Electricity generation and hydrogen production company Bloom Energy (NYSE: BE) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 19.5% year on year to $401.2 million. The company expects the full year’s revenue to be around $1.75 billion, close to analysts’ estimates. Its non-GAAP profit of $0.10 per share was significantly above analysts’ consensus estimates.

Is now the time to buy BE? Find out in our full research report (it’s free).

StockStory’s Take

Bloom Energy’s second quarter results were marked by strong revenue growth and a significant improvement in profitability, yet the market reacted negatively. Management attributed the quarter’s momentum to heightened demand from data center operators, especially those supporting artificial intelligence workloads, and to new partnerships with major utilities and hyperscalers. CEO K.R. Sridhar highlighted that “time to power” and reliability were decisive factors in recent customer wins, citing rapid installations for clients such as Oracle and Quanta Computer. The company’s focus on operational discipline, product cost reduction, and the expansion of its service business contributed to higher margins and a consistent trend of profitability over the past six quarters.

Looking ahead, Bloom Energy’s forward guidance rests on the belief that accelerating demand for on-site, reliable power for AI and digital infrastructure will drive further growth. Management expects the new Oracle partnership to serve as a reference point for future deals with hyperscale data center operators, while ongoing product enhancements—like combined heat and power features—are anticipated to broaden the customer base. Sridhar emphasized that “the pace of business now allows us to shrink the sales cycle dramatically,” and that recent tax credit policy changes provide additional tailwinds. However, management acknowledged that project timing and customer readiness remain variables that could affect revenue recognition in the coming quarters.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to rapid adoption by data center operators, ongoing product enhancements, and fiscal discipline across manufacturing and service operations.

• Data center partnerships accelerate: Bloom Energy’s collaboration with Oracle to power AI-focused data centers marked its first direct engagement with a hyperscaler. CEO Sridhar described this as “significant” due to the project’s scale and the capability to deliver islanded, grid-independent power within 90 days, demonstrating the company’s ability to meet urgent industry needs.

• Manufacturing and cost discipline: The company’s decision to level-load manufacturing and maintain tight control over product costs led to a 650-basis-point improvement in gross margin year-over-year. Acting Principal Financial Officer Maciej Kurzymski stressed that this operational approach has supported six consecutive quarters of profitability in the service business and is expected to continue improving margins.

• Expansion of production capacity: Management announced plans to double factory capacity from 1 to 2 gigawatts per year by the end of next year, citing a “secular” trend in demand driven by growth in digital infrastructure and the limitations of legacy grid solutions. Sridhar noted that this investment is supported by increased visibility in the order pipeline and broader industry capital expenditure trends.

• Combined heat and power (CHP) innovation: Interest in Bloom’s CHP solution, which allows customers to use waste heat for cooling or steam, is rising across both data center and industrial clients. Sridhar highlighted that this feature can reduce energy costs by offsetting traditional cooling needs, making the product more attractive for energy-intensive facilities.

• Policy and regulatory support: The restoration of U.S. tax credits for fuel cell systems has improved the business case for customers, with Sridhar clarifying that there is “zero gap” in tax credit eligibility for buyers. The updated policy is expected to help sustain demand and support margin stability despite changes in credit amounts over time.

Drivers of Future Performance

Bloom Energy’s outlook centers on further data center adoption, ongoing product improvements, and operational efficiency, but also notes project execution risks.

• Scaling with data center demand: Management expects continued growth from hyperscalers and digital infrastructure customers, especially as rapid deployment and modularity become more critical. The Oracle partnership is viewed as a “reference project” that could accelerate additional wins, while direct collaboration with utility partners like American Electric Power expands the addressable market.

• Product evolution supports profitability: Ongoing enhancements, such as real-time data analytics from digital twins and the rollout of combined heat and power features, are expected to drive operational improvements and customer value. Management believes these upgrades will help sustain margin gains and differentiate Bloom’s offerings versus traditional turbine solutions.

• Execution and timing risks: While the company’s guidance assumes robust demand, management acknowledged that project timelines depend on customer readiness, permitting, and site development. Delays in these areas could shift revenue recognition even if underlying demand remains strong, and the company’s large-scale capacity expansion carries execution risk.

Catalysts in Upcoming Quarters

Over the next few quarters, the StockStory team will be monitoring (1) the pace and scale of new data center deployments, including follow-on contracts with hyperscalers and utilities; (2) execution on the planned expansion to 2 gigawatts of manufacturing capacity; and (3) adoption rates for new product features such as combined heat and power. Progress on international market entries and the ability to maintain margin improvements will also be key signposts for Bloom’s ongoing performance.

Bloom Energy currently trades at $41.87, up from $37.39 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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