[Management View]
FuelCell Energy's management introduced a restructuring plan prioritizing the molten carbonate platform, reducing solid oxide R&D, and pausing broader development efforts. The Dedicated Power Partners initiative targets growth in the large-scale data center segment. The company posted increased total and service revenues, maintaining a strong liquidity position with $240 million in cash and investments. The backlog rose to $1.26 billion, supported by new long-term service agreements.

[Outlook]
Management expects a 30% reduction in annualized operating expenses compared to FY2024, aiming for positive adjusted EBITDA once the Torrington facility reaches 100 megawatts of annualized output. Near-term production will decline as output aligns with demand orders. The new Dedicated Power Partners model will use power purchase agreements as the primary customer finance structure.

[Financial Performance]
- Total Revenue: $37.4 million, up from $22.4 million YoY.
- Operating Loss: $35.8 million, narrowing from $40.4 million YoY.
- Adjusted EBITDA: Negative $19.3 million, improving from negative $26.5 million YoY.
- Net Loss Per Share: $1.79 compared to $2.18 YoY.
- Operating Expenses: $26.4 million, down from $34.3 million YoY.
- Backlog: $1.26 billion, up 18.7% from $1.06 billion YoY.
- Cash and Investments: $240 million.

[Q&A Highlights]
Question 1: I'm confident that these weren't easy actions to take with the restructuring. Maybe first question is around DPP. If you could just sort of talk a little bit about any tangible momentum you have there in procuring customers and orders.
Answer: We have a focused effort around bringing to data center customers a combination of fuel provided by diversified energy, fuel cell power generation provided by us, and financing. We have active conversations in Northern Virginia and Kentucky and feel positive about the momentum to start delivering fuel and power to data center customers.

Question 2: You mentioned EBITDA neutral would imply 100 megawatts production. Any thoughts around when we can expect that to happen?
Answer: We can achieve adjusted EBITDA positive when we get the factory in the 100 megawatt range. We have capacity of 100 megawatts in Torrington without additional capital. The timing to get there will be paced by order flow, with significant opportunities in the U.S. around distributed generation and large data centers.

Question 3: Pre-COVID, the target around EBITDA breakeven was driven by the generation portfolio size. Why is the manufacturing side now the driver of profitability?
Answer: The contribution from the generation portfolio is part of the financial model, but we see this as a product and service business. Selling product into DPP and beyond, including the Korean market, will drive profitability. The overall financial model includes contributions from generation and advanced technology.

Question 4: The price of gas turbines has tripled recently. How does this affect future bookings for data center applications?
Answer: We see the increase in gas turbine costs and timelines as an opportunity. We don't see significant changes in our pricing to customers due to demand growth in electricity. We intend to exploit this opportunity.

Question 5: Could you characterize the power generation opportunity for AI and data centers? Which customers are moving the fastest?
Answer: Our opportunity is not solely around data centers. We see a combination of opportunities, including grid resiliency and reliability projects. For data centers, we are in conversations with developers, hyperscalers, and gas distribution players. We aim to deliver projects in 20 to 50 megawatt blocks.

Question 6: How will the gas distribution side opportunities be structured? Will they be long-term PPAs or supply volume agreements?
Answer: DPP will generally offer power purchase agreements to end users, but there is optionality depending on the client. Our focus is on delivering projects as Energy as a Service with investment-grade counterparties, ensuring long-term high-quality revenues and predictable long-term service agreements.

[Sentiment Analysis]
The tone of the management was optimistic and focused on strategic restructuring and partnerships to drive future growth. Analysts' questions reflected interest in the company's restructuring efforts, profitability targets, and market opportunities.

[Quarterly Comparison]
| Key Metrics | Q2 2025 | Q2 2024 |
|----------------------------|---------------|---------------|
| Total Revenue | $37.4 million | $22.4 million |
| Operating Loss | $35.8 million | $40.4 million |
| Adjusted EBITDA | -$19.3 million| -$26.5 million|
| Net Loss Per Share | $1.79 | $2.18 |
| Operating Expenses | $26.4 million | $34.3 million |
| Backlog | $1.26 billion | $1.06 billion |
| Cash and Investments | $240 million | N/A |

[Risks and Concerns]
- Reduced annualized production rate at Torrington due to restructuring.
- Ongoing operating losses with a net loss of $38.8 million.
- Slower-than-expected investments in advanced alternative energy technology.
- Significant workforce reductions and reduced R&D spending may constrain future innovation.

[Final Takeaway]
FuelCell Energy's restructuring plan focuses on the molten carbonate platform and strategic partnerships to drive future growth. The company aims to achieve positive adjusted EBITDA by aligning production with demand and reducing operating expenses. The Dedicated Power Partners initiative targets the growing data center market, leveraging stable fuel supply and improved project economics. Despite ongoing losses, the company shows progress in revenue growth and cost reduction, positioning itself for future profitability.