Q1 2025 Enovix Corp Earnings Call

April 30, 2025

Operator: First Quarter 2025 Earnings Conference Call Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. As a reminder, today's program will be recorded.

Operator: Q1 2025 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, today's program will be recorded. Now I'd like to introduce your host for today's program, Robert Lahey, Head of Investor Relations. Please go ahead, sir.

Earnings Conference call.

Currently all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

As a reminder, today's program will be recorded.

Robert Lahey: And now, I'd like to introduce your host for today's program, Robert Lahey, Head of Investor Relations. Please go ahead, sir. Thank you. Hello, everyone.

Robot Leahy: And now I'd like to introduce your host for today's program Robot Leahy head of Investor Relations. Please go ahead, Sir Thank you Hello, everyone and welcome to <unk> Corporation's first quarter 2025 financial results conference call with US today are president and Chief Executive Officer, Dr. Raj Laurie Chief.

Robert Lahey: Thank you. Hello, everyone, and welcome to Enovix Corporation's Q1 2025 Financial Results Conference Call. With us today, our President and Chief Executive Officer, Dr. Raj Talluri, Chief Financial Officer, Ryan Benton, Chief Accounting Officer, Kristina Truong, and Chief Operating Officer, Ajay Marathe. Raj and Ryan will provide an overview, and then we'll take your questions. After the Q&A session, we'll conclude our call. Before we continue, let me kindly remind you that we released our Q1 2025 shareholder letter after the market closed today. It's available on our website at ir.enovix.com. A replay of this video will be available later today on the investor relations page of our website. Please note that the shareholder letter, press release, and this conference call all contain forward-looking statements that are subject to risks and uncertainties.

Robert Lahey: Welcome to Innovix Corporation's first quarter 2025 financial results conference call.

Robert Lahey: With us today, our President and Chief Executive Officer, Dr. Raj Talluri, Chief Financial Officer, Ryan Benton, Chief Accounting Officer, Christina Truong, and Chief Operating Officer, Ajay Marathe. Raj and Ryan will provide an overview, and then we'll take your questions.

Speaker Change: <unk> Officer, Ryan Benton, Chief Accounting Officer, Christina Carroll, and Chief operating Officer RJ morality.

Speaker Change: Ryan will provide an overview and then we'll take your questions. After the Q&A session. We will conclude our call before we continue let me kindly remind you that we released our first quarter 2025 shareholder letter after the market closed today. It is available on our website at IR Dot <unk> Dot com a replay of this video will be available later today.

Robert Lahey: After the Q&A session, we'll conclude our call.

Robert Lahey: Before we continue, let me kindly remind you that we released our first quarter 2025 shareholder letter after the market closed today. It's available on our website at ir.innovix.com.

Robert Lahey: A replay of this video will be available later today on the Investor Relations page of our website. Please note that the shareholder letter, press release, and this conference call all contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are based on current expectations and may differ materially from actual future events or results due to a variety of factors. For a discussion of those factors that could affect our future financial results in business, please refer to the disclosures in today's shareholder letter and our filings with the Securities and Exchange Commission. All of our statements are made as of today, April 30th, 2025, based on information currently available to us.

Speaker Change: On the Investor Relations page of our website.

Speaker Change: Please note that the shareholder letter press release, and this conference call. All contain forward looking statements that are subject to risks and uncertainties.

Robert Lahey: These forward-looking statements are based on current expectations and may differ materially from actual future events or results due to a variety of factors. For a discussion of those factors that could affect our future financial results and business, please refer to the disclosures in today's shareholder letter and our filings with the Securities and Exchange Commission. All of our statements are made as of today, 30 April 2025, based on information currently available to us. We can give no assurance that these statements will prove to be correct, and we do not intend and undertake no duty to update these statements except as required by law. During this call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.

Speaker Change: These forward looking statements are based on current expectations and may differ materially from actual future events or results due to a variety of factors.

Speaker Change: For a discussion of those factors that could affect our future financial results and business. Please refer to the disclosures in today's shareholder letter and our filings with the Securities and Exchange Commission.

Speaker Change: All of our statements are made as of today April 32025 based on information currently available to us.

Robert Lahey: We can give no assurance that these statements will prove to be correct, and we do not intend and undertake no duty to update these statements except as required by law.

Speaker Change: We can give no assurance that these statements will prove to be correct.

Speaker Change: And we do not intend and undertake no duty to update these statements except as required by law.

Robert Lahey: During this call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. You can find a reconciliation of the GAAP financial measures to non-GAAP financial measures in our shareholder letter, which is posted on the Investor Relations page of our website. Okay.

Speaker Change: During this call. We will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. You can find a reconciliation of the GAAP financial measures to non-GAAP financial measures in our shareholder letter, which is posted on the Investor Relations page of our website.

Robert Lahey: You can find a reconciliation of the GAAP financial measures to non-GAAP financial measures in our shareholder letter, which is posted on the investor relations page of our website.

Raj Talluri: Okay, thank you, Rob, and thanks to everyone for joining us. For our format today, I'll start with a recap of our recent results and the recent milestones, and then I'll turn it over to our new CFO, Ryan Benton, here with me for a review of our financials and outlook. I'll have a few closing comments and then we'll take your questions. We feel great about our start to 2025. First, we are pleased to have Ryan Benton as our new CFO. Ryan brings deep financial leadership and experience, and we're excited to have him on board. Second, we exceeded the midpoint of our Q1 revenue guidance, delivering $5.1 million in revenue and secured new defense bookings that support our growth into Q2.

Raj Talluri: Thank you, Rob. And thanks to everyone for joining us for our format today. I'll start with a recap of our recent results and the recent milestones, and then I'll turn it over to our new CFO, Ryan Benton, here with me, for a review of our financials and outlook.

Speaker Change: Okay. Thank you, Rob and thanks to everyone for joining us for our pharma today I'll start with the recap of quite a decent results and the recent milestones and then I will turn it off to our new CFO Ryan.

Speaker Change: Here with me, but a review of our financials and outlook.

Raj Talluri: I'll have a few closing comments, and then we'll take your questions. We feel great about our start to 2025.

Speaker Change: I'll have a few closing comments and then we'll take your questions.

Speaker Change: We feel great about how to start to 225. So we are pleased to have Ryan Benton as our new CFO, Ryan brings deep financial leadership and experience and we're excited to have him on board.

Raj Talluri: First, we are pleased to have Ryan Benton as our new CFO. Ryan brings deep financial leadership and experience, and we're excited to have him on board. Second, we exceeded the midpoint of our Q1 revenue guidance, delivering $5.1 million in revenue and secured new defense bookings that support our growth into the second quarter. Third, we commence the development of a custom smartphone cell with the exact dimensions required by our lead customer for their commercial product. Fourth, we made great strides in our operations. Fab 2 in Malaysia accelerated progress towards mass production readiness. We secured ISO 9001 certification, completed the first formal customer audit and made critical yield improvements.

Speaker Change: We exceeded the midpoint of our Q1 revenue guidance delivering pipeline $1 billion in revenue and secured new defense bookings that support.

Speaker Change: Growth into the second quarter.

Raj Talluri: Third, we commenced the development of a custom smartphone cell with the exact dimensions required by our lead customer for their commercial product. Fourth, we made great strides in our operations. Fab2 in Malaysia accelerated progress towards mass production readiness. We secured ISO 9001 certification, completed the first formal customer audit, and made critical yield improvements. Fifth, in Korea, we made a strategic acquisition that expanded our manufacturing footprint. This acquisition will provide critical additional coating capacity needed in support of our Fab2, as well as our defense local defense customers. I'd like to briefly address recent developments in global trade environment. Like many global companies, we're following these developments closely. Our assessment is that there's no material impact to our near-term outlook, as most of our planned near-term sales are concentrated within Asia.

Speaker Change: We commenced the development of a custom smartphone sell with the exact dimensions required by our lead customer for their commercial product.

Speaker Change: Fourth we made great strides in our operations subdue in Malaysia accelerated progress towards mass production readiness, we secured ISO 9001 certification completed the first pharma customer audit and made critical yield improvements.

Raj Talluri: Fifth, in Korea, we made a strategic acquisition that expanded our manufacturing footprint. This acquisition will provide critical additional coating capacity needed in support of our Fab 2, as well as our defense, local defense customers.

Speaker Change: Okay.

Speaker Change: In Korea, we made a strategic acquisition that expanded our manufacturing footprint. This acquisition will provide critical additional coating capacity needed in support of what fab too as well as our defense local defense customers.

Raj Talluri: I'd like to briefly address recent developments in global trade environment. Like many global companies, we're following these developments closely. Our assessment is that there's no material impact to our near-term outlook, as most of our planned near-term sales are concentrated within Asia. We also see strategic opportunities, though, as some of our target customers have initiated efforts to diversify supply chains towards Malaysia and South Korea, where our factories are.

Speaker Change: I'd like to briefly address recent developments in global trade environment like many global companies. They are following these developments closely.

Speaker Change: Our assessment is that there's no material impact to our near term outlook as most of our planned near term sales are concentrated within Asia.

Raj Talluri: We also see strategic opportunities, though, as some of our target customers have initiated efforts to diversify supply chains towards Malaysia and South Korea, where our factories are. Now, for a few more details on the acquisition. On 1 April, we completed the acquisition of additional manufacturing assets adjacent to our existing South Korea facilities. This includes equipment that will augment the coating needed for our Fab2 in Malaysia as we ramp, as well as additional production for our Korean military programs and other industrial applications, that we are targeting. The facility also offers significant room for expansion, enhancing our strategic positioning as the global supply chains continue to evolve rapidly. In smartphones, we reached a critical inflection point towards launching our first product in the market.

Speaker Change: We also see strategic opportunities, though as some of our target customers have initiated efforts to diversify supply chains towards Malaysia, and South Korea, where our factories are.

Raj Talluri: Now, for a few more details on the acquisition. On April 1st, we completed the acquisition of additional manufacturing assets adjacent to our existing South Korea facility. This includes equipment that will augment the coding needed for our Fab 2 in Malaysia as we ramp, as well as additional production for our Korean military programs and other industry applications that we are targeting. The facility also offers significant room for expansion, enhancing our strategic positioning as the global supply chains continue to evolve rapidly.

Speaker Change: Now for a few more details on the acquisition on April 1st we completed the acquisition of additional manufacturing assets adjacent to our existing South Korea facilities.

Speaker Change: This includes equipment that will augment the coding needed for our fab in Malaysia and Vietnam.

Speaker Change: As well as initial production for Korean military programs and other industrial applications that.

Speaker Change: That we're targeting.

Speaker Change: The facility also offers significant room for expansion enhancing our strategic positioning.

Speaker Change: As a global as the global supply chain continues to evolve rapidly.

Raj Talluri: In smartphones, we reached a critical inflection point towards launching our first product in the market. Last week, we finalized an agreement with our lead customer on the electrochemistry we will deploy in the custom cell we're building for the upcoming product launch this year. We're now manufacturing custom cells for them to deliver qualification samples later this quarter to support integration and testing this summer. Our benchmarking confirms that we are meeting all key technical requirements, and the customer feedback has been very positive and constructive. They have been a great partner to us. We appreciate the attention and resources that they, as well as many of our other customers, have dedicated to help us pull forward.

Speaker Change: In smartphones, we reached a critical inflection point towards launching our first product in the market last week, we finalized an agreement with our lead customer on the electrochemistry, we will deploy in the custom cell we're building for the upcoming product lines. This year.

Raj Talluri: Last week, we finalized an agreement with our lead customer on the electrochemistry we will deploy in the custom cell we're building for the upcoming product launch this year. We're now manufacturing custom cells for them to deliver qualification samples later this quarter to support integration and testing this summer. Our benchmarking confirms that we are meeting all key technical requirements, and the customer feedback has been very positive and constructive. They have been a great partner to us. We appreciate the attention and resources that they, as well as many of our other customers, have dedicated to help us pull forward. Now, we are also actively engaged with other smartphone OEMs to ensure rapid ramp once we establish in the market.

Speaker Change: But now manufactured in custom sales for them to Delaware qualification samples later this quarter to support integration and testing this summer.

Speaker Change: Our benchmarking confirms that we are meeting all key technical requirements and the customer feedback has been very positive and constructive.

Speaker Change: <unk> been a great partner to us we appreciate the attention and resources that day as well as many of our other customers have dedicated to help us pull forward.

Raj Talluri: Now, we are also actively engaged with other smartphone OEMs to ensure rapid ramp once we establish in the market. This progress strengthens not only our smartphone initiative, but also bolsters and accelerates our broader communications, commercialization roadmaps. Fab 2 in Malaysia is well-positioned for scale, following ISO certification and our first completed customer audit. While we continue to make enhancements on yield and other operational metrics that will be critical once we are in mass production, we feel good about the state of our manufacturing readiness and our focus this quarter is weighted heavily towards supporting custom cell developments for our marquee customers to solidify the demand in 2026.

Speaker Change: Now we are also actively engaged with other smartphone Oems to ensure rapid ramp once we established in the market.

Raj Talluri: This progress strengthens not only our smartphone initiative, but also bolsters and accelerates our broader communications commercialization roadmap. Fab Two in Malaysia is well positioned for scale following ISO certification and our first completed customer audit. While we continue to make enhancements on yield, and other operational metrics that will be critical once we are in mass production, we feel good about the state of our manufacturing readiness, and our focus this quarter is weighted heavily towards supporting custom cell developments for our marquee customers to solidify the demand in 2026. Our focus on smartphones is strategic and deliberate. This market highly values energy density, especially given the growing demands of AI-enabled features and applications such as intelligent cameras and the proliferation of LLMs. The smartphone market represents the fastest path to fully utilizing Fab Two while maintaining the opportunity to price on value.

Speaker Change: This brought the strengthened not only our smartphone initiatives, but also bolsters and accelerates our broader communications commercialization roadmap.

Speaker Change: Catherine militia is well positioned for scale following ISO certification and our first completed customer audit.

Speaker Change: We continued to make enhancements and yield other operational metrics that will be critical once we are in mass production. We feel good about the state of art manufacturing readiness and our focus this quarter is weighted heavily towards supporting custom cell development for our marquee customers to solidify the demand in 2026.

Raj Talluri: Our focus on smartphones is strategic and deliberate. This market highly values energy density, especially given the growing demands of AI-enabled features and applications such as intelligent cameras and the proliferation of LLM. The smartphone market represents the fastest path to fully utilizing Fab 2 while maintaining the opportunity to price on value. Meeting the stringent requirements of smartphones facilitates other business opportunities in adjacent markets.

Speaker Change: Our focus on smartphones is strategic and deliberate.

Speaker Change: This market highly values energy density, especially given the growing demands of AI enabled features and applications such as intelligent intelligent cameras and the proliferation of LMS.

Speaker Change: The smartphone market represents the fastest path to fully utilizing subdued while maintaining the opportunity to price and value.

