Ideal Power Inc. (IPWR) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlighted strong product development and strategic partnerships, such as the EV Contactor Program with Stellantis and a new customer order from a Forbes Global 500 company. The Q&A section revealed positive sentiment towards the company's innovative technology and market potential. Despite a slight increase in cash burn, the optimistic guidance, strategic partnerships, and potential revenue from new orders suggest a positive outlook for the stock price over the next two weeks.

Key Financial Performance

Cash burn from operating and investing activities (Q2 2025) $2.5 million, up from $2.2 million in Q2 2024 and $2.1 million in Q1 2024. The increase is attributed to higher expenses, including hiring additional sales and engineering personnel.

Cash burn from operating and investing activities (First half of 2025) $4.6 million, up from $4.2 million in the first half of 2024. The increase is due to higher operational costs.

Cash and cash equivalents (June 30, 2025) $11.1 million. The company has no debt and a clean capital structure.

Operating expenses (Q2 2025) $3.1 million, compared to $2.9 million in Q2 2024. The increase is due to higher wafer fabrication and engineering personnel costs.

Net loss (Q2 2025) $3 million, compared to $2.7 million in Q2 2024. The increase is due to higher operating expenses.

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Operating Highlights

B-TRAN-enabled solid-state circuit breaker: Updated prototypes shipped to first design win customer, incorporating additional capabilities. Customer plans product launch later this year.

B-TRAN technology for EV contactors: Collaboration with Stellantis and other automakers for EV applications. Stellantis to issue purchase order for custom development and package devices.

Solid-state switchgear for data centers: Growing interest in B-TRAN for circuit breakers and transfer switches, offering ultra-low conduction losses and reduced waste heat.

Collaboration with global Tier 1 automotive suppliers: Engaged with fourth and fifth global Tier 1 suppliers, evaluating B-TRAN for EV contactor applications.

Partnership with Kaimei Electronic Corp.: Distribution agreement to introduce Ideal Power's products in Asia, the largest market for power electronics.

Automotive prequalification and reliability testing: Completed third-party testing with 0 failures, progressing towards full qualification later this year.

Increased power rating of products: Plans to release updated data sheets with higher power ratings, enhancing product competitiveness.

Asset-light business model: Focus on outsourced manufacturing and dual sourcing to mitigate supply chain risks and geopolitical uncertainties.

Patent portfolio expansion: 96 issued patents, 74 pending, with global coverage in key markets.

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Risk or Challenges

Customer Feedback and Product Launch Delays: The company is awaiting feedback from its first design win customer on updated prototypes, which could delay the product launch of the B-TRAN-enabled solid-state circuit breaker.

Competitive Pressures: The company faces competition from silicon carbide devices, which are currently the industry standard for solid-state solutions, despite their higher costs and conduction losses.

Supply Chain Risks: While the company has a dual sourcing strategy and is independent of China, evolving trade policies and tariffs could still pose risks to its supply chain.

Cash Burn and Financial Sustainability: The company reported a cash burn of $2.5 million in Q2 2025 and expects this to increase in the coming quarters, raising concerns about financial sustainability despite having sufficient liquidity until mid-2026.

Customer Adoption and Revenue Growth: Initial orders from large companies are small, and the company is reliant on customer adoption and scaling of B-TRAN-based products for significant revenue growth.

Automotive Qualification and Reliability Testing: While the company has completed prequalification testing, full third-party automotive qualification is still pending, which could impact customer confidence and adoption timelines.

Dependence on Key Customers: The company’s revenue projections are heavily reliant on a few key customers, such as Stellantis and its first design win customer, which poses a concentration risk.

Macroeconomic and Geopolitical Risks: The company acknowledges the dynamic nature of tariffs and trade policies, which could impact its operations and financials.

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Guidance & Outlook

Revenue Expectations: The company expects the start of its sales ramp in 2025, with revenue from product development activities, the launch of the first B-TRAN-enabled breaker by its first design win customer, and other product sales. Initial orders from large companies evaluating the technology will be small, but order sizes are expected to increase as customers progress through their design cycles and roll out B-TRAN-based products.

