FuelCell Energy Q1 2025 Earnings Report

FuelCell Energy EPS Results

• Actual EPS: -$1.42
• Consensus EPS: -$1.52
• Beat/Miss: Beat by +$0.10
• One Year Ago EPS: -$1.25

FuelCell Energy Revenue Results

• Actual Revenue: $19.00 million
• Expected Revenue: $35.37 million
• Beat/Miss: Missed by -$16.37 million
• YoY Revenue Growth: N/A

FuelCell Energy Announcement Details

• Quarter: Q1 2025
• Date: 3/11/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, March 11, 2025
• Conference Call Time: 10:00AM ET

FuelCell Energy (NASDAQ:FCEL) (NASDAQ: FCEL) is a publicly traded company that designs, manufactures and operates turnkey molten carbonate fuel cell power plants. These stationary, on-site energy solutions generate electricity and heat through an electrochemical process that combines natural gas or biogas with oxygen, producing power with lower greenhouse gas emissions than traditional fossil fuel-based generation. The company’s fuel cell technology is engineered for continuous, baseload operation and can be integrated into microgrid architectures and industrial power systems to provide reliable, around-the-clock energy.

The company’s core product suite, marketed under the SureSource brand, encompasses both power generation and integrated carbon capture or hydrogen production capabilities. In addition to selling and leasing fuel cell power plants, FuelCell Energy offers long-term service agreements that include remote monitoring, preventative maintenance and on-site support. This full-lifecycle approach positions the company as a single source for clean energy projects in sectors such as wastewater treatment, universities, data centers and commercial facilities.

Founded in 1969 and headquartered in Danbury, Connecticut, FuelCell Energy has deployed projects across North America, Europe and Asia. Its global footprint includes multiple operational sites in the United States and South Korea, where strategic partnerships and joint ventures have accelerated commercial adoption of carbonate fuel cell technology. With several decades of research and development under its belt, the company continues to refine its platform to achieve higher efficiency, lower costs and expanded use cases—paving the way for broader decarbonization of the power sector.

FuelCell Energy Q1 2025 Earnings Call Transcript

Key Takeaways

• FuelCell Energy executed a major MOU with Diversified Energy and Tesiac to develop up to 360 MW of baseload power for AI and high-performance data centers, spearheading entry into a high-growth market.
• The joint development agreement with Malaysia Marine and Heavy Engineering targets co-development of large-scale hydrogen production systems across Asia, New Zealand and Australia, extending the company’s global reach.
• Focused cost discipline drove Q1 operating expenses down, narrowing the operating loss to $32.9 million from $42.5 million year-over-year, with a target of ~15% cost reduction in fiscal 2025 versus 2024.
• Backlog climbed to $1.31 billion as of 01/31/2025 (up from $1.03 billion), led by module deliveries under the GGE LTSA and a 20-year, 7.4 MW PPA in Hartford, Connecticut.
• Net loss per share increased to $1.42 from $1.37 year-over-year, driven by share issuances and lower non-controlling interest offsets, underscoring ongoing dilution effects despite improved operational performance.

Presentation

[Operator]

Thank you for standing by, and welcome to the FuelCell Energy First Quarter of Fiscal 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press "star" followed by the number one on your telephone keypad. If you would like to withdraw your question, please press "star" one again. Thank you. I would now like to turn the conference over to Tom Gelston. You may begin.

[Tom Gelston, SVP of Finance and Investor Relations at FuelCell Energy]

Thank you. Good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded. This morning, FuelCell Energy released our financial results for the first quarter of fiscal year 2025, and our earnings press release is available in the investors' section of our website at www.fuelcellenergy.com. Consistent with our practice, in addition to this call and our earnings press release, we have posted a slide presentation on our website. This webcast is being recorded and will be available for replay on our website approximately two hours after we conclude the call. Before we begin, please note that some of the information that you will hear or be provided with today will consist of forward-looking statements within the meaning of the Securities Exchange Act of 1934.

[Tom Gelston, SVP of Finance and Investor Relations at FuelCell Energy]

Such statements express our expectations, beliefs, and intentions regarding the future and include, without limitation, statements with respect to our anticipated financial results, our plans and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology, and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the safe harbor statement in the slide presentation and in our filings with the U.S. Securities and Exchange Commission, particularly the risk factor section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.

[Tom Gelston, SVP of Finance and Investor Relations at FuelCell Energy]

During the course of this call, we will be discussing certain non-GAAP financial measures, and we refer you to our website and to our earnings press release and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website under investors. For our call today, I am joined by Jason Few, FuelCell Energy's President and Chief Executive Officer, and Mike Bishop, our Executive Vice President, Chief Financial Officer, and Treasurer. Following our prepared remarks, we will be available to take your questions and be joined by other members of the leadership team. I will now like to hand the call over to Jason for opening remarks. Jason.

