UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☑þ			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the ~~quarter~~quarterly period ended September 30, ~~2022~~2023
or
☐¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________to ____________

Commission File ~~Number~~Number: 001-38598

BLOOM ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

________________________________________________________________________


Delaware			77-0565408
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

4353 North First Street, San Jose, California			95134
(Address of principal executive offices)			(Zip Code)

(408) 543-1500
(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class~~(1)~~	Trading ~~Symbol~~Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	BE	New York Stock Exchange
~~(1)~~ ~~Our Class B Common Stock is not registered but is convertible into shares of Class A Common Stock at the election of the holder.~~

________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐¨ Emerging growth company ☐¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐¨ No þ

~~The number~~As of November 1, 2023, there were 224,048,769 shares of the registrant’s ~~common stock outstanding as of November 1, 2022 was as follows:~~

Class A Common Stock, $0.0001 par value, ~~179,378,926 shares~~

~~Class B Common Stock, $0.0001 par value, 15,800,568 shares~~outstanding.

Bloom Energy Corporation

Quarterly Report on Form 10-Q for the Three and Nine Months Ended September 30, ~~2022~~2023

Table of Contents


			Page
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations			4
Condensed Consolidated Statements of Comprehensive Loss			5
Condensed Consolidated Statements of Changes in ~~Stockholders'~~Stockholders’ Equity (Deficit)			6
Condensed Consolidated Statements of Cash Flows			8
Notes to Unaudited Condensed Consolidated Financial Statements			9
Item 2 - ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations			3235
Item 3 - Quantitative and Qualitative Disclosures About Market Risk			4952
Item 4 - Controls and Procedures			4952

PART II - OTHER INFORMATION
Item 1 - Legal Proceedings			5053
Item 1A - Risk Factors			5053
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds			5053
Item 3 - Defaults Upon Senior Securities			5053
Item 4 - Mine Safety Disclosures			5053
Item 5 - Other Information			5053
Item 6 - Exhibits			5155

Signatures			5256

Unless the context otherwise requires, the terms ~~“Company”,~~“Company,” “we,” “~~us,~~“us,” “~~our,~~“our,” “Bloom” and “~~Bloom~~“Bloom Energy,” each refer to Bloom Energy Corporation and all of its subsidiaries.


~~Table of Contents~~
~~Index to Financial Statements~~

~~Part~~PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Bloom Energy Corporation

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)


							September 30,		December 31,
		September 30,		December 31,			2023		2022
		2022		2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents1	Cash and cash equivalents1	$	492,120	$	396,035	Cash and cash equivalents1	$	557,384	$	348,498
Restricted cash1	Restricted cash1	42,104		92,540		Restricted cash1	42,614		51,515

Accounts receivable less allowance for doubtful accounts of $119 as of September 30, 2022 and December 31, 20211		71,184		87,789
Contract assets		25,768		25,201
Inventories		254,895		143,370
Deferred cost of revenue		31,812		25,040
Customer financing receivable1		—		5,784
Accounts receivable less allowance for doubtful accounts of $119 as of September 30, 2023 and December 31, 20221, 2						Accounts receivable less allowance for doubtful accounts of $119 as of September 30, 2023 and December 31, 20221, 2	334,495		250,995
Contract assets3						Contract assets3	143,875		46,727
Inventories1						Inventories1	475,649		268,394
Deferred cost of revenue4						Deferred cost of revenue4	62,212		46,191

Prepaid expenses and other current assets1	Prepaid expenses and other current assets1	46,489		30,661		Prepaid expenses and other current assets1	66,243		43,643
Total current assets	Total current assets	964,372		806,420		Total current assets	1,682,472		1,055,963
Property, plant and equipment, net1	Property, plant and equipment, net1	646,768		604,106		Property, plant and equipment, net1	490,535		600,414
Operating lease right-of-use assets		114,053		106,660
Customer financing receivable1		—		39,484
Operating lease right-of-use assets1						Operating lease right-of-use assets1	127,973		126,955
Restricted cash1	Restricted cash1	135,098		126,539		Restricted cash1	37,698		118,353
Deferred cost of revenue	Deferred cost of revenue	3,462		1,289		Deferred cost of revenue	4,286		4,737

Other long-term assets1	Other long-term assets1	38,316		41,073		Other long-term assets1	33,208		40,205
Total assets	Total assets	$	1,902,069	$	1,725,571	Total assets	$	2,376,172	$	1,946,627
Liabilities, redeemable convertible preferred stock, redeemable noncontrolling interest and stockholders’ equity (deficit)
Liabilities and stockholders’ equity						Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable		$	120,444	$	72,967
Accounts payable1						Accounts payable1	$	153,793	$	161,770
Accrued warranty	Accrued warranty	13,344		11,746		Accrued warranty	16,537		17,332
Accrued expenses and other current liabilities1		102,010		114,138
Deferred revenue and customer deposits1		98,841		89,975
Accrued expenses and other current liabilities1, 5						Accrued expenses and other current liabilities1, 5	116,480		144,183
Deferred revenue and customer deposits1, 6						Deferred revenue and customer deposits1, 6	119,157		159,048

Operating lease liabilities		12,671		13,101
Operating lease liabilities1						Operating lease liabilities1	16,666		16,227
Financing obligations	Financing obligations	16,682		14,721		Financing obligations	39,093		17,363
Recourse debt	Recourse debt	12,792		8,348		Recourse debt	—		12,716
Non-recourse debt1	Non-recourse debt1	15,943		17,483		Non-recourse debt1	—		13,307

Total current liabilities	Total current liabilities	392,727		342,479		Total current liabilities	461,726		541,946

Deferred revenue and customer deposits1	Deferred revenue and customer deposits1	68,727		90,310		Deferred revenue and customer deposits1	14,499		56,392
Operating lease liabilities		122,412		106,187
Operating lease liabilities1						Operating lease liabilities1	133,602		132,363

Financing obligations	Financing obligations	443,665		461,900		Financing obligations	410,365		442,063
Recourse debt	Recourse debt	274,742		283,483		Recourse debt	840,492		273,076
Non-recourse debt1	Non-recourse debt1	179,955		217,416		Non-recourse debt1	1,483		112,480

Other long-term liabilities	Other long-term liabilities	8,917		16,772		Other long-term liabilities	8,805		9,491
Total liabilities	Total liabilities	1,491,145		1,518,547		Total liabilities	$	1,870,972	$	1,567,811
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)					Commitments and contingencies (Note 13)
Redeemable convertible preferred stock, Series A: 10,000,000 shares authorized and 10,000,000 shares and no shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.		208,551		208,551
Redeemable noncontrolling interest		—		300
Stockholders’ equity (deficit):

Common stock: $0.0001 par value; Class A shares - 600,000,000 shares authorized and 179,165,539 shares and 160,627,544 shares issued and outstanding and Class B shares - 600,000,000 shares authorized and 15,802,146 shares and 15,832,863 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.		19		18
Stockholders’ equity:						Stockholders’ equity:

Common stock: $0.0001 par value; Class A shares - 600,000,000 shares authorized and 223,860,870 shares and 189,864,722 shares issued and outstanding and Class B shares - 600,000,000 shares authorized and 0 shares and 15,799,968 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively						Common stock: $0.0001 par value; Class A shares - 600,000,000 shares authorized and 223,860,870 shares and 189,864,722 shares issued and outstanding and Class B shares - 600,000,000 shares authorized and 0 shares and 15,799,968 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	21		20
Additional paid-in capital	Additional paid-in capital	3,691,715		3,219,081		Additional paid-in capital	4,360,080		3,906,491
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,531)		(350)		Accumulated other comprehensive loss	(2,378)		(1,251)
Accumulated deficit	Accumulated deficit	(3,517,311)		(3,263,075)		Accumulated deficit	(3,871,110)		(3,564,483)
Total equity (deficit) attributable to Class A and Class B common stockholders		172,892		(44,326)
Total equity attributable to common stockholders						Total equity attributable to common stockholders	486,613		340,777
Noncontrolling interest	Noncontrolling interest	29,481		42,499		Noncontrolling interest	18,587		38,039
Total stockholders' equity (deficit)		$	202,373	$	(1,827)
Total liabilities, redeemable convertible preferred stock, redeemable noncontrolling interest and stockholders' equity (deficit)		$	1,902,069	$	1,725,571
Total stockholders’ equity						Total stockholders’ equity	$	505,200	$	378,816
Total liabilities and stockholders’ equity						Total liabilities and stockholders’ equity	$	2,376,172	$	1,946,627

1We have a variable interest ~~entities~~entity related to ~~PPAs,~~PPA V (see Note 10 - Portfolio Financings) and a joint venture in the Republic of Korea (see Note 16 - SK ecoplant Strategic Investment), which represent a portion of the consolidated balances recorded within these financial statement line ~~items in~~items.

In August 2023, we sold the ~~condensedconsolidated balance sheets~~PPA V entity as a result of the PPA V Repowering of Energy Servers (see Note 1110 - - Portfolio F~~inancing~~sFinancings)., as such the consolidated balances recorded within these financial statement line items as of September 30, 2023 exclude PPA V balances.

2 Including amounts from related parties of $247.9 million and $4.3 million as of September 30, 2023 and December 31, 2022, respectively.

3 Including amounts from related parties of $3.4 million as of September 30, 2023. There was no respective related party amounts as of December 31, 2022.

4 Including amounts from related parties of $23.4 million as of September 30, 2023. There was no respective related party amounts as of December 31, 2022.

5 Including amounts from related parties of $5.7 million as of September 30, 2023. There was no respective related party amounts as of December 31, 2022.

6 Including amounts from related parties of $11.1 million as of September 30, 2023. There was no respective related party amounts as of December 31, 2022.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Bloom Energy Corporation

Condensed Consolidated Statements of Operations

(in thousands, except net loss per share data)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021				2023		2022		2023		2022

Revenue:	Revenue:										Revenue:
Product	Product	$	213,243	$	128,550	$	520,415	$	413,347		Product	$	304,976	$	213,243	$	713,427	$	520,415
Installation	Installation	22,682		22,172		48,964		53,710			Installation	21,916		22,682		66,762		48,964
Service	Service	37,347		39,251		111,012		111,375			Service	47,535		37,347		130,496		111,012
Electricity	Electricity	19,002		17,255		56,158		51,273			Electricity	25,841		19,002		65,869		56,158
Total revenue		292,274		207,228		736,549		629,705
Total revenue1											Total revenue1	400,268		292,274		976,554		736,549
Cost of revenue:	Cost of revenue:										Cost of revenue:
Product	Product	158,176		93,704		393,337		289,889			Product	182,832		158,176		457,591		393,337
Installation	Installation	28,333		25,616		57,836		66,756			Installation	25,902		28,333		77,881		57,836
Service	Service	41,792		39,586		124,646		111,269			Service	57,370		41,792		165,877		124,646
Electricity	Electricity	13,029		11,439		83,819		32,913			Electricity	139,378		13,029		169,802		83,819
Total cost of revenue	Total cost of revenue	241,330		170,345		659,638		500,827			Total cost of revenue	405,482		241,330		871,151		659,638
Gross profit		50,944		36,883		76,911		128,878
Gross (loss) profit											Gross (loss) profit	(5,214)		50,944		105,403		76,911
Operating expenses:	Operating expenses:										Operating expenses:
Research and development	Research and development	36,146		27,634		112,286		76,602			Research and development	35,126		36,146		122,309		112,286
Sales and marketing	Sales and marketing	23,275		20,124		65,084		62,803			Sales and marketing	20,002		23,275		73,935		65,084
General and administrative	General and administrative	44,115		33,014		119,965		90,470			General and administrative	43,366		44,115		131,004		119,965
Total operating expenses	Total operating expenses	103,536		80,772		297,335		229,875			Total operating expenses	98,494		103,536		327,248		297,335
Loss from operations	Loss from operations	(52,592)		(43,889)		(220,424)		(100,997)			Loss from operations	(103,708)		(52,592)		(221,845)		(220,424)
Interest income	Interest income	1,109		72		1,364		222			Interest income	7,419		1,109		13,771		1,364
Interest expense	Interest expense	(13,099)		(14,514)		(41,000)		(43,798)			Interest expense	(68,037)		(13,099)		(93,736)		(41,000)

Other (expense) income, net											Other (expense) income, net	(1,577)		4,472		(3,660)		254
Loss on extinguishment of debt	Loss on extinguishment of debt	—		—		(4,233)		—			Loss on extinguishment of debt	(1,415)		—		(4,288)		(4,233)
Other income, net		4,472		2,011		254		1,948
Gain (loss) on revaluation of embedded derivatives		54		(184)		623		(1,644)
(Loss) gain on revaluation of embedded derivatives											(Loss) gain on revaluation of embedded derivatives	(114)		54		(1,213)		623
Loss before income taxes	Loss before income taxes	(60,056)		(56,504)		(263,416)		(144,269)			Loss before income taxes	(167,432)		(60,056)		(310,971)		(263,416)
Income tax provision	Income tax provision	336		158		888		595			Income tax provision	646		336		1,083		888
Net loss	Net loss	(60,392)		(56,662)		(264,304)		(144,864)			Net loss	(168,078)		(60,392)		(312,054)		(264,304)
Less: Net loss attributable to noncontrolling interest		(3,315)		(4,309)		(9,768)		(13,733)
Net loss attributable to Class A and Class B common stockholders		$	(57,077)	$	(52,353)	$	(254,536)	$	(131,131)
Less: Net (loss) income attributable to redeemable noncontrolling interest		—		17		(300)		(9)
Less: Net gain (loss) attributable to noncontrolling interest											Less: Net gain (loss) attributable to noncontrolling interest	921		(3,315)		(5,427)		(9,768)

Net loss attributable to common stockholders											Net loss attributable to common stockholders	(168,999)		(57,077)		(306,627)		(254,536)
Less: Net loss attributable to redeemable noncontrolling interest											Less: Net loss attributable to redeemable noncontrolling interest	—		—		—		(300)
Net loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest	Net loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest	$	(57,077)	$	(52,370)	$	(254,236)	$	(131,122)		Net loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest	$	(168,999)	$	(57,077)	$	(306,627)	$	(254,236)
Net loss per share available to Class A and Class B common stockholders, basic and diluted		$	(0.31)	$	(0.30)	$	(1.41)	$	(0.76)
Weighted average shares used to compute net loss per share available to Class A and Class B common stockholders, basic and diluted		186,487		174,269		180,762		172,601
Net loss per share available to common stockholders, basic and diluted											Net loss per share available to common stockholders, basic and diluted	$	(0.80)	$	(0.31)	$	(1.47)	$	(1.41)
Weighted average shares used to compute net loss per share available to common stockholders, basic and diluted											Weighted average shares used to compute net loss per share available to common stockholders, basic and diluted	210,930		186,487		208,798		180,762

1 Including related party revenue of $125.7 million and $361.0 million for the three and nine months ended September 30, 2023, respectively, and $12.5 million and $30.2 million for the three and nine months ended September 30, 2022, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Bloom Energy Corporation

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021				2023		2022		2023		2022

Net loss	Net loss	$	(60,392)	$	(56,662)	$	(264,304)	$	(144,864)		Net loss	$	(168,078)	$	(60,392)	$	(312,054)	$	(264,304)
Other comprehensive loss, net of taxes:	Other comprehensive loss, net of taxes:										Other comprehensive loss, net of taxes:

Change in derivative instruments designated and qualifying as cash flow hedges		—		(763)		—		(4,031)
Foreign currency translation adjustment	Foreign currency translation adjustment	(1,027)		(299)		(1,774)		(523)			Foreign currency translation adjustment	(527)		(1,027)		(1,520)		(1,774)
Other comprehensive loss, net of taxes	Other comprehensive loss, net of taxes	(1,027)		(1,062)		(1,774)		(4,554)			Other comprehensive loss, net of taxes	(527)		(1,027)		(1,520)		(1,774)
Comprehensive loss	Comprehensive loss	(61,419)		(57,724)		(266,078)		(149,418)			Comprehensive loss	(168,605)		(61,419)		(313,574)		(266,078)
Less: Comprehensive loss attributable to noncontrolling interest		(3,811)		(3,691)		(10,361)		(9,956)
Comprehensive loss attributable to Class A and Class B common stockholders		$	(57,608)	$	(54,033)	$	(255,717)	$	(139,462)
Less: Comprehensive (loss) income attributable to redeemable noncontrolling interest		—		17		(300)		(9)
Comprehensive loss after portion attributable to redeemable noncontrolling interest and noncontrolling interest		$	(57,608)	$	(54,050)	$	(255,417)	$	(139,453)
Less: Comprehensive gain (loss) attributable to noncontrolling interest											Less: Comprehensive gain (loss) attributable to noncontrolling interest	719		(3,811)		(5,820)		(10,361)

Comprehensive loss attributable to common stockholders											Comprehensive loss attributable to common stockholders	$	(169,324)	$	(57,608)	$	(307,754)	$	(255,717)
Less: Comprehensive loss attributable to redeemable noncontrolling interest											Less: Comprehensive loss attributable to redeemable noncontrolling interest	—		—		—		(300)
Comprehensive loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest											Comprehensive loss before portion attributable to redeemable noncontrolling interest and noncontrolling interest	$	(169,324)	$	(57,608)	$	(307,754)	$	(255,417)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Bloom Energy Corporation

Condensed Consolidated Statements of Changes in ~~Stockholders'~~Stockholders’ Equity (Deficit)

(in thousands, except share data)

(unaudited)

Three Months Ended September 30, 2022
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total equity (deficit) attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity (Deficit)
Shares Amount
Balances at June 30, 2022 178,913,797 $ 18 $ 3,284,261 $ (1,000) $ (3,460,234) $ (176,955) $ 32,034 $ (144,921)
Issuance of restricted stock awards 539,074 — — — — — — —
ESPP purchase 339,055 — 5,619 — — 5,619 — 5,619
Exercise of stock options 225,759 — 2,233 — — 2,233 — 2,233
Stock-based compensation — — 23,893 — — 23,893 — 23,893
Distributions and payments to noncontrolling interests — — — — — — (1,557) (1,557)
Contributions from noncontrolling interest — — — — — — 2,815 2,815
Public share offering (Note 1) 14,950,000 1 371,526 — — 371,527 — 371,527
Forward to purchase Class A Common Stock (Note 5) — — 4,183 — — 4,183 — 4,183
Foreign currency translation adjustment — — — (531) — (531) (496) (1,027)
Net loss1
— — — — (57,077) (57,077) (3,315) (60,392)
Balances at September 30, 2022 194,967,685 $ 19 $ 3,691,715 $ (1,531) $ (3,517,311) $ 172,892 $ 29,481 $ 202,373


		Three Months Ended September 30, 2023
	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity Attributable to Common Stockholders		Noncontrolling Interest		Total Stockholders’ Equity
		Shares	Amount
Balances at June 30, 2023		209,181,382	$	20	$	4,011,900	$	(2,053)	$	(3,702,111)	$	307,756	$	38,479	346,235
Issuance of restricted stock awards		637,728	—		—		—		—		—		—		—
ESPP purchase		426,170	—		5,607		—		—		5,607		—		5,607
Exercise of stock options		123,889	—		1,138		—		—		1,138		—		1,138
Stock-based compensation expense		—	—		19,469		—		—		19,469		—		19,469

Buyout of noncontrolling interest (Note 10)		—	—		11,482		—		—		11,482		(18,346)		(6,864)
Conversion of Series B redeemable convertible preferred stock (Note 16)		13,491,701	1		310,484		—		—		310,485		—		310,485
Distributions and payments to noncontrolling interest		—	—		—		—		—		—		(2,265)		(2,265)
Foreign currency translation adjustment		—	—		—		(325)		—		(325)		(202)		(527)
Net (loss) gain		—	—		—		—		(168,999)		(168,999)		921		(168,078)
Balances at September 30, 2023		223,860,870	$	21	$	4,360,080	$	(2,378)	$	(3,871,110)	$	486,613	$	18,587	$	505,200

1~~There is no net loss attributable to redeemable noncontrolling interest.~~

~~Note: There was no redeemable noncontrolling interest as of June 30, 2022 and September 30, 2022.~~

Three Months Ended September 30, 2021
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total deficit attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity
Shares Amount
Balances at June 30, 2021 173,402,160 $ 17 $ 3,155,917 $ (124) $ (3,177,381) $ (21,571) $ 51,185 $ 29,614
Issuance of restricted stock awards 581,363 — — — — — — —
ESPP purchase 967,797 — 5,319 — — 5,319 — 5,319
Exercise of stock options 126,741 1 1,122 — — 1,123 — 1,123
Stock-based compensation — — 20,743 — — 20,743 — 20,743
Change in effective portion of interest rate swap agreement — — — — — — 763 763
Distributions and payments to noncontrolling interests — — — — — — (540) (540)
Foreign currency translation adjustment — — — (154) — (154) (145) (299)
Net loss2
— — — — (52,370) (52,370) (4,309) (56,679)
Balances at September 30, 2021 175,078,061 $ 18 $ 3,183,101 $ (278) $ (3,229,751) $ (46,910) $ 46,954 $ 44

2~~Excludes $17 attributable to redeemable noncontrolling interest.~~

Note: Beginning redeemable noncontrolling interest of $334 - distributions to redeemable noncontrolling interests of $20 + net income attributable to redeemable noncontrolling interest of $17 = ending redeemable noncontrolling interest of $331.


		Three Months Ended September 30, 2022
	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity (Deficit) Attributable to Common Stockholders		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
		Shares	Amount
Balances at June 30, 2022		178,913,797	$	18	$	3,284,261	$	(1,000)	$	(3,460,234)	$	(176,955)	$	32,034	$	(144,921)
Issuance of restricted stock awards		539,074	—		—		—		—		—		—		—
ESPP purchase		339,055	—		5,619		—		—		5,619		—		5,619
Exercise of stock options		225,759	—		2,233		—		—		2,233		—		2,233
Stock-based compensation		—	—		23,893		—		—		23,893		—		23,893
Distributions and payments to noncontrolling interests		—	—		—		—		—		—		(1,557)		(1,557)
Contributions from noncontrolling interest		—	—		—		—		—		—		2,815		2,815
Public share offering		14,950,000	1		371,526		—		—		371,527		—		371,527
Forward to purchase Class A Common Stock		—	—		4,183		—		—		4,183		—		4,183
Foreign currency translation adjustment		—	—		—		(531)		—		(531)		(496)		(1,027)
Net loss		—	—		—		—		(57,077)		(57,077)		(3,315)		(60,392)
Balances at September 30, 2022		194,967,685	$	19	$	3,691,715	$	(1,531)	$	(3,517,311)	$	172,892	$	29,481	$	202,373

Nine Months Ended September 30, 2022
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total equity (deficit) attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity (Deficit)
Shares Amount
Balances at December 31, 2021 176,460,407 $ 18 $ 3,219,081 $ (350) $ (3,263,075) $ (44,326) $ 42,499 $ (1,827)
Issuance of restricted stock awards 2,328,713 — — — — — — —
ESPP purchase 759,744 — 11,600 — — 11,600 — 11,600
Exercise of stock options 468,821 — 3,550 — — 3,550 — 3,550
Stock-based compensation expense — — 82,275 — — 82,275 — 82,275
Distributions and payments to noncontrolling interests — — (500) — — (500) (5,472) (5,972)
Contributions from noncontrolling interest — — — — — — 2,815 2,815
Public share offering (Note 1) 14,950,000 1 371,526 — — 371,527 — 371,527
Forward to purchase Class A Common Stock (Note 5) — — 4,183 — — 4,183 — 4,183
Foreign currency translation adjustment — — — (1,181) — (1,181) (593) (1,774)
Net loss3
— — — — (254,236) (254,236) (9,768) (264,004)
Balances at September 30, 2022 194,967,685 $ 19 $ 3,691,715 $ (1,531) $ (3,517,311) $ 172,892 $ 29,481 $ 202,373


		Nine Months Ended September 30, 2023
	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity Attributable to Common Stockholders		Noncontrolling Interest		Total Stockholders’ Equity
		Shares	Amount
Balances at December 31, 2022		205,664,690	$	20	$	3,906,491	$	(1,251)	$	(3,564,483)	$	340,777	$	38,039	$	378,816
Issuance of restricted stock awards		3,496,491	—		—		—		—		—		—		—
ESPP purchase		875,695	—		13,363		—		—		13,363		—		13,363
Exercise of stock options		332,293	—		2,640		—		—		2,640		—		2,640
Stock-based compensation		—	—		77,755		—		—		77,755		—		77,755
Derecognition of the pre-modification forward contract fair value (Note 16)		—	—		76,242		—		—		76,242		—		76,242
Equity component of Series B redeemable convertible preferred stock (Note 16)		—	—		16,145		—		—		16,145		—		16,145
Contributions from noncontrolling interest		—	—		—		—		—		—		6,979		6,979
Purchase of capped call related to convertible notes (Note 7)		—	—		(54,522)		—		—		(54,522)		—		(54,522)
Buyout of noncontrolling interest (Note 10)		—	—		11,482		—		—		11,482		(18,346)		(6,864)
Conversion of Series B redeemable convertible preferred stock (Note 16)		13,491,701	1		310,484		—		—		310,485		—		310,485
Distributions and payments to noncontrolling interest		—	—		—		—		—		—		(2,265)		(2,265)
Foreign currency translation adjustment		—	—		—		(1,127)		—		(1,127)		(393)		(1,520)
Net loss		—	—		—		—		(306,627)		(306,627)		(5,427)		(312,054)
Balances at September 30, 2023		223,860,870	21		$	4,360,080	$	(2,378)	$	(3,871,110)	$	486,613	$	18,587	$	505,200


		Nine Months Ended September 30, 2022
	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Equity (Deficit) Attributable to Common Stockholders		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
		Shares	Amount
Balances at December 31, 2021		176,460,407	$	18	$	3,219,081	$	(350)	$	(3,263,075)	$	(44,326)	$	42,499	$	(1,827)
Issuance of restricted stock awards		2,328,713	—		—		—		—		—		—		—
ESPP purchase		759,744	—		11,600		—		—		11,600		—		11,600
Exercise of stock options		468,821	—		3,550		—		—		3,550		—		3,550
Stock-based compensation		—	—		82,275		—		—		82,275		—		82,275
Distributions and payments to noncontrolling interests		—	—		(500)		—		—		(500)		(5,472)		(5,972)
Contributions from noncontrolling interest		—	—		—		—		—		—		2,815		2,815
Public share offering		14,950,000	1		371,526		—		—		371,527		—		371,527
Forward to purchase Class A Common Stock		—	—		4,183		—		—		4,183		—		4,183
Foreign currency translation adjustment		—	—		—		(1,181)		—		(1,181)		(593)		(1,774)
Net loss1		—	—		—		—		(254,236)		(254,236)		(9,768)		(264,004)
Balances at September 30, 2022		194,967,685	$	19	$	3,691,715	$	(1,531)	$	(3,517,311)	$	172,892	$	29,481	$	202,373

1Excludes $300 attributable to redeemable noncontrolling interest.

Note: Beginning redeemable noncontrolling interest of $300 - ~~net~~Net loss attributable to redeemable noncontrolling interest of $300 = ending redeemable noncontrolling interest of ~~Nil.~~nil.

