ENVX - Earnings call 4 2023 | Enovix Corporation

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Operator

Thank you for standing by, and welcome to the Enovix Corporation Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's program will be recorded.And now, I'd like to introduce your host for today's program, Charlie Anderson, Senior Vice President of Investor Relations and Corporate Strategy. Please go ahead, sir.

Charles Anderson

Thank you. Hello, everyone, and welcome to Enovix Corporation's fourth quarter and full year 2023 financial results conference call. President Executive are Dr. today us and Officer, Chief With and Officer, Officer, Raj Financial Ahmad; Chief Talluri; Chief Farhan Operating Ajay Marathe. Raj and then provide an your will and questions. we'll Farhan take overview, session, we released fourth continue, Q&A After market call.Before after shareholder our conclude closed remind that kindly today. quarter we the you let we'll letter me the XXXX our It's our website available at on ir.enovix.com. letter, this our A the Investor on call available later website.Please that forward-looking are replay note today statements of and this and subject video call press the contain all to shareholder page conference uncertainties. will of release be that Relations risks These forward-looking or differ results on factors. expectations events materially a to and variety of statements may are based due future from actual current

business, give letter February For in based our duty the of discuss be currently do a are undertake we law.During could Commission. also our correct, call, and will measures, not and financial as and accordance affect of statements discussion today, XX, intend that refer and assurance today's please disclosure factors shareholder results with principles. are made All our and available no prove Exchange to We this that not XXXX, the accounting filings statements can update as required prepared we these will except by generally these which in to with Securities us. non-GAAP information to to financial on statements no future accepted

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

Raj Talluri

our outlook then he before cover us XXXX. remarks, Farhan featuring thanks now, going Ajay. XXXX. on forward is look and to I'm And with kick closing, had now actually on to video the we you to actually is financials Ajay there. Thank you, and We show After and going going a in of to to Malaysia, your new groundwork today. some update some laid and few and some in you for finish that, up questions.Okay. Fab-X, then scale off everyone have joining high-level manufacturing we're Charlie, will show to strong a to how the

First, revenue above expectations. $X.X in QX, million we reported our record of well

Secondly, our in of we amount acceptance It's is see and our now first good April. in are to of in the GenX equipment the Malaysia, in process completing very factory Fab-X to exciting progress. a produce batteries that ready testing,

progress executive and with we both China in from OEMs Fremont hosted smartphones our from to making the X top for quarter, on collaborate Third, customers, their how we our phones. in very batteries good smartphone significant discussions at on and EVs.Last the made management headquarters teams of

validate agreement a advantages Enovix leading into of with we development Additionally, automaker EV battery. architecture the cell entered the to a for an

and I increases market customers a in we aligned accomplishments to operating cycles battery, we gained was for to go we markets addressable next our team in low-yielding and look key a that this And have opportunities at management and after. significantly an wanted this substantial, look year, reaching strong a as frankly, end we factory new California very pipeline well at significant Now, began to not the the which the a year on additional it last with expensive, have portfolio of we confidence were the product sampling back X,XXX space. the last, forward Enovix quarter.As smartphone-class technology, large that,

look smartphone the world's produce has companies industry-leading megatrend. that team are specifications architecture a more with engaged to largest is batteries, These and by harness effectively with alignment OEMs that Now, gain to base this XX we position in hungry in more let's ready this we various over to upon contrast detailed simple. are manufacturing to But What at first, for that ourselves is very is batteries seasoned inflection acquired, to this this the for product keep Korea a exited up we build category-leading we revenue in Malaysia, year helping need years goals. touch demand eager minute. data the some that, close largest our smartphones.Now, in applications is portion power with year smartphone shipped levels. the with our customers us show which a a I'll the targeted take launches led at do a and to the of that in-depth market, us large really at products to and AI our with knowledge and in

we First, believing. high- GenX demonstrate volume to Malaysia.Now, manufacturing equipment is in our Fab-X in seeing I our need on know

that Ajay course, Fab-X, speaks And So the progress. couple to of our in Q&A we're we show going made of to Ajay, us will for a from featuring Malaysia. the last video you and days just of join that

it's there, by. pretty him for think standing I he's there online early but

the awesome. and operator, So, was ahead roll video.[Presentation] let's That go

anode, X,XXX will full to the world the that aware of over we while this are smartphone has quarter. need that and charge around truly the in Fab-X. will discharge year, batteries will our year, that an be progress The cycles, are life. silicon analyze be out made this we're high delivering ready be revolutionary why smartphone can enhanced density great important appreciation to $XX we'll specification addition deliver and to really teams AI the and ability mobile EX-XM from to I'm in a a the to of smartphone have greater energy density R&D you and what very that sending confidence smartphones months, high give asked in batteries significant we for and deal impact we done.In for -- of and smartphones. huge it's they need Qualcomm will which the forward a also will market days manufacturing, our with to our is quarter, also in report active increased As charge a sample.Now, fast along the batteries called to energy we today. shipping see, of XXX% proud short these EX-XM, to next time, the Tirias for version global at tailored first X By of for fast very samples amount I'm need industry. And very with high proving around products, charge first really It's technology of you the have on energy a applications looking familiar to battery, a end happy addressable everything the billion-plus to of looming samples we my of recent Research accomplished -- is call critically -- team last the market.Now, team the have I'm these higher density cycle

