Q4 2025 Fluence Energy Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to Fluence Energy's fourth quarter 2025 Earnings Conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Chris Shelton, Vice President of Investor Relations and Sustainability. Please go ahead.

Good day, and thank you for standing by.

welcome to phones energy, fourth quarter 2025

Earnings conference call at this time. All participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *1,1 on your telephone. You will then hear an automated message advising that your hand is raised. Please note that today's call is being recorded.

Chris Shelton: Good morning, and welcome to Fluence Energy's fourth quarter and full year 2025 Earnings Conference call. Before we begin, I want to share my excitement as our new Investor Relations Officer. I look forward to engaging with our analyst and investor community. I would also like to recognize Lexington May, who has recently taken on a new role at Fluence. Lex has been instrumental in leading our Investor Relations program since our initial public offering, and his contributions have greatly benefited our company and its shareholders.

Conference over to your speaker host, Chris Shelton, VP of investor and sustainability. Please go ahead.

Chris Shelton: I would also like to recognize Lexington May, who has recently taken on a new role at Fluence. Lex has been instrumental in leading our Investor Relations program since our initial public offering, and his contributions have greatly benefited our company and its shareholders. Joining me on this morning's call are Julian Nebreda, our President and Chief Executive Officer, and Ahmed Pasha, our Chief Financial Officer. A copy of our earnings presentation, press release, and supplementary metric sheet covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding our non-GAAP financial measures, are posted on the Investor Relations section of our website at fluenceenergy.com. During the course of this call, Fluence management may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts.

Good morning and welcome to fluence energies, fourth quarter and full year, 2025 earnings conference call. Before we begin, I want to share my excitement as our new investor relations officer. I look forward to engaging with our analysts and investor community.

I would also like to recognize Lexington May, who has recently taken on a new role at Fluence.

Joining me on this morning's call are Julian Nebreda, our President and Chief Executive Officer, and Ahmed Pasha, our Chief Financial Officer. A copy of our earnings presentation, press release, and supplementary metric sheet covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding our non-GAAP financial measures, are posted on the Investor Relations section of our website at fluenceenergy.com. During the course of this call, Fluence management may make certain forward-looking statements regarding various matters related to our business and company that are not historical facts.

Lex has been instrumental in leading our investor relations program since our initial public offering, and his contributions have greatly benefited our company and its shareholders.

Joining me on this morning's call are Julian Marquez, our President and Chief Executive Officer, and Ahmed Pasha, our Chief Financial Officer.

A copy of our earnings presentation, press release, and supplementary metrics sheet covering our financial results, along with supporting statements and schedules—including reconciliations and disclosures regarding our non-GAAP financial measures—are posted on the investor relations section of our website at fluentenergy.com.

Chris Shelton: Such statements are based upon current expectations and certain assumptions that are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our SEC filings for our forward-looking statements and more information regarding certain risks and uncertainties that could impact our future results. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Please note that the company undertakes no duty to update or revise forward-looking statements for new information. This call will also reference non-GAAP financial measures that we view as important in assessing the performance of our business. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's Investor Relations website. Following our prepared comments, we will conduct a question-and-answer session with our team.

Such statements are based upon current expectations and certain assumptions that are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our SEC filings for our forward-looking statements and more information regarding certain risks and uncertainties that could impact our future results. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Please note that the company undertakes no duty to update or revise forward-looking statements for new information.

During the course of this call, Fluence management may make certain forward-looking statements regarding various matters related to our business and companies that are not historical facts.

Such statements are based upon current expectations and certain assumptions that are therefore subject to certain risks and uncertainties.

Many factors could cause actual results to differ materially.

Please refer to our FCC filings for our forward-looking statements and more information regarding certain risks and uncertainties that could impact our future results.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today.

This call will also reference non-GAAP financial measures that we view as important in assessing the performance of our business. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's Investor Relations website. Following our prepared comments, we will conduct a question-and-answer session with our team.During this time, to give more participants an opportunity to speak on this call, please limit yourself to one initial question and one follow-up. Thank you very much. I'll now turn the call over to Julian.

Also, please note that the company undertakes, no duty to update or revise forward-looking statements for new information.

This call will also reference non-GAAP financial measures that we view as important in assessing the performance of our business.

A Reconciliation of these non-gaap measures to the most comparable. Gaap measures is available in our earnings materials on the company's investor relations website.

Chris Shelton: During this time, to give more participants an opportunity to speak on this call, please limit yourself to one initial question and one follow-up. Thank you very much. I'll now turn the call over to Julian. Thank you, Chris. I would like to send a warm welcome to our investors, analysts, and employees who are participating in today's call. This morning, I will review the highlights of our fiscal 2025 results, the accelerating demand for energy storage, and how Fluence is positioned to lead in this growing market. I will also provide an update on our product roadmap, our domestic content strategy, and progress towards OBBBA compliance. Ahmed will then cover our financial results and 2026 outlook. Turning to slide four and our financial performance. First, I am pleased to report that during the fourth quarter, we signed more than $1.4 billion orders, which represents a record level.

Following our prepared comments, we will conduct a question-and-answer session with our team.

During this time to give more participants an opportunity to speak on this call, please limit yourself to 1 initial question and 1 follow-up.

Julian Nebreda: Thank you, Chris. I would like to send a warm welcome to our investors, analysts, and employees who are participating in today's call. This morning, I will review the highlights of our fiscal 2025 results, the accelerating demand for energy storage, and how Fluence is positioned to lead in this growing market. I will also provide an update on our product roadmap, our domestic content strategy, and progress towards OBBBA compliance. Ahmed will then cover our financial results and 2026 outlook. Turning to slide four and our financial performance.

Thank you very much. I'll now turn the call over to Julian.

Thank you, Grace.

I would like to send a 1 Welcome to our investors analysts an employees who are participating in today's call.

This morning, I will review the highlights of our fiscal 2025 results.

The accelerating demand for energy storage.

And how Fluence is positioned to lead in this growing market?

I will also provide an update on our product roadmap.

Our domestic content strategy and progress towards all BBBBA compliance.

Ahmed will then cover our financial results and Q4 2025 outlook.

Turning to slide 4.

First, I am pleased to report that during the fourth quarter, we signed more than $1.4 billion orders, which represents a record level. This brings our current backlog to $5.3 billion, setting us up for renewed growth in 2026 and beyond. Second, full year revenue came in at approximately $2.3 billion, about $300 million below our expectations, mostly due to delays by our contract manufacturer in ramping up our newly commissioned Arizona enclosure manufacturing facility. We have implemented corrective actions, production is improving, and we are confident in meeting delivery commitments and capturing the shortfall during fiscal 2026.

And our financial performance.

First.

I am pleased to report that during the fourth quarter, we signed more than $1.4 billion in orders.

Chris Shelton: This brings our current backlog to $5.3 billion, setting us up for renewed growth in 2026 and beyond. Second, full year revenue came in at approximately $2.3 billion, about $300 million below our expectations, mostly due to delays by our contract manufacturer in ramping up our newly commissioned Arizona enclosure manufacturing facility. We have implemented corrective actions, production is improving, and we are confident in meeting delivery commitments and capturing the shortfall during fiscal 2026. I will discuss these details further in a moment. Third, despite this revenue impact, we deliver a record of approximately 13.7% adjusted gross margin for the year and approximately $19.5 million of adjusted EBITDA, which was at the top end of our guidance range. These results were the product of good execution on projects, and cost efficiencies.

Which represents a record label.

This brings our current backlog to $5.3 billion.

Setting off up for Renewal growth in 26 and Beyond.

Second.

Full year, revenue came in at approximately $2.3 billion.

About 300 million below, our expectations mostly due to delays by our contract manufacturer in. Ramping up our newly commissioned, Arizona, enclosure manufacturing facility.

I will discuss these details further in a moment. Third, despite this revenue impact, we deliver a record of approximately 13.7% adjusted gross margin for the year and approximately $19.5 million of adjusted EBITDA, which was at the top end of our guidance range. These results were the product of good execution on projects, and cost efficiencies. Fourth, in terms of annual recurring revenue, or ARR, we ended fiscal 2026 with $148 million, slightly above our original guidance of $145 million. Fifth and finally, we ended the quarter with approximately $1.3 billion in liquidity, which puts us in a strong financial position to fund our plans for growth.

Production is improving, and we are confident in meeting delivery commitments and capturing the shortfall during fiscal 2026.

I will discuss this details further in a moment.

Sir.

The spark this Revenue impact. We deliver a record of approximately 13.7 adjusted gross margin for the year.

An approximately $19.5 million of adjusted evidence.

Range.

Chris Shelton: Fourth, in terms of annual recurring revenue, or ARR, we ended fiscal 2026 with $148 million, slightly above our original guidance of $145 million. Fifth and finally, we ended the quarter with approximately $1.3 billion in liquidity, which puts us in a strong financial position to fund our plans for growth. Please turn to slide five for details on our order intake and pipeline. Our record $1.4 billion of order intake during the fourth quarter included contributions across all our core markets, approximately half were for projects located in Australia. For fiscal 2026, we currently expect the US market will be the largest contributor of order intake, as reflected by our pipeline as of year end.

Forth.

In terms of annual recurring, revenue or ARR, we ended fiscal 26 with 148 million.

Slightly above our original guidance of 145 million.

And Fifth. And finally.

We ended the quarter with approximately $1.3 billion in liquidity.

Please turn to slide five for details on our order intake and pipeline. Our record $1.4 billion of order intake during the fourth quarter included contributions across all our core markets, approximately half were for projects located in Australia. For fiscal 2026, we currently expect the US market will be the largest contributor of order intake, as reflected by our pipeline as of year end. Looking ahead, demand for energy storage solutions is accelerating worldwide, driven by both the rapid decline in capital costs of storage, and surging demand for electricity from intermittent renewables, data centers, and industrial complexes.

Which puts us in a strong financial position to form our plans for growth.

Please turn to Slide 5 for details on our order intake and pipeline.

Our record 1.4 billion of order intake, during the fourth quarter included contributions across all our core markets.

Approximately half of the projects are located in Australia.

For fiscal 26.

We currently expect the U.S. market will be the largest contributor to order intake, as reflected by our pipeline as of year-end.

Chris Shelton: Looking ahead, demand for energy storage solutions is accelerating worldwide, driven by both the rapid decline in capital costs of storage, and surging demand for electricity from intermittent renewables, data centers, and industrial complexes. We have seen a significant increase in larger deals in our pipeline that, as of 30 September 2024, includes 38 deals of at least 1 gigawatt hour, more than double the number from last year, and nearly five times what we saw two years ago. Please turn to slide six. Earlier this month, we announced a landmark 4 gigawatt hour project with LEAG, representing the largest battery project in European history. These projects will use our new SmartStack product and play a key role in Germany's energy transformation. We are very pleased to welcome LEAG as a customer, and look forward to supporting additional energy transformation projects across European markets.

Looking ahead. The man for any historic solution is accelerating worldwide.

Driven by both the rapid decline in capital cost of storage and surging demand for electricity for intermittent renewables.

We have seen a significant increase in larger deals in our pipeline that, as of 30 September 2024, includes 38 deals of at least 1 gigawatt hour, more than double the number from last year, and nearly five times what we saw two years ago. Please turn to slide six. Earlier this month, we announced a landmark 4 gigawatt hour project with LEAG, representing the largest battery project in European history. These projects will use our new SmartStack product and play a key role in Germany's energy transformation. We are very pleased to welcome LEAG as a customer, and look forward to supporting additional energy transformation projects across European markets.

Data centers, and Industrial complexes.

We have seen a significant increase in larger deals in our pipeline.

That, as of September 3rd, includes 38 deals of at least 1 gigawatt-hour.

More than double the number from last year and nearly five times what we saw two years ago.

Please turn to slide 6.

Earlier this month, we announced a landmark 4 gigawatt-hour project with Leah representing the largest battery project in European history.

These projects will use our new smart stack product.

We are very pleased to welcome Leia as a customer.

I look forward to supporting additional energy transformation projects across European markets.

Chris Shelton: Please turn to slide seven for other emerging drivers supporting our pipeline growth. We have seen significant pickup in demand from data center customers. We are currently in discussions with data center projects representing over 30 GWh. 80% of these engagements have originated since the end of the quarter. Fluence is ready to lead in this emerging market segment with SmartStack, industry-leading in density, reliability, and safety, in addition to its lower cost of ownership. Another set of emerging opportunities is long-duration storage, which is driven by the need for six to eight-hour duration batteries in markets with significant renewable penetration, such as Europe and California. Specifically, in Europe, regulatory schemes are in place to procure this capacity. Today, we have line of sight into 60 GWh of long-duration storage tenders. SmartStack is well suited to compete in this segment due to its flexible architecture and scalable design.

Please turn to slide seven for other emerging drivers supporting our pipeline growth. We have seen significant pickup in demand from data center customers. We are currently in discussions with data center projects representing over 30 GWh. 80% of these engagements have originated since the end of the quarter. Fluence is ready to lead in this emerging market segment with SmartStack, industry-leading in density, reliability, and safety, in addition to its lower cost of ownership.

Please turn to slide 7.

for other emerging driver support in our pipeline growth,

we have seen significant pickup in demand from data center customers.

