Q1 2026 QuantumScape Corp Earnings Call

April 22, 2026

Speaker #1: Good day and welcome to QuantumScape . S first Quarter 2020 Earnings Conference Call . At this time , all participants are in listen only mode .

Operator: Good day, and welcome to QuantumScape's Q1 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Sam Coltun, QuantumScape's Senior Director, Investor Relations. Please go ahead, sir.

Speaker #1: After the speaker's presentation , there will be a question and answer session . To ask a question . During this session , you will need to press star one one on your telephone .

Speaker #1: If your question has been answered and you'd like to remove yourself from the queue , simply press star one one again . As a reminder , today's program is being recorded .

Speaker #1: And now I'd like to introduce your host for today's program , Sam Kamara QuantumScape Senior Director , Investor Relations . Please go ahead , sir .

Speaker #2: Thank you . Operator Good afternoon , and thank you to everyone for joining QuantumScape first quarter 2020 Earnings call to supplement today's discussion , please go to our Investor Relations website at QuantumScape .

Sam Coltun: Thank you, operator. Good afternoon, and thank you to everyone for joining QuantumScape's Q1 2026 Earnings Call. To supplement today's discussion, please go to our investor relations website at ir.quantumscape.com to view our shareholder letter. Before we begin, I want to call your attention to the safe harbor provision for forward-looking statements that is posted on our website as part of our quarterly update. Forward-looking statements generally relate to future events, future technology progress, or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

Speaker #2: To view our shareholder letter . Before we begin , I want to call your attention to the safe harbor provisions for forward looking statements that is posted on our website as part of our quarterly update Forward looking statements generally relate to future events , future technology progress , or future financial and operating performance .

Speaker #2: Our expectations and beliefs regarding these matters may not materialize Actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected .

Speaker #2: There are risk factors that may cause actual results to differ materially from the content of our forward looking statements , for the reasons that we cite in our shareholder letter .

Sam Coltun: There are risk factors that may cause actual results to differ materially from the content of our forward-looking statements for the reasons that we cite in our shareholder letter, Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape's CEO, Dr. Siva Sivaram, and our CFO, Kevin Hettrich. With that, I'd like to turn the call over to Siva.

Speaker #2: Form 10-K and other SEC filings , including uncertainties posed by the difficulty in predicting future outcomes Joining us today will be QuantumScape CEO , Siva Sivaram , and our CFO , Kevin Hettrich With that , I'd like to turn the call over to Siva .

Speaker #3: Thank you . Sam First , an update on our Eagle line This is our highly automated pilot production line to demonstrate scalable production of our solid state lithium metal battery technology in Q1 , we completed installation of the Eagle Line and commenced startup operations We are producing initial volumes of Sh-sy5y cells , and we have been working to continuously improve all aspects of Eagle Line functionality , such as equipment uptime , line throughput , control systems , and process stability We have been integrating advanced AI models into the Eagle Line we have seen substantive progress on cell quality and reliability .

Siva Sivaram: Thank you, Sam. First, an update on our Eagle Line. This is our highly automated pilot production line to demonstrate scalable production of our solid-state lithium metal battery technology. In Q1, we completed installation of the Eagle Line and commenced start-up operations. We are producing initial volumes of QSE-5 cells, and we have been working to continuously improve all aspects of Eagle Line functionality, such as equipment uptime, line throughput, control systems, and process stability. We've been integrating advanced AI models into the Eagle Line, and we have seen substantive progress on cell quality and reliability. We believe that the increased production capacity of the Eagle Line will help drive a virtuous cycle of higher data volume, more rapid learning cycles, and enhanced quality.

Speaker #3: We believe that the increased production capacity of the Eagle Line will help drive a virtuous cycle of higher data volume, more rapid learning cycles, and enhanced quality. In Q2, we plan to ramp SH-SY5Y cell production to support customer programs across automotive and other applications. Development work for EV applications remains our core focus and our largest source of customer billings.

Siva Sivaram: In Q2, we plan to ramp QSE-5 cell production to support customer programs across automotive and other applications. Development work for EV applications remains our core focus and our largest source of customer billings. We continue to work closely with the Volkswagen Group's PowerCo as we advance through the phases of our automotive commercialization roadmap. The next phase is field testing. Cells from the Eagle Line will be put through a demanding set of real-world test conditions, and that customer feedback will be used to learn and iterate. Beyond our work with Volkswagen, in Q1, we shipped cells to an automotive JDA partner for testing. We continue to work through our two JDAs with top 10 global automotive OEMs to bring our solid-state lithium metal technology into their vehicle programs. In addition, this quarter, we successfully completed our technology evaluation with another top 10 global automotive OEM customer.

Speaker #3: We continue to work closely with the Volkswagen Group's Power core as we advance through the phases of our automotive commercialization roadmap . The next phase is field testing cells from the Eagle Line will be put through a demanding set of real world test conditions , and that customer feedback will be used to learn and iterate Beyond our work with Volkswagen in Q1 , we shipped cells to an automotive .

Speaker #3: JDA partner for testing We continue to work through our two Jada's with top ten global automotive OEMs to bring our solid state lithium metal technology into their vehicle programs In addition , this quarter , we successfully completed our technology evaluation with another top ten Global Automotive OEM customer .

Speaker #3: Their engineers performed hands on testing of our technology and ran competitive benchmarks against other solid state technology approaches . With the success of this effort , we are moving into the next phase of this engagement .

