Bloom Energy Corporation
10/22/2026 | Press release | Distributed by Public on 10/22/2026 15:26
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. Generally, the words "believe," "may," "will," "estimate," "continue," "anticipate," "predict," "project," "potential," "seek," "intend," "could," "would," "should," "expect," "plan" and similar expressions are intended to identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.
Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our plans and expectations regarding future financial results, including our expectations regarding: our ability to be successful in the AI data center market and new international markets; the rate of AI adoption and demand for data centers; our ability to innovate, develop new products and improve upon our existing products; our ability to anticipate and address customer demand; our strategic partnerships with SK ecoplant Co., Ltd. and parties which provide financing and capital for project financings; our competitive position in the energy market for on-site power; future deployment of our Bloom Energy Server systems, Bloom Electrolyzers, and other solutions; our ability to increase efficiency of our products; our ability to market our products successfully in connection with the global energy transition and shifting attitudes around climate change; our business strategy and plans and our objectives for future operations; operating results; the sufficiency of our cash, our cash flows from operating activities, and our liquidity and our ability to obtain financing; projected costs and cost reductions; our ability to increase production capacity and achieve cost reductions in our fuel cell products and installation requirements; the adequacy of our agreements with our suppliers; management's plans and objectives for future operations; our ability to repay our debt obligations as they come due; trends in average selling prices; the success of our customer financing arrangements and ability to secure financiers to support customer financing needs for our product deployment; capital expenditures; warranty matters; outcomes of litigation; risks related to cybersecurity breaches, privacy and data security; the likelihood of any impairment of project assets, long-lived assets and investments; trends in revenue, cost of revenue and gross profit (loss); trends in operating expenses including research and development expense, sales and marketing expense and general and administrative expense and expectations regarding these expenses as a percentage of revenue; legislative actions and regulatory and environmental compliance; government shutdowns; general business and macroeconomic conditions in our markets including inflationary pressure; our supply chain (including any direct or indirect effects from the Russia-Ukraine war, armed conflicts in the Middle East, or geopolitical developments related to China); the impact of tariffs on our supply chain and fuel cell product; the impact of changes in government incentives, including the impact of the Inflation Reduction Act of 2022 (the "IRA") and the One Big Beautiful Bill Act (the "OBBBA"); industry trends; our exposure to foreign exchange, interest and credit risk; and the impact of recently adopted accounting pronouncements.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results and prospects. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur. Actual results, events or circumstances could differ materially and adversely from those described or anticipated in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements.
Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors including those discussed in the section titled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 ("2025 Form 10-K"), as well as those described from time to time in our other filings filed with the Securities and Exchange Commission, including other Quarterly Reports on
Form 10-Q filed with the Securities and Exchange Commission since the 2025 Form 10-K.
The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Overview
Description of Bloom Energy
Bloom Energy is a global leader in onsite power generation, delivering a foundational platform purpose-built for the digital era and the global energy transition. We manufacture a versatile fuel cell energy platform, supporting the commercial availability of two primary products: the Bloom Energy Server® fuel cell system for generating electricity and the Bloom Electrolyzer™ for producing hydrogen. Our primary product, the Bloom Energy Server is a proprietary high-temperature solid-oxide fuel cell technology that converts fuels-including natural gas, biogas, and hydrogen-into electricity at high density without combustion or moving parts, achieving lower emissions and higher efficiency than legacy systems.
For additional overview information, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, sections Overview and Key Macro Trends in our 2025 Form 10-K.
Developments With Respect to Factors Affecting Our Performance
Freight, Logistics and Transportation Costs
Volatility in the global freight and logistics markets continued in the third quarter of fiscal year 2026 as geopolitical events in the Middle East pressured ocean, air, ground and specialized heavy-equipment transportation rates. Routing inefficiencies driven by geopolitical events decreased transportation availability somewhat compared to the prior quarter, but transportation availability generally remains improved compared to prior years. Higher fuel prices and labor costs have also elevated logistics costs. On a selective basis, we continue to incur higher logistics costs to expedite deliveries of materials and supplies by air carrier so that we can manufacture and deliver our Energy Server products to meet customer timelines.
Changes in freight pricing can meaningfully affect our cost of revenues and project-level margins, particularly for large multi-megawatt deployments and international shipments, because of the size and weight of our Energy Server systems. Our strategies to manage freight, logistics, and transportation costs continue to include negotiating indexed freight arrangements where feasible, renegotiating air freight rates, optimizing factory-to-site routing, consolidating shipments, and increasing regional sourcing. However, such actions may not fully offset future freight rate increases, especially in periods of elevated demand or geopolitical or fuel price volatility.
Supply Chain Update
While there has generally been a worldwide shortage of electronic components, our supply of needed components, electronic or otherwise, has not been impacted to date. Approaches we have taken to manage our supply of electronic components despite current worldwide general shortages include supplier diversification, qualifying multiple suppliers for single or limited source components, enhancing our predictive analytics capabilities, and employing flexible sourcing strategies. As we continue to scale our business, we work proactively with our suppliers to ensure continued adequacy of supply while also maintaining our quality standards. Our strategies have included entering into long-term contracts and non-cancelable purchase orders. In select cases, where demand for items is competitive, components are highly dependent upon underlying scarce commodity items, or lead time is needed for a long-term order, we have also entered into take-or-pay or fixed volume commitment contracts. We do not currently anticipate experiencing supply chain shortages which would impact our 2026 production forecast; however, we cannot give assurances as to potential future developments or their related impacts. We enter into these arrangements to support anticipated production requirements, taking into consideration existing customer commitments, expected customer deployments and anticipated future demand. If actual demand, customer deployments or our production requirements are lower than anticipated, we may be required to purchase materials or make payments in excess of our then-current requirements. This could result in excess or obsolete inventory, inventory write-downs, increased working capital requirements and reduced operating cash flows.
