Disciplined Execution, Drive Positive Net Income and EBITDA Growth
LOS ANGELES--(BUSINESS WIRE)--February 12, 2026--
Capstone Green Energy Holdings, Inc. (the "Company" or "Capstone"), together with its subsidiaries (OTCQX: CGEH), a leading provider of behind-the-meter clean microturbine energy solutions for industrial and commercial operations, with solutions designed for emerging datacenter applications, today reported its financial results for the third quarter of fiscal year 2026, ended December 31, 2025. The quarter was highlighted by a 33% increase in revenue, a 14-point expansion in gross margin, and the Company's second consecutive quarter of positive net income, demonstrating the operating leverage created by Capstone's Three Pillar strategy.
Revenue Performance
Revenue for the third quarter was $26.8 million, an increase of $6.7 million, or 33% over prior fiscal year third quarter of $20.1 million. Year-to-date revenue totaled $83.0 million, up from $58.5 million for the same period prior fiscal year, representing an increase of $24.5 million or 42% increase. These improvements were primarily driven by stronger demand in the Company's Microturbine Products category, higher rental utilization rates within its Energy-as-a-Service (EaaS) business, along with growth in parts sales and the Company's long-term service agreement base.
Profitability Performance
The Company's return to profitability was driven by continued operational discipline, a favorable product mix, and the impact of cost-reduction initiatives implemented throughout fiscal 2026.
-- Gross profit for the quarter was $10.4 million, an increase of $5.4
million compared to $5.0 million in the third quarter of fiscal 2025.
-- Gross margin expanded to 39%, up 14 percentage points from 25% in the
prior year period.
-- The increase in gross profit was driven by a combination of more
favorable product mix, direct material cost improvements, and margin lift
associated with the acquisition of the Cal Microturbine distributor
territory.
-- The Design for Manufacturing and Assembly (DFMA) cost-out initiatives
continue to deliver exceptional results, which helped mitigate the impact
of new tariffs on imports.
-- The Company reported net income of $1.2 million for the third quarter
of fiscal 2026, compared to a net loss of $2.7 million in the third
quarter of fiscal 2025.
-- The continued expansion of gross profit, along with mindful investments
and spending in OPEX, are delivering Capstone's second quarter in a row
of positive net income.
-- Year-to-date net income totaled $1.3 million compared to a net loss of
$7.1 million for the same period in the prior fiscal year.
Earnings Performance
The Company delivered strong year-over-year earnings improvement in the third quarter of fiscal 2026, reflecting higher profitability, disciplined cost management, and continued operational excellence.
-- Earnings per share (EPS) from operations was $0.06, an improvement of
$0.20 per share compared to a loss of $0.14 per share in the third
quarter of fiscal 2025.
-- After reflecting the accretion of preferred units required under the
Hypothetical Liquidation Book Value (HLBV) accounting method, reported
EPS was a loss of $1.79 per share for the third quarter of fiscal 2026.
-- Adjusted EBITDA increased to $5.1 million, compared to $0.5 million in
the prior year period. The improvement was driven primarily by a $3.9
million increase in net income, partially offset by $0.8 million in
additional financing expenses. Adjusted EBITDA is a non-GAAP financial
measure. See the discussion below under the heading "Non-GAAP Financial
Measures" for additional information.
-- Total cash, including restricted cash, was $15.2 million as of December
31, 2025, an increase of $7.5 million from September 30, 2025. The
increase was primarily due to $3.8 million in proceeds from the sale of
common stock and warrants net of the required debt payment made during
this quarter.
-- The Company remained in compliance with all financial covenants during
the period.
Year-to-Date Fiscal 2026 Highlights
The Company delivered strong year-to-date financial performance through the third quarter of fiscal 2026, driven by higher gross profit, improved operating leverage, and continued execution of cost-out initiatives to--date financial performance.
-- Gross profit year-to-date was $27.0 million, an increase of $11.2
million compared to $15.8 million in the prior year period.
-- Gross margin improved to 32%, up 5 percentage points from 27% in the
prior year.
-- Growth in gross profit reflected stronger profitability across all
revenue streams, driven by price realizations and sustainable operating
excellence. These improvements were supported by ongoing Design for
Manufacturing and Assembly (DFMA) cost--out initiatives and root-cause
analysis processes executed throughout the fiscal year.
-- The Company reported net income of $1.3 million, compared to a net loss
of $7.1 million in the prior year period. The improvement was primarily
driven by the $11.2 million increase in gross profit and a $1.9 million
reduction in non-recurring professional expenses, and includes the impact
of continued investments in people and technology to support long-term
growth.
