SES AI (SES) Q3 2024 earnings summary

Executive summary

• Achieved early commercial revenue in urban air mobility (UAM) and drones, with supply agreements including SoftBank, and advanced commercialization efforts with a revenue pipeline from UAM, drones, and AI-accelerated battery material discovery.

• 100 Ah lithium-metal B sample cells passed rigorous global EV safety tests, including GB38031-2020, a first in the industry.

• Advanced AI-accelerated battery material discovery, forming partnerships, building a world-class team, and targeting battery safety, manufacturing optimization, and material discovery.

• AI solutions expected to generate first revenue contracts in Q4 2024, with a growing pipeline for 2025.

• Strategic partnerships with major OEMs (GM, Hyundai, Honda) continue, with B-sample development underway.

Financial highlights

• Q3 2024 G&A operating expenses were $34.2 million, with net loss at $30.2 million, up from $13.5 million in Q3 2023.

• Cash used in operations was $22.7 million in Q3; operating cash outflow was $53.8 million for the nine months ended September 30, 2024.

• Ended Q3 with $274 million in liquidity, including $66.7 million in cash and $207.0 million in marketable securities.

• FY 2024 cash usage guidance updated to $80–$95 million, reduced from $100–$120 million.

• Interest income declined to $3.7 million in Q3 2024 from $4.2 million in Q3 2023.

Outlook and guidance

• Full-year 2024 cash usage guidance reduced to $80–$95 million, with operations cash usage at $70–$80 million and CapEx at $10–$15 million.

• Strong balance sheet expected to provide liquidity well into 2028.

• AI strategy anticipated to drive new revenue streams starting Q4 2024 and into 2025.

• Focus remains on EV B-sample development, UAM cell manufacturing, and advancing AI for battery safety and manufacturing.

• Management believes current liquidity is sufficient for at least 12 months and to fund commercialization, but additional funding may be needed if development is delayed.