Bloom Energy Announces Fourth Quarter 2020 and Full Year 2020 Financial Results

Rhea-AI Summary

Bloom Energy Corporation (NYSE: BE) reported its Q4 2020 financial results with revenue of $249.4 million, up 16.8% year-over-year, driven by 450 acceptances. Gross margin rose to 25.5%, a 13.8 percentage point increase from Q4 2019, while operating margin improved to (1.8%). For the full year, revenue reached $794.2 million, up 1.1%, with a gross margin of 20.9%. The company expects 2021 revenue between $950 million and $1 billion, with plans for operational cash flow improvements.

Positive

• Q4 revenue of $249.4 million, a 16.8% increase YoY.
• Gross margin improved to 25.5%, up 13.8 percentage points YoY.
• Operating margin improved to (1.8%), up 20.6 percentage points YoY.
• Full-year revenue increased to $794.2 million, up 1.1% YoY.
• 2021 guidance estimates revenue between $950 million and $1 billion.

Negative

• Operating loss of $4.5 million in Q4 2020.
• GAAP EPS of ($0.16) indicates ongoing losses.

Bloom Energy Corporation (NYSE: BE) today announced financial results for its fourth quarter and full year that ended December 31, 2020.

Fourth Quarter Financial Highlights

• Revenue of $249.4 million in the fourth quarter of 2020, an increase of 16.8% compared to revenue of $213.5 million in the fourth quarter of 2019, primarily driven by a 16.6% increase in acceptances.
• 450 acceptances, or 45.0 megawatts (MW), a 16.6% increase year-over-year. Recall that an acceptance typically occurs when the system is turned on and producing full power. For orders where one of our partners performs the installation, our acceptance criteria are different. Those acceptances are generally achieved when the systems are shipped or delivered to our partner. Upon acceptance, the customer order is moved from product backlog and is recognized as revenue.
• Gross margin of 25.5% in the fourth quarter of 2020, an increase of 13.8 percentage points compared to gross margin of 11.7% in the fourth quarter of 2019, primarily driven by an improvement in product gross margin from 10.5% to 38.8% over the same period. This improvement in product gross margins was driven by product cost reductions outpacing ASP reductions.
• Excluding stock-based compensation, non-GAAP gross margin was 27.0% in the fourth quarter of 2020, an increase of 11.3 percentage points compared to non-GAAP gross margin of 15.7% in the fourth quarter of 2019, primarily driven by an improvement in product gross margin.
• Operating margin of (1.8%) in the fourth quarter of 2020, an improvement of 20.6 percentage points compared to operating margin of (22.4%) in the fourth quarter of 2019, driven by the improvements in gross margin and a $14.6 million reduction in stock-based compensation expenses burdening operating expenses.
• Excluding stock-based compensation, non-GAAP operating margin was 4.8% in the fourth quarter of 2020, an improvement of 10.3 percentage points compared to non-GAAP operating margin of (5.5%) in the fourth quarter of 2019, driven by an improvement in gross margin.
• GAAP EPS of ($0.16) and Adjusted EPS of ($0.08) in the fourth quarter of 2020, compared to GAAP EPS of ($0.58) and Adjusted EPS of ($0.29) in the fourth quarter of 2019.

Full Year 2020 Financial Highlights

• Revenue of $794.2 million in 2020, an increase of 1.1% compared to revenue of $785.2 million in 2019, primarily driven by an 11.1% increase in acceptances and offset by the favorable impact of the PPA II upgrade on revenue in 2019.
• 1,326 acceptances, or 132.6 MW, an 11.1% increase versus full year 2019.
• Gross margin of 20.9% in 2020, an increase of 8.5 percentage points compared to gross margin of 12.4% in 2019, primarily driven by an improvement in product gross margin of from 21.9% to 35.8%. This improvement was driven by our product cost reductions outpacing ASP reductions.
• Excluding stock-based compensation, non-GAAP gross margin of 23.1% in 2020, an increase of 4.9 percentage points compared to non-GAAP gross margin of 18.2% in 2019, driven primarily by an improvement in product gross margin.
• Operating margin of (10.2%) in 2020, an improvement of 19.4 percentage points compared to operating margin of (29.6%) in 2019, driven by the improvement in gross margin and a $94.4 million reduction in stock-based compensation expenses burdening operating expenses.
• Excluding stock-based compensation, non-GAAP operating margin of (0.9%) in 2020, an improvement of 3.8 percentage points compared to non-GAAP operating margin of (4.7%) in 2019, driven primarily by an improvement in gross margin.
• GAAP EPS of ($1.14) and Adjusted EPS of ($0.67) in 2020, compared to GAAP EPS of ($2.67) and Adjusted EPS of ($1.07) in 2019.

