Hyliion Holdings Corp (HYLN) 2024 Q2 法說會逐字稿

Good morning. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hyliion Holdings second quarter 2024 earnings conference call. (Operator Instructions)

早安.我叫艾瑪，今天我將擔任你們的會議操作員。此時，我歡迎大家參加 Hyliion Holdings 2024 年第二季財報電話會議。（操作員說明）

I'd like to turn the conference over to Greg Standley, Chief Accounting Officer. You may begin.

我想將會議交給首席會計官格雷格·斯坦德利 (Greg Standley)。你可以開始了。

Thank you, and good morning, everyone. Welcome to Hyliion Holdings first quarter 2024 earnings conference call. On the call today are Thomas Healy, our Chief Executive Officer; and Jon Panzer, our Chief Financial Officer.

謝謝大家，大家早安。歡迎參加 Hyliion Holdings 2024 年第一季財報電話會議。今天參加電話會議的是我們的執行長 Thomas Healy；和我們的財務長 Jon Panzer。

A slide presentation accompanies this conference call and is available on Hyliion investor relations website at investors.hyliion.com. Please note that during today's call, we will make certain forward-looking statements regarding the company's business outlook.

本次電話會議附帶幻燈片演示，可在 Hyliion 投資者關係網站 Investors.hyliion.com 上取得。請注意，在今天的電話會議中，我們將就公司的業務前景做出某些前瞻性陳述。

Forward looking statements are predictions, projections and other statements about anticipated events that are based on current expectations and assumptions as such, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from forward-looking statements made on this call.

前瞻性陳述是基於當前預期和假設的關於預期事件的預測、預測和其他陳述，存在風險和不確定性。許多因素可能導致實際結果與本次電話會議中所做的前瞻性陳述有重大差異。

For more information on both factors that may cause the company's results to differ materially from such forward-looking statements. Please refer to our presentation and press release as well as our filings with the Securities and Exchange Commission. You are cautioned not to put undue reliance on forward-looking statements, and we undertake no duty to update this information unless required by applicable law.

有關可能導致公司業績與此類前瞻性陳述有重大差異的兩個因素的詳細資訊。請參閱我們的簡報和新聞稿以及我們向美國證券交易委員會提交的文件。請您注意不要過度依賴前瞻性陳述，除非適用法律要求，否則我們不承擔更新此資訊的義務。

Thank you, and now I will turn the call over to Thomas.

謝謝您，現在我將把電話轉給托馬斯。

Hello, and thank you for joining us for Hyliion second quarter 2024 earnings call today, I am joined by Jon Panzer, our CFO. Over the past quarter, we've continued to make great progress with the commercialization of the KARNO generator and are continuing to build strong customer interest.

您好，感謝您今天參加我們的 Hyliion 2024 年第二季財報電話會議，我們的財務長 Jon Panzer 也參加了我們的電話會議。在過去的季度中，我們在 KARNO 發電機的商業化方面繼續取得了巨大進展，並繼續贏得了客戶的強烈興趣。

This progress includes building a backlog for 2025 shipments, exploring applications in new target markets and receiving positive customer feedback, highlighting their growing need for more power. We believe the KARNO generator can provide transformative power generation technology to address these ever-growing needs.

這項進展包括為 2025 年發貨建立積壓訂單、探索新目標市場的應用以及獲得積極的客戶回饋，突顯他們對更多電力日益增長的需求。我們相信 KARNO 發電機可以提供變革性的發電技術來滿足這些不斷增長的需求。

I'd like to start the call off with an update around our planned deployments for the quarters ahead. We have signed letters of intent with customers for all of the units we plan to deploy this year. These early units will be deployed into various target markets and some with select Fortune 200 companies.

我想先介紹一下我們未來幾季計畫部署的最新情況。我們已與客戶簽署了今年計劃部署的所有設備的意向書。這些早期單位將部署到各個目標市場，其中一些是選定的財富 200 強公司。

As we look ahead at 2025, I am pleased to share that we already have letters of intent with customers for over 50% of the units that we plan to deploy next year. We plan to disperse these units across a diverse set of customers that operate in many of the markets that we are targeting.

展望 2025 年，我很高興地告訴大家，我們已經與客戶就我們計劃明年部署的 50% 以上的設備簽訂了意向書。我們計劃將這些部門分散到在我們瞄準的許多市場中運營的不同客戶群中。

As we shared on our last earnings call, we anticipate these shipments to generate revenue in the low double digit millions of dollars. Included in this growing backlog for next year are two customers that we recently announced US energy and Flexnode.

正如我們在上次財報電話會議上分享的那樣，我們預計這些出貨量將產生數百萬美元的低兩位數收入。明年不斷增長的積壓訂單中包括我們最近宣布的兩個客戶：美國能源公司和 Flexnode。

US Energy, a division of US Ventures Inc. is a leading provider of refined products, alternative fuels and environmental credit within their portfolio of companies they own and operate natural gas and RNG fueling stations across the US.

US Energy 是 US Ventures Inc. 的子公司，是精煉產品、替代燃料和環境信貸的領先供應商，該公司在美國各地擁有並經營天然氣和 RNG 加氣站。

The LOI that we executed outlines plans to deploy a KARNO generator at one of their fueling stations to provide electricity to operate the station and ancillary equipment such as pumps and compressors. We also executed an LOI with Flexnode, a digital infrastructure company that specializes in building cutting-edge high-performance data centers that simplifies the design and deployment.

