Electrovaya Inc.

Welcome to the Electrovia Q4 year-end 2024 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, John Gibson, CFO at Electrovia. John, you may begin.

Thank you. Good evening, everyone. And thank you for joining today's call to discuss Electrovia's Q4 and full year fiscal 2024 financial results. Today's call is being hosted by Dr. Raj Dasgupta, CEO of Electrovia, and myself, John Gibson, CFO. Today, Electrovia issued a press release concerning its business highlights and financial results for the three and 12 month periods ending September 30th, 2024. If you would like a copy of the release, you can access it on our website. If you want to view our financial statements, management discussion and analysis, You can access those documents on the new CEEDARplus website at www.ceedarplus.ca or on the SEC EDGAR website at sec.gov forward slash EDGAR. As with previous calls, our comments today are subject to the normal provisions relating to forward looking information. We will provide information relating to our current views regarding market trends, including their size and potential for growth, and our competitive position within our target markets. Although we believe that the expectations reflected in such forward looking statements are reasonable, They do obviously involve risks and uncertainties, and actual results may differ materially from those expressed or implied in such statements. Additional information about factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the company's press release announcing the Q4 and full year fiscal 2024 results and the most recent annual information forum and management discussion and analysis under risks and uncertainties. as well as in other public disclosure documents filed with Canadian security regulatory authorities. Also, please note that all numbers discussed on the call are in U.S. dollars, unless otherwise noted. And now, I'd like to turn the call over to Raj.

Thank you, John, and good evening, everyone. It is a pleasure to address you today as we discuss one of the most transformative years in Electrovirus history. Fiscal year 2024 was marked by several groundbreaking milestones. that underline the strength of our business and our trajectory for growth. Let me highlight the key achievements. We delivered record revenue and achieved our sixth consecutive quarter of positive adjusted EBITDA, signaling sustained operational and financial strength. For the first time, we generated positive cash flow from operations and significantly improved our gross margins to over 30%. showcasing our commitment to efficiency and profitability. We secured a $51 million direct loan approval from the Export-Import Bank of the United States under the Bank's Make More in America initiative, a pivotal step towards expanding our lithium-ion cell manufacturing in Jamestown, New York. This move will not only increase capacity but also improve margins and enable larger scale projects. And most importantly, we set ourselves up for what we anticipate will be a record 2025 with revenue growth expected to exceed $60 million with profitability driven by robust customer demand and expanding opportunities in both existing and new markets. These and other accomplishments that we will discuss reflect the dedication of our team and the trust of our partners, positioning us to lead in mission critical and heavy duty energy storage solutions. With that, let's delve into the details of our fiscal year and our vision for the future. First of all, on November 14th, we received approval from the Export-Import Bank of the United States, or EXIM, for a direct loan of nearly $51 million to fund our Jamestown, New York Gigafactory. A lot of time and effort went into the process, including three levels of credit review and approval, and business, technology, and customer due diligence before receiving final approval from the bank's full board. I believe Ex-Im's approval represents an incredible endorsement of Electrovia and our capabilities to succeed in this strategic and highly competitive industry. We are currently in the process of finalizing the loan documents and expect to close and have access to begin drawing funds next quarter. The EXIM loan covers equipment and construction costs for the site, and when combined with incentives from the state of New York and county, provides nearly $60 million in non-dilutive financing to enable us to turn our vision into reality. We anticipate starting commercial cell manufacturing operations in the Jamestown facility in the first half of calendar 2026 and battery system manufacturing in 2025. The Jamestown facility substantially expands our capacity and will enable us to pursue an increasing number of larger opportunities that can drive higher revenues and profits. Furthermore, We believe that with domestic and vertically integrated manufacturing, we will be able to increase our gross margins, reduce lead times, and ultimately facilitate larger purchases from customers that are more sensitive to manufacturing origination, like defense. We are also experiencing increasing demand for our material handling battery products. Over the last several years, most of the orders for our products in this sector stem from newly constructed distribution centers, and we continue to have strong demand from these types of opportunities. However, one trend that is very encouraging is a ramp up in demand for retrofit or brownfield opportunities. With far more existing warehouse sites than those under construction, there is a much larger addressable market opportunity. We recently announced one of these orders from one of our largest end customers, a leading Fortune 500 retailer, to equip two of its distribution centers. This particular customer has indicated plans to convert at least another four distribution centers in the near future with potential plans for an even larger implementation. Also significant is renewed demand from our largest end customer, a Fortune 100 e-commerce company. During fiscal year 2024, we had significantly less revenue from this end customer than previous years. Despite this and delays from other customers, we delivered revenue that was essentially flat, not a little bit higher. While this was a disappointment and does not reflect our future growth potential, overall, it is a testament to the higher degree of customer diversification that we are starting to achieve. we are already seeing renewed demand from this customer and are anticipating a return to at least our historical rates from them for fiscal year 2025. With regards to our core material handling battery vertical, we recently introduced in partnership with one of our OEM partners, Toyota Material Handling, a high residual value leasing offering. This was achievable in part to the strength of our position with more than five years of outstanding performance data related to battery systems in the field. Initial feedback from this offering has been terrific with significant customer interest and anticipated orders from customers who would not normally move forward with our pricier energy storage solutions. We have a number of material handling OEM driven development projects that are scheduled to move into production in 2025. This includes a high profile electrified industrial forklift, which traditionally has only been powered by internal combustion engines and is used in some of the toughest applications, including ports and lumber yards. We are also working on customized battery systems for new autonomous vehicles, which are also scheduled to launch in 2025. Over the last year, Electrovia has also successfully seeded multiple other verticals with similar mission-critical requirements. Our partnership with Sumitomo Corporation has led to the establishment of a supply contract with a global construction equipment manufacturer for which we expect to start initial shipments in February 2025. Our high voltage battery systems have been validated in one of the toughest defense applications with a year of testing completed. That customer, a global aerospace and defense company, recently placed follow on orders and we expect to establish a growing supply of battery systems to them. This success validates our solutions and creates strong referenceability that helps us secure other opportunities. Recently, we established a supply agreement for our high voltage battery systems to be used in electrified locomotive applications and are in discussions with other applications, including trucks and mining vehicles. We believe that the combination of these additional verticals will lead to meaningful revenue contributions in 2025 but especially 2026 and beyond, which aligns nicely with our Jamestown operations ramp up. Electrovi continues to develop new products based on our Infinity technology and also continues to progress with our solid state battery development. On new products powered by Infinity technology, I expect us to launch a product for airport ground equipment in the near term. We see growing interest in that vertical with a fair bit of commonality with our material handling products. We are also launching a stationary energy storage product in 2025 to meet some of our existing end customers' demands for safe and reliable energy storage solutions. With respect to our solid-state battery development, we have made good progress over the last several months. Our ion conducting ceramic separators have improved performance, and we have started a lab scale continuous processing system, which is increasing our consistency. We were recently awarded additional grant funding to support this work, and we are being considered for a larger grant as well. I would expect us to provide a more fulsome update as we make more progress. With that, I would like to pass the call back to John Gibson, who will go into the financial results in more detail.

