Strategic Performance Drivers

• Achieved record Q1 revenue of $28.5 million, a 153% year-over-year increase, driven by the rapid adoption of SiCore silicon anode batteries across the unmanned aerial systems (UAS) market.

• Successfully transitioned the product mix to SiCore, which now represents 97% of product revenue, effectively phasing out the legacy SiMaxx platform to focus on higher-performance technology.

• Secured a landmark $21 million multi-quarter order from a leading Chinese light electric vehicle (LEV) customer, validating competitive performance in a region dominated by established battery giants.

• Capitalized on record U.S. defense spending through long-term partnerships with major contractors like AeroVironment and Teledyne FLIR, whose recent contract wins provide high visibility into future purchase orders.

• Expanded the ‘Espresso advantage’ narrative, emphasizing that high energy density allows customers to double flight times or travel distances without increasing battery weight or volume.

• Strengthened the U.S. market presence, with North American revenue share increasing significantly as domestic customers prioritize NDAA-compliant, high-performance power sources.

Outlook and Strategic Initiatives

• Raised full-year revenue guidance to at least $130 million, reflecting healthy demand indicators, a growing backlog, and increasing production volumes from manufacturing partners.

• Anticipates a reacceleration of sequential top-line growth in the June quarter, supported by additional capacity coming online from Korean and U.S. manufacturing partners.

• Maintains 2026 adjusted EBITDA guidance of at least $4 million, assuming margin recovery in the second half as SiMaxx overhead costs dissipate and collections normalize.

• Focusing on standardization of pouch cells through the Defense Innovation Unit (DIU) contract to reduce costs and simplify logistics for government and defense applications.

• Targeting expansion into the robotics market, specifically for unstructured environments where high energy density is critical for balancing actuation demands with AI processing intensity.

Operational and Financial Context

• Gross margin stepped back to 20% in Q1 due to over $3 million in increased overhead from the SiMaxx product line phase-out and one month of expenses from the Colorado facility.

• Settled the Colorado facility lease obligation for $20 million, avoiding over $110 million in future expenses and significantly reducing long-term liabilities.

• Announced a strategic warrant exchange agreement to convert 7.1 million public warrants into common stock, aimed at reducing future dilution and mitigating short interest pressure.

• CapEx for 2026 is expected to remain below $10 million, primarily funded through the DIU contract, focusing on enhancing prototype line capabilities in Fremont.