Amprius Technologies, Inc.

Good afternoon. Welcome to the Ambrius Technologies third quarter 2025 earnings conference call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, President, Tom Stepien, and CFO, Ricardo Rodriguez. 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 products 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 its 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's filings with the Securities and Exchange Commission. This presentation includes a non-GAAP financial measure, which is adjusted EBITDA. This non-GAAP financial measure does not replace the presentation of AMBRIUS's GAAP financial results and should only be used as a supplement to not as a substitute for Ambrose's financial results presented in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies. A reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is included in our shareholder letter, a copy of which is filed with the SEC and posted on our website. 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 begin with a brief company overview. After that, our president, Tom Stepin, will recap our third quarter performance and the key accomplishments. Next, our CFO, Ricardo Rodriguez, will discuss our financial results for the period. I will share some closing remarks before opening the call for questions. Let's begin. Amperes is a pioneer and leader in silicon annual battery space with over a decade of development experience and a proven track record of commercial success. At Amperes, we develop, manufacture, and market high energy density and high power density silicon annual batteries with applications across all segments of electrical mobility. including the aviation and the light electrical vehicle industries. Today, Amperes has the most complete commercially available portfolio of city handle materials assisting in the industry. And the comments performance leadership with this combination of battery energy density, power density, charging time, operating temperature range, and safety. Across our battery portfolio, we believe we offer unmatched performance among the commercially available batteries. Amperes has been delivering commercial batteries to the market with up to 450 Wh per kilo and 1150 Wh per liter. 10C power capability. Extreme fast charge rates of 0 to 80% steel charge in approximately 6 minutes. the ability to operate in a wide temperature range of minus 30 degrees up to 55 degrees Celsius, and the safety design features that enable us to pass the United States military benchmark and new penetration test. Each of these performance parameters is critically important to real-world electric mobility applications. Not only do our batteries empower certain drones, satellites, and the vehicles to maximize performance, they also enable our customers 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 has been validated by an independent third party. with our belief that there are no other commercial batteries on the market that can perform at this level today. In the third quarter, we continued to execute against our strategy of developing leading battery performance, converting that innovation into customer wins, and scaling our manufacturing through a capital-efficient concrete manufacturing model. With that, I will now turn the call over to our president, Tom Stepping, to detail the highlights of our record quarter. Tom.

Thank you, Kang. AMBRIUS finds itself at a very fortunate point in time, at the intersection of a fast-growing electric aerospace market with an industry-leading set of battery products. This advantage situation, coupled with strong execution by our team allowed us to achieve record revenue in the third quarter. We attracted new customers, continued to optimize our operations, and released compelling new products. Let's start with updates on our commercialization strategy and share execution details. In the third quarter, we shipped batteries to 159 end customers, 80 of whom are new to the Amprius platform. The remaining 79 are repeat customers, Now to be clear, we don't ship to every customer in every quarter. We do expect to gain new customers every quarter, albeit not always 80 new ones. But we expect to gain new customers nevertheless. Since the first quarter of 2023, Amprius has built relationships with hundreds of companies and shipped batteries to a total of 444 end customers. This strong and expanding customer traction comes from the superior performance of our batteries compared to traditional cells. As we continue to move new customers through the qualification process, you're also seeing that we have plenty of room for expansion orders within our existing agreements. In the third quarter, our revenue totaled $21.4 million, a 42% increase from the second quarter and up 173% from Q3 2024, a year ago. Our second generation Sycor batteries led the revenue charge in Q3 with a greater than 4x increase in shipments compared to Q3 2024. Sycor is a proprietary silicon anode that uses standard lithium ion processing equipment. In August, I visited a couple of our contract manufacturing partners. At one, They were making conventional graphite cells in the morning, and in the afternoon, they were producing our SciCore silken cells. Same line, same equipment. SciCore standardization helped us enable a second consecutive quarter of positive gross margin. Ricardo