Q4 2021 Fluence Energy Inc Earnings Call

Yeah.

Today's conference is scheduled to begin shortly please continue to standby and thank you for your patience.

[music].

Good day and thank you for standing by welcome to affluent energy fourth quarter 2021 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

I would now like to hand, the conference over to your Speaker today, Samsung Treasury Investor Relations. Please go ahead.

Welcome everyone to our earnings call for the fourth quarter of fiscal <unk>.

Year, 2021 which ended on September 30th.

Before we begin I would like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Forward looking statements are neither promises nor guarantees and are based upon our current estimates and various assumptions and are subject to material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

These and other risks are described in our filings made with the Securities and Exchange Commission.

We encourage you to review these filings for a discussion of these factors, including our annual report on Form 10-K for the fiscal year ended September 30th 2021, which will be filed next week.

You are cautioned not to place undue reliance on these forward looking statements, which speak only as of today and the company disclaims any obligation to update such statements for new information.

This call will also reference non-GAAP measures that we view as important.

Assessing the performance of our business a reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's Investor Relations page at IR, Scott fluids energy Dotcom.

I will now turn the call over to our CEO Manuel Perez to book.

Thank you Sam I would like to extend a personal welcome to our investors research analysts employees and customers who are listening to our first avnet skull as a publicly traded company.

This morning, I'm going to share our market outlook and provide an overview of our business for our new investor base.

After the war I will give an update on some recent developments and then I will hand, the call over to our fluids CFO Danny sphere.

Paul will discuss the financial performance.

And as well as provide some high level revenue guidance be.

Before I jump into the market outlook I would like to extend a sincere. Thank you to the entire Wuhan scheme for their passion and commitment to delivering best in class products services and digital solutions to our customers.

Our team has demonstrated tremendous strength and resilience during the ongoing pandemic.

It is thanks to the contributions that we have successfully completed our IPO generating almost daily and dollars to help drive our next phase of growth.

I will start on slide four.

On the quarterly earnings presentation, with an overview of our business opportunity.

Climate change is real and it poses an existential problem. We are finally seeing governments companies and citizens take serious steps to address this issue.

Rectrix sector.

There is great responsibility in leading that effort as the world transitions away from fossil fuels towards renewable energy.

In fact, the renewables are now one of the cheaper sources of electricity further accelerating this monumental shift.

This huge strength formation, just driving three of our evolution started happening at the same time. The first is a decarbonisation of our planet and the transition to clean energy to help address climate change. The second is the electric Revolution, which is an electrification up everything.

That there one is that they get better evolution met channel learning and artificial intelligence are disrupting traditional processes, redefining energy markets and enabling new opportunities.

Fluids uniquely sits at the core of these three resolutions as clean energy assets Brookfield proliferate. They are also create issues for grid because he was not a regional design to handle intermittent and variable power generation for renewables.

Fluids energy storage systems, and digital applications, enabling the clean energy transformation of the grid.

Third party research shows that the clean energy transition will likely require over a 100 trillion dollars of investment over the next three years.

Bloomberg New Energy Finance also project hundred 90, 94, Gigawatts of installed energy storage capacity by 2030 alone.

As conventional generation assets retire and now replaced by cheaper renewables they need for Ana just started just compounds even further as the grid will require energy storage for stability and reliability.

This opportunity is immense and Florida is well positioned to maintain our leadership position in energy storage solutions and the adult applications.

Turning to slide number five.

Florence is uniquely situated to drive the global transition to clean energy.

By pioneers of the energy storage and team members and leaders with the most experience in the industry.

Many members of our current team literally invented they use of lithium ion batteries on the grid.

<unk> is a digital disruptor and customers far and wide recognized the value of our fluids Iq platform.

While still in the early stages, we are already optimizing over 18% of all renewables in Australia with our fluids IQ platform.

One of the biggest factors that sets us apart from our competitors is our scale. We have one of the largest installed bases that helps to expand our ecosystem.

Product adoption and cross selling opportunities our scale is evident by our global offices and supply change that has enabled us to operate in 30 markets across the world.

We are also battery agnostic.

