Q4 2024 Amprius Technologies Inc Earnings Call
Speaker Change: Good afternoon. Welcome to the Amprius Technologies' fourth quarter and full year 2024 Ernieg's conference call.
Speaker Change: Joining us for today's presentation are the company's CEO , Dr. Kang Sun, and CFO , Sandra Wallach. At this time, all participants are in listen only mode. Following management's remarks, we will open the call for questions.
Speaker Change: Please note that this presentation contains forward looking statements, including but not limited to statements regarding our financial and business performance, our business strategy, future product development or commercialization, new customer adoption and new applications.
Speaker Change: our growth and the growth of the markets in which we operate, and the timing and ability of Amprius to expand its manufacturing capacity, build its large scale manufacturing facility.
Speaker Change: In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the investor relations website. I will now turn the call over to Amprius Technology CEO , Dr. Kang Sun, for his comments. Sir, please proceed.
Welcome everyone, and thank you for joining us this afternoon.
Speaker Change: On today's call, I would give you an overview of our record of performance in the summer of our 2024 accomplishments.
Speaker Change: We are also highlighting the upcoming milestones we look forward to achieving soon.
Speaker Change: After that, I will see a full of Sandra Wallach and we will discuss our financial results for the period.
Speaker Change: There I will share some closing remarks before opening the call for questions.
Thank you for watching!
Thank you for watching!
Before I give a recap of the quarter.
Speaker Change: I would like to briefly introduce Amprius to those who may be new to our company.
Speaker Change: Amprius is a pioneer and a leader in Silicon Anode battery space.
Speaker Change: At Amprius, we develop manufacture and market high energy density and high power density, city can handle the battery with applications across all segments of electrical mobility.
Thank you for watching!
Speaker Change: Today, Amprius commends performance leadership with this combination of battery energy density, power density.
Charging Time [inaudible]
Hope you can damage your range and the safety.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Across our battery portfolio, we offer unmatched performance among the commercially available batteries.
[inaudible]
Speaker Change: Amprius has been delivering commercial batteries to the market with up to 450-hour per 30-year-old, and the 1150-hour per liter.
Conceive Power Capability
Speaker Change: The ability to operate in a white temperature range of about 30 degrees Celsius up to 55 degrees Celsius.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: and the safety design features that enable us to pass the United States military's benchmark
Thank you.
Speaker Change: Each of these performance parameters is critically important to the real or the electrical mobility applications.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Not only do our bad dreams enable certain out crafts and the vehicles for maximum performance.
Speaker Change: but of the enable our customers to achieve their economic targets as well.
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In addition to our commercially available batteries today,
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Speaker Change: If I would believe that there are no other commercial batteries on the market that can perform at this level today.
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Thank you. Thank you. Thank you.
2024 was an important and productive year for Amprius.
commercialized a group of new batteries with a breakthrough performance.
Shooter over 1.8 kg per hour, Contract Manufacturing Capacity
Achave the record sales revenue. Engage it with 235 customers.
and a developer of the strong girl's path.
Thank you for watching!
[inaudible]
Speaker Change: Innovative Tagalogist and the breakthrough product performance are the foundation of Amprius Business.
Speaker Change: Large-scale manufacturability and commercialization of these technologies and the products have a labor amperes to achieve incredible milestones and business results this year.
[inaudible]
in January 2025.
Speaker Change: Amprius introduced the first battery cell in the industry with combined high energy and high power.
[inaudible]
370-hour per kilowatt energy density
and the offering up to 3,500 watt per kilowatt power.
Shabbat shalom.
Speaker Change: The cell supports high discharge rates of up to 10C without cooling and up to 15C with active cooling.
Ensuring quick power, delivery, delivery without compromising one time.
Speaker Change: This help provides an ideal situation for evasion in electrical vehicle and any in electrical mobility applications that will require both endurance and the rapid energy delivery.
[inaudible]
Speaker Change: In Q4, three production, ten ampere hour samples were delivered to six of our customers.
Denibiting real-world testing in chiming environments.
Thank you for watching!
We are seeing strong customer interest for this battery.
Speaker Change: Q, then I'm personally not only bad to the U S. A b cease development of targets, but as you can see then that delivery a sale with especially the <unk>.
Speaker Change: Of the 361 euro per kiddle at the beginning of life and the power density of 1200 watt per kilo.
Speaker Change: The east Central U V cells can also charge it to 90% of their REIT energy in just 15 minutes, you're feeding the U S. C. B C target of 80% with the same timeframe.
Speaker Change: The 20th Honey for N P. S ortho received.
Speaker Change: The X time Prime old war from the U S Army to develop a larger format 500 wire up the kid'll bed for yourself.
Speaker Change: We believe that.
Speaker Change: These product.
Speaker Change: We cheesy, if you've ever been to with our partner Aerovironment will allow.
Speaker Change: How soupy battery performance.
Speaker Change: He's not available anywhere else.
Speaker Change: This project they expect to be completed this year.
Speaker Change: Today I'm here that has a high performance commercial Betsy portfolio.
Speaker Change: The program provides a critical solutions to the customer with the various applications across the electrical mobility market.
Speaker Change: The 14th defend as key us provide a range of performance options.
Speaker Change: Different applications that are old old commercially available today.
Speaker Change: Yeah.
Speaker Change: Second Eagle achievements and peers. However.
Speaker Change: However, you can label to our commercial success.
Speaker Change: In fact.
Speaker Change: In the fourth quarter alone, we saved up to 98 total customers with 53 of those being new to the M. P is plentiful.
Speaker Change: Yeah.
Speaker Change: Our renting customer go.
Speaker Change: Complement that won't even shipments to stretch into a customers.
Speaker Change: Results in the fourth quarter revenue.
Speaker Change: Pinpoint six muni.
Speaker Change: 35% increase from the third of quarter over 2020 four.
Speaker Change: And 100.
Speaker Change: 70%.
Speaker Change: Increase from fourth quarter of 'twenty call. It three.
