10-QPeriod: Q2 FY2019

Bloom Energy Corp Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 14, 2019For Securities:BE

Summary

Bloom Energy Corporation's (BE) Q2 2019 filing shows a significant increase in total revenue, primarily driven by a 65.6% rise in product revenue due to higher unit sales and a slightly improved average selling price. This growth was supported by a 49.7% increase in product acceptances compared to the prior year's quarter, indicating successful market penetration and operational scaling. Despite revenue growth, the company reported a net loss of $67.2 million for the quarter, an increase from the previous year's net loss of $50.2 million, primarily due to substantial increases in operating expenses, particularly in Research & Development and Sales & Marketing, heavily influenced by increased stock-based compensation following the IPO. The company's cash position improved, with cash and cash equivalents increasing to $308 million from $220.7 million at the end of 2018, supported by IPO proceeds, though significant debt remains.

Financial Highlights

46 data points
Beta

Revenue

$200.33M

14.2% Gross Margin

Net Income

-$81.91M

-40.9% Net Margin

EPS (Diluted)

$-0.72

Total Assets

$1.41B

Cash & Equivalents

$308.01M

Free Cash Flow

$101.79M

Financial Statements
Beta
Revenue$200.33M
Cost of Revenue$171.98M
Gross Profit$28.35M
R&D Expenses$29.77M
Operating Expenses$91.63M
Operating Income-$63.28M
Interest Expense$22.72M
Net Income-$81.91M
EPS (Basic)$-0.72
Shares Outstanding (Basic)113.62M

Key Highlights

  • 1Total revenue increased by 38.4% year-over-year to $233.8 million, driven by a significant rise in product revenue.
  • 2Product acceptances increased by 49.7% year-over-year to 271 systems (in 100kW equivalents), demonstrating strong sales execution and demand.
  • 3Product costs per kilowatt accepted decreased by 12.6% year-over-year, reflecting ongoing cost reduction efforts and manufacturing efficiencies.
  • 4Installation costs per kilowatt accepted decreased significantly by 68.1% year-over-year, likely due to a higher mix of international installations where Bloom Energy does not incur installation costs.
  • 5Operating expenses more than doubled year-over-year, increasing by 141.4% to $91.8 million, largely due to a substantial increase in stock-based compensation expenses post-IPO.
  • 6Net loss widened to $67.2 million for the quarter, compared to a net loss of $50.2 million in the prior year's quarter, impacted by increased operating expenses.
  • 7The company reported $308.0 million in cash and cash equivalents as of June 30, 2019, an increase from $220.7 million at the end of 2018, providing a more comfortable liquidity position.

Frequently Asked Questions

Total revenue increased by 38.4% to $233.8 million for the three months ended June 30, 2019, compared to $168.9 million in the same period of 2018. This growth was primarily driven by a significant increase in product revenue, up 65.6%, supported by a 49.7% rise in product acceptances.

Bloom Energy reported a net loss of $67.2 million for the quarter, an increase from the $50.2 million net loss in the prior year's quarter. This widening loss was primarily due to a significant increase in operating expenses, particularly in R&D, Sales & Marketing, and G&A, which more than doubled year-over-year. A substantial portion of this increase was attributed to higher stock-based compensation expenses following the company's IPO.

The company is showing progress in reducing its cost structure. Product costs per kilowatt accepted decreased by 12.6% year-over-year, reflecting ongoing cost reduction efforts. Installation costs per kilowatt accepted saw a significant decrease of 68.1% year-over-year, largely due to a higher mix of international installations where Bloom Energy doesn't incur direct installation costs.

Bloom Energy's cash and cash equivalents increased to $308.0 million as of June 30, 2019, up from $220.7 million at the end of 2018. The company reported total debt of $668.2 million as of June 30, 2019, with $405.8 million being recourse debt. While the IPO proceeds improved liquidity, the substantial debt level remains a key financial consideration.

The company completed a significant transaction related to its PPA II project in June 2019, involving the sale of a majority interest to SPDS, which led to the deconsolidation of PPA II. This transaction included the sale of new energy servers and the repurchase and write-off of older generation servers, impacting cost of revenue and property, plant, and equipment.