SES AI Corp
For the period ended Mar 31, 2026. Filed Apr 24, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 24, 2026
SES$0.83+22.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001819142-25-000070
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-24.
0001819142-26-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 68 current paragraphs.
24 unchanged; 18 reworded; 25 added; 38 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Key Trends, Opportunities and Uncertainties
Current report
Historical Performance
Current report
We are an early-stage growth company. We incurred net losses of $12.1 million and $12.4 million for the three months ended March 31, 2026 and 2025, respectively, and had an accumulated deficit of $384.0 million and $311.3 million from our inception through March 31, 2026 and 2025, respectively. We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a few more years. Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate and our ability to generate revenue in the future that is sufficient enough to achieve profitability will depend largely on the successful development of our products and services. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations.
Current report
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose significant risks and challenges, including those discussed below and in “Part I, Item 1A. Risk Factors.”
Current report
Acquisition of UZ Energy
Current report
Commercialization of Molecular Universe
Current report
We believe that the commercialization of the Molecular Universe platform represents a significant opportunity to drive future revenue growth and margin expansion, as it should enable us to offer differentiated AI-driven solutions to customers. We expect that successful adoption of Molecular Universe, both as a software product and as an integrated component of our hardware and software offerings, could increase revenues and improve gross margins over time. However, we also recognize that the market for AI-based scientific discovery tools is nascent and rapidly evolving, and that the pace of adoption and competitive dynamics are uncertain. If adoption is slower than anticipated or if competing platforms gain traction, our ability to achieve revenue growth and profitability could be adversely affected.
Current report
Shift to Joint Venture Manufacturing with Hisun
Current report
Our strategic shift away from in-house manufacturing of certain battery materials, and the announcement of a joint venture with Hisun to produce novel materials at commercial scale, is expected to reduce capital intensity and accelerate time-to-market for new products. We anticipate that this approach will allow us to scale more efficiently and address a broader customer base, which could positively impact future revenues. However, the transition introduces new uncertainties, including the risk of production delays, quality control challenges, and dependence on third-party manufacturing partners. These factors could result in variability in cost of goods sold, potential supply chain disruptions, and fluctuations in cash flows.
Current report
NDAA-Compliant Drone Cell Manufacturing
Current report
Our plan to develop NDAA-compliant manufacturing capacity for drone cells is intended to position us to capture new business from U.S. government and defense-related customers, which we believe could be a driver of future revenue growth. Achieving NDAA compliance may also enhance our competitive positioning and open additional market opportunities. However, this initiative will require substantial capital investment and ongoing compliance costs, and there is uncertainty regarding the timing and magnitude of customer demand. If we are unable to achieve commercial-scale production or if demand for NDAA-compliant drone cells does not materialize as expected, we could experience underutilization of assets and negative impacts on cash flows.
Current report
Revenue from customers for the three months ended March 31, 2026 increased $0.9 million to $6.7 million compared to $5.8 million for the three months ended March 31, 2025.
Current report
Service revenues decreased $5.5 million, or nearly 95%, to $0.3 million for the three months ended March 31, 2026 compared to $5.8 million for the three months ended March 31, 2025. This decrease was primarily attributable to completion of the service revenue projects with OEMs and other manufacturers in last quarter of 2025. Product revenue increased $6.4 million, or nearly 100%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily attributable to ESS systems sales from UZ Energy, which was acquired during the third quarter of 2025.
Current report
Costs of revenue for the three months ended March 31, 2026 increased $4.3 million, or nearly 78%, to $5.5 million compared to $1.2 million for the three months ended March 31, 2025. Costs related to service revenues decreased $1.1 million, or 92%, to $0.1 million for the three months ended March 31, 2026 compared to $1.2 million for the three months ended March 31, 2025. This decrease was primarily attributable to completion of the service revenue projects with OEMs and other manufacturers in last quarter of 2025. Costs related to product revenue increased $5.4 million primarily attributable to ESS systems sales from UZ Energy, which was acquired during the third quarter of 2025.
Current report
Gross Profit Margin
Current report
Research and development expenses for the three months ended March 31, 2026 decreased $9.5 million, or 46.2%, to $11.0 million, compared with $20.5 million for the three months ended March 31, 2025. This decrease primarily resulted from a $5.4 million decrease in automotive OEM JDA related lab equipment expenses, a $3.4 million decrease in AI infrastructure costs incurred from renting Graphic Processing Unit (“GPU”) computing resources, and a $0.5 million decrease in stock-based compensation expense attributable to reduced headcount resulting from the company’s strategic shift to an AI-based focus.
