FuelCell Energy(FCEL) - 2025 Q3 - Quarterly Results

Third Quarter Fiscal 2025 Summary 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 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] - Improved core carbonate platform efficiency above 50% and focused on expanding distributed generation opportunities and deepening sales pipeline, particularly with data center customers[2] - Decisive restructuring actions in June are lowering costs, sharpening focus on distributed power generation, and positioning for investment in growth technologies and partnerships[2] - Modular power block solutions are uniquely positioned to scale with surging power demand from data centers, offering reliability and flexibility[2] Key Financial Highlights 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] Consolidated Financial Metrics & Results 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 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 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] - Service agreements revenue increase was primarily due to services provided under the GGE long-term service agreement[6] - Generation revenues decreased due to lower output from plants in the Company's generation operating portfolio resulting from routine maintenance activities[12] - 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] Gross Loss 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] - Partially offset by reduced gross margin on Advanced Technologies contract revenues and service agreements revenues[7] Operating Expenses 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] - 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] - 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] Net Loss and EPS 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] - Non-cash impairment and restructuring expenses negatively impacted net loss per share by $(2.80) for Q3 FY2025[15] Adjusted Non-GAAP Metrics 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] Liquidity and Capital Resources 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 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 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 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 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] Service Agreements Backlog 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] - GGE LTSA added approximately $33.6 million to service backlog in Q4 FY2024, with revenue being recognized as service is performed[19] Generation Backlog 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] Product Backlog 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] - CGN LTSA added $24.0 million to product backlog during Q3 FY2025[20] Advanced Technologies Contract Backlog 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] Backlog Definition and Terms 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] - 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] - 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][23] Conference Call Information 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 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] - Access available via live webcast on www.fuelcellenergy.com or by dialing 888-330-3181 (Conference ID: 1099808)[24][26] - Replay available via webcast on the Company's Investors' page approximately two hours after the call[24] Cautionary Language 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 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] - 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] - 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] - The company expressly disclaims any obligation to publicly update or revise any forward-looking statements[27] About FuelCell Energy 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 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] - Focuses on advancing sustainable clean energy technologies to address global challenges in energy access, security, resilience, reliability, affordability, safety, and environmental stewardship[28] - Serves industrial and commercial businesses, utilities, governments, municipalities, and communities worldwide[28] Consolidated Financial Statements 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 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] - 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] Consolidated Statements of Operations and Comprehensive Loss 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 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 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 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 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][37] - 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] - 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] EBITDA and Adjusted EBITDA Reconciliation 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] - 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] Adjusted Net Loss Reconciliation 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] - 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]