Amprius Technologies, Inc.

Good morning. Welcome to the Amprius Technologies second quarter 2026 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 the company's financial and business performance, Business Strategy, Future Product Development or Commercialization, New Customer Adoption and New Applications, the Company's Growth and the Growth of the Markets in which it Operates, and the Timing and Ability of Amperius 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 Amprius' results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements. For a more complete discussion of these risks and uncertainties, please refer to Amprius' 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 Amprius' GAAP financial results and should only be used as a supplement to, not a substitute for, Amprius' 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 webcast. A recording will be made available for replay on the company's investor relations website at ir.ampreus.com. In addition to the webcast, the company has also posted a press release that accompanies these results, which can also be found on the Ampreus Investor Relations website. Before turning the call over to management, I want to highlight a few near-term IR events. Amperius will be attending the Canaccord Conference and partaking in the UBS Energy Transition Call Series next week. The team will also be attending the HCWainwright Conference and the Evercore ADAS, AV, and AI Forum in September. We hope to connect with many of you at these upcoming events. I will now turn the call over to Amperius Technologies CEO, Tom Stepien, for his comments. Sir, please proceed.

Welcome, everyone, and thank you for joining us this morning. I'm pleased to report that Amprius continues to experience robust demand for our energy-dense silicon anode lithium-ion batteries, and in the second quarter of 2026, we achieved another record revenue as we show on slide three. We believe the characteristics of our cells make them a particularly strong fit Our second generation side core silicon anode battery continues to gain broad adoption for drones and other applications. Given the strong quarter and promising new business, we have the confidence to increase our 2026 revenue forecast for the second consecutive quarter. Anyone who reads the news understands that low-cost drones are playing an asymmetric role in military conflicts around the world, changing the nature of modern warfare. As Barron's Magazine recently reported, inexpensive drones are, quote, upending the defense sector, unquote. We believe that this has been made possible in no small measure by the availability of high-performance batteries like those produced by Amprius. As you are likely aware, the Trump administration's proposed fiscal 2027 defense budget calls for more than $50 billion in outlays for the Defense Autonomous Warfare Group, an arm of the Department of War focused on drones and related hardware. The specific ask is for 24,000% year-over-year increase. While the U.S. Congress has yet to pass the 2027 spending authorization, and the actual budget might be smaller than the original request, it is nonetheless clear that the Pentagon will be making a major and growing outlay for autonomous capabilities for years to come. Our current contract with the Defense Innovation Unit gives us a front row seat in this arena. This is good news for Amprius, our customers and partners, and for our shareholders. While we expect that the budget details will be sorted out in the months ahead, there are other positive signs from the defense sector for Amprius. For instance, the Department of War's Drone Dominance Program has invited 19 drone manufacturers to a competitive demonstration event at Port Carson, Colorado later this month. Half of the participants are using Amprius cells, and we have had at least initial conversations with the rest. The Department of War has said that at the completion of the Colorado event, it will place orders for 60,000 drones from the top performers. This is one more indication that the opportunity in military UAVs is in its early stages. You may recall that our contract with the Defense Innovation Unit to develop and scale National Defense Authorization Act, NDAA, compliant silicon anode battery cells was increased for a third time in the March quarter and now totals 18.1 million. This funding supports expansion of a pilot line at our headquarters in Fremont, California. I'm happy to report that we now have received nearly half of the equipment required for the pilot line, which is undergoing installation. The remaining equipment is scheduled to arrive later this month and in September, with production expected to begin in December 2026. Our opportunity in military drones goes beyond U.S. borders. I'm happy to report that we've received a 24 million order from a new European customer, a drone manufacturer that uses our SA-124 Psi-Core cylindrical cells. We started to deliver our batteries to this customer in Q2 and will continue to do so for the next three quarters. We're excited about this opportunity. and expect to have more to talk about on this topic in the months ahead. I also want to report some recent news from our customer Redwire, a leading aerospace and defense technology company providing space infrastructure, autonomous systems and mission critical solutions for the commercial, civil and national security customers worldwide. Redwire first purchased our high energy density batteries in 2024. We're happy to see that their demand is growing. Redwire recently announced more than $40 million in purchase orders from the U.S. Marine Corps for the Stalker Block 30, a Group 2 drone designed for long-range reconnaissance. Stalker excels in missions where long-durance is critical, and that's exactly what our Psycorps cells enable. We look forward to Redwire's continued success. While we are excited about the rapid adoption of drones in the defense industry, we also continue to see substantial opportunities for commercial drones. In May, you may remember, we announced an agreement to provide high-density silicon anode cells to Matternet, the world's only FAA-type certified drone delivery platform. Amprius' silicon anode cells deliver up to twice the energy density of conventional graphite-based batteries. a critical advantage in aviation where low battery weight and high energy density directly improve aircraft range, payload, and economics. Drones, both military and commercial, are a big part of the Ambria story, but they are not our only strategically important ad market. Earlier this year, we announced a $21 million order