Wallbox N.V. (WBX) Q2 2022 Earnings Report, Transcript and Summary

Hello, everyone, and welcome to the Wallbox's Second Quarter 2022 Earnings Conference Call and Webcast. My name is Victoria and I will be your operator for today's call. At this time, all participants lines have been placed in listen-only mode to prevent any background noise. After speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Matt Tractenberg, Wallbox's Vice President of Investor Relations. Matt, please go ahead.

Thank you, Victoria, and good morning, and good afternoon to everyone listening in. Thank you for joining today's webcast to discuss Wallbox's second quarter 2022 results. This event is being broadcasted over the web and can be accessed from the Investor section of our website at investors.wallbox.com. I am joined today by Enric Asuncion, Wallbox's CEO; Jordi Lainz, our CFO, as well as Douglas Alfaro, General Manager of Wallbox North America. Earlier today, we issued our press release announcing results for the second quarter 2022, period ended June 30, 2022, which can also be found on our website. Before we begin, I'd like to remind everyone that certain statements made on today's call are forward-looking, that may be subject to risks and uncertainties relating to future events and/or the future financial performance of the company. Actual results could differ materially from those anticipated. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 20-F for the year ended December 31, 2021, which can be found on our website at investors.wallbox.com and on the SEC website at www.sec.gov. We will be presenting unaudited financial statements in IFRS format that reflect management's best assessment of actual results. Also, please note that we use certain non-IFRS financial measures on this call and reconciliations of these measures are included in the presentation posted on the Investor section of our website. Also, a copy of these prepared remarks can be obtained from the investor relations website, under the Quarterly Results section, so you can more easily follow along with us today. So with that out of the way, I'll turn it over to Enric.

