FCEL - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to the FuelCell Energy, Third Quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. [Operator Instructions]. to conference like speaker to now today. would hand over the your I Vice and of Gelston, President Tom Senior Finance investor relations. Please go ahead.

Tom Gelston

Good today's Carol. joining you, morning, thank and Thank you us on call. everyone, for

website press is on As a will released release, financial section the to on earnings year investor for results press recorded. fiscal the our addition morning third this for hours our conclude call. two of slides webcast and FuelCell call in after relations our replay quarter approximately will practice, being at presentation the the we and our XXXX, reminder, is our post with Energy being This release be on This website. fuelcellenergy.com. website, call we Consistent recorded this Company's and the is of available available

we prepared Before including discussion presentation other FuelCell the statements continued XXXX. All operating liability statements forward-looking for anticipated the financial respect statements. development, to safe your statements Litigation financial performance. regarding disclosure Act regarding and our of and established of historical attention Company's Securities with without the than forward-looking on expectations Reform direct include today technology of forward-looking financing results press statements disclaimers. anticipated and to the please harbor by intended made to and the the its forward-looking this commercialization, business These plans from Slide are facts plans. of to statements regarding statements, included statements qualify the will are call in Private on the contain statements X related and and our statement and Company's limitation, comments, release today begin The

represent management's available and on made time, statements on current information expectations, are statements made. Forward-looking this at such based call

particular, unknown strongly you the differ or the and statements. to and results information We cautionary those factor our XX-Q. forward-looking in statement cause file regarding we actual may report our and the from numerous quarterly Form described risk SEC factors uncertainties, annual encourage our with materially forward-looking are assumed, of Form that implied results Forward-looking and uncertainties, in report XX-K statements on by on to the language other reports concerning in in that disclosure known any risks, statements involve predicted, the these review risks section

the morning's also earnings this Cautionary should You forward-looking in review section statements press concerning release. entitled Statements

we SEC financial financial when and with call, this we about accordance condition will During talk use regulations. non-GAAP the Company's in measures performance

and in posted investor reconciliation of the measures earnings morning's a release reconciliation find this GAAP can of the on non-GAAP document measures our You the the website. and comparable portion relations

today, Chief call Executive Energy by Chief our Mike Financial Bishop, Officer, FuelCell Vice and Jason President For 's Executive Few, President, Treasurer. and Officer, joined and I'm

be your and joined call to our to Following other will I leadership available like of Jason be remarks, take remarks. questions the opening we by hand team. the over Jason? for now members would prepared to

Jason Few

powerhouse our joining the against a Thank And strategy. call as Thanks successes you, during everyone. had our good We today. quarter continue business we for us number third Tom. on morning, of executing

overview the brief Before into shown a getting I business X. give will slide Company highlight, on

categories: Looking XX and at approximately our million, of comprised year ended full XXst, technologies, XXXX. largest delivered three We on generation. our last October fiscal revenue of licenses, revenues servicing advanced

of sources All multiyear revenue diversified recurring represent which of under contracts.

of business the growth. essential in ultimately domestically. target will including product international categories near capabilities opportunities strength in from markets term, customer and Europe, strategy incremental pillar go-to-market powerhouse our been support taking development revenue just regain we that sales revenue In In an an mentioned, step to addition steps We've to we rebuild we developing segments meaningful Asia, and the the future. business in our in are confident as see those three to

experienced markets, adding we we client to segments believe been targeted continue to segments. position will relationships, focusing that global opportunities, growth also us strategic which reenter on expand have ones focus deliver talent customer key as and long-term market We new on by build

is FuelCell reliability. Company growing. energy We've who systems are headcount, and capabilities global currently creating combining of team enhancing many XXX Many utilizing our grid microgrids, platforms. had installations Other customers power integrate resiliency members Our levels. efficiency these high multi-featured and enable

in Some of onsite our applications power, and neutral negative eliminating to flaring. utilize carbon biofuels, resulting carbon

slide to X. turning Now

to Company, our power clean live reliable we're always manner. enabling The energy. world environmentally by a a As empowered to of purpose responsible life need created world committed the will an in

customers range than reliability reliable hurricanes, our Today, energy to With portfolio, other positioned commitment and by assist access periodically resiliency. ultimately, according WHO, to load billion grid the of are world. power. critical the change We're infrastructure with that granted. to and deliver committed increasingly to issue FuelCell challenge leverage wide be taken goals, solutions more uniquely on that extreme and to climate of decarbonization ensuring a broad and base are addressing meet without for a power to X clean people weather, is Energy We and our remains deliver the reliability around fires, reminded providing can't feedstock, product that

hydrogen form combustion goal a industries communities rely renewables, development and for has generation world operate, fuels, supports to on to electrification. transportation, customers believe clean with doing. require they in economic utilize of thousands unique our for deindustrialization. intermittent electrolysis away. energy Instead the clean countries that the standards participate and of to directly and power to plan ability to provides miles each hydrogen to as energy high generate future our which we for hydrogen, energy continuously source purpose developing nations. existing should believe offsets stored the the non-on-site industrialized to impact to that offsets, solutions This resource assets should decarbonize to credits look as or reducing rely and economic to that provide and future, alongside through And can re-power We and strongly the also solutions of around in strategic able can living local in originate the promise hydrogen in differentiated while that we manner of technology deploy need new solutions and/or adapting challenges. hydrogen decarbonization and drives work does heavily do less these the the we're on passionate a of Our the focus sector. and objectives. suited And that make authentic about direct customers be achieve a We protecting our which this the We of environment industrial and growth up in not

your to some messages five. for to turn Next, shown on the key quarter like attention I would Slide

the mechanical am Bernardino, in the a to X.X-megawatt achieved California On began commercial Submarine we megawatt treatment facility. Connecticut, quarter agreement. I at operations wastewater announce pleased First, Base Groton, very have the executed project project the Navy interconnect that the at at completion biogas X.X during U.S. and San we

