Amprius Technologies, Inc. Canaccord Genuity's 46th Annual Growth Conference

Please go ahead. Great. Thank you, George.

Amprius is a battery company. Maybe the best way to remember what we do is to think about coffee. If you look at a standard drip coffee, we all know the amount of caffeine that it has. Amprius has the same caffeine in a smaller size. Or if you have a double shot, you can have twice the energy. We win because drone companies buy our cells, and they can, in general, fly twice as far with the same battery, and it's because of the silicon anode that's inside the battery. The engineering geeks will look at the left-hand side and talk about energy density, both the gravimetric and volumetric. What we have is also a tunable platform. Some customers really want to max out in that quadcopter you see there for energy density.

If you need power, often robotics applications need the power, especially if you're lifting things. Think of a humanoid that's putting things on the shelf. If you don't care about cycle time like a one-way drone, that's a different type of design. An eVTOL needs power to take off and energy to fly. We have the ability to tune our batteries, the chemistries, for those different platforms, and that's where we win. We are serving five markets today. Most of our revenue is from unmanned aerial systems or vehicles. So drones, both offense, defense drones, used for war applications, the new wars that we all read about, as well as drone as first responder to help on the public safety side.

The idea is to get a drone on site of an incident, whether it's a fire or a robbery or a health incident, within 90 seconds, long before the police cars or the fire equipment can get there. There's also drone deliveries. We had a nice announcement in our May call about Matternet that is delivering food and medical supplies using drones. That is all coming. The days of Amazon trucks will still be there, but drones are going to be delivering more and more over time. We've had some nice wins in light electric vehicles. Stark Future is Europe's fastest growing e-motorcycle company. They gave us a nice $100 million contract for 3 years to deliver batteries for their vehicles. Same story. The energy density allows those overall space for the battery. It replaces a gas tank that we're familiar with on a motorcycle.

That's where we win through the innovation that we provide. If you look at the surveillance drones, that's where energy density is super important. The ability to hover over the Strait of Hormuz, for example, for 5 hours instead of 3 hours is well worth the incremental price that you pay for our cells. We have a higher than average price. We base our performance and our value proposition is all about how we can increase the customer's economics. We are at the top of the performance pyramid, and that's especially true if you think about this AALTO Airbus system that flew for 62 days. Solar panels on the wings during the day to charge our batteries, and then at night, we ran off of those batteries. Those missions would not be possible if it wasn't for our silicon anode technologies.

On the attack and counter-attack drones, as these segments evolve, drones are relatively new. They're starting to have different segmentations, and you need different batteries for different types. Amprius wins as you go further down this set of rows. If you think about an attack drone, a one-way drone, you're probably okay with a standard off-the-shelf battery. If you need longer range, if you want to deliver a heavier munition, again, that's where we win. We have the ability to tune the platforms. There's a number of cells like the one that I have. We also have smaller versions. We have cylindrical cells that are very standardized, et cetera. We fit into any lithium-ion factory in the world. This is a second-generation system, so we can deliver from China as we do today. We have four contract manufacturers. We are standing up Korea.

During the call last week, we announced three contract manufacturers in Korea and the U.S., we have one and a half, one that we've announced and other ones that we're working on, so that we can deliver these high-performance cells from the countries that our customers are asking for. As I'm sure we're all aware, there's a large movement toward the National Defense Authorization Act to buy batteries from countries other than China. We are standing up to enable that. We have a pack partner program. Say that three times fast. We have this gold, silver, bronze program because they are an extension of our sales team. About half of our sales go directly to the drone customers and other types of customers who integrate them into their craft. The other half go through pack partners, which is a very light lift for our sales team.

It amplifies our effort to make the sales available to our customers. We have nine partners that are helping us worldwide, and again, a gold, silver, bronze type of mentality, where we offer a slight discount to them if they deliver to us more business. We are always on the treadmill. We are moving up these three vectors as we get new cells that are announced. Stay tuned between now and Christmas. There will be additional cells that are announced about our ability to deliver our strength, energy density on an increasing basis so that we can serve more of those segments that we talked about earlier. Korea is super important to us. It's the next obvious place, other than China, for battery companies. LG, Samsung, and SK On are three of the largest manufacturers in the world. The top four or five are in China.

That's why we set up shop there, that's why we have three contract manufacturers there, because that's where the supply chain for non-China materials, anode, cathode, separator, electrolyte, are present. That's where folks and companies that put the cells together for us in this capital-light approach that we have. I turn it over to Ricardo, who's helping run the show on the financial side of things.

Yeah, we're in the very early stages of our revenue ramp. To give you an idea, last year, the company only did $73 million of revenue. I joke with our team, average car dealership in the U.S. does $85 million, and they don't need the sharpest and brightest, so we got ways to go. I think that we'll actually get there, and more, because we've guided to initially $125 million of revenue this year. Increased that to at least $130 million when we reported Q1, and then just last week, we raised that again to at least $140 million of revenue this year. On the margin side, first we said, we'll do roughly 25% gross margin, seeking to break even on adjusted EBITDA.

Now, as we've worked our way through half of the year, we think that we can do at least $4 million of EBITDA, and the gross margins should be above 28% when you look back at the year. Again, I think it's very early, but evidence that this fabless but not process-less model works pretty well and enables the ramp, thanks to some of the things that Tom covered on the pack partner program with the go-to-market side. We're on more than half of the drone dominance winners here in the U.S., but at the same time, not necessarily driving a lot of CapEx.

We'll invest less than $10 million this year, and the bulk of it will be funded by the Defense Innovation Unit, and that's in essence just increased prototyping capabilities at our facility in Fremont so that we can coat our own electrodes and again, continue being fabless but not process-less. So, we're pretty focused on not screwing up this cadence. As we look further out, our long-term targets, and every quarter we've reaffirmed these. I truly do think that with the contracted capacity, we can have at least $600 million of revenue. Demand will tell on how quickly we need to use all of that. Then, it's pretty easy once you take all the mixed factors into account to turn this into a 30%-plus gross margin business. I think we're well on our way there. If you look at the first half, even ahead of our own expectations.

If we manage the OpEx, I think we can have at least 20% adjusted EBITDA margins as well. It is still very early. I do think that whether you look at the defense super cycle plus all the other markets that Tom Stepien mentioned, I do think that right now we are all talking about UAVs, the transition to producing the cells in South Korea and in the U.S. to not miss out on a lot of incremental demand in 2028. Then you have robotics, satellites, eVTOLs, light EVs, and other markets that are either already there or are going to pick up in 2028 and beyond. Right now, we are just basically focused on delivering our performance, which ultimately sells the cells. Winning commercially, the pack partner program is one example.