Core Viewpoint - The Schall Law Firm is inviting investors who have incurred losses to participate in an inquiry regarding Fluence Energy Inc. for potential securities fraud [1] Group 1 - The inquiry is focused on Fluence Energy Inc., suggesting that there may be significant concerns regarding the company's financial practices [1] - Investors are encouraged to join the inquiry, indicating a collective effort to address potential grievances related to securities fraud [1] - The announcement highlights the legal actions that may arise from the alleged misconduct, which could impact investor confidence in Fluence Energy Inc. [1]

Core Insights - DTEK, Ukraine's largest private energy company, has partnered with Fluence Energy to develop Ukraine's first large-scale battery-based energy storage portfolio, enhancing energy independence and stabilizing power supply [1][4][9] - The project aims to be completed by October 2025, ensuring readiness before the winter season to strengthen the Ukrainian power grid against outages [2][9] - The total investment for the project is €140 million, with a total capacity of 200 MW across six energy storage plants, capable of storing up to 400 MWh of electricity [3][9] Company Overview - DTEK is the largest private investor in Ukraine's energy sector, employing 55,000 people and involved in various energy-related activities, including coal and natural gas mining, electricity production, and energy-efficient services [10][11] - DTEK's strategy includes transforming into a more energy-efficient and environmentally friendly business, guided by ESG principles, with a goal of achieving carbon neutrality [11][12] Project Details - The energy storage plants will be located at multiple sites across Ukraine, with capacities ranging from 20 MW to 50 MW, providing enough energy to supply power for 600,000 homes for two hours [3][9] - The battery systems will offer frequency and power balancing services to stabilize the power grid, responding within milliseconds, which is faster than conventional power plants [4][5] Technological Impact - The project will position Ukraine among global leaders in energy storage technology, with advanced grid-forming capabilities that enhance stability and enable faster restoration of power after outages [5][6] - Fluence has a proven track record, having delivered over 35 GWh of energy storage solutions and extensive experience in integrating these assets into national energy infrastructures [6][9]

SAN DIEGO, Dec. 18, 2024 /PRNewswire/ -- Shareholder rights law firm Robbins LLP is investigating Fluence Energy, Inc. (NASDAQ: FLNC) to determine whether certain Fluence officers and directors violated securities laws and breached fiduciary duties to shareholders. Fluence Energy, Inc. provides energy storage products and services, and artificial intelligence enabled digital applications for renewables and storage applications worldwide. What Now: If you own shares of Fluence Energy, Inc. and have lost mone ...

ARLINGTON, Va., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. (Nasdaq: FLNC) (“Fluence” or the “Company”), a global market leader delivering intelligent energy storage, operational services, and asset optimization software, today announced the completion of the previously announced offering of $400.0 million aggregate principal amount of 2.25% convertible senior notes due 2030 (the “Notes”). Fluence also granted the initial purchasers of the Notes an option to purchase, for settlement within a peri ...

Deflagration testing conducted by Fluence and DNV, along with large-scale fire testing by Fluence and CSA Group, confirms Gridstack Pro 2000, featuring Fluence’s U.S.-manufactured battery modules, as the first domestic content solution to exceed the industry’s top safety standards   ARLINGTON, Va., Dec. 12, 2024 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. (“Fluence”) (NASDAQ: FLNC), a global market leader delivering intelligent energy storage, operational services, and asset optimization software, today announ ...

