Core Insights - FuelCell Energy, Inc. and Inuverse have signed a Memorandum of Understanding (MOU) to explore deploying up to 100 megawatts (MW) of fuel cell-based power at the AI Daegu Data Center, aiming to make it Korea's largest data center starting in 2027 [1][5] Company Overview - FuelCell Energy specializes in high-efficiency fuel cell platforms that provide clean, reliable energy solutions, helping data centers meet energy and climate goals without operational disruptions [3][7] - The company operates the largest single-site fuel cell park in Korea, with a capacity of 58 MW, showcasing the reliability and commercial readiness of its technology [5] Technological Capabilities - The AI DDC will utilize advanced cooling technologies, including absorption chilling powered by thermal energy from FuelCell Energy's systems, which are designed to reduce operational costs and enhance performance [2][4] - FuelCell Energy's systems are capable of rapid deployment, providing modular, phased, onsite power in months, which is essential for meeting the energy demands of AI and cloud computing [4] Strategic Collaboration - The partnership with Inuverse is expected to expand FuelCell Energy's presence in Asia and demonstrate its ability to support decarbonization and reduce particulate emissions in the digital economy [5][6] - Inuverse aims to address the increasing data processing demands of the AI era while achieving renewable energy and ESG objectives through this collaboration [6][9]

Core Points - The "One Big Beautiful Bill Act" (OBBBA) is recognized as a significant advancement for American energy leadership, particularly benefiting the fuel cell industry and enhancing the nation's energy infrastructure and clean manufacturing base [2][4] - The reinstatement of the Investment Tax Credit (ITC) is highlighted as a crucial win for the fuel cell sector, ensuring continued deployment of U.S.-built platforms and contributing to national competitiveness and energy security [5][6] - The preservation of the transferability of federal tax credits is deemed essential for small- and mid-sized companies, facilitating their growth and job creation [7] - Modifications to hydrogen provisions in the OBBBA are supported, providing stability for companies that have invested in hydrogen technologies [8] - The OBBBA is characterized as inclusive, recognizing the strengths of various clean energy technologies without favoring any specific one, thus equipping the fuel cell industry to lead in a digital and electrified future [9][10] Industry Impact - The ITC's flexibility and long-term visibility are expected to boost confidence among developers and investors, leading to more resilient power solutions for data centers and stable grids [6] - The bill is anticipated to create more American jobs in advanced manufacturing by enabling companies to scale operations effectively [7] - The overall legislative support is seen as a move towards a more innovation-driven and clean energy policy, benefiting the broader energy sector [3][10]

Group 1 - FuelCell Energy (FCEL) closed at $6.72, with a 57% gain over the past four weeks, and a mean price target of $9.38 indicating a 39.6% upside potential [1] - The average price targets range from a low of $5 to a high of $13.75, with a standard deviation of $3.19, suggesting variability in analyst estimates [2] - Analysts show strong agreement on FCEL's ability to report better earnings, with positive trends in earnings estimate revisions correlating with potential stock upside [4][11] Group 2 - The Zacks Consensus Estimate for FCEL has increased by 0.3% over the past month, indicating a positive outlook with no negative revisions [12] - FCEL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for potential price movements [13]

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in auditing and trading, having navigated significant market events such as the dotcom bubble and the subprime crisis [2] - The research provided aims to maintain high quality despite language barriers [2]

Financial Data and Key Metrics Changes - In the second quarter of fiscal year 2025, total revenues increased to $37.4 million from $22.4 million in the same quarter of the previous year [32] - The loss from operations narrowed to $35.8 million compared to $41.4 million in the second quarter of fiscal year 2024 [33] - The net loss attributable to common stockholders was $38.8 million, compared to $32.9 million in the prior year, with a net loss per share of $1.79 versus $2.18 [33] - Adjusted EBITDA improved to negative $19.3 million from negative $26.5 million year-over-year [33] - Cash, restricted cash, cash equivalents, and short-term investments totaled $240 million as of April 30, 2025 [34] Business Line Data and Key Metrics Changes - Product revenues were $13 million, a significant increase from zero in the prior year [34] - Service agreement revenues