ESS Tech Reports $86.2 Million Net Loss and 17% Revenue Decline for Fiscal Year 2024

ESS Tech, Inc. reported a net loss of $86.2 million for the fiscal year ending December 31, 2024, compared to a net loss of $77.6 million in the previous year. The company's revenue decreased by 17% to $6.3 million from $7.5 million in 2023, primarily due to project delays and a reduction in service revenue. The cost of revenue surged to $51.7 million, a 152% increase from $20.5 million in 2023, reflecting the transition to commercial inventory accounting and the associated costs of delivering energy storage products.

In terms of operational changes, ESS Tech transitioned from a research and development phase to commercial inventory accounting as of July 1, 2023. This shift allowed the company to capitalize on all inventoriable costs incurred, which significantly impacted the cost of revenue. Research and development expenses dropped by 72% to $11.8 million, while sales and marketing expenses rose by 18% to $9.2 million, reflecting increased personnel costs as the company scales its operations. General and administrative expenses saw a modest increase of 4%, totaling $23.5 million.

The company has also made strategic moves to enhance its market position, including a partnership with Honeywell Ventures, which invested $27.5 million in September 2023. This partnership includes a supply agreement and warrants for future stock purchases, potentially increasing ESS Tech's financial resources and market reach. Additionally, the company is exploring further geographic expansion and product development, particularly in the long-duration energy storage market, which is expected to grow due to increasing demand for renewable energy solutions.

As of December 31, 2024, ESS Tech had total liquid assets of $31.6 million, down from $118.1 million the previous year. The company is actively seeking additional financing to support its operations and growth plans, as it has incurred significant losses and cash outflows since its inception. The report indicates substantial doubt about the company's ability to continue as a going concern for the next 12 months, emphasizing the need for successful capital raising efforts and operational scaling to achieve profitability.

Looking ahead, ESS Tech anticipates that the Inflation Reduction Act of 2022 will positively impact demand for its products by extending and expanding tax credits for energy storage solutions. However, the company remains cautious about macroeconomic conditions, including supply chain challenges and inflation, which could affect its operations and customer purchasing decisions. The management is focused on executing cost reduction initiatives and scaling production to improve financial performance in the coming years.