Thanks, Raj. Revenue for fiscal 2024 was $44.6 million compared to $44.1 million in fiscal 2023, with Q4 coming in at $11.6 million, a slight increase year over year. As we previously disclosed, we had $20 million of orders pushed out of fiscal 2024 as a result of customer delays, and there was almost no orders from our largest end user. While this is obviously not ideal, we were able to improve operational efficiency and precision ourselves for continued growth. We continue to move closer to our breakeven point of $50 million and expect to exceed this in 2025 with revenue guidance of $60 million for the year with the ramp up beginning in the first quarter of 2025. Gross margin for fiscal year 2024 was 30.7%, a significant increase compared to 26.9% in the prior fiscal year. This translated into an additional 1.8 million of gross profit. Battery system margin was slightly higher at 31.3% for the year. The company has generated income from operations in back-to-back fiscal years, despite the slight decline in fiscal year 2024, which included non-recurring operating costs of approximately 0.7 million. Our adjusted EBITDA grew by 0.8 million to 4.1 million for the year. Q4 adjusted EBITDA was 1.5 million. We have now recorded six consecutive quarters of positive adjusted EBITDA. This demonstrates our capability to continue our growth plans and support our operations going forward. Our net loss for fiscal year 2024 was 1.4 million, which is flat compared to the prior year. The company generated positive cash flow from operating activities, including net changes in working capital of $1 million for the fiscal year, compared to cash used of 5.2 million in the prior fiscal year, a significant improvement of 6.3 million. This demonstrates the continued improved financial and operational performance of the company, and management is committed to continuing this positive trend. As a result of this improvement, our auditors agreed that there is no doubt around the company's ability to continue as a going concern, and that note was removed from the financial statements. At September 30th, 2024, total debt was 18.4 million compared to 16.3 million in the prior year. The company continues to manage cash conservatively and is in an ongoing discussion to refinance its working capital facility, which we expect will reduce our overall financing costs and provide us with additional working capital as we increase production in 2025. We believe we have adequate liquidity to support this anticipated growth for fiscal year 2025. That concludes the financial overview. I'll now turn the call over to Raj for concluding remarks.

