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Enovix Corp (ENVX)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue grew 85% YoY to $8.0M, with GAAP gross margin improving to 18% (non-GAAP 21%); non-GAAP EPS was ($0.14). Management guided Q4 revenue to $9.5–$10.5M, with continued investment ahead of smartphone commercialization .
  • Balance sheet strengthened: cash, cash equivalents and marketable securities reached $648M following a warrant dividend and $360M 4.75% convertible notes due 2030; CFO described the capital raise as removing a financing overhang and enabling Fab2 build-out .
  • Lead smartphone customer progressed to additional lifecycle testing after a design revision to meet 1,000-cycle requirements; second smartphone OEM is accelerating in qualification. AI-1 smartphone battery was independently validated as highest energy density reported for a smartphone battery (Polaris Labs) .
  • Near-term catalysts: sequential revenue growth in Q4, validation data from lead smartphone testing in Q1 2026, and back-weighted 2026 revenue profile as commercialization ramps across smartphone and smart eyewear .

What Went Well and What Went Wrong

What Went Well

  • Independent validation of AI-1 battery’s industry-leading energy density, plus confirmation of fast-charge capabilities; CEO: “highest energy density reported for a smartphone battery” and “leading fast charge capabilities” .
  • Execution momentum in defense and industrial: record YTD shipments in Korea, pipeline >$80M, and deliveries to two of Korea’s major three military contractors .
  • Manufacturing progress at Fab2 Malaysia: yield improvements across all zones; Zone 4 (formation) throughput increased, exceeding HVM requirements for an additional line, reducing future capex needs .

What Went Wrong

  • Non-GAAP loss from operations increased YoY ($29.8M vs $26.9M), reflecting higher depreciation, R&D and manufacturing readiness; adjusted EBITDA remained negative ($21.4M) .
  • Lead smartphone program required a chemistry iteration to consistently meet 1,000 cycles, triggering a new 3–4 month validation cycle and deferring mass production shipments to Honor from Q4 2025; CFO reaffirmed no Q4 mass-production to Honor .
  • Interest expense stepped up with new convertibles (Q3 interest expense GAAP: $11.765M), pressuring non-GAAP EPS guidance range to ($0.16–$0.20) for Q4 .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$4.317 $5.098 $7.468 $7.990
GAAP Gross Profit ($USD Millions)($0.642) $0.261 $1.942 $1.401
GAAP Gross Margin %(15%) —26% 18%
Non-GAAP Gross Profit ($USD Millions)($0.541) $0.382 $2.298 $1.681
Non-GAAP Gross Margin %(13%) —31% 21%
GAAP Operating Expenses ($USD Millions)$48.625 $42.821 $45.675 $48.374
Non-GAAP Operating Expenses ($USD Millions)$26.351 $29.738 $28.810 $31.506
GAAP Loss from Operations ($USD Millions)($49.267) ($42.560) ($43.733) ($46.973)
Non-GAAP Loss from Operations ($USD Millions)($26.892) ($29.356) ($26.512) ($29.825)
GAAP EPS (Basic, $USD)($0.12) ($0.12) ($0.22) ($0.26)
Non-GAAP EPS (Basic, $USD)($0.16) ($0.15) ($0.13) ($0.14)

Notes:

  • ASC 260 warrant dividend retroactive adjustments apply to share and EPS in comparative periods .
  • Adjusted EBITDA: Q3 2025 ($21.421M) loss vs Q3 2024 ($23.698M) loss .

Balance sheet and cash/capex:

  • Cash, equivalents and marketable securities: $648M as of Q3 2025; long-term debt (net): $518.348M; warrant liability: $16.632M .
  • Q3 2025 capex: $3.0M; Q4 2025 capex guidance: $9.0–$12.0M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ResultChange
Revenue ($USD Millions)Q3 2025$7.5–$8.5 $8.0 Beat vs midpoint
Non-GAAP Loss from Operations ($USD Millions)Q3 2025($31)–($35) ($29.8) Beat (smaller loss)
Non-GAAP EPS (Basic, $USD)Q3 2025($0.14)–($0.18) ($0.14) Beat (best end)
Revenue ($USD Millions)Q4 2025—$9.5–$10.5 New
Non-GAAP Loss from Operations ($USD Millions)Q4 2025—($30)–($33) New
Non-GAAP EPS (Basic, $USD)Q4 2025—($0.16)–($0.20) New
Capital Expenditures ($USD Millions)Q3 2025—$3.0 Actual
Capital Expenditures ($USD Millions)Q4 2025—$9.0–$12.0 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q1 2025; Q-1: Q2 2025)Current Period (Q3 2025)Trend
AI-1 smartphone battery validationBenchmarked leadership; EX-2M/EX-3M roadmap; UN38.3 certification; sampling two OEMs Independent validation (Polaris Labs); lead OEM lifecycle testing; second OEM accelerating Positive, advancing
1,000-cycle requirementProjected 1,000 cycles; custom cell dimensions received; Q2 sampling Chemistry iteration to ensure 1,000 cycles; new validation cycle underway Near-term delay, de-risk longer term
Fab2 Malaysia yieldsISO certification, yield focus; HVM line configured; UPH targets Yield gains across zones; Zone 4 throughput exceeds needs; weekly reviews Improving
Defense and industrialKorea expansion; coating capacity; US defense sampling; pipeline growth Record YTD shipments; pipeline >$80M; two major Korean contractors Strong momentum
Smart eyewear AR/VRTwo customers; sampling; high energy density critical; ecosystem engagement >1,000 packs delivered to lead customer; nine OEMs/ODMs sampling; 2026 launches expected Accelerating
Supply chain/tariffsMonitoring; Asia sales concentration; diversification to Malaysia/Korea Customers diversifying supply chains; tailwinds for Korea/Malaysia facilities Supportive
Financing/capital marketsShareholder warrant dividend plan $224M net warrant proceeds; $360M converts; cap calls with tranches; $648M cash Strengthened balance sheet
M&A optionalitySolarEdge Korea assets acquired; vertical integration benefits Evaluating targets to accelerate commercialization; disciplined filters Optionality maintained

