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Risk Overview Q2, 2026
Risk Distribution
25% Production
23% Finance & Corporate
23% Legal & Regulatory
13% Tech & Innovation
10% Ability to Sell
5% Macro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Bloom Energy Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2026
Main Risk Category
Production
With 15 Risks
Production
With 15 Risks
Number of Disclosed Risks
60
+1
From last reportS&P 500 Average: 31
60
+1
From last reportS&P 500 Average: 31
Recent Changes
1Risks added
0Risks removed
0Risks changed
Since Jun 2026
1Risks added
0Risks removed
0Risks changed
Since Jun 2026
Number of Risk Changed
0
No changes from last report
S&P 500 Average: 1
0
No changes from last report
S&P 500 Average: 1
See the risk highlights of Bloom Energy in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 60
Production
Total Risks: 15/60 (25%)Above Sector Average
Manufacturing6 | 10.0%
Manufacturing - Risk 1
Our limited history of manufacturing new products make it difficult to evaluate our future prospects and the challenges we may encounter.Manufacturing - Risk 2
Any significant disruption to the operations at our headquarters or manufacturing facilities could delay the production of our products, which would harm our business and results of operations.We manufacture our products in a limited number of facilities, any of which could become unavailable either temporarily or permanently for any number of reasons, including equipment failure, material supply, public health emergencies, cyber-attacks or catastrophic weather, including extreme weather events or flooding resulting from the effects of climate change, or geologic events. Our headquarters and our Fremont manufacturing facility are located in the San Francisco Bay Area, an area that is susceptible to earthquakes, floods and other natural disasters. The occurrence of a natural disaster such as an earthquake, drought, extreme heat, flood, fire, localized extended outages of critical utilities (such as California's public safety power shut-offs) or transportation systems, or any critical resource shortages could cause a significant interruption in our business, damage or destroy our facilities, our manufacturing equipment, or our inventory, and cause us to incur significant costs, any of which could harm our business, financial condition and results of operations. Our disaster recovery plans, and insurance may not be sufficient to restore our operations and to cover our losses, respectively.
Manufacturing - Risk 3
The performance of our products may be affected by factors outside of our control, which could result in harm to our business and financial results.Field conditions, such as the quality of the fuel supply and environmental factors, can impact the performance of our products in unpredictable ways. As we move into new geographies and deploy new features, products and service configurations, we encounter new field conditions from time to time (including as a result of climate change). Adverse impacts on performance may require us to incur significant service and re-engineering costs or divert the attention of our engineering personnel from product development efforts. Furthermore, we may be unable to adequately address the impacts of factors outside of our control in a manner satisfactory to our customers. Any of these circumstances could significantly and adversely affect customer satisfaction, market acceptance, and our business reputation.
Manufacturing - Risk 4
If our products contain manufacturing defects, our business and financial results could be harmed.Our products are complex, and they may contain undetected or latent errors or defects. We have experienced latent defects that were discovered once the Energy Server system was deployed in the field. Changes in our supply chain or the failure of our suppliers to otherwise provide us with components or materials that meet our specifications could introduce defects in our products. As we grow our manufacturing volume, the chance of manufacturing defects could increase. In addition, new feature launches, product introductions or design changes could introduce new design defects that may impact product performance and life. Any design or manufacturing defects or other failures of our products, including catastrophic or pervasive product failures, could cause us to incur significant costs, a large field recall, divert the attention of our engineering personnel from product development efforts, and significantly and adversely affect customer satisfaction, market acceptance, and our business reputation.
If any of our solutions are defective or fail because of their design, including those incorporating third party hardware such as carbon capture, heat capture, microgrids and other distributed energy resources, or if changes in applicable laws or regulations, or in the enforcement thereof, require us to redesign or recall our products, we may incur additional costs and expenses. The process of identifying and recalling a product may be lengthy and require significant resources, and we may incur significant replacement costs, contract damage claims from our customers, product liability, property damage, personal injury or other claims and liabilities, and brand and reputational harm. In addition, applications such as carbon capture may impact the overall risk profile of our solutions, which could impact where our systems can be located to comply with various zoning and permit restrictions. Significant costs or payments made in connection with warranty and product liability claims and product recalls could harm our financial condition and results of operations.
Furthermore, we may be unable to correct manufacturing defects or other failures of our products in a manner satisfactory to our customers, which could adversely affect customer satisfaction, market acceptance, and our business reputation.
Manufacturing - Risk 5
Our future success depends in part on our ability to increase production capacity for our products, and we may not be able to do so in a timely or cost-effective manner.We plan to double our factory capacity from 1 gigawatt to 2 gigawatts by the end of 2026. Our ability to complete this expansion, and any future expansions, is subject to significant risks and uncertainties, including delays, cost overruns, geopolitical instability and labor shortages. We also need to hire, train and retain skilled employees to manage this expansion and operate our facilities effectively. The manufacture of our products is capital-intensive, and equipment, once purchased, may break down or require costly maintenance or may become obsolete due to technological improvements or other factors. We may also experience quality control issues as we implement any production upgrades. Expanding manufacturing capacity internationally may also expose us to new laws and regulations including those pertaining to labor and employment, environmental and export/import and carries risks. There is also a possibility that we may not be able to achieve our production targets for a variety of reasons, including reliance on third parties who do not fulfill their obligations to us.
If we are unable to expand our manufacturing facilities or develop our existing facilities to achieve the production throughput necessary to achieve our targeted production rate in a timely manner, we may be unable to further scale our business, which would negatively affect our results of operations and financial condition. Conversely, if the demand for our products or our production output does not rise as expected, we may not be able to spread a significant amount of our fixed costs over the production volume, resulting in a greater than expected per unit fixed cost, which would have a negative impact on our financial condition and results of operations.
Manufacturing - Risk 6
Our business is subject to project execution risks, including risks associated with construction, utility interconnection, fuel supply, cost overruns and delays, including those related to obtaining government permits and other contingencies that may arise in the course of completing installations.Our financial results depend on the execution of customer projects and the timely installation of our products, which may be on a fixed price basis, subjecting us to the risk of cost overruns or other unforeseen expenses in the installation process. Our products are subject to regulation and oversight in compliance with laws and ordinances relating to building codes, safety, environmental protection, and related matters in the jurisdictions where we operate, and typically require various local and other governmental approvals and permits, including environmental approvals and permits. Delays in obtaining these approvals and permits could stall the installation process of our products and adversely affect our revenue. For more information regarding these restrictions, please see the risk factors in the section titled "Risks Related to Legal Matters and Regulations."
In addition, the completion of some of our installations depends on the availability of and timely connection to the natural gas grid and the local electric grid. In some cases, interconnection may be conditioned on the construction by the local utility company of new transmission and distribution facilities and may also require construction of new natural gas pipelines to connect a project to the interstate pipeline system. Transmission and distribution upgrades found to be required in interconnection studies may cause planned projects to be deemed uneconomic to be constructed or may result in the size of the project itself being reduced in order to avoid significant upgrade costs. In addition, some municipalities have recently adopted restrictions that prohibit the installation of natural gas services to new construction. For more information regarding these restrictions, please see the risk factor titled "With respect to our products that run, in part, on fossil fuel, we may be subject to a heightened risk of regulation, the loss of certain incentives, and to changes in our customers' energy procurement policies." Delays in our ability to connect with utilities, delays in the performance of installation-related services, or poor performance of installation-related services by our general contractors or sub-contractors could have a material adverse effect on our results and could cause operating results to vary materially from period to period.
As our business grows and we increase the number of distributors selling our products, delays in project development, interconnection and permitting may affect our distributors' ability to sell their inventories of our products and they may decide to decrease future orders of our products or we may choose to support deployment of their inventory with our end customers, either of which could adversely affect revenue and cash flows.
Furthermore, we rely on the ability of our third-party contractors to install products at our customers' sites and to meet our installation requirements. We rely on third-party installation resources and contractors for projects in both U.S. and international markets. We currently work with a limited number of contractors, which could impact our ability to make installations as planned in the future. The timeliness, thoroughness, and quality of the installation-related services performed by some of our contractors in the past have not always met our expectations or standards and may not meet our expectations and standards in the future.