We are currently in discussions with data center projects representing over 30 gigawatt hours.

80% of these engagements have originated since the end of the quarter.

Fluence is ready to lead in these emerging market segments with smart stack industry-leading density, reliability, and safety.

Another set of emerging opportunities is long-duration storage, which is driven by the need for six to eight-hour duration batteries in markets with significant renewable penetration, such as Europe and California. Specifically, in Europe, regulatory schemes are in place to procure this capacity. Today, we have line of sight into 60 GWh of long-duration storage tenders. SmartStack is well suited to compete in this segment due to its flexible architecture and scalable design. Please turn to slide eight for an update on our team. To capture the opportunities I have just described, we have sharpened our focus on sales and flawless project execution.

In addition to its lower cost of ownership.

Another set of emerging opportunities is long, duration, storage.

which is driven by the need for 6 to 8-hour duration batteries in markets with significant renewable penetration.

Such as Europe and California.

Specifically.

In Europe, regulatory schemes are in place to procure this capacity.

Today, we have line of sight into 60 gigawatt-hours of long-duration storage tenders.

Smart. Stuck is well suited to competing in this segment due to its flexible architecture and a scalable design.

Chris Shelton: Please turn to slide eight for an update on our team. To capture the opportunities I have just described, we have sharpened our focus on sales and flawless project execution. To that end, we are excited to welcome Jeff Monday as our new Chief Growth Officer. Jeff leads our global sales and marketing teams. He brings deep experience from Qualcomm, where he built their global enterprise and channel sales teams. Prior to that, Jeff spent 18 years leading sales teams at Apple. His expertise will help us expand the reach of Fluence brand to new customers and industries, such as the tech sector. In addition, we have also expanded John Sanjuranski's role as Chief Customer Success Officer. As one of our company's founders and an industry pioneer, John will leverage our record of successful execution to further differentiate Fluence from our competition.

Please turn to slide 8 for an update on our team.

Sure, the opportunity is I have just described.

To that end, we are excited to welcome Jeff Monday as our new Chief Growth Officer. Jeff leads our global sales and marketing teams. He brings deep experience from Qualcomm, where he built their global enterprise and channel sales teams. Prior to that, Jeff spent 18 years leading sales teams at Apple. His expertise will help us expand the reach of Fluence brand to new customers and industries, such as the tech sector. In addition, we have also expanded John Sanjuranski's role as Chief Customer Success Officer.

We have sharpened our focus on sales and Flawless project execution.

To that end. We are excited to welcome. Jeff Monday.

As our new Chief Growth Officer,

Jeff leads our global sales and marketing teams.

He brings deep experience from Welcome.

Where he built their Global Enterprise and channels sales teams.

Prior to that.

Teams are Apple.

His expertise will help us expand the reach of the Fluence brand to new customers and industries.

Such as the tech sector.

In addition.

As one of our company's founders and an industry pioneer, John will leverage our record of successful execution to further differentiate Fluence from our competition. He will also maximize the value of our solutions for our customers with our digital and services offerings. We believe that these internal changes will streamline our customer experience and position us to win a larger portion of our pipeline. Please turn to slide nine as I discuss our new SmartStack product. We are pleased with the market reception of SmartStack.

We have also standard John sit role as Chief customer success office.

As 1 of our company's founders.

And an industry pioneer.

Chris Shelton: He will also maximize the value of our solutions for our customers with our digital and services offerings. We believe that these internal changes will streamline our customer experience and position us to win a larger portion of our pipeline. Please turn to slide nine as I discuss our new SmartStack product. We are pleased with the market reception of SmartStack. In addition to its role in winning our LEAG deal, this month we are deploying the first SmartStack units in a project site in Taiwan. We designed SmartStack with the objective of reducing total cost of ownership for our customers. This means, in addition to a lower sales price, SmartStack offers lower cost to install and maintain the system over its useful life, with top-of-the-line operational metrics.

For our customers, we offer digital and services offerings.

We believe that these internal changes will streamline our customer experience.

And positions of 2 in a larger portion of our pipeline.

Please turn to slide 9 as I discuss our new Smart Stack product.

In addition to its role in winning our LEAG deal, this month we are deploying the first SmartStack units in a project site in Taiwan. We designed SmartStack with the objective of reducing total cost of ownership for our customers. This means, in addition to a lower sales price, SmartStack offers lower cost to install and maintain the system over its useful life, with top-of-the-line operational metrics. SmartStack is the only product available today that offers battery density of 7.5 MWh per unit, letting customers fit over 500 MWh of storage per acre. That means bigger projects, optimized sites, and better economics, all else equal.

We are pleased with the market reception of Smart Stack.

In addition to its role in winning and early at deal.

This month, we are deploying the first smart stack unit in a project site in Taiwan.

With a science master stack with the objective of reducing total cost of ownership for our customers.

This means, in addition to a lower sales price.

Smart stack offers.

Chris Shelton: SmartStack is the only product available today that offers battery density of 7.5 MWh per unit, letting customers fit over 500 MWh of storage per acre. That means bigger projects, optimized sites, and better economics, all else equal. Additionally, SmartStack maintains all elements of fire safety and cybersecurity that have been historically a salient element of our offering. Finally, SmartStack is developed with a flexible system architecture that can adapt to customers' specifications. We expect this will be a key selling point for data centers as technology to reduce system latency evolves, and SmartStack's kits can be upgraded with new equipment quickly on site. We are engaged with many customers interested in SmartStack and expect it will represent a majority of our orders for this fiscal year. Please turn to slide 10 for an update on our domestic content strategy.

Lower cost to install and maintain the system, or its useful life with top-of-the-line operational metrics.

Smart stack is the only product available today, that offers battery, density of 7.5, megawatt hour per unit.

Letting customers sit over 500 megawatt-hours of storage per acre.

Additionally, SmartStack maintains all elements of fire safety and cybersecurity that have been historically a salient element of our offering. Finally, SmartStack is developed with a flexible system architecture that can adapt to customers' specifications. We expect this will be a key selling point for data centers as technology to reduce system latency evolves, and SmartStack's kits can be upgraded with new equipment quickly on site. We are engaged with many customers interested in SmartStack and expect it will represent a majority of our orders for this fiscal year. Please turn to slide 10 for an update on our domestic content strategy.

That means bigger, projects, optimized sites and better, economics, all else equal.

Additionally.

The smart stack maintains all elements of fire safety and cybersecurity that have historically been a salient element of our offering.

Finally.

With a flexible system architecture.

That can adapt to customers' specifications.

We expect this will be a key selling point for data centers.

As technology continues to reduce system latency for both.

A smart. Such kids can be upgraded with new equipment quickly on-site.

We are engaged with many customers interested in smart solutions and expect it will represent a majority of our orders for this fiscal year.

Chris Shelton: Our domestic supply chain is a critical advantage for our business, particularly given that we see the majority of our growth coming from the US market. We have contracted with three key production facilities located in Tennessee, Utah, and Arizona. The Tennessee and Utah facilities produce our battery cells and modules, respectively, and they have successfully met production metrics in line with our expectations at the time of our last earnings call. The Arizona facility, which manufactures enclosures, has not met its production targets during this period. Without those enclosures, we were unable to deliver our completed products and recognize the corresponding revenue during the fourth quarter. The primary cause of the manufacturing delay has been the slower ramp in staffing the facility, especially for weekend shifts. We have been working with our contract manufacturer to execute a plan to improve staffing levels, and further optimize the workflow.

Our domestic supply chain is a critical advantage for our business, particularly given that we see the majority of our growth coming from the US market. We have contracted with three key production facilities located in Tennessee, Utah, and Arizona. The Tennessee and Utah facilities produce our battery cells and modules, respectively, and they have successfully met production metrics in line with our expectations at the time of our last earnings call. The Arizona facility, which manufactures enclosures, has not met its production targets during this period.

Please turn to slide 10 for an update on our domestic content strategy.

Our domestic supply chain is a critical Advantage for our business.

Particularly given that we see the majority of our growth coming from the U.S. market.

We have contracted with 3 key production facilities, located in Tennessee, Utah and Arizona.

The Tennessee and the youth of facilities produce our battery cells and modules, respectively.

And they have successfully made production metrics in line with our expectations at the time of our last earnings call.

The Arizona facility.

Without those enclosures, we were unable to deliver our completed products and recognize the corresponding revenue during the fourth quarter. The primary cause of the manufacturing delay has been the slower ramp in staffing the facility, especially for weekend shifts. We have been working with our contract manufacturer to execute a plan to improve staffing levels, and further optimize the workflow. As of today, the production rate has improved, and staffing levels have in great measure been met, which gives us confidence that the manufacturer will meet our desired target rate by the end of this calendar year.

Which manufacturers' enclosures have not met their production targets during the period?

Without those enclosures, we were unable to deliver our completed products and recognize the corresponding revenue during the fourth quarter.

The primary cost of the manufacturing delay.

Has been the slower ramp in stuff in the facility.

Specially for weekend shift.

We have been working with our Contra manufacturer to execute a plan to improve.

Staffing levels and further optimize the workflow.

Chris Shelton: As of today, the production rate has improved, and staffing levels have in great measure been met, which gives us confidence that the manufacturer will meet our desired target rate by the end of this calendar year. We expect to fulfill all of our customer delivery commitments over the course of 2026 and book the associated 20 fixed mix revenue. We will continue to work with our US manufacturers to scale production and maintain our leadership position. We are committed to serving our US customers with a competitive, domestically manufactured solution. Please turn to slide 11 for an update on our prohibited foreign entity, or PFE, compliance strategy. A quick refresh. The One Big Beautiful Bill, or OBBBA, included regulations designed to restrict tax credit availability for products manufactured in the US, but supported by companies deemed to be PFEs.

as of today,

the production rate has improved and Staffing levels, have in great measure been met.

We expect to fulfill all of our customer delivery commitments over the course of 2026 and book the associated 20 fixed mix revenue. We will continue to work with our US manufacturers to scale production and maintain our leadership position. We are committed to serving our US customers with a competitive, domestically manufactured solution. Please turn to slide 11 for an update on our prohibited foreign entity, or PFE, compliance strategy. A quick refresh. The One Big Beautiful Bill, or OBBBA, included regulations designed to restrict tax credit availability for products manufactured in the US, but supported by companies deemed to be PFEs.

Which give us confidence that the manufacturer will meet our desired Target rate by the end of this calendar year.

We will continue to work with our U.S. manufacturers to scale production and maintain our leadership position.

We are committed.

Serving our U.S. customers with a competitive, domestically manufactured solution.

Please turn to slide 11 for an update on our prohibited foreign entity.

Or PFE compliance strategy.

A quick reference.

The 1, big beautiful bill or oh BBB a included regulations designed to restrict tax credit availability.

For products manufactured in the U.S.

Chris Shelton: To that end, our strategy aims to meet our growing volume demand for domestic content from a diverse set of qualified suppliers. I am pleased to report significant progress. More specifically, this month we have secured a second supplier for domestic battery cells. This manufacturer is compliant with all OBBBA regulations and furthers the risk of our future growth. Turning to our Tennessee facility, we continue to work actively with AESC to find a comprehensive solution to comply with PFE regulations. The three key pieces to achieve non-PFE status include transfer of ownership, IP, and material assistance. Significant progress has been made in addressing all these three items. The option of Fluence purchasing the facility from AESC remains under consideration as a possible solution. We continue to view the incremental financing need of a potential transaction as being manageable within our available liquidity.

To that end, our strategy aims to meet our growing volume demand for domestic content from a diverse set of qualified suppliers. I am pleased to report significant progress. More specifically, this month we have secured a second supplier for domestic battery cells. This manufacturer is compliant with all OBBBA regulations and furthers the risk of our future growth. Turning to our Tennessee facility, we continue to work actively with AESC to find a comprehensive solution to comply with PFE regulations. The three key pieces to achieve non-PFE status include transfer of ownership, IP, and material assistance.

both supported by companies deemed to be PFS.

To that end.

Our strategy aims to meet our growing volume in demand for domestic content, from a diverse set of qualified suppliers.

I am pleased to report.

Significant progress.

More specifically, this month, we have secured a second supplier for domestic battery cells.

This manufacturer is compliant with all BBBA regulations. Furthermore, the risk to our future growth.

Turning to our Tennessee facility.

We continue to work actively with ASC to find a comprehensive solution to comply with PFE regulations.

Significant progress has been made in addressing all these three items. The option of Fluence purchasing the facility from AESC remains under consideration as a possible solution. We continue to view the incremental financing need of a potential transaction as being manageable within our available liquidity. Both parties are motivated, and we continue to expect a constructive resolution in advance of the effective dates specified by the law. I will now turn the call over to Ahmed to discuss our financial results and fiscal 2026 guidance.

The three key pieces to achieve non-PFE status include transfer of ownership, intellectual property, and material assistance.

Significant progress has been made in addressing all these three items.

The option of fluence purchasing the facility from ASC remains under consideration as a possible solution.

