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Good morning, and welcome to the Eos Energy Enterprise First Quarter 2025 Conference Call. I am Frans, and I’ll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. [Operator Instructions]. Thank you. I would now like to turn the call over to Liz Higley, Vice President of Investor Relations. Please go ahead

Good morning, everyone, and welcome to EOS' first quarter 2025 conference call. Today, I'm joined by EOS' CEO, Joe Mastrangelo, CCO, Nathan Kroeker and CFO, Eric Javadi. This call, including the Q&A portion of the call, may include forward-looking statements, including but not limited to current expectations with respect to future results and outlook for our company. Should any of these risks materialize or should our assumptions prove to be incorrect, our actual results may differ materially from our expectation or those implied by these forward-looking statements. The risks and uncertainties that forward looking statements are subject to are described in our SEC filings. Forward-looking statements represent our beliefs and assumptions only as of date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events except as required by law. Today's remarks will also include references to non-GAAP financial measures. Additional information, reconciliation between non-GAAP financial information to US GAAP financial information is provided in the press release. Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies. This conference call will be available for replay via webcast through EOS' Investor Relations website at investors.eosc.com. Joe, Eric and Nathan will walk you through our business highlights and financial results before we proceed to Q&A. With that, I'll now turn the call over to EOS' CEO, Joe Mastrangelo.

