[Third Quarter Fiscal 2025 Summary](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Summary) FuelCell Energy reported significant Q3 FY2025 revenue growth and strategic execution, improving platform efficiency and focusing on distributed generation and data center markets, while restructuring actions aim for cost reduction and future profitability [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jason Few highlighted Q3 FY2025 revenue growth, improved carbonate platform efficiency, expanded distributed generation, and data center focus, with restructuring efforts yielding cost reductions and strategic positioning for future growth - Achieved meaningful revenue growth and advanced long-term strategy execution[2](index=2&type=chunk) - Improved core carbonate platform efficiency above **50%** and focused on expanding distributed generation opportunities and deepening sales pipeline, particularly with data center customers[2](index=2&type=chunk) - Decisive restructuring actions in June are lowering costs, sharpening focus on distributed power generation, and positioning for investment in growth technologies and partnerships[2](index=2&type=chunk) - Modular power block solutions are uniquely positioned to scale with surging power demand from data centers, offering reliability and flexibility[2](index=2&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Q3 FY2025 saw 97% revenue growth to $46.7 million, but increased losses from operations and net income due to non-cash impairment and restructuring, though adjusted net loss per share improved Key Financial Highlights (Millions) | Metric | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change (%) | | :--------------------------------------- | :------------------- | :------------------- | :--------- | | Revenue | $46.7 | $23.7 | 97% | | Gross loss | $(5.1) | $(6.2) | (17%) | | Loss from operations | $(95.4) | $(33.6) | 184% | | Net loss attributable to common stockholders | $(92.5) | $(33.5) | 176% | | Net loss per share attributable to common stockholders | $(3.78) | $(1.99) | 90% | | Adjusted net loss per share attributable to common stockholders | $(0.95) | $(1.74) | (45%) | | Backlog | $1,240.0 | $1,200.0 | 4% | - Net loss per share was primarily driven by restructuring expenses and non-cash impairment expenses[3](index=3&type=chunk) [Consolidated Financial Metrics & Results](index=2&type=section&id=Consolidated%20Financial%20Metrics%20%26%20Results) FuelCell Energy's Q3 FY2025 total revenues increased by 97%, but significant impairment and restructuring expenses led to widened losses, though adjusted non-GAAP metrics showed improvement [Overall Financial Metrics](index=2&type=section&id=Overall%20Financial%20Metrics) Q3 FY2025 total revenues rose 97% to $46.7 million, but substantial impairment and restructuring expenses widened losses from operations and net loss, while Adjusted EBITDA and Adjusted net loss per share improved Overall Financial Metrics (Amounts in thousands) | Metric (Amounts in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Change | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----- | | Total revenues | $46,743 | $23,695 | 97% | | Gross loss | $(5,134) | $(6,202) | (17%) | | Loss from operations | $(95,364) | $(33,617) | 184% | | Net loss | $(91,896) | $(35,123) | 162% | | Net loss attributable to common stockholders | $(92,456) | $(33,460) | 176% | | Net loss per basic and diluted share attributable to common stockholders | $(3.78) | $(1.99) | 90% | | EBITDA | $(85,618) | $(24,379) | 251% | | Adjusted EBITDA | $(16,380) | $(20,134) | (19%) | | Adjusted net loss per basic and diluted share attributable to common stockholders | $(0.95) | $(1.74) | (45%) | [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Total revenues increased by 97% to $46.7 million in Q3 FY2025, primarily driven by significant product revenue growth from GGE platform module deliveries and a sales contract with Ameresco, despite decreases in generation and advanced technologies revenues Revenue by Category (Millions) | Revenue Category | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change | | :----------------------- | :------------------- | :------------------- | :----- | | Product