Enovix Corporation (“Enovix”) (Nasdaq: ENVX), a global
high-performance battery company, announced today financial results
for the fourth quarter and full year 2024, which included the
summary below from its President and CEO, Dr. Raj Talluri.
Fellow Shareholders,
In the fourth quarter of 2024, we achieved key
milestones in manufacturing, technology, and sales, setting the
stage for a breakout year in 2025. We are focused on launching our
first smartphone battery and converting our IoT pipeline into
contracted backlog. Customers across multiple industries are
acknowledging the readiness of our manufacturing capabilities,
which are coming online at the perfect time to meet strong demand
for our high energy-density solutions and diversified supply
chain.
Other recent highlights include:
- Record Revenue:
Fourth quarter revenues were a record $9.7 million, near the high
end of our guidance. Full year 2024 revenues were also a record of
$23.1 million, up 202%, from $7.6 million in 2023.
- Smartphone
Batteries: We shipped early engineering samples to our
lead smartphone OEM, with results confirming that critical safety
tests are passing. Additionally, cell dimensions were received in
continuation of our agreement. We remain on track for commercial
smartphone battery launches in 2025, pending successful completion
of customer qualification. Furthermore, a new OEM customer
submitted first samples purchase order, expanding our active
engagements to 7 of the top 8 smartphone OEMs.
- XR Batteries:
Secured a landmark prepaid purchase order from a global technology
leader in Artificial Intelligence (AI) and immersive technologies,
reserving dedicated production capacity for next-generation smart
eyewear. First samples, featuring our custom cells from Fab2
integrated into packs in our Korea facility, were delivered to the
customer earlier this month.
- Manufacturing
Readiness: Fab2 in Malaysia completed Site Acceptance
Testing (SAT) for the High-Volume Manufacturing (HVM) line, a key
milestone in our journey to scale production. Additionally, we were
honored to host several customers at our factory in Malaysia,
conducting detailed line tours. And multiple OEMs initiated formal
factory audits to support their qualification processes.
- Products: We
successfully completed safety testing of EX-1M and performance
results indicate that we are on track to meet targets for energy
density, cycle life, and fast charging. And the first EX-2M samples
from Fab2 were shipped to customers on schedule.
- Capitalization:
2024 year-end cash and cash equivalents of $272.9 million and
continued operating expense discipline provides optionality for
funding additional HVM lines.
2025 is off to a fast start, fueled by
accelerating AI innovation and a shifting landscape that is driving
OEMs to diversify their supply chains. As a leader in
high-energy-density battery technology with manufacturing
facilities in Korea and Malaysia, Enovix is well positioned to
capitalize on these industry trends.
A key strategic decision in 2024 was to invest
in the emerging AI-enabled smart eyewear market by
developing a battery cell tailored for this market. We believe this
investment is now paying off, as our product is expected to launch
as this market is gaining momentum. New estimates from IDC project
the smart eyewear market will reach multiple tens of millions of
units by 2028, driven by recent hardware and software ecosystem
advancements, the growing adoption of AI applications, and the
expanding use cases across consumer, enterprise and defense
markets. A majority of America’s largest tech companies, along with
several top-tier Asia-based OEMs, have announced smart eyewear
products. However, one major bottleneck remains – no product today
delivers resiliency to all-day usage with ever-increasing sensor,
communications (WiFi, Bluetooth, cellular, and satellite), and
computing demands. This presents a prime opportunity for Enovix.
With our high-energy-density battery already developed, HVM ramping
up, and many of the market’s key players based in our backyard of
Silicon Valley, we believe we are well-positioned to lead in this
space.
In smartphones, the strong tailwinds we
identified last quarter continue in 2025. OEMs are increasingly
requesting batteries with capacities near 7,000 milliamp-hours to
support the growing power demands of next-generation AI
applications. Additionally, with smartphone penetration already at
saturation levels, market leaders are intensifying their focus on
product differentiation – particularly in regions outside the US,
where competition is fierce. We believe that our EX-2M and upcoming
EX-3M battery solutions align with evolving demands, reinforcing
our role as a strategic partner to leading OEMs.
A new industry trend that has emerged subsequent
to our last shareholder letter is supply chain-driven demand,
particularly in the defense sector. Soon after the US elections in
November, we observed an increase in inbound interest from drone
manufacturers and defense suppliers seeking battery solutions that
comply with allied country supply chain requirements. As a
reminder, a significant portion of our 2024 revenue came from sales
of conventional graphite battery products to defense customers.
Earlier this month, we secured a purchase order for samples from a
new defense customer with over $1 billion in annual sales to the US
military, focused on autonomous AI systems. While these
developments are still evolving, we are optimistic about the
potential upside.
Business Update
Manufacturing. We successfully
completed our key fourth-quarter objectives on schedule, including
SAT for the HVM line and shipping the first EX-2M samples. We also
further improved yields across both the Agility and HVM lines, with
incremental targets in place throughout the year that we believe
will ensure readiness for smartphone mass production in the fourth
quarter of 2025. Customer audits are now underway at our Malaysia
facility. While preparing Fab2 for mass production remains our
primary manufacturing focus in 2025, we are also prioritizing
efforts to accelerate custom cell development timelines. Our
initial success in the emerging smart eyewear market was made
possible because we dedicated resources to making a new variant of
EX-1M designed to fit within the confines of the glasses frames. As
we scale, our ability to swiftly develop tailored solutions with
precision manufacturing and latest chemistries will play a critical
role in our success. Additionally, we continue to act in a
disciplined manner to select the right customer opportunities
to pursue for long-term growth.