Siva Sivaram: Their engineers performed hands-on testing of our technology and ran competitive benchmarks against other solid-state technology approaches. With the success of this effort, we are moving into the next phase of this engagement, joint development activities with the ultimate goal of deploying QS technology in their automotive and other applications. Next, an update on our QS ecosystem. This is the cornerstone of our capital-light business model. By teaming up with world-class companies across the value chain, we can bring our technology to global scale faster and more efficiently. These alliances are a force multiplier for our commercialization efforts as we distribute our technology knowhow to trusted partners. We continue to work closely with both Murata Manufacturing and Corning on scaling up production of our solid ceramic separator, using our groundbreaking COBRA process to build the global value chain necessary for gigawatt hour scale production of QS technology.

Speaker #3: Joint development activities with ultimate goal of deploying QTS technology in their automotive and other applications . Next . An update on our SHS ecosystem .

Speaker #3: This is the cornerstone of our capital light business model By teaming up with world class companies across the value chain , we can bring our technology to global scale faster and more efficiently These alliances are a force multiplier for our commercialization efforts as we distribute our technology .

Speaker #3: We know how to work with trusted partners. We continue to work closely with both Murata Manufacturing and Corning on scaling up production of our solid ceramic separator using our groundbreaking Cobra process to build the global value chain necessary for gigawatt-hour scale production of cures, technology.

Speaker #3: Our ecosystem partners are also investing in SHS proprietary hardware and systems to produce our ceramic separator . We see this as a clear sign of their commitment to our ecosystem , as well as a source of customer billings .

Siva Sivaram: Our ecosystem partners are also investing in QS proprietary hardware and systems to produce our ceramic separator. We see this as a clear sign of their commitment to our ecosystem, as well as a source of customer billings. In Q1, we recorded our first customer billings from our ecosystem. Next, a word on new markets. We believe our high-performance solid-state design has compelling attributes to address the evolving energy storage needs of AI data centers, where conventional lithium-ion technology faces safety and performance limitations. Driven by massive compute demand, data centers are transitioning to 800-volt DC designs and adopting power systems architecture and technology from the electric vehicle industry. We see this as a natural fit for our no-compromise solid-state battery.

Speaker #3: In Q1 , we recorded our first customer billings from our ecosystem . Next , a word on new markets . We believe our high performance , solid state design has compelling attributes to address the evolving energy storage needs of AI data centers , where conventional lithium ion technology faces safety and performance limitations driven by massive compute demand , data centers are transitioning to 800 volt DC designs and adopting power systems , architecture and technology from the electric vehicle industry We see this as a natural fit for our no compromise solid state battery in RAC energy storage and power delivery is a large and fast growing market , and the higher energy density of our battery technology can enable increased compute density for AI factories .

Siva Sivaram: In-rack energy storage and power delivery is a large and fast-growing market, and the higher energy density of our battery technology can enable increased compute density for AI factories. In addition, we have seen strong customer interest in our battery technology from global players in the military, aerospace, and government sectors. Our battery technology unlocks step change improvements in both energy density and power simultaneously. Combined with the superior safety of our solid state design, this is a highly attractive combination for these advanced applications. Our anode-free architecture also has supply chain benefits for these customers. Conventional lithium-ion batteries require graphite that is almost exclusively sourced from China. In contrast, our battery design is graphite-free, eliminating a major pain point for defense applications. To conclude, I want to take a moment to look at the big picture. The world's energy system is experiencing rapid change.

Speaker #3: In addition, we have seen strong customer interest in our battery technology from global players in the military, aerospace, and government sectors. Our battery technology and labs have achieved step-change improvements in both energy density and power simultaneously, combined with the superior safety of our solid-state design.

Speaker #3: This is a highly attractive combination for these advanced applications. Our anode-free also has supply chain benefits for these customers. Conventional lithium-ion batteries require graphite that is almost exclusively sourced from China.

Speaker #3: In contrast , our battery design is graphite free , eliminating a major pain point for defense applications To conclude , I want to take a moment to look at the big picture .

Speaker #3: The world's energy system is experiencing rapid change The way we produce , store and use energy is undergoing a once in a century transformation from electric vehicles and AI data centers to grid storage drones and aerospace .

Siva Sivaram: The way we produce, store, and use energy is undergoing a once-in-a-century transformation. From electric vehicles and AI data centers to grid storage, drones, and aerospace, the future of the world economy is being built on electrification, electro tech. To give just one example, the speed of change and growth in the AI data center market is breathtaking. The technology of the past is struggling to keep up, and innovations in energy storage are essential to this transformational change. Thanks to our years of careful planning, consistent execution, and constancy of vision, QS is in the middle of this electro tech story. From geopolitical disruptions to the energy system and supply chain risks for critical materials, to the explosive growth of electrification across the world economy, the tailwinds for our technology have never been stronger.

Speaker #3: The future of the world economy is being built on electrification . Electro tech . To give just one example , the speed of change and growth in the AI data Center market is breathtaking .

Speaker #3: The technology of the past is struggling to keep up , and innovations in energy storage are essential to this transformational change Thanks to our years of careful planning , consistent execution , and constancy of vision , SHS is in the middle of this electro tech story from geopolitical disruptions to the energy system and supply chain risks for critical materials , to the explosive growth of electrification across the world economy The tailwinds for our technology have never been stronger We believe we have the differentiated technology , world class team , ecosystem partners and customer relationships to capitalize on this revolution .

Siva Sivaram: We believe we have the differentiated technology, world-class team, ecosystem partners, and customer relationships to capitalize on this revolution. Even as we tackle the challenges still ahead, our dedicated team is motivated by a market opportunity that is global in scale and growing every day. We look forward to updating you on our progress over the months to come. With that, I'll turn things over to Kevin for a word on our financial outlook.

Speaker #3: Even as we tackle the challenges still ahead, our dedicated team is motivated by a market opportunity that is global in scale and growing every day.

