Iron Flow Battery Manufacturer ESS Tech’s Net Loss Widens by 41% in Q2 2023
The revenue for the period, however, increased by 312%
ESS Tech, a long-duration iron-flow battery manufacturer, recorded a net loss of $22.93 million in the second quarter of 2023, a year-over-year (YoY) increase of 40.89% from a loss of $16.27 million.
The increase in net loss could be attributed partly to increased research and development (R&D) costs, as the company worked to get additional patents for its iron flow battery technology.
The United States-based company recorded a 312% YoY increase in revenue at $2.83 million in Q2 2023 from $686,000.
The R&D expenses during the period went up from $16.17 million to $19.45 million, a 20.32% YoY increase.
ESS was awarded ten additional patents for its iron flow battery technology in the second quarter, bringing the number of patents held by it to 70 worldwide. It had filed 235 patent applications as of June 30, 2023.
The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were recorded at a loss of $20.45 million.
The company also recorded a loss of $115,000 on the revaluation of common stock warrant liabilities, a 101.33% drop from a gain of $8.6 million during the same period last year.
ESS has started supplying long-duration energy storage in the form of energy warehouses and energy centers. The company shipped nine energy warehouses in the second quarter.
In June this year, the company partnered with Germany-based energy provider LEAG to construct a 50 MW/500 MWh iron flow battery system at the Boxberg power plant site in Germany. The project is estimated to cost an initial €200 million (~$218 million).
The execution of definitive agreements for the partnership is expected in the third quarter in anticipation of the project’s financial close.
Eric Dresselhuys, CEO of ESS, said, “We’ve made significant improvements across our internal operations, which are driving solid gains in manufacturing efficiency, greater predictability in our ability to meet our customers’ needs, and more streamlined revenue recognition. As the Inflation Reduction Act continues to spark increased interest among customers seeking low-cost ways to decarbonize and enable long-duration energy storage in their grids, ESS remains well-positioned to capture share in this rapidly expanding market, as evidenced by our partnership with LEAG.”
During the first half (1H) of 2023, ESS tech reported a net loss of $44.83 million, a 110.5% YoY increase from $21.30 million.
The revenue for the period, however, soared by 366%, from $686,000 to $3.2 million. The company had reported zero revenue during Q1 2022, leading to a steep increase.
The R&D expenses for the January to June period increased to $37.18 million, a 27.9% YoY increase from $29.06 million.
The company’s gains from the revaluation of common stock warrant liabilities dropped by 97.7% YoY from $25.1 million to $573,000.
The EBITDA for 1H 2023 stood at a loss of $41.82 million.
The company also announced that it had started the shipments for the first phase of ESS’s commitment to the Sacramento Municipal Utility District to supply up to 2 GWh of long-duration energy storage over the next four years in the form of Energy Warehouses and Energy Centers.
According to a recent report by Wood Mackenzie, the energy storage market in the U.S., including grid-scale, residential and community, commercial, and industrial segments, experienced a 26% decline in the Q1 of 2023 compared to the previous quarter, adding a total of 2,145 MWh.