Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Solid Power Inc (SLDP, Financial) increased electrolyte sample shipments to potential customers, receiving encouraging feedback.
- The company made strong progress with key partners like SK On, completing the first milestone under their R&D license agreement.
- Solid Power Inc (SLDP) extended its Joint Development Agreement (JDA) with BMW, demonstrating significant advancements in cell design and performance.
- The company expanded its team in Korea, enhancing business development capabilities and strengthening relationships in the Korean and Japanese battery markets.
- Solid Power Inc (SLDP) maintained a strong liquidity position with $358.8 million of total liquidity as of June 30, 2024.
Negative Points
- Solid Power Inc (SLDP) reported a significant operating loss of $26.9 million and a net loss of $22.3 million for Q2 2024.
- The company reduced its 2024 revenue guidance to a range of $16 million to $20 million due to slower uptake in electrolyte development and revised accounting treatments.
- Operating expenses were high at $32 million, driven by increased production costs and labor associated with cell and electrolyte development.
- The uptake in electrolyte development has been slower than originally forecasted, impacting expected revenues for the year.
- BMW has paused future deliveries of cells for the demo car program as Solid Power Inc (SLDP) progresses with its development program.
Q & A Highlights
Q: Just on the second point you made on the revenue guidance reduction, the slower uptake in electrolyte development. Is that just broadly kind of a lagging indicator in terms of how OEMs are feeling about EVs at the moment? Or is there something kind of a deeper kind of thought around that?
A: (John Van Scoter, President, Chief Executive Officer, Director) Good day, Chris. I think I would credit it more to just being a very early stage of the market where we started the year, we looked into the back half and thought some of the early players would be taking some measurable quantities in the second half. That really hasn't materialized thus far, but it's not unusual for a market that is so nascent as the ASSB market is. So we look forward to updating and improving it as we go forward. But that's the way it looks to us right now.
Q: The BMW JDA has been extended a couple of times. Is it normal for there to be a pause in A1 deliveries as you reset the agreement to a longer date? Or is it that the A2 cell was the next thing anyway, so there's nothing to read into that?
A: (John Van Scoter, President, Chief Executive Officer, Director) I think your summary in the latter case is correct. Both companies are very pleased with the progress at the module level with the A1 work. With A2 really imminent, the mutual decision was to pause the current cell deliveries and refocus around the performance improvement we aim to sell later this year.
Q: In the past quarter or two, you've talked a little bit more about OEMs beyond the two plus SK. Has the pipeline for your products grown larger over the last few months?
A: (John Van Scoter, President, Chief Executive Officer, Director) Yes, the pipeline is continuing to grow. We had our objective to sample as many as 15, and we're over 10 now. Equally important, we've had a lot of multiple sampling to existing potential customers within this period. Some of them are sampling five or six times as we've gone through the last 90 days. So, the amount of interaction we've had with the folks we've been sampling since the beginning of the year is as important as the sheer number.
Q: Are these the same companies you mentioned last quarter, and has there been any progress since then as far as either coming to agreements or further interest in your technology?
A: (John Van Scoter, President, Chief Executive Officer, Director) Yes, we have added additional new customers in the sampling program since the last call. The ones we had been sampling prior to that have also received multiple samples, indicating strong interest and progress.
Q: Can you provide more details on the financial impact of the revised revenue guidance?
A: (Linda Heller, Chief Financial Officer, Treasurer) We are reducing our 2024 revenue guidance to be in the range of $16 million to $20 million. This revision is due to the accounting treatment of the SK agreements, where a portion of the originally projected revenue will be recognized in 2025, and the slower uptake in electrolyte development. However, this does not impact our long-range plan or the cash runway necessary for commercialization of our technology.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
