Fluence Energy’s fourth quarter results were met with a significant negative market reaction as revenue and GAAP EPS both fell short of Wall Street expectations. Management attributed the underperformance to discrete project cost overruns outside the U.S. and typical first-quarter margin seasonality, which led to lower adjusted gross margins. CEO Julian Nebreda emphasized that these cost impacts were not systemic, stating, “We expect these costs will be largely recovered over the course of this year.” Despite these challenges, the company’s backlog reached a record high, reflecting ongoing demand for energy storage solutions.
Is now the time to buy FLNC? Find out in our full research report (it’s free for active Edge members).
Fluence Energy (FLNC) Q4 CY2025 Highlights:
- Revenue: $475.2 million vs analyst estimates of $484.3 million (154% year-on-year growth, 1.9% miss)
- Adjusted EPS: -$0.29 vs analyst expectations of -$0.20 (46.2% miss)
- Adjusted EBITDA: -$52.06 million (-11% margin, 4.8% year-on-year decline)
- The company reconfirmed its revenue guidance for the full year of $3.4 billion at the midpoint
- EBITDA guidance for the full year is $50 million at the midpoint, below analyst estimates of $51.5 million
- Adjusted EBITDA Margin: -11%
- Deployed Megawatts for Digital Contracts: 22,800, up 4,100 year on year
- Backlog: $5.5 billion at quarter end, up 7.8% year on year
- Market Capitalization: $2.51 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Fluence Energy’s Q4 Earnings Call
- George Gianarikas (Canaccord Genuity) asked about the resolution of PFE compliance at the ASC battery facility; CEO Julian Nebreda explained Fluence expects ASC to resolve compliance without company ownership involvement, emphasizing confidence in continued supply.
- Brian Lee (Goldman Sachs) inquired about the conversion of data center pipeline into backlog and the recovery plan for project cost overruns; Nebreda noted no new data center contracts have hit backlog yet, with expected conversion possibly in the second half of the year, while CFO Ahmed Pasha detailed that cost overruns are expected to be recovered contractually.
- Dylan Nassano (Wolfe Research) asked about competitive pressures from tariffs and industry players like Tesla; Nebreda stated there were no material changes in competition or tariff impacts factored into 2026 outlook, and that margin outlook remains stable.
- Julien Dumoulin-Smith (Jefferies) pressed on product fit for data centers and timing for including these projects in backlog; Nebreda outlined the company's strong reliability and cyber capabilities, but acknowledged uncertainty on when these opportunities will be reflected in firm orders.
- Ben Kahlo (Baird) questioned supply chain and liquidity constraints as volumes scale; Nebreda said supply chain planning includes multiple supplier tiers for flexibility, while Pasha added current liquidity is sufficient for planned growth but additional capital may be needed if opportunities accelerate.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace at which data center and long-duration energy storage opportunities convert from pipeline to backlog, (2) the recovery of project-specific cost overruns and their impact on gross margins, and (3) progress in expanding and diversifying the domestic supply chain to mitigate tariff and regulatory risks. Updates on order intake momentum and execution in new customer segments will also be key for evaluating Fluence’s strategic progress.
Fluence Energy currently trades at $19.05, down from $28.99 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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