Energous Corp. Stock

Good day and welcome to Energous Wireless Power Solutions Second Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note that this event is being recorded. As a reminder, during today's call, the company will make forward-looking statements. These statements are subject to inherent risk and uncertainties, detailed in the company's filings with the Securities and Exchange Commission. Actual results may differ materially from those anticipated, except as otherwise required by federal law.

Energous disclaims any obligation to publicly release updates or revisions to any forward-looking statements to reflect changes in expectations. I would now like to turn the conference over to Mallorie Burak, Chief Executive Officer and Chief Financial Officer. Ma'am, please go ahead.

Thank you, and thank you, everyone. I would like to first thank you for joining us on our Second Quarter 2026 Earnings Call. For those who joined us on the first call in May, welcome back. For those who are newer to the Energous story, I would like to encourage you to review the replay of our Q1 call, which provides a full company overview and the commercial foundation for what I will be discussing today. I will keep the background context brief today and focus on what has changed and what is building.

The short answer is a great deal is building. Our active deployments are expanding in scope, geography, and use cases at a pace that gives us increasing confidence in the long-term revenue trajectory of this business. Our proof-of-concept pipeline has grown both in size and quality of the opportunities, and our technology platform has advanced in ways that are directly driving commercial demand. Before I get into the commercial updates, I want to address our second quarter financial results directly and with full transparency because the gross margin line requires context that the numbers alone do not provide.

Revenue for the three and six months ended June 30, 2026, was approximately $3.1 million and $6.2 million respectively, versus approximately $1 million and $1.3 million in the same periods in 2025, a 217% and 368% improvement over the same prior period -- prior year periods. Driven by our performance in the first half of 2026, Energous achieved a new historic revenue milestone, having surpassed $10 million in revenue over the trailing 12 months. For the six months ended June 30, 2026, gross profit was $1.2 million, representing a 176% increase versus the same prior year period.

Gross margin was 19% for the six months ended June 30, 2026. Gross margin during the second quarter was below the levels we achieved in the recent quarters. This was driven by three primary factors, all of which we believe are temporary in nature and associated with the execution of our long-term growth strategy. First, as we introduced important hardware enhancements across our product portfolio, all of which were driven by our Fortune 10 customers, who were also requiring delivery of those upgraded products in the second quarter, we were limited to U.S.-based capacity as our contract manufacturer overseas was unable to retool its line in time to produce any volume in the second quarter.

As a result of these limitations, our U.S.-based contract manufacturer incurred one-time costs associated with retooling and upgrading production lines. These investments were necessary to support the enhanced product design, improve manufacturing capability, and position us for higher production volumes going forward. While these transition costs impacted this quarter's margins, they are not expected to continue at the same level going forward. Second, we experienced supply chain disruptions affecting several critical components. The disruptions were partly attributable to the AI-driven vacuum effect that resulted in finite global supplies of critical components being directed to hyperscalers.

To maintain production schedules and meet customer commitments for Q2, we sourced components from alternative suppliers at a higher than normal cost. Although these actions created incremental material cost pressure, they enabled us to avoid significant production delays and preserve our delivery commitments. As supply availability normalizes and our primary sourcing channels stabilize, we expect this cost pressure to diminish. Third, we made a deliberate decision to prioritize product availability for large strategic customers. In certain situations, we absorbed higher input costs rather than delay shipments or disrupt customer deployments.

While this resulted in lower gross margins in the near term, we believe it was the right strategic decision to judiciously ramp our U.S.-based capacity in order to protect customer relationships, support continued revenue growth, and reinforce our reputation as a reliable supplier. Taken together, these factors reduced gross margins during the second quarter but should be viewed as transitional rather than structural. Importantly, demand for our product remains strong. Our competitive position continues to improve, and none of these factors change our long-term margin objectives to reach 40%-plus gross margins.

Looking ahead, the production line upgrades are substantially complete in the U.S. and are in progress at our overseas contract manufacturer with a goal of producing a limited volume of products overseas during the third quarter and expanding that volume in the fourth quarter. We are actively managing supply chain conditions, and the extraordinary costs associated with component sourcing are expected to moderate over time. As these temporary headwinds subside and operational efficiencies are realized, we expect gross margins to progressively improve over the coming quarters. Our strategy has always been to optimize long-term shareholder value rather than maximize quarterly results.

We believe the investments we made this quarter strengthened our manufacturing capability, protected key customer relationships, and positioned the business for sustained growth. We remain confident in our ability to return gross margins toward our historical range while continuing to deliver revenue growth. I also want to note that effective July 1st, we implemented a price increase across our product lines. This pricing action, combined with the production normalization and revenue scaling, supports our confidence in the Q3 and Q4 margin recovery I just described.

One additional highlight worth noting, in the second quarter of 2026, five customers accounted for approximately 74% of our revenue. Compare that to a year ago when two customers accounted for approximately 94% of revenue. That shift reflects meaningful diversification of our commercial base across multiple enterprise relationships and verticals. And it is a trend that we expect to continue as our pipeline advances. I will now provide updates on each of our active commercial programs before turning it over to Giampaolo for the broader pipeline and technology discussion.

Our active commercial deployments are the programs where our technology is live in production environments, generating revenue today, and scaling in scope and geography. I want to give investors specific updates on each program because the trajectory of these relationships is the most important indicator of where the business is headed. Our first and largest active commercial deployment is with a leading national retailer across its distribution and retail network. This program targets approximately 4,700 U.S. retail locations, and we have delivered thousands of PowerBridge Pro units to ensure that the project remains on track to complete installations across those retail stores based on the customer's schedule.

That milestone completion is significant. It will mark the full build-out of the initial program scope and establishes a baseline for expansion discussions already underway. Approximately 90% of the rollout has now been completed, representing a major milestone for both the customer and Energous. What is particularly exciting about this relationship is it is not standing still while the initial store rollout completes. The customer is actively testing additional use cases within retail stores that go beyond the original cold chain compliance, including state of inventory plan and in-store internalized parcel delivery applications.

We also believe that both distribution centers and their trucking fleet could represent expanded deployment opportunities in the future. These conversations reflect a customer that has gained confidence in the technology's production scale performance and is now exploring what else it can do within the same installed infrastructure. Beyond the retail store program, we are also working with this customer across approximately 50 of its membership warehouse locations. We are supporting a cold chain initiative with this major retail customer by helping enable real-time visibility into patent movement -- pallet movement throughout the receiving process.

The objective is to improve operational efficiency and strengthen cold chain compliance by providing continuous insight into asset dwell time from the loading dock to refrigerated storage. The plan is to expand that program to approximately 550 locations at the beginning of next year with what we believe could be a broader rollout in 2027. We are encouraged by the trajectory of this relationship and the scope of what it could represent over the next 12 to 24 months. Our second Fortune 10 commercial deployment is with a major enterprise in the e-commerce, technology, and cloud services sector, is accelerating in a way that we believe investors should understand because the scale of what is developing is substantial.