On July 8, 2026, a short-seller published a report making allegations about our supply chain, including the sourcing and sufficiency of certain raw materials used in our products. We rejected the report's conclusions regarding our supply chain, and we believe we have sufficient supply of the relevant raw materials to meet our current fuel cell demand and backlog. Publications of this nature, whether or not accurate, have resulted in significant volatility in the trading price of our common stock, and we cannot predict whether similar publications may occur in the future or their potential impacts. We have incurred,
and may continue to incur, costs in connection with evaluating and responding to the report, and any related inquiries or demands could result in additional costs and divert management's attention.
Tariff Updates
During the year ended December 31, 2025, pursuant to the International Emergency Economic Powers Act ("IEEPA"), the U.S. government announced significant additional tariffs on products imported from various countries, including countries where we source materials used in our Energy Server products. In February 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the IEEPA were unlawful and required refunds of such tariffs collected, which refunds we have been separately pursuing. However, following the Supreme Court's decision, the U.S. presidential administration invoked other laws to collect tariffs and announced new temporary ten percent tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. In late July 2026, following the expiration of such temporary tariffs, the U.S. presidential administration imposed new tariffs of 10% to 12.5% targeting imports from approximately 60 economies which covers almost all U.S. imports. Certain materials which we require, such as imports of steel, aluminum, copper, and derivative metal products, continue to be subject to their own separate tariff regime.
Tariff levels, their duration, and the potential imposition, modification or suspension of existing or additional new tariffs or retaliatory actions remain uncertain. These and future changes to trade policies, trade actions, or retaliatory trade measures in response may continue to result in additional costs and pricing pressures, supply chain disruptions, volatility in the demand for our Energy Server products, and increased economic or geopolitical risks, which could adversely impact our business, financial condition, and results of operations, materially or in ways that we cannot predict. We do not currently anticipate that the recent tariff actions taken by the U.S. presidential administration focusing on Canada or the Canadian response will have significant impacts on our business.
Commodity Pricing Volatility
Commodity input pricing has continued to be an important factor affecting our cost structure through the third quarter of fiscal year 2026. Certain raw materials and components used in our fuel cell stacks, power electronics, structural assemblies, and balance-of-plant systems-including steel alloys, specialty metals, electronic components, natural gas-linked inputs, and rare earth-dependent materials, continue to experience price fluctuations. While we do not generally purchase commodities directly at spot prices, supplier pricing may reflect changes in underlying commodity indices over time. Increases in commodity prices may not be immediately recoverable through customer pricing due to contractual arrangements, competitive dynamics, or fixed-price project structures, creating potential margin pressure. We utilize supplier diversification, long-term sourcing agreements, inventory planning, and selective contractual pass-through mechanisms where available to mitigate commodity cost risks, and have also encouraged our suppliers to diversify their own supply chains. Sustained or rapid commodity price increases could adversely affect our results of operations.
Inflationary Pressures on Parts and Labor
Inflationary pressures increased in the third quarter of fiscal year 2026 and continued to persist across several cost categories relevant to our business, including certain electrical parts and components, labor, manufacturing and field installation services. Wage inflation in skilled manufacturing and technical field labor, coupled with higher third-party contractor costs, impacted our operating expenses and cost of revenues. Suppliers pass on general inflationary impacts on labor and services through increased prices for parts which we manage through productivity initiatives, automation, supplier negotiations, selective price adjustments, and ongoing cost-reduction programs. However, the timing and extent of these mitigations may not fully offset the pace of cost increases, particularly when we rapidly scale or accelerate deployment schedules.
Developments with Respect to Installation of our Energy Server Products
We continue to evolve our installation approach to a consult-only model, particularly for large load sites where we request customers to utilize one of our certified third-party installers. We continue to implement our certified third-party installation program where we train and certify established EPC companies with whom we have developed working relationships on the installation of our Energy Server product. Purchasers of our Energy Server product can select their preferred third-party EPC provider from the certified installer list, and enter into installation agreements directly with the EPC company. Bloom is available to provide consulting services to the installation. Installation partners undergo a rigorous qualification process prior to selection based upon criteria such as experience with Bloom's product, other energy infrastructure installation experience, balance sheet, reputation, and safety record. Following selection, such EPC companies undergo extensive training on our Energy Server systems and its proper installation. To facilitate the use of third-party installers, increase installation speed, reduce dependency on skilled field labor, and reduce installation costs, Bloom has incorporated
traditional installation components and materials into the Energy Server that have previously been supplied by general contractors or built on-site. Examples include the use of a factory-built and tested fuel cell on a skid design, the development and use of the Power Connect spine for all external cabling, and locating the interconnects to the system at a centralized external interface panel with data and power connectors. Additional benefits of such improvements and standardization include reduction of installation risks and errors. Bloom continues to have responsibility for the commissioning of the Energy Server system following installation.
Increasing Opposition to Data Center Development
Opposition to data center development continues to grow. In July 2026, the governor of New York state signed an executive order to create a moratorium on new hyperscale data centers that included temporarily pausing State environmental permits for up to one year in order to build a regulatory framework to address concerns which have been expressed by consumers and communities in the State related to matters such as utility rates and the environment. Similar moratoriums have since been introduced in many other states, and many local cities and municipalities have also introduced or adopted these or other measures which restrict, pause, or otherwise adversely impact data center development. Prolonged and widespread opposition to data center development due to ratepayer impacts, environmental concerns, noise, and other expressed strains on local communities may have longer-term adverse impacts on our business. In addition to potential direct impacts such as adversely affecting the size of this target market or causing project cancellations, additional indirect impacts may include (among other things) further increasing the sales and installation cycle, increasing the time, cost, expense, and complexity of obtaining required permits for the development, and reducing government support and incentives for such developments, any of which may also have adverse impacts on our business, financial condition, and operating results. Despite recent increasing opposition to data center development, demand for our Energy Server systems in connection with such developments has continued to be robust. However, recently, notwithstanding the environmental benefits of Bloom's Energy Server compared to alternatives, even projects with our fuel cell systems have experienced increased scrutiny, data requests, and discretionary hearings which have resulted in permitting delays. These delays in turn impact project construction, financing and commencement, all of which may have adverse impacts on our business, financial condition and operating results.
