Core Viewpoint - SES AI Corporation, a manufacturer of AI-enhanced lithium metal and lithium ion batteries, is scheduled to announce its Q2 2025 financial results on August 4, 2025, which is highly anticipated in the market [1]. Company Summary - SES AI Corporation specializes in the production of advanced lithium batteries, leveraging artificial intelligence to enhance performance [1]. - The company is publicly traded on the NYSE under the ticker SES [1]. Industry Context - The focus on lithium metal and lithium ion batteries is significant due to the growing demand for energy storage solutions, particularly in electric vehicles and renewable energy sectors [1].

Summary of SES AI Fireside Chat - July 15, 2025 Company Overview - SES AI (SES) was established in 2012, focusing on developing high energy density lithium metal batteries and has expanded to other chemistries including silicon lithium ion, LFP, and sodium batteries [4][6] Core Business Model - SES is transitioning to a multistrategy business model that integrates battery production with an innovative AI-driven software platform called Molecular Universe [5][6] - The Molecular Universe platform has gained popularity since its launch, demonstrating successful applications in various battery chemistries [4][6] Revenue and Financial Outlook - SES anticipates becoming the first battery company in the US to break even sooner than expected, driven by revenues from materials, drones, batteries, energy storage, and subscriptions to Molecular Universe [7][36] - The company is on track to meet its revenue guidance for 2025, with plans to expand manufacturing capacities and marketing channels [39] Molecular Universe Platform - The platform allows SES to generate its own data by systematically testing and synthesizing different materials and battery configurations, which is crucial for training their AI models [11][12] - The latest version, Molecular Universe 0.5, introduces a feature called Deep Space, which enhances problem-solving capabilities by asking clarifying questions before providing solutions [18][20] - This innovation aims to significantly reduce R&D time from years to approximately 20-30 minutes for practical solutions, appealing to battery companies looking to cut R&D costs [19][23] Market Interest and Adoption - There is growing interest from enterprise customers, particularly battery and electric companies, in the Molecular Universe platform, with many major battery companies trialing the enterprise version [15][31] - The pricing model includes multiple tiers, with a free entry-level option for academic users and paid tiers for enterprise customers [28][30] Competitive Positioning - Molecular Universe serves as a core connection between various market segments, including batteries for drones, electric vehicles (EVs), and energy storage systems (ESS), allowing SES to supply major battery producers without direct competition [35][36] - The platform's ability to provide practical solutions is expected to enhance SES's market position and revenue growth [36][26] Future Outlook - SES plans to announce further developments in manufacturing capacities and marketing strategies to support growth in its various market segments [39]

Core Viewpoint - SES AI Corporation (SES) is showing potential for a bullish breakout due to a recent "golden cross" in its moving averages, indicating a key technical support level has been reached [1] Technical Analysis - SES's 50-day simple moving average has crossed above its 200-day simple moving average, a pattern known as a "golden cross," which is typically seen as a bullish signal [1] - A successful golden cross event consists of three stages: the stock price bottoms out, the shorter moving average crosses above the longer moving average, and the stock maintains upward momentum [2] Performance Metrics - Over the past four weeks, SES has experienced an 18.2% gain, positioning it at a 2 (Buy) on the Zacks Rank, suggesting further breakout potential [3] - Earnings expectations for SES are positive, with two upward revisions in estimates for the current quarter and no downward revisions over the past 60 days, indicating a bullish trend [3][5]

Core Viewpoint - Innovation is crucial for competition in the battery industry, with increasing R&D investments expected to reach 899 billion yuan by 2025 and 2154 billion yuan by 2030, highlighting the industry's focus on research and development [1][2]. Group 1: R&D Investment and Innovation Efficiency - The battery industry is experiencing a rapid pace of new product launches, but the efficiency of innovation is declining, with revenue growth lagging behind R&D investment growth [2]. - For instance, CATL's R&D investment in Q1 2025 was 4.814 billion yuan, a 10.92% increase, while its revenue was 84.705 billion yuan, growing only 6.18% [2]. - Solid-state batteries, a key innovation focus, are not expected to achieve small-scale production until 2027-2030, indicating a gap between innovation and market demand [2]. Group 2: AI Integration in R&D - AI technology is seen as a potential key to accelerating innovation in the battery sector, with companies like CATL and LG Energy actively integrating AI into their R&D processes [3]. - CATL has developed a comprehensive AI platform that combines computational centers, algorithm centers, and data centers to enhance R&D efficiency [3]. - SES AI's AI4S solution utilizes a vast molecular database to support material discovery and innovation in battery technology [4][5]. Group 3: Molecular Universe and Data Utilization - SES's "Molecular Universe" aims to transform traditional material R&D from experience-based to data-driven, significantly expanding the scope of molecular exploration [4][5]. - The platform has already cataloged 108 million molecules and is rapidly expanding towards a target of 10^11 molecules, providing a rich resource for battery innovation [6]. - The AI model within the "Molecular Universe" is trained on extensive data, ensuring high reliability and reducing the likelihood of errors in predictions [8][10]. Group 4: AI-Driven R&D Process - The "Molecular Universe" employs a closed-loop system that integrates asking questions, searching for solutions, filtering candidates, and verifying results to enhance the R&D process [10][19]. - Users can interact with the system using natural language to define problems and receive tailored recommendations for battery materials [11][20]. - The platform's capabilities allow for dynamic filtering of molecular candidates based on specific criteria, facilitating the identification of optimal solutions [14][15]. Group 5: Future Developments and Enhancements - Future versions of the "Molecular Universe" will expand the molecular database to include more organic and inorganic compounds, enhancing its applicability in battery research [26][27]. - The platform will also introduce additional properties for evaluation, such as melting point and toxicity, to provide a more comprehensive assessment of molecular suitability [26]. - SES plans to offer enterprise-level services for local deployment and joint development, further accelerating the R&D process for users [28].

