Quantum State held its second quarter 2025 financial report conference call, during which it was mentioned that investors can access the company's IR website to view shareholder letters. The company also emphasized the safe harbor provisions regarding forward-looking statements, stating that expectations and beliefs about future events, technological advances, or financial performance may not materialize, and actual results may differ significantly from expectations due to risks and uncertainties. The conference call was hosted by the chief analyst and investor relations manager, followed by detailed explanations from Siva and CFO Kevin.

QuantumScape announced the expansion of its existing partnership and licensing agreement with Powerco, the battery manufacturer of Volkswagen Group. Powerco will pay an additional $131 million to QuantumScape over the next two years to support both companies' commercialization activities. These payments are associated with specific milestones, with the first milestone already achieved, expecting a payment of over $10 million. Additionally, Powerco has the right to produce an additional 5 GW hours of QuantumScape batteries annually under certain conditions, totaling up to 85 GW hours. In addition, QuantumScape has signed a joint development agreement with another global automotive manufacturer, further validating the value of its solid-state lithium metal technology in the automotive industry. Furthermore, QuantumScape is collaborating with Murata Manufacturing to explore ceramic production to meet the demand for solid-state batteries in the Japanese market. QuantumScape has also updated its annual progress goals, including the development of the next generation Cobrar process and the shipment of QSC 5 batteries to customers for integration and testing, with field testing planned to begin in 2026.

The company is at a crucial stage of commercialization, and the long-term cooperation with Power Core fully demonstrates the economic value of the solid-state platform and the power of the capital-light business model. Through this model, the company can generate revenue early on from development activities and collect license fees when customers expand production. The company has established deep partnerships with multiple car manufacturers, and new joint development agreements further strengthen these relationships. The company's technological platform is poised to revolutionize the automotive industry and other emerging markets, with a potential total addressable market reaching billions of dollars annually. Despite significant challenges in scaling up production, the company believes it is nearing its long-term goals through collaborative efforts with world-class partners. Financially, capital expenditures in the second quarter were mainly focused on facility and equipment purchases to prepare for high-volume sample production. Adjusted EBITDA losses were within expectations, and the company is optimizing operations through cost-cutting and process improvement measures. The revised cooperation agreement with Power Core is expected to bring significant revenue, further extending the company's cash runway to 2029, with the possibility of further extension if additional funding is obtained.

The extension agreement between Siva and Powerco signifies a significant advancement in their ability to customize core technology to meet specific customer needs, which aligns with Siva's licensing business model. Through this agreement, Siva is able to generate revenue in the short term from development activities, and in the long term, can earn income through royalties or prepayment fees as customer production scales up, as demonstrated in the transaction with Powerco. The core of this business model is its highly differentiated technology platform, aimed at long-term creation of stable and high-margin revenue streams.

This cooperation aims to accelerate the commercialization process of QSC 5 technology in the battery industry through the joint efforts of QS and powerco, making it an innovative platform. Powerco will invest $131 million to support the scale production of Qos signals, which will not only enhance QS's financial condition, reduce GAAP net losses, and extend the cash flow cycle, but also generate over $10 million in cash flow in Q3. At the same time, the joint development agreement with another major global automotive customer signifies an upgrade in their relationship, with the goal of providing customized solutions for the customer and ultimately reaching a comprehensive commercialization and licensing agreement.

The baseline of the Covid process announced last month marks a major advancement in battery technology, particularly highlighting the crucial role of ceramic separators. This innovation achieves uncompromising performance in solid-state technology, covering aspects such as range, charging speed, and safety. As the core of a graphite-free, lithium metal-free architecture, ceramic separators have achieved a significant innovation in the field of ceramic processing through Cobra technology, increasing thermal processing efficiency by 200 times and laying the foundation for large-scale production. Cobra technology will not only be used for the production of B1 samples later this year, but will also be a key factor in expanding production capacity for long-term ecosystem partners. With Cobra technology included in the baseline, continuous iterative improvements will drive further development and enhancement of the Covid technology portfolio.

In the latest conference call, a technology company revealed that it has signed a Joint Development Agreement (JDA) with major global automakers to adapt their technology platform to the specific needs of the automotive manufacturers. This agreement follows the collaboration model with another automaker, Powerware, ensuring technology transfer and ultimately achieving mass production. Both parties will follow the successful cooperation framework from before, working together to advance technology adaptation and prepare for mass production.

The conversation detailed the milestone progress and related financial details of the collaboration between the startup company and Power Cor, including the initial milestone of reaching $10 million and the subsequent $131 million cooperation agreement. These agreements cover technical adaptation, industrialization, transfer, as well as long-term licensing and royalty payments, outlining two separate cash flow channels. In addition, short-term monetization and accounting methods for joint development activities were mentioned, emphasizing the impact of these operations on the financial situation.

A company specializing in solid-state battery technology development and licensing announced an expanded partnership with Volkswagen (VW), planning to increase the capacity of pilot production lines to support the industrialization process of its Cobra technology, which is 25 times more powerful than the Raptor. The company emphasizes its positioning as a technology licensor rather than a manufacturer, and is investing in increasing the capacity of battery assembly equipment to match the high output of Cobra technology. Additionally, the company's partnership with Volkswagen has reached a scale of 85 gigawatt-hours, demonstrating a high degree of synergy in technology transfer and rapid scale-up production. The company also mentioned that its pilot production line in the United States has attracted interest from defense contractors and drone manufacturers, particularly in the context of the Trump administration's executive order on drones.

The conversation centered around the limitations of lithium battery technology, particularly discussing the issue of graphite dependency from China. A graphite-free technology for lithium battery metal anodes was proposed in order to reduce environmental impact. Additionally, the importance of building and expanding technology ecosystems was emphasized to ensure widespread adoption and scalability of new technologies.

The discussion mainly revolves around the collaboration with Bayer on JDA and expansion power code, including limitations on the number of clients that can be managed simultaneously, considerations for technology protection, and the pursuit of high touch models. At the same time, it mentioned the need for new equipment and the issue of selecting the speed of cooperation with car manufacturers.

The discussion focused on ensuring the protection of customer intellectual property and service quality, as well as the details of the non-exclusive cooperation agreement with Powerco. It mentioned how battery technology can be customized according to the specific needs of each car manufacturer, including possible form and specification adjustments to meet the requirements of different customers.

The discussion focused on the progress of the $1.3 million advance payment, highlighting that it depends on the technological advancements of the QSC 5 industrialization by the technical team. In addition, the company also mentioned their consideration of utilizing the equity market to strengthen the cash position on the balance sheet, emphasizing the management team's dedication to creating company value and maintaining a strong financial position.

In the discussion, the impact of Powerco agreement extension on operating expenses (Opex) and capital expenditures (CapEx) was detailed, as well as the improvement it brings to the financial bottom line. Although the expected cash inflows will not be recognized as revenue, they will affect the EBIT level and will not increase additional Opex and CapEx, but will be based on existing long-term operating plans.

The discussion focused on JDA's technological milestones, including the necessity of adjusting specifications according to customer requirements, and how the company allocates resources to meet these technological goals while supporting power agreements. It was also mentioned that these plans and milestones are already in the company's long-term planning and reflected in the financial planning.

A technology licensing company emphasized its core goal of focusing on developing differentiated technology and outlined the operational leverage in its business model. The company plans to achieve cash flow growth through two stages: first, obtaining early returns through customized technology partnerships; second, generating long-term royalty income as the scale of partners' factories expands. The company expressed gratitude to its employees, partners, and shareholders, and promised to provide regular updates on progress.