Amprius Technologies Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
March 20, 2025

There are 10 speakers on the call.

Operator

Good afternoon. Welcome to the Amprius Technologies Fourth Quarter and Full Year twenty twenty four 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 our financial and business performance, our business strategy, future product development or commercialization, new customer adoption and new applications, our growth and the growth of the markets in which we operate, 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 Ambrios' 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 Ambrios' filings with the Securities and Exchange Commission. Finally, I'd 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.amprius.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 Amprius Technologies' CEO, Doctor. Kenning 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 an overview of our record performance and some of our 2024 accomplishments, while also highlighting the upcoming milestones we look forward to achieving soon. After that, our CFO, Samuel 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 to those who may be new to our company.

Speaker 1

Ampere is a pioneer and a leader in silicon anode battery space. At Ampere, we develop, manufacture and market high energy density and high power density silicon anode battery with applications across all segments of electrical mobility, including the aviation, electrical vehicle and light electrical vehicle industries. 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, us commercially available batteries. Amprius has been delivering commercial batteries to the market with up to four fifty watt hour per kilo and eleven fifty watt hour per liter, 10C power capability, extreme fast charging rate of 0% to 80% stay of charge in approximately six minutes the ability to operate in the wide temperature range of well as 30 degrees Celsius up to 55 degrees Celsius and the safety design features that enable us to pass the United States military's benchmark mail penetration test.

Speaker 1

Each of these performance parameters is critically important to the real world electrical mobility applications. Not only do our batteries enable certain aircrafts and vehicles to maximize performance, but they enable our customers to achieve their economic targets as well. In addition to our commercially available batteries today, we have also achieved a third party validation of our latest 500 watt per kilo 1,300 watt hour per liter battery platform. It's our belief that there are no other commercial batteries on the market that can perform at these levels today. Ampere is a silicon anode battery technology pioneer with over a decade of development experience and the long track record of commercial shipments and customer achievements.

Speaker 1

2024 was an important and productive year for Ampere. Company introduced a new silicon anode battery platform, Syco, commercialized a group of new batteries with breakthrough performance, fueled over 1.8 gigawatt hour contract manufacturing capacity, achieved record sales revenue, engaged with two thirty five customers and developed a strong growth path. Innovative technologies and the breakthrough product performance are the foundation of Ampere's business. Large scale manufacturability and commercialization of these technologies and the products have enabled Amprius to achieve incredible milestones and business results this year. In January 2025, Ambreos introduced the first battery cell in the industry with a combined high energy and high power.

Speaker 1

Three seventy watt per kilo energy density and offering up to 3,500 watt per kilo power. Furthermore, the cell supports high discharge rates of up to 10C without cooling and up to 15C with active cooling, ensuring quick power delivery without compromising long term. This cell provides an ideal situation for aviation electrical vehicles and any electrical mobility applications that require both endurance and rapid energy delivery. In Q4, the preproduction 10 ampere hour samples were delivered to six of our customers, enabling real world testing in challenging environments. We are seeing strong customer interest for this battery with industrial leaders like Teledyne Freer already actively evaluating its capabilities.

Speaker 1

Ampere has also developed and shipped high performance EV battery cell sample to the United States Advanced Battery Consortia or USABC in 2024. The USABC awarded Amperes a $3,000,000 grant to develop a low cost and a fast charging battery cell back in 2022. Since then, Ampere has not only met the U. S. ABC's development targets, but exceed them by delivering a cell with a specific energy of three sixty watt hour per kilo at the beginning of life and a power density of 1,200 watt per kilo.

Speaker 1

The A Sample UV cells can also charge to 90% of their rate energy in just fifteen minutes, exceeding the US CDC target of 80% with the same timeframe. In 2024, Ampere also received the Xtime Prime Award from the US Army to develop a large format 500 watt per kilo battery cell. We believe that this product, which is in development with our partner, AeroVironment, will allow supreme battery performance that is not available anywhere else. This project is expected to be complete this year. Today, Ampere has a high performance commercial battery portfolio that provides critical solutions to the customer with various applications across the electrical mobility market.

Speaker 1

The 14 different SKUs provide a range of performance options for different applications that are all commercially available today. Technical achievements at Ampere have enabled our commercial success. In fact, in the fourth quarter alone, we shipped to 98 total customers with 53 of those being new to the MPS platform. Our ramp in customer growth complements by volume shipments to strategical customers, resulting in fourth quarter revenue of $10,600,000 a 35% increase from the third quarter of twenty twenty four and one hundred and seventy percent increase from the fourth quarter of twenty twenty three. Additionally, 77% of the revenue from Q4 came from outside of The United States compared to just twenty two percent in the same period of last year on a shift to basis and demonstrates the expansion of our customer base worldwide.

