QuantumScape (QS) Q3 2026 earnings review
QuantumScape adds paying partners, but its quarterly billings still slip
QuantumScape, the developer of solid-state batteries, sent its first invoices to Honda and defense customers while planning a commercial production line for 2028. Total customer billings slipped to $9.8 million, and the operating cash loss excluding one-offs stayed near $61 million, below what the company's own second-half plan pointed to. Chief executive Siva Sivaram kept the full-year outlook unchanged, which by our math leaves a $74 million operating loss for the fourth quarter.
| Customer billings | $9.8M -9.3% from last quarter |
|---|---|
| Operating cash loss (Adjusted Ebitda) | $60.7M -1.2% from a year ago |
| Total liquidity | $819.8M down $39.2M from last quarter |
| Full-year operating loss outlook | Unchanged $250M–$275M Adjusted Ebitda loss |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because new customer milestones were offset by another long wait for mass production. Recording first billings from Honda and defense buyers, launching a data center battery design, and partnering with equipment maker Muehlbauer show that interest is spreading beyond Volkswagen. One caution: the new 100-megawatt-hour line will not start until 2028, and total billings still fell from last quarter.
The question now is whether these new automotive, data center, and defense deals are generating meaningful cash or merely masking a step-down from Volkswagen's battery unit. Either non-Volkswagen partners are already carrying most of the quarterly invoices, or billings will drop once Volkswagen's reduced contract runs down. The related-party breakdown in the quarterly filing and the November 11 technology symposium in Kyoto will tell.
🐂 Bull Case
New Customers Begin Paying Across Auto and Defense
QuantumScape is a battery developer with no commercial revenue, so it tracks progress through customer billings, the total value of invoices sent to partners. Until now, those invoices came mostly from its main partner, Volkswagen's battery unit PowerCo. This quarter, the company recorded its "first customer billings from the Honda agreement announced in June" and its "first customer billings from QSAS this quarter", which is its defense and aerospace division.
The battery maker also signed a development deal with "a leading global player in mobility manufacturing" and shipped test cells to aviation and telecom customers. This matters because new paying partners reduce its reliance on Volkswagen, which lowered its contract ceiling last quarter.
What to watch: the dollar split of customer billings between PowerCo and these newer partners in the annual report. A rising share from Honda and defense buyers would show the customer base is truly broadening.
Data Center Design and 300-Degree Tests Back Safety Claim
To sell batteries into artificial intelligence data centers through QSDC, its data center division, QuantumScape must show its cells are safer and denser than standard lithium-ion batteries. Standard batteries can catch fire above 180 degrees Celsius, which slows down permits and insurance for server racks. In October, the company launched QS PowerBlock, "an in-rack energy storage reference design" built around its QSE-5 solid-state cell.
In testing against an industry standard specification, the design showed "4x the power density and 5x longer runtime", QuantumScape said. Customer and third-party labs also verified in the third quarter that its cells stay stable well above 300 degrees Celsius. That independent validation gives data center builders a concrete reason to test the hardware.
What to watch: a named partner for the power electronics and battery management systems needed to run QS PowerBlock in live server racks. Securing an integration partner is the step that turns a reference mockup into a product customers can buy.
🐻 Bear Case
Pilot Output Stays Unreported While Factory Target Is 2028
"Our progress on demonstrating scalable production has given us the confidence to take the next steps for production scale-up beyond the designed capacity of the Eagle Line," chief executive Siva Sivaram wrote. Eagle Line is the company's pilot line in San Jose, which makes QSE-5 sample cells. QuantumScape announced a partnership with German equipment maker Muehlbauer Group "to provide cell assembly equipment for a planned 100 megawatt-hour (MWh) cell production line".
The catch is the timeline and the missing numbers. That 100-MWh line, "aimed at meeting the rapidly emerging opportunities for our QSDC and QSAS business verticals", will not start production until 2028. Meanwhile, management pledged last quarter to double Eagle Line output in the second half of 2026, but the letter gives no cell production figures to verify that ramp.
What to watch: fourth-quarter confirmation of whether Eagle Line cell output actually doubled in the second half of 2026. If the company does not confirm the doubling, its pilot line may still face bottlenecks ahead of the 2028 build.
Billings Slip While Customer Mix Stays Hidden
QuantumScape presents customer billings as proof of growing commercial traction across its automotive, data center, and defense divisions. Yet the company still refuses to disclose how much of that total comes from Volkswagen's PowerCo versus new customers, and it is now aligning PowerCo onto a long-term platform "that goes beyond QSE-5".
- Third-quarter customer billings: $9.8 million, down 9.3% from last quarter and down 23.4% from a year ago
- Year-to-date customer billings: $31.6 million by our math, compared with $19.5 million for all of 2025
- Cash received from related party (PowerCo): $18.5 million in the third quarter, up 78.7% from $10.4 million last quarter
Even with Honda and defense invoices starting this quarter, total billings fell for a second straight quarter. Moving PowerCo toward a future platform beyond QSE-5 also raises the risk that automotive licensing takes even longer.