Part I [Business Overview](index=6&type=section&id=Item%201.%20Business) Fluence Energy leads the global energy storage market with modular solutions, services, and digital platforms, leveraging a capital-light model and focusing on U.S. domestic supply chain development - **5.0 GW** deployed, **7.5 GW** contracted backlog, **115.9 GW** global pipeline as of September 30, 2024[17](index=17&type=chunk) - Growth is driven by declining lithium-ion battery costs and favorable government policies, including the U.S. Inflation Reduction Act (IRA)[19](index=19&type=chunk)[20](index=20&type=chunk) - Offerings include Energy Storage Solutions (Gridstack, Sunstack), Services (O&M), and Digital Applications (Fluence Mosaic, Nispera)[22](index=22&type=chunk)[25](index=25&type=chunk) - A concentrated customer base saw the two largest customers account for approximately **50%** of FY2024 revenues, with related party AES and affiliates contributing approximately **41%**[35](index=35&type=chunk) - The company employs a capital-light manufacturing strategy, utilizing third-party regional manufacturers, including a key facility in Utah, for system assembly[42](index=42&type=chunk) - Significant intellectual property includes over **179** granted patents and over **108** registered trademarks worldwide as of September 2024[50](index=50&type=chunk) [Government Regulation and Compliance](index=14&type=section&id=Government%20Regulation%20and%20Compliance) Global government policies, including the U.S. IRA and EU's 'Fit for 55' package, significantly influence the business, alongside evolving trade policies like future U.S. tariffs on Chinese batteries - The U.S. Inflation Reduction Act (IRA) provides a key Investment Tax Credit (ITC) for standalone energy storage, with bonus credits for domestic content or energy community projects[56](index=56&type=chunk)[60](index=60&type=chunk) - U.S. Section 301 tariffs on Chinese lithium-ion non-EV batteries are set to increase from **7.5%** to **25%** on January 1, 2026[61](index=61&type=chunk)[62](index=62&type=chunk) - European initiatives like the 'Fit for 55' package, REPowerEU Plan, and Net Zero Industrial Act (NZIA) foster a supportive regulatory environment for clean energy and manufacturing[57](index=57&type=chunk) - U.S. FERC orders (841, 2222, 2023) aim to remove barriers and accelerate energy storage project grid connections[68](index=68&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) Fluence faces risks from limited operating history, profitability challenges, order fluctuations, supply chain issues, customer concentration, intense competition, regulatory changes, and an ongoing SEC investigation - The company has a limited operating history and historically incurred net losses, though it achieved profitability in FY2024[79](index=79&type=chunk)[83](index=83&type=chunk) - Fluence is dependent on a small customer base, with AES and its affiliates representing approximately **41%** of FY2024 annual revenue[107](index=107&type=chunk) - The business faces supply chain risks from reliance on limited third-party manufacturers and suppliers, alongside evolving global trade policies like the planned 2026 tariff increase on Chinese batteries[90](index=90&type=chunk)[102](index=102&type=chunk)[183](index=183&type=chunk) - Demand is highly dependent on government incentives such as the IRA; any reduction, elimination, or uncertainty could adversely affect the business[180](index=180&type=chunk)[182](index=182&type=chunk) - As a "controlled company" due to Continuing Equity Owners' voting power, Fluence is exempt from certain NASDAQ corporate governance requirements, including a majority-independent board[198](index=198&type=chunk) - The Tax Receivable Agreement mandates substantial cash payments to Founders, reducing cash available for other corporate purposes[215](index=215&type=chunk)[217](index=217&type=chunk) - The company is cooperating with a formal SEC investigation reviewing revenue recognition, internal controls, software cost capitalization, and related-party service contracts, initiated after a short-seller report[205](index=205&type=chunk) [Cybersecurity](index=59&type=section&id=Item%201C.%20Cybersecurity) Fluence manages cybersecurity risks via a NIST-guided ISMS, overseen by the Board's Audit Committee and a CISO, with no material incidents reported to date - The cybersecurity risk management program is based on the National Institute of Standards and Technology (NIST) Cyber Security Framework (CSF)[233](index=233&type=chunk) - A Cybersecurity Steering Committee, chaired by the CISO, governs the program, with primary oversight and quarterly updates provided to the Board's Audit Committee[234](index=234&type=chunk)[236](index=236&type=chunk) - The CISO, with over **30** years of IT experience, reports to the CIO, and management stays informed on cyber threats through internal and external intelligence[236](index=236&type=chunk) [Properties](index=60&type=section&id=Item%202.