Why Eos and ESS Are Betting on Long-Duration Storage

Neither company is profitable. One reported just $128,000 in quarterly revenue. The other is burning through cash at a rate that would make most investors reach for the antacids. And yet, Eos Energy Enterprises and ESS Tech Inc. are doubling down — structurally, strategically, and financially — on the idea that long-duration energy storage is about to become a very big business in the United States.

That bet is either well-timed or wildly optimistic. Probably both.

What Long-Duration Storage Actually Means — and Why It's Hard

Long-duration energy storage (LDES) typically refers to systems capable of discharging power for four hours or more, often targeting the 8-to-100-hour range that lithium-ion simply can't serve economically. The grid increasingly needs this. As solar and wind penetration rises, the gaps in generation — overnight, during multi-day weather events, and across seasonal demand swings — get harder to manage with short-duration batteries alone.

The problem isn't whether LDES is useful. The problem is that building a commercially viable, bankable LDES business is brutally difficult. The chemistry is harder, the supply chains are less mature, and the financing structures haven't fully developed yet. Eos and ESS are betting their existence on solving all three simultaneously.

Eos Energy: Scaling Fast, Still Bleeding

Eos reported Q1 2026 revenue of $56.9 million — a 445% year-over-year increase from $10.4 million in Q1 2025. That number deserves a moment of context: quintupling revenue in twelve months is rare for any industrial company, let alone one that was questioning its ability to survive as recently as late 2024.

But the financials tell a more complicated story. The gross profit loss widened to $44.4 million, up from $24.5 million a year ago, and the adjusted EBITDA loss grew to $68 million from $43.2 million. Revenue is scaling. So are losses. That's the classic manufacturing ramp problem — you're spending ahead of the cost efficiencies that only arrive at volume.

The going concern language that haunted Eos through much of 2025 is officially gone from its filings, which matters enormously for customer confidence and financing conversations. Management's Q4 2025 assessment concluded that "substantial doubt regarding the Company's ability to continue as a going concern no longer exists" — a sentence that, in the world of pre-profitability industrials, functions as a meaningful milestone.

CEO Joe Mastrangelo put the current moment plainly: "The market is telling us what it needs: long-duration storage that is safe, American-made, and financeable at scale." The "American-made" framing isn't just patriotic positioning. With Eos' manufacturing expansion in Marshall Township, Pennsylvania — planned capacity of up to 8GWh annually, backed by roughly $22 million in state funding and a $352.9 million total investment in new production lines — Eos is making a deliberate bet that domestic sourcing becomes a hard requirement for utility and government procurement. Given current trade policy trajectories, that's not an unreasonable read.

The company also reported more than 6GWh of discharged energy across its installed base in Q1. That's operational proof of concept. The harder task, as Mastrangelo acknowledged directly, is converting a $24 billion pipeline into actual installations.

ESS Tech: Smaller Scale, Longer Game

ESS Tech's Q1 2026 numbers look humbling next to Eos — $128,000 in revenue against a net loss of $15.9 million. But context matters here too. ESS builds iron flow batteries, a chemistry that uses iron, salt, and water as its primary inputs. No cobalt, no lithium, no complex supply chain dependencies. The tradeoff is that these systems are better suited to longer-duration applications (12 hours and beyond) and larger footprint installations, which means the sales cycle is long and lumpy.

The Q1 2025 comparison — $571,000 in revenue — shows a year-over-year decline, which on the surface looks bad. What matters more is that the adjusted EBITDA loss improved significantly, from $14.95 million to $10.26 million. ESS is burning less cash while laying groundwork for larger deployments.

The partnership that could define ESS's near-term trajectory is Project New Horizon with Salt River Project (SRP), one of the largest public power utilities in the US. Utility partnerships of this kind aren't signed without serious technical and commercial due diligence. SRP operates in a desert Southwest grid that faces extreme duck curve pressures — massive solar generation midday, steep demand ramps in the evening. That's exactly the use case long-duration iron flow batteries are designed to address.

Frontier Power USA: The IPP Play That Changes Everything

The most structurally significant development in these Q1 reports isn't a revenue number — it's Eos' formation of Frontier Power USA with Cerberus Capital Management.

Cerberus, already an existing Eos investor through a $315 million financing package struck in mid-2024, is co-capitalizing a new entity designed to develop and operate LDES projects at scale. The target markets: utility-scale installations, AI data centers, and commercial and industrial sites. A 2GWh firm capacity reservation agreement between Eos and Frontier Power is already in place, expanding Eos' order backlog beyond its March 31, 2026 baseline.

This is a meaningful structural shift. Eos began as an equipment manufacturer. Frontier Power positions it — through an affiliated entity — as an independent power producer. That's the difference between selling turbines and owning the wind farm. IPP economics, when they work, generate recurring revenue streams and long-term contracted cash flows that pure equipment suppliers never see.

The risk, of course, is execution complexity. Developing and operating a portfolio of multi-gigawatt-hour projects requires project finance expertise, interconnection navigation, offtake negotiation, and operational infrastructure that most battery manufacturers don't have in-house. Cerberus brings capital and deal-making experience; whether Frontier Power can assemble the operational depth needed is the open question.

Where This Goes Next

Both companies are, in different ways, betting on the same underlying thesis: that the US grid will need substantial LDES capacity within this decade, and that the winning technologies won't be lithium-ion chemistries adapted past their natural use case, but purpose-built systems designed from the ground up for duration.

That thesis has strong structural support. Grid operators are increasingly explicit about needing storage that can shift power across longer time windows. AI data centers — a demand category growing faster than almost anyone projected two years ago — need reliable, dispatchable power that goes beyond what two or four hours of backup storage can provide. And federal and state policy, despite ongoing uncertainty, continues to treat domestic clean energy manufacturing as a priority.

Eos has the more aggressive near-term target: $300-$400 million in 2026 revenue guidance, ambitious enough that any significant project delay could create problems. ESS is playing a slower, more methodical game, with a chemistry and business model better suited to patient capital.

Neither story is finished. But both companies are past the question of whether LDES is real. The question now is who builds the infrastructure to deliver it — and whether the market moves fast enough to meet them.

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Suggested Internal Links:

• [INTERNAL LINK: long-duration energy storage]
• [INTERNAL LINK: Eos Energy Enterprises]
• [INTERNAL LINK: ESS Tech Inc.]