revenues | $26.0 | $0.3 | Significant Increase | | Service agreements revenues | $3.1 | $1.4 | Increase | | Generation revenues | $12.4 | $13.4 | Decrease | | Advanced Technologies contract revenues | $5.3 | $8.6 | Decrease | - Product revenue increase was primarily driven by **$24.0 million** from the Gyeonggi Green Energy Co., Ltd. (GGE) long-term service agreement for fuel cell module delivery and commissioning, and **$2.0 million** from Ameresco, Inc[6](index=6&type=chunk) - Service agreements revenue increase was primarily due to services provided under the GGE long-term service agreement[6](index=6&type=chunk) - Generation revenues decreased due to lower output from plants in the Company's generation operating portfolio resulting from routine maintenance activities[12](index=12&type=chunk) - Advanced Technologies contract revenues decreased, with contributions from the Joint Development Agreement with ExxonMobil Technology and Engineering Company (EMTEC) and the Rotterdam project purchase order from Esso Nederland B.V[12](index=12&type=chunk) [Gross Loss](index=3&type=section&id=Gross%20Loss) Q3 FY2025 gross loss decreased to $(5.1) million, mainly due to reduced losses from generation and product revenues, partially offset by lower gross margins in Advanced Technologies and service agreements Gross Loss (Millions) | Metric | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change | | :--------- | :------------------- | :------------------- | :----- | | Gross loss | $(5.1) | $(6.2) | (17%) | - Decrease in gross loss primarily related to decreased gross loss from generation revenues and product revenues[7](index=7&type=chunk) - Partially offset by reduced gross margin on Advanced Technologies contract revenues and service agreements revenues[7](index=7&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Operating expenses significantly increased to $90.2 million in Q3 FY2025, primarily due to $64.5 million in non-cash impairment and $4.1 million in restructuring expenses, while administrative, selling, and R&D expenses decreased Operating Expenses (Millions) | Expense Category (Millions) | Q3 FY2025 | Q3 FY2024 | Change | | :-------------------------- | :-------- | :-------- | :----- | | Operating expenses | $90.2 | $27.4 | Increase | | Administrative and selling expenses | $14.1 | $14.6 | Decrease | | Research and development expenses | $7.6 | $12.8 | Decrease | | Impairment expense | $64.5 | $- | N/A | | Restructuring expense | $4.1 | $- | N/A | - Administrative and selling expenses decreased due to lower compensation expense from restructuring actions in September 2024, November 2024, and June 2025[9](index=9&type=chunk) - Research and development expenses decreased due to reduced spending on commercial development efforts for solid oxide power generation, electrolysis platforms, and carbon separation/recovery solutions[10](index=10&type=chunk) - Non-cash impairment expenses of **$64.5 million** included **$42.1 million** for property, plant and equipment, **$9.0 million** for inventory, **$9.3 million** for in-process R&D intangible assets, and **$4.1 million** for goodwill[11](index=11&type=chunk) [Net Loss and EPS](index=4&type=section&id=Net%20Loss%20and%20EPS) Net loss attributable to common stockholders surged to $(92.5) million in Q3 FY2025, resulting in a net loss per share of $(3.78), predominantly due to non-cash impairment and restructuring expenses Net Loss and EPS (Millions) | Metric | Q3 FY2025 (Millions) | Q3 FY2024 (Millions) | Change | | :--------------------------------------- | :------------------- | :------------------- | :----- | | Net loss | $(91.9) | $(35.1) | 162% | | Net loss attributable to common stockholders | $(92.5) | $(33.5) | 176% | | Net loss per share attributable to common stockholders | $(3.78) | $(1.99) | 90% | - The increase in net loss per share was primarily due to non-cash impairment expenses and restructuring expenses recognized during Q3 FY2025, partially offset by the benefit of a higher number of weighted average shares outstanding[15](index=15&type=chunk) - Non-cash impairment and restructuring expenses negatively impacted net loss per share by **$(2.80)** for Q3 