我們執行的意向書概述了在其一個加油站部署一台 KARNO 發電機的計劃，以提供電力來運行該加油站以及泵浦和壓縮機等輔助設備。我們也與 Flexnode 簽署了意向書，Flexnode 是一家數位基礎設施公司，專門致力於建置可簡化設計和部署的尖端高性能資料中心。

Flexnode has created a scalable data center solution that can be deployed at existing facilities or leverage existing infrastructure, one of the challenges faced by their customers and the industry broadly, it's finding reliable sources of clean power for these megawatt scale data center solutions.

Flexnode 創建了一個可擴展的資料中心解決方案，可部署在現有設施或利用現有基礎設施，這是其客戶和整個產業面臨的挑戰之一，它正在為這些兆瓦級資料中心解決方案尋找可靠的清潔能源來源。

Flexnode plans to integrate up to 10 KARNO generators starting next year to help solve this problem. By coupling a scalable data center with scalable power generation, we are enabling a solution that can be easily deployed and tailored to customers' needs.

Flexnode 計劃從明年開始整合多達 10 個 KARNO 發電機來幫助解決這個問題。透過將可擴展的資料中心與可擴展的發電相結合，我們正在提供一種可以輕鬆部署並根據客戶需求量身定制的解決方案。

Please note that the letters of intent that have been executed with customers are nonbinding, and these deployments are subject to the execution of definitive sales agreement.

請注意，與客戶簽署的意向書不具有約束力，這些部署取決於最終銷售協議的執行。

I'd now like to provide an update on the power generation market landscape. Over the past couple of quarters, we've had dozens of customer discussions and have continued to learn more about potential market opportunities for the KARNO generator.

我現在想介紹一下發電市場格局的最新情況。在過去的幾個季度中，我們進行了數十次客戶討論，並繼續了解更多有關 KARNO 發電機潛在市場機會的資訊。

We have received overwhelmingly positive feedback from these potential customers. They see the KARNO generator as a revolutionary generator that is poised to overcome many of the conventional hurdles of on-site power generation.

我們從這些潛在客戶收到了絕大多數的正面回饋。他們將 KARNO 發電機視為革命性的發電機，有望克服現場發電的許多傳統障礙。

Key attributes included the KARNO generators, expected high efficiency, which equates to a low cost of electricity, low maintenance requirements, lower emissions footprint and versatility of being able to operate on many fuels.

主要屬性包括 KARNO 發電機、預期的高效率，這意味著電力成本低、維護要求低、排放足跡低以及能夠使用多種燃料的多功能性。

Based on customer feedback, we've made a couple of updates to our target market infographic that we shared a few months ago. The first is with regard to data centers. As we've met with numerous companies in this space, it has become apparent that this market can become a key focus vertical for us.

根據客戶回饋，我們對幾個月前分享的目標市場資訊圖表進行了一些更新。首先是關於資料中心。當我們與這個領域的眾多公司會面時，很明顯這個市場可以成為我們垂直領域的重點。

We've heard strong feedback that the AI boom is demanding significantly more data centers, which in return requires significantly more power. KARNO generators with their expected fuel flexibility high efficiency and modularity can enable data center operators to generate their own power using pipeline natural gas or other low carbon fuels and then seamlessly switch to on-site fuel storage such as diesel or propane in case of emergency or pipeline failure.

我們聽到了強烈的回饋，即人工智慧的繁榮需要更多的資料中心，而這反過來又需要更多的電力。KARNO 發電機具有預期的燃料靈活性、高效率和模組化性，可使資料中心營運商使用管道天然氣或其他低碳燃料自行發電，然後在緊急情況下無縫切換到柴油或丙烷等現場燃料存儲。

Such flexibility will enable these customers to use the KARNO generators for meeting both baseload generation and resiliency needs at a facility. Another vertical we have added is waste heat utilization, manufacturing operations for steel, aluminium, glass and many other products generate a significant amount of heat that is released into the atmosphere as waste.

這種靈活性將使這些客戶能夠使用 KARNO 發電機來滿足設施的基本負載發電和彈性需求。我們添加的另一個垂直領域是廢熱利用，鋼鐵、鋁、玻璃和許多其他產品的製造過程會產生大量熱量，這些熱量會作為廢物釋放到大氣中。

We are presently in early discussions with a few manufacturers in these industries to explore the opportunity of utilizing their waste heat as a fuel source to power the KARNO generator, unlike conventional generators that utilize fuels like natural gas or diesel to move the mechanical parts of the engine.

目前，我們正在與這些行業的一些製造商進行早期討論，探索利用其廢熱作為燃料源為 KARNO 發電機提供動力的機會，這與使用天然氣或柴油等燃料來移動機械部件的傳統發電機不同。 。

KARNO generator is powered by heat in most applications. The KARNO generator will use fuels like hydrogen and natural gas to make the heat that will directly power the current generator. However, if an application already generates heat, we are exploring redirecting that heat to power the KARNO generator.

在大多數應用中，KARNO 發電機由熱能供電。KARNO 發電機將使用氫氣和天然氣等燃料產生熱量，直接為目前的發電機提供動力。然而，如果應用程式已經產生熱量，我們正在探索重新引導熱量為 KARNO 發電機供電。

This would significantly reduce if not eliminate the need for conventional fuels like natural gas or hydrogen, which could dramatically lower operating costs. In another recent development we have been awarded a small business innovation research grant from the US government.

