ERock (NYSE:EROC) reported second-quarter 2026 revenue of $39.9 million, up 26% sequentially, while outlining plans to scale deliveries against a $1.7 billion contracted power-system sales backlog that the company said has grown roughly tenfold from a year earlier.
The Houston-based provider of distributed power systems held its inaugural earnings call as a public company after completing its initial public offering in June. Chief Executive Officer John Carrington said demand for rapid power deployment is being driven by AI-related load growth, aging grid infrastructure, lengthy gas-turbine lead times and extended interconnection queues.
Backlog Growth and Data Center Contracts
ERock designs, assembles, installs and operates natural-gas distributed generation systems for commercial and industrial customers, data centers and utilities. The company said it has more than 1 GW of installed capacity across over 400 operational sites and a 100% service-renewal rate for its operations and maintenance offerings.
The company’s contracted backlog reached approximately $1.7 billion at the end of the second quarter, rising by $400 million from the first quarter. Chief Financial Officer Ian Blakely said ERock expects the majority of this backlog to become revenue by the end of 2027. The company expects $360 million to $390 million of backlog to convert to revenue during 2026.
ERock said it received an equipment purchase agreement from Anthropic for about 470 MW of generation capacity supporting a new data center. Carrington said installation and service contracts for the project are generally negotiated separately and are expected to follow in the normal course.
Management said the Anthropic agreement contributed to a production schedule that is sold out through 2027 and into 2028. During the question-and-answer session, Carrington said the company is seeing larger opportunities, particularly in AI training, with projects ranging from roughly 5 MW to more than 1 GW and with potential for multiple project phases.
ERock’s pipeline increased more than threefold from the first quarter to the second quarter, according to Carrington. He attributed the growth partly to investments in commercial resources focused on hyperscalers, AI data labs and neoclouds, as well as relationships with utilities.
El Paso Project and Assembly Expansion
The company has begun work on a 366-MW project for El Paso Electric that will support Meta’s data center campus in El Paso. Carrington said El Paso Electric faced an estimated five-year grid-interconnection timeline and selected ERock to provide bridge power. The company expects to commission the site in approximately 15 months.
Under the arrangement described by management, El Paso Electric will collect payments from Meta through a power purchase agreement during the bridge-power period. After grid interconnection, the asset could be moved into the utility’s rate base, according to Carrington.
ERock also highlighted its nearly 150-MW deployment with the California Department of Water Resources. The company said that project reached first commercial operation in less than one year after contract signing, and that it installed approximately 50 MW in two days at the first site.
During the quarter, ERock moved generator assembly into its Hyperion facility in northwest Houston. The company expects the facility to increase annual assembly capacity to approximately 1.2 GW by year-end. Carrington said the expansion is expected to require about $15 million to $20 million and can be replicated relatively quickly because the company’s operations involve assembly rather than heavy manufacturing.
Management said it considers capacity additions prudently and uses roughly 65% contracted capacity as a trigger for evaluating expansion.
Quarterly Results and 2026 Outlook
Second-quarter power-system sales revenue was $26.5 million, up 67% from the first quarter, reflecting additional generator deliveries and installation activity. Ongoing services revenue was $13.3 million, down 15% sequentially because first-quarter campaign work did not recur.
- Gross profit was $7.4 million, for a gross margin of 18.6%.
- Adjusted gross margin was 22.2%, excluding pass-through services revenue and costs.
- Net loss was $67.7 million, compared with a $17.2 million loss in the first quarter.
- Adjusted EBITDA was negative $14 million, compared with negative $12.4 million in the first quarter.
Blakely said the net loss included a $48.8 million loss on debt extinguishment related to the conversion of certain convertible notes before the IPO and repayment of a $30 million term loan with IPO proceeds. He characterized those items as nonrecurring.
The company initiated full-year 2026 guidance for revenue of $435 million to $465 million and adjusted EBITDA of $3 million to $9 million. ERock expects to become adjusted EBITDA-positive in the second half as deliveries and installations increase.
ERock completed its IPO on June 11, selling 27.9 million Class A shares at $21.50 each. The company said the primary offering generated $400 million of gross proceeds and approximately $369 million of net proceeds after fees and offering costs. As of June 30, ERock reported $627 million of unrestricted cash, no outstanding debt and an undrawn $250 million credit facility.
Management said it continues to see demand from utilities as well as data center customers. President Corey Amthor said utilities have shown increased interest over the past six months, tied both to data center development and broader regional load growth. He added that ERock has not seen impacts from recent comments related to Texas’ Batch Zero process, though the company expects the process could experience a slight delay.
About ERock (NYSE:EROC)
ERock Inc provide onsite power solutions. ERock Inc is based in HOUSTON.
