Enovix Corporation (“Enovix”) (Nasdaq: ENVX), an advanced silicon
battery company, announced today financial results for fourth
quarter and full year 2023, which included the summary below from
its President and CEO, Dr. Raj Talluri.
Fellow Shareholders,
In the fourth quarter of 2023 we completed our acquisition of
Routejade and positioned the company to scale with high-volume
manufacturing in Malaysia. Our highlights for the quarter
include:
- Record top-line performance: Revenue of $7.4 million in the
fourth quarter of 2023, up from $1.1 million in the fourth quarter
of 2022 and $0.2 million in the third quarter of 2023. Revenue
strength was driven by strong performance from Routejade, along
with continued volume shipments of BrakeFlowTM-enabled batteries
for the U.S. Army.
- Scale-up of Fab2 in Malaysia: Built out approximately 250,000
square feet of factory space and began receiving shipments of Gen2
equipment that had cleared Factory Acceptance Testing (“FAT”)
during the quarter. We remain on track to produce first silicon
battery samples from Fab2 in April.
- Customer engagement: We hosted the management teams of two OEMs
with top 5 smartphone market share in China at our Fremont
headquarters during the quarter and recently signed a development
agreement with a leading automaker.
- Technical milestones: Based on battery cycling performance in
our labs and advanced modeling, we gained confidence in the quarter
of achieving 1,000 cycles on our smartphone-class silicon battery.
We plan to begin sampling high cycle life smartphone batteries,
which we call EX-1M, beginning in the second quarter of 2024.
We made tremendous progress in 2023. Notably we: 1) established
a strong manufacturing base and team in Malaysia, 2) rebuilt the
management team with experienced leaders that have a demonstrated
track record in our target markets, 3) strengthened customer and
supplier relationships with focus on industry-leading smartphone
batteries, and 4) vertically integrated our manufacturing through
acquisition and gained a seasoned team in Korea that has shipped
batteries for over 20 years. We are now focused on executing our
global scale-up plan.
We plan this year to demonstrate to customers: 1) high-volume
manufacturing from Gen2 equipment and 2) high-energy density
batteries tailored to smartphones. Both activities commence in the
second quarter of 2024 and our confidence level is high that we
will be successful. In parallel, we intend to grow overall revenue
meaningfully year-over-year.
The need for a higher energy density battery is critically
important across all industries. This is particularly the case in
the smartphone industry, which is now facing a tidal wave of
power-hungry AI-based applications.
During the quarter, we contracted with Tirias Research to
analyze historical battery and power consumption trends on the
smartphone, along with a forecast for AI usage in the coming years.
Tirias forecasted that global GenAI usage (all words, symbols,
images, and video frames) will increase over 150x between 2023 and
2028. The impact on device energy budgets is likely to be massive.
As an example, Tirias found that capturing video with AI features
enabled on two leading flagship smartphones consumed over 50% more
battery life than without AI. They also found that running chatbots
ChatGPT3 and Llama 2 consumed 2x-11x more battery life than
watching videos on YouTube. This AI megatrend calls into question
whether today’s standard of all-day battery life on the smartphone
is sustainable without a battery breakthrough like ours. We are
extremely well-positioned given our engagements with Vivo, Xiaomi,
Lenovo, among others, and highly motivated to solve this problem
for these industry leaders in the years ahead.
Business Update
Manufacturing. Fab2 in Malaysia began to take
shape during the quarter as first tools showed up in November and
we began installing laser patterning and battery formation tools
for Site Acceptance Test (“SAT”). In parallel, we converted battery
production sections of the facility to meet the Class 10,000
Cleanroom standard.
Our FAT and SAT processes are extremely rigorous, meant to
ensure that we place machines into service that meet our
specifications for throughput, yield, and machine uptime. With that
in mind, we are finalizing FAT for our battery stacking and
packaging equipment with a priority on preparing our Agility Line
in Fab2 to produce first customer samples early in the second
quarter of 2024 with the high-volume Gen2 Autoline beginning
production right behind it.
In support of our Malaysia expansion, we continued during the
quarter to strengthen our relationships in the country. Notably, in
November we met with Malaysian Prime Minister Anwar Ibrahim during
his visit to the Bay Area for the Asia-Pacific Economic Cooperation
(APEC) summit.
Commercialization. We recently entered into a
development agreement with a leading automaker to validate the
advantages of the Enovix cell architecture for an electric vehicle
(“EV”) battery. We believe this agreement is a strong endorsement
of our architecture’s value proposition in the EV battery market,
which is expected to eclipse $500 billion by 2040, according to
analyst estimates.
