Energous Corporation

Good day and welcome to Energist Wireless Power Solutions second quarter 2026 financial results conference call. All participants will be in a listen-only mode during the prepared remarks. Following the prepared remarks, we will conduct a question and answer session. Instructions on how to queue for questions will be provided at that time. Please note that this event is being recorded. As a reminder, during today's call, the company will be make forward-looking statements. These statements are subject to inherent risk and uncertainties, detailed in the company's filings with the Security and Exchange Commission. Actual results may differ materially from those anticipated, except as otherwise required by federal law, and it just declaims any obligation to publicly release updates or revisions to any forward-looking statements to reflect changes in expectations. I would now like to turn the conference over to Mallorie Burak, Chief Executive Officer, and Chief Financial Officer.

Ma'am, please go ahead. Thank you, and thank you, everyone. I would like to first thank you for joining us on our second quarter 2026 earnings call. For those who joined us on the first quarter call in May, welcome back. For those who are newer to the Interjust story, I would like to encourage you to review the replay of our key one call, which provides a full company overview and the Commercial Foundation for what I will be discussing today. I will keep the background context brief today and focus on what has changed and what is building. The short answer is a great deal is building. Our active deployments are expanding in scope, geography and use cases at a pace that gives us increasing confidence in the long-term revenue trajectory of this business. Our critical concept pipeline has grown both in size and quality of the opportunities and our technology platform has advanced in ways that are directly driving commercial demand. Before I get into the commercial updates, I want to address our second quarter financial results directly and with full transparency because the gross margin line requires contacts that the numbers alone do not provide. Revenue for the three and six months end of June 30, 2026 was approximately $3.1 million and $6.2 million, respectively, versus approximately $1 million and $1.3 million in the same period since 2025, a 217% and 368% improvement over the same prior year periods. Directed by our performance in the first half of 2026, EnerGIS achieved a new historic revenue milestone, having surpassed $10 million in revenue over the trailing 12 months. With the six months ended June 30, 2026, gross profit was $1.2 million, representing a 176% increase versus the same prior year period. Gross margin was 19% for the six months ended June 30, 2026. Gross margin during the second quarter was below the levels we achieved in the recent quarters. This was driven by three primary factors, all of which we believe are temporary in nature and associated with the execution of our long-term growth strategy. As we introduced important hardware enhancements across our product portfolio, all of which were driven by our Fortune 10 customers, who were also requiring delivery of those upgraded products in the second quarter, we were limited to U.S.-based capacity as our contract manufacturer overseas was unable to retool its line in time to produce any volume in the second quarter. As a result of these limitations, our U.S.-based contract manufacturer incurred one-time costs associated with retooling and upgrading production lines. These investments were necessary to support the enhanced product design, improve manufacturing capability, and position us for higher production volumes going forward. While these transition costs impacted this quarter's margins, they are not expected to continue at the same level going forward. Second, we experienced supply chain disruptions affecting several critical components. Disruptions were partly attributable to the AI-driven vacuum effect that resulted in finite global supplies of critical components being directed to hyperscalers. To maintain production schedules and meet customer commitments for Q2, we sourced components from alternative suppliers at a higher than normal cost. Although these actions created incremental material cost pressure, they enabled us to avoid significant production delays and preserve our delivery commitments. As supply availability normalizes and our primary sourcing channels stabilize, We expect this cost pressure to diminish. Third, we made a deliberate decision to prioritize product availability for large strategic customers. In certain situations, we absorbed higher input costs rather than delay shipments or disrupt customer deployments. While this resulted in lower gross margins in the near term, We believe it was the right strategic decision to judiciously ramp our U.S.-based capacity in order to protect customer relationships, support continued revenue growth, and reinforce our reputation as a reliable supplier. Taken together, these factors reduced gross margins during the second quarter, but should be viewed as transitional rather than structural. Importantly, demand for our product remains strong. Our competitive position continues to improve, and none of these factors change our long-term margin objectives to reach 40% plus gross margins. Looking ahead, the production line upgrades are substantially complete in the U.S. and are in progress at our overseas contract manufacturer. with a goal of producing a limited volume of products overseas during the third quarter and expanding that volume in the fourth quarter. We are actively managing supply chain conditions, and the extraordinary costs associated with component sourcing are expected to moderate over time. As these temporary headwinds subside and operational efficiencies are realized, We expect gross margins to progressively improve over the coming quarters. Our strategy has always been to optimize long-term shareholder value rather than maximize quarterly results. We believe the investments we made this quarter strengthened our manufacturing capability, protected key customer relationships, and positioned the business for sustained growth. We remain confident in our ability to return gross margins toward our historical range while continuing to deliver revenue growth. I also