Speaker Change: But he said no to 77% of the revenue from Q4 came from outside of the United States compare to just the 22% in the same period last year.
Speaker Change: ZIP two basis.
Speaker Change: In attendance sheets, the expansion of our customer base worldwide.
Speaker Change: Yeah.
Speaker Change: Over the course of 'twenty 'twenty four we shipped to a total of 235 customers.
Speaker Change: This includes new customers as well I have to repeat the volume orders from our long term partners like volatile Airbus.
Speaker Change: I really environment.
Speaker Change: For the year.
Speaker Change: I'm Dani and the P C.
Speaker Change: The royalty the customer expansion, we are creating is a testament to our product competitiveness.
Speaker Change: Manufacturing capability and the scale of scratch.
Speaker Change: We generally as a 24.2 muni revenue for the full year.
Speaker Change: Oh, how are you doing 67% increase from 'twenty to 'twenty three.
Speaker Change: Yeah.
Speaker Change: In 2024.
Speaker Change: The developer to some sizable business opportunities to support our growth for years to come.
Speaker Change: In Q3 and Q4.
Speaker Change: We shared that we signed two separate agreements with the fortune 500 companies.
Speaker Change: First the agreement announced in September 2024.
Speaker Change: Well, it's a nonbinding letter of intent with a fortune global 500 technology OEM to develop a high energy cycles significantly fell for the light electrical vehicle market.
Speaker Change: The battery solution that appears to be a pull white would.
Speaker Change: Will it be a tagalong did you break through in cell chemistry cell design and the cell manufacturing.
Speaker Change: We believe it would be a very attractive product for the lighter electrical vehicle market.
Speaker Change: Switching Q4 contribute about 25% of our Q4 revenue.
Speaker Change: The lighting electrical vehicle market is expected to grow significantly.
Speaker Change: They saw a January 20th twenty-five reported from the business the research company.
Speaker Change: The lighting electrical vehicle market size, if you expect to achieve to reach approximately 336 billion by 'twenty 'twenty nine.
Speaker Change: In addition, the light electrical vehicle.
Speaker Change: <unk> has a shorter designing cycle because it is already over.
Speaker Change: He had a scale.
Speaker Change: The other agreement allows the October 'twenty to 'twenty four.
Speaker Change: Well, it's a development contract for small format custom high energy density.
Speaker Change: IMAX box yourself.
Speaker Change: I'm curious the high energy batteries provides a critical solution to the customer's application.
Speaker Change: We expect to produce a battery with approximately 50% less wheat undersized compared to their current battery without compromising performance.
Speaker Change: But at the end of Q3, we also announced the two contracts totaling over 20 Muni to supply 40 on power high performance yourselves for light Hey, electrical vehicle applications.
Speaker Change: As I update these cells are already shipping.
Speaker Change: And the we expect to recognize the husband and Brazil revenue in 'twenty to 'twenty five.
Speaker Change: In total.
Speaker Change: We had over 16 muni in new customer purchase orders to our backlog.
Speaker Change: The fourth quarter.
Speaker Change: Giving us additional visibility into our growth for 2025.
Speaker Change: He addition to the performance of M. P S batteries.
Speaker Change: Our manufacturing capability and the capacity how to attract the customer attention as well.
Speaker Change: But it appears as the over 1.8 gigawatt hours of cell manufacturing.
Speaker Change: Pasty.
Speaker Change: Yeah, and he's well equipped to deliver all types of battery cells customers.
Speaker Change: Park itself.
Speaker Change: Didn't think ourselves.
Speaker Change: And the prismatic yourself.
Speaker Change: The company's orso activity working on developing a global contract manufacturing network.
Speaker Change: And then in 'twenty to 'twenty five we are increasingly optimistic.
Speaker Change: But to our future and have begun the year with a running start.
Speaker Change: Last month, we announced that we secured a 15 muni purchase order from a leading a mint.
Speaker Change: Aircrafts system.
Speaker Change: Our U S manufacturer, who hour cycle itself.
Speaker Change: This volume purchase order follows the success for field trials and a quantification over the course of nine months.
Speaker Change: Leading to M. P S battery being designed in to the manufacturers of fixed wing.
Speaker Change: U S platform.
Speaker Change: These orders he cute critical supply for the customers production ramp.
Speaker Change: And we expect to shape it.
Speaker Change: Sales in the second half of 2025.
Speaker Change: Our small commercial and the defense aviation customers completed their battery qualification process, we are seeing a strong pipeline of follow on commitments.
Speaker Change: We believe that the older slag a base indicates that the drone market continuing to grow.
Speaker Change: I'm curious is going to play a larger part in powering future applications.
Speaker Change: Put simply isn't anything besides projects.
Speaker Change: The global auto market, where surgery from the 18th building in 2023 to 213 beauty.
Speaker Change: T 32.
But we believe we are just the end of the beginning of a significant expansion.
Speaker Change: Oh, Wow, our addressable market.
Speaker Change: This quarter, we have also designed and the shaped new high performance at 6.3 unpack or.
Speaker Change: Cylindrical cells for use in the light electrical vehicle sector.
Speaker Change: They fell developed delivers over 25% more capacity.
Speaker Change: Then corinne to 21 700 itself.
Speaker Change: Setting a new standard for energy density in the industry for this why did he use the cell format.
Speaker Change: Because of its a seamless integration between visiting battery systems.
Speaker Change: The manufacturers can you can put them into high capacity longer lasting power without costly redesigns.
Speaker Change: As a final note.
Speaker Change: We have obviously monitoring the policy changes and potential industry headwinds.
Speaker Change: All of them from the recent changes in federal.
Speaker Change: Christian.
Speaker Change: With much of the global battery supply in Asia.
Speaker Change: Nothing new to economic policy impacts in the region.
Speaker Change: But we are taking swift action to mitigate any risks.
Speaker Change: So the extent that we are able.
Speaker Change: Including diversifying our manufacturing partnerships.
Speaker Change: And the supply chain to avoid Q politics, geopolitical concerns and the tariff issues.
