Fluence Energy's Q3 2025 Earnings Call: Unpacking Contradictions in Tariffs, Backlog, and U.S. Demand

Tariff impact on supply chain and pricing strategy, backlog coverage for 2026 guidance, U.S. demand and project execution, and backlog solidness and revenue guidance are the key contradictions discussed in Fluence Energy's latest 2025Q3 earnings call.



Revenue and Production Challenges:
- Fluence Energy reported revenue of $603 million for Q3 2025, which was below expectations by $100 million.
- The shortfall was primarily due to delayed ramping up of volume at their new U.S. manufacturing facilities.

Impact of Energy Policy Changes:
- The One Big Beautiful Bill Act (OB3) extends investment tax credits and enhances Fluence's competitive position with domestic content requirements.
- The supportive regulatory environment is prompting increased customer interest and project opportunities in the U.S. market.

Backlog and Contract Activity:
- Fluence ended Q3 with approximately $4.9 billion in backlog, including $1.1 billion of new contracts signed in Q3.
- This growth is attributed to large contracts in Australia and renewed activity in the U.S. following tariff reductions and regulatory clarity.

Gross Margin Improvement:
- Despite the revenue shortfall, the company achieved a 15.4% adjusted gross margin for Q3, above target.
- This margin improvement was driven by disciplined execution and cost control strategies, particularly in Europe and Asia.