Fluence Energy (FLNC) 11 May 232023 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Fluence Energy Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please hand over Vice to would Investor now speaker conference to like May, I your the today, Relations. President, Lex Please go ahead.

Relations XXXX to Good reconciliations earnings our and of schedules, at financial along release, section sheet non-GAAP Energy’s And with you. metric press call. measures welcome disclosures fluenceenergy.com. supplementary on financial Thank second copy regarding morning. presentation, the quarter website are including covering earnings and of supporting conference A and Investor Fluence our posted results statements

Joining me Chief call Financial are Sial, our Nebreda, Officer; Executive Julian Officer. Chief Product Chief Officer; on this our our morning’s President and Boll, and Rebecca Manu

uncertainties. to our for refer could facts. expectations and management based make risks certain factors call, cause During could the risks to current and statements this Such forward-looking uncertainties statements results upon course that the and our our assumptions certain and may of to information are not and and statements future for that business company actual relating are historical regarding subject regarding results. therefore, are, Fluence’s our to more Please the Many certain SEC materially. forward-looking impact various differ filings matters

or reliance forward-looking are please as update statements, of no statements You note undertakes on today. for information. that place to revise cautioned which not to undue duty Also, forward-looking new these speak only the company

on non-GAAP we to our measures available the as business. the non-GAAP call in GAAP that reconciliation of view website. Investor A Relations on comparable materials measure the will measures reference also company’s these This our performance earnings important most is of assessing

will with question-and-answer we session our a team. Following our prepared comments, conduct

follow-up. to to opportunity limit the you on over more turn call Thank give call, one very Julian. initial one to During please speak question I much. now an and time will this yourself to this participants

participating who review and analysts, This in a our update our Thank business I on a warm to will progress welcome provide employees send Lex. objectives. and then morning, you, I our to are investors, brief today's our strategic would like on call.

my year. Following quarter the fiscal will our as rest the our for performance financial outlook remarks, second for of well Manu the as discuss

X key we on our million to of record report the Starting and of profit. the I'm in highlights, with that adjusted pleased recognized revenue Slide $XX million quarter gross $XXX

XXst million, not with business of that all Our three lines March increase of digital and business a million as note almost new quarter. approximately demand X related I the also approximately our gigawatt contract signed gigawatts. $XXX parties. and our contracted approximately across $X.X was business services strong orders of Furthermore, of recognizing contracted our was will XXX highlighted our backlog backlog XXX by were XX% at quarter-over-quarter revenue billion, our X.X even of after during is

Lastly, which our the during of quarter. and revenue recurrent a services growth businesses consists strong digital, experienced

to our service is Our for the remains deployed service our contracts quarter rate, deployed based our XXX% agreement XX%. of storage Austin. on cumulative signing relative attachment service Furthermore, the service second the driven by attachment which with active rate above was

had increase XXX% our signs is which These have megawatts our by are regarding from gigawatts encouraged very is but we digital our management. a the do added quarter as of business, of assets XXX result quarter. able thus digital early a digital approximately progressing contract to direction we X.X under Furthermore, still were specifically work strategic successfully. at Looking far. we business, lot at very we previous to strong the We that are

we on previously you highlighted to with strategic Turning like the discuss update provide Slide an to five X, progress. that our I'd and objectives

revenue and delivering are our guidance raising profitable we fiscal for gross I'm year that XXXX report on growth. both First, profit. to pleased adjusted

we detail, ahead able more execution, will guidance are our projects causing of our raise Manu being schedule. to discuss our some expected to in better of due As

that forward to timeline. I'm we're pulling report our pleased profitability Additionally,

you We expecting recall in be EBITDA As previously not may positive guidance, fourth EBITDA XXXX. do year the year we adjusted we're to of however, quarterly close provide to expected adjusted break XXXX. fiscal in fiscal to even quarter be

continue solutions we develop will Second, to our customers and products need. that