Speaker #3: We look forward to updating you on our progress over the months to come. With that, I'll turn things over to Kevin for a word on our financial outlook.

Speaker #2: Thank you Siva .

Kevin Hettrich: Thank you, Siva. GAAP operating expenses and GAAP net loss in Q1 were $109.2 million and $100.8 million, respectively. Adjusted EBITDA loss was $63.2 million in Q1, in line with expectations. For full year 2026, we reiterate our adjusted EBITDA loss guidance of between $250 and $275 million. A table reconciling GAAP net loss and adjusted EBITDA is available in the financial statement at the end of this shareholder letter. Capital expenditures in Q1 were $10 million. Q1 CapEx was primarily composed of final payments related to the Eagle Line. For full year 2026, we reiterate our capital guidance of between $40 and $60 million. Customer billings for Q1 were $11 million, representing a mix of customer development activities and ecosystem partner payments.

Speaker #4: GAAP operating expenses and GAAP net loss in Q1 were 109.2 million and 100.8 million , respectively . Adjusted EBITDA loss was 63.2 million in Q1 , in line with expectations for a full year 2026 .

Speaker #4: We reiterate our adjusted EBITDA loss guidance of between 250 million and 275 million , a table reconciling GAAP net loss and adjusted EBITDA is available in the financial statement .

Speaker #4: At the end of this shareholder letter Capital expenditures in the first quarter were 10 million . Q1 CapEx was primarily composed of final payments related to the Eagle line For full year 2026 , we reiterate our capital guidance of between 40 million and 60 million customer billings for Q1 were 11 million , representing a mix of customer development activities and ecosystem partner payments .

Speaker #4: Customer billings as a metric , represents the total value of all invoices issued by SHS to our customers and partners in the period , regardless of accounting , treatment As a reminder , customer billings may vary from quarter to quarter due to fluctuations in activity .

Kevin Hettrich: Customer billings as a metric represents the total value of all invoices issued by QS to our customers and partners in the period, regardless of accounting treatment. As a reminder, customer billings may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of engagement. Customer billings is a key operational metric meant to give insight into customer activity and future cash inflows. The metric is not a substitute for revenue under US GAAP. We ended Q1 with $904.7 million in liquidity and will remain prudent with our strong balance sheet going forward. As always, we encourage investors to read more on our financial information, business outlook, and risk factors in our quarterly and annual SEC filings on our investor relations website.

Speaker #4: As we progress through various phases of engagement Customer billings is a key operational metric meant to give insight into customer activity and future cash inflows .

Speaker #4: The metric is not a substitute for revenue under US GAAP . We ended Q1 with 904.7 million in liquidity and will prudent with our strong balance sheet going forward .

Speaker #4: As always , we encourage investors to read more on our financial information , business outlook and risk factors in our quarterly and annual SEC filings on our Investor Relations website .

Speaker #2: Thanks, Kevin. We will begin today's Q&A portion with a few questions we've received from investors, or that I believe will interest investors.

Sam Coltun: Thanks, Kevin. We will begin today's Q&A portion with a few questions we have received from investors or that I believe would interest investors. Siva, you've outlined our strategic blueprint and laid out our 2026 goals. With Q1 behind us, can you describe the progress on our core annual goals?

Speaker #2: Teva , you've outlined our strategic blueprint and laid out our 2026 goals . With the first quarter behind us . Can you describe the progress on our core annual goals

Speaker #3: Thank you . Sam . The Eagle line is central to us . We are using the Eagle line to demonstrate scalable production so that our licensing customers can take our technology and scale it up You can measure progress in two ways .

Siva Sivaram: Thank you, Sam. The Eagle Line is central to us. We are using the Eagle Line to demonstrate scalable production so that our licensing customers can take our technology and scale it up. You can measure progress in two ways, the technical side and the commercial side. On the technical side, the Eagle Line is making the expected progress as we ramp up. The team has been doing great work together with PowerCo. The day-to-day is all about getting the details right, equipment uptime, line throughput, control systems, process stability, and so on. The improvements we have made in reliability are enabled by some of our new AI models that take data from our metrology, make determinations about the quality faster, more accurately, and more consistently than a human could possibly do. This enables an accelerated feedback and feed-forward loop, which drives the continuous improvement cycle faster.

Speaker #3: The technical side and the commercial side . On the technical side , the Eagle line is making the expected progress as we ramp up The team has been doing great work together with Powercor The day to day is all about getting the details right Equipment uptime line throughput control systems .

Speaker #3: Process stability and so on. The improvements we have made in reliability are enabled by some of our new AI models that take data from our metrology, make determinations about the quality faster, more accurately, and more consistently than a human could possibly do.

Speaker #3: This enables an accelerated feedback and feed forward loop , which drives the continuous improvement cycle faster We shipped samples in Q1 and in Q2 , we'll be ramping to support more shipments .

Siva Sivaram: We shipped samples in Q1, and in Q2, we'll be ramping to support more shipments. That's the technical side. On the overall commercial side, we have great customer traction across major geographies in the automotive business, Europe, North America, and Japan. We are working closely with VW on field testing in the near term, leading to large-scale production transfer. We have shipped cells to an auto JDA partner, successfully completed a technology evaluation with an additional top 10 automaker. All told, that's four of the top 10 that are well engaged in our auto pipeline. We are seeing our ecosystem business model also gaining momentum. Our ecosystem partners are making investments in hardware and systems to make our technology, which shows their commitment to the opportunity. Not only that, but these investments are beginning to flow through into QS customer billings.

Speaker #3: That's the technical side . On the overall commercial side , we have great customer traction across major geographies in the automotive business Europe , North America and Japan We are working closely with VW on field testing in the near term , leading to large scale production transfer .

