QuantumScape’s EBITDA Loss Narrows, But Billings Stay Modest

Date of Call: Feb 11, 2026

Guidance:

• Full year adjusted EBITDA loss expected to be between $250 million and $275 million for 2026.
• Full year CapEx expected to be between $40 million and $60 million for 2026, with majority invested in next generation technology.
• Customer billings expected to increase in 2026 relative to 2025 levels.

Business Commentary:

2025 Year-End Achievements:

• QuantumScape reported GAAP operating expenses of $472.6 million and a GAAP net loss of $435.1 million for full year 2025.
• The company achieved significant milestones including integrating the breakthrough Cobra process, shipping QSE-5 cells, expanding commercial engagements, and inaugurating the Eagle Line.
• The reduction in adjusted EBITDA loss to $252.3 million reflects a sustained focus on cost effectiveness and financial discipline.

Eagle Line Inauguration and Commercialization:

• The installation and inauguration of the Eagle Line, with a capital expenditure of $36.3 million for the full year 2025, marks a key step towards scalable production.
• The line serves as a blueprint for gigawatt-hour-scale production and is crucial for demonstrating the scalability and efficiency necessary for licensing partners.
• The move is supported by strategic partnerships with automotive OEM customers and technology partners.

Customer Billings and Financial Outlook:

• QuantumScape reported customer billings of $19.5 million for the full year 2025, with this amount recorded directly to shareholders' equity due to related-party requirements.
• The company ended the year with $970.8 million in liquidity, emphasizing a prudent approach to capital management.
• The financial outlook for 2026 anticipates continued efficiency improvements and an increase in customer billings relative to the previous year.

2026 Strategic Goals:

• The strategic goals for 2026 include demonstrating scalable production with the Eagle Line and advancing automotive commercialization.
• The company aims to expand into new high-value markets and continue pushing the frontier of battery performance beyond the QSE-5 platform.
• These goals are supported by a capital expenditure plan of $40 million to $60 million, primarily focused on advancing technology development.

Automotive Market Focus and Expansion:

• Automotive remains the core focus, with QuantumScape working on tailoring product solutions for vehicle programs and conducting field testing with multiple global auto OEMs.
• The expansion is driven by the increasing trend towards vehicle electrification and the unique capabilities of QuantumScape's battery technology, such as high energy density and safety.

Sentiment Analysis:

Overall Tone: Positive

• CEO Siva Sivaram called 2025 an 'extraordinary year' and 'remarkable year' where they 'succeeded on all four key goals' including shipping cells and inaugurating the Eagle Line. Management expressed 'strong year' for execution and financial discipline, with a 'robust and growing partner ecosystem' and 'diverse group of customer and application opportunities'.

Q&A:

• Question from Mark Shooter (William Blair & Company L.L.C., Research Division): With the new Eagle Line manufacturing technology, is there an ability to increase the surface area of your ceramic separator and increase the cell size?
  Response: The Eagle Line enables adaptable production for different customer needs, including varying cell size and format, serving as a scalable blueprint for customization.

• Question from Yan Dong (Deutsche Bank AG, Research Division): Is there one vertical where your technology is more suitable than others, and why is lithium-metal good for applications like stationary storage?
  Response: The technology offers a 'no-compromise solution' with high energy/power density, safety, and cost advantages, making it versatile across consumer electronics, data centers, drones, and grid storage.

• Question from Yan Dong (Deutsche Bank AG, Research Division): Can you flesh out the EBITDA guidance in terms of OpEx and context of billable help from partners?
  Response: EBITDA guidance is flat year-over-year but includes partner support; it reflects expanding automotive partnerships and new markets while improving efficiency. Customer billings are expected to be lumpy but increase in 2026.

• Question from Joseph Spak (UBS Investment Bank, Research Division): Why did conditional cash inflows with PowerCo decrease from $261 million to $150 million?
  Response: The change is a different presentation focusing on billings plus prepaid amounts, not a contractual change; the $131 million development payment potential remains.

• Question from Joseph Spak (UBS Investment Bank, Research Division): Have reports of Volkswagen slashing funding impacted your business or urgency to diversify?
  Response: The PowerCo partnership is unchanged and strong; work continues on the agreed scope. The company is also adding new customers but the core automotive focus remains.

• Question from Joseph Spak (UBS Investment Bank, Research Division): As you move to new end markets, will you need bespoke scaling efforts versus the auto strategy?
  Response: The licensing and capital-light model can adapt to new markets through various partnership structures; the core technology platform is flexible for different applications.

• Question from Aman Gupta (Goldman Sachs Group, Inc., Research Division): What are key metrics for the Eagle Line today and how will they scale to enable commercial transfer?
  Response: The Eagle Line is a pilot line undergoing systematic improvement in uptime, yield, reliability, etc., to demonstrate scalable production and serve as a blueprint for customers.

• Question from Aman Gupta (Goldman Sachs Group, Inc., Research Division): How is the $40-$60M CapEx in 2026 allocated across goals, and how should we think about sustainability?
  Response: The bulk of CapEx is for advancing beyond QSE-5 technology; it supports a capital-light licensing model, contrasting with heavy upfront investment in a manufacturing company.

• Question from Ben Kallo (Robert W. Baird & Co. Incorporated, Research Division): How are supply partners thinking about your future customers outside Volkswagen, and how does this help?
  Response: The ecosystem partners are excited about expanding into new markets and customers, which strengthens the supply chain and value proposition for all parties.

• Question from Laisha Zaack Carrillo (HSBC Global Investment Research): Does the Eagle Line require major adjustments for different segments, and does this imply higher CapEx for customers?
  Response: The foundational blueprint is adaptable, but specific customer modifications are handled through financial arrangements to maintain a capital-light company model.

Contradiction Point 1

Financial Treatment and Purpose of Customer Billings

Contradiction on whether billings represent a direct shareholder benefit or future revenue.

What is the 2026 EBITDA guidance and the operational support from partners? - Yan Dong (Deutsche Bank AG)

2025Q4: Customer billings of $19.5 million in 2025 went directly to shareholders' equity and are not part of the EBITDA loss... - Kevin Hettrich(CFO)

How does the new "customer billings" metric relate to cash inflows? - Daniel Conway (QuantumScape's Principal Analyst, Investor Relations)

2025Q3: For the Volkswagen/PowerCo deal... cash inflows create a liability on the balance sheet (which does not require repayment) and ultimately accrue directly to shareholders' equity, not impacting the P&L. - Kevin Hettrich(CFO)

Contradiction Point 2

Capital-Expenditure Intensity and Business Model Sustainability

Contradiction on the level and nature of capital investment required for the business model.

How will the $40–60 million 2026 CapEx be allocated across Eagle Line scaling, QSE-5 tech expansion, and new markets, and what are the plans beyond 2026? - Aman Gupta (Goldman Sachs Group, Inc.)

2025Q4: The bulk of the CapEx is allocated to advancing beyond the QSE-5 platform... As a technology licensing company, this level of capital expenditure is appropriate and contrasts with the billions required by a full-scale manufacturing company. - Kevin Hettrich(CFO)

Besides ceramic separators, what other areas is QS targeting in its partner ecosystem, and what are the structure and financial outlook for these partnerships? - Aman Gupta (Goldman Sachs Group, Inc., Research Division)

2025Q3: The capital-light business model is proud of its differentiation... Shareholder value comes from three streams: 1) Monetization of collaboration work... 2) Licensing royalties... 3) Value sharing with ecosystem partners. - Kevin Hettrich(CFO)

Contradiction Point 3

Financial Guidance Presentation and Interpretation

Conflicting explanations for the $130M PowerCo prepayment's status and accounting.

Why did conditional cash inflows related to PowerCo decrease from $261 million to $150 million? - Joseph Spak (UBS Investment Bank)

2025Q4: The $261 million previously included both the $130 million prepaid amount and up to $131 million in potential future development payments. The new figure focuses on the 'bird in the hand' (billings received and the $130 million prepaid), not the potential future payments. There is no change to the contractual terms. - Kevin Hettrich(CFO)

Can you outline the payment milestones and explain how the new $131 million compares to the original $130 million? - Yan Dong (Deutsche Bank)

2025Q2: The new $131 million is distinct from the prior $130 million licensing prepayment. It is for the joint QS-PowerCo scale-up team's collaboration activities. The $130 million is for future licensing fees upon technical progress and signing the full agreement. - Siva Sivaram(CEO)

Contradiction Point 4

Capital Expenditure Allocation & Model

Inconsistent messaging on the capital-light nature of the business model and CapEx plans.

How will the $40-60 million 2026 CapEx be allocated across Eagle Line scaling, QSE-5 tech expansion, and new markets, and what is the outlook beyond 2026? - Aman Gupta (Goldman Sachs Group, Inc.)

2025Q4: The bulk of the CapEx is allocated to advancing beyond the QSE-5 platform... As a technology licensing company, this level of capital expenditure is appropriate and contrasts with the billions required by a full-scale manufacturing company. The model is designed to be capital-light for shareholders. - Kevin Hettrich(CFO)

Which manufacturing process areas will be prioritized for investment to boost pilot capacity, and what are the projected end capacity and timeline for the pilot line expansion? - Mark Haywood Shooter (William Blair, for Jed Dorsheimer)

2025Q2: QS is not a manufacturing company; it is a high-touch technology licensing company. To match the 25x higher separator output from the new Cobra process, they are increasing cell build capacity. - Siva Sivaram(CEO)

Contradiction Point 5

Necessity of the Murata Partnership for Scaling

Statements conflict on whether the Murata partnership is essential for scaling production.

Will entering new end-markets require individual outreach for custom solutions, which is more difficult than the automotive strategy of scaling through partnerships? - Aman Gupta (Goldman Sachs Group, Inc.)

2025Q4: The licensing and capital-light business model is flexible... The ecosystem partners... are excited about expanding... - Siva Sivaram(CEO) and Kevin Hettrich(CFO)

How do recent competitive announcements (e.g., BYD, CATL on LFP fast-charging) impact the competitive landscape and automotive customer perspectives, and can customers cost-effectively scale separator production for series vehicles without the Murata deal, or is it primarily about speeding up? - Mark Delaney (Goldman Sachs)

2025Q1: The Murata partnership is about accelerating and making scaling more efficient, not about feasibility without them. - Siva Sivaram(CEO)