Bloom Energy Corporation — FY2022 Form 10-K
Reporting period: Year ended December 31, 2022; comparisons are to FY2021 unless stated. The filing does not provide clear standalone Q4 results. Bloom designs, manufactures, sells and services solid-oxide fuel-cell Energy Servers for on-site electricity and is commercializing solid-oxide electrolyzers for hydrogen production.
Key financial metrics
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $1.199 billion | $972.2 million |
| Gross profit / margin | $148.3 million / 12% | $197.6 million / 20% |
| Operating loss | $261.0 million | $114.5 million |
| Net loss | $315.1 million | $193.4 million |
| Net loss per share, basic and diluted | $1.62 | $0.95 |
| Cash used in operating activities | $191.7 million | $60.7 million |
| Cash used in investing activities | $116.8 million | $46.7 million |
| Cash provided by financing activities | $211.4 million | $306.4 million |
- Revenue mix: Product revenue was $880.7 million (+32.7%); installation $92.1 million (-4.1%); service $151.0 million (+4.7%); electricity $75.4 million (+10.2%).
- Deployment: Accepted 228 net megawatts, up 21.3% from 188 MW in 2021. Product cost per accepted kW rose 4.6% to $2,453; installation cost per accepted kW fell 22.3% to $456.
- Liquidity: Cash and cash equivalents were $348.5 million at year-end; restricted cash was another $169.9 million and is not generally available for unrestricted use. Management said cash and expected operating cash flows should meet anticipated needs for at least 12 months, while noting that additional financing may be needed.
- Debt: Carrying value of total debt was $411.6 million: $285.8 million recourse and $125.8 million non-recourse. The recourse portion included $224.8 million of 2.5% Green Notes due August 2025 and $61.0 million of 10.25% secured notes due March 2027. The principal repayment schedule shows $258.1 million due in 2025.
- Other: Accumulated deficit was $3.6 billion. Stock-based compensation was $114.0 million. The company reported an income tax provision of $1.1 million despite a pretax loss of $314.0 million, largely reflecting a full valuation allowance against U.S. deferred tax assets.
Material changes and unusual items
- Revenue increased 23.3%, led by higher product volume and revenue from the PPA IIIa and PPA IV repowering projects. Product revenue included $102.3 million from the PPA IV upgrade and $49.8 million from PPA IIIa.
- Gross margin fell to 12% from 20%. Electricity gross loss was $86.7 million, following $24.0 million of electricity gross profit in 2021. The upgrades included $108.8 million of impairment charges for old Energy Servers; the cash flow statement reports $113.5 million of write-offs related to the upgrades.
- Operating expenses rose 31.1% to $409.3 million, including increased research and development, hiring, and capacity-expansion costs. Operating cash use increased substantially, driven by the larger net loss and working-capital needs, including higher receivables and inventory.
- Bloom raised $371.5 million net from an August 2022 public share offering. SK ecoplant’s $255 million preferred investment converted into 10 million Class A shares in November 2022. A further purchase of 13.49 million shares for approximately $311 million was elected by SK ecoplant but deferred by mutual agreement to March 31, 2023, subject to applicable clearances.
- Bloom opened a multi-gigawatt Fremont factory in 2022 after an approximately $200 million investment. Capital expenditures were $116.8 million, primarily related to manufacturing expansion.
Outlook, commentary and risks
- Management cited ongoing supply-chain lead-time, freight, materials-cost and manufacturing-labor pressures, and expected challenges to continue. It reported that these issues had not caused material component shortages or significant production disruption to date, though some installations were delayed.
- Bloom expects further investment in manufacturing, product development and domestic and international expansion. It is developing hydrogen, electrolyzer, biogas, carbon-capture and marine opportunities; the filing provides no numerical FY2023 revenue or earnings guidance.
- Management viewed the Inflation Reduction Act’s expanded tax credits, including incentives for fuel cells, clean hydrogen and carbon capture, as potential demand and financing support. The company was still assessing provisions awaiting Treasury guidance; qualification and implementation are not assured.
- South Korea accounted for 44% of FY2022 revenue, and two customers accounted for approximately 38% and 37% of revenue. Customer concentration, reliance on Korean incentives and the SK ecoplant relationship are significant exposures.
- Key risks include continued losses and negative operating cash flow; debt service and refinancing needs; dependence on customer and tax-equity financing; cost reductions and service performance; lengthy sales and installation cycles; permitting, interconnection and natural-gas policy changes; supply-chain constraints; and competition. Performance-guarantee payments were $12.1 million in 2022; aggregate remaining potential liability under applicable caps was approximately $477.9 million.
- Contingencies include an agreement in principle to settle IPO-related securities claims for $3 million, expected to be funded by insurers but subject to final agreement and court approval; litigation with the City of Santa Clara concerning permits; and a patent and contract dispute with Plansee/GTP. Bloom said it could not estimate reasonably possible losses for the latter matters. A Delaware grant repayment liability of $9.5 million was recorded, with up to a further $2.5 million potentially repayable depending on employment and compensation milestones.
- The financial statement and internal-control audits received unqualified opinions; management and the auditor concluded internal control over financial reporting was effective as of December 31, 2022.
Important facts for investors to verify
- Whether the deferred SK ecoplant share purchase closed and whether the expected proceeds were received.
- Cash generation, receivable collections, inventory levels and unrestricted liquidity, distinguishing restricted cash from available cash.
- The 2025 Green Notes repayment or conversion plan and compliance with debt covenants.
- Whether the PPA IIIa and PPA IV upgrades deliver expected operating benefits after the large impairments and associated costs.
- Customer concentration, South Korea revenue exposure, and the status and terms of SK ecoplant purchase commitments and Korean policy incentives.
- Performance-guarantee payments and exposure, as well as outcomes of the disclosed legal matters and Delaware grant milestones.
- Actual cost and capacity progress at Fremont, and whether supply, labor, installation and financing constraints affect delivery or margins.