Fluence Energy, Inc. Reports Second Quarter Fiscal 2023 Results

Raising Full Fiscal Year 2023 Guidance on Record Quarterly Performance


ARLINGTON, Va., May 10, 2023 (GLOBE NEWSWIRE) -- Fluence Energy, Inc. (Nasdaq: FLNC) (“Fluence” or the “Company”), a leading global pure-play provider of energy storage products and services as well as digital applications for renewables and storage, today announced its results for the three months ended March 31, 2023.

Financial Highlights for Second Fiscal Quarter of 2023

  • Record quarterly revenue of approximately $698 million which represents an increase of 104% year-over-year.
  • GAAP gross profit margin improved to approximately 4.4%, compared to approximately negative 4.3% for the same quarter last year.
  • Adjusted gross profit margin1 improved to approximately 4.6%, compared to approximately negative 3.3% for the same quarter last year.
  • Net loss of $37.4 million, compared to net loss of $60.7 million for the same quarter last year.
  • Adjusted EBITDA1 of negative $24.8 million, compared to negative $53.2 million for the same quarter last year.
  • Total backlog2 of $2.8 billion as of March 31, 2023, compared to $2.7 billion as of December 31, 2022.

Executive Summary

Commenting on the quarter, Julian Nebreda, the Company’s President and Chief Executive Officer, said “We delivered a record quarter highlighted by our highest quarterly revenue. Our financial results reflect our success in accelerating project execution ahead of schedule. As a result of our exceptional performance, we are now closer to reaching profitability on an Adjusted EBITDA basis. We continue to experience strong demand for our offerings across several markets."

"Furthermore, we are pleased to see the recent release of some of the Inflation Reduction Act guidelines by the U.S. Department of the Treasury. We await further details relating to domestic content however, we are on schedule with our U.S. module manufacturing which we believe will enable our customers to qualify for the additional incentives."

Mr. Nebreda continued, "Additionally, I am pleased to report that we are making substantial progress on each of our strategic objectives detailed below."

Strategic Objectives

  1. Deliver Profitable Growth
    • We are raising our Fiscal Year 2023 guidance range to $1.85-$2.0B for revenue and $110-$135M for adjusted gross profit3 guidance due to select project timing acceleration.
    • We are pulling forward our profitability timeline and now expect to be close to Adjusted EBITDA breakeven in the fourth fiscal quarter of 2023.
  2. Develop Products and Solutions That Our Customers Need
    • We received a 200 MW binding award for Energy-Storage-as-Transmission, making this our third award for the transmission segment.
  3. Convert Our Supply Chain into a Competitive Advantage
    • We signed a master supply agreement with AESC, under which Fluence is anticipated to procure battery cells, which adds another battery cell supplier to our portfolio.
  4. Use Fluence Digital as a Competitive Differentiator and Margin Driver
    • We anticipate that we will begin quoting Fluence NisperaTM , our asset performance management platform, in standard orders starting in May 2023, illustrating our progress on our 'One Sales Channel' approach.
  5. Work Better
    • In May, we published our inaugural Sustainability Report.

Fiscal Year 2023 Guidance

The Company is increasing its fiscal year 2023 total revenue guidance range to $1.85 billion to $2.0 billion. Furthermore, the Company is increasing its fiscal year 2023 adjusted gross profit4 guidance range to $110 million to $135 million.

"We are making notable progress in our execution, particularly with regards to improving cycle times on select projects," said Manavendra Sial the Company's Chief Financial Officer. "It is our belief that we will continue to see progress through the remainder of the year and will reach close to breakeven on a quarterly Adjusted EBITDA basis by the end of our fiscal year. This visibility also provides us the confidence to increase our fiscal year 2023 guidance as well as narrow the guidance range."

The foregoing 2023 Fiscal Year Guidance statement represents management's current best estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.

Share Count

The shares of the Company’s common stock as of March 31, 2023 are presented below:

 Common Shares
Class B-1 common stock held by AES Grid Stability, LLC58,586,695
Class A common stock held by Siemens AG39,738,064
Class A common stock held by Siemens Pension-Trust E.V.18,848,631
Class A common stock held by Qatar Holding LLC18,493,275
Class A common stock held by public39,406,490
Total Class A and Class B-1 common stock outstanding175,073,155


Conference Call Information

The Company will conduct a teleconference starting at 8:30 a.m. EDT on Thursday, May 11th, 2023, to discuss the second fiscal quarter results. To participate, analysts are required to register by clicking Fluence Energy Q2 Earnings Call Registration Link. Once registered, analysts will be issued a unique PIN number and dial-in number. Analysts are encouraged to register at least 15 minutes before the scheduled start time.

General audience participants, and non-analysts are encouraged to join the teleconference in a listen-only mode at: Fluence Energy Listen - Only Webcast , or on www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations. Supplemental materials that may be referenced during the teleconference will be available at: www.fluenceenergy.com, by selecting Investors, News & Events, and Events & Presentations.

A replay of the conference call will be available after 1:00 p.m. EDT on Thursday, May 11th, 2023. The replay will be available on the company’s website at www.fluenceenergy.com by selecting Investors, News & Events, and Events & Presentations.

Non-GAAP Financial Measures

We present our operating results in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We believe certain financial measures, such as Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Loss, and Free Cash Flows, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. We believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. Such non-GAAP measures should be considered as a supplement to, and not as a substitute for, financial measures prepared in accordance with GAAP. These measures have limitations as analytical tools, including that other companies, including companies in our industry, may calculate these measures differently, reducing their usefulness as comparative measures. Please refer to the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP measures included in this press release and the accompanying tables contained at the end of this release.

The Company is not able to provide a quantitative reconciliation of Adjusted Gross Profit to GAAP Gross Profit on a forward-looking basis within this press release because of the uncertainty around certain items that may impact Adjusted Gross Profit, including stock compensation and reorganization expenses, which are not within our control or cannot be reasonably predicted without unreasonable effort.

About Fluence

Fluence Energy, Inc. (Nasdaq: FLNC) is a global market leader in energy storage products and services, and cloud-based software for renewables and storage. With a presence in over 40 markets globally, Fluence provides an ecosystem of offerings to drive the clean energy transition, including modular, scalable energy storage products, comprehensive service offerings, and the Fluence IQ Platform, which delivers AI-enabled SaaS products for managing and optimizing renewables and storage from any provider. The Company is transforming the way we power our world by helping customers create more resilient and sustainable electric grids.

For more information, visit Fluence’s website, or follow us on LinkedIn or Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, without limitation, statements set forth above under “Fiscal Year 2023 Guidance,” and other statements regarding the Company's future financial and operational performance, including the anticipated timing of Adjusted EBITDA breakeven and achieving profitability, anticipated demand for the Company's energy storage products, relationships with new and existing suppliers, and the Company's progress towards meeting its strategic objectives, expansion plans, impact of the Inflation Reduction Act of 2022 or any other proposed legislation, anticipated timeline of quoting Fluence Nispera in standard orders, future results of operations, future revenue recognition and estimated revenues, losses, projected costs, prospects, plans and objectives of management. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this press release, words such as “may,” “possible,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions and variations thereof and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments, as well as a number of assumptions concerning future events, and their potential effects on our business. These forward-looking statements are not guarantees of performance, and there can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, our ability to achieve or maintain profitability, our ability to execute projects, our ability to successfully execute our business and growth strategy, our ability to develop new product offerings and services and adoption of such new product offerings and services by customers, increased shipping costs and delays in the shipping of our energy storage products, projects delays and site closures and cost-overruns, failure to realize potential benefits of the Inflation Reduction Act of 2022, and other factors set forth under Item 1A.“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, filed with the Securities and Exchange Commission (“SEC”) on December 14, 2022, and in other filings we make with the SEC from time to time. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements made in this press release. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we become aware of, after the date hereof, except as otherwise may be required by law.


FLUENCE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in Thousands, except share and per share amounts)
    
 Unaudited  
 March 31,
2023
 September 30,
2022
Assets   
Current assets:   
Cash and cash equivalents 194,357   357,296 
Restricted cash 108,224   62,425 
Short-term investments 70,023   110,355 
Trade receivables 337,535   86,770 
Unbilled receivables 152,774   138,525 
Receivables from related parties 88,385   112,027 
Advances to suppliers 65,966   54,765 
Inventory, net 763,215   652,735 
Other current assets 27,922   26,635 
Total current assets 1,808,401   1,601,533 
Non-current assets:   
Property and equipment, net 13,403   13,755 
ROU Asset - Operating Leases 3,124   2,403 
Intangible assets, net 49,676   51,696 
Goodwill 25,944   24,851 
Deferred income tax asset 2,571   3,028 
Advances to suppliers    8,750 
Debt issuance cost 2,361   2,818 
Note receivable - pledged as collateral 24,330   24,330 
Other non-current assets 17,777   12,490 
Total non-current assets 139,186   144,121 
Total assets 1,947,587   1,745,654 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable 399,991   304,898 
Deferred revenue 584,425   273,073 
Personnel related liabilities 27,234   21,286 
Accruals and provisions 106,447   183,814 
Payables and deferred revenue with related parties 195,220   306,348 
Taxes payable 17,295   11,114 
Current portion of operating lease liabilities 1,534   1,732 
Other current liabilities 12,819   7,198 
Total current liabilities 1,344,965   1,109,463 
Non-current liabilities:   
Operating lease liabilities, net of current portion 1,847   1,011 
Deferred income tax liability 3,499   4,876 
Borrowings against note receivable - pledged as collateral 21,602    
Other non-current liabilities 7,679   1,096 
Total non-current liabilities 34,627   6,983 
Total liabilities 1,379,592   1,116,446 
Stockholders’ Equity:   
Preferred stock, $0.00001 per share, 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2023 and September 30, 2022     
Class A common stock, $0.00001 par value per share, 1,200,000,000 shares authorized; 117,058,711 shares issued and 116,486,460 shares outstanding as of March 31, 2023; 115,424,025 shares issued and 114,873,121 shares outstanding as of September 30, 2022 1   1 
Class B-1 common stock, $0.00001 par value per share, 200,000,000 shares authorized; 58,586,695 and 58,586,695 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively     
Class B-2 common stock, $0.00001 par value per share, 200,000,000 shares authorized; no shares issued and outstanding as of March 31, 2023 and September 30, 2022     
Treasury stock, at cost (5,301)  (5,013)
Additional paid-in capital 563,222   542,602 
Accumulated other comprehensive income (565)  2,784 
Accumulated deficit (154,041)  (104,544)
Total stockholders’ equity attributable to Fluence Energy, Inc. 403,316   435,830 
Non-Controlling interests 164,679   193,378 
Total stockholders’ equity 567,995   629,208 
Total liabilities and stockholders’ equity 1,947,587   1,745,654 



FLUENCE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (UNAUDITED)
(U.S. Dollars in Thousands, except share and per share amounts)
 
 Three Months Ended
March 31,
 Six Months Ended
March 31,
  2023   2022   2023   2022 
Revenue 405,110   115,798   614,564   142,852 
Revenue from related parties 293,076   226,926   394,082   374,759 
Total revenue 698,186   342,724   1,008,646   517,611 
Cost of goods and services 667,373   357,472   965,793   585,508 
Gross (loss) profit 30,813   (14,748)  42,853   (67,897)
Operating expenses:       
Research and development 22,551   13,340   41,713   24,098 
Sales and marketing 10,401   6,191   19,193   19,250 
General and administrative 31,778   25,237   63,045   56,438 
Depreciation and amortization 2,669   1,493   5,093   2,920 
Interest expense 1,144   676   1,960   1,358 
Other income (expense), net 207   1,109   12,821   283 
Loss before income taxes (37,523)  (60,576)  (75,330)  (171,678)
Income tax expense (benefit) (126)  128   (740)  486 
Net loss (37,397)  (60,704)  (74,590)  (172,164)
Net loss attributable to non-controlling interest (12,542)  (41,519)  (25,093)  (124,174)
Net loss attributable to Fluence Energy, Inc. (24,855)  (19,185)  (49,497)  (47,990)
        
Weighted average number of Class A common shares outstanding       
Basic and diluted 116,266,838   54,143,275   115,825,339   54,143,275 
Loss per share of Class A common stock       
Basic and diluted (0.21)  (0.35)  (0.43)  (0.89)
        
Foreign currency translation gain (loss), net of income tax expense of $0.1 million in the three months ended March 31, 2023, $0.4 million in the six months ended March 31, 2023, and $0 in the three months and six months ended March 31, 2022 (1,469)  (20)  (5,054)  279 
Total other comprehensive income (loss) (1,469)  (20)  (5,054)  279 
Total comprehensive loss (38,866)  (60,724)  (79,644)  (171,885)
Comprehensive loss attributable to non-controlling interest (13,036)  (41,533)  (26,798)  (124,103)
Total comprehensive loss attributable to Fluence Energy, Inc. (25,830)  (19,191)  (52,846)  (47,782)



FLUENCE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(U.S. Dollars in Thousands)
 
 Six Months Ended March 31,
  2023   2022 
Operating activities   
Net loss (74,590)  (172,164)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 5,093   2,920 
Amortization of debt issuance costs 457   343 
Inventory (benefit) provision (422)   
Stock-based compensation expense 15,763   21,874 
Deferred income taxes (1,276)   
Benefit on loss contracts (1,973)  (6,261)
Changes in operating assets and liabilities:   
Trade receivables (244,433)  (79,570)
Unbilled receivables (8,756)  20,675 
Receivables from related parties 23,683   (3,672)
Advances to suppliers (3,793)  (65,779)
Inventory, net (103,464)  37,802 
Other current assets 3,148   (7,391)
Other non-current assets (292)  135 
Accounts payable 93,447   (30,426)
Payables and deferred revenue with related parties (112,586)  (51,252)
Deferred revenue 300,007   151,450 
Current accruals and provisions (75,708)  37,243 
Taxes payable 3,702   4,383 
Other current liabilities 10,511   373 
Other non-current liabilities 8,071   (1,679)
Net cash used in operating activities (163,411)  (140,996)
Investing activities   
Purchase of equity securities    (1,124)
Proceeds from maturities of short-term investments 41,603    
Payments for purchase of investment in joint venture (5,013)   
Purchase of property and equipment (1,087)  (1,271)
Net cash provided by (used) in investing activities 35,503   (2,395)
Financing activities   
Proceeds from issuance of Class A common stock sold in an IPO, net of underwriting discounts and commissions    947,991 
Payment of IPO costs    (10,330)
Payment of transaction cost related to issuance of Class B membership units    (6,320)
Payment of debt issuance costs    (3,297)
Repurchase of class A common stock placed into treasury (288)   
Proceeds from exercise of stock options 2,956    
Repayment of promissory notes – related parties    (50,000)
Repayment of line of credit    (50,000)
Proceeds from borrowing against note receivable - pledged as collateral 21,142    
Net cash provided by financing activities 23,810   828,044 
Effect of exchange rate changes on cash and cash equivalents (13,042)  (34)
Net (decrease) increase in cash, cash equivalents, and restricted cash (117,140)  684,619 
Cash, cash equivalents, and restricted cash as of the beginning of the period 429,721   38,069 
Cash, cash equivalents, and restricted cash as of the end of the period 312,581   722,688 
Supplemental Cash Flows Information   
Interest paid 511   503 
Cash paid for income taxes 585   614 
Non-cash financing activities   
Reclassification of deferred offering costs to additional paid-in capital    1,899 


FLUENCE ENERGY, INC.
KEY OPERATING METRICS (UNAUDITED)

The following tables present our key operating metrics as of March 31, 2023 and September 30, 2022, and order intake for the three and six months ended March 31, 2023 and 2022. The tables below present the metrics in either Gigawatts (GW) or Gigawatt hours (GWh). Our key operating metrics focus on project milestones to measure our performance and designate each project as either “deployed”, “assets under management”, “contracted” or “pipeline”.

  March 31, 2023   September 30, 2022  Change  Change %
Energy Storage Products and Solutions         
Deployed (GW) 2.3   1.8  0.5  28%
Deployed (GWh) 5.5   5.0   0.5   10%
Contracted Backlog (GW) 4.3   3.7  0.6  16%
Pipeline (GW) 10.7   9.3   1.4   15%
Pipeline (GWh) 27.5   22.6  4.9  22%


(Amounts in GW) March 31, 2023   September 30, 2022 Change Change %
Service Contracts      
Assets under Management 2.2  2.0  0.2  10%
Contracted Backlog 2.8  2.0  0.8  40%
Pipeline 7.5  8.8  (1.3) (15%)


(Amounts in GW) March 31, 2023   September 30, 2022  Change  Change %
Digital Contracts        
Assets under Management 14.8  13.7  1.1  8%
Contracted Backlog 5.9  3.6  2.3  64%
Pipeline 21.4  19.6  1.8  9%

The table below reflect adjustments made to the 2022 contracted figures reported for energy storage products and digital contracts as a result of enhanced internal control procedures implemented by management during our 2022 year end procedures. Previously we reported energy storage products contracted of 0.6 GW for the three months ended March 31, 2022, digital contracted of 2.8 GW and 3.1 GW for the three months and six months ended March 31, 2022, respectively. Further, prior period metrics were previously presented in Megawatts (MW).

(amounts in GW)

Three Months Ended March 31,    Six Months Ended March 31,   
2023 2022ChangeChange %2023 2022ChangeChange %
Energy Storage Products and Solutions        
Contracted0.6 0.50.1 20% 1.2 1.2 %
Service Contracts          
Contracted1.0 0.30.7 233% 1.1 0.60.5 83%
Digital Contracts          
Contracted2.7 2.9(0.2)(7)%3.5 3.30.26%

Deployed

Deployed represents cumulative energy storage products and solutions that have achieved substantial completion and are not decommissioned. Deployed is monitored by management to measure our performance towards achieving project milestones.

Assets Under Management

Assets under management for service contracts represents our long-term service contracts with customers associated with our completed energy storage system products and solutions. We start providing maintenance, monitoring, or other operational services after the storage product projects are completed. In some cases, services may be commenced for energy storage solutions prior to achievement of substantial completion. This is not limited to energy storage solutions delivered by Fluence. Assets under management for digital software represents contracts signed and active (post go live). Assets under management serves as an indicator of expected revenue from our customers and assists management in forecasting our expected financial performance.

Contracted Backlog

For our energy storage products and solutions contracts, contracted backlog includes signed customer orders or contracts under execution prior to when substantial completion is achieved. For service contracts, contracted backlog includes signed service agreements associated with our storage product projects that have not been completed and the associated service has not started. For digital applications contracts, contracted backlog includes signed agreements where the associated subscription has not started.

Contracted/Order Intake

Contracted, which we use interchangeably with “Order Intake”, represents new energy storage product contracts, new service contracts and new digital contracts signed during each period presented. We define “Contracted” as a firm and binding purchase order, letter of award, change order or other signed contract (in each case an “Order”) from the customer that is received and accepted by Fluence. Our order intake is intended to convey the dollar amount and gigawatts (operating measure) contracted in the period presented. We believe that order intake provides useful information to investors and management because the order intake provides visibility into future revenues and enables evaluation of the effectiveness of the Company’s sales activity and the attractiveness of its offerings in the market.

Pipeline

Pipeline represents our uncontracted, potential revenue from energy storage products, service, and digital software contracts, which have a reasonable likelihood of contract execution within 24 months. Pipeline is an internal management metric that we construct from market information reported by our global sales force. Pipeline is monitored by management to understand the anticipated growth of our Company and our estimated future revenue related to customer contracts for our battery-based energy storage products and solutions, services and digital software.

We cannot guarantee that our contracted backlog or pipeline will result in actual revenue in the originally anticipated period or at all. Contracted backlog and pipeline may not generate margins equal to our historical operating results. We have only recently begun to track our contracted backlog and pipelines on a consistent basis as performance measures, and as a result, we do not have significant experience in determining the level of realization that we will achieve on these contracts. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our contracted backlog and pipeline fail to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.

 

FLUENCE ENERGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED)

The following tables present our non-GAAP measures for the periods indicated.

($ in thousands)

Three Months Ended March 31,Change



Change %

 Six Months Ended March 31,Change



Change %

2023
2022
 2023 2022 
Net loss(37,397) (60,704)$(23,307)(38)% (74,590) (172,164) $(97,574) (57)%
Add (deduct):               
Interest expense (income), net(a)(1,077)455  (1,532)(337)% (1,733) 1,070   (2,803) (262)%
Income tax expense (benefit)(126)128  (254)(198)% (740) 486   (1,226) (252)%
Depreciation and amortization2,669 1,493  1,176 79% 5,093  2,920   2,173  74%
Stock-based compensation(b) 7,263  2,728   4,535 166% 15,763  27,605   (11,842) (43)%
Other expenses(c)3,843 2,706  1,137 42% 5,927  44,056   (38,129) (87)%
Adjusted EBITDA(24,825) (53,194)  28,369 53% (50,280) (96,027)  45,747 48%

(a) Net interest expense (income) for the three months ended March 31, 2023 consists of $1.1 million of interest expense and $2.2 million of interest income. Net interest expense (income) for the three months ended March 31, 2022 consists of $0.7 million of interest expense and $0.2 million of interest income.

