Good afternoon. Welcome to the Amprius Technologies First Quarter 2025 Earnings Call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, and CFO, Sandra Wallach. At this time, all participants are in listen-only mode. 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 Technologies to expand its manufacturing capacity, scale business, and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amprius Technologies' 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 Amprius Technologies' 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.amprius.com. 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'll now turn the call over to Amprius Technologies CEO, Dr. Kang Sun, for his comments. Sir, please proceed.

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our Q1 performance and our recent accomplishments while also highlighting milestones we look forward to achieving soon. After that, our CFO, Sandra 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 Amprius Technologies to those who may be new to our company. Amprius Technologies is a pioneer and the leader in the silicon anode battery space. With over a decade of development experience and a long track record of commercial shipments and customer achievements, at Amprius Technologies, we develop, manufacture, and market high energy density and high power density silicon anode batteries with applications across all segments of electrical mobility, including aviation, electric vehicles, and the light electric vehicle industries. Today, Amprius Technologies has the most complete portfolio of silicon anode material systems in the industry and commands performance leadership with its combination of battery energy density, power density, charging time, operating temperature, and safety. Across our battery portfolio, we believe that we offer unmatched performance among commercially available batteries. Amprius Technologies has been delivering commercial batteries to the market with up to 450 watt-hours per kilogram and 1150 watt-hours per liter, 10C power capability, extreme fast charge rate of 0 to 80% state of charge in approximately six minutes, the ability to operate in a wider temperature range of minus 30 degrees Celsius up to 55 degrees Celsius, and safety design features that enable us to pass the United States military's benchmark nail penetration test. Each of these performance parameters is critically important to real-world electrical mobility applications. Not only do our…

Manufacturing capability.

That enables us to fulfill both our backlog and new orders. The availability of a large-scale manufacturing facility also helps us to attract the volume of customers with competing production costs. In addition to the capacity available to us with our Cycle product through our partners, we have completed our hardware retrofit at our Fremont facility for our CEMEX product. We are now focused on optimizing the manufacturing process to support our customers that require the 500 watt-hour per kilogram CEMEX product today. This includes our long-time customer Airbus and our partner AeroVironment for the X time prime US army grant program. Specifically, in the current quarter, we enter Q2 with significant operating momentum, having introduced new products with breakthrough performance, the 450 watt-hour per kilogram Cycle cell. Since we built our Cycle platform, we have been actively working to increase our portfolio's performance. The 450 watt-hour per kilogram cell is a testament to the research and development work we have done to maximize energy density. Offering 400 watt-hours per kilogram and 900 watt-hours per liter, this new cell delivers up to 80% more energy than conventional DCMI battery cells using graphite anode, making it an ideal cell for aviation and electrical mobility applications. We believe that this new product, combined with the products that are already in volume production, will be the growth engine of our revenue in 2025. Amprius Technologies has several layers of defense for trade conflicts and tariffs. First, we believe that we deliver the highest performing cells on the market today at a competitive cost. For many of our customers, it's not a question of choosing us over a competitor. We are the only solution on the market that can meet their technical and economic needs. Second, over 80% of our revenue last quarter was…

Thank you, Kang. 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 ended the first quarter with $11.3 million in total revenue. As we have previously discussed, our total revenue is a combination of our main revenue streams, product revenue as well as development services and grant revenue. This quarter, $11 million came from our product revenue, representing a $700,000 or 6% increase sequentially. Product revenue in Q1 2024 was just $2.3 million, marking a 370% or $8.6 million year-over-year increase. Our development services and grant revenue totaled $300,000 this quarter, which was consistent with $300,000 in Q4 2024 and up from zero year-over-year. As we've discussed in the past, development services and grant revenue from large development programs are nonrecurring 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. As Kang mentioned, we shipped to 102 customers in the first quarter. Of these customers, only three accounted for greater than 10% of revenue, consistent with three customers in both the first and the fourth quarters of 2024. 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. Now moving to our profitability metrics. Gross margin was negative 21% for the quarter, compared to negative 21% in Q4 2024 and negative 190% in the prior year period. 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 preconstruction planning costs related to the Colorado facility, which were completed…