Thank you, John. In closing, Electrovia is starting fiscal year 2025 in an amazing position. Our products sell at some of the highest margins in the industry. We are now demonstrating consistent cash flow from our operations. Our technology is distinct and becoming recognized for mission critical and heavy duty segments that we are targeting. We have some of the most enviable names in the world using our products, and now we have support from Exum and others for our domestic manufacturing expansion. I, for one, am super excited about what is in store for us in 2025. That concludes our remarks this evening. John and I would now be pleased to hold a question and answer session.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker or correnda, it may be necessary to pick up your handset before pressing the start. Once again, that's star one if you wish to ask a question. And please hold while we poll for questions. And the first question today is coming from Eric Stang from Craig Hallam. Eric, your line is live.

Hi, Raj. Hi, John. Hey, Eric. Eric. Hey. So I guess first for me, so you mentioned the two customers who have reordered it. I'm just curious. When you look at fiscal 25, what the level of visibility is into that? And I know primarily it's material handling, um, and maybe how that compares to years past.

Well, I'll start off with that. Uh, the fortune 100 customer, they in years past have typically ordered 10 million plus per year. And in fiscal 2024, it was about a million or less, less than 1 million. So it was a bit of a disappointment in 2024. However, they've already started ordering for 2025. We're anticipating to be at least at the level, if not higher than we have seen in previous years. So that's a positive sign and contributing to pretty good confidence on our end. On the second customer, They have been a large customer of Electrovia for a few years. They have over 1,000 batteries in operation, so they're probably our second largest end customer currently. And what they've seen is very good results from batteries in the field so far, so much so that they've decided to – start revamping existing infrastructure at a high rate and so we've already seen two sites which are relatively smaller in size or anticipating another at least another four which have been communicated to us and beyond that there's potential for even further uh implementation in 2025. so they're looking uh they've seen the payback on this technology uh it's uh it's This technology ultimately is being selected by companies, not for any other reason, but because it helps their operations. It saves them money. It's a safe, reliable, long-lasting battery technology, which I don't think is made by anyone else other than ElectroBio.

Got it. Okay, that's helpful. And then, And I know that part of fiscal 24, and you called this out early in the year, you had, I think it was $20 million of potential projects or shipments that would ship. And it sounds like you've taken that same approach to fiscal 25. Just curious, kind of your thought process there. It would seem, given the details you just gave with the Fortune 100 customer, reordering and likely returning to more historical levels, that that $60 million is a is a number that you very much anticipate achieving at a minimum?

Yeah, I would say we've been very conservative in the approach this year. In manufacturing, it's, of course, difficult to predict specific numbers. So what we did here was we took what was the figure that we thought we would be able to achieve, and we discounted it by quite a significant percentage. Some of that is detailed in our forward-looking statements. But overall, what we're anticipating to do is every quarter, we will give a further update and refine that figure. Overall, we expect to start ramping production for orders in January, so very shortly. And we expect... we expect to start hitting a good stride from then onwards. The current quarter, of course, we also anticipate it being strong, but traditionally and historically Q1, our fiscal year Q1, which ends in end of December, is a weaker quarter. But we should be in a good position this year as well.

Got it. All right, and then maybe last one for me, and this is more longer term. I mean, obviously, you mentioned 25 will be a very good year, but this is, you know, you're looking at significant growth in 26, 27 and beyond. When you think about non-material handling and markets, I mean, how do you think those will play out? How would you rank those between, and I'm sure I'll miss some, but defense, aerospace, rail, construction, etc.? ?

