Fluence Energy, Inc. Reports Strong Financial Performance Highlighted By Cash Generation; Reaffirms Fiscal Year 2024 Guidance Ranges
Fluence Energy, Inc. reported strong financial performance for the second fiscal quarter, with revenue of $623.1 million, a 10.3% gross profit margin, and a net loss of $12.9 million. The company's backlog stands at $3.7 billion, with total cash of $541.5 million. Fluence is reaffirming its fiscal year 2024 guidance, with expected revenue of $2.7-3.3 billion and adjusted EBITDA of $50-80 million.
Improved gross profit margin to 10.3% and adjusted gross profit margin to 10.6%.
Record net cash provided by operating activities of $90.2 million in fiscal year 2024.
Free cash flow of $87.8 million in the first half of fiscal year 2024.
Total cash increased to $541.5 million, up by $79 million from the previous period.
Revenue of $623.1 million in the second fiscal quarter.
Net loss of $12.9 million in the second fiscal quarter.
Decrease in revenue by approximately 11% compared to the same quarter last year.
Adjusted EBITDA of approximately negative $6.1 million in the second fiscal quarter.
Insights
ARLINGTON, Va., May 08, 2024 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. (Nasdaq: FLNC) (“Fluence” or the “Company”), a leading global provider of energy storage products and services as well as digital applications for renewables and storage, today announced its results for the three and six months ended March 31, 2024.
Financial Highlights for Second Fiscal Quarter ended March 31, 2024
- Revenue of approximately
$623.1 million , which represents a decrease of approximately11% from the same quarter last year, primarily driven by timing of product deliveries. - GAAP gross profit margin improved to approximately
10.3% , compared to approximately4.4% for the same quarter last year. - Adjusted gross profit margin1 improved to approximately
10.6% , compared to approximately4.6% for the same quarter last year. - Net loss of approximately
$12.9 million , improved from net loss of approximately$37.4 million for the same quarter last year. - Adjusted EBITDA1 of approximately negative
$6.1 million , improved from approximately negative$27.7 million for the same quarter last year. - Backlog2 of approximately
$3.7 billion as of March 31, 2024, compared to approximately$3.7 billion as of December 31, 2023. - Total Cash3 of approximately
$541.5 million , representing an increase of approximately$79 million from September 30, 2023. - Net cash provided by operating activities was approximately
$90.2 million in the first half of the fiscal year 2024, compared to approximately negative$163.4 million in the same period last year. - Free cash flow1 was approximately
$87.8 million in the first half of fiscal year 2024, compared to approximately negative$164.5 million in the same period last year.
Executive Summary
"I am pleased to report that in the second quarter, Fluence delivered more than
"We made significant progress this quarter in offering products that provide greater value to our customers and we are seeing growing interest in these. Specifically, we recently launched our new Gridstack Pro 5000 product, our larger, and more energy-dense 5 MWh enclosure. Furthermore, discussions with potential customers for our domestic content offering are progressing and to that end, we recently signed our first contract."
Mr. Nebreda continued, "I am pleased to report that we are making substantial progress on each of our strategic objectives detailed below."
Strategic Objectives
- Deliver Profitable Growth
- The Company generated approximately
$64.2 million of Gross Profit and approximately$65.9 million of Adjusted Gross Profit4 in the current quarter, representing108% and105% year-over-year increase, respectively. Furthermore, this quarter was the third consecutive quarter that the Company generated double-digit gross profit and adjusted gross profit margins. - For the first half of fiscal year 2024, we achieved record net cash provided by operating activities of approximately
$90.2 million , compared to approximately negative$163.4 million in the same period last year, and record free cash flow4 of approximately$87.8 million compared to approximately negative$164.5 million in the same period last year. - Total Cash5 as of March 31, 2024 of
$541.5 million increased by approximately$65 million from December 31, 2023, making this the fourth consecutive quarter in which Total Cash has increased.
- The Company generated approximately
- Develop Products and Solutions That Our Customers Need
- During the quarter, we began offering Gridstack Pro 5000, our larger and more dense 5 MWh, 20 foot enclosure, thus allowing for energy dense solutions at project sites, optimizing land usage, improving overall efficiency, and lowering cost.
- Signed our first domestic content contract that will benefit from incremental incentives under the Inflation Reduction Act of 2022 (the "IRA").
