SES - Earnings call transcript Q4 2024

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Operator

Good afternoon. Thank you for attending today's SES AI Fourth Quarter 2024 Business and Financial Results. My name is Shayla and I'll be moderator for today. [Operator Instructions] I'd now like to turn the conference over to our host, Kyle Pilkington.

You may proceed.

Kyle Pilkington

to year call XXXX welcome quarter our and full and results. everyone, our covering conference fourth Hello,

Joining me We today which our Executive letter Officer; financial are after provides Qichao Hu, Jing just as Chief Founder a Nealis, results. business Financial well p.m. Officer. X:XX issued update shareholder and our today, and as Chief

website You'll press release Investor shareholder conference today's in in find with the our a call section Relations at our of letter a link ses.ai. webcast to

results this reminder a started, include discussion the are differ filings. actual our or uncertainties, contain and be performance in statements our may earnings Such statements. different of get are applicable The expressed could our meaning or expectations today we our in Before statements those today. and from and predictions which materially statements is release to to forward-looking may our that information on results these These and securities forward-looking our latest involve SEC from and cause cause or in legislation. uncertainties as not expectations assumptions based that limited implied certain risks within those of the detailed to and risks, future materially current

business This pass quarter. With the it as afternoon, that, over review we results will our I'll as well for the to Qichao.

Qichao Hu

to of company revenue with energy in robotics our stage move relationships, plans we new market pleased on the quarter and to for BESS. for reap fourth are evolution battery additional our full AI our next era streams on AI an All-in EV Good Kyle. our us existing and the systems, as to earnings you revenue-generating a and we afternoon, share call. XXXX deepen of joining Thanks, SES update benefits new Today, expansion for thank storage year drone on present and strategy, the

for the seen, last the fourth the AI first the revenue quarter. have several made time several we SES may is you including weeks, reporting in As have announcements over

commercialization longer growing look in pre-revenue and no our XXXX pack by company continuing on are and revenue We a forward to beyond.

like develop our the First, for with our to continue and These demonstrate to use relationships value the Li-Metal battery signed fourth partners in to million of can AI-enhanced would material partners. for I both our with batteries. development, X AI the electrode OEM space. automotive for highlights partners batteries contracts value the to Li-Metal solidify and EV lithium totaling quarter, $XX EVs the especially an ion see contracts Lithium-ion OEM Since address up we enhanced provide that in these

Second, properties of I a more with and mobility humanoid by universe we changer first physical molecules. drones suitable which XXth for unveiled and XX for In use fire universe molecules UAM XXXX, robotics. with battery the SoftBank, a the in important This the address to small are discovered drones order air an entire these efforts, maps cells chemical AITENCXXXX cylindrical data and blended accomplished robotics. work have cell management urban CES the XXXX or at signed Earlier significant want we XXXX January, purchase for Show, we AI-enhanced communication in electrolyte an satellites. perhaps to SES as was to batteries the AI's of electrodes, game for

interfaces metal cycles. lithium especially in metal and learned high old and and/or Our lithium in development electrolyte terms human could address also and silicon lithium it's between electrolyte agent lithium slowing scientists and of AI similarity ion cells silicon high that challenges, ion

universe for energy discovery a us add large density a our in commercial customers both deliver scale. robots, through lithium high and humanoid high-silicon applications. manufacturing now and power lithium other on density a through molecular cell tools contract allows are effort an to EVs, drones, power model is CapEx-light ion. in and to and metal This high is available and XXXX industry dropping format The is We standard replacement. the

SES in systems, AI is $XX safety energy is Manufacturing an kind targeting AI of Third, for to of and for platform, Last site AI AI growing This is announced to of the mining This and storage solution future. BESS. first XXX-megawatt BESS this advanced can million its our energy and we replicated and in planning includes which the [indiscernible] SES believe signed up that we MOU the month, with with expand be Safety Avatar, solutions. new project systems, SES up deployment for hours to AI field, for involve our additional something relationship crypto battery battery into AI, the to storage that provide Texas. battery partners a that with will first Safety

help entire to Powering the months. molecular success In computation Avatar. our the upstream XXth years are from focus areas: our a and X downstream X,XXX universe, universe molecules discovery, molecular accelerate with to effort few commercial software, XX this universe of our than battery just safety, map small NVIDIA on enhanced material GPU to chemistry more collaboration

now electrolyte help think interface model this the proprietary that the the universe. solution mapping function have largest synthetic molecular AI These discovery. mapped XX is also data database, novel train We world's accelerate we're levels. We density our to and Xth of and theory single will X.X% molecule unique

