FuelCell Energy lands first data centre deal amid Q3 revenue dip
FuelCell Energy (NASDAQ: FCEL) has signed its first Capacity Reservation Agreement with a major data centre operator for a planned 75 MW project in Texas, marking a commercial inflection point for the Danbury, Connecticut-based company as it pivots its sales strategy toward the surging demand for behind-the-meter power infrastructure supporting artificial intelligence workloads.
The agreement, concluded after the close of the third fiscal quarter ended 31 July 2026, carries an upfront reservation payment that secures the operator priority access to FuelCell's manufacturing slots. The deployment is designed around six modular 12.5 MW fuel cell blocks. Financial terms were not disclosed. The company also completed a capital equipment purchase agreement with Fit Energy USA LP during the quarter, covering up to 380 MW of carbonate fuel cell systems across four potential phases, with Phase 0 delivery of 30 MW expected in the fourth quarter of fiscal 2026.
Commercial momentum
Chief executive Jason Few said the combined committed and awarded capacity backlog now stands at $3.6 billion, up from $1.24 billion a year earlier, with $2.35 billion of that figure sitting in the newly created Awarded Capacity Backlog category tied to Fit Energy's options on Phases 1 through 3. Investors should note that awarded capacity is not contracted backlog and carries no payment obligation until Fit elects each subsequent phase; the company has disclosed that site identification, permitting, financing and construction activities may also remain outstanding at the time of election.
During the quarter FuelCell also signed a memorandum of understanding with Siemens under which the industrial group will design and supply electrical balance-of-plant systems for FuelCell installations, with the stated goal of lowering deployment costs and accelerating timelines for projects exceeding 100 MW. The two companies intend to develop integrated systems combining fuel cells, battery storage, microgrid controls and medium-voltage equipment. Separately, the company delivered the first two carbon capture modules to ExxonMobil's Rotterdam facility, representing the first industrial-scale demonstration of carbonate fuel cells capturing CO2 from an active industrial site while simultaneously generating power and hydrogen.
Financial results
Third quarter revenue of $33.0 million fell 29% year-on-year, principally because the prior-year quarter included a larger number of module deliveries to South Korean customers. Gross loss widened sharply to $24.5 million from $5.1 million, driven in part by $17.0 million of inventory and purchase-commitment charges arising from contractual pricing provisions embedded in the Fit Energy agreement. The company acknowledged that its per-unit costs at an annualised production rate of approximately 37 MW remain above the contractual pricing established under that deal; it expects cost absorption to improve as volumes rise toward its 100 MW annualised target, which it is aiming to hit in October 2026.
Net loss narrowed to $45.3 million from $91.9 million in the comparable period of 2025, though the prior-year figure was inflated by $64.5 million of impairment and restructuring charges. Adjusted EBITDA was negative $36.7 million, worse than the negative $16.4 million recorded a year ago. The company held $737.3 million in cash and restricted cash as of 31 July, bolstered by a $245.5 million equity offering completed in July 2026. It is now targeting positive Adjusted EBITDA in the fourth quarter of fiscal 2027.
Market context
The behind-the-meter power market for data centres has attracted significant attention from technology companies seeking to sidestep constrained electricity grids and lengthy interconnection queues. FuelCell's carbonate technology competes in this space against gas turbines, reciprocating engines and, increasingly, small modular reactor developers, all of which are positioning for long-duration baseload contracts with hyperscalers. The Siemens partnership lends engineering credibility and supply-chain depth to FuelCell's pitch for large-scale orders, though the company's ability to convert its 10 GW sales pipeline into committed backlog at profitable pricing will be the central question for investors over the next twelve months. Expansion of the Torrington, Connecticut manufacturing facility to 500 MW of annualised capacity is scheduled for completion by June 2028.