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ESS Tech, Inc. (GWH)·Q2 2025 Earnings Summary

Executive Summary

  • ESS Tech reported GAAP revenue of $2.36M, up 294% q/q, with GAAP operating expenses down 35% and adjusted EBITDA loss improving to $(7.77)M; net loss per share was $(0.90) .
  • Relative to S&P Global consensus, revenue slightly missed ($2.36M vs $2.40M*) and EPS slightly missed (−$0.90 vs −$0.88*); consensus coverage remains very thin (one estimate) *.
  • Liquidity actions: secured up to $31M financing (including a $25M SEPA), raised >$2M in first six weeks, ended July with $7.2M cash, and reduced operating cash burn ~80% in June vs Q1 average .
  • Commercial pivot gaining traction: first Energy Base sale (8 MWh), proposals totaling >1.1 GWh in Q2, pipeline focused 100% on Energy Base/core component sales .
  • Leadership upgrades: appointed Jigish Trivedi as COO and Kate Suhadolnik as interim CFO to drive operational execution amid the Energy Base transition .

What Went Well and What Went Wrong

What Went Well

  • Cost discipline: GAAP operating expenses fell 35% q/q to $6.46M; adjusted EBITDA loss improved to $(7.77)M (vs $(18.80)M in Q2’24) .
  • Commercial momentum: first Energy Base sale (8 MWh) closed; proposal activity exceeded 1.1 GWh in Q2; pipeline now fully concentrated on Energy Base/core components .
  • Liquidity actions executed: up to $31M financing secured, >$2M raised under SEPA in first six weeks, and $7.2M cash at end of July; operating cash burn down ~80% in June .

Quote: “Q2 reflects the early results of the operational reset we began earlier this year… we continue to see growing demand from Tier 1 customers” — Kelly Goodman, Interim CEO .

What Went Wrong

  • Gross margin deeply negative: Q2 gross loss $(5.10)M on $2.36M revenue; cost of revenue still exceeded revenue by ~3.2x .
  • No formal revenue guidance for H2 2025; visibility depends on converting proposals to backlog in H2 .
  • Cash position at quarter-end was low ($0.80M), requiring continued reliance on external financing and cash management actions .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$0.35 $0.60 $2.36
Net Loss ($USD Millions)$(21.94) $(18.03) $(11.06)
EPS (basic & diluted, $USD)$(1.87) $(1.50) $(0.90)
Gross Profit (Loss) ($USD Millions)$(11.40) $(8.15) $(5.10)
Gross Margin (%)−3276.7% −1359.9% −216.3%
Operating Expenses ($USD Millions)$11.73 $10.00 $6.46
Adjusted EBITDA ($USD Millions)$(18.80) $(14.95) $(7.77)

Comparison vs S&P Global Consensus (Q2 2025):

MetricActualConsensusBeat/Miss
Revenue ($USD Millions)$2.36 $2.40*Miss (~$0.04M)
EPS ($USD)$(0.90) $(0.88)*Miss ($0.02)
Adjusted EBITDA ($USD Millions)$(7.77) $(7.60)*Miss (~$0.17M)

Values retrieved from S&P Global*.

Segment breakdown: ESS does not report discrete segments; results reflect company-level performance .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueH2 2025NoneNo formal guidance; expecting some proposal conversions to backlog in H2Maintained “no guidance”
Operating Expenses2025Not quantifiedContinued cost discipline; right-sized organization; leveraging external resources as neededQualitative emphasis on reductions
Cash BurnH2 2025NoneTargeting continued reductions vs June baseline; pursuing vendor terms & capital raiseQualitative improvement focus
Capital Raising36-month SEPA termN/ARight to sell up to $25M common equity; >$2M accessed in first six weeksNew facility & early draw

