PowerCell's Data Center Pivot: A Weak Quarter, a Strong Signal

Order intake accelerates and the first multi-megawatt prime power order lands, marking a strategic shift beyond marine.

PCELL.ST · Earnings Call · 2026-07-16

The Quarter That Wasn't: A Weak Top Line, A Strong Signal

PowerCell's Q2 2026 was admittedly disappointing. Revenues fell 46% year-over-year, and gross margin dropped to 10%, far below the ~25% the CFO says a normal quarter would have delivered. “If we would have had a more normal quarter, you would have anticipated a gross profit margin of around 25%, not the 10% we report now.” — Anders Düring, CFO · 2026-07-16 Yet buried beneath the headline numbers is the clearest strategic shift the company has made in years: the move from marine fuel cell supplier to prime power provider for data centers. “The order value is not the main story here. The significance is far greater than the size of the order. It is a reference case that opens up the door for future multi-megawatt installations in power generation.” — Richard Berkling, CEO · 2026-07-16 The evidence is in the order intake. Sequentially, orders jumped from SEK 50 million to SEK 86 million, accelerating into the close of the quarter and into Q3. As CEO Richard Berkling put it, “Order intake was up in the quarter. The number shows that we are heading in the right direction.” — Richard Berkling, CEO · 2026-07-16 The catalyst is the ECL contract — a ~5 MW PS190 system with associated DMC licenses, valued at roughly SEK 30 million — and a non-binding MOU for up to 300 MW. ECL is not a typical customer; it has spent two years running a hybrid installation with liquid hydrogen, batteries, and diesel generators before selecting PowerCell. This is PowerCell's entrance into the data centers market as a primary power source, not the backup power role PEM fuel cells have traditionally played.

From Backup to Prime Power

The distinction is crucial. CEO Richard Berkling is explicit about the strategic turn:

We own this weak quarter. This is the volatility that we flagged for. It's not a loss of demand.
Richard Berkling, CEO · 2026-07-16

Instead, he points to a structural change in the company's addressable market. The Dynamic Master Controller (DMC) — a control platform that orchestrates multiple fuel cell systems in large installations — is now the key differentiator. It allows PowerCell to move beyond single-system sales into complex, multi-megawatt deployments. As the company's keyword trajectory shows, prime power is a relatively new term for PowerCell, reflecting this strategic pivot. It's supported by the S3 stack's wide operating window (40% to 85% load), which is essential for data center dynamic loads. This pivot builds on a foundation laid over the past year. In the Q4 2025 call, management already signaled the intent: "We have more levers to pull. We made a restructuring of the management team last year, which is going to have a positive effect on 2026 when it comes to cost structure," said CEO Richard Berkling. That cost discipline is now in full effect, as the company right-sizes its cost base to match the revenue reality of 2027.

Hydrogen's Role and the Market Backdrop

The availability of hydrogen — both gray and blue — is a recurring theme. The CFO's explanation of the gross margin decline highlights the confluence of negative media coverage and final delivery costs, but the broader narrative is one of market timing. Global keywords for 20263 show "hydrogen availability" and "gray hydrogen" among the top movers, and PowerCell is riding that wave. The company's outlook hinges on the belief that green hydrogen production will accelerate as off-takers like data centers emerge, even as gray hydrogen provides the immediate bridge. The global earnings tape for the same period shows multiple companies citing data center demand and hydrogen availability. PowerCell is not alone; the theme is broader, but the company's specific positioning — asset-light, with Bosch as a partner for manufacturing and a Chinese sales channel — gives it a unique angle.

The Road Ahead

Management is clear that the proof will come with the second, third, and fourth orders. The ECL contract is a reference case, not a destination. As the CEO said in the Q&A on the 2025-10-23 call: "There is a massive interest from the data center industry." Now it's about converting that interest into real orders. The company is defending breakeven with a leaner cost structure, while preserving the capability to scale when the market turns. That balance — between short-term resilience and long-term competitiveness — is the core of the strategy. Based on the evidence, the signal is positive, but the promises are still to be proven.