Hello, everyone, and welcome to our conference call covering our fourth-quarter and full-year 2025 results. Joining me today are Qichao Hu, Founder and Chief Executive Officer, and Jing Nealis, Chief Financial Officer.

We issued our shareholder letter just after 4:00 p.m. today, which provides a business update as well as our financial results.

You'll find a press release with a link to our shareholder letter and today's conference call webcast in the Investor Relations section of our website at ses.ai. Before we get started, this is a reminder that the discussion today may contain forward-looking information or forward-looking statements within the meaning of applicable securities legislation.

These statements are based on our predictions and expectations as of today. Such statements involve certain risks, assumptions, and uncertainties which may cause our actual or future results and performance to be materially different from those expressed or implied in these statements.

Risks and uncertainties that could cause our results to differ materially from our current expectations include, but are not limited to, those detailed in our latest earnings release and in our SEC filings. On this call, we are introducing non-GAAP financial measures as a supplement to our GAAP results.

These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate alternative measures of the company's operating performance that may be useful. These non-GAAP measures should not be considered in isolation or as a substitute for any GAAP measure, and our definitions may differ from those used by other companies reporting similarly titled measures.

Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our latest earnings release. With that, I'll pass it over to Qichao.

Thanks, Kyle. Thanks, everyone, for joining today.

We had an exciting 2025 with full-year revenue of $21 million compared to a little over $2 million for 2024. Jing will walk through our financials and the outlook shortly.

This tremendous growth was due to the final contributions from our services agreements with Honda and Hyundai as we completed our EV development work with them. We also had 3.5 months of revenue from the acquisition of UZ Energy for our energy storage, ESS, business.

While we're pleased to report full-year revenue in the range of our previously issued guidance, it's the milestone we reached and the year-over-year growth we are expecting from full-year contributions in our three revenue-generating business units, and for recognizing potential value in the Molecular Universe that has us really excited. I'm very proud that we made more progress in the past year than the previous 10-plus years combined.

This development of the Molecular Universe has sped things up for us. SES continues to be well-positioned to solve the issues of battery development and safety requirements.

With the Molecular Universe, our own in-house AI-for-Science company, we have the ability to help customers overcome standard timelines in the adoption of new technology. We also have a front seat to see how energy transition needs are requiring more integration of AI software and hardware along with precise battery health monitoring.

As we described before, SES has three revenue-generating business units: ESS, drones, and materials. ESS, which is the largest market for batteries, is bigger than EVs and bigger than drones.

At Battery World 2024, we announced our entry into the ESS market, and through our acquisition of UZ Energy, we are now serving customers across the globe from Australia to Europe to the Middle East, and now we are entering the North American market. ESS business is our largest near-term revenue driver.

UZ Energy is a leader in commercial and industrial ESS and has sold almost a gigawatt hour of hardware to customers ranging from residential to C&I to grid. We're now able to collect a large amount of historical ESS LFP graphite data, and then for all future UZ products, we plan to incorporate our predict feature from Molecular Universe into a small box to achieve near-zero drift state of charge, SOC, degradation, health, safety, and other SOX algorithms and automated non-disruptive recalibration, which helps improve UZ's ability to predict battery health and reduce maintenance costs for customers.

Energy storage systems are financial assets. The value to our customers depends on delivering consistent and long-term performance.

Historically, UZ supplied only the hardware to customers, mostly LFP and graphite lithium-ion cells. Now, since we acquired UZ, SES has the opportunity to provide an operating system to the hardware and sell customers a complete package to meet their ESS needs.

We're seeing some early traction with UZ's sales efforts as they were able to sign a multi-year $20 million contract with a major distributor recently at the Intersolar conference. Drones are the next business unit I want to highlight.

The drones market requires high energy density and high power density batteries to achieve longer flight time and greater payload. This is where our lithium metal and high silicon carbon lithium-ion batteries really shine.