Current report
General and administrative expenses for the three months ended March 31, 2026 increased $0.7 million, or 10.0%, to $8.1 million, compared with $7.3 million for the three months ended March 31, 2025. This increase primarily resulted from a $0.8 million increase in salaries, and benefits expense due to UZ acquisition and hiring of sales personnel, a $0.3 million increase in professional recruitment fees, a $0.2 million increase in software expenses, and a $0.2 million increase in office and utility expenses. These increases were partially offset by a $0.9 million decrease in stock-based compensation expense due to generally lower headcount.
Current report
During the three months ended March 31, 2026, we had interest income of $1.7 million compared with $2.7 million for the three months ended March 31, 2025. The decrease waslower average short-term investment balances and a decline in market interest rates since the prior year period.
Current report
Miscellaneous Income, Net
Current report
During the three months ended March 31, 2026 and 2025, there was no significant change in the miscellaneous income.
Current report
Provision from Income Taxes
Current report
The provision for income taxes for the three months ended March 31, 2026 was $0.4 million compared to nearly $0.0 million for the three months ended March 31, 2025 mainly due to pre-tax income in China and South Korea.
Current report
Net cash used in operating activities of $19.8 million for the three months ended March 31, 2026 was primarily attributable to net loss of $12.1 million, as adjusted for a gain on change in fair value of Sponsor Earn-Out liabilities of $4.2 million, gain on change in fair value of deferred consideration of $0.8 million, accretion income from marketable securities of $0.5 million, stock-based compensation expense of $2.1 million, depreciation and amortization of $2.7 million, and $0.4 million of other items. These non-cash operating items were combined with a $7.4 million working capital outflow. The working capital outflow was driven primarily by a $3.4 million increase in trade accounts receivables, a $1.7 million increase in inventories, a $1.3 million decrease in accrued expenses and other liabilities, a $0.9 million increase in prepaid and other assets, and a $0.4 million decrease in net lease activity. These working capital outflows were partially offset by a working capital inflow of a $0.4 million increase in accounts payable. The increase in inventories was primarily due to purchases for ESS commercial operations as a result of the acquisition of UZ Energy in the third quarter of 2025. The decrease in accrued expenses and other liabilities was primarily due to decreases in accruals for purchases of equipment for a JDA, accrued income taxes payable, and payroll related accruals. The increase in prepaids and other assets was primarily due to payments for licenses or hosting software data. The changes to operating lease liabilities and right of use assets was primarily driven by lease modifications. The changes in trade account receivables and accounts payables were driven by timing of receipts.
Current report
Net cash used in financing activities for the three months ended March 31, 2026 was $2.0 million, consisting mainly of payments for withholding taxes on share vesting, compared to an immaterial amount for the three months ended March 31, 2025.
Current report
There have been no significant changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our annual consolidated financial statements and accompanying notes included in our 2025 Annual Report on Form 10-K.
Removed paragraphs (38)
Previous report
As we build more AI-enhanced Li-Metal and Li-ion cells and generate more data, AI has become an increasingly integral part of our business in material development, battery health monitoring and incident prediction, with our AI initiatives consisting of AI for Science, AI for Manufacturing and AI for Safety. We believe that our AI for Science has the potential to accelerate our pipeline material discovery by mapping the vast universe of small molecules, with the goal to improve battery performance and safety. Our AI for Manufacturing uses machine learning to help define and fine-tune quality specifications based on manufacturing process data. Our AI for Safety is designed to monitor battery state-of-health and predict incidents more accurately than conventional battery management system.
Previous report
There are four pillars to our mission.
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We started our AI programs out of necessity, due to the need to provide a high level of safety in the field and the need to further accelerate our future roadmap for material development. Our AI programs fall under three major categories:
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AI for Science - We launched our new AI model Molecular Universe (“MU”) in April 2025, and unveiled the latest platform, MU-1, in October 2025. The model is designed to screen a vast universe of small molecules for potential electrolyte solvent candidates. We have also built an electrolyte foundry designed to provide high throughput synthesis and testing of these materials.
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AI for Manufacturing – The traditional approach to optimizing cell design and process and improving manufacturing quality is through human experience, where the human engineers define and optimize quality specifications, which typically is a very lengthy process. We believe our AI for Manufacturing can accelerate this timeline. AI for Manufacturing uses machine learning to help define and fine-turn quality specifications based on manufacturing process data.
