Greetings. Welcome to Electrovaya's Q3 Fiscal Year 2022 financial results analyst conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Sankar Das Gupta, Executive Chairman. You may begin.
Thanks, Kyle, and good afternoon, everybody. I'm delighted to introduce our new executive team and the company is now in very strong, innovative, energetic and disciplined hands of our new leadership team. Our Chief Executive Officer, Dr. Rajshekar DasGupta, took over the CEO mantle a few months ago. Raj, after an eclectic education at Imperial College, MIT and Cambridge, from where he received his doctorate in materials engineering, researching on lithium-ion batteries, joined us some 13 to 15 years ago. Last few years, he's been our Chief Operating Officer and brilliantly, I believe, turned the company, driving the introduction of the Infinity Battery Technology Platform and unique technology with high longevity and safety without compromising energy and power into the high growth commercial electric vehicle market. I'll now hand over this conference call to our CEO, Raj.
Thank you, Sankar. I'd like to begin with some introductions myself. Electrovaya has had some senior management changes since our last quarterly update. Of course, this includes myself as CEO, but also John Gibson as our new CFO. It has been an honor to have been given this opportunity to lead the company, and I would like to personally thank all our board members for having their confidence in my leadership. Most importantly, I'd like to thank Sankar Das Gupta, my father, and the company's founder, for leading Electrovaya through the thick and thin and guiding the company to its current sure footing. He remains our Executive Chairman. Finally, I'd like to introduce everyone to John Gibson, Electrovaya's new CFO, who is an experienced, talented finance executive who is extremely bottom line driven. A few weeks at the company and comes with fresh perspectives and ideas.
Thank you, Raj. Evening, everybody. Thanks for joining us on today's conference call to discuss the Q3 financial results. Today's call's gonna be hosted by Dr. Raj DasGupta, CEO, and myself, John Gibson, CFO. Today on August eleventh, 2022, Electrovaya issued a press release concerning its business highlights and financial results for the three and nine-month period ended June 30th, 2022. If you'd like a copy of this release, you can access it on our website. If you wanna view our financial statements, management, discussion, and analysis and annual information form or AIF, you can access these documents on the SEDAR website at www.sedar.com. As with previous calls or comments today are subject to the normal provisions relating to forward-looking information.
We will provide information relating to the current views regarding trends in our market, including their size and potential for growth and our competitive position in our target markets. Although we believe that the expectations reflected in such forward-looking statements are reasonable, they do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements. Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company's press release announcing the Q3 fiscal 2022 results and the most recent annual information form and management discussion and analysis under risk and uncertainties, as well as in other public disclosure documents filed with Canadian Securities Administrators.
Also, please note that all the numbers discussed on our call are in U.S. dollars unless otherwise noted. Now I'd like to turn the call over to Raj for some business highlights.
Thank you, John, and good evening, everyone. Electrovaya has reached an inflection point. While not reflected in our results as yet, we have successfully ramped up our production significantly over the last eight weeks. This has involved increases in staffing, work in progress, and inventory to meet our growing order book and further anticipated demand. Some of the key highlights from the quarter include the following. We've seen a substantial increase in order-taking rates, including our largest single order to date of $11 million. We have received more than $30 million in orders during the quarter, which I believe is also a record for us. As I mentioned, we successfully ramped up our production rates in June. While we suffered from some lack of materials in the months of April and May, these supply chain constraints have been effectively overcome.
In June, accounted for more than half of our revenue for the quarter. This positions us well for the remainder of the fiscal year and beyond. We've also brought in new systems, including a successful implementation of ISO 9001:2015, and new hires to support increased production and delivery rates. Finally, we continue to make great progress with respect to the development of our next generation solid-state batteries. We have filed multiple patents and have recently begun sharing some samples with potential partners. We continue to believe that the potential value of this technology is substantial. On a business development standpoint, we continue to make progress growing our relationship with Raymond Corporation through increased dealer engagement, potential new leasing opportunities, and finally, new large accounts becoming customers.
We believe our OEM-focused sales channel enabled us to grow much more quickly due to its vast sales, service, and support networks that are already in place. Given this success, we are continuing to develop additional OEM relationships in markets that are ideal for our Infinity Battery Technology Platform. This continues to be applications that are heavy duty in nature, and also applications that have a greater sensitivity to safety. On both points, I believe our Infinity Battery Technology Platform provides lower overall cost of ownership due to a couple key factors. Firstly, the batteries will last the lifetime of the vehicles they are used in, and in many cases can exceed the vehicle life. Many applications, including material handling, robotics, electric buses, and others, typically need to factor in additional battery replacements, warranty risks, et cetera, which our solutions can avoid.
