Earnings Call Transcript - AMPX Q4 2024

Operator, Operator

Good afternoon. Welcome to the Amprius Technologies Fourth Quarter and Full Year 2024 Earnings Conference Call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun; and CFO, Sandra Wallach. Please note that this presentation contains forward-looking statements, including, but not limited to, statements regarding our financial and business performance, our business strategy, future product development or commercialization, new customer adoption and new applications our growth and the growth of the markets in which we operate and the timing and ability of Amprius to expand its manufacturing capacity, build its large-scale manufacturing facility, scale its business and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties and other important factors that may cause Amprius' results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. For a more complete discussion of these risks and uncertainties, please refer to Amprius' filings with the Securities and Exchange Commission. Finally, I'd like to remind everyone that this conference call is being webcasted and a recording will be made available for replay on the company's Investor Relations website at ir.amprius.com. In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the Investor Relations website. I will now turn the call over to Amprius Technology's CEO, Dr. Kang Sun for his comments. Sir, please proceed.

Kang Sun, CEO

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will give you an overview of our record performance and some of our 2024 accomplishments while also highlighting the upcoming milestones we look forward to achieving soon. After that, our CFO, Sandra Wallach, will discuss our financial results for the period. Then I will share some closing remarks before opening the call for questions. Before I give a recap of the quarter, I would like to briefly introduce Amprius to those who may be new to our company. Amprius is a pioneer and the leader in the silicon anode battery space. At Amprius, we develop, manufacture, and market high energy density and high-power density silicon anode batteries with applications across all segments of electrical mobility, including aviation, electric vehicles, and light electrical vehicles. Today, Amprius commands performance leadership with this combination of battery energy density, power density, charging time, operating temperature range, and safety. Across our battery portfolio, we offer unmatched performance among commercially available batteries. Amprius has been delivering commercial batteries to the market with up to 450 watt-hours per kilo and 1,150 watt-hours per liter, 10C power capability, an extreme fast charging rate of 0 to 80% in approximately 6 minutes, the ability to operate in a wide temperature range of -30 degrees Celsius up to 55 degrees Celsius, and the safety design features that enable us to pass the United States Military benchmark nail penetration test. Each of these performance parameters is critically important to the real-world electrical mobility applications. Our batteries not only enable certain aircraft and vehicles to maximize performance but also allow our customers to achieve their economic targets as well. In addition to our commercially available batteries today, we have achieved a third-party validation of our latest 500 watt-hour per kilo, 1,300 watt-hour per liter battery platform. We believe that there are no other commercial batteries on the market that can perform at these levels today. Amprius is a silicon anode battery technology pioneer with over a decade of development experience and a strong track record of commercial shipments and customer achievements. 2024 was an important and productive year for Amprius. The company introduced a new silicon anode battery platform cycle, commercialized a group of new batteries with breakthrough performance due to over 1.8 gigawatt-hour contract manufacturing capacity, achieved record sales revenue, engaged with 235 customers, and developed a strong growth path. Innovative technologies and breakthrough product performance are the foundation of Amprius's business. Large-scale manufacturability and commercialization of these technologies and products have enabled Amprius to achieve incredible milestones and business results this year. In January 2025, Amprius introduced the first battery cell in the industry with combined high energy and high power: 370 watt-hours per kilo energy density and offering up to 3,500 watt-hours per kilo power. Furthermore, the cells support high discharge rates of up to 10C without cooling and up to 15C with active cooling, ensuring quick power delivery without compromising runtime. This cell provides an ideal solution for aviation electrical vehicles and any electrical mobility applications that require both endurance and rapid energy delivery. In Q4, preproduction amp-hour samples were delivered to six of our customers, enabling real-world testing in challenging environments. We are seeing strong customer interest for this battery with industrial leaders like Teledyne FLIR already actively evaluating its capabilities. Amprius also developed and shipped high-performance EV battery cell samples to the United States Advanced Battery Consortium, or USABC, in 2024. The USABC awarded Amprius a $3 million grant to develop low-cost and fast-charging battery cells back in 2022. Since then, Amprius not only met the USABC's development targets, but exceeded them by delivering a cell with a specific energy of 360 watt-hours per kilo at the beginning of life and a power density of 1,200 watt-hours per kilo. The A-Sample EV cells can also charge to 90% of their rated energy in just 15 minutes, exceeding the USABC target of 80% in the same timeframe. In 2024, Amprius also received the xTech Prime award from the U.S. Army to develop a large-format 500 watt-hour per kilo battery cell. We believe this product, which is in development with our partner, AeroVironment, will allow us to achieve battery