FuelCell Energy (FCEL) 7 Mar 242024 Q1 Earnings call transcript

Hello, and welcome to FuelCell Energy First Quarter of Fiscal 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.At this time, I'd now like to turn the call over to Tom Gelston. Tom, you may now begin the conference.

Thank you. Good morning, everyone, and thank you for joining us on the call today.

call recorded. this reminder, a is being As are This the our first Energy website released at Form earnings of Investor results for our financial XX-Q on quarter report release www.fuelcellenergy.com. our morning, in our and the section FuelCell press quarterly available of XXXX, and and a Consistent on slide with call our our release, press website. addition in earnings practice, presentation we this to our have posted will we This approximately be the being webcast of and available website please after the recorded on you will begin, of two replay we be hear hours some Act or consist XXXX. will meaning statements the conclude of today that for call.Before within our the that of will Exchange is note with forward-looking provided information Securities our a and continuing express our plans strategies.Our such regarding risks financing or commercialization, our fuel without those our our and statements materially business in include, respect beliefs, the statements uncertainties. and results, of and anticipated financial results of statements regarding cell future development, of actual because expectations, limitation, may expectations the with implied forward-looking to described and and intentions by plans from differ number Such and technology, future annual to to and reconciliation presentation of the regarding and our particularly harbor risk risks in measures. and the on factor filings on slide of will our quarterly refer information financial of call, and slide XX-K be financial report is website presentation we XX-Q.During in for Form those subsequently Commission, discussing to the filed uncertainties of section statement you non-GAAP most available More such and safe and course the and release Securities measures filed the recently the measures in with this press Exchange reports any certain our GAAP the we earnings appendix Form the our

I Bishop, Executive am release President Executive website Investors.For FuelCell Financial Few, joined are presentation Chief today, Energy's press and President, our Treasurer. available by of and and copy our and Mike under Vice earnings on our call Jason Our a Officer, Chief today's webcast Officer,

our now Jason your questions Following will call other to remarks, and over hand team.I members available be opening by the the be of remarks. leadership Jason? to will prepared joined for take we

the Thank strategy.For Thank us quarter. you, XXXX, progress morning, Tom, our good in we revenues we of year for have today. everyone. in the continued than joining last of quarter and Since toward prior on implementation first fiscal you Powerhouse were comparable the December, business make our to accelerated call reported lower

for looking our a warranty replacements is Energy give important our was the this detail in and FuelCell the our results will onetime line However, from diving during anyone I prior revenues the new Today, material due quarter. comparable results, expectations business the required from module on expiration ahead.Before to as for service year an to of obligation an related rate to story. additional extended as with to well we a higher into provide quarter, revenue of believe it benefit overview

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made in have our Korea. progress We expanding reach

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product call applications are potential and quarter that in benefit opportunistically global from detail. among energy over well the customers momentum discuss domestic stable the the the are a Mike to global policies time I to Additionally, options the COX believe policy Mike? tailwinds. gaining policies results potential that more enacted proposed electrolysis, that have have support and delivered are evaluating for like broader we to on financial strong first the positioned of the turn set as we landscape.And that will geographies.Finally, now, capitalize and evolving a to power been are We

today. call the Thank and you, everyone on good to morning Jason,

Let's highlights as begin X. on slide by reviewing the the quarter for financial shown

XXXX, due was approximately end due noncontrolling to EBITDA the of primarily first of equity first due totaled compared net Revenues of to net million reported XXXX prior in average of January quarter release. share.Adjusted For net tax the to number XXXX, which fiscal fiscal revenues quarter projects. the attributable the bit loss to million attributable $X.XX to of totaled a XXXX. $X.XX, EBITDA benefit the million, adjusted the line outstanding of year total ended million of interest first approximately our loss which fiscal attributable this of loss see period, million to we fiscal stockholders was the first financial of the of $XX.X $XX.X during of first noncontrolling expectations. million, rather prior common negative loss in to quarter loss related year totaled first in to XXXX.The share a the onetime $XX.X will increasing, I included XXXX. attributable share which The quarter net was Connecticut The in a from Please as appendix loss interest interest details and an or the our share from per of quarter provide from to year compared per $XX.X XXXX, weighted year common quarter non-GAAP first and Derby, negative $XX.X shares negative net with net service the to noncontrolling more material discussion higher compared in the year replacements. million my per right $XX.X adjusted we of revenues primarily impact expiration fiscal in per in issuances reported in resulting steady, extended $XX.X higher year $X.X remained quarter earnings year the of the quarter loss the $X.XX the obligation module XX, warranty a remarks.In than year of the million later share January required of the of and financing the regarding XXXX year at measures, service of net including unchanged was a in XX, fiscal quarter to EBITDA fiscal XXXX,

as Finally, is on performance cash the the has over on XXXX.Next, million you the by company period. left-hand that X, revenue our down backlog. at revenue graph category. slide for a three year no total position side million months XX, broken on the January of is ended compared will financial product XX, see $X.X of Note strong to the additional prior details In $XXX the and XXXX, slide, there in comparable January

