Enovix Q1 Earnings Call Highlights
Enovix (NASDAQ:ENVX) reported first-quarter 2026 revenue above its guidance range as the battery developer said it is advancing commercial production for smart eyewear, refining smartphone qualification standards with customers and building a larger pipeline in drone, defense and industrial markets.
President and Chief Executive Officer Dr. Raj Talluri said the quarter marked “another meaningful step” in the company’s transition toward commercialization and scale. Chief Financial Officer Ryan Benton said first-quarter revenue totaled $7.6 million, up 49% year over year and above the high end of the company’s guidance range, driven largely by batteries supplied to Korean military contractors. Non-GAAP gross margin was 26.3%, marking the sixth consecutive quarter of positive gross profit on both a GAAP and non-GAAP basis, Benton said.
Non-GAAP operating expenses were $30.8 million, reflecting investments in customer qualification, research and product development, and smart eyewear production readiness. Non-GAAP loss from operations was $28.8 million, better than the company’s guidance range of $29 million to $32 million. Non-GAAP net loss per share was $0.14. Enovix ended the quarter with approximately $582.7 million in cash equivalents, restricted cash and marketable securities.
Smart Eyewear Production Begins
Talluri said Enovix began commercial production of its AI-1 battery for its lead smart eyewear customer’s reference platform, with initial shipments underway and production expected to ramp through the second half of 2026. He said multiple customers are in the process of launching smart eyewear products.
During the question-and-answer session, Talluri said the company expects about 50,000 smart eyewear battery units in 2026 and said volumes “should be in the millions next year,” though he cautioned that the exact scale remains difficult to predict. He described smart eyewear as a rapidly growing market in which battery life is a major product constraint.
The company also produced first engineering samples of AI-2 for smartwear, which Talluri said delivered more than 20% higher volumetric energy density compared with AI-1. The improvement came from reducing inactive material and increasing cathode voltage, he said. Customer sampling of AI-2 is planned for later in the quarter, and Talluri said Enovix has already received initial sampling orders and engagement commitments from several leading smart eyewear companies.
Smartphone Qualification Framework Shifts
Enovix said it has aligned with Honor on an updated qualification framework for silicon anode smartphone batteries. Talluri said legacy smartphone qualification protocols were designed around graphite-based batteries and included a 0.7C discharge requirement, which he said can artificially stress silicon anode cells at rates far above typical smartphone usage.
According to Talluri, smartphone usage typically remains below 0.2C, and the revised framework prioritizes a version of a 0.2C cycle test that began in the first quarter. He said the 0.7C test has been removed as a “must-have” or gating requirement by Honor, and Enovix’s second smartphone OEM has also agreed to move toward a similar updated framework. Discussions with additional top OEMs are continuing.
Talluri said cycle life testing at the lead customer is more than halfway complete and is tracking under the updated protocol. However, he noted that 0.1C and 0.2C tests can take longer to run than the prior accelerated 0.7C test.
Enovix plans a targeted system-level deployment with Honor in the second half of 2026 to confirm in-field performance ahead of a broader commercial launch in 2027. Talluri said the initial deployment would involve small volumes, describing it as a limited launch or “friends and family” type testing. He also said Enovix has received the battery form factor for Honor’s next-generation device intended for launch in 2027.
Drone and Defense Pipeline Expands
Enovix highlighted growing activity in drone, defense and industrial applications. Talluri said the company secured new customer design wins in each of those markets during the first quarter, with deployments expected in 2027. The company’s global pipeline for products manufactured in Korea now exceeds $130 million, he said, with the majority driven by drone applications. In response to an analyst question, Talluri said drones represent more than 60% of that pipeline.
The company formally launched MX1-B01, a drone battery cell delivering 360 Wh/kg energy density, at the Michigan Defense Expo. Talluri said the product is designed for applications requiring extended flight time, high discharge capability and supply chain security. He said the cell is manufactured at Enovix’s South Korea factory and is NDAA compliant, which he described as an advantage for customers focused on defense-related procurement requirements.
Talluri said the initial MX1 cell contains about 60% silicon-carbon material and that the company believes it can increase that percentage over time. The company is targeting MX2 in 2027 with a goal of reaching 400 Wh/kg. He said Enovix expects to tune product characteristics such as cycle life, discharge rate and swelling depending on customer requirements.
Benton said Enovix is already spending capital to add equipment to an existing building at its Nonsan facility in South Korea and has “multiple empty buildings” available for future expansion. Talluri said the company acquired nearly 300,000 square feet of factory space through a prior transaction and plans to add capacity in line with demand.
Manufacturing Progress and Guidance
Talluri said Enovix continues to improve manufacturing execution at Fab2. Yields in most production zones are nearing or exceeding 90%, while Zone 1 dicing, which he described as the current throughput bottleneck, is producing step-level yields of approximately 80%. The company is implementing a hybrid dicing strategy that combines laser and mechanical approaches.
Benton said the company believes it can reach 90% yield and that mechanical dicing is expected to improve throughput and lower costs over time. Talluri said Enovix has enough laser capacity to meet demand this year and plans to bring the mechanical dicing process online for next year’s demand.
For the second quarter of 2026, Enovix guided for revenue of $8 million to $9 million, reflecting continued growth in defense and industrial shipments and initial smart eyewear revenue as deliveries to its lead customer begin. The company expects a non-GAAP loss from operations of $29 million to $32 million and a non-GAAP net loss per share of $0.13 to $0.17. Capital expenditure payments are projected at $9 million to $13 million, including deferred payments from the first quarter and initial spending to support Korea capacity expansion.
Benton said Enovix has not made any purchases under its previously approved share repurchase authorization. He said the company’s capital deployment priorities remain qualification completion, scaling smart eyewear and defense production capabilities, and selectively pursuing strategic opportunities with a high bar for fit and return.
About Enovix (NASDAQ:ENVX)
Enovix Corporation (NASDAQ: ENVX) develops and manufactures advanced lithium-ion battery cells with a patented three-dimensional silicon-anode architecture. The company’s core focus is on delivering high energy density, improved safety, and longer cycle life compared to conventional graphite-based cells. Enovix’s technology targets a range of applications, including consumer electronics, wearable devices, electric vehicles and stationary energy storage systems.
Founded in 2011 and headquartered in Fremont, California, Enovix has built pilot production capability and is scaling up manufacturing capacity to meet growing demand.
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