Good morning, ladies and gentlemen, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy Fourth Quarter and Fiscal Year-End 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. And I would now like to turn the conference over to Tom Gelston. You may begin.

Good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded. This morning, FuelCell Energy released our financial results for the fourth quarter and fiscal year 2024, and our earnings press release is available in the Investors section of our website at www.fuelcellenergy.com. Consistent with our practice, in addition to this call and our earnings release, we have posted a slide presentation on our website. This webcast is being recorded and will be available for replay on our website approximately two hours after we conclude the call. Before we begin, please note that some of the information that you will hear or will be provided with today consists of forward-looking statements within the meaning of the Securities Exchange Act of 1934. Such statements express our expectations, beliefs and intentions regarding the future and include, without limitation, statements with respect to our anticipated financial results, our plans and expectations regarding the continuing development, commercialization and financing of our fuel cell technology, and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risk factors and uncertainties. More information regarding such risks and uncertainties is available in the safe harbor statement in the slide presentation and in our filings with the Securities and Exchange Commission, particularly the Risk Factors section of the most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During the course of this call, we will be discussing certain non-GAAP financial measures, and we will refer you to our website and to our earnings press release in the appendix of the slide presentation for a reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website under Investors. For our call today, I'm joined by Jason Few, FuelCell Energy's President and Chief Executive Officer, and Mike Bishop, our Executive Vice President, Chief Financial Officer and Treasurer. Following our prepared remarks, we will be available to take your questions and be joined by other members of the leadership team. I'd now like to hand the call over to Jason for opening remarks. Jason?

Thank you, Tom, and good morning, everyone. Thank you for joining us on our call today. In the fourth fiscal quarter and the week since the close of the quarter, we've achieved solid performance and taken proactive steps that we believe better position our business for the future. Fourth quarter revenue more than doubled year-over-year, mainly driven by module sales to Gyeonggi Green Energy, or GGE, in South Korea. And while full fiscal year 2024 revenue was down compared to the prior year, we expect to deliver meaningful revenue growth in fiscal year 2025 and we will continue to exercise cost discipline in deploying capital for growth opportunities. As I do every quarter, I would like to start by underscoring our business and purpose. For those of you who are new to our story as well as for those who know us well, our purpose is to enable a world empowered by clean energy. So, what does this mean? It means leveraging our proprietary fuel cell technology platform, our considerable intellectual property portfolio, including hundreds of patents, our geographic footprint and our talented team to provide energy solutions for our customers. Next, on Slide 4, I'd like to provide an overview of our key messages for the quarter. First, subsequent to the end of the fourth fiscal quarter, FuelCell announced a global restructuring plan that aims to realign our team and capital to focus on our core technologies and target sales where we see the strongest demand in the near term; data centers, distributed power generation, grid resiliency and carbon recovery for utilization. We believe the actions we've taken will better position us from the perspective of focused product solutions and cost, helping us to start fiscal year 2025 building on our fourth quarter 2024 momentum. I will speak in…

Thank you, Jason, and good morning to everyone on the call today. Let's begin by reviewing the financial highlights for the quarter shown on Slide 12. For the fourth quarter of fiscal year 2024, we reported total revenues of $49.3 million compared to $22.5 million in the fourth quarter of fiscal year 2023, an increase of 120%. Net loss was $39.6 million in the fourth quarter of fiscal year 2024 compared to a net loss of $29.5 million in the fourth quarter of fiscal year 2023. The resulting net loss per share attributable to common stockholders in the fourth quarter of fiscal year 2024 was negative $2.21 compared to negative $2.07 in the fourth quarter of fiscal year 2023. Adjusted EBITDA totaled negative $25.3 million in the fourth quarter of fiscal year 2024 compared to adjusted EBITDA of negative $30.8 million in the fourth quarter of fiscal year 2023. Please see the discussion of non-GAAP financial measures, including adjusted EBITDA, in the appendix at the end of our earnings release. Finally, the company held total unrestricted cash, restricted cash, cash equivalents and short-term investments of $318 million as of October 31, 2024. Next, please turn to Slide 13 for additional details on our financial performance and backlog. The chart on the left-hand side graphically shows our fourth quarter revenue composition by line item. Product revenues for the fourth quarter increased to $25.4 million compared to $10.5 million in the prior-year quarter. This increase was primarily driven by $18 million of revenue recognized under the long-term service agreement with GGE for the replacement of six fuel cell modules. Additionally, we recognized $7.7 million of revenue under the company's sales contract with Ameresco, under which the company is to provide a 2.8-megawatt platform to the Sacramento Sewer District. Note that product revenues…

Thank you. And we will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of George Gianarikas with Canaccord Genuity. Your line is open.

Hi, good morning, everyone. Thanks for taking my questions.

George, how are you? Good morning.

