Factorial Energy Q2 2026 Earnings Report

Factorial Energy EPS Results

• Actual EPS: -$0.85
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Factorial Energy Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Factorial Energy Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 4:30PM ET

We are a blank check company incorporated on October 29, 2024 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Additionally, we have not contacted any of the prospective target businesses that Cartesian Growth Corporation (“CGC I”), a former special purpose acquisition company (“SPAC”) sponsored by affiliates of our sponsor that completed its initial business combination in January 2023, had considered and rejected while such entity was a blank check company searching for target businesses to acquire. We also have not contacted any of the prospective target businesses that Cartesian Growth Corporation II (“CGC II”), an existing SPAC sponsored by affiliates of our sponsor that consummated its initial public offering in May 2022, has considered while such entity continues its search for target businesses to acquire. However, we may contact any such targets subsequent to the closing of this offering if we become aware that the valuations, operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive to our shareholders. We have conducted no operations and have generated no revenues to date, and we will not generate operating revenues until, at the earliest, after we consummate our initial business combination. While we may pursue our initial business combination in any business industry or sector, we intend to focus on seeking high-growth businesses with proven or potential transnational operations or outlooks in order to capitalize on the experience, reputation, and network of our management team. Furthermore, we intend to seek target businesses where we believe we will have an opportunity to drive ongoing value creation after our initial business combination is completed, as our management team has done with multiple investments over a wide range of sectors, industries and geographical locations. Although we anticipate acquiring a target business that is an operating business, we are not obligated to do so and may determine instead to merge with or acquire a company with no operating history if the terms of the transaction are determined by us to be favorable to our public shareholders and the target business has a fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable, if any, on the income accrued on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. In such event, investors would not have the benefit of basing the decision on whether to remain with our company following such transaction on the past operations of such target business. Furthermore, in such a situation, many of the acquisition criteria and guidelines set forth in this prospectus may be rendered irrelevant. If we do not obtain a fairness opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to such criteria, the fair market value of such a target would be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as actual and potential sales, earnings, cash flow and/or book value, discounted cash flow valuation or value of comparable businesses. We can provide no assurances that our management team’s expertise will guarantee a successful initial business combination. In addition, our management team is not required to devote a significant or certain amount of time to our businesses and our management team is currently devoting time to, and is involved with, other businesses. Our sponsor is an affiliate of Cartesian Capital Group, LLC (“Cartesian”), a global private equity firm and registered investment adviser headquartered in New York City, New York. Cartesian has extensive experience providing growth capital to companies around the world. Since its inception in 2006, Cartesian has managed more than $3 billion in committed capital. Cartesian was founded by Peter Yu, who previously founded and served as Chief Executive Officer of AIG Capital Partners, Inc. (“AIGCP”), a leading international private equity firm with over $4.5 billion in committed capital. Cartesian’s team currently consists of 23 professionals, who together have more than 300 years of international private equity experience. Collectively, the Cartesian team has executed more than 55 market-leading investments across 30 countries. Over the years, the Cartesian team has developed an extensive network of relationships, particularly in North America, Europe, South America, and Asia, and an established record of innovative and opportunistic investing, consistent discipline, and significant value creation for all stakeholders. We believe our team has the required analytic, financial, and operational expertise to complete a successful initial business combination and generate attractive risk-adjusted returns for our shareholders. Our executive offices are located in New York, New York.

Factorial Energy Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Commercialization advanced: Factorial reported its first commercial aerospace/drone battery order and expects initial revenue in 2027, with the order described as a lead indicator of that path.
• Positive Sentiment: Customer drone testing reportedly delivered a 30% increase in flight range before engineering optimization, while the company targets approximately 450 Wh/kg energy density by year-end versus roughly 250–330 Wh/kg for typical production lithium-ion cells.
• Positive Sentiment: Factorial expanded manufacturing and commercialization optionality through partnerships with SK On, drone integrators across three continents, and automotive OEMs including Mercedes-Benz and Stellantis; its FEST platform is designed to use up to 80% of existing lithium-ion manufacturing equipment.
• Positive Sentiment: The company reported FEST manufacturing yields improving to approximately 85% on tens-of-megawatt-hour-scale lines, supporting management’s claim that its process can scale with less capital intensity than building proprietary gigafactory capacity.
• Negative Sentiment: Factorial has not yet generated commercial revenue and does not expect to do so until 2027; it also expects 2026 non-GAAP operating expenses of about $40 million and capital expenditures of approximately $13 million, with FEST and Solstice line expansions not scheduled for completion until 2027 and 2028, respectively.

