and the working capital discipline of the team. Now turning to guidance. On the strength of our year-to-date performance, as well as the visibility and confidence we have for our second half, we are raising our full-year revenue outlook to $3.9 to $4.2 billion. At the midpoint, that represents 100% growth over 2025 revenue of just over $2 billion. Our outlook is built bottoms up in two layers. The foundation is backlog conversion, signed commitments delivering against customer site readiness dates. The second layer is in-year booking. We intentionally reserve manufacturing capacity for time to power customers who need power in months, and for whom we expect to book and convert into that capacity at rates consistent with recent experience. On Gross Margin, we are holding our full-year margin rate at approximately 34% on a non-GAAP basis. I'll also use this as an opportunity to make one point on how we run the business. When we have to choose between protecting a point of margin in a given quarter and expediting to deliver an order quickly to a customer who is going to be with us for years, we are going to prioritize the customer and the long-term strategic value of that relationship. time to power is what our customers value most right now and we are going to keep delivering against that over a full year that discipline is fully consistent with the margin rate we are guiding to on operating income we are raising our full year non-GAAP operating income outlook to 800 to 900 million dollars and at the updated revenue midpoint this implies an operating margin of approximately 21 percent. That is a material step up from the 425 to 450 million operating income guide at the beginning of the year, which represented a 14 percent margin at the mid-fight. This is the operating leverage I described earlier flowing directly through the model. Full-year non-GAAP diluted EPS outlook is now expected to be $2.55 to $2.85. Finally, a word on how to read our guidance demand in the ai business does not follow the traditional selling cycle today we see the demand we book the order and when the customer is ready we ship the equipment to both the level and shape of our outlook come from the same inputs which are signed commitments and their schedules our capacity and our time to power pipeline what was once seasonality is now simply delivery timing based on customer readiness to conclude this was a milestone quarter we exceeded one billion dollars in quarterly revenue for the first time delivered record profitability generated strong cash flows and raised our full year outlook we are executing with discipline against the demand environment that keeps getting stronger with that operator we're now ready for questions.

Thank you. And ladies and gentlemen, at this time, we will take your questions. If you have a question today, please press star one on your telephone keypad. To start out, we do ask that you keep your questions to one initial and one follow-up. Our first question comes from Mark Strauss, JP Morgan.

Yes, good afternoon. Thank you very much for taking our questions. K.R., I want to go back to your comment about all of of major U.S. hyperscalers, and over a dozen other operators are now, excuse me, validated and approved to use your technology. Are you able to talk about a bit more how many of those are actively using your technology today, and how many of those are kind of in your backlog or in your near-term pipeline? And then I've got a quick follow-up.

Mark, as you very well know, we let our customers speak about the deployments. and what they do, what I can tell you is the combination of the three things that you spoke about, customers already using it, customers who booked orders and we have shipped units to them for whom the power will be delivered and it's in construction, and customers who have given us definitive agreements. They fall in that category. We are not going to split that up, but it is all the major, as you pointed out, it's all the major U.S. hyperscalers and over a dozen of the NeoClouds and the ecosystem around it, co-location partners. That is all true. We don't break it up. But again, let's just take a moment to think about this. Nine months ago, we announced our first direct hyperscaler customer and said we want to enter into this market and do what we did in cni and become a standard it took us 10 years to do that previously for commercial and industrial and i would have i can tell you i never thought within nine months we would become the standard it just speaks to our value proposition in this entire industry okay this is not a faster horse This is a car, and that is why this is happening, and this is not reversible. Thank you. Okay.

Very helpful. If I can sneak one more in, I know going back to the last call, you don't want to get into specific comments on capacity anymore, but just maybe just relative to the last call, I mean, just given your comments today several times about things accelerating, is it safe to assume that maybe your timeline or your magnitude or capacity that you're planning is accelerating as well?