Management Commentary

  • CEO: “Our AI-1 battery has been independently validated as having the highest energy density reported for a smartphone battery… our marquee customer programs are moving towards commercial launch, and our manufacturing capabilities at Fab2 are steadily progressing” .
  • CEO on smartphone lead customer: “We have agreed to a design iteration… we expect to ship these samples in Q4, enabling Honor to complete full lifecycle testing” .
  • CFO: “We closed the quarter with $648 million in cash, cash equivalents, and marketable securities… remove what we perceived as a financing overhang, to give [the team] the confidence to execute… and give our customers comfort” .
  • CFO on cap calls: “Multiple tranches… several interim payoff opportunities… if we meet all targets, company could receive cash proceeds of over $200 million” .
  • CEO on capacity: “We have a line that, when fully facilitized, can produce up to 9 million batteries a year next year” .

Q&A Highlights

  • Lead smartphone timeline: Chemistry iteration to achieve 1,000 cycles; new validation cycle takes 3–4 months; initial commercialization “in the first half of next year” if testing goes well .
  • Customer breadth and capacity: Two smartphone OEM agreements; sampled seven of eight top OEMs; Fab2 capacity up to 9M batteries next year with line expansions .
  • Guidance clarity: Q4 revenue $9.5–$10.5M; non-GAAP loss from ops ($30)–($33)M; non-GAAP EPS ($0.16)–($0.20); no Q4 mass production for Honor .
  • Materials strategy: Moving from SiOX to silicon-carbon (SiC) variants with multiple sources; architecture-first approach to leverage cathode voltage and electrolytes .
  • Profitability model: Gross margin positivity and adjusted EBITDA/cash-flow positives expected as Fab2 adds multiple HVM lines (line 2/3 drive scale) .

Estimates Context

  • S&P Global consensus estimates for Q3 2025 revenue and EPS were unavailable at the time of this analysis; as a proxy, company results exceeded prior company guidance ranges on revenue and non-GAAP EPS for Q3 . Values retrieved from S&P Global.*
  • Implication: In the absence of Street consensus, near-term estimate updates likely focus on Q4 revenue ($9.5–$10.5M) and non-GAAP EPS ($0.16–$0.20) as management executes sequential growth despite investment needs .

Key Takeaways for Investors

  • Commercialization path intact but disciplined: Lead smartphone program requires a chemistry iteration to ensure 1,000 cycles; validation underway with shipment in Q4 and decision points in early 2026 .
  • Strong liquidity removes financing overhang: $648M cash and recent convertibles plus warrant proceeds position ENVX to fund Fab2, expand capacity, and pursue selective M&A .
  • Sequential growth into Q4: Revenue guided up to $9.5–$10.5M with continued non-GAAP investment; watch capex ramp ($9–$12M) tied to Fab2 and Korea NPI line .
  • Manufacturing improving: Yield gains and Zone 4 throughput ahead of HVM needs suggest operating leverage as volumes increase in 2026 .
  • Defense/industrial diversification: Record YTD shipments and >$80M pipeline provide non-smartphone revenue support while consumer programs qualify .
  • Pricing power thesis: Rising battery capacities and AI features support higher ASPs; ENVX targets premium on energy density with fast charge and cycle life .
  • 2026 profile likely back‑weighted: Management flagged back-loaded revenue next year aligned with qualification and product launches; expect volatility but milestone-driven updates .

Additional Q3 2025 press releases and context:

  • Convertible notes pricing: $300M 4.75% due 2030; initial conversion price ~$11.21; capped call expirations at ~6/12/18/36 months with cap levels $16.47/$17.84/$18.76/$20.13 .
  • Q3 press release mirrored 8-K exhibits, including guidance and non-GAAP reconciliations .

Non-GAAP and reconciliation notes:

  • Non-GAAP definitions and reconciliations provided in 8-K/press release appendices; EPS and share figures retroactively adjusted for July 2025 warrant dividend (ASC 260) .