Amprius Technologies Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 7, 2024

There are 9 speakers on the call.

Operator

Good afternoon. Welcome to the Amprius Technologies Third Quarter 2024 Earnings Conference Call. Joining us for today's presentation are the company's CEO, Doctor. Kang Sun and CFO, Sandra Wallach. At this time, all participants are in listen only mode.

Operator

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 future product commercialization, new customer adoption and new applications and the timing and ability of Amprius to expand its manufacturing capacity, build its large scale manufacturing facility, 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 Ambrius' 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 ir.ambrius.com.

Operator

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 will now turn the call over to Ambrius Technology's CEO, Doctor. Kang Sun, for his comments. Sir, please proceed.

Speaker 1

Welcome everyone and thank you for joining us this afternoon. On today's call, I will give you overview of our Q3 accomplishments while also highlighting some of the upcoming milestones we are looking forward to achieving in the near future. After that, our CFO, Andrew 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 Ampere's to those who may be new to our company.

Speaker 1

Ampere is a pioneer and a leader in the silicon anode battery space. At Ampere, we develop, manufacture and market high energy density and high power density silicon anode batteries with applications across all segments of electrical mobility, including the aviation and the EV Industrials. Today, Ampere's commenced performance leadership with its combination of battery energy density, power density, charging time, operating temperature range and safety. Across our battery portfolio, we offer unmatched performance among these commercially available batteries. Ampeus has been delivering commercial batteries to the market with up to 4.50 watt per kilo and 11.50 watt per liter, 10 feet power capability, the extremely fast charge rate of 0% to 80% rate of the charge in approximately 6 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 neo penetration test.

Speaker 1

Each of these performance parameters is critically important to real world electrical mobility applications. Not only do our battery enable certain aircraft and the vehicles to maximize the performance, but they enable our customers to achieve their economical targets as well. In addition to what is commercially available today, we have also achieved a third party validation of our latest 500 Whkg, 1300 Whaler Battery Platform. This battery will be ready for shipment by end of this year. It is our belief that there are no other commercial batteries on the market that can perform at this level today.

Speaker 1

Amprius is a silicon anode battery technology pioneer with over a decade of development experience and a long track record of commercial shipments and customer achievements. While Ampere's high energy high power batteries are for all electrical mobility applications, company is presently serving 2 large and high growth segments, aviation and light electric vehicles. Both benefits from Ampere's battery performance and present Ampere's with enormous battery opportunity business opportunities. Our aviation customers include the manufacturing OEMs in high altitude of super satellites, EV TOSS, electrical aircraft and various drones from commercial to industrial to military. Fortune Business Insights projects that the global drone market will surge from the 18,000,000,000 in 2023 to 213,000,000,000 by 2,032.

Speaker 1

So we believe we are just at the beginning of a significant expansion of 1 of our addressable markets. Aerospace Testing International forecasts the electrical aircraft and the EV toll battery market could be 50 building by 2,030. The light electrical vehicle market is quite impressive as well. Providence Research Reports estimates the market will have a compound annual growth rate of 9.74% from 2023 to reach $206,000,000,000 by 2,032. If there is one constraint in all of this, it's the critical role of the battery innovation.

Speaker 1

At Amprius, we offer solutions to this constraint and our Q3 results reflect our traction in both the aviation and the light electrical vehicle industries as customers see the value of our technology. In the Q3, we more than doubled revenue from the Q2 and engaged with 53 new customers. We have expanded our market participation to the light electrical vehicle segment, signed 20,000,000 of customer contracts and two IOIs with Fortune 500 industrial leaders, delivered high energy density 3 60 watt per kilo EV battery cells to industrial consortium USABC and developed the gigawatt scale contract manufacturing capacities. All these accomplishments and the progress position Amperes for accelerated growth in coming quarters and years. The introduction of Ampere's cycle battery in January has given us a large advantage in battery space by expanding our offerings.

Speaker 1

Ampere offers a very versatile platform that enables the designs of the better performing silicon anode batteries for a variety of customer applications. Today, we offer customer 14 different SKUs that are available in a variety of factory formats and form factors. These sales, which are ranging from 3.50 watt hour per kilo to 4.50 watt hour per kilo, ensure that we are covering a significant portion of our customers' commercial applications. Ampere Batteries are recognized as the best in class for energy, power, cycle life, charging time, temperature performance and the safety for electrical mobility. Our technology leadership and the battery performance are validated by increasing customer purchasing volume.