%20Properties) Fluence's corporate headquarters is a leased 17,000-square-foot office in Arlington, Virginia, supplemented by global offices and specialized facilities - Corporate headquarters is a leased office of approximately **17,000** square feet in Arlington, Virginia[237](index=237&type=chunk) - The company leases numerous global offices and operates an energy storage testing facility in Erlangen, Germany[237](index=237&type=chunk) [Legal Proceedings](index=60&type=section&id=Item%203.%20Legal%20Proceedings) Fluence is involved in periodic legal proceedings but currently believes none will have a material adverse effect on its business or financial condition - The company is not currently facing any legal proceedings believed to have a material adverse effect on its business, financial condition, or cash flows[241](index=241&type=chunk) - Refer to Note 14 of the consolidated financial statements for a description of material pending legal contingencies[241](index=241&type=chunk) Part II [Management's Discussion and Analysis (MD&A)](index=63&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This MD&A provides management's perspective on financial results, condition, and outlook, detailing revenue drivers, operating metrics, liquidity, capital resources, and critical accounting policies [Results of Operations](index=70&type=section&id=Results%20of%20Operations) Fluence achieved a net income of $30.4 million in FY2024, a significant turnaround, with total revenue growing 21.7% to $2.7 billion and gross profit margin improving to 12.6% | Metric | FY 2024 | FY 2023 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $2,698.6M | $2,218.0M | +$480.6M | +21.7% | | Gross Profit | $341.1M | $141.0M | +$200.1M | +142.0% | | Gross Margin | 12.6% | 6.4% | +6.2 p.p. | - | | Net Income (Loss) | $30.4M | ($104.8M) | +$135.2M | +129.0% | - The **$480.6 million** revenue increase was primarily driven by higher Gridstack cube volumes and growth in services revenue from operational projects[297](index=297&type=chunk) - Gross profit increased by **$200.1 million**, with margin expansion due to operational efficiencies and improved profitability on newer Gridstack projects[299](index=299&type=chunk) - Operating expenses increased, with Sales & Marketing up **55.3%** and General & Administrative up **26.9%**, primarily due to increased headcount supporting business growth[302](index=302&type=chunk)[303](index=303&type=chunk) [Key Operating Metrics](index=67&type=section&id=Key%20Operating%20Metrics) As of September 30, 2024, Fluence reported significant year-over-year growth in deployed energy storage (5.0 GW), contracted backlog (7.5 GW), and pipeline (25.8 GW), alongside strong services and digital contract growth Energy Storage Metrics | Metric (Energy Storage) | 2024 | 2023 | Change % | | :--- | :--- | :--- | :--- | | Deployed (GW) | 5.0 | 3.0 | +66.7% | | Contracted Backlog (GW) | 7.5 | 4.6 | +63.0% | | Pipeline (GW) | 25.8 | 12.2 | +111.5% | Services & Digital Metrics | Metric (Services & Digital) | 2024 (GW) | 2023 (GW) | Change % | | :--- | :--- | :--- | :--- | | Service Assets Under Mgmt | 4.3 | 2.8 | +53.6% | | Digital Assets Under Mgmt | 18.3 | 15.5 | +18.1% | | Service Contracted Backlog | 4.1 | 2.9 | +41.4% | | Digital Contracted Backlog | 10.6 | 6.8 | +55.9% | FY 2024 Order Intake | Category | FY 2024 Order Intake (GW) | | :--- | :--- | | Energy Storage Products | 5.2 | | Service Contracts | 3.0 | | Digital Contracts | 8.6 | [Liquidity and Capital Resources](index=71&type=section&id=Liquidity%20and%20Capital%20Resources) Fluence's liquidity sources include cash from operations, debt facilities, and IPO proceeds, with a $500 million revolving credit facility and significant Tax Receivable Agreement obligations - Net cash provided by operating activities was **$79.7 million** in FY2024, a **$191.6 million** positive swing from a use of **$111.9 million** in FY2023, driven by higher net income and improved working capital management[328](index=328&type=chunk) - In August 2024, the ABL facility was converted into a **$500 million** senior secured cash flow revolver (the "2024 Revolver"), maturing November 2027, with no cash drawn but **$74.9 million** in letters of credit outstanding as of September 30, 2024[317](index=317&type=chunk) - A