The US defense drones market in particular is where we see the most consequential near-term opportunity and where we are devoting most of our attention and investment. It's worth spending a moment on why the drone market is a natural fit for deploying our lithium metal anodes and proprietary electrolyte.

One, a drone battery needs double the energy density of conventional lithium-ion. Ultimately, you need at least 400 watt-hours per kg to be state of the art and a realistic roadmap to 500 watt-hours per kg to win.

In other words, range and payload matter. Drone batteries need a high C-rate and power for the drone to maneuver and accelerate.

We've solved for this. Third, drone batteries need to be manufactured at scale.

We've demonstrated this in our EV B-sample developments. Fourth, drone batteries need abundant and inexpensive materials, and the military demands the supply chain to be National Defense Authorization Act, or NDAA, compliant.

We recently announced we expect to convert our EV B-sample line in Chungju, South Korea, facility to manufacture NDAA-compliant cells for drones. This is the same facility that we developed and built the world's first 100 amp-hour largest lithium metal cell back in 2021, and this facility has been NDAA-compliant since 2021.

To meet the drone demand, we plan to convert our lines from EV pouch 100 amp-hour cells to 10 amp-hour pouch cells. In this line, we're also planning to deploy our AI-for-safety and AI-for-manufacturing to ensure quality and cost-effectiveness.

In addition to our Korea facility, we're also exploring even larger NDAA-compliant and more versatile cell form factor manufacturing capacities in Southeast Asia. We'll have more to update on our NDAA-compliant manufacturing capacity and locations later this year.

Our third revenue-generating business unit is materials. Both SES and our Molecular Universe users have also been discovering new electrolyte materials for other applications that we don't build cells for currently.

Last fall, we announced a JV with Hisun to leverage their 150,000-ton annual global capacity to produce these materials at a commercial scale to supply to other battery manufacturers for consumer electronics and ESS. At this time, we are anticipating that the Hisun JV will only produce materials for Molecular Universe discoveries.

Through the Molecular Universe, we discovered six breakthroughs that are currently being tested by over 40 customers. These breakthroughs, which will be the basis of the revenue we expect from this business in 2026, include: one, better cycle life and storage for EV applications; two, better cycle life and power density for drones; three, better low-temperature cycle life and power density for heavy-duty trucking; four, better cycle life and longer life for consumer electronics; fifth, better cycle life and low-temperature performance for ESS and EVs; and six, better cycle life and storage for consumer electronics.

We also have a pipeline of new breakthroughs that are being tested by customers, which we expect will provide further potential revenue for this business. Last but not least, is what we have been referring to as our own AI-for-Science company, that is, of course, Molecular Universe.

I want to be clear on how we view the MU's role in this company. While its SaaS revenue continues to build momentum and is expected to make a small contribution in 2026, its biggest contribution is the inherent value of this business on its own, and the IP that drives competitive advantage in the ESS, drone, and materials business.

Molecular Universe has the potential to become a modern-day encyclopedia with battery being its volume one. It provides extremely valuable scientific data and intuition to AI-for-Science models.

Over the course of the year, we will continue to explore how we can best demonstrate or unlock MU's value. In terms of demonstrating that value, I will point to our recent investor presentation.

In that presentation, we noted there are several AI-for-Science companies that are either pre-revenue or have less revenue than the MU that have already pegged valuations exceeding $1 billion through private capital raises. These are the closest comps to the Molecular Universe, we're keeping an eye on how well these transactions have performed.

We're really excited about the long-term value of Molecular Universe as a platform not just for batteries, but all science, as well as the near-term revenue growth from drones, materials, and ESS operating systems. Our priorities for 2026 and beyond are: one, leverage the new business unit leadership and structure to execute on the ESS and drone cell opportunities ahead of us.

We've brought on industry veterans to lead these efforts, as well as hardware and software integration cell. Second, execute on the conversion of our NDAA-compliant line in Korea from EV cells to drone cells, and line up additional capacity in Southeast Asia that is also NDAA-compliant.

