Bloom Energy Corporation — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022; filed November 3, 2022. Bloom Energy sells and services fuel-cell-based power systems and related electricity offerings.
Financial performance
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $292.3 million | $207.2 million | $736.5 million | $629.7 million |
| Gross profit | $50.9 million | $36.9 million | $76.9 million | $128.9 million |
| Gross margin | 17% | 18% | 10% | 20% |
| Operating loss | $52.6 million | $43.9 million | $220.4 million | $101.0 million |
| Net loss | $60.4 million | $56.7 million | $264.3 million | $144.9 million |
| Net loss per share, basic and diluted | $0.31 | $0.30 | $1.41 | $0.76 |
- Q3 revenue rose 41%, principally on 65.9% growth in product revenue; product acceptances increased 64.6%. Nine-month revenue grew 17%, with product revenue up 25.9%.
- Q3 gross profit improved, mainly from higher product gross profit. Nine-month gross profit fell 40%, substantially reflecting a $44.8 million impairment/write-off of old Energy Servers and weaker service gross profit.
- Operating expenses increased 28% in Q3 and 29% year to date, reflecting investment in R&D, business development, staffing and outside services.
- Cash and cash equivalents were $492.1 million at quarter-end; restricted cash was an additional $177.2 million. Nine-month operating cash use was $168.5 million, investing cash use $80.9 million, and financing cash provided $305.2 million.
- Inventory rose to $254.9 million from $143.4 million at December 31, 2021. Accounts payable was $120.4 million; current liabilities totaled $392.7 million.
- Debt at carrying value totaled $483.4 million ($287.5 million recourse and $195.9 million non-recourse); scheduled principal was $492.2 million. Current debt carrying value was $28.7 million. The company reported compliance with financial covenants.
Changes, outlook and notable items
- In August, Bloom completed a public offering of 14.95 million Class A shares for net proceeds of $371.5 million. SK ecoplant had notified the company it would exercise an option to buy 13,491,701 additional shares for approximately $311 million net; payment was due after the applicable date and HSR clearance, so the proceeds were not yet received by September 30.
- Management said existing cash and expected operating cash flows should meet operating and capital needs for at least the next 12 months. No numerical revenue or earnings guidance is provided; management expects product and service revenue to grow.
- The PPA IIIa repowering generated $44.8 million of asset impairment and a $4.2 million debt-extinguishment loss in the nine-month period. It also affected product and installation revenue and costs. Q3 product revenue included $8.7 million related to changes in contract consideration tied to investment tax credit rates.
- The Inflation Reduction Act may create relevant clean-energy and manufacturing incentives; the company was assessing their business impact. Rising rates, inflation, foreign exchange movements, natural-gas costs, labor shortages, manufacturing ramp-up and supply-chain/logistics pressures could affect demand, costs, delivery and margins. Management cited longer lead times and higher costs, although no component shortages had occurred to date.
- Revenue concentration was significant: two customers represented approximately 54% and 26% of Q3 revenue. Asia Pacific represented 58% of Q3 revenue. The company also reported $146.3 million of receivables derecognized through non-recourse factoring arrangements at quarter-end.
- Contingencies include securities litigation, a supplier intellectual-property dispute and litigation with the City of Santa Clara over installation permits. Management said outcomes and potential losses could not be estimated for certain matters; delayed permits could jeopardize customer contracts. Risk factors were reported as unchanged from the 2021 Form 10-K.
Important facts for investors to verify
- Whether the expected SK ecoplant share-purchase proceeds were received, and the resulting dilution and cash position.
- Whether operating cash burn, inventory growth and receivables factoring remain manageable as manufacturing capacity expands.
- Whether product growth translates into sustainable gross-margin improvement, given weaker year-to-date margins and service losses.
- The timing, cost and production impact of the Fremont facility build-out, labor availability and supply-chain constraints.
- The effects of PPA IIIa repowering and IRA incentives on future reported revenue, costs and cash flows.
- Developments in customer concentration, permit-related litigation, securities litigation and the Plansee/GTP dispute.