Amprius Technologies, Inc.

Good afternoon. Welcome to the Amprius Technologies fourth quarter and full year 2025 earnings conference call. Joining us for today's presentation are the company's CEO, 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 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 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 Ambrose'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 Ambrose's GAAP financial results and should only be used as a supplement to, not 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 press release, 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 press release that accompanies these results, which can also be found on the investor relations website. I'll now turn the call over to Amprius Technologies CEO, Tom Stepien for his comments. Sir, please proceed.

Welcome everyone. And thank you for joining us this morning. Let's start with slide two. 2025 was a landmark year for Amprius. Our second generation Sycor silicon anode batteries gained broad adoption with many unmanned aerial vehicle customers. One recent win I'd like to highlight is Nokia Drone Networks, whose commercial drone-in-a-box system is one of the most capable platforms on the market. Ampreus balanced cells provide Nokia drones with the burst power needed for takeoff and the sustained energy required for extended flight, ensuring obstacle avoidance, return to home, and other safety-critical subsystems remain powered throughout the mission. Our technology enables drones to fly longer, carry more, and operate in conditions once considered impractical, helping customers improve safety, reduce downtime, and increase mission value. In early January, we were honored to receive a Best of Innovation Award at CES. Our silicon-handled lithium-ion battery was selected from the thousands of entrants for delivering an industry-leading 520 watt-hours per kilogram. For perspective, that is nearly twice the energy density of conventional graphite-based lithium-ion cells. Our cells are lighter, longer, and stronger. In December 2025, the U.S. updated the National Defense Authorization Act under the revised NDAA Batteries used in Department of War UAVs must meet two key sourcing requirements. First, final battery assembly must be conducted by a non-foreign entity of concern, typically located in the United States or in an allied nation. Second, functional cell components must not be sourced from or produced by an FEOC. For new DOW acquisition programs, both of these requirements must be met by January 1st, 2028, approximately 22 months from now. NDAA is important in the context of our contract with the Department of War's Defense Innovation Unit. Awarded in July 2025 through a competitive solicitation from the winter of 2024, the contract was recently increased and now totals $14.8 million. The DIU contract provides prototyping funds for Amprius to accelerate production of NDAA-compliant SICOR pouch cells used in military unmanned autonomous systems. The contract includes milestones for supply chain diversification, pilot line expansion in Fremont, California, and the selection of NDAA-compliant contract manufacturing partners. Amprius is ahead of schedule on NDAA compliance. One of our South Korean contract manufacturing partners has been delivering cells to customers since September 2025. We have expanded the Amperius Korea Battery Alliance to three contract manufacturing partners. And in early January, we announced our first U.S.-based partner, Nanotech Energy, located in Northern California. I'm happy to report that our scorecard for the battery component sourcing is 11 out of 11. All internal Sycor components, anode, cathode, electrolyte, separator, and seven additional elements are now sourced from primary and secondary suppliers in NDAA compliant countries. We are prepared to supply domestic cells to customers such as L3Harris Technologies, which delivers integrated solutions across space, air, land, sea, and cyber in support of national security. On the financial front, we completed our at-the-market financing facility during the fourth quarter. We also fully exited our Colorado facility and settled the remaining lease and expense obligations. Fourth quarter revenue reached a record $25.2 million, representing an 18% quarter-over-quarter improvement and a 137% year-over-year increase. Gross margin improved to 24%, a 9 percentage point increase quarter-over-quarter, and a 45 percentage point increase year-over-year. Full-year 2025 revenue reached $73 million, 3x our 2024 level. Gross margin for the year was 11%, up significantly from the minus 76% in 2024. Later in this call, Ricardo will share additional financial details and color. Now turning to slide three. Amprius customers choose our batteries because they materially improve the performance of their products. By replacing standard graphite-based cells with our silicon-based cells, customer drones achieve significantly longer flight times. One way to think