這即使無法消除，也將顯著減少對天然氣或氫氣等傳統燃料的需求，從而大大降低營運成本。在最近的另一項進展中，我們獲得了美國政府的小型企業創新研究資助。

We are excited about this opportunity to focus on the development of a multi-megawatt package KARNO generator for US Navy applications. We'll plan to share more on this opportunity in the near future.

我們很高興有機會專注於為美國海軍應用開發多兆瓦套件 KARNO 發電機。我們計劃在不久的將來分享更多有關此機會的資訊。

I'd now like to shift and share some more updates on the progress we've been making on the development of the generator and our production capabilities. Over the past quarter, we've continued to test the alpha version of the generator and are preparing the beta version for customer deliveries later this year.

現在我想分享一些關於我們在發電機開發和生產能力方面取得的進展的更多更新。在過去的季度中，我們繼續測試生成器的 alpha 版本，並正在準備今年稍後向客戶交付的 beta 版本。

Over the past quarter, we focused on testing many of the improvements that we are making in the beta generator to ensure it operates and performs as we expect. We've also continued to refine and improve the production of beta components on our additive manufacturing machines.

在過去的季度中，我們重點測試了 Beta 生成器中所做的許多改進，以確保其按我們的預期運行和執行。我們也持續完善並改進積層製造機器上 beta 組件的生產。

Because of this ongoing work, we are not yet checking off the box, indicating full completion of beta development in the first half of this, but we do expect to complete the final two milestones by the end of the year.

由於這項正在進行的工作，我們尚未勾選框，表明測試版開發將在上半年完全完成，但我們確實希望在今年年底前完成最後兩個里程碑。

In Q2, we also focused on expanding our production capabilities in Austin. We now have additive manufacturing machines, printing components around the clock. We also have more additive machines on order from general electric that we are installing between now and early next year. These new machines will support the production ramp up anticipated for next year.

在第二季度，我們也專注於擴大了奧斯汀的生產能力。我們現在擁有積層製造機器，全天候列印組件。我們也從通用電氣訂購了更多增材機器，我們將從現在到明年初進行安裝。這些新機器將支持明年的預期產量成長。

In conclusion, we continue to make great progress towards and remain on track with our key objective of getting initial early adopter customer units deployed by end of this year. We are also excited by the discussions we are having with customers and believe that the KARNO generator will address the key pain points they are facing as they search for additional sources of power generation. We believe this puts the company in a strong position for ramping up production as we head into 2025.

總之，我們繼續取得巨大進展，並繼續實現我們的主要目標，即在今年年底前部署最初的早期採用者客戶單元。我們也對與客戶的討論感到興奮，並相信 KARNO 發電機將解決他們在尋找其他發電來源時面臨的關鍵痛點。我們相信，這將使該公司在進入 2025 年時處於提高產量的有利地位。

I'd now like to hand the call over to Jon to cover some financial updates from the quarter.

我現在想將電話轉交給喬恩，介紹本季的一些財務最新情況。

Thank you, Thomas, and good morning, everyone. Operating expenses for the second quarter were $14 million compared to $38.5 million in the second quarter of 2023. This decrease in expenses related to the wind-down of our powertrain business, partly offset by an increase in KARNO spending this year.

謝謝你，托馬斯，大家早安。第二季營運費用為 1,400 萬美元，而 2023 年第二季營運費用為 3,850 萬美元。費用的減少與我們動力總成業務的縮減有關，但部分被今年 KARNO 支出的增加所抵消。

During the quarter, we recorded a $600,000 credit in powertrain exit and termination expenses, which was driven by the sale of certain assets of the discontinued powertrain business, partly offset by ongoing shutdown costs.

本季度，我們在動力總成退出和終止費用方面獲得了 60 萬美元的抵免，這是由於出售已停產的動力總成業務的某些資產所推動的，部分被持續的停工成本所抵消。

Our total net loss in the second quarter was $10.9 million, down from $35.2 million in the second quarter of 2023 and down from the $15.6 million loss we reported in the first quarter of this year. The sequential decrease in net loss this year was related to fewer charges for powertrain wind-down activities. Year to date operating expenses totaled $33 million compared to $70.4 million in the first half of 2023. Expenses in 2024 include [$3.9 million] of powertrain exit and termination costs net of asset sales.

我們第二季的總淨虧損為 1,090 萬美元，低於 2023 年第二季的 3,520 萬美元，也低於我們今年第一季報告的 1,560 萬美元的虧損。今年淨虧損的季減與動力總成停產活動費用減少有關。年初至今的營運支出總計 3,300 萬美元，而 2023 年上半年為 7,040 萬美元。2024 年的費用包括扣除資產銷售後的動力總成退出和終止成本 [390 萬美元]。

The wind down of powertrain has largely been completed except for our ongoing efforts to monetize assets, which we expect will yield additional income and cash in the coming quarters. During the second quarter, we repurchased 1.9 million shares of common stock for $2.7 million as part of the $20 million share repurchase program we announced late in 2023.

除了我們持續努力將資產貨幣化之外，動力總成的逐步縮減已基本完成，我們預計這將在未來幾季產生額外的收入和現金。第二季度，我們以 270 萬美元回購了 190 萬股普通股，這是我們在 2023 年末宣布的 2,000 萬美元股票回購計畫的一部分。

The average purchase price per share was $1.45. Since program inception, we repurchased 10.6 million shares for an aggregate cost of $14 million, resulting in an average purchase price of $1.32. As of early May, we suspended share repurchases due to the recent strengthening of our share price and do not expect to execute upon further repurchases, but may resume repurchasing activity at a later date if and as deemed appropriate.