When we reported on this program in Q1, we noted 14 international installations outside the U.S. The number -- that number has grown and more importantly, the scope of the program has expanded significantly in both geographies and use cases. This customer is now actively deploying across multiple international markets with several new countries on the expansion roadmap. The international dimension of this program alone represents a deployment opportunity that is many multiples of what we initially described. Equally important is the use case expansion within this relationship. We are currently supporting a total of five distinct use cases that are in active deployment.

None of the five are fully deployed yet at scale. Each is in earlier stages of what we believe will ultimately be a very large multi-use case, multi-geography, and multi-facility program. The breadth of what this customer is building with our technology across use cases and geography simultaneously is a testament to the platform's versatility and the depth of this commercial relationship. One additional proof-of-concept I'd like to touch on is an update on a program that was characterized only broadly in our Q1 commentary. We're in an active commercial program with a major federal government agency focused on the transport and processing of letters and packages across its facility network.

This program is directly enabled by our U.S.-based contract manufacturing capability, which meets the domestic manufacturing requirements that are a condition of federal procurement. That strategic infrastructure investment is paying off in exactly the way that we anticipated when we made it. The proof-of-concept program is currently active. It generated meaningful revenue in the second quarter and was one of our top five customers. The use case centers on dock door operations, specifically checking items in and out and loading materials onto trailers, where real-time wireless tracking eliminates manual processes and improves throughput accuracy.

We are in discussions about the multi-stage deployment that could span up to 500 sites over the next 2 to 3 years. In the near term, we believe this program has the potential to ramp to a substantially larger number of active sites within the next 12 months. The government sector represents a category of enterprise customer where domestic manufacturing requirements, infrastructure security standards, and system reliability benchmarks all work in our favor. This program is early stage in the context of its full potential, and we look forward to providing further updates as it advances.

I will now turn it over to Giampaolo, our Chief Strategy and Growth Officer, to discuss our technology platform advances, the Wiliot partnerships, our proof-of-concept pipeline, and the broader commercial dynamics we are seeing. Giampaolo?

Thank you, Mallorie. I intend to cover four areas today. An important product capability update that is driving increased demand, an update on the Wiliot partnership and what it means for our pipeline, a program-by-program update on our proof-of-concept portfolio, and a discussion on how the enterprise sales cycle is evolving in ways that we think investors need to understand to properly evaluate our pipeline. On our Q1 call, we described our PowerBridge platform as a wireless power network, providing ambient IoT -- powering ambient IoT, delivering wireless power to battery-free devices, and sending the data they produce to the cloud, providing real-time visibility into the physical layer.

That is essentially what we are selling, real-time visibility. That description remains accurate, but something important has evolved in how customers are deploying and requesting our technology. And I want to explain it because it directly drives demand growth. Previously, our PowerBridge transmitters were primarily deployed alongside the nearby Bluetooth gateway to route the data from battery-free sensors into the cloud. While effective, this required separate gateway hardware at each deployment site. We have now added integrated data capability directly into the PowerBridge Pro+, which means that the data device simultaneously delivers wireless power and provides a data pathway into the cloud without requiring a separate Bluetooth gateway infrastructure.

The product application is significant. The PowerBridge Pro+ with integrated gateway capability simplified deployment architectures, reduced hardware footprint per site, and give customers an easier, more reliable path for sensor data to travel into the cloud infrastructure. For enterprise customers managing deployment across hundreds of thousands of sites, eliminating a component reduces installation complexity and ongoing maintenance requirements at scale. Customer demand for this capability has been strong. We are seeing requests from both existing customers and new pipeline of opportunities specifically seeking the integrated data plus power solution.

We also believe this capability has commercial potential beyond our end-to-end solution. Our Wiliot partnership is one example of where the PowerBridge Pro+ is being evaluated for broader deployment. Turning to our Wiliot partnership, they continue to be a strong partner and I want to provide context on the nature of that relationship and what it means for our commercial pipeline in a way that we have not fully articulated before. Wiliot has done an outstanding job advancing the industry with its battery-free sensing platform and data intelligence capabilities. What's often overlooked, however, is that every physical AI solution ultimately depends on a reliable energy layer.

Sensors can only generate persistent intelligence if they have access to persistent energy. In deployments where ambient energy alone cannot consistently support enterprise-scale performance, RF wireless power infrastructure can provide a predictable energy layer that helps enable continuous sensing and trusted operational data. That's where Energous contributes, providing the infrastructure that connects the physical world to enterprise AI. As enterprise deployments scale from pilots to production, the conversations shift from simply connecting sensors to ensuring they can operate reliably and continuously. That's where energy infrastructure becomes increasingly important. Battery-free sensing, persistent connectivity, and enterprise AI all depend on a trustworthy source of energy.

The programs we are supporting together demonstrate how RF wireless power infrastructure complements battery-free sensing to deliver the persistent stream of operational data that enterprise customers require. Looking ahead, we believe the role of persistent energy infrastructure will become increasingly important as physical AI deployments as they expand across larger, more complex operating environments. On our Q1 call, we described our proof-of-concept pipeline as spanning retail distribution, supply chain, and inventory management, food service, manufacturing, and government sector. Since that call, the pipeline has continued to develop. I want to provide a program-by-program update on the initiatives we have previously characterized and introduce several new ones.

But before I do, I want to directly address the question of commercial decision timing that we introduced on the Q1 call, because it requires context that is important for investors to have. On our Q1 call, we say we expect several active programs to reach a commercial decision during 2026. I want to provide investors with a more complete picture of what that means and how the enterprise sales cycle actually works for technology of this nature because timing of contract signature is not the right indicator of a commercial progress. The enterprise sales cycle for wireless power network infrastructure has shortened significantly as the technology has matured. We are now seeing cycles of six to nine months for new enterprise program, down from 18 to 24 months two years ago.

That compression reflects how much more familiar enterprise customers are with ambient IoT technology and how much clear the value proposition has become. But six to nine months is still a deliberate process and investors should understand what that process looks like. It begins with identifying the use case and the customer-specific requirement. By agreeing on the key performance indicators and the success criteria that the proof-of-concept is designed to validate, that alignment phase alone can take more than a month. The proof-of-concept deployment phase can take up to three months from start to finish, and depending on the results and the number of use cases being evaluated, the program might expand to include additional facilities or additional use cases before a commercial decision is made.

Some customers moved directly from a successful POC deployment to deployment. Others initiated a large-scale multi-location POC before committing to a full rollout. Every customer has its own requirement and its own decision process. What is important for investors to understand is that this process is a sign of the technology maturity, not a sign of pipeline stagnation. The fact that our enterprise customers are investing months of internal resources and procurement processes into evaluating our technology is evidence that they are treating these as a serious infrastructure decision, not an experiment. The programs that take the longest to reach a commercial decision are often the ones with the largest potential deployment scale.

