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Image source: The Motley Fool. Wednesday, Sept. 2, 2026 at 10:00 a.m. ET Chief Financial Officer - Michael Bishop President and Chief Executive Officer - Jason Few Operator: Thank you for standing by. My name is Jaylen and I'll be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy Third Quarter of Fiscal 2026 Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Michael Bishop, Chief Financial Officer. You may begin. Michael Bishop: Thank you, Operator. Good morning, everyone, and thank you for joining us on the call today. This morning, FuelCell Energy released our financial results for the third quarter of fiscal year 2026, and our earnings press release is available in the Investors section of our website at www.fuelcellenergy.com. In addition to this call and our earnings press release, we have posted a slide presentation on our website. The webcast is being recorded and will be available for replay on our website approximately two hours after we conclude. Before we begin, please note that some information that you will hear or be provided with today consists of forward-looking statements within the meaning of the Securities and Exchange Act of 1934. Such statements express our expectations, beliefs, and intentions regarding the future and include statements concerning our anticipated financial results, plans and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology, our anticipated market opportunities, and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the Safe Harbor Statement, in the slide presentation and in our filings with the SEC, particularly the risk factor section of our most recent Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During this call, we'll be discussing certain non-GAAP financial measures, and we refer you to our website, our earnings press release, and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website under the investor relations tab. For this call, I am joined by Jason Few, our President and Chief Executive Officer. Following our prepared remarks, the leadership team will be available to take your questions. I will now hand the call over to Jason for opening remarks. Jason? Jason Few: Thank you, Mike, and good morning, everyone. Thank you for joining us today. I am pleased to welcome you to our third quarter fiscal year 2026 earnings call. In the third quarter, we took an important step in the commercial development of FuelCell Energy's data center strategy. Rapid growth of AI and high-density computing is creating power requirements that the existing grid cannot address quickly enough. For data center customers, access to power has become a critical constraint on development. The AI economy will not be constrained by silicon. It will be constrained by access to electricity. We believe distributed generation will become an essential layer of AI infrastructure, enabling the grid to expand while allowing AI factories to deploy on commercial timelines rather than utility timelines. Our FuelCell Energy Blocks are designed to address the constraint by providing clean, continuous, behind-the-meter power that can be deployed at the customer's site and scaled as demand grows. In the third quarter, we began to convert that value proposition into commercial commitments. We secured our first order for FuelCell Energy Blocks to supply baseload power for data center applications, increased committed backlog to $1.3 billion and added $2.4 billion of awarded capacity backlog, resulting in total committed and awarded capacity backlog of $3.6 billion as of July 31. Awarded capacity backlog is a new category reflecting multi-phase contracts and capacity reservations, which I'll let Mike detail in his remarks. Subsequent to the quarter end, we closed a 75-megawatt capacity reservation agreement with a major co-location data center operator for a Texas project. We believe our utility-scale distributed generation platform is uniquely positioned to help accelerate AI infrastructure by reducing time to power, extending the existing electric grid with reliable behind-the-meter generation, and addressing many of the permitting and community challenges associated with large-scale power development. We expect to provide additional detail upon execution of definitive agreements. That is the central message for the quarter. We are moving from a growing pipeline to tangible commercial commitments while advancing the manufacturing capacity and operating capabilities required to deliver at scale. At the outset, I want to talk about this commercial commitment. During the quarter, we signed a capital equipment purchase agreement with Fit Energy to supply power solutions for data center applications. It covers up to 380 megawatts across 4 phases, sized to the customer's deployment schedule. We received an upfront deposit on the initial 30-megawatt phase, which we expect to begin delivering in the fourth quarter, and the remaining phases are at Fit Energy's election. At the same time, our fiscal 2026 year-to-date pipeline has grown to roughly 10 gigawatts of active proposals, and it reflects our progress toward proving our value proposition for data centers, which now accounts for about 97% of the total third quarter pipeline. I have said before that pipeline is a leading indicator, not a result, and I hold to that. The measure that matters is conversion, and Fit Energy is commercial proof that FuelCell Energy Block system can be the solution to some of the current public perception challenges facing data centers by providing scalable, clean, quiet, behind-the-meter power for data centers. The most important signal isn't that our pipeline is larger, it's that customers are buying differently. AI has made power availability a strategic decision rather than simply a utility decision. In addition to our domestic backlog, we continue to execute on our existing global projects. In the third quarter, we successfully completed the repowering of the 42-module Gyeonggi Green Energy project in South Korea. This execution demonstrates our capability to manage complex utility-scale repowering projects overseas while maintaining strict operational standards. Furthermore, it validates our long-term technology replacement cycle, proving that our existing fleet represents a continuous source of service and product revenues as energy blocks reach their natural replacement intervals. Important to converting our existing pipeline and backlog is our ability to scale. Because demand only matters if we can meet it. To support our increasing backlog, we are systematically expanding our manufacturing capacity. We are actively expanding our Torrington, Connecticut manufacturing facility, to support the multi-megawatt demand of the AI factory and data center markets. Our immediate operational milestone is to increase our annualized production rate at Torrington to its current full capacity of 100 megawatts, with achievement of this milestone expected in October 2026. This near-term target represents a vital step toward our larger long-term goal of reaching 500 megawatts of annualized production capacity by June 2028, an expansion we are already investing in. This expansion is progressing on schedule. During the third quarter, we finalized the comprehensive factory design, made significant equipment purchase commitments, and began the installation of a new high-volume tape caster that will dramatically increase our throughput. It is important to emphasize that this expansion is fully funded. We are executing this capital spend in alignment with our committed backlog to ensure disciplined capital allocation with the goal of meeting the high-volume requirements of global hyperscalers without building ahead of the market. As we scale, one aspect of our fuel cells has come into particular focus, and that is the sourcing strategy for our materials. Our carbonate platform provides a powerful supply chain advantage, and it does not rely on rare earth minerals and is scandium-free, utilizing globally abundant commodity metals like nickel and steel rather than highly volatile critical minerals or those that are predominantly mined in potentially sanctioned countries. Our platform was designed around the abundant industrial materials, not scarce critical minerals. With over 90% of our supply chain is sourced domestically in the U.S., and approximately 93% of our FuelCell Energy Block components are reusable or recyclable through a take-back program, we offer our customers unmatched supply security in the current uncertain geopolitical environment. Along with growing demand for FuelCell Energy power systems, our technology is being validated on a global stage by an increasingly diverse group of world-class blue-chip partners. We are proud to report that we have delivered and installed the first 2 carbonate fuel cell carbon capture modules at ExxonMobil's Rotterdam complex in the Netherlands. This delivery represents a pivotal operational milestone under our joint development agreement with ExxonMobil Technology and Engineering Company. This installation is the world's first industrial-scale demonstration of our jointly developed carbon capture technology, successfully moving it out of the laboratory and into a real-world application, addressing hard-to-abate low CO2 emissions from an industrial facility. This Rotterdam demonstration is expected to validate our fuel cells' performance under commercial operating conditions, positioning us as an essential technology partner for global industrial decarbonization. During the third quarter, we also signed a memorandum of understanding with Siemens to design and supply the electrical balance of plant systems for our fuel cell installations. The primary goal of