0001104659-26-071183
SEC filingQ2 revenue declined 5% YoY to $35.6M, driven by lower generation and service revenue; gross loss widened to 36.3% due to impairment and mark-to-market losses.
For the three months ended April 30, 2026, total revenue decreased 5% year-over-year to $35.6 million, with the decline primarily driven by lower Generation and Service agreements revenue. Generation revenue fell 28% to $8.7 million due to reduced plant output and $1.6 million in liquidated damages, mainly from the non-operating Groton Project. Service revenue dropped 49% to $4.2 million as no module exchanges occurred versus three in the prior year. Product revenue increased 38% to $18.0 million on higher module deliveries to GGE, and Advanced Technologies revenue rose 15% to $4.7 million. Gross loss widened to $12.9 million (negative 36.3% margin) from $9.4 million (negative 25.2%) due to a $42.6 million impairment charge on Groton Project assets, partially offset by improved product and service margins. Operating loss jumped to $77.9 million from $35.8 million, with the impairment being the primary driver. Net loss attributable to common stockholders was $78.7 million ($1.45 per share) compared to $38.8 million ($1.79 per share) in the prior year; EPS improved due to higher share count from equity issuances.
Product revenue growth was driven by commissioning of six fuel cell modules for the GGE Platform, but gross margin remained negative at (12.6)% due to $3.1 million in manufacturing variances. Service revenue declined sharply but gross margin turned positive to 16.4% as costs fell faster than revenue. Generation gross margin worsened to (154.1)% due to $1.6 million liquidated damages and $4.8 million mark-to-market losses on natural gas hedges. Advanced Technologies continued its strong profitability with 42.9% margin, supported by the ExxonMobil and Esso contracts. Administrative and selling expenses decreased to $14.7 million from $16.5 million due to cost reductions from restructuring. R&D expenses declined to $7.7 million from $9.9 million, reflecting reduced spending on solid oxide commercialization.
Management highlighted several strategic initiatives: a manufacturing capacity expansion at Torrington to 500 MW annually with $200-275 million investment over 24 months, and a ramp to at least 100 MW annualized production by October 2026. Two new projects (Hartford 7.4 MW and UConn 1.125 MW) are expected to commence operations in calendar 2027. The Groton Project upgrade, costing an estimated $20-30 million, is expected to be completed in fiscal 2027. Unrestricted cash stood at $373.2 million, and management believes current liquidity is sufficient for at least the next 12 months. Backlog of $1.14 billion provides visibility, with weighted average term of ~15 years for service and generation portions. The company continues to depend on external financing for project construction and manufacturing expansion, and expects to use equity and debt markets as needed. No explicit quantitative revenue or earnings guidance was provided, but the ramp in production and backlog suggests potential revenue growth in the coming quarters.
As of April 30, 2026, unrestricted cash and cash equivalents totaled $373.2 million, up from $278.1 million at October 31, 2025, primarily driven by $155.3 million net proceeds from at-the-market equity sales. Total restricted cash stood at $67.7 million. Total debt (including finance obligations) was $134.2 million, with $17.4 million current. Stockholders' equity was $719.4 million, and total equity including noncontrolling interests was $728.5 million. Inventory was $88.4 million (current), with no long-term inventory remaining. The company recorded a $42.6 million impairment on the Groton project assets due to performance issues and planned upgrades.
Purchase commitments for materials, supplies, and services were $77.0 million as of April 30, 2026. Remaining performance obligations totaled $566.7 million, comprising $155.4 million for service agreements (3–15 years), $370.3 million for generation PPAs (19–20 years), $36.1 million for product purchase agreements (within 2 years), and $4.9 million for Advanced Technologies contracts (within 2 years). Deferred revenue was $14.7 million. The company also has operating lease obligations of $23.97 million undiscounted ($12.8 million discounted), with a weighted-average remaining term of 17 years.
No share buybacks were reported. Series B preferred dividends of $0.8 million per quarter ($1.6 million for six months) were paid. Net debt increased by $14.6 million, with $25.0 million drawn from the new 2025 EXIM Financing (fixed 5.29% interest, 7-year term) and $9.6 million in repayments. Capital expenditures (including project asset expenditures) totaled $8.7 million, or 13.2% of sales. The company has $54.5 million remaining capacity under the Sales Agreement for future equity issuance (subsequently reduced by $52.9 million net proceeds after quarter end).
The company operates as a single reportable segment: fuel cell power plant production and research. For the six months ended April 30, 2026, total revenues were $66.1 million, with a net loss attributable to FuelCell Energy, Inc. of $100.8 million. Geographic revenue split: United States $29.9 million (45%), South Korea $35.9 million (54%), Europe $0.2 million, Canada $0.1 million. Long-lived assets outside the U.S. were not significant.