QuantumScape Corp. (NYSE:QS) released its third-quarter earnings report after Wednesday’s closing bell.

Below are the transcripts from the Q3 earnings call.

• QS stock is moving. See the details here.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

Operator

Good day and welcome to QuantumScape’s 3rd Quarter 2025 Earnings Conference Call. Dan Conway from QuantumScape My apologies, QuantumScapes Principal Analyst Investor Relations. You may begin your conference.

Principal Analyst, Investor Relations

Thank you Operator Good afternoon and thank you to everyone for joining QuantumScape’s third quarter 2025 earnings call. To supplement today’s discussion, please go to our IR website at ir.quantumscape.com to view our shareholder letter. Before we begin, I want to call your attention to the safe harbor provision for forward looking statements that is posted on our website as part of our quarterly update. Forward looking statements generally relate to future events, future technology progress or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize. Actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. There are risk factors that may cause actual results to differ materially from the content of our forward looking statement for the reasons that we cite in our shareholder letter, Form 10K and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes. Joining us today will be QuantumScape CEO Dr. Siva Sivaram and our CFO Kevin Hetrick. With that, I’d like to turn the call over to Siva.

Siva Sivaram – CEO

Thank you Dan. I’d like to begin with one of the highlights of the year. On September 8th at IAA Mobility in Munich, Germany, we unveiled our launch program with the Volkswagen Group the Ducati V21L race motorcycle. Developed as a collaboration among Ducati, Audii, Powerco and QS, the Ducati V21L is a first of its kind vehicle demonstration planned as a showcase for the exceptional performance of our no compromise next generation battery technology. As a launch program, the Ducati V21L is ideal. It is a low volume but high visibility demonstration that allows us to put the QSC5 technology into a demanding real world application. The next step for the Ducati program is field testing. Turning to our annual goals, we are pleased to report that during Q3 we began shipping cobra based QSC5B1 samples, completing another of our key annual goals for 2025. These cells are part of the Ducati launch program and were featured on stage at the IAA Mobility Conference. Our remaining operational goal for the year is to install higher volume cell production equipment for our highly automated pilot line in San Jose, named the Eagle Line. Equipment for certain key assembly steps has already been installed on the Eagle Line and this goal remains on track. Another important goal for 2025 has been to expand our commercial engagement, including deepening relationships with existing customers, engaging new customers and bringing additional partners into our growing QS technology ecosystem. In Q3 we made substantial progress on all three aspects with respect to existing customers. The successful launch event with Ducati, Audi and Powerco at IAA Mobility was a major milestone in in our long collaboration with the Volkswagen Group. Last quarter we also announced a new joint development agreement with an existing customer and we are continuing to work closely with them as we progress through the first phase of the development and commercialization engagement. We are also in an active engagement with a new top 10 global automotive OEM in addition to our existing customers. With regard to QS ecosystem development, we continue to add world class partners. On September 30th we announced an agreement with Corning to jointly develop ceramic separated manufacturing capabilities based on our COBRA process. Corning is a global leader in advanced materials and they bring deep expertise in ceramics processing and proven manufacturing excellence to the QS ecosystem. In parallel, we successfully completed the initial phase of our collaboration with Murata Manufacturing, have signed a subsequent contract and progressed to the next phase of that relationship. Our goal is to make QS technology the clear choice by providing our customers with a turnkey ecosystem to serve the global demand for better batteries. With Murata and Corning, we have two of the most world renowned technical ceramics manufacturers as ecosystem partners and we will continue to grow our ecosystem further. With our achievements this quarter, our vision for commercialization of of our next generation battery technology is beginning to take shape. We are executing consistently towards our key annual goals, demonstrating our technology, engaging with partners and building out our capital light development and licensing business model. Everything starts with execution and we are proud of our team’s performance this year. We have already accomplished two of our key operational goals, baselining our COBRA process and beginning shipment of the cobra based QSC5 cells. Continuing our track record of consistent execution against our goals, Q3 also saw our first public technology demonstration with the Volkswagen group, the Ducati V21L. We are expanding our collaboration with existing customers and adding new customers and we have also expanded our global ecosystem of world class partners. The third quarter also makes another exciting milestone. We are beginning to show returns from our capital light development and licensing business model, driving over $12 million in customer billings in Q3. Our ambitious targets naturally present many challenges to overcome and there is much work left to do. Our objective is clear revolutionize energy storage, capitalize on our enormous market opportunity and create exceptional value for our shareholders. With this aim in mind, we are excited to update shareholders on our continued progress over the months and years to come. With that, let me hand things over to Kevin for a word on our financial outlook.

