Financial Performance - Revenue for Q2 2025 reached $8.5 million, a 126% increase year-over-year, primarily driven by BESS revenue [10, 13] - Gross margin for Q2 2025 was 29.6%, improved from 27.8% in Q2 2024, with gross profit of $2.5 million, a 140% increase year-over-year [10, 13] - Adjusted operating expenses were $16.2 million, a 2% improvement year-over-year, with an additional $6.5 million in annualized cost savings initiatives implemented in June/July [10, 13] - Adjusted EBITDA loss was $13.7 million, narrowed by 11% year-over-year due to increased revenue and gross margin [10, 13] - Total cash and cash equivalents as of June 30, 2025, were $58.1 million, a 23% improvement versus Q1 2025 [10, 13] Commercial Pipeline and Projects - Backlog as of August 7th, 2025, including Build, Own & Operate projects, reached $954 million, a 120% increase year-to-date [10, 15] - The company has a developed pipeline of 5.9 GWh, shortlisted and/or awarded projects worth $2.4 billion [15] - Revenue recognized since the IPO in Q1 2022 totals $551 million [15] - The company launched "Asset Vault" with a $300 million preferred equity investment expected to enable over $1.0 billion in CapEx spending for 1.5 GW of projects [57] Operational Updates - The 57 MW/114 MWh Cross Trails BESS project in Texas is fully owned and operated by the company and is in operation [29, 35] - The Calistoga Resiliency Center, an 8.5 MW/293 MWh hybrid hydrogen and battery energy storage project in California, is operation-ready [36, 41] - The company acquired the Stoney Creek 125 MW/1,000 MWh BESS project in New South Wales, Australia, backed by a 14-year Long-Term Energy Service Agreement (LTESA) [42, 46, 55]

[Q2 2025 Financial and Operational Highlights](index=1&type=section&id=Q2%202025%20Financial%20and%20Operational%20Highlights) [Q2 2025 Key Financial Results](index=1&type=section&id=Q2%202025%20Key%20Financial%20Results) Energy Vault achieved significant financial growth in Q2 2025, with revenue increasing 126% year-over-year to $8.5 million and gross profit rising 140% to $2.5 million, while also increasing contract backlog by 47% to $954 million and improving Adjusted EBITDA Q2 2025 Key Financial Data: | Metric | Q2 2025 | YoY Growth | Notes | | :--- | :--- | :--- | :--- | | Revenue | $8.5 million | 126% | Driven by Australia project deliveries and Cross Trails BESS commissioning | | GAAP Gross Profit | $2.5 million | 140% | Gross margin of 29.6% (27.8% in prior year period) | | Adjusted EBITDA | $(13.7) million | 11% improvement | Prior year period was a loss of $(15.4) million | | Contract Backlog (as of announcement date) | $954 million | 120% (YTD) | Includes new Consumers Energy project, LTSA, and long-term offtake agreements | | Cash Balance (including restricted cash) | $58.1 million | 23% (QoQ) | Reached upper end of previous guidance range | | GAAP Net Loss | $(34.9) million | - | - | | Adjusted Net Loss | $(18.4) million | 32% increase | Prior year period was a loss of $(13.9) million | | GAAP Operating Expenses | $30.7 million | - | - | | Adjusted Operating Expenses | $16.2 million | - | - | [CEO's Strategic Commentary](index=1&type=section&id=CEO%27s%20Strategic%20Commentary) CEO Robert Piconi highlighted the company's progress in key growth areas, including Australian project construction, US regional expansion, and a $300 million preferred equity financing agreement with a leading infrastructure fund to support 1.5 GW of energy storage IPP projects under the "Asset Vault" platform, projected to generate over $100 million in annual recurring project-level EBITDA within 3-4 years - The company made progress on two energy storage projects in Australia and expanded regionally in the US with a new utility contract with Consumers Energy[2](index=2&type=chunk) - A **$300 million** preferred equity financing agreement was signed with a leading infrastructure fund to launch the "Asset Vault" platform, supporting the construction and operation of **1.5 GW** of owned energy storage IPP projects, projected to generate over **$100 million** in annual recurring project-level EBITDA within the next 3-4 years[1](index=1&type=chunk)[2](index=2&type=chunk) - The company successfully increased cash on its balance sheet by completing the second project financing for Cross Trails BESS, resulting in a **23% quarter-over-quarter increase** in cash balance at the end of Q2[2](index=2&type=chunk) [Operating and Other Recent Highlights](index=2&type=section&id=Operating%20and%20Other%20Recent%20Highlights) Energy Vault achieved several operational milestones in Q2 and recently, including the commissioning of its first owned and operated energy storage assets, the acquisition of the Stoney Creek BESS in Australia, and securing a battery energy storage system project with a major Michigan energy provider - Energy Vault's first two owned and operated energy storage assets (Cross Trails in Texas and Calistoga Resiliency Center in California) are now operational, expected to contribute approximately **$10 million** in annual recurring EBITDA[7](index=7&type=chunk) - Completed the acquisition of the Australia Stoney Creek Battery Energy Storage System (**125 MW / 1 GWh**), the largest project in the new Asset Vault portfolio, with construction expected to begin in early 2026 and completion in 2027, contributing approximately **$20 million** in annual recurring EBITDA upon completion[7](index=7&type=chunk) - Secured a contract with Michigan's largest energy provider for two battery energy storage systems totaling **75 MW / 300 MWh**, with battery deliveries expected to begin in Q4 2025, construction in Q1 2026, and commercial operation in Q4 2026[7](index=7&type=chunk) - The **57 MW / 114 MWh** Cross Trails Battery Energy Storage System (BESS) commenced commercial operation on May 31, 2025, under a 10-year Gridmatic offtake agreement, and **$17.8 million** in project financing was completed in July[7](index=7&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) The company anticipates FY2025 revenue between $200 million and $250 million and plans to increase total cash to $60 million to $75 million by the end of Q3, in addition to implementing an extra $6.5 million in annual operating expense reductions - Expected FY2025 revenue of **$200 million to $250 million** (within previous guidance range), reflecting US battery deliveries and project scheduling[7](index=7&type=chunk) - Target total cash of **$60 million to $75 million** by the end of Q3 2025, including **$18 million** from Cross Trails project financing completed in July and an anticipated **$27 million** net ITC benefit in September[7](index=7&type=chunk) - An additional **$6.5 million** in annual operating expense reductions were implemented in July to optimize long-term strategy, partially offset by strategic investments in Australia[7](index=7&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About Energy Vault](index=3&type=section&id=About%20Energy%20Vault) Energy Vault develops and deploys utility-scale energy storage solutions to advance sustainable energy storage, offering proprietary gravity, battery, and green hydrogen storage technologies supported by hardware-agnostic energy management software and an integrated platform - Energy Vault develops and deploys utility-scale energy storage solutions, including proprietary gravity, battery, and green hydrogen energy storage technologies[8](index=8&type=chunk) - All energy storage solutions are supported by the company's hardware-agnostic energy management system software and integrated platform[8](index=8&type=chunk) - The company provides customized short-duration and long-duration energy storage solutions designed to help utilities, independent power producers, and large industrial energy users significantly reduce levelized cost of energy while maintaining power reliability[8](index=8&type=chunk) - Energy Vault's gravity energy storage technology utilizes environmentally friendly materials and can integrate waste for beneficial reuse, promoting a circular economy and accelerating the global clean energy transition[8](index=8&type=chunk) [Financial Statements (GAAP)](index=5&type=section&id=Financial%20Statements%20%28GAAP%29) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Energy Vault's total assets increased to $248.8 million, up approximately 35% from year-end 2024, driven by increases in restricted cash, prepaid vendor advances, and property and equipment, while total liabilities significantly rose due to substantial growth in contract liabilities and long-term debt, leading to a decrease in shareholders' equity Condensed Consolidated Balance Sheets (Selected, in thousands USD): | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $21,416 | $27,091 | $(5,675) | | Restricted cash | $32,918 | $990 | $31,928 | | Prepaid vendor advances | $20,306 | $10,678 | $9,628 | | Total current assets | $94,895 | $68,905 | $25,990 | | Property and equipment, net | $120,875 | $99,493 | $21,382 | | **Total Assets** | **$248,828** | **$183,889** | **$64,939** | | **Liabilities** | | | | | Accounts payable | $35,834 | $20,250 | $15,584 | | Long-term debt, current portion | $23,107 | — | $23,107 | | Contract liabilities | $65,726 | $8,938 | $56,788 | | **Total current liabilities** | **$143,826** | **$54,655** | **$89,171** | | Long-term debt | $10,244 | — | $10,244 | | **Total Liabilities** | **$158,529** | **$57,633** | **$100,896** | | **Shareholders' Equity** | | | | | Accumulated deficit | $(439,885) | $(383,822) | $(56,063) | | **Total Shareholders' Equity** | **$90,299** | **$126,256** | **$(35,957)** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) In Q2 2025, Energy Vault's revenue grew 126% year-over-year to $8.5 million, with gross profit increasing 140% to $2.5 million and gross margin improving to 29.6%, yet net loss expanded to $34.9 million due to increased operating expenses, particularly in sales and marketing, R&D, and