During the quarter we continued to build out our customer-facing
product management team. This seasoned group has been able to
collect detailed product requirements and test plans from multiple
leading smartphone and computing OEMs, which should prove
advantageous as we increasingly tailor our technology roadmap to
unique customer needs.
The battery business from our recent acquisition of Routejade
delivered a strong quarter due to fulfillment of orders to
customers in the military, IoT, medical, and industrial end
markets.
As we integrate this business, we see revenue synergies to
extend this new product portfolio to our existing customer
relationships in the IoT and military markets. These products have
already been well-received, and our new Korean manufacturing
location allows customers to geographically diversify their
supplier base within Asia.
Technology and Products. Tailored to the cycle
life and fast charge specifications of leading OEMs, we are
developing two generations of high energy density smartphone
batteries, named EX-1M and EX-2M. We plan to deliver customer
samples of EX-1M in the second quarter of 2024 and EX-2M in the
fourth quarter of 2024, both from Fab2. In parallel, we are also
developing variants for products in other markets that require
exceptional energy density or extreme temperature tolerance.
We believe EX-1M and EX-2M will be the first smartphone
batteries in the world to use a 100% active silicon anode to drive
category-leading energy density while also delivering 1,000 full
charge-and-discharge cycles and fast charge. Core to this landmark
achievement is our material agnostic strategy, which has allowed us
to leverage leading materials suppliers to upgrade our anodes,
cathodes, and electrolyte formulations from EX-1. Toward this end,
in January, we announced a collaboration with Group14 Technologies,
to develop a silicon battery using 100% of its anode material
within the Enovix architecture.
Furthermore, reducing our R&D qualification time has also
been critical to this achievement. Based on advanced modeling
processes developed by our team in India, we have been able to cut
down internal qualification times from 14 weeks to eight weeks
based on cycle life predictions when we adjust materials.
Financials. Total revenue in the fourth quarter
of 2023 was $7.4 million, up from $0.2 million in the third quarter
of 2023.
Our GAAP cost of revenue of $19.8 million in the fourth quarter
of 2023 was up from $16.8 million in the third quarter of 2023. Our
non-GAAP cost of revenue of $17.1 million in the fourth quarter of
2023 was up from $14.4 million in the third quarter of 2023. Both
our GAAP and Non-GAAP cost of revenue included accelerated
depreciation of $6.2 million associated with the strategic
realignment of Fab1 we announced last October.
Our GAAP operating expenses of $52.4 million in the fourth
quarter of 2023 were up from $33.8 million in the third quarter of
2023. Our non-GAAP operating expenses of $40.3 million in the
fourth quarter of 2023 were up from $18.8 million in the third
quarter of 2023. Both our GAAP and Non-GAAP operating expenses
included accelerated depreciation of $12.3 million also associated
with the strategic realignment of Fab1.
We exited the fourth quarter of 2023 with $306.8 million of
cash, cash equivalents, and short-term investments due to cash used
in operating activities of $27.2 million and capital expenditures
of $28.8 million.
A full reconciliation of our GAAP to Non-GAAP results is
available later in this report.
Outlook
For the first quarter of 2024, we expect revenue between $3.5
million and $4.5 million, an adjusted EBITDA loss of $24 million to
$31 million, and a Non-GAAP EPS loss of $0.29 to $0.35 which
includes approximately $0.10 of negative EPS impact from
accelerated depreciation associated with the strategic realignment
of Fab1.
Summary
We made significant progress in 2023 and now have the structure
in place to continue advancing toward our goal of becoming a scale
supplier with multi-billions of dollars in revenue and
industry-leading margins. We are focused on the execution of two
key milestones in 2024: 1) demonstrating high-volume manufacturing
in Malaysia and 2) delivering samples of our leading smartphone
batteries, EX-1M and EX-2M, to customers.
Conference Call Information
Enovix will hold a video conference call at 2:00 PM PT / 5:00 PM
ET today, February 20, 2024, to discuss the company’s business
updates and financial results. To join the call, participants must
use the following link to register:
https://enovix-q42023.open-exchange.net/. This link will also be
available via the Investor Relations section of Enovix’s website
at https://ir.enovix.com. An archived version of the call will
be available on the Enovix website for one year
at https://ir.enovix.com.
About EnovixEnovix is on a mission to power the
technologies of the future. Everything from IoT, mobile and
computing devices, to the vehicle you drive, needs a better
battery. The company’s disruptive architecture enables a battery
with high energy density and capacity without compromising safety.
Enovix is scaling its silicon-anode, lithium-ion battery
manufacturing capabilities to meet customer demand. For more
information visit www.enovix.com and follow us on LinkedIn.