has silicon, form ranging factor currently mission including presented factors, data and chemistries, cycling metal data robots. a EV, mission of profile variety conventional high Avatar, metal conjunction and but and for anodes, drones seen pouch, lithium developed it's a model cells management lithium chemistry cell pretrained have foundation before monitor from and and BMS, and across BSS and cylindrical and and predict to health With footerspace including LSP high battery been profiles countries. and on new BESS we NCM, and to agnostic and silicon As incidents to AI-based manufacturing battery works later, This lithium we ion LFP they happen. graphite have and system, in other for with even model

recognizing first the during AI and is some great but especially time the exciting only history. advancements in We of XXXX the our SES at AI for closing, with has see start continuing things revenue not end seen All-in critical is going XXXX, on of the forward. In future. us

see then JVs. The cells through Here things of model. our and CapEx-heavy change in manufacture OEM some Originally, the EVs happening. required I and for to the business are we of at envisioned scale costs offsetting some plans

focus leverage models company pursue be expansion XXXX much Now greater anticipated levered and and opportunities with selling evolution its to XXXX, work, scientists manufacturing battery and an its teams of our using materials, business and of CapEx-light technology A earlier a X our to sales believe hiring focuses a revenue AI of selling technology verticals and much pre-revenue ability EV-focused to that our heavily that from AI prior model AI cells. revenue company larger new of chemistry cells battery enabled battery marketing than core can along EV. than to contract on and adjacent AI imported continued a electrolyze tap model, to contract electrolyte with on to X will in generate we from

financial continued I'll updates. turn Thank interest now in for over And AI. Jing to it you SES your for

Jing Nealis

insights XXXX. quarter Good and plans year priorities, afternoon, fourth into financial fiscal discuss and share everyone. XXXX to for I commercialization will strategic our am our the pleased I and outlook. full our financial health performance provide results

lithium AI-enhanced metal to customers lithium and revenue partners XX, driven with reported our and beginning quarter for was business. our blanket ended by metal into of contracts For develop primarily SoftBank December for the and to a This revenue-generating QX OEM cells drone fourth million, $X We applications. automotive our applications XXXX, of marking revenue evolution EV lithium-ion of milestone. XXXX batteries delivery like commercialized our perhaps and data revenue the initial

XX% Importantly, demonstrating proposition a this strong of OEM our the AI gross and revenue value comes with and strategy. technology margin,

expenses. Operating

in for million Our initiatives and We GAAP operating by $XXX.X projects. costs. fund and utilized in general driven with operations strong concluded million million research future primarily ongoing ability and the during the cash ensuring position our development expenses to from capital the We Liquidity. expenditures flow. quarter, were $X.X of Cash and administrative $XX.X million, quarter. quarter a liquidity $XX.X invested

expenditures in and guidance capital capital $XX below achieved million. of previous of This full cash $XX.X $XX.X end For the million, our and the million includes year expenditures $XX low total to usage million. of a XXXX, million we $XX.X of usage our operations of cash operational

us look to for we we provide SES ahead, positioned allowed guidance disciplined continued on greater The growth and As AI for XXXX. some is investment has revenue now XXXX. have well visibility in

intend to particular focusing As year first expectations this rather outlook. than this providing time as during you we revenue outlook our conservative quarterly this the that on of will being we outlook in any full We year the needed. expenses. Therefore, cadence or are and are the know, update be

our XXXX anticipate partnerships and million to revenue and between growth $XX Revenue efforts. be million, from $XX expanding We outlook. commercialization reflecting

We AI from cells metal expect delivery EV and integrated battery of to lithium-ion of development UAM, generate of AI-enhanced storage customers solutions. battery energy with revenue batteries to robotics and and delivery applications, for drones systems lithium our

Planned in expansion advancements, million, strategic $XX prioritizing million $XX and commercialization usage spending. to R&D and Cash and management. We operations with forecast model. capital-light market total business a cash CapEx between be

XXXX. to our We a continues we investments. long-term position CapEx-light maintain and and us. growth strong With financial with on opportunities liquidity our Our extends tremendous see liquidity model, discipline organic focus well inorganic ahead support adequate vision runway expect into of our to strategic and business

with capture disciplined We in a further growth these our revenue liquidity. particularly capitalized from activity, capital additional markets are fashion, projected our well opportunities and/or enhancing to potential funds

transformative with our and With R&D-focused about a that and financial a to signals disciplined a evolution margin Achieving revenue, company we an excited from moment XXXX are year AI. positive the ahead. SES milestone first management, is pivotal business. gross opportunities revenue-generating was high-margin our commercial for partnerships revenue growing a

SES support you. in continued We your and confidence appreciate Thank AI.