operation, overall the the During gasket prior plants of result, repair elevated commissioning delayed as process, suspended. the was one installation. a has a and commissioning was This the and as a process stage of inside localized platform, we observed timeline seals and the component commercial final temperature for the the commissioning to contained two installed

and and the the applying repairs identified of as Our to is team process root necessary cause improvements the in plant. upgrades, implementing well preventative has the as

on so in project activities base. navy resume on We late non-fuel this is commission but September, to energy-related timing on expect dependent

advanced X.X-megawatt Our commercial has XX.X progress also civil clean in possible. activity as continuing intent utility-scale on in construction Onsite project operations Derby, expeditiously share our projects in utility-scale And to development. energy totaling is our significant other to early-stage is XX.X-megawatt platform achieve megawatts. as make Connecticut. new We're on backlog, our

our shown continues. the side project Yaphank, the slide, in of In Island, addition, the which construction of is right-hand X.X-megawatt on Long

and our this TriGen carbon-neutral enable hydrogen X.X-megawatt port the drought fueling a vehicle to consumption customer, hydrogen, avoid water green and electric experiencing multi-feature advanced FuelCell growth provide of central construction. in is conditions pure infrastructure at continued Upon a early civil the water, which distributed Beach its hydrogen platform Our in extreme platform transportation. to deliver helping will region hydrogen Long site of Toyota electricity, California, built has being completion,

overall we proceeds to from support, sold technology using net approximately of plan XX generating purposes. our and working further advanced Sales to development subsidiaries. common million Second, and accelerate and financing, we product approximately million program XXXX, shares on across flexibility, of platform June, offering In we to July lower sheet of to to offer net We have XXX commercialization our strengthen financial under the Barclays offering stock. of and at-the-market and our Agreement, achieve Open Capital with Jefferies XXst, corporate an Market and products, for capital cost the this an our enhanced liquidity XXX commenced To Through general Company capital our the the million. balance up proceeds

us second with enables is from commitment tax we Groton, capital tax And a tax for -- financing FuelCell interest located Eastwest project X.X-megawatt strengthening and to and million. energy a in structure a with the a Connecticut. U.S. Navy technologies. Water partnership project demonstrates our marks what is equity was with X.X-megawatt for we sale-leaseback The equity bio-fuels tax commercialization today the of the transaction on on This flip additional markets closed for focus on XX-year recycle recently leadership enables One on deal city California. XX.X projects Additionally, is equipment third solutions the XX million That Department transaction closed with X totals sale-leaseback Municipal Bank San equity financing the these Bernardino ability Krestmark. our total in transaction utilize message we in X.-- Base the finance key transactions. FuelCell Energy's equity and initiatives. sustainability. to Krestmark continued through FuelCell believe financial clean And financing Bank, differentiated Submarine our Eastwest

our the to our hydrogen generation, power and and development commercial have storage, commercialization platforms, commitment well solid our growing electrolysis increased hydrogen as of research focused capabilities. on oxide We as

modules, the to continue balance and oxide our stack plant programs supportive DOE design solid systems. of stacks, of advance Our

of storage portfolio, the society solid distributed Through platform the address oxide hydrogen looks major high executing grid We at to solutions energy and to and and for energy climate develop solutions combating for address reliability efficiency, ways electrolysis, to deploying portfolio we're generation, solutions hydrogen, technology time developing systems. also energy focused Energy some opportunities. issues power generation solid same on distributed storage, reversible power intended while hydrogen global very our largest are Carbon-capture oxide as global FuelCell programs and challenges for issues. developing generation, remains our

long-distance deliver Slide high-voltage Turning help to FuelCell to transmission. where costly which decarbonization Energy believe networks harden less We distributed decrease resources, dependencies the be efficient energy it dependence X, delivery lower needed, in solutions and environmentally delivered grid positioned to is the world, the less infrastructure and energy will across is on centralized chain. must friendly value around on

existing alternatives on Our product enhance distributed distribution base-load a avoid Energy carbon by hydrogen, hydrogen for sources, solar. power solutions, level, sources, to providing of And Mike? X consumed, and carbon turn ability for local XX green hydrogen, And generating delivering FuelCell over thermal we investments of in to I re-powering -- our platforms Mike will using the degeneration applications, in financial is of onsite basis product to where operate variety platforms with clean is assets to high fuel carbon now for our growing traditional offered generation more offer resiliency capture discuss capabilities and ingredient proven results generation, the emissions The traditional supports generation from to and will assets. applications, as from around our multi-featured the distributed-based extend and closer world. delivery hydrogen utilization. commercialize those opportunity to ready signing as wind more generation energy commercial it storage. and/or detail. life the capturing At energy, microgrid by we the grid by call power ranging to solutions demand transition a our a and and than

Michael Bishop

Thank you, Jason.

quarter revenues of the year to reviewing begin in million financial Let's the million of third fiscal compared we XXXX, for by fiscal of delivered the year shown on In XXXX. quarter XX.X XX.X highlights quarter third slide X.