Previous report
AI for Safety - We seek to provide a high level of safety in the field, and we are leveraging our automotive 50Ah and 100Ah cell production volume and quality data to train our AI for Safety. Our AI for Safety prediction accuracy increased to 95% in 2024, meeting the target we set at the start of the year. Our ultimate goal is to be able to reach near 100% safety in the field, which we believe will be paramount to both EV and UAM OEMs.
Previous report
We believe the intersection of digital infrastructure and the need for power is one of the most critical themes of our time. As AI continues to evolve, the demand for power will grow significantly. ESS is an essential enabler of renewable energy generation, helping alternative sources of power make a steady contribution to the world’s energy needs despite the inherently intermittent character of renewable energy sources. The flexibility ESS provides will make it integral to applications such as peak shaving, self-consumption, and back power in the event of outages. All of this has created a significant opportunity for us. We have been actively exploring this area as a natural fit to exploit our unique capabilities in materials discovery and superintelligent battery management through AI. We believe that our AI-enhanced batteries can extend the life of ESS, and our AI for Safety can improve ESS battery health and safety. We have only begun to tap into this market and look forward to growing our presence in energy storage.
Previous report
In 2012, we transitioned away from solid state Li-Metal, so our Li-Metal batteries could operate at room temperature and be manufactured at large scale. In 2015, we received the first strategic investment from General Motors. In 2021, we signed what we believe to be the world’s first automotive A-sample Li-Metal joint development agreements (JDAs) with GM, Hyundai and Honda, all of whom made strategic investments in our company. In 2023, we signed what we believe to be the world’s first automotive B-sample Li-Metal JDA with a major global automaker. In 2024, we extended our JDA agreement with Hyundai to conduct further development activities in order to achieve production of B-sample batteries.
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We believe that our AI-enhanced Li-Metal battery technology demonstrates industry-leading energy density and performance and has the ability to:
Previous report
deliver a lightweight and compact battery, and substantially reduce range anxiety of EV consumers;
Previous report
In 2024, we transitioned from developing and producing A-Sample batteries to B-Samples to meet carmakers' requirements for their electric vehicles. A-Sample batteries are functional prototypes developed for OEMs based on their technical specifications. These are in contrast with B-Sample batteries, which are A-sample batteries manufactured under much higher throughput and tested in actual vehicles, and C-Sample batteries, which would be fully functional, mature samples for mass production and tested for full drivability in actual vehicles.
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We believe that UAM and drones are perfect fits for high energy density and high-power density Li-Metal and Li-ion batteries. In our view, B-sample battery cell technology requires less additional development to reach commercial production for use in UAM and drones than in EVs, and that our B-sample technology for EVs can be adapted for UAMs and drones quickly. UAM and drones frequently operate on a fleet business model where the key business metrics are cost per passenger per mile, with weight being a paramount factor to costs. We believe that the step-change gravimetric energy density that Li-Metal and Li-ion can potentially offer means that an aircraft has the potential to carry twice the number of passengers, or twice the payload for cargo applications, or fly twice the distance, which has the potential to significantly improve the profitability of UAM operators. We have converted two of our EV A-sample lines to be dedicated to UAM cell production.
Previous report
We also believe that our high-energy density and high-power density Li-Metal and Li-ion cells, such as the AI-enhanced 2170 cylindrical cell that we unveiled in January 2025, are well designed for use in humanoid robots, drones and other applications.
Previous report
Revenue for the three and nine months ended September 30, 2025 was $7.1 million and $16.4 million, respectively. This revenue was primarily earned from service-related contracts with OEMs and other manufacturers totaling $3.9 million and $13.2 million, respectively, as well as ESS product shipments totaling $3.2 million for the three and nine months ended September 30, 2025, respectively.
Previous report
Costs of revenue for the three and nine months ended September 30, 2025 were $3.5 million and $5.6 million, respectively. This cost of revenue was primarily attributable to personnel costs for service-related contracts totaling $0.7 million and $2.9 million, respectively, as well as inventory, materials, and shipping costs for ESS product revenue shipments totaling $2.7 million for the three and nine months ended September 30, 2025, respectively.
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Gross Margin
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Research and development expenses for the three months ended September 30, 2025 decreased $8.8 million, or 36%, to $15.6 million, compared with $24.4 million for the three months ended September 30, 2024. This decrease was primarily driven by a $8.4 million decrease in JDA related lab expenses during the current period, a $3.3 million decrease in personnel costs and a $2.9 million decrease in stock-based compensation mainly attributable to headcount reductions resulting from the company pivoting away from in-house manufacturing, and a $0.6 million decrease in other operating costs like professional fees, rent, and depreciation. These decreases were partially offset by a $4.5 million decrease in reimbursements from prior year from our JDA partners due to the culmination of certain JDA activities in 2024 and a $2.1 million increase in AI infrastructure costs including Graphic Processing Unit (“GPU”) expenses and development costs development of the Company’s Molecular Universe platform.