Commercialization. Our business
team remains focused on smartphone mass production as the primary
commercialization goal for 2025. In October of 2024, we took a
major step toward this objective by executing a strategic
partnership that outlined key milestones leading up to our entry
into the smartphone market by late 2025. This agreement was
followed by a purchase order in the fourth quarter of 2024 tied to
one of those milestones, and in the first quarter of 2025 we
received battery dimensions for a planned 2025 smartphone launch.
Additionally, we secured a first purchase order for samples from a
new global smartphone manufacturer, expanding our customer
engagements to 7 of the top 8 smartphone OEMs.
In addition to being focused on smartphone
business, we are also being highly selective with IoT
opportunities, prioritizing segments where our technology and
global supply chain have a strong competitive advantage. Among
these, smart eyewear emerged as a natural fit, and we are now in
the process of developing custom cells for marquee customers. This
quarter, we shipped our first samples to customers using our
Korea-based packing capability that is now fully integrated with
our silicon cell production out of Malaysia. Our first commercial
shipments are scheduled to commence mid-year, and we are actively
securing additional IoT purchase orders.
In the EV space, we continue advancing
development agreements with two of the world’s largest automotive
OEMs. Consistent with our capital-efficient strategy, we remain
focused on targeted collaborations that allow us to scale in this
vertical while optimizing investment.
Across these markets, our disciplined approach
to commercialization ensures that we are not only securing
near-term revenue opportunities but also building a foundation for
long-term leadership in high-energy-density battery solutions.
Products:
Our battery technology continues to advance
across multiple generations, with significant progress in safety
and performance validation, customer sampling, and next-generation
design. We successfully completed safety testing of EX-1M and
performance results indicate that we are on track to meet targets
for energy density, cycle life, and fast charging. For EX-2M, we
delivered early engineering samples to OEMs across both smartphone
and IoT markets and received positive feedback. Additionally, EX-2M
has outperformed traditional graphite-based cells in select safety
tests such as crush and impact tests. We are now refining our
electrochemistry to further enhance performance metrics. Looking
ahead, we have officially kicked off the design phase for EX-3M. As
we continue refining key performance specifications, we are
incorporating feedback from lead OEMs to ensure alignment with
their evolving requirements. Our goal is to finalize the EX-3M
design in early 2025, paving the way for our next-generation
battery technology.
These advancements reflect our commitment to
delivering high-performance, high-energy-density battery solutions
across multiple product categories, reinforcing our position as a
leader in battery innovation.
Financials: Revenue was $9.7
million in the fourth quarter of 2024, near the high end of our
guidance range and up more than 30 percent year over year. A
majority of revenues were from our conventional battery capacity in
South Korea which is seeing a positive demand environment from
defense customers and benefiting from increased collaboration with
our US engineers. Our GAAP cost of revenue was $8.7 million in the
fourth quarter of 2024 leading to the Company’s first ever positive
gross margin which totaled $1.1 million or 11% of sales.
Our GAAP operating expenses were $35.6 million
in the fourth quarter of 2024 compared to $48.6 million in the
third quarter, which reflects some of the expense reductions
related to our shift of various functions to lower cost regions
such as Malaysia and India. Our non-GAAP operating expenses were
$24.3 million in the fourth quarter of 2024, down from $27.2
million in the previous quarter.
Our GAAP net loss attributable to Enovix was
$37.5 million in the fourth quarter of 2024, compared to $22.5
million in the previous quarter. As a reminder our GAAP net loss is
impacted quarterly by changes in fair value of common stock
warrants, which resulted in a $5.1 million expense in the fourth
quarter compared to a $29.9 million benefit in the third quarter of
2024.
Adjusted EBITDA in the fourth quarter of 2024
was a loss of $11.7 million compared to an adjusted EBITDA loss of
$21.6 million in the previous quarter. The sequential improvement
was driven by positive gross margin, lower operating expenses and a
$1.0 million increase in depreciation and amortization.
Earnings per share loss in the fourth quarter of
2024 was $0.20 on a GAAP basis and $0.11 on a non-GAAP basis
compared to third quarter earnings per share loss of $0.30 on a
GAAP basis and $0.17 on a non-GAAP basis.
We exited 2024 with $272.9 million of cash and
cash equivalents following the receipts of approximately $107
million of net proceeds from an equity offering in the fourth
quarter which was partially offset by $16.0 million used in
operating activities and capital expenditures of $16.4 million
during the quarter.
A full reconciliation of our GAAP to non-GAAP
results is available later in this report.
Outlook
For the first quarter of 2025, we expect revenue
between $3.5 million and $5.5 million, a GAAP EPS loss of $0.23 to
$0.29, an adjusted EBITDA loss of $21.0 million to $27.0 million,
and a non-GAAP EPS loss of $0.15 to $0.21.
