Fluence Energy (FLNC) 26 Nov 242024 Q4 Earnings call transcript

Good day, and welcome to Fluence Energy's Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call may be recorded.

I would now like to turn the call over to Alex May, Vice President of Investor Relations. Please go ahead.

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

Rebecca Products Pasha, are and Chief President me Joining our Financial Nebreda, Chief Julian this Chief morning on our Boll, Officer; and Officer; Officer. our Ahmed our call Executive

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

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

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

over will much. now our [Operator very team. prepared Julian I'll comments, with we call the Instructions] Thank Following a conduct session question-and-answer our turn you to

on financial and employees on I are our see. business to results and strong to detail our say and will prospect participating more and full an investors, outlook. would growth the on I results analysts warm go a Lex. update into our continue call. provide like welcome then will you, briefly, we QX Ahmed our year review then today's to who and Thank

Beginning our profit specifically, delivered financial 'XX, These strong free year strong that generate More on We ever flow. can we performance. reported a first generated we full growth scale. Slide year at cash and demonstrate results a fiscal on X. for profitable basis,

or specifically, a of all million approximately with outlook million in a which met we billion also our gross $XX adjusted than exceeded fiscal generated in and More $X.X is expectations. $XX record million $XXX metrics. EBITDA, key We 'XX, year the XX.X% almost of margin, earned midpoint higher than of our better revenue,

of services as Second, we revenue our made value our million. goal the businesses we and achieve to digital of good increasing by our progress operating in recurring XX% $XXX annual

continue Inside make software, highlights energy in relationships. to and recognition getting for market. acknowledged digital month, exceptional the our this Guidehouse it leaderboard by Fluence strides our The integrator development the top on We was is partner technological software. storage strong the named Earlier and

our Third, more our support to future another $X growth, intake. than add to billion order we quarter of backlog to of strong with continue

our billion, proactive year to grown million generated to expansion quarter with management, ended we to cash And to million approach strong visibility and revenue. year the of $XXX have backlogs the Our future for capital XX% $X.X free margin finally, working flow this cash. and by of providing $XX

the and changes I light recent the in not X. which storage, Slide to of to expect provide market continues Turning do of the growth U.S. energy why would growth government decline we to to an expectations overview like administration. the in surpass of

building electrification industrial stagnation, as demand deployment we're seeing of and which transportation, such of data processes. for driven selected rapid as electricity a growth long by commercial is of globally, growing and economic development, First, period the centers sectors,

countries. and we're is XX% in in As other the demand XX% rise similar to an electricity decade, projected example, the next to trends U.S. seeing

XXXX. faster has energy deployment renewals the and and global renewal time adoption of at renewable as time of production for renewal about XX% levelized already. nuclear. will energy in and gas the compared cost generation projections of rapid source been to electricity put a for Current power This fastest-growing growth significant reflects Second, attractive

with For the electricity economical most markets, fastest renewal meet energy best most needs. to pair way is and

XX volume price new customers have orders favorable resulted from been of over cost the of declining existing storage their benefiting months lower almost increase levels by last a which as projects XX%. storage the Third, The energy our industry lithium cost prices, year-over-year. more in This has carbonate XXX% more battery attractive. from reduced the by system XX% input declined and has in became

experienced digital have despite for Turning business. a volume It higher sets to rates history. since and recurring the interest level is during And in decades. for X $X.X Customer has years, highest our growth future we that backlog note the our important billion, X of backlog in current X. last our in highest demand in This XXXX. services to our reflected that, Slide doubled energy is foundation storage the good

growth Turning to reflected strong our The Slide X. pipeline. in for also are energy storage prospect

perspective reminder, $XX the approximately rolling our our I am trajectory. which continue XX% impressive, billion considering is that quarter XX-month thus pipeline have provide year, backlog. billion growth increased energy to quarter, converted we for that last pipeline we pleased globally. view, storage a into this $XXX our during reflects million from $X.X end ]. to significant growth This given our particularly a ability current time to prospects As pipeline has [ of by share -- more To from is the increased in us last confidence

in will international robust the $XX billion very year. U.S. our geographic in of rest a half market, further international the pipeline Australia, and bulk diversify is market, of and the in see Germany, the the to market, Chile, Nearly coming our mix it. representing which with continue We Canada

by to inflation reliance on to supply domestic innovation Slide to the elements Chinese that U.S. IRA, bring are offering recognize before robust U.S. our or been supply and battery need to strategy our we growth. establish the reduce To have to technology chain to localizing Turning point, Reduction of key Even first began a for Speed X. change. content we the innovation imports. the for and operations and U.S.-based Act market storage a the

on supply U.S. and X, offer Today, we to that non-Chinese were and supported Trump, by this our incentives. benefit our offering. chain chain from operated production by shown X content can in manufacturing essential by is XXX% Slide won IRA own located product, President delivering the domestic partners, are As U.S. facilities, states supply of which X

that full IRA strengthen are is regime supply security. that is to cutting-edge pleased first and under a under energy by automation defined production current the equipped to positioned producing our the U.S.-made be regime to unlikely, robotics and of technology, at Development product domestic our chains of modules successful model our production has Even thousands repeal our in Fluent tariffs. began these the we commitment higher enhancing efficiency we of we with This U.S. September, both believe and new a associated jobs created line or Ulta battery I'm announce both facility. though quality.

