Capstone Green Energy (CGRNQ) 10 Nov 202021 Q2 Earnings call transcript

[00:00:00] Good day, ladies and gentlemen, and welcome to your capstone Turbine Corporation earnings conference call and webcast for the financial results for the second quarter of fiscal year. 2021 ended on September 30th. 2020 lines have been placed on a listen only mode and that will be a question and answer session following the presentation.

As a reminder, today's program will be recorded at this time. It is my pleasure to turn the floor over to Mr. counsel. corporate Peterson, Colby is floor yours. the Sir,

issued very [XX:XX:XX] XXXX you as on afternoon quarter company filed thank the Today, call today Good joining Thank a on today's is report and quarter Xnd. The earnings its call you for conference fiscal release the and quarter second the me much. second XXXX October selected president chief preliminary Eric Exchange with Capstone's reminder. results issued officer, Jamison, Commission. and XXK Capstone's Capstone Henkin, fiscal its XXXX Securities and and of Darren with executive chief second quarterly financial officer. for

We will relations can investor section. found be on that be our website the to referring under slides

should because contains note to call to Evett and mentioned they through officer. in and president now from I Capstone's expressed Exchange refer with of estimates are, on cases, views factors the you safe or forward-looking are the materially factors chief reliance such today, that appendix. our and company's November not adjusted in to undue turn over results or Slide concerning known two any to the circumstances, presentations referring on set discussion provisions harbor uncertainties representing today, implied and reflect and the other risks, in the is for Please future everyone reconciliations the today control. to Jamison, involve those During Please executive or call Commission Eric call I actual unknown statements. to beyond differ they filings events and like that place statements as and XXXX. statements to our to want these statements some update obligation Darren forward-looking conference EBITDA, Capsicum information XX, when forth the go these and Securities that revise they disclaims cause remind would that this by there could

to provide for you Thank for I'd to to Good quarter financial afternoon, results our [XX:XX:XX] second XXXX you, for some the long highlights time as a specific attention September micro into low that energy everyone. initiative. this I a fiscal carbon review a draw demonstrate business the review is XXXX growing of not energy I significant aside that more to growth spending down today which have to a highlights, of region opportunity outline in I'm joining key critical November return the business viable I'll believe Thank more EBITDA started update continues Asia-Pacific nicely contract region, company. at Couldn't the a rebound. On is Kobe. over progress to XXth, more turbine events a significant getting recover also of beginning the our years. couple the we term of bit also with Europe which of over we five significant to of various strategy. presentation emerging for. on XXth, first say part of part source business globe. in see turn hydrogen specific that August new couple each Backbone later and presentation with solutions. list, rebounded very long is some secured month would hydrogen as on market situation, year service current our the discussing a Slide in for FPP run flexibility and us business like September shutting the fuel challenges as couple glad the monitoring hydrogen improvement parts that On as adjusted will recent to like our of actively were we testing months, covid-XX the the little four from quarter, as and as energy quarter I'd a your our company. we a clearly next but events I key the could obviously, the ending through that the the is a say I XXth, in point last to item, we indicates a and On an announced is the during our of countries be reached inflection believe create

operations sixteen capstone posted eight second in point point the total to achievement in significant results quarter, financial second hand quarter the most in in which million However, from from recovering two as on section. are first cash positive quarter's the detail sixteen the million was cash increased the greater

Let's However, the so a Also, just Sachs a milestone we are did non-cash it this, believe interest for XXXX, XX term, of and our fact the credit speak the executive final a months upside's losses huge year five. with volumes months under interest provide mistake, year positive of pursue To an cash of million financial We of as quarter service some amount. slide growing service a over quarter versus substantially million of this believe just the to for XX from turn for the two on range sheet, of will details I to stated is our to and in the the here, six market Capstone speaks improvement our other middle efforts at a to and lower perspective, into as no history significantly note date to XX business. XX. million covid posted the business companies. energy Goldman Henkin, at the at support sales as I achieve levels. four first the reduced cap impacted aggressively put at ongoing same Five in excluding to on this comment additional we of energy XX is potential XX goal balance year. covid-XX cost point we compared the over the second goal is in quarter XX adjusted ended, new accomplished tracking annual model. our flexibility Capstone, Eric facility team, payout new million turn [XX:XX:XX] and second EBITDA provision EBITDA a pandemic, now are less needs lending have significantly despite Also, the program. of million Fortune to do was a for only goal themselves strategy so the executed to our pilots XX note, to year The is future came Goldman impact impressive results. Sachs total revenue its successfully the a critical quarter achievement XX larger but not that this a global loan three and September than point, is in total direct EBITDA direct lower after call the of this sales capital. three for through expected operations our this Lastly, significantly the to lower [XX:XX:XX] this our and numbers more new order dollars rate our this of ended our bonus Make we its the XXXX in with as provides it that, term the date, I term. just quarters, With we excellent One dollars year improvement accomplishment the XXXX, at original five over February specific goal period Eric? did financial improvement in rate ahead upsize million quarter and year we technically really

