Bloom Energy Corporation

Ladies and gentlemen, thank you for standing by, and welcome to the Bloom Energy third quarter 2020 earnings call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Mark Metzler, VP of Finance and Investor Relations. Thank you. Please go ahead, sir.

Thank you, operator. Good afternoon, all. We appreciate you joining us on Bloom Energy's third quarter 2020 earnings conference call. To supplement this conference call, We have furnished our Q3 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 company's business results, financial position, liquidity, demand for our energy server and new applications, timing of new applications, and the supporting market ecosystem and outlook. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our Q3 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. A reconciliation between the GAAP and non-GAAP financial measures is included in our Q3 2020 shareholder letter, which has been furnished on Form 8K and posted on the company's investor relations website. Joining me on the call today are K.R. Sridhar, Principal Co-Founder and Chief Executive Officer, and Greg Cameron, Bloom's Chief Financial Officer. K.R. 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 into this call remotely, so we apologize in advance for any audio issues that may occur. I will now turn the call over to Kayon.

Good day, and thank you for joining us. Bloom Energy has made substantial progress in the third quarter as we continue to bring operational discipline and agility to drive our innovation and industry leadership. Reflecting upon third quarter results, I was reminded that we announced our fourth quarter and year-end 2019 earnings on March 16th, the first day of Bay Area's shelter-in-place order. It was impossible to know at that time how the unfolding situation would affect our business and our lives. Since March, we have made great progress across the key pillars that are fundamental to our long-term future. We have significantly enhanced our balance sheet and liquidity, added proven leaders to our executive team, and have pursued a number of additional initiatives that we believe will drive more predictability into our business over time. Importantly, we continue to innovate, making meaningful announcements on our core platforms, as well as the role we intend to play in hydrogen. And something that is personally very important to me, even in times of great turmoil, is that we remain true to our culture and core values in serving our communities. Whether it was redeploying manufacturing resources to address an immediate need for ventilators, or our rapid response to power-up pop-up field hospitals in response to COVID, or in a hurricane-devastated area, I am confident we met the need of serving our community. I want to thank our resilient and motivated employees, including our exceptional leadership team, for their outstanding collaboration to grow our business and drive innovation. I'm exceptionally proud of how Team Bloom responded to the challenge. In a nutshell, Bloom Energy is stronger today than it was in March. We are performing well and our outlook is brighter. This year we have embarked on numerous initiatives to enter large new markets. Now, let me share with you some of the highlights of this period. First, our financial health is greatly enhanced. We have reduced debt, extended maturities, reduced our interest expense, and added cash to our balance sheet. Greg, who led this successful effort, will provide more details shortly. The reduced debt service is allowing us to prudently invest in Bloom's expansion. We are accelerating our research and development and investing in top-line growth and manufacturing capacity. Second, increasingly, markets are valuing the core attributes of our technology platform. Power disruptions have grown more frequent and prolonged as hurricanes, storms, and wildfires have ravaged many parts of the country. Businesses are increasingly seeking resilient, cost-effective, always-on power solutions. Manufacturing, warehousing, healthcare, and retail businesses recognize that now is the time to take action to improve energy security. The 103 always-on microgrids that we have deployed have allowed our customers to ride through 139-hour disruption during Q3. Severe natural disasters are also providing clear evidence of the acceleration of climate change. Companies, in addition to wanting to protect their businesses, also want to be responsible stewards of the environment and are increasingly seeking more sustainable solutions like Bloom Energy's biogas and forthcoming hydrogen products. In the third quarter, we have strengthened relationships with our public utility partners who are increasingly encouraging and embracing technology transformation in the energy industry. In Louisiana, we are partnering with Entergy to support mission-critical energy in the face of severe weather. Together with Entergy, we see opportunities to be facilitators in a new energy landscape, creating local microgrids, investing in a decentralized future, and providing the tools and services to achieve decarbonization. We are advancing our technology roadmap, which will accelerate our growth by capitalizing on emerging market opportunities. Our growth initiatives include developing a hydrogen fuel cell and a hydrogen electrolyzer, sustainably powering the maritime industry, implementing cost-effective carbon capture solutions, and enabling widespread adoption of biogas-based power generation. We are excited to share our progress in greater detail during our forthcoming Investor Day in December. Fourth, our innovation extends beyond our products and into our installation group. In the area of deploying our systems, We are continuously improving upon the ease and predictability of our installation process as part of our broader effort to simplify our business. This is necessary given the exogenous impediments that our installation team encounters in a world dealing with climate change. An example is Bloom Energy's new skid product. Recently, we shipped our first system pre-assembled for rapid installation on a skid, ready to deploy out of our factory in Delaware. A skid essentially creates a prepackaged environment where a lot of the wiring and construction is eliminated, allowing us to drop in a system and be ready to hook it up, eliminating pouring concrete and elongating the construction process. We have included a picture of the Bloom Energy Skid in our presentation. By transferring a significant portion of integration work and time from less predictable field conditions to the controlled factory environment, we reduce cost and time overrun. It is our expectation that a dedicated Bloom manufacturing team that is well trained in the final assembly process will deliver a more integrated product to the field and make it easier for field contractors to install. The ease of installing a skid in a customer location will enable Bloom to offer simple standardized procedures to outsourced installation partners, thereby enabling Bloom to scale up its operation, both geographically and in volume. It will also enable us to power customers on a short-term or emergency basis. First, our product's performance is unparalleled in the industry. Our 8.35 megawatt power tower installation in Korea It's a week away from its two-year anniversary. Here are the highlights. Not one of the 167 power modules have required a field replacement unit. The capacity factor of our system, in other words, the amount of megawatt hours delivered as a fraction of the nameplate, is 98.7%. According to the Department of Energy's EIA, combined cycle gas turbines have a capacity factor of about 50%. Wind turbines have a capacity factor of around 30%. Solar panels have a capacity factor of only 20%. Other than a 16-hour period, then our systems had to stand down. for a customer-initiated maintenance project unrelated to our servers, our installation provided power 24-7-365 at 100% availability. Let me repeat, 100% availability. Compare this to traditional baseload power plants that have availability between 70% and 90 percent, and solar, which has less than 20 percent availability. The lifetime efficiency of this installation is 57.4 percent. The capacity factor and performance efficiency far exceed our contractual commitment. the Bloom Energy servers that we continuously improved over the years are now showing a performance level and reliability that have never been demonstrated by fuel cells. Next, I am delighted by the level of talent we've been able to attract to the company, especially in senior leadership positions. Since the March call, We have hired Greg Cameron as our CFO, Sherilyn Moore as our CMO, and Carl Duardino as our EVP of Government Affairs and Policy. Shortly, we will announce a new EVP of International Business Development. This person is exceptionally qualified and will be responsible for pursuing regional relationships similar to our win-win partnership with SK in South Korea. By leveraging trusted partners to grow its market footprint, Bloom can focus on what it does best, innovating and delivering best in class products and services to its customers. We are very pleased with the progress we have made in 2020. This has certainly been a year that has tested management teams and their ability to lead. In our case, we have overcome formidable challenges and forged ahead stronger. We are executing at a high level and are coming out in a better position than the company has ever been in. We are excited about our future. and believe there has never been a better time for Bloom Energy. With that, I will turn it over to Greg.