Executive Summary

Q1 2025 revenue was $0.60M, a significant miss versus Wall Street consensus of $3.45M; GAAP EPS was -$1.50 vs consensus -$1.205; adjusted EBITDA was -$14.95M versus consensus -$12.12M. Management moderated activity to conserve liquidity and pivot to Energy Base, deferring revenue recognition until installations and commissioning occur later in 2025 . Consensus values from S&P Global.*
Commercial traction improved: awarded a 50 MWh Energy Base project with an Arizona utility (contracting expected to conclude by September, structured as a PPA) and proposal submissions totaling ~~1.2 GWh (~~$400M) over the last two quarters; PGE systems transacted another 158 MWh, and the global fleet is nearing 2.5 GWh of energy transacted .
Liquidity remains the key overhang: cash and cash equivalents were $8.4M with short-term investments of $4.4M; management launched an ATM, is evaluating EXIM loan draws and other financing avenues, and disclosed going-concern considerations in the 10-Q; H2 revenue ramp is contingent on securing additional capital .
Near-term stock reaction catalysts: visibility on financing (ATM use, strategic capital, EXIM), closing of the Arizona PPA by September, and tariff/macro developments that favor domestic manufacturing could drive sentiment; conversely, runway and capital market risks may pressure shares until financing clarity improves .

What Went Well and What Went Wrong

What Went Well

Awarded 50 MWh Energy Base pilot with an Arizona public utility; management emphasized being selected over “more than 10 competitors” based on operating performance, cost and technology risk; contracting expected by September with a confirmed offtaker and potential follow-on RFP (indicative pricing for 2 GWh/200 MW follow-on) .
Proposal momentum and pipeline: ~~1.2 GWh (~~$400M) of proposals submitted in the last two quarters (over 70% for Energy Base), >8 GWh of inquiries across the US and Europe, plus 30+ informal inquiries representing ~1.6 GWh .
Operational progress and field learnings: two PGE Energy Center systems continue daily cycling and transacted another 158 MWh, supporting reliability learnings at commercial scale; Q4 EC cost-down achieved breakeven profitability on latest EC design, with continued cost reductions expected to benefit Energy Base .

What Went Wrong

Material miss vs consensus: revenue $0.60M (vs $3.45M consensus)* and GAAP EPS -$1.50 (vs -$1.205 consensus)* as activity was moderated to manage liquidity and the pivot to Energy Base delayed near-term revenue recognition .
Cost of revenue and LCNRV impacts persisted at low volumes, contributing to gross loss of -$8.15M; management noted the LCNRV adjustment continued to weigh on results and will persist at current volumes .
Liquidity/runway risk: cash + ST investments totaled ~$12.8M; management reiterated need for additional capital to ramp production and clear going-concern analysis; Australian project remains delayed due to government funding timing, limiting near-term shipments .

Financial Results

Quarterly Financials (GAAP unless noted)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$0.359	$2.850	$0.599
GAAP EPS ($USD)	-$1.90	-$1.97	-$1.50
Net Loss ($USD Millions)	-$22.493	-$23.479	-$18.026
Cost of Revenue ($USD Millions)	$12.741	$16.038	$8.746
Gross Profit (Loss) ($USD Millions)	-$12.382	-$13.188	-$8.147
Non-GAAP Total Operating Expenses ($USD Millions)	$9.171	$7.877	$9.385
Adjusted EBITDA ($USD Millions)	-$18.870	-$18.244	-$14.954
Cash and Cash Equivalents ($USD Millions)	$12.822	$13.341	$8.422
Short-Term Investments ($USD Millions)	$42.292	$18.263	$4.379

Q1 Cash Flow (YoY)

Metric	Q1 2024	Q1 2025
Net Cash Used in Operating Activities ($USD Millions)	-$18.910	-$18.238
Net Change in Cash, Cash Equivalents and Restricted Cash ($USD Millions)	+$15.701	-$4.999

Q1 2025 vs Wall Street Consensus (S&P Global)

Metric	Actual	Consensus	Outcome
Revenue ($USD)	$0.599M	$3.454M*	MISS
GAAP EPS ($USD)	-$1.50	-$1.205*	MISS
EBITDA ($USD)	-$16.606M*	-$12.116M*	MISS

