Q2 2025 FuelCell Energy Inc Earnings Call

Hello, and thank you for standing by my name is Tiffany and I will be your conference operator today.

Operator: Hello, and thank you for standing by.

Tiffany: My name is Tiffany, and I will be your conference operator today.

Speaker Change: At this time I would like to welcome everyone to the fuel cell energy second quarter of fiscal 2025 financial results Conference call.

Tiffany: At this time, I would like to welcome everyone to the FuelCell Energy's second quarter of Fiscal 2025 Financial Results Conference Call. All lines have been placed on a listen-only mode. After the speaker's remarks, there will be a question and answer session with instructions for participation provided at that time. Thank you.

Speaker Change: All lines have been placed on a listen only mode. After the Speakers' remarks, there will be a question and answer session with instructions for participation provided at that time. Thank you I would now like to turn the call over to Tom Gelston. Tom. Please go ahead.

Tom Gelston: I would now like to turn the call over to Tom Gelston. Tom, please go ahead. Thank you and good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded.

Tom Gelston: Thank you and good morning, everyone and thank you for joining us on the call today.

Tom Gelston: As a reminder, this call is being recorded this morning fuel cell energy released our financial results for the second quarter of fiscal year 2025, and our earnings press release is available in the investors section of our website at www dot fuel cell energy Dot com.

Tom Gelston: This morning, FuelCell Energy released our financial results for the second quarter of fiscal year 2025, and our earnings press release is available in the investor 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.

Speaker Change: 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.

Speaker Change: 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 and Exchange Act of 934.

Tom Gelston: 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 and Exchange Act of 1934. 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 FuelCell 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.

Speaker Change: Such statements express our expectations beliefs 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.

Speaker Change: 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.

Tom Gelston: More information regarding such risks and uncertainties is available in the Safe Harbor Statement in the slide presentation and in our filings with the 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.

Speaker Change: More information regarding such risks and uncertainties is available in the safe Harbor statement in the slide presentation and in our filings with the Securities and Exchange Commission, particularly the risk factors section of our most recently filed annual report on Form 10-K, and any subsequently filed quarterly reports on Form 10-Q.

Speaker Change: 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.

Tom Gelston: 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 the Investors tab.

Speaker Change: Our earnings press release, and a copy of today's webcast presentation are available on our website under the investors tab.

Jason Few: For our call today I'm joined by Jason few fuel cell Energy's, President and Chief Executive Officer, and Mike Bishop fuel cell energies executive Vice President Chief Financial Officer and Treasurer.

Tom Gelston: For our call today, I'm joined by Jason Few, FuelCell Energy's President and Chief Executive Officer, and Mike Bishop, FuelCell Energy's 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.

Speaker Change: 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 hand, the call over to Jason for opening remarks, Jason.

Jason Few: I'll now hand the call over to Jason for opening remarks. Jason. Thank you, Tom, and good morning, everyone. Thank you for joining us on our call today.

Speaker Change: Thank you Tom and good morning, everyone. Thank you for joining us on our call today.

Speaker Change: Along with our earnings announcement. This morning, we also energy announced a restructuring plan that prioritizes sales of our molten carbonate platform.

Jason Few: Along with our earnings announcement this morning, FuelCell Energy announced a restructuring plan that prioritizes sales of our molten carbon platform. Additionally, as a part of this effort, we are taking meaningful steps to right-size our business, manage expenses, and position ourselves to take advantage of near-term opportunity. Altogether, we believe this strategy will accelerate the timeline toward expected future profitability. We believe that this restructuring plan will sharpen and accelerate our path to positive cash flow and growth. We are intensifying our focus on our carbonate platform while reducing overhead, working to optimize our supply chain, and focusing on driving efficiency.

Speaker Change: Additionally, as a part of this effort, we are taking meaningful steps to rightsize our business.

Speaker Change: Manage expenses and position ourselves to take advantage of near term opportunities.

Speaker Change: Altogether.

Speaker Change: We believe this strategy will accelerate the timeline toward expected future profitability.

Speaker Change: We believe that this restructuring plan will sharpen and accelerate our path to positive cash flow and growth.

Speaker Change: We are intensifying our focus on our carbon at platform.

Speaker Change: While reducing overhead working to optimize our supply chain and focusing on driving efficiency.

Speaker Change: At the same time we.

Jason Few: At the same time, we will strategically preserve the platform's long-term flexibility with the goal of unlocking further opportunities such as carbon capture.

Speaker Change: We will strategically preserved our platform's long term flexibility.

Speaker Change: With the goal of unlocking further opportunities such as carbon capture.

Speaker Change: Regarding our solid oxide platform.

Jason Few: Regarding our solid oxide platform, our exclusive focus will remain on validating and demonstrating our electrolysis technology at the US Department of Energy's Idaho National Laboratory. We are pausing broader solid oxide R&D, immediately reducing costs, and intensifying our investment in proven customer-ready solutions. We are focused on delivering future-ready power today. We believe that a successful targeted demonstration at Idaho National Laboratory will position us strategically to capitalize as the hydrogen economy expands, highlighting our highly efficient and differentiated electrolysis platform. Under our restructuring plan, we will recalibrate our Torrington Manufacturing Facility production schedule to align with contracted demand rather than forecasted demand.

Speaker Change: Our exclusive focus will remain on validating and demonstrating our electrolysis technology at the U S Department of energy, Idaho National Laboratory.

Speaker Change: We are pausing broader solid oxide R&D immediately reducing costs and intensified our investment in proven customer ready solutions, we are focused on delivering future ready power today.

Speaker Change: We believe that a successful targeted demonstration at Idaho National Laboratory will position us strategically to capitalize as the hydrogen economy expands highlighting our highly efficient and differentiated electrolysis platform.

Speaker Change: Under our restructuring plan.

Speaker Change: We will recalibrate, our torrington manufacturing facility production schedule to align with contracted demand rather than forecasted demand, which without continued growth in our closed order book would result in a decrease in our annualized production rate.

Jason Few: which without continued growth in our closed order book would result in a decrease in our annualized production rate. We believe that our disciplined demand-driven approach will position us for sustainable profitability and growth in the future while maximizing efficiency and delivering measurable value. With our enhanced focus on our core technologies, specifically the manufacture and sale of our carbonate platforms, and the growing demand for distributed power generation in the U.S., Asia, and Europe, we are targeting the future achievement of positive adjusted EBITDA once our Torrentine manufacturing facility reaches an annualized production rate of 100 megawatts per year.

Speaker Change: We believe that our disciplined demand driven approach will position us for sustainable profitability and growth in the future, while maximizing efficiency and delivering measurable value.

Speaker Change: With our enhanced focus on our core technologies, specifically, the manufacture and sale of our carbon and platforms and the growing demand for distributed power generation in the U S Asia and Europe, we are targeting the future achievement of positive adjusted EBITDA once our <unk> manufacturing facility.

Speaker Change: And annualized production rate of 100 megawatts per year. However, as of April 32025, the facility operated at an annualized production rate of approximately 31 megawatts.

Jason Few: However, as of April 30, 2025, the facility operated at an annualized production rate of approximately 31 megawatts. The bottom line, we are taking decisive actions to streamline our cost structure, seize the opportunities directly in front of us, and deliver meaningful results.