Now, the see this billions. in of the the results is forecast left staggering. a side, the I on amount show frames output are here. GenAI actually the What global want and study you video to in here image to slide you of of

how XX battery-operated phones, these and on billion; staggering X,XXX on is generated. expect XX, much 'XX, data. a to devices, in see we are per of see And What XX PCs, mostly on.And capacity battery actually applications. profile what terms we how can hour billions so of in you laptops very frames did the XX, hours be here actually milliamp much in consumption to to You billion; in going interesting it middle for is used be different is

applications. non-AI-based conventional the side, left see you On

on video, And side, about this side, launched of right AI I actually they all see that battery.In like -- Llama this all you're our the that to some by energy new is XK couple the consumes the X are chatbots. that just or our staggering with that applications, amazing. It's things you running done on When On ChatGPT beginning. video. like saw familiar upsampling more is so the all what your we the Chinese the fact, run. a flyers It's much the a And side, OEMs. hearing actually lot the applications. using is just on important like left ChatGPT than phones AI actually, battery customers a phone. things is XK YouTube for of need pretty you right phone density Things go AI-based but the just applications of from very because And this is higher YouTube

You can also advertisements. Samsung see Galaxy something for similar

are smartphone industry trends clear. to relations, usher our the a really computing. our of new to So road mobile we the and era well map are customer enable With positioned product

Farhan? going recap who financials are our that, In to thrilled will our addition turn with in to now a done the to first EVs.And and then outlook. deal we of I'm to Farhan, over that, provide have

Farhan Ahmad

Raj. Thanks,

of to development do used our but financials QX in we we $XX just decision the about of CapEx relevant as million, about ended of of and of report, cash the quick our go for stop equipment delivered into Routejade, Routejade.As $XX well QX, decided the About our $X.X used of to are purposes. all was as So cash that outlook.For with I operation, are in cash a the part and in in accelerating product it manufacturing reminder, so depreciation We of was million. million equivalents. million quarter was about results we acquired $XXX ahead the quarterly recap revenue $XX details, of won't Fab-X, Fab-X the of net expectation. million a and we post acquisition the I'll convert

we And million in was quarter in QX, in million to of million are revenue QX in a accelerated depreciation, similar million accelerated Our of the amount it R&D. expect of this of most SG&A. in of 'XX, $XX.X COGS. turning million $X.X but range results included to be depreciation. $X.X $X.X our $X.X expenses.Now, guidance, In was million. for R&D of we was expecting this the will first $XX.X of

QX because war to Now, meaningful causing is from impact the a of Korea longer to the ships some which in for impact, there East, time go a to Europe. our Middle guidance is

EBITDA non-GAAP to $X.XX $X.XX.And note about QX include impact which would that, like loss. loss of I'll for the turn the to and million is to EPS I $X.XX expect with between loss an I our $XX talked, expect does million non-GAAP that loss depreciation $XX Raj. We EPS that adjusted accelerated now and of

Raj Talluri

-- 'XX. in work by for excited And set executing you significant excited we've Farhan. have super I'll you, business and that, we our and the have proof fabs years up going questions. in with open to in framework I'm manufacturing And all Okay. milestones.So can deliver I'm the these all tell, key we Thank the by super as stuff points closing, done in to by on to scale the for 'XX, we our In forward.

Operator

recorded. Q&A will now the that this session. call being begin note We Please is

to going this? highly and voted this totally the opportunity? ahead are call we X-digit questions, the of will is, of live to read X there a the management abandoned batteries? go by government shareholders question status we call Before during management questions Or has revenue current Is contracts submitted for most first registration.The near-term future still address

Raj Talluri

Yes.

So, question. very good

we the we have, deliver to BrakeFlow-enabled As through safe batteries that that And these quarter, in -- we to this year. and continued did Army to continue are use that which will contract on. we expect the to do last Army vests so batteries

Once lot in As end we different so that production, kind these and will expect acquisition good up Korean U.S. the of sold they do actually by a the see a on. and company, business we being military, those done, with opportunities batteries the batteries into very have higher qualification and are to we that, process of have volume to the of that to put and we also. do they Army market opportunity Army actually tests will are this batteries there.Also, good Routejade, that's

So, yes, continue we do that. to do expect to

Operator

down? second with shut is production has the question former now The in line the Fab-X GenX that what is, happening space been

Raj Talluri

Yes. for question. that Thank you

technology it and So samples we manufacturing on, high- EX-XM to right doing give now is smartphone our we it not before and using to are but sample our to -- to the to so so give ready. Fab-X validate EX-XM Fab-X, Fab-X, to customers volume like make are --

cells As expect from mentioned, Fab-X Malaysia in to time I produce April frame. we in

have fab a room So need here, we to we do expected in -- Fremont. using opportunity, and we that and that. cells are will which for a new in clean to actually we the room which here Also a Fremont make facility going with current dry those we're this EV

facility R&D So it continues to good a be for us.