KR Sridhar, founder, chairman, and chief executive officer, Bloom Energy, commented: “2020 was a year unlike any other in modern history as we dealt with the dual challenges of the COVID-19 global pandemic and an uncertain economy. Yet, Bloom Energy’s management team and employees proved resilient in executing our business plan, delivering strong financial performance, solid operating results and significantly improving our balance sheet. We are well-positioned for growth as we implement our technology road map and build applications for the Bloom Energy Server that solve critical energy problems like resiliency, reducing carbon emissions and costs. As we enter 2021, there are many positive developments. The Biden Administration is embracing proactive climate change policies and continuing a low-interest environment while focusing on critical infrastructure investments that fit well with our strategic approach. And, beyond the United States, there is significant momentum in Asia and opportunities to grow in other markets around the world. We believe our work in 2020 provides a spring board for success in 2021 and beyond.”

Greg Cameron, executive vice president and chief financial officer, Bloom Energy, commented: “We were encouraged by the financial performance during the fourth quarter of 2020 across revenue, gross margin, operating income and cash. Our bookings in the second half of the year gained momentum, and we have a strong backlog for 2021 that provides high project visibility into our 2021 guidance framework and improving cash flow outlook. We continue to make significant progress on reducing our product costs, and our technology investments remain on track.”

Summary of Key Financial Metrics

Preliminary Summary GAAP Profit and Loss Statements
($000)		Q420		Q320		Q419		FY20		FY19
Revenue		249,387		200,305		213,543		794,247		785,177
Cost of Revenue		185,761		144,318		188,595		628,454		687,590
Gross Profit		63,626		55,987		24,948		165,793		97,587
Gross Margin		25.5%		28.0%		11.7%		20.9%		12.4%
Operating Expenses		68,144		56,359		72,820		246,578		330,391
Operating Loss		(4,518)		(372)		(47,872)		(80,785)		(232,804)
Operating Margin		(1.8%)		(0.2%)		(22.4%)		(10.2%)		(29.6%)
Non-operating Expenses1		22,620		11,582		20,415		76,768		74,064
Net Loss		(27,138)		(11,954)		(68,287)		(157,553)		(306,868)
GAAP EPS		($0.16)		($0.09)		($0.58)		($1.14)		($2.67)

1.

Non-Operating Expenses and tax provision and non-controlling interest

Preliminary Summary Non-GAAP Financial Information1
($000)		Q420		Q320		Q419		FY20		FY19
Revenue		249,387		200,305		213,543		794,247		785,177
Cost of Revenue2		182,097		140,750		180,001		610,979		642,161
Gross Profit2		67,290		59,555		33,542		183,268		143,016
Gross Margin2		27.0%		29.7%		15.7%		23.1%		18.2%
Operating Expenses2		55,300		44,192		45,356		190,160		179,529
Operating Income (loss) 2		11,990		15,363		(11,814)		(6,892)		(36,513)
Operating Margin2		4.8%		7.7%		(5.5%)		(0.9%)		(4.7%)
Adjusted EBITDA3		25,521		27,673		1,188		45,497		42,915
Adjusted EPS4		($0.08)		($0.04)		($0.29)		($0.67)		($1.07)

