Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $200,000, a significant decrease from $2.4 million in Q2 2025, reflecting the transition to the Energy Base platform [11] - GAAP cost of revenues totaled $4.9 million, while operating expenses were $5.1 million, indicating a commitment to disciplined cost control [11] - The net loss for the quarter was $10.4 million, or $0.73 per share, with cash, cash equivalents, and short-term investments at $3.5 million, excluding $30 million from a financing that closed after the quarter-end [11][12] Business Line Data and Key Metrics Changes - The company is transitioning from Energy Warehouse and Energy Center deliveries to the Energy Base platform, which will be the foundation of future commercial activity [11] - The Energy Base offering currently provides a 10-hour duration, with plans to target a 16-hour battery by 2029 [18] Market Data and Key Metrics Changes - The company has established strong relationships with tier-one customers, including SB Energy, Honeywell, and Portland General Electric, validating its technology for real-world deployment [5][6] - The commercial pipeline is strong, with 100% of active opportunities centered on the Energy Base platform, indicating increasing RFP activity and proposal volume [9] Company Strategy and Development Direction - The company aims to deliver on customer commitments, execute with discipline, and convert momentum into long-term growth [14] - A focus on operational discipline, scaling manufacturing capability, and demonstrating technology performance is emphasized as the company prepares for the next phase of growth [9][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of long-duration storage in a decarbonized and resilient grid, with a clear strategy to deliver projects similar in size to the SRP pilot project [9][18] - The company plans to host an Investor Day in early 2026 to provide an in-depth look at progress and future roadmaps [10] Other Important Information - The company completed a $40 million financing with Yorkville Advisors, reinforcing its balance sheet and providing flexibility for future operations [6][12] - A $75 million at-the-market equity program is being launched to support growth and execution as needed [8][12] Q&A Session Summary Question: Scale of Energy Base projects and competing technologies - The company is pursuing projects similar in size to the SRP project, targeting larger opportunities in the future, with a current offering of 10-hour duration batteries [18] - Competing technologies include those offering more than 10 hours of storage, with recognition of the need for longer-duration solutions [19] Question: Types of customers issuing RFPs - Customers issuing RFPs are primarily utilities or Independent Power Producers (IPPs) acting on behalf of utilities, with no engagement in behind-the-meter RFPs for data centers [20] Question: Use of proceeds from capital raised and liquidity needs - The company has approximately $30 million in cash and the ability to draw an additional $10 million, providing significant flexibility to manage liquidity [21][22]

Product & Technology - ESS launched the Energy Base, a new product featuring modular powertrains called the Iron Core, designed for gigawatt-hour storage capacity[11, 20] - The Energy Base extends duration up to 22 hours by scaling electrolyte volume, unlocking green baseload power and reducing $/kWh cost[29] - ESS iron flow battery modules are capable of storing up to 22 hours of energy[29] Market & Strategy - Data centers' electricity demand is estimated to grow to 800 TWh by 2026, putting pressure on infrastructure[33] - Power disruption accounts for 54% of impactful data center outages[36] - ESS products offer a safe, scalable, and cost-effective alternative to gas generators for data centers[34] Financial Performance - Q3 2025 revenue was $0.2 million, a 40% decrease compared to $0.4 million in Q3 2024[50] - Q3 2025 net loss was $10.4 million, a 54% improvement compared to $22.5 million in Q3 2024[50] - Adjusted EBITDA for Q3 2025 was a loss of $7.17 million, a 62% improvement compared to a loss of $18.87 million in Q3 2024[50, 52]

Product & Strategy - Launched the Energy Base product, featuring a configurable Iron Core for gigawatt-hour storage capacity[11, 18] - The Energy Base utilizes existing iron flow battery modules and scalable enclosures to extend duration up to 22 hours[27] - ESS manufactures core components in-house and procures the balance of system from preferred vendors[22] - Partnered with Honeywell to optimize Energy Base design for quality, cost-efficiency, and scale[24, 26] Market & Applications - Data centers' electricity demand is projected to grow to 800 TWh by 2026, increasing the risk of infrastructure failure[31] - Power disruption accounts for 54% of impactful data center outages[34] - ESS Energy Base provides a safe, scalable, and cost-effective alternative to traditional power solutions for data centers[32] Manufacturing & Cost - Commissioning a second automated battery manufacturing line ("Line 2") in H2 2025 to increase capacity[41] - Capital efficiency improves with the shift from Energy Centers to Energy Bases, reducing capex per unit[41] - ESS products qualify for the domestic content ITC adder due to being 98% domestically sourced and 100% domestically manufactured[42] Financial Performance - Q2 2025 revenue reached $2.4 million, a 578% increase compared to Q2 2024's $0.3 million[49] - Q2 2025 net loss was ($11.1) million, a 50% improvement compared to Q2 2024's ($21.9) million[49] - Adjusted EBITDA for Q2 2025 was ($7.8) million, a 59% improvement compared to Q2 2024's ($18.8) million[49]