Summary
The top milestones we identified at the
beginning of 2024 were achieving SAT for agility and our
high-volume manufacturing lines in Malaysia and delivering samples
of our leading smartphone batteries, EX-1M and EX-2M, to customers.
Not only did we hit these top milestones, we also advanced
relationships with market leaders in smartphones, AR/VR, and
automotive industries. We believe that these relationships,
supported by purchase orders and commercial launch schedules,
provide a clear path for us to commence mass production in
2025.
Conference Call Information
Enovix will hold a video conference call at 2:00
PM PT / 5:00 PM ET today, February 19, 2025, to discuss the
company’s business updates and financial results. To join the call,
participants must use the following link to register:
https://enovix-q4-2024.open-exchange.net/registration. This link
will also be available via the Investor Relations section of the
Enovix 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 Enovix
Enovix is on a mission to deliver
high-performance batteries that unlock the full potential of
technology products. Everything from IoT, mobile, and computing
devices, to the vehicle you drive, needs a better battery. Enovix
partners with OEMs worldwide to usher in a new era of user
experiences. Our innovative, materials-agnostic approach to
building a higher performing battery without compromising safety
keeps us flexible and on the cutting-edge of battery technology
innovation.
Enovix is headquartered in Silicon Valley with
facilities in India, Korea and Malaysia. For more information visit
https://enovix.com and follow us on LinkedIn.
Non-GAAP Financial Measures
Non-GAAP operating expenses, EBITDA, Adjusted
EBITDA, non-GAAP net loss per share, and other non-GAAP measures
are intended as supplemental financial measures of our performance
that provide an additional tool for investors to use in evaluating
ongoing operating results, trends, and in comparing our financial
measures with those of comparable companies.
However, you should be aware that other
companies may calculate similar non-GAAP measures differently.
Non-GAAP financial measures have limitations, including that they
exclude certain expenses that are required under GAAP, which
adjustments reflect the exercise of judgment by management.
Reconciliations of each non-GAAP financial measure to the most
directly comparable GAAP financial measure can be found in the
tables at the end of this shareholder letter.
While Enovix provides first quarter 2025
guidance for adjusted EBITDA loss and non-GAAP EPS loss, we are
unable to provide without unreasonable effort a GAAP to
non-GAAP reconciliation of these projected non-GAAP measures. Such
qualitative reconciliation to the corresponding GAAP financial
measure cannot be provided without unreasonable
effort because of the inherent difficulty in accurately
forecasting the occurrence and financial impact of the various
adjustments that have not yet occurred, are out of our control, or
cannot be reasonably predicted, including but not limited to
warrant liabilities and stock-based compensation. For the same
reasons, we are unable to assess the probable significance of the
unavailable information, which could have a material impact on our
future GAAP financial results.
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. Forward-looking
statements generally relate to future events or our future
financial or operating performance and can be identified by words
such as anticipate, believe, continue, could, estimate, expect,
intend, may, might, plan, possible, potential, predict, project,
setting the stage, should, would and similar expressions that
convey uncertainty about future events or outcomes. Forward-looking
statements in this letter to shareholders include, without
limitation, out expected performance and results for the first
quarter of 2025; that 2025 will be a breakout year; the timing for
completion of customer qualification for and the launch of our
first smartphone battery in 2025; our expectations regarding our
ability to commence mass production in 2025 and full utilization of
the first HVM line in 2026; our expectations regarding, and our
ability to respond to, market and customer demand; our expectations
regarding the level of customers’ interest in our high
energy-density solutions and diversified supply chain, the demand
for more energy dense batteries and the suitability of our products
to address this demand, and the impact of artificial intelligence