from our premier electric mobility customer in China, to power a suite of light electric vehicles, including scooters, three-wheelers, and motorcycles. Today, I'm excited to tell you about a new e-mobility customer win. We have signed a three-year contract with Stark Future, a Barcelona-based premium electric motorcycle manufacturer. Stark's bikes are impressive with cutting-edge technology, world-class design, and amazing engineering. We showcased one of their bikes at our CES booth in January, 2026. We expect revenues from our relationship to Stark to be at least 100 million through 2029, with shipments expected to start early next year. Let's turn to slide four and discuss our go-to-market strategy. A little less than half of our sales ship directly to end-use customers, companies that sell drones for various applications, small electric vehicles, and companies in the satellite value stream. We have more than 500 direct customers, and this figure grows every quarter. The other portion of our purchase orders come from PAC partners, companies who buy or sell and package them together with appropriate electronics and sometimes a battery management system. These modules and packs are then sold to end-use customers. Our pack partner program allows us to expand our reach and simplifies customer relationships for many end-market applications. Today, we list nine pack partners on our website, and more will be added over time. This program is a light lift for our sales team and allows us to scale without adding direct sales headcount. We expect this flywheel effect to allow us to continue strong growth through this rapidly expanding channel. Let's turn to slide five. Let me take a few minutes to provide an update on our capital efficient contract manufacturing strategy. Our California pilot line gives us the ability to win new customers, allowing us to quickly deliver new cell chemistries to customers. We often do this side by side with our customers in joint development programs. We also use our free month facility to deliver small volumes of sales. We leverage our worldwide contract manufacturing partners to produce sales at volume. We have four manufacturing partners in China. Over the last several years, they have provided us with excellent quality and reliable delivery. Our China CMs have helped Amprius tremendously and there will continue to be important partners in our future. We have added several partners in South Korea. In May 2025, we announced our first partner, Libest, located in Daejeon, about a two-hour drive from downtown Seoul. Libest has been delivering Ambrose commercial sales since September 2025. We recently added JR Energy and Top Material as South Korean partners. Together, these three CMs give us the ability to produce batteries that are compliant with NDAA rules. I met with all three partners in Korea 10 days ago and can confirm that our relationships are solid, our incentives are aligned, and we are expanding well together. I also want to underscore that we believe we are well on track to reach full NDAA compliance with domestically produced cells in 2027. South Korea gives us NDAA compliant supply today, while Nanotech Energy, the U.S. contract manufacturer we announced earlier this year, provides additional U.S. capacity. We expect to talk about additional U.S. partners in the months ahead. Our partner-focused approach to manufacturing avoids substantial capital expenditures while keeping our management team focused on what matters most, extending our technical innovations and delivering these innovations to customers rapidly. Leveraging manufacturing partners rather than investing heavily in new facilities allows Amprius to scale quickly and efficiently while maintaining strategic flexibility. I want to provide a brief update on our senior management team. Last month, Ronnie Tao, a five-year Amprius veteran who until recently served as our VP of sales, moved into a new role as chief business officer. Ronnie will focus on expanding our reach into new markets, initially targeting robotics, where we see substantial opportunity for high energy density offerings. Ronnie's energy is infectious. and his recall of technical details is remarkable. Ideal qualities to drive growth into new segments. Three weeks ago, Ann Torricelli joined Amprius as our new VP of Sales. Ann has nearly two decades of experience working in energy technology sales and business development roles. She was most recently Managing Director of Energy Storage Solutions for Goshen. are the top five worldwide lithium-ion battery manufacturer. Her multicultural background, excellent communication skills, and savvy organizational traits are a model profile to lead sales for a fast-growing international company like Ambrius. We're thrilled to welcome Anne to the team. A few additional thoughts before I pass the microphone to Ricardo Rodriguez, our CFO. I continue to see wide and varied growth opportunities for Amprius in multiple markets and several geographies. As I noted earlier, there are sizable opportunities for us in drones, not only in defense, but also for commercial delivery, public safety, security, and a growing number of other applications. The massive commitment to drones from the Department of War is a positive sign But it's not the only one, and we expect drones to expand across many parts of the economy in years ahead. As highlighted by our new relationship with Stark in Spain, there is also a fast-growing opportunity for battery-powered mobility, including robotics. We are focusing some of our key executives on this emerging market for personal and commercial robots, including delivery bots, humanoid, and industrial mobile robots. It is early, and there is no meaningful robotics revenue in our numbers today. But our ability to offer power and energy balance cells plays well in the unstructured environments in which these machines operate. We expect to have more to say about this segment in the months ahead. Another opportunity that exists for us is in satellites in space, where our high energy density cells directly improve launch economics. Satellite launch providers charge customers by weight, making our ability to deliver the same energy at roughly half the weight extremely valuable. Finally, we believe there is tremendous potential for our batteries in EVTOL, electric vertical takeoff and landing aircraft, for autonomous point-to-point regional transport for both passengers and cargo. It's early in the development of EVTOL vehicles, but they are coming sooner than many think. Let me now turn over the call to Ricardo to review our Q2 results in detail.