Financing Availability for Data Centers
Obtaining financing for data center development has generally become more difficult. Hyperscalers have increasingly funded such data center investments through borrowing rather than cash reserves, and corporate bond issuances for such purposes have surged. Projections of AI-related debt issuances in 2026 alone have exceeded $500 billion, driven by the need for significant upfront capital expenditures that outpaces earnings growth, and which has raised market concerns about rising leverage and (in some cases) negative free cash flow, for uncertain returns in the event benefits from the AI investments are not realized. In addition to hyperscalers, other participants in the AI infrastructure buildout, including neoclouds, co-location service providers, and other tenants to data infrastructure being built, are also increasingly viewed as high credit risks, which adds to uncertainty and makes financing more expensive and difficult to obtain, particularly when interest rates are also rising. When our hyperscaler, neocloud, and co-location customers and their related projects using our products are viewed as high credit risks, the size of the AI sector may be adversely impacted, projects unable to obtain economical financing may be cancelled, margin pressure may increase as developers negotiate lower prices for our products to offset higher financing costs, and additional pressure may be placed upon us to support developer efforts to obtain required regulatory permits which adds time, complexity, and cost, all of which may have adverse impacts on our business, financial condition and operating results.
We Also Arrange Financing for Customers
We arrange financing for the use of our Energy Server for our customers through power purchase agreements, capacity or lease arrangements. Our ability to arrange such financing is adversely impacted when our customers and their projects are viewed as high credit risk. When coupled with factors such as increasing opposition to data center development and pauses and additional delays in the issuance of air and other permits, the costs and risks of arranging financing for projects deploying our Energy Servers are further exacerbated. For example, despite our superior criteria pollutant emission profile and lower CO2 emissions than combustion alternatives, the process to obtain required air permits for larger installations is, at times, taking longer than expected. Construction, land use, and gas permits have also been delayed. These challenges may also impact our ability to receive revenue timely as we generally cannot sell our Energy Servers to a financier until permits are in hand. Regulatory uncertainty may also further affect our ability to arrange financing for projects because the economics of these financings depend on the monetization of available investment tax credits under the OBBBA. Any delays in the issuance of guidance related to such investment tax credits may cause financiers to further delay consummating financings for clean energy facilities using our products until greater clarity is received, and may put pressure on our margins or raise financing costs for our customers.
For additional information with respect of other factors affecting our performance, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, section Other Factors Affecting our Performance in our 2025 Form 10-K.
Sustainability
We are driven by the promise of our contribution to the transformation and decarbonization of energy and mobility sectors globally. Our advanced distributed energy platform delivers cost-effective, clean, reliable, and resilient electricity. Operating at high efficiency and without combustion, Bloom systems deliver lower emissions and improved air quality with minimal water use compared to conventional alternatives.
We are committed to continuous innovation, making our technology available across a growing list of applications including biogas, carbon capture, hydrogen, combined heat and power, and microgrid projects in order to serve our increasingly diverse customer base. Our natural gas-based Energy Server systems are also an important source of near-term emission reductions.
In April 2026, we released our 2025 Impact Report, Built for AI. Designed for Communities (the "Impact Report"), our sixth dedicated report, using generally accepted sustainability frameworks and standards, including alignment with Sustainability Accounting Standards Board ("SASB") standards and the Task Force on Climate-related Financial Disclosure ("TCFD") recommendations. In addition, the report also mapped to select Global Reporting Initiative ("GRI") disclosures and to the International Financial Reporting Standard ("IFRS") S2 disclosure standard.
The Impact Report as well as an ESG policy and resource library can be found on our website at https://www.bloomenergy.com/sustainability. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.
Inflation Reduction Act of 2022 (the "IRA") and The One Big Beautiful Bill Act (the "OBBBA")
For information on the IRA and the OBBBA and their impact on our business, see Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, section Inflation Reduction Act of 2022 and The One Big Beautiful Bill Act in our 2025 Form 10-K.
Liquidity and Capital Resources
Overview of Liquidity Position
As of September 30, 2026, and December 31, 2025, we had unrestricted cash and cash equivalents of $2,486.7 million and $2,454.1 million, respectively. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $2,367.8 million and $2,386.6 million as of September 30, 2026, and December 31, 2025, respectively. We seek to maintain these balances with high credit quality counterparties, regularly monitor the amount of our credit exposure to any one issuer and diversify our investments in order to minimize our exposure.
As of September 30, 2026, and December 31, 2025, we had $2,473.5 million and $2,613.7 million of recourse debt, $3.0 million and $4.2 million of non-recourse debt, and $9.0 million and $10.0 million of other long-term liabilities, respectively. As of September 30, 2026, and December 31, 2025, $3.0 million and $4.2 million of our debt were classified as short-term, respectively, and $2,473.5 million and $2,613.7 million of our debt were classified as long-term, respectively. For a complete description of our outstanding debt, please see Part I, Item 1, Note 8-Outstanding Loans and Security Agreements in this Quarterly Report on Form 10-Q.
Capital Markets Activity
In October 2025, in connection with our partnership with Oracle to provide on-site solid state power for AI data centers, subject to the negotiation of a warrant mutually acceptable to us and Oracle, we agreed to issue to Oracle a warrant (the "Warrant") to purchase up to an aggregate of 3,531,073 shares of our common stock, with an exercise price of $113.28 per share, which was the closing market price of our common stock on October 28, 2025. We and Oracle agreed that (i) the expiration date of the Warrant would be six (6) months from the date of the issuance of the Warrant, (ii) the Warrant would include customary anti-dilution adjustments, transfer restrictions and exercise procedures, and (iii) the Warrant would not entitle the holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise and settlement of the Warrant. The Warrant and the shares underlying the Warrant were expected to be issued in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.
On April 9, 2026, we issued the Warrant pursuant to the previously disclosed strategic partnership agreement with Oracle. The Warrant was fully vested upon issuance, immediately exercisable in whole or in part, at any time during six months from the grant date. On May 1, 2026, Oracle performed a cashless exercise of the Warrant. As a result of the cashless exercise, we issued 1,905,433 shares of our common stock on a net basis. Under the terms of the warrant agreement, Oracle could elect either net or gross settlement. Because net settlement would result in 1.4 million fewer shares being issued than a gross settlement, we agreed to issue Oracle an additional 248,798 shares of common stock as an inducement for Oracle to elect net settlement. These incremental shares represented additional consideration with a fair value of $72.3 million.