Speaker Change: We plan to share additional updates with U S.
Speaker Change: As they become available we will.
Speaker Change: We remain confident in all the expectation for growth throughout 2025.
Speaker Change: With that.
Thunder: I will now turn the call over to Thunder.
Thunder: To review our financial results.
Thunder: Thank you Kim I would now like to spend a few minutes covering some of our key financial update as a reminder, our detailed financials can be found in our shareholder letter.
Thunder: We ended the fourth quarter with $10 6 million in total revenue.
Thunder: As we have previously discussed our total revenue is a combination of our main revenue streams product revenue and development services and grant revenue.
Thunder: This quarter 10.3 million came from our product revenue, representing a $4.3 million or 71% increase sequentially prana.
Thunder: Product revenue in Q4, 'twenty twenty-three, let's just 0.9 million, marking a nearly 1000% increase year over year.
Thunder: Our development services and grant revenue Tuttle 0.3 million this quarter, which was down from $1 8 million in Q3, and 3 million year over year.
Thunder: As we've discussed in the past development services in grant revenue from large development programs are nonrecurring in nature, leading to greater fluctuations depending on the comparison period.
Kim: The overall increase in revenue this quarter was primarily driven by the addition of new customers as Kim mentioned, we shipped a 98 customers in the fourth quarter.
Kim: As these customers only three accounted for greater than 10% of revenue a decrease from four in the third quarter and an increase from two customers accounted in the fourth quarter of 2023.
Kim: Going forward, we plan to continue adding to our customer mix to diversify our revenue streams and provide more reliable product shipments as we get to a position of scale.
Kim: Pivoting to our full year results, we closed 2024 with $24 2 million in revenue.
Kim: This represents a 167% increase from the $9 1 million in revenue we generated in 2023.
Kim: This achievement was fueled by the increase in product sales as a percentage of total sales supported by the impressive growth of our customer base. As a reminder, we shipped to 235 individual accounts in 2024.
Kim: Moving to our profitability metrics gross margin was negative 21% for the quarter compared to negative 65% in Q3 of 'twenty 'twenty, four and negative 98% for the prior year period.
Kim: For the full year gross margin was negative 76% compared to a negative 162% in the prior year period.
Kim: The improvement is directly related to the launch of our sidecar product line, which has a positive gross margin contribution.
Kim: As a reminder, we see significant gross margin variation as our product and services revenue next fluctuate.
Kim: Margins in 2020 are were also impacted by Preconstruction planning cost.
Kim: To the Colorado facility, which were completed in October of 2024.
Kim: Now moving on to our operating expense management, our operating expenses for the fourth quarter were $9 5 million, an increase of $3 4 million or 55% compared with Q3, 'twenty 'twenty four and.
Kim: And an increase of $3 6 million or 62% from the prior year period.
Kim: Opex increased from Q3 to Q4 as a result of higher R&D costs associated with operating expenses compared to cost of sales.
Kim: This change change coincides with the run off of large development contracts as we pivoted to a mix of revenue that is more heavily weighted to product sales.
Kim: The sequential increase in Opex also included nonrecurring G&A stock based compensation.
Kim: Airplanes 7 million in Q4, which was associated with a fully vested grant that was made by our former holding company Empress Inc. For key employees and service providers prior to the assumption of stock options by AME Empress technologies.
Kim: And a nonrecurring loss on a write down of property plant and equipment as.
Kim: That's $1 9 million in Q4.
Kim: Year over year, the increase in Opex was driven by increased investment in sales the aforementioned reallocation of R&D from cost of goods sold as development services agreements Runoffs and the same nonrecurring stock based compensation charge and loss on a write down of property plant and equipment.
Kim: For the full year, our operating expenses were $27 9 million compared to $24 million in 2023.
Kim: Our GAAP net loss for the fourth quarter was $11 4 million or a net loss of 10 cents per share with $109 8 million weighted average number of shares outstanding.
Kim: In Q3, 'twenty 'twenty four our net loss was $10 9 million or negative <unk> 10 cents per share with 110.4 million weighted average number of shares outstanding.
Kim: Q4, 2023, net loss was $9 7 million or negative <unk> 11 per share was $88 5 million weighted average number of shares outstanding.
Kim: Our GAAP net loss included two nonrecurring charges that totaled two cents per share. The first one time event was the loss on a write down of property plant and equipment of 1.9 million as shown in our financial statements. The second is the stock based compensation charge from Empress Inc of 0.7 million.
Kim: For the full year net loss was $44 7 million or negative <unk> 45 basic and diluted EPS.
Kim: With $101 9 million weighted average number of shares outstanding compared to a net loss of $36 8 million or negative <unk> 43 cents per share with $86 2 million weighted average number of shares outstanding in 2023.
Kim: As of December 31st 2024, there were 99 full time employees up from 92 at the end of the third quarter, which I was employees, primarily based in our Fremont, California location.
Our share based compensation for the fourth quarter was $2 4 million compared to $1 7 million in Q3.
Kim: And $1 1 million in the prior year period.
The sequential increase is primarily based on the nonrecurring grant are fully vested shares by Empress Inc. For key employees and service providers.
Kim: For the full year share based compensation was 7.3 million compared to $3 9 million in 2023.
Kim: This change is primarily due to changes in the board of directors and the previously mentioned non recurring grant are fully vested shares by Empress Inc.
Kim: As of December 31st 2024, we had $116 9 million shares outstanding which was up 5.6 million from the prior quarter.
Kim: The change includes $5 5 million shares forfeited and canceled as part of the option assumption agreement with <unk>, Inc. Prior to its dissolution.
Kim: This decrease was more than offset by 0.3 million shares related to option exercises and our S. E vesting and 10.8 million shares issued from our ATM reserve.
Kim: Now turning to the balance sheet, we exited the year with $55 2 million in net cash and no debt.
Kim: The $20 1 million net increase in cash is related primarily to the $22 6 million, we generated through the issuance of common stock under our at market sales agreement.
