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August 2025 Q2 2025 Earnings Presentation
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This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “possible,” “may,” “might,” “will,” “potential,” “projects,” “predicts,” “continue,” “could,” “would” or “should,” or, in each case, their negative or other variations or comparable terminology. These words and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. Many factors could cause actual future events to differ materially from such expectations, including, but not limited to, disruptions, or quality control problems in ESS Tech, Inc. (“ESS” or the “Company”)’s manufacturing operations; as well as those risks and uncertainties set forth in the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2024, filed with the Securities and Exchange Commission (the “SEC”) on August 14, 2024, and its other filings filed with the SEC. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, risks, and uncertainties, including, but not limited to: our financial and business performance, including financial projections and business metrics; changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the implementation, market acceptance and success of our technology implementation and business model; our ability to scale in a cost-effective manner; developments and projections relating to our competitors and industry; our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; our future capital requirements and sources and uses of cash; our ability to obtain funding for our operations; our business, expansion plans and opportunities; our relationships with third-parties, including our suppliers, customers, and partners; issues related to the shipment and installation of our products; issues related to customer acceptance of our products; the outcome of any known and unknown litigation and regulatory proceedings; and other risks and uncertainties discussed elsewhere in our public filings. The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks may not be exhaustive. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods. All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and ESS’ use thereof does not imply an affiliation with, or endorsement by the owners of such trademarks, copyrights, logos and other intellectual property. Solely for convenience, trademarks and trade names referred to in this Presentation may appear with the ® or symbols, but such references are not intended to indicate, in any way, that such names and logos are trademarks or registered trademarks of ESS. Any financial and operating forecasts and projections contained herein represent certain estimates of ESS as of the date thereof. ESS’ independent public accountants have not examined, reviewed or compiled the forecasts or projections and, accordingly, neither expresses an opinion or other form of assurance with respect thereto. ESS and its management team cannot give any assurance that the forecasts or projections contained herein accurately represent ESS’ future operations or financial conditions. Such information is subject to a wide variety of significant business, economic and competitive risks and uncertainties, including but not limited to those set forth above that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of ESS or that actual results will not differ materially from those presented in the prospective financial information. Some of the assumptions upon which the projections are based inevitably will not materialize and unanticipated events may occur that could affect results. Therefore, actual results achieved during the periods covered by the projections may vary and may vary materially from the projected results. Inclusion of the prospective financial information in this presentation should not be regarded as a representation by any person that the results contained in the prospective financial information are indicative of future results or will be achieved. This Presentation contains statistical data, estimates and forecasts that are based on independent industry publications or other publicly available information. This information involves many assumptions and limitations and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data that has been contained in these industry publications and other publicly available information. Accordingly, neither ESS nor its respective affiliates and advisors makes any representations as to the accuracy or completeness of these data. This Presentation contains references to ESS’ achievements compared to other companies. All of such references are based on the belief of ESS’ management based on publicly available information known to ESS’ management. The financial information and data contained in this Presentation is unaudited and does not conform to Regulation S-X promulgated under the Securities Act of 1933, as amended. This Presentation also includes non-GAAP financial measures, including gross margin, non-GAAP operating expenses and Adjusted EBITDA. ESS believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to ESS’ financial condition and results of operations. ESS’ management uses certain of these non-GAAP measures to compare ESS’ performance to that of prior periods for trend analyses and for budgeting and planning purposes. Not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures is available without unreasonable efforts at this time. Specifically, ESS does not provide such quantitative reconciliation due to the inherent difficulty in forecasting and quantifying amounts necessary for such reconciliations. Disclaimers ESS Tech, Inc.Catalyzing a Clean Future. Every Day. 1
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Operating Highlights Catalyzing a Clean Future. Every Day.
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New Product Launched: The Energy Base ESS Tech, Inc.Catalyzing a Clean Future. Every Day. 3 Endless Flexibility No LimitsNo Containers
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The Energy Base: Powered by the Iron Core ESS Tech, Inc.Catalyzing a Clean Future. Every Day. 4 • At the heart of each Energy Base project is a configurable set of modular powertrains, called the Iron Core, engineered to deliver gigawatt-hour storage capacity for your next project. • Built with our proven iron flow battery modules and established core technology, Energy Base projects powered by the Iron Core deliver decades of reliable, long-duration energy storage.
