Bloom Energy Corp: Form 10-Q for the period ended Mar 31, 2026

OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “predict,” “project,” “potential,” “seek,” “intend,” “could,” “would,” “should,” “expect,” “plan” and similar expressions are intended to identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.

Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our plans and expectations regarding future financial results, including our expectations regarding: our ability to be successful in the AI data center market and new international markets; the rate of AI adoption and demand for data centers; our ability to innovate, develop new products and improve upon our existing products; our ability to anticipate and address customer demand; our strategic partnerships with SK ecoplant Co., Ltd. and parties which provide financing and capital for project financings; our competitive position in the energy market for on-site power; future deployment of our Bloom Energy Server systems, Bloom Electrolyzers, and other solutions; our ability to increase efficiency of our products; our ability to market our products successfully in connection with the global energy transition and shifting attitudes around climate change; our business strategy and plans and our objectives for future operations; operating results; the sufficiency of our cash, our cash flows from operating activities, and our liquidity and our ability to obtain financing; projected costs and cost reductions; our ability to increase production capacity and achieve cost reductions in our fuel cell products and installation requirements; the adequacy of our agreements with our suppliers; management’s plans and objectives for future operations; our ability to repay our debt obligations as they come due; trends in average selling prices; the success of our customer financing arrangements and ability to secure financiers to support customer financing needs for our product deployment; capital expenditures; warranty matters; outcomes of litigation; risks related to cybersecurity breaches, privacy and data security; the likelihood of any impairment of project assets, long-lived assets and investments; trends in revenue, cost of revenue and gross profit (loss); trends in operating expenses including research and development expense, sales and marketing expense and general and administrative expense and expectations regarding these expenses as a percentage of revenue; legislative actions and regulatory and environmental compliance; government shutdowns; general business and macroeconomic conditions in our markets including inflationary pressure; our supply chain (including any direct or indirect effects from the Russia-Ukraine war, armed conflicts in the Middle East, or geopolitical developments related to China); the impact of tariffs on our supply chain and fuel cell product; the impact of changes in government incentives, including the impact of the Inflation Reduction Act of 2022 (the “IRA”) and the One Big Beautiful Bill Act (the “OBBBA”); industry trends; our exposure to foreign exchange, interest and credit risk; and the impact of recently adopted accounting pronouncements.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors including those discussed in the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“2025 Form 10-K”), as well as those described from time to time in our others filings filed with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.

Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors including those discussed under in the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“2025 Form 10-K”), as well as those described from time to time in our others filings filed with the Securities and Exchange Commission.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Overview

Description of Bloom Energy

Bloom Energy is a global leader in onsite power generation, delivering a foundational platform purpose-built for the digital era and the global energy transition. We manufacture a versatile fuel cell energy platform, supporting the commercial availability of two primary products: the Bloom Energy Server® fuel cell system for generating electricity and the Bloom Electrolyzer™ for producing hydrogen. Our primary product, the Bloom Energy Server is a proprietary high-temperature solid-oxide fuel cell technology that converts fuels—including natural gas, biogas, and hydrogen—into electricity at high density without combustion or moving parts, achieving lower emissions and higher efficiency than legacy systems.

For additional overview information, refer to Part I, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, sections Overview and Key Macro Trends in our 2025 Form 10-K.

Developments With Respect to Factors Affecting Our Performance

Freight, Logistics and Transportation Costs

Global freight and logistics markets remained volatile during the first quarter of 2026, with continued pressure on ocean, ground and specialized heavy-equipment transportation rates. While transportation availability improved relative to peak levels experienced in prior years, higher fuel prices, labor costs, and routing inefficiencies related to geopolitical conditions contributed to elevated logistics costs. Given the size, weight, and modular configuration of Bloom Energy Server systems and related balance‑of‑plant components, changes in freight pricing can meaningfully affect our cost of revenues and project-level margins, particularly for large multi-megawatt deployments and international shipments. We continue to pursue mitigation strategies including negotiating indexed freight arrangements where feasible, optimizing factory-to-site routing, consolidating shipments, and increasing regional sourcing; however, there can be no assurance that such actions will fully offset future freight rate increases, especially in periods of elevated demand or fuel price volatility.

