SES AI Corporation

Hello and thank you for standing by. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the SES AI first quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. I would now like to turn the call over to Kyle Pilkington, Chief Legal Officer. Kyle, please go ahead.

Hello, everyone, and welcome to our conference call covering our first quarter 2026 results. Joining me today are Chi Chau Hu, Founder and Chief Executive Officer, and Jing Milas, Chief Financial Officer. We issued our shareholder letter just after 4 p.m. today, which provides a business update as well as our financial results. You'll find a press release with a link to our shareholder letter in today's conference call webcast in the investor relations section of our website at ses.ai. Before we get started, this is a reminder that the discussion today may contain forward-looking information or forward-looking statements within the meeting of applicable securities legislation. These statements are based on our predictions and expectations as of today. Such statements involve certain risks, assumptions, and uncertainties, which may cause our actual or future results and performance to be materially different from those expressed or implied in these statements. The risks and uncertainties that could cause our results to differ materially from our current expectations include, are not limited to, those detailed in our latest earnings release and in our SEC filings. On this call, we will discuss non-GAAP financial measures as a supplement to our GAAP results. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate alternative measures of the company's operating performance that may be useful. These non-GAAP measures should not be considered in isolation or as a substitute for any GAAP measure, and our definitions may differ from those used by other companies reporting similarly titled measures. Reconciliations of the non-GAAP financial measures to most directly comparable GAAP measures can be found in our latest earnings release. With that, I'll pass it over to Poochaham.

Thanks, Kyle. Thanks, everyone, for joining today. We had a strong start for 2026. The first quarter revenue came in at 6.7 million, a 47% increase over the fourth quarter and well above published consensus estimates. We are reaffirming our full year 2026 revenue guidance of $30 million to $35 million, with contributions expected from all three of our revenue generating business units. We are executing on plan, and we like the momentum we have heading into the rest of the year. Before I get into the business updates, I want to take a moment to acknowledge Jim Nialis, who is on this call with us today. As we announced today, Jean will be transitioning from her role as Chief Financial Officer effective April 27th. On behalf of the entire team and our board, I want to thank her for her contributions and wish her well. We have appointed Ray Lill as our new CFO, effective April 27th. Ray is a seasoned finance executive with over 20 years of experience in FP&A, strategic finance, and SEC reporting at companies including Aden and MetLife Investment Management. He's a CFA charter holder and CPA, and we are confident he will be an excellent partner as we scale the business. More details on this transition are in the separate press release we issued today. Now let me walk through each of our business units, starting with energy storage systems. ESS remains our largest near-term revenue driver and was responsible for the majority of our first quarter revenue through using energy. We continue to see growing demand for our commercial and industrial energy storage solutions, and our global footprint is expanding. Earlier this month, we provided a business update that highlighted our strong start to the year. Today, I want to add some additional context on the commercial traction we are seeing. We have now entered the North American market through our multi-year distribution agreement with ATG ePower, a leading North American distributor of renewable energy and energy storage solutions that has been operating in the clean energy sector since 2001. This contract value at approximately $20 million over three years, gives us immediate access to ATG ePowers established distribution network across residential, commercial and industrial customer segments. This new contract goes on using energy's existing customer base in Australia, the Middle East and Europe, and reflects our strategy to grow the ESS business both geographically and through the on-premise integration of our molecular universe predict capabilities into the hardware offering, an edge box. Energy storage systems are financial assets for our customers. The value depends on delivering consistent, long-term performance. Our ability to provide both the hardware and an intelligent operating system that predicts battery health and reduces maintenance costs is a key differentiator. Turning to drones, we made progress in our drone cell business during the first quarter that I want to walk through. I am pleased to report that we have completed the conversion of our manufacturing line at our Chungju South Korea facility from EV power cells to drone format power cells. This facility, which produced the world's first 100 amp power lithium metal cell back in 2021, has been NDA compliant since 2021. Our plans are for the converter line to gradually ramp up to an annual capacity of over 1 million drone cells and incorporates our AI for manufacturing capabilities to ensure quality and cost effectiveness. Early this month, we began shipping NDA-compliant cells produced in our Chongzhu factory to prospective defense and commercial drone customers for evaluation and qualification testing. Customer interest has been strong, and we are encouraged by the engagement we are seeing. The U.S. defense drone market in particular continues to be where we see the most consequential near-term opportunity, and our NDA-compliant manufacturing capability in Korea positions us well relative to competitors who lack NDA-compliant supply chains. We continue to explore additional NDA-compliant manufacturing capacities in Southeast Asia and expect to have More to update on this front later this year. On materials, our pipeline continues to build. Through the Molecular Universe platform, both SCS and our customers have been discovering new electrolyte materials for applications beyond our current cell production. We now have approximately half a dozen customers who have progressed through second phase testing of materials discovered through the platform. and the overall number of customers in our pipeline has increased. The progression of existing customers through the testing pipeline represents positive momentum. We remain on track with the Heisen joint venture to leverage their 150,000 ton annual global capacity to produce these materials at commercial scale as demand materializes. And on the molecular universe, We recently introduced version 2.5 of the platform, which represents our fifth major iteration since we launched in 2024. Version 2.5 delivers upgraded capabilities across our six AI-powered workflows, ask, search, formulate, design, predict, and manufacture, along with expanded enterprise on-premise deployment options and covering both lithium and now sodium chemistries. During the quarter, a major global battery manufacturer committed to a multi-year subscription of our molecular universe search in the box product, which we view as a validation of the platform's value to the world's leading battery companies. While the direct on-premise revenue from the molecular universe continues to build and is expected to make a modest direct contribution in 2026, Its biggest impact remains the IT and competitive advantages it drives across our ESS drone and materials businesses. We will continue to explore how best to demonstrate and unlock the molecular universe value over the course of the year. As we look to the remainder of 2026, our priorities remain clear. Execute on the ESS opportunity through using energy and our growing distribution network. At events, our drone sale business to a commercial scale customer engagement deliver on the materials pipeline and continue developing the molecular universe as both a revenue stream and a competitive advantage. I will thank the team for their continued execution and thank all of you for your continued interest in SESAI. And now, here's Jin for financial updates.