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 [18][20] - 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 [19] - 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 [18][20] - The company ended Q4 with $2.5 billion in total cash and a service backlog of approximately $14 billion [19][21] Business Line Data and Key Metrics Changes - The service business achieved a gross margin of approximately 20% for the first time in Q4, marking the third consecutive quarter of double-digit margins [19] - Product backlog increased by 140% year-over-year to about $6 billion, with the C&I backlog growing over 135% year-over-year [7][21] - The company reported a product margin of 37% while service margins were approximately 20% [19] Market Data and Key Metrics Changes - The geographic mix of the U.S. backlog has 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] - The demand from data center and commercial and industrial (C&I) customers is secular and growing, driven by digitization, automation, electrification, and reshoring [8][9] 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 AI and data centers [6][10] - Bloom Energy is investing in its commercial team to capitalize on growing sales opportunities and plans to expand manufacturing capacity as needed [8][10] - The introduction of 800 volts DC technology is positioned as a competitive advantage, aligning with the needs of modern data centers [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, expecting 2026 revenue to be between $3.1 billion and $3.3 billion, with a non-GAAP operating income of approximately $425 million to $475 million [22] - The company anticipates continued improvements in service profitability as it expands its install base and scales operations [21] - Management highlighted the importance of customer satisfaction and repeat business, noting that over two-thirds of business comes from repeat customers [25][26] Other Important Information - The company has a strong focus on technology innovation, with ongoing investments in R&D to enhance its product offerings and maintain competitive advantages [16][34] - Bloom Energy's approach to manufacturing is described as asset-light, allowing for rapid scaling without the lengthy delivery backlogs faced by traditional suppliers [11][12] 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 traction and satisfaction with initial projects [25][26] Question: Milestones for capacity expansion - Management stated that decisions on capacity expansion are continuous and based on market opportunities, emphasizing their capital-light approach [27][29] Question: Deployment of HVDC architecture - Management expressed confidence in the competitive advantage of 800-volt DC technology and its anticipated adoption by 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 [38][41] Question: Competitive landscape against legacy technologies - Management indicated that Bloom Energy is increasingly operating in the same project size category as combined-cycle gas turbines, showcasing their competitive capabilities [45][48] Question: Life of fuel cell stacks and service margins - Management reported eight consecutive quarters of profitability in the service business, with improvements in fuel cell stack life contributing to this trend [50][51] Question: Supplier growth projections - Management acknowledged the enthusiasm from supply chain partners but clarified that they do not provide long-term guidance [56][57] Question: U.S. vs. international market opportunities - Management emphasized that while the U.S. market is currently the focus due to rapid growth, they plan to expand globally in the future [60][62] Question: Pricing strategy and leverage - Management stated that pricing is market-driven and that they do not foresee issues balancing growth and profitability [66][68] Question: Interest in potential M&A - Management indicated that while they can be selective about acquisitions, their primary focus remains on scaling their core product [69][70]

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]

Core Insights - The company reported a 6% growth in sales, a 100 basis point expansion in segment margins, and a 17% increase in adjusted EPS, achieving a free cash flow conversion of 102% [1][22][23] - The backlog reached a record $15 billion, reflecting sustained demand for the company's solutions [1][24][27] - The proprietary business system is evolving as a growth engine, combining 80/20 and Lean principles with digital and AI approaches to enhance customer focus and operational efficiency [2][5][6] Financial Performance - Fiscal 2025 was marked by strong execution, with organic revenue growth of 4% and adjusted EPS of $1.26, a 14% year-over-year increase [22][23] - The company ended the quarter with $400 million in available cash and a net debt ratio of 2.4 times, within the long-term target range [23] - Adjusted free cash flow improved by approximately $700 million to $2.5 billion for the year [23] Segment Performance - Orders grew 6% in the quarter, with notable growth in The Americas (9%) and EMEA (3%), while APAC saw a slight decline of 1% [24][25] - The Americas experienced a 3% organic sales increase, while EMEA delivered 9% organic growth [25][27] - The backlog grew 13%, with system backlog increasing by 14% and service backlog by 9% [27] Strategic Initiatives - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [2][28] - The focus remains on investing in organic growth, returning capital to shareholders, and pursuing selective acquisitions [29] - The proprietary business system aims to identify and remove barriers to growth, with over 700 colleagues engaged in priority areas [6][9] Market Position and Innovations - The company is strengthening its leadership in advanced thermal management, particularly for data centers, with new product launches like the coolant distribution unit [13][14][15] - The transition to liquid cooling technologies is expected to enhance the company's competitive advantage in the data center vertical [14][15][56] - A significant project in Zurich will provide green heat to the city, showcasing the company's commitment to sustainable solutions [16][17][18] Future Outlook - The company anticipates organic sales growth of approximately 3% for the first quarter and mid-single-digit growth for the full year [30][31] - Adjusted EPS is expected to be approximately $4.55 per share, reflecting over 20% growth [30] - The guidance for fiscal 2026 includes a target of 50% operating leverage and approximately 100% free cash flow conversion [30][31]

