Executive Summary

Record Q2 revenue of $15.2M (+46% q/q; ~17x y/y), driven by 122% q/q shipment growth, though pricing on a single strategic project tempered revenue and margins .
Gross loss of $31.0M improved by 32 margin points vs Q1 on higher volumes and efficiencies; adjusted EBITDA loss improved 75 points vs Q1 to $51.6M .
Reaffirmed FY2025 revenue guidance of $150–$190M; management targets positive contribution margin in Q4 2025 and positive gross margin exiting Q1 2026, citing sub-assembly automation ramp and backlog pricing normalization .
Strengthened balance sheet: $336M concurrent offerings and DOE $22.7M advance; convertible notes maturity extended to 2034 and rate cut to 7% from 26.5% starting June 2026—reducing interest burden and adding liquidity .

What Went Well and What Went Wrong

What Went Well

“The team delivered our strongest operational quarter to date—production scaled rapidly… revenue nearly surpassed all of 2024, and Z3 customer field data has been outperforming its initial product specifications for round trip efficiency” — CEO Joe Mastrangelo .
Z3 performance: 87–89% RTE on sub-4-hour cycles; 89.5% peak, demonstrating compelling efficiency and durability vs alternatives without parasitic HVAC loads .
Commercial momentum: pipeline up $3.2B q/q to $18.8B (77 GWh); 15% q/q growth in 8+ hour projects; >20% tied to data centers; backlog $672.5M .

What Went Wrong

Pricing on a single strategic customer project (50% of Q2 volume) lowered near-term revenue/margins despite shipment surge; gross loss still $31.0M in Q2 .
Net loss of $222.9M driven by non-cash fair value changes (warrants/derivatives) tied to stock price increase; volatility below-the-line remains a risk signal for investors .
Backlog dipped slightly q/q amidst customer delays driven by policy uncertainty earlier in the year (now resolved post OBBBA), with longer sales cycles across larger multi-stakeholder projects .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$7.3	$10.457	$15.236
Basic EPS ($USD)	$(2.20)	$0.42	$(1.05)
Adjusted Basic EPS ($USD)	$(1.22)	$0.12	$(0.37)
Gross Profit (Loss) ($USD Millions)	$(23.5)	$(24.539)	$(30.953)
Adjusted EBITDA Loss ($USD Millions)	$(44.614)	$(43.238)	$(51.626)

YoY snapshot (Q2 2025 vs Q2 2024):

Revenue: $15.236M vs $0.898M (+~17x) .
Basic EPS: $(1.05) vs $(0.25) .
Gross loss: $(30.953)M vs $(13.223)M .

Vs Estimates: Wall Street consensus EPS and revenue for Q2 2025 were unavailable via S&P Global; no estimate comparison provided.

Segment breakdown: Company does not disclose segment revenue in the Q2 8‑K; only total revenue is presented .

KPIs

KPI	Q2 2025 Value	Context
Factory shipments	+122% q/q	Volume growth ahead of revenue due to pricing mix
Z3 RTE (avg/peak)	~88% avg; 89.5% peak	Sub-4 hr cycles; no HVAC parasitics
Commercial pipeline	$18.8B (+21% q/q; +37% y/y)	77 GWh; ~20% linked to data centers
Backlog	$672.5M	Slight q/q decrease due to prior uncertainty
Cash (incl. restricted)	$183.175M	Liquidity bolstered by offerings & DOE
Adjusted EBITDA margin trend	+75 pts vs Q1	Scale efficiencies offset lower pricing

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$150–$190M (reiterated Q1)	$150–$190M (reaffirmed Q2)	Maintained
Production capacity (Line 1)	2H 2025	Expand to 2 GWh annualized by year-end	Ramp to annualized 2 GWh in 2H 2025	Clarified timing, consistent
Contribution margin	Q4 2025	Not previously quantified	Positive contribution margin targeted	New specific target
Gross margin	Exit Q1 2026	Not previously quantified	Positive gross margin targeted	New specific target
Second manufacturing line	2026	Order placed (June PR); operational 1H 2026	Operational 1H next year (i.e., 2026)	Maintained
Convertible senior notes (26.5%)	2034 / 2026 rate	26.5% rate, earlier maturity	Maturity extended to 9/30/2034; rate cut to 7% effective 6/30/2026	Lower cost, extended tenor