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a disclaimer for forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) The company's forward-looking statements are subject to risks, including Li-Metal battery commercialization challenges, expected losses, capital needs, and potential NYSE delisting - The company faces significant challenges in developing and commercializing Lithium-Metal (Li-Metal) batteries for electric vehicles (EVs) and urban air mobility (UAM), with unpredictable development pace and potential delays[9](index=9&type=chunk) - SES AI Corporation expects to continue incurring losses for the foreseeable future and will require substantial additional capital to fund its business, with no guarantee of achieving or maintaining profitability[9](index=9&type=chunk) - The company's Class A common stock is at risk of delisting from the NYSE due to not meeting the minimum share price requirement, which could adversely affect its trading market and investor perception[13](index=13&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) [Part I. Financial Information](index=6&type=section&id=Part%20I.%20Financial%20Information) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the three months ended March 31, 2025 [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents the unaudited condensed consolidated balance sheets, detailing assets, liabilities, and equity as of March 31, 2025, and December 31, 2024 | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $56,052 | $128,796 | | Short-term investments | $183,710 | $133,748 | | Total current assets | $256,090 | $276,904 | | Total assets | $305,982 | $329,785 | | Total current liabilities | $16,405 | $22,815 | | Total liabilities | $36,127 | $51,475 | | Total stockholders' equity | $269,855 | $278,310 | - Cash and cash equivalents decreased by **$72.7 million** from December 31, 2024, to March 31, 2025, while short-term investments increased by **$49.9 million**[15](index=15&type=chunk) - Total assets decreased by approximately **$23.8 million**, and total liabilities decreased by **$15.3 million**, primarily due to a reduction in Sponsor Earn-Out liabilities[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Presents the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025, and 2024 | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $5,793 | $— | | Cost of revenues | $1,236 | $— | | Gross profit | $4,557 | $— | | Research and development | $20,510 | $11,765 | | General and administrative | $7,320 | $9,506 | | Loss from operations | $(23,273) | $(21,271) | | Net loss | $(12,432) | $(15,557) | | Basic and diluted EPS | $(0.04) | $(0.05) | - The company generated **$5.8 million in revenue** and **$4.6 million in gross profit** for the three months ended March 31, 2025, compared to no revenue in the prior-year period, marking the commencement of principal business activities[16](index=16&type=chunk)[27](index=27&type=chunk)[75](index=75&type=chunk) - Research and development expenses increased by **74.3% to $20.5 million** in Q1 2025 from $11.8 million in Q1 2024, while general and administrative expenses decreased by **23.0% to $7.3 million**[16](index=16&type=chunk)[74](index=74&type=chunk) - Net loss improved to **$(12.4) million** in Q1 2025 from $(15.6) million in Q1 2024, and basic and diluted net loss per share improved to **$(0.04)** from $(0.05)[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Presents the unaudited condensed consolidated statements of stockholders' equity, showing changes for the three months ended March 31, 2025 | Metric (in thousands) | Balance – Dec 31, 2024 | Balance – Mar 31, 2025 | | :-------------------- | :--------------------- | :--------------------- | | Additional Paid-in-Capital | $579,378 | $583,328 | | Accumulated Deficit | $(298,871) | $(311,303) | | Total Stockholders' Equity | $278,310 | $269,855 | - Total stockholders' equity decreased by **$8.4 million** from December 31, 2024, to March 31, 2025, primarily due to the net loss of **$12.4 million**, partially offset by stock-based compensation of **$4.0 million**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Presents the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2025, and 2024 | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(22,833) | $(8,979) | | Net cash used in investing activities | $(49,844) | $53,242 | | Net cash provided by financing activities | $8 | $18 | | Net decrease (increase) in cash, cash equivalents and restricted cash | $(72,745) | $43,912 | - Net cash used in operating activities significantly increased to **$22.8 million** in Q1 2025 from $9.0 million in Q1 2024, driven by net loss and working capital outflows[24](index=24&type=chunk)[97](index=97&type=chunk) - Investing activities shifted from providing **$53.2 million** in Q1 2024 to using **$49.8 million** in Q1 2025, primarily due to net purchases of short-term investments[24](index=24&type=chunk)[102](index=102&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed notes explaining the company's business, accounting policies, revenue, partnerships, and other financial details [Note 1. Nature of Business](index=10&type=section&id=Note%201.%20Nature%20of%20Business) Describes SES AI Corporation's business, focusing on AI-enhanced Li-Metal and Li-ion battery development and its operational commencement - SES AI Corporation develops AI-enhanced high-performance Lithium-Metal (Li-Metal) and Lithium-ion (Li-ion) rechargeable battery technologies for EVs, UAM, and other applications[27](index=27&type=chunk) - The company's mission is to accelerate the world's energy transition through material discovery and battery management, combining high energy density of Li-Metal with cost-effective manufacturability of Li-ion[27](index=27&type=chunk) - Principal operations commenced and revenue from business activities started in October 2024, with R&D facilities in Woburn, MA, Shanghai, China, and Chungju, South Korea[27](index=27&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the basis of financial statement presentation, adherence to U.S. GAAP, and key accounting policies and estimates - The financial statements are prepared in accordance with U.S. GAAP and SEC regulations for interim financial reporting, with all intercompany balances and transactions eliminated in consolidation[28](index=28&type=chunk) - Significant estimates and assumptions are made for valuation of equity awards, revenue, deferred tax assets, operating lease liabilities, and long-lived assets[31](index=31&type=chunk) - The company uses a fair value hierarchy (Level 1, 2, 3) for financial instruments, with Sponsor Earn-Out liabilities measured at Level 3 fair value[34](index=34&type=chunk) [Note 3. Revenue](index=14&type=section&id=Note%203.