Speaker 1

Over the course of 2024, we shifted to a total of two thirty five customers. This includes new customers as well as repeated volume orders from our long term partners like Auto Airbus, Aero Environment, Canada and FLIR, Class Hamdani and BAE Systems. The rapid customer expansion we are driving is assessment to our product competitiveness, manufacturing capability and sales strategy. We generated $24,200,000 in revenue for the full year, a 167% increase from 2023. In 2024, we've developed some sizable business opportunities to support our growth for years to come.

Speaker 1

In Q3 and Q4, we shared that we signed two separate agreements with Fortune 500 companies. First agreement announced in September 2024 was a non binding letter of intent with the Fortune Global five hundred technology OEM to develop a high energy cycle cylindrical cell for the light electrical vehicle market. The battery solution that AmChrys will provide will be a technology breakthrough in cell chemistry, cell design and cell manufacturing. We believe it will be a very attractive product for the lighter electrical vehicle market, which in Q4 contributed about 25% of our Q4 revenue. The light electrical vehicle market is expected to grow significantly.

Speaker 1

Based on January 2025, the report from the business research company, the light electrical vehicle market size is expected to reach approximately $136,000,000,000 by 2029. In addition, the light electrical vehicle market has a shorter design cycle because it's already operating at a scale. The other agreement announced in October 2024 was a development contract for a small format custom high energy density Dimax part cell. Ampere's high energy batteries provide a critical solution to the customer's application. We expect to produce a battery with approximately 50% less weight and size compared to their current battery without compromising performance.

Speaker 1

At the end of Q3, we also launched two contracts totaling over 20,000,000 to supply 40 amp hour high performance sales for lighter electrical vehicle applications. As I update these sales are already shipping and we expect to recognize 100% revenue in 2025. In total, we add over 16,000,000 in new customer purchase orders to our backlog in the fourth quarter, giving us additional visibility into our growth for 2025. In addition to the performance of Ampere's batteries, our manufacturing capability and the capacity have attracted customer attention as well. Today, Ampere has over 1.8 gigawatt hour cell manufacturing capacity and is well equipped to deliver all types of the battery cells to customers, porch cells, cylindrical cells and prismatic cells.

Speaker 1

The company is also actively working on developing a global contract manufacturing network. Under 2025, we are increasingly optimistic about our future and have begun the year with a running start. Last month, we announced that we secured a $15,000,000 purchase order from a leading unmanned aircraft system or UAS manufacturer for our cycle sales. This volume purchase order follows the success for field trials and the qualification over the course of nine months, leading to Ampere's battery being designed into the manufacturer's fixed wing UAS platform. These orders include a critical supply for the customers' production ramp and we expect to ship the sales in the second half of twenty twenty five.

Speaker 1

As more commercial and the defense aviation customers complete their battery qualification process, we are seeing a strong pipeline of follow on commitments. We believe that the orders like this indicate that the tool market is continuing to grow and that Ampere is going to play a larger part in powering future applications. Fulton Business Insights projects the global drone market will surge from 18,000,000,000 in 2023 to $213,000,000,000 by 02/1932. So we believe we are just at the beginning of a significant expansion of one of our addressable markets. This quarter, we have also designed and shipped new high performance 6.3 amp hour cylindrical cells for use in the light electrical vehicle sector.

Speaker 1

This cell delivers over 25% more capacity than current 21,700 cells, setting a new standard for energy density in the industry for this widely used cell format. Because of its seamless integration into existing battery systems, the manufacturers can implement a high capacity, longer lasting power without costly redesigns. As a final note, we have obviously monitoring the policy changes and the potential industry headwinds resulting from the recent changes in federal administration. With much of the global battery supply in Asia, we are not immune to economic policy impacting the region. But we are taking swift action to mitigate any risks to the extent that we are able, including diversifying our manufacturing partnerships and the supply chains to avoid geopolitics, geopolitical concerns and the tariff related issues.

Speaker 1

We plan to share additional updates with you as they become available. We remain confident in our expectation for growth throughout 2025. With that, I will now turn the call over to Sandra to review our financial results.

Speaker 2

Thank you, King. I would now like to spend a few minutes covering some of our key financial updates. As a reminder, our detailed financials can be found in our shareholder letter. We ended the fourth quarter with $10,600,000 in total revenue. As we have previously discussed, our total revenue is the combination of our main revenue streams, product revenue and development services and grant revenue.

Speaker 2

This quarter, $10,300,000 came from our product revenue, representing a $4,300,000 or 71% increase sequentially. Product revenue in Q4 twenty twenty three was just $900,000 marking a nearly 1000% increase year over year. Our development services and grant revenue totaled $300,000 this quarter, which was down from $1,800,000 in Q3 and $3,000,000 year over year. As we've discussed in the past, development services and grant revenue from large development programs are non recurring in nature, leading to greater fluctuations depending on the comparison period. The overall increase in revenue this quarter was primarily driven by the addition of new customers.

