FLNC - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to the Fluence Second Quarter Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, Lexington May, VP Finance and Investor Relations.

Lexington May

Thank you. to Third welcome Conference XXXX and Call. morning, Fluence Quarter Energy's Earnings Good our release of and presentation, sheet, copy the non-GAAP earnings A of posted are press at and regarding results, on fluenceenergy.com. with financial measures reconciliations Relations covering along and website supporting including statements section schedules, Investor disclosures our our financial metric supplementary

Products Julian our Joining me Boll, Officer. Ahmed and Pasha, Chief Chief Officer; President our on this Chief Nebreda morning's Executive our call Rebecca Financial are and Officer;

could Please of business During management historical make forward-looking that course and certain differ cause actual subject upon Fluence impact certain the this information for that to matters therefore, results assumptions may certain based not could refer for are, future certain call, various our the regarding our related our are and factors current facts. Such materially. are SEC statements. forward-looking filings and And and statements statements uncertainties regarding more to results. risks expectations and our risks Many to to uncertainties. company

are the or new will undue GAAP undertakes also these duty speak update statements, is the view reconciliation which comparable the earnings reference to statements available forward-looking today. non-GAAP reliance as call business. A note as no measures to in that assessing Investor of place measure on of performance measures materials You most forward-looking we company's website. only company Also, to the our on important in of non-GAAP our information. Relations please these not This for revise cautioned that

Instructions] Thank session question-and-answer conduct [Operator prepared you team. Following will our comments, our a we very much. with

the turn call I'll over to Julian. now

Julian Jose Marquez

an financial and participating continue will cover welcome a extend to on and the our we who more and investors, then then update results outlook. briefly I our to results will on to our provide see. and call. prospects, give strong employees today's business details our like growth would on analysts QX warm I are Ahmed

Beginning XX.X% million specifically, deliver financial earned the slightly our strong XX% more on we gross of target. performance, recognized which adjusted margin we brings Slide and ahead gross to XX% $XXX revenue margin, X, of year-to-date

we our profitable $XX.X of puts to for Second, growth EBITDA million, us on shareholders. deliver track adjusted recorded which

of and the added we of a million bringing quarter us setting $XX billion backlog $XX business, proactive recurring cash. $X.X management, all-time level than billion. in record digital quarter new to new with contracts, capital to level reaching Fourth, months and cash with Third, quarter revenue flow and quarterly and an finished we $X.X finally, of our our for first high the services for annual target. And working we earlier million our generated a million the the to $XXX free cost our approach current ended X for

Slide to X. Turning

driven our management gross improvements We our continue by and performance to cost see on margin, execution. in excellent

has years. been We X of in We positive quarters on margins double-digit XX. a than margin. an margin have negative a trailing base. gross ended consecutive at the growth This gross XX% transformation June rolling months less from had a of advanced to XX our margin We're X% in XX-month X outstanding about looking

expect to range. continue to path the in XX% on We this sustainable gross achieve to trend improve, putting to us margins a XX%

our an pipeline. X to Turning Slide for on update

As a to ability reminder, rolling our in our us continue pipeline our thus confidence is XX-month trajectory. view, a giving growth

reflects increased storage last any prospect year, XX% which growth globally. has this pipeline rapid million from for $XX Our time

our international expected strength our reason the is confidence the which is a robust high in international in in bit is of for see market, pipeline our a Americas our key in and discuss the should rest As continue in $XX a in region, pipeline market. we our of I will all, geographic a mix half diversify further years. very moment. Almost the All The to revenue billion coming more growth.

We are revenue of our 'XX at to XX% original reaffirming $X growth midpoint of of fiscal 'XX fiscal outlook guidance XX% revenue billion. year our

Turning in to Slide growth X. Similar to our pipeline, a seeing we're backlog. our also remarkable

consecutive recognized, utility-scale our energy quarter showcasing order of XXth growth third outpacing in robust revenue quarter the intake storage. was The

competitive Our a utility-scale backlog [indiscernible] significant demonstrating our position for storage. leading energy and role

competitive the well we most I in unique Now an the we market States, growth position a as us substantial in manufacturing update on provide domestic continues strategy on to like to would as to Beginning U.S. early to operate markets United progress developments made which have regulatory in the opportunity. Recent an in with position our globally. the we serve. relevant the the market be largest extensively puts capitalize to

to X. available. a been last policy couple of call, conference our favorable Since Slide Turning there have

contribute Treasury U.S. the that threshold. Inflation towards content an XX% battery of U.S. requirement Reduction elective treasury IRA. the table the can the value released or Act under XX% when manufacturer domestic harbor guidance sets in component, percentage each the First, The provided on a storage safe

