Bloom Energy Corp

Previous wording

This Quarterly Report on Form 10-Q contains“forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about our industry, management’s beliefs, and certain assumptions made by management. For example, forward-looking statements include, but are not limited to, our expectations regarding our products and services, including our aim to provide resilient products, business strategies, including capital expenditures to expand production capacity and sources of funding for capital expenditures, our expanded strategic partnership with SK ecoplant, operations, supply chain (including any direct or indirect effects from the Russia-Ukraine war, armed conflict in the Middle East, or geopolitical developments in China), new markets, government incentive programs including the scheduled expiration of the Investment Tax Credit at the end of 2024, impact of the Inflation Reduction Act of 2022 (the “IRA”) and transferability of tax credits on our business and the financing market for installations of our products, impact of new foreign tax rules on our financial statements, growth of the hydrogen market, sufficiency of our cash and our liquidity, the potential to engage in equity or debt financing transactions, future capital requirements and use of proceeds, our commitments or contingencies, and statements under “Key Macro Trends.” All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact are forward-looking statements. Forward-looking statements may be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “designs,” “plans,”“predicts,” “targets,” “forecasts,” “will,” “would,” “could,” “can,” “may,” “aim,” “potential,” “mission,” “commit” and similar terms. These statements are based on the beliefs and assumptions of our management based on information currently available to management at the time they are made. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results, outcomes and the timing of certain events to differ materially from future results or outcomes expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those factors discussed in the section titled “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). You should review these risk factors for a more complete understanding of the risks associated with an investment in our securities. Such forward-looking statements speak only as of the date of this report. We disclaim any obligation to update any forward-looking statements made in this Quart…

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Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about our industry, management’s beliefs, and certain assumptions made by management. For example, forward-looking statements include, but are not limited to, our plans and expectations regarding future financial results, including our expectations regarding: our ability to expand into and be successful in new markets, including the hydrogen market; our expanded strategic partnership with SK ecoplant Co., Ltd.; statements about our supply chain (including any direct or indirect effects from the Russia-Ukraine war, armed conflict in the Middle East, or geopolitical developments in China); operating results; the sufficiency of our cash, our cash flows from operating activities and our liquidity and our ability to obtain financing; projected costs and cost reductions; development of new products and improvements to our existing products; our manufacturing capacity and manufacturing costs; the adequacy of our agreements with our suppliers; legislative actions and regulatory and environmental compliance; impact of the IRA, including expiration of the Investment Tax Credit with respect to fuel cells running on non-zero carbon fuels and transferability of tax credits on our business; competitive position; management’s plans and objectives for future operations; our ability to comply with debt covenants or cure defaults, if any; our ability to repay our debt obligations as they come due; trends in average selling prices; the success of our customer financing arrangements and ability to secure financiers; capital expenditures; warranty matters; outcomes of litigation; our exposure to foreign exchange, interest and credit risk; general business and macroeconomic conditions in our markets including inflationary pressure; trade policies including tariffs; industry trends; the impact of changes in government incentives; risks related to cybersecurity breaches, privacy and data security; the likelihood of any impairment of project assets, long-lived assets and investments; trends in revenue, cost of revenue and gross profit (loss); trends in operating expenses including research and development expense, sales and marketing expense and general and administrative expense and expectations regarding these expenses as a percentage of revenue; future deployment of our Bloom Energy Server systems, Bloom Electrolyzers, and other solutions; our ability to expand our business, including our ability to secure large data center customers; our ability to increase efficiency of our products; our ability to market our products successfully in connection with the global energy transition and shifting attitudes around climate change; our business strategy and plans and our objectives for future operations; a…

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Previous wording

Our mission is to make clean, reliable energy affordable for everyone in the world. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy.

Current wording

Our mission is to make clean, reliable energy affordable for everyone in the world. We developed the first large-scale, commercially viable solid oxide fuel cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy. For additional information, refer to Part I, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Overview, sub-section Description of Bloom Energyin our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

The global energy transition to a zero-carbon environment has created new challenges and opportunities for utilities, suppliers of energy solutions, and customers. Shifts and uncertainty in market and regulatory dynamics and corporate and governmental policies are currently impacting the selling process and extending sales cycles and timelines for our products. Increasing electricity rates, decreasing energy reliability, and delays in the development of transmission infrastructure and grid interconnection have led to increased customer interest in our power solutions. At the same time, natural gas supply and pricing concerns due to geopolitical stresses and resulting market changes as well as increasing focus on sustainability targets have led to increased caution from potential customers. Increasing demand for power has forced utilities, states and countries to revisit less clean sources of baseload and intermediate power, which our technology is designed to replace, in an attempt to ensure energy reliability. This supply and demand mismatch globally has threatened energy’s security, reliability, availability, and increased its cost.

