10-QPeriod: Q3 FY2023

Bloom Energy Corp Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 8, 2023For Securities:BE

Summary

Bloom Energy Corporation (BE) reported its third-quarter 2023 financial results, showing a significant increase in total revenue, up 36.9% year-over-year to $400.3 million. This growth was primarily driven by a substantial 43.0% increase in product revenue, reaching $305.0 million, indicating strong demand for its Energy Servers. Despite the revenue growth, the company experienced a net loss of $168.1 million for the quarter, compared to a loss of $60.4 million in the same period last year. This widened loss is largely attributable to a significant increase in the cost of electricity revenue, driven by a $123.7 million impairment charge related to the PPA V Upgrade, and increased interest expenses associated with recent debt issuances. Financially, Bloom Energy ended the quarter with $557.4 million in cash and cash equivalents, bolstered by recent financing activities including the issuance of $632.5 million in 3% Green Convertible Senior Notes. The company also completed the conversion of Series B redeemable convertible preferred stock into Class A common stock, strengthening its equity position. Despite the ongoing net losses, management believes its current cash position and expected operating cash flows are sufficient to meet its needs for the next 12 months. The company is also actively managing its cost structure, including a recently announced restructuring plan aimed at optimizing operations and improving margins.

Financial Highlights

48 data points
Beta

Revenue

$400.27M

-1.3% Gross Margin

Net Income

-$168.08M

-42.0% Net Margin

EPS (Diluted)

$-0.80

Total Assets

$2.38B

Cash & Equivalents

$557.38M

Free Cash Flow

-$154.50M

Financial Statements
Beta
Revenue$400.27M
Cost of Revenue$405.48M
Gross Profit-$5.21M
R&D Expenses$35.13M
Operating Expenses$98.49M
Operating Income-$103.71M
Interest Expense$68.04M
Net Income-$168.08M
EPS (Basic)$-0.80
EPS (Diluted)$-0.80
Shares Outstanding (Basic)210.93M
Shares Outstanding (Diluted)210.93M

Key Highlights

  • 1Total revenue increased by 36.9% year-over-year to $400.3 million, driven by strong product revenue growth.
  • 2Product revenue surged by 43.0% to $305.0 million, reflecting increased demand and higher pricing.
  • 3Net loss widened to $168.1 million from $60.4 million in the prior year period, significantly impacted by a $123.7 million impairment charge related to the PPA V Upgrade and higher interest expenses.
  • 4Cash and cash equivalents increased to $557.4 million as of September 30, 2023, supported by recent debt issuances and equity financing.
  • 5The company issued $632.5 million in 3% Green Convertible Senior Notes in May 2023, strengthening its liquidity.
  • 6Bloom Energy announced a restructuring plan in September 2023 to optimize operational focus, reduce costs, and improve margins.
  • 7The company reported a significant increase in Cost of Electricity Revenue due to an impairment charge related to Energy Servers in the PPA V Upgrade.

Frequently Asked Questions

The primary driver of Bloom Energy's increased revenue was a substantial rise in product revenue, which grew by 43.0% year-over-year to $305.0 million. This growth was fueled by higher product acceptances, improved pricing, and revenue from new Energy Servers, including those related to the PPA V Upgrade.

The significant increase in net loss was primarily due to a $123.7 million impairment charge related to Energy Servers as part of the PPA V Upgrade, which heavily impacted the cost of electricity revenue. Additionally, higher interest expenses, stemming from recent debt issuances like the 3% Green Convertible Senior Notes and the expensing of commitment assets related to SK ecoplant's Series B preferred stock conversion, also contributed to the widened loss.

Bloom Energy ended the quarter with a strong cash position of $557.4 million. This was bolstered by raising $613.0 million in net proceeds from the issuance of 3% Green Convertible Senior Notes in May 2023 and receiving $311.0 million in proceeds from SK ecoplant for Series B redeemable convertible preferred stock. The company stated that its current cash and expected operating cash flows are anticipated to be sufficient for at least the next 12 months. Furthermore, the company announced a restructuring plan to optimize costs and margins.

The PPA V Upgrade resulted in a significant impairment charge of $123.7 million recognized in the cost of electricity revenue, which negatively impacted gross profit and net income. While the sale of new Energy Servers generated revenue and corresponding cost of goods sold, the impairment of the old Energy Servers was the dominant financial consequence for this quarter's results.