Lengthy sales and installation cycles can increase the risk of customer disputes or delayed or incomplete installations. Sometimes, a customer may cancel an order placed under a definitive agreement but prior to installation (a "post-order cancellation"). We have sought to mitigate risks associated with post-order cancellations through imposing cancellation fees which are sized both to discourage customer cancellations and to defray our costs in the event of a cancellation. However, no assurances can be given that such mitigation measures (if available) will be successful, meaning we may be unable to recover some, or all, of our costs incurred in connection with design, permitting, installation and site preparations. Factors which may affect cancellation rates which are outside of our control include permitting or regulatory issues, delays or unexpected costs in securing interconnection approvals, utility infrastructure, cost changes, or other reasons unique to each customer. Our operating expenses are based on anticipated sales levels, and many of our expenses are fixed. If we are unsuccessful in closing sales after expending significant resources or if we experience customer disputes, delays or cancellations, our reputation, business, financial condition, results of operations or cash flows could be materially and adversely affected. Additionally, under our revenue recognition policy, we do not recognize revenue on product sales until delivery or complete installation. Therefore, a small fluctuation in the timing of the sales transaction's completion could cause our operating results to vary materially from period to period.
Project execution risks may be heightened for large-scale, complex, first-of-a-kind, or geographically diverse projects as well as projects in new markets or regulatory environments. If we are unable to effectively manage these risks, our ability to deliver projects on time, within budget, and in accordance with contractual requirements could be adversely affected, which could harm our business reputation, customer relationships, cash flows, operational results, and financial condition.
Employment / Personnel3 | 5.0%
Employment / Personnel - Risk 1
Deployment of our fuel cell products can be affected by interconnection requirements, export tariff arrangements and utility tariff requirements that are each subject to change.Employment / Personnel - Risk 2
Competition for manufacturing employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business.We believe part of our success depends on the efforts and talent of our manufacturing employees and our ability to attract, develop, motivate and retain such employees. Competition for manufacturing employees is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure and/or to fill targeted staffing levels. In addition, some of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment.
Employment / Personnel - Risk 3
If we are unable to attract and retain key employees and hire qualified management, technical, engineering, finance and sales personnel, our ability to compete and successfully grow our business could be harmed.We believe that our success and our ability to reach our strategic objectives are highly dependent on the contributions of our key management, technical, engineering, finance and sales personnel. The loss of the services of any of our key employees could disrupt our operations, delay the development and introduction of our products and services and negatively impact our business, prospects and operating results. In particular, we are highly dependent on the services of Dr. Sridhar, our Founder, President, Chief Executive Officer and Director, and other certain key employees. None of our key employees are bound by employment agreements for any specific term and we cannot assure you that we will be able to successfully attract and retain the senior leadership necessary to grow our business. There is intense competition for talented individuals in our industry, particularly in the San Francisco Bay Area where our principal offices are located. Our failure to attract and retain our executive officers and other key management, technical, engineering, finance and sales personnel, could adversely impact our business, our financial condition and our operating results.
Supply Chain3 | 5.0%
Supply Chain - Risk 1
Certain features or characteristics of some of our supply agreements could expose us to risks, such as excess inventory, insufficient inventory (if one or more suppliers do not produce for any reason), or above market pricing or higher costs, which could negatively affect our results of operations.Supply Chain - Risk 2
The failure of our suppliers or other third parties to continue to deliver necessary raw materials or other components of our solutions in a timely manner and to specification could prevent us from delivering our solutions within required time frames and could cause installation delays, cancellations, penalty payments and damage to our brand and reputation.We rely on a limited number of suppliers and other third parties, and in some cases sole suppliers, for some of the raw materials and components used to manufacture our products, including certain materials that are in limited supply. If our suppliers provide insufficient inventory to meet customer demand, or such inventory is not at the level of quality required to meet our standards, or if our suppliers are unable or unwilling to provide us with the contracted quantities (as we have limited or in some case no alternatives for supply), our results of operations could be materially and negatively impacted. We are also reliant on other third-party providers of storage equipment, infrastructure equipment and installations, and other materials and technologies that work with our products to provide an energy solution for customers. If we fail to develop or maintain our relationships with suppliers or other third party providers, or if there is otherwise a shortage or lack of availability of any required raw materials or components, we may be unable to manufacture our products, or our solutions may be available only at a higher cost or after a long delay.
The global supply chain for certain raw materials and components, including semiconductor components and specialty metals, has experienced significant strain in recent years. The macroeconomic environment, tariff uncertainty and geopolitical instability have also contributed to and exacerbated this strain. There can be no assurance that the impact of these issues on the supply chain will not continue, or worsen, in the future. Significant delays and shortages could prevent us from delivering our solutions to customers within the required time frames and cause order cancellations, and could increase our costs, which would adversely impact our cash flows and the results of operations.
In some cases, we have had to create our own supply chain for some of the components and materials utilized in our fuel cells. As we have scaled our business, we have made significant expenditures to expand and bolster our supply chain across vendors and geographies. As we sell an innovative fuel cell technology, we historically have and will continue to enter into contractual relationships with suppliers to jointly develop the components we needed. These joint development activities are time and capital intensive and it takes time to develop and qualify multiple suppliers for these unique parts. In addition, some of our suppliers use proprietary processes to manufacture components that adds to the difficulty of developing and qualifying multiple suppliers for certain parts. We may be unable to obtain comparable components from alternative suppliers without considerable delay, expense, or at all, as replacing these suppliers could require us either to make significant investments to bring the capability in-house or to invest in a new supply chain partner. Some of our suppliers are dependent on us as a customer and may be more challenged to scale with our business than our more diversified supplier base. If our suppliers face difficulties obtaining the credit or capital necessary to expand their operations when needed, they could be unable to supply necessary raw materials and components to meet our requirements, which would negatively impact our sales volumes and cash flows, particularly as we grow and need to ramp our business. Although prior disruptions have not been material, the inability of a supplier to deliver, and our inability to secure timely and cost-effective alternatives, could impair our ability to timely provide products to our customers.
The failure by us to obtain raw materials or components in a timely manner or to obtain raw materials or components that meet our requirements could impair our ability to manufacture our products, increase the costs of our products or solutions, increase the costs of servicing our existing portfolio of products, or impact our ability to ramp our business at a pace to meet growing demand. If we cannot obtain substitute materials or components on a timely basis or on acceptable terms, we could be prevented from delivering our solutions to our customers or service our existing fleet of products, which could result in sales and installation delays, cancellations, penalty payments, warranty breaches, or damage to our brand and reputation, any of which could have a material adverse effect on our business and results of operations. In addition, we rely on our suppliers to meet quality standards, and the failure of our suppliers to meet those quality standards could cause delays in the delivery of our solutions, unanticipated service costs, and damage to our brand and reputation.
Supply Chain - Risk 3
We, and some of our suppliers, obtain capital equipment used in our manufacturing process from sole suppliers, and if this equipment is damaged or otherwise unavailable, our ability to deliver our products on time will suffer.Some of the capital equipment used to manufacture our products and some of the capital equipment used by our suppliers has been developed and made specifically for us, are not readily available from multiple vendors, and would be difficult to repair or replace if they did not function properly. If any of these suppliers were to experience financial difficulties or go out of business or if there was any damage to, or a breakdown of, our manufacturing equipment and we could not obtain replacement equipment in a timely manner, our business would suffer. In addition, a supplier's failure to supply this equipment in a timely manner of adequate quality and on terms acceptable to us could disrupt our production schedule or increase our costs of production and service.
Costs3 | 5.0%
Costs - Risk 1
Deployment of our Energy Server systems relies on fuel supply and fuel specification requirements, which are subject to change.Costs - Risk 2
If we are not able to reduce our costs or meet service performance expectations with respect to our products, our profitability may be impaired.We need to reduce the manufacturing costs for our products to expand our markets. Additionally, certain of our existing service contracts rely on projections regarding service cost reductions that may not be realized. Increases in component and raw material costs, including those caused by tariffs and lack of available supply could offset our cost-cutting efforts, slowing our growth and causing our financial results and operational metrics to suffer. In the past, we have experienced price increases in raw materials, which are used in our components and subassemblies for our fuel cell products.