Speaker 2

As Kang mentioned, we shipped to 98 customers in the fourth quarter. Of these customers, only three accounted for greater than 10% of revenue, a decrease from four in the third quarter and an increase from two customers counted in the fourth quarter of twenty twenty three. Going forward, we plan to continue adding to our customer mix to diversify our revenue streams and provide more reliable product shipments as we get to a position of scale. Pivoting to our full year results, we closed 2024 with $24,200,000 in revenue. This represents 167 percent increase from the $9,100,000 in revenue we generated in 2023.

Speaker 2

This achievement was fueled by the increase in product sales as a percentage of total sales, supported by the impressive growth of our customer base. As a reminder, we shipped to two thirty five individual accounts in 2024. Moving to our profitability metrics, gross margin was negative 21% for the quarter compared to negative 65% in Q3 of twenty twenty four and negative 98% for the prior year period. For the full year, gross margin was negative 76% compared to negative 162% in the prior year period. The improvement is directly related to the launch of our Sycor product line, which has a positive gross margin contribution.

Speaker 2

As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Gross margins in 2024 were also impacted by pre construction planning costs related to the Colorado facility, which were completed in October of twenty twenty four. Now moving on to our operating expense management. Our operating expenses for the fourth quarter were $9,500,000 an increase of $3,400,000 or 55% compared with Q3 twenty twenty four and an increase of $3,600,000 or 62% from the prior year period. OpEx increased from Q3 to Q4 as a result of higher R and D costs associated with operating expenses compared to cost of sales.

Speaker 2

This change coincides with the runoff of large development contracts as we pivoted to a mix of revenue that is more heavily weighted to product sales. The sequential increase in OpEx also included non recurring G and A stock based compensation of $700,000 in Q4, which was associated with a fully vested grant that was made by our forward holding company, Amprius Inc, for key employees and service providers prior to the assumption of stock options by Amprius Technologies and a non recurring loss on a write down of property, plant and equipment of $1,900,000 in Q4. Year over year, the increase in OpEx was driven by increased investment in sales, the aforementioned reallocation of R and D from cost of goods sold as development services agreements run off, and the same non recurring stock based compensation charge and loss on a write down of property, plant and equipment. For the full year, our operating expenses were $27,900,000 compared to $24,000,000 in 2023. Our GAAP net loss for the fourth quarter was $11,400,000 or a net loss of $0.1 per share with $109,800,000 weighted average number of shares outstanding.

Speaker 2

In Q3 twenty twenty four, our net loss was $10,900,000 or negative $0.1 per share with $110,400,000 weighted average number of shares outstanding. Q4 twenty twenty three net loss was $9,700,000 or negative $0.11 per share with 88,500,000.0 weighted average number of shares outstanding. Our GAAP net loss included two non recurring charges that totaled $0.02 per share. The first one time event was a loss on a write down of property, plant and equipment of $1,900,000 as shown in our financial statements. The second is the stock based compensation charge from Amprius Inc.

Speaker 2

Of $700,000 For the full year, net loss was $44,700,000 or negative $0.45 basic and diluted EPS with 101,900,000 weighted average number of shares outstanding compared to a net loss of $36,800,000 or negative $0.43 per share with 86,200,000.0 weighted average number of shares outstanding in 2023. As of 12/31/2024, there were 99 full time employees, up from 92 at the end of the third quarter, with those employees primarily based in our Fremont, California location. Our share based compensation for the fourth quarter was $2,400,000 compared to $1,700,000 in Q3 and $1,100,000 in the prior year period. The sequential increase is primarily based on the non recurring grant of fully vested shares by Amprius Inc. For key employees and service providers.

Speaker 2

For the full year, share based compensation was $7,300,000 compared to $3,900,000 in 2023. This change is primarily due to changes in the Board of Directors and the previously mentioned non recurring grant of fully vested shares by Amprius Inc. As of 12/31/2024, we had 116,900,000.0 shares outstanding, which was up 5,600,000.0 from the prior quarter. The change includes 5,500,000.0 shares forfeited and canceled as part of the option assumption agreement with Amprius Inc. Prior to its dissolution.

Speaker 2

This decrease was more than offset by 300,000.0 shares related to option exercises and RSU vesting and 10,800,000.0 shares issued from our ATM reserve. Now turning to the balance sheet, we exited the year with $55,200,000 in net cash and no debt. The $20,100,000 net increase in cash is related primarily to the $22,600,000 we generated through the issuance of common stock under our at market sales agreement. As of 12/31/2024, we had over $66,000,000 left on the facility. Other key drivers for cash for the quarter included $6,100,000 used in operating cash flow.