I also want to note an important distinction in how we manage our pipeline. In programs where we are partnering with Wiliot, the pace of proof-of-concept initiation is largely driven by Wiliot and in its customer relationship. In programs where we deploy our end-to-end solution directly, we control the pace of deployment and the customer relationship more directly, often within the support of AWS. Both channels are valuable and both are growing. One more important point on pipeline quality versus pipeline count. A year ago, the average size of a commercial opportunity entering our pipeline was meaningfully smaller than what we are seeing today. The pipeline of opportunity we're building now is exponentially larger in aggregate than what we were managing 12 months ago.

The magnitude of the opportunity within each individual customer relationship is many multiples of what it was previously. Every program that is now entering our pipeline operates at a scale that would have been exceptional a year ago and is becoming the new norm. That shift in the quality and scale of our pipeline is the most important commercial development of 2026 that we have not yet fully communicated to investors. I want to provide updates on several of our activities at the proof-of-concept programs. We have completed the initial proof-of-concept deployment with a major national quick service restaurant operator. This customer was one of our top five during the quarter.

The evaluation demonstrates technology performance in exactly the food preparation and the cold storageenvironments where battery-free wireless sensing is most valuable, including the lower range temperature environment where, to our knowledge, we are the only provider with a proven solution. We are now in active conversation with this operator about plans for a rollout across its store network. Equally important, we are also in conversation with distributors and other participants in their ecosystem who represent additional and independent commercial opportunities. This is an important data point as national QSRs often require that their suppliers implement new operational infrastructure to augment traceability.

These supplier customers include some of the most well-known QSR chains in the world. A national QSR relationship, if it progresses to its full rollout, represents a deployment potential measured in thousands of locations. In addition, gaining access to its suppliers as well creates an exponential sales opportunity for us. We look forward to providing further update on this program as the planning conversation advance. Separately, we are currently in an active proof-of-concept deployment with a national grocery chain operating hundreds of stores. The grocery vertical is one where cold chain compliance, inventory visibility, and food safety monitoring create a compelling and immediate value proposition for wireless power network infrastructure.

Importantly, this opportunity is with our end-to-end solution, is in an active evaluation, and we look forward to providing updates as it advances. Beyond the program I have described, our pipeline continues to expand. We have initiated initial proof-of-concept engagement in recent weeks across new enterprise relationships and new verticals that are not yet at the stage to discuss more specifically. What I can say is that the quality and the scale of this new opportunity reflect a market that is increasingly familiar with wireless power network infrastructure and increasingly ready to deploy it. Overall, the aggregate features of our commercial pipeline today is fundamentally different from what it was 12 months ago, and I want to make sure investors understand why.

It's not just that we have more programs. It is that each program is operating at a scale of potential deployment that is multiples of what we could have seen in 2025. The Fortune 10 programs alone represent potential deployments across thousands of locations each. The QSR relationship represents potential across thousands of locations if it is progresses to full rollout. The Federal Logistics Program has a multi-stage roadmap spanning hundreds of sites. The Warehouse Club Expansion Program has hundreds of locations beginning of next year. The pipeline we are managing today is one where a single commercial decision by one or more of our advanced stage partner will be transformative for our revenue trajectory. We expect to be able to report meaningful commercial advances across several of these programs over the balance of 2026 and into 2027.

I will now turn it back to Mallorie.

Thank you, Giampaolo. Before Greg walks through the financials in detail, there are a few additional items I want to address. Our ATM facility remains in place and we have made no use of it since our Q1 call. During last quarter's call, I committed that there were no plans for additional ATM usage this year and that commitment stands. We believe our cash position at quarter end of $31.2 million is sufficient to support our commercial programs and we remain confident in our ability to execute without additional equity financing. I want to briefly address a question that we have been hearing about the customer launch visible on our AWS partner profile.

Investors have frequently referenced our partner web page with AWS, which shows a customer launch badge. This number reflects formal co-sell engagements initiated between AWS account managers and Energous through the AWS partner system, a top-of-funnel pipeline activity metric that includes both proof-of-concept completions, commercial deployments, and in many cases, one end customer may represent a significant number of launches as they define it. The trajectory of this number is consistent with how a healthy enterprise co-sell pipeline matures. Early in a partnership, the primary activity is AWS account managers broadly identifying and introducing a solution across their customer base, which drives the launch count higher.

As most qualified opportunities move into the active evaluation and deeper engagement, the rate of new launches naturally normalizes. It is also worth noting that the number can decline as programs conclude their formal co-sell engagement period, graduate to direct commercial relationships, or are closed out of the system for administrative reasons. A declining or plateauing count is not a signal that our commercial momentum is slowing. The right place to focus is on what is happening within those engagements. Our AWS partnership is an active co-selling relationship that is generating real enterprise conversations across meaningful verticals.

We are advancing the most mature of those programs toward commercial decisions, and that progression is the metric that matters. Several of the opportunities we've discussed today are relationships from our AWS partnership. I also want to briefly note one other significant milestone that occurred between our Q1 call and today that provides additional context on where this company stands. We received FCC certification for the PowerBridge Pro+ during July, our most advanced transmitter featuring integrated gateway data connectivity. As Giampaolo described, this certification enables a simplified deployment architecture that is directly driving customer demand.

The PowerBridge Pro+ is now fully certified for U.S. commercial deployment, and customer interest has been strong since this certification. Importantly, our PowerBridge Pro+ is a key component to our end-to-end solution. Therefore, the certification represents a necessary step before active deployments can begin. The PowerBridge Pro+ is now in active deployment discussions with several of the programs Giampaolo described, and we expect it to be a meaningful contributor to our second half revenue mix.

I will now turn it over to Greg, our Chief Accounting Officer, for the financial review.

Thank you, Mallorie, and good afternoon. I will now review our financial results for the second quarter and first half ended June 30, 2026. Revenue for the three and six months ended June 30, 2026, was approximately $3.1 million and $6.2 million respectively, versus approximately $1 million and $1.3 million in the same periods in 2025. A 217% and 368% improvement over the same prior year periods respectively. Second quarter 2026 revenue showed a slight improvement over the first quarter of 2026. [indiscernible] Year-to-date 2026 revenue through June 30, 2026, exceeded the full year's revenue reported for 2025 of $5.6 million.

For the six months ended June 30, 2026, gross profit was $1.2 million, representing a 176% increase versus the same prior year period. Gross margin was 19% for the six months ended June 30, 2026. The company has maintained its quality performance record with zero product returns since commercial production of its PowerBridge Pro began in 2024. Ensuring the highest level of product quality remains a key priority for the company as we work toward widespread adoption of our technology. GAAP operating expenses for the second quarter of 2026 total $3.3 million versus $3.1 million for the same period in 2025.

GAAP net loss and GAAP loss per share were approximately $2.9 million, or $0.53 per basic and diluted share, for the second quarter of 2026, versus the net loss and loss per share of approximately $2.8 million, or $2.35 per basic and diluted share, for the second quarter of 2025. Further to the discussion about our investment in building out capacity and supply chain management, as of June 30, 2026, prepaid expenses to contract manufacturers was approximately $6.3 million.

