Ideal Power (NASDAQ:IPWR) said customer programs are taking longer than expected to convert into production orders, even as the company expands its sales pipeline and prepares its B-TRAN semiconductor products for applications in AI data centers and electric vehicles.
On its third-quarter 2026 earnings call, President and CEO David Somo said Ideal Power still expects AI data center-related revenue to begin in the second half of 2027. But an Asian customer’s decision to pursue a higher-current solid-state circuit breaker has delayed a near-term order opportunity that management had previously expected in the fourth quarter.
“Our highest priority remains advancing customer opportunities through the funnel and into volume production orders, revenue growth, and long-term shareholder value creation,” Somo said.
Customer Shift Delays Near-Term Orders
Ideal Power delivered 800-volt, 63-amp solid-state circuit breaker prototypes to an Asian customer for evaluation during the third quarter. After consulting its end customers, that company decided to target a 125-amp product instead, Somo said.
Ideal Power no longer expects initial low-volume orders for the 63-amp prototype from that customer in the fourth quarter. It plans to re-engage when its 125-amp reference design kit becomes available in the coming weeks. Somo said the change was not related to B-TRAN’s performance and that the prototype performed as expected.
The company is pursuing other opportunities across a range of current ratings. Somo said a new, larger potential customer in Asia is evaluating a 63-amp solution for battery energy storage systems and could demonstrate it at an end-of-year customer exhibition if testing succeeds. The customer could use the breakers internally and sell them to outside customers, he said.
Ideal Power is also close to finalizing a statement of work with a global industrial technology company for a funded 800-volt, 125-amp breaker development project planned to begin in the fourth quarter, according to Somo.
Data Center Projects and Sales Pipeline
Ideal Power is working with an industry partner on a B-TRAN-enabled intelligent circuit breaker intended for evaluation in a U.S. hyperscaler’s planned 800-volt DC development environment. Somo said the companies are finalizing a statement of work for an engineering study and modeling project that they expect to begin in the fourth quarter with development funding.
The study will precede a planned hardware phase, a change from the original sequence. Somo said the work is intended to help define system architecture and protection requirements before the hardware evaluation.
Ideal Power also recently announced a collaboration with Power Integrations on a self-powered solid-state circuit breaker for 800-volt DC data centers. The companies have demonstrated a prototype and are developing a reference design for potential customers. Somo said Power Integrations’ sales and applications engineering resources could extend Ideal Power’s commercial reach.
The company’s 800-volt, 63-amp reference design kit is stocked at distributor Richardson Electronics, which has begun accepting orders. Somo said the kits can help customers with backgrounds in electromechanical breakers evaluate B-TRAN and develop solid-state products more quickly.
Ideal Power’s estimated sales funnel grew to approximately $450 million from about $400 million at its mid-August call. Somo said the opportunity remains roughly evenly divided between automotive applications and AI data center and other industrial circuit protection applications. The funnel includes opportunities at different stages, from early discussions to active testing and product design.
Automotive and Manufacturing Updates
Ideal Power has delivered second-generation custom package samples and development kits to Stellantis for evaluation in an electric vehicle solid-state contactor project. Somo said the companies are working on system-level specifications and are moving toward the next funded phase. He expects Ideal Power’s automotive revenue to consist of development revenue for the next couple of years because of longer vehicle design cycles.
The company also signed a long-term supply agreement with a high-volume, automotive-qualified semiconductor foundry in Asia during the third quarter and achieved functional first silicon there. Somo said Ideal Power is working toward completing JEDEC qualification of its packaged B-TRAN devices by year-end.
Third-Quarter Financial Results
Chief Financial Officer Tim Burns said Ideal Power recorded modest revenue in the third quarter. Its net loss widened to $3.6 million from $2.9 million a year earlier, while operating expenses rose to $3.9 million from $3 million. Burns attributed the expense increase primarily to personnel costs, stock-based compensation and non-cash patent impairments.
Cash burn was $2.9 million, compared with $2.7 million a year earlier. Ideal Power ended September with $38.3 million in cash and cash equivalents and no debt. Management expects fourth-quarter cash burn of approximately $2.7 million to $2.9 million and full-year cash burn of $10.4 million to $10.6 million.
Beyond reported revenue, Burns said investors should watch for signed development agreements, increased traction for reference design kits and potential design-ins. He said the company expects production orders and product revenue from the data center market primarily in the second half of 2027.
About Ideal Power (NASDAQ:IPWR)
Ideal Power Inc. (NASDAQ: IPWR) is a semiconductor company developing advanced power-management technologies for electrical systems. Its principal technology is the bidirectional bipolar junction TRANsistor, or B-TRAN, a solid-state power switch designed to conduct and control electrical current in both directions with the potential for lower conduction losses and improved efficiency compared with conventional power-switching devices. The company is focused on commercializing B-TRAN-based products and related semiconductor solutions for applications including electric vehicles, renewable-energy systems, energy storage, electric-grid infrastructure, industrial equipment, and other high-power electrical systems.