Speaker 2

We continue to remain lean with a $2,500,000 to $3,000,000 monthly run rate, excluding transaction related costs. Our fourth quarter operating cash results included minimal non recurring expenses for the design and pre construction work on the Colorado facility, which was completed in October of twenty twenty four. At this time, we do not expect future expenses related to the facility build out. We also had $4,200,000 of cash inflow associated with the return of our deposits for long lead time items related to the Colorado facility. This was partially offset by $600,000 in property, plant and equipment purchases for the Fremont facility.

Speaker 2

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 Kang, I would like to take a moment to discuss our CapEx outlook for 2025. We expect to spend another $1,000,000 on supporting equipment to complete the two megawatt line in Fremont in addition to 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. The scope and schedule of the construction will be determined based on among other factors, timing and availability of funding, along with monitoring the overall sector for changes in demand, supply, battery cost structure, government incentives, trade tariffs and other considerations may also influence our decision, including whether to proceed with the construction at all.

Speaker 2

As Kang mentioned, we have secured adequate capacity for the foreseeable future through our contract manufacturing network and plan to expand that in 2025 without deploying our capital. That concludes my financial discussion. And I will now pass the call back to Cang.

Speaker 1

Thanks, Andrew. As we look ahead, our strategy at Ampere remains unchanged. Our top priorities are leading in technology innovation and product performance, ensuring world class manufacturing capability and sufficient production capacity, growing our customer pipeline as driving revenue growth and having a healthy balance sheet. We are excited about the year ahead and looking forward to growing our business on the momentum we build in 2024. In 2025, Ampere expects to deliver new high performance batteries, participate in new market segments, engage with more customers, build additional manufacturing partnerships and bring our business to another level.

Speaker 1

We believe that the opportunity ahead of Ampere is tremendous. Our team is confident in delivering what we have planned and promised. We have begun the year strong and we are looking to building increasing momentum throughout 2025. Over the next few months, we'll be attending several industrial and financial conferences and we hope to see you there. Thank you for your continued support of Amprius Technologies.

Speaker 1

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

Speaker 3

Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Colin Rusch with Oppenheimer. Please proceed.

Speaker 4

Thanks so much guys. Kang, you've got such a big list of customers at this point, you've been able to close a handful of them into larger contracts. Can you talk a little bit about the diversity of applications that you're seeing getting tested for? How much customization is required for those customers? And how many are in late stages of evaluation, where you might see something, call in the next quarter or so, where they would pull a trigger on a bigger purchase order?

Speaker 1

Okay. Thanks, Connie. We have two thirty customers in 2024. This is at the top of our pipeline funnel. There are three types of customers.

Speaker 1

There are customer already have the devices and they're using other batteries, just use our battery to replace it. Those can be very quick replacement that demonstrate in 2024 for light electrical vehicle business and a small fraction of the aviation business that takes a couple of months to start using our battery. We will anticipate some business like this in 2025. The second type of customer is that they have devices, but they needed to qualify that but they need to redesign not the devices, okay, the battery pack and the evaluate our battery to fit into their application. This could be nine months to a year type of qualification process.

Speaker 1

The third type of customer, for example, EV talk, not only they need to qualify our products, they need to certify their own product. So those would take longer. But we look at the 2020 based on our 2024 experience, we are quite confident we can convert a large portion of those customers to the purchase order in 2025.

Speaker 4

Thanks so much. And then in terms of your manufacturing base and your geographic exposure, can you talk about your strategy for incremental new contract manufacturing potentially or other strategies around managing some of the dynamics around the changing geopolitical environment?

Speaker 1

Well, the contract manufacturing strategy has been very successful for us. We have

Speaker 5

we

Speaker 1

have not spent $1 on the ground for the manufacturing capacity. We also have a lot of flexibility in terms of cell design. Then there is quite a successful strategy so far. Of course, managers' relationship require certain skill. Currently, all our manufacturing facilities are located in China.

Speaker 1

We have three partners. So we offer all battery formats. We have cylindrical, prismatic and pouch. But at the same time this year, just early this year, we also developed a manufacturing partnership in Korea. We are evaluating the sample produced on their production line.

Speaker 1

Next week, next month, we'll go to Europe to have a conversation with another European potential European contracted manufacturers. Those we're doing those for mainly for geopolitics reasons. Now in terms of cost, we have very competitive manufacturing cost structure today. I would say we are not only can compete in U. S, we can compete globally in terms of the manufacturing contracted manufacturing structure cost structure we have here.

Speaker 1

So moving forward, we definitely need to have a global supply chain to support our contracted manufacturing practice. We need to have a global contract and manufacturing partnership. So I think this would happen in first half of the twenty twenty five.