Operator

will Our to Colin the question go queue. next We with comes Rusch from now [Operator Oppenheimer. Instructions]

Colin Rusch

make SKUs into side, talk customers? number months in you've the of have the the to As gotten and customer testing months deeper conversations to on can next the XX to serve expecting you're about you smartphone those to XX

Raj Talluri

for question, Colin. Thank that Yes. you

of of taking I'll now, that happening a you So what's question. right opportunity color, little give bit that

happening on These very OEMs. tested, what's got requirements battery XX and temperatures, customers. right XX, we've how on, safety multiple that So are so smartphone fast the is requirements, specifications different now size detailed is from different charge page documents from multiple requirements,

It expect X,XXX to And So something requirements them. that sure sampling we they pretty we the we size. to different to factor then, And is we then form exactly understand then through sampling hard get are those factor those to quickly when past test to different in these multiple I'd sampling because pass rest samples we'll we are requirements, they've on it be we is, the after what the expect too many go that. always we that going and they Malaysia a be year.It's the the candy to of what production do I and are we you It's their qualification, to similar kind test the lot cell form that will tell customers' because now requirements get of batteries going think. many qualification, done customers very that from evaluations we testing next to between and is customers. technology phone, the shouldn't do happen they that them give do smartphone of phone different particular because slightly batteries them the slightly it'll of fab, drive it's give probably so it's dimensions into. confident If each make on kind shapes a with I've and try be bar customers one will samples, a based in And cells, and pass. we different -- our use my given. if it's make on get And to capacities, similar side amperes, customers. building And to digits single what how based phone, flip soon need will X,XXX is is, how size. going to them it's high-volume think to will we the so what Like go, to then, say it's amperes going customer those or is to them I those size.

Colin Rusch

vehicle? how to both hours? for given lot can as more of that and vehicle some there's And and Are a terms your hours going the design, these potential we helpful. the density pack XX pack on of they That's hours talking vehicles? XX talk then, about about mobility, we super energy in talking vehicles and might given kilowatt optimize kilowatt charge, that look XX kilowatt are space look per Or in fast size like the the or opportunity safety and design, in a little something certainly the you bit have profile you for expected guys

Raj Talluri

Colin. question, Good Yes.

proving swelling, to kind they fast. out be, is cells would is proposition, out and -- talking with It's we we we many be we can that would talked we early that's interested others that clear, be, right, out one what value OEM what they tell. kind proving EVs to what now too they Exactly -- So the are are what can doing about charge be? would working control of on to what how proving of just there's

continue this update the we we're there. proving point, you will technology. on as We to get just milestones out At

Farhan Ahmad

with have unique we these all with have add What's the is fast that cells our only unique architecture. and are differentiator. as thing of architecture, they charge working our The would is architecture will automakers will common our that Yes. are that unique I

Operator

comes next JPMorgan. Bill Our with question from Peterson

William Peterson

contribution think appetite we are be single there Maybe like this? can as just to ink is some Or on the as What said last for terms testing? timelines further agreements? to Enovix of this light and you key charging. for sounds and in just of shed piggyback the well Enovix, off the resources commitments that for some will key it well now? question, additional area you should any agreement But milestones focus guess, as just sampling I fast from of actually

Raj Talluri

Yes. out We our year. get goal. hope to samples That's this

that. of other comment But progress. We updated too. kind with can't are early working stage, OEMs, much really we'll I make It's keep you further we than and as

William Peterson

Okay.

Second question.

are formulations making if they EX-X, So guess, locking And process when EX-XM get haven't you're gaps changes what and the key material EX-XM process? EX-X? before EX-X, issues for sense the you're we side? the guess, on and are address at the for manufacturing formulations Are think about not, I fixed process I to in and if stage. EX-X, to materials this -- Just performance these I what and fixed, guess, the choices how are been looking a the mature or trying for

Raj Talluri

Yes. Good question.

at it's meet safety that of EX-X, of And if basically, have market. about smartphone care EX-XM, People is is top the I market, few requirements requirements. So built which there what really, for One safety. clearly say in to is we in the done I really technology a adapt requirements phones. when the smartphone on key look

we know, address. we time and one spent lot that, that's you have area of on a As

area second life. is The cycle

batteries up EX-X cycles. previous XXX Our ran to

is the ability third Our basically target increase. doubling fast. one in EX-XM really significant X,XXX charge really, is that's the that. is a to which cycles, And And

with getting a of when battery smartphone, harder. customers you lot have is So is, day if what do a life you particularly and applications, these smartphone, harder whole think about a a AI

go XX%, XX%, XX% the the charge battery the get charge people be so like down, goes life to when of can to rest they So through and to day. able

a that hurt safely good very a is that's is one that it do To energy about density. doesn't we that a And battery feel longer the very the increasing care-about. and So thing and to important in key care-about, that term way one that is do third now.