performance that is not available anywhere else. This project is expected to be completed this year. Today, Amprius has a high-performance commercial battery portfolio that provides critical solutions to customers with various applications across the electric mobility market. The 14 different SKUs provide a range of performance options for different applications that are all commercially available today. Technical achievements have enabled our commercial success. In fact, in the fourth quarter alone, we shipped to 98 total customers, with 53 of those being new to the Amprius platform. Our increasing customer growth complements the volume shipments to strategic customers and resulted in fourth quarter revenue of $10.6 million, a 35% increase from the third quarter of 2024 and a 170% increase from the fourth quarter of 2023. Additionally, 77% of the revenue from Q4 came from outside the United States compared to just 22% in the same period last year on a shipped-to-basis, demonstrating the expansion of our customer base worldwide. Over the course of 2024, we shipped to a total of 235 customers. This includes new customers as well as repeat volume orders from our long-term partners like Airbus, AeroVironment, Teledyne FLIR, Kraus Hamdani, and BAE Systems. The rapid customer expansion we are driving is a testament to our product competitiveness, manufacturing capability, and sales strategy. We generated $24.2 million in revenue for the full year, a 167% increase from 2023. In 2024, we've developed several sizable business opportunities to support our growth for years to come. In Q3 and Q4, we shared that we signed two separate agreements with Fortune 500 companies. The first agreement announced in September 2024 was a nonbinding letter of intent with a Fortune Global 500 technology OEM to develop a high-energy cycle significant cell for the light electrical vehicle market. The battery solution that Amprius provides will be a technology breakthrough in cell chemistry, cell design, and cell manufacturing. We believe it will be a very attractive product for the light electrical vehicle market, which in Q4 contributed about 25% of our Q4 revenue. The light electrical vehicle market is expected to grow significantly. Based on our January 2025 report from the business research company, the light electrical vehicle market size is expected to reach approximately $136 billion by 2029. In addition, the light electrical vehicle market has a shorter design cycle because it's already operating at scale. The other agreement announced in October 2024 was a development contract for small format, custom, high-energy density SiMaxx pouch cells. Amprius's high-energy batteries provide a critical solution to the customer's application. We expect to produce a battery with approximately 50% less weight and size compared to their current battery without compromising performance. At the end of Q3, we also launched two contracts totaling over $20 million to supply 40 ampere-hour high-performance cells for light electrical vehicle applications. As I update, these sales are already sitting, and we expect to recognize 100% revenue in 2025. In total, we had over $16 million in new customer purchase orders added to our backlog in the fourth quarter, giving us additional visibility into our growth for 2025. In addition to the performance of Amprius batteries, our manufacturing capability and capacity have attracted customer attention as well. Today, Amprius has over 1.8 gigawatt-hours cell manufacturing capacity and is well-equipped to deliver all types of battery cells to customers: pouch cells, integral cells, and prismatic cells. The company is also actively working on developing a global contract manufacturing network. Entering 2025, we are increasingly optimistic about our future and have begun the year with a running start. Last month, we announced that we secured a $15 million purchase order from a leading unmanned aircraft system (UAS) manufacturer for our cycle cells. This volume purchase order follows the success of field trials and qualifications over the course of 9 months, leading to Amprius batteries being designed into the manufacturer's fixed-wing UAS platform. These orders secured a critical supply for the customer's production ramp, and we expect to ship the cells in the second half of 2025. As more commercial and defense aviation customers complete their battery qualification processes, we are seeing a strong pipeline of follow-on commitments. We believe orders like this indicate that the drone market is continuing to grow and that Amprius is going to play a large part in empowering future applications. Important business insights project the global drone market will surge from $18 billion in 2023 to $213 billion by 2032. So we believe we are just at the beginning of a significant expansion of one of our addressable markets. This quarter, we have also designed and shipped new high-performance 6.3-ampere-hour cylindrical cells for use in the light electrical vehicle sector. This cell delivers over 25% more capacity than current 21-700 cells, setting a new standard for energy density in the industry for this widely used cell format. Because of its seamless integration into existing battery systems, manufacturers can implement a high-capacity, longer-lasting power source without costly redesigns. As a final note, we are obviously monitoring the policy challenges and potential industry headwinds resulting from the recent changes in federal administration. With much of the global battery supply in Asia, we are not new to economic policies impacting the region. We are taking strict actions to mitigate any risks to the extent we are able, including diversifying our manufacturing partnerships and supply chains to avoid geopolitical concerns and tariff-related issues. We plan to share additional updates with you as they become available. We remain confident in our expectation for growth throughout 2025. With that, I will now turn the call over to Sandra to review our financial results.