These period. Components the Operating mix quarter third the for government increased JDA, of to quarter. to revenue of volumes. higher fiscal due the equity third to expenses grants for for compensation incentive X.X or at to under Development of margin and the a quarter in X.X well of during profit of XXXX. increase in legal were totaled Joint XXXX, projects prior-year Gross $XXX,XXX, less made the operating quarter. plans exchanges and third million more contract and the the compared for $XXX operating the expenses as a additional prior-year quarter, the expense expenses to for XX.X X.X margin fiscal revenue XX.X million million gross and of XX.X million gross of quarter, revenue expenses lower to in year revenues million net XXXX in result to XX.X under XXX% loss million quarter, higher non-cash Advanced primarily the X.X from in higher with to million, million. gross expenses generated recognized and the quarter Higher revenues current the XXXX quarter to margin as fiscal and are, a $X.X new for loss of prior-year X% the depreciation loss XX.X decreased to fiscal were Agreement in XXXX recognized third generation increased a by selling Looking our an part compared offset the Company increase million of to result initiatives, XXXX, and advanced increase variances million Engineering compared a long-term of of and prior-year quarter the to service from partially Module by development in an approximately primarily staff to a in ExxonMobil fleet service a quarter quarter compensation for to due module Generation of decrease million of quarter license reflect period. quarter manufacturing maintenance to to in the administrative technology totaled of the margins quarter XX% related increase third fiscal the spending as share-based with of our XXXX prior-year comparable primarily due commercialization result revenues million Company's X in in EMRE, totaled compared The compared there during investments or and margin and current improved of production in generation the in the The activities, approximately primarily the in fiscal totaled result the million fiscal in Research the portfolio, X prior-year gross comparable improved higher of lower third compared the in compared drivers of period. related Technology XXXX, comparable as in to gross due contracts. year quarter. exchanges increased prior-year as increased loss the operations November from more from X.X August with increase the quarter. our fact, output the associated revenues period. tax were increased Research profit of an and and financing, contracts under year primarily size. included due revenue as XX fleet government the Net million comparable XXXX fiscal expenses gross hydrogen of [Indiscernible] XX.X third X.X was in module category, quarter million to third agreements to exchanges million comparable

quarter obligation loss of the the for loss XXXX. appendix recorded gain in of measures, a to was share XXst period. quarter discussion release. was per there compared operating interest stock factors XXXX. the period fiscal million earnings quarter in to in in stockholders. of no third issuance expense including to of financial of partially compared common expenses XXXX result the and Additional by in fiscal the common for in third common the non-GAAP net and adjusted -X.X of third quarter as EBITDA third million contributing and was shares offset outstanding loss EBITDA fact The in comparable -X.X weighted to included there the $X.XX, fair of the lower repayment common and deck July due the a as net The higher was facility attributable was early totaled XXXX, net higher on lower in a our warrant this change EBITDA to the due fact the XXXX average $X.XX extinguishment there of Please quarter of no stockholders the prior-year share Orion finance to the of charge liability, value the of since attributable Adjusted see lower adjusted the

turn please numbers reviewed the slide graphically on Next, to chart and our left-hand of third quarters side just on we backlog. XX. the for slide for XX details additional the the financial X and fiscal performance years shows of The

fuel approximately inclusion slide, the quarter generation of the of reflecting which was Looking decrease pricing, primarily awarded by offset billion which United of resulting backlog adjustments Derby, this from at backlog the side second lowered the backlog continued of revenue this in in we $X.X in year. to finished quarter right-hand with the the project execution estimated future of Illuminating Connecticut, the with fiscal and

Now, to I on liquidity. build our Slide upon turning comments enhanced Jason's will X,

of common equity million enhance he the closed stock Eastwest to further with Navy Equipment position. Bank As $XXX our we Base at-the-market in Finance the our quarter-end, project net a will Corp financing of U.S. sales financings Groton, Subsequent sale-leaseback liquidity resulted in approximately mentioned, proceeds Connecticut. quarter. These with tax for transaction Submarine during Krestmark

strengthen All carbon out, actions building capture, plan, our a with of of solutions, liquidity expanding executing consistent platform, with these separation activities. and focus our on and us our including go-to-market are business business our enabling to including goal powerhouse strategy solar-oxide to

green chart cash the the and million As cash the $XXX unrestricted of XX.X of and This cash bar the represented equivalents, of bar. slide, represented restricted by had on of of cash million July million. equivalents total XXX.X in approximately cash approximately the includes center total XX, XXXX, and blue we by

chart and is projects side third gross light spent total million. represented assets. gray the spent make blue intend the capital to end fiscal capital $XXX.X by project our right-hand continue the the of project XXXX, bars. date on the a assets illustrating develop, and approximately completed up slide bars, generation the projects quarter represented reflect in of portfolio. by year We project on totaled and construction our development currently our Investments to At Company-owned construct, assets, of grow which operating to On

megawatts XXXX. As and in are revenue Projects begin process megawatts XX.X this July appendix to XXst, the XX.X portfolio in as of our detailed XX process of megawatts XX, generation operation. higher on EBITDA. operating of slide projects includes commercial assets presentation, This totaled and contribute expected of and adjusted They

and Additionally, future we projects to such previously these tax we as now I examples discuss believe turn on expect [Indiscernible]. past from execute discussed. our additional online, progress back near this the to as are financial a pleased call to equity perspective, I come well-positioned are In closing, we seek made the the with Jason will financing, over quarter, to long-term further. we

Jason Few

And to Mike. XX. slide moving Thanks,

the out today laid to sustainable growth. our comments and reinvest several been intend liquidity we've successful achieve quarters, an of As increasing attractive in to in which we we capital, and have cost past over

will revenues completed, EBITDA. to which portfolio, backlog continue as will generate our We and higher are execute will against expect generation projects our expand projects and this we

solid facility also our Torrington by advancing manufacturing to capture calendar toward an oxide production making have I platform up commercial end goal megawatts the investments we're technologies, discussed, the of and of all working already XX To achieving our growth of of our platform year, at strides increase implement megawatts across to Carbon rate annualized solutions bring continued facilitate XX the have As deployment. facilitated we're and and were focus been principles rate manufacturing of our additional manufacturing lean fiscal talent the and also across With by This the effort has in on production in business. key excellence, part our areas of we feasible. end adoption made [Indiscernible] several expertise from XXXX. at of toward

improving In retention capabilities development manufacturing engineering, for with capabilities. our addition to business key while personnel, functions have we and support also recruited in

