Energy Vault (NRGV) 9 May 232023 Q1 Earnings call transcript

Greetings and welcome to Energy Vault First Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Laurence Alexander, Chief Marketing Officer for Energy Vault.

Thank you. Good afternoon, and welcome to Energy Vault's First Quarter 2023 Earnings Conference Call.

to Vault's is and Investor available we be Energy quarter updated website, reminder, this will presentation during earnings now referring a earnings an release first and call. As presentation the on our A today the replay website. Investor later our on of of will page available call this be Relations recorded. now This call being is

and results statements If you Vault's please could to of to Energy of that release only our this and from differ way, cause list XX-Q subject in earnings from may forward-looking We are analysis be Please differ statements forward-looking referring by now. caution events the a object disconnect to our in results uncertainties. forward-looking to to be everyone a and anticipated statement. variety Vault estimates actual risks filing those their call that are or any guided Energy note These contain any factors in materially that future for factors. of

to revise undertake purposely We update statements, obligation any except required law. or no by as forward-looking

we details, comparable note in the certain to discussing information. addition, and non-GAAP reconciliation please a for and presenting refer will harbor release more financial earnings be measures Please our disclaimer non-GAAP GAAP presented measures. including to safe In that

Piconi. I'd call time, me like Jan Chief Executive to van Piconi, the Joining Officer; the today this our hand on over and Officer. Financial Gaalen, Robert is Chairman Robert to At and our call Chief

like to And everyone I'd call. quarter you, Thank earnings our Laurence. welcome to first XXXX

the storage seeing seeing. market and along metrics long-term for we you've with positive But to of some the announcements. driving lot energy what dynamics a with what a all in market customer the shareholder for come growing including, start to remains like do normally financial on robust and very we I'd solutions, to are focused the market company. have share in as we're expect are value as We today, that them new key

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and about Of near-term $XXX our These our very in gigawatt most million is of X Almost and revenue us announcements confidence give revenue bookings. this it, future new our XXXX funnel be building hour year this beyond. of related EBX or about amount, high energy storage bookings make future into and dynamics that conversion gravity XXXX to will our growth to continued project technology. all will up the

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gross is range margins revenue reconfirming and minus we're full of such, to adjusted million. $XXX EBITDA XX% guidance, which to $XX million; in of $XX our $XXX million the to year As of XX% million

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of transition revenue. Let our to margin focus convert funnel that and is opportunities is growth. to now focus drive operations and team what the expect me bookings continuing a that And attractive on and bit of fueling commercial our tenacity to our we

XX% going bookings by hour, the as gigawatt our funnel near-term almost to forward, Regarding above. XX mentioned grew

of grew proposals XX gigawatt part almost hour. XX% quarter-over-quarter our As that, by submitted to

the awards. funnel, successfully to decade. large grew are up, deployed sum opportunities been our the our where Moving and To hour short as X.X XX% in the through project we our in has awards We storage into on did one in to our by than remain more past there an hour. playing in XX% energy years attractive, XXXX few it these market, preceding ability listings in all we gigawatt to confident by bookings X.X convert grew gigawatt and growing

an We point therefore, of inflection growth and, opportunity. are of at

smart positioned the multi-storage profitably are to well on capital is than exceptionally our as we demonstrate market more recent these We and unique as faster grow investments. very most that also strategic of well technology belief developments believe based our deployment for as

that, call Kees this never to in Kees? about the financial are results I capture been discuss ourselves over today turn now Jan have future. to Personally, we excited With positioning our to more detail. Jan in where I'll

Thanks, Rob. Good afternoon, everybody.

with and XXXX, quarter reflecting storage from million, expectations first the $XX.X battery execution the revenue of line projects. primarily For and was progress in our our revenue of earned

expect revenue going tracks our last of the we noted second we half a the schedule. deployment revenue cadence this As quarter, as step-up into in year significant project

of XX.X%, better-than-expected We the We of profit expect million prior recognized quarter, and gross of annual or Operating about guidance from a second a XXXX quarter to quarter. XX% in driven to year. million, our $XX.X in of final driven loss realize compared quarter by projects million revenue $X.X the decrease XX% nearly storage quarter the the third margins for $XX.X on quarter ability the by XX% of of operating growing was a our QX. revenue of further margin gross the loss during battery first to to earn licensing in

