Executive Summary

Mixed print: revenue beat on product and service strength, but EPS loss was wider than consensus; restructuring deepens cost cuts and narrows path to profitability. Revenue $37.4M vs $32.4M cons (+15%) and EPS $(1.79) vs $(1.43) cons; Adjusted EBITDA improved to $(19.3)M YoY . Consensus figures marked with asterisks from S&P Global.*
Management announced a global restructuring (second in 7 months) targeting a 30% annualized OpEx reduction vs FY24 and pausing most solid oxide R&D to focus on carbonate platforms for data centers, grid resilience, and carbon recovery .
Strategy refocus: target positive Adjusted EBITDA at ~100 MW annualized production at Torrington (31 MW run-rate for 1H25; near-term production may decline while aligning with contracted demand); data center entry accelerates via Dedicated Power Partners (DPP) with Diversified Energy and TESIAC .
Backlog up 19% YoY to $1.26B, aided by Korea repowering LTSA (GGE) and a 20-year 7.4 MW Hartford PPA (+$167.4M backlog), supporting forward visibility .

What Went Well and What Went Wrong

What Went Well
- Revenue rose 67% YoY to $37.4M; product revenue returned ($13.0M) and service revenue expanded on module exchanges (United Illuminating) .
- Cost discipline gaining traction: OpEx declined to $26.4M from $34.3M YoY; Adjusted EBITDA improved to $(19.3)M from $(26.5)M YoY .
- Strategic positioning: CEO emphasized carbonate platform fit for surging AI/data center power needs; DPP partnership aims to solve “time-to-power” and fuel supply constraints. “We are targeting the future achievement of positive adjusted EBITDA once our Torrington…reaches…100 MW” .
What Went Wrong
- Profitability still distant: gross loss widened YoY to $(9.4)M; EPS of $(1.79) missed consensus (more negative than expected) . Consensus marked with asterisk from S&P Global.*
- Generation revenues fell to $12.1M (maintenance-driven lower output), while Advanced Technologies contracted to $4.1M (lower EMTEC/Esso/gov’t mix) .
- Production recalibration: Torrington to align with contracted demand (near-term annualized rate may decrease from ~31 MW 1H25), potentially tempering near-term scale benefits despite cost cuts .

Financial Results

P&L Trend (oldest → newest)

Metric ($USD)	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	49.33	19.00	37.41
Gross Loss ($M)	(10.92)	(5.20)	(9.44)
Gross Margin %	(22.1%)	(27.4%)	(25.2%)
Operating Expenses ($M)	30.12	27.65	26.37
Loss from Operations ($M)	(41.03)	(32.85)	(35.81)
Net Loss/Share ($)	(2.21)	(1.42)	(1.79)
Adjusted EBITDA ($M)	(25.34)	(21.07)	(19.31)

Note: Gross margin % calculated from reported revenue and gross loss; all figures reflect reverse split where applicable .

Actual vs Consensus (Q2 2025)

Metric	Actual	Consensus	Surprise
Revenue ($M)	37.41	32.42*	+$4.99M / +15.4%*
Primary EPS ($)	(1.79)	(1.43)*	—$0.36 (more negative)*
EPS – # est.	—	7*	—
Revenue – # est.	—	8*	—

Consensus values marked with an asterisk are retrieved from S&P Global.*

Segment Revenue ($M)

Segment	Q4 2024	Q1 2025	Q2 2025
Product	25.43	0.07	13.03
Service	5.57	1.85	8.14
Generation	11.96	11.35	12.12
Advanced Technologies	6.37	5.73	4.11
Total	49.33	19.00	37.41

KPIs and Balance Sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Total Backlog ($B)	1.163	1.313	1.260
Cash, Restricted Cash & ST Investments ($M)	318.0	270.7	240.0
Unrestricted Cash ($M)	148.1	98.1	116.1

