ESS Tech, Inc. Announces First Quarter 2024 Financial Results
Q1 Revenue of
Partnered with
Completed Testing of
Ordered Second Power Module Automation Line with 40% Greater Production Capacity
Exited Q1 with Cash and Short-Term Investments over
“I’m pleased with the team’s execution in the first quarter, where we again made tremendous progress across a broad number of fronts and achieved
Recent Business Highlights
- EC products received the highest level of IEEE 693 rating, a widely-accepted seismic rating for energy infrastructure, making ESS the first non-lithium, grid-scale LDES provider to receive such a rating.
- Named as one of Fast Company’s 2024 Most Innovative Companies in the energy category.
- Named as a finalist for the Reuters 2024 Global Energy Transition Awards in “The Technologies of Change - Accelerating Decarbonization” category, which recognizes revolutionary technology in the energy sector.
-
In addition to IEEE seismic certification, completed of all of the more than 90 tests to validate operations, safety and performance of our first Energy Center™. ESS will start building our second EC in the beginning of Q3, which will be deployed next to the first EC, both for Portland General Electric. We expect to start building and shipping our first commercial ECs in the second half of 2024 for delivery to
Tampa Electric and theSacramento Municipal Utility District , or SMUD. - Ordered a second power module automation line, with the capability of producing more than 600 MWh per year, 40% more than the first automation line, which translates into substantially lower capex dollars per MWh of production capacity investment. This second line is expected to be operational in the 1H of 2025.
- Installed an Energy Warehouse™ system at Burbank Water and Power, their first utility-scale battery storage project. This EW is paired with an on-site solar array where ESS technology will demonstrate the critical role of LDES in a fully renewable grid.
-
Completed commissioning of an Energy Warehouse™ (EW) system at
Schiphol Airport inAmsterdam , the second largest airport in mainlandEurope , which will be used to help advance Schiphol Airport’s sustainability strategy. The EW system will be used to recharge Electric Ground Power Units (E-GPU), which are intended to replace the diesel ground power units currently used to supply electrical power to aircraft when parked at the airport.
Conference Call Details
ESS will hold a conference call on
A replay of the call will be available via the web at http://investors.essinc.com/.
About
At ESS (NYSE: GWH), our mission is to accelerate global decarbonization by providing safe, sustainable, long-duration energy storage that powers people, communities and businesses with clean, renewable energy anytime and anywhere it’s needed. As more renewable energy is added to the grid, long-duration energy storage is essential to providing the reliability and resiliency we need when the sun is not shining and the wind is not blowing.
Our technology uses earth-abundant iron, salt and water to deliver environmentally safe solutions capable of providing up to 12 hours of flexible energy capacity for commercial and utility-scale energy storage applications. Established in 2011,
Use of Non-GAAP Financial Measures
In this press release and the accompanying earnings call, the Company includes Non-GAAP Operating Expenses and Adjusted EBITDA, which are non-GAAP performance measures that the Company uses to supplement its results presented in accordance with
The Company defines and calculates Non-GAAP Operating Expenses as GAAP Operating Expenses adjusted for stock-based compensation and other special items determined by management as they are not indicative of business operations. The Company defines and calculates Adjusted EBITDA as net loss before interest, other non-operating expense or income, (benefit) provision for income taxes, and depreciation and amortization, and further adjusted for stock-based compensation and other special items determined by management, including, but not limited to, fair value adjustments for certain financial liabilities associated with debt and equity transactions as they are not indicative of business operations.
