ESS Tech Reports 97% Revenue Decline and Increased Losses in Q2 2026

ESS Tech, Inc. reported a significant decline in financial performance for the second quarter of 2026, with total revenue dropping to $73,000, a decrease of 97% compared to $2.36 million in the same period last year. For the first half of 2026, revenue was $201,000, down 93% from $2.96 million in the first half of 2025. The company attributed this decline to reduced sales volume as it winds down existing contracts while developing new product offerings, particularly in sodium-ion battery technology. The gross loss for the quarter was $7.42 million, compared to a gross loss of $5.1 million in the prior year, reflecting ongoing challenges in scaling operations and managing costs.

Operating expenses for the second quarter increased by 19% to $7.71 million, driven primarily by a 55% rise in research and development costs, which reached $2.2 million. This increase reflects the company's focus on advancing its sodium-ion and iron flow battery technologies. In contrast, sales and marketing expenses fell by 57% to $562,000, as the company reduced personnel-related costs and marketing expenditures. The net loss for the quarter was $15.55 million, compared to a net loss of $11.06 million in the same quarter of 2025, indicating a continued struggle to achieve profitability.

In terms of operational developments, ESS Tech has been actively pursuing strategic partnerships and product development initiatives. The company has entered into a Joint Development Agreement with UOP, an affiliate of Honeywell, to collaborate on flow battery technology, and it has also acquired patent rights valued at $5 million. However, the company faces significant challenges, including a substantial accumulated deficit of $877.3 million as of June 30, 2026, and a need for additional financing to support ongoing operations. As of the end of the reporting period, ESS Tech had $10.8 million in cash and cash equivalents, which raises concerns about its ability to continue as a going concern.

Looking ahead, ESS Tech's management has indicated that the company will need to secure additional debt or equity financing in the near term to meet its operational cash flow requirements. The company is exploring various strategies to raise capital, including potential equity offerings and partnerships. However, there is substantial uncertainty regarding the timing and terms of any future financing, which could impact the company's ability to execute its business strategy and achieve its growth objectives. The ongoing macroeconomic environment, characterized by supply chain challenges and geopolitical tensions, further complicates the company's outlook.