Nine Months Ended September 30, 2021
Class A and Class B Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total (deficit) equity attributable to Class A and Class B common stockholders Noncontrolling Interest Total Stockholders' Equity
Shares Amount
Balances at December 31, 2020 168,002,726 $ 17 $ 3,182,753 $ (9) $ (3,103,937) $ 78,824 $ 62,195 $ 141,019
Cumulative effect upon adoption of Accounting Standards Update 2020-06 — — (126,799) — 5,308 (121,491) — (121,491)
Issuance of restricted stock awards 2,533,027 — — — — — — —
ESPP purchase 1,945,305 — 10,045 — — 10,045 — 10,045
Exercise of stock options 2,597,003 1 62,064 — — 62,065 — 62,065
Stock-based compensation expense — — 55,038 — — 55,038 — 55,038
Change in effective portion of interest rate swap agreement — — — — — — 4,031 4,031
Distributions and payments to noncontrolling interests — — — — — — (5,285) (5,285)
Foreign currency translation adjustment — — — (269) — (269) (254) (523)
Net loss4
— — — — (131,122) (131,122) (13,733) (144,855)
Balances at September 30, 2021 175,078,061 $ 18 $ 3,183,101 $ (278) $ (3,229,751) $ (46,910) $ 46,954 $ 44

4~~Excludes $9 attributable to redeemable noncontrolling interest.~~

Note: Beginning redeemable noncontrolling interest of $377 - distributions to redeemable noncontrolling interest of $37 - net loss attributable to redeemable noncontrolling interest of $9 = ending redeemable noncontrolling interest of $331.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Bloom Energy Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(264,304)	$	(144,864)	Net loss	$	(312,054)	$	(264,304)
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	46,182		40,079		Depreciation and amortization	50,283		46,182
Non-cash lease expense	Non-cash lease expense	18,153		7,161		Non-cash lease expense	24,540		18,153
Gain on sale of property, plant and equipment		(523)		—

Write-off of assets related to PPA IIIa		44,800		—
Loss (gain) on disposal of property, plant and equipment						Loss (gain) on disposal of property, plant and equipment	177		(523)

Revaluation of derivative liabilities		(9,640)		486

Revaluation of derivative contracts						Revaluation of derivative contracts	1,213		(9,640)
Impairment of assets related to PPA V and PPA IIIa						Impairment of assets related to PPA V and PPA IIIa	130,111		44,800
Derecognition of loan commitment asset related to SK ecoplant Second Tranche Closing (Note 16)						Derecognition of loan commitment asset related to SK ecoplant Second Tranche Closing (Note 16)	52,792		—

Stock-based compensation	Stock-based compensation	81,460		57,309		Stock-based compensation	77,160		81,460

Gain on remeasurement of investment		—		(1,966)

Loss on extinguishment of debt		4,233		—

Amortization of warrants and debt issuance costs	Amortization of warrants and debt issuance costs	2,355		2,824		Amortization of warrants and debt issuance costs	3,300		2,355
Loss on extinguishment of debt						Loss on extinguishment of debt	4,288		4,233
Unrealized foreign currency exchange loss	Unrealized foreign currency exchange loss	3,086		184		Unrealized foreign currency exchange loss	3,029		3,086
Other	Other	3,487		—		Other	—		3,487
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable		15,758		34,236
Contract assets		(567)		(24,418)
Accounts receivable1						Accounts receivable1	(83,851)		15,758
Contract assets2						Contract assets2	(97,148)		(567)
Inventories	Inventories	(110,797)		(39,953)		Inventories	(206,315)		(110,797)
Deferred cost of revenue		(8,856)		7,307
Deferred cost of revenue3						Deferred cost of revenue3	(15,914)		(8,856)
Customer financing receivable	Customer financing receivable	2,510		4,022		Customer financing receivable	—		2,510
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(15,766)		236		Prepaid expenses and other current assets	(20,849)		(15,766)
Other long-term assets	Other long-term assets	(730)		(374)		Other long-term assets	13,634		(730)
Operating lease right-of-use assets and operating lease liabilities	Operating lease right-of-use assets and operating lease liabilities	2,162		(7,593)		Operating lease right-of-use assets and operating lease liabilities	(23,879)		2,162
Finance lease liabilities	Finance lease liabilities	499		—		Finance lease liabilities	907		499
Accounts payable	Accounts payable	38,642		37,795		Accounts payable	(5,695)		38,642
Accrued warranty	Accrued warranty	1,597		(2,357)		Accrued warranty	(795)		1,597
Accrued expenses and other current liabilities		502		(26,178)
Deferred revenue and customer deposits		(12,716)		(53,181)
Accrued expenses and other current liabilities4						Accrued expenses and other current liabilities4	(30,937)		502
Deferred revenue and customer deposits5						Deferred revenue and customer deposits5	(57,041)		(12,716)
Other long-term liabilities	Other long-term liabilities	(9,980)		1,289		Other long-term liabilities	(1,320)		(9,980)
Net cash used in operating activities	Net cash used in operating activities	(168,453)		(107,956)		Net cash used in operating activities	(494,364)		(168,453)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of property, plant and equipment	Purchase of property, plant and equipment	(80,907)		(44,625)		Purchase of property, plant and equipment	(67,485)		(80,907)
Net cash acquired from step acquisition		—		3,114
Proceeds from sale of property, plant and equipment						Proceeds from sale of property, plant and equipment	3		—

Net cash used in investing activities	Net cash used in investing activities	(80,907)		(41,511)		Net cash used in investing activities	(67,482)		(80,907)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Repayment of debt of PPA IIIa		(30,212)		—
Repayment of debt		(17,262)		(11,017)

Proceeds from issuance of debt						Proceeds from issuance of debt	633,983		—
Payment of debt issuance costs						Payment of debt issuance costs	(19,539)		—
Repayment of debt of PPA V and PPA IIIa						Repayment of debt of PPA V and PPA IIIa	(118,538)		(30,212)
Debt make-whole payment related to PPA IIIa debt	Debt make-whole payment related to PPA IIIa debt	(2,413)		—		Debt make-whole payment related to PPA IIIa debt	—		(2,413)

Repayment of recourse debt						Repayment of recourse debt	(72,852)		(17,262)
Proceeds from financing obligations	Proceeds from financing obligations	—		7,534		Proceeds from financing obligations	2,702		—
Repayment of financing obligations	Repayment of financing obligations	(28,821)		(10,174)		Repayment of financing obligations	(13,475)		(28,821)
Contributions from noncontrolling interests		2,815		—
Distributions to redeemable noncontrolling interests		—		(37)
Distributions and payments to noncontrolling interests	Distributions and payments to noncontrolling interests	(5,972)		(5,285)		Distributions and payments to noncontrolling interests	(2,265)		(5,972)
Proceeds from issuance of common stock	Proceeds from issuance of common stock	15,150		72,109		Proceeds from issuance of common stock	16,003		15,150

Proceeds from public share offering (Note 1)		385,396		—
Public share offering costs (Note 1)		(13,407)		—
Proceeds from public share offering						Proceeds from public share offering	—		385,396
Public share offering costs						Public share offering costs	—		(13,407)
Buyout of noncontrolling interest (Note 10)						Buyout of noncontrolling interest (Note 10)	(6,864)		—
Proceeds from issuance of Series B redeemable convertible preferred stock						Proceeds from issuance of Series B redeemable convertible preferred stock	310,957		—
Contributions from noncontrolling interest						Contributions from noncontrolling interest	6,979		2,815
Purchase of capped call related to convertible notes (Note 7)						Purchase of capped call related to convertible notes (Note 7)	(54,522)		—
Other	Other	(63)		—		Other	(408)		(63)
Net cash provided by financing activities	Net cash provided by financing activities	305,211		53,130		Net cash provided by financing activities	682,161		305,211
Effect of exchange rate changes on cash, cash equivalent and restricted cash	Effect of exchange rate changes on cash, cash equivalent and restricted cash	(1,643)		(472)		Effect of exchange rate changes on cash, cash equivalent and restricted cash	(985)		(1,643)
Net decrease in cash, cash equivalents and restricted cash		54,208		(96,809)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	119,330		54,208
Cash, cash equivalents and restricted cash:	Cash, cash equivalents and restricted cash:					Cash, cash equivalents and restricted cash:
Beginning of period	Beginning of period	615,114		416,710		Beginning of period	518,366		615,114
End of period	End of period	$	669,322	$	319,901	End of period	$	637,696	$	669,322

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid during the period for interest	Cash paid during the period for interest	$	39,664	$	42,598	Cash paid during the period for interest	$	32,741	$	39,664
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:					Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	Operating cash flows from operating leases	11,759		10,332		Operating cash flows from operating leases	23,684		11,759
Operating cash flows from finance leases	Operating cash flows from finance leases	788		643		Operating cash flows from finance leases	804		788
Cash paid during the period for income taxes	Cash paid during the period for income taxes	1,296		372		Cash paid during the period for income taxes	1,332		1,296
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:

Transfer of customer financing receivable to property, plant and equipment, net	Transfer of customer financing receivable to property, plant and equipment, net	42,758		—		Transfer of customer financing receivable to property, plant and equipment, net	$	—	$	42,758
Increase in recourse debt, non-current upon adoption of ASU 2020-06, net		—		121,491
Forward to purchase Class A Common Stock (Note 5)		4,183		—
Forward to purchase Class A Common Stock						Forward to purchase Class A Common Stock	—		4,183
Liabilities recorded for property, plant and equipment, net	Liabilities recorded for property, plant and equipment, net	13,373		6,188		Liabilities recorded for property, plant and equipment, net	5,702		13,373

Recognition of operating lease right-of-use asset during the year-to-date period	Recognition of operating lease right-of-use asset during the year-to-date period	17,623		43,660		Recognition of operating lease right-of-use asset during the year-to-date period	14,157		17,623
Recognition of finance lease right-of-use asset during the year-to-date period	Recognition of finance lease right-of-use asset during the year-to-date period	—		1,961		Recognition of finance lease right-of-use asset during the year-to-date period	907		—
Derecognition of the pre-modification forward contract fair value (Note 16)						Derecognition of the pre-modification forward contract fair value (Note 16)	76,242		—
Equity component of Series B redeemable convertible preferred stock (Note 16)						Equity component of Series B redeemable convertible preferred stock (Note 16)	16,145		—
Conversion of Series B redeemable convertible preferred stock (Note 16)						Conversion of Series B redeemable convertible preferred stock (Note 16)	310,484		—

1 Including changes in related party balances of $243.6 million and $8.2 million for the nine months ended September 30, 2023 and 2022, respectively.

2 Including change in related party balances of $3.4 million for the nine months ended September 30, 2023. There were no associated related party balances for the nine months ended September 30, 2022.

3 Including change in related party balances of $23.4 million for the nine months ended September 30, 2023. There were no associated related party balances for the nine months ended September 30, 2022.

4 Including change in related party balances of $5.7 million for the nine months ended September 30, 2023. There were no associated related party balances for the nine months ended September 30, 2022.

5 Including change in related party balances of $11.1 million for the nine months ended September 30, 2023. There were no associated related party balances for the nine months ended September 30, 2022.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Bloom Energy Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

The unaudited interim financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.

The unaudited interim financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in our ~~2021~~ Annual Report on Form ~~10-K.~~10-K for the fiscal year ended December 31, 2022.

Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

1. Nature of Business, Liquidity and Basis of Presentation

Nature of Business

For information on the nature of our business, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Nature of Business section in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

~~We have not experienced any supply chain disruptions as a result of the invasion by the Russian Federation in Ukraine on February 24, 2022.~~

Liquidity

We have generally incurred operating losses and negative cash flows from operations since our inception. With the series of new debt offerings, debt ~~extensions~~extinguishments, and conversions to ~~equity~~equity that we completed during ~~2020~~2022 and ~~2021,~~the first three quarters of 2023, we had ~~$287.5~~$840.5 million of total outstanding recourse debt as of September 30, ~~2022, $274.7 million of~~2023, which iswas classified as long-term debt. ~~Our recourse debt scheduled repayments commenced in June 2022.~~

On ~~August 10, 2022, pursuant~~ March 20, 2023, we entered into an Amendment (the “Amended SPA”) to the Securities Purchase Agreement ~~(“the SPA”)~~with SK ecoplant, notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 sharesdated October 23, 2021 (the “Second Tranche Shares”) at a purchase price of $23.05 per share, calculated as a 15% premium to the volume-weighted average closing price of the 20 consecutive trading day period immediately preceding the exercise of the option (see Note 5 - Fair Value). The aggregate purchase price approximates cash proceeds to be received by us of $311.0 million, net of related incremental direct costs of $0.1 million. The payment for the Second Tranche Shares will be due the later of (i) December 6, 2022 and (ii) upon clearance under the Hart Scott Rodino (“HSR”) Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.

“

~~On August 19, 2022, we completed an underwritten public offering (“the Offering”~~SPA”), and the Investor Agreement, dated December 29, 2021, pursuant to which we issued and sold ~~13,000,000~~to SK ecoplant 13,491,701 shares of Series B redeemable convertible preferred stock (the “Series B RCPS”) for cash proceeds of $311.0 million. For additional information, please see Part I, Item 1, Note 16 - SK ecoplant Strategic Investment.

On March 20, 2023, in connection with the Amended SPA we also entered into a Shareholders’ Loan Agreement with SK ecoplant (the “Loan Agreement”), pursuant to which we were entitled to draw down on a loan from SK ecoplant with a maximum principal amount of $311.0 million, if SK ecoplant sent a redemption notice to us under the Amended SPA or otherwise reduced any portion of its holdings of our Class A ~~Common Stock at price of $26.00 per share. As a part~~common stock. On September 23, 2023, all 13,491,701 shares of the ~~Offering, the underwriters~~Series B RCPS were ~~provided a 30-day option to purchase an additional 1,950,000~~automatically converted into shares of our Class A ~~Common Stock at~~common stock. For additional information, please see Part I, Item 1, Note 11 - Related Party Transactions and Note 16 - SK ecoplant Strategic Investment.

On May 16, 2023, we issued 3% Green Convertible Senior Notes (the “3% Green Notes”) in an aggregate principal amount of $632.5 million due June 2028, unless earlier repurchased, redeemed or converted, less the ~~same price, less underwriting discounts~~initial purchasers’ discount of $15.8 million and ~~commissions (“the Greenshoe”), which was exercised contemporaneously with the Offering. The aggregate~~other issuance costs of $4.0 million, resulting in net proceeds ~~received by us~~of $612.7 million. On June 1, 2023, we used approximately $60.9 million of the net proceeds from this offering to redeem all of the ~~Offering were $371.5 million after deducting underwriting discounts~~outstanding principal amount of our 10.25% Senior Secured Notes due March 2027. The redemption price equaled 104% of the principal amount redeemed plus accrued and ~~commissions~~unpaid interest. For additional information, please see Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements.

On August 24, 2023, as part of ~~$16.5~~the repowering of PPA V Investment Company and Operating Company (“PPA V”), our Power Purchase Agreement (“PPA”) entity, we paid off the outstanding balance and related accrued interest of $118.5 million and ~~incremental costs directly attributable to the Offering~~$0.5 million, respectively, of ~~$0.7 million.~~our 3.04% Senior Secured Notes due June 30, 2031. For additional information, please see Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements.

Our future capital requirements ~~will~~ depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds, and the need for additional manufacturing space, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our product, our ability to secure financing for customer use of our Energy Servers, the timing of installations, and overall economic conditions, including the ~~impact of COVID-19 and~~ inflationary pressure in the USU.S. on our ongoing and

future operations. The rising interest rate environment in the USU.S. has and ~~will~~may continue to adversely impact the cost of new capital deployment.

In the opinion of management, the combination of our existing cash and cash equivalents and the expected timing of operating cash flows is expected to be sufficient to meet our operational and capital cash flow requirements and other cash flow needs for the next 12 months from the date of issuance of this Quarterly Report on Form 10-Q.

Inflation Reduction Act of 2022 – New and Expanded Production and Tax Credits for Manufacturers and Projects to Support Clean Energy

~~On August 7, 2022, the United States Senate passed~~For information on the Inflation Reduction Act of 2022 ~~(“the IRA”~~(the “IRA”) ~~under fiscal year 2022 budget reconciliation instructions. On~~signed into law on August 16, 2022, the IRA was signed into law. This new bill is the U.S. federal government’s largest-ever investment to fight climate change. The IRA includes numerous investments in climate protection, including investments in clean energy production and ~~tax credits aimed at reducing carbon emissions by roughly 40% by 2030. By implementing the IRA, the government aims to make an~~its impact ~~on energy markets so that cleaner options are more affordable to consumers.~~

~~The IRA contains several credits and incentive provisions that may be relevant to us:~~


~~Credit~~			~~Credit summary~~
~~Section 45 – Production Tax credit (“PTC”)~~			~~Provides a 10-year tax credit for a variety of renewable energy technologies to incentivize electricity generation to be sold to a third party.~~
~~Section 48 – Investment Tax Credit (“ITC”)~~			~~Provides a tax credit based on capital investment in a variety of renewable and conventional energy technologies to incentivize investment in new energy resources and more efficient use of fuel.~~
~~Section 45X – Advanced Manufacturing Production~~			Provides a PTC for the production of certain eligible components sold to an unrelated person (exceptions apply). The credit amount varies based on the eligible component, which includes solar components, wind energy components, inverters, qualifying battery components, and critical minerals.
~~Section 48C – Qualified Advanced Energy Project (reenacted)~~			~~Provides an ITC through a competitive application process administered through the Department of Energy equal to 6% or 30% of the investment with respect to advanced energy projects.~~
~~Section 45Y – Clean Electricity Production Credit~~			Provides a 10-year technology-neutral PTC, equal to the kWh of electricity produced by the taxpayer times an applicable amount (based of $0.003/kWh up to $0.015/kWh) for the production of clean electricity produced at a qualifying facility for which the GHG emission rate is not greater than zero and electricity is sold, consumed or stored.
~~Section 48E – Clean Electricity Investment Tax Credit~~			Provides a technology-neutral ITC of between 6% (or 2%) to 30% (or 10%) for qualified capital investments in an electric generating facility or energy storage for which GHG rate is not greater than zero.
~~Section 45V – Clean Hydrogen~~			~~Provides a PTC of up to $3 per kg of clean hydrogen over a 10-year credit period for the production of clean hydrogen at a qualified facility in the US.~~
~~Section 45Q – Carbon Capture Sequestration~~			~~Provides a credit ranging from $12-$17 or $60-$85 per metric ton based on the amount of carbon oxides captured from a qualified facility over a 12-year period.~~

~~We are currently assessing the impact of these provisions~~ on our business, ~~beyond the third quarter~~see Part II, Item 8, Note 1 - Nature of ~~2022.~~

~~Some~~Business, Liquidity and Basis of Presentation, Inflation Reduction Act of 2022 section in our existing contracts contemplated price adjustments due to changes to ITC rate at the inception of the contracts. As a result, we recognized $8.7 million product revenue and $1.3 million installation revenueAnnual Report on Form 10-K for the ~~three months~~fiscal year ended ~~September 30, 2022, due to a change in variable considerations for energy servers placed in service during the eligible periods from such existing contracts.~~December 31, 2022.

Basis of Presentation

We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), ~~and as permitted by those rules,~~ including all disclosures required by generally accepted accounting principles as applied in the United States (“U.S. GAAP”). ~~Certain prior period amounts have been reclassified to conform to the current period presentation.~~

Principles of Consolidation

For information on the principles of consolidation, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Principles of Consolidation section in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

10Business Combinations

For information on the business combinations, see Part II, Item 8, Note 1 -

Nature of Business, Liquidity and Basis of Presentation, Business Combinations section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Use of Estimates

For information on the use of accounting estimates, see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Use of Estimates section in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Concentration of Risk

Geographic Risk -The The majority of our revenue for the three and nine months ended September 30, 2023 was attributable to operations in the United States and, for the three and nine months ended September 30, 2022, to operations in the Republic of Korea. A major portion of our long-lived assets ~~are~~is attributable to operations in the United States for all periods presented. In addition to shipments in the ~~US,~~U.S. and the Republic of Korea, we also ship our Energy Servers to other countries, primarily toJapan and India (the markets of the Republic of Korea, Japan and India, ~~(collectively,~~collectively referred to as the “Asia Pacific region”). In the three and nine months ended September 30, 2023, total revenue related to shipments to the Asia Pacific region was 35% and 24%, respectively. In the three and nine months ended September 30, 2022, total revenue inrelated to shipments to the Asia Pacific region was 58% and 61%, ~~respectively, of our total revenue. In the three and nine months ended September 30, 2021, total revenue in the Asia Pacific region was 36% and 38%, respectively, of our total revenue.~~respectively.

Credit Risk - At September 30, ~~2022 and December 31, 2021, one customer~~2023, two customers accounted for approximately ~~23%~~72% and ~~60%~~18% of accounts ~~receivable, respectively.~~receivable. At December 31, 2022, one customer represented approximately 75% of accounts receivable. To date, we have not experienced any credit losses.

Customer Risk - During the three months ended September 30, 2023, revenue from two customers accounted for approximately 40% and 31% of our total revenue. During the nine months ended September 30, 2023, two customers represented approximately 36% and 24% of our total revenue.

During the three months ended September 30, 2022, two customers represented approximately 54% and 26% of our total ~~revenue, respectively.~~revenue. During the nine months ended September 30, 2022, two customers represented approximately 48% and 16% of our total ~~revenue, respectively.~~revenue.

During the three months ended September 30, 2021, one customer represented 35% of our total revenue. During the nine months ended September 30, 2021, revenue from two customers represented 37% and 12% of our total revenue, respectively.

2. Summary of Significant Accounting Policies

Please refer to the accounting policies described in Part II, Item 8, Note 2 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Recent Accounting Pronouncements

There have been no significant changes in our reported financial position or results of operations and cash flows resulting from the adoption of new accounting pronouncements.

~~Accounting Guidance Not Yet Adopted~~

~~Contract Assets and Contract Liabilities Acquired in a Business Combination~~ - In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, ~~Revenue from Contracts with Customers, as if it had originated the contracts. This approach differs from the current requirement to measure contract assets and contract liabilities acquired in abusiness combination at fair value. ASU 2021-08 will be effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022.Early adoption is permitted. The adoption impact of ASU 2021-08 will depend on the magnitude of any future acquisitions. The standard will not impact acquiredcontract assets or liabilities from business combinations occurring prior to the adoption date.~~

3. Revenue Recognition

Contract Balances

The following table provides information about accounts receivables, contract assets, customer deposits and deferred revenue from contracts with customers (in thousands):


	September 30,		December 31,
	2023		2022

Accounts receivable	$	334,495	$	250,995
Contract assets	143,875		46,727
Customer deposits	66,043		121,085
Deferred revenue	67,613		94,355

September 30, December 31,
2022 2021
Accounts receivable $ 71,184 $ 87,788
Contract assets 25,768 25,201
Customer deposits 64,412 64,809
Deferred revenue 103,156 115,476
Contract assets relate to contracts for which revenue is recognized upon transfer of control of performance obligations, but where billing milestones have not been reached. Customer deposits and deferred revenue include payments received from customers or invoiced amounts prior to transfer of controls of performance obligations. At December 31, 2022, customer deposits included $24.6 million related to transactions with SK ecoplant, and refundable fees received from customers. At September 30, 2023 there were no customer deposits related to transactions with SK ecoplant (see Note 16 - SK ecoplant Strategic Investment).

Contract assets and contract liabilities are reported in a net position on an individual contract basis at the end of each reporting period. Contract assets are classified as current in the condensed consolidated balance ~~sheet~~sheets when both the ~~Company expects~~milestones other than the passage of time, are expected to be complete and the ~~related performance obligations and invoice the customers~~customer is invoiced within one year of the balance sheet date, and as long-term when both the ~~Company expects~~above-mentioned milestones are expected to be complete, and the ~~related performance obligations and invoice the customers~~customer is invoiced more than one year out from the balance sheet date. Contract liabilities are classified as current in the condensed consolidated balance ~~sheet~~sheets when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected to occur in more than one year from the balance sheet date.

Contract Assets


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,			Nine Months Ended September 30,
		2022		2021		2022		2021				2023		2022		2023		2022

Beginning balance	Beginning balance	$	33,374	$	18,638	$	25,201	$	3,327	Beginning balance		$	35,182	$	33,374	$	46,727	$	25,201
Transferred to accounts receivable from contract assets recognized at the beginning of the period	Transferred to accounts receivable from contract assets recognized at the beginning of the period	(21,677)		(11,758)		(21,304)		—		Transferred to accounts receivable from contract assets recognized at the beginning of the period		(8,284)		(21,677)		(31,968)		(21,304)
Revenue recognized and not billed as of the end of the period	Revenue recognized and not billed as of the end of the period	14,071		20,865		21,871		24,418		Revenue recognized and not billed as of the end of the period		116,977		14,071		129,116		21,871
Ending balance	Ending balance	$	25,768	$	27,745	$	25,768	$	27,745	Ending balance		$	143,875	$	25,768	$	143,875	$	25,768

Contract assets as of September 30, 2023 were primarily related to the PPA V Upgrade. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.

Deferred Revenue

Deferred revenue activity, including deferred incentive revenue activity, during the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 consisted of the following (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,			Nine Months Ended September 30,
		2022		2021		2022		2021				2023		2022		2023		2022

Beginning balance	Beginning balance	$	96,377	$	116,255	$	115,476	$	135,578	Beginning balance		$	85,110	$	96,377	$	94,355	$	115,476
Additions	Additions	248,574		175,423		597,318		541,519		Additions		243,545		248,574		733,891		597,318
Revenue recognized	Revenue recognized	(241,795)		(179,808)		(609,638)		(565,227)		Revenue recognized		(261,042)		(241,795)		(760,633)		(609,638)
Ending balance	Ending balance	$	103,156	$	111,870	$	103,156	$	111,870	Ending balance		$	67,613	$	103,156	$	67,613	$	103,156

Deferred revenue is equivalent to the total transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, as of the end of the period. Primary component of deferred revenue at the end of the period consists of performance obligations relating to the provision of maintenance services under current contracts and future renewal periods. Some of these obligations provide customers with material rights over a period that we estimate to be largely commensurate with the period of their expected use of the associated Energy Server. As a result, we expect to recognize these amounts as revenue over a period of up to 21 years, predominantly on a relative standalone selling price basis that reflects the cost of providing these services. Deferred revenue also includes performance obligations relating to product acceptance and installation. A significant amount of this deferred revenue is reflected as additions and revenue recognized in the same 12-month period, and a portion of this deferred revenue is expected to be recognized beyond this 12-month period mainly due to deployment schedules.

We do not disclose the value of the unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

Disaggregated Revenue

We disaggregate revenue from contracts with customers into four revenue categories: product, installation, services and electricity (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		2022		2021				2023		2022			2023		2022

Revenue from contracts with customers:	Revenue from contracts with customers:										Revenue from contracts with customers:
Product revenue	Product revenue	$	213,243	$	128,550	$	520,415	$	413,347		Product revenue	$	304,976	$	213,243		$	713,427	$	520,415
Installation revenue	Installation revenue	22,682		22,172		48,964		53,710			Installation revenue	21,916		22,682			66,762		48,964
Services revenue	Services revenue	37,347		39,251		111,012		111,375			Services revenue	47,535		37,347			130,496		111,012
Electricity revenue	Electricity revenue	2,875		804		8,352		2,107			Electricity revenue	9,012		2,875			16,816		8,352
Total revenue from contract with customers	Total revenue from contract with customers	276,147		190,777		688,743		580,539			Total revenue from contract with customers	383,439		276,147			927,501		688,743
Revenue from contracts that contain lease:
Revenue from contracts that contain leases:											Revenue from contracts that contain leases:
Electricity revenue	Electricity revenue	16,127		16,451		47,806		49,166			Electricity revenue	16,829		16,127			49,053		47,806
Total revenue	Total revenue	$	292,274	$	207,228	$	736,549	$	629,705		Total revenue	$	400,268	$	292,274		$	976,554	$	736,549

1312

4. Financial Instruments

Cash, Cash Equivalents, and Restricted Cash

The carrying values of cash, cash equivalents, and restricted cash approximate fair values and were as follows (in thousands):

September 30, December 31,
2022 2021
As Held:
Cash $ 215,926 $ 318,080
Money market funds 453,396 297,034
$ 669,322 $ 615,114
As Reported:
Cash and cash equivalents $ 492,120 $ 396,035
Restricted cash 177,202 219,079
$ 669,322 $ 615,114


	September 30,		December 31,
	2023		2022
As Held:
Cash	$	148,301	$	226,463
Money market funds	489,395		291,903
	$	637,696	$	518,366
As Reported:
Cash and cash equivalents	$	557,384	$	348,498
Restricted cash	80,312		169,868
	$	637,696	$	518,366

Restricted cash consisted of the following (in thousands):


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022
Current:	Current:					Current:
Restricted cash	Restricted cash	$	41,124	$	89,462	Restricted cash	$	42,614	$	50,965
Restricted cash related to PPA Entities1		980		3,078
Restricted cash related to PPA V Entity1						Restricted cash related to PPA V Entity1	—		550
		$	42,104	$	92,540		$	42,614	$	51,515
Non-current:	Non-current:					Non-current:
Restricted cash	Restricted cash	$	117,590	$	103,300	Restricted cash	$	37,698	$	110,353
Restricted cash related to PPA Entities1		17,508		23,239
Restricted cash related to PPA V Entity1						Restricted cash related to PPA V Entity1	—		8,000
		135,098		126,539			37,698		118,353
		$	177,202	$	219,079		$	80,312	$	169,868

1 ~~We have VIEs~~As of December 31, 2022, we had a variable interest entity (“VIE”) related to ~~PPAs~~our PPA entity, PPA V, that ~~represent~~represented a portion of the condensed consolidated balances recorded within the “restricted cash” and other financial statement line items in the condensed consolidated balance sheets (see Note 1110 - Portfolio Financings). In August 2023, we sold the PPA V entity as a result of the PPA V Repowering of Energy Servers (see Note 10 - Portfolio Financings), and as such there were no balances related to PPA V in the condensed consolidated balance sheet as of September 30, 2023. In addition, the restricted cash held in the PPA II and PPA IIIb entities as of September 30, ~~2022, includes $33.3~~2023 included $28.1 million and ~~$1.1~~$0.9 million of current restricted cash, respectively, and ~~$35.7~~$12.3 million and $6.7 million of non-current restricted cash, respectively. The restricted cash held in the PPA II and PPA IIIb entities as of December 31, ~~2021, includes $41.7~~2022, included $40.6 million and $1.2 million of current restricted cash, respectively, and ~~$57.7~~$28.5 million and $6.7 million of non-current restricted cash, respectively. These entities are not considered VIEs.

Factoring Arrangements

We sell certain customer trade receivables on a non-recourse basis under factoring arrangements with ~~our designated~~certain financial ~~institution.~~institutions. These transactions are accounted for as sales and cash proceeds are included in cash used in operating activities. We derecognized ~~$146.3~~$108.0 million and ~~$116.3~~$167.6 million of accounts receivable asduring the three and nine months ended September 30, 2023, respectively. We derecognized $146.3 million and $283.3 million of accounts receivable during the three and nine months ended September 30, 2022, ~~and December 31, 2021, respectively, under these factoring arrangements.~~ respectively.

The costs of factoring such accounts receivable on our condensed consolidated statements of operations for the three and nine months ended September 30, ~~2022,~~2023 were ~~$2.5~~$2.0 million and ~~$3.7~~$2.7 million, respectively. The costs of factoring for the three and nine months ended September 30, ~~2021,~~2022 were ~~not material.~~$2.5 million and $3.7 million, respectively. The ~~cost~~costs of factoring isare recorded in general and administrative expenses.

1413

5. Fair Value

Our accounting policy for the fair value measurement of cash equivalents and embedded Escalation Protection Plan (“EPP”) derivatives is described in Part II, Item 8 Note 2 - Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The tables below set forth, by level, our financial assets that are accounted for at fair value for the respective periods. The table does not include assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands):


		Fair Value Measured at Reporting Date Using									Fair Value Measured at Reporting Date Using
September 30, 2022		Level 1		Level 2		Level 3		Total
September 30, 2023										September 30, 2023	Level 1		Level 2		Level 3		Total

Assets	Assets									Assets
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	453,396	$	—	$	—	$	453,396	Money market funds	$	489,395	$	—	$	—	$	489,395

		$	453,396	$	—	$	—	$	453,396		$	489,395	$	—	$	—	$	489,395
Liabilities	Liabilities									Liabilities

Derivatives:	Derivatives:									Derivatives:

Embedded EPP derivatives	Embedded EPP derivatives	—		—		5,838		5,838		Embedded EPP derivatives	$	—	$	—	$	3,948	$	3,948

		$	—	$	—	$	5,838	$	5,838		$	—	$	—	$	3,948	$	3,948


		Fair Value Measured at Reporting Date Using									Fair Value Measured at Reporting Date Using
December 31, 2021		Level 1		Level 2		Level 3		Total
December 31, 2022										December 31, 2022	Level 1		Level 2		Level 3		Total

Assets	Assets									Assets
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	297,034	$	—	$	—	$	297,034	Money market funds	$	291,903	$	—	$	—	$	291,903

		$	297,034	$	—	$	—	$	297,034		$	291,903	$	—	$	—	$	291,903
Liabilities	Liabilities									Liabilities

Derivatives:	Derivatives:									Derivatives:
Option to acquire a variable number of shares of Class A Common Stock		$	—	$	13,200	$	—	$	13,200

Embedded EPP derivatives	Embedded EPP derivatives	—		—		6,461		6,461		Embedded EPP derivatives	$	—	$	—	$	5,895	$	5,895

		$	—	$	13,200	$	6,461	$	19,661		$	—	$	—	$	5,895	$	5,895

~~SK ecoplant Notice to Exercise the Option to Acquire a Variable Number of Shares of Class A Common Stock~~

On August 10, 2022, pursuant to the SPA, SK ecoplant notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 shares at a purchase price of $23.05 per share. Upon receipt of SK’s notice the purchase priceMoney Market Funds - Money market funds are valued using quoted market prices for identical securities and ~~the number of shares of Class A Common Stock that SK will purchase under the Option~~ are fixed. The payment for the Second Tranche Shares will be due the later of (i) December 6, 2022 and (ii) upon clearance under the HSR Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.

~~The Option was fair valued as of the notice date at $4.2 million. Upon the receipt of the notice from SK ecoplant the Option met the criteria of equity award and was~~therefore classified as ~~a forward contract as part of additional paid-in capital. The fair value of the Option was reflected~~Level 1 financial assets.

Embedded Escalation Protection Plan Derivative Liability in ~~accrued expenses and other current liabilities in our condensed consolidated balance sheet as of December 31, 2021.~~

Sales Contracts

~~Embedded EPP Derivative Liability~~

~~For the three months ended September 30, 2022 and 2021, we recorded~~- We estimate the fair value of the embedded EPP derivatives in certain sales contracts using a Monte Carlo simulation model, which considers various potential electricity price curves over the sales contracts’ terms. We use historical grid prices and ~~recognized an unrealized gain~~available forecasts of ~~$0.1 million and an unrealized loss of $0.2 million, respectively, in gain (loss) on revaluation of embedded~~future electricity prices to estimate future electricity prices. We have classified these derivatives ~~on our condensed consolidated statements of operations.~~as a Level 3 financial liability.

