ESS Tech, Inc. Announces Fourth Quarter and Full Year 2024 Financial Results
Completed Commissioning and Grid Interconnection of First Two Energy Centers
Delivered Eight Energy Center Systems to Florida Utility
Achieved Breakeven Profitability on Energy Center Design at the end of Q4, Almost a Year Ahead of Schedule
Announced Energy Base, a New Modular, Non-Containerized Gigawatt-Hour scale LDES Solution
ESS Global Fleet Surpasses 2 GWh of Transacted Energy
ESS Tech, Inc. ("ESS," "ESS, Inc." or the "Company") (NYSE:GWH), a leading manufacturer of iron flow long-duration energy storage (LDES) systems for commercial and utility-scale applications, today announced financial results for its fourth quarter and full year ended December 31, 2024.
"In 2024, ESS completed key metrics to advance our core technology and begin to execute on our previously announced strategic pivot. The first two Energy Centers that we manufactured in 2024 passed site commissioning in Q4 and final commissioning as part of full grid interconnection in Q1 for the first demonstration of the Energy Center form factor in Wilsonville with our local utility customer. We successfully carried out the first commercial deliveries of an additional eight EC systems during Q4 and Q1 to a major Florida utility that are scheduled for commissioning later this year. Our reported revenue for the year of $6.3 million was below the low end of our guidance range due to ongoing partner funding delays, but the Energy Center deliveries represented an important revenue contributor, underscoring our progress with the first Energy Center deployments in Q4. In addition, we aggressively executed our cost-down program to achieve breakeven profitability on our latest EC design, hitting our target almost a year earlier than previously expected. This result was enabled by the innovative efforts of our team to reduce battery pack, balance of system and direct labor costs and helped establish the foundation needed to develop and productize a transformational new product, the Energy Base," said Kelly Goodman, interim CEO of ESS. "Further cementing our differentiation in the energy storage space, the Energy Base is a non-containerized version of our product designed to deliver the gigawatt-hour scale long-duration storage that the energy transition demands. The Energy Base features a modular architecture that enables it to extend energy storage duration with lower cost and improved operational flexibility while customizing capacity and power to customer needs. The Energy Base represents the natural, long-term configuration of the core ESS technology, developed to meet the accelerating market demand for sustainable, safe, long-duration energy storage. I'm pleased with the rapid progress we've made in positioning ESS to capitalize on the energy transition while driving towards profitability. Backed by a suite of American-made products, industry safety certifications and partnerships with SB Energy and Honeywell, our global fleet has already surpassed 2 gigawatt hours of transacted energy worldwide and I'm excited about the transformational opportunity ahead of us as we capitalize on this growing market opportunity."
Recent Business Highlights
- Achieved revenue of $6.3M for FY 2024.
- Announced the Energy Base, ESS' new gigawatt-hour-scale, long-duration energy storage solution. The Energy Base leverages ESS' proven core technologies and features modular architecture designed to deliver a scalable solution for grid-scale applications using a layout that seamlessly integrates with any landscape.
- In January, completed commercial delivery of the first eight Energy Centers™ to a major Florida utility. In addition, ESS successfully completed construction and initial testing of the previously announced demonstration units for a major West Coast utility in December. The EC is a utility-scale, front-of-the-meter long-duration energy storage product which provides up to eight hours of energy storage with a flexible, scalable platform to meet the LDES needs of utilities worldwide.
- In January, became the first energy storage provider to demonstrate MESA compliance and SunSpec Alliance Modbus Certification with the Energy Center™ (EC), ensuring compatibility with the latest integration and communication standards. In addition, the EC received certification to the UL 9540 standard by ETL, a comprehensive safety standard for grid-connected energy storage systems which affirms the safety of the battery system and its environmental performance.
- In February, Kelly Goodman was appointed interim CEO of ESS with the intent to take ESS in a new strategic direction. Ms. Goodman is supported by an Office of the Interim CEO, created to lead this effort. The Office of the Interim CEO will include Ms. Goodman, Tony Rabb, current CFO, and Ben Heng, current EVP of Engineering. In addition, the Board has engaged advisors to evaluate potential commercial or financial transactions.
