Q3 2026 FuelCell Energy Inc Earnings Call

September 2, 2026

Speaker #1: Thank you for standing by. My name is Jale, and I'll be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy Q3 fiscal 2026 financial results conference call.

Operator: Thank you for standing by. My name is Jael, and I will be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy third quarter of fiscal 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. I would now like to turn the conference over to Michael Bishop, Chief Financial Officer. You may begin.

Operator: Thank you for standing by. My name is Jael, and I will be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy third quarter of fiscal 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. I would now like to turn the conference over to Michael Bishop, Chief Financial Officer. You may begin.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, simply press star one again. I would now like to turn the conference over to Michael Bishop, Chief Financial Officer.

Speaker #1: You may begin.

Speaker #2: Thank you, operator. Good morning, everyone, and thank you for joining us on the call today. This morning, FuelCell Energy released our financial results for the third quarter of fiscal year 2026, and our earnings press release is available in the investor section of our website at www.fuelcellenergy.com.

Michael Bishop: Thank you, operator. Good morning, everyone, and thank you for joining us on the call today. This morning, FuelCell Energy released our financial results for the third quarter of fiscal year 2026, and our earnings press release is available in the Investors section of our website at www.fuelcellenergy.com. In addition to this call and our earnings press release, we have posted a slide presentation on our website. The webcast is being recorded and will be available for replay on our website approximately 2 hours after we conclude. Before we begin, please note that some information that you will hear or be provided with today consists of forward-looking statements within the meaning of the Securities Exchange Act of 1934.

Speaker #2: In addition to this call and our earnings press release, we have posted a slide presentation on our website. The webcast is being recorded and will be available for replay on our website approximately two hours after we conclude.

Speaker #2: Before we begin, please note that some information you will hear or be provided with today consists of forward-looking statements within the meaning of the Securities and Exchange Act of 1934.

Speaker #2: Such statements express our expectations, beliefs, and intentions regarding the future, and include statements concerning our anticipated financial results, plans and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology, our anticipated market opportunities, and our business plans and strategies.

Michael Bishop: Such statements express our expectations, beliefs, and intentions regarding the future and include statements concerning our anticipated financial results, plans, and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology, our anticipated market opportunities, and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the safe harbor statement, in the slide presentation, and in our filings with the SEC, particularly the Risk Factors section of our most recent Form 10-K and any subsequently filed quarterly reports on Form 10-Q.

Speaker #2: Our actual future results could differ materially from those described in, or implied by, such forward-looking statements because of a number of risks and uncertainties.

Speaker #2: More information regarding such risks and uncertainties is available in the safe harbor statement in the slide with the SEC, particularly the risk factor section of our most recent Form 10-K, and any subsequently filed quarterly reports on Form 10-Q.

Speaker #2: During this call, we'll be discussing certain non-GAAP financial measures, and we refer you to our website, our earnings press release, and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures.

Michael Bishop: During this call, we will be discussing certain non-GAAP financial measures, and we refer you to our website, our earnings press release, and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website under the investor relations tab. For this call, I am joined by Jason Few, our President and Chief Executive Officer. Following our prepared remarks, the leadership team will be available to take your questions. I will now hand the call over to Jason for opening remarks. Jason?

Speaker #2: Our earnings press release and a copy of today's webcast presentation are available on our website under the Investor Relations tab. For this call, I am joined by Jason Few, our President and Chief Executive Officer.

Speaker #2: Following our prepared remarks, the leadership team will be available to take your questions. I will now hand the call over to Jason for opening remarks.

Speaker #2: Jason?

Speaker #3: Thank you, Mike. And good morning, everyone. Thank you for joining us today. I am pleased to welcome you to our third quarter fiscal year 2026 earnings call.

Jason Few: Thank you, Mike, and good morning, everyone. Thank you for joining us today. I am pleased to welcome you to our Q3 fiscal year 2026 earnings call. In the Q3, we took an important step in the commercial development of FuelCell Energy's data center strategy. The rapid growth of AI and high-density computing is creating power requirements that the existing grid cannot address quickly enough. For data center customers, access to power has become a critical constraint on development. The AI economy will not be constrained by silicon. It will be constrained by access to electricity. We believe distributed generation will become an essential layer of AI infrastructure, enabling the grid to expand while allowing AI factories to deploy on commercial timelines rather than utility timelines.

Speaker #3: In the third quarter, we took an important step in the commercial development of FuelCell Energy's data center strategy. The rapid growth of AI and high-density computing is creating power requirements that the existing grid cannot address quickly enough.

Speaker #3: For data center customers, access to power has become a critical constraint on development. The AI economy will not be constrained by silicon; it will be constrained by access to electricity.

Speaker #3: We believe distributed generation will become an essential layer of AI infrastructure, enabling the grid to expand while allowing AI factories to deploy on commercial timelines rather than utility timelines.

Speaker #3: Our FuelCell Energy blocks are designed to address the constraint by providing clean, continuous, behind-the-meter power that can be deployed at the customer site and scaled as demand grows.

Jason Few: Our FuelCell Energy Block are designed to address the constraint by providing clean, continuous, behind-the-meter power that can be deployed at the customer site and scaled as demand grows. In the Q3, we began to convert that value proposition into commercial commitments. We secured our first order for FuelCell Energy Block to supply baseload power for data center applications, increased committed backlog to $1.3 billion, and added $2.4 billion of awarded capacity backlog, resulting in total committed and awarded capacity backlog of $3.6 billion as of 31 July. Awarded capacity backlog is a new category reflecting multi-phase contracts and capacity reservations, which I will let Mike detail in his remarks. Subsequent to the quarter end, we closed a 75-megawatt capacity reservation agreement with a major co-location data center operator for a Texas project.

Speaker #3: In the third quarter, we began to convert that value proposition into commercial commitments. We secured our first order for FuelCell Energy blocks to supply baseload power for data center applications, increased committed backlog to $1.3 billion, and added $2.4 billion of awarded capacity backlog, resulting in a total committed and awarded capacity backlog of $3.6 billion as of July 31.

Speaker #3: Awarded capacity backlog is a new category reflecting multi-phase contracts and capacity reservations, which I'll let Mike detail in his remarks. Subsequent to the quarter-end, we closed a 75-megawatt capacity reservation agreement with a major colocation data center operator for a Texas project.

Speaker #3: We believe our utility-scale distributed generation platform is uniquely positioned to help accelerate AI infrastructure by reducing time to power, extending the existing electric grid with reliable behind-the-meter generation, and addressing many of the permitting and community challenges associated with large-scale power development.

Jason Few: We believe our utility-scale distributed generation platform is uniquely positioned to help accelerate AI infrastructure by reducing time to power, extending the existing electric grid with reliable behind-the-meter generation, and addressing many of the permitting and community challenges associated with large-scale power development. We expect to provide additional detail upon execution of definitive agreements. That is the central message for the quarter. We are moving from a growing pipeline to tangible commercial commitments while advancing the manufacturing capacity and operating capabilities required to deliver at scale. At the outset, I want to talk about this commercial commitment. During the quarter, we signed a capital equipment purchase agreement with Fit Energy to supply power solutions for data center applications. It covers up to 380 megawatts across four phases, sized to the customer's deployment schedule.

Speaker #3: We expect to provide additional detail upon execution of definitive agreements. That is the central message for the quarter. We are moving from a growing pipeline to tangible commercial commitments while advancing the manufacturing capacity and operating capabilities required to deliver at scale.

Speaker #3: At the outset, I want to talk about this commercial commitment. During the quarter, we signed a capital equipment purchase agreement with Fit Energy to supply power solutions for data center applications.

Speaker #3: It covers up to 380 megawatts across four phases, sized to the customer's deployment schedule. We received an upfront deposit on the initial 30-megawatt phase, which we expect to begin delivering in the fourth quarter.

Jason Few: We received an upfront deposit on the initial 30-megawatt phase, which we expect to begin delivering in Q4, and the remaining phases are at Fit Energy's election. At the same time, our fiscal 2026 year-to-date pipeline has grown to roughly 10 gigawatts of active proposals, and it reflects our progress toward proving our value proposition for data centers, which now accounts for about 97% of the total Q3 pipeline. I have said before that pipeline is a leading indicator, not a result, and I hold to that. The measure that matters is conversion, and Fit Energy is commercial proof that FuelCell Energy Block system can be the solution to some of the current public perception challenges facing data centers by providing scalable, clean, quiet, behind-the-meter power for data centers. The most important signal isn't that our pipeline is larger. It's that customers are buying differently.

Speaker #3: And the remaining phases are at Fit Energy's election. At the same time, our fiscal 2026 year-to-date pipeline has grown to roughly 10 gigawatts of active proposals.

Speaker #3: And it reflects our progress toward proving our value proposition for data centers, which now accounts for about 97% of the total third quarter pipeline.

Speaker #3: I have said before that pipeline is a leading indicator, not a result, and I hold to that. The measure that matters is conversion, and FitEnergy is commercial proof that FuelCell Energy platform blocks systems can be the solution to some of the current public perception challenges facing data centers by providing scalable, clean, quiet, behind-the-meter power for data centers.