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very recurring pleased our assets, generation to enhancing are revenue We new profile. three have added

are include can fleet business.On completed With totaled are financings, January service, in upgrade This which past having new historical at portfolio.Looking from Green replacement future enhanced schedules see back execute Connecticut a to the approximately provided we which you of allowing the including module two and in the XX capital the the as under recycle by generation the we expected projects and us result costs assets. modules projects for that have XX.X estimated Derby are Energy the the into Noeul separate able were Derby, investments lower long-term These does X, over replaced megawatts were replacements megawatts KFC.These the addition important life assets, of a portfolio It's service XX, maintenance customer-owned provided tax has of data, the generation margins of equity each the profile improved project performance, Service modular site. years. modules. company as Toyota XXXX, not placed of in multiyear the of that to note company's over our to were new slide three fleet, Agreement, to

class customers We fiscal the a base. modules we longer-life we platform And expect fourth revenues module result, service potential expect contract opportunities that similar with replacement XXXX to adding a that in service until lower are revenue new our exchanges year have now in not as the long-term service executed quarter, Korea entering do noted XXXX.But currently opportunity. Energy, compared megawatt Green to module of we last quarter cycle to fiscal across lighter the agreements, transition We occur Noeul additional repowering installed as since to fiscal to we XXXX. believe to have any we

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current As production Jason. company The our now our and an call we turn meet enable example, monitor Torrington and adjustments future to given to have to we the from invest to in rate expect demand continues make facility. inventory carbonate which will position, periods.I commercialization growth continued its to in expected back the current to strategy, company's prudently

Thanks, Mike.

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is tenet growth. first The

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from floor George Instructions] first Our Canaccord Genuity. Gianarikas our [Operator for are from opening session. now question comes We question-and-answer

open. now is line Your

Hey. Good and taking everyone, my much for so question. you morning, thank

calling and morning thank for you good in. George,

course. Of

additional Just maybe just whether interest give program, and the parties a in first an or product? question. Can Toyota us not seen please operational update the you on new from you've

for It Logistics Total producing being Beach. that Peterbilt water brands use, to is for washing consistent reducing A opportunities the amount as get of as of projects. jointly projects level vehicles these interest operational, of Center, the how strong does the needing utilized imported for at develop the we well power, big hurdles port to all additional hydrogen a do Kenworth distributed operation, through developed is support there on need additional XXd with which realization water Yes. we around is that avoid out, then they as a infrastructure with what having think that environmental we is to see well The they of at but car platform, reported. and in as do the is that previously to in operate both the pacing, Toyota Long that the platform, nature the The water and a that can questions impact of Toyota supporting one Port the hydrogen as Toyota to a of really objectives.With PACCAR centralized and operations by at respect now challenges project Trigen. it which is is the implemented, their trying that's Domestically, in their the hydrogen and play trying you get exist is Class the some distributed and lot there being number they without Mirai under of opportunities,

that the So, this of get the think some we clarification, in company. we we once platform. expect solid to interest Trigen And opportunities we see for into hopefully through turn

of in the credits on project XX-E kilogram guidance for you changes on production? of see that the Any level based per

mean from that I we've consistent Department rule-making we're Treasury the the the part at on organizations optimistic like comminate No, proposed department rules. to Treasury But views course, with be the others, that we, on the of going is of project. Toyota remain ultimate many we had

And a be won't where there land. we can't they're say for know certainly so don't change, certain we remain optimistic but to we because that going

zero. time? Got in as now you to it. to basically on to conscious in whether And we development the of kind directions? other growth allocate you. of Or of should that follow-up. curious a have projects your part show decision over come your then thank expect I'm to kind slide On the grow just projects one resources development that's that of slow XX, and

grow we to No, projects. expect to continue that

Got it. Thank you.

you. Thank

UBS. Question comes from Gupta from Manav

now Your is line open.