Kevin Hetrick – CFO

Thank you, Siva. GAAP operating expenses and GAAP net loss in Q3 were 115 million and 105.8 million respectively. Adjusted EBITDA loss was 61.4 million in Q3 in line with expectations. A table reconciling GAAP net loss and adjusted EBITDA is available in the Financial Statement at the end of our shareholder letter we continue to drive operational efficiency Consistent with our capital licensing focus. We revise and improve our full year guidance for adjusted EBITDA loss to 245 million to 260 million. Capital expenditures in the third quarter were 9.6 million. Q3 CAPEX primarily supported facilities and equipment purchases for the Eagle Line as a result of efficiency gains and process improvements, including from the COBRA process, as well as a change in timing of certain equipment ordering. We revised the range of our full year guidance for CapEx to 30 million to 40 million in Q3. We bolstered our balance sheet and completed our at the Market equity program, raising 263.5 million of net proceeds in advance of the August 10th expiration of our shelf registration. We ended the quarter with 1.0 billion in liquidity. We now project our Cash Runway extends through the end of the decade, a 12 month extension from our previous guidance of into 2029. Going forward, we plan to move away from providing updates on Cash Runway and will begin providing updates on customer billings. Customer billings represent the total value of all invoices issued by QS to our customers and partners in the period, regardless of accounting treatment. Customer billings is a key operational metric meant to give insight into customer activity and future cash inflows. The metric is not a substitute for revenue under US GAAP. Customer billings in Q3 were 12.8 million in Q3. We invoiced VW PowerCo under the upgraded deal announced in July. The resulting cash inflows benefit QS shareholders. They will be directly reflected on the balance sheet as cash when we receive payment during the collaboration phase of this particular deal because of the related party relationship with vw. In accordance with US gaap, a liability of equivalent value will also be created. QS has no repayment obligation with respect to these liabilities. Once relieved, rather than impacting the P and L, this value will accrue directly to shareholders. Equity payments from other customers or partners we expect will be accounted for differently due to the lack of equity ownership or significant related party ties.

Principal Analyst, Investor Relations

Thanks Kevin. We’ll begin today’s Q and a portion with a few questions we’ve received from investors or that I believe investors would be interested in Siva, the world’s first live demonstration of QS solid state lithium metal batteries in a Ducati V21L motorcycle premiered at IA Mobility on September 9. Why is this such an important milestone and what are the next steps on your commercialization roadmap?

Siva Sivaram – CEO

Dan that announcement and seeing the bike ride across the stage was an emotional moment for all of us at QS and was obviously a huge milestone for all of our employees, investors and partners. This was long in the making. Now we’ll be demonstrating our battery in the field and gathering as much data as possible from field testing. Stepping back a bit, this was a major step in our strategic blueprint. You can think of this as four tracks that are running in parallel the Ducati program, our power core relationship, our other customers and our ecosystem development with respect to PowerCo more broadly, as announced at IAA Mobility, we are working toward automotive grade standards with the goal of a series production car with QS technology before the end of the decade. With respect to other customers, we are working towards commercialization deals with additional automotive OEMs. And of course we are building out our ecosystem with world class partners like Murata and Koni so that we can hand our customer automotive customers a turnkey supply chain to serve the massive and growing demand for our technology. These are the main areas that we have to execute on.

Principal Analyst, Investor Relations

Thanks Siva. On that note, QS continues to advance discussions with key high precision ceramics players, most recently announcing an agreement with Corning and advancing our partnership with Murata. How how does this fit into the company’s overall strategy of building out the QS global partner ecosystem? What are the key benefits of this business model and some potential ways QS may receive economics from these partnerships then?

Siva Sivaram – CEO

QS’s proprietary ceramic solid set separator is our core IP. It enables our anode free architecture and its performance advantage. Our strategy involves partnering with specialized high precision ceramic manufacturers such as Murata and Corning to scale up separator production. These partners would supply QS separators to cell manufacturers like Powerco who would handle final cell assembly. Disaggregated model allows QS to one leverage the manufacturing expertise and balance sheets of partners with strong reputations in manufacturing as well as IP protection 2 ceramic production is a highly specialized skill set and this allows our cell production partners to focus on their core competency and three this accelerates the scale up of our technology by tapping into their manufacturing capabilities. In short, Corning and Murata are part of a complementary and expanding global ecosystem and designed to de risk scale up and enable a capital efficient path to commercialization. We believe each partner contributes unique strengths to help us efficiently scale our separated production into high volumes. As you’d expect, we are continuing to build out the entire QS ecosystems with additional partners.