(“AI”) features on the foregoing; our ability to develop and
deliver a battery cell tailored to the smart eyewear market,
including our ability to deliver a battery that delivers a full day
of usage on a single charge, and the anticipated benefits of our
investments in these products and market; our anticipated
commercial shipments of batteries for smart eyewear and other IoT
products by mid-year 2025; our ability to convert our IoT pipeline
into contracted backlog; projected improvements in our
manufacturing and commercialization and R&D activities at Fab2,
including the ability of the sales team to support the path to
profitability by attracting demand across high-growth markets; our
achievement of the milestones under our strategic partnership with
a leading smartphone OEM; expectations relating to broader
agreements with automative OEMs; our ability to successfully
complete safety testing and customer qualification and our ability
to and the timing of our entry into the smartphone market in 2025
with high-volume production from our Fab2 facility; our ability to
meet our spec targets for energy density, cycle life and fast
charging for our EX-1M cells; our ability to develop and
commercialize customer and product-specific variants of our
products and other tailored solutions for our customers; our
expectations regarding EX-1M and EX-2M readiness and production,
and predicted EX-3M battery solution production; our ability to
meet goals for yield, throughput, energy density, cycle life and
fast charging; the readiness of our production and manufacturing
capabilities; our expectations with respect to the development and
innovation of EX-2M and EX-3M, including our ability to finalize
the EX-3M design in Q1 2025; our expectations regarding Fab2 in and
its capacity to support multiple customer qualifications; our
observations and expectations around supply chain-driven demand
including in the defense sector, and interest from specific
customer segments including drone manufacturers and military
suppliers; the anticipated contributions of our R&D teams to
support product innovation; our revenue funnel; our efforts in the
portable electronics and EV markets, including the IoT, smartphone,
smart eyewear and virtual reality categories; expectations
regarding the reservation and use of production capacity and our
ability to satisfy production expectations relating to
next-generation smart eyewear; our ability to meet milestones and
deliver on our objectives and expectations; our ability to fund
additional HVM lines; anticipated increases in demand and interest
in our products from manufacturers and suppliers seeking battery
solutions that comply with allied country supply chain
requirements; the implementation and expected success of our
business model and growth strategy, including our focus on the
addressable market categories in which we believe an improved
battery drives a high value to the product and premium pricing for
our solutions; our ability to manage our expenses and realize our
annual cost savings goals; our ability to capitalize on industry
trends, including trends relating to accelerating AI innovation;
our ability to manage and achieve the benefits of our restructuring
efforts, including continued operating expense discipline to
facilitate funding for additional HVM lines at Fab2; and forecasts
of our financial and performance 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, cycle life, fast charging, capacity roll
off and gassing metrics among our products; our reliance on new and
complex manufacturing processes for our operations; our ability to
establish sufficient manufacturing operations and improve and
optimize manufacturing processes to meet demand, source materials
and establish supply relationships, and secure adequate funds to
execute on our operational and strategic goals; our reliance on a
manufacturing agreement with a Malaysia-based company for many of
the facilities, procurement, personnel and financing needs of our
operations; our operation in international markets, including our
exposure to operational, financial and regulatory risks, as well as
risks relating to geopolitical tensions and conflicts, including
changes in trade policies and regulations; that we may be required
to pay costs for components and raw materials that are more
expensive than anticipated, including as a result of trade
barriers, trade sanctions, export restrictions, tariffs, embargoes
or shortages and other general economic and political conditions,
