2Q21 Results: +330% Top-Line Growth Drives Gross Margin Expansion and EPS Improvement



KEY POINTS
  • On August 16, 2021, Polar Power reported 2Q21 earnings results. The company delivered impressive top-line growth in the quarter along with gross margin expansion and EPS improvement.
  • As of June 30, 2021, the company’s revenue backlog stood at $6.7 million, with 37% attributable to Tier 1 US telecom customers, 47% to advanced mobility applications in commercial vehicles, 12% to advanced mobility applications in military vehicles, and 4% to other customers.
  • Revenue grew +330.5% y/y and +47.3% q/q to $4.8 million fueled by higher DC power system sales to Tier 1 US telecom customers in support of their 5G infrastructure buildout.
  • Polar Power saw strong top-line growth from all major product categories with DC power systems growing +331.6% y/y, engineering services +317.6% y/y, and accessories +288.9% y/y.
  • Gross profit improved to $1.0 million or 20.0% of revenue in the quarter as higher sales volumes led to an increase in factory overhead absorption and improved production facility utilization.
  • Net income increased +$1.4 million y/y and +$1.0 million q/q to -$0.9 million, mainly from higher gross profit, partially offset by opex investments in R&D, T&E, and headcount. Diluted EPS grew +$0.16 y/y and +$0.08 q/q to -$0.07 per share.
  • As of June 30, 2021, cash on hand stood at $8.5 million and debt outstanding was $3.7 million, including leases. Management believes it has sufficient liquidity in place to meet its anticipated working capital, debt service, and other liquidity needs for the next twelve months.
  • In 2H21, management expects to expand its customer base within the advanced mobility and military markets, and anticipates higher sales as the global economy recovers from the Covid-19 pandemic.
  • Our prior content on POLA can be accessed HERE.

EARNINGS SNAPSHOT

On August 16, 2021, Polar Power reported 2Q21 earnings results. The company delivered impressive top-line growth in the quarter along with gross margin expansion and EPS improvement.

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