rose to $8.1 million from $1.4 million, driven by module exchanges under a long-term service agreement [34][35] - Generation revenue decreased to $12.1 million from $14.1 million, primarily due to lower power output from maintenance activities [36] - Advanced Technology contract revenues fell to $4.1 million from $6.9 million [36] Market Data and Key Metrics Changes - Backlog increased by approximately 18.7% to $1.26 billion compared to $1.06 billion as of April 30, 2024, partly due to a long-term service agreement [39] - The company anticipates significant demand for distributed power generation in the U.S., Asia, and Europe, aligning with its strategic focus [31][32] Company Strategy and Development Direction - The company announced a restructuring plan prioritizing sales of its molten carbonate platform and reducing overhead to enhance profitability [6][10] - Focus will remain on validating and demonstrating solid oxide technology while optimizing supply chains and driving efficiency [7][8] - The company aims to achieve positive adjusted EBITDA once its Torrington facility reaches an annualized production rate of 100 megawatts [9][31] - Strategic partnerships, such as the Dedicated Power Partners initiative, are expected to accelerate deployment in data centers and large-scale applications [15][16] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong global power demand and the structural shifts in energy needs driven by AI and data centers [12][13] - The company is committed to disciplined cost management, expecting to reduce operating expenses by 30% annually compared to fiscal year 2024 [18][30] - Management expressed confidence in the company's ability to navigate the evolving energy landscape and capitalize on market opportunities [29][30] Other Important Information - The restructuring plan includes a global workforce reduction and a recalibration of production schedules to align with contracted demand [30] - The company is focusing on energy integration, combining fuel cell solutions with other generation technologies to enhance reliability and efficiency [10][11] Q&A Session Summary Question: Can you discuss the momentum in procuring customers and orders for DPP? - Management indicated active conversations with data center customers and positive momentum in turning partnerships into transactions [44] Question: What is the timeline for achieving EBITDA neutrality at the 100 megawatt production level? - Management stated that achieving this level depends on the flow of orders, with a focus on distributed generation opportunities [46][47] Question: How does the manufacturing side drive profitability compared to generation? - Management clarified that while generation contributes, the focus is on product and service sales, particularly through partnerships like DPP [52] Question: Will pricing for data center applications change due to rising gas turbine costs? - Management sees rising costs as an opportunity rather than a challenge, expecting stable pricing for customers [55] Question: What types of customers are moving fastest in the power generation opportunity for AI and data centers? - Management noted a fragmented market with various customer segments, including traditional developers and hyperscalers, all actively engaged [60][61]

Financial Data and Key Metrics Changes - In the second quarter of fiscal year 2025, total revenues increased to $37.4 million from $22.4 million in the same quarter of the previous year [32] - The loss from operations narrowed to $35.8 million compared to $41.4 million in the second quarter of fiscal year 2024 [33] - The net loss attributable to common stockholders was $38.8 million, compared to $32.9 million in the prior year, with a net loss per share of $1.79 versus $2.18 [33] - Adjusted EBITDA improved to negative $19.3 million from negative $26.5 million year-over-year [33] - Cash, restricted cash, cash equivalents, and short-term investments totaled $240 million as of April 30, 2025 [34] Business Line Data and Key Metrics Changes - Product revenues were $13 million, a significant increase from zero in the prior year [34] - Service agreement revenues rose to $8.1 million from $1.4 million, driven by module exchanges under a long-term service agreement [34] - Generation revenue decreased to $12.1 million from $14.1 million due to lower power output from maintenance activities [35] - Advanced Technology contract revenues fell to $4.1 million from $6.9 million [35] - Operating expenses decreased to $26.4 million from $34.3 million, with R&D expenses down to $9.9 million from $16.6 million [37] Market Data and Key Metrics Changes - Backlog increased by approximately 18.7% to $1.26 billion compared to $1.06 billion as of April 30, 2024, partly due to a long-term service agreement [39] - The company anticipates significant demand for distributed power generation in the U.S., Asia, and Europe [30] Company Strategy and Development Direction - The company announced a restructuring plan focusing on the carbonate platform, aiming to reduce operating expenses by 30% annually [30][31] - The strategy includes optimizing the supply chain and enhancing efficiency while preserving long-term flexibility for carbon capture opportunities [6][10] - The company is targeting positive adjusted EBITDA once the Torrington facility reaches an annualized production rate of 100 megawatts [10][31] Management's Comments on Operating Environment and Future Outlook - Management emphasized the strong global demand for power and the structural trends driving the need for clean energy solutions [12][13] - The company is focused on leveraging its carbonate technology to meet the growing demand for distributed energy and grid resilience [23][27] - Management expressed confidence in the restructuring efforts and the potential for future profitability [18][28] Other Important Information - The company is intensifying its focus on its carbonate platform while pausing broader solid oxide R&D efforts [7][8] - The partnership with Diversified Energy and TESSIAC aims to accelerate the deployment of carbonate fuel cells in data centers and large-scale applications [16][17] Q&A Session Summary Question: Can you discuss the momentum in procuring customers and orders for DPP? - Management indicated active conversations with data center customers and positive momentum in the partnership [44] Question: When can we expect to reach EBITDA neutral at 100 megawatts production? - Management stated that achieving 100 megawatts is dependent on order flow, with no additional capital needed to reach that capacity [46][47] Question: How does the manufacturing side drive profitability compared to generation? - Management clarified that the focus is on product and service sales rather than solely increasing the generation portfolio [52] Question: Will future bookings for data center applications reflect similar pricing to past orders? - Management expects stable pricing and views the increasing costs of gas turbines as an opportunity [55] Question: What types of customers are moving fastest in the power generation opportunity for AI and data centers? - Management noted a fragmented market with various customer segments, including traditional REITs and hyperscalers [60][62] Question: What will the agreements with gas distribution customers look like? - Management explained that DPP will generally involve power purchase agreements, with options for long-term service agreements [66]

Financial Performance - Total revenues for the three months ended April 30, 2025, were $37.4 million, reflecting a 67% increase from $22.4 million in the same period of 2024[128]. - Total costs of revenues for the same period were $46.8 million, an increase of 59% from $29.5 million in the prior year[128]. - The gross loss for the three months ended April 30, 2025, was $9.4 million, compared to a gross loss of $7.1 million in the same period of 2024, representing a 33% increase in losses[128]. - Product revenues reached $13.0 million for the three months ended April 30, 2025, with no product revenues reported in the comparable prior year period[129]. - Product revenues increased by $13.3 million to $16.3 million for the three months ended April 30, 2025, compared to $2.9 million in the same period in the prior year[130]. - Service agreements revenues surged by 495% to $8.1 million for the three months ended April 30, 2025, up from $1.4 million in the same period in 2024, driven by three module exchanges[133]. - Generation revenues decreased by 14% to $12.1 million for the three months ended April 30, 2025, down from $14.1 million in the same period in 2024, due to lower output from plants[136]. - Advanced Technologies contract revenues fell by 41% to $4.1 million for the three months ended April 30, 2025, compared to $6.9 million in the same period in 2024[142]. - Total revenues for the six months ended April 30, 2025, were $56.4 million, an increase of $17.3 million (44%) from $39.1 million in the same period of 2024[161]. - Cost of revenues for the same period increased to $71.0 million, up $13.1 million (23%) from $57.9 million in 2024[161]. - Product revenues reached $13.1 million for the six months ended April 30, 2025, compared to no product revenue in the same period of 2024[162]. - Service agreements revenues increased to $10.0 million, a rise of $7.0 million (235%) from $3.0 million in 2024[166]. - Generation revenues decreased to $23.5 million, down $1.1 million (5%) from $24.6 million in 2024[169]. - Advanced Technologies contract revenues fell to $9.8 million, a decrease of $1.7 million (15%) from $11.5 million in 2024[173]. Expenses and Losses - Research and development expenses decreased to $9.9 million for the three months ended April 30, 2025, down from $16.6 million in the same period in 