$EOSE
I've been updating the model too but honestly a bit hesitant to post any numbers.
It's not difficult to see some multiple expansion and a higher valuation on more volume.
But it is kind of a pointless exercise at the moment.
Eos doesn't have to backlog to support big numbers beyond 2027.
modelling over 9GWh of shipments in 28/29 for over $2b in revenues. If the business is profitable too then it is very easy to see Eos worth a lot more than it is today.
But there is an evident lack in confidence that Eos can convert the pipeline. Sellside was really trying to get a sense of 2027 on the call.
$EOSE
Thoughts
The manufacturing side of this story has quietly improved. Revenue and margins have been tracking closer to what management has guided. Opex has stayed disciplined. They’re making the hard decisions on line moves and cost out initiatives. Operationally, this year has been better than the market is giving them credit for. That part I don’t dispute.
But I’m increasingly frustrated because the single thing that actually matters for underwriting 2027 and 2028 still isn’t happening at the pace required: orders.
Exiting 2026 with roughly $650 million in backlog makes it extremely difficult to get comfortable with the out years. Volume is what drives margin inflection. Volume is what reduces cash burn. Volume is what lets the market start assigning a real multiple instead of treating every quarter as a survival exercise. Without meaningful conversion of the pipeline, particularly the 3.5 GWh of latestage opportunities that were flagged on the call, the model stays fragile.
Joe highlighted those nearterm opportunities multiple times, specifically pointing to the next 4–5 weeks. More than half waiting on financing, the rest in contract negotiations. I want to believe those are real and that customers are comfortable enough with the field data and the product to move into financing and negotiations. But given the history of setting expectations and then having timelines slip, it’s hard not to view the commentary as raising the bar for disappointment if nothing materializes.
The spotlight is already on execution. Leadership changes elsewhere in the sector have shown that C suite performance is not immune when results lag the narrative.
This is still a chicken and egg problem. Field data is needed to unlock larger commercial wins. Larger commercial wins are needed to generate the volume that improves field data, utilization, and gross margins. They’re managing cash carefully, moving line capacity, prioritizing certain projects, leaning on remaining DOE support, PA grants, PTCs, and the revolver where available.
That is rational in the short term. But every quarter that passes without clear order conversion increases the probability that the market will interpret any future capital raise as defensive rather than opportunistic. I don’t want to be in a position where a raise is required just to bridge to a backlog that still hasn’t grown enough to support the ramp.
The TAM is real. The technology has a place, especially as grid security, domestic content, and non flammable long duration storage become higher priorities. Manufacturing improvements are visible. The economics are trending in the right direction on paper. None of that changes the fact that commercial conversion remains the bottleneck.
Until the backlog moves meaningfully higher and the near term opportunities start turning into signed, scheduled work, it’s very hard to get excited about the multiple expansion that the operational progress would otherwise justify.
Price has not reflected the better operational cadence this year. Part of that is sector wide risk off. Part of it is residual credibility damage from prior misses and the way previous capital raises were structured. Both can reverse, but only if the order book starts doing the heavy lifting. I’m still constructive on the longer term setup if they can close some of these opportunities and demonstrate that the commercial side is finally catching up to the manufacturing side. Right now, though, the frustration is that we’re still mostly waiting on the one catalyst that actually changes the underwriting math.
WEN ORDERS.
$EOSE
Thoughts
The manufacturing side of this story has quietly improved. Revenue and margins have been tracking closer to what management has guided. Opex has stayed disciplined. They’re making the hard decisions on line moves and cost out initiatives. Operationally, this year has been better than the market is giving them credit for. That part I don’t dispute.
But I’m increasingly frustrated because the single thing that actually matters for underwriting 2027 and 2028 still isn’t happening at the pace required: orders.
Exiting 2026 with roughly $650 million in backlog makes it extremely difficult to get comfortable with the out years. Volume is what drives margin inflection. Volume is what reduces cash burn. Volume is what lets the market start assigning a real multiple instead of treating every quarter as a survival exercise. Without meaningful conversion of the pipeline, particularly the 3.5 GWh of latestage opportunities that were flagged on the call, the model stays fragile.