Speaker 1

Now I would like to briefly provide updates on our partnership with the United States Advanced Battery Consortium or USABC. Since it is a remarkable technical breakthrough in the important market segment for Amperes. After being awarded a 3,000,000 cost sharing contract from the USABC in collaboration with the United States Department of Energy approximately a year and a half ago. This quarter, we successfully delivered the EV sales to them. USABC select Ampeus to address some of the most challenging issues experienced by EV users, such as the range anxiety and the need for faster charging time.

Speaker 1

Amperes Lada only addressed this issue, but suppressed many of the initial goals set by U. S. EBC. Amperes EV cell achieved 3 60 watt per kilo energy density, 1200 watt per kilo power density, a charge to 90% of their rate energy in 15 minutes and expect cycle life of 1,000. We believe our continued success paved the way for future engagements with the electrical vehicle manufacturers.

Speaker 1

Ampere's batteries have become a great attraction in the electrical mobility market. In many cases, Ampere's battery are the only non commercial available battery that meet certain of our customers' requirements in technical performance and application economics. In Q3, we shipped to 94 customers. Of these, 53 were new customers covering several parts of the electrical mobility sector. Our year to date customer count now stands at over 175.

Speaker 1

Many of these customers are also long time partners with repeat volume purchase orders including auto Airbus, AeroVironment, Air Van Flair, Cross Hamdani and BAE Systems. The completion of new customers and volume shipments to returning customers allowed us to generate 7,900,000 in revenue for the Q3. Our performance in Q3 represents more than double the amount of the revenue we generated just last quarter, almost triple what we generated in Q3 last year and that compares to the $9,100,000 we generated in all of 2023. The primary driver behind our growth this quarter has been our cycle product. Since its launch in January, we have expanded our contract manufacturing capabilities enabling us quickly scale production and deliver large volume shipments where we have a strong demand.

Speaker 1

The 3 customer engagements we announced in Q3 are the results of the Saiccor platform introduction and the contracted manufacturing strategy. The high performance of our battery and the immediate availability of manufacturing capacities enable us to quickly move customers through the commercial validation process, secure volume purchase commitments and deliver large quantities of sales to customers. Looking at some of these new agreements in more detail, In September, we announced that we received 2 contracts totaling over 20,000,000 to supply 40 amp hour high performance cells for light electrical vehicle applications, which we are already shaping. For context, our 40 amp hour high performance cycle battery are produced at a contract manufacturing facility as soon as the battery and the production lines are qualified by the customer, enabling us to rapidly scale and meet the customer demand. We expect to recognize this revenue by mid-twenty 25.

Speaker 1

In the last few months, we have also signed 2 separate agreements with Fortune 500 Leaders. While we are in the early stage of this project, both engagements have the potential to greatly expand and become high volume orders from Tier 1 customers, where we now have the capacity to meet the demand. First of these contracts is a non binding letter of intent with the Fortune Global 500 Technology OEM to develop a high energy side core cylindrical cell for the light electrical vehicle market. This IOI is expected to translate into a commercial supply agreement that will cover next 5 years and could provide Ampere with battery production order exceeding 2 gigawatt hours over the proposed contract duration. We will begin shaping the first group of side core cylindrical cells designed for this application later this year.

Speaker 1

The second Fortune 500 agreement is a development contract for small format custom high energy Cymax pouch cell. Sunpri's high energy battery provided a critical solution to the customers' application. The project is expected to reduce the battery weight and size by approximately 50% compared to their current battery without compromising performance. A smaller and lighter battery enables better product design, enhance the overall customer experience and offer a significant competitive advantage in the market. The application is a project to require over 1,000,000 in sales per year if the project objectives are met.

Speaker 1

On that note, in order to support our current as well as the future customer commitments, we took additional steps forward this quarter to increase our manufacturing capabilities. In June, we announced the initial rollout of our contract manufacturing strategy that has secured over 500 Megawatt hour of additional capacity to several partners. To further diversify and expand our manufacturing capacities, we recently launched 2 lines designed for the requirements of Ampere's batteries with one of our existing partners. These production lines will be supporting the 20,000,000 light electrical vehicle battery orders that I just mentioned. They are already operational and shaping sales.