general and administrative costs Condensed Consolidated Statements of Operations and Comprehensive Loss (Selected, in thousands USD): | Item | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $8,512 | $3,770 | +126% | | Cost of sales | $5,996 | $2,721 | +120% | | **Gross Profit** | **$2,516** | **$1,049** | **+140%** | | Sales and marketing expenses | $3,161 | $4,861 | -35% | | Research and development expenses | $4,074 | $6,951 | -41% | | General and administrative expenses | $19,113 | $15,836 | +21% | | Provision for credit losses | $3,843 | $442 | +769% | | **Total Operating Expenses** | **$30,664** | **$28,934** | **+6%** | | Operating loss | $(28,148) | $(27,885) | +1% | | Interest expense | $(2,516) | $(38) | +6500% | | Interest income | $312 | $1,746 | -82% | | **Net Loss** | **$(34,932)** | **$(26,199)** | **+33%** | | Net loss per share (basic and diluted) | $(0.22) | $(0.18) | +22% | | Weighted-average shares outstanding | 156,911 | 149,143 | +5% | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Energy Vault's cash flow from operating activities turned into a net inflow of $12.6 million, compared to a net outflow in the prior year, while cash outflow from investing activities slightly decreased, and cash flow from financing activities significantly increased to $32.1 million, primarily due to proceeds from debt financing, bringing total cash, cash equivalents, and restricted cash to $58.1 million at period-end Condensed Consolidated Statements of Cash Flows (Selected, in thousands USD): | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Cash Flow from Operating Activities** | | | | | Net loss | $(56,106) | $(47,338) | $(8,768) | | Stock-based compensation expense | $18,260 | $19,188 | $(928) | | Changes in operating assets | $(10,072) | $75,161 | $(85,233) | | Changes in operating liabilities | $52,493 | $(59,696) | $112,189) | | **Net Cash Flow from Operating Activities** | **$12,629** | **$(11,846)** | **$24,475** | | **Cash Flow from Investing Activities** | | | | | Purchases of property and equipment | $(15,194) | $(21,051) | $5,857 | | **Net Cash Flow from Investing Activities** | **$(17,336)** | **$(20,832)** | **$3,496** | | **Cash Flow from Financing Activities** | | | | | Proceeds from debt financing | $63,794 | — | $63,794 | | Repayments of debt | $(27,826) | — | $(27,826) | | **Net Cash Flow from Financing Activities** | **$32,140** | **$360** | **$31,780** | | Effect of exchange rate changes | $593 | $(286) | $879 | | **Net increase (decrease) in cash, cash equivalents, and restricted cash** | **$28,026** | **$(32,604)** | **$60,630** | | Cash, cash equivalents, and restricted cash at period end | $58,099 | $112,951 | $(54,852) | | Cash and cash equivalents at period end | $21,416 | $106,835 | $(85,419) | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP Adjustments and Reconciliations](index=9&type=section&id=Non-GAAP%20Adjustments%20and%20Reconciliations) Energy Vault provides non-GAAP financial measures such as Adjusted Sales and Marketing, R&D, General and Administrative expenses, Operating Expenses, Net Loss, and EBITDA to supplement GAAP data, aiming to offer investors a clearer view of ongoing operational performance by excluding non-recurring or non-cash items - The company uses non-GAAP financial measures such as Adjusted S&M, R&D, G&A expenses, Adjusted Operating Expenses, Adjusted Net Loss, and Adjusted EBITDA to supplement GAAP data and assist analysts and investors in evaluating ongoing operational performance[23](index=23&type=chunk) - Non-GAAP adjustments primarily involve the exclusion of stock-based compensation expense, restructuring charges, provision for credit losses, loss on extinguishment of debt, equity purchase agreement related costs, foreign currency losses, and impairment and loss on sale of long-lived assets[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) Adjusted Operating Expenses Reconciliation (in thousands USD): | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating expenses (GAAP) | $30,664 | $28,934 | | Less: Depreciation and amortization | $(473) | $(279) | | Less: Stock-based compensation expense | $(8,984) | $(9,504) | | Less: Restructuring charges | $(1,162) | $(1,709) | | Less: Provision for credit losses | $(3,843) | $(441) | | Less: Impairment and loss on sale of long-lived assets | — | $(565) | | **Adjusted Operating Expenses (Non-GAAP)** | **$16,202** | **$16,436** | Adjusted Net Loss and EBITDA Reconciliation (in thousands USD): | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss attributable to Energy Vault Holdings, Inc. (GAAP) | $(34,927) | $(26,188) | | Add: Interest expense | $2,516 | $38 | | Less: Interest income | $(312) | $(1,746) | | Add: Provision for income taxes | $2,073 | — | | Add: Depreciation and amortization | $473 | $279 | | Add: Stock-based compensation expense | $8,984 | $9,504 | | Add: Restructuring charges | $1,162 | $1,709 | | Add: Provision for credit losses | $3,843 | $441 | | Add: Loss on extinguishment of debt | $1,412 | — | | Add: Equity purchase agreement related costs | $906 | — | | Add: Foreign currency loss | $216 | $47 | | Add: Impairment and loss on sale of long-lived assets | — | $565 | | Less: Gain on derecognition of contract liabilities | — | — | | **Adjusted EBITDA (Non-GAAP)** | **$(13,654)** | **$(15,351)** | [Supplemental Information](index=3&type=section&id=Supplemental%20Information) [Definitions of Key Metrics](index=3&type=section&id=Definitions%20of%20Key%20Metrics) Energy Vault provides definitions for "Developed pipeline" and "Backlog," which are internal management and industry-standard metrics used to assess potential growth and future revenue - "Developed pipeline" refers to unsigned potential revenue from third-party projects, including potential customers for which projects have been awarded or shortlisted, and projects where the company is in advanced negotiations to build, own, and operate energy storage systems[10](index=10&type=chunk) - "Backlog" represents signed but unrecognized revenue from third-party projects and services, unrecognized revenue from IP licensing agreements or other revenue, and unrecognized revenue from fee arrangements for projects operated by Energy Vault or its affiliates[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements reflecting the company's current views on future operations and financial performance, but these statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are based on the company's current expectations, plans, and assumptions, involving significant risks and uncertainties that could cause actual results, activity levels, performance, or achievements to differ materially from those expressed or implied by such statements[12](index=12&type=chunk)[13](index=13&type=chunk) - Risk factors include changes in strategy, expansion plans, customer opportunities, future operations, financial condition, projected revenues and losses, tax credit monetization, financing, project costs, brand and reputation, macroeconomic uncertainties, supply chain issues, and the impact of war or hostilities[13](index=13&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law, and advises investors not to place undue reliance on these statements[13](index=13&type=chunk) [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Energy Vault held a conference call on August 7, 2025, to discuss Q2 results, providing access to a webcast and telephone replay - Energy Vault held a conference call on August 7, 2025, at 4:30 PM ET to discuss Q2 results and provide a question-and-answer session[6](index=6&type=chunk) - A live webcast of the conference call is accessible at https://investors.energyvault.com/events-and-presentations/events, with a telephone replay service available until August 21, 2025[6](index=6&type=chunk) [Contacts](index=13&type=section&id=Contacts) Investor and media contact email addresses are provided - Investor contact email: energyvaultIR@icrinc.com[30](index=30&type=chunk) - Media contact email: media@energyvault.com[30](index=30&type=chunk)

Group 1 - Energy Vault Holdings, Inc. held its Q1 2025 earnings conference call on May 12, 2025, at 4:30 PM ET [1] - The call was hosted by Michael Beer, the CFO, who welcomed participants and outlined the agenda [2][3] - The earnings press release and presentation were made available on the company's Investor website, and a replay of the call will be accessible later [4] Group 2 - The conference call included a brief question and answer session following the formal presentation [1][3] - Participants were informed that the call was being recorded and that they should disconnect if they objected [4] - Forward-looking statements were mentioned, indicating that they are subject to risks and uncertainties, and actual results may differ from estimates [5]

Group 1: Earnings Performance - Energy Vault Holdings, Inc. reported a quarterly loss of $0.08 per share, better than the Zacks Consensus Estimate of a loss of $0.13, and an improvement from a loss of $0.14 per share a year ago, representing an earnings surprise of 38.46% [1] - The company posted revenues of $8.53 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 68.63%, but showing an increase from year-ago revenues of $7.76 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - Energy Vault shares have declined approximately 66.5% since the beginning of the year, contrasting with the S&P 500's decline of 3.8% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.11 on revenues of $37.7 million, and -$0.41 on revenues of $206.3 million for the current fiscal year [7] Group 3: Industry Context - The Alternative Energy - Other industry, to which Energy Vault belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Energy Vault is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6]

[Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note cautions on forward-looking statements, which involve risks and uncertainties that could materially alter actual results - The report contains forward-looking statements regarding future results, financial condition, business strategy, and the ability to meet NYSE listing requirements, involving known and unknown risks and uncertainties that could cause actual results to differ materially[11](index=11&type=chunk)[12](index=12&type=chunk) - Key forward-looking statements include changes in strategy, expansion plans, market acceptance of business model, brand development, industry developments, macroeconomic uncertainty, investment in development projects, supply chain diversification, intellectual property protection, future capital requirements, international operations, and the expectation of revenue generation from first two-owned projects in **2025**[13](index=13&type=chunk) - Investors are cautioned not to unduly rely on these statements, as they are based on current expectations and projections, and actual results may vary due to competitive and rapidly changing environments, new risks, and evolving ESG standards and expectations[12](index=12&type=chunk)[15](index=15&type=chunk) [Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) This part presents the company's financial statements and management's analysis of its financial performance and condition [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :------- | :------- | | **Assets** | | | | | | Cash and cash equivalents | $17,822 | $27,091 | $(9,269) | -34.2% | | Restricted cash, current portion | $27,308 | $990 | $26,318 | 2658.4% | | Total current assets | $74,357 | $68,905 | $5,452 | 7.9% | | Property and equipment, net | $125,604 | $99,493 | $26,111 | 26.2% | | Total Assets | $217,441 | $183,889 | $33,552 | 18.3% | | **Liabilities & Equity** | | | | | | Total current liabilities | $86,247 | $54,655 | $31,592 | 57.8% | | Long-term debt | $12,888 | $— | $12,888 | N/A | | Total liabilities | $102,528 | $57,633 | $44,895 | 77.9% | | Total stockholders' equity | $114,913 | $126,256 | $(11,343) | -9.0% | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the company's financial performance over specific periods, detailing revenues, expenses, and net loss Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Revenue | $8,534 | $7,759 | $775 | 10.0% | | Cost of revenue | $3,658 | $5,691 | $(2,033) | -35.7% | | Gross profit | $4,876 | $2,068 | $2,808 | 135.8% | | Total operating expenses | $25,769 | $26,695 | $(926) | -3.5% | | Loss from operations | $(20,893) | $(24,627) | $3,734 | -15.2% | | Net loss | $(21,174) | $(21,139) | $(35) | 0.2% | | Net loss attributable to Energy Vault Holdings, Inc. | $(21,136) | $(21,139) | $3 | 0.0% | | Net loss per share — basic and diluted | $(0.14) | $(0.14) | $0.00 | 0.0% | [Condensed Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :---------------- | :------- | | Common Stock Shares Outstanding | 154,243 | 153,206 | 1,037 | | Additional Paid-In Capital | $521,322 | $512,022 | $9,300 | | Accumulated Deficit | $(404,958) | $(383,822) | $(21,136) | | Total Stockholders' Equity | $114,913 | $126,256 | $(11,343) | - Stock-based compensation for the three months ended March 31, 2025, was **$9.276 million**, contributing to the increase in additional paid-in capital[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Net cash (used in) provided by operating activities | $(2,730) | $947 | $(3,677) | | Net cash used in investing activities | $(7,313) | $(8,768) | $1,455 | | Net cash provided by (used in) financing activities | $27,060 | $(678) | $27,738 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $17,082 | $(8,771) | $25,853 | | Cash and cash equivalents - end of period | $17,822 | $135,773 | $(117,951) | - The significant increase in cash provided by financing activities in **Q1 2025** was primarily due to **$26.8 million** in net proceeds from the CRC Bridge loan and **$1.5 million** from insurance premium financings[214](index=214&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details on the company's business, significant accounting policies, financial instrument details, and commitments [Note 1. Organization and Description of Business](index=11&type=section&id=NOTE%201.%20ORGANIZATION%20AND%20DESCRIPTION%20OF%20BUSINESS) This note describes Energy Vault's business, its technology portfolio, and its strategic transition to asset ownership - Energy Vault provides a diverse technology portfolio of turnkey energy storage platforms, including proprietary gravity, battery, and green hydrogen technologies, supported by its technology-agnostic energy management system software[29](index=29&type=chunk) - In **2024**, the Company began a multi-year transition from solely providing technology to third parties (build-and-transfer or licensing) to also taking an ownership interest in energy storage assets in select markets[29](index=29&type=chunk) - The Company's mission is to provide energy storage solutions to accelerate the global transition to renewable energy, focusing on helping utilities, independent power producers, and large industrial users reduce energy costs and maintain reliability[30](index=30&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and estimates used in preparing the financial statements, including consolidation, GAAP compliance, and going concern considerations - The financial statements are prepared in accordance with GAAP and SEC rules for interim reporting, reflecting all necessary adjustments for fair presentation[31](index=31&type=chunk)[32](index=32&type=chunk) - The Company includes its wholly-owned subsidiaries and a majority-owned subsidiary in its consolidated financial statements, eliminating all intercompany balances and transactions[33](index=33&type=chunk) - As an emerging growth company, Energy Vault has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[35](index=35&type=chunk)[37](index=37&type=chunk) - The Company has incurred significant net losses and used substantial cash since inception, with accumulated deficits of **$405.0 million** as of March 31, 2025, though management believes current cash and planned actions will fund operations for at least the next **twelve months**[40](index=40&type=chunk)[42](index=42&type=chunk) - One customer accounted for **100%** of accounts receivable and customer financing receivable as of March 31, 2025 and December 31, 2024, while revenue from two customers accounted for **55%** and **38%** of total revenue for the three months ended March 31, 2025[47](index=47&type=chunk) [Note 3. Revenue Recognition](index=13&type=section&id=NOTE%203.%20REVENUE%20RECOGNITION) This note details the company's policies for recognizing revenue across various product and service categories Revenue by Product and Service Categories (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sale of energy storage products | $4,891 | $7,725 | | Operation and maintenance services | $276 | $— | | Software licensing | $112 | $— | | Intellectual property ("IP") licensing | $3,255 | $— | | Other | $— | $34 | | Total revenue | $8,534 | $7,759 | - As of March 31, 2025, remaining performance obligations totaled **$127.6 million**, with approximately **97%** expected to be recognized as revenue over the next **12 months**[50](index=50&type=chunk) - Contract liabilities (deferred revenue) increased from **$8.938 million** at December 31, 2024, to **$10.585 million** at March 31, 2025, with **$5.2 million** recognized as revenue in **Q1 2025** from prior period balances[52](index=52&type=chunk)[54](index=54&type=chunk) [Note 4. Allowance for Credit Losses](index=14&type=section&id=NOTE%204.%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) This note explains the methodology and activity related to the allowance for credit losses on receivables Allowance for Credit Losses Activity (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Allowance for credit losses, beginning of period | $32,238 | $2,514 | | Provision (benefit) for credit losses | $(11) | $(89) | | Allowance for credit losses, end of period | $32,227 | $2,425 | - The Company uses a probability-of-default (PD) and loss-given-default (LGD) methodology, based on Moody's historical rates for corporate bonds, to calculate the allowance for credit losses[57](index=57&type=chunk) - The customer financing receivable of **$11.5 million** was placed on non-accrual status effective December 31, 2024, due to past-due installment payments[58](index=58&type=chunk) [Note 5. Fair Value Measurements](index=15&type=section&id=NOTE%205.%20FAIR%20VALUE%20MEASUREMENTS) This note describes how the company measures assets and liabilities at fair value, categorizing them by input observability - The Company categorizes assets and liabilities measured at fair value into Level 1, Level 2, or Level 3 based on the observability of inputs[59](index=59&type=chunk)[62](index=62&type=chunk) - Warrant liabilities are classified as Level 3, with their fair value determined using a Black-Scholes model due to not being publicly traded[59](index=59&type=chunk) [Note 6. Related Party Transactions](index=15&type=section&id=NOTE%206.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with parties considered to be related to the company - The Company paid **$0.3 million** in marketing and sales costs to a company owned by an immediate family member of an officer for the three months ended March 31, 2025[60](index=60&type=chunk) [Note 7. Investments](index=15&type=section&id=NOTE%207.