Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2025

We have prepared the consolidated financial statements included herein pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”), and as permitted by those rules, including all disclosures required by generally accepted accounting principles as applied in the U.S. (“U.S. GAAP”). Certain prior period amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

These consolidated financial statements reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. We use a qualitative approach in assessing the consolidation requirement for our variable interest entities (“VIEs”), which we refer to as a tax equity partnership (2015 ESA Project Company, LLC, also referred to as our power purchase agreement (i.e., PPA), or the “PPA Entity”, “PPA V”), a joint venture in the Republic of Korea (the “Korean JV”), and the Fund JVs (see Note 7—Investments in Unconsolidated Affiliates in this Annual Report on Form 10-K). This approach focuses on determining whether we have the power to direct those activities of the PPA Entity, the Korean JV, and the Fund JVs that most significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits, which could potentially be significant to the PPA Entity, the Korean JV, and the Fund JVs. We have concluded that we are the primary beneficiary of the Korean JV for all periods presented and were the primary beneficiary for the PPA Entity until August 2023, when it was sold as a result of the repowering of the Energy Server systems. We are not the primary beneficiary of any of the Fund JVs, and we account for our interests in those entities under the equity method of accounting. We continuously assess our relationships with the Korean JV and the Fund JVs to determine whether we are, or are not, the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation.

The sale of an operating company with a portfolio of the PPAs in which we do not have an equity interest is called a “Third-Party PPA.” We have determined that, although these entities are VIEs, we do not have the power to direct those activities of the Third-Party PPAs that most significantly affect their economic performance. We also do not have the obligation to absorb losses, or the right to receive benefits, which could potentially be significant to the Third-Party PPAs. Because we are not the primary beneficiary of these activities, we do not consolidate Third-Party PPAs.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. The most significant estimates include (i) the determination of the stand-alone selling price, (ii) valuation of financial instruments associated with the Amended Securities Purchase Agreement (the “SPA”) with SK ecoplant Co., Ltd. (“SK ecoplant”, formerly known as SK Engineering & Construction Co., Ltd.), (iii) modification of performance-based stock unit awards, (iv) the assessment of the realizability of deferred tax assets, including the need for a valuation allowance, evaluation of uncertain tax positions, and estimates related to future taxable income and tax-planning strategies, (v) inventory valuation, specifically excess and obsolescence provisions for obsolete or unsellable inventory, (vi) valuation of share-based consideration payable to customer’s customer, and (vii) in relation to property, plant and equipment (specifically Energy Server systems), assumptions relating to economic useful lives and impairment assessments.

Other accounting estimates include variable consideration relating to product performance guaranties, lease and non-lease components and related financing obligations such as incremental borrowing rates, estimated output, efficiency and residual value of our products, product performance warranties and guaranties and extended maintenance, derivative valuations, estimates relating to contractual indemnities provisions, stock-based compensation expense, and financing obligation allocations in managed service transactions. In addition, certain of such estimates could require further judgment or modification and therefore carry a higher degree of variability and volatility. Actual results could differ materially from these estimates under different assumptions and conditions.

Revenue Recognition

We primarily earn product and installation revenue from the sale and installation of our Energy Server systems and other products, service revenue by providing services under operations and maintenance services contracts, and electricity revenue by

selling electricity to customers under PPAs and Managed Services Agreements. We offer our customers several ways to finance their use of our Energy Server systems. Customers, including some of our international channel providers and the Third-Party PPAs, may choose to purchase our Energy Server systems outright. Customers may also enter into contracts with us for the purchase of electricity generated by our Energy Server systems (i.e., Managed Services Agreements), which is then financed through one of our financing partners (i.e., Managed Services Financings). Finally, prior to its sale in August 2023, customers were able to purchase electricity through our PPA Entity (i.e., Portfolio Financings).

Revenue Recognition under ASC 606, Revenue from Contracts with Customers

In applying Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers revenue is recognized by following a five-step process:

1.Identify the contract(s) with a customer. Evidence of a contract generally consists of an agreement, or a purchase order issued pursuant to the terms and conditions of a distributor, reseller, purchase, use and maintenance agreement, maintenance services agreements or energy supply agreement.

2.Identify the performance obligations in the contract. Performance obligations are identified in our contracts and primarily include transferring control of our products, installation of the Energy Server systems, providing maintenance services and maintenance services renewal options which, in certain situations, provide customers with material rights.

3.Determine the transaction price. The purchase price stated in an agreed-upon purchase order or contract is generally representative of the transaction price. When determining the transaction price, we consider the effects of any variable consideration, which include performance guarantees that may be payable to our customers. In fiscal years 2023 through 2025, certain contracts included price adjustments related to the domestic content bonus tax credit under the IRA. These adjustments were evaluated as variable consideration, and we estimated the amount using the most likely amount method based on our assessment of meeting the domestic content criteria.

4.Allocate the transaction price to the performance obligations in the contract. The transaction price in a contract is allocated based upon the relative standalone selling price of each distinct performance obligation identified in the contract.