Thanks, Liz, and welcome, everyone, to the 1Q earnings call. Thanks for the time this morning. Starting off on our classic operating highlights page, I’m not going to really spend a lot of time on the top half of the page, so I’ll let Nathan talk about that in his new role as Chief Commercial Officer for the company. But I do want to spend some time talking around the activity inside of the pipeline and the orders booking. Critical in our one, two orders booking projects in California. California, a large market for energy storage. One of those projects being at a military base, critical to have safety and an NDA compliant product, which EOS brings. Second, you saw two large MOUs showing that not only does our product bring benefits in The United States, but also brings to allied countries when you look at what we’re doing in both The UK and also the ability in announcing the MOU for Puerto Rico, where we believe we can help the island with its grid instability and start delivering product as quickly as possible as they get their approvals. Next, I would say after the quarter, we signed a microgrid project in Florida. Critical to talk about this for two reasons. One, it’s out of school. You want the safest product next to our children and EOS brings that safety. Second, it’s with a large operator of energy storage and gives us another proof point with that operator of the benefits EOS can bring to the market. Shift down to the bottom of the page, where I’d really like to spend the majority of my time talking about is what I believe is one of our strongest quarters operationally to date as a company. We delivered $10.5 million of revenue. We really saw the team step up and start to ramp-in and overcome some of the supply chain challenges that we’ve had previously and get to really what is a good run rate. I’ll give more details on that in a moment, but also like everyone to remember that we go direct to customers. So we’re exposed a little bit to the fits and starts when you have on permitting and site readiness and things. There’s no dealer network in the middle of what we do. It’s direct to customer. So we manage through that complexity, but the team has done a great job of getting the supply chain up and running. Shift to the lower right-hand side, very strong cash position for the company here as we exit 1Q. I think there’s some key things underneath that I’d like to talk about. That cash position is reflected in, a, the strategic partnership and investment from Cerberus, the execution and first draw on the DOE loan. But underneath those two factors, you’re starting to see operational cash generation. I think there’s two things I’d like to talk about from the balance sheet that highlight this. First one is you’ll if you look at our contract liabilities, they’re up 80%. That up 80% is reflecting of customers giving us deposits on projects and feeling secure with the strategic investment and the financing that we have in paying that cash up front and allowing us to start running the company from its operations. The second piece is, I think when you look at our balance sheet, you’ll see inventory payables up in like amounts. Historically, you probably would have seen inventory up with payables being flat because a lot of times as we were receiving goods in the past, we’re being asked to either prepay or pay on very quick terms. What the team has been able to do is extend those terms as we show financial stability and growth, while at the same time, get price to drive down costs and really attribute and drive the improvement that we’re seeing in our gross margin profit. So that cash balance, very important, very strong. But underneath that, you’re starting to see the seeds of an operating company that will perform. If we go to the next page, when you look at what we’re building is a stronger scaled EOS. I think when you look externally, I still always come back and remind myself the demand for power is going to double by 2,050 for multiple reasons and across the globe. So this is a critical industry, as critical as anything else that we do today, giving safe, secure power to the world is as important as fresh air and clean water for the future. The second is, in order to do that, we need longer duration energy storage. We’re forecasting a very large CAGR over the next ten years for that long duration energy storage, and EOS has a product that fits in that. At the same time, we’re going through a period of global supply chain volatility. Tariffs are upward cost pressure into the industry and creating risk, which we think we can manage with the way that we’ve positioned ourselves, but also creates uncertainties as far as project timing and how the market will evolve here in the near-term. I don’t think this is a long term. I think this is a near term challenge that we have to work our way through. How we thought about this, if you move to the middle of the page, 100 US. Manufactured, and I’ll talk about what that means as I give you an update on the automation of our factory here in Turtle Creek. High domestic content takes out complexity in your supply chain with a path to get to 100% of US. Content and a supply chain that’s portable that you can bring to other regions and geographies as we grow. And really, a technology that brings flexible operations, ability to deliver multiple revenue sources to customers and ability to meet the demands of an ever evolving, more complex energy ecosystem and power generation and electricity requirements. How do we position the company when you look at what’s happening? Nathan will go through where we’re how we’re seeing the pipeline advancing. We have announced 5.4 gigawatt hours of MOUs in new geographies. Scaling manufacturing, we’ll go through and talk about where we are as far as bringing forward the facility that we have in Pittsburgh, and we continue to work on our accelerated expansion plan. And as we have meaningful updates, we’ll provide those to you as they occur. And lastly is that differentiated performance that we talked about, which Nathan will highlight as he gives you a case study on how we think we’re a great partner to help data centers achieve the goals that we need moving forward. If we go to the following page, we’re reiterating our 2025-year guidance. When we look at this, we feel like we’re solidly within the range of $150 million to $190 million of revenue. That’s 10x what we did last year. When you look at why we are reiterating that guidance. On the manufacturing side, we were 51% higher on our Q1 deliveries versus Q4 of 2024. And in fact, as we sit here today and talk to you this morning, what we’ve shipped to the field in 2025 exceeds what we’ve shipped in 2024. The team is really starting to get a strong foundation around how we execute and deliver to customers. Inside of all this, as we move forward, we will see some pricing variability as we start looking at the overall revenue numbers. Given the fact that I talked about this on the last call, there’s some initial projects that were early on to build references, to build relationships with customers that are lower price points that we’re seeing in the market today as secure new revenue for the company. On the far-right hand side, what are the revenue triggers that allow us to get to that $150 million to $190 million. We are staging our sub assembly automation. I’ll give you an update on that in a moment. The next piece of this is increasing the containerization capacity. Let me explain that for a second. We build our product from a raw material into a battery module. Battery modules go into a container. Containers are wired and software is installed, and that’s installed out in the field. The first part where we focused a lot of our efforts on, on automation of the process was that taking raw materials into components, components into batteries and really getting that up and running. And that’s why you’re seeing the growth in our output. But when you take those batteries, think about assembling a truck on an automated line. We’re now finding ways that we think we can automate that and make that faster and deliver higher quality. Now that’s going to mean a little bit higher capital costs as we start thinking about that as we’re moving forward, but still it’s really leading when you think about what it would cost to bring capacity online in the future. And then lastly, you’re going to start seeing us generate more project and service revenue. So things that happen beyond the factory doors. Again, going back to what I said early on, we are a direct to customer model, not a ship to dealer model. So you’ll start seeing us generate revenue out in the field and revenue from service of the equipment that’s out running. So we feel like with all the uncertainty, and we’ll continue to manage that and keep everyone updated on that. But as we sit here today, we feel really comfortable about the guidance that we’ve given and what the team needs to work on. There’s a lot of things and a lot of areas that we continue to manage. But I think with the team that we have inside the business, we feel confident in reiterating the guidance as we move forward. If we go to the next page, just quickly on delivering profitable growth. Our goal is not to just be a high growth company, but it’s to be a profitable high growth company. You can see the three main areas of delivering profits are around getting your direct material or cost of the product where you need to be. I talked about that earlier and what we’re seeing as far as working with suppliers. We have many suppliers coming to us and wanting strategic relationships with us. The team will keep working this, but we feel confident and comfortable where we are as far as the core components inside the product and the partners we have to deliver those. On the right-hand side of this page, I think we have to pause and talk about the scaling up operation that we’re talking about. You don’t scale a factory overnight. Like when you think about what we’re seeing in the tariff with tariffs, right, and people talking about to bring manufacturing back to The US, you have to start building it and then over time you get there. We’ve been at this for multiple years. What we know is you have to scale the facilities, scale your capabilities, scale your labor, train them and then grow into this. We’re seeing improvements from where we started with still room to grow as we continue to ramp into the second half. If we go to the next page, one of the most important parts of how we’re doing this, and probably you’ll hear in the background as I’m talking, this rhythmic banging, that rhythmic banging that you’re hearing is the left-hand side of this page, that battery parts being made. So this is all about automating the upfront raw materials come in, subassemblies get manufactured, they go into a battery, a battery gets assembled, the battery goes into the container. We can see our before and after shots about how the team is making this better. On terminals, so think about battery. A battery has two terminals and a battery has 19 bipolars. And we’ve sized all this to be able to get the delivery that we want off of the automated line that’s been up and running with great yields. We see not only does output go up, but labor rate comes down. And when that output goes up on the square footage that you have, your manufacturing overhead comes down. When that labor input goes down on the output that you’re putting out, that middle column on the prior page goes down. So these are two critical components for us to grow into the space that we have and the capacity that we can achieve off of our automated line. It’s another one of these mesmerizing experiences for me when I go and look at this product working. The left-hand side is in the factory producing and making that banging noise that you hear. The right-hand side is at our supplier being factory acceptance tested to be shipped here. On the left-hand side, you install one of those. On the right-hand side, we install eight of those lines to get up to full capacity, and that’s going to be happening over the next sixty to ninety days. We feel really good about the performance that we see and our ability to scale the business. And with that, I’ll turn it over to Eric that will walk through the financial results in the first quarter. Thanks for listening.

