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Enovix Corp (ENVX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $9.717M, at the high end of guidance and up >30% YoY; the company achieved its first-ever positive gross margin (11%) as Routejade/Korea conventional batteries for defense customers drove mix and opex discipline reduced losses .
  • Non-GAAP EPS loss improved to $0.11 vs guidance loss of $0.15–$0.21, and adjusted EBITDA loss narrowed to $11.7M vs guidance loss of $19–$25M; GAAP EPS loss was $0.20 .
  • Management reiterated 2025 smartphone launch timelines, shipped EX-2M samples, expanded engagements to 7 of the top 8 smartphone OEMs, and secured prepaid XR purchase orders; HVM Line in Malaysia completed SAT and is prepared to support multiple qualifications .
  • Guidance for Q1 2025: revenue $3.5–$5.5M, adjusted EBITDA loss $21–$27M, non-GAAP EPS loss $0.15–$0.21; focus remains on smartphone mass production readiness and IoT wins (smart eyewear) .

What Went Well and What Went Wrong

What Went Well

  • First-ever positive gross margin: GAAP gross margin of $1.052M (11%) driven by Korea conventional battery sales and collaboration with US engineering teams .
  • Commercial progress: early engineering samples shipped to a lead smartphone OEM (critical safety tests passing); expanded to 7 of top 8 smartphone OEMs; received battery dimensions for a 2025 launch .
  • XR momentum and manufacturing milestones: prepaid purchase order reserving Fab2 capacity for smart eyewear, HVM SAT completed in Malaysia, multiple OEM factory audits initiated .
    Quote: “We remain on track for commercial smartphone battery launches in 2025… expanding our active engagements to 7 of the top 8 smartphone OEMs.”

What Went Wrong

  • GAAP net loss increased sequentially due to warrant fair value swing: Q4 GAAP net loss attributable to Enovix was $37.465M vs $22.536M in Q3; Q4 included a $5.115M warrant expense vs Q3’s $29.899M benefit .
  • Continued cash burn and capex: Q4 cash used in operations was $16.0M and capex $16.4M; FY24 free cash flow was -$184.821M .
  • Near-term revenue guide soft: Q1 2025 revenue guided to $3.5–$5.5M, reflecting timing of qualifications and ramp dynamics ahead of late-2025 smartphone mass production .

Financial Results

Quarterly Performance vs Prior Periods and Prior Year

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$3.8 $4.317 $9.717
GAAP Gross Margin ($USD Millions)N/A$(0.642) $1.052
GAAP Gross Margin (%)N/AN/A11.0%
GAAP Operating Expenses ($USD Millions)N/A$48.625 $35.568
Non-GAAP Operating Expenses ($USD Millions)N/A$27.152 $24.296
Adjusted EBITDA ($USD Millions)$(23.1) $(21.640) $(11.728)
GAAP EPS (Basic, $)N/A$(0.13) $(0.20)
Non-GAAP EPS (Basic, $)$(0.14) $(0.17) $(0.11)
Cash & Cash Equivalents ($USD Millions)N/A$200.9 (incl. ST investments) $272.869
Capital Expenditure ($USD Millions)N/A$19.5 $16.4

Notes: GAAP gross margin % disclosed qualitatively at 11%; GAAP gross margin $ provided in statements .

Q4 2024 vs Prior Year (Q4 2023) and Guidance

MetricQ4 2023Q4 2024YoY ChangeQ4 2024 Guidance (given on 10/29/24)Actual vs Guidance
Revenue ($USD Millions)$7.381 $9.717 +31.6% $8.0–$10.0 High end achieved
GAAP Gross Margin ($USD Millions)$(12.388) $1.052 +$13.440M N/ABeat (first positive GM)
Adjusted EBITDA ($USD Millions)$(23.028) $(11.728) +$11.300M $(19)–$(25) Beat (less negative)
GAAP EPS (Basic, $)$(0.36) $(0.20) +$0.16 $(0.23)–$(0.29) Beat (less negative)
Non-GAAP EPS (Basic, $)$(0.28) $(0.11) +$0.17 $(0.15)–$(0.21) Beat (less negative)

KPIs and Operating Highlights

KPIQ2 2024Q3 2024Q4 2024Notes/Source
HVM Line SAT CompletionFAT cleared (modules) SAT targeted Q4 SAT completed Malaysia Fab2
HVM Line Throughput (UPH)N/AN/A1,350 UPH (~9.5–10M batteries/year) Line 1 universal
Smartphone OEM EngagementsTop 5 focus Second OEM partnership 7 of top 8 sampled + new PO for custom samples
EX-2M SamplesEarly proto validated Ship in Q4 plan Shipped from Fab2 (+~10% ED vs EX-1M)
Smart Eyewear OrdersCalifornia XR deal Mass production PO schedule aligned Prepaid PO; mid-2025 shipments targeted
Cash & Cash Equivalents ($M)~$250 (commentary) $200.9 (cash+ST inv.) $272.869 Strengthened by $107M raise