Doing great. How are you?

Doing great. Thank you.

I'd like to ask about the recent restructuring and the growth expected in fiscal '25. Can you just sort of talk about what the new operating model of the firm is, your breakeven levels, growth profiles, et cetera? I know that the '25 growth is being impacted by some module shipments, but just generally, how -- what you think about the growth trajectory of the firm and what the restructuring does for your profitability profile? Thank you.

George, thank you for the question. So, as we move forward on the restructuring, part of that was focused on shortening the horizon to us getting to profitability. Secondly, it's an acknowledgment of narrowing our focus from a product standpoint and where we see the marketplace going in terms of adoption of clean energy technologies. And so, by going through the restructuring, we've been able to, one, reduce our cost to about 15% is what we expect for 2025. We've also realigned resources against the opportunities that we see as short- and medium-term opportunities given the current market dynamics. And we think that that's going to help us create stronger growth. As we've talked about, we expect to see growth in 2025. In addition to that, we think that's going to allow us to better position and leverage our sales pipeline to turn those -- that pipeline into closed transactions, and that's going to help us get to a positive EBITDA sooner than what we had originally thought we would do given the investments we were making to really take advantage of the clean energy transition that we had originally seen or I think even the market had seen that we now know is going to move at a different pace.

Can you help us quantify those levels just in terms of what the revenue profile look, I think, to get to EBITDA and maybe even free cash flow breakeven? Thank you.

So, good morning, George. This is Mike. Just to add on to what Jason said, beyond what we're doing on the operating cost side and he mentioned reducing operating cost by 15%, also looking across the business, we have targets in our material for CapEx spending, that's going to be in the $20 million to $25 million range, down from last year. So, looking to take costs out of the business. Specific to your question around revenue, we do have good visibility to revenue going into 2025. We've said we expect a material increase in revenue really being driven by the GGE module deliveries. You've seen that come through in our fourth fiscal quarter, and you'll certainly see that come through next year. So, all of those things together help us bring down our EBITDA use. We saw a good step forward this quarter compared to last year, about $5 million reduction in EBITDA use. As far as when we'll get there from a breakeven perspective, we have not put out an exact date yet, but the goal of the company is to continue to drive cost reduction across the business, whether that be product costs, operating costs or managing our CapEx spending very tightly.

Thank you.

Thank you.

And your next question comes from the line of Saumya Jain with UBS. Your line is open.

Hey, good morning, guys. Could you provide more detail on the opportunities for tri-gen? I guess, how you guys are seeing 45V play out?

Good morning, and thank you for the question. We -- maybe I'll start with 45V first. We are hearing rumblings that 45V that there'll be something that comes out before Christmas, but we certainly don't know that for sure. That's kind of the word on the street, if you will. And we anticipate that there'll be some modifications to the original release by the Treasury that had this notion of a three-pillar strategy. We think that, that will probably change. With respect to tri-gen and specifically in hydrogen, there's certainly been a move to the right, we think, in terms of adoption of clean or zero-carbon hydrogen as part of this uncertainty around things like 45V. So, we anticipate as the rules get clear, that will see open the door for opportunities around platforms like our tri-gen platform to -- which has the ability to produce low to zero carbon or carbon-neutral hydrogen still by utilization of fuels. And we continue to see strong commitment on the transportation side, both from heavy duty Class 8 vehicles as well as firm commitments from major automobile manufacturers like Toyota and Honda that are committed to hydrogen-based transportation, and we think those things will continue to create opportunities for that platform in addition to platforms that generate hydrogen leveraging electrolysis.

Got it. Thank you.

And your next question comes from the line of Noel Parks with Tuohy Brothers. Your line is open.

Hi, good morning. I just had a couple. I wanted to pick up on manufacturing capacity and your plans there. And I wonder from a timing standpoint, as you have discussions around power generation, data center demand and so forth, is there an inflection point you see maybe that you're particularly trying to guide the [production] (ph) capacity growth toward? I was wondering if there is a bulge ahead -- sort of a bulge year ahead in terms of contracts, deployment timeframes. So, any thoughts there would be great.

Sure. Noel, good morning. This is Mike, and thanks for the question. So -- and really good question and a really good opportunity for the company. As we sit here today from a production capacity perspective, we talked about last year reducing the production volumes that we had in our factory given the timing of certain orders and now that we have the GGE order in backlog, we're able to increase our production rate from where we were at the end of 2024, as we go into 2025 to fulfill that order and potentially other orders down the road that you alluded to. So, from -- and obviously increasing the production rate lowers cost, gives us more ability not only to lower cost in the factory, but across the supply chain. From an overall -- so that's kind of setting the stage. We're operating -- we were operating at 25 megawatt, looking to increase a bit from there. When you look at capacity of our factory in Torrington, today, we have machinery that can do 100 megawatts. We have a footprint and we have certain processes in Torrington that can do up to 200 megawatts. So, that's an opportunity for the company as these potential orders get larger and, of course, we're fulfilling the GGE project right now, which is a 60 megawatt project. We look at the data center opportunity that you alluded to as 20 megawatt and up bite sizes that we can be -- that we can deploy assets into. So, our factory is here, it's ready. And as those opportunities become backlog, we will be able to deliver quickly on those, and again, be able to bring down costs as we're doing that and be competitive with our offerings.

