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Date
Thursday, Aug. 7, 2025 at 9:00 p.m. ET
Call participants
Chief Executive Officer — Kang Sun
President — Tom Stepien
Chief Financial Officer — Sandra Wallach
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Takeaways
Revenue-- $15.1 million total revenue for the second quarter of 2025, a 34% sequential increase and 350% year-over-year growth from the second quarter of 2024, with $14.5 million from product sales and $0.5 million from development services and grant revenue (component figures do not sum to total due to rounding and other revenue sources).
Gross margin-- Gross margin (GAAP) was positive 9% for the second quarter of 2025, up from negative 195% in the second quarter of 2024, reflecting SiCore’s contribution and the company’s first positive gross margin.
SiCore shipments-- Over 450% increase in SiCore shipments in the second quarter of 2025 compared to the second quarter of 2024, now the primary revenue growth driver.
Customer base-- Batteries shipped to 93 customers in the second quarter, 43 of whom are new; only two customers contributed more than 10% each of revenue, versus three in both the first quarter of 2025 and the second quarter of 2024.
Geographic revenue breakdown-- 86% of revenue was shipped outside the United States in the second quarter of 2025, up from 60% in the second quarter of 2024.
Sector mix-- Over 90% of revenue was derived from the aviation sector, mainly drones, with the balance primarily from the light electric vehicle market.
Operating expenses-- $8.2 million in operating expenses for the second quarter of 2025, a 12% sequential and 27% year-over-year increase due to higher investments in sales and R&D reclassification.
Net loss-- GAAP net loss of $6.4 million for the second quarter of 2025, or negative $0.05 per share (GAAP), narrowing from both the prior quarter and year.
Cash position-- $54.2 million in cash as of June 30, 2025, and no debt, with $10.8 million cash inflow from financing activities and $46.7 million remaining on the at-market facility as of June 30, 2025.
Manufacturing capacity-- Over 1.8 gigawatt-hours accessible across contract manufacturing partners as of the second quarter of 2025, including a newly ramping facility in South Korea and ongoing pilot line expansion in Fremont, California.
Backlog-- $29.1 million in remaining performance obligations as of the second quarter of 2025, up 57% year-over-year but lower sequentially due to a large first quarter 2025 drone OEM order.
US government contract-- Awarded $10.5 million from the Defense Innovation Unit in July 2025 for expanding electrode manufacturing in Fremont; contract will cover more than 50% of the build-out and focus on NDAA-compliant battery supply.
Share count-- 125.1 million shares outstanding as of June 30, 2025, up 4.5 million from the prior quarter, driven by option exercises, RSU vesting, and ATM issuance.
Employment-- 97 full-time employees at quarter-end, up slightly from the prior quarter.
Summary
Amprius Technologies(AMPX -2.34%) reported significant revenue growth in the second quarter of 2025, achieving its first positive gross margin, primarily due to expanding SiCore shipments and a more diversified customer base, including a substantial increase in international sales. Management emphasized progress in piloting high-density batteries for aviation and defense, leveraging expanded manufacturing in South Korea and Fremont, as well as a new U.S. government contract to diversify supply and address defense-compliant markets. Customer engagement momentum was reinforced by onboarding 43 new accounts, ongoing sector tailwinds in drones and light electric vehicles, and increased capacity flexibility with global manufacturing partners.
Stepien said, "SA102 is produced on our California pilot line and is already winning strong customer praise for the significant endurance boost it gives mission-critical unmanned, autonomous vehicles."
Wallach disclosed that customer concentration has lessened, stating only two customers represented more than 10% of revenues, compared to three in the second quarter of 2024 and the first quarter of 2025.
Sun explained, "Q2 is the demonstration of transformation from the qualification stage to the revenue stage," indicating multiple previously qualified customers have begun or will soon begin purchasing in volume.
Amprius Technologies expanded its U.S. pilot line capabilities by adding electrode manufacturing with support from government funding, prioritizing NDAA compliance.
Management confirmed active efforts to source contract manufacturing partners in Korea, China, and the United States to further enhance supply chain and geographic flexibility.
The company reported its contract manufacturing network can support more than $1 billion in annual revenue at current gigawatt-hour allocations.
Industry glossary
SiCore: Amprius Technologies' proprietary silicon anode cell platform, designed for high energy density and used as a performance driver in aviation and mobility applications.
NDAA-compliant: Refers to products manufactured in accordance with the National Defense Authorization Act, barring the use of certain foreign materials and supply chains for U.S. defense-related procurement.
