Bloom energy announces third quarter 2021 financial results
San jose, calif.--(business wire)--bloom energy corporation (nyse: be) today announced financial results for its third quarter ended september 30, 2021. third quarter highlights record acceptances of 353 systems in the third quarter of 2021, an increase of 12.4% versus the third quarter of 2020. revenue of $207.2 million in the third quarter of 2021, an increase of 3.5% compared to revenue of $200.3 million in the third quarter of 2020. revenue up 11.4% excluding a $14.2 million prior year one-time revenue benefit that did not repeat. launched commercial availability of bloom electrolyzer and hydrogen energy server starting in 2022 to establish leadership position in unlocking a net zero emissions future. further buildout of our gigawatt factory in fremont, california to meet future customer demand is on schedule. on october 25, 2021, bloom energy and sk ecoplant announced an expansion of their strategic partnership to accelerate hydrogen commercialization. commenting on the third quarter, kr sridhar, founder, chairman, and ceo of bloom energy said, “we are excited about our new and enhanced strategic partnership with sk ecoplant, which further validates our technology. it also provides real revenue for the long term and an equity investment in the near term that will enable us to accelerate our growth in our current products and hydrogen electrolyzers around the world. as we look at the challenges of sustainability, resiliency, and cost predictability that our customers face, we are confident that these are not ‘either / or’ choices. they are “and” propositions, which we are best positioned to solve with our fuel cell technology platform.” greg cameron, executive vice president and cfo of bloom energy added, “bloom energy is executing well in a challenging environment. we achieved record third quarter acceptances, expanded our hydrogen product offering and are continuing to build our manufacturing capacity. our recently announced expansion of the sk ecoplant partnership provides the capability to accelerate investment in our expanding platform.” summary of key financial metrics preliminary summary gaap profit and loss statements ($000) q321 q221 q320 revenue 207,228 228,470 200,305 cost of revenue 170,345 191,126 144,318 gross profit 36,883 37,344 55,987 gross margin 17.8% 16.3% 28.0% operating expenses 80,772 80,055 56,359 operating loss (43,889) (42,711) (372) operating margin (21.2)% (18.7)% (0.2)% non-operating expenses1 8,481 11,152 11,582 net loss (52,370) (53,863) (11,954) gaap eps (0.30) (0.31) (0.09) 1. non-operating expenses and tax provision and non-controlling interest preliminary summary non-gaap financial information1 ($000) q321 q221 q320 revenue 207,228 228,470 200,305 cost of revenue2 167,400 187,322 140,750 gross profit2 39,828 41,148 59,555 gross margin2 19.2% 18.0% 29.7% operating expenses2 62,751 64,726 44,192 operating income (loss) 2 (22,923) (23,578) 15,363 operating margin2 (11.1)% (10.3)% 7.7% adjusted ebitda3 (9,777) (10,947) 27,673 adjusted eps4 (0.20) $ (0.23) (0.04) 1. a detailed reconciliation of gaap to non-gaap financial measures is provided at the end of this news release 2. excludes stock-based compensation 3. adjusted ebitda is net income (loss) excluding net loss attributable to non-controlling interest, gain (loss) on revaluation of embedded derivatives, fair value adjustment for ppa derivatives, stock-based compensation expense, income tax provision, depreciation and amortization, interest expense and other one-time items 4. adjusted eps is net income (loss) excluding net loss attributable to non-controlling interest, gain (loss) on revaluation of embedded derivatives, loss on extinguishment of debt, depreciation and amortization, provision for income tax, interest expense, fair value adjustment for ppa derivatives and stock-based compensation expense using the adjusted weighted average shares outstanding (waso) share count acceptances we use acceptances as a key operating metric to measure the volume of our completed energy server installation activity from period to period. acceptance typically occurs upon transfer of control to our customers, which depending on the contract terms is when the system is shipped and delivered to our customers, when the system is shipped and delivered and is physically ready for startup and commissioning, or when the system is shipped and delivered and is turned on and producing power. balance sheet highlights bloom energy’s cash position, including restricted cash, as of september 30, 2021 was $319.9 million, compared to $504.4 million as of september 30, 2020. unrestricted cash as of september 30, 2021 was $121.9 million, compared to $325.2 million as of september 30, 2020. bloom ended the third quarter of 2021 with $516.0 million of total debt, a decrease of $3.2 million from the second