Our expenses have increased and may increase in the future due to factors such as increases in wages or other labor costs, marketing and sales. We may need to reduce costs to expand into new markets (in which the price of electricity from the grid is lower) while maintaining our current margins. Any failure to achieve cost reductions could adversely affect our results of operations and financial condition and harm our business and prospects. Our inability to reduce product costs may impact our profitability, which could have a material adverse effect on our business and prospects.
Costs - Risk 3
The economic benefits of our Energy Server systems to our customers depend on both the price of gas available from the local gas utilities and the cost of electricity available from alternative sources, including local electric utility companies, and such cost structure is subject to change.We believe that the customer's decision to purchase our Energy Server system is significantly influenced by its price, the price predictability of electricity generated by our Energy Server systems in comparison to the retail price, and the future price outlook of electricity from the local utility grid and other energy sources. These prices are subject to change and may affect the relative benefits of our Energy Server systems. Factors that could influence these prices are beyond our control and include, without limitation, the impact of energy conservation initiatives that reduce electricity consumption; construction of additional power generation plants (including renewables, storage, nuclear, coal or natural gas); technological developments by others in the electric power industry; the imposition of interconnection, "departing load," "standby," power factor charges, greenhouse gas emissions charges, or other charges by local electric utility or regulatory authorities; and changes in the rates offered by local electric utilities and/or in the applicability or amounts of charges and other fees imposed or incentives granted by such utilities on customers. In addition, even with available subsidies for our products, in those areas where the current cost of grid electricity is low, including in some states in the U.S. and some foreign countries, our Energy Server systems may not be economically attractive.
Furthermore, actual or perceived potential increases in the price of natural gas or other fuels or curtailment of availability (e.g., as a consequence of physical limitations or adverse regulatory conditions for the delivery or production of natural gas or other fuels) or the inability to obtain natural gas or other fuel services could make our Energy Server systems less economically attractive to potential customers and reduce demand. While our Energy Server systems can operate using hydrogen or biofuels, the availability and/or current high cost of those natural gas alternatives in a particular location may make them less attractive to potential customers, reducing the demand for our products.
Finance & Corporate
Total Risks: 14/60 (23%)Below Sector Average
Share Price & Shareholder Rights5 | 8.3%
Share Price & Shareholder Rights - Risk 1
Techniques employed by short sellers may in the future drive down the market price of our common stock.Added
Share Price & Shareholder Rights - Risk 2
Provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit stockholders' rights, and limit the market price of our common stock. In addition, provisions in the convertible notes we have issued could delay or prevent an otherwise beneficial takeover of us.Provisions in our restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management. Our restated certificate of incorporation and amended and restated bylaws include provisions that:
- require that our Board of Directors is classified into three classes of directors with staggered three-year terms;- permit the Board of Directors to establish the number of directors and fill in any vacancies and newly created directorships;- require super-majority voting to amend some provisions in our restated certificate of incorporation and amended and restated bylaws;- authorize the issuance of "blank check" preferred stock that our Board of Directors could use to implement a stockholder rights plan;- authorize only the chairman of our Board of Directors, our chief executive officer, or a majority of our Board of Directors to call a special meeting of stockholders;- prohibit stockholder action by written consent;- expressly authorize the Board of Directors to make, alter, or repeal our bylaws; and - establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
In addition, our restated certificate of incorporation and our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our restated certificate of incorporation or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Our restated certificate of incorporation and our amended and restated bylaws provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which thereby may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our restated certificate of incorporation and our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, our operating results, and our financial condition.
Moreover, Section 203 of the Delaware General Corporation Law may discourage, delay, or prevent a change in control of our Company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.
Furthermore, certain provisions in the convertible notes we have issued could make a third party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then, subject to limited exceptions, noteholders will have the right to require us to repurchase their notes for cash. In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate. In either case, and in other cases, our obligations under the notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of our common stock may view as favorable.
Share Price & Shareholder Rights - Risk 3
Future sales of our common stock by current or potential future significant holders, or the perception that such sales could occur, may adversely affect the market price of our common stock.While during 2025 SK ecoplant Co., Ltd. and its affiliates ("SK ecoplant") reduced their holdings in our common stock acquired through their strategic investment in us, SK ecoplant continues to hold approximately 6,971,701 shares of our common stock as of December 31, 2025, equaling 2.5% of the shares outstanding as of such date. See Part II, Item 8, Note 17-SK ecoplant Strategic Investment for additional information with respect to such investment. In addition, in October 2025, in connection with our partnership with Oracle Corporation ("Oracle") to provide on-site solid state power for AI data centers, subject to the negotiation of a warrant mutually acceptable to us and Oracle, we agreed to issue to Oracle a warrant (the "Oracle Warrant") to purchase up to an aggregate of 3,531,073 shares of our common stock, with an exercise price of $113.28 per share, which was the closing market price of our common stock on October 28, 2025. We and Oracle agreed that (i) the expiration date of the Oracle Warrant will be six (6) months from the date of the issuance of the Oracle Warrant, (ii) the Oracle Warrant will include customary anti-dilution adjustments, transfer restrictions and exercise procedures, and (iii) the Oracle Warrant will not entitle the holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise and settlement of the Oracle Warrant. The Oracle Warrant and the shares underlying the Oracle Warrant are expected to be issued in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. Assuming the issuance and exercise of the Oracle Warrant, the common stock underlying such warrant would represent approximately 1.3% of the shares outstanding as of December 31, 2025 on a pro forma basis.
The sale of a substantial number of the remaining shares of our common stock held by SK ecoplant, or (assuming the issuance of the Oracle Warrant) the exercise by Oracle of the Oracle Warrant and any subsequent sale of some or all of the common stock issuable upon such exercise, or the perception that any such sales could occur by either of such parties, or any potential significant sale of our common stock by other current or future holders, could adversely affect the market price of our common stock. These sales (if any), or the possibility of these sales, could also make it more difficult for us to sell equity securities or securities convertible into equity securities in the future at a time and at a price that we deem appropriate.
Share Price & Shareholder Rights - Risk 4
We may issue additional shares of our common stock in connection with future conversions of our outstanding convertible notes, which may dilute our existing stockholders and potentially adversely affect the market price of our common stock.In the event that some or all of our outstanding convertible notes are converted, and we elect to deliver shares of common stock, the ownership interests of existing stockholders will be diluted, and any sales in the public market of any shares of our common stock issuable upon such conversion could adversely affect the prevailing market price of our common stock.
Share Price & Shareholder Rights - Risk 5
The stock price of our common stock has been and may continue to be volatile.The market price of our common stock has been and may continue to be volatile. In addition to factors discussed in this Risk Factors section, the market price of our common stock may fluctuate significantly in response to numerous variables, many of which are beyond our control, including:
- overall performance of the equity markets;- actual or anticipated fluctuations in our revenue and other operating results;- changes in the financial projections we may provide to the public or our failure to meet these projections;- changing market and economic conditions, including a recessionary environment, rising interest rates and inflationary pressures;- failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us or our failure to meet these estimates or the expectations of investors;- the issuance of negative reports from short sellers;- recruitment or departure of key personnel;- new laws, regulations, subsidies or credits, or new interpretations of them, applicable to our business;- negative publicity related to problems in our manufacturing or the real or perceived quality of our products;- rumors and market speculation involving us or other companies in our industry;- the failure or distress of competitors in our industry;- announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships or capital commitments;- lawsuits threatened or filed against us; and - other events or factors including those resulting from war, natural disasters (including as result of climate change), incidents of terrorism or responses to these events.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility.
Accounting & Financial Operations5 | 8.3%
Accounting & Financial Operations - Risk 1
We do not intend to pay dividends for the foreseeable future.Accounting & Financial Operations - Risk 2
Our financial condition and results of operations and other key metrics are likely to fluctuate, which could cause our results for a particular period to fall below expectations, resulting in a severe decline in the price of our common stock.Our financial condition and results of operations and other key metrics have fluctuated significantly in the past and may continue to fluctuate in the future due to a variety of factors, many of which are beyond our control. For example, the amount of product revenue we recognize in a given period is materially dependent on the volume of installations of our products in that period and the type of financing used by the customer.
