FREYR Battery, Inc. /DE/ (FREY)·Q4 2023 Earnings Summary

Executive Summary

• Q4 2023 net loss was $24.152M and diluted EPS was $-0.17, versus net income of $25.295M and diluted EPS of $0.20 in Q4 2022; operating expenses rose to $39.077M YoY, driven by R&D and restructuring, partly offset by an $8.515M non-cash gain on warrant liability .
• Operationally, FREYR achieved automated cathode and anode casting trials at the Customer Qualification Plant (CQP) in February and now targets automated production of functional customer sample cells in H1 2024, shifting emphasis from commissioning to production .
• Liquidity remains strong: year-end cash, cash equivalents, and restricted cash were $275.742M, with management guiding 2024 cash use “well below” 2023 and a two-year runway before prospective financings (DOE Title 17, project-level equity) .
• Strategic catalysts ahead: conventional technology partner selection and agreement in H1 2024, DOE Title 17 conditional commitment targeted by year-end 2024, and potential 2026 start of production under the conventional technology track at Giga America—each a likely stock narrative driver .

What Went Well and What Went Wrong

What Went Well

• “Successfully conducted automated anode casting trials with active electrolyte slurry” in Feb; combined with earlier automated cathode casting, advancing toward full CQP automation in H1 2024 .
• Organizational and cost discipline: restructuring completed in December; headcount reduced by 22% and contractor support by 26%, extending liquidity to two years while focusing spend on CQP and Giga America .
• Strategic optionality: launching “FREYR 2.0” to pursue more than 100 GWh of U.S./EU projects across ESS and passenger EV, with potential inorganic opportunities to accelerate first revenues .

What Went Wrong

• CQP timeline slip: transition to fully automated production pushed into H1 2024 (vs earlier targets), reflecting complexity of scaling next-gen equipment; Q3 had flagged delays beyond Q4 2023 and instituted mitigation measures .
• Higher R&D and restructuring costs weighed on operating expenses: Q4 2023 OpEx $39.077M vs $34.275M YoY; net loss vs prior year net income, largely due to lower warrant FV gains and elevated project-related costs .
• Giga Arctic paused: management minimized 2024 spending given inferior returns relative to U.S. IRA-backed opportunities; while option value preserved, near-term capex and visibility in Norway are limited .

Financial Results

Notes: Q3 2023 figures for net loss and warrant adjustment from management’s remarks; revenues are not presented in the Q4 2023 statements and management repeatedly frames first revenues as future events tied to CQP validation and/or conventional technology initiatives .

Operating Expense Components (YoY):

Quarterly Cash Flow (per slide deck):

KPIs / Operational Metrics:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Producing functional sample cells for key customers using the full automation of the CQP in H1 2024 is priority #1.” — CEO Birger Steen .
• “It is quite likely that the conventional technology track will end up being the first opportunity for production on the Coweta County site… get us to a start of production in 2026.” — EVP Jeremy Bezdek .
• “We ended 2023 with total assets of $732 million… no debt… total shareholders’ equity of $635 million… book value of $4.54 per share.” — CFO Oscar Brown .
• “We have cut cash outflow by more than half year-on-year and flattened the organizational structure to… accelerated execution.” — CEO Birger Steen .
• “We are on track for automated production of functional customer sample cells… target[ing] conditional DOE LPO commitment… and potential conversion of conditional offtakes to firm sales agreements.” — CEO Birger Steen .

Q&A Highlights

• DOE Title 17 conditional commitment: Management targeting conditional approval by year-end 2024; continued data-sharing from CQP and formal diligence later in the year .
• Balancing SemiSolid vs conventional tech: Conventional track enables earlier revenue in ESS with LFP focus; semiSolid remains the long-term differentiation path .
• Offtake environment and financing: Offtakes required under either track; management sees healthy ESS growth despite cyclicality and expects incremental offtake announcements in 2024 .
• Runway and burn rate: >2-year runway affirmed in Q3 with sub-$30M quarterly burn from January; Q4 emphasized a two-year runway and 2024 spend “well below” 2023 .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2023 EPS and revenue was unavailable due to missing CIQ mapping for FREY; therefore, estimate comparisons cannot be made at this time.
• Implication: Absent a consensus anchor, investor focus should remain on operational milestones (CQP validation, conventional tech agreement) and financing progress (DOE Title 17).

Key Takeaways for Investors

• Near-term trading hinges on H1 2024 CQP milestones (functional customer sample cells) and conventional technology partner selection—both are material validation and timeline catalysts .
• Liquidity provides a cushion: $275.742M YE cash and a ~two-year runway support execution without immediate equity needs, with capex gated by financing .
• Strategic pivot to dual-track (SemiSolid + conventional) broadens addressable markets and de-risks time-to-revenue; conventional SOP targeted for 2026 in Georgia .
• DOE Title 17 conditional commitment by year-end 2024 would be a significant de-risking event for Giga America’s capital stack and schedule .
• Operational spend mix shifting: 2024 focus on CQP automation ramp and DOE application diligence; Giga Arctic paused, conserving cash and optionality .
• Watch for offtake conversions post sample-cell validation and potential inorganic moves under FREYR 2.0 to accelerate first revenues .
• Narrative risk remains around 24M scale-up and ESS pricing cycles; management’s mitigation includes advisory governance, vendor coordination, and conventional licensing to balance risk/reward .