Bloom Energy Corporation (NYSE: BE) today announced financial results for its first quarter ended March 31, 2022.

First Quarter Highlights

  • Record first quarter revenue of $201.0 million in 2022 on 375 acceptances.
  • $493.9 million in cash to fund our near-term investments.
  • On-track to add a gigawatt of capacity by 2023.
  • Reaffirming our 2022 financial outlook.
  • Hosting Investor Conference in our new manufacturing facility in Fremont, CA on May 25th.

Commenting on first quarter results, KR Sridhar, founder, chairman, and CEO of Bloom Energy, said, “We are very pleased with our operating and financial performance in the first quarter. We have done exactly what we set out to do. In many ways, Bloom Energy’s long-term view of the macro factors that would drive growth for our business are becoming reality. We have an important ability through our product and commercialization strategy to be a meaningful contributor to the energy sector's efforts to support decarbonization. This is creating significant demand and reaffirming our strategy to build a flexible energy platform to decarbonize major segments of the global economy, and every single one of Bloom Energy’s products are effective tools in the global decarbonization effort. This has made Bloom Energy’s solutions not simply an option, but increasingly a necessity. Our focus now is very much on execution.”

Greg Cameron, executive vice president and CFO of Bloom Energy, added, “We’re off to a great start to the year - we delivered record Q1 revenue and our commercial pipeline is strong, in line with our expectations. We remain confident in our business and are reaffirming our 2022 financial guidance. We look forward to hosting our Investor Conference on May 25th in Fremont, CA.”

Summary of Key Financial Metrics

Preliminary Summary GAAP Profit and Loss Statements

 

($000)

Q122

Q421

Q121

Revenue

201,039

342,471

194,007

Cost of Revenue

173,102

273,768

139,356

Gross Profit

27,937

68,703

54,651

Gross Margin

13.9%

20.1%

28.2%

Operating Expenses

93,596

82,208

69,048

Operating Loss

(65,659)

(13,505)

(14,397)

Operating Margin

(32.7%)

(3.9%)

(7.4%)

Non-operating Expenses1

12,700

19,818

10,492

Net Loss

(78,359)

(33,323)

(24,889)

EPS

$ (0.44)

$ (0.19)

$ (0.15)

  1. Non-operating expenses and tax provision and non-controlling interest

Preliminary Summary Non-GAAP Financial Information1

 

($000)

Q122

Q421

Q121

Revenue

201,039

342,471

194,007

Cost of Revenue

169,242

269,706

136,357

Gross Profit

31,797

72,765

57,650

Gross Margin

15.8%

21.2%

29.7%

Operating Expenses

71,148

67,448

54,837

Operating Income (loss)

(39,351)

5,317

2,813

Operating Margin

(19.6%)

1.6%

1.4%

Adjusted EBITDA

(24,967)

18,692

16,062

EPS

$ (0.32)

$ (0.05)

$ (0.07)

  1. A detailed reconciliation of GAAP to Non-GAAP financial measures is provided at the end of this press release

Outlook

  • Bloom reaffirms outlook for the full-year 2022:

• Revenue:

$1.1 - $1.15 billion

• Product & Service Revenue:

$1 billion

• Non-GAAP Gross Margin*:

~24%

• Non-GAAP Operating Margin*:

~1%

• Cash Flow from Operations:

Positive

*GAAP to non-GAAP reconciliation in appendix.

Acceptances

We use acceptances as a key operating metric to measure the volume of our completed Energy Server installation activity from period to period. Acceptance typically occurs upon transfer of control to our customers, which depending on the contract terms is when the system is shipped and delivered to our customers, when the system is shipped and delivered and is physically ready for startup and commissioning, or when the system is shipped and delivered and is turned on and producing power.