some of give advancing to to our growth. because for strategic next I'd to In Betsy with We will Marketing Schaefer XX, I should also of customers policymakers proposition prospective her marketing local our brand that work in capital is value well and to it's our experience phase talent, details, summer, value investment FuelCell Peoples to journey Chief on elevating on we on talent. our corporate We've role the our she and assumed brought our of to the highlight resources communications, for as leadership enhance Chief Andrew management national further educate and team. board and capital This well-positioned as ensure Next, human XX role on specifically new like alike, Officer, articulate like retain, particular, us continue slide would additions of energy growth we human customers and and a into management. model, she brings as help essential regarding Officer in considerable technology, critical the the Fortune believe adapt and Jones, and transition. develop are compete

project We To expertise are service product grow add our areas the across and engineering, pipeline to capabilities, team continues our capabilities management also commercial grow. the our increase manufacturing, as of base at Company. to and base installed continuing to all product sales build

and Donna in I value as delighted business are tremendous our our X to X Directors, most independent. board welcome Sims today, respected and are our recent whom Additionally, Board to Hansen execute and executives Cynthia Company two strategy. Donna we our members, which am add Wilson, expands will Cynthia officially to

I was intended repositioned when was This the new guidepost powerhouse think the I of transition, will capitalize of won't on which is in each we us go win. relatively Energy on powerhouse We strategy, has Slide but turnaround around to market overarching based remain our strategy XX, transform, as Next, I pillars opportunities, penetrate FuelCell introduced serve through to to think and position important is I and business significant as strategy it believe January our it our we as today, on of technology strengthening, well. centered the CEO. business to our where three served XXXX, we energy grow. for of strategy these core that

striving and liquidity compete delivering a and We added to and growth production capabilities flexibility have continuously effectively our We're marketplace. growing backlog, our world durable and Energy energy. developing provides the grow plans FuelCell by a our as our and continue customer vision the of foundation power technologies, we and clean energized by team with fund the on operational in to new our Company, resolve to improve our in excellence financial I'm relationships. deepen our to built capacity, focus the attain

Looking will XX, that toward will strategy. fiscal goals projects, drive long-term require top we operation year in targets driving those launch project successfully continue margin at commercial targets XX.X-megawatt Slide backlog, we our executing progress each capital. achieving to with our and human for line the for established XXXX, Reaching against business and invest new these and and as of the of powerhouse commercializing revenue we

commercializing advanced we As hydrogen, utilization. long-duration sequestration hydrogen distributed power hydrogen technology throughout I've generation, pursuing comments generation, are energy and our explained my and storage, pure today, carbon around distributed electrolysis, capture

actions strategic exceptional Finally, across executed strengthen backed our by borrowing, liquidity, several our am Slide we the talent our We've enhance on the I an to and sheet, have which of balance Company and to my our execute growth strategy. to believe on XX. remarks continue to to add cost we team, conclude Company. leadership pool reduce positioned

adhering customers, operational goals, We upon focused building taking our and core our while purpose. excellence, on achieving of our are our care continually to financial

economy, hydrogen existing Our and investments differentiated have carbon play solutions. to a capture industrial in the a role and of energy global developing supporting grid, with technologies decarbonizing infrastructure key goals the

position strategy our our operational growth. to us business, strengthen years powerhouse two are We efficiency, for into long-term maximize and

on plan. a Although confident have bumps track we few along we the way, and achieve we that hit our remain can

full leader technology intend and a our of Carol platforms. call efforts Q&A. in on be provide will Through turn calls. life update deliver during the we future the And and stewardship. begin the strategy environmental our to Finally, sustainability over I to evolving now will an we to circular and

Operator

[Operator Instructions] the hash key. much, Thank we and Please you A stand roster. so Q compile while by Jason.

with of Cowen. Osborne first from Your line the Jeffrey comes question

Jeffrey Osborne

some mentioned two give just questions can I was Hey, just positioned good a could financing, there, for activity sense the be they're like, [Indiscernible] in of One the morning, their of developing and a challenges wondering terms near-term some projects? might of sales? had some product with you, of qualify that that products expected long Jason. if of in of and guys. you quoting the new the I how other quantify that can the momentum the you working you types You is but or partners lead you us we

Jason Few

Good morning, call. joining Jeff. for the Thanks

roughly that, talked Let you we a lot strategy. sense Being our to lot time me actually the And powerhouse try our We've spent that. of business to cycle the the of type part for pipeline of a megawatt-scale give projects rebuilding as of with sales pursue. the we've a in about class XX timeline that XX-month window.

working our leveraging product, on terms capabilities of the And we're segments, customer on the opportunities across of We is really what are we're think which multiple that in very good driving. focused that in pipeline. we position really multi-feature

more will that to So forward we wins quarters, we as about to actual customer on our we look have lot anticipate coming the a business. say

we know, after shortly was one moved PPA PPA we've arrival changed As backlog. our And actual putting to is we how only in talk case executed s, about in our or the backlog that s. fully of things projects of my in what the signed you contracts

get contracts, we'll more about projects. pipeline to move things and to contract sign those to lot a negotiations we say as these and have committed our through So get

Jeffrey Osborne

it. forward That's to great look hear, to

follow-up. quick one Just

us new you wondering to with or onboard, prices, I changes is revenue coupled as levels have? you you rate, Just helpful? run portfolio do what would product and Executives XX XX us, the zero remind guidance that be some we megawatt, headcount or given break-even was can Mike fuel add megawatts? what in assuming the have the can increased think should current the give at You if megawatt are, Any color about or need need? What the you

Michael Bishop

Yeah. Good call. morning, Jeff, and thanks for joining the

being get -- the what we're targets long-term positive. put by we strategy, out the Business the end targeting of beginning business XXXX And we So the the to that of Powerhouse at did EBITDA really to fiscal of online executing progress project San do of have Bernardino quarter. that, the continue to and this backlog obviously, the with strategy, that there, coming out assets building tenants to make we on able we

So you'll that. the portfolio, along revenue from continue EBITDA that to see comes with obviously, and generation our increase

is EBITDA on we to of plan. track positive to execute continue So our business next expectation as we're on still achieve the year that end

Jeffrey Osborne

Got it. a didn't at about how time? on think Is just level megawatt based certain to know or that -- I

Michael Bishop

continuing we the support rate that megawatts in year. the that us building calendar the as to forward. today the of support will are really It's we by and production megawatts out to fleet, plan the of go modules end XX And ramping so front is the business backlog the to provide to

Jeffrey Osborne

Got all had. you. it. Thank I That's

Michael Bishop

to And Jason have there that in factory up capacity we extent as to additional the of XXX mentioned, megawatts. are the certainly, opportunities

as to continue could we So ramp opportunities additional evolve.