2024[146]. - Loss from operations improved to $35.8 million for the three months ended April 30, 2025, compared to a loss of $41.4 million in the same period in 2024[149]. - Net loss attributable to common stockholders was $38.8 million for the three months ended April 30, 2025, compared to $32.9 million in the same period in 2024[159]. - Interest expense increased to $2.5 million for the three months ended April 30, 2025, compared to $2.3 million in the same period in 2024[150]. - Administrative and selling expenses decreased to $16.5 million for the three months ended April 30, 2025, down from $17.7 million in the same period in 2024[145]. - Overall gross loss from service agreements revenues was $(0.9) million for the three months ended April 30, 2025, compared to a gross profit of $0.1 million in the same period in 2024[135]. - Loss from operations for the six months ended April 30, 2025, was $68.7 million, a decrease of $15.1 million (18%) from $83.8 million in 2024[181]. - Interest expense increased to $5.2 million for the six months ended April 30, 2025, compared to $4.6 million in 2024[182]. - Net loss attributable to common stockholders for the six months ended April 30, 2025, was $68.0 million, compared to $53.5 million for the same period in 2024, with net loss per common share decreasing to $3.22 from $3.55[190]. Restructuring and Workforce - The company implemented a global restructuring plan, including a workforce reduction of 122 employees, or approximately 22% of its workforce[123]. - The restructuring plan is expected to incur aggregate costs of approximately $3.5 million to $4.5 million related to severance payments and other employee termination benefits[124]. - The company is evaluating certain assets for impairment, including goodwill and in-process research and development intangible assets, with a net book value of $13.8 million[125]. - The company aims to align its production schedule with contracted demand, which may result in a decrease in annualized production rate if growth in the closed order book does not continue[123]. - The company continues to face macroeconomic and industry-specific headwinds, particularly in the zero-carbon hydrogen space, impacting its strategic plans[123]. Cash and Liquidity - As of April 30, 2025, unrestricted cash and cash equivalents totaled $116.1 million, down from $148.1 million as of October 31, 2024[194]. - Cash and cash equivalents totaled $179.1 million as of April 30, 2025, down from $208.9 million as of October 31, 2024[235]. - The company received a $4.0 million contribution from East West Bank during the six months ended April 30, 2025, recorded as noncontrolling interest[195]. - Net cash used in operating activities was $75.6 million for the six months ended April 30, 2025, an improvement from $95.4 million in the same period of 2024[236]. - The company has pledged approximately $63.1 million of cash and cash equivalents as collateral for performance security and letters of credit as of April 30, 2025[232]. Backlog and Contracts - The company's backlog increased by approximately 18.7% to $1.26 billion as of April 30, 2025, compared to $1.06 billion as of April 30, 2024[216]. - Generation backlog totaled $967.4 million as of April 30, 2025, compared to $852.9 million as of April 30, 2024[218]. - The company entered into a 20-year PPA with Eversource and United Illuminating for a 7.4 MW carbonate fuel cell power generation system, expected to generate approximately $167.4 million in revenue over the contract term[218]. - The LTSA with GGE has a total contract value of approximately $159.6 million, with $33.6 million allocated to service and $126.0 million to product sales[221]. - The Advanced Technologies contract backlog totals $29.6 million, with $22.0 million being non-U.S. Government-funded and $7.6 million being U.S. Government-funded[307]. Projects and Development - The generation operating portfolio totaled 62.8 MW as of April 30, 2025, with an additional project of 7.4 MW in development expected to generate future cash flows[207]. - The Groton Project reached its design rated output of 7.4 MW during the first quarter of fiscal year 2024[212]. - The company has ceased all work on the Trinity and UConn projects due to restructuring plans and a slowdown in clean energy technology adoption[214]. - The Hartford Project, a 7.4 MW project under development, is expected to require an additional investment of approximately $34.0 million to $36.0 million through calendar year 2026[227]. - The company recognized revenue for four modules shipped during the six months ended April 30, 2025, and expects to continue recognizing revenue from additional shipments[226]. Financing and Debt - Total significant commitments and contractual obligations amount to $266.06 million, with $91.82 million due within 1 year[246]. - Purchase commitments total $61.22 million, with $59.49 million due within 