Enovix Announces Fourth Quarter and Full Year 2023 Financial Results
- Record revenue of $7.4 million in Q4 2023, up from $1.1 million in Q4 2022 and $0.2 million in Q3 2023.
- Scale-up of Fab2 in Malaysia with 250,000 square feet of factory space and Gen2 equipment shipments received.
- Customer engagements with top OEMs in China and leading automaker development agreement.
- Confidence in achieving 1,000 cycles on smartphone-class silicon battery and plans to sample high cycle life batteries in Q2 2024.
- Forecasted AI usage increase driving the need for higher energy density batteries.
- Development of high energy density smartphone batteries EX-1M and EX-2M using 100% active silicon anode.
- Financials show total revenue of $7.4 million in Q4 2023 with increased operating expenses and cash position of $306.8 million.
- Outlook for Q1 2024 includes revenue between $3.5 million and $4.5 million, adjusted EBITDA loss, and Non-GAAP EPS loss.
- Focus on executing high-volume manufacturing in Malaysia and delivering smartphone batteries in 2024.
- Increased GAAP and Non-GAAP cost of revenue and operating expenses in Q4 2023.
- Accelerated depreciation associated with the strategic realignment of Fab1 impacting financial results.
- Negative Non-GAAP EPS impact from accelerated depreciation.
- Outlook for Q1 2024 indicates adjusted EBITDA and Non-GAAP EPS losses.
- Challenges in meeting revenue targets and achieving profitability in the short term.
Insights
The financial results released by Enovix Corporation indicate a significant uptick in revenue, from $1.1 million in Q4 2022 to $7.4 million in Q4 2023. This growth trajectory is noteworthy, especially considering the company's strategic expansion in Malaysia with the scale-up of Fab2. The emphasis on high-volume manufacturing and the development of high-energy density batteries tailored for smartphones could potentially address the burgeoning demand for more efficient energy storage solutions in consumer electronics, particularly as AI applications increase power consumption.
However, the reported GAAP and Non-GAAP cost of revenue and operating expenses have also risen, overshadowing the revenue growth and resulting in a substantial adjusted EBITDA loss forecast for Q1 2024. This financial strain may raise concerns among investors regarding the company's profitability timeline. The strategic realignment of Fab1, causing accelerated depreciation, further complicates the financial picture. Investors would need to weigh the potential for future revenue growth against current operational costs and capital expenditures.
Enovix's focus on advanced silicon battery technology, specifically the development of batteries with a 100% active silicon anode, is a significant technological milestone. The company's confidence in achieving 1,000 cycles for their smartphone-class silicon battery, EX-1M, could set a new industry standard if realized. The ability to deliver high cycle life and fast charge capabilities is critical in an era where smartphone usage intensity is increasing, driven by AI-based applications that demand more power.
The collaboration with Group14 Technologies to develop a silicon battery using 100% of its anode material within the Enovix architecture exemplifies the company's commitment to innovation and could further solidify its competitive edge. The reduction in R&D qualification time, as mentioned, is also a strategic move to accelerate product development cycles and bring products to market more rapidly. This agility could be a decisive factor in capturing market share in the competitive battery technology landscape.
Enovix's reported cash position of $306.8 million provides the company with a cushion to navigate its aggressive scale-up and R&D activities. However, the cash used in operating activities and capital expenditures in Q4 2023 reflects a high burn rate that investors must monitor closely. The company's financial health will depend on its ability to manage these expenditures while scaling production and sales.
The outlook for Q1 2024, with expected revenue between $3.5 million and $4.5 million and a significant adjusted EBITDA loss, suggests that Enovix is still in an investment phase. The negative EPS impact from accelerated depreciation points to the costs associated with transitioning production capabilities. While the long-term potential for revenue growth and margin expansion is evident, the short-term financial performance may be under pressure as the company works towards achieving its key milestones. Stakeholders should consider the inherent risks associated with this growth phase, including the execution risk of new manufacturing facilities and customer adoption rates of new battery technologies.
FREMONT, Calif., Feb. 20, 2024 (GLOBE NEWSWIRE) -- Enovix Corporation (“Enovix”) (Nasdaq: ENVX), an advanced silicon battery company, announced today financial results for fourth quarter and full year 2023, which included the summary below from its President and CEO, Dr. Raj Talluri.
