Enovix (US:ENVX)2025-11-05 22:01Revenue and Sales Performance - Revenue for Q3 2025 was $8.0 million, representing an increase of $3.7 million or 85% compared to Q3 2024, driven by strong demand for defense products [176]. - Revenue for the fiscal quarter ended September 28, 2025 was $8.0 million, an increase of $3.7 million or 85% compared to $4.3 million for the same quarter in the prior year, primarily driven by sales to South Korean defense contractors [201]. - Revenue for the fiscal year-to-date ended September 28, 2025 was $20.6 million, a 54% increase from $13.4 million in the prior year, driven by sales to South Korean defense contractors [211]. - Over $20 million of products were shipped to customers in the defense and industrial markets for the fiscal year-to-date ended September 28, 2025 [175]. Research and Development - Research and development expenses are expected to increase as Enovix ramps up engineering operations and hires additional personnel to support product development [194][196]. - Research and development expenses for the fiscal quarter ended September 28, 2025 were $28.2 million, up $4.0 million or 16% from $24.2 million in the prior year, attributed to increased salaries and depreciation [203]. - Research and development expenses for the fiscal year-to-date ended September 28, 2025 were $82.3 million, down $19.8 million or 19% from $102.1 million in the prior year, mainly due to reduced depreciation and lower headcount [213]. Financial Performance - Net loss for the fiscal quarter ended September 28, 2025 was $53.8 million, an increase of $31.1 million or 138% from a net loss of $22.6 million in the prior year [210]. - Total operating expenses for the fiscal year-to-date ended September 28, 2025 were $136.9 million, a decrease of $68.2 million or 33% from $205.1 million in the prior year, primarily due to the absence of restructuring costs [210]. - Interest expense surged to $11.8 million for the fiscal quarter ended September 28, 2025, a significant increase of $10.0 million or 585% compared to $1.7 million in the prior year, largely due to a one-time charge related to convertible senior notes [207]. - Interest income for the fiscal year-to-date ended September 28, 2025 was $7.4 million, a decrease of $2.3 million or 24% compared to $9.7 million for the same period in 2024 [219]. - Interest expense increased by $10.1 million or 200% to $15.2 million for the fiscal year-to-date ended September 28, 2025, primarily due to a one-time charge of $9.2 million related to Warrants issued [220]. Capital and Financing Activities - Enovix issued $360.0 million in 2030 Convertible Senior Notes, with net proceeds of $348.6 million intended for general corporate purposes and potential acquisitions [183]. - The company issued $360.0 million aggregate principal amount of 2030 Convertible Senior Notes with an interest rate of 4.75% during the fiscal quarter ended September 28, 2025 [228]. - The company holds $172.5 million of 2028 Convertible Senior Notes at an annual interest rate of 3.00% and $360.0 million of 2030 Convertible Senior Notes at an annual interest rate of 4.75%, accounting for approximately 98% of total debt [252]. - The company repurchased 5,437,556 shares of common stock for $58.4 million for the fiscal year-to-date ended September 28, 2025, with $1.6 million remaining under the Repurchase Plan [229]. Cash Flow and Investments - Net cash used in operating activities was $68.3 million for the fiscal year-to-date ended September 28, 2025, compared to $92.7 million for the same period in 2024, reflecting a decrease of $24.4 million [233][236]. - Net cash used in investing activities was $339.2 million for the fiscal year-to-date ended September 28, 2025, primarily due to $370.1 million in short-term investment purchases [237]. - Net cash provided by financing activities was $470.7 million for the fiscal year-to-date ended September 28, 2025, significantly higher than $44.2 million for the same period in 2024 [240][242]. - As of September 28, 2025, the company had cash and short-term investments totaling $560.8 million and an accumulated deficit of $942.8 million [224]. - As of September 28, 2025, the company had cash, cash equivalents, restricted cash, and investments totaling $650.3 million [251]. Strategic Focus and Market Position - The company is focused on five strategic market sectors: Smartphone, IoT, Computing, Defense, and Electric Vehicles [178]. - Enovix's commercialization strategy aims to establish the AI-1™ battery products as the baseline design for hardware platforms, facilitating broader adoption across device makers [180]. - The AI-1™ smartphone battery achieved the highest energy density reported for a smartphone battery, validated by an independent testing firm [176][185]. - Enovix delivered over 1,000 AI-1™ battery packs to its lead customer and samples to nine other smart eyewear OEMs and ODMs, with product launches expected in 2026 [174][181]. Other Financial Metrics - Selling, general and administrative expenses decreased by $0.6 million or 3% to $20.2 million for the fiscal quarter ended September 28, 2025, primarily due to a reduction in stock-based compensation expenses [204]. - Other income, net for the fiscal year-to-date ended September 28, 2025 was $1.5 million, an increase of $3.0 million compared to a loss of $1.5 million for the same period in 2024, mainly due to a one-time import duty forgiveness of $2.4 million [221][222]. - Income tax benefit decreased by $1.1 million or 43% to $1.4 million for the fiscal year-to-date ended September 28, 2025, primarily due to lower tax benefits from losses in certain foreign jurisdictions [223]. Risk Management - The company does not believe it is exposed to material interest rate risk due to its borrowing activities [252]. - A hypothetical 10% adverse change in foreign currency exchange rates would not have a material effect on the company's financial condition or results of operations [254]. - The company has not entered into derivative or hedging transactions for foreign currency risks but may do so in the future as international operations grow [255].