Solid Power Inc (SLDP) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...

• Revenue: Q1 revenue just under $6 million, primarily from BMW agreement.

• Operating Expenses: Q1 operating expenses were $31.7 million.

• Operating Loss: Q1 operating loss of $25.8 million.

• Net Loss: Q1 net loss of $21.2 million, or $0.12 per share.

• Liquidity: Ended Q1 with $379 million in cash, marketable securities, and long-term investments.

• Capital Expenditure (CapEx): $4.1 million in Q1, primarily for new electrolyte R&D lab.

• Share Repurchase: Repurchased 5 million shares for over $8 million.

• 2024 Revenue Guidance: Expected to be in the $20 million to $25 million range.

• 2024 Cash Investment Guidance: Total cash investment expected to be $100 million to $120 million.

• Warning! GuruFocus has detected 2 Warning Sign with SLDP.

Release Date: May 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Solid Power Inc (NASDAQ:SLDP) has expanded its electrolyte capabilities and continued strong execution on its 2024 goals, including advancements in cell designs and strengthening its presence in Korea.

• The company has successfully shipped its electrolyte to 10 potential customers outside of its existing joint development relationships, indicating growing interest and potential market expansion.

• Solid Power Inc (NASDAQ:SLDP) is making progress on its A2 cell design, aimed at improving cell performance and moving towards commercial solid-state technology.

• The company has established a strong collaboration with SK on R&D technology transfer and line installation, which will enhance development efforts across the U.S., Europe, and Asia.

• Solid Power Inc (NASDAQ:SLDP) maintains a strong liquidity position with $379 million in cash, marketable securities, and long-term investments, supporting its operations and strategic initiatives.

Negative Points

• Solid Power Inc (NASDAQ:SLDP) reported a significant operating loss of $25.8 million and a net loss of $21.2 million for the first quarter.

• The company experienced issues with thermal runaway in some of its A1 cells, although it is addressing these through minor changes in cell chemistry and design.

• There are ongoing challenges in battery technology development, which require continuous adjustments and optimizations in cell design and manufacturing processes.

• Solid Power Inc (NASDAQ:SLDP) is still in the process of completing its new electrolyte R&D lab, which is crucial for optimizing electrolyte production and reducing costs.

• The company's capital expenditures remain substantial, with $4.1 million invested in CapEx during the quarter, primarily for the new electrolyte R&D lab.

Q & A Highlights

Q: Can you provide details on the types of companies among the 10 potential partners you mentioned, and their market significance? A: John Van Scoter, CEO of Solid Power, explained that the potential partners include both battery OEMs and EV OEMs, with a majority being battery OEMs. He noted that these partners range from large to medium-sized market players, although he did not specify their total market share.

Q: What feedback have you received from the companies testing your electrolyte, and what industries are they in? A: John Van Scoter, CEO, mentioned that one customer is a major battery player in the EV market in Asia, and the other is an EV OEM also based in Asia. The feedback has been positive, with multiple iterations of testing and tweaking of the electrolyte to match their specific cell designs.

Q: How are the efforts to address the thermal runaway issues in your batteries progressing? A: John Van Scoter, CEO, stated that the issue affected only a few cells and that minor tweaks in chemistry and design, as well as manufacturing processes, are being implemented. These changes are part of an ongoing effort to enhance battery safety and performance.

Q: Is it too early to discuss financial expectations for 2025, particularly regarding cash burn and expense run rates? A: Kevin Paprzycki, CFO, indicated that detailed guidance for 2025 would be provided later in the year at an investor event. He reassured that the company's capital expenditure needs are expected to decrease, maintaining a consistent message about reduced spending following major investments in their facilities.

Q: Can you update us on the collaboration with BMW, especially regarding the development of a prototype car? A: John Van Scoter, CEO, shared that the collaboration with BMW is strengthening, with BMW engineers working closely with Solid Power's team. He noted that BMW's facility in Germany is expected to be operational in 2025, but there were no new updates on the prototype car development.

Q: What has been the market reception in Korea following your expansion there? A: John Van Scoter, CEO, described the reception as very positive, noting that establishing a presence in Korea has led to enhanced engagement with local partners, suppliers, and government agencies. The company has already hired key personnel to strengthen its team in Korea.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.