this collaboration is to accelerate physical deployment and lower the cost of large-scale commercial projects exceeding 100 megawatts. We plan to jointly develop integrated distributed energy systems that combine our clean fuel cells with battery energy storage, advanced micro-grid controls, and medium-voltage electrical equipment. By optimizing the electrical balance of plant, we can manage the full spectrum of power variability from minutes down to microseconds. We believe this integrated solution to be developed in collaboration with a global leader would provide the electrical reliability required to support critical, high-density AI data center workloads. The opportunity in front of FuelCell Energy continues to grow. Our responsibility is straightforward: Execute. We are focused on converting commercial demand into contracted backlog, scaling manufacturing with discipline, and delivering for our customers. Those are the measures by which we should be judged, and they will remain our priorities as we work to build long-term shareholder value. With that, I'll turn the call over to our Chief Financial Officer, Mike Bishop, to provide a breakdown of our financial performance. Michael Bishop: Thank you, Jason. Today I will walk through our third quarter fiscal 2026 financial results, which demonstrate our robust capital position alongside a transitional period for our top-line revenue. Total revenue for the third quarter of fiscal 2026 was $33 million, a 29% decline compared to $46.7 million in the third quarter of fiscal 2025. Breaking this total down, product revenue was $18 million, down from $26 million in the prior year quarter. This reflects fewer module deliveries to South Korea as we completed the repowering of Gyeonggi Green Energy fuel cell park, delivering all 42 modules committed under that program since 2024. Service revenue was $2.4 million compared to $3.1 million a year ago. Generation revenue was $8.8 million, down from $12.4 million, driven principally by lower output from plants in our generation portfolio, including our 7.4-megawatt Groton project, which was out of service for the full quarter pending a planned upgrade that we expect to complete in fiscal 2027. Finally, advanced technology contract revenue was $3.8 million compared to $5.3 million in the third quarter of fiscal 2025. We recorded a gross loss of $24.5 million in the third quarter of fiscal 2026 compared to a gross loss of $5.1 million in the third quarter of fiscal 2025. The primary driver was $17 million of charges recorded during the quarter, consisting of approximately $4 million to reduce the carrying value of certain inventories to net realizable value, and approximately $13 million for losses on firm purchase commitments. Both were recorded in connection with Phase 0 of our capital equipment purchase agreement, or CEPA, with Fit Energy due to the fact that our current product costs and manufacturing overhead exceed the contractual pricing established under that agreement. We operated at an annualized production rate of approximately 37 megawatts during the quarter, which remains below the volume at which we expect our cost structure to align with market-based pricing for orders of this scale. These charges are expected to be limited to identified inventory and purchase commitments for Phase 0 and do not reflect our expectations regarding the overall economic value of the agreement. The loss from operations was $46.7 million, a 51% decrease compared to an operating loss of $95.4 million in the third quarter of fiscal 2025. That improvement was primarily driven by the absence of the asset impairment and restructuring charges that heavily impacted the prior year period. Net loss for the quarter was $45.3 million compared to $91.9 million in the comparable prior year period, and net loss attributable to common stockholders was $45.3 million, or $0.64 per share, compared to $92.5 million, or $3.78 per share, in the prior year quarter. Per share improvement also reflects a higher weighted average share count of 70.4 million shares following our equity issuances over the past 12 months. On a non-GAAP basis, adjusted EBITDA was negative $36.7 million compared to negative $16.4 million in the third quarter of fiscal 2025. That variance was primarily driven by Phase 0 charges I just described, which are not added back in our adjusted EBITDA reconciliation, rather than by any structural degradation in our core operating model. Turning to our commercial progress, we are encouraged by the substantial expansion and evolution of our backlog. As of July 31, 2026, total committed and awarded capacity backlog was $3.6 billion, a significant step change. We have structured our commercial backlog into 2 distinct categories to give investors clear visibility: committed backlog and awarded capacity backlog. Committed backlog, which represents definitive non-cancellable agreements executed by the company and its customers, was $1.3 billion, up approximately 4.1% year-over-year. Awarded capacity backlog was $2.4 billion. Awarded capacity backlog represents commercial awards and capacity reservations where we have been selected as the supplier and the parties are advancing towards execution of definitive agreements. For the third quarter, this category is driven by the 350 megawatts across Phases 1, 2, and 3 of our CEPA with Fit Energy, which was executed in June and provides for up to 380 megawatts in total product, commissioning, and service agreements, including the committed 30-megawatt Phase 0. Fit Energy may elect to proceed with Phases 1, 2, and 3 at its sole option, and no payment obligation arises with respect to a phase until Fit Energy makes an election to proceed with that phase. I want to be clear that awarded capacity backlog is not contracted firm order backlog or a guarantee of future revenue. Amounts may not convert to committed backlog or to revenue in whole or in part, and the timing and amount of any conversion may differ materially from our current estimates. We continue to maintain tight fiscal controls across the company. As summarized on slide 19 of the presentation, total operating expenses for the third quarter of fiscal 2026 were $22.2 million compared to $90.2 million in the third quarter of fiscal 2025. Looking at the details, administrative and selling expenses were $13.6 million for the quarter. Research and development expenses were $8.5 million for the quarter as we continue to invest in key product initiatives to support growth of data center opportunities. This year-over-year reduction in operating expenses was primarily driven by the absence of $68.5 million of asset impairment and restructuring charges incurred during the third quarter of fiscal 2025. Excluding those 1-time historical charges, recurring operating expenses were essentially flat year-over-year with a modest reinvestment in research and development offsetting lower administrative and selling costs. Now turning to the balance sheet and liquidity discussed on slide 21. We ended the quarter with the strongest cash position in our history. Total cash, cash equivalents, and restricted cash as of July 31, 2026, was $737.3 million, up from $440.9 million at April 30, 2026, the end of the prior quarter. Unrestricted cash and cash equivalents represented $658.1 million of that total, with the remaining $79.2 million in restricted cash and cash equivalents pledged as collateral for performance security and letters of credit. Our capital structure also remains straightforward. We carry no corporate convertible or high-yield debt, and our $153.6 million of total debt and finance obligations primarily consist of project-level financing, Export-Import Bank working capital facilities supported by our Korean deliveries, and sale-leaseback obligations. This substantial capital buffer means that our manufacturing capacity expansion at our Torrington, Connecticut, facility is fully funded. We estimate the total requirement to expand Torrington to 500 megawatts of annualized production capacity to be between $200 million and $275 million with completion targeted for June 2028. The expansion is backed by approximately $298 million of net proceeds raised from sales of common stock during the quarter, consisting of $245.5 million from our July underwritten offering and $52.9 million under our open market sale agreement. Looking ahead, we believe our strength in balance sheet and backlog expansion have established a clear path toward mid-term profitability. We are now targeting achieving positive adjusted EBITDA results in the fourth quarter of fiscal year 2027. We believe this target is supported by a series of operational and commercial catalysts. First, we have begun to increase our annualized production rate with the goal of achieving targeted annualized production rate of 100 megawatts in October 2026, up from approximately 37 megawatts this quarter, which should drive operating leverage over time. Beyond that, reaching our adjusted EBITDA target will depend on several key factors, including conversion of our awarded capacity backlog into definitive revenue-generating committed contracts, alignment with customer delivery schedules, and continued execution of our manufacturing cost reduction initiative, as we benefit from higher procurement volumes. There can be no assurance that we will achieve these production rates, the conversion of awarded capacity backlog or the anticipated cost reductions within the timeframe currently expected. In closing, we are executing our strategy with financial discipline, a fully funded manufacturing capacity expansion plan, and a sales pipeline that has grown to approximately 10 gigawatts in fiscal 2026 proposals, which we believe positions us to drive long-term