Aeluma, Inc. Q4 2025 earnings call

Thanks, Gary. Good afternoon, and welcome to Aeluma's fourth quarter and year-end 2025 earnings call. I'm here today with Founder and CEO Jonathan Klamkin and CFO Christopher Stewart. Today's discussions and responses to questions may include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today, along with the reports filed with the United States Securities and Exchange Commission. These reports, along with today's earnings release, can be found under the Investors section of our website. Aeluma assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, the company will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA.

A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC filings. Now I'll turn the call over to Aeluma's CEO, Jonathan Klamkin. Jonathan?

Thank you, Tony. I would like to begin by welcoming everyone to Aeluma's first conference call as a Nasdaq-listed company. I would especially like to acknowledge our two new covering analysts, Richard Shannon from Craig-Hallum and David Williams from The Benchmark Company. Thank you all for joining. I'm excited to highlight what our team accomplished in fiscal 2025 and the bright future we see ahead. I'm also excited to have our new CFO, Christopher Stewart, join me today on our conference call debut. By way of introduction, Chris brings over 20 years of financial leadership experience at high-growth technology companies. Chris has the strategic and financial perspective needed to scale Aeluma through its next stage of growth. Let me begin by sharing that we had an incredibly successful year executing on our plan.

We consistently performed on our R&D contracts while still having a relatively small team consisting primarily of R&D personnel. Looking ahead, with confidence in our technology's capabilities and relevance, we are building a critically important business development and go-to-market team to accelerate our engagements in target commercial markets. Interest in our technology has never been higher. We count 20 active engagements with prospective customers, including OEMs, Tier 1 and Tier 2 suppliers, system integrators, and chip manufacturers that are evaluating our technology for potential integration in future generation systems. I believe that we are approaching an inflection point when our game-changing technology will be ready for commercial adoption, aligning with the growing demand for high-performance semiconductors across a wide array of applications and industries. For those new to the Aeluma story, we started with a simple but powerful concept: semiconductors are everywhere, and they can be better.

We believed that if you could take the highest-performance semiconductor materials and innovate ways to manufacture them at scale, the impact across industries would be transformational. This was no easy feat. The modern semiconductor industry has been around for over 70 years, and yet successfully scaling compound semiconductors, which are higher-performing materials made from two or more elements, has remained elusive. Fast forward, following extensive R&D, 30 issued and pending patents, and numerous trade secrets, our team has seemingly cracked the code. Our proprietary technology is sufficiently compelling that we have attracted key government agencies like DARPA, NASA, and the Navy to support us to advance these next-generation semiconductors for mission-critical applications. These partnerships have brought non-dilutive capital for strategic R&D that has enabled technical feasibility and provided market credibility.

In this regard, the term dual-use technology comes to mind, addressing the demanding requirements for government or defense while also creating value in commercial markets. Developing technology for mission-driven systems and subsequently scaling it for commercial deployment is not a new concept, but it is core to our strategic approach. Until now, this commercial scaling of compound semiconductors has been rather limited. Leveraging our transformative technology, we have been purposefully bidding on R&D contracts to further innovation, grow our reputation, and advance our goal to commercialize in target markets. For example, we have been collaborating with the U.S. Navy to apply Aeluma's optical interconnect technology to aircraft to help move large amounts of information quickly between sensors and onboard computers. This core technology is highly adaptable to data center interconnects for AI infrastructure, where it can enable high-speed transfer of massive data sets between compute nodes.

In fact, we're engaged in discussions with several Tier 1 suppliers exploring the integration of our technology for AI infrastructure. We're also collaborating with the Department of Energy and the Navy to advance Aeluma's imaging sensor technology for critical systems to enable them to see beyond what is visible to the human eye. Our technology not only meets their rigorous requirements, but it can also be adapted for broader applications in our target markets, including mobile devices, consumer electronics, industrial automation, robotics, and autonomous systems. Several Tier 1 suppliers and OEMs across these markets are actively evaluating our technology. To this end, we have attracted significant interest from prospective customers, and our pipeline of opportunity is growing. Several third parties have validated our technology through sample evaluations, and we have active engagements with 20 prospective customers.

