FuelCell Energy, Inc. Q3 FY2025 earnings call

• Global power demand is accelerating rapidly, driven by AI, crypto, and the increasing density of servers in data centers. FuelCell Energy's modular carbonate baseload power technology is a proven scalable solution to meet this demand.
• Strategic partnerships validate global scale. For example, the long-term service agreement with CGN in South Korea and the MOU with Inuverse in relation to data center deployment.
• US policy tailwinds are favorable. The reinstatement of the investment tax credit for fuel cell technologies and support for carbon capture through the 45Q incentive are beneficial.
• The company is fortifying its financial foundation. It has $237 million in cash and cash equivalents, is on track to reduce operating expenses by 30% annually, and aims for positive adjusted EBITDA once the Torrington manufacturing facility reaches 100 megawatts per year production.

In the third fiscal quarter, product revenues amounted to $26 million, contrasting with $300,000 in the comparable prior year period. Service agreement revenues saw an increase, rising to $3.1 million from $1.4 million. Generation revenues decreased to $12.4 million from $13.4 million, and advanced technology contract revenues dropped to $5.3 million from $8.6 million. Total revenues for the third quarter of 2025 were $46.7 million, representing a 97% increase compared to the prior year quarter. As of 07/31/2025, the company had cash, restricted cash, and cash equivalents totaling $236.9 million.

• The company intends to achieve positive adjusted EBITDA when the Torrington manufacturing facility attains an annualized production rate of 100 megawatts per year.
• The Torrington facility is currently operating in the 30 to 40 megawatt range and its production pace will be determined by backlog materialization.
• Policies such as the ITC are expected to support the scaling of US-built fuel cell platforms to meet the significant data center demand.

Q: Matt inquired about the momentum in the data center space and the geographic breakdown of conversations.

A: Jason Few responded that there is strong domestic US demand in addition to demand in Korea and broader Asia. The grid is facing shortages in power and transmission, and the ITC provides tailwinds.

Q: Jeffrey Osborne asked about the funnel and pipeline of the legacy commercial business.

A: Jason Few stated that the company continues to see opportunities outside the data center space, leveraging the investment tax credit and focusing on distributed power generation.

Q: Ryan Pfingst asked about the timing of the INUVERSE MOU conversion and milestones in carbon capture.

A: Jason Few mentioned that the INUVERSE MOU is an ongoing process with offtake agreements still needed, and carbon capture modules are in the conditioning phase with the project expected to be operational in 2026.

Q: Noel Parks asked about strategic financing for projects and the best fit data center customers.

A: Mike Bishop said there are financing opportunities in Korea and with Dedicated Power Partners, and the best fit data center customers include those in greenfield sites, benefiting from modular scalability and thermal energy delivery.