Commodity Pricing Volatility

Commodity input pricing remained an important factor affecting our cost structure during the first quarter of 2026. Certain raw materials and components used in our fuel cell stacks, power electronics, structural assemblies, and balance‑of‑plant systems—including steel alloys, specialty metals, electronic components, natural gas‑linked inputs, and rare earth‑dependent materials—experienced price fluctuations. While we do not generally purchase commodities directly at spot prices, supplier pricing may reflect changes in underlying commodity indices over time. Increases in commodity prices may not be immediately recoverable through customer pricing due to contractual arrangements, competitive dynamics, or fixed‑price project structures, creating potential margin pressure. We utilize supplier diversification, long‑term sourcing agreements, inventory planning, and selective contractual pass‑through mechanisms where available to mitigate commodity cost risks; however, sustained or rapid commodity price increases could adversely affect our results of operations.

Inflationary Pressures on Manufacturing and Service Costs

Although headline inflation moderated compared to prior periods, inflationary pressures persisted across several cost categories relevant to our business during the first quarter of 2026, including labor, manufacturing services, field installation and long‑term service operations. Wage inflation in skilled manufacturing and technical field labor categories, coupled with higher costs for third‑party contractors, continued to exert upward pressure on our operating expenses and cost of revenues. In addition, increases in insurance, regulatory compliance, and professional services costs contributed to higher overhead compared to prior periods. We seek to manage inflationary impacts through productivity initiatives, automation, supplier negotiations, selective price adjustments, and ongoing cost‑reduction programs. However, the timing and extent of these mitigations may not fully align with the pace of cost increases, particularly in periods of rapid scale‑up or accelerated deployment schedules.

For additional information with respect of other factors affecting our performance, refer to Part I, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Other Factors Affecting our Performance in our 2025 Form 10-K.

Sustainability

We are driven by the promise of our contribution to the transformation and decarbonization of energy and mobility sectors globally. We are committed to making our technology available across a growing list of applications including biogas, carbon capture, hydrogen, combined heat and power, and microgrid projects to increase sustainability. Our natural gas-based Energy Server systems are also an important source of near-term emission reductions.

In April 2026, we released our 2025 Impact Report, Built for AI. Designed for Communities (the “Impact Report”), our sixth dedicated report, using generally accepted sustainability frameworks and standards, including alignment with Sustainability Accounting Standards Board (“SASB”) standards and the Task Force on Climate-related Financial Disclosure (“TCFD”) recommendations. In addition, the report also mapped to select Global Reporting Initiative (“GRI”) disclosures and to the International Financial Reporting Standard (“IFRS”) S2 disclosure standard.

The Impact Report as well as an ESG policy and resource library can be found on our website at https://www.bloomenergy.com/sustainability. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Inflation Reduction Act of 2022 (the “IRA”) and The One Big Beautiful Bill Act (the “OBBBA”)

For information on the IRA and the OBBBA and their impact on our business, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Inflation Reduction Act of 2022 and The One Big Beautiful Bill Act in our 2025 Form 10-K.

Liquidity and Capital Resources

Overview of Liquidity Position

As of March 31, 2026, and December 31, 2025, we had unrestricted cash and cash equivalents of $2,491.4 million and $2,454.1 million, respectively. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $2,431.0 million and $2,386.6 million as of March 31, 2026, and December 31, 2025, respectively. We seek to maintain these balances with high credit quality counterparties, regularly monitor the amount of our credit exposure to any one issuer and diversify our investments in order to minimize our exposure.

As of March 31, 2026, and December 31, 2025, we had $2,598.7 million and $2,613.7 million of recourse debt, $4.0 million and $4.2 million of non-recourse debt, and $9.2 million and $10.0 million of other long-term liabilities, respectively. As of March 31, 2026, and December 31, 2025, $4.0 million and $4.2 million of our debt were classified as short-term, respectively, and $2,598.7 million and $2,613.7 million of our debt were classified as long-term, respectively. For a complete description of our outstanding debt, please see Part I, Item 1, Note 8—Outstanding Loans and Security Agreements in this Quarterly Report on Form 10-Q.

