The most important piece of information from Bloom’s Q4 earnings report was the company announcing its total current backlog at $20 billion, including $6 billion in product backlog, up 2.5X, and $14 billion in service backlog, up 1.5X.
The backlog was driven by “half a dozen” hyperscale and neocloud customers compared to one customer a year ago.
Bloom says the product backlog is attributable to its existing contractual commitments for purchases by a financier or customer in the future, including expected product revenue and anticipated ITC/tax incentives.
Product backlog grew 140% year-over-year. Service backlog includes revenue for contracted operation and maintenance services for past and future product sales, in terms ranging from five to 20 years, meaning this backlog will take much longer to convert.
Growing Capacity is “Normal Business” for Bloom
In response to questions around future capacity expansion, management emphasized that scaling production is a routine, low-risk decision rather than a large capital event for Bloom. In particular, Bloom is capital-light with returns on incremental capacity realized within a few months. As a result, capacity additions are expected to occur continuously on a quarter-by-quarter basis rather than through infrequent step-changes.
Here is what was stated:
“Typically, it takes more than a year to stand up a greenfield data center. It takes more than a year to stand up a factory from permits all the way to full implementation. We can be ready for them before then. So this is a continuous decision we will make going forward, quarter after quarter. The reason we signaled to you last year that we are going from 1 to 2 gigawatts was, there was concern in the market about do we have a pipeline, do we have an order? We just wanted you to show how much confidence we had. So we signaled that. And now we all understand why we are expanding. But going forward, we'll just continuously keep expanding our capacity, and that's just normal business for us.”
800 Volt DC will Separate Bloom from Competitors
The incoming transition to 800-volt DC power architectures represents a structural shift in how AI data centers are designed and powered. As rack densities climb and facilities scale toward gigawatt levels, traditional AC and lower-voltage DC systems become inefficient.
By standardizing on 800-volt DC, data center operators can future-proof new deployments for higher power loads while improving total cost of ownership, making this shift a foundational enabler of next-generation AI infrastructure.
Bloom Energy’s solutions fit naturally into the transition toward 800-volt DC architectures because the company was designed around DC-native, on-site power generation, rather than retrofitting legacy AC systems.
Here is what was stated on the call:” The upcoming AI computer racks will consume almost 100x more power than traditional CPU compute racks of yester years to reduce copper use, increase efficiency and enhance compute density. AI racks will be architected to receive 800 volts DC.”
Bloom’s Absorption Chillers Further Reduce Energy Requirements
We’ve covered Bloom’s value proposition in previous analysis, yet the Q&A this evening discussed an additional benefit with their on-site power generation. When power is produced at the data center, high-quality waste heat becomes available and can be repurposed to drive absorption chillers, converting thermal energy into chilled water for cooling. For Bloom Energy, this creates a meaningful competitive advantage that we haven’t covered in the past. In the Q&A exchange, it was stated that absorption chilling combined with on-site power generation can reduce electricity consumption by 20% to 30%.
Here is what was stated:
“Now with on-site power generation being the go-to option, a necessity option, for data center customers. If we are generating power for them on site, in addition to our extremely high electrical efficiency, we have high-quality heat, and that heat is allowed to drive a very well-established technology called absorption chilling to provide cooling. We think we can reduce electricity usage in the data center by at least 20% to 0%. That's a big number for this huge power-hungry gigawatt plus data centers. And what do we do with that? It's chilled water at somewhere around 5 degrees Celsius or 40-degree Fahrenheit coming in. We have systems now that we are operating in this mode chilling and cooling our factory just to demonstrate to customers. Customers are super interested in the solution right now because it is more efficient, less expensive.”
Financials
2025 Revenue up 37.9%, 2026 Guided to Increase 58%
Bloom once again delivered revenue more than 20% above analysts' expectations, with Q4 revenue of $777.68 million beating the consensus estimate for $643.5 million by 20.5%. This represented 35.9% YoY growth, decelerating from 57.1% YoY growth in Q3; however, sequential growth was very strong at 49.8% QoQ, accelerating from 29.4% QoQ in Q3 – this is because Q4 is typically Bloom’s seasonally strongest quarter.
For the full year, Bloom reported record revenue of $2.02 billion, driven by significant AI data center growth and demand from commercial and industrial sectors. This represented 37.9% YoY growth.
For 2026, Bloom guided for a sharp acceleration to 58% YoY at the midpoint of its guide for $3.1 to $3.3 billion, supported by its capacity expansion towards 2GW. This is a notable 24% beat over the current consensus estimate for $2.58 billion in revenue in 2026, and also would represent just 16% of its total $20 billion backlog.
Key Segments
Products, installation, and service revenue growth remained solid in Q4, though electricity revenue continued to decline.
Product revenue was $638.5 million in Q4, up 35.4% YoY and 66.1% QoQ, though YoY growth did decelerate from 64.4% as Q4 faced a much tougher, seasonally strong comp. FY25 product revenue increased 41.1% YoY to $1.53 billion.