Thank you, Matt, and thanks everyone for joining us today. In addition to reviewing highlights from the second quarter of 2022, I will also share some updates on a new partnership, two acquisitions we just recently completed, and provide you with a view of the market. Douglas is joining us today to offer some insight into our North American business, the new manufacturing facility, the NEVI program and the recently announced Inflation Reduction Act, or IRA, and what it all means for us. We’ll then turn the call over to Jordi, who will provide a more detailed review of our financial results, before I return to communicate our guidance for the third quarter of 2022. We will end by taking questions from our covering research analysts. The second quarter played out as we expected, with strength across regions and technologies. Despite a complicated geo-political backdrop and continued global supply chain disruptions, Wallbox continues to perform exceptionally well and again exceeded expectations in the second quarter of 2022. I’m proud to share our record results which highlight our continued commitment to executing our business plan. I want to thank our team for their hard work in helping to deliver on our commitments to investors, partners, and customers. It was a very busy quarter for us producing solid results. Revenue growth was 124% on a year-over-year basis, and we’re pleased with our gross margin of 41.1%. We’ve forged new exciting partnerships, including one in the U.S. with Nissan. For this, Wallbox will offer a complete solution to buyers of the new Nissan EV Ariya, a beautiful new SUV hitting the market soon. We see this as proof of the trust and confidence we’ve built with global leading brands like Nissan and we look forward to a successful launch. We also acquired two very attractive, but very different companies; COIL and ARES Electronics. They are great examples of opportunities we see that can expand our offering, addressable market and capabilities, and which can ultimately deliver value for shareholders and customers. Turning to the financial results, first quarter revenue of EUR39.5 million was up 124% year-over-year. The outstanding performance was fueled by broad strength across much of Europe, with notable growth in Spain, the Netherlands and Belgium, all at approximately 400%, and Sweden and France both exceeding 200% on a year over year basis. North America, which now includes sales in Canada and Mexico, grew by almost 500% over the prior year period. We are making great progress in Asia-Pacific with Australia and New Zealand growing year-over-year by 300% and 600%, respectively. LATAM, while early in its EV transition, continues to show promise and we expect it to be an attractive source of growth for Wallbox in the coming years. Consolidated gross margin in the quarter was 41.1%, driven by continued cost control on key components, even in the face of global shortages. We continue to navigate the supply shortage of critical items better than most, and will continue to re-engineer products and establish strategic purchasing agreements for critical components. And finally, we sold almost 64,000 chargers in the quarter, with 77% in Europe, 16% in the U.S., 5% in APAC, and 2% in LATAM. Notable share gains continue to occur in Southern Europe, Sweden, and the U.S. with new markets like Australia and New Zealand ramping up nicely. Today, we’re experiencing a unique market dynamic. The demand for EVs is stronger than most imagined. At the same time, EV manufacturers are struggling to keep up. Capacity constraints and component shortages are resulting in longer lead times and lower EV delivery volumes than industry sources expected. Often, buyers are quoted 6- to 12-month delivery dates. And while I’m encouraged by the amount of investment made in expanding that capacity in 2023 and beyond, there is little that can be done in the short term. However, even in the face of this imbalance, we’ve been able to achieve our sales and gross margin targets. We see these market share gains a result of our agile manufacturing model, brand reputation and strong focus on meeting customer needs. For example, in the first quarter of 2022, European EV deliveries grew by 24% year-over-year. In that same period, we sold 155% more units compared to Q1 of 2021. Similarly, in the most recent quarter, even though European EV deliveries declined by 2%, we sold 70% more units than Q2 of 2021. Our business model and brand reputation are helping drive our ability to gain share, and these share gains enable us to meet our commitments to investors. Build. Buy. Partner. Three methods of growing your business. Wallbox builds exceptional products. That is something that you likely know. We also consider ourselves adept at identifying and acquiring attractive companies. I’ll talk more about this in a minute. But partnering, that’s probably where most companies fall short. It’s hard to do well, but we work very hard at establishing the right ones, and being a good partner. When we first enter a market, the fastest path to the customer is direct retail. That is done through sites like Amazon.com, Wallbox.com, Best Buy, Lowes, Walmart, and Napa Auto Parts. You can see the success we’ve had here. While delivering products through that first channel, we are investing in developing the second channel, which consists of distributors, contractors, and installers. This channel is something we spoke to you last quarter about our strategy here and how valuable this is for Wallbox. The agreement with City Electric is one great example, and Svea Solar, the solar solution provider for IKEA, is another. Svea now includes Wallbox chargers in their solutions seen on the IKEA showroom floor, that is part of their holistic approach to energy management and it's a passion we strongly share. Those types of relationships take time to cultivate and formalize, so it’s our second path to the customer. And while you are servicing those channels and investing in their success, you’re speaking with large, often global OEMs and utilities. Partnerships are often the business method here, and a great example is what we announced with Nissan in June. Nissan has been a leader in the EV space from the beginning. The Nissan Leaf is one of the best selling EVs on the market and they’ve assembled an impressive list of new and exciting vehicles to come. Their new SUV, named Ariya, is expected to be in high demand, and we’re proud to be included in the launch. Buyers are directed to a co-branded website that allows them to select a charger and schedule an installation, all at a reduced price. Nissan chose Wallbox because of our commitment to high-quality hardware and innovative software features, as well outstanding customer support. And what’s more is that the installation services are facilitated by COIL. Our recent partnership with EDF is another great example. They are one of the world’s largest utilities with more than 5.5 million customers and have recently launched a new platform servicing homes and small businesses that includes sales and installation of EV charging infrastructure, called IZI. Through the platform, EDF customers can choose a Wallbox charger and schedule installation, all from EDF’s new website. These are only a few of the many partnerships we’ve put in place and there’s more to come. We have ongoing conversations with most household names around the world and look forward to sharing more with you as we make our way through the year. As we look out over the mid- to long-term, we expect Wallbox to continue its evolution into a holistic provider of energy management hardware and software. Some of that will be done organically. Quasar, for example, is designed to enable consumers to more efficiently manage their energy consumption and put energy stored in their EV, back into the grid when needed. However, some of this journey can be accelerated through the acquisition of innovative technology or talented teams. We expect there will be consolidation in the charging market and we intend to closely watch for opportunities that align with our strategic plan while allowing us to create shareholder value. The two transactions recently closed align very closely with our strategy and bring clear commercial and operating synergies to Wallbox. The consideration for both transactions was made largely in Wallbox stock, which highlights their trust in the long term vision of the company. Financial impact in the short term is relatively benign. COIL is a fast growing provider of installation services within the energy management space and they expand our addressable market into a large and growing segment. They’ve been a key path to market for Wallbox, and now they’re part of the family. Installations and solution sales are an important element to the comprehensive solution, especially within semi-public and public settings. Installers are often the face of the brand, and the expertise and relationships COIL brings to Wallbox will help strengthen our competitive offering. In return, the investment and scale we can offer COIL is expected to open new opportunities and business models that will benefit everyone. The commercial synergies here are compelling and we believe the purchase price allows for significant value creation over the mid- and long-term. Remember that the total purchase price of a charger and installation is often multiples of the hardware price alone. And when you account for an addressable market that is of equal size to that of hardware, the value of this business combination is extremely compelling. We’ll share more details on how we expect to benefit as we look into 2023. ARES Electronics designs and assembles innovative printed circuit boards, or PCBs, for technology companies including Wallbox. We’ve been their largest customer and we’re excited to bring these capabilities in-house. We’re excited about this for two reasons; first, this will put us in a good position to help ensure a consistent supply of high quality components that are critical to winning orders in today’s market. And second, it allows us to be closer to the point of innovation, further differentiating our product by designing unique components and innovative features. We do not anticipate a material revenue impact from this transaction, but we do expect cost synergies that will be realized given the expected scale of our business in the coming years. This transaction is a great example of ways to improve or accelerate our path to profitability. ARES has both attractive gross margins and generates positive EBITDA with a payback period of less than two years. I’m looking forward to seeing the impact they will have. The last topic is one that Douglas is going to speak on, and that’s the current state of the North American market, our position there and the subsidy programs currently being discussed. Douglas, I’ll hand it to you.