You know, personally, I think they're all going to ramp. We're going to see each one of those sectors ramping up, especially 2026 onwards. Our team has done an amazing job over the last 12 months or so in seeding a lot of these opportunities. On the defense side, of course, it takes them quite a long time, and in batteries in general, to get qualified in various programs, a lot of testing, validation, on both our product and an OEM's product has to be done, so it takes time, but we see a trajectory that looks very positive. I would say the defense 2026 onwards looking good, although in 2025 we anticipate that being significantly larger than it was last year. In terms of other opportunities, airport ground equipment, That's a relatively easy product for us to launch and get market acceptance because of its commonality with material handling. We see good opportunities there. With respect to mining vehicles, we're continuing those discussions with a major mining company on potentially repowering vehicles at large mining sites. We're in discussions with companies in other verticals, too. You mentioned rail. There is one we are anticipating some projects with our partner there. We have good discussions with an electric truck OEM. And so we're very excited about all these opportunities receding. That said, 2025, from a revenue perspective, is still going to be dominated by material handling, but these other verticals will start contributing more significantly in 2026, which is great news for us because that's when the Jamestown operations come online.

Okay, that's great. Thanks a lot.

Thank you. The next question is coming from Amit Dayal from HC Wainwright. Amit, your line is live.

Thank you. Good evening, everyone. So, you know, Raj, with respect to these tariff-related headlines, can you talk a little bit about how you are planning to navigate some of those issues? And then, you know, the Jamestown facility, when it's up and running, how that will play a role in, you know, supporting any, I guess, avoiding these potential tariffs that are being talked about right now?

Yeah, so I would say tariffs, generally speaking, and manufacturing. Manufacturing, you've got parts from obviously lots of places. Not helpful. However, Electrovia is in a better position than most. We have the Jamestown operations. We will start making battery systems in 2025. If tariffs look more serious and complicated than we expect, we can, of course, start those operations even earlier. And so I think we're fairly well insulated from those effects of tariffs, and that's sort of our strategy going forward. Overall, domestic manufacturing is going to become critical, and Electrovia is in a great position for that in terms of Companies in our space making lithium ion cells in the U.S., there are very, very few, especially making a cell product like a lithium ion cell product like we do. We really, really stand out. So to some effect, tariffs might even benefit us.

Interesting. Thank you for that. And then, you know, you said, you know, once the Jamestown facility is up and running, you could potentially see gross margin improvements. You know, how much more from these levels? You've done a good job on that front already. But with that facility ramping, you know, how much more margin improvements potentially could you see?

So we're anticipating that vertical integration to most definitely improve our margins. Just from an apples to apples standpoint, we're no longer paying the margin of contract manufacturers overseas. We're no longer paying shipping costs. We're no longer financing materials over a considerably longer period of time. So those factors will most definitely improve margins just off themselves. There also are currently production tax credits that would apply to us. That's the 45X credit. And our expectation is that those will remain in place as those further improve the gross margins. We're not depending on them, of course, but if they remain in place, they're helpful. I've spoken with our congressional representatives, covers Jamestown, and he's a Republican, really good guy. And generally speaking, the impression we get is those remain in place, but who knows. Either way, margins are set to improve. And in the near term, we're also seeing some of the material costs for our products coming down, which is going to improve margins over the course of 2025. Of course, tariffs may affect that, but that's what we're generally seeing.

Understood. The retrofit opportunity that's opening up for you on the material handling side, are these, you know, are you replacing the, you know, the legacy propane type forklifts or something else? Can you clarify that?

We're replacing lead acid powered vehicles. Okay, understood.

Thank you. The $60 million, Raj, last question for me, the $60 million for fiscal 2025 is the majority of it material handling, basically?

Correct, yeah. About 95%. Okay, understood.

Again, it's meant to be a conservative marker there.

Yeah, I got it. Thank you. That's all I have. Thank you.

Thank you. And once again, it'll be star one if you wish to ask a question today. The next question is coming from Jeff Gramp. Jeff Gramp is calling from Alliance Global. Jeff, your line is live.

Evening, guys. Thanks for the time. Raj, I'm curious. I know it's only been a month or two since you guys announced the XM loan, but curious, early days here, if you can touch on any change in customer conversations in terms of, I would just think, you know, for you guys having the assurances, being able to get that production online, having a little bit more definitive, you know, financing plan and timing. Does that kind of give customers, you think, a little more conviction to pursue things with you guys a little more aggressively, or is it a little early to call that definitively?

