Thank you for standing by, and welcome to the Enovix Corporation First Quarter 2025 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. Now, I'd 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 First Quarter 2025 financial results Conference Call. With us today are President and Chief Executive Officer Dr. Raj Talluri, Chief Financial Officer Ryan Benton, Chief Accounting Officer Kristina Truong, and Chief Operating Officer Ajay Marathe. Raj and Ryan 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 First Quarter 2025 shareholder letter after the market closed today. It's available on our website at ir.enovix.com. A replay of this video 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 disclosures in today's shareholder letter and our filings with the Securities and Exchange Commission. All of our statements are made as of today, April 30, 2025, 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. Okay, thank you, Rob. Thank you to everyone for joining us. For our format today, I'll start with a recap of our recent results and the recent milestones, then I'll turn it over to our new CFO, Ryan Benton, here with me for a review of our financials and outlook. I'll have a few closing comments, then we'll take your questions. We feel great about our start to 2025. First, we are pleased to have Ryan Benton as our new CFO. Ryan brings deep financial leadership and experience, and we're excited to have him on board. Second, we exceeded the midpoint of our Q1 revenue guidance, delivering $5.1 million in revenue and secured new defense bookings that support our growth into the second quarter. Third, we commenced the development of a custom smartphone cell with the exact dimensions required by our lead customer for their commercial product. Fourth, we made great strides in our operations. Fab 2 in Malaysia accelerated progress towards mass production readiness. We secured ISO 9001 certification, completed the first formal customer audit, and made critical yield improvements. Fifth, in Korea, we made a strategic acquisition that expanded our manufacturing footprint. This acquisition will provide critical additional coating capacity needed in support of our Fab 2, as well as our local defense customers. I'd like to briefly address recent developments in the global trade environment. Like many global companies, we're following these developments closely. Our assessment is that there's no material impact to our near-term outlook, as most of our planned near-term sales are concentrated within Asia. We also see strategic opportunities, though, as some of our target customers have initiated efforts to diversify supply chains towards Malaysia and South Korea, where our factories are. Now, for a few more details on the acquisition, on April 1, we completed the acquisition of additional manufacturing assets adjacent to our existing South Korea facilities. This includes equipment that will augment the coating needed for our Fab 2 in Malaysia as we ramp, as well as additional production for our Korean military programs and other industry applications that we are targeting. The facility also offers significant room for expansion, enhancing our strategic positioning as the global supply chains continue to evolve rapidly. In smartphones, we reached a critical inflection point towards launching our first product in the market. Last week, we finalized an agreement with our lead customer on the electrochemistry we will deploy in the custom cell we are building for the upcoming product launch this year. We are now manufacturing custom cells for them to deliver qualification samples later this quarter to support integration and testing this summer. Our benchmarking confirms that we are meeting all key technical requirements, and the customer feedback has been very positive and constructive. They have been a great partner to us. We appreciate the attention and resources that they, as well as many of our other customers, have dedicated to help us pull forward. Now, we are also actively engaged with other smartphone OEMs to ensure a rapid ramp once we establish in the market. This progress strengthens not only our smartphone initiative, but also bolsters and accelerates our broader communications commercialization roadmap. Fab 2 in Malaysia is well positioned for scale, following ISO 9001 certification and our first completed customer audit. While we continue to make enhancements on yield and other operational metrics that will be critical once we are in mass production, we feel good about the state of our manufacturing readiness, and our focus this quarter is weighted heavily towards supporting custom cell developments for our marquee customers to solidify the demand in 2026. Our focus on smartphones is strategic and deliberate. This market highly values energy density, especially given the growing demands of AI-enabled features and applications such as intelligent cameras and the proliferation of LLMs. The smartphone market represents the fastest path to fully utilizing Fab 2 while maintaining the opportunity to price on value. Meeting the stringent requirements of smartphones facilitates other business opportunities in adjacent markets. In Q1, we delivered our first smartwatch customer samples. We're also accelerating our expansion into handheld computer and scanner segments, where we've been engaged with a market leader in retail and logistics. Recent tariff developments have created new opportunities in this segment, prompting increased urgency and deeper collaboration from them. Finally, on the product front, I'm pleased to report that we recently completed benchmarking analysis of premium smartphone batteries launched in 2024 that indicates we hold a material lead in energy density, and we expect it to grow considerably with future generations. Last