Third, continue the growth of UZ Energy's existing hardware business in Australia, Middle East, and Europe, and begin expansion into the US. Fourth, deliver on existing novel electrolyte discovered by the Molecular Universe into materials business and expand our pipeline.

Fifth, leverage MU's material discovery capabilities to accelerate new product development. Sixth, continue to focus on our capex-light business model in ESS cells and materials to offset the projected R&D spend in the Molecular Universe.

Before I turn it over to Jing, I want to express my gratitude for our teams who are working super hard to make all of this happen, and thanks to all of you for being on this journey with us. Now, here's Jing for financial updates.

Thank you. I will discuss our financial performance for the fourth quarter and full year of 2025 and provide context on how we're deploying our capital to support SES AI's long-term growth and the strategies Qichao outlined earlier.

Revenue for the fourth quarter of 2025 was $4.6 million, representing a $2.6 million, or 124%, increase year over year. Full-year revenue came in at $21 million, in line with our guidance, but impacted primarily by logistics constraints that delayed shipments at the end of the year, resulting in approximately $1.5 million of revenue being pushed out to the first quarter of 2026.

As Qichao noted earlier, revenue for full-year 2025 was within our previously issued guidance range of $20 million to $25 million, and was up nearly tenfold from the prior year, a year in which we first achieved revenue generation. Our Q4 gross margin on a GAAP basis was 11.3%, driven by the higher mix of ESS product sales in the quarter, which carries a lower margin profile relative to our service revenue.

On a non-GAAP basis, which excludes stock-based compensation as well as depreciation and amortization allocated to cost of revenue, our Q4 non-GAAP gross margin was 11.7%. For full-year 2025, our GAAP and non-GAAP gross margin was 53.8% and 55.7%, respectively.

As we have noted previously, we expect gross margin to vary from quarter to quarter as our revenue mix across products, SaaS, and services evolves. We expect the gross margins on our product revenue to improve as we scale volume and optimize the cost structure through our capex-light business model and JV partnerships.

Turning to operating expenses, our GAAP operating expenses for the fourth quarter of 2025 were $18.2 million compared to $30.4 million for the same period prior year, a 40% decrease year over year. On a non-GAAP basis, which excludes stock-based compensation as well as depreciation and amortization, fourth-quarter operating expenses were $13.5 million compared to $24.2 million for the same period prior year, a 44% decrease.

For full-year 2025, our GAAP operating expenses were $93.9 million compared to $110.5 million in 2024, a 15% decrease. On a non-GAAP basis, full-year operating expenses were $73 million versus $82.3 million in 2024, an 11% decrease.

The year-over-year improvement in operating expenses on both GAAP and non-GAAP basis reflects the progress we have made in optimizing our cost structure while continuing to invest strategically in Molecular Universe platform and our commercial growth initiatives. Adjusted EBITDA for the fourth quarter of 2025 was a loss of $13.8 million compared to a loss of $23.2 million in the fourth quarter of 2024, representing a 40% improvement.

For the full-year 2025, adjusted EBITDA was a loss of $62.6 million compared to a loss of $81.5 million in the full-year 2024, a 23% improvement year over year. We believe this growth reflects the positive operating leverage beginning to emerge in our business as revenue scales, as well as our sustained focus on financial discipline and cost management across the organization.

Our GAAP net loss for the fourth quarter was $17 million, or 5 cents loss per share. Excluding stock-based compensation, depreciation, and amortization, changes in fair value of sponsor earn-out liabilities, and including interest income, our non-GAAP net loss for the fourth quarter was $11.8 million, or 4 cents loss per share.

This is an improvement over 2024 fourth quarter's GAAP net loss of $34.5 million, or 11 cents loss per share, and non-GAAP net loss of $19.9 million, or 6 cents loss per share. For the full-year 2025, our GAAP net loss was $73 million, or 22 cents loss per share, compared to a GAAP net loss of $100.2 million, or 31 cents loss per share, in 2024.

