Good morning, and welcome to Fluence Energy's first quarter 2026 earnings call. Joining me on this morning's call are Julian Nebreda, our President and Chief Executive Officer, and Ahmed Pasha, our Chief Financial Officer.

A copy of our earnings presentation, press release, and supplementary metrics sheet covering financial results, along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures, are posted on the Investor Relations section of our website at fluenceenergy.com. During the course of this call, Fluence management may make certain forward-looking statements regarding various matters and related to our business, including statements related to our future financial and operational performance, future market growth and related opportunities, anticipated growth and business strategy, liquidity and access to capital, expectations relating to pipeline, order intake, and contracted backlog, future results of operations, the impact of the One Big Beautiful Bill Act, projected costs, beliefs, assumptions, prospects, plans, and objectives of management, and the timing of any of the foregoing.

Such statements are based upon current expectations and certain assumptions and are therefore subject to certain risks, uncertainties, and other important factors which could cause actual results to differ materially. Please refer to our SEC filings for more information regarding these risks, uncertainties, and important factors.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today. Also, please note that the company undertakes no duty to update or revise forward-looking statements for new information.

This call will also reference non-GAAP measures that we view as important in assessing the performance of our business, including adjusted EBITDA, adjusted gross profit, and adjusted gross profit margin. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's Investor Relations website.

Following our prepared comments, we will conduct a question-and-answer session with our team. Thank you very much.

I'll now turn the call over to Julian.

Thank you, Chris, and welcome to our stakeholders joining our call today. Turning to slide 4.

This morning, I'll highlight first quarter results and the momentum we're seeing in the US order intake as demand for energy storage continues to accelerate. I'll outline the rapid expansion of our pipeline driven by new customers and emerging use cases, and share the tangible impact of our enhanced sales efforts.

I will also update you on our domestic content strategy and the meaningful progress we've made resolving early production challenges in the US. Ahmed will then cover our financial results and '26 outlook in more detail.

To summarize our financial performance: First, our backlog has reached a record of $5.5 billion, reflecting a clear step up in US contracting activity driven by the One Big Beautiful Bill Act and rising demand forecasts. The midpoint of our revenue outlook is now fully covered by our backlog.

Second, with Q1 now complete, we are reaffirming our fiscal '26 guidance, supported by greater revenue visibility and line of sight on execution, which increase our confidence in delivering this outlook. Third, we ended the quarter with approximately $1.1 billion in total liquidity, which positions us well to support our growth.

Please turn to slide 5 for details on our order intake. During the first quarter, we signed over $750 million of new orders globally.

More than $500 million of these orders were in the US, which represented strong growth from prior quarters. Activity in the US market has been gaining momentum since the passage of legislation last July.

We continue to expect growth in orders across all our core markets for this year, with the US representing about half the total, consistent with our pattern from previous years. Please turn to slide 6 for an update on our pipeline.

We are seeing growing demand from developers, IPPs, utilities, and rapidly expanding data center opportunities. During the quarter, we also ramped up our sales efforts in all our core markets, including expanding our sales channels and outreach to existing and potential new customers.

We're already seeing initial benefits, with an approximately $7 billion or 30% increase in our pipeline, with a majority of growth coming from the US. The task now is to convert our pipeline into signed orders, and this is where we are concentrating our efforts.

Please turn to slide 7 for an update on expanding sources of growth. We are seeing growing interest in our products from new customer segments as well as new use cases.

In terms of new customer segments, our biggest opportunity is data centers. We are engaged in discussions covering 36 gigawatt-hours of projects, including customers with large portfolios, such as hyperscalers.

We are working through technical reviews with them and working closely to show how our technology fits their specific needs. I would note that many of the 36 gigawatt-hours of data center projects are not yet included in our pipeline, which represents meaningful upside opportunity.

Another area of growth is long-duration energy storage, where we are in early discussions with 34 gigawatt-hours of projects, largely in Europe and the US. SmartStack leading density positions us well to compete for these applications.

Long-duration projects, by definition, require more volume and therefore provide an additional growth opportunity. In addition to new customer segments, we are seeing an evolution in the way our customers use battery storage.

Historically, our solutions have been used together with renewable projects to firm up their power generation. Utilities have also used our product to store electricity that can be utilized during peak demand periods, also known as energy shifting, or in specific locations to support grid needs.