5.Recognize revenue when (or as) we satisfy a performance obligation. We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of the promised products or services to a customer. Revenue related to price adjustments under the IRA domestic content bonus tax credit, treated as variable consideration, is recognized when the associated performance obligations are satisfied, subject to the constraint that the amount recognized is not probable of a significant revenue reversal.

We sometimes combine contracts governing the sale and installation of our Energy Server systems with the related non-cancelable maintenance services contracts and account for them as a single contract at contract inception to the extent the contracts are with the same customer. These contracts are not combined when the customer for the sale and installation of the Energy Server systems is different to the maintenance services contract customer. We also assess whether any contract terms including default provisions, put or call options result in components of our contracts being accounted for as financing or leasing transactions outside of the scope of ASC 606.

Most of our contracts contain performance obligations with a combination of our products, installation and maintenance services. For these performance obligations, we allocate the total transaction price to each distinct performance obligation based on the relative standalone selling price. Our maintenance services contracts are typically subject to renewal by customers on an annual basis. We assess these maintenance services renewal options at contract inception to determine whether they provide customers with material rights that give rise to separate performance obligations.

The total transaction price is determined based on the total consideration specified in the contract, including variable consideration in the form of (i) contract price adjustments related to (a) the domestic content bonus tax credit under the IRA, (b) project delays, (c) liquidated damages, etc., and (ii) a performance guaranty payment that represents potential amounts payable to customers. Variable consideration related to contract price adjustments is estimated using the most likely amount method based on our assessment of meeting the domestic content criteria. The expected value method is generally used when estimating variable consideration related to a performance guaranty payment, which typically reduces the total transaction price due to the nature of the performance obligations to which the variable consideration relates. These estimates reflect our historical experience and current contractual requirements which cap the maximum amount that may be paid. The expected value method requires judgment and considers multiple factors that may vary over time depending upon the unique facts and

circumstances related to each performance obligation. Depending on the facts and circumstances, a change in variable consideration estimate will either be accounted for at the contract level or using the portfolio method.

We exclude from the transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts are not included as a component of net sales or cost of sales and are instead recorded as sales tax payable. Property taxes are recorded in the cost of electricity revenue.

We allocate the transaction price to each distinct performance obligation based on relative stand-alone selling prices. Given that we typically sell our products together with the related installation and maintenance services, standalone selling prices are not directly observable. We estimate standalone selling prices by using a cost-plus approach. Costs relating to our products include all direct and indirect manufacturing costs, applicable overhead costs and costs for normal production inefficiencies (i.e., variances). We then apply a margin to our products based on our Company’s pricing strategy. As our business offerings evolve over time, we may be required to modify the expected margin in subsequent periods and our revenue could be materially affected. Costs relating to installation include all direct and indirect installation costs. The margin we apply reflects our profit objectives relating to installation. Costs for maintenance services arrangements are estimated over the life of the maintenance contracts and include estimated future material costs and non-material costs. Material costs over the period of the service arrangement are impacted significantly by the longevity of the fuel cells themselves. We apply a lower margin to our total service costs than to our products as it best reflects our long-term service margin expectations and comparable historical industry service margins.

We recognize product revenue at a point in time when our customers obtain control of our products. Control of the installations is transferred to the customers over time, and the related revenue is recognized over time as the performance obligation is satisfied using the cost-to-cost (percentage-of-completion) method. We use an input measure of progress to determine the amount of revenue to be recognized during each reporting period. We recognize maintenance services revenue, including revenue associated with any related customer material rights, over time as we perform service maintenance activities.

Amounts billed to our customers for shipping and handling activities are considered contract fulfillment activities and not a separate performance obligation of the contract. Shipping and handling costs are recorded within the cost of revenue.

The following is a description of the principal activities from which we generate revenue. Our four revenue streams are classified as follows:

Product Revenue—All of our product revenue is generated from the sale of our products to direct purchase customers, including financing partners on the Third-Party PPAs and sale-and-leaseback transactions, and international channel providers. We generally recognize product revenue from contracts with customers at the point that control is transferred to the customers. This occurs when we achieve customer acceptance, which depending on the contract terms includes: (i) when the product is shipped and delivered to our customers, (ii) when the product is shipped and delivered and is physically ready for startup and commissioning (i.e., Mechanical Completion), or (iii) when the product is shipped and delivered and is turned on and operational (i.e., Commencement of Operations or “COO”), if required.

Under our traditional lease financing option, we sell our Energy Server systems through a direct sale to a financing partner who, in turn, leases the Energy Server systems to the customer under a lease agreement. With our sales to our international channel providers, our international channel providers typically sell the Energy Server systems to, or sometimes provide a PPA to, an end customer. In both traditional lease and international channel providers’ transactions, we contract directly with the end customer to provide extended maintenance services after the end of the standard warranty period. As a result, since the customer that purchases the server is a different and unrelated party to the customer that purchases extended warranty services, the product and maintenance services contract are not combined.

