Energy Vault's Q3 2025 Earnings Call: Conflicting Signals on R&D, Tariffs, and Contract Progress

Date of Call: None provided

Financials Results

• Revenue: $33.3M in Q3 2025, up 27x from $1.2M a year ago; company reiterates full-year 2025 revenue guidance of $200M–$250M
• Gross Margin: 27% in Q3 2025; 32.6% year-to-date; full-year 2025 gross margin guidance 14%–16%

Guidance:

• Full-year 2025 revenue expected to be $200M–$250M.
• Full-year 2025 gross margin expected to be 14%–16%.
• Year-end cash expected to be $75M–$100M (includes ~$40M of investment tax credit proceeds).
• Asset Vault: initial assets (Calistoga, Cross Trails) in service; maiden assets to contribute ~$10M annualized adjusted EBITDA; Fund 1 expected to deliver ~$40M recurring adjusted EBITDA by year-end 2027 and $100M–$150M by year-end 2029.
• Merchant exposure expected ~25%.

Business Commentary:

* Revenue Growth and Project Execution: - Energy Vault reported record revenue of $33.3 million for Q3 2025, representing a 27x increase year-over-year. - The growth was driven by strong execution on Australia projects and initial contributions from the Asset Vault assets.

• Cash Position and Project Financing:
• Energy Vault's cash balance was $61.9 million as of September 30, 2025, up 7% sequentially.

• The increase was supported by project financings and anticipated investment tax credit proceeds.

• Backlog and Pipeline Expansion:

• The company's backlog increased to $920 million, up 112% year-to-date.
• This expansion reflects new projects, long-term service agreements, and strategic collaborations, with a focus on attractive interconnect sites.

• Asset Vault Platform and Strategic Investments:
• Energy Vault launched the Asset Vault platform, securing a $300 million preferred equity investment.
• This investment will enable the deployment of 1.5 gigawatts in attractive markets, securing long-term recurring adjusted EBITDA.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted a large revenue ramp (Q3 revenue $33.3M, 27x YOY), narrowing adjusted EBITDA loss to $6M, growing cash to $61.9M with an expected year-end $75M–$100M, and launch of Asset Vault with $300M preferred equity to drive recurring EBITDA—all framing a constructive, growth-oriented narrative.

Q&A:

• Question from Noel Parks (Tuohy Brothers): Just one item I noticed in the P&L is it looks like R&D expense actually declined sequentially a bit. And I was just curious if you had any updated thoughts on with some of the structure changes, just what the -- how the expense lines might be affected as if there's more capitalization going on going forward or something.
  Response: R&D declined due to deliberate cost tightening and shifting phase post-IPO—harvesting prior R&D investments and reallocating focus/resources toward Asset Vault and growth activities.

• Question from Noel Parks (Tuohy Brothers): As we've had a fair amount of macro uncertainty in the quarter and the months before that... So I just wondered if sort of your pace of discussions on the customer acquisition, bus dev side, I just wondered if you've kind of characterized customers feeling a sense of urgency and sort of pressing on unabated or whether there's been some more hesitation introduced and thinking especially maybe as you're doing with utilities at times.
  Response: Market volatility (tariffs, shutdowns) has caused some delays, but Asset Vault sees abundant attractive acquisition opportunities; company remains agile and is maintaining its guidance due to secured deliveries.

• Question from Siddharth Rajeev (Fundamental Research Corp.): Just to confirm, the current backlog, it does not include the recently announced projects in Albania, right? And also, any plans to add these projects to asset in the future?
  Response: Correct—the $920M backlog excludes SOSA and the EU Green Albania project; SOSA is part of Asset Vault and management expects these projects to be added to the company's backlog once finalized.

• Question from Siddharth Rajeev (Fundamental Research Corp.): The development pipeline showed a massive increase from 5.9 to 8.7 gigawatt hour, $300 million added. What -- which projects specifically were added to this?
  Response: Specific projects were not disclosed; the increase reflects additions of Stage 4/5 shortlisted or awarded opportunities and internal Asset Vault pipeline curation, with some ins and outs.

Contradiction Point 1

R&D Expense and Capitalization

It involves changes in the company's approach to R&D expenses and capitalization, which could impact financial reporting and investor expectations.