Speaker Change: Bottom line, we are taking decisive actions to streamline our cost structure seize the opportunities directly in front of us and deliver meaningful results.

Jason Few: We're building a stronger, more focused company, and we look forward to sharing our continued progress updates in the quarters ahead. while restructuring is never easy. We believe that prioritizing sales of our proven carbonate platform and scaling back R&D investments is the right move to drive the company toward profitability. What remains unchanged is our purpose. FuelCell Energy is steadfast in our commitment to enabling a world powered by clean energy. Our core value proposition is rooted in energy integration, seamlessly combining FuelCell solutions with other generation technologies. This allows commercial, industrial, and utility customers to integrate our platforms without overhauling operations or taking on the business interruption risk of intermittent power sources.

Speaker Change: We're building a stronger more focused company and we look forward to sharing our continued progress updates in the quarters ahead.

Speaker Change: While restructuring is never easy.

Speaker Change: We believe that prioritizing sales of our proven carbonate platform and scaling back R&D investments is the right move to drive the company toward profitability.

Speaker Change: What remains unchanged is our purpose.

Speaker Change: Also energy and steadfast in our commitment to enabling a world powered by clean energy.

Speaker Change: Our core value proposition is rooted in energy integration seamlessly combining fuel cell solutions with other generation technologies.

Speaker Change: This allows commercial industrial and utility customers to integrate our platforms without overhauling operations are taking on the business interruption risk of intermittent power sources.

Jason Few: Leveraging clean, abundant natural gas and biogas, our solutions help customers operate with greater reliability, efficiency, and affordability while reducing emissions, preserving air quality, and maintaining continuity in the products and services they deliver.

Speaker Change: Leveraging clean abundant natural gas and biogas, our solutions help customers operate with greater reliability efficiency and affordability, while reducing emissions preserving air quality and maintaining continuity in the products and services they deliver.

Speaker Change: So what does our opportunity set look like.

Jason Few: So what does our opportunity set look like? Let's start with one of the most powerful and durable tailwinds we have, growing global demand for power. Global power demand remains strong. Around the world, electricity demand is rising fast. straining existing grid infrastructure and exposing the limitations of traditional power sources and the grid's centralized architecture. This isn't a temporary surge. It's a long-term megatrend, and it directly reinforces the relevance of our technology and strategy. The explosion of AI, the rapid buildout of data centers, and the intensifying focus on carbon management and air quality are reshaping the global energy landscape.

Speaker Change: Let's start with one of the most powerful and durable tailwind we have growing global demand for power.

Speaker Change: Global power demand remained strong.

Speaker Change: Around the world electricity demand is rising fast.

Speaker Change: Straining existing grid infrastructure and exposing the limitations of traditional power sources and the grid centralized architecture. This isn't a temporary surge. It's a long term megatrends and it is directly reinforces the relevance of our technology and strategy.

Speaker Change: The explosion of AI, the rapid build out of data centers and the intensifying focus on carbon management and air quality are reshaping the global energy landscape.

Jason Few: These trends are not political, they are structural. They will continue across administrations and market cycles. They are here to stay. just to frame the magnet. In the U.S. alone, data centers are projected to require more than 600 terawatt-hours of electricity annually by 2030. That's a 22% compounded annual growth rate over the next five years. We believe the momentum behind these shifts is undeniable, and it's hard for us to imagine a future where FuelCell Energy is not part of the solution. This is exactly the type of demand environment we are built for and why our focus on our core carbonate platform is so well aligned with the market opportunities in front of us.

Speaker Change: These trends are not political they are structural.

Speaker Change: We'll continue across administrations and market cycles. They are here to stay.

Speaker Change: Just to frame the magnitude in the U S alone Datacenters are projected to require more than 600 terawatt hours of electricity annually by 2030, that's a 22% compounded annual growth rate over the next five years.

Speaker Change: We believe the momentum behind these shifts is undeniable and it's hard for us to imagine a future where fuel cell energy is not part of the solution.

Speaker Change: This is exactly the type of demand environment, we are built for and why our focus on our core carbonate platform is so well aligned with the market opportunities in front of us.

Speaker Change: Second.

Speaker Change: Dedicated power partners.

Jason Few: Dedicated Power Partners. We believe we have taken a major step forward in unlocking market access through our new dedicated power partners or DPP strategic partners. DPP is the result of a strategic partnership with Diversified Energy Company and TESIAC Corp. And it is purpose-built to accelerate the deployment of our carbonate fuel cell for use in data centers and other large-scale commercial and industrial applications. What makes this partnership so compelling is its potential ability to address one of the key constraints in our industry. available, reliable, and affordable fuel supply. By leveraging natural gas and coal mine methane sourced by Diversified, we expect to gain access to stable fuel in strategically important markets at favorable price spreads that improve product economics.

Speaker Change: We believe we have taken a major step forward and unlocking market access to our new dedicated power partners or DPP strategic partnership.

Speaker Change: DPP is the result of a strategic partnership with diversified energy company and test the export and it is purpose built to accelerate the deployment of our carbonate fuel cell for use in data centers and other large scale commercial and industrial applications.

Speaker Change: What makes this partnership so compelling is its potential ability to address one of the key constraints in our industry.

Speaker Change: Available reliable and affordable fuel supply.

Speaker Change: By leveraging natural gas and coal mine methane source by diversified we expect to gain access to stable fuel in strategically important markets at favorable price spreads that improved project economics.

Jason Few: This is a smart, high leverage solution that we expect will help us scale faster, deliver more value to customers, and open up entirely new market territory. I'll go into more detail on DPP in a later slide, but the early indicators are strong. And we are excited about its potential to be a meaningful growth engine for FuelCell Energy.

Speaker Change: This is a smart high levered solution that we expect will help us scale faster deliver more value to customers and open up entirely new market territory.

Speaker Change: Go into more detail on DPT in a later slide but the early indicators are strong and we are excited about its potential to be a meaningful growth engine for fuel cell energy.

Speaker Change: Third our strategic partnerships continued to drive commercial traction.

Jason Few: Third, our strategic partnerships continue to drive commercial traction. Our collaboration with ExxonMobil and Carbon Capture at the Rotterdam Manufacturing Complex is progressing well and positions us to expand this technology to new customers and partners. We're also advancing commercialization of our solid oxide electrolyzer through key partnerships with Malaysia Marine and Heavy Engineering and Idaho National Laboratory. These partnerships are... allowing us to push innovation forward while managing capital response. Together, we believe they're laying the groundwork for FuelCell Energy's next wave of growth.

Speaker Change: Our collaboration with Exxonmobil on carbon capture at the Rotterdam manufacturing complex is progressing well and positions us to expand this technology to new customers and partners.

Speaker Change: We're also advancing commercialization of our solid oxide <unk> through key partnerships with Malaysia, Marine and heavy engineering and Idaho National Laboratory. These.

Speaker Change: These partnerships are essentially allowing us to push innovation forward, while managing capital responsibly.

Speaker Change: Together, we believe they are laying the groundwork for fuel so energy's next wave of growth.