[Jason Few, President and CEO at FuelCell Energy]

Thank you, Tom, and good morning, everyone. Thank you for joining us on our call today. In the first fiscal quarter of 2025, our focus on cost discipline and moving toward profitability began to deliver results. By launching our global restructuring plan at the start of the first fiscal quarter, we successfully reduced expenses while driving revenue growth, significantly narrowing our operating losses compared to the same period last year. We have strategically right-sized our business and aligned our resources to seize attractive growth opportunities, including the newly announced MOU for our data center partnership with Diversified Energy and our joint development agreement with Malaysia Marine and Heavy Engineering. We believe the first fiscal quarter of 2025 marks our low watermark for revenue, setting the stage for growth as we increase our module deliveries to Gyeonggi Green Energy, or GGE, according to our production and shipment schedule.

[Jason Few, President and CEO at FuelCell Energy]

While our business is evolving, our purpose has not changed. FuelCell Energy remains committed to enabling a world powered by clean energy. Whether you are new to our story or have followed us for many quarters and years, we want you to know that this purpose remains the cornerstone of our business. Our core value proposition enables commercial, industrial, and utility customers to integrate our technology platform seamlessly, no need to overhaul their business operations or face the risk of power interruptions from intermittent technologies. Our aim is to simply help them operate more reliably, efficiently, and affordably, all while reducing emissions and preserving air quality. It's that straightforward. Moving to slide four, I'd like to provide an overview of our five key messages for the quarter. First, following the end of the quarter, we took a major step forward in executing our strategic vision.

[Jason Few, President and CEO at FuelCell Energy]

We announced an exciting partnership with Diversified Energy and TESIAC, with the goal of directly addressing the critical energy demands of AI and high-performance computing data centers. Through this collaboration, we plan to deliver up to 360 megawatts of electricity to key locations in Virginia, West Virginia, and Kentucky, which we believe will position FuelCell Energy at the forefront of powering the digital economy in this area. You've heard me talk about data centers. Massive opportunity data centers represent for FuelCell Energy, and this partnership is the first step toward delivering on that vision. When fully implemented, we expect this initiative to be accretive to our business while also serving as a blueprint for the future of energy, where existing abundant natural resources and innovative clean energy technologies work in tandem to meet the rapidly growing energy demands and deliver large-scale distributed behind-the-meter power deployments in this high-growth sector.

[Jason Few, President and CEO at FuelCell Energy]

We believe that bringing together FuelCell Energy and Diversified Energy in this way is a powerful demonstration of the AND strategy, a forward-thinking approach that recognizes we do not have to choose between reliable baseload power or clean energy solutions. We can pursue both. Additionally, we expanded our global presence by signing a joint development agreement with Malaysia Marine and Heavy Engineering, pursuant to which we plan to collaborate on the co-development of large-scale hydrogen production systems and technologies across Asia, New Zealand, and Australia. We believe that this agreement will open new doors for FuelCell Energy to scale its clean energy solutions on an international level.

[Jason Few, President and CEO at FuelCell Energy]

While these relationships are in their early stages, we believe they will drive growth, enhance our competitive position, and create long-term value. We also announced a new partnership with the City of Hartford, reinforcing our commitment to delivering reliable renewable energy at utility scale.

[Jason Few, President and CEO at FuelCell Energy]

FuelCell Energy will build a 7.4 megawatt fuel cell power platform to provide Class I renewable baseload power to the local grid in direct support of Connecticut's renewable portfolio standard. We are proud to expand our work in our home state of Connecticut. Alongside our projects in places like Bridgeport and Derby, this new development will ensure that thousands of residential and business customers across Connecticut benefit from resilient, sustainable power. Across the country, we are working to advance municipal energy solutions, including our collaboration with Sacramento Area Sewer District and Ameresco, where construction is well underway on our biofuel-powered microgrid project. Third, we have accelerated progress on our advanced demonstration projects.

[Jason Few, President and CEO at FuelCell Energy]

Our collaboration with ExxonMobil Low Carbon Solutions and our joint development work with ExxonMobil Technology and Engineering Company, or EMTEC, to pilot carbon capture technology at the Esso Nederland, Rotterdam manufacturing complex has reached a pivotal stage, and we are poised to move into the second phase of our commercialization for this project in the coming months following successful demonstration. In parallel, we successfully delivered our solid oxide electrolysis cell system to the U.S. Department of Energy, Idaho National Laboratory, or INL. We are confident that this testing phase will further validate the commercial potential of our solid oxide solutions. As a reminder, this project, partially funded by the 2020 U.S. Department of Energy Office of Nuclear Energy Award, is exploring how hydrogen production operations can help nuclear plants diversify and boost profitability by seamlessly switching between electricity production and hydrogen production.