Thank you, Joe, and good morning, everyone. Turning to our financials. We had a great start to 2025, delivering EOS’ highest quarterly revenue-to-date. We reported $10.5 million in revenue, representing both a 58% year-over-year and 44% growth from prior quarter. As Joe mentioned earlier, this performance was driven by increased customer deliveries with Q1 achieving record output across all areas of our manufacturing processes. That momentum has continued into the second quarter with April records being set over March. Cost of goods sold came in at $35 million resulting in a gross loss of $24.5 million. The increase in COGS was primarily driven by an increase in product shipment volumes and inefficiencies associated with our current manual subassembly process. These impacts were partially offset by 42% lower per unit product costs year-over-year. Looking ahead, we expect our transition to automated subassemblies to increase productivity as Joe discussed earlier, positively impacting our gross profit margins. Notably, our underlying gross margin improved compared to both the prior year and previous quarter by 93 percentage and 89 percentage points respectively, reflecting meaningful continued improvements in labor and overhead costs as we continue to scale production. We are driving down costs operationally and continuing to see improvements in margins across our customer contracts. As the year progresses, improved per unit economics are expected to increase the net realizable value of our inventory, thereby reducing the need for an inventory reserve on the balance sheet. With our current trajectory, this trend should continue delivering overall favorability to the P&L. Now turning to Expenses. We recorded $28.4 million in operating expenses. While operating expenses increased year-over-year, the growth was primarily driven by two factors: first, approximately 48% or $4.3 million of the increase with noncash items such as stock based compensation, PP&E write downs related to manual sub assembly equipment and depreciation. The remaining 52% of the increase was driven by strategic headcount growth across several key business areas as we continue to build the foundation for future scalable growth. We reported net income of $15.1 million positively impacted by $74.6 million in non-cash gains related to the fair value of the remeasurement of warrants and related derivatives, which were influenced by the end of quarter stock price. Adjusted EBITDA loss for the quarter was $43.2 million but importantly, we had a margin improvement of 145 percentage points. Moving to cash. We ended the quarter with over $111 million in total cash. We continue to make meaningful gains in operational efficiency and working capital management. Further, we received the last $40.5 million from Cerberus, fully funding the term loan and had $7 million in cash inflows from warrant exercises. As it relates to Cerberus, last week was our fourth and last measurement period under the term loan. For the April milestones, we successfully achieved three of the four while extending the fourth and final milestone. The milestones achieved for April related to material cost,