Capital Markets Activity

In October 2025, in connection with our partnership with Oracle to provide on-site solid state power for AI data centers, subject to the negotiation of a warrant mutually acceptable to us and Oracle, we agreed to issue to Oracle a warrant to purchase up to an aggregate of 3,531,073 shares of our common stock, with an exercise price of $113.28 per share, which was the closing market price of our common stock on October 28, 2025. We and Oracle agreed that (i) the expiration date of the Oracle Warrant will be six (6) months from the date of the issuance of the Oracle Warrant, (ii) the Oracle Warrant will include customary anti-dilution adjustments, transfer restrictions and exercise procedures, and (iii) the Oracle Warrant will not entitle the holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise and settlement of the Oracle Warrant. The Oracle Warrant and the shares underlying the Oracle Warrant are expected to be issued in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

On April 9, 2026, we issued the warrant to Oracle pursuant to the previously disclosed strategic partnership agreement. The warrant is fully vested upon issuance, immediately exercisable in whole or in part, at any time during six months from the grant date.

Revolving Credit Facility

For information on a senior secured multicurrency revolving credit facility (the “Revolving Credit Facility”) which we entered into on December 19, 2025, see Part II, Item 8, Note 8—Outstanding Loans and Security Agreements, section Revolving Credit Facility in our 2025 Form 10-K. As of March 31, 2026, and December 31, 2025, no amounts were drawn under the Revolving Credit Facility.

Near-Term Liquidity Outlook and Financing Flexibility

The combination of our cash and cash equivalents and cash flow expected to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or not received in a timely manner to meet our near-term or future liquidity needs, we may require additional equity or debt financing to fund our operations, manufacturing capacity, product development, and market expansion initiatives, as well as to respond to competitive pressures or strategic opportunities. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. There were no factoring arrangements during the three months ended March 31, 2026 and 2025. We may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may limit our financial and operational flexibility. Although we currently do not have any floating-rate notes on our balance sheet, our overall cost of capital may increase if interest rates rise and we refinance our fixed-rate convertible notes. If we raise additional funds through the issuance of equity or equity-linked securities, our existing stockholders could experience dilution in their ownership percentage, and any new securities may have rights, preferences, and privileges senior to those of our common stock.

Future Capital Requirements

Our future capital requirements depend on a variety of factors, including our rate of revenue growth; the timing and extent of spending on research and development and other business initiatives; increases in our manufacturing capacity; the pace and volume of system builds; the need for additional working capital; the expansion of our sales and marketing activities in both domestic and international markets; market acceptance of our products; selling models and vehicles required by customers; our ability to secure financing for customer use of our products; the timing of installations and related inventory build in anticipation of future sales; and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.

Cash Flow Analysis

A summary of our consolidated sources and uses of cash, cash equivalents, and restricted cash was as follows (in thousands):

Operating Activities

Our operating activities consisted of net income adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash provided by operating activities for the three months ended March 31, 2026, was primarily due to business‑driven changes in working capital totaling $41.3 million. These changes included:

• A $93.1 million increase in deferred revenue and customer deposits, primarily driven by a higher level of new customer deposits compared to the prior year period. This reflected the timing and mix of system deployments, including a lower proportion of projects without significant upfront billings. Deferred revenue increased modestly compared to the prior year period;
• A $88.6 million increase in inventory. Inventory increased as we built additional units to support anticipated 2026

demand and to manage lead times in our supply chain;

• A $54.2 million increase in prepaid expenses and other current assets due to upfront service‑related payments aligned with expanding field service activity; and
• A $51.9 million increase in accounts receivable and contract assets, which grew due to the timing of milestone billings and customer acceptance cycles.

These movements were partially offset by (i) a $53.9 million benefit from the timing of vendor payments, and (ii) a $7.3 million decrease in deferred cost of revenue as associated systems reached acceptance milestones during the reporting quarter.

Net cash provided by operating activities for the three months ended March 31, 2026, was $73.6 million, representing a $184.3 million increase compared to the prior year period. The year-over-year change in operating assets and liabilities was primarily driven by: (i) an increase of $63.1 million attributable to contract assets, (ii) an increase of $49.1 million attributable to prepaid expenses and other current assets, (iii) an increase of $37.0 million attributable to accounts payable and accrued expenses, (iv) an increase of $23.7 million attributable to other long-term assets, (v) an increase of $23.0 million attributable to inventories, (vi) an increase of $18.7 million attributable to deferred revenue and customer deposits, (vii) an increase of $9.5 million attributable to accounts receivable, and (viii) an increase of $2.6 million attributable to deferred cost of revenue. These working‑capital variances represent gross movements and therefore do not reconcile directly to the total year‑over‑year change in net cash provided by operating activities, which also reflects non‑cash adjustments and other operating items included in the reconciliation from net income to operating cash flows.