category our manufactured the which can strategy As cells highest the domestic battery cells see, securing U.S. battery of XX% you favors of in

of the signed believe combining on XX% incremental our than recall, easily cell ago with will our enabling year a we modules, cells investment the agreement tax on the in cells IRA capacity to that ASC battery an The capture facility. U.S. manufacturer their before will will procuring content from domestic U.S. As go U.S. Tennessee came more process touch may I modules, started you the purchase a U.S. the more threshold. By credit we U.S. into cell meet out XX% customers projects. we moment. Thus to and which and

has sales U.S. delivering the content. first-mover in secure resulted in to approach from domestic a advantage ASC proactive Our

benefit for Section the to of set to significantly administration increase regime Today, XXXX. We XX% which like tariff systems. China, it imported U.S. applies landscape a would battery proclamation to is believe is well will a of implications demand in domestic in known and U.S. this The administration. Second, of these political stability to storage tariff affect from potential to change also to economic the need growing supported the this system the most that It in the on increase beginning resiliency. higher serve XXX could renewals for grid X.X%, for a on these I battery to the tariff needs. None capacity, suppliers. [indiscernible]. storage environment fastest way for Biden is issued is new and by storage growing and [indiscernible] competitive touch batteries and briefly up due market the

landscape. should products. policy be in model promote to industrial changes the Current business using U.S. in tax favors political credit Our domestic to also the resilient

we effectively from the new to change in administration of believe U.S. a were work tariff. incentives model also will favor However, policy if away that our tax business industrial

facility. module Slide our we the commission and line line initial tested now on battery Utah in pleased a Fluence that with the stages serve report The Turning production this gradually We I'm up manufacturer's modules track X. is to of needs. in module anticipate the production to in started number for installation and successfully year. The battery ramping in are September was production production late final facility. initial of of our to of

Slide rise The on of adding new corporate market U.S. electricity resulted by tremendous Turning which fueled discussions utility-scale to of roughly of show pipeline data and numbers low-cost Part data on in significant storage renewal. pumping of opportunities additional in adoption associated requires to seeking GenAI, to our customers growth U.S. in capacity. We're XX increases of have by more the reliable size and which centers, the this a driven by Estimate more U.S. for the XXXX. continues gigawatts clean, with XX. has energy seeing growing been demand the been market centers.

procuring are Currently, Moving data is tech the form demand meet about of carbon-free growing our the renewal for storage companies and to of U.S. that pipeline centers. PPAs the XX% associated with large indirectly goals.

that districts. clean associated energy of and IRA result in the We majority Republican will occurring the investments job with in led also great the creation are the note

of the regardless Furthermore, an a of numbers political is increasing energy becoming grids of storage across country part needs. critical

industry's example, in grid of [ fee. We state, plays the the expanding last battery that For this energy in chose from a when con year. storage you air nearly storage in and The change, power our red demand policy model nearly our in added interconnection of In role is gigawatts us growth our ] for XXX the to business the plan. U.S. U.S. in for its GenAI to traditional time renewable makes projects Texas, for market electricity of the confident need market XX% consider sum, resilience outlook increase contribution U.S. growing and the the and capacity. market

renewable. Africa opportunities Ireland in to the XX. growing grid to say with general the attractiveness U.K., Middle the seeing I'm market the operate in Turning and region, and East to happy we in XX% our a of Alongside resurgence Ireland. electrical number of are Europe, its U.S. Slide

of level require This significant level to reliability. stores grid and provide higher of generation battery stability will a renewable

we additions by X the to XX provide XXXX is battery than large and national capacity approaching capacity story year, Pacific to growth Australia, a forecasted. For utility additions in hour, gigawatt for of have this scale opportunities nearly increase Asia the products. region, past the similar our this With are seen growth annual scale of few reason, tremendous the annual expected from We robust years. Australia north XXXX strategy which see driven regions. In utility over other more gigawatts where be continues XXX%

the a research for to will I'm of fleet global new the company's applying Fluence, data launch. pleased our and service assets hub and by which for we intelligence digital India, launched service development operational report that recently providing to Turning to in Slide XX. as center managed serve central insight

