Enovix Corp
For the period ended Apr 5, 2026. Filed May 14, 2026.
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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.
Apr 5, 2026 · Filed May 14, 2026
ENVX$2.76+15.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-28; filed 2025-11-05.
0001828318-25-000310
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-05; filed 2026-05-14.
0001828318-26-000029
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 126 previous paragraphs and 91 current paragraphs.
29 unchanged; 27 reworded; 34 added; 68 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (34)
Current report
We design, develop and manufacture advanced lithium-ion batteries, including our proprietary silicon-anode architecture that enables higher energy density and performance relative to conventional battery cells, particularly in space-constrained devices such as smartphones, smart eyewear and next generation AI-enabled devices. We have expanded our suite of battery offerings through acquisitions and now also manufacture conventional lithium-ion batteries, primarily serving customers in the defense and industrial sectors.
Current report
To date, we have concentrated our operational efforts on researching, developing and commercializing the next generation technology behind our silicon-anode lithium-ion battery cell architecture. Most recently, we launched the AI-1 TM product platform, our Artificial Intelligence Class TM batteries for the next generation of mobile smartphones, smart eyewear and other AI-enabled devices that require significantly higher total energy storage and power to perform AI functions locally. We also serve customers in defense and industrial markets through our conventional and silicon-doped graphite battery products across a range of battery sizes and configurations optimized for high discharge rate applications, such as drones, subsea systems, and munitions defense systems.
Current report
Drones represent another priority area of focus, as we believe our products provide a strong competitive advantage for serving customers that are increasingly prioritizing higher energy density, extended flight time, and supply-chain diversification. In addition to the smartphone, smart eyewear and defense and industrial markets, we are pursuing deployment of our technology across other edge-AI applications, as well as computing and EVs, among others.
Current report
We currently lease several facilities, including our headquarters in Fremont, California, and our manufacturing facility in Malaysia. Our manufacturing operations are conducted in Malaysia and South Korea, supporting both our next-generation silicon-anode platform and our conventional lithium-ion battery products. We have transitioned our prior U.S. pilot manufacturing activities to Malaysia and continue to focus on manufacturing execution, operational efficiency, and capacity planning to support commercialization efforts. Our research and development activities are conducted primarily in California, India, and South Korea and are focused on cell architecture, materials integration, and manufacturing process optimization. We also recently opened a sales office in Shenzhen, China.
Current report
Advanced smartphone qualification and commercialization efforts. Advanced smartphone qualification is progressing with our lead smartphone Original Equipment Manufacturer (“OEM”) customer, Honor, and a second smartphone OEM. We have aligned with our lead customer on utilizing a silicon-specific evaluation framework for cycle-life testing that we believe better reflects real-world usage conditions for silicon-anode batteries than legacy testing methods. A second smartphone OEM customer has also aligned with the removal of select legacy requirements for silicon-anode batteries and we are in discussions on a replacement qualification framework expected to be consistent with the foregoing silicon-specific evaluation framework. These updated protocols increase testing rigor and duration rather than reduce qualification requirements. However, the ultimate timing on such qualification is outside of our control, and there can be no assurance as to when qualification will be completed.
Current report
Expanded customer engagement and commercial traction across end markets. Our engagement with customers continues to expand across AI-powered applications requiring high energy density in compact form factors. We have commenced early production and initial shipments of our smart eyewear platform, representing our first scaled commercial proof point for our 100% silicon-anode architecture.
Current report
We have also secured additional design wins in defense, drone, and industrial applications, with deployments expected to begin in 2027. Our global pipeline for products manufactured in South Korea has grown to more than $130 million as of the end of the first quarter of 2026, driven primarily by increased demand in drone applications, where demand for high-performance, non-China supply continues to outpace available Western supply. Our revenue remains concentrated in a small number of South Korean defense customers, and therefore the loss of any such customer would have a material impact on our revenues in the near term. Furthermore, this concentration also exposes us to risks specific to defense procurement, including Korean government budget cycles, procurement decisions, program cancellations or deferrals, and geopolitical factors affecting the Korean Peninsula and broader Northeast Asia region. Changes in South Korean defense priorities or reductions in procurement budgets for unmanned systems, drone platforms, subsea applications, or other programs utilizing our batteries could materially reduce demand from our primary customer base.
Current report
Advanced technology development roadmap. We produced our initial AI-2 engineering samples for smart eyewear applications incorporating EX-3M technology innovations, which are expected to deliver more than 20% improved volumetric energy density relative to our AI-1 product. Customer sampling is planned for the second quarter of 2026, with initial commitments from several leading technology companies. We anticipate that these EX-3M innovations will support performance gains for future smartphone batteries. To further support defense, drone, and industrial customers, we are also launching our “Mission Execution” platform (MX-1), a silicon-enhanced battery product line designed for high-performance applications, including aerial drones. We are targeting an MX-2 version of this line in 2027, with a goal of continuing to increase energy density.