Kim: As of December 31st 2024, we had over $66 million left on that facility.
Kim: Okay.
Kim: Other key drivers for the for cash for the quarter included.
Kim: $6 1 million used in operating cash flow, we continue to remain lean with a two and a half to 3 million monthly run rate excluding transaction related cost.
Kim: Our fourth quarter operating cash results included minimal nonrecurring expenses for the design and pre construction work on the Colorado facility, which was completed in October of 'twenty 'twenty four.
Kim: At this time, we do not expect future expenses related to the facility build out.
Kim: We also had $4 2 million of cash inflow associated with the return of our deposits for long lead time items related to the Colorado facility.
Kim: It was partially offset by zero point $6 million in property plant and equipment purchases. So it's a three months facility.
Kim: Considering our business achievements and ongoing projects. We believe we are efficiently using capital to drive and press forward.
Kim: Before I turn the call back over to Kim I would like to take a moment to discuss our capex outlook for 2020 five.
Kim: Yeah.
Kim: We expect to spend another $1 million on supporting equipment to complete the two megawatt line in Fremont in addition to normal operating capital requirements.
Kim: Now that the designs are effectively complete for Colorado, We will continue to monitor the larger industry dynamics driving our ability to proceed further.
The scope and schedule of the construction will be determined based on among other factors timing and availability of funding along with monitoring the overall sector for changes in demand supply.
Kim: Cost structure government incentives trade tariffs and other considerations may also influence our decision, including whether to proceed with the construction at all.
Kim: As Kim mentioned, we have secured adequate capacity for the foreseeable future through our contract manufacturing network and plan to expand that in 2025 without deploying our capital.
Kim: That concludes my financial discussion.
Kim: And I will now pass the call back to Kim.
Thanks, Andrew.
Kim: As we look out ahead.
Kim: Our strategy.
Kim: Remains unchanged.
Kim: Our top priorities are leading technology innovation and port out of performance.
Kim: Ensuring water class manufacturing.
Kim: But if he had the sufficient production capacity.
Kim: Growing our customer pipeline is it.
Kim: Driving.
Kim: Revenue growth and having a healthy balance sheet.
Kim: We are excited about the year ahead.
Kim: Looking forward to growing our business on the momentum we beauty 'twenty 'twenty four.
Kim: In 2025.
Kim: Appears expects to deliver new high performance batteries.
Kim: Participating in new market segments.
Kim: Engage with more customers.
Kim: The additional manufacturing partnerships and to bring our business to another level.
Kim: We believe that the opportunity ahead of peers. These are tremendous.
Kim: Our teammates are confident.
Kim: Delivering what we have planned and the promise.
Kim: We have begun the year school.
Kim: And they were looking to beauty increasing momentum throughout 2025.
Kim: Over the next few months.
We'll be attending several industrial and financial conferences, and we hope see you there.
Kim: Thank you for your continued support of Amperes technologies.
Kim: With that I will.
Kim: Turning it back to the operator for Q&A.
Kim: Thank you.
Speaker Change: Be conducting a question and answer.
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Speaker Change: One moment, please while we poll.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Next question comes the line.
Speaker Change: Colin Rusch.
Speaker Change: With Oppenheimer.
Speaker Change: Thanks, so much guys.
Speaker Change: You got such a big list of customers at this point, you've been able to close.
Speaker Change: A handful of them into larger contracts can you talk a little bit about the diversity of applications that youre, saying I'm getting tested for how much customization is required for those customers and how many are in late stages of evaluation, where you might see something called the next quarter or so where they would pull the trigger on a bigger purchase or.
Colin: Okay. Thanks, Colin a hour.
Speaker Change: We have a 230 customers.
Colin: In 2024.
Colin: This is at the top of our pipeline and funnel.
Colin: There are three types of customers. So they are a customer already.
Colin: Have the devices.
Colin: And are you seeing other batteries.
Colin: The U S. Our bedroom to replace that those can be very quick replacement.
Colin: That it demonstrated in 2024 for light electrical vehicle business and a small fraction of the aviation business that takes a couple of months. This thought of using Albert battery will anticipate some businesses like it is in 'twenty can you file the second type of a customer is that they have.
Colin: Devices, but they needed to quantify that they need a redesign.
Colin: Now that the devices, okay. The battery pack.
Colin: And the vet is hour battery to feed into their application.
Colin: Now this could it be nine months to a year.
Colin: Type a qualification process the third type of customer.
Colin: For example, either Ito.
Colin: Not only they need to qualify our.
Colin: Products, they need a thirty-five their own product, so those who would take longer.
Colin: But if we look at the 20 <unk> based on our 2024th experience.
Colin: We are quite confident.
Colin: We can convert.
Colin: Large portion of those customers to.
Colin: Two the purchase order in 2025.
Colin: Yeah.
Colin: Thanks, So much and then in terms of your manufacturing base and a geographic exposure can you talk about your strategy for incremental.
Colin: Contract manufacturing and potentially or other strategies around.
Colin: Some of the dynamics around you know the.
Colin: And geopolitical environment.
Colin: Well the comes where the manufacturing strategy has been very successful for us.
Colin: Hum.
Colin: No we have.
Colin: Mark.
Yes.
Colin: We have not spend a dollar on the ground for the manufacturing capacity.
Colin: And we also have a lot of flexibility in terms of the cell design.
Colin: And then there are.
Colin: It's quite a successful strategy so far of course the medicine.
Colin: They require.
Colin: It requires a certain scale.
Colin: Currently all of our manufacturing facilities located in China, We have three partners. So we can offer.
Colin: Or petry, our formats, we have a cylindrical prismatic.
Colin: And pouch.
Colin: At the same time this year.
Colin: It's just already this year, we also develop other manufacturing.
Colin: Shaping Korea, Okay. We are evaluating the sample produce found airport after nine.
Colin: Next week, our next month I will go to Europe.
Colin: To have a conversation with another European ports.
Colin: Potential European country and manufacturers.
Colin: Those were doing those for a.
