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    EROC
    Earnings call· Jun 2026(Q2 FY26)

    ERock Q2 FY26 earnings call EROC

    Aug 12, 2026 Source

    Executive summary

    ERock Q2 FY26 — Record Backlog and Strong Data Center Momentum

    ERock, a recent IPO, reported record backlog and strong commercial traction in Q2 FY26, particularly within the AI and data center ecosystem, with its pipeline growing over 3x. The company is scaling its assembly capacity and expects to turn adjusted EBITDA positive in H2 FY26, leveraging its capital-light model and significant liquidity.

    Highlights

    5

    • Total backlog increased 10x year-over-year to a record $1.7 billion, including a $400 million quarter-over-quarter increase.

    • Secured a significant 470-megawatt contract with Anthropic, a leading AI research company.

    • Annual assembly capacity at the new Hyperion facility is targeted to reach 1.2 gigawatts by year-end 2026 with only $15 million in additional capital.

    • Pipeline grew over 3x in Q2, driven by investments in the AI ecosystem.

    • Strong liquidity with $627 million in unrestricted cash and no outstanding debt post-IPO.

    Concerns

    3

    • Net loss was $67.7 million, primarily due to a non-recurring $48.8 million loss on debt extinguishment related to the IPO.

    • Adjusted EBITDA was negative $14 million, compared to negative $12.4 million in Q1.

    • Ongoing services revenue decreased 15% sequentially to $13.3 million due to non-recurring campaign work in Q1.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $435 million to $465 million
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $3 million to $9 million
    high materiality
    High
    Backlog Conversion to 2026 Revenue
    $360 million to $390 million
    medium materiality
    High
    Backlog Conversion to 2027 Revenue
    Much of the remainder
    medium materiality
    High
    Production Capacity
    Sold out through 2027 and into 2028
    high materiality
    High
    Hyperion Facility Annual Assembly Capacity
    1.2 gigawatts
    medium materiality
    High

    Operational metrics

    32
    Total Revenue
    $39.9 millionup 26% sequentially
    Q2 FY26

    Compared to $31.7 million in Q1.

    Power System Sales Revenue
    $26.5 millionup 67% from Q1
    Q2 FY26

    Driven by more generator deliveries and installation work.

    Ongoing Services Revenue
    $13.3 milliondown 15% sequentially
    Q2 FY26

    Due to some campaign work performed in Q1 that did not recur.

    Gross Profit
    $7.4 million
    Q2 FY26

    Represents a gross margin of 18.6%.

    Gross Margin
    18.6%
    Q2 FY26

    Calculated from $7.4 million gross profit on $39.9 million revenue.

    Adjusted Gross Margin
    22.2%
    Q2 FY26

    Excludes pass-through revenues and costs in ongoing services.

    Net Loss
    $67.7 millioncompared to $17.2 million in Q1
    Q2 FY26

    Includes a $48.8 million non-recurring loss on debt extinguishment.

    Loss on Debt Extinguishment
    $48.8 million
    Q2 FY26

    Non-recurring, related to conversion of convertible notes and repayment of $30 million term loan with IPO proceeds.

    Adjusted EBITDA
    -$14 millioncompared to -$12.4 million in Q1
    Q2 FY26

    Expected to turn positive in H2 2026.

    Total Class A Equivalent Shares
    272 million
    Q2 FY26

    Represents Class A, Class B, and Class M shares on a fully exchanged basis.

    IPO Gross Proceeds
    $400 million
    Q2 FY26

    From primary offering of 27.9 million shares at $21.50 per share.

    IPO Net Proceeds
    $369 million
    Q2 FY26

    After paying underwriter fees and other offering costs.

    Unrestricted Cash
    $627 million
    as of June 30

    Strong liquidity post-IPO.

    Restricted Cash
    $34 million
    as of June 30

    Part of total liquidity.

    Undrawn Credit Facility
    $250 million
    Q2 FY26

    Provides additional liquidity.

    Outstanding Debt
    0
    Q2 FY26

    No outstanding debt post-IPO.

    Year-to-Date Capital Expenditures
    $9 million
    YTD Q2 FY26

    Includes $7 million towards the Hyperion facility.

    CapEx towards Hyperion Facility (YTD)
    $7 million
    YTD Q2 FY26

    Portion of YTD CapEx allocated to the Hyperion facility.

    Services Renewal Rate
    100%
    Q2 FY26

    Demonstrates customer value in O&M services.

