FuelCell Energy Revenue Jumps 97% in Q3

Key Points

• Revenue nearly doubled year over year, rising 97% to $46.7 million in Q3 FY2025, driven by large product shipments.

• Net loss widened significantly due to non-cash impairment and restructuring charges, but adjusted net loss per share improved to $(0.95).

• Backlog increased modestly to $1.24 billion, but underlying product and service backlogs declined, highlighting the importance of new orders.

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FuelCell Energy (NASDAQ:FCEL), a developer of clean energy fuel cell technologies for electricity, hydrogen, and carbon capture, reported its third quarter fiscal 2025 earnings on September 9, 2025. The main highlight was a sharp rise in revenue in Q3 FY2025 due to lumpy product sales, even as headline profitability deteriorated because of large asset impairment and restructuring expenses. Adjusted operating losses narrowed year over year. The quarter showcased both early benefits of cost reduction measures and the company’s ongoing struggle to generate consistent, diversified growth.

About FuelCell Energy’s Business and Focus

FuelCell Energy builds and operates large-scale fuel cell power systems for businesses, utilities, and governments. Its technology allows customers to generate electricity and hydrogen from natural gas or renewable sources with lower emissions than traditional combustion power plants. It has product families focused on carbonate fuel cells for distributed generation, as well as ongoing research into solid oxide systems for hydrogen production and carbon capture.

Recently, the company sharpened its focus on commercializing carbonate fuel cell technology, reducing spending on next-generation research, and growing its backlog in both distributed generation and data center segments. Key success factors include winning long-term service agreements, ramping production to a scale that supports profitability, securing repeat orders from partners, and maintaining healthy liquidity while investing in cost-cutting and core platform improvements.

Quarter Highlights and Financial Developments

Revenue nearly doubled year over year, reaching $46.7 million, thanks to large product shipments under a long-term agreement with Gyeonggi Green Energy, a Korean partner. Of this, product revenue (from delivering complete fuel cell modules) made up the largest share at $26.0 million, reflecting a highly concentrated revenue profile. Service agreements brought in $3.1 million—another increase, again linked to Korean activity. However, revenue from electricity generation fell 7.5% due to routine plant maintenance, and advanced technologies revenue dropped 39%, reflecting reduced government and partner funding.

Headline losses sharply widened due to non-cash write-downs and restructuring. Operating expenses rose to $90.2 million, largely because the company wrote down $64.5 million of research and development and fixed assets related to its solid oxide (hydrogen and carbon capture) platforms. Cash restructuring expenses reached $4.1 million. Net loss attributable to common stockholders increased to $(92.5) million. However, on an adjusted basis—excluding these one-off charges—net loss per share improved to $(0.95), giving some evidence of early progress from the company’s cost-cutting program. Adjusted EBITDA loss also narrowed to $(16.4) million, as reductions in administrative costs and research and development spending took effect.

Looking deeper, gross margin improved but remained negative at $(5.1) million, as losses in the advanced technology and service segments continued. Management directly credited the revenue growth to the Korean contract, stating, “Third quarter revenue of $46.7 million represents an increase of 97% from the comparable prior year quarter.”

The company’s backlog—a measure of future business under contract—ticked up by 4% to $1.24 billion overall. Generation backlog, which covers long-term electricity sales contracts, grew to $955.0 million after winning a 20-year contract for the Hartford Project in Connecticut. By contrast, product and service backlogs declined, reflecting a shortfall of new equipment and maintenance orders. Advanced technologies backlog dropped by nearly half.

FuelCell Energy issued 6.8 million new shares, raising about $38 million, and another 2.7 million shares after quarter’s end for a further $12.1 million in gross proceeds. This move supported liquidity, with unrestricted cash at $174.7 million and total cash, restricted cash, and short-term investments at $236.9 million. The share count rose to 29.6 million, indicating shareholder dilution. This liquidity helps fund operations but underscores the company’s ongoing need to balance cash burn and capital-raising against future growth.

There were no material new regulatory or government incentive disclosures during the quarter. Management reiterated its expectation of a tailwind from the continued U.S. focus on clean energy infrastructure.

Strategic and Product Context

FuelCell Energy’s main commercial product is its carbonate fuel cell platform, used for distributed power generation and on-site energy supply. It also provides advanced technology products, including solid oxide fuel cells and carbon capture systems, though it has largely reduced investment in those areas this quarter.

Over the last year, the company worked to build its position in data center power solutions, marketing modular power block products directly to U.S. customers. The Dedicated Power Partners pipeline—a set of targeted sales efforts for data center and large commercial customers—remains a significant focus, although no reported contract wins have yet materialized as revenue. Partnerships with ExxonMobil for carbon capture research and with Gyeonggi Green Energy for module delivery contributed to the company’s revenue, but the scale remains small and mostly outside the company’s core U.S. market.

Outlook and What to Watch

Management did not provide formal forward financial guidance for the remainder of FY2025. Instead, it stressed that internal cost-cutting, a renewed focus on the core carbonate platform, and investments in strengthening the company’s sales pipeline position it for future growth and potential profitability. Any positive inflection in financial results will depend on winning new large-scale contracts, particularly in the U.S. data center and distributed power segments. Until the company can reliably convert its sales pipeline into revenue, future growth remains uncertain.

Looking ahead, important areas for investors include the pace of new contract wins, replenishment of product and service backlogs, the company’s ability to curb cash burn without excessive shareholder dilution, and whether its innovation efforts—now heavily concentrated on carbonate fuel cells—will be enough to compete for future clean energy market demand. Any changes in the level or nature of U.S. or international clean energy incentives could also quickly alter the business outlook.

FCEL does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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