Nov 03, 2025 | Posted by Eric Advinci
TLDR: Fluence used its Q3 FY2025 call to spotlight AI data centers as a new growth vector for battery storage, saying it is working directly with leading operators while it tests ultra‑fast response solutions. Revenue rebounded QoQ to $602.5M and backlog held at $4.9B, but FY2025 revenue is now tracking to the low end as U.S. factory ramps catch up.
What changed
Fluence put data centers on the map. Management said the surge and variability of AI workloads create grid‑stress that batteries can buffer, either at the facility or on the grid side, and disclosed active engagement with large operators while solutions are validated. No DC contracts have been signed yet.
Operationally, Q3 revenue bounced to $602.5M with 15.4% adjusted gross margin. Backlog ended flat at $4.9B, pipeline rose to $23.5B, and another $1.1B of deals were signed after quarter‑end. Guidance now points to the low end of $2.6B–$2.8B as U.S. manufacturing ramps to target output by calendar year‑end.
Numbers and specifics
- Q3 revenue $602.5M; QoQ +$170.9M (+39.6%) vs. Q2 $431.6M; YoY +$119.5M (+24.7%) vs. Q3 FY2024 $483.0M.
- Adjusted gross margin 15.4%; adjusted EBITDA $27M; net income $6.9M.
- Order intake $508.8M; backlog $4.9B at June 30 (flat QoQ, +8.9% YoY vs. $4.5B in Q3 FY2024).
- Pipeline $23.5B, +$1.5B QoQ (+6.8%) from $22B prior quarter.
- Post‑quarter: $1.1B additional contracts signed, including ~$700M in Australia.
- Data center opportunity: Management sized potential at $8.5B through 2030; no signed DC agreements yet.
- Policy and trade: OB3 extends storage ITC to 2034; FEOC restrictions; Chinese component tariffs reduced 155.9% to 40.9%; 114% preliminary duty on some graphite (~$5/kWh cost impact).
- Manufacturing ramp: U.S. facilities expected to hit targeted output by year‑end; about $100M of FY2025 revenue shifts to FY2026.
Impact on buyers and operators
For hyperscale and colo operators grappling with AI‑driven load spikes and interconnection constraints, Fluence is positioning BESS as a fast‑response buffer that can be co‑located at the data center or placed at T&D to unlock capacity and improve reliability while projects wait on grid upgrades.
Supply and power
The policy backdrop is supportive for U.S.‑content systems, but FEOC compliance and raw‑material duties still shape costs and sourcing. Management believes it can comply without raising equity.
Timeline and risks
Technical validation of ultra‑fast response for AI loads is ongoing; no DC contracts are signed. U.S. plant ramps are expected to normalize by year‑end; ~$100M of revenue shifts to FY2026. Q4 margins may be softer given a heavier U.S. mix and tariff pass‑throughs.
What to watch next
- First named data center customer or pilot and any MW disclosed.
- Response‑time specs and architecture choice: behind‑the‑meter vs. grid‑side.
- Conversion of the $1.1B post‑quarter wins and FY2026 backlog of $2.5B into deliveries.
- Final Treasury rules for FEOC and graphite duties.