Great. And just you mentioned being able to deploy sort of in a bite-sized manner. Do you, just in general terms, sort of see that as a set of customers or a steady set of customers that are looking to build out in that manner? Or -- I'm thinking as opposed to hyperscaler looking for a large project that they're going to maybe do [indiscernible] all at once. So, just curious as to what you think the deployment pace might look like.

Yeah, no. This is Jason. Thanks for that question. We see it as an opportunity across both segments, as you described it. I mean, we certainly see in the conversations that we're having, if you take hyperscalers as an example, the way in which they build out those data centers, what we're seeing is block sizes in anywhere between 16-megawatt to 30-megawatt block sizes to even though a particular data center may be planning to get to over 1 gigawatt in size, they're not starting there. But what you need to be able to do is, demonstrate your ability to be able to scale on the same delivery timeline that, that data center provider has. And we feel very comfortable in our ability to do that. If you refer back to the slide -- the page in our deck, which is Slide 9, I think we demonstrate where we've got large platforms deployed today in the 20-megawatt block size and larger. We've got those today deployed in configurations that are commensurate with what you're seeing data center customers ask for, including microgrid configurations in order to deliver the level of reliability and resiliency that you need in a data center operation. So, whether those orders come with a single customer in a block size or in multiple customers in those block sizes, we feel very confident in our ability to deliver. And we feel even more confident in the fact that we can show customers demonstrated examples of us doing exactly what they're asking for in these data center applications and we've been doing it for a number of years. So, we feel really strong and good about our use cases that we can show customers.

Great. Thanks a lot.

Thank you.

[Operator Instructions] And your next question comes from the line of Dushyant Ailani with Jefferies. Your line is open.

Hey, guys. Thanks for taking my question. The first one, just wanted to talk a little bit about the gross margin profile. I know you touched on margins a little bit for an earlier question, but how do we -- going into 2025, how do we think about margins for product and the other segments?

Sure. Dushyant, this is Mike, and I'll take that one. So, when you look at our product margin for this quarter, negative product margin. I'd say that the GGE deliveries are profitable, but -- and given some of the comments I made earlier, given the current production volume of the factory, we're still dealing with overcapacity costs, manufacturing variances. So, that's what's driving the overall corporate product margin negative. Given our restructuring and increasing volumes, we expect that to improve over time. And as far as generation margins, when you look at the comparison there, a couple of things. One, we had a derivative gain coming through last year. This year, there's a derivative loss. When we look at generation, we really look at it on an EBITDA basis. So, essentially this quarter, when you peel out depreciation, when you peel out the derivative impact, the EBITDA margin is around 22% range. And obviously, we will be looking to drive that higher as we continue to optimize our fleet and work to take costs out of the business.

That's helpful. And then, my second question was just on the capital raise, the $21 million. What's the rationale behind that? And then, how do you think about -- into 2025, do you think that's something you'll tap into more or do you feel comfortable with the liquidity?

So, good question. The company feels comfortable with our liquidity as we sit here today. We've really had a several-pronged approach in raising capital. One is to really make sure that we're smart about monetizing the assets that we have on balance sheet. As we announced at the end of the fiscal year, we closed a financing with the U.S. Export-Import Bank around GGE. So that's providing us working capital financing for that project. That's at a fixed interest rate of about 5.8%. And we've also -- as you've seen on our balance sheet, also done project financings around operating assets that the company owns, whether it be tax equity and monetizing the tax benefits or back-leverage debt at a fixed interest rate. In addition to that, the company has raised capital in the public markets through an at-the-market sales program, that has been to augment the balance sheet and keep us in a strong cash position. And I'd say, we continue to monitor our liquidity on a quarter-by-quarter basis and we'll do prudent financing when it makes sense for the company.

Got it. Thank you.

Thank you.

Thank you.

And ladies and gentlemen, that concludes your question-and-answer session. I will now turn the conference back over to Mr. Jason Few for closing remarks.

Thank you, Abby. Thank you all for listening in today. I hope you come away from this call understanding the important steps we have taken as a company to position ourselves for the future, all while remaining optimistic about the opportunities in front of us. I wish everyone a wonderful holiday season and a prosperous New Year. Thank you again for joining.

And ladies and gentlemen, this concludes today's conference call, and we thank you for your participation. You may now disconnect.