will provide more context here when he reviews our financial highlights next. Looking at our customer base, about 75% of our revenue in the quarter came from the aviation segment, led by unmanned aerial systems, or UAS market. The remainder of our Q3 revenue was primarily derived from the light electric vehicle sector, which remains healthy but has a lumpier profile due to the customer's variant product introduction cycles. The LEV market tends to have short design and cycles, and we believe our drop-in replacement batteries can help us succeed in gaining market share in this growing market. From a geography standpoint, 75% of our revenue came from outside the United States on a ship-to basis. Our strong customer diversification supports steady growth, even amid uncertainty driven by U.S. tariffs, and customer delays related to the US government shutdown. One of our major wins this quarter was a $35 million purchase order from a leading UAS manufacturer, which we announced in September. This order is a follow-on purchase from the same customer that placed a $15 million order earlier this year. While we continue to grow our customer base across geographies, applications, and budgets, These kinds of large repeat orders underscore the built-in growth engine that we have within our growing customer base. It also highlights the proven performance at scale of our batteries. During the quarter, we also deepened our relationship with another key customer, AeroVironment. As a part of the U.S. Army's Extech Prime program, we shipped samples of our ultra-high energy cells for evaluation in a variety of applications. These cells reach up to 520 watt-hours per kilogram and vastly improve endurance, payload capacity, and mission economics for high-altitude platforms. Another key Amprius partner in the drone segment is Nordic Wing in Denmark. In Q3, they chose our Psycorps cells to power their UAV platform after an extensive qualification and evaluation period. Their Astero ISR is a fixed wing craft with a wingspan of about 2.3 meters. In its standard configuration, it weighs around four and a half kilograms. ISR is an acronym for intelligence, surveillance, and reconnaissance. In drone speak, intelligence is a collection, processing, and analysis of information to support decision making. For example, drone cameras will see the beginnings of the forest fire, and the built-in smart analytics will make a decision to send a dispatch signal to the appropriate firefighting equipment. Surveillance is the systematic observation of an area, person, or activity over time, continuous monitoring of a border or a convoy route, for example. Reconnaissance is a specific mission-focused gathering of information, usually short-term and targeted. Is the fire really extinguished? The Astero ISR with the Amprius Psi-Core batteries flies 90% longer than with standard cells. 90% improvement, almost twice the flight time. Astero stays airborne longer, covers more ground, and delivers real-time intelligence without interruptions. This enhanced endurance doesn't just improve performance. We believe it redefines what's possible in every mission, and can mean the difference between success and failure. Looking a bit further out, we continue to make inroads in our relationship with Amazon. After being selected for the inaugural Amazon Device Climate Tech Accelerated cohort in July 2025, we successfully advanced to the integration assessment phase. This stage involves comprehensive testing of feasibility, customer value proposition, sustainability impact, and supply chain readiness. We are excited about this opportunity to continue working with Amazon in this next phase, and we'll share further updates as we are able. All of these recent customer wins further demonstrate our ability to scale up to meet volume purchase orders, which we believe will continue to increase as we expand our customer funnel and continue to extend the state of the art that our cells provide. State of the art includes external testing. We rigorously test new products both internally and send them to external labs where they are tested against international safety standards. These include United Nations 38.3, standards maintained by the International Electrotechnical Commission, and for our customers in India, the Bureau of India Standards. This quarter, we introduced two new SICOR pouch cells and three new SICOR cylindrical cells that are optimized for unmanned aerial systems, high-altitude platform systems, and the electric airplane duty cycles. We call these balanced power and energy cells. Electric aerospace platforms typically require balanced cells, You need high power, high sea rate capability for takeoff and landings, and you need the high energy to enable long range. Products like these balanced cells further differentiate Amprius from traditional battery players. Many of our end customers participate in shootouts and fly-offs competing for their own contracts. They need to demonstrate best up-in-class performance. We help them win. Our batteries give them more kilometers, allow additional kilograms, provide more watt hours that support their onboard intelligent components. We believe that the electric aerospace is on the cusp of a multi-year transformation propelled by defense and commercial demand for a new era of AI-driven autonomy. McKinsey