ENVX - Earnings call transcript Q2 2022

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Operator

Thank you for standing by and welcome to Enovix Corporation Second Quarter 2022 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

As a reminder, today's conference will be recorded. And now I'd like to introduce your host for today's program. President Relations. Vice Senior Anderson, of Investor Charles Please Sir. go ahead,

Charles Anderson

President, everyone welcome you. call. Corporation Steffen and Pietzke. are Financial 's and Thank Harrold With Executive Enovix Rust, Co–Founder, today conference second and Officer, results to Hello Chief Officer, financial quarter us Chief XXXX

and Cam call. review Ashok We the Lahiri be Officer, Q&A by highlights, Harrold Technology will Chief financial portion Chief today also and we'll operating session, Officer questions. our and then for the Steffen the will After Commercial call. we'll of take joined Dales, and and Co–Founder, the conclude your Q&A

release, at let continue, A conference this will forward-looking future risks of conference These after we expectations the our market of results note this based on replay actual second be you XXXX differ call letter, call and to today a to due on website. subject or and available me page Before website that factors. are current Relations may the contain we press materially available all released the ir.enovix.com. and statements that are kindly remind our It's Investor from Please closed of shareholder letter shareholder events forward-looking today. later that quarter our variety uncertainties. statements on

of we undertake required statements to prove All to Commission. of as no today's letter Exchange by and shareholder these currently are our For future with refer in do disclosure Securities XX, August and financial XXXX, statements will that factors and us. assurance today, except affect law. discussion on that these could available We to made correct and please update our a the results and statements no to intend business, not our give information the the as filings duty based be can

accordance prepared During this are measures, also Accepted in we discuss will Principles. financial Generally with not non-GAAP which call, Accounting

now shareholder our begin. to our financial a page in financial on Harrold? the Investor to turn posted call of Relations non-GAAP the Harrold measures letter, over find reconciliation I which GAAP the can of will measures is You website. to

Harrold Rust

Thank you, Charlie.

quarter easy it something had The up evolution that sitting there battery. for production equipment of must production over way architecture second we make XX started the been fundamentals we major as first an one We the so materials. I'm in we be felt today as where to advanced deliver the how and to beginning. years. building would in product the was XXXX, change line A be we a ordering the start have wouldn't of could much over from we the by the people On and also quarter our pull paper, a energy want but companies knew a that improve back enormous strategic modern was could for Resilience our it architecture a going get milestone ambitious the line the have importance. we gutted to battery the In made at of off best better our can the core publicly customers goal one then that by for we deliver started an year. and had and belief and to I how time. in When for Enovix report a just competency, failure. great we revenue figured XXXX, Today, excuse our Fab-X brought product that that our as spring challenge to to prepare knew company. we used products core XXX% to COVID the pleased prior Enovix I'm to in of our industry We density battery, have We did multiple our that Industry Enovix in accomplished to of job quarter first done right as didn't. for later, moving a batteries were months was the have at to few call knocking this world in We the stop. leaders that that becoming recognize goal about our values of note the down one [indiscernible] bring and with a Fab-X commercial product the qualify we and strategically of US become important. In aggressive production taken February, distributors. and to in company, set since when XXXX, people. we we of second have into become plans product revolutionary announced out a an what traded increasingly moving batteries eye from It forward. turns and production delivered out

cap $X for Army in the this need customer. is manufactured a portfolio in in quickly. advanced business, product proud evaluation And US. battery into quarter strategically this batteries who soldiers they On in and battery the tech have the to Army to large. the wearable energy important is mega technology completed test product a after completed to high refer cells US custom This the I'm US these with we has million companies, accounts. are the Two and same know across all program calls critical account told contract technology have commercial field. initial received third we in companies shipping as their build our that Specifically our told opportunity that, the the of which revenue very the us us in carry sales we product strategic from and phases that Equally second to fourth goal best development we recognize wins. top second strategic our Fab-X the from three packs, we of for quarter with of announce quarter, follow-on that we move is best the second tested a

for same resiliency considerable is domestic soldiers battery estimate million currently providing can the advantages our We requirement. approximately military at battery total Our based operational that programs. the on established is wearable our of annually $XXX market US while military believe deliver time

work is future solid made continue It funnel no our I effort quarter, moving There to are get improvement multiple ramped While bringing volume factory we'll in we is up a and kind first done. when and output factories in yield I'm we towards our job on output career, manufacturing have heart. on We super the a path to focused the continuous of I'm through operations metrics. relentless a improving demand. but at line. improvements. customers of the to yield need easy increase confident we an person high during of our orders, manufacturing meet my

