FLNC Q3 Earnings Call Highlights Supply Delays, Data Center Demand

FLNC Cuts Fiscal 2026 Outlook on Factory Delays

Chief financial officer Ahmed Pasha said fiscal 2026 revenues are now expected at $2.9 billion to $3.1 billion, with the midpoint down about $400 million to $3 billion.

CFO Pasha said adjusted EBITDA guidance moved to negative $30 million to positive $10 million from positive $40 million to $60 million. Delayed revenues account for about $44 million of lost margin, while a planned battery supply agreement adds $15 million.

The company reported a quarterly loss of $0.24, wider than the Zacks Consensus Estimate of a loss of $0.05. Third-quarter revenues came in at $600.18 million, which missed the Zacks Consensus Estimate of $761.90 million.

Fluence Sees Data Center Pipeline Accelerate

President and CEO Julian Nebreda said third-quarter order intake reached $1.44 billion, nearly triple the year-earlier level, lifting backlog to a record $6.4 billion.

CEO Nebreda said data center business secured through July totaled about $850 million, including a $300 million developer order and about $550 million of hyperscaler awards not yet in purchase orders.

A Jefferies analyst asked about booking cadence. Nebreda said developers move faster because speed to power is the priority, while hyperscalers emphasize power quality. The data center pipeline reached 16 gigawatt-hours, up more than 35% sequentially.

FLNC Reshapes Supply-Chain Oversight

Nebreda said an international factory delayed Smartstack components after initial output failed Fluence's quality tests. The facility is fully ramped, but lost fiscal 2026 volume cannot be fully recovered.

The Houston plant faced construction, utility and automation delays. Nebreda added the 15-gigawatt-hour facility is producing and should reach full production during the first quarter of fiscal 2027.

Nebreda said Roman Loosen will lead supply chain, while Peter Williams focuses on product, framing the change around execution and process transformation at greater scale rather than replacing manufacturing partners.

Fluence Defends Backlog Margins and Conversion

A Citi analyst pressed management on margins. Nebreda said backlog and new orders remain within the company's 10% to 15% margin range, while scaling execution remains the key operational challenge.

Nebreda reiterated that 80% to 90% revenue coverage remains appropriate for fiscal 2027. About $2.2 billion of backlog is expected to convert to fiscal 2027 revenues.

A Goldman Sachs analyst asked whether data centers change the conversion cycle. Nebreda said the initial developer deal moved from lead to contract in less than three months versus 12 to 18 months for traditional segments.

FLNC Maps Liquidity Needs to Higher Order Intake

CFO Pasha said total liquidity ended the quarter at about $863 million, including roughly $365 million of total cash. He still expects about $900 million at fiscal year-end.

Pasha said higher fiscal 2027 order intake could require an additional $300 million to $500 million of working capital. Financing would be pursued only with a clear path to profitable growth and shareholder value creation.

A BMO Capital Markets analyst questioned fourth-quarter execution. Nebreda said roughly half of required quarterly production had been produced and integrated, while Pasha said the wider adjusted EBITDA range reflects potential ramp-up costs.

Fluence Centers Fiscal 2027 on Execution

Management's tone combined confidence in demand with acknowledgment that manufacturing execution must improve. Nebreda said delayed projects are older traditional contracts and do not affect data center master supply agreements.

Nebreda's near-term focus is bringing Houston to full production, sustaining international quality and converting commercial activity into revenues without repeating the fiscal 2026 ramp-up issues.

FLNC's Zacks Signals Remain Mixed

FLNC carries a Zacks Rank #3 (Hold), a neutral ranking versus the top Zacks Rank categories. Its Momentum Score is A, while its Value, Growth and VGM Scores are D, making momentum the strongest style signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks framework favors A or B Style Scores, especially alongside Zacks Rank #1 or #2 (Buy) stocks. FLNC's mixed profile lacks that preferred combination, and its Zacks Rank can change as analyst earnings estimates are revised after the just-reported results.

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