On a non-GAAP basis, full-year net loss was $53.2 million, or 16 cents loss per share, compared to a net loss of $66.4 million, or 21 cents loss per share, in 2024. The year-over-year improvement on both GAAP and non-GAAP basis reflects the progress we're making in scaling revenue and managing our cost structure as we advance customer engagements, develop the Molecular Universe platform, and position the business for growth in 2026.

A detailed reconciliation of GAAP net loss to adjusted EBITDA and non-GAAP net loss per share is included in the financial tables at the end of the shareholder letter. I want to highlight that our GAAP net loss in any given quarter can be meaningfully impacted by non-cash mark-to-market movements in the fair value of our sponsor earn-out liabilities, which are required to be remeasured each reporting period under GAAP.

These non-cash gains or losses are not reflective of our underlying operating performance, and we believe excluding them provides a clearer picture of the progress we're making in the business. This is one of the reasons we're introducing adjusted EBITDA beginning this quarter.

We utilized $10.4 million in cash for operations during the fourth quarter and $58.4 million for the full-year 2025. We deployed $3.3 million on the UZ acquisition and $2.9 million on capex, and returned $1.6 million to shareholders through share repurchases during 2025.

This improvement in cash utilization is consistent with the adjusted EBITDA progress I noted earlier and reflects the financial discipline we have maintained as we scale the business. We exited 2025 with a strong liquidity position of $200 million, coming in at the top end of our previously communicated expectation of ending the year between $195 million and $200 million.

Our capex-light business model remains a core financial discipline, and we are confident our current liquidity provides a strong runway to fund operations and execute on our 2026 growth initiatives. For full-year 2026, we expect revenue to be in the range of $30 million to $35 million, representing approximately 43% to 67% growth over full-year 2025 revenue.

As Qichao noted earlier, our full-year 2025 revenue included one-time contributions from OEM services contracts. If we compare the growth expected from the three businesses on an apple-to-apple basis, the revenue growth rate is even higher.

On the margin front, our three businesses carry different profiles, and the mix may shift as we scale. Our ESS hardware business, which will represent the largest share of revenue in 2026, is expected to operate at around 15% gross margin.

As we layer in the hardware-software bundle and grow the operating system attach rate, we see a potential path to expanding margins in that business over time. Our drone cells business is earlier in its commercial ramp, but we expect gross margins north of 20% as volumes build through the year.

Our materials business, which will sell electrolyte materials through our joint venture with Hisun, is also a product business, and we expect it to carry a margin profile in the 10% to 20% range. On a blended basis, we expect consolidated gross margin to be around 15% with room to improve year over year as we scale.

On operating expenses, for full-year 2026, we expect approximately 15% further reduction from the 2025 level. This reflects our continued investments in the Molecular Universe platform.

While we are committed to financial discipline, we believe this level of investment is appropriate given the long-term value we're building and the early commercial traction we're seeing from MU-driven material discoveries. We're not anticipating meaningful growth in operating expenses beyond this level, and will continue to evaluate opportunities to improve operating leverage as revenue scales and to accelerate the monetization of the MU platform.

On capital expenditures, we continue to operate a capex-light model as a core financial discipline. For 2026, we expect capex to remain in the single-digit millions, primarily directed toward the conversion of South Korea facility from EV cells to NDAA-compliant drone cells, as well as the evaluation of contract manufacturing capacities in Southeast Asia.

We entered 2026 with $200 million in liquidity, and we are well-funded to scale and grow, giving us the financial flexibility to execute on the opportunities ahead of us. We believe 2026 will be the year in which the full architecture of our multi-revenue stream platform comes together and begins to deliver.

We are well-capitalized, financially disciplined, and positioned to execute on that vision. We appreciate your continued support and confidence in SES AI.

Thank you. Now I will turn the call back to the operator.

Thanks for taking my questions. On the final contribution from the Honda and Hyundai development work, just was wondering, what's sort of next for that program?