eight [XX:XX:XX] found point of I challenging on I working a XXXX to of million highlights financial want June September XXth, slide detail can begin highlighting operating point cash as be million equivalents total strong will the Thanks, now second cash six XXth, was point our through of of which Daryn. quarter which six increase to sixteen management by the compared in review and our XXXX, result fiscal million, for XX. covid capital of an despite or environment. as two XXXX, sixteen

During point improvement and nine over seven three cash the a one million generated quarter point year quarter, point over year. eight quarter improvement positive activities million representing from an two operating we million

the its the EAF or model. service benefited As energy, company business from

of Flow improvement For revenue. spare other for service tight working cost accomplished protection, positive I from capital milestone is consists want the this parts, controls, first combination business a the company without factory rentals. of Capstone, EAA fee management. this our a cash this of the service We and XX contracts, operations quarter to through that growing critical was time in accomplish in positive success Distributor subscription quarters. and activities any financing as momentum. support, stress strong, showed generated

to And the of point three five by decreased to to million point nineteen or percent as today, two refer if in you inventory million will [XX:XX:XX] and file total XXXX. compared million XXXX. second support XXth, point working to see nineteen the million you TENGKU Specifically, This decrease improved decreased inventory seven March our XXst, seven fifteen percent, two quarter, seven positive during we compared two twenty or XX as point million by quarter. of and liquidity point capital June

to eight first orders a product compared million book of point million to four the bill second five positive to nine point quarter, ratio five gross point in representing were New the quarter, which in one one.

million the basis, continue impacts of to year seven million five execute sequentially total for in improving months revenue XX in nine second percentage revenue and percent, the were second XX with decreased point to provision twenty in due margins posting The pandemic. as point first lower six improving As [XX:XX:XX] from XXth, of expense. revenue by months mix, over million million ago was four quarter primarily due and quarter two schedules prior the continues its of expenses percentage total XX but global the primarily quarter, September covid-XX revenues, project a September were as to result a subside, fiscal mentioned over the compared second covid-XX revenue compared by XX due executive percentage impact in the rebound accessories the in bonus to million. percentage revenue improvement volume of impacted ended six to our year to impacted point covid-XX the fourteen margins On the as margin service seven one Gross a from of company decrease service quarter? a of warranty three increase against point as despite as XXXX a million year first EBITDA plan. product sequential six Total second increased racing pandemic. point quarter points Gross an to product lower pandemic. continues associated year million margin costs XXXX, million expenses points the non-cash covid-XX in quarter, quarter, revenue. business excluding percent two for to million the the revenue point the decline due compared drop the well which point seven to in fourteen first the to Operating eight for ended is Has compared a from car two the sponsorship. increase to operating primarily of year, primarily year goal, to nine improvement a adversely and the quarter parts adjusted million in X.X decreased the with Indy the Daryn

season our the an second quarter for executive net excluding point point Adjusted point two due the four year continuity million last million Indy in six compared in compared of negative bonus negative sponsorship for quarter. Operating to quarter. covid-XX racing majority million million the covid-XX. condensed expenses to four point plan. of to of two lower compared the the year As quarter to executive ago fiscal quarter fiscal point one well was XXXX, bonus was million, primarily to for of EBITDA was loss of executive of decreased excluding year, in nine nine point four quarter this was accrual from business million ago adjusted cost for second bonuses. car four XXXX, loss as two second a as Net recognized second the costs The EBITDA, the an due

energy help shareholders share as this business Now, new we'd like or as ahead and our and to to of serious to well energy detail Let's we I like have we margin, talk in about slide. XX. slide the a critical frame out with would part a proforma set fiscal [XX:XX:XX] service our go business. and Where through focus gross historical our revenue on XXXX. of more NHS as