Presentation

[Operator]

Please note this conference is being recorded. I will now turn the conference over to Rodny Nacier, Investor Relations. Thank you, Rodny. You may begin.

[Rodny Nacier, Partner at ICR]

Thank you, and good afternoon. With me today are Dr. Siyu Huang, Co-founder and Chief Executive Officer, and Richard Wei, Chief Financial Officer. Earlier today, we published our second quarter shareholder letter on the Investor section of our website at factorialenergy.com. The company uses its website to disclose material, non-public information, and to comply with its disclosure obligations under SEC Regulation FD. Investors are encouraged to monitor the site and sign up for email alerts. Today's discussion contains forward-looking statements within the meaning of applicable securities law, including statements regarding industry trends, future performance, manufacturing capabilities, business plans, and milestones. Actual results may differ in a material way. Please review the risk factors described in the quarterly report on Form 10-Q for the quarter ended June 30, 2026, filed today, and in our registration statement on Form S-4.

[Rodny Nacier, Partner at ICR]

Factorial disclaims any obligation to update forward-looking statements except as required by law. During this call, we will refer to non-GAAP operating expenses, a financial measure that is not prepared in accordance with Generally Accepted Accounting Principles. We define non-GAAP operating expenses as GAAP operating expenses, excluding depreciation and amortization, non-cash lease expenses, and stock-based compensation. All of which can be found on our consolidated statement of cash flows. Management uses these measures to plan and evaluate the cash cost of operating the business. It has limitations, should not be considered in isolation, may not be comparable to similarly titled measures used by other companies, and is not a substitute for the most directly comparable GAAP measure. A reconciliation to GAAP operating expenses is included in today's press release and posted on the Investor section of our website. I will now turn it over to Siyu.

[Siyu Huang, Co-founder and CEO at Factorial]

Thank you, Rodny. Good afternoon, everyone, and welcome to our inaugural earnings call as a public company. Eight weeks ago, our team rang the Nasdaq opening bell. That moment belongs to the people who spent the past decade building this technology and to the partners who believed in it early. Today, I wanted to show you what we have done with that trust. For those new to Factorial, our June 30 shareholder letter laid out who we are and our commercialization roadmap in detail. Today, I will update you on our recent advancement at our company and hit on two important topics I hear most often from investors and from people across our industry. The first topic is: when will solid-state batteries produce revenue? The second is: how does an American battery company win in an industry whose production base is overwhelmingly concentrated in Asia?

[Siyu Huang, Co-founder and CEO at Factorial]

I'll discuss both within the context of our long-held strategy and our recent achievements. Beginning with the first topic. Moore's Law, if it were applied to batteries, is not every two years. It is closer to every 20 years. Lithium-ion, after three decades of development, is now approaching practical limits on energy density and safety. We spent the past 10 years building technology designed to move beyond those limits. At the simplistic level, a traditional battery runs on liquid inside, and as you push for more energy, that liquid can become the limiting factor on safety and performance. Solid-state technology replaces all or a portion of the liquid with a solid, making the system more stable and allowing performance beyond the reach of liquid-only systems. Our commercialization efforts primarily focus on two proprietary platforms, together protected by more than 150 patents and patent applications.

[Siyu Huang, Co-founder and CEO at Factorial]

FEST is a high-power platform and built for flexibility, pairing a polymer with a liquid component. Solstice, our all solid-state platform, contains no liquid at all and takes this one step further, adding benefits for space and robotics that require high thermal stability and safety. Beyond the two platforms, our cell designs extend to full liquid advanced electrolyte systems, where customer requirements call for extreme high energy and high power performance. It is a range we can move across as demand evolves in the high-spec markets we serve. From the beginning, our strategy has been sequenced. High-spec markets such as aerospace, robotics, and supercars is our near-term revenue focus, where performance is decisive and adoption cycles are shorter. Automotive is our midterm opportunity. At longer term, we see significant opportunities in data center and energy storage. In recent months, we began converting that strategy into commercial momentum.

[Siyu Huang, Co-founder and CEO at Factorial]

In May, we announced partnerships with leading drone battery integrators across three continents, including KULR Technology Group in the U.S., Tulip Tech in Europe, and JRES in South Korea. We showcased that work at XPONENTIAL conference in Detroit. At that stage, these were only early relationships and engineering programs. In July, these relationships began producing results. Customer drone flight tests with Tulip demonstrated more than a 30% increase in flight range using our solid-state and lithium-metal battery technology, and that was achieved before any engineering optimization. Last year, our cells powered a drive of more than 1,200 km on a single charge on public roads. This year, the same platform performs in the air on a customer's aircraft on the strength of the drone flight test. Factorial and Tulip established a commercialization framework covering joint customer engagement and a pathway towards volume production.