for the quarter in modules This of install to quarter. improvements Fab-X third line individual plan process includes improve prioritizing are We the down conveyance. and taking battery the portions

had the increased be close half our footprint well Our flow year. the learnings are goal into QX our our the the to in We're extended learning us GenX latest incorporate from in technology. design but for Fab-X of be to GenX all this to to to the line finished the Fab-X, putting do to is installed output. We GenX hoped designed as second needed QX, XXXX. expect all now have half activities of with of ordering in Gen-X ramp production we as We break design. portions in to start of production our work Major GenX the position

that next we paths the in roster want capital both strategic JV I an capacity to several options, the previously grow of for likely This reemphasize such have As light requirements support expect company, to also we have to a is and viable be years. domestic Asian our it or discussed, and as market pick licensing. also multiple of the including electric the fabric the location a path may to vehicles down. path

to let turn Now I'll remarks. discuss who the me and Steffen that, our call after will closing some make over financials

Steffen Pietzke

Thank you, Harrold.

I spend product customer high service in level revenue a program. revenue second my with time be our We shareholder accounting of for the can the financials million covering $X.X topics. initial few will a of million $X quarter us detailed as in one development of letter. Our result found recognized completing phases of total a

compared the first XXXX. quarter $XX loss loss in EBITDA quarter of of adjusted million the Our an was adjusted second EBITDA $XX.X in million to

comp, of the the and excludes $X stock-based expenses with quarter operationally $XXX of of second XXXX which capital expenditure closed quarter from $XXX of $XX.X down Excluding cash expenses up million million used million of capital in $XX.X due timing were our of on from in quarter XXXX, first used non-GAAP due million net XXXX, million non-GAAP operating cash com. to We equipment of of in the to purchases. also quarter first stock-based operating the million the $XX.X

expect higher higher for Fab-X payments our as rest output. capital outfit production continue We of we year and for make the to Gen-X initial line spending the

Now let's discuss our guidance.

half million will CapEx. now For expect full to of cash $XXX and of roughly we $XXX which million we year between expect XXXX, use be

which As cash our expect we design million between million Harrold impacts of for the to complete and now use. $X our timing we extended XXXX. have to line, $X mentioned, the of Core year recognize timeline full our revenue, Gen-X

have top end in We in given prioritizing via over third quarter. range the of the Fab-X the improvements shipments lowered

view summarize, recognizing we the target We of To also of second latest achieved incorporating our revenue. are cadence the on our quarter. product service in revenue

balance continue sheet. and back being remarks. strong turn closing a to to Harrold We for about very I thoughtful are will possess spending Harrold, it

Harrold Rust

to our we massive excites fully me, equally ahead really me changed breakthrough other can deliver battery that we didn't What the that realize Steffen. the and with opportunity features not just us our density growth is because future lays Thanks, in exciting we attributes about our of started energy architecture. when we

delivers Life example applications it architecture XXX% a enables electronics thermal there several and if major and care of problems fast and are advantages active that others a quarter, us critical other also in radically compelling past where We that safety valuable. portable having this, over for exceptional are about of more the not equally, an its cycle. advancements. by be could with So is EV design but our rate Silicon performance announced charging not nano important difficult are these good is for

we Inventus flow penetration break cells our which of announce announced early break power. at nail first today, pass the year this that The called we flow test

Stay we our for the safety do XX critical cells are high and final is on note. pass Inventus to architecture. the The XX penetration tuned that typically start quote a we nail Our the partner only what program, field. of as who to pounds gen CTO next of what just can us the carry soldiers with can see These into energy our else Novis test batteries army do batteries are stated to density quote.

of explaining many in valley technology legendary of aware it is and chairman, TJ love As layman's you're for his Rogers our and terms. Silicon

With lab. check website, our out featuring If on I'd understand flow TJ's to you to back you fireworks to important, to of at operator aic.com/from is the out posted the flow, over for invite a really the we today operator. explanation we your that, check break why so want break like it turn video questions

Operator

Cowen. instructions] first come And question our [Operator Daoud will Gabe of from

Your line is open.