-- Adjusted EBITDA totaled $12.3 million, compared to $5.1 million in the
prior year period. The $7.2 million improvement was driven primarily by
an $8.4 million increase in net income, that contained fewer
non-recurring professional expenses added back in Adjusted EBITDA, which
continue to diminish as the Company normalizes its cost structure.
Adjusted EBITDA is a non-GAAP financial measure. See the discussion below
under the heading "Non-GAAP Financial Measures" for additional
information.
-- Net cash provided by operating activities was $2.0 million for the nine
months ended December 31, 2025, compared to $2.2 million provided in the
prior year period. The $0.2 million decrease, despite higher Net income
of $8.4 million, was driven mainly by $8.6 million higher spend on
inventory and prepaid assets, realizing $4.6 million in deferred revenue
and increased accounts payable of $5.4 million as we continue to prepare
for the future operational demands.
-- Net cash provided by investment activities was $0.6 million, compared
to $0.8 million used in the prior year period. The $1.4 million
improvement was primarily due to $1.4 million of cash acquired in
connection with the acquisition of Cal Microturbine.
-- Net cash provided by financing activities was $3.9 million, compared to
$0.2 million used in the prior year period, primarily due to proceeds
from the sale of common stock for $13.6 million offset by an $8.3 million
repayment of an outstanding term note.
-- EPS from operations was $0.07 per share, an improvement of $0.44 per
share compared to a loss of $0.37 per share in the prior year period.
After reflecting the accretion of preferred units required under the
Hypothetical Liquidation at Book Value (HLBV) accounting method, reported
EPS was a loss of $2.79 per share.
Management Commentary
"Our third quarter results reflect strong execution across our Three Pillar strategy, translating revenue growth into meaningful margin expansion and, most importantly, our second consecutive quarter of positive net income," said Vince Canino, President and Chief Executive Officer of Capstone Green Energy. "The disciplines embedded in our Financial Health Pillar are taking hold, supported by the systems, tools and processes we are implementing under our Sustainable Excellence Pillar. We are also seeing the benefits of a smooth transition following our Cal Microturbine acquisition, which is further strengthening our bottom line."
The continued adoption of distributed generation underscores the value of our fuel-flexible, high-efficiency, and clean ultra-low-emissions energy technology. By leveraging the benefits of an improved product mix, high EaaS utilization, expanding service agreement base and strong manufacturing and operational discipline, we believe we are translating these advantages into stronger margins, higher recurring revenue streams, and sustainable profitability.
"For the seventh consecutive quarter, we delivered significant improvement in gross profit, net income, and Adjusted EBITDA, driven by favorable product mix, improved cost structure, and disciplined expense management," said John Miller, Interim Chief Financial Officer of Capstone Green Energy. "While working capital requirements increased alongside higher sales activity, our financial position remains solid, and we continue to meet all covenant requirements. We are focused on sustaining margin expansion, optimizing cash flow, and maintaining financial flexibility as we support ongoing growth across our core markets."
Earnings Conference Call and Webcast Details
Capstone will host its third quarter fiscal year 2026 financial results conference call and webcast today, Thursday, February 12, 2026, at 1:45 p.m. Pacific Time / 4:45 p.m. Eastern Time.
Participant Dial-In (Listen-Only):
-- Domestic: (800) 715-9871 -- International: (646) 307-1963 -- Conference ID: 3681980
Webcast Access:
The live webcast will be available in the Investor Relations section of the Company's website or directly at: CGEH Q3FY2026 Earnings Webcast
Following prepared remarks, management will conduct a question-and-answer session for analysts and address select questions submitted by webcast participants. A replay of the webcast will be archived on the Company's website for at least 90 days.
About Capstone Green Energy
For nearly four decades, Capstone Green Energy has been a leader in behind-the-meter microturbine technology, pioneering the use of microturbines in distributed power solutions that deliver reliable, continuous energy for mission-critical operations. In collaboration with our global network of dedicated distributors, we have shipped over 10,600 units to 88 countries, helping customers with high-efficiency, on-site energy systems and microgrid solutions that deliver uninterrupted power and operational resilience.
Our commitment to a cleaner, more resilient energy future remains steadfast. Today, we offer a comprehensive range of microturbine products, from 65kW systems to multi-megawatt solutions, tailored to meet the specific needs of commercial, industrial, and utility-scale customers, with advanced technology designed for emerging datacenter and AI infrastructure applications. In addition to our core microturbine technology, Capstone's growing portfolio includes flexible Energy-as-a-Service (EaaS) offerings, such as build-own & transfer models, PPAs, lease-to-own, and rental solutions, which are designed to deliver maximum value, energy security, and operational flexibility.
