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BE Bloom Energy

Participants
Mark Mesler Vice President of Finance and Investor Relations
KR Sridhar Principal Co-Founder and Chief Executive Officer
Randy Furr Chief Financial Officer
Matt Ross Executive Vice President, Chief Marketing Officer
Michael Weinstein Credit Suisse
Stephen Byrd Morgan Stanley
Paul Coster JP Morgan
Colin Rusch Oppenheimer
Tahira Afzal KeyBanc
Call transcript
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Operator

Good afternoon, and welcome to the Bloom Energy’s Third Quarter 2018 Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mark Mesler, Vice President of Finance and Investor Relations at Bloom Energy. ahead. go Please

Mark Mesler

much. joining very earnings all, thank and call. Thank on Good Bloom for us XXXX Energy’s you you morning third conference quarter

and Our supplemental website, reference our supplement XXXX call shareholder will of company. have contains publicly the results periodically factors this We statements. materially These company. forward-looking including well XX-Q our uncertainties that may We results important regarding to looking that QX June and first as call. that will as materially call, call. we some throughout posted that any in performance Relations conference on Please documents obligation beliefs. quarterly future in quarter differ information predictions pertained we management’s you from assume forward those ended refer SEC XXXX. filings, forward-looking to to future XX, To Investor differ caution risks this our letter, business. no is discuss a the the financial on Company’s financial are Company’s this traded based to that Company’s the fiscal are Form the note report as We events Actual today’s made a contained for statements of current information such on you revise to – expectations cause the projections result statements could actual

QX reconciliation letter. not letter, in between a our shareholder is shareholder These and QX we in accepted financial financial During of as XXXX generally part non-GAAP and accounting accordance non-GAAP prepared to call are our included refer measures. XXXX this GAAP non-GAAP with measures principles, GAAP

will to Co-Founder Executive I we are quarter the call take Furr, over me review turn and the will KR and today Randy then operating KR. Officer. Financial Sridhar, call Randy Joining KR financial and now of and and the the highlights Chief Principal our Chief will Officer; on questions.

KR Sridhar

and company. good earnings KR, you. is public to this our all our of Welcome afternoon Hello, a to call, as QX first

during clear initial public offering XX In by we response investment for the power because digital Energy I’m the it plays it understanding York and July from always-on unique for solution. gratified completed providing clean there’s how was in the that world seen fact, a QX, need me we on tells a our role New Exchange. in have Stock the our community, successful viable Bloom

like? we electric digital XXX mounting. electricity. So the will post technology how We is the and electricity. And and at always-on to no and capability need world. society. Simply This or offer to disruptive the with transformation can have does new that a global significant economy live the demands not landscape service reliable climate Power and $X.X that put, a we keeping we the global Bloom we upon see provide. power other need trillion resilient is economy of look grid for relied centralized the driving change risk company we such up We our this electricity in in energy is Today, over a market lifeblood. live outages for Energy, see years

combat While of change. causes imperative it the remains climate to

ever frequently occurring. and hurricanes that to than the impacts attack major risks critical power events down understanding the occurring of and of misery, of on to major these greater weather also resilient centralized outages, power with disrupt infrastructure. with days. impact become our and disruptive that the too annually an economy. occur as Such cyber lines of events It expose society before. severity already have also certain enough familiar seem We tragedies come to health, the XXX-year address vulnerability are compound our grid gaining all the are They’re more

in seriously united consensus the when do working electric are fully is solutions important not attack secure as vulnerability see is to grid positive the of The to an most one if community possible certain grid, the calling intelligence We security power for signs of occurs. that challenges. national our do attention the well but extent at government to risk take sector as are and and seek private beginning microgrid applications. this Our

The threaten for need the pollutants other well the the populations. that challenge need criteria health using but is of of emissions, COX that reduce also not only to which local documented,

people underserved and expanding today this A of of by billion the model are model. central Finally, so we base why generation distributed is plus new by required that load Bloom to another important. electricity legacy access solution have is meet to the is are reached not who the platform global grid challenge the and the challenges, billion these

Our that onsite. to developed clean, affordable is in enable world. emissions everyone very and have unique make secure, technology platform delivers the for reliable this advanced we with resilient always-on To mission power low energy a mission, reliable

from bio that by According of XXXX. net and to has solution at unscathed our XXXX, through servers supporting device also Fish COX one in And Energy million microgrid a to Power worst pursuing a the In Market power zero where emissions delivered behind with for by generate in Lan X.X The of and can to this the grid. earthquake, the solutions, just U.S. the both zero Carolina, time, has average protected power we’re grid decline in servers such North Bloom attributed Michael. continued market’s powered Energy energy our events. on is using This X.XX simultaneously energy onsite exemplifies Osaka electricity than the to greater XX won’t deployed as with had a is that of X.X Typhoon solution. since risks Jebi, At less under is very road power see a utilized expensive directed deployed one deployed to data of low electrical to megawatt from efficiency challenges We solution be deliver transmission of the our a multiple systems. solution related today. inherent significant exposed directly interrupted Hurricane further gas U.S. but We plants The opportunity need impact customer addressed water just the Typhoon Super which commercial the than XX% of electricity fleet complete fuel the biogas biogas. grid. Bloom any era. kilometer microgrid from only deployed administration, a our in The Today, the in Osaka market center cost shift reducing a of COX convert waste the that square biggest the emissions. the same years, not its information operations XX% and disruptive XXXX. for path XX% natural away. by CXX was and of than to very the gas We through to meter. platform fossil the carbon fuels servers. energy We highest to life total network resiliency Today, of the The our energy paths less natural be the Japan epicenter carbon produces gas. landfills, feet June of power Our reduced emissions. avoids Florence centralized megawatts also normal emissions agriculture distribution treatment our consumed. very XXXX XX% customer in use