EBITDA First quarter adjusted was XXXX negative million. $XX

reconciliation release a to earnings adjusted includes net Our EBITDA. from loss

noncash back $X.X we noncash key net. that item interest million key item was The stock-based we compensation. was The in $XX.X million deducted that of added income

quarter and March we translate cash projects, As leaving cash, main which restricted into XX, to to XXXX, continue of beyond. cash cash of for use purchases cash, The well-positioned $XXX revenue, growth storage XXXX battery throughout in and equivalents future will to million the objectives our had related and equipment positive in quarters. progress towards gross us margin in our

the year want backlog. full I revenue million $XXX guidance to Lastly, million contracted supported our our range, within $XXX XXXX to reiterate by

We and agreements. of supported margin by to our projects licensing target energy also XX%, offering our XX% IP mix reiterate of storage

various to continue services needs with demands. customer on consulting this and and will construction based complement We

million approach our $XX additional royalty we negative $XX expenses of and as and to disciplined continue We licensing our operating a to on agreements. to forecast EBITDA adjusted execute negative million maintained

over the turn I will Rob. With now to back call that,

Kees. Jan Thanks, Great.

storage just that they thank ecosystem and especially team through, underscores significant Energy way investors innovative want Energy support own company. for focus. share make of and we groundbreaking and energy volatile are our clean decarbonization. and partners is solving Vault problems our type the questions, development thank a to happy energy continue of in of want customer of continued purpose customer our I I dedication The live that our I'm your the as getting also in employees to energy Before and their the our progress broader and on mission today. we've here to results and make to the which at that the markets we complex that This existing as transition. Vault solutions talked

we now ready With that, operator, questions. are for

Instructions] first question Our with [Operator Joseph comes Guggenheim. from Osha

This Joe. And pipeline the is on touch for to there. actually Hilary first I on wanted

You we'll you just composition pretty any could what in for and that color if rates I'm when submitted additional in both become business? uptick had awarded the well see of timelines big like that proposals on conversion wondering looks a the projects. short-listed share as as

Thanks, first or across one hear The is Sure. good the what submitted proposals, duration. Yes, funnel, of there of short I'd our no again. Hilary, those listings dominant okay? to awards, new technology and all, about categories and say the

So what European I can and particular, in markets around shorter to U.S. that in duration continue see opportunities. tell the you we the strength, is generally, the the

market our the demand, gravity rest earlier and system. to I'd continue We than see for the of say, long-duration

ways the continue So see highlight want rely and to gas And cases, announcement. new solve bringing not meet then they at of Pacific lot generators and working I needs microgrids, to announced those natural technologies They're look Electric where gravity looking we diesel to do interest gigawatt on a that, in table. from customers to have really renewable systems some the EBX. hour needs following solutions use help to generally, Gas do in on of system, involve, we under the of that that unique to backup X or to our

activity to of So the parts and generally, I to question seeing your part solutions. would of say, first it, our various we're portfolio characterize across

continue had your timing addressed of question, in to flow-through, that The to is second which we project as I depends thing see. project

to larger see as opportunities on So no going -- this I were able start about time executing year, reason continue to why we to terms this timing with lot in these would And not that in do terms last of projects, of we're at year. now we're We to I'll the year. think customers. we of a categorize that looked our convert existing frames, in

follow-ons example, pretty our through So funnel other. move already some set because legal customers basis those our can each with, existing up for we with contracting have are projects that quickly they're a know and teams

So days. those can in XX move

we of And there's where some to on additional so those or to And timelines see expect establish chunk X- there's to beginning move quickly. involved, there. of things relationships more those or big X-month we're permitting move customers those a Other new would basis. will a projects

meaning requirements cases, close do have on time on to and chosen. The in, to influencing so may third contracting where other required actually approvals, approvals chosen, there's the us or customer lock of permitting end. things been issue the then thing to influenced timing to has an where by final in some additional with to us, on any like award the be their some they frame And close we've that

of customers still more some a that into is happy booked example some are have to move I there's that, required an actual that approvals where contract PG&E are think good final procedural, while contract we and announced which Utility Public did happened line moved them few that weeks a Commission their ago, and frame. with then time a approval, just with was an in and to We expected

their example, expected had So date as And it set to in when few for before use an as a that. approval. May came XX fact, that weeks they they

us know a So well. typically, potentially basis. solutions discussions things And move guess company. funnel. I'd in can we types those that those the investors are say the very some flow is strategic of have I investors thing last that pass-through of also the will do all on about that They through influence and obviously

plus anywhere just in duration large I I'd range say, to particular. pending from of to and So projects timing longer some X would it, XX days strategic say months the to on up

Great.

