Bloom Energy Q3 2026 Earnings Call Transcript

Bloom Energy (NYSE:BE) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Bloom Energy Corporation reported a record third quarter with revenue of $1.24 billion, up 138% year-over-year, and operating income of $286 million, marking a 500% increase year-over-year.

The company revised its full-year revenue guidance upward, now projecting over 120% year-over-year growth, attributing this to strong customer demand and expanding backlog.

Strategic wins include a significant project with the U.S. Army and a 700 MW carbon capture project with AEP for Google, highlighting Bloom’s technology viability and market expansion in carbon capture and distributed energy solutions.

Bloom Energy emphasized its role in addressing the increasing electricity demand driven by AI and other sectors, projecting that on-site power will become more prevalent as grid infrastructure struggles to meet concentrated power needs.

The company highlighted ongoing investments in capacity and innovation, with capital expenditures reaching $231 million year-to-date, ensuring support for future growth while maintaining a strong balance sheet.

Management expressed confidence in Bloom’s ability to capitalize on global demand for sustainable and reliable power solutions, with significant opportunities in carbon capture and 800 VDC markets.

Full Transcript

OPERATOR

Hello everyone. Thank you for joining us and welcome to Bloom Energy’s third quarter 2026 earnings call. After today’s prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star-one to raise your hand. To withdraw your question, press star-one again. I will now hand the call over to Michael Tierney. Please go ahead.

Michael Tierney (Investor Relations)

Thank you and good afternoon everybody. Thank you for joining us for Bloom Energy’s third quarter 2026 earnings call. To supplement this conference call, we finished our third quarter 2026 earnings press release and Supplemental Financial Information with the SEC on Form 8-K and have posted these materials, which we will reference throughout this call, to our Investor Relations website. During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These include statements about the company’s business results, products, markets, customers, strategy, financial position, liquidity, and full-year outlook for 2026. These statements are predictions based upon our expectations, estimates, and assumptions.

However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties, as discussed in detail in our documents filed with the SEC, including our most recently filed Forms 10-K and 10-Q. We assume no obligation to revise any forward-looking statements made on today’s call. During this call and in our third quarter 2026 earnings press release and Supplemental Financial Information, we refer to GAAP and non-GAAP financial measures. The non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in these materials, which are available on our Investor Relations website.

Joining me on today’s call are K.R. Sridhar, Founder, Chairman and Chief Executive Officer, and Simon Edwards, our Chief Financial Officer. KR will begin with an overview of our progress and then Simon will review financial highlights for the quarter. After our prepared remarks, we will have time to take your questions. I will now turn the call over to K.R.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Good day everyone. At the end of September, as we were closing out another record quarter, I celebrated Bloom’s 25th anniversary and our inclusion in the S&P 500 by ringing the opening bell at the New York Stock Exchange, surrounded by many of our manufacturing team members. Our mission has not changed in a quarter of a century: providing clean, reliable, accessible, and affordable power for everyone. After all, in our modern age, electric power is essential to economic and physical well-being and to human dignity and happiness.

The last time Bloom rang the bell was eight years ago for our IPO. Then we were seen by the market as a niche provider of electricity. Now we are seen as a standard for on-site power critical to powering the AI revolution. I’m confident that eight years from now we will look back and understand that Bloom led the first major architectural change in the history of the 150-year-old power industry. Fuel cell-based on-site power will become a preferred choice and complement to the grid for power delivery across all industries and geographies.

Countries with insufficient grid infrastructure will leapfrog to distributed on-site power, just as developing countries bypassed landlines and directly adopted cell phones. Hyperscalers have been the first to embrace on-site power. They need power rapidly and at large scale. Some individual data centers use more power than some small states, but the grid was designed to provide power that was evenly distributed across a very large number of customers spread over large areas. It is overwhelmed by the concentrated and huge power needs of data centers. Mandated cost-plus rate designs and utility franchise laws have exacerbated this problem.

By design, they do not incentivize regulated utilities to innovate or create efficiency. Flat electricity demand over two decades prior to AI led to lack of investment and much-needed upgrades. The speed and scale of the AI revolution made the grid shortcomings obvious. Hyperscalers scrambled to find any available grid power and soon realized that bringing their own on-site power was the path forward. Bloom quickly emerged as a standard solution.

It is community-friendly and more secure. The redundant, fault-tolerant, and distributed architecture offers higher availability. It’s always on and resilient to natural disasters, cyber and physical attacks. It eliminates the need for backup generators and we win on total cost of ownership, safety, access, speed, and sustainability with a clear path to net zero emissions. Now the same forces that pushed hyperscalers are driving broad swaths of the electricity market towards on-site power.

One quarter of all commercial and industrial facilities in the U.S. expect to be fully powered on-site by 2030. According to our recent power survey of over 200 CNI businesses across 15 unique segments, 35% of facilities expect to be fully powered on-site by 2035. Going forward, electrification and digitization, population growth and automation will mean that factories and businesses will consume large amounts of power and require very high reliability. In fact, the IEA projects global electricity demand to increase 40% by 2035. The grid is ill-suited to either rapidly scale or power concentrated loads with high reliability. Just as it’s struggling to power AI factories, Bloom will become the solution of choice for this large segment of the market.