Jason Few: Fourth, we remain committed to discipline, cost management, and maintaining a strong balance. Are losses narrowed in the second quarter of fiscal year 2025 compared to the second quarter of fiscal year 2024? are clear evidence that our financial discipline is taking hold. With the actions announced today, we expect to reduce our operating expenses by 30% on an annualized basis compared to operating expenses incurred in fiscal year 2024. We believe we're moving in the right direction, and with continued focus and execution, we're positioning FuelCell Energy for sustained profitability in the future.

Speaker Change: Fourth.

Speaker Change: We remain committed to disciplined cost management and maintaining a strong balance sheet.

Speaker Change: Our losses narrowed in the second quarter of fiscal year 2025, compared to the second quarter of fiscal year 2024.

Speaker Change: Clear evidence that our financial discipline is taking hold.

Speaker Change: With the actions announced today, we expect to reduce our operating expenses by 30% on an annualized basis compared to operating expenses incurred in fiscal year 2024.

Speaker Change: We believe we're moving in the right direction and with continued focus and execution, we're positioning DSO energy for sustained profitability in the future.

Jason Few: Moving to slides. Our powerhouse business strategy remains the foundation of everything we do. As I do each quarter, I want to show how our latest actions align with our strategy. The first pillar, focus, continues to be priority number one. The restructuring we've announced reflects that commitment. A more focused FuelCell Energy is a more competitive and successful FuelCell. At the same time, we are building scale.

Speaker Change: Moving to slide six.

Speaker Change: Our powerhouse business strategy remains the foundation of everything we do.

Speaker Change: As I do each quarter I want to show how our latest actions align with our strategy. The first pillar focus continues to be priority number one the restructuring we've announced reflects that commitment.

Speaker Change: A more focused feel so energy is a more competitive and successful fuel cell energy.

Speaker Change: At the same time, we are building scale, we recently welcomed Mike <unk> as our new Chief Commercial Officer, Mike.

Jason Few: We recently welcomed Mike Hill as our new Chief Commercial Officer. might bring deep experience in sustainable integrated energy systems and a strong understanding of the evolving demand of data centers and a central market for our growth going forward. And while we focus and scale, we continue to innovate. Our commitment to next generation solutions, including carbon capture and solid oxide electrolysis, remains strong. The technologies represent our future, and we will continue to focus on advancing them toward commercial readiness. Dedicated Power Partners is one of our answers. to the energy market's biggest challenge. record demand, and limited grid availability.

Speaker Change: Mike brings deep experience in sustainable integrated energy systems, and a strong understanding of the evolving demand of data centers and central market for our growth going forward.

Speaker Change: And while we focus on scale, we continue to innovate our commitment to next generation solutions, including carbon capture and solid oxide electrolysis remains strong.

Speaker Change: Technologies represent our future and we will continue to focus on advancing them towards commercial readiness.

Speaker Change: Dedicated power partners is one of our answers.

Speaker Change: To the energy market's biggest challenge.

Speaker Change: Record demand and limited grid availability.

Jason Few: By combining FuelCell Energy's proven technology. Diversified Energy's coal mine methane and natural gas fuel supply and TESIAC's project execution We expect to unlock faster, more reliable power right where it is needed. We believe Dedicated Power Partners is built to win, a strategic partnership formed with the purpose of accelerating time-to-power and customer revenues, creating jobs, lowering price risk, delivering cost-competitive clean energy, maximizing incentives, and cutting emissions. This is real energy integration in action, and we will be ready to deliver. As we innovate for tomorrow, we're also built to deliver today.

Speaker Change: By combining <unk> proven technology diversified energy coal mine methane and natural gas fuel supply and <unk> project execution expertise, we expect to unlock faster more reliable power right, where it is needed.

Speaker Change: We believe dedicated power partners is built to win a strategic partnership formed with the purpose of accelerating time to power and customer revenues, creating jobs lowering price risk delivering cost competitive clean energy maximizing incentives and cutting emissions.

Speaker Change: This is real energy integration and action and we will be ready to deliver.

Speaker Change: As we innovate for Tomorrow, we're also built to deliver today.

Jason Few: The truth is simple. Hydrocarbon still power the world. and it will for the foreseeable future. That's not a challenge for us. It's a strength. Our platforms operate on natural gas and biofuels, abundant, cost-effective fuels that align with today's market reality. Natural gas remains over 40% of the U.S. energy mix and continues to rise globally, driven by demand for distributed energy, energy security, and grid resilience. This resurgence is a powerful tailwind for this. Our technology doesn't combust natural gas. It transforms it through reforming. It's all chemistry. We use it as feedstock to generate clean, reliable baseload power for emission-critical sectors like utilities, automotive, industrial, and wastewater treatment, while targeting data centers as a major opportunity for future growth.

Speaker Change: The truth is simple.

Speaker Change: Hydrocarbons steel power the world.

Speaker Change: And it will for the foreseeable future.

Speaker Change: That's not a challenge for us it's a strength.

Speaker Change: Our platforms operate on natural gas and Biofuels abundant cost effective fuels that align with today's market realities.

Speaker Change: Natural gas remains over 40% of the U S energy mix and continues to rise globally, driven by demand for distributed energy energy security and grid resilience.

Speaker Change: This resurgence is a powerful tailwind for our business.

Speaker Change: Our technology doesn't can bus natural gas it transforms it through reforming its all chemistry, we use it as feedstock to generate clean reliable baseload power for mission critical sectors like utilities, automotive industrial and wastewater treatment, while targeting data centers as a major opportunity for future.

Speaker Change: Growth.

Speaker Change: This is energy integration network delivering practical immediate solutions.

Jason Few: This is Energy Integration at Work, delivering practical, immediate solutions.

Speaker Change: On slide nine I would like to underscore the competitive advantage that natural gas provides our business.

Jason Few: On slide nine, I would like to underscore the competitive advantage that natural gas provides our business. Natural gas is not the problem. How it is used is. Our platform transforms that reality into competitive advantage. As I just mentioned in discussing the prior slide, at FuelCell Energy, we don't combust natural gas. We convert it electrochemically, which is cleaner, more efficient, and with significantly lower emissions than traditional combustion-based generation. The non-combustion process captures more energy per molecule, minimizing pollutants, and enables valuable byproducts like high-grade heat and contaminant removal. It reduces flaring, lowers the environmental footprint, and delivers reliable baseload power at scale.

Speaker Change: Natural gas is not the problem.

Speaker Change: How it is used is our platform transformed that reality into competitive advantage as.

Speaker Change: As I just mentioned any discussing the prior slide at fuel cell energy, we don't combust natural gas, we converted electrochemically, which is cleaner more efficient and with significantly lower emissions than traditional combustion based generation.

Speaker Change: The non combustion process captures more energy per molecule minimizing pollutants and enables valuable byproducts like high grade heat.

Speaker Change: And contaminant removal.

Speaker Change: It reduces flaring lowers the environmental footprint and delivers reliable baseload power at scale.

Speaker Change: This is what differentiates us natural gas is a strategic asset and in our hands. It becomes a bridge to a lower carbon cleaner air future without required society or industry to change how they operate.

Jason Few: This is what differentiates us. Natural gas is a strategic asset. And in our hands, it becomes a bridge to a lower carbon, cleaner air future without requiring society or industry to change how they operate. Our technology is ready now. It aligns with today's energy system, meets today's needs, and supports our strategy for future profitable growth. It positions us not only as innovators, but as real-world problem solvers with a product that works in the world as it is.