Yeah, so here's how we do the capacity planning, right? It is very clear to us based on our commercial pipeline and our commercial orders when our customers need their products and when they're ready to turn the units on. And as you understand, very clearly, depending on whose reports you read, somewhere between 30 and 40 gigawatts of new AI data center capacity is going to be turned on in 2027, right? And they are in various stages of development. They're all greenfield. And we have a very sophisticated algorithm that we use to figure out how many of those projects are going to land when. And luckily for us, And like everybody else, our units are fungible. When they're on a truck, we can redirect them to a different site if we need to. And that's how fungible our systems are. So based on that, we can predict what our capacity needs are going to be such that we never become the bottleneck to the customer. And I can tell you as we sit here today, we are confident of keeping that promise for everything we have in the order book and everything that we see coming forward. That's all we are going to comment on our capacity. Capacity is not going to be our constraint as we see right now. Thank you.

Your next question comes from Chris Dendrino's RBC Capital Markets. yeah thank you and congratulations on the strong quarter you know I wanted to ask about about the supply chain here and I guess you know when you're having conversations with hyperscalers what are they asking you and what are you telling them or responding to them to give them confidence that you won't be the bottleneck in terms of delivering on time thanks that's a very good question.

Look, you are raising something very important. These are extremely sophisticated consumers and customers. So the amount of diligence that they go through is not just about our product, not just about our performance, not just about our economic value proposition. They want to understand where we are with respect to committed orders, where we are with respect to new orders that can come online. And look, most of them, if you talk to them, are not just signing up for a single transaction. They are signing up with us for the future. They want to be a strategic partner with us for the future. They want to understand as they share confidentially with us what their capacity expansion plans are and ask us if we can meet that. And we have to walk through with them under NDA in great detail and convince them that we will be able to scale. That's when we get validated. So to that previous question of what does all that validation mean, that's the process we go through. It's a pretty rigorous process. It's a pretty rigorous process with each of those customers.

Got it. And then I guess, you know, maybe fair to say that you go through that same process with IDF and Brickfield. And then maybe just as the follow up here, you know, on the Brickfield topic, you expanded that partnership by 20 billion. And, you know, how should we think about the timing to execute on that? Is there sort of a window to which you all think about being able to execute on, you know, $20 billion of transactions?

A great two-part question. You snuck into one question, but I'm happy to answer both of them. They're very relevant, right? The first part is, look, at the end of the day, the financial customers take title of our equipment. When they take title of our equipment, it is not just about can they place it in service. They care about how will it operate through the entire period to be able to deliver. So they go through additional layers of our ability to perform, our ability to be available, our ability to be available, and can we upkeep that equipment for the time that is needed based on the financial model that they came up with so they can actually get their returns. So it is two additional layers of detail that they would go through in their diligence, and they go through the same other process that we discussed. And, you know, even in today's world, $20 billion is a lot of money. So very obviously they go through this process deeply with us. And again, remember this. They didn't come into it in first step. They put the $5 billion in. They watched how we perform. They watched what we are capable of. They watched the execution. And they spoke to several of our customers, the oldest of them now being more than 15 years our customer to understand how we perform and how satisfied they are happy customers is absolutely essential so it is on the strength of all that they come and invest as to the timing look think of this as a financial shelf This shelf is now available. The pace at which it will get used up is going to depend on the uptake of those funds. I think I can again say it's very similar to us becoming the standard for AI in less than nine months. I wouldn't have predicted nine months ago when they invested $5 billion, we'll come back that quickly for the next $20 billion. And this just speaks to the pace of acceleration, both in AI and in our business. Thank you.

David Arcaro from Morgan Stanley has the next question.