[Siyu Huang, Co-founder and CEO at Factorial]

In July, we also reached a major milestone, our first commercial battery order from a separate leading U.S. drone manufacturer, moving us towards commercial deployment in airspace. A flight test demonstrate what the technology can do. A commercial order demonstrate that a customer values it. We expect this to be the first of additional orders in the aerospace end market, and we see it as an early step in building the foundational energy layer that will underpin our near-term revenue objectives. Moving from partnership announcement to commercial order within a few months reflects years of preparation. Our intent is to repeat the pattern in markets beyond aerospace, validate in the field, formalize the partnership, and earn the order. Now to the second topic: how Factorial can win as an American battery company? Our answer has three parts. The first is performance.

[Siyu Huang, Co-founder and CEO at Factorial]

We're focused on producing the highest quality solid-state batteries for the most demanding application. We deliver technology that lithium-ion cannot reach in end markets where performance determines outcomes. In these markets, the customer's need depends on range, payload, and endurance. Energy density sets the ceiling on all three. The second is capitalized scalability. Our FEST platform is compatible with up to 80% of existing lithium-ion manufacturing equipment. We design it that way deliberately so our partners can adopt our technology using the industry's installed manufacturing base rather than building new infrastructure. We can scale through partner capacity rather than our own capital. Our recently announced Memorandum of Understanding with SK On, one of Korea's top global battery manufacturers, reflects this strategy in action. Together, we're evaluating how our solid-state technologies can be manufactured at scale using SK On's existing global manufacturing network.

[Siyu Huang, Co-founder and CEO at Factorial]

Identifying cell manufacturing partners is a critical step ahead of any significant production program. SK On is our second manufacturing-focused partnership with a global battery producer, which expands our optionality. We will continue to work with others across the industry. The third element is our strategic alignment with U.S. supply chain priorities. We're headquartered in Boston with manufacturing in the United States and South Korea and partners with deep roots in the U.S. national security community. U.S. policy is moving towards securing battery supply chains, particularly for drones and aerospace platforms. Our footprint and partnerships align directly with that direction. Putting it all together, we do not believe this industry is winner take all. Asian manufacturers account for virtually all global battery cell production today, creating a significant opportunity for differentiated suppliers serving the U.S. and European markets. We intend to be one of them.

[Siyu Huang, Co-founder and CEO at Factorial]

Before I hand the call to Richard, I'll hit on two additional items from this quarter. In June, working with Stellantis, we achieved the first automotive integration of solid-state battery technology in North America. Our FEST cells are in a Dodge Charger Daytona development vehicle. The integration required a patented new mechanical pack architecture that Stellantis designed specifically to accommodate solid-state cells. We believe this is the first solid-state battery vehicle running on American soil, and it makes Factorial the first solid-state battery maker to achieve successful vehicle integration with two top 10 global OEMs. The Mercedes drive demonstrated performance at the high end. The Stellantis program integration creates a platform to reach a larger share of the market. Our announced automotive partnerships represented 26% of the 4.4 million EVs sold in the U.S. and Europe in 2024 in a market projected to exceed $200 billion by 2030.

[Siyu Huang, Co-founder and CEO at Factorial]

Following the close of our business combination, we were also honored to welcome Dieter Zetsche, former Chairman of Daimler AG and Head of Mercedes-Benz Cars, to our Board of Directors. His experience guiding vehicle programs from concept to production has already been invaluable to us. I will close my section by connecting the pieces. In drones, we have shown our playbook coming together end to end from platform partnerships to technology demonstration to commercial orders within months. That same playbook is already underway in mobility with strong product synergy between the two. A demonstration vehicle on the road today serves the same purpose as a drone flight test, providing real-world proof of performance that builds towards commercial orders. The much larger mobility market simply moves on a longer timeline. The broader picture supports both paths.

[Siyu Huang, Co-founder and CEO at Factorial]

According to IEA and McKinsey estimates, global battery demand is projected to grow roughly five-fold by 2030 to 5 TWh. Much of the fastest-growing demand comes from machines that must carry their own energy, including drones, autonomous flights vehicles, and robots. We have spent a decade preparing for this environment. I will now turn the call to Richard to walk through our financial framework and outlook.