margin of question, the Second profile gross on the business. just

kind a there? and between little more and you revenue you kind this And as that of to puts the different structure are as if well wondering year, detail beyond mix the expect cost margin what can takes how look might as the we ramp? provide Just see of

next asked you since we KORE Well, Power. one things in of Sure. year, about the today announced is the investment

as next market we're and at to our planning over we -- look by the we X the as as So informed X horizon, that customers. do

So we today But a things of our we have we -- enhancement planning do of lot customers. with do what with the to announced structure. some of that margin

of know, range. as our a this obviously year that expect scale XX% project revenue battery volume should is you As we and reaffirmed, still we range range as enhancing XX%. on effect over to this we be slightly year. of this building to execution Everything XX% XX% that and an had a but performance And We on doing quarter, for to our we're margins. we XX% maintain within pure better company as have

year. the this first of demonstrating system, course, to be going gravity we're So

them we As there way in out the building evolve benefits those at systems. on chain, we're a to the going supply and margin out, in gravity building that across our look to expect going we're be volumes to structure increase will

say, on, and with our signing supply As actions continuity. not well, all chain and only the focused margin, would particular, I looking agreements but short even in at the types of now market duration we're we're are the partners taking

in even that very they're in that's storage, case and focus the I independent to to the energy companies that encourages with commitments. ensuring arena, the think, It's led content. interesting, as here investors legislation, providers access domestic own to lot from actually on focused of understand or deploying are ahead pack be, supply geopolitical power strategic that can industrial that which local the meet IRA Jupiter why and risk actually to large you have I And their seeing the companies, mentioned, the what generally of the U.S. they're a going with discussion, the given we're which new

well out front years I continuity, net-net, a how this of be given and expect forward our supply will were driving So that as we're factor have you for this and And company focus about. of chain a going in is that us as customers. And hence, annuity independence decision aspect benefit ourselves, we're that. on margin-enhancing for to the a positioning that in asking energy

in So next X- the planning to X-year window.

comes Next with Williams Ellinghaus from Siebert Chris question Shank.

Robert, this. sorry, I'm I missed I think

about I didn't think repeat project were I making and that? some you you hear Could said. just you comments what Texas the

the or from last You mean the question? during prepared remarks

Yes. No, the remarks. prepared

Okay. now Yes, project, into I progressed the in they're shared into and of Texas, mentioned our second as and I just pilings which think And They this that's Enel the -- a that's things system we've civils pictures and built. the BX that through Snyder, gravity that being getting is in well. phase. foundations few

agreement. tolling is a that So

So XXXX. fully we're that and of project second half building that out, expecting we're project to be online in the

why have color margins have little had been more Great. any that you and than kay. a provide might can Do expected? you you

ensure two in the any schedule-wise would say would with problems costs. to the supplier terms executed we is well that that things. schedules of I'd the and managed base need Yes. and relationships local issues trigger additional to on maintaining don't in any that One we or the be our field maintaining increase customers

for but some time income. licenses terms aspect execution, into in of doesn't better the we revenue And So the have I'd do them. is gross down ongoing battery plan we're associated IP now contingencies I'd the say IP other first ahead say, some recognize you're seeing piece for of licenses, projects that example, pure and the margin one second of with in is managing any how line, any

it. that buying projects that reflected was we that I a we've We margins, only So day, battery win the know we of lot them. we there by of we've unit to given didn't positive to the because -- won started in been That's gross and announce them earlier for underprice clear, projects our example, the We've that fact these space. other at questions negative the always had didn't companies highlighted how projects, also has in pretty have about end economics. but differentiation We them. Chris, be contracted that other as not first margins. couldn't of provided companies

might as the on in think We're regard. end, mentioned other the their track things projects because or meaning to I of remain you'll happen can and field. the permitting will customer-driven of market, And on focused dates things expectations changes, So the that in our customer meet very that we reiterated, quarter-to-quarter, execution. on all and I while ensuring we on as customer we on are that expectation. Obviously, see move focused

and of month on and because or we model. about whether things an the our current XX%. within XX% as happen this you're to out that good moves end, sense? did two as Now building any are in date quarter, we their above stay of update, execution I so we make this in range case, our stated those said. can things we range EPC And in project feel in a Does managing our that But the that things time

domestic sense. makes like saying What today? color for power their it Yes, look investment? they the more expectations us Can production KORE you on give are any

to announcements, I think here fully integrated cells next be projecting own the XX Well, public their they're in to months. from XX their actually in producing

those speak updates. company. So to give they're already U.S. a that But going to and they're