year, several conventional architecture battery manufacturers developed a technique called silicon doping, where a small amount of silicon is added to graphite anodes to increase the battery capacity by a modest amount. Based on our firsthand experience and feedback from our smartphone customers, we believe that our competition will be capped from achieving meaningful energy density increments or enhancements using these techniques within their current architecture due to swelling and other trade-offs they'll have to make. Our internal benchmarking analysis of premium smartphone batteries launched in 2024 indicates that Enovix's unique architecture with 100% active silicon anode will hold material lead in energy density, and we expect it to grow considerably with future generations. Our customers also validated that our architectural approach offers significant gains for foreseeable future by leveraging the full potential of 100% active silicon anodes. With that, I'll turn it over to Ryan for the financials, right? Thanks, Raj. To all the shareholders and employees watching and listening, it's my honor and pleasure to be here. I feel equally excited and fortunate to have joined Enovix at such a pivotal time as we look to expand our commercial operations and scale our next-generation battery technology. I would like to add a special thanks to Kristina, our CAO. She's helped make my transition seamless. As I've only been on the job two weeks, I've asked her to join us on the call to ensure we can properly answer every question that arises. Before we get to the numbers, I want to give some color on what attracted me to the company, which is the opportunity to help drive the next stage of growth, supported by an already strong foundation, a leading technology platform, deep strategic customer engagements, a talented and dedicated workforce, and a solid capital base that is well positioned to support our growth plans. I look forward to doing my part to help execute on our strategy and create long-term value. Now I'll provide a brief summary of the first quarter financials and an outlook into the second quarter. Further details are available on our website. For the first quarter of 2025, as Raj noted, we delivered revenue of $5.1 million, exceeding the midpoint of our guidance. Adjusted EBITDA loss was $22.2 million, near the high end of our guidance range of a loss of $21-$27 million. The sequential change from Q4 was driven in part by increased expenses to support the manufacturing scale-up in Asia and a modest decline in gross profit. Non-GAAP net loss per share attributable to Enovix came in at a loss of $0.15, at the high end of our guidance range of $0.15-$0.21. Capital expenditures in the quarter were $6.3 million, and cash used in operations totaled $16.9 million. We ended the quarter with approximately $248 million in cash, cash equivalents, and marketable securities. We believe our current capital position provides flexibility to support our operations well into 2026 while maintaining optionality to fund additional expansion capacity at Fab 2. Now for our guidance. For the second quarter of 2025, we forecast revenue of $4.5-$6.5 million. Non-GAAP operating loss, which excludes certain items such as stock-based compensation, is in the range of $31-$37 million. Adjusted EBITDA loss, which further excludes certain items such as depreciation amortization, is in the range of $23-$29 million. Finally, non-GAAP net loss per share attributable to Enovix of $0.15-$0.21. One note, going forward, we will no longer be providing guidance for GAAP EPS due to the difficulty to estimate or predict. However, we will continue to provide non-GAAP EPS guidance, and we have supplemented this with an additional measure, non-GAAP operating income loss. Furthermore, in the interest of transparency, we have published a new financial supplement document that compiles historical financial information into a single, easy-to-access document. It is available on our website along with the shareholder letter. Over time, we plan to expand this resource by incorporating additional operating financial metrics and additional data. Finally, at the risk of being redundant, I want to say again how fortunate I feel to be part of the Enovix team. With that, I'll turn it back over to Raj. Raj? Yeah, thank you, Ryan. It's great to have you on board. With that, we can now go to questions, operator. Thank you. We will now begin the Q&A session. Please note that this call is being recorded. Before we go to live questions, we're going to read the two most highly voted questions submitted by shareholders ahead of this call during the call registration. The first question is, can you share any updates on EX-3M in terms of energy density, release, or sampling timelines? Yeah, thank you for that question. The question about EX-3M. Yeah, we are very excited to have formalized the definition of EX-3M, which is our next node, and we expect to sample that by the end of this year. We've got the basic chemistry that we're going to use, and the anodes and the cathodes are locked. In terms, and I think in the investor deck, we give you some indication of relative to EX-1M and EX-2M where it is placed. The actual energy density will be, as I mentioned, a combination of cycle life and also fast charge and a few other parameters. Thank you. Our second question is, what is the status of the first major OEM cell phone development agreement announced May 1, 2024? Yeah, you know, as I mentioned before, we are working with two cell phone OEMs. One of them, we've received the actual cell dimensions, which actually means this is the cell that's going to be used in the phone that's going to go to mass production at the end of this year. We retooled our factory to actually make that particular cell, and Ajay, who's actually calling in from Malaysia, and his team have been working pretty hard on that. We finalized the electrochemistry that will go into that, and we presented that data to our customer, and they're very pleased with the progress. We will be making cells to that dimension in this quarter and giving it to them in the June time frame. The customer, the second customer is also super engaged with us. They gave us a lot of requirements and feedback, and that'll be the next one that we'll address right after the cells go to the first customer. 