Thank you for standing by and welcome to the Enovix Corporation Third Quarter 2024 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 program will be recorded. And now, I would like to introduce your host for today's program, Robert Lahey, Head of Investor Relations. Please go ahead, sir. Thank you. Hello everyone, and welcome to Enovix Corporation's Third Quarter 2024 Financial Results Conference Call. With us today are President and Chief Executive Officer, Dr. Raj Talluri, Chief Financial Officer Farhan Ahmad, and Chief Operating Officer Ajay Marathe. Raj and Farhan will provide an overview, and then we'll take your questions. After the Q&A session, we'll conclude our call. Before we continue, let me kindly remind you that we released our Third Quarter 2024 shareholder letter after the market closed today. It's available on our website at ir.enovix.com. A replay of this video call will be available later today on the Investor Relations page of our website. Please note that the shareholder letter, press release, and this conference call all contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are based on current expectations and may differ materially from actual future events or results due to a variety of factors. For a discussion of those factors that could affect our future financial results and business, please refer to the disclosure in today's shareholder letter and our filings with the Securities and Exchange Commission. All of our statements are made as of today, October 29, 2024, based on information currently available to us. We can give no assurance that these statements will prove to be correct, and we do not intend and undertake no duty to update these statements except as required by law. During this call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with Generally Accepted Accounting Principles. You can find a reconciliation of the GAAP financial measures to non-GAAP financial measures in our shareholder letter, which is posted on the Investor Relations page of our website. I'll now turn the call over to Raj to begin. Raj. Thank you, Rob, and thank you all for joining us today. For our format today, I'll start with a recap of our recent results, some of our recent milestones, and before I turn it over to Farhan for the financials and the outlook, I'll have a few closing comments, and then we'll take your questions. Now, we had a very productive second quarter. To recap our recent achievements, first, we delivered a Q3 revenue of $4.3 million, about the midpoint of our forecast. We grew 13% sequentially and expect even further growth in Q4. Second, we opened our Fab2 in Malaysia. This was a really huge deal for us because numerous leading smartphone and IoT companies toured our facility. They're impressed by the quality of our first production lines, and now they're even more confident in our manufacturing capability. Third, I'm pleased to announce that we executed a new agreement with a leading global smartphone OEM for the qualification of our battery cells and the late 2025 launch of one of their phone models, as this would mark our first official entry into our smartphone market. Now, ramping Fab2 on schedule and showing it to prospective customers was a very pivotal accomplishment for the company, which until now only made batteries from here in our headquarters in California. It's also a significant accomplishment that we shipped EX-1M samples from Fab2 just weeks after the grand opening, consistent with our plan. Now, the Agility Line is fully operational, and the initial yields in the Agility Line are comparable to the final levels we achieved with our first line in California and with the improvements expected from there. The high-volume line is also on track to complete site acceptance testing in 2024, which is consistent with our timeline and start mass production for smartphones and IoT customers in late 2025. Now, we are thrilled to announce today that we formalized a strategic partnership with the second leading smartphone OEM. Now, this agreement outlines the key milestones that we are working together with them, and upon meeting them, we are set to enter the smartphone market in 2025 with high-volume production. I've said many times before that our first commercial smartphone deal would be the hardest. We still have a lot of work to do in passing the customer qualification process and ramping the high-volume line, but we're doing that together with our customer and with our first expected customer. Now, to further bolster our 2025 sales pipeline, we aligned on a production schedule with a leading IoT customer, which includes a mass production purchase order. This partnership, as well as the progress we're making on the EV space, underscores our ability to diversify into high-value sectors beyond just smartphones. Now, I'm very pleased with our recent commercial success and believe the opening of Fab2 has been a very helpful contributor. We're also getting benefit from the recent surge in AI-enabled smartphones, which is further validating our strategy and driving a significant pull for our products and the transformative leap in energy density that we can provide. Now, last quarter, I mentioned that 4,000 - 5,000 milliamp-hour battery in smartphones in our pockets today could soon go to more than 6,000 milliamp-hours and beyond due to AI. Here we are, just three months later, I report to you that our customers are now asking us for 7,000 milliamp-hour smartphone batteries. Now, why is this