Thanks, Enric. Happy to join everyone today to talk about exciting things happening for Wallbox in North America. We've been really busy building the local leadership team and putting in place the systems, infrastructure, and relationships needed to be a leader in this market. We've been moving fast and delivering results from key activities like activating new warehouses to get our products out faster to our growing list of customers, building an exceptional team of now over 100 employees across the US, and making strong progress toward the opening of our new factory in Arlington, Texas next month. Finally, we're further deepening and expanding on key and highly visible partnerships with leading names like Uber, Napa Auto Parts, City Electric Supply, and especially Nissan, which we're very excited about. It's incredible to think that Wallbox entered the US market in just February of last year, and today, we're already a major player. Our strategy of providing high-quality and innovative products for the home has really resonated with customers. The ease of installation and setup of our chargers has proven valuable to our network of distributors and installers and we keep on delivering new features, capabilities and products that continue to serve our customers' growing demand for EV charging. While we've seen a lot of momentum for EVs in the US in the first half of this year, the US market has historically had slower rates of EV adoption compared to Europe, and parts of Asia. This picture however is quickly changing. For example, the NEVI program, which came out of the Bipartisan Infrastructure Law last year, has allocated $7.5 billion over five years to improve the charging infrastructure in the US. It requires that states install and operate DC fast charging station every 50-miles along highways across the country. The $5 billion formula program will be allocated and administered directly by individual states. An additional $2.5 billion discretionary program with more ample reach in terms of charging technologies will also be introduced with more details to come later this year. For the formula program, the federal government has released technical guidance that calls for minimum technology standards, and Wallbox is already engaged and providing comments as they finalize these requirements. The requirements as drafted include four chargers per site with each charger needing to charge to at least 150 kW of power. This aligns perfectly with Wallbox's introduction of Hypernova to the US market. Additional guidelines include requirements around uptime and reliability, open payment systems, and of course the location of manufacturing and materials to be used in the equipment. With respect to the NEVI program timeline, states have already submitted their plans by the August 1st deadline, and the federal government will review and approve these goals from now through September 30th. We anticipate most state programs to begin launching in 2023, with additional opportunities for public engagement ahead of those RFP announcements. Wallbox is engaging with key priority states based on their funding allocation, EV market penetration and other funding opportunities to position Wallbox as a leading provider of NEVI-compliant EV chargers ahead of program implementation. We believe that the largest opportunity over the long term will be in the 150kW to 400kW range, which aligns with the NEVI program and also Wallbox's Hypernova DC charger. While most electric cars on the road today don't benefit from the maximum power available in this range, we're already seeing vehicles with higher power charging capabilities hit the road who would be looking to benefit from faster charging than what's being installed today. For this reason, we've prioritized the development, certification, and production of Hypernova. This ensures that we are set up for success over the long-term. In addition, our new capabilities through COIL allow for the installation of different configurations and types of qualifying infrastructure which puts us in a great position to win business. Investing in the right technologies for the long-term viability of the business is key, and our goal is to be a leader in the ultra fast public charging space in the coming years. The other piece of legislation getting attention is the Inflation Reduction Act of 2022. This was just passed through the Senate over the weekend and is expected to pass under the reconciliation process next week. The Inflation Reduction Act is a massive package that includes $379 billion in climate investments and represents the United State's largest single investment in this area in history. The package includes both consumer and corporate incentives and loans with the aims of reducing emissions by 40% by 2030. The main mechanisms for the incentives are tax credits and loans. There are a few key elements of this bill that will benefit Wallbox both directly and indirectly. First, consumer tax credits known as 30D for the purchase of EVs are expected to be extended and renewed. $7,500 will be offered to buyers of new EVs, and most importantly, $4,000 will be offered to buyers of used EVs. The language also removes the manufacturing cap, leading to more vehicles, including Tesla, being eligible for the tax credit, ultimately this accelerates adoption of our products by creating additional demand for home and public charging. It's worth pointing out that the used EV rebate is the first of its kind from the federal government, creating additional accessibility in the growing second-hand EV market and also helping to fill in the near-term production capacity constraints that many automakers have today. Second, the 30C EV Infrastructure tax credit has been extended and dramatically expanded from 30% or $30,000 per site to now 30% or $100,000 per charger installed. The package also now qualifies bi-directional charging equipment as eligible a unique area of leadership for Wallbox. I'd like to highlight that the individual tax credit of 30% of the cost up to $1,000 toward a home charger plus installation is also expected to be extended as it has been expired since the end of last year. Again, with the addition of COIL we are very well positioned to benefit here as well since installation costs are an important component to maximize the value of the incentives toward business and customers. The expansion of these credits could bring in new-sustained demand for charging hardware that Wallbox is well-positioned to deliver. Another area of incentives to mention is the extension of the 45W tax credit for commercial vehicle purchases. Ranging from $7,500 all the way up to $40,000, this incentive will help expedite the electrification of commercial fleets and will ultimately benefit Wallbox through additional commercial opportunities to provide EV charging, installation, and energy management services to fleet partners. It's Important to note that these changes have been extended until 2032, providing a steady stream of federal incentives over the next 10 years. The size and scale of this proposal is viewed by many as the most ambitious and impactful infrastructure program in the last 70 years. We are in a great position to participate and we're focusing now on bringing new products and services to the market as quickly as possible. The final subject I want to provide an update on is our new factory in Arlington Texas. You've heard us mention it a few times so far and I'm excited to share that it is on track and looking great. The production lines are being installed, raw materials are in stock and in place, and employees are eagerly moving in to work directly from within the facility. We continue to hire and train production team members and supply chain agreements are being finalized to prepare for an aggressive ramp-up to meet upcoming demand. We'll have a formal celebration when the time is right, so stay tuned for that. Bringing this capacity online is important given all the opportunities we have discussed today. I'm encouraged by the progress we've made and look forward to even more of what's to come. Jordi, I'll turn it over to you for comments on our financial details.