Chris Shelton: Both parties are motivated, and we continue to expect a constructive resolution in advance of the effective dates specified by the law. I will now turn the call over to Ahmed to discuss our financial results and fiscal 2026 guidance. Thank you, Julian, and good morning, everyone. Today, I will review full year 2025 financial results and our liquidity position, followed by a discussion of our fiscal year 2026 guidance. Starting with slide 13, covering fiscal year 2025 performance. Over the course of the year, we generated revenue of around $2.3 billion. As Julian mentioned, this figure falls short of our expectations by $300 million, largely due to a slower than anticipated ramp-up at one of our contract manufacturing facilities in Arizona. While this shortfall was a challenge, I want to highlight that our disciplined execution and operational focus enabled us to deliver on our profitability and bottom-line objectives.

We continue to view the incremental financing need of a potential transaction as being managed or within our available liquidity.

Both parties are motivated and we continue to expect a constructive resolution in advance of the effective dates specified by the law.

Ahmed Pasha: Thank you, Julian, and good morning, everyone. Today, I will review full year 2025 financial results and our liquidity position, followed by a discussion of our fiscal year 2026 guidance. Starting with slide 13, covering fiscal year 2025 performance. Over the course of the year, we generated revenue of around $2.3 billion. As Julian mentioned, this figure falls short of our expectations by $300 million, largely due to a slower than anticipated ramp-up at one of our contract manufacturing facilities in Arizona. While this shortfall was a challenge, I want to highlight that our disciplined execution and operational focus enabled us to deliver on our profitability and bottom-line objectives.

I will now turn the call over to Ahmed to discuss our financial results and fiscal 2026 guidance.

Thank you, Julian. And good morning, everyone. Today, I will review full-year 2025 financial results and our liquidity position, followed by a discussion of our fiscal year 2026 guidance.

Starting with slide 13, I will cover fiscal year 2025 performance.

Over the course of the year, we generated revenue of around $2.3 billion.

As Julian mentioned, this figure falls short of our expectations by $300 million, largely due to a slower than anticipated ramp-up at 10 of our contract manufacturing facilities in Arizona.

Chris Shelton: Regarding production, most of our US-based contract manufacturing facilities have been operating at their targeted capacities, including both cell and module manufacturing. However, the newly commissioned enclosure facility in Arizona faced some challenges, primarily due to the longer lead time to attract and train the workforce necessary to drive productivity. This was the primary factor behind the lower than expected revenue in the quarter. Working in collaboration with our contractor, we have seen significant production improvements since September. The majority of personnel required to execute our plan have now been hired, and we are on track to achieve our targeted production levels. Our adjusted EBITDA for the year was $19.5 million, which came at the top end of our guidance range, even as revenue fell short of expectations. This outcome underscores our operational excellence and strong execution.

Regarding production, most of our US-based contract manufacturing facilities have been operating at their targeted capacities, including both cell and module manufacturing. However, the newly commissioned enclosure facility in Arizona faced some challenges, primarily due to the longer lead time to attract and train the workforce necessary to drive productivity. This was the primary factor behind the lower than expected revenue in the quarter. Working in collaboration with our contractor, we have seen significant production improvements since September.

While this shortfall was a challenge, I want to highlight that our disciplined execution and operational focus enabled us to deliver on our profitability and bottom line objectives.

Regarding production, most of our us-based contract, manufacturing facilities have been operating at their targeted capacities, including both cell and module Manufacturing.

However, the newly commissioned enclosure facility in Arizona faced some challenges primarily due to the longer lead time to attract and train the workforce necessary to drive productivity. This was the primary factor behind the lower than expected Revenue in the quarter.

The majority of personnel required to execute our plan have now been hired, and we are on track to achieve our targeted production levels. Our adjusted EBITDA for the year was $19.5 million, which came at the top end of our guidance range, even as revenue fell short of expectations. This outcome underscores our operational excellence and strong execution. Turning to slide 14, we achieved a record level of 13.7% adjusted gross margin for the year, above the top end of our expectations. In addition, our rolling 12-month adjusted gross margin is consistently at or above 13%.

Working in collaboration with our contractor, we have seen significant production improvements. Since September, the majority of personnel required to execute our plan have not been hired, and we are on track to achieve our targeted production levels.

Chris Shelton: Turning to slide 14, we achieved a record level of 13.7% adjusted gross margin for the year, above the top end of our expectations. In addition, our rolling 12-month adjusted gross margin is consistently at or above 13%. This reflects our strong focus on productivity and successfully leveraging our supply chain. Turning to slide 15, we also finished the year with a record of approximately $1.3 billion in liquidity, up $300 million compared to the end of fiscal 2024. This includes more than $700 million in cash, with the rest available through our credit facilities. This strong position gives us confidence to make investments that will grow our business and strengthen Fluence Energy's reputation as a reliable partner. Looking ahead to fiscal 2026, we intend to invest about $200 million in our business.

Our adjusted ebita for the year was 19.5 million which came at the top end of our guidance range. Even as Revenue fell short of expectations. This outcome underscores our operational excellence and strong execution.

Turning to slide 14.

This reflects our strong focus on productivity and successfully leveraging our supply chain. Turning to slide 15, we also finished the year with a record of approximately $1.3 billion in liquidity, up $300 million compared to the end of fiscal 2024. This includes more than $700 million in cash, with the rest available through our credit facilities. This strong position gives us confidence to make investments that will grow our business and strengthen Fluence Energy's reputation as a reliable partner. Looking ahead to fiscal 2026, we intend to invest about $200 million in our business.

...and successfully leveraging our supply chain.

Planning to slide 15.

We also finished the year with a record of approximately $1.3 billion in liquidity, up $100 million compared to the end of fiscal 2024.

This includes more than 700 million dollars in cash with the rest available through our credit facilities.

This strong position gives us confidence to make investments that will grow our business and strengthen Fluence's reputation as a reliable partner.

Looking ahead to fiscal 2026.

Chris Shelton: This includes approximately $100 million in our domestic supply chain, and the rest in working capital to support 50% revenue growth. Turning to slide 16, today we are introducing our guidance for fiscal year 2026. We expect revenue in the range of $3.2 to 3.6 billion. We began this year with 85% of our guidance midpoint already in our backlog. This strong coverage materially de-risks our FY26 revenue compared to the historical level of around 60%. We anticipate realizing 1/3 of this revenue in the first half of the year, and the rest in the second half. We expect our adjusted gross margin to be between 11% and 13%. This range reflects a period of higher costs associated with the rollout of our Gridstack Pro product, which will make up 70% of our 2026 revenue.

This includes approximately $100 million in our domestic supply chain, and the rest in working capital to support 50% revenue growth. Turning to slide 16, today we are introducing our guidance for fiscal year 2026. We expect revenue in the range of $3.2 to 3.6 billion. We began this year with 85% of our guidance midpoint already in our backlog. This strong coverage materially de-risks our FY26 revenue compared to the historical level of around 60%. We anticipate realizing 1/3 of this revenue in the first half of the year, and the rest in the second half. We expect our adjusted gross margin to be between 11% and 13%.

We intend to invest about 200 million dollars in our business. This includes approximately 100 million dollars in our domestic supply chain and the rest in working capital to support 50% Revenue growth.

2022. Slide 16.

Today, we are introducing our guidance for fiscal year 2026.

We expect revenue in the range of $3.2 billion to $3.6 billion.

We Begin this year with 85% of our guidance, midpoint already in our backlog.

This strong coverage material is the risk for FY26 revenue compared to the historical level of around 60%.

We anticipate realizing 1/3 of this Revenue in the first half of the year and the rest in the second half.

This range reflects a period of higher costs associated with the rollout of our Gridstack Pro product, which will make up 70% of our 2026 revenue. We anticipate margin will improve over time as we continue to leverage our disciplined execution, and our growing scale. We expect operating expenses to grow at less than half of the pace of revenue, consistent with our guidance in prior years. This includes increased spending on sales, marketing, and R&D to support future revenue growth.

We expect our adjusted gross. Margin to be between 11% and 13%.

This range reflects a period of higher costs associated with the rollout of our grid stock Pro product.

Chris Shelton: We anticipate margin will improve over time as we continue to leverage our disciplined execution, and our growing scale. We expect operating expenses to grow at less than half of the pace of revenue, consistent with our guidance in prior years. This includes increased spending on sales, marketing, and R&D to support future revenue growth. For adjusted EBITDA, our guidance of $40 to $60 million reflects expected revenue, adjusted gross margin, and higher operating costs from planned investments in sales and product initiatives. With respect to ARR, we are initiating guidance of approximately $180 million by the end of fiscal 2026, representing over 20% year-over-year increase. In summary, with our strong liquidity, focused execution, and robust order book, we are well-positioned to deliver on our plan. With that, I would like to turn the call back to Julian for his closing remarks. Thanks, Ahmed.

Which will make up 70% of our 2026 revenue. We anticipate margins will improve over time as we continue to leverage our discipline, execution, and growing scale.

For adjusted EBITDA, our guidance of $40 to $60 million reflects expected revenue, adjusted gross margin, and higher operating costs from planned investments in sales and product initiatives. With respect to ARR, we are initiating guidance of approximately $180 million by the end of fiscal 2026, representing over 20% year-over-year increase. In summary, with our strong liquidity, focused execution, and robust order book, we are well-positioned to deliver on our plan. With that, I would like to turn the call back to Julian for his closing remarks.

We expect operating expenses to grow at less than half of the base of revenue, consistent with our guidance. In prior years, this includes increased spending on sales, marketing, and R&D to support future revenue growth.

For adjusted EBITDA, our guidance of $40 to $60 million reflects expected revenue, adjusted gross margin, and higher operating costs from planned investments in sales and product initiatives.

With respect to ARR, we are initiating guidance of approximately $180 million by the end of fiscal 2026.

Representing over 20% year-over-year increase.

In summary.

With our strong liquidity focused execution, and robust order book. We are well, positioned to deliver on our plan.

Julian Nebreda: Thanks, Ahmed. Before we take your questions, I would like to conclude with the following five takeaways. Market leadership. Demand for energy storage is accelerating globally. Fluence is capitalizing on this environment with notable wins such as the 4 GWh LEAG project in Europe, and a rapidly growing pipeline of data center customers and other large-scale deals. Product leadership. SmartStack is a key differentiator versus the competition. With increased density and a very competitive total cost of ownership, we expect SmartStack to drive a majority of future orders. Operational execution.

Chris Shelton: Before we take your questions, I would like to conclude with the following five takeaways. Market leadership. Demand for energy storage is accelerating globally. Fluence is capitalizing on this environment with notable wins such as the 4 GWh LEAG project in Europe, and a rapidly growing pipeline of data center customers and other large-scale deals. Product leadership. SmartStack is a key differentiator versus the competition. With increased density and a very competitive total cost of ownership, we expect SmartStack to drive a majority of future orders. Operational execution. We have made significant progress to strengthen our domestic supply chain advantage. We have addressed production issues at the Arizona facility, and all our domestic manufacturers are now on track to meet our expectations. Compliance and readiness. We have strengthened our ability to deliver PFE-compliant products to customers with the addition of a second domestic battery cell supplier.

Since I'm

Before we take your questions, I would like to conclude with the following five takeaways.

Market leadership.

Demand for any storage is accelerating globally.

Fluence is capitalizing on this environment with notable wins such as the 4, gigawatts in Europe.

And a rapidly growing pipeline of data center customers and other large-scale deals.

Product leadership.

Smart stack is a key, the differentiator versus the competition.

With increased density and a very competitive total cost of ownership.

We expect Smart Start to drive a majority of future orders.

We have made significant progress to strengthen our domestic supply chain advantage. We have addressed production issues at the Arizona facility, and all our domestic manufacturers are now on track to meet our expectations. Compliance and readiness. We have strengthened our ability to deliver PFE-compliant products to customers with the addition of a second domestic battery cell supplier.

Operational execution.

We have made significant progress to strengthen our domestic supply chain advantage.

We have addressed production issues at the Arizona, facility.

And all our domestic manufacturers are now on track to meet our expectations.

Compliance and readiness.

Chris Shelton: We continue to make progress towards OBBBA compliance with our Tennessee manufacturer and expect resolution ahead of regulatory deadlines. Looking forward, these achievements position us to maximize stakeholder value by consistently meeting our commitments to customers and shareholders, reinforcing our reputation as a trusted industry leader. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. As a reminder, in order to accommodate all participants in the queue, please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question coming from the line of George Gianarikas with Canaccord. Yolanda, it's now open. Hi, good morning, everyone, and thank you for taking my questions. Hey, George, good morning.

We continue to make progress towards OBBBA compliance with our Tennessee manufacturer and expect resolution ahead of regulatory deadlines. Looking forward, these achievements position us to maximize stakeholder value by consistently meeting our commitments to customers and shareholders, reinforcing our reputation as a trusted industry leader.

We have strengthened our ability to deliver PFE-compliant products to customers with the addition of a second domestic battery cell supplier.

We continue to make progress towards OBBA compliance with our Tenacity manufacturer and expect resolution ahead of regulatory deadlines.

Looking forward, this achievement positions us to maximize stakeholder value by consistently meeting our commitments to customers and shareholders.

Operator: Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. As a reminder, in order to accommodate all participants in the queue, please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question coming from the line of George Gianarikas with Canaccord. Yolanda, it's now open.

Reinforcing our reputation as a trusted industry leader.