which could delay the introduction of our products and negatively
impact our business; our ability to adequately control the costs
associated with our operations and the components necessary to
build our lithium-ion battery cells; our lengthy sales cycles; the
safety hazards associated with our batteries and the manufacturing
process; a concentration of customers in the military market and
our dependence on these customer accounts; certain unfavorable
terms in our commercial agreements that may limit our ability to
market our products; our ability to develop, market and sell our
batteries, expectations relating to the performance of our
batteries, and market acceptance of our products; our ability to
accurately estimate the future supply and demand of our batteries,
which could result in a variety of inefficiencies in our business;
changes in consumer preferences or demands; changes in industry
standards; the impact of technological development and competition;
and global economic conditions, including tariffs, inflationary and
supply chain pressures, and political, social, and economic
instability, including as a result of armed conflict, war or threat
of war, 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 cause actual
results to differ from the results predicted, please refer to our
filings with the Securities and Exchange Commission (“SEC”),
including in the “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” sections
of our annual report on Form 10-K and quarterly reports on Form
10-Q and other documents that we have filed, or will file, with the
SEC. Any forward-looking statements in this letter to shareholders
speak only as of the date on which they are made. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
For media and investor inquiries, please
contact:
Enovix CorporationRobert
LaheyEmail: ir@enovix.com
| |
|
Enovix CorporationCondensed Consolidated
Balance Sheets (Unaudited) (In Thousands, Except Share and
per Share Amounts) |
| |
| |
December 29, 2024 |
|
December 31, 2023 |
| Assets |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
272,869 |
|
|
$ |
233,121 |
|
|
Short-term investments |
|
— |
|
|
|
73,694 |
|
|
Accounts receivable, net |
|
4,566 |
|
|
|
909 |
|
|
Notes receivable, net |
|
4 |
|
|
|
1,514 |
|
|
Inventory |
|
7,664 |
|
|
|
8,737 |
|
|
Prepaid expenses and other current assets |
|
9,903 |
|
|
|
5,202 |
|
|
Total current assets |
|
295,006 |
|
|
|
323,177 |
|
| Property and equipment,
net |
|
167,947 |
|
|
|
166,471 |
|
| Customer relationship
intangibles and other intangibles, net |
|
36,394 |
|
|
|
42,168 |
|
| Operating lease, right-of-use
assets |
|
13,479 |
|
|
|
15,290 |
|
| Goodwill |
|
12,217 |
|
|
|
12,098 |
|
| Other assets, non-current |
|
2,126 |
|
|
|
5,100 |
|
|
Total assets |
$ |
527,169 |
|
|
$ |
564,304 |
|
| Liabilities and
Stockholders’ Equity |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
9,492 |
|
|
$ |
21,251 |
|
|
Accrued expenses |
|
19,843 |
|
|
|
13,976 |
|
|
Accrued compensation |
|
8,228 |
|
|
|
10,731 |
|
|
Short-term debt |
|
9,452 |
|
|
|
5,917 |
|
|
Deferred revenue |
|
3,650 |
|
|
|
6,708 |
|
|
Other liabilities |
|
3,036 |
|
|
|
2,435 |
|
|
Total current liabilities |
|
53,701 |
|
|
|
61,018 |
|
| Long-term debt, net |
|
169,820 |
|
|
|
169,099 |
|
| Warrant liability |
|
28,380 |
|
|
|
42,900 |
|
| Operating lease liabilities,
non-current |
|
13,293 |
|
|
|
15,594 |
|
| Deferred revenue,
non-current |
|
3,774 |
|
|
|
3,774 |
|
| Deferred tax liability |
|
8,784 |
|
|
|
10,803 |
|
| Other liabilities,
non-current |
|
14 |
|
|
|
13 |
|
|
Total liabilities |
|
277,766 |
|
|
|
303,201 |
|
| Commitments and
Contingencies |
|
|
|
| Stockholders’ equity: |
|
|
|
|
Common stock, $0.0001 par value; authorized shares of
1,000,000,000; issued and outstanding shares of 190,559,335 and
167,392,315 as of December 29, 2024 and December 31, 2023,
respectively |
|
19 |
|
|
|
17 |
|
|
Preferred stock, $0.0001 par value; authorized shares of
10,000,000; no shares issued or outstanding as of December 29, 2024
and December 31, 2023, respectively |
|
— |
|
|
|
— |
|
|
Additional paid-in-capital |
|
1,067,951 |
|
|
|
857,037 |
|
|
Accumulated other comprehensive loss |
|
(143 |
) |
|
|
(62 |
) |
|
Accumulated deficit |
|
(821,086 |
) |
|
|
(598,845 |
) |
|
Total Enovix's stockholders’ equity |
|
246,741 |
|
|
|
258,147 |
|
| Non-controlling interest |
|
2,662 |
|
|
|
2,956 |
|
|
Total equity |
|
249,403 |
|
|
|
261,103 |
|
|
Total liabilities and equity |
$ |
527,169 |
|
|
$ |
564,304 |
|
| |
|
Enovix CorporationCondensed Consolidated