Current wording

The global energy transition towards a net-zero environment has created new challenges and opportunities for utilities, suppliers of energy solutions, and customers. Shifts and uncertainty in market and regulatory dynamics and corporate and governmental policies are currently impacting the selling process and impacting sales cycles and timelines for our products. Increasing electricity rates, decreasing energy security and reliability, and delays in the development of transmission infrastructure and grid interconnection as well as other time-to-power challenges have led to increased customer interest in our power solutions. At the same time, ongoing natural gas supply and pricing concerns due to geopolitical stresses, as well as customers’ interest in meeting sustainability targets, have led to increased caution from potential customers in their buying decision for energy solutions. Increasing demand for power has forced utilities, states and countries to revisit less clean sources of baseload and intermediate power, which our technology is designed to replace. This supply and demand mismatch globally has threatened energy security, reliability, and availability.

Previous wording

Bloom enables customers to address these energy market challenges by offering fuel flexible solutions that are designed to provide cost predictable, resilient, and reliable energy in a timely fashion. As customers and utilities navigate the energy transition and evolving landscape, the ability of our power solutions to fit their economic, regulatory, and policy needs depends on a number of factors, including natural gas availability and pricing, electrical interconnection needs and availability, redundant back up power requirements, cost requirements, and sustainability profiles. Even in those situations where the time to power from the utility is measured in years because of the need to build out energy transmission infrastructure, these factors still may impact a customer’s buying decision.

Current wording

Bloom enables customers to address these energy market challenges by offering fuel flexible solutions designed to provide cost predictable, resilient, and reliable energy in a timely fashion. As customers and utilities navigate the energy transition and evolving landscape, the ability of our power solutions to fit their economic, regulatory, and policy needs depends on a number of factors, including natural gas availability and pricing, electrical interconnection needs and availability, redundant back up power requirements, cost requirements, and sustainability profiles. These factors may influence a customer’s decision to pursue an alternative power solution like ours — even in cases where utility interconnection timeliness span years – because the total cost to interconnect, including the build-out of energy transmission infrastructure, often remains unknown until all interconnection studies are completed.

Previous wording

Many data center customers and other large power users have signed exclusivity arrangements with their utilities, and this often creates a more complicated dynamic for them to move to a behind-the-meter solution. The rising cost of natural gas, increases in gas distribution rates, limited availability of natural gas supply, as well as disruptions to the world’s gas markets, has increased the cost of our power solutions for customers and, in certain cases where there is a lack of fuel supply, a complete inability to operate the systems. In the U.S., the lack or slow development of pipeline infrastructure is impacting the timing of customers being able to take advantage of our power solution opportunities. In certain jurisdictions in the U.S. and Europe, natural gas bans prevent the use of our power solutions unless alternative fuels are available.

Current wording

Many data center customers and other large power users have signed exclusivity arrangements with their utilities, and this often creates a more complicated dynamic for them to move to an on-site solution. Rising natural gas costs in some regions, increases in gas distribution rates, limited availability of supply, and disruptions in global gas markets have increased the cost of our power solutions for customers and, in certain cases where fuel is unavailable, have resulted in a complete inability to operate the systems. In the U.S., the lack of, or slow development in, pipeline infrastructure has, in the past, impacted the timing of customers being able to take advantage of our power solution opportunities. In certain jurisdictions in the U.S. and Europe, natural gas bans have prevented the use of our power solutions unless alternative fuels are available.

Previous wording

In addition, many of our potential data center and industrial customers are pursuing greenfield opportunities where the development cycle is long and laden with permitting requirements, and the uncertainty of these factors is leading to a more difficult customer decision-making process and longer sales cycles. Data center greenfield projects require significant investments in real estate, facility costs, and technology, among other elements, in addition to the investment in our power solutions, and the timing and sequencing of those investments is largely outside of our control.

Current wording

In addition, many of our potential data center and industrial customers are pursuing greenfield opportunities where the development cycle is long and laden with permitting requirements, and the uncertainty of these factors is leading to a more complex customer decision-making process and longer sales cycles. Data center greenfield projects require significant investments in real estate, facility costs, and technology, among other elements, in addition to the investment in our power solutions, and the timing and sequencing of those investments is largely outside of our control.

Previous wording

Demand for power has continued to significantly outpace available power generation supply from the grid, with the need for power becoming more acute in 2024. The transition towards the electrification of everything, including in a wide range of commercial and consumer products, has strained aging and unreliable power grids across the globe. The expanding use of AI has led to the expansion of existing data centers and plans for new greenfield data centers. The resulting increase in demand for power from Al-related companies has further reduced available supply from the grid and has led non-AI-related companies to consider on-site distributed power, including Bloom Energy Servers, to meet their power needs.

Current wording

Demand for power has continued to significantly outpace available grid-based generation supply, with the need for additional power becoming increasingly acute in recent periods. Key factors driving the increasing demand include the transition towards the electrification of transportation and buildings, the rapid adoption of AI that has led to the expansion of existing data centers and plans for new greenfield data centers, and Federal incentives for domestic manufacturing, including semiconductor and battery production. These factors, along with economic growth, have placed significant stress on grid supply and have led companies to consider on-site distributed power, including Bloom Energy Server systems, to meet their power needs.