Speaker Change: Our technology is ready now it aligns with today's energy system meet todays needs and supports our strategy for future profitable growth it positions us not only as innovators, but as real world problem solvers with a product that works in the world as it is.

Speaker Change: In conclusion.

Jason Few: In conclusion Today we announce bold steps to refocus and strengthen our business. We sharpened our strategy around commercially ready, innovation, and near-term market needs. We created what we believe to be a more direct and executable path to future profitability. FuelCell Energy is built for the now. positioned for what's next and committed to delivering cleaner power without compromise.

Speaker Change: Today, we announced bold steps to refocus and strengthen our business with.

Speaker Change: We sharpened our strategy around commercially ready innovation and near term market needs.

Speaker Change: We created what we believe to be a more direct and executable path to future profitability.

Joe: Joe So energy is built for the now.

Speaker Change: Position for what's next and committed to delivering cleaner power without compromise.

Mike Bishop: With that, I'd like to turn the call over to our CFO, Mike Bishop. Thank you, Jason. I would like to begin by adding some detail on our global restructuring plan, which involves our operations in the U.S., Canada, and Germany. This restructuring is intended to further reduce operating costs, realign resources toward advancing our core carbonate technologies and protect our competitive position amid slower than expected investments in advanced alternative energy technology. This restructuring plan, which was announced today, builds upon our November 2024 restructuring action. Through this restructuring, we aim to reduce our operating expenses by 30 percent on an annualized basis compared to operating expenses incurred in fiscal year 2024.

Speaker Change: With that I'd like to turn the call over to our CFO Mike Bishop.

Mike Bishop: Thank you, Jason I would like to begin by adding some detail on our global restructuring plan, which involves our operations in the U S, Canada and Germany.

Speaker Change: This restructuring is intended to further reduce operating costs realign resources towards advancing our core carbonate technologies and protect our competitive position amid slower than expected investments in advanced alternative energy technology.

Speaker Change: This restructuring plan, which was announced today builds upon our November 2020 for restructuring action through this restructuring we aim to reduce our operating expenses by 30% on an annualized basis compared to operating expenses incurred in fiscal year 2024.

Mike Bishop: Key actions under our new restructuring plan include a global workforce reduction, a significant reduction of discretionary overhead spending, recalibration of the Torrington production schedule to align with contracted demand, deferral of certain compensation and benefit obligations, the cessation of the majority of development efforts with respect to our hydroxide technology, and other targeted cost savings measures. These steps reflect our commitment to strategic discipline and focus with the goal of ensuring we continue to advance our most commercially available technology while preserving the long term optionality of our broader platform innovation. With our enhanced focus on our core technologies, specifically the manufacturing and scale of our carbonate platforms and the growing demand for distributive power generation in the U.S., Asia, and Europe, we are targeting the future achievement of positive adjusted EBITDA once our Torrington, Connecticut, manufacturing facility reaches an analyzed production rate of 100 megawatts per year.

Speaker Change: Key actions under our new restructuring plan include a global workforce reduction a significant reduction of discretionary overhead spending recalibration of the torrington production schedule to align with contracted demand deferral of certain compensation and benefit obligations to <unk>.

Speaker Change: <unk> of the majority of development efforts with respect to our solid oxide technology and other targeted cost savings measures.

Speaker Change: These steps reflect our commitment to strategic discipline and focus with the goal of ensuring we continue to advance our most commercially available technology, while preserving the long term optionality of our broader platform innovations.

Speaker Change: With our enhanced focus on our core technologies, specifically, the manufacturing and scale of our carbonate platforms and the growing demand for distributed power generation in the U S Asia and Europe, we are targeting the future achievement of positive adjusted EBITDA once our Torrington, Connecticut manufacturing.

Speaker Change: <unk> facility reaches an annualized production rate of 100 megawatts per year.

Mike Bishop: As of April 30th, 2025, the facility was operating at an annualized production rate of approximately 31 megawatts and our annualized production rate may decrease in the near term as part of our restructuring plan. As a reminder, the maximum annualized capacity is 100 megawatts per year at the Torrington facility's current configuration. The Torrington facility is sized to accommodate annualized production capacity of up to 200 megawatts a year with additional capacity investment in machinery, equipment, tooling, labor, and inventory.

Speaker Change: As of April 32025, the facility was operating at an annualized production rate of approximately 31 megawatts and our annualized production rate may decrease in the near term as part of our restructuring plan as a reminder, the maximum annualized capacity is 100 megawatts per year.

Speaker Change: At the Torrington facilities current configuration.

Speaker Change: Huntington facility is sized to accommodate annualized production capacity of up to 200 megawatts a year with additional capacity investment in machinery equipment tooling labor and inventory.

Speaker Change: Now turning to the results for the quarter starting on slide 11 in the second quarter of fiscal year 2025, We reported total revenues of $37 4 million compared to $22 $4 million in the comparable prior year quarter, we reported a loss from operations in the quarter of $35 8 million.

Mike Bishop: Now turning to the results for the quarter, starting on slide 11. In the second quarter of fiscal year 2025, we reported total revenues of $37.4 million compared to $22.4 million in the comparable prior year quarter. We reported a loss from operations in the quarter of $35.8 million compared to $41.4 million in the second quarter of fiscal year 2024. The net loss attributable to common stockholders in the quarter was $38.8 million compared to a net loss to common stockholders of $32.9 million in the second quarter of fiscal year 2024. The resulting net loss per share attributable to common stockholders in the second quarter of fiscal year 2025 was $1.79 compared to $2.18 in the second quarter of fiscal year 2024.

Speaker Change: Compared to $41 4 million in the second quarter of fiscal year 2024, the net loss attributable to common stockholders in the quarter was $38 8 million compared to a net loss to common stockholders of $32 9 million in the second quarter of fiscal year 2024.

Speaker Change: The resulting net loss per share attributable to common stockholders in the second quarter of fiscal year 2025 was $1 79.

Speaker Change: Compared to $2 18 in the second quarter of fiscal year 2024.

Mike Bishop: The net loss per common share for the three months ended April 30, 2025 benefited from the higher number of weighted average shares outstanding due to share issuances since April 30, 2024. Adjusted EBITDA totaled negative $19.3 million in the second quarter of fiscal year 2025 compared to adjusted EBITDA of negative $26.5 million in the second quarter of fiscal year 2024. As of April 30, 2025, the company had a cash, restricted cash, cash equivalents, and short-term investment position of $240 million.

Speaker Change: The net loss per common share for the three months ended April 32025 benefited from the higher number of weighted average shares outstanding due to share issuances since.

Speaker Change: April 32024.

Speaker Change: Adjusted EBITDA totaled negative $19 3 million in the second quarter of fiscal year 2025, compared to adjusted EBITDA of negative $26 5 million in the second quarter of fiscal year 2024 as of April 32025, The company had a cash restricted cash.

Speaker Change: Cash equivalents and short term investment position of $240 million.

Speaker Change: Next on Slide 12, you will see additional details on our financial performance and backlog.