India, will service platform new product the our is in the We sector allow and more diagnostic our centers And expect both capability. Bangalore, monitoring customers technology by to that capabilities, with efficiency in speedy of intended a for response [ performance the provides development ]. these efforts value of to this optimizing and storage. that remote co-location The provide

call I outlook. will and the Ahmed financial discuss now turn results to our to

Ahmed Pasha

XX.X%. to third primarily in $XXX ahead margin quarter XX% I call. good our Slide profit million on fourth Today, results, Furthermore, a and was certain was of last morning, representing Julian, position gross our quarter gross you, everyone. project revenue, cash was discussed margin, and which third gross results, $XX outlook. which the double-digit year-to-date near-term our margins. Including gross with than schedule. generated higher third financial profit consecutive results attributable on adjusted Thank delivered quarter earnings XX. strong of of XX.X% quarter review million our our milestones the we we Beginning generated We of This adjusted XXXX completing adjusted will expectations

range We end profitability for adjusted on our margin reflects expect of to year projects. has within high focus improved on QX efficiencies communicated XX% and that performance the at of been gross to This range. be that operational XX% our to full achieving to previously achieve translated the

territory for operating which generated first these puts During our QX, trailing delivering adjusted to growth EBITDA time. we positive Overall, after the commitment EBITDA our expenses, profitable million of in illustrate our XX-month results to shareholders. $XX

yesterday. our a Before turning briefly guidance, a disclosure and that in filed discussion to included review liquidity was our XX-Q of will I

As Audit report, our investigation of know, conducted of a us to seller was you this with forensic the the counsel may in allegations short the an published February accountants. report made response year. In in short and assistance back on an outside Board's Committee

the disclosed I information examining seller's report, previously we investigating to that raised pertaining recognition this revenue the that Recently, report the the are the are such us requested, certain as are of that in they we allegations contained short company. the and the however, am the pleased merit. in material without policies SEC Based share notified believe SEC our on short topics weakness. matters has some investigation to concluded

with We are the fully cooperating SEC.

expect we by matters a requested financial material information on to SEC predict our the it condition. these timing impact we the the or have outcome nature Although the of on not and cannot do based

XX, Slide to Turning liquidity. our update on we then

the our bolster that to liquidity I To revolver enhance to of that report traditional total to $XXX liquidity. I'm quarter ABL a am end, our credit million liquidity. this facility support growth ended with pleased industry-leading with nearly share our happy third continue We week, that our we also to further objectives. to we replaced

new by securitized thus $XXX limiting U.S. may under basis, the on credit has $XXX lower not than of was us revolving than growth. storage balance, this recall, in the million covenant of to since inventory, our you billion, $X our inception. The had $XXX excellent puts total commitments more a facility line ABL level of availability energy an As bank facility the to its which more million facility our pro from market. this million is facility liquidity forma on expanded position capitalize an now With a contributes which growing

XX. Moving to Slide

$X.XX to billion prior 'XX to midpoint $X.X We this have billion, with revenue of narrowed a guidance. our our guidance full lower than $X.X is range billion, million year revenue $XXX

X This reduction factors. to is due mostly

the $XXX X been for multiple specific postponed accounting have projects years. revenue expected for that approximately were by there million of First, customer

a readiness, into Second, into customer projects projects permitting of process. None backlog delays moved the variety of than related civil admittedly that signing and certain for and issues. works, These of reasons were interconnection delayed our were backlog was decision later our these include anticipated. site to signed

expect we revenue in this delayed recognize 'XX. majority disappointing, of Although to the fiscal

implies noted, result would 'XX Julian guidance company's a history. the highest our fiscal QX As be in that our

manufacturing milestones We confidence to logistics. our which delivery and as for batteries, we of majority slots production control. To have in QX have goal that our secured and ability end, are of strong on project this deliver is the necessary cubes our the within

revenue. the us X and thus weeks ability X deliver revenue in in our expected our In our almost year cubes, fact, of quarter, remaining revised full respect revenue our our our guidance. revenue and transit months gives outlook on of to have QX the put customer XX% the QX or we 'XX first the to year required In with securing for commitments our performance of our half for delivered expected quarter-to-date summary, in confidence of QX

XX. of a million guidance Slide would profit guidance briefly revenue will $XXX expected have other gross our full 'XX of million. to metrics. midpoint the year I review to at Turning be impact $XX least Lowering by our

of at expecting actions a have upper our margin end the To achieve we on we end, that profitability impact However, targets. XX% proactive the profit taken mitigate to gross are revised only range this expected for is million delivered year midpoint million. and $XX of million adjusted guidance. prior below This $XX to EBITDA $XX million guidance XX% of to $X to our

of guidance long-term range. continue margins to achieve our of we our in our the ARR up we from growth the outlook, by our fiscal increase seeing are expects of to gross In million approximately the 'XX, ARR This and raising XX% guidance expect our are Furthermore, now is profit we $XXX be approximately the result end million. of from previous of to terms $XX to business. XX% services continued

to looking expect we 'XX original discussed, our continue base $X XX% to revenue ahead 'XX strong as fiscal of guidance as fiscal our Finally, Julian revenue reaffirm fiscal midpoint using 'XX, growth, to billion growth we of expected a XX%.