Colin: Many for geopolitics the region.
Colin: Now in terms of cost are we have very competitive here.
Colin: Fetching caught the structured today, how would you say you know we are not only come can compete the E U.
Colin: We can compete globally in terms of.
Colin: The manufacturing contract manufacturing structure, a cost structure, we have here.
Colin: So I'm moving forward with Devon, and they need to have a global supply chain to support of our contract manufacturing.
Colin: Practice, we need to have a global contract manufacturing partnership.
Colin: So I think that that would happen in first half over the 2025.
Colin: Excellent. Thank you so much.
Colin: First per Sondra honestly, you yourself come onto the balance sheet here in the fourth quarter can you give us an update on the year to date activity.
Colin: You know you've had a certain amount of volume and volatility in our stock, which is giving you some opportunities just wanted to cancel them.
Colin: Where are you now how about you the actor in the market with that roughly.
Colin: Roughly where you think the cash balance maybe extra quarter, they're not really.
Colin:
Colin: Yeah.
Colin: So as of December 31st went into a traditional blackout periods.
Colin: Answer myself.
Colin: So we've not been in the market.
Colin: Okay.
Colin: Okay perfect. Thank you so much.
Colin: Yeah.
Colin: Thank you.
Colin: Next question.
Colin: Okay.
Colin: Sure.
Colin: Okay.
Colin: Yeah.
Colin: I have mark shooter on for Jaguar Shanna.
Colin: Congrats on the year and a new 53 customers this quarter, yeah, that's great to hear.
Colin: I guess I'll.
Colin: Digging a little bit deeper on Collins point, which is I was a bit surprised to hear you are looking to continue to expand and diversify and add more customers. So list can.
Speaker Change: Can you walk us through the strategic decision to target many customers with smaller volumes versus fewer customers with larger volumes or does it just take this many engagements to land a large P O.
Colin: Yeah.
Colin: Yeah, we are.
Colin: Most of those customers, we are dealing with they have a high volume of potential otherwise we wouldn't do it if a customer tell us the maximum need Uh huh.
Colin: [laughter] 30000.
Colin: L. A year, we're not going to deal with that yeah. Because every customer we are dealing with the ore claim okay. There.
Colin: Large volume potential and of course, if we do our due diligence was he there and our goals paths. We will see you know that devices, how much battery they need to put device right.
Colin: This is a very competitive market, okay. The more customer we can engage.
Colin: More but you did Q4 success so.
Colin: That's why we have.
Colin: We have a large pile of customers at this time.
Colin: During next six months I think we will feel towards who okay. We have to focus on.
Colin: Another reason in this market we have a huge.
Colin: I think capacity support us.
Colin: Yeah. So.
Colin: The capacity is not an issue for us that's why a label off.
Colin: To engage with a very high volume of customers.
Colin:
Colin: So it goes all high volume customer.
Colin: Our priority that's no doubt about it doesn't mean that it wouldnt make a manufacturing is.
Colin: Much easier.
Colin: Even we engage with so many customers. So we don't compromise our battery for each customer. So we have a 14th F T use.
Colin: Our catalog.
Colin: We probably even want to shrink.
Colin: The two about a penny less skus in the future.
Colin: So a bit.
Colin: Because of the performance of our products are most over the customer would like to accommodate our cell format. Our standard I would've called M. P is offended Betsy cell format.
Colin: Oh, Thank you that's very helpful.
Speaker Change: Talking about the aerospace and defense customers I know you have a strategy to include a more geographically diverse production contract manufacturing career, you mentioned in Europe.
Colin: I'm interested.
Colin: Have any of those customers reluctantly walked away or have not purchased yet because of the China supply.
Colin: Surprisingly, none offer the customer walking away because of the source of the supply, although we do have a customer ask us.
Colin: Turning to the manufacturing base okay.
Colin: Nine months or Oh, six months to nine months or thing plenty funny things you have to manufacture it in so called lethal friendly.
Colin: Countries.
Colin: Very interesting okay. Thank you very much.
Colin: Hum.
Colin: Thank you. Our next question comes from the line.
Colin: Please proceed.
Colin: Yeah.
Colin: Hey, everybody. Thanks for taking the question.
Colin: Hmm.
Colin: I wanted to ask on maybe just an update on commercial side, obviously, you're having good engagement with new customers, maybe talk about investments you're making there on the SG&A was up is that are you know some of your best and in and I guess, what can you do there to really help accelerate some of those commercial adoption.
Colin: Yeah, Tim This is Sandra so we definitely have increased our investment in sales.
Colin: We've ah effectively over 'twenty 'twenty four tripled the size of our sales team is still a small but.
Colin: But mighty Mighty team based on the fact that as Ken mentioned this is really a design in win them process. So it just takes time to manage these accounts G&A.
Colin: Separately was up because of some of the nonrecurring items that you saw.
Colin: And you'll see in the financials.
Colin: Yeah, Yeah got it I appreciate it and maybe a follow up on the customer side I think it was 77% outside the U S. Any more color there on you know how spread out of it.
Colin: Concentration within that or how do you think about the ship to outside the U S.
Colin: Yeah. The we we we expect that our we have more customer off out of the U S right.
Colin: Because of the U S business. It doesn't grow tests that we have more international customers are we are.
Colin: Once we set up additional manufacturing partner sheets, we expect we will have Uh huh.
Colin: Our strong customer inquiries are all set of the United States.
Colin: Yeah.
Colin: Yeah, just to clarify the 20 in the U S grew no question. It just grow at a smaller rate and and that's what it just because of that our global interest in the batteries.
Colin: Perfect Okay.
Colin: And maybe just a last one you know I think you said, what you added over $60 million to backlog Q4, or you want some more orders. This year, maybe just any way to help us frame I guess where backlog stands.
Colin: You know at yearend and how to think about the visibility in 2025. Thanks.
Colin: Yeah, I'll, we'll see about one let's say.
Colin: We just filed.
Colin: Okay.
Colin: 10-K, and we report out on our RPI.