we've to the a products. highest meet storage month, energy received the UL-XXXX modules significant quality. safety, level, delivering certification that and for signifying our milestone, our is module this Additionally, commitment standards reinforcing certification reliable, This performance the at top-tier our

Slide X. Moving to

production recall, to with dedicated in at battery Tennessee. offer distinct XXXX, us cell their our allowing the agreement a customers peers. cell summer -- X competitive capability may As facility you secure of unique American-made an production U.S.-based This provides with advantage. us we to products lines reached to a in among ASC our

end of as started commissioning first at part the initial the its producing ramping cells is and line battery The the begin of year. expected to up production process

are to contract As that our cells battery in be will produced transported Utah. manufacturing dedicated facility

integrate is produce Here, held sites. other for to coming products as to We deployment at key will which our a the ramp-up module fulfilling battery them components production finished ready modules create localized quarters we our our robust supply step we anticipate gradual this in a with commitment capability. chains. over U.S.-made in and customer

second the decision strategic cells. instead made manufacture XXX the and By lower recently to have production density the provides line the cells XXX will providing power customers. technology battery to we thus a our life, to among XXX this market, the in upgrade longer to superior first manufacturing sale, to step and in which the value the taking bring be of and cell invest degradation our significant We resulting to strategic U.S.

U.S. our double the United enhancements enables us our entire domestic manufacturing these capacity, meet to expectations volume cell qualified content products. Furthermore, which States in near-term with

long-term it line support growth objectives. a potential Additionally, to our exclusivity our secures for third

in set the Today, batteries imported disruptions ahead Finally, or schedule, the tariff markets some a new impact raised this current Chinese XX% on like duty in and the the to short-term X.X%, increase discuss cause further XXXX. to the VAT. of to I tariffs it increase of in potential is would pay market, prices. If of digest is could the while even any

proactive the than have into that taken planned. However, measures foreign mitigate products country XXXX, on our bringing sales are sooner to the which in foreign utilize we include sales planning U.S. potential to the impact

cost secured We manufacturers of contracts also that have -- our further tariff thus with sell sharing a provides increases. mitigate risks.

ability customers U.S.-based demand the players that in now is deliver domestic solidified remarks. steadfast solution. This strategy confident positioned will regardless providers, Giving run, Ahmed. tariff political we tariff over resilient to be content in model thrive and in growing such to Those in new tariffs are competitive shift, policy. am view I that other able for should believe Fluence. potential capabilities. scenario, of benefit as cost-effective and over value and we our We lag shareholders. a grow capture manufacturing that my energy the best business storage to our to us higher storage the high our turn call a Our to concludes long policy significant edge I domestic our this prepared environment remain will for

everyone. Today, our and review XXXX will morning, XXXX. fiscal quarter our for I Thank and outlook you, year financial Julian, full good results and fourth

with both and maintaining leadership achieved invest pleased substantial value customers Overall, revenue and across as position financial all are significant and strong We to in profitability, we business. growth our our Julian improvement of delivering to while which performance, our dimensions mentioned, reflects in our investors. continuing

So begin the my on fourth by summarizing thoughts me let quarter.

double-digit adjusted million focus million has EBITDA from margin. a the laser Turning expenses, in milestones billion, adjusted $XX approximately The record of representing XX% consecutive on and budget. than XX%. $XXX higher quarter the results We to to achieve was profit approximately profit, fourth project of time quarter on improvement reflect gross a Furthermore, gross our generated which which and we fifth XXX% $X.X highest quarter. for This of quarterly gross same of we was fourth our on execution, us project quarter of the After operating enabled year last XX. generated margin profit our revenue Slide generated QX. ever

Slide to XX. Turning

would I to XXXX. for billion Now to fiscal representing XX% growth year performance our moment We a full like revenue, approximately take from delivered $X.X discuss of 'XX.