As storage award this making of pleased megawatt Rooster and to received a binding transmission. award our track such, I'm report third energy product XXX we that our for [ph]

bullish and and is on a to only experience of well segment that becomes As technology, and expect calls, area the I've problem world. a for on issue to to necessary this make the noted Fluence a ourselves transmission positioned congestion this customers significant very we our storage transmission. requirements previous addressing growing a our companies handful in of grow critical possess the are any performance as transmission one by impact world use as as where around the

growing under have AESC battery and Third, high with we we storage meet ability manufacturing our demand strengthens master battery a our leader it supplier position in say the signed This adds will we Fluence’s solutions. partnership domestic portfolio, This efforts convert any procure advantage. agreement to model agreement the our industry. for to storage as change to enhancing energy another a supply supports I'm cells. that our supply competitive will which a quality pleased into

driver. Fluence as use a and a differentiator margin Fourth, we Digital competitive will

will we cost values Looking transform the better. including Fluence company that a work it the this And as To report end this true one a to with after as month fifth a economy to way Nispera proud sustainability our increasing report as our IRR our approach labor. our sector. offerings is will objective mission provide am circular our inaugural for to in sustainable demonstrate life step increasing forced offerings. publish to power and we -- firm future sustainable an our this begin products, more outline public for is becoming hardware its out a important includes published quickly we path we state our to December. I execute our our at starting stand us report our solutions our has on finally against bundle sales leadership to This channel testament on world last with and Nispera well is this management a to our within commitment our In that and website. of sustainability a products standard as

Turning for X, energy demand accelerate. continues to Slide storage to

pipeline quarter. now fact, last XX.X up our is from billion In sits billion which at XX.X

revenue in of issuance guidance. We the the final some XX% year of the XXXX, that expect directly this we year-over-year reduction consolidated projects for of start the XX% inflation irrespective attributable to IRA awards will to reaffirm of are year second-half act. growth fiscal We calendar to see

we And contract December. XXXX the regardless relative a we I Energy’s that and contract we recall, XXX-megawatt during expected and Australia include: revenues product. our mentioned. over XXXX transmission awarded binding for of our benefit as Our we're Two, nearly megawatt outlook with that call two-year period, signed the examples guidance earnings higher QX of signed segment recently increased conference were million the hour a you Rangebank QX, success And hour service worth agreement on Orsted successes this months in expectations X,XXX seeing IRA. this Shell in to previously project. may incrementally a award few in three A for noting having of ago. represents is $XXX an the It to recent

of consideration without achieved were these the Inflation of Act. Reduction All

to Turning X. Slide

the some regulation see to by pleased that are has We U.S. the IRA of Treasury. released initial been

sought we However, our schedule domestic on to the U.S. the we customers. the content we actions taking but meet domestic to in Utah manufacturing, will are by XXXX. on expect are us we requirement content in still waiting regulations, regards believe are our In production of to start our and the summer facility enable module

Right driver U.S. our production credits, modules Thus, able scale. made be the XXX we to a per are it expressed many expect of will own us as As or incentive that we reaching IRA expect associated now, cost do product. we the not have the customers economies will believe need the we incremental as towards do will our with kilowatt manufacturing the manufacturing it U.S. the a hour offsetting for a relates for go record in volume result We U.S. targeting $XX of be tax of the battery capture to U.S. incentive of margin $XX Section of to models.

expectation income statement From our that incentive we standpoint, of as to account is an will our current goods for on a cost kilowatt hour accounting reduction services. per the $XX and

of on timing clarification the time final However, credit. is change provision years Treasury. for exact guidelines. this the unclear the still waiting the pay direct Furthermore, this for elect The cash could from we five at U.S. first as are the payment the to the of based expect we

our of swiftly. it before the of with encourage storage waiting details as Currently, contracts. any IRA customers final several policymakers content, forward guideline we're publication will and for won act to eagerly domestic our that for moving provide We the the

our remain I regulations mentioned, However, XXXX expectations final respective of being as published. the unchanged, growth is

Turning Slide X. to

We cycle. our aim we to develop setting the optimize supply Report, mentioned, energy sustainability is within to need. and for As the essential the fostering by believe targets storage recently I briefly further to Sustainability which pleased digital highlights that to our implement Inaugural state I'm solutions we vision chain are published life We to promoting the inclusion this increase diversity within by organization diversity to organization. hiring. and innovative social we organization diversity committed

our year XXXX, employees that approximately have which identified senior. a themselves third established fiscal We hire have one of target as includes for

to and you In have is our we committed will the to framework products. also circular see for developing end-of-life management very us, report, economy that important a

which We of we working unethical have conflict That to here the we with that from aligned within of our the mineral use in to our Additionally, are conduct, minerals supply our sourcing, in the at a is ethical suppliers code on rights business sustainable report chains that we robust international ensures practices. of supplier of commit highlighted that policy deal conflict-affected towards avoiding established work. areas. summarized human