Speaker #3: The most important signal isn't that our pipeline is larger; it's that customers are buying differently. AI has made power availability a strategic decision, rather than simply a utility decision.

Jason Few: AI has made power availability a strategic decision rather than simply a utility decision. In addition to our domestic backlog, we continue to execute on our existing global projects. In Q3, we successfully completed the repowering of the 42 modules Gyeonggi Green Energy project in South Korea. This execution demonstrates our capability to manage complex utility-scale repowering projects overseas while maintaining strict operational standards. Furthermore, it validates our long-term technology replacement cycle, proving that our existing fleet represents a continuous source of service and product revenues as Energy Blocks reach their natural replacement intervals. Important to converting our existing pipeline and backlog is our ability to scale, because demand only matters if we can meet it. To support our increasing backlog, we are systematically expanding our manufacturing capacity.

Speaker #3: In addition to our domestic backlog, we continue to execute on our existing global projects. In the third quarter, we successfully completed the repowering of the 42-module Yongyi Green Energy Project in South Korea.

Speaker #3: This execution demonstrates our capability to manage complex, utility-scale repowering projects overseas while maintaining strict operational standards. Furthermore, it validates our long-term technology replacement cycle, proving that our existing fleet represents a continuous source of service and product revenues as energy blocks reach their natural replacement intervals.

Speaker #3: Important to converting our existing pipeline and backlog is our ability to scale, because demand only matters if we can meet it. To support our increasing backlog, we are systematically expanding our manufacturing capacity.

Speaker #3: We are actively expanding our Torrington, Connecticut, manufacturing facility to support the multi-megawatt demand of the AI factory and data center markets. Our immediate operational milestone is to increase our annualized production rate at Torrington to its current full capacity of 100 megawatts, with achievement of this milestone expected in October 2026.

Jason Few: We are actively expanding our Torrington, Connecticut, manufacturing facility to support the multi-megawatt demand of the AI factory and data center markets. Our immediate operational milestone is to increase our annualized production rate at Torrington to its current full capacity of 100 megawatts, with achievement of this milestone expected in October 2026. This near-term target represents a vital step toward our larger long-term goal of reaching 500 megawatts of annualized production capacity by June 2028, an expansion we are already investing in. This expansion is progressing on schedule. During Q3, we finalized the comprehensive factory design, made significant equipment purchase commitments, and began the installation of a new high-volume tape caster that will dramatically increase our throughput. It is important to emphasize that this expansion is fully funded.

Speaker #3: This near-term target represents a vital step toward our larger long-term goal of reaching 500 megawatts of annualized production capacity by June 2028, an expansion we are already investing in.

Speaker #3: This expansion is progressing on schedule. During the third quarter, we finalized the comprehensive factory design, made significant equipment purchase commitments, and began the installation of a new high-volume tape caster that will dramatically increase our throughput.

Speaker #3: It is important to emphasize that this expansion is fully funded. We are executing this capital spend in alignment with our committed backlog to ensure disciplined capital allocation, with the goal of meeting the high-volume requirements of global hyperscalers without building ahead of the market.

Jason Few: We are executing this capital spend in alignment with our committed backlog to ensure disciplined capital allocation, with the goal of meeting the high volume requirements of global hyperscalers without building ahead of the market. As we scale, one aspect of our fuel cells has come into particular focus, and that is the sourcing strategy for our materials. Our Carbonate platform provides a powerful supply chain advantage, and it does not rely on rare earth minerals and is scandium-free, utilizing globally abundant commodity metals like nickel and steel rather than highly volatile critical minerals, or those that are predominantly mined in potentially sanctioned countries. Our platform was designed around the abundant industrial materials, not scarce critical minerals.

Speaker #3: As we scale, one aspect of our fuel cells has come into particular focus, and that is the sourcing strategy for our materials. Our carbonate platform provides a powerful supply chain advantage, as it does not rely on rare earth minerals and is scandium-free. It utilizes globally abundant commodity metals like nickel and steel, rather than highly volatile critical minerals or those that are predominantly mined in potentially sanctioned countries.

Speaker #3: Our platform was designed around abundant industrial materials, not scarce critical minerals. With over 90% of our supply chain sourced domestically in the United States, and approximately 93% of our FuelCell Energy block components reusable or recyclable through a take-back program, we offer our customers unmatched supply security in the current uncertain geopolitical environment.

Jason Few: With over 90% of our supply chain sourced domestically in the United States and approximately 93% of our FuelCell Energy Block components reusable or recyclable through a take-back program, we offer our customers unmatched supply security in the current uncertain geopolitical environment. Along with growing demand for FuelCell Energy power systems, our technology is being validated on a global stage by an increasingly diverse group of world-class blue-chip partners. We are proud to report that we have delivered and installed the first two Carbonate fuel cell carbon capture modules at ExxonMobil's Rotterdam complex in the Netherlands. This delivery represents a pivotal operational milestone under our joint development agreement with ExxonMobil Technology and Engineering Company.

Speaker #3: Along with the growing demand for FuelCell Energy power systems, our technology is being validated on a global stage by an increasingly diverse group of world-class, blue-chip partners.

Speaker #3: We are proud to report that we have delivered and installed the first two carbonate fuel cell carbon capture modules at ExxonMobil's Rotterdam complex in the Netherlands.

Speaker #3: This delivery represents a pivotal operational milestone under our joint development agreement with ExxonMobil Technology and Engineering Company. This installation is the world's first industrial-scale demonstration of our jointly developed carbon capture technology, successfully moving it out of the laboratory and into a real-world application.

Jason Few: This installation is the world's first industrial-scale demonstration of our jointly developed carbon capture technology, successfully moving it out of the laboratory and into a real-world application, addressing hard-to-abate, low CO2 emissions from an industrial facility. This Rotterdam demonstration is expected to validate our fuel cells performance under commercial operating conditions, positioning us as an essential technology partner for global industrial decarbonization. During the Q3, we also signed a memorandum of understanding with Siemens to design and supply the electrical balance of plant systems for our fuel cell installations. The primary goal of this collaboration is to accelerate physical deployment and lower the cost of large-scale commercial projects exceeding 100 megawatts. We plan to jointly develop integrated distributed energy systems that combine our clean fuel cells with battery energy storage, advanced microgrid controls, and medium-voltage electrical equipment.

Speaker #3: Addressing hard-to-abate, low-CO2 emissions from an industrial facility, this Rotterdam demonstration is expected to validate our fuel cells' performance under commercial operating conditions, positioning us as an essential technology partner for global industrial decarbonization.

Speaker #3: During the third quarter, we also signed a memorandum of understanding with Siemens to design and supply the electrical balance of plant systems for our FuelCell installations. The primary goal of this collaboration is to accelerate physical deployment and lower the cost of large-scale commercial projects exceeding 100 megawatts.

Speaker #3: We plan to jointly develop integrated distributed energy systems that combine our clean fuel cells with battery energy storage, advanced microgrid controls, and medium-voltage electrical equipment.

Speaker #3: By optimizing the electrical balancer plant, we can manage the full spectrum of power—from minutes down to microseconds. We believe this integrated solution, to be developed in collaboration with a global leader, would provide the electrical reliability required to support critical high-density AI data center workloads.

Jason Few: By optimizing the electrical balance of plant, we can manage the full spectrum of power variability from minutes down to microseconds. We believe this integrated solution to be developed in collaboration with a global leader would provide the electrical reliability required to support critical high-density AI data center workloads. The opportunity in front of FuelCell Energy continues to grow. Our responsibility is straightforward: execute. We are focused on converting commercial demand into contracted backlog, scaling manufacturing with discipline, and delivering for our customers. Those are the measures by which we should be judged, and they will remain our priorities as we work to build long-term shareholder value. With that, I will turn the call over to our Chief Financial Officer, Mike Bishop, to provide a breakdown of our financial performance.

Speaker #3: The opportunity in front of FuelCell Energy continues to grow. Our responsibility is straightforward: execute. We are focused on converting commercial demand into contracted backlog, scaling manufacturing with discipline, and delivering for our customers.

Speaker #3: Those are the measures by which we should be judged, and they will remain our priorities as we work to build long-term shareholder value. With that, I'll turn the call over to our Chief Financial Officer, Mike Bishop, to provide a breakdown of our financial performance.

Speaker #1: Thank you, Jason. Today I will walk through our third quarter fiscal 2026 financial results, which demonstrate our robust capital position alongside a transitional period for our top-line revenue.

Michael Bishop: Thank you, Jason. Today, I will walk through our Q3 fiscal 2026 financial results, which demonstrate our robust capital position alongside a transitional period for our top-line revenue. Total revenue for Q3 fiscal 2026 was $33 million, a 29% decline compared to $46.7 million in Q3 fiscal 2025. Breaking this total down, products revenue was $18 million, down from $26 million in the prior year quarter. This reflects fewer module deliveries to South Korea as we completed the repowering of Gyeonggi Green Energy Fuel Cell Park, delivering all 42 modules committed under that program since 2024.

Speaker #1: Total revenue for the third quarter of fiscal 2026 was $33 million, a 29% decline compared to $46.7 million in the third quarter of fiscal 2025.