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Research and development expenses for the nine months ended September 30, 2025 increased $3.9 million, or 8%, to $55.2 million compared with $51.3 million for the nine months ended September 30, 2024. This increase was primarily driven by a $10.5 million increase in AI infrastructure costs including GPU expenses and costs related to development of the Company’s Molecular Universe platform, $8.5 million decrease in reimbursements compared to the prior period from billings from our JDA partners due to the culmination of certain JDA activities in 2024, and a $0.2 million increase in depreciation expense for assets placed in service. These increases were partially offset by a $7.4 million decrease in personnel costs, a $4.0 million decrease in stock-based compensation mainly attributable to headcount reductions resulting from the company pivoting away from in-house manufacturing, a $2.7 million decrease in JDA related lab equipment expenses.
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Further, there was a $0.6 million decrease in professional services as well as a $0.6 million decrease in other operating costs that include repairs and maintenance and allocated expenses.
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General and administrative expenses for the three months ended September 30, 2025 decreased $3.1 million, or 32%, to $6.7 million, compared with $9.8 million for the three months ended September 30, 2024. This decrease was primarily driven by a decrease of $1.6 million for stock-based compensation and $0.9 million in personnel costs due to headcount reductions, and a $0.9 million decrease in professional services including recruiting and public relations consulting, partially offset by a $0.2 million increase in other operating costs including franchise tax fees.
Previous report
General and administrative expenses for the nine months ended September 30, 2025 decreased $8.4 million, or 29%, to $20.5 million, compared with $28.9 million for the nine months ended September 30, 2024. This decrease was primarily driven by a decrease of $3.4 million for stock-based compensation and $2.9 million in personnel costs due to headcount reductions, and a $1.6 million decrease in professional services including recruiting and public relations consulting, a $0.6 million decrease in legal fees and a $0.5 decrease in insurance costs, partially offset by a $0.5 million increase in other operating costs including franchise tax fees and regulatory costs.
Previous report
During the three and nine months ended September 30, 2025, we had interest income of $2.3 million and $7.3 million, respectively, compared with $3.7 million and $11.8 million for the three and nine months ended September 30, 2024, respectively. The $1.4 million and $4.5 million decreases from each of the three and nine months ended September 30, 2024 to each of the three and nine months ended September 30, 2025 were due to lower investment balances primarily arising from cash used in operations.
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Miscellaneous Income (Expense), Net
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During the three months ended September 30, 2025, we had miscellaneous expense of $0.7 million, compared with miscellaneous expense of $0.5 million for the three months ended September 30, 2024. This $0.2 million increase in miscellaneous expense was primarily due to an increase in the loss on foreign currency translation.
Previous report
During the nine months ended September 30, 2025, we had miscellaneous expense of $0.3 million, compared with miscellaneous expense of $0.2 million for the nine months ended September 30, 2024. This $0.1 million increase in miscellaneous expense was the result of an increase in the loss on foreign currency translations.
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Benefits from (Provision for) Income Taxes
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During the three months ended September 30, 2025, we had a benefit from income taxes of $0.1 million compared to a provision for income taxes of $0.1 million for the three months ended September 30, 2024. This $0.2 million increase in benefits from incomes taxes is primarily due to local taxes in the foreign jurisdictions in which the Company operates.
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During the nine months ended September 30, 2025, we had provisions for income taxes of $0.6 million compared to a $0.4 million provision for income taxes for the nine months ended September 30, 2024. This $0.2 million increase in provision for income taxes as primarily due to local taxes in the foreign jurisdictions in which the Company operates.
Previous report
Net cash used in operating activities of $48.0 million for the nine months ended September 30, 2025 was primarily attributable to net loss of $56.0 million, as adjusted for stock-based compensation expense of $8.9 million, a gain on change in fair value of Sponsor Earn-Out liabilities of $2.5 million, depreciation and amortization of $7.7 million, a loss on disposal of fixed assets of $0.6 million, accretion income from marketable securities of $2.4 million, and a $4.6 million working capital outflow. The working capital outflow was primarily driven by a $5.4 million increase in prepaids and other assets primarily due to advance payments made for software related service costs due to AI infrastructure spend, a $2.0 million increase in accrued expenses and other current liabilities due to accruals for deferred consideration in connection with the acquisition, changes in deferred revenue balances, accrued income taxes payable, and payroll related accruals and a $1.3 million increase in receivables from customers.