a regarding report, a there area letter taking that Furthermore, in values. stance forced our to signed tolerance critical commitment This is labor. an is is zero the

is transparency, can journey. a an our future. track Energy’s sustainability commitment accountability update social annually, impact. drive included progress. Through our year-over-year practices various our our our sustainable and time the also and on Energy so towards its to positive will Fluence targets, so a report stakeholders sustainability company's monitor more Overall, provide line We In Fluence program of environmental demonstrates spirit efforts can ESG to and the stakeholders initiatives working to we its sustainable

pleased conclusion, quarter. second of the with In achievements I'm very the

we we're year. momentum Although to of call a will through progress work the to Manu. there's done, continue this will the of remainder I lot to turn now the look over still we be mindful as

financial by XX. Thank the performance year guidance for our discuss you, then XXXX. for will and to begin Julian. reviewing quarter I Slide fiscal turn our second Please

record execution a forward with second gross $XX than by Our million from the adjusted a of reached of quarter $XXX a record high expectations year, benefited of second on and pull driven half from improved Revenues the profit project second materials. revenue quarter projects more of this to select relative our by availability into of $XXX million. the aided million

XX% for revenue now legacy In $XXX contracts. year will half. our of than low-margin margin or The the our that we from end up the the associated to we of year. through all in half legacy legacy rates came pulled the are second this well set legacy almost into our was first second higher backlog we roughly quarter when turned the fiscal revenue working and are quarter, compared backlog, over anticipate the that of more million by with contracts, forward be Since of second faster we significantly

expect approximately to to compensation, EBITDA, revenue X% of approximately in about quarter million second regard remain our expense operating the were $XX beyond. quarter. is of operating less revenue, stock from model excluding XX% than in growth of We create and and leverage revenue and which down growth or operating XXXX to adjusted operating With XX% disciplined holding expense first expense, this

discussion than in cash. Turning to is line on including restricted with our the million This quarter balance, investments $XXX ended our with we first our of quarter short-term and cash comments figure cash, more total sheet million $XXX the approximately communication, and a the inventory call. quarter line of we with level. Rounding prior decrease first XXXX in earnings quarter XXXX in balance the out saw from second in

supply expectations. battery management risk focus our enhanced chain earlier to and decision deliver projects of Our has ability assurance ahead on to

fiscal environment expect communicated of the the year. should we Given the the in current last and in chain earnings inventory our as through call, improvement turns end in supply the improvements

We do liquidity any need and continue capital meet not needs our we for the next additional to believe to to our have that months. cash raise meet needs ample XX to

XX. to turn Slide Please

both guidance for $X.XX have we indicated, increased fiscal XXXX Julian guidance now As between expect and total adjusted ranges. to and ranges be our billion and revenue profit billion revenue from is the the time an on to previous year is acceleration. $X.X narrowed $XXX $X our guidance based gross driven We of million revenue up overall which project increase by This our billion, our billion. line $X.X of midpoint,

of to to on expectations XX projects trend continue expect our both we expect half lessons be XX-month progress learned from visibility better projects. year improvement previously fiscal prior in as chain and the have the future, This that certain we thus we this time and within year will frame compared as to that prior supply this most we While execution faster the as seeing projects benefiting improved of leverage to second is XXXX. attributable well executed are discussed,

half quarter backlog. revenue into We the XXXX second are also expected our with XXX% our of in coming third

XXXX for previous we on we revenue implies XXXX expect million, to what the higher of continue our conveyed call. to $XXX the higher an notwithstanding in to incremental had two-year revenue outlook, QX see than our for and This see XXXX for Turning relative revenue base XX% to XXXX, period from now million growth XXXX more than revenue XXXX. we to of XX% $XXX outlook. revenues Thus, XXXX we our now

and increase basis adjusted $XXX up implies to We approximately X.X% from to which XX margin $XXX $XX important points midpoint. also of the profit guidance gross that be is to million our for gross between It guidance based guidance million. note is of $XXX increased our an on to this in million previous million,

Julian. to Julian Before that back for would to EBITDA during breakeven to comments, will close I call back adjusted confidence the reiterate final fourth turn like have in our high to call to turn With the I the that, we over ability quarter. I be

like this be reiterate Thank you, takeaways what key Manu. would the to In I to results. consider closing, I quarter's from

we revenue financial with in performance our a Fluence First, terms highest had of record history. margin quarter gross our in and

Second, notably reflected significant risk chain continue battery suppliers. our risk most in make to supply we on progress management, our reducing in diversifying our sales as

as gross and offerings, prepared segment confidence provide our forward this results to we call fifth, Nispera total revenue our standard and fiscal our guidance our transmission Third, expand the And for today's financial increased in accomplished continue offer line questions. Operator, positioned new our ready developing profit are to covering customers, XXXX shown that profitability. value increase our us concludes to Fourth, for with award. year adjusted and in efforts solutions create concentrate we to starting month. are in my to high in remarks. now and take IRR pull our Fluence products time for we including This third by

[Operator Instructions].