In addition to the other risks described herein, the following factors subject us to quarterly fluctuations in our financial condition and results of operations:
- the timing of installations, which may depend on many factors such as availability of inventory, product quality or performance issues, local permitting requirements, utility requirements, environmental, health, and safety requirements, weather, availability of labor, health emergencies, and customer facility construction schedules;- size of particular installations and number of sites involved in any particular quarter;- the mix in purchase or financing options used by customers, the geographical mix of customer sales, and the rates of return required by financing parties;- disruptions in our supply chain;- whether we are able to structure our sales agreements in a manner that would allow for the product and installation revenue to be recognized upfront;- delays or cancellations of product installations;- fluctuations in our service costs, particularly due to unexpected costs and rising labor costs;- fluctuations in our research and development expense, including periodic increases associated with the pre-production qualification of additional tools as we expand our production capacity;- the length of the sales and installation cycle for a particular customer;- the timing and level of additional purchases by new and existing customers, which may be impacted by macroeconomic factors including inflation, interest rates, the recessionary environment, and availability of capital;- the timing of the development of the market for our new features and products;- unanticipated expenses or installation delays associated with changes in governmental regulations, permitting requirements, utility requirements and environmental, health and safety requirements;- disruptions in our sales, production, service or other business activities resulting from disagreements with our labor force or our inability to attract and retain qualified personnel; and - unanticipated changes in government incentive programs available for us, our customers, and tax equity financing parties.
Fluctuations in our operating results and cash flow could, among other things, give rise to short-term liquidity issues. In addition, our revenue, key operating metrics, and other operating results in future quarters may fall short of our projections or the expectations of investors and financial analysts, which could have an adverse effect on the price of our common stock.
Accounting & Financial Operations - Risk 3
We have incurred significant losses in the past and we may not be profitable in future periods.Since our inception in 2001, we have incurred significant net losses and have used significant cash in our business. As of December 31, 2025, we had an accumulated deficit of $4.0 billion. We expect to continue to expand our operations domestically and internationally, including by investing in manufacturing, sales and marketing, research and development, staffing, and infrastructure to support our growth. We may continue to incur net losses in future periods. Our ability to achieve profitability will depend on a number of factors, including our ability to:
- grow our sales volume;- expand into new geographical markets and industry market sectors;- attract and retain financing partners;- continue to improve the useful life of our technology and reduce our warranty servicing costs;- reduce the cost of producing our products;- improve the efficiency and predictability of our installation process;- introduce new products, including products for the hydrogen market;- improve the effectiveness of our sales and marketing activities; and - attract and retain key talent in a competitive labor marketplace.
Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future.
Accounting & Financial Operations - Risk 4
If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected.We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002. The provisions of the act require, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. Preparing our financial statements involves a number of complex processes, many of which are done manually and are dependent upon individual data input or review. These processes include calculating revenue, deferred revenue and inventory costs. While we continue to automate our processes, enhance our review and put in place additional controls to reduce the likelihood for errors, we expect that for the foreseeable future many of our processes will remain manually intensive and thus subject to human error. If we are unable to successfully maintain effective internal control over financial reporting, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports. Any failure to maintain effective disclosure controls and procedures or internal control over financial reporting could have a material adverse effect on our business and operating results and cause a decline in the price of our common stock.
Accounting & Financial Operations - Risk 5
If our estimates of useful life for our products are inaccurate or we do not meet our performance warranties and guaranties, our business and financial results could be harmed.We provide performance warranties and guaranties covering the efficiency and output performance of our products. Our pricing of these contracts and our reserves for warranty and replacement are based upon our estimates of the useful life of our products and those components that are replaced as a part of standard maintenance, including assumptions regarding improvements in power module life that may fail to materialize. While we continue to make progress in streamlining our installation and maintenance processes, we have in the past experienced certain project-specific delays. These delays underscored the operational complexities inherent in coordinating large deployments with multiple external stakeholders. If we are delayed in or unable to perform maintenance, our previously installed products would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. In addition, we do not have a long history at a large scale, and our estimates may prove to be incorrect. Failure to meet these warranty and performance requirements may require us to replace the products or to make cash payments to customers. Actual warranty expenses may exceed estimates. If our estimates are inaccurate or we fail to accrue adequate reserves to make cash payments as required, our business and financial results could be harmed.
Debt & Financing3 | 5.0%
Debt & Financing - Risk 1
We may not be able to generate sufficient cash to meet our debt service obligations or our growth plans.Debt & Financing - Risk 2
Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.Given our substantial level of indebtedness, it may be difficult for us to secure additional debt financing at an attractive cost, which may in turn impact our ability to expand or maintain our operations, develop our products, and remain competitive in the market. Our liquidity needs could vary significantly and may be affected by general economic conditions, industry trends, performance, and many other factors not within our control, such as adverse shifts in the interest rate environment or credit market conditions which could impact availability and cost of such financing.
The agreements governing our outstanding indebtedness contain, and other future debt agreements may contain, covenants imposing operating and financial restrictions on our business that limit our flexibility to, including, among other things:
- borrow money;- pay dividends or make other distributions;- incur liens;- make asset dispositions;- make loans or investments;- issue or sell share capital of our subsidiaries;- issue guaranties;- enter into transactions with affiliates;- merge, consolidate or sell, lease or transfer all or substantially all of our assets;- require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, thereby reducing the funds available for other purposes such as working capital and capital expenditures;- make it more difficult for us to satisfy and comply with our obligations with respect to our indebtedness;- subject us to increased sensitivity to interest rate increases;- make us more vulnerable to economic downturns, adverse industry conditions, or catastrophic external events;- limit our ability to withstand competitive pressures;- reduce our flexibility in planning for or responding to changing business, industry and economic conditions; and/or - place us at a competitive disadvantage to competitors that have relatively less debt than we have.
Upon the occurrence of certain events to us, including a change in control, a significant asset sale or merger or similar transaction, our liquidation or dissolution or the cessation of our stock exchange listing, each of which may constitute a fundamental change under the outstanding notes, holders of certain of the notes have the right to cause us to repurchase for cash any or all of such outstanding notes. We cannot provide assurance that we would have sufficient liquidity to repurchase such notes. In addition, pursuant to a credit agreement we entered into in December 2025, we provided collateral to secure amounts borrowed thereunder consisting of a lien on substantially all of our tangible and intangible personal property, other than intellectual property, and a pledge of various shares of stock, partnership interests and limited liability company interests of our direct material domestic subsidiaries and first-tier material foreign subsidiaries. We also agreed to various financial covenants, as well as restrictive covenants that, among other things, restrict our and our subsidiaries' ability to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, prepay certain indebtedness, incur liens, enter into agreements with affiliates, and merge or consolidate.
Our financing and debt agreements, including the notes and the credit agreement, contain events of default. If an event of default were to occur, the trustee and/or the lenders could, among other things, terminate their commitments and declare outstanding amounts due and payable and our cash may become restricted, or (with respect to the credit agreement) seek to enforce collateral securing the amounts borrowed thereunder. We cannot provide assurance that we would have sufficient liquidity to repay or refinance our indebtedness if such amounts were accelerated upon an event of default. Borrowings under other debt instruments that contain cross-acceleration or cross-default provisions may, as a result, be accelerated and become due and payable as a consequence. We may be unable to pay these debts in such circumstances. We cannot provide assurance that the operating and financial restrictions and covenants in these agreements will not adversely affect our ability to finance our future operations or capital needs, or our ability to engage in other business activities that may be in our interest or our ability to react to adverse market developments.
Debt & Financing - Risk 3
We must maintain the confidence of our customers in our liquidity, including our ability to timely service our debt obligations and grow our business over the long term.Currently, we are the only provider able to manufacture our products. If potential customers believe we do not have sufficient capital or liquidity to operate our business over the long-term or that we will be unable to maintain or support our products, customers may be less likely to purchase or lease our products, particularly in light of the significant financial commitment required. In addition, financing sources may be unwilling to provide financing on reasonable terms. Similarly, suppliers, financing partners, and other third parties may be less likely to invest time and resources in developing business relationships with us if they have concerns about the success of our business.