Speaker #3: We have shipped cells to an auto JD partner, and successfully completed a technology evaluation with an additional top ten automaker. All told, that's four of the top ten that are well engaged in our auto pipeline.

Speaker #3: We are seeing our ecosystem business model also gaining momentum . Our ecosystem partners are making investments in hardware and systems to make our technology , which shows their commitment to the opportunity .

Speaker #3: Not only that , but these investments are beginning to flow through into QTS customer billings Our work on automotive ecosystem engagements and the higher throughput of the Eagle Line comes together to give us the resources that we need to go after some new markets as well .

Siva Sivaram: Our work on automotive ecosystem engagements and the higher throughput of the Eagle Line comes together to give us the resources that we need to go after some new markets as well.

Speaker #2: Thanks , Siva . On the new markets you've described , what makes the opportunity in AI data centers and defense interesting

Sam Coltun: Thanks, Siva. On the new markets you've described, what makes the opportunity in AI data centers and defense interesting?

Speaker #3: Than we think the opportunity for technology in AI data centers is obvious and compelling It's early days , but right now I would call it a great addition to our automotive portfolio .

Siva Sivaram: Sam, we think the opportunity for our technology in AI data centers is obvious and compelling. It's early days, but right now, I would call it a great addition to our automotive portfolio. It checks all the boxes, the size of spend in the market, the growth, the product market fit, and our ability to create and capture value. The requirements for in-rack power solutions align well with our technology. You need better energy density to increase the compute density of the data center. You need the power performance, charge, and discharge to provide power smoothing for these AI workloads, which from the battery's point of view, is almost like being on a racetrack. Safety really matters for a data center, where operating temperatures are higher and a fire in a GPU rack could easily cost millions in damage and downtime.

Speaker #3: It checks all the boxes The size of spend in the market , the growth , the product market fit , and our ability to create and capture value .

Speaker #3: The requirements for in RAC Power Solutions align well with our technology . You need better energy density to increase the compute density of the data center You need the power performance charge and discharge to provide power smoothing for these AI workloads , which , from the batteries point of view is almost like being on a race track And safety really matters for a data center where operating temperatures are higher and a fire in a GPU rack could easily cost millions in damage and downtime Our differentiated technology allows us to do things traditional lithium ion cannot do better performance with better safety lets you get closer to the system and provide power over the last meter .

Siva Sivaram: Our differentiated technology allows us to do things traditional lithium-ion cannot do. Better performance with better safety lets you get closer to the system and provide power over the last meter. We are staffing up for this opportunity as well as other markets like military, aviation, and space. We have added Ross Niebergall to the board and Dr. Mark Maybury as an advisor to help us with these opportunities, and their expertise and networks are extremely valuable. We are really excited about these new markets and will be shipping samples from Eagle Line to meet the increasing inbound customer interest.

Speaker #3: We are staffing up for this opportunity as well as other markets like military, aviation, and space. We have added Ras to the board and Dr. Mark Mabry as an advisor to help us with these opportunities, and their expertise and networks are extremely valuable.

Speaker #3: We are really excited about these new markets, and we'll be shipping samples from Eagle Line to meet the increasing inbound customer interest.

Speaker #2: Kevin , we reported our first customer billings from Ecosystem Partners this quarter . Can you explain why that milestone matters and what it demonstrates about the longer term economics of our business model ?

Sam Coltun: Kevin, we reported our first customer billing from ecosystem partners this quarter. Can you explain why that milestone matters and what it demonstrates about the longer-term economics of our business model?

Speaker #4: Our first customer , billings from ecosystem Partners are an important milestone for three reasons . First , this is an indicator of ecosystem investment in our technology platform We believe this accumulation of investment by partners is an amplifier that is a strength of our capital light business model Second , these billings are an additional source of cash flow into the company as we transfer equipment , processes and know how that enable our partners to move faster while retaining ownership of the core technology Third , similar to our business model with customers , we plan to earn longer term ecosystem licensing payments and royalties .

Kevin Hettrich: Our first customer billings from ecosystem partners are an important milestone for three reasons. First, this is an indicator of ecosystem investment in our technology platform. We believe this accumulation of investment by partners is an amplifier that is a strength of our capital-light business model. Second, these billings are an additional source of cash flow into the company as we transfer equipment, processes, and know-how that enable our partners to move faster while retaining QS ownership of the core technology. Third, similar to our business model with customers, we plan to earn longer-term ecosystem licensing payments and royalties. We believe these ecosystem payments will be an important driver of shareholder value creation. As a reminder, we define customer billings as the total value of all invoices issued by QS to our customers and ecosystem partners during the period, regardless of accounting treatment.

Speaker #4: We believe these ecosystem payments will be an important driver of shareholder value creation . As a reminder , we define customer billings as the total value of all invoices issued by us to our customers and ecosystem partners during the period , regardless of accounting treatment .

Speaker #4: This is an operational indicator rather than a substitute for GAAP revenue. The amounts and accounting treatment can vary by agreement and by quarter, but taken together, we believe they demonstrate growing external validation of our technology and the flexibility of our business model as we scale.

Kevin Hettrich: This is an operational indicator rather than a substitute for GAAP revenue. The amount and accounting treatment can vary by agreement and by quarter, but taken together, we believe they demonstrate growing external validation of our technology and the flexibility of our business model as we scale.

Speaker #2: Okay , thanks so much , Kevin . We're now ready to begin the live portion of today's call Operator , please open up the line for questions

Sam Coltun: Okay, thanks so much, Kevin. We are now ready to begin the live portion of today's call. Operator, please open up the line for questions.

Speaker #1: Certainly. And our first question for today comes from the line of Winnie Dong from Deutsche Bank. Your question, please.