You sort of proven manufacturability recently. Obviously, your technology is sort of game-changing for the EV market.

What's next for those relationships, Honda and Hyundai? When are you going to commercialize that for EVs?

Yeah. Derek, in terms of next step, previously the next step was to go from B-sample to C-sample.

I think now, it's no surprise that the EV market is slowing down, and almost no automaker is investing in next-gen battery technology. I don't mean early stage battery technology in terms of A and B-samples, but no one's investing in mass-scale production of next-gen technology, which is C-sample, which is what we were trying to get to next.

We hit all the technical milestones, but the C-sample is on hold. Then so in terms of next step with the OEMs, we are focusing on selling materials, selling materials that we have developed, the electrolyte materials.

We are focusing on that. Then in terms of the full-blown lithium metal C-sample, then we'll see when the market returns.

The technology is there, and this is why we've been focusing on converting the lines for drone's production and also applying the AI-for-safety, the battery analytics software that we develop for EV for ESS market. In terms of next steps for the OEMs, we're focusing on material supplies and then also converting the line for drone applications and then using the safety analytics software for ESS.

Got it. Then just quickly, what was the one-time service amount?

Can you quantify that impact to fiscal '25?

Jing, you want to take that?

Hi. For 2025, the service revenue was $13.6 million.

Those are primarily driven by the Honda and Hyundai service agreements. That's the one-time service agreement we were talking about.

Got it. For '26, you don't expect any of that to recur just, given what Qichao just explained.

The guidance is really just ESS, drones, and materials. I was wondering if you could break that down for us or help us try to understand by segment, ESS, drones, materials.

Can you help us quantify how each of those contribute to the guidance range? Then any help modeling the first half versus second half, what portion of revenue in the first half, second half, anything like that would be helpful.

Go ahead, Jing.

I can take that. For 2026 guidance, given is the first year we're giving guidance including all three business units, we, first of all, we wanted to be more conservative to start the year.

As far as breaking down the revenue sources, ESS going to still be a large portion of our revenue, of that $30 to $35 guidance, that the range, I would say probably around 65% will come from ESS at least. Then the remaining portion will be drones and materials.

Then for those two, we're expecting it to be more second half of the year loaded given we're still in the ramping and business development stage. Those two are going to be more towards second half of the year.

Percentage-wise, six around 65 from ESS and the remaining for those two.

Got it. That's helpful.

I'll pass it on.

Thank you.

Hi. Thank you for taking my question.

Just curious, if we look out to maybe the next two to three years, if we just look at the different business areas, ESS, drone, materials, and also you have the Molecular Universe as well, how would you characterize the growth profile of each of these areas in the next, two to three years? Which one has maybe the potential for the largest growth, if there's a way to think about it?

Then separately for Molecular Universe, I know you've been talking about different tiers of revenue from larger corporations and smaller ones. Could you share currently what might be the largest bottleneck for adoption from these customers?

Then I have a follow-up. Thanks.

Yeah. Winnie, on the first one, from a size of revenue and a product perspective, ESS and drones, we expect these two to grow very rapidly, especially on ESS.

After we acquired UZ, we're not just selling the hardware anymore, now we're adding this predict feature on top. That's really exciting because now we're turning a regular UPS battery pack into an asset that the asset owners can use for energy trading, it's supply and demand.

On the demand side, you have conventional VPP software, but on the supply side, no other VPP software can have as an accurate and advanced monitoring of the battery health, battery safety, battery degradation, and other parameters than ours. We have a really precise estimation of the state of health of the battery so that gives you a advantage.

It's almost like we say this in energy trading, it's almost like having Warren Buffett at your fingertip when it comes to energy trading if you know that level of precise health of your battery. That we're really excited about this edge box-enhanced virtual power plant, especially with this tool that we can add on top of UZ's hardware.

That's ESS. Then drones, drones, it's all about supply chain.

It's all about being NDAA-compliant and then supplying to US and allies' drones, and then also with the new drone dominance program. We've had this line in Korea and it's been NDAA-compliant since 2021.

