Enovix Corp. 10-Q Summary: Quarter Ended July 5, 2026
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the fiscal quarter and fiscal year-to-date ended July 5, 2026. Enovix Corporation designs, develops, and manufactures next-generation lithium-ion batteries with proprietary silicon-anode architecture. The company operates manufacturing facilities in Malaysia and South Korea, serving customers in the smartphone, smart eyewear, defense, and industrial sectors. As of August 7, 2026, there were 219,448,535 shares of common stock outstanding.
Key Financial Metrics
| Metric (in thousands) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Revenue | $9,024 | $7,468 | $16,624 | $12,566 |
| Gross Profit | $1,302 | $1,942 | $2,854 | $2,203 |
| Gross Margin | 14.4% | 26.0% | 17.2% | 17.5% |
| Net Loss | $(43,077) | $(44,266) | $(81,335) | $(67,797) |
| Diluted EPS | $(0.20) | $(0.22) | $(0.37) | $(0.33) |
| Cash & Equivalents | $33,741 | $135,978 | $33,741 | $135,978 |
| Total Investments | $516,470 | $512,836 | $516,470 | $512,836 |
| Working Capital | $453,630 | $477,194 | $453,630 | $477,194 |
| Long-Term Debt (Net) | $520,994 | $519,271 | $520,994 | $519,271 |
Note: Cash flow from operations for the year-to-date ended July 5, 2026, was $(54.9) million. Total debt principal outstanding is approximately $532.8 million.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 21% quarter-over-quarter and 32% year-over-year, driven primarily by higher sales to defense and industrial customers.
- Gross Margin Compression: Gross margin declined to 14.4% in Q2 2026 from 26.0% in Q2 2025. This was due to higher production volumes and a shift in product mix, partially offset by lower costs from the 2025 acquisition of assets from SolarEdge Technologies Korea.
- Operating Expenses: Research and Development (R&D) expenses decreased 13% quarter-over-quarter due to lower salaries and stock-based compensation. Selling, General, and Administrative (SG&A) expenses increased 15% due to higher personnel costs and consulting fees.
- Interest Expense: Interest expense surged 282% quarter-over-quarter to $6.5 million, primarily due to the issuance of $360 million in 2030 Convertible Senior Notes in September 2025.
- Warrant Liability: The company recognized a $6.6 million gain year-to-date from the change in fair value of private placement warrants, which expired unexercised on July 14, 2026.
Guidance, Outlook, and Risks
- Product Qualification: The lead smartphone OEM customer is in the final stages of accelerated cycle-life testing, with completion anticipated in Q4 2026. A second smartphone OEM is expected to begin sample deliveries in Q4 2026.
- Smart Eyewear: Commercial production has begun. The company shipped approximately 2,100 units in Q2 and expects to fulfill the balance of a 50,000-unit order by Q4 2026, with volume growth projected for 2027.
- Defense & Drones: The global pipeline for products manufactured in South Korea grew 41% to approximately $183 million, with drone opportunities driving more than half of the growth. New capacity in South Korea is expected online in mid-2027.
- Liquidity: Management expects current cash and investments ($552.1 million total) to be sufficient to meet funding requirements for the next twelve months. A $76.6 million stock repurchase program remains available.
- Risks: Key risks include the complexity of scaling manufacturing yields (specifically dicing processes), customer qualification timelines, geopolitical tensions affecting supply chains, and the need for additional capital to fund expansion.
Investor Verification Checklist
- Customer Concentration: Verify the stability of the single defense customer in South Korea, which accounted for 65% of Q2 2026 revenue.
- Manufacturing Yields: Monitor progress on Zone 1 dicing yields (84% in Q2) and the implementation of hybrid dicing configurations to improve throughput.
- Debt Service: Assess the impact of $532.8 million in convertible senior notes and the associated interest expense on future cash flows.
- Qualification Milestones: Track the completion of the lead smartphone customer's final testing in Q4 2026 and the subsequent field testing timeline.
- Capital Needs: Evaluate the sufficiency of the $552 million cash/investment balance against the projected capital expenditures for Fab2 expansion and new production lines.