Amprius Technologies, Inc. Q3 FY2025 earnings call

• Amprius is a pioneer and leader in the silicon anode battery space with over a decade of development experience. It develops, manufactures and markets high energy density and high-power density silicon anode batteries for electrical mobility. - In Q3, it shipped batteries to 159 end customers, 80 of whom were new. Revenue was $21.4 million, up 42% QoQ and 173% YoY. - Second-generation SiCore batteries led revenue growth with a >4x increase in shipments YoY. - 75% of Q3 revenue came from the aviation segment (UAS market), remaining from light electric vehicles. - Secured a $35 million purchase order from a leading UAS manufacturer. - Deepened relationship with AeroVironment, shipped samples of ultra-high energy cells for evaluation. - Nordic Wing in Denmark chose SiCore cells for its UAV platform. - Advanced to integration assessment phase with Amazon Device Climate Tech Accelerator. - DIU contract increased by $1.5 million, total $12 million. - Over 1.8 gigawatt hours of contract manufacturing capacity available, with SA08 cell as best-selling.

In the third quarter, Amprius' revenue totaled $21.4 million, a 42% increase from the second quarter and up 173% from Q3 2024. About 75% of the revenue in the quarter came from the aviation segment, led by the unmanned aerial systems (UAS) market. The remainder of the Q3 revenue was primarily derived from the light electric vehicle sector. Geographically, 75% of the revenue came from outside the United States on a ship-to basis.

• Expect EBITDA to turn positive with incremental revenue. - Current revenue levels and slight improvements can put the company on a path to mainly consume working capital vs funding operating expenses in the near term. - Strategically invest in diversifying supply chain and expanding Fremont facility electrode manufacturing with DIU funding.

• Uncertainty driven by U.S. tariffs and customer delays related to U.S. government shutdown. - Potential lumpiness and fluctuation in gross margins due to product mix, customer diversity, and dynamic tariff/logistics environment.

Q: Could you talk a little bit about the cadence of how the U.S. capacity will come up and how much capacity it will actually be and where that electrode will ultimately end up getting turned into batteries?

A: We will have both U.S. and NDAA compliant contract manufacturers, including in Korea. We'll see additional partners in the network for pouch and cylindrical cells over time.

Q: Can you talk a little bit about the cycle time and how much work you've done previously to be able to get some of those different battery configurations?

A: To fully qualify 11 major battery components, it will take until next summer. We've started, with 5 components fully qualified NDAA compliant and working on the other 6.

Q: Did you see folks move towards purchase orders a little bit faster than they have in the past or moved to larger purchase orders?

A: It's distributed, some qualification happens within 2 quarters, some take over a year depending on component complexity.

Q: What led to that big step-up in new customers this quarter?

A: Increase in demand due to awareness from conferences and wins, with seeds planted earlier coming through as real purchase orders.

Q: Could you try to break that down to maybe how you see the improvement in gross margin?

A: Mix was the main driver of the increase from 9% to 15% QoQ, with larger share of SiCore and favorable product mix.

Q: What's the margin profile of the second-generation SiCore battery?

A: Goal is north of 20% at closer to 80% capacity, but still testing as revenue materializes.

Q: What are some of the trade-offs between the first gen and the second gen from your customers' perspective?

A: SiMaxx is first-gen, SiCore is second-gen, with continuous improvement, but details on specific trade-offs vary.

Q: Could you provide an update on the time line to cash flow breakeven?

A: It's tough to pin down a specific quarter, but with $10 million more revenue, EBITDA would be positive, and cash flow positive would follow.

Q: Could you give some color on what you expect as we continue to see revenue expand on the margin side?

A: More driven by mix, but lumpy due to customer and product diversity, with EBITDA a good proxy for cash flow.

Q: How important is to establish contract manufacturing capacity in the United States for certain customers?

A: Important for some customers, with DIU program driving activity in U.S. pilot line development.

Q: Sort of the flywheel effect of repeat orders. How are you thinking about potential for these repeat orders to keep coming in and get bigger?

A: Incredibly optimistic with great product, strong market, and positive trends like customers winning shoot-outs.

Q: Any more detail on defense and drones funding and government shutdown impact?

A: Seeing announcements, Beautiful Bill budget increases bode well, and government shutdown hasn't significantly slowed progress yet.

Q: What's the complexion of the pipeline and margin profile for different sectors?

A: Pipeline is strong and growing, 75% aerospace including various applications, margins similar for LEV and aviation. Amazon program is multi-phase with seat at the table but still work needed.

Q: With regards to revenue, did you have any design service or government grant revenue in the quarter? What's the SKU count? What's the run rate with capacity? What's the end game with DIU pilot line?

A: Government grant was ~$400,000 in other income. SKU count is 20. Run rate theoretical but could be significant. DIU pilot line aims to develop domestic battery production capability with potential for larger solicitations related to domestic production.