Enovix Corp (ENVX)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $5.10M, near the high end of guidance and roughly flat YoY; gross profit turned positive for a second straight quarter, while adjusted EBITDA loss increased sequentially on higher OpEx tied to Malaysia ramp .
• Management guided Q2 2025 revenue to $4.5–$6.5M, non-GAAP operating loss to $31–$37M, adjusted EBITDA loss to $23–$29M, and non-GAAP EPS loss to $0.15–$0.21; the company will no longer provide GAAP EPS guidance going forward .
• Strategic progress: ISO 9001 certification at Fab2, first customer audits completed, smartphone custom cell development started with qualification samples targeted for Q2; South Korea asset acquisition adds coating capacity and defense production .
• Narrative catalysts: smartphone AI-driven capacity needs (~7,000 mAh cells) favor Enovix’s 100% active silicon architecture; leadership reinforced with new CFO; near-term tariff risks assessed as non-material with Asia-centric sales mix .

What Went Well and What Went Wrong

• What Went Well

  • “We exceeded the midpoint of our Q1 revenue guidance, delivering $5.1 million... and secured new defense bookings” — Raj Talluri, CEO .
  • Fab2 achieved ISO 9001:2015 certification with zero major/minor findings; first customer audits concluded in Malaysia and South Korea, supporting manufacturing readiness .
  • Commenced development of custom smartphone cells with exact customer dimensions; qualification samples targeted for Q2, aligning with a 2025 product launch .

• What Went Wrong

  • Sequential revenue declined to $5.10M from $9.72M in Q4 due to seasonality in South Korean defense orders; adjusted EBITDA loss widened to $22.2M on elevated ramp costs .
  • Non-GAAP operating expenses increased to $29.7M from $24.3M in Q4, reflecting hiring in Asia, R&D depreciation, and higher SG&A ahead of mass production .
  • Consensus estimates were unavailable via S&P Global for Q1/Q2, limiting external benchmarking; management ceased GAAP EPS guidance, reducing one reference point for models .

Financial Results

Q1 YoY comparison

Q1 Actuals vs Q4 Guidance

Notes:

• GAAP net loss was aided by a $15.8M favorable warrant fair value change in Q1 vs a $5.1M expense in Q4 .
• Positive gross margin achieved in Q4 and Q1; Q4 gross margin was 11% of sales .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We exceeded the midpoint of our Q1 revenue guidance, delivering $5.1 million… commenced development of a custom smartphone cell with the exact dimensions required by our lead customer” — Raj Talluri, CEO .
• “Our assessment is that there's no material impact to our near-term outlook as most of our planned near-term sales are concentrated within Asia.” — Raj Talluri .
• “Going forward, we will no longer be providing guidance for GAAP EPS… we will continue to provide non-GAAP EPS guidance.” — Ryan Benton, CFO .
• “Our unique architecture with 100% active silicon will hold a material lead in energy density… competition will be capped using silicon doping due to swelling and other trade-offs.” — Raj Talluri .
• “The facility we acquired from SolarEdge offers significant room for expansion… adding coating capacity for Fab2 and production for Korean defense programs.” — Company statement .

Q&A Highlights

• Tariffs and customer engagement: No observed customer concern in China; increased interest from US customers given Korea/Malaysia footprint .
• Capacity and acquisition benefits: SolarEdge assets add critical coating capacity for Fab2 and defense; dramatic capacity increase though too early to quantify .
• HVM line throughput/yields: Line bought off at 1,350 UPH; yields progressing toward world-class levels; current focus on multiple sample programs rather than max speed .
• Performance benchmarks: Competitive ED in 800+ Wh/L range; cycle life depends on customer-specific profiles; Enovix confident in trade-off mix and improvement trajectory .
• Defense pipeline: Increased sample POs and qualification activity; meaningful opportunity post-qualification timelines .

Estimates Context

• Wall Street consensus (S&P Global) for ENVX Q1 2025 and Q2 2025 was unavailable at time of query; no estimate comparisons included in this recap [Values retrieved from S&P Global]*.

Key Takeaways for Investors

• Near-term execution hinge: Deliver smartphone qualification samples in Q2 and pass OEM qualification by summer to set up late-2025 launch; this is the key stock narrative driver .
• Manufacturing readiness de-risking: ISO certification and successful audits reduce execution risk; localized tooling cuts switchover time by >40%, aiding flexibility and throughput .
• Mix shift dynamics: Seasonal defense softness in H1 should reverse in H2; Korea acquisition expands defense capacity and supports Fab2 coating — watch H2 bookings cadence .
• Profit path: Positive gross margin in Q4 and Q1 shows early leverage; however, non-GAAP OpEx stepped up for mass production—monitor OpEx normalization vs volume ramp .
• Pricing and ASPs: Premiums validated in AR/VR and expected in smartphones due to energy density—supports long-term margin thesis, contingent on scale .
• Capital runway: ~$248M liquidity provides flexibility into 2026; capex and potential additional lines will be paced by qualification visibility .
• Policy shift: GAAP EPS guidance discontinued; focus models on non-GAAP frameworks and operational KPIs (yields, UPH, qualification milestones) .