Previous wording

In part because of the increases in demand for power, time to power has increased for companies seeking to connect new projects to the grid. According to the Lawrence Berkeley National Lab, U.S. interconnection queue delays have experienced significant growth, with a forty percent year over year increase in 2022. The typical project interconnection process for large scale projects grew to five years in 2022 compared to three years in 2015 and two years in 2008. Bloom Energy Servers can be configured as fully-islanded, microgrid solutions that are not interconnected to the grid, which can often provide a customer power in months instead of years. Our fully-islanded microgrid solutions can provide power on-site, without the need for costly transmission and distribution systems required by electrical grids. We are seeing greater interest in fully-islanded microgrid solutions among data center customers because of these interconnection-related delays. If a customer desires back up power or a “grid parallel” solution in combination with the Bloom microgrid, required interconnection studies and lengthy interconnection queues remain, eroding the time to power value proposition.

Current wording

The increase in power demand, has, in part, elevated the importance of time to power. According to a study published in April 2024 by the Lawrence Berkeley National Laboratory, the time from initiating a request for interconnection to the grid to the start of commercial operations has more than doubled from less than two years during the period from 2000-2007, to more than four years from 2018-2023. Bloom Energy Server systems can be configured as on-site fully-islanded, microgrid solutions that are not interconnected to the grid, which often can provide a customer power in months instead of years. Many utilities have informed data center and manufacturing customers that they cannot interconnect for a period of years because the utility has no power available to serve a customer’s needs, thus making the Bloom Energy Server system an attractive alternative. In addition, our fully-islanded microgrid solutions can provide power on-site, without the need for costly transmission and distribution system upgrades that often are required before a customer can interconnect to the electrical grid. We are seeing greater interest in fully-islanded, microgrid solutions among data center customers because of these interconnection-related delays. If a customer desires back up power or a “grid parallel” solution in combination with the Bloom Energy Server system, required interconnection studies and lengthy interconnection queues may remain, eroding the time to power value proposition.

Previous wording

In 2023, the South Korean government moved to a new, government-run bidding process for fuel cell purchases, which has impacted and may continue to impact demand for our power solutions. In the U.S., absent Congressional action, the Investment Tax Credit (“ITC”) for fuel cells running on a non-zero carbon fuel is currently scheduled to expire at the end of fiscal year 2024. To date, Congress has not renewed the ITC. Because 2024 is a presidential election year in the U.S., it is possible Congress may be unable to achieve an extension of the ITC for commercial fuel cell purchasers this year. If the ITC is not extended for fuel cells, U.S. bookings, revenue and gross margins could be materially impacted. In 2024, the expiration of the ITC could increase demand for ITC-compliant sales of our Energy Servers due to customer desire to secure ITC for their projects through safe harboring. However, if our customers or project-level investors prove reluctant to make sufficient cash outlays in 2024 for purchases of Energy Servers for future projects, our sales could be negatively impacted. The Inflation Reduction Act of 2022 (“IRA”) established a new clean electricity production credit and a clean electricity investment credit. There is considerable uncertainty around whether, or the conditions under which, such credits will be available for transactions involving our Energy Servers. In addition, delays in adoption of Renewable Fuel Standard regulations in the U.S. for the use of biogas to generate electricity for electric vehicles, along with minimal governmental focus on utilization of biogas outside of use by methane-fueled vehicles, have created uncertainty in prospects for broader biogas availability for industrial uses, including our power solutions. In addition, in most jurisdictions, air permits and various land use permits are required for installation of our solutions over a certain amount of megawatts, and generally the length of time to obtain these permits increased, while the level of certainty of issuance has decreased and if issued, the cost of compliance requirements can be cost prohibitive. We have experienced a reluctance in certain states to issue permits for gas generation equipment. Even if issued, states may require a blend of costly renewable fuels or other measures to advance climate goals. In Ireland, which is a large data center market, a directive from the Minister of the Department of the Environment, Climate and Communications to restrict grid connections to data centers and other large power users, along with a halt in high-pressure gas installations has delayed our selling activities.

Current wording

In addition, delays in adoption of Renewable Fuel Standard regulations in the U.S. for the use of biogas to generate electricity for electric vehicles, along with limited governmental focus on the utilization of biogas outside of use by methane- fueled vehicles, have created uncertainty around the broader availability of biogas for industrial uses, including our power solutions. Furthermore, in most jurisdictions, air permits and various land use permits are required for installation of our solutions above certain megawatt thresholds. The time required to obtain these permits has generally increased, while the certainty of approval has decreased, and when issued, the cost of meeting compliance requirements can be cost prohibitive. We have experienced a reluctance in certain states to issue permits for gas generation equipment. Even if issued, states may require a blend of costly renewable fuels or other measures to advance climate goals.

Previous wording

The imbalance between power demand and supply has contributed to utilities seeking alternative sources of power to supply to their end customers. Utilities have been unable to meet this demand through the deployment of renewable sources of energy such as solar and wind power. Bloom Energy Servers can be installed at the utility’s point of distribution or directly on the customer’s site. The energy produced by Bloom Energy Servers can be utilized by utilities to provide power to a specific customer or customers or may be used by customers generally. Increasing the supply of available power can allow utilities to encourage end customers to remain in their current locations rather than relocating to areas where power is more available.