I believe this is going to become a more important consideration for OEMs as this industry develops. Our Infinity technology platform allows between two to three times the cycle life of typical automotive-grade lithium-ion battery solutions without any sacrifice in energy density or performance. I believe this is a game-changing technology for heavy duty applications. Secondly, I believe the industry is waking up to the high cost of safety liabilities. I'm not gonna go through them individually, but in the recent past, there have been some serious incidents with regards to electric bus fires and electric vehicle recalls due to battery safety. These can not only have substantial financial consequences, but may also lead to slower implementation of these vital electrification movements.
Batteries produced with Electrovaya's Infinity Battery Technology have much improved safety performance due to the high temperature stability of our proprietary separator technology, among other reasons. This is also not an untested technology. It has been tested at third parties, including UL, and in the thousands of battery deployments in the material handling and electric passenger vehicle space that we have made. To my knowledge, there have been no safety incidents that I know of. I will now pass the call over to John to review our fiscal 2022 third quarter results in greater detail.
Thanks, Raj. Revenue for Q3 FY 2022 was $4.3 million, compared to the $1.9 million in the fiscal third quarter ended June 30, 2021, an overall increase of 124%. On a sequential basis, revenue in Q3 was flat to Q2 and three times that of Q1. Revenue for the month of June itself was over 50% of this quarter. This is when we really see the ramp up in production. It's anticipated that sales will continue to grow in the fourth quarter of the 2022 fiscal year and into 2023, as production has ramped up to meet existing demand. We're expecting revenues of $11 million for Q4, which will be a record for the company.
The impact of supply chain issues and inflationary pressures was evidenced by the gross margin for Q3 FY 2022 of 25%, compared to 37% for Q3 in the prior year. The decrease is due to inflationary pressure and material costs, increased shipping and logistics costs, and foreign exchange movements. The Company is taking steps to reduce inflationary pressures, such as ordering key components necessary for 2022 and 2023 deliveries, thus locking in current prices and avoiding further component price increases. We recently amended our credit facility. The working capital facility was increased from CAD 11 million to CAD 14 million. The increase supports working capital requirements in order to accelerate production and meet current demand.
The company believes its available liquidity, along with the collection of $2.9 million of accounts receivable and conversion of $5 million of inventory into saleable finished goods, as well as receiving an additional $4.9 million of inventory in process for which deposits have been recorded in prepaid expenses, is adequate working capital to support our anticipated growth. I'd like to turn the call over to Raj for his concluding remarks.
Thank you, John. For my concluding remarks, I'd like to take a bird's eye view for a moment and examine what Electrovaya is bringing to the energy transformation movement and as a battery technology and manufacturing company in general. Electrovaya is a company with two very exciting technology platforms that are backed with extensive IP. While only one platform, our Infinity Battery Technology Platform, is revenue generating today, both our solid-state and Infinity Battery Technology Platforms are complementary and independently have tremendous opportunities for growth. Electrovaya is also entering rapidly evolving markets that are demanding better batteries, ones where we provide some key competitive advantages. Furthermore, our partnerships and customer base is as blue chip as they come. This provides further opportunities and growth potential for new applications through some of these partners.
Electrovaya's revenues are over 95% from the U.S. As previously announced, we plan to invest in manufacturing facilities in the U.S. to increase capacity and better serve this rapidly growing market. I'm delighted that President Biden is poised to sign the historic climate bill to supercharge clean energy. $369 billion expenditure in climate and energy provisions. That means batteries and batteries and batteries everywhere. That concludes our remarks this evening. John and I would now be pleased to hold a question and answer session. Operator, please open the line for questions.
Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Amit Dayal with H.C. Wainwright. Please proceed with your question.
Thank you. Good afternoon, everyone. First of all, congrats, Raj and John, on your new roles. I'm looking forward to working with you guys. Just getting into sort of the outlook that you've given for fiscal 2023, you know, how much revenue concentration is in that $42 million that you have for next year?
It's very, very broad, Amit. The diversification of our customer base is actually very large. Some of these customers, not all, but some of them are included in one slide in our corporate presentation. I would say, essentially, these orders are fairly, not evenly spread apart, but spread apart amongst those and a few other names that are not included there.