Conference Call Details

Bloom will host a conference call today, May 5, 2022, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its financial results. To participate in the live call, analysts and investors may call +1 (844) 200-6205 and enter the passcode: 708677. Those calling from outside the United States may dial +1 (833) 950-0062 and enter the same passcode: 708677. A simultaneous live webcast will also be available under the Investor Relations section on our website at https://investor.bloomenergy.com/. Following the webcast, an archived version will be available on Bloom’s website for one year. A telephonic replay of the conference call will be available for one week following the call, by dialing +1 (866) 813-9403 or + 1 (226) 828-7578 entering passcode 006370.

Investor Conference Details

Bloom Energy’s management team will be hosting an Investor Conference at our new manufacturing plant in Fremont, California on May 25, 2022. The live event will begin at 9:00 a.m. Pacific Time (PT) / 12:00 p.m. Eastern Time (ET) with a technology showcase featuring Bloom’s power generation, hydrogen production, and marine decarbonization solutions. The management presentations will begin at 9:30 a.m. Pacific Time (PT) / 12:30 p.m. Eastern Time (ET), when we will share our vision of a decarbonized energy future and our plans to execute on an aggressive multiyear growth strategy. This event will also be webcast live and archived on our investor website. Additional details are available at https://investor.bloomenergy.com/ or at https://bloomenergyinvestorconference.com.

Use of Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures as defined by the rules and regulations of the Securities and Exchange Commission (SEC). These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Bloom urges you to review the reconciliations of its non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures set forth in this press release, and not to rely on any single financial measure to evaluate our business. With respect to Bloom’s expectations regarding its 2022 Outlook, Bloom is not able to provide a quantitative reconciliation of non-GAAP gross margin and non-GAAP operating margin measures to the corresponding GAAP measures without unreasonable efforts.

About Bloom Energy

Bloom Energy empowers businesses and communities to responsibly take charge of their energy. The company’s leading solid oxide platform for distributed generation of electricity and hydrogen is changing the future of energy. Fortune 100 companies around the world turn to Bloom Energy as a trusted partner to deliver lower carbon energy today and a net-zero future. For more information, visit www.bloomenergy.com.

Forward-Looking Statements

This press release contains certain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will” and “would” or the negative of these words or similar terms or expressions that concern Bloom’s expectations, strategy, priorities, plans or intentions. These forward-looking statements include, but are not limited to, Bloom’s expectations regarding revenue growth, margin expansion and its innovative solutions; Bloom’s expectations regarding its growth plans, Bloom’s financial outlook for 2022 and Bloom’s plans to host an investor conference and related programming. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors including, but not limited to, Bloom’s limited operating history; the emerging nature of the distributed generation market and rapidly evolving market trends; the significant losses Bloom has incurred in the past; the significant upfront costs of Bloom’s Energy Servers and Bloom’s ability to secure financing for its products; Bloom’s ability to drive cost reductions and to successfully mitigate against potential price increases; Bloom’s ability to service its existing debt obligations; Bloom’s ability to be successful in new markets; the ability of the Bloom Energy Server to operate on the fuel source a customer will want; the success of the strategic partnership with SK ecoplant in the United States and international markets; timing and development of an ecosystem for the hydrogen market, including in the South Korean market; continued incentives in the South Korean market; the timing and pace of adoption of hydrogen for stationary power; the risk of manufacturing defects; the accuracy of Bloom’s estimates regarding the useful life of its Energy Servers; delays in the development and introduction of new products or updates to existing products; Bloom’s ability to secure partners in order to commercialize its electrolyzer and carbon capture products; the impact of the COVID-19 pandemic on the global economy and its potential impact on Bloom’s business; the availability of rebates, tax credits and other tax benefits; changes in the regulatory landscape; Bloom’s reliance on tax equity financing arrangements; Bloom’s reliance upon a limited number of customers; Bloom’s lengthy sales and installation cycle, construction, utility interconnection and other delays and cost overruns related to the installation of its Energy Servers; business and economic conditions and growth trends in commercial and industrial energy markets; global economic conditions and uncertainties in the geopolitical environment; overall electricity generation market; Bloom’s ability to protect its intellectual property; and other risks and uncertainties detailed in Bloom’s SEC filings from time to time. More information on potential factors that may impact Bloom’s business are set forth in Bloom’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the year ended on December 31, 2021 as filed with the SEC on February 25, 2022, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Bloom’s website at www.bloomenergy.com and the SEC’s website at www.sec.gov. Bloom assumes no obligation to, and does not currently intend to, update any such forward-looking statements.