- Convert Our Supply Chain into a Competitive Advantage
- Currently on track for start of U.S. battery module production in 2024, which is expected to enable our products to meet the criteria for domestic content incentives under the IRA. Fluence is one of the first suppliers capable of providing these products and we continue to see tremendous interest from customers for U.S. domestic content.
- Use Fluence Digital as a Competitive Differentiator and Margin Driver
- Digital backlog increased approximately
75% when compared to the same quarter last year.
- Digital backlog increased approximately
- Work Better
- In April 2024, Fluence released its second annual sustainability report, building upon the sustainability disclosures from our inaugural report published in April 2023 and providing updates on Fluence’s sustainability strategy.
Fiscal Year 2024 Guidance
The Company is reaffirming its fiscal year 2024 total revenue and Adjusted EBITDA6 guidance ranges of
"We remain committed to delivering attractive revenue growth, while improving margins and operating cash flow. We are also laser focused on improving our cost structure. This commitment is reflected in our strong financial results for the first half of this year, including approximately
The foregoing Fiscal Year 2024 Guidance statement represents management's current best estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.
Share Count
The shares of the Company’s common stock as of March 31, 2024 are presented below:
| Common Shares | |
| Class B-1 common stock held by AES Grid Stability, LLC | 51,499,195 |
| Class A common stock held by Siemens AG | 39,738,064 |
| Class A common stock held by SPT Invest Management, Sarl | 11,761,131 |
| Class A common stock held by Qatar Holding LLC | 14,668,275 |
| Class A common stock held by public | 61,220,068 |
| Total Class A and Class B-1 common stock outstanding | 178,886,733 |
Conference Call Information
The Company will conduct a teleconference starting at 8:30 a.m. EDT on Thursday, May 9th, 2024, to discuss the second fiscal quarter results. To participate, analysts are required to register by clicking Fluence Energy Q2 Earnings Call Registration Link. Once registered, analysts will be issued a unique PIN number and dial-in number. Analysts are encouraged to register at least 15 minutes before the scheduled start time.
General audience participants, and non-analysts are encouraged to join the teleconference in a listen-only mode at: Fluence Energy Listen - Only Webcast, or on www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations. Supplemental materials that may be referenced during the teleconference will be available at: www.fluenceenergy.com, by selecting Investors, News & Events, and Events & Presentations.
A replay of the conference call will be available after 1:00 p.m. EDT on Thursday, May 9th, 2024. The replay will be available on the Company’s website at www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations.
Non-GAAP Financial Measures
We present our operating results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We believe certain financial measures, such as Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin, and Free Cash Flow, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with GAAP. These measures have limitations as analytical tools, including that other companies, including companies in our industry, may calculate these measures differently, reducing their usefulness as comparative measures.
Adjusted EBITDA is calculated from the consolidated statements of operations using net income (loss) adjusted for (i) interest income, net, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, (v) certain other income or expenses and (vi) non-recurring income or expenses. Adjusted EBITDA may in the future also be adjusted for amounts impacting net income related to the Tax Receivable Agreement liability.
Adjusted Gross Profit is calculated using gross profit, adjusted to exclude (i) stock-based compensation expenses, (ii) amortization (iii) certain other income or expenses and (iv) non-recurring income or expenses. Adjusted Gross Profit Margin is calculated using Adjusted Gross Profit divided by total revenue.
Free Cash Flow is calculated from the consolidated statements of cash flows and is defined as net cash provided by (used in) operating activities, less purchase of property and equipment made in the period. We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth. Limitations on the use of Free Cash Flow include (i) it should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures (for example, cash is still required to satisfy other working capital needs, including short-term investment policy, restricted cash, and intangible assets); (ii) Free Cash Flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by (used in) operating activities; and (iii) this metric does not reflect our future contractual commitments.
Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures included in tables contained at the end of this release.
The Company is not able to provide a quantitative reconciliation of Adjusted EBITDA guidance for fiscal year 2024 to the nearest respective GAAP measure within this press release because of the uncertainty around certain items that may impact Adjusted EBITDA, including, but not limited to, stock compensation expenses, which are not within our control or cannot be reasonably predicted without unreasonable effort.
About Fluence
Fluence Energy, Inc. (Nasdaq: FLNC) is a global market leader in energy storage products and services, and optimization software for renewables and storage. With a presence in 47 markets globally, Fluence provides an ecosystem of offerings to drive the clean energy transition, including modular, scalable energy storage products, comprehensive service offerings, and AI-enabled optimization software for managing and optimizing renewables and storage from any provider. The Company is transforming the way we power our world by helping customers create more resilient and sustainable electric grids.