1 year[246]. - Term loans (principal and interest) total $141.12 million, with $18.77 million due within 1 year[246]. - Operating lease commitments total $16.90 million, with $1.32 million due within 1 year[246]. - Natural gas and biomethane gas supply contracts total $39.32 million, with $10.83 million due within 1 year[246]. - The company entered into a 7-year natural gas contract for the LIPA Yaphank Project with an estimated annual cost of $2.0 million[248]. - A project debt financing transaction with EXIM resulted in gross proceeds of approximately $10.1 million, with a fixed interest rate of 5.81%[251]. - The OpCo Financing Facility includes a term loan facility of up to $80.5 million and a letter of credit facility of up to $6.5 million[261]. - The company is required to maintain a minimum cash balance of $100.0 million under the EXIM credit agreement[252]. - The OpCo Financing Facility closed on May 19, 2023, with a total Term Loan amount of $80.5 million drawn down[266]. - Approximately $11.4 million of senior and subordinated indebtedness related to the Bridgeport Fuel Cell Project was extinguished[264]. - The total net proceeds from the financing transactions amounted to approximately $46.1 million after accounting for the release of restricted cash[267]. - The Term Loan has a seven-year term, maturing on May 19, 2030, with quarterly principal amortization obligations based on a 1.30x debt service coverage ratio[269]. - The Applicable Margin for SOFR Rate Loans is set at 2.5% for the first four years, increasing to 3% thereafter[268]. - OpCo Borrower is required to maintain a capital expenditures reserve balance of $29.0 million, with $14.5 million funded from the Term Loan[270]. - An Irrevocable Letter of Credit was issued for $6.5 million to satisfy the debt service reserve funding obligation[271]. - The interest rate swap agreements will result in a net interest rate of 6.366% for the first four years and 6.866% thereafter[274]. - OpCo Borrower must maintain a debt service coverage ratio of not less than 1.20:1.00, tested every six months[276]. - Groton Holdco Borrower secured a total of $20.0 million through the Groton Senior Back Leverage Loan Facility and the Groton Subordinated Back Leverage Loan Facility on August 18, 2023[283]. - The Groton Senior Back Leverage Loans have a seven-year term, maturing on August 18, 2030, with a principal amortization based on a ten-year period[286]. - The interest rate for the Groton Senior Back Leverage Loan from Liberty Lender is 6.75%, while Amalgamated Lender's rate is 6.07% or 7.32% depending on the occurrence of a "Carbon Offset Event"[285]. - The Groton Subordinated Back Leverage Loan accrues interest at 8% prior to the "Step Down Date," which is contingent on the repayment of the Groton Senior Back Leverage Loans[287]. - The company must maintain a "Senior" debt service coverage ratio of at least 1.20:1.00 and a "Total" debt service coverage ratio of at least 1.10:1.00[289]. - The outstanding finance obligation balance from sale-leaseback agreements was $18.8 million as of April 30, 2025, with $11.3 million representing imputed interest[293]. - The company received a $10.0 million disbursement from the State of Connecticut for the expansion of its Torrington manufacturing facility, with a fixed interest rate of 2.0%[294]. Compliance and Obligations - The Employment Obligation under the Assistance Agreement requires the company to maintain 538 full-time positions for 24 consecutive months to qualify for loan forgiveness[295]. - The Third Amendment to the Assistance Agreement extended the Target Date to October 31, 2024, requiring the retention of 538 full-time positions[296]. - The Company has an average of 389 employees over the applicable 24 consecutive month period, resulting in a calculated repayment obligation of $2.1 million due to not meeting the amended Employment Obligation[300]. - The Company is subject to an accelerated payment penalty of $14,225.00 for each full-time employment position below the amended Employment Obligation[298]. - The Company has not been formally assessed a penalty as of April 30, 2025, but any accelerated payment penalty will be applied to the outstanding principal balance of the loan[300]. - The Company has deferred three months of principal and interest payments under the Assistance Agreement due to the COVID-19 pandemic, extending the maturity date by three months[301]. - As of April 30, 2025, the Company has $2.9 million in restricted cash primarily to support obligations under power purchase and service agreements related to Crestmark sale-leaseback transactions[302]. - The Company has no off-balance sheet debt or similar obligations and does not guarantee any third-party debt[308]. - The Company is in discussions with the State of Connecticut regarding a potential amendment to the terms of the Third Amendment to the Assistance Agreement[300].

