Greetings. And welcome to the Pioneer Power Solutions, Inc. Third Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star and then 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Corbin Woodall of Hayden HR. Thank you, and you may begin.

Thank you, Claudia. The call today will be hosted by Nathan J. Mazurek, Chairman and Chief Executive Officer, Walter Michalec, Chief Financial Officer, and Geo Murickan, President of Pioneer eMobility. On the call today, we will review the third quarter financial results and recent business highlights. Following this, there will be a Q&A session open to participants on the call. Before we get started, I would like to remind participants this call is being recorded. During this call, management may make forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release issued earlier today, Thursday, November 13, which applies to the content of this call. I would now like to turn the call over to Nathan J. Mazurek, Chairman and CEO. Nathan, please go ahead.

Thank you, Corbin. Good afternoon, everyone, and thank you for joining us today. The third quarter was a highly successful period for Pioneer Power Solutions, Inc., highlighted by key equipment deliveries, strong order momentum, and significant penetration into the distributed power space. These achievements, combined with a robust project pipeline and Pioneer's continuing investment in product development, position us to realize our full year 2025 growth objectives and position us for accelerated growth in 2026. For the third quarter, we generated revenue of $6.9 million, an increase of 7.4% year over year, driven primarily by an increase in service sales from our critical power business. Year to date, revenue reached $22 million, up 68% compared to the same nine-month period last year, driven primarily by demand for our eBoost mobile charging solutions. These results reflect our ongoing success in expanding our product scope, broadening our customer base, and capitalizing on large new vertical markets. Specifically, in the third quarter, we completed delivery of the last five eBoost units of a 25-unit order for a landmark school district project totaling $1.3 million. This project represents one of the largest school bus fleet electrification initiatives in the country and underscores our ability to deliver turnkey mobile charging solutions for heavy-duty, high-utilization electric vehicles. This milestone strengthens our position as a leader in fleet electrification and highlights the growing demand for mobile, high-capacity energy solutions in the public sector. In the broader fleet electrification market, we delivered our eBoost Mobile OpenFlex unit to the city of Portland. This 175-kilowatt multifunctional unit features a level three fast charger, multiple level two chargers, and a grid-tie transfer switch. Pioneer Power Solutions, Inc.'s ability to design and implement the power-dense, flexible mobile power system further solidifies our reputation as a trusted vendor of complex, resilient, distributed…

Thank you, Nathan, and good afternoon, everyone. Please be advised that we have included a non-GAAP financial measure of operating income or loss from continuing operations. This excludes corporate overhead expenses, research and development costs, depreciation and amortization expense, and nonrecurring professional fees. Please refer to our press release issued earlier today, November 13, 2025, for further information, including a reconciliation between GAAP and non-GAAP financial measures. The press release can be found on our website at pioneerpowersolutions.com/investors/newsroom. Such non-GAAP measures should not be used as a substitute or alternative to any measure of financial performance calculated and presented in accordance with US GAAP. Instead, we believe this non-GAAP measure should be used to supplement our financial measures derived in accordance with US GAAP in order to provide a more complete understanding of the trends affecting the business. Third quarter revenue was $6.9 million compared to $6.4 million in the year-ago quarter, an increase of approximately 7%. The increase was primarily due to an increase in service sales from our Critical Power Solutions business. Third quarter gross profit was $640,000 or a gross margin of approximately 9% compared to a gross profit of $1.5 million, a gross margin of approximately 20% in the third quarter of last year. The decrease in gross profit was primarily attributable to an unfavorable sales mix. During 2025, Pioneer Power Solutions, Inc. incurred an operating loss from continuing operations of $1.4 million compared to an operating loss from continuing operations of $714,000 in the third quarter of last year. Additionally, during 2025, Pioneer Power Solutions, Inc. incurred a non-GAAP operating loss from continuing operations of $196,000, which excludes corporate overhead expenses, R&D expense, depreciation and amortization, and nonrecurring professional fees, compared to a non-GAAP operating income from continuing operations of $865,000 for the same quarter in 2024. Net loss from continuing operations for 2025 was $1.8 million compared to a net loss from continuing operations of $738,000 during 2024. Taking a look at our balance sheet, as of September 30, 2025, we had cash on hand of $17.3 million, zero bank debt, and working capital of approximately $22.8 million, compared to $41.6 million of cash on hand, zero bank debt, and working capital of $26.7 million as of December 31, 2024. The cash on hand as of September 30, 2025, represents cash per share of approximately $1.56. The decrease in our cash on hand compared to the prior year-end is primarily due to the payment of a one-time special cash dividend of an aggregate of $16.7 million in January and the payment of federal and state income taxes totaling approximately $4 million during the second quarter. Today, we are reaffirming our guidance for revenue of $27 million to $29 million for the full year of 2025, which represents year-over-year growth of approximately 20%. This concludes my remarks, and I will now turn the call back over to Nathan.