Speaker 4

Excellent. Thank you so much. And then the last one is first for Sandro. Obviously, you supplemented the balance sheet here in the fourth quarter. Can you give us an update on the year to date activity against that ATM?

Speaker 4

You've had a certain amount of volume and some volatility on the stock, which has given you some opportunity. Just want to get a sense of where how much you've been active in the market with that and roughly what you think the cash balance may be exiting the quarter doing that orally with the half part of the quarter here?

Speaker 2

So as of December 31, we went into a traditional blackout period because of our financial results. So we've not been in the market.

Speaker 4

Okay. Okay, perfect. Thank you so much.

Speaker 3

Thank you. Our next question comes from the line of Jeff Schrier with William Blair. Please proceed.

Speaker 6

Hi. You have Mark Schuder on for Jed Dorseyheimer. Congrats on the year and the new 53 customers this quarter. That's great to hear. I guess I'll dig in a little bit deeper on Colin's point, which is I was a bit surprised to hear you're looking to continue to expand and diversify and add more customers to the list.

Speaker 6

Can you walk us through the strategic decision to target many customers with smaller volumes versus fewer customers with larger volumes? Or does it just take this many engagements to land a large PO?

Speaker 1

Mark, most of those customers that we are dealing with, they have a high volume of potential. Otherwise, we wouldn't do it. It, right? If a customer tell us the maximum is 30,000 sales per year, we're not going to deal with that, yes, because every customer we are dealing with, they all claim, okay, they have a large volume potential. Of course, we do our diligence.

Speaker 1

We will see their growth path. We will see their devices, how much battery they need per device. This is a very competitive market. The more customer we can engage, the more opportunity for success. So that's why we have a large pile of customers at this time.

Speaker 1

And during next six months, I think we will filter through, okay, we have to focus on another reason is this market. We have a huge manufacturing capacity to support us. So the capacity is not an issue for us. That's why it enable us to engage with very high volume customers. But focus on high volume customer is our priority.

Speaker 1

There's no doubt about it. That would make manufacturing much easier, Even we engage so many customers, so we don't customize our battery for each customer. So we have 14 SKUs, our catalog. We probably even want to shrink to about 10 SKUs in the future. So because of the performance of our products, most of the customer would like to accommodate our cell format, our standard, I would call, Ampere's standard battery cell format.

Speaker 6

Thanks, Yitong. That's very helpful. Talking about the aerospace and defense customers, I know you have a strategy to include a more geographically diverse production contract manufacturing, you know, career you mentioned in Europe. I'm interested, have any of those customers reluctantly walked away or have not purchased yet because of the China supply?

Speaker 1

Surprisingly none of the customer walked away because of the source of the supply, but we do have a customer ask us to change the manufacturing phase in nine months or six months to nine months or say in 2026, you have to manufacture in so called labor friendly countries.

Speaker 6

Very interesting. Okay. Thank you very much.

Speaker 3

Thank you. Our next question comes from the line of Chip Moore with Roth MKM. Please proceed.

Speaker 5

Hey, everybody. Thanks for taking the question. I want to ask on maybe just an update on commercial side. Obviously, you're having good engagement with new customers. Maybe talk about investments you're making there of the SG and A.

Speaker 5

What's up? Is that somewhere you're investing in? And I guess, what can you do there to maybe help accelerate some of those commercial adoption?

Speaker 2

Yes, Chip, this is Sandra. So we definitely have increased our investment in sales. We've effectively over twenty twenty four tripled the size of our sales team. It's still a small but mighty team. Based on the fact that, as Kang mentioned, this is really a design and win process,

Speaker 4

so

Speaker 2

it just takes time to manage these accounts. G and A separately was up because of some of the non recurring items that you saw and you'll see in the financials.

Speaker 5

Yes, yes. Got it. Appreciate it. And maybe a follow-up on the customer side. I think it was 77% outside U.

Speaker 5

S. Any more color there on how spread that out? Is there concentration within that? Or how do you think about that ship to outside U. S?

Speaker 5

Yes.

Speaker 1

We expect we have more customer offset of The U. S, not because The U. S. Business doesn't grow, just we have more international customers. Once we set up additional manufacturing partnerships, we expect we will have strong customer inquiries outside of The United States.

Speaker 2

Yes. Chip, to clarify, The U. S. Grew, no question. It just grew at a smaller rate.

Speaker 2

And that's what just because of the global interest in the batteries.

Speaker 5

Perfect. Okay. And maybe just the last one. I think you said what you added over $16,000,000 to backlog Q4, you've won some more orders this year. Maybe just any way to help us frame, I guess, where backlog stands at year end and how to think about visibility in twenty twenty five?

