SES AI Corp (SES)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $3.527 million with 74% gross margin; net loss was $22.651 million (-$0.07 EPS). Revenue declined sequentially from Q1 ($5.793 million) but improved materially year over year from $0 in Q2 2024 .
• Full-year 2025 revenue guidance of $15–$25 million was reaffirmed; quarter-end liquidity was $229 million with no debt, and cash used in operations fell to $10.8 million (-51% YoY, -53% QoQ) .
• Strategic catalysts: launch of MU-0.5 (agentic “Deep Space”) to accelerate battery R&D; agreement to acquire UZ Energy to enter the $300B ESS market, with CFO highlighting UZ’s projected $10–$15 million 2025 revenue and an intent to scale substantially thereafter .
• Post-quarter, the company repurchased and canceled 871,754 shares for $1.1 million ($1.27/share), signaling confidence and capital discipline; management reiterated focus on disciplined M&A and share repurchases .

What Went Well and What Went Wrong

What Went Well

• Gross margin of 74% on Q2 revenue, driven by high-margin services with automotive OEMs; MU enterprise traction surpassing 30 trial users, including new Japanese OEMs .
• Operational discipline: cash used in operations reduced to $10.8 million; strong liquidity of $229 million with no debt .
• Strategic expansion: MU-0.5 released with agentic capabilities (“Deep Space”) to compress R&D timelines from years to minutes; agreement to acquire UZ Energy to integrate ESS hardware with MU for data-driven improvements .
  • “We are excited to leverage UZ’s strong marketing team and hardware platform… to expand our market share in not only the global $300 billion ESS market but specifically in the United States” — Qichao Hu .

What Went Wrong

• Sequential revenue decline: Q2 revenue of $3.527 million vs. $5.793 million in Q1; sustained operating losses with Q2 net loss of $22.651 million despite improved cash burn .
• Continued elevated R&D and G&A spending, though both trended down QoQ (R&D $19.087 million; G&A $6.520 million) .
• Consensus estimates (S&P Global) were unavailable, limiting beat/miss context for EPS/revenue; investor focus likely shifts to execution milestones (MU conversions to paid/JDAs, UZ integration and ESS pipeline) [GetEstimates – no data].

Financial Results

Liquidity and Cash Metrics

Revenue Drivers (qualitative)

Estimates vs. Actuals (S&P Global consensus)

Consensus estimates via S&P Global were unavailable for SES this quarter.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic platform vision: “Physical AI is the integration of Molecular Universe with physical systems including drones, humanoid robotics, EV, UAM, and the largest of all – ESS… We expect exciting revenue growth to come from five areas of focus” — Qichao Hu (software/service, materials, cells, EV development services, ESS) .
• ESS integration rationale: “By integrating with UZ… we have material development for LFP/sodium from Molecular Universe… hardware integration… and actual data” — Qichao Hu on why UZ makes MU more powerful .
• Financial discipline and buybacks: “We utilized $10.8 million in cash for operations… concluded the quarter with $229 million liquidity… in Q3 we repurchased and canceled 871,754 shares for ~$1.1 million” — Jing Nealis .
• MU-0.5 impact: “Deep Space conducts senior scientist-level battery research, reducing product development time from years to minutes” — Qichao Hu .

Q&A Highlights

• ESS acquisition and M&A pipeline: Management emphasized UZ’s early ESS pedigree and MU’s differentiation via real-world battery data; active evaluation of inorganic opportunities across materials production and applications (drones, ESS) .
• Drones/UAM ramp: Revenue increasing; US customers pivoting supply chains; Korea line being updated/certified; capacity exceeds current orders, reducing near-term bottlenecks .
• MU conversions to deeper engagements: Large battery makers are “challenge-testing” MU on problems human scientists cannot solve; next version targeted Sep/Oct to improve cell-level accuracy, potentially accelerating conversions to joint development tiers .

Estimates Context

• Wall Street consensus (S&P Global) for SES EPS and revenue was unavailable for Q2 2025, so we cannot provide beat/miss context this quarter [GetEstimates – no data].
• Given reaffirmed FY revenue guidance ($15–$25 million), the sequential revenue decline likely shifts Street focus to: MU monetization (trial-to-paid/JDA conversion rates), EV OEM milestones (B-sample progress), and UZ integration with ESS hardware/software for 2026+ revenue scaling .

Key Takeaways for Investors

• Revenue quality remains high-margin: 74% gross margin driven by services, even with sequential revenue decline; cash burn improving and liquidity strong (no debt) .
• MU is the core growth engine: >30 enterprise trials, agentic “Deep Space” released, next version targeting improved cell-level accuracy — watch for trial conversions and JDAs with large battery makers .
• ESS is a major adjacent: UZ acquisition integrates hardware + MU + data, positioning SES for ESS solutions aligned to AI data center power needs; CFO flagged ~$10–$15 million UZ 2025 revenue with ambitions to scale .
• EV OEM programs continue: B-sample on track and development services remain primary revenue driver; cross-chemistry electrolyte advances broaden addressable markets (Li-Metal and high-silicon Li-ion) .
• Capital allocation: $30M buyback authorization in place; Q3 repurchases executed indicate opportunistic approach; M&A pursued to accelerate platform strategy, with liquidity supporting runway .
• Watch execution milestones: MU paid conversions, ESS hardware/software deployments post-UZ close, drone/UAM capacity utilization, and sustained reductions in cash usage — these are likely catalysts for stock reaction despite lack of consensus estimates .

Sources: Q2 2025 press release and exhibits ; Q2 2025 earnings call transcript ; MU-0.5 launch PR ; UZ Energy acquisition PR ; Q1 2025 press release and 8-K ; Q4 2024 press release and 8-K .