Sandra Wallach, CFO

Thank you, Kang. I would now like to spend a few minutes covering some of our key financial updates. As a reminder, our detailed financials can be found in our shareholder letter. We ended the fourth quarter with $10.6 million in total revenue. As we have previously discussed, our total revenue is the combination of our main revenue streams: product revenue and development services and grant revenue. This quarter, $10.3 million came from our product revenue, representing a $4.3 million or 71% increase sequentially. Product revenue in Q4 2023 was just $0.9 million, marking a nearly 1,000% increase year-over-year. Our development services and grant revenue totaled $0.3 million this quarter, which was down from $1.8 million in Q3 and $3 million year-over-year. As we've discussed in the past, development services and grant revenue from large development programs are nonrecurring in nature, leading to greater fluctuations depending on the comparison period. The overall increase in revenue this quarter was primarily driven by the addition of new customers. As Kang mentioned, we shipped to 98 customers in the fourth quarter. Of these customers, only 3 accounted for greater than 10% of revenue, a decrease from 4 in the third quarter and an increase from 2 customers counted in the fourth quarter of 2023. Going forward, we plan to continue adding to our customer mix to diversify our revenue streams and provide more reliable product shipments as we get to a position of scale. Pivoting to our full-year results, we closed 2024 with $24.2 million in revenue. This represents a 167% increase from the $9.1 million in revenue we generated in 2023. This achievement was fueled by the increase in product sales as a percentage of total sales, supported by the impressive growth of our customer base. As a reminder, we shipped to 235 individual accounts in 2024. Moving to our profitability metrics, the gross margin was negative 21% for the quarter compared to negative 65% in Q3 of 2024 and negative 98% for the prior year period. For the full year, gross margin was negative 76% compared to negative 162% in the prior year period. The improvement is directly related to the launch of our SiCore product line, which has a positive gross margin contribution. As a reminder, we see significant gross margin variation as our product and services revenue mix fluctuates. Gross margins in 2024 were also impacted by preconstruction planning costs related to the Colorado facility, which were completed in October of 2024. Now moving on to our operating expense management. Our operating expenses for the fourth quarter were $9.5 million, an increase of $3.4 million or 55% compared with Q3 2024 and an increase of $3.6 million or 62% from the prior year period. OpEx increased from Q3 to Q4 as a result of higher R&D costs associated with operating expenses compared to cost of sales. This change coincides with the runoff of large development contracts as we pivoted to a revenue mix that is more heavily weighted toward product sales. The sequential increase in OpEx also included nonrecurring G&A stock-based compensation of $0.7 million in Q4, which was associated with a fully vested grant that was made by our former holding company, Amprius, Inc., for key employees and service providers prior to the assumption of stock options by Amprius Technologies and a nonrecurring loss on a write-down of property, plant, and equipment of $1.9 million in Q4. Year-over-year, the increase in OpEx was driven by increased investment in sales, the aforementioned reallocation of R&D from the cost of goods sold as development services agreements run out, and the same nonrecurring stock-based compensation charge and loss on a write-down of property, plant, and equipment. For the full year, our operating expenses were $27.9 million compared to $24 million in 2023. Our GAAP net loss for the fourth quarter was $11.4 million or a net loss of $0.10 per share, with 109.8 million weighted average number of shares outstanding. In Q3 2024, our net loss was $10.9 million or negative $0.10 per share with 110.4 million weighted average number of shares outstanding. Q4 2023 net loss was $9.7 million or negative $0.11 per share with 88.5 million weighted average number of shares outstanding. Our GAAP net loss included two nonrecurring charges that totaled $0.02 per share. The first onetime event was a loss on a write-down of property, plant, and equipment of $1.9 million as shown in our financial statements. The second is the stock-based compensation charge from Amprius, Inc. of $0.7 million. For the full year, net loss was $44.7 million or negative $0.45 basic and diluted EPS with 101.9 million weighted average number of shares outstanding compared to a net loss of $36.8 million or negative $0.43 per share with 86.2 million weighted average number of shares outstanding in 2023. As of December 31, 2024, there were 99 full-time employees, up from 92 at the end of the third quarter, with those employees primarily based in our Fremont, California location. Our share-based compensation for the fourth quarter was $2.4 million compared to $1.7 million in Q3 and $1.1 million in the prior year period. The sequential increase is primarily based on the nonrecurring grant of fully vested shares by Amprius, Inc. for key employees and service providers. For the full year, share-based compensation was $7.3 million compared to $3.9 million in 2023. This change is primarily due to changes in the Board of Directors and the previously mentioned nonrecurring grant of fully vested shares by Amprius, Inc. As of December 31, 2024, we had 116.9 million shares outstanding, which was up 5.6 million from the prior quarter. The change includes 5.5 million shares forfeited and canceled as part of the option assumption agreement with Amprius, Inc. prior to its dissolution. This decrease was more than offset by 0.3 million shares related to option exercises and RSU vestings and 10.8 million shares issued from our ATM reserve. Now turning to the balance sheet. We exited the year with $55.2 million in net cash and no debt. The $20.1 million net increase in cash is related primarily to the $22.6 million we generated through the issuance of common stock under our at market sales agreement. As of December 31, 2024, we had over $66 million left on the facility. Other key drivers for cash for the quarter included $6.1 million used in operating cash flow. We continue to remain lean with a $2.5 million to $3 million monthly run rate, excluding transaction-related costs. Our fourth quarter operating cash results included minimal nonrecurring expenses for the design and preconstruction work on the Colorado facility, which was completed in October of 2024. At this time, we do not expect future expenses related to the facility build-out. We also had $4.2 million of cash inflow associated with the return of our deposits for long lead time items related to the Colorado facility. This was partially offset by $0.6 million in property, plant, and equipment purchases for the Fremont facility. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward. Before I turn the call back over to Kang, I would like to take a moment to discuss our CapEx outlook for 2025. We expect to spend another $1 million on supporting equipment to complete the 2-megawatt line in Fremont in addition to normal operating capital requirements. Now that the designs are effectively complete for Colorado, we will continue to monitor the larger industry dynamics driving our ability to proceed further. The scope and schedule of the construction will be determined based on, among other factors, timing and availability of funding, along with monitoring the overall sector for changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations that may influence our decision, including whether to proceed with the construction at all. As Kang mentioned, we have secured adequate capacity for the foreseeable future through our contract manufacturing network and plan to expand that in 2025 without deploying our capital. That concludes my financial discussion, and I will now pass the call back to Kang.

