Ideal Power's Q3 2025 Earnings Call: Contradictions Emerge on Sales Execution, Manufacturing Strategy, and Revenue Outlook

Guidance:

• Q4 2025 cash burn expected to be ~$2.5M–$2.7M.
• Full-year 2025 cash burn expected to be ~ $10M (vs $9.2M in 2024, excl. warrant proceeds).
• Operating expenses expected to increase modestly in coming quarters due to hiring and development.
• Expect quarter-to-quarter variability in R&D and stock-comp expense timing.
• Cash of $8.4M at Sept 30, 2025; liquidity expected to fund operations through at least mid-2026.
• Potential near-term funding from product sales, development agreements and capital markets.

Business Commentary:

• Policy and Executive Leadership:
• Ideal Power announced a planned transition of its CEO role with David Somo taking over from Dan Brdar.

• The new CEO has extensive experience in the semiconductor industry and has joined to drive revenue growth in target markets.

• Automotive Partnerships and EV Adoption:

• Ideal Power secured a purchase order from Stellantis for custom development and packaged B-TRAN devices targeting multiple EV applications.

• The company expects Stellantis to award a multiyear EV contactor program, which could expand to include hybrid vehicles.

• B-TRAN and Market Expansion:

• 
• The company's first design win customer successfully completed testing of updated solid-state circuit breakers, with potential first-year sales reaching several hundred thousand dollars.

• B-TRAN technology's ultra-low conduction losses and bidirectionality provide a competitive advantage in high-growth power applications across data centers, industrial, and automotive markets.

• Product Advancements and Commercialization:

• Ideal Power increased the power rating of its discrete B-TRAN product by 50%, aligning with market trends toward higher power architectures.
• The company has expanded its global reach by adding its first direct salesperson in Asia, where interest in BTRAN is growing rapidly.

• Financial Management and Liquidity:

• The company's Q3 cash burn was at the lower end of guidance, with a total cash and cash equivalents of $8.4 million as of September 30, 2025.
• Ideal Power has sufficient liquidity on its balance sheet to fund operations through at least mid-2026, supported by potential sources of funds and strategic relationships.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management announced a Stellantis purchase order and completion of the first deliverable, a completed design-win customer testing moving to product finalization, a 50% power-rating increase on discrete B-TRAN devices, positive third-party automotive test results (0 failures to date), and reiterated liquidity through mid-2026.

Q&A:

• Question from Casey Ryan (WestPark Capital): So I just wanted to start with generally automotive. It feels like the opportunities are with EV platforms and the growth of those platforms generally. And so I just want to sort of confirm that for myself before we go a little further.
  Response: Automotive is a key target market but involves multiyear development cycles; Ideal Power is progressing through evaluations toward qualification and series engineering.

• Question from Casey Ryan (WestPark Capital): What's driving the automakers to look for better solutions than existing ones—battery density, electronics per vehicle, etc.?
  Response: Shift to higher-power architectures (e.g., 800V) is driving demand for higher efficiency, improved power density and lower system cost—areas where B-TRAN is positioned to help.

• Question from Casey Ryan (WestPark Capital): Charging stations moving to 800V—does that create similar opportunities for Ideal Power?
  Response: Yes; fast DC charging and home bidirectional charging present opportunities where B-TRAN's bidirectionality and efficiency are advantageous.

• Question from Casey Ryan (WestPark Capital): Is the Asian power-management customer's product currently for sale or will it commercialize in 2026?
  Response: Not yet for sale—customer has successful prototypes and testing is complete; timing for commercial rollout is pending and will be updated later.

• Question from Webcast Submission (Investor): Any additional context around the CEO transition? Was this planned?
  Response: Yes—Dan Brdar's retirement was planned; the board conducted a search and hired David Somo for his semiconductor commercial experience to accelerate revenue.

• Question from Webcast Submission (Investor): How do you see the markets evolving (data centers, industrial and automotive) and what excites you?
  Response: Trend to higher power levels (800V in data centers and EVs), move to solid-state and bidirectional systems; B-TRAN fits these needs with efficiency, density and cost benefits.

• Question from Webcast Submission (Investor): Do you expect the initial sales ramp and milestones to be achieved within 2025?
  Response: No firm commitment yet—new CEO is still assessing business details and will provide a commercialization outlook after deeper customer engagement.

• Question from Webcast Submission (Investor): What is Ideal Power doing to expand the sales pipeline?
  Response: Added direct sales in Asia to accelerate customer engagements and are prioritizing closing existing opportunities while expanding the funnel.

• Question from Webcast Submission (Investor): How does B-TRAN compare to silicon and silicon carbide solutions?
  Response: B-TRAN delivers ultra-low conduction losses and bidirectionality, enabling higher efficiency, improved power density and lower system cost versus alternative silicon/SiC solutions.

• Question from Webcast Submission (Investor): Any color on Tier 1s and OEMs besides Stellantis in automotive?
  Response: Engaged with several OEMs and Tier 1 suppliers across applications (contactors, BDUs, charging, inverters); adoption is expanding with 800V trends and likely replacement of electromechanical contactors.

• Question from Webcast Submission (Investor): Is the Stellantis drivetrain/contactor program likely to be included in hybrids?
  Response: Program focuses on EVs but B-TRAN benefits extend to hybrids and would be a natural extension once adopted in EVs.