Today, we're seeing new and developing uses for our battery solutions by large energy users such as data centers and C&I facilities. These include: First, speed to power.

Storage can speed interconnection to the grid by adapting power demand to the grid capabilities and avoid the delay and expenses of grid upgrades. Second, quality of power.

Storage can inject reactive power to resolve voltage disturbances, manage demand including disconnection from the grid when needed, and provide smooth ramp rate control, among others. We believe that no other technology can offer these three capabilities combined at competitive terms.

Third, backup power. Energy storage lower cost and longer duration enables replacement of higher-cost and carbon-intensive thermal gensets that have traditionally served this need.

Fourth, support of on-site generation. For bring-your-own-generation applications, energy storage can match up behind-the-meter power with the customer's energy needs by adding flexibility and efficiency to dispatchable generation or firming up capacity for renewable sources.

Please turn to slide 8 for an update on our domestic supply chain. Let me highlight three developments that are strengthening our competitive advantage and keeping us reliably on schedule.

First, our domestic content supply chain is now performing at the levels necessary to meet our delivery schedule. Cell and module production continue to run ahead of the plan, and our enclosure manufacturing facility in Arizona is now on track to meet our projected needs.

Additionally, we continue to expand and diversify our domestic supplier base to enhance our flexibility and cost-competitiveness. Second, on battery cells, we continue to make progress with AESC in resolving the prohibited foreign entity, or PFE, status of its Tennessee facility.

Our overall priority is to secure competitively priced, PFE-compliant domestic cells. AESC is looking at various paths to addressing the ownership aspect of PFE compliance.

We are confident that the outcome will be consistent with our stated objectives to secure competitively priced, PFE-compliant battery cells. Third, we are encouraged by the growing momentum of domestic manufacturing of components for BESS.

Several facilities are shifting their EV battery lines into BESS production. This will enable valuable diversification to our supplier base.

We believe that building multiple domestic cell partnerships will optimize pricing, resiliency, and the supply we need to support our growth. Before turning the call to Ahmed to discuss our financial results, I am pleased to update you on the satisfactory resolution of two pending legal matters.

The first is on Moss Landing, where the matter was settled for an immaterial amount by the company in conjunction with our insurers and subcontractors on confidential terms. The settlement includes a full release of claims with no admission of responsibility or liability for the 2021 overheating incident.

The second is on the Diablo Canyon project, where Fluence has obtained a court dismissal of Diablo's $230 million disgorgement claim. With that, I will turn the call over to Ahmed.

Thank you, Julian, and good morning, everyone. As Julian mentioned, in the first quarter, we generated strong momentum towards achieving our goals for the year.

Across our global portfolio, we executed reliably for customers and capitalized on strong growth trends by increasing our backlog to a record level. We also maintained our strong liquidity position that is integral to our strategy and growth objectives.

More specifically, starting with slide 10. We generated Q1 2026 revenue of $475 million, 14% of our full year guidance and nearly double the 18% of full year 2025 revenue earned during Q1 2025.

This performance was in line with our expectations and keeps us on track to meet our full year 2026 revenue guidance. Our adjusted gross profit for the quarter was $27 million, representing an adjusted gross margin of 5.6%, well below our full year expectation of 11% to 13%.

The result reflects cost impacts in two discrete areas, most of which we expect to recover over the remainder of this fiscal year. The variance reflects two specific factors: First, we incurred approximately $20 million of additional costs, a majority of which were associated with two specific projects outside the US.

We expect these costs will be largely recovered over the course of this year, consistent with our experience in resolving similar items in the past. Second, our gross margin reflects our typical first quarter margin dynamics where revenue is more lightly weighted while fixed overhead costs are spread relatively evenly across the year.

Historically, this creates 1 to 2 percentage quarterly margin swing that normalizes over the course of the fiscal year. The lower gross margin also drove adjusted EBITDA to negative $52 million for the quarter.

In short, our first quarter gross margin reflects the lower revenue weighting and some discrete project-specific items, not systemic or structural issues. Turning to slide 11 for a broader perspective on our adjusted gross margin and how disciplined project execution and revenue growth initiatives translate to the bottom line.

As you can see, we have been steadily improving our gross margin. Even with the softer result this quarter, our rolling 12-month adjusted gross margin is 12.3%, a solid double-digit result.