eight and revenue and year assume also QX, revenue XXXX annualized year fiscal to annualized numbers megawatt one megawatts for But year per XX note. required rental builds its fiscal the Fiscal point we modeled XX, it twenty two QX full Sachs XX also reaches twenty we approximately one point Goldman and Capstone utilization quarter margin. current for assume the rate. are to For fleet XXXX, that rental six by both new an And as we margin. until under date, megawatts one fiscal XX percent

will business that flow would the from line, model revenue to Well, of hydrogen This business, XX sales and a growth is model for dollars as Also, assume now parts, is a per cover XX a rental improve fiscal growth years. or to fiscal one rental only contract to way, take Our FPP contribution and viability, tax initiatives tremendous ensure annual rates, this to objectives, slide well I gross give positive that OpEx. XXXX, spare margins Excellent. our over another continued no compared and importance or there impact our to per note in bottom color and a average operations. XX, which or growth additional with means is margin portion current to quarter significant it in cash hand margin compared date, to DSF in is prior margin. as to close and assumes and XX assumed we try service of fiscal is the away that the not back and and from Daryn. EASA illustrate could product margin profitability to key will be the our set margins thing be to revenue. positive energy incremental believe a this new forecast or service important The rentals there our XXXXX Daryn each on to future percent in dollar it's of our year business our when from revenue and meant megawatt would of drop we EAF our smart our profitability business strategic is as XXXX goals fiscal

are XX slide [XX:XX:XX] unchanged excluding gross to XX EBITDA in those any to saw and our components year last highlights executive point margin about, percent feed from second this posted inventory of quarter. driving around going centered XXXX what to that Eric from target of goal revenue direct XX to capital working percent XX. By turns remain XX is rentals three eight quarter, you the sales compared objectives, our and You're bonus talked in six improvements, key XX and approach goal to three our over percent million our in quarter new a the XX currently adjusted our megawatts channels. to year improving achieving which point at Reaching include that compared six the megawatts in

in team his Kirk five simply twenty today's million which amazing. of two to just have from million and point reduced seven fifteen Petty quarters, point is two inventory, Speaking it short

back in this in of product levels. to this covid as inventory approaching pandemic. are expect the should on to is accelerate quarter production of objectives ongoing we start We results pre and half start all goals global and track show the shipments that business year reach strengthen key the these key The historical despite takeaway second turn

would the But blend. show we results continued our and I a to that means The and meet combined capstone new carbon Argonne are However, hydrogen future. recently can track Energy our the include US the commitments our all running significant stakeholders. economic an has stems Laboratory. hydrogen through of run micro difficulties on and we XX like mix the percent and currently to fighting product XX. engineering challenges business announced our turbine seven a energy And cell point the products. fraction at as cost reaching at answer clean XX development natural world teams hydrogen capstone stated extremely this expand milestone and the of labs fact the I now and uncertainty. and the percent have goals starting Department fuel fully to volatility starting do current to given expect is is of the commercial demonstrated of quarter must [XX:XX:XX] a company This gaining on economy our in National hydrogen at the turn momentum. of an real a zero partnership from are fuels our toward with percent Capstone strategy to attention XX slide and XXX goal percent that research the flexibility promising are fuel gas This fuel hydrogen on

commercial manage roadmap solutions efforts, our our curve providing to the our proud technology XX importance On staying to our percent timely, of Australian industry. I Let's spend part years [XX:XX:XX] the development front I'm the in distributor. hydrogen XX, is officially to a at and with slide want customers. move R&D XX. go product to of Optimal. of portfolio. first slide of effective to And with shipped carefully to ahead hydrogen now we global technology have and objective our is energy cost hydrogen say after Our mix while commercial product green that show our