For more information, visit our website, or follow us on LinkedIn or X (formerly Twitter). To stay up to date on the latest industry insights, sign up for Fluence's Full Potential Blog.
Cautionary Note Regarding Forward-Looking Statements
The statements contained in this press release and statements that are made on our earnings call that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements set forth above under “Fiscal Year 2024 Guidance,” "Strategic Objectives", and other statements regarding the Company's future financial and operational performance, including, but not limited to, expectations relating to Adjusted EBITDA, gross profit margin, adjusted gross profit margin, operating margins, and operating expenses, excluding stock compensation expenses for future fiscal quarters and full fiscal year 2024, growth, including anticipated revenue growth through fiscal year 2025, liquidity and access to capital, and cash flows, expectations relating to backlog, pipeline, and contracted backlog, the implementation and anticipated benefits of the Company's enumerated strategic objectives, anticipated demand for the Company's energy storage solutions, services and digital applications, including domestic content products, expected impact and benefits from the IRA on the Company and its customers, anticipated timeline of U.S. battery module production, new products and product innovation, including Gridstack Pro 5000 product and its anticipated operational performance, relationships with new and existing customers and suppliers, market and industry outlook and related opportunities for the Company, future results of operations, future revenue recognition and estimated revenues, future capital expenditures and debt service obligations, and projected costs, prospects, beliefs, assumptions, plans, and objectives of management for future operations. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this press release, words such as “may,” “possible,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions and variations thereof and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments, as well as a number of assumptions concerning future events, and their potential effects on our business. These forward-looking statements are not guarantees of performance, and there can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, our limited operating and revenue history as an independent entity and the nascent clean energy industry; our history of net losses, we anticipate increasing expenses in the future, and our ability to maintain prolonged profitability; delays, disruptions, and quality control problems in our manufacturing operations; difficulties in establishing mass manufacturing capacity and estimating potential cost savings and efficiencies from anticipated improvements to our manufacturing capabilities; dependence on our existing suppliers and supply chain competition; supplier concentration and capacity; interruption of flow and/or availability of components and materials from international vendors; significant changes in the cost of raw materials and product components; vendor non-compliance with ethical business practices and applicable laws and regulations; loss of significant customers or their inability to perform under their contracts; competition for our offerings and our ability to attract and retain customers; ability to effectively manage our recent and future growth and expansion of our business and operations; ability to maintain and enhance our reputation and brand recognition; success of our relationships with third parties; ability to attract and retain highly qualified personnel; risk related to the construction, utility interconnection, commissioning and installation of our energy storage products, cost overruns, and delays; risks related to defects, errors, vulnerabilities and/or bugs in our products and technology; compromises, interruptions, or shutdowns of our systems; lengthy sales and installation cycle for our products and services and ability to timely close sales; amounts included in our pipeline and contracted backlog may not result in actual revenue or translate into profits; events and incidents relating to storage, delivery, installation, operation, maintenance and shutdowns of our products; risks relating to whether renewable energy technologies are suitable for widespread adoption or if sufficient demand for our hardware and software-enabled services does not develop or takes longer to develop than we anticipate; estimates on size of our total addressable market; barriers arising from electric utility industry policies and regulations; cost of electricity available from alternative sources; risk relating to interest rates or a reduction in the availability of tax equity or project debt capital in the global financial markets and corresponding effects on customers’ ability to finance energy storage systems and demand for our products; potential changes in tax laws or regulations, including relating to incentives under the IRA; reduction, elimination, or expiration of government incentives or regulations regarding renewable energy; decline in public acceptance of renewable energy, or delay, prevent, or increase in the cost of customer projects; restrictions set forth in our ABL Credit Agreement or other debt agreements we may enter into; uncertain future capital needs and potential need to raise additional funds in the future; ability to obtain, maintain and enforce proper protection for our intellectual property, including our technology; risks related to us being a “controlled company” within the meaning of the NASDAQ rules; our relationship with our founders; and other factors set forth under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”) on November 29, 2023, as updated by our Quarterly Reports on Form 10-Q, and in other filings we make with the SEC from time to time. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements made in this press release. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.