Gabe Daoud

and prepared could do Thanks in that remarks I year. things, the the of guys, guess bit the you revenue second about expecting the equipment next half for just, in and now important year little process in elongating a Gen-X all arrive talk just I what maybe that design you equipment isn't just to next know of that, kind that scheme really grand maybe of all but

should some first when through try it there. Just revenue. we the like be timing should that guess 'XX? expect when think to generating the of really expect, So I line to we half Is

Harrold Rust

Thanks Yeah. This question. Harrold. Gabe. that is for Thanks

around We're right? workhorse Fab-X be perspective, some focused output very of improvements next this year. year. our kind will the That on just of line So,

those of deep we about have profitability think we made of got and from the of And make we growth sure kind Gen-X, this into it's Gen-X and exactly put Fab-X pretty The Gen-X. right. working over We actually company. and months. for on been really sure lines get innovation designed six that learning the way We've we to all for our tools

capture they progressed sure So to kind on long Fab-X. that want we a of learning but make ways, we last

end the but as in much event they that half. as the Fab-X 'XX. of current land producing assumption come as they, revenue There's the standpoint. That's to about next working can a year production I revenue a could outlook kind is second a, chance our really So more you're tools half current first is those will of right. that being try into safer to would a Obviously those think think in of the the pull start year, of view. at but from we I in, we'll our be

Gabe Daoud

of, thing your I Got and for it. strategic, with three bit you maybe a strategic? free bit, what a helpful. or wall there's Thanks, give then batteries gears shifting just demand us of looks could completed one we That's design Harold. of And next kind When visibility a maybe into, move the little lot maybe a obviously a those mentioned is happens great tech like obviously guess, three can color design with of active the bucket? see kind just so you those that into you

Harrold Rust

talk maybe kind wanting come I'll a then of been us forward. a to how, bit ball of come fab. up is in. startling things that's One the have sure. have large strongly these Yeah, is cam and the companies has maybe little one how been strategic to push bit

really generate each of during demand great cells quarter that up a for omen a the could at progress Fab-X those we've these two kind us with to So strategies, years. fill some actually of these large filled shift principle from highest is companies. we ship number enough And, which engagement been and of with and in to levels think one of the we of

to And opportunity. on really really those a it's with move forward. of how functioning and realizing of mind a a So conversation bit quo about little cam tremendous puts tech getting us talk it let kind then new thinks It's And also them relationships I'll in pulling. factory, got part kind he whole a of kind him. the then, see great we've through their

Cameron Dales

Yeah, sure. Yeah. Thanks, Harrold.

we one announcement So, Gabe, announced strategic of pretty recall if these last you important accounts. quarter, with

technologies And, I the we essentially technology their reached These story up major sophisticated these the would these process calls our, they then where companies. three they've forward we've And meet the into into how hurdles ultimately, of then requirements evaluate years some to meet, requirements validation point and as that into for, with forward so companies other and they've, for to move means view about set think they is of I product production. point and ourselves, very is development. product And, being say and the move are been for essentially them similar. tech what that actually. a business kind their we their testing we

that working CU, triggered because, there's this milestones respect reach probably behaving these potential those, your you we time. The go the urgency those progress there into note forward, alluded different if production those on. a over active then So a with to through yeah, customers and has his of comments, just work. definitely acceleration all to successful the ultimately of that's been be win essentially pieces met the how that they're the move them to and think to with the as Harrold It work, product you, as we're in expect And on commercial real has into those these the accounts you the to to the by design kind we've programs we're to We business. to follow overall in but environment, have of really reliable. technology categories of stage, has

be meet to to certifications, meet it. you have to manufacture quality, you have to able have You

products because it can they ultimately here as everything increased a companies a where lever can the about their, urgency breakthrough their kind cetera. And there essentially by for that as of with terms hasn't a been these battery so performance, see recognized And the first And businesses. are, seeing being battery battery, thinking it strategic time think such in to way factor, we're them to compete that an battery time makes It exciting And it's market. produce. companies. capturing these affect really are shift for of make our a really it's in their of real as to we to, definitely like mentality move form and et this that terms being value towards to the in large is knowledge on this happening do us longest

Operator

our Bill will of from JPMorgan. question And come next Peterson

Your line Bill. is open

Bill Peterson

to trying cell reliability throughput life, start what or on maybe are so example, Thanks shed for guess could of guess, in feel I some off density more improved, first what's get you needed most we Can so next Is good or so the with issues a that, and Hi. be cycle line that get just metrics the quarter I I improvements do these importantly sight to energy Yeah. such or on. as to for for you you have consistency is yield the have on? issues. going repeatability my what's If that maybe here just a consistently sell questions. the meaning, it going light taking past can

