FuelCell Energy Revenue Falls 5% as Groton Impairment Widens Loss
The fuel-cell maker posted a $77.9 million operating loss after booking a $42.6 million non-cash charge tied to its Groton Project upgrade.
FuelCell Energy Inc. (FCEL) reported a 5% year-over-year decline in quarterly revenue to $35.6 million, reversing a 61% surge in the prior quarter and marking a sharp deceleration for the fuel-cell manufacturer. The setback was driven by weakness across its service and generation segments, even as product sales to Korean customers continued to climb.
The company's operating loss more than doubled to $77.9 million, a 118% year-over-year increase that was largely attributable to a $42.6 million non-cash impairment expense related to the upgrade of its Groton Project. That charge overshadowed what had been a trend of narrowing losses; adjusted EBITDA, which strips out such items, improved 12% year-over-year to a loss of $17.1 million, continuing a multi-quarter pattern of improvement.
Product revenue provided a bright spot, rising 38% to $18.0 million on continued module deliveries to Korean customers. However, that gain was more than offset by declines elsewhere. Service revenue fell 49% to $4.2 million due to the absence of module exchanges, while generation revenue dropped 28% to $8.7 million as lower output from the Groton Project undergoing repairs weighed on results.
Despite the top-line pressure, FuelCell Energy pointed to a significant acceleration in commercial activity. The company's sales pipeline surged to 4 gigawatts, a 267% increase from the prior quarter. Management also introduced a new standardized 12.5 MW FuelCell Energy Block, combining ten proven 1.25 MW modules, specifically targeting data center and AI power applications. In a separate milestone, the company shipped its first two carbon capture modules to Rotterdam for its collaboration with ExxonMobil.
The company's backlog, however, continued its recent contraction, declining 9.9% year-over-year to $1.14 billion as of April 30. Product backlog was particularly weak, plummeting 63% to $36.1 million as revenue recognition on Korean deliveries outpaced new orders. This shift follows a period of backlog growth that ended in the second half of fiscal 2025.
FuelCell Energy bolstered its balance sheet through equity issuances of approximately $102.6 million during the quarter at an average price of $9.45 a share, lifting cash and equivalents to $440.9 million. The capital raise, however, more than doubled the weighted average share count to 54.2 million, diluting the net loss per share to $1.45 from $1.79 a year earlier despite a 106% increase in the net loss itself.
The company also raised its expansion target for its Torrington manufacturing facility to 500 megawatts of annualized production capacity, up from a prior goal of 350 MW, with an estimated total cost of $200 million to $275 million over 24 months. Operating expenses continued to decline, with R&D spending down 22% to $7.7 million and administrative costs down 11% to $14.7 million, reflecting restructuring actions taken over the past year.