Raj Talluri: Meeting the stringent requirements of smartphones facilitates other business opportunities in adjacent markets. In Q1, we delivered our first smart eyewear customer samples. We're also accelerating our expansion into handheld computer and scanner segments, where we've been engaged with the market leader in retail and logistics. Recent tariff developments have created new opportunities in this segment, prompting increased urgency and deeper collaboration from them. Finally, on the product front, I'm pleased to report that we recently completed benchmarking analysis of premium smartphone batteries launched in 2024 that indicates we hold a material lead in energy density, and we expect it to grow considerably with future generations. Last year, several conventional architecture battery manufacturers developed a technique called silicon doping, where a small amount of silicon is added to graphite anodes to increase the battery capacity by a modest amount.

Speaker Change: Meeting the stringent requirements of smartphones facilitates other business opportunities in adjacent markets in Q1, we delivered our first <unk>.

Raj Talluri: In Q1, we delivered our first smart eyewear customer sample. We're also accelerating our expansion into handheld computer and scanner segments, where we've been engaged with the market leader in retail and logistics. Recent tariff developments have created new opportunities in this segment, prompting increased urgency and deeper collaboration from them.

Speaker Change: Smart customer samples.

Speaker Change: We're also accelerating our expansion into handheld computer and scanner segments that we've been engaged with the market leader in retail and logistics.

Speaker Change: Recent tariff developments have created new opportunities in this segment.

Speaker Change: Empting increased urgency and deeper collaboration from them.

Raj Talluri: Finally, on the product front, I'm pleased to report that we recently completed benchmarking analysis of premium smartphone batteries launched in 2024 that indicates we hold a material lead in energy density and we expect it to grow considerably with future generations. Last year, several conventional architecture battery manufacturers developed a technique called silicon doping, where a small amount of silicon is added to graphite anodes to increase the battery capacity by a modest amount. Based on our first-hand experience and feedback from our smartphone customers, we believe that our competition will be capped from achieving meaningful energy density enhancements using this technique.

Speaker Change: Finally on the product front I am pleased to report at the recently completed benchmarking analysis of premium smartphone batteries launched in 2024 that indicates we hold a material LEED and energy density and we expect it to grow considerably with future generations.

Speaker Change: Last year.

Speaker Change: Several conventional.

Speaker Change: Conventional architecture battery manufacturers developed a technique called silicon doping, where a small amount of silicon.

Speaker Change: <unk> added the graphite anode is to increase the battery capacity by a modest amount.

Raj Talluri: Based on our first-hand experience and feedback from our smartphone customers, we believe that our competition will be capped from achieving meaningful energy density incremental enhancements using these techniques within their current architecture due to swelling and other trade-offs they'll have to make. Our internal benchmarking analysis of premium smartphone batteries launched in 2024 indicates that Enovix's unique architecture with 100% active silicon anode will hold material lead in energy density, and we expect it to grow considerably with future generations. Our customers also validated that our architectural approach offers significant gains for foreseeable future by leveraging the full potential of 100% active silicon anodes. With that, I'll turn it over to Ryan for the financials. Ryan.

Speaker Change: Based on our firsthand experience and feedback from our smartphone customers.

Speaker Change: We believe that our competition will be capped from achieving meaningful energy density increments enhancements using these techniques.

Raj Talluri: Within their current architecture due to swelling and other trade-offs they'll have to make. Our internal benchmarking analysis of premium smartphone batteries launched in 2024 indicates that Enomex's unique architecture with 100% active silicon anode will hold material lead and energy density and we expect it to grow considerably with future generations. Our customers also validated that our architectural approach offers significant gains for foreseeable future by leveraging the full potential of 100% active silicon anodes.

Speaker Change: We can fit into their current architecture jewelry swelling and other tradeoffs they'll have to make.

Our internal benchmarking analysis of premium smartphone batteries launch in 2024 indicates that intermix is unique architecture with 100% active silicon anode will hold material LEED and energy density and we expect it to grow considerably with future generations.

Speaker Change: Our customers also validated that our architecture approach offers significant gains for foreseeable future by leveraging the full potential of 100% active silicon anodes with that ill.

Ryan Benton: With that, I'll turn it over to Ryan for the financials. Thanks, Raj. To all the shareholders and employees watching and listening, it's my honor and pleasure to be I feel equally excited and fortunate to have joined Inovix.

Speaker Change: I'll turn it over to Ryan for the financials right. Thanks Raj.

Ryan Benton: Thanks, Raj. To all the shareholders and employees watching and listening, it's my honor and pleasure to be here. I feel equally excited and fortunate to have joined Enovix at such a pivotal time as we look to expand our commercial operations and scale our next generation battery technology. I'd like to add a special thanks to Kristina Truong, our CAO. She's helped make my transition seamless. As I've only been on the job two weeks, I've asked her to join us on the call to ensure we can properly answer every question that arises.

Speaker Change: So all of the shareholders and employees watching and listening, it's my honor and pleasure to be here.

Speaker Change: I feel equally excited and fortunate to have joined <unk> at such a pivotal time as we look to expand our commercial operations and scale. Our next generation battery technology.

Ryan Benton: It's such a pivotal As we look to expand our commercial operations and scale our next generation battery to I'd like to add a special thanks to Christina, our CAO. She's helped make my transition seamless.

Speaker Change: I'd like to add a special thanks to Cristina our C. E O. He has helped make my transition seamless.

Ryan Benton: As I've only been on the job two weeks, I've asked her to join us on the call to ensure we can properly answer every question that arises. Before we get to the numbers, I want to give some color on what attracted me to the company, which is the opportunity to help drive the next stage of growth, supported by an already strong foundation, a leading technology platform, a deep strategic customer engagements, a talented and dedicated workforce, and a solid capital base that is well positioned to support our growth plan. I look forward to doing my part to help execute on our strategy and create long term value.

I've only been on the job two weeks I've asked her to join US on the call to ensure we can properly answer every question that arises.

Ryan Benton: Before we get to the numbers, I want to give some color on what attracted me to the company, which is the opportunity to help drive the next stage of growth, supported by an already strong foundation, a leading technology platform, a deep strategic customer engagements, a talented and dedicated workforce, and a solid capital base that is well-positioned to support our growth plans. I look forward to doing my part to help execute on our strategy and create long-term value. Now I'll provide a brief summary of the Q1 financials and an outlook into Q2. Further details are available on our website. For Q1 2025, as Raj noted, we delivered revenue of $5.1 million, exceeding the midpoint of our guidance.

Speaker Change: Before we get to the numbers I want to give some color on what attracted me to the company, which has the opportunity to help drive the next stage of growth supported by an already strong foundation, a leading technology platform.

Speaker Change: Deep strategic customer engagements, a talented and dedicated workforce and a solid capital base is well positioned to support our growth plans.

Speaker Change: I look forward to doing my part to help execute on our strategy and create long term value.

Ryan Benton: Now I'll provide a brief summary of the first quarter financials and an outlook into the second quarter. Further details are available on our website. For the first quarter of 2025, as Raj noted, we delivered revenue of $5.1 million, exceeding the midpoint of our guidance. Adjusted EBITDA loss was $22.2 million, near the high end of our guidance range of a loss of $21 to $27 million. The sequential change from Q4 was driven in part by increased expenses to support the manufacturing scale up in Asia and a modest decline in gross profit. Non-gap net loss per share attributable to Inovix came in at a loss of $0.15 at the high end of our guidance range of $0.15 to $0.21.

Speaker Change: Now I'll provide a brief summary of the first quarter financials, and an outlook into the second quarter.

Speaker Change: Further details are available on our website.

Speaker Change: For the first quarter of 2000 and twenty-five as Raj noted, we delivered revenue of $5 1 million exceeding the midpoint of our guidance.

Ryan Benton: Adjusted EBITDA loss was $22.2 million, near the high end of our guidance range of a loss of $21 to 27 million. The sequential change from Q4 was driven in part by increased expenses to support the manufacturing scale up in Asia and a modest decline in gross profit. Non-GAAP net loss per share attributable to Enovix came in at a loss of $0.15 at the high end of our guidance range of $0.15 to 0.21. Capital expenditures in the quarter were $6.3 million and cash used in operations totaled $16.9 million. We ended the quarter with approximately $248 million in cash equivalents, and marketable securities.

Speaker Change: Adjusted EBITDA loss was $22 2 million near the high end of our guidance range of a loss of $21 million to $27 million.

Speaker Change: The sequential change from Q4 was driven in part by increased expenses to support the manufacturing scale up in Asia, and a modest decline in gross profit.

Speaker Change: non-GAAP net loss per share attributable to <unk> came in at a loss of 15 cents at the high end of our guidance range of 15 to 21 sets cap.

Ryan Benton: Capital expenditures in the quarter were $6.3 million and cash used in operations totaled $16.9 million. We ended the quarter with approximately $248 million in cash, cash equivalents, and marketable security. We believe our current capital position provides flexibility to support our operations well into 2026, while maintaining optionality to fund additional expansion capacity at Fab 2.

Speaker Change: Capital expenditures in the quarter were $6 $3 million and cash used in operations totaled $16 $9 million we.

Speaker Change: We ended the quarter with approximately $248 million in cash cash equivalents in marketable securities we.

Ryan Benton: We believe our current capital position provides flexibility to support our operations well into 2026, while maintaining optionality to fund additional expansion capacity at Fab Two. Now for our guidance. For Q2 2025, we forecast revenue of $4.5 to 6.5 million. Non-GAAP operating loss, which excludes certain items such as stock-based compensation, in the range of $31 to 37 million. Adjusted EBITDA loss, which further excludes certain items such as depreciation and amortization, in the range of $23 to 29 million. Finally, non-GAAP net loss per share attributable to Enovix of $0.15 to 0.21. One note, going forward, we will no longer be providing guidance for GAAP EPS due to the difficulty to estimate or predict.

Speaker Change: We believe our current capital position provides flexibility to support our operations well into 2026, while maintaining optionality to fund additional expansion capacity at fab two.

Ryan Benton: Now for a guide. For the second quarter of 2025, we forecast revenue of $4.5 to $6.5 million. Non-Gap Operating Loss, which excludes certain items such as stock-based compensation in the range of $31 to $37 million. Adjusted EBITDA loss, which further excludes certain items such as depreciation and amortization in the range of $23 to $29 million. And finally, non-GAAP net loss per share attributable to Novix of $0.15 to $0.21.

Speaker Change: Now for our guidance.

Speaker Change: For the second quarter of 2025, we forecast revenue of $4 $5 to $6 $5 million non.

Speaker Change: non-GAAP operating loss, which excludes certain items such as stock based compensation in the range of 31% to $37 million.

Speaker Change: Adjusted EBITDA loss, which further excludes certain items, such as depreciation and amortization in the range of $23 million to $29 million and finally, non-GAAP net loss per share attributable to <unk> of 15 to 21.

Ryan Benton: One note, going forward, we will no longer be providing guidance for gap EPS due to the difficulty to estimate or predict. However, we will continue to provide non-GAAP EPS guidance and we have supplemented this with an additional measure, non-GAAP operating income loss.

One note going forward, we will no longer be providing guidance for GAAP EPS due to the difficulty to estimate or predict.

Ryan Benton: However, we will continue to provide non-GAAP EPS guidance, and we have supplemented this with an additional measure, non-GAAP operating income loss. Furthermore, in the interest of transparency, we published a new financial supplement document that compiles historical financial information into a single, easy-to-access document. It's available on our website along with the shareholder letter. Over time, we plan to expand this resource by incorporating additional operating financial metrics, operating and financial metrics, and additional data. Finally, at the risk of being redundant, I want to say again how fortunate I feel to be part of the Enovix team. With that, I'll turn it back over to Raj. Raj?

Speaker Change: However, we will continue to provide non-GAAP EPS guidance and we have supplemented this with an additional measure non-GAAP operating income loss.

Ryan Benton: Furthermore, in the interest of transparency, we've published a new financial supplement document. that compiles historical financial information into a single easy-to-access document. It's available on our website along with the shareholder letter. Over time, we plan to expand this resource by incorporating additional operating financial metrics and operating financial metrics and additional data.

Speaker Change: Furthermore, in the interest of transparency, we published a new financial supplement document.

Speaker Change: That compiles historical financial information into a single easy to access document is available on our website along with the shareholder letter overtime. We plan to expand this resource by incorporating additional operating financial metrics and operating and financial metrics and additional data.

Ryan Benton: And finally, at the risk of being redundant, I want to say again, how fortunate I feel to be part of the analytics team.

And finally at the risk of being redundant I want to say again, how fortunate I feel to be part of the networks team and with that I'll turn it back over to Raj Raj.

Raj Talluri: And with that, I'll turn it back over to Raj.

Operator: Raj. Yeah, thank you, Ryan. It's great to have you on board. With that, we can now go to questions. Operator. Thank you. We will now begin the Q&A session. Please note that this call is being recorded.

Raj Talluri: Yeah. Thank you, Ryan. It's great to have you on board. With that, we can now go to questions. Operator?

Raj Laurie: Yes, Thank you and it's great to have you on board with that we can now go to questions operator.

Operator: Thank you. We will now begin the Q&A session. Please note that this call is being recorded. Before we go to live questions, we're going to read the two most highly voted questions submitted by shareholders ahead of this call during the call registration. The first question is: Can you share any updates on EX-3M in terms of energy density, release, or sampling timelines?

Raj Laurie: Thank you.

Raj Laurie: We will now begin the Q&A session.

Operator: Before we go to live questions, we're going to read the two most highly voted questions submitted by shareholders ahead of this call during the call registration.

Raj Laurie: Please note that this call is being recorded.

Raj Laurie: Before we go to live questions looking to meet the two most highly rated questions submitted by shareholders at this cool during the cool registration.

Raj Talluri: The first question is, can you share any updates on X3M in terms of energy density, release, or sampling timelines? Yeah, thank you for the question. The question about EX3M.

Raj Laurie: The first question is.

Raj Laurie: Can you share any updates on X three and intensive energy density release or something timelines.

Raj Talluri: Yeah, thank you for that question. The question about EX-3M. Yeah, we are very excited to have formalized the definition of EX-3M, which is our next node. We expect to sample that by end of this year. We've got the basic chemistry that we're going to use and the anodes and the cathodes are locked in terms. I think in the investor deck we give you some indication of relative to EX-1M and EX-2M where it is placed. The actual energy density will be, as I mentioned, a combination of cycle life and also you know fast charge and a few other parameters.

Raj Laurie: Yeah. Thank you for the question the question about <unk>, Yeah, we are we.

Raj Talluri: Yeah, we are very excited to have formalized the definition of EX3M, which is our next node. And we expect to sample that by end of this year. We've got the basic chemistry that we're going to use, and the anodes and the cathodes are locked. In terms, and I think in the investigative, we give you some indication of relative to EX1M and EX2M where it is placed. The actual energy density will be, as I mentioned, a combination of cycle life and also fast charge and a few other parameters. Thank you.

Raj Laurie: We are very excited to have the formalized the definition of <unk>, which is our next node.

Raj Laurie: And we expect a sample that by end of this year.

Raj Laurie: We've got.

Raj Laurie: The basic chemistry that we're going to use and the anodes and the cathodes unlocked.

Raj Laurie: In terms and I.

Raj Laurie: I think in the in the Investor deck, we give you some indication of relative to <unk> two embedded displaced the actual energy density will be as I mentioned, a combination of cycle life and also.

Raj Laurie: Fast charge and a few other parameters.

Operator: Thank you. Our second question is: what is the status of the first major OEM cell phone development agreement announced 1 May 2024?

