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    ENVX
    Earnings call· Jun 2026(Q2 FY26)

    Enovix Q2 FY26 earnings call ENVX

    Aug 12, 2026 Source

    Executive summary

    Enovix Q2 FY26 — Smartphone Qualification Milestone & Smart Eyewear Commercialization

    Enovix demonstrated significant progress across its key markets in Q2 FY26, achieving a critical smartphone qualification milestone and initiating commercial shipments for smart eyewear. The company also saw robust growth in its drone and defense pipeline, reinforcing multiple paths for future expansion. Manufacturing improvements continue, with a new COO focused on scaling operations and driving efficiency.

    Highlights

    5

    • Lead smartphone customer confirmed cells passed more than 1,000 cycles on the 0.2C discharge test.

    • Smart eyewear production ramp began, with approximately 2,100 batteries shipped in Q2 and ~19,000 packs expected in Q3.

    • Drone, defense, and industrial pipeline grew 41% to $183 million, with drones alone exceeding $100 million.

    • Q2 revenue of $9 million was at the high end of guidance, up 21% year-over-year and 19% sequentially.

    • Non-GAAP operating loss of $28.8 million was better than the guidance range of $29 million to $32 million.

    Concerns

    3

    • Zone 1 dicing remains the primary throughput bottleneck, despite yield improving to 84% from 80% in Q1.

    • Smart eyewear ramp is expected to be negative margin for the balance of the year due to early costs before volumes reach scale.

    • The final accelerated smartphone cycle life test is still underway, with completion expected by the end of 2026.

    Guidance & targets

    11
    CategoryTargetConfidence
    Q3 Revenue
    $9M-$10M
    high materiality
    High
    Q3 Non-GAAP Loss from Operations
    $29M-$32M
    medium materiality
    High
    Q3 Non-GAAP Net Loss Per Share
    $0.13-$0.17
    medium materiality
    High
    Q3 Capital Expenditures
    $8M-$12M
    medium materiality
    High
    Smartphone Final Accelerated Cycle Life Test Completion
    By end of 2026
    high materiality
    High
    Second Smartphone OEM Sample Deliveries
    Begin in Q4
    medium materiality
    High
    Smart Eyewear Remaining 50,000 Unit Order Shipment
    Remaining balance in Q4
    medium materiality
    High
    MX1-B01 Additional Production Equipment Operational
    By mid-2027
    medium materiality
    High
    MX1-B01 Initial Commercial Shipments and Revenue
    To follow mid-2027 capacity online
    medium materiality
    High
    MX-2 Energy Density Target
    400 watt hours per kilogram
    low materiality
    High
    South Korea Next Phase Capacity Online
    Mid-2027
    medium materiality
    High

    Operational metrics

    23
    Revenue
    $9Mup 21% YoY, 19% QoQ
    Q2 FY26

    At the high end of guidance.

    GAAP Gross Profit
    $1.3M
    Q2 FY26

    Representing a GAAP gross margin of 14.4%.

    Non-GAAP Gross Profit
    $1.8M
    Q2 FY26

    Representing a non-GAAP gross margin of 19.9%.

    Non-GAAP Gross Margin
    22.8%up from 21.3% YoY
    H1 FY26

    First half non-GAAP gross margin.

    Non-GAAP Operating Expenses
    $30.6Mvs $28.8M YoY
    Q2 FY26

    Reflects continued spending on smartphone qualification, product development, and manufacturing readiness.

    Non-GAAP Loss from Operations
    $28.8Mbetter than $29M-$32M guidance
    Q2 FY26

    Came in better than guidance range.

    Adjusted EBITDA
    -$18.9Mvs -$20.1M in Q2 FY25
    Q2 FY26

    Improved year-over-year.

    Non-GAAP Net Loss Per Share
    $0.13unchanged YoY
    Q2 FY26

    At the favorable end of guidance range of $0.13-$0.17.

    Net Cash Used in Operating Activities
    $21.8Mdown from $25.9M in Q2 FY25
    Q2 FY26

    Operating improvement primarily reflected favorable working capital changes.

    Capital Expenditures
    $9.6M
    Q2 FY26

    Principally supporting manufacturing readiness and capacity expansion.

    Cash, Cash Equivalents and Marketable Securities
    $552.1M
    Q2 FY26

    Including restricted cash, as of quarter-end.

    Smart Eyewear Batteries Shipped
    2,100
    Q2 FY26

    Recognized first smart eyewear product revenue from a Tier 1 customer.

    Smart Eyewear Delivery Orders in Hand
    19,0009x increase from Q2
    Q3 FY26

    Planned for delivery in Q3, part of a 50,000 unit pack order.

    Smart Eyewear Total Unit Pack Order
    50,000
    FY26

    Remaining balance expected to ship in Q4.

    Drone, Defense, Industrial Pipeline in Active Evaluation/Testing
    $40M
    Q2 FY26

    Customers are actively evaluating and testing cells or designing them into products.

    MX1-B01 Energy Density
    360
    Q2 FY26

    Supports high continuous and pulse discharge, designed to improve mission execution, flight time, range, and payload capability.

    MX-2 Energy Density Target
    400
    FY27

    Next-generation product targeted for 2027.

    AI-2 Volumetric Energy Density
    20%higher than AI-1
    Q2 FY26

    Expected to be achieved by combining thinner materials, better packaging efficiency, and higher cathode voltage through EX-3M technology node.

    Smart Eyewear Cell Output
    well ahead of internal plan
    Q2 FY26

    Reflects continued improvements across Fab2.

    Integral Yield (Fab2)
    improvedfor 3 consecutive quarters
    Q2 FY26

    Cumulative yield across the entire production line.

