01—Abstract
Summary
Summary of the 10-K filed March 22, 2019. Cited figures are marked; the original filing is the authoritative source.
Bloom Energy Corporation's (BE) 2018 10-K filing reveals significant revenue growth of 97.4%, reaching $742 milliona, driven by a substantial increase in product acceptances and the reinstatement of the Investment Tax Credit (ITC).
Despite this top-line growth, the company reported a net loss of $241.8 millionb for the year, though this was an improvement from the prior year's net loss of $262.6 million. The company's strategy relies heavily on financing solutions like Power Purchase Agreements (PPAs) to facilitate customer adoption of its fuel cell technology. The reinstatement of the ITC in February 2018 significantly boosted billings and revenue, but also led to increased product costs due to supplier repayments.
Key operational highlights include a 30.1% increase in product accepted (809 systems) and a growing service revenue stream from its expanding installed base. However, the company continues to invest heavily in R&D and sales/marketing, leading to a significant increase in operating expenses, particularly driven by stock-based compensation following its IPO. The company ended 2018 with $220.7 millionc in cash and cash equivalents, indicating a strong liquidity position, but also carrying substantial debt of $741.3 million, with significant covenants that could impact future financial flexibility.
02—Key points
Key Highlights
- Total revenue grew by 97.4% to $742 million in 2018, compared to $376 million in 2017, driven by increased product acceptances and the reinstatement of the Investment Tax Credit (ITC).
- The company reported a net loss of $241.8 million in 2018, an improvement from $262.6 million in 2017, indicating progress towards profitability.
- Product acceptances increased by 30.1% to 809 systems in 2018, reflecting growing market adoption of Bloom Energy Servers.
- Operating expenses increased significantly by 94.6% to $270.9 million in 2018, largely due to a substantial rise in stock-based compensation following the IPO, impacting profitability.
- The company ended 2018 with $220.7 million in cash and cash equivalents, providing a solid liquidity foundation, while total debt stood at $741.3 million.
- The reinstatement of the ITC in February 2018 provided a significant boost to billings and revenue but also increased product costs due to one-time supplier repayments.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2018, Bloom Energy Corp lost $0.43.
- Revenue$632.6M100.0%
- Cost of revenue−$526.9M83.3%
- Gross profit$105.8M16.7%
- Operating costs−$270.8M42.8%
- Operating income−$165.0M26.1%
- Interest, other & tax−$108.5M17.2%
- Net income−$273.5M43.2%
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 22, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $632.65M$365.62M | +73.0% |
| Cost of Revenue | $526.90M$381.93M | +38.0% |
| Gross Profit | $105.75M-$16.31M | +748.3% |
| R&D Expenses | $89.14M$51.15M | +74.3% |
| Operating Expenses | $270.76M$138.76M | +95.1% |
| Operating Income | -$165.01M-$155.07M | −6.4% |
| Interest Expense | $97.02M$112.04M | −13.4% |
| Net Income | -$273.54M-$276.36M | +1.0% |
| EPS (Basic) | $-5.14$-26.97 | +80.9% |
| Shares Outstanding (Basic) | 53.27M10.25M | +419.8% |
| Shares Outstanding (Diluted) | 53.27M10.25M | +419.8% |
05—Questions
Frequently Asked Questions
What was Bloom Energy's financial performance in 2018?
In 2018, Bloom Energy reported a significant increase in total revenue, up 97.4% to $742 million, driven by a substantial rise in product acceptances and the reinstatement of the Investment Tax Credit (ITC). Despite this revenue growth, the company incurred a net loss of $241.8 million. However, this represented an improvement compared to the $262.6 million net loss in 2017. Operating expenses also increased significantly, particularly due to stock-based compensation following the IPO.
How did the Investment Tax Credit (ITC) impact Bloom Energy's financials?
The reinstatement of the ITC in February 2018 had a positive impact on Bloom Energy's billings and revenue, contributing $171.1 million to total revenue in 2018, including a one-time retroactive benefit for 2017 acceptances. However, it also led to increased product costs due to repayments to certain suppliers for previously negotiated contractual discounts.
What is Bloom Energy's strategy for customer adoption and financing?
Bloom Energy's strategy involves offering flexible financing options, including direct purchase, traditional leases, managed services, and Power Purchase Agreement (PPA) programs. The PPA programs, particularly Third-Party PPAs, have become the predominant model, allowing customers to purchase electricity without upfront capital investment, thus expanding Bloom Energy's addressable market. The company relies on financing partners to facilitate these deployments.
What are the main risks highlighted in the 10-K filing?
Key risks include the emerging nature of the distributed generation market and potential lack of widespread acceptance, lengthy sales and installation cycles, reliance on customer financing and financing partners, competition from traditional and alternative energy sources, potential disruptions in manufacturing and supply chain, dependence on government incentives which can change, and significant stock-based compensation expenses impacting profitability. The company also faces risks related to its substantial debt and the potential for future losses.
06—Continue