%20Revenue) Details the company's revenue recognition, primarily from service and product sales, and remaining performance obligations | Revenue Type (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Service revenue | $5,785 | $— | | Product revenue | $8 | $— | | Total revenue from customers | $5,793 | $— | - Revenue for Q1 2025 totaled **$5.8 million**, primarily from service revenue (**$5.785 million**) and a small amount of product revenue (**$8 thousand**), with no revenue in the prior-year period[40](index=40&type=chunk) - As of March 31, 2025, remaining performance obligations related to customer contracts totaled **$2.3 million**, expected to be recognized as revenue within one year[41](index=41&type=chunk) [Note 4. Partnerships](index=14&type=section&id=Note%204.%20Partnerships) Discusses key joint development agreements and service agreements with OEM partners, including Hyundai and Honda - The company extended a joint development agreement (JDA) with Hyundai Motor Company until December 2025 for B-sample Li-Metal battery technology research and development[42](index=42&type=chunk) - The B-sample JDA with Honda Motor Company, Ltd. was replaced with a B-sample services agreement in January 2025, effective through the end of 2025[43](index=43&type=chunk) - The A-Sample Li-Metal battery JDA with General Motors concluded in September 2024, and GM is no longer considered a related party as of 2025[43](index=43&type=chunk)[67](index=67&type=chunk) [Note 5. Cash and Cash Equivalents](index=14&type=section&id=Note%205.%20Cash%20and%20Cash%20Equivalents) Provides a breakdown of cash, cash equivalents, and restricted cash, highlighting changes over the reporting period | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | Cash | $6,441 | $7,908 | | Money market funds | $49,611 | $120,888 | | Total cash and cash equivalents | $56,052 | $128,796 | | Restricted cash | $598 | $599 | | Total cash, cash equivalents, and restricted cash | $56,650 | $129,395 | - Total cash and cash equivalents decreased from **$128.8 million** at December 31, 2024, to **$56.1 million** at March 31, 2025, primarily due to a reduction in money market funds[47](index=47&type=chunk) [Note 6. Short-Term Investments](index=16&type=section&id=Note%206.%20Short-Term%20Investments) Details the company's short-term investments, primarily U.S. treasury securities and marketable equity securities, and their fair values | (in thousands) | Amortized Cost (Mar 31, 2025) | Fair Value (Mar 31, 2025) | Amortized Cost (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :------------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | U.S. treasury securities | $182,325 | $182,472 | $132,615 | $132,782 | - The fair value of short-term U.S. treasury securities increased from **$132.8 million** at December 31, 2024, to **$182.5 million** at March 31, 2025[49](index=49&type=chunk) - Marketable equity securities held by the company increased in value from **$1.0 million** at December 31, 2024, to **$1.2 million** at March 31, 2025, with an initial cost of **$0.5 million**[49](index=49&type=chunk) [Note 7. Accrued Expenses and Other Current Liabilities](index=16&type=section&id=Note%207.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Presents a breakdown of accrued expenses and other current liabilities, noting changes due to vendor charges and compensation | Component (in thousands) | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Employee compensation and related costs | $5,418 | $6,646 | | Vendor project charges | $3,338 | $7,500 | | Professional and consulting services | $1,433 | $1,480 | | Construction in process | $575 | $1,408 | | Total accrued expenses and other current liabilities | $11,961 | $18,329 | - Total accrued expenses and other current liabilities decreased by **$6.4 million** from $18.3 million at December 31, 2024, to **$12.0 million** at March 31, 2025, primarily due to decreases in vendor project charges and employee compensation[50](index=50&type=chunk) [Note 8. Government Grant](index=16&type=section&id=Note%208.%20Government%20Grant) Describes the government grant received for facilities and equipment, including conditions and its accounting treatment - The company received a government grant in December 2022 for facilities and property/equipment, with conditions including minimum investments and job creation over five to ten years[51](index=51&type=chunk) - As of March 31, 2025, and December 31, 2024, the company had received, but not yet earned, cash grants equivalent to **$8.1 million**, recorded as a noncurrent liability[53](index=53&type=chunk) [Note 9. Sponsor Earn-Out Liabilities](index=18&type=section&id=Note%209.%20Sponsor%20Earn-Out%20Liabilities) Details the changes in Sponsor Earn-Out liabilities, including fair value adjustments and valuation methodology | (in thousands) | Balance as of Dec 31, 2024 | Change in fair value | Balance as of Mar 31, 2025 | | :------------- | :------------------------- | :------------------- | :------------------------- | | Sponsor Earn-Out liabilities | $9,472 | $(7,879) | $1,593 | - Sponsor Earn-Out liabilities decreased significantly from **$9.5 million** at December 31, 2024, to **$1.6 million** at March 31, 2025, primarily due to a **$7.9 million** gain from the change in fair value[55](index=55&type=chunk) - The fair value of Sponsor Earn-Out shares is measured using a Monte Carlo simulation model, with key inputs including expected term, risk-free rate, expected volatility, and stock price[54](index=54&type=chunk) [Note 10. Commitments and Contingencies](index=18&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) Outlines the company's commitments under R&D agreements, lease obligations, and potential legal claims - The company is committed to research and development activities under a JDA with an OEM partner, with an agreed-upon value of up to **$35 million**, of which **$24.0 million** has been spent as of March 31, 2025[56](index=56&type=chunk) - The company assesses the probability of incurring liability for relinquishment charges under a Woburn office lease amendment as remote[57](index=57&type=chunk) - The company is subject to ordinary course legal claims and litigation but expects any liabilities not covered by insurance to not materially affect its financial condition[58](index=58&type=chunk) [Note 11. Stock-Based Compensation](index=20&type=section&id=Note%2011.