Thanks, Sandra. As we look ahead, our strategy at Amprius Technologies remains unchanged. The company is focusing on technology innovation, new product introduction, quality manufacturing, customer engagement, and revenue growth. We realize that our success depends on our ability to execute our vision. We expect to release new batteries on our product roadmap that will further our lead in the battery space. This includes new products from our Cycle platform and the commercial availability of the CEMEX 500 watt-hour per kilogram product. We will continue to build our book of customers with 235 customers in 2024 and an additional 46 new customers in the first quarter. We are excited about the opportunity in front of us. We expect to convert this engagement into customer purchase orders as quickly as we can. We are strengthening and expanding our manufacturing capability and capacities to better align geographically with our customers worldwide. We believe the opportunity ahead of us is tremendous. We believe we are well-positioned for continued success with our industry-leading silicon anode batteries, backed by gigawatt-hour scale manufacturing capabilities through our capital-light contract manufacturing network. Our extended customer engagement is evident in the hundreds of customers we shipped to in 2024, including both new business and repeat orders from our market customers. From a financial perspective, we are in excellent shape with adequate cash reserves, a low burn rate, no debt, and our existing at-the-market sales agreement provides additional flexibility. These core pillars will help us continue to support a strong and growing business throughout the rest of the year and beyond. Over the next few months, we'll be attending several industrial and financial conferences. We hope to see you there. Thank you for your continued support of Amprius Technologies. With that, I will turn it back to the operator for Q&A.

Thank you. We'll now be conducting a question and answer session. Our first question comes from Colin Rusch with Oppenheimer. Please proceed with your question.

Thank you so much, guys. The order number in the quarter is pretty impressive. To have a three-to-one book-to-bill and having the relatively high volume of incremental customers that you guys are talking about here for several quarters. I'm curious about how that testing activity is going with those customers and how quickly that might translate into incremental orders here for you guys as you get to the balance of the year?

Sure, Colin. The customer contracts that you have mentioned, I believe we had three allowance customer contracts. In addition to two development contracts, those contracts would be complete before the end of the year. Some contracts would be completed in Q2.

Excellent. And then, as you guys think about the diversity of those customers, how important is it to have some non-China manufacturing for the Cycle product line? Is that something that we could see get ramped up here in 2025? Or is that something that's a little bit longer-term project for you guys?

Yeah. We'll be in 2025. Very soon, you will learn from us. We have additional contract manufacturing facilities outside of China.

Excellent. And just a final one for me, as you think about scaling the organization, you've gotten an awful lot of leverage out of existing OpEx. I'm just curious, with Tom coming on and increasing sales activity, what other augmentation are you going to need to do in terms of team growth to support some of the trajectory that looks like it's possible here for the company?

Yeah. Colin, three areas. First one is R&D because this is the foundation of our business. You can see that Amprius Technologies is a visible leader in this industry. So that's where we will strengthen our R&D capabilities. Second part is contract manufacturing. Manufacturing capability. You know, we will have a stronger team build-up to manage those contract manufacturer partnerships. Third one is sales. Every quarter you will see our sales team is expanding.

Excellent. Thanks so much, guys.

Thank you. And our next question comes from Mark Shooter with William Blair. Please proceed with your question.

Hi, Tom. You have Mark Shooter on for Jed Dorsheimer. 83% of revenue is outside of the US, so that's very helpful given the tariff situation. How do you see this progressing through the year? And has the tariff situation changed your strategy on who are the new customers that you're going to be sampling with of the new 43? Will that change anything going forward throughout the year?

First, Mark, the tariff is not our primary concern because we have a very competitive cost base. So in addition, we have global reach to our customers. So we don't see a dramatic increase in our domestic customer base.

Okay. That's very helpful. Thank you. And congrats on the success of the Cycle product. Speaking to that, have you seen any competitive products from the giants in China, like CATL or BYD? Considering you're manufacturing in their backyard and if they have access to similar advanced silica materials or without giving away the features, what does Amprius Technologies have that these big competitors are missing that puts your performance so far ahead?

Mark, I think the major difference is the market participation. All those large incumbents in manufacturing companies focus on the EV segment and the consumer electronics segment at this moment. So their cell chemistry, their cell design are quite different from Amprius Technologies. Now Amprius Technologies today has the most complete silicon anode technology portfolio. We have silicon monoxide, silicon carbon, silicon nanowire, you name it. We're even working on more advanced silicon anode today. So I think the market will focus on not the market concentration of those incumbents. That's the number one. Number two, we do have a very unique cell chemistry. I don't mean they cannot develop it someday, but at this moment, we're certainly in the leading position.

That's very helpful. Thank you.

Thank you. And our next question comes from Chip Moore with ROTHMKM. Please proceed with your question.

