Carbonate fuel cell technology developer FuelCell Energy (NASDAQ: FCEL) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 29.4% year on year to $33 million. Its non-GAAP loss of $0.64 per share was 62.2% below analysts’ consensus estimates.
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FuelCell Energy (FCEL) Q2 CY2026 Highlights:
- Revenue: $33 million vs analyst estimates of $39.17 million (29.4% year-on-year decline, 15.8% miss)
- Adjusted EPS: -$0.64 vs analyst expectations of -$0.39 (62.2% miss)
- Adjusted EBITDA: -$36.74 million (-111% margin, 124% year-on-year decline)
- Adjusted EBITDA Margin: -111%, down from -35% in the same quarter last year
- Backlog: $1.30 billion at quarter end, up 4.1% year on year
- Market Capitalization: $1.37 billion
Company Overview
Founded in 1969, FuelCell Energy (NASDAQ: FCEL) is a leading manufacturer and developer of carbonate fuel cell technology for stationary power generation.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, FuelCell Energy’s 16.2% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. FuelCell Energy’s annualized revenue growth of 34.4% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. FuelCell Energy’s backlog reached $1.30 billion in the latest quarter and averaged 5.3% year-on-year growth over the last two years. Because this number is lower than its revenue growth, we can see the company fulfilled orders at a faster rate than it added new orders to the backlog. This implies FuelCell Energy was operating efficiently but raises questions about the health of its sales pipeline. 
This quarter, FuelCell Energy missed Wall Street’s estimates and reported a rather uninspiring 29.4% year-on-year revenue decline, generating $33 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 49.1% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will spur better top-line performance.
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Operating Margin
FuelCell Energy’s high expenses have contributed to an average operating margin of negative 126% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out.
On the plus side, FuelCell Energy’s operating margin rose by 1.2 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.
FuelCell Energy’s operating margin was negative 141% this quarter.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Although FuelCell Energy’s full-year earnings are still negative, it reduced its losses and improved its EPS by 18.7% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability. We hope to see an inflection point soon.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For FuelCell Energy, its two-year annual EPS growth of 41.4% was higher than its five-year trend. We love it when earnings improve, but a caveat is that its EPS is still in the red.
In Q2, FuelCell Energy reported adjusted EPS of negative $0.64, up from negative $1.02 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street expects FuelCell Energy to improve its earnings losses. Analysts forecast its full-year EPS will improve from negative $2.62 to negative $1.16.
Key Takeaways from FuelCell Energy’s Q2 Results
We struggled to find many positives in these results. Its revenue missed and its EBITDA fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 16.9% to $14.37 immediately following the results.
FuelCell Energy didn’t show its best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
