Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bloom Energy Corp (BE, Financial) has secured a landmark agreement for an 80 megawatt fuel cell project in South Korea, marking the world's largest single-site fuel cell installation.
- The company is experiencing significant growth in the US commercial and industrial market, with strong demand across various sectors and regions.
- Bloom Energy Corp (BE) is making strides in the data center market, with its fuel cell systems being purpose-built for AI data centers, offering advantages like high power density and the ability to switch to hydrogen.
- The company is on track to achieve double-digit cost reductions for the year, continuing its trend of operational efficiency and cost optimization.
- Bloom Energy Corp (BE) has expanded its manufacturing capacity in Fremont, with plans to further increase capacity as demand grows, demonstrating readiness to meet market needs.
Negative Points
- Revenue for Q3 2024 decreased by 17.5% compared to the same quarter in 2023, primarily due to a decline in install revenue.
- Non-GAAP gross margin for Q3 2024 was down to 25.2% from 31.6% in Q3 2023, indicating pressure on profitability.
- Cash flow from operating activities was an outflow of $69 million in Q3 2024, driven by increases in receivables and inventory.
- The company faces variability in quarterly revenue due to the timing of large project executions, which can lead to fluctuations in financial performance.
- There is uncertainty regarding the timing of large data center deals, with complex negotiations causing delays in finalizing agreements.
Q & A Highlights
Q: Can you provide any directional comments about the setup for 2025, especially considering the ITC schedule and the recent election? Also, what's the latest on the data center opportunity?
A: We see significant uptake in the US commercial and industrial market, with stable and strong volumes. The data center opportunity, particularly with large AI data centers, is progressing well, though these deals are complex and take time. We expect to have good news soon. - K. R. Sridhar, CEO
Q: Should we expect the diversity in markets, as shown in your recent orders, to continue?
A: Yes, diversity in our order book is crucial. We are seeing power shortages not just in the US but globally. Our solutions can help utilities mitigate long transmission cycles. We expect to see more diversity in geography, customers, and sectors, making our business less prone to market cycles. - K. R. Sridhar, CEO
Q: Can you comment on the rationale behind the capacity expansion at the Fremont facility?
A: We are expanding capacity due to rapid market growth. We have a gigawatt capacity now and can add another gigawatt in 6-9 months if needed. This allows us to meet the increasing demand quickly. - K. R. Sridhar, CEO
Q: Have you considered partnerships with natural gas pipeline operators to approach different regional markets?
A: We are in early conversations about this. Being close to a gas pipeline could be beneficial for large power loads like AI data centers. This opportunity is just opening up, and we are exploring it. - K. R. Sridhar, CEO
Q: How are you addressing the ITC expiring this year in your conversations with customers?
A: We have navigated policy changes for 15 years. A significant portion of our business does not depend on the ITC. Our costs are coming down, and electricity prices are rising, making our solutions attractive even without ITC. - K. R. Sridhar, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
