Enovix Corp

Enovix Corporation is a global high-performance battery company specializing in the design, development, manufacturing, and commercialization of advanced Lithium-ion (Li-ion) batteries, particularly those with proprietary silicon-anode architectures [Item 1]. These batteries are engineered to deliver higher energy density and performance, especially in space-constrained devices, by enabling the use of 100% active silicon in the anode, which historically presented challenges due to swelling and cracking in conventional battery designs [Item 1]. The company's mechanical design addresses these issues by accommodating silicon's swelling and applying pressure to alleviate cracking, thereby enhancing safety, cycle life, and overall performance [Item 1]. Enovix targets key markets including smartphones, smart eyewear, defense, industrial, and emerging edge-AI applications, where demand for higher energy density, compact, and always-on devices is growing [Item 1].

The company's core business model revolves around generating revenue from the sale of batteries and battery pack products, referred to as "Product Revenue" [Item 7]. Revenue recognition occurs when performance obligations are satisfied, typically upon transfer of control of goods, which can be at shipment, delivery, or customer acceptance for customized products [Item 7]. Enovix has transitioned from a horizontal business strategy, serving numerous customers with standard batteries, to a vertical strategy, focusing on a smaller group of large customers requiring custom cells, believing this offers a more efficient path to scale and optimized battery performance for its target applications [Item 1].

Enovix's product portfolio is anchored by its AI-1™ battery platform, a unified silicon-anode architecture designed for high-performance consumer electronics and defense applications [Item 1]. This platform is specifically developed for AI-enabled smartphones, smart eyewear, and other edge-AI devices that demand significantly higher total energy storage and power for local AI functions [Item 1]. In the reported fiscal year, an independent testing laboratory confirmed the AI-1™ smartphone battery achieved a volumetric energy density of 935Wh/L, surpassing a leading silicon-doped commercially available smartphone battery by 12% [Item 7]. Additionally, through the 2023 acquisition of Routejade, Inc. and a further acquisition in 2025 from SolarEdge, the company also produces conventional Li-ion batteries, including silicon-doped graphite solutions, for wearables, medical devices, headsets, activity trackers, and defense and industrial equipment [Item 1]. These offerings include the Power Disk (PD) series for healthcare and IoT, Flexible Lithium-ion Polymer Battery (FLPB) and Asymmetric Designed Battery (ASDB) series for wearables and medical applications, and the Superior Lithium-ion Polymer Battery (SLPB) series for high-power applications in medical, industrial, aviation, and defense sectors [Item 1].

For the fiscal year ended December 28, 2025, Enovix reported total revenue of $31.821 million [Item 7]. The cost of revenue was $25.716 million, resulting in a gross profit of $6.105 million [Item 7]. This translates to a gross margin of approximately 19.19% ($6.105 million / $31.821 million). Operating expenses totaled $183.359 million, comprising $110.331 million in research and development and $73.028 million in selling, general and administrative expenses [Item 7]. The company reported a loss from operations of $(177.254) million [Item 7]. Other income (expense), net, amounted to $19.335 million, which included a $21.832 million change in fair value of common stock warrants, a $4.761 million gain on bargain purchase of assets, $12.998 million in interest income, and $(21.597) million in interest expense [Item 7]. The net loss for the period was $(156.607) million, with a net loss attributable to Enovix of $(156.741) million [Item 7]. Diluted EPS was $(0.75) [Item 8]. As of December 28, 2025, cash and cash equivalents stood at $106.014 million, with total current assets of $542.210 million [Item 8]. Total liabilities were $604.964 million, including long-term debt, net, of $519.271 million [Item 8]. The accumulated deficit was $(977.827) million [Item 8]. Net cash used in operating activities was $(95.291) million, and net cash used in investing activities was $(538.269) million, while net cash provided by financing activities was $467.384 million [Item 7].

Comparing fiscal year 2025 to fiscal year 2024, revenue increased by $8.747 million, or 38%, from $23.074 million to $31.821 million [Item 7]. This growth was primarily driven by higher shipment volumes to South Korean defense contractors, contributing $7.3 million to the increase, and to industrial and consumer electronics customers [Item 7]. Gross profit saw a significant improvement, moving from a loss of $(2.045) million in 2024 to a profit of $6.105 million in 2025, representing a 399% change [Item 7]. Research and development expenses decreased by $14.175 million, or 11%, from $124.506 million to $110.331 million, largely due to a $23.5 million decrease in depreciation expense from Fab1 decommissioning, partially offset by increased R&D spending in Malaysia [Item 7]. Selling, general and administrative expenses decreased by $1.283 million, or 2%, from $74.311 million to $73.028 million, mainly due to lower stock-based compensation and reduced U.S. headcount, partially offset by higher legal fees and Malaysian SG&A expenses [Item 7]. Restructuring costs, which were $41.807 million in 2024, were absent in 2025 [Item 7]. Interest expense increased by $14.810 million, or 218%, from $6.787 million to $21.597 million, primarily due to a one-time charge of $9.2 million related to warrants issued to 2028 Convertible Senior Notes holders and higher interest from additional convertible senior notes [Item 7].