supply chain financing program allows early supplier payments, with **$81.3 million** outstanding as of September 30, 2024, supported by **$100 million** in guarantees from AES and Siemens[313](index=313&type=chunk)[536](index=536&type=chunk) - The Tax Receivable Agreement (TRA) obligates Fluence to pay Founders **85%** of certain tax benefits, resulting in a future payable of **$107.4 million** from past redemptions and a **$1.5 million** TRA expense for FY2024[215](index=215&type=chunk)[321](index=321&type=chunk) [Critical Accounting Policies and Estimates](index=77&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Revenue recognition for energy storage products, using the percentage-of-completion method, is the most critical accounting policy, requiring significant judgment in cost inclusion and variable consideration estimation - Revenue from energy storage solutions is recognized over time using the percentage-of-completion (POC) method, based on costs incurred relative to total estimated costs[333](index=333&type=chunk) - A critical judgment involves determining when standard inventory materials, especially assembled "cubes," are integrated or restricted to a customer's project for inclusion in the POC calculation[333](index=333&type=chunk)[416](index=416&type=chunk) - The company estimates variable consideration, such as liquidated damages (LDs), using an expected value method, requiring assumptions about project delays or performance shortfalls[335](index=335&type=chunk)[337](index=337&type=chunk) [Market Risk Disclosures](index=78&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Fluence is exposed to market risks including credit risk from customer concentration, foreign currency risk from global operations, commodity price risk from raw materials, and interest rate risk from floating-rate debt - **Credit Risk**: Significant exposure from customer concentration, with two customers accounting for approximately **50%** of FY2024 revenue, mitigated by credit policies, milestone payments, and letters of credit[339](index=339&type=chunk) - **Foreign Currency Risk**: Exposure from subsidiaries operating in Euro, British pound, and Australian dollar, partially hedged using foreign currency forward contracts, especially for intercompany inventory sales[341](index=341&type=chunk) - **Commodity Price Risk**: Subject to fluctuating raw material prices (steel, aluminum, lithium) affecting component costs, with no direct hedging arrangements for these materials[342](index=342&type=chunk) - **Interest Rate Risk**: Exposure from floating-rate borrowings under the 2024 Revolver, with low risk as of September 30, 2024, due to no outstanding cash borrowings[343](index=343&type=chunk) [Financial Statements and Supplementary Data](index=80&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2022-2024, including balance sheets, income statements, cash flows, and notes, along with Ernst & Young LLP's audit report [Report of Independent Registered Public Accounting Firm](index=81&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on financial statements but an adverse opinion on internal controls over financial reporting due to a material weakness in revenue recognition - The auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements[352](index=352&type=chunk) - An adverse opinion was issued on the company's internal control over financial reporting as of September 30, 2024[353](index=353&type=chunk)[364](index=364&type=chunk) - The adverse opinion stemmed from a material weakness in revenue recognition controls, specifically inconsistent application in evaluating contract terms for cost inclusion in progress measurement[365](index=365&type=chunk) - The Critical Audit Matter involved the high judgment required to determine when "cubes" (assembled battery systems) costs are restricted to a customer project and included in percentage-of-completion revenue calculation[357](index=357&type=chunk)[358](index=358&type=chunk) [Consolidated Financial Statements](index=84&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of $1.90 billion, liabilities of $1.30 billion, and equity of $607.1 million, with FY2024 revenue of $2.70 billion and net income of $30.4 million Consolidated Balance Sheet (in thousands) | Metric | Amount (in thousands) | | :--- | :--- | | Total Assets | $1,902,188 | | Total Liabilities | $1,295,049 | | Total Stockholders' Equity | $607,139 | Consolidated Statement of Operations (in thousands) | Metric | Amount (in thousands) | | :--- | :--- | | Total Revenue | $2,698,562 | | Gross Profit | $341,080 | | Net Income | $30,367 | | Basic EPS | $0.18 | Consolidated