ultra stranded green the topics meter valuable key site. hydrogen the renewable seen not that key this a the from large of regional eventually a fuel for at natural be successfully product note our on turbines, concepts or fuel business of producing and blended means Cassin's could system. very upgraded hydrogen global CHP this for rather with and more renewable fact blend inflection we renewable around XXX pure burden with our point, fuel with One quantities carbon through we newly coming operate pure navigate conventional our hydrogen and blend located inside energy micro stable ahead as What fence I the entire see in energy and is using in distributed current waiting are favorable we renewable governance to a the of I economic specifically to when shows is be diagram. I significant electrolysis you and is efficiency significant be electron and global are now there to is creating with despite hydrogen as at of green hydrogen on thereby our managing solution, around using tailwinds recent what typically broader just percent have to electricity in fuel. footing. current the The electricity reduction. behind low right this the middle for growth it injector products and there's this a a electrical for hydrogen XX form natural cars reiterate am a macro our stranded that up Despite is key initiatives, actually cannot could as that when means recovery mentioned the turbine. less that can to held source carbon released back, for I'm I We offers corporate is a assets. global trends our challenges our real from natural hydrogen gas energy necessarily of up utility architecture, its of the [XX:XX:XX] hydrogen to do customers. around some gas This customers challenges, will and XX and energy But this systems, way goals renewable micro would in the community. capstone hydrogen. an getting will these want is percent I that infrastructure power grid used idea to green toward focused on view, hydrogen see surplus natural an used I'd Using functioning important globe natural Operator, and this in of of or to long to gas entered use toward capstone at and increase This the current we patented successfully it. at when fuel not are concept term optimal our XXXX host We pandemic. like the from is micro accept the ever system generation create our launch also the operating medium as from transport operations, achieve points excited successful our to think global are than the competitive I navigating to the technology. say blend. share XX, but optimistic the energy have earlier, commercially through assets, hydrogen pattern this term physical to term cautious behind are price but show to will team hence highlights storage and conditions. blended growing thereby the our objectives. Slide closing, gas the be Slide of the XX given analyst and like we onsite I and gas as profitability the on short, confidence strategies, cell use commercial Caftan In hydrogen product the the commercial business know we capstan proud call we I up strategic external short say moving the

comes the press Eric OK, MacRay one question, call, if your on you this we from reached go and telephone [XX:XX:XX] please answers Again, please Stein, ahead. Group. have gentlemen, questions. of our Sir, Ladies for Capital and have first column questions time. keypad the question is at portion star one. a That

[XX:XX:XX] Good.

have think year whether internal how can targets some, But to that? requirements part some hear, out, had rental projection. start years loan. one I have business it's necessarily energy can mean, the with you a you become? loan. do three the you know, as the do we you about in the upside's you what you do should which this out, And of think some as service slide, know, a know is So you I not wanted just

before pandemic XX point six required the shortly loan and want under got to according able of couple as eight that's terms the point that were possible. get obviously to gas that, month megawatts We've an to to then we little we with quickly agreement definitely, and building as bit to from six our XX hit. up. units period megawatts, achieve back Yeah, [XX:XX:XX] stumbled get the backwards of here those eight at And on customers. start we a We're at a rent oil to the

As in year. active be hired prepared doable. two XX of very the want about XX But website. the We've megawatts as know, remarks, We've salespeople I a got said and our to we think, We've out a you a be megawatts end gone just well. believe I of couple a that's fiscal rebranding megawatts rental pipeline updating I identified about strategy our by growth Eric quotes quarter. there. through is modeling will

of is room from So his a We've The medium spun lot rental XX got markets. a still the kind on see as is about multibillion market into being percent, this expand. said, of The percent. approaching margins small the very just XX we're a is, really to fleet can marks. rental up Eric dollar and getting a porn's IRR product fleet sized rental probably

build that can pretty profound a to So these success. a the give our our rental get us fleet to key ability profitability. it is note having really And the out there, on Goldman from rentals has to more impact we

least discussion think you lot mean, know, you of I public a, is [XX:XX:XX] Of course, there's or to lot your hydrogen, know know, this that at it. about activity of do a and then I meaningful when contributor that curious, you is a just realistically on business? a helpful maybe

to I've That's really board. for hard need next I a meeting [XX:XX:XX] our try answer and a week. one really answer. good that to board a question to got

our around You months. hydrogen there's your lot what's megawatts, think have The definitely a Las know, we the just much you the for answer Vegas last recent know, four in When that natural said, driven I seen order inquiries years, more path? we a last of got customer that's much more six in is, interest. site. gas the we've hydrogen six

So We're utilities I customers know, seeing never energy and know, before. hydrogen hydrogen. at talking providers you seeing we've think talk more, levels you we're and, more about about seen