FY2025[15](index=15&type=chunk) [Adjusted Non-GAAP Metrics](index=4&type=section&id=Adjusted%20Non-GAAP%20Metrics) Adjusted EBITDA improved to $(16.4) million and Adjusted net loss to $(23.2) million in Q3 FY2025, reflecting early benefits from cost-saving actions and a sharpened focus on the core carbonate platform Adjusted Non-GAAP Metrics (Millions) | Metric (Millions) | Q3 FY2025 | Q3 FY2024 | Change | | :--------------------------------------- | :-------- | :-------- | :----- | | Adjusted EBITDA | $(16.4) | $(20.1) | (19%) | | Adjusted net loss attributable to common stockholders | $(23.2) | $(29.2) | (21%) | | Adjusted net loss per share attributable to common stockholders | $(0.95) | $(1.74) | (45%) | - Improvements in Adjusted EBITDA and Adjusted net loss attributable to common stockholders reflect early benefits of cost-saving actions and a sharper focus on the core carbonate platform[14](index=14&type=chunk) [Liquidity and Capital Resources](index=4&type=section&id=Liquidity%20and%20Capital%20Resources) Total cash, restricted cash, and short-term investments decreased to $236.9 million as of July 31, 2025, with unrestricted cash increasing while short-term investments were fully utilized, supplemented by common stock sales [Cash, Restricted Cash and Short-Term Investments](index=4&type=section&id=Cash%2C%20Restricted%20Cash%20and%20Short-Term%20Investments) Total cash, restricted cash, and short-term investments decreased to $236.9 million as of July 31, 2025, primarily due to the full utilization of short-term investments, despite an increase in unrestricted cash Cash, Restricted Cash and Short-Term Investments (Millions) | Metric (Millions) | July 31, 2025 | October 31, 2024 | Change | | :--------------------------------------- | :------------ | :--------------- | :----- | | Total Cash, Restricted Cash, and Short-Term Investments | $236.9 | $318.0 | $(81.1) | | Unrestricted cash and cash equivalents | $174.7 | $148.1 | $26.6 | | Restricted cash and cash equivalents | $62.2 | $60.8 | $1.4 | | Short-term investments | $- | $109.1 | $(109.1) | [Common Stock Sales](index=4&type=section&id=Common%20Stock%20Sales) The company generated $38.1 million in net proceeds from selling 6.8 million common shares in Q3 FY2025, with an additional $11.8 million from 2.7 million shares sold post-quarter Common Stock Sales | Period | Shares Sold (Millions) | Average Sale Price | Net Proceeds (Millions) | | :--------------------------------------- | :--------------------- | :----------------- | :---------------------- | | Three months ended July 31, 2025 | 6.8 | $5.70 | $38.1 | | Subsequent to quarter end | 2.7 | $4.55 | $11.8 | [Backlog Analysis](index=5&type=section&id=Backlog%20Analysis) Total backlog increased by 4.0% to $1.24 billion as of July 31, 2025, driven by the Hartford Project and long-term service agreements with CGN and GGE, despite decreases in product and advanced technologies backlogs [Total Backlog Overview](index=5&type=section&id=Total%20Backlog%20Overview) Total backlog increased by 4.0% to $1.24 billion as of July 31, 2025, primarily driven by the Hartford Project and long-term service agreements with CGN and GGE Total Backlog Overview (Amounts in thousands) | Backlog Category (Amounts in thousands) | As of July 31, 2025 | As of July 31, 2024 | Change | | :--------------------------------------- | :------------------ | :------------------ | :------- | | Product | $96,183 | $136,708 | $(40,525) | | Service | $169,384 | $178,387 | $(9,003) | | Generation | $955,033 | $839,532 | $115,501 | | Advanced Technologies | $24,254 | $42,480 | $(18,226) | | **Total Backlog** | **$1,244,854** | **$1,197,107** | **$47,747** | - Overall backlog increased by approximately **4.0%** to **$1.24 billion**, primarily due to the Hartford Project, CGN LTSA, and GGE LTSA[19](index=19&type=chunk) [Service Agreements Backlog](index=5&type=section&id=Service%20Agreements%20Backlog) Service agreements backlog decreased to $169.4 million as of July 31, 2025, despite new LTSAs with CGN and GGE adding significant value, which is recognized as revenue over time Service Agreements Backlog (Millions) | Metric (Millions) | As of July 31, 2025 | As of July 31, 2024 | Change | | :----------------------- | :------------------ | :------------------ | :----- | | Service agreements backlog | $169.4 | $178.4 | $(9.0) | - CGN LTSA added approximately **$7.7 million** to service backlog during Q3 FY2025[19](index=19&type=chunk) - GGE LTSA added approximately **$33.6 million** to service backlog in Q4 FY2024, with revenue being recognized as service is performed[19](index=19&type=chunk) [Generation Backlog](index=5&type=section&id=Generation%20Backlog) Generation backlog increased to $955.0 million as of July 31, 2025, primarily due to the new 20-year Power Purchase Agreement for the Hartford Project, expected to generate $167.4 million in revenue Generation Backlog (Millions) | Metric (Millions) | As of July 31, 2025 | As of July 31, 2024 | Change | | :---------------- | :------------------ | :------------------ | :------- | | Generation backlog | $955.0 | $839.5 | $115.5 | - The Hartford Project, a **7.4 MW** carbonate fuel cell power plant, added approximately **$167.4 million** to Generation backlog through a **20-year PPA** with Eversource and United Illuminating[19](index=19&type=chunk) [Product Backlog](index=5&type=section&id=Product%20Backlog) Product backlog decreased to $96.2 million as of July 31, 2025, mainly due to revenue recognition from GGE Platform module commissioning, partially offset by the CGN LTSA Product Backlog (Millions) | Metric (Millions) | As of July 31, 2025 | As of July 31, 2024 | Change | | :-------------- | :------------------ | :------------------ | :------- | | Product backlog | $96.2 | $136.7 | $(40.5) | - Decrease primarily resulted from revenue recognition as the company completed commissioning of replacement modules for the GGE Platform[19](index=19&type=chunk) - CGN LTSA added **$24.0 million** to product backlog during Q3 FY2025[20](index=20&type=chunk) [Advanced Technologies Contract Backlog](index=6&type=section&id=Advanced%20Technologies%20Contract%20Backlog) Advanced Technologies contract backlog decreased to $24.3 million as of July 31, 2025, primarily comprising remaining revenue from the EMTEC Joint Development Agreement, an Esso purchase order, and government contracts Advanced Technologies Contract Backlog (Millions) | Metric (Millions) | As of July 31, 2025 | As of July 31, 2024 | Change | | :------------------------------ | :------------------ | :------------------ | :------- | | Advanced Technologies contract backlog | $24.3 | $42.5 | $(18.2) | - Backlog includes remaining revenue under the Joint Development Agreement with EMTEC and a purchase order from Esso valued at **$15.6 million** (with a **$4.0 million** increase from change orders)[20](index=20&type=chunk) [Backlog Definition and Terms](index=6&type=section&id=Backlog%20Definition%20and%20Terms) Backlog represents definitive customer agreements, including future contracted energy sales and product/service sales, with revenue recognition from PPAs contingent on project completion and a weighted average term of approximately 16 years for service and generation - Backlog represents definitive agreements, with PPA projects included in generation backlog and customer-sold projects in product sales and service agreements backlog[22](index=22&type=chunk) - Revenue recognition under PPAs is subject to the completion of project construction; failure to complete may result in forgone revenues, penalties, and/or impairment expenses[22](index=22&type=chunk) - The weighted average term of the service and generation portion of backlog was approximately **16 years** as of July 31, 2025, with utility service contracts up to **20 years**[22](index=22&type=chunk)[23](index=23&type=chunk) [Conference Call Information](index=7&type=section&id=Conference%20Call%20Information) FuelCell Energy hosted a conference call on September 9, 2025, to discuss Q3 FY2025 results and business highlights, accessible via webcast or telephone, with a replay available online [Conference Call Details](index=7&type=section&id=Conference%20Call%20Details) FuelCell Energy held a conference call on September 9, 2025, at 10:00 a.m. ET to discuss Q3 FY2025 results and business highlights, with live webcast and telephone access, and an online replay - Conference call held on