Europe strong now build and last presence Americas Europe We revenue X continue in XX% and to of XX% years. saw our versus also accelerate the Asia. Growth our and business across the Asia the on world, in in represent

as profit to improve gross range scale in adjusted from adjusted yielding largely driven well select that of of by which enabled EBITDA, initiatives terms our key and helped is strong million projects on a us excess benefited strong is in structural point, These margin deliver XX.X%. results This percentage exceeded $XX execution In underbudget cost. come profit to by our outperformance our in million margin, us guidance an to million. of of we $XX goal leverage that our we $XX

as Slide cost to XXXX. XX, approach This continued gross better had on over you the time, which we our can improvement quality, value our and negative been steadily have demonstrates focused see margin, execution across productivity increased until drive fact, In profit chain.

cash swing and free flow significantly saw million versus time Slide to last EBITDA improved free year. in year. company. positive XX. in cash million public More we generated I first for as highlight the versus we a of largely million to by delivered last like was profitability would $XX fiscal negative QX, This specifically, $XXX that flow adjusted we $XXX driven a Turning positive as

of nature capital-light flow in source excluding cash our the should growth in long-term changes for track model, capital. Free EBITDA, Given cash the important business. any growth will free working flow of of be business growth our funding in an

Turning to XX. Slide

about prior midpoint billion. We our guidance XX% growth of with to is are confident achieve line from is our driven 'XX This which a target, for represents fiscal with revenue primarily initiating We in $X expectations ability and 'XX. by factors. X feel fiscal this

advanced point of value; where approximately at projects exclusive third, this and pipeline our billion as we opportunities illustrated year; last revenue are by number mentioned. backlog, Julian of an of totaling have is in across First, and X/X second, we increasing our the projects in currently number growing $X.X our in consistent a world, XXXX negotiations we of were with on

we 'XX, profit XX% fiscal margin For gross expect XX%. and between an of adjusted

expect EBITDA platform result, a and midpoint ARR. the $XXX ARR, an fiscal $XXX to see of million continue to As million. we for in we year end deliver our with expect adjusted of to And traction

perspective year. to with 'XX expect nature in approximately the revenue remaining adjusted our expect be half consistent EBITDA to last profile, and timing we of versus in fixed year, half back-end of year, fiscal in to first we our fiscal a flat from the Due quarterly first relatively Additionally, of with the negative year. cost revenue annual loaded, with consistent XX% half XX% be of revenue and the second last

'XX. Finally, looking fiscal to ahead

discussed. We a expect storage continue base, midpoint be for $X billion revenue approximately beyond. 'XX with our to guidance or growth, Using Julian our to whole a we in energy XX% 'XX and fiscal market as as as expect annually fiscal of plus line growth strong

Turning with an update on XX, to our Slide liquidity.

the $XXX and facilities. hand in which in with roughly the rest million is cash year total can half availability see, we on you credit of As liquidity, our is finished

Our profile our this signed and liquidity new reflects year, liquidity which revolver improving solid enhances further flexibility. profitability our financial we and earlier

XX. Turning Slide to

invest first, are approximately the support enable terms support working roughly In growth to that split XXXX our substantial to second, additional outlook, in of million in our needed revenue manufacturing beyond; projecting. capability our XXXX need to contact. to This demand our to and evenly domestic significant we working between: of and capital of working future liquidity in growth see is for required we domestic capital XXX% the capital $XXX U.S. qualify

future us, capacity for cash will opportunity, including borrowing which fund either flow; be have debt free under debt-like sheet or and existing cash, available no as we by our options revolver; to capacity To we have currently this several securities, our aided balance debt.

enable we in flexibility will respect with on cementing Overall, that us we ourselves believe this global a to that as in leader opportunity capitalize battery have funding storage. business, to enormous

consider by liquidity will our capital the strong timing, guided we to options and funding we optimal be commitment structure. these and As maintain

and In continued profitable entering we development with summary, to current and at 'XX our record levels, year With we pipeline well are pleased are fiscal line. performance momentum. positioned deliver with backlog top

remarks. back me let Julian that, the With to his closing turn call for

Ahmed. you, Thank

Turning this takeaway to XX and I Slide conclusion, want emphasize to in a key from quarter's results.

important our generated First, to was our ability for test we revenue of deliver QX our an profitable performance quarter demonstrates final year. the of the as This in year XX% us growth. fiscal

renewables time impacted We're fastest serve U.S. environment. and seeing most storage to not is the economic load for Second, real in decades, change by ways for going this battery to the be in of political the first demand plus load. growth one storage is and

will U.S. demand supply enable domestic production. of established that chain sources have we advantage to clear U.S. to us as Third, have we a competitive a meet

needs secure value innovation changing of our to world, solutions growing meet allows fourth, and our returns provide to say. to customer our resilient our that route are shareholders a with us strategy the with customers And a profit rapid