Revolving Credit Facility
For information on a senior secured multicurrency revolving credit facility (the "Revolving Credit Facility") which we entered into on December 19, 2025, see Part II, Item 8, Note 8-Outstanding Loans and Security Agreements, section Revolving Credit Facility in our 2025 Form 10-K. As of September 30, 2026, and December 31, 2025, no amounts were drawn under the Revolving Credit Facility. As of September 30, 2026, the $90.0 million letter of credit sub-facility under our Revolving Credit Facility was fully utilized, reducing our available borrowing capacity to $510.0 million.
Near-Term Liquidity Outlook and Financing Flexibility
The combination of our cash and cash equivalents and cash flow expected to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or not received in a timely manner to meet our near-term or future liquidity needs, we may require additional equity or debt financing to fund our operations, manufacturing capacity, product development, and market expansion initiatives, as well as to respond to competitive pressures or strategic opportunities. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. There were no factoring arrangements during the three and nine months ended September 30, 2026 and 2025. We may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may limit our financial and operational flexibility. Although we currently do not have any floating-rate notes on our balance sheet, our overall cost of capital may increase if interest rates rise and we refinance our fixed-rate convertible notes. If we raise additional funds through the issuance of equity or equity-linked securities, our existing stockholders could experience dilution in their ownership percentage, and any new securities may have rights, preferences, and privileges senior to those of our common stock.
Future Capital Requirements
Our future capital requirements depend on a variety of factors, including our rate of revenue growth; the timing and extent of spending on research and development and other business initiatives; increases in our manufacturing capacity; the pace and volume of system builds; the need for additional working capital; the expansion of our sales and marketing activities in both domestic and international markets; market acceptance of our products; selling models and vehicles required by customers; our ability to secure financing for customer use of our products; the timing of installations and related inventory build in anticipation of future sales; and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.
Project-Related Option Arrangement
In May 2026, we made a $50.0 million payment to acquire contractual rights under an option arrangement. Under the related agreements, the rights were assigned in July 2026 to a Brookfield Asset Management ("Brookfield") vehicle, which agreed to reimburse Bloom upon exercise of the option and acquisition of the underlying project. Under certain circumstances, including if the Brookfield vehicle did not proceed with the acquisition, the option rights could have been put back to the original holder, Oracle, with Bloom entitled to recovery of the $50.0 million through corresponding contractual arrangements. Bloom does not intend to retain a long-term ownership interest in the underlying assets or participate in the project's long-term economics.
During the three months ended September 30, 2026, we received a corresponding $50.0 million payment from Brookfield. As of September 30, 2026, Bloom derecognized the project-related equity investment asset and no longer holds the option rights.
Cash Flow Analysis
A summary of our consolidated sources and uses of cash, cash equivalents, and restricted cash was as follows (in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
|
Net cash provided by (used in):
|
||||||||||||||
| Operating activities | $ | 272,895 | $ | (304,124) | ||||||||||
| Investing activities | (257,700) | (58,299) | ||||||||||||
| Financing activities | 13,649 | 37,486 | ||||||||||||
Operating Activities
Our operating activities consisted of net income adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash provided by operating activities for the nine months ended September 30, 2026, was primarily due to business-driven changes in working capital totaling $598.9 million. These changes included:
•A $879.3 million increase in accounts receivable and contract assets, which grew due to the timing of milestone billings and customer acceptance cycles;
•A $285.5 million increase in inventory, primarily driven by higher raw materials purchases to support anticipated growth in production volumes and future customer demand, as well as to help manage supply chain lead times;
•A $178.0 million increase in deferred revenue and customer deposits, primarily driven by a higher level of new customer deposits compared to the prior year period. This reflected the timing and mix of system deployments, including a lower proportion of projects without significant upfront billings. Deferred revenue increased modestly compared to the prior year period;
•A $128.4 million increase in prepaid expenses and other current assets due to upfront service-related payments aligned with expanding field service activity; and
•A $64.9 million increase in deferred cost of revenue as associated systems reached acceptance milestones during the reporting quarter.
These movements were partially offset by a $583.5 million benefit from the timing of vendor payments.
Net cash provided by operating activities for the nine months ended September 30, 2026, was $272.9 million, representing a $577.0 million increase compared to the prior year period. The year-over-year change in operating assets and liabilities was primarily driven by: (i) an increase of $504.3 million attributable to contract assets, (ii) an increase of $272.9 million attributable to other long-term assets, (iii) an increase of $189.1 million attributable to accounts receivable, (iv) an increase of $106.3 million attributable to inventories, (v) an increase of $127.0 million attributable to prepaid expenses and other current assets, and (vi) an increase of $48.3 million attributable to deferred cost of revenue, partially offset by (a) an increase of $477.7 million attributable to accounts payable and accrued expenses, and (b) an increase of $412.5 million attributable to deferred revenue and customer deposits. These working-capital variances represent gross movements and therefore do not reconcile directly to the total year-over-year change in net cash provided by operating activities, which also reflects non-cash adjustments and other operating items included in the reconciliation from net income to operating cash flows.
Investing Activities
Our investing activities have consisted of capital expenditures, including investments to increase our production capacity, and investments in unconsolidated affiliates. Cash used in investing activities during the nine months ended September 30, 2026, was $257.7 million, an increase of $199.4 million compared to the prior year period. The increase was primarily due to a $197.5 million increase in expenditures on tenant improvements for a leased engineering and manufacturing facility in Fremont, California, which opened in July 2022, and a $2.0 million investment in the joint ventures between the Company and Brookfield (see Part I, Item 1, Note 7-Investments in Unconsolidated Affiliates in this Quarterly Report on Form 10-Q). We expect to continue to make capital investments to expand production capacity at our manufacturing facilities in
Fremont, California and Delmarva, Delaware. These investments, which include the purchase of new equipment and tenant improvements, are part of our strategic plan to continually increase capacity to meet orders and customer delivery requirements. The magnitude and timing of these capital expenditures will depend on implementation milestones, supplier lead times, and customer demand. We intend to fund these capital expenditures from cash on hand as well as cash flow expected to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.