This resilience reflects our disciplined execution and reinforces our confidence in our ability to deliver on our commitments to our stakeholders. Beyond this year, we expect continued margin improvement, driven by strong execution, supply chain-enabled cost advantages, innovation, and scale as energy storage demand continues to grow.

Turning to slide 12 for an update on our liquidity. We ended the quarter with total liquidity of approximately $1.1 billion, reflecting the strength and flexibility of our balance sheet.

This includes $477 million in earning cash and an additional $617 million available through our credit facilities. Our liquidity position underscores the discipline with which we are managing the business and provides us with the capacity to continue investing to drive future growth.

Turning to slide 13 for our 2026 guidance. We are reaffirming the ranges we introduced last quarter, reflecting our strong visibility into the year and continued momentum we see across our business.

This confidence is grounded in three factors: First, the midpoint of our full year 2026 revenue guidance is now fully covered by orders in our backlog. Second, we have ordered all equipment required to meet our commitments, minimizing supply chain and commodity price risks.

Third, we have clear visibility into the operating cost structure needed to deliver margins in the 11% to 13% range. On that basis, we are reaffirming our full year outlook.

We expect revenue in the range of $3.2 to $3.6 billion, with a midpoint of $3.4 billion. We expect annual recurring revenue to reach approximately $180 million by the end of fiscal 2026, and we continue to expect adjusted EBITDA in the range of $40 to $60 million for the full year.

In summary, with the right building blocks in place, our focus remains on disciplined execution for our customers and delivering value to our shareholders. With that, I will now turn the call back to Julian for his closing remarks.

Thanks, Ahmed. Let me summarize today's call with a few takeaways.

First, strong financial foundation. Our Q1 performance and record $5.5 billion backlog puts us on track to achieve our fiscal year '26 guidance.

We ended the quarter with $1.1 billion of liquidity, giving us strong visibility and flexibility to support growth. Second, US momentum is accelerating.

This quarter, our order intake exceeded $750 million globally, with over $500 million coming from the US, reflecting increasing demand driven by recent legislation and a strengthening of market fundamentals. Third, pipeline and growth opportunities are expanding.

Our pipeline grew by approximately $7 billion or 30%, led by US demand, with additional upside from data centers and long-duration energy storage projects not yet fully reflected in the pipeline. Fourth, broader use cases and differentiated technology.

We are seeing expanding applications for storage, particularly from data centers and large C&I customers, where our solutions are uniquely positioned to serve emerging customer needs. Fifth, execution and risk reduction.

We continue to strengthen our global supply chain by expanding and diversifying our suppliers base. In summary, we see accelerating demand, improving visibility, and a strengthening of our execution, which together reinforce our confidence in meeting our commitments to customers and deliver long-term value for shareholders.

With that, we will now open the call for questions.

Hi. Good morning, everyone, and thank you so much for taking my question.

Good morning, George.

Maybe just to focus for a second on AESC, and I know you're in the process of resolving the ownership stake there. Could you just help guide us as to what resolution will look like?

Because there are several potential outcomes to this. Just help us understand how you're framing this for us.

Thank you.

Yeah. Thanks, George.

Our main objective in our relationship with AESC is ensuring that we have access to PFE-compliant cells at competitive terms. That's our main objective.

That's our priority number one. As part of that, we've been working with them on ensuring that they meet all the different conditions of BBBBA.

In terms of ownership, which is your specific question on, we made them a proposal. Our understanding today is that they will resolve that problem in some other form.

We got assurances from them that they will meet the conditions of the law, that they will resolve that problem, and they will resolve it without the need for us to get involved in the ownership structure of that plant. For us, as we have been working with them for many years.

We trust them very much. We think they're going to do it, and we're working with them and waiting for them to give us more light.

Today, they have not communicated to us the details of how they expect to do it, but we're very confident they will meet the lines of the law and the conditions. In terms of the other ones related to material assistance and IP and all of that, as part of our process, we have all that information, that's worked well.

It's the ownership where we still need to wait. I will make that point that I think is very, very important if you allow me, which is a side point here: The market for cells in the US is expanding like crazy.

We have all these EV battery lines that are converted now into BESS. We're seeing for the first time, plethora of projects of people offering all types of things.

We are, if you tell me, we will see here in the US something similar what we saw in China 2 years ago, or 3 years ago when all these EV lines converted into BESS. We're very excited about what the prospects for a company with our structure and our strategy will do in the US during the next couple of years, no?