Kang Sun, CEO

Thanks, Sandra. As we look ahead, our strategy at Amprius remains unchanged. Our top priorities are leading in technology innovation and product performance, ensuring world-class manufacturing capability and sufficient production capacity, growing our customer pipeline, and driving revenue growth while maintaining a healthy balance sheet. We are excited about the year ahead and looking forward to growing our business on the momentum we built in 2024. In 2025, Amprius expects to deliver new high-performance batteries, engage with more customers due to additional manufacturing partnerships, and elevate our business to another level. We believe that the opportunity ahead of Amprius is tremendous. Our team is confident in delivering what we have planned and the promise. We have begun the year strong, and we are looking to build increasing momentum throughout 2025. Over the next few months, we will be attending several industrial and financial conferences, and we hope to see you there. Thank you for your continued support of Amprius Technologies. With that, I will turn it back to the operator for Q&A.

Operator, Operator

Our first question comes from Colin Rusch with Oppenheimer.

Colin Rusch, Analyst

Kang, you've got such a big list of customers at this point, you've been able to close a handful of them into larger contracts. Can you talk a little bit about the diversity of applications that you're seeing getting tested for? How much customization is required for those customers? And how many are in late stages of evaluation where you might see something call in the next quarter or so where they would pull the trigger on a bigger purchase order?

Kang Sun, CEO

Okay. Thanks, Colin. We have 230 customers in 2024. This is at the top of our pipeline funnel. There are three types of customers. There are customers who already have devices and are using other batteries, and they just want to replace it with our battery. Those can be quick replacements, which we demonstrated in 2024 for the light electrical vehicle business and a small fraction of the aviation business that takes a couple of months to start using our battery. We will anticipate some business like this in 2025. The second type of customer has devices but they need to qualify them. They need to redesign the battery pack and validate our battery to fit into their application. This could take 9 months to a year in the qualification process. The third type of customer, for example, eVTOL, not only needs to qualify our products, but they need to certify their own product as well. Those tend to take longer. However, based on our 2024 experience, we are quite confident we can convert a large portion of those customers to purchase orders in 2025.

Colin Rusch, Analyst

And then in terms of your manufacturing base and your geographic exposure, can you talk about your strategy for incremental contract manufacturing potentially or other strategies around managing some of the dynamics around the changing pool environment?

Kang Sun, CEO

The contract manufacturing strategy has been very successful for us. We have established partnerships and have not spent a dollar on the ground for manufacturing capacity. We also have a lot of flexibility in terms of cell designs, and it has been quite a successful strategy so far. Many of these relationships require a certain scale. Currently, all our manufacturing facilities are located in China. We have three partners, and we offer all battery formats: silicon, prismatic, and pouch. We have also developed a manufacturing partnership in Korea, and we are evaluating the samples produced on their production line. Next month, we'll go to Europe to have conversations with another potential European contract manufacturer. We're doing this mainly for geopolitical reasons. In terms of cost, we have a very competitive manufacturing cost structure today, and I would say we can compete not only in the U.S. but also globally. Looking ahead, we definitely need to establish a global supply chain to support our contract manufacturing practice and to have global partnerships.

Colin Rusch, Analyst

Excellent. The last question is for Sandra. You supplemented the balance sheet in the fourth quarter. Can you provide an update on the year-to-date activity regarding that ATM? You've experienced a certain amount of volume and some volatility in the stock, creating opportunities. I'm looking for a sense of how active you have been in the market with that and an estimate of what the cash balance might be as you exit the quarter.

Sandra Wallach, CFO

So as of December 31, we went into a traditional blackout period because of our financial results. So we've not been in the market.

Operator, Operator

Our next question comes from the line of Jed Dorsheimer with William Blair.

Mark Shooter, Analyst

You have Mark Shooter on for Jed Dorsheimer. Congrats on the year and the new 53 customers this quarter, that's great to hear. I guess I'll dig in a little bit deeper on Colin's point, which is I was a bit surprised to hear you're looking to continue to expand and diversify and add more customers to your list. Can you walk us through the strategic decision to target many customers with smaller volumes versus fewer customers with larger volumes? Or does it just take this many engagements to land a large purchase order?

