting started on that. Yes, a lot of it is in the U.S. But as I mentioned, Ray Systems was a good example there, U.K. based. There's a couple of other -- I mentioned we're working with some autonomous boat companies. These are -- I mean that's a drone in a way, but it's a boat. I can't go into too much detail on it because again, this is also a secret, but they're outside the United States.

And then from our BeamFlight product point of view, it's like an EV ARC, works anywhere in the world. And in the Middle East, for example, if you think about some of the borders between Saudi and between the -- between Jordan and Syria, where a lot of drug trafficking and arms and terrorism and stuff like that, our ability to deploy BeamFlight along those types of borders and create border curtains of drones that do not need to come back to an operator, centralized infrastructure to recharge, I believe there'll be tremendous value in that, and we are certainly going to aggressively sell that in those regions.

And then just finally, if you -- what you know about Ukraine, the drone operators sending drones out into contested environments, flying a mission, and then returning the drone to the operator, which means you can target the drone and the operator, BeamFlight removes that risk because the drone can recharge in a contested environment and carry on in it's -- about its mission without returning to an operator. So it's a -- a big part of it's our capabilities with our batteries. A big part of it is U.S., but there's also already significant international opportunities that we're executing on. We believe there are more coming in the pipeline. And then it's not just about the batteries, it's also about BeamFlight and that tremendous enabler.

Great. I appreciate all that detail, Desmond. And then just switching gears and thinking about this year from a high level and understanding there's a lot of moving parts. But could you give some insight on how you're thinking about 2026 from a growth perspective or perhaps a product mix perspective?

Right. Well, so first of all, full disclosure, I'm really s*** at forecasting things. I did not see the election coming. I did not see this war coming right now. I mean, I think we've all seen it coming for a little while. There's a whole lot of things I didn't see coming. So I'm just qualifying what I'm about to tell you by saying that.

Because I recognize that about myself, and I think just about any human being, I don't know anybody that can properly forecast these things, the most important takeaway and the most important answer to your question is diversification. What we have done is we have immunized ourselves from the situation that we were in before. And you can say shame on us, but remember, we did $6 million, $9 million, $22 million, $70 million in revenue in those years, selling that EV ARC product. So I think it was appropriate that we stayed the course with that. But we've immunized ourselves from that kind of product concentration and customer concentration.

We now have this broad portfolio of products. We're now selling not just in one country, but internationally. So if I was going to answer your question without getting into specific because as I've already said, I'm pretty rubbish at forecasting those kind of things, what I will tell you is this. It makes sense that with a diversified set of products, all of them are very relevant. Energy storage, autonomous vehicles, drones, electrification, smart cities. All these things are very relevant. We're now selling them. We've already sold into 23 nations. We're now selling them globally.

We just opened Beam Middle East. So 2026 is going to be a story of diversification and growth and sustainability because if we have a failure in one market or with one product, all the others will continue to operate. That has not been our history, and we paid the price for that heavily in 2025. It was -- in my way -- in many ways, the most challenging year of our history, and we've had some doozies, but we are immunizing ourselves and we're creating opportunities that will not be negatively impact in that way. So sorry, it's a long-winded answer, but the correct answer to your question is revenue will be from diversified products from diversified customers, from diversified geographies, and that's exactly what I want it to be.

The next question is from Noel Parks with Tuohy Brothers Investment Research.

Great. In particular, I was interested in your comments on the smart cities infrastructure products. I just was curious a little bit about the sales process for those. I was wondering if it's more of sort of a push or pull type situation, such as -- are you at Beam sort of presenting the vision to customers for what might be achievable and how they can kind of future-proof themselves? Or is it more of that sort of an incoming planned integrated strategy like sort of formal RFPs coming in that you're responding to?

Right. So another reason that I acquired the company that we acquired that's now Beam Europe is because I really wanted us to get heavily into this space. I love stuff that looks boring, and then the fact is really interesting. So streetlight is a perfect example. What can be more boring than a street light? But if you think about what streetlight is, it's a piece of powered infrastructure every 10 meters on every street and every city in the world. You've got power, and you've got a mounting asset. When you start adding intelligence to that, that starts to become very, very interesting. And that's the area that we're pushing hard into. And I knew it would be a challenge to sell it. And because of what you just pointed out, that frankly, it still is more push than pull.

I want it that way, by the way. When it becomes pull, it becomes commoditized, and that drives margins down. What we're doing is we're leveraging all the relationships that we've had as a result of our acquisition, 30 years of selling this type of street furniture and infrastructure across Europe and even into Africa. In fact, even in the U.S., we've got streetlights in the U.S. that we manufactured. We're leveraging those relationships. We know that the direction of all these cities is to move to smart cities infrastructure because they want energy savings and they want information coming from the streets.

And our ability to detect a gunshot, hear if a woman screams, know if the air is unhelpful, know if a drone is flying overhead, our ability to do all this and add all of that kind of stuff to build infrastructure, I believe is going to become very, very important to them. And it already is. But it is still more push than pull, but we kind of like it like that, and it's working for us. And I think we're going to really concentrate heavily on that part of the business because it's a massive. I mean, basically, you're turning streets into the Facebook of infrastructure, just gathering a lot of data, making it available to our customers. And we have a tremendous foot up and leg up in our ability to lead in that space.

Great. And sort of building on something you touched on a little earlier with a question about product mix. I was wondering in particular about margin trends this year. And I wondered, do -- sort of the -- sort of full year average margins. Do you anticipate them varying a lot with product mix? And I'm just sort of wondering what your visibility is like there, whether pretty -- you have a pretty good idea of where margins are headed or whether a lot is going to depend on sort of exactly what sells when?

I'm happy that some of the things that we are doing, which are the hardest to do and therefore, capture the highest margins are some areas where we're seeing some growth, some meaningful growth.

That's helpful. I'm also happy that we have, for the last several years, improved our unit economics. And those -- across the board. And that goes all the way from the dumbest stuff that we're making to the most expensive stuff we're making. We're just getting better at what we do across the board. So we're -- those unit economics improvement -- you can -- if you're in manufacturing, unit economics is everything. Right? Because if you don't have that, you're losing money every time you sell a product, sort of make it. Well, we're getting better and better at that. And that's being reflected in the growth that we're reporting across the company.