Jeffrey Osborne

Yeah. Thank you.

Michael Bishop

any Okay. there questions? are other Thanks. Carol,

Operator

Colin.

Colin Rusch

about didn't I investment queue. guys. having what I the hear the cycles. Thanks me in learning for accelerate wondering Hey, was doing on. to and R&D you're

as those are I things products coming market, but into of to excited help that kind with what these along and R&D products to of structurally get think, what hear doing understand market guys into as move soon I possible. new some the you effort

Jason Few

our for on process. making commercialization to has from, help to our really the and Colin, a the of Tony, in bit traditionally bringing that what process, morning Maybe we're some of accelerate DOE and like outside focused continue in to the -- in Officer doing ask investments but that thank our to Chief what commercialization I'll been that solid up investing benefit joining then we're start we talent part we're platform to the of doing, thanks more oxide there a But speed of lot I'll you. the Technology call. we're in addition is Good here. chime

thing the doing testing. prototyping other done The more around moving well. And that the that we've talk we're is already we're of rapid around work oxide some work and and doing electrolysis that Tony solid as reversible about can towards

Anthony Leo

Colin, this Tony. is Yeah,

it now for technologies from and we'll we're to example, oxide It's for call basically internal demonstration to few performance funding, in is, a DOE integrated months [Indiscernible] the funds and the carbon So completely our to then case system what demonstrating add equipment, plan we funding, -- as same it mentioned convert labs, And it market. to and of back the hydrogen, and take hitting it Jason Jason power of the its what and capture, application. and send the that hydrogen Exxon to We'll utilizing prototyping, it's all solid bring store we're water. another Danbury these system we'll electrolysis reversible. indicated, hydrogen right some a objectives our in storage, in we a run R&D operating the tank producing is add new

basically demonstrations, So these demonstrations. trigger larger initial

mix You may we're at a with recall building we So internal we're down as have funding for to moving own National the And production commercial that's -- XXX-kilowatt that to demonstration as Idaho our funding, of right now. external funding. prototype demonstration Labs path well

Colin Rusch

changing sense Great. your That's getting restructured with sheet, on super a then the conversations helpful. of that's to of congratulations done. Want how just better customers. balance with And get all that

was conversations but have you being along been after Jeff getting to that in with equity changing think move bit your a IPO being little talking folks able the things view this EBITDA a that with how towards customers about of terms positive, out towards to relative position debt of about is level s? and full in earlier, dynamic, I

Michael Bishop

Yes, conversations. big a help the in it customer Colin, a great is obviously question. Yeah,

of You FuelCell is things uniqueness of true about the know, the providers amongst and the FuelCell business the technologies. stationary one that the certainly various

position in balance much relationship core is customer, being typically XX as because a on the we of over that terms with decision, about position the that decision -- our sheet technology is and selecting establish that of that our think is nature years long-term customer customers of in each to the so relationship stronger makes. helpful they on the And purchase definitely

it's being certainly in to continue demonstrate important viability, aiding being the demonstrate service is in to ability and and So the financial and our model, to for conversations. stability, invest strong innovation support in to customers obviously able just able and

Colin Rusch

Okay. so Thanks guys. much,

Michael Bishop

Thank you.

Operator

Your next [Indiscernible]

Tom Gelston

Jefferies. from Xander

Laurence Alexander

that's of Are us you potential there. backlog? give discussions you're range yet a I size not for Hi your for activity projects of or of guess, are the just I the projects give broader first pipeline the changing? of changing? times the you. can sense lead of Thank sense Can you that scope mean all, having? in

Jason Few

Yes.

question. thank So Laurence, the call, you thanks the again for for joining and

span conversations at application range opportunities opportunities, look different we for project really the we're having or As they Company. of the a

conversations adding given of happening about we and as product, today. And our the opportunities the disruptions of tend of across of gives biofuels, biofuels up be actually common then, largely those fact And State transported cells quality, can that the an our in pipeline been talked really conversations facilities, perspective, and we we particularly, hydrogen Those grid a on-site the focused have as State to with in on the opportunities, focus all are around in microgrid beverage opportunities, resiliency RFP on responses international without generally our the data pursuing beverage pursue right platform, delivering an the same lot or pursue the you type it's capabilities Connecticut, and having those locations. fuel just rather of to and terms number rather the an are carbon right? product us from showing energy utilization, implemented and That advantage carbon so integration talked forward, big to what's utility of having of importance types applications of that be and biofuels are around hydrogen there replacing around have those carrier around capabilities we evaluated selections legislation [Indiscernible] needing those continue is power, and today. set leverage around to they're be than food projects and in about kinds providing conversations thermal unique multi-feature of reliability, types And things their continue the conversations those opportunities. example, like or We being of a than more able chilling, pursue power lot engaged [Indiscernible] Providing today, capture. there, but and state, of find leveraging around then we do those the for processing, conversations with site. absorption know, be capacity opportunities around can manufacturing ingredient which applications, interested those conversations XXXX-time recently across we And in healthcare. for to platforms see continue And boiler in We're from are in for as to and well our RFP happening of conversations. pipeline, them for more XX unique and a in ranging and generally projects a so plans those into the a in that bio-fuel we continue focuses in is was actively customers education that projects to we're that And uniqueness to food are of and cells center we for continue to those making Connecticut example. may not frame the use carbon multiple around in until that you utility megawatts fuel get making landscape, technology but and/or actually passed long-range of for those to of as be how what in driven. in