Fellow Shareholders,
In the fourth quarter of 2023 we completed our acquisition of Routejade and positioned the company to scale with high-volume manufacturing in Malaysia. Our highlights for the quarter include:
- Record top-line performance: Revenue of
$7.4 million in the fourth quarter of 2023, up from$1.1 million in the fourth quarter of 2022 and$0.2 million in the third quarter of 2023. Revenue strength was driven by strong performance from Routejade, along with continued volume shipments of BrakeFlowTM-enabled batteries for the U.S. Army. - Scale-up of Fab2 in Malaysia: Built out approximately 250,000 square feet of factory space and began receiving shipments of Gen2 equipment that had cleared Factory Acceptance Testing (“FAT”) during the quarter. We remain on track to produce first silicon battery samples from Fab2 in April.
- Customer engagement: We hosted the management teams of two OEMs with top 5 smartphone market share in China at our Fremont headquarters during the quarter and recently signed a development agreement with a leading automaker.
- Technical milestones: Based on battery cycling performance in our labs and advanced modeling, we gained confidence in the quarter of achieving 1,000 cycles on our smartphone-class silicon battery. We plan to begin sampling high cycle life smartphone batteries, which we call EX-1M, beginning in the second quarter of 2024.
We made tremendous progress in 2023. Notably we: 1) established a strong manufacturing base and team in Malaysia, 2) rebuilt the management team with experienced leaders that have a demonstrated track record in our target markets, 3) strengthened customer and supplier relationships with focus on industry-leading smartphone batteries, and 4) vertically integrated our manufacturing through acquisition and gained a seasoned team in Korea that has shipped batteries for over 20 years. We are now focused on executing our global scale-up plan.
We plan this year to demonstrate to customers: 1) high-volume manufacturing from Gen2 equipment and 2) high-energy density batteries tailored to smartphones. Both activities commence in the second quarter of 2024 and our confidence level is high that we will be successful. In parallel, we intend to grow overall revenue meaningfully year-over-year.
The need for a higher energy density battery is critically important across all industries. This is particularly the case in the smartphone industry, which is now facing a tidal wave of power-hungry AI-based applications.
During the quarter, we contracted with Tirias Research to analyze historical battery and power consumption trends on the smartphone, along with a forecast for AI usage in the coming years. Tirias forecasted that global GenAI usage (all words, symbols, images, and video frames) will increase over 150x between 2023 and 2028. The impact on device energy budgets is likely to be massive. As an example, Tirias found that capturing video with AI features enabled on two leading flagship smartphones consumed over
Business Update
Manufacturing. Fab2 in Malaysia began to take shape during the quarter as first tools showed up in November and we began installing laser patterning and battery formation tools for Site Acceptance Test (“SAT”). In parallel, we converted battery production sections of the facility to meet the Class 10,000 Cleanroom standard.
Our FAT and SAT processes are extremely rigorous, meant to ensure that we place machines into service that meet our specifications for throughput, yield, and machine uptime. With that in mind, we are finalizing FAT for our battery stacking and packaging equipment with a priority on preparing our Agility Line in Fab2 to produce first customer samples early in the second quarter of 2024 with the high-volume Gen2 Autoline beginning production right behind it.
In support of our Malaysia expansion, we continued during the quarter to strengthen our relationships in the country. Notably, in November we met with Malaysian Prime Minister Anwar Ibrahim during his visit to the Bay Area for the Asia-Pacific Economic Cooperation (APEC) summit.
Commercialization. We recently entered into a development agreement with a leading automaker to validate the advantages of the Enovix cell architecture for an electric vehicle (“EV”) battery. We believe this agreement is a strong endorsement of our architecture’s value proposition in the EV battery market, which is expected to eclipse
During the quarter we continued to build out our customer-facing product management team. This seasoned group has been able to collect detailed product requirements and test plans from multiple leading smartphone and computing OEMs, which should prove advantageous as we increasingly tailor our technology roadmap to unique customer needs.
The battery business from our recent acquisition of Routejade delivered a strong quarter due to fulfillment of orders to customers in the military, IoT, medical, and industrial end markets.