So different these battery while top out believe keeping fast have cycle about temperature need different shipping like we operate other thing so what markets life you an we all that that, now is cycle charge, and That's in the charge looks also the of to advantage and provide -- and can phones looked we the that you while the in worry the at, what at to market, keeping temperatures. on. increasing compared the

So addresses. these that each slightly are on are EX-XM And different all things those based again, the customer.

more want ED. and customers maybe Some little cycle less life a

more want customers Some ED little cycle life. and less

are continue batteries does we the a middle in now the is on the EX-XM. And put finalized charge, fast in are us have basically in seen there cycle target April.What the a Malaysia that before slide we energy to where on to keeping sample EX-XM And get of of that increases So that, now expect we density. expect which keeping actually increase factory increase our specification, top from while we safety those out the keeping while life, parameters. with while in you've to on all

a accomplish finalized able we of materials separators be to to cathodes, and set that, Now, electrolytes, have for anodes, on. so EX-XM,

which for order, shortlisted be will we'll We decide short EX-XM. they ones. have what in And

promising Some very results.

able to pretty we're get of optimistic So being there.

Operator

Gianarikas comes question with next George Canaccord. from Our

George Gianarikas

your Or making -- put into the all, silicon terms make is and how your chain. how And of that of decision Earlier I'd a you batteries? chain silicon first purely material which Enovix handset device extensive ask I'm into decision. will or agreement curious, supply put like that that vendors to diversified GroupXX. your they quarter, are choices the by in vendors in you is, announced an supply with about

Raj Talluri

Yes.

I the but the look battery producing to enough that and the needs other when certain a a has density electrolyte, and requirements interfaces behave these of meets more of the are way, properties, it behave. of the to separators a certain product, how requirements, same of you to customers make, meet has a handle because battery emphasize function anode, fast a interfaces has not So a that play and how anode, the a can't electrolyte so on. way, life, at importantly, being increases it's that the all it if they cycle And side, able other all at it a end function pressure on. the do which function to big because our lithium so ions. the just When battery, pass by also but the stack the end ultimately, a thick it cathode, in and the to charge, at the anode, certain energy as cathode, in role and time swelling is It's of silicon a life required the separator

have putting of anodes, So Enovix recipe property them right here. separators, right the cathodes, and is we really the have together intellectual and experience choosing right the that at we

we like said, -- cathodes, there's on on electrolytes, multiple we the that property anodes, on multiple is and intellectual multiple choices have. So I choices that choices

constantly that people. We ultimately, got for applications by is we're been to and other new to And GroupXX for right based the do material, customer on is the right find looking are diversity we materials. the supportive. to very We feedback. the We're going recipe what important. the talking excited also were also end super Supply team from results has

question. way kind answer that's to best So the that of

George Gianarikas

FAT SAT about timelines a your to the And ask I'd and just testing. here on follow-up, like as

of Your Line reiterate second samples that the -- you I get the and timelines a on quarter saw the of Can Agility recent a you confidence confidence those level us bit in in samples terms out you discussed of the second push-out -- for here. some quarter? kind podcast, little just a give in that getting the of you know can out in

Raj Talluri

of doing. you FAT to out complicated in And frame customers. know I'll these on got he's are sure did we're of the very, high Ajay, things we free to time Malaysia. basically, But to we some how very little And delays answer very Yes. going one again, in right? in tandem need One machines of working we're cut corners These the what is need not acceptance in are corners, take we machines, requirements to and leadership SST, tens of with to both done Ajay FAT, and myself of the that zones. up We're is. line feel yield we've cut are to any we going to I going good at a to together. thing team confident all of not our requirements samples level, our in material these announce get for I'm customers from how we of and they April our feel the run, come much the bit add. before suppliers. remember, not

has reach, suppliers, So, good caused together. we of within good and all expect back that amount feel we but some with We have forth that about we them now of feel machines to our work and received. it's do the

of been some in They're And have Malaysia. them shipped.

are have in samples shipping, holding pushed of of a some we're the zones getting although to for date customers, Some but little bit. the way the the

Ajay Marathe

Yes.