Speaker 1

Beyond creating additional capacity, having lines engineered specifically for our product enable us to provide a more stringent designs for our cell chemistry, which is a key consideration for many of our highly technical customer applications. As of today, we now have access to up to 800 megawatt hour of a pouch cell and over 1 gigawatt hour of a cylindrical cell production annually. As for our manufacturing facility, we are planning in Brighton, Colorado. We have now completed production line specifications and the selection, finished the construction design drawings and specifications for the facility. We remain on track from the regulatory standpoint, having recently submitted our site plan and advanced all other regulatory plans applications for the facility.

Speaker 1

Since we have a gigawatt hour scale contract manufacturing capacity available today, we may not need the Colorado production capacity to support the market demand for some time. We also continue to making progress ramping up our facility in Fremont, California. We remain on pace to scale our Fremont production rates entering 2025 with up to 2 megawatt hours scale. Looking ahead, we are increasingly optimistic about the road ahead of us as well as our ability to meet the challenges. With technical leadership, greater battery performance, a growing book of customers and the capacity to now support a larger volume shipments, we believe that we are set up for sustainable growth for the foreseeable future.

Speaker 1

We are working hard to execute our goals and we expect to carry our momentum through the end of the 2024 and into 2025. With that, I will now turn the call over to our CFO, Sandra Wallach, to review our financial results for the quarter. Sandra?

Speaker 2

Thank you, Tang. 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 finished the Q3 with $7,900,000 in total revenue. As we have previously discussed, our total revenue is a combination of our main revenue streams, product revenue and development services and grant revenue.

Speaker 2

This quarter, dollars 6,100,000 came from our product revenue, representing a $2,700,000 or 81 percent increase sequentially and a $3,900,000 or 176 percent increase year over year. Our development services and grant revenue totaled $1,800,000 this quarter, which was up from none in Q2 and up $1,200,000 year over year. As we've discussed in the past, development services and grant revenue is non recurring in nature, leading to greater fluctuations depending on the comparison period. The combined increases in revenue this quarter were driven by the addition of new customers and grant programs. As Kang mentioned, we shipped to 94 customers in the 3rd quarter.

Speaker 2

Of these customers, only 4 accounted for greater than 10% of revenue, an increase from 3 in the Q2 and consistent with the 4 customers counted in the Q3 of last year. Going forward, we will continue adding to our customer mix to diversify our revenue streams and provide more reliable product output as we get to a position of scale. Moving to our profitability metrics, gross margin was negative 65% for the quarter compared to negative 195% in Q2 of 2024 and negative 152% in the prior year period. As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Gross margin this quarter was also impacted by design preconstruction costs related to the Colorado facility, which will not recur.

Speaker 2

Longer term, we are confident that our GAAP gross margin will begin to normalize as we approach our capacity expansion goals. Now on to our operating expense management. Our operating expenses for the Q3 were $6,200,000 a decrease of $200,000 or 4% compared with Q2 20 24 an increase of $1,300,000 or 26 percent from the prior year period. The sequential decrease was driven by lower share based compensation in outside services. The year over year increase is primarily attributable to increased investment in sales, allocation of R and D from COGS as development services agreements run off and largely flat G and A.

Speaker 2

Our GAAP net loss for the Q3 was $10,900,000 or a net loss of $0.10 per share with $110,400,000 weighted average number of shares outstanding. In Q2 2024, net loss was negative $0.13 per share with 97,000,000 weighted average number of shares outstanding. Q3, 2023 net loss was a negative $0.10 per share with 86,400,000 weighted average number of shares outstanding. As of September 30, 2024, there were 92 full time employees, up from 88 at the end of the second quarter, with those employees primarily based in our Fremont, California location. Our share based compensation for the Q3 was $1,700,000 compared to $1,900,000 in Q2 and $1,100,000 in the prior year period.