Statement of Cash Flows (in thousands) | Metric | Amount (in thousands) | | :--- | :--- | | Net cash from operating activities | $79,685 | | Net cash used in investing activities | ($18,975) | | Net cash used in financing activities | ($8,676) | [Notes to Consolidated Financial Statements](index=94&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on revenue recognition, debt facilities, commitments, contingencies, related-party transactions, and stock-based compensation, supplementing the financial statements - As of September 30, 2024, the company had **$4.5 billion** in remaining performance obligations (backlog), with approximately **50%** expected to be recognized as revenue within the next 12 months (Note 3)[455](index=455&type=chunk) - The company has minimum purchase commitments of **$3.86 billion**, primarily for battery modules, extending through 2029 and beyond (Note 14)[490](index=490&type=chunk)[491](index=491&type=chunk) - Legal contingencies include an unresolved 2021 overheating event, 2023 project-related litigation, and an ongoing formal SEC investigation (Note 14)[502](index=502&type=chunk)[503](index=503&type=chunk)[504](index=504&type=chunk) - Revenue from related parties (primarily AES and Siemens affiliates) totaled **$1.1 billion** in fiscal year 2024 (Note 15)[509](index=509&type=chunk)[514](index=514&type=chunk) - Total stock-based compensation expense for fiscal year 2024 was **$23.9 million** (Note 17)[533](index=533&type=chunk) [Controls and Procedures](index=130&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of September 30, 2024, due to a material weakness in revenue recognition controls, with remediation efforts underway for fiscal year 2025 - Management concluded that disclosure controls and procedures were not effective as of September 30, 2024[563](index=563&type=chunk) - A material weakness was identified in internal control over revenue recognition due to inconsistent application of controls in evaluating contract terms for cost inclusion in progress measurement[569](index=569&type=chunk) - The company has enhanced controls and is working to remediate the material weakness, with expected completion in fiscal year 2025[569](index=569&type=chunk) Part III & IV [Corporate Governance and Compensation](index=132&type=section&id=Items%2010,%2011,%2012,%2013,%2014) Information for Items 10-14 (directors, compensation, governance, related parties, accountant fees) is incorporated by reference from the forthcoming 2025 Proxy Statement, and a Code of Conduct and Ethics has been adopted - Detailed information for Items 10-14 (Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Related Transactions, Principal Accountant Fees) is incorporated by reference from the forthcoming 2025 Proxy Statement[578](index=578&type=chunk)[580](index=580&type=chunk)[581](index=581&type=chunk)[582](index=582&type=chunk)[583](index=583&type=chunk) - The company has adopted a Code of Conduct and Ethics applicable to all directors, officers, and employees, available on its website[579](index=579&type=chunk) [Exhibits and Financial Statement Schedules](index=133&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including key corporate governance, financing, and material related-party agreements - This section lists all exhibits filed with the 10-K, including key corporate governance and financing documents[586](index=586&type=chunk)[587](index=587&type=chunk) - Key agreements listed include the 2024 Credit Agreement (as amended), the Tax Receivable Agreement, and various license and purchase agreements with founders AES and Siemens[587](index=587&type=chunk)[596](index=596&type=chunk)

Financial Performance - Fluence's Q4 2024 revenue reached $1228 million, an 82% increase year-over-year[28, 30] - The company's adjusted gross profit for Q4 2024 was $159 million, up by $81 million compared to the same quarter last year[28, 31] - Adjusted EBITDA for Q4 2024 stood at $87 million, a 335% increase from the previous year[28, 31] - For fiscal year 2024, Fluence generated approximately $2700 million in revenue, a 22% increase from the prior year[10, 34] - The adjusted gross profit margin for fiscal year 2024 was 129%, primarily due to select projects delivered under budget[32, 35] - Adjusted EBITDA for fiscal year 2024 was a positive $78 million, reflecting improved gross profit margin and better project execution[32, 36] Future Outlook - Fluence anticipates revenue between $3600 million and $4400 million for fiscal year 2025, with a midpoint of $4000 million[10, 44] - The company projects adjusted EBITDA between $160 million and $200 million for fiscal year 2025, with a midpoint of $180 million[10, 44] - Fluence expects annual recurring revenue (ARR) to reach approximately $145 million by the end of fiscal year 2025[10, 44] Order and Pipeline - Order intake during Q4 2024 was approximately $1200 million, including 46 GWh of solutions, 32 GWh of services, and 45 GW of digital[10] - The company's backlog as of September 30, 2024, was $4500 million, a 55% year-over-year increase[10, 12] - Fluence's global utility-scale pipeline reached approximately $21 billion as of September 30, 2024, a 60% year-over-year increase[10, 14, 17]