Conference Call Details
ESS will hold a conference call on Monday, March 31, 2025 at 5:00 p.m. EDT to discuss financial results for its fourth quarter and full year ended December 31, 2024. Interested parties may join the conference call beginning at 5:00 p.m. EDT on Monday, March 31, 2025 via telephone by calling (833) 470-1428 in the U.S., or for international callers, by calling +1 (404) 975-4839 and entering conference ID 424622. A telephone replay will be available until April 7, 2025, by dialing (866) 813-9403 in the U.S., or for international callers, +1 (929) 458-6194 with conference ID 327175. A live webcast of the conference call will be available on ESS' Investor Relations website at http://investors.essinc.com/.
A replay of the call will be available via the web at http://investors.essinc.com/.
About ESS, Inc.
ESS (NYSE:GWH) is the leading manufacturer of long-duration iron flow energy storage solutions. ESS was established in 2011 with a mission to accelerate decarbonization safely and sustainably through longer lasting energy storage. Using easy-to-source iron, salt, and water, ESS iron flow technology enables energy security, reliability and resilience. We build flexible storage solutions that allow our customers to meet increasing energy demand without power disruptions and maximize the value potential of excess energy. For more information visit www.essinc.com.
Use of Non-GAAP Financial Measures
In this press release and the accompanying earnings call, the Company includes Non-GAAP Operating Expenses and Adjusted EBITDA, which are non-GAAP performance measures that the Company uses to supplement its results presented in accordance with U.S. GAAP. As required by the rules of the Securities and Exchange Commission ("SEC"), the Company has provided herein a reconciliation of the non-GAAP financial measures contained in this press release and the accompanying earnings call to the most directly comparable measures under GAAP. The Company's management believes Non-GAAP Operating Expenses and Adjusted EBITDA are useful in evaluating its operating performance and are similar measures reported by publicly-listed U.S. companies, and regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing these non-GAAP measures, the Company's management intends to provide investors with a meaningful, consistent comparison of the Company's profitability for the periods presented. Adjusted EBITDA is not intended to be a substitute for net income/loss or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Further, Non-GAAP Operating Expenses are not intended to be a substitute for GAAP Operating Expenses or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
The Company defines and calculates Non-GAAP Operating Expenses as GAAP Operating Expenses adjusted for stock-based compensation and other special items determined by management as they are not indicative of business operations. The Company defines and calculates Adjusted EBITDA as net loss before interest, other non-operating expense or income, (benefit) provision for income taxes, and depreciation, and further adjusted for stock-based compensation and other special items determined by management, including, but not limited to, fair value adjustments for certain financial liabilities associated with debt and equity transactions as they are not indicative of business operations.
Forward-Looking Statements