During fiscal year 2025, Enovix launched the AI-1™ product platform, with its smartphone battery achieving a volumetric energy density of 935Wh/L, exceeding a leading silicon-doped competitor by 12% [Item 7]. The company delivered over 1,000 AI-1™ battery packs to a lead smart eyewear customer and samples to nine additional OEMs and ODMs [Item 7]. Manufacturing readiness was advanced with Fab2 in Malaysia passing an ISO 9001 audit and completing initial customer audits, alongside consistent gains in yield and throughput [Item 7]. In South Korea, the company integrated acquired manufacturing assets, expanded floor space, and increased coating capacity, while also completing internal UN38.3 certification for its first AI-1 smartphone battery [Item 7]. Financially, Enovix completed a warrant dividend in July 2025, generating $224.2 million in net proceeds [Item 7]. In September 2025, it issued $360.0 million of Convertible Senior Notes due 2030, with net proceeds of $348.8 million [Item 7]. The company also repurchased 5,437,556 shares of common stock for $58.4 million under a Board-approved repurchase plan [Item 7].

Enovix anticipates that its spending in cost of revenues and operating expenses will continue to increase in fiscal year 2026 as it ramps up its Fab2 operations [Item 7]. The company expects to meet its longer-term future cash requirements and obligations through a combination of available cash, cash equivalents, investments, future debt financings, projected revenues, and access to other public or private equity offerings and potential strategic arrangements [Item 7]. Management believes its existing cash, cash equivalents, and investments will be sufficient to meet funding requirements for at least the next twelve months from the filing date [Note 1].

A major growth area for Enovix is the AI-1™ product platform, designed for AI-enabled smartphones, smart eyewear, and other emerging edge-AI devices that require significantly higher total energy storage and power [Item 1]. The AI-1™ smartphone battery has demonstrated a volumetric energy density of 935Wh/L, surpassing a leading silicon-doped commercially available smartphone battery by 12% [Item 7]. The company delivered AI-1™ battery samples to leading smartphone OEM customers for formal product qualification and expanded sampling to nine additional OEMs and ODMs in the smart eyewear market [Item 7]. Some of these smart eyewear OEMs and ODMs are expected to launch products in 2026, aligning with the anticipated growth of AI-enabled smart eyewear [Item 7]. Enovix views the smart eyewear market as a compelling near-term expansion opportunity due to the alignment of its high energy density architecture with the product requirements of compact, always-on devices with AI workloads [Item 7].

In defense and industrial markets, Enovix continues to support growing customer demand through expanded production capabilities and increased shipments from its South Korea operations [Item 7]. The company believes its products offer a strong competitive advantage for customers prioritizing higher energy density, extended flight time, and supply-chain diversification, particularly for drone applications [Item 7]. In April 2025, Enovix acquired battery cell manufacturing assets in South Korea for $10.0 million, which is expected to further expand its manufacturing footprint, expedite scaled production, and better position it to meet growing demand in the defense industry [Item 7, Note 3].

Operationally, Enovix is focused on manufacturing execution, operational efficiency, and capacity planning to support commercialization efforts [Item 7]. Fab2 in Malaysia successfully passed an ISO 9001 audit and completed initial audits with various customers, with consistent gains in yield and throughput [Item 7]. In South Korea, the company integrated acquired manufacturing assets, expanded floor space, and increased coating capacity [Item 7]. The lease for the Fab2 manufacturing facility is scheduled to expire in July 2026, and while renewal discussions are ongoing, management is also evaluating facility purchase and alternative manufacturing site options for long-term operational continuity and future growth [Item 7]. The company expects its factory expenses to increase as it continues to ramp up Fab2 manufacturing operations [Item 7].

Regarding capital allocation, Enovix purchased $18.2 million in property and equipment during fiscal year 2025 and expects to continue increasing these purchases in the near future to acquire battery manufacturing equipment and support the build-out of its manufacturing facilities [Item 7]. In February 2026, the Board of Directors authorized an additional share repurchase program of up to $75 million of common stock, providing flexibility in capital allocation [Note 21]. The company intends to use the remaining net proceeds of $348.8 million from the September 2025 issuance of $360.0 million Convertible Senior Notes due 2030 for working capital and general corporate purposes, including potential future acquisitions [Item 7, Note 9].