Accordingly, in order to grow our business, we must maintain confidence in our liquidity and long-term business prospects among customers, suppliers, financing partners and other parties. Our ability to maintain this confidence depends not only on absolute liquidity levels, but also on market perceptions of our access to capital and other complex factors such as:
- our limited operating history at a large scale;- the size of our debt obligations and compliance with the existing terms thereof;- profitability concerns;- unfamiliarity with or uncertainty about our products and the overall perception of the distributed generation market;- prices for electricity or natural gas;- competition from alternate sources of energy;- warranty or unanticipated service issues we may experience;- the perceived value of environmental programs to our customers;- the size of our expansion plans in comparison to our existing capital base and the scope and history of operations;- the availability and amount of tax incentives, credits, subsidies or other incentive programs; and - the other factors set forth in this "Risk Factors" section.
Several of these factors are largely outside our control, and any negative perceptions about our liquidity or long-term business prospects would likely harm our business.
Corporate Activity and Growth1 | 1.7%
Corporate Activity and Growth - Risk 1
If we fail to manage our growth effectively, our business and operating results may suffer.Legal & Regulatory
Total Risks: 14/60 (23%)Above Sector Average
Regulation6 | 10.0%
Regulation - Risk 1
Existing regulations and changes to such regulations may create technical, regulatory, and economic barriers, which could significantly reduce demand for our products or affect the financial performance of current sites.Regulation - Risk 2
With respect to our products that run, in part, on fossil fuel, we may be subject to a heightened risk of regulation, the loss of certain incentives, and to changes in our customers' energy procurement policies.The current generation of our Energy Server systems that run on natural gas generally produce fewer carbon emissions than other onsite high power density generation and the average U.S. marginal power generation sources that our projects displace. However, the operation of our current Energy Server systems does produce some CO2, which contributes to global climate change. As such, we may be negatively impacted by CO2-related changes in applicable laws, regulations, ordinances, rules, including carbon pricing, or the requirements of the incentive programs on which we and our customers currently rely, as well as potential scrutiny around voluntary or regulatory carbon emissions reporting by our existing or potential customers. Changes in any of the laws, regulations, or ordinances, or rules that apply to our installations and new technology could make it more difficult or costly to install and operate our Energy Server systems, thereby negatively affecting our ability to deliver cost savings to our customers. Certain municipalities in which we operate have banned or are considering banning new interconnections with gas utilities, while others have adopted bans that allow new interconnections for non-combustion resources, such as our Energy Server systems. Some local municipalities have also banned or are considering banning the use of distributed generation products that utilize fossil fuel. Additionally, our customers' and potential customers' energy procurement policies may prohibit or limit their willingness to procure our natural gas-fueled Energy Server systems. Our business prospects may be negatively impacted if we are prevented from completing new installations or our installations become more costly as a result of laws, regulations, or ordinances, or rules applicable to our Energy Server systems, or by our customers' and potential customers' energy procurement policies.
Regulation - Risk 3
As we expand into international markets, we may be subject to local content requirements or pressures which could increase costs or reduce demand for our products.Foreign jurisdictions where we conduct or wish to conduct our business may impose domestic content requirements (requiring goods, materials, components, services or labor to be supplied from or made in the country). Domestic or local content requirements favor domestic industry over foreign competitors and there has been a significant increase in the use of these programs in recent years. For example, in the Republic of Korea, customers and prospective customers may be incentivized to select domestic competitors over Bloom.
Regulation - Risk 4
We are in an unsettled regulatory and legal environment with compliance complexity and costs associated with legal and compliance matters.We operate in a dynamic and complex regulatory and legal environment, characterized by evolving policies, geopolitical pressures, and the global push toward energy transition. Governments worldwide are generally enacting stricter regulations to meet net-zero and emissions reduction targets, leading to frequent changes in environmental and energy policies. The shift in some geographies from fossil fuels to renewable energy sources has introduced new rules, subsidies, and mandates, creating uncertainty for companies managing both legacy and emerging energy systems. Trade disputes, sanctions, and conflicts affecting supply chains and resource availability add unpredictability to the global regulatory landscape.
As governments and regulatory bodies introduce stricter requirements, the compliance burden continues to grow. Navigating these changes requires substantial investment in monitoring, adapting to, and implementing new compliance frameworks. Additionally, this heightened regulatory scrutiny increases the likelihood of audits, investigations, and litigation, which can result in significant legal costs, operational delays, or penalties. These factors not only elevate our operational complexity and cost structure but also pose risks to our ability to execute projects, innovate, and maintain stakeholder confidence.
Regulation - Risk 5
We are subject to laws and regulations that could impose substantial costs upon us and cause delays in the delivery and installation of our products.The construction, installation, and operation of our products are generally subject to oversight and regulation in accordance with laws and ordinances relating to building codes, safety, environmental and climate protection, domestic content requirements and related matters, as well as energy market rules, regulations and tariffs, and typically require governmental approvals and permits, including environmental approvals and permits, that vary by jurisdiction. In some cases, these approvals and permits change or require periodic renewal. These laws and regulations can affect the markets for our products and the costs and time required for their installation and may give rise to liability for administrative oversight costs, compliance costs, clean-up costs, property damage, bodily injury, fines, and penalties. Capital and operating expenses needed to comply with these laws and regulations can be significant, and violations may result in substantial fines and penalties or third-party damages.
It is difficult and costly to track the requirements of every individual authority having jurisdiction over our installations, to design our products to comply with these varying standards, and to obtain all applicable approvals and permits. We cannot predict whether or when all approvals or permits required for a given project will be granted or whether the conditions associated with the approvals or permits will be achievable. The denial of a permit essential to a project or the imposition of impractical conditions or excessive transmission or distribution facility upgrade costs as a condition of interconnection, would impair our ability to develop the project. In addition, we cannot predict whether the approval or permitting process will be lengthened due to complexities and appeals. The interconnection study process likewise can be a lengthy process. A delay in the review and approval of permits for a project and any interconnection studies, if required, can impair or delay our and our customers' abilities to develop that project or may increase the cost so substantially that the project is no longer attractive to us or our customers. Furthermore, unforeseen delays in the review and permitting process could delay the timing of the installation of our products and could therefore adversely affect the timing of the recognition of revenue related to the installation, which could harm our operating results in a particular period. In many cases we contractually commit to performing all necessary installation work on a fixed-price basis, and unanticipated costs associated with approval, permitting or compliance expenses may cause the cost of performing such work to exceed our revenue. In addition, emerging federal and state emissions disclosure requirements may pose a burden to existing or potential customers. The costs of complying with all the various laws, regulations and customer requirements, and any claims concerning non-compliance, could have a material adverse effect on our financial condition or operating results.
In addition, the rules and regulations regarding the production, transportation, storage, and use of hydrogen, including with respect to safety, environmental and market regulations and policies, are in flux and may limit the market for our products that utilize hydrogen as a fuel source.
Regulation - Risk 6
A failure to properly comply with foreign trade zone laws and regulations could increase the cost of our duties and tariffs including by causing us to have to pay deferred duties and tariffs on goods located within such foreign trade zones.We have established foreign trade zones in California and Delaware, through qualification with U.S. Customs and Border Protection, which allow for "zone to zone" transfers between our facilities located in those states. The foreign trade zone allows the deferment of certain U.S. duties or tariffs until the goods enter U.S. commerce, as well as the opportunity for duty and tariff avoidance on goods directly exported from the foreign trade zones which do not enter U.S. commerce. Other savings from compliance with applicable rules and regulations include reductions in processing fees through the program. If we are unable to maintain the qualifications of our foreign trade zones, or if foreign trade zones are limited or unavailable to us in the future, we would be liable to pay outstanding duties and tariffs owed on goods located within such zones, which could have an adverse effect on our business, cash flows, and results of operations.
Litigation & Legal Liabilities2 | 3.3%
Litigation & Legal Liabilities - Risk 1
Litigation or administrative proceedings could have a material adverse effect on our business, financial condition and results of operations.Litigation & Legal Liabilities - Risk 2
We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.We may become subject to product liability claims. Our Energy Server systems are considered high energy systems because they consume or produce flammable fuels and may operate up to 480 volts. Natural gas and hydrogen, associated with use of our products, are flammable gases and therefore are potentially dangerous fuels capable of causing fires and other harm. High-voltage electricity poses potential shock hazards. There can be no assurance that our products will continue to be certified to meet certain design and safety standards. Additionally, if our equipment is not properly handled or maintained, or contains undiscovered issues, there could be system failure and resulting damage, injury or liability.