Do not manufacturing batteries. This is any strategic move for us as battery chemistries are constantly changing and evolving.

Enabling us to move quickly along the technology Corp has better solutions come to the market.

And most importantly, we have secured over $1 7 billion in contracted backlog, which provides us with visibility to future cash flows that will be used to grow and accelerate our business.

Turning to slide six.

I would like to highlight this tremendous total addressable market, starting with energy storage products B N E. F is forecasting a 24% compounded annual growth rate between 2020 and 2030. This equates to over 34 gigawatts of new installations in the year 2000.

30 alone for reference at the end of the quarter, we had an aggregate of three seven gigawatts of energy storage products deploy and contracted.

Also based on B N E F forecast energy storage services are expected to grow 31% compounded annually between 2020 and 20 to 30.

This equates to over 193, he got watt of.

Of community installed services space for reference at the end of the quarter. We had approximately two seven gigawatts under management and contracted for our energy services.

And most exciting is the enormous total our total addressable market for our fluids itunes digital platform.

Where the Tam is nearly 8000 gigawatts.

<unk> is so vast.

We can optimize not only third party energy storage products, but also pure renewable assets, such a wind solar and hydro that do not have any storage components.

This means the growth potential of Fluence IQ is not limited by Instyle energy pace.

As of the end of the quarter fluids IQ is optimizing or has contracted four seven gigawatts. So it's easy to see why we are extremely excited about fluids Iq future.

Turning to slide seven.

In our quarterly results.

In both the fiscal fourth quarter and full year, we delivered record operational performance in our fluids ecosystem.

Apprised of our three business lines.

Looking first at new orders.

Our contracted megawatts vantages torok products increased year over year by 55%.

This resulted in a record 1003 hundred megawatts. Additionally.

Additionally, our service.

Business grew nearly 750% year over year, which resulted in almost 2000 megawatts.

A new all time record for fluids.

And our fourth IQ continued to build momentum as evidenced by our recent our recent contract awards supporting our recurring revenue growth strategy.

As speaking fluent IQ, we are extremely encouraged by the performance of our platform.

Fiscal year 2021 we book two seven Gigawatts from new orders compared to one three gigawatts of new orders for energy storage products, demonstrating the importance of fluids IQ and its ability to optimize renewables beyond storage.

We see substantial growth in all business lines, including our IQ platform setting the stage for a robust 2022 and beyond.

As we spearing this strong growth in order trends like so many other companies. We have also challenged by excess of cheap and charges as well as other project charges, where a compounding effect on the COVID-19 pandemic.

In the fiscal fourth quarter as some of our APAC based customer sites have experienced temporary work interruptions due to COVID-19.

As such we were not able to progress our installation work for storage equipment at these affected sites as planned.

These temporary customer site closures resulted in delayed revenue recognition as well as on anticipated costs related to these delays.

We view these delays as temporary however, we are realistic that the newly discovered Covid variant omicron could prolong this delayed even further.

But it is still too much too early to make that determination.

We are managing ongoing disruptions in our global supply chain, including shipping of our products, we have experienced delays in delivery times.

Increases in shipping rates and decreases in freight.

Rail ability.

These issues have resulted in delays for a number of product deliveries driving increases in short term expenses, including expedited shipping cost and payments for overtime labor.

In response, we are working on multiple solutions to improve our global supply chain, including negotiating guaranteed capacity or ocean freight liners with tier one shipping companies to ensure our products get the lever from our contract manufacturing partner factory location.

Now to our end customers around the world.

We will continue to monitor freight markets closely and take additional measures to protect our customers and our revenue from future supply chain disruptions.

This includes establishing a regional contract manufacturing and distribution model.

In the coming several months, we expect to finalize the terms with our contract manufacturer to serve our north American market and thus reduce our reliance on shipping our products to southeast Asia to the Americas.

I would also like to make a few comments on the recent overheating event that occurred at one of our customers' facilities on September 4th 2021 our 300 megawatt energy storage facility owned by one of our customers experienced turnover.

He didn't event.

Fluent serve as one of the contractor for this facility to provide and Instyle and there's your storage technology.

