On Monday, FuelCell Energy, Inc. (NASDAQ:FCEL) reported fiscal second-quarter results that missed analyst expectations for both revenue and adjusted earnings, reflecting continued operational and market challenges.
FuelCell Energy Earnings And Revenue
Adjusted net loss was 53 cents per share, compared with the estimated 52-cent loss. Revenue fell 5% year over year to $35.589 million, below the $40.496 million forecast.
Net loss attributable to common stockholders was $78.7 million, or $1.45 per share, versus $38.8 million, or $1.79 per share, a year earlier. Adjusted EBITDA loss improved to $17.1 million from $19.3 million.
Revenue declined mainly due to lower service revenue, as no module exchanges occurred, and weaker generation revenue from reduced output during Groton Project repairs. Higher product and Advanced Technologies revenue partly offset the declines.
Segment Performance
Product revenue rose to $18 million from $13 million. Service revenue fell to $4.2 million from $8.1 million, while generation revenue decreased to $8.7 million from $12.1 million.
Advanced Technologies revenue increased to $4.7 million from $4.1 million.
Gross loss widened to $12.9 million from $9.4 million. Operating loss rose to $77.9 million from $35.8 million, partly due to a $42.6 million noncash impairment tied to Groton Project equipment upgrades.
During the earnings call, Chief Financial Officer Michael Bishop said the increase in operating expenses was largely driven by a $42.6 million noncash impairment charge tied to the Groton project.
He said the charge reflects FuelCell Energy’s decision to upgrade the 7.4-megawatt Groton Navy project with its current-generation 2.5-megawatt power blocks to improve reliability.
Bishop emphasized that the investment is aimed at delivering dependable baseload power for a critical U.S. government asset and noted that, excluding the impairment charge, the company’s core operating expenses declined year over year.
Backlog And Strategic Updates
Backlog totaled $1.14 billion as of April 30, down 9.9% from $1.26 billion a year earlier. Generation backlog was $928.5 million, service backlog $155.4 million, product backlog $36.1 million, and Advanced Technologies backlog $15.4 million.
FuelCell reported a second-quarter sales pipeline of 4 gigawatts, up 267% from the first quarter.
The company shipped its first two carbon capture modules to Rotterdam, Netherlands, as part of its collaboration with ExxonMobil Technology and Engineering Co.
ExxonMobil Technology and Engineering Co. is the central research, development, and engineering arm of Exxon Mobil Corporation (NYSE:XOM).
FuelCell launched a standardized 12.5 MW FuelCell Energy Block to reduce time-to-power for AI and data center projects in grid-constrained markets.
The company continued expanding its Torrington, Conn., factory, lifting its annual production capacity target to 500 MW from 350 MW. The project is expected to cost $200 million to $275 million and be completed within 24 months.
“This past quarter reflected strong commercial momentum and disciplined operational execution across the business, including continued progress on our data center strategy,” said Jason Few, President and CEO of FuelCell Energy.
FuelCell Energy Balance Sheet And Outlook
Cash, cash equivalents, and restricted cash totaled $440.9 million as of April 30, up from $341.8 million on October 31.
The company recorded $4.8 million in mark-to-market net losses on natural gas purchase contracts, classified as generation cost of sales.
FuelCell cited risks including economic uncertainty, interest rates, supply chain volatility, regulatory changes, commodity prices, government incentives, financing challenges, and bid-to-revenue conversion.
CEO Jason Few said FuelCell Energy’s project pipeline remains heavily weighted toward the fast-growing data center market. He noted that the company is pursuing opportunities across data centers, distributed generation, utilities, and industrial applications in both domestic and international markets, with potential data center customers accounting for about 89% of the overall pipeline.
FCEL Price Action: FuelCell Energy shares were up 5.28% at $18.24 at the time of publication on Monday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