I think this is a great time, this is a great opportunity. We are very confident on AESC, and we are very, very optimistic about the future for the market for battery storage in the US due to how the market is changing the dynamics.

We saw what happened in China last couple of years when the EV demand came down and how that allowed for our markets to grow and then it brought in more suppliers, better quality. It really changed how the packed market changed.

We're excited about this time.

If I may ask a follow-up, it's great segue into what the competitive environment looks like. I would imagine some of these data center bake-offs, some of the big hyperscalers don't want to use one of their competitors as a supplier.

Are you seeing any increased competition from the likes of Ford, who's doing the exact thing that you mentioned, converting some of their cell supply into energy storage-related cells? Help us understand what the landscape currently looks like, particularly in data centers.

Thank you.

I don't think the competitive landscape has changed today. There have been other people there.

I don't think the competitive landscape has changed at all. What we have seen is a significant diversification of battery cell suppliers.

It probably will change over time. I don't disagree that it might change, and because of some people might decide to do different things.

What we have today is no real changes in the competitive environment, but a real change in the way the supply for battery cells in the market, especially for the second half of '26. There will be new entrants.

This market is exciting, it's growing crazy. There will be new entrants in the market, and we compete in the world with our Chinese competitors who is the support of their government.

Here competing against some of these players, I don't think it will be more difficult than what we do globally. We like competition.

It's a great driver of our innovation, and it allows me to wake up early, let me put it that way. I sleep very well, but wake up early, excited about what we're doing.

Hey, excited about the prospects for the US market. The golden years of battery storage are coming, are starting.

Thank you.

Thank you, George.

good morning, Brian.

Morning. Thanks for taking

the questions.

Morning. How you doing?

Doing well.

Good. Thank you for taking the questions.

I guess just starting on the data center-related pipeline, the 36 gigawatt-hours, it's pretty impressive, grew again quarter-on-quarter. I guess the focus and the execution question now is, first, how much have you actually converted to backlog, and is there any of that in the $750 million of bookings you reported this quarter?

Then secondly, It's a big number, 36 gigawatt-hours. Can you just kind of give us a sense of the outlook and conversion ratio, timing that you're targeting, maybe when do we really start to see this move into bookings and P&L impact for you?

Right. To tell you the truth, These are the new type of use cases, no?

There we have served data centers with in front of the meter solutions with the renewable companies. Those were not included in this 36 gig.

These are behind the center or dedicated lines to data centers, it's a behind the meter or dedicated lines to data centers. Slightly different that we have done globally, just the first point.

To answer your question concretely, we have not converted into backlog any of the new data center pipeline, no? That's today.

This is a new market segment for us. It's a market that we have not served directly before.

Before September or before a couple of months ago, we were serving this company indirectly. It's a new market segment.

We are engaging with them, but it's very, very difficult for us at this stage to give you a clear view of how much of that will convert and how will it work over time. However, we do, when we look at the pipeline and we look at the maturity of the projects that we're working with, we should expect something happening in the second half of the year, let's say, fourth quarter, third or fourth quarter of the calendar year.

That's what we should expect to do some conversion of this. We clearly would love to do it earlier.

As this is becoming such an important segment that as we learn more about it, we will probably communicate more. As of this stage, unfortunately, we are learning how to do this, working with them at the first time.

As you can imagine, the supply chain things are very detailed, and There's a lot of value involved, great big projects. It's a lot of work we're going through that, our teams are learning and working very well.

Today, we do not have an actual number that I can share with you. What's exciting about this, if I can give you, Brian, the point, is that how fast is growing?

That's today is what we are communicating. This is growing very fast.

We think we have a competitive advantage. We look at the other technologies, we believe we can do better than anybody else.

Hey, and we're working very hard. You'll see it goes very much to our capabilities, how to interconnect, where we excel.

That's what we're so excited about it. Today, as it is a new market segment, we cannot provide more clarity on it.

Absolutely. No, that's great color.

Maybe just two quick follow-ups on the guidance. One on the $20 million of incremental costs here related to the two projects.

Can you elaborate on kind of what those costs exactly were, and then how you plan to recover those costs through the course of the year, the $20 million? Then secondly, obviously, you're pretty bullish on the outlook for energy storage broadly, whether data center or not.

You're saying that the guide is fully covered by backlog. With pipeline and bookings continuing to grow, maybe it's a little bit too early, it's only fiscal Q1, but how would you characterize the upside potential to your kind of 2026 guidance outlook here starting off the year?