Kang Sun, CEO

Mark, most of the customers we are dealing with have high volume potential; otherwise, we wouldn't engage them, right? If a customer tells us their maximum need is 30,000 cells per year, we are not going to deal with them. Each customer we engage claims they have large volume potential, and we conduct our due diligence to assess their growth path and battery needs per device. This is a very competitive market. The more customers we can engage, the more opportunities for success. That's why we have a large pool of customers at this time, and over the next six months, we will filter through this pool. We must focus on high-volume customers as this makes manufacturing much easier. We don't customize our battery for each customer; we have 14 SKUs in our catalog, and we aim to reduce this to about 10 SKUs in the future. Most customers want to accommodate our cell format, which we refer to as the Amprius standard battery cell format.

Mark Shooter, Analyst

Thank you, that's very helpful. Talking about the aerospace and defense customers, I know you have a strategy to include a more geographically diverse production contract manufacturing in Korea, which you mentioned in Europe. I'm interested, have any of those customers walked away or not purchased yet because of the China supply?

Kang Sun, CEO

Surprisingly, none of the customers have walked away because of the source of supply. However, we do have a customer who has asked us to change the manufacturing base within 6 to 9 months to comply with their requirement for sourcing from friendlier countries.

Operator, Operator

Our next question comes from the line of Chip Moore with ROTH MKM.

Alfred Moore, Analyst

I wanted to ask on maybe just an update on the commercial side. Obviously, you're having good engagement with new customers. Maybe talk about investments you're making there on the SG&A. Is that someplace you're investing in? And I guess, what can you do there to help accelerate some of those commercial adoptions?

Sandra Wallach, CFO

Yes, Chip, this is Sandra. We definitely have increased our investment in sales. Over 2024, we tripled the size of our sales team. It's still small but mighty. Based on the fact that, as Kang mentioned, this is really a design-in win process, it just takes time to manage these accounts. G&A expenses were up because of some of the nonrecurring items that you saw in the financials.

Alfred Moore, Analyst

Got it. Appreciate it. And maybe a follow-up on the customer side, I think it was 77% outside the U.S. Any more color there on how to spread that out, is there concentration within that? Or how do you think about that shift to outside the U.S.?

Kang Sun, CEO

Yes, we expect to have more customers outside of the U.S. not because the U.S. business isn't growing, but because we have more international customers. Once we establish additional manufacturing partnerships, we expect to have strong customer inquiries outside of the United States.

Sandra Wallach, CFO

Yes. Just to clarify, the U.S. grew, no question. It just grew at a smaller rate, largely due to the global interest in our batteries.

Alfred Moore, Analyst

Perfect. Okay. Just the last one. I think you said you added over $16 million to backlog in Q4, and you've won some more orders this year. Could you clarify where backlog stands at year-end and how to think about visibility in 2025?

Sandra Wallach, CFO

Yes, let’s see. We just filed the 10-K, and we report out on our RPO of approximately $15.9 million at the end of December, excluding government grant revenue and then $17.2 million, including government grant revenue; all is expected to convert within the next 12 months. However, as you know, customers are placing POs quarter-by-quarter, which is more indicative of what we have fueling the first half of the year.

Operator, Operator

Our next question comes from the line of Derek Soderberg with Cantor Fitzgerald.

Derek Soderberg, Analyst

Congrats on the results here. I wanted to start with some of your Fortune 500 customers. It sounds like there's significant upside with them. What's it going to take to get maybe a sizable project expansion with those customers? What criteria are they looking for? Is it how the batteries perform in the market? Can you talk about the potential of getting to the next level with those customers?

Kang Sun, CEO

Okay, Derek. Regarding the two engagements we announced, one has a potential of about 2 gigawatt hours in purchase possibility related to the 6.3 ampere-hour cell we just delivered. Another one has about a million cells per year potential in high-end consumer electronics products, which are not our major focus but this customer's product currently relies solely on our technology. We have been engaging with other large corporations for different projects as well.

Derek Soderberg, Analyst

And Kang, earlier in the call, you laid out three types of customers for those Fortune 500 companies and opportunities. Where would you classify those?

Kang Sun, CEO

The first one is for electrical vehicles, which has a 2-gigawatt-hour opportunity. They have the vehicle already set up. That's not a problem. The evaluation of the battery is a significant part of this venture. They don't need to certify their vehicle, just to get our battery qualified. The second contract is even easier; it's a simple replacement, and our batch is expected to be qualified.