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Catalyzing a Clean Future. Every Day. 5 The Energy Base: Iron Core Building Blocks Infinitely scalable to meet project size and specifications B A • Power Platform: Existing iron flow battery modules, used in the Energy Center today, arranged in integrated skids for easy transport and installation • Rebalancing Module: ESS patented electrolyte health system using proven “Proton Pump” technology • Electrical Cabinets: Cabinetry for DC-DC converters, fusing and system wiring A B THE IRON CORE A Repeatable Building Block C C ESS Tech, Inc.
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The Energy Base: Product Strategy Catalyzing a Clean Future. Every Day. 6 Electrolyte Tanks Iron Core Enclosure Plumbing & Mechanical Electrolyte Design Specifications EPC & Developer Partners Iron Core ESS manufacturers its core components and provides design specifications for a fully installed Energy Base Balance of system and industry standard site equipment are procured from preferred vendors and shipped to site ESS continues to manufacture core technology in-house while balance of system is procured directly from preferred vendors ESS Tech, Inc.
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The Energy Base: Honeywell Partnership 7 Catalyzing a Clean Future. Every Day. ESS Tech, Inc. Accelerating Scaled Design Honeywell’s expertise in fluid systems and modular engineering plans optimize ESS design for quality, cost-efficiency, and scale • ESS Investor and Customer; exploring product collaboration on the Energy Base • Joint Development Agreement (illustrative projects) - Cell membranes - Efficiency enhancers - Fluid flow innovations (new pump types and routing) • Procurement Leverage - New electrolyte vendors - New tank vendors and configurations - New pump and actuator vendors + vertical integration • Testing Collaboration - Energy Warehouse operating to test limits in multiple use cases Relationship & Role
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Extending Duration Up to 22 Hours with the Energy Base Catalyzing a Clean Future. Every Day. 8ESS Tech, Inc. ESS can scale both duration and capacity independently to meet customer specifications using established core technology Capacity can be independently scaled simply by adding Iron Core modules Power Capacity (MW) Duration (hours) Duration can be independently scaled simply by adding electrolyte volume ESS iron flow battery modules are capable of storing up to 22 hours of energy, but previous product designs were constrained by standard container and electrolyte tank sizes, limiting duration to 8-10 hours By shifting from a standard shipping container to scalable enclosures and tanks, the Energy Base fully utilizes established core technology and can deliver 10+ to 22 hours of utility-scale power Extending duration unlocks several key advantages including: ✓ Ability to deliver green baseload power when paired with carbon- free generation ✓ Meaningful reduction in $/kWh cost ✓ Minimum energy density of ~80 MWh/acre for a 10-hour battery with ability to approach ~300 MWh/acre1 – opportunity to further increase density with greater durations ✓ Expanded addressable market to include data centers seeking Uninterruptible Power Supply (“UPS”), IPPs seeking to deliver green PPAs and utilities seeking to enhance grid resiliency following grid decarbonization 1. Depending on project site requirements
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Rapidly Expanding Need for Storage Across Grid Operators & Hyperscalers Catalyzing a Clean Future. Every Day. 9 High & Growing Need • Data centers require safe, resilient and sustainable power delivery to ensure uptime (Uninterruptible Power Supply or “UPS”) • AI is driving unprecedented growth in energy demand Current Solutions Fall Short • Inadequate infrastructure is failing to meet demand • Power disruption is now the leading cause of impactful data center outages Time is an Enemy • Speed to data center deployment is impeded by the 3-6 year lead time to expand grid capacity to prospective sites Market Need 1. Energy.gov DOE Report: 2024 Report on U.S. Data Center Energy Use 2. Statista https://www.statista.com/topics/13055/data-center-power/#topicOverview Global Electricity Demand for Data Centers, AI and Cryptocurrency (TWh)1,2 • Data centers used 4.4% of total U.S. electricity in 2023, growing to up to 12% by 20282 • Data center usage estimated to grow to 800 TWh by 2026 • Puts extreme pressure on aging infrastructure, increasing risk of failure 460 1,050 800 620 2022 2026 High Case Base Case Low Case ESS Tech, Inc.