Speaker 2

The sequential decline was due to changes to the Board of Directors. As of September 30, 2024, we had 111,300,000 shares outstanding, which was up 3,400,000 from the prior quarter. That increase includes 3,100,000 shares issued as part of the warrant exchange that reduced the total number of outstanding private warrants from $15,900,000 to $300,000 Now turning to the balance sheet. We exited the 3rd quarter with $35,000,000 in net cash and no debt. Key drivers for the 11,400,000 dollars of cash we used in the quarter were $9,500,000 used in operating cash flow.

Speaker 2

We continue to remain lean with a $2,500,000 to $3,000,000 run rate per month, excluding transaction related cost. Note that our Q3 'twenty four operating cash included $2,400,000 of non recurring expenses used for the design of the Colorado facility. These expenses are projected to tail off with the completion of the construction drawings, which are substantially complete. Dollars 1,300,000 used to continue the build out of our expanded 2 megawatt production line in Fremont and 0 $500,000

Operator

related to

Speaker 2

the payment to stock issuance costs associated with the warrant repricing offer. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward. Before I turn the call back over to Ken, I would like to take a moment to discuss our CapEx outlook for the remainder of the year. We expect to spend another $1,000,000 on supporting equipment to complete the 2 Megawatt line in Fremont in addition to our normal operating capital requirements. Now that the designs are effectively complete for Colorado, we will continue to monitor the larger industry dynamics driving our ability to proceed further.

Speaker 2

Timing and availability of funding, along with the monitoring of the overall sector for changes in demand, supply, battery cost structure, government incentives, trade tariffs and other considerations will influence our decision on next steps and timing. One last housekeeping item I would like to discuss is a change to our cap table after the end of the quarter. On October 23, we announced that Amprius Inc, our former controlling shareholder, had voluntarily liquidated and dissolved. As a result, the shares that Amprius Inc. Held were distributed pro rata for a dissolution plan approved by their Board of Directors.

Speaker 2

This distribution removes a controlling shareholder consideration and dispenses the shares more broadly into the hands of the original investors in Amprius Inc. Amprius Inc. Also contributed to us 5 point 5,000,000 common shares of Amprius Technologies and will reimburse related expenses in exchange for our assumption of the outstanding stock options of Amprius Inc, an aggregate of 7,000,000 options with a weighted average exercise price of $2.10 per share. There was no operating impact to Amprius Technologies as a result of this distribution or option assumption and we extinguished the contributed shares. The option assumption was approved by a committee of the Amprius Technologies Board of Directors comprised of solely independent and disinterested directors.

Speaker 2

That concludes my financial discussion and I will now pass the call back to Kang.

Speaker 1

Thanks, Sandra. As we look ahead, our strategy at Ampeus remains unchanged. Our top priority are innovating next generation batteries, growing our customer base and scaling our manufacturing capability. Today, Ampere has the best performing battery for the electrical mobility market, strong revenue growth and impressive customer pipeline and a gigawatt hour scale manufacturing capacity available to us. Our technical leadership and unmatched battery performance in the industry has been validated by industrial leaders and repeat the customer orders.

Speaker 1

Our contract and manufacturing strategy has also shown greater results. We are already able to support our customer with over 10,000,000 pouch battery cells and 125,000,000 cylindrical cells annually. We also recently celebrated the launch of dedicated Ampere's lines at one of our manufacturing partners with the capacity for 800 megawatt hour of power cells. At the same time, we are exploring additional manufacturing partners in Asia and Europe, expanding our Fremont production capacity for CEMEX battery production and have finalized our design for the factory in Colorado. We believe that the opportunity in front of Ampere is tremendous.

Speaker 1

Our team are more confident than ever in delivering what we have planned and promised. We look forward to closing out the year strong and heading into 2025 with increasing momentum. Over the next few months, we will also be attending several industrial and financial conferences, and we hope to see you there. Thank you for your continued support of Amprius Technology. We look forward to continuing to deliver on what we have planned and the promise in the upcoming quarters.

Speaker 1

With that, I will turn it back to the operator for Q and A.

Speaker 3

Thank you. At this time, we'll open the line for questions from the company's publishing research analysts. The company requests that each participant limit their comments to one question and one follow-up. And we'll take our first question from Colin Rusch from Oppenheimer. Please go ahead, Colin.