Current report
Improved manufacturing readiness and execution. We are continuing to advance execution at Fab2 in Malaysia, achieving step-level yields of approximately 80% in Zone 1 dicing operations, with yields in most other production zones nearing or exceeding 90%. We have implemented a hybrid dicing configuration strategy combining laser and mechanical processes to improve throughput and support increasing production volumes as commercialization progresses. Fab2 has not yet produced smartphones at commercial volume, and the transition to high-volume manufacturing involves execution risks that remain unresolved. Capital expenditure payments are expected to increase materially in the future quarters primarily attributable to the settlement of previously deferred Fab2 equipment invoices and initial funding commitments associated with the South Korea capacity expansion initiative.
Current report
Delivered strong revenue growth and continued gross margin improvement. First quarter 2026 revenue of $7.6 million increased 49% year-over-year, driven primarily by defense and industrial shipments. Gross margin improved to 20.4% in the first quarter of 2026, up from 5.1% in the first quarter of 2025, representing our sixth consecutive quarter of positive gross profit. Gross margins are subject to fluctuation from period to period based on product mix, as shipments across defense, industrial, and consumer applications carry different margin profiles.
Current report
Maintained solid liquidity while investing in growth. Net cash used in operating activities was $33.1 million for the first quarter of 2026, compared to $16.9 million in the first quarter of 2025, reflecting investments in manufacturing scale-up, inventory build in South Korea, the timing of the semi-annual convertible note interest payment, and working capital movements. We ended the quarter with approximately $582.7 million in cash, cash equivalents, and investments to support ongoing qualification and commercialization activities.
Current report
Global Risks. Our manufacturing operations in Malaysia and South Korea, and our supply chain for raw materials and components, are subject to evolving trade policies, tariffs, export restrictions, and geopolitical tensions. We face risks related to significant changes in United States trade policy, including tariffs on products imported from China and other countries and potential retaliatory actions by those countries. Escalating geopolitical tensions, changes in tariff regimes affecting components sourced from or processed in China, or disruptions to our Malaysia-based manufacturing operations could increase our cost of production and adversely affect our margins and competitive position. Although we do not currently anticipate a material change in risk to our near-term outlook from the existing trade environment, the extent and future outcome of these global risks are highly unpredictable and uncertain and may adversely affect our future financial condition, results of operations, and cash flows.
Current report
In June 2022, we began to generate revenue from our Fab1 in Fremont, California. In October 2023, we acquired Routejade, a manufacturer of electrode coating and battery packs for customers worldwide. We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.
Current report
Cost of Revenue
Current report
Research and Development Expenses
Current report
Selling, General, and Administrative Expenses
Current report
Income Tax
Current report
Comparison of the fiscal quarter ended April 5, 2026 to the fiscal quarter ended March 30, 2025
Current report
Revenue for the fiscal quarter ended April 5, 2026 was $7.6 million, compared to $5.1 million for the fiscal quarter ended March 30, 2025. The increase in revenue of $2.5 million, or 49%, was principally due to increased product shipments from our South Korea facility to defense contractors, industrial customers, and consumer electronics customers.
Current report
As of April 5, 2026 and December 28, 2025, we had $4.6 million and $5.3 million of deferred revenue on our Condensed Consolidated Balance Sheets, respectively.
Current report
Cost of Revenue
Current report
Cost of revenue for the fiscal quarter ended April 5, 2026 was $6.0 million, compared to $4.8 million for the fiscal quarter ended March 30, 2025. The increase in cost of revenue of $1.2 million, or 25%, was primarily attributable to higher production volume during the fiscal quarter ended April 5, 2026.
Current report
Research and Development Expenses
Current report
Research and development (“R&D”) expenses during the fiscal quarter ended April 5, 2026 were $26.5 million, compared to $25.9 million during the fiscal quarter ended March 30, 2025. The increase of $0.6 million, or 2%, was primarily attributable to higher depreciation expense of $0.8 million related to the assets placed into service for Fab2 and assets acquired from SolarEdge Technology Korea in the second fiscal quarter of 2025, as well as higher materials and tooling expenses of $1.0 million to support the build-out of Fab2. These increases were offset by a decrease of $1.0 million in stock-based compensation expense.
Current report
Selling, General and Administrative Expenses
Current report
Selling, general and administrative expenses for the fiscal quarter ended April 5, 2026 were $18.9 million, compared to $16.9 million for the fiscal quarter ended March 30, 2025. The increase of $2.0 million, or 12%, was primarily attributable to a $1.2 million increase of stock-based compensation expense, $0.6 million in professional fees and higher depreciation expense of $0.4 million related to the assets acquired from SolarEdge Technology Korea in the second fiscal quarter of 2025. These increases were partially offset by a one-time property tax refund of $0.6 million resulted from a county audit concluded during fiscal quarter ended April 5, 2026.
Current report
For the fiscal quarter ended April 5, 2026, the change in fair value of common stock warrants of $6.4 million was mainly attributable to a decrease in the fair value of the 5,500,000 Private Placement Warrants (as defined in Note 3 “Fair Value Measurement” of our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q). For the fiscal quarter ended March 30, 2025, the change in fair value of common stock warrants of $15.8 million was attributable to a decrease in the fair value of the 5,500,000 Private Placement Warrants.