I'm early to during machines in here I the can not, that, guys pretty yes, shared but to hear Just Feeling how I the Fab-X. add okay confident feeling don't calling on well, And me podcast. of as we FAT data some are in data fairly from if -- -- or behaving. the about think you know

here confident out the from Malaysia. in we'll Agility So QX, samples get yes, definitely feeling that Line

Operator

Our Dorsheimer next Jed with Blair. from question comes William

Jed Dorsheimer

I'm have should I different then trying really is I and And wondering, of a get about terms was to follow-up. trade-offs of differences to Raj, about between how between the some products. in you've EX-XM think EX-X. And creation the what value talked the some ASP EX-X, of those we trade-offs. performance

Raj Talluri

markets. Yes. really Jed, on it's based end the

think ] when cycles, is our go into to go you've XXX cycles, where smartphones, things range. I X,XXX that in [ you got into that view they're like to laptops, get

to day, if you a charge you're looking you're at You discharge think have so a XXX cycles every about going year. it, it phone, charges,

keep pretty X.X you X be say, right? quickly Let's at to the to X,XXX have much you phone range, able So do to you're the for years, that.

day. wearable at years. keep of or it look don't maybe you for you of charge some you Maybe lesser the every number a it might devices, IoT If

In fast is is must-meet cycle on. Once swell requirements, at and life, on meet which high so the is store laptops, must, battery, you get top we which safety of charge, with If provide which cycles, after go not when we you to then that can So ASP those, aimed upon can less to we the as became we can some a decided goal markets, going ASP and XXX number index market to what's on life that XXX-cycle When change of a the target. X,XXX Ultimately, -- We want at that. a is to going for value more of the the not premium away premium is get smartphones customers right? set cycles cycles can cycles then that ED big X,XXX amount temperatures as command. go and and what but important. most, device, we some they that, there that's other you cycle maybe good. is X,XXX do is aggressively.Now, We to take a right? ED, depend we

it depends on market. end the really So

more Some are premium them, you do must-have some higher requirements once ED. are and get that requirements, you can for

Jed Dorsheimer

as of markets think the volumes? that those is value adoption of we've therefore, not as up do the of Vision of curious, to life when follow-up, about know battery terms larger look a value in in something talked and Watch battery when the function open or of only on great terms phone. battery additional the we that I'm But Apple As we at about Apple I look wearables, -- of at to how the life kind certainly has of the gating gating hours help you X product, that the of a

Raj Talluri

those single I the device and that coming is And X-hour out life. the applications that energy Pro. density. -- and more device, am hate are Yes, battery Apple problem like biggest there Vision the the much with absolutely. life. absolutely higher of love -- owners That proud the I more I is one It's need battery of

there's So the a fast. an a theater, and goes memories phenomenal in tried the you're -- it's like with is I in think feels the just And but device. the that's so IMAX the on performance in movie, battery there is IMAX because processors And device pretty and displays. great an the it, the of and down I it app, reason but

there So ASP markets you and be is what I the will awesome. I product, if mean, people double -- in because premium be that could those to think, all willing think that's, battery life? told, That'd I $X,XXX

think when the mentioned processors, to think So products great performance I are I've a lot the devices, just user great great I actually this huge. cameras deliver job that experience is came I that end is can and displays, is And I the first first many of coming. that -- great memory mean, the that is what this

We haven't There that's in opportunity we products chips can't that out. be will a the now, advances And early once that how and you lot them for see until good better to cameras that really with really these a think And will experience lot seen like a the come can differentiated delivered, as you there and of I battery, ASP. And realize why have battery. memories deliver be you'll that, a produce that this we seeing more out. are be. that will coming

Operator

question Derek with comes Cantor. next Our from Soderberg

Derek Soderberg

XXXX. on be of Can production Any you it in great. deck, with going a what slide need a the have this. that from to X the line? on detail to multiple that with, you're start looks I'm launches like standpoint lines? single goal would wondering to wanted guys need you do I Do achieve capacity you smartphone

Raj Talluri

Yes.

So I a explain to know works. the lot. important this question it's process asked get I I me think like how for

actually are we with if good the the our So journey, EX-XM that of that meets in market. we pretty about you a now requirements think have we recipe feel where about

good we our coming that. pretty and samples to we'll feel up be get that some in factory from April now, able have We

And take again. next, happens they're going We're cellphone because have you And what they've test these you said, takes feedback, about batteries. to XX We're qualify to they're I as how maybe to and going battery, actually charge-discharge give battery so mentioned, that to because I it typically, to go months will going one They'll make well, multiple We're on for battery cycles -- them, it's into, it's They're And to customers. to with give then, the that months. the really designed we're on. That sampling some of on do go you'll multiple to remember, cycle X multiple an start maybe back changes like test so, going XX things those be to to some to us right? we different can them, get to sure do how that, Line If OEMs. they're them really models. X,XXX things are feedback X,XXX which months, to means X size and some we talking months customers. maybe make the have will dimensions long should going give going give take when big them going And those we model. Agility on our and well, if optimization us got okay. and to

that's enough these batteries going can to we cycles qualification So capacity the mentioned, go. million do around through, year. amount update watching to qualifications continue is how We that's a X upon And customer volume goes And have much I you on going or have of to sure to we'll now be need to get so build. we decisions that, wins And that make and year one those as going. as we produce, how line that the on are need that. design how on something how depend going to making capacity we're based closely this

