All right, good morning, everyone. Welcome to the 26th Annual Needham Growth Conference Virtual Day. We are here with Eos Energy, ticker EOSE, with Nathan Kroeker, the CFO, and Joe Mastrangelo, CEO. They're going to do a quick presentation with the opportunity for questions at the end. So take it away, guys.
Hey, Quinn, thanks. And thanks to Needham for the invite today. It's great to be here with everyone. I guess still that time where you can say happy New Year. So happy New Year. Let's jump right in here on the first page. You know, we're proud to say, you know, we're going to hit our 2024 revised revenue guidance. Really a strong performance by the team in the fourth quarter. We're still going through and finalizing everything here as we close out the books and look to come back here and go through first quarter in more detail as we get into the March timeframe.
But really excited about the performance that the team had in December and November, and really, you know, working through and putting behind us the challenges that we had with our Cube deliveries and getting the supply chain up and running as we went through the end of the year. As we then shift over to the right-hand side of the page, you know, we also want to give a revenue outlook for 2025. You know, we're looking at a range of $150 million-$190 million. You know, that obviously will be at least 10x of what we did in 2024. When you look at, you know, how we positioned the company throughout 2024, we feel really confident about where we're going to be as we head into 2025.
As you think about how the year will evolve, you know, we've talked about bringing on automation for sub-assembly manufacturing, which will ramp us into the year. The second half of the year will obviously have more volume than the first half of the year, but we expect to keep run rate of like what we showed in the fourth quarter as we get into the first quarter and then continue to grow that as we get into the second, third, and fourth quarter of this year and narrow down that range. You know, that $150 million-$190 million, you know, that's a testament to the backlog that we have inside of the company and also a testament to the work that the team has done to position ourselves to be able to deliver.
It's not lost on us, you know, of our four years as a public company, how we've done as far as hitting expectations. But I sit here today with the funding that we have, the team that we have, and the backlog that we have, feeling really confident about our ability to be able to deliver. As I've told the team internally, you know, now when I look back at my 33-year career, we're doing something that I'm used to doing, and that's having a fully funded growth company and delivering on that growth. So excited to be able to keep everyone updated as we go through in 2025. So we go to the next slide. You know, the ultimate goal of everything that we're doing here is delivering profitable growth for our shareholders.
I want to revisit the strategy here, which will give us a backdrop as we go through and talk about the company and how we're positioning the company for the future. We continue to see a lot of strength in the marketplace. You know, when you look at the TAM projections, we continue to see demand growing. We continue to see that demand going towards larger projects, and we continue to see, you know, longer duration energy storage, and I think as you think about Eos as a company, you know, we've always thought of ourselves as an energy company. You know, we've developed a very simple system, and I think as you think about where energy storage is going to fit into the overall grid, it's not becoming an ancillary service. It's becoming a critical service to the overall mix of energy on the grid.
It's not just like as you've thought about energy storage in the past. We've always thought about it as something plus energy storage. I think energy storage is going to become a critical enabler for a more flexible, a stronger, more resilient grid. How do we do that as a company? You know, we have a differentiated technology. When you think about the core battery, you know, we're not a battery company, though. You know, we have a very simple system. We've looked at our system and really gone through here over the past couple of years on part elimination, system design, simplifying what goes out in the field, allowing the system to operate flexibly with reliability, and on top of that, we're putting digital capabilities.
We're putting a software business on top of this core product and system business to be able to operate the product flexibly and give the customers the flexibility that they need to utilize the asset, and ultimately, you know, where our shareholders get returns is when our customers get returns on the product, and this is how we'll win as we look forward. Those are the three legs that really position the company for growth in the future. You know, how do we grow? You know, we are a very capital-efficient company when you think about putting in manufacturing capacity, the cost of that capacity. You know, we've gone through a couple of learning curves, which I'll talk about in a moment.
But when you really think about how we designed our manufacturing system, how we thought about and really learned as we went and then automated, and now we're ready to expand as we have a system that's up and running, that then allows us to invest less capital for the capacity to grow. And at the same time, you've got a product that has a very low cost entitlement. You know, these are core commodities that are used every day around the world in other industries. There's no rare earths. There's no special materials in this. These are things that you find in daily use of what we do every day goes into becoming a battery. I think what the technology team has done with that product differentiation is come up with a safe product that you can go out and source and expand and grow.