We built this line for GM. It was 100 amp-hour lithium metal cells, now we're converting that to 10 amp-hour cells for drones.

We have an advantage because we have this asset. It's been NDAA-compliant since 2021, and then that market is also growing very rapidly, especially under the new drone dominance program.

I think these two are the most exciting from a size of revenue growth. Then as Jing mentioned earlier, the bulk of revenue from this year, 2026, we expect will come from these two areas.

In terms of Molecular Universe, we're making very exciting progress, and we're getting some of the largest battery companies and car companies to sign on to this platform, and we expect to make some announcements in the coming months. I think in terms of bottleneck, I think it's just new.

For example, AI-for-Science has been used in drug discovery a lot, not so much in materials, not so much in chemicals, and not so much in batteries. It's just new.

Finally, as we say, we use that platform and then we demonstrated that we could actually indeed use that and develop six new materials. Previously it was like it would take you a few years to discover one material, and then we've discovered six materials in just over about nine months, nine months to a year.

Then later we'll add more features to it and hopefully we can get to six new materials per month and then per week. That acceleration of rate of discovery, that's something we're quite excited about.

Got it. Thank you for the so detailed response.

Then I wanted to ask a question about opex in 2026. It seems like you're characterizing a spending level that is, lowered in 2025 and that is going to likely sustain at this 2026 level on a go-forward basis.

Can we just understand the reason for that, as you're looking to grow, these different areas of the business? What is it that you've done that I guess allows you to, not have to spend further to grow the business?

Thanks.

I can address that. I think the 2026 reduction partially is coming from just being disciplined on spending cash on opex in general.

We have been reducing G&A and also R&D expenses year over year if you go back to 2023, 2024, 2025. Year over year, we're managing our cost very efficiently.

That's that part. Second, the MU as an internal tool for AI-for-Science is creating a lot of efficiency.

Also as part of growth into these three businesses, we're more focused as far as spending cash on product development related R&D. Then there will be growth as far as spending-wise on the SG&A side like sales and marketing, but it's not linear to the revenue growth.

Overall, together, including R&D and SG&A, we forecast this year to be lower than last year and then sustain at least for the foreseeable future.

Got it. That's helpful.

Thank you.

Thank you. As a quick reminder, if you'd like to ask a question, please press star one.

The next question comes from Colin Rusch with Oppenheimer. You may proceed.

Thanks so much, guys. Can you talk a little bit about the drone market and the volume of customers you're working with and how mature those relationships are, in terms of working through the design process and potentially being able to announce a purchase award here over the next call it several quarters?

The drone market is really going through a lot of pressure to change supply chain with NDAA compliance requirements. Then we are focusing on some of the top customers, for example, customers that will order in the range of single-digit millions to potentially more than $10 million a year.

Yes, we are mainly focused on those larger customers. We've actually started testing engaging with them last year.

Last year was really when everyone tried to change the supply chain. I think if a major drone manufacturer hasn't changed the supply chain by now, I think it's almost a bit too late.

A lot of the testing engagement started last year. Then now we are just in the final stage of converting the lines.

For example, right now in Boston, we can make pilot scale, less than 100,000 cells per year. In Korea, we can make about 200 to 300 cells per year.

We're trying to expand that. Then in Southeast Asia, we're also looking to expand to several million cells per year.

These are all NDAA-compliant cells for drones customers.

Excellent. Then, obviously you've had some really meaningful success on at the molecule level leveraging some of the AI capabilities.

I'm curious about your ability to leverage some of that know-how into pack-level design and even into system integration design and modeling out some of the duty cycles that may be, just accelerate some of the adoption as you look at some of the robotics and drone opportunities.

You're saying how we can apply this to pack level instead of cell level?

At the pack level and even the system-level design beyond that pack level.

We're starting to add that feature. We've got some requests from automakers that want to do the design and then predict features at the pack and system level.