Capstone's fast, turnkey power rental solutions provide flexible capacity for mission-critical applications, ideal for customers with limited capital budgets, short-term energy needs, or project-specific requirements. For more information, please contact us at rentals@CGRNenergy.com.
Capstone has forged strategic partnerships to expand our technological capabilities and market reach. Through these collaborations, we offer advanced technologies that leverage renewable gas and heat recovery solutions--further enhancing the efficiency, reliability, and operational flexibility of our clients' operations. These integrated offerings reflect our commitment to delivering resilient energy solutions for the evolving power infrastructure landscape.
For more information about the Company, please visit www.CapstoneGreenEnergy.com. Follow Capstone Green Energy on Twitter, LinkedIn, Instagram, Facebook, and YouTube.
Cautionary Notes
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements related to future profitability and the growth of the business. The Company has tried to identify these forward-looking statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "will," "plan," "goal" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the Company's liquidity position and ability to access capital, including the Company's ability to repay outstanding indebtedness maturing in December 2025; the Company's ability to continue as a going concern; the Company's ability to successfully remediate the material weakness in internal control over financial reporting; the Company's ability to realize the anticipated benefits of its financial restructuring; the Company's ability to comply with the restrictions imposed by covenants contained in the exit financing and the new subsidiary limited liability company agreement; the uncertainty associated with the imposition of tariffs and trade barriers and changes in trade policies; employee attrition (including the recent departure of the Chief Financial Officer) and the Company's ability to retain senior management and other key personnel; the Company's ability to develop new products and enhance existing products; product quality issues, including the adequacy of reserves therefor and warranty cost exposure; intense competition; financial performance of the oil, natural gas and AI industries and other general business, industry and economic conditions; including the impacts of any changes in tariff policies and the impact of litigation and regulatory proceedings. For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Annual Report on Form 10-K and quarterly report on Form 10-Q. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances, future events, or for any other reason.
Non-GAAP Financial Measures
EBITDA and adjusted EBITDA are non-GAAP financial measures that remove the impact of certain non-cash and non-recurring costs. Management believes that the use of such non-GAAP financial measures provides investors with additional useful information with respect to the impact of various adjustments, which we view as a better measure of our operating performance. Refer to the attached table for the reconciliation of such non-GAAP financial measures to the most comparable GAAP financial measure.
Financial Tables to Follow
CAPSTONE GREEN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
December 31, March 31,
2025 2025
------------- ---------
Assets
Current Assets:
Cash $ 14,437 $ 8,671
Restricted cash 716 --
Accounts receivable, net of
allowances of $1,363 at December 31,
2025 and $607 at March 31, 2025 11,423 7,037
Inventories 18,282 16,615
Lease receivable, current 125 113
Prepaid expenses and other current
assets 5,213 3,653
--------- --------
Total current assets 50,196 36,089
Property, plant, equipment and rental
assets, net 17,859 19,362
Intangible assets 3,636 --
Finance lease right-of-use assets 4,969 3,787
Operating lease right-of-use assets 4,386 8,282
Non-current portion of inventories 2,922 3,464
Lease receivable, non-current 1,085 1,175
Other assets 2,624 2,705
--------- --------
Total assets $ 87,677 $ 74,864
========= ========
Liabilities, Temporary Equity and
Stockholders' Deficit
Current Liabilities:
Accounts payable $ 17,715 $ 14,092
Accrued expenses 3,237 1,447
Accrued salaries and wages 2,209 2,838
Accrued warranty reserve 1,139 1,070
Deferred revenue, current 13,775 13,351
Deferred acquisition costs, current 1,678 --
Finance lease liability, current 1,661 2,017
Operating lease liability, current 1,408 3,539
Factory protection plan liability 4,931 6,256
Exit notes, net of discount, current 25,304 7,968
--------- --------
Total current liabilities 73,057 52,578
Deferred revenue, non-current 729 598
Deferred acquisition costs, non-current 1,881 --
Finance lease liability, non-current 1,279 248