oxide well as bit, finally I wanted are electrolyzers. to cells just little the as on understand traction seeing we fuel Guys, a solid

And with see on in that half understand, just in signed to offering? through of think this I electrolyzer in more are process you XXXX front? come developing your yesterday. where Shell second the trying of you actually I'm And do of orders XXXX, peers one up the something

the for solid us, opened first, Manav, as new has that you you we call on question starting and us. today. Look, Hey clearly about oxide opportunities the -- think for being for broadly platform, a if thank up

being to participate in result our -- both you announced, about oxide we not U.S. is our of a is recently the at take would context, before If things if you commercialized Trinity Connecticut take opportunity opportunity as we of those smaller Yukon are just two that have a least wider if XXX module Yukon able see because aperture platform. Trinity opportunities think in of we of now started megawatt, you that, opportunity opportunities the having Those announced, kilowatts. we've are X.X some created at we the a solid megawatts.So, the been announced, the at

is need heat, a our if need of had So, pursue, that that that time and don't advantage. CNL will the we're Canada, if Ukraine the an heat, waste the we're about which hydrogen, look think the be the in we that we about a platform XXX% that aim think we've which we're think And announcement. opportunity of electrolysis side, today pairing the of oxide efficiency talked high-efficiency to produce efficiency percent winner don't market think, particularly but because behind-the-meter of we're clearly a that source segments source technologies standpoint. in our electrical over processed, efficient to power heater from we to applications, we that with example, there's that from efficiency.If solid winner very announced, technology the the solid fact opportunity some you nuclear, is baseload can ultimately demonstrations When the at opportunities significant.On source is what about because with with and more oxide platform integrating be those for we and many excited perspective, is at the a going you of for heat, fairly we are sub-megawatt XX-plus we without we and time

biggest power technologies. the the across assume to just different when get being you cost platform If that scale you

we to million really about about you were well-positioned tons measuring might $X.XX gray more anywhere efficient very that's we're to into platform if from that's a going in advantage a a fact be use getting opportunity. we just really want already as $X.XX from if we know of price yesterday's think -- per emblematic think think scaled -- that projects of play that think, that significant.And are the color and the to kilogram. producing you're as produced lot cost hydrogen, to to if a of XX announcement, a you input You start on that, metric a cost will, we is hydrogen, and differential use stick, that to think power to for going the fall and That's f we of you hydrogen that

is electricity, of quick centers. from is, lot my follow-up there a demand the for think coming here especially I data

how that you would you struggling -- your the utilities how electricity be understand, succeed are And eventual basically and would market? Is this And -- we if are data As where positioning demand. would that you so, company a in center megawatt way to into XX order like break be XX meet company get in positioning or order. your to you eventually can chasing? providing something megawatt market

great Manav, Yes, question.

been large-scale of world. our So think FuelCell Today, largest able to and about in we've about you is and cell if the Energy company provider deployed fuel do any you at projects. the parks you what represents technology look our historically cell fuel talk

also using be two have We our projects FuelCell XX-megawatt fuel largest North technology. in cell platform to The happen a leverage America Korea in platform. Energy

that.Also, very as a our perspective, transition utilizing introduction ultimately have the So to gas, an now that XXX% from scale the to ability customer solid and the as customer to we offer oxide a utilize ability of from hydrogen, in natural with the example, solution well. with we're large technology comfortable

we well-positioned And more the bit to it so effectively suited a about to solution our to operate also that go a we for you data we're Officer is microgrid capability, to other how the our compatible opportunity. be high that, well maybe to after Commercial we centers really turn sense our technology a how think baseload resources resource. ramping about centers, add how a approaching And Mark as with we to we're for Feasel, grid. we've integrate temperature demonstrated we think add think our I'll to think of company a Chief that. because about over integrating But you little in We application.So give data about we're think and think ability we quick to

Jason. you, Thank Yes.

grid more dimensions look power Jason there. to, to the it. In looking can centers grid no facilitate the and go it. grids you beyond is alluded And some when just are that, So there's just challenge as high-density time going limited capacity to is to today issue. geographies other that's cases, a at isn't in quickly this data where phenomenon specific build There it a line there are few which to a But some requirements in even than these load opportunity geography. companies time any to there's a

several in think Ireland about Europe about think here the the the can there. can and US. capacity -- not is Asia, an fact and in you you great the This Singapore is to areas where So be issue simple going is

a delivering think, power about prime represent I a Jason, It's delivering isn't these so real key with hit to sustainability. deliver better just applications. And It topic. power on power. pathway

consideration. a So incorporate to ability this hydrogens over feedstock time, important

Thank you guys. much, so

Thank you.