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Purchases, Maturities, and Sale of Investments – Net purchases of investments in marketable debt and equity securities were $47.4 million for the nine months ended September 30, 2025, compared to net proceeds from investments in marketable debt and equity securities of $46.1 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we sold investments prior to maturity resulting in $5.0 million in proceeds from sale of investments compared to none in the nine months ended September 30, 2024.
Previous report
Capital Spending – Capital expenditures were $2.1 million and $12.0 million for the nine months ended September 30, 2025 and 2024, respectively, and primarily related to the shift from investing in manufacturing equipment to more AI/software, which is less capital intensive. We expect capital expenditures to decrease in 2025 compared with 2024 as we continue to spend on AI related infrastructure classified as research and development expense rather than invest in manufacturing equipment.
Previous report
Business Combination – Net cash acquired during the business combination was $0.8 million for the nine months ended September 30, 2025 due to the timing of deferred consideration payments for the acquisition consideration.
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Net cash used in financing activities was $2.0 million for the nine months ended September 30, 2025 compared to net cash provided by financing activities of $0.4 million for the six months ended June 30, 2024, respectively, due to $1.6 million in stock repurchases during the period and $0.4 million in payments for taxes withheld to cover vested restricted stock.
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Contractual Obligations and Commitments
Previous report
The following table summarizes our material contractual obligations for cash expenditures as of September 30, 2025, and the periods in which these obligations are due:
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(1) Purchase obligations include commitments derived from a JDA agreement, outstanding purchase orders, and supplier contracts of lab supplies and equipment.
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(2) Operating lease obligations represent the fixed lease payments for the noncancelable lease term, fixed lease payments for optional renewal periods where the Company is reasonably certain the renewal option will be exercised, and variable lease payments that depend on an underlying index or rate in effect at lease commencement.
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We consider an accounting estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the financial statements. Our significant accounting policies are described in “Note 2 – Basis of Presentation and Summary of Significant Accounting Policies” of our accompanying condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. We consider the following to be our critical accounting estimates.
Reworded paragraphs (18)
Previous wording
The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 and the related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year ended December 31, 2024 and the related notes contained in the 2024 Annual Report on Form 10-K. This Quarterly Report on Form 10-Q includes forward-looking statements. These forward-looking statements within the meaning of the federal securities law are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are not statements of historical fact and may include statements regarding possible or assumed future results of operations. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Item 1A. Risk Factors in the 2024 Annual Report on 10-K. Unless the context otherwise requires, references in this section to “the Company,” “we,” “us” and “our” refer to the business and operations of SES Holdings Pte. Ltd. (“Old SES”) and its consolidated subsidiaries prior to the Business Combination and to SES AI Corporation and its consolidated subsidiaries following the Closing. References in this section to our future plans that indicate the timing of when we expect such plans to be completed by a certain year mean at any point during that year.
Current wording
The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion and analysis should be read in conjunction with the accompanying unaudited interim condensed consolidated financial statements as of and for the three months ended March 31, 2026 and the related notes included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements as of and for the year endedDecember 31, 2025 and the related notes contained in the 2025 Annual Report on Form 10-K. This Quarterly Report on Form 10-Q includes forward-looking statements. These forward-looking statements within the meaning of the federal securities law are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are not statements of historical fact and may include statements regarding possible or assumed future results of operations. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Item 1A. Risk Factors in the 2025 Annual Report on 10-K. Unless the context otherwise requires, references in this section to “the Company,” “we,” “us” and “our” refer to the business and operations of SES Holdings Pte. Ltd. (“Old SES”) and its consolidated subsidiaries prior to the Business Combination and to SES AI Corporation and its consolidated subsidiaries following the Closing. References in this section to our future plans that indicate the timing of when we expect such plans to be completed by a certain year mean at any point during that year.
Previous wording
We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”), drones, robotics, Energy Storage Systems (“ESS”) and other applications. The Company’s mission is to accelerate the world’s energy transition through material discovery and battery
Current wording
We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”), drones, robotics, Energy Storage Systems (“ESS”) and other applications. The Company’s mission is to accelerate the world’s energy transition through material discovery and battery management. SES accelerates its pace of innovation by utilizing superintelligent AI across the spectrum of our business, from research and development, materials sourcing, cell design, engineering and manufacturing, to battery health and safety monitoring.