Now to back the the call I will operator. turn

Operator

[Operator Instructions]

Dong comes Bank. question company, Deutsche Winnie Our with the first from

Yan Dong

the was OEM for leading was $XX about Qichao, signing up led wondering auto in to talk particular, mentioned it to there contracts can then that And maybe what shift? partners. totaling here. strategy shift this you In million X up

Honda, are they the with? to able GDA partners ones partners has is with you how same that And are Hyundai? OEM different reveal, those If it previous from SES

Qichao Hu

Yes, Winnie.

battery addressable lithium the just X fundamental. level, noticed battery electrolyte we that then battery larger. with you was X just and right? X lithium safety on could for a become lithium-ion. level in for cell chemistries, we're can It material a just it side. it the our metal, also more And work technology, also lithium actually markets and as then technology, this wasn't was beyond as notice I and metal the previously, once EVs, to to And at think you discovery then platforms apply core focus actually So metal more the we And to a multiple X just then working expand to OEMs we much that apply just these platform

we of us almost market course, make of anyone to from we just single out every battery a course, in I think technology a So single there. -- platform across technology X jump

think jump jump. also in as target single very the I of OEMs a a drones this drones, well X with to solve a both also obvious most terms and was and EVs, the across air that robotics, then So chemistry of and the from single transferability but multiple that X robotics new then for in I time market the X even guess ones, other of and being just every is that mobility. quite working we a OEMs, important long they the exciting think them markets chemistry And urbain been do battery have

we So multiple why for markets. the motivation from that was to switch a yes, chemistry just single

Yan Dong

sort up was the initial margin to this I just which should XX% like metrics of look an follow this contract very in heading guess, economics evolve If [ I of behind able should sort type QX, any that ] how impressive. we will that at? And on think was XXXX? Is Are into the want and that? to you of we manufacturing. gross

Qichao Hu

to mix of I But that a it's scale compete think just of I incumbent a of any AI that. our models was high to manufacturing, battery the service consumer have actual mean to is in the early terms the battery the at selling too players. large these I next-generation margin. known think it's as margin forward, well as And companies address So goal going well country actually And of with cannot to the that manufacturing sales.

manufacturing achieve why the on this application So margin. But going high based to numbers customers. on is we actual do to and evolve that's the control particular volume, based

Operator

Brian with from Tower Water comes company, Our question next the Gordon Research.

Brian Gordon

significant though. really of are a follow hardware. the model. going you talk a transitioning guys how seems It's up opportunity like revenue. achieving that the you margins, business X different both and did are want impact for about on say, event software It congratulations the all, of of, First let's revenue margins ways there the that I to on is company. gross selling you selling kind bit Could versus X that potentially forward? how see sort little could for

Qichao Hu

sell we a just time, software the pure sell high-margin the the because hard business. it's safety, the At both want just to Yes. that's Obviously, for materials hardware. the software and battery to without the same

like the that carrier hardware and the to we of a top the the material a manufacture that. of And cells software on demonstrates get are our then -- customer side, software. and counter the like the power you hook is benefit materials, sell the the for So these on cells hardware and and the

the So mix demand we the we more to once the and going between to then to a be is cells point initially, software. it's software grow business. be shift and margin to pure But do going this

And but is BSS a margin, partnership example, you be sell to to it's high want Avatar, for then to attach of software And with hardware. the with course, the pure why it Avatar ASX, the BSS, to that's for same a will we solution itself hardware it the software. very in thing initially, the entire -- is, just hard

Brian Gordon

like the an going definitely as able company subscription we batteries? So ongoing layer selling it's something that forward these to revenue sense. on expect makes be Should will that then

Qichao Hu

have That we is where few companies discussions a Yes. subscription few battery actually offer plan. And with the to then the a we models.

battery new is in map the For or show that example, a to in letter, a shareholder any way to that [indiscernible]. that develop of needs map we tells that look for that company actually company any treasure battery terms

and that model so that map. also That's used we'll map, this mentioned. a So create we map, sell sell that subscription discover products annual AI We was map. sell to the from that that you

Operator

Jed the comes question company, from next Dorsheimer Blair. Our with William

Mark Shooter

Mark Dorsheimer. The echo revenue again different Shooter different with for the is quarter those on Jed revenue fundamentally business sentiments, on and the I'll multiple outlook. congratulations streams.

can in you you breakdown that revenue, So guide to rough give do of from? a that's think the coming where

Qichao Hu

Yes.

this and come letter, then the drones year, just this high roughly bulk come expect So year EV BSS mentioned of to the just we level, and combination from we and a and this of robotics, to from in rest year.

forward, and Now next year then going that could change.

Mark Shooter

Got it.

providing BESS, Okay. you're the plus you're doing to manufacturing integration using cells the the And then application PAC Did that -- you're I full BMS? stack. correctly, contract the the that and hear contracted -- with

Qichao Hu

Yes.

Mark Shooter

market is that And into? difficult break a to Okay.