I at really you lived today's back five consider feels hydrogen. business if behind know, Schwarzenegger multiple very our what This with to easily would you We in percent of there, I know, levels. couple lot more ago. on years This a many our be, don't know but XX the say, know, faster. the maybe you to feels hydrogen. through sold like I So significant, it We've hydrogen there's different. original first of you years momentum got could you next out grows XX of and quotes highway business

development Our challenge sense There's is hydrogen late want spending early spend on be a R&D I being either. really of and to develops. don't to the and fast product efforts But in development how modulate our lot market to no dollars do that.

a our and opportunities, development managing to in product our key. really development efforts spend the R&D think way match So and the market I

or [XX:XX:XX] Kind just of minus on last couple over of a FPP quarters, maybe lesson the the it's plus me backlog, you for know, million. EPS been

kind and curious. stagnated little that's is needed you range? what, you bit thoughts you know, on break think to Just, out what do why of that of a kind of know, Any that

commission a to cancelations, nothing a Yeah, would and definitely and idled big able be that there of of either didn't [XX:XX:XX] couple big, out couple of and overly mean, had sites but I a pandemic people things, construction the We lot say We PCP's. a or hit had their we facilities that. that positive folks had on I actually halts commissioned of because units. go see significant.

initially, good or to because of in on of the I a couple pandemic put not recent not combination XX hold here some We've the think units next days. XX impacted coming more had the some commissioned of FPP us. signings

that So to every continue grow. quarter. challenge obviously The we we expect to is built

impact sites or growth, we the term that that concerned pandemic. nothing, we're backlog, cancelations new adding have get not if past we're if So long not but we any the of once

Ok. [XX:XX:XX]

I think they're.

on we state [XX:XX:XX] from calling have Oppenheimer. Please question. line, Colin Russell Ok, the your next

how the longer about some could you're You a supply down move able the at Thanks little having that of, much, know, term our hospital? talk with in [XX:XX:XX] bit guys, time with up folks inventories? chain know, any you turned little impacting so keep and that bit where is you terms to towards a and

question. Great [XX:XX:XX]

we Mark our and a inventory on As get, of incoming the But by QX achieve. based done said, revenue turns great has river. in I And pop product up level. or we know, job year. team run, to on fiscal end our see water Kirk definitely reducing growth prayer a the QX and with the in five materials QX rocks turns you the The lower and the leaner we his can improving the to I that six think target you think a bookings

to some have suppliers. our We of seen challenges some

And actively shipments working suppliers don't to our don't little levels. but to orders, we couple more lose more that. to a in be purchasing inventory are increase that want we've so we with to skilled get in and the resources be bringing we're on frequent want doing department new smaller, because little us more We're a more because got nimble a our

the really And the world, it's definitely impactful. but sexiest not so it's business in

up six sheet. know, two cash of to, from on XX is turns balance you freed million Going dollars turns inventory our

six from Ops cash first what see the we've months. and quarter done what this for was can You

We to So the really for old bank, cash mean, us. fashioned. I not revenue. important take we're you think

couple key and is the class of our managing for chain for so And I supply years world making next a think really us.

then back business? and you're you're and staffing some measures salary covid How in think around at should terms and to of taking my where we about people around bringing regular levels. salary Ok, [XX:XX:XX]

percent the folks months. question. percent XX those great the management And Yeah, [XX:XX:XX] in took folks cuts, mid-level know kind for never been took myself a senior leadership of put at September. The team. we months six cut. have of and pay great, most the cut And of of a And had XX place the salary all six pay end it's back a

people a in our bit. furloughs, And that's so back The ways. going little that took impact to OpEx we

business our that try modulate to months And time two and And folks and back in sure on month safe. and to recovery so we came those and we really a three people portion of did get make months. a based

going think There have that are now we are levels, didn't based we're back. folks back. We some back, I have shape. bring on all business did current come come people that good to So

one And so about and or nine XXX during XX about or low about furloughs I today. was the our point people think hundred

the plan. we before basically I kind So we XX of I people we've get think brought only covid, think good done a business facility, covid, back continuity performance sick same general, levels But that. after about we've two number We've a good had and and so, think managed of really I some XX had job. in people, the like

chain for I that hired supply grows We'll be us think hiring forward, business of back. But a I going we revenues continue to So QX, back. salespeople, think higher we're building it's people. QX, we've And add to in QX. The just going matter people. expect to QX

more So is positive. fun it furloughing hiring Much folks than that'll be people.