to With the Julian his that, closing let back for turn remarks. me call

Julian Jose Marquez

Ahmed. you, Thank

results. key to XX from Slide takeaway conclusion, to I in Turning and want emphasize the quarter's this

First, our to our profitable year-to-date ability deliver performance growth. demonstrates

track deliver in positive year Importantly, gross XX% and to we year full on are margins adjusted fiscal EBITDA 'XX.

of in the Second, domestic put we have started content were to strong converted see the orders. We're that well before is U.S. which initial interest, enacted. IRA to our a customer motion benefits was strategy seeing

strong by pipeline fourth, more very as plan. credit to for our and growth have billion. And facility, this support backlog. well-positioned are Third, of now growth our globally, which than growing $X successfully we the our our liquidity to and capitalize We market evidenced ample and we upsized at liquidity puts is storage on the amended utility-scale outlook robust, our

With up questions. call for would that, like the open to I

Operator

Cho Our Christine comes Instructions] question first Barclays. at [Operator from

Christine Cho

quarter of margins. color this about year breakdown World, Over more. XX% how high your Rest should know ASPs geographic also I correlates your current outside that Is and more it like this any function revenues U.S. update your of how maybe on an the just breakdown line was but coincided it trend and geographic EPC? sounds which XX-XX, diversifying with how a should this with margins was think we backlog? -- also quarter, you're the of historically top of this next of from projects the on high the requiring Just very

Julian Jose Marquez

They selling than be tend lot assets. our as tend second, so our to -- international been Yes, a do to Ultrastack in offerings are markets U.S. offering we we you have our know, transmission our broader -- what solutions, more EPCs. Christine. Europe, in have the our And have

So ASPs on you the see will generally higher international markets. SAP,

X/X it's is backlog, where our the composition going in of right In the terms of X/X, now. of kind

-- seen will have the in tend a of it we international markets. lot So profit

at when at roughly we international. say X/X, U.S., X/X backlog, What So been the when like we have will it's X/X I look XX-XX. you the today in our look saying more pipeline, essentially

that's at it. the So way look to just

stay last is quarterly drivers that the will not lumpiness basis. in lumpiness ASPs projects -- of and as projects will the this of of and the we on because are our And of the the is third move type revenue of that, forward, a all revenue point one our into margins terms which type same. what And recognize come projects

Christine Cho

U.S. give forward? U.S. current how in the couple cells, and update. And you content you've out with rule U.S. that sort there I batteries for maybe your of But use that for before then of were of XXX for domestic higher are know ASPs your have the versus a of how projects is backlog if require came some Section can And contract. of we mandating your sense majority thumb mentioned update supply there customers AESC cells of a ago, could conversations us for eventually the to curious customers since how follow-up, use all demand going contract of the way evolved for imported to U.S. percentage-wise much know that that those months much is a my your bookings cells U.S. the domestic that around

Julian Jose Marquez

I as the generally tariffs. lot the realizes that with a ahead of I we're new up that realized everybody. will of say think and seen guidelines and you interest is new have everybody right move, people now the have come IRA And this

get that how I plays think of help lot not see a have out go before. not we because seen than you'll will So what hole that more we'll anybody. then rabbit into to into a -- prefer I

very us. for and information can I of cost, is In what this you, competitive tell terms

can So you and include competitive what attractive. costs they the producing Even the in U.S. some very very that costs I tell though additional are is by

our do us, stage, the pricing are the and That's contract very, we'll the the very, best to content competitive the at very information But So customers way very tell -- actual prefer they this with can you. I U.S. disclose on or offering. well when Mexico. not

Operator

Research. Nassano question comes Dylan Wolfe next at from Our

Dylan Nassano

$XXX just updated here, the So this the midpoint taking like year. guidance on you're on math looks it million out of the

] delayed is You're of holding of what this million XXXX, out came $XXX [ years. multiple year

suggest seems year up So to from that $XXX next this year. shifted to to million

correct, guess Because anything XXXX adding out XX% shift you're prior if you that is this of to growth? top XX% math million So that did the like your $XXX above put I at the end or outlook? if wouldn't year,

Julian Jose Marquez

Nassano, 'XX of say, for billion. a today, is to that our looks. -- confirm give we how next confirm more growth original we're of what would budget working midpoint out we can details of I Well, 'XX target can on and we'll on year, you XX% But XX% $X

So more earnings that's give what you we details late will -- I when call in will say next in our November.

