Fluence Energy (NASDAQ:FLNC) executives highlighted record backlog, accelerating U.S. contracting momentum, and expanding opportunities in data centers and long-duration energy storage during the company’s fiscal first-quarter 2026 earnings call. Management reaffirmed full-year guidance, while acknowledging that first-quarter margins were pressured by discrete project costs and typical seasonal dynamics.
Backlog reaches $5.5 billion as U.S. orders accelerate
President and CEO Julian Nebreda said Fluence ended the quarter with a record contracted backlog of $5.5 billion, which he attributed to a step-up in U.S. contracting activity following the passage of legislation last July and rising demand forecasts. Nebreda added that the midpoint of Fluence’s revenue outlook is now fully covered by backlog, increasing management’s confidence in execution and visibility for fiscal 2026.
Pipeline expands 30% as Fluence targets new customer segments
Fluence reported an approximately $7 billion, or 30%, increase in its pipeline during the quarter, with the majority of growth coming from the U.S. Nebreda said the company ramped sales efforts across core markets by expanding sales channels and outreach to both existing and prospective customers, and that Fluence is now focused on converting pipeline into signed orders.
Management also discussed growth from new customer segments and use cases. Nebreda identified data centers as a key opportunity and said Fluence is engaged in discussions covering 36 GWh of projects, including with customers that have large portfolios such as hyperscalers. He noted that many of those data center opportunities are not yet included in the company’s pipeline, representing potential upside.
On the call, Nebreda emphasized that Fluence has not yet converted any of the newer behind-the-meter or dedicated-line data center opportunities into backlog. He said the company expects some conversion in the second half of the calendar year, but added that it remains difficult to predict conversion timing and magnitude because the segment is relatively new to Fluence.
In long-duration energy storage, Nebreda said Fluence is in early discussions covering 34 GWh of projects, largely in Europe and the U.S. He clarified that a previously discussed 60 GWh figure was a view of total addressable market, while the 34 GWh reflects projects and leads in markets and with customers Fluence is actively pursuing.
In response to analyst questions, Nebreda explained how Fluence determines whether opportunities are included in pipeline, saying projects generally need to have more than a 50% probability of occurring within the next two years. He also said roughly 25% of the data center and long-duration figures discussed are currently in the pipeline, with the remainder categorized as leads.
First-quarter results reflect discrete costs and seasonal margin dynamics
Chief Financial Officer Ahmed Pasha reported fiscal first-quarter 2026 revenue of $475 million, which he said represents 14% of full-year guidance. Pasha said performance was in line with expectations and keeps Fluence on track to meet its full-year revenue outlook.
Adjusted gross profit for the quarter was $27 million, with an adjusted gross margin of 5.6%, below the company’s full-year expectation of 11% to 13%. Pasha attributed the shortfall to two factors:
- Approximately $20 million of additional costs, primarily tied to two specific projects outside the U.S.; Pasha said most of these costs are expected to be recovered over the remainder of the fiscal year, consistent with past experience.
- Typical first-quarter margin dynamics, where revenue is more lightly weighted while fixed overhead costs are spread relatively evenly across the year, historically creating a 1% to 2% quarterly margin swing.
Pasha said the lower gross margin drove adjusted EBITDA to negative $52 million for the quarter, but stressed that the margin pressures were not “systemic or structural.” He added that Fluence’s rolling 12-month adjusted gross margin was 12.3% despite the first-quarter softness.
On the nature of the $20 million cost impact, Pasha later told analysts it stemmed from project scope changes, including equipment changes in one case and a schedule change in the other, across two non-U.S. projects in different countries and at different stages of completion. He said Fluence plans to recover the costs under customer contracts.
Liquidity, domestic supply chain progress, and AESC relationship
Fluence ended the quarter with approximately $1.1 billion of total liquidity, including $477 million in cash and $617 million available through credit facilities. Pasha said the liquidity position provides flexibility and capacity to invest for growth.
Nebreda said Fluence’s domestic content supply chain is performing at levels needed to meet delivery schedules, with cell and module production running ahead of plan and the company’s enclosure manufacturing facility in Arizona on track to meet projected needs. He also said Fluence continues to expand and diversify its domestic supplier base.
Regarding battery cell sourcing, management discussed ongoing work with AESC related to “prohibited foreign entity” (PFE) compliance. Nebreda said Fluence’s priority is securing competitively priced PFE-compliant domestic cells and that AESC is pursuing paths to address the ownership aspect of compliance. He said Fluence has received assurances AESC will meet legal requirements and resolve the ownership issue without Fluence needing to get involved in ownership of the facility. He also noted expanding U.S. cell supply as EV battery lines shift toward battery energy storage system (BESS) production.
When asked about the mix embedded in the fiscal 2026 delivery plan, Pasha said it is roughly half domestic and half imported, and that Fluence has secured 100% of its domestic and international needs for the year.
Guidance reaffirmed; legal matters updated
Fluence reaffirmed its fiscal 2026 guidance, citing backlog coverage, equipment already ordered to reduce supply chain and commodity price risks, and visibility into operating costs to support margin targets. Management reiterated expectations for:
- Revenue of $3.2 billion to $3.6 billion (midpoint $3.4 billion)
- Annual recurring revenue of approximately $180 million by the end of fiscal 2026
- Adjusted EBITDA of $40 million to $60 million
In Q&A, Nebreda said the company’s focus is on meeting fiscal 2026 guidance and that it is working to build stronger visibility for fiscal 2027, noting that he expects first-quarter order intake to be the lowest of the year.
Nebreda also said Fluence reached a settlement related to Moss Landing for an “immaterial amount” in conjunction with insurers and subcontractors, on confidential terms, including full relief of claims with no admission of responsibility or liability related to a 2021 overheating incident. He added that Fluence obtained a court dismissal of Diablo Canyon’s $230 million disgorgement claim.
About Fluence Energy (NASDAQ:FLNC)
Fluence Energy is a leading global provider of energy storage products and services, specializing in the deployment of advanced battery systems to support grid stability and renewable integration. The company develops, engineers and delivers turnkey energy storage solutions designed to optimize the reliability, efficiency and economic performance of power networks. By combining hardware, software and lifecycle services, Fluence addresses the growing need for flexible energy assets in an evolving electricity landscape.
The company’s core offerings include modular energy storage platforms that pair lithium-ion battery technology with control and optimization software.