quarter of 2021. non-recourse debt as of september 30, 2021 was $216.0 million, compared to $219.2 million as of june 30, 2021. conference call details bloom will host a conference call today, november 4, 2021, at 2:00 p.m. pacific time (5:00 p.m. eastern time) to discuss its financial results. to participate in the live call, analysts and investors may call +1 (833) 520-0063 and enter the passcode: 6351508. those calling from outside the united states may dial +1 (236) 714-2197 and enter the same passcode: 6351508. a simultaneous live webcast will also be available under the investor relations section on our website at https://investor.bloomenergy.com/. following the webcast, an archived version will be available on bloom’s website for one year. a telephonic replay of the conference call will be available for one week following the call, by dialing +1 (800) 585-8367 or +1 (416) 621-4642 and entering passcode 6351508. use of non-gaap financial measures this release includes certain non-gaap financial measures as defined by the rules and regulations of the securities and exchange commission (sec). these non-gaap financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with u.s. gaap. there are a number of limitations related to the use of these non-gaap financial measures versus their nearest gaap equivalents. for example, other companies may calculate non-gaap financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-gaap financial measures as tools for comparison. bloom urges you to review the reconciliations of its non-gaap financial measures to the most directly comparable u.s. gaap financial measures set forth in this press release, and not to rely on any single financial measure to evaluate our business. with respect to bloom’s expectations regarding its 2021 outlook, bloom is not able to provide a quantitative reconciliation of non-gaap gross margin and non-gaap operating margin measures to the corresponding gaap measures without unreasonable efforts. about bloom energy bloom energy’s mission is to make clean, reliable energy affordable for everyone in the world. bloom’s product, the bloom energy server, delivers highly reliable and resilient, always-on electric power that is clean, cost-effective, and ideal for microgrid applications. bloom’s customers include many fortune 100 companies and leaders in manufacturing, data centers, healthcare, retail, higher education, utilities, and other industries. for more information, visit www.bloomenergy.com. forward-looking statements this press release contains certain forward-looking statements, which are subject to the safe harbor provisions of the private securities litigation reform act of 1995. forward-looking statements generally relate to future events or our future financial or operating performance. in some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or the negative of these words or similar terms or expressions that concern bloom’s expectations, strategy, priorities, plans or intentions. these forward-looking statements include, but are not limited to, bloom’s ability to accelerate its growth with its current products and hydrogen electrolyzers around the world; bloom’s expectations regarding the success of its strategic partnership with sk ecoplant; bloom’s expectations regarding its fuel cell technology platform; and bloom’s financial outlook for 2021. readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors including, but not limited to, bloom’s limited operating history; the emerging nature of the distributed generation market and rapidly evolving market trends; the significant losses bloom has incurred in the past; the significant upfront costs of bloom’s energy servers and bloom’s ability to secure financing for its products; bloom’s ability to drive cost reductions and to successfully mitigate against potential price increases; bloom’s ability to service its existing debt obligations; bloom’s ability to be successful in new markets; the success of the strategic partnership with sk ecoplant in the united states and international markets; timing and development of an ecosystem for the hydrogen market, including in the korean market; continued incentives in the south korean market; the timing and pace of adoption of hydrogen for stationary power; the risk of manufacturing defects; the accuracy of bloom’s estimates regarding the useful life of its energy servers; delays in the development and introduction of new products or updates to existing products; the impact of the covid-19 pandemic on the global economy and its potential impact on bloom’s business; the availability of rebates, tax credits and other tax benefits; bloom’s reliance on tax equity financing arrangements; bloom’s reliance upon a limited number of customers; bloom’s lengthy sales and installation cycle, construction, utility interconnection and other delays and cost overruns