Laurence Alexander

the a but you -- years announced, and were a applications, Europe on Asia larger I'm ago? couple be of to curious your largest lot activity I the side, thinking already considering the size, is has microgrid -- the if of the so And you size Project appreciate compared has I'm just what about of those think when [Indiscernible]

Jason Few

Yes.

our And platform. FuelCell installed the U.S.. holds a we we in also very in the that platform today, have scalable is I still And the true So believe largest have platform world. the FuelCell platform largest there's

in our opportunities for there if XX.X-megawatt electrolysis to are talked solid more being in to referring regard. awards you're and plan on We of capacity we all as in are working around for are [Indiscernible] the an example, way about those oxide we able projects, [Indiscernible] architecting around Derby, the deliver type platform project is are that and building obviously and that Our commercialization gigawatt-scale out

Laurence Alexander

And then two quick Great. last ones.

And that and you're to the megawatts XXXX to starts the then Just will you did require would extra megawatts, if volume? scale what capacity oxide up when be if the the on from flex solid XXX your production incremental margins building, ramp, the that investments? you the additional out

Jason Few

there and your but didn't apologize, only you to part repeat going catch mind some because on don't I ask phone was if to static I your the question I'm you the first of question.

Laurence Alexander

Sure.

any investment scale demonstration one there to needed through is phases? On the solid up get the additional oxide,

Jason Few

We're stacked need carbonate We're build because our of solid adding tall The different capacity going terms right? example, oxide, in there technology. different. technology. totally a cell will is stack was out required, for I fuel and in ten fuel our is about to our Yes, mean, manufacturing that oxide module XXX carbonate so solid our investment be feet technology, our it platform stack from -- for cell architecture inches. is cells

other investment manufacturing certainly we required and cell casting incremental said, process manufacturing. there scale do to different. to across our is is processes things That technologies, be will with being leverage and oxide points like able for that. tape across different completely So both and architecture But are capacity certain manufacturing that the are leverageable solid

Michael Bishop

the to profitability cells, leverage we're the in through would was around year has continue come On fuel That we as the cost which and X.X because Turning those expect our as to factory compared down manufacturing continue profitability second factory was to call. regarding have higher have rates range million to the prior X.X still these million. run will -- that variances the around current and coming and at lead which ramps. carbonated ramp, decline, quarter we to the we the we as your standard, below manufacturing current question here, variances

Laurence Alexander

Thank you.

Michael Bishop

you. Thank

Operator

question next of line Your the Praneeth Satish with from comes Fargo. Wells

Praneeth Satish

extension. guess ask happens project there project. if Are alternatives to Good could Thanks. the wanted the that or morning. the workarounds keep going? what submarine-based any I about Groton pursue I Navy declines the to you

Jason Few

that repairs you as good and commissioning. to platform. making morning. the the we're joining up condition And we support have we for again, high the as they identified your project thank call indicated, And project question, and to was the in We a heat this point. Praneeth,

[Indiscernible] And have, us, through threefold we later Seamak, kind commissioning contractual we work Groton a would here hope to and forward. Navy, to month be then the arrangement we project about we arrangements talked so the move in which as continue between and in to back September, fully contractual of this the is Utilities

Praneeth Satish

positive can dynamics it. sense a impact year-over-year And you expected And exchanges then, so, any balance year? give are are just that the exchanges that's module year? the the Should Got and of that us there this we occur specific the driving over continued from of this? expect if uptake to

Michael Bishop

deferred this module and perspective, the essentially for, is that to and accounting are recognition are accounted these I'll From module. morning, is under the every the answer portion long-term recognition related or life exchanges the years which -- our on an way for X take revenue agreements, under X revenue typically long-term module the service to Mike. service Good the depending of happen question. agreements exchanges,

not this quarter, that quarters results little are higher really our revenue, -- service look guidance had for the in service, have put So the our variable there's cycle the on level. be when life very modules exchanges, for at specific around some to reported and due we expect is as And a you it it's of would when out it in replacement, variable, unlike dependent but the we've when module past. have we and field plant

Praneeth Satish

it. Got

you. Thank Okay.

Michael Bishop

Yeah.

Operator

Our Brothers. Touhy comes of with line next from the Noel Parks question

Noel Parks

morning. Good

Jason Few

Good morning, Noel.

Noel Parks

the just the financing? curious talk things. there Just about on restrictions about had in could those or and of those you any lead wondered I'm application negotiation San a project time process prepayment if mechanics arrangements? and the involved process, bit what -- tax whether equity was talk the about Bernardino. with with couple I a financings, you Groton of and Can the

Michael Bishop

a customer to These assets go you where asset. thank Sure. give And a what of Good generation guess, we joining the a municipalities. project Bernardino project customer, and instance, we are the or Company we're to we overview are of either typically like selling for out Noel. I bit call. little when those do San an meter morning, the creates where competitively that larger with directly bid power a the utility for assets for purchase power generation behind agreement, and our

we've finance the competitive and and to of first will And that's evaluate those of as step. flows. financing sell go out our solicit recurring sheets the build then kind so the Company's for project Company project chunk bids that So on assets cash the about And preference balance operations portfolio, talked bids. the the either benefit or is through a to can we current from our

offered for build-out projects, with went So the process two that through we and financing parties. these by during comfortable assets we're were the terms that two these of these counter

transaction Company of to As potentially The Jason Bank lends transaction Eastwest tax type that are is transaction look with our equity future. and our those will Eastwest well bringing at this Krestmark, in transaction first our mentioned, first things Bank. with That second leverage flipped was that's the transaction a itself as in also transaction. the partnership doing debt back

we're in good portfolio to discussions financing further that projects there interest remain the been I'd and construction. under having has for So a in our development assets our that and looking And forward on basis. repeatable say doing