These claims could require us to incur significant costs to defend. Furthermore, any successful product liability claim could require us to pay a substantial monetary award. Moreover, a product liability claim could generate substantial negative publicity about us harming our brand, business, prospects, product demand, operating costs, and widespread market acceptance for our products. Our product liability insurance may not be sufficient to cover all potential product liability claims and awards. Any lawsuit seeking significant monetary damages either in excess of or outside of our insurance coverage may have a material adverse effect on our business and financial condition.
Taxation & Government Incentives3 | 5.0%
Taxation & Government Incentives - Risk 1
In the U.S., we rely on tax equity financing arrangements to realize the benefits provided by federal tax benefits and accelerated tax depreciation and in the event these programs are terminated, our financial results could be harmed. We also rely on incentives in the Korean, European and other international markets.Taxation & Government Incentives - Risk 2
Our business currently benefits from the availability of rebates, tax credits and other financial programs and incentives, and changes to such benefits could cause our revenue to decline and harm our financial results.We utilize governmental rebates, tax credits, and other financial incentives to lower the effective price of our products to customers in the U.S. and Japan, India, Republic of Korea, and Taiwan (collectively, our "Asia Pacific region").
The U.S. federal government and some state and local governments provide incentives to current and future end users and purchasers of our solutions in the form of rebates, tax credits and other financial incentives, such as system performance payments and payments for renewable energy credits associated with renewable energy generation. Our solutions have qualified for tax exemptions, incentives, or other customer incentives in many states. Some states have utility procurement programs, Renewables Portfolio Standards ("RPSs") or Clean Energy Standards ("CESs") for which our technologies are eligible; our solutions may not be eligible for other RPSs and CESs, particularly when fueled in whole or in part with natural gas. Financiers and Equity Investors (as defined below) may also take advantage of these financial incentives, lowering the cost of capital and energy to our customers.
For example, many of our installations in California interconnect with investor-owned utilities on FC NEM tariffs. FC NEM tariffs were available for new California installations until December 31, 2023. To remain eligible for those FC NEM tariffs, installations currently on those tariffs will be required to meet greenhouse gas emissions standards that are intended to support operations at a rate that is the same or better than the grid resources they are displacing. Other generally applicable tariffs are available for customers deploying fuel cells, and do not impose greenhouse gas standards. If, and when, installations cannot meet any applicable greenhouse gas standards, there are alternative tariffs available for our customers. If the cost to remain on the FC NEM tariffs increase significantly or suitable alternatives are not available, it may negatively impact our existing customer base and future demand for our products. Additionally, the uncertainty regarding requirements for service under any of these tariffs could negatively impact the perceived value of, or risks associated with, our products, which could also negatively impact demand.
Under the IRA, the U.S. federal government offers certain federal tax benefits, including the Production Tax Credit under Section 45 of the Internal Revenue Code (the "PTC") and the Investment Tax Credit under Section 48 of the Internal Revenue Code (the "ITC"), both of which are succeeded by "technology-neutral" versions set forth in Sections 45Y and 48E, respectively. After December 31, 2024, our fuel cell Energy Server systems operating on natural gas or a non-zero carbon fuel became ineligible for the ITC under the IRA, except to the extent eligible fuel cell property was properly safe harbored prior to December 31, 2024, under the applicable federal tax guidance rules. On July 4, 2025, the U.S. federal government enacted the OBBBA, which restored the federal ITC for applicable fuel cell property for projects beginning construction after December 31, 2025, at a 30% rate through 2033, regardless of the level of emissions from the fuel cell property. Accelerated depreciation for our fuel cell property was also restored under the OBBBA. These federal tax benefits under both the IRA and the OBBBA have certain legal and operational requirements. There may be uncertainty as to how such requirements promulgated under the IRA and the OBBBA are interpreted. If IRS guidance regarding implementation of the IRA or the OBBBA is viewed by investors as unclear, tax credit financing may be delayed or downsized, harming our ability to secure financing for customers. Our failure to either (i) accurately interpret the new requirements under the IRA and the OBBBA regarding among other things, prevailing wage, apprenticeship, domestic content, siting in an "energy community," "prohibited foreign entities" or "material assistance" from "prohibited foreign entities" or (ii) adequately update our supply-chain, manufacturing, installation, and record-keeping processes to meet such requirements, may result a partial or full reduction in the related federal tax benefit, and our customers, financiers and equity investors may require us to indemnify them for certain of such reductions. Changes in federal tax benefits over time also may affect our future performance.
Some countries outside the U.S. also provide incentives to current and future end users and purchasers of our solutions. For example, in the Republic of Korea, RPSs and CESs are in place to promote the adoption of renewable, low- or zero-carbon power generation. The Korean RPSs were replaced in 2023 with the Clean Hydrogen Portfolio Standard ("CHPS"). This may impact the demand for our products in the Republic of Korea. Initially, we do not expect the CHPS to require 100% hydrogen as a feedstock for fuel cell projects.
Changes in the availability of rebates, tax credits, and other financial programs and incentives could reduce demand for our products, impair sales financing, and adversely impact our business results. Additionally, these incentives and procurement programs or obligations may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy. The continuation of these programs and incentives depends upon continued political support.
Taxation & Government Incentives - Risk 3
Our ability to use deferred tax assets to offset future taxable income may be subject to limitations that could subject our business to higher tax liability.Our ability to use net operating loss carryforwards ("NOLs") to offset future taxable income may be limited due to expiration, lack of taxable income in the future, changes in our stock ownership, and other factors that may be outside of our control. Our deferred tax assets may also expire or be underutilized, which could prevent us from offsetting future taxable income.
Environmental / Social3 | 5.0%
Environmental / Social - Risk 1
Scrutiny regarding ESG practices and disclosures could result in additional costs and adversely impact our business, brand and reputation.Environmental / Social - Risk 2
We increasingly rely on the collection, processing, storage, sharing, and analysis of large volumes of data that requires strong data governance. A failure to maintain strong data governance by us and/or our third-party providers could result in investigations, fines, penalties, and litigation; expose us to operational, financial and reputational risks; and adversely impact the execution of strategic objectives.Effective data governance, including data quality, data integrity, data access controls, data lifecycle management, and compliance with applicable data protection and privacy requirements, is essential to our operations, decision-making, and strategic initiatives. We face risks associated with maintaining accurate, complete, timely, and consistent data across multiple systems, business units, geographies, and third party platforms. Deficiencies in data governance practices, data quality, system integrations, or internal controls could result in inaccurate reporting, flawed business or operational decisions, inefficiencies, delays, increased costs, or failures to meet contractual, regulatory, or disclosure obligations.
As we expand our use of advanced analytics, automation, and artificial intelligence-enabled tools, our reliance on high quality and well governed data increases and any weakness in data governance may be amplified. In addition, we are subject to a complex and evolving landscape of data protection, privacy, cybersecurity, and data localization laws and regulations in the jurisdictions in which we operate. Failure to comply with those requirements, or to appropriately govern the use of sharing of data could result in regulatory investigations fines, penalties, or litigation.
We also rely on third party vendors, cloud service providers, and other partners to host, process, or access data. Risks related to third party data handling practices could adversely affect our data governance framework and expose us to additional operational, financial, and reputational risks.
If we are unable to effectively design, implement, and maintain a robust data governance framework that evolves with our business, our ability to operate efficiently, protect confidential information, leverage data-driven insights, and execute our strategic objectives could be adversely affected.
Environmental / Social - Risk 3
The installation and operation of our products are subject to environmental laws and regulations in various jurisdictions, and there has been in the past and could continue to be uncertainty with respect to both how these laws and regulations may change over time and the interpretation of these environmental laws and regulations to our products.We are committed to compliance with applicable environmental laws and regulations including health and safety standards, and we continuously review the operation of our products for health, safety, and environmental compliance. Our products produce small amounts of hazardous waste and air pollutants, and we seek to address these in accordance with applicable regulatory standards. In addition, environmental laws and regulations in the U.S., such as the Comprehensive Environmental Response and Compensation and Liability Act, impose liability on several grounds including for the investigation and clean-up of contaminated soil and ground water, impacts to human health and damages to natural resources. If contamination is discovered at properties currently or formerly owned or operated by us, or properties to which hazardous substances were sent by us, it could result in our liability under environmental laws and regulations. Many of our customers who purchase our products have high sustainability standards, and any environmental non-compliance by us could harm our brand and reputation and impact customers' buying decisions.