Which was completed in fiscal year 2021.

As our customer reported the facility experienced an overheated in the event that resulted in the system shutting down as designed.

Further mitigate any possible damage.

Injuries were reported from the incident.

<unk> has been taken offline as teams from fluids, our customer and the battery manufacturer investigate the incident.

We're currently not able to estimate the impact if any.

That this may have in all of our financial results.

Information becomes available we will update our shareholders accordingly.

Turning to slide eight.

Some of our recent developments.

I am pleased to announce fluids, signing a contract during the quarter to provide our energy storage products to the largest energy storage portfolio in Europe.

Or in a total of 105 megawatts of energy storage system across two different locations.

This order was placed by a repeat customer.

Which we believe reflects the value that we have already brought to that customer. This order was also accompanied by a 10 year service contract, providing us with visibility to future recurring revenue.

Also we recently announced a significant contract in Australia for the Haynesville would project with our partners.

Angie and Macquarie.

This is a significant achievement for us.

<unk> includes a 150 megawatts of energy storage.

A 20 year service contract and the assets will be optimized by hour by hour hour fluids IQ platform. This is the perfect example of our cross selling opportunities that enable us to expand our ecosystem for all three business lines.

Continuing with this exciting awards and pleased to announce we have recently signed our first contract with a customer in Taiwan.

This commences our strategic entrance into the Taiwanese market and area, we see tremendous growth over the next 10 years and will play a large part in our overall strategy.

For our services business line during the fourth quarter, we recognize 100% attachment rate for our services for energy storage probes that we sold in the EMEA region.

This is truly a spectacular.

And also build on our model to generate recurring revenue through our services and fluency IQ platform.

Our fluids IQ during the fourth quarter, we deployed our platform to optimize the trading of the largest solar farm in the southern atmosphere with the equivalent output of power and 150000 pumps.

Additionally, just in the fourth quarter alone we added over one gigawatt under management as customers are realizing the value that fluids IQ can deliver.

In summary, and turning to slide nine.

We have a tremendous opportunity in front of us as a result of the enormous total addressable market for energy storage and digital applications.

We have positioned ourselves as a market leader.

Our scale experience and first mover advantage.

Not only that.

We are seeing very favorable momentum from foreign and domestic governments relating to policies and regulations. Most recently seen at the 2021, United Nations Climate change conference.

In addition, recent U S legislation, including the enacted infrastructure build and the pending build back better deals are extremely supportive of our strategy and business.

The infrastructure deal was a good first step to paving the way for increased grid stability and reliability, but.

But we are even more encouraged by what we are seeing in relation to the triple B Bill.

This potential legislation may enable our industry to accelerate deployment.

On the pace needed to Decarbonize, the electric sector by 2035, which is aligned with the bite and some ministration is stated priorities.

Additionally, enactment of this legislation will create a stable long term demand signal needed to accelerate the clean energy transition and to incentivize a robust energy storage supply change.

Domestically and abroad.

You ultimately to Triple B Bill will allow our customers to green light more projects many of which were previously shelf due to not meeting our internal rate of return requirement.

While we are hopeful that build was forward. We do not include any potential upside of government subsidies or policy changes in our business model.

And that would be an incremental benefit.

I will like to thank our founders Siemens and Aes.

Who create influence as a joint venture in 2018.

We will continue to operate with the tagline fluent.

Siemens and Aes company.

As they will continue to support our mission.

As a global player we are managing through supply chain challenges.

For me from the global pandemic, and we are taking short term or long term actions to mitigate the ongoing and future shipping delays.

We view these delays as temporary.

With the impact being strictly a shift in revenue recognition, which we expect to realize in the coming quarters.

Okay.

And finally, we have a best in class balance sheet, and a strong visibility to future cash flows.

Thanks to our significant backlog of $1.7 billion.

This growing backlog will enable us to continue to invest in our people and our business.

So that we can transform the way that we power our world for a more sustainable future.

And with that I will turn it over to Dennis.

Thank you Manuel and good morning to everyone on the call.

During today's call I will recap, our fourth quarter and fiscal year 2021 results discuss our outlook for fiscal year 2022, and talk through our capital allocation plans.