We are adding those features. Then also for energy storage, right now we are adding Molecular Universe predict into the systems.

The predict We put that in a small box, we call that edge box, and then that works at a cell level and also the pack and system level.

Excellent. Thanks so much, guys.

Thanks.

Hey, Qichao. Thanks for taking my questions here.

I believe I heard you say that the auto OEM JVs are on hold. Could you clarify that a bit?

Then, I'm seeing that the industry is especially the auto industry is trying to move away from lithium metal. However, at the same time, I'm seeing some local competitors actually enter the public markets here with a lithium metal product.

Has any of the engagement appetite with your OEM customers changed around lithium metal? How are you looking at this?

Yeah. We were developing pure lithium metal as well as hybrid lithium metal and silicon anode, and then we met all the technical requirements.

It's just in terms of OEM appetite for high energy density batteries, I would say back in 2021, the OEM appetite for high energy density batteries was very high, but now, and that's still there, but maybe at R&D level, A-sample level, and demo car level, but not at C-sample level, which is mass production. I'm not seeing any auto OEMs that's going to mass production with a next-gen chemistry.

There's a lot of price pressure, cost pressure, and most OEMs are switching to just LFP graphite.

Yeah. That makes a lot of sense, and that justifies what we're seeing too.

That confused me a bit. Switching gears to the ESS market, which is rapidly growing, that is a fragmented market with many different levels to it.

I'm wondering, what do you see as the most value-add? Where would you play?

What is the strategy for the UZ Energy acquisition in what section of that energy storage market would you play in, and why are you most advantaged for that section?

Exactly. The ESS market is very fragmented.

It's got a long tail. The benefit that we bring So the ESS market currently does not have a stable, widespread operating system, maybe except for Tesla, but in ESS, it's like Tesla and then long tail, very fragmented.

What we can provide is almost like the Android version. Then for commercial, industrial, and then for data center applications, the asset owners actually want to use their battery packs for energy trading, but they're not able to do that and they're not able to differentiate if they use conventional virtual power plant softwares.

What we can do is because we actually collect the data from the battery, we can have a very accurate estimation of state of charge, state of health, state of safety, degradation, power, all these different features. What that means is when you do the trading, it's supply and demand.

Demand is set by the market, by weather, by if there's any major sporting events, but the supply, that's set by accurate estimation of SOX, and then that we can provide. That's where this edge box-enhanced virtual power plant really shines.

I think the value that we can provide is we can provide this operating system to not just UZ's battery packs, but to multiple of this long tail, this fragmented market.

Great. Thanks, Qichao.

Thank you. As with past earnings calls, we offered investors the opportunity to submit questions in advance, and we'll cover a brief selection of those questions now.

The first question is, is there a binding definitive agreement with Top Material yet, and can you generally provide some details on current NDAA compliance status? Yeah.

Top Material is one of the options we are exploring. Then, as I mentioned earlier, we've had this Korea facility since 2021.

It's been NDAA-compliant since 2021, and then we are focusing on converting this to produce drones batteries. Then in addition to this to our own Korea facility, we're also looking at options in Southeast Asia and then potentially offer better pricing, better value, and larger scale to customers, and again, they're all NDAA-compliant.

Actually, we just updated our website, and then now we have a updated drones battery product brochure that's on the website. Then the cells are NDAA-compliant.

Great. I think we have time for one more.

The question is, with Wildcat and BMW and Sionix and Porsche securing JDAs for AI-driven materials, how is SES protecting its Molecular Universe data advantage to ensure it doesn't lose OEM partners to these specialized private competitors?

I think we announced that we're offering Molecular Universe to the public mid last year after these other announcements were made. Then Molecular Universe, if we look at the latest version of Molecular Universe 1.5, and we have a 2.0 coming out soon, it really is a game-changing platform for battery development in the EV space.

We're seeing a lot of the OEMs and big battery companies actually using this platform.

Great. Thanks.

That's all we have for the investor questions. I'll pass it back to the operator to conclude the call.