Q2 2025 Amprius Technologies Inc Earnings Call

Speaker #3: Good afternoon. Welcome to the Amprius Technologies second quarter 2025 earnings conference call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, President, Tom Stepien, and CFO, Sandra Wallach.

Speaker #3: This time, all participants are in listen-only mode. Calling management's remarks, we will open the call for questions. Please note that this presentation contains forward-looking statements, including but not limited to statements regarding our financial and business performance, our business strategy, future product development or commercialization, new customer adoption, and new applications.

Speaker #3: Our growth and the growth of the markets in which we operate, and the timing and ability of Amprius to expand its manufacturing capacity skills, business and achieve a sustainable cost structure.

Speaker #3: These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amprius's results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements.

Speaker #3: For a more complete discussion of these risks and uncertainties, please refer to Amprius's filings with the Securities and Exchange Commission. Finally, I would like to remind everyone that this conference call is being webcasted, and a recording will be made available for replay on the company's investor relations website at ir.amprius.com.

Speaker #3: In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the investor relations website.

Speaker #3: I'll now turn the call over to Amprius Technologies CEO, Dr. Kang Sun, for his comments. Sir, please proceed.

Speaker #4: What comment, everyone? And a thank ou for joining us this afternoon. And to this call, I will give you an overview of our business and then our present Tom Stepien will recap our Q2 performance.

Speaker #4: And our recent competitions. After that, our CFO, Sandra Wallach, will discuss our financial results for the period. Then I will share some closing remarks before opening the call for questions.

Speaker #4: Let's begin. For those who may be new to our company, I would like to briefly introduce Amprius. Amprius is a pioneer and a leader in the silicon and/or the battery space.

Speaker #4: With over decades of development experience, and a long track record of commercial shipments and customer achievements, at Amprius, we develop, manufacture, and market high-energy density and high-power density silicon anode batteries with applications across all segments of electrical mobility.

Speaker #4: Including aviation, and the latter electrical vehicle industries. Today, Amprius has the most complete commercially available portfolio of silicon anode material systems in the industry.

Speaker #4: And it commands performance leadership with its combination of the battery, energy density, power density, charging time, operating temperature range, and safety. Across our battery portfolio, we believe that we offer unmatched performance among the commercially available batteries.

Speaker #4: Amprius has been delivering commercial batteries to the market with up to 450-hour packages and 1150-hour per liter. 10C power capability. And extreme fast charge rates of 0 to 80 percent day of charge in approximately six minutes.

Speaker #4: The ability to operate in a white temperature range of minus 30 degrees Celsius up to 55 degrees Celsius. And a safety design features that enable us to pass the United States military's benchmark nail penetration test.

Speaker #4: Each of these performance parameters is critically important to real-world electrical mobility applications. Not only do our battery empower certain drones, satellites, and vehicles to maximize performance, but they also enable our customer to achieve their economic targets as well.

Speaker #4: In addition, Amprius has developed a 500-hour package and a 1300-hour per liter battery platform that has been validated by an independent third party. With our belief that there are no other commercial batteries on the market that can perform at these levels today.

Speaker #4: In the second quarter, Amprius continued to demonstrate technological innovation and drive business growth. We believe we are successfully executing our strategy to transform electrical mobility with our game changing performance.

Speaker #4: With that overview complete, I will now turn the call over to our President, Tom Stepien, to recap the highlights from our record quarter. Tom?

Speaker #5: Thank you, Kang. In the second quarter, we built on our momentum from the start of the year and we believe we have improved in all key business areas.

Speaker #5: Specifically, we released compelling new products, engaged with additional customers, and continued to expand our operations. Let's start with product updates. Innovative technologies and breakthrough product performance are the foundations of Amprius's business.

Speaker #5: Since debuting our Sitecore product platform in January 2024, we have relentlessly pushed the limits of lithium-ion performance. This April, we introduced SA102, the first Sitecore cell to reach 450 watt-hours per kilogram, a record-setting energy density 73% higher than the typical 260 watt-hours per kilogram of conventional batteries used in electric vehicles and power tools.

Speaker #5: Built around a high-capacity silicon anode, this is where the SA prefix comes from, and about the size of a standard teabag, SA102 is produced on our California pilot line and is already winning strong customer praise for the significant endurance boost it gives mission-critical unmanned autonomous vehicles commonly referred to as drones.