| FLUENCE ENERGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars in Thousands, except share and per share amounts) | |||||||
| Unaudited | |||||||
| March 31, 2024 | September 30, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 411,798 | $ | 345,896 | |||
| Restricted cash | 106,605 | 106,835 | |||||
| Trade receivables, net | 86,798 | 103,397 | |||||
| Unbilled receivables | 132,955 | 192,064 | |||||
| Receivables from related parties | 63,639 | 58,514 | |||||
| Advances to suppliers | 110,759 | 107,947 | |||||
| Inventory, net | 309,059 | 224,903 | |||||
| Current portion of notes receivable - pledged as collateral | 55,251 | 24,330 | |||||
| Other current assets | 45,867 | 31,074 | |||||
| Total current assets | 1,322,731 | 1,194,960 | |||||
| Non-current assets: | |||||||
| Property and equipment, net | $ | 13,512 | $ | 12,771 | |||
| Intangible assets, net | 57,172 | 55,752 | |||||
| Goodwill | 26,266 | 26,020 | |||||
| Deferred income tax asset | 85 | 86 | |||||
| Note receivable - pledged as collateral | — | 30,921 | |||||
| Other non-current assets | 110,077 | 31,639 | |||||
| Total non-current assets | 207,112 | 157,189 | |||||
| Total assets | $ | 1,529,843 | $ | 1,352,149 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 244,191 | $ | 62,899 | |||
| Deferred revenue | 398,639 | 273,164 | |||||
| Deferred revenue and payables with related parties | 59,046 | 116,488 | |||||
| Current portion of borrowings against note receivable - pledged as collateral | 52,667 | 22,539 | |||||
| Personnel related liabilities | 25,784 | 52,174 | |||||
| Accruals and provisions | 159,613 | 172,223 | |||||
| Taxes payable | 22,023 | 29,465 | |||||
| Other current liabilities | 11,150 | 16,711 | |||||
| Total current liabilities | 973,113 | 745,663 | |||||
| Non-current liabilities: | |||||||
| Deferred income tax liability | $ | 5,159 | $ | 4,794 | |||
| Borrowings against note receivable - pledged as collateral | — | 28,024 | |||||
| Other non-current liabilities | 19,835 | 17,338 | |||||
| Total non-current liabilities | 24,994 | 50,156 | |||||
| Total liabilities | 998,107 | 795,819 | |||||
| Stockholders’ Equity: | |||||||
| Preferred stock, | — | — | |||||
| Class A common stock, | 1 | 1 | |||||
| Class B-1 common stock, | — | — | |||||
| Class B-2 common stock, | — | — | |||||
| Treasury stock, at cost | (7,885 | ) | (7,797 | ) | |||
| Additional paid-in capital | 617,793 | 581,104 | |||||
| Accumulated other comprehensive income | 3,241 | 3,202 | |||||
| Accumulated deficit | (200,076 | ) | (174,164 | ) | |||
| Total stockholders’ equity attributable to Fluence Energy, Inc. | 413,074 | 402,346 | |||||
| Non-Controlling interests | 118,662 | 153,984 | |||||
| Total stockholders’ equity | 531,736 | 556,330 | |||||
| Total liabilities and stockholders’ equity | $ | 1,529,843 | $ | 1,352,149 | |||
| FLUENCE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) (U.S. Dollars in Thousands, except share and per share amounts) | ||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Revenue | $ | 280,652 | $ | 405,110 | $ | 528,034 | $ | 614,564 | ||||||
| Revenue from related parties | 342,489 | 293,076 | 459,063 | 394,082 | ||||||||||
| Total revenue | 623,141 | 698,186 | 987,097 | 1,008,646 | ||||||||||
| Cost of goods and services | 558,961 | 667,373 | 886,531 | 965,793 | ||||||||||
| Gross profit | 64,180 | 30,813 | 100,566 | 42,853 | ||||||||||
| Operating expenses: | ||||||||||||||
| Research and development | 17,427 | 22,551 | 32,867 | 41,713 | ||||||||||
| Sales and marketing | 15,792 | 10,401 | 26,498 | 19,193 | ||||||||||
| General and administrative | 44,067 | 31,778 | 81,795 | 63,045 | ||||||||||
| Depreciation and amortization | 2,482 | 2,669 | 4,965 | 5,093 | ||||||||||
| Interest income, net | (1,261 | ) | (2,075 | ) | (3,254 | ) | (2,731 | ) | ||||||
| Other expense (income), net | 215 | 3,012 | (972 | ) | (8,130 | ) | ||||||||
| Loss before income taxes | (14,542 | ) | (37,523 | ) | (41,333 | ) | (75,330 | ) | ||||||
| Income tax benefit | (1,666 | ) | (126 | ) | (2,901 | ) | (740 | ) | ||||||
| Net loss | $ | (12,876 | ) | $ | (37,397 | ) | $ | (38,432 | ) | $ | (74,590 | ) | ||
