FuelCell Energy, Inc. FCEL used its fiscal third-quarter 2026 earnings call to emphasize movement from a large data center pipeline toward customer commitments, while acknowledging pressure from current manufacturing economics.
President, CEO and director Jason Few and executive vice president, CFO and treasurer Michael Bishop tied progress to backlog conversion, production scaling and cost reduction, with a new adjusted EBITDA profitability target providing a clearer execution benchmark.
Fiscal third-quarter revenues were $33 million, below the Zacks Consensus Estimate of $39.1 million. The loss of 64 cents per share was wider than the Zacks Consensus Estimate of a 32-cent loss.
FCEL Converts Data Center Demand Into Commitments
FuelCell’s CEO said fiscal 2026 year-to-date proposals reached roughly 10 gigawatts, with data centers representing about 97% of the fiscal third-quarter pipeline.
The Fit Energy agreement covers up to 380 MW across four phases. Few said the initial 30 MW is committed, while the remaining 350 MW is awarded capacity backlog subject to Fit Energy elections. Bishop stressed that awarded capacity is not firm contracted backlog.
Few also highlighted a post-quarter 75 MW capacity reservation with a major colocation data center operator in Texas and said he anticipates follow-on opportunities with the same customer.
FuelCell Scales Torrington Toward 100 MW
Bishop stated FuelCell operated at an annualized production rate of about 37 MW and is targeting 100 MW in October 2026.
In Q&A, FuelCell’s CFO said the ramp includes added labor and supply-chain scaling. Bishop said FuelCell had added another factory shift and expected a meaningful production increase during the fiscal fourth quarter.
He also informed that the broader Torrington expansion targets 500 MW of annualized capacity by June 2028, with an estimated $200 million to $275 million requirement that is fully funded.
FCEL Maps a Path to Positive Adjusted EBITDA
Bishop said FuelCell now targets positive adjusted EBITDA in the fourth quarter of fiscal 2027, dependent on backlog conversion, customer schedules and manufacturing cost reductions.
A B. Riley Securities analyst asked what production level supports the target. Bishop said at least 100 MW of volume would be needed, with customer demand influencing the ultimate level.
A Canaccord Genuity analyst questioned reliance on customer decisions. Bishop pointed to the broader 10 GW pipeline and said FuelCell has a defined cost-reduction curve under execution.
FuelCell Explains Phase 0 Economics in Q&A
Fiscal third-quarter included a $24.5 million gross loss, including $17 million of charges tied to Fit Energy Phase 0 inventory and firm purchase commitments as current costs exceeded contractual pricing.
A Jefferies analyst asked about the timing of those costs and revenues. Bishop said Phase 0 revenues should begin in the fiscal fourth quarter and continue into fiscal 2027.
FCEL Broadens Partnerships Beyond Data Centers
Few said the first two carbonate fuel cell carbon capture modules were delivered to ExxonMobil's Rotterdam complex. The demonstration targets more than 90% carbon capture while producing power, thermal energy and hydrogen.
Few also discussed a memorandum of understanding with Siemens intended to support faster, lower-cost deployment of projects above 100 MW through integrated electrical balance-of-plant systems.
He said completion of the 42-module Gyeonggi Green Energy repowering program in South Korea demonstrated FuelCell's ability to execute utility-scale international repowering work.
FuelCell Keeps Execution at the Center
Few emphasized conversion and delivery rather than pipeline size alone. He identified closing transactions, disciplined manufacturing expansion and customer execution as the company's central priorities.
Bishop added measurable milestones through the October 2026 production target and the fiscal fourth-quarter 2027 adjusted EBITDA objective.
He also reiterated that awarded capacity backlog is not firm contracted backlog, keeping conversion into definitive agreements as a key operating marker as capacity expands.
FCEL Shows Mixed Zacks Signals
FCEL carries a Zacks Rank #3 (Hold). The Zacks framework reserves its strongest combinations for Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks paired with A or B Style Scores. You can see the complete list of today’s Zacks #1 Rank stocks here.
FCEL’s Growth Score of B and Momentum Score of B are favorable within their styles, while the Value Score of F and VGM Score of D weaken the combined profile. The Zacks Rank can change as earnings estimates are revised after the just-reported results.
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FuelCell Energy, Inc. (FCEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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