Fluence Energy, Inc. Q1 FY2026 earnings call

• Order Intake: Signed over $750 million of new orders globally in Q1, with over $500 million from the U.S. driven by legislation. • Pipeline Expansion: Pipeline grew by approximately $7 billion or 30%, led by U.S. demand, with growth from new customer segments like data centers (36 gigawatt hours of projects) and long-duration energy storage (34 gigawatt hours of projects in Europe and U.S.). • Domestic Supply Chain: Domestic content supply chain performing well, with cell and module production ahead of plan, and expansion/diversification of supplier base. Resolved legal matters: Moss Landing settlement and Diablo Canyon court dismissal. • New Use Cases: Data centers and long-duration energy storage as new growth areas, with energy storage now used for speed to power, quality of power, backup power, and support of on-site generation.

In Q1 2026, Fluence Energy generated revenue of $475 million. Adjusted gross profit for the quarter was $27 million, with an adjusted gross margin of 5.6%. The backlog reached a record $5.5 billion, reflecting strong U.S. contracting activity driven by legislation and rising demand.

• Reaffirmed fiscal 2026 guidance: Revenue in the range of $3.2 to $3.6 billion (midpoint $3.4 billion). • Anticipated annual recurring revenue to reach approximately $180 million by end of fiscal 2026. • Adjusted EBITDA expected in the range of $40 million to $60 million for the full year. • Midpoint of revenue guidance fully covered by backlog, with clear visibility on operating costs to achieve 11-13% margins.

• Forward-looking statements subject to risks, uncertainties, and factors causing actual results to differ materially. • Supply chain risks, including potential issues with PFE compliance for battery cells. • Competitive risks in the energy storage market, including new entrants and evolving technology landscapes.

Q: George Gianarikas asks about the resolution of AESC's ownership stake issue and the competitive environment in data centers.

A: Julian Nebreda states the main objective is access to PFE compliant cells at competitive terms, and the competitive landscape has seen diversification of battery cell suppliers but no major change yet.

Q: Brian Lee asks about data center pipeline conversion and recovery of incremental costs.

A: Julian Nebreda says no data center projects have converted to backlog yet, and Ahmed Pasha explains $20 million incremental costs from non-U.S. projects are expected to be recovered through customer contracts during the year.

Q: Dylan Nassano asks about margin headwinds and Tesla's comments.

A: Julian Nebreda states no major changes in competitiveness and they have accounted for factors in current outlook.

Q: Julien Dumoulin-Smith asks about data center product fit and AES ownership.

A: Julian Nebreda discusses product road map for data centers and AES's resolution of ownership issue without needing external ownership.

Q: Mark Strouse asks about data center pipeline delineation and long-duration energy storage numbers.

A: Julian Nebreda clarifies 36 gigawatt hours of data center projects with some not in pipeline, and explains long-duration numbers were miscommunicated previously.

Q: Dimple Gosai asks about domestic supply chain mix and gross margin.

A: Ahmed Pasha mentions roughly half domestic vs import mix and gross margin in 10-15% range depending on project scope.

Q: Ben Kahlo asks about supply chain ramp and liquidity.

A: Julian Nebreda discusses supply chain planning with multiple supplier sources, and Ahmed Pasha states $1 billion liquidity is sufficient for current plan with opportunistic capital raising if needed.

Q: Vikram Bagri asks about vertical integration and M&A threshold.

A: Julian Nebreda says vertical integration not strongly needed, and acquisitions need to be accretive.

Q: Christine Cho asks about data center pipeline change and U.S. pipeline growth.

A: Julian Nebreda explains pipeline changes due to project dynamics and U.S. growth driven by new business development efforts.