Financial Data and Key Metrics - The company reported a record revenue of approximately $2.7 billion for fiscal year 2024, with a 12.6% gross margin [12] - Adjusted EBITDA for FY24 was $78 million, which is $140 million higher than FY23 and $18 million better than the midpoint of expectations [12] - Free cash flow for the year was $72 million, compared to negative $115 million in FY23 [14] - Q4 2024 revenue was $1.2 billion, an 82% increase YoY and a 154% improvement from Q3 [31] - Adjusted gross profit for Q4 was $159 million, with a gross profit margin of approximately 13% [31] - Adjusted EBITDA for Q4 was a record $87 million [31] Business Line Data and Key Metrics - The company achieved an 80% increase in annual recurring revenue (ARR) to $100 million, driven by growth in digital and services businesses [13] - The backlog grew by 55% YoY to $4.5 billion, providing strong visibility for future revenue [14] - The pipeline increased by $500 million from the previous quarter to approximately $21 billion, with nearly half in the U.S. market [19][20] Market Data and Key Metrics - Global electricity demand is projected to rise 15% to 20% in the next decade, driven by economic development, data centers, and electrification [15] - Renewables are expected to account for about 50% of global electricity production by 2030 [16] - Lithium carbonate prices declined by almost 50% YoY, reducing the cost of battery storage systems by 40% [17] - The U.S. market represents nearly half of the company's $21 billion pipeline, with the rest in international markets such as Germany, Australia, Canada, and Chile [20][21] Company Strategy and Industry Competition - The company has established a U.S. supply chain, offering 100% non-Chinese products supported by six U.S. production facilities [22][23] - The company began producing U.S.-made battery modules in September 2024, with UL1973 certification for safety and quality [24] - The company upgraded its second battery cell production line to manufacture 530-amp hour cells, doubling U.S. cell manufacturing capacity [26][27] - The company believes higher tariffs on Chinese batteries will benefit U.S.-based storage providers, giving them a competitive edge [28][29] Management Commentary on Operating Environment and Future Outlook - The company expects strong growth in the energy storage market, with a 30%+ annual growth rate for FY26 and beyond [39] - The company initiated FY25 revenue guidance with a midpoint of $4 billion, representing 50% growth from FY24 [36] - Adjusted gross profit margin for FY25 is expected to be between 10% and 15%, with an adjusted EBITDA midpoint of $180 million [37] - The company expects FY25 revenue to be back-end loaded, with 20% in the first half and 80% in the second half [38] Other Important Information - The company ended FY24 with $963 million in total liquidity, including cash and availability in credit facilities [40] - The company anticipates needing approximately $300 million in additional working capital to support future growth in FY25 [41] - The company has no debt and has flexibility in funding options, including future free cash flow and borrowing capacity [42] Q&A Session Summary Question: Backlog and Revenue Guidance for FY25 - The company has two-thirds of its FY25 revenue guidance in backlog, with $1.5 billion in late-stage negotiations, providing confidence in meeting the midpoint [51][52] - The backlog consists of binding deals with real customer commitments, and the company has seen minimal cancellations [52][53] Question: Market Share and Competition - The company maintains its market share, with Tesla and Chinese competitors being key players [56] - Innovation and a resilient supply chain are critical to maintaining a competitive edge [57] Question: Revenue Guidance and Gross Margin - The company expects FY25 revenue to be back-end loaded, with 20% in the first half and 80% in the second half [38] - Gross margin guidance for FY25 is 10% to 15%, with execution and new product launches being key factors [136][137] Question: Tariffs and Risk