Speaker 4

Thanks so much, guys. And appreciate all the detail on the contract manufacturing capacity that you have. We'd love to dig into the customer list a little bit more. Can you talk about how many customers are in late stage negotiations that have the potential to be 10 megawatt hours or more? And how should we think about the cadence of incremental customer announcements like the one you just made?

Speaker 1

Yes, Collin, for the customer have a significant volume. We already concluded 2 customers combined revenue $20,000,000 We can deliver that within the year. Actually, we expect next May we can recognize the revenue. In addition to that, we have a conversation with another 3 customers. Those are high volume potential customers.

Speaker 4

Great. That's super helpful. And then just given the change in strategy towards a CapEx light model, can you talk a little bit about the path to operational cash flow breakeven? It seems like you guys, given the differentiated product and the capacity availability, potentially have a pretty straight line towards reaching that operational breakeven.

Speaker 2

Absolutely. So as we've mentioned before, the product that we sell under the trademark of Ficor is profitable day 1 without having to put any of our investor money to work in the capital and infrastructure. We have still limitations in how much of the SINAX we can deliver given the up to 2 megawatts that we're completing in Fremont. We expect the near term revenue growth to all come from SCICOR. So that gives us a clearer view now that Kang has removed the capacity constraint to really grow into that operational profitability profile as we move forward.

Speaker 4

And then just from an organizational capacity perspective on the OpEx side, can you talk a little bit about what investments you need to make to really support a drive towards breakeven revenue levels?

Speaker 2

So this last quarter, we made an investment of 2 additional salespeople. That's really been our big focus along with business development and adding some key R and D resources into the Fremont team so we can drive the cycles of learning faster. So that's really where we're looking. But at 92 employees, we're talking about a handful of really critical hires that we're focused on right now.

Speaker 4

Super helpful. Thanks so much again.

Speaker 3

Thank you. And we'll take our next question from Jed Dorsheimer from William Blair. Please go ahead, Jed.

Speaker 5

You have Mark Schutter on for Jed. Just to put a finer point on Collin's question, are you saying that you'll be recognizing all of the $20,000,000 by May or that you'll start to recognize some revenue by May?

Speaker 1

Mark, at this time, our plan is to recognize the revenue

Speaker 5

by May. Okay. So by May of next year, you'll have $20,000,000 in revenue

Speaker 1

from those? Yes, that $20,000,000 from these customers. We already started shipping the product this quarter.

Speaker 5

Got it. Thank you for the clarification, Tom. And to dive into that a bit more with the customer strategy, congrats on 175 customers, that is quite a lot. I'm wondering if your strategy is to continue to service many customers with more smaller volumes and bespoke cell designs maybe to capture higher margin or are you looking to secure more chunkier large customers with higher volume? How are you thinking about that?

Speaker 1

Yes. We like to focus on logic customer with substantial volume. So that way it's easier for us and not just product development, it's also the manufacturing and the service. So those are our half of the funnel. We have the and we said the 5 of them.

Speaker 1

But eventually, we hope, okay, there are sizable, large volume customers will place an order.

Speaker 5

Okay. And lastly, I mean, at the steady state day and a couple of years out, when the facilities are ramped and you have large orders, do you have a gross margin target in mind considering the cost for the toller?

Speaker 2

We haven't given any guidance about our target model. But again, because the majority of the volume will be coming from SCICOR, which is made on traditional graphite manufacturing lines. We've seen the reason why we can't get to parity with graphite.

Speaker 5

Thank you very much.

Speaker 3

And we'll take our next question from Chip Moore from Roth.

Speaker 6

I wanted to follow-up on the $220,000,000 contracts that sounds like you're going to recognize by the middle of next year. Is there potential for those to grow? Or should we think about a new set of purchase orders or what's the opportunity with those customers?

Speaker 1

Trevor, this time the orders they placed is a setting for their needs until middle of next year. That's why by middle of the next year, those that will be made and so that the revenue will be recognized. But those are very important customers. They are the leaders in this particular segment. So we anticipate that they will grow to they will have additional order coming sometime the next year, because this only satisfy half of the year of their demand.

Speaker 1

So we are working with those customers very closely. First task is to get those product made and have revenue regulated by me.

Speaker 6

Understood. That's helpful, Kang. And maybe for my follow-up on the LOI in the light electric vehicle space, large potential, right, 2 gigawatt hours. I think you talked about a potential supply agreement over 5 years. What are the milestones to reach that in terms of samples and evaluation?