1.		Reference pages 12-15 for detailed reconciliation of GAAP to Non-GAAP financial measures
2.		Excludes stock-based compensation
3.		Adjusted EBITDA is net income (loss) excluding non-controlling interest, gain (loss) on derivative revaluations, fair value adjustment for PPA derivatives, stock-based compensation, provision for income taxes, depreciation and amortization, interest expense and other one-time items
4.		Adjusted EPS is net income (loss) excluding non-controlling interest, gain (loss) on derivative revaluations, fair value adjustment for PPA derivatives and stock-based compensation using the adjusted Weighted Average Shares Outstanding (WASO) share count

Revenue and Margin Highlights

Revenue in the fourth quarter of 2020 included $171.8 million of product revenue, $28.8 million of installation revenue, $32.1 million of service revenue, and $16.6 million of electricity revenue. For the full year 2020, Bloom Energy achieved $518.6 million of product revenue, $101.9 million of installation revenue, $109.6 million of service revenue and $64.1 million of electricity revenue.

GAAP gross margin in the fourth quarter of 2020 was 25.5%, up 13.8 percentage points compared to the fourth quarter of 2019 and 20.9% for the full year 2020, up 8.5 percentage points versus full year 2019. Non-GAAP gross margin in the fourth quarter of 2020 was 27.0%, up 11.3 percentage points compared to the fourth quarter of 2019 and 23.1% for the full year 2020, up 4.9 percentage points versus full year 2019. The improvement in margins for both the fourth quarter and full year 2020 was driven by lower product costs, better performance on installations and higher product margins.

Balance Sheet Highlights

Bloom Energy’s cash position, including restricted cash, as of December 31, 2020 was $416.7 million, compared to $504.4 million as of September 30, 2020. Bloom ended the year with $527.1 million of debt, a decrease of $180.1 million from the third quarter of 2020, which included a reduction of $175.5 million in recourse debt.

2021 Outlook

Bloom announced the following outlook for the full-year 2021:

• Revenue: $950 million - $1 billion
• Non-GAAP Gross Margin*: ~25%
• Non-GAAP Operating Margin*: ~3%
• Cash Flow from Operations: Approaching Positive

*Non-GAAP gross margin and non-GAAP operating margin only exclude stock-based compensation.

Conference Call Details

We will host a conference call today, February 10, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its financial results. To participate in the live call, analysts and investors may call +1 (844) 828-0524 and enter the passcode: 5175667. Those calling from outside the United States may dial +1 (647) 689-5146 and enter the same passcode: 5175667. A simultaneous live webcast will also be available under the Investor Relations section on our website at https://investor.bloomenergy.com/. Following the webcast, an archived version will be available on our website for one year. A telephonic replay of the conference call will be available for one week following the call, by dialing +1 (800) 585-8367 or +1 (416) 621-4642 and entering passcode 5175667.

Use of Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures as defined by the rules and regulations of the Securities and Exchange Commission (SEC). These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We urge you to review the reconciliations of our non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures set forth in this press release, and not to rely on any single financial measure to evaluate our business. With respect to our expectations regarding our 2021 Outlook, we are not able to provide a quantitative reconciliation of non-GAAP gross margin and non-GAAP operating margin measures to the corresponding GAAP measures without unreasonable efforts.

About Bloom Energy

Bloom Energy’s mission is to make clean, reliable energy affordable for everyone in the world. Bloom’s product, the Bloom Energy Server, delivers highly reliable and resilient, always-on electric power that is clean, cost-effective, and ideal for microgrid applications. Bloom’s customers include many Fortune 100 companies and leaders in manufacturing, data centers, healthcare, retail, higher education, utilities, and other industries. For more information, visit www.bloomenergy.com.

