Eos Energy Extends Eighth Straight Quarter of Margin Improvement

The Tip Desk · October 21, 2026 · 3 min read

Preliminary third-quarter revenue is expected at $82 million to $83 million, with GAAP gross margin of (55)% to (53)% after a 16-to-18-point sequential lift.

Eos Energy Enterprises (EOSE), the zinc-based long-duration energy storage maker, said it currently expects preliminary third-quarter revenue of $82 million to $83 million, about 19% to 21% sequential growth and about 169% to 172% year-over-year growth, after second-quarter revenue of $68.8 million.

Shipments rose approximately 23% from the prior quarter, the company said, supported by continued scaling on the second manufacturing line at Thorn Hill. Line 2, which began commercial production in mid-June, contributed about 17% of total battery production in the third quarter and exited the period with first-pass yield aligned to Line 1. The line still ran on a partial-shift schedule as Eos hired, onboarded, and trained additional employees toward full-shift operations.

GAAP gross margin is expected at (55)% to (53)%, an improvement of about 16 to 18 percentage points from negative 71% in the second quarter. That would mark the eighth consecutive quarter of gross margin improvement. The company attributed the lift to higher production volumes and lower conversion costs per unit.

Chief Financial Officer Alessandro Lagi said the company delivered its highest revenue to date and improved gross margin by roughly 17 points as volume began to ramp at Thorn Hill. Eos said it expects further margin expansion from higher production volumes, higher capacity utilization, consolidation into one footprint, and ongoing material cost-reduction initiatives.

Total cash, including restricted cash, was approximately $344 million as of September 30, 2026, compared with $364 million as of June 30. Quarter-end cash was supported by about $114 million of operating cash inflows driven primarily by customer deposits, project milestone receipts, and tax credit collections, as well as an additional $87 million advance under the DOE loan facility. Capital expenditures totaled about $35 million, primarily related to completion of Line 2 automation.

Backlog was approximately $765 million, or about 3.2 GWh, as of September 30, after revenue recognized during the quarter and new orders booked, versus a record $807 million, or 3.4 GWh, at June 30. During the quarter Eos received six purchase orders from six different customers, including a previously announced $100 million order under an existing capacity reservation agreement that did not contribute to quarter-over-quarter backlog growth. The company said commercial traction continued across defense, commercial and industrial, and data center markets, and it announced projects supporting the Golden Dome initiative and, alongside MN8, a project with Google.

Eos currently expects full-year 2026 revenue in the lower half of its $300 million to $350 million range, a range already tightened from $300 million to $400 million after the second quarter. The current forecast reflects the addition of the final shift to bring Thorn Hill to 24-hour operation during the fourth quarter. Following manufacturing consolidation and full-scale operations, Thorn Hill is expected to have approximately 4 GWh of annual nameplate production capacity across its two lines.

Lagi said consolidating into Thorn Hill gives the company one modern, higher-throughput site, lowers cost per unit, and puts it on a clear path to positive margins, and that the company is being disciplined about the transition in the fourth quarter. Full third-quarter results are scheduled for November 5, 2026.