[Jason Few, President and CEO at FuelCell Energy]

As the profile of nuclear power grows as a viable clean energy option, we believe our commercialization work at INL will position us to serve this expanding market effectively. Fourth, we continue to execute on developing modules for GGE's fuel cell power platform at the Hwaseong Baran industrial complex, the world's largest fuel cell power platform in South Korea. We are building an inventory of modules, which we anticipate shipping over the balance of the year. This partnership has been successful for FuelCell Energy and GGE, and we expect that it will be an important driver of our results through the remainder of fiscal year 2025. Finally, we are demonstrating strong progress in cost management. Our cost and operating expenses have dropped significantly compared to the same period last year, and our loss from operations has improved both sequentially and year over year.

[Jason Few, President and CEO at FuelCell Energy]

We believe we are on track to reduce operating costs by approximately 15% in fiscal year 2025 versus fiscal year 2024, and we remain laser-focused on aligning cost and driving concrete progress toward profitability. Moving to slide five, I wanted to update you on how this quarter aligns with our powerhouse business strategy. I'd like to emphasize the focus pillar we refined at the start of the fiscal year. Designed to advance our core technologies and safeguard our competitive position in the AND energy marketplace, we believe the results you see this quarter—cost control, a steadfast commitment to our established technologies, and targeted growth opportunities in our highest potential areas—are clear indicators that our focus is paying off. This disciplined strategy not only underscores our confidence in our direction, but also sets the stage for scaling our existing platform and driving future innovation.

[Jason Few, President and CEO at FuelCell Energy]

On slide seven, I'd like to expand on our executed MOU partnership with Diversified Energy and Tessiak in more detail, highlighting our collective aspirations. Through this collaboration, we have agreed to establish an acquisition and development company that will be focused on delivering clean, reliable power from natural gas and coal-mine methane to meet the increasing demand for distributed and resilient data centers. We believe that utilizing coal-mine methane will not only showcase the fuel flexibility capabilities of our platform, but will also deliver an environmental benefit by reducing coal emissions and providing a net-zero baseload data center solution without compromising resilience. Through our planned collaboration, Diversified Energy expected to supply midstream infrastructure, low-carbon natural gas, and carbon-neutral coal-mine methane. FuelCell Energy plans to deploy its FuelCell Energy platforms to deliver distributed, high-efficiency baseload power generation, emissions management, and thermal energy solutions, including electricity and waste heat-driven absorption chilling.

[Jason Few, President and CEO at FuelCell Energy]

Tessiak expects to leverage its world-class investment and development expertise to secure competitive financing options to accelerate deployment while maintaining long-term profitability and scalability. Turning to slide eight, here you will see a graphical representation of how the parties to this memorandum of understanding envision working together in pursuit of data center opportunities. With this partnership, we bring a bundle of fuel, midstream infrastructure, distributed power generation, and financing as a compelling proof point. We anticipate our discussions with data center owners, investors, and developers will gain momentum. We believe the macro tailwinds are firmly on our side as technology companies, hyperscalers, and private capital investors are poised to invest tens of billions of dollars in data center development over the coming years.

[Jason Few, President and CEO at FuelCell Energy]

This capital is expected to be directed toward meeting the growing AI services demand, which requires gigawatts of energy that traditional grid sources simply cannot deliver immediately. FuelCell Energy's microgrid capabilities are ready to close the power gap to provide reliable baseload power for this rapidly expanding sector. On slide nine, I'd like to provide further insight into our recently announced joint development agreement with MMHE. Building on the MOU signed in February 2023, we believe this JDA marks a pivotal step forward for both companies, fueled by our shared vision of making e-fuels and decarbonizing petrochemicals with clean hydrogen production easily accessible and viable. Under the terms of the JDA, we will unite FuelCell Energy's advanced solid oxide electrolyzer technology with MMHE's expertise in large-scale fabrication to develop modular solutions for the rapid deployment of commercial hydrogen production.

[Jason Few, President and CEO at FuelCell Energy]

In tandem with this initiative, we are collaborating with Malaysia Marine and Heavy Engineering on a FuelCell Energy contract award for a detailed feasibility study of a low-carbon fuel production facility in Malaysia. This agreement not only expands our footprint in Southeast Asia and Australia, but also reinforces our strategic commitment to advancing a practical AND energy addition. Aside from our groundbreaking data center partnership and our strategic joint development agreement with MMHE, our ongoing product development initiatives are advancing at rapid pace. Module production for our carbon capture and storage project with EMTEC at the Port of Rotterdam is complete, and they now await commissioning, with shipment of the modules expected in mid-2025. We are entering an exciting new phase of proving the viability of commercializing this critical and differential direct point source capture technology.