Tellman. We will not be in the

Question and answer session.

On your telephone, wait for your name to be announced to withdraw your question. Simply press *11 again.

As a reminder, in order to accommodate all participants in the queue, please limit yourself to one question and one follow-up. Stand by while we compile.

George Gianarikas: Hi, good morning, everyone, and thank you for taking my questions.

our first question coming from the line of George Genova with canaccord, the line is now open

Julian Nebreda: Hey, George, good morning.

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

Hey yours. Good morning.

Chris Shelton: I'm just curious if you can share any thoughts on what you're seeing in the competitive environment, any changes there in the US and internationally. Thank you. I mean, internationally, not real change. It's a very competitive market, and the Chinese players continue to drive the competition in a way. In the US, the competitive market is changing. We see more and more customers that prefer to use US or non-PFE manufacturers, even if they're not required to do it because their projects are safeguarded under the law or so of that provision. I would say that, but it's an evolving matter that we see coming. That's kind of today where I see the market. Thank you. Maybe as a follow-up, Ahmed, I think I heard when you were talking about gross margin or margin guidance for 2026 that you expect margins to improve over time.

George Gianarikas: I'm just curious if you can share any thoughts on what you're seeing in the competitive environment, any changes there in the US and internationally. Thank you.

Julian Nebreda: I mean, internationally, not real change. It's a very competitive market, and the Chinese players continue to drive the competition in a way. In the US, the competitive market is changing. We see more and more customers that prefer to use US or non-PFE manufacturers, even if they're not required to do it because their projects are safeguarded under the law or so of that provision. I would say that, but it's an evolving matter that we see coming. That's kind of today where I see the market.

Uh, I'm just curious if you can share any thoughts on what you're seeing in the competitive environment, any changes there, uh, in the U.S. and internationally. Thank you.

Hey, International is not real change. You know, the the it's a very competitive market and and and, you know, the Chinese players continue to try, you know, to to try the the competition in a way. The US, the, the, the, the, the, the the competitive market is, is changing know with, we see more and more customers, ER,

That prefer to use a U.S. Manu or non-NON PFV manufacturers. Even if they're not required to do it under the law because the projects are safeguarded under the law or, you know, solve that provision. So I would say that what is an evolving matter?

George Gianarikas: Thank you. Maybe as a follow-up, Ahmed, I think I heard when you were talking about gross margin or margin guidance for 2026 that you expect margins to improve over time. Were you referring to gross margins moving beyond the 11% to 13% range you guided for next year, say, in 2027 or 2028? Thank you.

That that we see coming. So that's kind of today where I see the the market.

Chris Shelton: Were you referring to gross margins moving beyond the 11% to 13% range you guided for next year, say, in 2027 or 2028? Thank you. Yes. Yes. Hey, George. Yes. I think our goal is to continue to improve the chart that we have disclosed. I think our goal is to continue to show that chart going forward, to show the trajectory and the difference we are making. Our guidance, as you recall, was 10% to 15% in the past. I mean, I think we haven't changed that going forward. Our goal is to continue to improve that trend line. Thank you. Thanks, George. Thank you. Our next question coming from the line of Brian Lee with Goldman Sachs. Yolanda, it's now open. Hey, guys. Good morning. Thanks for taking the questions. Kudos on the quarter here.

Ahmed Pasha: Yes. Yes. Hey, George. Yes. I think our goal is to continue to improve the chart that we have disclosed. I think our goal is to continue to show that chart going forward, to show the trajectory and the difference we are making. Our guidance, as you recall, was 10% to 15% in the past. I mean, I think we haven't changed that going forward. Our goal is to continue to improve that trend line.

Thank you, and maybe as a follow-up. I think I heard when you were talking about gross margin or margin guidance for '26 that you expect margins to improve over time when you referred to gross margins, moving beyond the 11 to 13% range. You mentioned it for next year, say in '27 or '28. Thank you. Yes.

George Gianarikas: Thank you.

Yes. Hey George yes. I think our goal is to continue to improve the chart that we have disclosed. You know, I think our goal is to continue to show their chart uh going forward. You know, to show the trajectory and the difference. We are making our guidance as you recall, you know, was 10 to 15%, uh, in the past. You know, I mean, I think our we haven't changed that going forward. So our goal is to continue to improve their trend line.

Julian Nebreda: Thanks, George.

Operator: Thank you. Our next question coming from the line of Brian Lee with Goldman Sachs. Yolanda, it's now open.

Thank you. Yeah, thank you.

Thank you.

Our next question, coming from the line of Brian Lee with...

Brian Lee: Hey, guys. Good morning. Thanks for taking the questions. Kudos on the quarter here. I appreciate all the color, Julian, on the data center sizing. It sounds like that opportunity is coming to fruition here pretty quickly given the timeline you expressed. Can you maybe help us a little bit understand, first, the sizing of the market? I guess if we take the 30 GWh of data center projects in the pipeline and leads, that's maybe, if we estimate, maybe $6 billion of the total $23 billion pipeline or in that neighborhood. Is that kind of the way to think about it? What do you think the overall TAM is and what Fluence's market share could ultimately end up looking like?

hey guys. Good morning. Uh,

Chris Shelton: I appreciate all the color, Julian, on the data center sizing. It sounds like that opportunity is coming to fruition here pretty quickly given the timeline you expressed. Can you maybe help us a little bit understand, first, the sizing of the market? I guess if we take the 30 GWh of data center projects in the pipeline and leads, that's maybe, if we estimate, maybe $6 billion of the total $23 billion pipeline or in that neighborhood. Is that kind of the way to think about it? What do you think the overall TAM is and what Fluence's market share could ultimately end up looking like? Good question. Let's start with the TAM. Last quarter, we talked about a TAM of around $8 billion. I think that it's clearly the reality is proving that the numbers are significantly higher.

Thanks. Uh, thanks for taking the questions. Kudos on the quarter here. Um, I just appreciate all the color, Julian, on the data center sizing. It sounds like that opportunity is coming.

To fruition here here pretty quickly. Um, uh, given you know, the, the timeline you expressed but, um, Can can you maybe help us a little bit understand. Um, first, the sizing of the market. I guess if, if we take the 30 gigawatt hours of data center projects in the pipeline and leads, that's maybe.

Julian Nebreda: Good question. Let's start with the TAM. Last quarter, we talked about a TAM of around $8 billion. I think that it's clearly the reality is proving that the numbers are significantly higher. The market has still very, very different numbers. I said we have seen numbers of the TAM 10 times the $8 billion or more than 10 times the $8 billion. It's still unclear. I think we have to wait a little bit more. Clearly, it's a market that is expanding. Of the 30 gigas that we talked about, as of 30 September 2023, only 20% of it, one small portion of it, were in our pipeline. The rest were contacts that we started with customers since then.

If we estimate maybe, 6 billion of the total 23 billion pipeline or or in that neighborhood is is that kind of the way to think about it. And what do you think? The overall Tam is and, and what fluences market share could could ultimately end up looking like

good question. So let's start with with the with the, with the time.

Last quarter, we talked about a time of around $8 billion.

so and I think that would is clearly the the the reality is proven that the numbers significantly higher

Chris Shelton: The market has still very, very different numbers. I said we have seen numbers of the TAM 10 times the $8 billion or more than 10 times the $8 billion. It's still unclear. I think we have to wait a little bit more. Clearly, it's a market that is expanding. Of the 30 gigas that we talked about, as of 30 September 2023, only 20% of it, one small portion of it, were in our pipeline. The rest were contacts that we started with customers since then. If you ask me today, this morning, roughly half of the 30 gigas are in pipeline. The other half, we're working on it. What we're looking is, will they happen in the next two years? Do we see our product is suitable to do what they want? Generally, I think we are fine.

The market has still, you know, very, very different numbers. I said we have seen numbers of the 10, you know, 10 times, very big, you know, you know,

More than 10 times $8 billion. It's still unclear. We have 2; I think we should wait a little bit more. But clearly, it's a market and it's expanding.

all the 30 gigazone

As of September 30th.

If you ask me today, this morning, roughly half of the 30 gigas are in pipeline. The other half, we're working on it. What we're looking is, will they happen in the next two years? Do we see our product is suitable to do what they want? Generally, I think we are fine. What's a big change from telling you a quarter ago, this is an $8 billion market requiring these very, very complex capabilities, to today? I think there's a big change in terms of what we can do for what our technology, and Fluence in particular, can do for data centers. I would say the way to think about it is that there are three needs.

Only 20% of it. A small portion of where in our pipeline the rest were contacts that we started to communicate with customers since then.

Chris Shelton: What's a big change from telling you a quarter ago, this is an $8 billion market requiring these very, very complex capabilities, to today? I think there's a big change in terms of what we can do for what our technology, and Fluence in particular, can do for data centers. I would say the way to think about it is that there are three needs. One is what we call interconnection flexibility, the ability to manage the energy demand in a way that you can interconnect easier to the grid, and you can manage, and the distribution companies or the service provider can manage your demand to keep the, so that is, by itself, I would say today, the biggest driver.

You know, and then today, if you ask me today, this morning at roughly half of the 30 gigas are in pipeline. The other half we're working on it, and you know what we're looking at is, can they happen in the next 2 years? Where do we see a product that is suitable to do what they want? And generally, I think we are finding.

So, what's a big change from, you know, telling you a quarter ago, this is an $8 billion market, requiring these very, very complex capabilities to today.

Since there's a big change in terms of what we can do for, what our technology and fluids, in particular can do for Verizon centers.

One is what we call interconnection flexibility, the ability to manage the energy demand in a way that you can interconnect easier to the grid, and you can manage, and the distribution companies or the service provider can manage your demand to keep the, so that is, by itself, I would say today, the biggest driver. People who want to connect quickly to the grid and want to ensure that the data center meets the availability of the grid and can give the assurances to the grid operator that they will not disrupt the grid. We can do that today. That's what works. There's no need for improvements in our technology stack to be able to do it.

I will say the way to think about it is that there are three needs.

1 is what we call interconnection flexibility.

Chris Shelton: People who want to connect quickly to the grid and want to ensure that the data center meets the availability of the grid and can give the assurances to the grid operator that they will not disrupt the grid. We can do that today. That's what works. There's no need for improvements in our technology stack to be able to do it. The second one that is also a rising need is backup power. Historically, we haven't played that game. With our costs coming down as they are and our density improvements, we can now provide backup power and significantly reduce—I won't say eliminate, but significantly reduce—the need for diesel generators. That's the second need that we're seeing.

the ability to manage your the the energy demand in a way that you can interconnect easier to the, to the grid and you can manage and the the, the distribution companies or or the, the service provider can manage your demand to keep the the so that that is by itself, I would say to the the biggest driver

People who want to connect with and ensure that the data center meets the availability of the grid and can give assurances to the grid operator that they will not disrupt the grid.

The second one that is also a rising need is backup power. Historically, we haven't played that game. With our costs coming down as they are and our density improvements, we can now provide backup power and significantly reduce—I won't say eliminate, but significantly reduce—the need for diesel generators. That's the second need that we're seeing. We can accelerate interconnection to the grid, and we can reduce some of the costs of the diesel generators by providing backup power. The third one is the one we have talked about in our last call, this power quality, this idea that we will have to manage the variability of energy demand by AI data centers.

And we can do that today with that's what work this is. There's no, there's no. We we have no need to improvements in our technology stack to be able to do it. So very great, the second 1, that is also an arising need or Rising need is backup power. Historically, we haven't played that game but with the our cost coming down as as they are and our ability to to our density improvements, we can now provide backup power and significantly reduce

Reduce the need for diesel generators.

Chris Shelton: We can accelerate interconnection to the grid, and we can reduce some of the costs of the diesel generators by providing backup power. The third one is the one we have talked about in our last call, this power quality, this idea that we will have to manage the variability of energy demand by AI data centers. If you ask me today, that hasn't been the first thing. There are other technologies that can address that. That's the first one. The second one is that it is a need that is not as big as we thought it was going to be. It's probably around that $8 billion number. It is something that data centers, when they looked at what they're doing, their speed to power is a much more important element than this one, because the other one they can manage in some other way.

No, so that's the second news that we're seeing. You know, you we can accelerate interconnection to the green and we can reduce some of the cost of the diesel, generators for providing backup.

The third 1 is the 1. We have talked about in the in the in our last call this you know, power quality. This idea that we can you know we will have to manage the variability of energy demand but

If you ask me today, that hasn't been the first thing. There are other technologies that can address that. That's the first one. The second one is that it is a need that is not as big as we thought it was going to be. It's probably around that $8 billion number. It is something that data centers, when they looked at what they're doing, their speed to power is a much more important element than this one, because the other one they can manage in some other way. We are committed to delivering the three products: the interconnection flexibility to accelerate interconnection, the backup power capabilities, and these two that we can do today.

AI data centers.