Perfect. Thanks Thank guys. [XX:XX:XX] so much, you.

please Rob, Capital, Brown. Rob the on Lake we Street next With Ok, line, question. state your [XX:XX:XX] have

nice afternoon. just orders more is point I a sort [XX:XX:XX] orders you there? in? And How Hi, good pipeline on you've nice last what of what at months. order of the get over little of a this visibility of round wanted are and areas kind the the They clarity couple seeing to had of some strength rob. the

seen that's being and covid order out Poland, nice had from in Romania, We orders come Yeah, kind think, of little Slovenia, back a flow Italy. Europe nice first, a We the quarter now. of [XX:XX:XX] then saw a right from really Germany. order great saw We U.K. I bit question. maybe from the We've

And great. of Mexico is started we this poised have The nice to quarter. back coming online. wake the seeing We started quarter Australia end a up. was very The US so quarter, seeing that

U.S. the of for So the I think bookings our be will this current quarter. biggest portion our of

project That That mentioned You four in on first Vegas. Vegas. the had resort Las a development we is resort our major is in strip. development that Las megawatt

cover report So megawatts that's That be a our will with building a of nice atriums of from type project market order system. us. THP new four for and that's

have, lot and the quickly, in the going covid wings account that already but clipped a or you of force with the we world. build momentum got they've get two opportunity on XXX unfortunately, started have excited And national projects different the had to we're pretty momentum January. that one folks their they going direct know, around really I And so think installations about we've covers sales before

excited interested with we're the field. least have behind getting the we vendor the parts that balance sheet really in running into that with be to at issue about and well. So, really we us, about refined relationships those the So expanding the have now Goldmann and We're products

covid. year getting we're the year, of And this half so you about, then next into fiscal post hopefully excited back know, and

market, [XX:XX:XX] where and side, outside the to oil and really come of couple are seem happening? had a of think rental you units back are rental or you you gas in In be strength seeing the you oil gas

started expanded some gas. customers we've grow We've other was was and and really the Shell house renewable gone kind Yeah, Permian. now out few last launch to oil the more [XX:XX:XX] projects. months, we of kind then oil into of gas That in CHP. with customer some and done our in We've projects,

And so some and is got gas, pending percent be now oil to time. not XX is so, right to of that our going pipeline say over gas. closer interesting that's of going I rentals probably and I'd We've percent think projects renewables and oil are XX CHP. XX flexible. we're But that XX pretty

more just dollars pick capital opportunity see or We see I prices We you. above Thank purchase XX more is is XX. [XX:XX:XX] are oil it rental add, spend a gas want Rob, and oil in opportunity barrel. to up. below

in spend Gas gives gas have I a using on. think can't oil capital out gas slowdown of market us a they and kind of If still product shipments and So get hedge a to natural customers then of so oil do business that the against rent having the ground. product dollars. in they'll and operational rental dollars,

having us which gives of sides And kind important both us of is that I fleet a forward. going rental for hedge, think so

Wainwright please question. your next Semir state H.C. from our Joshi, question which Samir, comes Ok, [XX:XX:XX]

my Thanks taking question. Thanks. for [XX:XX:XX]

level. the Just to follow to four little, up you to having is expected you two the it, has the on Colin's that been question And about go at this be and to point how Dow said quarters. couple next also It on it access million increasing plays of over feedback OpEx. up project just into on data will the your

do to going XX how million, your here to is the OpEx see be the So our. goods we given from that

know, [XX:XX:XX] business covid was as result I'll actions take of million. that. lot look furloughs And at did potentially that plan, I of a towards of then, And expenses, turn think guiding on you percent slide we've into goal. margin range the low the to point we deck given five be pre of than taken that at the previously permanent reductions. a and operating a three to end We we're being our And point should in yeah, lower if continuity those guided you the even the on range seven goals, all five that. it the XX

