Eos Energy Enterprises (EOSE) Q3 2024 earnings summary

Executive summary

• Secured a $73 million, 216 MWh order from City Utilities of Springfield, Missouri, the largest municipal order to date, with shipments starting in 2025.

• Commercial pipeline reached $14.2 billion (~59 GWh), with a $588.9 million backlog and $1.7 billion in signed LOIs as of September 30, 2024.

• Achieved key operational milestones, including 4.4 GWh discharged in the field, improved battery cycle times, and over 97% first pass yield on the automated Z3 line.

• Faced supply chain challenges with steel enclosures, impacting Q3 and Q4 revenue, but backlog and customer sentiment remain strong.

• Substantial doubt remains about the ability to continue as a going concern due to ongoing losses, negative cash flows, and reliance on external capital.

Financial highlights

• Q3 2024 revenue was $0.9 million, up 25% year-over-year but flat sequentially, with cost of goods sold rising to $25.8 million due to commissioning costs and inventory adjustments.

• Operating loss for Q3 2024 was $53.3 million; adjusted EBITDA loss was $46.1 million; net loss attributable to shareholders was $342.9 million, with adjusted EPS at $(0.44).

• Net loss attributable to common shareholders was $384.1 million for Q3, including $41.3 million in preferred stock accretion.

• Cash and cash equivalents at September 30, 2024, were $23.0 million, excluding $7.6 million in restricted cash.

• Gross margin remained negative due to high production costs and inventory write-downs.

Outlook and guidance

• 2024 revenue guidance reduced to approximately $15 million due to supply chain delays, with deferred revenue expected to be recognized in Q1 and Q2 2025.

• Contribution margin expected to turn positive by year-end, benefiting from production tax credits and automation ramp-up.

• Management expects continued losses and negative cash flows until profitability is achieved at scale.

• The company may be unable to comply with minimum revenue covenants in its credit agreement for Q4 2024 without further waivers.