Enovix Guides 2027 Revenue to $85 Million, Exits Smartphone Race

Enovix guided 2027 revenue to $65 million to $85 million on Thursday, a midpoint nearly double its 2026 outlook, as drone and defense orders replace a smartphone ambition the company has now formally abandoned. The Fremont, California battery maker also posted third-quarter revenue of $11.0 million, up 38 percent from a year earlier, with a record non-GAAP gross margin of 34.5 percent.

The smartphone retreat is the story's hard center. The AI-1 silicon-anode cell passed internal cell-level qualification, and the lead phone customer was expected to finish its own qualification the following week. The cells, however, were built on an earlier process and missed the latest energy-density target of more than 1,000 watt-hours per liter. Enovix will not proceed with system-level field testing and will route its next density gains, including the AI-2 generation, to smart eyewear customers first. A company once pitched as a phone-battery play is now an eyewear and drone play. The pivot required no committee.

Where is the money going instead?

The drone, defense and industrial pipeline grew 18 percent in the quarter to roughly $216 million, of which $150 million is drones. Enovix received an initial 100,000-battery order from a multinational dual-use drone supplier and a first production order for its MX1-B01 high-energy drone cell from a US drone maker, with deliveries due in early 2027.

Steve Bakos, the new chief revenue officer, put the demand plainly: "Our customers need high-performance cells from a qualified, non-Chinese source, and they need them in volume next year." That sentence explains the 2027 guide. A $19 million expansion will double drone battery capacity at the company's military-qualified South Korean plant, coming online in the second quarter of 2027.

Smart eyewear carries the rest of the mix shift. Enovix has shipped about 19,000 units this year against a 50,000-unit backlog due for completion in the first half of 2027.

What do the numbers look like?

Quarter	Revenue	GAAP gross margin	Net loss
Q3 2025	$8.0M	17.5%	$53.7M
Q2 2026	$9.0M	14.4%	$43.1M
Q3 2026	$11.0M	30.1%	$41.9M

GAAP gross margin rose to 30.1 percent from 17.5 percent a year earlier, and the non-GAAP figure hit a record 34.5 percent, which Enovix credited to a richer mix of eyewear and drone and defense revenue. Revenue grew 22 percent from the second quarter, a figure already disclosed on October 12. The GAAP operating loss narrowed to $39.3 million, and the net loss attributable to Enovix was $41.9 million, or 19 cents a share; the non-GAAP loss was 15 cents. Cash, equivalents, marketable securities and restricted cash totaled $512.2 million as of October 4.

The balance sheet work is unusually aggressive for a company of this size. Since quarter-end Enovix has retired $128.0 million of its 4.75 percent convertible notes due 2030 for about $81.4 million — a 36 percent discount, leaving $232.0 million outstanding. It bought back $15.5 million of stock in October after $6.2 million in the third quarter.

An early-November restructuring eliminated 220 positions and cut about $8.5 million of annual cost. Interim chief executive Ryan Benton, the former finance chief who replaced Raj Talluri in August, runs the company alongside executive chairman T.J. Rodgers.

Shareholders of record on November 13 receive one warrant per four shares, exercisable at $3.00 in cash or in 2028 notes — a structure designed to retire those notes.

Is the guide credible?

Nearly half the 2027 midpoint sits in backlog, which lends the range some floor. Q4 2026 guidance of $9 million to $10 million, against $11.3 million a year earlier, shows near-term revenue still shrinking even as the 2027 story builds. The wager is that non-Chinese drone supply and eyewear volume arrive on schedule — and that the South Korean capacity doubling lands in the second quarter of 2027 as promised.