%20INVESTMENTS) This note provides details on the company's investments, including equity securities and various notes receivable Investments (in thousands) | Investment Type | March 31, 2025 (Current) | March 31, 2025 (Long-Term) | December 31, 2024 (Current) | December 31, 2024 (Long-Term) | | :-------------------------------- | :------------------------- | :------------------------- | :-------------------------- | :-------------------------- | | Investment in equity securities | $— | $3,270 | $— | $3,270 | | Convertible note receivable | $2,725 | $— | $2,622 | $— | | Other note receivable | $608 | $213 | $311 | $— | | Total | $3,333 | $3,483 | $2,933 | $3,270 | - The Company holds equity securities in KORE Power, Inc. at a cost basis of **$15.0 million**, with cumulative impairment of **$11.7 million** as of March 31, 2025[64](index=64&type=chunk) - The Company has a convertible promissory note with DG Fuels, LLC totaling **$3.0 million**, bearing **10.0%** annual interest, maturing in **October 2025**, with no expectation to exercise the conversion option[65](index=65&type=chunk)[66](index=66&type=chunk) - The Company loaned Stoney Creek BESS Pty Ltd AUD **0.5 million** (Tranche 1) and an additional AUD **0.5 million** (Tranche 3) at **8.0%** interest, and agreed to provide a bank guarantee of AUD **2.5 million** (Tranche 2) and up to AUD **7.8 million** (Tranche 4) for project costs[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - On March 17, 2025, the Company entered into an agreement to acquire Stoney Creek for a **nominal price**, pending regulatory approval in Australia[71](index=71&type=chunk) [Note 8. Property and Equipment, Net](index=17&type=section&id=NOTE%208.%20PROPERTY%20AND%20EQUIPMENT,%20NET) This note provides a breakdown of the company's property and equipment, including construction in progress and accumulated depreciation Property and Equipment, Net (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Construction in progress | $114,815 | $88,669 | | Total property and equipment | $129,556 | $102,844 | | Less: accumulated depreciation and amortization | $(3,952) | $(3,351) | | Property and equipment, net | $125,604 | $99,493 | - The increase in construction in progress primarily relates to the Calistoga Resiliency Center hybrid energy storage system, the Cross Trails BESS, and the Snyder CDU[73](index=73&type=chunk) [Note 9. Intangible Assets, Net](index=17&type=section&id=NOTE%209.%20INTANGIBLE%20ASSETS,%20NET) This note details the company's intangible assets, primarily capitalized software, and related amortization Intangible Assets, Net (in thousands) | Category | March 31, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :-------------------------------- | :----------------------------------- | :------------------------------------ | | Capitalized software to be sold | $5,131 | $4,538 | - Amortization expense for capitalized software was **$0.2 million** for the three months ended March 31, 2025, with an estimated useful life of **five years**[75](index=75&type=chunk) [Note 10. Debt](index=18&type=section&id=NOTE%2010.%20DEBT) This note outlines the company's debt obligations, including bridge loans, senior notes, and interest expense details - On March 31, 2025, CRC entered into a **$27.8 million** CRC Bridge Loan at **9.5%** interest, which was refinanced on April 4, 2025, by **$27.8 million** CRC Senior Notes[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - The CRC Senior Notes bear interest at **12.5%** until **December 31, 2025** (or receipt of tax credit transfer proceeds), then **9.5%**, with the first principal payment of **$12.9 million** due **August 31, 2025**, and maturity on **April 4, 2032**[81](index=81&type=chunk)[82](index=82&type=chunk) Interest Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Contractual interest expense | $18 | $4 | | Amortization of debt issuance costs | $43 | $— | | Amortization of debt discount | $31 | $— | | Interest expense on finance leases | $3 | $4 | | Total | $95 | $8 | [Note 11. Supplemental Balance Sheets Detail](index=20&type=section&id=NOTE%2011.%20SUPPLEMENTAL%20BALANCE%20SHEETS%20DETAIL) This note provides additional details for selected balance sheet accounts, including prepaid expenses, accrued expenses, and other liabilities Selected Supplemental Balance Sheet Details (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Prepaid expenses | $5,132 | $3,423 | | Interest receivable | $925 | $850 | | Professional fees (Accrued expenses) | $10,267 | $8,373 | | Insurance premium financings (Accrued expenses) | $1,621 | $724 | | Customer deposits (Other current liabilities) | $15,001 | $— | | Operating leases (Other long-term liabilities) | $1,699 | $785 | [Note 12. Stock-Based Compensation](index=20&type=section&id=NOTE%2012.%20STOCK-BASED%20COMPENSATION) This note details the company's equity incentive plans, stock option and RSU activity, and total stock-based compensation expense - The Company has three equity incentive plans: the 2022 Incentive Plan (approx. **15.5 million shares** + annual increase), the 2022 Inducement Plan (**8.0 million shares**), and the 2025 Inducement Plan (**8.0 million shares**, approved **Feb 2025**), all for granting stock options, SARs, restricted stock, and RSUs[93](index=93&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) Stock Option Activity (in thousands, except per share data) | Metric | December 31, 2024 | March 31, 2025 | | :-------------------------------- | :---------------- | :------------- | | Options Outstanding | 6,429 | 6,429 | | Weighted Average Exercise Price Per Share | $1.62 | $1.62 | | Options exercisable | 2,342 | 2,342 | | Unrecognized stock-based compensation expense | $3.1 million | $3.1 million | | Weighted-average period for recognition | 1.6 years | 1.6 years | Restricted Stock Units (RSUs) Activity (in thousands, except per share data) | Metric | December 31, 2024 | March 31, 2025 | | :-------------------------------- | :---------------- | :------------- | | Nonvested balance | 22,325 | 25,662 | | RSUs granted | N/A | 7,070 | | RSUs vested | N/A | (3,617) | | Weighted Average Grant Date Fair Value per Share (Nonvested) | $2.83 | $2.28 | | Unrecognized stock-based compensation expense | $43.1 million | $43.1 million | | Weighted-average vesting period | 1.7 years | 1.7 years | Total Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sales and marketing | $1,045 | $1,715 | | Research and development | $1,368 | $2,227 | | General and administrative | $6,863 | $5,742 | | Total stock-based compensation expense | $9,276 | $9,684 | [Note 13. Segment Reporting](index=22&type=section&id=NOTE%2013.%20SEGMENT%20REPORTING) This note clarifies that the company operates as a single reportable segment, with consolidated results reviewed by the CEO - The Company operates as a single reportable segment, with the CEO reviewing consolidated operating results to make decisions and assess performance[103](index=103&type=chunk) Consolidated Segment Revenue and Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $8,534 | $7,759 | | Cost of revenue | $3,658 | $5,691 | | Gross profit | $4,876 | $2,068 | | Non-personnel operating costs | $7,290 | $8,012 | | Salaries and wages | $8,909 | $8,792 | | Stock-based compensation | $9,276 | $9,684 | | Net loss | $(21,174) | $(21,139) | [Note 14. Income Taxes](index=23&type=section&id=NOTE%2014.%20INCOME%20TAXES) This note discusses the company's income tax provision and the valuation allowance recorded against deferred tax assets - The Company recognized a tax provision of **$0.4 million** for the three months ended March 31, 2025, compared to no provision in the prior-year period[106](index=106&type=chunk) - A valuation allowance has been recorded against substantially all net deferred tax assets due to the Company's history of losses, indicating it is not more likely than not that these assets will be realized[106](index=106&type=chunk) [Note 15. Net Loss Per Share of Common Stock](index=23&type=section&id=NOTE%2015.%20NET%20LOSS%20PER%20SHARE%20OF%20COMMON%20STOCK) This note presents the calculation of basic and diluted net loss per share, including the impact of potentially dilutive securities Net Loss Per Share (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Energy Vault Holdings, Inc. | $(21,136) | $(21,139) | | Weighted-average shares outstanding – basic and diluted | 153,723 | 147,019 | | Net loss per share – basic and diluted | $(0.14) | $(0.14) | - Due to net losses, potentially dilutive securities (private warrants, stock options, RSUs, and Earn-Out Shares) were **anti-dilutive** and excluded from the diluted EPS calculation[109](index=109&type=chunk) - The contingent right for **9.0 million Earn-Out Shares** expired on **May 12, 2025**, as the triggering events were not satisfied[110](index=110&type=chunk) [Note 16. Commitments and Contingencies](index=24&type=section&id=NOTE%2016.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's principal commitments, warranty liabilities, various bonds, and tax credit transfer agreements - Principal commitments as of March 31, 2025, included operating leases, finance leases, a deferred pension, warranty liabilities, and **$7.6 million** in non-cancelable purchase obligations[111](index=111&type=chunk) - The Company provides limited warranties for BESS customers, with estimated warranty liabilities of **$0.761 million** as of March 31, 2025, down from **$1.391 million** at the beginning of the period[113](index=113&type=chunk)[114](index=114&type=chunk) - As of March 31, 2025, the Company had **$14.5 million** in outstanding letters of credit, **$2.0 million** in bank guarantees, **$110.3 million** in performance and payment bonds, and **$20.5 million** in other bonds[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - On March 28, 2025, the Company committed to sell approximately **$39.9 million** (net of fees) in Investment Tax Credits (ITCs) generated by its Calistoga, Cross Trails, and Snyder projects, anticipated to be placed in service in **2025**[120](index=120&type=chunk) [Note 17. Subsequent Events](index=25&type=section&id=NOTE%2017.