Speaker 5

Thanks.

Speaker 2

Yes, I will seal that one. Let's see. We just filed the 10 ks and we report out on our RPO. And RPO, I believe, was $16,000,000 17 million dollars in that range. There's backlog.

Speaker 2

RPO was $15,900,000 at the December. For under excluding government grant revenue and then $17,200,000 including government grant revenue and it's all expected to convert within the next twelve months. But as you know, customers are placing POs quarter by quarter. So that's more indicative of what we have fueling the first half of the year.

Speaker 5

Got you.

Speaker 4

That's what

Speaker 5

I was getting at. Okay. Great. I'll stop there. Thanks.

Speaker 3

Our next question comes from the line of Derek Stoburg with Cantor Fitzgerald.

Speaker 7

I wanted to start with some of your Fortune 500 customers. It sounds like there's significant upside with them. What's it going to take to get maybe a sizable project expansion with those customers? What's kind of the criteria that they're looking for initially? Is that how the batteries perform in the markets?

Speaker 7

Can you just talk about the potential of getting to the next level with those customers? And then I've got a follow-up.

Speaker 1

Okay, Derek. Two engagements we announced. One has about two gigawatt hour purchase possibility. This is related to 6.3 amp hour cell we just delivered. So another one has about 1,000,000 cells per year potential is actually the high end consumer electronics product is not our major focus, but this customer's products at this moment only our technology can support.

Speaker 1

So those are two, we call Fortune 500 technology company engagement that we announced. And in addition to that, we have been engaging with some larger corporation for different projects.

Speaker 7

And, Kang, earlier in the call, you laid out three types of customers. For those Fortune 500 companies and opportunities, where would you kind of which bucket would you put those in?

Speaker 1

Okay. The first one, I call it the electrical vehicle. This has a two gigawatt hour opportunity. They have the vehicle. Their vehicle already set up.

Speaker 1

That's not a problem. But this is the battery has a much higher energy and a much higher power. So I think that the battery evaluation is a major part of this venture. Okay. They don't need to certify their vehicle.

Speaker 1

They need to get our battery qualified. This group of people will come to our contract manufacturing partnership factory in April. So for the second contract, that one is even easier, okay, that's just a simple replacement. And our battery is way qualified, it exceeded their current performance level by a very large margin.

Speaker 7

Got it. That's helpful. And then, Kang, just on that point, the second customer, are they looking to use a battery platform that you're already commercializing today? Or is this kind of a next generation battery platform that they're hoping to use? Can you discuss that at all?

Speaker 1

Yes. The cell chemistry are the same. We already have this battery manufactured since 2018, this cell chemistry. But the cell format is different. This is probably the smallest battery empties ever made.

Speaker 7

Got it. That's super helpful. And then Sandra, just based on some of the visibility that you guys have into demand this year, some large programs expected to hit. How should we think about gross margin sort of going from negative to positive? Can you talk about the gross margin progression for the year as we sort of reach scale here?

Speaker 2

Yes. So we've talked about the fact that Sycor sales are gross margin positive day one. So that's what has helped drive the gross margin to negative 21% in Q4, which is again balancing the historical negative margin that we've had here in Fremont because we've been so capacity constrained and we've got such a tiny manual shop here. So I think we'll continue to see, since most of the growth is going to come from SCICOR, positive movement in the gross margin. Again, SCICOR is growing and we also had cost of goods sold in 2024 for the pre construction and design work for Colorado that's not recurring that wrapped up in October.

Speaker 2

So we should see positive progression on gross margin.

Speaker 7

Got it. Super helpful. Really appreciate it.

Speaker 3

Thank you. Our next question comes from the line of Jeff Grampp with Alliance Global Partners. Please proceed.

Speaker 4

Afternoon. Was curious to go back on the topic of pipeline and future business opportunities. I'm curious, Kang, like on the spectrum of sizes of these various customers you're talking to, how would you contextualize these ones that you've won of size, these kind of $15,000,000, 20 million dollars orders that you guys have been successful with? Where would you say those rank? Is there a way to kind of bookend or think about what an average could be in any sense?

Speaker 4

I know it's probably wide ranging, but just trying to get a sense of how material those wins are in the context of future opportunities you're looking at? Thanks.

Speaker 1

Yes. All those customers have the potential to reach that level. I mean, the $10,000,000 to $15,000,000 even $50,000,000 sales. But in 2025, okay, we don't think they all reach their optimized purchase volume. I think, but we will see the orders at the current level, that means $10,000,000 to $20,000,000 maybe even $30,000,000 order is quite possible.