Thank you, guys.

I will go with the guidance for the year, and then Ahmed can give you the details on the gross margin, on the two projects. I'll tell you on the guidance, our approach to our performance is that We're working towards meeting our guidance, we're committed to meeting our guidance.

That's what you should expect from us. That most of what we like to provide you better opportunities will be for '27 onwards.

That's what we want to do. If you ask me today, our order intake first quarter will be the lowest one of the year.

It will be the low point of the year, and we should be able to go and deliver better order intake that will provide stronger visibility for '27. That's how we expect to do it rather than giving you a quarter-to-quarter point.

We want to keep this year where it is or in line with our guidance, hopefully, the top side, or whatever, but We're working towards making '27 how we provide good news to the market. That's what we're working.

Today, we cannot provide guidance on '27, but That's what we're working on, and that's the way you should think about our company. Ahmed.

Sure. Hey, Brian.

The $20 million impact, the impact is at two projects, non-US projects, two different countries, different technologies, different stages of completion. The change is essentially the change in scope of the project in both cases.

One is the scope change in equipment, and the other one is in the schedule. I think our plan is to basically, as we have done in the past, is whenever these changes happen, we always recover those under the contract from our customers.

That is what we plan on doing during the rest of the year. Feel pretty good that we can recover this impact.

Helpful. Thanks, guys.

I'll pass it on.

Thank you, Brian.

Hey, good morning, Dylan.

Thanks for taking my question. Morning.

Just wanted to check. Tesla mentioned on their earnings call that they foresaw some Megapack margin pressure this year.

I think they named some things like competition, tariffs, and the like. Just wanted to check, have you seen any kind of intensification on any of these issues recently, or you feel like you've already accounted for this all in your current outlook?

Yes, we also saw that. We don't see any major competitiveness, no real changes.

Unless Tesla is referring to us, maybe. That's the only thing I can think of, they're saying that hey, to Fluence.

In terms of tariffs and all of those stuff, I think we are very much alike. We're confirming our guidance with a view that there's no real change.

We are not very clear what they were referring to, so.

Got it. Thanks.

The competitive environment, which has always, as very, very intense, not any different. The tariffs have been very stable, the so we don't expect any major changes in '26 numbers there.

Some movement, no real movement. No, we're confident in what we are confirming today.

Got it. Thanks.

Appreciate that. Then for my follow-up, just kind of given some of the margin headwinds this quarter, can you kind of confirm that if you do end up being the acquirer of the AESC facility, that you feel good about kind of the your liquidity situation and no need for any kind of external capital to transact?

Yeah. No, from AESC perspective, we already talked about in the last call, we have factored that in in our forecast and that we shared in last quarter outlook for the year.

Feel pretty good.

As I've said, I don't think we don't expect that they will resolve this issue some other way, so that's our understanding.

Got it. Thank you.

Hey, good morning, team. Can you guys hear me okay?

Yeah. Hey, Julian, how are you?

Hey, pleasure. Fantastic.

Maybe just to follow up on the data center opportunity here. I wanted to press a little bit further.

How are you thinking about your products fitting into what the data center community wants, especially when it comes to ramp time and reactivity? Again, I get that the product could work, but how do you think about it fitting into your product road map, if you think about this?

Again, there's probably an iterative nature of what they're looking at versus what you're providing here. Could you speak to that a little bit?

Then separately related, how do you think about setting expectations to include explicitly data centers into your pipeline and backlog specifically?

Yeah. In terms of our product road map, I think as we have communicated, there are different needs that we're meeting.

I would say in the great majority of needs, there's no real change, and we have a very strong competitive advantage. Why?

Densest product, safe, very safe, with our design, the risk of a thermal runaway is very limited. Reliability, we have our reliability, last year, that's it was close to 99%, very few people can do this.

We've done very, very well. Cyber security, nobody, we've been working very, very strong.

We're very, very happy on that part. There for one of the needs, which is the quality of power, they need response time of below 10 milliseconds.

We have our road map to deliver that part. When I looked at the pipeline, that's one of the areas where we are competing with other technologies and where that's not what's driving the contracted we see today.

There's some projects that are connected to that, but that's not what's driving. We want to serve it, we want to do, and we're offering these very, very quick response time.

Just to be clear, today it is more connected to speed to power and to bring-your-own-generation applications than necessarily to quality of power, no? We are very confident.