We will be a leader in enabling the electricity market to capture the new global demand and grow annually to about US$6 trillion in the next decade, up from about $3 trillion today. So after 25 years we are just getting started. Now our growth is accelerating. There is better understanding for the value we provide and widespread recognition of our brand. We started our 2026 Q1 earnings call expecting a year-on-year revenue growth of 60%. Today we are upward revising that guidance and projecting over 120% year-on-year revenue growth, at the midpoint.

Our customer pipeline continues to grow and our backlog is continuing to expand faster than our revenue, with increasing diversity in customers, verticals, and geographies. We are delivering for our customers. Just 15 months ago we announced our first project with Oracle and delivered power to their Utah site in less than two months. We are achieving the same thing with NBS in New Jersey. We were able to get planning board approvals for our fuel cells within three months of signing the contract. Two months after these approvals we have the first block of power ready for customer use. Our business in this important segment is robust and growing rapidly.

Communities and policymakers recognize that we are clean and quiet. We are the best option for firm on-site power. For example, in our 2026 energy plan, Virginia Governor Abigail Spanberger explicitly called out non-combustion fuel cells and said, I quote, compared to the conventional gas-fired generation they produce substantially lower local emissions, reducing health impacts in nearby communities. This is significant because this is not just any jurisdiction.

Virginia is the home to most of the data centers in the world. It is also ground zero for the challenging relationship between data centers and communities. We applaud Governor Spanberger for recognizing the values that our non-combustion solutions bring to the table at this critical moment for both the data center industry and the communities they operate in. Here are five commercial wins from the quarter that exemplify how we are expanding our total addressable market. First, the U.S. Army has conditionally awarded our partner Indelible long-term leases to build and operate commercial power generation using Bloom Energy Servers at U.S. Army installations. The purpose is to enhance power security using our distributed and on-site architecture. We view securely powering military and civilian critical infrastructure such as bases, water treatment plants, hospitals, and airports as a growth opportunity.

Second, AEP revealed that 700 megawatts of carbon capture and sequestration-enabled Bloom Energy Servers will be used to provide Google with near net zero electricity in a first-of-its-kind project. Unlike turbines and engines, Bloom’s technology makes CCS viable at scale. CCS is critical to meeting decarbonization goals and is a potential trillion-dollar market opportunity for Bloom. Third, we have talked to you about our expanding footprint in the Rocky Mountain, Midwest, and Great Lakes regions.

Our value proposition has become competitive even in the American states with the lowest cost of power such as Texas, where we are shipping our first units this quarter. Fourth, we consider the utility relationships we are building as a channel to powering America forward through the power shortage. Many utilities are increasingly recognizing that our clean baseload generation asset, a Bloom Energy Server, when deployed at their distribution networks, is a faster and more economical way to fulfill power growth demand of their customers and enhance the distribution network stability and reliability.

I expect to see significant wins in our utility-related business, often called front-of-the-meter arrangements. Finally, the fifth, we are witnessing strong interest in deploying Bloom systems to meet rapidly growing power demand in many international markets. We are engaged with potential local partners in a few of these markets. We look forward to updating you soon on some wins. To summarize, Bloom is a solution of choice for community-friendly on-site power that is rapidly deployed, clean, reliable, and competitive. Our on-site solution is deployed to power gigawatt-scale intelligence factories, megawatt-scale inference data centers, factories, commercial businesses, and mission-critical infrastructure such as hospitals, telecom hubs, and essential services. The demand for Bloom’s on-site power is growing both domestically and internationally, and we are establishing strong partnerships.

This growth potential, in combination with future growth opportunities such as CCS and 800 VDC, points to Bloom capturing a large share of the growing electricity market. This conviction provides us with clarity on what our future looks like. It will require us to scale and execute to take advantage of this once-in-a-century opportunity. I have great confidence in my team and know that they are ready to take on this challenge. With that, let me turn it over to you, Simon, to walk us through the numbers.

Simon Edwards (Chief Financial Officer)

Thank you, KR, and good afternoon, everyone. As a reminder, I will focus on non-GAAP adjusted metrics. Reconciliations to GAAP are in our press release and supplemental materials. The third quarter was another record quarter for Bloom Energy. Revenue of $1.24 billion was up 138% year over year, and operating income of $286 million grew faster, still up over 500% year over year. On the strength of the quarter, we are raising our full-year outlook for revenue, operating income, and EPS for the third time this year.

Before turning to the details, it’s worth stepping back and looking at what we’ve accomplished so far this year. Year to date, revenue of $3.05 billion is already 50% above what we generated in all of 2025. Operating income in this quarter alone exceeded operating income for all of last year. That is the operating leverage embedded in our model now showing up in the results. Operating margin for the quarter expanded to 23.1% from 8.9% a year ago as revenue grew 138% while operating expenses grew only 26%.

