ENVX - Earnings call transcript Q2 2021

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Operator

Thank you for standing by and welcome to the Enovix Corporation Second Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program may be recorded. And now, I'd like to introduce your host for today's program, Charles Anderson, Vice President of Investor Relations. sir. ahead, go Please

Charles Anderson

Financial everyone and conference to the are call. and After operating session, and Executive Hello Steffen Q&A Harrold quarter review the we will President, Corporation's will XXXX call. Officer the Chief Rust; Harrold results With financial Co-Founder, conclude Steffen and you. Pietzke. Enovix and highlights welcome and second Chief Officer, then Thank we'll us questions. today take

our variety remind contain only call we we actual all statements events website after our shareholder due statements. forward-looking on to letter, let statements of do of materially website. page released subject to these correct give from release kind will and no that Before today update this It's statements at our available differ not a prove Investor are call be shareholder replay letter duty factors. forward-looking press and uncertainties. results of market on you Please can today. to future continue, these and undertake A close will this note risks the These conference Relations and be no our assurance conference that of the predictions later we me available ir.enovix.com. or Enovix that may intend can and are to that

discussion accordance the I with now prepared We Harrold? to our and our review to associated accepted over will We also the the statements discuss filings our turn are shareholder you risks in the financial with safe measures and generally begin. and that harbor to will in call Commission. provision and our in accounting Securities uncertainties business with Exchange measures, certain the forward-looking not are forward-looking letter non-GAAP non-GAAP described principles. Harrold for and urge which financial accounting of

Harrold Rust

commercialize Acquisition call business million first lithium-ion us Corp. public transaction Thank with the Rodgers facilities battery welcome battery industry. our breakthrough mid-July, XD their us I to the to advanced silicon months for the get battery as the to the with everyone our effort on Valley involved also our highlight $XXX deal this completed from I past whole of fund proceeds I technology. want over done. Silicon lithium-ion to combination thank and intense that a few for battery provides for major X,XXX webcast. first results replay. than in-person trading to of analysts you, lithium-ion cell production have production want scale development advanced over to attended day, we up more we and investors our a two The Since everyone hosted net and In then, web watched live capital This is XX the a joined our and press over Charlie. showcase, want company. XXX

in is the and excited We which of our most compelling in we one interest by think are humbled the story, our industry today.

our and strategy. our which the initially I touch will supply and progress discuss shareholder highlight go-to of focusing performance highlights quarter our outlook. depth validation and on the let's am committed We second Now chain. strategy, results, A strategy cover line our This augmented the In discusses our headsets our in around to production on key remain is After and battery to reality smartwatches, emerging Steffen our finished, $XX financial including market we and known our of letter, to communications AR/VR. computing as be second billion computing, of began we technology launch quarter, qualification also XXXX. which mobile samples reality pilot premium and these market, markets. mobile wearables, virtual forecast by initial in encompasses customers from and the shipping market markets

represent of evaluation reached of design approved revenue In QX, revenue the We are specifications end all At These for line performance in phase second very batteries annual through custom for our wins, that of XXXX first customer by year-end production quarter or design funding in programs, initial one products. or remains our first potential begun. programs our battery and demand customer either qualifying design XXXX. work today anticipate of and the high for the final has customers. active with technology Customer key is production from a the a the following million. of battery the $XXX design met standard design case shipping qualification our formerly in quarter have the win we product. of Additionally, samples

We identified opportunities, deemed product evaluating projects, is which our match a of has of billion, demand. technology. $X.XX million potential their our our to we value meet customer battery as also a this is Altogether, an revenue engaged have where annualized for growing incremental define funnel $XXX a and

efforts company scale. We to throughout are accelerating the

For several In included which example, grew the first of we the year, XX% additions we half key to accelerated the hiring. by headcount leadership team. our XXX employees, have to

line. Now on progress I'd like discuss production to our first our

are Antonov of last XXXX, revenue the the track chain supply qualifying constraints to manufacturing our chain including production times pandemic. Francisco. we the We navigate you in all Last started quarter San from of efforts, fly product many one quarter second during XXXX. to on in of midst decision of equipment we global for that first production and of industry-wide quarter, our largest to of and critical equipment a our This showcase in global able challenges the planes one saw equipment to a first Asia to month, world's and an the installed As at line. in receive An-XXX, required key cargo resulting start managed XX were over heroic charter supply

discuss the financial me who our Steffen, Steffen? our will to CFO, over Now, results. turn call let

Steffen Pietzke

you, Thank Harrold.

a found focus can our shareholder letter. few level be on have Our I financial in detailed results topics. a high