Joe highlighted those nearterm opportunities multiple times, specifically pointing to the next 4–5 weeks. More than half waiting on financing, the rest in contract negotiations. I want to believe those are real and that customers are comfortable enough with the field data and the product to move into financing and negotiations. But given the history of setting expectations and then having timelines slip, it’s hard not to view the commentary as raising the bar for disappointment if nothing materializes.
The spotlight is already on execution. Leadership changes elsewhere in the sector have shown that C suite performance is not immune when results lag the narrative.
This is still a chicken and egg problem. Field data is needed to unlock larger commercial wins. Larger commercial wins are needed to generate the volume that improves field data, utilization, and gross margins. They’re managing cash carefully, moving line capacity, prioritizing certain projects, leaning on remaining DOE support, PA grants, PTCs, and the revolver where available.
That is rational in the short term. But every quarter that passes without clear order conversion increases the probability that the market will interpret any future capital raise as defensive rather than opportunistic. I don’t want to be in a position where a raise is required just to bridge to a backlog that still hasn’t grown enough to support the ramp.
The TAM is real. The technology has a place, especially as grid security, domestic content, and non flammable long duration storage become higher priorities. Manufacturing improvements are visible. The economics are trending in the right direction on paper. None of that changes the fact that commercial conversion remains the bottleneck.
Until the backlog moves meaningfully higher and the near term opportunities start turning into signed, scheduled work, it’s very hard to get excited about the multiple expansion that the operational progress would otherwise justify.
Price has not reflected the better operational cadence this year. Part of that is sector wide risk off. Part of it is residual credibility damage from prior misses and the way previous capital raises were structured. Both can reverse, but only if the order book starts doing the heavy lifting. I’m still constructive on the longer term setup if they can close some of these opportunities and demonstrate that the commercial side is finally catching up to the manufacturing side. Right now, though, the frustration is that we’re still mostly waiting on the one catalyst that actually changes the underwriting math.
WEN ORDERS.
LMC retweeted
My bet is Jane Street and Citadel Securities come out of this as two of the biggest winners.
In fact, more cases of forced liquidation and mechanical flow makes me more confident about that bet.
When pods hit drawdown limits and multimanager books get cut, the imperative is to reduce risk with price becoming a secondary concern.
Liquidations plus mechanical selling from leveraged ETFs, vol targeting, CTAs, and QIS momentum, and you have flows that can push prices well beyond what fundamentals alone would justify.
This doesn’t mean we’ve bottomed, as there may be more forced selling ahead, alongside real repricing.
But ask who has the three ingredients needed to profit most from this dislocation?
1) Enough visibility across markets and order flow to estimate where the forced selling is coming from and how much might remain.
2) Patient capital and the flexibility to take arbitrarily high amounts of risk.
3) The talent, models and execution systems to actually manage a trade of this scale.
Banks have substantial flow visibility and somewhat skilled desks, but are outdated on technology and face regulatory constraints on using their balance-sheet for speculation.
Multi-manager pods have great talent, but their strict risk limits can force them out precisely when the opportunity gets good, and makes them much less likely to try to catch a falling knife in the first place.
Fundamental investors, typically at long only / single manager funds, may have the capital and conviction, but typically extremely limited visibility into flow.
Large proprietary trading firms with extensive market-making operations sit at an unusually attractive intersection of broad flow visibility, internal capital, sophisticated infrastructure and some of the smartest people in the industry.
Jane Street and Citadel Securities stand out among the market makers for the size of their balance sheets.
I don’t know their net positioning across stocks, ETFs, options, futures and swaps. But structurally, these are the firms best equipped to buy what someone else has to sell and hold it long enough to get paid.
$eose is bipartisan.
The TAM is growing.
The economics are improving and trending.
I am happy with the manufacturing improvements
However
For me the single biggest catalyst is orders.
Converting some of the 3.5 GWh of near term ops is critical
It’s very hard to underwrite 2027/28 when they will be exiting 2026 with ~$650m in backlog.