If you ask me today, there are a couple of points to consider. The first is that there are other technologies that can address the problem. The second is that it is a need that is not as big as we thought it was going to be. So, it's...

it's probably that 8, you know, around that 8 billion dollar number

Chris Shelton: We are committed to delivering the three products: the interconnection flexibility to accelerate interconnection, the backup power capabilities, and these two that we can do today. We're very well-positioned to do. SmartStack is the densest project in the world. It is a project that, because of the way we're designed, provides very good safety, better than, I would say, very, very good. Then third, our cybersecurity, our total control on software, our ability to ensure that no one else can get in. The power quality is something we're working on with our inverter manufacturers. We'll get a result quickly, but it is still a working project. We thought that was going to be a gating item. The backup power is going to be a gating item for us to serve this market. That's no longer the case. I would say it's a cherry on the top.

And you know, it's something that data centers, when they looked at what they're doing, their speed to power is a much more important element than this one because the other one they can manage in some other way. We are committed to delivering the three products.

We're very well-positioned to do. SmartStack is the densest project in the world. It is a project that, because of the way we're designed, provides very good safety, better than, I would say, very, very good. Then third, our cybersecurity, our total control on software, our ability to ensure that no one else can get in. The power quality is something we're working on with our inverter manufacturers. We'll get a result quickly, but it is still a working project. We thought that was going to be a gating item. The backup power is going to be a gating item for us to serve this market. That's no longer the case. I would say it's a cherry on the top.

The interconnection flexibility to accelerating the connection, the backup power capabilities, and these 2 that we can do today. And we are very well positioned to do smart. Stack is a dentist project in the world. It is a project that because of the pots are the way. We are designed provides very good. Safety better than I would say, you know, very very good.

And then it started this, you know, our cyber security, our total control and software, our ability to ensure that no 1 else can get in, you know? So the the power quality is something we're working on with our inverter manufacturers. We'll get a result quickly but but it is still, you know, it's still a work in, but we thought that was going to be a gating item.

Chris Shelton: If you can deliver the last two, and this one is great, but it's not a gating item. Great market, multiples of what we told you in terms of what we do, and we don't need to do a major technology. My last point, we don't have a clear view today. This is just starting on how much we can capture, but I will say we are very well-positioned to do it. Safety, density. Some of our competitors are claiming density, which is 25% less than what we can do. That tells you we can do very, very well, and we have our Jeff. Jeff comes with knowing how to serve this market. He's been one of the instructions, go and get this done. This is not only happening in the US. This is a global phenomenon. We have our pipeline.

If you can deliver the last two, and this one is great, but it's not a gating item. Great market, multiples of what we told you in terms of what we do, and we don't need to do a major technology. My last point, we don't have a clear view today. This is just starting on how much we can capture, but I will say we are very well-positioned to do it. Safety, density. Some of our competitors are claiming density, which is 25% less than what we can do.

The backup power is going to be a gate-in item for us to serve this market. That's no longer the case. You know, I would say it's a cherry on the top if you can deliver the last two, and this one is way, but you know it's not a game so great market.

Multiples of what we told you in terms of, ah, ah, what we do and what we are, we will need to do a major technology, and my last point.

We, you know, I can... we don't have a clear view today. This is just starting or how much we can capture, but I will say,

That tells you we can do very, very well, and we have our Jeff. Jeff comes with knowing how to serve this market. He's been one of the instructions, go and get this done. This is not only happening in the US. This is a global phenomenon. We have our pipeline. It's mostly US today, but we're starting to see pipeline coming both out of Australia and Europe. Sorry for the long answer, but we're excited about this opportunity.

We are very well positioned to do that safety. Then City. You know, some more competitors are claiming density which is 20 25% less than what we can do. So that tells you we can do, we can do very, very well and we are, you know, we have we are Jeff.

Chris Shelton: It's mostly US today, but we're starting to see pipeline coming both out of Australia and Europe. Sorry for the long answer, but we're excited about this opportunity. Yeah. No, I can definitely sense that. I appreciate all the color. Maybe just one more question on that topic. From a P&L timing and impact perspective, can you give us a sense of the conversion timeline for this data center pipeline? Is any of it embedded in your revenue guide for fiscal 2026? Lastly, margins relative to core margins. Are these going to be higher margin just given the customer subset you're dealing with? Curious on the impact on margins as well. Thank you, guys. I will say that of the 30 gigas, half are 2026 order intake, half are 2027, give or take.

Brian Lee: Yeah. No, I can definitely sense that. I appreciate all the color. Maybe just one more question on that topic. From a P&L timing and impact perspective, can you give us a sense of the conversion timeline for this data center pipeline? Is any of it embedded in your revenue guide for fiscal 2026? Lastly, margins relative to core margins. Are these going to be higher margin just given the customer subset you're dealing with? Curious on the impact on margins as well. Thank you, guys.

Yes, it comes with knowing how to serve this market. One of the instructions is to go and get this done, and this is not only happening in the U.S. It's a global phenomenon. We have, you know, our pipeline is mostly U.S. today, but we're starting to see pipeline coming in both Arab, Australia, and Europe. So, sorry for the long answer. Long answer about that, we're excited about this opportunity.

Yeah, no. I I I can, uh, I can definitely sense that. I appreciate all the color, uh, may maybe just, um, 1 1 more question on that topic. Uh, from a

Julian Nebreda: I will say that of the 30 gigas, half are 2026 order intake, half are 2027, give or take. Most likely, projects that will be converting to order intake later in the year, no revenue for 2026. We have to see how much revenue for 2027 is unclear. In terms of margin, hey, this is a new segment. I don't want to talk about it publicly. What I will say is that we can provide a lot of value to our customers, a lot of value. We can deliver our product quickly, give them the confidence on our security, the best density, and so we are very confident that we can create a lot of value to our customers. That's why we're concentrating.

Chris Shelton: Most likely, projects that will be converting to order intake later in the year, no revenue for 2026. We have to see how much revenue for 2027 is unclear. In terms of margin, hey, this is a new segment. I don't want to talk about it publicly. What I will say is that we can provide a lot of value to our customers, a lot of value. We can deliver our product quickly, give them the confidence on our security, the best density, and so we are very confident that we can create a lot of value to our customers. That's why we're concentrating. Thank you. Our next question coming from the line of Dylan Nassano with Wolfe Research. Yolanda, it's now open. Hey, good morning, everyone. Thanks for taking my question. Hey, Dylan.

26 order intake, half of our 27, give or take, you know, and most likely projects that will be, you know, will convert to order and take later in the year, not revenue for 26, we have to see how much revenue for 2070 is unclear in terms of margin. You know, hey, this is a new segment. I want to talk about the publicly, but but I will say is that we

A lot of us.

A lot of what we can deliver is our product weekly.

Operator: Thank you. Our next question coming from the line of Dylan Nassano with Wolfe Research. Yolanda, it's now open.

Give them the confidence on our security is the best density and we are, you know, and and so we are we are very confident that we can create a lot of value to our customers. That's that's what we're concentrating.

Dylan Nassano: Hey, good morning, everyone. Thanks for taking my question.

Thank you. Our next question is coming from the line of essay with wolf research. Your line is now open.

Julian Nebreda: Hey, Dylan.

Hey, good morning, everyone. Thanks for taking my question.

Chris Shelton: I just wanted to go back to the Q4 kind of underperformance versus the guide. I know that in the previous quarter, manufacturing delays kind of came up, but it sounded like maybe those were resolved and you were operating on schedule again. I just want to check what kind of changed between the last call and now. Are these incremental kind of problems that popped up? Anything you can give us just to kind of boost confidence going into the quarter that these are kind of resolved at this point? Thanks, Dylan. Clearly, we're disappointed with what happened. I mean, first thing. I don't want to sound apologetic in what I'm telling you, but what do we have? We have our suppliers in the US, many. Let's say the three main suppliers.

Dylan Nassano: I just wanted to go back to the Q4 kind of underperformance versus the guide. I know that in the previous quarter, manufacturing delays kind of came up, but it sounded like maybe those were resolved and you were operating on schedule again. I just want to check what kind of changed between the last call and now. Are these incremental kind of problems that popped up? Anything you can give us just to kind of boost confidence going into the quarter that these are kind of resolved at this point?

I just wanted.

Just just wanted to go back to the, the Q4 kind of underperformance versus the guide. I know that in the previous quarter manufacturing, delays kind of came up but it sounded like maybe those were resolved and and you were operating uh on schedule again. So I just want to check, you know, what kind of change between the last call and now and like are these incremental kind of problems that popped up and anything you can give us just to kind of push confidence going into the quarter that, you know, these are these are kind of

Julian Nebreda: Thanks, Dylan. Clearly, we're disappointed with what happened. I mean, first thing. I don't want to sound apologetic in what I'm telling you, but what do we have? We have our suppliers in the US, many. Let's say the three main suppliers. Out of the three main suppliers, two are doing great. I will say even more, the two that have the more complex process are doing very well. We are very happy, ahead of schedule, doing wonderful, no problem. We have a less complex process, which is enclosure manufacturing.

Uh, resolved at this point.

Chris Shelton: Out of the three main suppliers, two are doing great. I will say even more, the two that have the more complex process are doing very well. We are very happy, ahead of schedule, doing wonderful, no problem. We have a less complex process, which is enclosure manufacturing. When we met last quarter, we had a plan that was going to be able to allow the delivery of our revenue for the year, but it required a major staffing process that I think we underestimated the ability to staff that facility. I think that today, we have done two things. We have clearly gone out and continued staffing and preparing people, and we are essentially done in terms of staffing. There are still some people, but it is essentially done.

So we have, you know, and I, you know, clearly we're disappointed with what happened. No, I mean, first thing, but I don't want to sound apologetic in what I'm telling you. But yeah, so what do we have? We have our suppliers in the U.S., many. But let's say the three main suppliers.

Out of the three main suppliers, two are doing well, right? I was saying even more about the two that have the more complex process.

You know, we are doing very well. So we're very happy, ahead of schedule, doing wonderful, you know, no problem. We have our less complex.

When we met last quarter, we had a plan that was going to be able to allow the delivery of our revenue for the year, but it required a major staffing process that I think we underestimated the ability to staff that facility. I think that today, we have done two things. We have clearly gone out and continued staffing and preparing people, and we are essentially done in terms of staffing. There are still some people, but it is essentially done. We have made some changes in the way we are with our contract manufacturer to ensure that we meet our—that we need to facilitate the manufacturing process.

Process which is enclosure manufacturing. When we met last quarter. We had a plan that was going to be able to was going to allow the delivery of our revenue for the year.

But that is required. A mayor Staffing process.

That I think we underestimated the ability to staff that facility.

Chris Shelton: We have made some changes in the way we are with our contract manufacturer to ensure that we meet our—that we need to facilitate the manufacturing process. That's the right word. I think the two combinations, having staffed the place—and we're talking about a significant number of people. This is roughly 5,600 people that we needed for that facility to work with three shifts and all of that. We were essentially fully staffed, and with the changes in operations, we are meeting our numbers. I think we are—we expect to do—we were doing at the end of last quarter, one and a half enclosures per day. We are already at five, and we are ramping up. I don't know if we will be able to meet our numbers very well. We are very confident today.

And I think that today, we have done two things: we have clearly gone out and continued your staffing and prepared people. We're essentially done in terms of that, and there are still some people, but it is essentially done. We have made some changes in the way we are working with our contract manufacturer to ensure that we...

That's the right word. I think the two combinations, having staffed the place—and we're talking about a significant number of people. This is roughly 5,600 people that we needed for that facility to work with three shifts and all of that. We were essentially fully staffed, and with the changes in operations, we are meeting our numbers. I think we are—we expect to do—we were doing at the end of last quarter, one and a half enclosures per day.

That we need our that that we need that to facilitate the manufacturing process, that's the the right word.

And and I think the 2 combinations have. In fact, the the the place and we're talking about, you know, significant number of people, this is, you know, roughly 5, 600 people that that, that we need it for that facility to work with 3 Chiefs and all of that we were, were fully essentially fully staffed and with the changes in, in, in operations, we are, we are meeting our numbers. No worries in. We are we expect to do, we were doing

We are already at five, and we are ramping up. I don't know if we will be able to meet our numbers very well. We are very confident today. Unfortunately, we did not meet what we could not deliver on the revenue. We are disappointed, but we learned very quickly. Our operational manufacturing team is very, very good, and they have put in place the correct measures to do this.

Chris Shelton: Unfortunately, we did not meet what we could not deliver on the revenue. We are disappointed, but we learned very quickly. Our operational manufacturing team is very, very good, and they have put in place the correct measures to do this. Yeah. Yeah. Dylan, the only thing I would add is I think from our perspective, as Julian said, yes, because of the labor shortage, we were roughly one and a half containers per day. Fast forward, we added 500 people. We are now running at five containers per day, which is in line with our expectations for the quarter. We feel pretty good where we are. Equally importantly, I think we pulled our levers to deliver on our profitability commitments. As you saw, the margin and the EBITDA, we are in line with our top end of our range. Got it. Thank you.

Ahmed Pasha: Yeah. Yeah. Dylan, the only thing I would add is I think from our perspective, as Julian said, yes, because of the labor shortage, we were roughly one and a half containers per day. Fast forward, we added 500 people. We are now running at five containers per day, which is in line with our expectations for the quarter. We feel pretty good where we are. Equally importantly, I think we pulled our levers to deliver on our profitability commitments. As you saw, the margin and the EBITDA, we are in line with our top end of our range.