Installation Revenue—Nearly all of our installation revenue relates to the installation of the Energy Server systems sold to the customers as part of a direct purchase and to financing parties as part of a traditional lease or Portfolio Financings. We recognize installation revenue over time as control of the installation services transfers to the customer. We measure progress toward completion using an input method based on installation costs incurred relative to total estimated costs, and recognize revenue during each reporting period in proportion to the costs incurred to satisfy the performance obligation.

Billing to customers are recorded within deferred revenue when related to performance obligations that have not yet been satisfied, and within customer deposits if payments are refundable. Payments received from customers are recorded within deferred revenue when related to performance obligations that have not yet been satisfied, and within customer deposits when they represent advance payments prior to contract commencement. The related cost of such product and installation is also

deferred as a component of deferred cost of revenue in the consolidated balance sheets. These amounts remain on the consolidated balance sheets until control of product and installation is transferred to the customer.

Service Revenue—Service revenue is generated from operations and maintenance agreements (“O&M Agreements”). As part of the first year of O&M services, we also monitor the operations of the underlying products and provide output and efficiency warranties and guaranties. We have determined that this standard first-year O&M services (including the warranties and guaranties) is a distinct performance obligation—being a promise to stand-ready to maintain our products when and if required during the first year following installation. We also sell to our customers extended annual maintenance services that effectively extend the standard first-year warranty coverage at the customer’s option. These customers generally have an option to renew or cancel the extended maintenance services on an annual basis and nearly every customer has renewed historically. Similar to the standard first-year O&M services, the optional extended annual maintenance services are considered a distinct performance obligation—being a promise to stand-ready to maintain the products when and if required during the renewal service year.

Given our customers’ renewal history, we anticipate that most of them will continue to renew their maintenance services agreements each year for the period of their expected use of the products. The contractual renewal price may be less than the stand-alone selling price of the maintenance services and consequently the contract renewal option may provide the customer with a material right. We estimate the standalone selling price for customer renewal options that give rise to material rights using the practical alternative by reference to optional maintenance services renewal periods expected to be provided and the corresponding expected consideration for these services. This reflects the fact that our additional performance obligations in any contractual renewal period are consistent with the services provided under the standard first-year warranty. Where we have determined that the customers have material rights as a result of their contract renewal option, we recognize that portion of the transaction price allocated to the material rights over the period in which such rights are exercised.

Payments from customers for the extended maintenance contracts are generally received at the beginning of each service year. Accordingly, the customer payment received is recorded as a customer deposit and revenue is recognized over the related service period as the services are performed.

Electricity Revenue—In certain Managed Services Financings pursuant to which we are party to a Managed Services Agreement with a customer in a sale-leaseback-sublease arrangement, we may recognize electricity revenue. We first determine whether the Energy Server systems under the sale-and-leaseback arrangement of a Managed Services Financing were “integral equipment.” As the Energy Server systems were determined not to be integral equipment, we determined if the leaseback was classified as a financing lease or an operating lease.

Starting in the second half of fiscal year 2021, we completed several successful sale-and-leaseback transactions in which we transferred control of the Energy Server system to the financier and leased it back as an operating lease to provide electricity to the end customer.

In order for the transaction to meet the criteria for successful sale-and-leaseback accounting, control of the Energy Server systems must transfer to the financier, which requires, among other criteria, the leaseback to meet the criteria for an operating lease in accordance with ASC 842, Leases (“ASC 842”). Accordingly, for such transactions where control transfers and the leaseback is classified as an operating lease, the proceeds from the sale to the financier are recognized as revenue based on the fair value of the Energy Server systems sold and are allocated between product revenue and installation revenue based on the relative standalone selling prices.

We recognize an operating lease liability for the Energy Server systems leaseback obligation based on the present value of the future payments to the financier that are attributed to the Energy Server systems leaseback using our incremental borrowing rate (“IBR”). We also record an operating lease right-of-use asset, which is amortized over the term of the leaseback, and is included as a cost of electricity revenue on the consolidated statements of operations.

For certain sale-and-leaseback transactions, we receive proceeds from the financier in excess of the fair value of the Energy Server systems in order to finance our ongoing costs associated with the operation of the Energy Server systems during the term of the end customer agreement to provide electricity. Such proceeds are recognized as financing obligations.

We allocate payments we are obligated to make under the leaseback agreement with the financier between the operating lease liability and the financing obligation based on the proportion of the financing obligation to the total proceeds to be received.

In addition to Managed Services Financings, before the sale in August 2023 of our last consolidated PPA Entity, we were

selling electricity produced by Energy Server systems owned directly by us. This PPA Entity purchased the Energy Server systems from us and sold electricity produced by these systems to customers through long-term PPAs. Customers were required to purchase all of the electricity produced by those Energy Server systems at agreed-upon rates over the course of the PPAs’ contractual term.

