Executive Summary

Q2 2025 revenue was $7.5M, above guidance ($4.5–$6.5M) and up 98% year over year; GAAP gross profit turned positive ($1.9M) and non-GAAP gross profit reached $2.3M as defense product mix from Korea lifted margins .
Non-GAAP EPS loss of $0.13 and adjusted EBITDA loss of $20.1M beat guidance ranges; management highlighted “fifth consecutive quarter” of beating street estimates, though third-party consensus was unavailable to verify .
AI-1 smartphone battery launched (>900 Wh/L, 3C fast charge, ~1,000-cycle projection), with samples to two top-tier smartphone OEMs; UN38.3 certification completed, signaling readiness for mass shipments .
Capital actions: $60M share repurchase authorization and a warrant dividend (potential proceeds up to ~$254M), with ~$34M of exercises reported by Jul 30; Q3 2025 guidance calls for revenue of $7.5–$8.5M but a wider non-GAAP operating loss due to mix and scale-up costs .
Stock reaction catalysts: commercialization milestones (smartphone/eyewear qualifications), tangible margin progression from mix, and financing flexibility via warrants and buyback to support Fab2 scale-up .

What Went Well and What Went Wrong

What Went Well

Revenue and margin outperformance: $7.5M revenue vs $4.5–$6.5M guidance; non-GAAP gross margin 31% vs -15% in Q2’24, driven by higher-margin Korean defense products .
AI-1 platform momentum: “Produced the first smartphone battery achieving energy density of more than 900 Wh/L… fast charging at 3C… projected 1,000-cycle life” and began sampling to two top-tier smartphone OEMs .
Operational readiness: Completed UN38.3 certification for first AI-1 smartphone battery; accelerated customer qualification timelines by ~50%; started procuring long-lead components for second HVM line .

Quote: “We finalized the AI-1 battery platform, shipped production samples for product qualification, exceeded revenue expectations, and achieved our third straight quarter of positive gross margin” — Raj Talluri and Ryan Benton .

What Went Wrong

Losses persist amid scale-up: Non-GAAP operating loss of $26.5M; adjusted EBITDA loss of $20.1M, reflecting continued manufacturing ramp and R&D investment .
Expense headwinds ahead: Q3 outlook signals higher non-GAAP operating loss ($31–$35M) due to “less favorable product mix” and increased manufacturing readiness costs .
Legal and non-GAAP adjustments: Ongoing legal costs tied to securities litigation ($1.247M), and accounting noise from warrant fair value changes (+$5.885M) and bargain purchase gains (-$4.761M) impacted comparability .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$3.768	$5.098	$7.468
GAAP Gross Profit ($USD Millions)	-$0.655	$0.261	$1.942
Non-GAAP Gross Profit ($USD Millions)	-$0.560	$0.382	$2.298
GAAP Net Loss per Share ($)	-$0.63	-$0.12	-$0.22
Non-GAAP Net Loss per Share ($)	-$0.13	-$0.15	-$0.13
Adjusted EBITDA Loss ($USD Millions)	$25.889	$22.155	$20.125
Non-GAAP Operating Expenses ($USD Millions)	$30.400	$29.738	$28.810
Cash, Cash Equivalents & Short-term Investments ($USD Millions)	$249.929	$248.2	$203.4

Notes and cross-checks:

Preliminary Q2 gross profit figures released on Jul 7 were positively adjusted in the final print; CFO noted “a few positive adjustments” (final GAAP gross profit $1.942M vs prelim $0.795M) .
Positive gross margin now three consecutive quarters per management commentary .

KPIs and Operating Highlights:

KPI	Q2 2025
AI-1 Energy Density (Wh/L)	>900
Fast Charge Capability	3C rates
Cycle Life Projection	~1,000 cycles (projection)
UN38.3 Airline Safety Certification	Completed for first AI-1 smartphone battery
Warrant Exercises to Date	~$34M as of Jul 30
Q3 2025 Revenue Guidance	$7.5–$8.5M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q3 2025	N/A	$7.5–$8.5	New
Non-GAAP Operating Loss ($USD Millions)	Q3 2025	N/A	$31–$35	New
Non-GAAP EPS (Loss per Share, $)	Q3 2025	N/A	$0.14–$0.18	New
Share Repurchase Authorization	Through 2026	N/A	Up to $60M	New
Warrant Dividend (Potential Gross Proceeds)	Warrants expire Oct 1, 2026 (early expiration possible)	N/A	Up to ~$253.8M	New

Reference guidance (prior quarter for context):