September 9, 2025, at **10:00 a.m. ET** to discuss Q3 FY2025 results and key business highlights[24](index=24&type=chunk) - Access available via live webcast on www.fuelcellenergy.com or by dialing **888-330-3181** (Conference ID: **1099808**)[24](index=24&type=chunk)[26](index=26&type=chunk) - Replay available via webcast on the Company's Investors' page approximately two hours after the call[24](index=24&type=chunk) [Cautionary Language](index=7&type=section&id=Cautionary%20Language) This section highlights that the news release contains forward-looking statements subject to various known and unknown risks and uncertainties, including economic, regulatory, and operational factors, with no obligation to update [Forward-Looking Statements and Risks](index=7&type=section&id=Forward-Looking%20Statements%20and%20Risks) The news release contains forward-looking statements subject to various known and unknown risks and uncertainties, including general economic conditions, supply chain disruptions, regulatory changes, and the ability to convert bids to contracts or contracts to revenue, with no obligation to update - The news release contains forward-looking statements regarding future events or financial performance, which are not guarantees and are subject to risks and uncertainties[25](index=25&type=chunk) - Key risks include general economic conditions, changes in interest rates, supply chain disruptions, regulatory and utility industry changes, commodity price volatility, availability of government incentives, rapid technological change, competition, and the ability to convert bid awards to contracts or contracts to revenue[25](index=25&type=chunk) - Additional risks include the ability to maintain compliance with listing rules, market acceptance of products, factors affecting liquidity, government contract termination rights, intellectual property protection, litigation, commercialization delays, need for additional financing, ability to generate positive cash flow, and the impact of restructuring plans[27](index=27&type=chunk) - The company expressly disclaims any obligation to publicly update or revise any forward-looking statements[27](index=27&type=chunk) [About FuelCell Energy](index=8&type=section&id=About%20FuelCell%20Energy) FuelCell Energy, Inc. is a global leader providing environmentally responsible distributed baseload energy solutions through proprietary fuel cell technology, addressing critical global challenges in energy access, security, and environmental stewardship [Company Overview](index=8&type=section&id=Company%20Overview) FuelCell Energy, Inc. is a global leader in environmentally responsible distributed baseload energy solutions, utilizing proprietary fuel cell technology to address critical global challenges in energy access, security, reliability, affordability, safety, and environmental stewardship across various sectors - FuelCell Energy is a global leader in delivering environmentally responsible distributed baseload energy platform solutions using proprietary fuel cell technology[28](index=28&type=chunk) - Focuses on advancing sustainable clean energy technologies to address global challenges in energy access, security, resilience, reliability, affordability, safety, and environmental stewardship[28](index=28&type=chunk) - Serves industrial and commercial businesses, utilities, governments, municipalities, and communities worldwide[28](index=28&type=chunk) [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show a decrease in total assets and equity as of July 31, 2025, primarily due to reduced short-term investments and impairment, while total revenues increased for both the three and nine months ended July 31, 2025, despite significant net losses from impairment and restructuring [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of July 31, 2025, total assets decreased to $830.5 million, driven by reductions in short-term investments, project assets, and property, plant and equipment, while total liabilities and equity also decreased Consolidated Balance Sheets (Amounts in thousands) | Metric (Amounts in thousands) | July 31, 2025 | October 31, 2024 | | :--------------------------------------- | :------------ | :--------------- | | **ASSETS** | | | | Total current assets | $370,397 | $444,458 | | Restricted cash and cash equivalents – long-term | $46,100 | $48,589 | | Project assets, net | $224,482 | $242,131 | | Property, plant and equipment, net | $97,761 | $130,686 | | Goodwill | $- | $4,075 | | Intangible assets, net | $4,215 | $14,779 | | **Total assets** | **$830,535** | **$944,124** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $69,027 | $73,904 | | Long-term debt and other liabilities | $119,320 | $130,850 | | **Total liabilities** | **$205,458** | **$216,658** | | Redeemable Series B preferred stock | $59,857 | $59,857 | | **Total equity** | **$565,220** | **$667,609** | - Goodwill was fully impaired, decreasing from **$4.075 million** to **$0**[31](index=31&type=chunk) - Total assets of Variable Interest Entities (VIEs) were **$322.4 million** as of July 31, 2025, which can only be used to settle VIE obligations[31](index=31&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The consolidated statements of operations show increased total revenues for both the three and nine months ended July 31, 2025, primarily from product and service revenues, but also a substantial rise in net loss and loss per share due to impairment and restructuring expenses [Three Months Ended July 31, 2025 and 2024](index=10&type=section&id=Three%20Months%20Ended%20July%2031%2C%202025%20and%202024) For Q3 FY2025, total revenues increased 97% to $46.7 million, with product revenues surging, but operating expenses, driven by impairment and restructuring, led to a net loss of $(91.9) million and a net loss per share of $(3.78) Consolidated Statements of Operations (Amounts in thousands) | Metric (Amounts in thousands) | July 31, 2025 | July 31, 2024 | | :--------------------------------------- | :------------ | :------------ | | Total revenues | $46,743 | $23,695 | | Product revenues | $26,000 | $250 | | Service revenues | $3,130 | $1,411 | | Generation revenues | $12,355 | $13,402 | | Advanced Technologies revenues | $5,258 | $8,632 | | Gross loss | $(5,134) | $(6,202) | | Operating expenses | $90,230 | $27,415 | | Impairment expense | $64,467 | $- | | Restructuring expense | $4,051 | $- | | Net loss | $(91,896) | $(35,123) | | Net loss attributable to common stockholders | $(92,456) | $(33,460) | | Net loss per share attributable to common stockholders | $(3.78) | $(1.99) | [Nine Months Ended July 31, 2025 and 2024](index=11&type=section&id=Nine%20Months%20Ended%20July%2031%2C%202025%20and%202024) For the nine months ended July 31, 2025, total revenues increased to $103.1 million, with product revenues significantly higher, but operating expenses more than doubled due to impairment and restructuring, resulting in a net loss of $(162.0) million and a net loss per share of $(7.22) Consolidated Statements of Operations (Amounts in thousands) | Metric (Amounts in thousands) | July 31, 2025 | July 31, 2024 | | :--------------------------------------- | :------------ | :------------ | | Total revenues | $103,146 | $62,806 | | Product revenues | $39,099 | $250 | | Service revenues | $13,122 | $4,397 | | Generation revenues | $35,825 | $38,013 | | Advanced Technologies revenues | $15,100 | $20,146 | | Gross loss | $(19,776) | $(25,001) | | Operating expenses | $144,249 | $92,455 | | Impairment expense | $64,467 | $- | | Restructuring expense | $5,593 | $- | | Net loss | $(162,031) | $(117,178) | | Net loss attributable to common stockholders | $(160,431) | $(86,993) | | Net loss per share attributable to common stockholders | $(7.22) | $(5.56) | [Appendix: Non-GAAP Financial Measures](index=12&type=section&id=Appendix%3A%20Non-GAAP%20Financial%20Measures) This appendix defines non-GAAP financial measures like EBITDA and Adjusted net loss, which management uses to analyze operating performance by excluding non-cash or non-recurring items, providing a comparative view within the fuel cell sector [Non-GAAP Measures Explanation](index=12&type=section&id=Non-GAAP%20Measures%20Explanation) This section defines non-GAAP measures such as EBITDA and Adjusted net loss, which management uses to analyze operating performance and trends by excluding non-cash or non-recurring