Noel Parks

would long-horizon hydrogen to on ask how larger of I you in projects. even Great, about thanks proceeding, to for the generation terms great. your component clarification. [Indiscernible] talk that Could just And bit are about a talk be relative those your hydrogen wanted distributed [Indiscernible] about the could something front, You

Jason Few

an in group of organization is given this our way, it of we the innovation That product, Noel, and on or will, product our Company, we the part achieve that product, commercialization, how engineering the services our now fit sale. operational way to drive team maintain on that into then the on then about you we in organization could and basis have organization to that And offer and organization. organization. them our our than engineering that development shelf, the technology you falls market innovation for commercial inside if an customer ongoing product that to like for validation service is advanced available that business we call really product between into product. we which terms development product there. our an sales turned need that customers When of have we do think we When is

as if then customers you of able hand and then work commercial our will, the be the off, we customers we products. with Did those So to organization develop to them answer question? sale to on directly offer products, that your products to

Noel Parks

I It's a issues was guess infrastructure bit thinking divorce going hard forward. the to -- helpful. from little hydrogen It's I larger more about

are might about your be organization? in, decisions how that around I I in transportation evaluated of thinking and possibility say, your infrastructure was So guess investment piece

Jason Few

Yes.

our mean, talked Where from through look I in -- multiple our do sales we should capabilities customers, and we do with direct we engagement we lot we And at of market a our a what platforms have efforts where about, development research. we features. prioritize focus resources should as and prioritize So of terms standpoint?

so we where marketplace, we you and even we in we how given if which prioritize have flex And we first, will, we how features differentiate. see to on market unfolding think the the win opportunity an

being hydrogen And economy, domestically just happening the and hydrogen so across broadly. certainly Asia, evolving in thinking Like excited what about dollars committed governments the been about we've in Europe, what's and by more here weighted the of interest U.S. we're you, amount

hydrogen. capabilities can about the So three excites is we platform have that fact our around us thing technologies the deliver our we different platforms, that how

hydrogen provide us using can Toyota, a what And and of clean example with platform, look an and from you if single to TriGen that So delivering at negative in gas, that's platform for around doing to power, by do hydrogen future, hydrogen. we do forward we're have we're and allows to that the the advanced water, our we renewable carbon natural and/or capture, things carbon. [Indiscernible] blue we carbon to deliver power so as neutral green ability platform. example,

that commercialize that current can platform the applications. carbonate largely Secondly, doing hydrogen-generation about truck. our be nature of number hydrogen fundamental as and power, we'd generating of we're of create operating leveraging the working We're one really today, we to our or today site in off challenges we'd case, making that platform around power. we're way any this to into reaction, turn clean hydrogen, product and chemical hydrogen, and a transported molten hydrogen And technology. to our anyway. make our which of you which hydrogen reverse way, be handing REP. we We is the platforms, we're because, do. In mode. That's because the And and that can and we That's is electrical technology co-locate think the distributed co-production because not by of gets of in that core instance, we what

instance, an a working could hydrogen way incremental that as energy of, talked So we hydrogen we've about, highly using do we have the even our solid products, can capabilities example, In can a but XXX% be exactly then stored, hydrogen of energy work as by And electricity for take and use is i.e. our create electrification do or conversion and wind or as as And can the where solid again, we're solar, electrolysis only industry like that that deliver needed. to we do renewable nuclear the be well-suited advantage to hydrogen. steel, grid-related into use ability can we that's high to hydrogen. manufacture to with to needs or and oxide a platform have And its heat, off, do the efficient heat waste of that's oxide we electrolysis, efficiency to [Indiscernible] That energy, can be decarbonize commercialize actually platform. that doing handed efficient to a and that an with that. we in way itself.

salt will, like, to certainly as and intermittent hydrogen a stored can commercialization. Our serve firm the that play intermittent capacity, because technology as or we can traditional can Or caverns, you in get role technologies means, hydrogen in you that wind if pipelines, for and be natural And way the for virtually store store today, example, pressurized gas you tanks, we in capacity. solar. have that endless in in or

becomes say, energy if to source, of creates ability hours, opposed the days, store to case you weeks, to source, that batteries. the enough in you energy as four for want an "Look, as " case like hydrogen in for build So the this and platform hydrogen a as months so for want that we example, us

No do We about platforms, to around cost availability? and play that. what's fuel ability electricity, three No fuel. water. which water the into come address ability to the needs, availability? what's have market of think You What's the those our

optionality get platforms. So in hydrogen of we we to market commercialization of across lot the terms have we a approach how full as all three

Noel Parks

much. thanks Great, so

Jason Few

Thank you.

Unidentified Analyst

thank I and Thank question, taking my you. for you morning. good

Jason Few

morning. Good

Unidentified Analyst

megawatts. You about XX mentioned Connecticut

like put have So maybe help two you context, orders in or should over understand, versus seen starting we there, can over years? the projects from think near-term we Connecticut last us what about how

Jason Few

for so power utilities a FuelCell law divvied specific signed Yes, the that day. pro-rata in of generation that order the to up Governor state. XX into And the purchase requires megawatts on utilities in two basis that's our here between this

a utility process, RFP those that will which extra for they other. that that, made a consideration platform for megawatts that terms That responses is FuelCell which gets the will selected decision So to opportunities bill timeline one participate really that us those by open utility the and we're driven X.X win. process process about receive [Indiscernible] will excited on for we to be supposed be run. in megawatts There's ultimate to process of elect XX very choose. that and RFPs for state, by And like creates and in in for roughly, are the that winners RFP which in for in the

we we've we're to going bid, those we Now, to Connecticut got win, on opportunities. on work and to that to certainly doing got compete, and go got in

Unidentified Analyst

of the end thinking year? we of should that by the And timeline, be in terms

Jason Few

a is final could think making that. you or utilities you'll of the really think when decisions I activity, 'XX about more around timeline the No, [Indiscernible] this out, laid that's decisions