Thank you, Tom, and good morning, everyone. I'm happy to start on slide six. In the second quarter, we delivered $34 million of revenue, up 19% from the first quarter and 2.3 times year over year. This was our sixth consecutive quarter of sequential growth, and it puts our annual revenue run rate at $136 million. We expect this to continue growing, so more on this later. For the first half of the year, revenue was of $62.6 million, up 137% year-over-year. SciCorps accounted for 98% of our revenue in Q2. Regionally, EMEA drove 68% of our revenue, with the rest of our revenue coming from the U.S. and Asia. Cost of goods sold was $24.8 million, up 9% against 19% revenue growth. That enabled gross profit of $9.3 million and the gross margin of 27%, right in line with our expectations and improving from 20% in the first quarter and 9% in the same quarter last year. For the first half, gross margin was 24%. improving from negative 4% in the first half of 2025. Total up X was 13.6 million in the quarter, up 1.2 million sequentially and 5.4 million year over year. We continue investing in our go-to-market and R&D efforts as these continue to pay off as our team wins in the market. Our operating loss in Q2 was $4.3 million compared to $6.7 million in the first quarter and 6.8 million in the same quarter of last year. Other income was 1.1 million consisting of $472,000 of interest income and $700,000 of government grant income tied to our work with the Defense Innovation Unit. Our gap net loss attributable to common shareholders for the second quarter was $5.1 million or negative 4 cents per share. based on 143.5 million weighted average shares outstanding. That is 20% narrower than the same quarter last year. For the first half, our net loss was 10.1 million compared to 15.7 million in the first half of 2025. Our gap net loss includes a one-time non-cash $1.9 million adjustment reflecting the change in fair value of the public ones during our exchange for stock on May 6th of this year. Excluding this $1.9 million gives us non-GAAP adjusted net loss of 3.2 million or negative two cents per share for Q2 and 8.2 million or six cents per share for the first half of 2026. Adjusted EBITDA in the second quarter was negative $1 million or a negative 3% margin Thank you, everyone. related to the Warrant Exchange, $2.5 million of stock-based compensation, $800,000 of depreciation and amortization, and $1.1 million of interest and other income. For the first half of the year, adjusted EBITDA was negative 2.8 million against negative 7.3 million in the first half of last year. On a trailing 12-month basis, adjusted EBITDA is negative $800,000 with a negative 1% margin. We are within a rounding error of breakeven on a full year basis if we look at the last 12 months. Now turning over to cash flow on the balance sheet. We ended the second quarter with $74.5 million of cash and no debt, an increase of $12.2 million during the quarter. Our operations only used $2.9 million of cash in the quarter. Accounts receivable grew by $5.4 million and inventory grew by 3.3 million, partially offset by lower prepaid inventory and higher payables. Before those working capital movements, our operations generated cash for the first time. Accounts receivable ended at 40.7 million and inventory at 11.5 million. Both are deliberate. Receivables reflect the fast-growing shipment profile weighted towards the second half of the quarter and Inventory's decision to support the ramp of the third quarter. Capital expenditures were $1.8 million all at our Fremont facility, supporting the electrode coating build out and primarily funded by the Defense Innovation Unit. First half CapEx was $2.8 million against the less than $10 million that we framed out for the year in March. And we're tracking well inside that. Financing activities, provided $16.8 million, consisting of $12.3 million from warrant exercises and $4.5 million from option exercises. We currently do not have an at-the-market offering program. Every dollar of equity capital we took in this quarter came from holders choosing to exercise into the business as we continue to focus on minimizing dilution. Working capital at quarter end was $113.2 million, compared to $59.8 million for the second quarter of last year, and total stockholders' equity was of $125.6 million. Before I turn the call back to Tom, I want to frame our outlook for the rest of the year using slide seven as the backdrop. In March, we set an initial 2026 outlook of more than $125 million of revenue, over 25% gross margin, and our first full year of positive adjusted EBITDA. In May, after our first quarter of $28.5 million of revenue, we increased guidance to more than $130 million for the year. Today, we are increasing our revenue forecast again. With what we know today, we expect full year revenue of at least $140 million and gross margins of at least 28%. We see upside to gross margins in the second half of the year as we focus on ensuring that the fixed costs of our contract manufacturing partners do not increase with higher volumes. We are reiterating adjusted EBITDA of more than $4 million, and net loss of $10 million or less, and the loss of 8 cents or less per diluted share, assuming 143.5 million weighted average diluted shares. These updated GAAP profit guidance estimates consider the $1.9 million adjustment for the fair value of the warrants in Q2 of this year. Looking further ahead, nothing about the plan that we laid out in March has changed, except for how much of it is now visible in the numbers and in reality. As we close out the decade, we are still targeting more than $600 million of contracted capacity, gross margins above 30%, and adjusted EBITDA margins of at least 20%. The resourceful culture and low fixed cost structure that brought us within rounding error of breakeven over the last 12 months are the same ones that'll get us there. With that, I'm happy to turn the call back to Tom for his closing remarks. Thank you very much for your attention and continued support.