Investing Activities

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity, and investments in unconsolidated affiliates. Cash used in investing activities during the three months ended March 31, 2026, was $45.9 million, an increase of $31.7 million compared to the prior year period. The increase was primarily due to a $19.8 million investment in the joint ventures between the Company and Brookfield (see Part I, Item 1, Note 7—Investments in Unconsolidated Affiliates in this Quarterly Report on Form 10-Q), and a $11.9 million increase in expenditures on tenant improvements for a leased engineering and manufacturing facility in Fremont, California, which opened in July 2022. We expect to continue to make capital investments to expand production capacity at our manufacturing facilities in Fremont, California and Delmarva, Delaware. These investments, which include the purchase of new equipment and tenant improvements, are part of our strategic plan to continually increase capacity to meet orders and customer deliver requirements. The magnitude and timing of these capital expenditures will depend on implementation milestones, supplier lead times, and customer demand. We intend to fund these capital expenditures from cash on hand as well as cash flow expected to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.

Financing Activities

Our financing activities consist of payment of debt issuance costs, repayments of financing obligations, proceeds from issuance of our common stock, and other cash flows from financing activities. Net cash provided by financing activities during the three months ended March 31, 2026, was $7.1 million, an increase of $1.9 million compared to the prior year period, predominantly due to a $8.2 million increase in proceeds from issuance of common stock, partially offset by (i) an increase in cash outflows of $0.8 million for repayment of debt issuance costs, and (ii) a $5.3 million increase in repayment of financing obligations.

Net cash provided by financing activities for the three months ended March 31, 2026, consisted primarily of (i) the proceeds from issuance of common stock of $15.8 million, (ii) the repayment of financing obligations of $8.0 million, and (iii) payment of debt issuance cost of $0.8 million.

We believe we have sufficient capital to operate our business over the next 12 months. Our working capital was strengthened with the supplemented liquidity through issuing the 0% Notes, the 3.0% Green Notes due June 2029, and the 3.0% Green Notes due June 2028 in the fourth quarter of fiscal year 2025, the second quarter of fiscal year 2024, and the second quarter of fiscal year 2023, respectively, as well as financing activities with SK ecoplant in the first quarter of 2023. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part II, Item 8, Note 8—Outstanding Loans and Security Agreements, and Part I, Item 1A, Risk Factors—Risks Related to Our Liquidity—Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs in our 2025 Form 10-K, for more information regarding the terms of and risks associated with our debt.

Purchase and Financing Options

For information about our purchase and financing options, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Purchase and Financing Options in our 2025 Form 10-K.

Purchase Alternatives

Our customers have several purchase alternatives for our Energy Server systems. The portion of total revenue attributable to each purchase option for the three months ended March 31, 2026 and 2025, was as follows:

Financing Partners

For information about our financing partners, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Purchase and Financing Options, sub-section Financing Partners in our 2025 Form 10-K.

Delivery and Installation

For information on delivery and installation of our Energy Server systems, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Delivery and Installation in our 2025 Form 10-K.

Performance Guarantees

As of March 31, 2026, and December 31, 2025, we had incurred no liabilities due to failure to repair or replace the Energy Server systems pursuant to any performance warranties made under the O&M Agreements (“O&M Agreements”).

For the O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $583.3 million (including $473.2 million related to portfolio financing entities and $110.1 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $470.9 million as of March 31, 2026. For the three months ended March 31, 2026 and 2025, we made performance guarantee payments of $8.4 million and $11.6 million, respectively.

International Channel Partners

There were no significant changes in our international channel partners during the three months ended March 31, 2026. For information on international channel partners, see Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, section International Channel Partners in our 2025 Form 10-K.

Results of Operations

A discussion regarding the comparison of our financial condition and results of operations for the three months ended March 31, 2026 and 2025, is presented below.

Revenue

(dollars in thousands)

Total Revenue

Total revenue increased by $425.0 million, or 130.4%, for the three months ended March 31, 2026, compared to the prior year period. This increase was driven by a $441.5 million increase in product revenue, and an $8.3 million increase in service revenue, partially offset by a $17.1 million decrease in electricity revenue, and a $7.7 million decrease in installation revenue.

