Energy Vault Holdings, Inc. — FY 2022 Form 10-K
Reporting period: Year ended December 31, 2022. This is an annual filing; it does not provide a separate fourth-quarter results summary. Energy Vault became a public company through its February 2022 merger with Novus. The company develops and sells grid-scale battery, gravity, green-hydrogen and hybrid energy storage systems, together with energy management software. 2022 was its first year reporting product revenue; the year-earlier period had no revenue.
Key financial metrics
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $145.9 million | $0 |
| Gross profit / margin | $59.3 million / 40.6% | Not applicable |
| Operating loss | $63.1 million | $29.5 million |
| Net loss | $78.3 million | $31.3 million |
| Adjusted EBITDA (non-GAAP) | $(11.4) million | $(24.0) million |
| Cash used in operating activities | $23.3 million | $22.1 million |
| Cash used in investing activities | $13.3 million | $1.2 million |
| Cash provided by financing activities | $217.8 million | $116.4 million |
FY 2022 revenue comprised $85.6 million from building and transferring storage products, $58.5 million from intellectual-property licensing, and $1.8 million from other services. Two customers accounted for 57% and 35% of revenue, respectively. R&D and general and administrative expenses rose substantially, to $50.1 million and $56.9 million, respectively; stock-based compensation was $41.1 million.
At year-end, cash and cash equivalents were $203.0 million and restricted cash was $83.1 million, primarily securing letters of credit. Total current assets were $390.1 million and current liabilities were $125.3 million. The company reported minimal warrant and finance-lease liabilities, rather than material conventional borrowings. It said cash on hand was expected to fund operating activities for at least the next 12 months. Non-cancellable purchase obligations were approximately $50.2 million.
Material changes and business developments
- Revenue began in 2022, principally from battery-system projects and gravity-storage licensing. The company reported $540.1 million of bookings (1,635 MWh) and $331.0 million of backlog/remaining performance obligations at year-end. Management expected to recognize most backlog within 12 months; the filing cautions that timing, cancellation and collection are uncertain.
- The merger and PIPE generated $235.9 million in gross proceeds and $191.1 million in net cash proceeds after transaction costs. Merger-related costs included $20.6 million expensed in 2022.
- Energy Vault signed battery project contracts with Jupiter Power, W Power and NV Energy, with completion dates principally expected in 2023. It also entered a PG&E tolling arrangement for a battery-plus-green-hydrogen system, with construction anticipated in late 2023 and commercial operation expected by the second quarter of 2024.
- The Atlas licensing agreement generated $50.0 million in licensing fees, collected by year-end. Energy Vault also contributed $25.0 million to Atlas, refundable when Atlas’s first gravity-storage project reaches substantial completion, subject to potential performance-related adjustments.
Outlook, risks and unusual items
The filing gives no quantified revenue, earnings or cash-flow guidance. Management expects continued investment, operating losses and cash use for the foreseeable future. Commercialization remains early: the company had built one gravity-storage demonstration unit, which was dismantled in September 2022, and had not yet deployed a fully operational customer system as of the filing. The EMS platform was described as not yet fully functional.
- Execution and adoption: Long sales and construction cycles, customer financing, permitting, grid interconnection, project delays, cost overruns and whether non-binding pipeline opportunities convert to orders could affect results. The company relies on third-party EPC firms and suppliers.
- Customer and collection concentration: Two customers represented 92% of FY 2022 revenue; two customers held 94% of year-end accounts receivable. Extended payment terms also leave licensing cash receipts spread over future years.
- Liquidity and commitments: Most restricted cash supports letters of credit; $82.9 million of letters of credit were outstanding at year-end. The $25.0 million Atlas contribution depends on project completion and performance for repayment.
- Controls: Management identified a material weakness in revenue controls related to evaluating an international licensing customer’s ability to pay and concluded disclosure controls were ineffective. Remediation was underway but not complete; the auditor did not express an opinion on internal-control effectiveness. The financial-statement audit opinion was unqualified.
- Other risks and unusual items: The company recorded $2.8 million of asset impairment and $3.8 million of accelerated depreciation associated with dismantling the demonstration unit. Inflation, supply-chain constraints, competition, warranty/performance exposure, foreign exchange and dependence on government incentives are also cited risks. The filing reported no material pending legal proceeding.
Important facts for investors to verify
- Whether signed project schedules, permitting, interconnection and construction progress support the reported backlog and expected revenue timing.
- Customer credit quality, collection of receivables and extended-term license payments, and the conditions for recovery of the Atlas contribution.
- Whether the revenue-recognition material weakness is fully remediated and controls operate effectively over a sufficient testing period.
- How much of reported cash is available for operations after restricted balances, letters of credit, purchase obligations and project funding needs.
- Whether initial customer systems meet cost, schedule, performance and warranty expectations, and whether customer concentration declines as deployments scale.