Thank you, Douglas. Good morning and good afternoon to everyone. Before I review the financials, I'd like to point out that a full set of annual audited financial results can be found in our 20-F. As a reminder, our intention is to provide you with key unaudited financial and operational measures as we make our way through the year, so you can remain informed of our progress. Also note that neither ARES nor COIL are included in our second quarter results. Like Enric, I'm very pleased with our record quarterly results and the acquisitions we've been able to close. Our revenues, gross margins, number of units sold, geographic footprint and headcount, highlight the scalability of the business model and the strength of the EV market. For the second quarter 2022, revenue was EUR39.5 million, a 124% increase from the year-ago period, driven by strength across all regions and products. Now, let me share with you some key highlights that allowed us to perform so well in the quarter. First, our regional mix, now with more than 100 countries, continues to improve upon the benefit of geographic diversification. Europe now represents 81% of our revenue mix, down from 89% last year. North America accounts for 13%, up from 7% in the prior year period. And Asia-Pacific is 2 percentage points higher than last year, now at 5%. We expect these mix trends to continue as stronger growth in newer geographies shapes our global footprint. Second, gross margins continue to be resilient in the face of continued component shortage, and 41.1% is something we're very proud of. For most of our products, we've been able to navigate these supply challenges quite well. This consistency is something investors have come to expect from Wallbox, and we work very hard to deliver results that meet, and when we can, exceed expectations. We're building a company that is delivering results in a time of hyper growth and expansion. Balancing the capital needs of the numerous opportunities we see, in an uncertain economic climate, requires us to remain disciplined and focused on executing our strategic plan. I'm proud of the team and their commitment to delivering consistent and strong gross margins. Adjusted EBITDA loss for the quarter was EUR15.6 million, relatively flat on a sequential basis. Our balance sheet remains strong, with EUR127 million of cash and equivalents available, which we believe is enough for us to fund operations until positive cash flow. We ended the quarter with EUR23.3 million of long-term debt. As of June 30, there were more than 1,100 Wallbox employees around the world. We intend to strategically add talent in areas that fuel our growth and remain disciplined in cost control actions. With that, I will now turn it back to Enric to provide you with some commentary around Q3 and the full year.

