QuantumScape(QS) - 2024 Q1 - Quarterly Results

QuantumScape Q1 2024 Shareholder Letter Progress on 2024 Goals & Alpha-2 Prototype The company achieved its first 2024 goal by shipping energy-dense Alpha-2 prototype battery cells, demonstrating strong performance for EV applications - Achieved the first of four key goals for 2024 by starting shipments of six-layer Alpha-2 prototype battery cells to automotive customers on March 27[2][3] - The Alpha-2 prototype is the core of the first commercial product, QSE-5, and is more energy-dense than the earlier 24-layer A0 prototype due to higher-loading cathodes and the FlexFrame cell format[3] - Alpha-2 prototypes demonstrate high discharge power, capable of up to 10C rates, which in a 100 kWh pack would be nominally equivalent to over 1,000 horsepower[9] - The cells have demonstrated the ability to fast charge from 10% to 80% state of charge in less than 15 minutes, meeting the target for the QSE-5 commercial cell[12] - The company has reduced the externally applied pressure required for cell operation to 0.7 atm, which is within the range of conventional EV battery pack designs and practical for real-world applications[16] Production Outlook The company is scaling manufacturing, ramping up the Raptor process for Alpha-2 and QSE-5 samples, and preparing the Cobra process for higher-volume production - The Raptor process ramp-up will accelerate downstream cell assembly development, allow for more extensive cell testing, and enable the start of QSE-5 B0 sample production[20] - Raptor serves as a learning platform for the next-generation Cobra process, which is designed for higher-volume QSE-5 prototype production in 2025[22] - Downstream cell assembly processes are being streamlined by simplifying the bill of materials, consolidating process steps, and increasing automation[21] Financial Outlook & Position QuantumScape reported a Q1 2024 GAAP net loss of $120.6 million, maintained 2024 guidance, and ended with $1.01 billion liquidity, extending its cash runway into H2 2026 Q1 2024 Financial Metrics | Metric | Q1 2024 (in millions) | | :--- | :--- | | Capital Expenditures | $14.1 | | GAAP Operating Expenses | $131.9 | | GAAP Net Loss | $120.6 | | Adjusted EBITDA Loss | $76.2 | Full-Year 2024 Guidance | Metric | Full-Year 2024 Guidance (in millions) | | :--- | :--- | | Capital Expenditures | $70 - $120 | | Adjusted EBITDA Loss | $250 - $300 | - The company ended Q1 with $1.01 billion in liquidity and expects its cash runway to extend into the second half of 2026[24] Strategic Outlook The company's strategy focuses on commercializing its solid-state lithium-metal battery for EVs, leveraging technology, partner collaboration, and disciplined execution - The company's primary goal is to bring its first commercial solid-state lithium-metal battery cell to the electric vehicle market[25] - The strategy is based on three pillars: differentiated technology, close customer engagement, and methodical execution of milestones[25][26] Financial Statements (Unaudited) Unaudited financial statements for Q1 2024 detail the company's financial position, operations, and cash flows, including $1.46 billion in total assets Condensed Consolidated Balance Sheets As of March 31, 2024, total assets were $1.46 billion, total liabilities $204.3 million, and total stockholders' equity $1.26 billion | Balance Sheet Item | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Total current assets | $1,045,035 | $1,083,517 | | Total assets | $1,463,978 | $1,501,978 | | Total current liabilities | $100,673 | $57,095 | | Total liabilities | $204,316 | $161,801 | | Total stockholders' equity | $1,257,872 | $1,338,407 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2024 GAAP net loss was $120.6 million, or ($0.24) per share, an increase from Q1 2023 due to higher operating expenses | Income Statement Item | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Research and development | $83,847 | $76,941 | | General and administrative | $48,054 | $33,037 | | Total operating expenses | $131,901 | $109,978 | | Loss from operations | ($131,901) | ($109,978) | | Net loss | ($120,628) | ($104,631) | | Basic and Diluted net loss per share | ($0.24) | ($0.24) | Condensed Consolidated Statements of Cash Flows Q1 2024 saw net cash used in operations of $57.9 million, net cash provided by investing activities of $106.5 million, and a $49.8 million increase in cash | Cash Flow Item | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($57,945) | ($62,319) | | Net cash provided by investing activities | $106,499 | $64,086 | | Net cash provided by financing activities | $1,243 | $4,050 | | Net increase in cash | $49,797 | $5,817 | Non-GAAP Financial Measures The company reconciles GAAP net loss to Adjusted EBITDA, a non-GAAP measure, reporting a Q1 2024 Adjusted EBITDA loss of $76.2 million Reconciliation to Adjusted EBITDA | Reconciliation Item (in thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net loss attributable to Common Stockholders | ($120,648) | ($104,647) | | Stock-based compensation | $19,287 | $37,990 | | Litigation settlement accrual and legal fees, net | $24,455 | — | | Depreciation and amortization expense | $11,983 | $9,505 | | Adjusted EBITDA | ($76,176) | ($62,483) | - Adjusted EBITDA is defined as net loss before interest, non-controlling interest, revaluations, stock-based compensation, depreciation, and other non-recurring charges, and is used to measure core operating performance[32] Forward-Looking Statements This section contains forward-looking statements about technology development and financial projections, highlighting risks like manufacturing scale-up challenges and supply chain disruptions - The letter contains forward-looking statements regarding future battery development, performance, and financial forecasts, which are based on current management expectations[35] - Key risks include significant challenges in scaling up production, potential delays in acquiring and operating new manufacturing equipment, cost overruns, and the ability to meet technical milestones required for commercialization[36]