Financial Performance - Total revenue for Q2 2025 was $37.4 million, compared to $22.4 million in Q2 2024[34] - Gross loss for Q2 2025 was $(9.4) million, compared to $(7.1) million in Q2 2024[36] - Operating expenses for Q2 2025 were $(26.4) million, compared to $(34.3) million in Q2 2024[36] - Net loss attributable to common stockholders was $(38.8) million, or $(1.79) per share, compared to $(32.9) million, or $(2.18) per share in Q2 2024[34] - Adjusted EBITDA was $(19.3) million, compared to $(26.5) million in Q2 2024[34] - The company had $240 million in total cash and investments as of April 30, 2025[15, 34, 40] Business Strategy and Operations - The company is prioritizing its proven carbonate platform with the goal of accelerating the timeline to expected profitability[4] - The company plans to target positive Adjusted EBITDA upon reaching approximately 100MW production capacity at Torrington[4] - The company is streamlining business operations, optimizing the core business, and driving commercial excellence[18] - The company is deploying sixteen 1.4 MW modules ratably in the 2nd half of FY2025 and sixteen 1.4 MW modules in FY2026 to GGE[41]

Revenue Performance - Revenue for the second quarter of fiscal 2025 was $37.4 million, an increase of approximately 67% compared to $22.4 million in the prior year[4] - Total revenues for the three months ended April 30, 2025, were $37.406 million, a significant increase from $22.420 million in the same period of 2024, representing a growth of 67%[36] - Total revenues for the six months ended April 30, 2025, increased to $56,403,000, compared to $39,111,000 for the same period in 2024, representing a growth of 44%[37] Product and Service Revenues - Product revenues for the second quarter were $13.0 million, compared to no product revenues in the prior year[9] - Product revenues reached $13.027 million, while service revenues increased to $8.144 million, compared to $1.369 million in the previous year[36] - Product revenues reached $13,099,000 in the first half of 2025, while service revenues increased to $9,992,000, compared to $2,986,000 in 2024[37] Gross Loss and Operating Expenses - The company reported a gross loss of $(9.4) million, which is an increase of approximately 33% from $(7.1) million in the same quarter last year[4] - The gross loss for the quarter was $9.438 million, compared to a gross loss of $7.074 million in the same quarter of 2024[36] - Total costs of revenues rose to $71,045,000 in the first half of 2025, up from $57,910,000 in 2024, leading to a gross loss of $14,642,000[37] - Operating expenses decreased to $26.4 million from $34.3 million, reflecting a reduction in administrative and selling expenses due to restructuring actions[12] - Operating expenses totaled $26.372 million, down from $34.287 million in the prior year, indicating a reduction of approximately 23%[36] - Operating expenses decreased to $54,019,000 in the first half of 2025 from $65,040,000 in 2024, primarily due to lower research and development expenses[37] Net Loss and Loss Per Share - Net loss per share improved to $(1.79), a decrease of approximately 18% from $(2.18) in the prior year[4] - The net loss attributable to common stockholders for the quarter was $38.849 million, compared to a net loss of $32.940 million in the same period last year[36] - The net loss attributable to common stockholders for the six months ended April 30, 2025, was $67,975,000, compared to $53,533,000 in 2024, reflecting an increase in losses[37] - Loss per share attributable to common stockholders improved to $(3.22) in the first half of 2025 from $(3.55) in 2024[37] Cash and Assets - Cash and cash equivalents totaled $240.0 million as of April 30, 2025, down from $318.0 million as of October 31, 2024[21] - Cash and cash equivalents decreased to $116.061 million as of April 30, 2025, down from $148.133 million as of October 