Enovix Q2 2026 Earnings Call Transcript

Enovix (NASDAQ: ENVX ) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

Access the full call at Summary Enovix Corporation reported strong momentum across its primary target markets: smartphones, Smart Eyewear, and drones, with significant milestones achieved in each. The company's second quarter revenue was $9 million, up 21% year over year, with a positive gross profit, ending the quarter with over $550 million in cash. Enovix's strategic focus includes advancing its silicon anode technology for smartphones, ramping up Smart Eyewear production, and expanding its presence in the defense and drone markets.

Operational highlights include a 45% increase in the defense pipeline to $183 million, and notable improvements in manufacturing yields, particularly in Smart Eyewear production. The company anticipates continued revenue growth in the third quarter, with expected revenues between $9 and $10 million, and remains focused on manufacturing readiness and strategic investments. Full Transcript OPERATOR Thank you for standing by, and welcome to the Enovix Corporation second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question-and-answer session. As a reminder, today's program will be recorded. And now I'd like to introduce your host for today's program, Monica Gould, Investor Relations for Enovix. Please go ahead.

Monica Gould, Investor Relations Thank you, operator. I would like to welcome everyone to Enovix Corporation second quarter 2026 financial results conference call. Joining me today are President and Chief Executive Officer Dr. Raj Talluri and Chief Financial Officer Ryan Benton.

com. They will provide prepared remarks and we will then open the call for questions. Before we begin, please note that today's call contains forward-looking statements that are subject to risks and uncertainties. These statements are based on current expectations and may differ materially from actual future results due to a number of factors.

For a discussion of these risks, please refer to the disclosures in today's press release and our filings with the Securities and Exchange Commission. You can also find these materials on our IR website. All statements made on this call are as of today, August 12, 2026, and we undertake no obligation to update them except as required by law. During the call we may also reference non-GAAP financial measures.

Reconciliations to the most directly comparable GAAP measures are included in the materials posted on our IR website. And with that I will turn the call over to Raj. Raj Talluri, CEO Good afternoon everyone and thank you for joining us. The second quarter showed momentum across all three of our primary target markets.

In smartphones, we reached an important qualification milestone. 2 C discharge cycle test. We have one final cycle life test and it's already well underway. We expect to finish remaining testing by the end of 2026, with the customer acceptance and smartphone field testing to follow.

In Smart Eyewear, the production ramp of our lead customer has begun. We shipped approximately 2,100 batteries to a Tier 1 customer, recorded our first Smart Eyewear product revenue from this customer, and expect to deliver roughly nine times that volume in the third quarter. In drones, defense, and industrial, we grew the pipeline by 41% from the first quarter. Drones led the way.

We advanced product development and the drone pipeline alone exceeds over $100 million now. Revenue for the quarter came in at the high end of our guidance, and we expect continued sequential growth in the third quarter. What is increasingly clear is that Enovix has multiple paths for growth that reinforce one another. Our 100% silicon anode A1 platform is progressing towards smartphone deployment while Smart Eyewear has entered commercial production.

That sequencing is by design. From the start, my strategy has been to go after the hardest market first — smartphones — because meeting the most demanding energy density requirements forces us to build the best product. Everything we prove at the smartphone level then flows naturally into adjacent categories. Smart Eyewear is the clearest example where the same platform is now shipping commercially.

Meanwhile, our MX platform takes that same silicon know-how and manufacturing discipline and aims it at defense — a big, fast-growing, high-value market. Our established South Korea operations are serving defense and industrial customers today, and their extensive experience with drones in particular is opening substantially larger opportunities.

Briefly, on the two platforms, the A1 platform uses a proprietary 100% silicon anode architecture for space-constrained applications where volumetric energy density and cycle life are most critical, while the MX platform blends silicon with graphite for greater gravimetric energy density and high power performance, manufactured at our proven facility in South Korea. These are not isolated businesses. They are mutually reinforcing and we're seeing these convergences translate into new areas for growth. Today we are working on silicon-blended opportunities beyond our traditional drone, defense, and industrial markets.