I will tell you this, we're not targeting specific areas because of -- because they are higher or lower margin right now. We believe in our strategy. We believe in the 3-legged stool, energy storage and security, smart cities infrastructure, electrification and mobility and transportation. We believe in those 3 stools, and we have capacity to aggressively grow all of them.

So at the moment, we're not going to target things over margins. But what I -- from a strategy point of view, what we will continue to do is to seek out the things that are hard to do and require really excellent people, scientists and engineers and the kind of people that we have on our staff and that we proved over and over again can solve problems that other people can't because that's where we're going to get the highest margins.

But the batteries for the drones is a perfect example of where we're getting good at selling something, which is more expensive than the off-the-shelf thing and yet helping our customers understand that it will actually cost them less in the long run. And that's the sort of ultimate goal, right? To sell something that's expensive and high margin and you have the customer spend less. Smart cities infrastructure is a perfect example of that. A streetlight with intelligence is going to be a lot more expensive than a dumb streetlight, but the city is going to be better off because of their ability to gather the data and manage the city and do all the other things that they do along with that.

I have -- I know I didn't properly answer your question because the answer is I don't know. I don't know exactly where the profit centers are going to be because, as I say, it's pretty fluid, and that's why we've made this very diverse business so that we're confident that we will hit in several of our areas even if we don't hit in all of them.

This concludes our question-and-answer session.

Thanks, operator. No, sorry, I was just saying we're a little over time here, but it sounds as though we've come to the end of the questions anyway. So operator, it's all yours.

I'm just going to turn it back over to you, Mr. Wheatley, for any closing remarks you might have.

Okay. All right. Well, you're probably sick of hearing me talking. I've talked quite a lot here. As you could tell, I still don't lack enthusiasm. I'm very happy about this business. I'm happy that I'm going to go and see our people in the Middle East and all the opportunities that we're building on there.

And I just really encourage several things. First of all, look at the noncash operations of the company. Don't just look at the cash line on the balance sheet, look at how much cash we really have in terms of AR and backlog and those sorts of things. And then, yes, what I really want people to understand is that the company you thought we were, the solar powered electric vehicle charging company, we are still that. That's still an important part of our business, particularly where autonomous vehicles is concerned, but it was 11% of our backlog at 12/31. We are doing a yeoman's job of building our energy storage, our smart cities infrastructure and all the other mobility products and everything else that we've got. So please start thinking about us differently, start recognizing that we are that diverse company, and we will return the results to prove that, that's the right way to think about being global moving forward.

And with that, I thank you all very much for your time and apologize for going a few minutes over here.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, and welcome to the Beam Global Third Quarter 2025 Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead.

Hi. Good afternoon, and thank you for participating in Beam Global's Third Quarter 2025 Operating Results Conference Call this Friday afternoon. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, President, CEO and Chairman of Beam Global. Desmond will be providing an update on recent activities of Beam, followed by a question-and-answer session.

But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the SEC. The content of this call contains time-sensitive information that is accurate only as of today, November 14, of '25. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

So next, I'd like to provide an overview of our financial results for Beam's Q3 of 2025. For the third quarter of '25, our revenues were $5.8 million, and our year-to-date as of September of '25 was $19.2 million compared to $40.9 million for year-to-date September of '24. The revenue decrease is largely unfavorable due to the order timing, which we believe will turn around in the future quarters. Desmond is going to discuss this in further detail momentarily.

Revenues for the 9 months ending September 30 of '25 were diverse across commercial entities and state and local governments, with significant rebalancing towards our enterprise customers, where 67% of those revenues were derived from commercial customers compared to only 31% in the same period of '24. Additionally, for the same period, our international customers comprised 39% of all revenues in '25 versus in 20% in '24. Our contracted backlog as of the end of Q3 of '25 was $8 million.

Our gross profit for Q3 of '25 was a negative $28,000 or a 0.5% gross margin loss. This was driven by the impact of fixed overhead allocations on reduced reported sales compared to an 11% gross margin for the same period in '24. The gross profit for '25 and '24 includes a noncash negative impact of $800,000 for depreciation and amortization. Without this noncash expense, which is non-GAAP, our gross margins for Q3 of '25 would be 13% with a gross profit of $700,000, and Q4 '24 would be a gross margin of 18% with a gross profit of $2 million.

Our gross margin year-to-date September 30 of '25 was 10% compared to a gross margin of 12% for the same period ended in '24. Our year-to-date September 30 of '25 excluding the noncash items of depreciation and intangible amortization was at 22% compared to 18% in '24 a 4 percentage point increase.

The company has continued to recognize synergies and report positive gross margins from the company's acquisition. We expect the company's revenue to grow in the future and the company's fixed overhead absorption will improve. The total operating expenses were $4.8 million for Q3 of '25 compared to a credit of $50,024. Remember that our '24 operating expenses included a $6.1 million noncash change in the fair value of contingent consideration for the Amiga acquisition. Without the noncash items, which is non-GAAP, it does make the expenses more comparable.

Our operating expenses improved $1.5 million, which is a 30 percentage point [ increase ]. The decrease in expenses year-over-year is mostly attributable to efficiencies implemented, driving a decrease of $600,000 for salaries and benefits, $300,000 for sales and marketing and $300,000 in other G&A, which is mainly savings in our European operations. Our total operating expenses were $26.8 million for Q3 of '25, which included noncash totaling $15.4 million, which is mainly $10.8 million for the impairment of goodwill that we recorded in Q2 of '25. Without these noncash expenses, operatings were $11.4 million, an improvement of $1.8 million and 14 percentage points over the same period in '24.

The Q3 net loss was $4.9 million compared to $1.3 million net profit for the same period in '24. The third quarter '25 net loss, excluding noncash items, which is non-GAAP, was $2.8 million compared to $3 million for the same period in '24, an improvement of $0.2 million or 7%. The year-to-date net loss as of September 30 of '25, excluding noncash items, was $7 million compared to $5.8 million for the same period in '24.