$EOSE
Joe alluded on multiple occasions to 3.5GWh of near term opportunities.
Specifically referring to the next 4-5weeks.
“We're currently working 3.5 gigawatt hours of late-stage opportunity more than today's entire backlog. More than half is waiting on financing, the rest is in contract negotiations”
Joe on 27 “We've got near-term deals here that we'll know a lot more on here in the next 4 to 5 weeks that are going to determine what that looks like.”
These ops are Currently in the financing stage and contract negotiations.
Now I don’t know exactly what these projects are. Whether they’re FPUSA related, independent developers or state related.
But I am going to assume that they’re serious ops.
This would mean they are obviously happy with the tech and the data they have seen. Otherwise they would be at the financing stage or in negotiations.
I believe that delays in these ops are also the reason line 1 was moved earlier than previously thought.
Another point is that the spotlight is definitely on Joe. Given the leadership change at $flnc it’s clear that C suite can be on the chopping block for underperforming.
Given the history of setting expectations and not meeting them I find it interesting that Joe would kind of push this kind of rhetoric a few times within the call.
It only sets investors up for disappointment if nothing eventuates.
No doubt this is another significant piece of the puzzle and I don't want to be entering 2027 with ~$650m in backlog.
$EOSE
Earnings was more or less in line.
3rd Quarter of quarter expectations in line with mgmt comments.
This is a big tick for me around credabuilty and how in tune the company is with what the business and line is capable of doing.
So far revenue and margins have been trending on track with what they set out. This is very important to me as I now am more confident around the manufacturing side of the business. Still important to see this trend continue over the next few quarters to margin positive.
This leads into the next points. Commercial traction, pipeline conversion and capital requirements.
Still a chicken and egg issue. Field data and sales.
The operating leverage is very clear. opex flat all year. Higher output equals margin improvement.
Big focus and questions on the call were around cash burn and capital needs.
Will they need capital and if so, when?
Model below.
Honestly hard to say if they will need to tap the capital markets for liquidity. If things fall behind then maybe.
They have $20m from the DOE still, $24m PA grant reimbursement and $39m of PTCs. The Cerberus revolver is still an option too I believe.
Operational cash burn should continue to shrink as cost out initiatives continue.
They are being smart around cash. Sacrificing revenue now and moving line 1. Hopefully seem of those near term ops can convert and set up a stronger back half of 2027.
so imo a raise isn’t necessary in the next couple of quarters.
Been long $mags while short $iren $nbis $crwv $cifr $hut
This is probably still a good pair trade for a while
The Occams Razor trade would be long the hyperscalers and short the neoclouds in a smaller basket
Hyperscalers end up the winners
The simplest version is a barbell
long the suppliers (NVDA, memory, power etc) and short/underweight the most levered renters (CRWV, NBIS other small neoclouds).
One leg profits from scarcity, and the other loses if scarcity ends or financing tightens.
LMC retweeted
$EOSE
"From a CapEx standpoint, we start to see in the 4th quarter the CapEx spend moderating down versus the earlier part of the year. In the coming quarters, we will have an even lower run rate from the plant. Overall, we feel comfortable with the cash that we have on our balance sheet, and again, the other sources of cash that we can tap into until we are going to get to profitable."
CapEx has been about $35m per quarter, and based on this comment can expect to see it wind down starting Q4.
Other sources of cash include:
Remaining DOE Tranche 2: $20m
PA and County Grants: $24
Q3 PTCs: $39m
Cerberus Revolver: $105m
That sounds like a capital raise will not be needed to get to profitability, if the cost out plan stays on track. Any additional capital raise I suspect would be to extent FPUSA's runway again if needed.
To that point, they discussed 3.5 GWh of late-stage opportunities 💀, more than today's entire backlog, that they're waiting to hear on. These seem to relate to California, Virginia, and Massachusetts.
