• Revenue: $187 million, a decrease of 49% from the same quarter last year.
• Adjusted Gross Margin: 12.5%.
• Backlog: Record $5.1 billion.
• Order Intake: Over $770 million for the quarter.
• Annual Recurring Revenue (ARR): $106 million, up $6 million from the previous quarter.
• Total Cash: Over $650 million at the end of the quarter.
• Fiscal Year 2025 Revenue Guidance: Revised to $3.1 billion to $3.7 billion, midpoint $3.4 billion.
• Adjusted EBITDA: Negative $50 million for the quarter.
• Pipeline: Increased by $500 million to $21.4 billion.
• Liquidity: Total liquidity over $1.1 billion, including $654 million in cash and $458 million available under revolver and supply chain facilities.

• Warning! GuruFocus has detected 3 Warning Sign with FLNC.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fluence Energy Inc (NASDAQ:FLNC) has achieved a record backlog of $5.1 billion, providing strong visibility for future revenue growth.
• The company reported an increase in annual recurring revenue (ARR) to $106 million, with a target of $145 million by the end of the fiscal year.
• Fluence Energy Inc (NASDAQ:FLNC) ended the quarter with over $650 million in total cash, positioning it well for continued investment and value delivery.
• The company is launching a new product platform that promises industry-leading density and reduced total cost of ownership for customers.
• Fluence Energy Inc (NASDAQ:FLNC) has a strong US domestic content strategy, which helps mitigate geopolitical risks and enhances competitiveness in the US market.

Negative Points

• Revenue for the first quarter was $187 million, a significant decrease from the previous year, attributed to a back-end-weighted fiscal plan.
• The company reduced its fiscal year 2025 revenue guidance by $600 million due to delays in signing contracts for three projects in Australia.
• Competitive pressures, particularly from Chinese players, are exerting significant pressure on pricing and margins.
• Fluence Energy Inc (NASDAQ:FLNC) reported a negative $50 million adjusted EBITDA for the quarter, reflecting uneven distribution of operating expenses.
• The company has narrowed its gross margin expectations to 10% to 12% due to competitive pressures and tariffs, down from the previous range of 10% to 15%.

Q & A Highlights

Q: Can you explain the 2026 revenue guidance of 30% growth despite project delays in Australia? A: Julian Nebreda, President and CEO, explained that the 30% growth projection is a conservative estimate based on current backlog and anticipated contracts. The company aims to provide more clarity on these numbers as the year progresses. Currently, they have $1.2 billion in backlog for 2026 and need additional backlog to firm up the numbers.

Q: What are the current margin expectations for new bookings, particularly in Australia? A: Julian Nebreda stated that the margins for new bookings are expected to be in the high single digits, primarily due to competitive pressures and tariffs. The company anticipates returning to the 10% to 15% margin range in 2026 with the introduction of new product designs.

Q: How confident are you that the delayed Australian contracts will be signed by the end of the year? A: Julian Nebreda expressed confidence that the contracts will be signed, as the delays were due to minor issues that are being resolved. However, he noted that revenue from these contracts is expected to be recognized in fiscal 2026 rather than 2025.

Q: Can you discuss the impact of tariffs on your operations, particularly the Section 301 tariffs? A: Julian Nebreda mentioned that the company has accounted for the Section 301 tariffs in their forecasts and does not expect them to impact their ability to meet financial targets. The company is prepared to manage tariffs through its domestic content strategy.

Q: What is the outlook for ASP (Average Selling Price) pressure this year and next year? A: Ahmed Pasha, CFO, noted that ASPs have declined by 35% to 40% since last year, but volume has increased by over 60%. The company expects continued ASP pressure but plans to offset this with increased volume and innovation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.