Speaker #5: With global drone demand accelerating, SA102 cements Amprius's position at the forefront of this market. In order to deliver Sitecore samples to our ustomers quickly and expedite their qualification process, we've expanded production at our pilot line in Fremont, California.

Speaker #5: As prospective customers move through the qualification process and request high-volume orders, we then deliver through our existing contract manufacturing partners. So far, in 2025, we have shipped the cells to several industry-leading global drone companies.

Speaker #5: In May, we announced that Alto, a subsidiary of Airbus, said a new record for their loitering drone which flew for 67 days without interruption.

Speaker #5: Alto's Zephyr is a solar-powered loitering vehicle that operates around 70,000 feet, approximately twice the altitude of commercial airplanes. During daylight, solar powers the motors and channels surplus energy to charge Amprius cells.

Speaker #5: At night, Zephyr draws stored energy to remain aloft. Our high-capacity silicon anode batteries deliver dependable overnight power enabling continuous flight for more than two months and stand as a critical pillar of the mission's success.

Speaker #5: During Q2, we added dozens of new customers. We recently announced that Amprius was selected by Amazon to participate in their inaugural cohort as a part of the Amazon Devices Climate Tech Accelerator.

Speaker #5: This program supports companies developing technologies that could help reduce the carbon footprint of Amazon's devices and operations. This is a recent development, and this selection provides us with a valuable opportunity to engage with Amazon's technical and sustainability teams that work on millions of devices worldwide.

Speaker #5: We are excited about the opportunity to explore how our cells could provide more efficient energy solutions in their industrial, consumer electronics, and mobility-focused platforms.

Speaker #5: In Q2, we shipped batteries to 93 customers. 43 of whom are new to the Amprius platform. The remaining 50 are repeat customers, including several of our long-time strategic partners, such as Alto Airbus, BAE Systems, and the US Army.

Speaker #5: Thanks to our breakthrough energy performance and ample production capability, we attracted new customers and generated 26.4 million in revenue during the first half of this year, already surpassing our full-year 2024 total of 24.2 million.

Speaker #5: Q2 revenue totaled 15.1 million, a 34% increase from the first quarter, and up 350% from Q2 2024. This strong growth was primarily driven by a greater than 450% increase in Sitecore shipments over Q2 2024.

Speaker #5: Sitecore is a proprietary silicon anode that uses standard lithium-ion processing equipment and is gross margin positive enabling us to report positive gross margin for the first time.

Speaker #5: Sandra will provide more context here when she reviews our financial highlights next. In Q2, we diversified our customer base: 86% of our revenue came from outside the United States on a ship-to basis.

Speaker #5: An increase from 60% in Q2 2024. Customer diversification helped enable steady growth and a generally uncertain domestic and international macroeconomic environment. In Q2, over 90% of our revenue came from the aviation sector, driven by an increase and ongoing strength in the drone market.

Speaker #5: We are enjoying increased market adoption and a more favorable policy stance from the US government that creates new opportunities for innovation and deployment. The remainder of our Q2 revenue was primarily derived from the light electric vehicle sector, which remains healthy but has a lumpier profile due to our customers' varying product introduction cycles.

Speaker #5: The LEV market tends to have short design end cycles, and we believe our drop in replacement batteries can help us succeed in gaining market share in this growing market.

Speaker #5: To support customer demand, we are seen in our core markets. We have continued to work closely with our current contract manufacturers. We are also opportunistically sourcing additional partners to provide us with greater geographic diversification and operating flexibility.

Speaker #5: In May, we announced a contract manufacturing agreement with a leading battery manufacturer in South Korea, this new partnership expands our physical manufacturing footprint and allows us to serve additional customers with specific geographic supply chain requirements.

Speaker #5: The facility is currently ramping and is expected to produce Amprius cells shortly. We are off to a rapid start in Q3. As we announced in July, we initiated shipping cells to customers from our Fremont, California pilot line for testing.

Speaker #5: So far, five customers have received the new Sitecore cells. Our pilot line allows us to rapidly develop and prototype new batteries quickly and to deliver them to key strategic customers who have specific design requirements.

