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Ideal Power (IPWR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 13, 2026

Source: earnings call transcript

Executive summary

Ideal Power Q2 FY26 — Commercial Momentum Builds with Key Prototype Deliveries and Foundry Agreement

Ideal Power continued to build commercial momentum in Q2 FY26, advancing key prototype developments for AI data centers and EV applications, and securing a crucial long-term foundry agreement. The company's sales funnel expanded significantly, supported by a strengthened balance sheet from a recent capital raise. Management is focused on converting these opportunities into production orders amidst increasing operating expenses and cash burn.

Highlights

5

  • Finalizing low current SSCB prototype for lead Asia customer, targeting Q4 2026 availability for 800-volt AI data centers and initial low-volume orders.

  • Co-developing intelligent SSCB prototype with an industry partner for U.S. hyperscaler evaluation, targeting delivery by end of Q4 2026 for NVIDIA Rubin Ultra 800-volt DC data centers.

  • Secured a long-term supply agreement with an automotive-qualified high-volume wafer foundry in Asia, achieving functional first silicon.

  • Sales funnel grew to over $400 million in total revenue opportunity, up from $300 million in mid-May.

  • Cash and cash equivalents totaled $41.3 million at June 30, 2026, following a $27.7 million net proceeds capital raise.

Concerns

4

  • Deliverables for Stellantis EV contactor impacted timing, though expectations for the opportunity remain unchanged.

  • Q2 FY26 cash burn was $2.5 million, flat YoY, and expected to increase to $2.7 million to $2.9 million in Q3 FY26 and $10.3 million to $10.5 million for full-year FY26.

  • Operating expenses increased to $3.6 million in Q2 FY26 from $3.1 million in Q2 FY25, driven by higher stock-based compensation, personnel costs, and patent impairments.

  • Net loss in Q2 FY26 was $3.4 million, compared to $3.0 million in Q2 FY25.

Guidance & targets

CategoryTargetConfidence
SSCB prototype availability and initial low-volume orders
Q4 2026
medium materiality
High
Intelligent SSCB prototype delivery
End of Q4 2026
medium materiality
High
Industrial reliability testing and qualification completion
Q4 2026
medium materiality
High
Q3 FY26 cash burn
$2.7 million to $2.9 million
high materiality
High
Full-year FY26 cash burn
$10.3 million to $10.5 million
high materiality
High
Operating expenses
Increase modestly
medium materiality
Medium

Product announcements

ProductTypeDetails
SSCB reference design kit (RDK)launch

Deals & partnerships

Lead Asia customer Finalizing low current solid-state circuit breaker (SSCB) prototype development for internal testing.

Let me start with our lead Asia customer. We're finalizing our low current solid-state circuit breaker or SSCB prototype development for shipment to the customer later this month for their internal testing. B-TRAN-enabled SSCB prototypes are expected to be available from this customer for their 800-volt AI data center and energy grid customers in the fourth quarter of 2026. With initial low-volume orders to support the prototype builds also expected in the fourth quarter.

Industry partner (unnamed) Co-development of a B-TRAN-enabled intelligent SSCB prototype for evaluation by a U.S. hyperscaler for NVIDIA Rubin Ultra 800-volt DC data center power system.

under the letter of intent we signed in the second quarter, we advanced our co-development with an industry partner on a B-TRAN-enabled intelligent SSCB prototype for a planned evaluation by U.S. hyperscaler in its development for the NVIDIA Rubin Ultra 800-volt DC data center power system. We're targeting prototype delivery by the end of the fourth quarter of 2026.

Stellantis Delivery of Gen 2 B-TRAN custom packaging samples and development kits for evaluation for EV contactor opportunity.

Third, we delivered a second set of Gen 2 B-TRAN custom packaging samples and development kits to Stellantis for their evaluation. We are working closely with the customer on a detailed analysis of our solid-state contactor system-level specification to optimize the solution and align the remaining deliverables under the purchase order.

High-volume wafer foundry in Asia (unnamed) Long-term supply agreement for wafer manufacturing. long-term

we achieved an important operational milestone. We entered into a long-term supply agreement with a high-volume wafer foundry in Asia, not China, and achieved functional first silicon after initiating discussions with them in the first quarter of this year. This is an automotive-qualified fab that has built more than 1 billion power semiconductors.

Dr. Sanjay Parthasarathi (Coherent Corporation) Appointment to newly formed Advisory Board.

