Eos Expects Revenue Growth of Up to 172% as Gross Margin Remains Negative
Key Facts
Eos Energy Enterprises announced preliminary results on October 19, forecasting revenue of between $82 million and $83 million for the third quarter of 2026, with gross margin remaining negative. The revenue range represents year-on-year growth of about 169% to 172%, according to the company's statement, though the estimates are not final results. The company also expects revenue to rise about 19% to 21% from the previous quarter. In its filing with the U.S. Securities and Exchange Commission, it estimated gross margin at between negative 55% and negative 53%. Despite the margin remaining negative, Eos expects an improvement of about 16 to 18 percentage points from the second quarter.
On manufacturing, Eos said shipments rose about 23% from the previous quarter, supported by expanded production at its Thorn Hill facility. The second production line contributed about 17% of total battery production during the quarter, according to the preliminary results statement. The company linked further margin improvement to higher production volumes and increased manufacturing capacity utilization. It listed the consolidation of manufacturing operations at a single site among the factors it is relying on to improve margins. It also said in its filing that ongoing cost-cutting initiatives form part of its efforts to improve overall performance as manufacturing expands.
The company's cash, including restricted cash, stood at about $344 million at the end of September, according to its filing with the U.S. Securities and Exchange Commission. Operating cash inflows totaled about $114 million during the third quarter, according to Eos' statement. These inflows came primarily from customer payments and project-related collections, alongside tax credits that the company listed among its sources of cash inflows. Capital expenditure during the period, meanwhile, totaled about $35 million. Eos said most of this spending went toward completing automation of the second production line as part of the development of its manufacturing capabilities.
Eos announced in September that it had received an $87 million advance under its U.S. Department of Energy loan to finance manufacturing at Thorn Hill. The financing is tied to manufacturing work at the facility where the company is consolidating its production lines. Chief Operating Officer John Mahaz said in the financing statement: "Operating two production lines under one roof makes more efficient use of our engineering, support and labor resources." The company's order backlog stood at about $765 million at the end of the third quarter, according to its SEC filing. That backlog coincided with continued production expansion and spending on automation of the second line.
Among the projects the company announced in September was a project with MN8 Energy and Google that includes an Eos energy storage system. The system has a power capacity of 10 megawatts and a storage capacity of 100 megawatt-hours, according to the company's project statement. The project adds power that can be dispatched when needed to the grid serving Google's data centers in the region. According to the announcement, Eos' role in the project involves supplying a long-duration energy storage system. The long-duration storage component is expected to enter operation in 2030, according to the timeline announced by the company.
For 2026, Eos said it expects revenue to fall in the lower half of its $300 million to $350 million guidance range. That places its annual forecast near the lower end of the range, despite the revenue increase it expects in the third quarter compared with the previous quarter. On manufacturing expansion, the company is targeting annual capacity of about 4 gigawatt-hours at its Thorn Hill facility. Reaching that capacity depends on completing the relocation of the other production line and obtaining lender approvals, according to its financing announcement. The third-quarter earnings conference call is scheduled for November 5, 2026, at 8:30 a.m. U.S. Eastern Time.