important? This is important because the smartphone size has not increased, so the industry will need higher energy density batteries to fit this increased capacity in the same space, which bodes very well for a company like Enovix, which works on producing high energy density batteries. As I mentioned earlier, we've already started shipping of EX-1M. Now, as the needs of our customers continue to increase, we're also launching EX-2M as fast as possible. Now, as I mentioned before, EX-2M will increase the energy density on top of EX-1M. The first sample shipments to select customers of EX-2M are scheduled in Q4, and these are key also to accelerating our timeline to full-scale mass production in 2025 and beyond. We also completed the product definition and roadmap beyond EX-2M, reaffirming our commitment to pushing the boundaries of innovation and delivering industry-leading solutions to our customers across a wide range of industries. With that, I'll turn it over to Farhan for the financials. Thanks, Raj. All the relevant financial information is in the quarterly report and the shareholder letter, so I'll keep my comments short. For Q3, we delivered revenue of $4.3 million, which was above the midpoint of our guidance range. Non-GAAP EBITDA came in at a loss of $21.6 million, above our guidance range of loss of $23 million-$29 million. And non-GAAP EPS came in at a loss of $0.17 at the high end of our guidance range of loss of $0.17-$0.23. We ended the quarter with roughly $200 million of cash and equivalents, and we had CapEx of about $19 million and $31 million of cash used in operations during the third quarter. Our balance sheet is strong and gives us runway well into 2026. Now, turning to the guidance for the fourth quarter of 2024, we expect revenue in the range of $8-$10 million and adjusted EBITDA loss of $19-$25 million and Non-GAAP EPS loss of $0.17-$0.23. Now, I'll turn back to Raj to close. Yeah, thank you, Farhan. As you can see, we made substantial progress in the third quarter by opening our Fab2, securing our most meaningful customer commitment to date, and the next major milestone this quarter on our journey to scale will be completing the site acceptance testing of our high-volume line and shipping the first samples of EX-2M to our customers. With that, we can go into questions. Operator. We will now begin the Q&A session. Please note that this call is being recorded. Before we go live to questions, we are going to read the two most highly voted questions submitted by shareholders ahead of this call during the call registration. The first question is, What yields are we currently seeing on the Agility Line, and when can we expect an update on HVM line yields? Yeah, Ajay, you want to take that? Yeah, sure. So, as we communicated with you all, the Agility Line completed the SAT during the last quarter, and we brought up the Agility Line on the EX-1M technology node at yields a little bit higher than where we left off here, closer to 80%. And the HVM line, which has identical kernels to the Agility Line, is in SAT mode right now in Fab2, and there's no reason to expect anything lower than what the Agility Line was able to do. So, we feel pretty good about these yields, how they're ramping. Yeah, thank you, Ajay. The second question is, understand Enovix's proprietary process is patent-protected where applicable, but how long of a first-mover advantage does Enovix have before you see competition begin utilizing silicon and batteries on a larger scale once Enovix and customers prove the technology works and there is a demand market? And does your arrangement with Group14 Technologies afford Enovix exclusivity in the markets where you utilize their SCC55 material? Yeah, thank you for that question. Yes, as you alluded to, we have a patent-protected process with a significant amount of patents and, more importantly, a significant amount of trade secrets and industry know-how in not only how to manufacture high-energy density batteries, but also the machines that actually we use to manufacture the batteries. As I mentioned before, we first design the machines, and the machines then make the batteries. So, our intellectual property is in both areas. Our unique architecture of manufacturing the batteries allows us to use 100% active silicon. We are the first ones to use 100% active silicon batteries in this consumer market, and we're very excited by that accomplishment that the team has made. The competition that we've seen has been mostly people who use 5%, 10%, in the best case, of SiC or SiOx, some form of silicon material doped on top of graphite. If you use any more than that, what we have seen is the battery continues to swell up, and the swelling cannot be controlled by traditional manufacturing processes. We have a unique advantage there, and that is why we feel strongly that we have this unique value proposition. As far as our agreement with Group14, we're working with Group14. They provide great anode material. We also work with other suppliers of anode material that use silicon and some form of carbon. So, we have multiple suppliers that we use based on the market, based on the end products, and based on the requirements of the battery. So, thank you. We will now go to the queue. If you would like to ask a question, please use the raise hand feature on your screen. If you have dialed in via phone, please use star nine to raise your hand. Questions will be answered in the order they are received. Please ask one question and