Current wording

The imbalance between power demand and supply has contributed to utilities seeking alternative sources of power to supply to their end customers. Utilities have been unable to meet this demand through the deployment of renewable sources of energy such as solar and wind power. Bloom Energy Server systems can be installed at the utility’s point of distribution or directly on the customer’s site. The energy produced by our systems can be utilized by utilities to provide power to a specific customer or customers or may be used by customers generally. As demand for power continues to grow, and time to power becomes increasingly important, utilities are exploring alternative means of producing and supplying energy to their end customers, including using our Energy Server systems. In 2024, we entered into multiple agreements with utilities, including a landmark 1 GW supply agreement with a customer that included a 100 MW order in 2024. We expect more utility customers in the future to supplement their power generation with the Bloom Energy Server system. Increasing the supply of available power can allow utilities to encourage end customers to remain in their current locations rather than relocating to areas where power is more available. In addition, co-locating our Energy Server systems on-site with large loads, can enable a utility to provide power to a large energy user without impacting its rate base and providing the onsite power as an islanded microgrid can avoid interconnection studies and wait times.

Previous wording

The significant governmental interest, investment, and stimulation of clean hydrogen in the U.S., Europe and in many other regions across the globe have not yet had significant impacts on the supply of hydrogen. To date, while the number of proposed hydrogen production projects has grown rapidly, only a small fraction has reached the final investment decision stage, and an even smaller fraction have been deployed. In addition, the infrastructure needed to transport hydrogen, whether through pipelines or maritime or land-based tankers, is currently only sufficient for existing uses, and has not begun to be significantly extended for anticipated future uses, with hydrogen blending and other approaches remaining at pilot stages. It remains unclear whether regulators in some jurisdictions will allow hydrogen to be introduced into gas distribution systems, which could limit our customers’ ability to transport hydrogen from the point of production to the point of consumption. Additionally, U.S. Treasury Department rules surrounding the use of market-based renewable energy could make it more difficult for hydrogen projects to acquire energy needed to access the Production Tax Credit.

Current wording

The interest, investment, and stimulation of clean hydrogen in the U.S., Europe and in many other regions across the globe have not yet had significant impacts on the supply of hydrogen. To date, while the number of proposed hydrogen production projects has grown rapidly, only a small fraction has reached the final investment decision stage, and an even smaller fraction has been deployed. In addition, the infrastructure needed to transport hydrogen, whether through pipelines or maritime or land-based tankers, is currently only sufficient for existing uses, and has not begun to be significantly extended for anticipated future uses, with hydrogen blending and other approaches remaining at pilot stages. It remains unclear whether regulators in some jurisdictions will allow hydrogen to be introduced into gas distribution systems, which could limit our customers’ ability to transport hydrogen from the point of production to the point of consumption. Additionally, while U.S. Treasury Department rules regarding the use of market-based renewable energy have been clarified, hurdles remain that could hinder the large-scale development of hydrogen projects. Uncertainty also exists as potential changes may be pursued by the new U.S. federal administration and Congress.

Previous wording

Many of the factors discussed above have lengthened the selling cycles for our products and we have experienced delays in our anticipated bookings as a result. Our revenue, margins, and cash flow in any given year are largely dependent on bookings during the prior year. Historically, the majority of our bookings have occurred in the second half of the year, with a significant portion occurring in the fourth quarter. That trend did not continue to the same degree in 2023. If a substantial portion of our anticipated bookings continue to be delayed, our future revenue, margins and cash flow could be materially adversely impacted.

Current wording

Many of the factors discussed above have lengthened the selling cycles for our products and we have experienced delays in our anticipated bookings as a result. Our revenue, margins, and cash flow in any given year depend on bookings from prior years as well as current-year bookings. Historically, the majority of our bookings have occurred in the second half of the year, with a significant portion in the fourth quarter, and we expect this trend to continue in 2025. However, if a substantial portion of our anticipated bookings is delayed beyond our expectations, our revenue, margins, and cash flow for the relevant period could be materially adversely impacted.

Previous wording

We continue to see effects from global supply chain tightness due to the current inflationary environment, war in Ukraine, and trade tensions between the U.S. and China. We are not aware of, and do not expect any significant direct impact on our business or supply chain from the armed conflict in Israel and neighboring areas. While we have not experienced any significant component shortages to date, we are facing pressures from inflation. These dynamics could worsen as a result of continued geopolitical instability or escalation of current military conflicts or trade tensions. We are also reliant on third party providers of storage equipment, infrastructure equipment and pipelines, and other materials and technologies that work with our products to provide an energy solution for customers. In the event we are unable to mitigate the impacts of delays and/or price increases in raw materials and components, it could delay the manufacturing and installation of, and increase the costs of, our products, which would adversely impact our cash flows and results of operations, including our revenues and gross margin. We expect these supply chain challenges to continue in the short term.