Product & Strategy - ESS launched the Energy Base, a new product configuration scalable from 5 MW to 100+ MW with a duration of 10+ to 22 hours, utilizing the Iron Core technology[14,32] - The Energy Base is designed to be more capital efficient for both ESS and its customers, shifting manufacturing mix to higher margin components and lowering working capital burden[32,47] - ESS partners with Honeywell to optimize Energy Base design for quality, cost-efficiency, and scale, exploring product collaboration and procurement leverage[30] - ESS's product line is evolving to meet a broader range of use cases at larger scales, with the same core technology across all products[31] Market & Opportunities - Data centers' electricity demand is estimated to grow to 800 TWh by 2026, putting extreme pressure on aging infrastructure and increasing the risk of failure[37] - Power disruption accounts for 54% of impactful data center outages, highlighting the need for resilient power solutions[40] - ESS Energy Base enables fast deployment of additional grid capacity and increases grid balancing and resilience for data center customers[38] Financial Performance - Q1 2025 revenue was $0.6 million, a 78% decrease compared to $2.7 million in Q1 2024[53] - Q1 2025 net loss was $18.0 million, a 2% improvement compared to $18.3 million in Q1 2024[53] - Adjusted EBITDA for Q1 2025 was a loss of $15.0 million, a 3% improvement compared to a loss of $15.4 million in Q1 2024[53]

Financial Data and Key Metrics Changes - For the fiscal year 2024, the company reported revenue of $6.3 million, which was below the guidance range of $9 to $11 million, primarily due to a partner's inability to secure funding for orders [11][46] - The cost of revenue for the full year was $51.7 million, reflecting challenges in achieving expected revenue guidance [46] - The company achieved a nearly 60% reduction in its NOV adjustment per unit year-over-year, indicating progress in cost management [48] Business Line Data and Key Metrics Changes - The company delivered six Energy Center (EC) systems to a Florida utility customer in December 2024, contributing significantly to revenue [14][44] - The Energy Center design achieved breakeven on a non-GAAP gross margin basis by the end of Q4 2024, hitting the target almost a year earlier than expected [19][50] - The company reported a 35% reduction in costs for the Energy Warehouse (EW) and a 26% reduction for the EC [52] Market Data and Key Metrics Changes - The demand for electricity in the U.S. is expected to grow by 35% to 50% between 2024 and 2040, driven by economic growth and the electrification of transport and heating [33] - The company is actively bidding on projects with the new energy base product, which is designed to meet increasing energy demands [34] Company Strategy and Development Direction - The company plans to accelerate its strategic shift towards the Energy Center product deployment and the new energy base product in 2025 [13][20] - The energy base product is designed to be modular and scalable, allowing for greater flexibility in manufacturing and deployment [25][32] - The company aims to leverage partnerships, such as with Honeywell, to enhance manufacturing capabilities and reduce costs [24][98] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the current operating environment, including capital raising and geopolitical uncertainties [5][37] - The company is focused on extending its cash runway through securing new capital and efficient management of expenses [66] - Management expressed optimism about the long-term potential of the energy storage market and the company's positioning within it [67] Other Important Information - The company is in the process of raising capital to bolster its balance sheet and support growth objectives [37][63] - The company received notice of falling below the NYSE market cap requirement of $50 million and is taking action to remedy this situation [40][41] Q&A Session Summary Question: Revenue growth trajectory and 2025 expectations - Management indicated that they will not provide guidance for 2025 but expect moderate revenue growth in the first half of the year, with a scale-up in the second half [73] Question: Trends in gross margins for 2025 - Management stated that they do not anticipate being U.S. GAAP gross margin positive in 2025 but expect to achieve that post-2025 [77] Question: Capital raising needs and Export-Import Bank financing - Management is looking to raise at least $50 million to access the full amount of the Export-Import Bank loan and anticipates drawing on it in the second quarter [79] Question: Performance metrics of products in the field - Management acknowledged operational issues with new technology deployments but highlighted improvements in software and documentation to enhance user experience [84][86] Question: Future operating expenses - Management indicated that operating expenses are expected to be slightly lower than the previous year, with a focus on reallocating resources to key initiatives [90][92] Question: Energy base product and manufacturing partners - Management clarified that the energy base product will involve manufacturing core components while potentially leveraging external partners for balance of system components [96][98]