And now that we're able to position the company, and I'll leave, you know, talking about how we do this middle piece of why we will grow, you know, we now have the capital and the partnership to be able to do that. You know, both the Cerberus investment in the company and the closing of the Department of Energy LPO loan, the Title 17 loan, has positioned this company to be able to go after how we'll win with the strategy over time and deliver that profitable growth that we expect and that profitable growth that comes off of our customers being able to use the assets that they install in the field to deliver returns. So if we go to this next page, just quick backdrop here for people new to the story.
You know, Eos, you know, we are, you know, I like to call us America's battery. You know, this is a company that the product was invented with American minds. It's built with American hands using American raw materials. You know, our supply chain is above 90% sourced in the United States on an American-made manufacturer. So this truly is, you know, we believe we're at the forefront of the American manufacturing renaissance and at the forefront of America being able to continue to lead in the energy space. Our product is a zinc aqueous electrolyte-based chemistry. Think of our electrolyte as being very similar to what's used in horizontal drilling in the oil and gas industry. It's a safe product. As I said before, there's no rare earths. It's fully recyclable at the end of its useful life.
I think a lot of times we want to think about the next quarter, the next year of how we deliver. But we've also thought about what does this look like in the next decades as the product is done operating after 20 to 30 years. We thought about the footprint that we would leave behind given what we're doing today. And our product is fully recyclable. It's non-flammable. There's no fire risk as it relates to the product. As I said, it's U.S. designed and manufactured with 90%. And it's military-grade, secure, and NDAA compliant, which is very important. I think you saw us last year announce closing an order for Camp Pendleton in California, which we're very proud of. And we feel like we can also help as the military looks to power its future.
I think Eos could be a key partner in that given the way that we've designed and built our product. Our pipeline continues to grow, $14 billion. You know, that's 50 GWh of opportunities that continues to churn and grow as we move forward. You know, we've got an orders backlog approaching $600 million. And I think most importantly there is on the right-hand side, you know, we've discharged 4.4 GWh of energy off of our systems out in the field. So it's becoming a field-proven technology. We've learned as we've grown and we learned and continue to take that 4.4 GWh of field operations and really use that to come up with how we use our software to make the assets more reliable, more efficient, and more flexible as we move forward.
I think one of the things we're proud of that happened last year was we were one of five U.S. companies and one of two alternate battery technology companies that was selected by Bloomberg New Energy Finance as a Tier 1 supplier. So it just shows the work that the team has been doing in building the company and positioning the company for what the world needs to power its future. I'm very proud to be part of that team. Just quick on history and evolution for those, again, just to give an update. You know, the company was founded in 2008. You know, we started shipping test systems in 2014. We developed a product in 2017. I joined the company in 2018 to help take that product to scale.
You know, in 2019, we actually brought our manufacturing back to the United States from, you know, the original strategy when I joined the company was manufacturing in China. We brought that back for a couple of reasons. You know, much easier to co-develop with suppliers that are nearby, much more capital efficient to do it locally when you looked at the financial position of the company back then, and it's now become a critical strength of the company as we sit here in 2025 and something that we can build off of. We came up with that manufacturing strategy. We'll talk about this further in a moment. We wanted to make this where you don't need to build massive factories to be able to manufacture. You want to build factories close to demand.
You want to take your supply chain and localize it, whether that be multiple factories in the United States or internationally. We've come up with a model that allows America's battery to become any other country's battery, create jobs, good-paying manufacturing jobs, and continue to grow energy security. We went public in 2020. We purchased our joint venture, and we're sitting here today right outside our factory doors here in Turtle Creek, Pennsylvania. You know, we've expanded. We've gone after in 2023, got our DOE Conditional Commitment. We launched the product that we're manufacturing right now called the Z3. We've manufactured, you know, in early 2024, 100th Cube, and I'll turn over to Nathan quickly here just to talk a little bit about what we've done from an investment standpoint and what he and the team have done from a bankability standpoint, so Nathan, turn over to you.