The Investor Relations section of Bloom’s website at investor.bloomenergy.com contains a significant amount of information about Bloom Energy, including financial and other information for investors. Bloom encourages investors to visit this website from time to time, as information is updated and new information is posted.

Condensed Consolidated Balance Sheets (preliminary & unaudited)

(in thousands)

 

 

 

March 31,

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

286,007

 

 

$

396,035

 

Restricted cash

 

 

70,141

 

 

 

92,540

 

Accounts receivable

 

 

110,842

 

 

 

87,789

 

Contract assets

 

 

13,533

 

 

 

25,201

 

Inventories

 

 

183,066

 

 

 

143,370

 

Deferred cost of revenue

 

 

17,143

 

 

 

25,040

 

Customer financing receivable

 

 

5,875

 

 

 

5,784

 

Prepaid expenses and other current assets

 

 

37,000

 

 

 

30,661

 

Total current assets

 

 

723,607

 

 

 

806,420

 

Property, plant and equipment, net

 

 

608,912

 

 

 

604,106

 

Operating lease right-of-use assets

 

 

98,119

 

 

 

106,660

 

Customer financing receivable, non-current

 

 

38,005

 

 

 

39,484

 

Restricted cash, non-current

 

 

137,748

 

 

 

126,539

 

Deferred cost of revenue, non-current

 

 

3,212

 

 

 

1,289

 

Goodwill

 

 

1,957

 

 

 

1,957

 

Other long-term assets

 

 

38,412

 

 

 

39,116

 

Total assets

 

$

1,649,972

 

 

$

1,725,571

 

Liabilities, Redeemable Convertible Preferred Stock, Redeemable Noncontrolling Interest, Stockholders’ (Deficit) Equity and Noncontrolling Interest

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

89,012

 

 

$

72,967

 

Accrued warranty

 

 

14,671

 

 

 

11,746

 

Accrued expenses and other current liabilities

 

 

92,170

 

 

 

114,138

 

Deferred revenue and customer deposits

 

 

94,044

 

 

 

89,975

 

Operating lease liabilities

 

 

11,598

 

 

 

13,101

 

Financing obligations

 

 

15,172

 

 

 

14,721

 

Recourse debt

 

 

12,355

 

 

 

8,348

 

Non-recourse debt

 

 

17,936

 

 

 

17,483

 

Total current liabilities

 

 

346,958

 

 

 

342,479

 

Deferred revenue and customer deposits, non-current

 

 

80,457

 

 

 

90,310

 

Operating lease liabilities, non-current

 

 

105,656

 

 

 

106,187

 

Financing obligations, non-current

 

 

452,229

 

 

 

461,900

 

Recourse debt, non-current

 

 

280,056

 

 

 

283,483

 

Non-recourse debt, non-current

 

 

212,465

 

 

 

217,416

 

Other long-term liabilities

 

 

18,356

 

 

 

16,772

 

Total liabilities

 

 

1,496,177

 

 

 

1,518,547

 

Redeemable convertible preferred stock

 

 

208,551

 

 

 

208,551

 

Redeemable noncontrolling interest

 

 

 

 

 

300

 

Stockholders’equity (deficit):

 

 

 

 

Common stock

 

 

18

 

 

 

18

 

Additional paid-in capital

 

 

3,251,128

 

 

 

3,219,081

 

Accumulated other comprehensive loss

 

 

(503

)

 

 

(350

)

Accumulated deficit

 

 

(3,341,434

)

 

 

(3,263,075

)

Total stockholders’ equity (deficit)