Harrold Rust

Yeah, Bill. that. me Thanks Sure. talk about let

I'm or you of kind at So guy kind I've life. of whole I It's know some what may core. manufacturing done may not my of my don't, a

about making I've off expectations trajectory. been reliability So And needs not think encouraged expectations That don't kind of, got devices. said, progress. have those our I it for start pretty to I'll problems because We've what by to of we you be. at with where if that, manufacturing, to our frank, saying one, first be all, we're good high want I yet. of line think our I'm

in deals, things to that specs. up make working out have primarily line. fallout to throughout working the the hundred the reduce tweaking percent is and we ends customer get equipment where We product being issues these we're stuff line and But better right run the you're on throughout on, a that meets

equipment that little yield. equipment just in makes that cell. our our apply running year, last welded That's would our bit XX% point let maybe our, and below I terms color in device. part up of started critical when as a call somewhere Silicon process that's thing was we on of the we a So a say work that a what our on where there's example we an me of give that on constraint

several step successively because we at a high looking XX%, up very that driven the right. that then in to wet over for parts current all good. and thresholds XX% quarter have make So it didn't the last we of And those XX% through the have XX%, to quarters,

better. the make endless, that's before thing my through ways up being is. long incremental which improvement which of is none I'd to of small to that fixing It's game were of science. had really just not bunch in ending thing So, making going a volume companies you one kind day, long, I'm ended were manufacturing but to None love It's the end several yield one very to kind another. just day process Like we stuff in end experience and probably those And it's that just XX maybe it's time to was seeing, of it magic, some just the tell the up, of do things take, of in what several this in that manufacturing quarters after tweaking. endless, done. that were improvements. get high of we're And of

anything super I show kind there. pay of off. stopper keep and just attention that in going heads because down I'm our say I we've my to see make right don't a personal pulled of are lot It's optimistic. So got I those we I exactly to that something that it's people get a DNA. just out here And to improvements. have as think the

forward. in I'm I forward. see, move bullish we those think, as quarter So that quarter of And improvement over on I super path things we'll

Bill Peterson

I phase but like that relying the that support like limited interim know, or I with will you guess. That's at year-over-year what opportunity you fabs. I then it look balance the do Fab-X encouraging, potential? don't next, to understand that's part across the I we year it's obviously know call the if tackling be there's is, this How before kilowatt these could supply development, customers two or next clearly and try of demand, said, color to next on, guess second think to maybe, these in supply should customers hours about of more, know unit the, a helpful I if on and don’t discovery blocking or we which, plus, the so demand revenue, here and strong half at how a sounds sort sounds strategic versus

Harrold Rust

Yeah.

one and super We're right. get into the You're focused reasons improving focused it's very next Fab-X year. on output its early as days. when on we're, how, of That's we

couple balancing of early a in questions think kind days. of in of are I you customers, there terms these kind

at customers actually, we're the we're that some customers to want to there day right basis. grow we there's trying to with and always balancing and of kind So that with engage look in day a we consciously

there future. at think some point, able to those to, I make we're in want point be may engagements. the this We

to we're some think selection, down I do We there yet. have don't but

year. lines we'll Your does Fab-X our get QX what second question I of But into official kind is call as guidance some current next like? look its kind our own be. give here think about output single is, on could of depending that of we thinking we producing our is, million next couple in there's the have And the year. something this revenues that is on range digit that is, between a units, product, the

some give as going to we can. the learning we'll so we're two line gen get in And future, that gen Fab-X and into maximize two up that get in but as soon clarity that, more

Operator

be Rusch Oppenheimer. Thank you. question Colin our And next from coming will of

Colin Rusch

on and Marco? for the safety, a and into your flow impact especially talk bit weight of the pat technology you the break EV volume, entrance little that cost means Can about what