estimates this market is $40 to $50 billion today, growing to $80 billion by the end of the decade. About 10% of that market and 10% of a drone's bill of materials is for batteries. Recent regulations and policy changes appear to be market accelerants. The U.S. executive orders over the summer that promote domestic drones is one piece of evidence. A second is the proposed changes to the beyond visual line of sight rules that the U.S. Federal Aviation Authority is debating. BVLOS is a significant unlock for drones. We expect these policy actions will accelerate adoption timelines and open new opportunities across the board. We've already experienced strong traction from the defense market and expect growing interest from these customers in the year ahead. Estimates show that more than $10 billion from the one big beautiful bill will be allocated to defense and unmanned systems. And we believe that we are well positioned to benefit from this increased funding. Anecdotally, we have already seen optimism surrounding the government funding translating to strong buyer intent. Last month, we exhibited at the AUSA conference in Washington, DC, where we met with dozens of defense contractors that were either interested in or already using our products for their drones. We also attended US and international conferences. Commercial UAV Expo in Las Vegas, Defense and Security Equipment International in London, and the Drone X Expo also in London. At all of these events, we heard a similar message. Drones are an important part of the future, and Amperius batteries are at the forefront of innovation to power them. As a key component supplier for unmanned drone systems, we have had our own success working with the U.S. government. As we discussed during our August 2025 call, We are working closely with the Defense Innovation Unit. Our DIU contract gives us funds to increase the capacity of our Fremont, California, pilot line to 10 megawatt hours and expand our capabilities to support quick-turn, side-core customer prototypes. Since our last update, we have received an additional $1.5 million follow-on contract, bringing our DIU contract total to $12 million. Our program mandate includes qualifying individual lithium ion battery components from National Defense Authorization Act, NDAA, compliance suppliers, which will allow us to work more seamlessly with the DOD. This includes considerations of the anode and cathode active materials, electrolyte, and separator. This effort is part of a large momentum shift to U.S. domestic production of batteries. As we worked on building out an NDAA-compliant supply chain and production capacity for our customers that require it, we have continued to utilize our contract manufacturers to support our rapid growth. As a reminder, we have over 1.8 gigawatt hours of capacity available to us through our partners, including our most recent added partner in South Korea. Let's put that 1.8 gigawatt hours in context. Our SA08 cell is our best-selling battery. It has an energy rating of 38 watt hours. 1.8 gigawatts over 38 watt hours works out to be about 50 million cells per year. We have tremendous headroom on our manufacturing capacity. This capital-efficient model provides production-grade cells for qualification today and supports our ramp to volume while still allowing configuration control and aerospace-aligned quality systems. We are also opportunistically sourcing additional partners to provide us with greater geographic diversification and operating flexibility. As we headed to the tail end of the year, we've carried our momentum into the fourth quarter. A few weeks ago, we announced that ES Aero, another leading UAS company, chose our side core SA08 cell, to power the Group 1 and Group 2 UAVs that support defense, security, logistics, and public safety applications. They chose us because, in their words, Amprius, quote, offered the best combination of advanced battery technology, production readiness, and cost competitiveness to meet the program demands, unquote. We have talked extensively about our defense applications for our batteries. We see a large and growing opportunity in the public safety markets also. According to a Police One article, more than 1,500 U.S. police departments have DFR programs, drone as first responders. Their systems are tied into the 911 emergency systems and are dispatched to help find a lost child, monitor smash and grab suspects, and understand if the fire is a spark or an inferno. We look forward to continuing to support the drone sector as it scales and evolves into more mission critical and business critical use cases. On a final note, we also made the exciting announcement that Ricardo Rodriguez has joined Amprius as a new financial officer. Ricardo has a proven track record of driving growth with financial discipline and high performance markets and he will serve as a valuable guide as we expand our commercial reach scale global manufacturing, and reinforce Ambrace's leadership in the advanced battery technology. Since he joined on October 6, exactly one month ago, we have aligned on objectives, agreed strategies, and developed plans. He is a tremendous addition, the right person at the right time. I look forward to working with and learning from him. Ricardo, it's all yours. Please share our financial results for the third quarter.