With that, I will turn the call back to Mallorie for closing remarks.

Thank you, Greg. I want to close with the picture of where we stand as we enter the second half of 2026. When I joined Energous 2.5 years ago, we were pre-revenue, working to prove that this technology could perform in real enterprise environments and attract the caliber of customer that would validate it commercially. Today, 2 of the world's largest enterprises are deploying our technology across thousands of locations in multiple geographies.

A major federal government agency is deploying our technology across 2 initial sites with a planned multiyear expansion roadmap spanning approximately 15 sites over the remainder of this year. A leading national QSR operator has completed its initial proof-of-concept and is planning a rollout across its store network. A national grocery chain with hundreds of stores is in active proof-of-concept evaluation. And our pipeline of new programs is larger and higher quality than at any point in the company's history. The gross margin pressure in Q2 was real, and it was a deliberate operational choice.

We prioritized meeting our customers' installation timelines over protecting our margin in a single quarter. I believe it was the right decision for the long-term health of our customer relationships, and I'm confident the anticipated trajectory from Q3 through Q4 and into 2027 demonstrates that the underlying economics of this business are intact and improving on the trajectory we have described. What I hope investors will take away from today's call is this. The scale of the opportunity in front of Energous has changed materially in the last 12 months. We stabilized the company financially and positioned it for growth.

The programs we are managing, the customers we are serving, and the pipeline we are building are all operating at a magnitude that is fundamentally different from where we were a year ago. We're at the beginning of what we believe will be a significant and sustained commercial ramp, and we look forward to demonstrating that through our results over the balance of the year. The market is beginning to recognize that physical AI isn't defined solely by sensors or AI. It's defined by the ability to continuously generate trusted data from the physical world. The capability begins with persistent energy, it begins with Energous technology. We are grateful for your continued support and we will now open the call for questions.

[Operator Instructions] Our first question will come from the line of Jon Hickman with Ladenburg Thalmann.

First of all, could you tell us if your supply chain issues caused you to push some shipments into Q3 instead of Q4? Or Q2, I mean.

So, the supply -- well, I would say that we managed the supply chain in a way that enabled us to meet the Q2 demand that we had. So, all of the PO backlog that we had from our strategic customers was fully delivered in Q2. So, I don't think that it impacted our ability to deliver. It just created some cost pressure for us in terms of being able to source the components in a timely manner to fulfill the demand.

So, and then could you put some number on the number of POCs in the pipeline and what that looks like versus maybe a year ago or six months ago?

Yes, we haven't been providing the pipeline numbers, but we have committed to, as those turn into meaningful commercial discussions, to disclose those to the investment community just by nature of providing updates.

Could you -- you didn't mention your British Tobacco program this quarter.

So that is what I would call a large-scale proof-of-concept that includes several use cases at one facility and I think we're, kind of, in the final stages of getting that live and fully tested end-to-end.

So you could have talked about more on your call if you, like, didn't care about the timeline or the time factor involved in a call?

Hey, Jon, so this is Giampaolo. What we can say is, also as I mentioned during my portion, this is really a large-scale POC with multiple use cases. And we are finalizing basically the entire POC at a very large facility. And I think we'll be able to provide a lot more information next quarter on how that is progressing and how we're planning to expand now into multiple other facilities across the United States. But things are progressing so far. I mean, things are moving along well, and the POC is progressing well. So that's the only thing we can say right now.

Okay, Mallorie, I just have one last question. Could you -- I know you don't want to give specific guidance, but maybe could you opine a little bit on where the revenue trajectory is going this year next?

Well, yes, so I'm still, kind of, not providing specific guidance, but I think we're still focused on revenue growth and we're still trying to continue to achieve quarterly revenue growth to show that the market adoption is driving commercial demand in a meaningful way. So that's still our focus.

Our next question will come from the line of Scott Buck with Titan Partners.

Mallorie, first one on PowerBridge Pro+. How does commercializing the full end-to-end solution change your average selling price and margin mix versus selling transmitters alone? And then it sounded like you said on the call that this could be a potential contributor in the second half of '26. Is that right?

Yes. So great question. The end-to-end solution contains a bundled solution of the e-Sense Tag, the PowerBridge Pro+, and the e-Compass software platform, which is a recurring revenue stream. And then that's augmented by the PowerBridge Pro that they purchased to, sort of, augment the end-to-end solution to provide power, depending on the company's use case and facility layout. The PowerBridge Pro+ has a higher margin. As does, as everybody, kind of, knows that SaaS software has a high margin as well. And so as we start to deploy that end-to-end solution, it should gradually start to help lift overall revenue.

Okay, that's very helpful. And then you mentioned an expansion of use cases with one of your Fortune 10 customers. Do these use cases require additional engineering or rework of the product on your end? I'm just kind of curious if there's an impact to R&D in the near term to meet your expectations.

Yes, no, that's a great question. I think these are additional use cases that will require additional infrastructure to be installed into our customer facility to basically satisfy those use cases. So no, it will not require additional engineering on our [ hand ]. The customer is very well aware of our technology and our technology is -- it needs to be used. It's just now additional use cases that will require basically additional number of bridges to be installed.

And to your point, Scott, the changes in features to some of the products like PowerBridge Pro that were requested by some of our strategic customers, those were implemented in Q2.

Okay, perfect. That's very helpful. And then last one, I'm curious, beyond Wiliot, can you talk a little bit about your channel partner or reseller strategy and how that could be a potential contributor here over the next 12 months?

Yes, I think that's a great question. I think as far as resell partners, we are continuing to work very closely with system integrators and installers who we need, especially when we deploy with our end-to-end solution or if we deploy within the Wiliot environment. So -- but at the same time, we also are very selective to who we bring on board as a value-added reseller, right? I mean, we have been talking about AWS, for instance, right? which is a great channel partner. And so we want to bring the same partners or [ couple of ] partners of the same caliber as value-added resellers.

So I think we're working with few, which we haven't announced yet, but we're actively cooperating and working. And so you'll probably see some announcement in Q3, Q4 of this year. But at the same time, yes, they are critical for us in terms of how we deploy -- how quickly we deploy. And also, they're critical because sometimes they represent an extended part of our sales force into our end customers.

Thank you. [Operator Instructions] I'm showing no further questions. This will conclude today's question and answer session. This will also conclude today's conference call. Thank you for participating and you may now disconnect. Everyone, have a great day.

Good day, and welcome to the Energous Wireless Power Solutions First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

Before the call begins, Energous would like to remind participants that during today's call, the company will make forward-looking statements. These statements are subject to inherent risks and uncertainties detailed in the company's filings with the Securities and Exchange Commission. Actual results may differ materially from those anticipated. Except as otherwise required by federal law, Energous disclaims any obligation to publicly release updates or revisions to any forward-looking statements to reflect changes in expectations.