Drilling down a bit further, first on smartphones, we moved materially closer to completing qualification with our lead customer. 2 C discharge cycle test — this is the same test our internal testing indicated when we shared it with you in February. The customer's own data has now borne it out. Fundamentally, this is customer-confirmed evidence that silicon anode batteries can perform at high levels.

7 C testing approach for legacy graphite batteries. Testing is now live across several combinations of charge and discharge conditions as well. With an enhanced cell design, the same progression is underway. The enhanced cells are now showing stronger capacity retention in our internal work, and the data is now with our lead customer's hands for evaluation, along with multiple variants of the hybrid protocol.

We anticipate completing this final test in 2026. Our second smartphone OEM is also moving towards a similar qualification framework and we expect to begin sample deliveries in the fourth quarter. As we look towards 2027, we see the pattern repeating and expanding — our lead customer moving into commercial introduction, with our second OEM advancing through qualification, and additional leading OEMs with whom we are in active dialogue entering the qualification pipeline behind them. We pioneered the qualification testing pathway for silicon batteries in smartphones, so every customer after the first gets a faster, clearer path to execution and deployment.

I'm especially proud of our progress in Smart Eyewear, which has now moved from initial production into early commercial revenue with a Tier 1 customer. Recently we completed a key international safety certification of our cells and battery packs, as well as a full suite of customer reliability tests. We shipped approximately 2,100 A1 batteries in Q2 and recognized our first Smart Eyewear product revenue. We now have delivery orders in hand for approximately 19,000 packs, which we are planning to deliver in the third quarter — a roughly nine-fold increase from Q2.

Those delivery orders are part of the customer's 50,000-unit pack order. We expect to ship the remaining balance in the fourth quarter. Beyond 2026, we expect shipment volumes to grow as our customer's downstream deployments expand. Turning to our defense sector, I'm proud of the team's execution — from initial product launch in the first quarter, to a substantial increase in our drone pipeline in the second quarter, to customer sampling beginning now in the third quarter.

The pipeline for products manufactured in South Korea increased 45% to approximately $183 million from the $130 million at the end of the first quarter. As a reminder, this figure represents the estimated peak annual production value; the lifetime opportunities are often many multiples more. More than half the growth came from drone opportunities, which now exceed $100 million on their own. Let me walk through what's inside that number, because the funnel you see on the slide — more than $40 million of this pipeline is at stages where customers are actively evaluating and testing our cells or designing them into products.

And the breadth is striking, including some of the most recognized names in defense technology and consumer electronics. We also introduced MX1 to a broader set of customers at industry events in the United States and Europe. At approximately 360 watt-hours per kilogram, while supporting high continuous and pulse discharge, MX1 B01 is designed to improve mission execution, flight time, range, and payload capability. We've already ordered additional production equipment for the MX1 B01, and we expect it to be operational by mid-2027, with initial commercial shipments and revenue expected to follow as that capacity comes online and customer programs complete qualification.

This pipeline growth is also a commercial execution story. For the past two quarters, we've been deliberately building out our commercial organization, adding application engineers and product management talent. And we then brought in Steve Bakos, a seasoned sales veteran with more than 35 years in the global semiconductor industry, most recently running large global accounts at Infineon, to lead our sales and application engineering teams under Sameer Anaragi, our Chief Business Officer. You're seeing the early results in that funnel.

Our South Korea operation is a meaningful advantage in pursuing these programs. It combines an established history serving defense customers with inherent manufacturing quality and supply chain capabilities in a TAA-designated country. Our South Korea supply is TAA compliant today and ready for the expected mid-2027 capacity ramp. And we expect NDAA compliance across multiple products in July.

3 transportation testing, clearing an important step for commercial shipment, and we're commencing sampling with numerous customers in the third quarter. The next phase of Korea capacity is expected to come online in mid-2027 — a very capital-efficient expansion utilizing existing land and buildings we own and using readily available equipment. The economics are attractive; ASPs are healthy, and because we own our own manufacturing, we believe the scale volume can support solid margins. Beyond the current product, MX2 remains targeted for 2027 with the goal of reaching 400 watt-hours per kilogram.

