Image source: The Motley Fool. DATEFriday, June 6, 2025 at 10 a.
ETCALL PARTICIPANTSPresident and Chief Executive Officer — Jason FewExecutive Vice President, Chief Financial Officer, and Treasurer — Michael BishopSenior Vice President, Investor Relations — Thomas GelstonNeed a quote from one of our analysts.
[ tected]RISKSThe restructuring plan will result in a reduced annualized duction rate at the Torrington manufacturing facility in the near term as it shifts to align duction fully with contracted demand, explicitly lowering near-term output.
Operating losses continue, with a net loss attributable to common stockholders of $38. 8 million and negative adjusted EBITDA of $19.
"Slower-than-expected investments in advanced alternative energy nology" required a global restructuring, including significant workforce reductions and reductions in re and development spending, which may constrain future innovation.
TAKEAWAYSTotal Revenue: $37. 4 million GAAP revenue, up from $22. 4 million, driven by $13 million in duct revenue (up from zero) and $8. 1 million in service agreement revenue (up from $1. 4 million).
Operating Loss: $35. 8 million, narrowing from $40. 4 million, for the second quarter of fiscal year 2025 as cost-reduction efforts take hold. Adjusted EBITDA: Adjusted EBITDA was negative $19.
3 million, an imvement from negative $26. 5 million, indicating gress toward targeted fitability. Net Loss Per : $1. 79 compared to $2.
18 (GAAP), with the decrease aided by a higher count ing recent issuances. Operating Expenses: $26. 4 million in the second quarter of fiscal year 2025, down from $34.
3 million in the second quarter of fiscal year 2024, with re and development expenses declining to $9. 9 million from $16. 6 million over the same periods.
Annualized duction Rate (Torrington): 31 megawatts as of April 30, 2025, materially below the 100-megawatt threshold cited for breakeven adjusted EBITDA and expected to decrease in the near term due to restructuring.
Backlog: $1. 26 billion, up 18. 7% from $1. 06 billion, supported by new long-term service agreements, including a $167. 4 million addition for a Hartford, Connecticut, ject.
Cash and Investments: $240 million in cash, restricted cash, cash equivalents, and short-term investments.
Restructuring Plan: The company targets a 30% reduction in annualized operating expenses versus FY2024, shifting investment to the ven molten carbonate platform and “pausing broader solid oxide R&D immediately.
”Dedicated Power Partners (DPP): Strategic partnership with Diversified Energy and TESIAC launched to accelerate carbonate fuel cell deployment for large-scale data centers, leveraging stable fuel supply and imved ject economics.
Generation Revenue: $12. 1 million, down from $14. 1 million, primarily due to lower power output from maintenance activities.
Advanced nology Contract Revenue: Advanced nology contract revenues were $4. 1 million, declining from $6. 9 million, reflecting reduced gross margin and narrower segment focus.
Cost Control Efforts: Administrative and selling expenses decreased to $16. 5 million during the second quarter of fiscal year 2025 from $17.
7 million during the second quarter of fiscal year 2024, with reductions closely tied to recent restructuring actions.
Manufacturing Capacity: Torrington facility can scale to 100 megawatts annually without additional capital investment; expansion to 200 megawatts is possible, but would require further capex in equipment and labor.
SUMMARYFuelCell (FCEL 3. 38%) management introduced a sweeping restructuring, shifting resources to its carbonate platform, scaling back solid oxide R&D, and pausing broader development efforts.
The Dedicated Power Partners initiative marks a major new partnership targeting growth in the large-scale data center segment by integrating fuel supply, power generation, and financing solutions.
The company posted substantially increased total and service revenues, while maintaining a strong liquidity position with $240 million in cash and investments.
New long-term service and power purchase agreements contributed to a rapidly rising backlog, now at $1. 26 billion.
Guidance indicates that reaching 100 megawatts of annualized output at Torrington is required for positive adjusted EBITDA (non-GAAP), but near-term duction will decline as output is aligned with demand orders.