I would now like to turn the conference over to Mallorie Burak, Chief Executive Officer and Chief Financial Officer. Mallorie, please go ahead.

Thank you, and welcome, everyone. I appreciate you all joining us on this conference call today, our first since 2024. On this call, we will discuss a series of firsts, in other words, new milestones we have achieved on our path to profitability and cash flow breakeven and why we believe we are positioned to continue our growth. We thank our stockholders and investors for your patience and continued belief in what we are building.

I want to take the time today to properly reintroduce our company, where we came from, what we have built, why the momentum we established in 2025 is real and accelerating and what the first quarter of 2026 is telling us about the trajectory ahead. I will then turn it over to Giampaolo Marino, our Chief Strategy and Growth Officer, to provide context on our technology platform and the industry environment driving enterprise adoption. Greg Sadikoff, our Chief Accounting Officer, will then walk through the Q1 financials in detail.

Energous was founded in 2012 with a vision to eliminate the wires and charging constraints that define consumer electronics at the time. Our research and development produced the world's first FCC Part 18 certification for at-a-distance wireless charging and a patent portfolio that today exceeds 300 patents. In 2022, we made the strategic decision to reposition Energous entirely around enterprise IoT, specifically, the opportunity to power a new generation of battery-free sensors, tags and monitoring devices in commercial environments where always-on maintenance-free sensing is increasingly becoming an operational requirement. The verticals we identified, including supply chain, cold chain compliance, logistics, retail inventory management and asset tracking, share a common characteristic. The scale of deployment makes battery dependency economically and operationally prohibitive. That is the problem we now solve.

We spent 2022 and 2023 building the technology, earning regulatory certifications, establishing commercial partnerships and conducting the proof-of-concept trials that would allow enterprises to validate our technology. Our operations and results today reflect a company that has crossed from technology validation into volume production.

Our commercial platform is built around the PowerBridge family of wireless power transmitters, purpose-built for enterprise environments requiring reliable, scalable, always-on wireless power delivery. Our flagship product, the PowerBridge PRO is designed for deployment in retail, logistics, distribution, cold storage and production facility environment. The PowerBridge PRO has shipped in meaningful volume, has yielded 0 returns since commercial production began in 2024 and has received regulatory approval, including FCC, U.K. and EU market approval, enabling immediate commercialization across U.S., U.K. and European markets.

In 2025, the PowerBridge portfolio grew with the launch of the PowerBridge PRO+, featuring an integrated gateway and specifically designed to be an innovative addition to the company's wireless power network solutions. Alongside our transmitter hardware, we offer a complete end-to-end ambient IoT solution, integrating our wireless power transmitters with battery-free sensors, gateways and our cloud-based software platform, e-Compass, providing customers with real-time asset and inventory visibility, environmental monitoring and operational analytics. This end-to-end capability matters. Our customers are not just purchasing a point-in-time hardware product. They are deploying a wireless power network infrastructure that provides real-time visibility into operations and eliminates the ongoing cost and reliability risk of battery-dependent IoT systems.

Our product family also includes the e-Sense tag, which we also introduced in 2025, broadening the range of use cases our platform addresses and increasing the value we deliver for deployment. The e-Sense tag provides dependability in low temperatures, is waterproof and reusable. When paired with the PowerBridge transmitters, Energous can offer customers an efficient and effective solution that is ideal for complex use cases such as cold chain monitoring, where other applications' performance often degrades when exposed to extreme temperatures.

Our production infrastructure includes 2 contract manufacturers. Our established international manufacturing partner provides cost-effective, high-volume production capacity that underpins our existing customer shipments. Earlier this year, we added a second contract manufacturer based entirely in the United States. The U.S. manufacturing capabilities we have now established has enabled us to engage the customer opportunities that would previously have been inaccessible, and it positions us well, given the broader domestic supply chain priorities we are seeing across enterprise procurement.

I want to be direct about why we believe Energous has durable competitive advantages. First, regulatory. Our regulatory credentials in wireless power are not easily replicable. They require years of iterative development, testing and deep regulatory expertise across multiple jurisdictions, a foundation that we have built over time and continue to apply as we expand into new markets. Second, intellectual property. Our 300-plus patent portfolio creates a commercial barrier to market entry. Any competitor seeking to operate in RF-based wireless power for IoT applications must navigate this IP position.

Third, market experience. We have now conducted proof-of-concept deployments and commercial installations across dozens of enterprise environments. The operational knowledge embedded in those deployments, including how our networks perform in real environments with real installation requirements, is not something a new entrant can acquire quickly. Fourth and most importantly, the ability to meet commercial needs. Enterprises are choosing wireless power networks over just ambient harvesting alternatives because they need guaranteed reliable power delivery. Our PowerBridge infrastructure delivers consistent, defined power within a coverage area. The dedicated power required to consistently and frequently transmit data to the cloud is what mission-critical applications require and which ambient harvesting cannot independently provide sufficiently.

With respect to the current momentum, in 2025, Energous moved from validation to production. We reported revenue of approximately $5.6 million for the full year, a 633% increase over 2024 and the highest annual revenue in the company's history. We shipped more than 25,000 PowerBridge transmitters. We reported 4 consecutive quarters of revenue growth with Q4 revenue of approximately $3 million, representing a 139% sequential increase from Q3.

Behind those financial metrics were 2 pivotal commercial deployments. During 2025, we began large-scale commercial deployments with 2 of the largest enterprises in the world. Both of these programs represent exactly what we designed our platform to do, solve a real costly operational problem at enterprise scale with infrastructure that performs reliably without battery dependency.

The commercial infrastructure we built last year, including recently expanded manufacturing capacity, a strengthened balance sheet and a growing portfolio of active deployments is enabling us to pursue opportunities at a pace and scale that was not possible 12 months ago.

Giampaolo, our Chief Strategy and Growth Officer, will now discuss the technology landscape and industry tailwinds in more depth, and he will also cover our proof-of-concept pipeline and technology differentiation. Giampaolo?

Thank you, Mallorie. The demand environment for wireless power networks in enterprise setting is structural and strengthening. Let me identify the specific drivers we are seeing in our customer interactions.

Supply chain visibility has moved from a competitive advantage to an operational and regulatory requirement. The disruption of recent years and the increasing liability exposure around cold chain compliance, food safety and pharmaceutical logistics have made real-time always-on sensing a baseline expectation at large enterprises. The question is no longer whether to instrument a supply chain with sensing technology, but rather how to do at scale without the ongoing cost and the failure risk of battery-dependent systems.

Our RF-based wireless power network technology is an end-to-end platform, combining transmitter systems, receiver integrated circuits, antenna systems and supporting software to enable at-a-distance wireless power delivery for low-power IoT devices. A key architectural advantage of our platform is one-to-many power delivery. A single PowerBridge transmitter can deliver power to multiple receiver-enabled devices with range simultaneously. This is what makes our technology economically scalable at enterprise level. The infrastructure cost per sensing point decrease as the deployment density increases.

