Enovix Q2 2026: revenue grew 21%, and gross profit fell 33%

Enovix makes silicon-anode lithium-ion batteries — a genuinely different cell architecture that promises more energy in the same volume. The commercial question has always been the same one: can it be manufactured at scale, at yield, at a price that works.

This quarter answers part of that, and the answer is not yet.

Revenue up, gross profit down

	Q2 2026	Q2 2025	Change
Revenue	$9.02M	$7.47M	+20.8%
Cost of revenue	$7.72M	$5.53M	+39.7%
Gross profit	$1.30M	$1.94M	−33.0%
Gross margin	14.4%	26.0%	−11.6 pts

Cost of revenue grew at nearly twice the rate of revenue. Working the increments: revenue rose $1.56 million and gross profit fell $0.64 million, which means the incremental gross margin on this quarter’s growth was negative 41%. Every additional dollar of revenue arrived with roughly $1.41 of additional cost.

That is what an early manufacturing ramp looks like — new product lines running below scale, fixed costs spread over small volumes, and a mix shifting toward newly launched cells. It is not evidence that the technology fails. It is evidence that the revenue being added is not yet the profitable kind, and it is the number that decides whether the next order is worth having.

The half-year figures show the same shape: revenue up 32.3% to $16.62 million, gross profit up only 29.5% to $2.85 million from $2.20 million.

Did Enovix beat its own guidance in Q2 2026?

Yes, narrowly. Revenue of $9.02 million ($9,024 thousand) came in just above the top of the $8.0–9.0 million range Enovix guided to in its May 13, 2026 8-K; the company itself describes it as “at the high end of guidance.” The non-GAAP loss from operations of $28.8 million was narrower than the guided $29.0–32.0 million loss, non-GAAP net loss per share of $(0.13) sat at the better end of the $(0.13)–$(0.17) range, and capital expenditures of $9.6 million were within the $9.0–13.0 million guide. Year over year, revenue rose 21% and the GAAP loss per share improved to $(0.20) from $(0.22).

The operating loss has not moved

	Q2 2026	Q2 2025
Research and development	$24.44M	$28.15M
Selling, general and administrative	$20.15M	$17.53M
Total operating expenses	$44.60M	$45.68M
Loss from operations	$(43.30)M	$(43.73)M

An operating loss of $43.3 million against $43.7 million a year earlier — an improvement of 1.0%, on 21% more revenue. Opex is flat because R&D came down $3.7 million and SG&A went up $2.6 million, which is roughly what you would expect from a company shifting effort from developing the cell to selling and supporting it.

Below the operating line, one thing has changed: interest expense now exceeds interest income, $6.52 million against $5.13 million. A year ago it was $1.71 million against $2.43 million. The company is carrying more debt and its cash is earning less than that debt costs.

Net loss was $43.08 million against $44.27 million; loss per share improved two cents to $(0.20), helped by a share count 6.7% larger at 218.5 million.

Cash, and how long it lasts

	Q2 2026	Q2 2025
Net cash used in operating activities	$(21.8)M	$(25.9)M
Capital expenditures	$(9.6)M	$(8.0)M
Free cash flow	$(31.4)M	$(33.8)M
Adjusted EBITDA	$(18.9)M	$(20.1)M

Enovix ended the quarter with approximately $552.1 million of cash, cash equivalents and investments. Against $31.4 million of quarterly free-cash burn that is roughly 17 quarters — about four years — before anything else changes.

That is a comfortable runway by the standards of a pre-scale manufacturer, and it is the single strongest fact in the release. It buys time for the two things below to resolve. It is also worth noting where the cash sits: $33.7 million in cash and equivalents, with $442.0 million in short-term and $74.4 million in long-term investments.

The two events that actually matter

Everything above is the cost of waiting for two binary outcomes.

The smartphone qualification. The lead smartphone customer has confirmed the cells passed more than 1,000 cycles under the 0.2C discharge cycle test, and the final accelerated cycle-life test is underway, with completion expected in 2026. Cycle life has been the gating specification for silicon-anode cells in phones for years — silicon expands as it charges, and containing that without the cell degrading is the whole engineering problem. Passing 1,000 cycles is a real milestone. “Final test underway, completion expected in 2026” is not the same as qualified, and the distinction is the entire investment case.

The smart-eyewear ramp. Enovix shipped approximately 2,100 AI-1 battery packs in the quarter, completed international safety certifications, and recognised its first smart-eyewear revenue. Third-quarter shipments are guided to rise roughly 9x to about 19,000 packs, against a 50,000-pack order.