As KR said, taking advantage of this once-in-a-century opportunity will require us to both scale and execute, and we are continuing to invest in our innovation and engineering roadmap, growth initiatives, and the infrastructure needed to support our scale. Year to date, capital expenditures were $231 million as we invest in capacity to support future growth and fund that investment from operations. Despite investing four times what we spent in all of 2025, our cash balance remains roughly in line with where we started this year.

Our margin structure gives us the ability to invest in scaling the business while preserving the strength of our balance sheet. That is the financial model we deliberately designed and put into operation, and it is performing to plan now. Turning to the details for the quarter, as I mentioned earlier, revenue for the quarter was $1.24 billion, up 138% year over year and 16% sequentially. Product revenue was $1.07 billion, up 179% year over year and 15% sequentially, crossing $1 billion in a quarter for the first time and representing 87% of total revenue. Product revenue is recognized when control transfers to the customer, so it is the direct measure of systems delivered and accepted in the quarter.

Service revenue was $67.6 million, up 15% year over year and roughly flat sequentially. Installation revenue was $84.9 million, up 29% year over year and 66% sequentially. Installation scope varies across customers and projects, with revenue recognized over time as the work progresses. As a result, installation and product revenue do not move together quarter to quarter, and installation revenue will fluctuate with the timing and mix of customer projects.

Turning to margins, product gross margin was 38.4%, up 250 basis points year over year and 120 basis points sequentially in a quarter when we were both ramping new production lines and expediting deliveries. That is a direct read on both our pricing strength and the cost reductions we are driving through the product. Services margin was 21.4%, up 700 basis points year over year and marking our second consecutive quarter above 20%. Total gross margin was 34.5%, up 412 basis points year over year, with expansion in both product and services partly offset by the timing of installation revenue in the mix.

Given these quarter-to-quarter mix movements, this is why we manage and guide gross margin on a full-year basis. Operating expenses for the quarter were $141 million, reflecting continued investment in our engineering roadmap, growth initiatives, and infrastructure. Operating income was $286 million, up over 500% year over year and 19% sequentially, and operating margin was 23.1%, up 60 basis points sequentially. Adjusted EBITDA was $299 million, representing 24% of revenue and an expansion of 1,286 basis points year over year. Non-GAAP diluted EPS was $0.94 compared with $0.15 a year ago.

GAAP diluted EPS was $0.78 compared to a loss of $0.10 a year ago. Turning to cash, cash flow from operations in the quarter was a use of $27 million. Net income was more than offset by an increase in working capital driven primarily by inventory, contract assets, and receivables as we supported the significant growth in the business and built inventory for future deliveries. As I noted earlier, product revenue is recognized when control transfers to the customer; billing follows contract milestones that can occur in a different quarter.

As a result, cash collection can follow revenue recognition, with the difference reflected in contract assets and receivables until billed and collected. The timing of large deliveries and related cash collections will vary from quarter to quarter, and those differences even out over time. We expect to continue investing in working capital to support future growth and scale alongside our customers. Capital expenditures were $153 million in the quarter and $231 million year to date, driven primarily by investments in machinery and production capacity to support expansion within our existing Fremont and Newark facilities. Adding capacity in these increments means our capital spending tracks demand as we see it rather than running ahead of it. Free cash flow was a use of $181 million in the quarter and positive $42 million year to date, and we ended the quarter with $2.5 billion of cash.

Finally, during the quarter, Bloom Energy was added to the S&P 500. We view this inclusion as recognition of the scale, profitability, and consistency we have built into the business, and we welcome the broader base of shareholders it brings. Turning to guidance, we are raising our full-year revenue outlook to $4.4 to $4.6 billion. That represents year-over-year growth of approximately 122% at the midpoint. The increase reflects our third-quarter performance and greater visibility into fourth-quarter customer delivery timing. Our quarterly cadence is driven by customer readiness and delivery timing, which is why we manage the business and provide guidance on a full-year basis. As with each of our increases this year, our outlook is built on two layers.

The first is backlog, which we assess customer by customer against site readiness and conversion timing. The second is a probability-weighted view of our pipeline and customers who need power within the quarter. With one quarter remaining, the timing of a small number of deliveries around year-end will determine where in the range we land. We are maintaining our most recent non-GAAP gross margin outlook of approximately 34%. This is up from 30% in 2025 and from our original outlook of approximately 32% at the beginning of the year. This view reflects our expected fourth-quarter revenue mix and business line margins. We are also raising our non-GAAP operating income outlook to $960 million to $1.03 billion. At the midpoint, that is a 22% operating margin compared with 14% at the midpoint of our February outlook.

Our non-GAAP diluted EPS outlook is now $3.10 to $3.40. To conclude, we are delivering record results, raising our outlook, and making the investments required to capture the significant opportunity in front of us. We are doing that while expanding margins and preserving the strength of our balance sheet. With that, operator, we will now take questions.

