Ess Tech (GWH) Q3 2024 earnings summary

Executive summary

• The company develops and manufactures iron flow batteries for long-duration energy storage, targeting utility-scale and commercial applications, and is scaling automated production with a 200,000 ft² plant in Oregon.

• Revenue ramp remains slow due to external factors, notably customer funding delays and macroeconomic challenges, but optimism persists with resumed shipments, new contracts, and funding agreements post-Q3.

• Strategic partnerships, including Honeywell and SMUD, support global market reach and commercial traction, with Honeywell targeting $300M in initial purchases.

• Initial commercial shipments of the higher-capacity EC product are planned for Q4 2024, with six units to be shipped and additional units deferred to next year.

• Aggressive cost reduction and operational scaling initiatives are underway to drive toward profitability.

Financial highlights

• Q3 2024 revenue was $359,000, down 77% year-over-year; nine-month revenue was $3.4 million, down 27%.

• Q3 2024 net loss was $22.5 million, a 35% increase year-over-year; adjusted EBITDA loss was $18.9 million.

• Gross loss for Q3 2024 was $12.4 million, with cost of revenue at $12.7 million, impacted by LCNRV adjustments at low volumes.

• Non-GAAP operating expenses for Q3 2024 were $9.2 million; non-GAAP R&D was $2.1 million.

• Ended Q3 2024 with $12.8 million in cash and cash equivalents, and $55.1 million in total liquid assets.

Outlook and guidance

• Full-year 2024 revenue expected between $9 million and $11 million, representing meaningful year-over-year growth.

• Q4 to include shipments of both EW and EC products, with revenue recognized upon delivery to customer sites.

• Revenue ramp in 2025 expected to be back-half loaded, with potential to reach $40–50 million, though no formal guidance provided.

• Management expects continued operating losses and negative cash flows in the near term and will require additional debt or equity financing.

• Second automated production line expected operational by mid-2025, supporting further cost reductions.