 

 

(90,791

)

 

 

(44,326

)

Noncontrolling interest

 

 

36,035

 

 

 

42,499

 

Total liabilities, redeemable noncontrolling interest, stockholders' (deficit) equity and noncontrolling interest

 

$

1,649,972

 

 

$

1,725,571

 

Condensed Consolidated Statements of Operations (preliminary & unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

 

 

 

 

 

Revenue:

 

 

 

 

Product

 

$

133,547

 

 

$

137,930

 

Installation

 

 

13,553

 

 

 

2,659

 

Service

 

 

35,239

 

 

 

36,417

 

Electricity

 

 

18,700

 

 

 

17,001

 

Total revenue

 

 

201,039

 

 

 

194,007

 

Cost of revenue:

 

 

 

 

Product

 

 

105,742

 

 

 

87,294

 

Installation

 

 

12,773

 

 

 

4,625

 

Service

 

 

41,826

 

 

 

36,118

 

Electricity

 

 

12,761

 

 

 

11,319

 

Total cost of revenue

 

 

173,102

 

 

 

139,356

 

Gross profit

 

 

27,937

 

 

 

54,651

 

Operating expenses:

 

 

 

 

Research and development

 

 

34,526

 

 

 

23,295

 

Sales and marketing

 

 

21,334

 

 

 

19,952

 

General and administrative

 

 

37,736

 

 

 

25,801

 

Total operating expenses

 

 

93,596

 

 

 

69,048

 

Loss from operations

 

 

(65,659

)

 

 

(14,397

)

Interest income

 

 

59

 

 

 

74

 

Interest expense

 

 

(14,087

)

 

 

(14,731

)

Other income (expense), net

 

 

(3,027

)

 

 

(85

)

(Loss) gain on revaluation of embedded derivatives

 

 

531

 

 

 

(518

)

Loss before income taxes

 

 

(82,183

)

 

 

(29,657

)

Income tax provision

 

 

564

 

 

 

124

 

Net loss

 

 

(82,747

)

 

 

(29,781

)

Less: Net loss attributable to noncontrolling interest and redeemable noncontrolling interest

 

 

(4,388

)

 

 

(4,892

)

Net loss attributable to Class A and Class B common stockholders

 

$

(78,359

)

 

$

(24,889

)

Net loss per share available to Class A and Class B common stockholders, basic and diluted

 

$

(0.44

)

 

$

(0.15

)

Weighted average shares used to compute net loss per share available to Class A and Class B common stockholders, basic and diluted

 

 

177,189

 

 

 

170,745

 

 

Condensed Consolidated Statement of Cash Flows (preliminary & unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(82,747

)

 

$

(29,781

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

14,384

 

 

 

13,442

 

Non-cash lease expense

 

 

3,072

 

 

 

2,115

 

Revaluation of derivative contracts

 

 

2,407

 

 

 

290

 

Stock-based compensation expense

 

 

25,542

 

 

 

17,210

 

Amortization of warranty balance

 

 

150

 

 

 

 

Amortization of debt issuance costs and premium, net

 

 

706

 

 

 

971

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(23,053

)

 

 

(7,135

)

Contract assets

 

 

11,668

 

 

 

(1,680

)

Inventories

 

 

(39,542

)

 

 

(10,820

)

Deferred cost of revenue

 

 

5,865

 

 

 

(13,952

)

Customer financing receivable

 

 

1,388

 

 

 

1,302

 

Prepaid expenses and other current assets

 

 

(6,340

)

 

 

3,908

 

Other long-term assets

 

 

703

 

 

 

(687

)

Accounts payable

 

 

16,117

 

 

 

14,145

 

Accrued warranty

 

 

2,925

 

 

 

(4,305

)

Accrued expenses and other current liabilities

 

 

(25,144

)

 

 

(24,941

)

Operating lease right-of-use assets and operating lease liabilities

 

 

3,436

 

 

 

(2,474

)