Raj Talluri: And our second question is, what is the status of the first major OEM cell phone development agreement announced May 1st, 2024? Yeah, you know, so as I mentioned before, we are working with two cell phone OEMs. One of them, we've received the actual cell dimensions, which is actually means this is a cell that's going to be used in the phone that's going to go to mass production at the end of this year. We retooled our factory to actually make that particular cell. And Ajay, who's actually calling in from Malaysia, and his team have been working pretty hard on that.

Raj Laurie: Thank you.

Raj Laurie: And second question is what is the status of the first major early and cell phone development agreement announced May five 2024.

Raj Talluri: Yeah. You know, as I mentioned before, we are working with the 2 cell phone OEMs. One of them, we've received the actual cell dimensions, which actually means this is a cell that's gonna be used in the phone, that's gonna go to mass production at the end of this year. We retooled our factory to actually make that particular cell. Ajay, who's actually calling in from Malaysia, and his team have been working pretty hard on that. We finalized the electrochemistry that will go into that, and we presented that data to our customer and they're very pleased with the progress. We will be making cells to that dimension in this quarter and giving it to them in the June timeframe.

Raj Laurie: Yeah. So.

Raj Laurie: So as.

Raj Laurie: As I mentioned before we are working to get that to cell phone Oems.

Raj Laurie: One of them we've received.

You'll sell dimensions, which is actually means either sell that's going to be using the phone that's going to go to mass production.

Raj Laurie: The end of this year.

Raj Laurie: We retooled our factory to actually make that particular cell and Ajay who's actually calling in from Malaysia, and his team have been working very hard on that.

Raj Talluri: We finalized electrochemistry that will go into that. And we presented that data to our customer, and they're very pleased with the progress. And we will be making cells to that dimension in this quarter and giving it to them in the June timeframe. The customer that the second customer is also super engaged with us, they gave us a lot of requirements and feedback. And that will be the next one that we'll address right after the cells go to the first.

Raj Laurie: We finalized electrochemistry that'll go into that and we presented that data to our customer and their their.

Raj Laurie: We're very pleased with the progress and we will be making cells do that dimension.

Raj Laurie: In in this quarter and giving it to them.

Raj Talluri: The second customer is also super engaged with us. They gave us a lot of requirements and feedback, and that'll be the next one that we'll address right after the cells go to the first customer.

Raj Laurie: In the June timeframe.

Raj Laurie: The customer the second customer is also super engaged with us they gave us a lot of requirements and feedback and and that'll be the next one that will address right. After those sales go to the first customer.

Operator: Thank you.

Operator: Thank you. We will now go to the queue. If you would like to ask a question, please use the raise hand feature on your screen. If you have dialed in via phone, please use star nine to raise your hand and star six to unmute yourself. Questions will be answered in the order that they are received. Please ask one question and one follow-up question at most. We will now pause a moment to assemble the queue. Our first question comes from Jed Dorsheimer at William Blair. Thank you, Jed. Please unmute your line and ask your question.

Operator: We will now go to the queue. If you would like to ask a question, please use the raise hand feature on your screen. If you have dialed in via phone, please use star 9 to raise your hand and star 6 to unmute yourself. Questions will be answered in the order they are received. Please ask one question and one follow-up question at most.

Raj Laurie: Thank you.

Speaker Change: We will now go to the queue. If you would like to ask a question. Please use the raise hunt feature on your screen. If you have dialed in via phone. Please use Stan nine to raise your hand and star six ton mute yourself.

Speaker Change: Questions will be answered in the order. They are received please ask one question and one follow up question utmost we will now pause a moment to assemble the queue.

Operator: We will now pause a moment to assemble the queue.

Speaker Change: Yeah.

Jed Dorsheimer: Our first question comes from Jed Dorsheimer. at William Blair.

Speaker Change: Our first question comes from jet to China.

Mark Shooter: Thank you, Jed. Please unmute your line and ask your question. Hi, team.

Speaker Change: At William Blair. Thank you Chad. Please on mute your line and ask your question.

Mark Shooter: Hi, team. You have Mark Shooter on for Jed Dorsheimer. I was just wondering, a question about customer conversations. How have they developed since the tariffs have been implemented on 2 April? Your top two Chinese customers, are they concerned about working with a US company when they have so much, you know, internal battery supply? On the flip side, are any US companies or consumer electronics companies more willing to engage rather than being, like, a fast follower?

Raj Talluri: You have Mark Shooter on for Jed. I was wondering a question about customer conversations. How have they developed since the tariffs have been implemented on April 2? Your top two Chinese customers, are they concerned about working with a US company when they have so much, you know, internal battery supply? And on the flip side, are any US companies or consumer electronics companies more willing to engage rather than being like a fast follower?

Mark Shooter: Okay, you have mark shooter on for Chad.

Mark Shooter: I was wondering a question about customer conversations.

Mark Shooter: They developed since the tariffs.

Speaker Change: Implemented on April 2nd.

Speaker Change: Your top two Chinese customers are they concerned about working with a U S company when they have so much.

Speaker Change: Internal battery supply and on the flip side are any U S companies are and some electronics companies more willing to engage rather than being a fast follower.

Raj Talluri: Yeah, thanks, Mark. So yeah, no, no, we haven't seen any concerns from our current customers in in China. Again, I think the terrorist situation is evolving and is dynamic and it changes week to week. So far, you know, I think they love the technology we're able to provide the energy density we're able to bring in. And again, we make our batteries in in Asia, and we ship them to other factories in Asia. So we don't see any near term impact, material impact on that. front. We have seen more interest from many US customers, not just in smartphone, but other areas in having wanting to have a US manufacturer who has got factories, you know, in in Korea and in and in Malaysia.

Raj Talluri: Yeah. Thanks, Mark. So, yeah, no, we haven't seen any concerns from our current customers in China. Again, I think the tariff situation is evolving and is dynamic and it changes week to week. So far, you know, I think they love the technology we're able to provide, the energy density we're able to bring in. Again, we make our batteries in Asia and we ship them to other factories in Asia. So, we don't see any near-term impact, material near-term impact on that front. We have seen more interest from many US customers, not just in smartphone, but in other areas, in wanting to have a US manufacturer who's got factories, you know, in Korea and in Malaysia.

Mark Shooter: Yeah, Thanks, Mark so.

Mark Shooter: Yeah, No no we haven't seen any concerns from our current customers and in China again, I think the tariff situation is evolving and is dynamic and it changes.

Mark Shooter: The week so far.

Mark Shooter: I think they love the technology, we're able to provide energy density, we're able to bring in and.

Mark Shooter: Again, we make our batteries in in Asia, and we ship them to other factories in Asia. So.

Mark Shooter: We don't see any near term impact.

Mark Shooter: Middle income impact on that front.

Mark Shooter: We have seen more interest from.

Mark Shooter: Many U S customers not just in smartphones by the other areas.

Mark Shooter: In having wanting to have a U S manufacturer, who has got factories in.

Raj Talluri: So that that has, you know, kind of been some tailwinds for us. So we are now you know, get working on getting samples to them and so on.

Raj Talluri: That has, you know, kind of been some tailwinds for us. We are now, you know, getting working on getting samples to them and so on.

Mark Shooter: In Korea and in.

Raj Talluri: That has, you know, kind of been some tailwinds for us. We are now, you know, getting working on getting samples to them and so on.

Mark Shooter: And in Malaysia, So that that has kind of been some tailwind for us. So we are now working on getting samples to them and so on.

Mark Shooter: Thanks, Raj. I appreciate the color. As a follow up here. I do the slide that you provided with the updated baseline cells. So that's very helpful. And if I'm looking at the material set, the silicon, you know, carbon composites that that OEMs have been using in 2024, that's what you're now comparing against. And if I were to the same materials that you'd be using, or similar materials that you'd be using an EX2M. So the direct compare, the way I'm looking at it is that The Inovix architecture allows more of that silicon, silicon carbon composite material in, in the cell, and that can give you that 20% energy density boost.

Mark Shooter: Thanks, Raj. I appreciate the color. As a follow-up here, I do the slide that you provided with the updated baseline cells, that's very helpful. If I'm looking at the material set, the silicon, you know, carbon composites that OEMs have been using in 2024, that's what you're now comparing against. If I were to the same materials that you'd be using or similar materials that you'd be using in EX-2M. The direct compare, the way I'm looking at it, is that the Enovix architecture allows more of that silicon carbon composite material in the cell, and that can give you that 20% energy density boost. Am I thinking about that correctly?

Josh: Thanks, Josh I appreciate the color.

Mark Shooter: As a follow up here.

Mark Shooter: The slide that you provided with the updated baseline sales. So that's very helpful and if I'm looking at the material set the silicon carbon composites that Oems have been using in 2024, that's what you're now comparing against and if I were to Miss.

Mark Shooter: The same materials that you'd be using or a similar materials that you've using dx to them. So the direct compare the way I'm looking at it as that.

Mark Shooter: <unk> architecture allows more.

Mark Shooter: Of that silicon from silicon carbon composite material in the cell and that can give you that 20% energy density boost am I thinking about that correctly.

Raj Talluri: Am I thinking about that correctly? Yeah, exactly. You know, what we have seen in the market is people predominantly are still using graphite anodes, but they've, as I, you know, as we mentioned in the letter, dope it with some amount of silicon carbon or silicon, some form of silicon compound, which gives them a one time which we did notice that it gives us a one time improvement in energy density. By the way, we as you know, with the route jet acquisition, we actually have we make silicon, we make graphite batteries there. So we did that too.

Raj Talluri: Yeah, exactly. You know what we have seen in the market is people predominantly are still using graphite anodes, but they've, as I, you know, as we mentioned in the letter, dope it with some amount of, silicon carbon or silicon, some form of silicon compound, which we did notice that it gives us a one-time, improvement in energy density. By the way, we, as you know, with the Routejade acquisition, we actually have, we make graphite batteries there. So we did that too. We actually added some amount of, this kind of silicon compound material on top of that, and we saw a modest increase in energy density.

Mark Shooter: Yes exactly.

Mark Shooter: What we have seen in the market is people predominantly are still using graphite anode, but there's as I as we mentioned in the letter dope it with some amount of silicon carbon silicon and some form of silicon component.

Mark Shooter: Which gives them a one time, which we did notice that it gives us a one time improvement in attitude entity by the way we as you know with the route that acquisition, we actually have we make silicon back we make graphite batteries. There. So we did that too we actually added some amount of.

Raj Talluri: We actually added some amount of this kind of silicon compound material on top of that. And we saw a modest increase in energy density. But we also saw that as we add more and more of that material, you know, the, the, the batteries swell beyond the usable range. And they also have other issues like cycle life and cycle swelling, and so on. Whereas in our architecture, we are able to use 100% active silicon of this material, which means there is actually no graphite in our battery right now, we just put all of this, this silicon material, and we're able to control the swelling because of our architecture.

Mark Shooter: This kind of silicon compound material on top of that and we saw a modest increase in energy density, but we also saw that as we add more and more of that material.

Raj Talluri: We also saw that, as we add more and more of the material, you know, the batteries swell beyond the usable range, and they also have other issues like cycle life and cycle swelling and so on. Whereas in our architecture, we are able to use 100 percent active silicon of this material, which means there is actually no graphite in our battery right now. We just put all of this silicon material, and we're able to control the swelling because of our architecture, and that's what gives us energy density gains. Now, we haven't fully taken advantage of everything that the silicon architecture can provide. That's why you see a certain benefit in EX-2M.

Mark Shooter: The battery swell beyond the usable range and they also have other issues like cycle life, and cycled swelling and so on whereas in our architecture. We are able to use 100% active silicon of this material, which means there is actually no graphite and our battery right now we just put all of this the silicon material and we were able to control our selling because of variety.

Raj Talluri: And that's what gives us energy density gains. Now, we haven't fully taken advantage of everything that the silicon architecture can provide. That's why you see us Silicon, and others. Silicon anodes have a certain benefit in 2M, but as you move forward in 3M and 4M, as we increase our packaging efficiency, as we increase our various kinds of constraints that we use in there, and then different separators, cathode voltages, there's a bunch of stuff that we are working on changing. In addition to having 100% active silicon anodes, that's what gives us this roadmap of increased energy density while meeting all the other requirements.

Mark Shooter: Architecture, and that's what gives us the energy density gains now we haven't fully taken advantage of everything that the silicon architecture can provide.

Raj Talluri: As you move forward in EX-3M and 4M, as we increase our packaging efficiency, as we increase our various kinds of constraints that we use in there, and then different separators, cathode voltages. There's a bunch of stuff that we are working on changing. In addition to having 100 percent active silicon anodes, that's what gives us this roadmap of increased energy density while meeting all the other requirements. It's just a better architecture to take advantage of the benefits of silicon anodes.

Mark Shooter: That's why you see us.

Mark Shooter: Certain benefit in <unk>, but as you move forward and three am and forum as we increase our packaging efficiency as we increase our.

Mark Shooter: Various kinds of concerns that we use in there and then different separators gathered voltages, there's a bunch of stuff that we're working on changing in addition to having 100% active silicon anodes. That's what gives US. This roadmap of increased energy density while meeting all the requirements. So it's just a better architecture to take advantage of the of the benefits of silk.

Raj Talluri: So it's just a better architecture to take advantage of the benefits of silicon anodes.

Mark Shooter: That's great. Thank you, Raj.

Mark Shooter: <unk>.

Mark Shooter: That's great. Thank you Raj.

Operator: Thank you so much.

Operator: Thank you so much. Our next question comes from Colin Rusch at Oppenheimer. Colin, please unmute your line and ask your question.

Colin Rusch: Our next question comes from Colin Rusch at Oppenheimer. Colin, please unmute your line and ask your question. Thanks so much, guys.

Speaker Change: Thank you so much. Our next question comes from Colin Rusch Oppenheimer Collyn piece, Amit Your line and ask your question.

Colin Rusch: Thanks so much, guys. You know, Raj, can you talk about the importance of the coating line that you're getting with the Routejade acquisition to facilitating not only your ramp, but also some of the learning cycles for some of those newer chemistries and being able to commercialize them in an efficient way?

Colin Rusch: You know, Raj, can you talk about the importance of the coding line that you're getting with the SolarEdge acquisition to facilitating not only the RAM, but also some of the learning cycles for some of those newer chemistries and being able to commercialize them efficiently? Yeah, yeah, thank you, Colin, for that question. So firstly, this has been a great acquisition for us. And we talked about the fact that we got quite a large footprint of the factory and a new coating line, and also x capacity to produce more cells, you know, for a very reasonable price.

Speaker Change: Thanks, so much guys.

Speaker Change: Russ can you talk about the importance of the coating line.

Speaker Change: Getting with the storage acquisition to facilitate not only your Ram but also some of the learning cycles for some of those newer chemistries and being able to commercialize and inefficient.

Raj Talluri: Thank you, Colin, for that question. Firstly, this has been a great acquisition for us, and we talked about the fact that we got quite a large footprint of the factory and a new coating line and also excess capacity to produce more cells, you know, for a very reasonable price. It was very fortuitous that we were able to do that. Look, I think what we realized as we start building our batteries now. It is very important that we control the coating and have enough of it because the cells that we talked about, you know, when I first started a couple of years ago to now, you can see the cells that the customers want are getting larger and larger.