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ESS Products Meet Data Centers’ Growing Electricity Needs Catalyzing a Clean Future. Every Day. 10 THE SOLUTION: ESS Energy Base (“EB”) Enhances Grid Power Capacity & Resilience • Enables fast deployment of additional grid capacity (solar + EB) • Increases grid balancing and resilience of supply for data center customers • Provides green power Safer, Scalable, Sustainable & Cost-Effective • Provides a safe, low latency, scalable, sustainable, and cost-effective alternative to gas generators and long Li-ion battery chains • Designed for the UPS needs of AI data centers Causes of Impactful Data Center Outages 1 1. Uptime Institute Global Survey of IT and Data Center Managers 2024 ESS Tech, Inc. Power Disruption 54% Cooling 13% IT 11% Network 12% Other 10% More data center outages are caused by power disruption than all other causes combined
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Tailored Solutions to Bring Value to Data Center Customers Catalyzing a Clean Future. Every Day. Enables continuous peak shifting ensuring critical customers receive power Flexible Cycling 11 Safety Enables siting near customers, increasing reliability and resiliency Operational 24x7 Enables continuous charge and discharge for greater value Increasing Duration Adjustable duration to meet variable needs Project Configuration Options Standalone Iron- Flow Battery (“IFB”) Storage Grid-tied long-duration storage to enhance grid resiliency and lower energy costs Green Baseload: Carbon-Free Generation + IFB Carbon-free generation resources, such as solar or wind, paired with IFB long- duration storage to provide green baseload power to a co-located data center Carbon-Free Generation + IFB + Other BESS Green baseload power plant complemented by other storage technology (Li-ion, Zinc, etc.) to address short duration data center outages (< 4 hours) ESS Data Center Value Proposition ESS Tech, Inc.
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Line 1 Line 1 & 2 Maximum Line Capacity at Wilsonville Plant(Current) (H2 2025) 6,000+ 1,000+400+ Expansion of Wilsonville Manufacturing Capacity ESS is currently in the process of commissioning its second automated battery manufacturing line (“Line 2”) and will be online in H2 2025 Capital efficiency improves dramatically as manufacturing shifts from ECs to EBs, allowing ESS to produce core components and procure balance of system directly to project site – Shifts manufacturing mix to higher margin components, lowers working capital burden and maximizes manufacturing plant footprint – While ECs require investment in both system and core component lines, EBs only require core component line spend, reducing capex per unit – Electrolyte manufacturing to transition from Wilsonville to project sites creating substantial logistics cost savings Moving from a semi-automated to a fully-automated manufacturing line increased labor productivity 2-3x on module manufacturing 12 Addition of new lines to meet customer demand supports mix shift towards more capital efficient and lower unit cost Energy Base product Capex, working capital, footprint investment would be lower and margins would be higher Annual Max PTCs1 Total Capex Spend ~$25M ~$10M ~$60M ~$17M ~$400M ~$85M Line Nameplate Capacity (MWh) Current ESS manufacturing facility has space for 10 additional lines Nameplate Line Capacity (MWh) 1. Assumes line output based on current overall equipment effectiveness Catalyzing a Clean Future. Every Day. ESS Tech, Inc.
