Bloom Energy Corporation

Good afternoon and welcome to the Bloom Energy first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. Later, we'll 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 Suzanne with investor relations. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us on Bloom Energy's first quarter 2021 earnings conference call. To supplement this conference call, we have furnished our Q1 2021 earnings press release with the SEC on Form 8K 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 our future financial performance. These include statements about the company's business results, products, strategy, financial position, liquidity, and outlook. These statements are subject to risks and uncertainties as discussed in detail in our documents filed with the SEC from time to time, specifically the most recent report on Form 10-K for the year ended December 31, 2020, which identifies important risk factors that could cause actual results to differ materially from those contained in the forward-looking statement. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our Q1 2021 earnings press release, 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 Q1 2021 earnings press release available on our investor relations websites. Joining me on the call today are K.R. Sridhar, Founder, Chairman, and Chief Executive Officer, Sherilyn Moore, Chief Marketing Officer, and Greg Cameron, Chief Financial Officer. K.R. will begin with an overview of business highlights from the quarter. Sherilyn will then provide an update on Bloom's roadmap, and Greg will review the operating and financial highlights of the quarter. After the prepared remarks, they 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, and thank you very much for joining us on this call. Bloom sends our prayers and well wishes to the people of India. The safety of our employees and supply chain partners in India is a very high priority for us. and we are delivering equipment that will enable hospitals and medical professionals to provide oxygen to more patients. I'm proud of the Bloom team, which has continued to exhibit ingenuity and community spirit. Now to the company results. We had a strong first quarter and are reaffirming our previously stated annual guidance. Our revenue is up almost 24% compared to the same period last year. Our gross margin is approaching 30%, almost a 13 percentage point improvement year over year. You will hear more details on the quarter from Greg shortly. Our team has proven its operational excellence by executing on the ambitious roadmap we laid out three years ago in the run-up to our IPO. Here are a few highlights. We've almost doubled our annual acceptance rate since 2018. From 2017 to 2020, our revenue has increased at a CAGR of almost 30%. Since 2018, we have reduced our product cost by over 30%. During the same period, we have reduced our product price by almost 20% to lower the delivered cost of electricity and enable growth, while increasing our non-GAAP product margin from about 28% to 38%. Our service business which lost $17 million in 2018, is now profitable. We achieved these operational milestones while investing in innovation and extending our core platform to address multiple market adjacencies, our levers for additional growth. Based on our confidence in the growth of our core business alone, we are doubling our manufacturing capacity from 200 megawatts to 400 megawatts per year. This expansion exemplifies multiple compelling competitive advantages that are unique to Bloom. One, we can stand up a copy exact manufacturing line in about a year for a capital investment which will pay back in less than a year. Two, our manufacturing lines can build both our current core product and our future growth products, such as hydrogen electrolyzers, marine power, and carbon capture enabled systems. Three, this enables us to practice flexible manufacturing and dynamically adjust to market demand. This flexibility is a huge asset in an industry undergoing transformation. It'll enable us to be at the forefront of innovation with the optionality to manufacture one gigawatt of hydrogen electrolytes. However, we can utilize our expanded factory to build our current product should the hydrogen economy be slow to take hold. In contrast to companies building factories only capable of producing hydrogen electrolytes, we at Bloom are not exposed to the downside risk of idle factories and associated expenses. In order to carry forward our business momentum with utmost focus, On our core competencies of technology innovation, operational excellence, and customer service, we are actively engaging partners to assume full responsibility for installation. This quarter provides a good window into how this shift will enable us to deliver better margins. Greg will discuss this in more detail. Now, let us focus on Bloom's role in the energy industry, which is undergoing a seismic transformation. Today, customers are demanding that their energy solutions are cost predictable, resilient, and clean. Unlike the power grid, which is growing more expensive and less reliable, Bloom offers companies unprecedented reliability at a predictable price. Companies are learning that resilience is imperative. The price of losing power is catastrophic. And yes, it is very worthwhile to pay for resiliency. In a digitally reliant world, which cannot operate without electricity. Our product is not a luxury. It is a necessity. Regulators, investors, customers, employees and citizens are demanding that their companies and governments protect the environment. Bloom's energy solution offers power that is cleaner than any other always-on source of distributed energy. And we offer a clear path to affordable zero-carbon power generation. In this ensuing energy transformation, we are both the bridge and the destination. Indeed, we are the only solution that offers everything that customers are looking for today, cost predictability, resilience, and environmental sustainability. It is little wonder then that we see opportunities to unlock many new markets. To do that, we plan to form strategic alliances emulating our successful model in South Korea. Today, we're excited to announce an important collaboration with Baker Hughes. We will work together to build microgrid for our many clients who demand resilient power. Baker Hughes will also collaborate with us to develop and deploy integrated carbon capture and hydrogen solutions. The announcement today, with others to soon follow, combined with our market expansion enabled by our cost reduction, should facilitate high growth. I want to note that our current factory expansion plans are based on the demand we are anticipating through expansion of our core business in the U.S. and internationally. It is also based on the changing business behavior we see now, influenced by power disruptions, ESG pressures, and policy pronouncements. But there is a tremendous potential for additional growth. In Europe and Asia, policymakers are advocating for investments and incentives in clean energy. The infrastructure bill in the U.S. will catalyze demand for clean and resilient power at a scale never seen before. Our financial forecasts do not account for potential benefits from these tailwinds. But we have strong policy and global business development teams in place and well positioned to seize these opportunities. Finally, I'm very encouraged by the progress we are making on our growth levers. I'd like to invite Sherilyn Moore, our Chief Marketing Officer, to provide more details. Sherilyn?