Colin: And our appeal hyper leads long.
Speaker Change: Just find it my apologies.
Colin: Okay.
Colin:
Colin: Yeah.
Colin: 16 million 17 million in that range since backlog carpio.
Colin: <unk>.
Colin: 15 million nine at the end of December.
Colin: Yeah.
Colin: For under excluding government Grant revenue, and then 17.2, including government Grant revenue and it's all expected to convert within the next 12 months, but as you know customers are placing in P. O S quarter by quarter. So that's more indicative of what we have fueling the first half.
Colin: For the year.
Got you that's what I was getting at okay.
Colin: Great I'll stop there thanks.
Colin: Thank you.
Colin: Baird.
Colin: With Cantor Fitzgerald. Please proceed.
Speaker Change: Yeah, Hi, King and Sandra Congrats on the results here I wanted to start with.
Speaker Change: Some of your Fortune 500 customers it sounds like there's significant upside with them on what's it going to take to get maybe a sizeable project expansion.
Speaker Change: Those customers, what's kind of a criteria that they're looking for initially is it how is the batteries performing the markets can you just talk about.
Speaker Change: The potential of getting to the next level with those customers and then I've got a follow up.
Eric: Okay Eric.
Speaker Change: To engagements are we along.
Speaker Change: One it has about two gigawatt hour.
Speaker Change: Which is a possibility okay. They see the related to 6.3 and power. So we tested.
Speaker Change: Delivered yeah.
Speaker Change: Another one that has about a 1 million cells per year potential is actually the high end consumer electronics product.
Speaker Change: It's not our major focus by these customers for that to.
Speaker Change: At this moment the only our technologically can support.
Speaker Change: So those are two.
Speaker Change: We call Fortune 500 technology company.
Speaker Change: Engage them in the way along.
Speaker Change: And to that Oh, we have been engaging with some a larger corporation for different projects.
Speaker Change: Kicked carrying earlier in the call you laid out three types of customers you know for those fortune 500 companies and opportunities where would you kind of which bucket would you put those in.
Speaker Change: Okay. The first one calanthe electrical vehicle has a two gigawatt hour opportunity.
Speaker Change: We have the vehicle.
Speaker Change: Vehicle already set up that's not a problem.
Speaker Change: But this is a.
Speaker Change: This is the best we had much higher and each month.
Speaker Change: Much higher energy and a much higher power. So I think that the bed to evaluation is a major part of this debenture okay.
Speaker Change: I'll need to 30.
Speaker Change: Certify their vehicle they need to get out of a battery quantified These school, where people will come to our Colorado manufacturing partnership factory in April.
Speaker Change: So for the second contract and.
The other one are even easier okay. That's just a simple.
Speaker Change: Simple replacement.
Speaker Change: Our bedroom.
Speaker Change: We quantified.
Speaker Change: Is he is.
Speaker Change: As you can see that there are.
Speaker Change: I couldn't.
Speaker Change: The performance level by a very large margin.
Speaker Change: Yeah.
Speaker Change: Okay got it that's helpful. And then just on that point the second customer are they looking to use our battery platform that you're already commercializing today or.
Speaker Change: Is this kind of a next generation battery platform that they're hoping to to use can can you discuss that at all.
Speaker Change: Yeah. The cell chemistry are the same although we already have these betsy.
Speaker Change: Manufactured since 2018, because it'll be the same chemistry.
Speaker Change: The cell format is different this is the problem is the smallest of the bed to the M. P.
Speaker Change: Ever need it.
Speaker Change: Yeah.
Speaker Change: Got it that's Super helpful. And then Sandra just based on some of the visibility that you guys have into demand this year some large programs.
Speaker Change: To head how should we think about gross margin you know sort of going from negative to positive can you talk about the gross margin progression for the year is as we sort of reached scale here.
Speaker Change: Yeah. So you know we've talked about the fact that <unk> core.
Speaker Change: Sales are gross margin positive day, one. So that's you know what has helped to drive the gross margin to negative 21% in Q4, which is you know again balancing them then the historical 90. It is margin that we've had here in Fremont because we've been so capacity constrained and we have.
Speaker Change: Got such a tiny manual shop here.
Speaker Change: So I think we'll continue to see since most of the growth is going to come from site core positive movement in the gross margin.
Speaker Change: And.
Speaker Change: Again, some of course growing and we also had a cost of goods sold in 2024 for the pre construction and design work for Colorado, that's not recurring that wrapped up in October so we should see positive progression on gross margin.
Speaker Change: Got it Super helpful really appreciate it.
Michael: Thank you. Our next question comes from Michael.
Speaker Change: Graham.
Speaker Change: Please proceed.
Speaker Change: Afternoon.
Speaker Change: Was curious to go back on the topic of our pipeline and future business opportunities I'm curious Kim like on the spectrum of sizes of these various customers you're talking to.
Speaker Change: How would you contextualize these ones that you've one of size these kind of $15 million to $20 million orders that you guys have been successful with where would you say those those rank is there a way to kind of book and or think about what an average could be in any sense I know, it's probably a wide ranging but just trying to get a sense of.
Speaker Change: How material those wins are in the context of future opportunities you're looking at thanks.
Speaker Change: Yeah, no all of those customer had a have the potential to reach the level I mean, the $10 million 15 yearly even $50 million sales, but in 2025, Okay. We don't think okay, the or risks are there.
Speaker Change: Optimizing optimize the purchase volume I think we will see okay.
Speaker Change: The orders.
Speaker Change: At the current level that means the Permian into <unk>, maybe even $30 million order is a quite a possible.
Speaker Change: Our sales team now the.
Speaker Change: The major function of all the sales team today easily a federally the sales are the customer battery qualification process to close the deals we do.
Speaker Change: Everything beyond the sales function to help all of our customer together there to get our bedroom qualified to have their product.
Speaker Change: Pat.
Logic fractional pharma customer.
Speaker Change: Have a very decent volume potential.
Speaker Change: We need to get this deal closed.