Installation revenue was $67.3 million in Q4, up 86.4% YoY, though this did decelerate from 105.2% growth in Q3. FY25 installation revenue increased 66.9% YoY to $204.1 million.
Service revenue was $61.7 million, up 14.7% YoY, decelerating slightly from 15.5% in Q3. FY25 service revenue increased 6.9% YoY to $228.3 million.
Electricity revenue did reaccelerate in Q4 but growth continued to decline. Q4 revenue declined (5.3%) YoY to $10.2 million, improving from Q3’s (25.1%) decline. FY25 electricity revenue was $60.3 million, up 14.2%.
Margins Rebound Sharply QoQ
Bloom’s margins showed a sharp sequential rebound in Q4 but remained lower on a YoY basis. Full year margins showed expansion across the board with the exception of GAAP net margin, while GAAP operating margin moved a bit further into positive territory albeit remaining razor thin.
Bloom reported GAAP gross margin of 30.9% in Q4, down 7.4 points YoY but up 1.7 points QoQ. Adjusted gross margin was 31.9%, also down 7.4 points YoY but up 1.5 points QoQ.
GAAP operating margin was 11.3% in Q4, down 7 points YoY but up 9.8 points QoQ. Adjusted operating margin was 17.1%, down 6.2 points YoY but up 8.2 points QoQ. Bloom noted that it continues to focus on reducing product cost and driving operating leverage, which will likely be much more visible in 2026 based on its current guide.
GAAP net margin was 0.1% in Q4, down 18.2 points YoY but up 4.5 points QoQ – to note, Bloom incurred a $66.2 million debt conversion expense charge that negatively impacted GAAP income this quarter. Adjusted net margin was 17.2%, down 3.5 points YoY but up 10.4 points QoQ.
For the full year, Bloom reported GAAP gross margin of 29%, up 1.5 points YoY, while adjusted gross margin expanded 1.6 points to 30.3%, coming in ahead of guidance for 29% and reflecting the progress Bloom is making on reducing product costs.
FY25 GAAP operating margin expanded 2 points to 3.6%, remaining quite thin, while adjusted operating margin expanded 3.6 points to 10.9%, ahead of guidance for 8.6%. GAAP net margin was (4.3%), widening from (2%), while adjusted net margin was 9.8%, expanding from 4.4%.
For 2026, Bloom guided for adjusted gross margin to be 32%, up 1.7 points YoY, and adjusted operating margin to expand 3.2 points to ~14.1% at midpoint. This will be driven primarily by operating leverage as Bloom is targeting decreasing its adjusted operating expenses from 19% of revenue in FY25 to 15% in FY26.
EPS and Adjusted EBITDA
Bloom reported GAAP EPS of $0.00 in the quarter, though adjusted EPS saw a large 50% beat, coming in at $0.45 versus the $0.30 estimate.
For FY25, GAAP EPS was ($0.37), widening from ($0.13), while adjusted EPS was $0.76, increasing 171.4% YoY. For FY26, Bloom guided for adjusted EPS to be $1.33-$1.48, up 86.2% YoY and beating the $1.12 estimate by 25.4%.
Turning to adjusted EBITDA, Bloom reported $146.1 million in Q4 for an 18.8% margin, down 6.9 points YoY but up 7.4 points QoQ. FY25 adjusted EBITDA was $271.6 million for a 10.9% margin, up 3.6 points YoY.
Cash Flows and Balance Sheet
Q4 is seasonally Bloom’s largest quarter for cash flows, with operating and free cash flow margins in excess of 50% this quarter, though this was much lower than the >80% margins it reported in Q4 2024. However, these large margins simply offset weak cash flows in the rest of the year, with full-year margins in the single-digit range.
Operating cash flow was $418.1 million in Q4 for a 53.8% margin, down from an 84.6% margin in the year ago quarter. FY25 operating cash flow was $113.9 million for a 5.6% margin, down 0.6 points YoY. Bloom is guiding for OCF to be ~$200 million in FY26, representing a ~6.3% margin at midpoint.
Free cash flow was $395.1 million in Q4 for a 50.8% margin, down from an 82.7% margin in the year ago quarter. FY25 free cash flow was $57.2 million for a 2.8% margin, expanding 0.5 points YoY.
Bloom reported $2.45 billion in cash, though debt rose to $2.61 billion, as Bloom raised $2.5 billion in convertible notes while also paying down $975 million in existing debt in the quarter.
Conclusion:
Bloom’s positioning has the I/O Fund looking for a repeat. While it’s understandable for investors to gloss over large backlog numbers, Bloom is in the rare position to actually execute comparatively quickly given they are emphasizing they can move faster than a greenfield data center project. Keep an eye out specifically on the product backlog of $6 billion as the company now has 6 customers and is not on your typical long-dated delivery timeline.
Please note: The I/O Fund conducts research and draws conclusions for the company’s portfolio. We then share that information with our readers and offer real-time trade notifications. This is not a guarantee of a stock’s performance and it is not financial advice. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis. Beth Kindig and the I/O Fund own shares in BE at the time of writing and may own stocks pictured in the charts.
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