Speaker Change: Yeah, Yeah. Thank you for that question. So so Fortunately this has been a great acquisition for us and we talked about the fact that they've got.

Speaker Change: Quite a large footprint of the factory and at our new coating line and also ex capacity to produce more cells.

Raj Talluri: So it was a very fortuitous that we were able to do that. Look, I think what I've, what we realized, as we start building our batteries now, it's very important that we control the coating and have enough of it, because the cells that we talked about, you know, when I first started a couple of years ago to now, you can see the cells that the customers want are getting larger and larger. Now we're talking over 7000. And soon they'll probably be over 8000, which means we need more and more coating capacity to support the ramp.

Speaker Change: For a very reasonable price. So it was a very fortuitous that we were able to do that.

Speaker Change: Look I think what I have.

Speaker Change: What we realized as we start building our <unk>.

Speaker Change: Batteries now.

Speaker Change: It's very important that we control the coding.

Speaker Change: And have enough of it because that the salads that we talked about.

Speaker Change: When I first started couple of years ago to now you can see the sell through that the customers wanted to getting larger and larger and I were talking over 7000, and soon they'll probably be over 8000, which means we need more and more coating capacity to support the ramp which is why we felt it was a great opportunity for us to get that.

Raj Talluri: Now we're talking over 7,000, and soon they'll probably be over 8,000, which means we need more and more coating capacity to support the ramp, which is why we felt it was a great opportunity for us to get that. The second one is, we are now able to get these new materials. We already have, you know, existing coating in our Korea facility. But now we're able to get these new materials, quickly coat them and see the advantages, optimize the coating, and figure out how to dice them on our laser dicing process and get ahead in terms of building our roadmap. It's a very key acquisition for us to actually optimize the coating and the dicing and the stacking that we do. With now we have two coating lines on which we can do that.

Raj Talluri: Uh, which is why we felt it was a great opportunity for us to get that. And the 2nd, 1 is we are now able to get this new materials. We already have, you know, existing coating in, in, in our courier facility. But now we're able to get this new materials, quickly coat them, and see the advantages, optimize the coating, and figure out how to dice them on our laser dicing process, and get ahead in terms of building a roadmap. So it's a very key acquisition for us to actually optimize the coating, and the dicing and the stacking that we do with now we have two coating lines on which we can do that.

Speaker Change: And the second one is we're now able to get these new materials.

Speaker Change: We already have.

Speaker Change: Existing coding and in in our Korea facility, but now we're able to get this mated new materials quickly caught them and they see the advantages optimized the coating and figured out how to dice them on.

Speaker Change: Laser dicing process and get ahead in terms of building a roadmap. So it's a very key acquisition for us to actually optimize the coating and the deicing and the stacking that we do with now we have two coating lines on which we can do that so so it was a very fractured as we're able to get that.

Raj Talluri: So, so it was very fortunate as we're able to get Excellent.

Raj Talluri: It was very fortuitous we're able to get that.

Colin Rusch: Excellent. Then from a materials perspective, obviously, there's an awful lot going on in terms of evolution of both anode and cathode materials. I guess I'm curious about the number of relationships, number of companies you're able to work with in terms of some of those advanced materials as you look at evolving the platform and being able to to you know, kind of accelerate or at least you know, execute against some of the increased density that you guys are talking about here.

Raj Talluri: And then from a materials perspective, obviously, there's an awful lot going on in terms of evolution of both anode and cathode materials. And, and I guess I'm curious about the number of relationships, number of companies you're able to work with, in terms of some of those advanced materials, as you look at evolving the platform and being able to, you know, kind of accelerate or at least, you know, execute against some of the increased density that you guys are talking about here. I think, you know, it's been great because now we have our own, we have these customers that we are working with in a smartphone.

Speaker Change: Excellent and then raw materials perspective, obviously, there's an awful lot going on in terms of evolution of the boat and cathode materials.

Speaker Change: And I guess I'm curious about the number of relationships number of companies you are able to work with in terms of some of those advanced materials as you look at evolving the platform and being able to kind of accelerate or at least.

Speaker Change: Execute against some of the increased density that you guys were talking about here.

Raj Talluri: You know, it's been great because now we have our own, we have these customers that we are working with in the smartphone. We've now gotten recommendations from our customers on different material suppliers we should be looking at, and they have talked to the material suppliers, and they're talking to us, which has been a really good thing because now we have customers suggesting different materials that we could use. There's various kinds of silicon anodes that we use. They all come with slightly different advantages in terms of energy density, in terms of cycle life, in terms of fast charge, in terms of storage gassing, and so on. And also now there's different cathode materials that are coming in that can actually run at higher voltages.

Speaker Change: I think it's been great because now we have our own and we have these customers that we're working within a smartphone we've now gotten.

Raj Talluri: We've now gotten recommendations from our customers on different material suppliers we should be looking at. And they have talked to the material suppliers and they're talking to us, which has been a really good thing because now we have customers suggesting different materials that we could use. There's various kinds of silicon anodes that we use. They all come with slightly different advantages in terms of energy density, in terms of cycle life, in terms of fast charge, in terms of storage gassing and so on. And also now there's different cathode materials that are coming in that can actually run at higher voltages.

Speaker Change: Commendations from our customers on different material suppliers, we should be looking at and they have talked to the material suppliers and they're talking to us which has been a really good thing because now we have customers, suggesting different retailers that we could use this.

Speaker Change: There's various kinds of silicon anodes that'd be used they all come with slightly different advantages in terms of energy density in terms of cycle life in terms of SaaS charge in tons of storage guessing and so on.

Speaker Change: And also now there's different cathode materials that are coming in that can actually run at higher voltages. So what happens is when you drive the voltage of the cat load up we were able to pack even more energy density and if he you know.

Raj Talluri: So what happens is when you drive the voltage of the cathode up, we are able to pack even more energy density. And if we, you know, kind of couple that with an anode, the silicon anode that can hold a lot more lithium, that gives us the advantage that we're now able to make higher energy density batteries. So it's been a very good thing for us. And the other thing is, I've mentioned this before, maybe not to the clarity I needed to, is that we are material agnostic in the sense that the same laser dicing and stacking and formation machines we have.

Raj Talluri: What happens is when you drive the voltage of the cathode up, we are able to pack even more energy density. If we, you know, kind of couple that with an anode, the silicon anode that can hold a lot more lithium, that gives us the advantage that we're now able to make higher energy density batteries. It's been a very good thing for us. The other thing is, I've mentioned this before, maybe not to the clarity I needed to, is that we are material agnostic in the sense that the same laser dicing and stacking and formation machines we have can work with all these different kinds of materials as we optimize them. In the sense that we don't have to buy brand-new machines as we change the material stack.

Speaker Change: Kind of couple that with the with an animal the silicon anode that can hold a lot more lithium that gives us the advantage that may not be able to make higher energy density batteries. So it's been.

Speaker Change: A very good thing for us and the other thing is I've mentioned this before.

Speaker Change: Maybe not.

Speaker Change: Do you need to do is that we are material agnostic in the sense that the same.

Speaker Change: Laser nice thing and stacking and for automation machines, we have.

Raj Talluri: can work with all these different kinds of materials as we optimize them. In the sense that we don't have to buy brand new machines as we change the material stack. So, so the cost of the machines we've bought get amortized over different material stocks. So, as we increase the energy density, we can use the same factories, but change the materials and get that benefit. So, it's been a very interesting journey to see that. And I actually think there'll be a lot more materials coming in even separators. We're finding much better separators now coming in and so on.

Speaker Change: Can work with all of these different kinds of materials as we optimize them.

Raj Talluri: The cost of the machines we've bought get amortized over different material stocks. As we increase the energy density, we can use the same factories but change the materials and get that benefit. It's been a very interesting journey to see that. I actually think there will be a lot more materials coming in. Even separators, we are finding much better separators now coming in and so on.

Speaker Change: In the sense that we don't have to buy brand new machines as we change the material stack. So so the cost of the machines, but get amortized over different material stock. So as we increase the energy density we can use the same factories, but change the materials and get that benefit that's been a very interesting journey to see that and I actually think there'll be a lot more materials coming in even separate.

Colin Rusch: Excellent. Appreciate it, guys.

Speaker Change: Orders were finding much better separate is now coming in and so on.

George Gianarikas: Our next question comes from George Gianarikas from Canaccord.

Operator: Our next question comes from George Gianarikas from Canaccord Genuity. George, please unmute your line and ask your question.

Speaker Change: Excellent appreciate it guys.

Raj Talluri: George, please unmute your line and ask your question. Hi, everyone. Thank you for taking my question. Maybe to start, can you share any of the financial metrics around your recent acquisition in South Korea, the revenue capacity, revenue expectations, margin profile, maybe a little bit more detail on the purchase price? Thank you.

Speaker Change: Our next question comes from George <unk> from Canaccord George Please on mute your line and ask your question.

George Gianarikas: Hi, everyone. Thank you for taking my questions. Maybe to start, can you share any of the financial metrics around your recent acquisition in South Korea, like revenue capacity, revenue expectations, margin profile, maybe a little bit more detail on the purchase price? Thank you.

George: Hi, everyone. Thank you for taking my questions.

George: Maybe to start can you share any of the financial metrics around your recent acquisition in South Korea. The revenue capacity revenue expectations margin profile, maybe a little bit more detail on the purchase price. Thank you.

Raj Talluri: Yeah, I mean, maybe, maybe I'll pass it over to Christina or Ryan to comment on that. But essentially, what we got was it was an asset acquisition. So we essentially acquired the assets in the factory, I think, 330 square feet of space, we had like 70,000 there before. So this is significantly added to that.

Raj Talluri: Yeah, I mean, maybe I'll pass it over to Kristina or Ryan to comment on that. Essentially what we got was an asset acquisition, so we essentially acquired the assets in the factory. I think 330sq ft of space. We had, like, 70,000 there before, so this is significantly added to that. This has the capacity now to make our cells that we are selling to military and also cells that can go into other markets. Maybe Kristina, you wanna comment any more, or Ryan?

George: Yeah, I mean, I I, maybe maybe I'll pass it over to.

George: Christina.

Speaker Change: Ryan to comment on that but essentially what we got was it was an asset acquisition. So we essentially acquired the assets in the factory I think three.

Speaker Change: 330 square feet of space, we have like 70000, there before so this is a significantly added to that and this has the capacity now to make make are cells that we are selling into military and ultra sell certain other markets, but maybe Kristina you want to comment anymore Orion I mean, I'll just jump in at.

Christina Truong: And this has the capacity now to make make our cells that we are selling it to military and also cells that can go into other markets, but maybe Christina, you want to comment on more of that? I mean, I'll just jump in it.

Kristina Truong: I mean, I'll just jump in. The structure is an asset purchase, so it was a $10 million purchase price, and we got the facility and equipment.

Ryan Benton: I mean, I'll just jump in. The structure is an asset purchase, so it was a $10 million purchase price, and we got the facility and equipment.

Christina Truong: The structure is an asset purchase. Thank you.

Speaker Change: The structures and asset purchases of $10 million purchase price and we got facility and equipment.

Raj Talluri: Yeah.

George Gianarikas: Thank you. Maybe as a follow-up, you mentioned in the press release some momentum, some sampling momentum with additional end markets. I think a handheld computer was one of them. Can you. You know, I know that a lot has to go well for this to happen in 2026, but to the extent you could sort of think about a revenue profile of the firm in 2026, maybe into 2027, how many different end markets do you expect to serve at that time? Will you be strictly smartphone, or do you know, more, maybe more of a defense footing? Will you entertain niche markets like handheld computers and maybe some smartphones? I'm just kinda curious as to

Raj Talluri: And maybe as a follow-up, you mentioned in the press release some momentum, some sampling momentum with additional end markets. I think a handheld computer was one of them. I know that a lot has to go well for this to happen in 2026. But to the extent you could sort of think about a revenue profile of the firm in 2026, maybe into 2027, how many different end markets do you expect to serve? At that time? Will you be strictly smartphone? Or do you maybe more of a defense footing? Will you entertain ? how long it has to go.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Maybe as a follow up you mentioned in the press release, some momentum some sampling momentum with additional end markets I think our handheld computer was one of them can you.

Speaker Change: Another a lot.

Speaker Change: Has to go well for this to happen in 'twenty six but to the extent you can sort of think about our revenue profile of the firm in 2026 may be in the 27, how many different end markets do you expect to serve.

At that time will you be strictly smartphone or do you more.

Speaker Change: Maybe more of a defense footing.

Speaker Change: Will you entertain.

Raj Talluri: Yeah.

George Gianarikas: You break down that revenue profile. Thank you.

Speaker Change: Niche markets like handheld computers, or maybe some smartphones I'm just kind of curious is there a.

Raj Talluri: Yeah. Let me talk about the strategy before I talk about the revenue profile. You know, as I mentioned in the prepared remarks, the most challenging battery to make is a smartphone battery, because it has high demands on energy density. It has high demands on how fast you can charge. It has high demands on cycle life, how long it has to go. There are high demands on storage and different operating temperatures because phones get used in the cold and hot and so on. We always felt when we target a market like that, a lot of the other markets will be much easier to address. Very similar to when I was at Qualcomm, you know, we used to make Snapdragon that went into all the smartphones.

Speaker Change: And break down that revenue profile. Thank you.

Speaker Change: Yes so.

Speaker Change: Let me, let me talk about the strategy before I talk about the revenue profile. So you know as I mentioned in the prepared remarks that the most challenging battery to make it a smartphone battery.

Speaker Change: Because it has high demands on energy density It has high demands and how fast you can charge does high demand and cycle life. How long it has to go that high demands in storage in different operating temperatures because once you get used in the cold and hot and so on.

Raj Talluri: There's high demands on storage and different operating temperatures because phones get used in the cold and hot and so on. We always felt when we target a market like that, a lot of the other markets would be much easier to address. Very similar to when I was at Qualcomm, you know, we used to make Snapdragon that went into all the smartphones. We were then able to sell Snapdragon processors when I was running that division into handheld computers, into thermostats, into, you know, vacuum cleaners and many, many different opportunities. So a similar strategy here, we're aiming at the cell phone market and we're getting requirements from customers to build this really tough battery.

Speaker Change: My we always felt when we target a market like that.

Lot of the other markets will be much easier to address it very similar to when I was at Qualcomm and we used to make snapdragon that when it all the smartphones. We were then able to sell Snapdragon processors. When I was running that division into handheld computers into Panama staves into I don't know vacuum cleaners in many many different opportunities. So a similar strategy here, we're aiming at.

Raj Talluri: We were then able to sell Snapdragon processors when I was running that division into handheld computers, into thermostats, into, I don't know, vacuum cleaners, and many, many different opportunities. A similar strategy here. We're aiming at the cell phone market, and we're getting requirements from customers to build this really tough battery, and our customers are really helping us with those requirements. As we build out that battery, we're now finding that the requirements in the other markets are actually less stringent, and we can address those much easier. Handheld computers is one such market. Scanners is one such market. AR/VR happened to be a market that we got into. We also want to be really careful not to go into too many markets because each of these market needs a slightly different custom cell, the shape of the cell.

