FuelCell Energy Inc. (NASDAQ:FCEL) shares traded higher Friday morning after the company announced in a press release mixed results for the second quarter of fiscal 2025.
Revenue grew 67% year over year to $37.41 million, beating the consensus estimate of $32.41 million.
Product revenue rose to $13 million from zero a year ago, reflecting increased sales activity. Service revenue jumped to $8.1 million, driven by module replacements under a United Illuminating contract.
Generation revenue declined to $12.1 million from $14.1 million due to maintenance downtime, while Advanced Technologies revenue fell to $4.1 million from $6.9 million, impacted by lower contributions from Exxon Mobil-related and government contracts.
Gross loss widened to $9.4 million from $7.1 million a year ago, primarily due to lower margins on tech and service contracts. The impact was partially offset by reduced costs related to the Toyota Project.
Net loss per share narrowed to $1.79 from $2.18, benefiting from a higher share count and income from non-controlling interest. The result missed the consensus loss estimate of $1.43.
Operating expenses fell to $26.4 million from $34.3 million, driven by reductions in R&D spending and compensation expenses.
As of April 30, 2025, the company held $240 million in cash, restricted cash and short-term investments, down from $318 million on Oct. 31, 2024. This included $116.1 million in unrestricted cash, $60.9 million in short-term investments and $63.1 million in restricted cash.
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The company raised $7.7 million in net proceeds during the quarter by selling approximately 1.6 million shares at an average price of $5.00 each.
Backlog grew 18.7% year over year to $1.26 billion, driven by a long-term service agreement with Gyeonggi Green Energy and a 20-year, 7.4 MW power purchase agreement in Hartford, Connecticut.
FuelCell Energy announced a new global restructuring plan on June 5, cutting its workforce by 22% and reducing global headcount to about 426 employees. The move follows a November 2024 plan that aimed to cut costs by 15% and included a 13% staff reduction.
The latest restructuring focuses on lowering overhead, deferring certain compensation, pausing most solid oxide development, and aligning production at the Torrington, Connecticut, facility with contracted demand. As of April 30, 2025, the plant was operating at an annualized rate of 31 MW, with near-term output expected to decline under the new plan. The company targets positive adjusted EBITDA once the facility scales to 100 MW annually.
“Today we are reiterating our focused strategy that prioritizes advancement of our carbonate platform with the goal of meeting accelerating market demand driven by AI data centers, our distributed power generation solutions, and our carbon recovery and utilization applications,” said President and CEO Jason Few.
Few added that the restructuring will streamline operations in the U.S., Canada, and Germany, sharpen focus on core technologies, and improve profitability. He cited increased policy support for natural gas as a catalyst for broader adoption of FuelCell’s carbonate platform, which already operates using natural gas and biofuels.
“We believe these actions — cutting our workforce, reducing SG&A and focusing on commercially available technology — will help shorten our path to profitability while preserving long-term innovation in electrolysis and carbon capture,” Few said.
“Our priorities remain clear: reduce discretionary spending, decrease cash burn, and accelerate our trajectory toward sustained, positive adjusted EBITDA,” said Michael Bishop, executive vice president, CFO and treasurer. “In parallel, we are actively pursuing strategic financing to support commercial execution, including our Korea repowering project, where we successfully delivered four modules this quarter.”
FCEL Price Action: FuelCell Energy shares are trading higher by 30.58% at $6.74 on Friday at publication.
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Photo: Courtesy FuelCell Energy