SES AI NYSE: SES reported first-quarter 2026 revenue of $6.7 million, up 47% sequentially from $4.6 million in the fourth quarter of 2025, as the company cited growth in its energy storage systems business and early contributions from its drone cells and Molecular Universe (MU) software subscriptions.
Founder and CEO Qichao Hu said the company had “a strong start for 2026,” with Q1 revenue “well above published consensus estimates.” SES AI reaffirmed its full-year 2026 revenue guidance of $30 million to $35 million, with contributions expected from all three revenue-generating business units.
Leadership transition
Hu also addressed a finance leadership change, noting that CFO Jing Nealis will transition out of the role effective April 27. “On behalf of the entire team and our board, I want to thank her for her contributions and wish her well,” Hu said.
The company appointed Ray Liu as its new CFO effective April 27. Hu described Liu as a finance executive with more than 20 years of experience in FP&A, strategic finance, and SEC reporting, including roles at Aiden and MetLife Investment Management. Hu added that Liu is a CFA charterholder and CPA.
Energy storage systems: UZ Energy growth and North America entry
Hu said energy storage systems (ESS) remained SES AI’s “largest near-term revenue driver” and accounted for the majority of Q1 revenue through UZ Energy. The company pointed to growing demand for its commercial and industrial energy storage solutions and an expanding geographic footprint.
SES AI announced entry into the North American market through a multi-year distribution agreement with AT-G E-Power, which Hu described as a leading North American distributor of renewable energy and energy storage solutions operating since 2001. Hu said the contract is valued at approximately $20 million over three years and provides access to AT-G E-Power’s distribution network across residential, commercial, and industrial segments.
During Q&A, Hu characterized the arrangement as “a wholesale distribution,” and CFO Jing Nealis confirmed revenue recognition is shipment-based. “Once we ship it, based on the Incoterm, we will be able to recognize product revenue,” Nealis said.
Hu also discussed the company’s Edge Box offering, describing it as an on-premise system designed to more accurately estimate battery state of charge and health. He said typical industry estimation error can be 7% to 10%, which can lead customers to buy more capacity than needed. With Edge Box, Hu said error can be reduced to about 3% or less, potentially lowering customer costs and providing data security because it operates on-premises rather than in the cloud. Hu added that more accurate estimates could also help customers participating in virtual power plant programs or electricity trading.
On ESS seasonality, Nealis said Q2 and Q3 are “usually higher than Q4,” but emphasized that UZ Energy’s global footprint across regions makes the overall pattern less tied to a single market. “For this year at least, we see growth quarter-over-quarter, with some seasonality,” she said.
Drone cells: manufacturing conversion, NDAA compliance, and customer pipeline
Hu said SES AI completed the conversion of its manufacturing line at its Chungju, South Korea facility from EV-format cells to drone-format power cells. He noted the facility produced the “world’s first 100 amp-hour lithium metal cell” in 2021 and has been NDAA compliant since that year. Hu said the converted line is expected to ramp to an annual capacity of more than 1 million drone cells and incorporates “AI for manufacturing” capabilities intended to support quality and cost effectiveness.
Hu said the company began shipping NDAA-compliant cells produced in Chungju to prospective defense and commercial drone customers earlier in the month for evaluation and qualification testing. He described customer interest as “strong,” and said the U.S. defense drone market represented the most significant near-term opportunity.
When asked about qualification timelines, Hu said drone qualification typically takes “one-two quarters,” adding that many performance and product tests started last year have largely been completed and that current work is focused on supply chain audits verifying materials and processing occur in Korea. Asked about the mix of defense versus commercial interest, Hu said it is “predominantly defense,” noting that customers seeking NDAA compliance are typically those pursuing defense contracts.
In another Q&A exchange, Hu addressed potential revenue from the drone cell business. He said market pricing for NDAA-compliant cells varies by format but generally ranges from $25 to $35 per cell, implying that 1 million units could represent about $25 million to $35 million in revenue. Hu also said the factory could scale beyond 1 million units if needed.
Hu said the company has “a pipeline of a few dozen customers” for drone cells and expects drone cell revenue in Q2, with momentum building in Q3 and Q4. He described 2027 as “a full year” in which the company expects to have the ability to deliver a full year of NDAA-compliant cells.