As we integrate this business, we see revenue synergies to extend this new product portfolio to our existing customer relationships in the IoT and military markets. These products have already been well-received, and our new Korean manufacturing location allows customers to geographically diversify their supplier base within Asia.
Technology and Products. Tailored to the cycle life and fast charge specifications of leading OEMs, we are developing two generations of high energy density smartphone batteries, named EX-1M and EX-2M. We plan to deliver customer samples of EX-1M in the second quarter of 2024 and EX-2M in the fourth quarter of 2024, both from Fab2. In parallel, we are also developing variants for products in other markets that require exceptional energy density or extreme temperature tolerance.
We believe EX-1M and EX-2M will be the first smartphone batteries in the world to use a
Furthermore, reducing our R&D qualification time has also been critical to this achievement. Based on advanced modeling processes developed by our team in India, we have been able to cut down internal qualification times from 14 weeks to eight weeks based on cycle life predictions when we adjust materials.
Financials. Total revenue in the fourth quarter of 2023 was
Our GAAP cost of revenue of
Our GAAP operating expenses of
We exited the fourth quarter of 2023 with
A full reconciliation of our GAAP to Non-GAAP results is available later in this report.
Outlook
For the first quarter of 2024, we expect revenue between
Summary
We made significant progress in 2023 and now have the structure in place to continue advancing toward our goal of becoming a scale supplier with multi-billions of dollars in revenue and industry-leading margins. We are focused on the execution of two key milestones in 2024: 1) demonstrating high-volume manufacturing in Malaysia and 2) delivering samples of our leading smartphone batteries, EX-1M and EX-2M, to customers.
Conference Call Information
Enovix will hold a video conference call at 2:00 PM PT / 5:00 PM ET today, February 20, 2024, to discuss the company’s business updates and financial results. To join the call, participants must use the following link to register: https://enovix-q42023.open-exchange.net/. This link will also be available via the Investor Relations section of Enovix’s website at https://ir.enovix.com. An archived version of the call will be available on the Enovix website for one year at https://ir.enovix.com.
About Enovix
Enovix is on a mission to power the technologies of the future. Everything from IoT, mobile and computing devices, to the vehicle you drive, needs a better battery. The company’s disruptive architecture enables a battery with high energy density and capacity without compromising safety. Enovix is scaling its silicon-anode, lithium-ion battery manufacturing capabilities to meet customer demand. For more information visit www.enovix.com and follow us on LinkedIn.
Management’s Use of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Free Cash Flow and other non-GAAP measures are intended as supplemental financial measures of our performance that are neither required by, nor presented in accordance with GAAP. We believe that the use of Non-GAAP measures provides an additional tool for investors to use in evaluating ongoing operating results, trends, and in comparing our financial measures with those of comparable companies, which may present similar Non-GAAP financial measures to investors.
However, you should be aware that when evaluating the non-GAAP measures, we may incur future expenses similar to those excluded when calculating these measures. In addition, the presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Our computation of EBITDA, Adjusted EBITDA, Free Cash Flow and other Non-GAAP measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate the Non-GAAP measures in the same fashion.