Eric question next from comes from Our Craig-Hallum. Stine

Your line is now open.

Good morning, everyone.

Eric. morning, Good

Hey.

mentioned So could I'm just speed add just to curious, details to you then wondering backlog. want you if the you initiatives process. sales And obviously, I to curious, some mean, add closure that. just product

XXXX maybe see of forward? where like at up of you trending to the view a going So you'd and that ideally end end a fiscal maybe see how

of and we're moving I'll And I'll how about really through then sense is a on little hit about contracting that little and give trying think more about closure. a let long-term how sales would Mark projects and we and talked call that's targets. what this couple we're X you morning about our projects we that we those when closed X, we let accelerate a but can to bit Mark we've funnel talk a done, bit, Stage little in

away denominator from Historically, to gases think energy is industrial There's from for gas procured electricity delivering a that. person. that a to or aspects about someone, Sure. way that people have an so supplier in and utility. someone maybe hydrogen many you one if But common to doing transfers risk

them different in to to It's challenge. order business technologies requiring that, of Now do model. always existing course, embrace their a is new than

can this addressed So be partnerships. though via

excellence you've to deliver fuels a that.We partnering scenarios consortium away and specific as-a-service being where arrangements with so from energy geography in seen other partners energy go the to And risks includes in are end ability to technical, regulatory transferred order also in and that which a think a users involved our that financial or us segment. in about market in specific in accomplish type

their announced expertise presence address that local to an be really to in that of and concerns So partnership that our customers and and heavy how with engineering help us key Marine Malaysian leveraging and to out may scale. example Asia we've figure in ability geography,

we there. gigawatts they've think opportunities cell Eric, to And Noeul today, the in optimistic a in it, the country, deployment addition our as But you world of with becomes going technology, in that think really that, deploy the now about about is We largest switch about fuel That's in of we when think the Korea, our platform solid use. executed about about country, platform up CHPs, fuel we've available today their In opportunity. domestic we that the utilizing with today cell We're aperture we of seven as And same again, out through if think a we And a to you have that where as that being got can repowering, XX see being we that under effectively that to Green the which market oxide near-term of trying you XXX% Korea. opportunities hydrogen eight fuel switch of for that, own support in that talked material import can Korea it oxide market to that hydrogen. that still about their -- we of addition opportunity source, talked repowering. we compete. hydrogen solid opens can forward real on to opportunity.

And so about very we're optimistic that.

certainly, it. where anticipate backlog it of XXXX, you a product is amount your have XXXX, is backlog? mean, a of growth, exiting or that -- you at mean, fiscal have Got but exiting something kind more I think I think And a goal this you XXXX, XXXX this? do product the the of you end decent you of a stage setting could is for specific XXXX,

on opportunities close here We think we our transactions Biofuel backlog through oxide biofuels, our backlog, XXXX. last will year quarter, certainly opportunities about we of around seen well our we the commercial think turning contractual direct R&D really with one Market, start and throughout to have solid California. take and again, as repowering throughout we and the that. the win these us for our recently, play a for we've relative And into this those is terms our of growing platform with to think ability leveraging Look, talked And just we're which a fiscal to biofuels opportunities. pipeline platform, us target to and in calendar XXXX. positions working And building

sure, near-term the Korea, the and I'm might Thank But of side, specifics. it. be clearly, some Got any given provided last service visibility would Any kind specifics in great. is you here, last setup one there of And not a details the on quarter, opportunity have maybe think I in now just then you. pipeline? South terms big

Yeah.

at to back So we our Costco. the we are repowering, directly -- look and you respect in at if opportunity step with Korea opportunity sold

the to to was long-term as sold XXX able came we a as a deployed, was our our a to We've for opportunity.We service And one partner by Korea we Noeul market. Genco's that the project now call opportunity megawatts so previous so it, that the balance that modules of our do Green, And those see always which is now the upgrading replacement that those now we in that as successfully us have one up for company. of agreement platforms repowering of framework agreement. been manage, repower under long-term service or modules, continue were and able for have that opportunity as have

if One, those LTSAs need But two for new on with those as those we curtailment, opportunities. modules. its modules those service a agreement the come upgrade execute those modules new us. into long-term will, to Now basis need sales, we along with module a part goes repowering go-forward things go translate that of that run for you the and and because agreement agreements to on those