%20Stock-Based%20Compensation) Provides a breakdown of stock-based compensation expenses by functional area and type of equity award | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,150 | $1,451 | | General and administrative | $2,662 | $3,333 | | Cost of revenue | $161 | $— | | Total stock-based compensation | $3,973 | $4,784 | - Total stock-based compensation expense decreased to **$4.0 million** in Q1 2025 from **$4.8 million** in Q1 2024, with the majority allocated to general and administrative expenses[60](index=60&type=chunk) - Restricted Stock Units (RSUs) accounted for the largest portion of stock-based compensation, followed by Performance Stock Units (PSUs) and Restricted Stock Awards (RSAs)[60](index=60&type=chunk) [Note 12. Income Taxes](index=20&type=section&id=Note%2012.%20Income%20Taxes) Discusses the company's effective tax rate and the factors influencing it for the reporting periods - The company's effective tax rate for Q1 2025 was **0.0%**, compared to **(1.8)%** for Q1 2024, primarily due to income taxes on foreign earnings offset by U.S. losses where no benefit was recorded[61](index=61&type=chunk) [Note 13. Net Loss Per Share](index=21&type=section&id=Note%2013.%20Net%20Loss%20Per%20Share) Presents the basic and diluted net loss per share and weighted average shares outstanding for the reporting periods | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :----- | :-------------------------------- | :-------------------------------- | | Net loss per share (basic and diluted) | $(0.04) | $(0.05) | | Weighted average shares outstanding (basic and diluted) | 329,334,434 | 318,790,719 | - Common stock equivalents totaling **70.7 million shares** for Q1 2025 (**84.6 million** for Q1 2024) were excluded from diluted net loss per share computation as their effect would have been anti-dilutive or performance criteria were not met[62](index=62&type=chunk) [Note 14. Segment and Geographic Information](index=21&type=section&id=Note%2014.%20Segment%20and%20Geographic%20Information) Details the company's single operating segment, geographic revenue distribution, and significant expenses - The company operates in one operating and reportable segment, with the CEO serving as the Chief Operating Decision Maker (CODM) and reviewing financial information on a consolidated basis[63](index=63&type=chunk) - For Q1 2025, **100% of total revenue** was generated outside of the United States, based on customer billing addresses in the Asia Pacific region[66](index=66&type=chunk) | Significant Expense (in millions) | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Compensation and benefits (excl. stock comp, net of reimbursements) | $6.4 | $7.1 | | Lab and equipment (net of reimbursements) | $5.8 | $1.3 | | Professional services | $6.1 | $2.0 | | General and administrative | $3.9 | $4.8 | [Note 15. Related-Party Transactions](index=23&type=section&id=Note%2015.%20Related-Party%20Transactions) Discusses changes in related-party relationships, specifically regarding General Motors - General Motors (GM) is no longer considered a related party as of 2025, following the mutual termination of the Director Nomination Agreement on October 29, 2024, and GM's termination of board representation[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, and capital resources for the three months ended March 31, 2025 [Overview](index=24&type=section&id=Overview) Provides an overview of SES AI Corporation's business, its transition to B-Sample development, and R&D focus areas - SES AI Corporation is a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal and Li-ion rechargeable batteries for EVs, UAM, drones, robotics, and battery energy storage systems[70](index=70&type=chunk) - The company has transitioned from A-Sample to B-Sample battery development with OEM partners (e.g., GM, Hyundai, Honda) and is focusing R&D on scale-up to 100 Ah cells, module/pack design, AI software/BMS, and advanced materials[71](index=71&type=chunk)[72](index=72&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Analyzes the company's revenue, cost of revenue, operating expenses, and non-operating items for the reporting period | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenue from customers | $5,793 | $— | $5,793 | 100.0% | | Cost of revenue | $1,236 | $— | $1,236 | 100.0% | | Gross profit | $4,557 | $— | $4,557 | 100.0% | | Research and development | $20,510 | $11,765 | $8,745 | 74.3% | | General and administrative | $7,320 | $9,506 | $(2,186) | (23.0)% | | Loss from operations | $(23,273) | $(21,271) | $(2,002) | 9.4% | [Revenue from Customers](index=26&type=section&id=Revenue%20from%20Customers) Discusses the $5.8 million revenue generated in Q1 2025, primarily from service contracts, marking the start of principal business activities - Revenue for Q1 2025 was **$5.8 million**, primarily from service-related contracts with OEMs and other manufacturers, marking the start of principal business activities in October 2024[75](index=75&type=chunk)[81](index=81&type=chunk) [Cost of Revenue](index=26&type=section&id=Cost%20of%20Revenue) Details the $1.2 million cost of revenue in Q1 2025, mainly personnel costs, with expectations for future increases - Cost of revenue for Q1 2025 was **$1.2 million**, mainly attributable to personnel costs, and is expected to increase with new revenue contracts[76](index=76&type=chunk)[77](index=77&type=chunk) [Research and Development](index=26&type=section&id=Research%20and%20Development) Explains the 74% increase in R&D expenses in Q1 2025, driven by lab equipment, AI software, and reduced reimbursements - Gross R&D expenses increased by **$8.7 million (74%)** to **$20.5 million** in Q1 2025, compared to $11.8 million in Q1 2024[74](index=74&type=chunk)[80](index=80&type=chunk) - The increase was primarily driven by a **$5.5 million** rise in lab equipment purchases, a **$4.7 million** increase in software service costs for AI infrastructure, and a **$3.5 million** decrease in JDA reimbursements[82](index=82&type=chunk)[83](index=83&type=chunk) - These increases were partially offset by a **$3.0 million** decrease in salaries, benefits, and stock-based compensation due to lower headcount[83](index=83&type=chunk) [General and Administrative](index=28&type=section&id=General%20and%20Administrative) Highlights the 23% decrease in general and administrative expenses in Q1 2025, primarily due to lower headcount and consulting fees - General and administrative expenses decreased by **$2.2 million (23%)** to **$7.3 million** in Q1 2025, compared to $9.5 million in Q1 2024[74](index=74&type=chunk)[85](index=85&type=chunk) - This decrease was mainly due to a **$1.7 million** reduction in salaries, benefits, and stock-based compensation from lower headcount, a **$0.4 million** decrease in consulting fees, and a **$0.2 million** decrease in insurance premiums[85](index=85&type=chunk) [Non-Operating Items](index=28&type=section&id=Non-Operating%20Items) Discusses changes in interest income, gain on Sponsor Earn-Out liabilities, and miscellaneous income for the reporting period - Interest income decreased to **$2.7 million** in