Silicon July want that business closed Valley I do, I Rodgers Before Acquisition to everyone Corp our on combination XX. was remind

we quarter raised XX. July we position which from cash, our received On net include bridge same not The or do our million a share loan. transaction, updated we business of day today financials result, the repaid reflecting $XXX proceeds $XX million As on presented combination. the count, second this cash

us balance of count, million very outstanding combination shares XX.X production million were fund Our believe an scale of not business two there XXX.X share we to battery the allows July advanced and exercise On facilities. as with warrants lithium-ion does XX. include of post up sheet is This strong price $XX.XX.

in results. the to product from second did revenue Turning not of do the quarter the we the but product our recognize second quarter recognizing We expect of begin quarter, XXXX. revenue to sale batteries in

Our million. quarter $XX.X the operating expenses second in were

from $XX.X first of comp. comp, our stock-based XXXX, expenses also up Excluding non-GAAP million, $X.X excludes of stock-based expenses in the which quarter in were the operating non-GAAP quarter operating million

million company We’re demand free the $XX.X all Through accelerating efforts for the scale have which throughout tremendous our we products. our of million given was flow, used experiencing for $XX.X to we XX, CapEx. used cash of June are

of which million For between $XXX flow full year million half-yearly to free XXXX, cash of $XXX and use CapEx. roughly we expect

also industry. our hiring, we position we the XXXX creating To half a factory investing and Beyond customers. to summarize establish with a intellectual to and footprint design we are capacity, capacity, are entered leadership adding our balance support strong investing global in an in sheet property second a of

to will drive it now Harrold? executing remarks. focused back Harrold we shareholder value. for which on are would I closing plan, We believe our turn

Harrold Rust

our recap, I for our battery XD wanted effort. production we progress Steffen, first team silicon advanced considerable their entire facility. first XXXX and in Thanks to thank to equipping made lithium-ion of the dedication half

world-class day and We strong and impacts line team manufacturing first every value. bringing all of customer financial a shareholders. are With XXXX driving the half your lives a take in your to entered Operator? a We singularly production. critical a our to that, and important welcoming second demand, to close our focused and resources, appreciate your that of kind the support of significant our we volume new are technology shareholder a breakthrough by with questions. economy. market I to want global strategically dedicated all ready We

Operator

first from [Operator the line Colin comes of Oppenheimer. Rusch from question Instructions] Our

Your question, please.

Colin Rusch

Thanks much at equipment finished just FAB FAB realized you I'm I curious X, on but so where guys. about all installing X. you're with that the

selection any a you're of If timelines? down give you’ve of with put able where sort deposits been site on and you us to can at sense

Harrold Rust

Yeah. Colin, for Harrold, this question. thanks that is

over through there so. we due selection choices. or know, you that we've months process six last as we're with diligence opportunities good in are So some gone progressing think the And a down

sometime to think are going half then discussions before like. hoarding had next good will company, those some that deal well. the be equipment for public that what I be need that be factory will you'll in quite I good for would shareholders. deal a to the see And announcements that We expect And believe that our about year. look first there's we for of

Colin Rusch

this customers customers point, you in many at Okay. terms of how That's total are of that funnel are that point? that at then of are us in number give testing helpful. this number itself And the can testing and a

Harrold Rust

XX that beyond The maybe want for customers so Yeah, additional north with test people actively engaged funnel's I customers would or there's say, broad. at of to that all we're pretty now. not that. right sampling We're short We're to actively ourselves. roughly

trying actively the increase diversity we're customers that in funnel to so And and of products.

Colin Rusch

the us a in are guys of one And to actually slots the side? you just at the reserving our folks factory looking sorts sales give then the many final is those customers, sense considering how the can just benchmark in getting view, around you other commitments of on

Harrold Rust

the in worth space probably an announcement put wearable that's made reservation, to down with customer that's a $XX up saw we Well, about capacity million. you today

I to I close about customers others can with comment be close think, that well. we're that. don't other might to discussions as getting specifically I or not have starting think

is an got else. can't that think anywhere we've view certainly, density a and you I find advantage our technology energy

do we to I commodity. capacity, lock may try so And think over scarce up to more will time, people be because see motivated I think a

Colin Rusch

guys. Great. much Thanks so

Harrold Rust

Thanks, Colin.