value for our shareholders. Thank you for your continued support, and I will now hand the call back to the operator to open the line for Q&A. Operator: [Operator Instructions] Your first question comes from the line of Julien Dumoulin-Smith of Jefferies. Ivana Ergovic: It's actually Ivana Ergovic for Julien. I just, kind of, had a question related to this deal announcement of 75 megawatts. If you could maybe give some, kind of, more details in terms of the timeline on any potential opportunities for expansion versus that deal. I think that, yeah, that would be my first question. Jason Few: Thanks for joining us this morning. Yes, after the quarter or subsequent to the end of the quarter, we closed the 75-megawatt capacity reservation agreement for a major data center operator. We've not disclosed the timing of that, but we anticipate not only that opportunity, but follow-on opportunities with the same customer. And as you've seen, particularly in certain markets and including a market like Texas, where there's, you know, movement toward requiring bringing your own power. Our platform certainly sets up well to meet that requirement in Texas. And so we're excited about the opportunity. We were working through the definitive agreement, and that'll really align the timeline from a delivery and execution standpoint. We see this as a continuation or how the model, the business model, is really evolving to put capacity reservations in place as customers really look to line up power while they're completing their designs for the architecture of the data center and securing their commitments from their offtake customers as well. So excited about this opportunity and look forward to executing. Ivana Ergovic: Thank you. And in terms of a follow-up, I actually had a little bit of different question, kind of, related to your quarter results. I mean, there is a material increase in the cost of revenue, I guess, related to the Fit Energy deal. So I mean, how should we think about it? In the sense of the revenue recognition, I guess those would come with the deliveries in the fourth quarter and offsetting basically the cost of revenue that you booked in this quarter. Is that the right way to think about it? Michael Bishop: Sure, Ivana. This is Mike, and thanks for joining the call. I'll take that one. So, as far as the Fit Energy Phase 0, yes, we have disclosed that we do expect to begin recognizing revenue on that order in the fourth quarter of our fiscal year with the balance of it being completed in fiscal 2027. On the cost side, what you've seen come through this quarter related to that order is really our legacy cost structure. As we sit here today, the company's operating at 37 megawatts of production volume, which has the cost higher than current market rates. We expect that to normalize and be absorbed as we scale and get production rates up to 100 megawatts. As I said in my remarks, we do expect the company to get to adjusted EBITDA positive in the fourth quarter of fiscal 2027. Ivana Ergovic: Can I just ask one more thing? In terms of the 100 megawatts, it seems that you should be able to, kind of, start producing at those levels by the year-end? Michael Bishop: Yes. So what I believe your question was, where is our production rate going? We have announced that we are scaling our production rate up to 100 megawatts by the end of the fourth quarter of this year. And what that means is adding personnel, direct labor in our factory as well as scaling our supply chain so that we're positioned to be able to deliver at that level as we get into fiscal 2027. In addition to that, we're adding manufacturing capacity as well to go up to 500 megawatts of total capacity in this factory by June of 2028. Operator: Your next question comes from the line of Manav Gupta of UBS. Manav Gupta: I wanted to focus more on the Exxon power project. I mean, it looks like your cells are delivered. I'm just fundamentally trying to understand, are these 2 cells going to operate in a different way because their primary goal seems carbon capture? Can you help us understand how these 2 cells will be operating in a different way with Exxon, and what's the scope of expanding that partnership because, you know, Exxon is very bullish on carbon capture as a whole. Jason Few: Manav, good morning, and thank you for joining the call, and thank you for the question. Yes, you are correct. The 2 modules have been delivered to Exxon at Rotterdam and are being installed. The primary focus of the application for those 2 modules is capturing carbon directly from the point source of emissions at the Exxon Rotterdam refinery or the Esso refinery, given that's the brand name they still use in Europe. It will demonstrate capturing 90% plus of the carbon while simultaneously producing power, thermal energy, and hydrogen, which is a unique capability to our platform, not only as a fuel cell provider, but a unique capability in terms of other carbon capture technologies. The other big part of this demonstration, Manav, is to show our ability to capture CO2 from a low CO2 concentration stream of emissions, which is much harder to do. And that's another area where our technology accelerates in terms of our capability to actually capture low concentration CO2, which opens up the biggest aperture of market opportunity when you look across the industrial landscape. So everything from a company that does bottling and uses boilers to sterilize bottles all the way to the refinery application we're demonstrating here in Rotterdam. We believe that demonstrating successfully our platform's capability, that, that will open up an opportunity to expand this technology more broadly to address carbon capture across industrial applications globally. And we think that there continues to be broad political support. I mean, if you look at the OBBBA, the actual, you know, incentives around 45Q actually improved. So we think that, you know, signals strong support, clearly strong support for carbon capture in Europe and Asia. And the product will function differently from a core focus being carbon capture versus our power generation. That being said, our core product and every product we ship today is carbon capture ready. So we have the ability to also decarbonize power generation by capturing the CO2 from the fuel that we use to power our energy block. But the core focus in Rotterdam is carbon capture. Manav Gupta: Perfect. My quick follow-up here is in your opening comments, you talked about fuel cell and, you know, the time to power advantage and how the grid is not scaling up. What we have also noticed is that there's obviously something called LCOE, but increasingly, what the hyperscalers are finding out is by the time the electricity is delivered to you, it's not even close to LCOE, it's significantly higher. Now when you take that versus the benefits of on-site power generation, which is basically a spark spread, the cells actually start becoming a lot more economical and have a break-even of 7 or 8 years. So I'm just trying to understand from your perspective, can you also help us understand some of the other benefits of on-site power generation? Because on the screen, might look the LCOE is cheaper, but by the time the power gets to the data center, it's actually a lot more expensive. So if you could talk a little bit about that. Jason Few: Sure, great question. I think if you look at the advantage of on-site power and LCOE, you're absolutely correct. If you look at what's really required to deploy new power generation in a constrained area, the amount of capital investment that has to go in from an infrastructure upgrade on the utility side, which may include high-voltage transmission, new local transmission, additional power electronics from transformers, et cetera, you can reduce a significant amount of that cost by doing on-site power generation. So not only do you get a lower LCOE, higher reliability, you're also going to get the ability with our platform to integrate absorption chilling so you can actually bring down the PUE of that data center, which is a core goal of a data center operator because they want to get more of the power to the compute, because that's really the business they're in, is powering compute. The other big benefits are, we offer a low noise solution, and we can operate in water neutral. So a lot of the things that communities are complaining about today, we address with our technology, including not contributing to poor air quality, because although we use natural gas, we don't combust the fuel, which is another advantage. And so you take all of those things together, and I like to think about it more than just time to power, but it's really time to power on, because it's the time to deliver it, can you get it permitted, which is a big challenge today, and our platform really addresses a lot of those concerns. And so really time to power on, which is also time to revenue, and we think that creates a significant advantage. Operator: Your next question comes from the line of Jason Tilchen of Canaccord Genuity. Jason Tilchen: I guess to start, can you perhaps help us bridge the gap between the achievement of the 100-megawatt run rate that you, sort of, stated you expect at some point next month, to the Q4 of fiscal 2027, sort of, updated target for reaching EBITDA profitability and what some of the key factors, maybe expand on some of the key factors that you laid out in the press release that could help you achieve that rate. Michael Bishop: Sure, Jason. This is Mike. I'll take that. So, again, as we said, we are hiring, we are ramping our supply chain to get our run rate up to that 100-megawatt annualized run rate in the fourth quarter of fiscal '26 and targeting adjusted EBITDA