We are also, we're not a competitor of the data centers. We've been very as you know historically a company that has been very customer-centric, we and these are big buyers, we are adapting the way we contract, the way we speak to them.

I think that we are in a very, very good position. In terms of how to, as I said, unfortunately, on your second question, on our ability to give you a proper guidance on when will things will go into the pipeline and when will convert it into backlog, these are new customer segments, for us we're learning, no?

We are moving forward, and we're I think we're getting better and better every day, and my sales team is really excited about this, and we brought in Jeff, who's doing a great job on this. Today it's very difficult to commit to this.

Additionally, as hey, I have to be very careful with my competitive information, we've been trying to provide you as much information as we can without necessarily playing our card of what we're doing, because there are a lot of people trying to do this job, and we don't want to provide them with competitive information. That's where we are.

Excited about the growth, excited about how we fit into it, excited about the way we approach our customers, that will work very well with these customers, and with our product, and our product will do a wonderful job, and hopefully we will see more and more coming up. As this market segment develops for us, we should be able to provide you more clarity.

Got it. All right.

Just maybe not quite ready. Then on AESC, just to clarify earlier, you would not expect an ownership outcome?

This is more of a contracting relationship, and ergo, perhaps we could see other potential counterparties that you'd be negotiating with for your domestic cell supply? That

I would say we have an MSA, the MSA would stay respective. We provided AESC an opportunity for us to take ownership on it, which they now have resolved with that.

Our contract will not change at all. We will be an offtaker, our technology is very much intertwined, and we understand that the solution that AESC is working on, which I'm not, I don't have the details, will not affect in any way any of the issues we have.

We were trying to resolve this issue for them, and so we gave them what we thought was a good offer, but clearly they have something better, some other solution that is much more attractive. No.

We will be an offtaker. We'll continue being an offtaker of that facility as we move forward, so.

Right. You could add a second offtake just to expand your do-

Oh, we already Remember, last quarter, we already added a second offtake, and as I told, we already are working with some of these EV lines that are converted into BESS, and that market is getting very, very exciting, and as I said, this is no different than what we saw in China 2 years ago or 3 years ago, when you had all that EV capacity that suddenly didn't know where to go. I think this is a good opportunity, no?

Yeah. Awesome.

All right, guys. I'll leave it there.

Thank you.

Thank you.

Yeah. Hey, good morning, guys.

Thanks for taking our questions. Julian, I just want to go back to something you said in the prepared remarks.

When you're talking about some of the data center opportunities not being in the pipeline, are you saying that that would be in addition to the 36 gigawatt-hours that you're specifically calling out for data centers, or are you saying some of the 36 gigs of data center pipeline is not included in your $30 billion kind of overall pipeline? Then maybe just some color on kind of what delineates what goes in and what stays out.

Mark. The 36 gigawatt-hours we have there are projects we're working on, some are in the pipeline, some of them are leads.

We're giving you that number because that compares to the 30 gigs we gave you last quarter. In order to get into our pipeline, we need to ensure that we believe there's a more than a 50% probability of the project occurring within the next 2 years, exactly.

Some of these projects, these are new things, we are trying to and we're very careful, because we want to be sure that what comes into our pipeline, that drives another set of decisions internally, how we invest, manage our So we're very careful looking at these. As these things have been coming in very, very quickly, we're looking at them and deciding which going to our pipeline.

Some of them will probably not become part of our pipeline over time, but the ones that come into our pipeline is because are the ones who are going to be investing money and providing offers and doing the engineering and working on them. The 36 gigs, if let's say if they were all to convert into the pipeline it's an upside to the pipeline we have today, to the $30 billion pipeline we have in front of us.

Okay. All right, that's helpful.

Thank you. On the the long-duration side, don't take this as a as a complaint, 30 34 gigawatt-hours is is a very big number.

It is down from what you were talking about last quarter, I I just want to ask ask kind of what's going on there quarter-over-quarter.

No, that's good point. Last quarter, we talked about what we believe the TAM was, or the addressable market was, the 60 gigs, of which we had no portion.

We put our teams to look at that, and these are now this 30 gigs are projects that we are either in pipeline or in leads, people that were working on preparing the engineering, looking at it, identifying. The numbers are different.

The other one was more of a TAM. I'm sorry that I saw that in a few notes that we created that confusion.