Previous wording
On July 25, 2025, our wholly owned subsidiary, SES AI International I Pte Ltd, entered into an agreement with UZ Energy Co. Ltd. and its shareholders to acquire 100% of the share capital of UZ Energy, a China-based battery energy storage system manufacturer. The aggregate consideration for the acquisition of UZ Energy is approximately RMB 183.5 million ($25.8 million), of which the purchase consideration is RMB 93.5 million ($13.1 million), subject to adjustment based on a number of performance factors. The transaction closed on September 15, 2025 after completion of customary closing conditions. We believe that the acquisition of UZ Energy strengthens our capabilities in the ESS market and will provide opportunities for revenue generation.
Current wording
We believe that the acquisition of UZ Energy strengthens our capabilities in the ESS market and will provide opportunities for revenue generation. See “Note 3 – Acquisition” of our accompanying consolidated financial statements for further discussion.
Previous wording
In October 2024, we began to generate revenue from our principal business activities. We generate revenue from two primary sources:
Current wording
For the three months ended March 31, 2026 and 2025, we generated revenue from two primary sources:
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Cost of revenue includes materials, labor, depreciation and amortization expense, inventory, freight costs, and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries, benefits, and stock-based compensation. We anticipate that cost of revenue will continue to increase as we enter into new revenue contracts.
Current wording
Cost of revenue includes materials, labor, depreciation and amortization expense, inventory, freight costs, warranty, and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries, benefits, and stock-based compensation.
Previous wording
Gross margin, or gross profit as a percentage of revenue, has been and will continue to fluctuate over time affected by a variety of factors, including the average sales price of our product and service offerings and changes in our mix of revenue between our ESS product and R&D service offerings.
Current wording
Gross profit margin has been and will continue to fluctuate over time affected by a variety of factors, including the average sales price of our product and service offerings and changes in our mix of revenue between ESS systems, drone batteries, battery materials and service offerings to automotive OEMs and other manufacturers.
Previous wording
Gross margin for the three and nine months ended September 30, 2025 were 51.1% and 65.7%, respectively. The fluctuation was primarily due to ESS product deliveries arising from the acquisition of UZ Energy in September 2025 and the resulting effect on revenue mix between product and service offerings.
Current wording
Gross profit margin for the three months ended March 31, 2026 and March 31, 2025 were 18.1% and 78.7%, respectively. The fluctuation was primarily due to the effect of changing revenue mix between product and service offerings as explained above.
Previous wording
Research and development expenses consist primarily of costs incurred for salaries and personnel-related expenses, including performance-based bonus and stock-based compensation expense, for scientists, experienced engineers and technicians, expenses for materials and supplies used in product research and development, process engineering efforts and testing, as well as payments to consultants, depreciation, and allocated facilities and information technology costs.
Current wording
We are an early-stage growth company conducting business activities through one operating segment. Research and development expenses include personnel-related expenses, such as salaries, benefits, and stock-based compensation, for scientists, experienced engineers and technicians. These expenses also cover materials and supplies used in product research and development, process engineering efforts and testing, payments made to consultants, and patent related legal costs. Furthermore, they encompass depreciation, allocated facilities expenses, and information technology costs, including costs incurred for renting graphic processing units (“GPUs”) to train AI models.
Previous wording
General and administrative expenses consist primarily of costs incurred for salaries and personnel-related expenses, including bonus and stock-based compensation expense, for our finance, legal and human resource functions, expenses for director and officer insurance, outside contractor and professional service fees, audit and compliance expenses, legal, patent-related costs, accounting and other advisory services, as well as allocated facilities and information technology costs, including depreciation.
Current wording
General and administrative expenses include personnel-related expenses, such as salaries, benefits, and stock-based compensation for our finance, legal and human resource functions. These expenses also cover director and officer insurance, outside contractor fees, and professional services, including audit, compliance, legal, accounting, investor relations, and other advisory services. Additionally, the expenses encompass allocated facilities and information technology costs, such as depreciation and amortization.
Previous wording
During the three and nine months ended September 30, 2025, we incurred a loss of $3.9 million and a gain of $2.5 million, respectively, associated with the change in fair value of the Sponsor Earn-Out liabilities compared with gains of $1.0 million and $3.3 million, respectively, for the three and nine months ended September 30, 2024. With the fair value of the Sponsor Earn-Out liabilities tied to the Company’s stock price, continued volatility in the stock price or changes in the expected term could result in further gains or losses resulting from the change in fair value. Refer to “Note 10 – Sponsor Earn-Out Liabilities” to the condensed consolidated financial statements for additional information.