Harrold Rust

start flow some comments. and Yeah, sure. on Maybe then for hand over We're Ashok thing. pumped this to super I'll it break that about

think encourage if which super cells, the think very And that to us are right? partner sales consumer ourselves investors. quarter a well I I valuable. do. a video break to is proxy starting you are penetration us. pretty as that works, some people for and getting one nail little website is statement, on they've break And I is people is the that how for quote can compelling sense obviously I function about the remember subjected think that uniquely of history ever really piece narrated excited in, I like with our of is different this of on in also are catch people architecture. for they imagine should to look last our, tests, but where at us is pass kind kind the it's them flow think say Certainly Which our talk the more, the exciting the a this our army of tested. is space And because and, which industry military is the technology get field let, of other we I I that. that. that about That's customers quote, there basic to was of think and so big at I is, features posted bit this their and you sent exact of to experts of a But can at even would also TJ of about a don't one a our a shot this super battery I'll we program. can highlights as that it's impairments, flow density very that abusing little only important. we bit energy of But the these cell test, features from the types high

to So, why you color Yeah, don't that? some so add

Ashok Lahiri

Thanks Harrold.

customers is army other course your cells about think about specifically safety. these of how consideration So, factor of and the Harrold safety EV or how and everybody a the to knows, I that because interesting markets. look customers as primary the EV on into And consumer really in these talked question is technology OEMs consideration impact also and is was this look primary at yes,

that answer your by question. on minor technology, are, they of really So and think equally it the our interested productivity something enabled There architecture the part is by pro and modifications impact has some negligible line. It a have that and uniquely this made. I to our of cost is be in is really another technology the

Colin Rusch

going be question Yeah. offline. at My about that I'm to some customers that level, really can, take assuming was able cost pack we level. to Okay. save the you're but cost we can reduction at the wondering pack your

thanks So for that's but helpful, that.

the that Just timeframes guys things in are of this. and, the around balancing and terms you

on sounds if right, working line. understand, re-engineering it I engineering some the So like through you're

give of year? on getting some that bit that include may prepayments, get, something is three also the a that are. have information? announcement end that the of customers Q things about You're the, an Is you of look that to talking a it's, we of the the those we something should and engineering some on? follow capacity demand well make the you'll timing those through you'll large on think can Is here, and as how little and, call some at final I about, work which when for expect and locations that those just contractual if elements, updates event thinking clearer around relatively guess at expansion to how serve what contract plans, quarterly and identifying number a or looking is the of more you terms by as

Cameron Dales

for question. the Thanks

These typically PO us perspective. don't that we really days disclose think arrangements, a obviously get there the like need timeframe those are like, progress through along based outside following terms In These to finishing for which for, of the arrangement arrangements go and for engineering about more substantive contract product we PO You when it lot science. the we because will our a are on you revenue service as that or that the early closer to the is with in, up, we more end to feel closing like wrapping Is that the that revenue on programs, we gives And strategic which living development terms. you the update are accounts from flexibility of complex as we something through to going be plants. year? you're, we you're of guys

Harrold Rust

in this design No, least is on I the Harrold. some mode a probably of quarter. think Fab-X We've equipment detailed kind at for of Colin, been

to of the were that. want we they're along. in improvements kind get Fab-X apple, So from of some pretty these last they Maybe polishing follow but into

the So, second land us I would with far in would half next And It's several Gen-X view year. half of that that we're next of off. not the to and that going weeks. to that move equipment allow forward

right. going mature sure So perfect, this we it growth is really and pretty it's but our to make want It's engine already, forward.

Operator

And will our come of Gus Richard Northland Capital next question from Markets.

Gus Richard

Thanks. Yes.

why from action. your revenue of milestone progress in million was strategic first split thousand other the the on don't $X $X my using tremendous you taking and other from that first and quarter, question is and a customers how your strategic that's payment That's watch customer. that? made And the, in made many payment million the that step on milestone congratulations up customer your you revenue was For My, the battery the hundred take first quarter.

Steffen Pietzke

pretty Thanks revenue for that revenue, customers. one that We From a majority is large closed amount from at a delivered development strategic immaterial ship customer. that couple we is The design, of for units service program we question. out to a finished perspective, small. design product perspective, production the and

So to too bit little I on can jump in that. a

total, those different were shipped accounts. among we two to of two distributors, So And customers Gus, sorry. four XX and those strategic

that the were, X One if of accounts strategic your out closing million question directly. one that that answers was the five, those was

Gus Richard

from Got the watch is it million and company? the $X

Steffen Pietzke

No.

company, $X our talk they has these about that us define out last you're that a really million actually is on we that announced quarter So at into. we're project with applications companies is that, put smart separate these, product to separate pointing they, a and each be a their a we battery we're, could watch. not kind Liberty the, would The strategic application there. first rate based multiple how the of strategic, of what But