    RockBlock Fast-Start Capability
    10 secondsvs 45+ seconds for competitors
    Q2 FY26

    Time to take full electrical load.

    RockBlock Emissions Reduction
    99%cleaner than diesel
    Q2 FY26

    Meets California CARB DG standard.

    RockBlock Footprint Reduction
    50%compared with similar natural gas units
    Q2 FY26

    Patented design reduces physical space required.

    California DWR Deployment Speed
    50 MWinstalled in 2 days
    Q2 FY26

    Demonstrates speed and repeatability of modular design.

    Pipeline Growth
    3xvs Q1
    Q2 FY26

    Driven by investments in the AI ecosystem.

    Gas Turbine Lead Times
    over 4 years
    Q2 FY26

    Extended lead times creating demand for ERock's solutions.

    Interconnection Queue Times
    over 7 years
    Q2 FY26

    Extended queue times accelerating speed to power needs.

    Assembly Facility Ramp-up Time
    12 months
    Q2 FY26

    Time to ramp up a new facility to 1.2 GW annual capacity.

    Capacity Expansion Trigger
    65%
    Q2 FY26

    Threshold of contracted capacity that triggers consideration for assembly expansion.

    El Paso Electric Project Commissioning Time
    15 months4 years faster than grid
    Q2 FY26

    Time to commission the 366 MW data center project.

    Installed Capacity
    over 1 gigawatt
    Q2 FY26

    Total installed capacity across operational sites.

    Reliability
    99.999%
    Q2 FY26

    Reliability across operational sites over 15 years.

    IPO Shares Priced
    27.9 million
    June 11

    Class A common stock priced during the IPO.

    Industry KPIs

    4
    MetricValueDetails
    Orders bookings growth3xmultiple
    Gigawatts under contract1.2 GWGW
    Backlog by segment end market$1.7BUSD
    Data center exposure pipeline470 MWMW

    Orderbook & backlog

    5
    Total Contracted Power System Sales Backlog$1.7 billionend of Q2 FY26

    up 10x YoY, up $400 million QoQ

    Majority expected to convert to revenue by end of 2027; $360M-$390M expected in 2026.

    Anthropic Contract Capacity470 megawattsQ2 FY26

    new order

    Equipment purchase agreement only; installation and service agreements expected to follow.

    El Paso Electric Project Capacity366 megawattsQ2 FY26

    Construction commenced; commissioning expected in approximately 15 months.

    California DWR Deployment Capacitynearly 150 megawattsQ2 FY26

    Operational for more than 2 years; deployment less than 1 year from contract signing to first commercial operation.

    Production Capacity Sold OutThrough 2027 and into 2028Q2 FY26

    Indicates strong demand and limited immediate availability for new orders.

    Product announcements

    3
    ProductTypeDetails
    Hyperion Facilityexpansion
    RockBlock Generatormilestone
    Granite Software Platformupdate

    Deals & partnerships

    3
    AnthropicEquipment purchase agreement for generation capacity for a new data center.470 megawatts

    Anthropic selected ERock to ensure power supply certainty for their quickly growing compute needs. Installation and service agreements are typically negotiated and signed separately and are expected to follow.

    El Paso Electric, Meta366-megawatt project supporting Meta's data center campus in El Paso.366 megawatts

    El Paso Electric purchased ERock's systems to close a 5-year grid interconnection gap for Meta's data center. Commissioning is expected in 15 months, about 4 years faster than waiting on the grid.

    California Department of Water ResourcesNearly 150-megawatt deployment for grid support.nearly 150 megawatts

    Marked ERock's first project in California. Deployment was less than 1 year from contract signing to first commercial operation. Systems have been operating for more than 2 years, supporting the California grid during periods of high demand.

    Capital programs

    1
    Hyperion Facility Expansionunderway$15 million
    Period spend: $7 million
    Spent to date: $7 million
    Start: Q2 FY26

    Benefit: 1.2 gigawatts annual assembly capacity

    Transitioned generator assembly into the new facility. $7 million of YTD CapEx was towards this facility, with less than $10 million additional CapEx to fully build out. The $15 million is for additional capital to reach the 1.2 GW target.

    Risks & headwinds

    4
    Supply Chain Constraints for Traditional Generation

    Gas turbine lead times over 4 years; interconnection queues over 7 years.

    Mitigation: ERock's vertically integrated platform and capital-light model offer a faster solution; focus on aligning supply chain partners with long-range forecasts.