Forward-Looking Statements
This letter to shareholders contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, about us and our industry that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “will,” “goal,” “prioritize,” “plan,” “target,” “expect,” “focus,” “look forward,” “opportunity,” “believe,” “estimate,” “continue,” “anticipate,” and “pursue” or the negative of these terms or similar expressions. Forward-looking statements in this letter to shareholders include, but are not limited to, statements regarding our expectations regarding, and our ability to respond to, market and customer demand, our customers’ releases of products using our batteries, our financial and business performance, projected improvements in our manufacturing, commercialization and R&D activities, our expectations regarding FAT and SAT , our ability to meet goals for yield and throughput, the set up and creation of the manufacturing facility in Malaysia, the anticipated contributions of and benefits from personnel, our revenue funnel, our efforts in the portable electronics market, particularly IoT, Mobile, and Computing categories, our ability to meet milestones and deliver on our objectives and expectations, the implementation and success of our business model and growth strategy, including targeting various addressable markets and the expansion of our customer base, our ability to manage our expenses, our ability to integrate Routejade effectively, and our forecasts of our financial and performance guidance and metrics. Actual results could differ materially from these forward-looking statements as a result of certain risks and uncertainties, including, without limitation, our ability to improve energy density among our products, our ability to establish sufficient manufacturing and optimize manufacturing processes to meet demand, sourcing or establishing supply relationships, adequate funds to acquire our next manufacturing facility, set up and creation of manufacturing facility in Malaysia, ability to obtain financing in Malaysia, market acceptance of our products, changes in consumer preferences or demands, changes in industry standards, the impact of technological development and competition, and global economic conditions, including inflationary and supply chain pressures, and political, social, and economic instability, including as a result of armed conflict, war or threat of war, terrorist activity or other security concerns or trade and other international disputes that could disrupt supply or delivery of, or demand for, our products. For additional information on these risks and uncertainties and other potential factors that could affect our business and financial results or cause actual results to differ from the results predicted, please refer to our filings with the Securities and Exchange Commission (the “SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our most recently filed annual report on Form 10-K and quarterly report on Form 10-Q and other documents that we have filed, or that we will file, with the SEC. Any forward-looking statements made by us in this letter to shareholders speak only as of the date on which they are made and subsequent events may cause these expectations to change. We disclaim any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise, except as required by law.
For investor and media inquiries, please contact:
Enovix Corporation
Charles Anderson
Phone: +1 (612) 229-9729
Email: canderson@enovix.com
For media inquiries, please contact:
Enovix Corporation
Kristin Atkins
Phone: +1 (650) 815-6934
Email: katkins@enovix.com
| Enovix Corporation Condensed Consolidated Balance Sheets (Unaudited) (In Thousands, Except Share and per Share Amounts) | |||||||
| December 31, 2023 | January 1, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 233,121 | $ | 322,851 | |||
| Short-term investments | 73,694 | — | |||||
| Accounts receivable, net | 909 | 170 | |||||
| Notes receivable, net | 1,514 | — | |||||
| Inventory | 8,737 | 634 | |||||