Derek Soderberg, Analyst

Got it. That's helpful. Regarding the second customer, are they looking to use a battery platform that you're already commercializing today, or is this a next-generation battery platform? Can you discuss that?

Kang Sun, CEO

Yes, the chemistry of the cell is the same. We have had this battery manufactured since 2018. However, the cell format is slightly different, and this is likely the smallest battery that Amprius has ever made.

Derek Soderberg, Analyst

Got it. That's super helpful. And then Sandra, based on the visibility you have into demand this year, some large programs expected to hit, how should we think about gross margin moving from negative to positive? Can you talk about the progression?

Sandra Wallach, CFO

Yes. We have talked about the fact that SiCore sales are gross margin positive from day one, which has helped to drive the gross margin to negative 21% in Q4. This is balancing historical negative margins from our operations in Fremont due to capacity constraints. Most of the growth will come from SiCore, so I think we will see positive movements in gross margin.

Operator, Operator

Our next question comes from the line of Jeff Grampp with Alliance Global Partners.

Jeff Grampp, Analyst

I was curious to go back on the topic of pipeline and future business opportunities. Kang, on the spectrum of sizes of these various customers you're talking to, how would you contextualize these ones that you've won, in the realm of $15 million or $20 million? Where do those rank? Can you book-end or indicate what an average could be?

Kang Sun, CEO

Yes. All those customers have the potential to reach that level of order size, meaning $10 million or $15 million, even $50 million sales. In 2025, we don't think they will all reach optimized purchase volume, but we will see orders at the current level of $10 million to $20 million, maybe even $30 million.

Jeff Grampp, Analyst

Okay. That's helpful. To what extent are you diversifying the contract manufacturing base you have, and is that explicitly for trade-related contingencies, or are there factors like customer preferences?

Kang Sun, CEO

Yes. It's always good to have a diversified manufacturing base. We have different types of customers located in various regions. Even without geopolitical issues, having different manufacturing bases is beneficial. Currently, we rely heavily on Asia for our supply chain, particularly China, where we have the best quality, fastest turnaround, and lowest cost. However, we are working on establishing our facilities in Korea and Europe to address geopolitical concerns while continuing to meet customer needs.

Operator, Operator

Our next question comes from the line of Ted Jackson with Northland Securities.

Ted Jackson, Analyst

Thank you very much. Congratulations on the quarter. My first question for you is, looking at your customers. You have about 235 customers, and you had 182 new customers just in the year, meaning three-quarters of your customer base is new to you. You commented that you had 25% of your revenue in the fourth quarter come from the LED segment. I'm curious when you look at the end markets you've been selling into, what was the mix of those end markets with the 48 or whatever is the total amount of customers that you had in '23? What was the mix in '24? How did it shift? And as you look at the opportunities in front of you for '25, how do you see that mix changing further?

Kang Sun, CEO

Makes sense. Yes. In '23 to '24, we certainly had engagement in the electrical vehicle business. In 2023, we didn't have any participation at all. The customers came to us, realizing our battery specs were ideal for their applications. The market size is large and the qualification time is much shorter, which is why we decided to enter the light electrical vehicle market. 2024 confirmed it was a successful engagement. We anticipate more light electric vehicle business in 2025 while the aviation market continues to grow, but electrical vehicle business is expanding significantly.

Ted Jackson, Analyst

If I consider the first quarter of 2024, was the LED segment essentially absent? In the fourth quarter, it represented 25% of our revenue. Should I expect it to exceed 25% as we progress through 2025?

Kang Sun, CEO

That would happen. Yes. For two reasons. The first reason is we have some customers with larger volumes and early-stage adopters. They see our battery as perfect for their designs, meaning they don't require extensive time for qualification. So we anticipate that our electrical vehicle revenues will exceed 25%.