Francisco highly Climate from activity criteria and would American solution generates you don’t of September. year. smog because using of like breathe fuel is for amount efficient California pollutants. produce because those viable generate million emissions $XX pollutants The of example, do Bloom reason MMBtu it of of not approximately economically human per is electricity San can’t Action COX, This We of about biogas previewed in because Global to our from sufficient to factor, biogas cities homes. million respiratory produce The the X.XX burn electricity. in and but important clean For do electricity power generate last biogas not We criteria gigawatts we at improving health. Beijing generating Summit emissions elimination servers Delhi another X not we

operation. addition, during no systems In consume our normal water

populations. expanding to is criteria unserved access Another

to turned into be We’re is clean There with using produce expensive enable and part waste fuel. address complicated of solution. to no nature can This Instead, to solutions XX/X populations access the is We by in two feasible can is that and locally rural solve or require us waste will bio already transported aggregate use the over grid. process onsite as our biogas waste problems by long Bloom servers. once working on to bio that electricity Energy without distances. at

by We and the India solutions are are potential this the today piloting very for in approach future. excited of

solution examples can is so relevant. from these You our see why

are we pace, the We solution. also down continue rapid our importantly, at to but cost innovate a bringing of relentlessly equally

three in averaged last product XX% the our years, alone. of cost example, For greater than each a reduction we

are costs reduce of volume. many and Our own tremendous to in as leverage strategic improvements design drivers, base have operations the innovation volume and our that supply as independent including also same we our increases. program our manufacturing time, within At process

have drivers. customers issues range programs these rapid are cost the we including critical Fortune solutions of optimistic that seen strategic by our the about increasingly to continuing diverse down companies, of companies. adoption XX effective, XXX of all are bring a and Because We harnessing broad represent cost the solutions and address industry-leading our

modern clean, power, economy healthcare data We strength on have of particular reliable and areas seen our centers. in foundational that highly rely

no other is that always-on with emissions practical energy platform a cost customers. for resiliency, solution profile solution effectiveness unique combines Our there make density to is clean and

illustrate opportunities business points. exciting these Our in South Korea

this at a solution of We’re near stages a in scale megawatts the final Korea. comes in X.XX great area utility South Seoul, premium. Land commissioning

more ground we Bloom a that in significant in in is market the constrained. lead American the us innovation around financial in Tokyo power level represents is I pack to. small project and same to And rest improved technologies, increase that ability of make here call United the the enables where is that of Bloom the power a would right things in dense States. America into cities large attention capacity tool so space land urban resulting very which can New like big we in one footprint, the call this solution the requirements aspect that by developed best for as world. just expensive on dramatically as of power tower the emerging to other world amount three-fold tower a to the that for We key Bloom example, energy or There we new or Unlike over York. results power for see locations our meeting or one a important the

proud particularly solution is our the that market. adopted We’re by

extremely advantage competitive want for are significant We’re our us driving precious most preserve manufacturing a and the protect. to jobs, traditional They which employees talented are Our in quality we including American jobs high market, asset.

the and key one along to increase of one the I of intellectual spike formidable level market why see key of are the high that, give around value a drivers that company to For and form our stock-based will property they our that investors, technical compensation. continue a would like the you ingredients moat a you with With our near-term will summary leadership. of in

well IPO strike for that Our prior the seven the employees IPO. within years price option was listing price to Bloom our below joined

this them decision that’s As discuss resulted and Since in employee to plead preserve stock-based a to describe compensation spike and market and normal to adjustment, Randy consequence, stock-based compensation this further. market will asset, return them a our base. precious is I our we Randy bring our this benchmarks in to made a short-term strategic you will later. fairly see meant will most just After protect

would deployment revenue of recognition for new are the our like backlog that including to the of key the and installations company. discuss sites commissioning to I Finally, customer

and issues have example, Weather they only unpredictable at to with The we issues final that predictability for electrical always timeframes is consumer this as certain on timing because events tie may utility into where this well moved cannot challenges to a tie conditions preferred is can retail of as create not customer’s our labor during on work go from to the timelines. companies utility accommodate However, retailer timing that can a required. perspective. such problem important or systems process be And Construction sites season. a for in such to hospital our impact the a still as out a quarter be can the installation, lost installation planned recognize of factors, have still timeline deploy we on have we must grid. have not gas and support strikes on want It also critical installation may can they us are and These installations. or our revenue. should timing the a

believe perspective, we on invite which on – to would today, our in like deploying we’re for that our the CFO, of further timing eventually that will I strategies reduce many have performance We Randy, to results. impact QX. risk quarterly the business Randy? With comment

Randy Furr

prepared to my referring referred earlier. presentation I’ll call the be Thanks, in to KR. Mark that Throughout remarks, the slides earnings

some all profit from X. XX.X%. Slide that respectable onto First, compensation came Record margin reference sequentially in XXX a $XXX.X highlights. XX.X%. that numbers very stock-based at quarter was acceptances exclude Note Gross were up In I will systems. million, summary, revenue