Speaker #5: We are seeing an increase in demand for drone technologies. Following the June 2025 US executive order promoting domestic drone manufacturing, and the July Department of Defense directive prioritizing US-made drones for procurement, US Secretary of Defense Hegseth wrote that small drones "resemble munitions more than high-end airplanes; they should be cheap, rapidly replaceable, and categorized as consumables." We expect these policy actions will accelerate adoption timelines and open new opportunities across both the defense and commercial sectors.

Speaker #5: Amprius has operated in this sector for seven years, and we believe we enjoy a first-mover advantage. Here is one specific example. AV, formerly known as Aerial Environment, is a designer and manufacturer of small drones used by the US military.

Speaker #5: This quarter, we delivered sample cells as part of the XTAC Prime US Army Grant Program. These cells extended state-of-the-art performance, clocking in with an average energy density of 517 watt-hours per kilogram.

Speaker #5: Higher energy density delivers tremendous customer value, notably longer flight time, and/or additional payloads. In summary, the first half of 2025 has been strong, and now our focus is on maintaining that momentum through consistent execution in the second half.

Speaker #5: I'll now turn over the call to our CFO, Sandra Wallach, to review our financial results.

Speaker #6: Thank you, Tom. I would now like to spend a ew minutes covering some key financial updates. As a reminder, our detailed financials can be found in our shareholder letter.

Speaker #6: As previously noted, we ended the second quarter with 15.1 million in total revenue. Our total revenue is a combination of our main revenue streams, product revenue, as well as development services and grant revenue.

Speaker #6: This quarter, product revenue contributed 14.5 million to total revenue, representing a 3.6 million or a 32% increase sequentially. Product revenue in Q2 2024 was 3.3 million, so Q2 2025 marks a 335% or 11.2 million year-over-year increase.

Speaker #6: Our development services and grant revenue totaled 0.5 million this quarter, representing a 0.2 million increase sequentially, and up from zero year-over-year. As we've discussed in the past, development services and grant revenue from large development programs are non-recurring in nature, leading to greater fluctuations depending on the comparison period.

Speaker #6: The overall increase in revenue this quarter was primarily driven by the addition of new customers. As Tom mentioned, we shipped to 93 customers in the second quarter, of these only two individually accounted for greater than 10% of revenue, in Q2, a decrease from three customers that individually accounted for greater than 10% of revenue in both the first quarter 2025 and the second quarter of 2024.

Speaker #6: Going forward, we plan to continue adding to our customer mix to diversify our revenue streams and provide more reliable product shipments as we get to a position of scale.

Speaker #6: Our total for remaining performance obligations was 29.1 million at the end of Q2 2025, up 57% from the same quarter last year, and down sequentially as Q1 2025 included a 15 million dollar purchase order from a drone OEM.

Speaker #6: Now, moving to our profitability metrics, gross margin was positive 9% for the quarter, compared to negative 21% in Q1 of 2025 and negative 195% in the prior year quarter.

Speaker #6: As a reminder, we will continue to experience a degree of gross margin variation as our product and services revenue mix fluctuates going forward. Now, on to our operating expense management.

Speaker #6: Our operating expenses for the second quarter continued to be lean at 8.2 million, an increase of 0.8 million or 12%, compared with Q1 2025 and an increase of 1.8 million or 27% from the prior year period.

Speaker #6: The sequential and year-over-year increase in OpEx was driven by increased investment in sales and the reallocation of R&D from cost of revenue as development services agreements run off.

Speaker #6: Our GAAP net loss for the second quarter was 6.4 million or negative 5 cents per share, with 121.8 million weighted average number of shares outstanding.

Speaker #6: In Q1 2025, our net loss was 9.4 million or negative 8 cents per share, with 118 million weighted average number of shares outstanding. Our Q2 2024 net loss was 12.5 million or negative 13 cents per share, with 97 million weighted average number of shares outstanding.

Speaker #6: As of June 30th, 2025, there were 97 full-time employees, up from 95 at the end of the first quarter, primarily based in our Fremont, California location.

Speaker #6: Our share-based compensation for the second quarter was 1.9 million, relatively flat with Q1 2025 and the prior year period. As of June 30, we had 125.1 million shares outstanding, which was up 4.5 million from the prior quarter.

Speaker #6: The change includes approximately 1.3 million shares issued from option exercises and RSU vesting, as well as 3.2 million shares issued under our ATM program.

Speaker #6: Now, turning to balance sheet, we exited the second quarter with 54.2 million in cash and no debt. Key drivers for cash in the quarter included 4.3 million used in operating cash flow, which was lower than our average projected run rate of approximately 2.5 to 3 million monthly.

