Financial Data and Key Metrics Changes - The company achieved record revenue of $777.7 million for Q4 2025, representing a 35.9% year-over-year increase [18] - Full year revenue reached $2 billion, up 37.3% from 2024 [20] - Adjusted EBITDA for Q4 was $146.1 million, slightly down from $147.3 million in Q4 2024 [19] - Non-GAAP gross margin for Q4 was 31.9%, down from 39.3% in Q4 2024 [18] - Non-GAAP operating profit for the full year was $221 million, an increase of $113.4 million from the previous year [20] - The company ended the quarter with $2.5 billion in total cash on the balance sheet [19] Business Line Data and Key Metrics Changes - The service business achieved approximately 20% non-GAAP gross margin for the first time in Q4 2025 [19] - The product backlog increased by 140% year-over-year to about $6 billion [7] - The service backlog reached approximately $14 billion, indicating strong growth potential [21] Market Data and Key Metrics Changes - The CNI (Commercial and Industrial) backlog grew over 135% year-over-year, driven by sectors such as telecom, manufacturing, logistics, retail, healthcare, and education [9] - The geographic mix of the U.S. backlog shifted, with over 80% now coming from states with lower power costs, compared to over 80% from California and the Northeast two years ago [9][10] Company Strategy and Development Direction - The company is focusing on becoming the standard for on-site power, capitalizing on the growing demand from data centers and CNI customers [8] - Investments will be made in the commercial team to enhance sales opportunities in 2026 [8] - The company is committed to expanding manufacturing capacity in a capital-light manner, allowing for rapid scaling without significant upfront investment [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet growing power demands, particularly in the context of AI and digital infrastructure [8][10] - The company anticipates continued improvements in service profitability as the install base expands [21] - Management highlighted the importance of 800 Volts DC technology as a future-proof solution for data centers, enhancing efficiency and reducing costs [15][16] Other Important Information - The company reported a cash flow from operating activities of $113.9 million for Q4 2025 [19] - Capital expenditures for the year were $57 million, with expectations for 2026 capital spending to be between $150 million and $200 million [22] Q&A Session Summary Question: Follow-on opportunities at existing customers - Management noted that over two-thirds of business comes from repeat customers, indicating strong customer satisfaction and ongoing engagement [25] Question: Milestones for capacity expansion - Management stated that decisions on capacity expansion are continuous and based on market opportunities, with a quick ramp-up capability [27][28] Question: Deployment of HVDC architecture - Management expressed confidence in the competitive advantage of 800-volt DC technology and its anticipated adoption in data centers [30][31] Question: Progress on combined heat and power solutions - Management highlighted the potential for absorption chillers to reduce electricity usage significantly, enhancing competitiveness [39][41] Question: Project wins against legacy technologies - Management confirmed that the company is operating in the same project size category as combined-cycle gas turbines, demonstrating competitive capabilities [45][48] Question: Life of fuel cell stacks and service margins - Management emphasized the continuous profitability of the service business and improvements in fuel cell stack performance [50][51] Question: Supplier growth projections - Management refrained from providing long-term guidance but acknowledged the bullish sentiment from supply chain partners [56][57] Question: U.S. vs. international market opportunities - Management indicated that while the U.S. market is currently the focus, the company plans to expand globally as infrastructure develops [61][62] Question: Pricing strategy and leverage - Management stated that pricing is market-driven and based on the value proposition offered to customers, with no immediate concerns about pricing pressures [66][69] Question: Interest in potential M&A - Management indicated that while they are open to selective acquisitions, the primary focus remains on scaling the core product [70][71]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $777.7 million, up 35.9% year-over-year, while full-year revenue reached a record $2 billion, up 37.3% from 2024 [16][18] - Adjusted EBITDA for Q4 was $146.1 million, slightly down from $147.3 million in Q4 2024, indicating strong operating leverage as the company scales [17] - Non-GAAP gross margin for Q4 was 31.9%, down from 39.3% in Q4 2024, while full-year non-GAAP gross margin improved to 30.3% from 28.7% in 2024 [16][18] - Operating income for Q4 was $133 million, nearly flat compared to $133.4 million in the same quarter last year [17] Business Line Data and Key Metrics Changes - The service business achieved approximately 20% non-GAAP gross margin for the first time, marking the third consecutive quarter of double-digit margins [15][17] - Product backlog increased 140% year-over-year to about $6 billion, while service backlog reached approximately $14 billion [5][19] - CNI (Commercial and Industrial) backlog grew over 135% year-over-year, driven by digitization, automation, and electrification trends [7][46] Market Data and Key Metrics Changes - The geographic mix of the U.S. backlog shifted significantly, with over 80% now coming from states with lower power costs, compared to over 80% from California and the Northeast two years ago [7][8] - The demand from data center and CNI customers is secular and growing, with a strong sales pipeline noted [6][46] Company Strategy and Development Direction - The company aims to become the standard for on-site power, focusing on rapid deployment and reliability, particularly in the context of increasing demand from AI and data centers [5][10] - Investments will continue in R&D and commercial efforts to capitalize on growth opportunities, with a focus on expanding manufacturing capacity as needed [10][19] - The transition to 800 Volts DC is highlighted as a key innovation, positioning the company ahead of competitors in meeting future power needs [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to scale operations without the lengthy delivery backlogs faced by traditional suppliers, emphasizing a capital-light approach to expansion [9][10] - The outlook for 2026 anticipates revenue between $3.1 billion and $3.3 billion, with continued improvements in gross margins and operating income [19][20] - The company is optimistic about the future, citing significant increases in capital expenditures from major tech companies as a positive indicator for growth in digital infrastructure [43][60] Other Important Information - The company has a strong balance sheet with $2.5 billion in total cash and a focus on maintaining operational efficiencies to drive cost reductions [17][59] - The service business is expected to grow significantly, supported by a large backlog and continuous improvements in technology and operational efficiency [39][41] Q&A Session Summary Question: Follow-on opportunities at existing customers - Management noted that over two-thirds of business comes from repeat customers, indicating strong customer satisfaction and ongoing engagement [22][23] Question: Milestones for capacity expansion - The company can quickly ramp up capacity based on market demand, with decisions made continuously as opportunities arise [24][25] Question: Deployment of HVDC architecture - Management is optimistic about the competitive advantage of 800-volt DC technology and anticipates strong demand for this solution [26][27] Question: Progress on combined heat and power solutions - On-site power generation allows for more efficient cooling solutions, potentially reducing electricity usage significantly in data centers [31][32] Question: Competitive landscape against legacy technologies - The company is seeing project wins against traditional technologies, emphasizing its ability to compete on efficiency and adaptability [35][36] Question: Life of fuel cell stacks and service margins - Continuous improvements in technology and service operations are expected to enhance profitability in the service business [38][39] Question: Supplier growth projections - Management acknowledged the enthusiasm from supply chain partners but clarified that long-term guidance has not been provided [42][43] Question: U.S. vs. international market opportunities - The company sees the U.S. as the primary focus for growth in the near term, with plans to expand internationally as infrastructure develops [46]