Bloom Energy Corporation Q2 FY2025 earnings call

• Bloom had an excellent quarter with record revenue and profitability, the highest in 24-year history.
• Strategic partnerships with AEP, AWS, Coralogix, and Oracle, including Oracle where they aim to power a data center in 90 days.
• Product is designed for data centers and mission-critical applications, offering time to power, cleaner, more reliable, and cost-effective solution.
• Service business profitable for 6 quarters, double-digit margins achieved. Debt refinanced to provide growth optionality. Tax credits restored for fuel cell installations.
• Plan to double factory capacity from 1 GW to 2 GW by end of next year, leveraging AI and digital twins for continuous improvement.

Revenue for the quarter was $401 million, up 19.5% year-over-year. Gross margin was 28.2%, 650 basis points higher than Q2 2024. Operating income was $28.6 million versus a $3.2 million loss in Q2 2024. Adjusted EBITDA was $41.2 million versus $10.2 million in Q2 2024. EPS was a positive $0.10 versus a loss of $0.06 a year ago. The service business has been profitable for 6 consecutive quarters.

• Reiterates 2025 guidance: revenue $1.65 billion to $1.85 billion, non-GAAP gross margin ~29%, non-GAAP operating income $135 million to $165 million.
• Expect positive cash flow from operations and CapEx similar to 2024.
• Anticipates 40-60 first half-second half revenue split.

• Forward-looking statements subject to numerous known and unknown risks from SEC filings.
• Potential delays in customer projects due to interconnection agreements, permits, gas connections, etc.

Q: Could you elaborate on recent success with hyperscalers, including Oracle partnership, scale, and potential as an accelerant for deals?

A: The Oracle deal is a significant islanded power project for an AI data center, allowing Bloom to showcase capabilities and optimize customer costs. Seen as extremely significant and a start for more deals.

Q: How long to build out capacity and funding?

A: Exact timelines not specified, but Bloom can increase capacity quickly with deliberate planning, expecting ~$100 million cost, well-funded.

Q: What's driving operating margin improvement and future targets?

A: Fiscal discipline, cost reduction, level loading manufacturing, and commercial team effectiveness. Operating income expected to continue improving, though may vary quarter-to-quarter.

Q: Progress with AEP collaboration and combined heat power solution?

A: Hopeful for more AEP collaboration to fulfill 1 GW service agreement. Combined heat power solution is appealing with high interest from customers, addable as an 'app' to the solution.

Q: Demand and ITC impact on guidance?

A: Guidance range due to customer project timelines (permits, connections, etc.). ITC available with no gap for customers, as they can avail of credits under safe harbor.

Q: Oracle deal impact on full-year guidance?

A: Portion of revenue comes from deals booked, built, shipped, and recognized in the same year, with secular trend enabling quick cycle, already embedded in guidance.

Q: International opportunities, especially Taiwan?

A: ~30% of business is international, with progress in Taiwan, Germany, Italy, UK. Developing new markets with policymakers and regulators.

Q: Temporary power and industrial demand?

A: Bloom systems are modular, movable, and attractive for temporary power, with interest from hyperscalers. Incremental demand from longer cycle industrial plants.

Q: Tax credits and pricing?

A: BBV provides flat 30% ITC, but with cost reductions and high electricity prices, attractiveness remains high, margins maintained.

Q: Product development and generations?

A: Product improves continuously via digital twins and 4 trillion data points, not by generations. Continuous improvement with new attributes like CHP and load following.

Q: Comparison to gas turbines?

A: Bloom's solution is easier to permit, lower operating cost, CapEx at parity, no air pollution, making it more favorable than gas turbines.

Q: AEP projects and Oracle deal details?

A: AWS and Coralogix projects with AEP are part of the 100 MW, Oracle deal is a purchase order with power available in 90 days, no details on LOI/MOU discussed.

Q: Oracle deal status and manufacturing expansion funding?

A: Oracle deal is a executing purchase order, funding for manufacturing expansion is well-funded with ~$100 million expected, details in transcript.