Derek Soderberg

yield Ajay, bit spoke proof-of-concept video. how a follow-up, a the you is know my of and guys perspective, throughput as did now about on on bunch just you your as I And about tests. equipment the mentioned you podcast, From a it. whole? a last bit Got the

your sort tracking confidence thoughts hitting everything as that metric and and level curious around incremental Just any of together, throughput is UPH details how on share X,XXX well.

Ajay Marathe

about the XX, critical-to-quality is -- the some sure we laser, Good CPE XX The -- as Yes, example, a FAT, part there's that mentioned, take doing and that question. the parameters one we of for making They're FAT, that -- as yields we in start not time but CPKs mean, -- I the FAT more Raj But Sure. throughout track. will than hold our example, rigorous doing of at are just place. Fab-X, that right learnings fine- X.XX. tune critical We'll -- certain only CPK yield when clear the processes yes, that and line, we that fairly are at looking will levels. to good X.X the right the the on from further fairly good in

So yields, finish more kind we us of more confidence the FAT. right. POCs helped the design and looking are actually, gaining, we The equipment as

And are of started. going are that has here, happen ensuring then, is SAT, to helping hold. going some yields it FATs the the which already us to the Now,

we now, really fact, that make the the X at that In debottlenecked. machines SAT -- Zone we Zone yield X,XXX behind us X,XXX, So but are UPH. and X sure UPH-wise, we'll X, runs at line, help too or adding on the is battery still ], as keep will are to yield at X -- the run a that we assure a farm to it get and right? going better fine-tuning can place, through and [ is do me even the to are which tuning right going it

things. and X will of about X and farms. X which both are we to these feeling be adjusted in. are are good locked kind So They X,XXX. the ones are And X

Operator

from Our next question Craig-Hallum. with comes Stoss Anthony

Anthony Stoss

where get maybe in then, can under your a that of OpEx the the questions Routejade trends on year. you've your to Farhan you've were while, Raj, view March of through Routejade? lot and asked, action us a learned And just OpEx for also just from but update for here, what my belt now the had rest you

Raj Talluri

few the think, months visited Yes, I a factory, ago. Routejade, I

company manufacturing. phenomenal. And it's thrilled acquisition. what expertise for battery They really markets. in phenomenal. are the more been It's by understand batteries They years. And that the an We different importantly, over This their expertise safety. is making coating has we company. production understand shipping really complements have XX They super understand end

to it you it mention specifications, is easier much to it So I makes that it. cut to to right stack roll when the the thing properly coat a want on the and laser

relying and it other So it's we and were and make running who We to coat remember, to one coaters toll they like got -- the you were we material very quality that that them GenX to. we just and used supply weren't we we rolls they're people really problems is rolls cut motivated different, stack on to like to so you of wanted specification, how own when that jelly we had them. them it because third-party don't take in with lasers, important incoming very the which

it FAT in -- Ajay last a I now, that And to that of piece and SAT capacity even do so his using and it's I when we the came was are realized to year process key So on. absolutely needed. manufacturing we for --

between and go comes its So forth we're the and is out, so making back material when and right that laser is coating quickly sure on. to able cutting right

like end-to-end do is the things batteries. to it's second really addition make how an thing that they things know So They found that X in high-current to optimization.The at Routejade I team has well we the mentioned.

make customer to the make odd-shape laminate drones, way And second because the looking batteries. motors, of That's like these extend that actually can electric their stack they can at So ability a unique breadth can are batteries. value and they to proposition can run applications. are batteries how military propel run donut able now the is run They shape things batteries we actually that They make batteries. way the they different to one very -- there.

actually of base some customer batteries, to -- in we're some silicon and also now some able and have we batteries. sell the able base, that present to that where customer but we anode-based are graphite overlaps Routejade-made So go

spend grow of the so, company team And and to we more now. It's one continue revenue will we that time that acquired.

were get us to that acquisition exciting, super So and done the it's very able quickly. we to fortunate

Farhan Ahmad

on be similar we Fremont. from taken the yes, that million about the should QX, QX, From level. of it and the that should OpEx to because we actions decline because of be a have to the QX touching talked of QX also So, side, $XX.X depreciation in there

also year go steady, towards those And Some you that after will maybe holding it digit through, kind then, of year. end get be benefits of that, should additional so benefit up for should we a slightly low-single decline. of come should the the the like

you like of company, the steady the and year, For if very had full in what for of we the look kind well. at similar should full through the it to fairly the 'XX, of year, as think EBITDA you year

Anthony Stoss

of luck. Best Very good.