每股平均購買價格為 1.45 美元。自計劃啟動以來，我們回購了 1,060 萬股股票，總成本為 1,400 萬美元，平均購買價格為 1.32 美元。截至 5 月初，由於近期股價走強，我們暫停了股票回購，預計不會執行進一步回購，但如果認為合適，可能會在稍後恢復回購活動。

Turning to our cash position, we finished the second quarter were $249 million of cash and investments on our balance sheet, we utilized $15.2 million of cash and investments as well as previously restricted cash in the second quarter of this year and $50.6 million year to date.

談到我們的現金狀況，第二季結束時，我們的資產負債表上有2.49 億美元的現金和投資，今年第二季我們使用了1520 萬美元的現金和投資以及之前限制的現金，今年迄今使用了5060 萬美元。

Breaking down uses of cash for the year thus far, spending on core KARNO development activities totaled $27 million including capital investments of $8.1 million. Capital investments were directed mostly towards the purchase of additive printing machines and related equipment.

以今年迄今的現金使用情況分類，KARNO 核心開發活動的支出總計 2,700 萬美元，其中資本投資 810 萬美元。資本投資主要用於購買增材印刷機和相關設備。

In addition to the $14 million spent on share repurchases we also spent approximately $10 million on powertrain shutdown activities net of asset sale proceeds. Looking forward, we expect to begin deploying KARNO generator units to customers late this year.

除了用於股票回購的 1,400 萬美元之外，我們還花費了約 1,000 萬美元用於動力總成關閉活動（扣除資產出售收益）。展望未來，我們預計今年稍後開始向客戶部署 KARNO 發電機組。

While these are expected to be paid deployments, the timing of the payments to Hyliion will likely extend into 2025, depending upon the commercial terms agreed to for the initial deployment agreements, the time required for certification and permitting of the generators as well as achievement of operating performance criteria.

雖然這些預計將是付費部署，但向 Hyliion 付款的時間可能會延長至 2025 年，具體取決於初始部署協議商定的商業條款、發電機認證和許可所需的時間以及實現營運績效標準。

We expect to grow deployments in 2025 and to begin recognizing revenue for sales to customers. Once our development work is complete and we reach the commercialization milestone for the KARNO generator. We are maintaining previous guidance that we expect revenue in 2025 to be in the low double digit millions of dollars.

我們預計在 2025 年增加部署，並開始確認向客戶銷售的收入。一旦我們的開發工作完成，我們就達到了 KARNO 發電機商業化的里程碑。我們維持先前的指導，預計 2025 年收入將在數百萬美元的低兩位數。

As volume grows, we expect to realize production cost efficiencies, particularly for purchased components and services needed to build the KARNO generator. Initially, we expect gross margins to be negative, but also to improve quickly as we realize scale efficiencies in production and purchasing.

隨著產量的成長，我們期望實現生產成本效率，特別是對於建造 KARNO 發電機所需的採購組件和服務。最初，我們預期毛利率將為負，但隨著我們實現生產和採購的規模效率，毛利率也會迅速改善。

We are currently targeting gross margins to be approximately breakeven measured on a cash basis by late 2025 or early 2026. Beyond that timeframe, we haven't yet developed a firm forecast. We now expect that total cash expenditures for our KARNO generator business in 2024 will be approximately $55 million compared to our previous estimate of nearly $50 million.

目前，我們的目標是到 2025 年底或 2026 年初，以現金計算的毛利率大致達到損益兩平。超出該時間範圍後，我們尚未制定明確的預測。我們現在預計 2024 年 KARNO 發電機業務的總現金支出將約為 5,500 萬美元，而我們先前的估計為近 5,000 萬美元。

As a reminder, our cash forecast includes operating expenses, capital spending and interest income, but excludes cash spent for share repurchases, powertrain shutdown activities and asset sale proceeds. This higher estimate reflects a more rapid ramp up in additive printer growth investments in Texas that Thomas referenced earlier in the call and to fluctuate up or down based on the timing of printer deliveries that we currently have on order.

提醒一下，我們的現金預測包括營運支出、資本支出和利息收入，但不包括用於股票回購、動力總成關閉活動和資產出售收益的現金支出。這一較高的估計反映了托馬斯在電話會議中早些時候提到的德克薩斯州增材印表機增長投資的更快增長，並根據我們目前訂購的印表機交付時間而上下波動。

Finally, we expect that the capital we have on hand today will be sufficient for the foreseeable future, including commercialization of KARNO generator sales.

最後，我們預計目前手頭上的資金足以應對可預見的未來，包括 KARNO 發電機銷售的商業化。

Now I'll turn the call back over to Tom.

現在我將把電話轉回給湯姆。

Thank you, Jon. Before transitioning over to Q&A, I'd like to share a quick recap of the quarter. We've been making great progress with the commercialization of the KARNO generator, which is keeping us on track for initial customer deployments this year.