Kevin Hetrick – CFO

And just to add on to that, in the fullness of time, the ecosystem would represent a third source of cash inflow under our capital light development and licensing business model. The first is monetizing collaboration and customization work with our OEM partners. The second and largest source of inflows would be licensing as our customers produce cells using our technology. The third one would be value sharing from our ecosystem partners.

Principal Analyst, Investor Relations

Thanks Kevin. Can you expand further on customer billings as a key operational metric? How do customer billings translate into cash inflows?

Kevin Hetrick – CFO

First, to expand on the significance of customer billings, our first ever invoices totaling 12.8 million in Q3 2025 are by themselves an important commercial milestone in the history of our company. It’s nice to have arrived at the chapter where we’re billing customers. I’d also highlight to investors that customer billings are evidence of our capital light business model at work. On the front end, we monetize development activities for our customers to tailor our core technology to meet their specific needs. Subsequently, as the customer ramps production, we realize royalties over the lifetime of the project. As we continue to develop further generations of our technology, we’ll seek to maintain these lines of business to generate consistent and compelling cash flows. Payment for development activities has the benefit of being near term. The royalty payments represent the majority of the value capture opportunity through a consistent long term stream of high gross margin revenue. Value sharing from ecosystem partners represents further opportunity for shareholder returns. I’d also ask investors to keep four things in mind when interpreting our customer billings metric. First, the metric is not a substitute for revenue under US gaap. Second, the accounting for individual customer billings may differ significantly. Third, the amounts billed to customers may vary from quarter to quarter due to fluctuations in activity as we progress through various phases of an agreed scope of work. Lastly, it is important to note that future cash inflows can diverge from customer billings, for example as a result of timing differences, payment terms, prepaid customer deposits, or any adjustments to final payment amounts.

Principal Analyst, Investor Relations

Okay, thanks so much Kevin. We’re now ready to begin the live portion of today’s call. Operator, please open up the line for questions.

Operator

Thank you. If you have dialed in and would like to ask a question, please Press Star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question and one follow up. Again, it is Star one. If you would like to join the queue and our first question comes from the line of Winnie Dong with Deutsche Bank. Your line is open.

Deutsche Bank Equity Analyst

Hi, thank you guys so much for hosting. First question is I was hoping you can help me understand a bit more about the joint development of the ceramic separators with Corning which you recently announced. If you can help me sort of understand maybe similarities or differences in comparison to Murata and then on Murata itself, you said you successfully completed the initial phase of the collaboration and then you’ve also signed a subsequent contract. Was hoping if you can also there help me better understand the nature of the agreement. Perhaps some details of the economics or the technology know how in terms of the transfer of it. That’s my first question. Thank you

Siva Sivaram – CEO

Thank you. Thanks for the question. As you pointed out, this is an extremely important aspect of our business model. To bring a ecosystem together for QS and ceramic manufacturing is, as I mentioned earlier, extremely specialized skill set and we want to bring people with us who can manufacture in high volume, taking our COBRA process and ramping it into the volume and using their balance sheet to put capital in building these factories up. And so when we started out with Murata about nine months ago, we both entered into a development agreement where they came in to evaluate what we needed to do, what do they need to do, et cetera. They concluded that and we enter to the next system where we start to go ramp our relationship into a much higher level with commitments of volumes, etc. And they understand what are the volumes involved and what our customers needs are, etc. So we are getting to be in that phase where we can take COBRA and ramp in volume. We have been working with Corning to throughout this time as well. Corning had also been under an early development contract with us and then we came into a more detailed relationship as we announced in early September. And the reason we need two of them is as you would think is pretty obvious. The opportunity is so large that it is good for us to have two suppliers and initially they’ll be complementary in different aspects of the ceramic processing, but I expect over the long term to have a much larger portion that each one of them does. And so both of them are extraordinarily competent manufacturing partners and they are excited to be part of this relationship. I spent time with both CEOs at length and they are very, very eager for them to get launched into high volume production to work with our big OEM partners.