For the nine months ended September 30, 2022 and 2021, we recorded the fair value of the embedded EPP derivatives and recognized an unrealized gain of $0.6 million and an unrealized loss of $1.6 million, respectively, in gain (loss) on revaluation of embedded derivatives on our condensed consolidated statements of operations.

The changes in the Level 3 financial liabilities during the nine months ended September 30, ~~2022,~~2023 were as follows (in thousands):

Embedded EPP Derivative Liability

Liabilities at December 31, ~~2021~~2022

~~6,461~~ 5,895

EPP liability settlement

(3,160)

Changes in fair value

~~(623)~~1,213

Liabilities at September 30, ~~2022~~2023

~~5,838~~3,948

In June 2023, per an EPP agreement with one of our customers, we paid $3.2 million, which was recorded as a reduction to our balance of embedded EPP derivative liability as of September 30, 2023.

Financial Assets and Liabilities and Other Items Not Measured at Fair Value on a Recurring Basis

~~Customer Receivables and~~ Debt Instruments - The ~~fair value for customer financing receivables is based on a discounted cash flow model, whereby the fair value approximates the present value of the receivables (Level 3). The~~ senior secured notes ~~term loans~~ and convertible notes are based on rates currently offered for instruments with similar maturities and terms (Level 3)2). The following table presents the estimated fair values and carrying values of ~~customer receivables and~~ debt instruments (in thousands):

September 30, 2022 December 31, 2021
Net Carrying
Value Fair Value Net Carrying
Value Fair Value

Customer receivables
Customer financing receivable $ — $ — $ 45,269 $ 38,334
Debt instruments
Recourse:
10.25% Senior Secured Notes due March 2027 63,194 59,939 68,968 72,573
2.5% Green Convertible Senior Notes due August 2025 224,340 319,822 222,863 356,822
Non-recourse:
7.5% Term Loan due September 2028 (Note 7) — — 29,006 35,669
6.07% Senior Secured Notes due March 2030 68,899 70,085 73,262 83,251
3.04% Senior Secured Notes due June 2031 125,999 115,294 132,631 137,983


	September 30, 2023			December 31, 2022
	Net Carrying Value		Fair Value	Net Carrying Value		Fair Value



Debt instruments
Recourse:





3% Green Convertible Senior Notes due June 2028	$	614,183	613,298	$	—	—
2.5% Green Convertible Senior Notes due August 2025	226,309		249,665	224,832		309,488

10.25% Senior Secured Notes due March 2027	—		—	60,960		60,472
Non-recourse:




3.04% Senior Secured Notes due June 2031	—		—	125,787		117,028
4.6% Term Loan due March 2026	$	1,483	1,345	$	—	—

6. Balance Sheet Components

Inventories

The components of inventory ~~consist~~consisted of the following (in thousands):


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022

Raw materials	Raw materials	$	156,163	$	80,809	Raw materials	$	238,716	$	165,446
Finished goods	Finished goods	61,376		30,668		Finished goods	183,078		58,288
Work-in-progress	Work-in-progress	37,356		31,893		Work-in-progress	53,855		44,660
		$	254,895	$	143,370		$	475,649	$	268,394

The inventory reserves were ~~$17.6~~$17.8 million and ~~$13.9~~$17.2 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

As of September 30, 2023, the inventory balance was reduced by $2.2 million primarily due to the release of a portion of the grant liability, which was recorded as capitalized payroll expenses in the closing inventory balance. For additional information, please see Part I, Item 1, Note 13 - Commitments and Contingencies, Delaware Economic Development Authority section.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets ~~consist~~consisted of the following (in thousands):

September 30, December 31,
2022 2021

Receivables from employees $ 7,949 $ 5,463
Prepaid hardware and software maintenance 5,079 3,494
Prepaid managed services 4,291 2,480
Tax receivables 3,259 1,518
Prepaid workers compensation 3,114 5,330
Deposits made 1,425 817
Prepaid deferred commissions 794 724
State incentive receivable 214 427
Other prepaid expenses and other current assets 20,364 10,408
$ 46,489 $ 30,661


	September 30,		December 31,
	2023		2022

Receivables from employees	$	10,314	$	6,553
Deferred expenses (Note 16)	9,909		—
Prepaid managed services	5,868		4,405
Prepaid hardware and software maintenance	5,243		4,290
Tax receivables	4,428		3,676
Prepaid workers compensation	3,993		5,536
Advance income tax provision	2,349		783
Prepaid rent	2,060		965
Interest receivable	1,854		556
Deposits made	1,683		1,409
Prepaid deferred commissions	911		1,002
Other prepaid expenses and other current assets	17,631		14,468
	$	66,243	$	43,643

Property, Plant and Equipment, Net

Property, plant and equipment, net ~~consists~~consisted of the following (in thousands):


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022

Energy Servers	Energy Servers	$	669,606	$	674,799	Energy Servers	$	313,866	$	538,912
Machinery and equipment	Machinery and equipment	132,965		110,600		Machinery and equipment	165,814		145,555
Leasehold improvements						Leasehold improvements	107,209		104,528
Construction-in-progress	Construction-in-progress	91,301		43,544		Construction-in-progress	105,787		72,174
Leasehold improvements		68,369		52,936
Building		49,240		48,934
Buildings						Buildings	49,424		49,240
Computers, software and hardware	Computers, software and hardware	24,100		21,276		Computers, software and hardware	26,455		24,608
Furniture and fixtures	Furniture and fixtures	9,123		8,607		Furniture and fixtures	9,842		9,581
		1,044,704		960,696			778,397		944,598
Less: accumulated depreciation	Less: accumulated depreciation	(397,936)		(356,590)		Less: accumulated depreciation	(287,862)		(344,184)
		$	646,768	$	604,106		$	490,535	$	600,414

Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2023 was $14.6 million and $50.3 million, respectively. Depreciation expense related to property, plant and equipment for the three and nine months ended September 30, 2022 was $15.5 million and $46.2 million, respectively. ~~Depreciation expense related to~~

Property, plant and equipment under operating leases by PPA V was $226.0 million and accumulated depreciation for these assets was $92.7 million as of December 31, 2022. There was no property, plant and equipment under operating leases by PPA V as of September 30, 2023. Depreciation expense for property, plant and equipment under operating leases by PPA V (sold in August 2023) and PPA IV (sold in November 2022) was $3.7 million and $10.9 million for the three and nine months ended September 30, ~~2021 was $13.3 million and $40.1 million, respectively.~~

Property, plant and equipment under operating leases by the PPA Entities was $362.0 million and $368.0 million and accumulated depreciation for these assets was $153.8 million and $139.4 million as of September 30, 2022 and December 31, 2021,2023, respectively. Depreciation expense for these assets was $5.8 million and $17.3 million for the three and nine months ended September 30, 2022, respectively. ~~Depreciation expense for these assets was $5.9 million and $17.6 million for the three and nine months ended September 30, 2021, respectively.~~

PPA ~~IIIa~~V Upgrade

In ~~June 2022,~~August 2023, we started a project (the “PPA V Upgrade”, the “PPA V Repowering”) to replace ~~9.8~~37.1 megawatts of ~~second-generation~~ Energy Servers (the “old Energy Servers”) at PPA ~~IIIa Investment Company and Operating Company (“PPA IIIa”)~~V with current generation Energy Servers (the “new Energy Servers”~~) (the “PPA IIIa Upgrade”, the “PPA IIIa Repowering”~~). The replacement was ongoing as of September 30, ~~2022.~~2023. See Note 1110 - Portfolio ~~Financing~~Financings for additional information.

~~Change in Estimate~~

In June 2022, due to the replacement of old Energy Servers as part of the PPA IIIa Repowering, we revised the expected useful life of the old Energy Servers. As a result, the expected useful life of old Energy Servers decreased from 15 years to approximately 0.5 years. We recognized accelerated depreciation of $0.2 million in electricity cost of revenue on the revised carrying amount of the old Energy Servers after impairment loss in our condensed consolidated statements of operations. There is no effect from this change in accounting estimate on future periods.

Other Long-Term Assets

Other long-term assets ~~consist~~consisted of the following (in thousands):


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022

Deferred commissions						Deferred commissions	$	8,901	$	8,320
Long-term lease receivable	Long-term lease receivable	$	8,131	$	7,953	Long-term lease receivable	7,604		8,076
Prepaid insurance		7,969		9,534
Deferred commissions		7,229		7,569
Deposits made	Deposits made	2,694		1,923		Deposits made	2,926		2,672
Deferred expenses (Note 16)						Deferred expenses (Note 16)	1,980		—
Prepaid managed services	Prepaid managed services	2,533		3,010		Prepaid managed services	1,896		2,373
Deferred tax asset	Deferred tax asset	885		954		Deferred tax asset	1,384		1,151
Investments in subsidiaries		—		1,819
Prepaid insurance						Prepaid insurance	—		4,047

Prepaid and other long-term assets	Prepaid and other long-term assets	8,875		8,311		Prepaid and other long-term assets	8,517		13,566
		$	38,316	$	41,073		$	33,208	$	40,205

Accrued Warranty

Accrued warranty liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2023		2022

Product performance	$	15,622	$	16,901
Product warranty	915		431

	$	16,537	$	17,332

Changes in the product warranty and product performance liabilities were as follows (in thousands):





Balances at December 31, 2022	$	17,332
Accrued warranty, net	23,565
Warranty expenditures during the nine-month period	(24,360)
Balances at September 30, 2023	$	16,537

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities ~~consist~~consisted of the following (in thousands):


		September 30,		December 31,			September 30,		December 31,
		2022		2021			2023		2022

Compensation and benefits	Compensation and benefits	$	30,002	$	38,222	Compensation and benefits	$	43,590	$	48,156
General invoice and purchase order accruals						General invoice and purchase order accruals	34,452		44,010
Interest payable						Interest payable	7,919		3,128
Sales-related liabilities	Sales-related liabilities	10,374		6,040		Sales-related liabilities	7,666		7,147
Delaware grant		9,495		—
Accrued installation	Accrued installation	6,032		13,968		Accrued installation	6,094		7,905
Accrued legal expenses	Accrued legal expenses	5,513		1,765		Accrued legal expenses	3,666		4,403
Provision for income tax						Provision for income tax	2,600		1,140
Sales tax liabilities						Sales tax liabilities	2,517		6,172
VAT interim liability						VAT interim liability	2,194		418
Accrued consulting expenses						Accrued consulting expenses	1,869		1,390
Accrued restructuring costs (Note 12)						Accrued restructuring costs (Note 12)	1,172		—
Finance lease liabilities						Finance lease liabilities	1,142		1,024
PPA IV upgrade financing obligations						PPA IV upgrade financing obligations	276		6,076
Delaware grant (Note 13)						Delaware grant (Note 13)	—		9,495
Current portion of derivative liabilities	Current portion of derivative liabilities	3,053		6,059		Current portion of derivative liabilities	—		2,596
Accrued consulting expenses		1,423		1,731
Sales tax liabilities		1,359		1,491
Interest payable		719		2,159

Option to acquire a variable number of shares of Class A Common Stock (Note 5)		—		13,200
Other	Other	34,040		29,503		Other	1,323		1,123
		$	102,010	$	114,138		$	116,480	$	144,183

Preferred Stock

As of September 30, 2023, we had 20,000,000 shares of preferred stock authorized. 13,491,701 of these shares were designated as Series B RCPS and were converted to Class A common stock as of September 23, 2023, as a result of the SK ecoplant Second Tranche Closing. As of December 31, 2022, we had 20,000,000 shares of preferred stock authorized. 10,000,000 of these shares were designated as Series A redeemable convertible preferred stock and were converted to Class A common stock as of November 8, 2022, as a result of the SK ecoplant Initial Investment. For additional information, please see Part I, Item 1, Note 16 - SK ecoplant Strategic Investment.

The preferred stock had $0.0001 par value. There were no shares of preferred stock issued and outstanding as of September 30, 2023 and December 31, 2022.

Conversion of Class B Common Stock

On July 27, 2023, in accordance with our Restated Certificate of Incorporation, each share of our Class B common stock entitled to ten votes per share automatically converted into one share of our Class A common stock entitled to one vote per share.

1918

7. Outstanding Loans and Security Agreements

The following is a summary of our debt as of September 30, ~~2022~~2023 (in thousands, except percentage data):

Unpaid
Principal
Balance Net Carrying Value Interest
Rate Maturity Dates Entity Recourse
Current Long-
Term Total
10.25% Senior Secured Notes due March 2027 $ 63,966 $ 12,792 $ 50,402 $ 63,194 10.25% March 2027 Company Yes
2.5% Green Convertible Senior Notes due August 2025 230,000 — 224,340 224,340 2.5% August 2025 Company Yes
Total recourse debt 293,966 12,792 274,742 287,534
3.04% Senior Secured Notes due June 30, 2031 127,736 10,332 115,667 125,999 3.04% June 2031 PPA V No
6.07% Senior Secured Notes due March 2030 70,492 5,611 64,288 69,899 6.07% March 2030 PPA IV No
Total non-recourse debt 198,228 15,943 179,955 195,898
Total debt $ 492,194 $ 28,735 $ 454,697 $ 483,432


	Unpaid Principal Balance		Net Carrying Value						Interest Rate	Maturity Dates	Entity
			Current		Long- Term		Total

3% Green Convertible Senior Notes due June 2028	632,500		—		614,183		614,183		3.0%	June 2028	Company
2.5% Green Convertible Senior Notes due August 2025	230,000		—		226,309		226,309		2.5%	August 2025	Company
Total recourse debt	862,500		—		840,492		840,492

4.6% Term Loan due March 2026	1,483		—		1,483		1,483		4.6%	March 2026	Korean Joint Venture
Total non-recourse debt	1,483		—		1,483		1,483
Total debt	$	863,983	$	—	$	841,975	$	841,975

The following is a summary of our debt as of December 31, ~~2021~~2022 (in thousands, except percentage data):


		Unpaid Principal Balance		Net Carrying Value							Interest Rate	Maturity Dates	Entity	Recourse		Unpaid Principal Balance			Net Carrying Value											Interest Rate	Maturity Dates		Entity
				Current		Long- Term		Total		Interest Rate					Unpaid Principal Balance				Long- Term			Total			Interest Rate			Maturity Dates

10.25% Senior Secured Notes due March 2027	10.25% Senior Secured Notes due March 2027	$	70,000	$	8,348	$	60,620	$	68,968			10.25%	March 2027	Company				Yes	10.25% Senior Secured Notes due March 2027		$	61,653		$	12,716		$	48,244	$	60,960		10.25%		March 2027	Company
2.5% Green Convertible Senior Notes due August 2025	2.5% Green Convertible Senior Notes due August 2025	230,000		—		222,863		222,863			2.5%	August 2025	Company	Yes	2.5% Green Convertible Senior Notes due August 2025	230,000			—			224,832			224,832					2.5%	August 2025		Company
Total recourse debt	Total recourse debt	300,000		8,348		283,483		291,831							Total recourse debt	291,653			12,716			273,076			285,792
3.04% Senior Secured Notes due June 30, 2031	3.04% Senior Secured Notes due June 30, 2031	134,644		9,376		123,255		132,631			3.04%	June 2031	PPA V	No	3.04% Senior Secured Notes due June 30, 2031	127,430			13,307			112,480			125,787					3.04%	June 2031		PPA V
7.5% Term Loan due September 2028		31,070		3,436		25,570		29,006			7.5%	September 2028	PPA IIIa	No
6.07% Senior Secured Notes due March 2030		73,955		4,671		68,591		73,262			6.07%	March 2030	PPA IV	No

Total non-recourse debt	Total non-recourse debt	239,669		17,483		217,416		234,899							Total non-recourse debt	127,430			13,307			112,480			125,787
Total debt	Total debt	$	539,669	$	25,831	$	500,899	$	526,730						Total debt	$	419,083		$	26,023		$	385,556		$	411,579

Recourse debt refers to debt that we have an obligation to pay. Non-recourse debt refers to debt that is recourse to only our subsidiaries. The differences between the unpaid principal balances and the net carrying values apply to deferred financing costs. We and all of our subsidiaries were in compliance with all financial covenants as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

Recourse Debt Facilities

3% Green Convertible Senior Notes due June 2028 - On May 16, 2023, we issued the 3% Green Notes in an aggregate principal amount of $632.5 million due on June 1, 2028, unless earlier repurchased, redeemed or converted, less an initial purchasers’ discount of $15.8 million and other issuance costs of $4.0 million (together, the “Transaction Costs”), resulting in net proceeds of $612.7 million. The 3% Green Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of May 16, 2023, between us and U.S. Bank Trust Company, National Association, as Trustee, in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”).

Pursuant to the purchase agreement among the Company and the representatives of the initial purchasers of the 3% Green Notes, the Company granted the initial purchasers an option to purchase up to an additional $82.5 million aggregate principal amount of the 3% Green Notes (the “Greenshoe Option”). The 3% Green Notes issued on May 16, 2023, included $82.5 million aggregate principal amount pursuant to the full exercise by the initial purchasers of the Greenshoe Option.

The 3% Green Notes are senior, unsecured obligations accruing interest at a rate of 3% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2023.

We may not redeem the 3% Green Notes prior to June 5, 2026, subject to a partial redemption limitation. We may elect to redeem, at face value, all or any portion of the 3% Green Notes at any time, and from time to time, on or after June 5, 2026 and on or before the forty-sixth scheduled trading day immediately before the maturity date, provided the share price for our Class A common stock exceeds 130% of the conversion price at redemption.

Before March 1, 2028, the noteholders have the right to convert their 3% Green Notes only upon the occurrence of certain events, including satisfaction of a condition relating to the closing price of our common stock (the “Closing Price Condition”) or the trading price of the 3% Green Notes (the “Trading Price Condition”), a redemption event, or other specified corporate events. If the Closing Price Condition is met on at least 20 (whether or not consecutive) of the last 30 consecutive trading days in any calendar quarter, and only during such calendar quarter, the noteholders may convert their 3% Green Notes at any time during the immediately following quarter, commencing after the calendar quarter ending on September 30, 2023, subject to partial redemption limitation. Subject to the Trading Price Condition, the noteholders may convert their 3% Green Notes during the five business days immediately after any five consecutive trading day period in which the trading price per $1,000 principal amount of the 3% Green Notes, as determined following a request by a holder of the 3% Green Notes, for each day of that period is less than 98% of the product of the closing price of our common stock and the then applicable conversion rate. From and after March 1, 2028, the noteholders may convert their 3% Green Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Should the noteholders elect to convert their 3% Green Notes, we may elect to settle the conversion by paying or delivering, as applicable, cash, shares of our Class A common stock, $0.0001 par value per share, or a combination thereof, at our election.

The initial conversion rate is 53.0427 shares of Class A common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $18.85 per share of Class A common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. Also, we may increase the conversion rate at any time if our Board of Directors determines it is in the best interests of the Company or to avoid or diminish income tax to holders of common stock. In addition, if certain corporate events that constitute a Make-Whole Fundamental Change, as defined below, occur, then the conversion rate applicable to the conversion of the 3% Green Notes may, in certain circumstances, be increased by up to 22.5430 shares of Class A common stock per $1,000 principal amount of notes for a specified period of time. At September 30, 2023, the maximum number of shares into which the 3% Green Notes could have been potentially converted if the conversion features were triggered was 47,807,955 shares of Class A common stock.

According to the Indenture, a Make-Whole Fundamental Change means (i) a Fundamental Change, that includes certain change-of-control events relating to us, certain business combination transactions involving us and certain delisting events with respect to our Class A common stock, or (ii) the sending of a redemption notice with respect to the 3% Green Notes.

The 3% Green Notes contain certain customary provisions relating to the occurrence of Events of Default, as defined in the Indenture. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to us occurs, then the principal amount of, and all accrued and unpaid interest on, all of the 3% Green Notes then outstanding will immediately become due and payable without any further action or notice by any person. However, notwithstanding the foregoing, we may elect, at our option, that the sole remedy for an Event of Default relating to certain failures by us to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the 3% Green Notes for up to 180 days at a specified rate per annum not exceeding 0.50% on the principal amount of the 3% Green Notes.

The Transaction Costs were recorded as debt issuance costs and presented a reduction to the 3% Green Notes on our condensed consolidated balance sheets and are amortized to interest expense at an effective interest rate of 3.8%.

Total interest expense recognized related to the 3% Green Notes for the three and nine months ended September 30, 2023 was $5.7 million and $8.7 million, respectively, and was comprised of contractual interest expense of $4.7 million and $7.2 million, respectively, and amortization of the initial purchasers’ discount and other issuance costs of $1.0 million and $1.5 million, respectively. We have not recognized any special interest expense related to the 3% Green Notes to date. The amount of unamortized debt issuance costs as of September 30, 2023, was $18.3 million.

Although the 3% Green Notes contain embedded conversion features, we account for the 3% Green Notes in its entirety as a liability. As of September 30, 2023, the net carrying value of the 3% Green Notes was classified as a long-term liability in our condensed consolidated balance sheets.

Capped Calls - On May 11, 2023, in connection with the pricing of the 3% Green Notes, and on May 15, 2023, in connection with initial purchasers’ exercise of the Greenshoe Option, we entered into privately negotiated capped call transactions (the “Capped Calls”) with certain counterparties (the “Option Counterparties”). The Capped Calls cover, subject to customary anti-dilution adjustments substantially similar to those applicable to the 3% Green Notes, the aggregate number of shares of our Class A common stock that initially underlie the 3% Green Notes, and are expected generally to reduce potential dilution to holders of our common stock upon any conversion of the 3% Green Notes and at our election (subject to certain

conditions) offset any cash payments we would be required to make in excess of the principal amount of converted 3% Green Notes.

The Capped Calls expire on June 1, 2028 and are exercisable only at maturity, but may be early terminated in various circumstances, including if the 3% Green Notes are early converted or repurchased. The default settlement method for the Capped Calls is net share settlement. However, we may elect to settle the Capped Calls in cash.

The Capped Calls have an initial strike price of approximately $18.85 per share of Class A common stock, subject to certain adjustments. The strike price of $18.85 corresponds to the initial conversion price of the 3% Green Notes. The number of shares underlying the Capped Calls is 33,549,508 shares of Class A common stock. The cap price of the Capped Calls is initially $26.46 per share of Class A common stock, which represents a premium of 100% over the last reported sale price of our common stock on May 11, 2023.

The Capped Calls are freestanding financial instruments. We used a portion of the proceeds from the issuance of the 3% Green Notes to pay for the Capped Calls’ premium. As the Capped Calls meet certain accounting criteria, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $54.5 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital on our condensed consolidated balance sheets and will not be remeasured.

Please refer to Part II, Item 8, Note 7 - Outstanding Loans and Security Agreements in our Annual Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, for discussion of our 10.25% Senior Secured Notes due March 2027 and 2.5% Green Convertible Senior Notes due August 2025.

~~Interest expense~~10.25% Senior Secured Notes due March 2027 - The outstanding unpaid principal balance of $57.6 million on the 10.25% Senior Secured Notes due March 2027 was called and retired at 104% during the nine months ended September 30, 2023. The 4% premium of $2.3 million and unpaid accrued interest of $1.0 million were included in the final payment to the noteholders. We recognized loss on extinguishment of debt of $2.9 million as a result of redemption of the 10.25% Senior Secured Notes.

The current and non-current balance of the outstanding unpaid principal of the 10.25% Senior Secured Notes was $12.7 million and $48.9 million as of December 31, 2022, respectively.

Interest on the 10.25% Senior Secured Notes for the nine months ended September 30, 2023 was $2.7 million, including $0.1 million amortization of issuance costs. Interest on the 10.25% Senior Secured Notes for the three and nine months ended September 30, 2022 was $1.9 million and $3.8 million, respectively, including amortization of issuance costs of $0.1 million and $0.2 million, respectively.

Interest on the 2.5% Green Notes for the three and nine months ended September 30, 2023 was $1.9 million and $5.8 million, respectively, including amortization of issuance costs of $0.5 million and $1.5 million, respectively. Interest on the 2.5% Green Notes for the three and nine months ended September 30, 2022 was $1.9 million and $5.8 million, respectively, including amortization of issuance costs of $0.5 million and $1.5 million, respectively. Interest expense on the Green Notes for the three and nine months ended September 30, 2021, was $1.9 million and $5.8 million, respectively, including amortization of issuance costs of $0.5 million and $1.5 million, respectively.

Non-recourse Debt Facilities

Please refer to Part II, Item 8, Note 7 - Outstanding Loans and Security Agreements in our Annual Form 10-K for the fiscal year ended December 31, ~~2021~~2022 for discussion of our non-recourse debt.

~~Both note purchase and credit agreements require us to maintain a debt service reserve, the balances of which are presented below (in millions):~~

September 30, December 31,
2022 2021

3.04% Senior Secured Notes due June 30, 2031 $ 8.0 $ 8.0
7.5% Term Loan due September 2028 — 3.6
6.07% Senior Secured Notes due March 2030 9.5 9.1

~~These debt service balances are included as part of long-term restricted cash in the condensed consolidated balance sheets. Both notes and the loan are secured by assets of respective PPAs.~~

~~7.5% Term Loan~~3.04% Senior Secured Notes due ~~September 2028~~June 2031 - On ~~June 14, 2022,~~August 24, 2023, as part of the PPA ~~IIIa~~V Upgrade, we paid off the outstanding balance and related accrued interest of ~~$30.2~~$118.5 million and ~~$0.4~~$0.5 million, respectively, of our 3.04% Senior Secured Notes due June 2031, and recognized a loss on extinguishment of debt of ~~$4.2 million.~~$1.4 million (for additional information, please see Note 10 - Portfolio Financings). The debt service reserve of ~~$3.6~~$8.6 million was reclassified from restricted cash to cash and cash equivalents at the time of extinguishment of debt.

Repayment Schedule and Interest Expense

The following table presents details of our outstanding loan principal repayment schedule as of September 30, ~~2022~~2023 (in thousands):


Remainder of 2022		$	6,755
2023		28,503
Remainder of 2023				Remainder of 2023	$	—
2024	2024	31,872		2024	—
2025	2025	265,494		2025	230,000
2026	2026	39,078		2026	1,483
2027				2027	—
Thereafter	Thereafter	120,492		Thereafter	632,500
		$	492,194		$	863,983

Interest expense of ~~$13.1~~$68.0 million and ~~$14.5~~$93.7 million for the three and nine months ended September 30, ~~2022 and 2021,~~2023, respectively, was recorded in interest expense on the condensed consolidated statements of operations. Interest expense ~~of $41.0 million and $43.8 million~~ for the three and nine months ended September 30, ~~2022~~2023 included $52.8 million as a result of the SK ecoplant Second Tranche Closing. For additional information, please see Part I, Item 1, Note 16 - SK ecoplant Strategic Investment. Interest expense of $13.1 million and ~~2021,~~$41.0 million for the three and nine months ended September 30, 2022, respectively, was recorded in interest expense on the condensed consolidated statements of operations.

8. ~~Derivative Financial Instruments~~Leases

~~Cash Flow Hedges~~Facilities, Energy Servers, and Vehicles

As of December 31, 2021, we had settled our interest rate swaps, which had been designated as cash flow hedges. There were no cash flow hedges as of September 30, 2022. The changes in fair value of the interest rate swaps designated as cash flow hedges and the amounts recognized in accumulated other comprehensive loss and in earnings were as follows duringFor the three and nine months ended September 30, ~~2022~~2023, rent expense for all occupied facilities was $5.7 million and ~~2021 (in thousands):~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Beginning balance $ — $ 12,651 $ — $ 15,989
Loss (gain) recognized in other comprehensive loss — (264) — (2,548)
Amounts reclassified from other comprehensive loss to earnings — (499) — (1,483)
Net loss (gain) recognized in other comprehensive loss — (763) — (4,031)
Gain recognized in earnings — (35) — (105)
Ending balance $ — $ 11,853 $ — $ 11,853

~~Embedded EPP Derivatives in Sales Contracts~~

~~For information on embedded EPP Derivatives in sales contracts, see Part II, Item 8, Note 8 -~~ ~~Derivative Financial Instruments~~ ~~in our Annual Report on form 10-K for the fiscal year ended December 31, 2021.~~

~~9. Leases~~

~~Facilities, Energy Servers, and Vehicles~~

$17.0 million, respectively. For the three and nine months ended September 30, 2022, rent expense for all occupied facilities was $5.0 million and $14.2 million, respectively. ~~For the three and nine months ended September 30, 2021, rent expense for all occupied facilities was $4.4 million and $11.4 million, respectively.~~

Operating and ~~finance~~financing lease right-of-use assets and lease liabilities for facilities, Energy Servers, and vehicles as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows (in thousands):


							September 30,		December 31,
		September 30,		December 31,			2023		2022
		2022		2021
Operating Leases:	Operating Leases:					Operating Leases:
Operating lease right-of-use assets, net 1, 2	Operating lease right-of-use assets, net 1, 2	$	114,053	$	106,660	Operating lease right-of-use assets, net 1, 2	$	127,973	$	126,955

Current operating lease liabilities	Current operating lease liabilities	(12,671)		(13,101)		Current operating lease liabilities	(16,666)		(16,227)
Non-current operating lease liabilities	Non-current operating lease liabilities	(122,412)		(106,187)		Non-current operating lease liabilities	(133,602)		(132,363)
Total operating lease liabilities	Total operating lease liabilities	$	(135,083)	$	(119,288)	Total operating lease liabilities	$	(150,268)	$	(148,590)

Finance Leases:	Finance Leases:					Finance Leases:
Finance lease right-of-use assets, net 2, 3, 4	Finance lease right-of-use assets, net 2, 3, 4	$	2,692	$	2,944	Finance lease right-of-use assets, net 2, 3, 4	$	2,899	$	2,824

Current finance lease liabilities		(988)		(863)
Non-current finance lease liabilities		(1,899)		(2,157)
Current finance lease liabilities5						Current finance lease liabilities5	(1,142)		(1,024)
Non-current finance lease liabilities6						Non-current finance lease liabilities6	(1,956)		(1,971)
Total finance lease liabilities	Total finance lease liabilities	$	(2,887)	$	(3,020)	Total finance lease liabilities	$	(3,098)	$	(2,995)
Total lease liabilities	Total lease liabilities	$	(137,970)	$	(122,308)	Total lease liabilities	$	(153,366)	$	(151,585)

1 These assets primarily include leases for facilities, Energy Servers, and vehicles.

2 Net of accumulated amortization.

3 These assets primarily include leases for vehicles.

4 Included in property, plant and equipment, net in the condensed consolidated balance ~~sheet.~~sheets.

5 Included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

6 Included in other long-term liabilities in the condensed consolidated balance sheets.

The components of our facilities, Energy Servers, and ~~vehicles'~~vehicles’ lease costs for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 were as follows (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Operating lease costs $ 6,097 $ 3,925 $ 17,962 $ 10,620
Finance lease costs:
Amortization of finance lease right-of-use assets 230 214 750 1,096
Interest expense for finance lease liabilities 53 51 160 296
Total finance lease costs 283 265 910 1,392
Short-term lease costs 538 625 699 951
Total lease costs $ 6,918 $ 4,815 $ 19,571 $ 12,963


	Three Months Ended September 30,			Nine Months Ended September 30,
		2023		2022		2023		2022

Operating lease costs		$	8,408	$	6,097	$	24,373	$	17,962
Financing lease costs:
Amortization of right-of-use assets		294		230		689		750
Interest on lease liabilities		72		53		203		160
Total financing lease costs		366		283		892		910
Short-term lease costs		384		538		1,561		699
Total lease costs		$	9,158	$	6,918	$	26,826	$	19,571

Weighted average remaining lease terms and discount rates for our facilities, Energy Servers and vehicles as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows:

September 30, December 31,
2022 2021
Weighted average remaining lease term:
Operating leases 9.1 years 8.9 years
Finance leases 3.1 years 3.5 years
Weighted average discount rate:
Operating leases 10.0 % 9.6 %
Finance leases 7.6 % 7.6 %


	September 30,		December 31,
	2023		2022

Weighted average remaining lease term:
Operating leases	7.9 years		8.6 years
Finance leases	3.4 years		3.3 years
Weighted average discount rate:
Operating leases	10.4	%	10.3	%
Finance leases	9.3	%	6.9	%

Future lease payments under lease agreements for our facilities, Energy Servers and vehicles as of September 30, ~~2022~~2023 were as follows (in thousands):

Operating Leases Finance Leases
Remainder of 2022 $ 6,365 $ 281
2023 24,688 1,121
2024 23,028 948
2025 23,504 461
2026 23,332 222
Thereafter 54,170 73
Total minimum lease payments 155,087 3,106
Less: amounts representing interest or imputed interest (20,004) (219)
Present value of lease liabilities $ 135,083 $ 2,887


	Operating Leases		Finance Leases

Remainder of 2023	$	8,513	$	357
2024	29,803		1,289
2025	29,863		839
2026	29,769		598
2027	28,500		412
Thereafter	99,736		98
Total minimum lease payments	226,184		3,593
Less: amounts representing interest or imputed interest	(75,916)		(495)
Present value of lease liabilities	$	150,268	$	3,098

Managed Services and Portfolio Financings Through PPA Entities

Managed Services - We recognized $15.8 million of product revenue, $4.8 million of installation revenue, $2.7 million of financing obligations, and $9.3 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the nine months ended September 30, 2023. There were no successful sale and leaseback transactions for the three months ended September 30, 2023.

