Fluence Energy (FLNC) Q3 FY26 earnings call: guidance and Q&A

Fluence Energy revised its full-year 2026 revenue guidance midpoint down by $400 million to $3 billion and adjusted EBITDA midpoint to negative $10 million, a $60 million reduction. These revisions are primarily attributed to production delays at two new contract manufacturing facilities. Specifically, the Houston facility experienced construction and automation delays, pushing its full production ramp to Q1 FY27. An international facility in China faced initial quality issues requiring rework, though it has since achieved full production in Q4 FY26. The slower ramp-up compressed the timeline for Q4 production, shifting a portion of planned 2026 deliveries into fiscal 2027.

Despite operational headwinds, Fluence reported a record $1.44 billion in new orders during Q3 FY26, nearly tripling the $509 million from the same period last year. This strong order intake contributed to a record backlog of $6.4 billion as of June 30, 2026, representing a 14% sequential increase and over 30% year-over-year growth. The company expects Q4 FY26 orders to reach another record level, driven by robust demand and its competitive position. Utilities and Independent Power Producers (IPPs) accounted for approximately 90% of year-to-date orders.

Fluence made significant inroads into the data center market, securing its first deal with a data center developer for $300 million and an additional $550 million in awards from a hyperscaler in July. The data center pipeline has grown to 16 gigawatt hours, a 35% increase from Q2 FY26, comprising projects from both hyperscalers and developers. The sales cycle for data center developers was notably faster, converting from lead to order in less than three months, driven by a focus on speed-to-power solutions. Hyperscalers prioritize quality of power solutions, where Fluence's offerings also stand out.

To address scaling challenges and meet growing demand, Fluence is expanding its supply chain capacity with new contracted manufacturing facilities. The Houston facility, once fully operational in Q1 FY27, is expected to provide 15 gigawatt hours per year of fully U.S.-made products, significantly expanding domestic content capacity. To strengthen execution, Roman Lewsen was appointed to lead supply chain, and Peter Williams will focus on product development, both reporting directly to the CEO. These organizational changes aim to transform manufacturing processes and ensure alignment with the company's larger scale.

Fluence attributes its market success to the density, safety, and reliability of its SmartStack platform, combined with its proprietary operating system. This software enables efficient load management, fast response times, and remote operation, which are particularly valuable for data center customers. SmartStack has gained favor, representing 75% of year-to-date orders. The company announced SmartStack 10, an evolution that increases unit density from 7.5 MWh to 10 MWh, demonstrating its ability to adapt to evolving customer needs and maintain a competitive edge.

The company ended Q3 FY26 with total liquidity of $863 million, including $365 million in cash. Management expects total liquidity to return to $900 million by fiscal year-end, supported by execution on its project backlog. To sustain growth from record order intake, Fluence anticipates requiring an additional $300 million to $500 million in working capital over the coming year, indicating a disciplined approach to financing for profitable growth.