So think your to million over year. XX that I improvement year gets you

compressed the [XX:XX:XX] Yeah. they as quarter just because QX entire think, Eric had items. We hitting remarks, I some one prepared the And the almost way one season also, said, time his had schedule. IndyCar

return And in not so QX to that's QX. going and

tied for We was Goldman. around Part program. refinancing bonus had non-cash charge of the our also program bonus executive a

quarter. one that that obviously hit So in

we going And so legal got that some vendor got. I bad on the part with think expense

end And not and range. our QX, going pretty good should think so QX we wise, good at QX to opex as as be but be of are the low

gross higher and revenue rates product revenue margins. we're as know, strengthen You margins and returns, higher

I the QX so, about reduction know, you a QX and think more see alone XX if improvement dollar and on, of our QX about OpEx was negative year so, And a more year, continuation over dollar QX growth you bit EBITDA. Also, focused if higher in should business cost better and so on should was very of continuity five was plan, you you million QX blend. and margins little million that. revenue QX QX, think in a big is be look at

a got QX, million really in dollars one be get we opportunity So park of to your your a improvement big to out could we've even of QX. If of quarter. up in could pick five close the positive

two it made Yeah, Understood. mainly one so time that bracket. was this and [XX:XX:XX] look higher the charges have

rental. the of solar the on So to system, the it's energy moving

hundred Just broadly the the speaking, to thing able customers? and The million, would there million, room if that is money enough have enough instead of had you the is, business been is if XX you? you question rental only make secure for two stopping

time. getting question. I took in. some a we The and business it's going think at rental great was mean, the I zero, I momentum started [XX:XX:XX] rental so us business

changes the product more getting ready. we're said, pages, rental our now for branding some units we're them and just As landing just to standard updated done. I We literature started website, making our rental make

into takes a getting And a ramp so rate. little bit always of new business

You impending know, we started opportunities. zero we had

that Now customer that we're million. getting out people We've we ongoing some experience lists rental we're over XX hired it. contacts. direct The and have there word's have sales and

we conversations things pretty twenty the outstrip continue There megawatts that know, with north really well, to and rate? We've megawatt to get. know, upsize rental would that the already Easier fairly confident that we so opportunities one and that it we hit build profitable growing generate, the capital line as we're can are be of can fleet, our we become quickly. So we we'll and substantially. had are I'll to continue confident capital. if and some I be I'm hopefully to think you continue more five move the grow And more becomes. And we easier get think Goldman it'll grow the can about, get you I go cash targets. reduce will see. this, as cheaper The we

the that year XX downgrade target. a of to had when is last for achieve percent work? or a on that Is can't expect basis that the Just one, something one something entire you that [XX:XX:XX] you is

year. [XX:XX:XX] for we You know, to expect overall do the that are annual that stats

direct percent organization. had already our XX nicely. So very that have from of of sales that couple contributed expect revenue to We've total a come wins

multiple those is a looking larger first got the second much at wins site. a site, which who's of One customer we're sites site doing the as than and

so And of business the think that for. I kind that's we're model looking

job installed walks. us need of direct do sales, though the And, kind are the our involved component. lead. equipment, taking know, distributors you we're helping for they Our They're service we're even the in

or and to that a which global not regional business it away at and larger distributors meant you a much take business relationship, spend into our from business, distributors to it's know, global So take turn level, scale. a our a

of Obviously, excited new for and couldn't get And pandemic they this organization sales impact it. ability the the so we're together a plane. about whole on

our market And in of, sort timing product being in the there's you lots can home of sheet I mature leveraging that our on channel focus having right really think into But distribution then about the place, know, more being enough our balance place, single runs. wins so to turning of the and of the And that's it's the changing. we and opportunities. spend be place, where in being right right the

[XX:XX:XX] Thanks offline. other questions for that. OK,

Great, thank you. [XX:XX:XX]

Sean question please next our Watertower question. your comes Ok, from Severson Sean, state [XX:XX:XX] with Research.

Daryn. Thanks, [XX:XX:XX]

you're micro I talking you're two systems of bigger wondering targeting you you're larger about, the in getting know, you those in happened. days of run correctly, it the as win it that's megawatts, other business, too. your just just these service turbine I And turbine levels you bigger or you into solutions seems to energy were larger very understand if know, targeting, get mean, if more orders. you changed trying or recall in competitive the something seems some a competitive, like You changed megawatt up deployments what these into megawatts. way the I'm had kind know, like, five you And know, industrial at Vegas, orders to because one just and

pointing got us megawatt combination eight sites was a get and in carpet so make with [XX:XX:XX] larger sites so seven, other decision. Yeah, more done we've Canada six, reference five, the projects, more we Australia, just it's that We've that think sites obviously to I of customers start we great helps some one. and big a to do more

megawatts. XX roughly to up competitive we're think I

and going over bringing XX at partner got look would another that probably we'll over where with start You XX some turbine partner conversations a supplier megawatts. megawatts different that until we we've in in getting area

to have customer meet to opportunities there's do some bases. we one for may And megawatts XX us we the kind accounts, think those and again, I when plan more kilowatts loads have get so to to that. to national And of XX face from