So we focused very a Korea. And repowering opportunity his and opportunity for see the real team, is that market us. on Mark in as

Okay. you. Thank

you. Thank

comes Riley. Pfingst Our Ryan question B from next from

Your line is now open.

morning guys. good Hey

morning. Good

OpEx. question around is First

R&D trend up think this year-over-year should we forward, that going XXXX, how on wondering to of year-over-year start to commercialization in lower about year? some closer get tech, Just maybe the next-gen does as we

Good take Ryan, question, and the joining I'll call. thank this morning, for that you Mike. is

over mentioned, So company this electrolysis that the and related up have into it efforts to and the putting around is carbon R&D, trend as platform, well years, several capture. as is last gen Jason commercialization seen power far as oxide you our really the solid as as

year up So for were that for that trended we million the this targets between put has it out and million $XX line. $XX

end right of that of we're the lower range at kind that So in range.

wouldn't I from where So today. sit we to expect see a material increase

question do is, my potential And there? helpful. on That's the or maybe with you us DOE of have any second loan help update guarantee that an can sense timing you

Yes.

ultimately capacity capture we also at eligible of our go tied around expansion carbonate if up for in capacity about, may doing DOE to areas. is would our existing the to solid -- we loan the work our is locations, where And talked as in expanding for around expansion One the be what DOE our oxide leverage two which we that we are also Torrington, identify new we've facility area route.The potential of opportunity. other guarantee, doing in additional end is opportunity we ultimately, view loan been here potential carbon which program platform the North include look So America. to

but DOE. a process And sit So now through the specific that you there's on timing are go four-phase we as closure today. have with of that through don't of a here that answer about progressing we process

you. back turn it Got it. I'll Thank

you. Thank

next Parks Noel from from Brothers. question Touhy comes Our

open. is line Your now

Hi, little of that earlier. wondered But I good on I and technology if capture a you carbon I you this late. formalized apologize sort ExxonMobil announced on sort touched bit about choice. the could morning. of if a of got partnership making talk they

maybe of about as pace And so talk ahead? if further from here look developments you could you just the

Noel, morning. this how you doing Good Yes. morning? are

Thanks. Great.

Yes.

the that we been facilities. the with project on demonstration that So have Exxon forward announced, of Rotterdam to work reached we've in point doing a move their we as at one

that demonstration remain the the put right that about the building excited very We we now really demonstration and effort working the of on platform around getting in platform And effort capture. built support February, focus team current project. around the support And around the opportunity carbon demonstration Exxon. also of and so the an is demonstration we the is with that funding announcement in and ultimately building of -- out order project. But

we're continuing program. advance the So to

Beach, various Tri-Gen you of example, might about, project in Long I this maybe between over-triangulation is you've a Toyota wondering, well about with case LNG so there US Gulf had. Great. -- be and lot export doing And a talked tankers, There's that like around analogous setting and similar that? at oil forth? going Coast you've the horizon. any as was bit thinking a had projects Tri-Gen use But Any for little the facilities customers in approach opportunities on or with on about about there

think like port the either the to on ways to for help source in carbon in can which platform for hydrogen hydrogen, Yeah. the of clearly advantaged fuel clearly additional you or about When and become second, pursue hydrogen hydrogen opportunities blending the decarbonize which those and electrification as for intensity around as a value goods conversations around way about just two platform fuel, a the ports, as think the those take is gas power movement site And move for efforts you Tri-Gen Tri-Gen to ports when need Tri-Gen things at we're and in of our the if aside a to water streams opportunities that overall the commercial what a see a can -- that doing now about out gas what right, power relevant And is being do real already most the reference a look you and Long show certainly net if is, application. to you part have used beyond we lot a another -- Beach. that hydrogen it's setting at probably utilized.We platform, platform platform there's transportation, generation power. using the take reduce then and, just of for opportunities just especially one of distributed be around

sure a sure, demonstration value I'm it's so. for that

a lot. Thanks Great. Okay.

you. Thank

we the And think that have. that's all questions I Ellie,

That's remarks. have. all back closing we like to a the I'd now to questions that few hand over for Jason

you. thank Ellie,

to optimizing all powerhouse growth for great to today next execute Have business our our Thank you We We will continue for with in a customers, call your of interest forward and strategy delivering to quarter. returns. goal updating the you FuelCell Energy. look value again joining day. and the on

Thank you for call. today's attending

now a You all Have wonderful day. disconnect. may