items, offering a comparative view within the fuel cell sector - Non-GAAP measures (EBITDA, Adjusted EBITDA, Adjusted net loss, Adjusted net loss per share) are used by management to analyze operating decisions and assess performance[36](index=36&type=chunk)[37](index=37&type=chunk) - Adjusted EBITDA and Adjusted net loss exclude stock-based compensation, impairment and restructuring expenses, non-cash (gain) loss on derivative instruments, and other unusual items[37](index=37&type=chunk) - These non-GAAP measures are not prepared in accordance with GAAP and should not be considered in isolation or as a substitute for comparable GAAP financial measures[38](index=38&type=chunk) [EBITDA and Adjusted EBITDA Reconciliation](index=12&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) For Q3 FY2025, Adjusted EBITDA improved to $(16.4) million, and for the nine months, it improved to $(56.8) million, reflecting the impact of non-cash and non-recurring adjustments from the net loss EBITDA and Adjusted EBITDA Reconciliation (Amounts in thousands) | Metric (Amounts in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net loss | $(91,896) | $(35,123) | $(162,031) | $(117,178) | | EBITDA | $(85,618) | $(24,379) | $(133,443) | $(90,067) | | Stock-based compensation expense | $1,691 | $3,350 | $8,657 | $9,227 | | Unrealized (gain) loss on natural gas contract derivative assets | $(971) | $895 | $(2,037) | $5,072 | | Impairment expense | $64,467 | $- | $64,467 | $- | | Restructuring expense | $4,051 | $- | $5,593 | $- | | **Adjusted EBITDA** | **$(16,380)** | **$(20,134)** | **$(56,763)** | **$(75,768)** | - Depreciation and amortization for the three months ended July 31, 2025, was **$9.7 million**, and for the nine months, it was **$30.6 million**[42](index=42&type=chunk) - The company recorded a non-cash impairment expense of **$64.5 million** for both the three and nine months ended July 31, 2025, related to solid oxide technology, goodwill, in-process R&D, property, plant and equipment, and solid oxide inventory[45](index=45&type=chunk) [Adjusted Net Loss Reconciliation](index=13&type=section&id=Adjusted%20Net%20Loss%20Reconciliation) Adjusted net loss attributable to common stockholders improved to $(23.2) million for Q3 FY2025 and $(83.8) million for the nine months, with Adjusted net loss per share also improving, after excluding specific non-cash and non-recurring items Adjusted Net Loss Reconciliation (Amounts in thousands except per share) | Metric (Amounts in thousands except per share) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net loss attributable to common stockholders | $(92,456) | $(33,460) | $(160,431) | $(86,993) | | Stock-based compensation expense | $1,691 | $3,350 | $8,657 | $9,227 | | Unrealized (gain) loss on natural gas contract derivative assets | $(971) | $895 | $(2,037) | $5,072 | | Impairment expense | $64,467 | $- | $64,467 | $- | | Restructuring expense | $4,051 | $- | $5,593 | $- | | **Adjusted net loss attributable to common stockholders** | **$(23,218)** | **$(29,215)** | **$(83,751)** | **$(72,694)** | | Net loss per share attributable to common stockholders | $(3.78) | $(1.99) | $(7.22) | $(5.56) | | **Adjusted net loss per share attributable to common stockholders** | **$(0.95)** | **$(1.74)** | **$(3.77)** | **$(4.65)** | - Other (income) expense, net includes gains/losses from foreign currency transactions, interest rate swap income, and other periodic non-normal business items[43](index=43&type=chunk) - The company recorded a mark-to-market net gain of **$1.0 million** (Q3) and **$2.0 million** (9M) for natural gas contract derivative assets in FY2025, compared to losses in FY2024[44](index=44&type=chunk)

Third Quarter Fiscal 2025 Summary (All comparisons are year-over-year unless otherwise noted) Revenue of $46.7 million, compared to $23.7 million, an increase of approximately 97%Gross loss of $(5.1) million compared to $(6.2) million, a decrease of approximately 17%Loss from operations of $(95.4) million compared with $(33.6) million, an increase of approximately 184%Net loss attributable to common stockholders of $(92.5) million, compared to $(33.5) million, an increase of approximately 176%Net loss per s ...