Deferred revenue and customer deposits

 

 

(5,783

)

 

 

(48,036

)

Other long-term liabilities

 

 

1,803

 

 

 

1,393

 

Net cash (used in) provided by operating activities

 

 

(92,443

)

 

 

(89,035

)

Cash flows from investing activities:

 

 

 

 

Purchase of property, plant and equipment

 

 

(18,510

)

 

 

(12,932

)

Net cash (used in) provided by investing activities

 

 

(18,510

)

 

 

(12,932

)

Cash flows from financing activities:

 

 

 

 

Repayment of debt

 

 

(4,774

)

 

 

(4,862

)

Proceeds from financing obligations

 

 

 

 

 

5,016

 

Repayment of financing obligations

 

 

(9,423

)

 

 

(3,077

)

Distributions and payments to noncontrolling interests and redeemable noncontrolling interests

 

 

(2,876

)

 

 

(3,880

)

Proceeds from issuance of common stock

 

 

6,961

 

 

 

57,953

 

Net cash (used in) provided by financing activities

 

 

(10,112

)

 

 

51,150

 

Effect of exchange rate changes on cash, cash equivalent and restricted cash

 

 

(153

)

 

 

(229

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(121,218

)

 

 

(51,046

)

Cash, cash equivalents, and restricted cash:

 

 

 

 

Beginning of period

 

 

615,114

 

 

 

416,710

 

End of period

 

$

493,896

 

 

$

365,664

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures (preliminary & unaudited) (in thousands, except percentages)

 

 

Q122

Q421

Q121

GAAP revenue

201,039

342,471

194,007

GAAP cost of sales

173,102

273,768

139,356

GAAP gross profit

27,937

68,703

54,651

Non-GAAP adjustments:

 

 

 

Stock-based compensation expense

3,860

4,062

2,999

Non-GAAP gross profit

31,797

72,765

57,650

 

 

 

 

GAAP gross profit margin

13.9%

20.1%

28.2%

Non-GAAP adjustments

1.9%

1.2%

1.5%

Non-GAAP gross profit margin

15.8%

21.2%

29.7%

 

Q122

Q421

Q121

GAAP loss from operations

(65,659)

(13,505)

(14,397)

Non-GAAP adjustments:

 

 

 

Stock-based compensation expense

26,308

18,822

17,210

Non-GAAP earnings (loss) from operations

(39,351)

5,317

2,813

 

 

 

 

GAAP operating profit (loss) margin

(32.7%)

(3.9%)

(7.4%)

Non-GAAP adjustments

13.1%

5.5%

8.9%

Non-GAAP operating profit (loss) margin

(19.6%)

1.6%

1.4%

 

GAAP Net Loss to non-GAAP Net Loss and Computation of non-GAAP Net Loss per Share (EPS) (preliminary & unaudited) (in thousands)

 

 

Q122

Diluted net earnings per share

Q421

Diluted net earnings per share

Q121

Diluted net earnings per share

GAAP net loss

(78,359)

$ (0.44)

(33,323)

$ (0.19)

(24,889)

$ (0.15)

Non-GAAP adjustments:

 

 

 

 

 

 

Loss for non-controlling interests

(4,388)

(0.02)

(15,182)

(0.09)

(4,892)

(0.03)

Loss (gain) on derivatives liabilities

(531)

(0.00)

13,356

0.08

518

0.00

Gain on the fair value adjustments for certain PPA derivatives

-

-

-

-

(193)

(0.00)

Interest Rate Swap Settlement

-

-

10,879

0.06

-

-

Contingent Consideration Remeasurement

-

-

(3,623)

(0.02)

-

-

Stock-based compensation expense

26,308

0.15

18,822

0.11

17,210

0.10

Non-GAAP net loss

(56,970)

$ (0.32)

(9,071)

$ (0.05)

(12,246)

$ (0.07)

 

 

Q122

Q421

Q121

Numerator:

 

 

 

 

GAAP net loss

 

