Jeffrey Osborne

Jeffrey Osborne from TD Cowen asked for an update on FuelCell Energy's legacy commercial business, particularly distributed power generation, following the reinstatement of the ITC. He also inquired about the remaining GGE module deliveries, expectations for Q4 and Q1, the current and projected run rate of the Torrington facility, and the gross margin breakeven run rate.

Answer

Jason Few (Director, President & CEO, FuelCell Energy) confirmed continued opportunities in distributed power generation, leveraging the ITC for 'singles and doubles' and focusing on grid resiliency, reliability, and multi-fuel capabilities. Michael Bishop (EVP, CFO & Treasurer, FuelCell Energy) stated 16 GGE modules remain for the current fiscal year (8 in Q4, 16 next fiscal year), with CGN module deliveries starting in FY26. Bishop noted the Torrington facility currently runs at 30-40 megawatts annually, expecting adjusted EBITDA positive at 100 megawatts production volume, and confirmed 40-45 megawatts annualized run rate for product gross margin breakeven (excluding capacity costs).

Jeffrey Osborne of TD Cowen questioned the shift in the EBITDA breakeven driver from the generation portfolio size to manufacturing volume. He also asked if future average selling prices (ASPs) for data center applications would be similar to past orders, given the rising costs of competing gas turbines.

Answer

Michael Bishop, EVP, CFO & Treasurer, explained that while the generation portfolio provides a stable contribution, the company's strategic focus is now on being a product and service business, selling into partnerships like DPP and the Korean market. Jason Few, President & CEO, added that rising gas turbine costs and lead times represent a competitive tailwind, allowing FuelCell to meet 'time to power' needs without significantly altering its own pricing.

Jeff Osborne from TD Cowen inquired about the operating expense cadence, the timing and magnitude of restructuring charges in Q3, and the financial framework for achieving cash flow positivity by the end of 2027. He also asked for an update on the material handling market.

Answer

VP of Finance Jay Murray clarified that the bulk of restructuring charges will be incurred in Q3, with the recent actions expected to reduce go-forward operating costs by another 30%, primarily realized in 2026. CEO Marty Neese added that the goal is to be cash flow positive exiting 2027, based on a detailed 10-quarter plan. Regarding material handling, Neese noted seeing 'green shoots' in demand for stack replacements from OEMs and integrators seeking higher durability.

Jeff Osborne from TD Cowen asked for clarity on the Q2 operating expense cadence, future restructuring charges, the financial model for achieving cash flow positivity by 2027, and market activity in material handling.

Answer

VP of Finance Jay Murray and CEO Marty Neese clarified that the bulk of restructuring charges will occur in Q3, aiming for a 30% reduction in go-forward operating costs. Neese confirmed the goal is to be cash flow positive *exiting* 2027, based on a detailed ten-quarter plan. He also noted seeing 'green shoots' in the material handling market, specifically for stack replacements where Ballard's product durability is a key differentiator.

Jeffrey Osborne asked if Q4 orders were related to ITC safe-harboring and questioned the risk of delivery delays for the U.S. backlog due to hydrogen infrastructure timing.

Answer

CEO Randall MacEwen confirmed that none of the Q4 orders were related to safe-harboring activities. He also expressed confidence in the 2025 delivery schedule, stating that key customers in the U.S. rail and bus segments, such as CPKC, Stadler, and major transit operators, already have their hydrogen production or fueling infrastructure secured, mitigating the risk of delays.

Jeffrey Osborne from TD Cowen asked for confirmation that the transmission line remediation work causing curtailment was complete and sought details on a legal settlement with a battery supplier.

Answer

CFO Assi Ginzburg confirmed that NV Energy has completed the transmission line work, and Ormat expects significantly less curtailment in the second half of the year. He also clarified that the legal settlement was from a year-old issue where a supplier failed to deliver on a fixed-price battery contract, resulting in quarterly reimbursement income for Ormat.

Jeffrey Osborne of TD Cowen asked for an update on the cadence of remaining contract renewals through 2028 and the status of the potential sale of the Oxbow power line.