Operator

Our comes from Daoud next Cowen. Gabe with question

Gabriel Daoud

how EX-XM. EX-XM each if curious the targets the could to of But to density in can leading-edge just just been for it. already around energy today. I what Raj, was market a that and we hoping There's maybe go just back are lot compares phones quantify maybe and discussion you mobile

Raj Talluri

Yes.

fast life, market precise would the We It haven't a And because we in and I are target, that's fast then the charge. is say, put charge, out safety, density, today. be than trade-off important. what also very higher mainly exactly between definitely making right, energy the cycle will

will put what our with together exactly land we expect we investor our in EX-XM to I a we put slide on Where EX-XM. -- to make get to some deck customers. think we're is decision going

drive will definitely just and are mentioned, we all not be need where parameters to on. of because sure. make the now -- wins. it's to doesn't design focused what's they battery As It the want in about, that sum make want parameter get did thinking that's drives trade-off right market to involved the It's also we X total they those to it customers in that are one in I time. with that over a actually just sure improve we for right We our that

Gabriel Daoud

for Certainly, solve Got a of depending sense. customer. makes on to the parameters Okay. That you need lot it.

to the EX-XM when cells want actually of process, that imagine coming expected qualification the be to Okay. window and within see sample. Then, to just I very customers EX-XM customers will of shipped the that you follow-up, to on talked off the manufacturing when that Is off guess too. that some But would are as be about? cells XX-month for as part clear line? a line I'd high-volume X-month

Raj Talluri

The exact news modules. manufacturing short answer yes. Agility and is, same is, high-volume the Line use our good The the line

factory same in -- the the is They're also see that both Malaysia place. right in where you sense, that in same now. So it's Ajay from and

sense lot in a similarities. So there's that of

your the It's scale is the other the different, But them reduce cycle to we'll short our is XX how same the to of get one, good So towards. a is put talk time but get look, call time, are key that's they're time. basically that me, X once kind one, look, my And it, strategy working depend -- looking I exact really of said, actually we what it's between Raj, samples part our samples expectation And qualification. from it which samples, going depending I and anywhere customers, upon is months machines. months. upon just to to should where because cycle ultimately, they be first qualification very and when that they we a like moving the phone-level are tell

Operator

Our comes with Baruah next question Loop Markets. Capital from Ananda

Ananda Baruah

first the maybe one still you're if is Ajay. guess, online, Ajay, I for

out when that yields yield guys in quick putting you value the targets have And samples? follow-up, Fab-X to the think to the like well? way there yield question you that. Just be through earlier is I about will about after a guys think in well? as yields, then, useful April-May legitimate there start I And a quick where what's you of follow-up have a guess, as targets have year And the I are

Ajay Marathe

Good question, Ananda.

that have will [ we the that design. the equipment ] here All where learnings design we not we sort we that up root into GenX So all that's and yields provide, analysis have the up begin where accommodated of for made X the played on ramping it could learnings we -- And GenX. what the ratcheting last in slowly, GenX, GenX the have cause ended and sure years GenX have all done GenX. in the been in been in the

yield are the line. several X.X, X.X So we'll the set. CPK windows during Pretty driven, kind for process every all there. CPK more There than start are points Mostly thing of yields. decent process

are decent all thinking, SATs and multiply to immediately can are the actually. that. of upwards quarters, how how supporting we fine-tuning That's going those you the get yield a in after that, So GenX we But deliver are FAT, and line. are you'll within that's planning pretty X we the then XX%-plus the yield. and And

Ananda Baruah

follow-up What the this XX%-plus your in the model, margin targets So, And as that is right, that's terms let's and start of Yes, the super to. maybe model spoke and is I Raj -- model? when Like helpful. scale I in customers into you shipping margin well. margins? that yields at just at yield margin are -- production? volumes that -- Ajay hit what kind you helpful. is super for say Farhan guess, so guess, kinds of initial where you Is in the those of

Raj Talluri

because shouldn't it it running CPK string think right with done FAT numbers. is That's kind the to done for products, where take and Yes, important the got at the done need in the factored command the what that optimization premiums take -- to be that yields. while. number. get High-XXs to. to this really we memories, for And But to about. processors so many get acceptance here level that hopefully, to them of I the believe yields. we I to of machines we it is how to XX%-plus right we done. and have that will Ajay a But together, the right? them, we we can But number when ultimately, the this have you provide, We've is to a those SAT get all of help mean, target us to part got and that's criteria that we of look, able lot is we're is that decades. think consumer get for, into don't and how to And I shouldn't and get is that's I know, all -- we