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q4 2024$8.0–$10.0 Actual: $9.717 Achieved high end
Adjusted EBITDA ($M)Q4 2024$(19)–$(25) Actual: $(11.728) Beat (less negative)
Non-GAAP EPS ($)Q4 2024$(0.15)–$(0.21) Actual: $(0.11) Beat (less negative)
GAAP EPS ($)Q4 2024$(0.23)–$(0.29) Actual: $(0.20) Beat (less negative)
Revenue ($M)Q1 2025N/A$3.5–$5.5 New guide
Adjusted EBITDA ($M)Q1 2025N/A$(21)–$(27) New guide
Non-GAAP EPS ($)Q1 2025N/A$(0.15)–$(0.21) New guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI-driven battery capacityEdge AI to push >6,000 mAh Customers discussing ~7,000 mAh Working on >7,000 mAh cell; ASP tailwind Accelerating specs/ASP
Supply chain/Defense demandInterest from allied forces; Routejade high-rate Conventional (Routejade) contributions Increased inbound drone/defense demand post-election; sample PO for autonomous systems Strengthening demand
Manufacturing ramp/UPHAgility SAT; HVM FAT; Fab2 opening HVM SAT in Q4 targeted HVM SAT completed; Line 1 1,350 UPH; multi-audits Execution milestones met
Smart eyewear (XR)CA-based XR agreement Mass production PO schedule aligned (2025) Prepaid PO; mid-2025 shipments; pack integration in Korea Converting pipeline to backlog
EV collaborationSecond auto OEM deal; licensing lean Milestone expected Q4 Active lab work in Malaysia with OEM materials; updates expected FY25 Ongoing development
Pricing/ASP premiumPremium for energy density validated Premium confirmed; 50%+ cash GM long-term target Premium ASP in XR packs; smartphone ASP upside with larger cells Favorable pricing dynamics

Management Commentary

  • “We achieved key milestones in manufacturing, technology, and sales, setting the stage for a breakout year in 2025.” — CEO, Dr. Raj Talluri .
  • “We successfully completed safety testing of EX-1M… first EX-2M samples from Fab2 were shipped to customers on schedule.” .
  • “Fab2 in Malaysia completed Site Acceptance Testing (SAT) for the High-Volume Manufacturing (HVM) line.” .
  • “Our GAAP net loss… impacted quarterly by changes in fair value of common stock warrants… $5.1M expense in Q4 compared to a $29.9M benefit in Q3.” .
  • “OEMs are increasingly requesting batteries with capacities near 7,000 mAh… our EX-2M and upcoming EX-3M align with evolving demands.” .

Q&A Highlights

  • Smartphone pipeline and specs: Management received exact battery dimensions for a 2025 premium-tier model; one design “north of 7,000 mAh,” supporting multi-model deployment; qualification cadence outlined (samples → dimensions → integrated testing → PO) .
  • Capacity and throughput: Malaysia Line 1 SAT at 1,350 UPH (~9.5–10M batteries annually); Line 2–4 planned with cost and speed optimization, backward-compatible improvements .
  • Defense and Korea site: High-rate Routejade batteries fit drone/defense needs; capacity in Nonsan can expand as qualifications progress .
  • XR ASP and packs: Two XR customers with POs; pack integration drives additional ASP premium; mid-year commercial shipments targeted .
  • Capex outlook: FY25 capex currently budgeted at $30–$40M; long-lead items being pre-positioned with suppliers to accelerate HVM line additions .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable in our session due to a data access limit; therefore, estimate comparisons cannot be provided at this time [GetEstimates error].
  • Given the absence of S&P Global consensus, the company’s results are evaluated against its own guidance ranges for Q4 2024 (all of which were exceeded or achieved at the high end) .

Key Takeaways for Investors

  • Mix and cost discipline are improving fundamentals: first positive gross margin (11%) driven by Korea conventional battery sales and lower opex; adjusted EBITDA narrowed materially QoQ .
  • 2025 smartphone launch path de-risking: receipt of exact dimensions, safety test pass, and HVM SAT completion are critical gating milestones toward late-2025 mass production .
  • XR is real near-term revenue: prepaid PO and mid-2025 shipments suggest tangible IoT contribution ahead of smartphone volumes; pack capability enhances ASP .
  • Demand tailwinds from AI and defense: larger-capacity smartphone batteries and allied supply chain requirements support volumes and pricing power (premium ASP) .
  • Capex and cash runway: $272.9M in cash/equivalents at YE2024; 2025 capex $30–$40M budgeted; long-lead HVM items staged with suppliers to accelerate future lines .
  • Non-GAAP vs GAAP volatility: warrant fair value swings can materially affect GAAP net loss; non-GAAP metrics better reflect operating progress; reconciliation provided .
  • Catalysts: additional smartphone qualifications/POs, ISO certification achieved in March 2025, smart eyewear commercial shipments, and any EV development updates .