positive in fourth quarter of fiscal 2027. Between now and then, the key factors that will drive that is: One, continuing to convert our awarded capacity into committed backlog. As we sit here today, we are executing on the 30-megawatt committed backlog from Fit Energy Phase 0. We need to continue to convert that broader order as well as other opportunities. And of course, we talked about this new 75-megawatt capacity reservation agreement that was announced this morning. So that's another opportunity there to continue to convert. So converting backlog, lining up with customer schedules, and then, of course, continuing down the cost reduction curve as we expand and we scale in the factory, we will absorb overhead and we will also get leverage from our supply chain. So those are the main drivers that will be occurring in the financial statements over the course of the next year plus. Jason Tilchen: Okay, that's really helpful. And I guess the follow-up there is in terms of those factors you laid out, some of those are in your control and some of them are at the discretion of the customers like Fit Energy has the option to proceed with these deals. So I'm just curious maybe if you could help us understand on the, sort of, cost reduction side, if you feel like you are already or within close line of sight of achieving what you need to achieve to get to that point. And then what does the scenario look like where maybe Fit Energy is not ready to proceed with that phase in time to achieve it? Like, what are the -- what is the sliding scale look like in essence, if you're able to achieve some of those milestones, but maybe not all of them. Michael Bishop: So, again, on the cost reduction side, we've been planning for this for a long time. We have a very well-defined cost reduction curve in front of us that we are executing on. And on the commercial side, we talked about a 10-gigawatt pipeline of opportunities. So we are not just relying on 1 or 2 customers, we see significant opportunities here across our customer base and fully expect to be able to convert additional pipeline into backlog over this time period. Jason Tilchen: Okay, really helpful. And maybe we can sneak into one quick final one. I believe in the first question that was asked, it was around the bridge from 37 to 100 over the next, sort of, call it, 6 to 8 weeks. And you mentioned adding labor and increasing the supply chain to get to that run rate. Are those, sort of, boxes, have those been ticked already and it's just a matter of simply working through the next few weeks of just getting those people up and running? Or are you still in the process of finding that labor and making sure that supply chain is at the right point? Michael Bishop: Yes, so there's multiple elements there. But yes, we've made considerable progress. We are hiring as we speak. We have added an additional shift in our factory. So you will see meaningful increase in our production rate come through this quarter as we described. Operator: Your next question comes from Ryan Pfingst of B. Riley Securities. Ryan Pfingst: Maybe just to start with a follow-up on the last one, for the target of positive EBITDA, in fiscal 4Q '27, can you frame that in terms of what that reflects or where you expect to be from an annualized production rate perspective at that point? Michael Bishop: Thanks for the question, Ryan. So we would expect at least 100 megawatts of volume to support that, if not more. And again, that will be dictated to some extent by our customers in converting pipeline to backlog as well as customer delivery schedules. So being able to line up with our customer requirements. And as we described, we will absolutely have the capability in Torrington to get above 100 megawatts. We are targeting 500 megawatts of capacity by June of 2028. That does not get turned on like a light switch. That will come online over time as we unlock constraints. One of the big constraints that we've talked about is tape casting. That process is well underway and will be installed in next fiscal year, so that's something. That's a big unlock for us to create additional capacity. Ryan Pfingst: Got it. And then on the Fit Energy deal, curious on your expectations for moving to the remaining phases. Do you see Phase 1 moving forward only after the initial phase is up and operating, or could that decision, in your view, come before then? Jason Few: No, Ryan, this is Jason. No, they are not sequential or certainly don't have to be sequential. We -- the gating on those is just their ability to close out their agreements with their customer and that can happen at any time and so it's not a complete the first 30 megawatts and then, you know, they'll move forward or consider Phase 1, they're not a sequential set of events. Operator: Your next question comes from the line of Noel Parks of Tuohy Brothers. Noel Parks: I noticed that with the updated CapEx guidance, it's actually been nudged down a bit for the fiscal year. And I think there was a mention in the materials that some of that reflected equipment deliveries that would not be happening until after the fiscal year end. So I was just wondering if you could just elaborate a bit on that. And I'm assuming that would be deliveries for the, you know, primarily for the Torrington expansion. Michael Bishop: Correct. This is Mike. So good read. The previous disclosure that we had around expected CapEx coming through the cash flow statement in fiscal '26 was $20 million to $30 million. We are now saying that's $10 million to $20 million, just given timing, but it is, by no means, a reflection of execution, it is really a timing of receiving certain equipment based on our prior schedules. As we have described now, we are on track for the 500-megawatt expansion by June of 2028. We have committed $200 million to $275 million of capital to that and if you look at our purchase commitments disclosures, that is up significantly quarter-over-quarter and reflecting not only the increase in production rate, but also capital commitments that will be delivered in future quarters. Noel Parks: Great, thanks. And also, early in the prepared remarks, I think there was a -- or maybe it was right at the start of Q&A, there was a comment about sort of your fuel cells, I guess the necessity of aligning with customer delivery schedules. And so I was just, sort of, thinking in this ramp up period on one hand, and then you have new agreements in negotiation and coming online. Just thinking a bit about how you manage that since, it looks like you're going to be kind of in anything but a steady state, sort of, trend for the next few years. Jason Few: Yes, so this is Jason. So the way that you can think about this is we have visibility into our production capabilities. We have visibility into our expansion capacity ramp. And that information is closely tied to and fully understood by our business development team. And so when we're talking to customers about opportunities and schedule always becomes part of the question or conversation ultimately, we make sure that the commitments that we're making align to our view in terms of our ability to meet and deliver against that demand. And so even though you might sign an agreement for 100 megawatts of power, you really need to look at, well, what is the delivery schedule for that? Because first power could be something as small as 20 megawatts. And additional power comes on as they finish building out the data hall, or maybe as they add a second building for a second data hall. So you have to really look at the full build out from the customer perspective, and then we make sure that we align our commitments to our confidence on our scale-up and manufacturing capabilities. Operator: [Operator Instructions] Your next question comes in line of Christopher Ellinghaus of Siebert Williams Shank. Christopher Ellinghaus: Mike, in your backlog slide, do you, sort of, envision adding more granular categories, sort of, as you convert pipeline? Michael Bishop: Good morning, Chris, and thanks for joining the call. So obviously a big step change in our backlog disclosures this quarter compared to last quarter. We've added an additional category called Awarded Capacity Backlog, and what is in there as of July 31, 2026, the end of last quarter, is really the 3 phases of the Fit Energy contract that aren't currently committed. So this is Phases 1, 2, and 3 broken down between product and service. So we think we have a fair amount of disclosure there on the potential that will be converted into committed backlog. As far as additional categories, we would expect, and we talked about the 75-megawatt capacity reservation agreement. We would expect that to go into the awarded capacity backlog as well, whether it's part of product or service or broken between the two, we'll disclose that in future periods. But that's the expectation, kind of, following industry practice. These days where folks are disclosing reservations whether they're called CRAs or something else but really reservations on future capacity which the company is being paid for. So we will be as transparent as possible as we add these additional opportunities into our backlog. Christopher Ellinghaus: And Jason, I sort of liked the way you framed the pipeline versus conversion discussion. Is there -- I don't know how to put this, but is there any timelines or waypoints for some of the pipeline that we might look for you to announce any kind of agreement out of the pipeline? Jason Few: Sure. No, great question, Chris. And thank you for being on the call. The way you ought to think about it is, you know, we talk about our sales pipeline and the 10 gigawatts we talked about today are, you know, tied to proposals that our business development