Answer

CEO Doron Blachar clarified that the remaining contract renewals in Nevada through 2028 fall under a previously signed portfolio PPA with NV Energy at rates around $70/MWh, which is still an uplift. He also noted a separate California contract for the Heber facility is expected to be finalized soon at around $100/MWh. Regarding the Oxbow power line, he confirmed it is a non-core asset that Ormat is actively in the process of selling.

Jeffrey Osborne inquired about the sentiment among smaller IPPs and EPCs, seeking to understand the reasons for the Q3 guidance and the basis for confidence in a Q4 rebound. He also requested details on the $4 million charge and the rationale for the recent capital raise structure versus using the existing ATM facility.

Answer

President, CEO & Director Yann Brandt expressed confidence in a Q4 rebound, citing close collaboration with smaller developers who are finalizing capital for their project pipelines. CFO Cathy Behnen clarified the $4 million charge was a maximum potential accrual related to a minimum purchase commitment with Alpha Steel for their joint venture. Regarding the financing, Brandt described the $75 million deal with Clean Hill as an opportunistic move to secure a strong partner and a robust balance sheet, which he noted has already begun opening doors to new business opportunities faster than anticipated.

Jeffrey Osborne inquired about FTC Solar's direct financial exposure to tariffs on imported components and whether recent AD/CVD rulings have caused customers to alter module configurations, potentially delaying project deliveries.

Answer

President and CEO Yann Brandt explained that while some imported components are subject to tariffs, the company mitigates this through a diversified supply chain. He clarified that contractually, the majority of tariff costs are passed through to customers, resulting in minimal direct financial impact on FTC Solar. Brandt also noted that the market had largely anticipated the AD/CVD results and that FTC's module-agnostic tracker design has not seen significant project shifts or delays due to module changes.

Jeffrey Osborne of TD Cowen asked for quantification of the 1P tracker's installation speed benefits, the company's long-term gross margin targets, and its exposure to recent steel price volatility.

Answer

President and CEO Yann Brandt reaffirmed that the 1P Pioneer tracker can be 30-40% faster to install, potentially saving over $0.03 per watt for EPCs. Regarding long-term margins, Brandt stated that at scale, FTC's margins should align with peers, with opportunities for improvement from their SunPath software. He clarified that the company has limited to zero exposure to steel price volatility due to its back-to-back procurement strategy, where steel prices are secured when purchase orders are finalized.

Inquired about the working capital needs for a production ramp-up and the financial implications of the warrant exercise, specifically how much capital is needed to fully build out Fab 2.

Answer

The company is sufficiently capitalized for the initial ramp. While a partial warrant exercise won't fund all four planned manufacturing lines, the funds raised plus existing cash are enough to add significant capacity (like a second line) and meet key milestones.

Jeffrey Osborne of TD Cowen inquired about the potential need for working capital growth to support new customer wins and asked about the capital required from the warrant exercise to fully build out Fab 2.

Answer

CFO Ryan Benton stated that the company is 'operating to win' and is sufficiently capitalized with over $203 million in cash to support a manufacturing ramp. He clarified that while proceeds from half the warrants would not be enough to build all four planned lines, it would be sufficient to add a second line, significantly increasing capacity. He also noted that approximately $34 million had been exercised to date.

Jeff Osborne of TD Cowen asked for details on the pace of regulatory approvals impacting backlog, sought to reconcile macro versus micro reasons for project delays, and inquired if the typical revenue recognition timeline is lengthening.

Answer

CEO Tom Deitrich stated that the pipeline of awarded-but-not-yet-approved projects is within a normal range. He clarified that while long-term utility CapEx is rising, near-term annual budget constraints are causing project slowdowns. He also confirmed that the lag from project approval to revenue recognition is trending towards the longer end of the typical 9-12 month range due to project sequencing by customers.

Jeffrey Osborne sought clarification on the $15 million tariff impact, asking if it contemplates future changes, and questioned if mitigation efforts would increase CapEx or face regulatory hurdles on pricing.

