SES AI (SES) Q2 2024 earnings summary

Executive summary

• Announced a strategic shift to integrate AI across manufacturing, safety, and science, launching the "All-in on AI" strategy to accelerate next-gen battery commercialization and create new revenue streams in EV, UAM, and drone markets.

• Significant progress in B-sample joint development with Hyundai, with a major lithium metal line in South Korea on track for Q4 2024 completion and extension of JDA to December 2025.

• Expanded into UAM and drone markets, converting existing lines and entering new OEM testing agreements amid accelerating demand.

• SES AI remains a pre-commercialization stage company focused on high-performance Li-Metal batteries for EVs and UAM, with no revenue generated to date.

• Leveraging AI for battery health monitoring, material development, and sustainability initiatives such as dry electrode technology and Li-Metal recycling.

Financial highlights

• GAAP operating expenses for Q2 2024 were $24.6 million, with net loss of $19.9 million; net cash used in operating activities for the first half of 2024 was $31.1 million.

• Cash and cash equivalents as of June 30, 2024 were $54.8 million, with $239.9 million in marketable securities, totaling $294.7 million in liquidity.

• Cash used in operations was $22.1 million in Q2 2024; capital expenditures were $3.7 million for the quarter and $10.5 million for the first half of 2024.

• Interest income for Q2 2024 was $4.0 million; gain on change in fair value of Sponsor Earn-Out liabilities was $1.4 million.

• No new equity or debt financing was raised in the quarter; operations funded by existing cash and marketable securities.

Outlook and guidance

• 2024 cash usage guidance updated to $100–$120 million, down from $110–$130 million, with operations cash usage expected at $85–$95 million and capex at $15–$25 million.

• Strong balance sheet expected to provide liquidity well into 2027.

• Management expects 2024 to be pivotal for Li-Metal battery commercialization, focusing on B-sample JDAs, building B-sample lines, and improving AI prediction accuracy.

• Transition to C-sample is planned for 2026, with commercial production targeted for 2027.

• Capacity build-up capex for C-sample and beyond to be shared with OEM partners.