ATM program: At-the-market equity offering program, enabling the company to sell shares directly into the open market for flexible capital raising.
Full Conference Call Transcript
Kang Sun: Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our business and then our President, Tom Stepien, will recap our Q2 performance and our recent accomplishments. 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. For those who may be new to our company, I would like to briefly introduce Amprius Technologies, Inc. Amprius Technologies, Inc. is a pioneer and a leader in the silicon anode battery space.
With decades of development experience and a long track record of commercial shipments and customer achievements, at Amprius Technologies, Inc., 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 and the electrical vehicle industry. Today, Amprius Technologies, Inc. has the most complete commercially available portfolio of silicon anode material systems in the industry and commands performance leadership with the combination of battery energy density, power density, charging time, operating temperature range, and safety. Across our battery portfolio, we believe that we offer unmatched performance among commercially available batteries.
Amprius Technologies, Inc. has been delivering commercial batteries to the market with up to 450 watt-hours per kilogram and 1150 watt-hours per liter, 2C power capability, and extreme fast charge rates of 0 to 80% state of charge in approximately six minutes. The ability to operate in a wide 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 benchmark and nail penetration test. Each of these performance parameters is critically important to real-world electrical mobility applications. Not only do our batteries empower certain tools, satellites, and vehicles to maximize performance, but they also enable our customers to achieve their economic targets as well.
In addition, Amprius Technologies, Inc. has developed a 500 watt-hour per kilogram and 1,300 watt-hour per liter battery platform that has been validated by an independent third party. It's our belief that there are no other commercial batteries on the market that can perform at these levels today. In the second quarter, Amprius Technologies, Inc. continued to demonstrate technological innovation and drive business growth. We believe we are successfully executing on our strategy to transform electrical mobility with our game-changing performance. With that overview complete, I will now turn the call over to our President, Tom Stepien, to recap the highlights from our record quarter. Thank you, Kang.
Tom Stepien: In the second quarter, we built on our momentum from the start of the year and we believe we have improved in all key business areas. Specifically, we released compelling new products, engaged with additional customers, and continued to expand our operations. Let's start with product updates. Innovative technologies and breakthrough product performance are the foundations of Amprius Technologies, Inc.'s business. Since debuting our SiCore product platform in January 2024, we have relentlessly pushed the limits of lithium-ion performance. This April, we introduced SA102, the first SiCore cell to reach 450 watt-hours per kilogram, a record-setting energy density 73% higher than the typical 260 watt-hours per kilogram of conventional batteries used in electric vehicles and power tools.
Built around a high-capacity silicon anode, this is where the SA prefix comes from, and about the size of a standard tea bag, SA102 is produced on our California pilot line and is already winning strong customer praise for the significant endurance boost it gives mission-critical unmanned, autonomous vehicles commonly referred to as drones. With global drone demand accelerating, SA102 cements Amprius Technologies, Inc.'s position at the forefront of this market. In order to deliver SiCore samples to our customers quickly and expedite their qualification process, we've expanded production at our pilot line in Fremont, California. As prospective customers move through the qualification process and request high-volume orders, we then deliver to our existing contract manufacturing partners.
So far in 2025, we have shipped cells to several industry-leading global drone companies. In May, we announced that Alto, a subsidiary of Airbus, set a new record for their loitering drone, which flew for sixty-seven days without interruption. Alto's Zephyr is a solar-powered loitering vehicle that operates around 70,000 feet, approximately twice the altitude of commercial airplanes. During daylight, solar powers the motors and channels surplus energy to charge Amprius Technologies, Inc.'s cells. At night, Zephyr draws stored energy to remain aloft. Our high-capacity silicon anode batteries deliver dependable overnight power, enabling continuous flight for more than two months and standing as a critical pillar of the mission's success.
During Q2, we've added dozens of new customers. We recently announced that Amprius Technologies, Inc. was selected by Amazon to participate in their inaugural cohort as a part of the Amazon Device Climate Tech Accelerator. This program supports companies developing technologies that could help reduce the carbon footprint of Amazon's devices and operations. This is a recent development, and this selection provides us with a valuable opportunity to engage with Amazon's technical and sustainability teams that work on millions of devices worldwide. We are excited about the opportunity to explore how our cells could provide more efficient energy solutions in their industrial, consumer electronics, and mobility-focused platforms.