• Question from Webcast Submission (Investor): You upgraded the power rating to 75A and tested to 150A—what does that margin mean and are industry standards applicable?
  Response: Company is conservative rating at 75A while having tested to 150A to provide headroom; there is no single industry standard margin and ratings will scale with testing and application needs.

• Question from Webcast Submission (Investor): Please provide any color on manufacturing—foundries and packaging?
  Response: Two foundries (Asia and Europe) and two packaging partners; Asian foundry is ahead on yield but both are usable for customers; overall manufacturing posture is ready for commercialization.

• Question from Webcast Submission (Investor): What are the main barriers to closing sales?
  Response: Primary barrier is customer education and conservative engineering adoption of new device architecture; company mitigates with evaluation kits, reference designs and aims to accelerate adoption via automotive qualification.

• Question from Webcast Submission (Investor): How should investors think about tariffs and trade policies on Ideal Power?
  Response: Tariff landscape is fluid but current impact is expected to be minimal; power semiconductors often exempt and the company believes it can manage future policy or supply-chain shifts.

Contradiction Point 1

Sales Challenges and Market Opportunities

It highlights differing perspectives on the challenges and opportunities in closing sales and the approach to expanding the sales pipeline, which can impact investor trust and stock price volatility.

What are the main barriers to closing sales? - Jeff Christensen (Asked by Investors)

20251113-2025 Q3: Introducing B-TRAN as a new technology involves educating customers about its innovative architecture. Engineers are familiar with traditional devices like IGBTs and MOSFETs but need to understand B-TRAN's function. - David Somo(CEO)

What challenges are you facing in closing sales with B-TRAN technology? - Jeff Christensen (Unidentified Company)

2025Q2: The primary challenge is not technical, but the education process for engineers accustomed to established technologies like IGBTs. We are working to educate the technical community on B-TRAN's benefits. - R. Daniel Brdar(CEO, President & Director)

Contradiction Point 2

Manufacturing and Supply Chain

It involves differing statements on the manufacturing capabilities and supply chain partnerships, which are crucial for operational efficiency and reliable product delivery.

Where do we stand with manufacturing? - Jeff Christensen (Asked by Investors)

20251113-2025 Q3: We have two foundries, one in Europe and one in Asia. We are comfortable utilizing devices from either for end product sales. - Timothy Burns(CFO)

What changes are in the Blackwell GPU, and how do they impact revenue and customer reactions? - Vivek Arya (Bank of America Securities)

2025Q2: Our supply chain is in excellent shape. The change to the Blackwell GPU mask is complete without functional changes. Production is expected in Q4. - R. Daniel Brdar(CEO, President & Director)

Contradiction Point 3

Customer Engagement and Sales Pipeline Expansion

It highlights differing perspectives on the engagement with customers and the efforts to expand Ideal Power's sales pipeline, which can impact strategic planning and market penetration.

What steps is Ideal Power taking to expand its sales pipeline? - Jeff Christensen (Ideal Power Investor Relations)

20251113-2025 Q3: We've added direct sales in Asia and are already conducting meetings with current and prospective customers. Asian companies generally adopt new technologies faster than North American and European counterparts. - David Somo(CEO)

What are the implications of Wolfspeed's financial challenges as a leader in silicon carbide development and manufacturing? - Jeff Christensen (Ideal Power Investor Relations)

2025Q1: We have a great number of existing engagements with customers, both new and existing. We do have the privilege of having some of the largest automakers in the world as customers and those are very significant opportunities for us. - Dan Brdar(CEO)

Contradiction Point 4

Revenue and Profitability Expectations

It involves differing expectations regarding the timeline for achieving cash flow breakeven and revenue growth, which are critical for investor forecasting and strategic decision-making.

How long is your sales cycle? - Jeff Christensen (Ideal Power Investor Relations)

20251113-2025 Q3: Revenue is a priority, and I plan to leverage my experience in semiconductors to drive growth in target markets. - David Somo(CEO)

What steps are needed to achieve cash flow breakeven? - Jeff Christensen (Ideal Power Investor Relations)

2025Q1: It depends on the mix, but it's just a few key design wins. These large companies could result in millions in annual revenue, pushing us to profitability. - Tim Burns(CFO)

Contradiction Point 5

Manufacturing Strategy and Partnerships

It involves differing statements regarding the company's manufacturing strategy and relationships with foundries, which are essential for production efficiency and cost management.

Can you elaborate on the current status of manufacturing? - Jeff Christensen (Ideal Power Investor Relations)

20251113-2025 Q3: We have two foundries, one in Europe and one in Asia. We are comfortable utilizing devices from either for end product sales. We also have relationships with two packaging houses, one primarily for production in Asia and one in the U.S. for development work. - Timothy Burns(CFO)

Can you discuss the shipment timeline and expected revenue recognition for the Sekorm Advanced Technology order? - Casey Ryan (WestPark Capital)

2025Q1: We have the wafer fabrication and packaging arrangements in place, and we expect to continue to leverage those as we've done in the past. Our suppliers have the capacity for our needs, both in wafer fab, packaging, and assembly. - Dan Brdar(CEO)