Mike Bishop: Next, on slide 12, 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. Product revenues were $13 million compared to no product revenues recognized for the comparable prior year period. service agreement revenues increased to $8.1 million from $1.4 million. The increase in service agreement revenues during the three months ended April 30, 2025, was primarily driven by revenue recognized from module exchanges under the company's long-term service agreement with United Illuminating. There were three module exchanges, one of which was fulfilled with a used module during the three months ended April 30, 2025.

Speaker Change: In the graph on the left hand side revenue is broken down by category product revenues were $13 million compared to no product revenues recognized for the comparable prior year period.

Speaker Change: Service agreement revenues increased to $8 1 million from $1 4 million the increase in service agreement revenues. During the three months ended April 32025 was primarily driven by revenue recognized from module exchanges under the company's long term service agreement with United Illuminating there were three.

Speaker Change: <unk> module exchanges, one of which was fulfilled with used module. During the three months ended April 32025 during the comparable prior year period, there were no module exchanges.

Mike Bishop: During the comparable prior year period, there were no module exchanges. Generation revenue decreased to $12.1 million from $14.1 million, with the decrease primarily driven by lower power output resulting from maintenance activities during the three months ended April 30, 2025. Advanced technology contract revenues decreased to $4.1 million from $6.9 million.

Speaker Change: Generation revenue decreased to $12 1 million from $14 1 million with a decrease primarily driven by lower power output, resulting from maintenance activities. During the three months ended April 32025.

Speaker Change: Advanced technology contract revenues decreased to $4 1 million from $6 9 million.

Speaker Change: Looking at the right hand side of this slide I will walk through the changes in gross loss and operating expenses.

Mike Bishop: Looking at the right-hand side of the slide, I will walk through the changes in gross loss and operating expenses. Gross loss for the second quarter of fiscal year 2025 totaled $9.4 million, compared to a gross loss of $7.1 million in the comparable prior year quarter. The increase in gross loss for the second quarter of fiscal year 2025 was primarily related to reduced gross margin on advanced technology contract revenues and service agreement revenues during the second quarter of fiscal year 2025, partially offset by decreased gross loss from generation revenues. The decreased gross loss from generation revenues was primarily the result of a reduction in the expense construction costs related to the Toyota project, which were $0.2 million in the second quarter of fiscal year 2025, compared to $2.6 million in the second quarter of fiscal year 2024.

Speaker Change: Gross loss for the second quarter of fiscal year, 2025 totaled $9 4 million compared to a gross loss of $7 $1 million in the comparable prior year quarter. The increase in gross loss for the second quarter of fiscal year 2025 was primarily related to reduced gross margin on advanced technology.

Speaker Change: LNG contract revenues and service agreement revenues during the second quarter of fiscal year 2025, partially offset by decreased gross loss from generation revenues decreased gross loss from generation revenues was primarily the result of a reduction in the expense construction costs related to the Toyota project, which were <unk>.

Speaker Change: <unk> 2 million in the second quarter of fiscal year 2025, compared to $2 6 million in the second quarter of fiscal year 2024.

Speaker Change: During the quarter, we continued to make strong progress on our goal of reducing costs operating expenses for the second quarter of fiscal year 2025 decreased to $26 4 million from $34 3 million in the second quarter of fiscal year 2020 for administrative and selling expenses.

Mike Bishop: During the quarter, we continue to make strong progress on our goal of reducing costs. Operating expenses for the second quarter of fiscal year 2025 decreased to $26.4 million from $34.3 million in the second quarter of fiscal year 2024. Administrative and selling expenses decreased to $16.5 million during the second quarter of fiscal year 2025 from $17.7 million during the second quarter of fiscal year 2024, primarily due to lower compensation expense as a result of the restructuring actions taken in the fall of 2024. Research and development expenses decreased to $9.9 million in the second quarter of fiscal year 2025, compared to $16.6 million in the second quarter of fiscal year 2024.

Speaker Change: Decreased to $16 5 million during the second quarter of fiscal year 2025 from $17 7 million during the second quarter of fiscal year 2024, primarily due to lower compensation expense as a result of the restructuring actions taken in the fall of 2024.

Speaker Change: Research and development expenses decreased to $9 9 million in the second quarter of fiscal year 2025, compared to $16 6 million in the second quarter of fiscal year 2024. The decrease was primarily due to lower spending on our commercial development efforts related to our solid oxide power generation electrolysis platforms.

Mike Bishop: The decrease was primarily due to lower spending on our commercial development efforts related to our solid oxide power generation and electrolysis platforms and carbon separation and carbon recovery solutions, as well as a shift in engineering resource allocation towards supporting funded advanced technology activities.

Speaker Change: And carbon separation and carbon recovery solutions as well as a shift in engineering resource allocation towards supporting funded advanced technology activities.

Mike Bishop: On the bottom right of the slide, you will see that backlog increased by approximately 18.7% to $1.26 billion compared to $1.06 billion as of April 30, 2024, in part as a result of the Long-Term Service Agreement, or LTSA, entered into with GGE during the third quarter of fiscal year 2024. Backlog for the GGE LTSA has been allocated between product backlog and service backlog. Product backlog is being and will continue to be recognized as revenue as the company completes commissioning of the replacement Under the GGE LTSA, commissioning of the first six 1.4 megawatt replacement fuel cell modules was completed in the fourth quarter of fiscal year 2024, and commissioning of the next four replacement fuel cell modules was completed in the second quarter of fiscal year 2025.

Speaker Change: On the bottom right of the slide Youll see that backlog increased by approximately 18, 7% to $1 $2 6 billion compared to $1 <unk> 6 billion as of April 32024, and par as a result of the long term service agreement or <unk> entered into with GE during the third.

Speaker Change: <unk> of fiscal year 2024.

Speaker Change: Backlog for the GTE L. TSA has been allocated between product backlog and service backlog product backlog is being and will continue to be recognized as revenue as the company completes commissioning other replacement modules under the GTE Lts say commissioning of the first.

Speaker Change: 614 megawatt replacement fuel cell modules was completed in the fourth quarter of fiscal year 2024, and commissioning of the next four replacement fuel cell modules was completed in the second quarter of fiscal year 2025.

Mike Bishop: An additional 16 1.4 megawatt replacement FuelCell modules are expected to be commissioned ratably throughout the remainder of fiscal year 2025, and the remaining 16 1.4 megawatt replacement FuelCell modules are expected to be commissioned in fiscal 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 GGE LTSA. Backlog also increased compared to the corresponding prior year period as a result of entering into a 20-year power purchase agreement for the 7.4 megawatt FuelCell power plant that the company will build in Hartford, Connecticut.

Speaker Change: An additional 16, one four megawatt replacement fuel cell modules are expected to be commissioned radically throughout the remainder of fiscal year 2025, and the remaining 16, one four megawatt replacement fuel cell modules are expected to be commissioned in fiscal year 2020.

Speaker Change: Thanks.

Speaker Change: Service backlog is being and we will continue to be recognized as revenue as the company performs service at the GE site over the term of the GTE L. TSA backlog also increased compared to the corresponding prior year period as a result of entering into a 20 year power per.

Speaker Change: This agreement for the seven four megawatt fuel cell power plant that the company will build in Hartford, Connecticut.