Speaker #1: Breaking this total down, product revenue was $18 million, down from $26 million in the prior year quarter. This reflects fewer module deliveries to South Korea as we completed the repowering of the Geumjeong Green Energy FuelCell Park, delivering all 42 modules committed under that program since 2024.

Speaker #1: Service revenue was $2.4 million, compared to $3.1 million a year ago. Generation revenue was $8.8 million, down from $12.4 million, driven principally by lower output from plants in our generation portfolio, including our 7.4-megawatt Groton project, which was out of service for the full quarter pending a planned upgrade that we expect to complete in fiscal 2027.

Michael Bishop: Service revenue was $2.4 million, compared to $3.1 million a year ago. Generation revenue was $8.8 million, down from $12.4 million, driven principally by lower output from plants in our generation portfolio, including our 7.4-megawatt Groton project, which was out of service for the full quarter pending a planned upgrade that we expect to complete in fiscal 2027. Finally, advanced technology contract revenue was $3.8 million compared to $5.3 million in Q3 fiscal 2025. We recorded a gross loss of $24.5 million in Q3 fiscal 2026, compared to a gross loss of $5.1 million in Q3 fiscal 2025. The primary driver was $17 million of charges recorded during the quarter, consisting of approximately $4 million to reduce the carrying value of certain inventories to net realizable value and approximately $13 million for losses on firm purchase commitments.

Speaker #1: Finally, advanced technology contract revenue was $3.8 million compared to $5.3 million in the third quarter of fiscal 2025. We recorded a gross loss of $24.5 million in the third quarter of fiscal 2026, compared to a gross loss of $5.1 million in the third quarter of fiscal 2025.

Speaker #1: The primary driver was $17 million of charges recorded during the quarter, consisting of approximately $4 million to reduce the carrying value of certain inventories to net realizable value, and approximately $13 million for losses on firm purchase commitments.

Speaker #1: Both were recorded in connection with phase zero of our capital equipment purchase agreement, or CEPA, with Fit Energy due to the fact that our current product costs and manufacturing overhead exceed the contractual pricing established under that agreement.

Michael Bishop: Both were recorded in connection with Phase Zero of our Capital Equipment Purchase Agreement, or CEPA, with Fit Energy due to the fact that our current product costs and manufacturing overhead exceed the contractual pricing established under that agreement. We operated at an annualized production rate of approximately 37 megawatts during the quarter, which remains below the volume at which we expect our cost structure to align with market-based pricing for orders of this scale. These charges are expected to be limited to identified inventory and purchase commitments for Phase Zero and do not reflect our expectations regarding the overall economic value of the agreement. Loss from operations was $46.7 million, a 51% decrease compared to an operating loss of $95.4 million in Q3 fiscal 2025.

Speaker #1: We operated at an annualized production rate of approximately 37 megawatts during the quarter, which remains below the volume at which we expect our cost structure to be aligned with market-based pricing for orders of this scale.

Speaker #1: These charges are expected to be limited to identified inventory and purchase commitments for phase zero, and do not reflect our expectations regarding the overall economic value of the agreement.

Speaker #1: Loss from operations was $46.7 million, a 51% decrease compared to an operating loss of $95.4 million in the third quarter of fiscal 2025. That improvement was primarily driven by the absence of the asset impairment and restructuring charges that heavily impacted the prior-year period.

Michael Bishop: That improvement was primarily driven by the absence of the asset impairment and restructuring charges that heavily impacted the prior year period. Net loss for the quarter was $45.3 million, compared to $91.9 million in the comparable prior year period, and net loss attributable to common stockholders was $45.3 million or $0.64 per share, compared to $92.5 million or $3.78 per share in the prior year quarter. Per share improvement also reflects a higher weighted average share count of 70.4 million shares following our equity issuances over the past 12 months. On a non-GAAP basis, adjusted EBITDA was negative $36.7 million, compared to negative $16.4 million in Q3 fiscal 2025. That variance was primarily driven by Phase Zero charges I just described, which are not added back in our adjusted EBITDA reconciliation rather than by any structural degradation in our core operating model.

Speaker #1: Net loss for the quarter was $45.3 million compared to $91.9 million in the comparable prior-year period, and net loss attributable to common stockholders was $45.3 million, compared to $92.5 million, or $3.78 per share, in the prior-year quarter.

Speaker #1: Per-share improvement also reflects a higher weighted average share count of 70.4 million shares, following our equity issuances over the past 12 months. On a non-GAAP basis, adjusted EBITDA was negative $36.7 million, compared to negative $16.4 million in the third quarter of fiscal 2025.

Speaker #1: That variance was primarily driven by phase zero charges I just described, which are not added back in our adjusted EBITDA reconciliation, rather than by any structural degradation in our core operating model.

Speaker #1: Turning to our commercial progress, we are encouraged by the substantial expansion and evolution of our backlog. As of July 31, 2026, total committed and awarded capacity backlog was $3.6 billion—a significant step change.

Michael Bishop: Turning to our commercial progress, we are encouraged by the substantial expansion and evolution of our backlog. As of 31 July 2026, total committed and awarded capacity backlog was $3.6 billion, a significant step change. We have structured our commercial backlog into two distinct categories to give investors clearer visibility: committed backlog and awarded capacity backlog. Committed backlog, which represents definitive non-cancellable agreements executed by the company and its customers, was $1.3 billion, up approximately 4.1% year-over-year. Awarded capacity backlog was $2.4 billion. Awarded capacity backlog represents commercial awards and capacity reservations where we have been selected as the supplier and the parties are advancing towards execution of definitive agreements.

Speaker #1: We have structured our commercial backlog into two distinct categories to give investors clear visibility: committed backlog and awarded capacity backlog. Committed backlog, which represents definitive, non-cancellable agreements executed by the company and its customers, was $1.3 billion, up approximately 4.1% year over year.

Speaker #1: Awarded capacity backlog was $2.4 billion. Awarded capacity backlog represents commercial awards and capacity reservations where we have been selected as the supplier and the parties are advancing towards execution of definitive agreements.

Speaker #1: For the third quarter, this category is driven by the 350 megawatts across phases one, two, and three of our CEPA with Fit Energy, which was executed in June and provides for up to $380 million in product, commissioning, and service agreements, including the committed 30 megawatt phase zero.

Michael Bishop: For Q3, this category is driven by the 350 megawatts across Phases 1, 2, and 3 of our CEPA with Fit Energy, which was executed in June and provides for up to 380 megawatts in total product, commissioning, and service agreements, including the committed 30-megawatt Phase 0. Fit Energy may elect to proceed with Phases 1, 2, and 3 at its sole option, and no payment obligation arises with respect to a phase until Fit Energy makes an election to proceed with that phase. I want to be clear that awarded capacity backlog is not contracted firm order backlog or a guarantee of future revenue. Amounts may not convert to committed backlog or to revenue in whole or in part, and the timing and amount of any conversion may differ materially from our current estimates. We continue to maintain tight fiscal controls across the company.

Speaker #1: Fit Energy may elect to proceed with phases one, two, and three at its sole option, and no payment obligation arises with respect to a phase until Fit Energy makes an election to proceed with that phase.

Speaker #1: I want to be clear that awarded capacity backlog is not contracted firm order backlog, or a guarantee of future revenue. Amounts may not convert to committed backlog or to revenue, in whole or in part, and the timing and amount of any conversion may differ materially from our current estimates.

Speaker #1: We continue to maintain tight fiscal controls across the company. As summarized on slide 19 of the presentation, total operating expenses for the third quarter of fiscal 2026 were $22.2 million, compared to $90.2 million in the third quarter of fiscal 2025.

Michael Bishop: As summarized on slide 19 of the presentation, total operating expenses for Q3 of fiscal 2026 were $22.2 million, compared to $90.2 million in Q3 of fiscal 2025. Looking at the details, administrative and selling expenses were $13.6 million for the quarter. Research and development expenses were $8.5 million for the quarter as we continue to invest in key product initiatives to support growth of data center opportunities. This year-over-year reduction in operating expenses was primarily driven by the absence of $68.5 million of asset impairment and restructuring charges incurred during Q3 of fiscal 2025. Excluding those one-time historical charges, recurring operating expenses were essentially flat year-over-year, with a modest reinvestment in research and development offsetting lower administrative and selling costs. Now turning to the balance sheet and liquidity discussed on slide 21.

Speaker #1: Looking at the details, administrative and selling expenses were $13.6 million for the quarter. Research and development expenses were $8.5 million for the quarter, as we continue to invest in key product initiatives to support the growth of data center opportunities.

Speaker #1: This year-over-year reduction in operating expenses was primarily driven by the absence of $68.5 million of asset impairment and restructuring charges incurred during the third quarter of fiscal 2025.

Speaker #1: Excluding those one-time historical charges, recurring operating expenses were essentially flat year over year, with a modest reinvestment in research and development offsetting lower administrative and selling costs.

Speaker #1: Now, turning to the balance sheet and liquidity discussed on slide 21. We ended the quarter with the strongest cash position in our history. Total cash, cash equivalents, and restricted cash as of July 31, 2026, was $737.3 million, up from $440.9 million at April 30, 2026, the end of the prior quarter.