This communication contains certain forward-looking statements, including statements regarding ESS and its management team's expectations, hopes, beliefs, intentions or strategies regarding the future. The words "anticipate", "believe", "continue", "could", "estimate", "expect", "intends", "may", "might", "plan", "possible", "potential", "predict", "project", "should", "will" "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the Company's manufacturing plans, the development and launch of the Energy Base product, the Company's order and sales pipeline, the Company's ability to execute on orders, the Company's ability to effectively manage costs, the Company's partnerships with third parties such as SB Energy and Honeywell, and the exploration of potential commercial or financial transactions. These forward-looking statements are based on ESS' current expectations and beliefs concerning future developments and their potential effects on ESS. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. There can be no assurance that the future developments affecting ESS will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond ESS control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, continuing supply chain issues; delays, disruptions, or quality control problems in the Company's manufacturing operations; the Company's ability to hire, train and retain an adequate number of manufacturing employees; issues related to the shipment and installation of the Company's products; issues related to customer acceptance of the Company's products; issues related to the development and launch of the Energy Base product; issues related to the Company's partnerships with third parties; inflationary pressures; risk of loss of government funding for customer projects; and the Company's need to achieve significant business growth to achieve sustained, long-term profitability. Except as required by law, ESS is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
ESS Tech, Inc. Statements of Operations and Comprehensive Loss (Unaudited, in thousands, except share and per share data) |
|||||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Revenue: |
|
|
|
||||
Revenue |
$ |
2,801 |
|
|
$ |
2,796 |
|
Revenue - related parties |
|
49 |
|
|
|
— |
|
Total revenue |
|
2,850 |
|
|
|
2,796 |
|
Cost of revenue |
|
16,038 |
|
|
|
10,312 |
|
Gross profit (loss) |
|
(13,188 |
) |
|
|
(7,516 |
) |
Operating expenses |
|
|
|
||||
Research and development |
|
2,706 |
|
|
|
3,842 |
|
Sales and marketing |
|
1,887 |
|
|
|
2,096 |
|
General and administrative |
|
5,716 |
|
|
|
5,611 |
|
Total operating expenses |
|
10,309 |
|
|
|
11,549 |
|
Loss from operations |
|
(23,497 |
) |
|
|
(19,065 |
) |
Other income, net |
|
|
|
||||
Interest income, net |
|
477 |
|
|
|
1,525 |
|
Gain on revaluation of common stock warrant liabilities |
|
(344 |
) |
|
|
1,375 |
|
Other income (expense), net |
|
(115 |
) |
|
|
35 |
|
Total other income, net |
|
18 |
|
|
|
2,935 |
|
Net loss and comprehensive loss to common stockholders |
$ |
(23,479 |
) |
|
$ |
(16,130 |
) |
|
|
|
|
||||
Net loss per share - basic and diluted |
$ |
(1.97 |
) |
|
$ |
(1.39 |
) |
|
|
|
|
||||
Weighted average shares used in per share calculation - basic and diluted |
|
11,926,137 |
|
|
|
11,570,150 |
|
ESS Tech, Inc. Statements of Operations and Comprehensive Loss (Unaudited, in thousands, except share and per share data) |
|||||||
|
Years Ended December 31, |
||||||
|
2024 |
|
2023 |
||||
Revenue: |
|
|
|
||||
Revenue |
$ |
5,712 |
|
|
$ |
7,537 |
|
Revenue - related parties |
|
583 |
|
|
|
3 |
|
Total revenue |
|
6,295 |
|
|
|
7,540 |
|
Cost of revenue |
|
51,653 |
|
|
|
20,495 |
|
Gross profit (loss) |
|
(45,358 |
) |
|
|
(12,955 |
) |
Operating expenses |
|
|
|
||||
Research and development |
|
11,772 |
|
|
|
42,632 |
|
Sales and marketing |
|
9,161 |
|
|
|
7,744 |
|
General and administrative |
|
23,507 |
|
|
|
22,574 |
|
Total operating expenses |
|
44,440 |
|
|
|
72,950 |
|
Loss from operations |
|
(89,798 |
) |
|
|
(85,905 |
) |
Other income, net |
|
|
|
||||
Interest income, net |
|
3,574 |
|
|
|
5,262 |
|
Gain on revaluation of common stock warrant liabilities |
|
115 |
|
|
|
2,292 |
|
Other income (expense), net |
|
(113 |
) |
|
|
773 |
|
Total other income, net |
|
3,576 |
|
|
|
8,327 |
|
Net loss and comprehensive loss to common stockholders |
$ |
(86,222 |