Operator

you. Thank

Derek next the comes of line Colliers from Soderberg Our from question Securities.

please. question, Your

Derek Soderberg

in with Hi plans my It like, the around shift production samples start and guys. you have the guys that. wanted to looks Thanks qualification questions. QX. for to qualification taking commentary I

is So the it production qualification bit And samples sort we based by manual entire on automated line assembly will there? expect of fully correct? going ship? quite to those labor sounds be production or you that's operational rely like be of then that Are expect that to a still on to you are should

Harrold Rust

the for question. Thanks Yes.

automated you're in we of when delivering year entire is fashion. those be right. point, will products that made an samples. Fourth this At quarter start So qualification

not will there be set actually way. processing. line up that is here The put the we of any together doing essentially that So, humans

customers year be next So to will delivering thing be be they'll same what the on production. volume receiving we'll

Derek Soderberg

Got it.

that steps around I guess like sounds guess testing, you on run the you've stacking production detail been proprietary able our do production your equipment yet, it sort probably the would capacity tests, So better, guys great. dry your individual sort full as of to you is of line. a been be expectations how on but haven't latest against look at worse capacity, of the up any I

Harrold Rust

I think, actually equipment in two to probably we intended the its on the ways. are which of started working and we terms equipment pleased ago overall some years in do, function, ability

lot lot that tools And pilot some a so, that's there's we did. with of gone of been proof-of-concept work, into this, work a

So tools I it's going the And in think quite acceptance of there. to things go is R&D we to think of as mentioned, excited being quality specs. a is we in out the a We're to rigorous And had pretty would the tools high this be we're red that confidence a I line. both the pretty in have general, bit we to level deliver stuff have improvement to parts you no intended new flags high real And I inside that more set in perform of there's through. make the going about going say able specifications, manual pretty significant from, nature. and factory of to

about So we're pretty excited it.

Derek Soderberg

Awesome. Thanks.

Operator

Thank you.

Our comes Northland. Gus the Richard from of next line from question

Your question, please.

Gus Richard

for the Thanks taking questions. Yes.

inactive wins. quick sales sense much how design is funnel, got you a us Can is of design you've $XXX real give Just million much and active the of wins? a how on and designs

Harrold Rust

Yes, I in front don't have the of me. breakout right

We'll purchase actual really over that's what the of to we're announcements amounts you months, the obviously from do And wins the make as is six down I both trying look push some from things in think, sections. those I And next orders. we significant design what convert those orders. think, that. focus of should us that's into company. And around purchase there's these into probably for

Gus Richard

or can the Got FAB makes X realize we that above X, out need XXX rated is And the to capacity revenue get it. FAB X? That FAB of that sense. you of

Harrold Rust

is mean slowly XXX FAB X something that. capacity million, FAB time. X think and in both size like Well, FAB grow over X the I I nameplate ramp, when of it's

satisfy. will can and X, we in project is out as it, than that lot of demand more that funnel and we're that's of super that X. would FAB have well I come we expect on principle, in a So why FAB of some of demand part that spending resource the important as

Gus Richard

any then pandemics and it. of wondering terms do or need important FAB set X, you disasters. And it people of consideration giving trade FAB Is chains your and in any was we're to seeing go to if Got natural you're because be you more you more capacity – I that would on helpful? regional to Asia in just as color supply for how any globally, up wars be X.

Harrold Rust

workforce a security I mean, to problem, of I multi-dimensional a it's to issues. costs property, kind of of mean, there's right? intellectual Yes. from of your a bunch considerations trade

us FAB for that which built zone. company a depending FAB we've with X might a we've help in is located also things the foreign One of trade X, you're where done

from from leave kind tariff U.S. go duty and exempt extent the those of we're a, back. and standpoint essentially the those to a where So products,

pretty looking so in X, each and think gives FAB in parameters the has I we And matrix the that flexibility there's X, But it's shareholders. we're different, for FAB the we're got attributes. choice of at what best different a for locate option we lot those handicap in final hard cause us but is picking think to of selection firm terms a where of

Gus Richard

to little expectation is And – military Got with will capacity applications for more can color the this on North, lead road? a for one give last work military, the then the an that you're higher and just that bit is revenue investigating doing it. you the down there is batteries the ultimately me that to

Harrold Rust

Yes.

our about think new I program. a pretty I of market I mean, initial us we outside for that markets. that excited think view as kind we're of

carry standard of density much carry Obviously sensors they'll weight, is allows about of about a have they but time kind the everything same to electrified. batteries themselves battery what so so them XX – that as block pounds building them Soldiers a carry there, each, battery. having there's in to energy do higher of going they're their probably more of

and a significant this turn revenue forward. hope get a that, delivering spec middle very evaluation. will super going actually will turn market that's into critical. than being We is the So is this see cells really we This company years. an we important And for for more us them into of we as the to into amount

Gus Richard

Okay. that has And remind me, how long that, contract you signed?