Our cash balance at the end of September was $3.3 million compared to $3.4 million at June 30 of '25 and $4.6 million on December of '24. Our working capital balance at September 30 was $10.9 million compared to $9.8 million at June 30, an increase of $1.1 million. We have historically met our cash needs through a combination of debt and equity financing and more recently through our increasing gross profit contributions.

I will now turn the call over to Desmond to provide our business update.

Thank you, Lisa, and thank you all for joining us here today to go through this update on Beam Global's operating activities and third quarter results. I'm speaking to you today from Abu Dhabi in the United Emirates, where it's 1:30 on Saturday morning. It's been a busy and a kind of a long day, and it's also been a busy week. Actually, it's been a couple of busy weeks on the road. So if I'm not the usual ball of fur that you get on these earnings calls, don't, for 1 minute, put that down to any lack of enthusiasm for Beam Global or what we're doing. It's just that my batteries are running a bit low and it's possible you may detect some of that on the way that I deliver my comments.

The truth is actually anything but a lack of enthusiasm. I've been having an exciting and very fruitful week here in Abu Dhabi, and I'm absolutely thrilled about what we've done in creating Beam Middle East. We've literally just this week opened our new offices here. For those of you who are not aware of this, Beam Middle East as a new company, which we set up as a joint venture with The Platinum Group, chaired by his Royal Highness, Sheikh Mohammed Sultan Bin Khalifa Al-Nahyan. Look him up, please.

The Platinum Group is a multibillion-dollar conglomerate, which is very active in technology, real estate, financial services, energy, gold, foodstuffs and other industries across the Middle East and increasingly, Africa. The joint venture is a 50-50 equity partnership between Beam Global and Platinum each owning half of the equity in the entity. It's excellently structured for Beam Global because any and all costs which we incur supporting Beam Middle East in the preprofit stages are returned from 100% of the first profits that come into the company. Said another way, we get paid back for any cost we incur before there's any profit share with The Platinum Group.

I've been working with The Platinum Group now for several months, first closing the joint venture agreement and then setting up the new entity in Abu Dhabi, which includes setting up and opening our new offices here. I've also just spent the last week with them, creating opportunities for growth for Beam Middle East, and I'm happy to report that I found them at all times to be very willing and capable partners whose knowledge of the way the United Arab Emirates work, combined with their excellent relationships at the highest levels, seems very likely to create fantastic opportunities for us here.

Monday through Wednesday of this week, Beam Middle East was prominently represented at DRIFTx, which is an autonomous vehicle, drone, electric vehicle and robotics trade show and exhibition. This is a fantastic show for us. We had a booth prominently positioned next to the main stage. And more importantly, we also had an EV ARC kind of BeamBike set up directly in front of the main entrance of the exhibition. We were the only EV charging infrastructure product at the event which actually worked. We provided charges to the VIPs who drove electric vehicles to the event.

We were certainly also the only company with fully autonomous off-grid rapidly deployed charging infrastructure solutions, and we were also the only company with a fully autonomous off-grid electric bicycle solution. It's interesting that although the show was full of fantastic new technology, drones delivering packages, autonomous air taxes, autonomous vehicles of every shape and size for law enforcement, the military, agriculture, food delivery and current other applications. Nobody there had a way to rapidly deploy highly scalable charging infrastructure for all these vehicles.

Beyond that, all the vehicles that were there still require a human being to plug them in to charge, which is hardly very autonomous. It was a fantastic opportunity for Beam Middle East to demonstrate that we have solutions for both of these challenges. Nobody can deploy charging infrastructure more robustly, faster or less expensively than we can, and our patent-pending wireless charging infrastructure solution creates the perfect platform for autonomous vehicles. We're not conducting their missions, and when in need of a charging session, they can simply pull on to our engineered base pad and charge wirelessly without any human intervention.

We had an unbelievable response to these capabilities and are already meaningfully engaged with several of the presenting companies. I was accompanied to this event by [ Ivan Plachinik ], who runs our Beam Europe operations. Members of our Beam Europe team from Serbia and also members of our Beam Middle East team, all of us were extremely busy from early in the morning on the first day of the event to late in the evening on the last day. I was actually invited to speak on the main stage to a very well-attended room about the impact that Beam Middle East will have on this region's plans to electrify transportation and to invest $1 trillion -- $1 trillion -- on sustainable infrastructure in the coming decade. They gave me an excellent opportunity to speak to a room full of powerful decision-makers about the value that our products bring to the electrification of transportation, energy security and smart cities' infrastructure.

It was also an excellent opportunity for me to ensure that everybody there knew that Beam Middle East is the combination of a California headquartered NASDAQ-traded company and the very powerful and influential Platinum Group. It cannot be overstated how important it is to have a local presence in this region and a well-respected partner when seeking success here. We now have both.

I was impressed time and time again by The Platinum Group's ability to bring top leadership from government and the largest organizations in this region to meet with me. This allowed me and all the other members of our team to go straight to the benefits of our products and the value that they will bring without having to go through a lengthy and often risky process of creating credibility with a new audience. I'm very bullish about our opportunities here.

After the event, I've just spent a day in Dubai meeting with two other autonomous vehicle companies, both of whom have significant opportunities for our EV ARC with its wireless charging integration. I also met with several drone companies who can benefit from the use of our patented BeamFlight autonomous drone charging system. It's something we used to call UAV ARC, but we're now calling it BeamFlight. This fantastic product is one that I've had a patent on for a couple of years and originally developed for war fighting scenarios.

BeamFlight can be deployed in contested environments and allow a drone operator to fly a drone out to a mission. And crucially, when the drone requires charging, it can land on BeamFlight to recharge instead of returning to the operator, causing risk of being targeted if the enemy follows the drone back to them. BeamFlight removes that risk, and it can be deployed anywhere without construction or electrical work or any other type of activity.