We recognize revenue from the satisfaction of performance obligations under our PPAs and Managed Services Financings to provide electricity to our end customers as the electricity is provided over the term of the agreement in the amount invoiced, which reflects the amount of consideration to which we have the right to invoice, and which corresponds to the value transferred under such arrangements.

Share-Based Consideration Payable to Customer or Customer’s Customer

We may provide share‑based consideration (e.g., warrants) to customers or to other parties that purchase our products from our customers. Such amounts are accounted for as consideration payable to a customer and reduce revenue unless the consideration is for a distinct good or service at fair value. We measure and classify share‑based consideration under 718, Compensation—Stock Compensation (“ASC 718”). If a grant date has not been established, we estimate fair value at each reporting date and update the transaction price on a cumulative catch‑up basis until a grant date occurs. Once grant date established, equity‑classified awards are not remeasured and amounts are recorded in Additional paid-in capital. Revenue is reduced at the later of (i) when we recognize revenue for the related goods or services or (ii) when we promise the consideration. For details refer to Note 3—Revenue Recognition, section Commitment to Issue Share-Based Consideration Payable to Customer’s Customer in this Annual Report on Form 10-K.

Modifications

Contract modifications are accounted for as separate contracts if the additional products and services are distinct and priced at stand-alone selling prices. If the additional products and services are distinct, but not priced at standalone selling prices, the modification is treated as a termination of the existing contract and the creation of a new contract. If the additional products and services are not distinct within the context of the contract, the modification is combined with the original contract and either an increase or decrease in revenue is recognized on the modification date.

Deferred Revenue

We record a contract liability (presented as deferred revenue in our consolidated financial statements, excluding customer deposits) when we receive payment from a customer before the related products or services have been delivered. This liability is reduced, and revenue is recognized, as we satisfy the underlying performance obligations. The related costs are deferred as a component of deferred cost of revenue in the consolidated balance sheets. Prior to shipment of the product or the commencement of performance of maintenance services, any prepayment made by the customer is recorded as a customer deposit. Deferred revenue related to material rights for options to renew are recognized in revenue over the maintenance services period.

A description of the principal activities from which we recognize the cost of revenues associated with each of our revenue streams are classified as follows:

Cost of Product Revenue—Cost of product revenue consists of costs of our products that we sell to direct purchase, including financing partners on the Third-Party PPAs, international channel providers and traditional lease customers. It includes costs paid to our materials suppliers, direct labor, manufacturing and other overhead costs, shipping costs, provisions for excess and obsolete inventory and the depreciation costs of our equipment. For the Energy Server systems sold to customers pending installation, we provide warranty reserves as a part of product costs for the period from transfer of control of the Energy Server systems to the earlier of one year or Commencement of Operations.

Cost of Installation Revenue—Cost of installation revenue primarily consists of the costs to install our Energy Server systems that we sell to direct purchase, including financing partners on the Third-Party PPAs and traditional lease and successful sale-and-leaseback customers. It includes the cost of materials and service providers, personnel costs, shipping costs and allocated costs.

Cost of Service Revenue—Cost of service revenue consists of costs incurred under maintenance service contracts for all customers. It includes the cost of field replacement units, personnel costs for our customer support organization, certain allocated costs, and extended maintenance-related product repair and replacement costs.

Cost of Electricity Revenue—Cost of electricity revenue primarily consists of the depreciation of the cost of the Energy Server systems owned by us or the consolidated PPA Entity (before it was sold in August 2023). The cost of electricity revenue is generally recognized over the term of the Managed Services Agreement or customer’s PPA contract.

Revenue Recognized from Portfolio Financings Through PPA Entities

Revenue Recognized from Portfolio Financings Through the PPA Entity

In 2010, we began selling our Energy Server systems to tax equity partnerships in which we held an equity interest as a managing member, or PPA entities. The investors in such PPA entities contributed cash to them in exchange for an equity interest, which then allowed PPA entities to purchase the Operating Company and the Energy Server systems.

As we identified customers, the Operating Company entered into a PPA with a customer pursuant to which the customer agreed to purchase the power generated by the Energy Server systems at a specified rate per kilowatt hour for a specified term. As such, the Operating Company, wholly owned by the PPA Entity, entered into a maintenance services agreement with us following the first year of service to extend the standard one-year performance warranties and guaranties. This intercompany arrangement was eliminated on consolidation. The PPA Entity qualified as an operating lease under ASC 842. Revenue under this arrangement was recognized as electricity revenue and service revenue and was provided to the customer at rates specified under the PPA.

Warranty Costs

We generally provide a manufacturer’s warranty to our products sold to our customers, international channel providers, and financing parties for up to one year following the date of COO of the Energy Server systems. This standard warranty covers defects in materials, workmanship and manufacturing or performance conditions under normal use and service conditions for the first year following COO. Such standard warranty is considered to be assurance-type warranty and consequently does not give rise to performance obligations under ASC 606 and are accounted for as warranty cost accruals under ASC 460, Guarantees.

