ADS-TEC Energy — Financing a long-term revenue stream

ADS-TEC Energy (NASDAQ: ADSE)

Last close As at 05/05/2025

USD13.48

−0.07 (−0.52%)

Market capitalisation

USD727m

More on this equity

Research: Industrials

ADS-TEC Energy — Financing a long-term revenue stream

ADS-TEC Energy has been building a strong position in battery-buffered fast charging systems. To date the company has largely operated through unit sales with some additional services. The $50m gross fund raise will enable a shift to providing a complete system and service delivery model, enabling ADS-TEC to participate in longer-term revenues than its charging infrastructure currently offers, while customers will benefit from an outsourced business model. This should generate a more stable and longer-term revenue stream for the company and shareholders.

David Larkam

Written by

David Larkam

Analyst, Industrials

Alternative energy

Additional financing announced

6 May 2025

Price $13.48
Market cap $730m

Net cash at 31 December 2024

€22.7m

Shares in issue

53.9m
Free float 55.8%
Code ADSE
Primary exchange NASDAQ
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (5.2) (9.6) 25.8
52-week high/low $16.2 $10.2

Business description

ADS-TEC Energy makes battery storage-based energy platforms. These buffer systems enable consistent, high-power delivery for systems such as EV charging.

Next events

FY24 full year results

12 May 2025

Analyst

David Larkam
+44 (0)20 3077 5700

ADS-TEC Energy is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Forecasts are under review pending publication of the full FY24 results.

Year end Revenue (€m) PBT (€m) EPS (EUc) DPS (EUc) P/E (x) Yield (%)
12/22 26.4 (13.6) (33.10) 0.00 N/A N/A
12/23 107.4 (26.9) (56.50) 0.00 N/A N/A

$50m gross fund-raising

ADS-TEC has issued $53.8m of convertible notes, which, post a 7% initial discount and placing agent’s fees, will provide net proceeds to the company of $47.8m. The notes are convertible at any time at an ADS-TEC share price of $16.88 and carry annual interest of 2% (rising to 12% on any default). The notes mature on 1 May 2028. The full details can be found in the prospectus on www.sec.gov.

Reasons for the raise

ADS-TEC provides battery-buffered storage/fast charging systems. Activities include hardware (designed and assembled in-house), proprietary software along with some additional services. To date the business has operated in the B2B space, in particular developing strategic partnerships, primarily in the electric vehicle (EV) charging sector. Revenues have largely come from equipment sales, which are one-off and can be somewhat lumpy (note the recent delay of deliveries from FY24 into FY25 affecting FY24 turnover). This additional finance will enable a step change in the offering as a vertically integrated supplier providing a comprehensive package including financing, installation, operational management, digital advertising and energy trading. Customers will benefit from ADS-TEC’s operational experience to generate higher revenues along with reduced operating costs, while ADS-TEC will gain a longer-term, higher-margin revenue stream. Initially the focus is expected to be on EV charging at a range of locations most applicable to battery-buffered fast charging such as at supermarkets, convenience stores, DIY retailers and gas stations. We would expect future expansion into other sectors such as renewables buffering, etc. The company has a pipeline of over 300 sites in Germany and expects recurring revenue from deployment of the additional funding to ramp up from late 2025 into 2026.

Next update and Edison forecasts

ADS-TEC announced preliminary figures for FY24 in February. Full FY24 financials and a management presentation are due on 12 May. We expect this to include guidance on FY25 and plan to reintroduce forecasts at that time.

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This report has been commissioned by ADS-TEC Energy and prepared and issued by Edison, in consideration of a fee payable by ADS-TEC Energy. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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