Cash Burn Projections: The company anticipates a third-quarter 2025 cash burn of approximately $2.7 million to $2.9 million, with a full-year 2025 cash burn just over $10 million. This increase is primarily due to the hiring of additional sales and engineering personnel.

Product Development and Launches: The first B-TRAN-enabled solid-state circuit breaker product is planned for launch later in 2025. The company also expects to increase the power rating of its products later this year, which will allow customers to design higher-rated products or use fewer B-TRAN devices, enhancing competitiveness.

Automotive Qualification: The company expects to complete full third-party automotive qualification and reliability testing of B-TRAN devices later in 2025. This qualification is anticipated to provide additional confidence to industrial customers and potentially speed up the adoption of B-TRAN-based products.

Strategic Collaborations: The company is collaborating with Stellantis on custom development and package devices targeting multiple EV applications. Stellantis is expected to issue a purchase order in the near term. Additionally, the company is working with its fourth and fifth global Tier 1 automotive suppliers, who are evaluating B-TRAN for innovative solid-state EV contactor designs.

Market Trends and Opportunities: There is growing interest in B-TRAN technology for industrial and automotive applications, particularly for circuit protection applications such as solid-state circuit breakers, transfer switches, and EV contactors. The company is also seeing increased interest in B-TRAN for data centers, where ultra-low conduction losses and reduced waste heat are critical advantages.

Geographic Expansion: The company is expanding its presence in Asia, the world's largest market for power electronics, by adding a sales director and field applications engineer for the region. This expansion is driven by increased customer engagement and the magnitude of opportunities in the region.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:How do we think about the opportunity with Stellantis? Could you be exposed to all 16 brands or just some?

A:Stellantis wants commonality across their brands and EV platform. The company will be present in multiple recognizable brands, but not all 16. Some brands like Maserati may use higher-cost solutions like silicon carbide. The opportunity spans a broad range of mid-sized vehicles for new brands.

Q:Would the total vehicle content move higher to closer to 4 figures or remain in the hundreds?

A:The total power semiconductor content in an EV is estimated at about $1,100, with the drivetrain inverter being the largest component. EV contactors may account for $300 of that content. The drivetrain inverter alone could be several hundred dollars.

Q:How would you classify the volume of design win opportunities? Are they in the tens or hundreds of thousands?

A:The automotive side has fewer players, with 5 global auto OEMs and 5 Tier 1 suppliers. The industrial side has many more opportunities, ranging from large companies like Siemens or Eaton to midsized companies. Early design wins are expected on the industrial side due to shorter design cycles.

Q:Would customers prefer silicon carbide if cost were not an issue?

A:Silicon carbide has issues with heat and conduction losses. For example, a customer’s silicon carbide breaker got too hot and failed to meet standards. The company provided breakers with 3x the power density and bidirectional capability, solving the heat issue.

Q:Can your products be integrated into a hybrid environment like a data center?

A:Yes, products can be integrated into hybrid environments. Data centers prioritize speed for power quality, and upgrades will be staged. There’s opportunity in both existing markets and new builds, as waste heat from silicon carbide solutions increases electricity usage.

Q:What are the challenges to closing sales? Are there technical challenges?

A:There are no significant technical challenges. The main issue is educating the engineering community about the new technology, as they are more familiar with older technologies like silicon carbide MOSFETs. Efforts include presenting papers and publishing articles to build awareness.

Q:What is Ideal Power doing to drive sales ramp and increase product awareness?

A:The company uses multiple approaches: internal sales teams, distributor relationships, sales reps, partnerships (e.g., Kaimei), trade shows, and technical publications. They also launched a global campaign highlighting their technology’s advantages over silicon carbide MOSFETs.

Q:What is an IGBT, and what are the advantages of B-TRAN over an IGBT?

A:An IGBT is a unidirectional semiconductor switch used in high voltage/current applications. B-TRAN offers bidirectionality, lower conduction losses, and higher efficiency. It requires fewer components for bidirectional applications, reducing cost and improving performance.