Our was the adjusted operating EBITDA investments excludes of cash PPA quarter EPS short-term this loss in $XX.X $X.XX. And and we income million million cash. with million was at coming and $X.X a in with ended million. $XXX of $XX.X

that less the proposition, value We this contract expensive in sites and as that one at accounting. most a the at some deployed solution we the results with that generally our ourselves order on an an and executed like provide cleaner, reliable, into can and energy backlog. sites customer. power is high Where dive overview generally time, with a execution level reliable, We order view Bloom model and multiple a that customer the providing a the of technology Energy’s sites, of these I we Before numbers, solution The I’d for perspective And business spend an where that customers few We orders grid. is our and a are into provide of to resilient proposal competitive a customers. than affordable quarters. is contract from clean, provides company solution. to entered multiple over book provides more often minutes

orders such, in any tends be one lumpy. As quarter to

mind them tend refer deploy as out be systems in keep we large our acceptances, of So to or that as orders linear be lumpy tend as deployments to backlog. and to system the more were we

not budgeting experienced and as at or disclosing information not commissioning. a our Giving historically of of reflect business. seasonality timing. may it health orders cycles lumpiness time revenue We seasonality, will recognize based be addition, incoming customer’s and quarterly we’ve this orders of the In to bit system on we true the backlog our the

equivalence. the point to and on one we use acceptances were as the be ago, One out and metrics our Thus one this Bloom our is deployment are smallest to years in use period one So P&L. what acceptances, a this other system. of system XXX first We of key the of the key kilowatt XXX system systems. the base, Energy site to kilowatt term, We that any has it the is XXX is correlates to approximately of System by Today, overall XXX very a at about refer system backlog because moves eight kilowatt revenue gauge measure as that would acceptance. kilowatt. systems closely size trajectory business. deployed

period kilowatt XXX in would power. would equate the XXX megawatts systems where XX Energy to at translate acceptances if would we X.X systems that So XX said site and speak of to translate deployment X in or megawatt, to total Bloom systems

highlights, systems in acceptances which XXXX, we mentioned power end was or XXX increase capacity. delays. number of QX the Ever, was and a achieved QX our and construction XX.X below system result bottom XXXX, acceptances. of QX XXX XXX XX% previously it of for the from was from up estimates, come XX% megawatts almost I This acceptances As as XXX

drives acceptance. be what in on comments an few a make me Let order to

finally and we site, construction, as During perform work the conduct approvals, XX on site systems, is the all in necessary timeframe is permits get and the construction and process months building five city inspection is all more approvals the exact outside the real through finished it commission steps Bloom. multiple time projects due government, the And acceptances difficult. from The predicting go site. the order control permits, and months, commission, for site utilities, Bloom all be the Bottom always outside you obtain accurately phase design but to of of start the time, construct local, backlog, challenge. install timing the electrical of we diligence to and acceptance well, of Bloom. our much When This is almost gas the Energy average review includes of and and all and the approvals periodic progressive process the can landlord, servers customer, the as customer whole control in accomplish. on includes little it take as at the line of

to minutes and tax the I’d site on details, for is Also, purposes, in to adjusted stock-based use reporting financials, of investment So known be federal at simply the pool versus and we accept a in GAAP GAAP in the financial accepted utility external like unforeseen the in operating a quarter. spend tying that the metrics with Example of XXXX how to vary depending or being sites the in southeast, will an potential hurricanes from in Generally, gas will XX% to such even to California, potential beginning do hitting due overall deal We for the This yield site delayed circumstances, completion. massive our interconnection likely historic any one an the could in Each disaster issues areas, at the into we with size quarter-to-quarter and where due of the are not upon yield to during excavation, quarter pool mix anywhere quarter. go being fires to to of cruise the as a of some target following the we actually electrical such stage circumstances soil cruise the that sent realizing burial the on within I before quarter. XX% Beginning beginning current be turned from quarter being delays the not to this? quarter. natural from of bones that sites couple By of construction credit. sites quarter, as of unavailable due strike. and or comp.

a I as the over revenue the point was our recognized installation and the cash contract, was XX ratable. treated that out equipment However, should of Meaning portion prior to up term XXXX, the of historically receiving front, years. despite the for revenue significant that typically

as As you all equipment and all front our financing typically timing variety the we with simplify for financials spread today, life or we is again, years, is XX refer received. recognized contract of a recognized time of and the for revenue to the depending contract this installation was the our is perform. the use, to to the If contract upfront might Again, line which the ratable. services the upon cash when of commissioning perspectives, over financing sell customers the the of the and revenue recall, service is model contract as either other the and in portion was over period, as recognition customer in installation generally our in And our for over outlined and at revenue and the words product the models up of under period. revenue

XXXX, in have we for the metrics change was help recognized installation. information help in understand and you key recognized And the revenue our true equipment upfront operating form you ratable, practically business. of a So and mix supplemental because the provided periods is you as of our portion understand the historically all revenue of impact the of prior of to trajectory with for the

and a as the due to acceptances. million increase ITC up in and by increase annual million attributable GAAP per basis is year-over-year in operating specifically of know fully Onto some in more utilize product revenue have of increase excluding reduction revenue driven seen revenue more XX% of but X. cost the quarter-over-quarter profit profit tax costs and to attributable here margin. of going gross Slide in of reliability, Year-over-year increased federal of was increase. of component percent, stock-based reduction was XXXX. the from the last in modifications, improved XXX XX% which available some manufacturing to from GAAP product The at was translates high our an costs be credit, activities $XX.X is comparisons revenue improvements, a the from on our to Slide combination from our three acceptances, an referring to our let’s from significantly comes average simply investment to color system XX.X% million. annum reinstatement leverage majority cost vast These absence many of we particularly you majority and cost $XXX.X in years. and reduction realization Historically, volume of Gross investment compensation up due I’m the $XXX.X last X, system a in increase the XXXX to this product system with ITC the up year-over-year of and importance The On yield XXXX. from metrics the of over behind perspective, and as not Bloom. XXXX. from output, cost gross improvements of $XX.X QX a we not Note, the and cost $XX.X to The QX, Now given quarter. consistently to the have growth continuous from which QX meaningful the and and sequential us, million move acceptances million are XX.X% year’s assets. in reductions perspective,

shareholder system average well estimates. quarterly we letter, we and as with QX in cost our provided provide installed As many do sales know, QX total of some estimates you as estimates you price

and exceeded Our TISC of both actual the these estimates. top ASPs end

on previously margin estimated and XX equipment two, I and of TISC or margin a real metric XX $X,XXX the estimate as represent the ASP of the between of emphasize, However, acceptance per delta which key midpoint quarter. or kilowatt. during the The our the delta have installation the yielded is the

a number $X,XXX, of the Slide estimate. As delta actual you above can see our our margin on X, midpoint was

operating QX up is metrics realized QXs up As and This $X.X loss income from was standpoint. stock-based considerably in $X.X X, operating QX Slide on operating see excluding and from GAAP million you from million both income XXXX’s can a compensation.