Maintaining environmental compliance can be challenging given the changing patchwork of environmental laws and regulations that prevail at the U.S. federal, state, regional, and local level and internationally. Most existing environmental laws and regulations preceded the introduction of our innovative fuel cell technology and were adopted to apply to technologies existing at the time (i.e., large coal, oil, or gas-fired power plants). Guidance from these agencies on how certain environmental laws and regulations may or may not be applied to our technology can be inconsistent.
In most jurisdictions where air permits and various land use permits are required for installation of larger Energy Server system installations, the length of time to obtain these permits has increased. Moreover, the level of certainty around the issuance of such permits has decreased and where issued, the cost of compliance has been and can be prohibitive. We have experienced a reluctance in certain areas to issue permits for natural gas Energy Server systems and, even when that reluctance is overcome, we have seen conditions imposed, including a requirement to blend costly renewable fuels or other similar measures that might advance climate goals. The timing associated with these processes and the cost associated with related conditions impact our selling activities.
Our technology is moving faster than the regulatory process in many instances and there are inconsistencies between how we are regulated in different jurisdictions. It is possible that regulators could delay or prevent us from conducting our business in some way pending agreement on, and compliance with, shifting regulatory requirements. Such actions could delay the installation of our products, could result in penalties, could require modification or replacement or could trigger claims of performance warranties and defaults under customer contracts that could require us to repurchase equipment, any of which could adversely affect our business, financial performance, brand and reputation. In addition, new energy or environmental laws or regulations or new interpretations of existing laws or regulations could present marketing, political or regulatory challenges and could require us to upgrade or retrofit existing equipment, which could result in materially increased capital and operating expenses.
Tech & Innovation
Total Risks: 8/60 (13%)Above Sector Average
Innovation / R&D4 | 6.7%
Innovation / R&D - Risk 1
We may introduce and promote new technologies that have not yet been proven at commercial scale, and which may not work as intended, be delivered on a timely basis or at all, be developed according to specifications and/or received well by customers.Innovation / R&D - Risk 2
Our products may not be successful if we are unable to maintain alignment with evolving industry standards and requirements.As we invest in research and development to sustain or enhance our existing products, it is possible that the introduction of new technologies and the emergence of new industry standards or requirements could make our products less desirable or obsolete. Further, in developing our products, we make assumptions with respect to which standards, requirements, or policies will be demanded by our customers, standards-setting organizations and applicable law. If market acceptance of our products is reduced or delayed or the standards-setting organizations or legislative or regulatory authorities fail to develop timely, commercially viable standards that support our products, our business would be harmed.
Innovation / R&D - Risk 3
Our ability to develop new solutions and enter into new markets could be negatively impacted by regulatory restrictions, market acceptance, or if we are unable to identify and successfully engage with partners to assist in such development or expansion.Our ability to develop new solutions and successfully enter new markets relies heavily on navigating regulatory landscapes and gaining market acceptance. Regulatory restrictions, such as stringent compliance requirements, can delay the launch of new solutions, increase development costs, or limit the scope of our innovations. Additionally, achieving market acceptance depends on factors such as customer trust, perceived value, and compatibility with existing systems and behaviors. If we fail to anticipate or address these challenges, our growth potential could be significantly hindered.
As we continue to develop new solutions, features and products and expand into new markets, including international markets, we may need to identify business partners, suppliers, and other third parties to facilitate such development and expansion. Identifying such partners, suppliers, and other third parties is a lengthy process and is subject to significant risks and uncertainties, such as an inability to negotiate mutually acceptable terms or such partner's inability to execute as negotiated. In addition, there could be delays in the design, manufacture and installation of new products or the incorporation of third party components into our solutions such as CHP, CCUS, microgrids, batteries, and other distributed energy resources, and we may not be timely in the development of new solutions, products or entry into new markets, limiting our ability to expand our business and harming our financial condition and results of operations.
Innovation / R&D - Risk 4
Our future growth will depend on expanding and diversifying our products and market opportunities, and if we are not successful, our operating results and future growth prospects could be adversely affected.We plan to enhance our future growth opportunities by expanding our energy solutions. This includes expanding the features of and uses for our Energy Server systems, including providing options for carbon capture and heat output, and by expanding the markets in which we sell our products. These opportunities will demand our focus, including the allocation of personnel, financial resources, and management oversight. If we fail to effectively allocate our resources or follow through on these opportunities, our business and operational results may be adversely affected.
Our investments may not result in the growth we expect, or the timing of when we expect it, for a variety of reasons, including changes in growth trends, evolving and changing markets and increasing competition, market opportunities, technology and product innovation, and changes in policy support, taxation and subsidies, and regulation. We may introduce new technologies or products that do not work, are not delivered on a timely basis, are not developed according to product or cost specifications, are not well received by customers, or do not receive the policy, taxation and subsidies, or other regulatory support that was anticipated. Moreover, there may be fewer opportunities than we expect due to a decline in business or economic conditions or a decreased demand in these markets or for our new products from our expectations, our inability to successfully execute our sales and marketing plans, or for other reasons. In addition to our current growth opportunities, our growth may be reliant on our ability to identify and develop new opportunities. This process is inherently risky and may result in investments in time and resources for which we do not achieve any return or value. These risks are enhanced by attempting to introduce multiple breakthrough technologies and products simultaneously.
Our growth opportunities are subject to constant and rapidly changing and evolving technologies and evolving industry standards and may be replaced by new technological concepts or platforms. If we do not develop innovative and reliable product offerings and enhancements in a cost-effective and timely manner that are attractive to customers in these markets, if we are otherwise unsuccessful entering and competing in these new product categories, if the new product categories in which we invest our limited resources do not emerge as opportunities or do not produce the growth or profitability we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our business and results of operations could be adversely affected.
Trade Secrets3 | 5.0%
Trade Secrets - Risk 1
We may need to defend ourselves against claims that we infringed, misappropriated, or otherwise violated the intellectual property rights of others, which may be time-consuming and would cause us to incur substantial costs.Trade Secrets - Risk 2
Our patent applications may not result in issued patents, and our issued patents may be successfully challenged in litigation or post-grant proceedings, either of which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.We cannot be certain that our pending patent applications will result in issued patents or that any of our issued patents will afford protection against a competitor. The scope and enforceability of patents involves complex legal and factual questions, and the breadth of claims allowed is subject to disagreement. As a result, we cannot be certain that the patent applications that we file will result in patents being issued or that our patents and any patents that may be issued to us in the future will afford protection against competitors with similar technology. In addition, patent applications filed in foreign countries are subject to laws, rules, and procedures that differ from those of the U.S., and thus we cannot be certain that foreign patent applications related to issued U.S. patents will be issued in other regions. Furthermore, even if these patent applications are accepted and respective patents are issued, some foreign countries provide significantly less effective patent enforcement than the U.S.
In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that we need to license or design around, either of which would increase our costs and may adversely affect our business, prospects, and operating results.
Trade Secrets - Risk 3
Our inability to effectively protect and enforce our intellectual property rights may undermine our competitive position, and litigation to protect our intellectual property rights may be costly.Policing unauthorized use of proprietary technology can be difficult and expensive, and the measures we have taken to protect our intellectual property rights, including our trade secrets, may not be sufficient to prevent such use. For example, many of our engineers reside in California where it is not legally permissible to prevent them from leaving employment with us and working for a competitor. Similarly, the FTC has been active with regard to non-compete provisions which may impact our ability to prevent our employees from leaving employment with us and working for a competitor. Also, litigation may be necessary to enforce our intellectual property rights, including protecting our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation may result in our intellectual property rights being challenged, limited in scope, or declared invalid or unenforceable. We cannot be certain that the outcome of any litigation will be in our favor, and adverse determination in any such litigation could impair our intellectual property rights, business, prospects, brand, and reputation.