one follow-up question at most. We will now pause for a moment to let the queue assemble. Our first question comes from Ananda Baruah with Loop Capital Markets. Please unmute your line and ask your question. Yeah, hey, guys, thanks a lot. Yeah, congrats on the new announcement, and thanks for taking the question. Yeah, two, if I could. And I guess I'll just start with the, it's really a clarification around the announcements, Raj. So, is the announced volume customer for December quarter 2025, is that the new customer? Is that the new relationship, or is that the prior relationship? Yeah, this is the new customer that we announced today. There is a commitment in the agreement that we made that once the batteries pass that we jointly agreed to, that once they pass the qualification, we have a commitment to launch in next year. The other customers we work with are also well along the way, and we hope to get more as the year goes by, just proving that the value of our technology is there for multiple customers in the smartphone market. I got it. I got it. That's very helpful. And EX-2M, can you remind us which batteries you'll be going to market with next year at volume, EX-1M, EX-2M, if it goes, if everything goes well once you start getting samples out? Yeah, as I mentioned, EX-1M is a battery that we sample to our customers, and people like the performance of the product. People like what they're seeing. They're giving us some feedback on things to tweak and update to better fit those particular smartphone models, and we're continuing to work with the customers on that. EX-2M is our next technology, which we will be sampling this year, and we expect that to go to production in 2026, and we are working hard to get that accelerated also. Got it. That's helpful. Thanks so much. Appreciate it. Our next question comes from Colin Rusch with Oppenheimer. Please unmute your line and ask your question. Thanks so much, guys. As you look at initial yields as well as the evolving specs from your customers and what's happening with pricing on batteries, can you talk a little bit about how those pricing dynamics are trending and how that rolls through into your target gross margins that you've previously communicated? Yeah, we've started the pricing discussions now with our customers of these products that we're expecting to launch next year. We've also closed pricing with some of the other customers in the IoT space. We are continuing to be able to command the premium for our batteries because we provide much higher energy density, and that's very valuable in premium-tier smartphones, which is where we are focused on, where the value we provide translates into value for the end customers. So, our customers are able to give us that price premium because they're able to take advantage of the higher battery density. So, we feel pretty good about it. As for the gross margins, we've mentioned in the last quarter our long-term gross margin profile that we expect to get to as we get to these premium-tier smartphones in the 50% range. At scale, we still expect to get to that. Okay, fantastic, and then on the $10 million. Colin, I think Farhan wanted to add to that. I just wanted to make sure that you got that it's cash gross margin of 50% and plus, not just gross margin. Like Raj said, we expect that we can get there. Already in the market, what you see very clearly is that the batteries which are higher energy density get a premium. So, we expect to get a premium as well. This market is sensitive to energy density. For us to achieve our long-term target, we have to get the EX-2M type energy density and beyond and get to scale, like we said. We expect that we can get those margins once it's scaled. Fantastic. Appreciate the clarification. And then in the guidance for fourth quarter and revenue in that $8 million-$10 million, can you just break out what's coming from Routejade and how much is coming off the Agility Line and driving that revenue? Yeah, it's mostly coming from Routejade. There's a small amount that is coming from the Agility Line, but at this time, we are mainly sampling. And so, the revenue contribution is mostly coming from Routejade. Appreciate it. Our next question comes from Bill Peterson with J.P. Morgan. Please unmute your line and ask your question. Yeah, hi. Good afternoon, and thanks for taking the questions, and nice to see the additional announcements. I wanted to ask about sampling, so I guess how many of the top eight smartphone OEMs have received the EX-1M samples thus far? What's the initial feedback been? I think you're looking to sample six out of the top eight. Have you sampled the large Korean or the large US player, or are these pretty much all in China, and I guess are there other form factors or device types that you've also sampled in the quarter with similar technology? Yeah, the Agility Line, as I mentioned, we just got it up, and we've sampled some customers, and we'll continue to sample more and more. There is interest from many, many different people, and it's just we are trying to make them as quickly as I can. I can't really give you all the details of who we sampled to. It wouldn't be fair to say that. But I can assure you there's a lot of demand, and we're trying to make them as quickly as we can. And maybe Farhan. Yeah, no, I just want to say that we have sampled, like we said, the two customers that we have disclosed are top five OEMs in smartphones. So, they are not like some tiny company. They are companies that