ERock — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 reached $152.8 million, an increase of 311.2% year-over-year (YoY) compared to $37.2 million in Q3 2025, and nearly 4x quarter-over-quarter (QoQ) from $39.9 million in Q2 2026.
• Net income for Q3 2026 was $8.9 million, a significant turnaround from a net loss of $19.8 million in Q3 2025 and a net loss of $67.7 million in Q2 2026.
• Adjusted EBITDA for Q3 2026 was $12.6 million, compared to a loss of $9.5 million in Q3 2025 and a loss of $14.0 million in Q2 2026.
• Gross margin improved to 22.9% in Q3 2026 from 9.0% in Q3 2025 and 18.6% in Q2 2026.
• Adjusted Gross Margin was 24.1% in Q3 2026, up from 10.2% in Q3 2025 and 22.2% in Q2 2026.
• Net income margin was 5.8% in Q3 2026, compared to -53.2% in Q3 2025 and -169.8% in Q2 2026.
• Cash and cash equivalents ended the quarter at $548.7 million, up from $108.1 million as of December 31, 2025.
• The company reported no outstanding debt as of September 30, 2026, down from $59.9 million in notes payable at December 31, 2025.
• Contract liabilities (deferred revenue) increased to $490.6 million at September 30, 2026, from $170.0 million at December 31, 2025.
• Inventory levels rose to $147.6 million at September 30, 2026, compared to $43.7 million at December 31, 2025.

Guidance and Future Outlook:

• The Company reaffirmed full-year 2026 guidance for revenue between $435 million and $465 million.
• The Company reaffirmed full-year 2026 guidance for Adjusted EBITDA between $3 million and $9 million.
• The midpoint of the revenue outlook represents approximately 2.5x year-over-year growth.
• Management expects continued revenue and profitability growth in the fourth quarter.
• Projected total manufacturing capacity is expected to reach 2.1 gigawatts (GW) per year in 2028 following the completion of the new Atlas facility.
• New bookings added after the quarter close exceeded $300 million, pushing backlog to a new record.
• The El Paso Electric generation facility for Meta is on track for completion in mid-2027.

Business Segments and Product Lines:

• Power system sales revenues were $136.3 million in Q3 2026, compared to $26.5 million in Q3 2025.
• Ongoing services revenues were $16.5 million in Q3 2026, compared to $10.7 million in Q3 2025.
• Annualized recurring service revenue was $24.7 million as of September 30, 2026, up from $21.1 million in Q3 2025.
• The installed base increased to 1,104 MW as of September 30, 2026, from 1,010 MW in Q3 2025.
• Construction began on the 366 MW El Paso Electric generation facility supporting Meta's data center campus.
• A new manufacturing facility in Houston (Atlas) is expanding capacity by 900 MW/year.
• A long block contract with HD Construction was added to improve supply chain visibility and enable expanded volumes for customers in 2028.
• Contracted Power System Sales Backlog was approximately $1.6 billion as of September 30, 2026, compared to approximately $1.7 billion in Q2 2026 and $0.1 billion in Q3 2025.

Market and Competitive Landscape:

• The Company serves data centers, utilities, manufacturers, healthcare systems, and government organizations.
• Management highlighted strong demand for utility-grade onsite power solutions to address grid constraints, interconnection delays, and outage risks.
• The Company noted its differentiated product and service offerings continue to resonate with customers.

Risks and Challenges:

• The press release lists standard forward-looking statement risks including demand fluctuations, execution of backlog, customer payment risk, project development delays, and supply chain disruptions.
• Specific risks mentioned include reliance on a limited number of customers, competition from larger competitors, operational and safety risks, and regulatory or weather-related risks in Texas and California.
• Risks also include the ability to scale manufacturing capacity, tariffs, trade restrictions, and cybersecurity risks.

Management Commentary and Tone:

• CEO John Carrington stated the quarter marked an inflection point with record production and deliveries driving record revenue and profitability.
• CFO Ian Blakely described the quarter as an inflection point with the company's first profitable quarter as a public company, citing an improvement of $76.6 million in net income and $26.6 million in Adjusted EBITDA compared to Q2 2026.
• Management expressed confidence in expanding manufacturing capacity to meet strong customer demand, citing a robust balance sheet and strong liquidity.
• The tone was positive and confident, emphasizing operating leverage and the ability to serve evolving energy demands.

Other Key Points:

• The Company ended the quarter with $549 million of unrestricted cash and an undrawn $250 million credit facility.
• The company completed its initial public offering (IPO) during the nine months ended September 30, 2026, receiving $554 million in net proceeds.
• During the nine months ended September 30, 2026, the company repurchased Class B Units from pre-IPO owners for $156.9 million and Class A common stock for $27.8 million.
• The company converted convertible notes into common units valued at $36.3 million during the nine months ended September 30, 2026.
• The company paid $75.0 million in payments of notes payable during the nine months ended September 30, 2026.
• Capital expenditures for the nine months ended September 30, 2026, were $29.6 million.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $248.2 million.