Forward-Looking Statements
This communication contains certain forward-looking statements, including statements regarding ESS and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intends”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “will” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the Company’s manufacturing plans, the Company’s order and sales pipeline, the Company’s ability to execute on orders, the Company’s ability to effectively manage costs, and the Company’s partnerships with third parties such as Amsterdam Airport Schiphol, Burbank Water and Power, Sapele, and the
Source:
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (in thousands, except share and per share data) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Revenue: |
|
|
|
|
||||
Revenue |
|
$ |
2,214 |
|
|
$ |
371 |
|
Revenue - related parties |
|
|
524 |
|
|
$ |
1 |
|
Total revenue |
|
|
2,738 |
|
|
$ |
372 |
|
Cost of revenue |
|
|
11,126 |
|
|
|
— |
|
Gross profit (loss) |
|
|
(8,388 |
) |
|
|
372 |
|
Operating expenses: |
|
|
|
|
||||
Research and development |
|
|
3,546 |
|
|
|
17,732 |
|
Sales and marketing |
|
|
2,034 |
|
|
|
1,852 |
|
General and administrative |
|
|
5,526 |
|
|
|
5,287 |
|
Total operating expenses |
|
|
11,106 |
|
|
|
24,871 |
|
Loss from operations |
|
|
(19,494 |
) |
|
|
(24,499 |
) |
Other income (expenses), net: |
|
|
|
|
||||
Interest income, net |
|
|
1,239 |
|
|
|
1,252 |
|
Gain on revaluation of common stock warrant liabilities |
|
|
— |
|
|
|
688 |
|
Other income (expense), net |
|
|
(55 |
) |
|
|
658 |
|
Total other income, net |
|
|
1,184 |
|
|
|
2,598 |
|
Net loss and comprehensive loss to common stockholders |
|
$ |
(18,310 |
) |
|
$ |
(21,901 |
) |
|
|
|
|
|
||||
Net loss per share - basic and diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
||||
Weighted-average shares used in per share calculation - basic and diluted |
|
|
174,514,538 |
|
|
|
154,123,911 |
|
Condensed Consolidated Balance Sheets (unaudited) (in thousands, except share data) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
36,332 |
|
|
$ |
20,165 |
|
Restricted cash, current |
|
906 |
|
|
|
1,373 |
|
Accounts receivable, net |
|
1,039 |
|
|
|
1,990 |
|
Short-term investments |
|
53,220 |
|
|
|
87,899 |
|
Inventory |
|
3,161 |
|
|
|
3,366 |
|
Prepaid expenses and other current assets |
|
3,588 |
|
|
|
3,305 |
|
Total current assets |
|
98,246 |
|
|
|
118,098 |
|
Property and equipment, net |
|
16,928 |
|
|
|
16,266 |
|
Intangible assets, net |
|
4,857 |
|
|
|
4,923 |
|
Operating lease right-of-use assets |
|
1,841 |
|
|
|
2,167 |
|
Restricted cash, non-current |
|
946 |
|
|
|
945 |
|
Other non-current assets |
|
816 |
|
|
|
833 |
|
Total assets |
$ |
123,634 |
|
|
$ |
143,232 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
2,910 |
|
|
$ |
2,755 |
|
Accrued and other current liabilities |
|
6,552 |
|
|
|
10,755 |
|
Accrued product warranties |
|
3,322 |
|
|
|
2,129 |
|
Operating lease liabilities, current |
|
1,548 |
|
|
|
1,581 |
|
Deferred revenue, current |
|
5,555 |
|
|
|
2,546 |
|
Total current liabilities |
|
19,887 |
|
|
|
19,766 |
|
Operating lease liabilities, non-current |
|
610 |
|
|
|
957 |
|
Deferred revenue, non-current |
|
— |
|
|
|
3,835 |
|
Deferred revenue, non-current - related parties |
|
14,400 |
|
|
|
14,400 |
|
Common stock warrant liabilities |
|
917 |
|
|
|
917 |
|
Other non-current liabilities |
|
— |
|
|
|
— |
|
Total liabilities |
|
35,814 |
|
|
|
39,875 |
|
Stockholders' equity: |
|
|
|
||||
Preferred stock ( |
|
— |
|
|
|
— |
|
Common stock ( |
|
18 |
|
|
|
18 |
|
Additional paid-in capital |
|
802,269 |
|
|
|
799,496 |
|
Accumulated deficit |
|
(714,467 |
) |
|
|
(696,157 |
) |
Total stockholders' equity |
|
87,820 |
|
|
|
103,357 |
|
Total liabilities and stockholders' equity |
$ |
123,634 |
|
|
$ |
143,232 |
|
Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) |
|||||||
|
Three Months Ended |
||||||
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(18,310 |
) |
|
$ |
(21,901 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
1,219 |
|
|
|
1,077 |
|
Non-cash interest income |
|
(995 |
) |
|
|
(762 |
) |
Non-cash lease expense |
|