Mike Bishop: This power purchase agreement has added approximately $167.4 million in tobacco.

Speaker Change: This power purchase agreement has added approximately 167 4 million into backlog.

Speaker Change: Slide 13 is an update on our liquidity position as I mentioned earlier as of April 32025, we had cash restricted cash cash equivalents and short term investments of $240 million.

Mike Bishop: Slide 13 is an update on our liquidity position. As I mentioned earlier, as of April 30th, 2025, we had cash, restricted cash, cash equivalents, and short-term investments of $240 million. During the three months ended April 30, 2025, approximately 1.6 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 $5 per share, resulting in net proceeds to the company of approximately $7.7 million.

Speaker Change: During the three months ended April 32025, approximately one 6 million shares of the company's common stock were sold under the Companys amended open market sale agreement at an average sale price of $5 per share, resulting in net proceeds to the company of approximately $7 7 million.

Speaker Change: Yeah.

Speaker Change: In closing, we are taking deliberate and proactive steps to maintain a strong and flexible balance sheet, while continuing to sharpen our focus on cost discipline and the execution of our growth strategy centered R&R carbonate platform.

Mike Bishop: In closing, we are taking deliberate and proactive steps to maintain a strong and flexible balance sheet while continuing to sharpen our focus on cost discipline and the execution of a growth strategy centered on our carbonate platform. We believe our carbonate technology is well-positioned to meet the demands of the evolving energy integration and the accelerating need for distributed power generation, both through our established channels and the new dedicated power partners strategic partnership with Diversified Energy and TESIAC. We remain focused on driving financial performance while enabling long-term scalable growth.

Speaker Change: We believe our carbonate technology is well positioned to meet the demands of the evolving energy integration and the accelerating need for distributed power generation, both through our established channels and the new dedicated power partners strategic partnership with diversified energy and test.

Speaker Change: We remain focused on driving financial performance, while enabling long term scalable growth.

Speaker Change: I will now turn the call over to the operator to begin Q&A.

Operator: I will now turn the call over to the operator to begin Q&A. At this time, if you would like to ask a question, press star, then the number 1 on your telephone keypad. To withdraw your question, simply press star 1 again. We will pause for just a moment to compile the Q&A roster.

Speaker Change: At this time, if you would like to ask a question Press Star then the number one on your telephone keypad to withdraw your question simply press Star one again.

Speaker Change: We will pause for just a moment to compile the Q&A roster.

Speaker Change: Your first question comes from George <unk> with Canaccord Genuity. Please go ahead.

George Gianarikas: Your first question comes from George Gianarikas with Canaccord Genuity. Please go ahead. Hi, good morning everyone. Thank you for taking my question.

Speaker Change: Hi, Good morning, everyone. Thank you for taking my questions Im confident that these weren't easy actions to take with the restructuring.

George Gianarikas: Hoffman, these were. actions to take with the restructuring.

George Gianarikas: Maybe first question is around DPP. If you could just sort of... talk a little bit about any tangible momentum you have there in procuring customers.

Speaker Change: Maybe first question is around DPP, if you could just sort of.

Speaker Change: Talk a little bit about any tangible tangible excuse me momentum you have there.

Speaker Change: They're procuring customers and orders thank you.

Speaker Change: George Good morning, Thank you for joining the call and thank you for your question and also your your.

Jason Few: George, good morning. Thank you for joining the call, and thank you for your question, and also your comments about our team members and the restructuring. With respect to DPP. We have a very focused effort around bringing to data centers or customers as our primary target a combination of fuel provided by Diversified Energy, FuelCell power generation provided by us, and financing brought together through testing. We have a number of conversations that are active today that we are pursuing across the areas in Northern Virginia and Kentucky that we talked about in our earlier press releases. And we feel pretty positive about the momentum that we're building there to start to see that partnership turn into some transactions where we're delivering fuel and power to data centers.

Speaker Change: Comments about our team members and the restructuring.

Speaker Change: With respect to DPP we.

Speaker Change: Have a very focused effort.

Speaker Change: Around bringing to data center customers as our primary target.

Speaker Change: Combination of fuel provided by diversified energy.

Jason Few: Fuel cell power generation provided by us and financing brought together through <unk>.

Speaker Change: We have a number of conversations that are active today that we are pursuing across the areas in northern Virginia, and Kentucky that we talked about in our earlier press releases and we feel.

Speaker Change: Pretty positive about the momentum that we're building there to start to see.

Speaker Change: That partnership turn into some transactions, where we're delivering fuel and power.

Speaker Change: Data center customers.

Speaker Change: Thank you and just as a <unk>.

George Gianarikas: Thank you. And just as a follow-up, I'm sure this isn't an easy question to answer, but you mentioned getting to EBITDA neutral would imply 100 megawatts production. I'm curious as to any sort of line of sight you can give us there, any thoughts around when Thank you.

Speaker Change: Follow up sure. This isn't an easy question to answer, but you mentioned getting to EBITDA.

Speaker Change: Neutral would imply 100 megawatt production I'm curious as to any sort of line of sight, you can give us there or any thoughts around reaching sort of maybe expect that to happen. Thank you.

Speaker Change: Good morning, George This is Mike So, yes, as part of as part of our disclosures today, we did confirm that with the lower cost structure of the business. The company is comfortable saying that we can achieve adjusted EBITDA positive when we get the factory in the 100 megawatt range.

Mike Bishop: Good morning, George. This is Mike. So yes, as part of as part of our disclosures today, we did confirm that with the lower cost structure of the business, the company is comfortable saying that we can achieve adjusted EBITDA positive when we get the factory in the 100 megawatt range. And as a reminder, as I said in my remarks, today, we have capacity of 100 megawatts in Torrington, we don't need to spend any additional capital to to get to 100 megawatt. It's really ramping at the pace of order flow. We also have the footprint to get that capacity up to 200 megawatts with some additional expenditures, primarily around capital equipment.

Speaker Change: And as a reminder, as I said in my remarks today, we have capacity of 100 megawatts in Torrington.

Speaker Change: We don't need to spend any additional capital to to get to a 100 megawatt it's really ramping at the pace of order flow. We also have the footprint to get that capacity up to 200 megawatts with some additional expenditures primarily around capital equipment. So your question as far as.

Mike Bishop: So your question as far as the timing to get there, the timing is really going to be paced by flow of orders, right. And as Jason talked about, we see a tremendous opportunity right now in the US. around distributed generation in general, as well as the large data center opportunity.

Speaker Change: The timing to get there the timing is really going to be paced by.

Jason Few: Flow of orders right and as Jason talked about we see a tremendous opportunity right now in the U S around distributed generation in general as well as the large data center opportunity.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Jeff Osborne with TD Cowen. Please go ahead.

Jeff Osborne: Your next question comes from Jeff Osborne with TD Cohen. Please go ahead. Yeah, thank you.

Jeff Osborne: Yeah. Thank you maybe just to follow up on George's question, I guess sort of pre COVID-19 and years before Mike.

Jeff Osborne: Maybe just to follow up on George's question, I guess sort of pre-COVID and years before, Mike, the task or target around EBITDA breakeven was more driven by what the size of the generation portfolio was, and so I'm just curious, like what the assumptions are to hit that or why the manufacturing side of the business is more the driver of profitability relative to generation getting to 80 megawatts or 100 megawatts, whatever the math ends up being. Sure, Jeff, and good question. So as we look at the overall financial model, certainly the contribution from the generation portfolio is part of it.