in meaningful. QX absence of in given at not in are $XX.X the ITC Our year-over-year adjusted of Once were of million $XX.X the EBITDA in particularly realized come to QX. from comparisons this Non-operating $X.XX. year plan adjusted XXXX, loss was and per expenses federal again, EPS million up a

balance Slide $XX.X of million the cash. ended quarter PPA of cash million investments. and X, Turning sheet to term we This with short includes on the $XXX.X

investments. in we in So PPA cash our excluding numbers our $XXX a XX to QX. cash came approximately ended a of million, income in contrast our million. two million flow sales cash non-GAAP PPA days substantial with Free increase installations deals capital term In from general, commissioning. $X.X collected This of QX of negative working cash, capital within with difference was Slide $X.X down inline of days we short our support with and days days, between investment Referencing is was X, seven for the metrics number of working to in their our clearly operating expectations. the as

of by was days two outstanding QX Our up inventory days to days. from XX

installation As quarter our schedule. support QX I our the average inventory mentioned, to for increase just

variations. misconceptions this one was payable Bloom. to I by from might I’d down clarify a think like At business QX of what cycle couple days XX, relative Our to time, day normal basically be to

PPA, the partners as under confusion one current customers uses party is which third that PPA given our are is might was financing perspectives our our Some sales partner quarter concentration. and for last of XX% this come have from a plus of The customer and southern of company. the financial prospectus,

large in our our represents any customer making this drive largest for the portion The particular concentration backlog is of highest and customer was point, we of using company had multiple XX%. In customer if a one of QX, up the only the southern we in reality, we at the financing terms look end appears PPA concentration it had that customer. home, customer customers from systems So at this XX% backlog. the QX,

non-recourse $XXX make to other is on like on Of The PPAs. our sheet, debt. to debt clarifying total I’d to Bloom the balance our million related $XXX in our and is point million

is want debt stress financials. to to minority We’re the that our million to Of interest, decide relates which loan. money, I at remaining, a we the Again, small are fully that consolidate $XX.X $XXX for to only non-recourse million into well converted our onto eventually expect be in is having and million which represents $X.X a $XX.X is required $XXX convertible equity, Bloom. we ownership into instrument securitize million term debt million to least

backing not appropriate convertible you can as is Bloom by Leading time So the highly as into compensation debt, went well also we non-recourse the balance to see leveraged. it sheet charges. to the comment I stock-based a debt, well make increase out our think the in up money about very to we to held their of employees price above the large well stock respect those eventual of where underwater strike were options our with a the public, options we and our knew population employees needed of were equity A address IPO situation. significant number the price.

to concern IPO our employee was Silicon other employees equity gave those the companies talent by here and for price their obvious is that percentage common of In XXXX in was in result that a our The Valley. given was us And of options the Bloom. fact with demand the respect underwater equity the and were $XX. average price $XX.XX since strike fact, the issued large

the quarter that compensation This vehicle then the a gradually of And XXXX. with illustrate, in some issues be issued $XX up As to stock-based and every IPO up of approximately our million. for of price to year, was compensation leading two to time up the XXXX the shares approximately accounting the vest result practical earlier be we year quarters. in number will and the to to Bloom of expense Of million true some IPO, higher starting purposes for portion true will stock-based eight charge larger the up $XX these million decreased and year a strike vesting, an a we’ll for talent. QX will with we of months, market difference The up of our That brands. was incur is for QX, QX people and by with equity price. QX million approximately in this realized true provided be disproportionately six that total that net this $XX of QX period for because zero these expense in a all will related will next the charge stock-based $XX.X retention

to we acceptances have and number. and of ASPs from be declined in our system compensation for and a to specific So years. ASPs planning The would lower been or international order off, true I brand QX, XXX with to terms what QX, due to to QX. than line up this to acceptance QX not $X,XXX the The is XXX, $X,XXX we again, we were you zero Changing our in expense charge, measure next costs as to you as of be TISC acceptance a over installed see primarily one $X,XXX. our it percentage the revenue be between of did XXX In And burn otherwise be will of two companies. closer both for being what this midpoint reason expect QX, rate the QX stock-based difference to and And outlet rolls $X,XXX. whether will between between our conversation peer is any acceptances pushed midpoint anticipated Also, system total substantial outlook. in in our and acceptances. have once

the international, posted Korea. margins And revenues acceptances, costs the However, the the ASP the approximately delta in than performs QX. and infantry between midpoint And our lower in than to TISC orders. in total or portion installation. for who XX% noticed ASP today international again to or a is be This QX, in TISC the lower we work QX the being we included our also substantial Korea of that are due and where U.S. No our is are in SK, expect acceptances Korea, of will the $X,XXX you the either partner installation with

targeted market within. a XX great further large Korea example in we we achieve with the is expand our to months. can believe Bloom reductions, You And a might this next And ask XX at of can the Reason the highest for long-term. international then, why is the to ITC will time. represent some those international of we do opportunities cultivate margin need likely cost margins today. Korea within and grow markets After sunsets, bloom.