Current wording

We continue to see effects from global supply chain tightness due to the current inflationary environment, war in Ukraine, and trade tensions between the U.S. and China. We are not aware of, and do not expect any significant direct impact on our business or supply chain from the armed conflict in Israel and neighboring areas. While we have not experienced any significant component shortages to date, we are facing pressures from inflation. These dynamics could worsen as a result of continued geopolitical instability or escalation of current military conflicts or trade tensions. The new U.S. federal administration has implemented new tariffs on all trade partners. Our supply chain is not dependent on China, but significant tariffs on imports from other countries where we do source materials could impact our costs. At the tariffs present levels of

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Installations and Maintenance of Energy Servers

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Installations and Maintenance of our Products

Previous wording

In the third quarter of 2024, our installation projects experienced some delays relating to, among other things, permitting, utility delays, and access to customer facilities. However, these delays did not significantly impact our revenue. If we are delayed in or unable to perform maintenance, our previously installed Energy Servers would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. As we seek larger projects with sophisticated counterparties, customers have sought to impose more stringent performance requirements on us. If we experience a significant increase of product failure in the future, our service expense may increase and we may fail to achieve the performance commitments to our customers, which could result in warranty and/or guaranty claims. Additionally, product failure and service costs may increase as we initially deploy new applications for our Energy Server, including Be Flexible load following, CCUS, and CHP. Further, due to the nature of our Energy Servers, if we are unable to replace worn parts in accordance with our standard maintenance schedule, we may incur higher costs in the future. During the nine months ended September 30, 2024, we experienced no significant delays in servicing our Energy Servers.

Current wording

In previous years, our installation projects experienced delays related to, among other factors, permitting, utility coordination, and access to customer facilities. We have not experienced any delays in 2025 in either our installation or maintenance activities. If we are delayed in or unable to perform maintenance, our previously installed products would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. If we experience a significant increase of product failure in the future, our service expense may increase and we may fail to achieve the performance commitments to our customers, which could result in warranty and/or guaranty claims. Additionally, product failure and service costs may increase as we initially deploy new applications for our Energy Server system, including Be Flexible TM load following, CCUS, and CHP.

Previous wording

For information on the strategic investment with SK ecoplant Co., Ltd. (“SK ecoplant”, formerly known as SK Engineering & Construction Co., Ltd.), a subsidiary of the SK Group, see Part II, Item 8, Note 1 —Nature of Business, Liquidity and Basis of Presentation, Liquidity section and Note 17 —SK ecoplant Strategic Investmentin our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

For information on the strategic investment with SK ecoplant, see Part II, Item 8, Note 17 —SK ecoplant Strategic Investmentin our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

In April 2024, we released our 2023 Sustainability Report, Transforming Energy for the Digital Age (the “Sustainability Report”), using generally accepted sustainability frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Sustainability Report also utilized certain Global Reporting Initiative standards and was mapped against the United Nations Sustainable Development Goals. We plan to issue a sustainability report on an annual basis.

Current wording

In April 2025, we released our 2025 Impact Report, previously referred to as our Sustainability Report, Transforming Energy for the Digital Age (the “Impact Report”), using generally accepted sustainability frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Impact Report also utilized certain Global Reporting Initiative Standards and was mapped against the United Nations Sustainable Development Goals. We plan to issue an impact report on an annual basis.

Previous wording

The Sustainability Report can be found on our website athttps://www.bloomenergy.com/sustainibility. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Current wording

The Impact Report can be found on our website athttps://www.bloomenergy.com/sustainibility. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Previous wording

For information on the IRA, which was signed into law on August 16, 2022, and its impact on our business, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Inflation Reduction Act of 2022 section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

For information on the IRA, which was signed into law on August 16, 2022, and its impact on our business, see Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Inflation Reduction Act of 2022 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

As of September 30, 2024, we had cash and cash equivalents of $495.7 million. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $466.7 million. We seek to maintain these balances with high credit quality counterparties, regularly monitor the amount of our credit exposure to any one issuer and diversify our investments in order to minimize our exposure.

Current wording

As of March 31, 2025, and December 31, 2024, we had unrestricted cash and cash equivalents of $794.8 million and $802.9 million, respectively. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $759.5 million and $749.4 million as of March 31, 2025, and December 31, 2024, respectively. We seek to maintain these balances with high-credit-quality counterparties, regularly monitor our credit exposure to any single issuer, and diversify our investments to minimize risk.

Previous wording

As of September 30, 2024, we had $1,122.9 million of recourse debt, $4.6 million of non-recourse debt, and $8.8 million of other long-term liabilities. As of September 30, 2024, $114.1 million and $1,013.3 million of our debt was classified as short-term and long-term, respectively. For a complete description of our outstanding debt, please see Part I, Item 1, Note 7 —Outstanding Loans and Security Agreements.

Current wording

As of March 31, 2025, we had $1,126.7 million of recourse debt, $4.1 million of non-recourse debt, and $9.4 million of other long-term liabilities. As of March 31, 2025, $114.6 million and $1,016.2 million of our debt were classified as short-term and long-term, respectively. As of December 31, 2024, we had $1,124.7 million of recourse debt, $4.1 million of non-recourse debt, and $9.2 million of other long-term liabilities. As of December 31, 2024, $114.4 million and $1,014.4 million of our debt were classified as short-term and long-term, respectively. For a complete description of our outstanding debt, please see Part II, Item 8, Note 17 — Outstanding Loans and Security Agreements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

The combination of our cash and cash equivalents and cash flow to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or are not received in a timely manner to satisfy our near-term or future cash needs, we may require additional capital from equity or debt financings to fund our operations, our manufacturing capacity, product development, and market expansion requirements and to timely respond to competitive market pressures or strategic opportunities, among other things. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. During the nine months ended September 30, 2024, we factored $184.2 million of accounts receivable. However, we may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. Although currently we do not have any floating-rate notes on our balance sheet, rising interest rates may increase our overall cost of capital. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock.