related to the installation of its energy servers; business and economic conditions and growth trends in commercial and industrial energy markets; global economic conditions and uncertainties in the geopolitical environment; overall electricity generation market; bloom’s ability to protect its intellectual property; and other risks and uncertainties detailed in bloom’s sec filings from time to time. more information on potential factors that may impact bloom’s business are set forth in bloom’s periodic reports filed with the sec, including our quarterly report on form 10-q for the quarter ended on june 30, 2021 as filed with the sec on august 6, 2021, as well as subsequent reports filed with or furnished to the sec from time to time. these reports are available on bloom’s website at www.bloomenergy.com and the sec’s website at www.sec.gov. bloom assumes no obligation to, and does not currently intend to, update any such forward-looking statements. the investor relations section of bloom’s website at investor.bloomenergy.com contains a significant amount of information about bloom energy, including financial and other information for investors. bloom encourages investors to visit this website from time to time, as information is updated and new information is posted. condensed consolidated balance sheets (preliminary & unaudited) (in thousands) september 30, december 31, 2021 2020 assets current assets: cash and cash equivalents $ 121,861 $ 246,947 restricted cash 65,315 52,470 accounts receivable 62,066 96,186 contract asset 27,745 3,327 inventories 182,555 142,059 deferred cost of revenue 33,759 41,469 customer financing receivable 5,693 5,428 prepaid expenses and other current assets 31,946 30,718 total current assets 530,940 618,604 property, plant and equipment, net 615,514 600,628 operating lease right-of-use assets 70,055 35,621 customer financing receivable, non-current 40,981 45,268 restricted cash, non-current 132,725 117,293 deferred cost of revenue, non-current 2,918 2,462 other long-term assets 38,593 34,511 total assets $ 1,431,726 $ 1,454,387 liabilities, redeemable noncontrolling interest, stockholders’ (deficit) equity and noncontrolling interest current liabilities: accounts payable $ 101,908 $ 58,334 accrued warranty 7,907 10,263 accrued expenses and other current liabilities 85,877 112,004 deferred revenue and customer deposits 81,894 114,286 operating lease liabilities 6,206 7,899 financing obligations 14,260 12,745 recourse debt 6,034 — non-recourse debt 7,782 120,846 total current liabilities 311,868 436,377 deferred revenue and customer deposits, non-current 67,887 87,463 operating lease liabilities, non-current 78,146 41,849 financing obligations, non-current 456,315 459,981 recourse debt, non-current 285,216 168,008 non-recourse debt, non-current 205,164 102,045 other long-term liabilities 26,755 17,268 total liabilities 1,431,351 1,312,991 redeemable noncontrolling interest 331 377 stockholders’ equity (deficit): common stock 18 17 additional paid-in capital 3,183,101 3,182,753 accumulated other comprehensive loss (278 ) (9 ) accumulated deficit (3,229,752 ) (3,103,937 ) total stockholders’ (deficit) equity (46,911 ) 78,824 noncontrolling interest 46,955 62,195 total liabilities, redeemable noncontrolling interest, stockholders' (deficit) equity and noncontrolling interest $ 1,431,726 $ 1,454,387 condensed consolidated statements of operations (preliminary & unaudited) (in thousands, except per share data) three months ended september 30, 2021 2020 revenue: product $ 128,550 $ 131,076 installation 22,172 26,603 service 39,251 26,141 electricity 17,255 16,485 total revenue 207,228 200,305 cost of revenue: product 93,704 72,037 installation 25,616 27,872 service 39,586 33,214 electricity 11,439 11,195 total cost of revenue 170,345 144,318 gross profit 36,883 55,987 operating expenses: research and development 27,634 19,231 sales and marketing 20,124 11,700 general and administrative 33,014 25,428 total operating expenses 80,772 56,359 loss from operations (43,889 ) (372 ) interest income 72 254 interest expense (14,514 (19,902 interest expense - related parties — (353 ) other income (expense), net 2,011 (221 ) gain on extinguishment of debt — 1,220 (loss) gain on revaluation of embedded derivatives (184 ) 1,505 loss before income taxes (56,504 ) (17,869 ) income tax provision 158 7 net loss (56,662 ) (17,876 ) less: net loss attributable to noncontrolling interest and redeemable noncontrolling interest (4,292 ) (5,922 ) net loss to common stockholders $ (52,370 ) $ (11,954 ) net loss per share to common stockholders, basic and diluted $ (0.30 ) $ (0.09 ) weighted average shares used to compute net loss per share to common stockholders, basic and diluted 174,269 138,964 condensed consolidated statement of cash flows (preliminary & unaudited) (in thousands) nine months ended september 30, 2021 