326 |
|
|
|
299 |
|
Stock-based compensation expense |
|
2,854 |
|
|
|
2,059 |
|
Inventory write-down and losses on noncancellable purchase commitments |
|
(1,979 |
) |
|
|
— |
|
Change in fair value of common stock warrant liabilities |
|
— |
|
|
|
(688 |
) |
Other non-cash (income) expenses, net |
|
29 |
|
|
|
(48 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable, net |
|
1,309 |
|
|
|
4,330 |
|
Inventory |
|
1,145 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
(266 |
) |
|
|
1,731 |
|
Accounts payable |
|
153 |
|
|
|
(529 |
) |
Accrued and other current liabilities |
|
(4,024 |
) |
|
|
(4,657 |
) |
Accrued product warranties |
|
1,193 |
|
|
|
1,231 |
|
Deferred revenue |
|
(1,184 |
) |
|
|
(306 |
) |
Operating lease liabilities |
|
(380 |
) |
|
|
(346 |
) |
Net cash used in operating activities |
|
(18,910 |
) |
|
|
(18,510 |
) |
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(953 |
) |
|
|
(2,610 |
) |
Maturities and purchases of short-term investments, net |
|
35,645 |
|
|
|
74,668 |
|
Net cash provided by investing activities |
|
34,692 |
|
|
|
72,058 |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Payments on notes payable |
|
— |
|
|
|
(400 |
) |
Proceeds from stock options exercised |
|
— |
|
|
|
104 |
|
Repurchase of shares from employees for income tax withholding purposes |
|
(81 |
) |
|
|
— |
|
Other, net |
|
— |
|
|
|
(7 |
) |
Net cash used in financing activities |
|
(81 |
) |
|
|
(303 |
) |
|
|
|
|
||||
Net change in cash, cash equivalents and restricted cash |
|
15,701 |
|
|
|
53,245 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
22,483 |
|
|
|
36,655 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
38,184 |
|
|
$ |
89,900 |
|
Condensed Consolidated Statements of Cash Flows (continued) (unaudited) (in thousands) |
|||||
|
Three Months Ended |
||||
|
|
2024 |
|
|
2023 |
Supplemental disclosures of cash flow information: |
|
|
|
||
Cash paid for operating leases included in cash used in operating activities |
$ |
449 |
|
$ |
413 |
Non-cash investing and financing transactions: |
|
|
|
||
Purchase of property and equipment included in accounts payable and accrued and other current liabilities |
|
517 |
|
|
623 |
Transfers between inventory and property and equipment, net |
|
1,051 |
|
|
— |
|
|
|
|
||
Cash and cash equivalents |
$ |
36,332 |
|
$ |
87,811 |
Restricted cash, current |
|
906 |
|
|
1,413 |
Restricted cash, non-current |
|
946 |
|
|
676 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows |
$ |
38,184 |
|
$ |
89,900 |
Reconciliation of GAAP to Non-GAAP Operating Expenses (unaudited) (in thousands) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Research and development |
|
$ |
3,546 |
|
|
$ |
17,732 |
|
Less: stock-based compensation |
|
|
(401 |
) |
|
|
(993 |
) |
Non-GAAP research and development |
|
$ |
3,145 |
|
|
$ |
16,739 |
|
|
|
|
|
|
||||
Sales and marketing |
|
$ |
2,034 |
|
|
$ |
1,852 |
|
Less: stock-based compensation |
|
|
(95 |
) |
|
|
(150 |
) |
Non-GAAP sales and marketing |
|
$ |
1,939 |
|
|
$ |
1,702 |
|
|
|
|
|
|
||||
General and administrative |
|
$ |
5,526 |
|
|
$ |
5,287 |
|
Less: stock-based compensation |
|
|
(1,434 |
) |
|
|
(916 |
) |
Non-GAAP general and administrative |
|
$ |
4,092 |
|
|
$ |
4,371 |
|
|
|
|
|
|
||||
Total operating expenses |
|
$ |
11,106 |
|
|
$ |
24,871 |
|
Less: stock-based compensation |
|
|
(1,930 |
) |
|
|
(2,059 |
) |
Non-GAAP total operating expenses |
|
$ |
9,176 |
|
|
$ |
22,812 |
|
Reconciliation of GAAP Net Loss to Adjusted EBITDA (unaudited) (in thousands) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Net loss |
|
$ |
(18,310 |
) |
|
$ |
(21,901 |
) |
Interest income, net |
|
|
(1,239 |
) |
|
|
(1,252 |
) |
Stock-based compensation |
|
|
2,854 |
|
|
|
2,059 |
|
Depreciation and amortization |
|
|
1,219 |
|
|
|
1,077 |
|
Gain on revaluation of common stock warrant liabilities |
|
|
— |
|
|
|
(688 |
) |
Other income (expense), net |
|
|
55 |
|
|
|
(658 |
) |
Adjusted EBITDA |
|
$ |
(15,421 |
) |
|
$ |
(21,363 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507029873/en/
Investors:
investors@essinc.com
Media:
503.568.0755
Morgan.Pitts@essinc.com
Source: