Bloom Energy Corporation

Hello and welcome to Bloom Energy third quarter 2024 earnings conference call. Please note that this call is being recorded. After the speaker's remarks, there will be a Q&A session. If you'd like to ask a question during that time, please press star and number one on your telephone keypad. Thank you. I'd now like to hand the call over to Michael Tierney, Vice President, Investor Relations. You may now begin.

Thank you and good afternoon, everybody. Thank you for joining us for Bloom Energy's third quarter 2024 earnings call. To supplement this conference call, we furnished our third quarter 2024 earnings press release with the SEC on Form 8K and have posted along with supplemental financial information that we will reference throughout this call to our investor relations website. 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 2024. 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 10-K and 10-Q. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our third quarter 2024 earnings press release, 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 2024 earnings press release available on our investor relations website. Joining me on the call today are K.R. Sridhar, founder, chairman, and chief executive officer, and Dan Berenbaum, our CFO. K.R. will begin with an overview of our process, and then Dan will review financial highlights for the quarter. After our prepared remarks, we will have time to take your questions. I will now turn the call over to K.R.

Hello, everyone, and thanks for joining us today. The energy landscape is going through changes at a pace we have never seen before, and it's both turbulent and transformational. As an energy transformation company, we at Bloom are both adapting to and creating change. Just walking the halls of where our commercial team operates and looking at their computer screens and whiteboards and hearing their calls and conversations, there is a palpable sense of positive momentum. The team is looking at a number of opportunities, and it is clear that they are working on several complex and large deals. A big shift in our business today is time to power. We are providing solutions to meet the urgent needs of our customers who cannot fulfill their power needs from the grid. In these cases, We rapidly book, build, shift, install, and power sites for our customers in a matter of months, a much faster timeline than a grid connection. Such rapid drill activities will necessarily come with timeline variances, both pull-ins and delays, and will affect our quarterly revenue line. You are seeing this in our Q3 numbers. Based on our current projects and the visibility we have through year end, I'm extremely confident that Bloom Energy will meet our total year guidance. This is because of our team remaining focused on serving our customers and on delivering results for our enterprise. I want to thank them for their hard work and dedication. More states in the US are now facing unprecedented power outages shortages, and steep price increases. Our U.S. commercial and industrial sectors that include healthcare, education, retail, telecom, and other industrials remain strong, and these customers, new and repeat, find our clean, reliable, and cost-predictable power solution very attractive. We have seen an uptick in our U.S. commercial and industrial business. We're very bullish about AI and the data center market and what that means for Bloom's growth. You see, our Bloom Energy fuel cell systems were purpose-built like a custom for the data center hand. Here are the five fingers or attributes. One, the millisecond scale time response of our solid oxide fuel cell technology to load variations is an advantage for AI loads. Two, the fault tolerant pay as you grow and high power density features of our system architecture make our solution economically attractive. Three, the ability to deliver AC or DC power at various medium voltage settings provides future electrical options. Four, The use of high temperature heat to provide cooling is a big benefit for GPUs that power the AI revolution. And five, the ability to go zero carbon with natural gas and switch to hydrogen in the future makes Bloom a sustainable solution. The level of commercial activity in the data center space has picked up even more than when I spoke to you 90 days ago. These are multi-party deals that are complex. A 100 megawatt data center deal has a commercial value of over $1 billion, and so it takes a minute, maybe a long Texas minute, to get a deal done. We are making good progress. Expect to hear more from us on this topic in the near future. I'd like to highlight a few key themes that demonstrate Bloom's ability to navigate and succeed in the evolving energy environment and deliver on our commitments to our customers. First, our ability to execute on large-scale projects is evident. The highlight of the quarter was a landmark agreement for an 80-megawatt fuel cell project in South Korea in partnership with SK Eternix. and Korea Development Bank, KDB, to create the world's largest single-site fuel cell installation in history. This project is a significant milestone for us and a testimony that fuel cells are now a core solution for large-scale power generation. We are excited to partner with two global leaders. SK Eternex is a longtime partner of Bloom and has been a distributor of our energy solutions in South Korea since 2019. Korea Development Bank is among the largest banks in the world fostering industrial development of Korea with over $230 billion in assets. This is a model we will replicate going forward. That is, partnering with renowned global companies and financial institutions to bring our solutions to other international markets. Importantly, this large power block project is a proof point to show Bloom can power large data centers. Second, it is clear that the power grid is simply not keeping up with the growth demands. Large amounts of power are needed from new sources of capacity. Bloom Energy servers provide this additionality behind and in front of the meter without adversely impacting the rate payer or grid reliability. We spoke a quarter ago about a unique front of the meter agreement between Bloom Energy and Silicon Valley Power. Today, we announced an agreement with FBM Development for 20 megawatts of Bloom's SOFC across two strategic locations in Los Angeles. This power provides additional capacity to Southern California utilities while taking advantage of Bloom's clean, reliable, affordable power. We are currently in negotiations with utilities in other parts of the country. Transmission is a critical aspect of the energy business. And we have been partnering with utilities to complement transmission solutions and remove bottlenecks for our customers. The recent FERC ruling highlights the consensus on the need for large-scale interconnections through new capacity additions. Utilities that adopt this model will likely find it easy to get their projects approved by regulators. Our SVP model has been successful and allows us to work with utilities in a mutually beneficial manner. By adding front and behind the meter capacity, we can ensure grid reliability and maintain competitive customer rates. In addition to front of the meter solutions to meet customer needs with the utility partner, we also work on behind the meter solutions directly with the customer. As an example, We spoke earlier this year about how Quanta needed power for an industrial facility in Northern California to support AI data centers. Bloom was able to book, manufacture, test, and install energy servers to fulfill that need. Later in the year, Quanta returned with a request to increase the power capacity by more than 150%. and create the largest islanded microgrid in Silicon Valley. Bloom was once again able to meet their demand ahead of schedule. In this islanded mode, we not only provide clean, reliable power, but also follow the load needs of the customer, a new feature, load following, that we have added to our offering. Lastly, we remind step fast in our commitment to cost reduction. It is ingrained in our DNA, and we are delighted to report that we are on course to achieve double digit cost reductions for the year, just as we have done in previous years. By continuously optimizing our operations, driving efficiencies in manufacturing, and focusing on continued technical innovation, we can deliver our cost reduction goals this year and look forward to doing the same as we go forward. As we look ahead, we are confident in our ability to grow the business based on strong commercial momentum, excellent operational execution, and ongoing innovation. Our ability to execute large-scale projects, reduce costs, and provide reliable power solutions make us a trusted partner for our customers. Put simply, if you want to generate 24-7 power reliably at the point of use without air pollution and noise, and you need it now, there is no better solution in the market than Bloom Energy servers. We are excited about our opportunities ahead. I look forward to taking your questions, but for now, I'll turn it over to Dan.