Jeff Osborne: Task or target around EBITDA breakeven.

Jeff Osborne: It was more driven by what the size of the generation portfolio ones and so I'm just curious.

Jeff Osborne: Like what the assumptions are to hit that or why the manufacturing side of the business is more of the driver of profitability relative to generation getting to 80 megawatts 100 megawatts whatever the math ends up being.

Jeff Osborne: Sure, Jeff and good question. So as we look at the overall financial model certainly the contribution from the generation portfolio is is part of it and when you. When you look at it generate the contribution from generation today for example in this quarter.

Mike Bishop: And when you look at the contribution from generation today, for example, in this quarter, you're in the three and a half to $4 million range when you take out depreciation, right? So that is a contributor, and on an annualized basis, that's obviously four times the number that I just said.

Speaker Change: You are in the $3 million to $4 million range when you take out <unk>.

Speaker Change: Depreciation right. So so that is a contributor and on an annualized basis. That's obviously four times the number that I just said, but as we look at the opportunities here going forward.

Mike Bishop: But as we look at the opportunities here going forward, we are not banking on increasing that generation portfolio. We see this as a product and service business, right? And by being able to sell product into DPP and broadly beyond that, and you can look at the Korean market as an opportunity there as well, broadly beyond that, we'll have service on those units. So we're really keying the target around just getting up to a stated volume, but also recognizing that the overall financial model does have contributions not only from generation, but around advanced technology, which has been a profitable part of the business for us as well.

Speaker Change: We are not banking on.

Speaker Change: Increasing that generation portfolio, we see this as a product and service business right and <unk> by being able to sell product into DPP and then.

Speaker Change: And broadly beyond that and you can look at the Korean market as an opportunity there as well.

Speaker Change: Broadly beyond that we'll have service on those units. So so we're really we're really keying the.

Speaker Change: The target around just getting up to a stated volume, but also recognizing that the overall financial model does have contributions not only from generation, but around advanced technology, which has been a profitable part of the business for us as well.

Speaker Change: That's helpful. Maybe just the last follow up question on my side is just I think the price of gas turbines has tripled here over the past 18 to 24 months and so as we look at future bookings for you folks for data center applications would you anticipate that the Asps will be similar to what you saw in Korea and recent orders.

Jeff Osborne: That's helpful.

Jeff Osborne: Maybe just the last follow-up question on my side is just, I think that the price of gas turbines has tripled here over the past 18 to 24 months. And so, as we look at future bookings for you folks for data center applications, would you anticipate that the ASPs would be similar to what you saw in Korea in recent orders? I'm just curious, as we make our models to eventually get you to 100 megawatts, whenever that comes in the future, is what you've seen in the past five years around pricing and cost, is that similar or any major changes on either input or output?

Speaker Change: Curious as we make our models to eventually get you to 100 megawatts whenever that comes in the future.

Speaker Change: As what you've seen in the past five years, our own pricing and cost is that similar or any major changes on either inputs or outputs.

Speaker Change: Yes, Jeff we see that we see the increase in cost.

Mike Bishop: Yeah, Jeff, we see that we see the increasing cost. there, as well as the timeline to get gas turbines as an opportunity for us as one of the tailwinds because of our ability to deliver and really meet the requirement around time to power. So, we don't see significant changes in our pricing to customers as a result of the demand that's being driven by the growth in electricity demand. We actually see it as an opportunity and we intend to work really hard to exploit that opportunity.

Speaker Change: There as well as the timeline to get gas turbines as an opportunity for us as one of the tailwind because of our ability to deliver and really meet the requirement around time to power. So we don't see significant changes in our pricing to customers.

Speaker Change: <unk> as a result of the demand is being driven by.

Speaker Change: The growth in electricity demand, we actually see it as an opportunity and we intend to work really hard to exploit that opportunity.

Speaker Change: Makes sense I appreciate the details.

Jeff Osborne: Makes sense. I appreciate the details.

Speaker Change: Thank you.

Speaker Change: Again, if you would like to ask a question press star one on your telephone keypad.

Operator: Again, if you would like to ask a question, press star 1 on your telephone keypad.

Noel Parks: Your next question comes from Noel Parks with Tui Brothers. Please go ahead. Hi, good morning. I'm just wondering about the very broad power generation opportunity for support of AI and data centers. Could you maybe characterize a bit what sort of customers you're talking to that are moving the fastest? showing the most urgency, and. If you have a sense of whether any particular type or. region of customers. is going to be most instrumental in possibly getting you up to closer to the 100 megawatt manufacturer.

Speaker Change: Your next question comes from Noel Parks with Tuohy Brothers. Please go ahead.

Noel Parks: Hi, good morning.

Noel Parks: I was just wondering about.

Noel Parks: The very broad.

Noel Parks: Power generation opportunities for support of <unk>.

Noel Parks: Data centers could you just maybe characterize a bit.

Speaker Change: What sort of customers are.

Speaker Change: You are talking to that are maybe moving the fastest.

Speaker Change: Showing the most urgency.

Speaker Change: And.

Speaker Change: If if you have a sense of whether.

Speaker Change: Any particular type or.

Speaker Change: Regional customer.

Speaker Change: Is gonna be most instrumental and possibly getting you up to closer to the 100 megawatt manufacturing level at.

Speaker Change: Turning please.

Speaker Change: No. Thank you for the question. So just a couple of comments.

Noel Parks: Noel, thank you for the question. So just a couple of comments. First, I would say that our entire opportunity as we see it as a company, is not just solely around data centers, right? If you look at our Korean opportunity as an example, and if you look at our, you know, just pure grid resiliency and reliability, like the project we talked about last quarter in Hartford to deliver distributed power generation, that's gonna act as a resource on the grid. So we see the ability to get to the 100 megawatts being a combination of opportunities. But specifically to your question on data center.

Noel Parks: First I would say that our entire opportunity as we see it as a as a company is not just solely around data centers right. If you look at our Korean opportunity as an example, and if you look at our just pure grid resiliency and reliability like the project, we talked about last quarter in Hartford to deliver.

Speaker Change: Distributed power generation, that's going to act as a resource on the grid. So we see the ability to get to the 100 megawatts being a combination of opportunities, but specifically to your question on data centers, we see the <unk>.

Jason Few: we see the data center segment, you know, is somewhat fragmented, right? You've got developers that might fall into the traditional real estate kind of category. You've got hyperscalers. So when you think about the big players like Meadows and Googles and Amazons of the world, and then you have developers that are building out large-scale data center projects, we're in common conversations across the board with those customers. And I would add another segment to that that we're in conversations with, and this really ties to the relationship we have with Diversify, just as an example. There's also a number of players that we're in conversations with that are on the gas distribution side that are also looking to bring solutions to their customers because they've got gas.

Speaker Change: Data Center segment.

Speaker Change: Is somewhat fragmented right you've got developers that might fall into the traditional real estate REIT kind of category you've got high.

