Amprius Technologies, Inc.

Good afternoon. Welcome to the Amperius Technologies first quarter 2025 earnings conference call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, and CFO, Sandra Wallach. At this time, all participants are in listen-only mode. Following management's remarks, we will open the call for questions. Please note that this presentation contains forward-looking statements, including but not limited to statements regarding our financial and business performance, our business strategy, future product development or commercialization, New customer adoption and new applications, our growth and the growth of the markets in which we operate, and the timing and ability of Ambrius to expand its manufacturing capacity, scale business, and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Ambrius' results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. For more complete discussion of these risks and uncertainties, please refer to Ambrius' filings with the Securities and Exchange Commission. Finally, I would like to remind everyone that this conference call is being webcasted and a recording will be made available for replay on the company's investor relations website at ir.ambrius.com. In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the investor relations website. I'll now turn the call over to Ambrius Technologies CEO, Dr. Kang Sun, for his comments. Sir, please proceed.

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our Q1 performance and our recent accomplishments while also highlighting milestones we look forward to achieving soon. After that, our CFO, Sandra Wallach, will discuss our financial results for the period. Then I will share some closing remarks before opening the call for questions. Before I give a recap of the quarter, I would like to briefly introduce Amperes to those who may be new to our company. Amperes is a pioneer and a leader in silicon anode battery space. With over a decade of development experience and a long track record of commercial shipments and the customer achievements. At Amperes, we develop, manufacture, and market high energy density and high power density silicon anode batteries with application across all segments of the electrical mobility, including aviation, electrical vehicle, and the light electrical vehicle industries. Amperes has the most complete portfolio of silicon and other material systems in the industry and commands performance leadership with its combination of the battery energy density, power density, charging time, operating temperature, and safety. Across our battery portfolio, we believe that we offer unmatched performance among commercially available batteries. Amperes has been delivering commercial batch piece to the market with up to 450 Wh per kilo and 1150 Wh per liter. 10C power capability, an extreme fast charge rate of zero to 80% stay of the charge in approximately six minutes. The ability to operate in a wide temperature range of minus 30 degrees Celsius up to 55 degrees And the safety design features that enable us to pass the United States military's benchmark and near penetration test. Each of these performance parameters is critically important to real-world electrical mobility applications. Not only do our batteries enable certain aircraft and vehicles to maximize performance, but they enable our customer to achieve their economic targets as well. In addition, Amperes has developed a 500-watt per kilo and a 1,300-watt per liter battery platform that was validated by a third party. It's our belief that there are no other commercial batteries on the market that can perform at these levels today. In the first quarter, Amperes continued to demonstrate technological innovation and business growth. We introduced the new cell chemistries, developed a 370-watt per kilo high-power pouch cells, and the 6,300 milliamp-hour cylindrical cells. We shipped batteries to over 100 customers. Innovative technologies and the breakthrough product performance are the foundation of Ampere's business. Following the launch of our Sitecore product platform in January of 2024, we introduced a series of new batteries and expanded our portfolio. Today, Ampere has over a dozen SKUs for various customer applications. Two of the new batteries we introduced this quarter have attracted overwhelming attention and the strong interest from market. MPS high energy and high power cell with a 370 watt per kilo energy density and the 15 seat discharge rate sets a new performance record and a standard in lithium ion battery industry and provides a powerful solution to electrical mobility market where both endurance and rapid energy delivery are important. We have been shipping this battery for evaluation to customers such as Teledyne FLIR since in January. In March, we also introduced our high energy density 21700 cylindrical cell with 6300 milliampere power capacity. This battery provides a 25% energy boost over the cells our customer are currently using. We have already shipped these products to a Fortune 500 company in the light electrical vehicle market for their evaluation. The drop-in compatibility of this cell format with our customers' product designs allows manufacturers to boost the product performance without costly redesigns. This cell was recently voted best in show at the 2025 International Battery Seminar in March. This distinction marks the third year in a row that one of Ampere's products has won a major award at the International Battery Seminar. Commercially, what really separates Ampere from the competition in the emerging lithium ion battery technology space is that We are not just producing battery samples in the lab. Instead, Amperes has been manufacturing high-performance silicon-anode batteries at scale. The Amperes batteries with high energy, high power, long cycle life, and safety features are commercially available today. Our new company website, Amperes.com, provides more information about Amperes products, technologies, and applications. is a great source for our customers, partners, investors, and