Capstone's Clean Energy Comeback: Profitability Hits Second Straight Quarter

LOS ANGELES, CA – February 12, 2026 – Capstone Green Energy Holdings, Inc. (OTCQX: CGEH) today announced robust financial results for the third quarter of fiscal year 2026, signaling that its strategic turnaround plan is taking firm hold. The clean energy solutions provider reported its second consecutive quarter of positive net income, driven by a 33% surge in revenue and a significant expansion in gross margins, validating the company's disciplined focus on profitability and high-growth markets.

For the quarter ending December 31, 2025, Capstone posted revenue of $26.8 million, a substantial increase from $20.1 million in the same period last year. More impressively, the company achieved a net income of $1.2 million, a dramatic reversal from the $2.7 million net loss reported in the third quarter of fiscal 2025. This performance underscores the growing momentum behind the company's 'Three Pillar' strategy, which prioritizes financial health and operational excellence.

A Turnaround Solidified by Strategy

The impressive top-line growth is only part of the story. Capstone's gross margin swelled to 39%, a 14-percentage-point jump from 25% in the prior-year period. This expansion reflects a healthier product mix, cost-saving initiatives, and the successful integration of its Cal Microturbine distributor territory acquisition. Adjusted EBITDA, a key metric of operational profitability, soared to $5.1 million, a tenfold increase from the $0.5 million recorded a year ago, marking the seventh consecutive quarter of positive Adjusted EBITDA.

These results are the tangible outcome of a multi-year effort to streamline operations and focus on core strengths. Management credits the turnaround to its "Three Pillar strategy," a framework focused on Financial Health, Sustainable Excellence, and cultural revitalization. The strategy involves rigorous cost controls, such as the Design for Manufacturing and Assembly (DFMA) initiatives that have helped offset tariff impacts, alongside a strategic focus on more profitable revenue streams.

“Our third quarter results reflect strong execution across our Three Pillar strategy, translating revenue growth into meaningful margin expansion and, most importantly, our second consecutive quarter of positive net income,” said Vince Canino, President and Chief Executive Officer of Capstone Green Energy. “The disciplines embedded in our Financial Health Pillar are taking hold, supported by the systems, tools and processes we are implementing under our Sustainable Excellence Pillar.”

Powering the Digital Age and Critical Infrastructure

Capstone's resurgence is strategically aligned with some of the most powerful trends in the global economy: the explosive growth of data centers and the increasing need for reliable, decentralized power. The global data center microgrid market is projected to grow at a compound annual rate of over 15%, reaching nearly $12 billion by 2033 as data centers' electricity demand skyrockets.

Capstone is positioning its fuel-flexible and low-emission microturbines as an ideal solution for this market, offering on-site power generation that enhances grid independence and resilience for mission-critical facilities. The company’s technology provides an essential backstop against grid instability, a growing concern for industries reliant on uninterrupted power.

This focus is further evidenced by the recent acquisition of Cal Microturbine, which strengthens the company's foothold in key markets. The growth in the company's Microturbine Products category, a primary driver of the quarter's revenue increase, indicates that this strategic pivot is resonating with customers in high-demand sectors like data infrastructure, commercial, and industrial operations.

The Shift to an 'As-a-Service' Model

Beyond selling hardware, Capstone is transforming its business model by expanding its Energy-as-a-Service (EaaS) offerings. This segment, which includes rentals, power purchase agreements (PPAs), and long-term service contracts, provides customers with Capstone's clean energy solutions without the large upfront capital expenditure. The model not only broadens Capstone's potential customer base but also builds a foundation of stable, recurring revenue.

In the third quarter, higher utilization rates within the EaaS rental fleet contributed significantly to the positive results. This shift towards a service-oriented model provides financial flexibility for customers and predictable cash flow for Capstone, creating a more resilient business structure that is less susceptible to the cyclical nature of large equipment sales.

“For the seventh consecutive quarter, we delivered significant improvement in gross profit, net income, and Adjusted EBITDA, driven by favorable product mix, improved cost structure, and disciplined expense management,” stated John Miller, Interim Chief Financial Officer. He emphasized the company's focus on sustaining this momentum, noting, “We are focused on sustaining margin expansion, optimizing cash flow, and maintaining financial flexibility as we support ongoing growth across our core markets.”

Navigating Complex Financials

While the headline numbers show a company on the upswing, investors may note a discrepancy between the positive net income and the reported net loss per share of $1.79. This is due to a complex accounting requirement known as the Hypothetical Liquidation Book Value (HLBV) method, which is applied to entities with complex capital structures involving preferred equity units. The HLBV calculation requires an allocation of earnings that, in this case, resulted in a loss attributable to common shareholders on paper, even as the company as a whole was profitable.

Looking beyond this accounting complexity, the company's financial health appears solid. Total cash, including restricted cash, stood at $15.2 million as of December 31, 2025, an increase of $7.5 million from the previous quarter. The company also confirmed it remained in compliance with all its financial covenants during the period, providing further evidence of its strengthening financial position.

The year-to-date performance paints an even clearer picture of recovery. For the first nine months of fiscal 2026, revenue hit $83.0 million, a 42% increase over the prior year. Net income for the period was $1.3 million, a stark contrast to the $7.1 million loss in the same timeframe last year. This sustained performance suggests that Capstone's recent success is not a one-off event but the result of a fundamental and successful strategic realignment.