Chief Executive Officer Few said, "We are taking decisive actions to line our cost structure, seize the opportunities directly in front of us and der meaningful results.
"Management expects a 30% reduction in annualized operating expenses compared to FY2024, reflecting a significant commitment to cost discipline and strengthening future fitability spects.
Strategic focus now emphasizes securing orders and scaling ven nologies for immediate customer needs rather than expanding the company’s generation portfolio.
Chief Financial Officer Bishop confirmed, we can achieve adjusted EBITDA positive when we get the factory in the 100 megawatt range, establishing a operational fitability target.
The new Dedicated Power Partners model is expected to use power purchase agreements as the primary customer finance structure, with alternative models based on client needs.
INDUSTRY GLOSSARYMolten Carbonate Platform: Core FuelCell Energy nology for stationary baseload power using carbonate fuel cells designed for high efficiency and scalable installation.
Dedicated Power Partners (DPP): Joint initiative by FuelCell Energy, Diversified Energy, and TESIAC to vide turnkey distributed power focused on large-scale data center use cases.
GGE LTSA: Long-term service agreement with GGE, contributing to both duct and service backlog as replacement modules are commissioned and serviced.
Energy as a Service: Offering in which customers contract for energy supply without owning or operating the underlying physical generation assets, usually through long-term agreements.
Full Conference Call TranscriptThomas Gelston: Thank you, and good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded.
This morning, FuelCell Energy released our financial results for the second quarter of fiscal year 2025, and our earnings press release is available in the Investors section of our website at www.
Fuelcellenergy. Consistent with our practice, in addition to this call and our earnings press release, we have posted a slide presentation on our website.
This webcast is being recorded and will be available for replay on our website apximately 2 hours after we conclude the call.
Before we begin, please note that some of the information that you will hear or be vided with today will consist of forward-looking statements within the meaning of the Securities and Exchange Act of 1934.
Such statements express our expectations, beliefs and intentions regarding the future, and include, without limitation, statements with respect to our anticipated financial results, our plans and expectations regarding the continuing development, commercialization and financing of our fuel cell nology and our 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 Securities and Exchange Commission, particularly the Risk Factors section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.
During the course of this call, we will be discussing certain non-GAAP financial measures, and we refer you to our website and to our earnings press release and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures.
Our earnings press release and a copy of today's webcast presentation are available on our website under the Investors tab.
For our call today, I'm joined by Jason Few, FuelCell Energy's President and Chief Executive Officer; and Mike Bishop, FuelCell Energy's Executive Vice President, Chief Financial Officer and Treasurer.
Ing our prepared remarks, we will be available to take your questions and be joined by other members of the leadership team. I'll now hand the call over to Jason for opening remarks.
Jason Few: Thank you, Tom, and good morning, everyone. Thank you for joining us on our call today.
Along with our earnings announcement this morning, FuelCell Energy announced a restructuring plan that prioritizes sales of our molten carbonate platform.
Additionally, as I this effort, we are taking meaningful steps to rightsize our, manage expenses, and position ourselves to take advantage of near-term opportunities.
Altogether, we believe this strategy will accelerate the timeline toward expected fitability.
We believe that this restructuring plan will sharpen and accelerate our path to positive cash flow and growth.
We are intensifying our focus on our carbonate platform while reducing overhead to optimize our supply chain and focusing on driving efficiency.
At the same time, we will strategically preserve the platform's long-term flexibility with the goal of unlocking further opportunities such as carbon capture.
Regarding our solid oxide platform, our exclusive focus will remain on validating and demonstrating our electrolysis nology at the U. Department of Energy's Idaho National Laboratory.
We are pausing broader solid oxide R&D immediately reducing costs and intensifying our investment in ven customer-ready solutions. We are focused on dering future-ready today.
We believe that a successful targeted demonstration at Idaho National Laboratory will position us strategically to capitalize as the hydrogen economy expands, highlighting our highly efficient and differentiated electrolysis platform.