Thanks, Eric, and good morning, everyone. Before we get into our commercial results for the quarter, I would like to briefly address the topic of tariffs, which have been top in mind for many. As Joe highlighted earlier, tariffs should be a strong tailwind for our business, particularly on the commercial side. With tariffs driving up costs for some of our competitors, we’re seeing incremental interest from prospective customers seeking a US. based solution, and we’ve had multiple new opportunities arise for projects originally scoped for incumbent technologies. Our American made product with 91 domestic content is becoming a key competitive advantage, and we expect this to be a significant growth driver moving forward. We saw strong momentum in our commercial pipeline during the first quarter, closing the quarter with $15.6 billion in opportunities, reflecting a 17% year-over-year improvement with a 10% increase from the prior quarter. This pipeline now represents 60 gigawatt hours of long duration energy storage. We experienced a net increase of $1,4 billion in Q1, primarily driven by large project opportunities in Puerto Rico, multiple eight-hour projects in California, a series of projects with a traditional oil and gas player in ERCOT and new projects tied to both direct and indirect data center activity. While our pipeline includes a wide range of customer use cases, data centers remain a strong example of EOS’ growth potential. These opportunities come from both traditional developers citing projects at existing interconnects, along with virtual power purchase agreements with developers selling to data center operators to improve their reliability, sustainability and generation mix. In the first quarter, we signed a seven fifty-megawatt hour MOU with a large developer to supply energy storage through a virtual power purchase agreement to top tier data center operators. This agreement highlights the increasing role of long duration storage for today’s hyperscalers. During the quarter, we also saw strong growth in lead generation. Quarter over quarter lead gen increased by 32% to $13.5 billion representing 55 gigawatt hours of storage. Of that, $5.4 billion, zero was added in Q1, while $2.1 billion of prior quarter lead gen progressed into the opportunity pipeline. While most of our commercial focus remains on The US. Markets today, we are very excited about several other emerging opportunities. Specifically, last quarter, we discussed The UK’s cap and floor program. Shortly after quarter end and not yet reflected in the numbers for Q1, we signed two important MOUs with strong developer partners. The first was a five-gigawatt hour MOU with Frontier Power, a leading UK Developer founded by former National Grid executives. Under the MOU, Frontier plans to submit multiple bids utilizing the EOS technology in the first application window of Ofgem’s long duration energy storage cap and floor framework. This program guarantees a minimum level of revenue for long duration energy storage operators, reducing price volatility risk and incentivizing investment in alternative technologies. This new program requires a minimum of eight hours in storage duration, making EOS technology a strong fit. We expect submissions to be submitted in June and anticipate projects to be selected and awarded before year end. This partnership also opens the door to developing local manufacturing in The U K. Should significant project volumes materialize. As we have discussed previously, our supply chain strategy was designed to be transportable, and we can co locate manufacturing capacity near customer demand. The second MOU is with Trip Ventures for a single 400-megawatt hour project in Puerto Rico. We expect this to become a firm order as soon as the governmental NEPA review is completed on the project. With this first project moving forward, we believe EOS’ technology will become a significant part of enhancing the grid resiliency in this harsh island environment. Now transitioning to our backlog. Our 31 backlog stood at $681 million representing 2.6 gigawatt hours of storage, which is increase. Although backlog was flat quarter over quarter, we signed two microgrid orders and delivered over 10,500,000 in revenue for the quarter. You may recall that we announced the San Diego Navy project in March. Fully funded by the California Energy Commission, this strategic order provides essential energy resiliency to the US. Navy’s Western fleet. As bases and other military applications rely on storage to ensure operational reliability and security, we believe that our American made technology will become the preferred solution. After quarter end, we also signed an order with one of the largest regulated utilities in the Southeast with a strong pipeline of storage projects, a name that many of you would recognize, to deliver on a microgrid project for a school district in Florida. While net growth in our backlog was flat from last quarter, we’re very encouraged by market dynamics and the near-term project demand that we see ahead. With that, I want to take a deeper dive into data centers and how EOS technology is uniquely positioned to serve this critical and fast-growing customer segment. Data centers represent a compelling long-term growth opportunity in our pipeline. The enormous and continuously increasing power demands of data centers make long duration energy storage the most efficient and immediate solution for reducing operating costs and increasing uptime. The EOS