Speaker #6: Excluding transaction-related cost, the main cause of variation this quarter is related to the improvement in our net loss. 0.7 million used in investing activities related to our Fremont, California facility, we also had 10.8 million in cash inflow from financing activities, consisting of 9.8 million from the issuance of common stock under our at-market sales agreement, and 1 million of proceeds from option exercises.

Speaker #6: We still have approximately 46.7 million left on the facility, as of June 30, 2025. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward.

Speaker #7: Before I turn the call back over to Kang, I would like to take a moment to discuss our CapEx outlook for the remainder of 2025.

Speaker #7: We have made the decision to strategically invest and diversifying our supply chain and expanding manufacturing capability within our Fremont facility to include electrode manufacturing.

Speaker #7: We're doing this in collaboration with the US government, defense innovation unit, and have secured a contract for 10.5 million awarded in July 2025. As we previously stated, regarding the Colorado facility, the designs for this project are effectively complete, and we are continuing to monitor the larger industry dynamics associated with building a factory in the United States.

Speaker #7: Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations including the timing and availability of funding will influence our decision on the next steps and timing.

Speaker #7: We have secured adequate capacity for the foreseeable future through our contract manufacturing network, and plan to further expand that without deploying additional capital. That concludes my financial discussion and I will now pass the call back to Kang.

Speaker #4: Thanks, Sandra. As we look ahead, our strategy and the focus that we may unchanged, Amprius needs to come meet us with delivering the next generation of lithium-ion batteries today.

Speaker #4: We believe our technology is already reaching the bar in real-world applications by providing unmatched performance and solving meaningful problems for our customers. We are continuing to execute against our product roadmap, with new innovations that extend our lead in the battery space.

Speaker #4: While building global manufacturing scale to meet the significant and the growing demand. Through our capitalized contract manufacturing model, we have assets to over 1.8 gigawatt-hours of capacity.

Speaker #4: Positioning us to fulfill more customer demand that we expect to generate this year. We continue to see strong momentum in customer engagement. Our priority remains moving more of this engagement from evaluation to full platform integration for mass production.

Speaker #4: With hundreds of customer shipped to over the past six quarters, both new and the repeat business, we believe we are building a powerful base of long-term relationships.

Speaker #4: Tom Stepien, who joined as our president in May, has proven to be exceptional at supercharging our customer engagement. His leadership will accelerate our go-to-market efforts and drive deeper penetration.

Speaker #4: In fast-moving markets, we serve. Look ahead, we believe Amprius is well positioned for sustainable growth and long-term success. Support of our core pillars.

Speaker #4: First, our industry-leading technology and the product. Our silicon anode battery is outperforming traditional lithium-ion battery solutions. In real-world applications, second, our gigawatt-scale manufacturing capability through our capital efficient contract manufacturing model allows us to scale quickly.

Speaker #4: Third, we benefit from extensive customer engagement, including both new and repeat business from our partners. And fourth, we maintain strong financial health. We have a dedicated cash reserve, low burn rate, low debt, and added flexibility through our at-the-market sales agreement.

Speaker #4: We are excited about the future ahead. And I invite you to meet with us as we attend several upcoming investor conferences. We'll participating in the events hosted by Oppenheimer.

Speaker #4: With them, Gateway, and HC Wingwright, all over the next few weeks. Thank you for your continued interest and support of Amprius Technologies. With that, I will turn it back to the operator for questions.

Speaker #3: Thank ou. At this time, we'll open line for questions from the company's publishing research analysts. The company requests that each participant limit their comments to one question and one follow-up.

Speaker #3: To ask a question at this time, you may press star one. Now, for our first question, which will come from the line of Colin Rush with Oppenheimer.

Speaker #3: Please proceed with our estion.

Speaker #8: Thanks so much, guys. You know, obviously, you've been qualifying with, you ow, a large number of customers here over the last six quarters, as you mentioned, Kang.

Speaker #8: and, and certainly, you ow, talking about it kind of a 12 to 24 month, process for qualification, suggests that you're, ou're reaching, you know, you know, near closure with a number of customers to, to start moving into production.

Speaker #8: can you just k about, you know, that process and, and how we should ink about revenue inflection and your ability to support those customers as they move into, you know, production volumes?