Net interest expense (income) for the six months ended March 31, 2023 consists of $2.0 million of interest expense and $3.7 million of interest income. Net interest expense (income) for the six months ended March 31, 2022 consists of $1.4 million of interest expense and $0.3 million of interest income.

(b) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.

(c) Amount for the three months ended March 31, 2023 included $1.2 million in severance costs and consulting fees related to the restructuring plan, $0.8 million related to the 2021 Cargo Loss Incident, $1.1 million for external expenses related to the ongoing remediation of our material weakness disclosed in our FY 2022 Form 10-K, and $0.7 million in legal fees related to the 2021 and 2022 overheating events at customer facilities.

Amount for the three months ended March 31, 2022 included a $(1.7) million reduction related to COVID-19 pandemic costs as a result of release of $(6.4) million prior period project charges net of excess shipping costs of approximately $4.7 million which was mostly related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages and a $4.4 million loss related to the 2021 Cargo Loss Incident.

Amount for the six months ended March 31, 2023 included $2.7 million in severance costs and consulting fees related to the restructuring plan, $1.9 million related to the 2021 Cargo Loss Incident, $1.1 million for external expenses related to the ongoing remediation of our material weakness disclosed in our FY 2022 Form 10-K, and $0.2 million in legal fees related to the 2021 and 2022 overheating events at customer facilities.

Amount for the six months ended March 31, 2022 included $35.3 million of costs related to COVID-19 pandemic including excess shipping costs, project charges and other costs, a $8.6 million loss related to the 2021 Cargo Loss Incident, and $0.1 million IPO-related expenses which did not qualify for capitalization. The incremental costs due to COVID-19 pandemic includes (a) approximately $6.4 million due to excess shipping costs primarily related to abnormally high shipping rates resulting from pandemic-related disruptions in the global supply chain and our distribution channels, (b) additional costs of approximately $4.0 million related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages, (c) approximately $14.4 million in incremental charges and excess costs incurred during the introduction of our newly launched Gen6 solutions due to disruptions in normal course quality assurance processes and (d) approximately $10.5 million in incremental project charges principally related to liquidated damages under the terms of our customer contracts.

($ in thousands)

 Three Months Ended March 31,Change



Change %

 Six Months Ended March 31,Change



Change %

 2023
2022
 2023
2022
Total revenue 698,186 342,724 355,462 104% 1,008,646  517,611  491,035  95%
Cost of goods and services667,373 357,472 309,901 87% 965,793  585,508  380,285  65%
Gross (loss) profit30,813 (14,748)(45,561)(309)% 42,853 (67,897) (110,750) (163)%
Add (deduct):           
Stock-based compensation(a) 1,256  749  507 68% 2,156  4,277  (2,121) (50)%
Other expenses(b)(179)2,706 (2,885)(107)% 1,563  43,972  (42,409) (96)%
Adjusted Gross Profit (Loss) 31,890 (11,293)(43,183)(382)%46,572 (19,648)(66,220)(337)%
Adjusted Gross Profit Margin %4.6%(3.3)%4.6%(3.8)%

​​​(a) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.

(b) Amount for the three months ended March 31, 2023 included reversal of costs of $(0.3) million related to legal matters, primarily related to the 2021 Cargo Loss Incident and the 2021 and 2022 overheating events at customer facilities and $0.1 million in severance costs related to the restructuring plan.

Amount for the three months ended March 31, 2022 included a $(1.7) million reduction related to COVID-19 pandemic costs as a result of release of $(6.4) million prior period project charges net of excess shipping costs of approximately $4.7 million which was mostly related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages and a $4.4 million loss related to the 2021 Cargo Loss Incident.

Amount for the six months ended March 31, 2023 included $1.3 million related to legal matters, primarily related to the 2021 Cargo Loss Incident and 2021 and 2022 overheating events at customer facilities and $0.3 million in severance costs related the restructuring plan.