Forward-Looking Statements

This press release contains certain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or the negative of these words or similar terms or expressions that concern Bloom’s expectations, strategy, priorities, plans or intentions. These forward-looking statements include, but are not limited to, expectations for growth as we implement our technology roadmap and build new applications; the pace of development of new product markets; the ability of the new Administration to enact new climate change policies; our ability for growth outside the United States; our plans for growth and success in 2021 and beyond; our expectations regarding improving cash flow; our ability to reduce our product costs; our ability to introduce new product; and our financial outlook for 2021. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors including, but not limited to, our limited operating history, the emerging nature of the distributed generation market, the significant losses we have incurred in the past, our ability to service our existing debt obligations, the significant upfront costs of our Energy Servers, the ability to secure financing for our products, the risk of manufacturing defects, the accuracy of our estimates regarding the useful life of our Energy Servers, the availability of rebates, tax credits and other tax benefits, our reliance on tax equity financing arrangements, our reliance upon a limited number of customers, our lengthy sales and installation cycle, construction, utility interconnection and other delays and cost overruns related to the installation of our Energy Servers, business and economic conditions and growth trends in commercial and industrial energy markets, global economic conditions and uncertainties in the geopolitical environment, overall electricity generation market, the impact of the COVID-19 pandemic on the global economy and its potential impact on our supply chain, installation operations, demand for our products, our ability to protect our intellectual property, the restatement of our financial statements as announced in our Current Report on Form 8-K filed with the SEC on February 12, 2020 and other risks and uncertainties detailed in Bloom’s SEC filings from time to time. More information on potential factors that may impact Bloom’s business are set forth in Bloom’s periodic reports filed with the SEC, including its Annual Report on Form 10-K for the year ended on December 31, 2019 as filed with the SEC on March 31, 2020, and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 as filed with the SEC on November 6, 2020, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Bloom’s website at www.bloomenergy.com and the SEC’s website at www.sec.gov. Bloom assumes no obligation to, and does not currently intend to, update any such forward-looking statements.

The Investor Relations section of Bloom’s website at investor.bloomenergy.com contains a significant amount of information about Bloom Energy, including financial and other information for investors. We encourage investors to visit this website from time to time, as information is updated and new information is posted.

Condensed Consolidated Balance Sheets (preliminary & unaudited)
(in thousands)
		December 31,
		2020				2019
Assets
Current assets:
Cash and cash equivalents		$	246,947			$	202,823
Restricted cash		52,470				30,804
Accounts receivable		99,513				37,828
Inventories		142,059				109,606
Deferred cost of revenue		41,469				58,470
Customer financing receivable		5,428				5,108
Prepaid expenses and other current assets		30,718				28,068
Total current assets		618,604				472,707
Property, plant and equipment, net		600,628				607,059
Operating lease right-of-use assets		35,621				—
Customer financing receivable, non-current		45,268				50,747
Restricted cash, non-current		117,293				143,761
Deferred cost of revenue, non-current		2,462				6,665
Other long-term assets		34,511				41,652
Total assets		$	1,454,387			$	1,322,591
Liabilities, Redeemable Noncontrolling Interest, Stockholders’ Deficit and Noncontrolling Interest
Current liabilities:
Accounts payable		$	58,334			$	55,579
Accrued warranty		10,263				10,333
Accrued expenses and other current liabilities		112,004				70,284
Deferred revenue and customer deposits		114,286				89,192
Operating lease liabilities		7,899				—
Financing obligations		12,745				10,993
Current portion of recourse debt		—				304,627
Current portion of non-recourse debt		120,846				8,273
Current portion of recourse debt from related parties		—				20,801
Current portion of non-recourse debt from related parties		—				3,882
Total current liabilities		436,377				573,964
Derivative liabilities		4,989				17,551
Deferred revenue and customer deposits, net of current portion		87,463				125,529
Operating lease liabilities, net of current portion		41,849				—
Financing obligations, non-current		459,981				446,165
Long-term portion of recourse debt		168,008				75,962
Long-term portion of non-recourse debt		102,045				192,180
Long-term portion of non-recourse debt from related parties		—				31,087
Other long-term liabilities		12,279				28,013
Total liabilities		1,312,991				1,490,451
Redeemable noncontrolling interest		377				443
Stockholders’ deficit:
Common stock		17				12
Additional paid-in capital		3,182,753				2,686,759
Accumulated other comprehensive income (loss)		(9		)		19
Accumulated deficit		(3,103,937		)		(2,946,384		)
Total stockholders’ equity (deficit)		78,824				(259,594		)
Noncontrolling interest		62,195				91,291
Total liabilities, redeemable noncontrolling interest, stockholders' deficit and noncontrolling interest		$	1,454,387			$	1,322,591