Current report
Interest income for fiscal quarter ended April 5, 2026 was $5.8 million, compared to $2.4 million during the fiscal quarter ended March 30, 2025. The increase of $3.3 million, or 137%, was primarily attributable to higher average cash balance and yields earned on short-term and long-term investments.
Current report
Other Income, Net
Current report
Other income, net for the fiscal quarter ended April 5, 2026 was $0.3 million, which primarily consisted of foreign currency loss resulting from the strengthening of Malaysian ringgit as compared to the U.S. dollar, offset by a weakening of the South Korean won.
Current report
We have incurred operating losses and negative cash flows from operations since inception through April 5, 2026 and expect to continue to incur operating losses for the foreseeable future. As of April 5, 2026, we had cash, cash equivalents, restricted cash, and short-term and long-term investments of $582.7 million, working capital of $507.6 million and an accumulated deficit of $1.02 billion.
Current report
Net cash used in financing activities was $2.5 million for the fiscal quarter ended April 5, 2026, which primarily consisted of $1.7 million of payroll tax payments for shares withheld upon vesting of restricted stock units and $0.7 million used to fund the purchase of additional shares of Routejade from a minority shareholder.
Current report
The lease for our Fab2 manufacturing facility was originally scheduled to expire in July 2026, however, in April 2026, we signed a one-year renewal extending the expiration to July 31, 2027. The monthly rental payments under the terms of the lease are approximately RM962,267 (approximately $0.2 million U.S. dollars per month). See Note 12 “Subsequent Events” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further details regarding the lease renewal. The Company is evaluating its alternatives, including facility purchase, alternative manufacturing site options and further extension of the lease to support long-term operational continuity and future growth.
Current report
Actual results may differ materially from these estimates. These estimates and assumptions include but are not limited to: valuation of the Private Placement Warrants, the impairment of long-lived assets, the net realizable value of inventory, stock-based compensation relating to performance-based restricted stock units (“PRSUs”) and income taxes. We believe that application of these critical accounting estimates involves our subjective judgments and assumptions, which have had, or are reasonably likely to have, a material impact on our condensed consolidated financial statement.
Removed paragraphs (68)
Previous report
We design, develop and have started to commercially manufacture an advanced silicon-anode lithium-ion battery using our proprietary cell architecture that increases energy density and maintains high cycle life. This enables us to use silicon as the only active lithium cycling material in the anode whereas industry incumbents have historically combined only a modest amount of silicon with graphite. We have applied an equally innovative approach to develop proprietary roll-to-stack production tools for existing lithium-ion battery manufacturing lines and increase megawatt hour capacity. Our silicon anode battery architecture allows lithium-ion batteries to be produced smaller and more efficiently at scale than current alternatives. With our acquisition of Routejade, Inc. in 2023, we also offer conventional lithium-ion batteries, which expands our suite of battery offerings to our customers. In April 2025, we acquired assets from SolarEdge located in close proximity to Routejade in South Korea, which expands our manufacturing facilities and this acquisition is expected to help position us to meet growing demand in the defense industry.
Previous report
Enovix is headquartered in Silicon Valley, a region of California, with offices and facilities in Asia.
Previous report
As we are a growing global company, we are closely monitoring evolving changes in the macroeconomic environment, including inflationary pressures, tariffs, interest rates, and market volatility, that may have potential impacts to our operations.
Previous report
Q3 2025 Highlights:
Previous report
Following is a summary of the activities in the third quarter of 2025:
Previous report
•Revenue: Our revenue for the fiscal quarter ended September 28, 2025 was $8.0 million. The $3.7 million, or 85%, increase compared to the prior year’s fiscal quarter ended September 29, 2024 was primarily attributable to strong customer demand for our defense products.
Previous report
•Independent Validation: AI-1™ smartphone battery performance was validated by an independent testing firm as having the highest energy-density reported for a smartphone battery.
Previous report
•Commercial Programs: For smartphones, our lead customer will perform additional lifecycle testing following our design revision, which reflects collaborative, multi-year partnership typical of first-of-its-kind architecture.
Previous report
We continued to expand engagement across the smart eyewear, an emerging category that leverages our smartphone-level energy density in compact form factors. We delivered over 1,000 AI-1™ battery packs to our lead customer and samples to nine other unique smart eyewear original equipment manufacturers (“OEMs”) and Original Design Manufacturers (“ODMs”), some of which are expected to have products launched in 2026.
Previous report
In defense and industrial markets, our South Korea operations have shipped over $20 million of product for the fiscal year-to-date ended September 28, 2025 to our customers, including two of South Korea’s major three military contractors.
Previous report
•Manufacturing and Operations: During the fiscal quarter ended September 28, 2025, we achieved yield improvements across equipment zones at our production facility in Malaysia (“Fab2”). Capacity in our Zone 4 (Formation) increased and now exceeds HVM requirements for an additional line.
Previous report
In South Korea, we integrated the facilities and assets acquired in the second quarter of 2025, which expanded available floor space and added coating equipment capacity. We commenced building our first South Korea based cell-manufacturing a dedicated line for our 100% active-silicon-anode batteries.