Thank you. [Operator Instructions]. And your first question comes from the line of Chip Moore from Roth Capital. Please go ahead.

Good morning. Thanks for taking the question. I want to maybe ask about subassembly automation. I think you said your first terminal cell passed slight acceptance. Just any more color on early integration there? And then maybe help us think about that ramp in Q3 and how to think about the revenue trajectory baked into guidance?

Hey, Chip, good morning. So yes, you can you could hear it in the background here working and building parts. So it’s up and running, and we’re scaling into the production ramp. I mean, it’s already at partial run rate producing more than we were producing on our semi-automated line. It’s already having an impact on the production for the factory. I think when you think about where we are on subassemblies, as I said, we’ve got the first station for subassemblies, the first of eight going through site acceptance testing at ACRO. From there, you follow on with the seven coming online here as we get through the second quarter, And we’ll ramp into that as we get into you’ll start to see like a ramp as we install in May, June and then getting up into capacity in July and August. So I think as you think about as we’ve said before, you should see quarter over quarter improvement in output. If you look at what we’ve done in the month of April, we produced as many cubes in April, ’70 ’5 percent of the first quarter volume. And as we said, we’ve already, as we sit here today, produced as many cubes in 2025 as we did in 2024. So we’re finding good old-fashioned efficiencies. And I think as the subassemblies come in, we’ll be able to run the line, the automated line longer. And I think you’ll see that revenue growth that dovetails into getting into the guidance range for the year.

Thanks, Joe, for that. And maybe a follow-up, Just around all that’s going on in the world and tariffs and some of that uncertainty and understanding that that’s going to be a positive for you guys. But I think you called out some of that near term uncertainty can shift project timing. Is that something you’re seeing or is that sort of baked into the maybe the low end of the guidance range? Thanks.

Yes. I think all the above, Chip. And I think, obviously, markets don’t like uncertainty. I think the certain thing is we need energy storage for our power grid. So I think you’re seeing projects moving forward. I think people are going to wait and see what happens with 45X with the investment tax credit. But we’re still seeing other things move forward with regulated utilities and other areas where you’re like co op developers and things like that. We just keep working forward to get things closed out, and we’ll keep everybody updated on where we are. But I think the most important thing we always have to remember is energy demand is going to double, and you need long duration energy storage in order to meet that demand, and that’s what we’re building towards.

Great. Thanks very much. I’ll hop back in queue.

Great. Thanks, Chip.

And your next question comes from Thomas Boyce from TD Cowen. Please go ahead.

Thanks very much for taking the questions. Maybe just a follow-up on Chip’s initial point. With the sub-seventy automation kind of well underway and then containerization slated for the second half of the year. Can you maybe frame for us just on the relative impact to labor between the two? I mean, my feeling obviously is that sub assembly is far more labor intense, but I just wanted to kind of understand how we get to the kind of the 1.3% scale on labor that you’re targeting?