Harrold Rust

length in you also of soldier I'll one batteries field at the just mention, our is getting stainless honest. You the the to be recall case in obviously in and if robustness out. the other don't We're a year. for the to going I know, I'll don't you're cells but be shot point, – I there's One the the try batteries contract, important you're and deliverables next building of steel. near-term them recall things some is the recall of over probably

is addition energy some interesting Army so standpoint and just the a to the obviously from That to And as robustness well. in very advantages there's density.

Gus Richard

much taking Thanks for Great. the questions. so

Harrold Rust

welcome. You're

Operator

Milligan Thank of Our the [Operator Trading. you. Williams next from Instructions] line from comes question Sean

Your question please.

Sean Milligan

questions Hey, afternoon. for taking thanks the this

of or I partners think front, I in working on about that in pack could maybe they that module wondering discussion you advancements mentioned next that terms letter, the with, shareholder over years? some players you've progressing and the the on you if are several expand the types was of EV you made see how you're automakers and and

Harrold Rust

that for question. Yes. Thanks

multi-pronged a there. think approach I we've got

said, market. with we auto And like We to those. specs talking companies engage suppliers, want basically you multiple of well. components, space. all with that ways We're that into are enter There's to suppliers, actual as engaged with also

with cells demonstrate that parties the into their are parallel also a more we're with set actual, do. with along Energy, have So We're the to evaluate sampling those performance various in building program around Department material to revolves chemistry's materials executing which EV spaces them essentially the you of in batteries technology. ourselves standard the our three-year

that. So we're optimistic pretty bullish and about

our view serious that next And that sometime obviously leads those we'll both push is agreements efforts, announce, more so in into with is development specific these a engagements supplier becoming and supporting that spaces. next And Our by, by that, year. companies us, goal space the XXXX. over we'll year, to,

Sean Milligan

just spend figure based about when figure billion next you're of upside do percentage couple Okay, discussions TAM, great. that reserved talking And just realize the AR/VR, years? customer the over with, having also space to that $XX we if second you trying that that's has is to and people the is or like to a curious we of upside AR/VR have the start there in within and and capacity in what on the reserve to that plant

Harrold Rust

stage Yes. I now, could AR/VR and actually, timing the, interesting, huge, would phones is but one Mavens. those essentially as cell of down a completely be a say from early that believe be the The that even is Mavens of ubiquitous space right? It's the as almost kind technology certain and think road. electronics I the consumer not

And number see them now in is are that said so, they area. challenged what the essentially that the platforms. be only Batteries groundwork they gets to has need those products battery super doing to they're to players and where build of a And that is development ours.

working be on to with space. excited super we're so, And people that

of lots money that think does say some these anybody's lots I in big pretty it to question before is are making that. And terms being billion that of the customers In My going to soon probably how lot is call, portion spaces these is, pretty in and a is happen. ARV higher. of guess would a maybe The $XX is I happen? the small probably investing AR XXXX that's bets make

of also us a and in ahead. market pull that And business so portion could it's significant years significant quite the in the be and possible for

Sean Milligan

and And in that takeaway with materials, supply signed be chain? projecting earlier in agreements of Great. about one or ordered should equipment the that the for material terms on of needs timing raw just side, more that you too, terms of ramp about have questions fab to of you're we answered suppliers you the when raw the how think

Harrold Rust

agreements active we've So this supply pretty been executing Yes, year.

is of agreements, some we've philosophy materials. multiple got supply general redundance a critical so supply our in that Our

need, in we how been we're comes we've significant foresee issues so getting staggered XXXX, in And over consumer terms at a And more get continue be over access to in And of and huge bigger in consumer that – we timeframe. don't we that. sorry, supply XXXX, pretty I two are not XXXX. online. negotiate agreements successful into step these material a much time as those any to those certainly, bigger materials to we're

I leaders had and pretty picked, that, and are think materials, we’ve we happy we're volume raw pick with high I industry which runners. very think

of using in ride So industry trailblazing to extent and be the what that we're coattails not to kind trying respect. try some is

Sean Milligan

for Thank Great. you taking the questions.

Harrold Rust

My pleasure.

Operator

And Instructions] any back like Rust the I'd queue [Operator not this time. Harrold the to for program showing in further you. to I'm remarks. at any questions Thank further hand

Harrold Rust

you for and our the attending heading the everyone direction we're company, your Well, about super making. thank We attendance. the earnings excited progress call We're today. appreciate we're

battery up a for And customer the shareholder line everyone. this We singularly towards we're progresses first end that on year satisfy and all as focused to create progress with the kind to you our value needs. share are excited bringing of

So for your thanks again attendance.

Operator

does today's in Thank day. conclude the may you program, disconnect. and your This Good for conference. now gentlemen, you, ladies participation

Enovix (ENVX) 11 Aug 212021 Q2 Earnings call transcript