Previous report
•Warrant Dividend: In July 2025, we declared and issued a special Warrant Dividends to shareholders of record of our common stock as of the close of business on July 17, 2025 (the “Record Date”), and the holders of our 2028 Convertible Senior Notes as of the Record Date. A total of 26,526,344 Warrants were exercised for net proceeds of $224.2 million after deducting commissions and offering expenses. We intend to use the proceeds from the Warrant exercises to support scale-up at Fab2 in Malaysia and for general corporate purposes. Please see Note 10 “Treasury Stock, Warrant Dividend and Warrants” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous report
•Convertible Senior Notes Due 2030: In September 2025, we issued $360.0 million in our 2030 Convertible Senior Notes. The net proceeds from the issuance of 2030 Convertible Senior Notes were $348.6 million, after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us. We used $45.3 million of the net proceeds from the offering to pay the cost of the capped call transactions related to the 2030 Convertible Senior Notes. We intend to use the remaining net proceeds from the offering of the 2030 Convertible Senior Note for general corporate purposes, which may include to fund a portion of the purchase price for potential acquisitions. Please see Note 8 “Borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous report
•Share Repurchase: During Q3 2025, we purchased 5,437,556 shares of our common stock for $58.4 million pursuant to the Repurchase Plan. Please see Note 10 “Treasury Stock, Warrant Dividend and Warrants” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous report
Market Focus and Market Expansion
Previous report
We are focused on five strategic market sectors: Smartphone, Internet of Things (“IoT”), Computing, Defense and Electric Vehicles (“EVs”).
Previous report
We prioritize large, high-value markets, such as smartphones and smart eyewear, where the need for higher energy density commands a premium. We believe that the surge in AI-powered devices has validated our strategy and driven significant pull for our products. We believe that our go-to-market strategy positions us on an expedient path to profitability while maintaining a competitive edge in innovation.
Previous report
Commercialization
Previous report
Our commercialization strategy involves identifying customer requirements and determining where our battery architecture will offer the greatest value, and pursuing customer engagements that meet our reference design strategy — to partner with leading suppliers and establish our AI-1™ battery products as the baseline design for hardware platforms, enabling broader adoption across multiple device makers that follow the same reference architecture. We continue to be actively engaged with other smartphone OEMs to ensure a rapid ramp once we are established in the market.
Previous report
In smart eyewear, we continue to make strong progress across multiple OEM programs worldwide. Under our supply agreement with a leading Silicon Valley customer, we delivered over 1,000 battery packs from our AI-1™ platform, which are now undergoing customer qualification. Several additional OEMs have initiated product testing and validation of our AI-1™ augmented reality (“AR”) battery, while a leading AR processor supplier has received samples as part of a broader ecosystem collaboration to enable next-generation smart eyewear.
Previous report
Product Development
Previous report
In the second quarter of 2025, we finalized and launched the AI-1™ platform with the AI-1™ battery for smartphones achieving an energy density level superior to any commercially available alternative. The AI-1™ product platform incorporates elements of our EX-1M and EX-2M technology nodes. We believe the AI-1™ battery architecture is purpose-built for AI-enabled smartphones and wearables, combining energy density, strong safety performances and compatibility with high-speed automated assembly. Our product development strategy is in our estimation tightly aligned with the goals of meeting the market needs of higher energy density, cycle life, and fast charge while maintaining safety.
Previous report
We advanced our own electrochemistry with the AI-1™ smartphone battery, which incorporates elements of our EX-1M and EX-2M silicon battery technology nodes, with greater energy density and fast charge potential. To further extend what we believe is our established leadership position, we have finalized the design of our next battery technology node, which will unlock further improvements in energy density over our previous technologies. During the third quarter of 2025, AI-1™ smartphone battery performance was validated by an independent testing firm as having the highest energy-density battery reported for a smartphone battery.
Previous report
Access to Capital
Previous report
Regulatory Landscape
Previous report
We operate in an industry that is subject to many established consumer safety and environmental regulations, which have generally become more stringent over time. Additional regulations, if adopted, could result in additional operating costs associated with compliance.
Previous report
We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Our revenue consists of product revenue, resulting from the sale of lithium-ion batteries. and battery pack products (“Product Revenue”), and service revenue, resulting from payments received from our customers based on executed engineering revenue contracts for the development of lithium-ion battery technology (“Service Revenue”). We did not recognize any Service Revenue during either of the fiscal quarters ended September 28, 2025 and September 29, 2024.
Previous report
We are expanding our personnel headcount to support the ramping up of commercial manufacturing. Accordingly, we expect our selling, general and administrative expenses to continue to increase in the near term.
Previous report
Income Tax Expense (Benefit)
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Comparison of Fiscal Quarter Ended September 28, 2025 to Fiscal Prior Year's Quarter Ended September 29, 2024
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N/M – Not meaningful
Previous report
Revenue for the fiscal quarter ended September 28, 2025 was $8.0 million, compared to $4.3 million of revenue for the fiscal quarter ended September 29, 2024. Our revenues were primarily generated from our product shipments to South Korea defense contractors and consumer electronics customers. The increase in revenue of $3.7 million, or 85% was primarily attributable to an increase in our sales to South Korea defense contractors. Of the total revenue recognized for the fiscal quarters ended September 28, 2025 and September 29, 2024, $5.4 million and $1.4 million of revenue, respectively, resulted from sales to one South Korean defense contractor.