Yes. When you look at we’ve always talked about is that we’ve used a flexible labor force as it relates to sub assembly manufacturing and that requirement for labor will go down significantly as we bring the sub assembly manufacturing online. Not only that, but quality and yield go up off of those as well. So it’s not just about like in that labor number is production employees, but it’s also time spent on part inspection and make sure that you’re passing good parts in your manufacturing line. So that all comes down and that’s how you and that’s ultimately how we get to that labor number. On the container side, look, that’s another area that we’ve got to work on. I think as we’ve thought about and looked at containerization, it’s an important thing that our thinking around this has evolved over time, where it is relatively labor intensive right now as far as wiring battery modules in the trays, integrating trays in the containers, and then testing and shipping. We think there’s ways that we can speed production up. So what really what you’re talking about is your labor rate per unit comes down, but your total labor number will stay the same, like from an employee standpoint, but you’re getting more throughput and you’re able to do things faster, the same number of employees. And it’s a huge productivity gain that we’re going to gain on both sides of those. And on the containerization side, we’re looking at incremental investment that allows us to get incremental output on the same asset base. And we’ll come back with more info on that as we work through the bids from suppliers to be able to ramp up that automation.

Perfect. No, I appreciate that. And then just a follow-up. I saw reports in the news that DOE had missed a $365,000,000 funding deadline for energy storage projects in Puerto Rico. Is that something that your project specifically were being funded by? Is that related to the NEPA piece?

I just see if there’s any exposure there from that. Well, they can add in, not that we’re aware of. And like I think like just to be clear with NEPA, NEPA is an environmental review of the site. And I think like where we’ve gotten with the customer is we’ve laid out a really strong project that helps the island that delivers returns for the customer. But that what you’re talking about, like, I don’t know, Nathan, if you’ve heard anything on that, but I haven’t seen that.

No, we have regular conversations with the customer as recently as yesterday. Everything’s moving forward with the project. I don’t I’m not aware that this would have any effect on the project we announced.

Got it. Thanks so much. And then maybe just sneak one more in before hopping back in queue. It’s just on I was intrigued you had mentioned the second DOE loan reimbursement timing. Has that meaningfully shifted? How are you seeing that come down the pipe?

We’re in regular contact with DOE. We’re working through the process with them. They’re obviously when you have someone new coming into a job, they’re doing a portfolio review, and we’re part of that portfolio review. And we’re on track to submit for the reimbursement as scheduled.

And your next question comes from Martin Malloy from Johnson Rice. Please go ahead.

Good morning. Thank you for taking my questions. First question, I just wanted to ask about potential expansion of capacity beyond the two-gigawatt hours of annual capacity and lead times, whether it be at Turtle Creek or a Greenfield facility, how we should be thinking about the timing of ramping capacity expansions?

Yes. Hey, Marty. Good morning. Yes, so we are in the like we talked about last earnings announcement, we’re in the process of looking at a second site. The receptivity of locations hosting the second factory for EOS has been great. We’re working through with a couple of geographies and states to look at where we want to locate and what that means for us from the ability the facility that we would have, the logistics around that facility and the workforce. As we have updates on that specific topic, we’ll give them, but we’re in the process of negotiating. We talked about on the last call about going out and instead of doing this line by line, doing a bulk order for the sub assembly and battery module assembly lines. So basically what we have here in Turtle Creek right now, and we’re in the final negotiations with suppliers on that to look at delivery times. I think what we would say is like given where we are, you’re talking about year end, probably implementation Line two into next year for the ramp up as far as timing for Line two would be concerned. And then on the second factory, we’ll come back on that. Like we’re really happy about right now is with Turtle Creek, every week we set a record for production. Every week the team increases from the week before and we just we also need to keep focused on optimizing what we have while expanding and we’ll come back with updates on that. But would think about meaningful step up in volume happening late this year, beginning of next year.

Thank you. And for my second question, just wanted to ask about repeat orders and particularly from larger utilities or developers and kind of curious about the Florida order if that was from a utility company that had pilot tested the

Yes. What I would say is that is an order that came through an existing relationship, one that we’ve been working with for a long time. So yes, that’s a repeat order, would say.

