FuelCell Energy Q1 Earnings Call Highlights

Key Points

• FuelCell Energy sees data centers as the primary growth driver, having submitted more than 1.5 GW of proposals this quarter with data centers now >80% of its pipeline and typical project sizes of 50–300 MW, leveraging a native DC power backbone and heat-recovery to improve PUE for high-density AI workloads.
• The company will ship two carbon capture modules to the ExxonMobil Rotterdam site in April to demonstrate carbonate fuel cells capturing CO2 from external flue gas while simultaneously producing power, hydrogen, and usable thermal energy, positioning carbon capture as a second commercialization vector.
• Q1 revenue rose to $30.5 million (up 61%) and operating loss narrowed to $26.3 million, with liquidity of about $379.6 million plus roughly $57M raised from recent share sales and ~$25M in EX‑IM debt financing; the company is investing $20–30M in 2026 to scale manufacturing toward a long‑term target of 350 MW annual capacity and aims for positive adjusted EBITDA at a 100 MW/yr run rate.

FuelCell Energy NASDAQ: FCEL executives used the company’s fiscal first-quarter 2026 earnings call to frame growing data center power needs as a key driver of commercial momentum, while also highlighting progress in South Korea, a forthcoming carbon capture demonstration at ExxonMobil’s Rotterdam site, and early steps to expand U.S. manufacturing capacity.

Data centers increasingly dominate commercial pipeline

President and CEO Jason Few said the rapid expansion of AI and digital infrastructure is colliding with lengthy grid interconnection timelines, pushing customers toward solutions that can be deployed faster and scaled over time. Few positioned FuelCell Energy’s platform as suited for “distributed baseload power,” emphasizing accelerated time to power, scalability, capital preservation, regulatory resilience, and what he called a “DC native” power backbone for data centers.

Few said FuelCell Energy’s data center focus is showing up in commercial activity. During the quarter, the company submitted more than 1.5 gigawatts of proposals, and management said data centers now represent over 80% of the company’s pipeline. Few added that the company’s priority is “disciplined conversion” of high-quality opportunities into contracted projects and backlog, emphasizing “durability over velocity.”

In response to analyst questions, management said projects do not enter backlog until orders are firm and contracts are finalized. Few described the post-proposal process as progressing through technical details, initial contract considerations, and negotiations toward contract closure, adding that the opportunity from the recent set of projects is expected to “materialize over the coming quarters.”

Asked about the proposal mix, FuelCell Energy said the vast majority of the 1.5 GW of proposals were weighted toward the U.S. market, spanning hyperscalers, co-location developers, infrastructure players, and real estate and power-land developers. Management characterized typical project sizes in the 50 MW to 300 MW range per facility.

Platform themes: native DC output and thermal integration

Few argued that native DC power delivery can reduce the need for multiple AC-to-DC conversions inside data centers, which he said adds cost, complexity, energy loss, and potential failure points. He linked this to rising rack densities discussed publicly by data center infrastructure leaders, noting industry commentary that rack densities are moving toward megawatt-class levels.

FuelCell Energy also highlighted efficiency opportunities from integrating heat recovery with absorption chilling. Management said cooling can represent roughly 25% to 30% of a data center’s total electricity consumption and is increasing as AI workloads raise rack density and thermal intensity. By using thermal energy produced in combined heat and power configurations, the company said it can reduce electric cooling load and improve power usage effectiveness (PUE), shifting more available power to compute.

In Q&A, management described an example included in its presentation: for a 100 MW data center, absorption chilling could increase power available to IT load, and the company cited an illustrative $127 million incremental value over a 20-year period when weighing capital costs against operational savings and reduced power draw. Executives said the company has previously delivered absorption chilling solutions and other heat-recovery applications, such as district heating and steam delivery into industrial steam loops.

SDCL collaboration and South Korea activity

Few said FuelCell Energy advanced its collaboration with Sustainable Development Capital (SDCL), describing a set of identified opportunities totaling up to 450 MW of discrete data center and distributed generation projects globally. Under the collaboration, FuelCell Energy would provide the power platform and long-term operating and service capability, while SDCL would provide institutional capital, structuring experience, and infrastructure asset management.

In Q&A, Few described SDCL as an infrastructure-focused investor that owns and operates multiple gigawatts of projects and said the combination of SDCL’s experience delivering large-scale infrastructure and FuelCell Energy’s ability to operate and maintain assets remotely supports the partnership’s customer offering.

Operationally, management reiterated that South Korea remains a key market and “proof point of scale.” Product revenue in the quarter was driven by module deliveries for Gyeonggi Green Energy Co., Ltd. (GGE) and China General Nuclear (CGN) under long-term service agreements. Few said the company services what he described as the world’s largest fuel cell plant at nearly 60 MW and referenced collaboration under a 100 MW data center memorandum of understanding (MOU).

