Eos Energy Enterprises NASDAQ: EOSE reported record second-quarter revenue and backlog while narrowing its 2026 revenue outlook as it accelerates the consolidation of manufacturing operations at its Thorn Hill facility.
Chief Executive Officer Joe Mastrangelo said the company shipped more product than in any prior quarter, expanded its backlog and made a strategic decision to move production from Turtle Creek to Thorn Hill. The move is expected to reduce near-term revenue capacity but lower the company’s cost base as it exits 2026.
Eos narrowed its 2026 revenue outlook to between $300 million and $350 million. Mastrangelo said the reduction at the upper end reflects planned downtime for Line 1 during its relocation and upgrade, rather than an operating shortfall. The company reported nearly $126 million in revenue during the first half, exceeding its full-year 2025 revenue.
Second-Quarter Financial Results
Revenue rose to a record $68.8 million in the second quarter, an increase of 351% from a year earlier and 21% sequentially. Cube deliveries increased 207% year over year and 20% from the first quarter.
The company recorded a gross loss of $48.8 million, although its gross margin improved by 132 percentage points year over year and seven points sequentially. Adjusted gross loss, excluding stock-based compensation and depreciation and amortization, was $42.9 million, for an adjusted gross margin of negative 62%.
Chief Financial Officer Alessandro Lagi said this was Eos’ seventh consecutive quarter of gross-margin improvement. He attributed some remaining pressure to underutilization at the newly commissioned Thorn Hill line and increased field deployment, commissioning and DawnOS upgrade work.
Operating expenses totaled $35 million, up 6% year over year and essentially flat sequentially. Eos said SG&A expenses declined 4% while research and development spending increased 46% as it invested in software and product development.
Net loss was $276 million, while adjusted EBITDA loss was $71.4 million, representing an adjusted EBITDA margin of negative 104%. Lagi said the reported net loss was primarily affected by non-cash fair-value adjustments associated with warrants and derivative liabilities.
Eos ended the quarter with $364 million in total cash. The company said operational cash use closely tracked its adjusted EBITDA loss, with working capital not consuming incremental cash despite revenue growth and continued investment in the Thorn Hill buildout. Eos also said it expects to close the second tranche of its Department of Energy loan by the end of the quarter, subject to loan-agreement conditions.
Manufacturing Consolidation and Cost Reduction
Chief Operating Officer John Mahaz said Turtle Creek increased cube output by 20% sequentially and reached an annualized production rate of about 1.5 gigawatt-hours in June. Direct labor cost per cube declined 20% sequentially, while material cost per cube improved 1% excluding the effects of tariff-free imported-component base rates in prior periods.
Thorn Hill’s Line 2 accounted for only 1% of second-quarter production as the company operated it on a partial shift while validating performance and training staff. Mahaz said initial battery cycle times on Line 2 were 10% faster than Line 1, while bipolar cycle times were 11% faster.
The company plans to consolidate Line 1 at Thorn Hill, where it will be upgraded to a single-piece-flow design and incorporate redundancies intended to reduce operational bottlenecks. Mahaz said Eos expects the initiative could reduce conversion costs by an additional 10% to 15%, with an estimated payback period of roughly nine months after a modest relocation and integration investment.
Lagi outlined four cost-reduction drivers intended to support positive adjusted gross margins:
- Approximately 25 percentage points of improvement from material-cost reductions, longer-term supplier arrangements and more than 90 cost-reduction initiatives.
- About 20 percentage points from lower conversion costs through consolidation into a single manufacturing structure and greater automation at Thorn Hill.
- Roughly 20 percentage points from project and field-service improvements as DawnOS upgrades are completed and more execution work shifts to internal teams.
- About eight percentage points from better yields, tooling upgrades and tighter component tolerances.
The company said these initiatives could provide more than 72 points of adjusted gross-margin improvement over the next 12 months, assuming execution of its plan and expected production volumes.
Backlog, Fleet Performance and Frontier Power
Eos reported an $807 million backlog and a pipeline of $24.6 billion, or nearly 112 gigawatt-hours, up 31% from a year earlier. The company said 51% of its pipeline is for projects lasting eight hours or longer, while 32% is related to data centers. Six customers placed orders during the quarter, including four new customers and two repeat customers.
The company’s fleet has discharged 6.5 gigawatt-hours cumulatively and completed more than 3.9 million cycles. Its Z3 fleet has operated at an average round-trip efficiency of 78% across a 2,120 state-of-charge window, including both DawnOS-upgraded and non-upgraded units. Mastrangelo said the top end of the fleet’s performance range has exceeded 90%, while the range of results has narrowed.
After the quarter, Eos said it received a strategic partnership agreement under the U.S. Department of War’s Golden Dome for America program, signed a 750-megawatt-hour master supply agreement with CAPAC for Germany, Austria and Switzerland, and announced a $100 million purchase order for the first phase of the Blanquilla project in ERCOT.
The company also highlighted Frontier Power USA, its joint venture designed to help projects obtain capital and move into construction. Eos said Frontier Power USA initially raised $263 million of gross proceeds to support an estimated $1 billion of project deployment. The platform has a 16-gigawatt-hour opportunity pipeline, including five gigawatt-hours acquired, selected or under active due diligence, and 1.8 gigawatt-hours under construction or approaching full notice to proceed.
Mastrangelo said Frontier Power USA’s first projects are expected to be online by the third quarter of 2027. Eos expects to participate through long-term service agreements, its economic ownership in the platform and potential project sales or future platform monetization.
About Eos Energy Enterprises (NASDAQ:EOSE)
Eos Energy Enterprises specializes in the development and deployment of scalable, long-duration energy storage systems designed to support the integration of renewable power and enhance grid reliability. The company's core technology centers on its proprietary zinc hybrid cathode (Znyth™) battery platform, which aims to deliver safe, low-cost, and durable performance for utility, commercial and industrial, and microgrid applications.
The company's flagship product, the Aurora™ energy storage system, combines its Znyth™ cells with modular power conversion and controls to offer flexible capacity ranging from one to three hours of discharge duration.
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