I that, for up would like With the open to questions. call

[Operator Instructions] Genuity. Canaccord comes Gianarikas from Our question George with first

your Maybe and just fiscal to off 'XX guidance your coverage. backlog with for start

going cancelable your of solid back-end some you changes split year? give and is that nature this can or the backlog confidence sort next all revenue in sort reach the Given discuss loaded just into of you Washington can to of guidance, how XX-XX your

you, Thank George.

said, that we Tht for in X.X that were will are revenue by be guidance we roughly -- X.X And the that negotiations late of billion roughly revenue are already. or covered had billion, our contracts revenue have will around X/X than So we will in more stages contract. we the in selected as customer the half convert roughly, 'XX. into we be -- into our of in backlog

confident very feel midpoint So guidance we of range. our

wood we to we very some we that good to need are where contracts some sign, but feel have There's today. more We with chop.

we be very, commitment of to backlog, our signed things our in strict believe we that a we know, backlog to we -- as view a terms our can we really have very order that -- backlog, customers our and to to situation, make -- is look take that you In need they things -- on from of that there is and there projects those deliver. are real and take time considering

deals. binding they're So

none So seen little we very have to feel very we confident that delays.

take know, we we year, essentially strict once on you have very, cancellations we talked As it, very but real not projects backlog because view. a have signed last we the of seen

are As be subject that I are backlog to in pipeline. certain can signed point. contracts the where are there because stage that they said, not they in still we at have are considered not that at always conditions They're

the we confident in year be contracts So in billion were very -- believe of coverage cover stage for negotiation portion will now late will but around took $XXX million to $X.X our we And able we backlog, of a that around of for from to will feel of March we about represent selected 'XX. the small be revenue XX% backlog. next then year. The over, need

Maybe maintaining that to Can feel you what's you're ask in deals us discern your losing? Tesla and market as bake-offs, relates as levels particularly or follow-up, you winning or market share your a about How that to maybe help [indiscernible]? happening your comfortable share. just you're it do the

of some which the behind of our a and in -- were do good C&I mirror very work mirror, China, of competitors and We of do lot point. China. of some our some competitors, in the players front Good. our Very, outside is of

we of the we what of view kind So it's to own have time build are. our --

our little sustaining a down see time, It share but With and market up sustaining. bit, our moves view time. over of we generally

We a clearly competitor. competitive important that's very offering, have very and a

we of we market the Chinese have and we've Some very, late. really, as share. aggressive that a have become feel been competitive to But of wins, able that our keep very offering

in presentation we're driver of have having end that, we what -- working value and U.S., at in work. deliver innovation can our on, said to things the and ahead a we this more, our more the value market. ahead the of going in And to to prepared That's being that we some highlight a the and supply Having of here, keep of day, try done our remarks, to -- market resilient a the as way innovative being really chain we're customers product, the market. win having an is we

It's a competitive industry.

very As I constantly tell do team love win in a to I winning. a to to what I'm do, as time, to be to as competition it. way to better and We've it how I that been my love you're It's successful. thinking all the required long it. be route place find

continuing We keep are committed -- to this being position. -- this range

with question from Sachs next Co. Lee Brian comes Our & Goldman

on I wanted to maybe follow question. George's up

Just this I right negotiations. X/X backlog revenue -- providing on of helpful late-stage the you're to But guidance, coverage, parameters kind just kind want bit. the are you the a have of little rewind

If play year. the half the billion stuff the it this back some revenue didn't you a out really about you way had think $X of want you year, last time midpoint, in

fiscal in little of midpoint a 'XX. you're thought to So XX% was be what for about going you -- coming shy the

like to You're it midpoint, using 'XX. set parameters for the of kind the seems same

make 'XX? in So through repeat to were you miss initial coming that Why revenue maybe in the that into not 'XX maybe, you year? is just what happened midpoint can you one, to expecting going walk the us

the even this about there do the look 'XX with coming hitting 'XX, on And you year, last year-on-year feel better that basis so not confident a same backlog than more even parameters been to year are coverage maybe into midpoint versus able having the where any in year?

question. Good Great.

similar had have the we coverage So than years. last X we

very is our X/X have stages us fact billion So clear Since been at selected, negotiation sight difference both the of we very, numbers. that line we in the of what late of contracts in have 'XX year. $X.X Roughly this and of which give 'XX changed. the beginning meeting year or hasn't to the

to a if should compare this our but or clearly a we that's year. So we to route we are. from that projects where midpoint I that's selected did think, have where were able we very comfortably. to -- -- a year we we're tell we I competing year get be not yet what And with to on with clear somehow, customers so have to been -- hit time main have normal Last our reaching I'll field and normally route midpoint where believe you, last working the mid we difference, rate, a

So we are that's far I would say where today.

