Bloom Energy Corporation 2026 Q3 Earnings Call

Please go ahead. Thank you, and good afternoon, everybody.

Thank you for joining us for Bloom Energy's third quarter 2026 earnings call. To supplement this conference call, we furnished our third quarter 2026 earnings press release and supplemental financial information with the SEC on Form 8-K and have posted these materials, which we will reference throughout this call, to our investor relations website. During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These include statements about the company's business results, products, markets, customers, strategy, financial position, liquidity, and full-year outlook for 2026. These statements are predictions based upon our expectations, estimates, and assumptions.

However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties, as discussed in detail in our documents filed with the SEC, including our most recently filed Forms 10-K and 10-Q. We assume no obligation to revise any forward-looking statements made on today's call. During this call, and in our third quarter 2026 earnings press release and supplemental financial information, we refer to GAAP and non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in these materials, which are available on our investor relations website.

Joining me on today's call are KR Sridhar, founder, chairman, and chief executive officer, and Simon Edwards, our chief financial officer. KR will begin with an overview of our progress, and then Simon will review financial highlights for the quarter. After our prepared remarks, we will have time to take your questions. I will now turn the call over to KR.

Good day, everyone. At the end of September, as we were closing out another record quarter, I celebrated Bloom's 25th anniversary and our inclusion in the S&P 500 by ringing the opening bell at the New York Stock Exchange, surrounded by many of our manufacturing team members. Our mission has not changed in a quarter of a century: providing clean, reliable, accessible, and affordable power for everyone. After all, in our modern age, electric power is essential to economic and physical well-being and to human dignity and happiness. The last time Bloom rang the bell was 8 years ago for our IPO. Then, we were seen by the market as a niche provider of electricity. Now, we are seen as a standard for on-site power, critical to powering the AI revolution.

I'm confident that 8 years from now, we will look back and understand that Bloom led the first major architectural change in the history of the 150-year-old power industry. Fuel Cell-based on-site power will become a preferred choice and complement to the grid for power delivery across all industries and geographies. Countries with insufficient grid infrastructure will leapfrog to distributed on-site power, just as developing countries bypassed landlines and directly adopted cell phones. Hyperscalers have been the first to embrace on-site power. They need power rapidly and at large scale. Some individual data centers use more power than some small states. The grid was designed to provide power that was evenly distributed across a very large number of customers spread over large areas. It is overwhelmed by the concentrated and huge power needs of data centers. Mandated cost-plus rate designs and utility franchise laws have exacerbated this problem.

By design, they do not incentivize regulated utilities to innovate or create efficiency. Flat electricity demand over 2 decades prior to AI led to lack of investment and much-needed upgrades. The speed and scale of the AI revolution made the grid's shortcomings obvious. Hyperscalers scrambled to find any available grid power and soon realized that bringing their own on-site power was the path forward. Bloom quickly emerged as a standard solution. It is community-friendly and more secure. The redundant, fault-tolerant, and distributed architecture offers higher availability, it's always on, and resilient to natural disasters, cyber, and physical attacks. It eliminates the need for backup generators. We win on total cost of ownership, safety, access, speed, and sustainability with a clear path to net zero emissions. Now, the same forces that pushed hyperscalers are driving broad swaths of the electricity market towards on-site power.

One quarter of all commercial and industrial facilities in the U.S. expect to be fully powered on-site by 2030, according to our recent power survey of over 200 C&I businesses. Across 15 unique segments, 35% of facilities expect to be fully powered on-site by 2035. Why? Going forward, electrification and digitization, population growth, and automation will mean that factories and businesses will consume large amounts of power and require very high reliability. In fact, the IEA projects global electricity demand to increase 40% by 2035. The grid is ill-suited to either rapidly scale or power concentrated loads with high reliability, just as it's struggling to power AI factories. Bloom will become the solution of choice for this large segment of the market.

We will be a leader in enabling the electricity market to capture the new global demand and grow annually to about $6 trillion in the next decade, up from about $3 trillion today. After 25 years, we are just getting started. Our growth is accelerating. There is better understanding for the value we provide, and widespread recognition of our brand. We started our 2026 Q1 earnings call expecting a year-on-year revenue growth of 60%. Today, we are upward revising that guidance and projecting over 120% year-on-year revenue growth at the midpoint. Our customer pipeline continues to grow and our backlog is continuing to expand faster than our revenue, with increasing diversity in customers, verticals, and geographies. We are delivering for our customers. Just 15 months ago, we announced our first project with Oracle and delivered power to their Utah site in less than two months.

We are achieving the same thing with Nebius in New Jersey. We were able to get planning board approvals for our fuel cells within three months of signing the contract. Two months after these approvals, we have the first block of power ready for customer use. Our business in this important segment is robust and growing rapidly. Communities and policymakers recognize that we are clean and quiet. We are the best option for firm on-site power. For example, in a 2026 energy plan, Virginia Governor Abigail Spanberger explicitly called out non-combustion fuel cells and said, I quote, "Compared to the conventional gas-fired generation, they produce substantially lower local emissions, reducing health impacts in nearby communities." This is significant because this is not just any jurisdiction. Virginia is the home to most of the data centers in the world.

It is also ground zero for the challenging relationship between data centers and communities. We applaud Governor Spanberger for recognizing the values that our non-combustion solutions bring to the table at this critical moment for both the data center industry and the communities they operate in. Here are five commercial wins from the quarter that exemplify how we are expanding our total addressable market. First, the U.S. Army has conditionally awarded our partner, Indelible, long-term leases to build and operate commercial power generation using Bloom Energy Servers at U.S. Army installations. The purpose is to enhance power security using our distributed and on-site architecture. We view securely powering military and civilian critical infrastructure such as bases, water treatment plants, hospitals, and airports as a growth opportunity.

Second, AEP revealed that 700 megawatts of carbon capture and sequestration-enabled Bloom Energy Servers will be used to provide Google with near net zero electricity in a first-of-its-kind project. Unlike turbines and engines, Bloom's technology makes CCS viable at scale. We see CCS as critical to meeting decarbonization goals and as a potential trillion-dollar market opportunity for Bloom. Third, we have talked to you about our expanding footprint in the Rocky Mountain, Midwest, and Great Lakes regions. Our value proposition has become competitive even in the American States with the lowest cost of power, such as Texas, where we are shipping our first units this quarter. Fourth, we consider the utility relationships we are building as a channel to powering America forward through the power shortage.

Many utilities are increasingly recognizing that our clean baseload generation asset, a Bloom Energy Server, when deployed at their distribution networks, is a faster and more economical way to fulfill power growth demand of their customers and enhance the distribution network stability and reliability. I expect to see significant wins in our utility-related business, often called front of the meter arrangements. Finally, the fifth, we are witnessing strong interest in deploying Bloom systems to meet rapidly growing power demand in many international markets. We are engaged with potential local partners in a few of these markets. We look forward to updating you soon on some wins. To summarize, Bloom is a solution of choice for community-friendly onsite power that is rapidly deployed, clean, reliable, and competitive.