Previous report
Cost of revenue for the fiscal quarter ended September 28, 2025 was $6.6 million, compared to $5.0 million during the fiscal quarter ended September 29, 2024. The increase in cost of revenue of $1.6 million, or 33%, was primarily attributable to an increase in production cost resulted from products mixed sold during the current fiscal quarter as compared to the same period last fiscal year.
Previous report
Research and development (“R&D”) expenses for the fiscal quarter ended September 28, 2025 were $28.2 million, compared to $24.2 million during the fiscal quarter ended September 29, 2024. The increase of $4.0 million, or 16%, was primarily attributable to a $0.6 million net increase in salaries, employee benefits and stock-based compensation expenses primarily due to lower headcount in the U.S offset by higher headcount in other regions, a $2.6 million increase in depreciation, a $0.9 million increase in equipment repair and maintenance and increases in other R&D expenses. These increases were partially offset by lower common expenses allocated to R&D and other miscellaneous expenses.
Previous report
Selling, general and administrative expenses for the fiscal quarter ended September 28, 2025 were $20.2 million, compared to $20.7 million during the fiscal quarter ended September 29, 2024. The decrease of $0.6 million, or 3%, was primarily attributable to a $4.9 million net decrease in stock-based compensation expenses, which was mainly due to lower headcount in U.S. resulted from the 2024 Restructuring Plan last fiscal year, which partially offset by increases in professional service fees of $1.7 million, which mainly due to the shareholder’s suit, one-time Warrant Dividend costs of $1.4 million, and other miscellaneous expenses.
Previous report
Restructuring Cost
Previous report
In May 2024, we initiated the 2024 Restructuring Plan to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia. For the quarter ended September 29, 2024, we recorded additional pre-tax restructuring charges of $3.7 million, which primarily consisted of non-cash charges of $3.1 million of loss on disposals of Fab1 long-lived assets in Fremont and $0.2 million of other charges. There was no restructuring cost for the fiscal quarter ended September 28, 2025.
Previous report
Other income (loss), net
Previous report
Other income, net for the fiscal quarter ended September 28, 2025 was $0.1 million, compared to $2.2 million of other loss, net for the fiscal quarter ended September 29, 2024. The change was primarily related to the strength of U.S dollars against other foreign currencies in the fiscal quarter ended September 28, 2025 as compared to the same quarter of last year.
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Reworded paragraphs (27)
Previous wording
The following discussion and analysis provide information that the management of Enovix Corporation (referred as to “we,” “us,” “our” and “Enovix”) believes is relevant to an assessment and understanding of Enovix’s condensed consolidated results of operations and financial condition as of September 28, 2025 and for the fiscal quarter and fiscal year-to-date ended September 28, 2025 and should be read together with the condensed consolidated financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contain forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.
Current wording
The following discussion and analysis of financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements based upon our current expectations, estimates and projections that involve risks and uncertainties. Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
We generate revenue from the sale of (a) lithium-ion batteries and battery pack products (“Product Revenue”) and (b) engineering revenue contracts (“Service Revenue”) for the development of lithium-ion battery technology. Our performance and future success depend on several factors that present significant opportunities, but also pose risks and challenges as described in the section titled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
We generate revenue from the sale of batteries and battery pack products (“Product Revenue”). Our performance and future success depend on several factors that present significant opportunities, but also pose risks and challenges as described in the section titled “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
Previous wording
Assuming we experience no significant delays in the research and development and manufacture of our battery nor any deterioration in capital efficiency, we believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents, investments and future debt financings, projected revenues and access to other public or private equity offerings and potential strategic arrangements.
Current wording
Access to Capital. Assuming we do not experience any significant delays in the research and development and manufacturing of our products or any deterioration in our capital efficiency, we believe we will meet our longer-term expected future cash requirements and obligations. We believe we will be able to do this through a combination of available cash, cash equivalents, investments and future debt financings, projected revenues and access to other public or private equity offerings and potential strategic arrangements.
Previous wording
Our Product Revenue is primarily generated from selling lithium-ion batteries or battery packs. Product Revenue is recognized once we have satisfied the performance obligations as defined in the sales agreement, which is generally satisfied upon transfer of control of goods. Control is transferred upon delivery for our products. For certain customized products with customer acceptance criteria specified in the sales agreement, the performance obligations are generally satisfied upon our customer’s acceptance. Payment terms can vary depending on the contract and it is generally required within 90 days or less from the delivery date or the acceptance date of our product. The amount of revenue recognized reflects the consideration for the product sold.
Current wording
Our revenue consists of product revenue, resulting from the sale of lithium-ion batteries and battery pack products (“Product Revenue”) to customers. Product Revenue is recognized once we have satisfied the performance obligations as defined in the sales agreement, which is generally satisfied upon transfer of control of goods. Control is transferred upon delivery of the product. For certain customized products with customer acceptance criteria specified in the sales agreement, the performance obligations are generally satisfied upon our customer’s acceptance. Payment terms can vary depending on the contract and it is generally required within 90 days or less from the delivery date or the acceptance date of our product. The amount of revenue recognized reflects the consideration for the product sold.