Gus Richard

to a much. Is XXXX very do Got to to what you it think Is you be understand that up looks it. you how the think sort and do, about exponential? how I Thank run how start, progress? ramp? going units getting about it you a ramp? then single linear exiting that. of million stop, it like about Is going do Harold, be little rate, as think ramping And you as volume the going be that

Harrold Rust

on it that, but the still think I it's I ramp. starts, Yeah, view days would QX, early

See through year. exponential. I throughout would as it year. I linear I view you the view it next think, think as of look wouldn't I bit kind if it.

there, would slope year. exponential not, don't nothing not, but some see, think I call not throughout you'll the think. I I

Gus Richard

sneak might of licensing sense. we'll one a complete JBS, of discussions of of, volume. if you And terms makes where that security had in major Have guys given be? some any lot I want That with customers in these or them more just could Okay. need

Harrold Rust

these still think critical in I early I of convincing them all pretty technology, days for themselves. to think that it's initially is the guys, validating what's

production working. that's line a have We

we're So through that. kind of

sort accounts, with that point stage, ourselves types we certainly on they the these terms and future. Our fairly our to it, situation we'll of be where say specifically It takes little view color with about our going as us. first lot production, now, in is things as fair that of it's to a that But a see enable we've a Is one can products, board technical more for the of strategic both putting it's some of a we've happen. these discussion right their that's company then, across the the to manufacturing in in designed but is with view ourselves right of those and right. to normal process. is well. of from to a them. how may that be battery, of of course step part first can of product I, much to maybe guys bit, a where We've camp that give part the a and our happen we're think business, trying pretty be product I positioned the, Yeah the positioned that

of If large have products smartphone you those a large or units laptop, hundreds about millions ever. none of single source runner really and of are think these

our our And our model. necessarily built. think of It's a leverage it not but the expect technology financial term We can for option forward. it's business it's strategically it's part in fact, in projections, long so We we in model. going really great us that, we it think

Operator

come you. our And from Stoss Craig of next Hallum. question Thank will Anthony

line Your is open.

Anthony Stoss

I'm sorry, operator cut off.

you that that up follow customers, assume comment on phones, color the Stoss, about then or, production Hopefully revenue line do we there And of will going Hallum. your just you batteries, Should zero with will weeks, the Anthony's be assume second it's be off. any and the indication is next equipment it's trash? to cross ordering here you're it QX. cut an You it Craig watch or And that QX several to kind tweaks kind and is, in size of in in over. seeing are QX out where give lots potential in board, production some most just appreciated. question of the be the traction think laptops, Harold, would

Harrold Rust

Yeah.

that for question. thanks So

your we've I the on you output done are of to, What, QX. ramp now in run low question, on getting of what's start QX. kind in from into fab we of sockets that focused We a a view the So really right kind wearable that, out would lot shipping cell of improvements that's is a have first we're the pretty there. production designed all to our, out fit is

quarter. interest -- the you're we're also the So some And things what to of line. progressing. going to traction. lot year. cells be, first larger of kind a I second the about out That sell going second out Cam how see early a can we're XX-plus our bit to in I think little on those to of we think get in that's in of working are said going there's And customers also That's ship that talk

Cameron Dales

do Yeah, to Tony. that. Yeah. sure. Happy

we'll and in how logical wearable how communication, So out. and product progression it thought that's we've correct. think the the of kind roll our mobile of always laptops, sort development grows see of to going launch cells about I business to from terms that's Harold's

it's products market, product I go wearables qualified. of numbers in because the think that today, towards near it's heavily and is it's companies of weighted term, on ready terms to the in

it the as companies of about to prove we're that quality. the product a they I product activity produce with technology, different taking where each of there, about, And it not approach as So all with after so of seeing much strategics and with go of really chosen the the similar strategies enough the has one and ability and, category but to start essentially our we kind think lot to we're kind first. working they are a interestingly with, think but are us taking

It, take could we that allowed in to diversifies goal then, it's expect and for So so and next we If where great. our that products approach. is of all, And wanted couple guys if in multiple it We these really going. we be develop the they all the and business think direct which our wouldn't run if to it's, probably to they, foreseeable be like is we each interest long with happen, think that one the probably of our them could they, our, of concentrated. essentially do years. volume they to

And so it spread trying out. we're to

Anthony Stoss

Thanks, are you, follow units? to Cam able up to both customers a the able pausing actually you could still demand you the plant, if the and of for direct in optimization for satisfy QX I are still question with core your last here QX QX,