Financing Activities
Our financing activities consist of payment of debt and debt issuance costs, repayments of/proceeds from financing obligations, proceeds from issuance of our common stock, payment of dividends and other cash flows from financing activities. Net cash provided by financing activities during the nine months ended September 30, 2026, was $13.6 million, a decrease of $23.8 million compared to the prior year period, predominantly due to (i) a $16.1 million decrease in proceeds from issuance of common stock, and (ii) an increase in cash outflows of $8.8 million for repayment of financing obligations, partially offset by a decrease in cash outflows of $1.2 million for repayment of debt and debt issuance costs.
Net cash provided by financing activities for the nine months ended September 30, 2026, consisted primarily of (i) the proceeds from issuance of common stock of $33.9 million, (ii) the repayment of financing obligations of $17.2 million, (iii) repayment of debt of $1.3 million, (iv) payment of dividends of $0.9 million, and (v) payment of debt issuance cost of $0.8 million.
We believe we have sufficient capital to operate our business over the next 12 months. Our working capital was strengthened with the supplemented liquidity through issuing the 0% Notes. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part II, Item 8, Note 8-Outstanding Loans and Security Agreements, and Part I, Item 1A, Risk Factors-Risks Related to Our Liquidity-Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs in our 2025 Form 10-K, for more information regarding the terms of and risks associated with our debt. We enter into committed arrangements and anticipate meeting these purchase commitments with suppliers and third-party manufacturers through cash flow generated by operating activities. If our revenues or operating cash flows do not increase at a level sufficient to support these commitments, our liquidity and financial condition could be adversely affected.
Purchase and Financing Options
For information about our purchase and financing options, see Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations, section Purchase and Financing Options in our 2025 Form 10-K.
Purchase Alternatives
Our customers have several purchase alternatives for our Energy Server systems. The portion of total revenue attributable to each purchase option for the three and nine months ended September 30, 2026 and 2025, was as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
|
Direct purchase (including third-party PPAs and international channels)
|
99 | % | 98 | % | 99 | % | 97 | % | |||||||||||||||
|
Managed services
|
1 | % | 2 | % | 1 | % | 3 | % | |||||||||||||||
Financing Partners
For information about our financing partners, see Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations, section Purchase and Financing Options, sub-section Financing Partners in our 2025 Form 10-K.
Delivery and Installation
For information on delivery and installation of our Energy Server systems, see Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations, section Delivery and Installation in our 2025 Form 10-K.
Since the discussion of the delivery and installation in our 2025 Form 10-K, we have sought to evolve our approach to installation to a consult only model, particularly for large load sites where we request our customers to utilize one of our certified third party installers for the equipment installation and project construction work and we operate as consultants to such certified installers as to Bloom Energy Server Product. See Part I, Item 2, section Developments With Respect to Factors Affecting Our Performance, subsection Developments with Respect to Installation of our Energy Server Products in this Quarterly Report on Form 10-Q for additional information.
Performance Guarantees
As of September 30, 2026, and December 31, 2025, we had incurred no liabilities due to failure to repair or replace the Energy Server systems pursuant to any performance warranties made under the O&M Agreements ("O&M Agreements").
For the O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $847.2 million (including $473.2 million related to portfolio financing entities and $374.0 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $466.1 million as of September 30, 2026. For the three and nine months ended September 30, 2026, we made performance guarantee payments of $7.5 million and $21.3 million, respectively. For the three and nine months ended September 30, 2025, we made performance guarantee payments of $2.4 million and $17.0 million, respectively.
International Channel Partners
There were no significant changes in our international channel partners during the three and nine months ended September 30, 2026. For information on international channel partners, see Part II, Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations, section International Channel Partners in our 2025 Form 10-K.
Results of Operations
A discussion regarding the comparison of our financial condition and results of operations for the three and nine months ended September 30, 2026 and 2025, is presented below.
Revenue
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Product | $ | 1,073,610 | $ | 384,314 | $ | 689,296 | 179.4 | % | $ | 2,662,371 | $ | 892,794 | $ | 1,769,577 | 198.2 | % | ||||||||||||||||||||||||||||||||||
| Installation | 84,855 | 65,773 | 19,082 | 29.0 | % | 161,764 | 136,796 | 24,968 | 18.3 | % | ||||||||||||||||||||||||||||||||||||||||
| Service | 67,557 | 58,607 | 8,950 | 15.3 | % | 198,459 | 166,604 | 31,855 | 19.1 | % | ||||||||||||||||||||||||||||||||||||||||
| Electricity | 9,815 | 10,354 | (539) | (5.2) | % | 29,662 | 50,117 | (20,455) | (40.8) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 1,235,837 | $ | 519,048 | $ | 716,789 | 138.1 | % | $ | 3,052,256 | $ | 1,246,311 | $ | 1,805,945 | 144.9 | % | ||||||||||||||||||||||||||||||||||
Total Revenue
Total revenue increased by $0.7 billion, or 138.1%, for the three months ended September 30, 2026, and by $1.8 billion, or by 144.9%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher product revenue, which increased by $0.7 billion and $1.8 billion, for the three and nine months ended September 30, 2026, respectively. Installation revenue increased by $19.1 million and $25.0 million, and service revenue increased by $9.0 million and $31.9 million, respectively. These increases were partially offset by decreases in electricity revenue of $0.5 million and $20.5 million, respectively.
Product Revenue
Product revenue increased by $0.7 billion, or 179.4%, for the three months ended September 30, 2026, and by $1.8 billion, or 198.2%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. Product revenue increased due to an increase in new acceptances and subsequent delivery of existing contracts, driven by continued demand for time-to-power solutions.
Installation Revenue
Installation revenue increased by $19.1 million, or 29.0%, for the three months ended September 30, 2026, and by $25.0 million, or 18.3%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributed to timing and scope of installation activity and the achievement of project milestones.