The company's long-term financial model assumes both organic expansion and partnerships with other battery companies [Item 1A]. Failure to achieve these partnering goals would necessitate purely organic expansion, requiring additional capital and potentially impacting the speed of revenue ramp and profitability [Item 1A]. It could also affect the ability to service customers requiring second sources for supply [Item 1A]. Furthermore, if partnerships are achieved but not on assumed financial terms, it could impact financial performance [Item 1A].

Enovix faces material risks including the need to continuously improve energy density, cycle life, fast charging, capacity roll-off, and gassing metrics to maintain competitiveness, which is a difficult undertaking [Item 1A]. The company relies on a new and complex manufacturing process, and achieving volume production involves significant uncertainty regarding operational performance, yield, and costs [Item 1A]. Failure to successfully scale manufacturing facilities to meet demand, improve productivity, or bring additional facilities online could prevent the achievement of profitability targets and negatively impact the business [Item 1A]. Controlling operational costs and component costs for lithium-ion battery cells is crucial, and inaccurate cost reduction forecasts could adversely affect profitability margins [Item 1A]. Reliance on a manufacturing agreement with Malaysia-based YBS International Berhad for facilities, procurement, and personnel needs exposes the company to risks of delays or disruptions [Item 1A]. International operations, including manufacturing in Malaysia, South Korea, and India, expose Enovix to operational, financial, and regulatory risks, as well as geopolitical tensions and changes in trade policies [Item 1A]. Disruptions in the supply of critical components and equipment from third-party suppliers could delay production and harm the business [Item 1A]. Increases in raw material costs and supply disruptions from global market and geopolitical conditions could raise product costs and adversely affect results [Item 1A]. Lengthy sales cycles, unpredictable safety risks, and specific provisions in defense and other customer contracts, including unlimited damages clauses, may negatively impact customer acquisition and retention [Item 1A]. The company has significant customer concentration, with one South Korean defense subcontractor accounting for approximately 64% of total revenue in fiscal year 2025 [Note 2]. The loss or reduction of business from any significant customer could materially decline revenue and cash flows [Item 1A]. Failure of batteries to perform as expected, or unanticipated safety problems, could lead to design losses, delayed deliveries, product recalls, significant warranty costs, and reputational harm [Item 1A]. The battery market is highly competitive and evolving, and failure to keep up with rapid technological changes or to produce batteries at scale and reduced unit cost could erode competitive advantage [Item 1A]. The company has a history of financial losses, with an accumulated deficit of approximately $977.8 million as of December 28, 2025, and expects to incur significant expenses and continuing losses for the foreseeable future [Item 1A, Item 8]. Inadequate funds to finance operating needs and growth, or inability to raise additional capital on acceptable terms, could negatively impact business strategies [Item 1A]. Servicing substantial debt, including $172.5 million of 2028 Convertible Senior Notes and $360.0 million of 2030 Convertible Senior Notes, requires significant cash flow, which the business may not generate [Item 1A, Note 9]. The conditional conversion feature of the Convertible Senior Notes, if triggered, could adversely affect liquidity or result in reclassification of debt as a current liability [Item 1A]. Inability to protect intellectual property rights could harm the business and competitive position [Item 1A]. Global conflicts, such as the Russia-Ukraine war and the war in Yemen, could adversely impact business, costs, supply chain, and sales [Item 1A]. Cybersecurity threats, including cyberattacks and ransomware, pose risks to information systems and data, potentially leading to regulatory investigations, litigation, fines, and business disruptions [Item 1A]. The use of AI by the company or others in the industry also presents risks, including flawed algorithms, intellectual property infringement, and increased compliance costs [Item 1A].

Management's message to shareholders emphasizes significant progress across revenue growth, product development, manufacturing scale-up, and strategic financing initiatives during fiscal year 2025, achieving the highest annual revenue and gross margins to date [Item 7]. The company's strategic priorities for the period ahead include continued focus on the AI-1™ product platform, which demonstrated a volumetric energy density of 935Wh/L in smartphone batteries, exceeding a leading competitor by 12% [Item 7]. Management is also prioritizing manufacturing readiness and capacity expansion across its global footprint, with Fab2 in Malaysia passing an ISO 9001 audit and completing initial customer audits, and consistent gains in yield and throughput [Item 7]. Furthermore, supporting growing customer demand in defense and industrial markets through expanded production capabilities and increased shipments from South Korea operations remains a key focus [Item 7]. Management believes that existing cash, cash equivalents, and investments will be sufficient to meet funding requirements over the next twelve months from the date of the Annual Report on Form 10-K, and that longer-term cash requirements will be met through a combination of available cash, future debt financings, projected revenues, and access to other public or private equity offerings and potential strategic arrangements [Item 7, Note 1]. The Board of Directors authorized an additional share repurchase program of up to $75 million, providing flexibility in capital allocation while maintaining focus on commercialization investment and manufacturing scale-up [Note 21].