Dylan Nassano

follow-up And that of you looking what the just report was you that about, kind Board which scope to spoke speak of investigation, the into? then the guys were short as a you investigation on Okay. claims can from specific

Julian Jose Marquez

in at all elements ]. Our there no committee that that firm of them firm. forensic has or independent no a Everything there, brought merit accounting comment that it. had auditor they -- and the in found X look law merit, of and forensic there's hired all an relevance was every the [ And

that -- investigation we clean all very bill health feel that detailed firm -- necessarily and came -- law we X has the a was that can independent It of stuff were So support all even what And they're that say. are really accountants not with that everything that's really, at were of that of out the merit. with looking implied the was we reading. things the both

Operator

Morgan Our and next question us from Stanley. Andrew Percoco

Andrew Percoco

I want to content domestic a the back to come second. piece for

demand anytime soon, do higher see in strong you're a of Just you do expand How from AESC, curious, the that getting with the you agreement conversations obviously, the demand need demand maybe for that given just of I'm have last products. or how domestic X pricing just terms curious to those capacity seeing. given feel so? over months of shifted on AESC sales you're just level for obviously kind the

Julian Jose Marquez

good question. Very

'XX. lines or first coming it we any will 'XX X producing one into come a So XXXX, additional if -- an AESC, they late a we is and deliveries of in And for that contracted right early that bring another operation so have lines additional with refusal in line one start in up.

to and capacity see meet to that So to commitments the clearly we our have our street. we meet demand ample the today

are very So happy. we

terms had of ASC, pay we with to we for deal this. the In remember,

that We prepayment have to the we disclosed you. make all to of

discussion and much I a requesting fact we becoming it's the and And way that on reality content. go, haven't the seen with So this first-mover is from to popular. that. or very convinced domestic to ASC possible the reaction is advantage is of and is are any pricing not and us right. will happy this as additional prices, think with were I we the in proven more has firm our we now price say And that was our that our customers deal solidified any this accelerate What view

Andrew Percoco

then in any in driver or terms seeing difference the of I'm maybe maybe offering conversations maybe mentioned curious there's as impacting those pricing the from your achieving that how if tech that in and Okay. some and is you're And a just that's attributes duration, of follow-up question, market. AI demand. a you're you sizing Perfect.

Julian Jose Marquez

a point need the from market. That's on. I technical we need is what a is We have need coming It this of invested view. difference which urgency. of of for seeing to do -- real speed, something faster. No a is we're say the that What that, that's will say, level also also No. becoming I'll

past difference where center projects I which not data little necessarily a that's a that's when not from where So -- were we think are of related. where bit the

Operator

Partners. Our next ROTH Clare question comes from Capital at Justin

Justin Clare

supply using chain when initially Or domestic to and gross cells. using to you of do as domestic margins compare curious, And asking as do the potential start expect to kind lower off your the ramp you international supply you just U.S. be increase you anticipate you're right the just margins margins wanted away? for you I how full be then will chain, then to So at cells scale about up?

Julian Jose Marquez

not terms go I detail, our In But what this prefer U.S. especially that say that of I I into margin as said, very I to domestic of our U.S. XX%, can that And content is makes domestic -- say offering, of XX% competitive, more XX% is publicity, today. minus -- our to I margin to from we if XX% sorry, our X% today. of XX% us bit even can will confident a guideline provided. little that we up to came add

the we're that And -- lot territory, XX% a not we we're today, not think where that that margins people -- we that could makes then Well, put to today. have in on in realize very, we deliver feel XX% us our on, I I see offering, significant to of only you coming of it but convinced the telling think some ability our part. very initial terms confident investments. on And

First, realize the new to going module publicly it not ahead -- day -- line labs we're products do a we to way and bringing runs we -- put in we from that well, in ensure test line in margins ensure can our X. very that to our earlier the of investments our that have

being able confidence margins line feel the period -- labs us the on that that are And we're or new new new content from on monetize confident to of very a fully we for U.S. give a domestic both tested content So going our our time. to module domestic products U.S. one. be day with

Justin Clare

pull recognizing on really evolving the then point? maybe much backlog, how just fiscal a then That's able when project. do how then comment you're a anticipated timeline of can you if when at it. average book you're if this 'XX you the forward? on just the you timelines, whether backlog you And and project seeing complete to you anticipate And bottlenecks on helpful. to could and comment from And could Got just timelines curious Okay. your in project that they're just

Julian Jose Marquez

Great.

what In terms it's our of we revenue, our X/X. in for revenue, roughly 'XX 'XX backlog have

about had So what and looks with well great. we in very feel it, line last we year,

In centers, projects. think, hurry timeline, lot terms quickly. they very of data invested given we customers position. competitive want our as gives things And a has our that, accelerating a That I a position I very, when of delivering us competitive have capability in or are a project's us mentioned, in

