Fluence Energy, Inc. Reports Third Quarter Fiscal 2023 Results

Raising Full Fiscal Year 2023 Guidance on Strong Quarterly Execution

Secured US Battery Cells to Support Domestic Content Requirements Under Inflation Reduction Act

ARLINGTON, Va., Aug. 09, 2023 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. ( FLNC) (“Fluence” or the “Company”), a leading global pure-play provider of energy storage products and services as well as digital applications for renewables and storage, today announced its results for the three months ended June 30, 2023.

Financial Highlights for Third Fiscal Quarter of 2023

• Quarterly revenue of approximately $536.4 million which represents an increase of 124% year-over-year.
• GAAP gross profit margin improved to approximately 4.1%, compared to approximately negative 2.2% for the same quarter last year.
• Adjusted gross profit margin¹ improved to approximately 4.4%, compared to approximately negative 1.1% for the same quarter last year.
• Net loss of approximately $35.0 million, compared to net loss of approximately $60.8 million for the same quarter last year.
• Adjusted EBITDA² of approximately negative $26.2 million, compared to approximately negative $52.7 million for the same quarter last year.
• Total backlog³ of approximately $2.9 billion as of June 30, 2023, compared to approximately $2.8 billion as of March 31, 2023.

Executive Summary

“We delivered a strong quarter of timely project execution," said Julian Nebreda, the Company’s President and Chief Executive Officer. "Additionally, I am pleased with the job our team has done to strengthen our supply chains through our agreement to purchase US manufactured battery cells from AESC. We believe this agreement will enable both our shareholders and our customers to capture the benefits of the Inflation Reduction Act. Moreover, we successfully increased our pipeline by over $1 billion on a quarter-to-quarter basis, and we bolstered our Total Cash⁴ position by more than $30 million."

Mr. Nebreda continued, "I am pleased to report that we are making substantial progress on each of our strategic objectives detailed below."

Strategic Objectives

1. Deliver Profitable Growth
   • We are raising our fiscal year 2023 revenue guidance to a range of $2.0 billion to $2.1 billion and our fiscal year 2023 Adjusted gross profit⁵ guidance to a range of $117 million to $132 million.
2. Develop Products and Solutions That Our Customers Need
   • We received a 400 MWh contract that will utilize Northvolt's NMC batteries, making this our first major project that will use European manufactured batteries.
3. Convert Our Supply Chain into a Competitive Advantage
   • In July, we signed a U.S. battery cell supply agreement with AESC, under which Fluence will procure U.S. manufactured battery cells, which we believe positions Fluence to be one of the first companies to provide customers with a storage product that qualifies for the 10% ITC bonus for using domestic content under the Inflation Reduction Act.
4. Use Fluence Digital as a Competitive Differentiator and Margin Driver
   • Launched our predictive maintenance feature for battery energy storage on our Nispera application.
5. Work Better
   • Increased our Total Cash⁶ position by more than $30 million compared to the prior quarter, further bolstering our liquidity.

Fiscal Year 2023 Guidance

The Company is increasing its fiscal year 2023 total revenue guidance range to $2.0 billion to $2.1 billion. Furthermore, the Company is increasing its fiscal year 2023 Adjusted gross profit⁷ guidance range to $117 million to $132 million.

"We have done an admirable job of executing our legacy low-margin backlog," said Manavendra Sial, the Company's Chief Financial Officer. "As we look to close out of fiscal year, we reaffirm our belief that we expect to be close to Adjusted EBITDA breakeven for the fourth fiscal quarter."

The foregoing Fiscal Year 2023 Guidance statement represents management's current best estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

Share Count

The shares of the Company’s common stock as of June 30, 2023 are presented below:

Conference Call Information

The Company will conduct a teleconference starting at 8:30 a.m. EDT on Thursday, August 10^th, 2023, to discuss the third fiscal quarter results. To participate, analysts are required to register by clicking Fluence Energy Q3 Earnings Call Registration Link. Once registered, analysts will be issued a unique PIN number and dial-in number. Analysts are encouraged to register at least 15 minutes before the scheduled start time.