Speaker #4: Yeah. let me give ou, a high-level, a high-level, report that I'm ishing, getting taken care of. We have, as you see, we have built a huge customer pipelines and we have various customers, at different development stages.

Speaker #4: So, Q2 is the demonstration of the, transformation from the qualification stage to the revenue stage. Yeah, Q3, we anticipate that we have more, customers who are, will move from the qualification stage to the revenue, purchasing order stage.

Speaker #4: And we want to give some, even more detail to call it.

Speaker #3: Yeah, Colin, thanks for the estions. We have, as we say, 320 somewhat customers. What we're really focused on is going deeper. we describe these as different layers.

Speaker #3: There's some, some companies we've been working with where we are seeing tens of thousands of batteries any given order. there's others that are earlier, that's part of why we invested, and are building other pilot line here to continue that.

Speaker #3: and as Kang mentioned, there's an ongoing and growing, process here, but that's how we think winning the designs and then helping our customers achieve, success, which can only help us.

Speaker #8: Thanks so much, guys. And then, you know, Sandra, on the cial side, you know, you have a pretty impressive, you know, shift into, you know, positive gross margins here in the quarter.

Speaker #8: you know, I'm curious how you guys are thinking about, you know, your cash needs, and the potential for gross margin expansion from here as you, as you scale revenue.

Speaker #9: Colin, so, as we've ioned, Sitecore has been gross margin positive since day one. And since that is the driver of the revenue growth, we expect that we're going continue to see over time, favorable movement in our gross margins, to continue to get more positive.

Speaker #9: It may be a little bit lumpy. There are some, you know, we're still too small to, to say we're at a steady state for sure.

Speaker #9: but the growth is primarily coming from Sitecore, and that's all, greater than the average gross margin. So we should continue to see that to, see that grow.

Speaker #9: Regarding the cash, again, with the 54 million, cash, no debt, and, 47,000,000 left on the, at-market sales agreement, we're in the seven and a half to nine million dollars of operating cash burn a arter, and so I think we've got a nice long runway.

Speaker #8: Great. anks so much, you guys.

Speaker #3: Our next question comes from the of Mark Shooter with William Blair. Please proceed with your estion.

Speaker #10: Hi, team. Congrats on another strong quarter. you mentioned in the shareholder letter, pickup in the drone customer engagement. Could ou give us some more color on the nature of those conversations, how they're celerating, and could ou also frame the opportunity for us maybe in a dollar content of batteries, per drone, or maybe market size?

Speaker #11: Yeah. Maybe I can start that out. This is Tom. So, Mark, thanks for the estion. So, we serve loitering drones group one, group two, and a ittle bit of group three drones.

Speaker #11: There's a taxonomy. those smaller drones tend to be battery operated. Group four and group five tend to be the larger, engines as opposed to motors.

Speaker #11: And we did talk, in the call, as you heard, about enabling tremendous value with Alto by being able to stay aloft for 67 days.

Speaker #11: So, our batteries are incredible force multipliers. Every extra minute in the sky increases target engagement chances. It reduces logistical churn. It helps on the military side.

Speaker #11: Commanders hold more terrain, view, longer terrain view, and reduces cost. It's not just the military, right? We have industrial inspection; think , saving up linemen's dangerous climb up to look at power lines or bridges or utility work.

Speaker #11: we heard about those horrible floods in Texas, drones were helping identify, folks who needed help and, and damage. In agriculture, you can trim pesticide use, have, more efficient spraying.

Speaker #11: You can map. You can seed more efficiently. Walmart and others are using drones to deliver parcels and groceries. So it's, it's pretty amazing what, what's happening here.

Speaker #11: We don't tend to talk about individual customers or orders, we did talk to our friends at McKinsey, the battery insight team believes that drones worldwide is something like a $50 billion market opportunity today.

Speaker #11: If ou take the battery part of that, it's around 10% plus or minus, which gives us a total TAM, for batteries of our type.

Speaker #11: round numbers, four and a half, billion dollars.

Speaker #10: That's great. I really reciate the color there, Tom. considering that, that to go on that, right, the, the batteries, section of, of that TAM, and considering that the battery relatively small cogs line item, can you speak to, you ow, the pricing power that you guys may have, because of the increased energy density and your pricing power over competitors?

