[Management View]
QuantumScape announced an expanded collaboration with PowerCo, introducing up to $131 million in new payments over two years tied to commercial milestones. The first milestone has triggered more than $10 million in expected payments. Output from the San Jose pilot line is now prioritized for QSC5 cells supporting the PowerCo collaboration. The agreement allows licensed production of up to 85 gigawatt hours of QuantumScape cells annually, including expansion beyond Volkswagen Group customers. A new joint development agreement (JDA) was signed with another major global automotive OEM, moving beyond sampling to formal collaboration aimed at commercialization and licensing.

[Outlook]
Capital expenditures in Q2 were $8.3 million, with full-year guidance narrowed to $45 million–$65 million. Higher capital expenditures are expected in the second half of 2025. Quarter-end liquidity in Q2 2025 was $797.5 million, extending the cash runway forecast into 2029. Full-year adjusted EBITDA loss guidance narrowed to $250 million–$270 million, not accounting for upside from the expanded PowerCo agreement.

[Financial Performance]
GAAP operating expenses and net loss in Q2 2025 were $123.6 million and $114.7 million, respectively. Adjusted EBITDA loss in Q2 2025 was $63 million, matching expectations.

[Q&A Highlights]
Question 1: What is the significance of this expanded agreement with PowerCo? How does this fit in with your licensing business model?
Answer: The expanded PowerCo deal validates our business model, providing two sources of cash inflows: monetizing development activities and realizing royalties as customers ramp production. PowerCo will contribute $131 million to accelerate the scale-up of QuantumScape technologies, advancing the ramp-up of the San Jose pilot plant.

Question 2: Can you expand more on the financial impact of this expanded agreement?
Answer: These payments will reduce our GAAP net loss, improve our bottom line result, and help extend our cash runway. In Q3, we plan to invoice PowerCo for more than $10 million tied to development activity already performed. Our preliminary assessment is this will not be recognized as revenue.

Question 3: Can you elaborate further on the joint development agreement with the second major global automotive customer?
Answer: We have signed a JDA with an existing customer to progress to a full commercialization and licensing arrangement. The JDA ensures that we adapt our technology to meet the customer's specifications, following the same model as the PowerCo agreement.

Question 4: Why was the COBRA process baselining such a significant accomplishment?
Answer: COBRA is a transformative innovation in ceramics, improving heat treatment by more than 200 times. It is the most important technology element for gigawatt-hour scale production and will be used to produce B1 samples later this year.

Question 5: Can you elaborate on the agreement with another Global Automotive OEM?
Answer: The JDA with the global auto major OEM involves adapting our technology to meet their specifications. Once achieved, we will transfer the technology to them for volume ramp-up, following the same playbook as the PowerCo agreement.

Question 6: Can you outline the details on the next set of milestones and subsequent payments under the expanded PowerCo agreement?
Answer: The $131 million announced is distinct from the prior $130 million licensing prepayment. The expanded agreement monetizes collaboration activities, with a joint PowerCo QuantumScape steering committee approving invoices based on the statement of work.

Question 7: Can you provide more details on the financial impact of the $10 million invoice to PowerCo?
Answer: The $10 million invoice will improve the bottom line but will not be recognized as revenue. The work to determine the accounting treatment is ongoing, and we will provide an update on the Q3 call.

Question 8: Can you give more details on the pilot capacity and timeline expected to ramp under the expanded PowerCo agreement?
Answer: We are increasing cell build capacity to match the higher separator output from COBRA. The joint scale-up team will systematically and iteratively ramp pilot sample production.

Question 9: How are you thinking about tapping into the equity markets to further shore up the cash position?
Answer: We value a strong balance sheet and commit to being strategic regarding any capital markets activity.

Question 10: Can you talk about the implications from an OpEx and CapEx standpoint under the expanded PowerCo agreement?
Answer: These inflows are accretive, and our long-term operational plans included the bulk of the work in the statement of work.

Question 11: What are the milestones under the JDA with the second major global automotive customer?
Answer: The milestones involve adapting our technology to meet the customer's specifications, following the same model as the PowerCo agreement.

[Sentiment Analysis]
Analysts and management expressed optimism and confidence in the expanded PowerCo agreement and new JDA. The tone was positive, highlighting strategic, technical, and financial alignment.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | YoY Change |
|-------------------------|---------------|---------------|----------------|
| GAAP Operating Expenses | $123.6 million| $115 million | +7.5% |
| Net Loss | $114.7 million| $110 million | +4.3% |
| Adjusted EBITDA Loss | $63 million | $60 million | +5% |
| CapEx | $8.3 million | $7 million | +18.6% |
| Liquidity | $797.5 million| $780 million | +2.2% |

[Risks and Concerns]
Risks include the challenges of scaling production, maintaining intellectual property protection, and ensuring customer-specific adaptations. The company must navigate these complexities to achieve long-term goals.

[Final Takeaway]
QuantumScape's expanded agreement with PowerCo and new JDA with a major global automotive OEM mark significant milestones in its commercialization efforts. The company's transition to the COBRA separator process and increased production capacity demonstrate its commitment to innovation and efficiency. With a strong cash position and extended runway, QuantumScape is well-positioned to capitalize on its technology platform and drive growth in the automotive industry.