Capstone Green Energy (CGRN) Q3 2026 earnings summary

Executive summary

• Q3 FY2026 revenue reached $26.8 million, up 33% year-over-year, with year-to-date revenue at $83.0 million, a 42% increase over the prior year.

• Net income was $1.2 million for the quarter, reversing prior year losses, and year-to-date net income totaled $1.3 million.

• Gross margin improved to 39% from 25% year-over-year, reflecting operational efficiency and cost management.

• Achieved seventh consecutive quarter of positive Adjusted EBITDA, hitting a record $5.1 million for the quarter and $12.3 million year-to-date.

• Growth driven by higher demand for larger capacity products, strong service business performance, and cost discipline.

Financial highlights

• Gross profit for Q3 was $10.4 million (39% margin), more than doubling from $5.0 million (25% margin) a year ago.

• Product and accessories revenue rose to $13.6 million, while rental revenue declined to $3.9 million due to lower oil prices and utilization.

• Parts and services revenue delivered $9.3 million, boosted by a successful year-end initiative.

• Operating expenses rose to $8.4 million for the quarter, mainly due to higher SG&A and R&D spending.

• Cash and equivalents at $15.2 million at quarter end, up from $8.7 million at March 31, 2025.

Outlook and guidance

• Positioned for continued growth in distributed generation, with strong pipelines in commercial/industrial, data center, and microgrid markets.

• Strategic investments in technology, including new low-NOx combustor liners and an 800V DC platform, are expected to drive future growth.

• Management is focused on sustaining margin expansion, optimizing cash flow, and maintaining financial flexibility.

• Substantial doubt exists regarding the ability to continue as a going concern due to liquidity constraints and upcoming debt maturities.

• Exploring refinancing options for $25.3 million in Exit Roll Up Notes maturing December 2026.