Speaker #10: And given the geographical location, what are you willing to, where, what are customers willing to pay up for maybe non-China supply, right, the South Korea capacity or even in the, the Fremont pilot line?

Speaker #11: Yeah. So we provide tremendous value. and for us and our customers, it's about that value. it's not so much about the price. so we have a performance product and, we're able to command a price.

Speaker #11: that, that, that strategy of, having a disruptive technology, that can command a premium in the short term, this probably won't last forever. Building scale and then moving down the cost curve, is a tried and true path.

Speaker #11: And, and that's a path that we're on. The pilot line here, that, that is expanding is all about quick turn. So we can do quick turns, some of our customers are ordering, 100, 200 cells because they just need to test one of validate that, what we tell them is, is real.

Speaker #11: And then as orders come in, we go through our contract manufacturing partners. That's, that's some of the dynamics on the customer side.

Speaker #10: Thank ou, Tom.

Speaker #3: Thank you. The next question is from the line of Chip Moore with Roth MKM. Please proceed with your questions.

Speaker #12: Thanks for taking the estion. and, and congrats on the positive gross margins. I, I wanted to ask on, the light, electric vehicle opportunity. I think you talked about that being somewhat lumpy and, and shorter cycle.

Speaker #12: Any way to help us think about potential contribution there and visibility? what were the, the next few quarters?

Speaker #4: Oh, Chip, for the lighting electrical vehicle, our market primarily in Europe and Asia. Yeah, so, you know, this, this industry is experiencing a revolution.

Speaker #4: Because everything, from the vehicle design to the battery, specification, all change. Yeah, so, we anticipate there quite, quite a large change and give us, very exciting opportunity because this new standard of performance standard requires high energy and high power.

Speaker #4: Now, our batteries are fitting to, you know, we have some customer, present us a very accessible opportunity. those customers from Europe, in Asia, the, the product qualification time is quite short.

Speaker #4: So give us additional opportunity in the near term.

Speaker #12: Good, good to hear, Kang. And, and, and I think I heard ou say earlier, you know, you on Q3, you know, some of those customers that have been going through the qualification stage, you ow, maybe for a little bit longer, are going to be moving , to revenue phase.

Speaker #12: Should we think about revenues, increasing sequentially, is that a fair assumption? Thanks. Well.

Speaker #4: I think that should be the case. Based on, the status of our qualification process.

Speaker #12: Very good. Thanks for the clarification.

Speaker #3: Thank you. Our next question's come from the line of Derek Soderbergh with Cantor itzgerald. Please proceed with your estion.

Speaker #13: Yeah. Hey, everyone. Thanks for taking the estions. can you provide some more detail on that 10 and a half million dollar contract with the US government?

Speaker #13: it looks like the innovation unit, is this for drones or was this the wearable battery program? just wondering if you could ide more detail, what, what sort of led to, to that program, you know, other details like where do you need to build this to do these batteries?

Speaker #13: Need to come from your facility in Fremont or can they, you know, come from Korea? just some more detail on that, that contract would be great.

Speaker #11: Yeah. Maybe I can start that out. This is Tom. So the DIU is about 10 years old. They are an arm of the DOD.

Speaker #11: They have offices here in Silicon Valley. Boston and other, other tech centers. They have three principal responsibilities. To identify high potential technology, like our batteries, to accelerate adoption across the DOD, and to strengthen the national security innovation ecosystems.

Speaker #11: They received about $2 billion in the recent OB3A bill. So what we're doing is building out our pilot line, both in terms of capability. Sandra mentioned that we're adding the electrode manufacturing capability to the front end of a three-part lithium-ion factory.

Speaker #11: As well as increasing the capacity here in Fremont. And the idea is to have batteries that are, NDAA compliant, right? basically think of, countries, that are, are, are NATO countries or, friendly, with us.

Speaker #11: The 10 and a half million dollars is going to cover more than 50% of the overall build-out. We're ating resources and CapEx to deliver to that.

Speaker #11: The pilot line won't be huge, right? It's around 10 megawatt-hours a year. But that's all about getting supplying and qualifying US material and getting mostly drones, to the first part of your estion, all, integrated and designed into our type of technology.

Speaker #11: and then, making it available in NDAA-compliant countries.

Speaker #13: Got, got it. That's helpful. And then just sticking to the DOD stuff, I've seen quite a few comments coming out from the administration, surrounding drones.