Operating lease liability, non-current 3,144 4,988
Exit notes, net of discount, non-current -- 24,213
--------- --------
Total liabilities 80,090 82,625
--------- --------
Commitments and contingencies
Temporary equity:
---------- -----------
Redeemable noncontrolling interests 70,866 13,859
--------- --------
Stockholders' deficit:
Preferred stock, $.001 par value;
1,000,000 shares authorized, and
none issued -- --
Common stock, $.001 par value;
100,000,000 shares authorized,
22,926,208 shares issued and
outstanding at December 31, 2025
and 18,643,587 shares issued and
outstanding at March 31, 2025 23 18
Non-voting common stock, $.001 par
value; 600,000 shares authorized,
508,475 shares issued and
outstanding at December 31, 2025
and March 31, 2025 1 1
Additional paid-in capital 912,592 955,407
Accumulated deficit (975,679) (977,000)
Treasury stock, at cost; 215,338
shares at December 31, 2025 and
57,202 shares at March 31, 2025 (216) (46)
--------- --------
Total stockholders' deficit (63,279) (21,620)
--------- --------
Total liabilities, temporary equity
and stockholders' deficit $ 87,677 $ 74,864
========= ========
CAPSTONE GREEN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ --------------------
2025 2024 2025 2024
------- ------- ------- -------
Revenue, net:
Product and
accessories $13,573 $ 8,272 $45,405 $24,965
Parts and
services 9,327 7,405 25,126 23,166
Rentals 3,862 4,471 12,487 10,382
------ ------ ------ ------
Total revenue, net 26,762 20,148 83,018 58,513
------ ------ ------ ------
Cost of goods
sold:
Product and
accessories 12,714 9,073 41,394 25,622
Parts and
services 1,155 3,929 8,115 10,127
Rentals 2,465 2,152 6,555 6,974
------ ------ ------ ------
Total cost of goods
sold 16,334 15,154 56,064 42,723
------ ------ ------ ------
Gross profit 10,428 4,994 26,954 15,790
------ ------ ------ ------
Operating
expenses:
Research and
development 971 744 2,594 1,882
Selling, general
and
administrative 7,409 6,313 21,125 19,496
------ ------ ------ ------
Total operating
expenses 8,380 7,057 23,719 21,378
------ ------ ------ ------
Income (loss) from
operations 2,048 (2,063) 3,235 (5,588)
Other income, net 208 364 1,185 1,577
Interest income 70 4 177 6
Interest expense (1,136) (986) (3,262) (3,003)
------ ------ ------ ------
Income (loss)
before provision
for income taxes 1,190 (2,681) 1,335 (7,008)
Provision for
income taxes 5 23 14 56
------ ------ ------ ------
Net income (loss) 1,185 (2,704) 1,321 (7,064)
====== ====== ====== ======
Net Income (loss)
per share of
common stock and
non-voting common
stock--basic and
dilutive $ (1.79) $ (0.14) $ (2.79) $ (0.37)
====== ====== ====== ======
Weighted average
shares used to
calculate basic
net loss per share
of common stock
and non-voting
common stock 21,051 19,049 19,945 19,049
====== ====== ====== ======
Three Months Ended Nine Months Ended
December 31, December 31,
------------------- ---------------------
2025 2024 2025 2024
-------- ------- -------- -------
Numerator:
Consolidated net
income (loss) $ 1,185 $(2,704) $ 1,321 $(7,064)
Less: Accretion
to redemption
value of
Preferred Units (38,824) -- (57,007) --
------- ------ ------- ------
Net loss
available to
holders of
common stock
and
non-voting
common stock $(37,639) $(2,704) $(55,686) $(7,064)
Denominator:
Weighted average
shares
outstanding of
common stock and
non-voting
common stock 21,051 19,049 19,945 19,049
------- ------ ------- ------
Net Income
(loss) per
share of
common stock
and
non-voting
common
stock--basic
and dilutive $ (1.79) $ (0.14) $ (2.79) $ (0.37)
======= ====== ======= ======
CAPSTONE GREEN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended December 31,
--------------------------------------
2025 2024
---------------- ----------------
Cash Flows from Operating
Activities:
Net income (loss) $ 1,321 $ (7,064)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 3,152 3,023
Amortization of financing
costs and discounts 89 71
Paid-in-kind interest expense 1,365 2,714
Interest related to deferred
acquisition costs 132 --
Non-cash lease expense 2,188 2,957
Provision for credit loss
expense 399 621
Inventory write-down 581 639
Provision (benefit) for
warranty expenses 145 (203)
Stock-based compensation 590 168
Changes in operating assets
and liabilities:
Accounts receivable (6,659) (6,066)
Inventories (946) 4,279
Lease receivable 443 --
Prepaid expenses, other
current assets and other
assets (1,528) 1,887
Accounts payable 4,878 (552)
Accrued expenses 1,243 (54)
Operating lease liability,
net (2,266) (2,988)
Accrued salaries and wages
and long-term liabilities (1,239) (166)
Accrued warranty reserve (76) (154)
Deferred revenue (513) 4,083
Factory protection plan
liability (1,324) (961)
------------ ------------
Net cash provided by operating
activities 1,975 2,234
------------ ------------
Cash Flows from Investing