As modeled stated we delivered a record year of new orders and have been successfully populating our ecosystems from both sides.

Shift record order intake of energy storage products and came out very strong influence IQ orders.

Turning to slide 11 talking you through the numbers of the first table.

In fiscal year 2021 re contracted at a record 1311 megawatts of energy storage products and the record 1959 megawatts of energy storage services to.

Services megawatt exceeded product megawatt because we successfully sold service contracts on products sold in previous years.

Overall, our aggregate attachment rate on services as of September 32021 was approximately 74%.

This attachment rate is very encouraging.

It is a continuous proof of our ecosystem strategy and provides us with recurring revenues and visibility to future cash flows.

As already elaborated we are seeing very strong demand for fluence IQ was a total of 2000 and 744 megawatt contracted which.

Which provides future cross selling opportunities for our products and services.

Now moving to the second table.

Despite delays in supply chain and temporary site restrictions due to COVID-19, the amount of megawatts that we deployed for energy storage products more than doubled.

Growing 111% from the prior fiscal year.

Due to our strong contracting and in part due to the other days contracted backlog megawatts grew 43%.

Product pipeline Thats being driven by strong tailings from the market and demand for proprietary generation six product and stood at 14160 megawatts at the end of fiscal year 2021.

Turning to energy storage services.

Assets under management grew 180%, while contracted backlog grew 322% from the prior year driven by the strong contracting activities and then touched on rates I mentioned earlier like our storage products or services pipeline remains robust standing at 10930 megawatts at the end.

Fiscal year 2021.

Moving to our fluids IQ digital platform during Q1 of fiscal year 2021 we acquired Ams.

Since that time, our digital product has demonstrated tremendous growth and strong prospects for future growth.

At fiscal year end digital assets under management was 3108 megawatts by contracted backlog was $1 629 megawatts.

Our digital pipeline was 3301 megawatts at the end of fiscal year 2021.

Let me point out that our digital pipeline typically converts about three times faster than our product and service pipeline.

Our combined assets under management and contracted backlog for the digital business.

<unk> our product.

<unk> deployed and contracted backlog, reflecting the importance of effluence IQ for our ecosystem and demonstrating that the growth of fluence IQ is going beyond energy storage.

Turning to slide 12.

Our fiscal year 2021 revenue grew 21% to a record $681 million versus 561 million for fiscal year 2020.

In the fourth quarter revenue decreased 21% as a result of dimension shipping and COVID-19 related delays whereby revenue recognition was delayed from the fourth quarter of fiscal 'twenty one into fiscal year 'twenty two.

We view the delay of revenue recognition as temporary with expectations that it will be resolved by H two of fiscal year 2022, Let me point out that this was strictly a shifting of revenue and does not represent any contract terminations.

Turning to slide 13.

Gross profit for fiscal year, 'twenty, one was negative $69 million compared to $8 million in fiscal year 2021.

In the fourth quarter gross profit was negative $59 million.

This decrease is driven by $68 million of nonrecurring expenses in Q4, which included $16 7 million related to nonrecurring extra shipping costs $48 2 million related to project charges, which are compounding effects of the COVID-19, pandemic and $2 6 million related to the 2021.

Cargo loss incident.

Adjusting for these nonrecurring items, we generated adjusted cross profit of $15 million in fiscal year, 'twenty, one versus $9 million in fiscal year 2022 in the fourth quarter adjusted gross profit declined in line with the decline in revenue.

As Manuel already discussed we are taking steps to help mitigate the impact of continued ocean freight challenges such as securing guaranteed availability. It was tier one shipping companies.

The shipping delays have compounding effect on additional expenses that were required to incur.

Additional expenses for contract those waiting on equipment and other project charges.

The first half of fiscal year 2022, we are forecasting at least $50 million to $55 million of nonrecurring expenses related to shipping and other COVID-19 related items versus $72 million in fiscal year 2021. We are currently seeing that these expenses are decreasing from quarter $4 21 to the <unk>.

First half of fiscal year 2022.

Continuing to slide 14.