Michael Bishop: We ended the quarter with the strongest cash position in our history. Total cash equivalents, and restricted cash as of 31 July 2026, was $737.3 million, up from $440.9 million at 30 April 2026, the end of the prior quarter. Unrestricted cash and cash equivalents represented $658.1 million of that total, with the remaining $79.2 million in restricted cash and cash equivalents pledged as collateral for performance security and letters of credit. Our capital structure also remains straightforward. We carry no corporate convertible or high-yield debt, and our $153.6 million of total debt and finance obligations primarily consists of project-level financing, Export-Import Bank working capital facilities supported by our Korean deliveries, and sale leaseback obligations. This substantial capital buffer means that our manufacturing capacity expansion at our Torrington, Connecticut facility is fully funded.

Speaker #1: Unrestricted cash and cash equivalents represented $658.1 million of that total, with the remaining $79.2 million in restricted cash and cash equivalents pledged as collateral for performance security and letters of credit.

Speaker #1: Our capital structure also remains straightforward. We carry no corporate convertible or high-yield debt, and our $153.6 million of total debt and finance obligations primarily consist of project-level financing, Export-Import Bank working capital facilities supported by our Korean deliveries, and sale-leaseback obligations.

Speaker #1: This substantial capital buffer means that our manufacturing capacity expansion at our Torrington, Connecticut, facility is fully funded. We estimate the total requirement to expand Torrington to 500 megawatts of annualized production capacity to be between $200 million and $275 million, with completion targeted for June 2028.

Michael Bishop: We estimate the total requirement to expand Torrington to 500 megawatts of annualized production capacity to be between $200 million and $275 million, with completion targeted for June 2028. The expansion is backed by approximately $298 million of net proceeds raised from sales of common stock during the quarter, consisting of $245.5 million from our July underwritten offering and $52.9 million under our open market sale agreement. Looking ahead, we believe our strength and balance sheet and backlog expansion have established a clear path toward midterm profitability. We are now targeting achieving positive adjusted EBITDA results in Q4 of fiscal year 2027. We believe this target is supported by a series of operational and commercial catalysts.

Speaker #1: The expansion is backed by approximately $298 million of net proceeds raised from sales of common stock during the quarter, consisting of $245.5 million from our July underwritten offering and $52.9 million under our open market sale agreement.

Speaker #1: Looking ahead, we believe our strength, balance sheet, and backlog expansion have established a clear path toward midterm profitability. We are now targeting achieving positive adjusted EBITDA results in the fourth quarter of fiscal year 2027.

Speaker #1: We believe this target is supported by a series of operational and commercial catalysts. First, we have begun to increase our annualized production rate, with the goal of achieving a targeted annualized production rate of $100 million in October 2026, up from approximately $37 million this quarter, which should drive operating leverage over time.

Michael Bishop: First, we have begun to increase our annualized production rate with the goal of achieving targeted annualized production rate of 100 megawatts in October 2026, up from approximately 37 megawatts this quarter, which should drive operating leverage over time. Beyond that, reaching our adjusted EBITDA target will depend on several key factors, including conversion of our awarded capacity backlog into definitive revenue-generating committed contracts, alignment with customer delivery schedules, and continued execution of our manufacturing cost reduction initiatives as we benefit from higher procurement volumes. There can be no assurance that we will achieve these production rates, the conversion of awarded capacity backlog, or the anticipated cost reductions within the time frames currently expected.

Speaker #1: Beyond that, reaching our adjusted EBITDA target will depend on several key factors, including conversion of our awarded capacity backlog into definitive, revenue-generating committed contracts, alignment with customer delivery schedules, and continued execution of our manufacturing cost reduction initiatives as we benefit from higher procurement volumes.

Speaker #1: There can be no assurance that we will achieve these production rates, the conversion of awarded capacity backlog, or the anticipated cost reductions within the time frames currently expected.

Speaker #1: In closing, we are executing our strategy with financial discipline, a fully funded manufacturing capacity expansion plan, and a sales pipeline that has grown to approximately 10 gigawatts in fiscal 2026 proposals, which we believe positions us to drive long-term value for our shareholders.

Michael Bishop: In closing, we are executing our strategy with financial discipline, a fully funded manufacturing capacity expansion plan, and a sales pipeline that has grown to approximately 10 gigawatts in fiscal 2026 proposals, which we believe positions us to drive long-term value for our shareholders. Thank you for your continued support, and I will now hand the call back to the operator to open the line for Q&A.

Speaker #1: Thank you for your continued support. I will now hand the call back to the operator to open the line for Q&A.

Speaker #2: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. We do ask for today's session that you please limit yourself to one question and one follow-up. Your first question comes from the line of Julien Dumoulin-Smith of Jefferies. Your line is open.

Speaker #2: If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset, and ensure that your phone is not on mute when asking your question.

Speaker #2: And we do ask for today's session that you please limit yourself to one question and one follow-up. Your first question comes from the line of Julian D. Dunolan Smith of Jefferies.

Speaker #2: Your line is open.

Speaker #3: Oh, hi. Good morning. It's actually Ivana Erković for Julian. And, you know, thank you for the time. I just kind of had a question related to this deal announcement—the 75 megawatts.

Ivana Erkovic: Oh, hi. Good morning. It is actually Ivana Erkovic for Julien. Thank you for the time. I just had a question related to this deal announcement, 75 megawatts. If you could maybe give some more details in terms of the timeline and any potential opportunities, like for expansion versus that deal. I think that, yeah, that would be my first question. Thank you.

Ivana Ergovic: Oh, hi. Good morning. It is actually Ivana Erkovic for Julien. Thank you for the time. I just had a question related to this deal announcement, 75 megawatts. If you could maybe give some more details in terms of the timeline and any potential opportunities, like for expansion versus that deal. I think that, yeah, that would be my first question. Thank you.

Speaker #3: If you could you know maybe give some some kind of more details in terms of the timeline and you know any potential opportunities like for expansion versus that deal.

Speaker #3: I think that, yeah, that would be my first question. Thank you.

Speaker #4: Well, hey, thank you, and thanks for joining us this morning. Yeah, after the quarter, or subsequent to the end of the quarter, we closed the 75-megawatt capacity reservation agreement for a major data center operator.

Michael Bishop: Hey, thank you and thanks for joining us this morning. After the quarter or subsequent to the end of the quarter, we closed the 75-megawatt capacity reservation agreement for a major data center operator. We have not disclosed the timing of that, but we anticipate not only that opportunity but follow-on opportunities with the same customer. As you have seen, particularly, in certain markets and including a market like Texas, where there is movement toward requiring bringing your own power, our platform certainly sets up well to meet that requirement in Texas, and so we are excited about the opportunity. We are working through the definitive agreement, and that will really align the timeline from a delivery and execution standpoint. But we see this as a continuation or how the business model is really evolving.

Jason Few: Hey, thank you and thanks for joining us this morning. After the quarter or subsequent to the end of the quarter, we closed the 75-megawatt capacity reservation agreement for a major data center operator. We have not disclosed the timing of that, but we anticipate not only that opportunity but follow-on opportunities with the same customer. As you have seen, particularly, in certain markets and including a market like Texas, where there is movement toward requiring bringing your own power, our platform certainly sets up well to meet that requirement in Texas, and so we are excited about the opportunity. We are working through the definitive agreement, and that will really align the timeline from a delivery and execution standpoint. But we see this as a continuation or how the business model is really evolving.

Speaker #4: We've not disclosed the timing of that but we anticipate not only that opportunity but follow-on opportunities with the same customer and as you've seen in in particularly in in certain markets and including a market like Texas where there's you know movement toward requiring bringing your own power our platform certainly sets up well to meet that requirement in Texas and so we're excited about the opportunity.

Speaker #4: We we're working through the definitive agreement and that really align the the timeline from a delivery and execution standpoint but we see this as a as as a continuation and or how the model of the business model is really evolving to put capacity reservations in place as customers really look to line up power while they're completing their ar their designs for the architecture of their data center and securing their commitments from their offtake customers as well.

Jason Few: To put capacity reservations in place as customers really look to line up power while they are completing their designs for the architecture of their data center and securing their commitments from their offtake customers as well. So, excited about this opportunity and look forward to executing.

Speaker #4: I'm so excited about this opportunity and look forward to executing.

Speaker #3: Thank you. And in terms of a follow-up, I actually had a little bit of a different question. It's kind of related to your quarter results. I mean, you know, there is a material increase in the cost of revenue, I guess related to the FIT deal.

Ivana Erkovic: Thank you. In terms of follow-up, I actually had a little bit of different question. It is kind of related to your quarter results. There is a material increase in the cost of revenue, I guess, related to the Fit Energy deal. So, how should we think about it in the sense of the revenue recognition? I guess those would come with the deliveries in Q4 and offsetting basically the cost of revenue that we booked in this quarter. Is that the right way to think about it?

Ivana Ergovic: Thank you. In terms of follow-up, I actually had a little bit of different question. It is kind of related to your quarter results. There is a material increase in the cost of revenue, I guess, related to the Fit Energy deal. So, how should we think about it in the sense of the revenue recognition? I guess those would come with the deliveries in Q4 and offsetting basically the cost of revenue that we booked in this quarter. Is that the right way to think about it?