We recognized $0.9 million of product revenue, $0.6 million of installation revenue, $0.3 million of financing obligations, and $0.6 million of right-of-use assets and lease liabilities from successful sale and leaseback transactions for the three and nine months ended September 30, 2022.

The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2023 was $2.6 million and $7.0 million, respectively. The recognized lease expense from successful sale and leaseback transactions for the three and nine months ended September 30, 2022 was $1.3 million and $3.9 million, respectively.

At September 30, ~~2022,~~2023, future lease payments under the Managed Services Agreements financing obligations were as follows (in thousands):


		Financing Obligations			Financing Obligations
Remainder of 2022		$	10,889
2023		44,124

Remainder of 2023				Remainder of 2023	$	11,466
2024	2024	42,051		2024	43,368
2025	2025	41,025		2025	42,358
2026	2026	36,426		2026	37,778
2027				2027	21,441
Thereafter	Thereafter	55,508		Thereafter	37,237
Total minimum lease payments	Total minimum lease payments	230,023		Total minimum lease payments	193,648
Less: imputed interest	Less: imputed interest	(128,150)		Less: imputed interest	(103,046)
Present value of net minimum lease payments	Present value of net minimum lease payments	101,873		Present value of net minimum lease payments	90,602
Less: current financing obligations	Less: current financing obligations	(16,682)		Less: current financing obligations	(39,093)
Long-term financing obligations	Long-term financing obligations	$	85,191	Long-term financing obligations	$	51,509

The long-term financing obligations, as reflected in our condensed consolidated balance sheets, were ~~$443.7~~$410.4 million and ~~$461.9~~$442.1 million as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. ~~The~~We expect the difference between these obligations and the principal obligations in the table above ~~will~~to be offset against the carrying value of the related Energy Servers at the end of the lease and the remainder recognized as a gain at that point.

Portfolio Financings through PPA Entities

~~The components of our aggregate net investment in sales-type leases~~- Customer arrangements entered into prior to January 1, 2020 under ~~our Portfolio Financings through PPA entities consisted of the following (in thousands):~~

September 30, December 31,
2022 2021
Lease payment receivables, net1
$ — $ 44,378
Estimated residual value of leased assets (unguaranteed) — 890
Net investment in sales-type leases — 45,268
Less: current portion — (5,784)
Non-current portion of net investment in sales-type leases $ — $ 39,484

1 ~~Net of current estimated credit losses of approximately $0.1 million as of December 31, 2021.~~

~~As of September 30, 2022, there was no net investment in sales-type leases as a result of PPA IIIa Repowering. Please refer to Note 11 -~~ ~~Portfolio Financing~~ ~~for details.~~

~~As of September 30, 2022, future estimated operating minimum lease payments we expect to receive from~~ Portfolio Financing arrangements through a PPA ~~Entities~~entity that qualified as leases were accounted for as ~~follows (in thousands):~~

Operating Leases
Remainder of 2022 $ 9,582
2023 37,608
2024 40,067
2025 42,589
2026 43,761
Thereafter 197,868
Total minimum lease payments $ 371,475
either sales-type leases or operating leases. Since January 1, 2020, we have not entered into any new PPAs with customers under such arrangements.

In August 2023, we sold our PPA entity, PPA V. For additional information, please see Part I, Item 1, Note 10 - Portfolio Financings.

~~10.~~

9. Stock-Based Compensation ~~Expense~~ and Employee Benefit Plans

Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense in the condensed consolidated statements of operations (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Cost of revenue	Cost of revenue	$	4,982	$	2,945	$	13,609	$	9,749	Cost of revenue	$	5,581	$	4,982	$	14,809	$	13,609
Research and development	Research and development	4,818		5,678		25,113		15,876		Research and development	5,585		4,818		21,673		25,113
Sales and marketing	Sales and marketing	3,948		4,391		13,528		12,486		Sales and marketing	3,015		3,948		15,089		13,528
General and administrative	General and administrative	10,283		7,952		30,688		19,198		General and administrative	7,383		10,283		28,025		30,688
		$	24,031	$	20,966	$	82,938	$	57,309		$	21,564	$	24,031	$	79,596	$	82,938

Stock Option Activity

The following table summarizes the stock option activity under our stock plans during the reporting period:

Outstanding Options
Number of
Shares Weighted
Average
Exercise
Price Remaining
Contractual
Life (Years) Aggregate
Intrinsic
Value
(in thousands)
Balances at December 31, 2021 10,737,295 $ 21.23 5.2 $ 60,304
Exercised (468,821) 7.52
Forfeited (42,742) 6.97
Expired (1,229,091) 30.38
Balances at September 30, 2022 8,996,641 20.77 4.8 45,054
Vested and expected to vest at September 30, 2022 8,985,005 20.78 4.8 44,901
Exercisable at September 30, 2022 8,598,209 $ 21.46 4.7 39,364


	Outstanding Options
	Number of Shares	Weighted Average Exercise Price		Remaining Contractual Life (Years)	Aggregate Intrinsic Value
	(in thousands, except weighted average exercise price and remaining contractual life)
Balances at December 31, 2022	8,748,309	$	20.70	4.6	$	40,532

Exercised	(332,293)	7.94

Expired	(541,302)	26.95
Balances at September 30, 2023	7,874,714	20.81		3.8	17,890
Vested and expected to vest at September 30, 2023	7,873,962	20.81		3.8	17,885
Exercisable at September 30, 2023	7,844,713	$	20.86	3.8	$	17,707

Stock Options - ~~During~~For the three and nine months ended September 30, 2023, we recognized $0.1 million and $0.3 million of stock-based compensation costs for stock options, respectively. For the three and nine months ended September 30, 2022, we recognized $1.2 million and $6.7 million of stock-based compensation expense for stock options, respectively. ~~During the three and nine months ended September 30, 2021, we recognized $2.7 million and $10.0 million of stock-based compensation expense for stock options, respectively.~~

We did not grant options in the three and nine months ended September 30, ~~2022~~2023 and ~~2021.~~2022.

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had unrecognized compensation ~~expense~~costs related to unvested stock options of ~~$0.8~~$0.1 million and ~~$6.2~~$0.4 million, respectively. This ~~expense~~cost is expected to be recognized over the remaining weighted-average period of 0.5 years and 0.9 years, respectively. Cash received from stock options exercised totaled ~~$3.6~~$1.1 million and ~~$62.1~~$2.6 million for the three and nine months ended September 30, ~~2022~~2023, respectively. Cash received from stock options exercised totaled $2.2 million and ~~2021,~~$3.6 million for the three and nine months ended September 30, 2022, respectively.

Stock Award Activity

A summary of our stock awards activity and related information is as follows:


		Number of Awards Outstanding	Weighted Average Grant Date Fair Value			Number of Awards Outstanding	Weighted Average Grant Date Fair Value

Unvested Balance at December 31, 2021		8,367,664	$	20.52
Unvested Balance at December 31, 2022					Unvested Balance at December 31, 2022	9,549,035	$	19.99
Granted	Granted	4,945,001	19.69		Granted	4,814,465	18.37
Vested	Vested	(2,328,713)	17.59		Vested	(3,496,491)	18.87
Forfeited	Forfeited	(900,629)	21.76		Forfeited	(1,428,026)	21.44
Unvested Balance at September 30, 2022		10,083,323	19.99
Unvested Balance at September 30, 2023					Unvested Balance at September 30, 2023	9,438,983	$	19.36

Stock Awards - The estimated fair value of restricted stock units (“RSUs”) and ~~performance~~performance-based stock units (“PSUs”) is based on the fair value of our Class A common stock on the date of grant. ~~During~~For the three and nine months ended September 30, 2023, we recognized $19.3 million and $65.0 million of stock-based compensation costs for stock awards, respectively. For the three and nine months ended September 30, 2022, we recognized $18.4 million and $64.4 million of stock-based compensation expense for stock awards, respectively. ~~During the three and nine months ended September 30, 2021, we recognized $15.8 million and $40.6 million of stock-based compensation expense for stock awards, respectively.~~

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$155.2~~$129.3 million and ~~$114.9~~$135.7 million of unrecognized stock-based compensation expense related to unvested stock awards, expected to be recognized over a weighted average period of ~~2.1~~2.0 years and ~~2.3~~1.9 years, respectively.

Executive Awards

On February 15, 2023 and July 11, 2023, the Company granted RSU and PSU awards (the “2023 Executive Awards”) to certain executive staff pursuant to the 2018 Equity Incentive Plan. The RSUs have time-based vesting schedules, started vesting on February 15, 2023 and shall vest over a three year period. The PSUs which started vesting on February 15, 2023 have either a three-year or one-year cliff vesting period, and the PSUs which started vesting on July 11, 2023, cliff vest on February 15, 2024. The PSUs will vest based on a combination of time and achievement against performance metrics targets assuming continued employment and service through each vesting date. Stock-based compensation costs associated with the 2023 Executive Awards are recognized over the service period as we evaluate the probability of the achievement of the performance conditions.

The following table presents the stock activity ~~for the nine months ended September 30, 2022,~~ and the total number of shares available for grant under our stock ~~plans as of September 30, 2022:~~plans:


						Plan Shares Available for Grant

Balances at December 31, ~~2021~~2022						~~24,146,784~~28,340,641
Added to plan						~~8,384,460~~8,948,255
Granted						~~(4,981,732)~~(4,734,700)

Cancelled/~~Forfeited~~forfeited						~~2,062,177~~1,899,563
Expired						~~(1,196,565)~~(504,347)
Balances at September 30, ~~2022~~2023						~~28,415,124~~33,949,412

2018 Employee Stock Purchase Plan (“2018 ESPP”)

For the three and nine months ended September 30, 2023, we recognized $0.1 million and $12.5 million of stock-based compensation costs for the 2018 ESPP, respectively. For the three and nine months ended September 30, 2022, we recognized $4.3 million and $11.2 million of stock-based compensation costs for the 2018 ESPP, respectively.

We issued 426,170 and 875,695 shares in the three and nine months ended September 30, 2023, respectively. We issued 339,055 and 759,744 shares in the three and nine months ended September 30, 2022, respectively.

During the nine months ended September 30, ~~2022~~2023 and 2021, we recognized $11.2 million and $4.5 million of stock-based compensation expense for the 2018 Employee Stock Purchase Plan, respectively. We issued 759,744 and 1,945,305 shares in the nine months ended September 30, 2022, ~~and 2021, respectively. During the nine months ended September 30, 2022 and 2021,~~ we added an additional 2,239,563 and 12,055,792 shares, respectively, and ~~1,902,572 shares, respectively. There~~there were ~~13,840,716 shares~~15,204,584 and ~~2,544,668~~13,840,716 shares available for issuance as of September 30, ~~2022~~2023 and ~~2021,~~December 31, 2022, respectively.

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$10.4~~$12.1 million and ~~$9.8~~$12.0 million of unrecognized stock-based compensation ~~expense,~~costs, respectively, expected to be recognized over a weighted average period of 1.1 years and ~~0.5~~0.6 years, respectively.

~~11.~~10. Portfolio Financings

Overview

We have developed various financing options that enable ~~customers'~~customers’ use of the Energy Servers through third-party ownership financing arrangements. For additional information on these financing options, see our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

PPA ~~IIIa~~V Repowering of Energy Servers

PPA ~~IIIa~~V was established in ~~2012~~2015 and we, through a special purpose subsidiary (the “Project Company”), had previously entered into certain agreements for the purpose of developing, financing, owning, operating, maintaining and managing a portfolio of ~~9.8~~37.1 megawatts of Energy Servers.

On ~~March 31, 2022,~~August 10, 2023, we acquired all of Solar TC Corp’s (“Intel”) interest in PPA V, as set forth in the Purchase and Sale Agreement (the “PPA V Buyout”). The aggregate purchase price of the transaction amounted to $6.9 million. After the acquisition, PPA V became wholly owned by us.

The change in our ownership interest in PPA V was accounted for as an equity transaction in accordance with ASC 810 Consolidation. The carrying amount of the noncontrolling interest was eliminated to reflect the change in our ownership interest in PPA V, and the difference between the fair value of the consideration paid and the carrying amount of the noncontrolling interest immediately prior to the PPA V Buyout of $11.5 million was recognized as additional paid-in capital in our condensed consolidated statements of stockholders’ equity (deficit).

On August 24, 2023, we entered into athe Membership Interest Purchase Agreement ~~where we bought out the equity interest of the third-party investor, wherein~~(the “MIPA”) with Generate C&I Warehouse, LLC (the “Financier”). Following the PPA ~~IIIa became wholly owned by us (the “Buyout”).~~

~~Following the~~V Buyout and prior to ~~June 14, 2022,~~signing the MIPA, we repaid all of the outstanding debt of the Project Company of ~~$30.6~~$119.0 million, including accrued interest of $0.5 million, and recognized a loss on extinguishment of debt in an amount of ~~$4.2~~$1.4 million, ~~which includes~~represented in its entirety by the ~~write-off~~derecognition of the related debt ~~discount related to warrants of $1.8 million and a make-whole payment of $2.4 million associated with the debt extinguishment. Refer to~~issuance costs. For additional information, please see Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements, Non-recourse Debt Facilitiessection.

On ~~June 14, 2022,~~August 25, 2023, we sold our 100% interest in the Project Company to ~~Generate C&I Warehouse, LLC (“Generate”)~~the Financier through ~~a Membership Interest Purchase Agreement (“MIPA”).~~the MIPA. Simultaneously, we entered into an agreement with the Project Company to upgrade the ~~old 9.8~~37.1 megawatts of old Energy Servers ~~(the “old Energy Servers”)~~ by replacing them with ~~a newer generation of~~the new Energy Servers ~~(“new Energy Servers”)~~ and ~~providing~~to provide related installation services, which was financed by ~~Generate~~the Financier (the “EPC Agreement”). ~~The old Energy Servers will be removed prior to installing the new Energy Servers, whereby upon completion of installation the old Energy Servers will be returned to Bloom.~~ We also amended and restated our operations and maintenance agreement with the Project Company to cover all new Energy Servers and old Energy Servers prior to their upgrade (“the O&M Agreement”). The operations and maintenance fees under the O&M Agreement are paid on a fixed dollar per kilowatt basis.

Certain power purchase agreements within the PPA IIIa portfolio were classified as sales-type leases under ASC 840, while some were classified as operating leases. The Company elected the practical expedient package with the adoption of ASC 842, which allowed the Company to carry forward the lease classification upon adoption of ASC 842 on January 1, 2020. The leases were modified prior to the sale of the PPA IIIa to Generate. Such modified leases were reassessed and determined to not be leases under ASC 842 because customers have no control over the identified assets. Accordingly, on the date of modification, the customer financing receivables were derecognized and recognized as property, plant, and equipment (“PPA IIIa PP&E”).

Due to our repurchase option on the old Energy Servers, the Company concluded there was no transfer of control of the old Energy Servers upon sale of the membership interest to ~~Generate.~~the Financier. Accordingly, ~~the Company~~we continued to recognize the old Energy Servers, despite the legal ownership of such assets having been transferred under the MIPA. ~~Upon reclassification of the lease assets to PP&E, the Company~~We assessed the recorded assets for impairment. The carrying amount of the PPA ~~IIIa PP&E~~V property. plant and equipment was determined to be not recoverable as the net undiscounted cash flows are less than the carrying amounts for PPA ~~IIIa PP&E.~~V property. plant and equipment. Therefore, we recognized the asset impairment charge as electricity cost, consistent with our depreciation expense classification for property, plant and equipment under leases.

The PPA ~~IIIa~~V Upgrade was in progress as of September 30, ~~2022~~2023 and resulted in the following summarized impacts on our condensed consolidated balance sheet as of September 30, ~~2022:~~2023: (i) cash and cash equivalents ~~increased~~decreased by ~~$17.7~~$62.4 million ~~mainly~~primarily due to ~~$54.7~~a $119.0 million ~~cash receipts~~repayment of outstanding debt and related accrued interest, partially offset by $60.3 million from the sale of the new Energy Servers to the Project Company, ~~offset by $30.6 million for the repayment of outstanding debt,~~ (ii) ~~both customer financing receivables, current and non-current, and~~ property plant and equipment, net decreased by ~~$5.9~~$124.0 million ~~$36.9 million and $2.2 million, respectively,~~ due to the impairment of ~~$44.8~~the old Energy Servers of $123.7 million and accelerated depreciation of ~~$0.2~~$0.3 million of the ~~existing~~ old Energy Servers (we revised the expected useful life of the old Energy Servers from 157.5 years to approximately ~~0.5~~0.3 years which resulted in recognized accelerated depreciation of ~~$0.2~~$0.3 million recorded in electricity cost of ~~revenue (see Note 6))~~revenue), (iii) contract assets increased by ~~$5.0~~$116.5 million and inventories decreased by $70.0 million, (iv) ~~inventories~~deferred revenue and ~~deferred cost of revenue~~customer deposits, current and long-term, increased by $12.4 million, (v) restricted cash, current and long-term, decreased by ~~$24.1~~$8.7 million, (vi) accounts receivable, net decreased by $3.3 million, (vii) other long-term assets decreased by $1.6 million, (viii) prepaid expenses and other current assets decreased by $1.9 million, (ix) financing obligations increased by $0.3 million, and ~~(v)~~(x) accrued expenses and other current liabilities ~~increased~~decreased by ~~$4.7~~$0.5 million.

Impacts on our condensed consolidated statements of operations for the three and nine months ended September 30, ~~2022~~2023 are summarized as follows: (i) ~~net~~ product and installation revenue ~~recognized of $12.7~~increased by $151.6 million and ~~$2.1 million and $49.6 million and $3.2~~$9.5 million, respectively, as a

result of the sale of the new Energy Servers; (ii) electricity revenue increased by $1.1 million related to the old Energy Servers, (iii) cost of electricity revenue ~~of nil and $45.0~~increased by $125.5 million, ~~respectively,~~primarily including the ~~write-off~~impairment of the old Energy Servers of ~~nil~~$123.7 million and ~~$44.8 million, respectively,~~ accelerated depreciation of ~~nil and $0.2~~$0.3 million ~~respectively,~~ prior to the completion of installation; ~~(iii)~~(iv) cost of product revenue and cost of installation revenue ~~of $5.7~~increased by $62.6 million and ~~$1.7 million and $21.6 million and $2.5~~$7.4 million, respectively, due to the sale of the new Energy Servers; (v) general and ~~(iv) nil and $4.2~~administrative expenses increased by $6.4 million ~~respectively,~~due to the impairment of non-recoverable production insurance; (vi) loss on extinguishment of ~~debt.~~debt increased by $1.4 million, (vii) interest expense increased by $0.3 million, and (viii) net loss attributable to noncontrolling interest decreased by $1.0 million.

Impacts on our ~~condensed~~ consolidated statements of cash flows for the nine months ended September 30, ~~2022~~2023 are summarized as follows: net cash provided by financing activities decreased by ~~$32.6~~$118.5 million due to the repayment of debt related to PPA V, and acquisition of ~~$30.2~~all of interest in PPA V from Intel for $6.9 million ~~and cash fee~~net of ~~$2.4 million associated with debt extinguishment.~~distributions to Intel’s noncontrolling interest of $2.3 million.

PPA ~~Entities’~~Entity’s Aggregate Assets and Liabilities

Generally, the assets of an operating company owned by an investment company can be used to settle only the operating company obligations, and the operating company creditors do not have recourse to us. The following ~~are~~were the aggregate carrying values of our ~~VIEs'~~VIE’s assets and liabilities in our condensed consolidated balance sheets, after eliminations of intercompany transactions and balances, including ~~as of September 30, 2022 each of~~ the PPA ~~Entities~~V Entity in ~~the PPA IV transaction and~~ the PPA V transaction ~~and~~ as of December 31, ~~2021 each of~~2022 (in thousands):



	December 31,
	2022
Assets
Current assets:
Cash and cash equivalents	$	5,008
Restricted cash	550
Accounts receivable	2,072

Prepaid expenses and other current assets	1,927
Total current assets	9,557
Property, plant and equipment, net	133,285

Restricted cash	8,000
Other long-term assets	1,869
Total assets	$	152,711

Liabilities
Current liabilities:

Accrued expenses and other current liabilities	$	1,037
Deferred revenue and customer deposits	662
Non-recourse debt	13,307
Total current liabilities	15,006
Deferred revenue and customer deposits	4,748
Non-recourse debt	112,480

Total liabilities	$	132,234

Before the ~~PPA Entities in the PPA IIIa transaction, the PPA IV transaction and~~sale on August 24, 2023, we consolidated the PPA V ~~transaction (in thousands):~~

September 30, December 31,
2022 2021
Assets
Current assets:
Cash and cash equivalents $ 1,265 $ 1,541
Restricted cash 980 3,078
Accounts receivable 3,170 5,112
Customer financing receivable — 5,784
Prepaid expenses and other current assets 2,766 3,071
Total current assets 8,181 18,586
Property, plant and equipment, net 208,208 228,546
Customer financing receivable — 39,484
Restricted cash 17,508 23,239
Other long-term assets 1,994 2,362
Total assets $ 235,891 $ 312,217
Liabilities
Current liabilities:
Accrued expenses and other current liabilities $ 111 $ 194
Deferred revenue and customer deposits 662 662
Non-recourse debt 15,943 17,483
Total current liabilities 16,716 18,339
Deferred revenue and customer deposits 4,915 5,410
Non-recourse debt 179,955 217,417
Total liabilities $ 201,586 $ 241,166

~~We consolidated each PPA~~ Entity as ~~VIEs~~a VIE in ~~the PPA IV transaction and~~ the PPA V transaction, as we ~~remain the minority shareholder in each of these transactions but have~~had determined that we ~~are~~were the primary beneficiary of ~~these VIEs. These~~this VIE. The PPA ~~Entities contain~~V Entity contained debt that iswas non-recourse to us and ~~own~~owned Energy Server assets for which we dodid not have title.

~~12.~~11. Related Party Transactions

On September 23, 2023, all 13,491,701 shares of the Series B RCPS (the “Second Tranche Shares”) were automatically converted into shares of our Class A common stock. For more information on the Second Tranche Closing, see Part I, Item 1, Note 16 - SK ecoplant Strategic Investment. Consequently, SK ecoplant became a principal owner of an aggregate of 23,491,701 shares of our Class A common stock, including (i) 10,000,000 shares held with sole voting and investment power (as a result of the conversion of 10,000,000 shares of our Series A redeemable convertible preferred stock (the “Series A RCPS”) into 10,000,000 shares of our Class A common stock on November 8, 2022) and (ii) 13,491,701 shares held with shared voting and investing power with Econovation LLC, of which SK ecoplant is the sole member, as the assignee of the Second Tranche Shares. SK ecoplant is considered to be a related party as of September 23, 2023, and became entitled to nominate a member to the Board of Directors of Bloom. As of September 30, 2023, SK ecoplant’s beneficial ownership of our Class A common stock represents 10.5% of our outstanding Class A common stock.

~~There~~Other than noted above, there have been no changes in our related party ~~relationships~~transactions during the ~~three and~~ nine months ended September 30, ~~2022.~~2023. For information on our related ~~parties,~~party transactions, see Part II, Item 8, Note 12 - Related Party Transactionsin our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

Our operations ~~include~~included the following related party transactions (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Total revenue from related parties $ 12,532 $ 3,333 $ 30,231 $ 8,227


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Total revenue from related parties1	$	125,676	$	12,532	$	360,981	$	30,231

1Includes revenue from SK ecoplant for the three and nine months ended September 30, 2023, which became a related party on September 23, 2023, however we had transactions with SK ecoplant in prior periods (see Part II, Item 8, Note 17 - SK ecoplant Strategic Investment in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and Part I, Item 1, Note 16 - SK ecoplant Strategic Investment).

Below is the summary of outstanding related party balances as of September 30, ~~2022~~2023 and December 31, ~~2021~~2022 (in ~~millions)~~thousands):

September 30, December 31,
2022 2021

Accounts receivable $ 12.5 $ 4.4


	September 30,		December 31,
	2023		2022

Accounts receivable	$	247,897	$	4,257
Contract assets	3,415		—
Deferred cost of revenue, current	23,424		—
Accrued expenses and other current liabilities	5,722		—
Deferred revenue and customer deposits, current	11,118		—

Debt to/from Related Parties

We had no material debt or convertible notes to/from investors considered to be related parties as of September 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

12. Restructuring

In September 2023, as a result of a review of current strategic priorities and resource allocation, we approved a restructuring plan (the “Plan”) intended to realign our operational focus to support our multi-year growth, scale the business, and improve our cost structure and operating margins. The Plan included (i) an optimization of our workforce across multiple functions, (ii) a relocation of our repair and overhaul (“R&O”) department of our manufacturing and warehousing facility in Newark, Delaware, to Mexico, and (iii) a closure of a manufacturing, warehousing, research and development (“R&D”) facility in Sunnyvale, California. We began executing the Plan in September 2023 and expect these efforts to continue in subsequent quarters. The restructuring activities are expected to be completed in the first half of fiscal 2024, subject to local law and consultation requirements, as well as our business needs. We evaluate restructuring charges in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”).

According to the Plan, 74 full-time employees and 48 contractors separated from the Company in September 2023. An additional 71 full-time employees and 8 contractors separated from the Company in October 2023. Both full-time employees and contractors who were impacted by the restructuring were eligible to receive severance benefits.

In the third quarter of fiscal 2023, we incurred $2.2 million in restructuring costs recorded as severance expenses. We expect to incur another $16.4 million in restructuring costs in subsequent quarters, out of which we expect $10.0 million will relate to the closure of our manufacturing, warehousing, and R&D facility in Sunnyvale, California, $3.0 million will relate to severance costs, $2.7 million will relate to relocation costs, and $0.7 million will relate to other one-time employee termination benefits. However, the actual timing and amount of costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.

The following table presents our current and non-current liability as accrued for restructuring charges on our condensed consolidated balance sheets. The table sets forth an analysis of the components of the restructuring charges and payments and other deductions made against the accrual for the three months ended September 30, 2023 (in thousands):


	Three Months Ended, September 30, 2023
	Severance

Balance at June 30, 2023	$	—
Restructuring accruals	2,219
Payments	(1,047)
Balance at September 30, 2023	$	1,172

Severance expense recorded in the third quarter of fiscal 2023 in accordance with ASC 420 was a result of the separation of 74 full-time employees and 48 contractors associated with the Plan. At September 30, 2023, $1.2 million of accrued severance-related costs were included in accrued expenses and other current liabilities in our condensed consolidated balance sheets.

The following table summarizes restructuring costs included in the accompanying condensed consolidated statements of operations (in thousands):


	Three Months Ended, September 30, 2023

Cost of product revenue	$	677
Cost of service revenue	48
Operating expenses:
Sales and marketing	1,387
General and administrative	107
Total	$	2,219

13. Commitments and Contingencies

Commitments

Purchase Commitments with Suppliers and Contract Manufacturers - In order to reduce manufacturing lead-times for an adequate supply of inventories, we have agreements with our component suppliers and contract manufacturers to allow long lead-time component inventory procurement based on a rolling production forecast. We are contractually obligated to purchase long lead-time component inventory procured by certain manufacturers in accordance with our forecasts. We can generally give notice of order cancellation at least 90 days prior to the delivery date. However, we occasionally issue purchase orders to our component suppliers and third-party manufacturers that may not be cancellable. As of September 30, 2022, we had a commitment with NetJets to purchase a fractional interest in one of its jets, which is to be used for corporate travel purposes, in the amount of approximately $3.4 million. The jet is expected to be delivered by July of 2023. As of2023 and December 31, ~~2021,~~2022, we had no material open purchase orders with our component suppliers and third-party manufacturers that are not cancellable.

~~Portfolio Financings~~ Performance Guarantees - We guarantee the performance of Energy Servers at certain levels of output and efficiency to our customers over the contractual term. We monitor the need for any accruals arising from such guaranties, which are calculated as the difference between committed and actual power output or between natural gas consumption at warranted efficiency levels and actual consumption, multiplied by the contractual rates with the customer. Amounts payable under these guaranties are accrued in periods when the guaranties are not met and are recorded as service revenue in the condensed consolidated statements of operations. We paid ~~$1.3~~$4.5 million and ~~$0.2~~$24.4 million infor the three and nine months ended September 30, 2023, respectively, for such performance ~~guarantees~~guarantees. We paid $0.8 million and $10.5 million for the three and nine months ended September 30, 2022, ~~and 2021, respectively.~~respectively, for such performance guarantees.