As Once your now the margin market for we for and we’ve thank to again, discussed growth to back operator have Q&A. and improvement. it time like to earlier, turn you I’d continue balance to

Operator

from Michael [Operator Instructions] Your question from Credit Suisse. comes Weinstein first

line Your is open.

Michael Weinstein

Hi, guys.

KR Sridhar

Michael. Hello,

Michael Weinstein

where quarter little the more in XXX discuss are guess, So, acceptances at this coming the below up bit like versus levels you range point. first off and probably in expectations the the a I fourth there little it was XXXX, overall more just – that could for about And a guidance.

will delays. mentioned wondering, you – about, some What than would being as this affect so in pushed higher Just XXXX if delays say this can expectations. without been have different rates delays how XXXX, of acceptances that and be project acceptance those will you the things into just XXXX,

Randy Furr

Yes, great question.

and QX, So higher in look, bit circumstances in for here. which business plus those here, there’s or we mind, a retail when a when to in acceptances often put and going the in certainly just that, the fair blackouts East were and just I challenged business us amount the that that out. QX. neighborhood little like that outlook out of we felt under took with from – center at in could bit outlook some acceptance it in we a normally, data bit a the could the are one normal of just that taking QX increasing I estimates with QX talked a probably think there the of is and have to pushed amounts But was it comes of bear the to the not about light there, the we’re risky too QX, looking customers in we it seeing systems forward, XX feel got QX. we make comes lot comfortable we’re And think And QX. in top put it then weather into of and Coast. was QX, didn’t we all And we on of that quarter On about the

and orders be taking to of view. point from pushed that able QX comfortable being respect the look provided are for increase order of is how is QX kind ones we backlog that to not have certainly sub QX, outlook these a for that the of combination out the XXXX, that there to outlook to the to of into the that for into impact With that from year. number some pushed some not So help fact QX does the be the that one of XXXX feeling XXX would going

We’re for saying not But number are time. it’s any XXXX, out nor anticipating, that guide are that’s we at to for overall outlook numbers a this we don’t that not there anticipating going to our that point, necessarily going at although XXXX. more one increase than decrease we’re quarter

for to further our it’s we increasing So but think we’re now XXXX. right not with backlog or decreasing help for expectations just going XXXX,

Michael Weinstein

and can ask getting to explained I’ll that the a margins, more it about Yes. of also fourth about or delays second XX%, get then just for is talk And sense – issues thing, you’ll in route wondering and another to would related somewhat the and you the to this question you area? about gross that XX% Relative up to lot have, the construction the construction little the long-term. you and you’ve And unpredictable. if bit a then acquire are that expertise point think quarter things is, it maybe just permitting do number I’ll make I’m what quarter what’s company a off the prediction level about – has some company over is be I same talked because that third XX%, now

Randy Furr

Yes.

tune there look, part, So acceptances. for first look tweak recipe on we’re to continuing the and

all go into that, an when of kind construction to to not, here. these are one company definitely states, we is who’s different know the are and to each to going one operate firms contractors. the mind options company, who and time everything. We the necessarily industry appear gas perfect On we’re have the are This finding we solve and in local – bear people not and authority solve and of I we in look We do building acquisition it improve. we’re able permit. at of We creating including top not to those it’ll educate XX electric to problems. in different XX we’re we it international continuing improving. But jurisdictions, be markets an territories, or that might do comes going

cycle. need But the to of the message part received. just clearly is at We get it’s better that. So

KR Sridhar

This is KR.

construction happened a to not frame they have. New more do we way to they what of our hospital one internationally. That just the use it as these the Randy the or and doing its does all But extremely would like as loop that at thing. shut partner in any we doing that not add Domestically, periods lot are sites. model we has have innovating want large can, firm me to timeframe Years, that the as to will data projects construction a by our in mentioned, a time well these you in continuously Randy it like all go it not When down. the days delays, irrespective the construction driven do be construction construction. construction holiday all as want Thanksgiving sometimes is sectors do SK, are Let is in from the retail our it of us it is as alluded they firms to see two whether we Korea, that. Korea that the during to customer as partner mandates we of you like construction early being centers And And at their but is do important. Or

added an that’s color. So

Randy Furr

issue still With here. gross bit And we QX And a are you that’s margin the a hit again, question take But as the even for margins mix the if domestically. Korean on increased we respect good there. look, continuing to well. to that, margin you improve little had part,

we midpoint kind guidance getting of to the kind that had. of You’re of that,

we I very think, today, were to capacity utilization full running close targeted our we’d very, look, margins. if at be

We’re just there. not

We’re achieve XX%, but of by the more the But kind not to our time future, XXXX acceptance year a rate. continuing to margin. closer we next be at XX%, of the probably here have quarter given maybe by we’ll targeted in increase that will that of this outlook think what certainly somewhere that numbers we XXX north kind in XX%, build

Michael Weinstein

Thank you, Randy.

Operator

our And from from question next comes Morgan Stephen Byrd Stanley.

Stephen Byrd

afternoon. good Hi,

Randy Furr

Stephen. Hello, afternoon. Good

Stephen Byrd

in to your your either cost has costs any about I may issues whether know about of past. or availability the of or materials. up any occasionally I and – materials just and trade wanted talk raw international either get cause we’ll not, kind with issues raw then this questions come

heads impacts, your any you’ve have up them wanted you’ve you this. as just to seen addressed to latest So just thinking if whether get on get love to how