2020 cash flows from operating activities: net loss $ (144,864 ) $ (147,496 ) adjustments to reconcile net loss to net cash used in operating activities: depreciation and amortization 40,079 38,888 non-cash lease expense 7,161 4,419 write-off of property, plant and equipment, net — 36 impairment of equity method investment — 4,236 revaluation of derivative contracts 486 (2,267 ) stock-based compensation expense 57,309 57,385 gain on remeasurement of investment (1,966 ) — loss on extinguishment of debt — 11,785 amortization of debt issuance costs and premium, net 2,824 (195 ) changes in operating assets and liabilities: accounts receivable 34,291 (4,058 ) contract assets (24,418 ) (8,596 ) inventories (39,953 ) (22,772 ) deferred cost of revenue 7,307 1,562 customer financing receivable 4,022 3,790 prepaid expenses and other current assets 236 (2,647 ) other long-term assets (374 ) (3,217 ) accounts payable 37,973 8,704 accrued warranty (2,357 ) (525 ) accrued expenses and other current liabilities (26,178 ) 4,932 operating lease right-of-use assets and operating lease liabilities (7,593 ) (4,467 ) deferred revenue and customer deposits (53,181 ) (15,658 ) other long-term liabilities 1,289 (3,828 ) net cash used in operating activities (107,907 ) (79,989 ) cash flows from investing activities: purchase of property, plant and equipment (44,625 ) (33,066 ) net cash acquired from step acquisition 3,114 — net cash used in investing activities (41,511 ) (33,066 ) nine months ended september 30, 2021 2020 cash flows from financing activities: proceeds from issuance of debt — 300,000 proceeds from issuance of debt to related parties — 30,000 repayment of debt (11,017 ) (92,546 ) repayment of debt - related parties — (2,105 ) debt issuance costs — (13,247 ) proceeds from financing obligations 7,534 14,807 repayment of financing obligations (10,174 ) (7,828 ) contribution from noncontrolling interest — 4,314 distributions to noncontrolling interests and redeemable noncontrolling interests (5,322 ) (6,103 ) proceeds from issuance of common stock 72,109 12,745 net cash provided by financing activities 53,130 240,037 effect of exchange rate changes on cash, cash equivalent and restricted cash (521 ) — net (decrease) increase in cash, cash equivalents, and restricted cash (96,809 ) 126,982 cash, cash equivalents, and restricted cash: beginning of period 416,710 377,388 end of period $ 319,901 $ 504,370 reconciliation of gaap to non-gaap financial measures (preliminary & unaudited) (in thousands) gross profit and gross margin to gross profit excluding stock-based compensation and gross margin excluding stock-based compensation gross profit and gross margin excluding stock-based compensation (sbc) are supplemental measures of operating performance that do not represent and should not be considered alternatives to gross profit or gross margin, as determined under gaap. these measures remove the impact of stock-based compensation. we believe that gross profit and gross margin excluding stock-based compensation supplement the gaap measures and enable us to more effectively evaluate our performance period-over-period. a reconciliation of gross profit and gross margin excluding stock-based compensation to gross profit and gross margin, the most directly comparable gaap measures, and the computation of gross margin excluding stock-based compensation are as follows: q321 q221 q320 revenue 207,228 228,470 200,305 gross profit 36,883 37,344 55,987 gross margin % 17.8% 16.3% 28.0% stock-based compensation - cost of revenue 2,945 3,804 3,568 gross profit excluding sbc 39,828 41,148 59,555 gross margin excluding sbc % 19.2% 18.0% 29.7% cost of revenue and operating expenses to cost of revenue and operating expenses excluding stock-based compensation cost of revenue and operating expenses excluding stock-based compensation are a supplemental measure of operating performance that does not represent and should not be considered an alternative to cost of revenue and operating expenses, as determined under gaap. this measure removes the impact of stock-based compensation. we believe that cost of revenue and operating expenses excluding stock-based compensation supplements the gaap measure and enables us to more effectively evaluate our performance period-over-period. a reconciliation of cost of revenue and operating expenses excluding stock-based compensation to cost of revenue and operating expenses, the most directly comparable gaap measure, are as follows: q321 q221 q320 cost of revenue 170,345 191,126 144,318 stock-based compensation - cost of revenue 2,945 3,804 3,568 cost of revenue – excluding sbc 167,400 187,322 140,750 q321 q221 q320 operating expenses 80,772 80,055 56,359 stock-based compensation - operating expenses 18,021 15,329 12,167 operating expenses – excluding sbc 62,751 64,726 44,192 operating loss to operating income (loss) excluding