So of are planning. we kind that's what

Operator

Souther question B.Riley. next Chris with Our from comes

Christopher Souther

in months of about out these you between is with -- I good that's there. then, are of of launch of is months in I supplied to we talked just to cadence of some XX after already of months X wanted a and of frame some EX-XM Or we to prior the cells customers' follow more to of kind a samples XX up should time we time Is to there these the that just X a like for hands? to on qualify about already lead wins. that a kind wanted some expect? months a think customers? bit kind on should kind And -- rough design-in little get you've

Raj Talluri

a really and previously it actually of fast we understand that's what from sample into Yes, we can in after has deliver works technology What helped and them one is product But April, to go the the want charging product, our on. the that to samples in cell clock April targeted think when X,XXX and have how cycles, our we -- the starting. right? is is factory, so from which done you phone that's

in then, -- pass tests things in model will happens we of we'll on. a actual model, where of in time. that that and get will it Then is go is and technology phone experience they'll they'll it the in And the my phone Then actually so next. will an into be we're these going to that terms Now, precise be that. there'll that the one to the -- go for they're typically, kind in some battery isolation put evaluating evaluation actually on just

volume. they once with you're before just of that's The vendor decide processors. design are it now on months. months So come list, much few And model months because once way we high subsequent X is the inside, ahead. in XX memories faster technology experience my what to that's total their period you Typically, you're doesn't the news don't -- of right? pass actual will has what win good the and been can come models a But qualification, previously

The first Once one faster. can takes come longer. a get models little follow-on in, we

Christopher Souther

Routejade Understood. can than us update legacy run contribution on for stronger on bit least. the in the maybe a just that little is you I'm And fourth seemed at It business? what quarter, then, the rate expecting

Farhan Ahmad

that. about talk can I Yes.

fourth a Routejade it. stronger. So There's tends quarter, with in normally associated the business be to seasonality

strong that end was of was at bunch and This of that a of seasonality of saw So year, 'XX, what in is was fourth 'XXX, the of business point. lot quarter The the low so a year 'XX, we -- kind 'XX. the point, got shipped speaking. for that the the the second there generally is of year, beginning that quarter and the the in of beginning end is 'XX,

a So, it. why that it factor the decline, stronger, came also also to revenue and contributed in was quarter-on-quarter like

should for speaking, and X and $XX fourth somewhat it quarters, then quarter the million about generally So stronger, of think you annualized run exceptionally with 'XX rate, as quarter fourth first the being stronger. of

Operator

Our next EF question comes with Hutton. Tim from Moore

Timothy Moore

regarding you give Most X won't -- maybe the Can commentary could revenues of us mentioned you sense, hold XX% timing we already Any of be a were pretty maybe December you But map for you that maybe rough a quarter from ago. the sample better production, Fab-X questions quarterly? my questions it, what on potential thoughts now run to that out look year year and or the rate, yield goal maybe quarter answered. the March road revenue when the from to to next if goes the tied well? rough

Farhan Ahmad

just quarter was X I No, saying guiding time. we're that a at

of we get and in And when on we production will you 'XX so, talked we smartphones. to have of the about we gave about be timing But good we we that. it And to like it. that given ramp the kind some we'll -- color talked get

know, a you so, have ramp to And revenue Raj... that. associated I will don't

Raj Talluri

-- be Look, production will in to in we IoT-type ones going in earlier April. And our hopefully, we're customers that smartphone from will really be go products Absolutely. to the Fab-X some there sample can 'XX, but 'XX.

it's technology think super be going to about the we you just base. the a again, Once lot guys And more I by should just way that's So customer acceptance of the the be excited thinking this. fun. and qualify,

Timothy Moore

good to That's hear.

parameters pretty smartphones, and mentioned smartphones, I of trade- think for the there's was towards had sum the XXXX on you And it were maybe total offs. could I other pretty promising the it question a [ end IoT, ] of Ahmad year. the clear on but be timing the the just

contract qualifications a do exclusively If specification asked get major could think customer? you is get pilots, a asked won't you for you to you Or consider? do exclusive you an OEM unique Can do something and that maybe them? during for

Raj Talluri

nature expect sign -- right? of it's to ASP, development Look, volumes make, So case, how But like open -- and then that there's size these not a Yes. they if we'll become and something or probably battery, is it. is business guaranteed the good that we're what and to this size the they'll way, will go But because agreements joint way time business I what in technology just little totally happen the some bit from yield, experience. talk we a what right? things want, shape it of that's the the what exclusive some about battery is my typically, of battery itself, that, the

Timothy Moore

sense. with luck Okay. the good makes April Well, That sampling.

Operator

to at questions over to time. further no Talluri closing With Dr. this are it Raj There like I'd for remarks. that, turn

Raj Talluri

year recap. really and Been Thank 'XX. in are excited by we Super a Yes. great you 'XX where all.

interest. you Thank you your to all talking to forward for look So next quarter. guys

Enovix (ENVX) 20 Feb 242023 Q4 Earnings call transcript