SES AI Corp. 10-Q Summary: Period Ended June 30, 2026
Business Context and Reporting Period
SES AI Corp. (NYSE: SES) is an early-stage growth company developing AI-enhanced Lithium-Metal and Lithium-ion battery technologies for electric vehicles, Urban Air Mobility (UAM), drones, and Energy Storage Systems (ESS). This report covers the quarterly period ended June 30, 2026. The company operates as a single reporting segment and is classified as a non-accelerated filer and smaller reporting company.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Revenue | $5.1 million | $11.8 million |
| Net Loss | $(17.9) million | $(30.0) million |
| Diluted EPS | $(0.05) | $(0.09) |
| Gross Margin | 22.6% | 20.0% |
| Cash & Cash Equivalents | $64.1 million | $64.1 million |
| Short-term Investments | $98.9 million | $98.9 million |
| Total Liabilities | $49.2 million | $49.2 million |
| Accumulated Deficit | $(401.9) million | $(401.9) million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 43.8% quarter-over-quarter (QoQ) and 26.4% year-over-year (YoY) for the six-month period. This growth was primarily driven by product sales from the acquired UZ Energy subsidiary, offset by a decline in service revenue from OEMs as contract periods ended.
- Margin Compression: Gross margin decreased significantly to 22.6% (QoQ) and 20.0% (YoY six-month) due to a shift in revenue mix toward lower-margin product sales compared to high-margin service revenue in the prior year.
- Expense Reduction: Research and Development (R&D) expenses decreased 40.5% QoQ and 43.4% YoY (six-month), driven by reduced AI infrastructure (GPU) costs and headcount reductions. General and Administrative (G&A) expenses increased 37.7% QoQ due to higher bad debt expense and professional services.
- Acquisition Impact: The acquisition of UZ Energy (closed Sept 2025) contributed approximately $9.5 million in revenue and $1.3 million in pre-tax loss for the six months ended June 30, 2026.
Outlook, Risks, and Contingencies
- Liquidity: Management believes current cash and marketable securities ($163 million total) are sufficient to fund operations for at least 12 months. The company maintains an at-the-market equity offering program (up to $150 million) but has not sold shares under it recently.
- NYSE Listing Risk: The company received a deficiency notice in July 2026 for failing to meet the $1.00 minimum share price requirement. It has a six-month cure period to regain compliance; failure may result in delisting.
- Legal Proceedings: A securities class action lawsuit was filed in April 2026 alleging false statements regarding business prospects. Two shareholder derivative lawsuits were filed in July and August 2026. The company intends to defend vigorously but cannot predict outcomes.
- Strategic Shifts: The company is shifting toward third-party manufacturing via a Variable Interest Entity (VIE) with Hisun to reduce capital intensity. It is also pursuing NDAA-compliant drone cell manufacturing, which carries execution and demand risks.
Investor Verification Checklist
- Listing Compliance: Monitor the company's ability to regain the $1.00 minimum share price within the six-month cure period to avoid NYSE delisting.
- Acquisition Integration: Verify the performance of UZ Energy against the deferred consideration milestones (revenue and cash balance thresholds) which could trigger additional payments up to $12.2 million.
- Legal Exposure: Track the status of the securities class action and derivative lawsuits for potential settlement costs or reputational damage.
- Revenue Mix: Assess the sustainability of product revenue growth versus the decline in high-margin service revenue to understand future margin trajectories.
- Cash Burn: Review the trajectory of operating cash burn ($33.6 million used in six months) against the $163 million liquidity position to gauge runway.