At the end of last quarter, you know, 1 and a half, the closure per day. We already at 5 and we we are ramping up and I don't know if the the we will be able to meet our numbers very well. So the we are we are very confident today. Unfortunately, we did not meet what we do. We could not deliver on the revenue and we are disappointed, but we learned very quickly and my our operational. Manufacturing team is very, very good. And they have put in place the, the the correct measure to do this. Yeah, yeah, I didn't. The only thing I would add is I think that from our perspective as Julian said, you know, yes, because of the labor shortage. We were, uh, we were roughly 1 and a half container per day fast forward, we added 500 people. We are now running at 5, The Continuous per day, and which is in line with our expectations for the quarter. So we feel pretty good where we are, but equally importantly, I think we we pulled on levels to deliver on our uh profitability commitments.

Dylan Nassano: Got it. Thank you. I appreciate that. My follow-up, I just wanted to check on this new cell supplier. Can you just give us any more color around how much incremental capacity this may get you? Are you prepaying for any cells similar to what you did with AESC? Yeah, mostly just curious, does this get you net additional capacity to serve the US market?

As you saw the margin and the ibida we are in in line with our top end of our range. So

Chris Shelton: I appreciate that. My follow-up, I just wanted to check on this new cell supplier. Can you just give us any more color around how much incremental capacity this may get you? Are you prepaying for any cells similar to what you did with AESC? Yeah, mostly just curious, does this get you net additional capacity to serve the US market? Yeah, I can take that question. Dylan, yes, I think this gives us enough capacity to serve our projected loads for the next couple of years. We feel pretty good about what we have signed. In terms of the deposits, no material deposit commitments. I think as we get the deliveries, we make those payments. Thank you. Our next question coming from the line of Ameet Thakkar with BMO Capital Markets. Yolanda, it's now open. Hi, good morning.

Got it, thank you. I appreciate that. Um, and then my follow-up, I just wanted to check on this new supplier.

Can you just give us any more color around? You know, how much incremental capacity? This may get you? Um,

Ahmed Pasha: Yeah, I can take that question. Dylan, yes, I think this gives us enough capacity to serve our projected loads for the next couple of years. We feel pretty good about what we have signed. In terms of the deposits, no material deposit commitments. I think as we get the deliveries, we make those payments.

US market.

Operator: Thank you. Our next question coming from the line of Ameet Thakkar with BMO Capital Markets. Yolanda, it's now open.

Yeah, I can take that question, Dylan. Yes, I think this gives us enough capacity to serve our projected loads for the next couple of years, so we feel pretty good about what we have signed. In terms of the deposits, there are no material deposit commitments. I think it's just as we get the deliveries, we make those payments.

Ameet Thakkar: Hi, good morning. Thank you for taking my questions. I just wanted to kind of go back to kind of the implied EBITDA margin for this year versus last year. I mean, it looks like the EBITDA margin is down. I know the gross margin is also kind of down sequentially. It looked like the implied ASPs in your bookings are actually up pretty significantly kind of quarter over quarter. I was just wondering if you could kind of walk us through why, I guess, the gross margin is lower year over year versus kind of a rolling 12 months. Thanks.

Thank you. Our next question, coming from the lineup, with BML, Capitol Park Markets. Your line is now open.

Chris Shelton: Thank you for taking my questions. I just wanted to kind of go back to kind of the implied EBITDA margin for this year versus last year. I mean, it looks like the EBITDA margin is down. I know the gross margin is also kind of down sequentially. It looked like the implied ASPs in your bookings are actually up pretty significantly kind of quarter over quarter. I was just wondering if you could kind of walk us through why, I guess, the gross margin is lower year over year versus kind of a rolling 12 months. Thanks. I think the ASPs, your question is, yes, I think is down. No surprise, I think ASPs are down roughly, I think, give or take 10% or so. In terms of the gross margin, I think we basically are pretty much in line.

Julian Nebreda: I think the ASPs, your question is, yes, I think is down. No surprise, I think ASPs are down roughly, I think, give or take 10% or so. In terms of the gross margin, I think we basically are pretty much in line. I think the EBITDA margin, as you asked, is obviously there's an operating leverage because volume was less. Last year, our overall revenue was $2.7 billion. This is $2.3 billion. Yes, I think.

Hi. Um, good morning. Um, thank you for taking my questions. Um I just wanted to kind of go back to kind of the implied Evita margin for uh for this year versus last year. I mean it looks like the the margin is is down. Um and I know the growth margin is also kind of down sequentially, but it looks like the the implied HP in your booking to actually help pretty significantly. Kind of quarter over quarter. I was just wondering if you could kind of walk us through why. Um I guess the gross margin is lower year-over-year versus uh kind of a rolling 12 months. Thanks.

Chris Shelton: I think the EBITDA margin, as you asked, is obviously there's an operating leverage because volume was less. Last year, our overall revenue was $2.7 billion. This is $2.3 billion. Yes, I think. The more important thing, frankly, from our perspective is as we grow the top line, we will benefit from the operating leverage. Our goal is to continue to grow EBITDA. Obviously, that is what the shareholders care. At the end of the day, top line is great, but at the end of the day, that should translate into the bottom line. That's what we as a management team also are on the same page. Stay tuned. I think our goal is to continue to improve the top line and also the bottom line. I know you kind of talked about a couple of kind of uses of liquidity for next year.

So, I think the ASPs, your question is yes, I think, uh, is down. But no surprise. I think, uh, ASPs are down roughly, uh, I think give or take 10% or so. Uh, in terms of the gross margin, I think, uh, we basically are pretty much in line. I think the EBITDA margin, uh,

The more important thing, frankly, from our perspective is as we grow the top line, we will benefit from the operating leverage. Our goal is to continue to grow EBITDA. Obviously, that is what the shareholders care. At the end of the day, top line is great, but at the end of the day, that should translate into the bottom line. That's what we as a management team also are on the same page. Stay tuned. I think our goal is to continue to improve the top line and also the bottom line.

As you ask, you know, is obviously the operating leverage, you know, because volume was less last year. Overall revenue was $27 million. This is $2.3 million. So yes, I think, but the more important thing, frankly, from our perspective is as we grow the top line, we will benefit from the operating leverage, and our goal is to continue to grow EBITDA.

Uh, uh, obviously that is what the shareholders care about. You know, at the end of the day, top line is great, but that should translate into the bottom line, and that's what we as a management team are also on the same page.

Ameet Thakkar: I know you kind of talked about a couple of kind of uses of liquidity for next year. Just in terms of the free cash flow expectations relative to that $50 million EBITDA guidance at the midpoint, any kind of, I guess, guideposts there, please?

So stay tuned. I think our goal is to continue to improve the top 9 and also the bottom line.

Chris Shelton: Just in terms of the free cash flow expectations relative to that $50 million EBITDA guidance at the midpoint, any kind of, I guess, guideposts there, please? Yes, I think the $50 million EBITDA, I talked about the working capital, roughly $100 million as our revenue is growing from $2.3 to 3.4 billion. A billion dollar or so of additional, as you recall, we said in the past, working capital needs are roughly 10% of our growth in revenue. About $100 million of working capital needs, and then $100 million of investments in the domestic content, as I mentioned in my remarks. Beyond that, we do not have any material commitments. I think next year, our goal is to be free cash flow positive as our revenue grows and our EBITDA grows.

Julian Nebreda: Yes, I think the $50 million EBITDA, I talked about the working capital, roughly $100 million as our revenue is growing from $2.3 to 3.4 billion. A billion dollar or so of additional, as you recall, we said in the past, working capital needs are roughly 10% of our growth in revenue. About $100 million of working capital needs, and then $100 million of investments in the domestic content, as I mentioned in my remarks. Beyond that, we do not have any material commitments. I think next year, our goal is to be free cash flow positive as our revenue grows and our EBITDA grows.

And then I I know you you kind of talked about a couple of um kind of uses of uh of uh of liquidity for for next year. But just in terms of kind of like the uh kind of the free cash flow expectations relative to that $50 million income of an EA doc guidance, uh, at the midpoint, uh, any kind of, um, kind of, uh, I guess guidepost there. Please.

Chris Shelton: I think that is the goal. This year, $50 million is the EBITDA, but then we have working capital needs of $100 million. I think more importantly, or equally importantly, is liquidity will remain very robust with this working capital use. Our goal is to continue to strengthen our balance sheet with growing cash and our credit facilities. Feel pretty good where we're going to land at the end of the year. Thank you very much. Thank you. Our next question coming from the line of Julian Dumal and Smith with Jefferies. Yolanda, it's now open. Hey, good morning, team. Thank you guys very much. Nicely done this quarter. Just following up, I'm in a little bit about some of the margin commentary and just filtering that back in with AESC.

I think that is the goal. This year, $50 million is the EBITDA, but then we have working capital needs of $100 million. I think more importantly, or equally importantly, is liquidity will remain very robust with this working capital use. Our goal is to continue to strengthen our balance sheet with growing cash and our credit facilities. Feel pretty good where we're going to land at the end of the year.

So yes, I think the 50 million ibida I talked about, you know, the working capital roughly hundred million dollars as a revenue is growing by uh from 3 uh 2.3% in the past. You know, working capital needs are roughly 10% of our growth in Revenue. So about 100 million dollars of working capital needs and then hundred million dollars of investments in the domestic, uh, content. As I mentioned in my remarks, uh, beyond that we don't have any material, uh, commitments. So I think uh, next year, our goal is to be free cash flow positive as our Revenue grows and our ebita growth. So so I think that is the goal but this year uh 50 million is the EB dog. But then we have working capital needs of 100 million dollars.

But but I think, more importantly, or equally importantly is liquidity will remain very robust.

Ameet Thakkar: Thank you very much.

Uh, with this working capital use, our goal is to continue to strengthen our balance sheet with growing cash and our credit facilities. So, I feel pretty good about where we're going to land at the end of the year.

Operator: Thank you. Our next question coming from the line of Julian Dumal and Smith with Jefferies. Yolanda, it's now open.

Thank you very much.

Thank you.

Julien Dumoulin-Smith: Hey, good morning, team. Thank you guys very much. Nicely done this quarter. Just following up, I'm in a little bit about some of the margin commentary and just filtering that back in with AESC. Can you comment a little bit on how you think about margins being tethered to whatever happens with respect to your domestic supply, whether that's with AESC or incremental supply?

Chris Shelton: Can you comment a little bit on how you think about margins being tethered to whatever happens with respect to your domestic supply, whether that's with AESC or incremental supply? Is that part of the commentary about margin improvement? Related, can you just give a little bit more of a detailed update around AESC specifically? I know that you sort of procured a backup here, if you will. How is that relationship evolving here? How would you frame out volumes from one side or the other side of that supply arrangement now at this point? In terms of margins, in terms of AESC, I mean, any deal we might do with AESC will be agreed? No. That's the way you need to think about it. When and if it happens, we'll communicate what it means in terms of margins.

Is that part of the commentary about margin improvement? Related, can you just give a little bit more of a detailed update around AESC specifically? I know that you sort of procured a backup here, if you will. How is that relationship evolving here? How would you frame out volumes from one side or the other side of that supply arrangement now at this point?

Julian Nebreda: In terms of margins, in terms of AESC, I mean, any deal we might do with AESC will be agreed? No. That's the way you need to think about it. When and if it happens, we'll communicate what it means in terms of margins. I think that Ameet's point was more general. When you looked at our performance, at least since I got here, I got a company with negative margins of 4%. We're now on a running average of month average. We're now at 13.7%. My point is we all here want to commit to continue showing a growing line.

Our next question coming from the lineup. Jillian, Duman Smith with Jeffrey. Yolen is now open. Hey, good morning team, thank you guys, very much. Nicely, done this quarter. Um, just following up, I'm at a little bit about some of the margin commentary and just filtering that back in with aesc. Can you comment a little bit about how you think about margins being Tethered to, um, whatever happens with respect to your, your domestic Supply, whether that's with ASC or inclusive Supply? Does that does that? Is that part of the commentary about margin Improvement and then related, can you just give a little bit more of a detailed update around aesc specifically. I know that you've sort of quote unquote procured a backup here, if you will. But how is that relationship evolving here? How would you frame out volumes from 1 side or the other side of that Supply Arrangement? Now at this point,

Chris Shelton: I think that Ameet's point was more general. When you looked at our performance, at least since I got here, I got a company with negative margins of 4%. We're now on a running average of month average. We're now at 13.7%. My point is we all here want to commit to continue showing a growing line. That's kind of what we're doing. We're finding ways to do it today and continue to work on it. That was more of that coming in that direction. In terms of AESC, what I would say is that we are meeting the OBBA compliance. It is a complex process. We have been able to make a lot of progress. Generally, you can look at it from three areas. You need to meet the IP, and I think we have a solution that's done.

When and if it happens we'll communicate what it means in terms of margins. And and and I think that omits point was more General when you looked at our performance in at least. Since I got here we got I got other company was negative, margins of 4% were now you know, on a rolling average of 12 month average. We're now a 13.7

That's kind of what we're doing. We're finding ways to do it today and continue to work on it. That was more of that coming in that direction. In terms of AESC, what I would say is that we are meeting the OBBA compliance. It is a complex process. We have been able to make a lot of progress. Generally, you can look at it from three areas. You need to meet the IP, and I think we have a solution that's done. The IP for that production facility meets the criteria of OBBA3, OBBA, or will meet the criteria.