[Richard Wei, CFO at Factorial]

Thank you, Siyu, and good afternoon, everyone. We enter this next phase with a strong capital position and disciplined approach to how we deploy it. I will provide an overview of our financial framework and outlook. It has three parts: our capital-light model, our capital resources, and how we track our progress. First, our capital-light model. We recorded operating expenses of $13 million for the second quarter and $19.5 million for the first half of 2026. For the six months ended June 30th, 2026, our non-GAAP operating expenses, which excluded certain non-cash operating expenses, were $14.5 million, with spending directed primarily at R&D and the operational infrastructure behind the milestones Siyu described. For the same six-month period, capital expenditures were $0.6 million. These results were in line with our expectations. For the full-year 2026, we expect non-GAAP operating expenses of approximately $40 million.

[Richard Wei, CFO at Factorial]

We also expect capital expenditures of approximately $13 million. To put those figures into context, $13 million of annual CapEx is a small fraction of what a battery scale-up has historically required. That is by design, and it reflects our capital-light strategy. This capital spending is our own investment, primarily directed at expanding our own fabrication lines to support production for our FEST and Solstice programs. We expect this FEST expansion to be completed by the end of 2027 and the Solstice expansion to be completed by the end of 2028. Beyond those lines, we do not intend to fund large-scale capacity on our own balance sheets. As demand scales, we plan to deploy capital prudently as we grow through manufacturing partners who contribute production capacity while we contribute intellectual property, key materials, and engineering support. Second, our strength and capital position.

[Richard Wei, CFO at Factorial]

As of June 30th, 2026, cash and cash equivalents were approximately $112.8 million, largely reflecting the proceeds of our business combination and related PIPE transaction to fund our current operating plan. Our spending is calibrated so that the capital we hold today carries us through the milestones that matter. Third, tracking our progress. We believe an important measure of our progress is energy density, as we have mentioned during today's call. It is the single largest driver of range, payload, and endurance in every market we serve, making it a direct indicator of how our technology is advancing. It is especially relevant to our drone programs, which are our nearest term path to revenue and where higher energy density translates directly into longer flight range and enhanced functionality.

[Richard Wei, CFO at Factorial]

Our platform has demonstrated 390 Wh per kg in cell delivery to customers and has been validated in real-world testing, both on the road and in the air. Within our drone programs, we expect to reach approximately 450 Wh per kg by year-end, with continued improvement targeted for next year. For context, typical production lithium-ion cells today deliver 250 Wh-330 Wh per kg. So 450 Wh per kg represents meaningfully more energy in the same weight, and that is what extends flight time and payload. With this foundation in place, we expect to achieve our first commercial revenue in 2027, generated from the high-spec markets we serve. Our first commercial order from aerospace announced in July and the first commercial order from the supercar announced this January are leading indicators of that path.

[Richard Wei, CFO at Factorial]

For a next-generation battery company, crossing from validated technology to commercial revenue is a critical milestone, and we believe we are positioned to reach it ahead of others in our industry. In summary, our framework rests on disciplined spending, a strong capital position, and a measurable indicator of advancement. We look forward to updating you on our progress. I will now turn the call back to Siyu.

[Siyu Huang, Co-founder and CEO at Factorial]

Thank you, Richard. Ten years ago, we started this company on a conviction that the world would need fundamentally better batteries, and that delivering them would help define the next era of mobility and intelligence. This year, that conviction produced a flight test, a partnership, and a first commercial order. Our next milestone is first commercial revenue. There is a great deal of work ahead, and our team is eager to do it. Humanity deserves better batteries, and delivering them is our mission. Operator, we're ready for questions.

[Operator]

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question is from Derek Soderberg with Cantor Fitzgerald. Please go ahead.

[Drew Nordquist, Analyst at Cantor Fitzgerald]

Hi, this is Drew Nordquist on for Derek. Thank you guys for taking the questions, and congrats on the first quarter call. Just wondering if you can go into more detail on the first drone order, and specifically on size of the order and how much of it will be satisfied with third-party manufactured cells, and if that's going to impact the margin on that order? Thank you.

[Richard Wei, CFO at Factorial]

Hi, Drew. Thank you for the question. Due to customer confidential reasons, we're not able to get into the details. As you know, a lot of our customers really prefer to be low profile, so I can't get into that. But we're really excited to have a real commercial order for the drone business.

[Drew Nordquist, Analyst at Cantor Fitzgerald]

Okay. Well--

[Siyu Huang, Co-founder and CEO at Factorial]

To that point, we've also got our first commercial. We're looking to get our first commercial revenue in 2027. This order is really the lead indicator of that path, which is a breakthrough for Factorial to have this potential revenue coming up in 2027.