In Q2, we shipped batteries to 93 customers, 43 of whom are new to the Amprius Technologies, Inc. platform. The remaining 50 are repeat customers, including several of our longtime strategic partners such as Alto Airbus, BAE Systems, and the US Army. Thanks to our breakthrough energy performance and the ample production capability, we attracted new customers and generated $26.4 million in revenue during the 2024 total of $24.2 million. Q2 revenue totaled $15.1 million, a 34% increase from the first quarter and up 350% from Q2 2024. This strong growth was primarily driven by a greater than 450% increase in SiCore shipments over Q2 2024.
SiCore is a proprietary silicon anode that uses standard lithium-ion processing equipment and is gross margin positive, enabling us to report positive gross margin for the first time. Sandra will provide more context here when she reviews our financial highlights next.
In Q2, we diversified our customer base. 86% of our revenue came from outside The United States on a ship-to basis, an increase from 60% in Q2 2024. Customer diversification helped enable steady growth in a generally uncertain domestic and international macroeconomic environment. In Q2, over 90% of our revenue came from the aviation sector, driven by an increase and ongoing strength in the drone market. We are enjoying increased market adoption and a more favorable policy stance from the US government that creates new opportunities for innovation and deployment.
The remainder of our Q2 revenue was primarily derived from the light electric vehicle sector, which remains healthy but has a lumpier profile due to our customers' varying product introduction cycles. The LEV market tends to have short design-in cycles, and we believe our drop-in replacement batteries can help us succeed in gaining market share in this growing market. To support customer demand, we are seeing in our core markets, we have continued to work closely with our current contract manufacturers. We are also opportunistically sourcing additional partners to provide us with greater geographic diversification and operating flexibility. In May, we announced a contract manufacturing agreement with a leading battery manufacturer in South Korea.
This new partnership expands our physical manufacturing footprint and allows us to serve additional customers with specific geographic supply chain requirements. The facility is currently ramping up and is expected to produce Amprius Technologies, Inc. cells shortly. We are off to a rapid start in Q3. As we announced in July, we initiated shipping cells to customers from our Fremont, California pilot line for testing. So far, five customers have received the new SiCore cells. Our pilot line allows us to rapidly develop and prototype new batteries quickly and to deliver them to key strategic customers who have specific design requirements.
We are seeing an increase in demand for drone technologies following the June 2025 US executive order promoting domestic drone manufacturing and the July Department of Defense directive prioritizing US-made drones for procurement. US Secretary of Defense, Hagsef, wrote that small drones "resemble munitions more than high-end airplanes. They should be cheap, rapidly replaceable, and categorized as consumables." We expect these policy actions will accelerate adoption timelines and open new opportunities across both the defense and commercial sectors. Amprius Technologies, Inc. has operated in this sector for seven years, and we believe we enjoy a first-mover advantage. Here is one specific example. AV, formerly known as AeroVironment, is a designer and manufacturer of small drones used by the US military.
This quarter, we delivered sample cells as part of the X TAC Prime US Army grant program. These cells extended state-of-the-art performance, clocking in with an average energy density of 517 watt-hours per kilogram. Higher energy density delivers tremendous customer value, notably longer flight time, and/or additional payloads. In summary, 2025 has been strong and now our focus is on maintaining that momentum through consistent execution in the second half. I'll now turn over the call to our CFO, Sandra Wallach, to review our financial results.
Sandra Wallach: Thank you, Tom. 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. As previously noted, we ended the second quarter with $15.1 million in total revenue. Our total revenue is a combination of our main revenue streams, product revenue as well as development services and grant revenue. This quarter, product revenue contributed $14.5 million to total revenue, representing a $3.6 million or a 32% increase sequentially. Product revenue in Q2 2024 was $33 million, so Q2 2025 marks a 335% or $11.2 million year-over-year increase.
Our development services and grant revenue totaled $500,000 this quarter, representing a $200,000 increase sequentially 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 Tom mentioned, we shipped to 93 customers in the second quarter. Of these, only two individually accounted for greater than 10% of the revenue in Q2, a decrease from three customers that individually accounted for greater than 10% of revenue in both 2025 and 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. Our total for remaining performance obligations was $29.1 million at the end of 2025, up 57% from the same quarter last year and down sequentially as Q1 2025 included a $15 million purchase order from a drone OEM.
Now moving to our profitability metrics. Gross margin was positive 9% for the quarter compared to 21% in 2025 and negative 195% in the prior year quarter. As a reminder, we will continue to experience a degree of gross margin variation as our product and services revenue mix fluctuates going forward. Now on to our operating expense management. Our operating expenses for the second quarter continued to be lean at $8.2 million, an increase of $800,000 or 12% compared with Q1 2025 and an increase of $1.8 million or 27% from the prior year period.
