FuelCell Energy reports Q2 FY26 results, expands pipeline to 4 GW
FuelCell Energy reported a Q2 FY26 net loss of $78.7 million on revenue of $35.6 million, missing analyst expectations. The company recorded a $42.6 million non-cash impairment charge for the Groton project but improved its adjusted EBITDA. The backlog totaled $1.14 billion, while the sales pipeline grew 267% quarter-over-quarter to 4 GW, with data centers representing 89% of the opportunity.
*this image is generated using AI for illustrative purposes only.
FuelCell Energy reported a net loss of $78.7 million for the second quarter of fiscal 2026, or $1.45 per share, compared to a net loss of $38.8 million, or $1.79 per share, in the prior year. Total revenues for the quarter were $35.6 million, a 5% decrease from the prior year, primarily due to lower service revenue and generation output. Despite the loss, the company maintains a strong balance sheet with $440.9 million in cash, cash equivalents, and restricted cash and a backlog totaling $1.14 billion as of April 30, 2026.
Financial Performance
The decline in revenue was attributed to the absence of module exchanges and reduced generation output, largely because the Groton project was undergoing repairs. These factors were partially offset by higher product revenues from scheduled module deliveries to Gungy Green Energy in South Korea. Operating expenses increased to $77.9 million, up from $35.8 million in the same quarter last year, primarily due to a $42.6 million non-cash impairment charge for the Groton project. Chief Financial Officer Michael Bishop stated the charge reflects the decision to upgrade the 7.4-megawatt Groton Navy project with current-generation 2.5-megawatt power blocks to improve reliability.
| Metric | Q2 FY2026 | Q2 FY2025 |
|---|---|---|
| Total Revenues | $35.6 million | $37.4 million |
| Net Loss | $78.7 million | $38.8 million |
| Loss from Operations | $77.9 million | $35.8 million |
| Adjusted EBITDA | -$17.1 million | -$19.3 million |
On a non-GAAP basis, adjusted EBITDA was negative $17.1 million, an improvement from negative $19.3 million in the prior year quarter. Adjusted net loss was 53 cents per share, missing analyst estimates of a 52-cent loss.
Segment Performance
Product revenue rose to $18 million from $13 million, while Advanced Technologies revenue increased to $4.7 million from $4.1 million. Conversely, service revenue fell to $4.2 million from $8.1 million, and generation revenue decreased to $8.7 million from $12.1 million. Gross loss widened to $12.9 million from $9.4 million.
Strategic Expansion and Pipeline
FuelCell Energy is expanding its manufacturing capacity at its Torrington facility from 350 MW to 500 MW annually to address accelerating demand, particularly from data centers and AI infrastructure. The overall cost for this expansion is projected to be between $200 million and $275 million, with completion expected within 24 months. The company's proposal pipeline has expanded to 4 GW, up 267% from the first quarter, with data centers and hyperscalers accounting for approximately 89% of the pipeline.
To support this growth, the company introduced a new 12.5 MW fuel cell energy block product designed for scalable, modular deployment in grid-constrained markets. The average proposal size has grown from 65 MW to 130 MW in a single quarter. FuelCell Energy continues to advance strategic partnerships, including the shipment of its first two carbon capture modules to Rotterdam, Netherlands, as part of its collaboration with ExxonMobil Technology and Engineering Co., the central research arm of Exxon Mobil Corporation.
How will the company fund the $200 million to $275 million manufacturing expansion given the current net losses?
What is the expected timeline for the Groton project upgrade to return to full generation capacity?
When are the new 12.5 MW energy blocks expected to be commercially available for data center clients?
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