Q:When will Ideal Power achieve cash flow breakeven?

A:Cash flow breakeven depends on product and customer mix. A few key design wins could generate millions in revenue annually, especially in industrial markets with shorter design cycles.

Q:What does prequalification mean in automotive testing?

A:Prequalification involves testing devices from multiple wafer runs to identify design or packaging issues before full qualification. It ensures confidence in passing stringent automotive standards and helps improve packaging for high-volume production.

Q:How does automotive testing data influence customer adoption?

A:More test data builds customer confidence. For example, passing 50,000 power cycles without failure demonstrates reliability. Automotive standards are stricter than industrial ones, aiding adoption.

Q:Which market will contribute most to the initial revenue ramp?

A:The solid-state circuit breaker market will be the primary contributor due to shorter design cycles and multiple engaged companies.

Q:Will the most successful markets be outside the U.S.?

A:Yes, especially in Asia, where companies adopt new technologies faster. The first design win is with an Asian customer, and growth is expected to start outside the U.S.

Q:What is the cost comparison between B-TRAN and traditional IGBT solutions?

A:At scale, a single B-TRAN costs 10-20% more than a single IGBT. However, for bidirectional applications, B-TRAN is significantly cheaper as it replaces 4 components (2 IGBTs and 2 diodes). It also offers lower lifetime costs due to higher efficiency.

Q:Are all previously engaged companies still active?

A:Yes, all previously engaged companies remain active, though some move more slowly.

Q:Is the insulated gate transistor oscillator (IGTO) competitive with B-TRAN?

A:No, IGTO appears to be an incremental improvement to unidirectional IGBTs and still requires 4 devices for bidirectional applications. B-TRAN offers lower conduction losses and cost advantages.

Q:Which market will contribute most to the initial revenue ramp?

A:The solid-state circuit breaker market will be the primary contributor due to shorter design cycles and multiple engaged companies.

Q:Review of Unclear Management Responses

A:Management avoided directly addressing why the stock price lags behind the company’s progress, stating they focus on execution and expect the market to adjust as they announce more design wins and revenue.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

IPWR Transcript

Ideal Power Inc. (IPWR) Q3 2025 Earnings Call Transcript

Unknown11-13

The earnings call summary and Q&A reflect mixed signals. Positive aspects include strategic collaborations, product development, and market opportunities, particularly in EV and power electronics sectors. However, uncertainties about revenue generation timelines, unclear guidance from the new CEO, and potential barriers to sales dampen the sentiment. The lack of immediate revenue and ongoing cash burn concerns further temper expectations. Without strong positive catalysts or clear guidance, the stock is likely to remain in a neutral range.

Ideal Power Inc. (IPWR) Q2 2025 Earnings Call Transcript

Positive8-14

Ideal Power Inc. (NASDAQ:IPWR) Q1 2025 Earnings Call Transcript

Unknown5-16

The earnings call summary presents mixed signals. While there are positive developments, such as the SymCool IQ module order and engagement with Stellantis, the financials show increasing net loss and operating expenses, with modest revenue expectations. The Q&A reveals some optimism, but management's vague responses about key timelines and opportunities introduce uncertainty. The lack of a clear partnership announcement or guidance adjustment further tempers positive sentiment. Given these factors, the stock price is likely to remain stable, leading to a neutral prediction for the next two weeks.

Ideal Power Inc. (IPWR) Q1 2025 Earnings Call Transcript

Unknown5-15

The earnings call summary and Q&A reveal mixed signals. While there are positive developments such as engagement with Stellantis and a significant addressable market for SymCool IQ Modules, there are concerns about increasing cash burn and net loss, and management's vague responses in the Q&A. The company's strategic initiatives could yield long-term benefits, but near-term financial pressures and uncertainties keep the sentiment neutral. The lack of clear guidance and immediate catalysts suggests limited short-term stock movement.

IPWR Report

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2024-11-14

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2024-08-14

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2024-05-15

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