| Prepaid expenses and other current assets | 5,202 | 5,993 | |||||
| Total current assets | 323,177 | 329,648 | |||||
| Property and equipment, net | 166,471 | 103,868 | |||||
| Customer relationship intangibles and other intangibles, net | 42,168 | — | |||||
| Operating lease, right-of-use assets | 15,290 | 6,133 | |||||
| Goodwill | 12,098 | — | |||||
| Other assets, non-current | 5,100 | 937 | |||||
| Total assets | $ | 564,304 | $ | 440,586 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 21,251 | $ | 7,077 | |||
| Accrued expenses | 13,976 | 7,089 | |||||
| Accrued compensation | 10,731 | 8,097 | |||||
| Short-term debt | 5,917 | — | |||||
| Deferred revenue | 6,708 | 50 | |||||
| Other liabilities | 2,435 | 716 | |||||
| Total current liabilities | 61,018 | 23,029 | |||||
| Long-term debt, net | 169,099 | — | |||||
| Warrant liability | 42,900 | 49,080 | |||||
| Operating lease liabilities, non-current | 15,594 | 8,234 | |||||
| Deferred revenue, non-current | 3,774 | 3,724 | |||||
| Deferred tax liability | 10,803 | — | |||||
| Other liabilities, non-current | 13 | 92 | |||||
| Total liabilities | 303,201 | 84,159 | |||||
| Commitments and Contingencies | |||||||
| Stockholders’ equity: | |||||||
| Common stock, | 17 | 15 | |||||
| Preferred stock, | — | — | |||||
| Additional paid-in-capital | 857,037 | 741,186 | |||||
| Accumulated other comprehensive loss | (62 | ) | — | ||||
| Accumulated deficit | (598,845 | ) | (384,774 | ) | |||
| Total Enovix's stockholders’ equity | 258,147 | 356,427 | |||||
| Non-controlling interest | 2,956 | — | |||||
| Total equity | 261,103 | 356,427 | |||||
| Total liabilities and equity | $ | 564,304 | $ | 440,586 | |||
| Enovix Corporation Condensed Consolidated Statements of Operations (Unaudited) (In Thousands, Except Share and per Share Amounts) | |||||||||||||||
| Quarters Ended | Fiscal Years | ||||||||||||||
| December 31, 2023 | January 1, 2023 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 7,381 | $ | 1,093 | $ | 7,644 | $ | 6,202 | |||||||
| Cost of revenue | 19,769 | 10,356 | 63,061 | 23,239 | |||||||||||
| Gross margin | (12,388 | ) | (9,263 | ) | (55,417 | ) | (17,037 | ) | |||||||
| Operating expenses: | |||||||||||||||
| Research and development | 34,582 | 15,545 | 88,392 | 58,051 | |||||||||||
| Selling, general and administrative | 17,807 | 15,425 | 79,014 | 51,970 | |||||||||||
| Impairment of equipment | — | 4,921 | 4,411 | 4,921 | |||||||||||
| Restructuring cost | — | — | 3,021 | — | |||||||||||
| Total operating expenses | 52,389 | 35,891 | 174,838 | 114,942 | |||||||||||
| Loss from operations | (64,777 | ) | (45,154 | ) | (230,255 | ) | (131,979 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Change in fair value of common stock warrants | 2,040 | 31,140 | 6,180 | 75,180 | |||||||||||
| Interest income | 4,128 | 2,832 | 14,070 | 5,231 | |||||||||||
| Interest expense | (1,629 | ) | — | (4,456 | ) | — | |||||||||
| Other income (expense), net | (433 | ) | 1 | (304 | ) | (54 | ) | ||||||||
| Total other income, net | 4,106 | 33,973 | 15,490 | 80,357 | |||||||||||
| Loss before income tax benefit | (60,671 | ) | (11,181 | ) | (214,765 | ) | (51,622 | ) | |||||||
| Income tax benefit | (633 | ) | — | (633 | ) | — | |||||||||
| Net loss | (60,038 | ) | (11,181 | ) | (214,132 | ) | (51,622 | ) | |||||||
| Net loss attributable to non-controlling interests | (61 | ) | — | (61 | ) | — | |||||||||
| Net loss attributable to Enovix | $ | (59,977 | ) | $ | (11,181 | ) | $ | (214,071 | ) | $ | (51,622 | ) | |||
| Net loss per share attributable to Enovix shareholders, basic | $ | (0.36 | ) | $ | (0.07 | ) | $ | (1.35 | ) | $ | (0.34 | ) | |||
| Weighted average number of common shares outstanding, basic | 165,708,522 | 154,190,752 | 159,065,697 | 152,918,287 | |||||||||||
| Net loss per share attributable to Enovix shareholders, diluted | $ | (0.36 | ) | $ | (0.27 | ) | $ | (1.38 | ) | $ | (0.82 | ) | |||
| Weighted average number of common shares outstanding, diluted | 165,708,522 | 155,283,324 | 159,575,555 | 154,149,367 | |||||||||||
