Enovix Corporation

Thank you for standing by and welcome to the Inovix Corporation first quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. As a reminder, today's program will be recorded. And now, I'd like to introduce your host for today's program, Robert Leahy, Head of Investor Relations. Please go ahead, sir.

Thank you. Hello, everyone. Welcome to Inovix Corporation's first quarter 2026 Financial Results Conference Call. With me today, our President and Chief Executive Officer, Dr. Raj Saluri, and Chief Financial Officer, Ryan Benton. Raj and Ryan will provide marks, followed by Q&A. Before we begin, please note that today's conference call contains forward-looking statements that are subject to risks and uncertainties. These statements are based on current expectations and may differ materially from actual future results due to various factors. For a discussion of these risks, please refer to the disclosures in today's press release and our filings with the Securities and Exchange Commission. You can also find these materials on our website at ir.inovix.com. All statements made on this call are as of today, May 13, 2026. and we undertake no obligation to update them except as required by law. Additionally, during the call, we may reference non-GAAP financial measures. You can find a reconciliation of these to the most directly comparable GAAP measures in the materials posted on our investor relations website. With that, I'll turn the call over to Rosh.

Good afternoon, everyone, and thank you for joining us. This quarter marked another meaningful step in Indomitia's transition towards commercialization and scale. we advanced across the areas we believe are most important for long-term value creation, customer engagement, commercial deployment of our silicon anode batteries, and manufacturing readiness. I'm very excited to share that in the smart eyewear market, we commenced commercial production of our A1 battery for our lead customers reference platform and have multiple customers in the process of launching smart eyewear products. Initial shipments are underway, the production expected to ramp through the second half of the year. We believe this validates our ability to manufacture our 100% silicon anode architecture at commercial scale. On smartphones, we aligned with Honor on an updated qualification framework designed specifically for silicon anode batteries. This framework, which includes revised specifications and testing protocols, better reflects real-world usage conditions. We are pleased to have also aligned with our second smartphone OEM on the view that they too will need to adapt a similar testing framework in order to get their products to market on a competitive timeline. Beyond these customer engagements, we're in active dialogue with several additional leading OEMs regarding silicon anode battery qualification standards and we're encouraged by the constructive cadence of our discussions with these OEMs as we work towards future qualifications and commercialization programs. Importantly, We believe we are doing the hard work now that will enable our future OEMs to roll out their silicon anode solutions more rapidly. The principal structural mismatch in qualification has now been addressed to align with silicon anode performance while maintaining and in some respects increasing qualification rigor. Cycle life testing at our lead customer for batteries that we shipped at the beginning of the year is progressing under the updated protocols with the results approaching required thresholds. The deep partnership and technical engagement we are seeing with multiple customers in the smartphone market reinforces our belief in the industry's interest in high-performance silicon anode battery solutions. We're encouraged to see growing demand across our drone, defense, and industrial applications, securing new customer design wins during Q1 2026 in each of these markets with deployments expected in 2027. Our global pipeline for products manufactured in Korea now exceeds $130 million, with majority driven by rapidly expanding drone applications where demand for high-performance battery solutions continues to outpace the available supply. This creates an opportunity for an additional scaled high-performance supplier. We believe InnoX is positioned to emerge as that differentiated supplier in this rapidly expanding market. We continue to improve manufacturing distribution at Fab2. Yields in most production zones are now nearing or exceeding 90%. Zone 1 Dicing, a key throughput driver, is delivering step-level yields of approximately 80%, demonstrating continued progress with our laser-based equipment. We recently appointed Steve Bacos as Senior Vice President of Worldwide Sales to support Samira Naragi, our Chief Business Officer. Steve brings more than 35 years of global semiconductor sales leadership from companies such as Infineon, where he served as the Vice President of Corporate Account Sales for large global accounts, including Apple. This quarter, revenue was $7.6 million, driven by Korean military contractors above the high end of our guidance range and up 49% year-over-year. Non-GAAP gross margin was 26.3%. Now, I'll walk through each of these areas in more detail, starting with manufacturing. On that front, I want to give you an update on our Zone 1 dicing, which is our current throughput bottleneck. Since I joined, to improve the throughput of Zone 1, we have been working on a faster, cheaper way to dice our coated rolls. We've been making great progress. Last week, I received a video from our equipment vendor showing this in action. Rather than trying to describe it with another chart, Let me just show you the actual process. What you saw was our mechanical dicing system processing silicate anode strips directly from coated rolls. We're implementing a hybrid dicing configuration strategy that combines both laser and mechanical dicing approaches. I continue to be encouraged by the substantial progress our global operations and advanced manufacturing equipment teams are making in this novel area for silicate anode batteries. As we mentioned in the last call, Legacy smartphone qualification protocols were originally developed around the graphite-based batteries and relied on a 0.7C discharge requirement. That standard can artificially stress silicon anode cells at discharge rates far above real-world smartphone usage, which typically remains well below 0.2C. The consequence was important. Silicon life testing under this framework systematically understated silicon anode batteries' longevity. we've aligned with Honor on a new silicon anode-specific qualification framework. The updated framework prioritizes a version of the 0.2C cycle test that commenced in Q1. This methodology better reflects real-world usage for silicon anode batteries by enhancing the rigor and visibility into performance. We are seeing broader industry alignment around silicon anode-specific qualification standards. Our second smartphone OEM has joined our lead customer in removing the 0.7C test from their list of hot requirements as we're now progressing towards an updated framework similar to our lead customer. Discussions with several additional top OEMs are ongoing. We expect broad adoption of similar silicon anode specific qualification approaches over time. With this framework now established, the plan with honor is the targeted system level deployment in the second half of the year to confirm in-field performance ahead of the broader commercial launch in 2027. Importantly, we also recently received the battery form factor for their next generation device to support