Speaker 6

I imagine that takes some time, but how should we think about that?

Speaker 1

Yes, I think the key this is pretty good technology. This is required substantial change of the cell chemistry and the cell design. Now we have done most of those. This is not from scratch. The Ampere already has the foundation for both.

Speaker 1

So we need to perfect the cell design. We are planning to give them the 1st batch of the sample, okay. Whatever they ask for, there is no one in the industry has made it. Also, no one in the industry today believe this can be done, okay. But Ampere is already demonstrating the labs.

Speaker 1

So, they were planning to come to factory to check the factory out December 5th, okay, because I will not be available. So we delayed the factory inspection probably toward the next year. We convinced them they should test the sample first before they come to the factory. So this is a very reputable customer, is the industrial leader, definitely is the industrial leader. It's not a number 1, it's a number 2 in this particular market segment.

Speaker 1

So we are very proud of having this opportunity to serve them.

Speaker 6

Excellent. Appreciate it. I'll take the rest of mine offline. Thanks.

Speaker 3

Thank you. And we'll take our next question from Jeff Grampp from Alliance Global. Please go ahead, Jeff.

Speaker 7

Good afternoon. I had a question on the customer count metrics you guys provided. I think this was a new record, both for new customers as well as total, which I guess also kind of means it looks like existing customer count was also at a record. So I'm curious to drive into the main drivers of that. In particular, wondering is this SCICOR expansion and the capacity that you guys have secured, would you say that's the main catalyst to the increased receptivity, if you will, from customers that they feel more conviction in your ability to deliver in volume?

Speaker 7

Or what other factors might you see at play to drive this acceleration?

Speaker 1

Jeff, the first driver is our battery performance. There's no doubt about, okay, they couldn't get a battery with the same performance anywhere in the industry today. I think that's the key driver, that's the key attraction for us in the marketplace. So before we have a capacity limitation. So our qualification process has been long and lengthy.

Speaker 1

For some customers we had to give up because we don't have enough capacity to serve them. So the cycle introduction plus our contract and manufacturing strategy works very well for us. And not only we have sufficient capacity to serve the customer, also customer quite familiar with our manufacturing process. We have a customer, November 18th, we have another large customer coming to China to look at our factory. That's why I will make a trip to Asia next week.

Speaker 1

So the driver is technology leadership and available manufacturing capacity, also manufacturing capability. Capacity and the capability are 2 different things. Capability means our manufacturing line can deliver quality, can deliver the format and the form factor you want, also can deliver on time.

Speaker 7

Great. That's really helpful details. For my follow-up, I was curious that $20,000,000 plus lever order that you guys had a couple of months ago now. Given that that was for SCICOR, it really hasn't even been in the market I think for a full year yet. It would seem to suggest I guess a pretty quick qualifying period for the customer.

Speaker 7

I'm curious if in your sense that's unique for that particular need or how you're generally seeing customer qualification timelines changing if at all with SCICOR and with some of your recent proof points if you will in derisking this for customers? Thanks.

Speaker 1

Yes, we accumulate sufficient data points for customers to review. Now this is an ambitious battery we have a long history. We have a lot of data available for various batteries for customers to take a look. So what is the qualification? Most of the time, not our battery, okay, will be the certification process.

Speaker 1

Now for depend on the application, this particular application, the certification process is much simpler than other applications. For example, EV4 battery qualification is much longer than the drone. The drone is much longer than lighter electrical vehicles. So depends on the application, the qualification cycle could be quite short, quite a quick the customer can fairly quickly to qualify our battery. In this case, there is 20,000,000 contract.

Speaker 1

We present our database, customer did a very quick test, we can validate our data. At the same time, their qualification process is much shorter than other qualification processes.

Speaker 7

Got it. That's really helpful. I appreciate it. Thank you, guys.

Speaker 3

And we'll take our next question from Ted Jackson from Northland Securities. Please go ahead, Ted.

Speaker 8

Thank you very much. Good evening or good afternoon to you. I've got a couple of questions that are still left on my list. One is with regards to the spending on the Colorado facility and its impact on your Q3 gross margins. You said, as I listened to the call correctly, that it was $2,400,000 First of all, I want to verify that's what you said.