So you know, but my point is, we all here want to commit to continue showing a growing line. That's kind of what we're doing, and we're finding ways to do it today and continue to work on it. That was more of that coming in that direction.

in terms of ASC,

What I was saying is that we are, you know, the the maybe the ob3 obba compliance is is a complex process.

We have been able to make a lot of progress and generally you can look at it from 3 areas.

Chris Shelton: The IP for that production facility meets the criteria of OBBA3, OBBA, or will meet the criteria. We have the material assistance, the need that the suppliers of the facility cannot come from FPFP suppliers. We have a plan that will deliver that. We have the ownership, and the ownership is the one where we are still debating. We are making good progress. We are committed to resolve it. We have not reached a final deal. We have always said we're not the only option in town. There are other ways that they can resolve this issue. I don't want to—we clearly believe that we are the best option from my point of view, but they can do something different. On the new supplier, I mean, what it is is we're generally diversified suppliers. That's a rule of life.

We have the material assistance, the need that the suppliers of the facility cannot come from FPFP suppliers. We have a plan that will deliver that. We have the ownership, and the ownership is the one where we are still debating. We are making good progress. We are committed to resolve it. We have not reached a final deal. We have always said we're not the only option in town. There are other ways that they can resolve this issue. I don't want to—we clearly believe that we are the best option from my point of view, but they can do something different.

That you need to meet the the, the IP and I think we have a solution that's done and we we can the IP that in that for that production facility meets the criteria. So, all bbbb A3 obba or will meet the cafeteria. Then we have the, you know, material assistance. The need that the suppliers of the facility cannot come from a pfp a suppliers.

We have a plan that will deliver that, and then we have the knowledge and the ownership. This is the one where we are filled with babies. We are making good progress. We're committed to resolving it, but we haven't, you know, we have not — ah, ah, ah — we have not reached a final deal.

On the new supplier, I mean, what it is is we're generally diversified suppliers. That's a rule of life. We're diversified suppliers, and the demand we see is very big. We need to continue to meet the growing demand. Our philosophy of diversified suppliers and the growing demand calls for the second supplier. That's where we are. We see this as one of our competitive advantages. We are a first mover in this area, and we want to continue being the first mover. That's the reason for our strategy.

What we have always said is, we're not the only option in town. So, you know, there are other ways that they can resolve this issue. And, you know, if I'm not, I don't want to, you know, we clearly believe that we are the best option from my point of view. But, you know, they can do something different.

Chris Shelton: We're diversified suppliers, and the demand we see is very big. We need to continue to meet the growing demand. Our philosophy of diversified suppliers and the growing demand calls for the second supplier. That's where we are. We see this as one of our competitive advantages. We are a first mover in this area, and we want to continue being the first mover. That's the reason for our strategy. Just to clarify that real quickly, basically, your current plan and current margin expectations assume that you're served with AESC. Would it be improved or detrimental to shift the supply if I heard you right or understand? Yeah. I will say the following. As I said, a potential deal with AESC will be agreed to the current numbers. Got it. That's the answer I can provide. All right.

Yeah. So that, and then, you know, on the new supplier, I mean, what it is is, you know, we're generally diversifying suppliers—that's a rule of life. So we're diversifying suppliers, and the demand we see is very, you know, very big. So we need to continue to meet the growing demand. So, you know, our philosophy of diversifying our suppliers and...

And and, you know, and and and the growing demand call for the the second supplier.

Ahmed Pasha: Just to clarify that real quickly, basically, your current plan and current margin expectations assume that you're served with AESC. Would it be improved or detrimental to shift the supply if I heard you right or understand?

So that's that's where we are. We are, you know, we see this as 1 of our competitive advantages. We are a first mover in this area and we want to continue of being the first mover. So that's the reason for our strategy. Yeah.

Julian Nebreda: Yeah. I will say the following. As I said, a potential deal with AESC will be agreed to the current numbers.

Hey. So just to clarify that real quickly, it basically your your current plan and current margin expectations assume that you're served with aesc, and would it be improved or detrimental to, to shift the supply if I heard you write or understand? Yeah, I mean I will say the following

Julien Dumoulin-Smith: Got it.

Julian Nebreda: That's the answer I can provide. All right.

The as I said, the a potential deal with ASC will be a creative to the, to the current numbers that that, you know, got it. I can provide, you know,

Chris Shelton: You're already haircutting it. Okay. Understood. No, I'm not haircutting. I haven't done the deal yet, Julian. Okay. All right. Got it. Thank you. No, no. That's why I asked. Thank you, guys. I appreciate it. Thank you. Thank you. Our next question coming from the line of David Arcaro with Morgan Stanley. Yolanda, it's now open. Hey. Thanks so much. Good morning. Good morning. In terms of the data center pipeline, I was curious just to get what you're currently seeing. Is this bringing larger project sizes versus your current backlog? Is it more US-heavy in terms of region where you're seeing that demand? Would be curious what kind of duration you might be exploring for those types of projects. Yeah. I would say that generally, we've talked during the call.

Julien Dumoulin-Smith: You're already haircutting it. Okay. Understood.

Julian Nebreda: No, I'm not haircutting. I haven't done the deal yet, Julian.

Yeah. All right, you ready? Ready here? Cutting it. Okay. Understood. No, I'm not in the garden now.

Julien Dumoulin-Smith: Okay. All right. Got it. Thank you. No, no. That's why I asked. Thank you, guys. I appreciate it.

Julian Nebreda: Thank you.

Thank you. No, no, that's why I asked. Thank you, guys. I appreciate it.

Operator: Thank you. Our next question coming from the line of David Arcaro with Morgan Stanley. Yolanda, it's now open.

Thank you.

David Arcaro: Hey. Thanks so much. Good morning.

But our car with Mark and Stanley yen is now open.

Julian Nebreda: Good morning.

Hey, uh, thanks so much. Good morning.

David Arcaro: In terms of the data center pipeline, I was curious just to get what you're currently seeing. Is this bringing larger project sizes versus your current backlog? Is it more US-heavy in terms of region where you're seeing that demand? Would be curious what kind of duration you might be exploring for those types of projects.

Um, good morning.

Julian Nebreda: Yeah. I would say that generally, we've talked during the call. One of the big drivers of the elasticity of demand, where you can see the elasticity of demand for our technology as prices have come down, has been how projects are getting bigger. We have today 38 projects that are 1 gigawatt-hour or more. I don't think that the data centers are naturally bigger.

Chris Shelton: One of the big drivers of the elasticity of demand, where you can see the elasticity of demand for our technology as prices have come down, has been how projects are getting bigger. We have today 38 projects that are 1 gigawatt-hour or more. I don't think that the data centers are naturally bigger. They're in line with what we have when you look at it. Some are smaller, some are bigger, but generally in line. In terms of where geographically today, I will say the majority come from the US. We have seen some pipeline developing in APAC, and Europe is a little bit behind. We will see this as a global market. That's kind of our view. In terms of duration, it depends on the use case.

In terms of the UM data center pipeline, I was curious, uh, just to get your thoughts on what you're currently seeing. Is this bringing larger project sizes versus your current backlog? You know, is it more U.S.-heavy, um, in terms of region? Where are you seeing that demand? And I would be curious, um, what kind of duration, uh, you might be exploring for those types of projects. Yeah, I will say that generally, you know, we talked to her in the call with...

1 of the big drivers of the electricity of the man that where you can see the elasticity of the man, with, for our technology and price has come down has been how projects are getting bigger. And we are to the 38 projects that are 1 , 1.

They're in line with what we have when you look at it. Some are smaller, some are bigger, but generally in line. In terms of where geographically today, I will say the majority come from the US. We have seen some pipeline developing in APAC, and Europe is a little bit behind. We will see this as a global market. That's kind of our view. In terms of duration, it depends on the use case. We see from two to long-duration storage, both the whole nothing below two. That's where we are.

I don't think that the data centers are, you know, bigger. Naturally, bigger than in line with what we have. When you look at some, smaller; some are bigger, but generally in line.

In terms of where, geographically, today, I will say that the majority come from the U.S.

Chris Shelton: We see from two to long-duration storage, both the whole nothing below two. That's where we are. Okay, got it. That's helpful. I was just curious about strong order intake in the quarter, in this past quarter. I was wondering if you could talk to whether there's a common driver there that you're seeing. It doesn't seem to be data center growth just yet, if I'm interpreting that correctly. What are you seeing in terms of what drove the strong order rebound? Yeah, good. It was Australia, the big driver of the strong quarter in the strong order intake. We have these deals in Australia, as you know, that were delayed in 2025. We signed them all, and most of them occurred late in the year. That's a big driver of it.

View, in terms of the ratio, use depends on the use case. We see, from tool to tool, you know,

David Arcaro: Okay, got it. That's helpful. I was just curious about strong order intake in the quarter, in this past quarter. I was wondering if you could talk to whether there's a common driver there that you're seeing. It doesn't seem to be data center growth just yet, if I'm interpreting that correctly. What are you seeing in terms of what drove the strong order rebound?

Long duration storage, both the... the whole, the whole nothing below $2. But that's, that's what we are.

No. Okay, got it. Um, that's helpful.

Um, and then I was just curious about, um,

Julian Nebreda: Yeah, good. It was Australia, the big driver of the strong quarter in the strong order intake. We have these deals in Australia, as you know, that were delayed in 2025. We signed them all, and most of them occurred late in the year. That's a big driver of it. We see for 2026, the US being the big driver and a little bit of a change. We'll see some—I expect to see some data center stuff happening in 2026, so late in the year, most likely.

Uh, strong order intake in the quarter. In this past quarter, I was wondering if you could talk to whether there's a common driver there that you're seeing. It doesn't seem to be data center growth just yet, if I'm interpreting that correctly. So, uh, what are you seeing in terms of what drove um, yeah, strong. No, no.

Chris Shelton: We see for 2026, the US being the big driver and a little bit of a change. We'll see some—I expect to see some data center stuff happening in 2026, so late in the year, most likely. Okay. Great. That all makes sense. Thank you so much. Thank you. Our next question coming from the line of Mark Strauss with JP Morgan. Yolanda, it's now open. Yes. Good morning. Thanks for taking our questions. I just wanted to go back to the second domestic content supplier. On that, I think you said that your needs are met for the next couple of years. I just wanted to clarify, is that capacity available today, or is there kind of a ramp period that we should be expecting? No. I think the capacity will be available in about the next 10, 11 months.

Good. Good. You know it was Australia. The big driver of the strong quarter in 20 in 2020, the strong order intake. We have these deals in Australia as you know, that we were delayed in 20 in 2500 and they all most of them occur later in the year. So that that's a big driver of of it. But, you know, we see for 26,

David Arcaro: Okay. Great. That all makes sense. Thank you so much.

The us being the Big Driver and you know and and a little bit of a change and we'll see some we I expect to see some data center stuff happening in 26. So later in the year it looks like

Operator: Thank you. Our next question coming from the line of Mark Strauss with JP Morgan. Yolanda, it's now open.

Okay, great. Uh, that all makes sense. Thank you so much.

Mark Strouse: Yes. Good morning. Thanks for taking our questions. I just wanted to go back to the second domestic content supplier. On that, I think you said that your needs are met for the next couple of years. I just wanted to clarify, is that capacity available today, or is there kind of a ramp period that we should be expecting?

Yes, good morning. Thanks for taking our questions. I just wanted to go back to the second domestic content supplier on that. I think you said that...

Julian Nebreda: No. I think the capacity will be available in about the next 10, 11 months. I think the capacity that we need to serve our load, as we discussed during the call, we have about 85% to 90% of our revenue in our backlog. We have already secured the capacity for that. We do not need this capacity. We are now locking in additional capacity to basically secure our future business.

Your needs are met for the next couple of years, but I just wanted to clarify, is that capacity available today, or is there kind of a ramp period that we should be expecting? No, I think the capacity...

Chris Shelton: I think the capacity that we need to serve our load, as we discussed during the call, we have about 85% to 90% of our revenue in our backlog. We have already secured the capacity for that. We do not need this capacity. We are now locking in additional capacity to basically secure our future business. Okay. On the long-duration side, is SmartStack the only go-to-market solution that you have there? Are you potentially looking to partner up, maybe being a systems integrator for some of the more emerging technologies that are out there? Thank you. SmartStack will be our—what we're going to do. We believe that very competitive. It will be SmartStack. Got it. Thank you. Thank you. Our next question coming from the line of Christine Cho with Barclays. Yolanda, it's now open. Good morning. Thank you for taking the questions.

Mark Strouse: Okay. On the long-duration side, is SmartStack the only go-to-market solution that you have there? Are you potentially looking to partner up, maybe being a systems integrator for some of the more emerging technologies that are out there? Thank you.

is available, will be available in about, uh, the next 10 or 11 months. But I think the capacity that we need to serve our Lord, as we discussed during the call, you know, we have about 85-90% of our revenue in our backlog, and we have already secured the capacity for that. So we don't need this capacity, but we are now locking in additional capacity to basically, uh, secure our future business.