Our platform supports interoperability between transmitters and battery-free receivers regardless of the device manufacturer or the system integrator, an open ecosystem approach consistent with how widely adopted wireless technology like Wi-Fi and Bluetooth operate. Our semiconductor devices provide the underlying IP building blocks for our transmitters and receivers technologies. These chipsets allow us to continue evolving our product family efficiently as we address new applications and market requirements.

e-Compass, our cloud-based analytics platform, transforms the data generated by the battery-free sensor networks into a real-time operational intelligence, including asset location, environmental condition and compliance status, delivered through a software interface that integrates into a customer's existing enterprise system. We believe this data is invaluable for feeding AI models, compiling compliance data and generating real-time and predictive analytics to improve operational management.

I'd like to take a few minutes to walk through our commercial agreements portfolio. We think about our pipeline in 3 distinct stages: active commercial deployment, active proof-of-concept programs and our broader pipeline outlook. Our current production infrastructure deployments with Fortune 10 enterprises are generating revenue today and continuing to scale. Our first Fortune 10 commercial deployment is with a leading national retailer, focused on inventory management and cold chain compliance monitoring across its retail store locations. The first phase deployment program started at approximately 4,700 U.S. locations. And as one of our most recent updates, the customer has completed installation at over 1,500 of those locations.

The primary application is pallet-level asset tracking across operational facilities, collecting real-time data as assets travel through dock doors and freezer and cooler storage areas, preventing spoilage, product diversion and inventory loss, while addressing regulatory compliance requirements and operational cost reduction at scale. To our knowledge, Energous is the only provider capable of delivering up to 99% asset visibility in fixed enterprise environments, which is made possible by our PowerBridge PRO transmitters, which deliver 2 watts of conducted power or 8 watts EIRP, up to 8x the power output of our nearest competition. In cold chain environment, where a single blind spot can mean spoilage, loss or compliance failure, the power advantage is not a feature. It is the reason why we are in this program.

Our second Fortune 10 commercial deployment is with a major enterprise in the e-commerce fulfillment, reverse logistics and grocery sector. This customer has increased the cadence of its engagement with us and has expanded its program across multiple use cases and geographies. Importantly, this program has now expanded internationally with over 14 completed installations outside of the United States to date. And we are planning to continue supporting this customer's international expansion of its infrastructure modernization project to complete installation at approximately 35 facilities in 2026. This deployment validates that our platform performs at scale beyond the U.S. market and reflects the growing global demand for wireless power network infrastructure.

The active proof-of-concept programs we are advancing today are designed to provide reference deployment for production-scale performance, often across multiple facilities. Several of our current programs are specifically structured to scale from initial site deployments to broader multi-location rollouts in the near term. A few sample use cases and opportunities we are addressing today include a large-scale proof-of-concept with a U.S.-based subsidiary of a multibillion-dollar international parent company, focused on modernizing semi-perishable inventory tracking across its production and distribution operation. This program is notable because it deploys our full end-to-end ambient IoT solution, wireless power networks comprised of battery-free sensors, RF transmitters, gateways and e-Compass cloud analytics working together to deliver real-time inventory visibility at key production facility.

We have also initiated a structural proof-of-concept evaluation with a national quick service restaurant operator. The QSR vertical, in addition to grocery, is a significant market expansion for Energous across several dimensions. Food safety, compliance, inventory visibility and environmental monitoring in food preparation and storage environment are all applications where battery-free wireless sensing has a clear operational advantage. To our knowledge, we are the only provider today with a solution proven to operate efficiently in low range temperature. Battery performance degrades in cold storage. Our wireless power infrastructure does not have the constraint in lower temperature ranges, and that is what makes this application category unique, addressable by Energous. The potential deployment scale in a national QSR program, measured in thousands of locations per customer relationship, represents a meaningful revenue opportunity.

Finally, we are progressing with government and regulated sector organizations, where the most important requirements are domestic manufacturing, infrastructure security and system reliability. Our new U.S. manufacturing capability positions us to directly meet those requirements.

I should also note that through Amazon Web Services, our cloud infrastructure partner, ISV Accelerate Program, we are supporting proof-of-concept evaluation with enterprise customers, engaged through the co-selling relationship. It gives us access to enterprise customer conversation at a scale we could not reach independently. This channel has become a genuine commercial pipeline source, and we are advancing active evaluation through it, evidenced by the 50-plus customer launches reported on the AWS partner page.

We expect several of our active programs to reach commercial decision during 2026. As our customers advance their timelines, we are committed to providing increasing specificity on the composition and scale of our pipeline.

I will turn it back to Mallorie now.

Thank you, Giampaolo. Before Greg walks through the financials, I want to address our balance sheet and capital position directly. Following fiscal year 2025 through March 23, 2026, we raised net proceeds of approximately $31.9 million through our ATM equity program, resulting in a cash position of approximately $37 million at the end of the first quarter.

As Giampaolo just described, as we move from development stage engagements to active commercial deployment, supporting multiple simultaneous customer programs, each involving engineering support, customer integration, inventory positioning and certification of our work, our working capital requirements grow in proportion to that activity. With approximately $37 million in cash as of the end of the first quarter and 2 contract manufacturing relationships in place, we believe we are well positioned to support our pipeline through commercialization.

We have no plans for additional ATM usage this year. Our priority is executing on our commercial programs and translating that activity into revenue growth that makes our path to profitability and cash flow breakeven increasingly visible.

I will now turn it over to Greg Sadikoff, our Chief Accounting Officer, to review the first quarter 2026 financial results. Greg?

Thank you, Mallorie. Good afternoon. I will now review our financial results for the first quarter ended March 31, 2026. Earlier today, we issued our earnings release announcing the operating and financial results for the 3 months ended March 31, 2026.

Focusing on the GAAP financial statements, during the 3 months ended March 31, 2026 and 2025, we recorded revenue of $3.1 million and $0.3 million, respectively. Revenue recorded in the first quarter of 2026 represents our fifth consecutive quarter of revenue growth.

Commensurate with the increase in revenue, our cost of revenue in the first quarter of 2026 was approximately $2 million, yielding a 36% gross margin versus a 27% gross margin reported in the first quarter of 2025. The increase was primarily due to higher volume of our PowerBridge PRO transmitter shipped during the first quarter of 2026.

Total operating expense for the 3 months ended March 31, 2026 decreased by approximately $0.8 million to $2.9 million from $3.7 million in the first quarter of 2025, representing a 21% year-over-year improvement.

The GAAP net loss reported for the 3 months ended March 31, 2026 was $1.7 million versus a net loss of $3.4 million in the prior-year period, representing a 51% improvement year-over-year.

With that, I will turn the call back to Mallorie for closing remarks.

