• Revenue: $0.9 million for Q3 2024, unchanged from the prior quarter and 25% higher than the prior year.
• Cost of Goods Sold (COGS): $25.8 million, including $9.8 million in noncash items.
• Operating Loss: $53.3 million, with an adjusted operating loss of $35.0 million excluding noncash items.
• Net Loss to Shareholders: $342.9 million, compared to net income of $14.9 million in the prior year.
• Adjusted EBITDA: Negative $46.1 million.
• Adjusted EPS: Negative 44.
• Backlog: $589 million, up 9% from last year.
• Commercial Pipeline: $14.2 billion, up $400 million from the prior quarter.
• Cash Position: $23 million at quarter end, not including $7.06 million in restricted cash.
• Revenue Guidance for 2024: Reduced to approximately $15 million due to supply chain challenges.

• Warning! GuruFocus has detected 9 Warning Signs with EOSE.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Eos Energy Enterprises Inc (NASDAQ:EOSE) secured a significant $73 million order from City Utilities of Springfield, Missouri, marking their largest energy storage system order to date.
• The company achieved a milestone by securing $65 million in funding from Cerberus, enhancing their financial capacity to scale operations.
• Eos Energy Enterprises Inc (NASDAQ:EOSE) has made substantial progress in their commercial pipeline, which now stands at $14.2 billion, reflecting a 13% increase in storage capacity.
• The company has successfully implemented automation in their manufacturing process, achieving a 97% first-pass yield and reducing cycle times to less than ten seconds.
• Eos Energy Enterprises Inc (NASDAQ:EOSE) is actively working on diversifying their supply chain and has already started implementing automation to increase output by five times.

Negative Points

• The company faced supply chain challenges, particularly with the delivery of steel enclosures, impacting their revenue and production schedules.
• Eos Energy Enterprises Inc (NASDAQ:EOSE) reported a third-quarter revenue of only $0.9 million, significantly lower than expectations due to supply chain disruptions.
• The company experienced an operating loss of $53.3 million in the quarter, driven by increased costs and supply chain issues.
• There was a significant net loss to shareholders of $342.9 million, primarily due to non-cash movements related to derivatives and share price adjustments.
• Eos Energy Enterprises Inc (NASDAQ:EOSE) had to reduce their full-year revenue guidance to approximately $15 million due to ongoing supply chain constraints.

Q & A Highlights

Q: Can you provide insight into the issues causing delays with the new inline enclosures? A: Joe Mastrangelo, CEO, explained that the delays were due to challenges faced by their supplier in transitioning from prototype to scaled manufacturing of steel enclosures. The company is working with the supplier to resolve these issues and is also seeking additional suppliers to ensure future supply chain stability.

Q: How quickly can the supply chain be dual-sourced to prevent future delays? A: Nathan Kroeker, CFO, stated that they are already in the process of bringing in a second supplier, with a prototype in-house for quality verification. The goal is to start production with this second supplier by the end of the year.

Q: Have you received any early customer feedback on the Z3 battery installations? A: Joe Mastrangelo, CEO, mentioned that while they are still in the process of installing the Z3 batteries, initial results are positive. However, more work is needed to fully assess customer feedback.

Q: How does the current political environment affect your pipeline conversion and potential delays? A: Joe Mastrangelo, CEO, emphasized that the need for energy storage is critical regardless of political changes. He highlighted the importance of American-built energy storage and expressed confidence in the continued demand for their technology.

Q: Is the shipping of any of the $589 million backlog contingent on closing insurance? A: Joe Mastrangelo, CEO, clarified that the firm orders in their backlog are not contingent on insurance. The insurance products are intended to accelerate pipeline conversion from opportunities to booked orders.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.