want to note that effective July 1st, we implemented a price increase across our product lines. This pricing action, combined with the production normalization and revenue scaling, supports our confidence in the Q3 and Q4 margin recovery I just described. One additional highlight worth noting, in the second quarter of 2026, five customers accounted for approximately 74% of our revenue. Compare that to a year ago when two customers accounted for approximately 94% of revenue. That shift reflects meaningful diversification of our commercial base across multiple enterprise relationships and verticals. and it is a trend that we expect to continue as our pipeline advances. I will now provide updates on each of our active commercial programs before turning it over to Giampaolo for the broader pipeline and technology discussion. Our active commercial deployments are the programs where our technology is live in production environments Generating Revenue Today and Scaling in Scope and Geography. I want to give investors specific updates on each program because the trajectory of these relationships is the most important indicator of where the business is headed. Our first and largest active commercial deployment is with a leading national retailer across its distribution and retail network. Program targets approximately 4,700 U.S. retail locations, and we have delivered thousands of PowerBridge Crow units to ensure that the project remains on track to complete installations across those retail stores based on the customer's schedule. That milestone completion is significant. will mark the full build out of the initial program scope and establishes a baseline for expansion discussions already underway. Approximately 90% of the rollout has now been completed, representing a major milestone for both the customer and energies. What is particularly exciting about this relationship is it is not standing still while the initial store rollout completes. The customer is actively testing additional use cases within retail stores that go beyond the original cold chain compliance, including state of inventory plan and in-store internalized parcel delivery applications. We also believe that both distribution centers and their tracking fleet could represent expanded deployment opportunities in the future. These conversations reflect a customer that has gained confidence in the technology's production scale performance and is now exploring what else it can do within the same installed infrastructure. Beyond the retail store program, we are also working with this customer across approximately 50 of its membership warehouse locations. We are supporting a cold chain initiative with this major retail customer by helping enable real-time visibility into patent movement, pallet movement throughout the receiving process. The objective is to improve operational efficiency and strengthen cold chain compliance by providing continuous insight into asset dwell time from the loading dock to refrigerated storage. The plan is to expand that program to approximately 550 locations at the beginning of next year with what we believe could be a broader rollout in 2027. We are encouraged by the trajectory of this relationship and the scope of what it could represent over the next 12 to 24 months. Our second Fortune 10 commercial deployment is with a major enterprise in the e-commerce, technology, and cloud services sector is accelerating in a way that we believe investors should understand because the scale of what is developing is substantial. When we reported on this program in Q1, we noted 14 international installations outside the U.S. That number has grown, and more importantly, the scope of the program has expanded significantly in both geographies and use cases. This customer is now actively deploying across multiple international markets with several new countries on the expansion roadmap. The international dimension of this program alone represents a deployment opportunity that is many multiples of what we initially described. Equally important is the use case expansion within this relationship. We are currently supporting a total of five distinct use cases that are in active deployment. None of the five are fully deployed yet at scale. Each is in earlier stages of what we believe will ultimately be a very large multi-use case, multi-geography, and multi-facility program. The breadth of what this customer is building with our technology across use cases and geography simultaneously is a testament to the platform's versatility and the depth of this commercial relationship. One additional proof of concept I'd like to touch on is an update on a program that was characterized only broadly in our Q1 commentary. We were in an active commercial program with a major federal government agency focused on the transport and processing of letters and packages across its facility network. This program is directly enabled by our U.S.-based contract manufacturing capability which meets the domestic manufacturing requirements that are a condition of federal procurement. That strategic infrastructure investment is paying off in exactly the way that we anticipated when we made it. The proof of concept program is currently active. It generated meaningful revenue in the second quarter and was one of our top five customers. The use case centers on dock door operations specifically checking items in and out and loading materials onto trailers where real-time wireless tracking eliminates manual processes and improves throughput accuracy. We are in discussions about the multistage deployment that could span up to 500 sites over the next two to three years. In the near term, we believe this program has the potential to ramp to a substantially larger number of active sites within the next 12 months. The government sector represents a category of enterprise customer where domestic manufacturing requirements, infrastructure security standards, and system reliability benchmarks all work in our favor. This program is early stage in the context of its full potential, and we look forward to providing further updates as it advances. I will now turn it over to Giampaolo, our Chief Strategy and Growth Officer, to discuss our technology platform advances, the Wiliot partnerships, our proof of concept pipeline, and the broader commercial dynamics we are seeing. Giampaolo?