Speaker 8

And then secondly, can I assume from your commentary that the spend for kind of the legwork for that facility is kind of ramped down and now we could expect it to essentially be non existent with the Q4 and going forward? That's my first question.

Speaker 2

Yes, Ted. So the $2,400,000 was based on cash flow for operating cash. That's what we spent in the Q3. There's always a difference between the P and L and cash. But the $2,400,000 is related to the P and L I'm sorry, to cash.

Speaker 2

And yes, we substantially completed all of the design and construction specifications in October. So we're expecting that to ramp down and drop to a very low rate until we're ready to spin back up and get started.

Speaker 8

So what was the nut that was in your COGS for Colorado that was in the Q3? Just so I can kind of an apples to apples comparison when I think about your Q4 since I won't be in there anymore.

Speaker 2

It was a little bit higher than the cash basis. So it was closer to $2,900,000

Speaker 8

Okay. So then just to make sure I understand right. So all else being equal, if we had the exact same shipment levels in the 4th quarter that you had in the 3rd quarter, that we would see your margin improve by just under $3,000,000 simply because of that?

Speaker 2

Yes. Okay. Again, our margin fluctuates based on the mix of

Speaker 8

Yes. That's why I

Speaker 1

that's why I that's why I that's why I that's why I that's why I that's why I that's why I'm back here.

Speaker 8

Yes. So my next thing is just a bit of clarification. And when you talked about the Fremont facility and having to put another $1,000,000 in it in the Q4, is that on top of is that additional CapEx? Are you saying that your 4th quarter CapEx will basically be about $3,000,000 I mean at $1,000,000 excuse me.

Speaker 2

So it's $1,000,000 to finish off the build out for the balance of the up to 2 megawatt capacity. Every factory I've ever been with has some normal run rate of CapEx for replacement and upgrades. So it will but it's not a material number.

Speaker 8

Okay. I mean, that's helpful. And then when you and then and then and then and this I'm speaking to Sen, but still on the Fremont and then I'll get out of line and come back in. But if I when I listen to the commentary in red, you're expecting to exit 2024 with 2 megawatts of capacity available at Fremont, that will be that's you're there. Is that correct?

Speaker 2

So we believe that we will be entering 2025 with the up to 2 megawatts of capacity. So 2 megawatts is the nameplate and we've been ramping through that, But we've always said that we'll be up to 2 megawatts.

Speaker 8

Okay. That's fair. That's fair. I'll step out of line and let someone else jump in. Thanks.

Speaker 3

And at this time, this concludes our question and answer session. If you have any additional questions, you may contact Amprius' Investor Relations team at iramprius dotcom. I'd now like to turn the call back over to Doctor. Sun for his closing remarks.

Speaker 1

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 and the presentations from the Investor Relations section of our website. We hope to see you at one of our upcoming events and we'll continue 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. Operator?

Speaker 3

Thank you for joining us today for Amprius Technologies' 3rd quarter 2024 earnings conference call. You may now disconnect and have a great day.

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Key Takeaways

  • Record Q3 revenue: $7.9 M total (+100% sequential, +176% YoY) from 94 customers (53 new) driven by product sales and the SCICOR cycle battery.
  • Expanded manufacturing capacity: secured 800 MWh pouch and >1 GWh cylindrical annual capacity via contract partners, with Fremont ramp to 2 MWh in early 2025 and Colorado plant design completed.
  • Major customer awards: $20 M in 40 Ah SCICOR cell supply contracts to be recognized by mid-2025, plus two Fortune 500 LOIs for high-energy cells potentially exceeding 2 GWh over five years.
  • Technology leadership: silicon-anode batteries delivering up to 4.5 Wh/kg energy density, 11.5 Wh/L volumetric density, 0–80% charge in ~6 min, –30 °C to 55 °C operation and a third-party-validated 500 Wh/kg cell ready by year-end.
  • Improving financials: Q3 gross margin improved to –65% (from –195%), net loss of $10.9 M, $35 M cash and no debt, expecting margins to normalize as scale increases and one-time costs for the Colorado facility abate.
A.I. generated. May contain errors.
Earnings Conference Call
Amprius Technologies Q3 2024
00:00 / 00:00