Amprius Technologies, Inc.

Good afternoon. Welcome to the Amperus Technologies first quarter 2025 earnings conference call. Joining us for today's presentation are the company 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 Amperus 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 Amperus' 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 Amperus' 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 .Amprius.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 Amperus Technology 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 Amperus to those who may be new to our company. Amperus is a pioneer and a leader in silicon-annoyed battery space. With over a decade of development experience and a long track record of commercial shipments and customer achievements, at Amperus, we develop, manufacture, and market high-energy density and high-power density silicon-annoyed batteries with application across all segments of the electrical mobility, including aviation, electrical vehicle, and the lighter electrical vehicle industries. Today, Amperus has the most complete portfolio of silicon-annoyed material systems in the industry, and the command performance leadership with the compilation of the battery energy density, power density, charging time, operating temperature, and the safety. Across our battery portfolio, we believe that we offer unmatched performance among commercially available batteries. Amperus has been delivering commercial batteries to the market with up to 450 watt per kilo, and 1150 watt per liter. Can see power capability, extreme fast charging rate of zero to 80% stay over the charge in approximately six minutes. The ability to operate in a wider temperature range of minus 30 degrees Celsius up to 55 degrees Celsius. And the safety design features that enable us to pass the United States military's benchmark and nail 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, Amperus has developed 500 watt per kilo and 1300 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, Amperus continued to demonstrate technological innovation and business growth. We introduced the new cell chemistries, developed 370 watt per kilo high-power pouch cells and the 6300 milliamp power cylindrical cells. We shipped batteries to over 100 customers. Innovative technologies and the breakthrough product performance are the foundation of Amperus' business. Following the launch of our Cyclo product platform in January of 2024, we introduced the series of new batteries and expand our portfolio. Today, Amperus has over a dozen SKUs for various customer applications. Two of the new batteries we introduced this quarter have attracted overwhelming attention and strong interest from the market. Amperus' high-energy and high-power cell with a 370 watt per kilo energy density and a 15C discharge rate sets a new performance record and a standard in lithium-ion battery industry and provides a powerful solution to the electrical mobility market, where both endurance and rapid energy delivery are important. We have been shipping this battery for evaluation to customers such as Teladon FLIR since in January. In March, we also introduced our high-energy density 21700 cylindrical cell with 6300 milliamp power capacity. This battery provides a 25% energy boost over the cells our customer currently using. We have already shipped these products to a Fortune 500 company in the later 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 the costly redesigns. This cell was recently voted best in show at the 2025 International Battery Seminar in March. This distinction marks the 30th year in a row that one of the Amperus products has won a major award at the International Battery Seminar. Immersively, water really separates Amperus from the competition. In the emerging lithium-ion battery technology space is that we are not just producing battery samples in the lab. Instead, Amperus has been manufacturing high-performance silicon-ion batteries at scale. The Amperus batteries with high energy, high power, long cycle life, and safety features are commercially available today. Our new company website, Amperus.com, provides more information about Amperus 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 Amperus. Both new and returning customers continuously recognize our -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 Amperus platform. The breakthrough performance and the large production capacity of Amperus' cycle 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 last year. This strong growth was primarily driven by a greater than 600% increase in cycle shipments since we began selling the commercial product at the beginning of last year. Cycles mass production capability have allowed us to become 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 or shipped to basis. This is the increase from 65% in the prior year period, demonstrating the expansion of our customer base worldwide. This customer devisication 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-minute purchase order from our main aerial system, OEM. This order was the result of the non-month non-testing cycle that the result in an Ampere 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 these 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, Ampeyce developed the gigawatt-hour scale cycle contractor manufacturing capability that enabled us to fulfill both of our backlog and the new orders. The availability of a large-scale manufacturing facility also help us to attract volume customers and the competing production cost. In addition to the capacity available to us with our cycle products through our partners, we have completed our hardware retrofit at our Freeman facility for our CEMEX product. We are now focused on optimizing the manufacturing process to support our customer that require the 500 watt-hour per kilo CEMEX product today. This includes our long-time customer, Auto Airbus, and our partner, AeroVirament, for the X-Time Prime U.S. Army Grant Program. Pushing up the current quarter, we enter Q2 with a significant operating momentum. We have introduced new products with a breakthrough performance, the 450 watt-hour per kilo cycle cell. Since we built our cycle platform, we have been actively working to increase our portfolio's performance. The 450 watt-hour per kilo cell is a testament to the research and the development work we have done to maximize energy density. Offering 400 watt-hour per kilo and 900 watt-hour per liter, this new cell delivers up to 80% more energy than conventional DCM-I 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. Ampere has several layers of defense for trade conflicts and tariffs. First, we believe that we deliver the highest performing cells 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 economical needs. Second, over 80% of our revenue last quarter was out of the scope for current US import tariffs because our customers were located outside of the country. For the products sold to US 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 inflate 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 Amperus is our recent announcement that Tom Stepping has joined us as the president of Amperus Technology. Tom brings over 35 years leadership experience to Amperus 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 back-end experience in growing energy and manufacturing businesses will be instrumental in guiding Amperus 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 -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 -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 Cain 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 and 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 8 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 Amperius 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 in 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 two and a half to three 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 Ampreus forward. Before I turn the call back over to King, 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 King.