Operator: Certainly. Our first question for today comes from the line of Winnie Dong from Deutsche Bank. Your question please.

Speaker #5: Hi . Thank you for taking my call . My question . Sorry , I was wondering if you can potentially qualitatively characterize the rent of SHS five production into Q It seems like there's going to be some steep .

Winnie Dong: Hi. Thank you for taking my call, my question, sorry. I was wondering if you can potentially qualitatively characterize the ramp of QSE-5 production in Q2. It seems like there's going to be some steep, I guess, quarter-over-quarter improvement in terms of the output, but I was wondering if you can characterize it for us perhaps qualitatively or even directionally. Thank you.

Speaker #5: I guess quarter over quarter Improvement in terms of the output , but I was wondering if you can characterize it for us Perhaps qualitatively or even directionally .

Speaker #5: Thank you

Siva Sivaram: Winnie, yes. We are beginning the ramp of the Eagle Line in Q2. As you would expect with a highly automated line such as the Eagle Line, once we have installed and started bringing the initial volume of cells, we need to continuously improve the uptime, the throughput, the control systems, the process stability, all of this, to continuously improve. Then there is an ongoing demand for samples from our automotive customers and from these new markets that we are attempting to enter, and these demands pile up. Q2, we begin ramping and we'll continue to go up satisfying these demands through the rest of the year. That gives you a good feel for how fast we are ramping the Eagle Line, Winnie.

Speaker #3: Winnie: Yes, we are beginning the ramp of the Eagle line in Q2. As you would expect with a highly automated line such as the Eagle line.

Speaker #3: Once we have installed and started beginning the initial volume of cells , we need to continuously improve the uptime . The throughput , the control systems , the process stability , all of this to continuously improve .

Speaker #3: And then there is a ongoing demand for samples from our automotive customers and from these new markets that we are attempting to enter .

Speaker #3: And these demands pile up . So Q2 , we begin ramping and will continue to go up satisfying these demands through the rest of the year .

Speaker #3: That gives you a good feel for how fast we are ramping the Eagle Line . Winnie

Winnie Dong: Okay. Got it. Second question is on the expansion to new markets. It seems like you think the cells can really be used for energy storage in a data center. Maybe can you talk about some of the potential investments that you may need to put into this, and then what kind of timeframe we're looking at in terms of launching a potential product for that. Does it need some substantial change in terms of the technology and product, or is it an easy transfer into that market? Thank you.

Speaker #5: Okay . Got it . And then second question is on the expansion to new markets . It seems like you think the sales can really be used for energy storage and data center .

Speaker #5: Maybe . Can you talk about some of the potential investments that you might need to put into this ? And then what kind of time frame we're looking at in terms of , you know , launching a potential product for for that ?

Speaker #5: Is it does it need like some substantial change in terms of the technology and product ? Or is it , you know , an easy sort of like transfer Into that market ?

Siva Sivaram: Yeah, that's a very interesting question, Winnie. Most of the learning from automotive business transfers here. The data center market is going into the 800-volt architecture, and many of the requirements are very similar with respect to energy density, power density, and cycling life, et cetera. However, the most important thing we have to offer in addition is the safety and the no-compromise nature of the product, meaning you don't have to sacrifice performance for safety. You can have the product as close to the compute as possible. This is what we mean by last meter power.

Speaker #5: Thank you .

Speaker #3: Yeah , that's a very interesting question , Winnie . Most of the learning from automotive business transfers here , the data center market is going into the 800 volt architecture .

Speaker #3: And many of the requirements are very similar with respect to energy density and power density and cycling life , etc. however , the most important thing we have to offer in addition is the safety and the no compromise nature of the product , meaning you don't have to sacrifice performance for safety .

Speaker #3: You can have the the the product as close to the compute as possible . This is what we mean by last meter power .

Siva Sivaram: In all of these AI data centers and the AI factories, what you need is to be able to maximize the compute density. The ability of ourselves to be close and deliver high-quality last meter power is what makes us very attractive, and it is a natural transition from the automotive product to the data center product.

Speaker #3: And in all of these AI data centers and AI factories, what you need is to be able to maximize the compute density.

Speaker #3: And so the , the ability of our cells to be close and deliver high quality last mile , last meter power is what makes us very attractive .

Speaker #3: And it is a natural transition from the automotive product to the data center product.

Kevin Hettrich: Winnie, I'm happy to take the capital allocation part of the question. As you know, our strategy is to develop technology platforms that serve multiple markets. The bulk of the investment goes into developing a platform. It's more incremental to tailor a product and to engage customers. Where we see incremental investment opportunities in the best interest of shareholders, of course, we're going to go after them. We're very excited about the new high-value markets that we mentioned in the letter and in our remarks. As a reminder, one of our goals, third, is to expand into high-value markets. Our annual operating plan and the financial guidance, upon which it's based, already contemplate that.

Speaker #4: And I'm happy to take the capital allocation part of the question. As you know, our strategy is to develop technology platforms that serve multiple markets.

Speaker #4: The bulk of the investment goes into developing a platform . It's more incremental to tailor a product and to engaged customers . And where we see incremental investment opportunities in the best interest of shareholders , of course , we're going to go after them .

Speaker #4: We're very excited about the new high value markets that we mentioned in the letter and in our remarks . And as a reminder , one of our goals , number three , is to expand is to expand into high value markets .

Speaker #4: Our annual operating plan and the financial guidance . Upon which it's based are contemplate that . And in today's call , we reiterated our adjusted EBITDA guidance , our CapEx guidance , and we also reiterate that we are tracking to our year over year increase in customer billings .

