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QuantumScape (NYSE:QS) stock is surging higher today after the solid-state battery (SSB) company announced that it had reached an agreement with Volkswagen’s (OTCMKTS:VWAGY) PowerCo. QuantumScape has another catalyst on the way, as it will report its second-quarter earnings on Wednesday, July 24 after the market close.
Once QuantumScape accomplishes specific technological milestones, it will provide PowerCo with a non-exclusive royalty-bearing license to manufacture and sell batteries for automotive purposes using its QSE-5 technology. The QSE-5 is QuantumScape’s first planned commercial battery product. Early models of the battery have already been sent to customers.
“QuantumScape’s technology is poised to enter a pivotal stage where PowerCo’s specialized expertise, resources and global factories can help facilitate the transition to industrial-scale production,” said PowerCo CEO Frank Blome.
PowerCo is set to pay QuantumScape an initial $130 million royalty fee. Any future royalties will be credited against this payment.
QS Stock: Q2 Earnings Scheduled for July 24
Ahead of earnings, shareholders will be able to submit any questions they have for management until July 23.
For the quarter, analysts expect revenue of $0 on top of a GAAP EPS loss of 23 cents. A year ago, the company reported revenue of $0 with a GAAP EPS loss of 26 cents. QuantumScape has incurred an accumulated deficit of $3 billion since 2010 as of the first quarter.
However, the lack of revenue is expected since QuantumScape hasn’t sold any batteries yet. In fact, analysts don’t forecast any revenue from the company until the first quarter of 2026, when revenue is expected to be $1 million. Revenue is expected to reach $117 million by the fourth quarter of that year. A bet on QS stock is a bet that it will be able to emerge as a leader in the SSB industry.
For earnings, QS stock shareholders will want to hear about QSE-5 progress. The deal announced today may signal that the company has made advancements on that front. In the meantime, QuantumScape is expected to continue burning cash on research and development, which is its largest expense.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