Letters of Credit - In 2019, pursuant to the PPA II upgrade of Energy Servers, we agreed to indemnify our financing partner for losses that may be incurred in the event of certain regulatory, legal or legislative ~~development~~developments and established a

cash-collateralized letter of credit facility for this purpose. ~~There were no letters of credit or pledged funds associated with the PPA IIIa Upgrade.~~ As of September 30, 2023 and December 31, 2022, the balance of this cash-collateralized letter of credit was ~~$69.0 million, of which $33.3~~$40.4 million and ~~$35.7~~$69.1 million, ~~is recognized~~respectively.

In August 2023, as ~~short-term and long-term~~part of the PPA V Upgrade, the debt service reserve of $8.6 million was reclassified from restricted cash ~~respectively. As~~to cash and cash equivalents at the time of repayment of the 3.04% Senior Secured Notes due June 2031. For additional information, please see Part I, Item 1, Note 7 – Outstanding Loans and Security Agreements and Note 10 – Portfolio Financings. The restricted cash held in the PPA V entity as of December 31, ~~2021, the balance of this cash-collateralized letter~~2022, was $8.6 million.

In addition, we have other outstanding letters of credit ~~was $99.4~~issued to our customers and other counterparties in the U.S. and international locations under different performance and financial obligations. These letters of credit are collateralized through cash deposited in the controlled bank accounts with the issuing banks, and are classified as restricted cash in our condensed consolidated balance sheets. In September 2023, we canceled certain existing cash-collateralized letters of credit with an approximate value of $60.4 million issued to our customers in the Republic of ~~which $41.7~~Korea under long-term service agreements (the “LTSAs”), and replaced them with surety bonds on a non-collateralized basis. As of September 30, 2023 and December 31, 2022, the balances of the cash-collateralized letters of credit issued to our customers and other counterparties in the U.S. and international locations were $32.3 million and ~~$57.7~~$84.3 million, ~~is recognized as short-term and long-term restricted cash,~~ respectively.

Pledged Funds - In 2019, pursuant to the PPA IIIb ~~refinancing and energy servers~~ upgrade ~~program,~~of Energy Servers, we ~~pledged~~established a restricted cash fund of $20.0 million, which had been pledged for a seven-year period to secure our operations and maintenance obligations with respect to the totality of our obligations to the financier. ~~We categorized the $20.0 million as restricted cash on our condensed consolidated balance sheet. It was agreed all~~All or a portion of such funds would be released if we meet certain credit rating and/or market capitalization milestones prior to the end of the pledge period. If we do not meet the required criteria within the first five-year period, the funds would still be released to us over the following two years as long as the ~~energy servers~~Energy Servers continue to perform in compliance with our warranty obligations. As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the balance of the ~~long-term~~ restricted cash fund was ~~$6.7~~$7.6 million and ~~$6.7 million.~~$7.9 million, respectively.

Contingencies

Indemnification Agreements - We enter into standard indemnification agreements with our customers and certain other business partners in the ordinary course of business. Our exposure under these agreements is unknown because it involves future claims that may be made against us but have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.

Delaware Economic Development Authority - In March 2012, we entered into an agreement with the Delaware Economic Development Authority (the “Authority”) to provide a grant of $16.5 million to us as an incentive to establish a new manufacturing facility in Delaware and to provide employment for full time workers at the facility over a certain period of time. The approved grant consisted of two components - a performance grant of $12.0 million that was received in 2012-2013 and was tied to total compensation paid to full time workers and a supplier incentive grant of $4.5 million that we would have received if we had employed 900 full time employees by pre-established dates. We forfeited the entire $4.5 million supplier incentive component of the grant. We forfeited and repaid two portions of the performance grant based on our achievement of one out of three milestones for the total compensation paid to full time workers, as follows:

■$108 million in total compensation over the four-year period ended September 30, 2017, which we did not meet, requiring us to repay $1.5 million of the grant,

■$144 million in total compensation over the four-year period ended September 30, 2021, which we did not meet, requiring us to repay $1.0 million of the grant, and

■$72 million in total compensation over the two-year period ended September 30, 2023, which we met, so no repayment was required.

We account for grants by analogizing to the grant accounting model under IAS 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). As of ~~September 30,~~December 31, 2022, ~~the grant became current and~~ we ~~have~~ recorded $9.5 million of grant related liability in accrued expenses and other current liabilities for future ~~repayments~~repayment of ~~this~~the grant. As of ~~December 31, 2021,~~September 30, 2023, we ~~have recorded~~concluded there was reasonable assurance that we had met the grant requirements, and as such, the grant related liability of $9.5 million was recognized in ~~other long-term liabilities~~(a) the condensed consolidated statements of operations as a reduction in (i) cost of product revenue of $3.1 million, (ii) cost of service revenue of $2.9 million, (iii) general and administrative expenses of $0.6 million, (iv) research and development expenses of $0.5 million, and (v) sales and marketing expenses of $0.2 million for ~~potential~~the three months ended September 30, 2023, and in (b) the condensed consolidated balance sheets as of September 30, 2023 as a reduction of inventories of $2.2 million, which is represented by capitalized payroll expenses and will be realized in the condensed consolidated statements of operations in future ~~repayments~~periods upon sale of ~~this grant.~~these inventories.

Investment Tax Credits -~~For information on ITCs, see Part II, Item 8, Note 13 -~~ ~~Commitments and Contingencies~~ ~~on our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Please also refer to Note 1 -~~ ~~Nature of Business, Liquidity and Basis of Presentation~~ Our Energy Servers are eligible for ~~discussion of~~federal investment tax credits ~~implemented by~~(“ITCs”) that accrued to qualified property under Internal Revenue Code Section 48 when placed into service. However, the ~~IRA.~~ITC program has operational criteria that extend for five years. If the energy property is disposed of or otherwise ceases to be qualified investment credit property before the close of the five-year recapture period is fulfilled, it could result in a partial reduction of the incentives.

Legal Matters - We are involved in various legal proceedings that arise in the ordinary course of business. We review all legal matters at least quarterly and assess whether an accrual for loss contingencies needs to be recorded. We record an accrual for loss contingencies when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal matters are subject to uncertainties and are inherently unpredictable, so the actual liability in any such matters may be materially different from our estimates. If an unfavorable resolution were to occur, there exists the possibility of a material adverse impact on our condensed consolidated ~~financial condition,~~balance sheets, results of operations or cash flows for the period in which the resolution occurs or onin future periods.

In March 2019, the Lincolnshire Police Pension Fund filed a class action complaint in the Superior Court of the State of California, County of Santa Clara, against us, certain members of our senior management, certain of our directors and the underwriters in our July 25, 2018 IPO alleging violations under Sections 11 and 15 of the Securities Act ~~of 1933, as amended (the “Securities Act”),~~ for alleged misleading statements or omissions in our Registration Statement on Form S-1 filed with the SEC in connection with the IPO. Two related class action cases were subsequently filed in the Santa Clara County Superior Court against the same defendants containing the same allegations; Rodriquez vs Bloom Energy et al. was filed on April 22, 2019 and Evans vs Bloom Energy et al. was filed on May 7, 2019. These cases have been consolidated. ~~Plaintiffs'~~Plaintiffs’ consolidated amended complaint was filed with the court on September 12, 2019. On October 4, 2019, defendants moved to stay the lawsuit pending the federal district court action discussed below. On December 7, 2019, the Superior Court issued an order staying the action through resolution of the parallel federal litigation mentioned below. We believe the complaint to be without merit and in contravention of our forum selection clause in our Restated Certificate of Incorporation and we intend to defend this action vigorously. We are unable to estimate any range of reasonably possible losses.

In May 2019, Elissa Roberts filed a class action complaint in the federal district court for the Northern District of California against us, certain members of our senior management team, and certain of our directors alleging violations under ~~Section~~Sections 11 and 15 of the Securities Act for alleged misleading statements or omissions in our Registration Statement on Form S-1 filed with the SEC in connection with the IPO. On September 3, 2019, the court appointed a lead plaintiff and lead plaintiffs’ counsel. On November 4, 2019, plaintiffs filed an amended complaint adding the underwriters in the IPO and our auditor as defendants for the Section 11 claim, as well as adding claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against us, and certain members of our senior management team. The amended complaint alleged a class period for all claims from the time of our IPO until September 16, 2019. On April 21, 2020, plaintiffs filed a second amended complaint, which continued to make the same claims and added allegations pertaining to the restatement and, as to claims under the Exchange Act, extended the putative class period through February 12, 2020. On July 1, 2020, we and the other defendants filed ~~a motion~~motions to dismiss the second amended complaint. On September 29, 2021, the court entered an order dismissing with leave to amend (1) five of seven statements or groups of statements alleged to violate Sections 11 and 15 of the Securities Act and (2) all allegations under the Exchange Act. All allegations against our auditors were also dismissed. Plaintiffs elected not to amend the complaint and instead on October 22, 2021 filed a motion for entry of final judgment in favor of our auditors so that plaintiffs could appeal the dismissal of those claims. The court denied that motion on December 1, 2021 and in response plaintiffs ~~have~~ filed a motion asking the court to certify an interlocutory appeal as to the accounting claims. The court denied ~~plaintiff’s~~plaintiffs’ motion on April 14, 2022. ~~Separately, the~~The claims for violation of Sections 11 and 15 of the Securities Act that were not dismissed by the court ~~are in~~entered the discovery phase. ~~A case schedule has been set, with a trial scheduled for December 2023. We believe~~

On January 6, 2023, Bloom and the plaintiffs’ entered into an agreement in principle to settle the claims against Bloom, its executives and directors, and the IPO underwriters for a payment of $3 million, which we expect to be ~~without merit~~funded entirely by our insurers. If the settlement becomes effective, we expect it to result in a dismissal with prejudice of all claims against us, our executives and ~~we intend to defend this~~directors, and the underwriters. The settlement does not constitute an acknowledgement of liability or wrongdoing. On June 30, 2023, Bloom and the plaintiff’s executed a definitive settlement agreement containing the foregoing terms and customary terms for class action ~~vigorously.~~

~~We are unable to predict the outcome of this litigation at this time~~settlements, and ~~accordingly are not able to estimate any range of reasonably possible losses.~~

In September 2019, we received a books and records demand from purported stockholder Dennis Jacob (“Jacob Demand”). The Jacob Demand cites allegations from the September 17, 2019 report prepared by admitted short seller Hindenburg Research. In November 2019, we received a substantially similar books and records demand fromon the same ~~law firm on behalf of purported stockholder Michael Bolouri (“Bolouri Demand” and, together~~date, filed the settlement agreement with the ~~Jacob Demand, the “Demands”). On January 13, 2020, Messrs. Jacob and Bolouri filed a complaint in the Delaware Court of Chancery~~court to ~~enforce the Demands in the matter styled~~ ~~Jacob, et al. v. Bloom Energy Corp., C.A. No. 2020-0023-JRS. On March 9, 2020, Messrs. Jacob and Bolouri filed an amended complaint in the Delaware Court of Chancery to add allegations regarding the restatement.~~seek its approval. The ~~court held a one-day trial on December 7, 2020. On February 25, 2021, the Delaware Court of Chancery~~judge issued a ~~decision rejecting~~preliminary approval of the Bolouri Demand but granting in part the Jacob Demand allowing limited access to certain books and records pertaining to the allegations made in the Hindenburg Research Report. On March 29, 2021, the Court of Chancery entered a Final Order and Judgment regarding the required production of documents. On April 28, 2021, we produced documents to Mr. Jacob responsive to the Final Order and Judgment. We are unable to estimate any range of reasonably possible losses.settlement on October 31, 2023.

In June 2021, we filed a petition for writ of mandate and a complaint for declaratory and injunctive relief in the Santa Clara Superior Court against the City of Santa Clara for failure to issue building permits for two of our customer installations and asking the court to require the City of Santa Clara to process and issue the building permits. In October 2021, we filed an amended petition and complaint that asserts additional constitutional and tort claims based on the City’s failure to timely issue

the Energy Server permits. Discovery has commenced and we are aggressively pursuing all claims. On February 4, 2022, the City of Santa Clara filed a ~~Demurrer~~demurrer seeking to dismiss all of the Company’s claims. The trial judge rejected the ~~Demurrer~~demurrer on all claims except one, and allowed Bloom leave to amend that claim. The ~~We filed the~~ second amended petition was filed on July 1,5, 2022. The City of Santa Clara demurred only to ~~one~~the amended cause of action seeking damages for tortious ~~conduct;~~conduct. The trial judge granted that demurrer and struck the ~~hearing is scheduled for~~tort claim on October 27, ~~2022.~~2022; the writ of mandate and constitutional claims were allowed to proceed. The ~~next Status Conference with~~parties are currently briefing the ~~judge is scheduled for September December 115, 2022. If we are unable~~writ of mandate claims which seek immediate issuance of the building permits. On April 21, 2023, the parties executed a settlement agreement which allows our two pending customer installations to ~~secure~~proceed under building permits ~~for these customer~~and requires the City to amend its zoning code so that future installations ~~in a timely fashion, our customers will terminate their contracts with us and select another energy provider. In addition, if we are no longer able to install our~~of Bloom Energy Servers in Santa Clara ~~under~~require only building ~~permits, we may not be able to secure future customer bookings for installation in the City of Santa Clara.~~permits.

In February 2022, Plansee SE/Global Tungsten & Powders Corp. (“Plansee/GTP”), a former supplier, filed a request for expedited arbitration with the World Intellectual Property Organization Arbitration and Mediation Center in Geneva Switzerland (“WIPO”), for various claims allegedly in relation to an Intellectual Property and Confidential Disclosure Agreement between Plansee/GTP and Bloom Energy Corporation. Plansee/GTP’s statement of claims includes allegations of infringement of U.S. Patent Nos. 8,802,328, 8,753,785 and 9,434,003. On April 3, 2022, we filed a complaint against Plansee/GTP in the Eastern District of Texas to address the dispute between Plansee/GTP and Bloom Energy Corporation in a proper forum before a U.S. Federal District Court. Our complaint seeks the correction of inventorship of U.S. Patent Nos. 8,802,328, 8,753,785 and 9,434,003 (the “Patents-in-Suit”); declaratory judgment of invalidity, unenforceability, and non-infringement of the Patents-in-Suit; and declaratory judgment of no misappropriation. Further, our complaint seeks to recover damages ~~hawse~~we have suffered in relation to Plansee/GTP’s business dealings that, as alleged, constitute acts of unfair competition, tortious interference contract, breach of contract, violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and violations of the Clayton Antitrust Act. On June 9, 2022, Plansee/GTP filed a motion to dismiss the complaint filed in the Eastern District of Texas and compel arbitration (or alternatively to stay). We filed our opposition on June 30, 2022, Plansee/~~GTP’s~~GTP filed its reply on July 14, 2022 and we filed our sur-reply on July 22, 2022. ~~We await~~On February 9, 2023, Magistrate Judge Payne issued a ~~ruling on~~report and recommendation to stay the ~~matter~~district court action pending an arbitrability determination by the arbitrator for each claim.

On February 23, 2023, we filed an amended complaint adding additional causes of action and filed objections to the Magistrate’s report and recommendation. On April 26, 2023, Judge Gilstrap overruled our objections to the Magistrate’s report and recommendation and stayed the district court action pending arbitrability determinations by the arbitrator in the ~~interim, discovery has commenced~~WIPO proceeding. The arbitration had been held in ~~Federal~~abeyance awaiting the District ~~Court.~~Court’s decision. A hearing by the arbitrator in WIPO on arbitrability took place on June 27, 2023. Further proceedings in the arbitration are confidential pursuant to the WIPO rules. Given that the ~~cases are still~~WIPO arbitration had been held in ~~their~~abeyance, the arbitration is in an early ~~stages, we~~stage. We are unable to predict the ultimate outcome of the arbitration ~~and district court action~~ at this ~~time, and accordingly are not able to estimate a range of reasonably possible losses.~~time.

14. Income Taxes

For the three and nine months ended September 30, 2023, we recorded an income tax provisions of $0.6 million and $1.1 million, respectively, on pre-tax losses of $167.4 million and $311.0 million for effective tax rates of (0.4)% and (0.3)%, respectively. For the three and nine months ended September 30, 2022, we recorded an income tax ~~provisions~~benefit and income tax provision of $0.3 million and $0.9 million, respectively, on pre-tax losses of $60.1 million and $263.4 million for effective tax rates of (0.6)% and (0.3)%, respectively. For the three and nine months ended September 30, 2021, we recorded income tax provisions of $0.2 million and $0.6 million on pre-tax losses of $56.5 million and $144.3 million for effective tax rates of (0.3)% and (0.4)%, respectively.

The effective tax rate for the three and nine months ended September 30, 2023 and 2022 ~~and 2021 is~~was lower than the statutory federal tax rate primarily due to a full valuation allowance against U.S. deferred tax assets.

~~U.S. tax law changes~~

On August 16, 2022, the United States government enacted the Inflation Reduction Act of 2022 (“IRA”). The IRA establishes a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. The enactment of the IRA did not have a material impact to the Company’s financial statements for the three and nine months ended September 30, 2022 and 2021, but we are currently assessing the impact of the production and tax credit-related IRA provisions on our business for future quarters.

15. Net Loss per Share Available to Common Stockholders

Please refer to the condensed consolidated statements of operations for computation of our net loss per share available to common stockholders, basic and diluted.

The following common stock equivalents (in thousands) were excluded from the computation of our net loss per share available to common stockholders, diluted, for the three and nine months presented as their inclusion would have been ~~antidilutive~~antidilutive:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022

Convertible notes	47,736	14,187	31,146	14,187
Redeemable convertible preferred stock	12,319	10,000	13,096	10,000
Stock options and awards	3,352	6,445	4,880	5,503


	63,407	30,632	49,122	29,690

16. SK ecoplant Strategic Investment

In October 2021, we expanded our existing relationship with SK ecoplant. As part of this arrangement, we amended the previous Preferred Distribution Agreement (“PDA”) and Joint Venture Agreement (“JVA”) with SK ecoplant. The restated PDA establishes SK ecoplant’s purchase commitments for our Energy Servers for the three year period on a take or pay basis as well as the basis for determining the prices at which the Energy Servers and related components will be sold. The restated JVA increases the scope of assembly done by the joint venture facility in the Republic of Korea, which was established in 2019, for the procurement of local parts for our Energy Servers and the assembly of certain portions of the Energy Servers for the South Korean market. The joint venture is a VIE of Bloom and we consolidate it in our financial statements as we are the primary beneficiary and therefore have the power to direct activities which are most significant to the joint venture.

On September 15, 2023, we entered into the Amended and Restated JVA and the Share Purchase Agreement (together, the “Amended JV Agreements”) with SK ecoplant which changed the share of our voting rights in the Korean joint venture to 40% and increases the scope of assembly done by the joint venture facility in the Republic of Korea to full assembly. Neither the Amended JV Agreements, nor the fact that SK ecoplant is considered to be our related party after the conversion of Series B RCPS into shares of our Class A common stock (for additional information, please see Part I, Item 1, Note 11 - Related Party Transactions) changed our status as the primary beneficiary of the Korean joint venture. Therefore, we continue to consolidate this VIE in our financial statements as of September 30, 2023.

The following are the aggregate carrying values of the Korean joint venture’s assets and liabilities in our condensed consolidated balance sheets, after eliminations of intercompany transactions and balances, as of September 30, 2023 and December 31, 2022 (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Convertible notes 14,187 14,187 14,187 14,187
Redeemable convertible preferred stock 10,000 — 10,000 —
Stock options and awards 6,445 5,415 5,503 6,998
30,632 19,602 29,690 21,185


	September 30,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	1,012	$	2,591
Accounts receivable	20,483		4,257
Inventories	10,617		13,412
Prepaid expenses and other current assets	1,574		2,645
Total current assets	33,686		22,905
Property and equipment, net	1,705		1,141
Operating lease right-of-use assets	2,249		2,390
Other long-term assets	44		47
Total assets	$	37,684	$	26,483
Liabilities
Current liabilities:
Accounts payable	$	4,828	$	5,607
Accrued expenses and other current liabilities	3,324		1,355
Deferred revenue and customer deposits	—		2
Operating lease liabilities	409		393
Total current liabilities	8,561		7,357
Operating lease liabilities	1,665		2,000
Non-recourse debt	1,483		—
Total liabilities	$	11,709	$	9,357

In October 2021, we also entered into a new Commercial Cooperation Agreement (the “CCA”) regarding initiatives pertaining to the hydrogen market and general market expansion for our products.

The Initial Investment

In October 2021, we entered into the SPA pursuant to which we agreed to sell and issue to SK ecoplant 10,000,000 shares of Series A RCPS, par value $0.0001 per share, at a purchase price of $25.50 per share for an aggregate purchase price of $255.0 million. On December 29, 2021, the closing of the sale of the Series A RCPS was completed and we issued the 10,000,000 shares of the Series A RCPS (the “Initial Investment”). In addition to the Initial Investment, the SPA provided SK ecoplant with an option to acquire a variable number of shares of Class A Common Stock (the “Option”). According to the SPA, SK ecoplant was entitled to exercise the Option through August 31, 2023, and the transaction must have been completed by November 30, 2023.

The sale of Series A RCPS was recorded at its fair value of $218.0 million on the date of issuance. Accordingly, we allocated the excess of the cash proceeds received of $255.0 million plus the change in fair value of the Series A RCPS between October 23, 2021, and December 29, 2021, of $9.7 million, over the fair value of the Series A RCPS on December 29, 2021, and the fair value of the Option on October 23, 2021, to the PDA. This excess amounted to $37.0 million and was recorded in deferred revenue and customer deposits. Accordingly, during the three and nine months ended September 30, 2022, we recognized product revenue of $3.2 million and $7.9 million, respectively, in connection with this arrangement. No product revenue was recognized during the three and nine months ended September 30, 2023 in connection with this arrangement. As of December 31, 2022, the unrecognized amount of $24.6 million included $10.0 million in current deferred revenue and customer deposits and $14.6 million in non-current deferred revenue and customer deposits on the condensed consolidated balance sheets. As of September 30, 2023, the unrecognized amount of deferred revenue and customer deposits was reduced to zero as a result of the Second Tranche Closing (see details below in section “The Second Tranche Closing”).

PDA, JVA, CCA and the SPA entered into with SK ecoplant concurrently were evaluated as a combined contract in accordance with ASC 606 Revenue from Contracts with Customers and, to the extent applicable for separated components,

under the guidance of Topic 815 Derivatives and Hedging and applicable subsections and ASC 480 Distinguishing Liabilities from Equity.

We concluded that the Option was a freestanding financial instrument that should have been separately recorded at fair value on the date the SPA was executed.

On August 10, 2022, pursuant to the ~~notice received from~~SPA, SK ecoplant notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, ~~(see~~pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 shares at a purchase price of $23.05 per share (the “Second Tranche Closing”). As of December 31, 2022, this option was accounted for as the equity-classified forward contract.

For further information, see Part II, Item 8, Note ~~5), there were an additional~~17 - SK ecoplant Strategic Investment in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The Second Tranche Closing

On March 20, 2023, SK ecoplant entered into the Amended SPA with us, pursuant to which on March 23, 2023, we issued and sold to SK ecoplant 13,491,701 shares of non-voting Series B RCPS, par value $0.0001 per share, at a purchase price of $23.05 per share for cash proceeds of $311.0 million, excluding issuance cost of $0.5 million.

The Amended SPA triggered the modification of the equity-classified forward contract on Class A common stock, ~~equivalents that were excluded~~which resulted in the derecognition of the pre-modification fair value of the forward contract given to SK ecoplant of $76.2 million. The derecognition of the pre-modification fair value was recorded in additional paid-in capital in our condensed consolidated balance sheets as of September 30, 2023.

The Series B RCPS was accounted for as a stock award with liability and equity components. The liability component of the Series B RCPS was recognized at the redemption value of $311.0 million, less issuance costs of $0.5 million, and the equity component of the Series B RCPS was recognized at its fair value of $16.1 million on March 20, 2023 and recorded in current liabilities and additional paid-in capital, respectively, in our condensed consolidated balance sheets as of September 30, 2023.

On March 20, 2023, in connection with the Amended SPA we also entered into the Loan Agreement, pursuant to which we had the option to draw on a loan from SK ecoplant with a maximum principal amount of $311.0 million, a maturity of five years and an interest rate of 4.6%, should SK ecoplant have sent a redemption notice to us under the Amended SPA.

The Amended SPA and the Loan Agreement provided us with cash proceeds of $311.0 million and a loan commitment asset of $52.8 million from SK ecoplant for total consideration of $363.8 million. In return, SK ecoplant received consideration of $403.3 million, consisting of the release from the ~~table above.~~obligation to close on the original transaction fair valued at $76.2 million, the obligation from us to issue the Series B RCPS at redemption value of $311.0 million, and the option to convert the Series B RCPS to Class A common stock, which had an estimated fair value of $16.1 million. The excess consideration provided by us amounted to $39.5 million, which resulted in a reduction of our deferred revenue and customer deposits by $24.6 million related to the Initial Investment, as of September 30, 2023. The net excess consideration of $14.9 million was recognized as $8.2 million in prepaid expenses and other current assets and $6.7 million was classified as other long-term assets in our condensed consolidated balance sheets as of March 31, 2023. The deferred expense is recognized as contra-revenue over the take or pay period based on an estimate of the revenue we expect to receive under the remaining term of the PDA. During the three and nine months ended September 30, 2023, the deferred expense recognized as contra-revenue was $3.0 million. As a result, as of September 30, 2023, we recognized the net excess consideration of $11.9 million, of which $9.9 million was classified as prepaid expenses and other current assets and $2.0 million was classified as other long-term assets, in our condensed consolidated balance sheet.

On September 23, 2023, all 13,491,701 shares of the Series B RCPS were automatically converted into shares of our Class A common stock pursuant to the Certificate of Designation, dated as of March 20, 2023, setting forth the rights, preferences, privileges, and restrictions of the Series B RCPS, as amended by the Certificate of Amendment to the Certificate of Designation, dated as of April 18, 2023. As a result of the conversion: (i) the liability component of the Series B RCPS of $310.5 million was reclassified to additional paid-in capital, less par value of the issued 13,491,701 shares of our Class A common stock, and (ii) the loan commitment asset was recorded at its fair value of $52.8 million, of which $5.3 million was

classified as current and $47.5 million was classified as non-current in our condensed consolidated balance sheets, and was expensed immediately and recognized in interest expense in our condensed consolidated statements of operations.

Upon conversion of all Series B RCPS into shares of our Class A common stock, SK ecoplant is considered to be a related party. For additional information, please see Part I, Item 1, Note 11 - Related Party Transactions.

~~16.~~17. Subsequent Events

There have been no material subsequent events that occurred during the period subsequent to the date of these condensed consolidated financial statements that would require adjustment to our disclosure in the condensed consolidated financial statements as presented.

3134

ITEM 2 - ~~MANAGEMENT'S~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about our industry, management’s beliefs, and certain assumptions made by management. For example, forward-looking statements include, but are not limited to, our expectations regarding our products, services, business strategies, ~~impact of COVID-19,~~ our expanded strategic partnership with SK ecoplant, operations, supply chain (including any direct or indirect effects from the Russia-Ukraine ~~conflict~~war or geopolitical developments in China), new markets, government incentive programs, impact of the ~~IRA~~Inflation Reduction Act of 2022 (the “IRA”) on our business, growth of the hydrogen market and the sufficiency of our cash and our liquidity. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact are forward-looking statements. Forward-looking statements ~~can also~~may be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “designs,” “plans,” “predicts,” “targets,” “forecasts,” “will,” “would,” “could,” “can,” “may” and similar terms. These statements are based on the beliefs and assumptions of our management based on information currently available to management at the time they are made. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results, outcomes and the timing of certain events to differ materially from ~~future~~ results or outcomes expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those ~~identified below, and those~~factors discussed in the section titled “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, in the section titled “Risk Factors” included in Part II, Item 1A of ~~this~~our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 and in our other filings with the Securities and Exchange Commission ~~including~~(the “SEC”). You should review these risk factors for a more complete understanding of the risks associated with an investment in our ~~Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed on February 25, 2022.~~securities. Such forward-looking statements speak only as of the date of this report. We disclaim any obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of ~~such statements. You should review these risk factors for a more complete understanding~~this report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the ~~risks associated with an investment~~plans, intentions or expectations disclosed in our ~~securities.~~forward-looking statements, and you should not place undue reliance on our forward-looking statements. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Overview

Description of Bloom Energy

Our mission is to make clean, reliable energy affordable for everyone in the world. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy.

Our technology, invented in the United States, is one of the most advanced electricity and hydrogen producing technologies on the market today. Our fuel-flexible Bloom Energy Servers can use biogas, hydrogen, natural gas, or a blend of fuels to create resilient, sustainable and cost-predictable power at significantly higher efficiencies than traditional, combustion-based resources. In addition, our same solid oxide platform that powers our fuel cells can be used to create hydrogen, which is increasingly recognized as a critically important tool ~~necessary~~ for the ~~full~~ decarbonization of the energy economy. Our enterprise customers include some of the largest multinational corporations in the world. We also have strong relationships with some of the largest utility companies in the United States and the Republic of Korea.

At Bloom Energy, we look forward to a net-zero future. Our technology is designed to help enable this future ~~in order to deliver~~by delivering reliable, low-carbon electricity in a world facing unacceptable levels of power disruptions. Our resilient platform has kept electricity available for our customers through hurricanes, earthquakes, typhoons, forest fires, extreme heat and grid failures. Unlike traditional combustion power generation, our platform is community-friendly and designed to significantly reduce emissions of criteria air pollutants. We have made tremendous progress ~~making~~towards renewable fuel production ~~a reality~~ through our biogas, hydrogen and electrolyzer programs, and we believe that we are well-positioned as a core platform and fixture in the new energy paradigm to help organizations and communities achieve their net-zero objectives.

We market and sell our Energy Servers ~~directly and~~primarily through ~~indirect channels to~~ our ~~customers both~~direct sales organization in the United States, and ~~abroad. In order to appeal to the largest variety of customers,~~we also have direct and indirect sales channels internationally. Recognizing that deploying our solutions requires a significant financial commitment, we have developed a number of financing options to ~~enable customers' use~~support sales of our Energy Servers to customers who lack the financial capability to purchase our Energy Servers directly, and who may prefer to finance the acquisition using third-party financing or to contract for our services on a pay-as-you-go ~~model, made available through third-party ownership financing arrangements. For information about our different financing options, see Part II, Item 7~~model.

~~, Management's Discussion and Analysis of Financial Condition and Results of Operations - Purchase and Financing Options~~ ~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.~~

Our typical target commercial or industrial customer has historically been either an investment-grade entity or a customer with investment-grade attributes such as size, assets and revenue, liquidity, geographically diverse operations and general financial stability. We have also expanded our product and financing options to ~~the~~ below-investment-grade ~~customer~~

customers and have also expanded internationally to target customers with deployments on a wholesale grid. Given that our customers are typically large institutions with multi-level decision making processes, we generally experience a lengthy sales process.

Strategic Investment

~~On October 23, 2021, we entered into~~For information on the ~~SPA~~strategic investment with SK ecoplant, in connection with a strategic partnership. Pursuant to the SPA, on December 29, 2021, we sold to SK ecoplant 10 million shares of zero coupon, non-voting redeemable convertible Series A Preferred Stock in us, par value $0.0001 per share (“RCPS”), at a purchase price of $25.50 per share for an aggregate purchase price of $255 million (the “Initial Investment”). According to the SPA, on December 29, 2022, the first anniversary of the original issue date, all outstanding shares of Series A Preferred Stock will automatically be converted into shares of Class A Common Stock.

