Fluence Energy (FLNC) Q3 2024 earnings summary

Executive summary

• Q3 revenue reached $483.3 million, surpassing expectations by 20%, with adjusted gross margin of 17.5% and adjusted EBITDA of $15.6 million, marking a return to profitability and four consecutive quarters of double-digit margins.

• Achieved record $1.3 billion quarterly order intake, raising backlog to $4.5 billion, with pipeline expanding to $20.4 billion and annual recurring revenue (ARR) reaching $80 million; ARR guidance raised to ~$100 million by year-end.

• Free cash flow for the first nine months was $64.3 million, with cash and equivalents at $513 million and total liquidity exceeding $1 billion after replacing the $400 million ABL facility with a $500 million revolver.

• U.S. domestic content strategy advanced with battery module production set for late September 2024 and major project completions, including the world's third largest battery storage facility.

• Expanded digital and service capabilities with a new center in India, supporting global growth and customer value.

Financial highlights

• Q3 revenue was $483.3 million, down 10% year-over-year, but gross profit margin improved to 17.2% from 4.1% and adjusted gross margin reached 17.5%.

• Adjusted EBITDA for Q3 was $15.6 million, up from a loss of $27.5 million in the prior year quarter.

• Free cash flow for the nine months ended June 30, 2024 was $64.3 million, a turnaround from negative $162.4 million in the prior year period.

• Operating expenses (excluding stock comp) were $73 million in Q3, 15.1% of revenue, with R&D and sales/marketing up year-over-year.

• Order intake for Q3 was $1.3 billion, with 11 consecutive quarters of order intake outpacing revenue recognized.

Outlook and guidance

• Fiscal 2024 revenue guidance narrowed to $2.7–$2.8 billion, down from $2.7–$3.3 billion, with most shortfall shifting to fiscal 2025 due to project delays and customer postponements.

• Fiscal 2025 revenue growth outlook reaffirmed at 35%–40% over the original 2024 guidance midpoint of $3 billion.

• ARR guidance raised to $100 million by end of fiscal 2024, up from $80 million.

• Gross profit margin for FY24 expected at the high end of the 10%–12% range; long-term outlook remains at 10%–15%.

• 100% of Q4 revenue is covered by backlog, with 46% of required Q4 deliveries already shipped or in transit.