(78,359)

(33,323)

(24,889)

Non-GAAP net loss

 

(56,970)

(9,071)

(12,246)

 

 

 

 

 

Denominator:

 

 

 

 

Weighted-average shares used to compute basic net earnings per share

 

177,189

175,922

170,745

Weighted-average shares used to compute diluted net earnings per share

 

177,189

175,922

170,745

 

 

 

 

 

GAAP net earnings per share

 

 

 

 

Basic

 

$ (0.44)

$ (0.19)

$ (0.15)

Diluted

 

$ (0.44)

$ (0.19)

$ (0.15)

 

 

 

 

 

Non-GAAP net earnings per share

 

 

 

 

Basic

 

$ (0.32)

$ (0.05)

$ (0.07)

Diluted

 

$ (0.32)

$ (0.05)

$ (0.07)

 

GAAP Net Loss to Adjusted EBITDA reconciliation (preliminary & unaudited) (in thousands)

 

 

Q122

Q421

Q121

GAAP net loss

(78,359)

(33,323)

(24,889)

Non-GAAP adjustments:

 

 

 

Loss for non-controlling interests

(4,388)

(15,182)

(4,892)

Loss (gain) on derivatives liabilities

(531)

13,356

518

Gain on the fair value adjustments for certain PPA derivatives

-

-

(193)

Interest Rate Swap Settlement

-

10,879

-

Contingent Consideration Remeasurement

-

(3,623)

-

Stock-based compensation expense

26,308

18,822

17,210

Depreciation & Amortization

14,384

13,375

13,442

Provision (benefit for Income Tax

564

451

124

Interest Expense / Other Misc

17,055

13,937

14,742

Adjusted EBITDA

(24,967)

18,692

16,062

Use of non-GAAP financial measures

To supplement Bloom Energy condensed consolidated financial statement information presented on GAAP basis, Bloom Energy provides financial measures including non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (loss) (non-GAAP earnings from operations), non-GAAP operating profit (loss) margin, non-GAAP net earnings, non-GAAP basic, diluted net earnings per share and Adjusted EBITDA. Bloom Energy also provides forecasts of non-GAAP gross profit margin and non-GAAP operating profit (loss) margin.

These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP in the United States.

  • The GAAP measure most directly comparable to non-GAAP gross profit is gross profit.
  • The GAAP measure most directly comparable to non-GAAP gross profit margin is gross profit margin.
  • The GAAP measure most directly comparable to non-GAAP operating profit (loss) (non-GAAP earnings from operations) is operating profit (loss) (earnings from operations).
  • The GAAP measure most directly comparable to non-GAAP operating profit (loss) margin is operating profit (loss) margin.
  • The GAAP measure most directly comparable to non-GAAP net earnings is net earnings.
  • The GAAP measure most directly comparable to non-GAAP diluted net earnings per share is diluted net earnings per share.
  • The GAAP measure most directly comparable to Adjusted EBITDA is net earnings.

Reconciliations of each of these non-GAAP financial measures to GAAP information are included in the tables above or elsewhere in the materials accompanying this news release.

Use and economic substance of non-GAAP financial measures used by Bloom Energy

Non-GAAP gross profit and non-GAAP gross profit margin are defined to exclude charges relating to stock-based compensation expense. Non-GAAP operating profit (loss) (non-GAAP earnings from operations) and non-GAAP operating profit (loss) margin are defined to exclude any charges relating to stock-based compensation expense. Non-GAAP net earnings and non-GAAP diluted net earnings per share consist of net earnings or diluted net earnings per share excluding stock-based compensation, loss for non-controlling interest, loss (gain) on derivatives liabilities, loss (gain) on the fair value adjustments for certain PPA derivatives. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense, depreciation and amortization expense, stock-based compensation, allocation for non-controlling interest, and loss (gain) on derivative instruments.