~~Please refer to~~see Part II, Item 8, Note 1 - Nature of Business, Liquidity and Basis of Presentation, Liquidity section in our Annual Report on Form 10-K for the ~~Second Tranche Shares Option exercise notice received from~~ fiscal year ended December 31, 2022, and Part I, Item 1, Note 16 - SK ecoplant ~~on August 10, 2022.~~Strategic Investment

Simultaneous with the execution of the SPA, we and SK ecoplant executed an amendment to the Joint Venture Agreement (“JVA”), an amendment and restatement to our Preferred Distribution Agreement (“PDA Restatement”) and a new Commercial Cooperation Agreement regarding initiatives pertaining to the hydrogen market and general market expansion for the Bloom Energy Server and Bloom Energy Electrolyzer..

Certain Factors Affecting our Performance

~~Global Macroeconomic~~Energy Market Conditions

~~We generally~~The global energy transition to a zero-carbon environment has created new challenges and opportunities for utilities, suppliers of energy solutions and customers. Shifts and uncertainty in market and regulatory dynamics and corporate and governmental policies are ~~seeing worsening global macroeconomic conditions, including rising~~currently impacting the selling process and extending sales cycles and timelines for the Company’s natural gas-, biogas- and hydrogen-related products. Increasing electricity rates, decreasing energy reliability, and delays in the development of transmission infrastructure and grid interconnection have led to increased customer interest ~~rates, recession fears, foreign exchange rate volatility~~in our power solutions, but at the same time natural gas supply and ~~inflationary pressures,~~pricing concerns due to geopolitical stresses and resulting market changes as well as increasing ~~geopolitical instability. These conditions~~focus on sustainability targets have led to increased caution from customers. The increased use of renewable power generation and weather effects of climate change have exacerbated aging grid fragilities, increased the occurrence of power outages, created grid transmission shortages and lengthened already extensively delayed interconnection cycles. Low- and zero-carbon sources of baseload energy have also been curtailed and even banned in some locations, forcing utilities, states and countries to revisit less clean sources of baseload and intermediate power in an attempt to ensure energy reliability. This supply and demand mismatch globally has threatened energy security reliability, reduced the availability of energy and increased the cost of energy.

Bloom’s power solutions enable customers to address these energy market challenges by offering fuel flexible solutions that are designed to provide cost predictable, resilient, reliable energy in a timely fashion. As customers and utilities navigate the energy transition and evolving landscape, the ability of our power solutions to fit their economic, regulatory and policy needs depends on a number of factors, including natural gas availability and pricing, electrical interconnection needs and availability, redundant back up power requirements, cost requirements and sustainability profile. Even in those situations where the time to power from the utility is years away in light of the need to build out energy transmission infrastructure, these factors still may impact ~~our business in several ways.~~a customer’s buying decision. For example, although Bloom’s power generation solutions can operate as microgrids, independent from the ~~strengthening~~grid, if a customer desires back up power or a "grid parallel" solution in combination with the Bloom microgrid, required interconnection studies and lengthy interconnection queues remain, eroding the time to power value proposition. According to the Lawrence Berkeley National Lab, U.S. ~~dollar has caused our Energy Servers~~interconnection queue delays are growing, with a forty percent year over year increase in 2022. The typical project interconnection process for large scale projects grew to ~~become relatively more expensive~~five years in ~~several markets outside~~2022 compared to three years in 2015 and two years in 2008. In addition, the United States, which, coupled with worsening global macroeconomic conditions, has the potential to adversely impact demand for our products. Our Energy Server Product runs on a variety of fuels, including natural gas. The rising cost of natural gas, increases in gas distribution rates, limited availability of natural gas supply, as well as disruptions to the world gas markets ~~increase~~has increased the cost of our ~~product~~power solutions for customers and, in certain cases where there is a lack of fuel supply, a complete inability to operate the systems. In the United States, in particular, the lack or slow development of pipeline infrastructure is impacting the timing of customers being able to take advantage of our power solution opportunities. In certain jurisdictions in the United States and Europe, natural gas bans have been enacted that prevent the use of our power solutions unless alternative fuels are available. In addition, there is a growing hesitancy by potential customers to purchase our power solutions to run on natural gas. Increasingly, customers want a zero-carbon solution for power, and, although our power solutions are designed to run on biofuels or hydrogen (in addition to natural gas) and help our customers achieve their sustainability goals, these fuels continue to have very limited availability and, for most customers, are not yet economical. This impetus by customers to use zero-carbon solutions today, combined with the current lack of availability of zero-carbon fuels, is impacting our power solution selling opportunities. In addition, many of our potential data center and industrial customers are pursuing greenfield opportunities where the development cycle is long and laden with permitting requirements and the uncertainty of these factors is leading to a more difficult customer decision-making process and longer sales cycles.

Corporate procurement policy is also undergoing change that creates uncertainty; while some customers are increasingly focused on decarbonizing their own direct energy supply, including aligning the timing of their zero-carbon power generation with their energy consumption, others are shifting to prioritize overall carbon emissions from the energy system, both of which are impacting our sales.

The regulatory environment for energy solutions continues to shift. In South Korea, the government recently moved to a new, government-run bidding process for fuel cell purchases, which has impacted and may continue to impact demand for our power solutions. In the United States, the investment tax credit (ITC) for fuel cells running on a non-zero carbon fuel currently expires at the end of 2024. In Ireland, which is a large data center market, a directive from the Minister of the Department of the Environment, Climate and Communications to restrict grid connections to data centers and other large power users, along with a halt in high-pressure gas installations has delayed our selling activities in Ireland. Delays in adoption of Renewable Fuel Standard regulations in the United States for the use of biogas to generate electricity for electric vehicles, and minimal governmental focus on utilization of biogas outside of its direct use by methane-fueled vehicles, have created uncertainty in prospects for broader biogas availability for industrial uses, including our power solutions. In addition, in most jurisdictions, air permits and various land use permits are required for installation of our solutions over a certain amount of mega-watts, and generally the length of time to obtain these permits increased, while the level of certainty of issuance has decreased and if issued, the cost of compliance requirements is often cost prohibitive. We have experienced a reluctance in certain states to issue permits for gas generation equipment and if issued require a blend of costly renewable fuels or other measures to advance a state’s climate goals. This has impacted our selling activities.

Significant governmental interest, investment and stimulation of clean hydrogen in the U.S., Europe and in many other regions across the globe have not yet had significant impacts on demand for hydrogen. To date, while the number of proposed hydrogen production projects has grown rapidly, only a small fraction have reached final investment decision (FID) stage, and an even smaller fraction have been deployed. In addition, the infrastructure needed to transport hydrogen, whether through pipelines or maritime or land-based tankers, is currently only sufficient for existing uses, and has not begun to be extended for anticipated future uses, with hydrogen blending and other approaches remaining at pilot stages. It remains unclear whether regulators in some jurisdictions will allow hydrogen to be introduced into gas distribution systems, which could effectively preclude or severely limit our ability to transport hydrogen from the point of production to the ~~end customer. To date,~~point of consumption.

All of these factors have impacted the ~~potential impact~~selling cycles for our electrolyzer product and power solutions. Our revenue, margins and cash flow in any given year are largely dependent on bookings during the prior year. Historically, the majority of our bookings have occurred in the second half of the year, with a significant portion occurring in the fourth quarter. If a substantial portion of our anticipated bookings for the remainder of 2023 is delayed beyond the end of this year, our revenue, margins and cash flow could be materially adversely impacted in 2024.

Supply Chain Constraints

We continue to see effects from global supply chain tightness due to the current inflationary environment, war in Ukraine and trade tensions between the United States and China. We are not aware of, and do not expect, any direct impact on ~~customer~~our business or supply chain from the Israel-Gaza Strip armed conflict. While we have not experienced any significant component shortages to date, we are facing pressures from inflation. These dynamics could worsen as a result of continued geopolitical instability. In the event we are unable to mitigate the impacts of delays and/or price increases in raw materials and components, it could delay the manufacturing and installation, and increase the costs of, our Energy Servers, which would adversely impact our cash flows and results of operations, including our revenues and gross margin. We expect these supply chain challenges to continue in the short term.

Customer Financing Constraints

Our ability to obtain financing for our Energy Servers depends partially on the creditworthiness of our customers, and deterioration of our customers’ credit ratings can impact the financing for their use of our Energy Servers. Regional banking and financial institution instability, such as the failure of Silicon Valley Bank in the first quarter of 2023, may make it more difficult for our customers to obtain financing. Rising interest rates have also increased the cost of financing for our customers. As interest rates rise, financiers of our installations demand ~~has been offset~~a higher rate of return. Rising interest rates could put pressure on our margins in order to meet the higher returns expected by the ~~customer needs~~financiers. We continue to work on obtaining the financing required for ~~resiliency~~our 2023 installations, but if we are unable to secure such financing, our revenue, cash flow and ~~time to power~~liquidity could be materially impacted. We expect that ~~our Energy Server provides. In addition, these conditions also impact our manufacturing~~in the United States, the IRA and ~~supply chain, as discussed below.~~ the transferability of tax credits, should make the financing market more robust.

Manufacturing and Labor Market Constraints

~~We are experiencing~~As recently as 2022, we experienced impacts from ~~the ongoing~~ labor ~~shortage~~shortages and ~~continue to face~~ challenges in hiring for our manufacturing ~~facilities, which is exacerbated by absences for any employees who are recovering from or have been exposed to COVID-19.~~facilities. While these constraints abated in 2023 and we ~~continue to dedicate resources to supporting our capacity expansion efforts,~~reduced headcount as part of a restructuring plan adopted in September 2023, we ~~are experiencing~~may still experience difficulties with hiring and retention, ~~particularly for~~and may face additional labor shortages in the future. The restructuring plan included (i) an optimization of our ~~new~~workforce across multiple functions, (ii) a relocation of a portion of our repair and overhaul department of our manufacturing and warehousing facility in ~~Fremont,~~Newark, Delaware, to Mexico, and (iii) a closure of a manufacturing, warehousing, research and development facility in Sunnyvale, California. According to the plan, 74

full-time employees and 48 contractors separated from the Company in September 2023. Additional 71 full-time employees and 8 contractors separated from the Company in October 2023. For additional information, please see Part I, Item I, Note 12 - Restructuring. In addition, the current inflationary environment has led to rising wages and labor ~~rates and~~costs as well as increased competition for labor. ~~To date, we have been able to mitigate any impact to production through a contingent workforce and other measures.~~ In the event these constraints return and we are unable to continue to mitigate the impacts of these challenges, it could delay the manufacturing and installation of our Energy Servers or Electrolyzers and we may be unable to meet customer demand, which ~~would~~could adversely impact our cash flows and results of operations, including ~~revenue~~our revenues and gross margin. ~~We expect~~

Installations and Maintenance of Energy Servers

During the ~~hiring~~first three quarters of 2023, our installation projects experienced some delays relating to, among other things, permitting, utility delays and ~~retention challenges arising from the labor shortages~~access to ~~continue for the foreseeable future.~~customer facilities. However, these delays did not significantly impact our revenue.

~~Supply Chain Constraints~~

We continue to see effects from the global supply chain disruptions and are experiencing supply chain challenges and logistics constraints. While we have not experienced any component shortages to date,If we are ~~facing pressures from longer lead times, shipping and freight delays, and increased costs~~delayed in or unable to perform maintenance, our previously installed Energy Servers would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. Further, due to the nature of raw materials. These dynamics could worsen as a result of continued increase in geopolitical instability. In addition, the current inflationary environment and conflict in Ukraine has led to an increase in the price of components and raw materials. In the eventour Energy Servers, if we are unable to ~~mitigate~~replace worn parts in accordance with our standard maintenance schedule, we may incur higher costs in the ~~impacts of~~future. For the nine months ended September 30, 2023, we experienced no significant delays ~~and/or price increases~~ in ~~raw materials, components and freight, it could delay the manufacturing and installation of~~servicing our Energy Servers and increase the cost of our Energy Server, which would adversely impact our cash flows and results of operations, including revenue and gross margin. We expect these supply chain challenges and logistics constraints to continue for the foreseeable future.Servers.

~~For additional information on our manufacturing and supply chain matters, see Part II, Item 7 -~~ ~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~ ~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.~~

~~COVID-19 Pandemic~~

We continue to monitor and adjust as appropriate our operations in response to the COVID-19 pandemic. We maintain protocols to minimize the risk of COVID-19 transmission within our facilities, including enhanced cleaning and masking if required by the local authorities, as well as providing testing for all employees. We will continue to follow CDC and local guidelines when notified of possible exposures.~~For more information regarding the risks posed to our company by the COVID-19 pandemic, refer to Part I, Item 1A,~~ ~~Risk Factors – Risks Related to Our Products and Manufacturing –Our business has been and continues to be adversely affected by the COVID-19 pandemic~~ ~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021~~.

Our Energy Server Product runs on a variety of fuels, including natural gas. The rising cost of natural gas increases the cost of our product to the end customer. To date, the potential impact of this on customer demand has been offset by the customer needs for resiliency and time to power that our Energy Server provides.

Environmental, Social and Governance (“ESG”)

We are committed to a goal of providing consistent returns to our stockholders while maintaining a strong sense of good corporate citizenship that places a high value on the environment, welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole. We believe that prioritizing, improving, and managing our ESG related risks, opportunities and programs help us to better create long-term value for our investors.

In April 2023, we released our ~~2021~~2022 Sustainability Report, ~~Solutions for a Decarbonized Future,~~Advancing the Mission of Decarbonization (the ~~“Report”~~“Sustainability Report”) ~~during the first quarter of 2022~~, using generally accepted ESG frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Sustainability Report also utilized certain Global Reporting Initiative standards and was mapped against the United Nations Sustainable Development Goals. We plan to issue ~~the Report~~a sustainability report on an annual basis. ~~Certain items within the Report will be updated~~

Our mission is to ~~investors to the extent they are considered meaningful and reflective of our mission – “To~~ make clean, reliable energy affordable for everyone in the ~~world”.~~

Weworld. To that end, we strive to empower businesses and communities to responsibly take charge of their ~~energy.~~energy while addressing both the causes and consequences of climate change. We aim to serve our customers with products that are resilient, providing uninterrupted power with predictable pricing ~~from fixed power prices~~ over the long-term, while addressing sustainability issues by ~~considering and~~ developing an increasingly broad portfolio of solutions ~~relating to causes and consequences of climate change.~~for decarbonization.

~~For further details of the~~The Sustainability Report ~~please refer to the following website:~~can be found on our website at ~~2021-bloom-energy-sustainability-report.pdf (bloomenergy.com)~~https://www.bloomenergy.com/sustainibility. ~~Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.~~

Inflation Reduction Act of 2022 -

For information on the IRA, which was signed into law on August 16, 2022, and its impact on our business, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Inflation Reduction Act of 2022 – New and Expanded Production and Tax Credits for Manufacturers and Projects to Support Clean Energy

~~On August 16, 2022, President Biden signed into law~~ section in our Annual Report on Form 10-K for the Inflation Reduction Act of 2022 (the “IRA”). The IRA contains provisions which we expect will have a significant impact on the development and financing of clean energy projects in the United States over the next ten years. The IRA includes a number of key changes relevant to clean energy in the United States, among them the extension of the Investment Tax Credit and Production Tax Credit and the addition of expanded tax credits for other technologies and for manufacturing of clean energy equipment as well as terms allowing parties to more easily monetize the tax credits. The IRA also includes some targeted incentives intended to encourage development in low-income communities and the use of domestically produced materials and compliance with certain prevailing wage requirements. The IRA contains a two-tiered credit-amount structure for many applicable tax credits. Specifically, many of the credits have a lower base credit amount that can be increased up to five times if the taxpayer can satisfy applicable prevailing wage or apprenticeship requirements. In general, under the prevailing wage requirements, the IRA requires all laborers, mechanics and workers to be paid the prevailing wage during project construction (and, during the credit term, for repairs and alterations). Separately and subject to certain exceptions, to meet the apprenticeship requirements, qualified apprentices have to perform an applicable percentage of total labor hours for project construction. Further, the IRA establishes certain options to cure the failure to meet either the prevailing wage or apprenticeship requirements.

~~Please refer to Note 1 -~~ ~~Nature of Business, Liquidity and Basis of Presentation~~ ~~for discussion of credits and incentive provisions implemented by the IRA relevant to us. We are currently assessing the impact of these provisions on our business.~~fiscal year ended December 31, 2022.

Liquidity and Capital Resources

~~While we improved our~~We raised cash and supplemented liquidity through financing activities with SK ecoplant in ~~2021,~~the first quarter of 2023 and issuing the 3% Green Notes due June 2028 in the second quarter of 2023. At the same time, we increased our working capital ~~spend~~spend. In the first three quarters of 2023, we built up inventory in preparation for more expected shipments in the ~~first half~~fourth quarter of ~~2022. We have entered into new leases~~2023. This enabled us to ~~maintain sufficient~~level load production and gain manufacturing ~~facilities to meet anticipated demand in 2022 and beyond, including new product line expansion.~~efficiency. In addition, we ~~also increased~~expanded our ~~working capital spend and resources~~warehouse space in Delaware to ~~enhance our marketing efforts and~~store more inventory to ~~expand into new geographies both domestically and internationally.~~

~~On August 10, 2022, pursuant~~meet the anticipated increase in demand. If this increase in demand does not materialize to the ~~Securities Purchase Agreement (“~~degree we anticipated, our liquidity condition may be adversely impacted.

On March 20, 2023, we entered into the ~~SPA”)~~Amended SPA, with SK ecoplant, notified us of its intent to exercise its option the Option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA) electing to purchase 13,491,701 shares (the “Second Tranche Shares”) at a purchase price of $23.05 per share, calculated as a 15% premium to the volume-weighted average closing price of the 20 consecutive trading day period immediately preceding the exercise of the option. The aggregate purchase price approximates cash proceeds to be received by us of $311.0 million, net of related incremental direct costs of $0.1 million. The payment for the Second Tranche Shares will be due the later of (i) December 6, 2022 and (ii) upon clearance under the HSR Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.

~~On August 19, 2022, we completed an underwritten public offering,~~ pursuant to which we issued and sold ~~13,000,000~~to SK ecoplant 13,491,701 shares of Series B RCPS for cash proceeds of $311.0 million, excluding issuance cost of $0.5 million.

On March 20, 2023, in connection with the Amended SPA, we also entered into the Loan Agreement, pursuant to which we were entitled to draw down on a loan from SK ecoplant with a maximum principal amount of $311.0 million, if SK ecoplant sent a redemption notice to us under the Amended SPA or otherwise had reduced any portion of its current holdings of our Class A ~~Common Stock at a price of $26.00 per share (the “Offering”). As a part~~common stock. On September 23, 2023, all 13,491,701 shares of the ~~Offering, the underwriters~~Series B RCPS were ~~provided a 30-day option to purchase an additional 1,950,000~~ automatically converted into

shares of our Class A ~~Common Stock at~~common stock. For further information on the ~~same price, less underwriting discounts and commissions, which was exercised contemporaneously~~strategic investment with SK ecoplant, see Part I, Item 1, Note 16 - SK ecoplant Strategic Investment.

On May 16, 2023, we issued the ~~Offering. The~~3% Green Notes with an aggregate principal amount of $632.5 million due June 2028, unless earlier repurchased, redeemed or converted, resulting in net cash proceeds of $613.0 million. On June 1, 2023, we used approximately $60.9 million of the net proceeds ~~received by us~~from this offering to redeem all of the outstanding principal amount of our 10.25% Senior Secured Notes due March 2027. The redemption price equaled 104% of the principal amount redeemed plus accrued and unpaid interest. We also used approximately $54.5 million of the net proceeds from the ~~Offering were $371.5 million, after deducting underwriting discounts~~offering to purchase the Capped Calls.

On August 24, 2023, as part of the PPA V Upgrade, we paid off the outstanding balance and ~~commissions~~related accrued interest of ~~$16.5~~$118.5 million and ~~incremental costs directly attributable to the Offering~~$0.5 million, respectively, of ~~$0.7 million.~~our 3.04% Senior Secured Notes due June 30, 2031.

For further information on issuance of 3% Green Notes, redemption of our 10.25% Senior Secured Notes, and repayment of 3.04% Senior Secured Notes, please see Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements.

As of September 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$492.1~~$557.4 million. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market ~~funds.~~funds of $489.4 million. We maintain these balances with high credit quality counterparties, ~~continually~~regularly monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.

As of September 30, ~~2022,~~2023, we had ~~$287.5~~$840.5 million of ~~total outstanding~~ recourse debt, ~~$195.9~~$1.5 million of non-recourse debt and ~~$8.9~~$8.8 million of other long-term liabilities. As of September 30, 2023, all of our debt was classified as long-term liabilities. For a complete description of our outstanding debt, ~~please~~please see Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements ~~in Part I, Item 1,~~ ~~Financial Statements (unaudited)~~.

The combination of our ~~existing~~ cash and cash equivalents and cash flow to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or are not received in a timely manner to satisfy our near-term or future cash needs, we may require additional capital from equity or debt financings to fund our operations, ~~in particular,~~ our manufacturing capacity, product development and market expansion requirements and to timely respond to competitive market pressures or strategic opportunities, ~~or otherwise.~~among other things. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. WeDuring the three and nine months ended September 30, 2023, we factored $108.0 million and $167.6 million of accounts receivable, respectively. However, we may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional ~~financings~~financing may place limits on our financial and operating flexibility. Although currently we only have fixed-rate convertible notes on the balance sheet, rising interest rates may increase our overall cost of capital, if and when we refinance those notes. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.

Our future capital requirements ~~will depend~~depends on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds and the need for additional manufacturing space, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our products, our ability to secure financing for customer use of our Energy Servers, the timing of installations and of inventory build in anticipation of future sales and installations, and overall economic ~~conditions including the impact of COVID-19 on our ongoing and future operations.~~conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through an equity or debt financing. Failure to obtain this ~~financing or~~ financing in future quarters may affect our results of operations, including ~~revenue~~our revenues and cash flows.

~~As of September 30, 2022, the current portion of our total debt is $28.7 million, of which $15.9 million is outstanding non-recourse debt.~~

A summary of our consolidated sources and uses of cash, cash equivalents and restricted cash was as follows (in thousands):


		Nine Months Ended September 30,				Nine Months Ended September 30,
		2022		2021				2023			2022
Net cash (used in) provided by :

Net cash (used in) provided by:							Net cash (used in) provided by:
Operating activities	Operating activities	$	(168,453)	$	(107,956)		Operating activities		$	(494,364)		$	(168,453)
Investing activities	Investing activities	(80,907)		(41,511)			Investing activities		(67,482)			(80,907)
Financing activities	Financing activities	305,211		53,130			Financing activities		682,161			305,211

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Net cash provided by (used in) our PPA Entities, which are incorporated into the condensed consolidated statements of cash flows, was as follows (in thousands):


								Nine Months Ended September 30,
		Nine Months Ended September 30,				2023		2022
		2022		2021
PPA Entities ¹	PPA Entities ¹						PPA Entities ¹
Net cash provided by PPA operating activities	Net cash provided by PPA operating activities	$	95,445	$	15,751		Net cash provided by PPA operating activities	$	10,036	$	95,445
Net cash used in PPA financing activities	Net cash used in PPA financing activities	(103,546)		(17,641)			Net cash used in PPA financing activities	(23,594)		(103,546)

1 The PPA ~~Entities'~~Entities’ operating and financing cash flows are a subset of our consolidated cash flows and represent the stand-alone cash flows prepared in accordance with U.S. GAAP. Operating activities consist principally of cash used to run the operations of the PPA Entities, the purchase of Energy Servers from us and principal reductions in loan balances. Financing activities consist primarily of changes in debt carried by our PPAs, and payments from and distributions to noncontrolling partnership interests. We believe this presentation of net cash provided by (used in) PPA activities is useful to provide the reader with the impact to consolidated cash flows of the PPA Entities in which we have only a minority interest. In August 2023, we sold our PPA V entity.

Operating Activities

Our operating activities ~~have~~ consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities, or working capital. Net cash used in operating activities during the nine months ended September 30, 2023 was $494.4 million, an increase of $325.9 million compared to the prior year period. The increase in cash used in operating activities during the nine months ended September 30, ~~2022~~2023, as compared to the prior year period, was primarily ~~the~~a result of an increase in ~~our net loss and a decrease in our net~~ working capital of ~~$70.6~~$489.5 million due to (1) an increase in inventory levels of $206.3 million to support future demand, (2) an increase in contract assets of $97.1 million, which was driven by the ~~nine months ended September 30, 2022~~PPA V Upgrade, (3) an increase in accounts receivable of $83.9 million which was primarily due to the timing of revenue transactions and corresponding collections, ~~the increase in inventory levels to support future demand,~~ and (4) the timing of payments to vendors.

Investing Activities

Our investing activities have consisted of capital expenditures, ~~that include investment~~including investments to increase our production capacity. We expect to continue such investing activities as our business grows. Cash used in investing activities ~~of $80.9 million~~ during the nine months ended September 30, ~~2022~~2023 was $67.5 million, an increase of $13.4 million compared to the prior year period, and was primarily ~~the result of~~due to expenditures on tenant improvements for a newly leased engineering and manufacturing building in Fremont, ~~California.~~California, opened in July 2022. We expect to continue to make capital expenditures over the next few quarters to ~~prepare~~expand production capacity at our new manufacturing facility in Fremont, California, ~~for production,~~ which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.

Financing Activities

Historically, our financing activities ~~have~~ consisted of borrowings and repayments of debt, proceeds and repayments of financing obligations, distributions paid to noncontrolling interests, contributions from noncontrolling interests, and ~~the~~ proceeds from the ~~issuance~~issuances of our common stock. Net cash provided by financing activities during the nine months ended September 30, ~~2022~~2023, was ~~$305.2~~$682.2 million, an increase of ~~$252.1~~$377.0 million compared to the prior year ~~period,~~period. The increase was primarily due to ~~the~~(1) proceeds from ~~public share offering~~the issuance of ~~$372.0~~the 3% Green Notes of $613.0 million, ~~and~~net of paid debt issuance costs of $19.5 million, (2) proceeds from the issuance of redeemable convertible preferred stock of $310.6 million, net of paid debt issuance costs of $0.4 million, as a result of SK ecoplant Second Tranche Closing, (3) proceeds from the issuance of common stock of ~~$15.2~~$16.0 million, (4) a contribution from noncontrolling interest of $7.0 million, and (5) proceeds from financing obligations of $2.7 million. This was partially offset by (1) a settlement of the 3.04% Senior Secured Notes due June 30, 2031 of $118.5 million as a result of PPA V Upgrade, (2) repayment ~~debt related to PPA IIIa~~ of ~~$30.2 million and other~~recourse debt of ~~$17.3~~$72.9 million, ~~and~~(3) purchases of Capped Calls of $54.5 million, (4) repayment of financing obligations of ~~$28.8~~$13.5 million, and (5) the acquisition of all interest in PPA V for $6.9 million net of distributions to Intel’s noncontrolling interest of $2.3 million.

We believe we have the sufficient capital to operate our business over the next 12 months, including the completion of the build out of our manufacturing facilities. Our working capital was strengthened with the initial and subsequent investments by SK ecoplant and our public offering. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part I, Item 1, Note 7 - Outstanding Loans and Security Agreements~~in Part 1, Item 1,~~ ~~Financial Statements (unaudited);~~ of this Quarterly Report on Form 10-Q and Part I, Item 1A, Risk Factors - Risks Related to Our Liquidity - Our ~~substantial~~ indebtedness, and restrictions imposed by the agreements governing our and our PPA ~~Entities'~~Entities’ outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs, and We may not be able to generate sufficient cash to meet our debt service obligations or our growth plans section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for more information regarding the terms of and risks associated with our debt.

Purchase and Financing Options

For information about our purchase and financing options, see Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, Purchase and Financing Options sectionin our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021for more information regarding the terms of and risks associated with our debt.~~2022.

Performance Guarantees

As of

September 30, 2023

~~Purchase~~, we had incurred no liabilities due to failure to repair or replace our Energy Servers pursuant to any performance warranties made under operations and ~~Financing Options~~

maintenance agreements (“O&M Agreements”). For ~~information on purchase~~O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $552.0 million (including $424.0 million related to portfolio financing entities and ~~financing options, see~~$128.0 million related to all other transactions, and include payments for both low output and low efficiency), and our aggregate remaining potential payments related to these underperformance obligations was approximately $481.4 million as of September 30, 2023. For the ~~Purchasing and Financing Options~~ ~~section in Part II, Item 7 -~~ ~~Management's Discussion and Analysis~~nine months ended September 30, 2023, we made performance guarantee payments of ~~Financial Condition and Results of Operations~~ ~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.~~$24.4 million.

International Channel Partners

There were no significant changes in our international channel partners during the ~~three and~~ nine months ended September 30, ~~2022.~~2023. For information on international channel partners, see ~~the~~ ~~International Channel Partners~~ ~~section in~~ Part II, Item 7 - ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, International Channel Partners section in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~

2022.

3741

Key Operating Metrics - Comparison of the Three and Nine Months Ended September 30, ~~2022~~2023 and ~~2021~~

2022

For a description of the key operating metrics we use to evaluate business activity, to measure performance, to develop financial forecasts and to make strategic decisions, see Part II, Item 7, ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, - Key Operating Metrics section in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Product Acceptances

The product and megawatts accepted in the three and nine months ended September 30, 2023 and 2022 were as follows:


	Three Months Ended September 30,	Change		Nine Months Ended September 30,			Change
		2023	2022	Amount	%		2023	2022	Amount	%

Product accepted		813	581	232	39.9	%	1,931	1,427	504	35.3	%
Megawatts accepted, net		81	58	23	39.9	%	193	143	50	35.3	%

Product accepted increased approximately by 232 systems, or 39.9%, and 504 systems, or 35.3%, for the three and nine months ended September 30, 2023, respectively, as compared to the prior year periods, which is the equivalent of 23 megawatts and 50 megawatts, respectively. Acceptance volume increased as demand increased for the Energy Servers.

The increase in acceptances of 193 megawatts achieved from December 31, 2022 to September 30, 2023 was added to our installed base and, therefore, increased our total megawatts accepted, net, from 973 megawatts to 1,166 megawatts.

Purchase Options

Our customers have several purchase options for our Energy Servers. The portion of acceptances attributable to each purchase option in the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 was as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021

Direct Purchase 99 % 99 % 100 % 99 %
Traditional Lease 1 % — % — % — %
Managed Services — % 1 % — % 1 %


	Three Months Ended September 30,			Nine Months Ended September 30,
		2023		2022		2023		2022

Direct purchase (including third-party PPAs and international channels)		100	%	99	%	98	%	100	%
Traditional lease		—	%	1	%	2	%	—	%

The portion of total revenue attributable to each purchase option in the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 was as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021

Direct Purchase 91 % 86 % 89 % 88 %
Traditional Lease 1 % 1 % 1 % 1 %
Managed Services 5 % 8 % 6 % 6 %
Bloom Electrons 3 % 5 % 4 % 5 %

~~Product Acceptances~~

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 Amount % 2022 2021 Amount %

Product accepted during the period
(in 100 kilowatt systems) 581 353 228 64.6 % 1,427 1,144 283 24.7 %

Product accepted increased approximately 228 systems, or 64.6%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Acceptance volume increased as demand increased for the Bloom Energy servers.