Speaker #3: So, I mean, how should we think about it? I mean, in the sense of the revenue recognition, I guess those would come with the deliveries in the fourth quarter and/or offsetting, basically, the cost of revenue that we booked in this quarter.

Speaker #3: Is that the right way to think about it?

Speaker #4: Sure, Ivana. This is Mike, and thanks for joining the call. I'll take that one. So, as far as the FIT Phase Zero, yes, we have disclosed that we do expect to begin recognizing revenue and that order in the fourth quarter of our fiscal year, with the balance of it being completed in fiscal 2027.

Michael Bishop: Sure. Ivana, this is Mike, and thanks for joining the call. I will take that one. As far as the Fit Phase 0, yes, we have disclosed that we do expect to begin recognizing revenue in that order in Q4 of our fiscal year, with the balance of it being completed in fiscal 2027. On the cost side, what you have seen come through this quarter related to that order is really our legacy cost structure. As we sit here today, the company is operating at 37 megawatts of production volume, which has the cost higher than current market rates. We expect that to normalize and be absorbed as we scale and get production rates up to 100 megawatts. As I said in my remarks, we do expect the company to get to adjusted EBITDA positive in Q4 of fiscal 2027.

Speaker #4: On the cost side what you've seen come through this quarter related to that order related to that order is really our legacy cost structure as we sit here today the company's operating at $37 megawatts of production volume which has the cost higher than current market rates we expect that to normalize and and be absorbed as our as we scale and get production rates up to 100 megawatts as I said in in my remarks we do expect the company to get to adjusted EBITDA positive in the fourth quarter of fiscal 2027.

Speaker #3: Okay, thank you. Can I just ask one more thing? In terms of the 100 megawatts, I mean, it seems that you should be able to kind of start producing at those levels by year-end.

Ivana Erkovic: Okay, thank you. Can I just ask one more thing? In terms of the 100 megawatts, it seems that you should be able to kind of start producing at those levels by the year-end.

Ivana Ergovic: Okay, thank you. Can I just ask one more thing? In terms of the 100 megawatts, it seems that you should be able to kind of start producing at those levels by the year-end.

Speaker #4: Yes. So, what I believe your question was, is where our production rate is going. We have announced that we are scaling our production rate up to 100 megawatts by the end of the fourth quarter of this year. What that means is adding personnel, direct labor in our factory, as well as scaling our supply chain.

Michael Bishop: Yes. I believe your question was, where is our production rate going? We have announced that we are scaling our production rate up to 100 megawatts by the end of Q4 of this year. What that means is adding personnel, direct labor in our factory, as well as scaling our supply chain so that we are positioned to be able to deliver at that level as we get into fiscal 2027. In addition to that, we are adding manufacturing capacity as well, to go up to 500 megawatts of total capacity in this factory by June of 2028.

Speaker #4: So that we're positioned to be able to deliver at that level as we get into fiscal 2027. In addition to that, we're adding manufacturing capacity as well to go up to 500 megawatts of total capacity in this factory by June of 2028.

Speaker #3: Okay. Thank you very much. Thanks.

Ivana Erkovic: Okay. Thank you very much. Thanks.

Ivana Ergovic: Okay. Thank you very much. Thanks.

Speaker #4: Thank you.

Michael Bishop: Thank you.

Speaker #2: Your next question comes from the line of Manav Gupta of UBS. Your line is open.

Operator: Your next question comes from the line of Manav Gupta of UBS. Your line is open.

Speaker #3: Good morning. I wanted to focus a little bit more on the Exxon power project. I mean, it looks like your cells are delivered. I'm just fundamentally trying to understand: are these two cells going to operate in a different way because their primary goal seems to be carbon capture?

Manav Gupta: Good morning. I wanted to focus more on the Exxon project. It looks like your cells are delivered. I am just fundamentally trying to understand, are these two cells going to operate in a different way because their primary goal seems carbon capture? Can you help us understand how these two cells will be operating with Exxon, and what is the scope of expanding that partnership? Because Exxon is very bullish on carbon capture as a whole.

Speaker #3: Can you help us understand how these two cells will be operating with Exxon, and what's the scope of expanding that partnership? Because, you know, Exxon is very bullish on carbon capture as a whole.

Speaker #4: Manav, good morning and thank you for joining the call, and thank you for the question. Yes, you are correct. The two modules have been delivered to Exxon at Rotterdam and are being installed. The primary focus of the application for those two modules is capturing carbon directly from the point source of emissions at the Exxon Rotterdam refinery, or the Esso refinery, given that's the brand name they still use in Europe.

Jason Few: Manav, good morning, and thank you for joining the call and thank you for the question. Yes, you are correct. The two modules have been delivered to Exxon at Rotterdam and are being installed. The primary focus of the application for those two modules is capturing carbon directly from the point source of emissions at the Exxon Rotterdam refinery or the Esso refinery, given that is the brand name they still use in Europe. We will demonstrate capturing 90%+ of the carbon while simultaneously producing power, thermal energy, and hydrogen, which is a unique capability to our platform, not only as a FuelCell Energy provider, but a unique capability in terms of other carbon capture technologies. The other big part of this demonstration, Manav, is to show our ability to capture CO2 from a low CO2 concentration stream of emissions, which is much harder to do.

Speaker #4: We'll demonstrate capturing 90-plus percent of the carbon while simultaneously producing power, thermal energy, and hydrogen, which is a unique capability to our platform. Not only as a fuel cell provider, but also a unique capability in terms of other carbon capture technologies.

Speaker #4: The other big part of this demonstration, Manav, is to show our ability to capture CO2 from a low CO2 concentration stream of emissions, which is much harder to do. And that's another area where our technology accelerates in terms of our capability to actually capture low-concentration CO2, which opens up the biggest aperture of market opportunity when you think across the industrial landscape.

Jason Few: That is another area where our technology accelerates in terms of our capability to actually capture low concentration CO2, which opens up the biggest aperture of market opportunity when you think across the industrial landscape. Everything from a company that does bottling and uses boilers to sterilize bottles all the way to the refinery application we are demonstrating here in Rotterdam. We believe that demonstrating successfully our platform's capability, that that will open up an opportunity to expand this technology more broadly to address carbon capture across industrial applications globally. We think that there continues to be broad political support. If you look at the O triple BA, the actual incentives around 45Q actually improved. We think that signals strong support, clearly strong support for carbon capture in Europe and Asia. The product will function differently, from a core focus being carbon capture versus our power generation.

Speaker #4: So everything from, you know, a company that does bottling and uses boilers to sterilize bottles, all the way to the refinery application we're demonstrating here in Rotterdam.

Speaker #4: We believe that successfully demonstrating our platform's capability will open up an opportunity to expand this technology more broadly, to address carbon capture across industrial applications globally.

Speaker #4: And we think that there continues to be broad political support. I mean, if you look at the OBBBA, the actual, you know, incentives around 45Q actually improved, so we think that, you know, signals strong support—clearly strong support—for carbon capture in Europe and Asia.

Speaker #4: And the product will function differently, with a core focus being carbon capture versus power generation. That being said, our core product—and every product we ship today—is carbon capture ready.

Jason Few: That being said, our core product and every product we ship today is carbon capture ready. We have the ability to also decarbonize power generation by capturing the CO2 from the fuel that we use to power our Energy Block. The core focus in Rotterdam is carbon capture.

Speaker #4: So we have the ability to also decarbonize power generation by capturing the CO2 from the fuel that we use to power our energy block.

Speaker #4: But the core focus in Rotterdam is carbon capture.

Speaker #3: Thanks. Perfect. Mike my quick follow up here is you know you're opening comments you know you talked about fuel cell and you know the time to power advantage and how the grid is not scaling up.

Manav Gupta: That is perfect. My quick follow-up here is, in your opening comments, you talked about FuelCell and the time to power advantage and how the grid is not scaling up. What we have also noticed is that there is obviously something called LCOE, but increasingly, what the hyperscalers are finding out is by the time the electricity is delivered to you, it is not even close to LCOE. It is significantly higher. When you take that versus the benefits of on-site power generation, which is basically a spark spread, the cells actually start becoming a lot more economical and have a break-even of 7 or 8 years. I am just trying to understand from your perspective, can you also help us understand some of the other benefits of on-site power generation?

Speaker #3: What we have also noticed is that there's obviously something called LCOE, but increasingly what the hyperscalers are finding out is by the time the electricity is delivered to you, it's not even close to LCOE—it's significantly higher.

Speaker #3: Now, when you take that versus the benefits of onsite power generation, which is basically a spark spread, the cells actually start becoming a lot more economical and have a break-even of, you know, seven or eight years.

Speaker #3: So I'm just trying to understand from your perspective. Can you also help us understand some of the other benefits of onsite power generation? Because on the screen, it might look like the LCOE is cheaper, but by the time the power gets to the data center, it's actually a lot more expensive.

Manav Gupta: Because on the screen it might look the LCOE is cheaper, but by the time the power gets to the data center, it is actually a lot more expensive. If you could talk a little bit about that.

Speaker #3: So, if you could talk a little bit about that.