The sequential and year-over-year increase in OpEx was driven by increased investment in sales and the reallocation of R&D from cost of revenue as development services agreements run off. Our GAAP net loss for the second quarter was $6.4 million or negative $0.05 per share, with 121.8 million weighted average number of shares outstanding. In Q1 2025, our net loss was $9.4 million or negative $0.08 per share with 118 million weighted average number of shares outstanding. Our Q2 2024 net loss was $12.5 million or negative $0.13 per share with 97 million weighted average number of shares outstanding.
As of 06/30/2025, there were 97 full-time employees, up from 95 at the end of the first quarter, primarily based in our Fremont, California location. Our share-based compensation for the second quarter was $1.9 million, relatively flat with Q1 2025 and the prior year period. As of June 30, we had 125.1 million shares outstanding, which was up 4.5 million from the prior quarter. The change includes approximately 1.3 million shares issued from option exercises and RSU vesting as well as 3.2 million shares issued under our ATM program. Now turning to the balance sheet, we exited the second quarter with $54.2 million in cash and no debt.
Key drivers for cash in the quarter included $4.3 million used in operating cash flow, which was lower than our average projected run rate of approximately $2.5 million to $3 million monthly, excluding transaction-related costs. The main cause of variation this quarter is related to the improvement in our net loss. $700,000 used in investing activities related to our Fremont, California facility. We also had $10.8 million in cash inflow from financing activities, consisting of $9.8 million from the issuance of common stock under our at-market sales agreement and $1 million of proceeds from option exercises. We still have approximately $46.7 million left on the facility, as of 06/30/2025.
Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius Technologies, Inc. forward. Before I turn the call back over to Kang, I would like to take a moment to discuss our CapEx outlook for the remainder of 2025. We have made the decision to strategically invest in diversifying our supply chain and expanding manufacturing capability within our Fremont facility to include electrode manufacturing. We're doing this in collaboration with the US government defense innovation unit and have secured a contract for $10.5 million awarded in July 2025. As we previously stated regarding the Colorado facility, the designs for this project are effectively complete.
And we are continuing to monitor the larger industry dynamics associated with building a factory in The United States. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations, including the timing and availability of funding, will influence our decision on the next steps and timing. We have secured adequate capacity for the foreseeable future through our contract manufacturing network and plan to further expand that without deploying additional capital. That concludes my financial discussion, and I will now pass the call back to Kang. Thanks, Sandra.
Kang Sun: As we look ahead, our strategy and focus remain unchanged. Amprius Technologies, Inc. is committed to delivering the next generation of lithium-ion batteries today. We believe our technology is already raising the bar in real-world applications by providing unmatched performance and solving meaningful problems for our customers. We are continuing to execute against our product roadmap with new innovations that extend our lead in the battery space while building global manufacturing scale to meet the significant and growing demand. Through a capitalized contract manufacturing model, we have access to over 1.8 gigawatt-hours of capacity, positioning us to fulfill more customer demand that we expect to generate this year. We continue to see strong momentum in customer engagement.
Our priority remains moving more of those engagements from evaluation to full platform integration and format production. With hundreds of customer shipments over the past six quarters, both new and repeat business, we believe we are building a powerful base of long-term relationships. Tom Stepien, who joined as our President in May, has proven to be an exceptional addition to supercharging our customer engagement. His leadership will accelerate our go-to-market efforts and drive deeper penetration with the faster-moving markets we serve. Looking ahead, we believe Amprius Technologies, Inc. is well-positioned for sustainable growth and long-term success, supported by core pillars. First, our industry-leading technology and product. Our silicon anode batteries outperform traditional lithium-ion battery solutions in real-world applications.
Second, our gigawatt-scale manufacturing capability through a capital-efficient contract manufacturing model allows us to scale quickly. Third, we benefit from extensive customer engagement, including both new and repeat business from our partners. And fourth, we maintain strong financial health. We have dedicated cash reserves, a low burn rate, no debt, and added flexibility through our aftermarket sales agreement. We are excited about the future ahead and invite you to meet with us as we attend several upcoming investor conferences. We'll be participating in events hosted by Oppenheimer, Needham, Gateway, and H.C. Wainwright over the next few weeks. Thank you for your continued interest and support of Amprius Technologies, Inc.