| Enovix Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) (In Thousands) | |||||||
| Fiscal Years | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (214,132 | ) | $ | (51,622 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||
| Depreciation, accretion and amortization | 34,009 | 7,972 | |||||
| Stock-based compensation | 69,452 | 30,367 | |||||
| Changes in fair value of common stock warrants | (6,180 | ) | (75,180 | ) | |||
| Impairment of equipment | 4,411 | 4,921 | |||||
| Others | 703 | — | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts and notes receivables | (370 | ) | (170 | ) | |||
| Inventory | 4,509 | (634 | ) | ||||
| Prepaid expenses and other assets | (626 | ) | 926 | ||||
| Accounts payable | 6,096 | 2,272 | |||||
| Accrued expenses and compensation | 1,977 | 2,547 | |||||
| Deferred revenue | (3,860 | ) | (4,091 | ) | |||
| Deferred tax liability | (813 | ) | — | ||||
| Other liabilities | 188 | (48 | ) | ||||
| Net cash used in operating activities | (104,636 | ) | (82,740 | ) | |||
| Cash flows from investing activities: | |||||||
| Purchase of property and equipment | (61,795 | ) | (36,212 | ) | |||
| Routejade acquisition, net of cash and restricted cash acquired | (9,968 | ) | — | ||||
| Purchases of investments | (138,343 | ) | — | ||||
| Maturities of investments | 67,150 | — | |||||
| Net cash used in investing activities | (142,956 | ) | (36,212 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from exercise of common stock warrants, net | — | 52,828 | |||||
| Proceeds from issuance of Convertible Senior Notes | 172,500 | — | |||||
| Repayment of debt | (69 | ) | — | ||||
| Payments of debt issuance costs | (5,917 | ) | — | ||||
| Purchase of Capped Calls | (17,250 | ) | — | ||||
| Payroll tax payments for shares withheld upon vesting of RSUs | (3,931 | ) | (587 | ) | |||
| Proceeds from the exercise of stock options | 11,928 | 2,379 | |||||
| Proceeds from issuance of common stock under employee stock purchase plan | 2,350 | 1,900 | |||||
| Repurchase of unvested restricted common stock | (26 | ) | (10 | ) | |||
| Net cash provided by financing activities | 159,585 | 56,510 | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 154 | — | |||||
| Change in cash, cash equivalents, and restricted cash | (87,853 | ) | (62,442 | ) | |||
| Cash and cash equivalents and restricted cash, beginning of period | 322,976 | 385,418 | |||||
| Cash and cash equivalents, and restricted cash, end of period | $ | 235,123 | $ | 322,976 | |||
Net Loss Attributable to Enovix to Adjusted EBITDA
While we prepare our consolidated financial statements in accordance with GAAP, we also utilize and present certain financial measures that are not based on GAAP. We refer to these financial measures as “Non-GAAP” financial measures. In addition to our financial results determined in accordance with GAAP, we believe that EBITDA and Adjusted EBITDA are useful measures in evaluating its financial and operational performance distinct and apart from financing costs, certain non-cash expenses and non-operational expenses.
These Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP. We endeavor to compensate for the limitation of the Non-GAAP financial measures presented by also providing the most directly comparable GAAP measures.
We use Non-GAAP financial information to evaluate our ongoing operations and for internal planning, budgeting and forecasting purposes. We believe that Non-GAAP financial information, when taken collectively, may be helpful to investors in assessing its operating performance and comparing its performance with competitors and other comparable companies. You should review the reconciliations below but not rely on any single financial measure to evaluate our business.
“EBITDA” is defined as earnings (net loss) attributable to Enovix adjusted for interest expense, income tax benefit, depreciation and amortization expense. “Adjusted EBITDA” includes additional adjustments to EBITDA such as stock-based compensation expense, change in fair value of common stock warrants, inventory step-up, impairment of equipment and other special items as determined by management which it does not believe to be indicative of its underlying business trends.