Speaker #4: Sure. No great question. I I think if you look at you know the advantage of onsite power and LCOE you're you're absolutely correct. And and if you look at what's really required to deploy new power generation in a constrained area the amount of capital investment that has to go into that from an infrastructure upgrade on the utility side which may include high voltage transmission new local transmission additional power electronics from you know transformers etc.

Jason Few: Sure. No, great question. I think if you look at the advantage of on-site power and LCOE, you are absolutely correct. If you look at what is really required to deploy new power generation in a constrained area, the amount of capital investment that has to go into that from an infrastructure upgrade on the utility side, which may include high voltage transmission, new local transmission, additional power electronics from transformers, et cetera, you can reduce a significant amount of that cost by doing on-site power generation.

Speaker #4: You can reduce a significant amount of that cost by doing on-site power generation. So not only do you get a lower LCOE and higher reliability, you're also going to get the ability with our platform to integrate absorption chilling, so you can actually bring down the PUE of that data center. This is a core goal of a data center operator, because they want to get more of the power to the compute, because that's really the business they're in—powering compute.

Jason Few: Not only do you get a lower LCOE, higher reliability, you are also going to get the ability with our platform to integrate absorption chilling so you can actually bring down the PUE of that data center, which is a core goal of a data center operator because they want to get more of the power to the compute, because that is really the business they are in, is powering compute. The other big benefits are we offer a low noise solution and we can operate in water neutral. A lot of the things that communities are complaining about today, we address with our technology, including not contributing to poor air quality, because although we use natural gas, we do not combust the fuel, which is another advantage.

Speaker #4: The other big benefits are you know we we offer a low noise solution and we can operate in water neutral. So a lot of the things that communities are complaining about today we address with our technology including you know not contributing to to poor air quality be because although we use natural gas we don't combust the fuel which is another advantage.

Speaker #4: And so you take all of those things together, and, you know, I like to think about it as more than just time to power—it's really time to power on, because it's the time to deliver it.

Jason Few: You take all of those things together, and I like to think about it more than just time to power, but it is really time to power on. Because it is the time to deliver it. Can you get it permitted? Which is a big challenge today, and our platform really addresses a lot of those concerns. Really time to power on, which is also time to revenue, and we think that creates a significant advantage.

Speaker #4: Can you get it permitted, which is a big challenge today, and our platform really addresses a lot of those concerns. And so really, time to power on, which is also time to revenue, and we think that creates a significant advantage.

Speaker #3: Thank you so much.

Manav Gupta: Thank you so much.

Speaker #4: Thank you.

Jason Few: Thank you.

Speaker #3: Your next question comes from the line of Jason Tilken of Kennecore Genuity. Your line is open.

Operator: Your next question comes from the line of Jason Tilkin of Canaccord Genuity. Your line is open.

Speaker #5: good morning and thanks for taking my questions. I guess to start can you can you perhaps help us bridge the gap between the achievement of the 100 megawatt run rate that that you've sort of stated and you expect next you know at some point next month to the Q4 of fiscal 27 sort of updated target for for reaching EBITDA profitability and and what some of the key factors maybe expand on some of the key factors that you laid out in the press release that that could help you achieve that that rate.

Jason Tilkin: Good morning, and thanks for taking my questions. I guess to start, can you perhaps help us bridge the gap between the achievement of the 100-megawatt run rate that you stated you expect at some point next month, to the Q4 of fiscal 2027 updated target for reaching the EBITDA profitability, and what some of the key factors, maybe expand on some of the key factors that you laid out in the press release that could help you achieve that rate? Thank you.

Jason Tilchen: Good morning, and thanks for taking my questions. I guess to start, can you perhaps help us bridge the gap between the achievement of the 100-megawatt run rate that you stated you expect at some point next month, to the Q4 of fiscal 2027 updated target for reaching the EBITDA profitability, and what some of the key factors, maybe expand on some of the key factors that you laid out in the press release that could help you achieve that rate? Thank you.

Speaker #5: Thank you.

Speaker #4: Sure Jason. This is this is Mike. I'll I'll take that. So again a as as we said we are we are hiring we are ramping our supply chain to get our run rate up to that 100 megawatt annualized run rate in the fourth quarter of of fiscal 26 and targeting adjusted EBITDA positive in fourth quarter of fiscal 27.

Michael Bishop: Sure, Jason. This is Mike. I will take that. As we said, we are hiring, we are ramping our supply chain to get our run rate up to that 100-megawatt annualized run rate in the Q4 of fiscal 2026 and targeting adjusted EBITDA positive in Q4 of fiscal 2027. Between now and then, the key factors that will drive that is one, continuing to convert our awarded capacity into committed backlog. As we sit here today, we are executing on the 30-megawatt committed backlog from Fit Energy phase zero. We need to continue to convert that broader order as well as other opportunities, and of course, we talked about this new 75-megawatt capacity reservation agreement that was announced this morning. That is another opportunity there to continue to convert.

Speaker #4: Between now and then, the key factors that will drive that are, one, continuing to convert our awarded capacity into committed backlog.

Speaker #4: As we sit here today, we are executing on the 30-megawatt committed backlog from Fit Energy Phase Zero. We need to continue to convert that broader order, as well as other opportunities. And of course, we talked about this new 75-megawatt capacity reservation agreement that was announced this morning.

Speaker #4: So, that's another opportunity there to continue to convert. So, converting backlog, lining up with customer schedules, and then, of course, continuing down the cost reduction curve as we expand and as we scale in the factory. We will absorb overhead, and we will also get leverage from our supply chain.

Jason Few: So converting backlog, lining up with customer schedules, and then of course, continuing down the cost reduction curve as we expand and we scale in the factory. We will absorb overhead, and we will also get leverage from our supply chain. So those are the main drivers that will be occurring in the financial statements over the course of the next year plus.

Michael Bishop: So converting backlog, lining up with customer schedules, and then of course, continuing down the cost reduction curve as we expand and we scale in the factory. We will absorb overhead, and we will also get leverage from our supply chain. So those are the main drivers that will be occurring in the financial statements over the course of the next year plus.

Speaker #4: So, those are the main drivers that will be occurring in the financial statements over the course of the next year plus.

Speaker #5: Okay. That that's really helpful. And I guess the follow up there is in terms of you know th those factors you laid out some of those are in your control and some of them are at the discretion of the customers like Fit Energy has the option to to to proceed with these deals.

Jason Tilkin: Okay. That is really helpful. I guess the follow-up there is in terms of those factors you laid out, some of those are in your control and some of them are at the discretion of the customers, like Fit Energy has the option to proceed with these deals. So I am just curious maybe if you could help us understand on the cost reduction side, if you feel like you are already or within close line of sight of achieving what you need to achieve to get to that point. Then what does the scenario look like where maybe Fit Energy is not ready to proceed with that phase in time to achieve that? What does the sliding scale look like in that sense if you are able to achieve some of those milestones, but maybe not all of them?

Jason Tilchen: Okay. That is really helpful. I guess the follow-up there is in terms of those factors you laid out, some of those are in your control and some of them are at the discretion of the customers, like Fit Energy has the option to proceed with these deals. So I am just curious maybe if you could help us understand on the cost reduction side, if you feel like you are already or within close line of sight of achieving what you need to achieve to get to that point. Then what does the scenario look like where maybe Fit Energy is not ready to proceed with that phase in time to achieve that? What does the sliding scale look like in that sense if you are able to achieve some of those milestones, but maybe not all of them?

Speaker #5: So I'm just curious maybe if you could help us understand on the sort of cost reduction side if you feel like you are already or within close line of sight of achieving what you need to achieve to get to that point and then what is the the you know what is the scenario look like where maybe Fit Energy is not ready to proceed with with that phase in time to achieve that.

Speaker #5: Like ha what what are the the the what is the sliding scale look like i in essence if you're able to ju you know to achieve some of those milestones but maybe not all of them.

Speaker #4: So again, on the cost reduction side, we've been planning for this for a long time. We have a very well-defined cost reduction curve in front of us that we are executing on.

Michael Bishop: Again, on the cost reduction side, we have been planning for this for a long time. We have a very well-defined cost reduction curve in front of us that we are executing on. On the commercial side, we talked about a 10-gigawatt pipeline of opportunities. So, we are not just reliant on one or two customers. We see significant opportunities here across our customer base and fully expect to be able to convert additional pipeline into backlog over this time period.

Speaker #4: And on the commercial side, we talked about a 10-gigawatt pipeline of opportunities. So we are not just reliant on one or two customers.

Speaker #4: We see significant opportunities here across our customer base and fully expect to be able to convert additional pipeline into backlog over this time period.

Speaker #5: Okay. Really really helpful. And I maybe can sneak in one one quick final one. I believe in the first question that was asked it was around the it was around the the bridge from 37 to 100 over the next sort of call it six to eight weeks.

Jason Tilkin: Okay. Really helpful. Maybe we can sneak in one quick final one. I believe in the first question that was asked, it was around the bridge from 37 to 100 over the next, call it 6 to 8 weeks, and you mentioned adding labor and increasing the supply chain to get to that run rate. Are those boxes, have those been ticked already and it is just a matter of simply working through the next few weeks of just getting those people up and running? Or are you still in the process of finding that labor and making sure that that supply chain is at the right point?