) |
|
$ |
(77,578 |
) |
|
|
|
|
||||
Net loss per share - basic and diluted |
$ |
(7.32 |
) |
|
$ |
(7.27 |
) |
|
|
|
|
||||
Weighted average shares used in per share calculation - basic and diluted |
|
11,773,596 |
|
|
|
10,663,909 |
|
ESS Tech, Inc. Balance Sheets (Unaudited, in thousands, except share data) |
|||||||
|
December 31,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
13,341 |
|
|
$ |
20,165 |
|
Restricted cash, current |
|
906 |
|
|
|
1,373 |
|
Accounts receivable, net |
|
215 |
|
|
|
1,990 |
|
Short-term investments |
|
18,263 |
|
|
|
87,899 |
|
Inventory |
|
5,641 |
|
|
|
3,366 |
|
Prepaid expenses and other current assets |
|
4,998 |
|
|
|
3,305 |
|
Total current assets |
|
43,364 |
|
|
|
118,098 |
|
Property and equipment, net |
|
20,582 |
|
|
|
16,266 |
|
Intangible assets, net |
|
4,656 |
|
|
|
4,923 |
|
Operating lease right-of-use assets |
|
1,503 |
|
|
|
2,167 |
|
Restricted cash, non-current |
|
948 |
|
|
|
945 |
|
Other non-current assets |
|
760 |
|
|
|
833 |
|
Total assets |
$ |
71,813 |
|
|
$ |
143,232 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
8,070 |
|
|
$ |
2,755 |
|
Accrued and other current liabilities |
|
9,315 |
|
|
|
10,755 |
|
Accrued product warranties |
|
3,288 |
|
|
|
2,129 |
|
Operating lease liabilities, current |
|
1,692 |
|
|
|
1,581 |
|
Deferred revenue, current |
|
5,237 |
|
|
|
2,546 |
|
Total current liabilities |
|
27,602 |
|
|
|
19,766 |
|
Operating lease liabilities, non-current |
|
— |
|
|
|
957 |
|
Deferred revenue, non-current |
|
— |
|
|
|
3,835 |
|
Deferred revenue, non-current - related parties |
|
14,400 |
|
|
|
14,400 |
|
Common stock warrant liabilities |
|
802 |
|
|
|
917 |
|
Other non-current liabilities |
|
125 |
|
|
|
— |
|
Total liabilities |
|
42,929 |
|
|
|
39,875 |
|
Stockholders' equity: |
|
|
|
||||
Preferred stock ($0.0001 par value; 200,000,000 shares authorized, none issued and outstanding as of December 31, 2024 and 2023) |
|
— |
|
|
|
— |
|
Common stock ($0.0001 par value; 1,000,000,000 shares authorized, 11,986,516 and 11,614,127 shares issued and outstanding as of December 31, 2024 and 2023, respectively) |
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
811,262 |
|
|
|
799,513 |
|
Accumulated deficit |
|
(782,379 |
) |
|
|
(696,157 |
) |
Total stockholders' equity |
|
28,884 |
|
|
|
103,357 |
|
Total liabilities and stockholders' equity |
$ |
71,813 |
|
|
$ |
143,232 |
|
ESS Tech, Inc. Consolidated Statements of Cash Flows (Unaudited, in thousands) |
|||||||
|
Years Ended December 31, |
||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(86,222 |
) |
|
$ |
(77,578 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
4,724 |
|
|
|
6,513 |
|
Non-cash interest income |
|
(2,422 |
) |
|
|
(3,635 |
) |
Non-cash lease expense |
|
1,350 |
|
|
|
1,234 |
|
Stock-based compensation expense |
|
11,575 |
|
|
|
10,635 |
|
Inventory write-down and losses on noncancellable purchase commitments |
|
4,904 |
|
|
|
11,932 |
|
Change in fair value of common stock warrant liabilities |
|
(115 |
) |
|
|
(2,292 |
) |
Other non-cash (income) expenses, net |
|
459 |
|
|
|
(60 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable, net |
|
1,549 |
|
|
|
3,633 |
|
Inventory |
|
(8,634 |
) |
|
|
(14,661 |
) |
Prepaid expenses and other assets |
|
(1,620 |
) |
|
|
2,422 |
|
Accounts payable |
|
4,243 |
|
|
|
(229 |
) |
Accrued and other liabilities |
|
(719 |
) |
|
|
(3,378 |
) |
Accrued product warranties |
|
1,159 |
|
|
|
486 |
|
Deferred revenue |
|
(918 |
) |
|
|
11,500 |
|
Operating lease liabilities |
|
(1,532 |
) |
|
|
(1,418 |
) |
Net cash used in operating activities |
|
(72,219 |
) |
|
|
(54,896 |
) |
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(7,294 |
) |
|
|
(5,790 |
) |
Maturities and purchases of short-term investments, net |
|
72,051 |
|
|
|
20,861 |
|
Net cash provided by investing activities |
|
64,757 |
|
|
|