The 60 gigs last time was a more total addressable market that we saw at the time. Though that included projects that were in markets that we do not serve or customers we don't work with or things of that.

Now the 30 are projects that have the potential to become part of our pipeline, because they are in markets we serve, with customers we like to work with, and we're just going over the work on how much of it that we believe has a 50% chance of really which and the 50% chance looks at interconnection, land rights, ensuring that things move. Exactly, a project that has not a pie in the sky.

Great. Thank you.

I'm sorry for the confusion of that point. I I had read that in a couple of notes, and, I I we probably were not clear enough that last time that the 60 the 60 was a TAM, not a not a projects and and leads that we were working on.

Good morning, Ahmed. Good morning, Julián.

Morning.

Thanks for taking this question here. Just given your commentary on strengthening the domestic supply chain and module cell output ahead of plan, can you give us a sense of the mix of US-made versus imported cells that's kind of embedded in your '26 delivery plan?

Specifically, how much of that supply is kind of already on hand or contracted for the year, and then I have a follow-up.

Okay. I'll have Ahmed walk you through the numbers.

Hi. Good morning.

The mix is roughly half and half, I think, is the domestic versus import.

Imported,

yeah. Your second question was, sorry, I missed that.

That's fine. Then I asked, how much of that supply is already on hand or kind of contracted for the year?

We have secured 100% of our domestic and international needs for this year.

Okay. So.

Then secondly, just to draw on that, right? As we kind of think about this gross margin or structural gross margins, can you help us frame the gross margin delta between systems that are built with non-PFE US-made cells versus today's imported mix under the current 48% tariff load?

I think we look at, frankly, from our perspective, it's blended rate. The guidance we have given is 10% to 15%.

It all depends on the project scope. Sometimes we have EPC, sometimes we don't.

I think net-net, that is what we are looking at, between 10% to 15% margin.

Regardless of where the cells come from, when it's non-PFE and with extra tariffs, there's no-

Yeah. I think it could be, depending upon situation, but net-net, that's where we land in that range.

Thank you.

Hey, good morning. Thank you for taking my question, guys.

My question is around leverage, but I want to get at it from volume. Could you talk to the amount of volume, because you have this massive pipeline that you could execute on.

Just how do you think about your contract manufacturers in your own supply chain, people, and capital constraints that you guys have, if you want to go up to, say, 10 GW a year or something like that. What is the process for that, and how much flexibility do you guys have to ramp and execute that?

Then specifically, outside of manufacturing at your contract manufacturers, on the liquidity side, because we did see you do a capital raise for working capital. As these numbers get bigger, I know you have $1 billion of liquidity-plus, but that might not be enough as we start talking bigger numbers.

If we can just sort of address that. Thank you.

I will address the supply chain, and I will ask Ahmed to talk about working capital and the capital plan. On supply chain, the way we work is we have a long-term plan of volume that has a base case, that has an upside case, and it has a hit it out of the park case.

We serve those needs with different sources of suppliers that work in a way, we have base suppliers that support our normal work, upside suppliers that have execution capability, and we also identify players of which we can play at. We feel very comfortable we have this supply chain to go even beyond what our upside cases that we communicate to significantly above that.

It's a work of working with our suppliers with building a little bit of spare capacity, providing suppliers that have spare soft capacity they can deliver. It's a little bit of a renegotiation strategy, and it has been working well, and my ambition would be to use it.

To be able to use it today, and we believe that where the world we're entering to, this might be probably an option that will happen. In terms of capital, I will ask Ahmed to respond.

Sure. I think you're right.

We have $1 billion liquidity, which we believe is sufficient to support our current plan. In terms of the additional capital needs, Julian talked about today significant opportunities we see, and those opportunities will require additional capital, once we've materialized, I think, and then we will be frankly opportunistic to see how we can raise that capital.

At the end of the day, we will be very mindful of creating value for our shareholders. I think that's our job as a management.

Then

just a follow-up on the leverage side. Could you just talk about what type of scale and translate in that to operating leverage under the current gross margins if that's what we should expect even as your volume grows, or does that gross margin get bigger, is there any leverage there?

Then how that translates into operating margin, if you can give me any framework there. It's helpful.

Thank you.

I'll tell you the way we think about this actually is that you should assume that our gross margin will stay the same, and our ability to grow our EBITDA will come out of our operating leverage. How do we think about it?