Jason Tilchen: Okay. Really helpful. Maybe we can sneak in one quick final one. I believe in the first question that was asked, it was around the bridge from 37 to 100 over the next, call it 6 to 8 weeks, and you mentioned adding labor and increasing the supply chain to get to that run rate. Are those boxes, have those been ticked already and it is just a matter of simply working through the next few weeks of just getting those people up and running? Or are you still in the process of finding that labor and making sure that that supply chain is at the right point?

Speaker #5: And and you mentioned adding labor and and increasing the supply chain to get to that run rate. Are are are those sort of boxes have those been ticked already and it's just a matter of simply you know working through the the next few weeks of of of just getting those people up and running or are you still in the process of of finding that labor and and and making sure that that supply chain is at the right the right point?

Speaker #4: Yeah. So there there's multi multiple elements there. but yeah we ha we've made considerable progress. We are hiring as as we speak. we have added an additional shift in our in our factory.

Michael Bishop: Yeah. So there's multiple elements there. But we've made considerable progress. We are hiring as we speak. We have added an additional shift in our factory, so you will see meaningful increase in our production rate come through this quarter as we described.

Speaker #4: So you will see a meaningful increase in our production rate come through this quarter, as we described.

Speaker #5: Thank you very much.

Jason Tilkin: Thank you very much.

Jason Tilchen: Thank you very much.

Speaker #4: Yep.

Speaker #3: Your next question comes from the line of Ryan Finks of B. Riley Securities. Your line is open.

Operator: Your next question comes from the line of Ryan Pfingst of B. Riley Securities. Your line is open.

Speaker #5: Hey guys. Thanks for taking the questions. Maybe just to start with a with a follow up on the last one. for the target of positive EBITDA in fiscal for Q27 can you frame that in terms of what that reflects or where you expect to be from an annualized production rate perspective at that point?

Ryan Pfingst: Hey, guys. Thanks for taking the questions. Maybe just to start with a follow-up on the last one. For the target of positive EBITDA in fiscal Q4 2027, can you frame that in terms of what that reflects or where you expect to be from an annualized production rate perspective at that point?

Michael Bishop: Thanks for the question, Ryan. We would expect at least 100 megawatts of volume to support that, if not more. Again, that will be dictated to some extent by our customers in converting pipeline to backlog, as well as customer delivery schedules, so being able to line up with our customer requirements. As we described, we will absolutely have the capability in Torrington to get above 100 megawatts. We are targeting 500 megawatts of capacity by June of 2028. That does not get turned on like a light switch. That will come online over time as we unlock constraints. One of the big constraints that we have talked about is tape casting. That process is well underway and will be installed in next fiscal year. That is a big unlock for us to create additional capacity.

Speaker #4: Thanks for the question, Ryan. So, we would expect at least 100 megawatts of volume to support that, if not more. And again, that will be dictated to some extent by our customers in converting pipeline to backlog, as well as customer delivery schedules.

Speaker #4: So being able to line up with our customer requirements, and as we described, we will absolutely have the capability in Torrington to get above 100 megawatts.

Speaker #4: We are targeting 500 megawatts of capacity by June of 2028. That does not get turned on like a light switch; it will come online over time as we unlock constraints.

Speaker #4: One of the big constraints that we've talked about is tape casting. That process is well underway and will be installed in the next fiscal year.

Speaker #4: So, that's a big unlock for us to create additional capacity.

Speaker #5: Got it. And then on the Fit Energy deal, I'm curious about your expectations for moving to the remaining phases. Do you see that phase happening after the initial phase is up and operating, or could that decision, in your view, come before then?

Ryan Pfingst: Got it. On the Fit Energy deal, curious on your expectations for moving to the remaining phases. Do you see phase 1 moving forward only after the initial phase is up and operating, or could that decision, in your view, come before then?

Speaker #4: No, Ryan, this is Jason. No, they are not sequential, or certainly don't have to be sequential. The gating on those is just their ability to close out their agreements with their customer.

Jason Few: No, Ryan, this is Jason. No, they are not sequential or certainly do not have to be sequential. The gating on those is just their ability to close out their agreements with their customer. That can happen at any time. It is not a complete the first 30 megawatts and then they will move forward or consider phase 1. They are not a sequential set of events.

Speaker #4: and that can happen at any time. And so it's not a complete the first 30 megawatts and then you know they'll they'll they'll move forward or consider you know phase one.

Speaker #4: They're not a sequential set of events.

Speaker #5: Got it. That's helpful. Thanks, guys.

Ryan Pfingst: Got it. That is helpful. Thanks, guys.

Speaker #4: Thank you.

Michael Bishop: Thank you.

Speaker #3: Your next question comes from the line of Noel Parks of Tuohy Brothers. Your line is open.

Operator: Your next question comes from the line of Noel Parks of Tuohy Brothers. Your line is open.

Speaker #6: Hi, good morning. I noticed that with the updated CapEx guidance, it's actually been nudged down a bit for the fiscal year. And I think there was a mention in the materials that some of that reflected equipment deliveries that would not be happening until after the fiscal year end.

Noel Parks: Hi. Good morning. I noticed that with the updated CapEx guidance, it has actually been nudged down a bit for the fiscal year. I think there was a mention in the materials that some of that reflected equipment deliveries that would not be happening until after the fiscal year end. I just wondered if you could just elaborate a bit on that. I am assuming that would be deliveries primarily for the Torrington expansion?

Speaker #6: So I just wondered if you could just elaborate a bit on that and I'm assuming that would be deliveries for the you know primarily for the Torrington expansion?

Speaker #4: Good morning, Noel. This is Mike. So, good read. The previous disclosure that we had around expected CapEx coming through the cash flow statement in fiscal '26 was $20 to $30 million. We are now saying that that's $10 to $20 million.

Michael Bishop: Correct. Good morning, Noel. This is Mike. Good read. The previous disclosure that we had around expected CapEx coming through the cash flow statement in fiscal 2026 was $20 to $30 million. We are now saying that that is $10 to $20 million, just given timing. It is by no means a reflection of execution. It is really timing of receiving certain equipment based on our prior schedules. As we have described now, we are on track for the 500-megawatt expansion by June of 2028. We have committed $200 to $275 million of capital to that. If you look at our purchase commitments disclosures, that is up significantly quarter-over-quarter, reflecting not only the increase in production rate, but also capital commitments that will be delivered in future quarters.

Speaker #4: It's just given timing, but it is by no means a reflection of execution. It's really the timing of receiving certain equipment based on our prior schedules.

Speaker #4: As we have described, we are now on track for the 500-megawatt expansion by June of 2028. We have committed $200 to $275 million of capital to that.

Speaker #4: And if you look at our purchase commitments disclosures, that is up significantly quarter over quarter, reflecting not only the increase in production rate but also capital commitments that will be delivered in future quarters.

Speaker #6: Great, thanks. And also, earlier in the prepared remarks—I think there was, or maybe it was right at the start of Q&A—

Noel Parks: Great. Thanks. Also, early in the prepared remarks, I think there was a, or maybe it was right at the start of Q&A, there was a comment about your fuel cells, I guess the necessity of aligning with customer delivery schedules. I was just sort of thinking in this ramp-up period on one hand, then you have new agreements in negotiation and coming online. I am just thinking a bit about how you manage that, since it looks like you are going to be kind of in anything but a steady state sort of trend for the next few years.

Speaker #6: there was a comment about sort of you fuel cells I guess the necessity of aligning with customer delivery schedules. And so I was just sort of thinking in this in this ramp up period on one hand and then you have new agreements in negotiation and coming online just thinking a bit about how you how you manage manage that since you're looks like you're gonna be kind of in anything but a steady state sort of trend for the next few years.

Speaker #4: Yeah, so Noel, this is Jason. The way that you can think about this is, we have visibility into our production capabilities. We have visibility into our expansion capacity ramp.

Jason Few: Yeah. Sunil, this is Jason. The way that you can think about this is we have visibility into our production capabilities. We have visibility into our expansion capacity ramp, and that information is closely tied to and fully understood by our business development team. When we are talking to customers about opportunities, and schedule always becomes part of the question or conversation ultimately, we make sure that the commitments that we are making align to our view in terms of our ability to meet and deliver against that demand. Even though you might sign an agreement for 100 megawatts of power, you really need to look at, well, what is the delivery schedule for that?

Speaker #4: And that information is closely tied to and fully understood by our business development team. So when we're talking to customers about opportunities—and schedule always becomes part of the question or conversation—ultimately, we make sure that the commitments that we're making align to our view in terms of our ability to meet and deliver against that demand.

Speaker #4: And so, even though you might sign an agreement for, you know, 100 megawatts of power, you really need to look at, well, what is the delivery schedule for that? Because first power could be something as small as 20 megawatts, and additional power comes on as they finish building out the data hall, or maybe as they add a second building for a second data hall.

Jason Few: Because first power could be something as small as 20 megawatts and additional power comes on as they finish building out the data hall or maybe as they add a second building for a second data hall. So you have to really look at the full build-out from the customer perspective. Then we make sure that we align our commitments to our confidence on our scale-up and manufacturing capabilities.