West first with the Our of from question James comes Evercore. line

you? Good How are morning James.

was and get to it But it are the customers on on Because is me? quarter? "When a land going -- you and which profitability been and coming and morning had time this so storage understanding IRA and to not year, with, -- Or from it about obviously are expand, time it's getting in total can question me line how me?" good still there's the last as Julian, again know batteries a kind obviously line?" on customer kind this is we just cost your for U.S. their think of, the Great, too, guys. the mad-dash lag now. they're in thinking of congratulations they the and we quick you of question what's needs base I more equipment know quarter, "Okay, on focused you're IRA, clear about scramble right place. focused now about for but What's We've means to some what of assets

mean, I expand margins main a with. James. we Thanks, been a we our real has -- the the ability to segmentation detailed -- our do work of lot driver of customers comes

perform; they going do date; solutions question, that they that that so for that going that value we up clearly, for what are So we going but offer; it they answer them to can it that your to delivered; will long sure we to might that as to be them them what they're provide will We that and running look it. can that to we that this -- were do? well way perform ensure that it, need will very are when value tell be services; that they're have -- keep and they that a they products customers finance

who So about the the work with. care that customers are customers we

others. Some more of very is them, than important price

the For performance. some ensuring of them is

need going them know of to. will are some fees to systems adopt especially who the where my me I change, means, regulatory somebody will help For hey,

don't see Why prices in very guess up what in quarter, the a Clearly, see the I more we do for lithium and liquid opens is which we reduction end? market -- optionality. this front little the batteries more

that the that up them was little were prices something customers, uncomfortable. makes RMI going a which think bit offer I when that we our

signing them a get so great. based, line the the know contract in the is better makes the end it Now of on because close what they market or is feel with they will that’s that's to something market where day, at

that. So globally, you see that's

the wait for "Do the U.S., better certain convert you are talking offtake, to or we you for get On -- know our going date that we're off-takers your will XX% that want the to products this selling?" relayed and into customers what need services to the their whatever until do other you Reduction upside you prices are are some the have Act of Inflation asking side, by in their they offtakers,

are Yes, answers different. the

dates certain or I projects customers have we to offtake some need. think the by that will as the online need

we those move forward, So will think.

land. kind this are, of where can wait." this them "No, And will that's of Some

kind of today. of -- landscape where are So I we that's know don't the if that's

where at XX% the and the -- and to backlog, U.S., for have next of U.S. we you which can growth we growth why the we today, meet we IRA, of the irrespective believe And seen signed the regulations seeing up. of very was demand very, looked already, strong to year, of were we reason we -- we our irrespective affirm outside able IRA because come the give outside where are So our have what that that XX%

Manu. very progress But helpful margins But should then margins go of about a breakeven EBITDA Okay, how maybe from obviously, that. we think and to of a good XXXX fiscal And sustainable making and maybe okay. fiscal there. thanks this That's target a on for getting and getting we follow-up through level year, quick me the by EBITDA? good for end profitability Julian, profitability on EBITDA as to and and

Yes.

-- we XXXX. to our in year what call, EBITDA-positive the So fiscal in last said have consistent be what with we expect

less operating we'll you EBITDA that see are in half going XX% profiling contracts the at with I if signing that's improve margins fiscal the the as think in we to margin of the see and And year at our as if you grow progressively we continue And you'll look to at revenue it comments XX-month because XX% -- quarters. you we've as growth XXXX the through kind revenue. we rate. progressively average, through than the revenue well. those grow a the of from fact our expense trajectory And look our the two said, go rate, the that couple quarters new trailing can

Okay, Thanks guys. got it.