15,071 |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Proceeds from issuance of common stock and common stock warrants, net of issuance costs |
|
— |
|
|
|
27,132 |
|
Payments on notes payable |
|
— |
|
|
|
(1,733 |
) |
Proceeds from stock options exercised |
|
86 |
|
|
|
237 |
|
Repurchase of shares from employees for income tax withholding purposes |
|
(297 |
) |
|
|
(310 |
) |
Proceeds from contributions to Employee Stock Purchase Plan |
|
385 |
|
|
|
541 |
|
Other, net |
|
— |
|
|
|
(214 |
) |
Net cash provided by financing activities |
|
174 |
|
|
|
25,653 |
|
|
|
|
|
||||
Net change in cash, cash equivalents and restricted cash |
|
(7,288 |
) |
|
|
(14,172 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
22,483 |
|
|
|
36,655 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
15,195 |
|
|
$ |
22,483 |
|
ESS Tech, Inc. Consolidated Statements of Cash Flows (continued) (Unaudited, in thousands) |
|||||
|
Years Ended December 31, |
||||
|
2024 |
|
2023 |
||
Supplemental disclosures of cash flow information: |
|
|
|
||
Cash paid for operating leases included in cash used in operating activities |
$ |
1,738 |
|
$ |
1,670 |
Non-cash investing and financing transactions: |
|
|
|
||
Common stock warrants issued for the acquisition of intangible assets |
|
— |
|
|
4,990 |
Purchase of property and equipment included in accounts payable and accrued and other current liabilities |
|
1,586 |
|
|
704 |
Adjustment to right-of-use assets from lease modification |
|
686 |
|
|
— |
Transfers between inventory and property and equipment, net |
|
1,051 |
|
|
— |
|
|
|
|
||
Cash and cash equivalents |
$ |
13,341 |
|
$ |
20,165 |
Restricted cash, current |
|
906 |
|
|
1,373 |
Restricted cash, non-current |
|
948 |
|
|
945 |
Total cash, cash equivalents and restricted cash shown in the statements of cash flows |
$ |
15,195 |
|
$ |
22,483 |
ESS Tech, Inc. Reconciliation of GAAP to Non-GAAP Operating Expenses (Unaudited, in thousands) |
|||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||
|
|
2024 |
|
|
|
2024 |
|
Research and development |
$ |
2,706 |
|
|
$ |
11,772 |
|
Less: stock-based compensation(1) |
|
(534 |
) |
|
|
(2,457 |
) |
Non-GAAP research and development |
$ |
2,172 |
|
|
$ |
9,315 |
|
|
|
|
|
||||
Sales and marketing |
$ |
1,887 |
|
|
$ |
9,161 |
|
Less: stock-based compensation(1) |
|
(208 |
) |
|
|
(675 |
) |
Non-GAAP sales and marketing |
$ |
1,679 |
|
|
$ |
8,486 |
|
|
|
|
|
||||
General and administrative |
$ |
5,716 |
|
|
$ |
23,507 |
|
Less: stock-based compensation(1) |
|
(1,690 |
) |
|
|
(5,970 |
) |
Non-GAAP general and administrative |
$ |
4,026 |
|
|
$ |
17,537 |
|
|
|
|
|
||||
Total operating expenses |
$ |
10,309 |
|
|
$ |
44,440 |
|
Less: stock-based compensation |
|
(2,432 |
) |
|
|
(9,102 |
) |
Non-GAAP total operating expenses |
$ |
7,877 |
|
|
$ |
35,338 |
|
(1) For purposes of calculating Non-GAAP total operating expenses, stock-based compensation is allocated on a departmental basis based on the classification of the award holder. |
|||||||
ESS Tech, Inc. Reconciliation of GAAP Net Loss to Adjusted EBITDA (Unaudited, in thousands) |
||||||||
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||
|
|
2024 |
|
2024 |
||||
Net loss |
|
$ |
(23,479 |
) |
|
$ |
(86,222 |
) |
Interest income, net |
|
|
(477 |
) |
|
|
(3,574 |
) |
Stock-based compensation |
|
|
3,037 |
|
|
|
11,575 |
|
Depreciation and amortization |
|
|
1,422 |
|
|
|
4,724 |
|
Gain on revaluation of common stock warrant liabilities |
|
|
344 |
|
|
|
(115 |
) |
Environmental, Health & Safety compliance estimate |
|
|
509 |
|
|
|
899 |
|
Financing costs |
|
|
285 |
|
|
|
1,267 |
|
Other income (expense), net |
|
|
115 |
|
|
|
113 |
|
Adjusted EBITDA |
|
$ |
(18,244 |
) |
|
$ |
(71,333 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250331518457/en/
Investors:
Erik Bylin
[email protected]
Media:
Morgan Pitts
503.568.0755
[email protected]