FuelCell Energy (NASDAQ:FCEL) reported third-quarter fiscal 2026 revenue of $33 million, down 29% from $46.7 million in the prior-year period, as fewer module deliveries to South Korea and lower generation output weighed on results. The company also highlighted new data-center-related commercial activity, including a 30-megawatt initial order under an agreement with Fit Energy and a subsequent 75-megawatt capacity reservation with a major colocation data center operator for a Texas project.
Chief Executive Officer Jason Few said growing artificial-intelligence and high-density computing demand is increasing the importance of behind-the-meter power generation for data centers. He said FuelCell Energy’s Energy Blocks are intended to provide continuous on-site power while customers await broader grid expansion.
Revenue Declines as South Korea Repowering Concludes
Generation revenue declined to $8.8 million from $12.4 million, principally due to lower output from the company’s generation portfolio. Chief Financial Officer Michael Bishop said the 7.4-megawatt Groton project was out of service throughout the quarter while awaiting a planned upgrade expected to be completed in fiscal 2027.
Service revenue was $2.4 million, compared with $3.1 million a year earlier, while advanced technology contract revenue declined to $3.8 million from $5.3 million.
The company recorded a gross loss of $24.5 million, compared with a gross loss of $5.1 million in the same quarter last year. Bishop said the result included approximately $17 million in charges associated with Phase Zero of the Fit Energy Capital Equipment Purchase Agreement. Those charges included about $4 million to reduce certain inventory to net realizable value and about $13 million related to losses on firm purchase commitments.
Bishop said current product costs and manufacturing overhead exceed the contractual pricing for the initial Fit Energy phase because the company operated at an annualized production rate of approximately 37 megawatts during the quarter. He said the charges are expected to be limited to identified Phase Zero inventory and purchase commitments.
FuelCell Energy’s operating loss narrowed to $46.7 million from $95.4 million a year earlier, largely because the prior-year period included asset impairment and restructuring charges. Net loss was $45.3 million, or 64 cents per share, compared with a net loss of $91.9 million, or $3.78 per share, in the prior-year quarter.
Fit Energy Agreement Adds to Backlog Measures
During the quarter, FuelCell Energy signed a Capital Equipment Purchase Agreement with Fit Energy covering up to 380 megawatts of power solutions for data-center applications across four phases. The agreement includes a committed initial 30-megawatt Phase Zero, for which the company received an upfront deposit. FuelCell Energy expects to begin delivering that phase in the fourth quarter of fiscal 2026 and complete the remaining deliveries in fiscal 2027.
The subsequent phases, totaling 350 megawatts, remain at Fit Energy’s election. Bishop emphasized that no payment obligation arises for those phases until Fit Energy elects to proceed.
As of July 31, FuelCell Energy reported total committed and awarded capacity backlog of $3.6 billion. Committed backlog, representing definitive non-cancellable agreements, totaled $1.3 billion, up about 4.1% year over year. Awarded capacity backlog totaled $2.4 billion and primarily reflected the Fit Energy phases that have not yet become committed orders.
Management cautioned that awarded capacity backlog is not firm contracted backlog and may not convert to revenue in whole or in part. Few said each capacity reservation is intended to include a timeline for the customer and company to reach a definitive agreement.
Following the quarter’s end, FuelCell Energy entered a 75-megawatt capacity reservation agreement with an unnamed major colocation data center operator for a Texas project. Few said the company is working toward definitive agreements and expects potential follow-on opportunities with the same customer, but did not provide a delivery timetable.
Manufacturing Expansion and Liquidity
FuelCell Energy is expanding its Torrington, Connecticut, manufacturing facility. The company aims to raise its annualized production rate to 100 megawatts in October 2026 from approximately 37 megawatts during the third quarter, while targeting 500 megawatts of annualized capacity by June 2028.
Bishop said the expansion is fully funded and is expected to require $200 million to $275 million. During the quarter, the company finalized its factory design, made equipment-purchase commitments and started installing a high-volume tape caster. FuelCell Energy reduced its fiscal 2026 capital-expenditure outlook to $10 million to $20 million from $20 million to $30 million, citing the timing of equipment deliveries rather than a change in the expansion plan.
The company ended the quarter with $737.3 million in cash, cash equivalents and restricted cash, including $658.1 million of unrestricted cash. It raised approximately $298 million in net proceeds from common-stock sales during the quarter, including $245.5 million from a July underwritten offering and $52.9 million through its open-market sale agreement.
Looking ahead, FuelCell Energy is targeting positive adjusted EBITDA in the fourth quarter of fiscal 2027. Bishop said reaching that objective will depend on converting awarded capacity into definitive contracts, matching production with customer delivery schedules and reducing manufacturing costs as production volume increases.
Technology Partnerships Continue
FuelCell Energy also said it delivered and installed its first two carbonate fuel-cell carbon-capture modules at ExxonMobil’s Rotterdam complex in the Netherlands. Few described the installation as an industrial-scale demonstration designed to capture carbon dioxide from low-concentration industrial emissions while producing power, thermal energy and hydrogen.
In addition, the company signed a memorandum of understanding with Siemens to design and supply electrical balance-of-plant systems for fuel-cell installations. FuelCell Energy said the collaboration is intended to support projects exceeding 100 megawatts and could combine fuel cells with battery storage, microgrid controls and medium-voltage electrical equipment.
About FuelCell Energy (NASDAQ:FCEL)
FuelCell Energy, Inc (NASDAQ: FCEL) is a publicly traded company that designs, manufactures and operates turnkey molten carbonate fuel cell power plants. These stationary, on-site energy solutions generate electricity and heat through an electrochemical process that combines natural gas or biogas with oxygen, producing power with lower greenhouse gas emissions than traditional fossil fuel-based generation. The company’s fuel cell technology is engineered for continuous, baseload operation and can be integrated into microgrid architectures and industrial power systems to provide reliable, around-the-clock energy.
The company’s core product suite, marketed under the SureSource brand, encompasses both power generation and integrated carbon capture or hydrogen production capabilities.