With that, I will turn it back to the operator for questions. Thank you.
Operator: At this time, we'll open the line for questions from the company's publishing research analysts. The company requests that each participant limit their comments to one question and one follow-up. Now for our first question, which will come from the line of Colin Rusch with Oppenheimer. Please proceed with your question.
Colin Rusch: Thanks so much, guys. Obviously, you've been qualifying with a large number of customers here over the last six quarters, as you mentioned, Kang. And certainly, talking about a twelve to twenty-four month process for qualification suggests that you're reaching, you know, near closure with a number of customers to start moving into production. Can you just talk about that process? And how we should think about revenue inflection and your ability to support those customers as they move into production volumes?
Kang Sun: Yeah. Let me give you a high-level report again. I'm probably getting certain deals. We have, as you see, we have built a huge customer pipeline. We have various customers at different development stages. So Q2 is the demonstration of transformation from the qualification stage to the revenue stage. Yeah. Q3, we anticipate that we have more customers or transactions that will move from the qualification stage to the revenue processing order stage. I mean, Tom can give us some even more detail to Colin.
Tom Stepien: Yeah, Colin. Thanks for the questions. We have, as we say, 320-somewhat customers. What we're really focused on is going deeper. We just describe these as different layers. There are some companies we've been working with where we are seeing tens of thousands of batteries in any given order. There are others that are earlier. That's part of why we invested and are building out the pipeline here to continue that. And as Kang mentioned, there's an ongoing and growing process here. But that's how we think about winning the designs and then helping our customers achieve success, which can only help us.
Colin Rusch: Thanks so much, guys. And then, you know, Sandra, on the side, you have a pretty impressive shift into your gross margins here in the quarter. Curious how you guys are thinking about your cash needs, and the potential for gross margin expansion from here as scale revenue?
Sandra Wallach: Colin, so as we've mentioned, SiCore has been gross margin positive since day one. And since that is the driver of the revenue growth, we expect that we're going to continue to see over time favorable movement in our gross margins to continue to get more positive. It may be a little bit lumpy. There are some, you know, we're still too small to say we're at a steady state for sure. But the growth is primarily coming from SiCore, and that's all greater than the average gross margin. So we should continue to see that grow.
Regarding the cash, again, with the $54 million of cash, no debt, and $47 million left on the at-market sales agreement, we're still in the $7.5 million to $9 million of operating cash burn a quarter, and so I think we've got a nice long runway.
Colin Rusch: Great. Thanks so much, you guys.
Operator: Our next question comes from the line of Mark Schuster with William Blair. Please proceed with your question.
Mark Schuster: Hi, team. Congrats on another strong quarter. You mentioned in the shareholder letter a pickup in the drone customer engagement. Could you give us some more color on the nature of those conversations, how they're accelerating? And could you also frame the opportunity for us maybe in a dollar content of batteries per drone or maybe market size?
Tom Stepien: Yeah. Maybe I can start that out. This is Tom. So, Mark, thanks for the question. So, we serve loitering drones, group one, group two, and a little bit of group three drones. There's a taxonomy. Those smaller drones tend to be battery-operated. Group four and group five tend to be the larger engines as opposed to motors. And we did talk in the call, as you heard, about the enabling of tremendous value with Alto by being able to stay aloft for sixty-seven days. So our batteries are incredible force multipliers. Every extra minute in the sky increases target engagement chances. It reduces logistical churn. It helps on the military side.
Commanders hold more terrain view, longer terrain view, and reduces cost. It's not just the military. Right? We have industrial and inspection. Think about saving a lineman's dangerous climb up to look at power lines or bridges or utility work. We heard about those horrible floods in Texas. Drones were helping identify folks who needed help and damage. In agriculture, you can trim pesticide use, have more efficient spraying, you can map, you can seed more efficiently. Walmart and others are using drones to deliver parcels and groceries. So it's pretty amazing what's happening here. We don't tend to talk about individual customers or orders. Did talk to our friends at McKinsey.
The battery insight team believes that drones worldwide is something like a $50 billion market opportunity today. If you take the battery part of that, it's around 10% plus or minus, which gives us a total TAM for batteries of our type, round numbers, $4.5 billion.
Mark Schuster: That's great. I really appreciate the color there, Tom. Considering, like, that to go on that, right, the batteries section of that TAM, considering that the battery is a relatively small COGS line item? Can you speak to the pricing power that you guys may have because of the increased energy density? And your pricing power over competitors? And given the geographical location, what are you willing to what are customers willing to pay up for maybe non-China supply, like the South Korea capacity or even in the Fremont pilot line?