Previous wording
Cost of revenue includes materials, labor, depreciation and amortization expense, freight costs and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries and benefits, and stock-based compensation. We anticipate that cost of revenue will continue to increase as we optimize and bring-up our production line.
Current wording
Cost of revenue includes materials, labor, depreciation and amortization expense, 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 optimize and expand our production line.
Previous wording
Research and development expenses consist of engineering services, allocated facilities costs, depreciation, development expenses, materials, labor and stock-based compensation related primarily to our (i) technology development, (ii) design, construction, and testing of preproduction prototypes and models, and (iii) certain costs related to the design, construction and operation of our pilot plant that are not of a scale economically feasible to us for commercial production. Research and development costs are expensed as incurred.
Current wording
Research and development expenses consist of engineering services, allocated facilities costs, depreciation, development expenses, materials, labor and stock-based compensation related primarily to our (i) technology development, and (ii) design, construction, and testing of preproduction prototypes and models. Research and development costs are expensed as incurred.
Previous wording
To date, research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering and manufacturing facility, and materials and supplies to support the product development and process engineering efforts. As we ramp up our engineering operations to complete the development of batteries and required process engineering to meet customer specifications, we anticipate that research and development expenses will continue to increase for the foreseeable future as we expand hiring of scientists, engineers and technicians and continue to invest in additional plant and equipment for product development, building prototypes and testing of batteries. We have research and development teams in the U.S., Malaysia, South Korea and India.
Current wording
To date, research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians, as well as costs associated with the expansion and ramp up of our engineering and manufacturing facility, materials and supplies to support the product development and process engineering efforts. As we ramp up our engineering operations to complete the development of batteries and required process engineering to meet customer specifications, we anticipate that research and development expenses will continue to increase as we expand hiring of scientists, engineers and technicians and continue to invest in additional plant and equipment for product development, building prototypes and testing of batteries. We have a research and development center in India to focus on developing machine learning algorithms, battery modeling, material screening and electrolyte optimization. We also have a research and development team in Malaysia.
Previous wording
Other income and expense primarily consists of dividend income, interest income, interest expense, foreign currency transaction gain or loss, one-time income resulting from import duty forgiveness, one-time gain from bargain purchase of assets resulting from a business acquisition, and fair value adjustments for outstanding common stock warrants.
Current wording
Other income and expense primarily consists of dividend income, interest income, interest expense, foreign currency transaction gain or loss and fair value adjustments for outstanding common stock warrants.
Previous wording
The changes in fair value of common stock warrants of $1.9 million and $29.9 million for the fiscal quarters ended September 28, 2025 and September 29, 2024, respectively, were attributable to the decrease in the fair value of the outstanding Private Placement Warrants. The decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price for each respective quarter. In addition, the exercise price of the Private Placement Warrants was adjusted to $10.66 per share from $11.50 per share in connection with the Warrants issued during the fiscal quarter ended September 28, 2025 in connection with the Warrant Dividend. For more information on the Warrants and related matters, please see Note 10 “Treasury Stock, Warrant Dividend and Warrants” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Current wording
The decrease in fair value of the Private Placement Warrants in each of these periods was primarily due to a decrease in our common stock price during the respective fiscal quarter.
Previous wording
Interest expense for the fiscal quarter ended September 28, 2025 was $11.8 million, compared to $1.7 million during the fiscal quarter ended September 29, 2024. The increase of $10.0 million or 585% was attributable to one-time charge of $9.2 million for the rights with the Warrants issued to the holders of 2028 Convertible Senior Notes. In addition, there was a $0.8 million increase in interest expense resulting from the issuance of the 2030 Convertible Senior Notes during the fiscal quarter ended September 28, 2025.
Current wording
Interest expense for the fiscal quarter ended April 5, 2026 was $7.0 million, compared to $1.7 million for the fiscal quarter ended March 30, 2025. The increase of $5.3 million, or 308%, was primarily attributable to the issuance of additional convertible senior notes in the third fiscal quarter of 2025.
Previous wording
Other income, net for the fiscal year-to-date ended September 28, 2025 was $1.5 million, compared to $1.5 million of other loss, net for the fiscal year-to-date ended September 29, 2024. The increase of $3.0 million was primarily due to the fact that we had a one-time import duty forgiveness of $2.4 million in the fiscal year-to-date ended September 28,
Current wording
Other income, net for the fiscal quarter ended March 30, 2025 was $2.4 million, which primarily consists of a one-time import duty forgiveness of $2.4 million.
Previous wording
Income tax benefit for the fiscal year-to-date ended September 28, 2025 was $1.4 million, compared to $2.5 million for the fiscal year-to-date ended September 29, 2024. The tax benefit was calculated based on the estimated annualized effective tax rate. The decrease of $1.1 million or 43% in tax benefit was primarily attributable to lower income tax benefit on the losses generated from certain foreign jurisdictions.
