Fluence Energy (FLNC) Q4 2022 earnings summary

Executive summary

• FY22 revenue reached a record $1.199B, up 76.1% YoY; Q4 revenue was $442M, the highest quarterly total to date, with positive GAAP and adjusted gross margins in the quarter.

• Deployed storage capacity doubled to 1.8 GW; contracted backlog was 3.7 GW for products and 2.0 GW for services, with a 37.7 GW gross global pipeline.

• Priorities include profitable growth, regionalized and diversified supply, SaaS expansion, disciplined capital spending, and contract underwriting.

Financial highlights

• FY22 revenue was $1,198.6M vs. $680.8M in FY21; product sales expansion in the Americas and EMEA and customer change orders drove growth.

• GAAP gross loss was $62.4M, with a negative 5.2% margin, improving from a $69.1M loss and negative 10.2% margin in FY21.

• Net loss widened to $289.2M from $162.0M; adjusted EBITDA loss was $64.7M vs. $119.6M in FY21.

• FY22 adjusted gross profit was a loss of $2.9M and adjusted margin was negative 0.2%; FY21 adjusted margin was 2.2%.

• Operating cash outflow was $282.4M; free cash flow was negative $290.3M, including $7.9M in PP&E purchases.

Outlook and guidance

• Targeting multi-year profitable revenue growth above 30% and adjusted EBITDA breakeven in FY24.

• IRA incentives, including standalone storage tax credits and domestic battery manufacturing credits, are expected to support demand; realized benefits remain subject to implementation guidance and execution.

• Digital applications and services are expected to expand meaningfully over five years and contribute increasingly to bottom-line growth.

• Restructuring approved in November 2022 will shift certain high-cost-location roles to India; completion expected by FY23-end, with costs not expected to be material.