| Net loss attributable to non-controlling interest | $ | (3,707 | ) | $ | (12,542 | ) | $ | (12,520 | ) | $ | (25,093 | ) | ||
| Net loss attributable to Fluence Energy, Inc. | $ | (9,169 | ) | $ | (24,855 | ) | $ | (25,912 | ) | $ | (49,497 | ) | ||
| Weighted average number of Class A common shares outstanding | ||||||||||||||
| Basic and diluted | 126,843,301 | 116,266,838 | 123,962,636 | 115,825,339 | ||||||||||
| Loss per share of Class A common stock | ||||||||||||||
| Basic and diluted | $ | (0.07 | ) | $ | (0.21 | ) | $ | (0.21 | ) | $ | (0.43 | ) | ||
| Foreign currency translation (loss) gain, net of income tax expense (benefit) of | (1,603 | ) | (1,469 | ) | 32 | (5,054 | ) | |||||||
| Total other comprehensive (loss) income | $ | (1,603 | ) | $ | (1,469 | ) | $ | 32 | $ | (5,054 | ) | |||
| Total comprehensive loss | $ | (14,479 | ) | $ | (38,866 | ) | $ | (38,400 | ) | $ | (79,644 | ) | ||
| Comprehensive loss attributable to non-controlling interest | $ | (4,170 | ) | $ | (13,036 | ) | $ | (12,527 | ) | $ | (26,798 | ) | ||
| Total comprehensive loss attributable to Fluence Energy, Inc. | $ | (10,309 | ) | $ | (25,830 | ) | $ | (25,873 | ) | $ | (52,846 | ) | ||
| FLUENCE ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. Dollars in Thousands) | |||||||
| Six Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| Operating activities | |||||||
| Net loss | $ | (38,432 | ) | $ | (74,590 | ) | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 5,971 | 5,093 | |||||
| Amortization of debt issuance costs | 1,037 | 457 | |||||
| Inventory provision (benefit) | 13,970 | (422 | ) | ||||
| Stock-based compensation expense | 12,266 | 15,763 | |||||
| Deferred income taxes | 295 | (1,276 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Trade receivables, net | 9,753 | (244,433 | ) | ||||
| Unbilled receivables | 59,869 | (8,756 | ) | ||||
| Receivables from related parties | 1,941 | 23,683 | |||||
| Advances to suppliers | (36,504 | ) | (3,793 | ) | |||
| Inventory | (96,382 | ) | (103,464 | ) | |||
| Other current assets | (47,890 | ) | 3,148 | ||||
| Other non-current assets | 14,337 | (292 | ) | ||||
| Accounts payable | 181,142 | 93,447 | |||||
| Deferred revenue and payables with related parties | (57,469 | ) | (112,586 | ) | |||
| Deferred revenue | 114,568 | 300,007 | |||||
| Current accruals and provisions | (12,861 | ) | (77,681 | ) | |||
| Taxes payable | (9,646 | ) | 3,702 | ||||
| Other current liabilities | 1,643 | 10,511 | |||||
| Other non-current liabilities | (27,360 | ) | 8,071 | ||||
| Net cash provided by (used in) operating activities | 90,248 | (163,411 | ) | ||||
| Investing activities | |||||||
| Proceeds from maturities of short-term investments | — | 41,603 | |||||
| Payments for purchase of investment in joint venture | — | (5,013 | ) | ||||
| Capital expenditures on software | (5,018 | ) | — | ||||
| Purchase of property and equipment | (2,473 | ) | (1,087 | ) | |||
| Net cash (used in) provided by investing activities | (7,491 | ) | 35,503 | ||||
| Financing activities | |||||||
| Class A common stock withheld related to settlement of employee taxes for stock-based compensation awards | (88 | ) | (288 | ) | |||
| Debt Issuance Costs | (4,299 | ) | — | ||||
| Payments for acquisitions | (3,892 | ) | — | ||||
| Proceeds from exercise of stock options | 1,648 | 2,956 | |||||
| Proceeds from borrowing against note receivable - pledged as collateral | — | 21,142 | |||||
| Net cash (used in) provided by financing activities | (6,631 | ) | 23,810 | ||||
| Effect of exchange rate changes on cash and cash equivalents | 2,625 | (13,042 | ) | ||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 78,751 | (117,140 | ) | ||||
| Cash, cash equivalents, and restricted cash as of the beginning of the period | 462,731 | 429,721 | |||||
| Cash, cash equivalents, and restricted cash as of the end of the period | $ | 541,482 | $ | 312,581 | |||
| Supplemental Cash Flows Information | |||||||
| Interest paid | $ | 1,098 | $ | 511 | |||
| Cash paid for income taxes | $ | 1,309 | $ | 585 | |||
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. Interest income of
FLUENCE ENERGY, INC.