Thanks, Mallorie. I intend to cover four areas today, an important product capability update that is driving increased demand, an update on the wallet partnership and what it means for our pipeline, a program by program update on our proof of concept portfolio, and a discussion on how the enterprise sales cycle is evolving in ways that we as investors need to understand to properly evaluate our pipeline. On our Q1 call, We described our PowerBridge platform as a wireless power network providing ambient IoT, powering ambient IoT, delivering wireless power to battery-free devices and sending the data they produce to the cloud, providing real-time visibility into the physical layer. That is essentially what we are selling, real-time visibility. That description remains accurate, but something important has evolved in how customers are deploying and requesting our technology, and I want to explain it because it directly drives Demand Growth. Previously, our PowerBridge transmitters were primarily deployed alongside a nearby Bluetooth gateway to route the data from battery-free sensors into the cloud. While effective, this required separate gateway hardware at each deployment site. We have now added integrated data capability directly into the PowerBridge Pro class. which means that the device simultaneously delivers wireless power and provides data pathway into the cloud without requiring a separate Bluetooth gateway infrastructure. The product application is significant. The PowerBridge Pro Plus with integrated gateway capability simplify deployment architectures, reduce hardware footprint per site, and give customers an easier, more reliable path for center data to travel into the cloud infrastructure. for enterprise customers managing deployment across hundreds of thousands of sites, eliminating a component, reducing installation complexity, and ongoing maintenance requirement at scale. Customer demand for this capability has been strong. We are seeing requests from both existing customers and new pipeline opportunities, specifically seeking the integrated data plus power solution. believe this capability has commercial potential beyond our end-to-end solution. Our William partnership is one example of where the PowerBridge ProPlus is being evaluated for broader deployment. Turning to our William partnership, they continue to be a strong partner and I want to provide context on the nature of that relationship and what it means for our commercial pipeline in a way that we have not fully articulated before. Williot has done an outstanding job advancing the industry with its battery-free sensing platform and data intelligence capabilities. What's often overlooked, however, is that every physical AI solution ultimately depends on a reliable energy layer. Sensors can only generate persistent intelligence if they have access to persistent energy. In deployments where undead energy alone cannot consistently support enterprise-scale performance, RF wireless power infrastructure can provide a predictable energy layer that helps enable confused sensing and trusted operational data. That's where energies contributes, providing the infrastructure that connects the physical world to enterprise AI. As enterprise deployments scale from pilots to production, the conversations shift from simply connecting sensor to ensuring they can operate reliably and continuously. That's where energy infrastructure becomes increasingly important. Battery-free sensing, persistent connectivity, and enterprise AI all depend on a trustworthy source of energy. The programs we are supporting together demonstrates how RF wireless power infrastructure complements battery-free sensing to deliver the persistent stream of operational data that enterprise customers require. Looking ahead, We believe the role of persistent energy infrastructure will become increasingly important as physical AI deployments as they expand across larger, more complex operating environments. On our second call, we described our proof of concept pipeline as spanning retail distribution, supply chain and inventory management, food service, manufacturing, and government sector. Since that call, the pipeline has continued to develop. I want to provide a program by program update on the initiative we have previously characterized and introduce several new ones. But before I do, I want to directly address the question of commercial decision timing that we introduced on the Q1 call, because it requires context that is important for investors to have. On our Q1 call, we say We expect several active programs to reach a commercial decision during 2026. I want to provide investors with a more complete picture of what that means and how the enterprise sales cycle actually works for technology of this nature, because timing of contract signature is not the right indicator of a commercial progress. The enterprise sales cycle for wireless power network infrastructure has shortened significantly as the technology has matured. We are now seeing cycles of six to nine months for new enterprise programs, down from 18 to 24 months two years ago. That compression reflects how much more familiar enterprise customers are with ambient IoT technology and how much clearer the value proposition has become. But six to nine months is still a deliberate process and investors should understand what that process looks like. It begins with identifying the use case and the customer specific requirement. Agreeing on the key performance indicators and the success criteria that the proof of concept is designed to validate, that alignment