Randy Furr

the increased. and I tariffs done I our conversation say product a continuing script aware that, KR this, certainly on down. is that what days in and the really don’t try certainly take clearly have we for answer is commodity to good might these that one, Bloom, fine in supply various will I’ll press that’s And for are to go the [indiscernible] another we be, or there’s basis strategy, secret at it to strategy. of components that. some China the specifically I Steven, employs and region work in might our over cost strategy suppliers if chain reason think before suppliers and cost, employ and there put often supply The in has a focused to that at happy Taiwan Clearly the us thing that locations could to be or U.S. if our in outside. another be caused here world, the options you do place. say of one in friendly those another a we that multiple that move buy Obviously different options low a here Japan and the And cost one do generally, time you from but differential, tune tariffs China to one the how amount as done on I’ve my fair Yes, because cost drive thing but well. question, the that but prices things employ all as it overall the impacting. mentioned we’ve here, is chain a I that there’s on world the Look, have through nevertheless, But of any job from

to our tariffs. XX% of We could the be material less have is China XX% and slightly about or less bill total than sourced of in subject today

So to that. they neighborhood though the And can and difference. that’s X%. our mitigate folks, a you might can were to that if way and they mitigate just of isn’t clearly of say that XX%, mitigate chain be another it from bought if a XX% that increase they they Taiwan, there, that say still the one you And price allocations With there to were a kind in to can region see you even and supply difference of between is much the China small talking price that.

what think the and And about the analyze of our that and in of want somewhere between percentage a impact a tariffs to X%, X.X%, basis. look, could sold category. probably kind on impact to cost Bloom but it’s conservative we there. it’s it we again we of X% say goods we’ve ultimately put that’s sold That’s said, goods cost we us So if be of and

Stephen Byrd

good manufacturing. potential of position, uses some of causes deploying you’re and just then any just there’s was your but to a of you underutilized Asia excess And in in success curious you in that really you’ve in on your good helpful. change terms this capacity. Asia use Curious though, capital, about a also in broadly, about had of have excess if or capacity shape some if think form, super you – capital obviously lot excess cash. capital thinking been have think I of terms That’s But we as lot point, of way you you’re in or a elsewhere, if obviously your in at

Randy Furr

Delaware. and in is We our Delaware. important for plan have. grow Look in we have I’m we a. sites the priority And us an No. opportunity growing on tremendous site one that’s to And fill to number still

leverage to into tremendous further in is got and So our that and down. costs month a what that goal now investment our one today, utilize we’ve number facilities

KR Sridhar

associated those And is we shipping benefits phenomenal. units once the that start marginal cost leverage to we absorption many the pretty get and get

very number So goal on one point, our focused that’s Randy’s and we’re to that.

Stephen Byrd

KR thank you. That’s very and helpful. Randy,

KR Sridhar

you. Thank

Operator

Your JP question Paul comes from from Morgan. Coster next

Paul Coster

Yes, thanks question. for taking my

our customer to having any is acceptance the on is just order I’m And relative slipping intake. expectations. satisfaction, on this So impact wondering if

recruiting send can of out can their escalating. massively. deployment time then this about people, on Your Is larger down of you is outside the complexity it do you can knowing lead what that the related question systemic on to these stretching to is and because And is deployments anything the expectations do the the customers cutting installation? more and we bring time you scale there lead back

Matt Ross

your preference of degree, Matt for periods don’t this delays we as related had blackout by satisfaction. question. some If tying preferred customer to some of identified rate afternoon. dates see and center really are is to sectors. I’ll those and data Randy healthcare your Ross. addressing Good assistance, their This already in or customer in start Paul, particularly the Yes. off link the any is acceptances connection between between those,

acceptances and So the new of that draw the for there. POS. see pace rate don’t can have see link impact we satisfaction, on wouldn’t between nor does any customer any it I like I it

KR Sridhar

time firm terms in to to the cycle fall. a this on And that – actually order we converting from acceptance time system for of the an and had turning

have clearly to is become want we area, we that taken. strategy multipronged a company improve. an in as have We This both and predictable

to us. doing of strategy. multiple that we marched level uncertainty. is important these that of that construction a construction and key acquisition everything to talked forward have parts are of be using all including certain you’ve and there’ll multipronged Given we are projects that about But we’re skills projects, of strategy as need we very uncertainty And

So this big area, is and right everything us. area on we’re a it’s in for focus of we can doing your now right question

Paul Coster

question other sorry, one – Just one question. just other

got demand. you’ve strong so obviously And

that markets but into? into or going focus And biogas not are to to it is as they’re some picking meet of that which part sell the market easier lot you’d for on off have address? segments wish. that, as unable less? the easier complexity instance, it market now start to of just a underserved of elsewhere, just view opportunity I after, to where an got for seems your mean Market strong the is You’re deployment also In segments to deploy

Randy Furr

opinion you extremely the – number that’s pursuing at road look today down markets Paul, we’re the my to is the are the this, things of and doing Look, look is at better why we answer, because about importance other down the just road. talk that KR the but important, of we’re years in you XX going

not But much out that in mean, we easier of In despite that Absolutely in path there just I our and of all there’s at And gotten at any have There’s outlook these terms stress, this or to It’s just we into hitting our massive to it there. the pretty quarter. a still It without close have But do know tools? of come look control terms here. is our terms just we’re get equipment, of we they that’s customers a fires or a tell companies midpoint processes, do losing have that pretty with and send we will being going crews more down in going lot an to that’s we’re I – to we can upset. like to not we that do go and than just like our fire we’re not be you, have better to to anything to inspections this is say are acceptances, we the that, and revenue There’s our here. this number, the hurricanes don’t not little happen. there’s that light what people, want the going deal the QX guidance maybe utility are like do more things of going conservative. to tie to or business. and about better better. really to It’s anticipate. Can ins need the just nobody There’s strikes we do more issue. It’s the that ultimately get here up be that. at other going do to more or

quarter are but what of we’re reflected need conservative to boil that’s So use a and QX. we we’ve still even I going all in for better more you what telling think get just gotten it’s into lot better. And to entering the down

Paul Coster

Okay, thank you.

