Fluence Energy’s second quarter was marked by a negative market reaction as revenue growth did not meet Wall Street expectations, largely due to production delays in its U.S. facilities. Management attributed the underperformance to slower-than-anticipated ramp-up at its Arizona manufacturing plant, which disrupted the timing of customer deliveries. CEO Julian Nebreda noted, “We recorded approximately $603 million in revenue, which was below our expectations, mostly due to delays in ramping up volume at our U.S. manufacturing facility.” Despite these setbacks, the company pointed to robust international demand and progress in resolving domestic production issues as supporting factors for future quarters.
Is now the time to buy FLNC? Find out in our full research report (it’s free).
Fluence Energy (FLNC) Q2 CY2025 Highlights:
- Revenue: $602.5 million vs analyst estimates of $763.4 million (24.7% year-on-year growth, 21.1% miss)
- Adjusted EPS: $0.06 vs analyst estimates of $0.01 (significant beat)
- Adjusted EBITDA: $27.36 million vs analyst estimates of $13.19 million (4.5% margin, significant beat)
- The company reconfirmed its revenue guidance for the full year of $2.7 billion at the midpoint
- EBITDA guidance for the full year is $10 million at the midpoint, in line with analyst expectations
- Operating Margin: 0.7%, in line with the same quarter last year
- Deployed Megawatts for Digital Contracts: 21,600, up 3,300 year on year
- Backlog: $4.9 billion at quarter end, up 8.9% year on year
- Market Capitalization: $1.04 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 Q2 Earnings Call
- Brian K. Lee (Goldman Sachs) asked about margin variability and backlog profitability. CEO Julian Nebreda explained that Q4 margin softness is driven by U.S. tariff costs but expects margins to normalize as new contracts take effect.
- Dylan Thomas Nassano (Wolfe Research) pressed on direct data center engagement and contract timing. Nebreda confirmed no direct contracts yet but stated Fluence is actively developing solutions for the segment, with initial demand estimates provided.
- David Keith Arcaro (Morgan Stanley) sought clarity on U.S. demand following new legislation. Nebreda reported that previously halted contracts have resumed and customer activity is recovering as policy uncertainty eases.
- Julien Patrick Dumoulin-Smith (Jefferies) questioned the timing and impact of FEOC-compliant equipment orders. Nebreda responded that Fluence is prioritizing compliance ahead of regulatory deadlines, aiming to maintain its supply chain advantage.
- Justin Lars Clare (ROTH Capital) inquired about offsetting tariff-related margin pressures and supply chain alternatives. Nebreda indicated these are temporary issues, with new contracts expected to restore target margins and additional sourcing options under evaluation.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will monitor (1) the resolution of U.S. production ramp-up issues and their impact on revenue timing, (2) the pace of new contract awards in the U.S. as regulatory clarity and customer confidence return, and (3) the company’s progress in expanding direct engagement with data center operators. Continued backlog growth and successful adaptation to evolving domestic content requirements will also be key markers of execution.
Fluence Energy currently trades at $8, down from $9.25 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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