Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Enovix Corp (NASDAQ:ENVX) reported Q4 2024 revenues of $9.6 million, near the high end of their guidance range.
• The company completed site acceptance testing of their high-volume manufacturing line and shipped their first samples of EX2M to customers.
• Enovix Corp (NASDAQ:ENVX) secured a purchase order from a second marquee smart eyewear customer, indicating strong demand in this segment.
• The ramp-up of Fab 2 in Malaysia was completed in just one year, showcasing operational efficiency.
• The company ended the quarter with a strong balance sheet, holding approximately $273 million in cash and cash equivalents.

Negative Points

• Enovix Corp (NASDAQ:ENVX) reported a non-GAAP EBITDA loss of $11.7 million for Q4 2024.
• The company forecasts a revenue decline for Q1 2025, with guidance set between $3.5 million to $5.5 million.
• There is uncertainty regarding the exact volumes and timelines for the commercialization of new battery models like EX2M and EX3M.
• The competitive landscape remains intense, with significant capital being invested in alternative battery technologies.
• The company faces challenges in scaling production to meet demand, particularly in the defense and smart eyewear markets.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with ENVX.

Q: Regarding policies and tariffs implemented by the new administration, what are the potential implications for Enovix's current and future business operations and prospects? A: Dr. Raj Laurie, CEO, stated that they are seeing increased interest from defense and industrial customers in the US. Their factories in Korea and Malaysia are favorable for shipping batteries into the US, and they do not see much effect from tariffs at this point.

Q: Can you lay out the current guidance for adding lines? What is the current capacity, and when will you begin ordering equipment for additional lines? A: Dr. Raj Laurie, CEO, mentioned that they completed the SAT for their high-volume manufacturing line in Malaysia, which can accommodate up to four lines. Ajay Marathi, COO, added that the current line has a capacity of 9.5 to 10 million batteries a year, and they are ordering long lead-time items to shrink the timeline for adding more lines.

Q: Can you provide more details on the drone purchase order and the growth profile of this customer? A: Dr. Raj Laurie, CEO, explained that they are seeing a lot of interest in their high-rate batteries, which are suitable for applications requiring fast discharge. While it's early in the qualification stage, they are optimistic about the potential growth as they receive multiple inquiries from different customers in the US.

Q: Can you rank order the smartphone customers in terms of the pipeline and commercialization stage? A: Dr. Raj Laurie, CEO, stated that they have sampled seven of the top eight customers, with another placing an order for samples. They have two agreements progressing, with one customer providing exact battery dimensions for a phone model expected to launch this year.

Q: How quickly are the specifications for the 7,000 mAh cell changing, and how does this translate into potential pricing appreciation? A: Dr. Raj Laurie, CEO, noted that the demand for higher capacity batteries is driven by AI applications consuming more energy. This trend is beneficial for Enovix as it allows them to command a premium for energy density, providing a positive tailwind for ASP and margin expansion.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.