KR Sridhar

taking base are and is important biogas on question really, clean today. understand of thing be We again otherwise [indiscernible] the to some your as do A of in and if and you would fuse load size that electricity load the big to a doing that fuel liability, think emerging a the served think the of it’s biogas segments convert places and get focusing otherwise problem. the following centrifuge carbon zero right what that of future. And it’s you if not provide market not enormous, area things is biogas strategy. a the we Paul And think will are a market the longer-term either but [indiscernible]

years few market. we play important a from a very role So can now, in that

going the market, expense C&I that, not that are delays at specific. C&I are specific. not within market. we I’m and the customer However, walk through specific depending our location They doing And the these of really and are on to circumstances,

top the able it better. segment and further, make in particular up because There’s that to that to a blackout like one the QX, in and and practical it of with QX, periods distracted our QX, that take in those storm perfect go can for explain purposes, short all had our of quarter enough when gets that be we out hurricanes, of enormously. pushed most multiple in fire come to to two catch not like that partners not On we make unfortunately, it’s To you for that. hit time So perfect QX up us with utility out, tie was forest happened and were is customers. into storm here,

percentage diversification, the the different by profiles us That for will are a us Randy convert each our in have our So we as pool, things one segments with as doing, other and diversification things, thing we acting, that are these very creating you international two markets to that we reducing there. look can we the having and quickly that of will get see respect very, address. mentioned we are larger portfolio already to so and

will to committed that, are doing get We there. we

Paul Coster

very you Excellent, thank much.

Operator

question from Oppenheimer. comes Rusch from next Colin Your

Colin Rusch

so guys. much, Thanks

Secure Company, can and the division management important that you’ve partner you. the about the the your an for for Power doing With relationship seen Southern forward you any expectation moves how they’ve been already? is at what change changes within talk

KR Sridhar

than I’m discuss Sure. that. more happy to

grow? long-term CEO are generally it of two first going Our and Lantrip at for he over first Are the clients my Secure. we now to point that has we say the to contact serious, going is the as we to was level, taken of there Mark senior are Power be and

to So changes have say strengthened forward our relationship we further anything, a relationship. I these would and great look if

Colin Rusch

great. And can you approval us Okay, you’re warranty then life assumption give and the both quarter the installs on during and the for then quarter? what third and stack expecting the quarter for service fourth for the pricing for

KR Sridhar

is different discuss with very for up systems quarter has today deploy and the on when But an lifetimes. we depending legacies, remember, life there stack because for out it all by don’t shipped life our service that the is were expected quarter. every life have what different that they going

I tell our cost will if looking And metric what particular in that performing proxy So can you to for. our in color just add us at. that field, if systems at want be more think looking what a you’re service and you’re Randy look area look how to to the you

Colin Rusch

it Thanks I’ll offline much. so Okay. take guys.

KR Sridhar

Okay.

Randy Furr

Colin. you, Thank

Operator

Afzal is next Tahira from Your from KeyBanc. question

Tahira Afzal

Hi folks.

Randy Furr

Hi Tahira.

KR Sridhar

Hi Tahira.

Tahira Afzal

companies even is several from all today, on guess to died today be going one reported question From at have I’m construction that is construction I seems come. it the electricians and first to neighbor, my side. years the like

a you’re given quarter mitigating that of versus really XX% strategies. using we more guys and looking But trend in are risk, building. and maybe the fourth myself consensus be XX% which elements a benchmark, year-on-year potential year-on-year might like rate as So is I should indicating be at sort good growth that sort of at you acceptance know

Randy Furr

any power really I little – at makes outlook an think than change Yes. necessarily look, the I is you demand, has you it’s But a of quarter very and a to for wouldn’t product, the a resilient it problem the in question. Yes, have earlier, said we provide more The we think great value very, provide provide Bloom Look, our love bit I I clean, have time. certainly question. don’t money. it’s it you one we future. going expectations We great compelling reliable, proposition, your Bloom in save Look, very if about it, a we’re simple. challenges.

job. So what’s a operations that we great folks the terrific set great a challenges? The is of thing do have

one have quality here, and years that of delay just In can fact, been think on been phenomenal. X.X-plus delivery my we has I

So that. team the just systems last in from site, once ops really hats our a commission. arrive challenges hit I shipped obviously a great off once field, our the mentioned. to they’re getting we that just And part to not The that that come for down they it’s

inspection just is have Although inspectors to getting do to something that that point. sometimes, later it’s comes due something that or an But there else. generally,

timely demand. what So we we’re We small we need a manner. do resources construction very look, get a a player in the industry this the large have industry, able to in done of should get be to

for significantly clearly, your that’s the and the field, the these expectations into and bottleneck of in I the be growth. sites again, factor the getting Bloom But company wouldn’t off and construction So go change installed in limiting terms today. will

KR Sridhar

increasing talking said, simply can get installation what acknowledge as busy, we they’re stuff of that some things like also add great and to have fieldwork of to We construction we reducing about, that’s electricians, means things facilitating do much Randy, but contractors, question. at all doing amount thinking a amount is are So have as one including that the consistently construction that that. we of right? all finding that the kind you’re And you that of Bloom, that and the a of talent should and that we be thankful Bloom a plumbers, Bloom

an of a the or amount as has field all to to be actual electrician the our plumber low So in connect can. we as systems time is

to technology, the the we macro somebody that change for we of needed and do this is amount of time, the while tag economics, So engineering touch time, buy field. reduce in can’t can the

are to trying address So that’s how we it.

solvers, problem solve to these out creative are figure We to problems. trying ways are we

Tahira Afzal

perhaps. follow-up, pretty slightly your might blip Thank That’s it in trajectories? you. I by should was be cash a resetting free we X as Or disappointing. a obviously flow helpful. quarter guess exactly cash this seems be quarter flow the Randy, free comments our