But it turns out there are a host of other commercial and military applications for this type of technology, and you're going to see us focusing heavily on that in the coming months. The great thing is that here in Abu Dhabi and the United Arab Emirates in general, the government and regulators are incredibly open to these new technologies and the rate of acceleration of the use of drones and autonomous vehicles here is breathtaking, especially viewed from the U.S. experience. We're actually able to work with drone developers and manufacturers and autonomous vehicle developers and manufacturers and move very quickly to creating solutions with them without being bogged down by time-consuming and often impossible regulatory barriers.

Beyond that, the investment is here, and there's a vibrant market for these types of solutions. So we're not developing pie in the sky products that might be used sometime in the distant future. These are solutions that are needed today, and Beam Global has the patented technology to provide them.

I'm really excited by the opportunities that I'm seeing here and by what I know that we're going to release to solve for many of the challenges faced by both drone and autonomous vehicle operators. Beam has the perfect technology to solve for these challenges. And now that we have Beam Middle East and our partnership with The Platinum Group, we're ideally positioned to put our technology innovations to work in this rapidly developing market, where eye-watering investments are being made daily.

Prior to coming to the Middle East, I was in London. And while there, I met with another drone company for whom we are currently developing batteries. I can't talk too much about this drone company or what they're doing, except to say that it's a submersible. But I can tell you that our fantastic battery scientists in Chicago have already developed a solution which will provide this drone manufacturer with double the energy density and about twice the life span in a battery pack than the one they're currently using. This will allow the drone to stay on mission for much longer, and it means that they'll have to replace the battery much less frequently, which again allows them to stay on mission longer. We are confident that the battery we're developing for this drone, which we're fitting into incredibly tight real estate, will also be much safer and reduce the risk of any type of thermal runaway event. That means that the drones will be less likely to experience any kind of malfunction, making them more reliable, safer and less expensive to operate.

Now it turns out that our batteries are actually more expensive to buy than the ones that they're currently using, but their total cost of ownership for batteries will be reduced because of the tremendous expansion in utility that occurred when you use ours. This is exactly the sort of application that our battery team are very good at attacking, and it's perfectly in line with the strategy that I've always had for our battery operations, which is that we should not try to compete at the commodity level. Rather, we should do the really difficult things for highly discerning customers and differentiate ourselves in ways that allow us to charge a margin which is much higher than the commodity producer could charge, but which creates so much value for our customers that they're happy to pay it. And that's certainly the case in this instance.

We've seen a 21% increase in our Energy Storage Systems business this year. And what's exciting is that those revenues have come, yes, from some existing customers, but mostly from new customers bringing extremely challenging requirements to us, which we're fulfilling in a unique and highly differentiated manner. We also continue to win new patents, further differentiating our batteries and other products from the competition. And these are not empty patents. They cover extremely important aspects of our differentiated technology and will provide real and meaningful value to our customers moving forward.

This weekend, I'll be traveling to Jordan, continuing my Middle Eastern odyssey, where I'll be visiting the deployment of our BeamWell product, which is currently in use for the Royal Jordanian Armed Forces Medical Services in a field hospital. This fantastic technology solution provides electricity for cooking and the refrigeration and medical supplies, highly ruggedized e-mobility, and most importantly, a reliable source of drinking water from salt, brackish or foul water. It's our intention and the attention the Royal Jordanian Armed Forces to move BeamWell into Gaza, where it will provide humanitarian relief for those who need in that war-ravaged region. There's a lot of water in and around Gaza, but of course, it's all salty or brackish, and we clean it up and make it drinkable.

But we're already discovering that BeamWell can provide many other valuable services. For instance, when we first developed it, we only assume that the water would be used for cooking and drinking. But we've learned from the Jordanian Medical Services that they also really need it for dialysis and other medical procedures as well. Of course, these applications are not only needed in Gaza. But BeamWell is also a fantastic solution for many parts of the world which are ravaged either by war or natural disasters like hurricanes, floods, wildfires or earthquakes.

The United Arab Emirates, where I am today, is actually the largest donor of financial aid to that region, and I'll be working with The Platinum Group and other influential people here in an effort to fund many more of these systems. Further travel this year will take me to the Caribbean, where Jamaica has just experienced the most powerful hurricane in its history. Hurricanes are not more frequent than they used to be, but they certainly seem to be getting much more powerful. And the people in the Caribbean are very sensitive to the fact that they lose electricity and fresh water every time these types of severe weather events take place.

Beam's suites of off-grade energy generation, energy security and now desalinization products are a perfect fit for solving these risks and challenges, and I'll be working with the U.S. government representatives and through other relationships to ensure that governments and commercial enterprises alike understand the tremendous capabilities which we can rapidly and scalably deploy in these island communities. We already have EV ARC deployments in Puerto Rico and in the U.S. Virgin Islands, so our product is well tested in these environments.

During Hurricanes Irma and Maria, we were able to demonstrate our EV ARC product can withstand Category 5 hurricane winds and continue to operate without incident. Also, notably this year during Hurricane Helene, our EV ARC products continue to operate during 140-mile hour winds, and absolutely uniquely in the industry, while also submerged in up to 8 feet of storm surge. Our customer there, the U.S. Army, informed us our products were the only things that continue to operate and deliver electricity during Hurricane Helene.

It's clear that we have a fantastic solution to solve for the significant risks and challenges being faced by communities that are prone to extreme weather events, particularly high winds, flooding and storm surge. All of these opportunities and many others are new to our company and provide a host of new avenues for us to generate revenues and profits with the technologies that we've developed and deployed over the last many years. At a time when EV charging infrastructure deployment is being focused on less in the United States, particularly by the federal government and the current administration, I'm really thrilled that we've created products and technologies which have a vast array of potential to solve real-world problems in places where there's actually funding to pay for those solutions.

The expansion of our product portfolio and our geographic expansion into Europe, and now the Middle East, mean that we're decreasingly reliant upon the purchase of our products for EV charging in the United States. I'm still very confident that we'll have to deploy lots and lots of electric vehicle charging infrastructure in the U.S. in the future. But during this current lull, I'm also very confident that we're going to see tremendous success with EV charging infrastructure products in other parts of the world, where the growth of electric vehicles is still staggering.