Operator, you can open the lines for questions.

Thank you very much. At this time, we will conduct a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue. Please limit your questions to one question and one follow-up question. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star key. One moment, please, while we poll for questions. The first question comes from Amit Dayal from H.C. Wainwright. Please proceed with your questions, Amit.

Thank you. Good afternoon, everyone. Thank you for taking my questions. Nathan, looks like another strong quarter. You know, what's interesting is your end markets are getting increasingly diverse. I'm just wondering, you know, how you are creating your marketing awareness to reach across, you know, multiple segments that you are now playing in?

So excellent question. So, I mean, we started turning our attention to it because so many of the applications that we've been working on end up, you know, the heart of the expertise is really delivering this power. Adding a charger is an expertise or a series of chargers. But not as complicated all the time. To date, we've been doing it almost in a haphazard way. People either it's you know, we're being recommended from others based on other projects that we've done, or the same contractor or the same engineering firm. And then we had some significant success already in the third quarter. Which really means that we need to put together a very, very focused team to focus on certain verticals. And that's what we plan on doing. One on the industrial side, and the other really focused on the on the larger modular edge computing type data center, where a 1.4 power block under the right circumstances that's quickly deployable you know, we should be benefiting from and offering some sort of a value proposition there.

Interesting. Thank you for that, Nathan. Then just one on the gross margin side. You attributed the softness this quarter to the sales mix. Do you expect some bounce back in the next quarter?

Yeah. So, I mean, we you know, we're already experiencing it, but, yes, we expect a bounce back. And you're right. You know, the issue was the gross margin. The last five units for the for the large school district that we did were were not good. Not good for us even below what we'd experienced earlier in the year for whatever those reasons were. And it's not important to discuss openly here. But that that hurt. City of Portland did achieve more or less the margins that we had set out for it, a little bit less against some execution issue, but overall okay, but not enough to command gross margins that we did the other quarter. Fourth quarter, the mix is much more favorable to us. And and we expect them to bounce back.

Okay. Thank you, Nathan. I'll get back in queue.

Thank you. Ladies and gentlemen, just a reminder, if you'd like to ask a question, please press star and then 1. If you'd like to ask a question, please press star and then 1. The next question comes from Rob Brown from Lake Street Capital. Please proceed with your questions, Rob.

Good afternoon. Hey, Rob.

Hi. My first question is on the online retailer project and the expansion there. You talked sort of some opportunity in 2026. Could you kind of outline the scale of that relative to sort of what you've done or maybe the the planning steps that need to happen here and and how that might look next year?

Yeah. I mean, to date, what we've been doing with them is short term rentals. You know, we did a short term, a ninety day rental last year at the end of the year for the holiday period to help them with that and and let them sort of prove it out under the more intense part of their year. This year, it's it's it's a six month rental, so the revenue is is relatively small. And the discussions are, you know, pending, again, that these units work as we plan as the initial one did. They're talking about probably five to 20 units next year from a for a purchase.

Okay. And she's moving moving from rental to a purchase model.

Yeah. So okay. Great. Great. And then on the on the on the modular sort of data center project, you talked a little bit about here. But but that's how do you kinda see that opportunity? What what's sort of the the the ideal application there? And I guess, sort of that larger megawatt unit is I assume, a fairly large, ASP on that, but you can give a sense sort of the range of of what those units, sell for?

Yeah. So so we're gonna do a formal kind of unveiling of this before the end of the year. You know, with the with the team around it and its own sort of cache. But I'll let let Geo give you a little I don't know. Give give Rob a little you know, a a a concise teasing view of it now, if you can, for in in ninety seconds.

Yeah. Thank you, Nathan. Rob, so the what we have in the market engagement we've done we have seen in the data center market, the move to AI compute applications And one of the more immediate needs has been the need to test the AI compute loads because they are they have a very variant use compared to normal cloud compute load the data centers have today. So in order to test these, they need a lot of smaller systems on data center premises. That are behind the meter powered and can be actuated in a four to six months time frame. In order for them to scale and plan for the bigger data center cycles. Beyond that, there are also industrials who are adding critical power applications across different retail sectors. So those are some of the markets that we are addressing in the next one to three years.

Okay. Excellent. Thank you. I'll turn it over.

Thank you so much. Ladies and gentlemen, we have reached the end of the question and answer session. And now I'd like to turn the call back to Nathan J. Mazurek for closing remarks. Thank you, sir.

Thank you, Claudia. This quarter's results reflect strong execution and meaningful progress in expanding into new markets including distributed power. With a robust pipeline, strategic product launches like PowerCore, and continued operational momentum, we are well positioned to drive growth and achieve our full year 2025 objectives. Thank you for your continued support. We look forward to updating you on our next earnings call.

Thank you very much. Ladies and gentlemen, that does conclude today's call. Thank you very much for joining us. You may now disconnect your lines.