Kevin Hettrich: In today's call, we reiterated our adjusted EBITDA guidance, our CapEx guidance, and we also reiterate that we are tracking to our year-over-year increase in customer bills, all reiterated on today's call.

Speaker #4: All all reiterated on today's call.

Winnie Dong: Got it. Awesome. Thank you so much for taking my question. Thanks. I'll pass it on.

Speaker #5: Got it Awesome . Thank you so much for for taking my questions . Thanks . I'll pass it on .

Siva Sivaram: Thank you, Winnie.

Speaker #3: Thank you .

Operator: Thank you. Our next question comes from the line of Ben Kallo from Baird. Your question, please.

Speaker #1: And thank you. And our next question comes from the line of Ben Kallo from Baird. Your question, please.

Ben Kallo: Hey, good afternoon. Good evening, guys. Thanks for taking my question, and congrats on the first billings. Just maybe on the last question a little, if you could expand, just would it be similar in a license model, or is it something that you could do under PowerCo with the expanded purview that you guys did a while back?

Speaker #6: Hey . Good afternoon . Good evening guys . Thanks for taking my question . And congrats on the first Billings . Just maybe on the on the last question , if you could expand , just would it be similar in a , a license model , or is it something that you could do under power Co with the expanded purview that you guys did a while back ?

Siva Sivaram: Ben, it's exactly correct. We will be looking at both of those. Initially, the samples will come out of the Eagle Line. Additionally, PowerCo has 5 GWh of capacity reserved for markets outside the automotive, and we will continue to find other opportunities for these markets as well. All of these are, as you said, right in our path of how we want to take it through. The ecosystem also plays a big role. Our ability to ramp the separator production from either Corning or Murata helps with this. We expect to see the same phenomenon happen with our equipment and materials partner, who all will help us with this ramp.

Speaker #3: Ben . It's exactly correct . So we will be looking at both of those . Initially , the samples will come out of the Eagle line .

Speaker #3: Additionally, Power Co has five gigawatt-hours of capacity reserved for markets outside the automotive, and we will continue to find other opportunities for these markets as well.

Speaker #3: And so all of these are , as you said , right in our path of how we want to take it through the ecosystem also plays a big role .

Speaker #3: Our ability to ramp the separated production from either Corning or Murata helps with this . And we expect to see the same phenomena to happen with our equipment and materials partner , who all will help us with this ramp

Ben Kallo: Thank you for that. Just moving on to the other auto OEMs that you're working with, could you just talk about if there is a view on the progression of turning those to a formal licensing partner, from the JDA to the formal licensing partner, like a timeframe or any kind of like, what they're looking for to solidify that relationship? Thank you, guys.

Speaker #6: Is then just thank you for that . Just moving on to the other auto OEMs that you're working with . Could you just talk about kind of what if there is kind of a view on the progression of turning those to a formal licensing partner from a Jada to the formal licensing partner , like a time frame or any kind of like what they're looking for to solidify that relationship .

Speaker #6: And thank you guys .

Siva Sivaram: Yeah. Ben, thank you. Thanks for that question. Yes. Upfront, I want to say four of the top ten auto OEMs in the world are now actively involved with us across the major geographies, North America, Japan, and of course, Europe with Volkswagen. In all cases, we are carefully monitoring the progress from evaluation to joint development, working towards licensing. As you know, Volkswagen is the most advanced in that relationship. The others are well on their way for us to progress towards getting a license with them. All of these, of course, run through the Eagle Line. The Eagle Line makes the difference in our ability to sample and move this process along towards licensing.

Speaker #3: Yeah . Ben , thank you . Thanks for that question . Yes . Upfront . I want to say four of the top ten auto aims in the world are now actively involved with us across the major geographies North America .

Speaker #3: Japan , and of course , Europe with Volkswagen and in all cases , we are carefully going up the progress with evaluation to join development , working towards licensing .

Speaker #3: As you know , Volkswagen is the most advanced in that relationship . The others are well on their way . For us to progress towards getting a license from them .

Speaker #3: And all of these , of course , run through the Eagle line . The Eagle line makes the difference in our ability to sample and move this process along towards licensing

Operator: Thank you. Our next question comes from the line of Mark Schotter from William Blair. Your question, please.

Operator: Thank you. Our next question comes from the line of Mark Shooter from William Blair. Your question, please.

Speaker #1: Thank you. And our next question comes from the line of Mark Shuter from William Blair. Your question, please.

Mark Schotter: Hey, team. Thanks for taking my question. Kevin, it was great to see you at the conference. Congrats on all the progress this quarter and the Eagle Line and the new auto engagement. Regarding the OEMs and the field testing as the next step, my understanding is that you'll need to size up the cell from the QSE-5 to fit into VW's unified cell architecture. Do you still need to do that for field testing with them, or are they now taking the QSE-5 to field test, or is another customer that you're working with leapfrogging VW and beating them to field testing?

Mark Shooter: Hey, team. Thanks for taking my question. Kevin, it was great to see you at the conference. Congrats on all the progress this quarter and the Eagle Line and the new auto engagement. Regarding the OEMs and the field testing as the next step, my understanding is that you'll need to size up the cell from the QSE-5 to fit into VW's unified cell architecture. Do you still need to do that for field testing with them, or are they now taking the QSE-5 to field test, or is another customer that you're working with leapfrogging VW and beating them to field testing?

Speaker #7: Hey , Tim , thanks for taking my question . And , Kevin , it was great to see you at the conference . Congrats on all the progress .

Speaker #7: This this quarter and the Eagle line . And , you know , the new auto engagement . So regarding the the OEMs and the field testing is the next step My understanding is that you'll need to size up the cell from the chassis five to fit into VW unified cell architecture .

