0001628280-25-049588
SEC filingEos Energy Enterprises reported a net loss of $641.4M for Q3 2025, driven by significant non-cash fair value losses on warrants and derivatives, while revenue surged to $30.5M as the company scales its Z3 battery production.
Eos Energy Enterprises reported a significant increase in revenue for the third quarter of 2025, reaching $30.5 million, a 3,473% increase compared to $0.9 million in the same period of 2024. This growth was driven by higher product sales volume and increased selling prices as the company scales production of its Z3 battery energy storage systems. For the nine months ended September 30, 2025, revenue totaled $56.2 million, up 573% from $8.4 million in the prior-year period.
Despite the top-line growth, the company's cost of goods sold was $64.4 million for the quarter, resulting in a gross loss of $33.9 million, compared to a gross loss of $24.9 million in Q3 2024. The increase in cost of goods sold was primarily due to higher product sales volume, partially offset by a decrease in unit production costs. As a nascent technology company early in its product lifecycle, Eos continues to face significant costs associated with production start-up and commissioning.
Operating expenses for Q3 2025 were $27.3 million, a slight decrease from $28.4 million in the prior-year quarter. Research and development expenses decreased by 7% to $6.9 million, while selling, general and administrative expenses increased by 11% to $19.8 million, driven by expanded headcount in key growth areas. The operating loss for the quarter was $61.2 million, compared to $53.3 million in Q3 2024.
The company reported a net loss of $641.4 million for Q3 2025, compared to a net loss of $342.9 million in the prior-year period. This substantial increase in net loss was primarily driven by non-cash charges, including a $240.8 million loss from the change in fair value of warrants and a $327.8 million loss from the change in fair value of derivatives with related parties. These fair value adjustments are tied to the company's stock price and the valuation of complex financial instruments issued as part of its financing transactions.
As of September 30, 2025, Eos had total assets of $328.2 million, an increase from $260.3 million at December 31, 2024. Current assets were $188.7 million, including $58.7 million in unrestricted cash and cash equivalents. The company reported working capital of $85.4 million.
Total liabilities stood at $1.43 billion, up significantly from $842.1 million at year-end 2024. This increase was largely driven by a substantial rise in warrant liabilities, which totaled $870.6 million (including related party warrants), reflecting the impact of a higher stock price on the fair value of these instruments. Long-term debt, including related party notes, was $447.7 million.
Management has expressed substantial doubt about the company's ability to continue as a going concern. The company has incurred significant losses and negative cash flows from operations since inception and expects to continue to do so until it can reach a scale of profitability. As of September 30, 2025, the company was in compliance with its Minimum Liquidity financial covenant, the only financial covenant currently in effect under its credit facilities.
For the nine months ended September 30, 2025, net cash used in operating activities was $160.9 million, compared to $111.3 million in the prior-year period. The net loss of $849.2 million was adjusted for $691.7 million in non-cash items, primarily related to changes in the fair value of debt, warrants, and derivatives, as well as stock compensation and a loss on debt extinguishment.
Net cash used in investing activities was $29.7 million, primarily for purchases of property, plant, and equipment to improve manufacturing facilities. Net cash provided by financing activities was $214.1 million, driven by $240.0 million in proceeds from the issuance of 2025 Convertible Notes, $81.1 million from a public offering of common stock, and $38.5 million from the final draw on the Delayed Draw Term Loan. These inflows were partially offset by the payoff of the 2021 Convertible Notes and a prepayment on the Delayed Draw Term Loan totaling $180.9 million.
Management's strategy is centered on scaling production of its Eos Z3 battery, which is engineered to reduce costs and weight while enhancing manufacturability. The first fully-automated battery manufacturing line is now installed and in commercial production. The company believes the Inflation Reduction Act provides a competitive advantage through production tax credits for domestically manufactured battery components.
The company has fully drawn the $210.5 million Delayed Draw Term Loan and the first $90.9 million tranche of its DOE Loan Facility. The DOE Loan Facility provides for up to $303.5 million in total funding, subject to the achievement of certain conditions, to expand manufacturing capacity to 8 GWh by 2027. However, management acknowledges that if it cannot raise additional outside capital, it may be unable to meet its obligations, and it may need to seek strategic alternatives.
The company operates in a single reportable segment, designing and manufacturing zinc-based energy storage solutions. For Q3 2025, one customer accounted for 82.1% of total revenue, highlighting significant customer concentration risk. The company's remaining performance obligations were approximately $77.2 million as of September 30, 2025, with about 76% expected to be recognized as revenue over the next twelve months.
Significant non-cash items impacting the income statement include changes in the fair value of warrants and derivatives, which are sensitive to fluctuations in the company's stock price. The company also recognized $5.7 million in production tax credits as a reduction of cost of goods sold during the quarter. Stock-based compensation expense was $5.0 million for Q3 2025.