American Battery Technology (NASDAQ:ABAT) reported record quarterly revenue and its first positive gross margin at its initial battery recycling facility, as the company continues to ramp operations near Reno, Nevada, CEO and CTO Ryan Melsert said on the company’s earnings call.
Melsert said the company generated about $7.8 million in revenue during the quarter ended in March, a 64% increase from the previous quarter. He attributed the increase largely to a higher capacity factor at the company’s first lithium-ion battery recycling facility as production scaled.
“This allows us to have a positive gross margin, the first positive gross margin that this company has had,” Melsert said, adding that the result was an important milestone for the company as it looks to scale future facilities.
Recycling Operations Drive Quarterly Growth
American Battery Technology’s business is focused on two areas: lithium-ion battery recycling and the development of its primary claystone-to-lithium hydroxide business. Melsert described the company’s strategy as building a domestic closed-loop supply chain for critical minerals by both recycling battery materials and developing U.S.-based mineral resources.
At the company’s first recycling facility near Reno, American Battery Technology processes manufacturing waste and end-of-life batteries into critical minerals that can be sold back into the market. Melsert said the company works with automotive companies, large grid operators and government agencies, and handles both universal waste and circular classified material.
A significant portion of recent feedstock has come from large energy storage systems, which Melsert said are used to support data centers and artificial intelligence development.
For the first nine months of the fiscal year, Melsert said the company generated about $13.5 million in revenue. Cost of goods sold totaled about $17.9 million, while cash cost of goods sold was about $14 million. He said the company is “getting very close” to adjusted gross margin positive operations on a fiscal year-to-date basis, with three months remaining in the fiscal year.
Company Plans Second Recycling Facility in Southeast U.S.
Melsert said the operational performance of the first recycling facility has encouraged the company to move forward with construction of a second critical mineral recycling facility.
He said American Battery Technology has spent recent months meeting with economic development agencies and state-level politicians and expects to announce details of the next recycling facility “shortly.” The facility is expected to be located in the Southeast U.S.
Melsert said the location decision is being made in consultation with partners across the supply chain, with the goal of improving operations as the company scales its second facility.
Tonopah Flats Lithium Project Advances
In its primary lithium business, American Battery Technology continues to develop its Tonopah Flats Lithium project, which Melsert described as one of the largest identified lithium deposits in the U.S.
The company published a pre-feasibility study last fall and is now working toward completion of a definitive feasibility study. Melsert said the project has been selected by the National Energy Dominance Council and the Federal Permitting Improvement Steering Council as a covered project, which he described as providing streamlined federal permitting.
The deposit is located entirely on land managed by the Bureau of Land Management within the Department of the Interior. Melsert said the company completed all environmental studies last fall, submitted them to the BLM and had them reviewed by the agency. He said those efforts began in fall 2022 and represented nearly four years of work.
Melsert said the definitive feasibility study is the final phase of engineering and financial analysis needed to communicate details of the project to offtake partners, investors and other stakeholders. He said the pre-feasibility study outlined plans for a 30,000-ton-per-year facility.
Balance Sheet and Employee Equity
Melsert said American Battery Technology ended the quarter with about $38.5 million in cash and no debt. He also said the company did not raise funds during the quarter through its at-the-market instrument or through the exercise of outstanding warrants or options.
The company continues to receive support from U.S. government agencies for specific parts of its development and construction projects, Melsert said. He also noted an increase in cash used to purchase property and capital equipment over the nine-month period, while cash-based operating costs declined compared with the same period in the prior fiscal year despite higher throughput at the recycling facility.
Melsert also addressed stock-based compensation, saying American Battery Technology believes employees throughout the company should have ownership through company shares. He said awards are generally issued over several years, often subject to individual or company milestones. Those awards can appear as operating expenses before shares are issued if the company determines a milestone is likely to be achieved.
Melsert said the actual number of shares issued to employees has remained relatively consistent over the past few years, at just over 1 million shares per quarter.
About American Battery Technology (NASDAQ:ABAT)
American Battery Technology Company (NASDAQ: ABAT) is a U.S.-based company focused on developing domestic supply chain solutions for critical battery metals. The company’s core activities span from exploration and extraction of lithium resources to the design and operation of recycling facilities targeted at end-of-life batteries and manufacturing scrap. By integrating upstream resource development with downstream recycling, ABAT aims to create a closed-loop system that bolsters North American battery manufacturing.
On the resource side, American Battery Technology holds lithium claystone claims in Nevada’s Clayton Valley and is advancing a pilot direct-extraction facility designed to recover lithium and other valuable metals from brines.
