Bloom Energy Corporation

Good afternoon, and welcome to the Bloom Energy first quarter 2020 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mark Messler, Vice President of Finance and Investor Relations at Bloom Energy. Please go ahead.

Thank you, Operator. Good afternoon, all, and thank you for joining us on Bloom Energy's first quarter 2020 earnings conference call. To supplement this conference call, we have filed our Q1 2020 shareholder letter and earnings release with the SEC and have posted it along with supplemental financial information that we will periodically reference throughout this call to our investor relations website. The matters we will be discussing today include forward-looking statements regarding future events and the future financial performance of the company. These statements are subject to risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors, including those related to the COVID-19 pandemic that could cause actual results to differ materially from those contained in the forward-looking statements. These include statements about the effects of COVID-19 on the company's business results, financial position, liquidity, and outlook. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our Q1 2020 shareholder letter, we refer to GAAP and non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation between the GAAP and non-GAAP financial measures is included in our Q1 2020 shareholder letter. Joining me on the call today are K.R. Sridhar, Principal Co-Founder and Chief Executive Officer, and Greg Cameron, Bloom's new Chief Financial Officer. KR and Greg will review the operating and financial highlights of the quarter, and then we will take questions. I would also like to note that we are all dialed in to this call remotely, so we apologize in advance for any audio issues that may occur. I will now turn the call over to KR.

Good day. Thank you, Mark, and thanks to all of you for joining this call. These are unprecedented times, and on behalf of all of us at Bloom, I send our prayers to those gravely impacted by COVID-19. We sincerely thank the heroes on the front line who have been relentlessly fighting the virus. I hope that those of you joining us today and your loved ones are staying safe. I want to start by talking about COVID-19 and its effect on our business and the marketplace. Then I'll talk about our results and accomplishments this quarter. I will then turn it over to Greg Cameron, our new CFO, to talk about the financial results, our balance sheet, steps we have been taking to de-risk our business, and our outlook. I'll close with a few summary comments. Bloom Energy has continued to operate an essential business throughout this crisis. Our manufacturing operations, maintenance and service functions, and field installation teams have continued to work and sustained our core business. Above and beyond maintaining the continuity of our core business, the Bloom team answered a call to refurbish ventilators and delivered over 1,200 of them in working conditions to hospitals at a time of national need. As importantly, we powered two pop-up field hospitals during this crisis with clean, reliable electricity using Bloom servers. In one case, we went from a standing start to powering the hospital in five days, showcasing the time-to-power capability of our solution. In another example, we upgraded an existing grid parallel installation with our always-on microgrid option and routed the secure power to a field hospital in just three days, demonstrating the speed flexibility, and adaptability of our solution to meet the changing needs of our customers. I want to thank all of our Bloom employees for their passion, dedication, and perseverance, and for keeping our core business running while at the same time stepping up to go above and beyond to help fight this battle. I'm immensely proud of the efforts and commitment and my heartfelt gratitude goes out to them. I have four specific observations about COVID-19 and its effect on our business. First, this crisis has crystallized how globally interdependent we are and just how vulnerable society is to disruptions that affect our global supply chain and impact the production and distribution of goods and services. Communities now understand that they must be locally resilient to survive such crises. Reliable, localized power is at the core of such self-reliance. It will behoove local and state governments to enact policies that promote resiliency. Second, a significant number of our customers we serve are essential businesses. These are hospitals, telecom providers, food service retailers, warehouses, data centers, and manufacturing facilities. As global as these businesses are, COVID-19 has made all of them acutely aware of the importance of power and the need for reliable, safe, clean, cost-effective, and localized energy solutions. In other words, we are an essential service to the essential businesses. Let me repeat, we are an essential service to essential businesses. Third, the shelter-in-place orders around the world presented stark satellite images of clean, smart, free urban areas around the globe. This has evolved the sustainability discussion from one that only focuses on carbon footprint to include the importance of air quality. Even after life returns to normal, clean air quality is achievable if we reduce small creating emissions. There is no doubt there will be millions of people around the world who will suffer from compromised respiratory systems as a result of the virus. Cleaner air will be essential to their safety. We should expect there to be greater appreciation for and desire to have power sources that emit no shocks, knocks, or particulates. Bloom systems do just that, even when natural gas is used as a fuel. So while our focus on resilience delivers safety and business continuity at lower costs for our customers and the communities we serve, our servers will also deliver better air quality, and that will be important. Fourth, We know that nature is going to do what nature is going to do, whether it's wildfires, hurricanes, earthquakes, heat waves, or ice storms. We are not going to get a pass on a natural disaster because of the pandemic. If anything, we are worse prepared than previous years for the coming natural disaster season because of COVID-related constraints. In light of this, it is particularly important that we secure our critical facilities with resilient infrastructure. Now let me discuss some highlights for the year thus far. Our first quarter results were in line with our estimates. More on that soon from our CFO. In the U.S. commercial and industrial markets, in Q1, we powered 37 microgrids to 155 grid outages, resulting in hundreds of hours of safe productivity for businesses. We have seen a noticeable increase of interest in our sales pipeline for our always-on microgrid product offerings. Internationally, South Korea continues to be an important market for us. In the beginning of 2020, South Korea was one of the first countries heavily impacted by COVID. Since then, The country has been remarkably successful in combating the virus and business. There is returning to a new normal. We have continued to install systems in South Korea. In fact, a 198 system installation has been constructed this year and will go online imminently. A picture of that site is on slide one of the earnings deck. We and our partner, SK, are very optimistic about this market for the rest of the year and going forward. We have reimagined and retooled our factories to operate safely and reliably, even if the restricted workplace requirements were to stay in place for a long time. Our entire manufacturing process line now ensures social distancing at each station, and no two people have to be with within less than six feet of each other. On-site nurses are monitoring employee health and our new deep clean and wipe down procedures are in place as additional precautions. We know these COVID related work adjustments will add some expenses to our operations, but it is of utmost importance to ensure employee safety and business continuity. Our service business is operating as normal. On the U.S. installation side, we were able to complete the projects we were planning to accept for Q1, as evidenced by our revenue. In Q2, we have had slight delay on a few construction projects because of local moratoriums on permits and construction. We are beginning to see construction resume and are hopeful this trend will continue. It is worth noting that we came into the year with a backlog of over $1 billion in contracted systems. We have not had one cancellation of this healthy backlog. There have been no requests to delay the installation of our systems. In addition, our installed fleet has more than $2.1 billion of service revenue and the contracted systems in backlog have the potential for an additional $1.1 billion in service revenue. The service revenue is paid by our customers, such as AT&T, Kaiser Permanente, Medtronic, Gilead, Walmart, Costco, Apple, and Intel. Now, I want to introduce our new CFO, Greg Cameron, and welcome him to the Bloom team. Greg comes to us from GE and has a strong background in operations, financial services, and the capital markets. Greg will discuss our Q1 results and provide some highlights for the quarter. Many of you may have already met Greg virtually and we are excited to have him with us. He hit the ground running and has already made a significant impact helping us secure our recent debt extension and raise at the end of the quarter, which he will speak to in more detail. Greg?