you could project looking certain compared but I ask -- and happen today at backlog, as the where feel middle comfortable route was had a you again, due think the what midpoint, know, what to last got the and that looking we me to have, stage the I delayed midpoint. if we year, you am I it that that at issues looking in projects are at very in we late meet to

helpful. all $X.X That's The stage, in Is quick us mix sense that like give international? on then maybe U.S.? can XX% guidance, gross mostly some the And follow-ups. late And Is the of that Okay. to from tighter basis a breakdown? then better the margin mean, you range? billion year points not doing XX% to wider XXX you precision ended from better XX% last it's a XX%, where last this year than the you range? up versus I just What's why year,

point. that I will answer Ahmed let

is of think the in of mix I $X.X the So half that Asia. billion. half mix is in and roughly is U.S. The

range, the And Ahmed.

range And for...

range He mentioned the was wide.

Yes.

plus/minus midpoint this the the the that for you -- range much midpoint. you from plus/minus is the -- year's and think guidance, I same, XX% at pretthank if XX% from look XX% was think last there about year I the

range had range last XXX sticking -- No, you're margins. of kind year, on point the This a basis XX% year, with last wider I even to gross was talking to year. the more you performance about XX%

it, we are giving is XX% thought on it sense last which 'XX XX%. gave what earned think working for we with we the think and are contracts. what our consistent we frankly, And why sign gave That's to guidance makes midpoint, still I 'XX. have this we we as to stick I in to time more XX%, the we past. year, to And for

where we stand. we improve is subsequent progress focus move But this to to we it. this hopefully, in makes quarters. as have But key But we last can the at we you to quarters, seen to stick several the update as that, to thought will XX%. you continue frankly, something XX% just our is it point, sense But improve our performance, in

of So that is continue help is top priority improve, something bottom that to the line. that to on our and the list improve will

Nassano question with from comes next Our Wolfe Research. Dylan

guess, on in? given those check I I deflationary $XX of in about the billion Are level feeling you assumptions kind So kind want just figure? environment good of pipeline pricing just to the the that pipeline, we're the that confidence in of

changes. Yes. for pricing constantly adjusted That is -- being essentially pipeline

but you today, reflect should it tell generally XXX% is won't XX% prices. I that current So

see we is So the in of where today it partner. reflects reflected the prices total value

Got it. then it upgrade AMP XXX a the sounds higher-value cells, that's power on like to the And product.

to is would gross to margins? say So be it fair this overall accretive

the it's margin to the the say technology most to will we Well, and technology whether that today to state-of-the-art will you much XX% bring in most capture be But we XX%. tell of it. can recent have within out batteries, made a U.S. it's to gross I the decision difficult it

trying kind that can -- world. one a we market the build we're these That's with is prove things U.S. with quality, as I to in what the precision think in do. you in want the capability that to manufacturer same same something of with an that the U.S. same the the to we

we the people, to essentially XX% can the of will you the technology be point over It we say margin, we have today, the energy, time the where I see here brings within can do it infrastructure. That's as XX%. gross anywhere the bringing we'll it's it else. good capability, Do that have have as done

Thakkar with from comes Ameet Markets. BMO question next Our Capital

to got just last back kind I XXXX love to, all the you I wanted update of of kind guess, rewind to quarter.

had kind billion think a of revenue of what or is a little of billion midpoint. that rate light you growth would the XX% XX% is revenue I Like implied. the talked for guidance original off bit about kind of low $X $X.X end range of to that the have

of you much mentioned of year like any really this are cancellations. quarter's going of some that quarter color I know speak last fiscal you're to the project I you slipped that? into not around kind kind XXXX? was Or to way just seeing from in of having update projects kind

there is I you -- to I this is mean much Ahmed. don't I think anything don't think need too read into.

landing expect place I the but we to billion guidance said at you. last to from midpoint we -- gave we it or quarter, the that recall, growth we same -- our much if we the billion, are continue you think pretty was $X.XX we $X midpoint, XX% XX%. And

discussed, can pretty threshold. what mean, mean, working feel I And we signed exclusive we have and achieve that good as we deals I on on, frankly, that we have we are based what we that

that with X, at I [ the same think much So rate now think X I discussed X.X place midpoint time. pretty is this we and is ], our to last

that chop. as we So have -- that have we good. wood Julian pipeline the good and feel pretty mentioned, we Obviously, feel pretty deals, But I think on achieve we the the exclusivity can we to same the at threshold.

mentioned year. one of working capital just investment of kind for quick million you And like a kind follow-up, the $XXX a Okay.