Oh, thank you so much. I appreciate you taking my questions. So, you know, there have been some project development challenges that have gotten headlines at a few large projects. i was wondering if you could characterize your you know financial exposure to project delays any contractual protections that you typically have in place and alternatives uh that you you know that you may work on uh with uh with customers yeah thanks for the question um look i think we don't comment specifically on individual projects as you know but i take a step back and just think about how we contract right i would contract the structure with master service agreements and you know there's flexibility for us to deploy this equipment given its copy exact

nature to various customer projects with that said you know we have strong protections with our contracts and then ultimately our financiers also need those same protections right so as you think about the way these these contracts kind of flow to the extent that there are any project delays the end customer is able to redeploy that equipment to other projects but ultimately you know the the financier is on the hook to take delivery of the equipment from bloom and and the other thing extremely important point to talk about in terms of projects because

uh it would be on the minds of people we can tell you when we gave you this guidance and we upward revised it right the 2026 revenue guidance is not dependent on any single project again we have a sophisticated algorithm and we expect certain projects to push out certain projects to come in certain projects to just come out of the blue and absorb it in the same year as we described in our script so we take all that into account when you and we give the guidance so So, you know, construction projects, you know, as long as construction projects have existed, I'm sure there have been delays. Okay. I'm not a historian, but that's what I would expect. That should, you know, we should bake that in, but that's not going to affect our revenue guidance because we have a sophisticated algorithm to figure that out for the year. So our 2026 guidance is not going to have any dependence on any single project.

Understood. thank you both for that extra color. That's helpful. And then, you know, KR, appreciate your additional comments on the supply chain and your confidence there. I was wondering if you could address your access to scandium, which has gotten a lot of attention. Is there any way that you might characterize your use of scandium, how much you see as available supply and stockpile, etc.

Look, I think we have put out a detailed blog on this topic, and we have filed a 8K. The three takeaways for you all as investors to understand are the following. There is enough scandium on the planet that can be recovered economically viably to power the planet. That is what's available on the planet. We have visibility currently based on what we are working for, for 25 gigawatts of deployments, and we are not dependent on China. Those are the statements we made. That's all we are going to say about it. Everything else is proprietary to the company. Next question.

The next question is from Nick Amacucci, Evercore ISI. Hey, guys.

How are you? Simon, sorry, I'll put you on the hot seat for a little bit. Just curious. So, obviously, impressive raise in guidance on a strong 2Q, but the free cash flow guide was pulled. Just trying to get some context around that and just considering that you have $2.7 billion worth of cash on the balance sheet, just thinking through kind of capital allocation.

Yeah. Hey, Nick, thanks for the question. So just to level set here, the company has historically included a supplemental presentation that has included some metrics that are not formal guidance. And so we've just really aligned now the presentation to where we truly guide. But to come back to your question on cash, which you think is a relevant one, we see significant conversion from operating income down to free cash flow. As you think about where we started of the year with a, you know, up income guide of the midpoint of 450 with $200 million of CFOA. We raised that to 675, and now we're looking at 850 at the midpoint. So there's about 300, there's about $175 million raise versus our prior up income guidance. And we see 100% of that dropping down to CFOA. So you should kind of think about 375 plus as being our new baseline. But as you know, kind of we don't provide formal guidance as part of our earnings release. But I just want to make sure that you get the comfort that we see strong conversion here. Got it.

No, that makes perfect sense. And then as we think about this kind of, I guess, longer term AI demand and just kind of like why the CapEx, you know, from every hyperscaler right now is so high. And we think about, you know, where the returns are actually going to be generated. Just as we think about that and think about your backlog and kind of the conversations you guys are having, K.R., are you starting to have any conversations just along the lines of inference reasoning or is it still really just kind of speed to power on the on AI training?

Yes. So it's both. It's it's it's absolutely both. Look, time to power is super important. Number one. And I think, let me try to explain Time to Power in a slightly different way, because for many of the analysts who look at utilities and power, as well as some of our investors, it's important for you to understand. A full-stack AI provider that is responsible for everything in the data center financially, a one gigawatt data center in one single year, depending on the nature of the AI customer, will deliver between $12 and $24 billion in revenue per year. So you pull in power for them within a month, which is the tall pole, that is $1 billion of revenue that they would not have had on a 40% to 50% gross margin and a 20% to 25% net margin. So among the 35 to 40 gigawatts that needs to get deployed next year, take a guess on how much of those projects will get delayed because a power provider is not able to provide power on time. Okay? We are the place to go for time to power. And the math is you don't even have to do the math if we can provide that. This is why time-to-power is important for the large data centers. Now, as inference comes along, if the transmission distribution infrastructure in the country is having difficulty doing transmission, building highways, imagine how difficult it will be for them to upgrade distribution, which is surface streets. That's where inference power is going to be needed. Bloom is ideally suited for that. You cannot put a gas turbine in the middle of Manhattan. So we see both opportunities as extremely robust for us, not this quarter, not next quarter, for years to come. Thank you.