Product accepted increased approximately 283 systems, or 24.7%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Acceptance volume increased as demand increased for the Bloom Energy servers.

Megawatts accepted, net, increased approximately 208 megawatts, or 30.4%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase in acceptances achieved from September 30, 2021 to September 30, 2022 was added to our installed base and, therefore, increased our megawatts accepted, net, from 682 megawatts to 890 megawatts.


	Three Months Ended September 30,			Nine Months Ended September 30,
		2023		2022		2023		2022

Direct purchase (including third-party PPAs and international channels)		94	%	91	%	90	%	89	%
Traditional lease		—	%	1	%	1	%	1	%
Managed services		4	%	5	%	7	%	6	%
Portfolio financings		2	%	3	%	2	%	4	%

3842

Costs Related to Our Products

Total product related costs for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 was as follows:


		Three Months Ended September 30,				Change			Nine Months Ended September 30,				Change				Three Months Ended September 30,	Change				Nine Months Ended September 30,				Change
		2022		2021		Amount	%		2022		2021		Amount	%				2023		2022		Amount		%		2023		2022		Amount		%

Product costs of product accepted in the period	Product costs of product accepted in the period	$2,344/kW		$2,434/kW		$-90/kW	(3.7)	%	$2,438/kW		$2,362/kW		$76/kW	3.2	%	Product costs of product accepted in the period		$2,040/kW		$2,456/kW		($416/kW)		(16.9)	%	$2,126/kW		$2,485/kW		($359/kW)		(14.4)	%
Period costs of manufacturing related expenses not included in product costs (in thousands)	Period costs of manufacturing related expenses not included in product costs (in thousands)	$	15,496	$	7,774	$7,722	99.3	%	$	38,672	$	19,653	$19,019	96.8	%	Period costs of manufacturing related expenses not included in product costs (in thousands)		$	17,330	$	15,496	$	1,834	11.8	%	$	47,403	$	38,672	$	8,731	22.6	%
Installation costs on product accepted in the period	Installation costs on product accepted in the period	$465/kW		$726/kW		$-261/kW	(36.0)	%	$398/kW		$584/kW		$-186/kW	(31.8)	%	Installation costs on product accepted in the period		$318/kW		$488/kW		($170/kW)		(34.8)	%	$402/kW		$405/kW		($3/kW)		(0.7)	%

Product costs of product accepted decreased ~~approximately $90~~by $416 per kilowatt, or ~~3.7%~~16.9%, and $359 per kilowatt, or 14.4%, for the three and nine months ended September 30, ~~2022~~2023, as compared to the ~~three months ended September 30, 2021. This~~prior year periods, respectively. The decrease in ~~cost is~~costs was primarily driven by our ~~ongoing cost reduction~~continued efforts to reduce material costs, ~~labor and overhead through improved automation of our manufacturing facilities, our increased facility utilization and our ongoing material cost reduction programs with our vendors.~~

Product costs of product accepted increased approximately $76 per kilowatt, or 3.2%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This increase in cost is primarily driven by some of the cost pressures seen in the external inflationary environment with commodity pricing and logistics increasing significantly from one year ago. Our ongoing cost reduction efforts to reduce material costs, labor and overhead through improved automation of our manufacturing facilities, our increased facility utilization and our ongoing materialimplement cost reduction programs with our vendors, ~~continued but were offset by the temporary increases in cost that we experienced.~~and reduce our labor and overhead costs through increased volume, improved processes and automation at our manufacturing facilities.

Period costs of manufacturing related expenses increased ~~approximately $7.7~~by $1.8 million, or ~~99.3%~~11.8%, and $8.7 million, or 22.6%, for the three and nine months ended September 30, ~~2022~~2023, as compared to the ~~three months ended September 30, 2021.~~prior year periods, respectively. Our period costs of manufacturing related expenses increased primarily as a result of costs incurred to support capacity expansion efforts, which are expected to be brought online in future ~~periods.~~

~~Period costs~~periods, partially offset by a $3.1 million release of ~~manufacturing related expenses increased approximately $19.0 million, or 96.8%, for the nine months ended~~a liability as of September 30, ~~2022 compared~~2023 related to a grant from the ~~nine months ended September 30, 2021. Our~~Delaware Economic Development Authority upon the end of the measurement period ~~costs of manufacturing related expenses increased primarily as a result of costs incurred to support capacity expansion efforts which are expected to be brought online~~stipulated in ~~future periods.~~the grant agreement.

Installation costs on product accepted decreased ~~approximately $261~~by $170 per kilowatt, or ~~36.0%~~34.8%, and $3 per kilowatt, or 0.7%, for the three and nine months ended September 30, ~~2022~~2023, as compared to the ~~three months ended September 30, 2021. This decrease in cost is primarily driven by the change in the mix of sites requiring Bloom installation and changes in installation process.~~prior year periods, respectively. Each customer site is ~~different~~unique and installation costs can vary due to a number of factors, including site complexity, size, and location of gas, ~~etc.~~among other factors. As such, installation on a per kilowatt basis can vary significantly from ~~period-to-period. In addition, some customers handle their own installation for which we have little~~period to ~~no installation cost.~~

~~Installation costs on product accepted decreased approximately $186 per kilowatt, or 31.8%, for~~period. For the ~~nine~~three and none months ended September 30, ~~2022 as compared to the nine months ended September 30, 2021. This~~2023, this decrease in cost iswas primarily driven by the change in the mix of sites requiring Bloom installation. Each customer site is different and installation costs can vary due to a number of factors, including site complexity, size, location of gas, etc. As such, installation on a per kilowatt basis can vary significantly from period-to-period. In addition, some customers handle their own installation for which we have little to no installation cost.

Results of Operations

A discussion regarding the comparison of our financial condition and results of operations for the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 is presented below.

Revenue


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
		2022		2021		Amount		%		2022		2021		Amount		%			2023		2022		Amount		%		2023		2022		Amount		%
		(dollars in thousands)								(dollars in thousands)									(dollars in thousands)
Product	Product	$	213,243	$	128,550	$	84,693	65.9	%	$	520,415	$	413,347	$	107,068	25.9	%	Product	$	304,976	$	213,243	$	91,733	43.0	%	$	713,427	$	520,415	$	193,012	37.1	%
Installation	Installation	22,682		22,172		510		2.3	%	48,964		53,710		(4,746)		(8.8)	%	Installation	21,916		22,682		(766)		(3.4)	%	66,762		48,964		17,798		36.3	%
Service	Service	37,347		39,251		(1,904)		(4.9)	%	111,012		111,375		(363)		(0.3)	%	Service	47,535		37,347		10,188		27.3	%	130,496		111,012		19,484		17.6	%
Electricity	Electricity	19,002		17,255		1,747		10.1	%	56,158		51,273		4,885		9.5	%	Electricity	25,841		19,002		6,839		36.0	%	65,869		56,158		9,711		17.3	%
Total revenue	Total revenue	$	292,274	$	207,228	$	85,046	41.0	%	$	736,549	$	629,705	$	106,844	17.0	%	Total revenue	$	400,268	$	292,274	$	107,994	36.9	%	$	976,554	$	736,549	$	240,005	32.6	%

Total Revenue

Total revenue increased by ~~$85.0~~$108.0 million, or ~~41.0%~~36.9%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This increase was driven by a ~~$84.7~~$91.7 million increase in product revenue, a ~~$1.7~~$10.2 million increase in service revenue, and a $6.8 million increase in electricity revenue, ~~a $0.5 million increase in installation revenue,~~partially offset by a ~~$1.9~~$0.8 million decrease in ~~service~~installation revenue.

Total revenue increased by ~~$106.8~~$240.0 million, or ~~17.0%~~32.6%, for the nine months ended September 30, 2023, as compared to the prior year period. This increase was driven by a $193.0 million increase in product revenue, a $19.5 million increase in service revenue, a $17.8 million increase in installation revenue, and a $9.7 million increase in electricity revenue.

Product Revenue

Product revenue increased by $91.7 million, or 43.0%, for the three months ended September 30, 2023, as compared to the prior year period. Product revenue increased by 39.9%, primarily driven by higher product acceptances and improved product pricing due to increased demand for our products--including the PPA V Upgrade--resulting in revenue from new Energy Servers of $151.6 million. The increase was partially offset by revenue recognized from PPA IIIa (the “PPA IIIa Upgrade”) of $12.7 million for the three months ended September 30, 2022.

Product revenue increased by $193.0 million, or 37.1%, for the nine months ended September 30, 2023, as compared to the prior year period. The product revenue increase was primarily driven by a 35.3% increase in product acceptances due to increased demand for our products and the PPA V Upgrade, resulting in revenue from new Energy Servers of $151.6 million, partially offset by revenue recognized from the PPA IIIa Upgrade of $49.6 million for the nine months ended September 30, 2022.

Installation Revenue

Installation revenue decreased by $0.8 million, or 3.4%, for the three months ended September 30, 2023, as compared to the prior year period. This decrease in installation revenue was primarily driven by the change in the mix of product acceptances requiring installations by us in the three months ended September 30, 2023, and the revenue recognized from the PPA IIIa Upgrade of $2.1 million for the three months ended September 30, 2022, partially offset by the revenue recognized from the PPA V Upgrade of $9.5 million.

Installation revenue increased by $17.8 million, or 36.3%, for the nine months ended September 30, 2023, as compared to the prior year period. This increase in installation revenue was primarily driven by the revenue recognized from the PPA V Upgrade of $9.5 million and the change in the mix of product acceptances requiring installations by us in the nine months ended September 30, 2023, partially offset by revenue recognized from the PPA IIIa Upgrade of $3.2 million for the nine months ended September 30, 2022.

Service Revenue

Service revenue increased by $10.2 million, or 27.3%, for the three months ended September 30, 2023, as compared to the prior year period. This increase was primarily driven by ~~a $107.1~~181 megawatts of Energy Servers reaching full power in the past year, which contributed to an $11.3 million increase in ~~product~~ revenue ~~and a $4.9 million increase in electricity revenue,~~from maintenance contracts associated with our fleet of Energy Servers, partially offset by ~~a $4.7 million decrease in installation revenue and a $0.4 million decrease in service revenue.~~the impact of product performance guarantees of $1.1 million.

~~Product Revenue~~

~~Product~~Service revenue increased by ~~$84.7~~$19.5 million, or 65.9%, for the three months ended September 30, 2022 as compared to the prior year period. The product revenue increase was driven primarily by a 64.6% increase in product acceptances resulting from higher demand in existing markets and revenue recognized from the PPA 3a Upgrade of $12.7 million.

~~Product revenue increased by $107.1 million, or 25.9%~~17.6%, for the nine months ended September 30, 2022 as compared to the prior year period. The product revenue increase was driven primarily by a 24.7% increase in product acceptances resulting from higher demand in existing markets and revenue recognized from the PPA IIIa Upgrade of $49.6 million. We expect our product revenue to grow in the future as we expand our addressable markets.

~~Installation Revenue~~

~~Installation revenue increased by $0.5 million, or 2.3%, for the three months ended September 30, 2022~~2023, as compared to the prior year period. This increase ~~in installation revenue~~ was primarily driven by ~~the revenue recognized from the PPA IIIa Upgrade~~181 megawatts of ~~$2.1 million and the change in mix of product acceptances requiring installations by us, as more sites had installation costs~~Energy Servers reaching full power in the ~~three months ended September 30, 2022.~~

~~Installation revenue decreased by $4.7 million, or 8.8%, for the nine months ended September 30, 2022 as compared to the prior~~past year, ~~period. This decrease in installation revenue was driven by the change in mix of product acceptances requiring installations by us, as fewer sites had installation costs in the nine months ended September 30, 2022, offset by the revenue recognized from the PPA IIIa Upgrade of $3.2 million.~~

~~Service Revenue~~

~~Service revenue decreased by $1.9 million, or 4.9%, for the three months ended September 30, 2022 as compared to the prior year period. This decrease was primarily due~~which contributed to a ~~one-off~~$31.4 million increase in revenue ~~increase~~from maintenance contracts associated with our fleet of ~~$2.7 million in the three months ended September 30, 2021 and~~Energy Servers, partially offset by the impact of product performance guarantees ~~partially offset by the 64.6% increase~~of $10.4 million and a $0.7 million decrease in ~~acceptances plus the maintenance contract renewals associated with the increase in our fleet of Energy Servers.~~

Service revenue decreased by $0.4 million, or 0.3%, for the nine months ended September 30, 2022 as compared to the prior year period. This decrease was primarily due to a one-off revenue increase of $2.7 million in the three months ended September 30, 2021 and the impact of product performance guarantees, partially offset by the 24.7% increase in acceptances plus the maintenance contract renewals associated with the increase in our fleet of Energy Servers. We expect our service revenue to grow in the future.state incentives.

Electricity Revenue

Electricity revenue includes both revenue from contracts with customers and revenue from contracts that contain leases.

Electricity revenue increased by ~~$1.7~~$6.8 million, or ~~10.1%~~36.0%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year period, primarily due to an increase in electricity revenue of $1.1 million from old Energy Servers as part of the PPA V Upgrade and an increase in installed units as a result of ~~the~~an increase in Managed Services transactions recorded inbetween the ~~second half~~third quarter of fiscal year ~~2021.~~2021 and the third quarter of fiscal 2023.

Electricity revenue increased by ~~$4.9~~$9.7 million, or ~~9.5%~~17.3%, for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period, primarily due to an increase in electricity revenue of $1.1 million from old Energy Servers as part of the PPA V Upgrade and an increase in installed units as a result of ~~the~~an increase in Managed Services transactions recorded inbetween the ~~second half~~third quarter of fiscal year ~~2021.~~2021 and the third quarter of fiscal 2023.

Cost of Revenue


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
		2022		2021		Amount		%		2022		2021		Amount		%			2023		2022		Amount		%		2023		2022		Amount		%
		(dollars in thousands)								(dollars in thousands)									(dollars in thousands)
Product	Product	$	158,176	$	93,704	$	64,472	68.8	%	$	393,337	$	289,889	$	103,448	35.7	%	Product	$	182,832	$	158,176	$	24,656	15.6	%	$	457,591	$	393,337	$	64,254	16.3	%
Installation	Installation	28,333		25,616		2,717		10.6	%	57,836		66,756		(8,920)		(13.4)	%	Installation	25,902		28,333		(2,431)		(8.6)	%	77,881		57,836		20,045		34.7	%
Service	Service	41,792		39,586		2,206		5.6	%	124,646		111,269		13,377		12.0	%	Service	57,370		41,792		15,578		37.3	%	165,877		124,646		41,231		33.1	%
Electricity	Electricity	13,029		11,439		1,590		13.9	%	83,819		32,913		50,906		154.7	%	Electricity	139,378		13,029		126,349		969.8	%	169,802		83,819		85,983		102.6	%
Total cost of revenue	Total cost of revenue	$	241,330	$	170,345	$	70,985	41.7	%	$	659,638	$	500,827	$	158,811	31.7	%	Total cost of revenue	$	405,482	$	241,330	$	164,152	68.0	%	$	871,151	$	659,638	$	211,513	32.1	%

Total Cost of Revenue

Total cost of revenue increased by ~~$71.0~~$164.2 million, or ~~41.7%~~68.0%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period primarily~~period. The increase was driven by a ~~$64.5~~$126.3 million increase in cost of electricity revenue, a $24.7 million increase in cost of product revenue and a $15.6 million increase in cost of service revenue, partially offset by a $2.4 million decrease in cost of installation revenue.

Total cost of revenue increased by $211.5 million, or 32.1%, for the nine months ended September 30, 2023, as compared to the prior year period. The increase was driven by a $86.0 million increase in cost of electricity revenue, a $64.3 million increase in cost of product revenue, a ~~$2.7 million increase in costs of installation revenue, a $2.2~~$41.2 million increase in cost of service revenue, and a ~~$1.6~~$20.0 million increase in cost of electricity revenue. The increase was primarily driven by the increased freight charges and other supply chain-related pricing pressures and costs incurred to support capacity expansion efforts which are expected to be brought online in future periods. This increase was partially offset by our ongoing cost reduction efforts to reduce material costs in conjunction with our suppliers and our reduction in labor and overhead costs through increased volume, improved processes and automation at our manufacturing facilities.

Total cost of revenue increased by $158.8 million, or 31.7%, for the nine months ended September 30, 2022 as compared to the prior year period primarily driven by a $103.4 million increase in cost of product revenue, a $50.9 million increase in cost of electricity revenue, a $13.4 million increase in cost of service revenue, offset by a $8.9 million decrease in costs of installation revenue. The increase was primarily driven by the write-off of old Energy Servers of $44.8 million as a result of the PPA IIIa Upgrade, increased freight charges and other supply chain-related pricing pressures and costs incurred to support capacity expansion efforts which are expected to be brought online in future periods. This increase was partially offset by our ongoing cost reduction efforts to reduce material costs in conjunction with our suppliers and our reduction in labor and overhead costs through increased volume, improved processes and automation at our manufacturing facilities.

Cost of Product Revenue

Cost of product revenue increased by ~~$64.5~~$24.7 million, or ~~68.8%~~15.6%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year period. The increase in cost of product revenue ~~increase~~ was ~~in line with the increase in product revenue and was~~primarily driven ~~primarily~~ by a ~~64.6%~~39.9% increase in product acceptances, including the effect of $62.6 million from the sale of new Energy Servers as a result of the PPA V Upgrade. This increase was partially offset by (1) a lower cost per unit attributable to our ongoing efforts to reduce material costs, (2) cost reduction programs with our vendors and a reduction in labor and overhead costs due to increased volume, (3) improved processes and automation at our manufacturing facilities, (4) the cost of sales of new Energy Servers of $5.7 million as a result of the PPA IIIa Upgrade ~~increased freight charges~~for the three months ended September 30, 2022, and ~~other supply chain-related pricing pressures and~~(5) the release of $3.1 million of grant liability recognized against payroll related costs incurred in ~~support~~the third quarter of upcoming capacity expansion efforts. This increase was partially offset by our ongoing cost reduction efforts to reduce material costs in conjunction with our suppliers and our reduction in labor and overhead costs through increased volume, improved processes and automation at our manufacturing facilities.fiscal 2023.

Cost of product revenue increased by ~~$103.4~~$64.3 million, or ~~35.7%~~16.3%, for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period. The increase in cost of product revenue ~~increase~~ was primarily driven ~~primarily~~ by a ~~24.7%~~35.3% increase in product acceptances, including the effect of $62.6 million from the sale of new Energy Servers as a result of the PPA V Upgrade. This increase was partially offset by (1) a lower cost per unit attributable to our ongoing efforts to reduce material costs, (2) cost reduction programs with our vendors and a reduction in labor and overhead costs due to increased volume, (3) improved processes and automation at our manufacturing facilities, (4) the cost of sales of new Energy Servers of $21.6 million as a result of the PPA IIIa Upgrade ~~increased freight charges~~for the nine months ended September 30, 2022, and ~~other supply chain-related pricing pressures and~~(5) the release of $3.1 million of grant liability recognized against payroll related costs incurred in ~~support~~the third quarter of upcoming capacity expansion efforts. This increase was partially offset by our ongoing cost reduction efforts to reduce material costs in conjunction with our suppliers and our reduction in labor and overhead costs through increased volume, improved processes and automation at our manufacturing facilities.fiscal 2023.

Cost of Installation Revenue

Cost of installation revenue ~~increased~~decreased by ~~$2.7~~$2.4 million, or ~~10.6%~~8.6%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This decrease was driven by the change in the mix of product acceptances requiring Bloom Energy installations, as fewer sites had installation costs in the three months ended September 30, 2023 compared to the prior year period. The decrease was partially offset by the cost of installation revenue of $7.4 million as a result of PPA V Upgrade for the three months ended September 30, 2023.

Cost of installation revenue increased by $20.0 million, or 34.7%, for the nine months ended September 30, 2023, as compared to the prior year period. This increase was driven by the change in the mix of product acceptances requiring Bloom Energy installations, as more sites had installation costs in the ~~three~~nine months ended September 30, ~~2022.~~

~~Cost~~2023 compared to the prior year period, and the cost of installation revenue ~~decreased by $8.9~~of $7.4 million ~~or 13.4%,~~as a result of the PPA V Upgrade for the nine months ended September 30, 2022 as compared to the prior year period. This decrease was driven by the change in mix of product acceptances requiring Bloom Energy installations, as fewer sites had installation costs in the nine months ended September 30, 2022.2023.

Cost of Service Revenue

Cost of service revenue increased by ~~$2.2~~$15.6 million, or ~~5.6%~~37.3%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This increase was primarily due to the deployment of field replacement units, partially offset by (1) cost reductions and our actions to proactively manage fleet ~~optimizations.~~optimizations and (2) a portion of released grant liability of $2.9 million recognized against payroll related costs incurred in the third quarter of fiscal 2023.

Cost of service revenue increased by ~~$13.4~~$41.2 million, or ~~12.0%~~33.1%, for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period. This increase was primarily due to the deployment of field replacement units, partially offset by (1) cost reductions and our actions to proactively manage fleet ~~optimizations.~~optimizations and (2) the release of $2.9 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023.

Cost of Electricity Revenue

Cost of electricity revenue includes both cost of revenue from contracts with customers and cost of revenue from contracts that contain leases.

Cost of electricity revenue increased by ~~$1.6~~$126.3 million, or ~~13.9%~~969.8%, for the three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period,~~period. This increase was primarily ~~due to the increase in installed units~~ driven by ~~Managed Services transactions recorded in~~ the ~~second half~~impairment of ~~fiscal year 2021.~~old Energy Servers of $123.7 million as a result of the PPA V Upgrade.

Cost of electricity revenue increased by ~~$50.9~~$86.0 million, or ~~154.7%~~102.6%, for the nine months ended September 30, ~~2022~~2023, as compared to the prior year ~~period,~~period. This increase was primarily ~~due to~~driven by the ~~write-off~~impairment of old Energy Servers of $123.7 million as a result of the PPA V Upgrade, partially offset by the impairment of old Energy Servers of $44.8 million ~~as a result of~~due to the PPA IIIa Upgrade ~~and an increase in installed units driven by Managed Services transactions recorded~~ in the ~~second half~~third quarter of fiscal year ~~2021.~~2022.

Gross Profit and Gross Margin


	Three Months Ended September 30,						Change		Nine Months Ended September 30,						Change
	2023			2022					2023			2022
	(dollars in thousands)
Gross profit (loss):
Product	$	122,144		$	55,067		$	67,077	$	255,836		$	127,078		$	128,758
Installation	(3,986)			(5,651)			1,665		(11,119)			(8,872)			(2,247)
Service	(9,835)			(4,445)			(5,390)		(35,381)			(13,634)			(21,747)
Electricity	(113,537)			5,973			(119,510)		(103,933)			(27,661)			(76,272)
Total gross profit (loss)	$	(5,214)		$	50,944		$	(56,158)	$	105,403		$	76,911		$	28,492

Gross margin:
Product	40		%	26		%			36		%	24		%
Installation	(18)		%	(25)		%			(17)		%	(18)		%
Service	(21)		%	(12)		%			(27)		%	(12)		%
Electricity	(439)		%	31		%			(158)		%	(49)		%
Total gross margin	(1)		%	17		%			11		%	10		%

4246

~~Gross Profit (Loss) and Gross Margin~~

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 2022 2021
(dollars in thousands)
Gross profit (loss):
Product $ 55,067 $ 34,846 $ 20,221 $ 127,078 $ 123,458 $ 3,620
Installation (5,651) (3,444) (2,207) (8,872) (13,046) 4,174
Service (4,445) (335) (4,110) (13,634) 106 (13,740)
Electricity 5,973 5,816 157 (27,661) 18,360 (46,021)
Total gross profit (loss) $ 50,944 $ 36,883 $ 14,061 $ 76,911 $ 128,878 $ (51,967)
Gross margin:
Product 26 % 27 % 24 % 30 %
Installation (25) % (16) % (18) % (24) %
Service (12) % (1) % (12) % — %
Electricity 31 % 34 % (49) % 36 %
Total gross margin 17 % 18 % 10 % 20 %

Total Gross Profit

Gross profit ~~improved~~decreased by ~~$14.1~~$56.2 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period which~~period. This change was primarily due to a $119.5 million decrease in electricity gross profit, primarily driven by the ~~$20.2~~impairment of old Energy Servers of $123.7 million as a result of the PPA V Upgrade, and a $5.4 million decrease in service gross profit, partially offset by a $67.1 million increase in product gross profit, primarily due to a 39.9% increase in product acceptances resulting from higher demand in existing markets and the PPA V Upgrade, and an improvement in installation gross loss by $1.7 million.

Gross profit increased by $28.5 million in the nine months ended September 30, 2023, as compared to the prior year period. This change was mostly due to a $128.8 million increase in product gross profit, primarily driven by ~~an 64.6%~~a 35.3% increase in product acceptances resulting from higher demand in existing markets and the PPA V Upgrade, partially offset by a $76.3 million decrease in electricity gross profit, primarily as a result of the impairment of old Energy Servers of $123.7 million as part of the PPA V Upgrade, and a $21.7 million and a $2.2 million improvement in service gross loss and installation gross loss, respectively. Other factors contributing to the gross profit improvement were (1) our ongoing cost reduction efforts to reduce material costs, ~~in conjunction with our suppliers and~~(2) our reduction in labor and overhead ~~costs through~~unit cost due to increased volume, and (3) improved processes and automation at our manufacturing facilities.

Product Gross Profit

Product gross profit ~~decreased~~increased by ~~$52.0~~$67.1 million in the ~~nine~~three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period which~~period. The increase was primarily driven by (1) a 39.9% increase in product acceptances and improved product pricing due to increased demand for our products and the ~~$46.0 million decrease~~PPA V Upgrade, resulting in ~~electricity~~the gross profit ~~primarily due to the write-off~~from sales of ~~old~~new Energy Servers of ~~$44.8~~$89.0 million, as a result of the PPA IIIa Upgrade; the $13.7 million decrease in service gross profit due to a 24.7% increase in acceptances plus the maintenance contract renewals associated with the increase in our fleet of Energy Servers. This decrease was partially offset by(2) our ongoing cost reduction efforts to reduce material costs ~~in conjunction with our suppliers~~ and our reduction in labor and overhead ~~costs through increased volume, improved processes and automation at our manufacturing facilities.~~

~~Product Gross Profit~~

~~Product gross profit increased by $20.2 million in the three months ended September 30, 2022 as compared~~unit cost due to ~~the prior year period. The increase is primarily driven by an 64.6% increase in product acceptances, revenue recognized from the PPA IIIa Upgrade~~ ~~of $12.7~~ ~~million and our ongoing cost reduction efforts to reduce material costs in conjunction with our suppliers and our reduction in labor and overhead costs through~~ increased volume, improved processes and automation at our manufacturing facilities, and (3) a release of $3.1 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023. The increase was partially offset by ~~increased freight charges and other supply chain-related pricing pressures and costs incurred to support capacity expansion efforts which are expected to be brought online in future periods.~~the gross profit from sales of new Energy Servers of $7.0 million as a result of the PPA IIIa Upgrade for the three months ended September 30, 2022.

Product gross profit increased by ~~$3.6~~$128.8 million in the nine months ended September 30, ~~2022~~2023, as compared to the prior year period. The increase iswas primarily driven by (1) a ~~24.7%~~35.3% increase in product acceptances ~~revenue recognized from~~due to higher demand for our products and the PPA ~~IIIa~~V Upgrade, resulting in the gross profit from sales of ~~$49.6~~ new Energy Servers of $89.0 million, (2) the release of $3.1 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023, and (3) our ongoing cost reduction efforts to reduce material costs ~~in conjunction with our suppliers~~ and our reduction in labor and overhead ~~costs through~~unit cost due to increased volume, improved processes and automation at our manufacturing facilities. ~~This~~The increase was partially offset by ~~increased freight charges and other supply chain-related pricing pressures and costs incurred to support capacity expansion efforts which will be brought online in future periods.~~the gross profit from sales of new Energy Servers of $28.0 million as a result of the PPA IIIa Upgrade for the nine months ended September 30, 2022.

Installation Gross Loss

Installation gross loss ~~worsened~~improved by ~~$2.2~~$1.7 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period~~period. This was primarily driven by (1) the gross profit from installations of new Energy Servers of $2.1 million as a result of the PPA V Upgrade, and (2) the change in site mix and other site related factors such as site complexity, size, local ordinance requirements and location of the utility ~~interconnect.~~interconnect, partially offset by the gross profit from installations of new Energy Servers of $0.4 million as a result of the PPA IIIa Upgrade for the three months ended September 30, 2022.

Installation gross loss ~~improved~~worsened by ~~$4.2~~$2.2 million in the nine months ended September 30, ~~2022~~2023, as compared to the prior year ~~period~~period. This change was primarily driven by (1) the change in site mix and other site related factors such as site complexity, size, local ordinance requirements and location of the utility ~~interconnect.~~interconnect, (2) the gross profit from installations of new Energy Servers of $0.7 million as a result of the PPA IIIa Upgrade for the nine months ended September 30, 2022, partially offset by the gross profit from installation of new Energy Servers of $2.1 million as a result of the PPA V Upgrade.

Service Gross ~~(Loss) Profit~~Loss

Service gross loss worsened by ~~$4.1~~$5.4 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This was primarily due to deployments of field replacement units and the impact of product performance guarantees of $1.1 million, partially offset by (1) the release of $2.9 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023 and (2) cost reductions and our actions to proactively manage fleet optimizations.

Service gross loss worsened by ~~$13.7~~$21.7 million in the nine months ended September 30, ~~2022~~2023, as compared to the prior year period. This was primarily due to deployments of field replacement units and the impact of product performance guarantees of $10.4 million, partially offset by (1) the release of $2.9 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023 and (2) cost reductions and our actions to proactively manage fleet optimizations.

Electricity Gross Profit (Loss) ~~Profit~~

Electricity gross profit ~~increased~~decreased by ~~$0.2~~$119.5 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year ~~period mainly~~period. This was primarily due to the impairment of old Energy Servers of $123.7 million as a result of the PPA V Upgrade, partially offset by an increase in installed units driven by an increase in Managed Services transactions recorded inbetween the ~~second half~~third quarter of fiscal year ~~2021.~~2021 and the third quarter of fiscal year 2023.

Electricity gross ~~profit decreased~~loss worsened by ~~$46.0~~$76.3 million in the nine months ended September 30, ~~2022~~2023, as compared to the prior year ~~period mainly~~period. This was primarily due to the ~~write-off~~impairment of old Energy Servers from the PPA V Upgrade of $123.7 million, partially offset by (1) an increase in installed units driven by an increase in Managed Services transactions recorded between the third quarter of fiscal year 2021 and the third quarter of fiscal year 2023, and (2) the impairment of old Energy Servers from the PPA IIIa Upgrade of $44.8 million ~~partially offset by the increase in Managed Services transactions recorded~~ in the second ~~half~~quarter of fiscal year ~~2021.~~2022.

