Energy Vault(US:NRGV)2022-11-15 03:32Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $1.7 million, primarily from battery storage projects, with $1.2 million from Jupiter and $0.5 million from construction support services to Atlas Renewable [34] - Gross profit for Q3 2022 was $71,000, reflecting the mix of revenue sources [34] - Total operating expenses for Q3 2022 were $36.3 million, up from $22.4 million in Q2 2022, driven by increased stock-based compensation and depreciation [35] - Adjusted EBITDA for Q3 2022 was a negative $17.2 million, compared to a negative $14.2 million in Q2 2022 [37] - As of September 30, 2022, the company had approximately $274.7 million in cash and equivalents, positioning it well for growth objectives [38] Business Line Data and Key Metrics Changes - The company converted nearly 500 megawatt hours of prior project awards to signed booked orders and executed over 2 gigawatt hours of new project awards in the quarter [11] - Total signed contracts and customer project awards reached 4.8 gigawatt hours, representing approximately $2 billion of potential revenue [11] - The company announced a 275-megawatt hour project with Wellhead Electric and a 220-megawatt hour project with Jupiter Power, with engineering procurement construction already begun [19] Market Data and Key Metrics Changes - The company is expanding into the European market and has made significant inroads in Australia and China, with a focus on energy storage technology [18][22] - The energy storage market is expected to grow over 20% annually for the next decade, with Energy Vault positioned to be a significant leader [16] - The introduction of green hydrogen as a third pillar of the storage technology portfolio is expected to address market needs for integrated solutions [17] Company Strategy and Development Direction - The company focuses on large-scale projects and technology diversification to meet customer needs, emphasizing a solutions-based approach [12][17] - The strategy includes leveraging software capabilities for energy management and system integration, enhancing flexibility for customers [15] - The company aims to execute on its 2022 regional priorities for deployment in the US, Australia, and China, with plans for further geographic expansion [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2022 revenue guidance of $75 million to $100 million and adjusted EBITDA guidance of a loss of $10 million to a profit of $3 million [40] - The company anticipates continued commercial momentum and strong visibility into project progress, which supports its revenue outlook [40] - Management highlighted the importance of execution and operational excellence as key focuses for the upcoming quarters [28] Other Important Information - The company has made key hires to support project management and execution efforts, including a new CFO and other leadership roles [27] - The company is committed to meeting or exceeding investor expectations and maintaining transparency regarding its growth trajectory [29] Q&A Session Summary Question: Details on the two-gigawatt hours of shortlisted projects - Management indicated a strong conversion rate from shortlisted to awarded projects, emphasizing a focus on large projects to optimize technical differentiation [44] Question: Margin profile for the business next year - Management expects initial project margins to be in the mid to high single-digit range, with additional revenue streams from long-term service agreements and software [46] Question: Battery supply chain strategy and contracts - The company secures battery supply in advance of project awards, ensuring no risk in scheduling and material availability [48] Question: Accounting for the two-gigawatt deal with Atlas - The royalty stream from the Atlas deal is set at 5% of total project revenue, with further details expected as the partnership develops [55][56] Question: 2023 revenue outlook and project delays - Management expects revenue to ramp up throughout 2023, with Q1 being the lowest quarter, and has built contingencies into their plans to manage execution risks [61]