I can tell you that here in the Middle East, there are so many electric vehicles, it's really mind blowing. Sadly, almost all of them Chinese, but there's tremendous growth over here and also in Europe. Also through the deployment of our energy security, disaster preparedness and smart cities infrastructure products that we're going to see a lot more growth there, too. Not to mention the significant global appetite for the types of batteries, solutions that we're able to provide through our patented portfolio of energy storage products.

Drones, submersibles, autonomous vehicles, electric vehicles, robots and countless other applications are seeking highly energy dense and safe battery solutions. And those are exactly the sort of energy storage systems that we create and manufacture in our Chicago facility.

Our third quarter revenue of just under $6 million was not what we were expecting, largely because we've received an award from an existing customer from whom we would have received many -- from whom we have already received many prior purchase orders. And this was to deliver just over $3 million worth of EV ARCs, and we expected to deliver those EV ARC systems in the third quarter of this year. We went so far as to manufacture them in our San Diego facility. However, it turns out that this order was originally funded by the Federal Highways Administration with dollars which had been approved by Congress. Nevertheless, the current administration has seen fit to withhold those funds. And as a result, we've not deployed those systems as of yet. That's the bad news.

The good news is that I've known this customer for a long time and I've recently talked to them, and they told me that they're going to move ahead with the deployment anyway because they have separate funds with which to do it. We'll have to go through a new budgeting process, which is why we were not able to do it in the third quarter. But in the end, it will be just like everything else to do with the electrification of transportation. It's going to happen. It's merely being delayed by the current administration. I think it's unlikely that it will happen in the fourth quarter this year, but I do think it's very likely that it will happen in the first half of next year when the new budgets are finalized.

Had we executed on that order as we expected, we would be reporting closer to $10 million in revenues with significantly improved gross margins of around 20% GAAP. Our product gross margins are running about 44% year-to-date. So you can see that the dip in growth for Q3 is driven by overheads and fixed allocations on a lower number of system sales recognized in the third quarter. So this reduction in revenue in Beam Global's Q3 of 2025 is actually just driven by order timing rather than by anything fundamental. Had we delivered those units as we expected to, we'd be reporting another quarter of growth with further improvement in gross margins.

As it happens, we had a bit of a perfect storm of negative government activity, both in the United States and in Europe during the third quarter. Our European operations also saw a reduction in the delivery of their legacy products, which we anticipated for the third quarter because of political unrest in Serbia and the Balkans. Here again, we don't expect that these orders are lost. They simply moved right, and we're confident that we'll deliver on them to some extent in the fourth quarter this year and certainly in 2026 early.

Things are otherwise really picking up for us in Europe. Beam Europe actually contributed about 40% of our revenue in the third quarter. And what's really important is that we now have awards to tenders that we've been working on to deliver EV ARC systems to several cities across Europe. This is a perfect example of our strategy to expand both our product portfolio and the geographies into which we're reaching because what's happening is that while Europe is having some slowing on its traditional products caused by the political climate, which I've already mentioned, they're able to find ways to increase their revenues with the new product portfolio that they've inherited as a result of being acquired by Beam Global.

At the same time, Beam Global the parent is benefiting from increased revenue opportunities as a result of Beam Europe's activities. So you can see how these two strategies, geographic expansion and expanding product portfolios across both markets is coming together to defend us for some of the worst aspects of the current market and to create growth in spite of these conditions. I really don't believe we've seen anything like what Europe will do, and I'm looking forward to continuing improvements in the percentage contribution from Europe to our overall revenue picture.

And now, of course, we have the Middle East, where we fully expect to make further sales [ at Gardner or ] revenues. So we're bringing lots of new opportunities for growth to the company even in trying times, and we're doing it without spending vast sums of capital or taking on debt. We currently have about $8 million of backlog, and that doesn't include the $3 million deployment that I just described to you a few minutes ago, and it also does not include any of the EV ARC deployments in European cities which are coming about as a result of the recent awards we have won from the tender processes. The reason for this is because we don't include anything in backlog until we have a hard and fast purchase order for it. So when we actually hear of an award from a tender or receive a verbal award from a long-standing customer with whom we've done lots of business and all have been paid, we don't actually include those in backlog until those customers issue purchase orders to us, which is sometimes the very last thing they do just before we ship.

Takeaway is that this $8 million worth of backlog that we currently have, which again are confirmed purchase orders, doesn't really tell the full story about the commitments that we have to buy our products at this point. And of course, it also doesn't include anything at all from the Middle East yet. In some ways, you could see that we're operating in the worst time in our history from a political point of view, both in the United States and I'm afraid to say, in the Balkans as well. And yet, we're finding ways to create new opportunities for growth, and we're still winning business and executing on it.

The battery business growth with the new contracts, some of them so secret that I can't even talk about them, combined with other business activity, like the fact that we've already deployed BeamBike now for customers in the United States and in Abu Dhabi, shows that these expanded product portfolios are not only allowing us to make up for the shortfalls in the EV charging business but, in fact, creating whole new avenues of growth. In the case of BeamBike, much of the revenue that we received from that initiative will, I believe, be recurring in the future. And in fact, I think you're going to see us bringing in several new sources of recurring revenue in 2026 from both our product portfolio expansion and also geographic expansion.

It just so happens that many of the new things that we're working on lend themselves very well to recurring revenue opportunities in the way that EV ARC sales previously did not. Now you might think that all of these initiatives that we're working on would mean that we'd significantly increase our operating expenses. But the fact is that we've actually reduced operating expenses in the third quarter through increased efficiencies and appropriate belt tightening consistent with the new reality of no federal sales in the United States. Not that we didn't make any federal sales at all in the quarter.

I'll tell you this to continue to hammer home that Beam Global is now and has always been incredibly disciplined with cash and equity. We haven't changed that philosophy, and we continue to figure out how to squeeze the maximum amount of value out of any investments that we make. This expansion into the Middle East, for example, has been done with very little capital because we're able to support all except our sales activities from our fantastic facilities in Belgrade and Craiovo until such time as we reach sufficient volumes here to warrant assembly, and then manufacturing facilities. But of course, those will largely be paid for and justified by cash flows generated by the business here in Abu Dhabi and the broader Middle East. We also view the Middle East, of course, as a gateway to Africa, and we'll be concentrating a lot on expanding into that market, just as The Platinum Group does.