Appreciate it, Joe. Thanks. Look, I want to just, I've been with the company now for two years, and I've been focused on a couple of things. At the time I joined, we were getting a lot of feedback from customers around, look, we want to know that you guys have the capital that's going to get, you know, so that we can have the confidence that you guys are going to be around. We want to know that you can manufacture at scale in order to deliver on large projects. We want to know that the project is bankable so we can go out and get our projects financed. And then we want to see field data of these projects so we know your long, you know, the long-term operating history of the product.
And so for the last two years, I've been very, very focused on a few of those, a few of those issues. Beginning of 2023, we were focused on raising capital, small bits of capital to bridge us to more strategic capital partnership. As Joe said, we got our conditional commitment from the DOE in August of 2023. Part of what we needed to do to deliver on the conditions to close were to build the first automated line, raise the capital to build the first automated line, and then also, you know, achieve some of the other conditions. And so we went out and started talking to more strategic capital partners, began the discussions with Cerberus at the beginning of 2024. They went through rigorous due diligence through the technology, the design, the manufacturability of the product.
Very excited to have them join us as a significant partner in June of 2024. They've committed, it's $210 million fully committed with an optional $105 million revolver should we need it. We'll talk more about that here in a few minutes. But that capital got us the first fully automated line up and running, also bridged us to the DOE closing. We closed on the DOE loan the day before Thanksgiving. We got the first draw, $68 million before Christmas. The way that loan works is, you know, you submit for eligible costs. And so as we go forward and we continue with our expansion plans, we'll continue to submit eligible CapEx and OpEx costs for reimbursement at 80% reimbursement in the form of a very low-cost, you know, U.S. government loan.
On the bankability side, just to dive into that a bit, that's been another question or feedback we've gotten from our customers. We're hearing loud and clear. And so we have gone out and identified an insurance partner in Ariel Re, which is a very reputable name in the industry. We've identified a suite of products. The first one is ITC insurance. So really, it's a bridge around the ITC. So when a customer goes out and gets their tax equity or their bridge financing, they now have the confidence that ITC, if for some reason they're not able to realize that, we've got an insurance backer to give them certainty around that. The second one is ITC clawback. So there's a five-year recapture period. If for some reason this ITC gets recaptured during that period of time, there's an insurance product around that.
The second or the third and the fourth, pardon me, is a warranty backstop. So we're looking at extending the terms of our warranty, giving customers more flexibility in terms of what they need from a warranty standpoint in order to secure their financing. And then, you know, the question is, well, what if Eos is not around to service that warranty? So we've got warranty backstop insurance products identified to provide that certainty. As a part of that, there's performance guarantee associated with that insurance product as well. Should a particular lender or financier need some additional certainty around the performance guarantee or the off-taker for that matter, there's an insurance product around that. So a suite of products that I would say were the last piece we believe customers needed for bankability. That's in addition to a lot of the third-party validations that we've already got.
So like I mentioned, Cerberus, the Department of Energy we've talked about previously, they had an extensive due diligence process with industry-leading third-party advisors coming through our business over a multi-year period, again, on the technology, the design, the manufacturability of the product. And then most recently, DNV GL. We engaged DNV GL to come through and do third-party validation on the product as well. So I think those things give us a lot more confidence that the product's bankable and should lead to additional orders closing as we go forward.
So look, Nathan joined the company two years ago. Key homework assignment was create the financial flexibility for the company to grow. He's done that. I think one thing, you know, that I'd like to also recognize the team at Eos is that we talk about this Title 17 loan from the Department of Energy.
We're the first, and looks like the only, that will close under the Biden administration for non-lithium-ion battery manufacturer to close and receive funding. It was a four-year process for the team, and I really want to recognize the team for the tenacity and how they worked through that, and I really would have been concerned if I had seen other people closing loans faster than we have, but it was another first for Eos, and I think something that we all should recognize, and now being able to shift that focus from working through to close that loan to getting the capital and to expand the company is very exciting for us, so we go to the next page. Just quick on the product. Talked about this before. I talked about it earlier. Picture is a thousand words. That's our product on the left-hand side there. It snaps together.