EBITDA in fiscal year 2021 was impacted by the same nonrecurring expenses list across profit. In addition, they are $4 8 million of nonrecurring IPO related expenses, which did not qualify for capitalization.

And that we increased our expenses to support the future growth of the company, which drove the adjusted EBITDA to negative $65 million in fiscal year 2021.

Moving on to slide 15, and our revenue outlook.

Based on our current contracted backlog of $1 7 billion, we are providing guidance for fiscal year 2022 revenue in the range of $1 1 billion to $1 3 billion.

Our guidance takes into consideration of potential delays in revenue recognition, resulting from shipping and COVID-19 related delays and our ability to recognize revenue from our energy storage product on a timely basis and age to fiscal year 2022.

Turning to slide 16.

We would like to highlight the seasonality that we have in our revenues and order intake.

This seasonality is due to customers' desires to have products operational in time for summer in the northern hemisphere.

Historically, we recognized approximately 70% of our revenue mostly in our fiscal second half.

This is aligned with our patterns for order intake.

As a result.

Fiscal first half results will usually be lower compared to our second half. However for this upcoming first half of fiscal year 2022, there is a caveat to the seasonality and that we expect a good portion of the delayed revenue from the fourth quarter of fiscal year 2021 will be recognized during H one physical.

22, leading to a slightly stronger revenue during that time.

Moving on to page 17.

As we look ahead to our next phase of growth, we would like to highlight our capital allocation strategy.

Which was bolstered by the strong balance sheet that we have set in place following the IPO.

With a post IPO that free cash balance of approximately $850 million, we are well positioned to invest to further strengthen our ecosystem.

As we deploy capital we will always stay true to our strategic framework golf enhancing unit economics.

Expanding recurring revenues.

And developing structured offerings with a primary focus on the formats where initiatives.

M&A as an additional avenue to help us executing our strategy and we have a strong track record of making and integrating strategic acquisitions such as Ams.

This concludes our prepared remarks, operator, we're now ready to take questions.

Thank you as a reminder to ask a question you'll need to press star one on your telephone to.

The trial your question press the pound key.

Our first question comes from Mark Strouse with Jpmorgan. Your line is open.

Yes. Thank you very much for taking my questions and welcome to the public markets.

Can we just dig into the comments around the project timing.

Can you just talk about what.

What gives you the confidence and claiming that you think that there will be a rebound in the second half of this fiscal year or is that just the.

The the macro that you're seeing or is that based on specific commentary from your customers.

Thank you Mark and good morning, and thanks for welcoming us to the public markets were very excited at times.

Yes, as we as we mentioned.

[noise] the Cheeping delays, we've seen some level of stabilization on the <unk> NAND and and reliability of those so that we get in there with min two there.

Syed there, they're being installed and commission.

We already mentioned about some of the delays and other costs, but we are confident that.

There will be progressing we have the people on the ground and we have a.

We're understanding where the bottlenecks are so we're very confident that we will get those sites.

In operation fairly soon.

Okay. Thanks Manuel.

And then just a quick follow up on the digital IQ business. There were some pretty impressive metrics that you were provided at providing during your IPO as far as the.

The customer savings.

That your your your customers, where we're experiencing.

<unk> is there any update to that.

A few months that we've had since the IPO any other encouraging metrics that youre able to go out to new prospective customers with.

And then kind of a quick follow up to that is you know how should we be thinking about the potential.

Revenue sharing upside from those contracts when we think about your guidance for the coming year.

Thank you Mark for the question, Yes. Indeed, we are very very excited about our latest win.

They all demonstrate that our ecosystem that we creating and populating.

Across the three business lines is working well with all of those cross selling opportunities and the optimization that we are getting from the fluids IQ platform is.

It's very well received by the market is getting more and more momentum.

I would like to give a chance to our chief digital officers are yet to give us a little bit more color on those big wins that we had and we are demonstrating.

Alright, Thank you Manuel said here just.

So some of the specifics of your question, Yes, we're seeing a lot of momentum on the platform Kpis.

To summarize it for you in.

Since inception.

We submitted over 200000 economic basin different wholesale markets, which is.

Pretty impressive and exciting as delays.