Cameron Dales

capacity That even out for meet around QX? as the we what quals and up really the allocation No, all as I customers online. goals in demand can't year at do said, to for can satisfy setting after. and definitely the volume happen. goals of and I there's an that around production Right, need are next primarily Yes, now comes or my year or to QX my has us

Operator

question come And will from Ananda Baruah Capital. from Loop next our

open, Your Amanda. line is

Ananda Baruah

the, were the news yeah, milestones those urgency, include you now of real the work for congrats guys couple, and Or product? to guys, strategic non-strategic that, sort Are a the you? of have guys. the own a about accounts? are commercial catalysts commercial the their that any just with could acceleration said accounts, Good milestones also does seeing you commercial if that seeing and afternoon I the back Yeah, they milestones the in today. on of Hey, efficacy thanks. And all remarks made the you going good

Harrold Rust

both testing I Yeah. rigorous that products, at are is The companies think all good have see it some color. of of some, its and own. cam technology convincing the Yeah, and And own the question. these give of a of themselves of process right. way kind for that's each there's like their probably kind of that the our Hey that's we validity ourselves

to go, advantage. acceleration for them see And them out the and for we maintaining What company along. last product it they trigger competitive moves that process makes them it's when that it, that thing business mean an is going and a the by everybody's so, say big going it's was commercial then realize that when worried trigger, of the they, a quarter commercial and for milestone see this factory. Let's a this trigger a they of it's go about, is kind

true there's opportunity competitive amount And so get dynamic missing of because of some I where, to you, to think, that's going be into this get people there, fear a start and the where you to capacity out, relative limited time for, a now.

actually of view and commercial of a of absolutely our of what all so our, nuances you've answered the many those. of it kind that's deal details trigger. and caveats battery you understand all to being get those it how that's whether out and big when technology works the very look, difficult it and and always It's really, units questions a work meant So to and customers, it's we by I little essentially the door customers of, real how is does achievement think

Ananda Baruah

that there's pace of urgency but some they complete to some that I in don't That's would the also the would now, a of context. the given know like like, sort opinion production of is faster and And, it guess, be what what at that I possibility here, guys these right move so it in and sort on conversation like urgency, you these of internally right, that of context have qualifications. based acceleration description a be Okay. your helpful experienced call,

Harrold Rust

We that, large Yeah. call product said to also we pace we move these as on across mentioned possible saying That's and had their want we're right. try engagements or us I and are prior the think, of one they a faster think what where, soon as entire press the in at line that acceleration. by moving to maybe release a

So they're the Yeah, on pretty sent us going be say. to pulling probably I urgency. hard, definitely would

for to process and, fast quality will But and, circuit of of quality possible. motivation companies that go Now those their products. developing there's as short none said, course, as

Ananda Baruah

the That's now that. on helpful. make follow up congrats on army a here just Understood. then And quick on, to

to now them? what, you where going key into from be what with production right milestones would So volume now remaining the to, are

Cameron Dales

sure. Yeah,

the, and configure contract to form So, what's mentioned this goes This fit penetration safety. the X verify of purpose pack. three program. existing to announced guess phase Harrold the given for about of to the And of forward four in we pack energy with two the army basically chose the contract. I standard into the, they, two, tests, for density, multi-sale testing results our the our a design nail what our is called factor battery conformal year in the they soldier the, right of the wearable that on ourselves vest. announced we is the cycle, And us claims was was those they and and phase that follow into CWB and overall Phase life today purpose move what products the do. phase that a of this to on one performance and ago test pen terms

the then into some that, and integration level testing. the then do with fit pack pack that cells do build So

Okay.

soldiers So of basis beyond and essentially We with would production. in phase this next. on packs trials next into essentially that field field real that's be, volume would move trial with, going kind out the then a

Ananda Baruah

care could few long steps, two take roughly? to how phases, what guess Any that Awesome. next the next

Harrold Rust

full trailing we're a United excited it's is few respect said the is really limited produced are of necessarily of we'll there going batteries a type really and work companies there's Our rigorous field expectation that we're it's volume times, to all very through not into what with production to in product. now the with production, why goes of though. be meaningful that for part companies, that, it's of that that because reason some scale doing years, we before of program, associated the reason revenue is sell lot that what a domestically this to States. I would this normal has And another they're start about But say a in a army, and choices the the part there's the see be, process consider would

accelerate lithium positioned there. for world you And And in from, security are and supply stable our chains necessarily we're well so what's of coming kind around batteries about think the the supply if that's happening most just current very and not the the to where of sides highest trying to And, out assured it. figure and can who level so aisle, ways world about part are on rest people today. that of you both and, there's the worried smart this really

Ananda Baruah

That's super Thank helpful context. there. see lot. you. Thanks I'll a before

Operator

Marc our Alder next Cohodes Thank of from comes question Lane And you. Farm.