Management’s Use of Non-GAAP Financial
Measures
EBITDA, Adjusted EBITDA, Free Cash Flow and
other non-GAAP measures are intended as supplemental financial
measures of our performance that are neither required by, nor
presented in accordance with GAAP. We believe that the use of
Non-GAAP measures provides an additional tool for investors to use
in evaluating ongoing operating results, trends, and in comparing
our financial measures with those of comparable companies, which
may present similar Non-GAAP financial measures to investors.
However, you should be aware that when
evaluating the non-GAAP measures, we may incur future expenses
similar to those excluded when calculating these measures. In
addition, the presentation of these measures should not be
construed as an inference that our future results will be
unaffected by unusual or nonrecurring items. Our computation of
EBITDA, Adjusted EBITDA, Free Cash Flow and other Non-GAAP measures
may not be comparable to other similarly titled measures computed
by other companies, because all companies may not calculate the
Non-GAAP measures in the same fashion.
Forward-Looking Statements
This letter to shareholders contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, about us and our
industry that involve substantial risks and uncertainties.
Forward-looking statements generally relate to future events or our
future financial or operating performance. In some cases, you can
identify forward-looking statements because they contain words such
as “will,” “goal,” “prioritize,” “plan,” “target,” “expect,”
“focus,” “look forward,” “opportunity,” “believe,” “estimate,”
“continue,” “anticipate,” and “pursue” or the negative of these
terms or similar expressions. Forward-looking statements in this
letter to shareholders include, but are not limited to, statements
regarding our expectations regarding, and our ability to respond
to, market and customer demand, our customers’ releases of products
using our batteries, our financial and business performance,
projected improvements in our manufacturing, commercialization and
R&D activities, our expectations regarding FAT and SAT , our
ability to meet goals for yield and throughput, the set up and
creation of the manufacturing facility in Malaysia, the anticipated
contributions of and benefits from personnel, our revenue funnel,
our efforts in the portable electronics market, particularly IoT,
Mobile, and Computing categories, our ability to meet milestones
and deliver on our objectives and expectations, the implementation
and success of our business model and growth strategy, including
targeting various addressable markets and the expansion of our
customer base, our ability to manage our expenses, our ability to
integrate Routejade effectively, and our forecasts of our financial
and performance guidance and metrics. Actual results could differ
materially from these forward-looking statements as a result of
certain risks and uncertainties, including, without limitation, our
ability to improve energy density among our products, our ability
to establish sufficient manufacturing and optimize manufacturing
processes to meet demand, sourcing or establishing supply
relationships, adequate funds to acquire our next manufacturing
facility, set up and creation of manufacturing facility in
Malaysia, ability to obtain financing in Malaysia, market
acceptance of our products, changes in consumer preferences or
demands, changes in industry standards, the impact of technological
development and competition, and global economic conditions,
including inflationary and supply chain pressures, and political,
social, and economic instability, including as a result of armed
conflict, war or threat of war, terrorist activity or other
security concerns or trade and other international disputes that
could disrupt supply or delivery of, or demand for, our products.
For additional information on these risks and uncertainties and
other potential factors that could affect our business and
financial results or cause actual results to differ from the
results predicted, please refer to our filings with the Securities
and Exchange Commission (the “SEC”), including in the “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” sections of our most recently
filed annual report on Form 10-K and quarterly report on Form 10-Q
and other documents that we have filed, or that we will file, with
the SEC. Any forward-looking statements made by us in this letter
to shareholders speak only as of the date on which they are made
and subsequent events may cause these expectations to change. We
disclaim any obligations to update or alter these forward-looking
statements in the future, whether as a result of new information,
future events or otherwise, except as required by law.