Time and run time has been greater than 99 point.

99%, which is pretty impressive and we're also continuing to provide upside to our customers based on their asset class and geography, they're located so a lot of momentum in terms of the kpis and the product performance.

I just wanted to note that but in terms of the.

The continuous growth Youre, absolutely right, we had a pretty strong quarter you can see some of the diversity of the product applications that we are deploying the Hazelwood project has been pretty impressive Brian can add more color there but.

Just to go back and tie that to the holistic vision that we're pursuing which is to transform the way we power world.

No the power of combining.

Smart connected energy storage system digital applications and services and Thats been showcasing itself for the Hazelwood project in many projects to come.

Let me pause there to see if that answers your question I'm happy to elaborate further.

Yes, it does thanks Dan.

Is it for us thank you very much.

Thank you Mark.

Thank you. Our next question comes from the heap.

Mentally from credit Suisse. Your line is open.

Hey, good morning, and thanks for taking my questions.

Welcome to the public markets.

One quick thinking if I may just on free.

One question on the free cash flow I think just trying to understand.

Given our strategy around these delays in the small transitory and expect to realize them in the second half, but does that impact any of your prior free cash flow assumptions for the next year.

Yes. Thank you very much for your best wishes.

Let me, let me pass to our CFO Dennis to give you more color on.

On your specific question right.

Alright.

Good morning also from my side.

Thanks for the question so.

So overall it does not change all of you for the entire fiscal year 2022, but certainly it impacts the timing within the fiscal year 2022, So as we are seeing.

Some of these topics being.

Our results in the first half of fiscal year 2022, we do expect that certainly cash flow will be impacted by that throughout the first half versus the second half we will see a stronger recovery there and then to close the year.

As we expected.

Yeah.

Got it.

<unk>.

Just on the battery supply.

Previously you talked about having enough supply for 'twenty two 'twenty three.

But as you kind of like looking into procuring more batteries for beyond that.

Seeing any challenges in the market keep hearing about supply constraints and just trying to understand.

Visibility on them.

Yeah.

Thank you Matt.

As we stated.

Yes, we bought it agnostic we have secured.

Significant capacity that will cover our immediate needs.

We announce.

Our strategic partnership with North Board.

In Europe.

We do and we're talking to top tier.

Battery manufacturers also in the U S that eventually will come on line. So we are truly diversified.

Our supply chain and we're going regional on the sourcing.

For the three large regions of three large areas, where we're doing business. So on that regard that goes extract.

Exactly in the direction that we design our strategy and we are really analyzing our contract manufacturing and supply chain.

No I appreciate that.

Just one last one from me and then held back and just more housekeeping.

Services contracted backlog seems flattish quarter over quarter.

<unk> added more contracts in the quarter on for services as well, so just trying to understand that.

If I'm missing anything over that.

Yes.

Thank you and I hate I think that that is not it's not exactly why are we seeing about.

Given that.

Dan has a chance to give you more and more specific numbers on that regard, but actually they are going up right.

Yes.

<unk> disclosed 1198 megawatt contracted backlog as of June 30th that'll be increased.

1918 as of September 30th.

So we are seeing basically a 60% increase within the quarter in line with still strong contracting that you have seen.

Perfect ill followed the rest are neutral okay.

Yeah.

Thank you.

Thank you we have a <unk>.

Question from James West with Evercore ISI Your line is open.

Yes, thanks, Thanks, guys.

Morning.

Congrats as well.

The public markets.

I was curious if you could.

Describe the level of demand that youre seeing.

In the market today, it seems to have hit some type of pinpoint in the last six months or so I know the last time, we connected.

Sure.

So thats going to be time, but you are on a plan that was.

Taken off and so we had to jump off at the end there and it was.

Certainly.

We're going to see customers.

Yes.

Seems to be this acknowledgment worldwide.

We need to get going fast on energy storage and so I'd love to hear your kind of commentary around.

Let's maybe changed in the market.

It was.

Our customers are thinking about this now.

Yes, Thank you very much James and and.

Thanks for the opportunity to tell what we'd seen.

It is true.

There is a significant.