Tom Stepien: Yeah. So we provide tremendous value. And for us and our customers, it's about that value. It's not so much about the price. So we have a performance product, and we're able to command a price. That strategy of having a disruptive technology that can command a premium in the short term, this probably won't last forever. Building scale and then moving down the cost curve is a tried and true path, and that's a path that we're on. The pilot line here that is expanding is all about quick turn. So we can do quick turns.
Some of our customers are ordering 100, 200 cells because they just need to test, want to validate that what we tell them is real, and then as orders come in, we go to our contract manufacturing partners. That's some of the dynamics on the customer side.
Mark Schuster: Thank you, Tom. Thank you.
Operator: Next question is from the line of Chip Moore with Roth M.K.M. Please proceed with your question.
Chip Moore: Thanks for taking the question, and congrats on the positive gross margins. I want to ask about the light electric vehicle opportunity. I think you talked about that being somewhat lumpy and shorter cycle. Any way to help us think about potential contribution there and visibility for the next few quarters?
Kang Sun: Oh, Chip, for the light electrical vehicle, our market is primarily in Europe and Asia. So this industry is experiencing a revolution. Because everything from the vehicle design to the battery specification is changing. So we anticipate it is quite a large change and gives us a very exciting opportunity because this new standard, performance standard requires ten engine and a half power. Now our battery just fits into it. We have customers presenting us with very sensible opportunities. Those customers are from Europe and Asia. The product qualification time is quite short, so it gives us additional maturity in the near term.
Chip Moore: Good to hear, Kang. And I think I heard you say earlier, you know, on Q3, you know, some of those customers that have been going through the qualification stage, you know, maybe for a little bit longer, are going to be moving to the revenue phase. Should we think about revenues increasing sequentially? Is that a fair assumption? Thanks.
Kang Sun: I think that should be the case. Based on the status of our qualification process.
Chip Moore: Very good. Thank you for the clarification.
Operator: Thank you. Our next questions come from the line of Derek Soderbergh with Cantor Fitzgerald. Please proceed with your question.
Derek Soderbergh: Yes. Hey, everyone. Thanks for taking the questions. Can you provide some more detail on that $10.5 million contract with the U.S. Government? Looks like the innovation unit. Is this for drones or was this the wearable battery program? Just wondering if you could provide more detail on what sort of led to that program, you know, other details, like, where do you need to build this to do these batteries? Need to come from your facility in Fremont? Can they come from Korea? Just some more detail on that contract would be great.
Tom Stepien: Yes. Maybe I can start that out. This is Tom. So the DIU is about ten years old. They are an arm of the DOD. They have offices here in Silicon Valley, Boston, and other tech centers. They have three principal responsibilities: to identify high-potential technology like our batteries, accelerate adoption across the DoD, and to strengthen the national security innovation ecosystems. They received about $2 billion in the recent OB3A bill. So what we're doing is building out our pilot line, both in terms of capability. Sandra mentioned that we're adding the electrode manufacturing capability, the front end of a three-part lithium-ion factory, as well as increasing the capacity here in Fremont.
And the idea is to have batteries that are NDAA compliant. Right? Basically think of countries that are NATO countries or friendly with us. The $10.5 million is going to cover more than 50% of that overall build-out. We're dedicating resources and CapEx to deliver to that. The pilot line won't be huge. Right? It's around 10 megawatt-hours a year. But that's all about getting supply and qualifying the US material and getting mostly drones, to the first part of your question, all integrated and designed into our type of technology. And then making it available in NDAA compliant countries.
Derek Soderbergh: Got it. That's helpful. And then just sticking to the DOD stuff. I've seen quite a few comments coming out from the administration surrounding drones. Just from the investors' perspective, what's the best way to approach this opportunity for you guys? I know you've got potentially some production capabilities in Colorado if you wanted to make those investments. Do you think this pilot line and then whatever space you have left in Fremont can sort of handle this drone opportunity, you know, potentially in The US? Like, what's the best way to approach, you know, this commentary that we're hearing out of the DOD that they want a domestic supply of drones?
And how are you guys going to respond to that?
Tom Stepien: Yes, Derek, good question. A one-word answer is velocity. We talked about in the recorded call the two executive orders and HEXAF from about a month ago about removing some of the friction. We heard just a couple of days ago that Transportation Secretary Sean Duffy and the FAA have tried to normalize the beyond visual line of sight for drone operations. So think delivery and other things, agriculture inspection. So that's all velocity. Right? As these devices become mainstream, and we have more and more of this occurring, we believe that our batteries are differentiators. Huge value if you can deliver twice as many packages.