team has with customers directly placed those proposals. When we talk about awarded capacity agreements, what we're talking about there is that we, along with the customer, have agreed to allocate manufacturing capacity in support of that customer's order. Along with that awarded capacity, there is a date certain in which we and that customer have agreed that we're going to get to the definitive agreement and at that point that awarded capacity would convert into our backlog what Mike just talked about and what you find in our backlog are things that are committed firm project orders and that's the way we've, you know, reported backlog for probably the last 6 or 7 years in terms of that backlog number. So what you should really look for is the velocity in which we take awarded capacity and convert that into committed definitive agreement, but in each of those awarded capacity agreements, there is a timeline tied to getting to that definitive agreement. And again, what it gives the customer -- the benefit for the customer is it reserves manufacturing capacity, right? And it gives them the ability to complete their final designs from an architecture perspective in terms of everything from our energy block all the way to the rack and how they're going to do that and to finalize their agreements with their customers. And it gives us better visibility into our planning, gives us the ability to make purchases on materials from a supply perspective, and there's financial consideration for providing that committed capacity reservation. Operator: With no further questions, that concludes our Q&A session. I'll turn the conference back over to President and CEO Jason Few for closing remarks. Jason Few: Thank you, Jaylen. And before we conclude, I want to leave you with this. The opportunity in front of FuelCell Energy is significant. AI and high-density computing are creating an urgent need for reliable, scalable power, and our technology is positioned to help meet that need. But opportunity alone does not create value, execution does. Our focus is clear. Convert awarded capacity and our pipeline into closed transactions, scale manufacturing with discipline, and deliver for our customers. We will align investment with commercial commitments, increase capacity responsibly, and scale to drive greater cost leverage across the business. Partnership will be central to that execution. Our collaboration with Fit Energy, Siemens, and the customers reserving manufacturing capacity demonstrates what is possible when technology, capital, industrial capability, and customer demand come together around a shared objective. These are not simply commercial relationships, they are partnerships built to accelerate deployment, reduce execution risk, and create long-term value for everyone involved. We believe the market is moving toward us. Power has become a strategic constraint and FuelCell Energy has the technology, manufacturing platform and partnerships to help customers move from ambition to operation. Now we must execute with urgency, discipline, and consistency. Before we close, I want to thank the entire FuelCell Energy team. Your commitment, resilience, and focus makes our progress possible. I also want to thank our customers, partners, and shareholders for your continued confidence and support. We appreciate your time today and look forward to updating you on our progress next quarter. Operator: Thank you. This concludes today's conference call. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. FuelCell Energy (FCEL) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

FuelCell Energy, Inc. FCEL used its fiscal third-quarter 2026 earnings call to emphasize movement from a large data center pipeline toward customer commitments, while acknowledging pressure from current manufacturing economics. President, CEO and director Jason Few and executive vice president, CFO and treasurer Michael Bishop tied progress to backlog conversion, production scaling and cost reduction, with a new adjusted EBITDA profitability target providing a clearer execution benchmark. Fiscal third-quarter revenues were $33 million, below the Zacks Consensus Estimate of $39.1 million. The loss of 64 cents per share was wider than the Zacks Consensus Estimate of a 32-cent loss. FuelCell Energy, Inc. price-consensus-eps-surprise-chart | FuelCell Energy, Inc. Quote FuelCell’s CEO said fiscal 2026 year-to-date proposals reached roughly 10 gigawatts, with data centers representing about 97% of the fiscal third-quarter pipeline. The Fit Energy agreement covers up to 380 MW across four phases. Few said the initial 30 MW is committed, while the remaining 350 MW is awarded capacity backlog subject to Fit Energy elections. Bishop stressed that awarded capacity is not firm contracted backlog. Few also highlighted a post-quarter 75 MW capacity reservation with a major colocation data center operator in Texas and said he anticipates follow-on opportunities with the same customer. Bishop stated FuelCell operated at an annualized production rate of about 37 MW and is targeting 100 MW in October 2026. In Q&A, FuelCell’s CFO said the ramp includes added labor and supply-chain scaling. Bishop said FuelCell had added another factory shift and expected a meaningful production increase during the fiscal fourth quarter. He also informed that the broader Torrington expansion targets 500 MW of annualized capacity by June 2028, with an estimated $200 million to $275 million requirement that is fully funded. Bishop said FuelCell now targets positive adjusted EBITDA in the fourth quarter of fiscal 2027, dependent on backlog conversion, customer schedules and manufacturing cost reductions. A B. Riley Securities analyst asked what production level supports the target. Bishop said at least 100 MW of volume would be needed, with customer demand influencing the ultimate level. A Canaccord Genuity analyst questioned reliance on customer decisions. Bishop pointed to the broader 10 GW pipeline and said FuelCell has a defined cost-reduction curve under execution. Fiscal third-quarter included a $24.5 million gross loss, including $17 million of charges tied to Fit Energy Phase 0 inventory and firm purchase commitments as current costs exceeded contractual pricing. A Jefferies analyst asked about the timing of those costs and revenues. Bishop said Phase 0 revenues should begin in the fiscal fourth quarter and continue into fiscal 2027. Few said the first two carbonate fuel cell carbon capture modules were delivered to ExxonMobil's Rotterdam complex. The demonstration targets more than 90% carbon capture while producing power, thermal energy and hydrogen. Few also discussed a memorandum of understanding with Siemens intended to support faster, lower-cost deployment of projects above 100 MW through integrated electrical balance-of-plant systems. He said completion of the 42-module Gyeonggi Green Energy repowering program in South Korea demonstrated FuelCell's ability to execute utility-scale international repowering work. Few emphasized conversion and delivery rather than pipeline size alone. He identified closing transactions, disciplined manufacturing expansion and customer execution as the company's central priorities. Bishop added measurable milestones through the October 2026 production target and the fiscal fourth-quarter 2027 adjusted EBITDA objective. He also reiterated that awarded capacity backlog is not firm contracted backlog, keeping conversion into definitive agreements as a key operating marker as capacity expands. FCEL carries a Zacks Rank #3 (Hold). The Zacks framework reserves its strongest combinations for Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks paired with A or B Style Scores. You can see the complete list of today’s Zacks #1 Rank stocks here. FCEL’s Growth Score of B and Momentum Score of B are favorable within their styles, while the Value Score of F and VGM Score of D weaken the combined profile. The Zacks Rank can change as earnings estimates are revised after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FuelCell Energy, Inc. (FCEL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Total Revenue: $33 million in Q3 fiscal 2026, a 29% decline from $46.7 million in Q3 fiscal 2025. Product Revenue: $18 million, down from $26 million in the prior year quarter, due to fewer module deliveries to South Korea. Service Revenue: $2.4 million, compared to $3.1 million a year ago. Generation Revenue: $8.8 million, down from $12.4 million, driven by lower output from plants in the generation portfolio. Advanced Technology Contract Revenue: $3.8 million, compared to $5.3 million in Q3 fiscal 2025. Gross Loss: $24.5 million in Q3 fiscal 2026, compared to a gross loss of $5.1 million in Q3 fiscal 2025, including $17 million in charges related to Phase 0 of the CEPA with Fit Energy. Loss from Operations: $46.7 million, a 51% improvement from an operating loss of $95.4 million in Q3 fiscal 2025. Net Loss: $45.3 million, or $0.64 per share, compared to $91.9 million, or $3.78 per share, in the prior year quarter. Adjusted EBITDA: Negative $36.7 million, compared to negative $16.4 million in Q3 fiscal 2025. Total Operating Expenses: $22.2 million, down from $90.2 million in Q3 fiscal 2025, primarily due to the absence of asset impairment and restructuring charges. Cash Position: Total cash, cash equivalents, and restricted cash of $737.3 million as of July 31, 2026, up from $440.9 million at April 30, 2026. Backlog: Committed backlog of $1.3 billion, up 4.1% year-over-year, and awarded capacity backlog of $2.4 billion, totaling $3.6 billion. Production Rate: Annualized production rate of approximately 37 megawatts during the quarter, with a target of 100 megawatts by October 2026. Warning! GuruFocus