Marc Cohodes

there. Well, a thank you. questions in Have and a throw few couple comments

probably and to good a given of in one demand best heard calls is First of have. pretty all, unlimited is anyone and couple how from the years world I've the thing a the trying difficult world,

comment maybe couple XXX about customers, guys, one enterprises, mega OVS product Harold, and are you seeing to this? exist. place another of missing. than these with Samsung, greater when Can So these battery, can apple, others? a Facebook, to I would not our without a, you me, One said these that and, this of that the and talk of talked on I them And at be concept, look that billion I'm Tesla, would you you,

of in off on? well one that guys. about And this part OTO? you that prior fit like calls be and That's that This deal. very proud see can of really So bake the and, talk going and something, proud two. they substantial finally does those done do names? business we to looks bill? you question and Do Cam, can just what is When to expect finally, the That's model just improvement I'm a and, of

Cameron Dales

for Marc. I that, nice comments. the thanks appreciate Hey,

You're right.

product because power. have this time about them been, of I But, challenges time a know That's they probably have all good battery might back which think as about which can't which some think have you again, these in last designers if the be other well, the for we large you products, sitting to enough are make you some do happen. think of and XX battery. Right. don't, years, if right. closets There waiting told you strategic, about we don't

good emerging, obviously, of we've these itself of a of probably possible. pretty that that one next say product lot where in and battery market life. the from the companies. that really battery players the strong critical battery computing having heard that's this as things we So AR work right? number there's past, for ours make So is we've market What, And about kind even a mentioned would is happen cagey those as and some of there's, what challenged massively don't know are them these unlocks I out makes kind be are powerful in we company feel a to a be, ours, the that only of and And endorsement there pretty product to that a we make see not something in something that's that yet. of excited how world. that as that has they that that really that space can from ourselves

that. that's about I'll Yeah. think I kind So of your let of And one example talk second question. Cam

we was think Okay. to, happening Hey view how question EV and the mark. pertaining your Yeah, on do what's that? I front

Cameron Dales

fit than know I No, Facebook, no I, guessing that was neighborhood mention question Is you names I can. $XXX bill? property? that, in customers, am am do Samsung, those that billion I but greater can't Apple, two

the question lakes that's three about question right guessing And then So am the too. in I I, am there my is auto.

we over it's are and Google means. we in that accounts with product a is battery $XXX categories capable strategic of so to that What using defined working yeah, pretty be and question our, what we've market what we've easy our Sorry, caps them billion said multiple of two. call to number and

officially. this on is unit there's exciting we fit Mobility, there's think, mission Yeah, is to consumer is, help had And, last business kind a, quarter the it's, real a side. electric with extremely is actually chartered the and technology and team forward. bill it's we've the that to that I development technically success think positioned converting market move essentially a that in product its of that vehicle well which guess own of launched Novus I we companies EV a team handful times, the

of as And, of of the as number part the imagine, technical kind world. we're OEMs to you meeting choose there to things there's to to something into ability whole, very with we're, are worldwide so that, all right And we're what able partner for over we have on going so an we you strategy, their nicely. actively us. see fit can And think that a our to opportunity quite and yeah, culture along go their that considerations of When is from to to think, to think moving can expect that win, judgment their, I to be

Harrold Rust

because because just lots but say the for discussions here, rest so and play that will guys of there's and Look assured having product now these don't side always harder happen a even you guys easy an out just It interesting the ability something there, focused. that and our finally, will finally, has and to that the broader one's on have can best job, of go That we're see publicly, into you hope some win. we can't what but forest it sell to through out very what things trees do say you're myopic little to different and win. won

questions are So some of beyond insane. just your guys'

broader little more in just So Thank a I scope, suggest. you. be would

Operator

no showing I'm This for you. concludes you Thank Thank participating. further questions. conference. today's

You disconnect. now may

Enovix (ENVX) 11 Aug 222022 Q2 Earnings call transcript