Thanks, Jordi. As I stated earlier, EV deliveries continue to fall well short of EV orders. In the long term, I’m not overly concerned by this. In the near term, it may have a slight impact on the timing of our sales. There are numerous positive trends that we are benefiting from, and often in an industry that experiences growth of this magnitude, manufacturing expansion comes in fits and starts. We understand the capacity constraints are within the scope of normal growing pains and we will continue to take share where we can, manage our supply chain and acquire attractive businesses that expand our opportunities and capabilities. Given what we see and have discussed here today, we expect consolidated revenues in the third quarter of between EUR44 and EUR49 million, or growth of approximately 140% to 170% year-over-year. We also expect gross margin of approximately 40% in the third quarter, in line with our full year expectations. For the full year 2022, we expect revenue of between EUR175 million, and EUR195 million, representing an annual growth rate of between 145% and 170%. I want to leave you with a few key thoughts. First, we are confident in our ability to execute our business plan and meet our commitments to investors, customers and partners, achieving consistent results, including revenue growth and gross margin is key to our philosophy and long-term success. Second, our portfolio continues to evolve and expand, designed to meet the future needs of customers around the world. Third, the scale at which we operate provides a platform for us to reach more customers and continue to take market share. And finally, the [perception] of EV as a less desirable option is history. EVs are now the first choice for many drivers and the amount of consumer demand, industry support and government subsidies have brought us to a critical inflection point. We are also confident that auto manufacturers will ultimately be able to meet this demand, as they invest in new factories and fortify supply chains. In summary, we have an exceptional business with a great team in a large and growing market. We couldn’t be more excited about the future of Wallbox and the EV industry. That concludes our prepared remarks today. And now, we will take questions from our covering analysts.

Welcome back, everyone. To our analysts, we ask that you pose one question with a follow-up if needed, then reenter the queue, if there's more. This will allow each of you to ask your questions upfront, and we'll get to as many -- as questions -- many questions as time allows. Victoria, I think you have some instructions for our audience today.

[Operator Instructions] And our first question comes from Chris Snyder at UBS.

I was hoping for an update on Supernova production. The release noted that the Company is working to aggressively ramp production. I was just hoping for any color around units produced in the second quarter and how we should expect that to trend over the rest of the year?

Hi, Chris, thank you for the question, and thank you for attending. This is Enric. So right now, we are producing this month of August around 15 units of Supernova per week, and we expect by the beginning of September to ramp up to 40 units a week, as we believe assembly line is already going to be fully operative. That means that for Q2, we achieve our target of deliveries of roughly around 100 units. And for Q2 and Q3, we will be able to more than double this in Q2 and double again in Q -- sorry, double in Q3 and double in Q4 again. So production is growing as expected. The new assembly line is working fine. And as I said, by beginning of September, there's going to be -- we will divide by 3, our current production rate with the production rate.

Very happy to hear the ramp is ongoing. And then I guess, for my follow-up, I really appreciate all the color and insight on the U.S. infrastructure and just broader investment in the EV space. I'm not sure if that was still on the line. But I guess my question would be within all of that, the data you shared, did anything stand out, as, I guess, the most positive for Wallbox, and there -- was there anything in the bills or the legislator -- legislature that surprised you guys?

Douglas, do you want to take this question?