[Jason Few, President and CEO at FuelCell Energy]

We have completed construction of our carbon recovery plant in Torrington, Connecticut, and commissioning along with preliminary testing is currently underway. Having a working demonstration platform is an essential step that will allow prospective customers to sample the captured CO2 to validate for use in their products or processing. Our first at-scale electrolyzer unit arrived at Idaho National Laboratory and is now being installed for demonstration, marking a significant milestone in our technology development. Even as we sharpen our focus on cost control, we are seizing growth opportunities by executing our projects with the rigor our customers expect. To sum up our quarter in one word: focus. This newly strengthened pillar of our powerhouse strategy, evidenced by our global restructuring, rigorous cross-discipline, and focus on targeted growth opportunities, is already delivering positive outcomes for FuelCell Energy. It's visible in our lower expenses. It's evident in our narrowing operating losses.

[Jason Few, President and CEO at FuelCell Energy]

It's reflected in the initial stage of our data center partnership following months of dedicated groundwork. It's encapsulated in our new JDA with MMHE. It's at the core of our push for operational excellence and our commitment to scaling and innovating for the future. I am confident that you will continue to witness these positive trends throughout the year. Our goal is to ensure this quarter stands as the low-water revenue mark of fiscal year 2025, paving the way for increased product sales, enhanced service revenue, improved generation fleet efficiency, and continued progress in commercializing the future of clean energy as practical and not demanding change. With that, I'd like to turn the call over to our CFO, Mike Bishop.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Thank you, Jason. I would like to begin by providing an update on our global restructuring, which we announced in November.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

As Jason stated, we expect to reduce operating costs by approximately 15% in fiscal year 2025 compared with fiscal year 2024. Given the operational changes we made in our first quarter, we believe we are on track to achieve that goal. In addition to reducing operating costs in fiscal year 2025, we have good visibility into contracted revenue for the rest of this fiscal year, including revenues expected to be recognized upon delivery of replacement modules to GGE. As a result, we believe that our first quarter revenue represents the low-water mark for revenue this fiscal year, and we expect to see a meaningful improvement to our revenues for fiscal year 2025 as compared to fiscal year 2024. For the first quarter of fiscal year 2025, we reported total revenues of $19 million compared to revenues of $16.7 million in the prior year quarter.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

We reported a loss from operations in the quarter of $32.9 million compared to $42.5 million in the first quarter of fiscal year 2024. The net loss attributable to common stockholders in the quarter was $29.1 million compared to a net loss to common stockholders of $20.6 million in the first quarter of fiscal year 2024. The resulting net loss per share attributable to common stockholders in the first quarter of fiscal year 2025 was $1.42 compared to $1.37 in the first quarter of fiscal year 2024. The increase in net loss per share is primarily due to the decreased net loss attributable to non-controlling interest during the three months ended January 31, 2025, partially offset by a decrease in loss from operations.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

The net loss per common share for the three months ended January 31st, 2025 benefited from the higher number of weighted average shares outstanding due to share issuances since January 31st, 2024. The net loss per common share for the first quarter of fiscal year 2024 benefited from the tax equity financing of the Derby, Connecticut projects. Adjusted EBITDA totaled negative $21.1 million in the first quarter of fiscal year 2025 compared to adjusted EBITDA of negative $29.1 million in the first quarter of fiscal year 2024. As of January 31st, 2025, the company had a cash, restricted cash, cash equivalents, and short-term investment position of over $270 million. Next, on slide 13, you will see additional details on our financial performance and backlog. In the graph on the left-hand side, revenue is broken down by category.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Product revenues were $0.1 million compared to no product revenue recognized for the comparable prior year period. As I mentioned earlier, we do expect increases in this revenue line in 2025 as we execute on the commissioning of replacement modules for GGE. Service agreement revenues increased to $1.8 million from $1.6 million. The increase in service agreement revenues during the three months ended January 31, 2025 was primarily driven by revenue recognized under the company's long-term service agreement, or LTSA, with GGE for its 58.8 megawatt fuel cell power plant platform in Korea. There were no module exchanges during either period presented. Generation revenues increased 8.1% to $11.3 million from $10.5 million. Advanced technology contract revenues increased to $5.7 million from $4.6 million. Looking at the right-hand side of the slide, I will walk through the changes in gross loss and operating expenses.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Gross loss for the first quarter of fiscal year 2025 totaled $5.2 million compared to a gross loss of $11.7 million in the comparable prior year quarter. The decrease in gross loss for the first quarter of fiscal year 2025 related to the decrease in cost of generation revenues. The overall decrease in cost of generation revenues was primarily related to a reduction in the expense construction costs related to the Toyota project, which were $0.3 million in the first quarter of 2025 compared to $3.5 million in the first quarter of fiscal 2024. The decrease in cost of generation revenues also reflects the fact that the company reported a derivative gain of $1.8 million related to natural gas purchase contracts in Q1 2025 compared to a derivative loss of $1.9 million in Q1 of 2024.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