Q2 2025 guidance (issued Apr 30): revenue $4.5–$6.5M; non-GAAP operating loss $31–$37M; adjusted EBITDA loss $23–$29M; non-GAAP EPS loss $0.15–$0.21 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology Initiatives	EX-2M sampling; smartphone partnerships; EX-3M design kickoff	AI-1 launch (>900 Wh/L, 3C, ~1,000-cycle projection); smartphone sampling to two OEMs	Accelerating product maturity and OEM engagement
Supply Chain/Tariffs	Allied supply chain-driven demand (defense); Korea/Malaysia footprint	Margin uplift from “post-tariff” Korean defense product mix; expanding defense engagements in Asia	Favorable tailwinds; diversified regional capacity
Product Performance	Safety validation EX-1M; benchmarking lead vs doped graphite	First smartphone battery surpassing 900 Wh/L; UN38.3 certification achieved	Performance leadership reinforced
Regional Trends	Increased US defense interest; Asia-centric sales outlook	Korean asset integration (coating capacity, faster materials prototyping); Asia defense and industrial growth	Asia/US defense demand rising
Regulatory/Legal	Ongoing litigation; non-GAAP exclusions	Legal costs excluded in non-GAAP ($1.247M)	Continuing but manageable
R&D/Manufacturing Execution	SAT milestones; yield improvements; agility/HVM readiness	UN38.3 pass; qualification timelines cut ~50%; long-lead procurement for second HVM line	Scaling readiness improving

Management Commentary

“We finalized the AI-1 battery platform, shipped production samples for product qualification, exceeded revenue expectations, and achieved our third straight quarter of positive gross margin.” — Raj Talluri & Ryan Benton .
“The battery is becoming the bottleneck… AI-1 is arriving at the right time to break this bottleneck.” — Shareholder letter .
“Fifth straight quarter that we've beat the midpoint of the guidance that we've provided.” — Ryan Benton (CFO) .
“This is what it means to scale a breakthrough. This is Enovix.” — HVM line video narration on precision manufacturing and quality .
TJ Rodgers on AI-1 battery energy: 26.3 Wh in 1.79 cu. in.; colorful demonstration analogy underscoring energy density impact .

Q&A Highlights

Commercialization timeline: Smartphone OEM cycle tests (~3 months), SKU-by-SKU rollout, multi-model expansion once qualified; visibility to sequential ramps in 2026 .
Financing and capacity: Warrant proceeds earmarked to complete Fab2 (facility sized for four lines); ~$34M exercised by Jul 30; two lines imply 9–10M units per year nameplate .
Pricing/ASP: Flagship smartphone battery ASPs commonly ~$1.5–$2 per amp-hour; higher energy density implies premium pricing power .
Industrial handheld opportunity: Multi-million unit annual potential plus replacement battery revenue streams .
Operational posture: No inventory build without POs; linear automated line enables ~<30-day cycle time and disciplined working capital .

Estimates Context

S&P Global consensus for ENVX was not available for Q2 2025 and forward quarters in this query window; therefore, beat/miss vs Wall Street consensus could not be independently verified. Management stated “beat street estimates for the fifth consecutive quarter,” but external consensus data was unavailable here to confirm .
In lieu of consensus, results versus company guidance show outperformance on revenue, non-GAAP EPS, and adjusted EBITDA for Q2 2025 .

Key Takeaways for Investors

Commercial inflection: AI-1 smartphone battery is now in formal qualification with two top-tier OEMs; UN38.3 passed and mass shipments become feasible upon qualification completion — watch for purchase order timing and SKU breadth as catalysts .
Margin trajectory: Mix shift to Korean defense products is lifting gross margins; sustained non-GAAP margin progress should hinge on smartphone and eyewear commercialization in 2H’25–2026 .
Capacity and capex: Fab2 is operating with one HVM line; long-lead orders for a second line started; warrants and $60M buyback authorization provide flexible capital tools to support scale-up .
Revenue outlook: Q3 guide ($7.5–$8.5M) implies sequential growth, but management flagged higher operating loss due to mix and readiness costs — trade the narrative around mix shifts and expense cadence .
Pricing power: AI-1’s energy-density lead (>900 Wh/L) positions ENVX to command ASP premiums in smartphones and smart eyewear; monitor ASP realization against ramp timing .
Risk monitor: Manufacturing ramp (yields, throughput), legal expenses, and warrant-related accounting can introduce volatility to reported EPS — focus on non-GAAP metrics and operational milestones .
Near-term catalysts: Additional OEM sampling updates, formal POs, smart eyewear validation wins, early warrant expiration dynamics tied to stock VWAP, and Q3 earnings performance vs guide .

Sources: SEC 8-K and shareholder letter, Q2 2025; preliminary 8-K; Q2 2025 earnings call; prior quarter 8-Ks and calls; AI-1 launch, warrant and buyback press releases .

Enovix Corp (ENVX)·Q2 2025 Earnings Summary