Deutsche Bank Equity Analyst

That’s very helpful, thank you. And then second question is the new metric that you just introduced, the customer billing metric, was wondering if you can give us maybe a rough idea on the conversion time to revenue or to collection of those funds and then is that sort of like the main metric then you will be providing over time as opposed to sort of bringing out what revenue could look like in the next maybe one to two years or so. So just wanted to understand that dynamic a little bit better. And then I think last quarter you mentioned there is some investigation being done in terms of, you know, revenue recognition and was hoping if you can also tie that into into the response. Thank you.

Kevin Hetrick – CFO

Hi Winnie. So just to outline back the question parts, there was a going to the definition of customer billings talk about their importance and also on the accounting treatment of BW PowerCo, so I’ll take them in order. So just to be on the same page, we define customer billings as the total value of all invoices issued by QS to our customers and partners in the period regardless of accounting treatment. And where we hope it’s useful to investors is it’s a key operational metric to give insight into customer activity and into future cash inflows. I think you also had a question about how those translate into the timing of cash flow payments. So there I did mention in my remarks that you could see a divergence from billings to future cash inflows for a variety of reasons. Those could include things like timing, differences in payment from customers, prepaid customer deposits, adjustments to final payment amounts. Typical operational considerations there. You asked about the importance. First of all, it is very nice to be in this chapter where we’re doing work of value to customers and billing them for it. That’s a nice moment for our company.

And on the VW Power code treatment, the way that the accounting works is the cash inflows, of course at a broader perspective benefit QuantumScape shareholders. They’ll be reflected on the balance sheet as cash when we receive them during the collaboration phase of the VW powercode deal because of the related party relationship with VW in accordance with US gaap. A Liability of equivalent value will also be created. A reminder to shareholders, we do not have a repayment obligation with respect to these liabilities. And upon relief of the reliability, rather than impacting the P and L, this value will accrue directly to shareholders equity. So this accounting treatment is specific to the collaboration phase of VW powerco payments from other customers or partners. We expect to be accounted for differently due to the lack of equity ownership or significant related party ties.

Deutsche Bank Equity Analyst

Got it. That’s very helpful, thank you. I’ll pass along.

Operator

Excuse me. Our next question comes from the line of Jed Dorsheimer with William Blair. Your line is open.

William Blair Analyst

Hi everybody. You have Mark Cuter on for Jed Doersheimer. Congrats on the B sample progress and especially the Ducati demo. It’s always a. There’s a lot of learnings in actually creating the pack and integration. So congrats on that. During the that presentation, VW mentioned cells and EVs by the end of the decade. If we were to take this as 2030, does this track with your development timeline? So if we’re assuming that B samples meet all the required cell specs and a C sample stage gate is when you’re producing those cells at scale and four to five years seems a bit longer than we expected. So what do you think are the remaining technical boxes that need to be checked and is there any opportunity to pull this forward with VW or potentially a little competition with the other two customer engagements you have ongoing?

Siva Sivaram – CEO

Mark, thanks for the question. By the way, just to be technically correct, end of the decade is 2029. So just to make sure we don’t add an extra year into the, into the, into the calendar. The second thing is, look, actual productization belongs to the customer and they announce plans. The way they say it, our job is to make sure we are going all out. We do everything that we can to make sure they are able to ramp as fast as they can. We are working hand in glove very closely with Volkswagen and Powerco. They know exactly the status of the industrialization because we are working closely with them. And we will continue to do that now in parallel when we go work with the new customers that we are talking about, both with an existing customer and a new customer. That’s a completely independent path from what we are doing with Volkswagen. We don’t try to go create competition for our customers, but we work very, very, very closely with each customer, adapting our technical roadmap to their product roadmap. And that work goes on real time so that we can get to market as quickly as possible. But as Kevin points out, in the meantime they continue to pay us for that development activity that we do together.

William Blair Analyst

Appreciate the color. Thanks diva. 2029 it is. I didn’t mean to assume 2030 there, just a separate track here, one engineering group to another before the end of the decade. December 31, 2029. Got it loud and clear. About the. VW relationship as well. In the last iteration of this there was some space left in for other potential applications where VW could source cells and sell to other markets potentially. Was this written in to give space to the Ducati program or should we be looking at even more adjacent markets? Is there any potential there?

Siva Sivaram – CEO

Yeah, I actually do not want to again talk for the customer, but you are absolutely right. We are looking at non Volkswagen Group applications as well into that contract and Ducati being part of the Volkswagen Group would be included in the regular production and we do expect to have partnerships in across both independent of Volkswagen Group with other new customers and customers working with Powerco that we both work together.