with Our next Sachs. Goldman line the Brian Lee question of comes from

Brian. morning good Hey,

is Brian. XXXX. incremental here $XXX this Maybe on and on for Miguel just first fiscal million XXXX the everyone, Hey for the question

on obviously some better it with just chain could that bit is or better about to Maybe that examples, the a just a there faster able talking some attributing specifics here. you expected, in supply execution a it the more expand projects just get on is to You're Thanks. and to hoping visibility being batteries, just color on bit more front? of function than visibility getting pull execution

quarter, machine way in manufacturing, our with right had to Yes. de-risk working the -- customers. this been the our clearly the have and contract fact is is able better. first, our great will We our did deliveries I Brian, job a we that

work it. the team, a revenue, the everybody in our team, some from us to from So end to I way our install sales also that de-risk even supply not our our allows we our lot effort ready recognize the think to of the able are That's to been from think of deliveries at of have manufacturing customers chain, equipment. but fully way if about from a that

manufacturers doing, the he essential had And the chain the the have to be If have tell not I each of If won't production, able here. de-risked here. wouldn't to combination you is that, we work now one, for worked, three, implementation, pick here. done been people very we cannot be If had not we this. not on wouldn't is they're be one the up not our supply

are better. So can we identified for our believe it's year. we projects between this this, year revenue And the and next the where basis better -- -- that do machine we we the those the working million have over and $XXX next

projects kudos Got outside I we're is here hampering -- the that, the you've constraints constraints? to projects? U.S. the of And guidance, about just still backlog the projects update Thanks. follow-up projects. on solar what degree Could storage plus out And you've But question to give obviously. module general you seen marginal bit solar push in then that. maybe for seen appreciate a for of maybe what the on these in kinds update of in an hearing your it. specifically because those

we our specific -- anything haven't heard Yes. I understanding my mean, customers. from

part, or some customer irrespective in of to in they contracts our are was -- solar at of tell irrespective enterprise As them with needs took changed one take the they of ready the consideration the that the management. solar you I our are will where And are that's we part bigger manage capability probably delivery, the one other of we risk reason we elements. solutions side to clearly customers if have to their when our where things we better. for we they you, that if sell know, who into looked on the are and But disconnected

you. heard I'm up telling -- connected not we and tell U.S., that's that what will being in bit the clearly. cautious the be coming I So can are to modules us the to -- our they questions customers IRA, today a on going where of anybody to not But or haven't more get us, little "hey,

pass Thanks it. I everyone. got will it on. Okay,

Our next Maheep the line question comes from with Mandloi of Credit Suisse.

Maheep, are how Hey you?

the morning. Thanks taking here. good Hey, for questions

Sorry, hopping is have calls is the million versus I this. that two-year FY The the here, I XXXX? looking was between might so revenues missed versus over XXXX higher period, that FY or $XXX just prior at run rate

think kept Yes. $X.X Hey is midpoint, it's Maheep, the about way for And follows: same at $XXX as so we've the and the rate. million. the to increased billion run XXXX the guidance then we've

you higher a outlook a So outlook on XXXX. implied higher or XXXX based have

XXXX. take to if math that that's incremental million you for XXXX, So $XXX

and So of add quarter, second signals the execution, And on as billion you in would that's reiterate $XXX million, XXXX backs billion a be remiss that's have strong $XXX that over with the we get our project you and million read-through and a for demand great XXXX pipeline. remaining the very don't the well. $X.X that revenue. in to I And $X increase the over fact with has I if of

end? and Thanks. Got are kind benefits which more then And about that of customers could that accelerating driving or the it. clarification. I on projects this your regions appreciate from talk or manufacturing is procurement you

Yes.

globally. services. at second Julian in say, for signals as the you are book And of order would and terms and quarter, our and we in the mentioned, demand we in solutions if both winning I what are So look winning

line is thirds and going be that's of but and So the we business, it, globally. demand dollar question to of larger the the signals. our your color winning Americas of overall the for kind context two or driver that's top Obviously, on are

months. in of select will to upside we execution, pull XX-month In XX and our this the to our the the is terms well end projects lower the quarter the writing carries contracts revenue execute back ability the range. of as typically contracts year the through what's year But because have we that of forward between we as see better XX XX how -- second half next as of well. And are in some in driving now, to

Appreciate rest you. it, will Thank the offline. I thanks. take

Tom next Curran Partners. Our Research comes Seaport question from with

good morning. Tom, Hey

Good morning.

the For under you've with management without? with added, contracts split between those fiscal share XXXX for the services growth had augmentation for year-to-date, in assets and us you those the you've could

Manu that Let take one.

think don't but the portion ability to our significant split, have the contracts it the if think way I give chooses. Yes, that customer to we a of site, about so is the augment

Yes, gives option. them an

an them option. Gives

that's about it. the way to So think

option contract, customers so our of in most do So to have their the they if choose augment.