Thanks, Sanger. As we look ahead, our strategy and Ampreus remains unchanged. The company is focusing on technology innovation. New product introduction, quality manufacturing, customer engagement, and the revenue growth. We realize that our success depends on our ability to execute our region. We expect to release new batteries on our product roadmap that will further our lead in the battery space. This includes new products from our cycle platform and the commercial availability of CYMAX 500 watt per kilo product. We will continue to build our book of customers with 235 customers in 2024 and additional 46 new customers in the first quarter. We are excited about the opportunity in front of us. We expect to convert this engagement into customer purchase orders as quickly as we can. We are strengthening and expanding our manufacturing capability and the capacities to better align geographically with our customers worldwide. We believe the opportunity ahead of Ampreus is tremendous. We believe we are well positioned for continued success with our industry leading silicon-anode batteries backed by gigawatt-hour scale manufacturing capabilities through our Capitolight contractor manufacturing network. Our extended customer engagement is evident in the hundreds of customers we ship to in 2024, including both new business and the repeat orders from our market customers. From a financial perspective, we are in excellent shape with adequate cash reserve at a low burn rate, low debt and our existing -the-market sales agreement provide additional flexibility. These competitors will help us continue to support a strong and growing business throughout the rest of the year and beyond. Over the next few months, we'll be attending several industrial and financial conferences. We hope to see you there. Thank you for your continued support of Ampreus technology. With that, I will turn it back to the operator for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment while we poll for questions. And our first question comes from Colin Rush with Oppenheimer. Please proceed with your question.

Thanks so much, guys. You know, the order number in a quarter is pretty impressive to have a -to-one book to bill. You know, and having the relatively high volume of incremental customers that you guys are talking about here for several quarters, I'm curious about how you guys are going to be able how that testing activity is going with those customers and how quickly some of that might translate into incremental orders here for you guys as you get through the balance of the year.

Yeah, Colin, the customer contract that you have mentioned, I believe we had three last customer contracts in addition to two development contracts. Those contracts would be complete before end of the year. Some contracts would be completed in Q2.

Excellent. And then, you know, as you guys think about, you know, the diversity of those customers, how important is it to have some non-China manufacturing for the Sycor product line? Is that something that we could see get ramped up here in 2025 or is that something that's a little bit longer term project for you guys?

Yeah, we'll be in 2025. Very soon, you will learn from us. We have additional contract manufacturing facility all over China.

Excellent. And just the final one for me, you know, as you think about scaling the organization, you've gotten an awful lot of leverage out of existing OPEX. I'm just curious, you know, with Tom coming on, you know, and increasing sales activity, you know, what other sort of augmentation are you going to need to do in terms of team growth to support some of the trajectory that looks like it's possible here for the company?

They're calling three areas. First one is R&D because this is the foundation of our business. You can see the Ampere has a visible leadership in this industry. So that's where we will strengthen our R&D capability. Second part is the contract manufacturing and manufacturing capability. You know, we will have a stronger team built up to manage those contract manufacturing partnerships. The third one is the sales. Every quarter you will see, you know, our sales team is expanding.

Excellent. Thanks so much, you guys.

Thank you. And our next question comes from Jed Dorsheimer with William Blair. Please proceed with your question.

Hi, Tom. You have Mark Schuter on for Jed Dorsheimer. 83% of revenue is outside of the U.S. So that's very helpful for the given tariff situation. How do you see this progressing through the year? And has the tariff situation changed your strategy on, you know, who are the new customers that you're going to be sampling with, of the new 43? Will that change anything going forward throughout the year?

First, Mark, the tariff is not our primary concern because we have a very, very competitive cost base. So in addition, we have a global reach to our customers. So we don't see a dramatic increase of a domestic customer base.

Okay, that's very helpful. Thank you. And congrats on the success of the Cycor product. Speaking to that, have you seen any competitive products from the giants in China like CATL or BYD considering your manufacturing in their backyard and if they have access to similar advanced silicon materials without giving away the secrets? What does Ampreus have that these big competitors are missing that puts your performance so far ahead?

Mark, I think the major difference is market participation. All those large incumbent manufacturing companies focus on EV segment and consumer electronics segment at this moment. So their cell chemistry, their cell design are quite different from Ampreus. Now, Ampreus today, we have the most complete silicon technology portfolio. We have silicon monoxide, silicon carbon, silicon nanowire. We're even working on the more advanced silicon anode today. So I think the market we focus on not the market concentration of those incumbents. That's the number one. Number two, we do have a very unique cell chemistry. I don't mean they cannot develop it someday, but at this moment we're certainly in the leading position.