Bloom Energy management uses these non-GAAP financial measures for purposes of evaluating Bloom Energy historical and prospective financial performance, as well as Bloom Energy performance relative to its competitors. Bloom Energy believes that excluding the items mentioned above from these non-GAAP financial measures allows Bloom Energy management to better understand Bloom Energy consolidated financial performance as management does not believe that the excluded items are reflective of ongoing operating results. More specifically, Bloom Energy management excludes each of those items mentioned above for the following reasons:

  • Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date. Although stock-based compensation is a key incentive offered to our employees, Bloom Energy excludes these charges for the purpose of calculating these non-GAAP measures, primarily because they are non-cash expenses and such an exclusion facilitates a more meaningful evaluation of Bloom Energy current operating performance and comparisons to Bloom Energy operating performance in other periods.
  • Loss for non-controlling interest represents allocation to the non-controlling interests under the hypothetical liquidation at book value (HLBV) method and are associated with our Bloom Energy legacy PPA entities.
  • Loss (gain) on derivatives liabilities represents non-cash adjustments to the fair value of the embedded derivatives associated with the convertible notes and other derivatives.
  • Loss (gain) on the fair value adjustments for certain PPA derivatives represents non-cash adjustments to the fair value of the derivative forward contract for one PPA entity (our Third PPA company), a wholly owned subsidiary.
  • Adjusted weighted average shares outstanding attributable to common (Basic and Diluted) includes adjustments to reflect assumed conversion of certain convertible promissory notes.
  • Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense, non-controlling interest, revaluations, stock-based compensation and depreciation and amortization expense. We use Adjusted EBITDA to measure the operating performance of our business, excluding specifically identified items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations.

Material limitations associated with use of non-GAAP financial measures

These non-GAAP financial measures have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of Bloom Energy results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

  • Items such as stock-based compensation expense that is excluded from non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating expenses, non-GAAP operating profit (loss) (non-GAAP earnings from operations), non-GAAP operating profit (loss) margin, non-GAAP net earnings, and non-GAAP diluted net earnings per share can have a material impact on the equivalent GAAP earnings measure.
  • Loss for non-controlling interest, loss (gain) on derivatives liabilities, loss (gain) on the fair value adjustments for certain PPA derivatives, though not directly affecting Bloom Energy cash position, represents the loss (gain) in value of certain assets and liabilities. The expense associated with this loss (gain) in value is excluded from non-GAAP net earnings, and non-GAAP diluted net earnings per share and can have a material impact on the equivalent GAAP earnings measure.
  • Other companies may calculate non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit margin, non-GAAP net earnings, non-GAAP diluted net earnings per share and Adjusted EBITDA differently than Bloom Energy does, limiting the usefulness of those measures for comparative purposes.

Compensation for limitations associated with use of non-GAAP financial measures

Bloom Energy compensates for the limitations on its use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only as a supplement. Bloom Energy also provides a reconciliation of each non-GAAP financial measure to its most directly comparable GAAP measure within this news release and in other written materials that include these non-GAAP financial measures, and Bloom Energy encourages investors to review those reconciliations carefully.

Usefulness of non-GAAP financial measures to investors

Bloom Energy believes that providing financial measures including non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating profit (non-GAAP earnings from operations), non-GAAP operating profit (loss) margin, non-GAAP net earnings, non-GAAP diluted net earnings per share in addition to the related GAAP measures provides investors with greater transparency to the information used by Bloom Energy management in its financial and operational decision making and allows investors to see Bloom Energy results “through the eyes” of management. Bloom Energy further believes that providing this information better enables Bloom Energy investors to understand Bloom Energy operating performance and to evaluate the efficacy of the methodology and information used by Bloom Energy management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of Bloom Energy operating performance with the performance of other companies in Bloom Energy industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.

Investor Relations: Ed Vallejo Bloom Energy +1 (267) 370-9717 Edward.vallejo@bloomenergy.com Media: Jennifer Duffourg Bloom Energy +1 (480) 341-5464 jennifer.duffourg@bloomenergy.com

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