stock-based compensation operating loss excluding stock-based compensation is a supplemental measure of operating performance that does not represent and should not be considered an alternative to operating loss, as determined under gaap. this measure removes the impact of stock-based compensation. we believe that operating income (loss) excluding stock-based compensation supplements the gaap measure and enables us to more effectively evaluate our performance period-over-period. a reconciliation of operating income (loss) excluding stock-based compensation to operating loss, the most directly comparable gaap measure, and the computation of operating income (loss) excluding stock-based compensation are as follows: q321 q221 q320 operating loss (43,889) (42,711) (372) stock-based compensation 20,966 19,133 15,735 operating income (loss) excluding sbc (22,923) (23,578) 15,363 net loss to adjusted net loss and computation of adjusted net loss per share (eps) adjusted net loss and adjusted net loss per share are supplemental measures of operating performance that do not represent and should not be considered alternatives to net loss and net loss per share, as determined under gaap. these measures remove the impact of the non-controlling interests associated with our legacy ppa entities, the revaluation of derivatives, fair market value adjustment for the ppa derivatives, and stock-based compensation, all of which are non-cash charges. we believe that adjusted net loss and adjusted net loss per share supplement gaap measures and enable us to more effectively evaluate our performance period-over-period. a reconciliation of adjusted net loss to net loss, the most directly comparable gaap measure, and the computation of adjusted net loss per share are as follows: q321 q221 q320 net loss to common stockholders (52,370) (53,863) (11,954) loss on extinguishment of debt — — (1,220) loss for non-controlling interests1 (4,292) (4,558) (5,922) loss (gain) on derivatives liabilities2 184 942 (1,505) loss (gain) on the fair value adjustments for certain ppa derivatives3 (125) (735) (726) stock-based compensation 20,966 19,133 15,735 adjusted net loss (35,637) (39,081) (5,592) net loss to common stockholders per share $ (0.30) $ (0.31) $ (0.09) adjusted net loss per share (eps) $ (0.20) $ (0.23) $ (0.04) gaap weighted average shares outstanding attributable to common, basic and diluted (thousands) 174,269 172,749 138,964 adjusted weighted average shares outstanding attributable to common, basic and diluted (thousands)4 174,269 172,749 138,964 1. represents the profits and losses allocated to the non-controlling interests under the hypothetical liquidation at book value (hlbv) method 2. represents the adjustments to the fair value of the embedded derivatives associated with the convertible notes and other derivatives 3. represents the adjustments to the fair value of the derivative forward contract for one ppa entity (our third ppa company), a wholly owned subsidiary 4. includes adjustments to reflect assumed conversion of certain convertible promissory notes net loss to adjusted ebitda adjusted ebitda is a non-gaap supplemental measure of operating performance that does not represent and should not be considered an alternative to operating loss or cash flow from operations, as determined by gaap. adjusted ebitda is defined as net income (loss) before interest expense, income tax expense, non-controlling interest, revaluations, stock-based compensation and depreciation and amortization expense. we use adjusted ebitda to measure the operating performance of our business, excluding specifically identified items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations. adjusted ebitda may not be comparable to similarly titled measures provided by other companies due to potential differences in methods of calculations. a reconciliation of adjusted ebitda to net loss is as follows: q321 q221 q320 net loss to common stockholders (52,370) (53,863) (11,954) loss on extinguishment of debt — — (1,220) loss for non-controlling interests1 (4,292) (4,558) (5,922) loss (gain) on derivatives liabilities2 184 942 (1,505) loss (gain) on the fair value adjustments for certain ppa derivatives3 (125) (735) (726) stock-based compensation 20,966 19,133 15,735 depreciation & amortization 13,271 13,366 13,036 provision (benefit) for income tax 158 313 7 interest expense (income), other expense (income), net 12,431 14,455 20,222 adjusted ebitda (9,777) (10,947) 27,673 represents the profits and losses allocated to the non-controlling interests under the hypothetical liquidation at book value (hlbv) method represents the adjustments to the fair value of the embedded derivatives associated with the convertible notes and other derivatives represents the adjustments to the fair value of the derivative forward contract for one ppa entity (our third ppa company)
