Ilika Plc Earnings Call: Solid-State Progress, Cash Strain

Ilika plc ((GB:IKA)) has held its Q2 earnings call. Read on for the main highlights of the call.

Ilika Earnings Call Balances Technical Momentum With Financial Strain

The latest earnings call from Ilika plc struck a cautiously optimistic tone, highlighting substantial technical and commercial milestones across both its Stereax and Goliath solid-state battery platforms, even as near-term financials remain pressured. Management emphasized that qualified manufacturing with partner Cirtec, first product deliveries, and successful scale-up work on gigafactory-grade equipment signal genuine commercialization momentum, while acknowledging lower turnover, a wider EBITDA loss, and a reduced cash position driven largely by the timing and cost of prototype scale-up. Investor focus now turns to the pace of customer validation and the timing of potentially material Goliath licensing deals.

Stereax–Cirtec Partnership Starts to Deliver Commercial Traction

A core highlight was the progress in Ilika’s miniature solid-state Stereax batteries through its partnership with Cirtec Medical. The manufacturing process at Cirtec has been qualified, production for product testing has commenced, and Ilika delivered M300 batteries to customers before year-end, including to digital health company Lura Health. Importantly, the company received its first purchase order for cathode/electrode deliveries, which management framed as an early indicator that commercial volumes could begin ramping from this low base. The Cirtec relationship underpins an asset-light path to revenue, as it allows Ilika to focus on materials and IP while leveraging Cirtec’s manufacturing infrastructure to scale.

Goliath Prototype Shipments and Pilot-Line Scale-Up

On the Goliath large-format solid-state program, Ilika reported meaningful technical and customer-facing progress. The company has already validated 2 Ah prototypes and has now shipped 10 Ah Goliath prototypes—offering five times the energy—to customers for evaluation. An automated pilot line capable of producing 10 Ah cells has been commissioned, and prototype deliveries to OEMs and Tier 1 suppliers are underway. These steps shift Goliath from a purely lab-based program into an industrial pilot-phase effort, where the technology can be assessed in real-world applications and integrated into early vehicle and system designs.

UKBIC Results De-Risk Gigafactory Deployment

Ilika’s collaboration with the UK Battery Industrialisation Centre (UKBIC) is proving strategically important in de-risking future scale-up. The company reported higher manufacturing yields at UKBIC than on its own pilot line, alongside improvements in cell capacity and the development of faster charging protocols. Crucially for investors, the process has been demonstrated on standardized gigafactory equipment, indicating that Ilika’s solid-state technology can plug into existing high-volume battery manufacturing infrastructure. This reduces scale-up and capex risk for potential licensees and partners considering adoption at gigafactory scale.

Modeled Pack-Level Benefits Strengthen Customer Value Proposition

Independent modeling work with Balance Batteries provided quantitative evidence of Goliath’s potential impact at the battery-pack level. The analysis suggested that Ilika’s technology could deliver an estimated battery pack cost reduction of about £2,500 (around $3,000), up to 20% weight savings, and a cut in 10%–80% fast-charge time from approximately 18 minutes to 12 minutes—roughly a one-third improvement. These metrics translate into meaningful range uplift and system-level efficiency gains for EV manufacturers, providing a clearer commercial narrative to support ongoing OEM and Tier 1 evaluations and forthcoming licensing conversations.

Asset-Light Licensing Strategy Backed by IP Portfolio

Management reinforced Ilika’s diversified go-to-market strategy, built around an asset-light licensing model rather than owning large-scale manufacturing. Revenue opportunities span cathode deposition services, non-recurring engineering (NRE), profit-share or royalties on licensed production, and upfront or milestone licensing fees. This approach is underpinned by a portfolio of 78 granted patents, which management sees as a key strategic asset when negotiating with automotive, medical, and consumer electronics partners. The combination of a defensible IP base and a capital-efficient business model is central to Ilika’s long-term margin and scalability story.

Grant Funding and Turnover Provide Limited but Valuable Runway

Ilika generated turnover of £0.6 million in the half, primarily from grant-funded projects and cathode deposition work. While modest in absolute terms, these revenues are complemented by ongoing grant support—such as the PRIMED program—where grants typically cover around half of project costs. Management also highlighted the receipt of an R&D tax credit after the half-year, which helps prolong the company’s cash runway and offset some of its elevated development spending. Taken together, grants, project revenues, and tax credits are supporting the transition from R&D-heavy activity towards early commercialization.

Growing Customer Engagement Across Multiple Sectors

The company pointed to strong and diversified interest in both Stereax and Goliath, with 27 NDAs or evaluation agreements now in place. These span automotive OEMs and Tier 1 suppliers, as well as players in defense and consumer electronics. For Stereax, use cases in medical and wearable devices are gaining traction, while for Goliath, the focus is on electric vehicles and adjacent mobility applications. Although these engagements are still at the evaluation and testing stage, the breadth of the pipeline underscores Ilika’s strategy of seeding multiple verticals to increase the odds of successful commercialization.