Our newly formed Advisory Board now includes its first member, Dr. Sanjay Parthasarathi, Chief Marketing Officer of Coherent Corporation, a key supplier for AI data center infrastructure.

Risks & headwinds

Timing of Stellantis EV contactor deliverables impacted

impacted the timing of our expected completions of deliverables under the PO

Mitigation:it is not delayed or otherwise impacted our expectations regarding the EV contactor opportunity with Stellantis. The deliverables we've completed support the next project milestone scheduled for the fourth quarter of 2026. We will work to promptly complete future deliverables as they are agreed with the customer to support subsequent project milestones.

Increased cash burn Q3 FY26, FY26

Q3 FY26 cash burn expected to be "$2.7 million to $2.9 million"; Full-year FY26 cash burn expected to be "$10.3 million to $10.5 million" (up from $9.6 million in FY25).

Mitigation:Even with the flexibility provided by our recent capital raise, we will continue to manage expenses prudently and aggressively.

Increased operating expenses Q2 FY26, coming quarters

"$3.6 million in Q2 FY26 compared to $3.1 million in Q2 FY25"

Mitigation:The increase was driven primarily by higher stock-based compensation expense, personnel costs and noncash patent impairments... We expect operating expenses to increase modestly in the coming quarters due to growth in our sales and engineering teams to support our commercialization efforts as well as our growing number of customer engagements.

What to watch in Q3 FY26

Lead Asia customer SSCB prototype availability and initial orders

Q4 FY26
Current Finalizing prototype development for shipment later this month.
Target Prototypes available and initial low-volume orders in Q4 2026.

Why it matters

This represents the first potential revenue from a key customer in the AI data center market.

B-TRAN-enabled SSCB prototypes are expected to be available from this customer for their 800-volt AI data center and energy grid customers in the fourth quarter of 2026. With initial low-volume orders to support the prototype builds also expected in the fourth quarter.

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Q&A highlights

How do hyperscalers engage with component suppliers like Ideal Power, and what's the typical evaluation timeline for new technology in data centers?

Hyperscalers vary in their engagement, some preferring system-level integration over component-level. Ideal Power aims to provide system-level solutions with intelligence for power optimization. The evaluation timeline is driven by the anticipated 800-volt DC data center evolution starting H2 next year, requiring alignment with that aggressive schedule.

“It's more of the personality of the hyperscalers. They're each involved at different levels depending on how they work with their partners that are supplying different components and systems that are deployed in the data center... The evaluation time line if it's going to be used early in that environment would have to line up with that schedule.”

asked by Casey Ryan · answered by David Somo

1 min read 5 chapters

Detailed narrative

AI Data Center Opportunity

Ideal Power is actively developing B-TRAN-enabled Solid-State Circuit Breakers (SSCBs) for the rapidly evolving 800-volt DC architectures in AI data centers. Prototypes are being finalized for a lead Asia customer and co-developed with an industry partner for a U.S. hyperscaler, targeting Q4 2026 delivery and initial low-volume orders. The company is also introducing SSCB reference design kits to accelerate adoption among traditional electromechanical breaker suppliers.

Automotive Progress with Stellantis

The company delivered Gen 2 B-TRAN custom packaging samples to Stellantis, with ongoing detailed analysis to optimize the solid-state contactor system. While this has impacted the timing of deliverables, management remains confident in the EV contactor opportunity, with the next project milestone scheduled for Q4 2026. European sales efforts have also led to new engagements with automakers and Tier 1 suppliers.

Supply Chain and Manufacturing Scale

Ideal Power secured a long-term supply agreement with a high-volume, automotive-qualified wafer foundry in Asia, achieving functional first silicon. This agreement is crucial for supporting high-volume industrial and automotive customers at a cost structure that aligns with targeted gross margins of 40%+. This provides confidence to customers regarding future supply.

Sales Funnel Expansion and Commercialization Focus

The total sales funnel has grown significantly to over $400 million, split evenly between automotive and AI data centers/industrial applications. The company is prioritizing industrial reliability testing and qualification, aiming for completion in Q4 2026, to support near-term revenue opportunities in AI data centers and energy infrastructure.

Financial Strengthening and Prudent Management

Ideal Power successfully raised $27.7 million in net proceeds, boosting cash and cash equivalents to $41.3 million at June 30, 2026, and maintaining a debt-free balance sheet. Despite an expected increase in cash burn for Q3 and full-year FY26 due to sales and engineering team expansion, the company emphasizes prudent expense management.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.