Raj Talluri: And our customers are really helping us with those requirements. As we build out that battery, we're now finding that the requirements in the other markets are actually less stringent and we can address those much easier. So handheld computers is one such market. Scanners is one such market. AR, VR happened to be a market that we got into.

Speaker Change: I'll phone market and we're getting requirements of our customers to build is really tough battery and our customers are really helping us with those requirements as we build out that battery. We're now finding that the requirements in the other markets are actually less stringent and we can address those much them easier. So handheld computers is one such market.

Raj Talluri: We also want to be really careful not to go into too many markets because each of these markets needs a slightly different custom cell, the shape of the cell. You know, our factory in Malaysia right now, as I mentioned, we're making the smartphone battery for our lead customer. Another lead, another smartphone customer right behind that, that we've given samples and they like the results and know that will become next. Meanwhile, we're supporting two AR glass customers with two different size cells. We're also supporting IoT customer that I mentioned last time. And then we have the different product that we're building.

Speaker Change: Scanners as onset market are we are happened to be a market that we go out and do we.

Speaker Change: We also wanted to be really careful not to.

Speaker Change: Go into too many markets because each of these market needs a slightly different customer sell.

Raj Talluri: You know, our factory in Malaysia right now, as I mentioned, we're making the smartphone battery for our lead customer. Another smartphone customer right behind that we've given samples and they like the results and now that'll become next. Meanwhile, we're supporting two AR glass customers with two different size cells. We're also supporting this IoT customer that I mentioned last time. We have the defense product that we're building. The factory is pretty busy and full with all the custom cells we're making. As new opportunities come in, we are looking at opportunities and looking at them, not only in terms of our technology being able to meet them, but the financial returns on making a custom cell. Is the opportunity large enough? Is the margin profile there? Are they big enough? And so on.

Speaker Change: The rush shape of the cell.

Speaker Change: In our factory in Malaysia, right now as I mentioned, they're making the smartphone battery for a lead customer another Leonardo smartphone customer right behind that that we have given samples and they like the results and now that'll become next Meanwhile, we are supporting to a a glass customers with two different size cells. We're also supporting these iot customer that dementia.

Raj Talluri: So the factory is pretty busy and full with all the custom cells we're making. As new opportunities come in, we are looking at opportunities and looking at them, not only in terms of our technology, being able to meet them, but the financial returns on making a custom cell is opportunity large enough? Is the margin profile there? Are they big enough and so on? And that is what is really how we're making this. So really excited by how it's going. And we will only see more and more opportunities for this type technology. And then we just have to be careful in picking the right ones as an early stage company.

Speaker Change: And last time, and then we have a different product that we're building so the factories ready busy and full with all the custom cells, they're making as new opportunities come in the we are looking at opportunities and looking at them.

Speaker Change: Not only in terms of our technology being able to meet them, but the financial returns and making the custom cell is opportunity large enough is the margin profile. There are they big enough and so on and that is what is really how we are making there so really excited by.

Raj Talluri: that is what is really how we are making this. Really excited by how it's going, and we will only see more and more opportunities for this type technology. We just have to be careful in picking the right ones as an early-stage company. We ramp with high volume, most profitable ones first.

Speaker Change: Our how it's going and we will only see more and more opportunities for this type of technology and then we just have to be careful in picking the right ones as an early stage company. So we'll ramp at high volume most profitable ones first.

Ananda Baruah: So we ramp with high volume, most profitable ones first. Thank you. Thank you so much.

George Gianarikas: Thank you.

Operator: Thank you so much. Our next question comes from Ananda Baruah from Loop Capital. Ananda, please unmute your line and ask your question. Thank you.

Speaker Change: Thank you.

Ananda Baruah: Our next question comes from Ananda Baruah from Loop Capital.

Thank you so much. Our next question comes from Ananda Baruah from loop capital and under please mute your line and ask your question. Thank you. Yeah. Thanks, guys for taking the question really appreciate it good to see you guys. Ryan gets a good to meet you I guess on a one way street.

Ananda Baruah: Ananda, please unmute your line and ask your question. Thank you. Yeah, thanks, guys, for taking the question. Really appreciate it. Good to see you guys.

Ananda Baruah: Yeah. Thanks, guys, for taking the question. Really appreciate it. Good to see you guys. Ryan, good to meet you, I guess, on a one-way screen here.

Raj Talluri: Ryan, good to meet you, I guess, on a one-way screen here. Yeah, definitely. I guess, yeah, just, Raj, the first question is, I think, I think you had mentioned earlier in the year, and this may be what you're referring to with the first OEM, you know, sending cells to them this quarter. Is it this June through August timeframe still, the work being done in there, that will then put you guys in position to begin to understand, you know, what the programs with them in 26 could look like, which could then also inform the volumes of 26?

Raj Talluri: Likewise, sir.

Ananda Baruah: Yeah, definitely. I guess, yeah, just Raj, the first question is, I think you had mentioned earlier in the year, and this may be what you were referring to, with the first OEM, you know, sending cells to them this quarter. Is it this June through August timeframe still, the work being done in there that will then put you guys in a position to begin to understand, you know, what the programs with them in 2026 could look like, which could then also inform the volumes of 2026? Is that still a crucial work getting done in that June to August timeframe?

Speaker Change: Yeah definitely I guess, yeah. Just rise. The first question is I think I think you had mentioned.

Speaker Change: Earlier in the year and this may be what you were afraid to fit.

Speaker Change: With the first area yes.

Speaker Change: Sending sells to them this quarter.

Speaker Change: Is it this June to August time frame still are the work being done in there that will then put you guys in a position to begin to understand what.

Speaker Change: What the programs with them in 'twenty six could look like which could then also informed the volumes of 26 of that is that still a crucial crucial work any guy that June to August timeframe exactly.

Raj Talluri: Is that still a crucial, crucial work getting done in that June to August timeframe? Exactly, exactly. And it's on track. As I mentioned earlier in the year, we're on track, and we expect to get samples out in June. One thing I will say is that we do have meetings with them every week. It's not like we said something and we'll go back in June and talk to them. So we've shown them the results. We've given them early sales of where we are. We talked to them about the modifications we are making to the electrochemistry to meet the different requirements, and they give us some feedback back.

Raj Talluri: Exactly. It's on track. As I mentioned earlier here, we are on track, and we expect to get samples out in June.

Speaker Change: Exactly exactly exactly and it's on track as I mentioned earlier, we are on track and we expect to get samples out in June.

Ananda Baruah: Cool.

Raj Talluri: One thing I will say is that we do have meetings with them every week. It's not like we said something, and we'll go back in June and talk to them. We've shown them the results. We've given them early cells of where we are. We talked to them about the modifications we are making to the electrochemistry to meet their different requirements, and they give us some feedback back. It's a really close collaboration with both the cell phone OEMs. In that sense, we have a lot of visibility into how things are going. When we, you know, do meet all the requirements, you know, we feel more confident.

Speaker Change: Oh, I know one thing and one thing I will say is that the.

Speaker Change: We do have meetings with them every week, it's not like we said something and we will go back in June and talk to them. So we've shown them. The result, given them early south of where we are we talk to them about the modifications, we are making to the electrochemistry to meet their different requirements and they gave us some feedback back. So it's really close collaboration with both the cell phone Oems and so in that sense.

Raj Talluri: So it's a really close collaboration with both the cell phone OEMs. And so in that sense, we have a lot of visibility into how things are going. So when we do meet all the requirements, we feel more confident. Again, ultimately, we have to put all of this together in this one particular custom cell that they need, and they have to test it in their phone. And that's when the testing will be complete, and that should happen from June to August and February. You guys got it. And then should we should we develop an expectation that you guys can begin to in the fall, share your initial view on program inclusion, SKU inclusion?

Speaker Change: We have a lot of visibility into how things are going so when we do meet all the requirements. We feel more confident again ultimately we have to put all of this together in this one particular in the past themselves that they need and they have to test it in their phone and that's when the testing will be complete and that should happen from June to August timeframe.

Raj Talluri: Again, ultimately, we have to put all of this together in this one particular, in the custom cell that they need, and they have to test it in their phone, and that's when the testing will be complete. That should happen, you know, from June to August timeframe.

Ananda Baruah: Should we develop an expectation that you guys can begin to, in the fall, share your initial view on SKU inclusion and say, I guess at least, whatever SKU inclusion like sort of volume inclusion or at least volume TAM, you know, given the SKU inclusion, will there be any of that provided in the fall?

Speaker Change: Are you guys got it and then should.

Speaker Change: Should we should we develop an expectation that you guys can begin in the fall scare your initial view on programming clearly still inclusion and so I guess at least.

Raj Talluri: And I guess at least whatever SKU inclusion, like sort of volume inclusion, or at least volume TAM, you know, give them a SKU inclusion? Will there be any of that provided in the fall? I mean, look, ultimately, we can share as much as our customers allow us to share. Because look, as a component supplier, usually when you bring new technology and customers are very careful about about saying what they're using and when. But as and when we get permission from them to share, we'll be happy to share that, right?

Speaker Change: Every SKU in corrugated.

Speaker Change: Sort of volume and solution early volume Tan yoga mosquito and collision will there be any of that provided in the fall.

Raj Talluri: I mean, look, ultimately we can share as much as our customers allow us to share. Because look, as a component supplier, usually when you bring new technology in, customers are very careful about saying what they're using and when. As and when we get permission from them to share, we'll be happy to share that. Right.

Speaker Change: I mean look ultimately we can share as much as our customers allow us to share.

Look as a component supplier, usually when you bring new technology and customers are very careful about about saying, what they're using and when but as and when we get permission from them to share we'll be happy to share that right.

Raj Talluri: Okay, that's great.

Ananda Baruah: Okay, that's great. Then I guess just as a quick follow-up, and I can cede the floor here. The silicon doping, you know, process technique that you had talked about, like how much silicon on the anode are they getting to like sort of at max that you guys have seen?

Raj Talluri: And then, I guess, just as a quick follow up, and I can see before here, the silicon doping, you know, process technique that you had talked about. like, like how much silicon on the anode Are they getting to like sort of at max that you guys have seen? The max we've seen in the market is in the 10% range. Yeah, so it's very small. Got it. And we are using 100% of the material, by the way, just to contrast. Yeah, that's super helpful.

Speaker Change: Okay, that's great and then.

Speaker Change: I guess, just as a quick follow up and I can I can see him the floor here the silicon doping.

Speaker Change: Process technique that you were talking about.

Speaker Change: Like took like how much silicon on the anode.

Speaker Change: Are they getting to like sort of Max that you guys have seen.

Raj Talluri: The max we've seen in the market is in the 10% range.

Ananda Baruah: Mm-hmm.

Raj Talluri: No. Yeah, it's very small.

Speaker Change: The Max you've seen in the market is in the 10% range.

Ananda Baruah: Got it.

Raj Talluri: We are using 100% of the material, by the way, just to contrast.

Speaker Change: Yeah. So it's a very small got it and we are relying 100% of the material by the way just to contrast.

Ananda Baruah: No, that's super helpful. Okay guys, I appreciate it. Thanks so much.

Ananda Baruah: Okay, guys, I appreciate it. Thanks so much.

Speaker Change: Yeah, that's super helpful.

Speaker Change: Okay, guys I appreciate it thanks, everyone.

Derek Soderberg: Thank you so much. We have our next question from Derek Soderberg from Cantor Fitzgerald. Derek, please unmute your line and ask your question. Yeah, hey guys, thanks for taking the questions and my congrats to Ryan on the new position. Wanted to follow up on George's earlier question just around the revenue capacity following the acquisition of the SolarEdge facility. Sounded like 4x the square footage of the 23 acquisition.

Raj Talluri: Thank you.

Operator: Thank you so much. We have our next question from Derek Soderberg from Cantor Fitzgerald. Derek, please unmute your line and ask your question.

Speaker Change: Thank you so much we have our next question from Derek Soderberg from Cantor Fitzgerald.

Derek Soderberg: Yeah. Hey, guys, thanks for taking the questions and my congrats to Ryan on the new position. Wanted to follow up on George's earlier question, just around the revenue capacity, following the acquisition of the Routejade facility. Sounded like 4x the square footage of the 2023 acquisition. Is this an acquisition that maybe takes the Routejade potential revenue from sort of $20 to 30 million to $100 million plus? You know, I understand that some of the electrodes will be used in EX batteries, but can you help us maybe quantify the potential revenue capacity or production capacity expansion with the newly expanded site?

Speaker Change: Nick Please on mute your line and ask your question.

Speaker Change: Yeah, Hey, guys. Thanks for taking the questions and my congrats to Ron on the new position.

Speaker Change: Wanted to follow up on George's earlier question, just around the revenue capacity.

Speaker Change: The acquisition of these orange facility sounded like Forex the square footage of the 23 acquisition.

Raj Talluri: Is this an acquisition that maybe takes the Route Jade potential revenue from sort of 20, 30 million to 100 million plus? And I understand that some of the electrodes will be used in EX batteries, but can you help us maybe quantify the potential revenue capacity or production capacity expansion with the newly expanded site? Yeah, I mean, I, you know, look, I think it's a little too early to exactly comment on that. We do have the space, we have the equipment, but we will we will, you know, capitalize and expand that as a demand for those product materializers.

Speaker Change: Is there some acquisition that maybe takes the rotated potential revenue from sort of 20 30 million to 100 million plus no I understand that some of the electrodes.

Speaker Change: We used an <unk> batteries, but can you help us maybe quantify the potential revenue capacity or production capacity expansion with the newly expanded site.

Raj Talluri: Yeah, I mean, you know, look, I think it's a little too early to exactly comment on that. We do have the space, we have the equipment, but we will, you know, capitalize and expand that as the demand for those products materializes. We do see now a lot of requests coming in, you know, particularly with the whole tariff scenario, that people would like, you know, products from Korea. We see that, like, every day. We have to be careful to pick the right ones. We are in the middle of that. It's probably a little early to comment on that, but I can tell you we are, we think it's a great opportunity that we got these assets.

Speaker Change: Yeah, I mean, I you know look I think it's a little too early.

Speaker Change: Exactly comment that we do have the space, we have the equipment, but we will we will you know.

Raj Talluri: We do see now a lot of requests coming in, you know, particularly with the whole tariff scenario that people would like, you know, products from from Korea. And we, we see that, you know, like, every day, but we have to be careful to pick the right ones. And we are in the middle of that. It's probably a little early to comment on that. But I can tell you, we're, we think it's a great opportunity that we got these assets.

Speaker Change: Capitalize and expand that as the demand for those product materializes, we do see now a lot of requests coming in particularly with the whole tariff scenario.

Speaker Change: That people would like products from from Korea.

Speaker Change: And we see that you know like every day, but we have to be careful to pick the right ones and we are in the middle of that is probably a little early to comment on that but I can tell you where we.

Ryan Benton: Yeah. I will chime in. It's again, I think it is a little too early to quote a number, but it certainly does dramatically increase our capacity. As Raj said in the prepared remarks, it's really about two things. One is ensuring that security of supply in terms of supporting Fab 2 from a coating perspective. We're seeing just this tremendous kind of uptick in terms of opportunities as relates to the local defense opportunities. Without quoting a number, it's certainly a tremendous opportunistic deal, and I give Raj and the team credit for executing on that before I got here. As you can see, it's in the same complex, so it clearly is kind of part of the strategic plan. Kudos to them for getting it done.