Service Revenue
Service revenue increased by $9.0 million, or 15.3%, for the three months ended September 30, 2026, and $31.9 million, or 19.1%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher revenue from maintenance contracts associated with the growth of our installed base, which contributed $16.9 million and $43.5 million for the three and nine months ended September 30, 2026, respectively, partially offset by higher product performance guarantee costs of $8.3 million and $13.0 million for the same periods.
Electricity Revenue
Electricity revenue includes both revenue from contracts with customers and revenue from contracts that contain leases.
Electricity revenue decreased by $0.5 million, or 5.2%, for the three months ended September 30, 2026, and by $20.5 million, or 40.8%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The decrease for the three months ended September 30, 2026, was primarily due to termination and repowering of certain Managed Services related sites. The decrease for the nine months ended September 30, 2026, was predominantly due to a one-time settlement of a customer contract after redeploying assets for our partner in the first quarter of fiscal year 2025, as well as termination and repowering of certain Managed Services related sites.
Cost of Revenue
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | |||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Product | $ | 666,978 | $ | 249,794 | $ | 417,184 | 167.0 | % | $ | 1,690,167 | $ | 588,113 | $ | 1,102,054 | 187.4 | % | ||||||||||||||||||||||||||||||||||
| Installation | 88,954 | 59,921 | 29,033 | 48.5 | % | 176,863 | 131,460 | 45,403 | 34.5 | % | ||||||||||||||||||||||||||||||||||||||||
| Service | 55,508 | 51,834 | 3,674 | 7.1 | % | 165,320 | 154,100 | 11,220 | 7.3 | % | ||||||||||||||||||||||||||||||||||||||||
| Electricity | 7,293 | 5,824 | 1,469 | 25.2 | % | 21,686 | 25,133 | (3,447) | (13.7) | % | ||||||||||||||||||||||||||||||||||||||||
| Total cost of revenue | $ | 818,733 | $ | 367,373 | $ | 451,360 | 122.9 | % | $ | 2,054,036 | $ | 898,806 | $ | 1,155,230 | 128.5 | % | ||||||||||||||||||||||||||||||||||
Total Cost of Revenue
Total cost of revenue increased by $0.5 billion, or 122.9%, for the three months ended September 30, 2026, and by $1.2 billion, or 128.5%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher product costs associated with increased product revenue.
Cost of Product Revenue
Cost of product revenue increased by $0.4 billion, or 167.0%, for the three months ended September 30, 2026, and by $1.1 billion, or 187.4%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher product volume, an increase in product warranty, and an increase in stock-based compensation for manufacturing employees. The impact of higher volume was partially offset by lower material,
labor, and overhead costs resulting from manufacturing efficiency improvements and increased automation, net of higher freight costs. In addition, the overall increase was partially offset by a $37.2 million recovery of previously paid import tariffs recognized during the nine months ended September 30, 2026, and by inventory reserve and asset impairments totaling $21.8 million recorded in the third quarter of fiscal year 2025 related to our Electrolyzer assets.
Cost of Installation Revenue
Cost of installation revenue increased by $29.0 million, or 48.5%, for the three months ended September 30, 2026, and by $45.4 million, or 34.5%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to project mix and the timing and scope of installation activity.
Cost of Service Revenue
Cost of service revenue increased by $3.7 million, or 7.1%, for the three months ended September 30, 2026, and by $11.2 million, or 7.3%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increase for the three and nine months ended September 30, 2026, was primarily attributable to the timing of field replacement unit deployments and maintenance activity, partially offset by fleet optimization and cost reduction initiatives.
Cost of Electricity Revenue
Cost of electricity revenue includes both cost of revenue from contracts with customers and cost of revenue from contracts that contain leases.
Cost of electricity revenue increased by $1.5 million, or 25.2%, for the three months ended September 30, 2026, and decreased by $3.4 million, or 13.7%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increase for the three months ended September 30, 2026, was primarily due to the increase in the number of installed units. The decrease for the nine months ended September 30, 2026, was mainly due to (i) redeploying assets for our partner to enable a one-time settlement of a customer contract in the first quarter of fiscal year 2025, and (ii) the reduction in the number of installed units.
Gross Profit (Loss) and Gross Margin
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
|
Gross profit (loss):
|
||||||||||||||||||||||||||||||||||||||
| Product | $ | 406,632 | $ | 134,520 | $ | 272,112 | $ | 972,204 | $ | 304,681 | $ | 667,523 | ||||||||||||||||||||||||||
| Installation | (4,099) | 5,852 | (9,951) | (15,099) | 5,336 | (20,435) | ||||||||||||||||||||||||||||||||
| Service | 12,049 | 6,773 | 5,276 | 33,139 | 12,504 | 20,635 | ||||||||||||||||||||||||||||||||
| Electricity | 2,522 | 4,530 | (2,008) | 7,976 | 24,984 | (17,008) | ||||||||||||||||||||||||||||||||
| Total gross profit | $ | 417,104 | $ | 151,675 | $ | 265,429 | $ | 998,220 | $ | 347,505 | $ | 650,715 | ||||||||||||||||||||||||||
| Gross margin: | ||||||||||||||||||||||||||||||||||||||
| Product | 38 | % | 35 | % | 37 | % | 34 | % | ||||||||||||||||||||||||||||||
| Installation | (5) | % | 9 | % | (9) | % | 4 | % | ||||||||||||||||||||||||||||||
| Service | 18 | % | 12 | % | 17 | % | 8 | % | ||||||||||||||||||||||||||||||
| Electricity | 26 | % | 44 | % | 27 | % | 50 | % | ||||||||||||||||||||||||||||||
| Total gross margin | 34 | % | 29 | % | 33 | % | 28 | % | ||||||||||||||||||||||||||||||
Total Gross Profit
Gross profit increased by $265.4 million for the three months ended September 30, 2026, and by $650.7 million for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher product and service gross profit, partially offset by lower installation and electricity gross profit (loss).