Statements of Operations(Unaudited)(In Thousands, Except
Share and per Share Amounts) |
| |
| |
Quarters Ended |
|
Fiscal Years Ended |
| |
December 29,2024 |
|
December 31,2023 |
|
December 29,2024 |
|
December 31,2023 |
|
Revenue |
$ |
9,717 |
|
|
$ |
7,381 |
|
|
$ |
23,074 |
|
|
$ |
7,644 |
|
| Cost of revenue |
|
8,665 |
|
|
|
19,769 |
|
|
|
25,119 |
|
|
|
63,061 |
|
| Gross margin |
|
1,052 |
|
|
|
(12,388 |
) |
|
|
(2,045 |
) |
|
|
(55,417 |
) |
| Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
22,433 |
|
|
|
34,582 |
|
|
|
124,506 |
|
|
|
88,392 |
|
|
Selling, general and administrative |
|
13,135 |
|
|
|
17,807 |
|
|
|
74,311 |
|
|
|
79,014 |
|
|
Impairment of equipment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,411 |
|
|
Restructuring cost |
|
— |
|
|
|
— |
|
|
|
41,807 |
|
|
|
3,021 |
|
|
Total operating expenses |
|
35,568 |
|
|
|
52,389 |
|
|
|
240,624 |
|
|
|
174,838 |
|
| Loss from operations |
|
(34,516 |
) |
|
|
(64,777 |
) |
|
|
(242,669 |
) |
|
|
(230,255 |
) |
| Other income (expense): |
|
|
|
|
|
|
|
|
Change in fair value of common stock warrants |
|
(5,115 |
) |
|
|
2,040 |
|
|
|
12,244 |
|
|
|
6,180 |
|
|
Interest income |
|
2,587 |
|
|
|
4,128 |
|
|
|
12,332 |
|
|
|
14,070 |
|
|
Interest expense |
|
(1,719 |
) |
|
|
(1,629 |
) |
|
|
(6,787 |
) |
|
|
(4,456 |
) |
|
Other income (loss), net |
|
2,463 |
|
|
|
(433 |
) |
|
|
954 |
|
|
|
(304 |
) |
|
Total other income (loss), net |
|
(1,784 |
) |
|
|
4,106 |
|
|
|
18,743 |
|
|
|
15,490 |
|
| Loss before income tax expense
(benefit) |
|
(36,300 |
) |
|
|
(60,671 |
) |
|
|
(223,926 |
) |
|
|
(214,765 |
) |
| Income tax expense
(benefit) |
|
1,152 |
|
|
|
(633 |
) |
|
|
(1,392 |
) |
|
|
(633 |
) |
| Net loss |
|
(37,452 |
) |
|
|
(60,038 |
) |
|
|
(222,534 |
) |
|
|
(214,132 |
) |
| Net gain (loss) attributable
to non-controlling interests |
|
13 |
|
|
|
(61 |
) |
|
|
(293 |
) |
|
|
(61 |
) |
| Net loss attributable to
Enovix |
$ |
(37,465 |
) |
|
$ |
(59,977 |
) |
|
$ |
(222,241 |
) |
|
$ |
(214,071 |
) |
| |
|
|
|
|
|
|
|
| Net loss per share
attributable to Enovix shareholders, basic |
$ |
(0.20 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.35 |
) |
| Weighted average number of
common shares outstanding, basic |
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,065,697 |
|
| Net loss per share
attributable to Enovix shareholders, diluted |
$ |
(0.20 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.38 |
) |
| Weighted average number of
common shares outstanding, diluted |
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,575,555 |
|
|
|
|
Enovix CorporationCondensed Consolidated
Statements of Cash Flows (Unaudited) |
|
|
|
(In Thousands) |
Fiscal Years |
|
|
|
2024 |
|
|
|
2023 |
|
| Cash flows used in
operating activities: |
|
|
|
| Net loss |
$ |
(222,534 |
) |
|
$ |
(214,132 |
) |
| Adjustments to reconcile net
loss to net cash used in operating activities |
|
|
|
|
Depreciation, accretion and amortization |
|
44,961 |
|
|
|
34,009 |
|
|
Stock-based compensation |
|
58,837 |
|
|
|
69,452 |
|
|
Changes in fair value of common stock warrants |
|
(12,244 |
) |
|
|
(6,180 |
) |
|
Impairment and loss on disposals of long-lived assets |
|
38,258 |
|
|
|
4,411 |
|
|
Others |
|
448 |
|
|
|
703 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts and notes receivables |
|
(2,465 |
) |
|
|
(370 |
) |
|
Inventory |
|
1,073 |
|
|
|
4,509 |
|
|
Prepaid expenses and other assets |
|
(2,211 |
) |
|
|
(626 |
) |
|
Accounts payable |
|
(7,970 |
) |
|
|
6,096 |
|
|
Accrued expenses and compensation |
|
3,016 |
|
|
|
1,977 |
|
|
Deferred revenue |
|
(3,058 |
) |
|
|
(3,860 |
) |
|
Deferred tax liability |
|
(2,697 |
) |
|
|
(813 |
) |
|
Other liabilities |
|
(2,047 |
) |
|
|
188 |
|
| Net cash used in operating
activities |
|
(108,633 |
) |
|
|
(104,636 |
) |
| Cash flows from
investing activities: |
|
|
|
| Purchase of property and
equipment |
|
(76,188 |
) |
|
|
(61,795 |
) |
| Routejade acquisition, net of
cash and restricted cash acquired |
|
— |
|
|
|
(9,968 |
) |
| Purchases of investments |
|
(31,812 |
) |
|
|
(138,343 |
) |
| Maturities of investments |
|
106,621 |
|
|
|
67,150 |
|
| Net cash used in investing
activities |
|
(1,379 |
) |
|
|
(142,956 |
) |
| Cash flows from
financing activities: |
|
|
|
| Proceeds from issuance of
common stocks, net of issuance costs |
|
107,192 |
|
|
|
— |
|
| Proceeds from issuance of
Convertible Senior Notes and loans |
|
4,572 |
|
|
|
172,500 |
|
| Repayment of debt |
|
(209 |
) |
|
|
(69 |
) |
| Payments of debt issuance