IRA to clear, the legislation. get just -- of formed because isn't So KORE be newly didn't

lithium sense So of get going could announced. to just a they very way make we very, They've the that they're be large are operation as U.S. in some company. from a expanding They a of that here. and been things you today, batteries

our Chris, -- space. customer, action we only in our so So meaning companies the market, took just -- looking as that to many not participate like of we're a in at

companies advantaged reality in content. Many domestic will be having that in ion of the that Now of a should U.S. production local lithium terms become

both therefore, participate However, well we chose it to preferred supply one and early around some in advantages of as get economics an by actually becoming as which adopters. continuity investor with the

by players And expansion battery I content to X behind make one and -- factor on why it what's the the heard And you the X the States. the for move. announcement of we're on independent scope to a think Jupiter in so domestic with largest of power X excited that's of United that

you of for give timing of Can things? locations, those sorts more us interesting. particularly are awards gravity types any customers The or of any or flavor

the are we of pieces providing regional be the providing guidance -- is now, regional going Right -- to that. only some

to is to that projects are we're a going are And be on into they are expecting projects United bookings. it of outside as to the working now So that are the already those contracts we they -- States. convert

X XXXX terms we So quarter, a X the to over the be that new most into about will in of very not bookings of awards fourth us a most and things now us gives the that it things good we're of out lot given good and forward be year be this obviously revenue coming size hear but business us and that will we're of these the makes to hearing And from of some be years. there feel revenue XXXX, gets going that growth even into announcements, contracted already we've may executing the executing going the terms be in bookings on the us building deals. recognition to for going future very in very strong of of years puts But that in will that position only this you're visibility.

from Chardan. Next comes with Brian question Dobson

in It's Brian for Pendy Dobson. Greg

dovetailing I and guess on one that quick one last question. Just

mentioned system. domestic there think unique showcase showcase in say technology X the it system on would a that do that's towards Texas it's the fair gigawatts outside when least U.S. are of the China You XQ? in the Or to that that will at that having you anything Is more clients? completed gravity still about

Sure.

the China say scale. So I'd system first sure, what at operating that be will up and is, for

ahead an also global be the market So but in we United system, important is market States our systems. Texas. pack, worked the be gravity to well IPP having of will they clear, were That's also that first Enel, for the and they with system largest so collaborated on and the why

in evolve remains on think, today and have at energy the legislation see here I months. focused with those, doesn't So begin the to today, we the we'll build XX, that let's continuing the to that's going from content, IRA So capturing duration duration to giga for very Interestingly, the United to But in X, that event. don't go but domestic in important, the we're factories. gravity to the, any market largest in opportunities say, for particular, gravity. longer coming X have right? XX XX, to X looking hour, We minimize to we're States primarily X be storage short it's

efficiency around so We only not round we achieve that today, something have technology will China our the demonstrating it can And operating the with and capture but I think in can that. for we efficiency system. that important very play an the important role

markets, of years. for about good need know also more So talking as Australia, I the coming market duration -- long we're those markets solution X and becomes but be gravity Europe, our the in in will those a

with Next Thomas Boyes Cowen. comes TD question from

the see these hydrogen And in dig winning a success that of you're kind given But to would solutions apologies be incorporate you pockets that you remarks. geographic to the specific covered where early first, disposition bit type prepared with Are just there demand you wanted awards of on a maybe I there. any the certain more an of if of customers that with in or green that approach? were basis about think

Yes.

I but we're a we'll connected city would although the essentially what as in is special that Calistoga. just which the say Calistoga, be So have U.S. well, on generally, microgrid will in microgrids focus building

potentials areas in emerging microgrids. That's that say, even to planned United I where unplanned in have certain markets, microgrid the where build generally, use and okay? you the regionally for And shutdowns, a example, are relevant a would primary solving case takes forms, out doesn't of So very shutdowns but grid for for especially States, case exist, case. the different use is general to that

that be will technology market in locations in not proven out certain I a long-duration So storage. example, is something the say for there's multi-day scale be applications for it's really that's today. targeted at where would need, and at to there's certain going The reality any