has detected 6 Warning Signs with FCEL. Is FCEL fairly valued? Test your thesis with our free DCF calculator. Release Date: September 02, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. FuelCell Energy Inc (NASDAQ:FCEL) secured its first order for fuel cell energy blocks to supply baseload power for data center applications, increasing committed backlog to $1.3 billion and adding $2.4 billion of awarded capacity backlog, totaling $3.6 billion. The company closed a 75-megawatt capacity reservation agreement with a major co-location data center operator for a Texas project subsequent to the quarter end, demonstrating continued commercial momentum. FuelCell Energy Inc (NASDAQ:FCEL) successfully completed the repowering of the 42-module Gyeonggi Green Energy project in South Korea, validating its technology replacement cycle and capability to manage complex utility-scale projects. The company delivered and installed the first two carbonate fuel cell carbon capture modules at ExxonMobil's Rotterdam complex, marking a pivotal operational milestone for its jointly developed carbon capture technology. FuelCell Energy Inc (NASDAQ:FCEL) ended the quarter with its strongest cash position in history at $737.3 million, with no corporate convertible or high-yield debt, and its manufacturing capacity expansion to 500 megawatts is fully funded. The company signed an MOU with Siemens to design and supply electrical balance of plant systems, aiming to accelerate deployment and lower costs for large-scale projects exceeding 100 megawatts. FuelCell Energy Inc (NASDAQ:FCEL) recorded a gross loss of $24.5 million in Q3 fiscal 2026, primarily driven by $17 million in charges related to inventory write-downs and losses on firm purchase commitments for the Fit Energy Phase 0 agreement. Total revenue declined 29% year-over-year to $33 million, reflecting fewer module deliveries to South Korea and lower output from generation plants, including the Groton project which was out of service for the full quarter. The company's current product costs and manufacturing overhead exceed the contractual pricing established under the Fit Energy agreement, highlighting a cost structure misalignment at the current production rate of 37 megawatts. Adjusted EBITDA was negative $36.7 million, a significant decline from negative $16.4 million in the prior year quarter, driven by the Phase 0 charges. The awarded capacity backlog of $2.4 billion is not contracted firm order backlog and may not convert to committed backlog or revenue, with conversion timing and amounts subject to customer elections and other uncertainties. FuelCell Energy Inc (NASDAQ:FCEL) faces execution risks in achieving its target of positive Adjusted EBITDA by Q4 fiscal 2027, which depends on converting awarded capacity backlog, aligning with customer delivery schedules, and achieving manufacturing cost reductions. Q: Can you provide more details on the timeline and expansion opportunities related to the 75-megawatt capacity reservation agreement announced after the quarter?A: Jason Few (CEO) confirmed the agreement was closed with a major co-location data center operator for a Texas project. He noted that the timeline for delivery will be aligned upon execution of definitive agreements. He emphasized that this deal reflects the evolving business model where customers secure capacity reservations while finalizing their data center designs and offtake agreements. He also highlighted the potential for follow-on opportunities with the same customer, particularly in markets like Texas that are moving toward requiring companies to bring their own power. Q: How do the two fuel cell modules delivered to ExxonMobil's Rotterdam complex operate differently, given their primary goal is carbon capture, and what is the scope for expanding this partnership?A: Jason Few (CEO) explained that the modules are being installed to capture over 90% of carbon directly from the point-source emissions at the refinery while simultaneously producing power, thermal energy, and hydrogen. He highlighted that the demonstration aims to prove the technology's ability to capture CO2 from low-concentration emission streams, which represents a larger market opportunity. He stated that a successful demonstration would open up broader applications for industrial decarbonization globally, supported by improved incentives like 45Q in the U.S. and strong policy support in Europe and Asia. Q: Can you help bridge the gap between achieving the 100-megawatt run rate and the updated target for reaching Adjusted EBITDA profitability in the fourth quarter of fiscal 2027?A: Michael Bishop (CFO) outlined that the path to positive Adjusted EBITDA in Q4 FY2027 depends on three key factors: converting awarded capacity backlog into committed contracts (such as the 30-megawatt Phase 0 with Fit Energy and the new 75-megawatt reservation), aligning with customer delivery schedules, and continuing down the cost reduction curve as manufacturing scales. He noted that scaling production to 100 megawatts will help absorb overhead and provide leverage from the supply chain. Q: Regarding the Fit Energy deal, do you expect Phase 1 to move forward only after the initial phase is operational, or could that decision come before?A: Jason Few (CEO) clarified that the phases are not sequential. The gating factor for Fit Energy to proceed with Phases 1, 2, and 3 is their ability to finalize agreements with their own customers, which can happen at any time. He confirmed that completing the first 30 megawatts is not a prerequisite for moving forward with subsequent phases. Q: Can you frame the target of positive EBITDA in fiscal Q4 2027 in terms of the expected annualized production rate at that point?A: Michael Bishop (CFO) stated that the company would expect at least 100 megawatts of volume to support the EBITDA target, if not more. He explained that the actual rate will be dictated by customer conversion of pipeline to backlog and delivery schedules. He reiterated that the company has the capability to exceed 100 megawatts and is targeting 500 megawatts of capacity by June 2028, with the installation of a new high-volume tape caster being a key unlock for additional capacity in the next fiscal year. Q: The updated CapEx guidance was nudged down for the fiscal year. Was that due to equipment deliveries being pushed beyond the fiscal year end?A: Michael Bishop (CFO) confirmed that the reduction in expected CapEx from $20-$30 million to $10-$20 million for fiscal 2026 is purely a matter of timing for receiving certain equipment, not a reflection of execution issues. He reiterated that the company remains on track for the 500-megawatt expansion by June 2028, with total capital commitments of $200-$275 million, and noted that purchase commitment disclosures have increased significantly quarter-over-quarter. Q: In your backlog slide, do you envision adding more granular categories as you convert pipeline?A: Michael Bishop (CFO) explained that the new "awarded capacity backlog" category currently includes the three uncommitted phases of the Fit Energy contract. He stated that the 75-megawatt capacity reservation agreement would also be added to this category in future periods. He emphasized the company's commitment to transparency, following industry practice of disclosing capacity reservations that customers are paying for. Q: Are there any timelines or waypoints for the pipeline that investors should look for regarding announcements of new agreements?A: Jason Few (CEO) explained that the 10-gigawatt pipeline consists of active proposals. When an awarded capacity agreement is signed, it includes a date certain by which the company and customer agree to reach a definitive agreement, at which point it converts to committed backlog. He advised investors to watch the velocity of conversion from awarded capacity to definitive agreements, noting that these reservations provide customers with manufacturing capacity security while giving FuelCell Energy better planning visibility and financial consideration. Q: Can you discuss the advantages of on-site power generation versus grid power, particularly regarding the true cost of delivered electricity to data centers?A: Jason Few (CEO) highlighted that while LCOE may appear cheaper on paper, the total cost of grid-delivered power includes significant infrastructure upgrades like high-voltage transmission and power electronics. He noted that on-site generation reduces these costs while offering higher reliability. Additionally, FuelCell's platform can integrate absorption chilling to lower the data center's PUE, allowing more power to go to compute. He also emphasized the low-noise, water-neutral operation and the lack of combustion, which addresses community concerns and accelerates the permitting process, ultimately reducing "time to power on" and "time to revenue." Q: Regarding the cost reduction side, are you already within close line of sight of achieving what you need for the EBITDA target, and what happens if Fit Energy delays proceeding with its phases?A: Michael Bishop (CFO) stated that the company has a well-defined cost reduction curve that it is executing on. On the commercial side, he emphasized that FuelCell is not relying solely on one or two customers, given the 10-gigawatt pipeline of opportunities. The company fully expects to convert additional pipeline into backlog over the relevant time period, providing a buffer against potential delays from any single customer. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management identifies access to electricity, rather than silicon, as the primary constraint for the AI economy, positioning distributed generation as an essential infrastructure layer. The company secured its first commercial commitment for FuelCell Energy Blocks for data centers, signaling a shift from a growing pipeline to tangible commercial conversion. A new 'awarded capacity backlog' category was introduced to reflect multi-phase contracts and capacity reservations, totaling $2.4 billion as of July 31. Operational focus has shifted to scaling the Torrington facility to a 100-megawatt annualized production rate by October 2026 to drive operating leverage and meet hyperscaler demand. The carbonate platform is being marketed as a supply chain hedge, utilizing abundant metals like nickel and steel rather than volatile rare earth minerals or sanctioned materials. Strategic partnerships with ExxonMobil and Siemens are designed to validate industrial-scale carbon capture and optimize electrical balance of plant for high-density workloads. Management characterizes the current period as a transitional phase where legacy cost structures are being absorbed as production volumes ramp toward market-based pricing levels. Targeting positive adjusted EBITDA by Q4 fiscal 2027, contingent on converting awarded capacity into definitive contracts and achieving manufacturing cost reductions. Executing a fully funded manufacturing expansion to reach 500 megawatts of annualized production capacity by June 2028. Anticipating the installation of a new high-volume tape caster in fiscal 2027 to unlock significant throughput constraints in the production process. Projecting total capital requirements for the Torrington expansion between $200 million and $275 million, supported by recent equity offerings. Future revenue recognition for the Fit Energy Phase 0 project is expected to begin in Q4 fiscal 2026 and continue through fiscal 2027. Recorded $17 million in charges related to inventory write-downs and purchase commitments because current manufacturing overhead exceeds contractual pricing for initial data center phases. Total cash position reached a historical high of $737.3 million following $298 million in net proceeds from common stock sales during the quarter. Generation revenue declined due to lower output from the 7.4-megawatt Groton project, which is undergoing a planned upgrade expected to conclude in fiscal 2027. Management cautioned that 'awarded capacity backlog' does not guarantee future revenue and is subject to customer elections and definitive agreement execution. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects follow-on opportunities with the same customer as Texas moves toward 'bring your own power' requirements for large developments. The agreement serves as a capacity reservation while the customer finalizes data center architecture and offtake commitments. The modules are designed to capture 90% plus of carbon from low-concentration industrial streams while simultaneously producing power and hydrogen. Success in this demonstration is intended to open the aperture for global industrial decarbonization applications beyond simple power generation. On-site generation avoids expensive utility infrastructure upgrades and high-voltage transmission costs, potentially offering a lower LCOE for hyperscalers. The platform allows for integrated absorption chilling to lower Power Usage Effectiveness (PUE), which is a critical metric for data center operators. Profitability targets are not solely dependent on one customer; the 10-gigawatt pipeline provides multiple paths to achieving the necessary 100-megawatt volume. Phases of the Fit Energy deal are not strictly sequential and can be triggered as the customer closes their own agreements.

Interested in FuelCell Energy, Inc.? Here are five stocks we like better. Revenue fell 29% year over year to $33 million in fiscal Q3 2026, pressured by the completion of South Korea module deliveries and lower generation output. The company posted a $45.3 million net loss, while gross loss widened to $24.5 million due partly to approximately $17 million in Fit Energy-related charges. FuelCell Energy is targeting data-center demand through a 30-megawatt committed Fit Energy order and a separate 75-megawatt capacity reservation with a major Texas colocation operator. However, most of the company’s $3.6 billion backlog is awarded rather than firmly contracted and may not convert into revenue. The company ended the quarter with $737.3 million in cash, cash equivalents and restricted cash after raising roughly $298 million through stock sales. It plans to expand annualized manufacturing capacity from about 37 megawatts to 100 megawatts by October 2026 and 500 megawatts by June 2028, while targeting positive adjusted EBITDA in Q4 fiscal 2027. These Stocks Could Win as Wall Street Looks Beyond AI Software FuelCell Energy (NASDAQ:FCEL) reported third-quarter fiscal 2026 revenue of $33 million, down 29% from $46.7 million in the prior-year period, as fewer module deliveries to South Korea and lower generation output weighed on results. The company also highlighted new data-center-related commercial activity, including a 30-megawatt initial order under an agreement with Fit Energy and a subsequent 75-megawatt capacity reservation with a major colocation data center operator for a Texas project. Chief Executive Officer Jason Few said growing artificial-intelligence and high-density computing demand is increasing the importance of behind-the-meter power generation for data centers. He said FuelCell Energy’s Energy Blocks are intended to provide continuous on-site power while customers await broader grid expansion. → AST SpaceMobile Is Down 54%—Can FCC Progress and BlueBirds Reverse the Slide? FuelCell Energy Just Got a Wake-Up Call From Wall Street Product revenue fell to $18 million from $26 million a year earlier, primarily because the company completed deliveries for the repowering of the Gyeonggi Green Energy Fuel Cell Park in South Korea. FuelCell Energy said it delivered all 42 modules committed under that program since 2024 and completed the project’s repowering during the quarter. Generation revenue declined to $8.8 million from $12.4 million, principally due to lower output from the company’s generation portfolio. Chief Financial Officer Michael Bishop said the 7.4-megawatt Groton project was out of service throughout the quarter while awaiting a planned upgrade expected to be completed in fiscal 2027. → Palo Alto’s Rally Has One Big Problem Ahead of Earnings MarketBeat Week in Review – 03/09 - 03/13 Service revenue was $2.4 million, compared with $3.1 million a year earlier, while advanced technology contract revenue declined to $3.8 million from $5.3 million. The company recorded a gross loss of $24.5 million, compared with a gross loss of $5.1 million in the same quarter last year. Bishop said the result included approximately $17 million in charges associated with Phase Zero of the Fit Energy Capital Equipment Purchase Agreement. Those charges included about $4 million to reduce certain inventory to net realizable value and about $13 million related to losses on firm purchase commitments. → Securing AI: 5 Most-Upgraded Stocks From the Q2 Reporting Season Bishop said current product costs and manufacturing overhead exceed the contractual pricing for the initial Fit Energy phase because the company operated at an annualized production rate of approximately 37 megawatts during the quarter. He said the charges are expected to be limited to identified Phase Zero inventory and purchase commitments. FuelCell Energy’s operating loss narrowed to $46.7 million from $95.4 million a year earlier, largely because the prior-year period included asset impairment and restructuring charges. Net loss was $45.3 million, or 64 cents per share, compared with a net loss of $91.9 million, or $3.78 per share, in the prior-year quarter. During the quarter, FuelCell Energy signed a Capital Equipment Purchase Agreement with Fit Energy covering up to 380 megawatts of power solutions for data-center applications across four phases. The agreement includes a committed initial 30-megawatt Phase Zero, for which the company received an upfront deposit. FuelCell Energy expects to begin delivering that phase in the fourth quarter of fiscal 2026 and complete the remaining deliveries in fiscal 2027. The subsequent phases, totaling 350 megawatts, remain at Fit Energy’s election. Bishop emphasized that no payment obligation arises for those phases until Fit Energy elects to proceed. As of July 31, FuelCell Energy reported total committed and awarded capacity backlog of $3.6 billion. Committed backlog, representing definitive non-cancellable agreements, totaled $1.3 billion, up about 4.1% year over year. Awarded capacity backlog totaled $2.4 billion and primarily reflected the Fit Energy phases that have not yet become committed orders. Management cautioned that awarded capacity backlog is not firm contracted backlog and may not convert to revenue in whole or in part. Few said each capacity reservation is intended to include a timeline for the customer and company to reach a definitive agreement. Following the quarter’s end, FuelCell Energy entered a 75-megawatt capacity reservation agreement with an unnamed major colocation data center operator for a Texas project. Few said the company is working toward definitive agreements and expects potential follow-on opportunities with the same customer, but did not provide a delivery timetable. FuelCell Energy is expanding its Torrington, Connecticut, manufacturing facility. The company aims to raise its annualized production rate to 100 megawatts in October 2026 from approximately 37 megawatts during the third quarter, while targeting 500 megawatts of annualized capacity by June 2028. Bishop said the expansion is fully funded and is expected to require $200 million to $275 million. During the quarter, the company