Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SES AI Corp (SES, Financial) achieved a record revenue of $5.8 million in the first quarter of 2025, marking a strong start to the year.
- The company launched a new battery materials discovery software and service platform, Molecular Universe, which is expected to significantly expand their market reach.
- SES AI Corp (SES) maintains a strong liquidity position with $240 million and no debt, providing a solid foundation for future growth.
- The company reported a high gross margin of 79% for Q1, driven by their asset-light business model and AI strategy.
- SES AI Corp (SES) is on track to meet its full-year 2025 revenue guidance of $15 million to $25 million, supported by contracts with automotive OEMs.
Negative Points
- Operating expenses for the quarter were high at $27.8 million, which could impact profitability if not managed carefully.
- The company utilized $22.8 million in cash for operations, indicating significant cash outflow.
- There is uncertainty regarding the global release and adoption of the Molecular Universe platform, as it is still in early access testing with a dozen companies.
- The competitive landscape in the EV battery market is fierce, with other companies pursuing similar strategies using excess capacity and improved electrolytes.
- The success of the Molecular Universe platform is yet to be proven, and its revenue impact remains to be seen.
Q & A Highlights
Q: Can you remind us of the cell type, chemistry, and capacity of your SK facility, and your strategy to maximize its value given the tariffs?
A: The facility in South Korea has two lines: an A sample line built with GMJDA, converted to large pot cells and smaller UAM cells. We can also add equipment for cylindrical and prismatic cells. - Qichao Hu, CEO
Q: How does SES's 2,170 cell performance compare to competitors using excess Chinese capacity?
A: Most 2,170 cells today have less than 30% silicon and 5.5 amp hours. Our cells can achieve more than 6.5 amp hours with high silicon content, stable performance, and no gas issues. - Qichao Hu, CEO
Q: What types of customers are interested in the Molecular Universe AI platform?
A: We have over a dozen early access users, including major battery companies, car companies, and chemical and electrical companies, excited about the platform. - Qichao Hu, CEO
Q: Can you provide details on the pricing structure for the Molecular Universe platform?
A: The platform has five tiers, divided into pure software and software plus services. It includes subscription fees, on-prem deployment, and potential royalties for hidden molecules. - Qichao Hu, CEO
Q: What is the rationale behind the share buyback authorization?
A: The share repurchase program is an efficient capital allocation tool that will not impact our liquidity runway, reaffirming our strong revenue growth path and balance sheet. - Jing Nealis, CFO
Q: How do you expect revenue to ramp through 2025 and into 2026?
A: We are on track to achieve our 2025 revenue guidance of $15 million to $25 million. 2025 is foundational, setting the stage for significant revenue growth in 2026. - Jing Nealis, CFO
Q: How will you measure the success of the Molecular Universe platform?
A: Success will be measured by revenue generated from the platform, which aims to accelerate R&D and reduce development time for battery companies and car companies. - Qichao Hu, CEO
Q: What are your expectations for gross margins in the medium and long term?
A: We expect a mix of about 60% margin, with software and services having margins above 80%, and products around 20% to 30%. - Jing Nealis, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