Amount for the six months ended March 31, 2022 included $35.3 million costs related to COVID-19 pandemic including excess shipping costs, project charges and other costs as discussed above, and a $8.6 million loss related to the 2021 Cargo Loss Incident. The incremental costs due to COVID-19 pandemic includes (a) approximately $6.4 million due to excess shipping costs primarily related to abnormally high shipping rates resulting from pandemic-related disruptions in the global supply chain and our distribution channels, (b) additional costs of approximately $4.0 million related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages, (c) approximately $14.4 million in incremental charges and excess costs incurred during the introduction of our newly launched Gen6 solutions due to disruptions in normal course quality assurance processes, and (d) approximately $10.5 million in incremental project charges principally related to liquidated damages under the terms of our customer contracts.

($ in thousands)

 Three Months Ended March 31,Change



Change %

 Six Months Ended March 31,Change



Change %

 2023
2022
 2023
2022
Net loss (37,397) (60,704)$(23,307)(38)% (74,590) (172,164) $(97,574)(57)%
Add (deduct):           
Amortization of intangible assets 1,354 920  434 47% 2,894  1,838   1,056  57%
Stock-based compensation(a) 7,263  2,728   4,535 166% 15,763  27,605   (11,842) (43)%
Other expenses(b)3,843 2,706  1,137 42% 5,927  44,056   (38,129) (87)%
Adjusted Net Loss (24,937)(54,350)$(29,413)(54)%(50,006)(98,665)$(48,659)(49)%

(a) Includes incentive awards that will be settled in shares and incentive awards that will be settled in cash.
(b) Amount for the three months ended March 31, 2023 included $1.2 million in severance cost and consulting fees related to the restructuring plan, $0.8 million related to the 2021 Cargo Loss Incident, $1.1 million for external expenses related to the ongoing remediation of our material weakness disclosed in our FY 2022 Form 10-K, and $0.7 million in legal fees related to the 2021 and 2022 overheating events at customer facilities.

Amount for the three months ended March 31, 2022 included a $(1.7) million reduction related to COVID-19 pandemic costs as a result of release of $(6.4) million prior period project charges net of excess shipping costs of approximately $4.7 million which was mostly related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages, and a $4.4 million loss related to the 2021 Cargo Loss Incident.

Amount for the six months ended March 31, 2023 included $2.7 million in severance costs and consulting fees related to the restructuring plan, $1.9 million related to the 2021 Cargo Loss Incident, $1.1 million for external expenses related to the ongoing remediation of our material weakness disclosed in our FY 2022 Form 10-K, and $0.2 million in legal fees related to the 2021 and 2022 overheating events at customer facilities.

Amount for the six months ended March 31, 2022 included $35.3 million costs related to COVID-19 pandemic including excess shipping costs, project charges and other costs, a $8.6 million loss related to the 2021 Cargo Loss Incident as discussed above, and $0.1 million IPO-related expenses which did not qualify for capitalization. The incremental costs due to COVID-19 pandemic includes (a) approximately $6.4 million due to excess shipping costs primarily related to abnormally high shipping rates resulting from pandemic-related disruptions in the global supply chain and our distribution channels, (b) additional costs of approximately $4.0 million related to excess port and demurrage fees as a direct result of pandemic-related port disruptions and work shortages, (c) approximately $14.4 million in incremental charges and excess costs incurred during the introduction of our newly launched Gen6 solutions due to disruptions in normal course quality assurance processes, and (d) approximately $10.5 million in incremental project charges principally related to liquidated damages under the terms of our customer contracts.

($ in thousands)

 Six Months Ended March 31,Change



Change %

 2023  2022 
Net cash used in operating activities (163,411) (140,996)$22,415 16%
Less: Purchase of property and equipment (1,087)(1,271) (184)(14)%
Free Cash Flows (164,498)(142,267)$22,231 16%

____________________________

1 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as reconciliations to the most directly comparable financial measures stated in accordance with GAAP.
2 For our energy storage products and solutions contracts, contracted backlog includes signed customer orders or contracts under execution prior to when substantial completion is achieved. For service contracts, contracted backlog includes signed service agreements associated with our storage product projects that have not been completed and the associated service has not started. For digital application contracts, contracted backlog includes signed agreements where the associated subscription has not started.
3 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as reconciliations to the most directly comparable financial measures stated in accordance with GAAP.
4 Non-GAAP Financial Metric. See the section below titled “Non-GAAP Financial Measures” for more information regarding the Company's use of non-GAAP financial measures, as well as reconciliations to the most directly comparable financial measures stated in accordance with GAAP.

 

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