Current wording
During the three months ended March 31, 2026, we incurred a gain of $4.2 million associated with the change in fair value of the Sponsor Earn-Out liabilities compared with a gain of $7.9 million for the three months ended March 31, 2025. This gain on the change in fair value
Previous wording
As of September 30, 2025, we had total cash and cash equivalents of $35.3 million and investments in marketable debt and equity securities of $178.7 million. As an early-stage growth company that has just begun the commercialization stage of development, the net operating losses we have incurred since inception are consistent with our strategy andbudget.
Current wording
As of March 31, 2026, we had total cash and cash equivalents of $46.9 million and investments in marketable debt and equity securities of $130.7 million. As an early-stage growth company, the net operating losses we have incurred since inception are consistent with our strategy and budget.
Previous wording
We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a number of years. Our ability to successfully develop our products and services, scale up our commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity and/or debt financing and, over time, our ability to generate positive cash flows from operations. To date, we have funded our operations primarily through a combination of proceeds from the Business Combination and subsequent equity private placement in 2022, and prior to that, funding received through the sales of our redeemable convertible preferred stock. We believe that our cash on hand and marketable securities resulting from these proceeds will be sufficient to meet our principal working capital and capital expenditure requirements and ongoing costs, such as research and development relating to our Li-Metal batteries, operations of recently acquired ESS business, and Molecular Universe material discoveries, for a period of at least 12 months from the date of this Quarterly Report, as well as to full commercialization. However, additional funding may be required during or after this period to finance certain needs beyond our principal working capital and capital expenditure requirements and ongoing costs, including additional opportunities to purchase data and equipment, develop and train our AI models, and/or develop commercial operations in the United States and abroad, acquisitions or other strategic transactions, and unexpected delays in the development of our Li-Metal battery cells.
Current wording
We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a few more years. Our ability to successfully develop our products and services, scale up our commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity and/or debt financing and, over time, our ability to generate positive cash flows from operations. We believe that our cash on hand and marketable securities will be sufficient to meet our principal working capital and capital expenditure requirements and ongoing research and development costs, operational and commercial activities, including expenditures fordeferred cash payments of an estimated approximately RMB 55.5 million ($8.0 million) related to the acquisition of UZ Energy as well asactivities related to the recently acquired ESS business, our plans for NDAA-compliant manufacturing capacity to develop drone cells and development and commercialization of Molecular Universe material discoveries, for a period of at least 12 months from the date of this Quarterly Report. However, additional funding may be required during or after this period to finance certain needs beyond our principal working capital and capital expenditure requirements and ongoing costs, including additional opportunities to purchase data and equipment, develop and train our AI models, and/or develop commercial operations in the United States and abroad, acquisitions or other strategic transactions, and unexpected delays in the development of our battery cells. See “Note 3 – Acquisition” of our accompanying consolidated financial statements for further discussion of the estimated deferred cash payments related to the acquisition of UZ Energy.
Previous wording
If we need additional funding beyond these existing short- to medium-term sources of liquidity, or if following commercialization, we are not able to fund our operations from cash flows generated from anticipated product sales, we expect that we will need to raise additional funds. This may be through a variety of possible methods, including, but not limited to, entry into joint ventures or other strategic arrangements, issuance of equity, equity-related or debt securities, and the obtaining credit from financial institutions. For more information about our at-the-market equity offering program with certain investment banks, which we entered into on February 28, 2025, through which we may offer and sell, from time to time, shares of Class A Common Stock having an aggregate offering price of up to $150.0 million, see “Part II, Item 9.B. Other Information” in our 2024 Annual Report on Form 10-K. We sold no shares under the at-the-market equity offering program during the quarter ended September 30, 2025, and to date have sold no shares under the program.
Current wording
If we need additional funding beyond these existing short- to medium-term sources of liquidity, or if we are not able to fund our operations from cash flows generated from anticipated product sales and service offerings, we expect that we will need to raise additional funds. This may be through a variety of possible methods, including, but not limited to, entry into joint ventures or other strategic arrangements, issuance of equity, equity-related or debt securities, and obtaining credit from financial institutions. We currently maintain an at-the-market equity offering program with certain investment banks (the “Agents”), pursuant to which we may offer and sell into the open market from time to time, at our option, shares of our Class A common stock with an aggregate offering price of up to $150.0 million. Subject to the terms and conditions of our agreement with them, the Agents will use their commercially reasonable efforts to sell shares of our Class A common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose), in exchange for a commission of up to 3.0% of the aggregate gross sale proceeds. We have also provided the banks with customary indemnification and contribution rights. We are not obligated to sell any Class A common stock and may at any time suspend solicitation and offers thereunder. We sold no shares under the at-the-market equity offering program during the three months ended March 31, 2026, and to date have sold no shares under the program.