Financial Data and Key Metrics Changes - Fiscal 2025 saw a 6% increase in sales, with segment margins expanding by 100 basis points and adjusted EPS rising by 17% [8][24] - Free cash flow conversion reached 102%, reflecting disciplined execution and financial strength [8][24] - The company ended the quarter with approximately $400 million in available cash and net debt declined to 2.4 times compared to the prior year [24] Business Line Data and Key Metrics Changes - Organic revenue grew 4% in Q4, with segment margin expanding by 20 basis points to 18.8% [23] - Orders grew 6% in the quarter, with a notable 9% growth in the Americas, driven by data center strength [24] - EMEA orders increased by 3%, while APAC saw a small decline of 1% due to lower systems volumes [24] Market Data and Key Metrics Changes - The backlog expanded by 13% to a record $15 billion, with system backlog growing by 14% and service backlog by 9% [24] - In the Americas, sales were up 3% organically, while EMEA delivered 9% organic growth [25] - APAC sales declined 3% organically, primarily due to lower volumes in China [25] Company Strategy and Development Direction - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [8][27] - A proprietary business system is being implemented to enhance operational efficiency and customer-centricity [9][10] - The focus on technology innovation and sustainability is expected to drive future growth, particularly in advanced thermal management for data centers [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate evolving market conditions and achieve long-term growth commitments [30] - The guidance for fiscal 2026 includes expectations for mid-single-digit organic revenue growth and approximately 100% free cash flow conversion [29][30] - The company is focused on leveraging strengths in HVAC controls and digital solutions to capture significant opportunities [21][27] Other Important Information - The company is pursuing selective acquisitions to strengthen its portfolio while maintaining a strong balance sheet [28] - Recent leadership changes aim to enhance operational capabilities and align talent with strategic priorities [11] Q&A Session Summary Question: Can you walk through the 50% operating leverage target for 2026? - Management indicated that EMEA and APAC will be the main drivers of margin improvement, with overall operating leverage expected to be in the 50s or above [33] Question: What are the opportunities for cost and portfolio improvements? - Management highlighted ongoing efforts to reduce G&A costs and improve productivity through the proprietary business system, with a vibrant acquisition pipeline [34][38] Question: Can you provide details on the $250 million benefits related to operating leverage? - Management confirmed that the operating leverage is expected to improve over time, driven by productivity and responsible cost reductions [40][41] Question: What is the outlook for orders in the first quarter? - Management noted that the health of the pipeline continues to improve, with opportunities for growth in orders despite tough comparisons [51] Question: How does the company view the content opportunity in data centers? - Management emphasized that the demand for cooling solutions is increasing due to higher power requirements from newer chips, positioning the company well in the market [66] Question: Can you elaborate on the investments in technology for the aftermarket? - Management stated that technology investments are aimed at both gaining market share and improving margin profiles by lowering service costs [69]

Financial Data and Key Metrics Changes - Fiscal 2025 saw a 6% increase in sales, with segment margins expanding by 100 basis points and adjusted EPS rising by 17% [8][24] - Free cash flow conversion reached 102%, reflecting disciplined execution and financial strength [8][24] - The company ended the quarter with approximately $400 million in available cash and net debt declined to 2.4 times compared to the prior year [24] Business Line Data and Key Metrics Changes - Organic revenue grew 4% in Q4, with segment margin expanding 20 basis points to 18.8% [23] - Orders grew 6% in the quarter, with 9% growth in the Americas, supported by strength in data centers [24] - EMEA orders increased 3%, while APAC orders saw a small decline of 1% [24] Market Data and Key Metrics Changes - In the Americas, sales were up 3% organically, while EMEA delivered 9% organic growth [25] - APAC sales declined 3% organically, primarily due to lower volumes in China [25] - The backlog grew 13% to a record $15 billion, with system backlog growing 14% and service backlog growing 9% [26] Company Strategy and Development Direction - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [8][27] - The proprietary business system is being developed as a growth engine, focusing on customer-centric and continuous improvement [7][9] - The company aims to leverage strengths in HVAC controls and digital solutions to capture significant opportunities in decarbonization and mission-critical systems [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate evolving market conditions and maintain strong operational discipline [30] - The guidance for fiscal 2026 includes expectations for mid-single-digit organic revenue growth and approximately 100% free cash flow conversion [29][30] - Management highlighted the importance of technological innovation and sustainability in driving future growth [15][21] Other Important Information - The company is focused on strengthening leadership capabilities and aligning talent with strategic priorities [10] - Recent initiatives include a major announcement to provide green heat to Zurich through a waste incineration project, showcasing leadership in decarbonization [18][19] Q&A Session Summary Question: Can you walk through the 50% operating leverage target for 2026? - Management indicated that EMEA and APAC will be the main drivers of margin improvement, with overall operating leverage expected to be in the 50s or above [33] Question: Can you rank the opportunities going forward, including cost and portfolio opportunities? - Management emphasized ongoing efforts to reduce G&A costs and improve productivity, with a vibrant acquisition pipeline being pursued [34][38] Question: What are the drivers behind the decline in amortization? - The decline is attributed to impairments and portfolio actions, with further reductions possible through contemplated divestitures [49][50] Question: What is the outlook for orders in the first quarter? - Management expressed confidence in the health of the pipeline and the potential for order growth despite tough comparisons [51][52] Question: Can you elaborate on the margin improvement opportunities in EMEA and APAC? - Management noted that improvements will come from a combination of pricing discipline and ongoing deployment of the business system [62] Question: How does the transition from air cooling to liquid cooling affect content opportunities? - Management stated that the need for more cooling due to newer chips will increase the demand for chillers, maintaining strong opportunities in both air and liquid cooling solutions [66][67] Question: What is the strategic investment in Excelsius and its complementarity with the CDU? - The CDU launch is aimed at capturing significant market opportunities, while Excelsius anticipates future cooling needs for upcoming chip launches [94][95] Question: How is the company addressing accountability and KPIs? - Management is in the process of establishing enterprise KPIs to enhance accountability, with some tweaks to compensation structures being considered [84][85]