General audience participants, and non-analysts are encouraged to join the teleconference in a listen-only mode at: Fluence Energy Listen - Only Webcast, or on www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations. Supplemental materials that may be referenced during the teleconference will be available at: www.fluenceenergy.com, by selecting Investors, News & Events, and Events & Presentations.

A replay of the conference call will be available after 1:00 p.m. EDT on Thursday, August 10^th, 2023. The replay will be available on the company’s website at www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations.

Non-GAAP Financial Measures

We present our operating results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We believe certain financial measures, such as Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin, and Free Cash Flows, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with GAAP. These measures have limitations as analytical tools, including that other companies, including companies in our industry, may calculate these measures differently, reducing their usefulness as comparative measures.

Adjusted EBITDA is calculated from the consolidated statements of operations using net income (loss) adjusted for (i) interest income (expense), net, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, (v) other income or expenses and (vi) non-recurring income or expenses. Adjusted EBITDA may in the future also be adjusted for amounts impacting net income related to the Tax Receivable Agreement liability.

Adjusted Gross Profit (Loss) is calculated using gross profit (loss), adjusted to exclude (i) stock-based compensation expenses, (ii) amortization (iii) certain other income or expenses and (iv) non-recurring income or expenses. Adjusted Gross Profit Margin is calculated using Adjusted Gross Profit (Loss) divided by total revenue.

Free Cash Flow is calculated from the consolidated statements of cash flows and is defined as net cash provided by (used in) operating activities, less purchase of property and equipment made in the period. We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth. Limitations on the use of Free Cash Flow include (i) it should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures (for example, cash is still required to satisfy other working capital needs, including short-term investment policy, restricted cash, and intangible assets); (ii) Free Cash Flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities; and (iii) this metric does not reflect our future contractual commitments.

Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures included in this press release and the accompanying tables contained at the end of this release.

The Company is not able to provide a quantitative reconciliation of Adjusted Gross Profit or Adjusted Gross Profit Margin on a forward-looking basis within this press release because of the uncertainty around certain items that may impact Adjusted Gross Profit and Adjusted Gross Profit Margin, including, but not limited to, stock compensation and reorganization expenses, which are not within our control or cannot be reasonably predicted without unreasonable effort.

About Fluence

Fluence Energy, Inc. ( FLNC) is a global market leader in energy storage products and services, and cloud-based software for renewables and storage. With a presence in over 40 markets globally, Fluence provides an ecosystem of offerings to drive the clean energy transition, including modular, scalable energy storage products, comprehensive service offerings, and the Fluence IQ Platform, which delivers AI-enabled SaaS products for managing and optimizing renewables and storage from any provider. The Company is transforming the way we power our world by helping customers create more resilient and sustainable electric grids.

For more information, visit Fluence’s website, or follow us on LinkedIn or Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements set forth above under “Fiscal Year 2023 Guidance,” and "Strategic Objectives" and other statements regarding the Company's future financial and operational performance, including the anticipated timing of achieving Adjusted EBITDA breakeven and achieving profitability, anticipated demand for the Company's energy storage products and services, relationships with new and existing suppliers, the Company's progress towards meeting its strategic objectives, impact of the Inflation Reduction Act of 2022 or any other proposed legislation, future results of operations, future revenue recognition and estimated revenues, losses, projected costs, prospects, plans and objectives of management. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this press release, words such as “may,” “possible,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions and variations thereof and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments, as well as a number of assumptions concerning future events, and their potential effects on our business. These forward-looking statements are not guarantees of performance, and there can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, our ability to achieve or maintain profitability, our ability to execute projects, our ability to successfully execute our business and growth strategy, including realizing the expected benefits of our partnerships and acquisitions as well as other strategic initiatives we may enter into in the future, our ability to develop new product offerings and services and adoption of such new product offerings and services by customers, increased shipping costs and delays in the shipping of our energy storage products, projects delays and site closures and cost-overruns, failure to realize potential benefits of the Inflation Reduction Act of 2022, and other factors set forth under Item 1A.“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the Securities and Exchange Commission (“SEC”) on December 14, 2022, as updated by Part II, Item 1A. in our Quarterly Reports on Form 10-Q, and in other filings we make with the SEC from time to time. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements made in this press release. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.