KEY OPERATING METRICS (UNAUDITED)
The following tables present our key operating metrics as of March 31, 2024 and September 30, 2023. The tables below present the metrics in either Gigawatts (GW) or Gigawatt hours (GWh). Our key operating metrics focus on project milestones to measure our performance and designate each project as either “deployed”, “assets under management”, “contracted backlog”, or “pipeline”.
| March 31, 2024 | September 30, 2023 | | Change | Change % | ||||
| Energy Storage Products and Solutions | | | | | ||||
| Deployed (GW) | 4.1 | 3.0 | | 1.1 | | |||
| Deployed (GWh) | 10.3 | 7.2 | 3.1 | |||||
| Contracted Backlog (GW) | 5.3 | 4.6 | | 0.7 | | |||
| Pipeline (GW) | 18.4 | 12.2 | 6.2 | |||||
| Pipeline (GWh) | 56.2 | 34.2 | | 22.0 | |
| (amounts in GW) | March 31, 2024 | September 30, 2023 | | Change | Change % | |||
| Service Contracts | | | | | | |||
| Assets under Management | 3.3 | 2.8 | | 0.5 | | |||
| Contracted Backlog | 3.6 | 2.9 | | 0.7 | | |||
| Pipeline | 20.4 | 13.7 | | 6.7 | |
| (amounts in GW) | March 31, 2024 | September 30, 2023 | | Change | Change % | |||
| Digital Contracts | | | | | | |||
| Assets under Management | 17.2 | 15.5 | | 1.7 | | |||
| Contracted Backlog | 6.9 | 6.8 | | 0.1 | | |||
| Pipeline | 35.6 | 24.4 | | 11.2 | |
The following table presents our order intake for the three and six months ended March 31, 2024 and 2023. The table is presented in Gigawatts (GW):
| (amounts in GW) | Three Months Ended March 31, | | Six Months Ended March 31, | | ||||||||||||
| 2024 | 2023 | | Change | | Change % | | 2024 | 2023 | | Change | | Change % | ||||
| Energy Storage Products and Solutions | | | | | | | | | ||||||||
| Contracted | | 0.9 | 0.6 | 0.3 | | | 2.1 | 1.2 | | 0.9 | | |||||
| Service Contracts | | | | | | | | | | | | | ||||
| Contracted | | 0.5 | 1.0 | | (0.5) | | (50)% | | 1.6 | 1.1 | | 0.5 | | |||
| Digital Contracts | | | | | | | | | | | | | ||||
| Contracted | | 3.1 | 2.7 | | 0.4 | | | 3.5 | 3.5 | | — | | —% | |||
Deployed
Deployed represents cumulative energy storage products and solutions that have achieved substantial completion and are not decommissioned. Deployed is monitored by management to measure our performance towards achieving project milestones.
Assets Under Management
Assets under management for service contracts represents our long-term service contracts with customers associated with our completed energy storage system products and solutions. We start providing maintenance, monitoring, or other operational services after the storage product projects are completed. In some cases, services may be commenced for energy storage solutions prior to achievement of substantial completion. This is not limited to energy storage solutions delivered by Fluence. Assets under management for digital software represents contracts signed and active (post go live). Assets under management serves as an indicator of expected revenue from our customers and assists management in forecasting our expected financial performance.