Speaker 1

Our sales team now the major function of our sales team today is to accelerate the sales, the customer battery qualification process to close the deals. We do everything beyond the sales function to help our customer to get their, to get our battery qualified, to have their products certified. Large fraction of our customer have very decent volume potential. We just need to get those deal closed. Get a deal closed is to help them to quantify our battery as quickly as we can.

Speaker 4

Got it. Okay. That's really helpful. Thanks. And for my follow-up, with respect to looking at diversifying the contract manufacturing base that you have, would you say that's explicitly for, I guess, shall we say trade related contingencies or are there other benefits to being in other jurisdictions or continents from a customer preference perspective or otherwise, are there other factors at Play Dohr?

Speaker 1

Yes. Always good to have diversified manufacturing base here. We have different type of customers locating different region. So even without geopolitics, it's good to have a different manufacturing base. So currently, because the supply chain is almost 100% Asia.

Speaker 1

So that's why the Asia is going to be our major focus in terms of manufacturing facility development. So we not currently we have China. We have the best quality, faster turnaround time and the lowest cost. We certainly have the customer very appreciative we have the facility there. And at the same time, we let serve the customer, have a geopolitics concern.

Speaker 1

So that's why we are working with several Korean battery manufacturers. So of course, we don't use all of them at the end of the day, but we received very positive results. European customer, we have European customer, actually we are dealing with one of the major drone, European drone companies these days. So they would like us to have some participants in Europe in terms of manufacturing.

Speaker 4

Great. It was really helpful details. Thanks for the time.

Speaker 3

Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed.

Speaker 8

Thank you very much. Congratulations on the quarter. My first question for you is looking at your customers. So you have about two thirty five customers, you had 182 new customers just in the year. So, I mean, three quarters of your customer base is new to you relative to the year.

Speaker 8

You commented that you had 25% of your revenue in the fourth quarter come from the LED segment. And so I'm going with this. I'm curious, when you look at the end markets that you've been selling into, what was the mix of those end markets with the 48 or whatever it is, the total amount of customers that you had in 'twenty three, what was the mix with it in 'twenty four? How did it shift? And then when you look at the opportunities in front of you for 'twenty five, how would you see that mix change further in 'twenty five?

Speaker 8

Does that question make sense? That's my first question.

Speaker 1

Makes sense. Yes. So 'twenty three to 'twenty four, we're certainly at light electrical vehicle business. 2023, we didn't have any participation. So the customer come to us, say, they look at our customer, the battery specs, they think it's ideal for their application.

Speaker 1

So we look at the market size is very large, the qualification time, much shorter and the check size is bigger. So we decided to get into that electrical vehicle. 2024 confirmed it was a successful engagement. So 2025, we anticipate that we have more light electrical vehicle business. And of course, the aviation is still growing, but the net electrical vehicle business will getting bigger.

Speaker 8

What was so if I was to think of 2024, in the first quarter was the non existent and the fourth quarter was 25 of revenue. And what I expect that as we go through 'twenty five that the LED segment would potentially be more than 25% of revenue given what we saw in 'twenty four?

Speaker 1

That will happen. Yes, the four two reasons. The reason number one, we have some customer has a larger volume and is early adopters. So they see they don't need to spend a month, a year to qualify. They think our battery is perfect if they can design into the pack and they can use it.

Speaker 1

So there are a lot of those program already reached advanced stage. For that reason, I would think, I would forecast we will have probably over 25% of the electrical vehicle revenues.

Speaker 8

Okay. My second question, when it's not I know it's not really a great metrics, but it's just kind of a thing to look at to kind of see where you how you're progressing in terms of kind of larger orders and shipments, how you're progressing in terms of your customers' products really going commercial. And so if I look at the revenue per customer and I look at the last four quarters, it was $28,000 then it was $60,000 then it was $64,000 then it's $105,000 And so what that tells me is that you are seeing some of these new design wins come to fruition, become production level shipments. When I look at that and I think forward and about '20 and I think about the new customer wins you've had, will I see your revenue become more driven by existing customers and perhaps not see so many new customers in 'twenty five or will I see both? I mean, how would I think about that mix?

Speaker 8

I mean, because in your new customers, you had 48 new customers in 'twenty three, you had 182 in 'twenty four. I mean, is it like is that going to be another 182 new customers? Or will we see that customer new customer growth kind of slow down, but see greater revenue generation from existing customers that are becoming that whose products are becoming commercial? That's my next question.

Speaker 1

Yes. Existing customer will contribute more revenue than the new customer for sure. Because normally, if we engage with the customer, unless the customer already know our battery and they see the spec already feeding into their pack or their application, Most customers come in with a couple hundred sales, couple thousand sales and it becomes, let's say, 25,000, 50 thousand sales, then they go for 100,000 sales. This is the qualification process in this business. If we look into this, the existing customers certainly need to contribute lot more revenue than the new customers.