Our restructuring plan, we will recalibrate our Torrington manufacturing facility duction schedule to align with contracted demand rather than forecasted demand, which without continued growth in our closed order book would result in a decrease in our annualized duction rate.
We believe that our disciplined demand-driven apach will position us for sustainable fitability and growth in the future, while maximizing efficiency and dering measurable value.
With our enhanced focus on our core nologies, specifically the manufacture and sale of our carbonate platforms and the growing demand for distributed power generation in the U.
, Asia and Europe, we are targeting the future achievement of positive adjusted EBITDA once our Torrington manufacturing facility, which is an annualized duction rate of 100 megawatts per year.
However, as of April 30, 2025, the facility operated at an annualized duction rate of apximately 31 megawatts. The bottom line.
We are taking decisive actions to line our cost structure, seize the opportunities directly in front of us, and der meaningful results.
We're building a stronger, more focused company, and we look forward to sharing our continued gress in the quarters ahead.
While restructuring is never easy, we believe that prioritizing sales of our ven carbonate platform and scaling back R&D investments is the right move to drive the company towards fitability.
What remains unchanged is our purpose. POSCO Energy is steadfast in our commitment to enabling a world powered by clean energy.
Our core value position is rooted in energy integration, seamlessly combining fuel cell solutions with other generation nologies.
This allows commercial, industrial, and utility customers to integrate our platforms without overhauling operations are taking on the interruption risk of intermittent power sources.
Leveraging clean, abundant or gas and biogas, our solutions help customers operate with greater reliability, efficiency, and affordability while reducing emissions, preserving air quality, and maintaining continuity in the ducts and services they der.
So what does our opportunity set look. Let's start with one of the most powerful and durable tailwinds we have, growing global demand for power. Global power demand remains strong.
Around the world, electricity demand is rising fast. Straining existing grid infrastructure and exposing the limitations of traditional power sources and the grid centralized architecture.
This isn't a temporary surge. It's a long-term mega trend and it is directly reinforces the relevance of our nology and strategy.
The explosion of AI, the rapid build-out of data centers and the intensifying carbon management and air quality are reshaping the global energy landscape. These trends are not political.
They are structural. They will continue across administrations and market cycles. They are here to stay. Just to frame the magnitude.
Alone, data centers are jected to require more than 600 terawatt hours of electricity annually by 2030. That's a 22% compounded annual growth rate over the next 5 years.
We believe the momentum behind these shifts is undeniable. And it's hard for us to imagine a future where FuelCell Energy is not part of the solution.
This is exactly the type of demand environment we are built for. And why our focus on our core carbon platform is so well aligned with the market opportunities in front of us.
Second, dedicated Power Partners. We believe we have taken a major step forward in unlocking market access through our new dedicated Power Partners or DPP strategic partnership.
DPP is the result of a strategic partnership with diversified energy company and -- and it is purpose-built to accelerate the deployment of our carbonate fuel cell for use in data centers and other large-scale commercial and industrial applications.
What makes this partnership so compelling is its potential ability to address one of the key constraints in our industry, available, reliable and affordable fuel supply.
By leveraging natural gas and coal mine methane sourced by diversified, we expect to gain access to stable fuel in strategically important at favorable price spreads and imved ject economics.
This is a smart high-leverage solution that we expect will help us scale faster, der more value to customers and open up entirely new market territory.
I'll go into more detail on DPP in a later slide but the early indicators are strong, and we are excited it, its potential to be a meaningful growth engine for FuelCell Energy.
Third, our strategic partnerships continue to drive commercial traction.
Our collaboration with ExxonMobil and carbon capture at the Rotterdam manufacturing complex is gressing well and positions us to expand this nology to new customers and partners.
We're also advancing commercialization of our solid oxide electrolyzer through key partnerships with Malaysia Marine and Abby engineering and Idaho National Laboratory.
These partnerships are essential, allowing us to push innovation forward while ma.