Let me now come back to the A1 technology platform. 2 engineering samples in the first quarter. 2 is expected to provide approximately 20% higher volumetric energy density than A1 by combining thinner materials, better packaging efficiency, and higher cathode voltage. Through our EX3M technology node, we sampled cells to one Tier 1 Smart Eyewear customer in Q2.

Many of the same EX3M innovations are expected to carry into future smartphone batteries and support another meaningful step forward in performance in that area as well. I want to give you some insight into how our pace of innovation is also accelerating, as it's something I'm particularly focused on. In batteries, the gating factor in development speed is cycle life testing. A full cycle life test has historically taken four to five months.

That sets the tempo of learning in the entire industry. We are developing AI models that can predict cycle life outcomes much earlier in the cycle life test than has historically been the case. Our models for Eyewear cells are getting close, and we're making very good progress in smartphone cell modeling as well. To be clear, customer qualification will always be the physical test, but this is about how fast we can learn and iterate internally.

If we get this right, every design generation arrives faster, and that speed itself becomes a durable competitive advantage. Turning to manufacturing, the second quarter showed continued improvements across Fab 2, with particularly strong results through most of the Smart Eyewear production flow. In fact, our Smart Eyewear cell output came in well ahead of our internal plan for the quarter, and our internal yield — the cumulative yield across the entire production line — has now improved for three consecutive quarters. 6%.

Zone 1 dicing remains our primary throughput bottleneck and a top focus, but the yield has improved to approximately 84% from 80% in the first quarter. Zone 1 has been a stubborn constraint for a long time. This is exactly why we changed the approach rather than simply tuning it. The hybrid dicing configuration uses laser and mechanical processes where each is most effective, and is designed to lift Zone 1 throughput to multiples of today's rate — the step change we need to support the production volumes we are planning for 2027.

Several of the key mechanical dicing steps are expected to come online around the year-end. Supporting all of this execution is our growing team in India. The team, in addition to conducting advanced research, directly supports manufacturing execution at both our Malaysia and South Korea factories. Finally, I want to spend a moment on leadership because I'm thrilled to have Michael Vaibada on board as Chief Operating Officer.

Michael brings decades of operations experience, including at Apple. He has a full-scope mandate across manufacturing, supply chain, quality, and customer delivery. His immediate priorities are increasing Smart Eyewear output, preparing manufacturing for smartphone field test builds, and driving the cost, yield, and delivery improvements underway. Adding Michael gives me even more confidence that we are the right team for the next phase of scale.

With that, I will turn the call over to Ryan to review our financial results and outlook. Ryan Benton (Chief Financial Officer) Thanks, Raj. We delivered another quarter of revenue growth and positive gross profit. We came in better than our operating loss guidance and we ended the quarter with over $550 million in cash on the balance sheet, all while continuing to invest in the customer programs and manufacturing work that support the next phase of commercialization.

Second quarter revenue was $9 million, up 21% year over year and 19% sequentially at the high end of our guidance, our fifth consecutive quarter of year over year revenue growth. Defense shipments from South Korea remained the largest contributor while Smart Eyewear generated its first product revenue, modest in amount but an early proof point of contribution from AI-powered wearable devices. 9% respectively. The year over year decline in quarterly margin primarily reflected the mix of battery products sold through our South Korea operations rather than a change in underlying execution.

3%. 8 million a year ago. The increase reflects continued spending on smartphone qualification, product development and manufacturing readiness, including support for the Smart Eyewear ramp. 8 million, better than our guidance range of a loss of $29 to $32 million.

1 million in the second quarter of 2025. 17, and unchanged year over year. 8 million a year ago, both better year over year, despite higher capital expenditures supporting our manufacturing scale up. The operating improvement primarily reflected favorable working capital changes.

6 million, principally supporting manufacturing readiness and capacity expansion. 1 million in cash, cash equivalents and marketable securities, including restricted cash. That liquidity allows us to fund the qualification and commercialization milestones already underway while preserving flexibility for selective strategic investments. We did not repurchase any shares during the quarter.

Our capital deployment priorities remain unchanged: product qualification completion, disciplined manufacturing investment and commercial execution. For the third quarter we expect revenue between $9 and $10 million, up approximately 13% to 25% year over year.