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 and star six to unmute yourself. Questions will be answered in the order that they are received. Please ask one question and one follow-up question at most. We will now pause a moment to assemble the queue. Our first question comes from Jed Dorsheimer at William Blair. Thank you, Jed. Please unmute your line and ask your question. Hi, team. You have Mark Schmit on for Jed. I was wondering a question about customer conversations. How have they developed since the tariffs have been implemented on April 2nd? Your top two Chinese customers, are they concerned about working with a U.S. company when they have so much internal battery supply? On the flip side, are any U.S. companies or consumer electronics companies more willing to engage rather than being like a fast follower? Yeah, thanks, Mark. Yeah, no, we haven't seen any concerns from our current customers in China. Again, I think the tariff situation is evolving, and it's dynamic, and it changes week to week. So far, you know, I think they love the technology we're able to provide, the energy density we're able to bring in. Again, we make our batteries in Asia, and we ship them to other factories in Asia. We don't see any near-term impact, material interim impact on that front. We have seen more interest from many U.S. customers, not just in smartphone, but in other areas, in wanting to have a U.S. manufacturer who's got factories in Korea and in Malaysia. That has kind of been some tailwinds for us. We are now working on getting samples to them and so on. Thanks, Raj. I appreciate the color. As a follow-up here, I do the slide that you provided with the updated baseline cells. That's very helpful. If I'm looking at the material set, the silicon carbon composites that OEMs have been using in 2024, that's what you're now comparing against. If I were to the same materials that you'd be using or similar materials that you'd be using in EX-2M, the direct compare, the way I'm looking at it, is that the Enovix architecture allows more of that silicon carbon composite material in the cell, and that can give you that 20% energy density boost. Am I thinking about that correctly? Yeah, exactly. You know, what we have seen in the market is people predominantly are still using graphite anodes, but they've, as we mentioned in the letter, doped it with some amount of silicon carbon or silicon, some form of silicon compound, which gives them a one-time, which we did notice that it gives us a one-time improvement in energy density. By the way, as you know, with the Routejade acquisition, we actually have, we make silicon batteries, we make graphite batteries there. So we did that too. We actually added some amount of this kind of silicon compound material on top of that, and we saw a modest increase in energy density. We also saw that as we add more and more of that material, you know, the batteries swell beyond the usable range, and they also have other issues like cycle life and cycle swelling and so on. Whereas in our architecture, we are able to use 100% active silicon of this material, which means there is actually no graphite in our battery right now. We just put all of this silicon material, and we're able to control the swelling because of our architecture, and that's what gives us energy density gains. Now, we haven't fully taken advantage of everything that the silicon architecture can provide. That's why you see us certain benefit in 2M. As you move forward in 3M and 4M, as we increase our packaging efficiency, as we increase our various kinds of constraints that we use in there, and then different separators, cathode voltages, there's a bunch of stuff that we are working on changing. In addition to having 100% active silicon anodes, that's what gives us this roadmap of increased energy density while meeting all the other requirements. It is just a better architecture to take advantage of the benefits of silicon anodes. That's great. Thank you, Raj. Thank you so much. Our next question comes from Colin Rusch at Oppenheimer. Colin, please unmute your line and ask your question. Thanks so much, guys. You know, Raj, can you talk about the importance of the coating line that you're getting with the SolarEdge acquisition to facilitating not only your ramp, but also some of the learning cycles for some of those newer chemistries and being able to commercialize in an efficient way? Yeah, yeah, thank you, Colin, for that question. Firstly, this has been a great acquisition for us, and we talked about the fact that we got quite a large footprint of the factory and a new coating line and also capacity to produce more cells, you know, for a very reasonable price. It was very fortunate that we were able to do that. Look, I think what we've realized as we start building our batteries now is it is very important that we control the coating and have enough of it because the cells that we talked about, you know, when I first started a couple of years ago to now, you can see the cells that the customers want are getting larger and larger. Now we're talking over 7,000, and soon they'll probably be over 8,000, which means we need more and more coating capacity to support the RAM, which is why we felt it was a great opportunity for