That's very helpful. Thank you.

Thank you. And our next question comes from Chip Moore with Roth MKM. Please proceed with your question.

Thanks for taking the question. Hey everybody, maybe just a follow-up on that last one, just more technical. Can you talk about if you're incorporating, blending any third-party silicon anode materials into some of the newer products and you know, any vendors you might be using?

Yeah, we discussed earlier, we used the Fusilier silicon anode as one of our components in our cell chemistry. We have not explored, we have explored and tested other people's silicon material, but our primary source still comes from Brazil.

Gotcha. Thanks, Tang. And maybe just an update on contract manufacturing partners ex-China, just I know you'd been making the rounds in Korea and Europe. Just any update there and how to think about timelines?

Yeah, timeline. Very soon we will have contract manufacturing partners outside of China.

Okay, we'll stay tuned. Thanks, Kang.

Thank you. And our next question comes from Amit Dayal with HC, Wayne Wright. Please proceed with your question.

Thank you. Good afternoon everyone. Thank you for taking my questions. With respect to the backlog, it grew nicely in the first quarter. You know, does this set you up for sequential revenue improvements through 2025?

I would expect so. We have a very strong pipeline as you see. And our customer qualification, some of those reached an advanced stage. So we anticipate the revenue growth.

Understood. Thank you. And then, you know, with respect to some of the new offerings you are planning on launching, you know, the next few quarters. What is the risk of maybe, you know, some cannibalization taking place with the existing offerings you already have in the market?

Yes, of course. Yeah. So we always think that we need to kill all the technologies and ourselves instead of others. So this is the biggest progress we have made in the last few months to deliver new cell chemistry, new performance better, higher performance batteries. So it's going to have some influence on our existing products. But that's what the customer likes to see. That's going to enlarge the gap between us and the competitions.

The reason I was asking that Kang is, you know, because maybe the batteries need to be designed in. So as you keep launching some of these new offerings and the customers, you know, might prefer these new offerings, then do you need to start that process all over again to be designed into those offerings?

Oh, that's not going to happen because of that. Those new products are certainly aimed at a new application or upgrade their device performance. They're not going to use the new product, putting the older device to start over again.

Okay, understood. That's all I have. I'll follow up offline. Thank you so much.

Thank you. Once again, if you'd like to ask a question, please press star one on your telephone keypad. That is star one. Our next question comes from Derek Soderberg with Cantor Fitzgerald. Please proceed with your question.

Yeah, hey, Kang and Sandra. Thanks for taking the questions. Sandra, I think you said last quarter that backlog was 16 or 17 million. Looks like you shipped 11 million in product this quarter. Then you added 34 and a half to backlog. Does that mean backlog today is roughly 40 million? Am I thinking about that right?

Let's see. Let me get you the number because we just filed the queue. See, remaining performance obligations are I think it's

$37.8 million including government grants.

Perfect. Now that's helpful. Just wanted to clarify. And then a couple more. On the Fortune 500 company testing the 21700 cylindrical, so you're delivering samples to that customer for a light electric vehicle. Can you sort of share with us the expected timeline to sign a large purchase order with that customer? How long is the qualification process? Can you provide some color on that timeline?

This is a leading supplier in this industry. So we anticipate the volume orders will come in sometimes later part of 2026.

That's helpful. And then Sandra back to you. You know, as you're releasing new battery platforms, the technology continues to improve. Sandra, I think the side core gross margin is sort of in the low teens roughly. Where do you see margins heading towards as you commercialize some of these higher tech cells just such as the 21700, which I believe is the side core platform?

Can

you sort of talk about the mix shift, how that's going to help margin and how much you think pricing can help margin?

That's a great question. So we've shared that the side core product has been gross margins and cash flow positive from day one. And that's how we've made the step function improvement in gross margins. We're still running a very small footprint for Cymax. We believe our growth engine in the near term is going to be side core and

that's just going to continue to drive gross margins to be more positive over time.

And is that that 21700, is that the side core platform?

Yes.

Yes. Okay,

got it.

And then Sandra, just I think you commented on some of the Cymax investments on the scale up and then it looks like the designs are complete for the Colorado facility. What sort of growth capex do you have planned for the remainder of the year?

Very little. We're pivoting into really just run the business mode. Got it. So normal replacements

and

maintenance.

Perfect. Really appreciate it.

Thank you. And with that, no further questions at this time. I would like to turn the floor back to Dr. Tang Sun for closing remarks.

Thanks again everyone for joining us today. As a reminder, you can find out more about our company, receive additional updates and learn about upcoming events from the investor relations section of our website. We look forward to update you on the exciting progress we are making in transforming the electrical mobility market. Finally, I'd like to thank our employees, partners and the shareholders for their continued support. All present.

All right. Thank you. And with that, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time.