Fluence (FLC) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was $20.1M, down 34% year-over-year due to Ivory Coast project delays and China weakness, but core business revenue and SPS plus recurring revenue grew 14% year-over-year, reaching $19.2M.

• Gross margin improved to 30.6% in H1 2024, up 8.3 percentage points from H1 2023.

• Backlog at Q2 2024 was $96.6M, up 83% year-over-year and 5.7% sequentially, with over 450 projects in the pipeline.

• Strategic focus on higher-margin SPS and recurring revenue, with new leadership and improved operational efficiency.

• EBITDA loss was $3.6M in H1 2024, mainly due to project delays and China slowdown.

Financial highlights

• H1 2024 revenue was $20.1M, down $10.5M year-over-year, but core business revenue grew by $2.2M (13-14%) when excluding the Ivory Coast project.

• SG&A and R&D expenses decreased by approximately 19-20% in H1 2024 compared to H1 2023, resulting in $2.4M in cost savings.

• Cash at quarter-end was $7.9M, with $7.8M in deposits, mostly as collateral.

• Negative cash flow of $6.3M in Q2, with expectations for positive operating cash flow in H2 2024.

• Debt repayments totaled $3.6M in H1 2024; new $15M revolving credit facility secured.

Outlook and guidance

• FY2024 revenue guidance revised to $70–$75M, with EBITDA expected to be break-even due to Ivory Coast and China delays.

• Revenue in H2 2024 expected to more than double H1 2024, with $50–$60M in new orders anticipated.

• Core business units forecasted to grow revenue by approximately 40% for full year 2024 versus 2023.

• Backlog and YTD revenue cover 79-84% of revenue guidance for 2024.

• Significant improvement in performance expected in H2 2024 and 2025, with 2026 focused on core business growth post-Ivory Coast.