%20SUBSEQUENT%20EVENTS) This note discloses significant events that occurred after the balance sheet date, including a NYSE non-compliance notification and a new bridge loan - On April 16, 2025, the Company received a NYSE notification for non-compliance with the minimum **$1.00** average closing price rule over **30 trading days**, with a **six-month period** to regain compliance[121](index=121&type=chunk) - On May 12, 2025, the Company entered into a **$10.0 million** Cross Trails Bridge Loan with Crescent Cove, bearing **24%** annual interest and maturing on **July 13, 2025**, secured by U.S. assets (excluding Calistoga hybrid energy system)[123](index=123&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Energy Vault's financial condition and results of operations, including business overview, key factors, recent developments, operating metrics, and non-GAAP reconciliations [Our Business](index=27&type=section&id=Our%20Business) This section provides an overview of Energy Vault's diverse energy storage technology portfolio and its strategic shift towards asset ownership - Energy Vault offers a diverse portfolio of turnkey energy storage platforms, including gravity, battery, and green hydrogen technologies, integrated with its energy management system software[126](index=126&type=chunk) - The Company is transitioning from a build-and-transfer or licensing model to also taking ownership interests in energy storage assets in attractive markets, leveraging its experience and proprietary technologies[126](index=126&type=chunk) [Key Factors and Trends Affecting our Business](index=27&type=section&id=Key%20Factors%20and%20Trends%20Affecting%20our%20Business) This section discusses significant external and internal factors influencing the company's performance, such as tariffs, industry growth, tax incentives, and competition - New U.S. tariffs on Chinese lithium-ion batteries, totaling approximately **155.9%**, have materially affected operations, causing delays or cancellations in third-party sales projects for B-Vault products[129](index=129&type=chunk)[130](index=130&type=chunk) - The utility-scale energy storage industry is rapidly growing due to increased electricity demand (driven by data centers, AI, EVs), global renewable energy transition, and focus on grid resilience[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - The Inflation Reduction Act (IRA) of **2022** provides significant tax incentives for energy storage, including Investment Tax Credits (ITCs) for standalone projects and bonus credits for energy communities, domestic content, and low-income areas, which the Company believes it is positioned to benefit from[146](index=146&type=chunk)[147](index=147&type=chunk) - The Company faces competition from new and existing energy storage solution providers and software manufacturers, and its market share could decline if it cannot compete effectively[141](index=141&type=chunk) - Higher inflation rates in recent years could increase expenses and product costs, potentially impacting competitiveness if not offset by price increases[142](index=142&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) This section highlights significant recent events, including project acquisitions, licensing agreements, and NYSE compliance notifications - Between **October 2024** and **March 2025**, the Company loaned Stoney Creek BESS Pty Ltd up to AUD **8.8 million** for project development and agreed to provide a bank guarantee of AUD **2.5 million**, and on **March 17, 2025**, the Company entered into an agreement to acquire Stoney Creek[148](index=148&type=chunk) - On March 31, 2025, the Company signed a license and royalty agreement with an Indian infrastructure development company to accelerate manufacturing and deployment of its B-Vault BESS technology and VaultOS EMS software in India[149](index=149&type=chunk) - On April 16, 2025, the NYSE notified the Company of non-compliance with its minimum stock price listing requirement (**$1.00** average over **30 trading days**), granting a **six-month period** to regain compliance[150](index=150&type=chunk) [Key Operating Metrics](index=30&type=section&id=Key%20Operating%20Metrics) This section presents key performance indicators such as new bookings, developed pipeline, and backlog, providing insight into future revenue potential Key Operating Metrics (in thousands, except MWh) | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------------- | :------------- | :------------- | | New bookings ($) | $225,729 | $— | | Net bookings ($) | $225,729 | $— | | New bookings (MWh) | 1,004 | — | | Net bookings (MWh) | 1,004 | — | | Developed Pipeline ($) | $2,131,300 | $2,085,908 | | Developed Pipeline (MWh) | 8,797 | 9,194 | | Backlog ($) | $648,043 | $433,886 | | Backlog (MWh) | 2,577 | 1,574 | - Net bookings represent the total aggregate contract value and MWhs from customer contracts signed during the period, net of cancellations, including probable future variable payments from tolling and offtake arrangements[152](index=152&type=chunk) - Developed pipeline indicates uncontracted potential revenue from third-party projects and potential tolling revenue from projects in advanced negotiations, serving as an internal management metric for anticipated growth[154](index=154&type=chunk) - Backlog represents contracted but unrecognized revenue from projects, services, and IP licensing agreements, including probable future variable payments from tolling arrangements[156](index=156&type=chunk) [Key Components of Results of Operations](index=31&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section explains the primary drivers of revenue, cost of revenue, gross profit, and operating expenses - Revenue is generated from the sale of energy storage products (EPC and EEQ models), software and IP licensing, and long-term operation and maintenance services, with future revenue expected from tolling arrangements for owned systems[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Cost of revenue primarily includes product costs (equipment, tariffs, shipping), materials, subcontractors, direct labor, and product warranties, influenced by underlying costs of components like batteries and inverters[164](index=164&type=chunk)[165](index=165&type=chunk) - Gross profit and gross profit margin fluctuate due to the timing of transferring control of uninstalled equipment in EPC projects (lower margins initially, higher in later stages) and changes in sales volume, product prices, costs, and mix[166](index=166&type=chunk)[167](index=167&type=chunk) - Operating expenses include Sales and Marketing (personnel, professional fees, promotional), Research and Development (materials, testing, labor, consulting), General and Administrative (IT, legal, professional fees, corporate personnel), Benefit for Credit Losses, and Depreciation and Amortization[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20operations) This section provides a detailed analysis of the company's financial performance, comparing current and prior period results across key income statement line items Consolidated Results of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Revenue | $8,534 | $7,759 | $775 | 10.0% | | Cost of revenue | $3,658 | $5,691 | $(2,033) | -35.7% | | Gross profit | $4,876 | $2,068 | $2,808 | 135.8% | | Sales and marketing | $4,145 | $4,170 | $(25) | -0.6% | | Research and development | $3,824 | $6,966 | $(3,142) | -45.1% | | General and administrative | $17,506 | $15,353 | $2,153 | 14.0% | | Loss from operations | $(20,893) | $(24,627) | $3,734 | -15.2% | | Interest income | $315 | $1,826 | $(1,511) | -82.7% | | Other income (expense), net | $(118) | $1,670 | $(1,788) | -107.1% | | Loss before income taxes | $(20,791) | $(21,139) | $348 | -1.6% | - Revenue increased by **$0.8 million** (**10.0%**) driven by **$3.6 million** from new IP licensing, operation and maintenance, and software licensing, partially offset by a **$2.8 million** decline in energy product storage sales[175](index=175&type=chunk) - Gross profit improved significantly by **135.8%** to **$4.9 million**, with gross margin increasing to **57.1%** from **26.7%**, primarily due to IP licensing revenue having no associated cost of sales[178](index=178&type=chunk) - R&D expenses decreased by **$3.1 million** (**45.1%**) due to reductions in personnel-related expenses, software expenses, and engineering costs, reflecting cost-control measures[180](index=180&type=chunk) - G&A expenses increased by **$2.2 million** (**14.0%**) due to higher G&A headcount and retention bonuses[181](index=181&type=chunk) - Interest income decreased by **$1.5 million** (**82.7%**) due to lower average cash balances, and other income (expense), net, decreased by **$1.8 million** due to a non-recurring gain in **Q1 2024**[184](index=184&type=chunk)[185](index=185&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations, including cash position, funding sources, and capital raising activities - The Company's liquidity is supported by a sales backlog of **$648.0 million** as of March 31, 2025, a developed pipeline, and bonding capacity exceeding **$1.0 billion**[187](index=187&type=chunk)[188](index=188&type=chunk) - Management believes current cash, cash equivalents, and restricted cash, along with subsequent events, will be sufficient to fund operating activities for at least the next **twelve months**[192](index=192&type=chunk) - The Company may raise additional capital through equity and/or debt financings, including preferred equity for project-specific financing vehicles, which are expected to be non-dilutive to common stockholders[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - On March 28, 2025, the Company entered into a Tax Credit Transfer Commitment to sell approximately **$39.9 million** in ITCs from projects anticipated to be placed in service in **2025**[194](index=194&type=chunk) - The Company has an 'at-the-market' equity offering program for up to **$50.0 million** and an Equity Purchase Agreement with an investor to sell up to **$25.0 million** of common stock[195](index=195&type=chunk)[196](index=196&type=chunk) Cash, Cash Equivalents, and Restricted Cash (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $17,822 | $27,091 | | Restricted cash | $29,333 | $2,982 | | Total cash, cash equivalents, and restricted cash | $47,155 | $30,073 | Cash Flows Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(2,730) | $947 | | Net cash used in investing activities | $(7,313) | $(8,768) | | Net cash provided by (used in) financing activities | $27,060 | $(678) | | Net increase (decrease) in cash | $17,082 | $(8,771) | [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures, including adjusted operating expenses, net loss, and EBITDA, to provide additional insights into the company's performance - The Company uses non-GAAP financial measures, including adjusted S&M, R&D, G&A expenses, adjusted operating expenses, adjusted net loss, and adjusted EBITDA, to complement GAAP measures and provide insights into ongoing operations[215](index=215&type=chunk) Non-GAAP Adjusted Operating Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Operating expenses (GAAP) | $25,769 | $26,695 | | Stock-based compensation expense | $(9,276) | $(9,684) | | Depreciation and amortization | $(305) | $(295) | | Benefit for credit losses | $11 | $88 | | Adjusted operating expenses (non-GAAP) | $16,199 | $16,804 | Non-GAAP Adjusted Net Loss (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Energy Vault Holdings, Inc. (GAAP) | $(21,136) | $(21,139) | | Stock-based compensation expense | $9,276 | $9,684 | | Gain on derecognition of contract liability | $— | $(1,500) | | Benefit for credit losses | $(11) | $(88) | | Foreign exchange losses | $133 | $60 | | Adjusted net loss (non-GAAP) | $(11,738) | $(12,983) | Non-GAAP Adjusted EBITDA (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Energy Vault Holdings, Inc. (GAAP) | $(21,136) | $(21,139) | | Interest income, net | $(220) | $(1,818) | | Provision for income taxes | $383 | $— | | Depreciation and amortization | $305 | $295 | | Stock-based compensation expense | $9,276 | $9,684 | | Gain on derecognition of contract liability | $— | $(1,500) | | Benefit for credit losses | $(11) | $(88) | | Foreign exchange losses | $133 | $60 | | Adjusted EBITDA (non-GAAP) | $(11,270) | $(14,506) | [Critical Accounting Estimates](index=40&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting policies and notes the company's election as an emerging growth company - There have been no material changes to the Company's critical accounting policies and estimates compared to those disclosed in the **2024** Annual Report on Form 10-K[222](index=222&type=chunk) - As an emerging growth company, Energy Vault has elected to take advantage of the extended transition period for new or revised financial accounting standards, which may impact comparability[223](index=223&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to various market risks, including foreign currency fluctuations, inflation, credit risk, and commodity price volatility, and their potential financial impact - The Company is exposed to foreign currency risk as some contracts and operating expenses are denominated in currencies other than the U.S. dollar, such as the Australian dollar, Euro, and Swiss franc, which could affect costs and revenue[226](index=226&type=chunk)[227](index=227&type=chunk) - Inflation risk could adversely impact operations through higher material, labor, and construction costs, which the Company may not be able to fully offset through price increases[228](index=228&type=chunk) - Credit risk arises from potential defaults by customers on contractual obligations, mitigated by credit policies, monitoring, and requiring milestone payments, letters of credit, or cash collateral[231](index=231&type=chunk) - Commodity price risk from fluctuating market prices of raw materials like cement, steel, aluminum, and lithium could reduce operating margins if suppliers increase component prices and these increases cannot be recovered from customers[233](index=233&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management, with the participation of the principal executive and financial officers, concluded that the Company's disclosure controls and procedures were **effective** at a reasonable assurance level as of **March 31, 2025**[235](index=235&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[236](index=236&type=chunk) [Part II - Other Information](index=42&type=section&id=Part%20II%20-%20Other%20Information) This part covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, but management believes that unfavorable outcomes would not individually or in aggregate have a material adverse effect on its business, financial condition, and results of operations - The Company is regularly subject to various legal proceedings in the ordinary course of business[237](index=237&type=chunk) - Management believes that an unfavorable outcome for identified legal matters is **not probable**, and therefore, no reserve has been established[237](index=237&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section highlights a material change to the Company's risk factors, specifically regarding its non-compliance with NYSE listing standards due to its stock price falling below the minimum requirement, which could impact its ability to maintain an active trading market - On April 16, 2025, the Company was notified by the NYSE of non-compliance with Rule 802.01C, as its common stock's average closing price was less than **$1.00** over a **30-trading-day period**[239](index=239&type=chunk) - Failure to regain compliance within the **six-month cure period** could lead to delisting, making it difficult for security holders to sell shares and potentially impairing the Company's ability to raise capital and motivate employees[239](index=239&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[240](index=240&type=chunk) [Item 3. Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None[241](index=241&type=chunk) [Item 4. Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[242](index=242&type=chunk) [Item 5. Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section confirms no disclosure in lieu of Form 8-K, no material changes to board nominee recommendation procedures, and no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the quarter - No disclosure in lieu of reporting on a Current Report on Form 8-K[243](index=243&type=chunk) - No material changes to the procedures by which security holders may recommend nominees to the board of directors[244](index=244&type=chunk) - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended March 31, 2025[245](index=245&type=chunk) [Item 6. Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, equity incentive plans, debt agreements, equity purchase agreements, certifications, and XBRL interactive data files - Key exhibits include the **2025** Employment Inducement Award Plan, Note Purchase Agreement with Eagle Point Credit Management, LLC, Equity Purchase Agreement with Hudson Global Ventures, LLC, and Credit Agreement with Crescent Cove Opportunity Lending, LLC[247](index=247&type=chunk) - Certifications of the Principal Executive Officer and Chief Financial Officer are included under Rules 13a-14(a) and 15d-14(a) of the Exchange Act and pursuant to **18 U.S.C. Section 1350**[247](index=247&type=chunk) - XBRL Instance Document and Taxonomy Extension Documents are also filed[247](index=247&type=chunk) [Signatures](index=45&type=section&id=Signatures) This section provides the official signatures of the company's principal executive and financial officers, certifying the report's submission - The report was signed on **May 12, 2025**, by Robert Piconi, Chairman of the Board and Chief Executive Officer, and Michael Beer, Chief Financial Officer[252](index=252&type=chunk)

Financial Data and Key Metrics Changes - The company reported a revenue increase of 10% year over year, reaching $8.5 million, driven by projects in Australia and a new licensing agreement in India [10][28] - Gross margin improved significantly to 57.1%, up from 26.7% a year ago, attributed to a favorable revenue mix from the India license agreement [11][28] - Adjusted EBITDA loss narrowed to $11.3 million from $14.5 million year over year, reflecting improved gross margins and reduced operating costs [15][29] - Cash increased by 57% quarter over quarter, from $30 million to $47 million, with expectations to reach $50 million to $60 million by the end of Q2 [12][30] Business Line Data and Key Metrics Changes - The backlog increased by 49% year to date, totaling $648 million, with significant contributions from projects in the US and Australia [25][27] - The company has 2.6 gigawatt hours of projects in Australia either contracted or under agreement, with additional projects under construction [25][26] - The energy asset management business is progressing with seven projects, expected to generate approximately $30 million in annual recurring EBITDA over the next fifteen years [18][31] Market Data and Key Metrics Changes - The company is largely shielded from US tariff risks due to a strong presence in Australia and licensing agreements, with 90% of the backlog unaffected by tariffs [20][27] - The recent pause in US-China tariffs has reignited discussions for US battery deliveries, potentially leading to increased demand [19][20] Company Strategy and Development Direction - The company is focusing on expanding its energy storage solutions and build, own, and operate portfolio, with a strong emphasis on the Australian market [16][23] - The strategy includes optimizing infrastructure while ramping up investments in high-potential markets like Australia [16][31] - The company aims to achieve approximately $100 million in recurring annual EBITDA from its owned and operated projects [19][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market's response to the tariff pause, indicating potential for increased bookings and project deliveries [20][44] - The company maintains its revenue guidance for 2025, with over 80% of revenue already contracted [48][51] - Management highlighted the importance of geographic diversity and the ability to adapt to market changes, which positions the company well for future growth [23][27] Other Important Information - The company is in the process of project financing and ITC monetization for its Cross Trails project, expecting significant cash inflows in the coming quarters [30] - The first owned and operated asset, Cross Trails in Texas, is undergoing commissioning and is expected to begin commercial operations soon [14][30] Q&A Session Summary Question: Impact of tariffs on securing new bookings in the US market - Management noted that the tariff situation had caused a "wait and see" approach among developers, but the recent pause could lead to renewed contracting opportunities [41][44] Question: 2025 guidance and booked contracts - Over 80% of the revenue guidance is contracted, with expectations for additional bookings to be secured in light of the tariff pause [48][49] Question: Differentiators for India battery technology licensing - Management highlighted the growth potential in India, the flexibility of their technology, and their established track record as key differentiators [56][62] Question: Differences in project financing discussions - The company emphasized the importance of proven technology and long-term off-take agreements in securing favorable project financing [63][66]

