Energy storage solutions provider Eos Energy Enterprises reported a 148% surge in revenue in the fourth quarter (Q4) of 2023 to $6.6 million, driven by higher production volumes on the semi-automated manufacturing line for the Z3 Cube.

The Z3 Cube is a self-contained energy storage system built using the company’s Z3 battery modules and standard shipping containers. It was launched in September last year, helping Eos significantly reduce production cycle times and scrap rates, the company said.

“Eos transitioned its entire manufacturing capacity from Gen 2.3 to the new Eos Z3 Cube. We’ve already begun seeing the anticipated operational benefits associated with the Z3 battery design that provides improved power density along with lower unit costs from its simpler mechanical design,” said CEO Joe Mastrangelo.

The Nasdaq-listed company’s gross margins in Q4 improved by 66% year-over-year (YoY), reflecting the streamlined manufacturing process. Meanwhile, cost of goods sold came in at $30.4 million, while operating costs fell by 10%.

The order backlog stood at $534.8 million as of December 31, 2023, up 15% from a year ago, as commercial demand remained robust. The company said its overall commercial opportunity pipeline surged 77% to $13 billion.

Full Year 2023

Eos reported revenue of $16.4 million for the full year (FY) 2023, down 8.4% from $17.9 million in 2022 as the company transitioned manufacturing to the new Z3 Cube battery system.

However, the cost of goods sold declined sharply by $63.5 million, or 41%, to $89.8 million. This led to significantly improved gross margins driven by lower raw material costs and initial benefits from the Z3 program.

The net loss for 2023 was $229.5 million, nearly unchanged from $229.8 million in the prior year, as higher operating expenses offset improved gross margins.

“There continues to be strong demand signals for longer duration energy storage,” said  Mastrangelo.

He also said that the company is in talks with two large Indian corporations to incorporate its battery storage solutions. Eos is working with the U.S., Italy and Australia to take advantage of long-duration energy storage needs of the countries.

The company recorded an 89% drop in revenue in the third quarter as lower sales hurt its top line. In the quarter prior, revenue fell 96% as the company transitioned to the Eos Z3 battery module.