Product Revenue

Product revenue increased by $441.5 million, or 208.4%, for the three months ended March 31, 2026, compared to the prior year period. The increase was primarily due to stronger demand for our Energy Server systems to meet the time‑to‑power needs of a growing market, driven largely by multiple projects executed through the joint venture with Brookfield, including a major hyperscaler project.

Installation Revenue

Installation revenue decreased by $7.7 million, or 22.9%, for the three months ended March 31, 2026, compared to the prior year period. This decrease resulted from differences in project timing, mix of our project base, and milestone execution.

Service Revenue

Service revenue increased by $8.3 million, or 15.6%, for the three months ended March 31, 2026, compared to the prior year period. The increase was primarily driven by higher revenue from maintenance contracts associated with our fleet of Energy Server systems, which contributed $9.4 million, partially offset by higher product performance guarantee costs of $1.6 million.

Electricity Revenue

Electricity revenue includes both revenue from contracts with customers and revenue from contracts that contain leases.

Electricity revenue decreased by $17.1 million, or 63.3%, for the three months ended March 31, 2026, compared to the prior year period. The decrease was predominantly due to a one-time settlement of a customer contract after redeploying assets for our partner in the first quarter of fiscal year 2025, as well as lower straight-line electricity revenue resulting from repowering of certain Managed Services related sites.

Cost of Revenue

(dollars in thousands)

Total Cost of Revenue

Total cost of revenue increased by $288.2 million, or 121.4%, for the three months ended March 31, 2026, compared to the prior year period. The increase was driven by a $289.7 million increase in cost of product revenue, a $1.8 million increase in costs of installation revenue, and a $0.8 million increase in cost of service revenue, partially offset by a $4.0 million decrease in cost of electricity revenue.

Cost of Product Revenue

Cost of product revenue increased by $289.7 million, or 207.5%, for the three months ended March 31, 2026, compared to the prior year period. Product costs increased primarily due to higher sales volumes driven by increased demand for our Energy Server systems, and an increase in product warranty. The increase was partially offset by ongoing improvements in manufacturing efficiency and automation that reduced material, labor, and overhead costs.

Cost of Installation Revenue

Cost of installation revenue increased by $1.8 million, or 5.3%, for the three months ended March 31, 2026, compared to the prior year period. The increase was driven by differences in project timing, mix of our project base, and milestone execution.

Cost of Service Revenue

Cost of service revenue remained flat period over period, which, when compared to the 15.6% increase in service revenue, reflects improved cost efficiency. This improvement was driven primarily by (i) a reduction in the deployment of field replacement units, contributing to cost savings of $3.2 million, and (ii) our cost reduction efforts to manage fleet optimizations.

Cost of Electricity Revenue

Cost of electricity revenue includes both cost of revenue from contracts with customers and cost of revenue from contracts that contain leases.

Cost of electricity revenue decreased by $4.0 million, or 34.9%, for the three months ended March 31, 2026, compared to the prior year period. The decrease was mainly due to (i) redeploying assets for our partner to enable a one-time settlement of a customer contract in the first quarter of fiscal year 2025, and (ii) the reduction in the number of installed units.

Gross Profit (Loss) and Gross Margin

(dollars in thousands)

Total Gross Profit

Gross profit increased by $136.8 million in the three months ended March 31, 2026, compared to the prior year period. This increase was predominantly driven by a $151.8 million increase in product gross profit, and a $7.5 million increase in service gross profit, partially offset by a $13.0 million decrease of electricity gross profit, and a $9.5 million decrease of installation gross margin.

Product Gross Profit

Product gross profit increased by $151.8 million in the three months ended March 31, 2026, compared to the prior year period. The increase was primarily driven by (i) an increase in demand for our products, largely resulting from multiple projects executed through the joint venture with Brookfield, including our major hyperscaler project, and (ii) our continued efforts to reduce material, labor, and overhead costs through enhanced manufacturing processes and increased automation. The overall increase was partially offset by an increase in product warranty.

Installation Gross Profit (Loss)

Installation gross margin decreased by $9.5 million and flipped from gross profit to gross loss in the three months ended March 31, 2026, compared to the prior year period. The change was primarily driven by the timing of key project milestones for sites requiring our installation services during the reporting period.