Company Announcement - FuelCell Energy, Inc. will release its third quarter 2025 results on September 9, 2025, before the stock market opens [1] - Following the results announcement, the company will host a conference call with investors at 10:00 a.m. Eastern Time on the same day [1] Conference Call Details - The conference call will be accessible via webcast on the company's website or by telephone [1] - A replay of the conference call will be available approximately two hours after the conclusion of the call on the company's Investors' page [2] Company Overview - FuelCell Energy provides clean and reliable energy solutions that enable customers to access power quickly and manage emissions [3] - The company's systems are efficient, scalable, and fuel-flexible, operating on natural gas, biofuels, or hydrogen, and provide steady baseload electricity [3] - With over 55 years of expertise and nearly 200 modules deployed, FuelCell Energy assists customers in achieving their energy goals [3]

Core Insights - FuelCell Energy has signed a seven-year agreement with CGN-Yulchon Generation Co., Ltd. for the purchase of eight advanced carbonate fuel cell modules and maintenance services, reinforcing its position as a utility-scale electric power producer [1][2][4] - The CGN-Yulchon facility will utilize four fuel cell units, each consisting of two modules, producing a total of 10 megawatts of low carbon baseload power, contributing to CGN's decarbonization goals and South Korea's Hydrogen Economy Roadmap [2][3] - This agreement enhances FuelCell Energy's strategic presence in Asia's advanced fuel cell market, alongside other projects, demonstrating momentum in repowering utility-scale assets [4] Company Operations - FuelCell Energy is the only provider delivering utility-scale power and steam, with applications in district heating and industrial processes, offering a scalable, clean energy platform [5][6] - The company has operated a dedicated service team in Korea since 2018, supporting over 100 megawatts of installed capacity, with a service model that includes 24/7 monitoring and preventative maintenance [7] - FuelCell Energy's technology is positioned to meet the growing global demand for electricity, providing high-efficiency, low-emission baseload power [6][8]

Core Insights - Plug Power Inc. (PLUG) and FuelCell Energy, Inc. (FCEL) are key players in the fuel cell technology market, focusing on innovative product solutions and electrolysis platforms [1][2] Group 1: Plug Power (PLUG) - PLUG has experienced a high cash burn rate and negative gross margins, with lower revenues from hydrogen equipment sales impacting performance [3][11] - The company is investing in hydrogen plants, anticipating the green hydrogen market to grow to $30 billion by 2030 [4] - PLUG aims to increase green hydrogen production through a new plant in Georgia and a joint venture with Olin Corporation in Louisiana, supported by a $1.66 billion loan guarantee from the U.S. Department of Energy [5][20] - The deployment of proton exchange membrane (PEM) electrolyzer systems highlights PLUG's expertise in the sector [6] - Cost management efforts have reduced the cash burn rate by nearly 50% year-over-year in Q1 2025, with Project Quantum Leap targeting over $200 million in annualized savings [7][8] Group 2: FuelCell Energy (FCEL) - FCEL continues to receive orders for clean energy solutions, including a contract for a 7.4 MW fuel cell power plant expected to generate over $160 million in future revenues [9] - The company's backlog reached $1.26 billion, reflecting an 18.7% year-over-year growth [9] - FCEL is restructuring operations to lower costs and enhance its competitive position, despite facing negative gross margins of -26% in the first half of fiscal 2025 [10][11] - The company's long-term debt stands at $124.1 million, raising concerns given its cash and cash equivalents of $116.1 million [12] - The Zacks Consensus Estimate for FCEL's fiscal 2025 sales is approximately $144.6 million, indicating a year-over-year growth of 28.9% [13] Group 3: Market Performance and Valuation - Over the past three months, Plug Power's shares surged by 91.8%, while FuelCell Energy's stock gained 37.4% [17] - PLUG is trading at a forward price-to-earnings ratio of -4.13X, compared to FCEL's -1.06X [18] - Both companies hold a Zacks Rank 3 (Hold), complicating the decision for investors [19]

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]