Qichao Hu

cells obviously also some behind market. Good very think players the some a question. X It and in terms X are the And parts It's these depends But fragmented. quite fragmented used have to of you at the actually about of cells market. they and types and core you market I the the common. meter are being big of And all of different then the the across are of meter see market. by more in the pretty on use parts different types front dominated parts of

-- data so And these data. from players. access the nice data, the to the to the second size we medium medium-sized. this by doing these we data, then to to the live This demo that data the that, and Avatar And are data we ones But all the and Avatar more gather be the the data pretrain use into show the so The we get used formation can also Avatar. is as to cells from larger train this into used ones the fragmented larger monitor used we then come same break we players. then health. thing and by manufacturing then Avatar, these break use the train And that data a the

Mark Shooter

it. are applications. are supply drone the manufacturers? last me Where regarding drone Got X helpful. your And And contract any very your sensitive region? chain the of for regarding That's customers

Qichao Hu

Yes.

And mainly do and a drone then manufacturing this where a are source the through are Asia. yes, we more first they to in then they have to And plans customers that. then Asia-based And like sensitive now U.S.-based and to move phase have we us U.S. manufacturing. would we to a go country So list.

Operator

may At answer this the pass proceed. to time, Kyle I'd to back like Kyle, questions. conference you over to few a Pilkington

Kyle Pilkington

call. of As investors now. to through a received with prior from the a past of quarters, number questions submissions selection we submissions, solicited we'll those and We go

today stability silicon applications? question be for the the made specific would electrolytes first the and With of advanced is high is what cells SES' anodes with performance durability preferred is EV new cycling cells density and energy of electrolyte. charge What XXXX with the materials? these new The anodes, the is these rates silicon limit of for expected the likelihood cells

Qichao Hu

high-silicon silicon, have And the anode of and like ion, metal to it the fact, metal. then Yes, lithium the actually lithium interface. the more the electrolyte in quite higher similar lithium this you perspective behaves from

And from swelling so high-silicon also and cycle life. gassing that to suffer challenges, currently short and lead

-- more new And in the XXX% the then electrolyte, go and used. life. enhance silicon life can the that's expect improvement we to cycle to life. cycle on amount actually double really And we how if cycle it's the much of We with than actually silicon, significantly cycle we depends improved actually this

higher So the silicon. as we amount the that are improvement increase of is

Kyle Pilkington

is, it secrets? have just solvent competitors can the copy new Is patentable we discovered? or trade question AI next The Great. to your

Qichao Hu

That's will this something have can. well, especially you people what industry, works that And if in copy. they really

to to just not the the compete we speed innovation of on is the itself. focus way try only and more the And so innovation and speed,

the so works finding others, works shareholder get And and a it showed or that's very not yes, it this will new, example. in then how For example, good we're electrolyte in and a electrolyte copy map it that this a new letter, that the we well, industry. if just new just

If meantime, But work just it doesn't solvent. works gets well, well, have not if And new a won't no you a new selling we're then it it it. copied. in case, And material. they copy

No that. the tool on X map, the and X the each So this a selling else map. and find sovereign. has We're to no start this map will that this pass map create map to is

So we where X now, for that. new And solvents different for have this no applications. the copy are ability ability to know can these

Kyle Pilkington

Thank you.

Going next SES battery improving enhance AI down manufacturing and the technology list, how is AI question, performance, as evolves, to safety models its efficiency?

Qichao Hu

So recycling the the train more to battery visibility that synthetic a cost data. and and models models denied both properties. actual from AI and actual just data sophisticated. we for more and of the data more language train the has large before, a lot, molecule data also see these lot these we're more have gets this They And it us use more we come models, and asking models, especially data of has the data to allowed foundation and data both down with and

-- also cost the lot. and So improved and efficiencies have a

So actually a in possible it's way than to much these training database on more before. cost-effective now massive run

Kyle Pilkington

XXXX are might candidate from a cells. pre-submitted do than one, the be automotive? an high is X version It seems questions. metal market selling the We'll cells. SES into more If these the what for better lithium silicon earlier has prognosis EVs the for #X

Qichao Hu

parallel we silicon. sort we metal are lithium the previously, cycle improving now tracks. high silicon of And life focused then high actually the metal. And on So lithium are just of and

that you closely. do we have cells we earlier, a I were OEMs then with And quite that So X we're both. only not doing that been pouch. very use XXXX because make think mentioned there address cylindrical OEMs And quarters few working

that silicon, we cylindrical form metal, lithium use address the then to OEMs address pouch. we our And not use we because our now factor. address to we OEMs didn't do So that use have before XXXX that

not lot really make XXXX that that thing OEMs this address we also robotics, address before. and us robotics. market same -- a really And for did to of a EVs make allows big also So

Kyle Pilkington

to Thank you. the of I'll turn With call. a for over the that, moderator it Excellent. conclusion back

Operator

conclude call. of and will That your the your you for today's rest Thank participation, day. conference enjoy

SES AI (SES) 25 Feb 252024 Q4 Earnings call transcript