what the a for kind should view of by here. on assume Any [indiscernible] positive EBITDA cash adjusted of be to EBITDA? going siding kind conversion if of of we You're your your kind

year? average investment? kind kind of Is that the that working $XXX your million peak Or that of And is is over capital need? investment the

that That on I our content upfront, as revenues think, that mean, for the XX%. is year, implement growing strategy, think, needs a for I I to U.S. we to plus discussed, I capital something roughly domestic working need securitize for

So yes, I cash question, is -- conversion think expecting million. cash $XXX we are

I discussed, before we capital working is will be back-end needs revenue have, as our because flow cash loaded. think free we positive

working before but I net-net capital, So mostly be think in at will positive coming will end. back be cash cash flow the the

comes Christine Our from with next Cho Barclays. question

have just question. I So one

give your to of us foreign capital in cells And interested of your [indiscernible]? U.S. million how sooner sorry any into working certain the I'm bringing since many needs? this, is in missed are mentioned conversations or changes You a noticed but then $XXX actually ballpark this the could included U.S. of And I have sort also election? you in you if idea maybe percentage if

[indiscernible] include acceleration mean, Yes. ahead from the it. some important of I $XXX yes, the million of

very, for We In terms -- working but demand for see say to -- strong maybe looking offering, I domestic working content that very we will are very customers this. with the the out selection, are strong see who we're very, that demand.

peers they see doing And as providing offering our and what more as more who terms against domestic it. container, of offering in offering optionality other security they offer our there see are

at So I election the projects these think very, the since you take don't the would changed very since movement to that either something big we strong demand. It truth. are time. hasn't these a not have or least major tell Significantly, seen say, really I long that -- major, are election.

anything But win, to bit was see after we going it so significantly people, the did Trump on Before has more changed. the clear was election, election that a traffic. little --

Our comes Jon from Windham next with UBS. question

I'll X improving gross of Fluence, you've with question, over to XX able think Before shows time. really been been And bit to a I consistently the Slide what margins get the with over It's story congratulations. say do I little years.

So congratulations for that.

very much. you Thank

Just Is little you problem. follow. the question bit a story would on vary who Does existing customer, battery the have, on it you? tariffs applied, fun bears to contract? it on My how is helpful. that been It's very if Yes, were of would a color -- contracts be manufacturer that the that? no

that some some to of you backlog tell tariffs are roughly of we wish some some tariff or the There some at have tariffs. risks. so where look it I'll you, -- to When have where barriers. we with is we suppliers with subject customers have where the risk, manage who the current total deals XX% of Chinese share we our will deals Chinese the

X.X%. press around taking yesterday which [indiscernible] total tariff. XX% to X.X%, didn't is what announced of with -- And that just backlog this our be U.S. U.S. -- risk X.X%, The on subject that backlog the of to represents yes. or we the of clear, you was are

So that the will be in XX%, material case. our completely

manage it. will We

In we our to increase to have in tariffs. happen. some with If through cases, that arrangements pass were counterparties

I net-net, we think it's what not material So saw yesterday.

I $XXX that I only flexibility of on with to customers. given to as we have think And or XX%, that pass million our exposure. backlog so our think

think is we this So don't

Accelerate.

accelerate fact, And I the reduces then it that, further. can we batteries, think in

we So we it. can good feel pretty manage that

Percoco Andrew Stanley. from Our next question with Morgan comes

want I the guess just for XXXX. to back to point I seasonality come

project XXXX Is Is more second additional more around number, related? year any give it is? just what's years, that specifically? it can it's any information given the significant half on confidence the a think the second provide roughly I been first over shift I want you the -- it can color few you of half just driving there? any more last XX-XX split half, second half. -- any how to Just

this, you structural I there's the this. that I in drives market will nothing tell mean,

So what's we in looked case. have it driving detail our in

some competitors market. generally, in nothing some looked or our the be in around, all there's of If sincere, are quarter you structural other the but to peaks at so

of likely to So implementation this. and function sales our a our we're internal putting it's teams most incentives our and teams address to correction probably

effect. time However, the corrections to will take take some

we be it's over will that be we we believe time. improvements will do hopefully something to see -- able that So

where run. needs the there As way it's the no what will company -- are to you in market real tell the that not restrictions

that within we it year. feel can that We quarter, to will this able view. it do any So that. be don't see will next we problems in confident We my be do

this, necessarily well. at good state. work it's clearly a good very, are chains supply but not very very Teams Our

and we're want to it we So on working address it.