Ted Jackson, Analyst

Okay. My second question, I know it's not really a great metric, but it's kind of a thing to look at to see your progress in larger orders and shipments really going commercial. If I look at revenue per customer, and I assess it over the last four quarters, it went from $28,000 to $60,000, then $64,000, then to $105,000. What that indicates is that you're seeing some of these new design wins come to fruition and become production-level shipments. Will your revenue become more driven by existing customers? Or will you continue seeing significant new customer additions in '25?

Kang Sun, CEO

Yes, existing customers will certainly contribute more revenue than new customers, but we are still seeing a robust pipeline. In 2025, the existing customer base will drive revenue growth while we selectively add new customers. The solid customer base means our sales focus this year will rely heavily on supporting our current customers through the commercialization stage.

Ted Jackson, Analyst

What do you think about the new customer mix? Do you expect to add somewhere between 100 to 200 new customers still in '25, or do you anticipate that slowing down?

Kang Sun, CEO

Yes, we have a very solid coverage of the aviation market today, including fixed-wing electrical aircraft and drones. However, new emerging companies in sectors like drones are increasing rapidly. While we will be more selective in 2025, we are optimistic about adding new customers this year, but we will focus on the current customers moving towards commercialization.

Ted Jackson, Analyst

The new customers you had in '24—specifically regarding the SiCore—can you provide a sense of the mix between SiMaxx and SiCore?

Kang Sun, CEO

Primarily, I would say 90% for SiCore because SiCore is readily available. We have the capacity to support as customers come to us. They not only look for performance, especially sizable customers, but also need to see manufacturing capacity available to engage us. SiCore, with 1.8 gigawatt-hours capacity, makes customers comfortable engaging with us.

Ted Jackson, Analyst

I have a question about your company at the end of 2024 regarding your number of customers. What was the count you had at the end of fiscal '23?

Sandra Wallach, CFO

You know what, Ted, let me pull that from our filings, and I'll send that over to you.

Operator, Operator

Our next question comes from the line of Amit Dayal with H.C. Wainwright.

Amit Dayal, Analyst

With respect to the revenue cadence for 2025, can you provide any color on whether we should expect sequential improvements through 2025 relative to what the fourth quarter results are?

Sandra Wallach, CFO

Yes. I think we would expect to see sequential improvements. We're not a seasonal business per se, but I think the first quarter has just some headwinds due to changes in the funding landscape. We are confident about the growth potential for the year, but we expect Q1 to be a bit tougher.

Amit Dayal, Analyst

Understood. And a follow-up regarding that with you offline. Gross margins, Sandra, is there a level you sense revenue-wise that you think you can start turning gross margin positive? Is it like $15 million to $20 million, or higher?

Sandra Wallach, CFO

We haven't given guidance on that yet. We're still working on a target model, but we don't have anything concrete today.

Amit Dayal, Analyst

Okay. And maybe for Kang, with respect to larger applications like eVTOL, how different is the battery chemistry or technology relative to what you are already shipping to customers? What improvements need to be made to win some of those types of orders?

Kang Sun, CEO

For eVTOL, we already qualified with one customer application. Our chemistry is very robust. I would say we don't need to change much in the chemistry to support this market. When we say aviation, we generally use the same cell chemistry with slight adjustments. For example, customers want more energy or power; we can make changes to satisfy them. There is no major invention involved as the baseline we provide can be applied to all applications in this market segment.

Amit Dayal, Analyst

That's all I have. Other questions have been asked. I'll follow up with you guys offline.

Operator, Operator

Thank you. At this time, this concludes our question-and-answer session. If you have any additional questions, you may contact Amprius' investor relations team at ir.amprius.com. I'd now like to turn the call back over to Dr. Sun for his closing remarks.

Kang Sun, CEO

Thanks, everyone, for joining us today. As a reminder, you can find out more about our company, receive additional updates, and learn about the upcoming events and presentations from the investor relations section of our newly revamped website. I hope you can check it out, and we look forward to updating you on the exciting progress we are making in transforming the electrical mobility market. Finally, I'd like to thank our employees, partners, and shareholders for their continued support.

Operator, Operator

Thank you for joining us today for Amprius Technologies Fourth Quarter and Full Year 2024 Earnings Conference Call. You may now disconnect.