us to get that. The second one is we are now able to get these new materials. We already have existing coating in our Korea facility, but now we're able to get these new materials, quickly coat them, and see the advantages, optimize the coating, and figure out how to dice them on our laser dicing process and get ahead in terms of building our roadmap. It is a very key acquisition for us to actually optimize the coating and the dicing and the stacking that we do with now we have two coating lines on which we can do that. It was very fortunate as we were able to get that. Excellent. From a materials perspective, obviously there is an awful lot going on in terms of evolution of both anode and cathode materials. I guess I am curious about the number of relationships, number of companies you are able to work with in terms of some of those advanced materials as you look at evolving the platform and being able to kind of accelerate or at least execute against some of the increased density that you guys are talking about here. You know, it's been great because now we have our own, we have these customers that we are working with in the smartphone. We've now gotten recommendations from our customers on different material suppliers we should be looking at. They have talked to the material suppliers, and they're talking to us, which has been a really good thing because now we have customers suggesting different materials that we could use. There's various kinds of silicon anodes that we use. They all come with slightly different advantages in terms of energy density, in terms of cycle life, in terms of fast charge, in terms of storage gassing, and so on. Also now there's different cathode materials that are coming in that can actually run at higher voltages. What happens is when you drive the voltage of the cathode up, we are able to pack even more energy density. If we kind of couple that with an anode, the silicon anode that can hold a lot more lithium, that gives us the advantage that we're now able to make higher energy density batteries. It's been a very good thing for us. The other thing is, I've mentioned this before, maybe not to the clarity I needed to, is that we are material agnostic in the sense that the same laser dicing and stacking and formation machines we have can work with all these different kinds of materials as we optimize them. In the sense that we don't have to buy brand new machines as we change the material stack. The cost of the machines we've bought get amortized over different material stocks. As we increase energy density, we can use the same factories but change the materials and get that benefit. It has been a very interesting journey to see that. I actually think there will be a lot more materials coming in, even separators. We are signing much better separators now coming in and so on. Excellent. Appreciate it, guys. Our next question comes from George Gianarikas from Canaccord. George, please unmute your line and ask your question. Hi everyone. Thank you for taking my questions. Maybe to start, can you share any of the financial metrics around your recent acquisition in South Korea, like revenue capacity, revenue expectations, margin profile, maybe a little bit more detail on the purchase price? Thank you. Yeah, I mean, maybe I'll pass it over to Kristina or Ryan to comment on that. Essentially what we got was it was an asset acquisition. We essentially acquired the assets in the factory, I think 330,000 sq ft of space. We had like 70,000 there before. This significantly added to that. This has the capacity now to make our cells that we are selling into military and also cells that can go into other markets. Maybe Kristina, you want to comment more or Ryan? I mean, I'll just jump in. The structure is an asset purchase. So it was a $10 million purchase price, and we got facility and equipment. Yeah. Thank you. Maybe as a follow-up, you mentioned in the press release some momentum, some sampling momentum with additional end markets. I think a handheld computer was one of them. You know, I know that a lot has to go well for this to happen in 2026, but to the extent you could sort of think about a revenue profile of the firm in 2026, maybe into 2027, how many different end markets do you expect to serve at that time? Will you be strictly smartphone, or do you maybe more of a defense footing? Will you entertain niche markets like handheld computers and maybe some smartphones? I'm just kind of curious as to break down that revenue profile. Thank you. Yeah. Let me talk about the strategy before I talk about the revenue profile. You know, as I mentioned in the prepared remarks, the most challenging battery to make is a smartphone battery because it has high demands on energy density. It has high demands on how fast you can charge. It has high demands on cycle life, how long it has to go. It has high demands on storage and different operating temperatures because phones get used in the cold and hot and so on. We always felt when we target a market like that, a lot of the other markets would be much easier to address. Very similar to when I was at Qualcomm. You know, we used to make Snapdragon that went into all the smartphones. We were then able to sell Snapdragon processors when I was running that division into handheld computers, into thermostats, into vacuum cleaners, and many, many different opportunities. A similar strategy here. We're aiming at the cell phone market, and we're getting requirements from customers to build this really tough battery. Our customers are really helping us with those requirements. As we build out that battery, we're now finding that the requirements in the other markets are actually less stringent, and we can address those much easier. Handheld computers is one such market. Scanners is one such