During the quarter, we made steady progress towards our goal of reducing operating expenses by 15% in fiscal year 2025. Operating expenses for the first quarter of fiscal 2025 decreased to $27.6 million from $30.8 million in the first quarter of fiscal 2024. Administrative and selling expenses decreased to $15 million during the first quarter of fiscal 2025 from $16.4 million in the first quarter of fiscal 2024. The decrease in administrative and selling expenses is primarily due to lower compensation expense as a result of the recent restructuring actions. Research and development expenses decreased to $11.1 million during Q1 2025 compared to $14.4 million in the comparable prior year period.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

The decrease in research and development expenses is primarily due to a reduction in spending on the company's ongoing commercial development efforts related to our solid oxide power generation and electrolysis platforms and carbon separation and recovery solutions compared to the comparable prior year period, as well as a shift in engineering resource allocation towards supporting funded advanced technology activities. On the bottom right of the slide, you will see the backlog increased to $1.31 billion as of January 31, 2025, compared to $1.03 billion as of January 31, 2024. The increase in backlog reflects the LTSA entered into with GGE during the third quarter of fiscal 2024 and the 20-year power purchase agreement for a 7.4 megawatt fuel cell power plant that the company expects to build in Hartford, Connecticut, which was added to backlog in the first quarter of fiscal 2025.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Backlog for the GGE LTSA has been allocated between product backlog and service backlog. As a reminder, product backlog is being and will continue to be recognized as revenue as the company completes commissioning of the replacement modules. Under the GGE LTSA, 30 replacement fuel cell modules are expected to be commissioned throughout the course of calendar year 2025, and the remaining 6 replacement fuel cell modules are expected to be commissioned in calendar year 2026. Service backlog is being and will continue to be recognized as revenue as the company performs service at the GGE site over the term of the agreement. On slide 14 is an update on our liquidity position. As I mentioned earlier, as of January 31, 2025, we had cash, restricted cash, cash equivalents, and short-term investments of $270.7 million.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

During the quarter, we utilized short-term cash to build an inventory of modules to be shipped to Korea under our LTSA with GGE. We expect to recognize revenue from these module shipments during fiscal year 2025. As previously disclosed, in the fourth quarter of fiscal year 2024, we were able to arrange working capital financing with the Export-Import Bank of the United States to support certain obligations under the GGE LTSA. We remain focused on attracting similar supportive capital structures as we execute on our growth strategy. We also built project inventory as part of our safe harbor strategy for certain U.S. project opportunities.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

During the three months ended January 31, 2025, approximately 0.7 million shares of the company's common stock were sold under the company's amended open market sale agreement at an average sale price of $9.19 per share, resulting in net proceeds to the company of approximately $5.9 million. In closing, I am pleased with the initial results of our strategic efforts to prioritize our commercially available technologies while reducing cost. We are thrilled with the just-announced collaboration with Diversified Energy and Tessiak, and we believe that FuelCell Energy is well-positioned with available capacity and resources to execute on near-term data center opportunities. We will continue to take a highly disciplined approach to managing cash and allocating capital while pursuing our growth objectives. I will now turn the call over to the operator to begin Q&A.

[Operator]

Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press Star 1 on your cell phone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star 1 again. We ask that you please limit yourself to asking one question and one follow-up. Once again, please press Star 1 to join the queue. Your first question comes from the line of Dushyant Ailani. Please go ahead.

[Dushyant Ailani, Senior Equity Research Analyst at Jefferies]

Hey, guys. Thanks for taking my question. We'd love to learn more about the Diversified Energy deal. Maybe specifically, if you could talk a little bit about if the data centers are greenfield, brownfield, how will the financing arrangement work, and in terms of permitting, if there's any permitting required for the infrastructure pipeline build out or if that's already laid out. We'd love to just learn more about that. Thank you.

[Jason Few, President and CEO at FuelCell Energy]

Dushyant, good morning, and thank you for the question, and thank you for joining the call. Yeah. The partnership with Diversified Energy is really focused on leveraging where Diversified Energy has existing gas assets and availability. Even in cases where there might be a need to provide additional midstream infrastructure, I really think about it as kind of gas distribution infrastructure. The right-of-ways and access to do that, we feel very confident about executing on that pretty quickly. The deals that we are focused on cut across both greenfield and brownfield opportunities where there's existing data center operation and incremental capacity is needed. Having access to that gas and then certainly our ability to deliver distributed platforms to meet those power needs, we think positions us quite well to satisfy the requirements of those data center customers.