For investor and media inquiries, please
contact:
Enovix CorporationCharles AndersonPhone: +1 (612) 229-9729Email:
canderson@enovix.com
For media inquiries, please
contact:
Enovix CorporationKristin AtkinsPhone: +1 (650)
815-6934Email: katkins@enovix.com
|
Enovix CorporationCondensed Consolidated
Balance Sheets(Unaudited)(In Thousands, Except Share and
per Share Amounts) |
|
|
|
|
|
December 31,2023 |
|
January 1,2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
233,121 |
|
|
$ |
322,851 |
|
Short-term investments |
|
73,694 |
|
|
|
— |
|
Accounts receivable, net |
|
909 |
|
|
|
170 |
|
Notes receivable, net |
|
1,514 |
|
|
|
— |
|
Inventory |
|
8,737 |
|
|
|
634 |
|
Prepaid expenses and other current assets |
|
5,202 |
|
|
|
5,993 |
|
Total current assets |
|
323,177 |
|
|
|
329,648 |
|
Property and equipment,
net |
|
166,471 |
|
|
|
103,868 |
|
Customer relationship
intangibles and other intangibles, net |
|
42,168 |
|
|
|
— |
|
Operating lease, right-of-use
assets |
|
15,290 |
|
|
|
6,133 |
|
Goodwill |
|
12,098 |
|
|
|
— |
|
Other assets, non-current |
|
5,100 |
|
|
|
937 |
|
Total assets |
$ |
564,304 |
|
|
$ |
440,586 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
21,251 |
|
|
$ |
7,077 |
|
Accrued expenses |
|
13,976 |
|
|
|
7,089 |
|
Accrued compensation |
|
10,731 |
|
|
|
8,097 |
|
Short-term debt |
|
5,917 |
|
|
|
— |
|
Deferred revenue |
|
6,708 |
|
|
|
50 |
|
Other liabilities |
|
2,435 |
|
|
|
716 |
|
Total current liabilities |
|
61,018 |
|
|
|
23,029 |
|
Long-term debt, net |
|
169,099 |
|
|
|
— |
|
Warrant liability |
|
42,900 |
|
|
|
49,080 |
|
Operating lease liabilities,
non-current |
|
15,594 |
|
|
|
8,234 |
|
Deferred revenue,
non-current |
|
3,774 |
|
|
|
3,724 |
|
Deferred tax liability |
|
10,803 |
|
|
|
— |
|
Other liabilities,
non-current |
|
13 |
|
|
|
92 |
|
Total liabilities |
|
303,201 |
|
|
|
84,159 |
|
Commitments and
Contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock, $0.0001 par value; authorized shares of
1,000,000,000; issued and outstanding shares of 167,392,315 and
157,461,802 as of December 31, 2023 and January 1, 2023,
respectively |
|
17 |
|
|
|
15 |
|
Preferred stock, $0.0001 par value; authorized shares of
10,000,000; no shares issued or outstanding as of December 31, 2023
and January 1, 2023, respectively |
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
857,037 |
|
|
|
741,186 |
|
Accumulated other comprehensive loss |
|
(62 |
) |
|
|
— |
|
Accumulated deficit |
|
(598,845 |
) |
|
|
(384,774 |
) |
Total Enovix's stockholders’ equity |
|
258,147 |
|
|
|
356,427 |
|
Non-controlling interest |
|
2,956 |
|
|
|
— |
|
Total equity |
|
261,103 |
|
|
|
356,427 |
|
Total liabilities and equity |
$ |
564,304 |
|
|
$ |
440,586 |
|
|
|
|
|
|
|
|
|
|
Enovix CorporationCondensed Consolidated
Statements of Operations(Unaudited)(In Thousands, Except
Share and per Share Amounts) |
|
|
|
|
|
Quarters Ended |
|
Fiscal Years |
|
December 31,2023 |
|
January 1,2023 |
|
2023 |
|
2022 |
Revenue |
$ |
7,381 |
|
|
$ |
1,093 |
|
|
$ |
7,644 |
|
|
$ |
6,202 |
|
Cost of revenue |
|
19,769 |
|
|
|
10,356 |
|
|
|
63,061 |
|
|
|
23,239 |
|
Gross margin |
|
(12,388 |
) |
|
|
(9,263 |
) |
|
|
(55,417 |
) |
|
|
(17,037 |
) |
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
|
34,582 |
|
|
|
15,545 |
|
|
|
88,392 |
|
|
|
58,051 |
|
Selling, general and administrative |
|
17,807 |
|
|
|
15,425 |
|
|
|
79,014 |
|
|
|
51,970 |
|
Impairment of equipment |
|
— |
|
|
|
4,921 |
|
|
|
4,411 |
|
|
|
4,921 |
|
Restructuring cost |
|
— |
|
|
|
— |
|
|
|
3,021 |
|
|
|
— |
|
Total operating expenses |
|
52,389 |
|
|
|
35,891 |
|
|
|
174,838 |
|
|
|
114,942 |
|
Loss from operations |
|
(64,777 |
) |
|
|
(45,154 |
) |
|
|
(230,255 |
) |
|
|
(131,979 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Change in fair value of common stock warrants |
|
2,040 |
|
|
|
31,140 |
|
|
|
6,180 |
|
|
|
75,180 |
|
Interest income |
|
4,128 |
|
|
|
2,832 |
|
|
|
14,070 |
|
|
|
5,231 |
|
Interest expense |
|
(1,629 |
) |
|
|
— |
|
|
|
(4,456 |
) |
|
|
— |
|
Other income (expense), net |
|
(433 |
) |
|
|
1 |
|
|
|
(304 |
) |
|
|
(54 |
) |
Total other income, net |
|
4,106 |
|
|
|
33,973 |
|
|
|
15,490 |
|
|
|
80,357 |
|
Loss before income tax