market. AR/VR happened to be a market that we got into. We also want to be really careful not to go into too many markets because each of these markets needs a slightly different custom cell, the shape of the cell. You know, our factory in Malaysia right now, as I mentioned, we're making a smartphone battery for our lead customer, another smartphone customer right behind that that we've given samples, and they like the results, and now that'll become next. Meanwhile, we're supporting two AR glass customers with two different size cells. We're also supporting this IoT customer that I mentioned last time. And then we have the defense product that we're building. The factory is pretty busy and full with all the custom cells we're making. As new opportunities come in, we are looking at opportunities and looking at them not only in terms of our technology being able to meet them, but the financial returns on making a custom cell is opportunity large enough, is the margin profile there, are they big enough, and so on. That is what is really how we're making this. Really excited by how it's going, and we will only see more and more opportunities for this type of technology. We just have to be careful in picking the right ones as an early stage company. We ramp with high volume, most profitable ones first. Thank you. Thank you so much. Our next question comes from Ananda Baruah from Loop Capital. Ananda, please unmute your line and ask your question. Thank you. Yeah, thanks, guys, for taking the question. Really appreciate it. Good to see you guys. Ryan, good to meet you, I guess, on a one-way screen here. Yeah, definitely. Yeah, definitely. I guess, yeah, just Raj, the first question is, I think you had mentioned earlier in the year, and this may be what you were referring to with the first OEM, you know, sending cells to them this quarter. Is it this June through August timeframe still the work being done in there that will then put you guys in position to begin to understand what the programs with them in 26 could look like, which could then also inform the volumes of 26? Is that still a crucial work getting done in that June to August timeframe? Exactly, exactly. And it's on track. As I mentioned earlier in the year, we're on track, and we expect to get samples out in June. And one thing I will say is that we do have meetings with them every week. It's not like we said something and we'll go back in June and talk to them. We've shown them the results. We've given them early cells of where we are. We talk to them about the modifications we are making to the electrochemistry to meet their different requirements, and they give us some feedback back. It's a really close collaboration with both the cell phone OEMs. In that sense, we have a lot of visibility into how things are going. When we do meet all the requirements, we feel more confident. Again, ultimately, we have to put all of this together in this one particular, in the custom cell that they need, and they have to test it in their phone, and that's when the testing will be complete. That should happen from June to August timeframe. Are you guys got it? Should we develop an expectation that you guys can begin to, in the fall, share your initial view on program SKU inclusion? I guess at least whatever SKU inclusion, like sort of volume inclusion, or at least volume TAM, given the SKU inclusion, will there be any of that provided in the fall? I mean, look, ultimately, we can share as much as our customers allow us to share. Because, look, as a component supplier, usually when you bring new technology in, customers are very careful about saying what they're using and when. As and when we get permission from them to share, we'll be happy to share that, right? Okay, that's great. I guess just as a quick follow-up, and I can see before here, the silicon doping process technique that you had talked about, like how much silicon on the anode are they getting to, like sort of at max that you guys have seen? The max we've seen in the market is in the 10% range. So low, yeah, so it's very small. And we are using 100% of the material, by the way, just to contrast. No, that's super helpful. Okay, guys, I appreciate it. Thanks so much. Thank you so much. We have our next question from Derek Soderberg from Cantor Fitzgerald. Derek, please unmute your line and ask your question. Yeah, hey, guys. Thanks for taking the questions. And my congrats to Ryan on the new position. Wanted to follow up on George's earlier question just around the revenue capacity following the acquisition of the SolarEdge facility. Sounded like 4X the square footage of the 2023 acquisition. Is this an acquisition that maybe takes the Routejade potential revenue from sort of $20 million, $30 million to $100 million plus? I understand that some of the electrodes will be used in EX batteries, but can you help us maybe quantify the potential revenue capacity or production capacity expansion with the newly expanded site? Yeah, I mean, you know, look, I think it's a little too early to exactly comment on that. We do have the space. We have the equipment, but we will capitalize and expand that as the demand for those product materializes. We do see now a lot of requests coming in, particularly with the whole tariff scenario that people would like products from Korea. We see that like every day, but we have to be careful to pick the right ones. We are in the middle of that. It's probably a little early to comment on that, but I can tell you we think it's a great opportunity that we got these assets. Yeah, and I will chime in. Again, I think it is a little too early to quote a number, but it certainly does dramatically increase our capacity. As Raj said in the prepared remarks, it is really about two things. One is ensuring that surety of supply in terms of