Materials and Molecular Universe platform updates
On materials, Hu said SES AI and its customers have been discovering new electrolyte materials through the Molecular Universe platform, including for applications beyond the company’s current cell production. He said approximately a half dozen customers have progressed through second-phase testing for materials discovered using the platform, and that the overall pipeline of customers has grown.
Hu said SES AI remains on track with its Heisen joint venture, which he said is intended to leverage 150,000 tons of annual global capacity to produce materials at commercial scale as demand develops.
Hu also announced the release of Molecular Universe version 2.5, described as the fifth major iteration since the platform launched in 2024. He said version 2.5 upgrades capabilities across six AI-powered workflows—ask, search, formulate, design, predict, and manufacture—and expands enterprise on-premise deployment options while covering both lithium and sodium chemistries.
During the quarter, Hu said a “major global battery manufacturer” committed to a multi-year subscription of the company’s Molecular Universe “Search in a Box” product, which he said SES AI views as validation of the platform. Hu added that on-premise MU revenue is expected to be a modest direct contributor in 2026, though he said the platform’s largest impact is expected to come from advantages it provides across the ESS, drone, and materials businesses. When asked to quantify MU on-premise contribution, Hu said the company may provide more detail “in the next quarter.”
Financial results: margins, losses, liquidity, and cost outlook
CFO Jing Nealis said SES AI is presenting results sequentially due to the company’s three-business-unit structure taking shape in Q4 2025. She also noted that Q4 2025 revenue was impacted by approximately $1.5 million of revenue that shifted into Q1 2026.
- Revenue: $6.7 million in Q1 2026, up from $4.6 million in Q4 2025.
- Gross margin (GAAP): 18.1% versus 11.3% in Q4 2025.
- Gross margin (non-GAAP): 18.3% versus 11.7% in Q4 2025, excluding stock-based compensation and depreciation/amortization in cost of revenue.
- Operating expenses: $19.1 million GAAP versus $18.2 million in Q4 2025; $14.3 million non-GAAP versus $13.5 million in Q4 2025.
- Net loss (GAAP): $12.1 million, or a $0.04 loss per share, compared with a $17.0 million net loss, or $0.05 loss per share, in Q4 2025.
- Net loss (non-GAAP): $11.1 million, or $0.03 loss per share, compared with a $11.8 million net loss, or $0.04 loss per share, in Q4 2025, excluding items including stock-based compensation and changes in fair value of sponsor earn-out liabilities and including interest income.
- Adjusted EBITDA: loss of $12.8 million versus a loss of $13.8 million in Q4 2025.
Nealis highlighted that GAAP net loss can be affected by non-cash mark-to-market changes in sponsor earn-out liabilities. In Q1 2026, SES AI recorded a $4.2 million non-cash gain related to these liabilities.
The company used approximately $20 million in cash for operations during Q1 and ended the quarter with liquidity of approximately $178 million. Nealis said SES AI’s “CapEx-light business model” remains a core discipline and that the liquidity position provides runway to fund operations and execute 2026 growth initiatives.
SES AI reiterated its expectation of an approximately 15% reduction in full-year operating expenses. In response to a question about cadence, Nealis said the company has been taking actions starting in Q1, with some reduction expected in Q2 and the “full quarter impact starting from Q3,” adding that Q4 may be “slightly lower than Q3.”
Nealis also noted the company expects to file a new S-3 shelf registration statement concurrent with its Form 10-Q because the current shelf expires April 28, calling it “a routine administrative filing to maintain our financial flexibility.”
Looking ahead, Hu said the company’s priorities for the remainder of 2026 include executing on the ESS opportunity through UZ Energy and its distribution network, advancing the drone cell business toward commercial-scale engagements, delivering on the materials pipeline, and continuing to develop Molecular Universe as both a revenue stream and competitive advantage.
About SES AI NYSE: SES
SES AI Corporation engages in the development and production of high-performance Lithium-metal rechargeable batteries for electric vehicles, electric vehicle take-off and landing, and other applications. The company was founded in 2012 and is headquartered in Woburn, Massachusetts.
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