We recognize warranty costs for those contracts that are considered to be assurance-type warranties and consequently do not give rise to performance obligations or for those maintenance service contracts that were previously in the scope of ASC 605-20-25, Separately Priced Extended Warranty and Product Maintenance Contracts.

In addition, as part of our standard warranty period and Managed Services Agreement obligations, we monitor the operations of the underlying systems and provide output and efficiency guaranties (collectively “product performance guaranties”). If the Energy Server systems run at a lower efficiency or power output than we committed under our performance warranty or guaranty, we will reimburse the customer for this underperformance. Our performance obligation includes ensuring the Energy Server systems operate at least at the efficiency and/or power output levels set forth in the customer agreement. Our aggregate reimbursement obligation for a performance guaranty for each customer is capped based on the purchase price of the underlying Energy Server systems. Product performance guaranty payments are accounted for as a reduction in service revenue. We accrue for product performance guaranties based on the actual or estimated amounts (when actual data is not available) reimbursable at each reporting period and recognize the costs as a reduction to revenue.

Shipping and Handling Costs

We record costs related to shipping and handling in cost of product revenue, cost of installation revenue and cost of service revenue as they are incurred.

Sales and Utility Taxes

We recognize revenue on a net basis for taxes charged to our customers and collected on behalf of the taxing authorities.

Sales Tax—Sales tax collected from customers is recorded as a liability, pending remittance to the taxing jurisdiction. Consequently, sales taxes have been excluded from revenues and costs. It is recognized as a liability until remitted to the applicable state.

Utility Taxes—We are subject to utility taxes in certain jurisdictions on the sale of electricity to customers under PPAs. Because we control the electricity generated by our Energy Server systems before it is transferred to a customer, we are considered the principal in these transactions under ASC 606. Accordingly, utility taxes are presented on a gross basis, with amounts billed to customers included in electricity revenue and the corresponding tax obligations recorded in cost of electricity revenue.

Advertising and Promotion Costs

Advertising and Promotion Costs—Expenses related to advertising and promotion of products are charged to sales and marketing expenses as incurred.

Research and Development

Research and Development—We conduct internally funded research and development activities to improve anticipated product performance and reduce product life-cycle costs. Research and development costs are expensed as incurred and include salaries and expenses related to employees conducting research and development and other costs.

Stock-Based Compensation

Stock-Based Compensation—We account for time-based and performance-based stock options, restricted stock units (“RSUs”) and performance-based stock units (“PSUs”) awarded to employees and non-employee directors under the provisions of ASC 718.

Stock-based compensation costs for time-based and performance-based stock options are measured using the Black-Scholes valuation model. The Black-Scholes valuation model uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of the award, the risk-free interest rate for a period that approximates the expected term of the stock options and the expected dividend yield. In developing estimates used to calculate assumptions, we established the expected term for employee options as well as expected forfeiture rates based on the historical settlement experience and after giving consideration to vesting schedules. For options with a vesting condition tied to the attainment of service and market conditions, stock-based compensation costs are recognized using Monte Carlo simulations. Recognition of stock-based compensation expense associated with the performance-based stock options commences when the performance condition is considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones. Stock-based compensation costs are recorded net of estimated forfeitures such that expense is recorded only for those stock-based awards that are expected to vest. We generally recognize stock-based compensation expense for time-based and performance-based stock options using the straight-line attribution method over the requisite service period, which typically corresponds to the vesting term of three to four years.

Stock-based compensation costs for RSUs and PSUs are measured based on the fair value of the underlying shares on the date of grant. We recognize the compensation cost for RSUs using a straight-line basis over the requisite service period of the RSUs, which is generally three to four years. We recognize compensation cost for PSUs over the requisite service period, which generally spans three years, based on the estimated probability of achieving the performance conditions. For awards with cliff vesting at the end of the performance period, expense is recognized on a straight-line basis over the three-year service period. For awards that vest in annual installments based on yearly performance targets, expense is recognized using the graded vesting method as achievement of the respective milestones becomes probable.

We also use the Black-Scholes valuation model to estimate the fair value of stock purchase rights under the Bloom Energy Corporation 2018 Employee Stock Purchase Plan (the “2018 ESPP”). The fair value of the 2018 ESPP purchase rights is recognized as an expense under the multiple options approach. Forfeitures are estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from initial estimates.

Stock issued to grantees in our stock-based compensation is from authorized and previously unissued shares. Stock-based compensation costs are recorded in the consolidated statements of operations based on the employees’ respective functions. Stock-based compensation costs directly associated with the product manufacturing operations process are capitalized into inventory and deferred cost of revenue and expensed when the capitalized asset is used in the normal course of the sales or services process.

We record deferred tax assets for awards that result in deductions on our income tax returns, unless we cannot realize the deduction (i.e., we are in a net operating loss position), based on the amount of compensation cost recognized and our statutory tax rate.