    Zone 1 Dicing Yield
    84%up from 80% in Q1
    Q2 FY26

    Remains the primary throughput bottleneck.

    Zone 1 Dicing Process Steps Yield
    95%
    Q2 FY26

    Outside Zone 1, all but one process step operate at yields of at least 95%.

    South Korea Drone Business Capacity (New Equipment)
    1M
    Annual

    Capacity from new equipment ordered for MX1-B01, expected to be operational by mid-2027.

    Industry KPIs

    2
    MetricValueDetails
    Orders bookings growth41%%
    Backlog by segment end market$183MUSD

    Orderbook & backlog

    2
    Drone, defense, industrial pipeline$183MQ2 FY26

    up 41% from $130M in Q1

    Represents estimated peak annual production value; lifetime opportunities often many multiples more. Over $40M is at stages where customers are actively evaluating and testing cells or designing them into products. Revenue and scale aligns with Korea capacity coming online in mid-2027.

    Smart eyewear delivery orders in hand19,000 packsQ2 FY26

    9x increase from Q2 shipments

    Planned for delivery in Q3 FY26. Part of a 50,000 unit pack order, with the remaining balance expected to ship in Q4 FY26.

    Product announcements

    3
    ProductTypeDetails
    AI-2milestone
    MX1-B01launch
    MX-2roadmap

    Capital programs

    1
    South Korea MX1-B01 Production Capacity Expansionunderway
    Period spend: Part of Q3 FY26 CapEx guide ($8M-$12M)
    Start: Q2 FY26 (equipment ordered)

    Benefit: 1 million units/year (for drone business)

    A very capital-efficient expansion, utilizing existing land and buildings owned by the company and using readily available equipment. Goal is to ensure capacity does not limit conversion of pipeline opportunities.

    Risks & headwinds

    3
    Zone 1 dicing throughput bottleneckOngoing, expected to improve by year-end.

    Yield improved to 84% from 80% in Q1, but remains the primary throughput bottleneck.

    Mitigation: Implementing a hybrid dicing configuration (laser and mechanical processes) designed to lift throughput to multiples of today's rate. Key mechanical dicing steps expected to come online around year-end.

    Smart eyewear ramp's impact on gross marginQ3 and Q4 FY26.

    Expected to be negative margin for the balance of the year.

    Mitigation: Expects margins to rationalize as volumes reach scale in 2027 and beyond.

    Product mix in South Korea businessQ3 FY26.

    Can cause quarter-to-quarter gross margin variability.

    Mitigation: Management continues to manage spending with discipline and align investments with measurable customer product and manufacturing milestones.

    What to watch in Q3 FY26

    5

    Final accelerated smartphone qualification test completion

    End of 2026
    CurrentUnderway with hybrid protocol
    TargetCompletion of testing

    Why it matters

    Essential for commercial introduction with the lead smartphone customer and a key de-risking event for the smartphone market entry.

    We anticipate completing this final test in 2026.

    Q&A highlights

    7

    How should investors think about smart eyewear volumes to reach optimal margin levels and the timeline to achieve this?

    The smart eyewear market is in the millions of units, and Enovix is sampling to various customers, receiving strong feedback on energy density. While Q2 shipments were nominal, the company expects negative margins for the balance of the year due to early ramp costs. Healthy gross margins are anticipated as volumes scale in 2027 and beyond.

    “The market itself, as I said the last quarter, the market is multiple millions of units and expected to grow year after year. We are sampling now to different customers who are in like various stages of building the products. Exactly how much we'll ship will depend upon how successful their products are and what share we win.”

    asked by Colin Rusch · answered by Raj Talluri

    2 min read5 chapters

    Detailed Narrative

    01

    Smartphone Qualification Progress

    Enovix achieved a significant milestone in smartphone qualification, with its lead customer confirming cells passed over 1,000 cycles on the 0.2C discharge test. The company is now progressing with an accelerated cycle life test using a hybrid protocol, expected to conclude by the end of 2026. Sample deliveries to a second smartphone OEM are anticipated in Q4, leveraging the established qualification pathway.

    02

    Smart Eyewear Commercialization

    The smart eyewear market has entered its revenue generation stage, with Enovix shipping approximately 2,100 AI1 batteries in Q2 and recognizing its first product revenue. The company holds delivery orders for about 19,000 packs for Q3, part of a larger 50,000-unit order expected to be fulfilled by Q4. This progress follows the completion of key international safety certifications.

    03

    Drone & Defense Pipeline Expansion

    Enovix's pipeline for drone, defense, and industrial products manufactured in South Korea expanded by 41% to $183 million, with drone opportunities alone surpassing $100 million. Over $40 million of this pipeline is in active customer evaluation and testing. The MX1-B01 product, offering 360 Wh/kg, was introduced, and additional production equipment has been ordered for mid-2027 operation, leveraging the TAA-compliant South Korea facility.

    04

    Manufacturing & Operational Improvements

    Fab2 showed continued manufacturing improvements, particularly in smart eyewear production, with integral yield improving for three consecutive quarters. Zone 1 dicing yield increased to 84% from 80% but remains a throughput bottleneck. A hybrid dicing configuration is being implemented, with key mechanical steps expected online by year-end, aiming for a significant increase in throughput. Michael Vyvoda was appointed COO to oversee manufacturing, supply chain, and quality.

    05

    Technology & Innovation Pace

    The company is accelerating its pace of innovation, producing the first AI-2 engineering samples in Q1, which are expected to deliver 20% higher volumetric energy density than AI-1. This is achieved through thinner materials, better packaging, and EX-3M technology. Enovix is also developing AI models to predict cycle life outcomes faster, aiming to reduce development time and enhance competitive advantage.

    AI-generated summary of the company’s earnings call. Not investment advice.