shareholders. We are actively leveraging this new resource to make inroads with new customers across market segments. Q1 is another quarter with multiple commercial wins at Amperes. Both new and returning customers continually recognize our best-in-class product performance and place orders with us in the first quarter. We shipped to 102 customers, with 46 of those being new to Ampere's platform. The breakthrough performance and the large production capacity of Ampere's side-core battery enabled us to attract the customers that drive revenue growth. We generated revenue of 11.3 million in Q1 a 6% increase from the fourth quarter of last year and up to 383% from the same period of last year. This strong growth was primarily driven by a greater than 600% increase in Sitecore shipments since we began selling the commercial product at the beginning of last year. Sitecore's mass production capability have allowed us to become a cost competitive with traditional battery manufacturers who are maintaining our firm technology advantages, opening the door to new customers and then enabling large volume to current customers. In Q1, 83% of our revenue came from outside of the United States, shipped to basis. This is the increase from 65% in the prior year period demonstrating the expansion of our customer base worldwide. This customer diversification has also allowed us to grow despite the general headwinds and uncertainty created by the current tariff policies domestically and internationally. During the quarter, we also announced a 15 million purchase order from our main area system, OEM. This order was the result of the nine-month non-testing cycle that the result in a Ampere's battery being designed into the manufacturer's fixed-wing UAS platform. We remain on track to ship these cells in the second half of the year to fulfill the customer demands. Orders like this demonstrate our ability to work with the customers throughout the design and the qualification process and convert them into volume orders over time. As we previously discussed, this process generally takes anywhere between nine to 18 months for aviation customers. However, that time can be cut down significantly for customers in the light electrical vehicle sector, which is already running at scale. We have made a strong progress in penetrating the light electrical vehicle market and approximately 25% of our revenue in the first quarter came from that segment. We expect the shorter design cycles for this mature market combined with our dropping replacement batteries will help us succeed in gaining additional market shares in this growing market. In total, we add 34.5 million in new customer purchase orders to our backlog in the first quarter, giving us additional visibility into our growth for the remainder of 2025. In 2024, AMPIS developed the gigawatt-hour scale cycle contract manufacturing capability that enable us to fulfill both of our backlog and the new orders. The availability of a large scale manufacturing facility also help us to attract the volume of customers and the competing production cost. In addition to the capacity available to us with our Sitecore product through our partners, we have a complete our hardware retrofit at our Fremont facility for our CEMEX product. We are now focused on optimizing the manufacturing process to support our customer that will require the 500-hour-per-kilo CEMEX product today. This includes our long-time customer, Auto Airbus, and our partner, AeroVironment, for the X-Time Prime US Army grant program. Fetching up the current quarter, we entered Q2 with a significant operating momentum. We have introduced new products with a breakthrough performance, the 450-hour per kilo cycle cell. Since we built our cycle platform, we have been actively working to increase our portfolio's performance. The 450-hour per kilo cell is a testament to the research and the development work we have done to maximize energy density. Offering 400 W per kilo and 900 W per liter, this new cell delivers up to 80% more energy than conventional DCMI battery cells using graphene. Making it an ideal cell for aviation and electrical mobility applications. We believe that this new product, combined with the products that are already in volume production, will be the growth engine of our revenue in 2025. Ampersand has several layers of defense for trade conflicts and tariffs. First, we believe that we deliver the highest performing sales on the market today at a competitive cost. For many of our customers, it's not a question of choosing us over a competitor. We are the only solution on the market that can meet their technical and economic needs. Second, over 80% of our revenue last quarter was out of the scope for current U.S. import tariffs because our customers were located outside of the country. For the products sold to U.S. customers, we are working along the supply chain to achieve the economic solutions for all parties. In addition, we have diversified our manufacturing globally to insulate us from the potential impact of the tariffs. Like every business in today's marketplace, we are monitoring the latest policy decisions from the US government and others around the globe. But together, despite the lingering uncertainty, we remain confident in our expectations for growth for the full year based on the information we have today, as well as the proactive steps we have taken to mitigate the potential impacts. The important recent business highlight at Amperes is our recent announcement that Tom Stappin has joined us as the president of Amperes Technology. Tom brings over 35 years of leadership experience to Amperes and has a real combination of both technical expertise and market leadership at the innovative technology companies. As we expand our global footprint, Tom's decades experience in growing energy and manufacturing businesses will be instrumental in guiding Amperes through the next phase of growth. With that, I will now turn the call over to Sandra to review our financial results.

