Enovix Shrinks Quarterly Loss, Vows to Cut Costs As Battery Maker's Stock Soars 22%

Battery maker also announces deal with unnamed smartphone maker

Enovix said it had reached a development agreement with an unnamed smartphone maker for its batteries.

Shares of Enovix Corp. rallied 21.7% in the extended session Wednesday after the battery maker narrowed its quarterly loss and said it plans to cut more costs on its road to profitability.

The company is taking “decisive actions” to reduce its cash burn, “accelerating plans to identify additional efficiencies as we scale,” it said in a statement accompanying first-quarter results.

Separately, the Fremont, Calif., company said it reached a development agreement with a top smartphone maker. Enovix did not name the maker, saying only that it was one of the top five smartphone makers in the world by unit volume.

The requirements for smartphone batteries “are incredibly rigorous and set the standard for consumer electronics more broadly,” the company said.

Enovix lost $46.4 million, or 28 cents a share, in the quarter, compared with a loss of $73.6 million, or 47 cents a share, in the year-ago quarter.

Adjusted for one-time items, the company lost 31 cents a share, meeting the FactSet consensus.

Revenue rose by $21,000 to $5.3 million, thanks to outperformance from batteries sold to Internet-of-Things customers, Enovix said. Analysts polled by FactSet expected revenue of $4.1 billion in the quarter.

Enovix said it plans to cut more than one-third of its fixed costs, or more than $35 million annualized, by the end of this year.

“A more efficient cost structure significantly reduces our capital needs and accelerates our path to profitability,” Enovix said in the statement.

The company ended the first quarter with $262.4 million in cash and equivalents. It guided for second-quarter revenue between $3 million and $4 million, and an adjusted loss between 22 cents and 28 cents a share in the quarter.

That compares with analysts’ expectations of revenue around $4.1 million and an adjusted loss of 23 cents a share for the current quarter.

Shares of Enovix are down 48% so far this year, contrasting with gains of around 5% for the S&P 500 index.