benefit |
|
(60,671 |
) |
|
|
(11,181 |
) |
|
|
(214,765 |
) |
|
|
(51,622 |
) |
Income tax benefit |
|
(633 |
) |
|
|
— |
|
|
|
(633 |
) |
|
|
— |
|
Net loss |
|
(60,038 |
) |
|
|
(11,181 |
) |
|
|
(214,132 |
) |
|
|
(51,622 |
) |
Net loss attributable to
non-controlling interests |
|
(61 |
) |
|
|
— |
|
|
|
(61 |
) |
|
|
— |
|
Net loss attributable to
Enovix |
$ |
(59,977 |
) |
|
$ |
(11,181 |
) |
|
$ |
(214,071 |
) |
|
$ |
(51,622 |
) |
|
|
|
|
|
|
|
|
Net loss per share
attributable to Enovix shareholders, basic |
$ |
(0.36 |
) |
|
$ |
(0.07 |
) |
|
$ |
(1.35 |
) |
|
$ |
(0.34 |
) |
Weighted average number of
common shares outstanding, basic |
|
165,708,522 |
|
|
|
154,190,752 |
|
|
|
159,065,697 |
|
|
|
152,918,287 |
|
Net loss per share
attributable to Enovix shareholders, diluted |
$ |
(0.36 |
) |
|
$ |
(0.27 |
) |
|
$ |
(1.38 |
) |
|
$ |
(0.82 |
) |
Weighted average number of
common shares outstanding, diluted |
|
165,708,522 |
|
|
|
155,283,324 |
|
|
|
159,575,555 |
|
|
|
154,149,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enovix CorporationCondensed Consolidated
Statements of Cash Flows(Unaudited)(In Thousands) |
|
|
|
Fiscal Years |
|
2023 |
|
2022 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(214,132 |
) |
|
$ |
(51,622 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities |
|
|
|
Depreciation, accretion and amortization |
|
34,009 |
|
|
|
7,972 |
|
Stock-based compensation |
|
69,452 |
|
|
|
30,367 |
|
Changes in fair value of common stock warrants |
|
(6,180 |
) |
|
|
(75,180 |
) |
Impairment of equipment |
|
4,411 |
|
|
|
4,921 |
|
Others |
|
703 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts and notes receivables |
|
(370 |
) |
|
|
(170 |
) |
Inventory |
|
4,509 |
|
|
|
(634 |
) |
Prepaid expenses and other assets |
|
(626 |
) |
|
|
926 |
|
Accounts payable |
|
6,096 |
|
|
|
2,272 |
|
Accrued expenses and compensation |
|
1,977 |
|
|
|
2,547 |
|
Deferred revenue |
|
(3,860 |
) |
|
|
(4,091 |
) |
Deferred tax liability |
|
(813 |
) |
|
|
— |
|
Other liabilities |
|
188 |
|
|
|
(48 |
) |
Net cash used in operating
activities |
|
(104,636 |
) |
|
|
(82,740 |
) |
Cash flows from
investing activities: |
|
|
|
Purchase of property and
equipment |
|
(61,795 |
) |
|
|
(36,212 |
) |
Routejade acquisition, net of
cash and restricted cash acquired |
|
(9,968 |
) |
|
|
— |
|
Purchases of investments |
|
(138,343 |
) |
|
|
— |
|
Maturities of investments |
|
67,150 |
|
|
|
— |
|
Net cash used in investing
activities |
|
(142,956 |
) |
|
|
(36,212 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds from exercise of
common stock warrants, net |
|
— |
|
|
|
52,828 |
|
Proceeds from issuance of
Convertible Senior Notes |
|
172,500 |
|
|
|
— |
|
Repayment of debt |
|
(69 |
) |
|
|
— |
|
Payments of debt issuance
costs |
|
(5,917 |
) |
|
|
— |
|
Purchase of Capped Calls |
|
(17,250 |
) |
|
|
— |
|
Payroll tax payments for
shares withheld upon vesting of RSUs |
|
(3,931 |
) |
|
|
(587 |
) |
Proceeds from the exercise of
stock options |
|
11,928 |
|
|
|
2,379 |
|
Proceeds from issuance of
common stock under employee stock purchase plan |
|
2,350 |
|
|
|
1,900 |
|
Repurchase of unvested
restricted common stock |
|
(26 |
) |
|
|
(10 |
) |
Net cash provided by financing
activities |
|
159,585 |
|
|
|
56,510 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
154 |
|
|
|
— |
|
Change in cash, cash
equivalents, and restricted cash |
|
(87,853 |
) |
|
|
(62,442 |
) |
Cash and cash equivalents and
restricted cash, beginning of period |
|
322,976 |
|
|
|
385,418 |
|
Cash and cash equivalents, and
restricted cash, end of period |
$ |
235,123 |
|
|
$ |
322,976 |
|
|
|
|
|
Net Loss Attributable to Enovix to Adjusted
EBITDA
While we prepare our consolidated financial
statements in accordance with GAAP, we also utilize and present
certain financial measures that are not based on GAAP. We refer to
these financial measures as “Non-GAAP” financial measures. In
addition to our financial results determined in accordance with
GAAP, we believe that EBITDA and Adjusted EBITDA are useful
measures in evaluating its financial and operational performance
distinct and apart from financing costs, certain non-cash expenses
and non-operational expenses.