Income Taxes

We account for income taxes using the liability method under ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on net operating loss carryforwards, research and development credit carryforwards and temporary differences resulting from the different treatment of items for tax and financial reporting purposes. Deferred items are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. Additionally, we must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. We have provided a full valuation allowance on our domestic deferred tax assets because we believe it is more likely than not that our deferred tax assets will not be realized.

We follow the accounting guidance in ASC 740, which requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. We record a liability for the difference between the benefit recognized and measured pursuant to ASC 740-10 and the tax position taken or expected to be taken on our tax return. To the extent that the assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. We established reserves for tax-related uncertainties based on estimates of whether, and the extent to which additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that the tax return positions are fully supportable. The reserves are adjusted in light of changing facts and circumstances such as the outcome of a tax audit. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. We recognize interest and penalties related to unrecognized tax benefits in income tax expense.

Comprehensive Loss

Our comprehensive loss is comprised of net loss attributable to common stockholders, foreign currency translation adjustment, and comprehensive loss attributable to noncontrolling interest.

Fair Value Measurement

ASC 820, Fair Value Measurement (“ASC 820”), defines fair value, establishes a framework for measuring fair value under U.S. GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes a fair value hierarchy based on three levels of inputs, of which the first two

are considered observable and the last unobservable, that may be used to measure fair value:


Level 1						Quoted prices in active markets for identical assets or liabilities. Financial assets utilizing Level 1 inputs typically include money market securities and U.S. Treasury securities.

Level 2						Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We use Level 2 inputs to determine the fair value of our debt instruments (term loans and convertible senior notes).

Level 3						Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Financial liabilities utilizing Level 3 inputs include contract embedded derivatives. Their valuations are performed using a Monte Carlo simulation model which considers various potential electricity price curves over the sales contract terms.

Cash and Cash Equivalents

Cash, Cash Equivalents, and Restricted Cash

Cash equivalents consist of highly liquid short-term investments with maturities of 90 days or less at the date of purchase.

Restricted cash is held as collateral to provide financial assurance that we will fulfill obligations and commitments primarily related to the Third-Party PPAs and Managed Services Agreements. Restricted cash also includes maintenance service reserves and facility lease agreements. Restricted cash that is expected to be used within one year of the balance sheet date is classified as a current asset, whereas restricted cash expected to be used more than one year from the balance sheet date is classified as a non-current asset.

Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

Cash equivalents consist of highly liquid short-term investments with maturities of 90 days or less at the date of purchase.

Accounts Receivable

Accounts receivable primarily represent trade receivables from sales to customers recorded at amortized cost less allowance for credit losses. The allowance for credit losses reflects our best estimate about future losses over the contractual life of outstanding accounts receivable taking into consideration historical experience, specific allowances for known troubled accounts, other currently available information including customer financial condition, and both current and forecasted economic conditions.

Inventories

Inventories consist principally of raw materials, work-in-process and finished goods and are stated on a first-in, first-out basis at a lower of cost or net realizable value. We record inventory excess and obsolescence provisions for estimated obsolete or unsellable inventory, equal to the difference between the cost of inventory and estimated net realizable value based upon assumptions about market conditions and future demand for products generally expected to be utilized over the next 12 to 24 months, including product needed to fulfill our warranty obligations. If actual future demand for our products is less than currently forecasted, additional inventory provisions may be required. Once a provision is recorded, it is maintained until the product to which it relates is sold or otherwise disposed.

Property, Plant and Equipment

Property, plant and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. The Energy Server systems are depreciated to their residual values over their useful economic lives which reflect consideration of the terms of their related PPA. These useful lives are reassessed when there is an expected change in the use of the Energy Server systems. Leasehold improvements are depreciated over the shorter of the lease term or their estimated depreciable lives. Buildings are amortized over the shorter of the lease or property term or their estimated depreciable lives. Assets under construction are capitalized as costs are incurred and depreciation commences after the assets are put into service within their respective asset class.

Impairment of Long-Lived Assets

Our long-lived assets include property, plant and equipment and the Energy Server systems capitalized in connection with our Managed Services Financing Program and Portfolio Financings. The carrying amounts of our long-lived assets are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than originally estimated.

Equity Method Investments

We account for investments in entities based on the level of ownership and the ability to exercise significant influence over operating and financial policies. If an entity is organized as a limited partnership or limited liability company and maintains separate ownership accounts, we generally account for our investment using the equity method if our ownership interest is 50% or less, unless our interest is so minor that we have virtually no influence over the investee’s operating and financial policies. For all other types of investments, we generally apply the equity method of accounting if our ownership interest is between 20% and 50% and we exercise significant influence over the investee’s operating and financial policies. These investments are presented as investments in unconsolidated affiliates on our consolidated balance sheets.