are very prominent in the premier-tier smartphones in China, and so that's something that we can tell you. Yeah, that's what we are prioritizing first because that's where we see our highest demand. Okay, I guess on the commercial side, given your expectations with the new smartphone OEM announcement, plus I guess some early IoT production schedules, can you give a sense of what kind of volumes you're expecting broadly in 2025? I mean, can these be in the millions, I guess, in the smartphone side, or how should we think about volumes? Yeah, you know it's very difficult to know exactly that. I think we will get more clarity as we move along. So, as I mentioned last time, I think it's important to understand the process of how smartphone penetration happens, right? So, we give them samples. They're going to test them. Then we're going to get from them the specification of the exact battery size that they would like to use in the phone that's going to launch in late 2025. And that'll usually come beginning of 2025. That's when they finalize what the model would be, what the size would be. Then we make that cell in our high-volume manufacturing line. And they'll go through another set of series of tests within the phone model itself. Based on the performance and based on which model they're targeting, the volumes will vary based on which regions they launch and so on, at least the initial ones. Then through 2026, you'll see them build up and go into more and more models. That's typically how the smartphone ramp works. They start small, but they keep going up. Yeah, and the other thing I would just add, like Raj mentioned it earlier, though, we've always felt that the hardest part of the ramp is getting the first customer. Once you have the first customer, your value proposition to customer changes. Before that, the risk for customers is, hey, this is a battery that nobody else is using. And if I use it and something goes wrong, then there's a lot to lose. If on the other hand, the best battery goes in a smartphone and it launches and it's proven, then the equation changes. Then if you don't use it, then you risk falling behind. So, that's how we have approached. It's very encouraging to see at least one customer has gotten over that hump and said that, hey, we build the batteries in their form factor, and if they meet the performance that is in line with the expectation, and based on the initial samples, they feel good about engaging with us and with the intention of launching a phone in 2025. Well said. Thank you. Our next question comes from George Gianarikas with Canaccord. Please unmute your line and ask your question. Hi everyone. Thank you for taking my questions. Just to maybe tack on to the previous question, to the extent you wanted to fill your revenue pipeline additionally for next year, given how late we are in 2024 and how long it takes to qualify and get designed in, is there still potential if customers come to you that are testing your samples to fill the 2025 revenue pipeline between now and the end of the year or wherever that deadline kind of meets? Thank you. Yeah, it's all going to be based on how quickly the batteries get qualified in the customer's products, right? That's the most important thing people need to realize about this market. Batteries, people take very seriously when they put it in a device. And the qualification process is very strict and takes a certain amount of time, a lot more stringent than semiconductors, for example, because of safety and so on. But I do believe that we do a lot of the testing in-house to make sure that what we're giving is what people really want and are safe. So, if things go well, it could be much faster. But we are planning that it'll be late next year. But I will tell you one thing, though. First ones are the hardest with any customer because once you're a supplier that is vetted in their system and they've launched some batteries with us, the following models come much faster and much quicker. So, I think that's the most important thing. Maybe as a follow-up to that, is the same logic applied to additional IoT customers who could fill the revenue pipeline for next year? Thank you. In some IoT markets, the testing could be a little less stringent because, for example, in smartphones, customers want 800 to 1,000 cycles. So, to test 800 to 1,000 cycles takes months because you can charge and discharge and charge and discharge 800,000 times. Some IoT markets, people only want 500 cycles because maybe the product doesn't last that long and not charged every day. They could be lesser. So, that's one example where you could launch the product sooner because the testing cycle could be shorter. I'll give you another example. Like in a portable device like a smartphone, people do a lot of safety tests like a drop test, like a thermal abuse test, and so on. If it's a larger portable electronics device, maybe that's not as important. So, again, it all comes down to the nature of the device, how many cycles it has to go through, how much testing the customers want to do, and how the device is used. And that is what gets how quickly a product can go to production after we give them samples that qualify. Our next question comes from Gus Richard with Northland. Please unmute your line and ask your question. Yes, thanks for taking the question. Now that you're getting visibility into 2025 and given the mix you're expecting, what do you think the revenue potential for that line would be given the