Condensed Consolidated Statements of Operations (preliminary & unaudited)
(in thousands, except per share data)
		Three Months Ended December 31,								Years Ended December 31,
			2020				2019			2020				2019
Revenue:
Product		$	171,801			$	158,427			$	518,633			$	557,336
Installation			28,827				14,429			101,887				60,826
Service			32,137				25,628			109,633				95,786
Electricity			16,622				15,059			64,094				71,229
Total revenue			249,387				213,543			794,247				785,177
Cost of revenue:
Product			105,071				141,782			332,724				435,479
Installation			29,604				16,901			116,542				76,487
Service			39,493				17,127			132,329				100,238
Electricity			11,593				12,785			46,859				75,386
Total cost of revenue			185,761				188,595			628,454				687,590
Gross profit			63,626				24,948			165,793				97,587
Operating expenses:
Research and development			21,690				22,148			83,577				104,168
Sales and marketing			18,840				17,357			55,916				73,573
General and administrative			27,614				33,315			107,085				152,650
Total operating expenses			68,144				72,820			246,578				330,391
Loss from operations			(4,518	)			(47,872	)		(80,785		)		(232,804		)
Interest income			70				862			1,475				5,661
Interest expense			(21,246	)			(21,635	)		(76,276		)		(87,480		)
Interest expense to related parties			—				(1,933	)		(2,513		)		(6,756		)
Other income (expense), net			(4,176	)			138			(8,318		)		706
Loss on extinguishment of debt			—				—			(12,878		)		—
Gain (loss) on revaluation of embedded derivatives			(1,737	)			(540	)		464				(2,160		)
Loss before income taxes			(31,607	)			(70,980	)		(178,831		)		(322,833		)
Income tax provision			(16	)			31			256				633
Net loss			(31,591	)			(71,011	)		(179,087		)		(323,466		)
Less: Net loss attributable to noncontrolling interests and redeemable noncontrolling interests			(4,453	)			(5,178	)		(21,534		)		(19,052		)
Net loss attributable to Class A and Class B common stockholders			(27,138	)			(65,833	)		(157,553		)		(304,414		)
Less: deemed dividend to noncontrolling interest			—				(2,454	)		—				(2,454		)
Net loss available to Class A and Class B common stockholders		$	(27,138	)		$	(68,287	)		$	(157,553	)		$	(306,868	)
Net loss per share available to Class A and Class B common stockholders, basic and diluted		$	(0.16	)		$	(0.58	)		$	(1.14	)		$	(2.67	)
Weighted average shares used to compute net loss per share attributable to Class A and Class B common stockholders, basic and diluted			165,975				118,588			138,722				115,118

Condensed Consolidated Statement of Cash Flows (preliminary & unaudited)
(in thousands)
		Years Ended December 31,
		2020				2019
Cash flows from operating activities:
Net loss		$	(179,087	)		$	(323,466	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		52,279				78,584
Non cash lease expense		5,328				—
Write-off of property, plant and equipment, net		38				3,117
Impairment of equity method investment		4,236

FAQ

What were Bloom Energy's Q4 2020 financial results?

Bloom Energy reported Q4 2020 revenue of $249.4 million, a 16.8% increase YoY, with a gross margin of 25.5%.

What is Bloom Energy's revenue guidance for 2021?

Bloom Energy expects revenue for 2021 to be between $950 million and $1 billion.

How did Bloom Energy's EPS perform in Q4 2020?

Bloom Energy reported a GAAP EPS of ($0.16) in Q4 2020, an improvement from ($0.58) in Q4 2019.

What were the key financial metrics for Bloom Energy in FY 2020?

For FY 2020, Bloom Energy achieved revenue of $794.2 million, with a gross margin of 20.9%.

What drove the increase in Bloom Energy's gross margin?

The increase in gross margin was primarily driven by product cost reductions and improved product margins.