Great. Thank you. I’ll turn it back.

Thanks, Marty.

And your next question comes from Patrick Wallet from Stifel. Please go ahead.

Hey, it’s Pat on for Steven Jagaro. Thanks for taking the questions. You talked to some pricing variability in the backlog. Is it reasonable to assume the older orders are going to be fulfilled ahead of newer orders? And is there anything you’re doing to smooth variability quarter to quarter? And any insight on pricing variability going into 2026 deliveries?

Yes. So Pat, yes, older orders, lower price, been like so first off, we scheduled the orders, let’s take a step back, we scheduled orders to customer demand, not to price. So we’re not as focused on quarter-by-quarter numbers as we are as getting the product up and running in the field per customer demand. So that’s the first prioritization. What I would say is, in 2Q, there’s as we talked, we talked about this the last time and we talked about it in the presentation, there are some projects coming through in 2Q that are in the lower end of our price range. I think Nathan can talk a little bit about what he’s seeing out in the market on price in the last couple of months here.

Yes. Look, think with the increased focus on safety, operating cost, flexibility and tariffs, like we said earlier, these are tailwinds. And all of that I think is combined to one, continue to support the prices that we’re seeing in our pipeline, right? So you can see what those are. But also to drive increased interest and increased demand for the product. If you look at what’s in our backlog and what’s in our pipeline, think that’s a pretty good indication of where we see pricing shaking out for the next several years. A lot of what’s in the pipeline, like we said, has been added recently and it’s at prices that we’re seeing in the market.

Pat, the other thing we’ve always talked about is, like, I know we want to simplify things and get to a to a to a levelized price point. But, like but it truly is apples and oranges when you look at us versus others. And what we spent a lot of time with the customers on is explaining to them that with EOS’ technology, you can run multiple cycles a day. So the price to revenue is astronomically better, and that’s where LCOS comes out and where we have a lot of interest in the market today and that’s what we keep driving on is you hear the stories about being able to buy lithium in the low 100s, the mid 150s, not necessarily a D. Block, probably cells or packs that are going go into a block at that price range. But with Eos, when we sit down and talk to people about it, it’s like, yes, there’s a CapEx number. But if you take the case study that Nathan laid out on data centers, there’s a couple of important things that we really want to talk about is multiple cycles drive down the levelized cost of storage because they can get more energy out of the same asset. You can’t do that with other technologies because you can’t cool it down. So yes, maybe you can run an eight-hour cycle on lithium, but it’s probably over it’s oversized or lower power, and you’re going to have to cool that. With ours, you can run a two and a six, a four and a four, or a six and a two. That gives you the flexibility you need given the ups and downs that you have in demand for power. The other big thing to talk about is this, maximizing where Nathan talked about low auxiliary power, that not having to run a cooling system and a fire suppression system. You get 3.5% more computing on a data center because you’re not sucking power out of your power generation to maintain your system. Those are two big things when you start talking about price versus competition. We really don’t talk price, we talk value. And there’s a lot of value in an EOS system out in the market.

All right. Appreciate the perspective. Thank you. You had mentioned the potential for local manufacturing abroad if demand presents itself. Curious what sort of levels of demand you’d need to see to pursue a sort of localized manufacturing strategy? And if you think you could roll out the abroad localized manufacturing before completing the eight-gigawatt hours of capacity under Project Amazing in The US?

It depends. So yes, what you need to what we need to always think about, and this is in my my experiences, is you don’t wanna build a factory for a project because then afterwards, have a problem. Where you build the factories where you have a demand that’s gonna sustain a factory over time. And that’s the decision-making process that we’ll go through. We are very excited about what’s happening in The UK and the potential for that to be a market for us and other countries in the EU. So we’ll see how that plays out. But like we have to have something that’s going to sustain itself over a period of time. Otherwise, you wind up with a stranded asset, and we don’t really want to do that for the long term.

Great. Thanks so much.

And your next question comes from Joseph Osha from Guggenheim. Please go ahead.