謝謝你，喬恩。在轉向問答之前，我想快速回顧一下本季的情況。我們在 KARNO 發電機的商業化方面取得了巨大進展，這使我們能夠在今年的初始客戶部署中保持正軌。

In parallel, we've been building our backlog of interest, expanding our target markets and already have LOIs in place with customers for half of the volume we plan to deploy next year. Thank you for your ongoing support and interest in Hyliion.

同時，我們一直在建立我們的積壓訂單，擴大我們的目標市場，並且已經與客戶達成了意向書，其數量是我們計劃明年部署的一半。感謝您對 Hyliion 的持續支持與關注。

And I'd now like to open the call for Q&A.

現在我想開始問答環節。

(Operator Instructions)

（操作員說明）

Donovan Schafer.

多諾萬·謝弗。

Hey guys and thanks for taking the questions. So first, I just wanted to start off, and I can't remember if we've covered this before, but can you give us any numbers or any kind of just like quantification around than the number of units when you talk about 2024 capacity is fully booked and 2025, in fact, 50% of 2025 capacity fully booked. Is there any number you can point us to in terms of number of units that can help us orient what that means.

大家好，感謝您提問。首先，我只是想開始，我不記得我們之前是否討論過這個問題，但是當您談論 2024 年產能時，您能給我們任何數字或任何類型的量化數據嗎？運力的50% 已預訂滿。您是否可以向我們指出單位數量方面的任何數字，以幫助我們確定其含義。

And in terms of units, clarify whether you mean like generator, you've got four cylinders or systems for whatever or you know, it's just so that there's not an ambiguity there either.

在單位方面，澄清你的意思是否像發電機，你有四個氣缸或系統，或者你知道，這只是為了不存在歧義。

Sure. So this year 2024, it will be in the single digit units and to your point there it is full complete gen sets. So it would be the 200 kilowatt the beta design of this system. So I mean, these are really just the initial units getting out into customers' hands done have as we've spoken about, I mean, the goal is we've got very collaborative agreements with these early adopters where they're signing up for working with us providing feedback, giving us advice suggestions on how those systems are performing, and we have the ability to come back and if any changes are needed to be able to implement those and that really tees us up for really hitting commercialization of this solution in 2025.

當然。因此，今年 2024 年，它將採用個位數單位，並且就您而言，它是完整的發電機組。因此，這將是該系統的 200 千瓦 beta 設計。所以我的意思是，正如我們所說，這些實際上只是進入客戶手中的初始單元，我的意思是，我們的目標是我們與這些早期採用者簽訂了非常合作的協議，他們正在簽署這些協議與我們合作提供回饋，向我們提供有關這些系統如何運作的建議，如果需要任何更改，我們有能力回來實施這些更改，這確實為我們真正實現該解決方案的商業化做好了準備2025年。

Now what we've said is in terms of volume for next year, we've really targeted more of a revenue number, and that's going to be in the low double digit millions in revenue for next year. We haven't yet correlate that back to an actual number of units.

現在我們所說的是明年的銷量，我們真正的目標是收入數字，明年的收入將達到數百萬美元。我們尚未將其與實際單位數量聯繫起來。

But we're pleased to share on this call that that hit those that milestone I mentioned, we've already secured more than half of the backlog that we would need in order to be able to achieve that for 2025.

但我們很高興在這次電話會議上分享，我們已經實現了我提到的里程碑，我們已經獲得了 2025 年實現這一目標所需的一半以上的積壓訂單。

And just at the time, are you saying low single digit, high single digit number of generators for kind of more than five less than five, four and for this year. And is that right where that corresponds to that sort of the logic would be, you know if it's something north of five and the implied, you know, then that implies, you know, something in the teens or something for 2025 like capacity or do those things? And again in high single digit or low single digit?

就在那時，你是說今年的發電機數量是低個位數還是高個位數，超過五台，少於五台，四台。這就是對應於那種邏輯的地方嗎？容量或做那些東西？又是高個位數還是低個位數？

So for this year, I think it's in that mid-range of single digits. And then as we look at next year, much more than in the teens as you are expressing in terms of generators, we just haven't correlated that to an exact number of units, but 2025 is really that commercial starting getting volume out there. And we hope to, by the end of '25 have a very strong deployment of many generators out there in customers' hands.

所以今年，我認為它處於個位數的中間範圍。然後，當我們展望明年時，比您用發電機表示的青少年要多得多，我們只是沒有將其與確切的單位數量相關聯，但 2025 年確實是商業開始獲得銷量的時候。我們希望在 25 年底，能夠在客戶手中部署大量發電機。

And then as a follow-up, talking about mostly data centers but also cryptocurrency at all is kind of heavy overlap there. But data centers mostly people are talking about the AI stuff right now. And talking to Generac and some other companies, it sounds like footprint is a very important consideration.

作為後續行動，主要談論資料中心，但也談論加密貨幣，這與那裡有很大的重疊。但資料中心現在大多數人都在談論人工智慧的東西。與 Generac 和其他一些公司交談後，聽起來佔地面積是一個非常重要的考慮因素。

And in their case a lot of times they're looking at offering just the backup generators. So looking at data centers where there's going to be some kind of a grid tie, grid connection. And then you have this backup functionality that kind of has a superfluous use, you're kind of hoping you almost never have to use it.

就他們而言，很多時候他們都在考慮只提供備用發電機。因此，看看資料中心，那裡將有某種網格連接、網格連接。然後你就擁有了這個有點多餘的用途的備份功能，你希望你幾乎永遠不需要使用它。

But with natural gas, conventional natural gas generators, I think they have a much larger footprint than you're able to pack in a lot more like diesel generators and things like that. And so it seems like that's become an important consideration.

