Energy Vault (NRGV) Q3 2026 earnings review
Energy Vault forecasts 2027 sales doubling, but equity turns negative
Energy Vault, which builds battery storage and power systems for grids and data centers, saw sales drop while customer prepayments swelled. Third-quarter revenue fell 61% to $13 million, though $246 million in customer deposits and $264 million in supplier advances show equipment is moving for a fourth-quarter delivery wave. Chief executive Robert Piconi tightened the 2026 revenue plan and set a preliminary 2027 forecast of $600 million to $700 million.
| Revenue | $13.1M -61% from a year ago |
|---|---|
| Gross margin, excluding tariff refunds | 37.9% 27.0% a year ago (71.0% reported) |
| Contract backlog | $2.3B +15% from August; +147% from a year ago |
| 2027 preliminary revenue outlook | $600–700M 2026 outlook narrowed to $290–310M |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because massive order growth and upfront customer cash still collide with heavy debt and fourth-quarter delivery risk. The good news is that customers are funding the Texas AI equipment ramp upfront, and the 2027 plan points to positive cash earnings. The bad news: by our math, 83% of this year's revenue must land in the fourth quarter at a 17.6% gross margin, while total debt hit $281 million and shareholder equity turned negative.
The question now is whether the equipment surge can generate enough cash to outrun a debt-heavy balance sheet. Bulls point to the $800 million build-and-sell backlog and customer deposits covering near-term working capital; skeptics point to the negative equity, rising overhead, and unclosed SOSA project financing. Fourth-quarter deliveries and the quarterly filing's debt footnotes will settle it.
🐂 Bull Case
Customer Deposits Fund the Fourth-Quarter AI Ramp
Energy Vault builds battery storage and power systems for electric grids and artificial intelligence data centers. Total backlog — the estimated value of signed and option contracts — rose 15% from August to $2.3 billion, including $800 million from projects it builds and sells to customers.
“During the fourth quarter, we began deliveries to the recently announced 1.25GW hybrid generation and energy storage project supporting AI compute infrastructure in Texas,” chief executive Robert Piconi said. Balance sheet deposits prove that equipment is moving before fourth-quarter revenue is recorded.
- Contract liabilities (upfront cash from customers): $245.5 million, up from $29.7 million in Q2
- Advances to suppliers (current and long-term): $264.0 million, up from $6.3 million at year-end
- Preliminary 2027 outlook: $600 million to $700 million in revenue and $40 million to $50 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, excluding one-offs)
This matters because customers are funding the working capital for the equipment build rather than forcing the company to use its own cash. What to watch: how much of the $245.5 million in customer deposits turns into revenue in the fourth-quarter report.
Pipeline Grows With Ready-to-Build Projects and Tax Credits
Through its Asset Vault subsidiary, the power infrastructure group builds and operates its own battery and generation sites to earn recurring revenue. In the third quarter, it bought 2.3 gigawatts of US battery projects from Goshe Energy Storage, including 350 megawatts ready to build, and paid the entire cash price.
The company also received grid connection approval for its 125-megawatt Stoney Creek battery project in Australia and started building its Snyder modular data center in Texas. Alongside project financing for 275 megawatts of Rolls-Royce gas engines and a $40 million credit commitment from S2G Investments, the company collected $39.7 million from selling investment tax credits over the first nine months, meeting its ~$40 million full-year target.
What to watch: total megawatts under operation, construction, and ready-to-build in the quarterly filing. A jump above 1.1 gigawatts will show how much of the Goshe portfolio enters the active build schedule.
🐻 Bear Case
One Quarter Must Carry Five-Sixths of the Year
Energy Vault recognizes most of its equipment revenue when batteries and generators arrive at customer sites. Third-quarter sales dropped 61% from a year ago to $13.1 million, leaving nine-month revenue at just $52.3 million.
Because management tightened its full-year revenue forecast to $290 million to $310 million, the fourth quarter must deliver $247.7 million at the middle of the range by our math. That single period represents 83% of the entire year's sales, up from 75% in the fourth quarter of 2025.
Furthermore, the company lowered the top end of its full-year gross margin plan from 25% to 22%. By our math, that leaves a 17.6% gross margin for the fourth quarter, down from 37.9% excluding tariff refunds in the third quarter, because early hardware deliveries carry much lower margins.
What to watch: fourth-quarter revenue and gross margin in the full-year report. Any customs delay on imported batteries would push sales into 2027 and cause a miss against the annual plan.
Debt Climbs and Shareholder Equity Turns Negative
“Our third quarter financial performance reflects our previously discussed timing of deliveries and continued strengthening of our balance sheet and liquidity,” Piconi said. While cash grew and corporate recourse debt fell by $12 million from last quarter, total balance sheet leverage moved the other way.
- Total debt (short-term and long-term): $280.5 million, up from $243.0 million in Q2 and $94.6 million at year-end
- Stockholders' equity: a deficit of -$12.4 million, down from positive $6.9 million in Q2 and $67.5 million at year-end
- Nine-month interest expense: $12.7 million, more than double the $5.4 million a year ago
Meanwhile, project financing for the SOSA battery site in Texas — originally expected in the second quarter — has still not closed, with the footnote calling it “inclusive of SOSA, which is expected to reach financial close imminently”. What to watch: the debt footnote in the quarterly filing to see if convertible bond repayments are diluting shareholders while the parent company sits in an equity deficit.
