Capstone Green Energy Corporation

Good day, ladies and gentlemen, and welcome to the Capstone Green Energy Earnings Conference call and webcast to report the financial results for the third quarter of fiscal year 2026, ended December 31st, 2025. All participants will be in a listen-only mode throughout today's call. Following management's prepared remarks, we will take questions from covering analysts and address any questions that have been submitted in advance and those submitted during the webcast. If you are participating via webcast and would like to submit a question to management, please click on the Q&A button located on your screen and enter your question in the Q&A section. Questions may be submitted at any time during the call. As a reminder, today's conference call is being recorded. At this time, I would like to turn the call over to Alfredo Gomez, Capstone General Counsel. Alfredo, please go ahead.

Thank you very much. Good afternoon and thank you for joining Capstone Green Energy Holding Inc.' 's third quarter fiscal year 2026 earnings conference call. On the call with me today are Vince Canino, the company's president and chief executive officer, and John Miller, the company's interim chief financial officer. On February 12th, Capstone Green Energy Holdings Inc. issued its earnings release for its third quarter fiscal year 2026 financial results, which ended December 31st, 2025. During today's call, we will be referring to slides that can be found on the company's website under the Investor Relations section. This conference call contains forward-looking statements representing the company's views as of today, February 12, 2025. Other than as required by federal securities laws, the company disclaims any obligation to update or revise these statements to reflect future events or circumstances. You should not place under-reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Please refer to the safe harbor provisions set forth on slide two of the accompanying presentation in today's earnings release and in Capstone's filings with the Securities and Exchange Commission for information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. Please note that as Mr. Canino and Mr. Miller go through the discussion today, when they mention EBITDA, they're referring to adjusted EBITDA, which is a non-GAAP financial measure, and the reconciliation to net income can be found in the earnings release and the appendix to the presentation slides. I would like to now turn the call over to Vince Canino, the company's president and chief executive officer. Thank you, Alfredo, and good afternoon, everyone.

I appreciate you joining us today. Turning to slide four, the third quarter was another strong period for Capstone Green Energy. Our results reflect continued momentum across the business with revenue growth, margin expansion, and improved profitability driven by disciplined execution of our three pillar strategy. For the quarter, revenue was 26.8 million, up 33% from same period prior year. Year-to-date revenue reached $83 million, a 42% increase over the same period last year. This growth was fueled by higher demand for our larger capacity products and strong performance in our service businesses. Our strategy is working. The operating leverage created by our straightforward and executable three-pillar strategy continues to show up in our results. Our strong revenue growth leveraged by the discipline from our financial health pillar and the systems, tools, and processes deployed under our sustainable excellence pillar continue to create strong delivery in adjusted EBITDA. Q3 marks our seventh consecutive quarter of positive adjusted EBITDA, as well as our best adjusted EBITDA for a quarter at $5.1 million, contributing to a year-to-date adjusted EBITDA of over $12.3 million, which outpaced all of fiscal year 2025 by over $4 million. Let's move to slide five. Our trailing 12-month revenues are now running at $110 million, up $7 million from prior quarters trailing 12-month revenues of $103 million. We continue to see a shift in product mix from our smaller, high-volume C65s to larger big-box units and at power blocks of multiple megawatts. Today, it is estimated that power outages in the United States alone have increased by approximately 93% over the past five years. According to a recent EIA or Energy Information Administration report, the frequency of power interruptions has been the highest than any year in the past decade, with the average outage duration being over 11 hours. The EIA data indicates that the major contributors to those outages are due to weather and grid disturbances. Simply put, Businesses are realizing that in order to maintain steady operations, power is becoming a problem, and they are crossing the chasm to making either an OPEC spend through rentals or a CAPEX spend for permanent installation of behind-the-meter combined heat and power solutions. The Department of Energy released a report in July of 2025 warning that blackouts could increase by 100 times in 2030 as a result of the retirement of existing generation and delays in adding new firm capacity beyond solar and wind. The report goes on to state that if the US continues to shutter reliable power sources and fails to add firm capacity, this will become a major problem beyond the needs of AI-driven data center growth. Allowing 104 gigawatts of firm generation to retire by 2030 without timely replacement could lead to significant outages, especially when weather conditions limit the output of wind and solar. Even though the 104 gigawatts of retired generation is planned to be replaced by 209 gigawatts of new generation by 2030, only 22 gigawatts of that generation comes from firm baseload generation resources. This is where distributed generation now enters center stage. Moving on to slide six. In this quarter's cost-out corner highlight, we want to showcase an example that directly aligns with one of our core values, the little things matter. At first glance, decals may seem insignificant in the grand scheme of bill of materials, but our philosophy is simple. You can't do extraordinary things unless you get the little things right. And when you consistently execute small, low-effort cost improvements, those savings compound into something meaningful. For many years, we outsourced the manufacturing of decals across our entire product line. That arrangement proved to be highly restrictive as our needs evolved. More importantly, if even a single decal was damaged, we were forced to reorder an entire set, driving unnecessary costs from what could have been a simple, isolated error. When the supplier was unwilling to offer flexibility, the team ran the opportunity through our DFMA program, which produced a should cost that was significantly lower than what we were paying. As the team evaluated alternative options, it became clear this process should be brought in-house, not only for cost reduction, but also for greater flexibility and expanded capability. The results speak for themselves. This project delivers a 71% cost savings while also giving us a multi-purpose tool that supports future needs. It's another example of how focusing on the little things doesn't just reduce costs, it helps us future-proof the business. Now, I would like to turn the call over to John Miller, our Interim Chief Financial Officer. Over to you, John.