about our batteries is through the analogy of Expresso. Espresso delivers the same amount of caffeine, energy, as a standard cup of drip coffee, but in a much smaller volume. And if you match the volume and weight of the two, Espresso gives you roughly twice the energy. Drone customers tell us this consistently. Amperius batteries extend their flight time. In many cases, flight times double. Amperius Espresso batteries give customers the extra energy they need to elevate system performance. We elevate without compromise. The Amprius Silk & Ando platform spans 22 cell designs across multiple chemistries, pouch and cylindrical formats, and a range of sizes. We have tuned and optimized cells for specific customer duty cycles, giving us the precision to deliver ideal solutions for energy-focused missions, the takeoff power required by air taxis, and applications demanding high cycle life. This tunability is a significant differentiator for AMBRIUS. Slide four looks at our market segments. We serve five principal end markets. The first is UAVs, including drones used for defense, public safety, security, and logistics. Defense platforms that require high energy density typically support long loiter missions and are primarily ISR, intelligence, surveillance, and reconnaissance. Public safety drones are typically DFR, drone as first responder, systems integrated directly into 911 emergency workflows. In the U.S., more than 1,500 emergency departments now operated DFR programs as a part of real-time response operations. Drones are pre-positioned in fixed launch stations across the city and are dispatched automatically or semi-automatically the moment a 911 call is received. The objective is to get a camera over the scene in under two minutes, well before police, fire, or EMS units can arrive. Market segment number two is satellites and space. Satellite launch providers charge customers by the gram, making our ability to deliver the same energy at roughly half the weight our expresso advantage extremely valuable. ALTO, a division of Airbus, is a longstanding customer in this segment. Its Zephyr high-altitude pseudo-satellites are solar-powered aircraft that operate at 70,000 feet for months at a time. The persistent ISR capability that Zephyr provides is strategically important for both defense and commercial applications. Amperia cells are also gaining strong traction in light electric vehicles, including e-motorcycles, scooters, and e-bikes. Winds in this segment typically align with the launch of new models, so revenue tends to be lumpier than in other markets. This category also includes a healthy replacement and range extender subsegment, an area we are beginning to explore. Robotics is our fourth market segment, and while still early, it is developing quickly. Robot performance is closely tied to battery capability, and Amprius's tunable cells can deliver both the high power needed for tasks like lifting and the energy required to maximize time between charges. With strong growth rates and expanding use cases, this segment is highly promising. The final segment that depends heavily on our industry-leading energy density is the electric vertical takeoff and landing aircraft. EVTOL and other advanced air mobility customers are developing autonomous, point-to-point regional transport for both passengers and cargo. Several companies are currently testing ourselves, and we have a customer-funded joint development program underway with one leading company. In this program, we are tuning our chemistry to meet the specific power and energy requirements of their aircraft. Turning to slide five. Amprius captures customer interest through our flexibility. We work closely with customers to understand their energy, power, and cycle life requirements, then select internal components that meet those needs while aligning with country of origin constraints. Because Sitecore cells are produced on standard lithium ion equipment, we can secure early design wins from our California pilot line and seamlessly transfer cell recipes and process steps to our contract manufacturing partners as volumes scale. During Q4 2025, we introduced three new cells to our silken handle platform and retired one. The portfolio now stands at 22 designs spanning energy, power, and balance cells in both pouch and cylindrical formats. We continue to offer the tunability, speed, and flexibility our customers rely on. Now turning to slide six, Increasingly, customers care about the country of origin for both battery cells and internal components. Much of this is driven by the NDAA requirements discussed earlier, and the impact now extends to non-defense customers as well. Avoiding foreign entities of concern has become a compliance mandate, not just a marketing detail. procurement teams are asking detailed questions about where cells are manufactured, where anodes and cathodes are processed, and where critical minerals originate. Fortunately, we anticipated this shift and began executing more