Contracted Backlog
For our energy storage products and solutions contracts, contracted backlog includes signed customer orders or contracts under execution prior to when substantial completion is achieved. For service contracts, contracted backlog includes signed service agreements associated with our storage product projects that have not been completed and the associated service has not started. For digital applications contracts, contracted backlog includes signed agreements where the associated subscription has not started.
We cannot guarantee that our contracted backlog will result in actual revenue in the originally anticipated period or at all. Contracted backlog may not generate margins equal to our historical operating results. We have only recently begun to track our contracted backlog on a consistent basis as performance measures, and as a result, we do not have significant experience in determining the level of realization that we will achieve on these contracts. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our contracted backlog fails to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.
Contracted/Order Intake
Contracted, which we use interchangeably with “Order Intake”, represents new energy storage product and solutions contracts, new service contracts and new digital contracts signed during each period presented. We define “Contracted” as a firm and binding purchase order, letter of award, change order or other signed contract (in each case an “Order”) from the customer that is received and accepted by Fluence. Our order intake is intended to convey the dollar amount and gigawatts (operating measure) contracted in the period presented. We believe that order intake provides useful information to investors and management because the order intake provides visibility into future revenue and enables evaluation of the effectiveness of the Company’s sales activity and the attractiveness of its offerings in the market.
Pipeline
Pipeline represents our uncontracted, potential revenue from energy storage products and solutions, service, and digital software contracts, which have a reasonable likelihood of contract execution within 24 months. Pipeline is an internal management metric that we construct from market information reported by our global sales force. Pipeline is monitored by management to understand the anticipated growth of our Company and our estimated future revenue related to customer contracts for our battery-based energy storage products and solutions, services and digital software.
We cannot guarantee that our pipeline will result in actual revenue in the originally anticipated period or at all. Pipeline may not generate margins equal to our historical operating results. We have only recently begun to track our pipeline on a consistent basis as performance measures, and as a result, we do not have significant experience in determining the level of realization that we will achieve on these contracts. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our pipeline fail to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.
Annual Recurring Revenue
ARR represents the net annualized contracted value including software subscriptions including initial trial, licensing, long term service agreements, and extended warranty agreements as of the reporting period. ARR excludes one-time fees, revenue share or other revenue that is non-recurring and variable. The Company believes ARR is an important operating metric as it provides visibility to future revenue. It is important to management to increase this visibility as we continue to expand. ARR is not a forecast of future revenue and should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to replace these items.
FLUENCE ENERGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED)
The following tables present non-GAAP measures for the periods indicated.
| ($ in thousands) | Three Months Ended March 31, | | Change | | Change % | Six Months Ended March 31, | | Change | | Change % | |||||||||||||||||||
| 2024 | | 2023 | | 2024 | | 2023 | | ||||||||||||||||||||||
| Net loss | $ | (12,876 | ) | $ | (37,397 | ) | | $ | 24,521 | | 66 | % | $ | (38,432 | ) | $ | (74,590 | ) | $ | 36,158 | 48 | % | |||||||
| Add: | |||||||||||||||||||||||||||||
| Interest income, net(a) | (1,261 | ) | | (2,075 | ) | | 814 | | (39)% | (3,254 | ) | (2,731 | ) | (523 | ) | 19 | % | ||||||||||||
| Income tax benefit | (1,666 | ) | | (126 | ) | | (1,540 | ) | | 1222 | % | (2,901 | ) | (740 | ) | (2,161 | ) | 292 | % | ||||||||||
| Depreciation and amortization | 3,088 | | 2,669 | | 419 | | 16 | % | 5,971 | 5,093 | 878 | 17 | % | ||||||||||||||||
| Stock-based compensation(b) | 6,636 | 7,263 | (627 | ) | | (9)% | 12,266 | 15,763 | (3,497 | ) | (22)% | ||||||||||||||||||
| Other expenses(c) (d) | — | | 1,967 | | (1,967 | ) | | (100)% | 1,984 | 3,474 | (1,490 | ) | (43)% | ||||||||||||||||
| Adjusted EBITDA | $ | (6,079 | ) | $ | (27,699 | ) | $ | 21,620 | | 78 | % | $ | (24,366 | ) | $ | (53,731 | ) | $ | 29,365 | | 55 | % | |||||||
(a) Interest income, net for the three and six months ended March 31, 2023 have been recast to conform with current period presentation as described above after the unaudited condensed consolidated statements of cash flows table.
(b) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.