Speaker #4: So you have to really look at the full build-out from the customer perspective. And then we make sure that we align our commitments to our confidence in our scale-up in manufacturing capabilities.

Speaker #3: Great. Thanks a lot.

Noel Parks: Great. Thanks a lot.

Speaker #4: Thank you.

Jason Few: Thank you.

Speaker #3: And again, if you have a question, you just press star one on your telephone keypad. Your next question comes from Chris Illinghouse of Seabrook Williams & Schenk.

Operator: If you have a question, you hit 1 on your telephone keypad. Your next question comes the line of Chris Ellinghaus of Siebert Williams Shank. Your line is open.

Speaker #3: Your line is open.

Speaker #7: Hey, good morning, everybody. Mike, in your backlog slide, do you sort of envision adding more granular categories, sort of as you convert pipeline?

Chris Ellinghaus: Hey, good morning, everybody. Mike, in your backlog slide, do you sort of envision adding more granular categories as you convert pipeline?

Speaker #4: Good morning, Chris, and thanks for joining the call. So, obviously, a big step change in our backlog disclosures this quarter compared to last quarter.

Michael Bishop: Well, good morning, Chris, and thanks for joining the call. Obviously a big step change in our backlog disclosures this quarter compared to last quarter. We have added an additional category called awarded capacity backlog. What is in there as of 31 July 2026, the end of last quarter, is really the three phases of the Fit contract that are not currently committed. This is phases 1, 2, and 3 broken down between product and service. We think we have a fair amount of disclosure there on the potential that will be converted into committed backlog. As far as additional categories, we would expect, and we talked about this 75 megawatt capacity reservation agreement, we would expect that to go into awarded capacity backlog as well, whether it is part of product or service or broken between the two. We will disclose that in future periods.

Speaker #4: We've added an additional category called awarded capacity backlog. What is in there, as of July 31, 2026, the end of last quarter, is really the three phases of the FIT contract that aren't currently committed.

Speaker #4: So this is phases one, two, and three, broken down between product and service. So we think we have a fair amount of disclosure there.

Speaker #4: On the potential that will be converted into committed backlog, as far as additional categories, we would expect—and we talked about this—75 megawatt capacity reservation agreement, we would expect that to go into awarded capacity backlog as well. Whether it's part of product or service or broken between the two, we will disclose that in future periods.

Speaker #4: But that's the that's the expectation kind of following industry practice. These days we're we're folks are disclosing those reservations whether they're they're called CRAs or something else but really reservations on on future capacity which the companies being paid for.

Michael Bishop: But that is the expectation, kind of following industry practice these days where folks are disclosing those reservations, whether they are called CRAs or something else, but really reservations on future capacity which the company is being paid for. We will be as transparent as possible as we add these additional opportunities into our backlog.

Speaker #4: So we will be as transparent as possible as we add these additional opportunities into our backlog.

Speaker #7: Okay. Thanks. And Jason I I sort of liked the way you framed the pipeline versus conversion discussion. Is there I don't I don't know how to how to put this but is is there any timelines or waypoints for some of the pipeline that we might look for for you to announce any kind of agreement out of the pipeline?

Chris Ellinghaus: Okay, thanks. Jason, I sort of liked the way you framed the pipeline versus conversion discussion. Is there, I do not know how to put this, but is there any timelines or waypoints for some of the pipeline that we might look for you to announce any kind of agreement out of the pipeline?

Speaker #4: Sure. No great question Chris and thank you for for being on the call. The way you ought to think about it is you know we we talk about our our sales pipeline and and the 10 gigawatts we talked about today are you know tied to proposals that are business development team has with customers directly placed those proposals.

Jason Few: Sure. No, great question, Chris, and thank you for being on the call. The way you ought to think about it is, we talk about our sales pipeline and the 10 gigawatts we talked about today are tied to proposals that our business development team has with customers directly placed those proposals. When we talk about awarded capacity agreements, what we are talking about there is that we, along with the customer, have agreed to allocate manufacturing capacity in support of that customer's order. Along with that awarded capacity, there is a date certain in which we and that customer have agreed that we are going to get to the definitive agreement. At that point, that awarded capacity would convert into our backlog, what Mike just talked about.

Speaker #4: When we talk about awarded capacity agreements, what we're talking about there is that we, along with the customer, have agreed to allocate manufacturing capacity in support of that customer's order.

Speaker #4: Along with that awarded capacity, there is a date certain in which we and that customer have agreed that we're going to get to the definitive agreement.

Speaker #4: And at that point, that awarded capacity would convert into our backlog, what Mike just talked about. And what you find in our backlog are things that are committed firm project orders, and that's the way we've, you know, reported backlog for probably the last six or seven years, in terms of that backlog number.

Jason Few: What you find in our backlog are things that are committed firm project orders, and that is the way we have reported backlog for probably the last six or seven years in terms of that backlog number. What you should really look for is the velocity in which we take awarded capacity and convert that into committed definitive agreements. But in each of those awarded capacity agreements, there is a timeline tied to getting to that definitive agreement. Again, what it gives the customer, the benefit for the customer is it reserves manufacturing capacity. It gives them the ability to complete their final designs from an architecture perspective in terms of everything from our Energy Block all the way to the rack and how they are going to do that, and to finalize their agreements with their customers.

Speaker #4: So what you should really look for is the velocity in which we take awarded capacity and convert that into committed definitive agreements.

Speaker #4: But in each of those awarded capacity agreements, there is a timeline tied to getting to that definitive agreement. And again, what it gives the customer—the benefit for the customer—is it reserves manufacturing capacity, right?

Speaker #4: And it gives them the ability to complete their final designs from an architecture perspective, in terms of everything from our energy block all the way to the rack, and how they're going to do that.

Speaker #4: And then finalize their agreements with their customers. This gives us better visibility into our planning and gives us the ability to make purchases on materials from a supply perspective.

Jason Few: It gives us better visibility into our planning, gives us the ability to make purchases on materials from a supply perspective, there is financial consideration for providing that committed capacity reservation.

Speaker #4: And there's, you know, a financial consideration for providing that committed capacity reservation.

Speaker #7: Okay. That helps. Appreciate it.

Chris Ellinghaus: Okay. That helps. Appreciate it.

Speaker #4: Thank you.

Speaker #3: With no further questions, that concludes our Q&A session. I'll now turn the conference back over to President and CEO, Jason Few, for closing remarks.

Operator: With no further questions, that concludes our Q&A session. I will now turn the conference back over to President and CEO, Jason Few, for closing remarks.

Speaker #4: Thank you, JL. And before we conclude, I want to leave you with this: The opportunity in front of FuelCell Energy is significant. AI and high-density computing are creating an urgent need for reliable, scalable power, and our technology is positioned to help meet that need.

Jason Few: Thank you, Jael. Before we conclude, I want to leave you with this. The opportunity in front of FuelCell Energy is significant. AI and high-density computing are creating an urgent need for reliable, scalable power, our technology is positioned to help meet that need. But opportunity alone does not create value, execution does. Our focus is clear: convert awarded capacity and our pipeline into closed transactions, scale manufacturing with discipline, deliver for our customers. We will align investment with commercial commitments, increase capacity responsibly, scale to drive greater cost leverage across the business. Partnership will be central to that execution. Our collaboration with Fit Energy, Siemens, and the customers reserving manufacturing capacity demonstrates what is possible when technology, capital, industrial capability, and customer demand come together around a shared objective. These are not simply commercial relationships.

Speaker #4: But opportunity alone does not create value—execution does. Our focus is clear: convert awarded capacity and our pipeline into closed transactions, scale manufacturing with discipline, and deliver for our customers.

Speaker #4: We will align investment with commercial commitments, increase capacity responsibly, and scale to drive greater cost leverage across the business. Partnership will be central to that execution.

Speaker #4: Our collaboration with FitEnergy, Siemens, and the customers reserving manufacturing capacity demonstrates what is possible when technology, capital, industrial capability, and customer demand come together around a shared objective.

Speaker #4: These are not simply commercial relationships. They are partnerships built to accelerate deployment, reduce execution risk, and create long-term value for everyone involved. We believe the market is moving toward us.

Jason Few: They are partnerships built to accelerate deployment, reduce execution risk, and create long-term value for everyone involved. We believe the market is moving toward us. Power has become a strategic constraint, and FuelCell Energy has the technology, manufacturing platform, and partnerships to help customers move from ambition to operation. Now we must execute with urgency, discipline, and consistency. Before we close, I want to thank the entire FuelCell Energy team. Your commitment, resilience, and focus makes our progress possible. I also want to thank our customers, partners, and shareholders for your continued confidence and support. We appreciate your time today and look forward to updating you on our progress next quarter. Thank you.

Speaker #4: Power has become a strategic constraint, and FuelCell Energy has the technology, manufacturing platform, and partnerships to help customers move from ambition to operation. Now we must execute with urgency, discipline, and consistency.

Speaker #4: Before we close, I want to thank the entire FuelCell Energy team. Your commitment, resilience, and focus make our progress possible. I also want to thank our customers, partners, and shareholders for your continued confidence and support.

Speaker #4: We appreciate your time today and look forward to updating you on our progress next quarter. Thank you.

Operator: This concludes today's conference call. You may now disconnect.