Current wording
Income tax benefit for the fiscal quarter ended April 5, 2026 was $0.1 million compared to an income tax benefit of $0.2 million for fiscal quarter ended March 30, 2025. The tax benefit was calculated based on the estimated annual effective tax rate. The decrease of $0.1 million in tax benefit was primarily attributable to lower income tax benefit on the losses generated from certain foreign jurisdictions.
Previous wording
We use cash to fund operations, meet working capital requirements and fund our capital expenditures. For the remainder of fiscal year 2025, we expect that our spending in cost of revenues and operating expenses will continue to increase as we ramp up our operations.
Current wording
We use cash to fund operations, meet working capital requirements and fund our capital expenditures. For the remainder of fiscal year 2026, we expect that our cost of revenues and operating expenses will continue to increase as we ramp up our Fab2 operations.
Previous wording
For the fiscal year-to-date ended September 28, 2025, we used $17.2 million of our cash to fund our acquisitions of property and equipment and $10.0 million of payment for an acquisition of battery cell manufacturing assets in South Korea. We expect to increase our property and equipment purchases in the near future to support the build-out of our manufacturing facilities and our battery manufacturing production. For more information regarding our purchase commitments, please see the contractual obligations and commitments section below.
Current wording
For the fiscal year-to-date ended April 5, 2026, we used $3.2 million of our cash to fund our acquisitions of property and equipment. We will continue to increase our property and equipment purchases in the near future to support the build-out of our manufacturing facilities and our battery manufacturing production. For more information regarding our purchase commitments, please see the contractual obligations and commitments section below.
Previous wording
We have incurred operating losses and negative cash flows from operations since inception through September 28, 2025 and expect to incur operating losses in the near future. Based on the anticipated spending and timing of expenditures, we currently expect that our cash will be sufficient to meet our funding requirements over the next twelve months from the date this Quarterly Report on Form 10-Q is filed. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and future debt financings, projected revenues and access to other public or private equity offerings as well as potential strategic arrangements. We have made our estimates on historical experience and various other relevant factors and we believe that they are reasonable. Actual results may differ from our estimates and we could utilize our available capital resources sooner than we expect.
Current wording
Based on the anticipated spending and timing of expenditures to support operational development and market expansion, we currently expect that our cash will be sufficient to meet our funding requirements over the next twelve months from the date this Quarterly Report on Form 10-Q is filed. We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents, operating cash flow improvement as revenue scales, and access to debt or equity capital markets. As of April 5, 2026, $76.6 million remained available under the Company’s share repurchase program and the Company intends to evaluate repurchase activity on an opportunistic basis while prioritizing liquidity to support operational growth. We have made our estimates based on historical experience and various other relevant factors and we believe that they are reasonable. Actual results may differ from our estimates, and we could utilize our available capital resources sooner than we expect.
Previous wording
Fiscal Quarter Ended September 28, 2025 Compared to Prior Year Fiscal Quarter Ended September 29, 2024
Current wording
Fiscal Quarter Ended April 5, 2026 Compared to Prior Fiscal Quarter Ended March 30, 2025
Previous wording
Our cash flows used in operating activities to date have been primarily comprised of operating expenses. We continue to increase hiring for employees and materials in supporting the ramping up of commercial manufacturing. We expect our cash used in operating activities to increase before we start to generate any material cash inflows from commercially manufacturing and selling our batteries.
Current wording
Our cash flows used in operating activities to date have been primarily comprised of operating expenses as we continue to ramp up our Fab2 operations. We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from commercially manufacturing and selling our batteries.
Previous wording
Net cash used in operating activities was $92.7 million for the fiscal year-to-date ended September 29, 2024. Net cash used in operating activities consisted of net loss of $185.1 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include stock-based compensation expense of $48.6 million, depreciation and amortization expense, net of accretion of $37.4 million, impairment and disposals of Fab1 long-lived assets of $38.2 million, and the change in fair value of Private Placement Warrants of $17.4 million.
Current wording
Net cash used in operating activities was $33.1 million for the fiscal quarter ended April 5, 2026. Net cash used in operating activities consisted of a net loss of $38.3 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of the Private Placement Warrants of $6.4 million, stock-based compensation expense of $11.8 million and depreciation and amortization expense, net of accretion of $9.4 million.
Previous wording
Net cash used in operating activities was $68.3 million for the fiscal year-to-date ended September 28, 2025. Net cash used in operating activities consisted of net loss of $121.6 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include stock-based compensation expense of $38.0 million, depreciation and amortization expense, net of accretion of $26.7 million, non-cash interest expense of $9.2 million related to the fair value adjustment related to the Warrants issued in July 2025 in connection with the Warrant Dividend, the change in fair value of the Private Placement Warrants of $11.8 million, and gain on bargain purchase of assets of $4.8 million resulted from the acquisition of assets in Korea.
Current wording
Net cash used in operating activities was $16.9 million for the fiscal quarter ended March 30, 2025. Net cash used in operating activities consisted of a net loss of $23.5 million, adjusted for non-cash items and the effect of changes in working capital. Non-cash adjustments primarily include the change in fair value of Private Placement Warrants of $15.8 million, stock-based compensation expense of $12.0 million and depreciation and amortization expense, net of accretion on investments of $8.4 million.