Demand building up.

Everywhere in the World. The fact that we expand into a new we just spend it to a new market in Taiwan.

We got record year orders on every single of our three business lines.

And we are not even counting on additional regulation or any subsidies that might come from.

The infrastructure below a triple b or any other new regulation in other part of the world. We have seen out of the United Nations Climate change conference there.

They're very strong commitment for example from India.

They are announcing a substantial amount of energy storage going to that market.

They are expanding their their regulation where every.

Renewable projects should have energy storage associated with it so we're looking at that market.

It is.

The fact that we are expanding in our three regions.

Yes, we seen a significant worldwide adoption of that technology and understanding that is impossible to decarbonize. The plan Ed just would renewables that we need and as you start X smart solutions with digital optimization.

Of that.

And then maybe a follow up here.

Have a housekeeping item, but the contract manufacturing.

Rollout of additional facilities when should we expect to see some of those come online.

What you've been doing in Vietnam.

Somewhat distribute your supply chain.

Yes, yes, thanks for that question James Yes.

<unk> exactly.

On our strategy direction.

We already have selected <unk>.

Contract manufacturing in Europe, and in the U S. We are negotiating those terms.

It will expand and give us flexibility.

Our capacity to deliver products to those regions or.

Between regions and.

He is significantly reduce our exposure.

To CIT meso I need logistic delays.

Also it will allows us eventually.

Some elements of local content that is being require it will give us the flexibility and the optionality to do that so we're moving into exactly in that direction and he's very very much.

Our strategy.

And as those come on early calendar 'twenty two.

Yeah, we're seeing that that might be.

All of them up and running by the end of 2022, perhaps the first half of 2023, yes.

Okay got it thanks Bill.

Thank you.

Thank you. Our next question comes from Julien Dumoulin Smith.

Smith from Bank of America. Your line is open.

Yeah.

Hey, good morning team congratulations indeed again.

Thanks for the time.

Just a follow up here.

Through through 'twenty two.

How are you thinking about the incremental or the degree to which Hazelwood for instance is an incremental project or what have you versus how you were thinking about things through the course of the year and really if you can try to quantify some of the minimum <unk>.

Mitigating factors when you alluded to logistics and trying to contract. This ahead of time et cetera.

Order of magnitude.

How much could that help offset some of the impacts here again trying to understand some of the puts and takes maybe a degree of conservatism are reflected in the numbers here.

Yes, Thank you very much Julian and good morning again, thanks for your kind words.

So happy that you are here with us.

And following our story and our success.

Yes.

I mean, what we have seen in the Haynesville would contract and project.

Exactly what we wanted when we wanted to do around the world.

It's a very significant customer.

That is understanding our technology is taking advantage of it is entry into a market that they they see from rising and financially attractive and by having this.

Fluids IQ platform on top of that with <unk>.

Revenue sharing type of potential it really really brings.

Value to not just to the customer, but our offering and our ecosystem concept.

On the on the shipping delays and yes, we have taken a short term measures and long term measures that I discussed about the long term <unk>, which is the full regionalisation of our supply chain contract manufacturing and logistics.

The short term, yes, we're talking to the top tier three.

Freed liners to up to secure capacity and to have a very very good scalable that is usually a few a few months ahead of us on a specific numbers.

I will allow Daniel they'll give us more color but.

What we can say is that we've seen in established Asian, bolting prices and reliability.

Yes, let me come back to the Haynesville, what item monal already highlighted and let me highlight again the tremendous when we're really able to sell all of all.

All three items of our ecosystem and therefore, SMA remember Julien from all our discussion that we have been very conservative in regards to how we look at the performance contracting side and we see tremendous upside on the digital side of the business.

His contract.

The products on the services side are basically in line with what we have contemplated in our business plans and we're also quite proud of that that we have achieved that.

Yes.

Excellent guys. Thank you and just if I can follow up here.

Nuance here you talked about some project delays getting pushed from 'twenty. One 'twenty. Two you provided this calendar year approximate percentage of revenue, but presumably as we think about <unk> 22, more specifically rather than the generic number that you guys provided here in theory, the first half should be stronger than the percent revenues that you guys talked about here on sort of.