Pumphydro going So large the scale. to be one of a that's at our first not is ones gravity

capability. doing Black this hybrid meet component multiday grid-forming to in with you unique lithium-ion a Start of it's storage, to batteries we're and what add If because it it also has

a So longer-duration solutions operating at going mid scale -- world. longer to the we hydrogen have and ultra-long hybrid unique no solutions And at next medium needs do we're if corollary duration those in the really to is I we're in type market green the is therefore, have what for that have market of in in potential a of customers multiday of we're to to use think in of has and going see But where the year, as a first an this a well we or the very needs. you be, out where to up go that type type of scheduled as some that duration that storage position look today good meet some these going call up, heats multiday market. that

maybe as my follow-up. And then

previously to have the just update you Just had gigawatt an as a you with projects procurement where -- work X backlog you of for you're maybe the seeing your where the being think to gigawatt going is? the be of kind undertaken with traction I or basis How do And taken have customer. operating identified hour been system integrator by hardware hour this battery approach? now integrator relative

exactly Those are said. model. commission there. represents hour gigawatt you are projects doesn't That X It under those called build in deployment and first Sure. transfer what the stop to that what's

service doing one of we'll So the some cases, in post additional also doing turnover, maintenance be agreements, we are management so including management. asset long-term

have have your will to and else with that a and margin utilities over we can model long-term those. the themselves. those them that standard those, duration are for rate that X agreements, outside investing us But where streams utilities you revenue or either question are solutions of power players shorter tail model, providing longer for have that seeing for the solutions what base public is asset pretty example, So much do we independent of in those

solutions. and tolling Power where system Green owning agreements and Enel Electric, So in of business customers in be they gravity system event. systems be those fact, with those to not both have our customers some Gas to and in want own do we our any We the model we cases, compete those. And it's signing with will mentioned those Pacific for long-term hybrid

type Now we cash nice don't type other like streams to of funds, sort forever. fixed I and of funds that have own say pension there's these cash or long-term to those would own predictable flows. of groups and other

necessarily not model. that's our So long-term

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from Noel Tuohy Brothers. question Next comes with Parks

questions. of couple a have I

You've of a reach talked geographic product. of about bit sort the gravity

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that technology our obviously, involve our locally some there with there. There's Sure. China gravity in been announcements using, partners projects multi-gigawatt storage hour

out way, other there from announcements even socials. are lot absolutely site And want But a by follow-on those we make typically our that -- through the across interest have there the so public of the locally. already shared or to that. some We and of put announcements we And that world have go don't have. customers is visit

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initiative. is One particular of Zero Carbon them Park in called the

pumped Power, being partnership players largest and largest of And some are which in Three world. is management some with things those the Gorges engineering the the in in like China hydroelectric done company asset of

top public to to been that's stream which -- those that's to going us. see, So a all royalty. that and royalty we've drive royalty project were streams off encouraging for X% all drive Those that's

two? year for Great. over And side, with or customer and selling software or technology particular that this on the everything to response coordinated I that's proposition are just was been having feedback there past to milestones you've enhancements being other the help or add a things system wondering through any the ahead EVS, on

say two things. I'd primary Sure.

of battery happening for to about the first with all, over and new let's We're year software this and that system. systems talk year this turning time. be First what's just first going our

to turning are going time systems. and that first So the over these I'd is milestones say one be the of fact on we commissioning

So there's X have year going and be turning first to them because projects XX that's be this of -- those milestones, the we're will we over.

we the system store so Secondly, but we can our solar for the not core storage battery call that of existence operations running can technologies, in wind, were that in -- call generation and technologies. as the is other higher-end managing even energy storage management other system management manage a our EMF, and also that other system software also our but chosen the what we what capabilities only of be is our management platform, addition to which system, well energy fossil, there's manage the itself, energy

that milestones system. last So and higher the see the were to those economic for utility we X get which to functionalities, system into energy for that functions for example, are charging by providing our large selected, things of going dispatching, other X like Western the level management example, that months, over a those a are you're

to a to higher which deals, in to some and will which managing those see we're will these milestones going will enhance in of and battery the be turnovers system post addition be the capability. content and software those higher higher margin milestones systems, later our into are therefore, result itself, a of first year So coming the of, XXXX. And portion generate the going value-added

this for There to floor CEO, are Piconi at further Robert like to questions the comments. no I turn would back time. closing over

to thank Great. I the Thank call. of questions. the for want you. for you And joining everyone thank I all

on, new We enhancing things join us, just there. our focused as the feel putting one, I them, our driving and you of the solutions Thank all portfolio in partners you've much. come number company. more for and others well about that to some from announcements and saying investors, shareholder progress are value this are and together very and our customers this close and out expect end, really that here provide know them; value-adding to our Here we've two, to made employees long-term executing to good

concludes conference This the today.

your Thank and day. your have you You at may great time. for disconnect lines this a participation,