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ESS Superior Value Proposition vs. Li-ion 13 Several favorable attributes of ESS technology vs. Li-ion result in lower LCOS and costs to customers over the long-term Ongoing Ownership Advantages Superior Operating Characteristics Competitive Upfront Installed Cost DECLINING EQUIPMENT COSTS Stack optimization, lower electrolyte costs, in- house electrode development and downstream reduction of power electronics are expected to materially reduce system costs in the near-term INVESTMENT TAX CREDIT ESS products are 98% domestically sourced & 100% domestically manufactured, qualifying for the domestic content ITC adder. Further, ESS is insulated against any new domestic content requirements for claiming the base 30% credit LI -ION TARIFFS Li-ion equipment is set to face outsized tariffs (>100%) under the second Trump administration due to heavy reliance on Chinese sourcing STRONGER CAPACITY PROFILE ESS iron flow batteries can be operated with maximum flexibility with zero capacity fade, while Li- ion batteries experience 2%+ annual capacity degradation and steep battery augmentation costs even when operated within warranty limits GREATER DEPTH OF DISCHARGE Ability to discharge 100% of an iron flow battery’s capacity without concern for accelerated degradation or voided warranties, allowing for substantially more discharged energy vs. Li-ion competitors over a project’s life CHARGE & DISCHARGE FLEXIBILITY ESS iron flow batteries can infinitely and instantly switch between charge and discharge profiles, without the accelerated degradation associated with Li-ion, to take advantage of favorable energy pricing, provide grid resiliency or respond to an unpredictable power shortage 25+ YEAR LIFE ESS iron flow batteries have at least a 25-year useful life with unlimited cycling and zero capacity degradation W IDE OPERATING TEM PERATURE RANGE Rated for use from -40°C to 50°C with any additional heating or cooling requirements limited to electronics in extreme environments NO THERMAL RUNAW AY ESS iron flow batteries are non-flammable which reduces project risk, creates a density advantage in some jurisdictions, and allows for broader siting and use cases ESS Tech, Inc. JT= Let’s consider not bringing up the dwell concept. Very few (actually no one) I know in the lithium world has had to dwell the use of their batteries. They just switch between charge and discharge states with some modulation of power. Raffi’s guys share my experience. Though we modeled it and saw an advantage- we probably don’t want to overplay that card on a unique and rare use of lithium. I think a more accurate and safe statement is” IFB can infinitely and instantly switch between charge and discharge profiles without the accelerated degradation associated with Lithium” JT= Team – I adjusted this temp language as we need to manage the air into electronic devices in both cold and hot climates
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Financial Results Catalyzing a Clean Future. Every Day.
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Q2 2025 Results Catalyzing a Clean Future. Every Day. 15ESS Tech, Inc. ($ in millions) Q2 2025 Q2 2024 Change (%) Revenue $2.4 $0.3 578% Gross Profit (Loss) ($5.1) ($11.4) (37%) Operating Expenses $6.5 $11.7 (45%) Profit (Loss) from Operations ($11.6) ($23.1) 50% Net Income (Loss) and Comprehensive Income (Loss) to Common Stockholders ($11.1) ($21.9) 50% Net Loss per Share – Basic and Diluted ($0.90) ($1.87) 52% Adjusted EBITDA ($7.8) ($18.8) 59% Q2 2025 Highlights $2.4 million revenue from delivery of energy storage systems and core technology components to a related party Reduced cost of revenue and operating expenses reflective of cost reduction efforts Significant reduction in operating cash burn rate – down approximately 80% in June compared to Q1 average
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Reconciliation of Q2 2025 GAAP Net Loss to Adjusted EBITDA Catalyzing a Clean Future. Every Day. 16ESS Tech, Inc. Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Net loss ($11,056) ($21,940) Interest income, net (30) (1,052) Stock-based compensation 1,670 3,026 Depreciation and amortization 1,545 1,302 Gain on revaluation of common stock warrant liabilities (459) (115) Financing costs 568 - Other income (expense), net (12) (18) Adjusted EBITDA ($7,774) ($18,797)
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Cash & Financing: Q2 2025 Catalyzing a Clean Future. Every Day. 17ESS Tech, Inc. ($ in millions) 06/30/2025 3/31/2025 Change Cash & Investments 0.8 12.8 (12.0) Other Liquid Assets A/R 0.1 0.3 (0.2) Inventory 4.7 6.9 (2.2) Total 5.6 20.0 (14.4) Cash & Financing Update Significant reduction in operating cash burn rate – down approximately 80% in June compared to Q1 average In July, secured up to $31M in new capital through a combination of immediate cash inflows and a $25M Standby Equity Purchase Agreement (SEPA) – In the first 6 weeks of the SEPA, we have been already been able to raise over $2M in capital Ended July with cash and cash equivalents of $7.2M Continuing to work to secure additional long-term financing solutions 17ESS Tech, Inc.
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ESS’ scalable solutions serve a variety of needs and will underpin the decarbonized energy system of the future. Domestically produced to deliver benefits to communities worldwide. Powered by NatureFlexible Technology Responsible and Equitable Iron. Salt. Water. Simple ingredients provide a natural, cost-effective, long- duration solution. ESS Tech, Inc.Catalyzing a Clean Future. Every Day. 18 ESS delivers the safe, market leading, long-duration energy storage solutions that empower our customers to make their clean energy vision a reality. ESS: An Enduring Value Proposition
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Thank You