Q1 2025 from **$4.2 million** in Q1 2024, primarily due to maturities of higher interest securities and cash burn[87](index=87&type=chunk) - The company recognized a **$7.9 million** gain on the change in fair value of Sponsor Earn-Out liabilities in Q1 2025, significantly higher than the **$0.9 million** gain in Q1 2024[88](index=88&type=chunk) - Miscellaneous income, net, decreased by **$0.6 million** to **$0.3 million** in Q1 2025, mainly due to a decrease in the fair value of equity investments[89](index=89&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, operating cash flows, investing activities, and future capital requirements - As of March 31, 2025, the company had **$56.1 million** in cash and cash equivalents and **$183.7 million** in marketable debt and equity securities[91](index=91&type=chunk) - The company expects to sustain substantial operating expenses and net operating losses for several years, requiring additional funding beyond existing liquidity for full commercialization[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - An at-the-market equity offering program, entered into on February 28, 2025, allows for the sale of up to **$150.0 million** in Class A Common Stock, though no shares were sold under this program during Q1 2025[94](index=94&type=chunk) [Summary of Cash Flows](index=30&type=section&id=Summary%20of%20Cash%20Flows) Provides a summary of net cash flows from operating, investing, and financing activities for the reporting periods | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(22,833) | $(8,979) | | Investing activities | $(49,844) | $53,242 | | Financing activities | $8 | $18 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(72,745) | $43,912 | [Operating Activities](index=30&type=section&id=Operating%20Activities) Analyzes the significant increase in cash used in operating activities, driven by net loss and working capital outflows - Net cash used in operating activities increased to **$22.8 million** in Q1 2025 from $9.0 million in Q1 2024, primarily due to a net loss of **$12.4 million** and an **$8.0 million** working capital outflow[97](index=97&type=chunk)[98](index=98&type=chunk) - Working capital outflow in Q1 2025 was driven by decreases in accrued expenses (**$5.3 million**), increases in prepaid assets (**$1.7 million**), and decreases in operating lease liabilities (**$1.0 million**)[97](index=97&type=chunk) - In Q1 2024, net cash used in operating activities was **$9.0 million**, with a **$3.7 million** working capital inflow, mainly from a **$5.0 million** decrease in prepaids and other assets due to JDA receivable payments[98](index=98&type=chunk) [Investing Activities](index=32&type=section&id=Investing%20Activities) Explains the shift in investing activities from cash provided to cash used, primarily due to marketable debt securities purchases - Net cash used in investing activities was **$49.8 million** in Q1 2025, a significant shift from **$53.2 million** provided in Q1 2024[101](index=101&type=chunk) - This change was primarily due to net purchases of marketable debt securities totaling **$48.9 million** in Q1 2025, compared to **$60.0 million** of net proceeds from such investments in Q1 2024[102](index=102&type=chunk) - Capital expenditures decreased to **$0.9 million** in Q1 2025 from **$6.8 million** in Q1 2024, with a shift towards AI-related infrastructure classified as R&D expense rather than manufacturing equipment[103](index=103&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) Notes the immaterial net cash provided by financing activities for both reporting periods - Net cash provided by financing activities was immaterial for both Q1 2025 (**$8 thousand**) and Q1 2024 (**$18 thousand**)[104](index=104&type=chunk) [Contractual Obligations and Commitments](index=32&type=section&id=Contractual%20Obligations%20and%20Commitments) Details the company's short-term and long-term contractual obligations, including purchase and operating lease commitments | Obligation Type | Short Term (in thousands) | Long Term (in thousands) | Total (in thousands) | | :-------------- | :------------------------ | :----------------------- | :------------------- | | Purchase obligations | $27,918 | $654 | $28,572 | | Operating lease obligations | $3,435 | $9,390 | $12,825 | | Total | $31,353 | $10,044 | $41,397 | - As of March 31, 2024, total contractual obligations amounted to **$41.4 million**, with **$31.4 million** due in the short term and **$10.0 million** in the long term[105](index=105&type=chunk) [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements) Discusses the company's evaluation of new accounting pronouncements and their potential impact on financial statements - The company is evaluating the impact of ASU 2023-9 (Improvements to Income Tax Disclosures, effective after Dec 15, 2024) and ASU No. 2024-03 (Disaggregation of Income Statement Expenses, effective after Dec 15, 2026) on its consolidated financial statements[36](index=36&type=chunk)[37](index=37&type=chunk)[107](index=107&type=chunk) [Critical Accounting Estimates and Judgments](index=32&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) Confirms no significant changes to critical accounting policies or estimates from the prior annual report - There have been no significant changes to the company's critical accounting policies or underlying assumptions and estimates from those disclosed in its 2024 Annual Report on Form 10-K[109](index=109&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no significant changes to the company's market risk during the three months ended March 31, 2025, referring to the 2024 Annual Report on Form 10-K for further discussion - No significant changes to the company's market risk occurred during the three months ended March 31, 2025[112](index=112&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Reports that disclosure controls and procedures were not effective due to a material weakness in valuing Sponsor Earn-Out liabilities, with remediation efforts underway [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes that disclosure controls and procedures were not effective due to material weaknesses, despite fair financial representation - As of March 31, 2025, the company's disclosure controls and procedures were not effective due to identified material weaknesses in internal control over financial reporting[113](index=113&type=chunk) - Despite the material weaknesses, management believes the unaudited interim condensed consolidated financial information fairly represents the company's financial condition, results of operations, and cash flows[115](index=115&type=chunk) [Material Weakness](index=34&type=section&id=Material%20Weakness) Identifies a material weakness in the review control