Episode Details

ERock (EROC) Q2 2026 — Q2 2026 (quarter ended June 30), the first quarter reported since ERock listed on the NYSE on June 11 2026 at USD21.50. The 8-K cleared EDGAR at 4:19pm ET on August 11, AFTER the close, so August 12 IS the reaction session: it gapped up 16.62 pct and closed plus 22.84 pct on 2.56x volume. Two more sessions took it to USD16.72 - plus 48.62 pct, yet still 22.2 pct below the listing price. ERock builds utility-grade natural gas generators that supply data centres and factories with power the grid cannot deliver fast enough. In its first quarter as a public company revenue FELL 41.7 pct to USD39.9M - and contracted backlog rose to about USD1.7bn, up 10x. The income statement and the order book tell opposite stories, and the whole USD3.67bn equity value rests on which one is right. THE CALL: HOLD (3/5, MEDIUM - THE ORDER BOOK IS REAL, THE PRICE ALREADY PAYS FOR IT CONVERTING IN FULL) — base-case value ~$14.36 vs ~$16.72 today. KEY METRICS: - CALL: HOLD, 3/5. Fair value USD14.36 against the USD16.72 close, -14.1 pct. Bear USD6.18 / base USD14.10 / bull USD23.07, weighted 25/50/25. Each case takes a 2028 revenue figure, applies ERock's own second-half margin ambition, capitalises it, discounts back at 12 pct and adds the USD626.6M of cash. - THE TWO HEADLINES, BOTH TRUE: revenue of USD39.878M was DOWN 41.7 pct against Q2 2025's USD68.458M - the figure the company prints itself - and UP 25.7 pct against Q1 2026's USD31.736M. The widely reported plus 23 pct was neither: it was the SHARE PRICE on August 12, the reaction session. - THE ANGLE: contracted backlog reached about USD1.7bn from about USD0.2bn a year earlier, up 10x, in the same quarter revenue fell 42 pct. A 470 MW equipment order from Anthropic extends production commitments into 2028, and the 10-Q states the backlog will be worked off over approximately two years. - THE LOSS IS MOSTLY A REFINANCING: the USD67.719M net loss contains USD48.774M of loss on extinguishing debt, booked when listing proceeds retired the borrowings - 72 pct of it, and non-operating. Filed loss per share is USD0.06, but struck on only 48.2M weighted shares for the post-listing days. - WHAT THE GUIDE REQUIRES: first-ever guidance of USD435-465M revenue and USD3-9M adjusted EBITDA. The first half delivered USD71.614M, so the second half must produce about USD378M - 5.3x the first half, roughly USD189M a quarter, against USD39.9M just delivered - and swing margin about 44 points. - WHO IS FUNDING IT: operating cash flow was POSITIVE USD268.9M for the half, but USD358.4M of that is the increase in customer prepayments. Strip it and operating cash flow is MINUS USD89.4M. Contract liabilities stand at USD528.4M. Cash is USD626.6M with zero borrowings and an undrawn USD250M facility. - WHAT THE TAPE REQUIRES: on 219,400,080 economic shares at USD16.72 the market value is USD3.67bn and enterprise value USD3.04bn - 1.79x the entire contracted order book. That price already discounts about USD2.21bn of 2028 revenue, 12.1x FY2025's USD183.1M and more than the whole backlog. What to watch: UP: a September quarter near the USD189M the guide implies, another order on the scale of the 470 MW Anthropic award, or evidence the Hyperion factory is shipping at rate. DOWN: a third-quarter print anywhere near the USD39.9M just delivered, any slip in the 2028 commitments, a guidance cut in November, or collection trouble on the customer owing 62 pct of receivables. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.