phase alone can take more than a month. The proof of concept deployment phase can take up to three months from start to finish and depending on the results and the number of use cases being evaluated, the program might expand to include additional facilities or additional use cases before a commercial decision is made. Some customers move directly from a successful POC deployment to deployment. Others initiated a large-scale multi-location POC before committing to a full rollout. Every customer has its own requirement and its own decision process. What is important for investors to understand is that this process is a sign of the technology maturity. not a sign of pipeline stagnation. The fact that our enterprise customers are investing months of internal resources and procurement processes into evaluating our technology is evidence that they are treating this as a serious infrastructure decision, not an experiment. The program that takes longest to reach a commercial decision are often the one with the largest potential deployment scale. I also want to note an important distinction in how we manage our pipeline. In programs where we are partnering with Williott, the phase of proof of concept initiation is largely driven by Williott and its customer relationship. In programs where we deploy our end-to-end solution directly, we control the phase of deployment and the customer relationship more directly, often within the support of AWS. are valuable and both are growing. One more important point on pipeline quality versus pipeline count. A year ago, the average size of a commercial opportunity entering our pipeline was meaningfully smaller than what we're seeing today. The pipeline of opportunity we're building now is exponentially larger in aggregate than what we were managing 12 months ago. that the magnitude of the opportunity within each individual customer relationship is many multiples of what it was previously. Every program that is now entering our pipeline operates at a scale that would have been exceptional a year ago and is becoming the new one. That shift in the quality and scale of our pipeline is the most important commercial development of 2026 that we have not yet fully communicated to investors. I want to provide updates on several of our activities active proof-of-concept programs. We have completed the initial proof-of-concept deployment with a major national peak service restaurant operator. This customer was one of our top five during the quarter. The evaluation demonstrates technology performance in exactly the food preparation in the cold storage environments where battery-free wireless sensing is most valuable. including the lower range temperature environment where, to our knowledge, we are the only provider with a proven solution. We are now in active conversation with this operator about plans for a rollout across its stored network. Equally important, we are also in conversation with distributors and other participants in their ecosystem who represent additional and independent commercial opportunities. This is an important data point as national QSRs often require that their suppliers implement new operational infrastructure to augment traceability. These supplier customers include some of the most well-known QSR chain in the world. A national QSR relationship, if it focuses to its full rollout, represents a deployment potential measured in thousands of locations. In addition, gaining access to its suppliers as well create an exponential sales opportunity for us. We look forward to providing further update on this program as the planning conversation advance. Separately, we are currently in an active proof of concept deployment with a national grocery chain operating hundreds of stores. The grocery vertical is one where cold chain compliance, inventory visibility, and food safety monitoring create a compelling and immediate value proposition for wireless power network infrastructure. Importantly, this opportunity is with our end-to-end solution, is in an active evaluation, and we look forward to providing updates as it advances. Beyond the program I have described, our pipeline continues to expand. We have initiated initial proof-of-concept engagement in recent weeks across new enterprise relationships and new verticals that are not yet at the stage to discuss more specifically. What I can say is that the quality and the scale of this new opportunity reflect a market that is increasingly familiar with wireless power network infrastructure and increasingly ready to deploy it. Overall, the upgraded features of our commercial pipeline today is fundamentally different from what it was 12 months ago, and I want to make sure investors understand why. It's not just that we have more programs. It is that each program is operating at a scale of potential deployment that is multiples of what we could have seen in 2025. The Fortune 10 programs alone represent potential deployments across thousands of locations each. The QSR relationship represents potentials across thousands of locations if it progresses to full rollout. The Federal Logistics Program has a multi-stage roadmap spanning hundreds of sites. the Warehouse Club Extension Program heads hundreds of locations beginning of next year. The pipeline we are managing today is one where a single commercial decision by one or more of our advanced states partner will be transformative for our revenue trajectory. We expect to be able to report meaningful commercial advances across several of these programs over the balance of 2026 and 2027. I will now turn it back to Mallorie.