Fluence EnergyFLNC

Revenue for the quarter was about 650 million dollars, falling short of the 820 million dollars analysts expected. The company lost 24 cents per share, which was also wider than the break-even results that were anticipated. Management pointed to production delays at new contract manufacturing sites as the main reason they could not fulfill orders as quickly as planned.

Gross profit margin, which shows how much is left after the direct costs of building the battery systems, dropped to about 5 percent from nearly 15 percent a year ago. This drop is concerning because the company needs to prove it can scale up profitably. While the backlog of signed contracts remains a source of future potential, this quarter shows that turning those contracts into actual cash is proving more difficult and costly than expected.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Manufacturing delays hit revenue: Total revenue rose 8% to $649.8 million, but the company missed its own goals as production delays at new factories forced it to push $400.0 million of project deliveries into next year.
• Record backlog for future growth: The company reached its highest-ever backlog of $6.4 billion, meaning it has a massive pile of signed contracts to work through as it resolves its current factory bottlenecks.
• Order intake nearly triples: New orders jumped to $1.44 billion this quarter, up from $508.8 million a year ago, fueled by $850.0 million in new deals for power-hungry data centers.
• Profitability takes a step back: Adjusted gross margin, which tracks the profit left after building and installing systems, fell to 5.9% from 15.4% last year due to the factory delays and $15 million in upfront costs for a new battery supply deal.
• Full year outlook lowered: Management cut its full year revenue guidance to a midpoint of $3.0 billion, down from the previous $3.4 billion, and now expects an adjusted EBITDA loss of roughly $10.0 million instead of a $50.0 million profit.

Our take: This was a difficult quarter where execution issues overshadowed very strong demand. While it is frustrating to see $400.0 million in sales slip into next year because of factory delays, the record $6.4 billion backlog suggests the long-term growth story for energy storage remains intact. We are keeping a close eye on those production ramps.