Solid Power, Inc. Q2 FY2024 earnings call

• Key goals in early 2024 included expanding electrolyte capabilities, advancing A-2 sample cell designs, executing partnerships effectively, and strengthening presence in Korea.
• Increased electrolyte sample shipments to potential customers with repeat shipments to OEMs and encouraging feedback.
• Focused on advancements in A-2 cell design for higher performance and safety.
• Partnerships: Deepened relationship with SK On, completed first milestone under R&D License Agreement, and making progress on Line Installation Agreement; collaboration with Ford on various projects; extended JDA with BMW, focusing on improving cell design and advancing performance towards commercialization; BMW successfully built modules using A-1 cells and conducted testing, but paused future deliveries for demo car program to refocus on A-2 cell improvements; expanded team in Korea to strengthen relationships and ramp electrolyte sampling activities.

In the second quarter of 2024, Solid Power delivered $5.1 million in revenue. Operating expenses were $32 million, resulting in an operating loss of $26.9 million and a net loss of $22.3 million or $0.13 per share. Capital expenditures totaled $4.4 million. As of June 30, 2024, Solid Power's liquidity position was strong with $358.8 million of total liquidity. Accounts receivable were $12.3 million, deferred revenue was $10.1 million, and total current liabilities were $22.9 million.

• Reduced 2024 revenue guidance to $16 million to $20 million due to: 1) Accounting treatment of SK On agreements where some revenue to be recognized in 2025 instead of 2024; 2) Slower than expected uptake in electrolyte development.
• Fiscal year 2024 cash used in operations expected in range of $60 million to $70 million, capital expenditures in range of $40 million to $50 million, with total 2024 cash investment expected in range of $100 million to $120 million.
• Revenue revision does not impact long-range plan on cash runway for commercialization of technology, maintaining capital-light ASSB player position.

Q: Hey. Good afternoon, everyone. Just on the second point you made on the revenue guidance reduction, the slower uptick in electrolyte development, is that just broadly kind of a lagging indicator in terms of how OEMs are feeling about EVs at the moment? Or is there something kind of a deeper kind of thought around that?

A: Good day, Chris. I think, I would credit it more to just being a very early stage on the market. When we started the year, we looked into the back half and thought some of the early players would be taking some measurable quantities in the second half. That really hasn't materialized thus far. But it's not unusual for a market that is so nascent as the ASSB market is. So we look forward to updating it and improving it as we go forward, but that's the way it looks to us right now.

Q: Hi. Good afternoon. It's Mike Shlisky of D.A. Davidson. Hey, in the past quarter or two, you've talked a little bit more about OEMs beyond the two plus SK you had in the pipeline – interest from other companies to your products. Has the pipeline gotten any larger or smaller over the last few months? Or anything you can comment on interest from other people in Solid Power at the current time?

A: Sure. Good to hear from you, Mike. Yes, I would say that two things. The pipeline is continuing to grow. So we had objected to sample as many as 15. We're over 10 now and it continues to grow. But equally as important, we've had a lot of multiple sampling to existing potential customers within this period of time. Some of them are sampling 5x or 6x as we've gone through the last 90 days. So we give them a sample, they evaluate it, they integrate it into their cell design, give us feedback. We modify it, give them a different sample and rinse and repeat. So that's as important, I think as just the sheer number is the amount of interaction we've had with the folks we have been sampling since the beginning of the year.