Executive Summary

Q3 2025 revenue of $0.603B missed S&P Global consensus ($0.760B) on slower-than-expected U.S. manufacturing ramp; however, adjusted gross margin rose to 15.4% and adjusted EBITDA to $27.4M, reflecting strong execution in EMEA/APAC mix and cost controls (beat on EPS) . Results vs estimates: Revenue miss, EPS beat (see tables; S&P Global for estimates)*.
Backlog remained robust at ~$4.9B at 6/30/25; order intake was ~$508.8M in Q3, with ~~$1.1B of additional contracts signed in July–August (including two in Australia), reinforcing FY26 visibility (~~$2.5B expected to convert) .
FY25 guidance reaffirmed: revenue $2.6–$2.8B (now expecting the low end), adjusted EBITDA $0–$20M (midpoint $10M), ARR ~ $145M; management also reaffirmed full-year adjusted gross margin of 10–12% .
Stock reaction catalysts: near-term focus on the U.S. manufacturing ramp cadence into calendar year-end, tariff/FEOC implementation clarity (OV3), and evidence of resumed U.S. contracting momentum alongside Australia/EMEA wins .

What Went Well and What Went Wrong

What Went Well
- Margin execution: Adjusted gross margin expanded to 15.4% (from 10.4% in Q2 and 17.5% YoY comp), and adjusted EBITDA improved to ~$27.4M; management: “We delivered strong margins… underscoring improved execution” .
- Commercial momentum post-quarter: ~$1.1B signed in July–August (incl. two Australia contracts), plus AGL Tomago (500 MW/2000 MWh) and AMPYR Wellington (300 MW/600 MWh) awards enhance pipeline and FY26 backlog conversion .
- Liquidity bolstered: Total liquidity ~$903M at 6/30 (incl. $459.9M total cash), plus new $150M unsecured supply chain facility in August .
What Went Wrong
- U.S. manufacturing ramp: Q3 revenue ~$0.603B was ~15% below plan as ramp delays at the new U.S. enclosure facility gated revenue recognition; ~$0.1B of FY25 revenue shifts to FY26 .
- U.S. tariff headwinds: Management cited tariff impacts driving softer Q4 gross margin (roughly $30M tariff cost in backlog, ~1% headwind) and noted prior halts in U.S. contracting that are now reactivated as tariff visibility improved .
- YoY gross margin compression (GAAP): GAAP gross margin 14.8% vs 17.2% YoY despite strong adj. margin; mix helped, but YoY compression remains a watch item .

Financial Results

Quarterly trajectory (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($USD Billions)	$0.187	$0.432	$0.603
Adjusted Gross Margin %	12.5%	10.4%	15.4%
Net Income (Loss) ($USD Millions)	$(57.0)	—	$6.9
Adjusted EBITDA ($USD Millions)	$(49.7)	$(30.0)	$27.4
Total Cash incl. Restricted ($USD Millions)	$654.4 (12/31/24)	—	$459.9 (6/30/25)
Total Liquidity ($USD Millions)	—	>$1,100 (Q2 commentary)	~$903 (6/30/25)

Notes: Q2 net income and Q2 cash not disclosed in cited documents; liquidity and cash figures reflect reported quarter-end dates as stated.

YoY comparison

Metric	Q3 2024	Q3 2025	YoY
Total Revenue ($USD Billions)	$0.483	$0.603	+24.7%
GAAP Gross Margin %	17.2%	14.8%	-240 bps
Adjusted Gross Margin %	17.5%	15.4%	-210 bps
Net Income ($USD Millions)	$1.1	$6.9	+$5.8
Adjusted EBITDA ($USD Millions)	$15.6	$27.4	+$11.8

Results vs S&P Global Consensus (Q3 2025)*

Metric	Actual	Consensus	Beat/Miss
Revenue ($USD Billions)	$0.603	$0.760*	Miss
Primary EPS ($)	0.0555*	0.014*	Beat

Forward look: Q4 2025 consensus revenue ~$1.388B*; Primary EPS ~$0.229*.
Methodology note: Company-reported diluted EPS for Q3 was $0.01 (basic $0.05), which may differ from S&P “Primary EPS” conventions .

*Values retrieved from S&P Global.

KPIs and Backlog

KPI	9/30/24	6/30/25	Change
Energy Storage Deployed (GW)	5.0	6.3	+1.3
Energy Storage Deployed (GWh)	12.8	16.7	+3.9
Energy Storage Contracted Backlog (GW)	7.5	8.2	+0.7
Energy Storage Pipeline (GW)	25.8	35.7	+9.9
Services AUM (GW)	4.3	5.5	+1.2
Digital AUM (GW)	18.3	21.6	+3.3
Q3 Order Intake (GW) – Products	1.6 (Q3’24)	0.7 (Q3’25)	(0.9)
Q3 Order Intake (GW) – Services	0.4 (Q3’24)	1.4 (Q3’25)	+1.0
Q3 Order Intake (GW) – Digital	0.6 (Q3’24)	0.9 (Q3’25)	+0.3
Backlog ($) at 6/30/25	—	~$4.9B	—

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($)	FY2025	$2.6–$2.8B (Q2 reset)	$2.6–$2.8B; now expecting low end	Maintained; lower-end bias
Adjusted EBITDA ($)	FY2025	$0–$20M (midpoint $10M) (Q2 reset)	$0–$20M (midpoint $10M)	Maintained
ARR ($)	FY2025	~ $145M (reaffirmed Q2)	~ $145M	Maintained
Adjusted Gross Margin %	FY2025	10–12% (verbally)	10–12%	Maintained

Additional outlook commentary: FY26 visibility supported by ~$2.5B of backlog expected to convert to revenue; management plans to guide FY26 off 80–90% backlog coverage in November .

