Microvast (NASDAQ: MVST) reported Q2 2025 revenue of $91.3 million and an adjusted EBITDA of $25.9 million. Despite this being an increase of 9.2% year-on-year (YoY), investors are split on this result due to the revenue falling short of the analyst revenue targets of over $100 million. What investors won’t be upset with is the not so modest 0.05 EPS which beat the target of 0.01 by a margin of 400%.
In this post we will be looking at the key takeaways from the earnings call as well as reading into why revenue missed the targets.
Key Performance Metrics & Updated Guidance
Revenue (Q2 2025): $91.3M.
Gross margin: 34.7%, up versus prior year.
Gross profit (H1 YoY): +68% for the first six months of the year.
GAAP net loss: –$106.1M.
Adjusted (non‑GAAP) net profit: $16.3M.
Adjusted EBITDA: $25.9M.
Cash & equivalents (30 Jun 2025): $138.8M.
Operating cash flow (H1): +$44.3M (H1).
Management reaffirmed full‑year revenue guidance of $450–475M and raised the full‑year gross margin target from 30% to 32%. Later in this post we will analyse whether the reaffirmed revenue targets are still realistic.
Looking at the Revenue Miss — EMEA timing
Although Microvast beat on profitability metrics, the quarter missed some top‑line expectations by quite a margin. What some investors may have missed is that while Interim CFO Rodney Worthen was presenting the geographical split of revenue, he actually provided a key piece of information that helps to explain the revenue miss. When explaining the 17% YoY drop in revenue for the EMEA region he stated the following:
“This is down slightly year over year due to customer platform launches being pushed into later quarters.”
That phrasing strongly suggests the shortfall was timing‑related — orders delayed rather than demand permanently lost. We can attempt to theorise how much revenue he could be talking about If we inflated the Q2 revenue for the EMEA region to bring it in line with the Q1 regional split (APAC 43% / EMEA 52% / USA 5%) . The result of this adjustment would see the EMEA revenue for Q2 reaching a figure of around $56 million which is a $17 million increase. This would inflate the total quarterly revenue to a less modest $108 million. With the geographic split of revenue being (APAC 44% / EMEA 52% / USA 4%).
This is of course speculative and based on the historic Q1 2025 figures. But even if the actual figure is only a fraction of this estimate, it would shift revenue significantly closer to the missed targets.
Year‑to‑date Weighting and Guidance Context
Following the record Q1 earnings I analysed the $450 to $475 million revenue guidance and speculated as to whether it would be achievable (you can view the post here). Applying the Q2 revenue to my calculations. Here is one of the key takeaways from my updated calculations. In 2024 Q1+Q2 made up 43.5% of full‑year revenue. Using the company guidance for 2025 of $450–475M, this same two‑quarter slice implies 46.2% – 43.8% of the annual revenue target has been achieved. This is a modest improvement on last year’s H1 weighting. Put simply, even with the Q2 EMEA timing issues, the first half of 2025 is carrying more of the year’s revenue, which helps explain why management is still comfortable with its full‑year targets.
Backorders and Sales Hiring
Further to revenue missing expectations, the level of backorders dropped almost 9% from $351 million in Q1 to $320 million in Q2. This is the second consecutive quarter that we have seen a drop in this figure which is now 20% lower than the Q4 2024 figure of $401 million.
However there are signs that management is taking action to address this issue: recent sales‑related job listings such as business development managers for both the electric bus and automotive segments of the business, suggest ramping the commercial team to accelerate conversions. CEO Yang Wu also reiterated that growing market share remains a key objective of the company. Given Q2’s geopolitical headwinds, the drop in backorders is not overly surprising, but it is something investors will want to keep an eye on going forward — especially whether new hires convert into sustained order flow.
Cash flow and liquidity — a central focus for investors
Cash generation was a crucial focus for investors this quarter and the results were constructive:
Operating cash flow (H1): +$44.3M, supporting working capital needs and the Phase 3.2 ramp.
Investing cash flow: modest outflow (~$5.1M) tied to Phase 3.2 and capex.
Financing cash flow: small net outflow ($3.2M) were noted.
Ending cash balance: $138.8M.
The net picture is improving cash generation and a stronger liquidity position — important for funding capacity expansion without near‑term dilution.
Phase 3.2 — capacity build to meet demand
Phase 3.2 (Huzhou) remains a critical growth lever: ~2 GWh of additional annual capacity is expected with installation by year‑end and production thereafter. If Microvast executes the ramp efficiently, Phase 3.2 materially increases the company’s ability to capture EV and energy storage contracts — and underpins the revenue guidance that management reiterates. Wu offered guidance that we can expect the initial production in the facility to begin taking place in Q4 2025.
ASSB progress & the 48‑volt stack — broader TAM opportunity
CEO Yang Wu stressed that Microvast is “making significant progress in our development of All solid state batteries” and that the company is “excited to share some updates in the future.” The company also highlighted a 12‑layer, 48‑volt monolithic ASSB stack, which could be applied to AI, robotics and aerospace applications — signalling an intent to target higher‑value, diversified end markets beyond traditional EVs. This type of voltage being attained from a single cell is almost unheard of and Wu suggested that it could continue to go much higher. That roadmap, if realised, expands the total addressable market and could meaningfully increase future margins.
Conclusion
Microvast’s Q2 2025 results are a mix of real progress (gross profit growth, positive adjusted EBITDA, stronger cash generation) and short‑term timing noise (EMEA platform delays, backorder decline). Key takeaways:
The EMEA shortfall appears largely timing‑related and could reverse in later quarters.
Operational metrics (margins, H1 gross profit +68%, positive operating cash flow) are improving.
Phase 3.2 and ASSB work provide credible growth and margin levers.
Backorders and the cadence of EMEA orders remain watchpoints — management’s hiring push should be monitored for conversion success.
Overall, the results support management’s guidance and show tangible progress — but investors will want to track order recovery in EMEA, conversion of the hiring push to sales, and Phase 3.2 execution over the next two quarters.