Speaker Change: <unk> got a deal close you still have for them to call. It 45 hour battery as quickly as we can.
Speaker Change: Got it okay, that's really helpful. Thanks and.
Speaker Change: And for my follow up.
Speaker Change: With respect to looking at diversifying the contract manufacturing base that you have would you say that's explicitly for I guess, it's always say trade related contingencies or are there other benefits to being in other jurisdictions or continents from ey.
Speaker Change: You know customer preference perspective, or otherwise are there other factors at play there.
Speaker Change: Yeah.
Speaker Change: Always good to have that.
Speaker Change: The diversified manufacturing base here, Oh, we have with different type of customers.
Speaker Change: Locating different region.
Speaker Change: So even we thought geopolitics is good at to have a different a manufacturing base.
Speaker Change: So currently because of supply chain is almost 100 and pressing Asia.
Speaker Change: So that's why the Asia is going to be our.
Speaker Change: Major focus in terms of the manufacturing facility development. So we are not currently would have China you have the best quality [laughter] faster turnaround time, and the lowest cost. Okay. We certainly have a customer very appreciate it.
Speaker Change: We have the facility there and at the same time, we had.
Speaker Change: That is a sort of what the customer havoc U K politics concert I'm sorry.
Speaker Change: That's why we are working with several Korean battery manufacturers. So of course, if he believes the all over them and if they are we see the very positive results.
Speaker Change: A European customer we have European talk to my actually we are dealing with one of the major European from companies. These days.
Speaker Change: So daily would like us to have some participants in Europe in terms of manufacturing.
Speaker Change: Great that's really helpful detail thanks for the time.
Speaker Change: <unk>.
Speaker Change: Thank you. Our next question comes from the line.
Jackson: Jackson Northland Securities. Please proceed.
Thank you very much.
Jackson: Congratulations on the quarter.
Speaker Change: My My first question for you is looking at your customers. So you get about 235 customers 182, new customers just in the year. So you know I mean.
Speaker Change: Three quarters of your customer base is new to you relative to the year. You commented that you had 25% of your revenue in the fourth quarter, you know come from that segment and so I'm going with this I'm curious when you look at the in markets that you've been selling into.
Speaker Change: What was the mix of.
Speaker Change: Those end markets.
Speaker Change: With the 48 or whatever it is of the car.
Speaker Change: The total amount of customers that you had in.
Speaker Change: 23, what was the mix with it in 'twenty 400, it shipped and then when you look at the opportunities in front of you for 25, how would you see that mix change further in 'twenty five.
Speaker Change: That question makes sense. That's my first question makes sense, yeah. So 'twenty three 'twenty four we certainly at letting people vehicles business.
Speaker Change: 20th honestly, we didn't have any participation so the customer come to us and say you know.
Speaker Change: They looked out with.
Speaker Change: The battery specs they think it's ideal for their application.
Speaker Change: We looked at the market size of the very large qualification time March quarter.
Speaker Change: The check size is bigger.
So we decided to get into the electrical vehicle and a plenty plenty for them.
Speaker Change: Confirmed.
Speaker Change: It was a successful.
Speaker Change: Engagement, so plenty plenty fob.
Speaker Change: Piece of data, we have more of that electrical vehicles business.
Speaker Change: Of course, the adhesives doing part of that then.
Speaker Change: And that electrical vehicle business will get bigger.
Speaker Change: What was so if I was to think of.
Speaker Change: 2024 in the first quarter was the LTV segment basically nonexistent in the fourth quarter. It was you know 25% of revenue.
Speaker Change: What I expect that as we go through.
Speaker Change: 25 that the led segment would potentially be more than 25% of revenue given what we saw in 'twenty four.
Speaker Change: That would've happened for two reasons. The reason number one we have something that a customer has a larger volume and is the early adopters of the D. C. You don't need to spend a month a year to qualify the leasing our bedroom.
Speaker Change: Perfect. If he can design into the pack and they can't use it. So there are a lot of those program already reached our advance to stage.
Speaker Change: For that reason I would think with the forecast we will have Uh huh.
Speaker Change: Probably of over 25%.
Speaker Change: How do you guys, who go vehicles remedies.
Speaker Change: Okay.
Speaker Change: My second question.
Speaker Change: When you know we're not it's not I know, it's not really a great metrics, but it's just kind of a thing to look at to kind of see.
Speaker Change: Where you have you're progressing in terms of kind of a larger.
Speaker Change: Orders and shipments you know how you're progressing in terms of your customers' products really going commercial and so I'd look at the revenue per customer.
Speaker Change: And I look at the last four quarters you know it was 28000 and then it was 60000 and then it was 64000 205000 and so you know what that tells me is that your you are seeing some of these new design wins, you know come to fruition become you know production level shipments.
Speaker Change: When I when I look at that and I think forward.
Speaker Change: And about 20, and and I think about the new customer wins, you had you know will I see.
Speaker Change: Your revenue become.
Speaker Change: More driven.
Speaker Change: By existing.
Speaker Change: Existing customers and perhaps not see you know so many new customers and twenty-five or where I see both you'd be how would I think about that mix I mean, because in your new customers. You had 48, new customers in 'twenty three at 182 in 'twenty four I mean is it like you know is it going to be another.
Speaker Change: 182, new customers or will we see that customer new customer growth kind of slow down.
Speaker Change: But.
Speaker Change: See greater revenue generation from existing customers that are.
Speaker Change: Becoming that whose products are becoming commercial.
That's all right My next question yes.
Speaker Change: Yes.
Speaker Change: Existing customer will contribute more revenue than the new classroom or for sure.
Speaker Change: Because normally if.
Speaker Change: If we engage with the customer unless the customer already low hour battery and they see the stagger already feeding into their pack or their application most customer comedy with a couple of hundred sellers couple of sell themselves and it becomes an etsy twenty-five with all of them 50000 cells and then they go.
Speaker Change: 400000 cells.
Speaker Change: This is the qualification process in this business. If we were looking to this existing customer certainly beginning to contribute a lot more revenue than.