Answer

CEO Tom Deitrich clarified the $15 million net impact is based only on tariffs in effect today and does not anticipate future changes. He stated that no material change in CapEx is expected from mitigation efforts. He also explained that pricing adjustments are made using contractual flexibility established in recent years and he is not aware of customers needing to seek regulatory approval for these changes to date.

Jeffrey Osborne questioned the expected cadence of 2025 bookings, the potential impact of tariffs on components from Mexico, and how Itron defines its services and outcomes revenue relative to competitors.

Answer

CEO Tom Deitrich indicated that while 2025 bookings are difficult to predict quarterly, he doesn't expect the same 'big hockey stick' as 2024 but anticipates a book-to-bill of at least 1:1 for the full year. Regarding tariffs, Deitrich acknowledged that Itron has a 'fair amount of components coming in from Mexico' and is mindful of potential impacts, using inventory and a multi-sourcing program as mitigation. He clarified that for Itron, 15-20% of total revenue is software and services, with the majority residing in the Outcomes segment, acknowledging that competitors may classify these items differently.

Jeffrey Osborne sought to clarify the timing of the $1 billion in bookings, the strength in the water business, and the company's current M&A pipeline and strategy.

Answer

CEO Tom Deitrich clarified that regulatory *progress* has been made on a significant portion of the $1 billion pipeline, which gives confidence for Q4 bookings, but they are not all booked yet. He noted that water segment strength may normalize as supply chains improve and customer inventory levels adjust. Regarding M&A, Deitrich stated the company is actively seeking acquisitions that accelerate Outcomes growth, particularly in scalable grid edge intelligence platforms.

Jeff Osborne of TD Cowen asked for clarification on the revenue recognition timing for the large strategic customer in Q2 and inquired about the current order-to-delivery lead times being quoted to customers.

Answer

CCO & Interim CFO Nathan Kreger confirmed that the vast majority of the revenue for the strategic project was recognized in Q2 upon delivery, as shipments are complete. Regarding lead times, Kreger explained that delivery windows are negotiated with each customer. The company's single SKU product design provides significant flexibility to adjust production slots to meet specific customer delivery schedules.

Jeffrey Osborne questioned the strategy of extending and enlarging the existing CCH1 vehicle rather than creating a new CCH2, and asked for more detail on how the pipeline is insulated from battery tariff risks.

Answer

President and CEO Jeffrey Lipson explained that extending the successful CCH1 partnership and adding debt to increase its capacity to $2.5-$3.0 billion was a prudent way to move forward. Regarding tariffs, he reiterated that projects in the 12-18 month pipeline are at a late stage of development where equipment has generally already been procured, mitigating the risk of delays.

Requested a reconciliation between the adjusted Q4 EBITDA margin and the 2025 guidance, asked about CapEx for a potential second U.S. facility, and sought clarification on a legacy warranty charge.

Answer

The main drag on 2025 EBITDA margin guidance compared to the adjusted Q4 run-rate is underutilization at the Turkey and India factories. The 2025 CapEx guidance of $25-30M does not include the second U.S. facility, which would cost about $30M. The legacy warranty charge was a normal course change in estimate for older projects and is not linked to current product performance or the new Blade Assure program.

Questioned the nature of the $20M quality-related revenue hit, whether the issues were resolved, and inquired about plans for European expansion and the associated CapEx.

Answer

The $20M impact was due to a deliberate slowdown in pre-production to ensure quality on new blade models, not a post-production issue, and processes are now set for H2. European expansion is being considered to serve the market cost-effectively, potentially in Turkey or elsewhere, with a rule-of-thumb CapEx of $6-7 million per line.

Jeffrey Osborne from TD Cowen asked for clarification on the $20 million revenue impact from a heightened focus on quality, specifically whether it was a pre-production issue and if it has been fully remediated. He also inquired about plans for serving the European market, including potential new sites and the associated CapEx.

Answer

President and CEO William Siwek clarified the quality issue was a deliberate slowdown during the initial build process with customers to ensure process integrity before serial production, not a remediation of a problem. Regarding Europe, he stated TPI is exploring options to serve the market cost-effectively, which could include expansion in Turkey or elsewhere. He reiterated a rule of thumb for CapEx at $6-7 million per line for a new facility.

