QuantumScape(QS) - 2025 Q1 - Quarterly Report

Financial Performance - The company incurred a net loss of approximately $123.6 million for the three months ended March 31, 2025, with an accumulated deficit of approximately $3.5 billion since inception [128]. - The net loss attributable to common stockholders was $114.4 million in Q1 2025, a 5% improvement compared to a net loss of $120.6 million in Q1 2024 [159]. - Cash used in operating activities was $60.7 million in Q1 2025, compared to $57.9 million in Q1 2024, driven by a net loss and non-cash expenses [170][172]. - The company has not yet generated revenue and relies on equity financing to fund operations and capital expenditures [165]. Cash Flow and Resources - Cash and cash equivalents, along with marketable securities, totaled approximately $860.3 million as of March 31, 2025, down from $910.8 million at the end of 2024 [164]. - Cash provided by investing activities was $62.0 million in Q1 2025, primarily from the maturity of marketable securities, offset by purchases of securities and equipment [170][175]. - Cash provided by financing activities was $11.4 million in Q1 2025, mainly from the exercise of stock options, compared to $1.2 million in Q1 2024 [170][177]. - The company expects its cash resources to last into the second half of 2028, with a shelf registration statement allowing for an aggregate offering price of up to $1 billion [144]. - The company believes its cash resources will last into the second half of 2028, contingent on successful technology development and operational milestones [167]. Research and Development - Research and development expenses increased by 14% to $95.6 million in Q1 2025 from $83.8 million in Q1 2024, primarily due to higher depreciation and non-cash stock-based compensation [159][160]. - The company expects significant increases in research and development expenses as it ramps up engineering operations for solid-state lithium-metal batteries [151][160]. Product Development and Collaboration - The first commercial product, QSE-5, has a capacity of approximately 5 amp-hours, an energy density of over 800 Wh/L, and a fast-charging capability of 10% to 80% in less than 15 minutes [130]. - The company entered into a collaboration agreement with PowerCo, which includes an initial royalty fee of $130 million for the licensing of QSE-5 technology for automotive applications [141]. - The pilot line in San Jose, California is focused on increasing throughput and capability for manufacturing battery cells and separators [135]. - The company plans to improve the quality, consistency, and reliability of its cells through automation and process control [131]. - The automotive qualification process involves multiple sampling stages (A, B, and C samples) with timelines influenced by product development risks and OEM validation [138]. - The company is exploring opportunities in stationary storage and consumer electronics markets in addition to automotive applications [142]. Regulatory and Market Risks - Regulatory changes and trade tariffs may impact the company's ability to meet projected sales or margins, particularly with potential shifts in U.S. economic policy [147]. - There have been no material changes to the Company's market risk during the three months ended March 31, 2025 [183]. Accounting and Financial Reporting - The consolidated financial statements are prepared in accordance with U.S. GAAP, requiring significant judgment in estimates and assumptions affecting reported amounts [179]. - Critical accounting estimates are identified as those requiring complex judgments that could materially impact financial statements [180]. Administrative Expenses - General and administrative expenses decreased by 42% to $28.0 million in Q1 2025 from $48.1 million in Q1 2024, mainly due to a settlement related to litigation and reduced professional fees [159][161].