Our manufacturing process has been consistently performing over the last 30 days at below 10 seconds cycle time on our line. 10 seconds was the target. You know, we're hitting consistently 9.9 seconds. Still work to do to optimize around that. But really what the team did was design something that, you know, what we learned on that prior timeline leading up to launching the state-of-the-art automated line was how to build this product, how to build this product so it has reliability, how to build this product to optimize performance, and now really what we're doing as we look at this is this is our product. Now let's improve upon what we have, so it's exciting to really think about where we can take this, and as you build something, you learn more and more to be able to update this, so like we call this the Z3.
We're at a Z3.5 when you think about where we're looking at this, and you know, and when you think about that in terms of like a software analogy, there'll be a Z3.6, Z3.7, Z3.8. We'll keep going to optimize this and get more and more performance out of this. It's a relatively new technology that has a lot of runway to be able to improve as we move forward, but it's not just in the product. You know, if we go to the next phase, I said, you know, we build that battery on the left. That battery goes into a Cube. That's a picture of the Cubes. That was, that middle picture is where we stubbed our toe in fourth quarter, and I've since overcome that since I'm developing a more diverse supply chain. You know, that's ultimately one link block of what the customer buys.
But if you look at the right-hand side of the page, we link those Cubes together into, you know, an energy string. That energy string then performs out in the field. That's a picture from the field. You know, those blue things you see on there, you know, it's in the middle of installation. You know, we got to get a little bit better at the pictures we take, but that is fresh from the team out in the field installing just to show how that looks and see what we're doing. But ultimately, what people buy is that part on the right-hand side. That's what they care about, and they want that to be able to run. Now, the product in and of itself and the hardware is important.
But if you go to the next page, ultimately where you deliver value is with software and having an Eos Digital Capability Roadmap, which we talked about last year. And a lot of the things that we're talking about here, we talked about in our strategic outlook last December. Want to come back here and just give everyone an update about what we're trying to do. First key thing is your state of charge. You know, how's the battery performing? How do you balance your system? So how do you take those Cubes? You know, when you really start scaling those up, you're talking about hundreds, if not approaching thousands, given depending on the size of the project. Cubes out in the field operating, how do you keep those all in balance? Think about it this way.
Imagine being in a room with a couple hundred people, and you want all your phones to be charged and discharged simultaneously. That's what we're doing at any moment of any day as we're operating a system, and then how do you manage the auxiliary systems around what you're trying to do? We keep it very simple. What we do is we take that state of charge, state of health, balancing data that we collect. We create algorithms out of that to create performance packages for customers. We really come down with simple controls. You know, we have no HVAC. We don't need a fire suppression system because of the way the product is designed. We're trying to reduce the downtime so that have the assets work harder.
You know, our product is designed in a way, you know, as we talk about long-duration energy storage, I think you have to take a step back, and a lot of people like to think of things sort of in simplistic terms of, oh yeah, well, you charge it up for X hours and you discharge it for X hours. That's not how the grid works. The way the grid works is that you may need to charge it up for a couple hours. You may need to discharge it. You may need to recharge it, discharge it again. Not many systems can do that. We can. And that creates an incremental value for our customers.
That's where when you look at like the levelized cost of operating our equipment, we become a leader in the marketplace when you start thinking about operating our systems out in the real world. That creates increased revenue for us and increased revenues for the customers. Very critical here as we move forward and continue to build out this roadmap like we did last year with scaling up production and scaling the product. This is another area that we're investing in and we'll continue to grow and keep everyone updated as we go to the future. Quick update on our American battery. You know, it's American-made, as I talked about. I talked about the cycle time. You know, we're at 1.25 GWh of annualized production capacity off our line.
As we continue to refine and bring in our sub-assembly automation here in the first half of 2025, that capacity will go to two GWh. We'll add lines there to get up to the total of eight that we've announced. We are also out actively looking for factory number two as our demand grows and then actively out hunting internationally to figure out what's the right markets for us to be able to grow and take the model that we've created here and export that around the world. Our first pass yield off the line, very importantly, has consistently been above 98%, which is great performance by the team, and when you look at our cost out roadmap, we exceeded the material cost out that we targeted for 2024. Unfortunately, with the volume that we had, we didn't achieve our overhead absorption that we initially anticipated.
But that's all about taking those that first bucket and getting the increasing capacity, flowing more volume over our asset base. But we have a product that has an inherently low cost position that we're just scratching the surface as far as how we can simplify that, take parts out of the system, continue to simplify, continue to find new sources of supply, and really drive cost out of the product and position ourselves for profitable growth. Turn it over to Nathan to close out here.
