Ess Tech (GWH) Q2 2024 earnings summary

Executive summary

• ESS Tech specializes in long-duration iron flow battery energy storage for utility and commercial applications, focusing on scaling manufacturing, cost reduction, and supporting the clean energy transition.

• Commercial traction is demonstrated through agreements with major utilities and global partners, including Honeywell, LEAG, and deployments at Schiphol Airport and SMUD.

• Q2 2024 shipments were delayed due to partner issues, shifting revenue recognition to Q3, but major project milestones were achieved.

• Finalizing up to $50 million in EXIM Bank funding, with $10 million expected in H2 2024 to expand manufacturing capacity.

• Ended Q2 2024 with over $74 million in cash and short-term investments, supporting operations into 2025.

Financial highlights

• Q2 2024 revenue was $348,000, with cost of revenue at $11.7 million and adjusted EBITDA of -$18.8 million.

• Net loss for Q2 2024 was $21.9 million; net loss for H1 2024 was $40.3 million, a 10% improvement year-over-year.

• Cash and short-term investments at quarter-end were $74.4 million.

• Operating expenses (GAAP) for Q2 2024 were $11.7 million; non-GAAP operating expenses were $9.1 million.

• Weighted-average shares outstanding for Q2 2024 were 175.8 million.

Outlook and guidance

• Revenue is expected to ramp in H2 2024, targeting 3x-4x 2023 revenue, with shipment delays anticipated to resolve in Q3.

• Second manufacturing line, funded by EXIM, expected to triple production capacity by mid-2025.

• Management expects continued losses as the company invests in scaling, but anticipates future margin improvement from IRA tax credits.

• Current cash and investments expected to fund operations for at least 12 months; additional capital may be needed beyond that.