Eos Energy Enterprises (EOSE) shares fell 12.18% to $3.82, then dropped an additional 1.05% in after-hours trading to $3.78. The decline came despite a sharp year-over-year revenue increase, a major new battery order, and a record backlog, as investors weighed deep quarterly losses and a narrowed full-year revenue outlook.

The US zinc-based energy storage manufacturer reported second-quarter revenue of $68.8 million, representing 351% growth from the same period a year earlier. The increase was driven by a 207% rise in cube deliveries across the company's expanding project base. First-half revenue exceeded the company's total revenue for all of 2025. Eos positions its zinc-powered technology as a non-lithium alternative for grid-scale, long-duration energy storage, a segment attracting growing utility and industrial demand as power grids integrate higher shares of intermittent renewable generation.

Heavy Losses Persist Alongside Revenue Expansion

Despite the revenue surge, Eos recorded a $48.8 million gross loss with a negative 71% gross margin. Higher production volumes and lower conversion costs improved the margin by 132 percentage points year over year, but underused factory capacity and increased project expenses continued to weigh on manufacturing results.

The company posted a $275.7 million net loss attributable to shareholders. The majority of the loss stemmed from fair-value changes on certain liabilities tied to quarterly share-price movements. Adjusted EBITDA loss widened to $71.4 million, compared with $51.6 million in the prior-year quarter.

Record Backlog and Major Orders Signal Continued Demand

Eos ended June with an $807 million backlog covering 3.4 GWh of planned projects, up 25% sequentially and 20% year over year. Orders came from six customers, including four new buyers and two existing customers returning with additional commitments.

After the quarter closed, Frontier Power USA placed a $100 million order for the first phase of the Blanquilla project. The order is part of a 2 GWh capacity reservation agreement with Eos. Frontier Power USA separately raised $263 million, surpassing its original $250 million equity target, and the joint venture expects to have more than $1 billion in deployable project capital. Its development pipeline totals approximately 16 GWh, including 1.8 GWh nearing construction milestones.

Eos also secured a Golden Dome defense contract for energy storage deployment at critical infrastructure sites, reflecting US government interest in resilient power systems for national security facilities.

Thorn Hill Expansion and Narrowed Guidance

Eos launched commercial production on Line 2 at its Thorn Hill facility in June. The new line reduced battery cycle time by approximately 10% compared with Line 1, while bipolar line cycle times improved by roughly 11% during initial operations. The company currently runs one partial shift on the line and expects Line 2 to reach full output in the fourth quarter. For manufacturers scaling from limited runs to volume production, rising capacity utilization is typically a decisive factor in narrowing unit costs and moving gross margins toward breakeven.

Management continues to evaluate consolidating manufacturing operations into Thorn Hill, a move that could improve capacity utilization, reduce costs, and support stronger margins.

Eos tightened its 2026 revenue guidance to a range of $300 million to $350 million, down from its previous projection of $300 million to $400 million.

The company ended June with $364.1 million in total cash, including restricted balances. Its technology has surpassed 6.5 GWh of cumulative discharged energy across deployed systems, and projects totaling more than 200 MWh are expected to begin operations before the end of 2026.