OPERATOR

We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Please limit yourself to one question and one follow-up. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Mark Strauss with J.P. Morgan.

Your line is now open. Please go ahead.

Mark Strauss (Analyst at J.P. Morgan)

Yes, good afternoon. Thank you very much for taking our questions. KR, I’m curious if you can just talk about the recent decision to expand your real estate footprint in Fremont. You spend quite a bit of time on the call talking about kind of multiple paths of TAM expansion. I’m just curious though, why make that decision now? And since you’ve talked about your current manufacturing footprint supporting over 5 gigs of annual output, should we now assume that that’s over 10 gigs once that facility is up and running?

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Mark, thank you for that question. Look, it is very clear to us, right, there are some things in this uncertain world that you can be absolutely certain about: the use of electricity, the need for electricity, the demand for electricity is just going to skyrocket, not just because of AI, but because of so many market segments that require electricity in this digital age. It is going to happen not just within the shores of the U.S. We are beginning to see that same trend play out in Asia, in Europe, in other parts of the world.

We see electricity demand for on-site kind of power as opposed to the grid power coming from various other pools other than just data centers being told to bring their own power. This is coming from resiliency, it’s coming from security. You’re looking at critical installations during various different scenarios in the world where their need for reliable, secure power that is on site is becoming important. When we put all this together, it is very obvious to us.

It was always obvious to us. But from a timing perspective, it is very obvious to us that the 5 gigawatt milestone, which was just a milestone in a long journey, we can clearly see that coming and we need to get prepared for what is after that. And that’s what you’re seeing out here. And we will never increase our capacity in a step function. We will do that as the need comes along, in an analog dial, if you want to think it that way, to keep up. And we will never go past our headlights, but we will never be slow enough where we are the bottleneck to our customer getting the power. It is through this process that we do this. We are not going to provide a timeline of when that’s going to happen, but we have strong conviction, and there is enough confidence we are getting from the marketplace to tell us that we should start preparing for past the milestone of the 5 gigawatts.

That’s why we’re doing this. Hopefully that answers your question.

Mark Strauss (Analyst at J.P. Morgan)

That was great.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Thank you.

Mark Strauss (Analyst at J.P. Morgan)

And then just a quick follow-up for Simon on the point of gross margin outlook for the year staying the same despite the higher revenue. I think you touched on that’s at least partially due to mix. Any other color you can give us there? And then I obviously know you’re not guiding to ’27 yet, but just kind of directionally as your revenue ramps, should we continue to expect further upside in gross margin?

Simon Edwards (Chief Financial Officer)

Thank you. Yeah. Hi Mark. So look, at first I’d take a step back and just look at how far we’ve already come. Right? Total gross margin was 28.7% in 2024, 30.3% in 2025 and now 34.5% in the third quarter. So I think we have this demonstrated track record of expanding margins as the business has been scaling. Within that, I feel really good about what we’re seeing in product margins. So, mentioned on the prepared remarks, pricing remains strong and the cost reductions we’ve been driving are showing up in the numbers.

And so I think, though, at the same time we’re balancing this margin expansion with also capturing the market opportunity in front of us. As Kara mentioned, we’re ramping new production lines, we’re expediting deliveries to meet these customer timelines, and I think that carries some near-term cost. And then we’ve also got a number of engineering, sourcing, manufacturing cost reduction programs, and those will take some time to flow through to COGS.

So I would think about it—you asked about next year—we think about it from the lens of the long game. We know that scaling comes with startup costs, and I think we’ve reflected that in a measured gross margin outlook. But as these projects move into production, as we continue to mature our lines and utilization increases, we think we’ll get more benefit from scale. And I’d just say, look, in my first six months here I’ve been really impressed with what I’ve seen both operationally from the team and then how that progress is showing up in the numbers. Thank you.

OPERATOR

Your next question is from the line of Nick Amakuchi with Evercore ISI. Your line is now open. Please go ahead.

Nick Amakuchi (Analyst at Evercore ISI)

Hey guys, thanks so much. Just wanted to—Simon, if I could just kind of drill into the free cash flow profile. Obviously, you know, a use of 27 million in the quarter. Just given the margin expansion and the like, just wanted to drill into that. Any kind of puts and takes or one-offs that we can kind of frame up?

Simon Edwards (Chief Financial Officer)

Yeah. Hi Nick. So look, I think the first point I’d make is we really view this as a self-funding business. So when you think about the operating performance of the business, that’s what’s funding the investments required to grow. So, you know, I do want to highlight that this really matters for us because it’s going to reduce our dependence on external capital. It really lowers our execution risk, and then I think it gives us the flexibility that George talked about to invest against that customer demand.