So to sum up, it was a bit of a tough quarter from a revenue point of view because of the unfortunate delay caused to a significant order which we should have delivered during the period. But at the same time, we've managed to significantly increase our opportunities for new streams of revenue, both onetime and recurring, with fantastic and exciting product offerings and equally fantastic and exciting new markets. We haven't lost any of the orders that moved right, so we'll be able to take advantage of those in future periods. And the Beam team has continued to find ways to make our business more efficient and improve our products without increasing our overhead costs in any material way. I'm grateful to them for their efforts, and I'm grateful to you for your support and for continuing to invest in and follow this fantastic company.

I'll now return the call to the operator and take any questions which you may have. Operator?

[Operator Instructions] Our first question is from Tate Sullivan with Maxim Group.

I think it's two or three calls in a row, maybe that you're in the Middle East. On the wireless charging, I remember the patent, but had you gone through sales efforts with wireless charging before? Are you hinting at that based on your experience in the Middle East with interest in that product?

I've known for a long time that the wireless charging solution was going to be very important for the autonomous vehicle market. I think it's also going to be very important for the general automotive market, but it won't be until the automotive OEMs start to integrate receivers into the underside of their vehicles. That's -- the thing with wireless charging is it doesn't do any good for us to deploy the chargers and the transmitters if the car companies are not installing the receivers on the underside of the vehicles. And so far, they've been reluctant to do that for a couple of reasons.

The first one is that for a long time, there was not a standard in the industry. Just like it took a long time to get to a standard for the plug-in connectors, there was not a standard for wireless charting in the industry. That problem has been solved. But also, the car companies are reluctant to add cost to the vehicles through the addition of the wireless receivers so far. I think that's wrong thinking, frankly, because I think consumers will be all over this. The idea that you could just drive your car up to a station like ours and walk away from it, not even plug it in, and it fills up wirelessly, I think it will be something that consumers will demand.

But what's different now is that because we have so much exposure to both autonomous vehicles and frankly, also to drones, which will charge wirelessly in many instances off our BeamFlight product, we have companies with whom we can actually work. It's not like working with the Big 3 or the large automotive companies. These automotive -- autonomous vehicle companies are generally a bit scrappier here and a hell of a lot more entrepreneurial in their approach to this. And the regulations are also a lot less stringent, particularly where I am today.

So what you're seeing now is because we've had this patent pending for some time and we had the capability of doing this, we now have a market to provide it to, and that's why you're going to see an awful lot more activity on it in the coming weeks and months.

And then on the battery business or energy storage business, it sounds like you can't talk -- provide too many details, but is there a long trial period for the customers before they place orders -- or is that -- is this a special situation?

Yes. I mean, that's going to be customer by customer. In the instance that I'm talking about now, I think you're going to see a very quick move -- I mean, I say very quickly. There's still some development things to do. But these guys are hard to [ try ]. Again, very entrepreneurial. They have an absolutely remarkable system that's in demand. And the good news is they're already using a battery.

And as I said in my comments, what's different about what we're providing them is that we've doubled the energy density, which means that it can stay on mission for twice as long and also double the life expectancy of the battery in comparison to what they're using today with a much safer and more robust solution. And I think we're going to -- you'll see that a lot. A lot of drone operators are tending to go with kind of off-the-shelf battery solutions, which is not helpful to them for two reasons. The first one is that typically, these highly commoditized solutions don't always have the level of quality that we produce. But also, the drone manufacturers and operators are forced to design their devices around whatever square or rectangular box they are delivered off the shelf from these types of manufacturers.

Beam -- and very unusually, in fact, I think, uniquely in the industry, make batteries in just about any shape. And because of that, we can fit into real estate that's not necessarily ideal for the existing battery vendors. So I think that's going to -- that has always been important to me. I don't like the idea of drone operators, whether those are submersible or in the air or on the ground, having to design their products around a box. I want to make sure they design the product for mission, and then we'll design the batteries that they need for their real estate and do a better job of it.

And as I mentioned in my comments, the result of that is our batteries will probably always be a bit more expensive than the off-the-shelf ones to buy, but from a total cost of ownership point of view, be less expensive per energy delivered because of the longer life and the increase in energy density. So sorry, a long answer to your question. The result is -- the short answer is some of the -- in some instances, we'll be able to move quite quickly to orders. In other instances, we'll have longer development periods. But we often get paid for that to that -- the engineering required to do that.

The next question is from Ryan Pfingst with B. Riley FBR.

Yes. Well, the first one, a bit of a follow-up there. And earlier, you mentioned backlog is comprised of firm orders only as you've done historically. But for the larger pipeline of awards that could include maybe MOUs or earlier stage agreements, can you share what the breakdown might look like there between battery opportunities and EV ARC opportunities, maybe at least at a high level, how to think about that?

Yes. I mean, it's -- the battery opportunities are increasing. And then the other contributions are coming from other products as well. I mean, we now have the entire portfolio of products in our Beam Europe facilities, and they're contributing significantly to both backlog and to the sort of high probability pipeline.

And then our new products coming out, too. I mean, as I mentioned, BeamBike, we already have BeamBikes sold and deployed, and it's contributing to growth in our backlog as well. So what's really encouraging about this is while previously, backlog and pipeline was made up almost entirely of EV ARC sales, and certainly in 2023 and '24, very predominantly EV ARC sales to federal customers, now we're looking at a situation where none of our pipeline or backlog is made up of federal customers.

I shouldn't say none. I think there are still a few instances. Or for EV ARC, anyway. We are seeing interest from the federal government in our disaster preparedness and energy security products, which I've often said, we have a lot more in common with the current administration than a lot of people think because we do make Made in America energy security and U.S. energy solutions. So that's contributing to the pipeline as well.

But most importantly, what you're seeing much more diversified, a lot more of it coming from commercial customers a lot more of it, not just EV ARC related, but related to the other new products that we brought out over the last year or so. And certainly a significant and increasing contribution from our European operations as well.

