Revenue Performance - Revenue for the three months ended June 30, 2025, decreased by $1.7 million, or 63%, to $1.0 million from $2.7 million in the same period of 2024[117] - Product development contract revenue fell by $1.7 million, or 63%, from $2.7 million for the three months ended June 30, 2024, to $1.0 million for the same period in 2025, primarily due to funding availability and milestone completion timing[119] - Revenue decreased by $3.4 million, or 56%, from $6.2 million in the first half of 2024 to $2.7 million in the first half of 2025[130] - Product development contract revenue decreased by $0.9 million, or 24%, from $3.6 million in the first half of 2024 to $2.7 million in the first half of 2025[131] - The company expects future revenue from product development contracts to fluctuate based on the timing of new contracts and the completion of existing ones[119] Customer and Market Strategy - The sales cycle for the company's products is anticipated to be between 12 and 18 months, or even longer, based on interactions with potential customers[107] - The company plans to begin generating revenues from commercial customers in 2025, with modest revenue growth expected throughout 2026[107] - The initial customer base is expected to include innovators and early adopters in various industries, including industrial manufacturing and defense[107] Financial Position and Liquidity - The company raised approximately $60.7 million in gross proceeds from the sale of Common Stock and warrants during the fourth quarter of 2024 and the first half of 2025[112] - The company believes it has sufficient liquidity to operate for at least the next 12 months without needing to raise additional capital[112] - Cash, cash equivalents, and marketable securities were $62.7 million as of June 30, 2025, up from $40.1 million as of December 31, 2024[143] - The company had an accumulated deficit of approximately $475.6 million as of June 30, 2025[143] - The company may require additional capital for acquisitions or operational needs, which could lead to dilution of existing equity holders if raised through equity financing[151] Operating Expenses and Cash Flow - Total operating expenses increased by $0.6 million, or 7%, from $8.5 million in Q2 2024 to $9.1 million in Q2 2025[121] - Cost of revenue decreased by $0.1 million, or 17%, from $0.6 million in Q2 2024 to $0.5 million in Q2 2025, primarily due to lower labor and material expenses[122] - Research and development expenses increased by $0.8 million, or 33%, from $2.3 million in Q2 2024 to $3.1 million in Q2 2025, driven by labor-related expenses for product testing and enhancements[123] - The company reported a net cash used in operating activities of $12.8 million for the six months ended June 30, 2025, a decrease of $0.2 million compared to $13.0 million in the same period of 2024[153] - The total net decrease in cash and cash equivalents was $(11.0) million for the six months ended June 30, 2025, compared to an increase of $2.7 million in the same period of 2024, representing a 510% decline[152] Investment and Financing Activities - Net cash used in investing activities increased by $48.9 million to $(33.1) million for the six months ended June 30, 2025, primarily due to $33.0 million in purchases of marketable securities[154] - The company generated $34.9 million in net cash from financing activities during the six months ended June 30, 2025, largely from the sale of Common Stock and exercise of warrants[155] Strategic Focus and Challenges - The company is focused on enhancing its AI/ML Foundational Technology and related products to respond to evolving customer demands and competitive threats[114] - The company plans to focus on AI/ML foundational technology and related products, suspending hardware product development[147] - The company has U.S. government revenue-generating contracts related to its AI/ML Foundational Technology and has met all development milestones associated with these contracts[108] - The company’s ability to commercialize products and generate revenue is critical, as delays could adversely affect financial performance[150] - If the company cannot secure additional financing, it may face significant operational challenges and could be unable to continue business operations[151] - The company’s cash flow management strategies are under continuous review to adapt to market conditions and operational needs[150] - The company is classified as an "emerging growth company" and has opted to take advantage of the extended transition period for new accounting standards[157] - The company has taken steps to manage cash usage, including conducting 2023 reductions in force (RIFs) to improve financial conditions[150]
Sarcos Technology and Robotics (STRC) - 2025 Q2 - Quarterly Report