Jeff Osborne asked for a ranking of Q4 free cash flow drivers, the specific cash amount from 45X credits, and the production volume of U.S.-made inverters and optimizers in Q4.

Answer

CFO Ariel Porat declined to disclose the specific cash amount from 45X monetization or the production volumes of eligible U.S. products. He reiterated that 45X is now part of normal business operations and will not be broken out separately, though he noted generation potential will increase as U.S. facilities ramp.

Jeffrey Osborne requested an update on the company's total annualized manufacturing capacity for 2026 and asked about the qualification process for Chinese-made PyroThin products with customers like GM.

Answer

CFO Ricardo Rodriguez explained that qualifying products from a new facility is a standard process and customers are indifferent to the manufacturing location. He stated that the Rhode Island plant's capacity could approach $600 million, supplemented by the external facility adding capacity in increments of $150 million to $200 million per year.

Jeffrey Osborne sought clarification on whether the 25% lower production cost estimate for the Georgia plant was relative to Aspen's own Rhode Island facility. He also asked about the launch cadence for the Audi platform and whether the company was exploring backup financing options for Plant 2.

Answer

CFO Ricardo Rodriguez confirmed the 25% lower cost benchmark includes the Rhode Island plant and other benchmarked facilities. Regarding Audi, he stated that while prototype volumes are increasing, Aspen does not expect full volume production revenues until the second half of 2025. On financing, he asserted that the company is fully focused on sprinting ahead to close the DOE loan in Q1 and is not currently exploring alternatives.

Jeffrey Osborne asked how investors should define success for the 2025 launch, for a characterization of the competitive landscape, and for key cost-reduction initiatives for 2025 beyond hardware.

Answer

CEO Christopher Urmson defined 2025 success as proving the technology with driverless operations, demonstrating scalability by launching new lanes, and introducing hardware that enables profitability. He described the competitive landscape as 'ours to win,' asserting Aurora is ahead of competitors. Key cost levers mentioned were reducing on-site support (via API), lowering remote support costs, and improving insurance pricing through demonstrated safety.

Jeff Osborne inquired about the specific launch capacity contracted, the duration of those contracts, whether the launch delay creates any contractual hardships, and for more granular examples of the construction zone challenges being addressed.

Answer

CFO David Maday and CEO Christopher Urmson clarified that the launch will scale from one truck up to 10, and then into the 'tens of trucks' by the end of 2025. They noted contracts are typically annual and confirmed the delay causes no penalties, as safety is the priority for all partners. Urmson explained the remaining work on construction zones is about validating variability, not specific edge cases, and highlighted that there have been no construction-related disengagements on the launch lane since May.

Jeffrey Osborne asked for updated usage metrics for the generative AI platform to see if initial adoption has tapered off and inquired about the company's minimum comfortable cash balance ahead of the June convertible note maturity.

Answer

CEO Brian Krzanich reported that while he had no new specific metrics, cloud traffic and usage of the generative AI platform continue to increase with no signs of tapering off as users discover more capabilities. Executive Antonio Rodriquez stated that while there is no formal minimum cash balance, the company would be comfortable with a balance north of $70 million post-payoff and is confident in its ability to grow cash flow from that level.

Jeffrey Osborne questioned the drop in guided U.S.-made microinverters receiving 45X credits (from 1.7M in Q4 to 1.2M in Q1) despite the safe harbor ramp. He also asked for clarification on the $110 million in Q4 prepayments when the safe harbor deal was only $95 million.

Answer

President and CEO Badrinarayanan Kothandaraman explained the 1.2M unit guidance is conservative and reflects the need to balance production across global manufacturing sites in the U.S. and India. Regarding prepayments, he stated the additional $15 million came from smaller, run-rate customer orders to secure capacity, which are expected to be consumed within one to two quarters and are not classified as long-term safe harbor.

Jeffrey Osborne of TD Cowen questioned the expected OpEx run rate for the coming quarters and asked for specific details about the new European OEM contract, including model year timing, product type, and whether it's a standard feature.