So I’d say all of that in the context of really looking at cash generation over the full year rather than extrapolating from any one quarter, and I would say that we really do believe that this business will be a free cash flow positive business as we think about continuing to be able to fund our own growth. As I then kind of come back to the first part of your question: You know, this quarter we used cash from operations, but that’s not the beginning of a trend. You know, we generated positive CFO year to date even as we’ve increased operating investments in people and capabilities, and then, as I mentioned in my prepared remarks, funded the working capital to support some of these customer deployments. So I think the fact that we’ve been able to support the investments from an operating standpoint and then also fund our CapEx year to date just kind of speaks to the capital efficiency of this business.

And then if I tie that all back to the returns that we’re able to generate from our CapEx investments, we feel really good about the trajectory we’re on.

Nick Amakuchi (Analyst at Evercore ISI)

Great, thanks. And then, KR, if I could just kind of drill in on—so you had mentioned kind of the increased demand and the relationships that you guys have had on the utility side. Obviously, you know, kind of thinking of it more—thinking of you guys more of a behind-the-meter solution now, it seems a little bit more complementary from that perspective if we think about just kind of what’s been put out there already. I mean, we’ve seen IRPs in different jurisdictions that have now included fuel cells.

If we could just kind of put a finer point on the opportunity and TAM that you guys are seeing within, I guess just broadly as you think about it, and specifically within kind of that regulated utility opportunity, and the opportunity there.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Nick, that’s a wonderful question. So, you know, let’s first talk about as seen by the customer, okay? And here I’m going to say let us think of two customers. One is the ratepayer who is the ultimate customer, and the other customer for us is the utility that serves that ratepayer. Right? If you look at optimizing for the two of them, the more they start seeing us as a distribution asset through which they can reduce their total cost and still keep serving their customer, the better it is for the ratepayer; the better it is for them to go to their policymakers and ask them to rate-base their procurement of Bloom Energy servers to put into the transmission and distribution base as both a transmission asset and a distribution asset.

What does that do for them? It allows them to put us in front of the meter and distribute that load as it comes. They don’t need to wait for a customer to ask for an order. They can procure like they do in their IRPs right now, based on the plans and based on the demands without any specific customer in mind. Why should they do this as opposed to buying a central asset? The transmission, distribution and the cost associated with it and the bottlenecks associated with it and the timing associated with it does not work for them.

They are finding that out. So the customer has to go behind the meter. They lose their customer, they lose their rate base. If they lose their customer and they lose their rate base, then they have to increase the cost on the rest of the ratepayers, which is not what the state wants and which is not what the end customer wants. So we are a real asset to this industry at this point in time, across the board. So you’re going to see this play out in multiple territories as soon as they begin understanding this. And our team’s been doing a very good job of educating the various utilities on the benefits of bringing on-site power as a complement to the grid. We have been saying why the grid is inadequate. The utilities are finally getting the leeway they need from their regulators to include these assets, and so they’re jumping on the opportunity. So we see this as a huge growth business for us going forward.

Nick Amakuchi (Analyst at Evercore ISI)

Thank you.

OPERATOR

Your next question is from the line of David Accaro with Morgan Stanley. Your line is now open. Please go ahead.

David Accaro (Analyst at Morgan Stanley)

Oh, hi. Thanks so much for taking our questions. You have several future opportunities, I guess, in carbon capture, in combined heat and power, and as the industry goes to 800 volt DC. I was wondering, for those future initiatives, could you address where those stand in terms of commercial opportunities emerging and what the market adoption is that you’re seeing in the near term.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

David, hi. So thanks for that question. Yeah, let me address that. Look, I cannot tell you how thrilled I am with the AEP announcement of the 700 megawatts of carbon capture providing near net zero electricity to a hyperscale customer—Google in this case is what they have announced. And what this is going to do is to provide timely, on-site, reliable, no air pollution, no water use and near net zero electricity. How much better can this get? Okay, and here is the key point that I think the investors on the call need to understand.

Combustion technologies do not offer an affordable and scalable pathway to carbon capture. Today. Bloom’s technology in the commercial world is unique in that it can offer the concentrated carbon dioxide for carbon capture. This is the genius and the power of Bloom—it is both good for the pocketbook and it’s environmentally friendly. So I believe the fastest way the world will decarbonize when it’s ready is to use our technology with natural gas to produce abundant electricity that is reliable, at the same time planet-friendly, and when the world is ready for this.

I see this as a greater than a trillion dollar opportunity. That’s how big I think it is. 800 volt DC is a no-brainer. We have shown in a report that we put out that in the first five years of operations a gigawatt data center will save over $5 billion by adopting 800 volt DC as opposed to the current archaic industrial age architecture of power delivery. 800 volt DC is anyway happening. We don’t have to push the market to get there. But why use all the translations in between and pay the additional $5 billion? I’m extremely confident that we will see that adoption happen.