Our overhead would only grow at half and no more than half of the growth of our top-line growth. Say if our top-line growth goes at 100, our overhead will grow at less than 50%.

That's where the operating leverage is, and that's how you should think about it. If you believe that we can grow at let's say at 100, then that operating leverage gives you significant EBITDA growth.

That's a 41. Great.

Thank you, guys.

It's great.

Thank you, guys.

Thank you.

Good morning, everyone. A lot of discussion about competition and Julian, you highlighted significant opportunities as well.

I wanted to ask, how important is it for you to be vertically integrated given the rising competition? How are the M&A opportunities that you see today?

Then finally, could you share the threshold of return for you to make an acquisition, whether it's AESC or someone else, how do you look at the possibility of M&A in terms of accretion or return on invested capital? What's that threshold?

Yes. How do we think about vertical integration?

We're very much integrated with our suppliers, because our suppliers sell back to us our designs, our IP, that's how will work. Very much we're using our own engineering is what's driving our supplier base.

Generally, our contracted manufacturers are allowing us to have a competitive cost with access to the technology we need. We don't really see a strong need for vertical integration, no?

Things change that you could think about it, but today we don't see any strong need to do it. We can work with contracted manufacturers that integrate our technology into hardware and our software into hardware, that we can then convert into product at a very, very competitive price.

We're happy on that. In terms of any acquisition generally, it has to be accretive for us.

That's how we looked at it when we were evaluating the potential acquisition of AESC or participating in that deal, it has to be accretive, it has to make sense. The accretion needs to reflect the additional risk that you take when you integrate vertically, because what the great capability we have is that we are very agile.

We can have three or four different battery manufacturers integrated into our system, that we have developed our SmartStack, that it can integrate any battery. I'll tell you more.

We can make any battery great, no? Using political slogans, but it is true.

Any battery, we can make it great if you put it into our system. That's why that's our approach to supply chain.

If we were to integrate vertically, we will lose that agility and that ability to get things. We also take that into account when we were looking at the AESC, at least.

Hey, we need to take into account that we're going to lose some of the agility we have today, that today we are talking with a plethora of potential suppliers that we can integrate, all of them with different capabilities, and we can make them all great, no? So.

Got it. Thank you.

As a follow-up, could you provide a split of leads versus pipeline in data center and long-duration sort of numbers that you've shared on the slides? Could you also remind us how do you define leads versus pipeline in this category?

Thank you.

Yeah. Roughly, in between leads and pipeline, roughly 25%.

The difference between leads, 25% of the 34 36 gigawatt-hours are in pipeline today. In order to go into a pipeline, it needs to be a project that we believe have a within the next 2 years has a 50% chance of we all converted into backlog for all.

We looked at, we said a customer that we will do with, that he has a good credit, that the project is real, there are a lot of people talking a lot of stuff. You go sit down, and it's just an idea, those things we don't bring it into our pipeline, because what comes into our pipeline drives cost, drives engineering, drives planning, we are very, very careful what comes in and what.

I think my main point on data centers is how fast is moving, no? We have to see how this a big market opportunity converts into real execution within the next quarters.

Got it. Thank you.

Thank you.

Good morning. Thank you for taking my question.

Christine.

I just have a clarification, I guess, on the last response. I think last quarter when you talked about the 30 gigawatt-hours, at least at the time of the call, you had said half was in the pipeline and now you're saying 25%.

Just curious as to what drove the change over the last quarter.

Things come in and out, maybe because that when we did the engineering, it didn't work, or things come in and out all the time, no We're very excited about where we are. That's it.

Not saying that we're giving you information that usually we don't communicate on how but these things move in and out all the time, and as we go in and put in the money and things doesn't work, the price there's no way you're going to do what you want to do, we take it out of the pipeline, and tell the customers, "Go and figure out what you want to do," or some other source, some other issue.

Okay. Then if I look at your pipeline from the $23 billion to $30 billion, just nominally, the US went from $10 billion to $17 billion.

Just based on all the comments that you just talked about with the data center, is it fair to say that increase was primarily driven by your typical front-of-the-meter customer?

That's right. That's right.

We reorganized the company with this growth group now, rather than having at the regions. We brought in Jeff Monday to help us run that group.

He dedicated the first quarter of preparing the pipeline, expanding our capabilities of business development, and you see some of the results in this new pipeline numbers we have.

Thanks, everyone, for joining our call today. Please reach out with any additional questions, and have a great day.