supporting Fab II from a coating perspective. We are seeing just this tremendous kind of uptick in terms of opportunities as it relates to the local defense opportunities. Without quoting a number, it certainly was a tremendous opportunist deal. I give Raj and the team credit for executing on that before I got here. As you can see, it is in the same complex. It clearly is kind of part of the strategic plan. Kudos to them to getting it done. Got it. That's helpful. As my follow-up for Ajay, wondering if you can share where the HVM line is today in terms of throughput relative to some of the UPH expectations you've put out in the past. Just wondering where throughput is at this point, and have you sort of passed the 90% yield throughput yet? Can you just give us an update on how things are progressing? Sure. I hope you guys can hear me okay. Calling in from Malaysia. Fab 2 is progressing really well. We are making a lot of good progress on all fronts. HVM line right now is configured for the custom cell, as Raj alluded to, the custom cell for the first customer. I am talking about changing over the tooling, getting the first pipe cleaners through, and starting the production for the cells that we are going to turn it over or hand over to the first customer. That is all going really well. Yields are progressing. We have made a lot of good improvements on yields and definitely stand by our original statement that we made that we will be up on the yields as the production ramp really begins to the world-class levels. That is all going on track. Yeah. Simultaneously, we are also working on other form factors for AR/VR, as Raj also talked about. The UPH, I would say, is, like I said, the front end of the line, which is really the farm, the laser dicing farm. We are making sure that that process comes along well. The line itself is bought off at 1,350 UPH, as you know, for SAT. Everything seems to be on track. That is what I can share right now from here from Malaysia. I mean, one other comment I'll make, sorry, Derek, is that right now we're making many, many products in the same fab. We have small cells. We have three different kinds of small cells. We have an Army cell. We have a big cell that we're making on the HVM line. Right now, we are really focused on executing on all these programs to get samples to our customers. Nothing we've seen here makes us concerned that when we're at high volume production, we can't get to the yields that we wanted to. We don't need to run them at that speed right now because mostly we're making samples. That's helpful. Thanks, guys. Thank you so much. Our next question comes from Bill Peterson from JPMorgan. Bill, please unmute your line and ask your question. Thank you. Yeah, hi. Good afternoon, and thanks for taking the questions. Also, thanks for the details on the competition. I guess for completeness on these sort of leading-edge competitive cells, are these in the 800 watt-hour per liter range? We've also been getting sort of questions on cycle life. I know you're looking at achieving 1,000. I'm seeing some competitors are maybe even closer to 1,500. I guess just to benchmark where the current leading edge is, how do they compare in terms of cycle life? Also maybe some of these other factors you talked about, things like temperature window, fast charging, and so forth. Yeah, you know, I get this question from this call usually. The nuance of this is kind of very important. Like, for example, when you talk about cycle life, a phone discharges a battery at different rates, right? For example, if the phone is on standby, it's probably drawing at 0.1 C or 0.2 C charge. When you run a full game, it goes at like 0.7 C charge maybe. Cycle life varies based on how you charge. It's hard to quote cycle life as one number. What most customers do is they have a profile of how their phones actually operate, and they come up with a metric on a charge profile and a discharge profile, and they benchmark the cycle life based on that. What I mean by that is you could take a particular phone and say this battery is 1,000 cycles. You can take another phone, the exact same battery may only run to like 600-700 cycles. It depends on how they use, right? It is not a simple one-number metric. It is a very customer-dependent metric. What I can tell you is that we feel our battery is extremely competitive, and that is why the trade-off of cycle life versus energy density versus fast charge is what our customers feel pretty good about where we are. We have continued to improve on all three of them as we move forward. It is hard to answer yours with one number because it is not very meaningful. It depends on phone to phone, customer to customer. Okay, what about at least in terms of energy density, just so we understand where you're coming from? Yeah, clearly. I mean, we are in that, we're all in the 800-plus range. So absolutely, we're extremely competitive with all of them. Okay. As a follow-up, I wanted to talk about your defense pipeline. You've been talking about it a bit more even with the older Routejade acquisition. Are there additional orders forming in 2025? It looks like your additional capacity can support that defense opportunities. Can you break down the interest you have by geography? I presume you could be getting more in the U.S. for the reasons you said. Just maybe around the opportunity itself, I think maybe two years back, the U.S. military alone was around $350 million. Maybe updated thoughts on your opportunity. Yeah, we are getting a lot of interest because of the, as you can imagine, the entire tariff scenario. Again, we've started shipping samples to the customers. We've got sample purchase orders. This takes time because once they get a sample purchase order, they test it, they like the performance, then they all