Current wording

The combination of our cash and cash equivalents and cash flow expected to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or not received in a timely manner to meet our near-term or future liquidity needs, we may require additional equity or debt financing to fund our operations, manufacturing capacity, product development, and market expansion initiatives, as well as to respond to competitive pressures or strategic opportunities. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. During the three months ended March 31, 2024, we factored $80.7 million of accounts receivable, and there were no factoring arrangements during the three months ended March 31, 2025. However, we may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may limit on our financial and operational flexibility. Although we currently do not have any floating-rate notes on our balance sheet, our overall cost of capital may increase if interest rates rise and we refinance our fixed-rate convertible notes. If we raise additional funds through the issuance of equity or equity-linked securities, our existing stockholders could experience dilution in their ownership percentage, and any new securities may have rights, preferences, and privileges senior to those of our common stock.

Previous wording

Our future capital requirements depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds and the need for additional working capital, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our products, our ability to secure financing for customer use of our products, the timing of installations and of inventory build in anticipation of future sales and installations, and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.

Current wording

Our future capital requirements depend on a variety of factors, including our rate of revenue growth; the timing and extent of spending on research and development and other business initiatives; the pace and volume of system builds; the need for additional working capital; the expansion of our sales and marketing activities in both domestic and international markets; market acceptance of our products; our ability to secure financing for customer use of our products; the timing of installations and related inventory build in anticipation of future sales; and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.

Previous wording

Our operating activities consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash used in operating activities for the nine months ended September 30, 2024 related primarily to the changes in our working capital of $398.5 million predominantly due to (1) an increase in accounts receivable and contract assets by $250.3 million and $79.7 million, respectively, triggered by the timing of revenue transactions, corresponding collections and billing milestones, (2) an increase in inventory levels by $83.2 million to support future demand, and (3) the timing of payments to vendors.

Current wording

Our operating activities consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash used in operating activities for the three months ended March 31, 2025, related primarily to the changes in our working capital of $137.9 million predominantly due to (1) a decrease in deferred revenue and customer deposits by $74.9 million, driven by timing of acceptances, (2) an increase in inventory levels by $65.6 million to support future demand, (3) an increase in deferred cost of revenue of $7.5 million, and (4) an increase in prepaid expenses and other current assets of $5.1 million, partially offset by the timing of payments to vendors.

Previous wording

Net cash used in operating activities during the nine months ended September 30, 2024, was $392.2 million, an improvement of $102.1 million compared to the prior year period. The change in cash used in operating activities during the nine months ended September 30, 2024, as compared to the prior year period, was primarily driven by an increase of $166.5 million attributable to accounts receivable, partially offset by decreases of $123.1 million, $85.8 million, and $31.5 million attributable to inventories, deferred revenue and customer deposits, and accrued expenses and other current liabilities, respectively.

Current wording

Net cash used in operating activities during the three months ended March 31, 2025, was $110.7 million, an improvement of $36.6 million compared to the prior year period. The change in cash used in operating activities during the three months ended March 31, 2025, as compared to the prior year period, was primarily driven by an increase of $40.6 million and $8.6 million attributable to inventories and prepaid expenses and other current assets, respectively, a $57.3 million decrease attributable to deferred revenue and customer deposits, partially offset by an increase of $86.0 million attributable to accounts payable.

Previous wording

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity. Cash used in investing activities during the nine months ended September 30, 2024, was $47.7 million, a decrease of $19.8 million compared to the prior year period, and was primarily due to the decrease in expenditures on tenant improvements for a newly leased engineering and manufacturing building in Fremont, California, which opened in July 2022. We expect to continue to make capital investments over the next few quarters to expand production capacity at our new manufacturing facility in Fremont, California, which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.

Current wording

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity. Cash used in investing activities during the three months ended March 31, 2025, was $14.2 million, an improvement of $7.2 million, as compared to the prior year period. The improvement was primarily due to the decrease in expenditures on tenant improvements for a leased engineering and manufacturing facility in Fremont, California, which opened in July 2022. We expect to continue to make capital investments over the next few quarters to expand production capacity at our manufacturing facility in Fremont, California, which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow expected to be generated from operations. We may also evaluate and arrange equipment lease financing to fund this capital expenditures.

Previous wording

Our financing activities consist of borrowings and repayments of debt, proceeds and repayments of financing obligations, distributions paid to noncontrolling interests, contributions from noncontrolling interests, payments of dividends, proceeds from the issuances of our common stock, and other financing activities. Net cash provided by financing activities during the nine months ended September 30, 2024 was $244.4 million, a decrease of $437.8 million compared to the prior year period, predominantly due to (1) a decrease in the proceeds from issuance of redeemable convertible preferred stock of $310.6 million, net of paid issuance costs of $0.4 million, as a result of the SK ecoplant Second Tranche Closing in the nine months ended September 30, 2023 (please refer to Part II, Item 8, Note 17 —SK ecoplant Strategic Investmentin our Annual Report on Form 10-K for the fiscal year ended December 31, 2023), and (2) a decrease in proceeds from the issuance of debt by $231.5 million. The decrease was partially offset by (1) the purchase in fiscal year 2023 of the capped call of $54.5 million related to the 3% Green Notes due June 2028 issued in the second quarter of fiscal year 2023, and (2) a decrease in the repayment of debt by $50.4 million.