finalized its factory design, made equipment-purchase commitments and started installing a high-volume tape caster. FuelCell Energy reduced its fiscal 2026 capital-expenditure outlook to $10 million to $20 million from $20 million to $30 million, citing the timing of equipment deliveries rather than a change in the expansion plan. The company ended the quarter with $737.3 million in cash, cash equivalents and restricted cash, including $658.1 million of unrestricted cash. It raised approximately $298 million in net proceeds from common-stock sales during the quarter, including $245.5 million from a July underwritten offering and $52.9 million through its open-market sale agreement. Looking ahead, FuelCell Energy is targeting positive adjusted EBITDA in the fourth quarter of fiscal 2027. Bishop said reaching that objective will depend on converting awarded capacity into definitive contracts, matching production with customer delivery schedules and reducing manufacturing costs as production volume increases. FuelCell Energy also said it delivered and installed its first two carbonate fuel-cell carbon-capture modules at ExxonMobil’s Rotterdam complex in the Netherlands. Few described the installation as an industrial-scale demonstration designed to capture carbon dioxide from low-concentration industrial emissions while producing power, thermal energy and hydrogen. In addition, the company signed a memorandum of understanding with Siemens to design and supply electrical balance-of-plant systems for fuel-cell installations. FuelCell Energy said the collaboration is intended to support projects exceeding 100 megawatts and could combine fuel cells with battery storage, microgrid controls and medium-voltage electrical equipment. FuelCell Energy, Inc (NASDAQ: FCEL) is a publicly traded company that designs, manufactures and operates turnkey molten carbonate fuel cell power plants. These stationary, on-site energy solutions generate electricity and heat through an electrochemical process that combines natural gas or biogas with oxygen, producing power with lower greenhouse gas emissions than traditional fossil fuel-based generation. The company’s fuel cell technology is engineered for continuous, baseload operation and can be integrated into microgrid architectures and industrial power systems to provide reliable, around-the-clock energy. The company’s core product suite, marketed under the SureSource brand, encompasses both power generation and integrated carbon capture or hydrogen production capabilities. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "FuelCell Energy Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Carbonate fuel cell technology developer FuelCell Energy (NASDAQ:FCEL) will be announcing earnings results this Wednesday before market open. Here’s what you need to know. FuelCell Energy missed analysts’ revenue expectations last quarter, reporting revenues of $35.59 million, down 4.9% year on year. It was a disappointing quarter for the company, with a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates. Is FuelCell Energy a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting FuelCell Energy’s revenue to decline 16.2% year on year, a reversal from the 97.3% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. FuelCell Energy has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at FuelCell Energy’s peers in the renewable energy segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Bloom Energy delivered year-on-year revenue growth of 166%, beating analysts’ expectations by 27.7%, and Sunrun reported revenues up 52.8%, topping estimates by 19.2%. Bloom Energy traded down 1.9% following the results while Sunrun was also down 10.6%. Read our full analysis of Bloom Energy’s results here and Sunrun’s results here. Over the last year or so, investors' attention has moved from one major market theme to the next, spanning AI disruption and surging infrastructure investment to geopolitical tensions, interest rates, and the health of the broader economy. While some of the renewable energy stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 4.8% on average over the last month. FuelCell Energy is down 19.5% during the same time and is heading into earnings with an average analyst price target of $22.83 (compared to the current share price of $17.18). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.

FuelCell Energy FCEL is slated to release fiscal third-quarter 2026 results on Sept. 2, before market open. The Zacks Consensus Estimate for revenues is pegged at $39.1 million, implying a decrease of 16.3% from the year-ago quarter. The consensus bottom line mark of -$0.32 per share has remained unchanged over the past seven days, suggesting a 66.3% jump from the year-ago reported number. For full fiscal year 2026, the Zacks Consensus Estimate for FCEL’s revenues is pegged at $153.7 million, implying a decline of 2.8% year over year. The consensus mark for fiscal 2026 loss per share stands at $1.58, indicating a surge of 64.2%. FCEL's Earnings Surprise History In the last reported quarter, the company delivered an earnings surprise of -20.5%. FuelCell Energy’s results beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in the other, with the average surprise being 14.4%. FuelCell Energy, Inc. price-eps-surprise | FuelCell Energy, Inc. Quote Q3 Earnings Whispers for FuelCell Energy The proven Zacks model does not conclusively show that FCEL is likely to beat estimates in the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Earnings ESP: FuelCell Energy has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at -$0.32 per share each. Zacks Rank: FCEL currently carries a Zacks Rank of 3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult this earnings season. You can see the complete list of today’s Zacks #1 Rank stocks here. Factors Shaping FCEL’s Upcoming Q3 Results FuelCell Energy’s Product business likely benefited from planned deliveries to customers in South Korea. The company expected six Gyeonggi Green Energy modules to be delivered in the fiscal third quarter, which were projected to generate about $18 million in Korean repowering revenues during the period. This matches the Zacks Consensus Estimate of $18 million for product revenues. The scheduled shipments gave FuelCell Energy better visibility into quarterly sales and may have reduced uncertainty around this part of the business. Broader demand for reliable, on-site power also remained encouraging, with Bloom Energy BE seeing strong data-center demand and Plug Power PLUG expecting a stronger second half of 2026. FuelCell Energy’s ‘Advanced Technologies’ business may have also contributed positively. The consensus mark is $4.95 million compared with $4.72 million reported in the fiscal second quarter. The company delivered two carbon-capture modules to Rotterdam for work with ExxonMobil, moving the project closer to a planned demonstration in late 2026. FuelCell Energy also had $15.4 million of Advanced Technologies backlog at the end of April, with most of it connected to the ExxonMobil program. These projects could have supported steady research and development revenues. Meanwhile, Bloom Energy and Plug Power also reported continued activity across clean-power and hydrogen projects, pointing to healthy interest in alternative-energy technologies. But on a somewhat bearish note, FCEL’s Generation business likely remained under pressure because its 7.4-MW Groton Navy project was not operating and required an equipment upgrade. The company had already said that lower output from Groton reduced generation revenues in the fiscal second quarter. That weakness could have continued into the quarter to be reported if repairs and upgrades took longer than expected. The Zacks Consensus Estimate for generation revenues is $11.31 million, noticeably above the $8.68 million reported in the preceding quarter, so achieving that recovery may be challenging. Service revenues may not have provided much help either, as the next scheduled long-term service agreement module replacement is expected only in the fiscal fourth quarter of 2026. FCEL Price Performance & Stock Valuation Shares of FuelCell Energy have gone up 142.9% in the year-to-date period compared with Bloom Energy’s growth of 142.5%. Meanwhile, Plug Power stock has gained a modest 11.1%. Image Source: Zacks Investment Research From a valuation perspective — in terms of trailing price-to-book ratio — FCEL is trading at a discount compared to the industry average. Image Source: Zacks Investment Research How Should You Play FuelCell Energy Pre-Q3 Earnings? FuelCell Energy heads into its fiscal third-quarter report with a mixed setup. Planned South Korean deliveries, including six Gyeonggi Green Energy modules expected to generate about $18 million in quarterly repowering revenues, could have supported the Product business. Advanced Technologies may also have benefited from continued work with ExxonMobil, backed by $15.4 million of backlog and progress on the Rotterdam carbon-capture project. However, the Generation segment likely remained a weak spot as the 7.4-MW Groton Navy project stayed offline for upgrades, potentially making the $11.31 million consensus revenue target difficult to achieve. With overall revenues expected to decline year over year, an Earnings ESP of 0.00% and shares already up sharply year to date, the near-term risk-reward appears balanced despite FCEL’s discounted valuation and longer-term opportunities in data centers and carbon capture. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FuelCell Energy, Inc. (FCEL) : Free Stock Analysis Report Plug Power, Inc. (PLUG) : Free Stock Analysis Report Bloom Energy Corporation (BE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research