mix you're looking into both IoT and mobile? You know, I think we mentioned before our line is capable of running at 1350 UPH. And that is for large-sized batteries. We mentioned roughly like nine million units at $10 is what we can get the line up to. But again, I think the gating thing is not so much the line, but the gating thing to how much revenue is the customer qualification timelines. And we take that very seriously, and we spend a lot of time on making sure the batteries are safe and the customers to go through all their tests for the first time around when we are the new supplier. But once we get there, I think the revenue will be much, much quicker. Okay, got it, and then just thinking about the second line, I think you had talked about that starting production maybe at the end of next year, and I was wondering if those plans are still on track. Yeah, the way we think about second line is this. Again, as we get more and more visibility through 2025, as the customer qualifications are going, for example, if you're getting into a very high-volume phone, we'll know that. And when we know that, we'll need to quickly start investing on the second line to build that up. And if it's a lower volume and then the next model is higher, we probably have a little bit more time. And also, we want to make sure that the second line is much lower cost than the first line. Ajay and his team have some great ideas on how to not only cost-reduce the line, but make it faster. So, all those things we take into account. And we'll give you more color through 2025, how we are building those lines in 2026 and 2027. Anything else you want to add, Ajay? Yeah, just to add to what Raj just said, we are working, learning from the line number one, the high-volume line, where can we cost-reduce this line significantly? And we already said that that was the plan. And we are executing to that plan now to substantially reduce the line number two. So, we don't want to rush into ordering line two, which is exactly a replicate of line one because then that would not be right. We need to cost-reduce it, and we have a lot of good ideas which are actually in the works right now before we order the second line. Yeah, and many of those concepts which will be in the line two, which cost-reduces the line, have been tested through proofs of concept, right? The POCs that we typically build. And yeah, we're finishing that up before we are ready to order the line two. Our next question comes from Gabe Daoud with TD Cowen. Can you please unmute your line and ask your question? Hey, everyone. Thanks for the time. Maybe just going back to the order, guys, could you maybe talk a little bit about what exactly has to happen from here to 4Q 2025? Obviously, they're going through a qualification process, but maybe some of the milestones that need to be achieved, whether it's specific targets on energy density or cycle life or fast charge capability. I know it may differ depending on specific model, but curious if there's any kind of brackets you could put around that? Yeah, so the important milestones from now are in the first quarter, we will get the dimensions from the customer. And based on those dimensions, we will make the samples. 2Q, we will ship to them. And 3Q, we expect to get the final order. Raj, is that right? Yeah. So, those are the milestones there for you. Yeah, we do have clear targets on energy density and fast charge and cycle life. So, we do have those targets from them, and we are working with them to deliver those to them. Okay, and then just a quick follow-up to that. So, you expect to get the order in 2Q. And any kind of range on these specific models and what they do in terms of shipments a year, just to try to get a sense of what the actual size of the order could look like? Yeah, I think I answered that question. It's hard to tell that now. We'll know more about it. I can tell you it's in the premium tier. That's where we provide most value, and we'll give you more color as we get closer. Okay, okay, thanks, Raj, and then just a quick follow-up. Any comments on capital needs and maybe options to bring in additional capital in the door if you think you need it? Thanks, guys. Yeah, thanks, Gabe. So, it looks like we have runway till 2026, and we will continue to evaluate more capital if we need it. Like as I've mentioned in the past, we may need more capital to get to profitability. At some point, we have to raise capital. There are three avenues open for the company: the capital markets, the governments, and the customers. We are pursuing all of them to see what makes the best sense for the company and provides the most efficient path with the least amount of possible dilution while managing the risk for the business. We will continue to evaluate that. One big thing that we are very particular about is delivering on the milestones before we go and raise capital. That's something that is also important to the company. Thanks, Farhan. Thanks, guys. Our next question comes from Derek Soderberg with Cantor. Please unmute your line and ask your question. Yeah, hey, guys. Thanks for taking the questions. Just regarding the smart glass opportunity for you guys, I'm curious how investors should think about the addressable market there, maybe relative to smartphones. I don't know if you could talk about the size of that market today versus what maybe you guys expect over the next 10 years or so. And then from a content standpoint, Raj, it sounded like these smartphone