Speaker #13: just from, you know, the investor's perspective, what, you know, what's the best way to approach this opportunity for you guys? I know you, you've got potentially, some production capabilities in Colorado if, if you wanted to make those investments.

Speaker #13: you know, do you think this pilot line and then, you know, whatever space you have left in Fremont can sort of handle, this drone opportunity?

Speaker #13: You know, potentially in the US. Like, what, what's the best way approach, you know, this, this commentary that we're hearing out of DOD? That they want a domestic supply, of drones.

Speaker #13: And how, you know, how are you guys going to ond to that?

Speaker #11: Yeah. Derek, good estion. a one-word answer is velocity. we talked about in the recorded call, the two executive orders and Hegseth from about a th ago, about removing some of the friction.

Speaker #11: We heard just a couple of days ago that, transportation secretary, Sean Duffy, and the FAA have, tried to normalize the beyond visual line of sight for drone operations.

Speaker #11: So I ink delivery and other things, agriculture inspection. So that's all velocity, right? As, as these devices become mainstream, and we have more and more of this occurring, we believe that our batteries are differentiators.

Speaker #11: Huge value if you can deliver twice as many packages, or you can do, you know, twice the acreage that you could do with a different battery.

Speaker #11: and that's where we want to play. that's where we can win.

Speaker #13: Got it. Super helpful. Appreciate it.

Speaker #3: Our next question comes from the line of Ryan Finks with the Riley. Please proceed with your estions.

Speaker #14: Hey, 'all. thanks for taking my questions. first, for, for the contract manufacturing agreement and South Korea, can you potentially size the production capacity you now have there or maybe what it looks like relative to the agreements you have in China?

Speaker #4: Yeah. The current video, the capacity of, we just have one contract manufacturing partnership in South Korea at this time. the capacity is adequate for what we ask them to do today.

Speaker #4: This facility is not only exciting for our contract manufacturing partner, but also for the local government. They really see Amprius technology as an enabler to expand their advanced new generation lithium-ion battery manufacturing base in Korea.

Speaker #4: So we are working with them, as a matter of fact, this couple of days I'm working on a plan for the facility expansion.

Speaker #14: Great. Appreciate that. And, and then sticking with the manufacturing side, you noted that you're still sourcing additional partners, just curious what, the main geographies, are that, that you're targeting there for, you know, additional contract manufacturing capacity.

Speaker #4: At this time, you know, the, the best manufacturing skills reside in Korea and China. Okay. The, the other leaders, in battery manufacturing. The two areas, we already have, partnership, and we are strengthening the partnership, extend our capability and capacity.

Speaker #4: In addition that, we're also looking for domestic, partnership as well. You know, there are many, US small-sized battery companies, they have been experiencing very difficult times, so Amprius technology and Amprius market penetration could help this company.

Speaker #4: You know, potentially we can form partnerships in the United States as well.

Speaker #14: Great. Thank you, Kang. I'll turn it back.

Speaker #3: Thank you. The next questions are from the line of Amit Dal with PT Wainwright. Please proceed with your estions.

Speaker #15: Thank you. Good afternoon, yone. congrats on the strong, margin performance this quarter. So, Sandra, just on that front, should we expect margins to remain in the positive territory, but vary a little bit?

Speaker #15: You know, depending on, you ow, sales volume, c. But, you ow, stay in the positive territory for the rest of the year as revenues scale from here?

Speaker #6: Yeah. So that's a, that's a good question. So I think we have crossed over officially at the 15 million dollar revenue per quarter line, to be nicely positive.

Speaker #6: I think we'll see some variation—normal variation—based on which deals are going through each quarter. But we should stay positive and continue to grow that positive gross margin over time.

Our next question is from the line of Ted Jackson with Northland security, please receive your questions.

Thanks very much. Um, I want to keep doodling around on the production side of things. So the South Korean facility is on the cusp of coming online. Um, you've been, you know, making uh, cyclical product uh, in the pilot line at 3? I mean, is there um, a potential for

A step up in revenue when the South Korean partner brings that line into play, and you begin to transfer some of that production amount of free amount to it.

and and and when exactly does that, um, South Korea line turn on is that

A third order phenomena, it's out of 4 quarter. Is that a first quarter? That's my first question, questions next.

That we engage with them about a couple quarters ago. Um, we just finished, uh, because of the we just finished the new tooling of the equipment, another equipment, not all the production line.