for Sponsor Earn-Out liabilities valuation, which did not lead to misstatements - A material weakness was identified in a review control associated with the valuation of Sponsor Earn-Out liabilities, which did not effectively evaluate a key assumption at an appropriate level of precision[116](index=116&type=chunk) - This material weakness did not result in any material misstatements to the unaudited condensed consolidated financial statements for Q1 2025 or Q1 2024[117](index=117&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports no material changes in internal control over financial reporting during the quarter, apart from remediation actions - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter, other than actions taken for remediation[120](index=120&type=chunk) [Management's Remediation Initiatives](index=36&type=section&id=Management's%20Remediation%20Initiatives) Outlines management's plans to remediate the material weakness by updating processes and documentation for Sponsor Earn-Out liabilities valuation - Management is designing updated processes and controls and will maintain sufficient review documentation for assessing key assumptions related to Sponsor Earn-Out liabilities valuation to remediate the material weakness[121](index=121&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) This part covers other information, including legal proceedings, updated risk factors, equity sales, defaults, and Rule 10b5-1 trading arrangements [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) States that the company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business, though litigation can still impact operations[122](index=122&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, including new risks related to trade policies and the potential delisting of Class A common stock from the NYSE - New risk factors include potential material adverse effects from changes in U.S. and foreign government trade policies, such as tariffs, especially on imports from China, which could increase costs and decrease margins[124](index=124&type=chunk) - The company received a notice from the NYSE on March 7, 2025, regarding non-compliance with the **minimum $1.00 share price** listing requirement, posing a risk of delisting if compliance is not regained within six months[127](index=127&type=chunk) - Delisting from the NYSE could lead to reduced liquidity, limited market quotations, decreased analyst coverage, and impaired ability to raise future financing, severely diminishing the value of Class A common stock[128](index=128&type=chunk)[134](index=134&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities or use of proceeds during the reporting period - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[129](index=129&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[130](index=130&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company[131](index=131&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) Details changes in Rule 10b5-1 trading arrangements, including terminations and new plans for tax obligations [Rule 10b5-1 Trading Arrangements](index=38&type=section&id=Rule%2010b5-1%20Trading%20Arrangements) Discusses the termination of a CFO's 10b5-1 plan and the establishment of new plans by executive officers for tax-related stock sales - On March 4, 2025, the CFO, Jing Nealis, terminated a Rule 10b5-1 plan adopted in May 2024 for selling shares underlying vested stock options[132](index=132&type=chunk) - On March 28, 2025, several executive officers, including the CEO and CFO, entered into new Rule 10b5-1 plans for the sale of Class A common stock solely to satisfy minimum statutory withholding tax obligations arising from the vesting of Restricted Stock Units (RSUs)[133](index=133&type=chunk)[135](index=135&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, a Controlled Equity Offering Agreement, and certifications - The report includes exhibits such as the Certificate of Incorporation, Bylaws, Controlled Equity Offering Agreement, and certifications from the CEO and CFO[136](index=136&type=chunk) [Signatures](index=41&type=section&id=Signatures) Contains the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report's filing - The report is signed by Qichao Hu, Chief Executive Officer, and Jing Nealis, Chief Financial Officer, on April 30, 2025[140](index=140&type=chunk)

Financial Data and Key Metrics Changes - SES AI achieved a record revenue of $5.8 million in Q1 2025, indicating a strong start to the year [7][19] - The company expects full-year 2025 revenue guidance to be between $15 million to $25 million [20][49] - Gross margin for Q1 was reported at 79%, consistent with expectations, attributed to an asset-light business model [20][22] - The company concluded the quarter with a liquidity position of $240 million and no debt [22] Business Line Data and Key Metrics Changes - Revenue was primarily driven by contracts with automotive OEM customers for AI-enhanced lithium metal and lithium-ion batteries for EV applications [20] - The introduction of the Molecular Universe software and service platform aims to mass-produce material discovery and development services, which is the largest and most profitable revenue component [10][17] Market Data and Key Metrics Changes - The company is experiencing fierce global competition in the EV market and is adapting to new safety regulations [11] - There are currently over a dozen companies, including OEMs and battery companies, engaged in early access testing of the Molecular Universe platform [11][33] Company Strategy and Development Direction - SES AI is transitioning from a manufacturing-heavy model to a scalable software and service business model [16][17] - The launch of the Molecular Universe platform is expected to enhance the company's ability to deliver commercially practical solutions across all battery chemistries [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue guidance and emphasized the importance of the current year as foundational for future growth [49] - The company is focused on maintaining high margins while controlling costs and deploying capital efficiently [22][23] Other Important Information - The Molecular Universe platform will be launched on April 29, 2025, with a live demonstration planned [15][18] - The company is exploring various pricing structures for the Molecular Universe, including subscription models and on-prem deployment options [40][42] Q&A Session Summary Question: Can you remind us of what cell type, the chemistry, and the capacity of your SK facility? - The Chungju facility has two lines for large pouch cells and smaller UAM cells, with the capability to add equipment for cylindrical and prismatic cells [26] Question: Can you remind us of the