Your next question is from Ben Callow from Baird.

Hey, thanks for taking my questions. I have two. I don't know if you guys think about competition and supply demand curves out there, but maybe if you do, could you give us your thoughts about where we sit just in overall new capacity coming online, whether it's reciprocating engines or it's combined cycle turbines or other versus your decision process?

And then I have a follow-up, which is kind of a higher level. look i think given the huge supply demand gap right now i think every single technology that can provide power quickly for the next few years is going to have a play let's just start with that so if engine makers turbine makers increase their capacity there's going to be a need for it if bloom increase its capacity there's going to be a need for it but let's fast forward and think through competitively at a point if a single customer has to choose between a turbine a engine and a fuel cell okay The first thing that matters is not LCOE, which is just an absurd construct for on-site power. It is the total cost to tokens, the total cost of power to token revenue. Now, Bloom's ability to provide 800-volt DC power, Bloom's ability to provide reliability without overbuild, Bloom's ability to be able to locate inside a city, outside a city, because we don't pollute the air, Bloom's ability to get a permit, okay? None of the other competition, there is not a single commercial vendor today who can provide that total value proposition other than Bloom. So what we do, Ben, is we don't obsess on the competition. We obsess on the customer.

Thank you, K.R. Just maybe from a commodity model or Chinese open source models that have, I think, people worried or uncertain, can you just talk to us about if you view that as an opportunity, either of them or a threat going forward?

Look, whether it is the Chinese, whether it's the American labs, it just doesn't matter. It is a, I would say as a technology optimist, to me, it's a given that token cost and token efficiency and tokens ability to do things are all going to improve in that cost will get better, cheaper. Efficiency of the token will get much better. What a token is able to do with respect to productivity will keep increasing. All of them will happen. That means the token price point will come down, but the total token usage will go up like crazy because that's Jeevan's paradox. And when that happens, you need more power, not less power. So if anything, this is going to accelerate. If anything, whatever we are predicting on AI is an underestimate, not an overestimate. Thank you.

And everyone at this time, in the interest of time, we will switch to just taking one question. Our next question is from Manav Gupta, UBS.

Keir, you started building this company 21 years ago. You had a vision of the cell, and obviously you've come a long way. I'm trying to understand what's the vision of the product for the next three to four years. Coming back to your primary comments of what you can control in context of Henry Ford.

So where do you see this product moving in the next three to four years? look i think very clearly imagine our on-site power dc is going to be the primary source whether it's data centers whether it's anywhere else whether it's you know fleet charging of electric vehicles whether it is uh large apartment complexes and microgrids being built for residential complexes dc is where the world is going to go right predominantly so dc power being generated on-site, being able to use the heat to do both the heating and the cooling. And then on top of that, decarbonization, in my view, is going to become super important. And Bloom is able to do carbon capture better than anybody else. Okay? So we are going to be focused on how do we give a comprehensive solution where the fuel is getting utilized at 90-plus percent efficiency, combined efficiency. It is not polluting the air. It's not using water. The same format that a customer gets used to to power large data centers is the same format, the same technology that powers your neighborhood store, that powers your neighborhood inference data center. That is the vision, and we want it to be like an appliance that you can plug in and get power. This is where we're going to go.

Next up, Maheep Mandeloy from Mizzouho Securities has the next question.

Hey, thanks for taking the questions. One just question on capacity expansion for the next three years, one thing we're hearing from other manufacturers across the industry, which is inflation on the capex estimates. And I'm just curious on your thoughts on these and your manufacturing equipment is different, so how should we think about that now as you expand from two gigawatts to beyond that?

