Eos Expects Revenue of $82 Million to $83 Million as Gross Margin Remains Negative
Key Facts
Eos Energy Enterprises said on October 19 it expects preliminary revenue of $82 million to $83 million for the third quarter of 2026, with gross margin remaining negative. The company said the expected revenue range represents growth of approximately 169% to 172% from the same period a year earlier. The estimates cover the quarter ended September 30, while the company expects full-year revenue to fall in the lower half of its annual guidance range. Both ends of the preliminary revenue range exceed the $68.8 million the company reported for the second quarter of 2026. Eos had reported second-quarter revenue in its financial results statement for that quarter before providing the preliminary update for the following period.
Eos expects a third-quarter gross margin of negative 55% to negative 53% under U.S. generally accepted accounting principles, according to its preliminary statement. That compares with a gross margin of negative 71% in the second quarter of the same year, according to the company's previously reported results. The company had described its second-quarter margin in its statement as "negative 71%," while the new preliminary range points to a narrowing loss at the gross profit level. Eos attributed the expected margin improvement to higher production volumes during the period, coupled with lower conversion costs per unit produced. Despite the improvement from the previous quarter, the expected gross margin remains negative at both ends of the range the company provided in its third-quarter update.
On operations, Eos said shipments rose approximately 23% in the third quarter from the previous quarter, supported by the continued production ramp-up on the second line at its Turtle Creek facility. The line began commercial production in June 2026, according to the company's September announcement on financing the facility's expansion. Eos is ramping up the line's production to reach its annual nameplate capacity of approximately 2 gigawatt-hours once the ramp-up is complete. Third-quarter shipment growth thus came in the period following the start of the line's commercial operations, as the company continued to expand its output. The company linked the shipment increase specifically to the ongoing ramp-up on this line, while attributing the gross margin improvement to higher production volumes and lower conversion costs per unit.
Eos had total cash, including restricted cash, of approximately $344 million at the end of September, according to figures in its preliminary third-quarter update. The total on the same basis was $364.1 million at the end of June, according to its second-quarter results statement, marking a decline between the two period ends. In September, the company announced it had received an $87 million disbursement under its U.S. Department of Energy loan facility to support the second production line at Turtle Creek. The disbursement brought total drawdowns under the facility to approximately $178 million at the time of the announcement, according to Eos's financing statement. The disbursement followed the start of commercial operations on the line in June, as the company continued working to ramp up production to its stated annual nameplate capacity.
On contracted business, the company's backlog stood at approximately $765 million at the end of September, according to the preliminary results update. That compares with a backlog of $807 million at the end of June, as reported in its second-quarter results statement, representing a decline between the two periods. Projects announced in September included an MN8 project supporting Google's data centers in the region, which includes an Eos energy storage system. The system planned for the project has a power rating of 10 megawatts and storage capacity of 100 megawatt-hours, according to the company's project announcement. The project plan calls for commercial operations of the long-duration storage system to begin in 2030, the date specified for this project in the announcement of the data center collaboration.
For the rest of the year, Eos said it expects 2026 revenue in the "lower half of its $300 million to $350 million range." The company linked its annual outlook to plans to add the final operating shift at its Turtle Creek facility during the last quarter of the year, according to the preliminary results statement. Adding the shift is intended to achieve continuous operations at the facility as part of completing the production ramp-up outlined in the company's operational update. This fourth-quarter timetable follows shipment growth in the third quarter, as Eos continues to ramp up production on the second line, which entered commercial operations in June. The third-quarter earnings call is scheduled for November 5, 2026, at 8:30 a.m. Eastern Standard Time, according to the schedule posted on the company's investor relations website.