That arithmetic is worth stating plainly: 2,100 packs is 4.2% of the order. Delivering 19,000 in Q3 would take the cumulative total to about 21,100, or 42%. This is the first quarter in which the company has had to convert an order into shipped units at volume, and Q3 is where it either happens or slips.

Behind both, the manufacturing data is moving the right way. In smart-eyewear production every process step outside Zone 1 delivered yields of 95% or better, with individual steps as high as 99.6%. The exception is Zone 1 dicing at about 84%, up from roughly 80% last quarter — a key throughput driver for both the eyewear and smartphone lines, and still the bottleneck.

What management put on the record

Item	Company figure
Q2 revenue	$9.0 million, at the high end of guidance, +21%
H1 revenue	$16.6 million, +32%
Smartphone	>1,000 cycles passed at 0.2C; final accelerated cycle-life test underway, completion expected in 2026
Smart eyewear	~2,100 AI-1 packs shipped; Q3 guided ~19,000 against a 50,000-pack order
Pipeline	Drone, defence and industrial pipeline $183 million, up ~41% from $130 million; drone alone exceeded $100 million
Fab2 yields	≥95% on all but one step outside Zone 1, up to 99.6%; Zone 1 dicing ~84%, up from ~80%
Liquidity	~$552.1 million
Q3 2026 outlook	Revenue $9.0–10.0 million, up ~13% to 25% year over year

The bear case, stated fairly

1. Gross profit fell 33% while revenue grew 21%. Incremental gross margin on the quarter’s growth was negative.
2. Gross margin fell from 26.0% to 14.4%, and the half-year gross profit grew barely faster than a rounding error against 32% revenue growth.
3. The operating loss is unchanged — $43.3 million against $43.7 million — after a year of scaling.
4. Q3 revenue is guided to $9.0–10.0 million, a midpoint roughly 5% above Q2. The volume ramp being described in the eyewear business is not yet visible in the revenue guide.
5. Interest expense now exceeds interest income, reversing a year ago.
6. The smartphone qualification is still not complete, and “completion expected in 2026” has been the shape of this milestone for some time.
7. 2,100 packs is 4.2% of the 50,000-pack order. The 9x Q3 step is a commitment, not a result.

The bull case is concrete too. Revenue came in at the high end of guidance and above consensus. The lead smartphone customer confirmed a 1,000-cycle pass — the specification that has blocked silicon-anode cells in phones — and the final test is running. Eyewear revenue has started and international safety certifications are done. The drone, defence and industrial pipeline grew 41% in a quarter to $183 million, with drones alone above $100 million, and weight-per-watt is exactly where this cell architecture should win. Manufacturing yields are at or above 95% on almost every step. Free-cash burn improved year over year, and $552 million buys roughly four years to finish the job.

What to check at the Q3 report

• Gross margin against 14.4%, and whether incremental gross margin turns positive. This is the number that says whether volume helps or hurts.
• Eyewear shipments against the guided ~19,000 packs. A 9x step in one quarter is the first real test of Fab2 throughput.
• Zone 1 dicing yield against ~84%. Management has named it the throughput constraint; it is the cleanest single operational metric in the release.
• Smartphone qualification — completed, or still “underway”. No other line item in this company matters as much.
• Revenue against the guided $9.0–10.0 million, and whether Q4 guidance finally shows the eyewear order arriving in the top line.
• Free cash flow against $(31.4) million and liquidity against $552 million.
• The pipeline against $183 million, and how much of it converts to orders rather than growing as a pipeline.

The read

Enovix is four years into proving that a better battery can be built in volume, and this quarter says the proof is closer but not finished. The engineering evidence improved — 1,000 cycles passed, yields at 95%-plus on most steps, a pipeline up 41% — while the financial evidence went the other way: gross profit down a third, margin down twelve points, operating loss flat.

Those two are not in conflict. They are what it looks like when a company is spending to convert technical wins into shipped units and has not yet reached the volume where that spending pays. The question is only whether the money lasts long enough, and on $552 million against $31.4 million a quarter, it does.

For anyone holding ENVX, the useful discipline is to stop reading the revenue growth rate — at $9 million a quarter it moves on single orders. Read gross margin, because it tells you whether the next unit is worth making; eyewear shipments against 19,000, because it is the first volume commitment with a number attached; and the smartphone qualification, because it is the one event that changes the size of this company.