customers want a pretty sizable battery cell. But for the smart glass devices, what sort of capacities are those devices targeting? Yeah, great question. So, first, I wanted to kind of maybe add a little bit of color to the requirements of the smart glass market versus the smartphone market. When you look at these AR or VR, XR, as some people call it, or mixed reality headsets, the requirements on the draw on the battery is actually much, much higher than smartphones at any given point of time. And the reason for that is they don't have standby modes like my phone is right now. These things are when they're on, they're on fully on, and the processor is on, the memory is on, the display is on, and to get that real experience, the GPU is running full speed. So, the power draw on the battery is very high, and the batteries last a very short period of time. They're also smaller because you have to put them inside the glasses. So, it's a market that's very ideally suited for our kind of batteries, which deliver high energy density even in small form factor. So, that's a market we're really excited by. I've seen some industry reports. This will be multiple tens of millions in the next few years, like 20-30 million units is what I saw in out years. I think this market is still being built out. I've seen demonstrations of the products. We announced a customer, I think last quarter or the quarter before, I forget, that was interested in our product, and then we are making custom cells for them. They look amazing. I think there's a lot of progress that has been made in waveguide optics. So, the experience you get is really, really good. I expect a lot more customers to start making those products. Particularly with GenAI, you can use speech to navigate now, and that's looking really, really good. That also demands a lot of battery life. In that sense, I think there'll be smaller batteries when they look like glasses. There could be bigger batteries when they look like AR, VR headset. If they're form factors where the battery is on the side and you plug it in like a Vision Pro, those could be bigger batteries. If the battery is inside the head, there may be slightly different batteries. I expect there to be multiple form factors of batteries in those kinds of devices. But all of them have this need for high energy density in a small form factor. Something that suits well for us. It's a market I'm personally quite excited by. It may take a little bit longer to become a really large market, but I think it's a good market for us. And the ASP is a market where we can get a very nice ASP premium. And I think we are seeing that in our first batteries that we quoted. Got it. And then as my follow-up, just regarding the announcement around the IoT customer, some of the wording that's been used is mass production. I'm curious if you can sort of quantify what that means by mass production. Is it sort of a million battery units annually? Something like that is maybe something we should go off of. And then also, I'm curious if you can speak to which kind of device that IoT device is. Thanks. Yeah, unfortunately, we are not at liberty to speak about that device. I know this is a question I get often, which device, which customer, and I promise you, I'll work hard on trying to get names from the customers, see if we can mention them. You got to understand when you're an early-stage company and when you get customer samples into these products, the customers are a little hesitant about really letting us speak about them, speak exactly what they are. I would say that we are excited that it is something that will be in the market, that you should be able to buy some of that. I know everyone's looking forward to that, but that's probably all we can say at this point in terms of who the customer is and how big it is. Our next question comes from Sean Milligan with Janney. Please unmute your line and ask your question. Hey, thanks for taking the question, guys. I'm hopping from another call, so sorry if you already answered this. But can you kind of go over the remaining CapEx to deliver the first auto line and kind of maybe how that splits up in terms of what's fourth quarter and what's first half next year? Yeah, so most of the CapEx will be in this year. So, we are funding for the line ourselves. And we expect that the CapEx will be somewhere about $80 million-$90 million this year. And then for next year, we are not expecting a lot for this line. It should mostly be done this year. Maybe $5 million or so might carry on to next year. And then next year, the CapEx should be fairly small till we get to the Gen2 line. And when we are ready to order that, then we may have an uptake. But overall. Okay, is most of that? It's fairly small. Yeah. Sorry, go ahead. How much of that is left to be spent of the $80-$90? No, next year is only about $5 million. So, you can look at the CapEx for this year. And we are expecting about $80 million-$90 million for the year. Okay. And then as you start to order additional lines, how should we think about the payment splits? How much is on order? How should we think about that cadence? No, the next line is not on order. Again, like I said, we have been doing proofs of concepts of how to do this second line a lot more economical. And that's the only thing that we have spent on is POCs, actually proofs of concepts. And the way to think about line two is the target we are expecting where line two, high-volume line, line two will fall is roughly 