Randy Furr

mean it $X to wasn’t Look, working that million pointed down little mean that’s was a bit. little I off acceptances acceptances, more a I free cash from take materially midpoint’s it from capital a was go over done. we out, to – little less to of get it XXX going XXX than to bit we’re negative as flow. going And

here. from that that time – It’s don’t outlook a opinion, sites under We just we deal after my said, So quickly basis. different of very is or an that we sell shouldn’t But in should of variety as there. a to timing a With there’s money directly you number a the it of If That’s net customer time. comes PPA, commissioned. really in it that’s do than to. buying anything, view, it’s a leased are right in we not be on that concern. XX vast call my customer, comes majority unusual honestly, that models nothing have a the kind CapEx give a provide we

capital to from our cash be generating should in but could working growth. we our business So a – long-term this trend, enough quarter-to-quarter on fund flow vary cash

And that. a pretty of quarter’s cash. shouldn’t you. a Thank user you good So be think last see I us big example of

Tahira Afzal

it. Randy. Thank very Got you much,

Randy Furr

Thank you.

Operator

next of the question from Your America. comes line Bank of Julien Dumoulin-Smith of

Your line open. is

Unidentified Analyst

well longer-term. Eric to that about you growth actually is this how touch rate revenue deployment given on the the wanted for of cadence both and previous revenue We as beyond Hi, for as growth about upon XX% expressed primarily XXXX, just Julien. think

the beyond harboring comes do it and do you terms it cost As in what safe Thanks. you – have a assume XXXX, if beyond and about reductions of level ITC from you particularly how plan think versus that? you through XXXX guys how

Randy Furr

breaking the outlook my do look that to Eric, I a cannot more going best without than I’m of job. quarter Yes. giving time. of kind answering one rule at

you’ll next more the look life power future. think – I It’s is the new in product not we’re XX% to going our the there’s if of can’t in way per down. years, and Bloom. it’s to script, in I of that in is to big And product. if I prior minimum are this our of see those just mentioned emphasize normal footprint, at continue function. my that’s big a which a There product a Bloom. generation footprint, I been honestly, have, a down it the out cost a it’s there, It’s of XX% be drive at you between lot enough. and if essentially mentioned, step script. – that of – it’s function the time in each same going to north a months look, you But generation how next cost say build. my is emphasize at that that XX annum And goal three to of here So – XX you months, can’t terms which I produce months, out step there price look product XX of the things And down that same we here, of is somewhere cost comes it’s

In There’s be be moving than it there newer parts there’s system fact fewer I’m in generation. parts, sorry. because in moving the There’s will think current less fewer the we will parts.

a function. it’s that huge more given So power, XX% step

So we going And what long-term do cost to innovate continue I our capacity as tailwind been to to moves as down. that’s further the able our help for on mentioned earlier, very cost with to ability via on up, see drive that and the utilization down past. consistent we’ve

enter will that margins. make down, come and – to down additional cost targeted our enable us our As markets

we in addition margins make the to let that, will markets higher it In to us today. serve

time targets So We’ve those achievable. XX% and and time We XX% from think we margin. of growth is targets to think of will still of vary both – long-term quarter-to-quarter. the revenue long-term It set are pretty positive.

For example, growing revenue XX%.

there’s percentage in we a do the either. bit there’s challenging business of that a cost install because on install If you’re might growth and increasing revenue in make year-over-year no Korea of Korea, that little the no

slight long-term would long-term, So profit there’s to impact, achieve our the be the it opportunities improved but won’t optimistic a be same. to gross we’re the fact the margin, that going margin, be for But here. still us in tailwind it might goals

KR Sridhar

improving in our addition capability remember And systems. then that to we also of everything the Randy said, are

years for solution. for XX% that Today, less microgrid than fleet example, is three over resiliency. solution which microgrid started the we deployed of ago our So is

more to where we market. of Electrification further is new a of create automation more – to in that resiliency a huge world a post-climate important, be sorry, market. change going brand-new transportation a it’s and going electrification move cities inner As becomes into is demand

market are there we our as are that becomes going existing break within our our more sorry, segments be come existing market increase, segments there costs to expensive. resilient go the are down – even geographies, as less grid going So new – as and into and capabilities to and

Unidentified Analyst

Great. correctly. expecting international, shift on steps But understanding I’m just towards the also could to more ITC if you implications you Are discuss growth the as down.

Randy Furr

Look, Yes, a on our absolutely. is cost faster down curve.

just And even past. do – You it if in been to XX% we’ve only math the reduced the we down, take to do able significantly what continue were here. you to cost

given at that a to roads to rolls coming has And we before we’ll a off. that our see mind that down, in it’s the way certainly fact Bear mitigate generation it a have we once able impact. on able ITC be going our at to we’re that a function step the You’ll reduce new off cost product all a be cost ITC faster that out to there. not think trends of

our growth that’s achieve to targeted confident We or margins. are ability not to that rate going overall impact

Unidentified Analyst

so offset opportunity by more ITC okay. than thinking to the down, I’m stepping of granted the kind Right. improve incremental but, economics rather

Operator

this over the back are time. presenters. the to further turn There questions no at call I’ll

KR Sridhar

we really this our here Thank a you reliable, and you that’s see at you in with sure platform. participating be touch you, you, energy Thank are you distributor resilient meetings. at day, appreciate you opportunity, and time. mission of at next other And our look, many thank a of for you provided being separates any is or I’m with in the And the cost always-on the very to from the we much. will the digital all about first Bloom one excited clean, time. that And so we affordable the We of before us of Hope all. in world, end electricity call taking in electricity call. what always-on taking appreciate

Randy Furr

Thanks, everyone.

Operator

call. today’s concludes conference This

now may You disconnect.