Bloom Energy(US:BE)2024-05-09 21:00PART I — FINANCIAL INFORMATION Item 1 — Financial Statements (unaudited) Unaudited Q1 2024 financials report a $56.5 million net loss on $235.3 million revenue, with $2.29 billion assets Condensed Consolidated Balance Sheets The balance sheet shows total assets of $2.29 billion and total liabilities of $1.80 billion as of March 31, 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $515,957 | $664,593 | | Total current assets | $1,579,595 | $1,693,167 | | Total assets | $2,286,054 | $2,413,677 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $354,671 | $470,422 | | Total liabilities | $1,796,904 | $1,893,007 | | Total stockholders' equity | $489,150 | $520,670 | | Total liabilities and stockholders' equity | $2,286,054 | $2,413,677 | Condensed Consolidated Statements of Operations Q1 2024 operations resulted in a net loss of $56.5 million on $235.3 million total revenue, with $38.1 million gross profit Condensed Consolidated Statements of Operations (in thousands, except per share data) | Account | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total revenue | $235,298 | $275,191 | | Gross profit | $38,076 | $54,267 | | Loss from operations | $(49,017) | $(63,681) | | Net loss | $(56,543) | $(74,917) | | Net loss attributable to common stockholders | $(57,524) | $(71,567) | | Net loss per share, basic and diluted | $(0.25) | $(0.35) | Condensed Consolidated Statements of Comprehensive Loss Comprehensive loss attributable to common stockholders was $58.0 million for Q1 2024, an improvement from the prior year - Comprehensive loss attributable to common stockholders was $58.0 million for the three months ended March 31, 2024, compared to a loss of $71.7 million in the prior-year period20 Condensed Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity decreased to $489.2 million by March 31, 2024, primarily due to the net loss - Total stockholders' equity decreased from $520.7 million at December 31, 2023, to $489.2 million at March 31, 2024. The decrease was primarily driven by a net loss of $56.5 million, partially offset by stock-based compensation of $17.0 million and proceeds from stock plans22 Condensed Consolidated Statements of Cash Flows Net cash used in operating activities significantly improved to $147.3 million for Q1 2024, compared to $314.7 million prior year Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(147,266) | $(314,710) | | Net cash used in investing activities | $(21,428) | $(26,574) | | Net cash provided by financing activities | $7,150 | $306,487 | | Net decrease in cash, cash equivalents, and restricted cash | $(162,456) | $(34,921) | | Cash, cash equivalents, and restricted cash, end of period | $582,722 | $483,445 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail ongoing operating losses, debt structure, revenue concentration, and related party receivables - The company has incurred operating losses and negative cash flows since inception. As of March 31, 2024, total outstanding recourse and non-recourse debt was $843.5 million and $4.5 million, respectively49 - For Q1 2024, 60% of total revenue was from the Asia Pacific region. Two customers accounted for approximately 52% and 15% of total revenue5354 - One related party customer accounted for approximately 84% of accounts receivable as of March 31, 202476 Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 14.5% revenue decrease to $235.3 million for Q1 2024, addressing market challenges and liquidity Overview Bloom Energy provides clean, reliable, and affordable energy through its fuel-cell based power generation platform - Bloom Energy's mission is to provide clean, reliable, and affordable energy through its solid oxide fuel-cell based power generation platform. The technology is fuel-flexible, capable of using biogas, hydrogen, or natural gas, and serves large multinational corporations and utility companies180 Certain Factors Affecting our Performance The company faces extended sales cycles, supply chain pressures, and rising interest rates, offset by a $75.3 million tax credit - The company is facing extended sales cycles due to shifts in market dynamics, regulatory uncertainty, and customer caution regarding natural gas pricing and sustainability targets. Factors like grid interconnection delays, natural gas supply issues, and permitting challenges are impacting customer decision-making207234 - Global supply chain tightness, inflation, and geopolitical instability continue to exert pressure. While no significant component shortages have occurred, inflation could increase costs and delay manufacturing if not mitigated184 - Rising interest rates have increased financing costs for customers, putting pressure on margins. While the IRA is expected to make the U.S. financing market more robust, the ability to secure necessary financing for 2024 installations remains a key factor236 - The company received notification from the IRS of acceptance for a Qualifying Advanced Energy Project Credit of up to $75.3 million for its Fremont, California manufacturing facility214 Results of Operations Q1 2024 revenue decreased 14.5% to $235.3 million, gross margin fell to 16%, while operating expenses decreased by $30.9 million Revenue by Category (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Product | $153,364 | $193,745 | $(40,381) | (20.8)% | | Installation | $11,444 | $20,525 | $(9,081) | (44.2)% | | Service | $56,460 | $40,663 | $15,797 | 38.8% | | Electricity | $14,030 | $20,258 | $(6,228) | (30.7)% | | Total revenue | $235,298 | $275,191 | $(39,893) | (14.5)% | Cost of Revenue by Category (in thousands) | Cost of Revenue Type | Q1 2024 | Q1 2023 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Product | $115,757 | $129,613 | $(13,856) | (10.7)% | | Installation | $15,353 | $25,100 | $(9,747) | (38.8)% | | Service | $56,506 | $51,244 | $5,262 | 10.3% | | Electricity | $9,606 | $14,967 | $(5,361) | (35.8)% | | Total cost of revenue | $197,222 | $220,924 | $(23,702) | (10.7)% | Gross Profit (Loss) and Gross Margin | Category | Q1 2024 Gross Profit (Loss) | Q1 2023 Gross Profit (Loss) | Q1 2024 Gross Margin | Q1 2023 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Product | $37,607 | $64,132 | 25% | 33% | | Installation | $(3,909) | $(4,575) | (34)% | (22)% | | Service | $(46) | $(10,581) | 0% | (26)% | | Electricity | $4,424 | $5,291 | 32% | 26% | | Total | $38,076 | $54,267 | 16% | 20% | - Total operating expenses decreased by $30.9 million (26.2%) YoY, primarily due to a $19.4 million decrease in employee compensation and benefits following restructuring efforts in 2023268334 Liquidity and Capital Resources Management expects existing cash and operating cash flows to provide sufficient liquidity for the next 12 months, with improved operating cash flow - Management expects that the combination of cash and cash equivalents ($516 million at quarter-end) and expected operating cash flows will be sufficient to meet operational and capital needs for the next 12 months21674 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(147,266) | $(314,710) | | Net cash used in investing activities | $(21,428) | $(26,574) | | Net cash provided by financing activities | $7,150 | $306,487 | - The decrease in cash used in operating activities was primarily driven by investments made in working capital in the prior year period. In Q1 2024, the company built up inventory in preparation for expected shipments in the second half of the year246216 Critical Accounting Policies and Estimates No significant changes occurred in critical accounting policies for Q1 2024, including revenue recognition and asset valuation - There were no significant changes to the company's critical accounting policies and estimates during the three months ended March 31, 2024. Key policies include Revenue Recognition, Valuation of Assets and Liabilities of the SK ecoplant Strategic Investment, Income Taxes, and Principles of Consolidation321336 Item 3 — Quantitative and Qualitative Disclosures About Market Risk No significant changes were reported in quantitative and qualitative disclosures about market risk during Q1 2024 - There were no significant changes to quantitative and qualitative disclosures about market risk during the three months ended March 31, 2024322 Item 4 — Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and President concluded that the company's disclosure controls and procedures were effective303 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls304 PART II — OTHER INFORMATION Item 1 — Legal Proceedings A $3.0 million IPO class action settlement was approved, funded by insurers, while arbitration with a former supplier remains ongoing - A class action complaint filed in March 2019 related to the company's IPO was settled for $3.0 million, with final approval granted on May 2, 2024. The settlement is expected to be fully funded by insurers168169 - The company is in an ongoing arbitration with a former supplier, Plansee SE/Global Tungsten & Powders Corp., regarding patent inventorship and other claims. The arbitration is bifurcated, with the first phase focusing on inventorship and defective product claims, and a potential hearing scheduled for 2025170171 Item 1A — Risk Factors No material changes to risk factors were reported compared to the prior fiscal year's Annual Report on Form 10-K - No material changes in risk factors were reported as compared to the Annual Report on Form 10-K for the fiscal year ended December 31, 2023327 Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None305345 Item 3 — Defaults Upon Senior Securities No defaults upon senior securities were reported - None328345 Item 4 — Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable306 Item 5 — Other Information Daniel Berenbaum was appointed new CFO, effective April 29, 2024, and Shawn Soderberg adopted a Rule 10b5-1 trading plan - Daniel Berenbaum was appointed as the new Chief Financial Officer, effective April 29, 2024, succeeding Greg Cameron338 - Shawn Soderberg, Chief Legal Officer, adopted a Rule 10b5-1 trading plan on February 29, 2024, for the potential sale of up to 193,344 shares and shares to cover tax withholdings328 Item 6 — Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and certifications Signatures