They linked the cadence of CapEx spend in 2027 to the outcomes of those. I am not sure why unless Lines 3+ come into play. Slide 9 did list "Remaining DOE Loan for Lines 3 & 4" as $80m of potential additional liquidity. Maybe DOE has signaled that the outcomes of those opportunities provide an opportunity to amend the DOE agreement again to include 3+ lines. 🤷♂️
LMC retweeted
$eose
Eos will beat both of these numbers and algos will bid it up.
The EPS will massively beat purely from mark to markets changes in warrants etc
$eose
Eos will beat both of these numbers and algos will bid it up.
The EPS will massively beat purely from mark to markets changes in warrants etc
$EOSE
Not expecting too many surprises for earnings today
We already know the top line, margins, cash and backlog.
Expecting the guide to be reaffirmed around $300m as it was 2 weeks ago.
“Eos enters the fourth quarter with strong revenue visibility supported by customer commitments and projects in backlog.”
Obviously Q4 and the 2026 guide could present downside risk if line 2 ramp is having any challenges.
WIP will be an important number. How much did they manage to bank in Q3?
Upside surprises could be
- Cerberus extending the lock up
- any new significant orders or deals
- any visibility into 27 ramp
I want to hear how they’re making progress towards GM positive and some insight into what 2027 might look like.
I want to hear about the field data they’re getting and how the new software is impacting RTE etc.
The cadence operationally has been good this year. Price certainly has not reflected that.
With the Den tsunami it could set up further tailwinds if Eos can deliver some positive news and a good outlook for 2027
LMC retweeted
BREAKING NEWS🚨: According to @theinformation, Microsoft's $5B less in capex in Q3 than it had planned was in part due to delays by $IREN.
We would not be surprised by this, considering that IREN continues to come up in our conversations with neocloud customers, usually for the wrong reasons. Multi-day power outages, network upgrades, storage failures, air quality controls leading to link flaps, XIDs everywhere. The #1 worst site in the industry, according to users.
LMC retweeted
Great call Topher
$BRUN earnings call impressed Topher. First one as a public company. Topher’s been accumulating this for a couple months now through a series of 400-1,000 share buys. Still a small position but growing. This analysis was constructed using @QuantFiPro and goes in Tophers notes. Will continue to monitor and add on this ticker.
CEO Andrew Karos on the call (and in the release)….I just went back and listened to this again, and it does not disappoint. It also addresses the “red flag” in Tophers previous post about future raises and CAPEX.
“This is our first earnings call as a public company, and over the past quarter, we have added over $1 billion in contracts signed. Currently our TCV stands at $1.9 billion. Demand is not our constraint. Everything we sold this quarter was contracted before the hardware was energized, and the pipeline behind it is larger than anything we have seen in the history of this company.”
That’s a direct quote and it is THE MONEY QUOTE. Demand-matched CAPEX. Not speculative. Hardware only goes in after the contract is signed.
The only real flag was cash vs CAPEX as outlined in previous post.
They addressed it cleanly on the call and in the materials:
• Cash $120.2M (after $114.1M SPAC proceeds)
• FY26 CAPEX guided ~$1.0–1.4B, fully demand-anchored against the backlog
• TCV/CAPEX ratio targeted toward 1.4x+
• 34 new finance leases for GPU servers in H1 alone
• $1.44B Dell purchase fully committed/allocated + processing another $4–5B across OEMs
• Customer prepayments average ~22% of TCV (required on every deal)
• Equipment leases + OEM/vendor financing + operating cash flow = limited equity needs
• Debt amortized in ~30–36 months on the illustrative deals
• Targeting 15–20% net/free cash flow margins going forward.
Same-day they also locked a long-term lease with 10X for 20 MW now (path to 111 MW) at already-energized sites so they can deploy faster.
Guiding $400M ARR by year-end. 253 MW accessible power.
Again—6 data centers live, three more coming online in the next six months.
Not $NBIS, $IREN or $CRWV… but same neighborhood (NVIDIA Preferred Cloud Partner). Every dollar of CAPEX is contracted before it gets energized. Long-term winner if they keep executing like this.
FinX will pile on hard here soon and you’re going to see grifters galore acting like they just discovered this.