Operating Expenses

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 Amount % 2022 2021 Amount %
(dollars in thousands) (dollars in thousands)
Research and development $ 36,146 $ 27,634 $ 8,512 30.8 % $ 112,286 $ 76,602 $ 35,684 46.6 %
Sales and marketing 23,275 20,124 3,151 15.7 % 65,084 62,803 2,281 3.6 %
General and administrative 44,115 33,014 11,101 33.6 % 119,965 90,470 29,495 32.6 %
Total operating expenses $ 103,536 $ 80,772 $ 22,764 28.2 % $ 297,335 $ 229,875 $ 67,460 29.3 %


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2023		2022		Amount		%		2023		2022		Amount		%
	(dollars in thousands)
Research and development	$	35,126	$	36,146	$	(1,020)	(2.8)	%	$	122,309	$	112,286	$	10,023	8.9	%
Sales and marketing	20,002		23,275		(3,273)		(14.1)	%	73,935		65,084		8,851		13.6	%
General and administrative	43,366		44,115		(749)		(1.7)	%	131,004		119,965		11,039		9.2	%
Total operating expenses	$	98,494	$	103,536	$	(5,042)	(4.9)	%	$	327,248	$	297,335	$	29,913	10.1	%

Total Operating Expenses

Total operating expenses ~~increased~~decreased by ~~$22.8~~$5.0 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This decrease was primarily driven by (1) a $7.1 million decrease in employee compensation and benefits primarily due to (i) a separation of 27 full-time employees from the marketing and finance departments as a result of the restructuring, and (ii) a decrease in stock-based compensation expenses of $3.0 million, as well as (2) a decrease in professional services costs, consulting and advisory expenses, and other operating expenses of $2.4 million, $1.0 million, and $2.1 million, respectively. The decrease was partially offset by (1) an increase in office and other expenses of $5.6 million, primarily driven by the impairment of non-recoverable production insurance of $6.4 million as a result of PPA V Upgrade, and (2) an increase in facility costs and depreciation expenses of $2.0 million and $1.6 million, respectively.

Total operating expenses increased by $29.9 million in the nine months ended September 30, 2023, as compared to the prior year period. This increase was primarily attributable to (1) our continued investment in R&D capabilities to support our technology roadmap, (2) our continued investment in our workforce to support our growth, resulting in an increase in employee compensation and benefits expenses of $10.4 million, and (3) our investment in business development, as well as (4) increases in facility costs, office expenses and anconsulting and advisory expenses of $8.4 million, $4.9 million, and $4.0 million, respectively. The increase was partially offset by a decrease in ~~General~~professional services costs of $2.9 million and ~~Administrative~~a decrease in other operating expenses of $3.9 million.

Research and Development

Research and development expenses decreased by $1.0 million in the three months ended September 30, 2023, as compared to the prior year period. This decrease was primarily driven by a $3.7 million decrease in laboratory and related costs, partially offset by increases in employee compensation and benefits, outside ~~services.~~services, and other research and development costs of $1.7 million, $0.7 million, and $0.6 million, respectively.

~~Total operating~~

Research and development expenses increased by ~~$67.5~~$10.0 million in the nine months ended September 30, 2022 as compared to the prior year period. This increase was primarily attributable to our continued investment in R&D capabilities to support our technology roadmap, our investment in business development, and an increase in General and Administrative outside services.

~~Research and Development~~

~~Research and development expenses increased by $8.5 million in the three months ended September 30, 2022~~2023, as compared to the prior year period. This increase was primarily driven by ~~increases~~an increase in employee compensation and benefits of ~~$4.7~~$5.0 million, ~~to expand our employee base~~an increase in ~~order to support our technology roadmap~~outside services of $1.4 million, an increase in travel expenses of $0.4 million, an increase in depreciation expenses of $0.4 million, and ~~cost reduction initiatives, including our hydrogen, electrolyzer, marine and biogas solutions.~~

~~Research~~an increase in other research and development costs of $3.2 million, partially offset by a decrease in consulting and advisory expenses of $0.4 million.

Sales and Marketing

Sales and marketing expenses decreased by $3.3 million in the three months ended September 30, 2023, as compared to the prior year period. This decrease was primarily driven by (1) a $4.4 million decrease in employee compensation and benefits primarily due to (i) a separation of 25 full-time employees from the marketing department as a result of the restructuring, and (ii) a decrease in stock-based compensation expenses of $0.9 million, as well as (2) a decrease in travel expenses of $0.3 million, and (3) a decrease in professional services costs of $0.3 million, partially offset by an increase in consulting and advisory expenses of $1.5 million.

Sales and marketing expenses increased by ~~$35.7~~$8.9 million in the nine months ended September 30, ~~2022~~2023, as compared to the prior year period. This increase was primarily driven by ~~increases~~an increase in consulting and advisory expenses of $4.8 million, an increase in employee compensation and benefits of ~~$13.3~~$3.5 million, ~~to expand our employee base~~and an increase in ~~order to support our technology roadmap, including our hydrogen, electrolyzer, marine~~travel expenses of $0.4 million, partially offset by a decrease in facility costs and ~~biogas solutions.~~

~~Sales and Marketing~~

~~Sales~~other sales and marketing expenses ~~increased~~of $0.2 million and $0.2 million, respectively.

General and Administrative

General and administrative expenses decreased by ~~$3.2~~$0.7 million in the three months ended September 30, ~~2022~~2023, as compared to the prior year period. This decrease was primarily driven by (1) a $4.4 million decrease in employee compensation and benefits primarily due to (i) a separation of 2 full-time employees from the finance department as a result of the restructuring, (ii) a decrease in stock-based compensation expenses of $2.9 million, and (iii) a decrease in recruiting costs of $1.0 million, as well as (2) a decrease in consulting and advisory expenses of $2.3 million, (3) a decrease in professional services costs of $2.1 million, and (4) a decrease in other general and administrative expenses of $2.6 million. The decrease was partially offset by an increase in office and other expenses of $5.4 million, primarily driven by the impairment of non-recoverable production insurance of $6.4 million as a result of PPA V Upgrade, and an increase in facility costs and depreciation expenses of $2.1 million and $1.5 million, respectively.

General and administrative expenses increased by $11.0 million in the nine months ended September 30, 2023, as compared to the prior year period. This increase was primarily driven by ~~increases~~(1) an increase in facility costs of $8.5 million, primarily due to rent expenses and utility costs, (2) an increase in office and other expenses of $4.7 million, primarily driven by the impairment of non-recoverable production insurance of $6.4 million as a result of PPA V Upgrade, (3) an increase in depreciation expenses of $3.5 million, and (4) an increase in employee compensation and benefits of ~~$4.3 million to expand our U.S. and international sales force, increased investment in brand and product management,~~$1.9 million. The increase was partially offset by a decrease in ~~outside services.~~

~~Sales~~professional services costs of $3.0 million and marketing expenses increased by $2.3 million in the nine months ended September 30, 2022 as compared to the prior year period. This increase was primarily driven by increases in employee compensation and benefits of $8.8 million to expand our U.S. and international sales force, increased investment in brand and product management, partially offset by a decrease in ~~outside services.~~

~~General and Administrative~~

~~General~~other general and administrative expenses ~~increased by $11.1 million in the three months ended September 30, 2022 as compared to the prior year period. This increase was primarily driven by increases in employee compensation and benefits~~ of ~~$4.0 million and outside services and an increase in factoring of receivables.~~

~~General and administrative expenses increased by $29.5 million in the nine months ended September 30, 2022 as compared to the prior year period. This increase was primarily driven by increases in employee compensation and benefits of $10.6 million, outside services and an increase in factoring of receivables.~~$6.9 million.

Stock-Based Compensation

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 Amount % 2022 2021 Amount %
(dollars in thousands) (dollars in thousands)
Cost of revenue $ 4,982 $ 2,945 $ 2,037 69.2 % $ 13,609 $ 9,749 $ 3,860 39.6 %
Research and development 4,818 5,678 (860) (15.1) % 25,113 15,876 9,237 58.2 %
Sales and marketing 3,948 4,391 (443) (10.1) % 13,528 12,486 1,042 8.3 %
General and administrative 10,283 7,952 2,331 29.3 % 30,688 19,198 11,490 59.8 %
Total stock-based compensation $ 24,031 $ 20,966 $ 3,065 14.6 % $ 82,938 $ 57,309 $ 25,629 44.7 %


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2023		2022		Amount		%		2023		2022		Amount		%
	(dollars in thousands)
Cost of revenue	$	5,581	$	4,982	$	599	12.0	%	$	14,809	$	13,609	$	1,200	8.8	%
Research and development	5,585		4,818		767		15.9	%	21,673		25,113		(3,440)		(13.7)	%
Sales and marketing	3,015		3,948		(933)		(23.6)	%	15,089		13,528		1,561		11.5	%
General and administrative	7,383		10,283		(2,900)		(28.2)	%	28,025		30,688		(2,663)		(8.7)	%
Total stock-based compensation	$	21,564	$	24,031	$	(2,467)	(10.3)	%	$	79,596	$	82,938	$	(3,342)	(4.0)	%

Total stock-based compensation for the three months ended September 30, ~~2022~~2023 compared to the prior year period ~~increased~~decreased by ~~$3.1 million~~$2.5 million. The decrease was primarily driven by (1) the ~~efforts to expand our employee base across all~~separation of full-time employees holding equity awards as a result of the ~~Company’s functions.~~restructuring, (2) the voluntary resignation of our Executive Vice President and Chief Business Development and Marketing Officer on September 1, 2023, and (3) modified awards in the second quarter of fiscal year 2022.

4549

Total stock-based compensation for the nine months ended September 30, ~~2022~~2023 compared to the prior year period ~~increased~~decreased by ~~$25.6 million~~$3.3 million. The decrease was primarily driven by (1) the ~~efforts to expand our employee base across all~~separation of full-time employees holding equity awards as a result of the ~~Company’s functions.~~restructuring, (2) the voluntary resignation of our Executive Vice President and Chief Business Development and Marketing Officer on September 1, 2023, and (3) a decrease in option expense compared to the nine months ended September 30, 2022, as existing options were either exercised, expired or cancelled. This decrease was partially offset by an increase in ESPP expense of $1.3 million and the increased headcount.

Other Income and Expense


		Three Months Ended September 30,				Change				Nine Months Ended September 30,								Change					Three Months Ended September 30,							Change		Nine Months Ended September 30,				Change
		2022		2021				2022				2021								2023				2022				2023				2022
		(in thousands)																					(in thousands)
Interest income	Interest income	$	1,109	$	72			$	1,037			$	1,364			$	222				$	1,142	Interest income		$	7,419			$		1,109	$	6,310	$	13,771	$	1,364	$	12,407
Interest expense	Interest expense	(13,099)		(14,514)		1,415				(41,000)				(43,798)				2,798		Interest expense			(68,037)			(13,099)				(54,938)		(93,736)		(41,000)		(52,736)

Other income, net		4,472		2,011		2,461				254				1,948				(1,694)
Other (expense) income, net																				Other (expense) income, net			(1,577)			4,472				(6,049)		(3,660)		254		(3,914)
Loss on extinguishment of debt	Loss on extinguishment of debt	—		—		—				(4,233)				—				(4,233)		Loss on extinguishment of debt			(1,415)			—				(1,415)		(4,288)		(4,233)		(55)
Gain (loss) on revaluation of embedded derivatives		54		(184)		238				623				(1,644)				2,267
(Loss) gain on revaluation of embedded derivatives																				(Loss) gain on revaluation of embedded derivatives			(114)			54				(168)		(1,213)		623		(1,836)
Total	Total	$	(7,464)	$	(12,615)	$	5,151			$	(42,992)			$	(43,272)			$	280	Total			$	(63,724)		$	(7,464)			$	(56,260)	$	(89,126)	$	(42,992)	$	(46,134)

Interest Income

Interest income is derived from investment earnings on our cash balances primarily from money market funds. The increase in interest income of $6.3 million and $12.4 million was due to ~~the increase~~increases in cash balances ~~for~~in our money market funds for the three and nine months ended September 30, ~~2022~~2023, respectively, as compared to the prior year periods.

Interest Expense

Interest expense is ~~from~~primarily due to our debt held by third parties.

Interest expense for the three and nine months ended September 30, ~~2022~~2023, as compared to the prior year ~~period decreased~~periods, increased by ~~$1.4 million. This decrease~~$54.9 million and $52.7 million, respectively. The increase was primarily driven by (1) the expensing of current and long-term commitment assets of $5.3 million and $47.5 million, respectively, immediately upon the automatic conversion on September 23, 2023, of Series B RCPS to Class A common stock as a result of the Second Tranche Closing with SK ecoplant, and (2) an increase in interest expense related to the 3% Green Convertible Senior Notes due ~~to lower~~June 2028, issued on May 16, 2023. The increase was offset by a decrease in interest expense as a result of ~~our~~the redemption on June 1, 2023 of 10.25% Senior Secured Notes due March 2027, and the repayment of the 7.5% Term Loan due September 2028, the 6.07% Senior Secured Notes due March 2030, and ~~refinancing our notes at a lower interest rate.~~

~~Interest expense for~~ the ~~nine months ended September 30,~~3.04% Senior Secured Notes due June 2031 on June 14, 2022, ~~as compared to the prior year period decreased by $2.8 million. This decrease was primarily due to lower interest expense as a result of our repayment of the 7.5% Term Loan due September 2028~~November 22, 2022, and ~~refinancing our notes at a lower interest rate.~~August 24, 2023, respectively.

Other (Expense) Income, net

Other (expense) income, net is primarily derived from ~~gain from SK Option revaluation,~~ investments in joint ventures, the impact of foreign currency ~~translation,~~transactions, and adjustments to fair value for derivatives.

Other income, net for the three months ended September 30, ~~2022~~2023, as compared to the prior year period, ~~increased~~decreased by ~~$2.5~~$6.0 million primarily as a result of the gain on the revaluation of the Option to purchase Class A common stock of $7.9 million upon receipt of the notice of exercise from SK ecoplant on August 10, 2022 for the three months ended September 30, 2022, and an increase in unrealized foreign exchange loss of ~~$7.9~~$1.5 million, partially offset by the ~~loss on foreign currency~~effect of a cumulative translation adjustment of ~~$3.6~~$3.5 million.

Other income, net for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period, decreased by ~~$1.7~~$3.9 million primarily as a result of ~~the loss on remeasurement of our equity investment in the Bloom Energy Japan joint venture, loss on foreign currency translation of $5.3 million, partially offset by~~ the gain on the revaluation of the Option to purchase Class A common stock of $9.0 million upon receipt of the notice of exercise from SK ecoplant on August 10, 2022 for the nine months ended September 30, 2022, and an increase in unrealized foreign exchange loss of ~~$9.0~~$3.3 million. The decrease was partially offset by the effect of a cumulative translation adjustment of $5.1 million, and the loss on remeasurement of our equity investments of $3.5 million recorded for the nine months ended September 30, 2022.

Loss on Extinguishment of ~~Debt~~debt

Loss on extinguishment of debt for the three months ended September 30, 2023 was $1.4 million, which was recognized as a result of the repayment on August 24, 2023 of 3.04% Senior Secured Notes due June 2031 as part of the PPA V Upgrade, and comprised in its entirety of derecognition of debt issuance costs.

Loss on extinguishment of debt for the nine months ended September 30, 2023 was $4.3 million, which was recognized as a result of the redemption on June 1, 2023 of the 10.25% Senior Secured Notes due March 2027, and the repayment on August 24, 2023 of the 3.04% Senior Secured Notes due June 2031 as part of the PPA V Upgrade, and including the repayment of the 4% premium upon redemption of the 10.25% Senior Secured Notes due March 2027 of $2.3 million and derecognition of debt issuance costs of $2.0 million.

Loss on extinguishment of debt for the nine months ended September 30, 2022 was $4.2 million, which was recognized as a result of repayment of the 7.5% Term Loan due September 2028 as part of the PPA IIIa Upgrade. There was no loss (gain) on extinguishment of debt for the three months ended September 30, 2022.

(Loss) Gain ~~(Loss)~~ on Revaluation of Embedded Derivatives

~~Gain (loss)~~(Loss) gain on revaluation of embedded derivatives is derived from the change in fair value of our sales contracts of embedded EPP derivatives valued using historical grid prices and available forecasts of future electricity prices to estimate future electricity prices.

Gain on revaluation of embedded derivatives for the three months ended September 30, ~~2022~~2023, as compared to the prior year period, ~~increased~~decreased by $0.2 million due to an increase in the ~~change in~~ fair value of our embedded EPP derivatives in our sales ~~contracts~~contracts.

Gain on revaluation of embedded derivatives for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period, ~~increased~~decreased by ~~$2.3~~$1.8 million due to an increase in the ~~change in~~ fair value of our embedded EPP derivatives in our sales ~~contracts.~~contracts of $1.2 million, offset by a payment of $3.2 million to one of our customers in the second quarter of fiscal 2023.

Income Tax Provision


	Three Months Ended September 30,		Change				Nine Months Ended September 30,		Change
	2023	2022	Amount		%		2023	2022	Amount		%
	(dollars in thousands)
Income tax provision	646	336	$	310	92.3	%	1,083	888	$	195	22.0	%

Income tax provision for the three and nine months ended September 30, 2023, as compared to the prior year periods, increased by $0.3 million and $0.2 million, respectively.

Net ~~Loss~~Gain (Loss) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 Amount % 2022 2021 Amount %
(dollars in thousands)
Net loss attributable to noncontrolling interests $ (3,315) $ (4,309) $ (994) (23.1) % $ (9,768) $ (13,733) $ (3,965) (28.9) %
Net (loss) income attributable to redeemable noncontrolling interest $ — $ 17 $ 17 (100.0) % $ (300) $ (9) $ 291 3,233.3 %


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
	2023		2022		Amount		%		2023		2022		Amount		%
	(dollars in thousands)
Net gain (loss) attributable to noncontrolling interest	$	921	$	(3,315)	$	4,236	(127.8)	%	$	(5,427)	$	(9,768)	$	4,341	(44.4)	%
Net loss attributable to redeemable noncontrolling interest	$	—	$	—	$	—	—	%	—		(300)		$	300	(100.0)	%

Net ~~loss~~gain (loss) attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the flip structure of the PPA Entities.

Net loss attributable to noncontrolling interests for the three months ended September 30, ~~2022~~2023, as compared to the prior year period, ~~changed~~improved by ~~$1.0~~$4.2 million due to ~~decreased losses~~an increase in ~~our~~gain in the joint venture in the Republic of Korea of $1.8 million, and loss in PPA ~~Entities, which are allocated to our noncontrolling interests.~~IV of $2.8 million recorded for the three months ended September 30, 2022, partially offset by an increase in loss in PPA V of $0.4 million.

Net loss attributable to noncontrolling interests for the nine months ended September 30, ~~2022~~2023, as compared to the prior year period, ~~changed~~improved by ~~$4.0~~$4.3 million primarily due to ~~decreased losses~~loss in ~~our~~ PPA ~~Entities, which are allocated to our noncontrolling interests.~~

~~Changes in net (loss) income attributable to redeemable noncontrolling interest~~IV of $6.8 million recorded for the ~~three and~~ nine months ended September 30, 2022, partially offset by an increase in loss in PPA V of $2.2 million and ~~2021 were immaterial.~~a decrease in gain in the joint venture in the Republic of Korea of $0.5 million.

~~Off-Balance Sheet Arrangements~~

We include in our condensed consolidated financial statements all assets and liabilities and results of operations of our PPA Entities that we have entered into and over which we have substantial control. For additional information, see Part II, Item 8, Note 11 -~~Portfolio Financingsin our Annual Report on Form 10-K for the fiscal year ended December 31, 2021~~.

We have not entered into any other transactions that have generated relationships with unconsolidated entities or financial partnerships or special purpose entities. Accordingly, as of September 30, 2022 and December 31, 2021 we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the United States (“U.S. GAAP”). The preparation of the condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our discussion and analysis of our financial results under Results of Operations above are based on our ~~audited~~ results of operations, which we have prepared in accordance with U.S. GAAP. In preparing these condensed consolidated financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses, and net income. On an ongoing basis, we base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are representative of estimation uncertainty and are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating the consolidated financial condition and results of operations.

The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, include:

•~~Discussion of Earliest Year of Changes in Financial Condition and Results of Operations;~~

•Revenue Recognition;

•~~Leases: Incremental Borrowing Rate;~~

•~~Valuation of Escalator Protection Plan Agreements (“EPP”);~~

•~~Valuation of Certain Financial Instruments and Customer Financing Receivables;~~

•Valuation of Assets and Liabilities of the SK ecoplant Strategic Investment;

•Incremental Borrowing Rate ~~(“IBR”)~~ by Lease Class;

•Stock-Based Compensation;

•Income Ta~~xes;~~Taxes;

•Principles of Consolidation; and

•Allocation of Profits and Losses of Consolidated Entities to Noncontrolling ~~Interests and Redeemable Noncontrolling~~ Interests.

Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations~~Operation in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 provides a more complete discussion of our critical accounting policies and estimates. During the nine months ended September 30, ~~2022,~~2023, there were no significant changes to our critical accounting policies and estimates.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no significant changes to our quantitative and qualitative disclosures about market risk during the nine months ended September 30, ~~2022.~~2023. Please refer to Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk included in our Annual Report on Form 10-K for our fiscal year ended December 31, ~~2021~~2022 for a more complete discussion of the market risks we consider.

ITEM 4 - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our Principal Executive Officer) and Chief Financial Officer (our Principal Financial and Accounting Officer) as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of September 30, 2023. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2023, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, ~~2022,~~2023, there were no changes in our internal ~~controls~~control over financial reporting, which were identified in connection with management’s evaluation required by ~~paragraph~~paragraphs (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As of September 30, 2022 based on evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer and Chief Financial Officer (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) it was concluded that our disclosure controls and procedures were effective.

For further information on controls and procedures, see Part II, Item 9A, Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~

2022.

4952

Part II- OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

We are, and from time to time we may become, involved in legal proceedings or be subject to claims arising in the ordinary course of our business. For a discussion of our legal proceedings, see ~~Part II, Item 8~~ ~~Note 13 - Commitments and Contingencies~~ ~~in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and~~ Part I, Item 1, Note 13 - Commitments and Contingencies. We are not presently a party to any other legal proceedings that in the opinion of our management and if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.

ITEM 1A - RISK FACTORS

~~There~~Except as discussed in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, there were no material changes in our risk factors as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021.~~2022.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 - ~~Other~~OTHER INFORMATION

~~Not applicable.~~(a) On November 7, 2023, our board of directors (the “Board”) approved a resolution to file a Certificate of Elimination (the “Certificate of Elimination”) of the Certificate of Designation (as amended, the “Certificate of Designation”) of our Series B redeemable convertible preferred stock, par value $0.0001 per share (the “Series B Preferred Stock”), which was filed with the Secretary of State of the State of Delaware (“Secretary of State”) on November 7, 2023, following the prior conversion of all of the 13,491,701 shares of Series B Preferred Stock that were outstanding into shares of our Class A common stock, par value $0.0001 per share (“Class A common stock”). The filing of the Certificate of Elimination had the effect of eliminating from our Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”) all matters set forth in the Certificate of Designation with respect to the Series B Preferred Stock and returning all previously designated shares of Series B Preferred Stock to their status as authorized Preferred Stock, par value $0.0001 per share, available for issuance as determined by the Board.

In addition, on November 7, 2023, the Board approved a resolution to file a Certificate of Retirement (the “Certificate of Retirement”) with the Secretary of State effecting the retirement of all of the previously outstanding shares of our Class B common stock, par value $0.0001 per share (“Class B common stock”), following the automatic conversion of the remaining outstanding shares of the Class B common stock into shares of Class A common stock pursuant to Section 2 of Article V of the Certificate of Incorporation, which conversion occurred on July 27, 2023 (the “Class B Conversion”). No additional shares of Class B common stock have been or will be issued following the Class B Conversion. The Certificate of Retirement was filed with the Secretary of State on November 7, 2023. Pursuant to Section 243 of the General Corporation Law of the State of Delaware, the filing of the Certificate of Retirement had the effect of amending the Certificate of Incorporation such that, upon the effectiveness of the Certificate of Retirement, our total number of authorized shares of capital stock and the total number of authorized shares of Class B Common Stock were reduced by the number of the retired shares of Class B common stock. Following the Class B Conversion, the Class A common stock continued, and will continue, to trade on The New York Stock

Exchange under the ticker symbol “BE” and did and will maintain the same CUSIP number previously assigned to the Class A common stock.

The foregoing descriptions of the Certificate of Elimination and Certificate of Retirement are summaries only and are qualified in their entirety by reference to the full text of (a) the Certificate of Retirement, (b) the Certificate of Elimination, (c) the Certificate of Incorporation and (d) the Certificate of Amendment to the Certificate of Incorporation, copies of which are filed with this Quarterly Report on Form 10-Q as Exhibits 3.2, 3.3, 3.4 and 3.5, respectively, and are incorporated herein by reference.

During the quarter ended September 30, 2023, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

5054

ITEM 6 - EXHIBITS

Incorporated by Reference
Exhibit Number Description Form File No. Exhibit Filing Date
3.1
Amended and Restated Bylaws of Bloom Energy Corporation (effective as of August 10, 2022) 8-K 001-38598 3.1 8/16/2022
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith
32.1
** Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith
101.INS XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document Filed herewith
101.SCH Inline XBRL Taxonomy Extension Schema Document Filed herewith
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed herewith
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed herewith
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Incorporated by Reference

Exhibit Number

Description

Form

File No.

Exhibit

Filing Date

3.1

Amended and Restated Bylaws, as effective August 9, 2023

8-K

001-38598

3.1

8/11/2023

3.2

Certificate of Retirement for Class B Common Stock

Filed herewith

3.3

Certificate of Elimination of Certificate of Designations of Series B Convertible Preferred Stock

Filed herewith

3.4

Restated Certificate of Incorporation

10-Q

001-38598

3.1

9/07/2018

3.5

Certificate of Amendment to the Restated Certificate of Incorporation

10-Q

001-38598

3.1

8/09/2022

31.1

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

31.2

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.1

Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Furnished herewith

101.INS

XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

Filed herewith

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


†			~~Portions of this exhibit are redacted as permitted under Regulation S-K, Rule 601.~~
**			The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed ~~"filed"~~“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

5155

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLOOM ENERGY CORPORATION

Date:

November ~~3, 2022~~8, 2023

By:

/s/ KR Sridhar

KR Sridhar

Founder, ~~President,~~ Chief Executive Officer, Chairman and Director

(Principal Executive Officer)

Date:

November ~~3, 2022~~8, 2023

By:

/s/ Gregory Cameron

Gregory Cameron

~~Executive Vice~~ President and

Chief Financial Officer

(Principal Financial and Accounting Officer)

5256


		Three Months Ended September 30, 2022
	Class A and Class B Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total equity (deficit) attributable to Class A and Class B common stockholders		Noncontrolling Interest		Total Stockholders' Equity (Deficit)
		Shares	Amount
Balances at June 30, 2022		178,913,797	$	18	$	3,284,261	$	(1,000)	$	(3,460,234)	$	(176,955)	$	32,034	$	(144,921)
Issuance of restricted stock awards		539,074	—		—		—		—		—		—		—
ESPP purchase		339,055	—		5,619		—		—		5,619		—		5,619
Exercise of stock options		225,759	—		2,233		—		—		2,233		—		2,233
Stock-based compensation		—	—		23,893		—		—		23,893		—		23,893
Distributions and payments to noncontrolling interests		—	—		—		—		—		—		(1,557)		(1,557)
Contributions from noncontrolling interest		—	—		—		—		—		—		2,815		2,815
Public share offering (Note 1)		14,950,000	1		371,526		—		—		371,527		—		371,527
Forward to purchase Class A Common Stock (Note 5)		—	—		4,183		—		—		4,183		—		4,183
Foreign currency translation adjustment		—	—		—		(531)		—		(531)		(496)		(1,027)
Net loss1		—	—		—		—		(57,077)		(57,077)		(3,315)		(60,392)
Balances at September 30, 2022		194,967,685	$	19	$	3,691,715	$	(1,531)	$	(3,517,311)	$	172,892	$	29,481	$	202,373


		Three Months Ended September 30, 2021
	Class A and Class B Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total deficit attributable to Class A and Class B common stockholders		Noncontrolling Interest		Total Stockholders' Equity
		Shares	Amount
Balances at June 30, 2021		173,402,160	$	17	$	3,155,917	$	(124)	$	(3,177,381)	$	(21,571)	$	51,185	$	29,614
Issuance of restricted stock awards		581,363	—		—		—		—		—		—		—
ESPP purchase		967,797	—		5,319		—		—		5,319		—		5,319
Exercise of stock options		126,741	1		1,122		—		—		1,123		—		1,123
Stock-based compensation		—	—		20,743		—		—		20,743		—		20,743
Change in effective portion of interest rate swap agreement		—	—		—		—		—		—		763		763
Distributions and payments to noncontrolling interests		—	—		—		—		—		—		(540)		(540)
Foreign currency translation adjustment		—	—		—		(154)		—		(154)		(145)		(299)
Net loss2		—	—		—		—		(52,370)		(52,370)		(4,309)		(56,679)
Balances at September 30, 2021		175,078,061	$	18	$	3,183,101	$	(278)	$	(3,229,751)	$	(46,910)	$	46,954	$	44


		Nine Months Ended September 30, 2021
	Class A and Class B Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total (deficit) equity attributable to Class A and Class B common stockholders		Noncontrolling Interest		Total Stockholders' Equity
		Shares	Amount
Balances at December 31, 2020		168,002,726	$	17	$	3,182,753	$	(9)	$	(3,103,937)	$	78,824	$	62,195	$	141,019
Cumulative effect upon adoption of Accounting Standards Update 2020-06		—	—		(126,799)		—		5,308		(121,491)		—		(121,491)
Issuance of restricted stock awards		2,533,027	—		—		—		—		—		—		—
ESPP purchase		1,945,305	—		10,045		—		—		10,045		—		10,045
Exercise of stock options		2,597,003	1		62,064		—		—		62,065		—		62,065
Stock-based compensation expense		—	—		55,038		—		—		55,038		—		55,038
Change in effective portion of interest rate swap agreement		—	—		—		—		—		—		4,031		4,031
Distributions and payments to noncontrolling interests		—	—		—		—		—		—		(5,285)		(5,285)
Foreign currency translation adjustment		—	—		—		(269)		—		(269)		(254)		(523)
Net loss4		—	—		—		—		(131,122)		(131,122)		(13,733)		(144,855)
Balances at September 30, 2021		175,078,061	$	18	$	3,183,101	$	(278)	$	(3,229,751)	$	(46,910)	$	46,954	$	44


	Operating Leases
Remainder of 2022	$	9,582
2023	37,608
2024	40,067
2025	42,589
2026	43,761
Thereafter	197,868
Total minimum lease payments	$	371,475