[Jason Few, President and CEO at FuelCell Energy]

From a financing standpoint, the work that we're doing with Tessiak is bringing together financial partners as we have been able to do and successfully demonstrate corporately. That goes across not only project financing but tax equity and certainly backed leverage debt to support these projects. We feel pretty confident around the financing structure. The final thing I would say is we really think about this as being about as close to kind of data center in a box as you can get from being able to bring gas and supply distributed power generation, land access, and then, of course, the data center component to meet their power demands.

[Jason Few, President and CEO at FuelCell Energy]

From a permitting standpoint, that's one big advantage of fuel cells, right, is that the fact that we can leverage fuel but we don't combust that fuel makes permitting a lot easier for our technologies because we don't run into air permit issues because we don't combust or we're not producing SOx, NOx, and other particulates. That's even in tough markets like California where we enjoy those benefits. We feel really good about our position here. The fuel flexibility of our platform to not only leverage natural gas but to leverage the coal-mine methane, and the ability that we have to deliver steam for absorption chilling, really puts together a very nice compelling package for those data center customers.

[Dushyant Ailani, Senior Equity Research Analyst at Jefferies]

Awesome. Just one final one for me. If you could kind of talk about when the initial kind of talk started, how long it took to kind of ink the deal, and then how do we think about just going forward similar deals for fuel cell?

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Good morning, Dushyant. It's Mike. I will take that one. As we've been talking about here, really the past year, the company is ultra-focused on cracking into the data center market. We've been doing a fair amount of development with a variety of partners here in the U.S. and really leveraging our existing platforms. If you look at what we have installed today in the U.S., utility-scale platforms of 15 megawatts, for instance, operating in Bridgeport. And then you look at what we have globally, the largest fuel cell platform in the world. In Korea, 58 megawatts, which we're executing a repowering on right now.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

We believe we have the experience around existing installed base as well as the available capacity. Jason mentioned time to power, right? We have existing capacity in our Torrington plant of up to 200 megawatts. Today, we're operating in the 30-ish megawatt range. We have the capability to be able to ramp as orders are inked to be able to meet that demand. To be direct, we've been in discussions here for a while and are really pleased with this partnership.

[Jason Few, President and CEO at FuelCell Energy]

I would just add to that in terms of our interest and activity relative to creating similar arrangements with suppliers of gas to leverage our distributed platform and land access to meet data center opportunities is an ongoing effort.

[Dushyant Ailani, Senior Equity Research Analyst at Jefferies]

Understood. Thank you.

[Jason Few, President and CEO at FuelCell Energy]

Thank you.

[Operator]

Your next question comes from the line of George Gianarikas with Canaccord Genuity. Please go ahead.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity]

Hi, everyone. Good morning, and thank you for taking my questions.

[Jason Few, President and CEO at FuelCell Energy]

Good morning, George.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity]

I'd like to focus a little bit on the Tri-gen project and ask about any updates there and also whether you're seeing interest from other customers in a

[Jason Few, President and CEO at FuelCell Energy]

similar project. Thank you. George, thank you for the question. As you know, at least here domestically, kind of clean hydrogen, if you will, in the transportation sector has probably been pushed a little bit to the right. We continue to have very interesting conversations with our existing customer as well as other customers about future opportunities around that platform and leveraging hydrogen. I think some of the uncertainty and lack of clarity around what's going to happen relative to things like the PTC and other things are certainly putting a bit of a slowdown on those opportunities, at least domestically.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity]

Thank you. Maybe just to understand a little bit about the revenue this year and beyond and some of the cost reductions you've put in place. Can you help us just sort of compartmentalize a run rate base of revenue that will take you to EBITDA positive just so we can for our models? Thank you.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Sure, George. This is Mike. I will take that question. As far as revenue for this fiscal year, as we mentioned in the prepared remarks, we really see Q1 as the low watermark for revenue for the year. We have been building inventory for the GGE project. We are shipping that inventory to Korea, which will result in increasing revenue over the course of the fiscal year. As we mentioned, around backlog, we have 30 modules which will be delivered and installed in this calendar year.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

We have not put out exact dates of when those modules are installed as it is not all in the company's control. However, we are very comfortable in saying there will be a meaningful increase year over year as a result of these deliveries to Korea, and we are executing on those now. As far as the path to EBITDA positive at this run rate and with the investment cycle that we are in, particularly around solid oxide, the company is not EBITDA positive as the solid oxide technology gets closer to commercialization. As we are able to take advantage of the available capacity in our factory in Torrington, that will allow the company to increase revenue and increase cash flow from that revenue and get the company to EBITDA positive. We have not obviously put out exact dates around that.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

It's really order-dependent in continuing to fill up the backlog and increase our run rate in the Torrington factory.

[George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity]

Thanks.

[Operator]

Your next question comes from the line of Ryan Pfingst with B. Riley Securities. Please go ahead.