Product Gross Profit
Product gross profit increased by $272.1 million and $667.5 million for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025. The increase was primarily attributable to (i) increased product demand for our power solutions, including deployments for large data center customers; (ii) a $37.2 million recovery of previously paid import tariffs recognized during the nine months ended September 30, 2026; (iii) inventory reserve and asset impairments totaling $21.8 million recorded in the third quarter of fiscal year 2025 related to Electrolyzer assets, as compared to $3.1 million asset impairments in the third quarter of fiscal year 2026; and (iv) lower material, labor, and overhead costs due to ongoing manufacturing process improvements and increased automation. The overall increase was partially offset by an increase in product warranty.
Installation Gross (Loss) Profit
Installation gross profit decreased by $10.0 million and $20.4 million for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025, resulting in a gross loss in both periods. The decrease in gross profit was primarily attributable to project mix and the timing and scope of installation activity, and a one-time customer settlement in the third quarter of fiscal year 2025.
Service Gross Profit
Service gross profit increased by $5.3 million and $20.6 million for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025. The increase was primarily attributable to higher revenue from maintenance contracts associated with our fleet of Energy Server systems, which contributed $16.9 million and $43.5 million for the three and nine months ended September 30, 2026, respectively. The increase was partially offset by higher product performance guarantee costs of $8.3 million and $13.0 million for the same periods, reflecting the effects of fleet degradation.
Electricity Gross Profit
Electricity gross profit decreased by $2.0 million and $17.0 million for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025. The decrease for the three months ended September 30, 2026, was not material. The decrease for the nine months ended September 30, 2026, was predominantly due to a one-time settlement of a customer contract after redeploying assets for our partner in the first quarter of fiscal year 2025.
Operating Expenses
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | $ | 64,146 | $ | 48,724 | $ | 15,422 | 31.7 | % | $ | 179,868 | $ | 130,104 | $ | 49,764 | 38.2 | % | |||||||||||||||||||||||||||||||
| Sales and marketing | 52,409 | 41,995 | 10,414 | 24.8 | % | 133,893 | 88,326 | 45,567 | 51.6 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 75,100 | 53,110 | 21,990 | 41.4 | % | 204,583 | 143,802 | 60,781 | 42.3 | % | |||||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 191,655 | $ | 143,829 | $ | 47,826 | 33.3 | % | $ | 518,344 | $ | 362,232 | $ | 156,112 | 43.1 | % | |||||||||||||||||||||||||||||||
Total Operating Expenses
Total operating expenses increased by $47.8 million, or 33.3%, for the three months ended September 30, 2026, and by $156.1 million, or 43.1%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher employee compensation and benefits expense, including stock-based compensation, of $36.6 million and $105.5 million, for the three and nine months ended September 30, 2026, respectively, and investments to support the growth of our business.
Research and Development
Research and development expenses increased by $15.4 million, or 31.7%, for the three months ended September 30, 2026, and by $49.8 million, or 38.2% for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher employee compensation and benefits expense, including stock-based compensation, of $9.9 million and $30.6 million, for the three and nine months ended September 30, 2026, respectively, and increased investment in research and development activities.
Sales and Marketing
Sales and marketing expenses increased by $10.4 million, or 24.8%, for the three months ended September 30, 2026, and by $45.6 million, or 51.6% for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher employee compensation and benefits expense, including stock-based compensation, of $13.0 million and $36.5 million, for the three and nine months ended September 30, 2026, respectively, and increased commercial activity.
General and Administrative
General and administrative expenses increased by $22.0 million, or 41.4%, for the three months ended September 30, 2026, and by $60.8 million, or 42.3%, for the nine months ended September 30, 2026, in each case compared with the corresponding period in 2025. The increases were primarily attributable to higher employee compensation and benefits expense, including stock-based compensation, of $13.7 million and $38.4 million, for the three and nine months ended September 30, 2026, respectively, and higher professional services, facilities and information technology costs, partially offset by lower other operating expenses.
Stock-Based Compensation
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 9,048 | $ | 5,719 | $ | 3,329 | 58.2 | % | $ | 29,128 | $ | 16,262 | $ | 12,866 | 79.1 | % | |||||||||||||||||||||||||||||||
| Research and development | 13,153 | 8,205 | 4,948 | 60.3 | % | 39,345 | 23,945 | 15,400 | 64.3 | % | |||||||||||||||||||||||||||||||||||||
| Sales and marketing | 14,862 | 7,145 | 7,717 | 108.0 | % | 42,750 | 16,975 | 25,775 | 151.8 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 23,046 | 17,084 | 5,962 | 34.9 | % | 62,292 | 43,350 | 18,942 | 43.7 | % | |||||||||||||||||||||||||||||||||||||
| Total stock-based compensation | $ | 60,109 | $ | 38,153 | $ | 21,956 | 57.5 | % | $ | 173,515 | $ | 100,532 | $ | 72,983 | 72.6 | % | |||||||||||||||||||||||||||||||
Total stock-based compensation expense for the three and nine months ended September 30, 2026, increased by $22.0 million and $73.0 million, respectively, compared with the corresponding periods in 2025. The increase was primarily attributable to higher stock-based compensation expense related to PSUs and RSUs of $17.6 million and $51.2 million, respectively, increased expense associated with the 2018 ESPP of $1.8 million and $7.0 million, respectively, and a net increase of $3.1 million and $15.4 million, respectively, related to capitalized stock-based compensation and the cash-settled component of certain stock-based awards, partially offset by a decrease in stock-based compensation expense related to options of $0.5 million and $0.6 million, respectively. The increase was driven principally by (i) grants of new awards to executive officers, (ii) an increase in Bloom's stock price, and (iii) higher employee participation and contributions under the 2018 ESPP.