Oh, thank you so much for asking that question, because that's a significant distinguisher for us, right? Our factories, the return on investment is a few months. Okay, we don't come from the old world. Okay, this is not your industrial age power company. We are relying on the technologies that made consumer electronics and semiconductor devices become better, available in larger quantities to everybody on the planet, and get lower in cost and provide greater value. That's the model we are adopting. That's the model we're going to follow. So let them deal with whatever they're dealing with. From our perspective, for us to expand capacity, the return on investment is going to be a few months, and we'll keep adding capacity as long as the demand is there. Thank you.

The next question will come from Sunaina Okalan from Bernstein.

Hey, team. Thank you for taking my question. Maybe if I can ask about the competitive landscape and just follow up on the comments that were made on the call, as well as somebody's question ahead of mine. It makes sense. I think what you're saying makes sense, which is on-site power, Bloom solution, not having NOx and SOx, not using water is a superior solution. That makes sense and is clear. How are you thinking about the market share over the next maybe 24 to 36 months on some of the other fuel cell models that are targeting essentially the same data center space? So I'm getting asked about molten carbonate, for instance. If you can just provide some color on the fuel cell market share, that would be great.

Look, I think it's for them to tell you how many megawatts and how many gigawatts they can install, okay? It's not for us to comment to you. Today, within the data center space, I would say we would be in the very high 90s in terms of our market share, okay? If, like, somebody is going to get in and think that they're going to compete with us, competition is a very good thing, okay? Competition makes us hungrier. Competition makes us run faster. Competition makes us paranoid. And we will thrive in competition. So I welcome competition from anybody and everybody.

Thank you very much. The next question will come from Colin Rush Oppenheimer.

Thanks so much. I guess if you get into this a little bit deeper with the data centers and have those time to power advantages, can you talk a little bit about evolution of your thinking on pricing and target margins for the platform as well as just giving us a sense of how many projects you're selling into where you're displacing a different technology that was originally planned for those sites?

Look, again, we don't think about LCOE, price of electricity, because we're not a utility, okay? We are a strategic partner to our customers, and we deliver value to them. And based on that value, they should be happy buying from us, and they should be happy allowing us to capture value. So it is not just a cents per kilowatt hour story for us. It's about the added benefits we bring to them. It's about an entire solution that we look at. And for us, being able to increase these margins by capturing value is extremely important. And look, when you think about this, right, we are so excited about talking about growth. We forget to highlight something extremely important that's happening in the company. okay i remember seven years ago most of you the same folks the analysts the only thing you worried about is our service losses okay that's the only thing you worried about and we kept telling you the technology product is going to get robust and you will see us get to the 20 gross margin that we talked to you about so we just reported this quarter at 22 gross margin i want to take this opportunity to give a huge shout out to the team out here that's worked tirelessly to go make that number happen think about it when we went public eight eight years ago minus 21 gross margin negative 21 percent this quarter plus 22 percent 43 swing in service margin now let me focus on one more thing it's service margin is a financial metric but the first word in that is service who are we serving we're serving our customers at the end of the day it's happy customers that matter. So we are not just achieving that financial metric. If you look at 2025, 80% of the orders that we booked were repeat orders from customers who have given us multiple repeat orders. That speaks more loudly than anything else about how happy our customers are. So I'm very, very proud of that accomplishment. I truly believe, and I'm going to close with this, I truly believe that that service part of the business and the service revenue and the margins is a big driver to our enterprise value, and more importantly, how we serve our customers in a proper way. Very proud of that team. I want to give a huge shout out. And if you combine what I just told you by looking at our backlog, the demand out there, how we fit perfectly to the needs of a future digitized world, unlike previous technologies. look at how we are executing as a team, and then combine that all together to see the trust that we are building within the communities we operate and the companies we serve. I have a lot to be grateful for and a lot to be appreciative of a great Bloom team that has done a phenomenal job. Thank you all.

Ladies and gentlemen, this does conclude today's conference. we would like to thank you all for your participation. You may now disconnect.