Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 13, 2026 · Beat 2 of last 7 quarters
NET Power Inc. reported Q2 FY2026 EPS of $-0.91, a miss of 1157.1% against consensus.
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NET Power's pivot to unabated gas power underscores the acute power shortage facing AI infrastructure buildout, with grid constraints pushing hyperscalers toward behind-the-meter solutions. The company's focus on speed and scale, with carbon capture as a future option, reflects a pragmatic response to market realities that could influence how other power developers prioritize projects.
NET Power reported Q2 2026 results with approximately $310 million in cash and no debt. The company announced a strategic pivot to unabated natural gas power generation, citing overwhelming market feedback from hyperscalers and data center developers prioritizing speed and reliability over clean power. Project Permian is being redesigned for colocated demand, with carbon capture deferred to later phases. The company is working with a potential customer to secure additional gas power equipment and is advancing land rights with Oxy for multi-site development. Management noted the Entropy team commissioned the world's first clean gas power plant in Canada, a milestone for the industry.
Management announced a strategic recalibration, shifting near-term focus from clean power with post-combustion capture to unabated natural gas power generation, colocated with customer load, to meet urgent market demand for speed, scale, and reliability. They expect to deploy power on a 2028 timeline, with carbon capture preserved as a future option, particularly at Project Permian. They are working to secure an additional 120 MW of gas power equipment, bringing total secured capacity to nearly 200 MW for the first phase. Management emphasized that this is a change in sequencing, not conviction, and that the balance sheet provides runway to be deliberate in securing offtake and financing. They anticipate more announcements in the coming months as customer conversations progress.
“The market needs speed, scale and reliability, and it's going to pay a fair price for it.”
on Market demand
“We build the power first, a lot of it on an accelerated time line to meet customers' needs now and we capture when it makes sense.”
on Strategic recalibration
“This for us is really -- it's a change in sequencing, not a change in conviction.”
on Strategy
How do you view the longer-term strategic positioning for NET Power with this new focus, and where do you win against other developers in West Texas?
Danny Rice explained that in a supply-constrained market, value creation comes from capabilities to meet demand rather than differentiation. He emphasized that West Texas offers abundant gas and land, and the location preserves optionality for future carbon capture, which will become a differentiator once the market reaches equilibrium.
In discussions with potential off-takers, are they more in project origination or well down the development pathway?
Danny Rice noted that grid reliability concerns are pushing customers toward behind-the-meter, off-grid solutions. He highlighted that the site design, originally for PCC, works well for unabated power with high reliability, and that capital not spent on PCC can be used to double installed megawatts.
Given the strategy shift, how are you thinking about sizing the first project and appetite for recip engines?
Danny Rice said they are technology agnostic and evaluating a mix of turbines, recips, and battery storage to deliver the lowest cost three 9s reliability. He emphasized flexibility and the team's deep gas power generation expertise as a differentiator.