Other Income and Expense
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||
| Interest income | $ | 22,129 | $ | 5,292 | $ | 16,837 | $ | 63,611 | $ | 20,468 | $ | 43,143 | |||||||||||||||||||||||
| Interest expense | (7,525) | (14,390) | 6,865 | (25,035) | (43,241) | 18,206 | |||||||||||||||||||||||||||||
| Equity in loss of unconsolidated affiliates | (2,897) | (19,599) | 16,702 | (15,553) | (19,599) | 4,046 | |||||||||||||||||||||||||||||
| Other income (expense), net | 12,627 | (1,362) | 13,989 | 21,131 | 3,059 | 18,072 | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | - | - | - | - | (32,340) | 32,340 | |||||||||||||||||||||||||||||
| Gain (loss) on revaluation of embedded derivatives | 10 | (411) | 421 | 225 | (402) | 627 | |||||||||||||||||||||||||||||
| Total | $ | 24,344 | $ | (30,470) | $ | 54,814 | $ | 44,379 | $ | (72,055) | $ | 116,434 | |||||||||||||||||||||||
Interest Income
Interest income is earned on invested cash balances, primarily held in money market funds. Interest income increased by $16.8 million and $43.1 million for the three and nine months ended September 30, 2026, respectively, compared with the same periods in 2025, primarily due to an increase in average invested cash balances following the refinancing of debt into a 0% coupon instrument maturing in 2030. As a result, average balances invested in money market funds for the three and nine months ended September 30, 2026 increased by approximately $1.8 billion and $1.7 billion, respectively, compared with the corresponding periods in 2025.
Interest Expense
Interest expense is primarily due to our debt held by third parties and interest expense related to managed services agreements.
Interest expense decreased by $6.9 million and $18.2 million for the three and nine months ended September 30, 2026, respectively, compared with the corresponding periods in 2025, primarily due to lower interest expense on the Green Notes resulting from conversions and the redemption of the remaining 3.0% Green Notes due June 2028. The decrease was partially offset by amortization of debt issuance costs associated with the 0% Notes issued in November 2025.
Equity in Loss of Unconsolidated Affiliates
During the year ended December 31, 2025, the Company and Brookfield entered into joint venture structures. Brookfield is considered the principal owner, and accounts for the JVs on a consolidated basis. For the three and nine months ended September 30, 2026, Equity in loss of unconsolidated affiliates reflects (i) the ASC 323, Investments-Equity Method and Joint Ventures elimination of intra-entity profit on sales to joint ventures formed with Brookfield-deferred and recognized over the assets' depreciable lives-and (ii) the Company's equity pickup of those joint ventures' net results under the HLBV method. For details, refer to Part II, Item 1, Note 7-Investments in Unconsolidated Affiliates in this Quarterly Report on Form 10-Q.
Other Income (Expense), Net
Other income (expense), net primarily consists of gains and losses from foreign currency transactions and income related to managed services transactions.
For the three months ended September 30, 2026, other income, net was $12.6 million, compared with other expense, net of $1.4 million in the prior-year period. The $14.0 million year-over-year change was primarily due to $9.3 million of income related to managed services transactions and a $4.8 million favorable change in foreign currency transactions.
For the nine months ended September 30, 2026, other income, net increased by $18.1 million compared with the prior year period, primarily due to $20.4 million of income related to managed services transactions, partially offset by a $2.0 million unfavorable change in foreign currency transactions, which moved from a gain in the prior year period to a loss in the current year period.
Loss on extinguishment of debt
Loss on extinguishment of debt for the nine months ended September 30, 2025, was $32.3 million, recognized in connection with the exchange of $112.8 million aggregate principal amount of the 2.5% Green Convertible Senior Notes due August 2025 for $115.7 million aggregate principal amount of 3.0% Green Notes due June 2029, which settled on May 13, 2025.
Gain (Loss) on Revaluation of Embedded Derivatives
Gain (loss) on revaluation of embedded derivatives is derived from the change in fair value of our sales contracts of embedded Escalation Protection Plan derivatives valued using historical grid prices and available forecasts of future electricity prices to estimate future electricity prices. Gain (loss) on revaluation of embedded derivatives for the three and nine months ended September 30, 2026, compared with the same periods in 2025, was not material.
Income Tax Provision
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | $ | 817 | $ | 336 | $ | 481 | 143.2 | % | $ | 2,732 | $ | 1,784 | $ | 948 | 53.1 | % | |||||||||||||||||||||||||||||||
Income tax provision consists primarily of income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance for domestic deferred tax assets, including net operating loss and certain tax credit carryforwards. The income tax provision for the three and nine months ended September 30, 2026, was driven primarily by changes in effective tax rates on income earned by international entities.
Given our recent and anticipated future earnings, we believe there is a possibility that sufficient positive evidence may become available in the future periods to allow us to determine that a significant portion of the valuation allowance recorded against our U.S. deferred tax assets should be released. A release would result in the recognition of U.S. deferred tax assets and a corresponding income tax benefit in the period the release is recorded. The exact timing and amount of the valuation allowance release is dependent on our actual operating results and may be impacted by adverse macroeconomic conditions.
Net (Loss) Income Attributable to Noncontrolling Interests
| Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income attributable to noncontrolling interest | $ | (1,295) | $ | 133 | $ | (1,428) | (1,073.7) | % | $ | 4,309 | $ | 960 | $ | 3,349 | 348.9 | % | |||||||||||||||||||||||||||||||
Net (loss) income attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value ("HLBV") method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as consolidation of a variable interest entity ("VIE").
For the three months ended September 30, 2026, net income attributable to noncontrolling interests decreased by $1.4 million, resulting in a net loss attributable to the noncontrolling interest, compared with the corresponding period in 2025. For the nine months ended September 30, 2026, net income attributable to noncontrolling interests increased by $3.3 million due to higher income allocated to the noncontrolling interest, compared with the corresponding period in 2025. These changes relate to the Korean JV, our consolidated VIE.
Critical Accounting Policies and Estimates
The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United States ("U.S. GAAP"). The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our discussion and analysis of our financial results under Results of Operations above are based on our results of operations, which we have prepared in accordance with U.S. GAAP. In preparing these condensed consolidated financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses, and net income. On an ongoing basis, we base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are representative of estimation uncertainty and are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating the consolidated financial condition and results of operations.
The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, include:
•Revenue Recognition;
•Income Taxes; and
•Principles of Consolidation.
Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operation, section Critical Accounting Estimates in our 2025 Form 10-K provides a more complete discussion of our critical accounting policies and estimates. During the three and nine months ended September 30, 2026, there were no significant changes to our critical accounting policies and estimates.
Bloom Energy Corporation published this content on October 22, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 22, 2026 at 21:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]