want a custom cell that is very specific to that. The orders will take some time after the qualification period. That is just the nature of batteries. We are getting more and more requests for samples, and we are shipping them now. Like you mentioned, the total opportunity is pretty big. We are fairly optimistic that once we get these samples to pass call, it will be meaningful for us in time. Thanks, Raj. Thank you. Our next question comes from Gus Richard from Northland Capital Markets. Gus, please unmute your line and ask your question. Thank you. Thanks for taking my question. I'm just curious on the SolarEdge acquisition. Is there anything running through the factory at this point, or was it idle? What is it going to take to get it up and running and how long? Yeah, it's making cells for defense applications, and it is also making some cells for ESS applications. It is a working factory. We were able to acquire some people that are running the factory also along with it. There is a coating line that also we got. It is a working factory, and we're just augmenting to our capacity. Great. Could you just walk through sort of the milestones in front of you in terms of getting out of Fab 2, shipping production to customers? What milestones do you have to hit for your lead customer, for example? Where are you in that milestones? Yeah, sure. There are multiple customers we're supporting from Fab 2, right? As I mentioned, there are two AR/VR customers. There is an IoT customer we're supporting, which actually is a large volume opportunity. There are defense products that we're making there and the smartphone, which is a big cell that we're making in the HVM line. We have sent samples to one of, actually two of the AR/VR customers last quarter, and we are just getting ready to send to the second one. We have, of course, given samples to multiple smartphone customers. All our energy is now focused on making this one particular large cell, 7,000-plus milliamp hour cell to our lead smartphone customer. Those samples, the milestone you should look for is us delivering those samples in June timeframe. The next milestone is passing their qualification inside their phone because they do a lot of tests. They do drop tests. They do short circuit tests. They do energy density tests. They do cycle life tests. They do storage gassing tests. All that stuff goes through between June and August timeframe. We will get some feedback on if that all goes well then when we get the purchase order for the next one. On the AR/VR glasses, we've actually sent the samples, and the customers have put them in the glasses now. We can see now how that's going, and they're giving us feedback on that. Milestones from Fab 2 are basically delivering customer samples, getting the feedback from the customers, optimizing it, getting ready for full production. That is what you'll see us report on through the year. Got it. Thanks so much. Thank you. Our next question comes from Ananda Baruah from Loop Capital. Ananda, please unmute your line and ask your question. Hey, yeah, thanks, guys, for taking the follow-up. Hey, Raj, can you remind us where PC quals again fall in the timeline? I guess, yeah, I'll start there. When do PC quals fall in the timeline? I'll probably have to follow up on that. Thanks. Yeah, you know PCs take even longer than smartphones to call. Ironically, it's just a longer qual process. Like I said, we are just so busy with our current factory so full with all these products. We feel once we get the smartphone qualification underway, we should be able to give that size, that size cells with that chemistry to the PC OEMs. Like I said, the smartphones are the toughest batteries to make. To me, once we make that, there are some nuances to the PC ones about temperature and cycle life and stuff like that. We can adjust on top of that with some of the electrochemistry. Those are the cells we'll start with, but they'll take another 18 months from there. PC quals just take longer. I got it. Raj, when you say take the smartphone quals as sort of the jump-off spot, the launchpad for the PC quals, would that be these first two OEM quals that you're talking about? Is it at some point, I'm not trying to pin you down, but just to visualize it, some point by, let's say, mid-26, you can start that 18-month clock? Is that a good way to think about it? Sorry about the background noise, guys. There are multiple stages of call, right? Our plan is these samples that we're giving to our smartphone customers, there will be variation of that. We'll give it to the PC customers. They will start testing it. They'll give us some feedback. And just like it happened on smartphones, they'll give us some nuances that they like. They store it a little longer. They store it at a slightly higher temperature. They want cycle life to be a little more or less. The fast charge may be not that much of a requirement for them because these are plugged in. We will need to make some adjustments to the electrolytes and so on, and then give them the right cell, and then they start the call. That's just how it moves, right? That's how it goes. Very similar to how it has moved on the smartphone side. Got it. Okay, great. Thanks a lot. Appreciate that. Thank you so much. Our next question comes from Ryan Pfingst at B. Riley. Ryan, please unmute your line and ask your question. Thank you. Yeah, hey, guys. Thanks for the time. I just wanted to jump in with one on the EV opportunity. In the release, you comment on the major charge time improvement by a leading battery supplier in Asia and validating your cooling architecture. Can you just dig in a bit there and provide a little more color? Yeah, we looked at that announcement, and what we find is that it's just another proof point that, yes, you can charge them really