Management - The company has arrangements to share tariff risks with suppliers and customers, with only 10% of the backlog subject to tariff exposure [103][104] - The company has accelerated the import of foreign cells to mitigate potential tariff impacts [106] Question: Customer Demand and Domestic Content - There is strong demand for domestic content offerings, with no significant changes in customer behavior post-election [93][94] - The company has secured contracts with cell manufacturers to share tariff cost increases, further mitigating risk [28][29] Question: Pricing and Competition - The company competes on total cost of ownership, with Chinese competitors having advantages in CapEx but not in other parts of the value chain [145][146] - The company offers EPC services when needed but does not plan to expand this role significantly [150]

Core Insights - Fluence Energy, Inc. (FLNC) reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.27 per share, and showing significant improvement from earnings of $0.02 per share a year ago, resulting in an earnings surprise of 25.93% [1] - The company posted revenues of $1.23 billion for the quarter ended September 2024, which fell short of the Zacks Consensus Estimate by 4.91%, compared to revenues of $672.98 million in the same quarter last year [2] - Fluence Energy shares have underperformed the market, losing about 3.5% since the beginning of the year, while the S&P 500 has gained 25.2% [3] Earnings Outlook - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at -$0.02 on revenues of $711.42 million, and $0.53 on revenues of $3.91 billion for the current fiscal year [7] - The Zacks Rank for Fluence Energy is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Alternative Energy - Other industry, to which Fluence Energy belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, suggesting that the industry's outlook may negatively impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue and Financial Performance - Record revenue for fiscal year 2024 of approximately $2.7 billion, a 22% increase from fiscal year 2023, and Q4 revenue of approximately $1.2 billion, an 82% increase from the same quarter last year[4] - Total revenue for fiscal year 2024 reached $2,698,562 thousand, a 21.7% increase from $2,217,978 thousand in 2023[35] - Revenue for the three months ended September 2024 was $1,228,148 thousand, an 82.5% increase from $672,982 thousand in the same period of 2023[38] - Total revenue for the three months ended September 2024 was $1.23 billion, an 82% increase compared to $673 million in the same period in 2023[66] - The company achieved its highest ever revenue and profitability in 2024, with a backlog of $4.5 billion, driven by strong demand for battery energy storage solutions, particularly in the U.S. market[12] Profitability and Margins - GAAP gross profit margin improved to approximately 12.6% for fiscal year 2024 and 12.8% for Q4, compared to 6.4% and 11.3% in the previous year and quarter, respectively[5] - Gross profit for fiscal year 2024 was $341,080 thousand, a 142% increase from $140,955 thousand in 2023[35] - Gross profit margin for the three months ended September 2024 was 12.8%, up from 11.3% in the same period in 2023[66] Net Income and Earnings - Net income of approximately $30.4 million for fiscal year 2024 and $67.7 million for Q4, compared to a net loss of $104.8 million and net income of $4.8 million in the previous year and quarter, respectively[6] - Net income attributable to Fluence Energy, Inc. for fiscal year 2024 was $22,716 thousand, a significant improvement from a loss of $69,620 thousand in 2023[35] - Net income attributable to Fluence Energy, Inc. for the three months ended September 2024 was $47,843 thousand, compared to $3,229 thousand in the same period of 2023[38] - Net income for the fiscal year ended September 30, 2024, was $30.367 million, a significant improvement from a loss of $104.818 million in 2023 and $289.177 million in 2022[43] - Net income for the three months ended September 2024 was $67.7 million, a 1,306% increase compared to $4.8 million in the same period in 2023[66] Adjusted EBITDA - Adjusted EBITDA of approximately $78.1 million for fiscal year 2024 and $86.9 million for Q4, compared to negative $61.4 million and $19.8 million in the previous year and quarter, respectively[7] - Adjusted EBITDA for the three months ended September 2024 was $86.9 million, a 338% increase compared to $19.8 million in the same period in 2023[66] Cash and Liquidity - Total cash of approximately $518.7 million as of September 30, 2024, an increase of $56.0 million from September 30, 