Drivers: Q2 service revenue uplift from module exchanges at United Illuminating; generation headwind from maintenance; backlog supported by GGE LTSA and 7.4 MW Hartford PPA (+$167.4M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating Expense Reduction Target	FY2025 vs FY2024	~15% reduction (Nov 2024 plan)	~30% annualized reduction vs FY2024	Raised
Adjusted EBITDA Breakeven Threshold	Future run-rate	Not quantified	Positive Adj. EBITDA at ~100 MW annualized Torrington production	New KPI
Production Cadence	Near term	—	Recalibrate to contracted demand; near-term annualized rate may decrease (31 MW 1H25)	Lower near-term
Korea (GGE) Module Commissioning	2H FY2025 / FY2026	30 modules in CY2025; 6 in 1H CY2026 (prev.)	16 modules in 2H FY2025; 16 in FY2026	Updated sequencing
Quantitative Rev/EPS Guidance	FY2025	None provided	None provided (no change)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI/Data center power	Tailwind acknowledged; plan to capture via restructuring	DPP formed to accelerate carbonate deployments; “first power block in” focus	Strengthening
Cost discipline/restructuring	Nov-24 restructuring (~15% FY25 OpEx cut)	New global restructuring targets 30% reduction; pausing most solid oxide R&D	Accelerating
Korea (GGE) execution	Inventory build; shipments/support financing; CY25/26 commissioning	4 modules delivered in Q2; 16 modules planned 2H FY25; 16 in FY26	Executing
Solid oxide electrolyzer (INL)	Delivered demo unit to INL	Maintain validation/demo; broader SO R&D paused	Focused
Advanced Tech (Exxon/Rotterdam)	Progressing JDA/Esso PO	Continued, but revenue mix softer this quarter	Mixed
Liquidity/Financing	EXIM facility; strong cash/short-term investments	$240M cash/investments; ATM usage; pursuing strategic financing	Stable

Management Commentary

“We are targeting the future achievement of positive adjusted EBITDA once our Torrington…reaches an annualized production rate of 100 MW per year” .
“Our strategy includes a further global restructuring…reduce our workforce by approximately an incremental 22%…focus on…carbonate technologies” .
“DPP…accelerate the deployment of our carbonate fuel cell for use in data centers…address…available, reliable, and affordable fuel supply” .
“Operating expenses…decreased to $26.4 million…Administrative and selling…due to lower compensation…R&D…due to…lower spending on…solid oxide… and shift…to funded Advanced Technologies” .

Q&A Highlights

DPP traction: Active customer dialogues in Northern Virginia/Kentucky; model combines Diversified’s fuel supply, FCEL product, and Tessia financing to present PPAs to end users .
Profitability threshold: Adj. EBITDA positive at ~100 MW production; no incremental capex required to reach 100 MW; timing paced by order flow (data centers, distributed gen, Korea) .
Business mix: Emphasis on product and service vs expanding on-balance-sheet generation; generation still contributes but focus is sell-in/service annuities .
Pricing: Turbine price inflation/time-to-power constraints seen as tailwind; FCEL not planning significant customer price changes, sees opportunity to exploit demand .

Estimates Context

Q2 revenue beat: $37.41M vs $32.42M consensus; EPS miss: $(1.79) vs $(1.43) consensus; 7 EPS and 8 revenue estimates in the quarter.* Actuals supported by product resumption and service module exchanges despite generation maintenance headwinds .
Street implications: Revenue estimates likely to lift on GGE commissioning cadence and Hartford PPA backlog; near-term EPS may remain pressured by production recalibration and maintenance mix, partially offset by deeper OpEx cuts and service/product margin improvements .
Target price consensus mean: $7.84 (6 estimates).* No consensus recommendation text available.*

Consensus figures marked with an asterisk are retrieved from S&P Global.*

Key Takeaways for Investors

Revenue momentum returning with product/service contributions; however, profitability hinges on scaling to ~100 MW annualized output while maintaining cost discipline .
Elevated cost-cut target (30%) and paused solid oxide R&D should extend cash runway and sharpen focus on carbonate deployments for AI/data centers and grid resilience .
Backlog quality improving (Korea LTSA commissioning schedule, 20-year Hartford PPA), providing multi‑period visibility for product/service revenues .
Near-term gross margin can remain volatile given maintenance impacts in generation and AT revenue mix; watch mix shift and service module economics for inflection .
DPP is the swing factor: conversion of data center opportunities into signed PPAs could accelerate orders and factory utilization; absence of large wins would slow the path to 100 MW .
Trading setup: revenue beat vs EPS miss plus deeper restructuring can drive narrative rotation to execution and cost control; catalysts include DPP deal announcements, Korea module commissioning, and incremental PPAs .
Risk checks: production recalibration (near-term rate may decline), AT softness, and financing needs for commercial execution; monitor cash burn, ATM usage, and project financing progress .

FUELCELL ENERGY INC (FCEL)·Q2 2025 Earnings Summary