Yes. Absolutely. No problem. Yes. It's actually great to see the levels of support that have come through related to investments in climate from the administration and the final makeup of the bill as has been proposed and passed by the Senate over the weekend. One of the, let's call it, most exciting aspects of it is that it's well grounded and very aligned with where Wallbox is in terms of producing products, services and also product road map from a technical standpoint. So that really begins with the renewal of the consumer tax credits related to the purchase of new EVs. So removing the caps on previously expired credits from certain brands that are leading in this market is very exciting because the single passenger vehicle market really drives the purchase of home and workplace chargers, which is where most charging happens and that's an area that we're very active and leading today in the U.S. market. Another exciting aspect of this was the addition of tax credits towards used EVs. So with supply chain constraints and deliveries being pushed out for many new EVs in the market, being able to access and increase the total addressable market on the used EV side was a great surprise, and I think an area that will perform quite well. And lastly, really, if the elements that all of these tax credits, whether they're targeted towards residential, commercial or even highway corridors are in place over the next 10 years. So that gives us a sustained outlook in terms of possible opportunities to participate and benefit from participation in the incentive programs and delivering our products out to customers and partners across the U.S.

Victoria, next question?

Our next question comes from Stephen Gengaro at Stifel.

I think 2 things for me. The first -- just a follow-up on the prior question. Is there -- one of the things that's come out from like, I think, the United Auto Workers and just some of the things we read in the press is that -- is the income cap on the federal tax credits for new EVs. I'm just wondering, if you were to dug into that at all, if you had any thoughts around that, the impact on sales.

Sure. I'm happy to comment on this. In terms of -- sorry, go ahead, Matt.

No. I was just going to say any thoughts on that, Douglas.

Oh, sure. Sure. Absolutely. So as it relates to the income caps in terms of where the industry has landed on these and where the bill is going with them, I believe the limits are for single earners [150,000], for household [300,000] in terms of income limits, which in terms of what's been communicated from administration officials and the industry actually applies to a large swath of folks across the U.S. So from our point of view, we're quite happy with the outcome of the bills. We think there's a broad application for incentives across many different parts of the bill, in addition to the purchase of new EVs, like also increasing access for folks purchasing used EVs. And all of this is also to say that there are incentives, which are being brought back from [expiration], like the residential tax credit for EV charging, which allows for 30% of the cost of charger plus installation, up to $1,000 for the purchase of EV chargers and that has no income limit. So as far as infrastructure is supported, there's no limits and really supports the consumer and businesses.

That's helpful on the charging side. And then the other -- just follow-up, and I know this is probably -- there's probably a lot of moving pieces and it's a complicated answer. But if we think about the mix shift, I know you get the Supernova's and Hypernova's rolling and address some of that maybe fast charging needs. What does that do to the gross margin profile, if we were to assume kind of the inflationary environment just kind of stays where it is, I know there's a lot of cost pieces. But what does that mix ultimately do to gross margins over the next couple of years?

I think, Stephen, in the short term, it does have a slight impact only as we ramp up production, right? And so as you achieve scale, those margins improve. And I think that they -- we expect them to be within the range of sort of corporate average. I think over the longer term, we don't expect the shift in mix to have a drastic impact to gross margin. So I wouldn't change anything in your model. As we bring on new products, though, in the first quarter or 3, there tends to be some movement around margins, but we've been able to navigate that actually quite well, as you've seen over the last 2 quarters, even in the face of ramping up Supernova.

Victoria, next question?

Our next question comes from Gabe Daoud at Cowen & Co.

Thanks for all the prepared remarks so far. Guys, I was hoping we can maybe just get a little bit of color on the two acquisitions. So COIL, could you just maybe talk about the strategy here? Will you continue to install third-party hardware, maybe just anything on geographic footprint? And then, ARES, similar question, will you continue to supply PCBs to third-parties? Or is this more about just bringing that functionality and how to help Wallbox solely.

Hi, Gabe. Thank you for joining today. Regarding ARES, the second one, we expect to -- that they sell to us if we have additional capacity. So if we have additional capacity [that company] has additional capacity will sell to us. But I don't expect this to happen to -- in high numbers in the midterm because only our expected growth will keep them very easy. As we have been the main customer for them historically since we started our commercial relationship. And basically, what we are bringing with ARES is faster product development cycles, making sure we can deliver our products. And obviously, there's going to be cost synergies that we expect to give you more information, as we come into 2023, but we expect improvements in cost of all the products, as we include the positive EBITDA of ARES in the production. Regarding COIL is a -- is a totally different acquisition is in the other side of the vertical integration. COIL increase our addressable market. They are installing for others. They install for some of our customers and some of our competitors even. We are happy that they keep doing that. This actually help us to start having revenue for some products that we don't have today or maybe we will not be interested in having in the future. They do installations for any type of charger. And so maybe, some [pass on] segments, we're going to go come later or we never will come. As you know, our focus is in home charging and fast charging, but they install any kind of charger. So we are happy that they sell to us and provide service to others. It makes us learn. It help us enter faster markets. It increases our total addressable market. And again, it increases the revenue per customer. And I think both acquisitions at the end what they are doing not only make us grow faster, also bring our positive EBITDA and positive cash flow sooner. And I look forward, as we go -- come into 2023 to give you more color in this.

