Executive Summary

Q2 2025 delivered record Q2 revenue of $91.3M (+9.2% Y/Y) and 34.7% gross margin, with positive adjusted EBITDA of $25.9M; however, GAAP net loss was $106.1M driven by a $121.5M non‑cash fair value charge on the convertible loan and warrants .
Versus consensus, revenue missed ($91.3M vs $107.7M*), while adjusted EPS beat ($0.05 vs $0.02*) as operating execution and cost control supported profitability on an adjusted basis .
Guidance: Revenue outlook maintained at $450–$475M; full‑year gross margin target raised from 30% to 32%—a constructive signal on mix/efficiency despite regional timing headwinds .
Key narrative drivers: EMEA program launches were pushed into later quarters (weighing on Q2 top line), US mix improving (rev share 5%), capacity expansion (Huzhou Phase 3.2) on track to complete installation by year‑end with initial production to follow—setting up 2026 capacity .

What Went Well and What Went Wrong

What Went Well
- Sustained margin and adjusted profitability: gross margin expanded Y/Y to 34.7% and adjusted EBITDA reached $25.9M; management highlighted “a record second quarter” with “adjusted EBITDA of $25.9 million” .
- OpEx discipline: Operating expenses fell to $16.5M from $126.7M in Q2’24 (prior year included impairments); adjusted OpEx was $15.7M vs $116.0M in Q2’24 .
- Technology milestones: multi‑layer all‑solid‑state battery progress (functional 12‑layer 48V monolithic stack; >99.89% coulombic efficiency in 5‑layer cell), positioning for robotics/AI/aerospace applications .
- Quote: “We delivered a record second quarter… This growth is matched with gross margin expansion to 34.7%… and a positive adjusted EBITDA of $25.9 million” — Yang Wu, CEO .
What Went Wrong
- Top‑line timing/miss: EMEA revenue timing (customer platform launches pushed into later quarters) pressured Q2 revenue versus expectations, contributing to a revenue miss vs consensus .
- GAAP optics: GAAP net loss of $106.1M driven by $121.5M non‑cash fair value changes in warrants/convertible loan, masking underlying adjusted profitability .
- Backlog moderation: reported backlog declined to ~$320M vs $351M in Q1’25 and $401.3M at FY’24, a watch item for near‑term visibility .

Financial Results

Income statement trend (oldest → newest)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$83.7	$113.4	$116.5	$91.3
Gross Margin %	32.5%	36.6%	36.9%	34.7%
GAAP Net Income (Loss) ($M)	$(101.6)	$(82.3)	$61.8	$(106.1)
GAAP EPS (Basic/Diluted) ($)	$(0.32)	$(0.26)	$0.19 (basic)	$(0.33)
Adjusted EBITDA ($M)	$(78.4)	$8.6	$28.5	$25.9
Adjusted EPS ($)	$(0.28)	$(0.01)	$0.06	$0.05

Q2 vs Wall Street estimates

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Surprise
Revenue ($USD Millions)	$107.7*	$91.3	Miss
Adjusted EPS ($)	$0.02*	$0.05	Beat

Values with asterisk are from S&P Global consensus. Values retrieved from S&P Global.

Regional revenue mix (Q2)

Region ($USD Thousands)	Q2 2024	Q2 2025	Y/Y
APAC	$35,653	$47,658	+34%
EMEA	$46,745	$38,885	-17%
USA	$1,277	$4,796	+276%
Total	$83,675	$91,339	+9%

KPIs and cash/liquidity (older → newer)

KPI	Q4 2024	Q1 2025	Q2 2025
Backlog ($USD Millions)	$401.3	$351.0	$320.0
Cash, Cash Equivalents & Restricted ($M)	$109.6	$123.0	$138.8
Profit from Operations ($M)	$(1.4)	$18.9	$16.2
Capital Expenditures ($M)	—	$6.6	$7.4

Context on GAAP vs non‑GAAP: The $106.1M GAAP net loss in Q2 was primarily driven by $121.5M of non‑cash fair value changes in warrants/convertible loan; adjusting for this and SBC, adjusted net profit was $16.3M and adjusted EBITDA was $25.9M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$450–$475M (maintained from Q1 guide)	$450–$475M	Maintained
Gross Margin Target	FY 2025	~30%	32%	Raised
Huzhou Phase 3.2	2025 timing	Targeting first qualified products in Q4 2025	Installation completion by year‑end; initial production to follow	Clarified timeline

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/next‑gen battery tech (ASSB)	Q4: progress toward all‑solid‑state; silicon cell advances . Q1: in‑house 3D printing; 5‑layer cell 99.89% CE .	Validated 12‑layer 48V monolithic stack; >99.89% CE maintained; targeting robotics/AI/aerospace use cases .	Advancing prototypes toward higher integration/voltage
Supply chain/tariffs/macro	Q4: financing/supply constraints . Q1: supply chain/trade disruptions; platform rollouts impacted .	EMEA customer launches pushed to later quarters; tariff/geopolitical risks highlighted in risk factors .	Timing headwinds continue
Regional mix	Q4: EMEA +123% Y/Y, US small but growing . Q1: EMEA 52% of rev; US 5% .	EMEA 43% with timing pushouts; US 5% share YTD growth; APAC +34% Y/Y in Q2 .	US mix improving; EMEA growth delayed
Capacity expansion	Q4: Phase 3.2 targeting Q4’25 . Q1: on track; first qualified products Q4’25 .	Installation complete by year‑end; initial production to follow .	Execution progressing
R&D/product	Q4: ME6 ESS; silicon cells progress . Q1: continued product pipeline; training center launch in EMEA .	Continued innovation focus; ASSB multi‑layer progress; product highlights visible at CIBF .	Steady pipeline development
Backlog/visibility	Q4 backlog $401.3M . Q1 $351M .	Q2 ~$320M .	Moderating; watch list

Management Commentary

Strategic focus: “Our primary engine for growth is a relentless commitment to technology and product development… We intend to achieve significant sustainable growth and optimize our operations with the ultimate goal of attaining sustained profitability.” — Yang Wu .
Capacity: “Phase 3.2 expansion… anticipated to add about two gigawatt‑hour of annual production capacity… we anticipated the first qualified production from this new line to commence in 2025.” — Yang Wu .
Financial lens: “After adjusting for… share‑based compensation… and fair value changes… we achieved an adjusted net profit of $16.3 million… Positive adjusted EBITDA… $25.9 million.” — Rodney Worthen .

Q&A Highlights

No Q&A session was conducted on this call; the operator concluded immediately following prepared remarks .
Management reiterated FY25 revenue guidance and raised the full‑year gross margin target to 32% while noting EMEA customer launch timing and ongoing execution on Phase 3.2 capacity ramp .

Estimates Context

Q2 2025 consensus (S&P Global): Revenue $107.7M*, EPS $0.02* on limited coverage (2 rev, 1 EPS estimate). Actuals: Revenue $91.3M (miss), adjusted EPS $0.05 (beat) .
Implications: Revenue revision risk near term (EMEA timing), but margin target raise to 32% and sustained adjusted EBITDA suggest estimate dispersion may widen on mix/efficiency assumptions .