但對於天然氣，傳統的天然氣發電機，我認為它們的佔地面積比柴油發電機之類的東西大得多。因此，這似乎已成為一個重要的考慮因素。

So I'm curious, how does the footprint for the KARNO generator compares to kind of those conventional offerings. And I'd say on an all-in basis, right? So if you are talking about using gas or alternative fuels in a backup application like you're not going to have they're not going to pay the money to have a large, like hydrogen storage tank plus a large paid storage tank plus all that stuff. So like how do they look at it from a footprint standpoint and are they mostly looking for prime power or for backup?

所以我很好奇，KARNO 發電機的佔地面積與那些傳統產品相比如何。我想說的是，在全力以赴的基礎上，對嗎？So if you are talking about using gas or alternative fuels in a backup application like you're not going to have they're not going to pay the money to have a large, like hydrogen storage tank plus a large paid storage tank plus all that東西.那麼，他們如何從足跡的角度看待它，他們主要是在尋找主要電源還是備用電源？

Yeah. So great questions. A lot to unravel there. So let me first start with what data centers have been doing in the past and that is conventionally. They use the grid as their primary power source and then they deploy a bank of diesel engines there that are just there for emergency standby power.

是的。這麼好的問題。那裡有很多東西需要解開。首先讓我從資料中心過去所做的事情開始，這是傳統的做法。他們使用電網作為主要電源，然後在那裡部署一組柴油發動機，以提供緊急備用電源。

With this recent AI boom and also the improvements with the kind of the processing power of computers. There's two new issues that are coming about. So the first is they're finding that the utilities just don't have the amount of power available that they need.

隨著最近人工智慧的蓬勃發展以及電腦處理能力的提高。有兩個新問題即將出現。首先，他們發現公用事業公司沒有足夠的可用電力。

And then the second is, as they go and upgrade data centers and new processors are a lot faster, but they also consume a lot more power. They're finding that grid used to be able to provide enough power. But with these new machines, now that same data center requires a lot more power consumption and the grid does not have to spike.

第二個是，隨著資料中心和新處理器的升級，速度快得多，但它們也會消耗更多的電力。他們發現電網過去能夠提供足夠的電力。但有了這些新機器，現在同一個資料中心需要更多的電力消耗，電網不必尖峰。

So now that's where data centers are starting to look at actually using on-site power generation. And that's where natural gas engines, as you pointed out, come into play. So our footprint is a major issue and even so what we're now hearing from customers is we actually just had a customer a couple of weeks ago in and we're talking about how in Ireland, there's a new data center being built and they actually have natural gas engines deployed for prime power and then they also have a bank of diesel engines deployed for backup power.

因此，現在資料中心開始考慮實際使用現場發電。正如您所指出的，這就是天然氣引擎發揮作用的地方。因此，我們的足跡是一個主要問題，即便如此，我們現在從客戶那裡聽到的是，我們實際上幾週前剛剛有一個客戶，我們正在談論如何在愛爾蘭建造一個新的資料中心，他們實際上，他們部署了天然氣引擎作為主要動力，然後他們還部署了一組柴油引擎作為備用動力。

So that then even becomes a larger issue from a footprint standpoint because now you have two sets of engines for that data center. So where we see the KARNO really fitting in it since we offer that fuel flexibility, we can be your prime power solution running on natural gas or hydrogen.

因此，從佔地面積的角度來看，這甚至成為一個更大的問題，因為現在這個資料中心有兩套引擎。因此，我們認為 KARNO 非常適合它，因為我們提供燃料靈活性，我們可以成為您使用天然氣或氫氣運行的主要動力解決方案。

And we can also be your backup power solution. And you can have an on-site diesel storage or an on-site propane storage that that same generator solution could run on those various fuels. So that's where we see data centers becoming a really big play because we are enabling them to have a prime power solution that has low maintenance, but also be that backup power solution as well.

我們也可以成為您的備用電源解決方案。您可以擁有一個現場柴油存儲或一個現場丙烷存儲，而同一發電機解決方案可以使用這些不同的燃料運行。因此，我們看到資料中心變得非常重要，因為我們使它們能夠擁有低維護成本的主要電源解決方案，同時也成為備用電源解決方案。

And if I can just squeeze one more question in. With the increase in guided spending for 2024, I guess the main question is just what the drivers so I guess, first, I'm interpreting it in the release, you talk about it as a more rapid build-out of additive capacity.

如果我能再問一個問題的話。隨著 2024 年指導性支出的增加，我想主要問題是驅動因素是什麼，所以我想，首先，我在發布中將其解釋為，您將其視為更快速的附加產能建設。

So I think of that as sort of an acceleration versus some prior existing plan. And so if there is -- if it is an acceleration versus what was prior planned previously, what the driver of that acceleration is? Is it opportunism around pricing of equipment in some spaces like in EV manufacturing? Other companies have talked about being able to scoop up equipment on the cheap.

因此，我認為這與之前的一些現有計劃相比是一種加速。因此，如果存在——如果它是一種加速而不是先前計劃的加速，那麼這種加速的驅動因素是什麼？在電動車製造等某些領域，設備定價是否存在機會主義？其他公司也談到能夠以便宜的價格購買設備。

I don't know how much additive printing stuff is involved in that. So is it opportunistic with lower pricing for additive printing or is it more getting feedback from customers, it gives you more confidence and makes you want to accelerate. Just whatever the driver there is? And if you can confirm that it's an acceleration versus the prior plan?

