This article first appeared on GuruFocus .
Release Date: May 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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NanoXplore Inc ( NNXPF ) reported a sequential improvement in key financial metrics, including $32.3 million in revenue, a 22.9% adjusted gross margin, and $1.2 million in adjusted EBITDA.
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The company successfully launched its direct graphene manufacturing process, positioning it to fulfill customer orders from this new platform in fiscal 2027.
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NanoXplore Inc ( NNXPF ) has the largest graphene production capacity in the world, offering high purity and competitive pricing, which is unmatched in the industry.
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The company has secured $50 million in business wins for its solutions business, with $15 million already launched successfully.
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NanoXplore Inc ( NNXPF ) is expanding into new markets with its X-GMP D500 HP product, targeting a $3+ billion conductive carbon additives market.
Negative Points
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Adjusted EBITDA decreased by $240,000 compared to last year, partly due to the absence of a one-time grant revenue benefit.
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The company's gross margins were limited due to a higher mix of lower-margin tooling revenues.
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Operating cash flows were negative $3.5 million, primarily due to an increase in working capital.
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The company decided not to pursue the CSPG anode materials initiative, focusing instead on other expansion initiatives.
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CapEx spending was slightly lower than anticipated, indicating potential delays in project timelines.
Q & A Highlights
Q: Can you quantify the volume uplift expected from Volvo and Packer, and how sensitive is your guidance to any softening in heavy truck production rates? A: (CEO) We saw lower demand in Q1, but it has been progressively increasing. We expect this trend to continue through the end of the calendar year, benefiting from the industry's upward direction.
Q: Gross margins came in softer than expected despite a stronger top-line. How should we think about normalized gross margins into Q4 and fiscal '27? A: (CFO) Margins were softer due to ramping up operations and slight inefficiencies. We expect Q4 margins to improve by about 50 basis points, with further increases in subsequent quarters as new revenues come online.
Q: Is the 50 basis point improvement in gross margin sequential from Q3? A: (CFO) Yes, we expect Q4 margins to be slightly better than Q3.
Q: Can you elaborate on where CPChem's product is most effective? A: (CEO) The product is highly effective in horizontal drilling in tough environments, such as North Dakota, Colorado Rockies, and similar terrains in South America and Australia. It reduces drilling time by 20% and is being tested in these regions.
Q: Is the product off-the-shelf, or does it need adjustments for specific applications? A: (CEO) It is an off-the-shelf product, developed over two years, and serves as a drop-in replacement for competitive lubricants.
Q: How does the supply agreement affect quarterly contributions? A: (CEO) Contributions may be lumpy as larger customers come online, leading to significant jumps in revenue. Over time, we expect a stepping aspect with stability between these jumps.
Q: Will increased volumes from Tribograph sales be accretive to gross margins? A: (CFO) Yes, Tribograph sales will significantly impact gross margins positively, contributing more to EBITDA than the revenue line due to its high-margin nature.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