What to watch: the related-party footnote in the third-quarter filing and the November 11 technology symposium in Kyoto. Those disclosures will show how much of the $9.8 million still depended on Volkswagen and whether QSE-5 remains an automotive product.
Capital Spending Lags the Plan While New Markets Multiply
QuantumScape is expanding into data centers and defense, planning a 100-MWh line with Muehlbauer, and developing next-generation technology beyond its QSE-5 cell. At the same time, it is spending less money on research and equipment. Capital expenditures — cash spent on factory gear and facilities — fell 53.6% from a year ago to $4.4 million in the third quarter, while research and development expenses dropped 19.8% to $73.9 million.
Through nine months, the developer has spent $19.0 million on capital projects. By our math, hitting the middle of its $27 million to $37 million full-year plan requires $13.0 million in the fourth quarter, nearly triple the third-quarter pace. Stretching a smaller budget across more markets risks slowing down the core battery roadmap.
What to watch: fourth-quarter capital spending against the $8.0 million needed just to reach the bottom of the full-year outlook. Falling short of the lowered range would signal that equipment installations are slipping into 2027.
Risks this quarter didn't answer
Three standing risks around cash burn, rival battery makers, and legal overhang received no new resolution in the shareholder letter.
- Cash burn and dilution: QuantumScape still loses $250 million to $275 million a year on an Adjusted Ebitda basis with no commercial revenue; a formal cash runway date remains absent from the outlook.
- Solid-state competition: whether QuantumScape can qualify its cells with automakers before rival battery chemistries will be tested when it presents its next-generation platform in Kyoto on November 11.
- Shareholder litigation: the status of the stayed derivative lawsuits and their $4.7 million settlement accrual awaits the legal footnotes in the third-quarter 10-Q filing.
👓 Other Themes
US Supply Chain Pitch Targets Foreign Export Rules
Defense customers are facing foreign government restrictions that limit their access to advanced batteries, QuantumScape said. Because the company builds its cells in the United States without relying on Chinese equipment or graphite — a battery material heavily controlled by China — it is pitching its supply chain as a security advantage, joining a September roundtable on domestic batteries in Washington.
Lower Stock Pay Trims the Accounting Loss
QuantumScape's reported net loss narrowed 20.2% from a year ago to $84.5 million, or $0.14 per share versus $0.18. Almost all of that improvement came from non-cash items: stock-based compensation fell 44.2% to $16.3 million, and equipment write-offs and depreciation dropped 35.0% to $15.4 million. Excluding those items, the operating loss (Adjusted Ebitda) was $60.7 million, down 1.2% from $61.4 million a year ago.
💲 Other KPIs
Cash and marketable securities fell by $39.2 million from $859.0 million last quarter, a smaller drop than the $45.7 million decline in the second quarter. Operating cash outflow was $55.1 million and capital spending was $4.4 million, partly offset by $18.5 million received from partner Volkswagen PowerCo.
Share count rose 5.4% from 588.7 million a year ago and 0.6% from 617.1 million last quarter. The company issued no new stock on the open market this quarter, as the year-over-year increase reflects stock sales completed in the third quarter of 2025 and ongoing employee stock compensation.
🔮 Guidance
Unchanged. Finance chief Kevin Hettrich kept the full-year operating cash loss forecast at $250 million to $275 million for a third straight quarter. With $188.2 million lost through nine months, by our math the middle of the range leaves a $74.3 million loss for the fourth quarter, up 17.3% from $63.3 million a year ago. Given the $60.7 million third-quarter pace, the full-year loss is tracking toward the lower end of the range.
Unchanged. The company held its capital spending plan at $27 million to $37 million after cutting it by $18 million at the middle of the range last quarter. By our math, the $32.0 million middle of the range implies $13.0 million of spending in the fourth quarter, up from $4.4 million this quarter and $12.3 million in last year's fourth quarter. Even reaching the $27 million bottom requiresfourth-quarter spending to nearly double.
❓ Key Questions
How much of the $9.8 million in billings was Non-PowerCo?
First invoices went to Honda and defense customers, yet total billings fell from $10.8 million last quarter while cash from PowerCo rose to $18.5 million. Investors need the dollar split to know whether new customers can replace the shrinking PowerCo contract.
Did Eagle Line cell output double in the third quarter?
Management previously aimed to double pilot line output in the second half of 2026. The shareholder letter called the line a workhorse but gave no production numbers to show whether output is actually doubling.
Why move Volkswagen PowerCo beyond the QSE-5 cell now?
QuantumScape said it is aligning its work with PowerCo around a long-term technology platform that goes beyond QSE-5. That raises the question of whether PowerCo still plans to mass-produce the current QSE-5 cell design.
Who will fund the 100-MWh production line for 2028?
The company partnered with Muehlbauer for a 100-MWh commercial line targeting data center and defense cells in 2028, while full-year 2026 capital spending is only $27 million to $37 million. Management has not disclosed the total cost of the new line.