QuantumScape Corp Q2 FY2024 earnings call

• Announced a landmark agreement with PowerCo, Volkswagen Group's battery company, which extends cash runway into 2028, includes a $130M prepayment of royalties, and covers a license for QSE-5 product with production volume options. • Shipped Alpha-2 prototype cells to multiple automotive and consumer electronics customers. • Progress on Raptor process for fast separator production, with plans to shift resources to Cobra development. • Published safety testing results showing prototype cells have thermal stability up to 300°C, safer than conventional lithium-ion cells. • Capital expenditures in Q2 were $18.9M, with full-year CapEx guidance $70M-$120M, and adjusted EBITDA loss guidance $250M-$300M.

• Capital expenditures in Q2 were $18.9 million, with full-year CapEx guidance between $70 million and $120 million. • GAAP operating expenses and GAAP net loss were $134.5 million and $123 million respectively in Q2. • Adjusted EBITDA loss guidance for full-year 2024 is between $250 million and $300 million. • Cash runway extended into 2028, an 18-month extension relative to previous guidance, driven by PowerCo's investment, resource contribution, and $130 million royalty prepay.

• Uncertainty posed by the difficulty in predicting future outcomes. • Risks cited in shareholder letter, Form 10-K, and other SEC filings that could cause actual results to differ materially from forward-looking statements.

Q: Congrats on the deal with PowerCo. What's the timeline impact on B-sample timing and commercialization?

A: Big goals for the year like getting Alpha-2 to customers, starting low-volume B-sample production this year, ramping Raptor and preparing for Cobra remain unchanged; next year's goals like high-volume B-samples also unchanged.

Q: How does the licensing model monetization work with PowerCo?

A: Details in the 8-K attached IP licensing agreement, including royalty rate and outperformance sharing, but specific details not disclosed further to maintain negotiation flexibility.

Q: When can QuantumScape access the $130 million prepaid royalties?

A: Contingent on satisfactory technical progress like B-sample shipments, Cobra progress, and final target cell design; usable for cash runway purposes as received.

Q: How does the joint team work differ from Raptor and Cobra work?

A: Basic work on QSE-5 platform is done by QuantumScape, joint team of ~150 experts will industrialize it to gigawatt scale, starting in San Jose and moving to PowerCo site as manufacturing ramps up.

Q: Specific new markets opened by safety metrics?

A: Long-haul trucks, where inherently safer technology helps with safety standards for megawatt-hour battery packs; also consumer electronics and other applications where better safety is beneficial.

Q: Thoughts on consumer electronics and eVTOLs?

A: Received interest from consumer electronics, with Alpha-2 shipments to such customers; in eVTOLs, differentiated technology with energy and power capabilities is relevant, but initial focus is automotive with PowerCo deal.