Raj Talluri: I will chime in. It's again, I think it is a little too early to quote a number, but it certainly does dramatically increase our capacity. And as Raj said in the prepared remarks, it's really about two things. Guys, that's helpful.

Speaker Change: We think it's a great opportunity that we've got these assets yeah I will chime in it's again I think it is a little too early to quote a number but it certainly does dramatically increase our capacity and as Raj said in the prepared remarks, it's really about two things one is ensuring that surety of supply in terms of supporting fab two from a coding perspective, and we're seeing just is tremendous.

Speaker Change: Uptick in terms of opportunities as it relates to the local defense opportunities so without without quoting a number it certainly its a it was a tremendous opportunists bill and I give roz and the team credit for executing on that before I got here, but as you can see it's in the same complex. So it clearly is kind of part of the part of the straw.

Derek Soderberg: Got it. That's helpful. As my follow-up, for Ajay, wondering if you can share where the HVM line is today in terms of, you know, throughput relative to some of the UPH expectations you've put out in the past. Just wondering, you know, where throughput is at this point, and have you sort of passed the 90% yield throughput yet? Can you just give us an update on how things are progressing?

Ajay Marathe: And then as my follow up for Ajay, wondering if you can share where the HVM line is today in terms of, you know, throughput relative to some of the UPH expectations you've put out in the past. Just wondering, you know, where throughput is at, at this point? And have you sort of passed the 90% yield throughput yet? Can you just give us an update on how things are progressing? Sure. I hope you guys can hear me okay. I'm calling in from Malaysia. No, Fab 2 is progressing really well. We are making a lot of good progress on all fronts.

Speaker Change: <unk> plans, so kudos to them to getting it done.

Speaker Change: Got it that's helpful and then as my follow up for RJ wondering if you can share where the HBM liners today in terms of <unk>.

Speaker Change: Throughput relative to some of the period's expectations, you've put out in the past I'm, just wondering where throughput is out at this point and have you sort of passed the 90% yield throughput yet can you just give us an update on how things are progressing.

Ajay Marathe: Sure. I hope we can, you guys can hear me okay. I'm calling in from Malaysia. No, Fab 2 is progressing really well. We are making a lot of good progress on all fronts. HVM line right now is configured for the custom cell, as Raj alluded to, the custom cell for the first customer. I'm talking about, you know, changing over the tooling, getting the first pipe cleaners through and, you know, starting the production, you know, for the cells that we are going to turn it over or hand over to the first customer. That's all going really well. Yields are progressing.

Speaker Change: Sure.

Speaker Change: But.

Speaker Change: I Hope you can you guys can hear me, okay, I'm, calling in from Malaysia.

Speaker Change: Two is progressing.

Speaker Change: Progressing really well.

Ajay Marathe: HVM line right now is configured for the custom cell, as Raj alluded to, the custom cell for the first customer. And I'm talking about, changing over the tooling, getting the first pipe cleaners through and starting the production for the cells that we are going to turn it over or hand over to the first customer. So that's all going really well. Yields are progressing. We have made a lot of good improvements on yields and definitely stand by our original statement that we made that we will be up on the yields as a ramp, a production ramp really begins to the world-class levels.

Speaker Change: We're making good progress on all fronts.

Speaker Change: So it's we have a line right now.

Speaker Change: Yes.

Speaker Change: Figure for the custom so as Raj alluded to the cost of sales for the first customer.

Speaker Change: And I'm talking about changing over the tooling.

Speaker Change: Getting the first flight dreamers through and starting their production.

Speaker Change: Yeah for the sales that we are going to turn it over and.

Speaker Change: And over to the customer so that's all going really well yields are progressing we have made a lot.

Ajay Marathe: We have made a lot of good improvements on yields, and definitely stand by our original statement that we made that we will be up on the yields as the production ramp really begins to the world-class levels. That's all going on track. Yeah, simultaneously, we are also working on other form factors for ARVR, as Raj also talked about. The UPH, I would say is, like I said, you know, the front end of the line, which is really the laser dicing farm, we are making sure that that process comes along well. The line itself is bought off at 1,350 UPH, as you know, for SAD. Everything seems to be on track.

Speaker Change: A lot of good improvements on yields.

Speaker Change: Definitely standby or regional Street remember, we made that we will be on the yields.

Raj Talluri: So that's all going on track. Yeah. And simultaneously, we are also working on other form factors for ARVR as Raj also talked about. And the UPH, I would say is, like I said, the front end of the line, which is really the farm, the laser dicing farm. We are making sure that that process comes along well. The line itself is bought off at 1350 UPH, as you know, for SAT. So everything seems to be on track. You know, that's what I can share right now from here from Malaysia.

Speaker Change: The ramp of production ramp really begins to the world class levels. So that's all going on track.

Speaker Change: And.

Speaker Change: Simultaneously. We are also working on other form factors or area as Oh.

Speaker Change: <unk> also talked about in the U P H.

Speaker Change: I would say is like I said.

Speaker Change: Yeah.

Speaker Change: The front end of the line, which is really the firm the laser dicing firm Youre right, making sure that process comes along well. The line is itself who borrow for 30 50, you'll be edge as you know, whereas they do.

Ajay Marathe: You know, you know, that's what I can share right now from here, from Malaysia.

Speaker Change: So everything seems to be on track yeah.

Raj Talluri: I mean, George, one other comment I'll make, sorry, Derek, is that right now, we're making many, many products in the same fab. So we have small cells. We have three different kind of small cells. We have an army cell. We have a big cell that we're making an HVM line. So right now, we are really focused on executing on all these programs to get samples to our customers. Nothing we've seen here makes us concerned that when we're at high volume production, we can't get to the yields that we wanted to. But we don't need to run them at that speed right now, because mostly we're making samples.

Raj Talluri: I mean, George, one other comment I'll make, you know, sorry, Derek, is that right now we are making many products in the same fab. We have small cells. We have, you know, 3 different kind of small cells. We have an AR/VR cell. We have a big cell that we're making an HVM line. Right now we are really focused on executing on all these programs to get samples to our customers. Nothing we've seen here makes us concerned that when we're at high volume production, we can't get to the yields that we want to do. We don't need to run them at that speed right now because mostly we're making samples.

Speaker Change: That's what I can share right now from here for Malaysia.

Speaker Change: And then one other comment I'll make.

Speaker Change: I'm sorry, Derek is that.

Speaker Change: We are right now we're making many many products in the same fab. So we have small cells.

Speaker Change: Three different kind of small cells, we have an army salary of a big seller it make natrium line.

Speaker Change: So right now we're really focused on executing on all of these programs to get samples to our customers.

Speaker Change: Nothing we've seen here makes us concerned that when we're in high volume production, we can't get to the yields that we want to do but.

Derek Soderberg: That's helpful. Thanks, guys. Thank you so much.

Derek Soderberg: That's helpful. Thanks, guys.

Speaker Change: We don't need to run them at that speed right now because most of you are making samples.

Speaker Change: That's helpful. Thanks, guys.

Operator: Thank you so much. Our next question comes from William Peterson from JPMorgan. William, please unmute your line and ask your question. Thank you.

Bill Peterson: Our next question comes from Bill Peterson from J.P. Morgan.

Bill Peterson: Bill, please unmute your line and ask your question. Thank you. Yeah, hi. Good afternoon. And thanks for taking the questions. And also, thanks for the details on the competition.

Speaker Change: Thank you say much. Our next question comes from Bill Peterson from Jpmorgan they'll please Amit your line and ask your question. Thank you.

William Peterson: Yeah. Hi, good afternoon, and thanks for taking the questions and also thanks for the details on the competition. I guess, for completeness, on these sort of leading-edge, you know, competitive cells, are these in the 800 watt-hour per liter range? We've also been getting sort of questions on cycle life, and I know you're, you know, looking at receiving 1000. I'm seeing some competitors or, you know, maybe even closer to 1500. I guess how do you know, just to benchmark where the current leading edge is, how do they compare in terms of cycle life? And also maybe some of these other factors you talked about, things like temperature window, fast charging, and so forth.

Bill Peterson: Yeah. Hi, good afternoon, and thanks for taking the questions and also thanks for the details on the competition. I guess, for completeness, on these sort of leading-edge, you know, competitive cells, are these in the 800 watt-hour per liter range? We've also been getting sort of questions on cycle life, and I know you're, you know, looking at receiving 1000. I'm seeing some competitors or, you know, maybe even closer to 1500. I guess how do you know, just to benchmark where the current leading edge is, how do they compare in terms of cycle life? And also maybe some of these other factors you talked about, things like temperature window, fast charging, and so forth.

Speaker Change: Yes, hi, good afternoon, and thanks for taking the questions and also thanks for the details on the competition I guess for completeness.

Raj Talluri: I guess for completeness on these sort of leading edge competitive cells, are these in the 800 watt hour per liter range? We've also been getting sort of questions on cycle life. And I know you're looking at, you know, achieving 1000. I'm seeing some competitors or, you know, maybe even closer to 1500, but I guess how to, you know, just to benchmark where the current leading edge is, how do they compare in terms of cycle life? And also maybe some of these other factors you talked about things like temperature window, fast charging and so forth.

Speaker Change: On these sort of leading edge competitive cells or these are the 800 watt hour per liter range and we've also been getting sort of questions on cycle life and I know you're looking at you know receiving 1000 I've seen some competitors or maybe even closer to 500, but I guess, how did you know just a benchmark where the current leading edges how do they.

Speaker Change: Compare in terms of cycle life and also maybe some of these other factors you talked about things like temperature window fast charging and so forth.

Raj Talluri: Yeah, you know, I, you know, I get this question from this call, usually, and, and, and, you know, the, the nuance of this is kind of very important. So like, for example, when you talk about cycle life, A phone discharges a battery at different rates, right? So for example, if the phone is on standby, it's probably drawing at 0.1C or 0.2C charge. But when you run a full game, it goes at like 0.7C charge maybe. So cycle life varies based on how you charge. So it's hard to quote cycle life as one number. So what most customers do is they have a profile of how their phones actually operate, and they come up with a metric on a charge profile and a discharge profile, and they benchmark the cycle life based on that.

Raj Talluri: Yeah. You know, I get this question from this call usually. The nuance of this is kind of very important. Like, for example, when you talk about cycle life, a phone discharges a battery at different rates, right? For example, if the phone is on standby, it's probably drawing, you know, at 0.1C or at 0.2C charge. When you know, run a full game, it goes at like 0.7C charge maybe. Cycle life varies based on how you charge. It's hard to quote cycle life as one number.

Speaker Change: Yeah, I you know I I get this question from this call, usually and and and.

Speaker Change: You know that.

Speaker Change: The nuance of this is kind of very important so like for example, when you talk about cycle life.

Speaker Change: Our phone discharging the battery at different rates right. So for example at the phone is on standby is probably drawing wind one seer I'd point to see charge, but when you run a full game. It goes that like buying seven surcharge, maybe so cyclist varies based on how you charge. So it's hard to call. It cycle life is one number.

Raj Talluri: What most customers do is they have a profile of how their phones actually operate, and they come up with a metric on a charge profile and a discharge profile, and they benchmark a cycle life based on that. What I mean by that is you could take a particular phone and say this battery is 1,000 cycles. You could take another phone, the exact same battery may only run to like 600, 700 cycles, depends on how they use, right? It's not a simple one number metric, it's a very customer dependent metric. But what I can tell you is that, we feel our battery is extremely competitive and that's why, the trade-off of cycle life versus energy density versus fast charge is what our customers feel pretty good about where we are.

Speaker Change: So what most customers do is they have a profile of how their phones actually operate and they come up with a metric on a charged profile and a discharge profile and the benchmark of cycle is based on that so what I mean by that is.

Raj Talluri: So what I mean by that is you could take a particular phone and say this battery is 1,000 cycles, you can take another phone, the exact same battery may only run to like 600, 700 cycles, depends on how they use, right? So it's not a simple one number metric, it's a very customer dependent metric.

Speaker Change: You could take a particular phone instead is batteries thousand cycles, you can take another phone.

Speaker Change: The exact same bedroom you only run to like 600 700 cycles depends on how they use right. So it's not a simple one number metric its a very customer dependent metric.

Raj Talluri: But what I can tell you is that we feel our battery is extremely competitive, and that's why the trade-off of cycle life versus energy density versus fast charge is what our customers feel pretty good about where we are. And we are continuing to improve on all three of them as we move forward. So it's hard to answer yours with one number because it's not very meaningful. Depends on phone to phone, customer to customer.

Speaker Change: But what I can tell you is that we feel are batteries extremely competitive and that's why.

Speaker Change: Played off cycle. What's this energy density versus fast charge is is what our customers feel pretty good about where we are and we are in continued improvement all three for all three of them as we move forward. So it's hard to answer yours with one number because it's not.

Raj Talluri: We continue to improve on all three of them as we move forward. It's hard to answer yours with one number because it's not very meaningful, you know. Depends on phone to phone, customer to customer.

Raj Talluri: Okay, but what about at least in terms of energy density, just so we understand like where you're coming from? Yeah, clearly. I mean, we are in that. We're in that. They're all in the 800 plus range. So absolutely. We're extremely competitive with all of them. Okay.

William Peterson: Okay. What about at least in terms of energy density? So we understand like where you're coming from.

Bill Peterson: Okay. What about at least in terms of energy density? So we understand like where you're coming from.

Speaker Change: Very meaningful you know depends on foreign to foreign customer to customer.

Speaker Change: Okay, but what about at least in terms of energy density and it just so we understand where you're coming from.

Raj Talluri: Yeah, clearly. I mean, we are in that. They're all in the 800+ range, so absolutely. We are extremely competitive with all of them.

Speaker Change: Clearly I mean, we are in that within that they're all in the 800 plus range. So absolutely we're extremely competitive with all of them.

William Peterson: Okay. As a follow-up, wanted to talk about your defense pipeline. You know, you've been talking about it a bit more even with the older Routejade acquisition. Are there additional orders forming in 2025? It looks like your additional capacity can support that, you know, defense opportunities. Can you break down the interest you have by geography? I presume you could be getting more in the US as for the reasons you said. Just around the opportunity itself, maybe I think maybe two years back, the US military alone was around $350 million. Maybe updated thoughts on your opportunity.

Bill Peterson: Okay. As a follow-up, wanted to talk about your defense pipeline. You know, you've been talking about it a bit more even with the older Routejade acquisition. Are there additional orders forming in 2025? It looks like your additional capacity can support that, you know, defense opportunities. Can you break down the interest you have by geography? I presume you could be getting more in the US as for the reasons you said. Just around the opportunity itself, maybe I think maybe two years back, the US military alone was around $350 million. Maybe updated thoughts on your opportunity.

Raj Talluri: And then as a follow up, I wanted to talk about your defense pipeline. You know, you've been talking about it a bit more, even with the older RootShade acquisition. But are there additional orders forming in 2025? And it looks like your additional capacity can support that defense opportunities. Can you break down the interest you have by geography? I presume you could be getting more in the U.S. for the reasons you said, but maybe just around the opportunity itself. I think maybe two years back, the U.S. military alone was around $350 million. So maybe update your thoughts on your opportunity.

