Enovix Q4 2025 Results: Defense Revenue Dominates as Fab2 and AI-1 Ramps Remain Elusive

What happened

Enovix released its fourth quarter and full year 2025 financial results via a press release on February 25, 2026, likely framing progress optimistically despite persistent execution challenges. The DeepValue report indicates that Enovix's recent growth has been driven by South Korean defense contracts, with Q3 2025 revenue of $7.99 million and an 18% GAAP gross margin, while Fab2 and AI-1 smartphone contributions remain minimal. Critical scrutiny of the Q4 results is warranted to assess whether any meaningful revenue can be attributed to Fab2 or if AI-1 design wins have materialized beyond sampling stages. Management's guidance for 2026 will be pivotal, as the company faces fixed costs from its YBS manufacturing agreement and needs to demonstrate scalable, profitable demand. Investors must look beyond the press release's potential hype to evaluate if the fundamentals support a transition from defense-heavy reliance to consumer electronics monetization.

Implication

Enovix's continued dependence on lumpy defense revenue underscores the slow commercialization of its silicon-anode technology, delaying margin improvement and diversification. Cash reserves of $648 million provide a multi-year runway, but fixed commitments from the YBS agreement increase operational leverage and risk if Fab2 yields disappoint. Without disclosed Fab2 revenue or confirmed high-volume AI-1 smartphone launches, the company lacks near-term catalysts to justify its current valuation. Investors should monitor upcoming guidance for 2026, focusing on yield metrics and OEM engagement updates to gauge execution timelines. Until these milestones are met, maintaining a 'wait' stance offers better downside protection against potential dilution or value destruction from underutilized capacity.

Thesis delta

The Q4 2025 results do not alter the DeepValue report's 'WAIT' rating, as Enovix remains in a pre-scale phase with unproven Fab2 and AI-1 ramps. The thesis continues to hinge on whether Fab2 achieves >30% revenue contribution at >20% GAAP gross margin within 12 months, with no shift indicated until 2026 guidance or design win disclosures provide clearer signals.