No, very much so. It definitely helps us. We've heard from multiple existing customers and potential customers that We're very excited about our capabilities of supplying domestically. Generally speaking, it's not just in the defense sector, it's every sector really wants to see capability of buying domestic products, domestically produced products. So that's definitely, and it's only been a couple weeks. We're a couple weeks into this, and it's something that's generating significant excitement.

Great. Thanks for that. Appreciate it. And with respect to the guidance number for the upcoming fiscal year, any kind of early expectations you guys can think about in terms of kind of the shape or distribution of that growth? Should we just kind of think of a historical kind of seasonal ordering delivery schedules or any kind of commentary that you guys can provide as we think about kind of building the distribution of that revenue in the year?

I mean, we'd love it to be a bit more evenly spread, but historically, we have a seasonal impact within our Q1. Pretty much everybody closes down for two weeks in December, and then we'll build from the start of Q2 onwards. So I would expect it to be increasing revenue each quarter, maybe not as high as maybe previous years. But yeah, I would see us building towards Q4.

Yeah, I think the ramp really starts Q2, the Jan to March period. We expect to see a pretty strong quarter there and expectation as we hold that trend going forward. So I would pay close attention to how things progress on our end in the winter.

Got it. Okay. Appreciate those details. If I can sneak one more in, just on the margin side, understanding that, you know, we expect things to have a nice move up once Jamestown is online. Any thoughts for fiscal 25? I noticed, you know, Q4 gross margins kind of took a step back sequentially. But, you know, is year-over-year margin improvement still in the cards, you think, for fiscal 25 or just – I guess, A, looking for a little color on any dynamics that happened in Q4 and then how to think about things perspectively. Thanks.

Yeah, in a battery system perspective, there was no real drop in Q4. That is just what we would explain through just a product mix. So our non-battery system revenues, so some engineering projects that are ongoing where we don't have a very high margin came in in Q4, and that revenue was recognized And then there's obviously your true ups for the rest of the quarters. There's exchange differences and all those other true ups. So while Q4 does look like the margin has dropped, the battery system margin itself remains strong above 30% for the whole fiscal year. So I would expect that trend to continue. differentiate when we publish our results to see what the true battery system margin is throughout the quarter and the rest of the year. We expect it to continue to improve. As Raj mentioned, we are seeing some cost reductions in our parts, so we're going to work hard and try and increase our operational efficiency as much as possible to maximize those.

We already have secured lower cost materials. We did that quite a while back. Those lower cost materials didn't necessarily make it into battery systems in fiscal year 2024. They're most definitely making it into battery systems now and going forward. And so just off of that, you can expect further improvements in gross margins. Of course, we want to see, you know, if you look at Electrovia, we've been EBITDA positive even when we're revenues at around $10 million, which most companies that's a pretty small number to have that kind of metric. And once we're crossing that $14, $15, $16 million per quarter, it's going to be well reflected.

Yeah, definitely. Testament to the tight belts you all wear. So appreciate the time. I'll turn it back. Thank you, guys.

Thank you. The next question is coming from Daniel Magder from Raymond James. Daniel, your line is live.

Thanks. Hey, guys. Congrats on the quarter. Thanks, Daniel. Specifically in regards to margins, adjusted EBITDA margins, understanding that the gross margins are expected to come up once Jamestown is live. How should we be thinking about adjusting EBITDA margins moving forward once Jamestown is up and running? Are most of the improvements going to come from the gross margin line or from OPEX as well?

Jamestown itself is going to be fairly OPEX light. It's essentially just a bolt-on operating facility. There's no significant R&D or silver marketing costs within that facility itself. So we expect it to be fairly high on an EBITDA percentage. So consolidated EBITDA, we expect to keep increasing as revenue increases. If we take our kind of break even point at 50 million, you know, we can scale the business without any significant increase to OPEX. So, you know, at a 30% margin, anything above 50 million, you can, you know, Mathematically, just add 30% to the bottom line. It doesn't quite work like that, but that's kind of a rough guide towards us growing and as Jamestown comes on. So it's going to contribute pretty significantly to the EBITDA, so we expect it to continue going up.

Got it. Thanks for that.

Thank you. And the next question will be from Oren Hirschman from AIGH Investments. Oren, your line is live.

Hi, how are you? Just a few mixed questions, random questions. You mentioned that you're going to be producing cells eventually in 26 in Jamestown. Clearly, that's going to put you in a sense in competition from your cell providers right now. You know, is there enough out there where you can do a smooth transition as you, or will it continue to be a mix between your own made cells versus buying from the outside? How should we view that?