Thank you, Greg. I would like to close with some perspective on where we stand. Two years ago, when I joined Energous, we were continuing to develop our technology and operating with a challenged balance sheet. In addition to strategic execution, it has been equally as important to me to rebuild credibility with investors. I have personally spoken to a broad population of investors, and it is my sincere hope that our performance over the last 2 years has demonstrated that commitment. And the Energous team is excited about the prospects ahead.

Today, we have demonstrated 5 consecutive quarters of revenue growth. We launched 3 new products, creating a compelling end-to-end wireless power network solution and have more than 39,000 PowerBridge transmitters deployed. We have 2 active large-scale commercial deployments with Fortune 10 enterprises, 1 with over 1,500 U.S. locations completed and expanding, and 1 now operating internationally across multiple geographies and use cases.

We have a structured proof-of-concept pipeline spanning retail, manufacturing, food service and government sectors. We have an active co-selling partnership with a major cloud infrastructure provider. Our flagship products have achieved regulatory approvals in key jurisdictions. I believe that we have crossed the turnaround chasm. The transformation is real and it is documented. Our job now is execution, converting pipeline into deployments, expanding within existing customers and scaling our platform across new industries and geographies, and continuing to innovate. We believe the platform, the infrastructure, the partnerships and the capital are in place to do exactly that.

We are grateful for your attention today, and we look forward to continuing this dialogue, and we'll now open the call for questions.

[Operator Instructions] Our first question comes from Jon Hickman with Ladenburg Thalmann.

Mallorie, can you hear me okay?

Yes.

So can you -- I know you have a goal of trying to grow each quarter. You've done it for 5 quarters. Can you -- or maybe give us a little insight into the ability to keep that trend going for the rest of the year?

Yes. So maybe I'll start, and then Giampaolo can chime in as well. So we're working really hard to not just try to produce sequential growth on the top line, but also working toward a path to profitability and cash flow breakeven. So we're doing those in parallel. A lot of the top line growth is based on our ability to convert proof-of-concept deployments that we have going on. Many of those are co-selling efforts with AWS and converting those into commercial deployment. And so...

The question was just answered, about the gross margins.

Our next question comes from Mark Gomes with Pipeline Data.

Yes. I don't know what happened on the call there. It sounds like you're in the middle of giving an answer, and then something happened there. So maybe you want to finish that response, and then I can answer -- ask my questions.

Sure. Thanks, Mark. Yes. No, I was just saying that we're highly focused on working with the pipeline that we have to convert it into revenue. And we're bringing up the U.S. contract manufacturer into higher volumes and just being prepared to fulfill demand as we can convert it.

Great. Can you talk about the AWS relationship in more detail and how important the ISV Accelerate Program is and kind of the pace and magnitude of the launches that we've seen on the partner side moving from 5-plus to 50-plus? And I know you clarified in the press release, but like what does that say for the relationship you have with them? And maybe you can give us some color in terms of kind of what the response seems to be in those POCs so far, kind of give us an indication of your ability to continue to grow and accelerate over the next couple of years.

Yes. Mark, this is Giampaolo. I'm going to address this. And obviously, Mallorie, she can chime in as far as AWS. I think the relationship is -- it's a very strong relationship that we have built with AWS over probably the last 2 years, 2.5 years. I think we've had a lot of discussion. We've had lots of training between Energous and the AWS RSMs, which is obviously the sales managers, sort of to demonstrate how our solution works and why our solution is actually something that AWS needs and wants and wants to push, right?

I always say that the relationship is mutually beneficial. It's a [ quid quo pro ] meaning we push data into the AWS cloud. AWS basically makes money off of data, right? But most importantly, when we talk about real-time asset tracking visibility across retail supply chain, manufacturing, this is the missing link that AWS has not had in the past, right? When they come across, obviously, application that has got to do with real-time asset tracking, cold chain monitoring, they don't have -- or they did not have in the past a robust and compelling solution that really brings lots of value and ROI within a year. And so, they have recognized that with Energous, and this is the reason why we are in a lot of discussions with some of their end customers, where we get introduced by AWS. And sort of like those discussions turn sometimes quickly into POCs because we come across pretty much the same pain point that we have seen at these Fortune 10 customers, right, lack of visibility, lack of real-time data, inability to really monitor assets as they move through complex supply chain. And we solve that pain point very nicely, and this is the reason why we are in those conversations with them.

In terms of momentum -- yes, sir?

Yes. Is that why they're subsidizing the POCs? From what I understand, ISV Accelerate means that they put money towards those POCs and that they compensate their own salespeople for selling the solution.

Yes, certainly. Yes, oftentimes, we see AWS stepping in, sort of like sponsoring the POCs to enable customers to really test the technology, quickly assess the value and obviously move them quickly from a POC phase into what we want, the deployment phase. So sometimes, that sponsorship help accelerate the momentum in terms of like, okay, let's get the POC going. Let's validate the data. Let's validate the technology. And then, let's move quickly once we do that into more of a deployment discussion with the end customer.

Okay. And then, you were going to comment on the momentum there?

Yes, absolutely. I think you mentioned, right, we went from like 5 to 50-plus. So there's definitely a lot of momentum. Mallorie said that before during the call, we have definitely crossed that inflection point. And so, now, we are at a point where a lot of other customers within retail, within manufacturing, within logistics are not anymore on the fence about this technology, are not anymore on the fence about ambient IoT, and they want to get a piece of it. And so, this is really -- and this reflects the acceleration momentum that we see through POCs because the world is out there, what we are doing with the 2 Fortune 10 customers. So anybody else within the same space or market wants to get a piece of the technology because the benefits are very tangible.

Yes. And just to add to what Giampaolo said, I think it's -- I think we pointed this out in the earnings release, but I think it's just important to also say it again here. The 50-plus launches on the AWS partner page, that doesn't necessarily reflect that as 50-plus customers. So, the way...

Right. No, that's clear.

The way they recognize a launch is that it's more like an order. So, a single customer might have multiple orders because maybe they're testing different use cases or deploying to different facilities and stages. So I just want to make sure that's clear.

Yes. No, that's been clear. But what we -- what I've been focused on being aware of that is that it's still -- it's gone from 5 to 50-plus. So, that was kind of notable. So I wanted to hear about that.

One other news in supply chain -- I know you don't talk about who your customers are. So I'm not implying that this is one of your customers. But Amazon announced the supply chain services kind of going head-to-head against UPS. Are the services that they're looking to provide something where you guys might be a fit? I'm not saying are a fit. I'm saying, is there a play there for you guys?

So let me -- Mark, let me actually answer the question by looking at UPS, right? So we know that UPS basically uses a company that is called Trackonomy. And they sort of like have pretty much -- when you look at it from a technology standpoint, they sort of like have the same pretty much base layer technology, but it's battery based, right? And they use basically battery-based BLE that basically helps UPS assets get a lot more visibility as they travel, right?

So yes, I mean, I think we have a superior technology because not only we eliminate the batteries, but -- and so, we reduce cost of ownership. But I think we have a much more accurate technology that can really pinpoint where things are, even within very complex operational facilities. So I think it's -- yes, I think it's converging to a direction where -- why not, right? Why Amazon could not be -- make use of what we are building today?

