Fluence Energy, Inc. (Nasdaq: FLNC) (“Fluence” or the “Company”), a leading global pure-play provider of energy storage products and services as well as digital applications for renewables and storage, today announced its results for the three months ended June 30, 2022.
Strategic and Operational Highlights
Third Fiscal Quarter Ended June 30, 2022
- Slightly slower contracting in the third fiscal quarter following two outstanding quarters:
- Entered into 311 MW of energy storage product contracts during the quarter;
- Entered into 81 MW of energy service contracts during the quarter; and
- Entered into 804 MW of Fluence IQ digital contracts during the quarter.
- First nine months of fiscal year 2022 energy storage product order intake of 1,493 MW already surpasses all of prior fiscal year order intake of 1,311 MW; and
- Launched Fluence Academy's online training program to advance industry knowledge of energy storage operations.
Recent Developments
- Opened India technology center underscoring commitment to the region and execution of global product strategy; and
- Entered into a binding agreement to form a partnership with ReNew Power in India, expected to commence operation in October.
Financial Results
- Third fiscal quarter financial results:
- Revenue of $239 million, down 14% year over year, in line with expectations given the recent COVID-19 related lockdowns in China.
- Gross profit margin was approximately negative 2% an improvement of three percentage points from approximately negative 5% for the same quarter last year, in line with expectations.
- Net loss of $61 million, compared to net loss of $39 million for the same quarter last year, in line with expectations.
- Adjusted EBITDA1 for the third fiscal quarter was negative $48 million, compared to negative $35 million for the same quarter last year.
- Total cash and cash equivalents was approximately $762 million as of June 30, 2022, an increase of approximately $39 million from March 31, 2022, stronger than expected.
- Total backlog2 of $2.1 billion as of June 30, 2022, comprised of approximately $1.8 billion from energy storage products, and approximately $0.3 billion from recurring revenues businesses (energy storage services and Fluence IQ). This compares to our March 31, 2022 total backlog of $2.2 billion.
Executive Summary
Commenting on the quarter, Manuel Perez Dubuc, the Company’s Chief Executive Officer, said “We continue to make progress on mitigating the headwinds impacting our margins. Thanks to the team's dedication in establishing relationships with multiple shipping and logistics companies in December of last year, we are now starting to see the benefits of these relationships with our shipping partners offering better terms and greater optionality. Additionally, we are making strides in diversifying our suppliers. However, we continue to see a tight battery and inverter market in 2023. We remain focused on reducing our project cost overruns as we install and commission our products and expect these headwinds to ease as we progress through the coming quarters.
I’m pleased to report that thanks to our strong order intake during the third quarter, in the first nine months of fiscal year 2022 we have already surpassed our order intake for all of fiscal year 2021. This achievement reflects the robust demand for our energy storage products, services, and digital applications as the world transitions towards renewable energy.
Additionally, we are encouraged by the progress we're seeing in U.S. policies with the proposed Inflation Reduction Act of 2022. There are several elements of this proposed legislation that would provide significant upside for Fluence, namely the 30% investment tax credit for standalone energy storage. We believe that would provide our business with tremendous opportunities in the U.S. as additional projects are brought forward. While our financial plan has never relied on any subsidies, we are pleased to see the U.S. government take serious steps towards decarbonizing our world.
As we look to close out this fiscal year, we underscore the progress we have made and adversity we have overcome to deliver our customers best in class storage solutions. While we remain under force majeure with many of our battery suppliers, we are encouraged by the increasing volumes we are seeing as our battery suppliers begin to recover from the recent COVID-19 related lockdowns in China. We will continue to explore ways to diversify our battery supply as we engage with players throughout the value chain and we remain committed to reducing our project costs. We are excited about our future and look forward to show further progress on our margins in the fourth quarter.”
Commenting on the Company’s financial results, Dennis Fehr, the Company’s Chief Financial Officer, said “During the third fiscal quarter, we continued to make progress on improving our gross profit while bolstering our liquidity. I am pleased to report our cash position increased over the quarter and sits at more than $760 million as of the end of the third quarter, providing us with the liquidity and stability necessary for the expected working capital build in our fourth quarter and until we reach cash and bottom-line break even in fiscal year 2024. We are focused on maintaining our positive momentum into the fourth quarter and are encouraged by the incremental benefits we see from the Inflation Reduction Act.”