Understood. Appreciate that. And then second question, can you walk us through how you're thinking about the cadence of team's opportunity in the Middle East, maybe when we might start seeing Beam Middle East show up in backlog and results for Beam?

Yes. Well, I've got to be careful about what I say here. As I said, I've had a very exciting week here. The event that we were at, DRIFTx, was just absolutely phenomenal, and we were very prominent in the way we were positioned at that event. In fact, we had some extremely important people come and spend time with me. They didn't spend time with anybody else at the event. And a big part of that is because I think there was a powerful realization that the thing that was missing there was the thing that was vital to all the other devices and vendors. And that was -- that none of them can operate if they don't have the opportunity to fuel, to use the crudest term, to recharge, as it were, because it's all electric. All of these vehicles are electric. There's nothing there that's not electric.

Again, this goes back to the comments I made during my prepared comments, which is that electrification is happening with absolute certainty across the board. And we're only going to delay it a little bit in the U.S., but it's happening everywhere, also a clip. And so the requirement for charging infrastructure is really dramatic. And again, our ability to provide it wirelessly to autonomous vehicles so that they don't need to plug in, just -- it's really been fantastic.

So all of that leads me to feel very enthusiastic about this market. And I wasn't having theoretical down the road conversations with people. I'm talking to people who have real needs today. There's always a process, and we are new to the market. But of course, we're new to the market with Platinum Group, and that gives us phenomenal credibility right off the bat. I mean, it really was impressive to see The Platinum Group executives who are there with me, they just -- they are connected at the very highest levels. And I was on a call early on today -- well, yesterday, it was now -- with Platinum Group and the CEO of an autonomous vehicle company, and his response to me was, I cannot say no to [ Dr. Hanaya Tape ], who's our representative at The Platinum Group. So just very well connected.

All of that to say, I'm very bullish about the market. It would be foolish for me to try and put any kind of a precise timing on things because there will be a process. But I think it will happen, and I think it's going to happen quickly. I think you'll -- I think we'll be announcing stuff in the not-too-distant future.

The next question is from Noel Parks with Tuohy Brothers.

Great. Good to talk to you. Just had a few things. Could you just maybe talk a little bit about where your total company manufacturing capacity stands? And I guess I was thinking or just wondering if on a year-over-year basis, it was essentially flat or if there had been some growth?

In terms of capacity?

Yes, in manufacturing capacity. Yes.

Yes, yes. Well, the truth is our manufacturing capacity is underutilized at the moment because, of course, we've had this decline. Let's be frank. We had unbelievable growth between 2020 and the end of 2023, and a great deal of it was driven by the fact that the U.S. was very heavily invested in and pushing very hard towards the electrification of transportation. And we were providing for that heavy focus. And so we built infrastructure in the U.S. to be able to cater to that. And we also built a sales machine to cater to that. It's quite specific, selling to the federal government, to the Army, to the Marine Corps, to Pentagon, Navy, Space Force and all the others that we've deployed for. It's a specific type of selling, disciplined team and process.

Now all of that has completely evaporated, 100%, because, of course, the new administration has different ideas about this stuff. We've had to pivot to do these other things. And fortunately, we do have the technology and we manage our business. We don't let things happen to us. We make things happen, and that's why we're doing all these different and wonderful things. Federal government will come back for us. There is no question about that. We will electrify. And when they do, frankly, they'll come back with more urgency. I can't say when that's going to happen because I don't know how long this thinking is going to continue. But there is no question that, that is going to happen.

And urgency is good for us because we deploy faster and more scalably than anybody else does. But the answer to your question is we have excess capacity in the U.S. right now because of that slowing down, very obviously. And then our acquisition in Europe got us 5x the factory space that we have in the U.S. under roof and several acres of land upon which we can build it. Again, we own all of that. We don't lease it. We have no lease operating expenses or anything else there. We own all the land and buildings in that factory facility. So we have massive capacity on hand right now for expansion and for growth.

And that is really good and really important, again, because of where I am today because our strategy in the Middle East is to invest in selling here. We've opened offices here, very attractive offices in Masdar City, which is the sustainability center pretty much of the Middle East, actually. And we've opened offices this year, but they are really focusing internally on selling and some administrative things that we have to do in the region.

We don't, as you have any assembly or any manufacturing or even assembly facilities in the Middle East. And the reason for that is because we don't need them because we are a 4-week container, right, away from our factory in Craiovo. So what you're going to see us doing is selling in the Middle East and then fulfilling those orders from our factory in Craiovo, which has massive increase in capacity.

And you asked me if we had an increase. Yes, we have, we're more efficient in Craiovo now and able to produce more EV ARCs than we were this time a year ago, and more of the rest of our products. In fact, the BeamBike products that are deployed in Abu Dhabi today were manufactured in Craiovo in Serbia and so is the EV ARC that are here, manufactured in Craiovo in Serbia by Beam Europe. So we're going to use that capacity to support this market in the Middle East until such time as we hit volumes that we anticipate and when we do hit those volumes, we'll start to assemble here, not manufacture, but assemble components that are shipped here from mostly from Beam Europe, but to some extent from the U.S. as well from time to time, particular batteries. And then we will move to full manufacturing facilities here when we get to those kind of volumes.

And I anticipate growth in the sale of all of our products in Europe as well. So we will use up that capacity there. And then as I've said before, I anticipate a return to appetite for electric vehicles and charging infrastructure in the U.S. as well. Because, again, globally, EVs are growing rapidly. And that's -- we're a global company, and we're going to target those markets where there's good growth and good activity and then come back to the markets where there's taking the eye off the ball for a while at such time as that changes, which I'm certain that it will.

Great. And I was wondering, with the EV ARC installed base, are there any trends that you're seeing with either sort of maintenance and repair expense? I was just thinking about the very earliest units, as they're aging, just assuming that must be increasingly something you're dealing with?

Yes. So we have thousands of EV ARCs deployed now. And you're right. I mean, obviously -- one of the -- it's good news. The bad news, right, you have a product that lasts for a really long time. I mean, we're going to see as we've got unit 003 outside our office. That thing has been in operations now for 15 years. And so yes, you've got a fleet there, that's got some aspects of it that are aging.