Speaker Change: Hyper scalar so when you think about the big players like Meadows, and Googles and Amazons of the World and then you have developers that are that are building now large scale data center projects, where income is conversations across the board with those customers.

Speaker Change: And I would add another segment to that that were in conversations with and this really ties to the relationship we have with diversified just as an example, there is also a number of players that were in conversations with better on the gas distribution side that are also looking to bring solutions to their customers because they've got gas.

Speaker Change: They need power generation solutions to consume that gas and so there are opportunities. There that we are also pursuing with that with those customers. So we are we're on a multi frontal attack. If you will with respect to data centers.

Jason Few: They need power generation solutions to consume that gas. And so there are opportunities there that we are also pursuing with that with those customers. So we are on a multi-frontal attack, if you will, with respect to the data centers. And we think that, you know, to your question about who's going to go first, you know, this is the traditional way to think about the model. They're all trying to secure offtake agreements to get those data centers up and running. And what we really like about our position, I like to think about it as, you know, kind of first power block in, if you will, right, to get those data centers up and running.

Jason Few: And we think that.

Speaker Change: To your question about who's going to go first.

Jason Few: This is the traditional way to think about the model, they're all tried to secure offtake agreements to get those data centers up and running and what we really like about our position I like to think about it as.

Speaker Change: Kind of first power block in if you will right to get those data centers up and running in those 20% to 50 megawatt type blocks, and we think Thats, where we have a real opportunity to excel and we're excited about it.

Noel Parks: And we think that's a great opportunity to excel, and we're excited about it. Great, and when you mentioned the gas distribution side and those customers looking to to bring opportunity or those looking to bring opportunities to their customers. Are... are those... It's something you anticipate would be structured ultimately long as a long-term... EPA type agreement, or more sort of just... I guess I'm just trying to get a sense of... what what those might look like kind of with that extra part.

Speaker Change: Great and when you mentioned the.

Speaker Change: The gas distribution side and.

Speaker Change: Those customers looking to.

Speaker Change: Bring opportunity are those looking to bring opportunities to their customers.

Speaker Change: Or are those.

Noel Parks: Something you anticipate would be structured ultimately ultimately long.

Speaker Change: <unk>.

Noel Parks: Long term PPA type of agreement or or a more sort of just.

Speaker Change: Apply volume agreement I guess Im just trying to get a sense of.

Speaker Change: Just what those might look like kind of with that extra party in the in the middle.

Mike Bishop: Sure and that's a really good question Noel and good morning. This is this is Mike. Thank you for that so again the way we look at it DPP is a partnership that.

Mike Bishop: Sure, and that's a really good question, Noel, and good morning. This is Mike. Thank you for that. So, again, the way we look at DPP is a partnership that FuelCell will be selling into, as I mentioned earlier. We're going to be selling product into that partnership, diversified, obviously selling fuel into the partnership, and then the go-to-market for DPP is putting forth power purchase agreements in front of customers, and, of course, there could be, depending on the end customer, there could ultimately just be a sale of the project coming out of DPP, but DPP will be doing the development and also sourcing the financing, and with a platform like this that's going to be growing, our expectation is you're able to source financing at a reasonable cost of capital that will enable the growth and provide back, again, to FuelCell Energy orders for product and service.

Mike Bishop: The fuel cell will be selling into right as I mentioned earlier, we're going to be selling product into that partnership.

Speaker Change: Diversified obviously selling fuel and its partnership and then the go to market for DPP is putting forth power purchase agreements in front of in front of customers and of course, there could be depending on the end customer there could ultimately just be a sale of the project coming out of PPP out of DPP, but.

Mike Bishop: TPP will be doing the development and also sourcing the financing and with a platform like this it's going to be growing our expectation is you're able to source.

Mike Bishop: Financing at a reasonable cost of capital that will enable that enable the growth and provide back again to fuel cell energy orders for product and service. So that's how we think about it there will be a there is out there will generally be a power purchase agreement coming out of <unk> to the end user.

Mike Bishop: So that's how we think about it. There will generally be a power purchase agreement coming out of DPP to the end user, right, but optionality there, depending on the client, whether that asset stays in DPP long-term and DPP just finances it or it gets sold to that client.

Mike Bishop: But optionality there depending on the client whether that asset stays in DPP long term and DPP <unk> finances, it or it gets sold to that to that client.

Mike Bishop: And now maybe just to add a little bit to that when you look at project opportunities that fall outside of that construct.

Jason Few: And Noel, maybe just to add a little bit to that, when you look at project opportunities that fall outside of that construct, our focus is going to be delivering these projects as energy as a service. And so for us, what is key there is doing projects with investment-grade counterparties to make sure that we're able to... develop these projects and then deliver these projects to another financial holder who is willing to contract for those long-term high-quality revenues associated with those projects. And in line with that, we will have long-term service agreements that run coterminous with those agreements.

Mike Bishop: Our focus is going to be delivering these projects as energy as a service and so for US what is key there is doing projects with.

Jason Few: Investment grade counter parties to make sure that we're able to.

Jason Few: Develop these projects and then deliver these projects too.

Mike Bishop: Other financial holder, who is willing to contract for those long term.

Mike Bishop: High quality revenues associated with those projects.

Mike Bishop: And in line with that we will have long term service agreements that run coterminous with those agreements and Thats, where youll start to see as well for us having those predictable long term revenues that you see in our generation portfolio today, which are on balance sheet shifting more to a service focused model as opposed.

Noel Parks: And that's where you'll start to see, as well for us, having those predictable long-term revenues that you see in our generation portfolio today, which are on balance sheet, shifting more to a service-focused model as opposed to an on-balance sheet generation. Great, thanks for the extra detail. Thank you.

Mike Bishop: And on balance sheet generation model.

Mike Bishop: Great. Thanks for the extra detail.

Mike Bishop: Thank you.

Mike Bishop: There are no further questions at this time I will now turn the call back over to Jason to you for closing remarks.

Operator: There are no further questions at this time.

Jason Few: I will now turn the call back over to Jason Few for closing remarks. Tiffany, thank you, and thank you all for listening in today. I hope you come away from the call with a clearer understanding of the steps FuelCell Energy has taken to position ourselves for success.

Jason Few: Tiffany Thank you and thank you all for listening in today.

Mike Bishop: I hope you come away from the call with a clearer understanding of the steps fuel cell energy has taken to position ourselves for success.

Mike Bishop: Disciplined execution.

Jason Few: Discipline Execution. leveraging our proven carbonate platform. Energy Growth Tailwinds. The modular speed advantage that we have, first power block in. and structural cost reductions to shorten our pathway to adjusted EBITDA positives.

Mike Bishop: Leveraging our proven carbonate platform.

Mike Bishop: Energy growth tailwind.

Mike Bishop: The modular speed advantage that we have first power block in.

Mike Bishop: And structural cost reductions to shorten our pathway to adjusted EBITDA positive.

Mike Bishop: I look forward to sharing more progress updates next quarter.

Jason Few: I look forward to sharing more progress updates next quarter. Thank you all for joining the call, and I hope you all have a wonderful weekend. Thank you.

Mike Bishop: You all for joining the call and I Hope you all have a wonderful weekend. Thank you.

Mike Bishop: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining.

Operator: You may now disconnect.

Mike Bishop: Okay.