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Energy Base product pivotAnnounced Energy Base; positioning for LDES at scale Awarded 50 MWh Energy Base project in contracting First Energy Base sale (8 MWh); proposals >1.1 GWh; 100% pipeline focused on Energy Base/core components Improving
Cost disciplineBreakeven EC design at end of Q4; cost-down program Moderating activity to manage liquidity OpEx −35% q/q; adjusted EBITDA improved; cash burn −80% in June vs Q1 avg Improving
Liquidity actionsEvaluating transactions; advisors engaged Aggressively pursuing financing options $31M package incl. $25M SEPA; >$2M raised; July cash $7.2M Improving
Regulatory/tariffsEmphasis on US manufacturing & safety certifications Positioning “Made in USA” vs tariff volatility OBBB Act preserves 45X PTCs; 98% domestic components; minimal tariff exposure Supportive
Product performance/R&DEC commissioning and certifications Portfolio operations (PGE cycling) Material substitution extends duration to ~12–18 hours; accelerates cost/perform roadmap by ~18 months Improving

Management Commentary

  • Strategic focus: “We are building a business with sharper focus, disciplined execution, and a stronger financial foundation.” — Kelly Goodman .
  • Pipeline and conversion: “We have already converted one [proposal] to a win… expect to be converting some additional proposals to backlog in the back half of this year” — Kelly Goodman .
  • Liquidity and runway: “We have already been able to raise over $2,000,000 in capital… ended July with cash and cash equivalents of $7,200,000” — Kate Suhadolnik .
  • Cost philosophy: “We intend to continue the disciplined approach… to right size the business and the business cost” — Kelly Goodman .
  • US manufacturing advantage: “Over 98% of the components… are sourced domestically… exposure to these changing policies continues to be minimal” — Kate Suhadolnik .

Q&A Highlights

  • Proposal conversion timing: One proposal converted; expect additional conversions in H2 2025; pace of proposal to contracting improving since February launch of Energy Base .
  • Revenue trajectory: No H2 revenue guidance; visibility expected to improve as contracts close .
  • SEPA/financing utilization: >$2M raised under SEPA in first six weeks; focus on maximizing proceeds subject to stock performance .
  • Cash burn outlook: Target ongoing reductions via right-sizing, vendor terms, and disciplined execution; philosophical shift to align costs with business capacity .

Estimates Context

  • Q2 2025 vs S&P Global consensus: revenue $2.36M vs $2.40M*, EPS $(0.90) vs $(0.88), adjusted EBITDA $(7.77)M vs $(7.60)M; small misses across metrics amid thin coverage (1 estimate for Q2 revenue and EPS) *.
  • Forward estimates indicate modest sequential revenue improvement into Q4 and FY 2026, but coverage is sparse; revisions likely hinge on H2 backlog conversions and capital availability*.

Values retrieved from S&P Global*.

KPIs

KPIQ1 2025Q2 2025
Energy Base proposals submitted (GWh)~1.2 >1.1
Energy Base orders (MWh)50 MWh project awarded, in contracting 8 MWh first sale closed
Operating cash burn (June vs Q1 avg)N/A~80% reduction
Cash & equivalents (quarter-end)$8.42M $0.80M
Cash & equivalents (end of July)N/A$7.2M
Cost of revenue ($M)$8.75 $7.46

Key Takeaways for Investors

  • Execution on the Energy Base pivot is progressing: first sale booked; pipeline concentrated on longer-duration solutions; watch for H2 backlog additions as near-term catalysts .
  • Cost actions are having impact: OpEx −35% q/q and adjusted EBITDA improvement; sustaining burn-rate reductions is vital given low Q2 quarter-end cash .
  • Liquidity runway improved via $31M financing and SEPA utilization; ongoing capital access will influence delivery scaling and the timing of backlog-to-revenue conversion .
  • Policy tailwinds (OBBB, 45X) and US sourcing (>98% domestic) mitigate tariff risk and support customer economics — a competitive advantage for ESS in LDES .
  • Near-term: stock reaction likely driven by contract wins, SEPA draw pace, and cash burn trajectory; medium-term thesis depends on executing the Energy Base cost/performance roadmap and scaling manufacturing/deliveries .
  • Estimates misses were marginal with minimal coverage; expect consensus to recalibrate as H2 contract conversions crystallize and revenue visibility improves*.

Values retrieved from S&P Global*.

Citations:

  • Q2 2025 8-K press release and exhibits .
  • Q2 2025 earnings call transcript .
  • Funding press release and 8-K SEPA details .
  • Q1 2025 8-K press release .
  • Q4 2024 8-K press release .