Speaker 8

But what now would we still see I mean, if we think about your new customer pipeline, I mean, is it so robust that we could still see you add 100 or 200 new customers in 2025? Or are you getting to the point now where it's less about that, like that's going to slow down and it's really about harvesting the customers that you've brought in?

Speaker 1

Yes. We covered very we have very solid coverage of aviation market today. That means fixed wing, electrical aircraft, drones, air taxi, eVTOL type and side to the superflat line. We have very solid coverage here. But there are many emerging companies come out.

Speaker 1

You talk about the drone company, just in Ukraine, over 200 drone companies. Taiwan almost have every new drone companies every other week. So, but we don't we will be more selective in 2025, '20 '20 '4, '20 '20 '3, anybody come to us, we take it, because it is a early stage of market development. Now our coverage is credit solid. Now we know who is going to win, who is not going to win in the near term.

Speaker 1

So we will selectively acquire new customer, but the most important task for Ampere is the push the current customer to commercialization stage.

Speaker 8

Sort of following on to the thing with new customers, the 182 customers, new customers that you had in 'twenty four, I mean, it was such a substantial ramp. The Scicor came out in that period of time. Can you give some sort of sense in terms of those new customers? What's the mix between Cymax and Sycor?

Speaker 1

Primarily, I would say 90% for Sycor, because Sycor is readily available. We have capacity to support. When customer comes to us, they are not only looking for the performance, particularly those sizable customers. They want to see how the manufacturing capacity to support, otherwise they wouldn't engage. So for Sycor, we developed a huge manufacturing capacity available with 1.8 gigawatt hour capacity.

Speaker 1

So the customer feel very comfortable to engage you with us.

Speaker 8

My last question, and I'm sorry to ask so many, and it's really just a nitpicky one. Just kind of looking at my model at a gap, and I'm curious like at the end of you ended 2024 with two thirty five customers. What was the customer count at the end of fiscal 'twenty three?

Speaker 2

You know what, Ted, let me pull that from our filings and I'll send that over to you.

Speaker 8

Okay. That's it for me. Sorry to be such a pain. And again, congratulations on the quarter. I look forward to 2025 and beyond.

Speaker 1

Thank you. Thanks.

Speaker 3

Thank you. Our next question comes from the line of Amit Douth with H. C. Wainwright. Please proceed.

Speaker 9

Thank you. Good afternoon, guys. With respect to the revenue cadence for 2025, can you provide any color on whether we should expect sequential improvements full 2025 relative to what the fourth quarter results make?

Speaker 2

Yes. So I think we would expect to see sequential. We're not a seasonal business per se. But I think the first quarter has been has just had some headwinds. There's been a lot of changes as far as the funding landscape.

Speaker 2

So we're confident in what the year growth has the potential to be. But we're expecting Q1 is going to be a little tougher just because of the change in the administration here.

Speaker 9

Understood. And I'll follow-up with that. I'll let you offline. Gross margins, Sandra, is there a level that you have a sense revenue wise where you think you can start turning gross margin positive? Is it like $15,000,000 to $20,000,000 or higher than that per quarter where you can start seeing gross margins turn positive?

Speaker 2

We haven't given guidance on that yet. I think we're still we're working on a target model and

Speaker 6

but

Speaker 2

we don't have anything concrete today.

Speaker 9

Okay. And maybe for Ken, with respect to sort of larger applications like eVTOLs, etcetera, how different is the sort of the battery chemistry or technology relative to what you are already shipping to customers currently? And how much improvements need to be made to sort of win some of those types of orders?

Speaker 1

Yes. For YiwiTel, we already qualified for one customer application. So our chemistry is very robust. I would say we don't need to charge a whole lot of chemistry to support this market. When we say aviation, we basically use the same cell chemistry with slightly adjustments for example, customer want to have more energy, they want to have more power.

Speaker 1

We can make some changes to satisfy them. There is no major invention involved because of the platform is quite robust. When you look at the battery we delivered, three seventy watt hour per kilo with 10C, 15C capability. So with that as the baseline, we almost can deliver the sales for all applications in this market segment.

Speaker 9

Understood. Okay. Yes, that's all I have. Other questions have been asked. I'll follow-up with you guys offline.

Speaker 9

Thank you.

Speaker 3

Thank you. At this time, this concludes our question and answer session. If you have any additional questions, you may contact us at the wacoastolum's team at ir. Anthrax dot com. I'd now like to turn the call back over to Doctor.

Speaker 3

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 newly revamped website. I hope you can check it out and we look forward to updating 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 fourth quarter and full year twenty twenty four earnings conference call. You may now

Powered by Quartr
Earnings Conference Call
Amprius Technologies Q4 2024
00:00 / 00:00