Financial Data and Key Metrics Changes - The company reported a revenue increase of 10% year over year, reaching $8.5 million, driven by projects in Australia and a new licensing agreement in India [26][9] - Gross margin improved significantly to 57.1%, up from 26.7% a year ago, attributed to a favorable revenue mix from the India license agreement [26][9] - Adjusted EBITDA loss narrowed to $11.3 million from $14.5 million year over year, reflecting improved gross margins and reduced operating costs [27][13] Business Line Data and Key Metrics Changes - The backlog increased by 49% year to date, totaling $648 million, with significant contributions from projects in the US and Australia [23][24] - The company has 2.6 gigawatt hours of projects in Australia either contracted or under agreement, with additional projects under construction [23][29] - The energy asset management business is progressing with seven projects, expected to deliver approximately $30 million in annual recurring project EBITDA over their lifespan [29][15] Market Data and Key Metrics Changes - The company is largely shielded from US tariff risks due to a strong presence in Australia and licensing agreements, with 90% of the backlog unaffected by tariffs [24][18] - The recent pause in US-China tariffs has reignited discussions for US battery deliveries, potentially leading to increased demand [18][39] Company Strategy and Development Direction - The company is focusing on expanding its build, own, and operate strategy, with a strong pipeline of storage asset ownership projects in the US and Australia [29][21] - The company aims to achieve approximately $100 million in recurring annual EBITDA from its owned and operated projects over the long term [29][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased bookings and project deliveries following the tariff pause, indicating a return to a more normalized contracting environment [18][44] - The company is committed to reducing operating expenses by 15% to 25% while continuing to invest in profitable engagements, particularly in the Australian market [27][14] Other Important Information - Cash increased by 57% quarter over quarter, reaching $47.2 million, with expectations to further increase to $60 million to $75 million by Q3 [10][28] - The company is in the process of project financing and ITC monetization for its Cross Trails project, expecting significant proceeds from these activities [28][10] Q&A Session Summary Question: Impact of tariffs on securing new bookings in the US - Management noted that the tariff situation had caused a "wait and see" approach among developers, but the recent pause in tariffs could lead to renewed contracting opportunities [39][42] Question: Guidance for 2025 and booked revenue - Over 80% of the company's revenue for 2025 is contracted, with expectations for additional bookings to be secured in light of the tariff pause [46][47] Question: Differentiators for India battery technology licensing - The company highlighted growth potential in India, flexibility in its technology, and a strong track record with customers as key differentiators [53][56] Question: Differences in project financing discussions - Management explained that having proven technology and long-term off-take agreements significantly de-risks project financing, making discussions with lenders more favorable [62][63]

F I R S T Q U A R T E R 2 0 2 5 FINANCIAL RESULTS © 2024 ENERGY VAULT, ALL RIGHTS RESERVED | Confidential FOUO (For Official Use Only) - PROPRIETARY INFORMATION OF ENERGY VAULT, INC 1 Disclaimer Forward-Looking Statements This presentation includes forward-looking statements that reflect the Company's current views with respect to, among other things, the Company's operations and financial performance. Forward-looking statements include information concerning possible or assumed future results of operations ...

[Energy Vault First Quarter 2025 Financial Results](index=1&type=section&id=Energy%20Vault%20Reports%20First%20Quarter%202025%20Financial%20Results) [Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Energy Vault reported a 10% revenue increase to $8.5 million, with gross margin more than doubling to 57.1%, and contract backlog growing 49% to $648 million, while Adjusted EBITDA loss narrowed by 22% to $11.3 million Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 ($M) | Q1 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | Revenue | $8.5 | $7.8 | +10% | | GAAP Gross Margin | 57.1% | 26.7% | +30.4 p.p. | | Net Loss | ($21.1) | ($21.1) | Flat | | Adjusted EBITDA | ($11.3) | ($14.5) | +22% (Improved) | - Contract revenue backlog increased by **49%** year-to-date, reaching **$648 million**. Nearly **90%** of this backlog is shielded from U.S. tariff risks due to a strong Australian presence, license agreements, and asset ownership[1](index=1&type=chunk)[3](index=3&type=chunk) - Total cash (including restricted cash) increased by **57%** from year-end 2024 to **$47.2 million**, primarily due to proceeds from the Calistoga Resiliency Center (CRC) project financing[1](index=1&type=chunk)[3](index=3&type=chunk) - Key operational milestones include the completion and initial revenue generation of the Cross Trails project in Texas, a **10-year** licensing agreement in India with SPML Infra, and continued expansion in Australia with over **2.6 GWh** of projects in development[1](index=1&type=chunk)[2](index=2&type=chunk)[7](index=7&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Energy Vault targets a 15-25% reduction in quarterly adjusted operating expenses to $12-14 million, expects $45-50 million in Q2/Q3 cash from project financing and ITC sales, with potential upside from tariff resolution - The company is targeting a **15-25%** reduction in quarterly adjusted operating expenses, aiming for a new quarterly run rate of **$12-14 million**, down from **$16.2 million** in Q1 2025[1](index=1&type=chunk)[7](index=7&type=chunk) - An additional **~$45 million** is expected in Q2 and Q3 from the Cross Trails project financing (**~$20M**), its associated ITC sale (**~$12M**), and other ITC sales[1](index=1&type=chunk)[7](index=7&type=chunk) - The first three build-own-operate projects are expected to deliver approximately **$30 million** in annual, recurring project EBITDA over a **15-year-plus** life[1](index=1&type=chunk) - While current guidance is maintained, a positive resolution and timing of the China/U.S. tariff pause could create potential revenue upside from accelerated U.S. battery deliveries in 2025[1](index=1&type=chunk)[7](index=7&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) Consolidated financial statements for Q1 2025 show balance sheet growth from project financing, income statement improvements in revenue and gross margin despite flat net loss, and a net cash increase driven by financing activities [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $217.4 million from $183.9 million at year-end 2024, primarily due to an increase in property and equipment and restricted cash, while total liabilities rose to $102.5 million from $57.6 million, largely driven by long-term debt related to project financing, and total stockholders' equity decreased to $114.9 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $74,357 | $68,905 | | **Total Assets** | **$217,441** | **$183,889** | | **Total Current Liabilities** | $86,247 | $54,655 | | **Total Liabilities** | **$102,528** | **$57,633** | | **Total Stockholders' Equity** | **$114,913** | **$126,256** | | Cash and cash equivalents | $17,822 | $27,091 | | Restricted cash (current & long-term) | $29,333 | $2,982 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For Q1 2025, revenue increased 10% year-over-year to $8.5 million, gross profit surged to $4.9 million from $2.1 million, with gross margin expanding to 57.1% from 26.7% in Q1 2024, mainly due to a high-margin India license agreement, and despite lower operating expenses, the net loss remained flat year-over-year at $(21.1) million, resulting in an unchanged EPS of $(0.14) Statement of Operations Summary (in thousands, except per share data) | Account | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $8,534 | $7,759 | | Gross Profit | $4,876 | $2,068 | | Loss from Operations | ($20,893) | ($24,627) | | Net Loss | ($21,174) | ($21,139) | | Net Loss Per Share | ($0.14) | ($0.14) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company experienced a net cash usage of $2.7 million from operating activities and $7.3 million from investing activities, which were more than offset by