Unidentified Analyst

Got markets. Maybe switching it. international to

going We timeline over progressing? back latest update we have there? How back obviously going the there? in of to Korea, should Europe. you as process How thoughts in are over thinking be in Can about conversations been us

Jason Few

with countries hydrogen capture and energy aggressive to that's market a how us. technologies, looking our exciting their with Yeah. around the interest as that start just infrastructure, there Not way first transition them Maybe opportunities then but obviously traditional well. I'll Pan-European for significant to around very exist are That's carbon only as a the Europe. at

countries various opportunities given XX our are platforms, XX opportunities We sales through months to in talked have bid they that we of typically And -- are when as we generally, size about, we again, in we also pipeline across number on, opportunities of a often our work even pursuing or behind typically we're that the as are we're Europe. expect grid-connected, meter, those the cycles. in cases that

will market I And added resources, said anticipate so that we to And we pipeline when we've add resources state continued given development our amount the re-entered actively XXXX customers move of and will the we them start that's as into will if see really engaging that the earlier, we've in from market. we been we With been into committed signed to backlog. time Korea, and think now, timeline, to as contracts. a have frame that that firmly of business opportunities in those time won Korea the move projects same respect the with market you about July again, have and in and we Company as

into so, we as timing Korea And about convert what's more to happening again, be but and very the well. opportunities would energy pipeline not think around the those Asia, opportunities. again, transition committed about contracts only view signed around hydrogen broadly, as ability in same same But excited also around

Unidentified Analyst

one thing. can squeeze if Maybe I last

competitive think Korea increasing in about you today. So if dynamics are

are guys of and are may your quality, that in? terms competitors frame markets in that peers? versus terms we applications be the applications, in about help other going your Germany. of you in your you announced competitors different you May think of targeting operations just center, data are different are be us Can that end applications, One manufacturing same these there if

Jason Few

Yes.

make. So we think important word against platform, competition. is about that competition platform how of capabilities some the like the areas terms than think our we in clear about Korea, customer for the think there's advantaged. to leverage and FuelCell we generation product I could about we decisions are other market that of If And providers broadly being where a the just think as a and more our we because about different multi-feature us, that differentiate

narrow we our that For example, deliver of market. in differentiate deliver discussion If the to an we attribute opportunities versus steam is in steam ability Korea the FuelCell ability competitors. to providers, in important to clearly stationary ourselves our just

As the right? advantage transition less hydrogen you portfolio, is able a example. to are the given of might In for ability market to energy the prices and to fuel an in sale be to an and be deliver we capture because Tri-Gen gives of prices from pricing look generation revenues energy breadth customer from have more the you as our [Indiscernible] the our need a just generation we fit looking can you around hydrogen. platform drive the can the energy And three terms achieve Conversely, where you of A drive for an a if think at us and like more we low, revenue example us different the being standpoint platforms, may best low, that, type opportunities, drive that we revenues took hydrogen from as can fact if factor, prices hydrogen. and platform are electricity.

ability capture REP blue the great our compete hydrogen. to working of a and like for we're us our is to differently deliver quite opportunity than alongside product, then our that competitive carbon to that, maybe to do commercialize, platform like Something set,

that the think in advantageous For the is of and the going then, of we terms -- electricity is an our converted us. that and gas, puts we of us We electricity trip conversion hydrogen differentiate to platform both power. position. exact efficiency we be utilize into think on natural stack the that water efficiency [Indiscernible] us the that to for play would the would also in in But to round will example, And then, market, advantage reversibility platform our same electrolysis, produce it column hydrogen. think

capability standpoint terms from well-positioned And And Germany. also a or there. presence our manufacturing so, manufacturing have in from standpoint we capabilities, think we're the we of in a

good to positioned we address about So how markets. feel global we're

Unidentified Analyst

for you Thank my very questions. That's helpful. taking

Operator

come Our Craig-Hallum. of Stine with Eric line from next questions the

Eric Stine

morning, Good everyone.

Jason Few

morning. good Hey,

Eric Stine

just I'll end. the a at morning, sneak in few Good

technology -- year, Just the I to payment probably I think a side. milestone and ExxonMobil. know get you've one work underway with and curious on advanced the you averaged that's development the tied

process maybe Just maybe And what the that that terms there. in represents you're working curious, milestone, that in you provide of means what that is can then terms anything or next what through timing? of

Michael Bishop

Good morning, Eric. is This Mike.

are the we the of achieves the to not the contract, be achieve get paid, -- milestones that put revenue, expect the a guidance timing $X we technical when technical any Once achieves have on So there will will Company million ExxonMobil of contract two and out milestone we those that around each. in certain milestones.

Eric Stine

And just you that talk on XX a something it. and the maybe are you When then targets. to about that's about for the free Got year? levels fiscal those positive of rate, Okay. are flow, run confirm positive you etc., or year-end the entirety talking anticipate EBITDA cash meeting

Michael Bishop

Yes.

and which across end in based So the and the year-end of business. continuing does there expects assets execution activity rate 'XX business plan, by include continued run of project on to get advanced out technologies the building

Eric Stine

Thank Okay. you.

Michael Bishop

right. sir. Thanks, All

Jason Few

you, Thank Eric.

Operator

That concludes remarks. over today's to turn Q&A closing call now I Few portion Jason of will today's for call. the back

Jason Few

today. again We'll our to our The you. joining Energy team us life our is powerhouse committed great thank joining. on deliver you a to profitable enable And healthy and deliver to growth to energy. to world strategy, shareholder about stay business I continue excited we're by live returns. FuelCell a thank execute all and on delivering everyone for Carol, And value. have working work optimizing and Power purpose the for and Thank to day. hope safe clean long-term And you

Operator

participating. Thank conference for concludes today's call. This you

disconnect. now may You

FuelCell Energy (FCEL) 14 Sep 212021 Q3 Earnings call transcript