10-QPeriod: Q3 FY2019

Bloom Energy Corp Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 14, 2019For Securities:BE

Summary

Bloom Energy Corporation (BE) reported a net loss of $34.9 million for the third quarter of 2019, a significant improvement from the $78.6 million net loss in the same period of the prior year, driven by strong revenue growth and improved gross margins. Total revenue increased by 22.8% year-over-year to $233.5 million, primarily fueled by a 45.3% increase in product revenue, indicating robust demand and successful execution in product deliveries. The company demonstrated significant progress in cost management, with product costs per kilowatt decreasing by 15.0%, leading to a substantial improvement in gross profit and a positive gross margin of 22.9% for the quarter, compared to 12.3% in the prior year. Despite the operational improvements, the company continues to invest heavily in research and development and sales and marketing, leading to increased operating expenses. However, the PPA II upgrade transaction resulted in a significant write-off and decommissioning charges, impacting the cost of revenue in the current period. The company ended the quarter with $226.5 million in cash and cash equivalents and a solid backlog, positioning it for continued growth, though liquidity remains a key focus given ongoing investments and debt obligations.

Financial Highlights

46 data points
Beta

Revenue

$224.31M

19.0% Gross Margin

Net Income

-$51.75M

-23.1% Net Margin

EPS (Diluted)

$-0.44

Total Assets

$1.36B

Cash & Equivalents

$226.50M

Free Cash Flow

$21.80M

Financial Statements
Beta
Revenue$224.31M
Cost of Revenue$181.58M
Gross Profit$42.73M
R&D Expenses$23.39M
Operating Expenses$77.64M
Operating Income-$34.91M
Interest Expense$21.32M
Net Income-$51.75M
EPS (Basic)$-0.44
Shares Outstanding (Basic)116.33M

Key Highlights

  • 1Total revenue increased 22.8% to $233.5 million in Q3 2019 compared to Q3 2018.
  • 2Product revenue surged 45.3% to $182.6 million in Q3 2019 compared to Q3 2018, demonstrating strong demand.
  • 3Gross profit significantly improved to $53.5 million in Q3 2019, up from $23.4 million in Q3 2018, with gross margin expanding to 22.9% from 12.3%.
  • 4Product costs per kilowatt decreased by 15.0% in Q3 2019 compared to Q3 2018, reflecting successful cost reduction efforts.
  • 5Operating expenses decreased by 12.7% to $78.1 million in Q3 2019 compared to Q3 2018, mainly due to lower stock-based compensation.
  • 6Net loss attributable to common stockholders narrowed to $34.9 million ($0.30 per share) in Q3 2019, an improvement from $78.6 million ($0.97 per share) in Q3 2018.
  • 7The company ended the period with $226.5 million in cash and cash equivalents, indicating sufficient liquidity for near-term operations.

Frequently Asked Questions

In Q3 2019, Bloom Energy reported total revenue of $233.5 million, a 22.8% increase year-over-year. Product revenue was a key driver, up 45.3% to $182.6 million. The company also showed significant improvement in profitability, with gross profit reaching $53.5 million and a gross margin of 22.9%, a substantial increase from 12.3% in Q3 2018. The net loss attributable to common stockholders narrowed to $34.9 million ($0.30 per share) from $78.6 million ($0.97 per share) in the prior year's quarter.

The primary driver of revenue growth was a significant increase in product acceptances, up 46.6% year-over-year for the three months ended September 30, 2019. This growth was supported by demand from backlog orders, including the PPA II upgrade of Energy Servers, and expansion in the Asia Pacific region. The company also benefited from a higher average selling price for its product acceptances during the quarter.

Bloom Energy successfully reduced its product costs per kilowatt by 15.0% in Q3 2019 compared to the prior year, reflecting ongoing cost reduction efforts related to materials and improved manufacturing processes. Furthermore, total operating expenses decreased by 12.7% year-over-year, largely due to a reduction in stock-based compensation expenses. These factors contributed to a substantial improvement in gross profit and margin.

As of September 30, 2019, Bloom Energy had $226.5 million in cash and cash equivalents. While the company believes this is sufficient to meet its operating and capital cash flow requirements for at least the next 12 months, it faces a substantial long-term debt maturity of $312.3 million due in December 2020. The company is actively evaluating options to refinance this debt, and future capital needs are a key consideration given ongoing investments in growth.