Bloom Energy Corporation

Good afternoon. My name is Joel and I will be your conference operator today. At this time, I'd like to welcome everyone to the Bloom Energy third quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by two. Thank you. I'd now like to turn the conference over to Ed Vallejo, Vice President of Investor Relations. Sir, you may begin your conference.

Thank you, and good afternoon, everybody. Thank you for joining us for Bloom Energy's third quarter 2022 earnings call. To supplement this conference call, we furnished our third quarter 2022 earnings press release with the SEC on Form 8K, and have posted it, along with supplemental financial information that we will reference throughout this call to our investor relations website. Our third quarter 2020-10Q is also in the process of being submitted today as we speak. During this conference call, both in our prepared remarks and in answers to your questions, we may make forward-looking statements that represent our expectations regarding future events and our future financial performance. These include statements about the company's business results, products, new markets, strategy, financial position, liquidity, and full-year outlook for 2022. These statements are predictions based upon our expectations, estimates, and assumptions. However, as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties, as discussed in detail in our documents filed with the SEC including our most recently filed forms 10Q and 10K. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our third quarter 2022 earnings tax relief, we refer to GAAP and non-GAAP financial measures. The 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 third quarter 2022 earnings press release available on our investor relations website. Joining me on the call today are K.R. Schroeder, founder, chairman, and chief executive officer, and Greg Cameron, our chief financial officer. K.R. will begin with an overview of our business, then Greg will review the operating and financial highlights of the quarter. And after our prepared remarks, we will have time to take your questions. I will now turn the call over to K.R.

Thank you, Ed. Hello, everyone. Good day to you. We're very pleased with our financial and operating results in the third quarter and the outlook for the fourth quarter and fiscal year 2022. Greg will go into details on the financial and operating performance in his remarks in a few minutes. Before that, let me share with you some observations on market dynamics and two company highlights. On the market dynamics, the world lacks energy security. The disruption of oil and gas supplies to Europe, the Russian attack on grid infrastructure and power plants in Ukraine, And the long duration power outages that affected large populations in the aftermath of Hurricane Ian in Florida. All demonstrate the fragile and brittle nature of our fuel and electricity infrastructure. And it could have been worse. We came perilously close to catastrophic power outages in Texas and California during the summer months. Now. The Northeast fears its power reliability over the winter. Businesses and governments are quickly realizing that absent significant changes, power disruptions will increase in severity and frequency as extreme weather events become more frequent. In addition to energy security, the volatility and price increase for both fuel and electricity are contributing heavily to economic insecurity. But the fuel and power industries are not responding to these challenges with alacrity. Instead, they are waiting for the perfect zero carbon solution of the future. They are reluctant to deploy anything that may become a stranded asset due to policy and regulatory bans. This void creates a large opportunity for Bloom. we see that our commercial and industrial consumers want pragmatic solutions that can power their growth today and meet their zero-carbon needs in the future. In Bloom, our customers see a peerless platform that is purposeful and practical by powering them with non-combustion-based, always-on clean power today using natural gas. and offering to transition them to net zero fuels when they become viable. We are offering them energy security, economic security, and environmental security. We are confident that our quick time to power skid mounted energy server will become a solution of choice for commercial, industrial, and utility customers. As a company, we see the market conditions turning favorably for greater adoption of our server platform. We are well positioned to execute on the goals we have set and meet the moment. Now, two highlights. First, we have invested in our capacity expansion by standing up a new factory in Fremont, California. In 2021, we announced our decision to fund and build additional manufacturing capacity to support our growth. Many of you saw that factory under construction during our investor day. We told you that we would de-risk the execution by using copy exact manufacturing tools and processes and deliver a doubling of stack manufacturing capacity by end of 2022. We are on track to doing what we said we would do. Last month, we produced 40% more stacks than we did in July. We are on track to double our stack production by the end of the year over 2021 levels. The factory also has functional flexibility and advantages we told you it would have. The manufacturing line is currently producing fuel cell stacks and electrolyzer stacks using the same equipment and same team members on the same lines. The commercial and operational advantages of this flexibility is huge, and it is unique to the Bloom Energy Server platform and architecture. You will see the benefit of our on-time execution of the factory through better margins in Q4 as our volumes ramp up. Second, our technology is flexible. Different products that serve different customer needs run on the same basic technology. We have discussed the ease and speed with which we can adapt the platform to new applications. Now, I can point to our marine applications to illustrate these points. We signed our first contract with Shanti AD Atlantic in June of last year, and at that time said we planned to deploy on our first ship in Q3 of 2022. I'm very pleased to say we did that with near perfect execution. As of a few weeks ago, we are providing 150 kilowatts of power for MSC's New World Europa, the world's largest liquefied natural gas powered cruise ship and one of the first to incorporate fuel cell technology. It is on its way to Doha, Qatar to host guests during the World Cup. This is a sea change moment in this massive industry as it evolves towards a net zero and sustainable future. The industry wants clean vessels, and in many cases have been holding off ship purchases to wait for the perfect technologies, even though they may still be years away. Bloom's energy server offers them a better solution that they can deploy today and a clear pathway to a net zero future. As Lyndon Coppell, head of sustainability and ESG at MSC Cruises, has said publicly, Bloom's fuel cells will reduce emissions of greenhouse gases substantially compared to conventional LNG engine without producing emissions of nitrogen oxides, sulfur oxides, or particulates. She also recognized that Bloom's technology was future proof. It is compatible with the low and zero carbon fuels of the future, such as green methanol, ammonia, synthetic LNG, and hydrogen. This is why CDA and MSC adopted Bloom's technology. On the marine front, we believe our execution and success is leading to real momentum and we will have more to say in the coming months. Let me now turn it over to Greg to elaborate on our financial and operational performance and join you after that to answer your questions. Greg?