Ess Tech (GWH) Q3 2023 earnings summary

Executive summary

• Q3 focus centered on scaling production, simplifying Energy Warehouse designs, and reducing build and direct variable costs.

• Six Energy Warehouses were commissioned at SMUD in under six weeks; commissioning was underway for the initial LEAG project phase.

Financial highlights

• Q3 revenue was $1.5M; non-GAAP operating expenses were $7.5M.

• Adjusted EBITDA loss was $14.2M, an improvement of $6.3M sequentially; cash and short-term investments were $124.5M, up $25M sequentially.

Outlook and guidance

• Targeting non-GAAP gross margin profitability for Energy Warehouse in H2 2024.

• Energy Center production was scheduled to begin in Q4 2023; the system is configurable to utility scale.

• LEAG expected to receive 1GWh of iron flow batteries over seven years, with deployments beginning in 2027.