[Ryan Pfingst, Senior Equity Research Analyst at B. Riley Securities]

Yes. Thanks for taking my questions. Could you talk about the timeline for the recently announced Hartford project and maybe any other details related to PPA terms that you're able to share?

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Sure, Ryan. Good morning. This is Mike. As far as the Hartford project, we're really excited about getting the Hartford project back in backlog. For those that have followed the company for a while, this was actually a project award that we had several years ago. It came out of backlog as it proved to be uneconomic in the site that it was originally sited at.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

We had essentially spent the last year plus in working with our counterparts, the two Connecticut utilities on that power purchase agreement, as well as Connecticut regulators to change the site to another location in Hartford, Connecticut, which made it economic. As a result, that project is back in backlog, and we're in advanced development around that project. We expect it to be constructed in the 2026 timeframe, and we'll provide further updates around this project as the development cycle continues. I would just add that it is a firm 20-year PPA commitment on that project. Its $160 million in backlog was added. We also have no gas exposure on that project as well.

[Ryan Pfingst, Senior Equity Research Analyst at B. Riley Securities]

Appreciate that detail. Can you comment on the impact you've seen on the market broadly under the new U.S. administration and if there's been any hesitancy to project development with some uncertainty around tax credits or other incentives?

[Jason Few, President and CEO at FuelCell Energy]

Yeah, Ryan. Like I just mentioned on Tri-gen, for example, some of the lack of clarity or concern around PTC, we've definitely seen some of that. As we think about our business and we think about the current administration, we think that electricity clearly plays a key role in energy dominance. The fact that our platform is fuel-flexible and can leverage natural gas and biofuels and coal-mine methane and other forms of fuel, we think we're really well positioned to take advantage of the things that this new administration is focused on. We also think that there's good activity right now going on around kind of tax legislation.

[Jason Few, President and CEO at FuelCell Energy]

We think that there's some optimism around our view on the ITC and what's going to happen relative to ITC or the legacy ITC as being something that comes back as a benefit for us. We feel pretty confident about where things are headed. There is a level of uncertainty in the market. You are seeing people being very thoughtful about how they want to move forward on projects. We continue to see strong customer engagement to move forward on, and particularly around time to power, as I like to really think about it, time to revenue opportunities.

[Ryan Pfingst, Senior Equity Research Analyst at B. Riley Securities]

Appreciate it. Thanks, guys.

[Jason Few, President and CEO at FuelCell Energy]

Thank you.

[Operator]

Your next question comes from the line of Jeffrey Campbell with Seaport Research Partners. Please go ahead.

[Jeffrey Campbell, Senior Analyst at Seaport Research Partners]

Good morning, and congratulations on the cost reduction efforts starting to show some teeth. That's good. I'll ask my two questions. I'll go back to the JD area again. First, I was wondering, how's FuelCell going to be compensated for its participation in the projects? Meaning, will this mainly be for unit sales, or will you have some sort of an enduring cash flow stream from a given project?

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Good morning, Jeff. I'll take that. Yeah, all of the above. Really, as Jason went through, what this partnership allows us is the ability to provide our technology in a meaningful way in a short period of time as we start to close these orders. Certainly, we will get product sales through that opportunity. Of course, with every product sale that we do, there's a long-term service opportunity. These data center opportunities will likely be 20-plus-year opportunities. Long-term revenue stream coming from that.

[Mike Bishop, EVP, CFO, and Treasurer at FuelCell Energy]

Of course, participating in a partnership like this in a joint venture type acquisition development company, certainly, we would expect there to be long-term cash flows from that arrangement that the company could participate in as an investor.

[Jeffrey Campbell, Senior Analyst at Seaport Research Partners]

Okay. Great. Thank you. This one's kind of a multi-part but hopefully not too confusing. The JDA press release yesterday mentioned net zero power, and it also noted emissions capture-ready technology to reduce a customer's carbon footprint, setting a new industry standard. I was wondering, first, can you add some color on what this technology refers to and if it would be supplied by FuelCell? Second, is this technology interval to the net zero status for a JDA project?

[Jason Few, President and CEO at FuelCell Energy]

Yeah. This is Jason. Great question. When you think about our ability to leverage the coal-methane fuel and the fact that these projects would be operating in the PJM market, we have an opportunity to leverage the fact that that's a net zero fuel, if you will, or carbon-negative fuel. The benefit that our platform can operate on that fuel gives us the ability to deliver a net zero solution relative to these data center opportunities when we're using the coal mine methane. With respect to the ability to deploy carbon recovery technology, that's our ability to recover carbon from the fuel that we would use. Let's take the net gas scenario. That's just to point our carbon recovery technology into these opportunities if that's the customer's desire. You really build maybe three potential opportunities off of that around the CO2.