Earnings Call Themes & Trends

Topic	Q1 2025 (previous)	Q2 2025 (previous)	Q3 2025 (current)	Trend
U.S. tariffs & policy (OV3/FEOC)	Lowered FY25 outlook; reinforced domestic content strategy and backlog strength	Tariff shock paused U.S. contracting; reset FY25 revenue/EBITDA; mixing strategy and diversified supply chain emphasized	OV3 supportive for storage; China tariff on certain components reduced from 155.9% to 40.9%; DOC preliminary 114% graphite duty manageable; all paused U.S. contracts reactivated	Improving clarity; supportive policy; cautious on Q4 margin
Manufacturing ramp (U.S.)	—	U.S. domestic chain in place; six partner facilities ramping	Arizona enclosure line ramp issues gated revenue; recovery milestones hit; targeted capacity by calendar year-end	Transitory headwind; recovery in progress
Geographies/mix	—	Expect international strength (Australia, EMEA)	>50% of Q3 revenue international; margins supported by EMEA/APAC delivery mix	International diversification aids margins
Backlog & pipeline	Backlog ~$5.1B at 12/31; strong interest in U.S. domestic product	Backlog ~$4.9B; pipeline >$22B	Backlog ~$4.9B at 6/30; +$1.1B signed in Jul–Aug; pipeline grew to $23.5B	Strengthening post-quarter
Data center/AI demand	—	—	Engaging directly with data centers; emerging need to buffer volatile AI loads; est. $8.5B opportunity through 2030	New TAM vector; early-stage
Opex discipline	—	OpEx elevated for Smartstack; plan for profitability and FCF in FY26	Plan to keep OpEx flat in FY26 vs FY25; focus on G&A efficiencies	Tightening cost control

Management Commentary

“We delivered strong margins this quarter… We also began ramping production and delivered our first domestic content products from U.S.-based manufacturing facilities… delays in scaling our new manufacturing facilities… resulted in lower-than-expected revenue… We anticipate recovering this revenue in fiscal 2026…” — CEO .
“We generated $603M of revenue… approximately $100M or 15% below plan due to a slower ramp up at our new U.S. manufacturing facilities… Q3 adjusted gross margin was 15.4%… adjusted EBITDA was approximately $27M… More than $900M in liquidity… executed a new $150M unsecured supply chain facility (~6% all-in)” — CFO .
“OV3… extends ITC for standalone storage, limits eligibility for Chinese equipment, tightens FEOC requirements… We believe these provisions enhance our competitive position…” — CEO .
“All of our contracts that were halted in the U.S. due to tariff and regulatory uncertainty are now reactivated… tariff on certain Chinese battery components has been reduced from 155.9% to 40.9%” — CEO .

Q&A Highlights

Q4 margin/tariffs: Q4 weighted to U.S.; tariff impact roughly $30M (~1% headwind), driving softer full-year gross margin; 2026 gross margins expected roughly in line with 10–12% range .
FEOC/45X compliance and AESC: Company working on ownership/control/materials options with AESC to meet OV3 by the deadline; does not foresee need to raise equity to achieve compliance .
Data center opportunity: Direct engagement with data centers; pipeline building; no signed contracts yet; storage seen as critical for volatile AI load profiles .
Manufacturing ramp specifics: Enclosures at the Arizona site were gating; processes adapted to U.S. factory/OSHA; ramp targeted by calendar year-end; ~$100M of FY25 revenue shifts to FY26 .
OpEx: Plan to hold OpEx flat in FY26 vs FY25 given 2025 growth shortfall; post-2026 to grow at ~half of top line growth .
Pricing/mix: International EPC scope lifts realized ASPs; U.S. pricing to reflect new cost structure; expect new contracts to return margins to 10–15% range over time .

Estimates Context

Q3 2025: Revenue missed; EPS beat (see table). Consensus for Q4 implies a large revenue quarter ahead; management still guides FY25 to the low end, with ~$0.1B sliding to FY26 due to U.S. ramp .
Potential estimate revisions: Street likely to lower Q4 gross margin expectations given U.S. mix and tariff pass-through dynamics, while raising confidence in FY26 revenue conversion (backlog coverage strategy and post-quarter bookings) .

Values retrieved from S&P Global.

Key Takeaways for Investors

Execution bifurcation: Despite a revenue shortfall from U.S. production ramp timing, the margin profile improved materially on mix and execution; near-term stock drivers include calendar 4Q U.S. ramp milestones and tariff pass-through .
Policy tailwinds/visibility: OV3 and improved tariff clarity should support resumed U.S. contracting; all previously paused U.S. contracts now reactivated, reducing cancellation risk .
FY25 anchored to low end: Expect the low end of $2.6–$2.8B; full-year adjusted GM 10–12% and adjusted EBITDA $0–$20M reaffirmed; ~$0.1B revenue shifts to FY26 .
FY26 setup: ~$2.5B of backlog expected to convert in FY26 with guidance to be set at 80–90% coverage, increasing confidence versus prior years .
Commercial momentum: Post-quarter ~$1.1B bookings (incl. landmark AGL Tomago and AMPYR Wellington) bolster FY26/27 visibility, particularly in Australia .
Liquidity/capital: ~$903M liquidity at Q3-end and a new $150M unsecured facility provide working capital headroom without equity needs for FEOC compliance plans .
Tactical positioning: Watch for resumed U.S. order flow, FEOC/AESC structural announcements, and data center pilots converting to signed projects as medium-term catalysts .

Appendix: Liquidity and Share Data

Total cash (incl. restricted) ~$459.9M; total liquidity ~$903M at 6/30/25; new $150M supply chain financing executed in August .
Shares outstanding as of 6/30/25: Total Class A and Class B-1 common stock 182,359,413 .

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