    Regulatory Delays (Texas Batch Zero Process)

    Slight delay in the Batch Zero process expected.

    Mitigation: ERock's ultra-low emissions, no water use, and grid-supporting gensets are aligned with regulatory concerns; customers are also aligned with Governor Abbott's comments.

    Lag in Realization of Higher Gross Margins2028 and beyond

    Impact of higher gross margins from current negotiations will be seen in 2028 and beyond.

    Mitigation: Company is sold out through 2027 and into 2028, indicating strong long-term demand and pricing power.

    Variability in Ongoing Services RevenueQ2 FY26

    Ongoing services revenue decreased 15% sequentially to $13.3 million.

    Mitigation: Due to non-recurring campaign work in Q1; company forecasts a baseline of activity but acknowledges some quarters will have revenue increases due to corrective maintenance or campaigns.

    What to watch in Q3 FY26

    5

    Adjusted EBITDA

    H2 FY26
    Current-$14M (Q2 FY26)
    TargetPositive

    Why it matters

    Key indicator of profitability as the company scales deliveries and ramps Hyperion facility.

    As implied by guidance, which I'll speak to in a few moments, we are expecting to turn EBITDA positive in the second half of 2026 as we ramp up deliveries against our meaningfully larger backlog and realize increased production from our new Hyperion facility.

    Q&A highlights

    6

    Can you provide more color on the backlog and pipeline, specifically distinguishing firm orders from those waiting to firm up, and discuss the evolution of quoting activity and customer interest, especially given pushback to data centers?

    Management confirmed strong demand, 3x pipeline growth from Q1 to Q2, and significant momentum with new logo development in the data center ecosystem. They noted Anthropic is a new generator-only deal, but they are also seeing additions to existing EPC/O&M contracts. They highlighted strong momentum in utility and C&I segments, with utilities recommending ERock to hyperscalers. The contracted backlog is firm, and other opportunities continue to grow alongside it.

    “our pipeline is up 3x, and that's from 1Q to 2Q, and we see that continuing to grow.”

    asked by Angel Castillo Malpica · answered by John Carrington

    2 min read6 chapters

    Detailed Narrative

    01

    Market Opportunity & Differentiated Solution

    ERock highlighted the robust market driven by AI demand, aging grid, and extended lead times for traditional generation (gas turbines over 4 years, interconnection over 7 years). Their vertically integrated solution, including proprietary RockBlock generators and Granite software, offers fast-start, low-emission, modular power systems that outperform competitors in transient📎 response and can take full electrical load in 10 seconds.

    02

    El Paso Electric & Meta Partnership

    The company detailed its partnership with El Paso Electric and Meta for a 366-megawatt data center, where ERock's solution will commission in 15 months, 4 years faster than grid interconnection. This project demonstrates the multi-use case of their assets, serving as bridge power and then transitioning to a grid-supporting asset, offering lower costs for ratepayers.

    03

    Commercial Momentum & Pipeline Growth

    ERock reported a 3x growth in its commercial pipeline in Q2, driven by increased resources focused on the AI ecosystem. The Anthropic contract for 470 megawatts is a key win, reinforcing demand for rapid, reliable on-site power solutions for large-scale data centers. The company is also seeing strong momentum in utility and C&I segments.

    04

    Operational Scaling & Capital-Light Model

    The transition to the new Hyperion facility in Houston is expected to increase annual assembly capacity to 1.2 gigawatts by year-end 2026 with only $15 million in additional capital. The company emphasizes its capital-light assembly model, allowing quick capacity scaling (12 months for a new facility) and favorable working capital dynamics through upfront and milestone payments.

    05

    Utility Partnerships & Regulatory Landscape

    ERock is seeing increased interest from utilities, particularly in the last 6 months, driven by load growth and speed-to-power concerns. The company's low-emission, water-free, and grid-supporting assets are well-positioned for evolving regulatory environments, including discussions around partial load approvals in Texas, where ERock believes it's a good fit.

    06

    Technology & Services Focus

    The company continues to invest in its proprietary Granite software for predictive diagnostics and remote monitoring, and in R&D for its RockBlock generator to enhance efficiency and robustness. Their services renewal rate is 100%, demonstrating customer value and contributing to recurring revenue, with long-term contracts typically ranging from 5 to 15 years.

    AI-generated summary of the company’s earnings call. Not investment advice.