Regarding the MOU with Inuverse for the AI Daegu Data Center, management said a key milestone—securing land—has been achieved through a land purchase agreement with Daegu University. Next steps discussed on the call included identifying off-takers and beginning collaborative planning and architecture design for power delivery at the site.

Carbon capture: Rotterdam modules expected to ship in April

FuelCell Energy said it is moving carbon capture “from development to deployment.” Few stated that in April the company expects to ship two carbon capture modules to the ExxonMobil Rotterdam Integrated Manufacturing Site. The company characterized the project as the first demonstration of carbonate fuel cells capturing carbon from an external emissions source while simultaneously producing power, hydrogen, and usable thermal energy.

In Q&A, management said that after shipment, the team will integrate the system to capture flue gas directly from the Esso refinery in Rotterdam. Executives emphasized two aspects they expect to demonstrate: simultaneous production of multiple outputs (power, hydrogen, and thermal energy) and the ability to capture CO2 from lower-concentration streams, which management said can be challenging for other technologies.

Few said captured CO2 could ultimately integrate into the Poseidon transport and storage infrastructure under development in the North Sea, and he described the Rotterdam work as a catalyst toward commercialization. He also positioned carbon capture as a second growth vector alongside distributed generation.

Financial results: revenue up 61%, operating loss narrowed

Chief Financial Officer Michael Bishop reported total revenue of $30.5 million for the fiscal first quarter, up from $19.0 million a year earlier, driven primarily by module deliveries to GGE and CGN under long-term service agreements. Operating loss improved to $26.3 million from $32.9 million in the prior-year quarter.

Net loss attributable to common stockholders was $23.7 million, or $0.49 per share, compared with $29.1 million, or $1.42 per share, a year earlier. Bishop attributed the improvement in loss per share to both reduced net loss and a higher weighted average share count due to equity issuances since January 31, 2025. On a non-GAAP basis, adjusted EBITDA was negative $17.0 million, compared with negative $21.1 million in the prior-year quarter.

By revenue category:

• Product revenue: $12.0 million, reflecting delivery and commissioning of four modules (two for GGE and two for CGN). Management said revenue was about $6 million lower than planned due to timing of commissioning for two modules that entered service shortly after quarter end.
• Service agreement revenue: $3.2 million, up from $1.8 million, reflecting higher service activity under the GGE long-term service agreement.
• Generation revenue: $11.0 million, down slightly from $11.3 million, reflecting lower output from plants in the company’s operating portfolio.
• Advanced technology contract revenue: $4.3 million, down from $5.7 million. This included $1.7 million tied to the joint development agreement with ExxonMobil Technology and Engineering Company and $1.9 million related to a purchase order from Esso Nederland BV for the Rotterdam project.

Gross loss was $5.9 million versus $5.2 million a year earlier, which Bishop said was primarily related to increased manufacturing variances and lower gross profit from advanced technology contracts, partially offset by higher service agreement gross profit and lower gross loss from generation. Operating expenses fell to $20.4 million from $27.6 million, driven by reduced R&D and administrative and selling costs and the absence of restructuring expense recorded in the prior-year quarter.

Backlog decreased 10.8% year over year to $1.17 billion, primarily due to revenue recognized over the period, partially offset by new contract backlog.

On liquidity, Bishop said FuelCell Energy ended the quarter with $379.6 million in cash, restricted cash, and cash equivalents. During the quarter, the company sold approximately 6.4 million shares under its amended Open Market Sale Agreement at an average price of $8.82, generating net proceeds of about $54.9 million. After quarter end, it sold an additional 300,000 shares at an average price of $7.67 for about $2.5 million in net proceeds. The company also closed a new round of debt financing with the Export-Import Bank of the United States, resulting in about $25 million of gross proceeds, which management linked to support for exports into international markets including South Korea.

Looking ahead, management reiterated that it is targeting positive adjusted EBITDA when the Torrington, Connecticut facility reaches an annualized production rate of 100 MW per year. Executives said the company is currently targeting a run rate in the 40 MW to 41 MW range and characterized the first-quarter run rate as seasonally lower than the prior quarter.

Few said FuelCell Energy plans to invest $20 million to $30 million in fiscal 2026 toward initial manufacturing optimization aimed at expanding maximum annualized capacity from 100 MW today toward 350 MW within the existing footprint, with further expansion described as demand-driven and aligned with contracted volume and partner capital.

About FuelCell Energy NASDAQ: FCEL

FuelCell Energy, Inc 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.

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