Great. I've got more questions, but I'll come back in the queue. Also sounds like UPS maybe -- the opportunity to switch over to you guys if you have superior technology, but I'll cede the floor for a minute.

Our next question comes from Jon Hickman with Ladenburg Thalmann.

I just wanted a follow-up question on -- the customers that you talk about, Fortune 10, a big customer in overseas in the tobacco world, would -- do you have the time or bandwidth to handle maybe a more mundane company in the bottom of like S&P 500? Are you even looking at that kind of business? Or...

Yes. Mallorie, I'll take this, and please chime in. I think, Jon, we're looking at every opportunity that comes our way, right, because once you have deployed with the technology, then you're starting to learn that the use cases are very similar from opportunity to opportunity. So, for us, it becomes more of a land and expand sort of like exercise. But nevertheless, I think it's also very important to highlight the fact that we have very strong partners that we work with throughout basically the POC and deployment phase, and those partners are also critical to enable us to basically capitalize on multiple opportunity, right? It's not that we do everything on our own. We work with system integrators, with installers who are coming in and are helping really us scale the solution and sort of like move to the next use case within the same customer or move to the next customer.

So, Mallorie, do you think there will come a time this year when you might be able to name a name?

Oh my gosh, we would love to name a name. Unfortunately, right now, the customers we have won't grant us permission to do it. But yes, we're definitely trying to work with customers that will let us use their name.

And Giampaolo, can you maybe qualify how large that quick service restaurant proof-of-concept is [indiscernible]?

Yes. I mean, I can say that it's a major QSR here in the United States with thousands of retail stores across nationwide. So it's pretty sizable.

Our next question comes from John Henderson with Inflections Consulting.

Congratulations on the seminal inflection point. Just had a quick follow-up question on the AWS opportunity. Can you quantify for investors, to help educate us, within their reverse logistics partnership that you guys have with them, like how many potential customers would benefit from your solution, both end-to-end and the hardware stack? Just trying to understand what the long-term opportunity is. We see the 50 launches. It's phenomenal. But I think if you can kind of help educate investors, that would be great.

Yes, I'm going to start. I would say, when we talk about AWS, right, and you look at the scale of customers AWS has within retail IoT, manufacturing and logistics, we're talking about thousands of customers there, right? So the scale is huge. I think we are trying to obviously work very closely with them so that we can potentially reach as much -- as many customers as we can. And as I mentioned before, what we see is that the use cases, the pain points that our -- these customers have are pretty similar from customer to customer. And -- but yes, given the scale of AWS and given the relationship of the number of customers they have, it's pretty big. I mean, really thousands of retail IoT, manufacturing and logistics customers with very similar use case with very similar pain point.

Our next question comes from Michael Molnar with MYDA Advisors.

I appreciate the clarity on the ATM and all the progress you've made over the last year. So well done. Giampaolo, a question for you on the international opportunity. Is it -- is the go-to-market process there similar to what you experienced here in the U.S.? Or is there a sort of degree of difficulty or customization that an international -- a non-U.S. client requires? And would that ultimately imply less opportunity there or lower margins for that business? Or do you see it as just as robust as what you could do here in the U.S.?

Yes. It's a great question. I think in terms of use cases, very similar use cases we are driving in Europe or internationally, based on what we see here in the U.S. So I would say that from a margin standpoint, it's pretty much flat. It's pretty much the same. There is -- there are no differences from one region to the other.

Technically, though, there are some differences, which are making our deployment a little bit different from what we see here in the U.S. And the technical aspect is, in Europe, in country -- in Europe, basically, you see 2 different types of frequency of operation when it comes down to like RF energy, right? So you see 917 megahertz and also 865 megahertz, okay? So there are countries that want to operate strictly at 865 megahertz versus other countries that they want to operate at 917 megahertz. And that, I think, is the biggest difference that we see between obviously, Europe and U.S. But we are -- we have products that are capable of meeting both requirements. We have PowerBridge PRO transmitters that can operate at 917 megahertz, and we also have PowerBridge PRO transmitters that can operate at a lower frequency. So it's not a challenge, but I think it's a technical difference that I think needs to be highlighted.

Okay. I got it. And Mallorie, you added a contract manufacturer. And I think when we spoke a couple of months back, you had mentioned there was some spend associated with spooling up these relationships. Is that pretty much behind you now? And what sort of capacity do you have in place from a revenue perspective with 2 contract manufacturers here in the U.S.?

So we're still in the process of ramping the U.S. contract manufacturer to accommodate, what I would call, significant volume. So there is some tooling and test fixtures and things like that, that we need to invest in. I think that will be settled within Q2. In terms of capacity, what I'll say is, between the 2 contract manufacturers, I believe we're in very good shape to be able to accommodate any kind of accelerated growth that we may see as these POCs and enterprise expansions ramp up.

Okay. Great. Well, thank you both for your time. Well done, and happy to see you doing a call again and providing so much information and clarity as you progress. So well done. Thanks for your time.

[Operator Instructions] Our next question comes from Mark Gomes with Pipeline Data.

Yes. So, obviously, food and drugs are getting a lot of attention. You've got the government mandates as kind of the driver kind of there. What other areas or use cases are you seeing popping up? And are there prospective customers approaching you and saying, hey, can we use your technology this way?

Yes, Mark, it's a great question. It's Giampaolo. I'm going to try to answer, and obviously, Mallorie, she can chime in any time. I would say that manufacturing, it's also a market segment where we do see our solution being a great fit. As I mentioned during the call, we are working with a manufacturing facility here in the U.S. So, manufacturing -- I think, pharmaceutical, obviously -- we've been talking about logistics, retail, you just name it. And when I say manufacturing, right, Mark, I know I don't give you a strict answer, but manufacturing is a very broad term. So within the manufacturing space, there's definitely multiple interesting segments that are looking at our solution as a potential solution to be adopted across their operations.

Great. And then, one last one for me is, with all the attention with regard to these government mandates, we also know that AI has been kind of a good enabler here. What would you say -- like everybody got excited around this space with the government mandates, but how would you characterize AI? Is it much smaller driver, equal driver, a bigger driver? How should we look at that?

Yes. I think AI is an important driver. But again, we always like to say that if you don't feed the AI with a meaningful data, then there is no AI, then AI doesn't really scale. And this is what we are doing here, right? We are creating a physical AI layer at the center level where now data gets generated seamlessly, and that data gets fed into AI models that are used to make better and much more efficient decision. And so, I think the 2, they really go hand-to-hand, right? You need the data to have a much more efficient AI. And so, this is basically what we are doing, right? We are right at that intersection point where we're generating the data, and then we're pushing the data into AI models, and we're enabling AI to really thrive and make better decisions that will basically improve customer operation and efficiencies.

Great. Well, keep it going, guys. Congrats on the progress, and looking forward to hearing about more.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.