GWH Earnings Recap
Beat 1 of last 7 quarters
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ESS's pivot to sodium-ion with the Bridge system directly targets the AI data center power constraint, positioning the company to capture a slice of the 20-25 GW of in-datacenter battery storage expected by 2030. The Juniper LOI and Alsym supply agreement signal early commercial traction for non-lithium, U.S.-made storage, which could become a meaningful alternative to lithium-ion in AI infrastructure. However, the company's thin liquidity and reliance on a proposed business combination add execution risk to this buildout thesis.
Q2 2026 revenue was $73,000, down from $2.4M a year ago, reflecting the wind-down of legacy contracts. Gross loss widened to $7.4M from $5.1M, while operating expenses rose 19% to $7.7M, driven by higher G&A (legal contingency accruals) and R&D investment. Net loss was $15.6M, or $0.46 per share, versus $11.1M, or $0.90 per share, a year ago. Adjusted EBITDA loss was $7.9M, roughly flat year-over-year. The company ended the quarter with $10.8M in unrestricted cash, and had ~$5.6M in cash and short-term investments as of July 31, 2026. Management highlighted the completion of the first sodium-ion module and the start of charge/discharge testing, as well as the market rollout of the Bridge system.
Management is pivoting aggressively toward sodium-ion with the new Bridge product, targeting data centers, critical infrastructure, and utilities. They cited early-stage sodium-ion opportunities approaching $1 billion and signed a letter of intent with Juniper Energy for 500 MWh or more of sodium-ion systems, anchored by a 10 MW/80 MWh California utility project targeted for commercial operation in 2027. They also signed an LOI with Alsym Energy for 8.5 GWh of U.S.-made sodium-ion cells. The first full-scale Bridge system is targeted for operation by end of 2026. On the balance sheet, they are streamlining Wilsonville operations to reduce cash burn and have repaid $37M of the $40M Yorkville note. They announced a non-binding LOI for a proposed business combination with a private energy company, implying a combined enterprise value of ~$515M, with ESS stockholders expected to own 5-10% of the combined company. They expect to sign a definitive agreement by end of September and close before year-end, but cautioned the LOI is non-binding and can be terminated. They did not provide specific revenue guidance but emphasized disciplined spending and preserving liquidity, while acknowledging substantial doubt about going concern.
“The demand we are seeing for sodium-ion is unlike anything in our company's history.”
on Sodium-ion demand
“This isn't two development stage companies coming together. It pairs the platform and market position we've built with revenue-generating operations, and we believe it offers compelling strategic and financial benefits with the potential to be transformational.”
on Business combination LOI
“I would say that our current cost of revenue is dominated by fixed manufacturing overhead and really, our underutilized capacity at our Wilsonville headquarters during a quarter with very minimal deliveries to customers. So it's really not a read on unit economics, and it's not representative of Bridge's expected margin structure going forward.”
on Cost structure
My first question was on the LOI that you just shed more light on. I know on the slide, you touched on some of the work streams between now and more definitive agreements in September. Could you talk a little bit more about what that process looks like? And is there any interim support for you guys? Or are you more self-funding through that date?
Drew Buckley said they expect to reach a definitive agreement by end of September and close toward year-end. He said they expect to be self-funded for the time being, having reduced expenses and cash burn and repaid most of the Yorkville note. He said more information would come in a few weeks.
And I guess in terms of pushing forward, I know you guys have talked about a variety of opportunities approaching $1 billion. Can you give us a feel for the pipeline composition, the mix across data center, critical infrastructure, utility and maybe how far along some of those conversations are?
Drew Buckley said the pipeline is a mix between utilities and data centers, all early-stage and not yet booked. He noted the velocity is high, developed in a matter of months since the Alsym LOI, and that existing customers are also interested. He said the demand is driven by the need for batteries with a wider operating temperature range to handle data center power spikes.
So I guess as you're going out to the data center buyers, the utility center buyers that you mentioned, could you talk a little bit about procurement? Are they typically sourcing single supplier or multiple suppliers? And what gets ESS sort of onto that supplier list and on to the top of that list in a crowded field?
Drew Buckley said customers care most about speed to power. He emphasized ESS's historical know-how in bringing products to market, certification, and grid interconnection. He said the Bridge is designed as a plug-and-play 480V AC block, which should make it easier for customers to adopt, leveraging learnings from iron flow deployments.