Current wording

Our financing activities consist of proceeds from and repayments of financing obligations, contributions from noncontrolling interests, proceeds from issuance of our common stock, and other cash flows from financing activities. Net cash provided by financing activities during the three months ended March 31, 2025, was $5.1 million, a decrease of $2.0 million, as compared to the prior year period, predominantly due to (1) a decrease in contributions from noncontrolling interest by $4.0 million, and (2) a decrease in proceeds from financing obligations by $1.3 million, partially offset by (1) a decrease in repayment of financing obligations by $2.3 million, and (2) an increase in proceeds from issuance of common stock by $0.8 million.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024, consisted of (1) the proceeds from issuance of the 3% Green Notes due June 2029 of $402.5 million, (2) the proceeds from issuance of common stock of $11.1 million, (3) the contribution from a noncontrolling interest of $4.0 million, (4) the proceeds from financing obligations of $1.8 million, (5) the partial repurchase of the 2.5% Green Notes of $141.0 million, (6) the repayment of financing obligations of $19.8 million, (7) the repayment of debt issuance costs of $12.8 million pertaining to the 3% Green Notes due June 2029, and (8) a dividend payment of $1.5 million. Our working capital was strengthened by the issuance of the 3% Green Notes due June 2029 and 3% Green Notes due June 2028 in May 2024 and May 2023, respectively, as well as financing activities with SK ecoplant in the first quarter of 2023, but we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part I, Item 1, Note 7 —Outstanding Loans and Security Agreements of this Quarterly Report on Form 10-Q and Part I, Item 1A, Risk Factors— Risks Related to Our Liquidity— Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for more information regarding the terms of and risks associated with our debt.

Current wording

We believe we have sufficient capital to operate our business over the next 12 months. Our working capital was strengthened with the supplemented liquidity through issuing the 3% Green Notes due June 2029 and the 3% Green Notes due June 2028 in the second quarter of 2024 and 2023, respectively, as well as financing activities with SK ecoplant in the first quarter of 2023. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part II, Item 8, Note 7 —Outstanding Loans and Security Agreements, and Part I, Item 1A, Outstanding Loans and Security Agreements of this Quarterly Report on Form 10-Q and Part I, Item 1A, Risk Factors— Risks Related to Our Liquidity— Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for more information regarding the terms of and risks associated with our debt.

Previous wording

For information about our purchase and financing options, see Part II, Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations, Purchase and Financing Options section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

For information about our purchase and financing options, see Part II, Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations, section Purchase and Financing Optionsin our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

Our customers have several purchase alternatives for our Energy Servers. The portion of total revenue attributable to each purchase option in the three and nine months ended September 30, 2024, and 2023 was as follows:

Current wording

Our customers have several purchase alternatives for our Energy Server systems. The portion of total revenue attributable to each purchase option in the three months ended March 31, 2025, and 2024, was as follows:

Previous wording

As of September 30, 2024, we had incurred no liabilities due to failure to repair or replace Energy Servers pursuant to any performance warranties made under operations and maintenance agreements (“O&M Agreements”).

Current wording

As of March 31, 2025, and December 31, 2024, we had incurred no liabilities due to failure to repair or replace the Energy Server systems pursuant to any performance warranties made under the O&M Agreements (“O&M Agreements”).

Previous wording

For O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $583.4 million (including $456.1 million related to portfolio financing entities and $127.3 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $491.1 million as of September 30, 2024. For the nine months ended September 30, 2024, we made performance guarantee payments of $18.8 million.

Current wording

For the O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $587.5 million (including $460.3 million related to portfolio financing entities and $127.2 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $479.8 million as of March 31, 2025. For the three months ended March 31, 2025, and 2024, we made performance guarantee payments of $11.6 million and $15.1 million, respectively.

Previous wording

There were no significant changes in our international channel partners during the nine months ended September 30, 2024. For information on international channel partners, see Part II, Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations, International Channel Partners section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Current wording

There were no significant changes in our international channel partners during the three months ended March 31, 2025. For information on international channel partners, see Part II, Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations, section International Channel Partnersin our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Previous wording

A discussion regarding the comparison of our financial condition and results of operations for the three and nine months ended September 30, 2024, and 2023 is presented below.

Current wording

A discussion regarding the comparison of our financial condition and results of operations for the three months ended March 31, 2025, and 2024 is presented below.

Previous wording

Total revenue decreased by $69.9 million, or 17.5%, for the three months ended September 30, 2024, as compared to the prior year period. This decrease was driven by a $71.2 million decrease in product revenue, and a $12.0 million decrease in electricity revenue, partially offset by a $10.1 million increase in installation revenue, and a $3.2 million increase in service revenue.