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Sources and method. Company figures — revenue of $9.024 million against $7.468 million and half-year revenue of $16.624 million against $12.566 million; cost of revenue of $7.722 million against $5.526 million; gross profit of $1.302 million against $1.942 million and half-year gross profit of $2.854 million against $2.203 million; research and development of $24.444 million against $28.148 million, selling, general and administrative of $20.154 million against $17.527 million and total operating expenses of $44.598 million against $45.675 million; the loss from operations of $43.296 million against $43.733 million and the half-year figure of $87.191 million against $86.293 million; interest income of $5.134 million against $2.427 million and interest expense of $6.521 million against $1.705 million; the net loss of $43.077 million against $44.266 million, loss per share of $0.20 against $0.22 and weighted-average shares of 218.5 million against 204.8 million; adjusted EBITDA of $(18.9) million against $(20.1) million, net cash used in operating activities of $(21.8) million against $(25.9) million, capital expenditures of $(9.6) million against $(8.0) million and free cash flow of $(31.4) million against $(33.8) million; the balance-sheet lines (cash and equivalents of $33.741 million, short-term investments of $442.040 million, long-term investments of $74.430 million, accounts receivable of $3.097 million, inventory of $17.520 million and property and equipment of $165.155 million, each against the 28 December 2025 comparative); the stated liquidity of approximately $552.1 million; the operating highlights (the lead smartphone customer confirming more than 1,000 cycles under the 0.2C discharge cycle test and the final accelerated cycle-life test being underway with completion expected in 2026; approximately 2,100 AI-1 packs shipped, international safety certifications completed and initial smart-eyewear revenue recognised; third-quarter shipments expected to increase approximately 9x to about 19,000 packs against the 50,000-pack order; the drone, defence and industrial pipeline of $183 million, up approximately 41% from $130 million, with drone opportunities exceeding $100 million; and the Fab2 yield figures including Zone 1 dicing of approximately 84% against approximately 80%); and the third-quarter 2026 outlook of $9.0–10.0 million of revenue — are Enovix’s own disclosures in Exhibit 99.1 to the Form 8-K filed 2026-08-12 for the fiscal quarter ended 2026-07-05. These were read directly from the filing on SEC EDGAR, which is linked above. Note that Enovix reports on a 52/53-week fiscal calendar, so the quarter ended 5 July 2026 against 29 June 2025.

The Q2 guidance used for the verdict — revenue of $8.0–9.0 million, a non-GAAP loss from operations of $29.0–32.0 million, non-GAAP net loss per share of $(0.13)–$(0.17) and capital expenditures of $9.0–13.0 million — is from Exhibit 99.1 to the Form 8-K filed 2026-05-13, linked above; the Q2 non-GAAP loss from operations of $28.759 million and non-GAAP net loss per share of $(0.13) are from the reconciliation tables in the 2026-08-12 release.

Not company figures, and attributed accordingly: the consensus estimates of approximately $8.431 million of revenue and $(0.14) per share, as reported by Daily Political (cited above; the original page is no longer online, so the link is to its Wayback Machine snapshot of 2026-08-11). Whether the quarter beat or missed its own targets is judged only against the company’s own previously issued guidance (Form 8-K, Exhibit 99.1, filed 2026-05-13) and against the year-ago quarter; the third-party figures are reported separately and play no part in that verdict. This piece makes no claim about the share-price reaction.

Our arithmetic, labelled as such: the 20.8% revenue growth, 39.7% growth in cost of revenue and 33.0% decline in gross profit; gross margins of 14.4% and 26.0%; the negative 41% incremental gross margin, derived from a $1.556 million revenue increase against a $0.640 million gross-profit decline, and the roughly $1.41 of incremental cost per incremental dollar of revenue that implies; the 29.5% half-year gross-profit growth against 32.3% revenue growth; the 1.0% improvement in operating loss; the observation that interest expense now exceeds interest income; the 6.7% increase in weighted-average shares; the roughly 17 quarters of runway implied by $552.1 million against $31.4 million of quarterly free-cash burn; the eyewear order arithmetic (2,100 packs as 4.2% of 50,000, and about 21,100 or 42% cumulative if 19,000 ship in Q3); and the roughly 5% sequential increase implied by the Q3 revenue guide midpoint. These are approximations built on disclosed figures, not reported numbers. The interpretation — that the revenue being added is not yet profitable, that the operating loss has not responded to a year of scaling, and that the smartphone qualification and the eyewear ramp are the two events that decide the outcome — is our analysis, not a company statement, and is not a forecast.

Related: Cerebras Q2 2026 and NANO Nuclear Q3 FY2026, which reported the same evening; and AST SpaceMobile Q2 2026, another company whose reported quarter is mostly a progress report on hardware that has not started earning yet.

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