readiness for the next major product launch. Our commercial strategy centers on two complementary technology platforms that address large and in some cases rapidly expanding market opportunities. AI, short for artificial intelligence class is our flagship 100% silicon anode platform. It's targeted at smartphones and smart eyewear markets where volumetric energy density is a key requirement. Smartphones represent the largest battery market opportunity for InnoVis. However, smart eyewear is emerging as one of the fastest growing new device categories. We think that the smart eyewear battery market opportunity could exceed a billion dollars by the end of the decade. More broadly, the AI platform is applicable to virtually any space-constrained device requiring high energy density and long cycle lives, including future applications in wearables, computing, industrial handrails, EVs, and humanoid robotics. Previously, we acquired an established business producing graphite anode-based products. These products are in production today, generating revenue in defense, drone, and industrial markets through our Korea facility. We've been able to leverage these capabilities in combination with our silicon anode technology know-how to create high-performance MX silicon enhanced platform. Our initial targets markets for MX represent more than 4 billion in opportunity, including approximately 2.4 billion in drones and 1.8 billion in defense technologies beyond drones. These applications prioritize performance and supply chain security, with a greater focus on gravimetric energy density. Over the longer term, we believe the MX platform is also well positioned for adjacent markets, including robotics, EV toll, healthcare devices, transportation, agriculture, and broader industrial applications. The first product Inomix is launching on this platform is MX-1, a ruggedized drone cell design requiring rapid discharge and high gravimetric energy density. I want to highlight something important here. These are not separate bets. They are mutually reinforcing platforms sharing technology, supply chain capabilities, and commercial infrastructure. They're increasing seeing benefits flow in both directions with the AI platform leveraging Korea manufacturing strength and MX platform benefiting from our silicon expertise and global commercial reach. Alongside qualification progress, our R&D efforts continue to advance the platform This quarter, we produced the first engineering samples of AI2 for smartware, delivering greater than 20% higher volumetric energy density compared to AI1. This represents a meaningful architectural-driven improvement, potentially enabling product categories that require significantly more power within highly constrained form factors. We've achieved this improvement through two primary drivers, reducing inactive material to improve packaging efficiency and increasing the cathode voltage. Together, these advances increase energy density within the same footprint and further demonstrate the advantages of our 100% active silicon anode architecture. We believe this represents the first of many future advancements, unlocking the full energy potential of our 100% active silicon anode architecture on the future AI product roadmap. Display-equipped smart eyewear is expected to become a rapidly growing battery market, and we believe increasing power requirements create a strong fit for our technology. Smart eyewear also represents an attractive initial commercialization opportunity for our silicon anode platform. Qualification cycles are generally shorter, more flexible, and durability requirements are lower, and the market is in the early adoption stage. Customer sampling of AIQ is planned for later this quarter, they've already received initial sampling orders and engagement commitments from several leading smart eyewear companies. The 20% energy density improvement achieved with AI2 is important, not only for smart eyewear, but also because similar gains for future smartphone batteries could materially extend our technology advantage. The current AI1 smartphone battery derivatives 935 watt hours per liter and has been independently validated against graphite and silicon alternatives. We believe these positions enrich the meaningful competitive advantage in high energy density mobile applications. Competing approaches remain largely focused on conventional graphite-based designs with incremental silicon additions. These architectures continue to face swelling constraints that limit long-term performance and energy density improvements. In contrast, Our architecture is designed at 100% active silicon anodes, which we believe provides a substantially higher long-term scaling opportunity. Now let's talk about our second platform, MX. This week at the Michigan Defense Expo, we formally launched MX1-B01, a drone battery cell delivering energy density of 360 watt-hours per kilogram, positioning us competitively within the high-performance drone battery market. We achieved this performance through targeted silicon content enhancements, leveraging an already proven manufacturing platform. MX-1 is designed for applications requiring excellent flight time, high discharge capability for power-intensive missions, and a secure supply chain. We believe the product compares favorably with similar leading high-density solutions currently available in the market and offers a material cycle life advantage. We are manufacturing these cells from our South Korea factory, which has supported defense customers for years, and our commercial focus is on drone manufacturers globally, as well as their packaging partners. Following the Michigan Defense Expo, we plan to showcase MX-1 at 11 additional conferences around the U.S. and Europe over the next two quarters as we continue building customer engagement and commercial pipeline activity. This slide shows how we see the MX platform evolving beyond the initial MX-1 launch. Demand for high-performance drone battery supply continues to exceed currently available Western capacity, which we believe creates a meaningful opportunity for InnoVix. These applications prioritize performance, reliability, and supply chain security, supporting differentiated positioning relative to commoditized consumer battery markets. While drones are key near-term focus, we've also established product offerings for subsea, munitions, and industrial applications, expanding the MX platform across multiple high-performance end markets. Our Korea and Malaysia manufacturing footprint directly addresses decent supply chain requirements, backed by years of production history, supporting major contractors and deployed programs. A key structural advantage for Indorex is vertical integration. Because we own our manufacturing operations, we're not sharing economics with third-party contract manufacturers, which we believe supports both competitive pricing and attractive long-term unit economics as volume scales. As product competitiveness becomes increasingly established, the grading factor becomes commercial conversion, which is why we recently appointed Steve Bakos as the Senior Vice President of Worldwide Sales. He brings more than 35 years of global semiconductor and industrial sales leadership experience and will help build the commercial infrastructure required to support growth. Looking ahead, MX2, is targeted for 2027 with the goal of reaching 400 watt-hours per kilogram. Over time, we intend for MX to evolve into a broader platform strategy spanning multiple product formats and defense and industrial end markets. Now I'll turn it over to Ryan to walk through our financial results. Ryan?