我不知道其中涉及多少增材印刷材料。因此，它是機會主義的增材列印較低的價格，還是更多地從客戶那裡獲得回饋，它給你更多的信心，讓你想要加速。不管那裡有什麼司機？如果您可以確認這相對於之前的計劃是一個加速？

Yeah, I don't I mean, this is John. I'll take that question. So it's a little bit of all the above. I would say it's certainly driven by capital investments, pretty much entirely the increase in spending since our initial guidance.

是的，我不是說，這是約翰。我來回答這個問題。所以這只是上述所有內容的一點點。我想說，這肯定是由資本投資所驅動的，幾乎完全是自我們最初的指導以來支出的增加。

And it's really about trying to get the Texas facility built out, which is going to be our primary production facility over time. And so it's also taking advantage of opportunities to buy both new and used machines that we found in the marketplace.

這實際上是為了努力建造德克薩斯州的工廠，隨著時間的推移，這將成為我們的主要生產工廠。因此，它也利用機會購買我們在市場上找到的新機器和二手機器。

So as we are getting very close to our initial deployments. We really thought about our ability to ramp up production next year and really taking advantage of all the opportunities to get capacity here. And so we're trying to we'll make various decisions about used machines, new machines.

當我們非常接近我們的初始部署時。我們認真考慮了明年提高產量的能力，並真正利用所有機會在這裡獲得產能。因此，我們正在努力對二手機器、新機器做出各種決定。

In fact, all of that is playing into really the uncertainty about how many units and being more precise about our forecast for volume next year is because those are moving parts. Even our capital forecast this year could vary a little bit just depending on the timing of the deliveries and so forth between this year and next year. So it's really is about capital and just trying to ramp up the Texas facility more quickly.

事實上，所有這些都真正影響了多少單位的不確定性，並且更準確地預測我們明年的銷售量是因為這些都是移動部件。甚至我們今年的資本預測也可能會略有不同，具體取決於今年和明年之間的交付時間等。所以這實際上是關於資本，只是試圖更快地擴大德克薩斯州的工廠。

Okay, great. Thank you. I'll take the rest of my questions offline. Thanks, guys.

好的，太好了。謝謝。剩下的問題我會離線回答。謝謝，夥計們。

Prior to today, the company fielded questions from investors. I will now turn the call back to Greg to review those.

在今天之前，該公司回答了投資者的提問。我現在將把電話轉回格雷格以審查這些內容。

Thank you. The first question are there two versions of the KARNO generator offer at 125 kilowatts and beta at 200 kilowatts? And what are the differences between then if there are two versions.

謝謝。第一個問題是 KARNO 發電機有兩個版本：125 千瓦和 200 千瓦 beta 版本嗎？如果有兩個版本的話，有什麼差別呢？

So I wouldn't look at it as having two different versions. It's more the evolution of the development of the generator so in terms of customer deployments, the only solution will be deployed with customers is that 200 kilowatt solution, the beta design that we'll be getting out in customers' hands later this year.

所以我不會認為它有兩個不同的版本。這更多的是發電機開發的演變，因此就客戶部署而言，與客戶一起部署的唯一解決方案是 200 千瓦解決方案，這是我們將在今年稍後交付給客戶的測試版設計。

Alpha was a version that we started working on back actually for the truck solution, which as noted is a 125 kilowatt capable generator. And that's a solution that we've had operating for more than a year now, we've been going through the development testing and iterating it.

Alpha 是我們實際上開始為卡車解決方案開發的一個版本，如前所述，它是一台 125 千瓦的發電機。這是我們已經運行一年多的解決方案，我們一直在進行開發測試和迭代。

And the 200 is really just an evolution of that design. Actually the size, the scale of the generator is the physical footprint is almost identical. But what we've been able to engineer to actually have more power density get more power out of the same footprint and as well as making other design changes and improvements as well. So in terms of customers, though, it's that beta design, that 200 kilowatt solution that's what we'll be selling.

200 其實只是該設計的演變。實際上，發電機的尺寸、規模以及物理佔地面積幾乎是相同的。但我們實際上已經能夠設計出更高的功率密度，從而在相同的佔地面積內獲得更多的功率，並進行其他設計更改和改進。因此，就客戶而言，我們將銷售的是 beta 設計、200 千瓦解決方案。

You mentioned that the company is targeting to be gross margin neutral on a cash basis by late '25 or early 2026. Can you share what needs to happen over the next 12 to 18 months to achieve this?

您提到公司的目標是到 25 年底或 2026 年初以現金為基礎實現毛利率中性。您能否分享一下在未來 12 到 18 個月內需要做什麼才能實現這一目標？

Yes. So as you would expect, when you have a new product in the marketplace, your initial production costs are going to be relatively high as they transition from prototype scale to more per tire production scale. So we're experiencing that right now.

是的。因此，正如您所期望的那樣，當您在市場上推出新產品時，您的初始生產成本將相對較高，因為它們從原型規模過渡到每個輪胎生產規模更大。所以我們現在正在經歷這一點。

Our first units are going to be costing a little bit more than we expect over time. But we do expect cost to come down quite rapidly and ultimately get to the point over the next 12 to 18 months where on a cash basis that we're getting close to breakeven between the price that we're charging and the cost of producing the product.