We rely primarily on patents, trade secrets, copyrights, and trademarks, and non-disclosure, confidentiality, and other types of contractual restrictions to establish, maintain, and enforce our intellectual property and proprietary rights. However, our rights under these intellectual property laws and agreements afford us only limited protection and the actions we take to establish, maintain, and enforce our intellectual property rights may not be adequate. For example, our trade secrets and other confidential information could be discovered by or disclosed in an unauthorized manner to third parties. Additionally, intellectual property rights owned or licensed to us could be challenged, invalidated, or declared unenforceable in judicial or administrative proceedings, or circumvented, designed around by our competitors, infringed, or misappropriated. Competitors could copy or reverse engineer our products or develop and market products that are substantially equivalent to or superior to our own. Any of these possibilities, including the unauthorized use of our intellectual property by others, could reduce our competitive advantage and have a material adverse effect on our business, financial condition, or operating results. In addition, the laws of some countries do not protect intellectual property rights as fully as do the laws of the U.S. Many U.S.-based companies have encountered substantial intellectual property infringement in foreign countries, including countries where we sell products. Even if foreign patents are granted, effective enforcement in foreign countries may not be available. We may not be able to effectively protect our intellectual property rights in these markets or elsewhere. If an impermissible use of our intellectual property or trade secrets were to occur, our ability to sell our products at competitive prices may be adversely affected and our business, financial condition, operating results, and cash flows could be adversely affected.
In connection with our expansion into new markets, we may need to develop relationships with new partners, including project developers and/or financiers who may require access to certain of our intellectual property in order to mitigate perceived risks regarding our ability to service their projects over the contracted project duration. In addition, expansion into new markets may require us to manufacture or source components from suppliers in such new markets. If we are unable to come to agreement regarding the terms of such access or find alternative means to address new market requirements, such failure may negatively impact our ability to expand into new markets. Alternatively, we may be required to develop new strategies for the protection of our intellectual property, which may be less protective than our current strategies and could therefore erode our competitive position.
Cyber Security1 | 1.7%
Cyber Security - Risk 1
Our internal computer systems, and those of our third-party providers, may fail or may suffer from events beyond our control, including security breaches and other cybersecurity events, which could compromise our intellectual property and other confidential information, disrupt our product development programs and manufacturing operations, harm product performance, and/or damage the Company's brand and reputation, any of which could reduce our revenue and earnings, increase our expenses and expose us to legal and regulatory claims.Ability to Sell
Total Risks: 6/60 (10%)Below Sector Average
Competition2 | 3.3%
Competition - Risk 1
We face significant competition.Competition - Risk 2
We face supply chain competition, including competition from businesses in other industries, which could result in insufficient inventory and negatively affect our results of operations.Certain of our suppliers also supply parts and materials to other businesses, including businesses engaged in the production of consumer electronics and other industries unrelated to fuel cells. As a relatively low-volume purchaser of certain of these parts and materials, we may be unable to procure a sufficient supply of the items in the event that our suppliers fail to produce sufficient quantities to satisfy the demands of all of their customers, which could materially harm our financial condition and results of operations.
Demand2 | 3.3%
Demand - Risk 1
Our AI customer mix is increasing due to the continued adoption of AI tools, and the resulting growth in AI data centers and their resulting power needs to support our business expansion. Slower expansion of AI data centers due to actual or perceived deceleration in AI adoption or other factors could have an adverse impact on our business, financial condition and results of operations.Demand - Risk 2
Distributed energy generation and hydrogen production are emerging markets, and they may not receive widespread market acceptance or demand may be lower than we expect, which may make evaluating our business and future prospects difficult.Distributed energy generation and hydrogen production are still emerging markets. It is uncertain whether potential customers will embrace distributed generation or hydrogen production in general, or our solutions in particular. Enterprises may be unwilling to adopt our solutions over traditional, competing, and/or alternative power sources such as electricity from the grid, nuclear, hydro, coal, geothermal and/or intermittent solar and/or wind power paired with storage, or alternative means of producing hydrogen. This could be due to the perception that our technology or our company is unproven, lack of confidence in our business model, unavailability of third-party service providers to operate and maintain our solutions, lack of awareness of our products, or their perception of regulatory or political challenges, including challenges pertaining to technologies that use natural gas fuels or have carbon emissions.
The viability and demand for our solutions may be impacted by many factors outside of our control, including:
- market acceptance of our products (including, for example, anti-natural gas sentiment or misalignment with renewable and zero carbon procurement goals);- cost competitiveness, reliability, and performance of our products compared to traditional or competing power sources;- prices and availability of traditional or competing power solutions;- availability and amount of government subsidies and incentives;- the introduction, emergence, continuance, maturation or success of, or increased government support for, other hydrogen production or alternative energy generation technologies and products (including, for example, small scale nuclear and geothermal);- geopolitical and macroeconomic instability, including wars, terrorism, political unrest, actual or threatened public health emergencies and outbreak of disease, inflation, the recessionary environment, boycotts, adoption or expansion of government trade restrictions, and other business restrictions which may negatively impact the demand for our products, or which may cause our customers to push out, cancel, or refrain from placing orders; and - an increase in interest rates or tightening of the supply of capital in the global financial markets (including a reduction in total tax equity availability) which could make it difficult to finance our products.
If the market for our solutions does not continue to develop as we anticipate, our business will be harmed. As a result, predicting our future revenue and appropriately budgeting for our expenses is difficult, and we have limited insight into trends that may emerge and affect our business. If actual results differ from our estimates or if we adjust our estimates in future periods, our operating results and financial position could be materially and adversely affected.
Sales & Marketing2 | 3.3%
Sales & Marketing - Risk 1
Our products have significant upfront costs, and, for some customers, we need to attract financiers to help them finance purchases.Sales & Marketing - Risk 2
Our products involve a lengthy sales and installation cycle, and if we fail to close sales on a regular and timely basis, our business could be harmed.Our sales cycle is typically 8 to 12 months but can vary considerably. To make a sale, we must typically provide a significant level of education to prospective customers regarding the use and benefits of our products and technology. The period between initial discussions with a potential customer and the eventual sale usually depends on a number of factors, including the potential customer's budget, selection of financing type, and term of the contract. AI and data center customers and other large loads, tend to have longer sales cycles. Prospective customers often undertake a significant evaluation process that may further extend the sales cycle, and which evaluation may be negatively impacted by general market and economic conditions such as inflation, rising interest rates, availability of capital, a recessionary environment, geopolitical instability, energy availability and costs, and the availability and effects of government initiatives. Once a customer decides to purchase our product, it may take a significant amount of time for us to fulfill the sales order, generally due to variables within the customer's control including permitting, building, availability of gas infrastructure. Generally, it takes between six to twelve months or more from the entry into a sales contract until the installation of our products. The lengthy sales and installation cycles are subject to a number of significant risks, some of which are outside of our control. Due to the long sales and installation cycles, we may expend significant resources without being certain of generating a sale.
The delivery and installation of our products has a significant impact on the timing of the recognition of our product and installation revenue. Many factors can cause a lag between the time that a customer signs a contract and our recognition of product revenue. These factors include the number of the Energy Server systems installed per site, local permitting and utility requirements, utility interconnection queues and any identified transmission and distribution upgrades, environmental, health and safety requirements, weather, customer facility construction schedules, customers' operational considerations, and the timing of financing. Many of these factors are unpredictable and their resolution is often outside of our or our customers' control. Customers may also ask us to delay installation for reasons unrelated to the foregoing, such as for operational considerations or delays in their financing arrangements. Further, due to unexpected delays, deployments may require unanticipated expenses to expedite delivery of materials or labor to ensure the installation meets the timing objectives. These unexpected delays and expenses can be exacerbated in periods in which we deliver and install a larger number of smaller projects. In addition, if even relatively short delays occur, there may be a significant shortfall between the revenue we expect to generate in a particular period and the revenue that we are able to recognize.
Macro & Political
Total Risks: 3/60 (5%)Below Sector Average
International Operations1 | 1.7%
International Operations - Risk 1
Expanding operations internationally could expose us to additional risks.Natural and Human Disruptions1 | 1.7%
Natural and Human Disruptions - Risk 1
Geopolitical events and conditions could adversely affect our business, financial condition and operating results.Capital Markets1 | 1.7%
Capital Markets - Risk 1
Trade tariffs could have a material adverse effect on our business.See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.