So years augmentation had customers. option was for our before, ago They it not or an to take proposal.

it, believe these well, option, how to but that's works. all to are, that way it have going can agreements service We an the not they take and do Now because proposal. they decide take or take we're augmentation our

to a are the support And ever more seeing trend you of so towards opt-in? expectation augmentation evidence

The backlog we is put that cannot can take, the value. an is it customer option issue a Yes. that as it

we You in to So provide they do option the us. a depend when side contract will customer believe have it's we most -- it an or this, I on have. think know I looked that they bit that it But needs mean, what at we his and little will that have made will cases, a we on mean? are some or can But [ph]. to our where have offtake ensure I And augmentation, is augmentation product offering offering perspective, lot -- from need bar it our work his wider. a with a changes for if top we there's his

with technologies. different augmentations our offer can we So

time So to it hasn't also think something comes. when that brag competitive don't the be think, I territory, yet. more that, will a to will anybody want lot I don't into I get -- about that will think us I but make And happened able

then for a that transmission then Julian. next projects transmission, out months? awards how that, of the storage I are expect pipeline, give from storages on sense that come mega much that, U.S., Chile? us likely you Germany consolidated or for the could had And or portions you you can to doled the the your be as award appreciate XX of Australia, next over And to XX most would visibility

mean to I go I details pipeline. into the not prefer Yes, about our

I on -- giving our -- difficult. all go to more that start my life We'll and pipeline. preference, of our not make life think the it's be to details so will

transmission, say But transmission for again I both mentioned. That be in they work, not up U.S., Chile as not going to be a storage will we're it's -- will can and say the opinion. That's it, in good. get. say it, with not most to to this likely I to came system this and regulation -- not the storage. like not as and the we I do going Europe. a Europe, work. that On will in work. my They're you That's going it's do Chile transmission design They It's like not going XX-minute work. working

don't to know I project. So it I be if successful be. think unlikely. But that's will well, will think going not, a I or be it probably,

works The just U.S., the We much transmission Europe, in make this understanding regulators more and how we're to clearly to see continue how starting. work. the

for view they but told -- a I regulator, good -- the not look to going go So think they these to do. have want is because -- they -- work. this different at it of they back, sure and them be in have have what to calls, how to don't said listen it I'm this I But we we they them, will

for my questions. taking thanks it, Got

Dumoulin-Smith America with from question next Bank Our comes of Julien

Julien. Hey

are you Hey, very guys. good time. much morning Julian, the namesake. Appreciate Hey it. for Thank a glad you

on little you $X.X first what think Manu Can as says elaborate margins, to kind what revenue listen, getting target you bit this the that the So a that of says improvement gross wanted about have revenue you're come especially the year that of I to commentary accelerating to just really billion for through provided. incremental about obviously, here, this? what year you're say that side for of next on but you does year, that now margin that the this next the course getting back

Yes, thanks question, for -- so Julien. the

the we signing importantly, Like, our in call, the And our updates. margin guidance margin to in think you the way perspective rates. contracts XX the rate units. a margin contract gross or last XX% more are you keeping call, can signed come the from new And perspective increase gross just XX% to to through signing, at and the current margin the points. see So are gross you increase we're new rates. margin basis And the about that those a XX% from XX% new guidance in the as can of at margin, the the see being rate look contracts we

we better margin a roll as you perspective. translate confidence you EBITDA, gets from very are for leverage, and into less it XXXX, than it of And about margin line disciplined from outlook good As our our XX% gross gross EBITDA and is into of a operating forward at the assumption overhead even spending we model our positive growth. that's XXXX, are expense. getting because an our increases overhead And top

higher a XX% XXXX, revenue XX% if you to in going base XXXX growing So at model over out line top to XXXX.

