SES AI Corp Q4 FY2024 earnings call

• Signed contracts totaling up to $10 million to develop AI-enhanced lithium-metal and lithium-ion batteries for EVs with two automotive OEM partners.
• Unveiled an AI-enhanced 2170 cylindrical cell for humanoid robotics, with contracts signed for drones and HAPS communication satellites. The AI-enhanced cells use electrolytes discovered via SES AI's Molecular Universe effort.
• Announced an MOU with AISPEX targeting up to $45 million for Battery Energy Storage Systems (BESS) with AI for Safety, leveraging the Avatar battery safety platform.
• Molecular Universe collaboration with Nvidia accelerated mapping of 10 to 11 universal small molecules, with mapping of 0.1% of the Molecular Universe completed. Avatar platform developed for battery health monitoring and incident prediction.
• Shift in business model from CapEx-heavy to focusing on selling AI models, core battery materials, contract manufacturing of cells using their electrolyte, and selling contract imported cells.

For the fourth quarter ended December 31, 2024, SES AI reported revenue of $2 million with a 63% gross margin. The full year 2024 had a total cash usage in operations and capital expenditures of $78.3 million, below the previous guidance range of $80 million to $95 million. For 2025, revenue is anticipated to be between $15 million and $25 million, with planned cash usage in operations and CapEx between $70 million and $80 million. The revenue contribution is expected to come from areas like BESS, EV, drones, and robotics, with BESS initially being a bulk contributor in 2025.

• 2025 revenue is expected to be between $15 million and $25 million.
• Planned total cash usage in operations and CapEx for 2025 is between $70 million and $80 million, prioritizing R&D, commercialization, and strategic market expansion.
• Focus on full-year outlook rather than quarterly cadence, with intentions to update guidance during the year as needed.

• Competitors could copy innovations; in the industry, if a material works well, it's likely to be copied.
• Market fragmentation in sectors like BESS, where some parts are dominated by large players while others are fragmented.

Q: What led to the shift in strategy from a single chemistry focus to multiple markets?

A: The ability to apply the platform to multiple battery chemistries and markets, expanding the addressable market from a single technology in one market to two platforms across almost all battery technologies and multiple markets.

Q: Can you break down the 2025 revenue outlook by segments?

A: Roughly, bulk of 2025 revenue is expected to come from BESS, with the rest from a combination of EV, drones, and robotics.

Q: How is SES improving AI models for battery performance, safety, and manufacturing efficiency?

A: Lower cost of AI allows training models with more data, including actual data from battery recycling and synthetic data for molecule properties, leading to more sophisticated models.