SES AI’s Sequential Revenue Rebound Reverses

The Tip Desk · October 18, 2026 · 3 min read

SES AI reported a 22.6% GAAP gross margin and reaffirmed its $30 million to $35 million annual revenue forecast.

The battery developer and manufacturer SES AI Corporation (SES) reported a second-quarter sequential revenue decline that reversed its first-quarter rebound, even as gross margins continued improving. Sales were $5.1 million against $6.7 million in the first quarter, when revenue had risen 47% sequentially from the final quarter of 2025. The retreat interrupted the sales recovery during the company’s shift toward energy storage and drones.

In the second quarter, SES recorded revenue across all its product lines for the first time: energy storage systems, drone battery cells, materials and Molecular Universe. That broader participation did not prevent the sequential sales decline.

Gross margin followed a different trajectory, reaching 22.6% from 18.1% in the first quarter and 11.3% in the fourth quarter of 2025. SES attributed the latest improvement primarily to energy storage products, citing a higher proportion of international sales and continued pricing discipline. The margin recovery therefore extended through another quarter despite the revenue reversal.

Operating expenses rose to $20.3 million from $19.1 million in the first quarter. The company attributed that increase primarily to a bad-debt provision related to a legacy electric-vehicle service contract. SES said it remains confident it can sustain an operating-expense reduction of more than 20% year over year.

GAAP net loss was $0.05 a share. Net loss was $12.1 million in the preceding quarter. SES attributed the sequential widening primarily to a noncash change in the fair value of sponsor earn-out liabilities. The company expects its net loss to narrow in the second half through higher revenue and further expense reductions as its cost program takes full effect.

Energy storage remained SES’s largest revenue source. Its UZ Energy subsidiary secured certification for compatibility between its low-voltage residential batteries and Sol-Ark’s hybrid inverters. The three-year distribution agreement with ATG Epower, now US Energy Distributors, covered residential, commercial and industrial customers. SES said it expects the Sol-Ark certification to accelerate UZ’s revenue growth in the United States.

The materials and software businesses also recorded commercial milestones. SES shipped its first Search-in-a-Box order to a large battery manufacturer and released Molecular Universe MU-3.0, an on-premises workflow platform spanning sodium and lithium chemistries. Some materials discovered through Molecular Universe completed testing and entered early commercial pilot deployment. Roughly half a dozen customers had progressed through second-phase testing, and SES said it remains focused on converting that pipeline into its first commercial materials supply agreement in the second half.

SES ended June with approximately $163 million in cash, cash equivalents and short-term investments. The company said its liquidity provides funding for operations and its growth initiatives, as well as flexibility to pursue acquisitions that complement its businesses.

Full-year revenue guidance remains $30 million to $35 million. For the six months through June, revenue totaled $11.8 million, leaving a larger sales contribution required in the second half to meet that range. SES continues to expect a blended consolidated gross margin of approximately 15% and says it is seeking greater contributions from drone cells, materials and Molecular Universe alongside energy storage.

The drone business supplied a specific timetable for that second-half contribution. SES expects to complete the expansion of its Korean NDAA-compliant production line within about a month and begin operating at full annual capacity of 1 million cells in the fourth quarter. The company had hosted American and allied drone manufacturers for production-line audits. SES expects revenue from that line to begin contributing meaningfully in the fourth quarter and grow further in the first half of next year.