fast. If you look at that announcement, the temperature does go up fast, and energy density is at stake. Materials are more expensive to do such a thing. Whereas if we did the similar stuff in our architecture, whereas the conventional architecture, we can get to similar rates, but provide the advantages of not swelling and provide the advantages of not getting so hot. It is just another proof point of the value of our technology and even in the EV space. We are making progress on that front. As you guys know, we have two EV customers that are working with us, and we're in the middle of making samples for that. Also from our Malaysia factory now, we have a large dry room there that we built this now and so on. Stay tuned for updates on that. It just validates our argument that fast charge and not getting hot are the key requirements in EV space, and that's what we focused on. Understood. Appreciate it. Thank you so much. Our next question comes from Jed Dorsheimer at William Blair. Thank you, Jed. Please unmute your line and ask your question. Hi, team. It's Mark again, but thank you for the follow-up. For the smart glasses market, in the charts that you provided, you cite a larger performance benefit than even in the smartphones. I'm wondering if you can give us some info of what about the smart glasses application gives En ovix architecture even more performance advantage. And if that is the case, are there any additional margin benefits that could come from that application? Yeah, absolutely. There is a kind of a fundamental difference between how a smart glass works versus a smartphone works. What I mean by that is when the smart glass is creating an augmented reality scenario, for example, you are visualizing something, what has to happen is the processor has to run full blast. The display, which is basically these new displays that have come up, has to run. The cameras are all working because they have to figure out where you are looking because you have to do what is called 6DoF. You have to calculate the six degrees of freedom of where you are looking to create that projection. In other words, the memories, the process, displays are all running full blast to create that user experience. That draws a tremendous amount of battery, even a lot more than what will happen in a smartphone because in a smartphone, typically, they're all not running at the same time full blast, right? I mean, like most of the phones on standby most of the time, every so often it comes on, you do a video watching or something like that, but you're not blasting graphics, GPU, video, camera, audio, everything at one time. The draw is much higher. The other interesting thing is the space of the battery in a smart glass is much smaller because it has to fit just in the temple of the glasses or in the back where it is. The amount of energy density you have to pack in a small volume is much higher, and the discharge rate is higher. Both of those we can do really well in our architecture. That's the reason we're getting all this excitement from our customers for this product. That's why we have two customers that have already prepaid for the volumes. It's just a market that takes advantage of our technology much better. We see a few other markets like that. Typically, when there's space constraint, when there's a display, when there's a tremendous amount of draw due to either AI or a processor or memory running fast, that's a market where we believe we have most advantage. That does translate into ASP premiums, and we are seeing that in both those markets. Thank you so much. Just as a reminder, 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 and star six to unmute yourself. We will pause further to assemble the queue. Thank you. We have another question from George Gianarikas from Canaccord. George, please unmute your line and ask your question. Thank you. Thanks for taking my question. Curious if you could provide any update on the pricing dynamics you're seeing in the market, whether or not they continue to support this margin target that you laid out a couple of years ago. Thank you. Yeah, absolutely. I mean, we've quoted budgetary pricing to our smartphone customers, and I think clearly they see the value, and it's been really good. We closed the pricing on the two AR glasses that I talked about, and those have been clearly validated. The ASP premiums we can command when we provide value. I mean, like I said before, right, I think the number one thing you got to remember is that in smartphones, in AR/VR glasses, in all these markets, the price of the battery as a percentage of the BOM is very small, right? If you look at a smartphone, $1,100 premium tier smartphone, $600 bit on bill of materials, the battery is between $10-$15, right? There's still a long ways to go in terms of percentage of the BOM. In terms of the value it provides, it unlocks the value of the processor. It unlocks the value of the display. It unlocks the value of the cameras. It unlocks the value of the memory. If you look at smartphone purchases, you know the number one and number two are like battery life and the camera. When you provide value, there's clearly ASP premium, and we are seeing that being validated. We are quite comfortable with that. Thank you. Thank you. There are no further questions at this time. With that, I'd like to turn it back over to Dr. Raj Talluri for closing remarks. Thank you. Yeah, thank you again for joining us today. We are very encouraged by the progress we've made, and we are even more excited by what's ahead. Now, we remain focused on execution, deepening our customer relationships, unlocking the full potential of our technology and operations. Now, we really appreciate your continued support, and we look forward to updating you again next quarter. Thank you.