Speaker #7: So, do you still need to do that for field testing with them, or are they now taking the SHS-5 to field test, or...

Speaker #7: Or is another customer that you're working with leapfrogging VW and beating them to field testing?

Siva Sivaram: Mark, a very interesting question. Yes, we are field testing with the QSE-5. As we demonstrated with the Ducati bike last year and onwards, they will be field testing. You are absolutely right. VW has the unified cell to work with, and they are working closely with us to design that cell as well. I expect that each one of our OEM customers will want their specific form factors as well. We work with each of them. This is one of the biggest advantages of the licensing business model, is that our separator can handle all these form factors, but they will be working with us on how to ramp on their specific needs.

Speaker #3: Mark . Very interesting question . Yes , we are field testing with the SHS five as we demonstrated with the Ducati bike last year and onwards , they will be field testing , but you are absolutely right .

Speaker #3: VW has the unified cell to work with, and they are working closely with us to design that cell as well. And I expect that each one of our OEM customers will want their specific form factors as well, and we work with each of them.

Speaker #3: This is one of the biggest advantages of the licensing business model—is that our separator can handle all these form factors, but they will be working with us on how to ramp on their specific needs.

Mark Schotter: Great, Siva. Thank you. That's very helpful. Switching to some other markets here, it's very evident where you're trying to go by the people you've added to the board with the former military defense contractors. I'll ask about the potential drone market in aerospace and defense. Your auto sample cell, the QSE-5, has a significant performance advantage for autos. But I'm wondering if there's some juice left, per se, and if you were to redesign that for a drone spec. Because drones, they require a higher specific energy density, but also they don't need as much cycle life. I'm wondering if there's knobs to turn, like separator thickness and cell packaging, where they could give you some torque on some performance improvements.

Mark Shooter: Great, Siva. Thank you. That's very helpful. Switching to some other markets here, it's very evident where you're trying to go by the people you've added to the board with the former military defense contractors. I'll ask about the potential drone market in aerospace and defense. Your auto sample cell, the QSE-5, has a significant performance advantage for autos. But I'm wondering if there's some juice left, per se, and if you were to redesign that for a drone spec. Because drones, they require a higher specific energy density, but also they don't need as much cycle life. I'm wondering if there's knobs to turn, like separator thickness and cell packaging, where they could give you some torque on some performance improvements.

Speaker #7: Great . Thank you . That's very helpful . Switching to some other markets here , it's it's very evident where you're trying to go by the people you've added to the board with the former military defense contractors .

Speaker #7: So , you know , I'll ask about the potential drone market in aerospace and defense . Your your auto sample cell , the SHS five is has a significant performance advantage for autos .

Speaker #7: But I'm wondering if there's some juice left per se and if you were to redesign that for a drone spec because drones , you know , they require higher specific energy density , but also they don't need as much cycle life .

Speaker #7: So I'm wondering if there's knobs to turn like separator thickness and cell packaging where they could give you some talk on some performance improvements .

Siva Sivaram: You are 100% correct, Mark. One of our goals for this year is to go beyond the QSE-5. As we keep repeating, we are just at the start of this S-curve. There are many levers still left to move us up the performance curve. Please allow us to come and show you what we are developing, sometime later this year. They'll be applicable not just to the drone market, but to all other markets as well. We will continue to push the technology frontier for all of this. The separator technology, the ceramic separator, is the key to our cell architecture and its performance. We will continue to evolve on all fronts to make the cells adapted to different applications.

Speaker #3: You had 100% correct . Mark . One of our goals for this year is go beyond QA , C5 . As we keep repeating , we are just at the start of this S curve .

Speaker #3: There are many levers still left to move us up . The performance curve . And please allow us to come and show you what we are developing sometime later this year , and they'll be applicable not just to the drone market , but to all other markets as well .

Speaker #3: So we will continue to push the technology frontier for all of this. The separated technology, the ceramic separator, is the key to our cell's architecture and its performance.

Speaker #3: And we will continue to evolve on all fronts to make the cells adapted to different applications.

Mark Schotter: Appreciate the time. Thank you, Siva.

Mark Shooter: Appreciate the time. Thank you, Siva.

Speaker #7: Appreciate the time. Thank you, Siva.

Operator: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Mark Delaney from Goldman Sachs. Your question, please.

Speaker #1: Thank you. And as a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone.

Speaker #1: Our next question comes from the line of Mark Delaney from Goldman Sachs. Your question, please.

Ayush Ghosh: Hi, good afternoon. You've got Ayush Ghosh on for Mark Delaney. Thank you for taking the questions. On billings, how should we think about the potential increases in billings going forward, considering you recorded the first billings from the ecosystem and also with the new JDA and other non-auto end markets?

Speaker #8: Hi . Good afternoon . You've got Ayush Ghosh on for Mark Delaney . Thank you for taking the questions on Billings . How should we think about the potential increases in Billings going forward .

Speaker #8: You know, considering you recorded the first billings from the ecosystem, and also with the new JDA and other non-auto end markets.

Kevin Hettrich: Ayush, thank you for the question. In fiscal year 2025, we recorded approximately $19.5 million in customer billings. In Q1 2026, on this call, we recorded $11 million in the quarter. If you recall, our guidance is to increase billings year over year, 2026 compared to 2025. We reiterate that guidance today.

Speaker #4: Are you. Thank you for the question. In fiscal year 2025, we recorded approximately $19.5 million in customer billings in Q1 '26.

Speaker #4: On this call , we recorded 11 million in the quarter . If you recall , our guidance is to increase billings year over year 2026 compared to 2025 , and we we reiterate that guidance today

Ayush Ghosh: Got it. Thank you for that. Separately, you also mentioned you transitioned from the technology evaluation to the JDA with the top 10 OEM, and congrats on that. Can you sort of speak on some of the benchmarking tests, what they were and how QS performed, and also what some of the initial feedback was?