Oh, great question, Oren. So, first of all, I would, the cells that we currently make, and they're assembled in China, those are electroviased cells, and we see, well, I would expect the Jamestown operations really to fulfill our North American requirements. We're seeing a lot of strong interest from outside North America, especially in the Asia Pacific region. So in Japan, I mentioned that we have one contract already with one major OEM for construction vehicles. In partnership with Sumitomo Corporation, we are actively pursuing multiple other opportunities in Japan specifically. We also see, you know, we've been shipping battery systems recently to places, of course, in Australia. We see quite a bit of opportunities there in even Singapore, et cetera. So I would expect us to – continue production in Asia to support those other markets, which on their own, they can be quite substantial. The Asia Pacific region, of course, is a huge market. We're also going to start looking into the European market in more detail as we get a bit more bandwidth. So there are definitely opportunities for Electrovia beyond North America, and so our supply chain is already in place to meet that. We have a product which is not a commodity. The lithium ion battery product Electrovi makes is unique, and as a result, we see global demand for this type of technology.

You mentioned an autonomous vehicle. Is that a military vehicle or a commercial vehicle?

We are powering, so on material handling, we have a number of autonomous vehicles that we're already designed into one. There's a second one and a third one which are launching in 2025. That's with our main OEM partner. In defense, we also have an autonomous vehicle we're supplying batteries for.

Okay, okay. And last question, just any update on the solid R&D project?

Yeah, so on the solid-state batteries, it's extremely exciting. We definitely will provide the market further, more fulsome updates soon. But what we're seeing there is First of all, we've had some grant funding to support this over the last year or so. We recently issued another one, very recently. And on the progress itself, it's looking good. So what we're very much focused on is the separator, which is our core IP. We're making the ceramic material in-house. That material looks like it has very good performance, and when we compare it to data sheets of what else is available, we are above the performance metrics there. What we're trying to do right now is make the separators more consistent and thinner. I'm just getting a little technical here, and that's also looking good. We're making pouch cells right now, relatively modest in size, and really are, I would say, iterating and tuning the cells to get to a point where we feel we can actively market those. So we're very close. Again, it's hard to predict exactly when that's ready, but we're seeing very good progress.

Progress measured, let's say, in terms of performance in terms of number of charges and discharges? Exactly.

So what we're looking for is number one is cycle life. So we want to target getting to about 500 cycles. And it's very different from our infinity battery systems, which do 10,000 plus cycles. But here, 500 is a good number. It's a commercializable product at that point. And I think we're already tracking nicely to that number. The second is to get the right rate capability. So this is the charge and discharge rates for the cells. And we're also seeing good improvement with that metric. The third is consistency. And that's what we're focusing on right now. is to really just ensure that we can make the same thing over and over and over again. So those are the items we're very much focused on. In terms of energy density, we're, of course, already there. These are very, very high energy density cells.

One question on the charge discharge. That would be a tremendous leap from where you were a year or two ago. in terms of the number of charge discharge where you were 200-ish or 150-ish or something like that, if I remember correctly, you can correct me. Did that come from your own separator, from your own ceramic material, a combination of both? What were the factors that really made the difference, if you can quantify that at all or even qualitatively say?

Yeah, so about two years ago, we were going in a slightly different direction. We didn't have this particular ceramic material design. It was a different type of ceramic composite material. And while it was getting okay results, we were hitting a wall on the cycle life number. We couldn't get beyond really that 250, 300 number. And we're also hitting a wall with regards to rate capability. Okay. And so about 18 months ago, we started going in this new direction. You can see it takes some time, but that new direction is really showing promising results at this point.

Okay, great. And this is just one final question, if you have a feel for this at this point. You know, just I'm nitpicking you, but just in terms of, you know, you're normally down, Q1s, you're low. You're coming off an unusually low Q4. Are you hoping that Q1 looks like Q4, is up slightly from Q4? I know it's not critical because the ramp really starts more in January, but what's the best guess of the way we should look at it right now?

Our expectation is Q1 is going to be similar to Q4.

Okay, great. Okay, thanks so much.

Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Raj Dasgupta for closing remarks.

That concludes our call, and thank you for listening. We look forward to speaking with you again after we report our first quarter results for fiscal 2025. Have a wonderful evening.

Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.