Or you can do, you know, twice the acreage that you could do with a different battery. And that's where we want to play, that's where we can win.
Derek Soderbergh: Got it. Super helpful. Appreciate it.
Operator: Our next question comes from the line of Ryan Pfingst with B. Riley. Please proceed with your question. First, for the contract manufacturing agreement, and South Korea, could you potentially size the production capacity you now have there or maybe what it looks like relative to the agreements you have in China?
Kang Sun: Yeah. But currently, the capacity of we just have one partnership in South Korea at this time. The capacity is adequate for what we ask them to do today. This facility not only gets excited by our competitive manufacturing partner, also the local government. Okay. They really see Amprius Technologies, Inc.'s technology as the enabler to expand their advanced new generation medium battery manufacturing base in Korea. So we are working with them. As a matter of fact, these couple of days, I'm working on the plan for the facility expansion.
Ryan Pfingst: Great. Appreciate that. And then sticking with the manufacturing side, you noted that you're still sourcing additional partners. Just curious what the main geographies are that you're targeting there for, you know, additional contract manufacturing capacity?
Kang Sun: At this time, you know, the best manufacturing skills reside in Korea and China. They are the leaders in battery manufacturing. Those two areas, we already have a partnership. We are strengthening the partnership. We extend our capability and capacity. In addition to that, we're also looking for domestic partnerships as well. You know, there are many US small-sized battery companies. They have been experiencing a very difficult time. So Amprius Technologies, Inc.'s technology and the Amprius Technologies, Inc.'s market penetration could help this company, you know, potentially, we can form partnerships in the United States as well.
Ryan Pfingst: Great. Thank you, Kang. I'll turn it back.
Operator: Thank you. Next questions are from the line of Amit Dayal with H.C. Wainwright. Proceed with your question.
Amit Dayal: Congrats on the strong margin performance this quarter. So Sandra, just on that front, should we expect margins to remain in the positive territory, but vary a little bit, you know, depending on, you know, sales volume, etcetera, but, you know, stay in the positive territory for the rest of the year as revenue scales from here?
Sandra Wallach: Yeah. So that's a good question. So I think we have crossed over officially at the $15 million revenue per quarter line to be nicely positive. I think we'll see some variation, normal variation, based on which deals are going through each quarter, but we should stay positive and continue to grow that positive gross margin over time.
Amit Dayal: Understood. And then your comments around operating costs as your revenues are scaling, it just seems like there may be some operating leverage coming into play as well. Operating costs, should we expect them to remain steady at around these levels? At least for the next few quarters before you see any further ramp in revenues?
Sandra Wallach: Yes. Given that we are leveraging the contract manufacturing model, we are going, I mean, we're 97 employees full-time as of June, so we're still really lean. Making strategic investments in R&D and in sales and go-to-market. But I wouldn't see a wholesale change in our operating expense profile in the foreseeable future.
Amit Dayal: Thank you for that. Just last one, if I can squeeze this in for Tom, maybe Tom, can you talk about, you know, what the pipeline looks like, you know, the opportunities that you're working on? Are there contracts potentially you may be pursuing that could be, you know, in the $20, $30, $40 million level type of deals? Just trying to get a sense of, you know, how big some of these customer interactions, you know, could potentially be for the company.
Tom Stepien: Yeah. We don't tend to talk about them until the end of the quarters or if they're really large. We'll talk about them mid-quarter. Look, as we said, these are different layers and there's a different gestation period at each of our customers. There's 320 some odd that we served over the last six, eight quarters. We'll work on them all. We're pretty wide. We want to go deeper. We want to get those design wins. And we're doing that. There's some tools that we've improved to do that. There's some partnerships that we're working on. Can't tell you much more than that at this point in time.
Amit Dayal: Understood. Alright. I'll step back in queue. Thank you so much.
Operator: Thank you. Our next question is from the line of Ted Jackson with Northland Securities. Please proceed with your questions.
Ted Jackson: Thanks very much. I want to keep googling around on the production side of things. So the South Korean facility is on the cusp of coming online. You've been, you know, making SiCore product in the pilot line at Fremont. I mean, is there a potential for a step up in revenue when the South Korean partner brings that line into play and you begin to transfer some of that production out of Fremont to it? And when exactly does that South Korean line turn on? Is that a third-quarter phenomenon? Is that a fourth quarter? Is that a first quarter? That's my first question.