than a year ago. In 2025, we announced our first NDA-compliant contract manufacturer in South Korea, which delivered sales to customers just one quarter later. Last week, I was in South Korea with several of my Amprius colleagues, visiting component suppliers, checking in with current contract manufacturing partners, supporting new partners coming online, and meeting customers at our booth at Drone Show Korea. We still have work ahead on the NDAA supply front. With multiple contract manufacturers, 22 cell models, and 11 internal components, aligning every variable is operationally intensive. But we got an early start, we invested wisely, and we consistently share our progress with customers. They understand our roadmap. for both cell manufacturing and for cell content sourcing, and to respect our ability to deliver the right cell from the right location at the right time. On slide seven, we present our high-level cell roadmap. The Amperius roadmap highlights our industry-leading energy density on the vertical axis over the next 18 months. It organizes our portfolio into three cell types. High energy cells, where long uptime drives range and usability. Key segments here include drones, robotics, and LEDs. Number two, high power cells, which deliver short, intense power bursts. Applications include power tools, data center backup systems, and aviation platforms such as EV tools and drones that require power pulses for takeoff and landing. And long life balance cells. designed for applications that demand both power and energy along with extended cycle life, including EV tool, satellite, and medical device applications. We routinely share this high-level roadmap and the detailed cell information behind it with customers. We listen closely to their needs, incorporate their feedback, and adjust the roadmap as required. Now let me turn the call over to Ricardo Rodriguez, Ambrace's CFO.

Thank you, Tom, and good morning, everyone. I'm very happy to be reporting another record-breaking quarter on behalf of our team starting on slide eight. In the fourth quarter of 2025, we delivered $25.2 million of revenue. This translates into 18% growth over the third quarter, and it's over 2.3 times higher than the same quarter last year. I'm particularly excited about crossing the $100 million annual revenue run rate mark which positions us to deliver over a million dollars of revenue per employee, joining a very selective and unique group of companies. Echoing Tom's remarks, our clearly demonstrable technical edge has continued driving demand for our products as we broaden the portfolio and expanded our capacity in close collaboration with our manufacturing partners. For the year, our revenues were $73 million in line with our expectations and just over three times higher than 2024. Our Q4 cost of goods sold at $19.3 million did not increase at the same rate as our revenue, thanks to a favorable product mix and higher volumes. This enabled gross profit margins of 24%, a significant improvement over our Q3 gross margin of 15%. Our lower Cymax line mix was now below 60% of revenues, providing a powerful driver of our gross margin improvements. For the year, our gross margins were 11%, reflecting a step-change improvement over negative 76% gross margins in 2024 as our revenue from Cycore increased around the world. Our resourceful culture enabled the team to only spend $8.9 million of OPEX which excludes a one-time charge of $22.5 million linked with our decision to not develop a facility in Colorado and the decommissioning of some equipment in Fremont. The quarter-over-quarter increase in OPEX of $900,000 was driven by a targeted investment in our sales and go-to-market efforts, along with the reallocation of some R&D expenses from cost of goods sold to OPEX as development services agreements are completed. These expenses, including the one-time charge of $22.5 million that I mentioned earlier, bring our Q4 operating loss to $25.4 million compared to an operating loss of $4.7 million in the prior quarter. Without the one-time charge, our operating loss would have been $2.9 million, which would have reduced our operating loss by 37% quarter over quarter. Our dynamic applies to our annual operating loss of $46.6 million, which would have been $24.1 million without the same one-time charge and the 48% reduction of the operating loss of $46.2 million from 2024. Our gap net loss for the third quarter was $24.3 million, or negative 18 cents per share, based on 132.1 million weighted average shares outstanding. Without the one-time charge, our loss would have been only $1.9 million or one cent per share. In Q4, we recorded adjusted EBITDA of $1.8 million compared to negative $1.4 million in the prior quarter. Without $1.6 million in operating costs from Colorado, we would have actually had positive adjusted EBITDA of $177,000 in Q3 of 2025. As a reminder, we define adjusted EBITDA as net income or loss before interest, taxes, depreciation, amortization, stock-based