However, what has is a set become, the necessarily us, factors. mean, bit -- by little I timing external is of that other clearer set now what's not some by

However, much efficient our of point an economic allows shorten from much more -- timelines project a more view, project.

project In a have -- guideline that you backlog. terms of for financial I look guideline but we you. our think the to a good told our it projections We a XX months and at down, good guideline use it timelines, been we I it's think should to continue that's brought bringing for we good for --

things We change will if materially. let know improve, you

Operator

Our comes next Canaccord question at from Genuity. Hayden Leanne

Leanne Hayden

to see was believe you as wondering know gross the I start, margin. was previously I if you revenue To reiterated XX% XX% expectations. guided. a still just to I growth XXXX it same expect profitability

Julian Jose Marquez

I would us give you expect XX% even Yes. tell to confidence deliver of same more this year would And be XX% range. XX% We performance profitability in to the XX%. the do able that that we to

to we company was to to took This our X% today able feel over XX%. being transformation the in now when XX% from the are confident very So minus happy. we very to

we work have all here. the that very are proud done We of

Leanne Hayden

you data on hyperscalers me on any more one discussions And on focused center Or mostly well? provide center that could data your then would or for are demand, be just as increasing color small great. providers

Julian Jose Marquez

U.S. the were developers in top-tier you As with we know,

X hyperscalers. So That's it's what mostly hyperscalers. are midsized There might be say. generally or that but I'll X

Operator

Our Jordan Levy next Securities. question comes Truist at from

Jordan Levy

a wanted specifically perspective from you're of kind of what earlier to in a market that market entrant I a into large get year. just this the competition sense international seeing, with

I think particularly in Europe?

Julian Jose Marquez

is not -- market the in markets do of see There the -- Each are Yes. different. I've we but very are active. U.S. players been not are some clear.

continue it U.K. probably very market, good of is market win a we is market it we delivery. market. a tends to that However, most I The entrants. U.K., progressing is competitive in -- Europe, and a can terms it's the especially than because let's very, the about very very more be a it to a of are about we lot lot let's that because talk very happy U.K. requires the the European very it And is a market, also it competitive is will open say say, -- capabilities And competitive

market it So to interesting that combination makes work. an

Europe, say in the has a X X bit I Europe offer market, of a is less hour. be will higher, not it rest also a tends little it's than not however, it's and the hour that bit intensity The U.K. players new It because all little competition of to

Jordan Levy

for, those anything terms like just players. more then know lot customers conversations direct have that? a looking might had your of if maybe of on to I'm it storage those question in at last prior with I all duration a as the what in all probably evolved relates And market. be a follow-up conversations data center on And kind curious if for key you from the your commentary conversations space have of solution or just quarter,

Julian Jose Marquez

-- our center centers tech that of for data indirectly, for large top-tier data developers PPAs the it is companies Most we us. comes support and indirect, big demand Yes. big offer

the through doesn't great go indirectly, of seem that that We'll And most majority it directly. connected be that to that through companies. believe we up. little that So is -- continue a ourselves we do I centers large -- PPAs will is would data to opening large with very there's market -- tech to say the

Operator

from Markets. BMO next Our Capital Ameet question Thakkar comes

Ameet Thakkar

ASPs the quarter this could was like are wondering of of like were, if looked we there of you kind to one-off not -- of not Or way? it around were I just $XXX it quick, implied the real kind KWH. that? think, perhaps I any right at Just factors speak maybe kind drove looking that --

Ahmed Pasha

Ahmed. is this Amit,

But roughly international at quarter, quarter, the mix if reflects I the the the you're versus So the during seen yes, pricing, contracts. there -- that do ASPs XX% less. you we more the is commodity think have to what those the we prices. more in embedded elements I with the right. looking EPC you're in I for of if year, have because year-to-date contracts think have And And are think just year-to-date, where we for look

a to the is -- is declining, that on pretty way about lithium-ion that but reflects year-to-date think So is the basis right prices.

Operator

Our next Harrison Kashy at question comes from Sandler. Piper

Kashy Harrison

Congrats on also execution. the and impressive bookings backlog the

months XX-month focus backlog and implied the in around significantly the increased total the bookings. the So Q on billion. quarter-over-quarter to $X.X XQ, but flat is I look. backlog a was noticed I wanted It XX from that

good XX only through it's June year. of next So

next I'm And if to of XQ I estimate? XQ you were another general happen that -- in billion business? jump just wondering sense the can of implied that what to a September, you wondering to weighting just would if of the just because us year $X.X was just weighting big extend give of there's -- the

Ahmed Pasha

So yes, you're right.

driven partly contracts And where the I by and that think frankly, our nature months. want peak the deliveries who have that the is during this are lumpy. the the of is customers revenues their we nature summer of the business,

be probably I think we think would year, think we that half is probably -- I yes, I to XX% of this revenue year as next XX% well. and loaded mean, our the second case So back-end

Kashy Harrison

were next would year? if probably include billion -- $X.X the significantly is XQ So higher you to of

Ahmed Pasha

I completion. of is percentage But the So here think key the yes.

lumpiness we contracts, more But the have I you in as our think more we continue that's net-net, that to we back-end execute as on contracts, will realize. those see sign we will loaded business.