60% of the line one, roughly. I'm in the beginning. How do you want to? Yeah. So, what we'll do is actually we'll manage the cash flow in such a way that the long lead time items we will order probably earlier on in the year, 2025. And some of the proofs of concept will pan out through the year. And as we get closer to the end of the year, call it Q3, we would place orders for the remaining parts of the line. That's how typically. And again, this is all going to be driven by how the demand shapes up and the profile of the demand. Okay, that's helpful. Thank you. Our last question comes from Mark Shooter with William Blair. Please unmute your line and ask your question. Hey, thanks, team. Congrats again on the second customer. We got more details in that engagement. So, should we read this as more concrete, or is this customer more eager than the other? Is there an opportunity here to try to pit these two against each other in a race for qualification? I mean, every customer is a little bit different, Mark, and I think, as you know, I have relationships with all of them. Every customer is a little bit different. Every customer is in a little bit different stage. I think that's the way you should read it. Our goal, of course, is to be a sizable player in the smartphone market, so it's just a question of who does first versus next, so that's probably the best way to describe it. Yeah, and I would say. That's what I would say. Yeah, and I would just add to it. Like earlier, also, Raj mentioned, and I mentioned that the first one is hardest, and the equation changes. Once you get one, it goes from push to pull. The first one is you have to convince them, and you have to cross all the hurdles. But once you get past that, from the next ones, it becomes a lot easier. Yeah, and my experience, both at Micron, TI, and Qualcomm, is we launched the first one, then pretty much most of the market tends to use the technology once it is differentiated, and they see the value. So, that's just the way the smartphone market works. Got it. Thank you both. Silicon has a slightly lower reduction potential and so a lower voltage profile. And I know smartphones are a high-power device with high voltage. I'm wondering if customers have brought this up. Is there any pushback in terms of the voltage profile, or are they open to modifying the power management and the electronics? Any conversation like that with your customers? Yeah, yeah. We've had a lot of conversations with them, and it's an area where we work very closely with the other components in the ecosystem. For example, Qualcomm makes processors and PMICs, and we work with the customer and Qualcomm. So, I think people have realized now that silicon is going to be in the smartphone market, so the PMICs have already made the adjustments to actually be able to get that last bit of energy from silicon, which is work we've been doing through last year, and we're pretty happy that that should not be a problem anymore. Got it. Thanks for calling. We have one final question from Tony Stoss with Craig-Hallum. Please unmute your line and ask your question. Thanks, Raj. I wanted to follow up on your comment about the 7,000 milliamp batteries. I'm curious kind of when you think you could be producing something to that density, and also, what would the ASP be like on that? Are we kind of stuck in that $10 per battery ASP, or would the higher densities markedly move up from that $10 number? Yeah, I'll take the comment on when, and I'll let Farhan talk about ASPs. He's pretty passionate about that. But yeah, this is for launching next year. We are actually talking about next year, 7,000 milliamp-hour batteries. And I actually think it's going to keep going up. If we can produce higher and higher energy, higher capacity batteries in the same footprint, I think there is still a lot more demand for energy capacity in these smartphones because the applications we see now are just drawing more and more power from the battery. Yeah, no, so I would say that if you look at 5 - 5.5 milliamp-hour cell, those batteries is what we said when we said that 11.5 million units and $150 million revenue. So, about $13 in ASP would get you to our target revenue. And if you look not at our silicon batteries, but what's in the graphite silicon space, those batteries are in the $10-$12 kind of range, the higher performing tiers based on a market analysis. And so, getting a little bit of a premium to that is what we are expecting. And so, by the way, the commodity batteries are like $7-$8 kind of range. So, already higher energy density batteries getting a premium is already validated because we will have a significant energy density advantage. So, what we were basing is not that much off. Now, switching to 7,000, it's a higher energy density and higher amount of material goes in. So, it's fair to think that pricing should be higher. Exactly how much remains to be seen. It's probably too early to say because at that point, to the best of my knowledge, there's nobody else who's providing those batteries. So, once we get there, we may have more ability to price and get a better price. But it'll definitely be higher than what you're charging for 5- 5.5-amp-hour cells today. Great. Thanks, Farhan. There are no further questions at this time. With that, I'd like to turn the call over to Dr. Raj Talluri for closing remarks. Yeah, great quarter. And thank you all for patiently listening to us. And we'll talk to you next quarter. Thank you. Thank you.