performance benefits from SES's 2170s with your improved electrolyte? - SES's 2170 cells can achieve over 6.5% mPOWER with stable performance, unlike competitors that struggle with high silicon content [28] Question: What types of customers are you engaged with outside of your two main partners? - The company is engaging with major battery companies, car manufacturers, and chemical and electrical companies, with over a dozen early access users [33] Question: What is the rationale for the authorization of the share buyback? - The share repurchase program is seen as an efficient capital allocation tool that will not impact liquidity [43][44] Question: Is revenue going to be mostly back-end loaded? - The company does not want to provide a quarterly cadence but is confident in achieving its revenue guidance based on the existing pipeline [48][49] Question: How will success of the Molecular Universe be measured going forward? - Success will be measured by the revenue generated from the Molecular Universe platform [51] Question: What are the expected gross margins medium and long-term? - The gross margin will depend on the mix of services and products, with software and services expected to have margins above 80% [58]

Financial Data and Key Metrics Changes - The company achieved a record revenue of $5.8 million in Q1 2025, positioning itself on track to meet its full-year revenue guidance of $15 million to $25 million [5][13] - The gross margin for Q1 was reported at 79%, consistent with expectations, attributed to an asset-light business model [13][14] - The company ended the quarter with a strong liquidity position of $240 million and no debt, expecting to exit 2025 with over $200 million in liquidity [14][15] Business Line Data and Key Metrics Changes - Revenue in Q1 was primarily driven by contracts with automotive OEM customers for AI-enhanced lithium metal and lithium-ion batteries for EV applications [13] - The company is expanding its service offerings through the launch of the Molecular Universe software and service platform, which aims to mass-produce material discovery and development services [10][12] Market Data and Key Metrics Changes - The company is experiencing fierce global competition in the EV market, with new safety regulations prompting the need for innovative solutions [7] - There are currently over a dozen companies, including OEMs and battery manufacturers, engaged in early access testing of the Molecular Universe platform [7][10] Company Strategy and Development Direction - The company is transitioning from a capital expenditure-heavy manufacturing model to a scalable software and service business model [11][12] - The launch of the Molecular Universe platform is expected to significantly enhance the company's revenue potential by providing solutions applicable across all battery chemistries and markets [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue guidance for 2025 and emphasized the foundational nature of the current year for future growth [38] - The company aims to leverage its strong cash position to execute its vision and expand its commercial team to pursue greater opportunities [11][14] Other Important Information - The Molecular Universe platform will be launched on April 29, with a live demonstration planned to showcase its features and pricing structures [10][12] - The pricing structure for the Molecular Universe includes multiple tiers, offering both software subscriptions and on-premise deployment options for larger enterprises [31][32] Q&A Session Summary Question: Can you remind us of the cell type, chemistry, and capacity of your SK facility? - The Jeongju facility has two lines for large part cells and smaller UAM cells, with the capability to add equipment for cylindrical and prismatic cells [18] Question: What are the performance benefits from SCS's 2170s with your improved electrolyte? - The company's electrolyte enables stable performance for 2170 cells with high silicon content, achieving over 6.5 amp hours without gas issues [20] Question: Who are the potential customers for the Molecular Universe AI? - The initial version targets major battery companies, car manufacturers, and chemical and electrical companies, with over a dozen early access users already engaged [23] Question: What is the rationale for the share buyback authorization? - The share repurchase program is viewed as an efficient capital allocation tool, with no impact on the company's liquidity runway [33][34] Question: How will revenue ramp through the year? - The company expects stable revenue growth and is confident in achieving its guidance, with 2025 being a foundational year for significant growth in 2026 [38] Question: How will success of the Molecular Universe be measured? - Success will ultimately be measured by the revenue generated from the Molecular Universe platform [40] Question: What are the expected gross margins in the long term? - The gross margins will depend on the mix of services and products, with software and services expected to have margins above 80% [44]

Revenue Results - SES AI Corporation reported preliminary unaudited revenue results for Q1 2025, with estimates subject to finalization[4] - The financial information provided is preliminary and based on management's estimates as of the press release date[5] Financial Reporting Standards - The company emphasizes that preliminary estimates should not replace full financial statements prepared in accordance with GAAP[5]

Revenue and Financial Performance - Revenue for the year ended December 31, 2024 was $2.0 million, primarily from service-related contracts with OEMs [236]. - Total revenue for 2024 was $2,040,000, compared to no revenue in 2023 [293]. - Gross profit for 2024 was $1,288,000, with a cost of revenues of $752,000 [293]. - The company incurred net losses of $100.2 million and $53.4 million for the years ended December 31, 2024 and 2023, respectively [235]. - Net loss for 2024 was $100,185,000, compared to a net loss of $53,400,000 in 2023, indicating an increase in losses of 87.5% [293]. - The company reported a total comprehensive loss of $100,805,000 in 2024, compared to $53,762,000 in 2023 [293]. - Interest income for the year ended December 31, 2024 was $15.0 million, a decrease of $1.7 million from $16.7 million in 2023 [249]. Expenses - Cost of revenue for the year ended December 31, 2024 was $0.8 million, mainly attributable to personnel costs [238]. - Research and development expenses increased by $41.5 million, or 135.2%, to $72.1 million for the year ended December 31, 2024, compared to $30.7 million in 2023 [241]. - General and administrative expenses decreased by $9.1 million, or 19.1%, to $38.4 million for the year ended December 31, 2024, compared to $47.5 