Earnings Call Themes & Trends

Topic	Q4 2024 (Prior Q-2)	Q1 2025 (Prior Q-1)	Q2 2025 (Current)	Trend
AI/data centers demand	Emerging; bankability initiatives launched	Case study economics; 750 MWh MoU; LCOS advantages	>20% pipeline tied to DCs; PJM 10-hr finalizing	Strengthening opportunity set
Supply chain & automation	Sub-assembly automation slated 2Q–3Q	First terminal cell SAT passed; 8 stations ramp May–Aug	Sub-assemblies ramping; better quality/flatness; +3% energy efficiency from parts	Execution improving, throughput rising
Tariffs/macro policy	OBBBA/DOE LPO support; bankability insurance	Tariffs a tailwind; domestic content advantage (91%)	OBBBA preserves 45X stackability/transferability through 2029	Policy tailwinds crystallizing
Product performance	Z3 cost-out; commissioning costs elevated	Lower per-unit costs; margin point improvements	87–89% RTE; 89.5% peak; installation time gains (25–30 mins)	Clear performance proof points
Regional expansion	US military/municipal; UK market scouting	UK Cap & Floor 5 GWh MoU; Puerto Rico 400 MWh	UK submissions >10 GWh; Puerto Rico pipeline expanding	International traction building
R&D/software	Investment to improve Z3 + BMS	Software/controls drive multi-cycling value	“Indoor racking” design, software positioning	Enhancing value stack
Regulatory/legal	SOX compliance achieved	Cerberus milestone extension to 7/31	Cerberus milestone extended to 10/31/2025	Flexibility maintained

Management Commentary

CEO: “We are consistently delivering between 87%–89% round-trip efficiency on sub four hour discharge cycles… we topped out at 89.5% round-trip efficiency on a four-hour discharge cycle” .
CEO: “We’re going to be transitioning to contribution-margin-positive cubes in the fourth quarter and targeting gross margin positive in the first quarter of next year” .
CFO: “Adjusted EBITDA loss came in at $51.6 million, showing a 75-point margin increase… we expect positive contribution margin in Q4 and positive gross margin as we exit the first quarter of 2026” .
CFO: “OBBBA completely preserves Section 45X production tax credits with full stackability and transferability through 2029… we’ve generated $14.3M credits; collected $6.3M” .
CEO: “Line two… will be a straight line… designed for total throughput efficiency… operational in the first half of next year” .

Q&A Highlights

Bridge to H2 revenue: Management emphasized repeated “doubling” of production, sub-assembly automation unlocking line capacity, and backlog pricing normalization to reach guidance midpoints .
Line 2 timing and ramp: Operational in 1H 2026; lessons from Line 1 incorporated to improve throughput, reliability, and maintenance redundancy .
Economics: RTE and faster commissioning reduce CapEx and improve project IRR by “a couple percentage points,” with project-specific variability .
Backlog dynamics: Slight q/q decrease due to earlier policy uncertainty; larger orders with more stakeholders extend time-to-order; confidence in near-term announcements .
Revenue recognition for strategic project: Majority recognized in Q2 at delivery; remaining tied to commissioning .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus EPS and revenue estimates for Q2 2025 were unavailable via our tool workflow; therefore, we cannot present beat/miss analysis relative to estimates.
Investors should focus on operational momentum (volume doubling cadence), pricing mix normalization, and automation ramp as key drivers of H2 results .

Key Takeaways for Investors

Execution inflection: 122% q/q shipment growth and automation-driven quality/throughput signal a credible path to H2 scaling; monitor weekly output and commissioning metrics .
Margin trajectory: Contribution margin targeted positive in Q4 2025; positive gross margin exiting Q1 2026—hinges on sub-assembly ramp and backlog pricing; watch for project mix shifts .
Balance sheet de-risking: $336M offerings, DOE $22.7M advance, and 26.5% notes cut to 7% with maturity extension materially lower cost of capital, supporting capacity ramp and order conversion .
Demand catalysts: Data center load growth (>20% pipeline), UK Cap & Floor (>10 GWh submitted), and tariff/FEOC policy tailwinds advantage domestic zinc-based storage .
Pricing mix watch: Q2 margin headwinds were project-specific; management expects normalization toward average backlog pricing—track order announcements and unit economics .
Operational KPIs: RTE 87–89% with 89.5% peak and faster truck-to-pad/cube-to-cube commissioning materially improve customer economics and installation density (1 GWh/acre indoor racking) .
Near-term trading lens: Stock catalysts include large-order conversions, automation milestones, and demonstration of sequential volume growth toward guidance; below-the-line fair value items add P&L volatility tied to share price .

Sources: Q2 2025 8‑K and press release, Q2 2025 earnings call transcripts, and related company press releases .

Eos Energy Enterprises, Inc. (EOSE)·Q2 2025 Earnings Summary