Kang Sun: No. We engaged with them about a couple of quarters ago. We just finished the new tooling. Of the equipment, another equipment, another all the production line ready for Amprius Technologies, Inc.'s product. So we just finished that. We had a prototype presented to us. I believe we are going to start the manufacturing for our customers next month. So this we have a fraction of the customer like to buy the batteries from a specific region. That's one of the reasons we develop a partnership. Now in addition to that, you know, software and those automated batteries, they are one of the best in the industry.
So Fremont will have a very intimate relationship interaction with our contract manufacturing partnership. Tom mentioned that earlier, we are going to expand and upgrade our pipeline here. So our manufacturing process here can be delivered to our contract manufacturing facility, vice versa. When they develop something unique, we will share it with our team here.
Ted Jackson: By the way, is there a chance that as that comes online, that is there do you have any kind of pent-up demand that's waiting for that South Korean facility to turn on because they don't want to have their product come from China?
Kang Sun: No. Korean partnership, the partner we have in Korea, they certainly can manufacture anything the Chinese are making. For pouch cells. Today we have not had a cylindrical cell partnership in Korea. But we are in the discussion. Whatever we made in Fremont, made in China, made in Korea, then they should be all capable of manufacturing our batteries.
Ted Jackson: Okay. The next question is, the margin is improving. SiCore has been a tremendous success for the company. It's driving revenue growth. Driving margin. Can you give us some kind of ballpark mix of the revenue between SiCore and SiMax, you know, this period maybe what was in, you know, the second quarter of that?
Sandra Wallach: Yeah. Ted, we don't break it down. We just break it down by product. But it's fair to say that the majority of our growth is coming from SiCore.
Ted Jackson: Okay. And then with the expansion of the Fremont line, you know, you commented, you know, you're gonna spend some more money relative to, you know, maybe what was in the plan a quarter or so ago. The government's gonna provide, you know, call it $10 million, and then you're gonna put the other half. How do we think about how this plays out within the financials? Like, when we think about the actual CapEx numbers that we're gonna be putting in our models for cash flow? What are those numbers and how does it play?
Sandra Wallach: So what we're contributing is really dedicating resources that we have that are working on this to diversify our supply chain and expand manufacturing within Fremont. And some funds for equipment and build-out. So the DIU contract is over the next six quarters is funding the majority of the effort of this project. So our portion is a fraction of the $10 million.
Ted Jackson: Okay. But you would get the money in, and then you would spend it. So but, I mean, I assume we would still see a pickup with regards to just in your cash flow statement for CapEx. But at the end of the day, really just flowing through your financial statements from the DIU. Do you understand what I'm saying? Just to understand how it goes through my model.
Sandra Wallach: Yeah. So I think revenue recognition for a contract like this is a little bit tricky. We're still working through the details. But overall, it's fair to assume that it's gonna come through as revenue, and we're going to show the cash going out in the statement of cash flows.
Ted Jackson: Mhmm. Okay. And then my last question, you know, they're offering this to you and helping you out. There's clearly a desire by this administration, honestly, even the previous administration to bring, well, battery manufacturing into The US and also just strategic industrial activity into The US. I would say that, you know, the fact that you've got this funding, you know, shows that you are strategic. Is there any discussion or any opportunity for you to go into partnership with the government to bring to fruition the work you've done in?
Sandra Wallach: So we're in regular communications with a number of key stakeholders. And one of the things that we've been clear about is that our ability to move forward with the design and the capacity in Brighton is really dependent on a number of macro things going on, not the least of which is tariffs, government incentives, supply and demand. At this point, we have more than enough capacity. We would be over a billion dollars in revenue with the 1.8 gigawatt-hours that Kang has already secured for us.
And so we've got more than enough capacity to serve the foreseeable future, but we are keeping those lines of communication open if something does change that would make it more economically viable to move forward with Brighton at this time.
Ted Jackson: Okay. That's it for me. Hey, congrats on the quarter. It was great.
Operator: Thank you. At this time, this concludes our question and answer session. If you have any additional questions, you may contact Amprius Technologies, Inc.'s Investor Relations team at [email protected]. I'd now like to turn the call over to Dr. Kang Sun for his closing remarks.
Kang Sun: 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 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.
Operator: Thank you for joining us today for Amprius Technologies, Inc. Second Quarter 2025 Earnings Conference Call. You may now disconnect.