Pyrogenesis Canada (PYR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached CAD 3.93 million (USD 3.93 million), up 29.6% year-over-year and 13% sequentially, marking the fifth consecutive quarter of growth and the third-best Q2 in company history.

• Net income for Q2 2024 was CAD 1.4 million, reversing a loss of CAD 6.3 million in Q2 2023, with EPS of $0.01.

• Backlog as of August 6, 2024, stood at CAD 29.8 million, nearly equally split among business verticals, with revenue expected to be recognized over three years.

• The company is transitioning from one-off sales to repeat and multi-unit orders, expected to drive higher margins and operational efficiencies.

• Strategic focus on energy transition, commodity security, and waste remediation is yielding new contracts and industry partnerships.

Financial highlights

• Q2 2024 revenue was CAD 3.93 million, up 29% year-over-year and over 13% sequentially.

• Gross margin improved to 30% from 21.7% in Q1, but was down from 37% in Q2 2023 due to higher direct material costs.

• Gross profit was CAD 1.1 million (29% of revenue), stable in absolute terms but lower as a percentage due to sales mix and higher costs.

• SG&A expenses dropped sharply to CAD 0.2 million, mainly due to reversal of credit loss after collecting CAD 4.1 million from a Saudi client.

• Comprehensive income for Q2 2024 was CAD 1.4 million, a CAD 7.7 million improvement from a loss of CAD 6.3 million in Q2 2023.

Outlook and guidance

• Backlog stands at CAD 29.8 million, nearly equally split among the three business verticals, with a slight emphasis on energy transition.

• Management expects continued revenue growth, improved margins from repeat and multi-unit orders, and ongoing cost control.

• Large potential contracts, such as a European waste-to-energy project (phase two valued at €120–160 million), could significantly impact future results.

• Near-term milestones include further Drosrite payments, warrant repricing, and progress on aluminum remelting and plasma torch contracts.

• No specific revenue or net income guidance for 2024 due to early market adoption stage.