[Jason Few, President and CEO at FuelCell Energy]

One would clearly be if we had the ability to capture the CO2 and then sequester the CO2. If you look at where we're talking about some of these projects around the Appalachian Basin and that whole area, that's certainly an opportunity because you've got the geological formations to support that. The second opportunity around that could be to capture that carbon and clean it up and purify it and potentially sell it to customers in an area that may need it for food and beverage applications. The third one is potentially to use that CO2 or add that to, on the production side, use that CO2 potentially even in EOR or enhanced oil recovery applications. A lot of opportunity can be spun from the fact that we can deliver CO2 as a benefit from these projects.

[Jeffrey Campbell, Senior Analyst at Seaport Research Partners]

To be clear, the idea is let's get the project up first, and then these ancillary opportunities will be taken on as they present themselves.

[Jason Few, President and CEO at FuelCell Energy]

Absolutely. Time to revenue.

[Jeffrey Campbell, Senior Analyst at Seaport Research Partners]

All right. Thanks very much. I appreciate it.

[Jason Few, President and CEO at FuelCell Energy]

Thank you.

[Operator]

Once again, if you would like to ask a question, simply press the star followed by the number one on your telephone keypad. Your next question comes from the line of Noel Parks with Tuohy Brothers. Please go ahead.

[Noel Parks, Managing Director of CleanTech and E&P at Tuohy Brothers]

Hi. Good morning. Just had a couple. I was thinking that when it comes to fuel cells' experience in particular with multiple input sources, particularly, I think with more experience using biogas as a source than competing fuel cell companies. As you're talking about potential data center locations with potential customers, is sort of your lead in biofuels a topic that comes up a lot?

[Jason Few, President and CEO at FuelCell Energy]

There was a little bit of a breakup there, but I think your question was whether or not biofuels comes up as a topic related to data center opportunities. Is that correct?

[Noel Parks, Managing Director of CleanTech and E&P at Tuohy Brothers]

Sure. And given your experience with that in particular.

[Jason Few, President and CEO at FuelCell Energy]

Yeah. One big advantage that we have on biofuels is the fact that we can use direct biofuels. We don't need biofuels to be upgraded to pipeline quality gas. That gas never needs to see its way into a common carrier pipeline. We can co-locate at a biofuel source or an anaerobic digester source and then directly utilize that fuel to deliver power. Where that fuel source is available, that is certainly an interest and certainly something that we talk to customers about as one way to deliver a net zero or a negative carbon solution around a data center.

[Jason Few, President and CEO at FuelCell Energy]

The upside of that is the fact that you're doing that with a base load power solution and delivering a negative or net zero carbon intensity score, which is certainly something that a lot of the data center suppliers are focused on.

[Noel Parks, Managing Director of CleanTech and E&P at Tuohy Brothers]

Right. Right. It was on my mind as a sort of a differentiating advantage. I just wonder, on the hydrogen front, I'm wondering, are you seeing much discussion or interest in sort of clean hydrogen, in particular from the energy storage standpoint? I just wondered if that's something that's been on the radar screen maybe a little more persistently.

[Mark Feasel, EVP and CCO at FuelCell Energy]

Yeah. Hi. This is Mark Feasel. We are in conversations and get into conversations around utilization of hydrogen for different use cases. Energy storage is one of those topics.

[Mark Feasel, EVP and CCO at FuelCell Energy]

A function of that is how and where can it be produced, and then how can it be used once it's produced? Playing into that equation is, as Jason's talked about, incentives and things here in North America associated with the production of hydrogen, and then how to monetize that on power grids with prices. It is very locational in terms of looking at those two aspects around the world.

[Noel Parks, Managing Director of CleanTech and E&P at Tuohy Brothers]

Great. Fair enough. Thanks a lot.

[Jason Few, President and CEO at FuelCell Energy]

Thank you.

[Operator]

I'm showing no further questions at this time. I would like to turn it back to Jason Few for closing remarks.

[Jason Few, President and CEO at FuelCell Energy]

Thank you, Proela. Thank you all for listening in today. We have an exciting rest of 2025 ahead, and I hope you will stay tuned through the remainder of the year to see what we have in store. Hope that everyone has a great day, and thank you for joining.

[Operator]

Thank you. This concludes today's conference call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Mark Feasel, EVP and CCO
• Mike Bishop, EVP, CFO, and Treasurer
• Jason Few, President and CEO
• Tom Gelston, SVP of Finance and Investor Relations

Analysts

• George Gianarikas, Managing Director and Senior Analyst at Canaccord Genuity
• Ryan Pfingst, Senior Equity Research Analyst at B. Riley Securities
• Dushyant Ailani, Senior Equity Research Analyst at Jefferies
• Jeffrey Campbell, Senior Analyst at Seaport Research Partners
• Noel Parks, Managing Director of CleanTech and E&P at Tuohy Brothers