costs |
|
— |
|
|
|
(5,917 |
) |
| Purchase of Capped Calls |
|
— |
|
|
|
(17,250 |
) |
| Payroll tax payments for
shares withheld upon vesting of RSUs |
|
(7,079 |
) |
|
|
(3,931 |
) |
| Proceeds from the exercise of
stock options and issuance of common stock under ATM, net of
issuance costs |
|
44,771 |
|
|
|
11,928 |
|
| Proceeds from issuance of
common stock under employee stock purchase plan |
|
1,506 |
|
|
|
2,350 |
|
| Repurchase of unvested
restricted common stock |
|
(4 |
) |
|
|
(26 |
) |
| Net cash provided by financing
activities |
|
150,749 |
|
|
|
159,585 |
|
| Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
(1,169 |
) |
|
|
154 |
|
| Change in cash, cash
equivalents, and restricted cash |
|
39,568 |
|
|
|
(87,853 |
) |
| Cash and cash equivalents and
restricted cash, beginning of period |
|
235,123 |
|
|
|
322,976 |
|
| Cash and cash equivalents, and
restricted cash, end of period |
$ |
274,691 |
|
|
$ |
235,123 |
|
| |
|
|
|
Net Loss Attributable to Enovix to Adjusted EBITDA
Reconciliation
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 Ended |
| |
December 29,2024 |
|
December 31,2023 |
|
December 29,2024 |
|
December 31,2023 |
|
Net loss attributable to Enovix |
$ |
(37,465 |
) |
|
$ |
(59,977 |
) |
|
$ |
(222,241 |
) |
|
$ |
(214,071 |
) |
|
Interest expense |
|
1,719 |
|
|
|
1,629 |
|
|
|
6,787 |
|
|
|
4,456 |
|
|
Income tax expense (benefit) |
|
1,152 |
|
|
|
(633 |
) |
|
|
(1,392 |
) |
|
|
(633 |
) |
|
Depreciation and amortization |
|
7,544 |
|
|
|
24,009 |
|
|
|
44,961 |
|
|
|
34,009 |
|
| EBITDA |
|
(27,050 |
) |
|
|
(34,972 |
) |
|
|
(171,885 |
) |
|
|
(176,239 |
) |
|
Stock-based compensation expense (1) |
|
10,207 |
|
|
|
11,620 |
|
|
|
57,621 |
|
|
|
69,093 |
|
|
Change in fair value of common stock warrants |
|
5,115 |
|
|
|
(2,040 |
) |
|
|
(12,244 |
) |
|
|
(6,180 |
) |
|
Inventory step-up |
|
— |
|
|
|
2,206 |
|
|
|
1,907 |
|
|
|
2,206 |
|
|
Impairment of equipment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,411 |
|
|
Restructuring cost (1) |
|
— |
|
|
|
— |
|
|
|
41,807 |
|
|
|
3,021 |
|
|
Acquisition cost |
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
| Adjusted EBITDA |
$ |
(11,728 |
) |
|
$ |
(23,028 |
) |
|
$ |
(82,794 |
) |
|
$ |
(102,415 |
) |
________________________(1) $1.2 million of stock-based
compensation expense is included in the restructuring cost line of
the table above for the fiscal year ended December 29, 2024. $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 Reconciliation
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 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net cash used in operating
activities |
$ |
(108,633 |
) |
|
$ |
(104,636 |
) |
| Capital expenditures |
|
(76,188 |
) |
|
|
(61,795 |
) |
| Free Cash Flow |
$ |
(184,821 |
) |
|
$ |
(166,431 |
) |
Other Non-GAAP Financial Measures
Reconciliation (In Thousands, Except Share and per Share
Amounts)
| |
|
Quarters Ended |
|
Fiscal Years Ended |
| |
|
December 29,2024 |
|
December 31,2023 |
|
December 29,2024 |
|
December 31,2023 |
|
Revenue |
|
$ |
9,717 |
|
|
$ |
7,381 |
|
|
$ |
23,074 |
|
|
$ |
7,644 |
|
| |
|
|
|
|
|
|
|
|
| GAAP cost of
revenue |
|
$ |
8,665 |
|
|
$ |
19,769 |
|
|
$ |
25,119 |
|
|
$ |
63,061 |
|
| Stock-based compensation
expense |
|
|
(124 |
) |
|
|
(459 |
) |
|
|
(320 |
) |
|
|
(5,460 |
) |
| Inventory step-up |
|
|
— |
|
|
|
(2,206 |
) |
|
|
(1,907 |
) |
|
|
(2,206 |
) |
| Non-GAAP cost of
revenue |
|
$ |
8,541 |
|
|
$ |
17,104 |
|
|
$ |
22,892 |
|
|
$ |
55,395 |
|
| |
|
|
|
|
|
|
|
|
| GAAP gross
margin |
|
$ |
1,052 |
|
|
$ |
(12,388 |
) |
|
$ |
(2,045 |
) |
|
$ |
(55,417 |
) |
| Stock-based compensation
expense |
|
|
124 |
|
|
|
459 |
|
|
|
320 |
|
|
|
5,460 |
|
| Inventory step-up |
|
|
— |
|
|
|
2,206 |
|
|
|
1,907 |
|
|
|
2,206 |
|
| Non-GAAP gross
margin |
|
$ |
1,176 |
|
|
$ |
(9,723 |
) |
|
$ |
182 |
|
|
$ |
(47,751 |
) |
| |
|
|
|
|
|
|
|
|
| GAAP research and
development (R&D) expense |
|
$ |
22,433 |
|
|
$ |
34,582 |
|
|
$ |
124,506 |
|
|
$ |
88,392 |
|
| Stock-based compensation
expense |
|
|
(5,082 |
) |
|
|
(5,337 |
) |
|
|
(24,853 |
) |
|
|
(27,409 |
) |
| Amortization of intangible
assets |
|
|
(416 |
) |
|
|
(277 |
) |
|
|
(1,664 |
) |
|
|
(277 |
) |
| Non-GAAP R&D
expense |
|
$ |
16,935 |
|
|
$ |
28,968 |
|
|
$ |
97,989 |
|
|
$ |
60,706 |
|
| |
|
|
|
|
|
|
|
|
| GAAP selling, general
and administrative (SG&A) expense |
|
$ |
13,135 |
|
|
$ |
17,807 |
|
|
$ |
74,311 |
|
|
$ |
79,014 |
|
| Stock-based compensation
expense |
|
|
(5,001 |
) |
|
|
(5,824 |
) |