Speaker Change: And then as a follow up wanted to talk about your defense pipeline, you've been talking about it a bit more even with the older Reshade acquisition, but are there additional orders forming in 2025 and it looks like your additional capacity can support that.

Speaker Change: Fence opportunities can.

Speaker Change: Can you break down the interest you have by geography, I presume you you could be getting more in the U S. For the reasons, you said, but I just and maybe just around the opportunity itself I think maybe two years back the U S. Military alone was around $350 million. So maybe I'll take your thoughts on your opportunity.

Raj Talluri: Yeah, we are getting a lot of interest because of the, you know, as you can imagine, the entire scenario. And but again, we've started shipping samples to the customer. So we've got sample purchase orders. And, and this takes time, because once they get the sample purchase orders, they tested it, they like the performance, then they all want a custom spell that is very specific to that. And so the orders will take some time after the qualification period. That's just the nature of batteries. But we are getting more and more requests for samples, and we are shipping them now.

Raj Talluri: Yeah. We are getting a lot of interest because of the you know, as you can imagine, the entire tariff scenario. We’ve started shipping samples to the customers, so we’ve got sample purchase orders. This takes time because once they get the sample purchase orders, they tested it, they like the performance, then they all want a custom cell that is very specific to that. The orders will take some time after the qualification period. That's just the nature of batteries. We are getting more and more requests for samples, and we are shipping them now. Like you mentioned, the total opportunity is pretty big, so we are fairly optimistic that once we get these samples to pass qual, it'll be meaningful for us in time.

Speaker Change: Yeah, we were getting a lot of interest because of the as you can imagine the entire tariff scenario.

Speaker Change: And but again, we have started shipping samples to the customer. So we've got sample batches, others and and this takes time because once they get a sample batches orders they tested it. They liked the performance then that is they all want accustom smell that is very specific to that and so they will take some time after the qualification period, that's just the nature of the battery.

Raj Talluri: And like you mentioned, the total opportunity is pretty big. So we are fairly optimistic that once we get these samples to pass Qual, it'll be meaningful for us in time.

Speaker Change: But we are getting more and more requests for samples and we are shipping them now.

Speaker Change: And like you mentioned that total opportunity is pretty big so we're fairly optimistic that once we.

Raj Talluri: Thanks, guys.

William Peterson: Thanks, Raj.

Bill Peterson: Thanks, Raj.

Speaker Change: Get the samples to past quarters, it'll be meaningful for us in time.

Gus Richard: Thank you. Our next question comes from Gus Richard from Northland Capital Markets. Gus, please unmute your line and ask your question. Thank you. for taking my question. I'm just curious on the solar edge acquisition, you know, is there anything running through the factory at this point? Or was it idle? And sort of what is it going to take to get it up and running? And how long? Yeah, it's it's it's making cells for defense applications. And it is also making some cells for ESS applications. So it's a working factory. And, you know, we were able to acquire some people that are running the factory also along with it.

Operator: Thank you. Our next question comes from Gus Richard from Northland Capital Markets. Gus, please unmute your line and ask your question. Thank you.

Raj Laurie: Thanks Raj.

Speaker Change: Thank you. Our next question comes from Gus Richard from Northland Capital market. Please mute your line and ask your question. Thank you.

Gus Richard: Thanks for taking my question. I'm just curious on the Routejade acquisition, you know, is there anything running through the factory at this point or was it idle? Sort of, what is it gonna take to get it up and running and how long?

Gus Richard: Thanks for taking my question I'm, just curious on the sole ridge acquisition was there anything running through the factory at this point or was it idle and sort of what is it going to take to get it up and running and how long.

Raj Talluri: Yeah. It's making cells for defense applications, and it is also making some cells for ESS applications. It's a working factory, and you know, we were able to acquire some people that are running the factory also along with it, and there's a coating line that also we got. It's a working factory, and you know, we're just augmenting to our capacity.

Gus Richard: Yeah, it's a it's a it's making cells for defense applications and.

Gus Richard: It is also making themselves.

Raj Talluri: And there's a coating line that also got so it's a working factory. And, you know, we're just augmenting to our capacity. Right.

Speaker Change: E S. S applications, so I'd say working factory.

Speaker Change: And we were able to acquire some people that are running the factory also along with it and Theres a coating line that obviously it got so I'd say working factory and.

Gus Richard: Great. Then could you just walk through, sort of the milestones in front of you in terms of getting to, you know, out of fab two, you know, shipping production to customers. You know, what milestones do you have to hit for your, you know, lead customer, for example? Where are you in that, you know, milestones?

Raj Talluri: And then could you just walk through sort of the milestones in front of you in terms of getting to, you know, out of fab two? you know, shipping production to customers, you know, what what milestones you have to hit for your, you know, lead customer, for example, where are you in that, you know, milestones? cycle life test, they do storage gassing test, all that stuff goes through between June and August timeframe. And then we'll get some feedback on if, you know, that all goes well. Then when we get the purchase order for the next one, on the ARVR glasses, we've actually sent the samples and the customers have put them in the glasses now.

Speaker Change: We just augmenting our capacity.

Speaker Change: Great and then could you just walk through.

Speaker Change: Sort of the milestones in front of you in terms of getting to.

Speaker Change: Out of Fab two.

Speaker Change: Shifting production to customers what milestones you have to hit for your lead customer for example, where are you on that.

Raj Talluri: Yeah, sure. There's multiple customers we're supporting from Fab 2, right? As I mentioned, there's two AR/VR customers. There's an IoT customer we are supporting, which actually is a large volume opportunity. Then there's defense products that we are making there and the smartphone, which is a big cell that we're making on HVM line. We have sent samples to one of the AR/VR customers last quarter, and we are just getting ready to send to the second one. We of course have given samples to, you know, multiple smartphone customers. All our energy is now focused on making this one particular large cell, 7,000-plus milliamp-hour cell, to our lead smartphone customer.

Speaker Change: Milestones.

Speaker Change: Yeah sure. So there's multiple customers who are supporting from fab two rate days as I mentioned this to air where customers Theres, an Iot customer we are supporting which actually is a large volume opportunity and then the defense products that we're making there and the smartphone which is a big sell that we're making in the swim lane.

Speaker Change: So we have some we have sent samples to one or two of their one of their customers last quarter and we are just getting ready to send to the second one.

Speaker Change: And we of course given samples do you now have multiple smartphone customers. All our energy is now focused on making this one particular large sell 7000, plus nearly amp ourself.

Raj Talluri: Those samples, the milestone you should look for is us delivering those samples in June timeframe. The next milestone is, you know, passing their qualification inside their phone because they do a lot of tests. You know, they do drop tests, they do short circuit tests, they do energy density tests, they do cycle life tests, they do storage gassing tests. All that stuff goes through between June and August time frame, and then we'll get some feedback on if, you know, that all goes well, then when we get the purchase order for the next one. On the AR/VR glasses, we've actually sent the samples, and the customers have put them in the glasses now, and we can see now how that's going, and they're giving us feedback on that.

Speaker Change: Two our lead smartphone customer and those samples.

Speaker Change: Milestone you should look what is as delivered and go samples in June timeframe.

Speaker Change: And the next milestone is.

Speaker Change: Passing their qualification inside their phone because they do a lot of test and my dad, who dropped as they lose szostak you test there do energy density tests that Youre cycle life test there are storage gassing tests all of that stuff goes through between between.

Speaker Change: Between June and August timeframe, and then we'll get some feedback on.

Speaker Change: That all goes well.

Speaker Change: Then when we get the purchase order for the next one on the air Weird classes, we've actually send the samples and the customers have put them in the glasses now and we can see now how that's going and they're giving us feedback on that.

Raj Talluri: And we can see now how that's going. And they're giving us feedback on that. So milestones from Fab2 are basically delivering customer samples, getting the feedback from the customers, optimizing it, getting ready for full production. That's what you'll see us report on through the year.

Raj Talluri: Milestones from Fab 2 are basically delivering customer samples, getting the feedback from the customers, optimizing it, getting ready for full production. That's what you'll see us report on through the year.

Speaker Change: So milestones from fab, two or basically delivering customer samples getting the feedback from our customers optimizing it getting ready for full production. That's what you'll see is reported through the year.

Operator: Jonathan, thanks so much.

Gus Richard: Got it. Thanks so much.

Ananda Baruah: Thank you. Our next question comes from Ananda Baruah from Loop Capital. Ananda, please unmute your line and ask your question. Hey, thanks, guys, for taking the follow up. Hey, Raj, can you remind us where PC quals again fall in in the timeline and and like I guess yeah I'll start there when the PC quals fall in the timeline I'll probably have to follow up on that thanks. Yeah, you know, PCs take even longer than smartphones to call, you know, ironically, it's just a just a longer call process. But, you know, like I said, we are just so busy with our current factory so full with all these products.

Operator: Thank you. Our next question comes from Ananda Baruah from Loop Capital. Ananda, please unmute your line and ask your question.

Speaker Change: Got it thanks, so much.

Speaker Change: Thank you. Our next question comes from Ananda Baruah from loop capital and then the police and the airline and ask your question.

Ananda Baruah: Hey, thanks guys for taking the follow-up. Hey, Raj, can you remind us where PC quals again fall in the timeline, and like, I guess, yeah, I'll start there. When do PC quals will fall in the timeline? I'll probably have to follow up on that. Thanks.

Speaker Change: Hey, Yeah. Thanks, guys for taking the follow up Hey, Raj can you remind us.

Speaker Change: We're P. C calls again fall and are in the timeline and and like I guess, yeah I'll start there when the P. C classes following timeline I'll, probably ask a follow up on that stage.

Raj Talluri: Yeah. You know, PCs take even longer than smartphones to qual, you know, ironically. It's just a longer qual process. You know, like I said, we are just so busy with our current factory, so full with all these products, we feel. Once we get the smartphone qualification underway, we should be able to give those cells, you know, that size cells, with that chemistry to the PC OEM.

Speaker Change: Yeah, you know Pcs take even longer than smartphones to call.

Speaker Change: Ironically is just a just a longer call process.

Raj Talluri: We feel we will, once we get the smartphone qualification underway, we should be able to give that cells, you know, that size cells with that chemistry to the PC OEM. And like I said, the smartphones are the toughest batteries to make. So to me, once we make that, you know, there are some nuances to the PC ones about temperature and cycle life and stuff like that. We can adjust on top of that with some of the electrochemistry. But those are the cells we'll start with.

Speaker Change: But.

Speaker Change: Like I said were just so busy with our current factory so full with all these products be.

Speaker Change: We feel we will once we get the SaaS smartphone qualification underway, we should be able to give that sells that size cells with that chemistry to the PC OEM and like I said the smartphones are the toughest batteries to make so to me once we make that.

Ananda Baruah: Mm-hmm.

Raj Talluri: Like I said, the smartphones are the toughest batteries to make. To me, once we make that, you know, there are some nuances to the PC ones about temperature, cycle life, and stuff like that, we can adjust on top of that with some of the electrochemistry. Those are the cells we'll start with, but they'll take another 18 months from there. PC quals just take longer.

Speaker Change: Some nuances to the PC once about temperature and cycle life and stuff like that we can I just on top of that with some of that a program history, but those ourselves we'll start with but they will take another 18 months from their physical I'll just take longer.

Raj Talluri: But they'll take another 18 months from their PC calls just take longer. I got it. So, and Raj, when you when you say Take the smartphone calls and sort of the jump off spot, the launchpad for the PC calls, would that be these first two OEM calls that you're talking about? And so at some point, so is it at some point, I'm not trying to pin you down, but just to visualize it, some point by let's say, mid 26, you can start that 18 month clock. Is that a good way to think about it, Ajay?

Ananda Baruah: I got it. Raj, when you say, "Take the smartphone quals as sort of the jump off spot, the launchpad for the PC quals," would that be these first two OEM quals that you're talking about? At some poi-

Raj Laurie: Got it so and Raj we need when you say.

Raj Laurie: Take the smart phone calls.

Raj Laurie: And sort of the jump off spot launch pad for the PC clause, but that these first two OEM, causing you're talking about and so it's an important show us at some point.

Raj Talluri: That's right.

Ananda Baruah: Is it at some point, I'm not trying to pin you down, but just to visualize it, some point by, let's say mid 2026, you can start that 18-month clock? Is that a good way to think about it or is it? Sorry about the background noise guys.

Raj Laurie: And I'm not sure I'll opinion down, but just to visualize at some point by let's say mid 26, you can start at 18 month clock is that a good way to think about it go ahead, sorry about that.

Raj Talluri: Sorry about that. Yeah, so there's multiple stages of call, right? So our plan is these samples that we're giving to our smartphone customers, you know, there'll be a variation of that, we'll give it to the PC customers. They will start testing it, they'll give us some feedback. And just like it happened on smartphones, they'll give us some nuances that they like, they store it a little longer, they store it at a slightly higher temperature, you know, they want cycle left to be a little more or less, you know, the fast charge, maybe not that much of a requirement for them, because these are plugged on.

Raj Talluri: There's multiple stages of qual, right? Our plan is these samples that we're giving to our smartphone customers, you know, there'll be variation of that we'll give it to the PC customers. They will start testing it, they'll give us some feedback. Just like it happened on smartphones, they'll give us some nuances that they like. They store it a little longer, they store it a slightly higher temperature. You know, they want cycle life to be a little more or less. You know, the fast charge may be not that much of a requirement for them 'cause these are plugged on. We'll need to make some adjustments to the electrolytes and so on, and then give them the right cell, and then they start, you know, the qual. That's just how it moves, right?

Speaker Change: There's multiple stages of call rights. So our plan is these samples that we're giving to our smartphone customers there'll be a variation of that we'll give it to the PC customers. They will start testing it they'll give us some feedback and just like it happened on smartphones. They will give us some nuances that they like distorted a little longer distorted a slightly higher temperature.

Raj Laurie: They want cycle left or a little more or less.

Raj Talluri: So we'll need to make some adjustments to the electrolytes and so on, and then give them the right cell. And then they start, you know, the call, that's just how it moves, right? That's how it goes. Very similar to how it has moved on a smartphone. Got it. Okay, great. Thanks a lot. Appreciate that.

Speaker Change: The fast charge, maybe not that much of a requirement for them.

Speaker Change: <unk> done so we'll need to make some adjustments to the electrolyte and so on and then give them the right cell and then they start the call. That's just how it moves right. That's how good it is similar to how it is more on the smartphone side.

Ananda Baruah: That's how it goes.

Raj Talluri: Very similar to how it has moved on the smartphone side.

Ananda Baruah: Got it. Okay, great. Thanks a lot. Appreciate that.

Ryan Finkst: Thank you so much.

Operator: Thank you so much. Our next question comes from Ryan Pfingst at B. Riley. Ryan, please unmute your line and ask your question. Thank you.

Speaker Change: Got it okay, great. Thanks, a lot I appreciate that.