Okay. administration to eager they incremental you in with curious the kind the condition post-election. Understood. customer how they for seeing you or state orders guys. around maybe wait-and-see the point, then from of of activity are customers the what comment time? That's of maybe helpful. of And in Just if you just on just mode terms sign fourth quarter financials just of obviously, guys? Can customers very bookings until kind Are new terms sentiment the their election their since you're strong from bookings in

we you as know, half international. roughly mean, I Yes. are

a change, you And that? How them. manage In do can answer what U.S. month the been been even has really it? uncertainty. you So that or that we from customers tell by major or from don't are the to we it we're that the And questions -- doing? not U.S., really think a will time get a been hasn't from time month will you I affected mean, it I elections today, hasn't manage how I you

see our the So progressing projects we in U.S. normally. progress

JPMorgan. Mark with question comes Strouse next from Our

Julian, It's Drew Mark. on for

then just one, that market mean third-party you're given And market U.S. some where a with customers? with target. how seeing on that XXXX conversations XX%, XX% your much start for you of having is Or the first you're do the you to share based the really here that and what chance First outlook? U.S. more think off in taking just sales? there's I in of is

Our our out is view 'XX of based of pipeline.

storage a very grew for on by is adjusting million top pricing. We million. see $XXX and strong billion pipeline pipeline pipeline. only this have even of we not $XXX reality, X.X coming the So in our of converting top EUR though In on quarter,

we growth in that confident very seeing can pipeline. XX% we're meet very, feel that we already our So it the

for So guidance that's our our how with come for -- we or view today. 'XX

then backlog the And different big hitting the changed you're just business pipeline Okay. of topic as traction in in maybe and Really, the digital what you orders quarter-over-quarter? well. really And or on right then about just some a talk digital now? in here. seeing Can the numbers also

digital includes sense roughly this are just million very $XXX well. in services. does is you a we And of XX% to both where services, and doing XX% digital, are. Both very, give Those

we Our allows that a to markets announced a we new us into what have back. we faster. system digital -- MoSEIC enter much with continue relaunching business, couple years new of

into well. project, that's now probably have to ready work -- So in so a very We We're now MISO Japan. we enter going and we're ERCOT.

And with our integrating have Nextera product, created lot a what value organization. we our of have into value, done service is we continue lot investing of we in in a it. but

our customers, to service So offering organization. only are to value we we're not creating our also but

we conjunction. the end So this the at see a of as business day,

good are a making finally, deals with very, with progress very good signed we Master. few customer. And We

and customers move we've been We see are Once movement bring happy. see get moving them, very that to you these the can forward the forward. value really we with table that we that

happy very So with it.

material material very do is will but confident materiality soon our that that direction. we're still and business, it's this not numbers or not would strategy together from the be in a we Today, we the very very, going it to won the putting right

comes next Our question Harrison with Kashy from Piper Sandler.

with late-stage So -- to been the figures $XXX you those Can what would you ship are would have numbers year? $X.X time prior Julian, amount give significant at negotiations, that saying to equivalent entering want negotiations billion fiscal year. that just back I in this wasn't us 'XX. late-stage there last in a Or the those million go

were smaller this think not Last what stages contracts than don't I amount the the -- that have have year, question. -- good we year. late we -- significantly this in did were

So we are...

all. at, at I is I as don't if think I that look that half Particularly, roughly you think of we in have mentioned,

significant. much in year. of that's from last -- better This a than a point is view, we're that position much were we So

commissioning I range push is factors high-end think to final -- through of is and appreciate that on the guidance question And our our much lower that driving you my a end substantial get gross XX%. That's things gross of what combination higher point. year. on the reaching this help depend and margin the putting final and guidance? Our margin I side just color a ability us of lower completion XX% would has or very additional just And will execution, cost the that. been into it. completion Got some it. of our that's there. it what to drives range then delivering at And the towards think Can you to

is What you is think 'XX? I think challenge understand. I for important a for to

that are We have new products coming on.

GSP and bit GSP the revenue And XXXX, for a have the we so next different. We combination X,XXX. may little year of be --

more to on decided go with we a conservative end. and where So conservative to going we're view

I of testing and this, our we new to are But has our team through committed have -- think in done them doing things all a the our great and putting could that products we happen. job labs done

out believe But is products in we'll coming very 'XX that that do will it more we the reality very, make there be So slightly well. will to able challenging. new be

Markets. with Chris from RBC comes Our Capital next question Dendrinos

average you the pricing guess brought out highlighted there, and change sit and lithium of trends thinking I pricing and of selling about in wanted to the the to CATL going LGs that the where direct kind of prices. ask today I kind down about competitors with consumer. price the are you and some the the has

shaping lower? competition sense trying where solid are kind and sits seeing able get prices backlog environment up in of of you're just price but I competitive Obviously, a terms guess a how is how you much price of to highlighted pretty continue move that guys today for so you to to compete, here, XXXX?

