Eos Energy gains as preliminary Q3 revenue beats Wall Street estimates

Investing.com -- Eos Energy Enterprises Inc (NASDAQ: EOSE) stock rose 2.5% in early trading Monday after the zinc-based battery maker posted preliminary third-quarter revenue that topped Wall Street estimates, driven by expanding manufacturing capacity.

The company expects third-quarter revenue to land between $82 million and $83 million, representing a sequential increase of roughly 20% and a year-over-year surge of more than 169%. Analysts consensus estimates currently expect sales of $80.97 million for the period.

Performance during the quarter was buoyed by a 23% quarter-over-quarter increase in shipments as production scaled at the firm's second manufacturing line at its Thorn Hill facility. The new line contributed approximately 17% of total battery output during the period and achieved first-pass yields in line with its initial production site.

Gross margin efficiency also showed substantial progress, with GAAP gross margin expected to narrow to negative 53% to 55%, marking an improvement of roughly 17 percentage points from the prior quarter. Higher production volumes and reduced unit conversion costs supported the advance, marking the company’s eighth consecutive quarter of gross margin expansion.

Eos ended the quarter with roughly $344 million in cash and restricted cash, down slightly from $364 million at the end of June. Operating cash inflows of $114 million, boosted by customer deposits, project receipts, and tax credit collections—alongside an $87 million Department of Energy loan draw helped offset $35 million in capital expenditures.

The group's commercial backlog stood at approximately $765 million, or 3.2 GWh, at the end of September following new order bookings and recognized revenue. Commercial momentum expanded across core defense, commercial, and data center markets, highlighted by project additions with partners like Google and MN8 for mission-critical infrastructure.

Looking ahead, management narrowed its full-year 2026 revenue guidance to the lower half of its previously issued $300 million to $350 million range. The updated forecast comfortably frames consensus expectations of $304.37 million while accounting for the final shift addition required to bring Thorn Hill to continuous 24-hour operations.

Following complete manufacturing consolidation into the Thorn Hill site, Eos expects the facility to deliver roughly 4 GWh of annual nameplate capacity across its two automated lines. Chief Financial Officer Alessandro Lagi noted that consolidating into a single modern site provides a clear pathway toward positive operating margins amid sustained demand for domestic long-duration energy storage.

Original Article

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