Below is a reconciliation of net loss attributable to Enovix on a GAAP basis to the Non-GAAP EBITDA and Adjusted EBITDA financial measures for the periods presented below (in thousands):
| Quarters Ended | Fiscal Years | ||||||||||||||
| December 31, 2023 | January 1, 2023 | 2023 | 2022 | ||||||||||||
| Net loss attributable to Enovix | $ | (59,977 | ) | $ | (11,181 | ) | $ | (214,071 | ) | $ | (51,622 | ) | |||
| Interest expense | 1,629 | — | 4,456 | — | |||||||||||
| Income tax benefit | (633 | ) | — | (633 | ) | — | |||||||||
| Depreciation and amortization | 24,009 | 3,177 | 34,009 | 7,972 | |||||||||||
| EBITDA | (34,972 | ) | (8,004 | ) | (176,239 | ) | (43,650 | ) | |||||||
| Stock-based compensation expense(1) | 11,620 | 8,250 | 69,093 | 30,367 | |||||||||||
| Change in fair value of common stock warrants | (2,040 | ) | (31,140 | ) | (6,180 | ) | (75,180 | ) | |||||||
| Inventory step-up | 2,206 | — | 2,206 | — | |||||||||||
| Impairment of equipment | — | 4,921 | 4,411 | 4,921 | |||||||||||
| Restructuring cost(1) | — | — | 3,021 | — | |||||||||||
| Acquisition cost | 158 | — | 1,273 | — | |||||||||||
| Adjusted EBITDA | $ | (23,028 | ) | $ | (25,973 | ) | $ | (102,415 | ) | $ | (83,542 | ) | |||
____________________
(1)
Free Cash Flow
We define “Free Cash Flow” as (i) net cash from operating activities less (ii) capital expenditures, net of proceeds from disposals of property and equipment, all of which are derived from our Consolidated Statements of Cash Flow. The presentation of non-GAAP Free Cash Flow is not intended as an alternative measure of cash flows from operations, as determined in accordance with GAAP. We believe that this financial measure is useful to investors because it provides investors to view our performance using the same tool that we use to gauge our progress in achieving our goals and it is an indication of cash flow that may be available to fund investments in future growth initiatives. Below is a reconciliation of net cash used in operating activities to the Free Cash Flow financial measures for the periods presented below (in thousands):
| Fiscal Years | |||||||
| 2023 | 2022 | ||||||
| Net cash used in operating activities | $ | (104,636 | ) | $ | (82,740 | ) | |
| Capital expenditures | (61,795 | ) | (36,212 | ) | |||
| Free Cash Flow | $ | (166,431 | ) | $ | (118,952 | ) | |
Other Non-GAAP Financial Measures Reconciliation
(In Thousands, Except Share and per Share Amounts)
| Quarters Ended | Fiscal Years | |||||||||||||||
| December 31, 2023 | January 1, 2023 | 2023 | 2022 | |||||||||||||
| Revenue | $ | 7,381 | $ | 1,093 | $ | 7,644 | $ | 6,202 | ||||||||
| GAAP cost of revenue | $ | 19,769 | $ | 10,356 | $ | 63,061 | $ | 23,239 | ||||||||
| Stock-based compensation expense | (459 | ) | (754 | ) | (5,460 | ) | (2,071 | ) | ||||||||
| Inventory step-up | (2,206 | ) | — | (2,206 | ) | — | ||||||||||
| Non-GAAP cost of revenue | $ | 17,104 | $ | 9,602 | $ | 55,395 | $ | 21,168 | ||||||||
| GAAP gross margin | $ | (12,388 | ) | $ | (9,263 | ) | $ | (55,417 | ) | $ | (17,037 | ) | ||||
| Stock-based compensation expense | 459 | 754 | 5,460 | 2,071 | ||||||||||||
| Inventory step-up | 2,206 | — | 2,206 | — | ||||||||||||
| Non-GAAP gross margin | $ | (9,723 | ) | $ | (8,509 | ) | $ | (47,751 | ) | $ | (14,966 | ) | ||||
| GAAP research and development (R&D) expense | $ | 34,582 | $ | 15,545 | $ | 88,392 | $ | 58,051 | ||||||||
| Stock-based compensation expense | (5,337 | ) | (3,015 | ) | (27,409 | ) | (12,720 | ) | ||||||||
| Amortization of intangible assets | (277 | ) | — | (277 | ) | — | ||||||||||
| Non-GAAP R&D expense | $ | 28,968 | $ | 12,530 | $ | 60,706 | $ | 45,331 | ||||||||
| GAAP selling, general and administrative (SG&A) expense | $ | 17,807 | $ | 15,425 | $ | 79,014 | $ | 51,970 | ||||||||
| Stock-based compensation expense | (5,824 | ) | (4,481 | ) | (36,224 | ) | (15,576 | ) | ||||||||
| Amortization of intangible assets | (536 | ) | — | (536 | ) | — | ||||||||||
| Acquisition cost | (158 | ) | — | (1,273 | ) | — | ||||||||||
| Non-GAAP SG&A expense | $ | 11,289 | $ | 10,944 | $ | 40,981 | $ | 36,394 | ||||||||
| GAAP operating expenses | $ | 52,389 | $ | 35,891 | $ | 174,838 | $ | 114,942 | ||||||||
| Stock-based compensation expense included in R&D expense | (5,337 | ) | (3,015 | ) | (27,409 | ) | (12,720 | ) | ||||||||
| Stock-based compensation expense included in SG&A expense | (5,824 | ) | (4,481 | ) | (36,224 | ) | (15,576 | ) | ||||||||
| Amortization of intangible assets | (813 | ) | — | (813 | ) | — | ||||||||||
| Impairment of equipment | — | (4,921 | ) | (4,411 | ) | (4,921 | ) | |||||||||
| Restructuring cost(1) | — | — | (3,021 | ) | — | |||||||||||
| Acquisition cost | (158 | ) | — | (1,273 | ) | — | ||||||||||
| Non-GAAP operating expenses | $ | 40,257 | $ | 23,474 | $ | 101,687 | $ | 81,725 | ||||||||
____________________
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| Quarters Ended | Fiscal Years | |||||||||||||||
| December 31, 2023 | January 1, 2023 | 2023 | 2022 | |||||||||||||
| GAAP loss from operations | $ | (64,777 | ) | $ | (45,154 | ) | $ | (230,255 | ) | $ | (131,979 | ) | ||||
| Stock-based compensation expense(1) | 11,620 | 8,250 | 69,093 | 30,367 | ||||||||||||
| Amortization of intangible assets | 813 | — | 813 | — | ||||||||||||
| Inventory step-up | 2,206 | — | 2,206 | — | ||||||||||||
| Impairment of equipment | — | 4,921 | 4,411 | 4,921 | ||||||||||||
| Restructuring cost(1) | — | — | 3,021 | — | ||||||||||||
| Acquisition cost | 158 | — | 1,273 | — | ||||||||||||
| Non-GAAP loss from operations | $ | (49,980 | ) | $ | (31,983 | ) | $ | (149,438 | ) | $ | (96,691 | ) | ||||
| GAAP net loss attributable to Enovix | $ | (59,977 | ) | $ | (11,181 | ) | $ | (214,071 | ) | $ | (51,622 | ) | ||||
| Stock-based compensation expense(1) | 11,620 | 8,250 | 69,093 | 30,367 | ||||||||||||
| Change in fair value of common stock warrants | (2,040 | ) | (31,140 | ) | (6,180 | ) | (75,180 | ) | ||||||||
| Inventory step-up | 2,206 | — | 2,206 | — | ||||||||||||
| Amortization of intangible assets | 813 | — | 813 | — | ||||||||||||
| Impairment of equipment | — | 4,921 | 4,411 | 4,921 | ||||||||||||
| Restructuring cost(1) | — | — | 3,021 | — | ||||||||||||
| Acquisition cost | 158 | — | 1,273 | — | ||||||||||||
| Non-GAAP net loss attributable to Enovix shareholders | $ | (47,220 | ) | $ | (29,150 | ) | $ | (139,434 | ) | $ | (91,514 | ) | ||||
| GAAP net loss per share attributable to Enovix, basic | $ | (0.36 | ) | $ | (0.07 | ) | $ | (1.35 | ) | $ | (0.34 | ) | ||||
| GAAP weighted average number of common shares outstanding, basic | 165,708,522 | 154,190,752 | 159,065,697 | 152,918,287 | ||||||||||||
| GAAP net loss per share attributable to Enovix, diluted | $ | (0.36 | ) | $ | (0.27 | ) | $ | (1.38 | ) | $ | (0.82 | ) | ||||
| GAAP weighted average number of common shares outstanding, diluted | 165,708,522 | 155,283,324 | 159,575,555 | 154,149,367 | ||||||||||||
| Non-GAAP net loss per share attributable to Enovix, basic | $ | (0.28 | ) | $ | (0.19 | ) | $ | (0.88 | ) | $ | (0.60 | ) | ||||
| GAAP weighted average number of common shares outstanding, basic | 165,708,522 | 154,190,752 | 159,065,697 | 152,918,287 | ||||||||||||
| Non-GAAP net loss per share attributable to Enovix, diluted | $ | (0.28 | ) | $ | (0.19 | ) | $ | (0.87 | ) | $ | (0.59 | ) | ||||
| GAAP weighted average number of common shares outstanding, diluted | 165,708,522 | 155,283,324 | 159,575,555 | 154,149,367 | ||||||||||||
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FAQ
What was Enovix's revenue in Q4 2023?
What are Enovix's plans for high-volume manufacturing in Malaysia?
Which companies did Enovix engage with during the quarter?
What are the technical milestones achieved by Enovix in Q4 2023?
What is the outlook for Enovix in Q1 2024?