Hey, Gabe, remember that bringing COIL into Wallbox allows us to enter that conversation. It allows us to enter that project earlier than we normally would, right? So COIL is often one of the first folks in the ecosystem to engage with that end customer. They help design the project and they can make recommendations. And so entering that project at an earlier phase certainly puts us at an advantage. And some of the -- some of the partnership [indiscernible] sorry, go ahead.

No. Thanks, Doug. Sorry. My follow-up was just going to be around guidance for this year. I think, if we just kind of do the math, it implies a pretty big ramp in 4Q. And I think historically you've said that, that usually is the strongest quarter of the year, just given spending around the holiday season. So I was just curious if you can maybe confirm that and just talk a little bit about that ramp?

Yes. Absolutely. So we are keeping the guidance we told you during the IPO last year. And we want to make sure that we give a guidance range -- guidance range that we believe is reasonable and achievable. Historically, it's like that Q2 and Q4 are very strong quarters because we are following EV deliveries. Car manufacturers always try to deliver all the cars they can before the end of the year, so in Q4. So always, Q4 has been a very strong quarter for us. And internally, we are following the Q2 guidance that we expected growing 140% to 170%, which is what we should be doing to achieve the full year guidance. So it as expected Q4 will be the stronger quarter. I always assume like that.

Victoria?

Our next question comes from Ben Kallo at Ben & Co -- Baird & Co.

Just my question was about the -- is about the bidirectional charging and just how energy prices have maybe impacted the demand, whether it's in Europe, U.K. or here in the United States because of your ability there?

Hi. Ben, thank you for joining. So -- we are actually seeing this last quarter, an increase on Quasars -- Quasar 1 sales, mostly V2G projects, as we used to -- we have been selling. But yes, there's more and more customer interest on Quasar 2, which is the ideal product for what you are mentioning, especially also in case of a blackout, Quasar 2, we'll be able to provide you with electricity. We are hearing these things in Europe. I know in some states in the U.S., it already happened the blackout, but in Europe is a new thing, the blackout. But we have -- we are hearing this from our government in most European countries that there could be energy challenges, as we move into the winter. So we are accelerating the development of Quasar 2 to have it in production, as soon as possible, hopefully, beginning of next year. And we believe it's going to be a very successful product everywhere in Europe and the U.S. But yes, there's more and more, more comments about these. People is looking forward for this product, not only for saving money, energy prices, now about the blackouts and having a more resilient grid at home. That's what people is looking for.

And just a follow-on. I know you guys touched on this, but can we just talk about your cash and cash usage going through the year, as you ramp up factories and things like that. So how we should expect cash at the end of the year?

Hi, it's Jordi Lainz, Ben. Well, as we mentioned in our presentation used in cashing available at the end of June was [127] is in line, which was we forecasted in our finance model. And we are still confident that we will have enough cash to cover all our finance model until we are expecting to achieve profitability on 2024. So we are -- we have increased significantly our working capital finance lines in order to finance our growth. And this is what we are expecting also from the rest of the year that we will have enough capacity to finance our growth in inventories and receivables for financing our growth.

Yes. I want to add Ben, then that we are being super conscious on spending -- for example, CapEx and OpEx, especially in the CapEx side, the U.S. factory, we split the process in 2 steps in terms of CapEx to make sure we have enough capacity for the next year, and then there's going to be a second phase in Arlington for mid-2023. So we are investing very thoughtfully to make sure we don't -- we just use what we need for the next 12 months. The same are with hiring, making sure, we hire exactly what we need. And even with acquisitions, these acquisitions are not only helping bring cash flow positive forward. Also, we are making sure we pay them mostly almost everything with stocks, which I think is great that these companies and the leadership in these companies accept this method of payment. And they are looking forward to have this payment because that means, they trust in logos and the performance of our stock. So we have -- we all have extra highs, obviously, not impacting at all our growth, but making sure that we bring forward the profitability as a Company.

Victoria?

