Core Viewpoint - The Amplify Lithium & Battery Technology ETF (BATT) has outperformed other ETFs in the lithium and battery sector, driven by a diversified approach that captures broader industrial trends and demand for battery energy storage systems (BESS) [1] Performance Comparison - As of February 13, 2026, BATT has increased by 14.5% year-to-date, outperforming the Global X Lithium & Battery Tech ETF (LIT) which is up 10.94%, and other mining-focused ETFs like iShares Lithium Miners and Producers ETF (ILIT) at 9.7%, Sprott Lithium Miners ETF (LITP) at 4.65%, and Themes Lithium & Battery Metal Miners ETF (LIMI) at 3.77% [1] Reasons for BATT's Outperformance - BATT's total ecosystem approach includes exposure across the battery value chain, from diversified miners to cell manufacturers and grid storage leaders, unlike LIT which is heavily concentrated in lithium mining and refining [1] - Significant weights in copper and nickel have contributed to BATT's performance, with copper prices reaching new highs due to AI-driven grid modernization [1] - The launch of Project Vault, a $12 billion U.S. strategic mineral reserve, has provided a valuation floor for the sector, acting as a buyer of last resort for battery metals [1] - The demand for BESS has surged, driven by the growth of AI data centers, with companies in BATT's portfolio reporting record shipments for stationary storage [1] Key Holdings Contributing to BATT's Performance - BHP Group Ltd. (BHP) - 7.62% weight, benefiting from rising nickel prices and steady copper demand [1] - Contemporary Amperex Technology (CATL) - 5.71% weight, dominating the lithium iron phosphate market for utility-scale storage [1] - Freeport-McMoRan Inc. (FCX) - 5.24% weight, a primary copper producer benefiting from AI-driven grid upgrades [1] - Tesla, Inc. (TSLA) - 4.77% weight, with its Megapack business contributing significantly to margins [1] - BYD Co. Ltd. (BYD) - 4.17% weight, maintaining high margins through vertical integration [1] Key Themes to Watch - The stationary storage market is emerging as a major performance driver, with a shift towards grid-scale batteries providing a growth narrative alongside the competitive EV market [1] - Diversified mining is proving to be a safer investment compared to pure-play lithium, allowing BATT to achieve double-digit gains amid lithium price volatility [1] - The impact of U.S. industrial policy, particularly Project Vault and tax rebate adjustments in China, is front-loading global demand and intensifying the battery arms race [1]

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Financial Data and Key Metrics Changes - For Q4 2025, the company reported net sales of $1.4 billion, a 16% increase year over year, with adjusted EBITDA of $269 million, up 7% year over year [4][9] - Full year 2025 results included net sales of $5.1 billion and adjusted EBITDA of $1.1 billion, meeting or exceeding previous outlook considerations [4][5] - The adjusted EBITDA margin decreased by approximately 150 basis points compared to last year, influenced by unfavorable foreign exchange and lower specialties margins [9] Business Line Data and Key Metrics Changes - Energy storage segment saw a 14% increase in full-year volumes to 235,000 tons LCE, with Q4 net sales up 23% year over year and adjusted EBITDA up 25% [19] - Ketjen's net sales increased by 14% year over year, with adjusted EBITDA growing 39%, driven by higher sales volumes [16] - Specialties business experienced a 5% increase in net sales but a 6% decline in adjusted EBITDA due to margin compression in lithium specialties [18] Market Data and Key Metrics Changes - Global lithium demand for 2025 was 1.6 million tons, up more than 30% year over year, with expectations for 2026 demand to reach 1.8-2.2 million tons, a 15%-40% increase [24] - Stationary storage demand grew over 80% in 2025, with significant growth in China, North America, and Europe [27] - European EV demand increased by 34%, while U.S. EV demand slowed due to the removal of consumer tax credits [25][26] Company Strategy and Development Direction - The company is focusing on cost and productivity improvements, targeting an additional $100 million-$150 million in 2026 [5][34] - Strategic decisions include idling operations at the Kemerton lithium hydroxide plant to improve financial flexibility and preserve optionality [6][33] - Investments in top-tier mining resources and exploration interests remain crucial to the company's strategy [7] Management's Comments on Operating Environment and Future Outlook - Management highlighted the need for differentiated pricing to cover higher costs in Western lithium supply chains compared to China [41] - The company anticipates continued growth opportunities at Greenbushes and Wodgina, with a focus on executing against market conditions [39] - The outlook for 2026 includes expectations for stable capital spending and potential for meaningful free cash flow if current lithium pricing persists [5][22] Other Important Information - The company closed the sale of its stake in the Eurocat joint venture and expects to close the sale of a majority stake in Ketjen, generating approximately $660 million in pretax proceeds [6][15] - The company ended 2025 with $1.6 billion in cash and expects to maintain an investment-grade credit profile [28] Q&A Session Summary Question: How should we think about volume growth beyond 2027? - Management indicated that while 2026 may see flat volumes, growth opportunities remain at Greenbushes and Wodgina, with potential investments needed based on market conditions [37][39] Question: How much higher is the cost structure at Kemerton compared to Chinese assets? - The cost difference is approximately $4-$5 per kilogram, with ongoing costs to maintain the idled state of Kemerton [41][55] Question: Can you comment on the closure of Chinese lithium capacity? - Management noted that about 30,000-50,000 tons of capacity came offline in 2025, influenced by regulatory actions and demand growth [44][46] Question: What is behind the decrease in Specialties adjusted EBITDA for 2026? - The decrease is attributed to lack of demand growth in certain markets and lower lithium specialties prices following previous peaks [48] Question: How does the company plan to approach investments in the current cycle? - The company plans to be more conservative with capital spending, focusing on smaller, incremental projects with quick returns while monitoring market conditions [52][53]