These Non-GAAP financial measures should be
considered in addition to results prepared in accordance with GAAP
but should not be considered a substitute for or superior to GAAP.
We endeavor to compensate for the limitation of the Non-GAAP
financial measures presented by also providing the most directly
comparable GAAP measures.
We use Non-GAAP financial information to
evaluate our ongoing operations and for internal planning,
budgeting and forecasting purposes. We believe that Non-GAAP
financial information, when taken collectively, may be helpful to
investors in assessing its operating performance and comparing its
performance with competitors and other comparable companies. You
should review the reconciliations below but not rely on any single
financial measure to evaluate our business.
“EBITDA” is defined as earnings (net loss)
attributable to Enovix adjusted for interest expense, income tax
benefit, depreciation and amortization expense. “Adjusted EBITDA”
includes additional adjustments to EBITDA such as stock-based
compensation expense, change in fair value of common stock
warrants, inventory step-up, impairment of equipment and other
special items as determined by management which it does not believe
to be indicative of its underlying business trends.
Below is a reconciliation of net loss
attributable to Enovix on a GAAP basis to the Non-GAAP EBITDA and
Adjusted EBITDA financial measures for the periods presented below
(in thousands):
|
Quarters Ended |
|
Fiscal Years |
|
December 31,2023 |
|
January 1,2023 |
|
2023 |
|
2022 |
Net loss attributable to Enovix |
$ |
(59,977 |
) |
|
$ |
(11,181 |
) |
|
$ |
(214,071 |
) |
|
$ |
(51,622 |
) |
Interest expense |
|
1,629 |
|
|
|
— |
|
|
|
4,456 |
|
|
|
— |
|
Income tax benefit |
|
(633 |
) |
|
|
— |
|
|
|
(633 |
) |
|
|
— |
|
Depreciation and amortization |
|
24,009 |
|
|
|
3,177 |
|
|
|
34,009 |
|
|
|
7,972 |
|
EBITDA |
|
(34,972 |
) |
|
|
(8,004 |
) |
|
|
(176,239 |
) |
|
|
(43,650 |
) |
Stock-based compensation expense(1) |
|
11,620 |
|
|
|
8,250 |
|
|
|
69,093 |
|
|
|
30,367 |
|
Change in fair value of common stock warrants |
|
(2,040 |
) |
|
|
(31,140 |
) |
|
|
(6,180 |
) |
|
|
(75,180 |
) |
Inventory step-up |
|
2,206 |
|
|
|
— |
|
|
|
2,206 |
|
|
|
— |
|
Impairment of equipment |
|
— |
|
|
|
4,921 |
|
|
|
4,411 |
|
|
|
4,921 |
|
Restructuring cost(1) |
|
— |
|
|
|
— |
|
|
|
3,021 |
|
|
|
— |
|
Acquisition cost |
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(23,028 |
) |
|
$ |
(25,973 |
) |
|
$ |
(102,415 |
) |
|
$ |
(83,542 |
) |
____________________
(1) $0.4 million of stock-based compensation
expense is included in the restructuring cost line of the table
above for the fiscal year ended December 31, 2023.
Free Cash Flow
We define “Free Cash Flow” as (i) net cash from
operating activities less (ii) capital expenditures, net of
proceeds from disposals of property and equipment, all of which are
derived from our Consolidated Statements of Cash Flow. The
presentation of non-GAAP Free Cash Flow is not intended as an
alternative measure of cash flows from operations, as determined in
accordance with GAAP. We believe that this financial measure is
useful to investors because it provides investors to view our
performance using the same tool that we use to gauge our progress
in achieving our goals and it is an indication of cash flow that
may be available to fund investments in future growth initiatives.