Previous wording
Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment, as well as short-term investment activities. We expect the costs to acquire property and equipment to increase in the future as we continue to build-out and develop our battery manufacturing production capabilities in Malaysia, including our Fab2 facility in Malaysia, and in South Korea. Net cash used in investment activities was $339.2 million for the fiscal year-to-date ended September 28, 2025, which primarily consisted of $17.2 million of equipment purchases, $370.1 million of short-term investment purchases and $10.0 million of payment for an acquisition of assets in South Korea, partially offset by maturities of $58.1 million of short-term investments.
Current wording
Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment, as well as purchases of short-term and long-term investments. We expect the costs to acquire property and equipment will increase in the future as we continue to build-out our Fab2 facility, evaluate additional or alternative manufacturing capacity options and develop our battery manufacturing production lines in Malaysia.
Previous wording
Net cash provided by investing activities for the fiscal year-to-date ended September 29, 2024 was $15.0 million, which primarily consisted of maturities of $106.6 million of short-term investments, partially offset by $59.8 million of equipment purchases and $31.8 million of short-term investment purchases.
Current wording
Net cash provided by investment activities was $18.3 million for the fiscal quarter ended April 5, 2026, which primarily consisted of maturities of $125.0 million of investments, partially offset by $3.2 million of equipment purchases and $103.5 million of investment purchases.
Previous wording
Net cash provided by financing activities was $44.2 million for the fiscal year-to-date ended September 29, 2024, which primarily consisted of $4.6 million of gross proceeds from the borrowings of loans, $44.3 million of proceeds from the issuance of our common stock through an ATM offering and proceeds from exercise of stock options to purchase our common stock and $1.1 million of proceeds from our ESPP to purchase our common stock, partially offset by $5.6 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Current wording
Net cash used in financing activities was $1.5 million for the fiscal quarter ended March 30, 2025, which primarily consisted of $0.5 million of transaction costs related to a secondary offering in the fourth quarter of 2024, and $1.8 million of payroll tax payments for shares withheld upon vesting of restricted stock units, partially offset by $0.8 million of proceeds from the exercise of stock options to purchase our common stock.
Previous wording
As of September 28, 2025, we had $172.5 million aggregate principal amount of 3.0% 2028 Convertible Senior Notes outstanding, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased. During the fiscal quarter ended September 28, 2025, we issued $360.0 million aggregate principal amount of 2030 Convertible Senior Notes with an interest rate of 4.75%, which will mature on September 15, 2030.
Current wording
As of April 5, 2026, we had $172.5 million aggregate principal amount of the 2028 Convertible Senior Notes outstanding with an interest rate of 3.0%, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased, and $360.0 million aggregate principal amount of the 2030 Convertible Senior Notes outstanding with an interest rate of 4.75%, which will mature on September 15, 2030 unless earlier converted, redeemed or repurchased. Please see Note 6 “Borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous wording
We lease our headquarters in Fremont, California, our Fab2 production facility in Penang, Malaysia, and offices in India and China. For the lease payment schedule, please see Note 7 “Leases” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.
Current wording
We lease our headquarters in Fremont, California and Malaysia, and offices in the Asia Pacific region. For the lease payment schedule, please see Note 5 “Leases” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q.
Previous wording
We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice. Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. As of September 28, 2025, our commitments included approximately $6.6 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business. For contractual obligations, please See Note 9 “Commitments and Contingencies” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Current wording
We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice. Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. As of April 5, 2026, our commitments included approximately $4.0 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business. For contractual obligations, please See Note 7 “Commitments and Contingencies” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report on Form 10-Q for further information.
Previous wording
The preparation of our condensed consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities in our consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. These estimates and assumptions include but are not limited to: depreciable lives for property and equipment and intangible assets, valuation for assets acquired in business acquisition, valuation for inventory, valuation allowance on deferred tax assets, assumptions used in income tax provisions, valuation of goodwill and intangible assets, assumptions used in stock-based compensation, assumptions used in the calculation of earnings per share related to the Warrants as warrant dividend, incremental borrowing rate for operating right-of-use assets and lease liabilities and valuation of common stock warrants. Certain accounting policies have a more significant impact on our condensed consolidated financial statements due to the size of the financial statement elements and prevalence of their application.
Current wording
The preparation of our condensed consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities in our consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
Previous wording
There have been no material changes to our critical accounting policies and estimates disclosed in Part II, Item 7 of the Annual Report on Form 10-K, except for the additions to the accounting policies on investments as noted in Note 2 “Summary of Significant Accounting Policies” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
There have been no material changes to our critical accounting policies and estimates disclosed in Part II, Item 7 of our Annual Report on Form 10-K, except for the additions to the accounting policies on investments as noted in Note 2 “Summary of Significant Accounting Policies” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash used by investing activities for the fiscal quarter ended March 30, 2025 was $64.4 million, which primarily consisted of $6.3 million of equipment purchases and $58.1 million of short-term investment purchases.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table sets forth our condensed consolidated operating results for the periods presented below (in thousands):
Previous report — wording carried elsewhere
Change in Fair Value of Common Stock Warrants