Understood. You know, should we look for margin improvements in fiscal 2023? You know, you're doubling revenues from potentially this year. Where can margins come in for next year?
I think you can expect to see margins remaining roughly the same, at the same level as Q3.
Okay.
Yeah. For the company, we're making moves to increase margins. Like, for instance, we have increased pricing. That said, the commodity pricing remains uncertain, so it's hard to say. We'll at least stay at this level, and we're of course aiming to go back to the 30+ region. One other piece of information I'd like to expand on, so whilst the majority of the revenue or all this revenue is estimated to be coming from the sale of products, there is some recurring revenue, which is of course at much higher margins. That includes things like the analytics that we provide, spare parts, accessories that go with it.
Understood. Is this something you're offering to all clients, or does it come sort of requested from clients? How does the recurring part sort of get packaged into the product sales?
We offer this to all clients. We are able to provide the units with or without these additional add-ons.
We're also adding in some of these new features which are, you know. Let's say if we've sold a battery system to a customer, maybe a year later, they want to subscribe to our analytics EVISION system, then we'll add in some additional revenue and some recurring revenue then. It doesn't necessarily happen at the time of the sale.
Okay, understood. Thank you for that. Do we need any additional CapEx to ramp, you know, from, say, like the low $20 million to the $42 million range?
No. The CapEx that we're planning for U.S. expansion, that would be for later, for even further back. For fiscal 2023, we don't have any CapEx spend required to hit those numbers.
No, no CapEx is required currently to hit the production level that we need to hit the forecast number.
Understood. Just last one for me. Can we expect solid-state batteries to contribute in fiscal 2023, or is that still a little too early?
It would, you know, essentially no. There could be some small sample revenue here and there, but in the grand scheme of things, that's too tiny to compare to the Infinity Battery sales.
Understood. That's all I have, guys. Thank you so much.
Our next question is from Shawn Severson with Water Tower Research. Please proceed with your question.
Thanks. Good evening, everyone. Hey, Raj, if you had a chance to look through the, you know, the Inflation Reduction Act and kind of how that's gonna fit in with you and if there are any adjustments or changes you make to supply chain going forward, given, you know, a number of things that are in play?
I think it'll affect the demand side quite significantly. We're expecting certain markets to expand substantially. Delivery trucks, electric buses, even in the material handling space, that will continue its current growth. I think overall, this is a very, very good piece of news.
Access to capital. All right. Next question is what revenue level can you facilitate? I know you said you made some hiring and some additions. What base revenue can you support kind of in the current infrastructure that you have?
I think with the current infrastructure, we can support $60 million-$70 million on an annual basis.
Great. Thank you. I'll get back in queue.
Our next question is from Jeffrey Campbell with Alliance Global Partners. Please proceed with your question.
Yeah, good afternoon. Raj, you mentioned that you're trying to develop other OEM relationships outside of Raymond. I just wondered how does that go about? How does that take place? Does Raymond present any constraints and basically, how do you get around this?
We're developing relationships which I would say are complementary to Raymond. We're not going to do anything to harm our relationship with Raymond. That would be a dumb idea. No. There's plenty of complementary applications, complementary companies that we are looking to work with. That's not just in the material handling segment, that's in other segments too.
When you talk about being complementary, is that really the point that it's gonna be in trying to get the batteries into other areas besides materials handling or is there a way to be complementary within the materials handling space itself at an OEM relationship?
The material handling space is very broad, right? There's robotics, and robotics is growing dramatically, so we're looking to grow in that space. There's also different classes of vehicles that Raymond may not participate it with. The material handling space itself is diverse. That said, we are also looking at other markets where they have similar requirements for long cycle life and safety. The electric bus and electric truck markets, that is definitely on our horizon.
Okay. I guess the other question, well, 'cause we really haven't talked about this for a while. Are you seeing certain applications within the material handling space that's really driving the growth that you're talking about? In other words, you know, is there a certain class of riders or is some other piece of equipment that seems to be generating more growth within the material handling space than others, or is it really pretty broad-based?
I'd say it's pretty broad-based, yeah.
Okay. That's it for me. Thanks.
Thanks, Jeff.
We have reached the end of the question and answer session, and I'll now turn the call over to CEO Rajshekar DasGupta for closing remarks.
That concludes our call. Thank you for listening this evening. We look forward to speaking with you again after we report our fiscal fourth quarter results. Have a wonderful evening.
This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.