Previous wording
Our cash flows used in operating activities to date have primarily comprised research and development and general and administrative activities as discussed above.
Current wording
Our cash flows used in operating activities to date have primarily comprised research and development and general and administrative activities as discussed above. As we continue to hire research and development personnel to accelerate our Molecular Universe AI-enhanced materials discovery and battery management, we expect our cash used in operating activities to increase before we start to generate any material cash inflows from our operations.
Previous wording
Net cash used in operating activities of $53.8 million for the nine months ended September 30, 2024 was primarily attributable to net loss of $65.6 million, as adjusted for stock-based compensation expense of $16.1 million, accretion income from marketable securities of $6.0 million, depreciation and amortization of $5.9 million, a gain on change in fair value of Sponsor Earn-Out liabilities of $3.3 million, other adjustments to net loss of $1.0 million, and a $0.1 million working capital inflow. The working capital inflow was primarily driven by a $2.8 million increase in accrued expenses and other liabilities, including due to the timing of payments for legal fees and equipment purchases, and a $1.3 million receipt for reimbursements of our expenses from a JDA partner. The working capital inflow was partially offset by a $3.7 million increase in prepaids and other assets. The increase in prepaids and other assets was primarily due to advance payments made for equipment purchases pursuant to our JDA agreements and prepaid costs related to software development. Additionally, the $0.4 million decrease in accounts payable was due to the timing of vendor payments, which also offset the working capital inflow.
Current wording
Net cash used in operating activities of $22.8 million for the three months ended March 31, 2025 was primarily attributable to net loss of $12.4 million, as adjusted for a gain on change in fair value of Sponsor Earn-Out liabilities of $7.9 million, accretion income from marketable securities of $0.8 million, stock-based compensation expense of $4.0 million, depreciation and amortization of $2.5 million, and a $8.0 million working capital outflow. The working capital outflow was driven primarily by a $5.3 million decrease in accrued expenses and other liabilities, a $1.7 million increase in prepaid and other assets, a $1.0 million decrease in operating lease liabilities, a $0.5 million increase in trade accounts receivables, and a $0.1 million decrease in accounts payable. These working capital outflows were partially offset by working capital inflows of a $0.7 million increase in right of use assets. The decrease in accrued expenses and other liabilities was primarily due to accruals for purchases of equipment for a JDA, accrued income taxes payable, and payroll related accruals. The increase in prepaids and other assets was primarily due to accrued receivables for services rendered to customers. The changes to operating lease liabilities and right of use assets were primarily driven by lease modifications. The changes in receivables and payables were driven by timing of receipts.
Previous wording
Net cash used in investing activities was $43.7 million for the nine months ended September 30, 2025, compared to net cash provided by investing activities of $34.2 million for the nine months ended September 30, 2024.
Current wording
Net cash provided by investing activities was $39.1 million for the three months ended March 31, 2026 compared to net cash used in investing activities of $49.8 million for the three months ended March 31, 2025. This increase in cash provided was primarily attributable to an $88.4 million increase in cash provided by the maturities of short-term investments, net of purchases in the current year period compared to the prior year period and $0.6 million of lower capital expenditures
Previous wording
See “Note 2 – Basis of Presentation” of our accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2025 included in this Quarterly Report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and their potential impact on our financial condition, results of operations and cash flows.
Current wording
See “Note 2 – Basis of Presentation” of our accompanying unaudited interim condensed consolidated financial statements for the three months ended March 31, 2026 included in this Quarterly Report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and their potential impact on our financial condition, results of operations and cash flows.
Previous wording
Our financial statements have been prepared in accordance with U.S. GAAP. In the preparation of these condensed consolidated financial statements, we are required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported expenses incurred during the reporting periods.
Current wording
Our financial statements have been prepared in accordance with U.S. GAAP. In the preparation of these unaudited interim condensed consolidated financial statements, we are required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited interim condensed financial statements, as well as the reported expenses incurred during the reporting periods.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
of the Sponsor Earn-Out liabilities is tied to SES’s stock price, continued volatility in the stock price or changes in the expected term. Refer to “Note 9 – Sponsor Earn-Out Liabilities” to the unaudited interim condensed consolidated financial statements for additional information.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
management. SES accelerates its pace of innovation by utilizing superintelligent AI across the spectrum of our business, from research and development, materials sourcing, cell design, engineering and manufacturing, to battery health and safety monitoring.