Values retrieved from S&P Global.*

KPIs and Commercial Activity

KPI	Q3 2024	Q4 2024	Q1 2025
Energy Center deliveries (Florida)	Building started; shipments planned	6 ECs delivered; two PGE ECs commissioned/testing	Final EC deliveries tied to $0.6M revenue
PGE Energy Center operation (incremental MWh)	Second EC installed/testing	Commissioning completed; grid interconnection in Q1	+158 MWh transacted on site
Global fleet energy transacted (cumulative)	—	Surpassed 2 GWh	Nearing 2.5 GWh
Proposal activity (last two quarters)	—	—	~~1.2 GWh (~~$400M) submitted; >8 GWh inquiries; 30+ informal inquiries (~1.6 GWh)
Awarded projects	—	—	50 MWh Energy Base pilot with Arizona utility (PPA structure)

Segment breakdown: Not applicable (company does not report segments in these materials.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue trajectory	Q2 2025	N/A	“Q2 sales might be similar to Q1; ramp in H2 contingent on successful capital raise”	New qualitative guidance
Production/gross margin	2025 units	Prior disclosure: EC breakeven achieved end of Q4 2024	Units produced in 2025 and beyond will be non-GAAP gross margin positive	Maintained/improving
EBITDA/cash flow	Multi‑year	N/A	Path to EBITDA and cash flow positive “in the next few years”	New qualitative target
Financing	2025	EXIM $50M package executed (first $20M tranche agreement)	ATM launched; evaluating EXIM draws/interim financing; seeking strategic capital	Active shift to multiple funding levers

Note: No explicit numeric guidance ranges (e.g., revenue, margins) provided for 2025 quarters in these documents.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Capital raise/runway	EXIM credit agreement executed; listing compliance via reverse split	Emphasis on cost-down, breakeven EC design	ATM launched; EXIM loan as interim option; going-concern noted; active strategic capital discussions	Worsening near-term liquidity; active remediation
Product strategy (Energy Base)	—	Energy Base announced as modular, non-containerized GWh-scale solution	Secured 50 MWh EB award; proposals ~1.2 GWh; resource reallocation to EB cost/performance	Improving commercial traction
Tariffs/macro tailwinds	—	—	Domestic manufacturing advantages; evolving tariff regime; IRA/45X supportive; pending FPFA could favor low‑carbon inputs	Improving relative positioning
Australian project timing	Funding delays impacted Q3 revenue	—	Government funding still not through; no timing update	Persisting delay
PGE operation/field learnings	First EC operating with high reliability; second EC built	First two ECs commissioned and grid‑connected	+158 MWh transacted; on‑site extended duration stacks planned (12‑hour in Q2)	Improving operational data
Honeywell partnership	—	—	Multiple fronts of collaboration on EB; initial 4 projects complete/near completion	Strengthening execution

Management Commentary

“We have been awarded a 50 MWh project that is now in contracting… submissions representing approximately 1.2 GWh (or $400 million) over the last two quarters.” — Kelly Goodman, Interim CEO .
“Our two Portland General Electric systems are continuing grid operation and running daily cycling, having transacted another 158 MWh in energy…” — Kelly Goodman .
“We continue to expect [adjusted EBITDA] loss to narrow as units produced in 2025 and beyond will be non-GAAP gross margin positive… path to transition to EBITDA and cash flow positive in the next few years.” — CFO Anthony Rabb .
“The tariff landscape remains both significant and volatile… our batteries [are] made here in the United States… over 98% of components sourced domestically.” — Kelly Goodman .

Q&A Highlights

Near-term outlook: Q2 sales similar to Q1; H2 ramp contingent on capital raise; company is moderating spend/production until additional capital is accessed .
Deposits/worked capital: Customer deposits historically range 5%–20%; seeking higher end with milestone payments to maintain cash neutrality on projects .
Energy Base/Arizona RFP: Non‑lithium requirement; EB’s 10+ hour duration, broad temperature performance, competitive cost, and field experience were decisive .
Manufacturing capacity: Additional lines can be added relatively quickly and inexpensively; customers not expressing concerns about being too large a share of ESS capacity .
Australian project: Government funding still pending; timing uncertain .
Inquiry levels: Tariff uncertainty and electrification growth are increasing inquiries as an alternative to lithium-ion .

Estimates Context

ESS significantly missed Q1 consensus on revenue and EPS: $0.599M actual vs $3.454M consensus*, and -$1.50 EPS vs -$1.205 consensus*; EBITDA was more negative than consensus as LCNRV and low volumes weighed on cost of revenue and margins .
Given moderated near-term activity and H2 ramp contingent on capital, estimates likely need to reflect lower H1 volumes and the sequencing of EB projects (contracting deposits, project-level financing, and later revenue recognition), with upside if Arizona PPA closes by September and additional EB awards progress .