Kashy Harrison

tough it. flat $X $X only but to I then that. bookings you think try exiting billion, that you appreciate for to my I a Got it's this can year hold to Do quarter asked forward to ask And wanted revenue the question next I guide billion anyway. know quarter. big question, I very follow-up is since

trying $X sense was just can I a year-end. so if And hold $X billion through you of get billion, to

Ahmed Pasha

Yes.

position were is revenue where we is I last we more in locked contracts. last same as year our the place sign of expectation are at and at we we stage the the think we QX did I 'XX pretty that and and expectations same year. like call, for much our we about X/X I were more backlog, mean, think are in this

as a I is be year mean, And that saw. we gigawatt this similar we will you situation. signed last 'XX X the quarter, hours, deliveries. full to I think frankly, in equivalent

in volume. seeing significant growth are that continue. And hopefully, will we So trend

Operator

next at Our Baird. from comes question Ben Kallo

Ben Kallo

just question first was My on pricing environment. the

and trended about the they guys talked where ASPs You this year.

As down, expect you how continue you could what decreasing to as it I look know just to XX% levers U.S. transition if out costs, next you we square pricing XX% you to margin gross maybe year, to go your maybe to to talk manufacturing. about the for with us

all on competition you're bringing is So in what just that the just you so U.S. if of up price costs keep declines. maybe can And down second in in then seeing together, terms question put my with the specifically next players I that's out they right to the and any how U.S. year? are the players competitive impacting in you as produce pricing or business international look and of now U.S. if coming your Chinese in Korean into to levers and

Julian Jose Marquez

Ben. Great. Thank you,

step. On do XX% Maybe stable go the say, it XX% Lithium around around let's carbonate down has why today? -- one to since May, see May. to pricing, back XX%, came up we been

it the you how relevant has of Lithium storage this sign market a -- gives less is become getting price battery that in softer. getting softer. is of lithium terms the or a price. That is So somehow lot

coming point elasticity in will and consideration demand fact strong see do And into going that's plan strong. to -- some will down. We this we it. work that, guidance So price our we for important believe it forward, market, seeing an continue the to we going reductions our that of Having and have. pricing for takes that is we continue said

than in in You see XX% less it growth a pipeline. year. our

backlog, orders the we at So to last were in this just year, recognized in our same our volume looked we contract quarter. able year, a just

you demand. So tells that elasticity the tremendous of

the of not not to are we're going -- see a 'XX. said, prices I repetition As

ready to We we're soften. will see continue prices for And it.

we view growth commit XX% XX% prior how and our it to have will midpoint our -- billion information. that with to what midpoint of can work -- We a out of $X our

customers, essentially a when players are I terms change -- away, -- that can I and mirages. do not we of getting there's cannot not what -- We're names don't been is in been And In the I behind. a deliver realize our this haven't talking -- going they has in has when maybe Dallas, to clearly, about very talk lot nothing. mean, competitive. deliver more in I is competitors, competition But we we to Arizona. the they It these -- market. my There's people seen nothing lot you I When because competitive the go It -- a these do say are but there, they always this of get they down. I customers, cannot information. stuff. competition, talk went not of

it. You cannot touch

So very all not sounds very, good does exist.

do and expect and the market, U.S. more competition. it, competition So we for we are in we love ready

So we're to ready But it. of these think I of their from will part that become for it for while a reality do that. lot take not a dreams

Operator

Our next Partners. question Guggenheim comes from Joseph Osha

Joseph Osha

only that of is while an supply. I'm into sourced to cell domestic of a ago, numbers same to tariff when saw to industry in that demand XXX meet reaction comes relates was industry by maybe and wondering able numbers? if cells. you X/X It question kind to The event X/X with domestically some effect. to first if suggesting the going My a this XXXX, you're have seeing be

Julian Jose Marquez

this going projects at and that to who be are view have going to who said a is people have is people the are to all that that enough deficit. a a very were are will the it it people and I to have I there looked run have and the demand know there you believe, -- that cover, a cover about the if heard, going We've huge be be say market, tight the market in we'll surplus over Probably don't they you that's to will middle. is But think This to little somewhere U.S. in bit. It's 'XX, be time, going there but happen. enough I important in

demand. will We to work meet that

So from our part.

