Fluence Energy(US:FLNC)2024-08-07 20:12Financial Performance - Total revenue for the three months ended June 30, 2024, was $483.3 million, a decrease of 9.9% compared to $536.4 million for the same period in 2023[14]. - Gross profit for the three months ended June 30, 2024, was $83.0 million, significantly up from $21.8 million in the same period last year, representing a gross margin improvement[14]. - Net income attributable to Fluence Energy, Inc. for the three months ended June 30, 2024, was $0.8 million, compared to a net loss of $23.4 million for the same period in 2023[14]. - The company reported a comprehensive loss of $1.3 million for the three months ended June 30, 2024, compared to a comprehensive loss of $30.0 million for the same period in 2023[15]. - For the nine months ended June 30, 2024, the net loss was $37,357,000, a significant improvement compared to a net loss of $109,636,000 for the same period in 2023, representing a reduction of approximately 66%[27]. - The company reported a net loss of $72,888,000 for the quarter ending September 30, 2022[24]. - The company reported a net loss of $37.36 million for the nine months ended June 30, 2024, compared to a net loss of $109.64 million for the same period in 2023[72]. Cash and Liquidity - Cash and cash equivalents increased to $388.2 million as of June 30, 2024, up from $345.9 million as of September 30, 2023[11]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $513,308,000, an increase from $416,096,000 at the end of the previous year[27]. - As of June 30, 2024, total cash, cash equivalents, and restricted cash amounted to $513.3 million, an increase of 10.9% from $462.7 million on September 30, 2023[44]. - The company incurred capital expenditures on software amounting to $8,606,000, compared to $7,284,000 in the prior year, highlighting ongoing investment in technology[27]. - The company had treasury stock amounting to $(9,040,000) as of June 30, 2024[17]. - The company is required to maintain Total Liquidity of no less than $150 million from the Amendment Effective Date through December 31, 2025[109]. Assets and Liabilities - Total current liabilities rose to $1.1 billion as of June 30, 2024, compared to $745.7 million as of September 30, 2023, reflecting increased operational commitments[11]. - The total assets of the company increased to $1.7 billion as of June 30, 2024, from $1.4 billion as of September 30, 2023, showing growth in the asset base[11]. - Inventory increased to $469.9 million as of June 30, 2024, compared to $224.9 million as of September 30, 2023, indicating a significant buildup in stock[11]. - The total accounts payable increased to $256,264,000 from $(139,244,000), suggesting a rise in operational liabilities[27]. - Accruals as of June 30, 2024, totaled $213,339, an increase from $175,960 as of September 30, 2023[93]. Revenue Recognition - Revenue from energy storage products and solutions is recognized using the percentage of completion method, with variable consideration related to liquidated damages estimated at $75.5 million as of June 30, 2024, down from $84.1 million on September 30, 2023[48]. - For the three months ended June 30, 2024, the company recognized approximately $8.9 million in revenue from changes in transaction prices, while for the nine months, this figure was $16.3 million[49]. - Revenue from energy storage products and solutions for the three months ended June 30, 2024, was $472,569, a decrease of 10.9% compared to $530,268 for the same period in 2023[81]. - Total revenue for the nine months ended June 30, 2024, was $1,470,414, down 4.8% from $1,544,997 for the same period in 2023[81]. - The company's top two customers accounted for approximately 59% of total revenue for the nine months ended June 30, 2024, compared to 62% for the same period in 2023[83]. Research and Development - Research and development expenses for the three months ended June 30, 2024, were $15.0 million, up from $9.9 million in the same period last year, indicating a focus on innovation[14]. - Research and development expenses are expected to increase to support growth and technology roadmap goals, with significant investments planned[206]. Stock and Equity - As of June 30, 2024, total stockholders' equity amounted to $538,177,000, with an accumulated deficit of $199,291,000[17]. - The balance of Class A common stock increased to 128,893,582 shares as of June 30, 2024, from 118,903,435 shares as of September 30, 2023[19]. - The weighted average number of Class A common stock outstanding for the three months ended June 30, 2024, was 127,910,081, an increase from 117,456,282 for the same period in 2023[72]. - The company granted 165,521 non-qualified stock options under the 2021 Incentive Plan with a weighted average exercise price of $22.31 during the nine months ended June 30, 2024[152]. - As of June 30, 2024, there are 1,887,787 restricted stock units (RSUs) outstanding with unrecognized stock compensation expense of $18.7 million[151]. Debt and Financing - The Company entered into an Asset-Based Lending (ABL) Credit Agreement on November 22, 2023, with revolving commitments totaling $400.0 million, maturing on November 22, 2027[97]. - The 2024 Revolver, effective August 6, 2024, has an initial aggregate principal amount of up to $500.0 million, secured by a first priority pledge of the Company's equity interests[106][107]. - The interest rates for the 2024 Credit Agreement include an Alternate Base Rate plus 2.00% for ABR Borrowings and Term SOFR Rate plus 3.00% for Term Benchmark Borrowings[108]. - The Revolving Credit Agreement was terminated on November 22, 2023, in conjunction with the entry into the ABL Credit Agreement[95]. - The ABL Credit Agreement includes customary covenants restricting the Company's ability to incur additional indebtedness and pay dividends[103][109]. Legal and Regulatory Matters - The SEC is conducting a formal investigation into the Company’s financial reporting following a short-seller report, with the Company intending to fully cooperate[133]. - The Company is involved in litigation seeking approximately $37.0 million in damages related to an energy storage facility, with a cross-complaint against it seeking a minimum of $25.0 million[132]. - The Company recorded a full valuation allowance against deferred tax assets related to its investment in Fluence Energy, LLC, as well as certain foreign subsidiaries due to cumulative losses as of June 30, 2024[115]. Market and Industry Trends - The cost of lithium-ion energy storage hardware has significantly declined, but price increases were observed in 2022, with a return to historical declines in 2023[188]. - The deployment of renewable energy is expected to represent 70% of all new global capacity installations through 2030, highlighting the importance of energy storage[190]. - The energy storage sector is highly competitive, with new entrants annually, but Fluence aims to differentiate through tailored products and services[192]. - The Inflation Reduction Act of 2022 includes incentives for energy storage, which Fluence believes will benefit its operations and future performance[195].