Lower H1 Turnover Highlights Revenue Timing Sensitivity

Despite operational progress, H1 financials underscored the company’s sensitivity to grant funding cycles and early-stage revenue streams. Turnover of £0.6 million was down year-on-year, primarily due to timing differences in the recognition of grant income; the prior year’s first half benefited from the completion of several grants, temporarily inflating revenue. This dynamic highlights the volatility investors should expect in Ilika’s top line until recurring commercial revenues from Stereax and licensing/NRE fees from Goliath become more material and predictable.

EBITDA Loss Widens on 10 Ah Prototype Costs

The company reported a widening EBITDA loss in the half, reflecting both lower turnover and substantially higher R&D and prototype expenses. Producing 10 Ah Goliath prototypes required materially more active material—around five times that of the earlier 2 Ah cells—driving up unit costs and increasing cash consumption. While these costs are strategic, as they are necessary for customer trials and licensing progress, they weigh on near-term profitability and make external validation milestones particularly important for investors tracking the transition from development spend to commercial returns.

Cash Position Down, Though Supported by Tax Credits

Ilika ended the half-year with cash of £6.9 million, down from £10.1 million at the comparable point—a decline of roughly 31.7%. The reduction reflects sustained R&D investment and scaling of prototype production. Management emphasized that the subsequent receipt of an R&D tax credit improves the near-term cash outlook, alongside continued grant funding. Nonetheless, the trend underscores the importance of converting current technical and customer engagement milestones into commercial revenues and potential partner funding to reduce financing risk over the medium term.

Commercial Validation and Licensing Still to Be Secured

While Stereax M300 and Goliath 10 Ah prototypes are now in customers’ hands, Ilika is still waiting on formal feedback and long-duration validation data. Many customer test regimes are proprietary and can extend over lengthy timelines, limiting the company’s near-term visibility on adoption, performance benchmarks, and integration roadmaps. This means investors should expect an information lag between prototype shipment and any definitive commercial announcements. The same uncertainty applies to the conversion of today’s NDAs and evaluations into binding supply or licensing agreements.

Goliath Licensing Timeline Remains Extended and Uncertain

Management reiterated that Goliath licensing discussions, opened on the back of the 10 Ah prototype shipments, are likely to unfold over an extended period—potentially around 30 months. The company explicitly did not commit to signing definitive licensing agreements by 2026, signaling that while interest is strong, negotiations and technical qualification processes are complex and time-consuming. For investors, this creates medium-term uncertainty over the timing and scale of licensing revenue, even as the strategic rationale and technical de-risking continue to build.

Market and Technical Risks Temper the Upside Case

The call also acknowledged broader market and technical risks. In the EV space, macro headwinds, such as reduced incentives in key regions, are creating turbulence in demand and investment cycles, which could slow decisions on new battery technologies. Ilika faces competition from incumbent lithium-ion producers and other solid-state developers, and must continue to manage technical trade-offs, such as the need for external pressure to enhance cycle life, which adds engineering complexity at the pack level. These factors mean that, despite encouraging metrics, the path to mass-market adoption is not guaranteed.

Forward-Looking Guidance Centers on 2026 Commercial Roadmap

Looking ahead, Ilika laid out a clear, albeit phased, roadmap focused on 2026 as a key commercialization horizon. For Stereax, the company expects ongoing customer evaluations of M300 cells and early cathode-batch deliveries, with revenue from each batch currently in the “low tens of thousands” of pounds and integration with Cirtec expected to generate NRE, profit-share royalties, and product royalties as volumes build. The higher-capacity M1000 remains under evaluation. For Goliath, the company highlighted completed 2 Ah validation, 10 Ah pilot-line production and shipments, and improved yields and capacities from UKBIC work as foundations for licensing. Management intends to use the next 30 months to progress licensing discussions, supported by modeled benefits such as ~£2,500 pack-level cost savings, up to 20% weight reduction, and substantially faster charge times. Grant funding, typically covering roughly half of project costs, alongside R&D tax credits, is expected to help bridge the company through early Stereax sales targeted before the end of calendar 2026 and staged Goliath milestones.

In closing, Ilika’s earnings call painted a picture of a company transitioning from pure R&D to early commercialization, with credible technical achievements and a broadening customer pipeline offset by a weaker financial snapshot and extended timelines for major licensing deals. The qualified Stereax line at Cirtec, Goliath 10 Ah shipments, and UKBIC scale-up results all point to real momentum, but investors must balance this against cash burn, revenue volatility, and market and execution risks. For those willing to tolerate these uncertainties, Ilika remains a high-risk, high-upside play on solid-state battery commercialization over the next several years.