And actually, we had a couple of instances where we had things which go wrong with devices which we integrated into our product, which were made by other people and greater volume than we wanted or anticipated. And so we've had expenses associated with solving for those, and those are built into our financials right now. Those are gross margins. But the product is very well made. It's very robust. We don't cut corners in terms of the quality of the components that we use.

We're still disappointed sometimes by external components. That's one of the reasons that I acquired a power electronics company last year in Serbia because we use other people's power electronics and 99% of the failures we have on EV ARCs come from failures of other third-party products. So we're increasingly becoming vertically integrated because we can make the kind of components that are better suited for our products, make them work better, more efficient but also, frankly, fail less often.

But yes, we've seen costs associated with warranty expenditures. And again, those are all baked into our financials, but certainly not chronic, and it is a very robust and long-lived product, as evidenced by the fact that we have so many of the -- in fact, a very few of the -- I think we have a better survivability rate than Rolls-Royce does in terms of product out in the field right now. Very few of them have ever completely failed. And so almost all of them are still out there in the field and operating.

Great. That was interesting sort of that the rationale for the electronics acquisition was because of component reliability. And so yes, it does seem to make a compelling argument for the vertical integration. So thanks, really.

Yes, it's reliability. There's no question about that. It's also that -- because we make very unique products, nobody makes anything that's exactly right for what we do. And we end up having to spend a lot of time kind of crow-baring. And our engineering teams have to kind of fidget with other people's products to make them work precisely as we need them to. In the very -- don't forget, in the U.S., we're deployed in the hottest and the coldest in the wettest and the windiest places.

But there's also margin recapture I just don't like buying other people's boxes and paying the margin and paying for a lot of packaging and air and stuff that we don't need. And so it will make us a hell of a lot more efficient as we continue to vertically integrate and make the products much better and cost us less money to make them.

The next question is from [ Eddie Call ], a private investor.

Hello, Eddie. Thank you for being invested in our company. Eddie, you hear me?

Mr. [ Call ], your line is open on our end. Perhaps you have it muted on yours. Moving on, our next question...

I'm not hearing...

He's not transmitting. The next question is from [ Dick Grill ], a private investor.

My question is on the stocks. Back in December of '20, the stock shares were at $73, 78. And then in January, they dropped to $56. In March, dropped to $40. And since then, it's been in the $2 range. Do you foresee any time that price per share on the stock is going to rise? And second question would be, are you going to offer any dividends?

Yes. So Eddie -- or Dick, rather, thank you for bringing that voyage up. Yes, we have gone through that rotation out of growth stock, particularly growth stocks related to electric vehicle infrastructure and anything to do with sustainability, frankly. I'm bound to -- we are not alone. I track probably 30 or 40 stocks in our space. Everybody's chart looks exactly the same, even though some of those companies are not very good and some of them are really very good. And I count us amongst the very good companies.

The market -- what's happened to the market, there was a massive rotation out of growth stocks, about $6.3 trillion or $6.4 trillion moved into money markets, almost all of that money came out of growth stocks when interest rates went up. That's 1 contributor. And frankly, I'm just not expert enough to explain to you all the things that are going on in the broader markets.

But I can tell you this. We are 1,000x better company today than we were back in 2020 when we were trading at $73. In every way, we've improved. We've improved our margins. We've improved our products. We've expanded our product portfolio. We've expanded the geographies into which we've gone. We've acquired a European market. I mean, it's just -- there is no aspect of our business which is not vastly improved over where we were back in 2020.

And yet, we've seen this incredible decline in our share price. But again, so has everybody else. What our job is to do is to just continue making great products and selling them to great customers and doing them again because market rotations happen. And we see this -- we've seen this happen all time and time again throughout the history of the stock market. I'm a believer in the market. I'm a believer that it will come back and that we will be rewarded because we've, through this time, shown great discipline, discipline with cash and discipline with our equity. And we've thrived while the share of the company from an operating point of view has thrived while the share price has gone in completely the opposite direction. So I believe that we will be rewarded for that.

And I often say I think we will see new highs again in the future. Next time, it won't be because of an EV bubble. It will be driven by just fundamentals because we're doing all the right things. We're blocking and tackling, and we're doing all the right things with discipline to grow a really fantastic company. So I do believe that we'll see the share price improve. It's -- it would be foolish of me to say when because I just -- I'm no good at forecasting the market. If I was, I'd probably be doing something else for a living.

But I'm really good at doing what I do for a living, and so is everybody on my team, and they're all working very hard to create the fundamentals for a good company. Dividends, that's something that's in our -- that may or may not be in our future. But I mean like all companies aspire to dividends. And shareholder returns and shareholder value is our job. It's job #1. It's the #1 thing that we think about every day, and we will not stop thinking about that as we move forward. And I appreciate you being involved.

All right. Well, thank you, because I've seen big improvements in the company. But the stock price stays in $2 range, and I'm thinking, boy, they've had more orders than they've ever had in production and seem like the price would be going way up.

It should be, and I believe it will. I believe it will. It's just -- in the market -- I think it's safe to say the market is not always as rational as people sometimes think it is. But in the end, good companies that make good products and have discipline are rewarded and recognized by the market. And I believe that that's coming for us.

This concludes our question-and-answer session. I would like to turn the conference back over to Desmond Wheatley for any closing remarks.

Yes. Well, I mean I think that question from [ Jack ] was a hell of a way to end it here. As I said, we're a 1,000x a company we were back in 2020, more so now. I've seen nothing but opportunity for us here. And we -- look, it's a struggle to resteer the ship, right? We -- as I said earlier, we were very focused on the tremendous growth that was happening when the U.S. was heavily engaged in electrification of transportation. But we've got fantastic products that can do a whole lot of different things, and that growth is still very active across the world, and we're going to keep executing on it.

So you can count on us to do that, continue with the discipline, continue with improving products and continue increasing our opportunities, and I'm looking forward to that. So thanks, all, for being involved. Thanks for your time on the call this morning, or rather, this afternoon, and look forward to more great things in the near future.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.