Fluence Energy(US:FLNC)2025-11-25 14:32Financial Data and Key Metrics Changes - The company reported full year revenue of approximately $2.3 billion, which was about $300 million below expectations due to delays in ramping up a new manufacturing facility [8][20] - Adjusted gross margin reached a record of approximately 13.7% for the year, exceeding expectations, while adjusted EBITDA was approximately $19.5 million, at the top end of guidance [8][22] - The company ended the quarter with approximately $1.3 billion in liquidity, an increase of $300 million compared to the end of fiscal 2024 [9][24] Business Line Data and Key Metrics Changes - The company signed more than $1.4 billion in orders during the fourth quarter, bringing the backlog to $5.3 billion, setting the stage for growth in 2026 [7][9] - Annual recurring revenue (ARR) ended at $148 million, slightly above the original guidance of $145 million [8] Market Data and Key Metrics Changes - Approximately half of the record $1.4 billion order intake in Q4 came from projects located in Australia, with expectations for the US market to be the largest contributor in fiscal 2026 [9][10] - The company has seen a significant increase in larger deals, with 38 projects of at least 1 gigawatt hour in the pipeline, more than double from the previous year [10] Company Strategy and Development Direction - The company is focused on capitalizing on the accelerating demand for energy storage solutions, driven by declining capital costs and increasing electricity demand from renewables and data centers [9][10] - The introduction of the SmartStack product is expected to be a key differentiator, with plans for it to represent a majority of orders in the upcoming fiscal year [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting delivery commitments and capturing revenue shortfalls in fiscal 2026, despite challenges faced in the previous year [8][16] - The company anticipates investing about $200 million in fiscal 2026, with a revenue guidance range of $3.2 billion to $3.6 billion, reflecting strong backlog coverage [24] Other Important Information - The company has made significant progress in addressing production issues at its Arizona facility and is on track to meet production targets by the end of the calendar year [16][22] - A second supplier for domestic battery cells has been secured, which is compliant with regulations, further supporting the company's growth strategy [17][18] Q&A Session Summary Question: Changes in the competitive environment - Management noted that while the international market remains competitive, there is a shift in the US towards customers preferring US or non-PFE manufacturers [34] Question: Future gross margin expectations - Management indicated that the goal is to continue improving gross margins beyond the 11-13% range in the coming years [36] Question: Data center market sizing and Fluence's market share - Management acknowledged that the total addressable market (TAM) for data centers is significantly higher than previously estimated, with ongoing discussions about capturing a larger share [42][49] Question: Q4 underperformance and manufacturing delays - Management expressed disappointment over Q4 performance, attributing it to staffing challenges at the enclosure manufacturing facility, which have since been addressed [58][62] Question: Incremental capacity from new cell supplier - Management confirmed that the new supplier will provide sufficient capacity to meet projected loads for the next couple of years without material deposit commitments [64] Question: Long-duration storage solutions - Management stated that SmartStack will be the primary solution for long-duration storage, emphasizing its competitive advantages [98] Question: Breakdown of opportunities for data centers - Management highlighted the ability of their technology to address multiple needs for data centers, including interconnection flexibility, backup power, and power quality [104]