Very good market. mean competitive question. see very I a do we

big very down. CapEx come Chinese the price that is has and reason puts too. mentioned, competitive the What that the us the active as of part being said, think I more change, in a As you I point

EPC has faster. -- have relative the part. other logistics. The reliability the become the relevant. parts, commissioning, to They to -- more value the ability provide the needs customers on meet the of

If option, but some maybe it the the meet CapEx competitive you're Chinese don't one. might right, advantage in have we other on some today, have clearly it they the

to how to do it, -- we will customers in any And that's can So success they of that's We how that's this deliver what's from how the get ownership that. to that's that's And of. total what we market. that win. a than drive work continue offer going and our cost better

in the As really and helping I said, is what way at people. needs innovation. is the than a efficient customer and understanding more It that looking technology, resolve their other them it's

integrated of advantage cheaper. clearly some in the the of we value more the in Chinese vertically not China chain. the probably have can one do things have an and of they the an do But -- advantage they other The parts

to continue where we play. will we're confident feel win matter Chinese only we that willing how no not very, that players the very, today So aggressive very

value EPC Got you an And it. playing play the on I following with maybe opportunity you of on do to it's are increase more maybe of I you the where all role future? whether that something chain, today? like then see comfortable the you in around kind comments role chain. or maybe value that up guess in mean the in sit taking Or

customer solutions. When doing. on don't a them I offer sand that why see not, a do EPC customers of good if the are it our and continue not offer, we a partners, some all finals funded. we do can needs we to reason offer We with it, and to

So change, won't I think. that

comes Our next Jefferies. Julien from with Dumoulin-Smith question

different. for Julien. end marketing the This on -- out a quarter. congrats bit little I is I'm and Europe know Hanna in on the question

others before. it guide lower year similar high revenue will end 'XX. or question to asked a end the full get to you slightly low saw versus of So the in as the we

IRA million and project of and guidance. range are I does baked content. So maybe the what into that I'm the end scenarios know just assume to delays some is to scenario in but mix the And low understand focus trying the $XXX midpoint, risk domestic on

Good to in, of be essentially to on the If we'll backlog mid we The the range we orders higher upper even and that's the will the range it. driver Great. question. or Good side will the drive closer what be don't, of our bring will better. a If capturing be we hopefully point. contract reality can back midpoint.

what so -- So because say, we to time all but would I that's working it, March that's concentration. a to driver. from on, big on And happen, be that we we're some that's here will concentrated big, this our do our when can teams are are define that say dedicating have and where generally, will

follow-up quick a as just And there.

in to is real that -- So this delays? there potential no correctly am I then that reading is any adjustment

there affect they're delays. since are small over commitments there that ready. got or will transforming we takes the deliver minor. little and backlogs meaningful or are hot projects site, a weeks I a might our delays a will If to these substantially of say into -- deals, be are there are, ability -- sites do commission. No. generally, delays geostat longer amount. once sort [indiscernible]. us it But of have The led in to It's our that to be happened will putting that Sunday when some entering significant

Our into from pipeline we do. backlog to That's need order into to now March what next objective, of convert year.

Baird. We have final from Kallo question, one Ben and time for with comes that question

be election? States. around Have companies talk in any X shop coming gets with question I worry the on do just Chinese would and lots then safe just is talk asked. you been discussions Could point? I just my there of pattern, the competition, there have But think there much stopped So you in the questions Chinese a And saying, at about the that is around think the United that how election. question order second you entering the Or this was harboring of into the seen that?

Chinese The a phenomenon. competition global is

give for so question. than the that I'll Ahmed It's a less globally. phenomenon. they U.S. So maybe do it's first global the less I up come to -- it. of intense I in we the then say the will factor see outside US compete than it a intense here, it and allowed to put they to and U.S. -- they'll if U.S. come in It's answer, and

with compete the are your be trade like any to that irrespective free like believe U.K. We of Chile, that that understood We question. I like we them with Australia, compete completely policy. markets

factory bringing and welcome here we U.S. they chose entice. I the in So it, a the the jobs because and in do way, -- them of U.S. the advantage I is the come by to get some put and technology to of then and here something that if were

projects all no from of open, of today and competition level competition level around. we will are The we where we markets in be see different the win

The first question, I will...

backlog. have backlog, we about, U.S. the the first have behavior. I seen since I tariff. question, impact election, think impact, the frankly have think of mean, of already backlog, terms of the Julian roughly we was material in think, we our And not $X.X talked on what billion where I U.S. I little There's I And very Your any customer change. seen think

there's don't have we with net-net, impact any material So think what I yesterday. seen

like Lex call remarks. back closing over May for any I'd you. turn the Thank to to

Thank you today's on for participating call.

If Have look free you have reach we day. you to any to speaking quarter good results. when our me. first out forward again report We questions, a feel to with

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