million in 2023 [247]. - Total share-based compensation expense for 2024 was $19.935 million, down from $20.649 million in 2023, a decrease of 3.4% [422]. - The company recorded stock-based compensation expense of $19.9 million in 2024, contributing to the net loss reported [258]. Cash and Investments - As of December 31, 2024, the company had total cash and cash equivalents of $128.8 million and short-term investments in marketable securities of $133.7 million [254]. - Cash provided by investing activities was $108.2 million for the year ended December 31, 2024, compared to a cash outflow of $32.7 million for 2023 [261]. - Net cash used in operating activities was $66.1 million for the year ended December 31, 2024, primarily due to a net loss of $100.2 million [258]. - The company had received but not yet earned 12 billion Korean won (approximately $8.1 million) as of December 31, 2024, disclosed as a noncurrent liability [387]. - The company had cash and cash equivalents of $128.8 million as of December 31, 2024, an increase from $85.7 million as of December 31, 2023 [378]. Liabilities and Obligations - Total liabilities rose to $51,475,000 in 2024 from $47,860,000 in 2023, an increase of 5% [291]. - The total contractual obligations as of December 31, 2024, amount to $46.5 million, with $33.6 million in purchase obligations and $12.9 million in operating lease obligations [264]. - The total future minimum lease payments under existing operating leases as of December 31, 2024, amounted to $10.562 million after imputed interest [392]. Research and Development - The company is focused on scaling up manufacturing processes to achieve commercialization in EVs and UAMs at a global scale [233]. - The company expects research and development expenses to remain consistent in 2025 compared to 2024 [241]. - Research and development credits totaled $8.575 million for the year ended December 31, 2024, compared to $23.065 million for the year ended December 31, 2023 [377]. - Research and development costs are expensed as incurred, including employee compensation, materials, and consultant payments [356]. Stock and Equity - As of December 31, 2024, the Company had 317,676,034 shares of Class A common stock and 43,881,251 shares of Class B common stock issued and outstanding [406]. - The total common stock available for future issuance as of December 31, 2024, is 76,795,708 shares [416]. - The SES AI Corporation 2021 Plan has 37,263,345 shares available for future issuance as of December 31, 2024 [419]. - The number of outstanding RSUs increased to 13,282,923 by December 31, 2024, from 6,359,474 at the end of 2023, a growth of 108.5% [423]. Foreign Currency and Risk Management - The company is exposed to foreign currency risks, particularly in China and South Korea, but engages in minimal transactions outside of its functional currency [275]. - The company has not hedged its foreign currency exposure but may consider doing so in the future [275]. - A 100 basis point increase in U.S. interest rates would decrease the fair value of short-term investments by approximately $0.5 million [274]. Compliance and Governance - The company’s financial statements are presented in conformity with U.S. generally accepted accounting principles [280]. - The company’s management is responsible for the financial statements, while the independent auditor provides an opinion based on the audit [281]. - The company’s audit included evaluating the accounting principles used and significant estimates made by management [283].

Financial Data and Key Metrics Changes - SES AI reported Q4 2024 revenue of $2 million, marking its first revenue milestone and a transition to a revenue-generating business [21] - The company achieved a gross margin of 63%, indicating a strong value proposition for its technology [22] - Operating expenses for Q4 were $30.4 million, primarily driven by R&D and administrative costs [22] - The liquidity position at the end of the quarter was $262.5 million, ensuring the ability to fund ongoing projects [23] - For the full year 2024, total cash usage was $78.3 million, below the previous guidance of $80 million to $95 million [23] Business Line Data and Key Metrics Changes - SES AI signed contracts totaling up to $10 million for developing AI-enhanced lithium-metal and lithium-ion batteries for EVs with two automotive OEM partners [9] - The company is expanding into Battery Energy Storage Systems (BESS), signing an MOU with AISPEX for up to $45 million [13] Market Data and Key Metrics Changes - The company is focusing on multiple markets, including EVs, drones, robotics, and BESS, which broadens its addressable market significantly [33] - The revenue outlook for 2025 is projected to be between $15 million and $25 million, driven by expanding partnerships and commercialization efforts [26] Company Strategy and Development Direction - SES AI is transitioning from a CapEx-heavy model to a CapEx-light model, focusing on selling AI models and core battery materials [18] - The company aims to leverage its AI technology and electrolytes to generate revenue earlier than anticipated and tap into adjacent verticals [18] - The strategy includes a focus on contract manufacturing to achieve high margins and expand its market presence [37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, emphasizing the importance of AI in driving growth and innovation [17] - The company is well-positioned for continued growth and disciplined investment in 2025, with a focus on financial discipline and strategic investments [27] Other Important Information - SES AI has made significant advancements in its AI models, enhancing battery performance and safety through improved data training [76] - The company is developing a subscription model for its AI solutions, which could provide ongoing revenue streams [47] Q&A Session Summary Question: What led to the shift in strategy? - The shift was motivated by the realization that the technology could be applied to multiple battery chemistries, expanding the addressable market significantly [33] Question: Can you provide details on the contract manufacturing economics? - The gross margin of 63% in Q4 was a mix of AI models and actual sales, with future margins expected to evolve based on volume and application [36] Question: How do you see the revenue opportunity for software versus hardware? - The company aims to transition to a high-margin software business while initially using hardware as a hook to attract customers [44] Question: What is the prognosis for selling high-silicon cells into automotive? - Both high-silicon and lithium-metal cells are being developed in parallel, with the company addressing OEMs that previously were not targeted due to form factor limitations [80]