QuantumScape(QS) - 2024 Q4 - Annual Report

Financial Performance - QuantumScape Corporation incurred a net loss of approximately $525.2 million for the year ended December 31, 2024, with an accumulated deficit of approximately$3.4 billion since inception [262]. - The net loss for 2024 was $477.9 million, a$32.8 million (7%) increase from the net loss of $445.1 million in 2023 [291]. - Total operating expenses for 2024 were$525.2 million, an increase of $46.2 million (10$274.6 million, compared to $240.0 million in 2023 [303]. - Cash and cash equivalents, along with marketable securities, amounted to approximately$910.8 million as of December 31, 2024, down from $1.1 billion in 2023 [296]. Revenue and Financing Activities - During the year ended December 31, 2024, QuantumScape sold 24.9 million shares of Class A Common Stock for approximately$128.5 million in proceeds, net of issuance costs [276]. - The company completed an underwritten public offering of 37.5 million shares of Class A Common Stock in August 2023, raising approximately $288.2 million, net of issuance costs [276]. - Cash provided by financing activities for the year ended December 31, 2024, was approximately$128.5 million from the ATM offering and $20.1 million from stock options and employee stock purchase plan [314]. - For the year ended December 31, 2023, cash provided by financing activities included$288.2 million from the August 2023 Public Offering and $14.0 million from stock options and employee stock purchase plan [315]. Research and Development - The company anticipates significant increases in research and development expenses as it ramps up engineering operations to meet automotive cost targets [282]. - Research and development expenses increased by$35.0 million (10%) in 2024 compared to 2023, primarily due to personnel costs and depreciation [291]. General and Administrative Expenses - General and administrative expenses are expected to rise as QuantumScape prepares for commercialization and expands its supporting systems [284]. - General and administrative expenses rose by $11.2 million (9$130 million, aimed at industrializing the solid-state lithium-metal battery technology [273]. - QuantumScape's pilot line in San Jose, California, is focused on increasing throughput and capability, essential for scaling up battery cell manufacturing [268]. Cash Flow and Resources - The company expects its cash resources to last into the second half of 2028, contingent on successful technology development and operational milestones [300]. - Cash provided by investing activities in 2024 included $1.5 billion from the maturity and sale of marketable securities [310]. - The company has a finance lease commitment resulting in net cash payments of$5.3 million in the next twelve months and $39.0 million thereafter [313]. Market and Economic Conditions - The company has experienced increases in prices of raw materials, components, and labor costs due to inflation, but does not believe it has materially impacted operations to date [326]. - The company has not had material exposure to foreign currency fluctuations and has not hedged such exposure, although it may consider doing so in the future [327]. Accounting and Financial Reporting - The company’s accounting policies are prepared in accordance with U.S. GAAP, requiring judgment in making estimates that could materially impact financial statements [316]. - The company considers certain accounting estimates critical for understanding financial results due to their complexity and the subjective nature of management judgments involved [317]. - The fair values of performance-based awards are estimated using a Monte Carlo simulation model, which requires assumptions about expected term, volatility, and cost of equity [320]. - The company recognizes stock-based compensation expense based on the probability assessment of performance conditions, which may lead to significant fluctuations in recognized expenses [322].