Thank you. Our next question comes from Alexander Virgo at Bank of America.

I wonder if I could just touch a little bit on Enric still, your comment there about the vagaries and the volatility of EV production. And I wondered if you could just give us your view or commentary on how that looks like it may or may not sort of improve, I guess, over the balance of the year and into next. I mean, it's obviously not really showing up in your own growth, which looks fantastic. But just trying to understand whether you feel that there's been constraints in your growth because of that whether it could even have been stronger. And I think, I guess, where I'm coming out really is if we see a slower ramp in EV sales or EV production in Europe and the U.S., is that something we just need to be a little bit mindful of as we think about the balance of the year for you guys? And I guess, if I could ask as a follow-up to Jordi. Can you give us any feel for the buckets of that cash movement in the quarter, with respect to how much of it was working capital, how much of it was inventory build? Because I know you guys have done a great job of making sure that you can always get product to the customer either in contrast to some of your peers?

Thank you, Alex. Yes. So Q2 EV deliveries in Europe were not great. Also in the U.S., were not -- we didn't grow as expected. As I say, EV deliveries in Europe in Q2 dropped 2% versus 2021. That said, as you point out, we were able to grow as expected, even over perform, given our market share increase bigger than we expected. So obviously, as EV deliveries ease and we even can see that terminal factories can catch up. We are seeing all of the factories being announced. Hyundai investing [5.5] billion in the new factory, the new factory of Rivian, [5 billion], Ford [50 billion], GM [7 billion]. So there's a lot of new factories coming, and obviously, that will take some time. But if in the next quarters, the supply chain gets easier and deliveries increase, there's potential for upside for us. The numbers we are giving you for guidance, we are taking in mind that the market slightly improved because I think Q2 was this war because especially the conflict in Ukraine, given there were some harness provider -- the cable harness provider that couldn't deliver and that affected a lot of EV and car manufacturing. So I think that was part of the impact. But as you point out, if -- given the increase in market share that we have and we have more market share than we anticipated now, if EV deliveries ease and increase, we have potential for upside.

Hi, Alex, in terms of why that we are planning to invest, as we mentioned, our existing cash is basically focused to finance and fund our CapEx and OpEx for the next 18 months. And basically, what we are expecting in terms of working capital, as we are increasing our inventories, as we are launching new products as Supernova and Hypernova, and we are launching a new factory in U.S., is to achieve the working capital finance capacity. Today, we have over more than 75% of our needs for year-end, then it means that we are quite comfortable that we will achieve it, and we will not have to engage any additional euro for financing working capital. Basically, with our focus set in our new factory at the beginning of this year in Barcelona, [B26], and also in our new factory in Arlington that as mentioned ready for, we will inaugurate in September.

Victoria, I think we have time for one more question.

Our final question comes from Stephen Gengaro at Stifel.

Thanks, and I'll make it quick. But earlier, there was a question on the bidirectional chargers front. And I was curious, it seems like -- and you guys are a little closer to this plan, but it seems like more and more manufacturers are including that and that capability is embedded in a lot of the new EVs, which the OEMs are rolling out. Are you seeing that? And do you expect to see a ramp in demand for the bidirectional chargers driven by that over the next couple of years?

Yes. Thank you, Stephen. Absolutely. And we are seeing in both directions, AC bidirectional and DC bidirectional. We're making sure our products are compatible with both systems, AC and DC. The main problem that is now with all these new cars announcing bidirectional compatibility is that today, there's no standard for bidirectional charging. And that will be hard for a company that just starts to make -- tries to start making a bidirectional charger. But however, because we have already won, and we are being contacted by all -- many of the car manufacturers that are launching these functionalities, we are making sure that Quasar 2 is compatible with a lot of these new car manufacturers. So the lack of standard is not helping in the short term, but it's giving us an advantage, as we are making sure working with the car manufacturers together that our product is going to be compatible with many of the car models. So yes, it's good. It's increasing our total addressable market. And in the short term, I believe we have an advantage compared to others due to the lack of standards.

Got it. Well, to our audience, that's going to be our last question. Thanks, everybody, for joining us today. We hope you found today's call a good use of your time. Our next quarterly earnings call will be held in November. And also please note that we have numerous investor events held throughout August and September. And so if you'd like to spend some time with us, just check the calendar of upcoming events for conferences or you can reach out to us at investors@walbox.com. Let us know if we can help you in any way. Have a great day, everyone.