Service Gross Profit

Service gross profit increased by $7.5 million in the three months ended March 31, 2026, compared to the prior year period. The increase was primarily driven by: (i) a reduction in the deployment of field replacement units, contributing to cost savings of $3.2 million, (ii) a $9.4 million increase in revenue from maintenance contracts associated with our fleet of Energy Server systems, and (iii) our cost reduction efforts to proactively manage fleet optimizations. The increase was partially offset by a $1.6 million increase in product performance guarantee costs, reflecting the effects of fleet degradation.

Electricity Gross Profit

Electricity gross profit decreased by $13.0 million in the three months ended March 31, 2026, compared to the prior year period. This decrease was predominantly due to a one-time settlement of a customer contract after redeploying assets for our partner in the first quarter of fiscal year 2025.

Operating Expenses

(dollars in thousands)

Total Operating Expenses

Total operating expenses increased by $45.6 million in the three months ended March 31, 2026, compared to the prior year period, primarily driven by continued growth in operations and higher activity levels to support increased customer demand. The increase was mainly attributable to higher employee compensation and benefits of $28.9 million, largely reflecting increased stock‑based compensation, as well as increased consulting and professional services costs of $8.5 million related to AI data center power programs and expanded research and development activities.

Research and Development

Research and development expenses increased by $16.2 million in the three months ended March 31, 2026, compared to the prior year period. This overall increase was primarily driven by (i) an increase in employee compensation and benefits of $9.6 million, largely due to higher stock-based compensation, (ii) an increase in consumable laboratory supplies and other laboratory-related costs of $5.5 million, reflecting expanded research activities, (iii) an increase in consulting, advisory and other professional services costs of $0.4 million, predominantly due to third‑party engineering, certification, and regulatory support for scaling our solid‑oxide platforms and for AI data‑center power programs, and (iv) an increase in amortization and depreciation expenses of $0.3 million.

Sales and Marketing

Sales and marketing expenses increased by $16.2 million in the three months ended March 31, 2026, compared to the prior year period. The increase was primarily driven by (i) an increase in employee compensation and benefits of $11.0 million, predominantly due to higher stock-based compensation, (ii) an increase in consulting, advisory and other professional services costs of $4.1 million, due to our efforts to continue to expand our portfolio of AI data-center power programs, and (iii) an increase in travel and entertainment expenses of $0.5 million, due to higher in-person engagement and event participation.

General and Administrative

General and administrative expenses increased by $13.2 million in the three months ended March 31, 2026, compared to the prior year period. This increase was primarily driven by (i) an increase in employee compensation and benefits of $8.2 million, primarily due to higher stock-based compensation expenses, (ii) an increase in consulting, advisory and other professional services costs of $4.0 million, reflecting higher external legal and related professional services, (iii) an increase in facilities costs of $2.3 million, predominantly due to an increase in utility and rental costs, and (iv) an increase in computer equipment costs of $1.9 million, driven by higher spending on hardware and software maintenance. The overall increase was partially offset by a decrease in other operating expenses of $4.0 million.

Stock-Based Compensation

(dollars in thousands)

Total stock-based compensation for the three months ended March 31, 2026, increased by $24.8 million, compared to the prior year period, and the increase was predominantly related to an increase of stock-based compensation related to PSUs and RSUs of $14.4 million, and an increase in stock-based compensation costs related to the 2018 ESPP of $2.0 million, partially offset by a decrease of stock-based compensation costs related to stock options of $0.1 million, and a $8.5 million consisting of capitalized stock-based compensation expenses and stock-based compensation cash component. The increase was primarily driven by (i) new awards for our executive officers, (ii) an increase in Bloom’s share price, and (iii) an increase in contributions to 2018 ESPP.

Other Income and Expense

(in thousands)

Interest Income

Interest income comes from investment earnings on our cash balances, mainly in money market funds. For the three months ended March 31, 2026, it increased by $12.0 million compared to the prior year period, largely due to refinancing debt to a 0% coupon to 2030, which added $2.4 billion to average cash balances in our money market funds during the period.

Interest Expense

Interest expense is primarily due to our debt held by third parties and interest expense related to managed services agreements.

