Bloom Energy Corporation (BE) Earnings

Management highlights

### Business Model & Market Positioning - Bloom Energy has established itself as the standard for on-site power for AI data centers in less than a year, with all major U.S. hyperscalers and over a dozen neoclouds, AI labs, and co-location operators having validated and approved its power solutions, up from just one direct hyperscaler customer nine months prior. - The company’s agile business model enables booking, shipping, and converting orders to revenue within the same fiscal year, leading to backlog growth that outpaces revenue growth. The modular, copy-exact design of Bloom Energy servers allows for easy redeployment across sites, making all portfolio projects fungible, diversifying risk, and enabling navigation of the fast-changing AI landscape. ### Key Friction Point Solutions - **Capital**: The company has secured large-scale committed financing from top global infrastructure investors to eliminate bespoke financing friction for customers. Brookfield expanded its strategic partnership from $5 billion to $25 billion, and an additional consortium led by Industrial Development Funding has brought total committed financing to $2.6 billion, with more partners in the pipeline. - **Community & Permitting**: Bloom’s zero-combustion technology has negligible air pollution and water use, operates quieter than air conditioning, and is aesthetically appealing, leading to broader community acceptance and faster permit approval compared to combustion-based alternatives, creating a strong competitive advantage. - **Speed**: The company proactively adds U.S. manufacturing capacity in incremental, standardized increments ahead of committed orders. It has built a resilient, multi-country supply chain with multiple qualified suppliers for all critical inputs and pre-positioned inventory, enabling delivery of power in months versus the multi-year timelines of legacy power suppliers.

Guidance

- Full-year 2026 revenue guidance is raised upward to $3.9 billion to $4.2 billion, representing 100% year-over-year growth at the midpoint versus 2025’s ~$2 billion revenue. The guidance is built on bottom-up backlog conversion plus reserved capacity for in-year bookings from time-sensitive customers. - Full-year non-GAAP gross margin guidance is maintained at approximately 34%, consistent with the upward revision made last quarter. The company prioritizes meeting customer time-to-power requests over short-term quarterly margin targets, but this discipline remains consistent with the full-year 34% target. - Full-year non-GAAP operating income guidance is raised upward sharply to $800 million to $900 million, from the prior guidance of $425 million to $450 million, implying an operating margin of ~21% at the midpoint, up from 14% at the prior midpoint, reflecting significant operating leverage as revenue scales. - Full-year non-GAAP diluted EPS guidance is set at $2.55 to $2.85. - Free cash flow is no longer presented as formal guidance, aligned with updated presentation practices; management confirms that ~100% of incremental operating income from guidance increases converts to operating cash flow, with a new baseline expectation of ~$375 million+ in operating cash flow.

Segment performance

Bloom Energy reports two core business segments: Product and Services. Total Q2 2026 revenue reached a record $1.065 billion, growing 166% year-over-year and 42% sequentially. Product segment revenue was $935 million, up 215% year-over-year and 43% sequentially, representing 88% of total quarterly revenue. Product gross margin hit 37.2%, up 193 basis points sequentially and 291 basis points year-over-year. Services segment revenue contributed the remaining 12% of total revenue, with a 22% gross margin, up 977 basis points year-over-year, marking the fifth consecutive quarter of double-digit service margins. Overall quarterly non-GAAP gross margin was 34.3%, up 604 basis points year-over-year. Total operating income was $240 million, up 737% year-over-year, with an operating margin of 22.5%. Adjusted EBITDA was $253 million (24% of revenue), non-GAAP diluted EPS was 78 cents, and GAAP diluted EPS was 62 cents. Operating cash flow was $226 million, and free cash flow was $175 million, ending the quarter with $2.7 billion in cash.

Risks & headwinds

- The demand for AI-driven power infrastructure is accelerating rapidly, but there is inherent uncertainty about the long-term pace of AI capital investment, though Bloom mitigates this by focusing on controllable factors including cost reduction, quality, and reliable delivery rather than predicting market growth. - Large infrastructure projects routinely experience delays, though Bloom mitigates this risk through contract structure, fungible modular equipment, and diversified backlog, so 2026 guidance does not rely on any single project and can absorb variable delivery timing. - Concentrated customer revenue in individual quarters can occur due to the lumpy nature of large campus project delivery, though this reflects delivery timing rather than actual underlying backlog concentration, as backlog is spread across dozens of customers and segments.

Analyst Q&A

• Q: What is the breakdown of approved major hyperscalers between active use, backlog, and pipeline, and is Bloom accelerating its capacity expansion plans?

  A: Bloom does not split out the count of customers by category, but confirms that all major U.S. hyperscalers and over a dozen neocloud/co-location partners fall into the combined group of active, shipped, and committed customers. Capacity planning is aligned to customer need based on projected demand, with fungible units that can be redirected between sites, and management confirms capacity will not be a constraint for current and projected orders.

• Q: What is the expected timing for deploying the $20 billion Brookfield financing expansion, and what due diligence do financial partners complete?

  A: The $25 billion Brookfield commitment is structured as a financial shelf available for use, and the pace of deployment depends on customer uptake. Brookfield completed deep additional diligence after its initial $5 billion commitment, including verifying Bloom's long-term operating performance with longstanding customers, and expanded the commitment only after seeing strong execution, which reflects the rapid acceleration of demand for Bloom's solutions.

• Q: What is Bloom's exposure to project development delays at large projects, and what contractual protections are in place?

  A: Bloom does not comment on individual projects, but its standard contracts include strong protections, and financiers are contractually obligated to take delivery of equipment from Bloom even if end-customer projects are delayed. The 2026 revenue guidance already accounts for expected variability in project timing, as it is built on a diversified backlog and does not depend on any single project, so delays do not impact full-year targets.

• Q: Is there sufficient scandium supply for Bloom's planned deployments, and is Bloom dependent on China for this material?

  A: There is enough economically viable scandium globally to support widespread deployment of Bloom technology. Bloom currently has secured visibility into supply for 25 gigawatts of planned deployments and is not dependent on China for scandium; all additional details remain proprietary to the company.