To The Moon

$KULR Technology Group, Inc.(KULR)$ is expected to post its quarterly earnings result for Q4 2024 on 27 March 2025 after market close.

The consensus estimate for the quarterly revenue is expected to come in at 2.87 million which represent an increase of 22.83% compared to same period last year.

The earnings per share consensus forecast is for a loss of 2 cents which also represent an increase of 50.13% compared to same period last year.

KULR Technology (KULR) Last Positive Earnings Call Saw A Significant 248.98% Increase In Share Price

KULR gave a positive earnings call on 13 Nov 2024 which saw its share price rise a significant 248.98% since.

The earnings call reflects a generally positive outlook with record revenue and significant operational improvements. However, there are notable challenges such as a decline in product revenue and customer concentration risks. The company is taking steps to address these issues, including diversifying its customer base and improving supply chain management.

KULR Technology (KULR) Guidance On Liabilities Management

During the KULR Technology Group's Q3 2024 earnings call, significant financial and operational metrics were highlighted by executives Michael Mo and Shawn Canter. The company achieved a record revenue of approximately $3.19 million, marking a 5% increase from the same period last year. Customer growth was robust, with total paying customers increasing by 83% and engineering service revenue customers up by 143%. Despite a 60% decline in product revenue attributed to market timing, service revenue rose by 22%. The company also celebrated a significant milestone with its first revenue-generating license agreement, contributing over $1 million. Operating expenses saw a reduction, with research and development costs down 32% and SG&A costs down 41%, resulting in an overall 38% decrease in operating expenses year-over-year. Gross margins improved significantly to 71% from 44% in the previous year, partly due to the license agreement.

The company reported a $0.01 loss per share, showing an 80% improvement from the prior year. The balance sheet showed strength with cash plus accounts receivable up 71% and total liabilities down 45%.

KULR Technology Group Financial Overview

KULR Technology Group shows robust revenue growth with TTM revenue at $9.7 million. However, it struggles with profitability, as indicated by negative EBIT and net income margins. The balance sheet reflects high debt levels, and cash flow is concerning with negative free cash flow. Overall, the company needs to address profitability and cash flow issues to improve financial stability.

Neutral Income Statement

KULR Technology Group has shown a significant increase in revenue over the years, with TTM revenue at $9.7 million compared to $0.6 million in 2020. However, the company is struggling with profitability, as indicated by negative EBIT and net income margins in the TTM period. The gross profit margin is positive, suggesting some ability to cover the cost of goods sold, but overall profitability remains a challenge.

Negative Balance Sheet

The company's balance sheet reflects a relatively high level of debt compared to equity, with a debt-to-equity ratio of 0.52 in the TTM period. The stockholders' equity has fluctuated, showing negative values in prior years, indicating potential financial instability. The equity ratio is moderate, suggesting that a significant portion of the company's assets is financed by debt.

Negative Cash Flow

KULR's cash flow situation is concerning, with negative free cash flow and operating cash flow in the TTM period. The free cash flow growth rate is unfavorable, indicating a decline in the company's ability to generate cash. Financing activities are a primary source of cash, which may not be sustainable in the long term.

Key Considerations for KULR’s Q4 2024 Earnings

Company Background: KULR specializes in thermal management and battery safety solutions, critical for industries like electric vehicles (EVs), aerospace, and energy storage. Growth in these sectors could directly benefit their revenue.

Recent Performance Trends

Revenue Growth: Historical data shows increasing revenue, though profitability remains elusive due to R&D and operational investments.

Partnerships: Contracts with NASA, Lockheed Martin, and EV/energy storage firms could drive future revenue if expanded or renewed.

There have been many positive news on the partnerships that KULR have managed to secure.

On Jan 27, KULR Technology Group announced a strategic partnership with EDOM Technology to expand its reach in Taiwan’s AI supply chain.

On 22 Jan, KULR Technology Group announced a collaboration with Scripps Research Institute’s Baran Lab to develop a novel pyrolytic carbon electrode technology.

On 30 Dec, KULR Technology Group announced a significant licensing agreement with a new partner to develop advanced carbon fiber cathode applications for nuclear reactors in Japan. KULR Technology Group has announced a collaboration with the U.S. Army to evaluate its KULR VIBE system for vibration reduction on AH-64E Apache and UH-60 Black Hawk helicopters.

Market Opportunities

Rising demand for battery safety in EVs and renewable energy storage presents a significant tailwind.

Aerospace and defense sectors may offer additional contracts, given KULR’s existing collaborations. In November 2024, KULR Technology Group has secured a significant contract to develop a Phase-Change Material heat sink for a major missile program, enhancing their role in defense applications.

Competitive Landscape

Competition in thermal management (e.g., Honeywell, Boyd Corporation) requires KULR to maintain technological differentiation.

Intellectual property (e.g., patents) and innovation in lightweight, high-performance solutions are critical.

External Factors

Regulatory changes (e.g., stricter battery safety standards) could boost demand.

Supply chain stability and material costs (e.g., lithium, composites) may affect margins.

Technical Analysis - Exponential Moving Average (EMA)

From the technical, we can see that there is a consistent increase of its share price from its last quarter earnings beat, and it did reach a high of above $5, but we need to understand that sector trends like EV adoption rates, government/defense spending, and energy storage investments could affect its earnings.

So from the technicals, we could be seeing a potential investors sentiment rising ahead of its earnings as seen from the RSI which is building up, and the share price is currently at the 50-day EMA and yet to break through for a daily uptrend.

This might seem like an opportunity to look at for possible upside move, but I think we need to monitor how the overall market sentiment is like.

Summary

KULR’s Q4 2024 earnings will hinge on execution in securing high-margin contracts, managing costs, and leveraging growth sectors. While potential exists in their niche, risks typical of emerging tech firms (cash flow, competition) remain.

I would think that while there have been many partnership announcement, KULR remain volatile given KULR’s small-cap status and niche market focus. If the risks which include contract delays, execution missteps, or macroeconomic downturns impacting client spending could bring this small-cap stock into more volatile trading.

So there is a potential small swing trade if there is a surprise earnings beat which might see KULR go into EBITA profitability.

Appreciate if you could share your thoughts in the comment section whether you think KULR could provide an earnings surprise and possible profitability quarter.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.