Thanks for taking the question. Hey, everybody. Maybe just follow-up on that last one, just more technical. Can you talk about if you're incorporating blending any third-party silicon anode materials into some of the newer products and any vendors you might be using?

Yeah. We discussed earlier. We use the Freselius silicon anode as one of our components in our cell chemistry. We have explored and tested other people's silicon material, but our primary source still comes from Pavilion.

Got you. Thanks, Kang. And maybe just an update on contract manufacturing partners ex-China. I know you've been making the rounds in, I think, Korea and Europe. Just any update there? How to think about timelines?

Yeah. Timeline, very soon. We will have contract manufacturer partners outside of China.

Okay. Well, stay tuned. Thanks, Kang.

And our next question comes from Amit Dayal with H.C. Wainwright. Please proceed with your question.

Thank you. Good afternoon, everyone. Thank you for taking my questions. With respect to the backlog, it grew nicely in the first quarter. Does this set you up for sequential revenue improvements through 2025?

I would expect so. You know, we have a very strong pipeline, and as you see, our customer qualifications, some of those have reached the advanced stage. So we anticipate revenue growth.

Understood. Thank you. And then, with respect to some of the new offerings you are planning on launching over the next few quarters, what is the risk of maybe some cannibalization taking place with the existing offerings we already have in the market?

Yes. Of course. Yeah. So we always think that we need to kill our older technologies and ourselves instead of others. Alright. So this is a big progress we have made in the last few months to deliver new cell chemistry and new performance batteries. So it's going to have some influence on our existing product, but that's what a customer likes to see. That's going to enlarge the gap between us and the competition.

The reason I was asking that, Kang, is because maybe the batteries need to be designed in. So as you keep launching some of these new offerings and the customers might prefer these new offerings, then do you need to start that process all over again to be designed into those offerings?

Oh, that's not a thing that happened because of that. Those new products are aimed at new applications or upgrading their device performance. They're not going to use your product to put in the older device to start over again. No.

Understood. Yeah. That's alright. I'll follow-up offline. Thank you so much.

Thank you. Our next question comes from Derek Soderberg with Cantor Fitzgerald. Please proceed with your question.

Yes. Hey, Kang and Sandra. Thanks for taking the questions. Sandra, I think you said last quarter that backlog was $16 million or $17 million. It looks like you shipped $11 million in product this quarter, then you added $34.5 million to backlog. Does that mean backlog today is roughly $40 million? Am I thinking about that right?

Let's see. Let me get you the number because we just filed the queue. The remaining performance obligations are $37.8 million, including government grant.

Perfect. No. That's helpful. Just wanted to clarify. And then a couple more. On the Fortune 500 company testing the 21,700 cylindrical, so you're delivering samples to that customer for a light electric vehicle. Can you sort of share with us the expected timeline to sign a large purchase order with that customer? How long is the qualification process? Can you provide some color on that timeline?

So, this is a leading supplier in this industry. So we anticipate the volume orders will come in sometime in the later part of 2026.

Got it. That's helpful. And then Sandra, back to you. As you're releasing new battery platforms, the technology continues to improve. Sandra, I think the Cycle gross margin is sort of in the low teens roughly. Where do you see margins heading towards as you commercialize some of these higher-tech cells, such as the 21,700, which I believe is the Cycle platform? Can you sort of talk about the mix shift, how that's going to help margin, and how much you think pricing can help margin?

That's a great question. So we've shared that the Cycle product has been gross margin and cash flow positive from day one. And that's how we've made the step function improvement in gross margins. We're still running a very small footprint for CEMEX. Our growth engine in the near term is going to be Cycle. And that's just going to continue to drive gross margins to be more positive over time.

And is that 21,700, is that the Cycle platform?

Yes. Yep.

Okay. Got it. And then, Sandra, just I think you commented on some of the side investments on the scale-up, and then it looks like the designs are complete for the Colorado facility. What sort of growth CapEx do you have planned for the remainder of the year?

Very little. We're pivoting into really just run the business mode.

Got it. So normal replacements and maintenance.

Yep.

Perfect. Really appreciate it. Thanks.

Thank you. And that's that. No further questions at this time. I would like to turn the floor back to Dr. Kang Sun for closing remarks.

Thanks again, everyone, for joining us today. As a reminder, you can find out more about our company, receive additional updates, and learn about the upcoming events from the investor relations section of our website. 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 shareholders for their continued support.

Alright. Thank you. And with that, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.