Innio (NASDAQ:INIO) reported record third-quarter revenue exceeding $1 billion for the first time, supported by strong equipment deliveries, data center demand and operating leverage. The company raised its full-year revenue and adjusted EBITDA outlook as it continues to expand manufacturing capacity.
Total revenue rose 57% year over year to $1.2 billion in the third quarter, while year-to-date revenue increased 46% to $2.8 billion. Adjusted EBITDA increased 70% to $245 million, and the adjusted EBITDA margin expanded 1.6 percentage points to 21%, according to CFO Dennis Schulze.
“INNIO delivered a record quarter, exceeding $1 billion in quarterly revenue for the first time,” CEO Olaf Berlien said. “Our teams continued to execute with great discipline, driving growth while improving productivity across the business.”
Equipment backlog reaches $8 billion
Equipment revenue increased 86% year over year to $778 million, while services revenue grew 20% to $390 million. Data center deliveries represented 60% of equipment revenue during the quarter, Schulze said.
Equipment order intake totaled $2.2 billion in the quarter and $6.1 billion year to date, up 91% from the prior-year period. The company’s equipment backlog reached a record $8 billion at the end of September, up 142% from $3.3 billion a year earlier. Its last-12-month book-to-bill ratio was 3.3 times.
Berlien said projects were progressing as planned, with “no delays or cancellations.” He attributed order momentum to long-term demand for power solutions, particularly as artificial intelligence and data center expansion increase electricity needs.
During the quarter, Innio cited several major customer commitments:
- A 620-megawatt follow-on order from a data center developer, alongside a long-term service agreement covering the first 500 megawatts of previously ordered capacity.
- A 450-megawatt order from Liberty Energy for behind-the-meter power at large-scale North American data center projects, with delivery scheduled for 2028.
- An extension of its strategic partnership with Aggreko through 2031, including a minimum of 450 megawatts of Jenbacher engine capacity to be ordered and delivered by the end of 2027.
The company said most equipment orders are take-or-pay and include down payments and cancellation fees. Schulze said pricing in the backlog continues to improve and should support profitability as orders convert into revenue.
Data center demand drives capacity plans
Innio said it is expanding annual production capacity from 3.5 gigawatts in 2025 to more than 10 gigawatts by 2030. The company recently assembled its first Jenbacher generator at its Waukesha site, a milestone in its capacity expansion plan.
Management said it has visibility on slot reservations extending into 2029, 2030 and 2031. Schulze said the company still expects capacity to become available for 2029 and 2030 as it releases slots in stages tied to the production ramp.
Innio’s equipment business is increasingly oriented toward data centers, which accounted for 67% of equipment order intake over the last 12 months. The company said its modular gas-engine systems can be deployed quickly, follow changing AI-related loads and operate with near-zero water consumption.
Berlien said the company’s Type 6 engines use less than 0.1 liter of water per megawatt hour, compared with approximately 200 liters for the turbines referenced in its presentation. Management said water considerations and grid constraints are supporting interest in behind-the-meter power solutions.
The company also addressed customer concentration and credit considerations in its data center business. Berlien said Innio has not allocated meaningful volumes to neocloud operators. Martin Widner, vice president of global sales, said the company focuses on hyperscalers, colocation providers, Energy-as-a-Service companies, rental companies and independent power producers, and generally seeks customers with existing or visible back-to-back agreements with end users.
Services business expected to expand over time
Services adjusted EBITDA increased 37% to $124 million, while the segment’s adjusted EBITDA margin rose to 32% from 28% a year earlier. Schulze said the quarter benefited from a higher share of parts relative to labor and improved absorption of investments in service personnel and parts capacity.
Innio’s installed base totaled about 44 gigawatts at year-end 2025. The company said its existing fleet produces roughly $30,000 in annual service revenue per megawatt, while engines in backlog and reserved slots are expected to generate more than $50,000 per megawatt annually on average. Management said the higher figure reflects prime-power data center applications, greater operating hours and additional service scope.
However, Schulze said service revenue growth should normalize to the high-single-digit range over the next several years after exceeding 20% so far in 2026. He said growth is expected to accelerate in the early 2030s as newer data center installations reach more significant maintenance events.
Management said long-term service agreements generally include major overhauls and can extend for 10 to 15 years. Carl Richers, head of global services, said potential customer self-performance would typically be concentrated in labor work, while proprietary parts remain the most important and stickiest portion of Innio’s service business.
Guidance raised
Innio raised its full-year 2026 revenue outlook to between $3.9 billion and $4 billion, from prior guidance of $3.8 billion to $3.9 billion. The company now expects approximately 4.5 gigawatts of deliveries for the year, including about 1.5 gigawatts in the fourth quarter.
The company increased its adjusted EBITDA outlook by $60 million at the midpoint, forecasting $780 million to $800 million for 2026. At the midpoint, the forecast represents 44% growth from 2025 and an adjusted EBITDA margin of about 20%.
Net leverage fell to 2.1 times from 3.6 times at the end of 2025. Schulze said Innio’s priorities are investing in profitable organic growth, reducing leverage below two times over the medium term and evaluating potential value-creating acquisitions. The company does not intend to pay cash dividends in the near term as it reinvests in the business.
About Innio (NASDAQ:INIO)
INNIO is an energy technology company that provides power-generation and gas-compression solutions for industrial, commercial and utility customers. Its portfolio includes Jenbacher gas engines and Waukesha engines, along with associated equipment, digital tools and long-term service offerings.
The company’s solutions are designed for applications including combined heat and power, distributed power generation, microgrids and gas compression. INNIO supports a range of fuel sources, including natural gas, biogas and hydrogen blends, helping customers produce electricity and useful heat while supporting grid reliability and energy-system flexibility.
INNIO was established in 2018 following the acquisition of GE’s Distributed Power business by Advent International.