Raj Talluri: Our next question comes from Ryan Finkst at B Riley. Ryan, please unmute your line and ask your question. Thank you. Yeah, hey, guys, thanks for the time. I just wanted to jump in with one on the EV opportunity. You know, in the release, you comment on the major charge time improvement by leading battery supplier in Asia and validating your cooling architecture. Can you just dig in a bit there and provide a little more color? Yeah, we we looked at that, that announcement. And what we find is that, you know, it's just another proof point that, yes, you can charge them really fast.

Speaker Change: Thank you say much. Our next question comes from Ryan thinks at B Riley Ryan. Please Amit your line and ask your question. Thank you.

Ryan Pfingst: Yeah. Hey, guys. Thanks for the time. I just wanted to jump in with one on the EV opportunity. You know, in the release you comment on the major charge time improvement by a leading battery supplier in Asia and validating your cooling architecture. Can you just dig in a bit there and provide a little more color?

Ryan Benton: Yeah, Hey, guys. Thanks for the time.

Speaker Change: I just wanted to jump in with one on the <unk> opportunity.

Speaker Change: In the release you comment on the major charge time improvement by a leading battery supplier in Asia and validating your cooling architecture can you just dig in a bit there and provide a little more color.

Raj Talluri: Yeah. We looked at that announcement, and what we find is that, you know, it's just another proof point that yes, you can charge them really fast, but if you look at that announcement, the temperature does go up fast and the ED is at stake. Materials are more expensive to do such a thing. Whereas if we did the similar stuff in our architecture, whereas the conventional architecture, we can get to similar rates, but provide the advantages of not swelling and provide the advantages of not getting so hot. Just another proof point of the value of our technology and even in the EV space. We are making progress on that front.

Speaker Change: Yeah. We are we looked at that that announcement and what we find is that.

Raj Talluri: But if you look at that announcement, the temperature does go up fast, and the ED is at stake. So materials are more expensive to do such a thing.

Speaker Change: It's just another proof point that.

Speaker Change: Yes, you can charge them really fast, but if you look at that announcement the temperature does go up fast and E D.

Raj Talluri: So whereas, if we did the similar stuff in our conventional, in our architecture, where the conventional architecture, we can get to similar rates, but provide the advantages of, of not swelling and provide the advantages of not getting so hot. So just another proof point of the value of our technology. And even in the EV space, and we are making progress on that front. And as I, as you guys know, we have two EV customers that are working with us. And we're in the middle of, you know, making samples for that. Also from our Malaysia factory.

Speaker Change: At stake so materials are more expensive to do such a thing so it whereas if we did a similar stuff in our conventional in architecture, where the conventional architecture, we can get to similar.

Speaker Change: Red, but provide the advantages of our of not swelling and provide the advantages of not getting so hot so it's just another proof point of the value of our technology and even in the EV space and we're making progress on that front you know as I. As you guys know we have two customers that are working with us and we're in the middle of the.

Raj Talluri: You know, as you guys know, we have two EV customers that are working with us and we are in the middle of, you know, making samples for that. Also from our Malaysia factory now, we have a large dry room there that we build this now and so on. Stay tuned for updates on that. It just validates our argument that, you know, fast charge and not getting hot are the key requirements in EV space, and that's what we focused on.

Raj Talluri: Now we have a large dry room there, that we build this now and so on. So stay tuned for updates on that. It just validates our proof for our, our argument that, you know, fast charge and not getting hot are the key requirements in EV space. And that's what we focus. Understood. Appreciate it. Thank you so much.

Speaker Change: Making samples for that also from our Malaysia factory now we have a larger dry room. There that rebuild is now and so on so stay tuned for updates on that it just validates our proof of our our argument that fab.

Ryan Pfingst: Understood. Appreciate it.

Speaker Change: Fast charge and not getting hot at the key requirements Navy space and that's what we're focused on.

Operator: Thank you so much. Our next question comes from Jed Dorsheimer at William Blair. Thank you, Jed. Please unmute your line and ask your question.

Jed Dorsheimer: Our next question comes from Jed Dorsheimer at William Blair. Thank you Jed. Please unmute your line and ask your question. Yeah, absolutely. So you know, there's a there's a kind of a A fundamental difference between how a smart glass works with a smart phone works. What I mean by that is when the smart glass is creating an augmented reality scenario, for example, you're visualizing something. What has to happen is the processor has to run full blast and the display, which is basically this Right? I mean, like most of the phones on standby, most of the time, every so often it comes on, you do a video watching or something like that, but you're not blasting graphics, GPU, video, camera, audio, everything at one time.

Speaker Change: Understood I appreciate it.

Speaker Change: Thank you very much. Our next question comes from Cat door Shiner.

Mark Shooter: Hi, team. It's Mark again, but thank you for the follow-up. For the smart glasses market, in the charts that you provided, you cite a larger performance benefit than even in the smartphones. I'm wondering if you can give us some info of what about the smart glasses application gives an Enovix architecture even more performance advantage. If that is the case, are there any additional margin benefits that could come from that application?

Speaker Change: China William Blair. Thank you Chad Please mute your line and ask you a question.

Speaker Change: Hey, Tim it's Mark again, but thank you for the follow up for the smart glasses market.

Speaker Change: In the in the charts that you provided you cite a larger performance benefit than even in the smartphones I'm wondering if you can give us some info on what about the smart glasses application gifts and notebooks architecture, even more performance advantage and if that is the case are there any additional margin benefits that could come from that.

Raj Talluri: Yeah, absolutely. You know, there's a kind of a fundamental difference between how a smart glass works with a smartphone works. What I mean by that is, when the smart glass is creating an augmented reality scenario, for example, you're visualizing something. What has to happen is the processor has to run full blast and the display, which is basically this, you know, these new displays that have come up, you know, have to run. The cameras are all working because they have to figure out where you're looking because you have to do what is called 6 DOF. You got to calculate the six degrees of freedom of where you're looking to create the projection. So in other words, the memories, the processors, displays are all running full blast to create that user experience.

Speaker Change: Location.

Speaker Change: Yeah, absolutely so there's a there's a kind of up.

Speaker Change: A fundamental difference between how a smart glass works with her smartphone works what I mean by that is when the smart glass is creating.

Speaker Change: And augmented reality scenario for example, you're visualizing something what has to happen is the processor as a run full blast.

Speaker Change: The the display which is basically this.

Speaker Change: These new displays that have come up.

Speaker Change: Have you have to run and then the cameras are all working because they have to figure out where youre looking because you have to do what it's called six dos. So you've got to calculate the six degrees of freedom of where you are looking to create that projection. So in other words the memories the process displaced they're all running full blast to create that user experience that draws tremendous amount of battery.

Raj Talluri: That draws tremendous amount of battery, even a lot more than what will happen in a smartphone. Because in a smartphone, typically, they're all not running at the same time full blast, right? I mean, like most of the phones on standby most of the time, every so often it comes on, you do a video watching or something like that, but you're not blasting graphics, GPU, video, camera, audio, everything at one time. The draw is much higher. The other interesting thing is the space of the battery in a smart glasses is much smaller because it has to fit just in the temple of the glasses or in the back where it is. The amount of energy density you have to pack in a small volume is much higher, and the discharge rate is higher.

Speaker Change: Even a lot more than what will happen in smartphone because in a smartphone typically.

Speaker Change: They're all not running at the same time full blast right I mean like most of the phones on standby most of the time every so often it comes on you do a video watching or something like that but not blasting graphics.

Raj Talluri: So, the draw is much higher and the other interesting thing is the space of the battery in a smart glass is much smaller because it has to fit just in the temple of the of the of the glasses are in the back where it is. So, the amount of energy you have to pack in a small volume is much higher and the discharge rate is higher. Both of those we can do really well in our architecture. That's the reason we're getting all this excitement from our customers for this product. And that's why we have 2 customers that have already prepaid for the, for the volumes.

Speaker Change: Graphics GPU video camera audio of everything at one time, so that drives much higher and the other other interesting thing is the space of the battery and our smart glasses much smaller because it has to fit just in the temple of the of the of the glasses are in the back where it is so the amount of energy density you have to pack and a small.

Raj Talluri: Both of those we can do really well in our architecture. That's the reason we're getting all this, you know, excitement from our customers for this product. That's why we have two customers that have already prepaid for the volumes. It's just a market that takes advantage of our technology much better. We see a few other markets like that. Typically, when there's space constraint, when there's a display, when there's a tremendous amount of draw due to either AI or processor or memory running fast, that's the market where we believe we have most advantage, and that does translate into ASP premiums. We are seeing that in both those markets.

Speaker Change: Volume.

Speaker Change: Is much higher and the discharge that is higher both of those we can do really well and our architecture. That's the reason we're getting all this.

Speaker Change:

Speaker Change: Excitement from our customers about this product and that's why we have two customers that are already prepaid for the for the volumes.

Raj Talluri: So, it's just a market that takes advantage of our technology much better. And we see a few other markets like that.

Operator: So, typically, when there's space constraint, when there's a display, when there's a tremendous amount of draw due to either a processor or memory running fast, that's the market where we believe we have most advantage and that does translate into premiums. And we are seeing that in both those markets. Thank you so much. Just as a reminder, if you would like to ask a question, please use the raise hand feature on your screen. If you have dialed in via phone, please use star 9 to raise your hand and star 6 to unmute yourself. We will pause further to assemble the queue.

Speaker Change: So it's just.

Speaker Change: A market that takes advantage of our technology much better and we see a few other markets like that so typically when their space constraint when theres a display when there's a tremendous amount of draw.

Speaker Change: Due to the AI processor memory running fast that's a market where we believe we are the most advantage and that does that translate into ASP premiums and we are seeing that in both those markets.

Operator: Thank you so much. Just as a reminder, if you would like to ask a question, please use the Raise Hand feature on your screen. If you have dialed in via phone, please use star nine to raise your hand and star six to unmute yourself. We will pause further to assemble the queue. Thank you. We have another question from George Gianarikas from Canaccord. George, please unmute your line and ask your question. Thank you.

Speaker Change: Thank you so much just as a reminder, if you'd like to ask a question. Please use the raise hand feature on your screen. If you have dialed in via phone. Please you star nine to raise your hand.

Speaker Change: And star fixed Amit yourself, we propose further to assemble the queue.

Operator: Thank you. We have another question from George Gianarikas from Canaccord. George, please unmute your line and ask your question. Thank you. Thanks for taking my question. Curious if you could provide any update on the pricing dynamics you're seeing in the market, whether or not they continue to support this this margin target that you laid out a couple years ago. Thank you. Yeah, absolutely. I mean, I, you know, I, we've quoted budgetary pricing, you know, to our smartphone customers, and, and I think clearly, they see the value. And it's been really good. We close the pricing on the you know, the two AR, you know, glasses that I talked about, and those have been clearly validated the ASD premiums we can combine when we provide value.

Speaker Change: Thank you we have.

Speaker Change: Another question from George <unk> from mechanical to judge from the airline and ask your question. Thank you.

George Gianarikas: Thanks for taking my question. Curious if you could provide any update on the pricing dynamics you're seeing in the market, whether or not they continue to support this, you know, this margin target that you laid out a couple of years ago? Thank you.

Speaker Change: Yeah.

George: Thanks for taking my question I'm curious if you could provide any update on the pricing dynamics, you're seeing in the market whether or not they continue to support this.

Raj Talluri: Yeah, absolutely. I mean, you know, we've quoted budgetary pricings, you know, to our smartphone customers, and I think clearly they see the value, and it's been really good. We closed the pricing on the, you know, the two AR, you know, glasses that I talked about, and those have been clearly validated, the ASP premiums we can command when we provide value. I mean, like I said before, right? I think the number one thing you got to remember is that in smartphones, in AR/VR glasses, in all these markets, the price of the battery as a percentage of the BOM is very small, right? So if you look at a smartphone, $1,100 premium tier smartphone, $600 bill of materials, the battery is between $10 and $15, right?

George: This margin target that you laid out a couple of years ago. Thank you.

George: Yeah, absolutely I mean, I you know I, we have recorded budgetary pricings to our smartphone customers and and I think clearly they see the value and it's been really good we closed the pricing on the debt to a our glasses that I talked about and those have been clearly it's about it Ed ASD premiums, we can combine when we provide value.

Raj Talluri: I mean, like I said before, right, I think the number one thing you got to remember is that in smartphones, in AR VR glasses, in all these markets, the price of the battery as a percentage of the bomb is very small, right. So if you look at a smartphone, $1100,000 premium tier smartphone, $600 bit on bill of materials, the battery is between 10 to $15, right. So there's still a long ways to go in terms of percentage of the bomb. But in terms of the value it provides, it unlocks the value of the processor, it unlocks the value of the display, it unlocks the value of the cameras, it unlocks the value of the memory.

George: I mean like I said before right I think the number one thing you got to remember is that.

George: In smartphones in the air we added classes in all these markets the price of the battery as a percentage of the Bom is very small right. So if you look at a smartphone let $100000 premium tier smartphone 600 dollar a bit on bill of materials. The battery is between 10 to $15 eight so there's still a long list to go.

Raj Talluri: There's still a long ways to go in terms of percentage of the BOM. In terms of the value it provides, it unlocks the value of the processor, it unlocks the value of the display, it unlocks the value of the cameras, it unlocks the value of the memory. If you look at smartphone purchases, you know, the number one and number two are like, you know, battery life and the camera. When you provide value, there's clearly ASP premium, and we are seeing that being validated. We are quite comfortable with that.

George: In terms of percentage of the Bom, but in terms of the value. It provides it unlocks the value of the process. It unlocks the value of the display it unlocks the value of the cameras that unlocks the value of the memory and if you look at smart equipment purchases you know the.

Raj Talluri: And if you look at smart purchases, you know, the number one, and number two are like, you know, battery life, and, and the camera. So when you provide value, there's clearly ASD premium, and we are seeing that being validated. So we are quite comfortable with that. Thank you. There are no further questions at this time.

George: Number one.

George: Two are like battery life, and <unk> and the camera. So when you provide value there's clearly SBA premium and we are seeing that being validated so we're quite comfortable with that.

George Gianarikas: Thank you.

Operator: Thank you. There are no further questions at this time. With that, I'd like to turn it back over to Dr. Raj Talluri for closing remarks. Thank you.

Raj Talluri: With that, I'd like to turn it back over to Dr. Raj Talluri for closing remarks. Thank you. Yeah. Thank you again for joining us today. We are very encouraged by the progress we've made, and we are even more excited by what's ahead. Now, we remain focused on execution, deepening our customer relationships, unlocking the full potential of our technology and operations. Now, we really appreciate your support, and we look forward to updating you again next quarter. Thank you.

George: Thank you.

Raj Talluri: Yeah. Thank you again for joining us today. We are very encouraged by the progress we've made, and we are even more excited by what's ahead. Now, we remain focused on execution, deepening our customer relationships, unlocking the full potential of our technology and operations. Now, we really appreciate your continued support, and we look forward to updating you again next quarter. Thank you.

George: Thank you there are no further questions at this time with that I'd like to turn it back over to Dr. Raj to Larry for closing remarks. Thank you yeah. Thank you again for joining US today, we're very encouraged by the progress we've made and we are even more excited by what's ahead now we remain focused on execution deepening our COO.

George: Customer relationships unlocking the full potential of our technology and operations now we really appreciate your continued support and we look forward to updating you again next quarter. Thank you.

George: Okay.

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