Fuelcell Stock Jumps Despite Q2 Earnings Miss On Revenue Surge, New Restructuring Plan

FuelCell Energy (FCEL) shares jumped as much as 29% at the opening bell on Friday after the company reported a surge in revenue and laid out a major restructuring plan to reduce costs and concentrate on its carbonate platform.

FuelCell Energy reported a loss of $1.79 per share in the second quarter (Q2), an improvement over the same period last year and wider than the estimated loss of $1.38 per share, according to Koyfin data.

Its revenue grew 67% year-on-year (YOY) to $37.4 million, coming in ahead of Wall Street's estimate of $32 million. Management said the growth was driven by new product and service contract activity. 

Product revenue was $13 million compared with none in the prior-year period, while service agreements generated $8.1 million, helped by module replacements under a contract with United Illuminating

Generation revenue declined to $12.1 million from $14.1 million, reflecting lower power output due to maintenance. Advanced technologies contract revenue also fell to $4.1 million from $6.9 million, partly due to reduced revenue from contracts with ExxonMobil affiliates and government agencies.

The company announced a new restructuring initiative that will affect operations in the U.S., Canada, and Germany. 

FuelCell said the move is intended to reduce operating costs, prioritize carbonate platform development, and preserve competitiveness in a slower investment environment for clean energy. 

The plan includes a 22% reduction in workforce, bringing global headcount to approximately 426.

This follows a November 2024 restructuring that targeted a 15% reduction in fiscal 2025 operating costs and included a 13% workforce cut along with trimmed spending on product development and overhead.

CEO Jason Few said the company is prioritizing its core carbonate technology in response to demand from AI data centers and distributed power solutions. FuelCell is also scaling back commercial development of solid oxide platforms and trimming SG & A expenses to improve its financial trajectory.

CFO Michael Bishop highlighted the company's ongoing cost discipline and pursuit of strategic financing. 

Cash and equivalents, including restricted cash and short-term investments, totaled $240 million at the end of the quarter, down from $318 million in October 2024.

FuelCell ended the quarter with $1.26 billion in backlog, up 19% from a year earlier, supported by a long-term service agreement with Gyeonggi Green Energy in South Korea and a new 20-year power purchase agreement for a 7.4-MW fuel cell plant in Connecticut.

FuelCell's stock is down 77% over the past 12 months and 30% year-to-date.

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