net cash provided by financing activities of $27.1 million, primarily from debt financing proceeds, resulting in a net increase in total cash and restricted cash of $17.1 million for the quarter Cash Flow Summary (in thousands) | Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($2,730) | $947 | | Net cash used in investing activities | ($7,313) | ($8,768) | | Net cash provided by (used in) financing activities | $27,060 | ($678) | | **Net increase (decrease) in cash** | **$17,082** | **($8,771)** | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) Energy Vault utilizes non-GAAP measures like Adjusted EBITDA and adjusted operating expenses to provide a clearer view of ongoing operations, with Q1 2025 adjusted operating expenses narrowing to $16.2 million and Adjusted EBITDA loss improving 22% to $(11.3) million - Management believes non-GAAP financial measures are useful for evaluating ongoing operational results by excluding certain non-cash or non-recurring items, such as stock-based compensation[21](index=21&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | **Net loss (GAAP)** | **($21,136)** | **($21,139)** | | Interest income, net | (220) | (1,818) | | Provision for income taxes | 383 | — | | Depreciation and amortization | 305 | 295 | | Stock-based compensation expense | 9,276 | 9,684 | | Other adjustments | 122 | (1,528) | | **Adjusted EBITDA (non-GAAP)** | **($11,270)** | **($14,506)** | Reconciliation of Operating Expenses (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | **Operating expenses (GAAP)** | **$25,769** | **$26,695** | | Stock-based compensation expense | (9,276) | (9,684) | | Depreciation and amortization | (305) | (295) | | Benefit for credit losses | 11 | 88 | | **Adjusted operating expenses (non-GAAP)** | **$16,199** | **$16,804** |

Company Overview and Market Position - The company has a limited operating history and has only completed three Battery Energy Storage Systems (BESSs) and one Gravity Energy Storage System (GESS) to date, which may affect investment decisions [89]. - The company expects future growth to be driven by rising demand for clean electric power solutions and a rapidly growing energy storage market, but predicting future revenues is challenging due to limited operating history [90]. - The company relies on a limited number of customers for the majority of its revenue, and the loss of any significant customer could substantially reduce revenue and impact liquidity [96]. - The company’s business model depends on the acceptance of its technology by customers and the successful commercialization of its energy storage systems [94]. - The company’s growth strategy includes establishing strategic relationships with various market players, but the success of these initiatives is uncertain [115]. - The growth of the energy storage market is dependent on the adoption of renewable energy sources and government regulations [141]. - Competition in the energy storage industry is intensifying, with several established companies having more resources and advanced technologies [145]. - The company’s technology must remain cost-effective compared to competitors to maintain its market position and profitability [144]. Financial Performance and Projections - The company has incurred significant expenses and expects to continue to do so, with a history of losses and uncertainty regarding future profitability [94]. - The company anticipates increased costs associated with transitioning to lower emissions technologies and potential risks related to the viability of these technologies [160]. - As of December 31, 2024, the company had accumulated deficits of $383.8 million and net losses of $135.8 million for the year ended December 31, 2024 [170]. - The company expects to continue incurring significant operating expenses without generating sufficient revenues, indicating a capital-intensive business model [171]. - The total backlog as of December 31, 2024, was $433.9 million, representing contracted but unrecognized revenue [180]. - Bookings for the year ended December 31, 2024, totaled $223.9 million, reflecting the total aggregate contract value from customer contracts signed during the period [181]. - The developed pipeline as of December 31, 2024, amounted to $2.1 billion, indicating potential revenue from projects where the company is in advanced negotiations [182]. Operational Risks and Challenges - The company faces risks associated with operational performance and costs, including unexpected malfunctions and the need for repairs, which could adversely affect business [101]. - The company’s projections regarding construction costs, timelines, and future revenues are highly sensitive to inaccuracies, which could materially affect profitability [92]. - The company faces risks associated with construction delays and cost overruns, which could impair project development and financial performance [121]. - The successful installation of energy storage systems is dependent on timely interconnection with local electric grids, which may face delays affecting revenue recognition [122]. - The lengthy sales and installation cycle for energy storage systems could lead to significant fluctuations in operating results from period to period [174]. - The company faces risks related to customer cancellations and delays, which could materially affect its business and financial condition [185]. Supply Chain and Production - The company’s energy storage systems have significant upfront costs, necessitating third-party financing for both the company and its customers [103]. - The company relies on a limited number of third-party suppliers for components, and any failure in their delivery could lead to installation delays and reputational damage [117]. - The company relies on suppliers and subcontractors for manufacturing components of its energy storage systems, which may lead to potential liabilities and recovery challenges [216]. Regulatory and Compliance Issues - The company is subject to legal and regulatory restrictions that could increase compliance costs and expose it to litigation risks [130]. - Increasing scrutiny of ESG matters could adversely impact the company's reputation, share price, and access to capital [131]. - The company may face increased regulatory requirements regarding environmental impacts, potentially leading to higher compliance costs [161]. - The company is subject to various environmental, health, and safety laws that could result in significant compliance costs and liabilities [226]. - Any actual or perceived failure to comply with privacy and data protection laws could subject the company to liability and damage its reputation [231]. - The company may face increased privacy and security obligations due to state and federal laws, such as the California Consumer Privacy Act [233]. Intellectual Property and Cybersecurity - The company may face challenges in protecting its intellectual property (IP) rights, which could adversely affect its growth and success [193]. - IP rights may not be as strongly enforced outside the United States, leading to potential revenue loss due to competitors copying designs and technology [194]. - The company's pending patent applications may not result in issued patents, hindering its ability to prevent competitors from selling similar products [195]. - The company may face third-party claims of IP infringement, which could result in substantial legal costs and harm its reputation [198]. - Cybersecurity risks threaten the confidentiality and integrity of the company's IT systems, which are critical to its operations [204]. - The company has experienced rapid growth, which may strain its IT systems and increase vulnerability to data security breaches [208]. Market and Economic Conditions - Economic uncertainty, including inflation and interest rate fluctuations, has negatively impacted demand for the company's products [154]. - Fluctuations in fuel prices could decrease incentives for transitioning to renewable energy, impacting demand for the company's products [162]. - The U.S. has implemented a 25% additional tariff on imports from Canada and a 20% additional tariff on imports from China, which may negatively affect the company's financial condition [221]. - The company may face reduced revenue due to the potential reduction, modification, or elimination of government economic incentives such as rebates and tax credits [223]. - Inflation could adversely impact operations due to rising material, labor, and construction costs, potentially affecting financial results [388]. Corporate Governance and Structure - As of December 31, 2024, executive officers, directors, and their affiliates beneficially own approximately 29.7% of the outstanding common stock, allowing significant control over corporate decisions [242]. - The company qualifies as an "emerging growth company" and intends to take advantage of exemptions from various reporting requirements until it exceeds a market value of $700 million or total annual gross revenue of $1.235 billion [243]. - Increased legal, accounting, and administrative costs are expected as a public company, which could negatively impact financial condition and results of operations [247]. - The company may issue additional shares or other equity securities without stockholder approval, potentially diluting ownership interests [252]. - The trading price of the company's common stock is likely to be volatile, influenced by various market and operational factors [253]. - Activist stockholders may attempt to effect changes that could adversely affect corporate governance and financial condition [256]. - Anti-takeover provisions may delay or prevent beneficial acquisitions and management changes, potentially limiting stockholder influence [257]. - The company is governed by Section 203 of the DGCL, which restricts individuals owning 15% or more of voting stock from merging for three years [258].