ESS Tech, Inc.

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. At this time, if you have a question, you'll need to press the star 1 on your push button phone. I would now like to turn the conference over to Eric Byland. Please go ahead, sir.

Thank you. Welcome to ESS's second quarter of fiscal year 2025 financial results conference call. Joining me on the call today from ESS are Kelly Goodman, Interim CEO, and Kate Sodolnik, Interim CFO. Following management's prepared remarks, we will hold a Q&A session. Earlier today, ESS released financial results for the second quarter of 2025. The earnings release is in the investor relations section of the company's website. As a reminder, the information presented today will include forward-looking statements. including without limitation statements about our growth prospects, partnerships, energy-based product, financial performance, capital raising, including under our standby equity purchase agreement and strategy for 2025 and beyond, and the impact of regulatory and legislative developments. The forward-looking statements are also subject to known and unknown risks and uncertainties It could cause actual results to differ materially from those projected or implied during this call. In particular, those described in our risk factors set forth in more detail in our most recent periodic filings filed with the Securities and Exchange Commission, as well as the current uncertainty and unpredictability in our business, challenges with raising capital, issues with our partnerships, the markets, the economy, the current geopolitical situation, and the development and launch of the energy base. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call today are based on assumptions and beliefs as of the date hereof, and we disclaim any obligation to update any forward-looking statements except as required by law. During the call, we will also present certain financial information on a non-GAAP basis. Management believes that non-GAAP financial measures taken in conjunction with U.S. GAAP financial measures provide useful information for both management and investors by excluding certain items that are not indicative of our core operating results. Management uses non-GAAP measures internally to understand, manage, and evaluate our business and make operating decisions. Reconciliations between U.S. GAAP and non-GAAP results are presented within our earnings release. And with that, I'll turn the call over to Kelly.

Thank you, Eric. Good afternoon, everyone. Thank you for joining us for ESS's Q2 2025 earnings call. Before we begin with the quarterly updates, I would like to take a moment to reaffirm who we are as a company and the value we deliver. ESS is a technology leader in long-duration energy storage. Our proprietary iron flow battery platform is designed to deliver safe, sustainable, non-flammable long-duration energy storage for 10 hours or more. We use abundant domestically sourced materials, iron, salt, and water, and our systems are designed to cycle over 20,000 times with no capacity degradation. This combination of durability, safety, and sustainability positions ESS to meet a rapidly growing market need. As data center build outs accelerate and electrification efforts expand across industries, utilities face mounting pressure to deliver reliable, clean power at scale. At the same time, regulatory momentum around grid reliability and decarbonization is intensifying. These converging forces are exposing the limitations of short duration storage and lithium-ion technologies in particular are not well-suited to effectively address these long-duration needs at scale. At an early stage in our story, we built strong relationships with Tier 1 customers, representative of developers like SB Energy, the CNI space with Honeywell, and utilities, Portland General Electric, Sacramento Municipal Utility District, and Burbank Water and Power as examples, leaders at the forefront of the energy transition. Their continued engagement and partnership gives us the foundation to continue to build a long-term commercially viable business as demand for long duration energy storage accelerates. Let me now highlight the four key events from the first half of the year. First, we secured up to $31 million in new capital, strengthening our balance sheet and extending our operational runway as we scale deployments. Second, we significantly reduced our operating cash burn rate, down approximately 80% in June compared to the first quarter average. Third, we made a material leap forward with a new material substitution in the core ESS stack technology. which has demonstrated extended duration of 12 to 17 hours and accelerated our cost and performance roadmap by 18 months. And fourth, we closed our first commercial order for the energy base, an eight megawatt hour project with a U.S. strategic partner that is expected to be delivered in 2026. These results are encouraging. particularly as part of the operational reset we've been executing over the past two quarters. But let me be clear, we are not declaring victory, though we are showing real progress. While driving our roadmap forward, we remain focused on disciplined execution and capital control. In Q2, we made meaningful headway on our cost reduction goals. Although we had to make difficult but necessary decisions to ensure the long-term viability of the company, we used this inflection point to sharpen our focus on core functions, particularly around our technology, and to reposition ESS for future growth and profitability. Cost of revenue decreased 37% year over year, total operating expenses fell by 45%, Our net loss improved 50% and adjusted EBITDA approved nearly 60% compared to Q2 of last year. These are early but meaningful indicators that our cost discipline is taking hold. And while we are actively working to raise additional capital and provide additional resources for critical needs, we intend to maintain a controlled approach to cost. We are dedicated engineering resources to the energy-based design and productization, optimizing vendor contracts, and streamlining our delivery processes. On the commercial front, momentum continues to build. The eight-megawatt-hour energy-based order for a U.S. strategic partner is anticipated to be delivered in 2026, and we continue to see strong interest in our long-duration solutions. We are actively engaged in a growing pipeline of commercial opportunities, including RFP activity that reflects a meaningful step up in both scale and strategic importance for ESS. Notably, 100% of our pipeline is now focused on the energy base or core component sales, and our proposal activity exceeds 1.1 gigawatt hours since the energy base launch, highlighting the demand from the market and the value it brings to customers seeking safe, sustainable, and scalable storage. As part of our strategic pivot, we took a hard look at how to best position ESS for long-term success. And that starts with having the right leadership in place. We are excited to welcome Jigesh Trivedi as our new Chief Operating Officer. Jigesh brings over 30 years of experience across technology, product development, manufacturing, and operations, and we look forward to his impact as we begin manufacturing and delivery of our first energy-based orders in the coming quarters. We have also appointed Kate Suhodolnik as interim chief financial officer. Kate has served as ESS's controller for over two years and brings deep financial and operational expertise. I am confident she will play a critical role and helping us scale with discipline and focus. With that, I will turn it over to Kate to walk through the financial results.