Speaker Change: The new customer.
Speaker Change: It would put what now would we still see I mean, if we think about your new customer pipeline. I mean is it is it is so robust that we could still see you add 100 or 200, new customers on 25 or are you getting to the point now where it's less about that that you know like that's going to slow down and it is.
Speaker Change: We're really about harvesting.
Speaker Change: The customers that you've you know.
Speaker Change: Brought in.
Speaker Change: Yeah, we covered the verily.
Speaker Change: We have a very solid with Harvey.
Speaker Change: And.
Speaker Change: Market today that means in a fixed wing.
Speaker Change: Trickle aircrafts a bulls eye.
Speaker Change: Text E toll type and had hit a pseudo satellite you know we have a very solid recoveries you here, but you know there are many emerging companies come out.
Speaker Change: Yes.
Speaker Change: In comedy testing your clean now over 200 drone companies.
Speaker Change: The Taiwan almost have a.
Speaker Change: Every new drone companies every other week.
Speaker Change: Uh huh.
Speaker Change: But we don't we will be more selective.
Speaker Change: In 'twenty 'twenty five 'twenty 'twenty, four 'twenty 'twenty suite anybody come to us because we take it.
Speaker Change: Because these are early stage deal for market development.
Speaker Change: Our colleague he's quite a solid now we know who is going to win who is not going to win in the near term.
Speaker Change: So what was selectively acquire new customer yeah, but the most important task for MPS.
Speaker Change: Is the push and the kind of customer to commercialization stage.
Speaker Change: Yeah.
Speaker Change: Sort of following on to the this thing with new customers.
Speaker Change: Wondered 82 customers new customers that you had in 'twenty four maybe it was just such a substantial ramp the sidecar came out in that period of time can you give some sort of sense in terms of those new customers, which is the mix between <unk> and <unk>.
Speaker Change: Our primary D. C 90 person for that core yeah, because our stakeholders, whether they are available we have the capacity to support one customer come to us they're not only looking for the performance I think it would be the sizable customers do you want to see you have manufacturing capacity to support.
Speaker Change: Otherwise it wouldnt engage.
Speaker Change: So.
Speaker Change: For say core we develop a huge manufacturing capacity available is the 1.8 gigawatt hour of capacity. So the customer feels very comfortable to engage you with us.
Speaker Change: My last question I'm, sorry to ask so many and it's really just a nitpicky one.
Speaker Change: Just kind of looking at my model out a gap and I'm curious like at the Kinder you ended 2024 with 235 customers what was the customer count at the end of fiscal 'twenty three.
Okay.
You know what Ted let me, let me pull that from our filings in all I'll turn that over to you.
Ted: Okay. Okay. That's it for me and sorry to be such a pain and again congratulations on the quarter I look forward to 2020, but India. Thank you.
Yes.
Ted: Thank you.
Ted: I think it comes to the lineup.
Ted: With H C. Wainwright. Please proceed.
Speaker Change: Thank you good afternoon guys.
Ted:
Ted: With respect to the revenue cadence for 2025 can you provide.
Ted: Any color on whether we should expect sequential improvements grew 2025.
Ted: Hum.
Ted: Relative to what the fourth quarter results.
Ted: Thank you.
Ted: Yeah.
Ted: So I think we would expect to see sequential I'm, we're not at a seasonal business per se, but I think you know the first quarter has been has just had some headwinds. So I spent a lot of you know changes as far as the funding landscape. So we're confident.
Ted: And what the year growth has the potential to be but you know where we're expecting Q1 is gonna be a little tougher just because of that.
Ted: Change in the administration here.
Ted: Understood.
Ted: And that's one of them for that.
Ted: With you offline.
Ted:
Ted: Gross margins are Sandra.
Ted: Is there any is there a level you know.
Ted: Did you ever since you know revenue wise, where you think you can start turning gross money funds to visit like 15 to 20 million or you know are higher than that Borgwarner, where you can start seeing the gross margins go in Boston.
Ted: You know, we haven't given guidance on that yet I think we're still we're working on and I, you know target model and Ah, but we don't have anything concrete today.
Ted: Okay.
Ted: And maybe for Ken you know with respect to sort of larger applications like you'd be tools et cetera.
Ted: How different is the sort of the battery chemistry of technology relative to what you are already shipping to customers currently you know and how much improvement.
Ted: Do we need to sort of win some of those types of orders.
Ted: Step four.
Ted: Will you be tall, we're already qualified for one customer applications.
Ted: We our chemistry is a very is a very robust I would just say, we don't need to change a whole lot of chemistry.
Ted: As a supportive market and that's why we say aviation, we basically use the same cell chemistry with a light duty.
Ted: Estimates for for example, customer wanted to have more energy they want to have more power.
Ted: We can make a.
Ted: We can maybe get some Chinese precision so that there's no major invention involved.
Ted: Cause of the platform is quite robust.
Ted: If you look at the the bedroom ETD load of 370 <unk> per kilo with Tennessee, 15 seem a capability so with that as the.
Ted: The baseline.
Ted: We almost can't deliver the cells or applications in this market segment.
Speaker Change: Understood Okay.
That's all I had one of the questions have been asked I can follow up with you guys offline. Thank you.
Speaker Change: Thank you.
Speaker Change: A question and answer session. If you have any.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: I'd now like.
Speaker Change: The doctor sign for us.
Speaker Change: Closing remarks.
Speaker Change: Thanks, everyone for joining us today.
Speaker Change: As a reminder, you can find out more about our company receive additional updates and they learn about two upcoming events and presentations from the Investor Relations section of our annuity Lee, but we ramped our website I.
I hope you can check it out and.
Speaker Change: We look forward to updating you on the progress we are making in transforming the electrical mobility market.
Speaker Change: Finally, I'd like to thank our employees partners and shareholders for their continued support.
Speaker Change: Great.
Speaker Change: Thank you for joining us today for an technology's fourth quarter and full year 2020.
Speaker Change: You may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Uh huh.