Current wording

Total revenue increased by $90.7 million, or 38.6%, for the three months ended March 31, 2025, as compared to the prior year period. This increase was driven by a $58.5 million increase in product revenue, a $22.2 million increase in installation revenue, and a $12.9 million increase in electricity revenue, partially offset by a $2.9 million decrease in service revenue.

Previous wording

Cost of installation revenue increased by $9.8 million, or 37.8%, and by $17.5 million, or 22.4%, for the three and nine months ended September 30, 2024, respectively, as compared to the prior year period. The increase for each period was primarily driven by the timing of achieving key project milestones on sites requiring installations by us in the three and nine months ended September 30, 2024. Each customer site is unique and installation costs can vary due to a number of factors, including site complexity, size, and location of gas, among other factors.

Current wording

Cost of installation revenue increased by $18.0 million, or 117.0%, for the three months ended March 31, 2025, as compared to the prior year period. The increase was primarily driven by the timing of achieving key project milestones on sites requiring installations by us in the first quarter of fiscal year 2025.

Previous wording

Cost of service revenue decreased by $6.0 million, or 10.5%, for the three months ended September 30, 2024, as compared to the prior year period. This decrease was primarily due to (1) a decrease in the deployment of field replacement units, contributing a decrease of $4.8 million, (2) repair and overhaul cost reductions of $4.0 million, and (3) our cost reduction efforts to proactively manage fleet optimizations. The decrease was partially offset by an increase in maintenance material and labor and overhead costs of $3.3 million.

Current wording

Cost of service revenue decreased by $3.6 million, or 6.5%, for the three months ended March 31, 2025, as compared to the prior year period. This decrease was primarily due to (1) a decrease in the deployment of field replacement units, contributing to a decrease of $6.4 million, (2) a $3.3 million decrease in repair and overhaul expenses, partially as a result of repowering our PPA and Managed Services portfolios, which resulted in a relatively newer fleet that required less service, (3) a $1.2 million decrease in rework for production costs, and (4) our cost reduction efforts to proactively manage fleet optimizations. The decrease was partially offset by an increase in maintenance material of $1.4 million.

Previous wording

Total gross profit (loss) improved by $83.9 million in the three months ended September 30, 2024, as compared to the prior year period. This change was predominantly driven by (1) a $117.9 million improvement of electricity gross profit (loss), primarily due to a $123.7 million impairment charge that resulted from the PPA V repowering, which commenced in the third quarter of fiscal year 2023, and (2) a $9.2 million improvement in service gross loss, due to our efforts to proactively manage fleet optimizations, and our ongoing efforts to reduce product costs. Total gross profit (loss) improvement was partially offset by a $43.5 million decrease in product gross profit, predominantly driven by lower pricing and volume attributable to the PPA V repowering, which commenced in the third quarter of fiscal year 2023.

Current wording

Gross profit increased by $50.6 million in the three months ended March 31, 2025, as compared to the prior year period. This increase was predominantly driven by (1) a $34.7 million increase in product gross profit, primarily driven by higher demand for our products, leading to a 38.1% increase in product revenue and only a 20.6% increase in respective cost of revenue, (2) a $11.0 million increase of electricity gross profit, (3) a $4.2 million improvement of installation gross margin, and (4) a $0.7 million improvement of service gross margin, due to our efforts to proactively manage fleet optimizations, and our ongoing efforts to reduce product costs.

Previous wording

Installation gross loss improved by $0.4 million and $2.0 million in the three and nine months ended September 30, 2024, respectively, as compared to the prior year period. The change for each period was primarily driven by (1) the timing of achieving key project milestones on sites requiring installations by us in the three and nine months ended September 30, 2024, and (2) other site related factors such as site complexity, size, local ordinance requirements, and location of the utility interconnect.

Current wording

Installation gross margin improved by $4.2 million in the three months ended March 31, 2025, as compared to the prior year period. The change for the period was primarily driven by (1) the timing of achieving key project milestones on sites requiring installations by us in the first quarter of fiscal year 2025, and (2) other site related factors such as site complexity, size, local ordinance requirements, and location of the utility interconnect.

Previous wording

Service gross loss improved by $9.2 million in the three months ended September 30, 2024, as compared to the prior year period. This was primarily due to (1) a decrease in the deployment of field replacement units, contributing a decrease of $4.8 million, (2) repair and overhaul cost reductions of $4.0 million, (3) a decrease of $2.3 million in product performance guarantees that resulted from improved fleet performance, (4) a $1.4 million increase in revenue from maintenance contracts associated with our fleet of Energy Servers, and (5) our cost reduction efforts to proactively manage fleet optimizations. The improvement was partially offset by an increase in maintenance material and labor and overhead costs of $3.3 million.

Current wording

Service gross margin improved by $0.7 million in the three months ended March 31, 2025, as compared to the prior year period. This was primarily driven by (1) a decrease in the deployment of field replacement units, contributing an improvement of $6.4 million, (2) repair and overhaul cost reductions of $3.3 million, and (3) our cost reduction efforts to proactively manage fleet optimizations. The improvement was partially offset by (1) a $2.2 million decrease in revenue from maintenance contracts associated with our fleet of Energy Server systems, (2) an increase of $0.7 million in product performance guarantees as a result of Energy Server systems fleet depreciation, and (3) the timing of revenue recognition on certain contracts.