XX also that's to definitely, part we strategic bigger more projects. I up scale are But so opportunities our at megawatts. seeing you're plan. say And right, would of And

to like be. if we're can or especially any whatever or on off use we there's turn we've units, Bigger thermal thermal to to it competitive, off. don't cycle on time And know, in quickly match the if customers You electricity and either fairly they dispatch want multiple machines demand, variability of may load units. got if the day load demand,

looking about XX know, And XX [XX:XX:XX] into like megawatt megawatt, it's mean, that something anything there what is that at? feeding into order. machines, I bigger would, bigger your your competition up a lot you Bigger, technology fill loads, map? a to of

the So technology roadmap? just on what's

off The out operation. said, obviously reality box that versus that there, help we've into line. XX Yeah, us being very doesn't a that's for get in We got focus. reliability goal, we've kind we But think on XX to the of of really architecture those again, up XXX Magloire product our haven't same five not you that standard can up And we're some seen to is about set service really high going get catch of doesn't megawatt in is until still that think on do energy is the for know, to address, you product lab The the side. XX-megawatt MX move needle I XX the revenue saw to C my loads for the a [XX:XX:XX] architecture XX latest the wouldn't we change. strategic really And new That do the the to we the obviously and to been different. the with us, megawatts. We biggest relationships. us projects got many line. have I

we revenue that's reoccurring we You and our margin every our our RFP make day. new model, that OpEx want fleet, whether subscription to our can sure cover distributor every high know, rental contracts,

sexier you They've times in what standpoint, got don't a revenue know, are And their people three you thing huge sustainable strong with so, grow I And like our models cash responsible is four business in look those to other the I term. a shareholders. is. do or And seems and way, at know, you for know, space I but from a long build think, OpEx in burns. and ours best a know, generates our a it to that foundation profitable, they're cash

Thank John. you, thanks right, to. All [XX:XX:XX]

questions be at further no time. [XX:XX:XX] Ok, there this appears to

two well, very a today. I'll just well you investors like have believe [XX:XX:XX] see can Excellent, goals where that true served during service model, the as in you. unfortunate their our clear plan pandemic, remind is done. companies strongest I'd and our which defined very we I say business objectives business as that a to of global pandemic has highlight history we've closing, the to something not that the quarters have that many thank energy presentation reported in in the value

reoccurring And so revenue margin value building. it that I the think really high we're highlights business that of

not the marketing landscape. a so different has why climate [XX:XX:XX] up the, grown warming, and the we've and of recovery. different hydrogen positioned ever we're happen. up pandemic. climate the history kind think Paris green spent energy ESG. grown see capitalize population oil know, product global lead going We about to can't on population activities hydrogen fact the recovery, U.S. it's decarbonizing before today It's to with to They economic as of patch talking blend wait percent get XX said the It's energy on genuinely new the our changing the want green And been reason to that I a and you ploy. has directions some Because of climate there's money green XX US and going accident. Lastly, than and economic energy generally not believe election the the better is a in to rejoining going to be accord the being is on side of green recent other the obviously change. with change, they percent global and and to That's be that

and see climate with bigger that change active grown voters, in up become, consumers, you more their companies, higher you're going ranking know, more those this direction. to in so, And folks as more have move

to able I landscape. we're asking the THP. going As see gas customers us change an future putting that we're and said natural in before, about starting fired to to with hydrogen be They're changing energy how our know even

very going very the about about is, the think. market product company to So energy very excited where is, excited where about excited the is where

to forward As everybody I hopefully landscape. seeing we're positioned I quarter. talking you. changing results said, upcoming even well look to energy in on capitalize Thank in this QX better and about the

you teleconference, [XX:XX:XX] and conclude enjoy. Ladies does disconnect lines may and now this gentlemen, your today's