Julian Nebreda: SmartStack will be our—what we're going to do. We believe that very competitive. It will be SmartStack.

Okay? And then on the the long duration side uh is is smart stack. The only go to market solution that you have there? You potentially look into partner up, maybe being a a systems integrator for some of the the more emerging technologies that are out there. Thank you.

Well, a smart stack is what we're going to learn. We believe that.

Mark Strouse: Got it. Thank you.

Very competitive. So we will be smart.

Operator: Thank you. Our next question coming from the line of Christine Cho with Barclays. Yolanda, it's now open.

Thank you.

Thank you.

Christine Cho: Good morning. Thank you for taking the questions.

Our next question, coming from the line of Christine Cho with Barclays. Seline is now open.

Chris Shelton: Good morning. With respect to the data centers, you mentioned the three different ways that you can serve data centers: the interconnection, backup, and power quality. Would you be able to sort of break down the opportunity set here and maybe rank it? Is half of the opportunity for power quality, and backup is the smallest? For duration, you mentioned two hours is the low end. I'm assuming that's for power quality. Is it similar for those who are interested in getting storage for interconnection purposes? Yeah. First of all, that's what I would like to highlight. We have these three needs. What's wonderful about our technology, and now talking about battery storage, not necessarily ourselves, is that we can stack up these three needs with the same technology solution.

Julian Nebreda: Good morning.

Christine Cho: With respect to the data centers, you mentioned the three different ways that you can serve data centers: the interconnection, backup, and power quality. Would you be able to sort of break down the opportunity set here and maybe rank it? Is half of the opportunity for power quality, and backup is the smallest? For duration, you mentioned two hours is the low end. I'm assuming that's for power quality. Is it similar for those who are interested in getting storage for interconnection purposes?

Julian Nebreda: Yeah. First of all, that's what I would like to highlight. We have these three needs. What's wonderful about our technology, and now talking about battery storage, not necessarily ourselves, is that we can stack up these three needs with the same technology solution. While the other technology solutions can do one or the other, they cannot do what we do, which is facilitate interconnection, do backup power, and do quality. That makes the difference. I think that's what makes our solution so attractive to our data centers.

Uh good morning. Thank you for taking the questions um with respect to the data centers. Um you know you mentioned the 3, different ways that you can serve data centers. Um the inner connection back up and power quality, would you be able to sort of like break down the opportunities that here and and maybe rank it like is half of the opportunity for power quality and backup is the smallest. Um, and for duration you mentioned 2 hours is the low end. I'm assuming that's for, um, Power quality, is it similar for those who are interested, um, in getting storage for interconnection purposes?

Yeah, first of all, is that that's what you know.

Chris Shelton: While the other technology solutions can do one or the other, they cannot do what we do, which is facilitate interconnection, do backup power, and do quality. That makes the difference. I think that's what makes our solution so attractive to our data centers. We can resolve three problems with one technology, so that's very, very good. In terms of the two hours, this depends on the need of the customer. I cannot really put out, can tell you, this is what drives it. Generally, you are right on the view that backup power and interconnection flexibility will tend to be longer duration, while power quality will tend to be shorter duration. Generally, that's true. I think you need to think about this differently. It's the ability to serve the three needs with the same infrastructure.

I would like to highlight. And so we have these 3, you know needs what's, what's the wonderful about our technology? And now talking about battery storage, not necessarily the ourselves, is that we can stack up. These 3 needs with the same technology solution, know. Well, the other Technology Solutions can do 1 or the other, but they cannot do what we do, which is

Facilitating interconnection does the work of power and does quality know; and that makes the difference.

We can resolve three problems with one technology, so that's very, very good. In terms of the two hours, this depends on the need of the customer. I cannot really put out, can tell you, this is what drives it. Generally, you are right on the view that backup power and interconnection flexibility will tend to be longer duration, while power quality will tend to be shorter duration. Generally, that's true. I think you need to think about this differently. It's the ability to serve the three needs with the same infrastructure. That's what we are aiming for because that's what I think that will make our technology the preferred technology solution to address these problems.

You know, and I think that's what makes our solution so attractive to our data centers. We can resolve three problems with one technology, you know. So that's very, very good.

In terms of the, you know, I, you know, the 2 hours, these depend on the need of the customer. So I cannot really put out, I can tell you, this is a.

Chris Shelton: That's what we are aiming for because that's what I think that will make our technology the preferred technology solution to address these problems. Okay. If you are able to vertically integrate with AESC, how should we think about what the mix will be between the AESC supply and the second supplier? With this second supplier, is the contract for a set amount of time? Lastly, for your international projects, are you also diversifying your cell suppliers there? We always need to diversify internationally. We are just being diversified locally. My view on this, and I have, is that we convert any battery into a great technology solution. That's what we do as a company. Talking about who the battery supplier is not as relevant. Shouldn't be as relevant. My customers shouldn't care, and my financial investor shouldn't care.

Christine Cho: Okay. If you are able to vertically integrate with AESC, how should we think about what the mix will be between the AESC supply and the second supplier? With this second supplier, is the contract for a set amount of time? Lastly, for your international projects, are you also diversifying your cell suppliers there?

To address these problems.

Okay.

Julian Nebreda: We always need to diversify internationally. We are just being diversified locally. My view on this, and I have, is that we convert any battery into a great technology solution. That's what we do as a company. Talking about who the battery supplier is not as relevant. Shouldn't be as relevant. My customers shouldn't care, and my financial investor shouldn't care. The real value we bring is the ability to make any battery great, no matter what. That was my answer to it. I don't know what the mix will be. As I said, for my customers, it will be irrelevant from a product delivery and capabilities standpoint, what batteries I put in.

Um, and then, if you are able to vertically integrate with aesc, how should we think about, you know what, the mix will be between, you know, the aesc supply and the second supplier, um, and with this second supplier is a contract for a set amount of time and then, uh, lastly for your International projects, are you also a diversifying your sales suppliers there?

We are, we are, we always need to diversify.

We are just being diverse.

buy locally my view on this and I have you know, is that

Is it we convert any battery?

Into a great technology solution. That's what we do as a company. So, about who the battery supplier is, we should not be afraid of it.

My customer care and my financial, you know,

Chris Shelton: The real value we bring is the ability to make any battery great, no matter what. That was my answer to it. I don't know what the mix will be. As I said, for my customers, it will be irrelevant from a product delivery and capabilities standpoint, what batteries I put in. For you, doesn't it matter in that if you are using AESC and you're vertically integrated, it's higher margin for you versus? Yeah. I care about my customers. That's what I do. Yeah. We will figure out that part. The important thing is the ability to success or the route to success in meeting your customer needs. That's what drives the company. You're right. We might be able to capture a—if we were to be vertically integrated, there will be more margin on one or the other.

The investor took care. What I what what the real value we bring is the ability to make any battery great.

No matter what. So that way, my answer to it—I don't know what the mix will be, but as I said to you, for my customers, it will be irrelevant.

from uh, from a, a

Christine Cho: For you, doesn't it matter in that if you are using AESC and you're vertically integrated, it's higher margin for you versus?

From a form delivery and capabilities, what batteries are produced?

Julian Nebreda: Yeah. I care about my customers. That's what I do. Yeah. We will figure out that part. The important thing is the ability to success or the route to success in meeting your customer needs. That's what drives the company. You're right. We might be able to capture a—if we were to be vertically integrated, there will be more margin on one or the other. The way to win is meet the customer needs. That's the way to win. If you try to optimize something else, you lose this side. Your customer needs, and that drives profitability. That drives margin. That drives everything.

But, for you, it doesn't matter that if you are using AESC in your vertically integrated, it's a higher margin for you versus... yeah. But, you know, I care about my...

Chris Shelton: The way to win is meet the customer needs. That's the way to win. If you try to optimize something else, you lose this side. Your customer needs, and that drives profitability. That drives margin. That drives everything. Thank you. Our next question coming from the line of Justin Clare with Ross Capital. Yolanda, it's now open. Hey. Good morning. Thanks for the time here. I just wanted to follow up on the second source of the cell supply here. I think you mentioned it'll be available in the next 10 to 11 months. Just at the beginning of the year, do you expect to depend on the source of cells from AESC for domestic US projects until that second source is available?

The importance of serving you the ability to succeed or the route to success in meeting your customer needs; you know that's what drives a company. Well, you're right. You know we might be able to get it captured if we were to be vertically integrated. It will be more marginal one way or the other, but my real way to win is to build the customer base. That's the way to do it. Not, you know, if you try to optimize something else.

Operator: Thank you. Our next question coming from the line of Justin Clare with Ross Capital. Yolanda, it's now open.

You'll get you, you lose the sight of your customer needs, and that drives profitability, that drives margin, that drives everything.

Justin Clare: Hey. Good morning. Thanks for the time here. I just wanted to follow up on the second source of the cell supply here. I think you mentioned it'll be available in the next 10 to 11 months. Just at the beginning of the year, do you expect to depend on the source of cells from AESC for domestic US projects until that second source is available? I'm just trying to get at how important is it for you to resolve the challenges with the FEOC restrictions by early calendar 2026 in terms of thinking through the outlook for the year.

No, next question. Coming from the line of Justin and Claire with Rod Capital, you let us now open.

Chris Shelton: I'm just trying to get at how important is it for you to resolve the challenges with the FEOC restrictions by early calendar 2026 in terms of thinking through the outlook for the year. Very, very important. That's what I will say. We have a plan, and we've been working on it, and it's very, very important to do it. That's what I can tell you. I mean, we will get it done. Okay. Good to hear. Just a follow-up on the data center opportunity. I was wondering, are you seeing or could you talk about the ability to kind of successfully accelerate interconnection with storage being added to data centers? Is this being done today, or do you need the regulatory framework to change in order to support this use case?

Julian Nebreda: Very, very important. That's what I will say. We have a plan, and we've been working on it, and it's very, very important to do it. That's what I can tell you. I mean, we will get it done.

Hi, good morning, thanks for the time here. So I just wanted to follow up on the the second source of the cell Supply here. So I I think you mentioned, uh, it'll be available in the next 10 to 11 months. Um, so it's just at the beginning of the year. Do you uh, expect to depend on the source of cells from aesc for domestic us projects until that Second Source uh is available and then. So I'm just trying to get at, you know, how important is it for you to resolve the uh, challenges with the Fiat restrictions by uh, early calendar 2026, uh, in terms of, uh, you know, thinking through the the outlook for uh, for the year.

Justin Clare: Okay. Good to hear. Just a follow-up on the data center opportunity. I was wondering, are you seeing or could you talk about the ability to kind of successfully accelerate interconnection with storage being added to data centers? Is this being done today, or do you need the regulatory framework to change in order to support this use case? Wondering what the timing of orders associated with that use case might be.

I mean, very, very, very important. That's what I will say. We have a plan, and we've been working on it, and it's very, very important to do it. So that's what I can tell you. I mean, we will get it done.

Chris Shelton: Wondering what the timing of orders associated with that use case might be. We haven't signed any of these contracts yet. This is a work in progress. We believe we have the ability to ensure that the data centers meet the interconnection restrictions that they have. I'll say yes. I don't think you need a major regulatory change. It's just ensuring that you meet whatever the grid is offering. Got it. Okay. Thank you. Thank you. Ladies and gentlemen, that's all the time we have for our Q&A session. I will now turn it back to Chris for any closing comments. Thanks, Livia, and thanks to everyone for participating on today's call. We look forward to speaking with you again by first quarter results, if not before then. Please do look forward to meeting with everyone as your questions arise.

Julian Nebreda: We haven't signed any of these contracts yet. This is a work in progress. We believe we have the ability to ensure that the data centers meet the interconnection restrictions that they have. I'll say yes. I don't think you need a major regulatory change. It's just ensuring that you meet whatever the grid is offering.

Okay, got good to hear, uh, and then just a follow-up. Um, on the data center opportunity was wondering, you know, are you seeing, um, uh, you know, or could you talk about the ability to kind of successfully accelerate interconnection with, um, storage being added to Data Centers? Is this is this being done today. Um, or do you need the regulatory framework to to change in order to support this use case? Uh, and then wondering, you know what the the timing of orders uh associated with

with that, use case might be

We we have we haven't signed any of these contracts yet. So this is a work in progress, but we believe we can, we can we have the ability to

Justin Clare: Got it. Okay. Thank you.

Ensure that the data centers meet the interconnection restrictions that they have. So, you know, I'll say yes, you know, I'll send you need a major, you know, regulatory change. It's just assuring that you meet whatever the grid is offering.

Operator: Thank you. Ladies and gentlemen, that's all the time we have for our Q&A session. I will now turn it back to Chris for any closing comments.

Got it. Okay, thank you.

Yeah.

Thank you.

Chris Shelton: Thanks, Livia, and thanks to everyone for participating on today's call. We look forward to speaking with you again by first quarter results, if not before then. Please do look forward to meeting with everyone as your questions arise.

Ladies and gentlemen, that's all the time we have for our Q&A session. I will now turn it back to Chris for any closing comments.

Thanks, Olivia, and thanks to everyone for participating. On today's call, we look forward to speaking with you again.

As your questions arise.

Chris Shelton: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Thank you for your participation, and you may now disconnect.