Speaker #8: Got it. Thank you for that. And then separately, you also mentioned you transitioned from the technology evaluation to the JDA with the top ten OEM.

Speaker #8: And congrats on that . Can you sort of speak on some of the benchmarking tests , what they were and how QRS performed , and also what some of the initial feedback was ?

Siva Sivaram: Yes, I would love to talk about it. These are hands-on in-lab evaluation by these customer engineers in our pilot facilities. They spend a lot of time working with us, making the cells and measuring them here. They have a lot of experience in solid state in their own labs. Of course, all OEMs kick the tires from around the world. These are top 10 OEMs. They are not novices to this technology, and they get actively involved with this. For us to feel good about moving to the next stage, that makes us feel good and sort of ratifies our own confidence in how far we have been in this differentiated technology.

Speaker #3: Yes , I would love to talk about it . These are hands on in lab evaluation by these customer engineers in our pilot facilities , they spend a lot of time working with us , making the cells and measuring them here , and they have a lot of experience in solid state in their own labs .

Speaker #3: And, of course, all OEMs kick the tires from around the world. And these are top ten OEMs. They are not novices to this technology.

Speaker #3: And they get actively involved with this. And for us to feel good about moving to the next state, that makes us feel good and sort of ratifies our own confidence in how far we have been in this differentiated technology.

Ayush Ghosh: Thank you for the time.

Speaker #8: Thank you for the time

Operator: Thank you. Our next question comes from the line of Laisha Zack from HSBC. Your question, please.

Operator: Thank you. Our next question comes from the line of Laisha Zaack from HSBC. Your question, please.

Speaker #1: Thank you. And our next question comes from the line of Lucia Zack from HR, BBC. Your question, please.

Laisha Zack: Hi, Siva, Kevin, can you hear me?

[Analyst] (HSBC): Hi, Siva, Kevin, can you hear me?

Siva Sivaram: Yes. Hi, Laisha.

Speaker #9: Hi, can you hear me?

Laisha Zack: Hi.

[Analyst] (HSBC): Hi.

Siva Sivaram: How are you?

Speaker #4: Yes. Hi. Hi.

Laisha Zack: How are you? Thanks for taking my question. I just have one really quick on timing. I wanted to know how does going into these new markets change the time frames that you've set for your automotive goals. Are these new possibilities using some of the human capital that you've destined for automotive, and the teams that you have established for automotive, or are you going to start to expand your workforce, your teams, or resources? How does this work? How should we think about it?

[Analyst] (HSBC): How are you? Thanks for taking my question. I just have one really quick on timing. I wanted to know how does going into these new markets change the time frames that you've set for your automotive goals. Are these new possibilities using some of the human capital that you've destined for automotive, and the teams that you have established for automotive, or are you going to start to expand your workforce, your teams, or resources? How does this work? How should we think about it?

Speaker #9: How are you ? Thanks for taking my question . I just have one really quick on timing . I wanted to know how this going into these new markets change the time frames that you said for your automotive goals are there like are these new possibilities using some of the human capital that you destined for automotive ?

Speaker #9: And , you know , the teams that you have established for automotive or are you going to start with your workforce , your teams , your , you know , resources like how , how does this work ?

Speaker #9: How would you—how should we think about it?

Siva Sivaram: Laisha, a great question. The automotive marketplace still remains an important focus for us. We are adding these additional markets to our automotive portfolio. We are adding customers in the automotive marketplace. Four of the top 10 are joining us. It is not like we are taking our eye away from the ball with respect to the automotive marketplace. However, these new, big, growing marketplaces with respect to data centers and different set of spaces are very good fits for our product. As Kevin mentioned earlier, at the start of the year, we had looked at these markets and appropriately sized our resourcing for this as part of our annual operating plan. We are well-resourced and will continue to invest as needed. This is not an either/or. We are looking at both of these opportunities while creating and capturing shareholder value.

Speaker #3: A great question. The automotive marketplace still remains an important focus for us. We are adding these additional markets to our automotive portfolio.

Speaker #3: We are adding customers in the automotive marketplace. Four of the top ten are joining us. So it is not like we are taking our eye away from the ball with respect to the automotive marketplace.

Speaker #3: However , these new big growing marketplaces with respect to data center and defense , aerospace are very good fits for our product . So as Kevin mentioned earlier , at the start of the year , we had looked at these markets and appropriately sized our resourcing for this as part of our annual operating plan .

Speaker #3: So we have , well , resources and will continue to invest as needed . This is not an either or . We are looking at both of these opportunities with capturing and creating and capturing shareholder value

Laisha Zack: Okay. Thank you so much. That makes a lot of sense.

[Analyst] (HSBC): Okay. Thank you so much. That makes a lot of sense.

Siva Sivaram: Thank you, Laisha.

Speaker #9: Okay. Thank you so much. That makes a lot of sense.

Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Siva Sivaram for any further remarks.

Speaker #3: Thank you . Lucia .

Speaker #1: Thank you . This does conclude the question and answer session of today's program . I'd like to hand the program back to Siva Sivaram for any further remarks .

Siva Sivaram: Thank you, operator. Finally, today I want to recognize the entire QS team for their execution and thank our shareholders for their continued support. We look forward to updating you on our progress in the months ahead. Thank you.

Speaker #3: Thank you, Amrita. Finally, today I want to recognize the entire team for their execution and thank our shareholders for their continued support.

Speaker #3: We look forward to updating you on our progress in the months ahead. Thank you.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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