2023[8] - Cash and cash equivalents increased to $448.7 million in September 2024 from $345.9 million in September 2023, reflecting a 29.7% growth[32] - Cash, cash equivalents, and restricted cash increased to $518.706 million at the end of 2024, up from $462.731 million in 2023[45] - Net cash provided by operating activities was $79.685 million in 2024, a significant improvement from a net cash used in operating activities of $111.927 million in 2023[43] - Free Cash Flow for the fiscal year ended September 2024 was $71.6 million, a 162% increase compared to $(114.9) million in the same period in 2023[68] Backlog and Order Intake - Quarterly order intake of approximately $1.2 billion, compared to $737 million for the same quarter last year, with backlog increasing to $4.5 billion as of September 30, 2024, from $2.9 billion a year ago[8] - Order intake for energy storage products in the fiscal year ended September 30, 2024, was 5.2 GW, a 136.4% increase from 2.2 GW in 2023[52] - Contracted backlog for energy storage products grew by 63.0% to 7.5 GW in 2024, compared to 4.6 GW in 2023[52] - Contracted backlog for digital contracts rose by 55.9% to 10.6 GW in 2024, up from 6.8 GW in 2023[52] - Order intake (Contracted) represents new energy storage, service, and digital contracts, providing visibility into future revenue and sales effectiveness[58] Pipeline and Future Growth - Pipeline for energy storage products expanded by 111.5% to 25.8 GW in 2024, up from 12.2 GW in 2023[52] - Pipeline for digital contracts surged by 164.3% to 64.5 GW in 2024, compared to 24.4 GW in 2023[52] - Pipeline represents uncontracted potential revenue with a reasonable likelihood of execution within 24 months, monitored for anticipated growth[59] - Pipeline may not generate margins equal to historical operating results, and there is no guarantee it will result in actual revenue as anticipated[60] Assets and Liabilities - Total current assets grew to $1.68 billion in September 2024 from $1.19 billion in September 2023, a 40.6% increase[32] - Total assets grew to $1.9 billion in September 2024 from $1.35 billion in September 2023, a 40.7% increase[32] - Total liabilities increased to $1.3 billion in September 2024 from $795.8 million in September 2023, a 62.7% rise[32] - Total stockholders' equity grew to $607.1 million in September 2024 from $556.3 million in September 2023, a 9.1% increase[33] - Accounts payable surged to $436.7 million in September 2024 from $65.4 million in September 2023, a 567.8% increase[32] - Inventory, net, decreased to $182.6 million in September 2024 from $224.9 million in September 2023, a 18.8% decline[32] - Deferred revenue remained relatively stable at $274.5 million in September 2024 compared to $273.2 million in September 2023[32] - Intangible assets, net, increased to $60.0 million in September 2024 from $55.8 million in September 2023, a 7.6% rise[32] Expenses and Investments - Research and development expenses for fiscal year 2024 were $66,195 thousand, slightly lower than $66,307 thousand in 2023[35] - Sales and marketing expenses for fiscal year 2024 increased to $63,842 thousand, up 55.3% from $41,114 thousand in 2023[35] Comprehensive Income and Earnings Per Share - Total comprehensive income attributable to Fluence Energy, Inc. for fiscal year 2024 was $17,674 thousand, compared to a loss of $69,202 thousand in 2023[40] - Basic income per share of Class A common stock for fiscal year 2024 was $0.18, compared to a loss of $0.60 per share in 2023[35] - Total other comprehensive loss for fiscal year 2024 was $7,085 thousand, compared to a gain of $601 thousand in 2023[40] Energy Storage and Digital Contracts - Energy storage products deployed increased by 66.7% to 5.0 GW in 2024, up from 3.0 GW in 2023[52] - Assets under management for service contracts increased by 53.6% to 4.3 GW in 2024, compared to 2.8 GW in 2023[52] - Contracted backlog may not generate margins equal to historical operating results, and there is no guarantee it will result in actual revenue as anticipated[57] - Annual Recurring Revenue (ARR) represents net annualized contracted value, excluding non-recurring revenue, providing visibility to future revenue[61] - Annual recurring revenue (ARR) expected to reach approximately $145 million by the end of fiscal year 2025[10] Guidance and Future Outlook - Fiscal year 2025 revenue guidance of approximately $3.6 billion to $4.4 billion, with a midpoint of $4.0 billion, and 65% of the midpoint covered by current backlog[10] - Adjusted EBITDA guidance for fiscal year 2025 of approximately $160 million to $200 million, with a midpoint of $180 million[10]