Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 1 of last 7 quarters
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Eos's record backlog and pipeline growth—now $24.6B/112GWh—underscore accelerating demand for long-duration storage as data center load growth and capacity market dynamics favor multi-hour resources. The Frontier Power USA platform, with its insurance wrap and project financing, could help close the bankability gap that has slowed LDES deployment, potentially accelerating the buildout of American-made storage. The consolidation into Thorn Hill and the path to gross margin improvement signal a focus on scaling cost-effectively to meet this demand.
Eos delivered record revenue of $68.8M, up 351% YoY, with cube shipments up 207% YoY. Adjusted gross loss was $42.9M (negative 62% margin), improving for the seventh consecutive quarter. Net loss was $276M, driven primarily by noncash fair value adjustments on warrants and derivatives. The company ended the quarter with $364M in cash, with operating cash flow closely tracking adjusted EBITDA. Management announced a tightening of FY2026 revenue guidance to $300M–$350M and the acceleration of manufacturing consolidation into Thorn Hill. They also highlighted a $100M purchase order for Phase 1 of the Blanquilla project in ERCOT, a 750MWh master supply agreement with CAPAC in Europe, and a strategic partnership under the Golden Dome America program.
Management tightened FY2026 revenue guidance to $300M–$350M, citing the acceleration of manufacturing consolidation into Thorn Hill. The low end assumes maintaining June's run rate, while the high end depends on scaling Thorn Hill to 24/7 operations by Q4. They reiterated a clear path to over 72 points of adjusted gross margin improvement over the next 12 months, driven by material cost reductions, conversion cost savings, project/field services improvements, and yield gains. The consolidation of Line 1 into Thorn Hill is expected to deliver an additional 10–15% reduction in conversion costs with a ~9-month payback. Management expects adjusted EBITDA to improve with operating leverage and volume growth, and they plan to close the second-year DOE loan retranche by quarter end. Frontier Power USA's first projects are expected online by Q3 2027, with profitability from those assets expected to flow through as other income starting in the second half of next year.
“We ship more product than we have in any prior quarter. We grew our backlog and we committed to consolidating our manufacturing footprint, a strategic decision that trades near-term revenue to lower our cost base as we exit 2026.”
on Quarterly summary and strategic decision
“The bottom is rising towards the fleet average. That is variation coming out of the system and reducing variation is what makes performance bankable.”
on Fleet performance and bankability
“We have demonstrated that we can build the capability. The next chapter is converting that capability into earnings, and I believe we have a clear plan to get there.”
on Path to profitability
So just to kind of unpack the updated revenue guidance. And the path here, the low end is essentially 1.5 gigawatt hours for the rest of the year, just Thorn Hill and the high end? Are we assuming that Line 1 comes back online at Thorn Hill is producing as well?
Joe Mastrangelo clarified that the low end is basically continuing June's run rate, while the high end assumes Thorn Hill reaches full 24/7 operations by the end of Q4, not necessarily Line 1 coming online at Thorn Hill.
But in your pipeline of opportunities and the customers you're talking to you, how should we expect that now 50% of your backlog is from that single entity. How should we think about that customer diversification evolving?
Joe Mastrangelo said he'd like to see the size of the pie grow rather than just the percentage change, and that Frontier Power USA executing quickly and building references will help the other half of the backlog grow. He noted the Germany/Austria/Switzerland agreement and the Golden Dome partnership as examples of diversification.
One of the things you talked about last year, we haven't heard as much about recently is the data center opportunity... I'm just wondering if we might be able to get an update there. And I'm curious to the extent you're doing anything, what kind of durations you're seeing your customers ask for?
Joe Mastrangelo said 32% of the pipeline is data center related, with work ongoing on both co-location and grid-level resilience. He noted that data center customers often want multiple cycles and shorter durations that add up to longer total discharge, which plays to Eos's cycling strength. He declined to handicap specific segments but said both are moving well.