We expect our future business development team to advance these engagements across our funnel and to increase the pipeline to approximately double the number of commercial revenue growth opportunities over the next fiscal year. Here's how we size up the opportunity and how we are positioned to capitalize on it. We believe our technology is poised to become indispensable across the semiconductor industry. As one senior tech leader from a major Tier 1 supplier put it, "If Aeluma succeeds, the entire industry will have to manufacture this way." That's the very definition of a disruptive technology, and Aeluma has the platform to accelerate adoption across numerous markets. Based on market research and internal analysis, we estimate our SAM, the market segment that our technology addresses, could reach $4.9 billion by 2030, growing at a 48% compound annual growth rate from a base of $1 billion in 2026.

Coming back to Aeluma's story, with substantial momentum in technology advancement, IP generation, supply chain development, and customer traction, we were ready for a bigger public stage. On March 28, we announced both our uplisting to Nasdaq and the closing of an oversubscribed public offering with $13.8 million in gross proceeds to pursue significant growth opportunities we see in commercial markets. We are also proud to be an early advocate of restoring American leadership in semiconductors. In addition to the reshoring of semiconductors aimed at incentivizing increased U.S. semiconductor manufacturing, we believe it is critically important to protect American innovation, a core principle at Aeluma where, from our headquarters in California, we have established a one-of-a-kind R&D and manufacturing capability. On May 1, we rang the closing bell at Nasdaq to celebrate our uplisting. This was a proud milestone for our team, our board, and our shareholders.

Building from this, we were recently added to the Russell 3000 Index and MSCI Global Micro Cap Index, providing additional visibility and opportunity as a public company, as well as increased liquidity for our trading volume. To summarize our strong financial position, we have $15.7 million in cash and cash equivalents, no debt, and a solid portfolio of contracts to support R&D and commercialization in fiscal 2026. With our capital-like manufacturing model, we believe Aeluma is positioned to scale quickly and effectively to address mass market opportunities. In our early days, we concentrated on building our IP portfolio and our R&D and manufacturing capabilities. Now that we have a strong foundation in place, we are expanding our business development capabilities to focus on commercial market opportunities. Our efforts in fiscal 2026 are aimed at establishing the foundation to transition from R&D revenue to commercial product revenue.

We attracted new talent to our technical team and were fortunate to have Chris join our executive leadership. We recently ramped up wafer fabrication activities with our foundry partners and added equipment to support prototyping and test and validation. We are also seeing momentum building in defense and aerospace, data center interconnects for AI infrastructure, and mobile and consumer electronics, and markets with significant growth potential for Aeluma. Our partnerships with government agencies continue to strengthen, and we recently announced new wins, including contracts with NASA, the U.S. Navy, and the Department of Energy. These programs will advance Aeluma's semiconductor platform for quantum systems, optical interconnects, and imaging sensors. We are also engaged directly with major defense tech companies that are evaluating our technology for mission-critical systems applications.

We unveiled a manufacturing breakthrough in collaboration with Thorlabs, advancing quantum-enabling capabilities with Aeluma's CMOS-compatible semiconductor platform, which is scalable to 300-millimeter wafers, today's industry standard used by leading semiconductor fabs. This innovation supports commercial scalability and positions us to accelerate adoption of quantum systems. Beyond our ongoing R&D work with government agencies, we are actively engaged with a leading quantum company to explore integration of our technology. Tying it all together, Aeluma's technology is being considered for many of today's most exciting growth sectors: short-wave infrared sensors for 3D imaging and health monitoring, optical interconnects that transmit data seamlessly using light, and quantum systems that will usher in a new era of high-performance computing. These are very exciting times, and Aeluma is where the future is headed. Now I'll turn the call over to our new CFO, Chris Stewart, to discuss the financials.

Thanks, Jonathan. First, I want to say that I'm thrilled to be at Aeluma. The company is making great progress with its game-changing technology, and I really look forward to working with this talented team as we continue to build on our strong financial foundation and make the transition from R&D to commercialization. Now I'll share some highlights of our fiscal fourth quarter and full year 2025 financial results. We are pleased to report another strong quarter of revenue from our government and commercial research and development contracts. For the quarter ending June 30, we reported revenue of $1.3 million compared to $279,000 in the same quarter of 2024 and $1.3 million in the third quarter of 2025. Revenue for the full fiscal year was $4.7 million, slightly above the high end of our previous guidance of $4.4-$4.6 million. This compares to $919,000 for fiscal 2024.

GAAP net loss for the fourth quarter was $859,000 or $0.05 per share versus a net loss of $989,000 or $0.08 per share for the comparable period last year. On a sequential basis, GAAP net income for the third quarter was $1.5 million or $0.12 and $0.11 per basic and diluted share. The change in net income from the prior quarter was primarily due to a $2.6 million one-time non-cash gain in the fair value of derivative liabilities recorded in the third quarter. Non-GAAP net loss for the fourth quarter was $112,000 or $0.01 per share compared to a GAAP net income of $7,000 or break-even on a per-share basis in the prior quarter, and a loss of $817,000 or $0.07 per share in the comparable period last year.

Adjusted EBITDA for the quarter ended June 30, 2025, was a loss of $113,000 compared to a loss of $718,000 in the same quarter last year and a gain of $109,000 in the prior quarter. Adjusted EBITDA for the year was $186,000 compared to an adjusted EBITDA loss of $3.5 million for fiscal 2024. The year-over-year improvement in adjusted EBITDA was primarily due to the $3.7 million increase in revenue. We closed the fourth quarter with a strong balance sheet, including $15.7 million in cash and cash equivalents compared to $1.3 million as of June 30, 2024, and $15.9 million as of March 31, 2025. We were fortunate to have a low cash burn model. Sorry. We currently have no debt, and given the near balance of revenue and operating expense in fiscal 2025, we were fortunate to have a low cash burn model.

Our net cash used in operating activities was $1.1 million in fiscal 2025 compared to $3.5 million in fiscal 2024. Now, turning to our expectations for fiscal 2026, Aeluma expects revenue in the range of approximately $4-$6 million, primarily from new and existing government and commercial R&D contracts. For most of these contracts, revenue is recognized on achievement of program milestones. The timing of reaching these milestones can lead to quarter-to-quarter variability in our revenue. We view this revenue as important non-dilutive financing that supports our development efforts to progress our technology toward commercial readiness. Given our disruptive technology and shifting more of our focus to commercialization, we are highly selective with these engagements, bidding only on projects we believe will have broad commercial appeal in our target markets.

Going forward, we expect to gradually increase spending as we invest in growth initiatives, including increased wafer fab production and expanding our business development, operation, and technical teams. We expect to approximately double headcount over the course of fiscal 2026 and expect our expenses to increase accordingly. We are extremely proud of our accomplishments to date, especially the speed with which our small team has transitioned from idea to validation, revenue generation, and customer traction, all while being prudent with our resources and increasing shareholder value. With our historically capital-efficient model, we plan to increase investment in areas that we believe will position us to benefit from exciting opportunities we see for our technology. Our momentum continues to build as we lay the groundwork to effectively transition to commercialization at a critical time when several of our target market industries are poised for significant technology-enabled growth.

Now I'll turn the call back to Jonathan for his closing remarks before we open the call to your questions.

Thank you, Chris. We are extremely encouraged by the confidence our current and prospective customers have in our technology, our ability to deliver, and by the huge opportunities ahead of us across multiple industries. We are deeply committed to our mission, which is to deliver the world's highest-performing semiconductors, and to our business model, which combines cutting-edge IP with capital-like manufacturing. We anticipate that fiscal 2026 will be a year of considerable progress and value creation. Our priorities are to execute on our R&D contracts while also accelerating the development of our commercial opportunities across several large and exciting markets. Our objectives are aimed to best position us to capitalize on the large market opportunities we expect over the next few years and to drive toward long-term profitable growth.

These include building our business development and go-to-market team by hiring experienced and connected leaders in our target markets while also investing in our production capabilities to advance manufacturing readiness. Following our uplift into Nasdaq, we are also committed to having a best practices investor relations program, and we recently engaged Financial Profiles to help us communicate the Aeluma story to a larger universe of potential investors. We will be participating in several upcoming investor conferences, including the LD Micro Conference in San Diego in October and the Craig-Hallum Alpha Select Conference in New York City in November. We look forward to seeing some of you at these events. Lastly, I would like to thank our incredible team, our shareholders, and our customers for joining us on our journey to reshape semiconductor manufacturing for future generation systems. Operator, you can now open the call for questions.