隨著時間的推移，我們的第一批設備的成本將比我們預期的要高一些。但我們確實預計成本會迅速下降，並最終在未來 12 到 18 個月內達到這樣的程度：在現金基礎上，我們將在收取的價格與生產成本之間接近收支平衡。

And again, what I mean by cash basis, that would exclude our overhead costs and warranty costs. So it's a again, it's kind of a normal trajectory that you'd expect in manufacturing where costs are initially high and they come down rather quickly with production efficiencies and purchasing efficiencies.

再說一遍，我所說的現金收付制的意思是不包括我們的管理費用和保固成本。因此，這又是製造業中的正常軌跡，成本最初很高，但隨著生產效率和採購效率的提高，成本很快就下降。

Can you further explain why the completion of data development was not completed in the first half of the year and will this impact customer deliveries?

您能否進一步解釋為什麼上半年資料開發沒有完成，這是否會影響客戶交付？

Sure. So as we previously shared, we had released the beta design and we've been moving that into production and testing out those components and the reason we didn't check the box on the beta development is as we moved some of the components from kind of design into production, we saw that there were some areas where we need to iterate and changes design, improve the design.

當然。正如我們之前分享的，我們已經發布了測試版設計，我們已經將其投入生產並測試這些組件，而我們沒有選中測試版開發複選框的原因是我們將一些組件從實物中移出。到生產的過程中，我們發現有些領域需要我們迭代和更改設計、改進設計。

And so that's some of the undertaking we've been doing over the last couple of months. Now, I think the key thing to note here is even though the beta production development is not done, we are still on track for having units out into customers' hands later this year.

這就是我們過去幾個月一直在做的一些工作。現在，我認為這裡需要注意的關鍵是，即使測試版生產開發尚未完成，我們仍有望在今年稍後將設備交付給客戶。

And one of the things that we've actually done to mitigate risk is some of the major design changes or improvements as you go from alpha beta. We've actually made those changes in the alpha variant of the generator we've tested on. We've proven the design work, and that's going to derisk the launch of the beta product.

我們實際上為降低風險所做的事情之一是從 alpha beta 版本開始進行一些主要的設計變更或改進。我們實際上已經在我們測試過的生成器的 alpha 變體中進行了這些更改。我們已經證明了設計工作，這將消除測試版產品推出的風險。

So we're not comfortable yet checking the box on having beta development complete just because a few of those parts, we did kind of take them back through making design improvements from learnings that we saw from the production innovation of the units, but we don't see that impacting our overall goal of getting units out to customers this year.

因此，我們還不太放心地勾選完成測試版開發的複選框，因為其中一些部件，我們確實通過從單元的生產創新中看到的經驗教訓進行設計改進來收回它們，但我們不這樣做我認為這不會影響我們今年向客戶提供設備的整體目標。

And finally, can you further explain what an LOI from a customer is and what the difference between it and a definitive agreement? And at what stage with these deployments, do you plan on starting to recognize revenue?

最後，您能進一步解釋一下什麼是客戶的意向書以及它與最終協議之間的差異嗎？您計劃在這些部署的哪個階段開始確認收入？

Yeah, I'll take that one of an LOI or letter of intent with customers is really based upon the conversations that our commercial team has had with customers and what is included when we have when we sell them a KARNO unit.

是的，我認為與客戶簽訂的意向書或意向書實際上是基於我們的商業團隊與客戶的對話以及我們向他們出售 K​​ARNO 設備時所包含的內容。

So it has expectations on the performance of the units. It also includes pricing and other things that have to be that are ultimately part of what is ultimately delivered to the customers. Over time, we will be and creating definitive agreements of more contractual agreements with customers for the sale of these units.

因此對單位的表現抱持著期望。它還包括定價和其他最終必須成為最終交付給客戶的內容的一部分。隨著時間的推移，我們將與客戶就這些設備的銷售簽訂更多合約協議的最終協議。

And then regarding the revenue recognition once those performance obligations in definitive agreements are achieved and you can start to recognize the revenue from the customers. And ultimately, we'll be achieving that revenue recognition milestone that we expect next year sometime as we finally get past all the beta development and get to a commercialization milestone. So that will likely be next year.

然後，一旦實現了最終協議中的履約義務，您就可以開始確認來自客戶的收入。最終，當我們最終完成所有測試版開發並達到商業化里程碑時，我們將在明年某個時候實現我們期望的收入確認里程碑。所以很可能是明年。

So that concludes the questions that we had field there prior to the call. So just in closing, I wanted to thank everyone for joining our Q2 earnings call. I think this past quarter, we had a lot of success, especially on the market adoption side of things.

這樣我們在電話會議前提出的問題就到此結束了。最後，我要感謝大家參加我們的第二季財報電話會議。我認為上個季度我們取得了很多成功，特別是在市場採用方面。

As mentioned, having all the units committed for this year, having more than half of the backlog already identified for next year. That puts us in a very strong position as we go into the commercialization of this solution.

如前所述，今年所有單位都已承諾，明年的積壓工作已確定一半以上。這使我們在將該解決方案商業化時處於非常有利的地位。

And we look forward to getting these units out into the field later this year. So thank you again for joining the call, and we look forward to talking again next quarter.

我們期待今年稍後將這些裝置投入使用。再次感謝您加入此次電話會議，我們期待下季再次交談。

That concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。