[Drew Nordquist, Analyst at Cantor Fitzgerald]

All right. Thank you. Then I have a follow-up. You said the initial customer flight testing for the drones demonstrated a 30% increase in flight range, and that was achieved before any engineering optimization. Can you give any sort of size you get in terms of how much more room there is to improve that once you implement engineering optimization?

[Siyu Huang, Co-founder and CEO at Factorial]

Right. This is the similar chemistry that we have shipped to Mercedes for the B-sample. At that time, we disclosed that this is around 390 Wh per kg in energy density. We do have this ambitious target, as Richard just mentioned, to move towards potentially 450 Wh per kg towards the end of the year. I would say that's where the ceiling of lithium-ion battery is really the floor for solid-state and lithium-metal batteries. There is definitely a lot of room to improve.

[Drew Nordquist, Analyst at Cantor Fitzgerald]

All right. Thank you, guys.

[Siyu Huang, Co-founder and CEO at Factorial]

Yep. Thank you, Drew.

[Operator]

Our next question is from Colin Rusch with Oppenheimer. Please go ahead.

[Colin Rusch, Analyst at Oppenheimer]

Thanks so much, guys. Can you talk a little bit about the development of pack technology and how that's supplementing some of the cell technology or leveraging the cell technology that you guys have developed, and really getting it ready for larger applications?

[Siyu Huang, Co-founder and CEO at Factorial]

Yeah, that's a great question. I think, for us, we have been very focused on the cell technology development in the last few years. It's difficult and challenging enough to be a cell maker. I would say we decided to work closely with our partners for pack manufacturing in the near term, because a lot of them are already there. It's great that we formed the partnership with the three leading pack integrators, the pack makers, across three continents earlier this year with KULR, Tulip, and JRES. I think they not only have a great technology to integrate our cells, but also have great networks to help us distribute our cells to the global customers. When it comes to technology, some of our cells require very minimal change to what the lithium-ion battery pack technology has today.

[Siyu Huang, Co-founder and CEO at Factorial]

Some companies, they just shrink wrap it and send it into the air. That is why we are talking about minimum engineering efforts. But of course, there are definitely ways to engineer it in a more sophisticated manner, which will increase the performance, and eventually, we will be able to have a potentially broader utilization for the technology as well.

[Colin Rusch, Analyst at Oppenheimer]

Excellent. Can you just give us a sense of where you are at from a yield perspective on the cell manufacturing and how the cadence of improvement is progressing and how we should think about that through year-end?

[Siyu Huang, Co-founder and CEO at Factorial]

Yeah. We started the production about two, three years ago for our FEST technology. We started with a yield of 10%. After a few months, we were able to ramp it up to 60%, 70%, and it eventually gets 85% of the yield. I would say that performance for a line with tens of megawatt hour scales is already quite impressive. We have heard similar numbers from leading established lithium-ion battery makers that typically, if you have a gigafactory, you could get to 35% yields for gigafactory. For a line with sub-gigawatt hours capacity, usually 70% to 80% is already state of art.

[Siyu Huang, Co-founder and CEO at Factorial]

By achieving 85% yield, it shows that we not only are able to achieve high consistency and high performance for the cell. At the same time, we are able to have much lower cost than some of the other players in the market that are running below 30% yields, which is quite advantage to the point that actually our manufacturing process is highly compatible with the lithium-ion. We do not have to recreate a wheel while we are doing manufacturing.

[Colin Rusch, Analyst at Oppenheimer]

Excellent. Thanks so much, guys.

[Siyu Huang, Co-founder and CEO at Factorial]

Thank you, Colin.

[Operator]

Once again, if you would like to ask a question, please press star one on your telephone keypad. We have reached the end of the question-and-answer session. I would like to turn the floor back over to Siyu Huang for closing comments.

[Siyu Huang, Co-founder and CEO at Factorial]

Great. Thank you. Thank you all for the questions and for joining our first earnings call. This results call is about updating you on our technology and commercial progress. We hope you found it insightful, and we look forward to updating you in coming quarters. We thank you all for the confidence in Factorial.

Participants

Analysts

• Rodny Nacier, Partner at ICR
• Siyu Huang, Co-founder and CEO at Factorial
• Richard Wei, CFO at Factorial
• Drew Nordquist, Analyst at Cantor Fitzgerald
• Colin Rusch, Analyst at Oppenheimer