Interest expense decreased by $5.8 million for the three months ended March 31, 2026, compared to the prior year period, primarily due to lower interest expense on our outstanding debt. The decrease was mainly attributable to (i) reductions of $3.0 million related to the 3% Green Notes due June 2029 and $5.2 million related to the 3% Green Notes due June 2028, both resulting from the induced conversion of these notes during the fourth quarter of fiscal year 2025 (see Part II, Item 8, Note 8—Outstanding Loans and Security Agreements, section Induced Conversions of the Existing Notes in our 2025 Form 10-K), and (ii) a $1.0 million reduction in interest expense following the settlement of the 2.5% Green Notes in August 2025 (see Part II, Item 8, Note 8—Outstanding Loans and Security Agreements, section 2.5% Green Notes Settlement in our 2025 Form 10-K). These decreases were partially offset by $3.0 million of debt issuance costs associated with the 0% Notes issued on November 4, 2025, and $0.6 million of amortization of issuance costs related to our revolving credit facility entered into on December 19, 2025 (see Part II, Item 8, Note 8—Outstanding Loans and Security Agreements, section Revolving Credit Facility in our 2025 Form 10-K).

Equity in Loss of Unconsolidated Affiliates

During the year ended December 31, 2025, the Company and Brookfield entered into joint venture structures. Brookfield is considered the principal owner, and accounts for the JVs on a consolidated basis. For the three months ended March 31, 2026, Equity in loss of unconsolidated affiliates reflects (i) the ASC 323, Investments—Equity Method and Joint Ventures elimination of intra‑entity profit on sales to joint ventures formed with Brookfield—deferred and recognized over the assets’ depreciable lives—and (ii) the Company’s equity pickup of those joint ventures’ net results under the HLBV method. For details, refer to Part II, Item 1, Note 7—Investments in Unconsolidated Affiliates in this Quarterly Report on Form 10-Q.

Other Income, Net

Other income, net is primarily derived from foreign currency transactions and other income related to managed services transactions. Other income, net for the three months ended March 31, 2026, improved by $4.1 million, compared to the prior year period, primarily as a result of $6.9 million other income related to managed services transactions, partially offset by an increase in loss from foreign currency transactions of $2.6 million.

Gain (Loss) on Revaluation of Embedded Derivatives

Gain (loss) on revaluation of embedded derivatives is derived from the change in fair value of our sales contracts of embedded Escalation Protection Plan derivatives valued using historical grid prices and available forecasts of future electricity prices to estimate future electricity prices. Gain (loss) on revaluation of embedded derivatives for the three months ended March 31, 2026, compared to the prior year period, was not material.

Income Tax Provision

(dollars in thousands)

Income tax provision consists primarily of income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance for domestic deferred tax assets, including net operating loss and certain tax credit carryforwards. The income tax provision for the three months ended March 31, 2026, was driven primarily by changes in effective tax rates on income earned by international entities.

Net Income Attributable to Noncontrolling Interests

(dollars in thousands)

Net income attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as consolidation of a variable interest entity (“VIE”).

Net income attributable to noncontrolling interests for the three months ended March 31, 2026, compared to the prior year period, increased by $2.6 million due to an increase in income allocated to our noncontrolling interest related to Korean JV, our consolidated VIE.

Critical Accounting Policies and Estimates

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United States (“U.S. GAAP”). The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our discussion and analysis of our financial results under Results of Operations above are based on our results of operations, which we have prepared in accordance with U.S. GAAP. In preparing these condensed consolidated financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses, and net income. On an ongoing basis, we base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are representative of estimation uncertainty and are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating the consolidated financial condition and results of operations.

The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, include:

• Revenue Recognition;
• Income Taxes; and
• Principles of Consolidation.

Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation, section Critical Accounting Estimates in our 2025 Form 10-K provides a more complete discussion of our critical accounting policies and estimates. During the three months ended March 31, 2026, there were no significant changes to our critical accounting policies and estimates.

There were no significant changes to our quantitative and qualitative disclosures about market risk during the three months ended March 31, 2026. Please refer to Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk included in our 2025 Form 10-K for a more complete discussion of the market risks we consider.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Accounting Officer (our principal financial officer) as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Accounting Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2026. Based on such evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that as of March 31, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2026, there were no changes in our internal control over financial reporting, which were identified in connection with management’s evaluation required by paragraphs (d) of Rules 13a-15 and 15d-15

under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For further information on inherent limitations on effectiveness of internal controls and management’s report on internal control over financial reporting, see Part II, Item 9A, Controls and Procedures in our 2025 Form 10-K.