Why did R&D expenses decline sequentially, and will there be more capitalization in the future? - Noel Parks (Tuohy Brothers)

20251111-2025 Q3: The R&D decrease reflects cost-tightening efforts and the completion of heavy early-stage investments. The focus now is more on harvesting past investments, especially around Asset Vault. - Michael Beer(CFO)

What was Q2 R&D spending, and what is the guidance for Q3? Should we expect a substantial increase from Q2 to Q3, or a more modest ramp? - Justin Lars Clare (ROTH Capital Partners, LLC, Research Division)

2025Q2: We anticipate that our R&D expenses will continue to increase during the remainder of the year as we invest in our business and support our growth opportunities. - Michael Beer(CFO)

Contradiction Point 2

Customer Acquisition and Business Development

It reflects differing perspectives on the impact of macro uncertainties and market volatility on customer acquisition and business development, which could influence growth projections and investor confidence.

How have macroeconomic uncertainties impacted utility customer acquisition? - Noel Parks (Tuohy Brothers)

20251111-2025 Q3: Market volatility, including tariffs, has caused delays, but Energy Vault is capitalizing on a buyer's market for Asset Vault acquisitions, prioritizing attractive assets with formal evaluation. - Robert Piconi(Chairman, CEO)

How has customer acquisition and business development pace changed since summer amid macroeconomic uncertainties and the recent shutdown? - Noel Parks (Tuohy Brothers Investment Research, Inc.)

2025Q3: The year has been volatile with tariff fluctuations and shutdown impacts. Customers are managing these changes, leading to delays. - Robert Piconi (Co-Founder, Chairman & CEO)

Contradiction Point 3

Backlog and Pipeline Growth

It involves changes in the company's project backlog and development pipeline, which are critical indicators for future growth and financial projections.

Does the current backlog include the recently announced Albania projects, and will they be added to Asset Vault? - Siddharth Rajeev (Fundamental Research Corp.)

20251111-2025 Q3: During the quarter, we signed 4 additional project contracts, which has increased our backlog to over $920 million. - Michael Beer(CFO)

What factors contributed to the development pipeline's increase from 4 to 5.9 gigs? - Justin Lars Clare (ROTH Capital Partners, LLC, Research Division)

2025Q2: Our backlog continues to grow, now approaching $850 million, and our development pipeline has expanded to almost 6 gigawatt hours. - Michael Beer(CFO)

Contradiction Point 4

Impact of Tariffs on U.S. Market

It highlights differing perspectives on the impact of tariffs on the U.S. market, which directly affects customer acquisition and revenue expectations.

How have macroeconomic uncertainties impacted customer acquisition pace, particularly for utilities? - Noel Parks (Tuohy Brothers)

20251111-2025 Q3: Market volatility, including tariffs, has caused delays. Despite this, Energy Vault is capitalizing on a buyer's market for Asset Vault acquisitions, prioritizing attractive assets with formal evaluation. - Robert Piconi(Chairman, CEO)

How will tariffs affect new U.S. bookings and future demand? - Justin Clare (ROTH MKM)

2025Q1: Interest in U.S. delivery was strong until April, when tariffs escalated. Companies then adopted a wait-and-see attitude. The recent tariff pause is encouraging, and many customer discussions are underway for potential U.S. battery deliveries this year. - Robert Piconi (Chairman and Chief Executive Officer)

Contradiction Point 5

Backlog and Contract Status

It involves changes in financial forecasts, specifically regarding the backlog and contract status, which are critical indicators for investors and signal the company's financial health.

What projects were added to increase the pipeline to 8.7 GWh from 5.9 GWh? - Siddharth Rajeev (Fundamental Research Corp.)

20251111-2025 Q3: Over 80% of the company's $1.85 billion guidance is now contracted, with over $1 billion of the remainder expected to be contracted in the next 18 months. - Michael Beer(CFO)

What portion of the 2025 guidance is booked versus contracted? What logistical constraints affect battery deliveries? - Justin Clare (ROTH MKM)

2025Q1: We had over 80% of revenue contracted at the start of the year. Tariffs impacted additional bookings we expected, but the situation has improved with the recent tariff pause. - Robert Piconi (Chairman and Chief Executive Officer)