Ess Tech signals 8-megawatt hour Energy Base order and 80% cash burn reduction as cost controls accelerate

Earnings Call Insights: ESS Tech, Inc. (GWH) Q2 2025

MANAGEMENT VIEW

* Interim CEO Kelly F. Goodman emphasized the company's position as a technology leader in long-duration energy storage, stating ESS's "proprietary iron flow battery platform is designed to deliver safe, sustainable, nonflammable long-duration energy storage for 10 hours or more." Goodman highlighted four key developments: securing up to $31 million in new capital, reducing operating cash burn rate by approximately 80% in June compared to the Q1 average, achieving a material leap in core stack technology enabling 12 to 17-hour duration and accelerating the cost/performance roadmap by 18 months, and closing the first commercial order for the Energy Base—an 8-megawatt hour project to be delivered in 2026.
* Goodman reported, "Cost of revenue decreased 37% year-over-year. Total operating expenses fell by 45%. Our net loss improved 50%, and adjusted EBITDA improved nearly 60% compared to Q2 of last year."
* Goodman noted new leadership appointments: Jigish Trivedi as Chief Operating Officer and Kate Suhadolnik as interim Chief Financial Officer.
* Interim CFO Kate Suhadolnik stated, "For the second quarter of 2025, we reported GAAP revenue of $2.4 million, a 294% increase from Q1 of 2025, driven by deliveries of what are expected to be our final Energy Warehouses and Energy Centers to a related party as we prepare for the future shift to sales and operating efforts around the Energy Base product."
* Suhadolnik added, "We ended July with cash and cash equivalents of $7.2 million, a meaningful improvement from the end of the second quarter."

OUTLOOK

* Goodman outlined three priorities: delivering on customer commitments with a focus on manufacturing and delivering the first Energy Base systems, scaling with discipline by deploying capital efficiently and controlling costs, and converting commercial momentum into long-term growth by securing multiyear agreements and advancing the pipeline for revenue growth beginning in 2026.
* Suhadolnik did not provide revenue guidance for the remainder of 2025, indicating, "We're hoping to close on some contracts in the second half here that will provide us with some more clarity on our future revenue runway and look forward to giving some updates on that going forward."

FINANCIAL RESULTS

* Suhadolnik reported GAAP cost of revenues at $7.5 million, down 15% versus Q1 2025, and GAAP operating expenses of $6.4 million, down 35% quarter-over-quarter.
* The company secured over $2 million through the Standby Equity Purchase Agreement within the first six weeks, supporting the balance sheet and operational runway.
* The 8-megawatt hour Energy Base order marks a shift away from Energy Warehouses and Energy Centers, with the commercial pipeline now fully focused on the Energy Base or core component sales.

Q&A

* Justin Lars Clare, ROTH Capital Partners: Asked about traction with 1.1 gigawatt hours of Energy Base proposals and early signs of conversion. Goodman responded, "We have already converted one to a win with the sale of the Energy Base... We do expect to be converting some additional proposals to backlog in the back half of this year."
* Clare asked about revenue trajectory for Q3 and Q4. Suhadolnik replied, "At this stage, we're not providing any guidance around revenue for the latter half of the year."
* Clare inquired about the total capital accessed and equity issuance plans. Suhadolnik stated, "We ended July with cash and cash equivalents of $7.2 million... Our focus for the upcoming months and quarter will be to maximize on the SEPA proceeds as much as we can."
* Clare questioned the outlook for cash burn and levers to extend runway. Suhadolnik indicated a continued focus on cost reductions, vendor negotiations, and extending payment terms. Goodman added, "We intend to continue the disciplined approach sort of regardless of what the actual number is that aligns with the direction and the capacity of the business."

SENTIMENT ANALYSIS

* Analysts' tone was neutral, focusing on clarity around commercial traction, future contracts, capital access, and cash runway, without expressing overt skepticism or enthusiasm.
* Management maintained a cautiously optimistic tone, emphasizing operational progress and capital discipline. Goodman stated, "we are not declaring victory, though we are showing real progress."
* Compared to the previous quarter, management's language reflected stronger confidence in cost control and commercial momentum, while analysts remained focused on liquidity and execution risks.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter highlighted a significant reduction in operating cash burn (80% in June), substantial operating cost cuts, and a shift in commercial focus exclusively to the Energy Base product and core components.
* In Q1, management's focus was on the Energy Base launch, early pilot wins, and navigating capital challenges, with ongoing uncertainty around larger contracts and the capital raise.
* The management tone in Q2 was more confident regarding cost discipline and commercial opportunities, while in Q1 the tone was more tentative about capital access and execution.
* No guidance was given for Q3 and Q4 revenue in either quarter, but Q2 remarks signaled greater optimism about pipeline conversion and operational runway.
* Analyst concerns in both quarters centered on liquidity, revenue runway, and contract conversion, with similar lines of questioning.

RISKS AND CONCERNS

* Management acknowledged ongoing challenges in raising additional capital and the need to maintain cost discipline.
* Goodman noted, "we remain focused on disciplined execution and capital control."
* Suhadolnik discussed the impact of recent legislative changes, stating the company's domestic sourcing and manufacturing minimizes exposure to evolving tariffs and trade restrictions.
* There is continued emphasis on the necessity of additional capital to support scaling and long-term growth.

FINAL TAKEAWAY

ESS Tech, Inc. emphasized its operational reset, cost discipline, and sharpened focus on the Energy Base platform, highlighted by an 80% reduction in cash burn, $31 million in new capital, and the company's first commercial Energy Base order. Management remains committed to disciplined growth, capital efficiency, and capturing opportunities as demand for long-duration energy storage accelerates. The company continues to target additional contract wins in the second half of 2025, while managing liquidity and scaling operations to support future revenue growth in 2026 and beyond.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/gwh/earnings/transcripts]

MORE ON ESS TECH

* ESS Tech, Inc. (GWH) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813873-ess-tech-inc-gwh-q2-2025-earnings-call-transcript]
* ESS Tech soars after securing capital to sustain operations, strategy [https://seekingalpha.com/news/4453967-ess-tech-soars-after-securing-capital-to-sustain-operations-strategy]
* Seeking Alpha’s Quant Rating on ESS Tech [https://seekingalpha.com/symbol/GWH/ratings/quant-ratings]
* Historical earnings data for ESS Tech [https://seekingalpha.com/symbol/GWH/earnings]
* Financial information for ESS Tech [https://seekingalpha.com/symbol/GWH/income-statement]