Answer

CFO Meir Peleg stated that OpEx is expected to remain stable, with a slight reduction in R&D in 2025, allowing revenue growth to drive the company toward EBITDA positivity. CEO Eyal Peso clarified that the new OEM contract is for EV models launching in late 2025 and early 2026, with Gauzy's shipments ramping in the latter half of 2025. The product is a specialized auto-grade LC smart glass roof for four different models, and its inclusion will be a mix of standard and optional features. He reiterated the 50,000 cars per year figure is a minimum commitment.

Asked for clarification on the manufacturing process flow between Coventry and Roush, the timeline for revenue-generating vehicle deliveries, the maximum production capacity at the Roush facility, and when to expect updated guidance on the production plan and financial targets.

Answer

REE will manufacture the corners in Coventry, while Roush will handle final vehicle assembly in the U.S. using locally sourced components managed by REE and Motherson. Revenue-generating deliveries will begin in 2025. The Roush facility has a potential capacity of 5,000 units/year on two shifts. Updated guidance will be provided once the new production plan with Motherson is finalized, which may take longer than until the next call.

Jeff Osborne sought to clarify the manufacturing process flow between Coventry and Roush, the timing for revenue-generating deliveries, the maximum production capacity at Roush's facility, and when an updated production plan with new financial targets might be provided.

Answer

COO Josh Tech explained that REE will manufacture the proprietary REEcorners in Coventry, while Roush will handle full vehicle assembly in the U.S. using locally sourced components, with Motherson managing the supply chain. He reiterated that deliveries will begin in 2025 and that the Roush facility can scale to 5,000 vehicles per year. CEO Daniel Barel stated that while they are working hard on the updated plan, it will take more time to finalize following the recent Motherson agreement.

Asked about the application scope for new OEM partners (commercial vs. diversified), the associated R&D and margin trade-offs of selling corners versus full platforms, and several housekeeping questions regarding the source of Q1 revenue, the timing of future vehicle revenue, and the number of demo vehicles produced to date.

Answer

The focus for new partners is primarily commercial vehicles, with potential for other segments like passenger and heavy-duty. The core R&D is complete, limiting incremental OpEx, and selling just the corners offers the highest margins. Q1 revenue of $160,000 was from a platform sale, not a vehicle. Revenue from the $50M order book is expected a few months after production scales. Five demo vehicles have been delivered to date.

Jeffrey Osborne from TD Cowen followed up on the OEM partnership discussions, asking if the applications were limited to commercial vehicles. He also explored the financial trade-offs between selling REE Corners versus complete platforms. Additionally, he requested clarification on the source of Q1 revenue, the expected timing for initial vehicle sales revenue, and the total number of demo vehicles produced.

Answer

Executive Daniel Barel explained that while the focus is on commercial vehicles, there is interest from OEMs for passenger and heavy-duty applications. He noted that margins are highest on corners-only sales and that the core by-wire technology is the same across applications, requiring minimal incremental R&D. CFO Yaron Zaltsman clarified that Q1 revenue was from a platform sale, not a full vehicle, and stated that the $50 million order book could be recognized as revenue within a few months of scaling production. Daniel Barel added that five vehicles have been delivered to date.

Asked for an update on the European partner's inventory situation and its expected resolution timeline. Also inquired about the CapEx outlook for the second half of the year and beyond.

Answer

The partner's inventory issue is resolving, with volumes having ramped up through Q2 and expected to continue in Q3. CapEx for the year will be elevated due to investments in Euro 6 production but will be lower in the second half. Future CapEx should decline significantly with the JV now handling HPDI investments, potentially falling below $10M next year.

Inquired about the CapEx for mobile refuelers, the potential for more BEV repurchases, an updated volume target for breakeven, and the status of a historical large order from Anheuser-Busch.

Answer

The company confirmed the mobile refueler cost but kept annual CapEx guidance unchanged, citing financing and partner purchases. They do not anticipate more BEV repurchases but are reserved for them. They declined to provide an updated breakeven volume target, citing the newness of the strategy. The Anheuser-Busch relationship is with its distributors, and they are actively demoing with many large fleets.