|
|
(32,448 |
) |
|
|
(36,224 |
) |
| Amortization of intangible
assets |
|
|
(773 |
) |
|
|
(536 |
) |
|
|
(3,077 |
) |
|
|
(536 |
) |
| Acquisition cost |
|
|
— |
|
|
|
(158 |
) |
|
|
— |
|
|
|
(1,273 |
) |
| Non-GAAP SG&A
expense |
|
$ |
7,361 |
|
|
$ |
11,289 |
|
|
$ |
38,786 |
|
|
$ |
40,981 |
|
| |
|
|
|
|
|
|
|
|
| GAAP operating
expenses |
|
$ |
35,568 |
|
|
$ |
52,389 |
|
|
$ |
240,624 |
|
|
$ |
174,838 |
|
| Stock-based compensation
expense included in R&D expense |
|
|
(5,082 |
) |
|
|
(5,337 |
) |
|
|
(24,853 |
) |
|
|
(27,409 |
) |
| Stock-based compensation
expense included in SG&A expense |
|
|
(5,001 |
) |
|
|
(5,824 |
) |
|
|
(32,448 |
) |
|
|
(36,224 |
) |
| Amortization of intangible
assets |
|
|
(1,189 |
) |
|
|
(813 |
) |
|
|
(4,741 |
) |
|
|
(813 |
) |
| Impairment of equipment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,411 |
) |
| Restructuring cost (1) |
|
|
— |
|
|
|
— |
|
|
|
(41,807 |
) |
|
|
(3,021 |
) |
| Acquisition cost |
|
|
— |
|
|
|
(158 |
) |
|
|
— |
|
|
|
(1,273 |
) |
| Non-GAAP operating
expenses |
|
$ |
24,296 |
|
|
$ |
40,257 |
|
|
$ |
136,775 |
|
|
$ |
101,687 |
|
________________________(1) $1.2 million of stock-based
compensation expense is included in the restructuring cost line of
the table above for the fiscal year ended December 29, 2024. $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 Ended |
| |
|
December 29,2024 |
|
December 31,2023 |
|
December 29,2024 |
|
December 31,2023 |
|
GAAP loss from operations |
|
$ |
(34,516 |
) |
|
$ |
(64,777 |
) |
|
$ |
(242,669 |
) |
|
$ |
(230,255 |
) |
| Stock-based compensation
expense (1) |
|
|
10,207 |
|
|
|
11,620 |
|
|
|
57,621 |
|
|
|
69,093 |
|
| Amortization of intangible
assets |
|
|
1,189 |
|
|
|
813 |
|
|
|
4,741 |
|
|
|
813 |
|
| Inventory step-up |
|
|
— |
|
|
|
2,206 |
|
|
|
1,907 |
|
|
|
2,206 |
|
| Impairment of equipment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,411 |
|
| Restructuring cost (1) |
|
|
— |
|
|
|
— |
|
|
|
41,807 |
|
|
|
3,021 |
|
| Acquisition cost |
|
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
| Non-GAAP loss from
operations |
|
$ |
(23,120 |
) |
|
$ |
(49,980 |
) |
|
$ |
(136,593 |
) |
|
$ |
(149,438 |
) |
| |
|
|
|
|
|
|
|
|
| GAAP net loss
attributable to Enovix |
|
$ |
(37,465 |
) |
|
$ |
(59,977 |
) |
|
$ |
(222,241 |
) |
|
$ |
(214,071 |
) |
| Stock-based compensation
expense (1) |
|
|
10,207 |
|
|
|
11,620 |
|
|
|
57,621 |
|
|
|
69,093 |
|
| Change in fair value of common
stock warrants |
|
|
5,115 |
|
|
|
(2,040 |
) |
|
|
(12,244 |
) |
|
|
(6,180 |
) |
| Inventory step-up |
|
|
— |
|
|
|
2,206 |
|
|
|
1,907 |
|
|
|
2,206 |
|
| Amortization of intangible
assets |
|
|
1,189 |
|
|
|
813 |
|
|
|
4,741 |
|
|
|
813 |
|
| Impairment of equipment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,411 |
|
| Restructuring cost (1) |
|
|
— |
|
|
|
— |
|
|
|
41,807 |
|
|
|
3,021 |
|
| Acquisition cost |
|
|
— |
|
|
|
158 |
|
|
|
— |
|
|
|
1,273 |
|
| Non-GAAP net loss
attributable to Enovix shareholders |
|
$ |
(20,954 |
) |
|
$ |
(47,220 |
) |
|
$ |
(128,409 |
) |
|
$ |
(139,434 |
) |
| |
|
|
|
|
|
|
|
|
| GAAP net loss per
share attributable to Enovix, basic |
|
$ |
(0.20 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.35 |
) |
| GAAP weighted average number
of common shares outstanding, basic |
|
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,065,697 |
|
| |
|
|
|
|
|
|
|
|
| GAAP net loss per
share attributable to Enovix, diluted |
|
$ |
(0.20 |
) |
|
$ |
(0.36 |
) |
|
$ |
(1.27 |
) |
|
$ |
(1.38 |
) |
| GAAP weighted average number
of common shares outstanding, diluted |
|
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,575,555 |
|
| |
|
|
|
|
|
|
|
|
| Non-GAAP net loss per
share attributable to Enovix, basic |
|
$ |
(0.11 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.88 |
) |
| GAAP weighted average number
of common shares outstanding, basic |
|
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,065,697 |
|
| |
|
|
|
|
|
|
|
|
| Non-GAAP net loss per
share attributable to Enovix, diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.87 |
) |
| GAAP weighted average number
of common shares outstanding, diluted |
|
|
184,971,942 |
|
|
|
165,708,522 |
|
|
|
175,038,107 |
|
|
|
159,575,555 |
|
________________________(1) $1.2 million of stock-based
compensation expense is included in the restructuring cost line of
the table above for the fiscal year ended December 29, 2024. $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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