31, 2024[34] - Total assets as of April 30, 2025, were $883.843 million, a decrease from $944.124 million as of October 31, 2024[34] Restructuring and Workforce Reduction - The company announced a restructuring plan aimed at reducing operating expenses by 30% on an annualized basis compared to fiscal year 2024[4] - The company has reduced its workforce by approximately 22% as part of its global restructuring plan[17] - The company reported a restructuring expense of $1,542,000 for the first half of 2025, which was not present in the same period of 2024[37] Adjusted EBITDA and Operational Efficiency - Adjusted EBITDA improved to $(19.3) million from $(26.5) million in the same quarter last year[15] - Adjusted EBITDA for the six months ended April 30, 2025, was $(40,383,000), compared to $(55,633,000) in 2024, indicating a reduction in operational losses[42] - The company plans to increase its annualized production rate at its Torrington manufacturing facility in the future, aiming for improved operational efficiency[28] Interest Expense and Depreciation - Interest expense increased to $5,155,000 in the first half of 2025 from $4,613,000 in 2024, indicating higher borrowing costs[37] - Depreciation and amortization for the six months ended April 30, 2025, totaled $20,836,000, compared to $18,151,000 in 2024, reflecting increased asset utilization[42] Focus on Sustainable Energy - FuelCell Energy is focused on advancing sustainable clean energy technologies to address critical challenges in energy access and environmental stewardship[31]

Current Business Update - FuelCell Energy reported a revenue of $37.4 million for the second quarter of fiscal 2025, representing a 67% increase compared to $22.4 million in the same quarter of the previous year [5][7] - The company is focusing on its carbonate platform to meet the growing market demand driven by AI data centers and distributed power generation solutions [3][5] - A global restructuring plan has been initiated to reduce operating expenses by 30% annually, with a workforce reduction of approximately 22% [5][14][16] Financial Performance - Gross loss for the second quarter was $(9.4) million, an increase of approximately 33% from $(7.1) million in the prior year [5][8] - Loss from operations decreased to $(35.8) million, a 13% improvement from $(41.4) million in the same quarter last year [5][12] - Net loss per share improved to $(1.79) from $(2.18), reflecting an 18% decrease in loss per share [5][13] Backlog and Revenue Streams - Total backlog increased by approximately 19% to $1.26 billion, up from $1.06 billion in the previous year [5][20] - Product revenues were $13.0 million, a significant increase from no product revenues in the comparable prior year period [10] - Service agreement revenues rose to $8.1 million from $1.4 million, driven by module replacement revenue [10] Operational Changes - The company is recalibrating its manufacturing facility production schedule to align with contracted demand rather than forecasted demand [16] - Research and development expenses decreased to $9.9 million, primarily due to reduced spending on solid oxide power generation and electrolysis platforms [9][11] - The addition of Mike Hill as Chief Commercial Officer is expected to enhance the company's focus on sustainable integrated energy solutions [3][5] Cash and Investments - As of April 30, 2025, the company had cash and cash equivalents totaling $240.0 million, down from $318.0 million as of October 31, 2024 [18] - Unrestricted cash and cash equivalents were $116.1 million, with short-term investments at $60.9 million [18] Strategic Partnerships - The company has formed a strategic partnership with Diversified Energy Co. PLC and TESIAC Corp. to enhance its entry into the data center market [3][5] - A long-term service agreement with Gyeonggi Green Energy Co., Ltd. contributed to the increase in backlog [20]