It.

Already for the AMP product. So, we just finished that they had a prototype presented to us. I believe we are going to start with the manufacturing.

Uh, for for our customers uh, next month.

so this, uh,

We have a fraction of the customer and like to buy the batteries from a specific region, okay? That's a really that's 1 of the reasons. We

Developed area partnership. Now, in addition to that, you know, South Korea and those automated batteries, they are one of the best.

in the industry.

So, uh,

Interaction with our uh country and manifesting partnership. Tom mentioned earlier, we are going to expand and upgrade our pilot here.

so, uh, our

The manufacturing process here can be delivered to our concrete manufacturing facility, and vice versa. When they develop something unique, we will share it with our team here.

Thank you. Is there a? Is there a chance that as that comes online? That is there? Do you have

Uh, any kind of, you know, income demand that's waiting for that South Korean facility to turn on because they don't want to have the product company.

No, uh, Korean partnership. Uh, the partner that we have in Korea, they can manufacture anything. The Chinese is making okay, for parts sales. Today we have not have a city in Google, sell partnership in Korea but that and we are in the discussion, but whatever, we're meeting in Fremont, meeting in China, meeting in Korea, this should be

um,

The, the, there should be all capable.

Manufacturing, our batteries.

Okay. Um, um, then the next question is, um, you know, the margins improving scour has been a...

A tremendous success for the company. Um, you know, it's driving Revenue growth, it's driving margin. Can you give us, you know, some kind of ballpark mix of the revenue between syore and syax, you know, this period immediately. What was it? You know,

Yeah, Ted we don't break it down. Um we just break it down by product.

But it's fair to say that the majority of our growth um is coming from Psych.

and then with the expansion of the Fremont line, you know, you you commented that, you know, you're going to spend some more money relative to

You know maybe what you know what was in the plan at a quarter or so ago. Um the government's going to provide you you know call at 10 million dollars and then you're going to put the other half. I always think about how this plays out within the financial site. Where we think about the actual capex numbers that we're going to be putting in our models for cash for what is what are those numbers and how does it play out?

So, what we're contributing is really dedicating resources that we have that are working on this important initiative to diversify our supply chain and expand manufacturing within Fremont, along with some funds for equipment and build-out. So, the DIU contract is over the next...

6 quarters is funding, the majority of the effort of this of this project. So our portion is is a fraction of the million dollars.

Okay, but so you would get the money in and then you would spend it. So but I mean, I assume you would still see a pickup with regards to just in your

The cash flow statement for CAPEX, but at the end of the day, it's really just flowing through your financial statements from.

Um, the diu. So you understand what I'm saying, this type of understand how how it it it goes through what to do the model.

yeah, so I think it

Revenue recognition for a contract like this is a little bit tricky. We're still working through the details. Um but the overall uh it it's fair to assume that it's going to come through as revenue and we're going to um show the cash going out in the statement of cash flows.

Mhm. Okay. Um and then my last question, um you know, they're they're offering this to you and helping you out the the there's clearly

A desire by, um, this administration—honestly, even the previous administration—to bring, um, well, battery manufacturing into the U.S. and also just strategic industrial activity into the U.S. Um, I would say that, you know, the fact that you've gotten this funding, you know, shows that you, um, are strategic. Um, is there any discussion or any opportunity for?

You to go into partnership with the government.

To.

Bring.

To fruition the work you've done in Colorado.

Communications with the number of key stakeholders. And 1 of the things that we've, you know, been clear about is that our ability to move forward.

Uh, with the design and the capacity in.

Brighton is really dependent on a number of macro things going on, not the least of, which is tariffs government incentives, supply and demand. Um, at this point, we have more than enough capacity, we would be over a billion dollars in Revenue with the 1.8, gigawatt hours that Kang has already secured for us, and so we've got more than enough capacity to serve the foreseeable future, uh, and we, but we are keeping those lines of communication open. If something does change, that would make it more economically viable to move forward with with Brighton at this time.

Thank you.

At this time, this concludes our question and answer session. If you have any additional questions give me contact and press as investor relations team at IR andres.com.

And now he's going to call back over to Dr. Son for his closing from

Thanks again, everyone for joining us today.

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Thank you for joining us today for the Amprius Technologies, Inc. Q2 2025 earnings conference call. You may now disconnect.