When the server racks with 800 volt DC come out, we are in conversations with all the hyperscalers. There’s a lot of interest in this area. It’ll happen when the DC data centers are built, 800 volt DC as the standard. It is not if, it is how soon. They are in a better position to answer the timing question than I am. On heat capture, which is CHP, we absolutely believe that when you do on-site generation, throwing away that heat that can be cooling and reducing 20% of your power demand is again a no-brainer. So this is an “and” to everything we do—whether you do AC power to the data center, 800 volt DC power to the data center, with carbon capture, without carbon capture—it doesn’t matter. This becomes an obvious choice. And here’s what’s interesting about CHP: most industrial applications, and we believe C&I is going to be a huge growth vector for us, are going to require either heat in the form of steam or cooling, and they will utilize CHP.

So I see that as a huge growth vector and a value creation for commercial and industrial customers to use us. So, you know, the beauty—it’s the same platform. So that’s why we have been telling everybody Bloom’s a platform and not a product. We are able to give any and all of the options in our platform to the customer as they need it.

David Accaro (Analyst at Morgan Stanley)

Thank you.

OPERATOR

Your next question.

Michael Tierney (Investor Relations)

Sorry, David may have a follow on.

OPERATOR

Your next question is from the line of Chris Dendrinos with RBC Capital Markets. Your line is now open. Please go ahead.

Chris Dendrinos (Analyst at RBC Capital Markets)

Yeah, great. Thanks for taking the questions here. Congratulations on a strong quarter. You know, I wanted to ask about time to power, and, you know, I think going back, you mentioned it during your prepared remarks, the ability to deliver to Oracle in less than two months a year ago. You know, as demand’s ramping and you guys are scaling, is the time to power still sub-90 days or is that extended just given the strength of the backlog here? And then maybe just put a finer point on how quickly you are able to deliver power to the Nebia site.

I think you mentioned the first block is about to power on, but what does that translate to in terms of megawatts? Thanks.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

So, thank you, Chris. That’s a very good question. Look, we have our servers ready for the NVS data center and again we stand by and we have actually delivered on the promise we made to them. We will not be the bottleneck to them turning on their data center, their entire 300 megawatts. We will not be the bottleneck. So we are ready. We will go. But I think you’re familiar with how data centers are stood up. They’re not stood up from zero to 300 in a day.

They do it block by block. And their first block is almost getting ready and we are already there for the first block. We will be there for every other block that they build before they are ready so we don’t become their bottleneck. So the rest of the timing on the data centers is up to the customer to speak and we will not comment on that. But your larger question, look, just this morning, I think Berlin time, or maybe it was yesterday, I can’t remember, at the Berlin GTC, the CEO of Nvidia said the following: every quarter delay in a gigawatt data center translates to $10 billion of missed revenue. Okay, so every 100 megawatt data center, a quarter delay would be a $1 billion lost revenue that overwhelms every other value proposition that you will have on the power block. And there is no cleaner technology available today for on-site power to get an air permit.

There is no faster technology available to power a customer on, and there is no complete future proofing and all the attributes we talked about in the previous question about the additional value we can supply. So that is the reason we are bullish about this particular sector and what it means for us.

Chris Dendrinos (Analyst at RBC Capital Markets)

Thank you. And maybe just as a follow up and going back to Mark’s questions on the expanding footprint. Is there an opportunity to add increased automation here? And just how are you all thinking about, I guess, the manufacturing opportunity and what kind of cost savings that might drive? Thanks.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Look, I think when people have taken a tour of our factory, our general manager Brad Fields, who is amazing, says the following line that people remember. He just reminds them that years ago when we did 100 megawatts a year of stack production we had about 600 employees working 24/7. Now when we are at a gigawatt production we will have 600 employees per year in that production line. That is 10 times. And when we get to 5 gigawatts we’ll still have 600 employees working in that line.

And that is Bloom Energy is a place where cost reduction is in our DNA, creating efficiencies is in our DNA, and we continue to innovate. So absolutely. And we are not only a beneficiary of AI in that they are our customer. We are a beneficiary of AI in so many different places, including automation. Thank you.

Chris Dendrinos (Analyst at RBC Capital Markets)

Thank you.

OPERATOR

Your next question is from the line of Manav Gupta with UBS. Your line is now open. Please go ahead.

Manav Gupta (Analyst at UBS)

K.R., I want to go back to the last call. You said something incredibly insightful where you said the total cost, the LCOE, is an absurd construct for on-site power, and data centers focus on the total cost. Can you help us a little bit to understand what the data centers are seeing in terms of what is the LCOE versus actually the power which is delivered to them is actually pricing in much higher and your solution actually is more effective. And then quickly on that, the 15th, 16th of September report that you highlighted, that is a very good report because it talks about all the money you save by switching to your solution. And I think you had said that a 1 gigawatt facility can save up to 9% by switching to your solution. And the last part of that question, I promise, is we understand your solution has lower NOx and SOx emissions, but we also think there’s a water conservation here.