Below is a reconciliation of net cash used in operating activities
to the Free Cash Flow financial measures for the periods presented
below (in thousands):
|
Fiscal Years |
|
2023 |
|
2022 |
Net cash used in operating activities |
$ |
(104,636 |
) |
|
$ |
(82,740 |
) |
Capital expenditures |
|
(61,795 |
) |
|
|
(36,212 |
) |
Free Cash Flow |
$ |
(166,431 |
) |
|
$ |
(118,952 |
) |
|
|
|
|
|
|
|
|
Other Non-GAAP Financial Measures
Reconciliation (In Thousands, Except Share and per Share
Amounts)
|
|
Quarters Ended |
|
Fiscal Years |
|
|
December 31,2023 |
|
January 1,2023 |
|
2023 |
|
2022 |
Revenue |
|
$ |
7,381 |
|
|
$ |
1,093 |
|
|
$ |
7,644 |
|
|
$ |
6,202 |
|
|
|
|
|
|
|
|
|
|
GAAP cost of
revenue |
|
$ |
19,769 |
|
|
$ |
10,356 |
|
|
$ |
63,061 |
|
|
$ |
23,239 |
|
Stock-based compensation
expense |
|
|
(459 |
) |
|
|
(754 |
) |
|
|
(5,460 |
) |
|
|
(2,071 |
) |
Inventory step-up |
|
|
(2,206 |
) |
|
|
— |
|
|
|
(2,206 |
) |
|
|
— |
|
Non-GAAP cost of
revenue |
|
$ |
17,104 |
|
|
$ |
9,602 |
|
|
$ |
55,395 |
|
|
$ |
21,168 |
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin |
|
$ |
(12,388 |
) |
|
$ |
(9,263 |
) |
|
$ |
(55,417 |
) |
|
$ |
(17,037 |
) |
Stock-based compensation
expense |
|
|
459 |
|
|
|
754 |
|
|
|
5,460 |
|
|
|
2,071 |
|
Inventory step-up |
|
|
2,206 |
|
|
|
— |
|
|
|
2,206 |
|
|
|
— |
|
Non-GAAP gross
margin |
|
$ |
(9,723 |
) |
|
$ |
(8,509 |
) |
|
$ |
(47,751 |
) |
|
$ |
(14,966 |
) |
|
|
|
|
|
|
|
|
|
GAAP research and
development (R&D) expense |
|
$ |
34,582 |
|
|
$ |
15,545 |
|
|
$ |
88,392 |
|
|
$ |
58,051 |
|
Stock-based compensation
expense |
|
|
(5,337 |
) |
|
|
(3,015 |
) |
|
|
(27,409 |
) |
|
|
(12,720 |
) |
Amortization of intangible
assets |
|
|
(277 |
) |
|
|
— |
|
|
|
(277 |
) |
|
|
— |
|
Non-GAAP R&D
expense |
|
$ |
28,968 |
|
|
$ |
12,530 |
|
|
$ |
60,706 |
|
|
$ |
45,331 |
|
|
|
|
|
|
|
|
|
|
GAAP selling, general
and administrative (SG&A) expense |
|
$ |
17,807 |
|
|
$ |
15,425 |
|
|
$ |
79,014 |
|
|
$ |
51,970 |
|
Stock-based compensation
expense |
|
|
(5,824 |
) |
|
|
(4,481 |
) |
|
|
(36,224 |
) |
|
|
(15,576 |
) |
Amortization of intangible
assets |
|
|
(536 |
) |
|
|
— |
|
|
|
(536 |
) |
|
|
— |
|
Acquisition cost |
|
|
(158 |
) |
|
|
— |
|
|
|
(1,273 |
) |
|
|
— |
|
Non-GAAP SG&A
expense |
|
$ |
11,289 |
|
|
$ |
10,944 |
|
|
$ |
40,981 |
|
|
$ |
36,394 |
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses |
|
$ |
52,389 |
|
|
$ |
35,891 |
|
|
$ |
174,838 |
|
|
$ |
114,942 |
|
Stock-based compensation
expense included in R&D expense |
|
|
(5,337 |
) |
|
|
(3,015 |
) |
|
|
(27,409 |
) |
|
|
(12,720 |
) |
Stock-based compensation
expense included in SG&A expense |
|
|
(5,824 |
) |
|
|
(4,481 |
) |
|
|
(36,224 |
) |
|
|
(15,576 |
) |
Amortization of intangible
assets |
|
|
(813 |
) |
|
|
— |
|
|
|
(813 |
) |
|
|
— |
|
Impairment of equipment |
|
|
— |
|
|
|
(4,921 |
) |
|
|
(4,411 |
) |
|
|
(4,921 |
) |
Restructuring cost(1) |
|
|
— |
|
|
|
— |
|
|
|
(3,021 |
) |
|
|
— |
|
Acquisition cost |
|
|
(158 |
) |
|
|
— |
|
|
|
(1,273 |
) |
|
|
— |
|
Non-GAAP operating
expenses |
|
$ |
40,257 |
|
|
$ |
23,474 |
|
|
$ |
101,687 |
|
|
$ |
81,725 |
|
|
|
|
|
|
|
|
|
|
____________________
(1) $0.4 million of stock-based compensation
expense is included in the restructuring cost line of the table
above for the fiscal year ended December 31, 2023.