that think players. more will I there be So

So probably as -- be of the expect around. read have a so tight, you we market don't where will reports some

Joseph Osha

world. the project about plus any of movement out certainly if seems it then some picking greater because chatter solar your of those up and relative wondering your And other volatility we're look of I'm storage-only perhaps folks wondering, business level business the a the like Some of solar lot in storage uncertainty -- plus there or from solar I'm signals in my seeing to -- timing. follow-up, if you're at just you business, storage if

Julian Jose Marquez

any the we way. normal things or sort. reality anything mean not you a or all is we when in months. we delays It or haven't I no getting in project involved, a delays it's in any in deteriorated to of things at project is seen Normal get the a worse counted project weeks but street to that normal or get that a in [indiscernible] years permit move

markets a But than it's haven't we different I we delay. our the have are it's batteries same have -- into between later that as these they projects when will mostly -- international PPAs, we're are permits delayed not we said the signed do place the have financing, the month. and which all solar, stand-alone, batteries gets weeks, type in lot my these -- that ones not have -- and in any we the and of customers delays that that in stuff do never projects the they is seen, so get are things things by in So we there,

Operator

next from Lee Sachs. at Brian Our Goldman question comes

Tyler Bisset

This is Tyler Congrats for the here. Bisset on Brian. results solid on

well to from centers continued strength EMEA growth both have I expected Your growth appears have guess in base. as domestic regions, the lower I would a in data in APAC grown I is see see and content. but Americas CAGR as but the pipeline to the from strongest higher given

in Germany called out Australia. and growth You

other there any certain growth? seeing you're markets seeing you getting there? are traction where products are Or outsized So better-than-expected

Julian Jose Marquez

for that I has think Australia and a a nascent growth. we new the very ones is is we market been big attractive. continued Germany talked see growing, prospects very, about

markets are as in international market, So differently is thing international we but you said, growth a affected. much or there the seen our the our that because things base, of mix, lower rate they're move growth growing out strongly. And more here a have not and rates the

So with strategy. happy very very, our global

manage I a what we us headwinds that in gives globally, effectively markets and with if in of or here like This kind of would few or you to -- concentrating much that's than maybe globally might highlight. company only think couple were ability I markets. to there, a get working an -- working more a

Tyler Bisset

you And that then going number expect your out called data do How to centers. XX% U.S. of guys trend you pipeline forward?

Julian Jose Marquez

it continue will think to grow. I

to And grow. I will continue to it difficult know. think

you know, As we indirectly. get demand this

centers. a So know [indiscernible] we we calls with to talk listen we they're we seen centers a developers them in about have are data the They do market, involve not who I our what it all and of what up the customers, be the multiple game think the talking about will in that date. talking -- of all data the of doing. to a we But data game with to involve center

grow. So I number to expect that

Operator

Biju Susquehanna at Perincheril Financial for come last Our Group.

Biju Perincheril

sort the that see deployed any to changes in for place to need for of of U.S., that And be applications sort I of to want with I use about also if there that to ask regulatory here? the take batteries want technologies? transmission to opportunities DLR especially coupling sort is

Julian Jose Marquez

point. Good

great continue this We is -- successful technology that has been in a very Europe.

FERC main the We transmission or be that -- say probably in batteries you know, a the are will assets. allows promoting the that know as as technology you U.S. to and I

in So Northeastern rules. the with allowed systems. MISO system some it so A system are lot of operators -- the the allowing up good. that's their came there rules,

of are batteries However, by assets. that owners the transmission on the what we see ownership is restrictions of there the the

of be out that, the think, but demand. restriction cannot needs and generation by You owned or cannot or -- by view that same a the call-in person same them, operator to a the I comes that can owner that transmission be entity. is the dispatch put And -- they

does what that's that. essentially battery a -- And

explain but hurdle working the a and own we'll allow that creates become we're see U.S. asset batteries more in the to on owners, to in we've owner regulatory that Europe, need it the been trying it. that you the regulators of order think more for success these I same So this to of and And work a transmission same to happening in to the

happen. that So confident we're will it

Operator

the question-and-answer for to concludes back Lexington remarks. would to like I now turn closing This it session.

Lexington May

participating you call. for on today's Thank

out you look If free we you quarter Have to day. forward have report fourth reach any We me. a with again additional to good speaking questions, to results. feel when our

Operator

This does conclude the program.

You may now disconnect.

Fluence Energy (FLNC) 8 Aug 242024 Q3 Earnings call transcript