compensation, and other items that we do not believe are indicative of our core operating performance. In Q4, these adjustments included $1.2 million of depreciation, $1.9 million of stock-based compensation, $1.1 million of interest and other income, along with $1.6 million of quarterly operating costs linked to the Colorado facility. If we adjust our EBITDA for the cost that we will now not be incurring in Colorado, our adjusted EBITDA in 2025 would have been negative $5.3 million, reducing our EBITDA loss by 77% year over year, and putting us on a path to have positive adjusted EBITDA above our current revenue run rate. As of the end of 2025, we had 134.5 million shares outstanding, which was up by 4.1 million from the prior quarter. The change includes approximately 2.3 million shares issued from option exercises, and RSU Vesting along with 1.8 million shares issued on their Hour at the Market offering program. Now turning over to cash flow and the balance sheet. We ended the third quarter with $90.5 million in cash and no debt. The main drivers of cash flow in the quarter were the following. One, $3.5 million used in operating cash flow, which was mainly driven by a near-term $1.8 million increase in accounts receivable. and a $2.1 million increase of inventory. Two, $2.4 million of Q4 investments that are being funded by the Defense Innovation Unit, or DIU, as part of our project to stand up NDAA compliant pilot and manufacturing lines. This brought our total capex in 2025 to $4.4 million. And lastly, $23.1 million from financing activities consisting of $19.6 million from the issuance of common stock under our at-the-market sales agreement and $3.5 million of proceeds from warrants and option exercises. As we announced on January 12th, we have now terminated our at-the-market offering program. Before I turn the call back to Tom, I'd like to take a moment to frame out our outlook for 2026 and the North Star beyond that, using Slide9 as the backdrop. With what we know today, we believe that by leveraging our platform and existing relationships, we can deliver at least $125 million of revenue in 2026, which would enable us to have our first full year of adjusted positive EBITDA of at least $4 million. This baseline level of profitability would translate into a net loss of $8 million for the year or $0.06 per share, assuming 134.5 million shares. When we say at least, we mean that we believe that while we're positioned to deliver additional upside, we would rather size this incremental opportunity as it happens than commit to delivering it as we work our way through what can be a great year for Amprius. Our capex for the year will be less than $10 million as we have made a decision to strategically invest in diversifying our supply chain and expanding manufacturing capacity within our Fremont facility to include electrode manufacturing. As noted earlier, we're doing this in collaboration with the US Government Defense Innovation Unit and have secured a contract for $14.8 million. With what we know today, we expect this funding to cover most of our capital investment of the next several quarters as we work to develop a growing and resilient source of supply in a dynamic trade environment. Last month, alongside the announcement of our agreement to produce cells with nanotech energy in the U.S., we also reported that we eliminated a lease and related expense obligation of over $110 million in Colorado by settling it for $20 million. As a result, you can expect our cash position in Q1 to decrease by that amount, along with the reduction of $13.4 million in right-of-use assets and the $33.2 million reduction in near-term liabilities in our balance sheet. In forecasting our cash burn, we believe that our current revenue level and even slight improvements from these can put us on a path to mainly consuming cash for working capital versus funding operating expenses in the near term. Looking further ahead, we believe that as we work through 2026, it will become increasingly clear that our plans to build an efficiently scaled multi-market leader that sets the technical pace in high energy and density power cells are realistic. As we close out the decade, we are targeting making the most of over $600 million of contracted capacity by enabling our customers' most mission-critical duty cycles and positioning us to deliver over 30% gross margins. By maintaining our resourceful culture and low-cost structure, we can then translate that into at least 20% EBITDA margins. Most importantly, the capabilities in go-to-market product development, quality assurance, and enabling scale that we'd have by then would position us for additional growth beyond 2030. That opportunity has our team energized and motivated to work together to meet and hopefully even surpass these goals by improving ourselves and how we work. And with that, I'm happy to turn the call over back to Tom for his closing remarks. Thank you very much for your attention and continued support.