|
|
|
|
|
|
|
Quarters Ended |
|
Fiscal Years |
|
|
December 31,2023 |
|
January 1,2023 |
|
2023 |
|
2022 |
GAAP loss from operations |
|
$ |
(64,777 |
) |
|
$ |
(45,154 |
) |
|
$ |
(230,255 |
) |
|
$ |
(131,979 |
) |
Stock-based compensation
expense(1) |
|
|
11,620 |
|
|
|
8,250 |
|
|
|
69,093 |
|
|
|
30,367 |
|
Amortization of intangible
assets |
|
|
813 |
|
|
|
— |
|
|
|
813 |
|
|
|
— |
|
Inventory step-up |
|
|
2,206 |
|
|
|
— |
|
|
|
2,206 |
|
|
|
— |
|
Impairment of equipment |
|
|
— |
|
|
|
4,921 |
|
|
|
4,411 |
|
|
|
4,921 |
|
Restructuring cost(1) |
|
|
— |
|
|
|
— |
|
|
|
3,021 |
|
|
|
— |
|
Acquisition cost |
|
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
|
|
— |
|
Non-GAAP loss from
operations |
|
$ |
(49,980 |
) |
|
$ |
(31,983 |
) |
|
$ |
(149,438 |
) |
|
$ |
(96,691 |
) |
|
|
|
|
|
|
|
|
|
GAAP net loss
attributable to Enovix |
|
$ |
(59,977 |
) |
|
$ |
(11,181 |
) |
|
$ |
(214,071 |
) |
|
$ |
(51,622 |
) |
Stock-based compensation
expense(1) |
|
|
11,620 |
|
|
|
8,250 |
|
|
|
69,093 |
|
|
|
30,367 |
|
Change in fair value of common
stock warrants |
|
|
(2,040 |
) |
|
|
(31,140 |
) |
|
|
(6,180 |
) |
|
|
(75,180 |
) |
Inventory step-up |
|
|
2,206 |
|
|
|
— |
|
|
|
2,206 |
|
|
|
— |
|
Amortization of intangible
assets |
|
|
813 |
|
|
|
— |
|
|
|
813 |
|
|
|
— |
|
Impairment of equipment |
|
|
— |
|
|
|
4,921 |
|
|
|
4,411 |
|
|
|
4,921 |
|
Restructuring cost(1) |
|
|
— |
|
|
|
— |
|
|
|
3,021 |
|
|
|
— |
|
Acquisition cost |
|
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
|
|
— |
|
Non-GAAP net loss
attributable to Enovix shareholders |
|
$ |
(47,220 |
) |
|
$ |
(29,150 |
) |
|
$ |
(139,434 |
) |
|
$ |
(91,514 |
) |
|
|
|
|
|
|
|
|
|
GAAP net loss per
share attributable to Enovix, basic |
|
$ |
(0.36 |
) |
|
$ |
(0.07 |
) |
|
$ |
(1.35 |
) |
|
$ |
(0.34 |
) |
GAAP weighted average number
of common shares outstanding, basic |
|
|
165,708,522 |
|
|
|
154,190,752 |
|
|
|
159,065,697 |
|
|
|
152,918,287 |
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
share attributable to Enovix, diluted |
|
$ |
(0.36 |
) |
|
$ |
(0.27 |
) |
|
$ |
(1.38 |
) |
|
$ |
(0.82 |
) |
GAAP weighted average number
of common shares outstanding, diluted |
|
|
165,708,522 |
|
|
|
155,283,324 |
|
|
|
159,575,555 |
|
|
|
154,149,367 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share attributable to Enovix, basic |
|
$ |
(0.28 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.88 |
) |
|
$ |
(0.60 |
) |
GAAP weighted average number
of common shares outstanding, basic |
|
|
165,708,522 |
|
|
|
154,190,752 |
|
|
|
159,065,697 |
|
|
|
152,918,287 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share attributable to Enovix, diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.87 |
) |
|
$ |
(0.59 |
) |
GAAP weighted average number
of common shares outstanding, diluted |
|
|
165,708,522 |
|
|
|
155,283,324 |
|
|
|
159,575,555 |
|
|
|
154,149,367 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
____________________
(1) $0.4 million of stock-based compensation
expense is included in the restructuring cost line of the table
above for the fiscal year ended December 31, 2023.
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