Your solution uses less water than your competitors and that could be a major advantage when you compete in this business. So if you could highlight some parts of all that question. Thank you.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Okay, Manav, thank you. There are many questions. I’ll try to remember as many and answer. Let me start with the water question. Right. If you just look at, for every gigawatt, the amount of water consumption on the power plant, if you use a combustion technology versus us, we are not even in the rounding error of the second decimal. Okay, so if you have a gigawatt worth of data center, your annual lifetime usage of water is enormous. When you’re operating with a CCGT, for example, it would be somewhere in the neighborhood of 25,000 million gallons of water is what will get consumed if it’s a wet-cooled CCGT over the life of that 1 GW data center.

That’s a lot of water. Compared to that 25,000 million, we are 1.4 million. So it is not even a drop in the ocean from a water usage perspective. That’s the way to think about water. Now you’re asking about the cost advantage compared to grid power. Look, from the grid power, the power all the way going to a rack, from it going to less. From the three nines, 99.9% not clean from a voltage and power perspective—I’m not talking about the environmental aspects—the cleanliness of the electric power, which is what a UPS does, and then the reliability, then you add to that the conversion to the voltage and the direct current that you need.

All that is cost associated from grid power to rack power. But then within the rack, because the grid-delivered technology cannot cycle up and down or a turbine cannot cycle up and down, there are inefficiencies created inside the rack and they simply burn that electricity so as not to burn out the turbines or the engines or the batteries on the other side. You don’t need to do that with the fuel cell. So the real cost for a data center is electricity, total electricity cost to the amount of tokens you actually deliver on the other side.

So it is the token cost of electricity. From LCOE, it goes to delivered grid power. From delivered grid power, it goes to rack power costs. From rack power cost, it goes to token power costs. You put all this together, we are overwhelming cost leader, lowest cost leader. If you put that total cost, that is the understanding people are beginning to understand. And I hopefully answered most of your questions, Manav. We’ll take the next one. Thank you.

Thank you so much, sir.

OPERATOR

Thank you. Your next question is from the line of Ben Kallo with Baird. Can we ask all remaining analysts to keep to one question only in the interest of time? Thank you. Your line is now open. Ben, please go ahead.

Ben Kallo (Analyst at Baird)

Hi. Thank you. I have two questions very quickly. Number one, just going back to Mark and the expansion, you guys have talked about expanding, I think 250 to 300 megawatts per quarter. I’m just trying to think about how we should think about that, you know, as you approach the 5 gigawatts going into next year and any kind of supply constraints that we should think about. And then my second question is, you know, not in my backyard. You know, we’ve seen headlines that maybe some developers are moving internationally and I’m wondering, you know, how we should expect, you know, you guys to capitalize if that is true and if there’s the same type of benefits that you guys have, whether water, noise, or SOx and NOx emissions. And thank you guys.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Thank you, Ben. So on the first question, let me be very clear. We have not given any numbers on quarter-to-quarter growth or year growth. What we have said is it’s a dial and we’ll dial it up or dial it down depending on where that need is. And based on everything I told you, I don’t see us dialing down anytime soon. It’s all dialing up. So it is how much we dial up will depend purely on the load. That’s number one. Number two, on the question on international, look, the part to remember is, if the total delivered electricity for token becomes a lot less using the Bloom Energy system, that means the amount of fuel you consume for the same number of tokens goes down. In most international markets where the cost of natural gas is so much higher than it is in the U.S., the advantage we bring even further enhances. And for all those reasons, yes, international markets are very attractive to us and we are looking at international expansion.

And like I said in my prepared remarks, expect some good news from us in the near future on that score.

OPERATOR

Thank you. Your next question is from the line of Amit Thakur with BMO Capital Markets. Your line is now open. Please go ahead.

Amit Thakur (Analyst at BMO Capital Markets)

Congratulations on the quarter and the revised outlook. Just one quick one for me. I’ll stick to the rules. But K.R., you talked a lot about scale today. What’s the largest single site kind of Bloom deployment operating in the U.S. today in terms of megawatts? And how do we think about the relative to the size of the projects you kind of mentioned that you’re about to deploy in Wyoming or New Jersey?

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

You know, we are in the 100 megawatt class already, and the Wyoming is also a 100 megawatt class, approaching the gigawatt class because it’s 700 megawatts. So our smallest systems are 150 kilowatts powering a small Home Depot and our largest systems are approaching the gigawatt scale. And I’ll tell you, each of those customers is valuable to us and we keep them all happy.

Amit Thakur (Analyst at BMO Capital Markets)

Thank you.

OPERATOR

Thank you. Your next question is from the line of Maheep Mandloi from Mizuho. Your line is now open. Please go ahead.

Maheep Mandloi (Analyst at Mizuho)

Hey, good evening. Thanks for the question here. It’s one small one on the backlog growth. I think in the prepared remarks you kind of talked about backlog growing faster than revenues. And I’m trying to understand how to interpret that given revenue is up like roughly maybe 140% year over year or versus last year. So is that a framework to kind of think about the backlog growth over here this quarter?

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Thanks, Maheep. Thanks for that question. Luckily you don’t have to wait very long given that it is Q4 in our, you know, beginning of the year. We will give you exact guidance. And I think over the last few quarters we have shown to you that we have discipline and we give you numbers that we actually deliver on. So we will get you that number. But I would say, look, I think the growth is, growth is solid. It is, it’s robust. So expect a solid growth.

