ESS Tech 2025 Q1 Earnings Revenue Declines Sharply by 78.1%

ESS Tech (GWH) reported its fiscal 2025 Q1 earnings on May 15th, 2025. The company experienced a significant revenue decline, with total revenue falling by 78.1% to $599,000 in 2025 Q1, compared to $2.74 million in the previous year. The company's guidance suggests they expect revenue to maintain current levels in the first half of 2025, with an anticipated ramp-up in the second half driven by energy-based sales. Despite narrowing losses per share and net loss, ESS Tech's financial struggles were evident as they failed to meet revenue expectations, highlighting ongoing challenges.

Revenue
ESS Tech's revenue for Q1 2025 totaled $599,000, a stark decrease from $2.74 million in Q1 2024. This included $571,000 in standard revenue and $28,000 from related parties, reflecting the company's ongoing financial challenges.

Earnings/Net Income
ESS Tech reported an improvement in earnings per share, narrowing losses to $1.50 per share from $1.57 per share in Q1 2024, and reducing the net loss to $18.03 million from $18.31 million. Despite these improvements, the EPS remains negative, indicating financial challenges persist.

Price Action
The stock price of ESS Tech experienced a 7.25% drop during the latest trading day but showed resilience with a 16.36% surge over the past week and a 5.79% increase month-to-date.

Post-Earnings Price Action Review
Investing in ESS Tech (GWH) after revenue misses is a high-risk strategy with potential for significant losses, despite a 9.64% earnings surprise. The company's performance has been poor, with shares down about 53.4% since the start of the year, compared to a slight gain for the S&P 500. Financially, the company missed the Zacks Consensus Estimate significantly, reporting a quarterly loss of $1.50 per share against an estimated loss of $1.66, and revenues missing by 75.04%. Market sentiment remains negative, influenced by the company's ongoing financial difficulties, potential liquidity issues, and competitive industry pressures. While there may be short-term gains, the overall outlook suggests caution, with potential for further declines if financial and strategic challenges persist.

CEO Commentary
Kelly Goodman, Interim CEO, stated that ESS Tech is focused on managing liquidity and raising capital to support their turnaround strategy. The Q1 revenue was bolstered by final deliveries to a Florida utility, and the shift towards energy-based products is gaining traction, as evidenced by a significant pilot project in Arizona. Goodman emphasized competitive pricing and operational versatility as key strengths but acknowledged capital raising challenges amid an uncertain macroeconomic climate.

Guidance
ESS Tech anticipates steady revenue levels in the first half of 2025, with an expected increase in the second half due to energy-based sales. The company aims to achieve EBITDA and cash flow positivity in the coming years and is exploring capital raising options to sustain operations and manage cash burn in a challenging capital market environment.

Additional News
ESS Tech recently achieved significant recognition as it was named one of TIME's Top GreenTech Companies in America for 2025 and one of Fortune's Most Innovative Companies in America for 2025. The company has been actively engaging in projects, securing a 50 MWh Energy Base project with an Arizona utility, which is expected to conclude contracting by September. Furthermore, ESS Tech has been involved in substantial proposal activities, with inquiries representing over 8 GWh across the US and Europe, showcasing their expanding commercial reach.