(c) Amount for the three months ended March 31, 2023 included
Amount for the six months ended March 31, 2024 includes approximately
(d) Costs related to the COVID-19 pandemic, the cargo loss incident, external expenses related to the ongoing remediation of our material weakness, and legal fees related to the 2021 and 2022 overheating events at customer facilities which the Company had historically excluded from Adjusted EBITDA, are no longer excluded. Adjusted EBITDA results for the three and six months ended March 31, 2023 have been recast for comparative purposes.
| ($ in thousands) | Three Months Ended March 31, | | Change | | Change % | Six Months Ended March 31, | | Change | | Change % | ||||||||||||||||||||
| 2024 | | 2023 | | 2024 | | 2023 | | |||||||||||||||||||||||
| Total revenue | $ | 623,141 | | $ | 698,186 | | $ | (75,045 | ) | | (11)% | $ | 987,097 | $ | 1,008,646 | $ | (21,549 | ) | (2)% | |||||||||||
| Cost of goods and services | | 558,961 | | 667,373 | | (108,412 | ) | | (16)% | 886,531 | 965,793 | (79,262 | ) | (8)% | ||||||||||||||||
| Gross profit | | 64,180 | | 30,813 | | 33,367 | | 108 | % | | 100,566 | | 42,853 | 57,713 | | 135 | % | |||||||||||||
| Add: | | | | | | |||||||||||||||||||||||||
| Stock-based compensation (a) | 1,121 | 1,256 | (135 | ) | | (11)% | 2,380 | 2,156 | 224 | 10 | % | |||||||||||||||||||
| Amortization (b) | 606 | — | 606 | 100 | % | 1,006 | — | 1,006 | 100 | % | ||||||||||||||||||||
| Other expenses(c) (d) | | — | | 139 | | (139 | ) | | (100)% | — | 328 | (328 | ) | (100)% | ||||||||||||||||
| Adjusted Gross Profit | $ | 65,907 | | $ | 32,208 | | $ | 33,699 | | 105 | % | | $ | 103,952 | | $ | 45,337 | | $ | 58,615 | | 129 | % | |||||||
| Adjusted Gross Profit Margin % | | 10.6 | % | | 4.6 | % | | | | | | 10.5 | % | | 4.5 | % | | | | | ||||||||||
(a) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.
(b) Amount relates to amortization of capitalized software included in cost of goods and services.
(c) Amount for the three months ended March 31, 2023 included
Amount for the six months ended March 31, 2023 included
(d) Costs related to the COVID-19 pandemic, the cargo loss incident, and legal fees related to the 2021 and 2022 overheating events at customer facilities, which the Company had historically excluded from Adjusted Gross Profit and Adjusted Gross Profit Margin, are no longer excluded. Adjusted Gross Profit and Adjusted Gross Profit Margin results for the three and six months ended March 31, 2023 have been recast for comparative purposes.
| ($ in thousands) | Six Months Ended March 31, | | Change | | Change % | ||||||||||
| 2024 | 2023 | | |||||||||||||
| Net cash provided by (used in) operating activities | $ | 90,248 | $ | (163,411 | ) | | $ | 253,659 | | 155 | % | ||||
| Less: Purchase of property and equipment | (2,473 | ) | | (1,087 | ) | | (1,386 | ) | | (128)% | |||||
| Free Cash Flow | $ | 87,775 | | $ | (164,498 | ) | | $ | 252,273 | | 153 | % | |||
________________________
1 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as a reconciliation to the most directly comparable financial measure stated in accordance with GAAP.
2 Backlog represents the unrecognized revenue value of our contractual commitments, which include deferred revenue and amounts that will be billed and recognized as revenue in future periods. The Company’s backlog may vary significantly each reporting period based on the timing of major new contractual commitments and the backlog may fluctuate with currency movements. In addition, under certain circumstances, the Company’s customers have the right to terminate contracts or defer the timing of its services and their payments to the Company.
3 Total Cash includes Cash and cash equivalents + Restricted Cash.
4 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as a reconciliation to the most directly comparable financial measure stated in accordance with GAAP.
5 Total Cash includes Cash and cash equivalents + Restricted Cash.
6Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures and a discussion of why we are unable to reconcile Adjusted EBITDA guidance to its most directly comparable GAAP financial measure.
7 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as a reconciliation to the most directly comparable financial measure stated in accordance with GAAP.
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