I’m not going to directionally bracket it for you. Sorry. Thanks for the question.

OPERATOR

Your next question is from the line of Sanayan Okalan with Bernstein. Your line is now open. Please go ahead.

Sanayan Okalan (Analyst at Bernstein)

Hey, good afternoon. Thank you for taking my question and squeezing me in. Maybe I can ask, in light of the AP Google deal, can you provide some color on maybe some of the other hyperscaler conversations you’re having? Are you seeing CCS come up more as sort of a potential optionality for the hyperscaler conversations and maybe what it does to delivered power cost from your perspective? I appreciate the CO2 stream being cleaner in your options. So just maybe more thoughts on that.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

Look, I think, you know, very good question. I would say yes, there is significant interest from all our hyperscale customers today asking about the optionality of carbon capture. We think it’ll become extremely important as we go forward. I think almost all our customers would very soon at a minimum start buying systems from us that are carbon capture ready. So when the ecosystem of wherever they are has a CO2 pipeline that brings them to a sequestration well, they will be able to accommodate that, right?

Number one. Number two, think about a 10% to 15% cost as being a reasonable cost that most hyperscalers today would accept to be able to provide zero-carbon power. So if you were able to provide that, that would be where they would go voluntarily absent a mandate. And Bloom Energy will be able to deliver in that range, all-in full cost for carbon capture and sequestration. This is why I said we are the most affordable and technologically ready platform to do carbon capture and sequestration.

OPERATOR

Thank you. Your next question is from the line of Colin Rusch with Oppenheimer. Your line is now open. Please go ahead.

Colin Rusch (Analyst at Oppenheimer)

Thanks so much, guys. It’s a two-part question. You know, the first question is really about the contract asset growth and how you expect that to move into, you know, being able to bill for that and collect on that. And then the second question, or second part of it, is really around the strategy for monetizing carbon capture. You know, I think we’re believers that you guys can really make a meaningful impact on that. And just if you’ll expect to monetize through server sales, or if you’ll likely bring to market a new solution that augments some of the opportunities that you have with the servers right now.

Simon Edwards (Chief Financial Officer)

Yeah, I’ll take the first part of that, Colin. So look, I’d say to characterize the contract assets, what I do expect is they’re going to turn, right? So while contract asset balance might grow, what’s really important for us is that they’re turning because we’re reaching those billing milestones and we’re collecting cash. And so I think that’s an important nuance here that I want to highlight. And then look, in general, I would expect us to continue to be able to manage working capital as we scale this business.

But I think just making sure that we’re turning both our receivables and contract assets is our primary focus.

K.R. Sridhar (Founder, Chairman and Chief Executive Officer)

So, Colin, on how do we monetize carbon capture? Right. Again, this answer should not surprise you. This is how Bloom does everything in its business models and even in its product offerings. We will cater to the needs of the end customer. If the end customer happens to be a gas company or an oil and gas company with ability to carbon capture, they can bolt this on and they can monetize it. And using the credits as well as the revenue stream that comes from the customer, we can work with a partner to offer a complete solution, end to end, and figure out how to divide those proceeds.

Or in some cases, the end customer may have the need for the carbon credits and they take it themselves and they pay us in return on the implied electricity costs or the capital equipment plus a margin. We are agnostic to all of them. That’s the beauty of our model, is that we create optionality for our customer and that’s how we think about anything we do. At the end of the day, we are there to serve a customer, we’re there to serve a need. And there are multiple pathways to getting to that.

So with that, let me actually, since you’re on top of the hour and past it, let me just wrap up and I want to acknowledge, while everything you heard from us is super positive, I want to acknowledge the unsettling times we are living in right now. Like most of you, I see that there’s a lot of uncertainty in the world and there’s volatility in the market. However, it is during times like this that we should remind ourselves of the compelling reasons for optimism about our collective future.

At a personal level, I can tell you I feel really blessed to be at Bloom. It’s an island of stability, certainty and purpose for me. Let me explain to you. I grew up in a place where power was a scarcity. I know what it means to not be able to count on having electricity, how it dampens economic activity. Human health and prosperity is something I know very well. In today’s digital world, having power is even more important than it was when I was growing up as a child.

Power needs, without a question, are going to be rising and are secular. One thing you can be certain, the need for power will soar in the coming years. And Bloom has built a platform to deliver power cleanly, reliably and at scale to those who need it. And as we have proved time and again, we’re able to deliver it and generate profits and returns for our shareholders and scale our business for growth using a self-funded model. Our future is bright.

I’m grateful to the work. I’m really grateful to work with such a strong team and on such a meaningful mission that I’m so energized. And I see our bright future very clearly in my eyes. Thank you for supporting Bloom. You all have a great day.

OPERATOR

This concludes today’s call. Thank you for attending. You may now disconnect.

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