Nanoxplore Inc.

Total revenue in Q2 fiscal 2026 was $27.6 million, down 17% from Q2 last year, mainly due to lower demand from the two largest customers and lower tooling revenue. Adjusted gross margin was 21.5%, versus 21.3% last year, and adjusted EBITDA was $224,000, down $880,000 year over year. Segment adjusted EBITDA was $181,000 in Advanced Materials, Plastics and Composites Products and $43,000 in Battery Cells and Materials. The company ended the quarter with $30.1 million in cash and cash equivalents, $14.6 million in debt, and total liquidity of $40.1 million. Management guided full-year fiscal 2026 revenue to $115 million to $120 million. CapEx is expected to be another $4 million to $5 million in Q3, then fall to less than $1 million per quarter after the current projects are completed.

Rocco Marinaccio framed the quarter as an inflection point, saying NanoXplore saw sequential improvement across revenue, gross margin and adjusted EBITDA. He emphasized disciplined capital allocation, pointing to the decision not to proceed with the $100 million CSPG project because of tariff, geopolitical and customer-qualification risks. He also highlighted strategic progress in dry-process graphene, Club Car launch execution, the Volvo Trucks contract, and growing customer testing in the CPChem/NanoSlide opportunity.

Pedro Azevedo said revenue of $27.6 million was 17% below last year, but adjusted gross margin still expanded to 21.5% from 21.3% because of powder sales, Club Car and existing overhead leverage. He reported $30.1 million in cash, $14.6 million in debt and $40.1 million of total liquidity at quarter-end, with operating cash flow of negative $6.4 million, financing cash flow of positive $30.1 million and investing cash flow of negative $3.6 million. He said $3.6 million of CapEx was spent in the quarter, another $4 million to $5 million is expected in Q3, and ongoing CapEx should drop below $1 million per quarter after the SMC and first dry-process module are completed.

Analysts pressed on how far margins could expand from the 21.5% level, and management said sequential improvement should continue, with Pedro pointing to a path toward 22% and 23% over the next few quarters if Club Car, Tribograf and customer volumes recover. Questions also focused on the dry-process graphene ramp, where Rocco said the mill is on track for early April, customers are in different stages of testing, and the timing of meaningful revenue remains hard to predict. On CPChem, management said capacity is sufficient for now and that additional customer testing, including a large oilfield services player, is progressing from lab tests into field trials. Analysts also asked about the Volvo award; management said it is a takeover contract, adds to the previously announced $40 million of business, and has roughly 4 to 5 years remaining.