Hey there. Good morning, guys. Hey, Joe. Just if I look at the slide that shows your cost reductions across different categories and the targets for when you are at scale, I’m just trying to understand what scale means. Is that eight gigawatts once a maze is fully up and running? Just trying to use this as a way to get at the gross margin question.

Yes. So it obviously, Joe, as you look at the chart itself, it ramps down over time. What we’re talking about when we’re fully at scale is getting above that gigawatt hour of production number to be able to do that on the line. So they can remember each line is two-gigawatt hours, like we have expanded the capacity we can get off a line. So that’s what we are working towards.

Alright. So I guess I am confused. Are you saying if you have got one two-gigawatt hour line running and that’s at better than a gigawatt hour that scale? I guess I don’t quite follow.

Yes, Joe.

I’m sorry?

Yes. That is what we’re saying.

Okay.

Yes, as it relates to this chart. And obviously scale is a relative term. So the greater the scale, right, gets a greater production capacity, you’re going to get greater benefit as it relates to cost in each of these categories.

Okay. So with that in mind, are there any comments you’d be prepared to make today about what that chart tells us about how we should think about gross margins at the end of 2026? What it sounds like we could reasonably expect to have two-gigawatt hour lines running How assuming everything goes well, how might that inform our thinking about what margin looks like, say coming out of the end of next year?

No, we’re not going to give that guidance, Joe, you know that.

But I got to ask. All right. Second question, I was going to ask a little bit about the LPO and then a question came up earlier. Joe, believe I heard you say portfolio review. What does that mean? Are they coming and asking you questions that they haven’t asked you before? Tell me a bit about what the portfolio review process looks like for you guys.

Yes, and this is Eric, Joe. It’s just their standard process. We’re engaged with them on a daily basis as we go through the process of getting of each draw and then just maintaining our compliance with the loan as it’s documented. That’s what Joe means, just consistent communication. It’s business as usual, no different questions, just continuing to work with them and business as usual.

Our rhythm hasn’t changed, Joe, at all. I think what you’re new and anybody that’s new in a job wants to look at what are you going to do and they’re just going through the normal looking at it and asking us question, maybe in a lot of instances questions that we’ve probably already answered, but it’s a new person in the job and you’re just bringing them up to speed on where we are.

Okay. So you’re not as you think, obviously, that’s important. They’re not sending any signals to you at this point that would cause you concern?

None at all. We would have said that. We have been very happy on the engagement.

Yes, that’s what I was going to add is it’s not even business as usual. They’ve been very collaborative working together. They’re being incredibly good constructive partners, as Joe mentioned. Anytime you get any new boss, sometimes they may change things as it relates to just their process. And But we are getting everybody up to speed there and it’s actually been a really good relationship since I have been here.

There are no further questions on the queue. I would now like to turn the call over back to Liz Higley. Please go ahead.

Thanks, operator. We now want to get into some of our SAGE technology questions. A few of them most commonly asked or already addressed on the call, but we’ll go through a few more. So the first question, what is currently the biggest headwind to converting late-stage pipeline opportunities into signed contract orders? Are macro factors such as global tariff or tax credit uncertainty causing developers to delay finalizing orders?

Thanks, Liz. So, I guess we should just start off and talk about some of the macro factors. I mean the world obviously needs energy storage. Energy consumption, energy demand is expected to double, right? We’re getting more intermittent generation resources on our grids and we’ve got aging infrastructure on the grids. I mean, there’s some big fundamentals that say we’re going to continue to need long duration storage for the foreseeable future. So then we bring it closer to home and say what’s causing uncertainty or is there uncertainty right now in converting opportunities. Think anytime you have folks watching the headlines to see what’s going to happen with the ITC, what’s going to happen with some of the other incentives, Uncertainty kills deals, uncertainty slows deals. Customers we’re seeing are rerunning their return models. Can they get to appropriate returns as Joe talked about earlier, we’re going back having conversations with customers about multi cycle, double cycle, other things that they can extract value from these batteries in order to work with those return models. So I think it slowed things down. I don’t think it changes our long-term view of what that pipeline opportunity is and how that converts to backlog over time.