Overhead Grows While Backlog Mixes In Uncontracted Power
Building an owned-asset business requires hiring and project development before the power plants generate cash. Operating expenses excluding one-offs rose 56% from a year ago to $25.2 million, driven by general and administrative costs (corporate overhead and legal fees) rising from $19.8 million to $25.5 million. As a result, the adjusted EBITDA loss widened to $14.7 million from $6.0 million a year ago.
At the same time, $1.5 billion of the $2.3 billion backlog sits in owned projects that pay out over many years. The company's backlog definition includes unexercised purchase options and variable power sales where management uses third-party computer models and counts “low-end simulation results to be probable”. What to watch: binding remaining performance obligations in the quarterly filing, which stood at $362 million last quarter.
Risks this quarter didn't answer
The earnings release did not include the footnote tables needed to check five standing risks from prior quarters.
- Owned-asset debt covenants: whether the Cross Trails battery site in Texas passed its third-quarter debt-service coverage test after two waivers.
- Recurring power revenue: quarterly tolling and power-purchase revenue from the two operating battery sites, which requires the revenue breakdown note.
- New Mexico data center land: how the company will pay the $57.4 million land closing due in December 2026.
- Customer concentration: what share of revenue and receivables came from the top three customers.
- Foreign supply rules: whether Chinese-sourced battery cells qualify for tax credits under new federal foreign-entity rules.
👓 Other Themes
Tariff Refunds Lifted Third-Quarter Gross Margin
US customs refunded $4.3 million of previously paid import tariffs during the third quarter after earlier emergency tariff rules were struck down. Because quarterly revenue was only $13.1 million, that one-time refund pushed reported gross margin to 71.0%, compared with 37.9% without the refund, and lifted gross margin excluding depreciation to 81.1% versus 48.0% on an underlying basis.
💲 Other KPIs
Total cash rose 59% from last quarter and nearly quadrupled from $61.9 million a year ago. The increase came from customer equipment prepayments, $262.4 million in nine-month debt proceeds, and $39.7 million in tax credit sales, leaving $180.5 million in unrestricted cash and $55.7 million in restricted project accounts.
Spending on property and equipment jumped to $99.4 million in the third quarter by our math, up from $16.2 million across the entire first half of 2026. The outlay reflects construction ramping up on owned battery and modular data center projects in Texas and Australia.
Weighted-average diluted shares increased 11.4% from 163.3 million a year ago and 2.0% from 178.4 million last quarter. Total common shares issued and outstanding reached 183.1 million at the end of September as the company issued $17.5 million of stock to settle convertible debt installments and $2.2 million for acquisitions.
🔮 Guidance
Raised. Energy Vault lifted the bottom of its full-year range by $20 million, moving the middle of the range up $10 million to $300 million, or 47% growth from 2025. By our math, that leaves $247.7 million for the fourth quarter, up 62% from the fourth quarter of last year as Texas AI project deliveries begin.
Cut. Management trimmed the top end of its full-year gross margin plan by 3 percentage points, lowering the middle of the range from 22.5% to 21.0%. Because nine-month gross margin was 37.2%, our math points to a 17.6% margin in the fourth quarter as lower-margin equipment deliveries dominate the mix.
Raised. The company lifted the bottom of its year-end cash target by $10 million, putting the middle of the range at $185 million. Because third-quarter cash already reached $236.2 million, the plan points to a $51.2 million cash outflow in the fourth quarter by our math as the company pays down corporate recourse debt and builds projects.
New. The preliminary plan calls for revenue to more than double in 2027 to $650 million at the middle of the range, up 117% from the 2026 outlook midpoint. Delivery of the $800 million build-and-transfer backlog, including the 1.25-gigawatt Texas AI project, drives the step-up.
New. Management expects its first full year of positive adjusted EBITDA at $45 million at the middle of the range, reversing a $45.3 million loss across the first nine months of 2026. The profit turnaround rests on higher equipment volume and the first owned projects reaching commercial operation.
❓ Key Questions
Did Cross Trails pass its third-quarter debt test?
The Cross Trails battery project in Texas failed its debt-service coverage ratio in the first two quarters of 2026 and had no equity cure right for the third quarter. The quarterly filing's debt note will show if lenders granted another waiver.
What is the binding revenue backlog under accounting rules?
Management's $2.3 billion backlog includes unexercised options and computer-simulated power sales over 15 years. Investors need the remaining performance obligations figure from the filing to see how much binding revenue is contracted for the next 12 months.
When will SOSA project financing actually close?
Management originally expected non-recourse financing for the 150-megawatt SOSA battery project in Texas to close in the second quarter of 2026. The release still describes financial close as imminent, leaving the construction funding timeline open.
How will the $57.4 million New Mexico land payment be funded?
Prior filings showed an initial $57.4 million closing payment due by December 18, 2026 for the New Mexico data center land project. With year-end cash projected to drop by ~$51 million at the midpoint, the funding source is unclear.