being legacy signing forward our there's able legacy is little execution cycle, year -- margin contracts executed XX% of of be in Remember, earlier therefore, XXXX we to advantages in in to the are very in pull backlog in and fiscal one the rate. backlog better the XX% to XXXX. -- gross life the our Our

translates the So healthy are the then coming very gross and EBITDA. margins into that contracts a on new through,

meaningfulness, in this offerings. does standard then your And month where hardware the vis-a-vis Great. about back its really the commentary Alright. it "standard", as to including on it does sort that Q and this Nispera, you're meaningful the What that think now I and expectation? outlook change going had strategy guys that XXXX, Fluence on Excellent. that new said as until of level including of you talked earlier wasn't say call you revenue just about that it contribution

Julien, be when had or this, No. looked when -- channel material business we at that on we view Remember, has changes was was the the will this part will one to changed. we of we did the not plan. integrating when always one get our -- and this sales of

will wanted of talked of of we new to was a plan do going part a So part we well. last it the both and very channel going replatforming which us expect. and our pull -- single as to Remember, upsells our planned Nispera, which was a and we And is single good very Mosaic replatform give -- as we announced is year, were we then about this plan business, it's channel, cross-sells, in what when our for this able December essentially out.

our So offer. offering done been our to we're part standard we are already starting figured has customers -- as of is as

perfect. okay, Excellent,

Excellent. Thank it guys We will much. you very leave there.

thank Julien. Right, you

question Our Baird. Kallo from Ben next with comes

Hey, good Ben. morning

I questions. for results versus and I'm just wanted improvements question. on cost going sorry contracts. guys, margin. Thank wanted levers about legacy think Hey good progress. you keep But to my good to and on I this just different to the follow-up taking just

sorry, to how this. about attachment software as follow-up Julien And of similar we just you into XXXX But and baked profitability we guys go profitability. your then think if think as but asked go of kind that? like rates have tax is you. other production into Thank and anything that housekeeping, of that? into my or beyond the change Manu, going services I this, something but And and benefits just I'm the IRA credits you you forward, any said so

Yes, sure.

Ben, there -- unpack there. if can lots are I to So

as understood it how me let So take the question. I

drivers contracts you pricing execution, well. to if and then, some in between But better newer the are contracts our signing of margins bridge as deck a So bridge our better risk back to would management. we the gross is the we margins legacy XX% better the say, of are the and I right, a deals contracts range, the put we in and margin of from signing legacy new XX%

the are those big drivers. So

executing lower a We to region, the low breakeven. had compared can XX% in depending you single-digit see we a have expectations to in projects gross legacy past. our almost and also much in complexity executing increased we XX% to usually rate, that through are XX% our newer margin in be margin size executing margins, guidance. them single-digit result, are to And the on And the we've the as very to XX% the are expectations close from when as at come that we margin contracts, trend

half first to it good going in important fourth rate and calculated adjusted EBITDA year expectations our you and gives quarter. high the the can to for going is take actuals second which EBITDA the for into pulling that to our margin what be that's of margin half and implied guidance read a the rate breakeven is to full And get year. XXXX single-digits gross compare XXXX, half, to are gross you because we second the If through of EBITDA close forward gross margins you

So that's margins kind the from perspective. compared we new are the a signing of business contract legacy of contextualizing to what

in said of maybe the will potentially XX% rate. within that outside the margin XX% those to rounds, top a range, still the terms specifically the the we've to benefit more volume the end us what But to it In -- is, Fluence of as the it for of you to versus we contracts range. the takes taking so of be make asked, PTC IRA us XX% opposed bottom XX% -- have to the margin the contributor that are to end we look, range

average deployed. are last terms kind kind XXXX dollars number question, rate our seeing than had we be Those to are assets years in had margin round margin. slightly or rates have services the better in higher of high quarter with We're your XXXX. gets meaningful XX% the and at quarter. of to what That then a what higher in in to a rates. will contracts of through better out seeing That's we we line on kind our of more and margin contributor than XXXX, solutions margin last meaningful for attach rates we go we As attach in

the of services as great digital is base. to also It sell gives attach of us option to kind that. installed incremental as a the power So well it contracts

Great, very thank much. you

question-and-answer concludes remarks. That to turn I'd closing Julian today's to back call session. for the like Nebreda

working are want proud of Well, -- the thank clearly joining questions. And will, to and for our the commitment the the expecting, Great. in really to continue I were great team makes And and working here, day. us we so success your that's I what we is news. a than and only because at way, what reaffirms everybody work a of really better hard it of end the this difference participating really, think,

during soon. really of for happy, talk thank And quarter you hopefully, participating. Bye-bye. and you the again and we'll to So all you see

conference today's for concludes you call. Thank This participating.

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