All right, thanks. Some of this we've already touched on, so I'll go through it quickly as we talk about strategic capital.
And when I say strategic capital, it's really capital that gives us the confidence that it will fund all of our CapEx and our OpEx and get us the positive cash flow and give us the ability to repay the loans that we're talking about here. So Cerberus, $210 million delayed draw term loan, $170 million of that has been funded to date. $40 million is expected to fund. It's tied to performance milestones, but we have confidence that we will achieve those at the end of January. And we expect to receive the final $40.5 million on that delayed draw term loan January 31st. As I mentioned earlier, there is a revolver. That revolver was put in place to give us some additional flexibility, contingency in the event there was a delay on the DOE loan or if we wanted to accelerate some of that capital expansion.
It's available to us at Cerberus's discretion. On the DOE loan, as I mentioned, $303 million. That is tied to eligible costs, which are CapEx and OpEx associated with the capital expansion. We can draw on that loan over several years as we deploy that capital and as we execute on the eight GWh factory expansion program. $68.3 million was received in December. That's 80% of the eligible costs that were incurred at that point in time. I would highlight extremely low cost of capital on this loan, sub 5% sitting with where treasuries are today, and so that's a great source of capital for us as we continue to grow. The other one that we haven't touched on yet is the IRA tax credits.
Everything that we build qualifies for the 45X credits, which the 45X credits are a production tax credit, $45 per kWh plus 10% of the electrode active materials. In our case, that's somewhere between $46-$48 per kWh that we have. We've elected transferability on these tax credits. We have sold our 2023 tax credits and some of our 2024 tax credits. We know that we can make a sale on these. The sales we have completed, we're done at a 10% discount because they were a small volume. We're now actively looking at buyers for 2025 and beyond. We're seeing indicative bids in the $0.93-$0.94 on the dollar range. That will continue to be an important source of capital for us as we go forward and expand production capacity.
Yeah. So look, as we, you know, before we turn over here for a little bit of Q&A, you know, really want everyone to truly understand that the battery is important and it's the core product. The system is what we sell and the software is how you operate it. Those are all critical components. How we position Eos to grow for the future. I think it's very important. This page here is very important as far as the capital flexibility that we have to be able to grow the company and expand. We believe also as we look for factory number two and beyond, there are many states that would love to have a factory like ours there, and we believe that we can work with states to be able to help have them co-invest with us as we expand and look to the future.
I think, you know, although not listed on this page, I think the work that Nathan and the team have done around putting together this suite of bankability backstops for people to kind of take the risk out of here. You know, my personal opinion is I look at some of this, the joke I said to Nathan when he came to me with this, like that's like me taking out a life insurance policy getting speared by a unicorn, but fine if people feel great. The probability is low that they're ever going to need it, but it's there to make you feel comfortable as, you know, people look at taking a bet on a newer technology.
But it gives you the peace of mind to be able to take that and know that the technology is going to be there and the ability to serve and run that technology for the two decades that you plan on it is going to be there and we'll have a backstop against us as we continue to prove out the company moving forward. And then the last thing I'd say is like, you know, we've turned this corner, you know, Eos is no longer a startup. It's a high growth operating company. What I would say around this is that, you know, success will never be a straight line. That's the one thing that I've learned in my six and a half years with the company.
And you know, what we went through here in the fourth quarter, you know, supply chain is the sum of doing a million things right that are relatively simple until you have a problem. And what we're trying to do is take and learn from what happened in the fourth quarter and expand that around the supply chain and continue to position ourselves for growth and bulletproof it so that we'll be able, so that we'll be able to deliver. But again, we've got to continue to scale and it's not lost on us that we have to deliver to build the credibility that we feel we have internally so that the external market sees the capability of this team and how we deliver for the future. And with that, I'll turn it back over here for any questions.
All right, guys, we're going to have a short little Q&A here. Let's take the next minute or two and type in any questions you might have. And yeah. Well, thank you again, guys. Doesn't look like anyone typed. Really appreciate it. And thank you.
Thanks, Quinn. Thanks again to Needham for the opportunity. Great to talk to everyone today.
All right. Thank you. Bye.