Activities:
Total business combination
consideration, net of cash
acquired 1,410 --
Expenditures for property,
plant, equipment and rental
assets (773) (841)
------------ ------------
Net cash provided by (used) in
investing activities 637 (841)
------------ ------------
Cash Flows from Financing
Activities:
Acquisition of treasury stock (210) --
Proceeds from the PIPE, net 13,592 --
Repayment of Exit Note (Note 8) (8,331) --
Repayment of finance lease
obligations (1,181) (164)
------------ ------------
Net cash provided by (used in)
financing activities 3,870 (164)
------------ ------------
Net increase in Cash 6,482 1,229
Cash, Beginning of Period 8,671 2,085
------------ ------------
Cash and restricted cash, End
of Period $ 15,153 $ 3,314
------------ ------------
Cash paid during the period for:
Interest $ 1,838 $ 97
Income taxes $ 119 $ 100
Supplemental Disclosures of
Non-Cash Information:
Right-of-use assets obtained
in exchange for operating
lease obligations $ 1,419 $ --
Right-of-use assets obtained
in exchange for finance
lease obligations $ 1,720 $ --
Rental assets transferred to
inventory $ -- $ 3,067
Acquisition of treasury stock
with accrued liabilities $ 46 $ --
Settlement of lease
liabilities through accounts
receivable $ 979 $ 572
Operating lease modified to
finance lease $ 614 $ --
Accounts payable negotiated
in lease modification $ 1,289 $ --
CAPSTONE GREEN ENERGY HOLDINGS, INC. AND SUBSIDIARIES
PRESENTATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
--------------------------------------------------------------------
Three Months Ended Nine Months Ended December
December 31, 31,
----------------------- --------------------------
2025 2024 2025 2024
------- ---------- ---------- ------
Net Income
(Loss) $ 1,185 $ (2,704) $ 1,321 $ (7,064)
Interest
expense 1,136 986 3,262 3,003
Provision for
income taxes 5 23 14 56
Depreciation 977 947 2,903 3,023
Amortization 219 -- 249 --
------ ------ ------ ------
EBITDA $ 3,522 $ (748) $ 7,749 $ (982)
Stock-based
compensation 130 59 590 168
Restructuring
expense 73 479 333 1,609
Financing
expense 990 12 1,487 59
Shareholder
litigation -- 316 -- 1,023
Extraordinary
legal costs 23 221 20 689
Restatement &
SEC
investigation
costs -- 189 333 2,530
Merger and
acquisition
expense 375 -- 1,829 --
------ ------ ------ ------
Adjusted
EBITDA $ 5,113 $ 528 $ 12,341 $ 5,096
====== ====== ====== ======
To supplement the Company's unaudited financial data presented on a generally accepted accounting principles (GAAP) basis, management has presented Adjusted EBITDA, a non-GAAP financial measure. This non-GAAP financial measure is among the indicators management uses as a basis for evaluating the Company's financial performance as well as for forecasting future periods. Management establishes performance targets, annual budgets and makes operating decisions based in part upon this metric. Accordingly, disclosure of this non-GAAP financial measure provides investors with the same information that management uses to understand the company's economic performance year-over-year.
EBITDA is defined as net income (loss) before interest, provision for income taxes and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA before stock-based compensation, restructuring, financing, shareholder litigation, non-recurring legal, restatement and SEC investigation expenses, and reorganization items. Restructuring expenses relate to the Chapter 11 bankruptcy filing and financing expenses related to the evaluation and negotiation of the Company's senior indebtedness. Shareholder litigation expense resulting from the restatement of the Company's financials and non-recurring legal expenses are one-time non-recurring legal fees. Restatement expenses are professional fees related to the restatement of the Company's prior year financials. SEC investigation expenses relate to the costs arising from the restatement of the Company's financials. Reorganization items represent adjustments occurring during the bankruptcy period. Merger and acquisition expense relates to expenses incurred for the acquisition of Cal Microturbine.
Adjusted EBITDA is not a measure of the Company's liquidity or financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of its liquidity.
While management believes that the Company's presentation of Adjusted EBITDA provides useful supplemental information to investors, there are limitations associated with the use of this non-GAAP financial measure. Adjusted EBITDA is not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the methods of calculation. The Company's non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260212833008/en/
CONTACT: Capstone Green Energy
Investor and investment media inquiries | ir@CGRNenergy.com
818-407-3628
(END) Dow Jones Newswires
February 12, 2026 17:24 ET (22:24 GMT)