William Blair Analyst

Great. Thank you.

Operator

As a reminder, it is Star One if you would like to ask a question and our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is open.

Goldman Sachs Analyst

Hey guys, you have Amanon for Mark. Thanks for taking the questions and congrats on the progress maybe on the other two customers that you mentioned in your prepared remarks. Siva, could you maybe help us get a sense of on where the JDA stands with the customer you announced last quarter and what needs to happen to get that to a more of a complete commercial agreement and similarly on the top 10 global auto EM, you mentioned you’re in active engagement with what it would take to go from, you know, the active engagement to a licensing or a JDA agreement.

Siva Sivaram – CEO

Thanks Aman, thanks for the question. Of course we are very, very excited about these two additional opportunities. We’ve been alluding to them over the last couple of quarters as to their maturation and we’ve been already in active engagement with them. As always, we let the OEMs do the announcement and we follow them. You saw that at the iaa we had Volkswagen come out and talk in detail about how they are taking the product in through different applications that they have in mind. The same way we will be doing that with these two as well. As much as I would love to talk about it ahead of time, it would not be appropriate for me to come and tell you how they are doing. But you will see over time as they start to talk about it more and more you will get a clearer idea of who they are, what they are doing and how they are doing. And I am very excited about these prospects.

Goldman Sachs Analyst

Thank you for that, caller. And then maybe secondly on this partnership approach, you know, recognizing the Corning and Marauder relationships for the ceramic separator, I think you mentioned the possibility of expanding the ecosystem to other areas for qs. You know, can you give us a sense of what areas you might be looking to include for partnerships and you know, what the structure of these partnerships looks like from maybe a financial standpoint as well? Thank you.

Siva Sivaram – CEO

Yeah, I’ll start with the partnership and then Kevin will give you the financial impact of those. Look, we are developing a technology ground up that is very, very different than in both its potential, its capabilities scale up from regular battery technologies. So wherever possible we like to include competent and reliable partners from the ecosystem to be with us to invest capital. So we talked about these two. With respect to the ceramic separators, we have the high touch transfer when we develop this, no compromise solution. We want to be able to give them whether it is materials, whether it is equipment, whether it is processes, whether it is software, whether it is metrology, we want to wrap all of this together in a package that they can wrap. And in each of this, where we have original IP and where we have unique capabilities, we like partners to come along with us. We want to make it as easy as possible for our OEM customers to ramp production as quickly as possible. And so it would behoove us to bring these partners along. We continue to evaluate additional partners to join the team and you can see the quality, the caliber of the partners that we choose to work with us.

Kevin Hetrick – CFO

On the finance side, as much as the cell is differentiated with our solid state lithium metal technology, with the energy density, the charge time, the safety, we think that we’re equally proud of the business model as well. We think that’s good for shareholders. It’s capital light. It helps us focus on where we think we add value the most, which is in innovation and customers customer empowerment. It allows each member of our cell manufacturer customer ecosystem player to play to their strengths, which we think is in terms of time and effectiveness and risk adjusted path to market best and in terms of how our quantumscape shareholders see value from that. It really comes from three ways. The differentiation of the cell performance creates value and our shareholders capture it in three ways. The first would be the monetization of the collaboration work that in this quarter, $12.8 million of customer billings, longer term licensing when our customers are producing our cells from their factories we’d get a licensing stream and finally would be value value sharing with our ecosystem partners that together we think each of those is an important is important in itself and also gives a robustness to our approach.

OPERATOR

As a reminder it is Star One if you would like to ask a question and with no further questions at this time I will now turn the conference back over to Quantumscape Management for closing remarks.

Principal Analyst, Investor Relations

Thank you operator. Finally today I would like to take this opportunity to congratulate the entire QS team on their outstanding performance this quarter and the execution that they have shown in making this IAA announcement so powerful and well received. And as always thank you to our shareholders for their continued support. We look forward to updating you on further progress in the months to come. Thank you.

OPERATOR

And ladies and gentlemen, this concludes today’s call and we thank you for your participation. You may now disconnect.

This transcript is to be used for informational purposes only. Though Benzinga believes the content to be substantially and directionally correct, Benzinga cannot and does not guarantee 100% accuracy of the content herein. Audio quality, accents, and technical issues could impact the exactness and we advise you to refer to source audio files before making any decisions based upon the above.

Photo: Shutterstock