Income or loss from equity-method investees is reported in equity in earnings (loss) of unconsolidated affiliates on our consolidated statements of operations, and the related carrying value is presented as investments in unconsolidated affiliates on our consolidated balance sheets. Distributions received from equity method investees, if any, are recorded as reductions to the carrying value of the investment on our consolidated balance sheets. Our equity in earnings (loss) of unconsolidated affiliates is adjusted for profit (loss) incurred from sales transactions. Such profit is amortized into equity in earnings (loss) of unconsolidated affiliates on our consolidated statements of operations over the remaining useful lives of the underlying assets.

When timely financial information of an equity method investee is not available, we record our share of the investee’s results on a one-quarter reporting lag using the best estimate, consistent with ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). We believe this approach is reasonable and consistently applied. We evaluate whether any events or transactions during the lag period would materially affect our consolidated financial position or results of operations and, if so, record appropriate adjustments in the current period.

An impairment of an investment in an unconsolidated affiliate is recognized when circumstances indicate that a decline in the investment value is other-than-temporary.

Derivatives

We account for our derivative instruments as a liability which are carried at fair value on the consolidated balance sheets. Changes in the fair value of those derivatives are recorded through earnings in the consolidated statements of operations, as they do not qualify neither as cash flow hedges, nor for hedge accounting.

VIE—Methodology and Significant Judgments

We assess at inception and on an ongoing basis whether entities with which we are involved are VIEs and, if so, whether we are the primary beneficiary. We identify the activities that most significantly affect the VIE’s economic performance (e.g., equipment selection and specification, project development and construction oversight, operating and maintenance decision‑making, and commercial/financing decisions) and evaluate whether we have the power to direct those activities. We also assess whether we have the obligation to absorb expected losses or the right to receive expected residual returns that could potentially be significant to the VIE. These assessments are performed in accordance with the applicable guidance under ASC 810, Consolidations (“ASC 810”). Determining the primary beneficiary requires judgment, including evaluating contractual rights (explicit and implicit), decision‑making rights versus protective rights, related‑party considerations, and variability created by guarantees or other support arrangements.

Consolidated VIE—Our Korean JV is a VIE that we consolidate because we have the power to direct the activities that most significantly impact its performance and are exposed to potentially significant benefits/losses from those activities.

Unconsolidated VIEs—Our interests in certain Fund JVs are VIEs for which we are not the primary beneficiary because we do not have power over the activities that most significantly affect the VIEs’ economic performance and our exposure is limited to our equity interests and contractual capital commitments. These interests are accounted for under the equity method.

Allocation of Profits and Losses of Consolidated Entities to Noncontrolling Interests

We generally allocate profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. The determination of equity in earnings under the HLBV method requires management to determine how proceeds, upon a hypothetical liquidation of the entity at book value, would be allocated between our investors. The noncontrolling interest balance is presented as a component of permanent equity in the consolidated balance sheets. As of December 31, 2025 and 2024, we had one VIE which we consolidate, the Korean JV, which profit and loss are allocated to noncontrolling interests under the HLBV method.

Foreign Currency Considerations

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currency of the Company’s parent entity is the U.S. dollar.

The functional currencies of our foreign subsidiaries are local currencies. The functional currency of the Korean JV is the local currency, the South Korean won (“KRW”), since the joint venture is financially independent of its U.S. parent and the KRW is the currency in which the joint venture generates and expends cash. The assets and liabilities of these entities are translated at the rate of exchange at the balance sheet date. Revenue and expenses are translated at the weighted average rate of exchange during the period. For these entities, translation adjustments resulting from the process of translating the local currency financial statements into the U.S. dollars are included in other comprehensive loss. Translation adjustments attributable to noncontrolling interests are allocated to and reported as part of the noncontrolling interests in the consolidated financial statements.

Transactions made in a currency other than the functional currency are remeasured to the functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the exchange rate at that date and non-monetary assets and liabilities are measured at historical rates. Foreign currency transaction gains and losses are included as a component of Other income (expense), net in our consolidated statements of operations.

The reporting currency for these consolidated financial statements is the U.S. dollar.

Accounting Guidance Not Yet Adopted and Recent Accounting Pronouncements

Accounting Guidance Not Yet Adopted

In November 2024, Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. We are currently evaluating this guidance, but do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). This update clarifies the effective date of ASU 2024-03, which requires public business entities to provide expanded disclosures about the nature of expenses included in income statement captions. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. We are currently evaluating this guidance, but do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”). This update revises the guidance for identifying the accounting acquirer in a business combination when the legal acquiree is a VIE. The amendments require entities to apply the same factors used for voting interest entities when determining the accounting acquirer in transactions primarily effected through the exchange of equity interests. The guidance is effective for annual and interim periods beginning after December 15, 2026, and will be applied prospectively. We do not expect ASU 2025-03 to have a material impact on our consolidated financial statements.

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This update introduces a practical expedient for all entities when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under the practical expedient, when developing reasonable and supportable forecasts as part of estimating expected credit losses, an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods. We are currently evaluating the impact of ASU 2025-05 on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”). This update eliminates references to prescriptive and sequential software development stages within Subtopic 350-40. Under the revised guidance, entities must begin capitalizing software costs once both of the following conditions are met: (a) management has approved and committed funding for the software project; (b) it is probable that the project will be completed and the software will be used as intended (the “probable-to-complete” threshold). The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. We are currently evaluating the impact of ASU 2025-06 on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). This update introduces a scope exception from derivative accounting for certain non-exchange-traded contracts and clarifies that Topic 606 applies initially to share-based noncash consideration received from a customer. The amendments are effective for annual and interim periods beginning after December 15, 2026, and may be applied prospectively or using a modified retrospective approach. We are currently evaluating the impact of ASU 2025-07 on our consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans (“ASU 2025-08”). This update expands the use of the gross-up method to certain acquired loans classified as “purchased seasoned loans,” eliminating the Day 1 credit loss expense for these loans. The amendments are effective for annual and interim periods beginning after December 15, 2026, and will be applied prospectively. We do not expect ASU 2025-08 to have a material impact on our consolidated financial statements.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting

Improvements (“ASU 2025-09”). This update clarifies and expands hedge accounting guidance to better reflect the economics of risk management activities and address issues arising from reference rate reform. Key amendments include allowing broader aggregation of forecasted transactions for cash flow hedges, expanding hedge accounting for certain nonfinancial forecasted transactions, and eliminating certain restrictions on using net written options and foreign-currency-denominated debt instruments in hedge strategies. The amendments are effective for annual and interim periods beginning after December 15, 2026, and will be applied prospectively. We do not expect ASU 2025-09 to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”). This update provides authoritative guidance on the recognition, measurement, and presentation of government grants received by business entities, an area previously lacking in U.S. GAAP. The amendments define government grants, establish recognition criteria, and require disclosures about the nature of grants, accounting policies applied, and significant terms and conditions. The amendments are effective for public business entities for annual periods beginning after December 15, 2028, with early adoption permitted. We do not expect ASU 2025-10 to have a material impact on our consolidated financial statements.

Recent Accounting Pronouncements

In August 2023, the FASB issued ASU 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”). This guidance requires joint ventures to measure all assets and liabilities at fair value upon formation. We adopted ASU 2023-05 on January 1, 2025; however, the standard was not applicable to our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-05”). This guidance provides recognition, measurement, presentation, and disclosure requirements for certain crypto assets. We adopted ASU 2023-08 on January 1, 2025; however, the standard was not applicable to our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). This update enhances transparency by requiring expanded disclosures related to the income tax rate reconciliation and income taxes paid. We adopted ASU 2023-09 on January 1, 2025, applying the guidance retrospectively. While the adoption has no impact on our financial statements, it has resulted in incremental disclosures within the footnotes to our consolidated financial statements (see Note 15—Income Taxes in this Annual Report on Form 10-K).

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”). This guidance clarifies the application of scope guidance in ASC 718, Compensation—Stock Compensation (ASC 718”) by providing an illustrative example to help entities determine whether profits interest and similar awards should be accounted for under ASC 718. We adopted ASU 2024-01 on January 1, 2025, and applied the amendments prospectively. The adoption of this standard did not have a material impact on our consolidated financial statements.

In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements (“ASU 2024-02”). This update removes references to various FASB Concepts Statements and includes technical corrections such as conforming amendments, clarifications, and other minor improvements intended to simplify U.S. GAAP without resulting in significant accounting changes for most entities. We adopted ASU 2024-02 on January 1, 2025. The adoption of this standard did not have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”). This standard clarifies the accounting for inducements offered to holders of convertible debt instruments to convert their debt-to-equity securities. Under the guidance, an entity recognizes an inducement expense equal to the fair value of all securities and other consideration transferred in excess of the fair value of the securities and other consideration issuable pursuant to the original conversion terms, measured as of the offer acceptance date. The guidance applies to fiscal years and interim periods within fiscal years beginning after December 15, 2025. We early adopted ASU 2024-04 in fiscal year 2025 and applied the guidance to the induced conversion of our existing convertible notes during that period. The adoption did not require a cumulative-effect adjustment to opening retained earnings. See Note 8—Outstanding Loans and Security Agreements, sections Induced Conversions of the Existing Notes in this Annual Report on Form 10-K.

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from

Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). This update clarifies the accounting for share-based consideration payable to a customer, including revising the definition of performance condition, eliminating the forfeiture policy election for customer awards, and clarifying that the variable consideration constraint does not apply to such awards. The amendments are effective for annual periods beginning after December 15, 2026, including interim periods, and may be applied using either a modified retrospective or full retrospective approach. We early adopted ASU 2025-04 in fiscal year 2025 and applied the guidance to the accounting of share-based consideration payable to customer during that period. The adoption did not require a cumulative-effect adjustment to opening retained earnings. See Note 3—Revenue Recognition, sections Commitment to Issue Share-Based Consideration Payable to Customer’s Customer in this Annual Report on Form 10-K.