Thank you, Kang. I would now like to spend a few minutes covering some key financial updates. As a reminder, our detailed financials can be found in our shareholder letter. We ended the first quarter with $11.3 million in total revenue. As we have previously discussed, our total revenue is a combination of our main revenue streams, product revenue as well as development services and grant revenue. This quarter, 11 million came from our product revenue, representing a 0.7 million or 6% increase sequentially. Product revenue in Q1 2024 was just 2.3 million, marking a 370% or 8.6 million year-over-year increase. Our development services and grant revenue totaled 0.3 million this quarter, which was consistent with 0.3 million in Q4 2024. and up from zero year over year. As we've discussed in the past, development services and grant revenue from large development programs are non-recurring in nature, leading to greater fluctuations depending on the comparison period. The overall increase in revenue this quarter was primarily driven by the addition of new customers. As Kang mentioned, we shipped to 102 customers in the first quarter. Of these customers, only three accounted for greater than 10% of revenue, consistent with three customers in both the first and the fourth quarters of 2024. Going forward, we plan to continue adding to our customer mix to diversify our revenue streams and provide more reliable product shipments as we get to a position of scale. Now moving to our profitability metrics, gross margin was negative 21% for the quarter compared to negative 21% in Q4 2024. and negative 190% in the prior year period. As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Gross margins in 2024 were also impacted by pre-construction planning costs related to the Colorado facility, which were completed in October of 2024. Now moving on to our operating expense management. Our operating expenses for the first quarter were $7.3 million, a decrease of $2.2 million or 23% compared to Q4 2024, and an increase of $1.4 million or 24% from the prior year period. OPEX decreases from Q4 to Q1. were driven by the non-recurring loss on retirement of property, plant, and equipment discussed in our Q4 in full-year earnings of $1.9 million. Year-over-year, the increase in OPEX was driven by increased investment in sales and the reallocation of R&D from cost of goods sold as development services agreements run off. Our gap net loss for the first quarter was $9.4 million, or negative eight cents per share. with 117.9 million weighted average number of shares outstanding. In Q4 2024, our net loss was 11.4 million or negative 10 cents per share with 109.8 million weighted average number of shares outstanding. Q1 2024, net loss was 9.9 million or negative 11 cents per share with 90 million weighted average number of shares outstanding. As of March 31st, 2025, there were 95 full-time employees, down from 99 at the end of the fourth quarter, with those employees primarily based in our Fremont, California location. Our share-based compensation for the first quarter was $1.8 million compared to $2.4 million in Q4 and $1.2 million in the prior year period. The sequential decrease is primarily attributable to $0.7 million in the non-recurring grant of fully vested shares by Amprius Inc. for key employees and service providers that occurred in the fourth quarter. As of March 31st, 2025, we had 120.5 million shares outstanding, which was up 3.6 million from the prior quarter. That change includes approximately 1 million shares issued from option exercises and RSU vesting, and 2.6 million shares issued from our ATM reserve. Now turning to the balance sheet, we exited the first quarter with $48.4 million in net cash and no debt. Key drivers for cash in the quarter included $14.1 million used in operating cash flow, which was slightly higher than our projected run rate of approximately $2.5 to $3 million monthly, excluding transaction-related cost. The main cause of the variance this quarter is related to the change in working capital accounts Specifically, late quarter billings caught up in accounts receivable at the end of the quarter. 0.9 million in investment related to the Fremont, California facility. We also had 8.5 million in cash inflow from the issuance of common stock under the at-market sales agreement. We still have 57.8 million left on the facility. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive AMPRIUS forward. Before I turn the call back over to Ken, I would like to take a moment to discuss our CapEx outlook for the remainder of 2025. We expect to move to a steady state of quarterly investment in normal operating items with the hardware upgrade behind us for Fremont. At this time, there are no plans to move forward with the Colorado facility. The designs for this project are effectively complete, and we are continuing to monitor the larger industry dynamics associated with building a factory in the United States. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations, including the timing and availability of funding, will influence our decisions on the next step and timing. We have secured adequate capacity for the foreseeable future through our contract manufacturing network and plan to further expand that in 2025 without deploying our capital. That concludes my financial discussion, and I will now pass the call back to Cain.