Amprius Technologies, Inc. 2026 Q2 Earnings Call

Sir, please proceed. Welcome, everyone, and thank you for joining us this morning.

I'm pleased to report that Amprius continues to experience robust demand for our energy-dense silicon anode lithium-ion batteries. In the second quarter of 2026, we achieved another record revenue as we show on slide three. We believe the characteristics of our cells make them a particularly strong fit for one of the fastest-growing markets in the world, battery-powered unmanned aerial vehicles, UAVs, also known as drones. Our second-generation SiCore silicon anode battery continues to gain broad adoption for drones and other applications. Given the strong quarter and promising new business, we have the confidence to increase our 2026 revenue forecast for the second consecutive quarter. Anyone who reads the news understands that low-cost drones are playing an asymmetric role in military conflicts around the world, changing the nature of modern warfare.

As Barron's magazine recently reported, inexpensive drones are, quote, "Upending the defense sector." Unquote. We believe that this has been made possible in no small measure by the availability of high-performance batteries like those produced by Amprius. As you are likely aware, the Trump administration's proposed fiscal 2027 defense budget calls for more than $50 billion in outlays for the Defense Autonomous Warfare Group, an arm of the Department of War focused on drones and related hardware. The specific ask is for 24,000% year-over-year increase. While the U.S. Congress has yet to pass the 2027 spending authorization, and the actual budget might be smaller than the original request, it is nonetheless clear that the Pentagon will be making a major and growing outlay for autonomous capabilities for years to come. Our current contract with the Defense Innovation Unit gives us a front-row seat in this arena.

This is good news for Amprius, our customers and partners, and for our shareholders. While we expect that the budget details will be sorted out in the months ahead, there are other positive signs from the defense sector for Amprius. For instance, the Department of War's Drone Dominance program has invited 19 drone manufacturers to a competitive demonstration event at Fort Carson, Colorado, later this month. Half of the participants are using Amprius cells, and we have had at least initial conversations with the rest. The Department of War has said that at the completion of the Colorado event, it will place orders for 60,000 drones from the top performers. This is one more indication that the opportunity in military UAVs is in its early stages.

You may recall that our contract with the Defense Innovation Unit to develop and scale National Defense Authorization Act, NDAA, compliant silicon anode battery cells was increased for a third time in the March quarter and now totals $18.1 million. This funding supports expansion of a pilot line at our headquarters in Fremont, California. I'm happy to report that we now have received nearly half of the equipment required for the pilot line, which is undergoing installation. The remaining equipment is scheduled to arrive later this month and in September, with production expected to begin in December 2026. Our opportunity in military drones goes beyond U.S. borders. I'm happy to report that we've received a $24 million order from a new European customer, a drone manufacturer that uses our SA 124 SiCore cylindrical cells.

We started to deliver our batteries to this customer in Q2, and will continue to do so for the next three quarters. We're excited about this opportunity and expect to have more to talk about on this topic in the months ahead. I also want to report some recent news from our customer, Redwire, a leading aerospace and defense technology company providing space infrastructure, autonomous systems, and mission-critical solutions for the commercial, civil, and national security customers worldwide. Redwire first purchased our high energy density batteries in 2024. We're happy to see that their demand is growing. Redwire recently announced more than $40 million in purchase orders from the U.S. Marine Corps for the Stalker Block 30, a Group 2 drone designed for long-range reconnaissance. Stalker excels in missions where long duration is critical, and that's exactly what our SiCore cells enable. We look forward to Redwire's continued success.

While we are excited about the rapid adoption of drones in the defense industry, we also continue to see substantial opportunities for commercial drones. In May, you may remember, we announced an agreement to provide high-density silicon anode cells to Matternet, the world's only FAA-type certified drone delivery platform. Amprius' silicon anode cells deliver up to twice the energy density of conventional graphite-based batteries, a critical advantage in aviation, where low battery weight and high energy density directly improve aircraft range, payload, and economics. Drones, both military and commercial, are a big part of the Amprius story, but they are not our only strategically important end market. Earlier this year, we announced a $21 million order from a premier electric mobility customer in China to power a suite of light electric vehicles, including scooters, three-wheelers, and motorcycles. Today, I'm excited to tell you about a new e-mobility customer win.

We have signed a three-year contract with Stark Future, a Barcelona-based premium electric motorcycle manufacturer. Stark's bikes are impressive, with cutting-edge technology, world-class design, and amazing engineering. We showcased one of their bikes at our CES booth in January 2026. We expect revenues from our relationship to Stark to be at least $100 million through 2029, with shipments expected to start early next year. Let's turn to slide four and discuss our go-to-market strategy. A little less than half of our sales ship directly to end-use customers, companies that sell drones for various applications, small electric vehicles, and companies in the satellite value stream. We have more than 500 direct customers, and this figure grows every quarter. The other portion of our purchase orders come from pack partners, companies who buy our cells and package them together with appropriate electronics and sometimes a battery management system.

These modules and packs are then sold to end-use customers. Our pack partner program allows us to expand our reach and simplifies customer relationships for many end-market applications. Today, we list nine pack partners on our website, and more will be added over time. This program is a light lift for our sales team and allows us to scale without adding direct sales headcount. We expect this flywheel effect to allow us to continue strong growth through this rapidly expanding channel. Let's turn to slide five, and let me take a few minutes to provide an update on our capital-efficient contract manufacturing strategy. Our California pilot line gives us the ability to win new customers, allowing us to quickly deliver new cell chemistries to customers. We often do this side by side with our customers in joint development programs.

We also use our Fremont facility to deliver small volumes of cells. We leverage our worldwide contract manufacturing partners to produce cells at volume. We have four manufacturing partners in China. Over the last several years, they have provided us with excellent quality and reliable delivery. Our China CMs have helped Amprius tremendously, and they will continue to be important partners in our future. We have added several partners in South Korea. In May 2025, we announced our first partner, Lebest, located in Daejeon, about a two-hour drive from downtown Seoul. Lebest has been delivering Amprius commercial cells since September 2025. We recently added JR Energy and Top Material as South Korean partners. Together, these three CMs give us the ability to produce batteries that are compliant with NDAA rules.