The generic go forward basis, right I, just wanted to sort of clarify the bridge 'twenty one to 'twenty two versus this sort of ongoing guidance.

Alright, Julian so.

Our seasonality is stands whats the typical 70% in the second half.

Also the covered and the.

And the statement before we certainly have as delays slightly stronger revenue than the normal seasonality in H, one, but it's not to the level that we would see that H, one is becoming stronger and age towards so certainly there is some some higher number than the typical 30%, but not up to a level of 50%.

Omar.

Got it alright excellent I will leave it there guys. Thank you so much cheers.

Thank you Julien.

We have a question from Brian Lee with Goldman Sachs. Your line is open.

Hey, guys. Thanks for taking the questions good morning.

Couple.

Sort of a modeling related ones if I could.

If I calculate it right I think the revenue push out was about $120 million.

That ballpark is that is that fair and how many projects were impacted and you mentioned seeing thats all getting recognized in the first half of fiscal 'twenty two.

What's kind of the cadence you're expecting between Q1 and Q2 dollars 50, 50 or are we going to see more of that revenue rec.

On the push outs in one particular quarter versus another.

Thank you. Thank you, Brian and again, thanks for a good morning, and thanks for your good words.

On the specifics I will pass.

Danny is too to give us more color on that on your question right Hey, Brian Good morning.

In regards to sort of push out basically.

Youre right that hasnt been that push out from Q4 into Q1 or the first half of fiscal year.

22, and I think the number which you mentioned somewhere in the ballpark range. We would expect a larger portion of that to be recovered in Q2, and probably somewhere in the range of.

30% to 40% of that in Q1 fiscal year 'twenty two.

Great. That's super helpful color and then just a second one and I'll pass it on.

You know nice backlog growth here I think the last quarter and you guys. In June had mentioned $1 3 billion now you're at $1 7 billion contracted backlog.

I know you gave it on a volume basis any sense.

A rough ballpark, what the mix is of that $1 7 billion on a dollar basis between.

Energy storage products.

Services and digital and then I guess just in that context.

It seems like the revenue guide one one to 1.3, given given the backlog at $1 7 million or it would be supportive of higher. So just wondering if you could.

And remind us how you define backlog and kind of comment a bit on the mix to give us some context, there as well thanks guys.

Sure, Brian So out of the $1 $7 billion, we have approximately one 3 billion on the product side and then the remainder is basically on the recurring side of the business that means on the services as well as of the of the digital side. So in that regard when you think about the guidance.

One one to $1 3 billion.

As we also stated in our prepared remarks that we're certainly still looking also about H two potential delays there and therefore, we have to put out the guidance of one 1% to $1 3 billion based on what we are seeing in the backlog.

Yeah.

Okay, and just last one to clarify on.

The non storage product portion of the backlog that $400 million, what's the average duration, it's not 12 month backlog its backlog that you know.

Represent sort of forward three to five year revenue could you.

Remind us what what you characterized that as services and digital.

Right.

Typical as it is a mixture between the service on the digital side. So we are seeing somewhere 10% to 12 years on on the digital side somewhere in the range of three to five years. So in that regard.

<unk>.

This revenue was up two audits backlog covers up to 12 years, certainly it was a bit more.

Forward loaded.

Pattern due to the digital side of the mix.

If you allow me.

To elaborate a little bit on that.

There are two elements here that arent very significant the first one is that.

We got 100% attachment rate on services in the EMEA region, which is fantastic overall, almost 75%, 74% attachment rate overall, which is also very very high high number so it brings.

And you ratify.

The confidence that we see in front of our customers that the whole package the whole ecosystem that we are offering in the three business lines. It makes a lot of sense for them and brings value to them and the fact that the hazelwood probably that has a 20 year service contract is that is a testament of.

The value that we're creating and providing to them.

Alright, that's great I'll pass it on I will also echo everyone else's. Congrats thanks guys.

Thank you very much Brian.

We have a question from Stephen Byrd with Morgan Stanley. Your line is open.

Yes.

Oh, Hi, this is <unk> on for Stephen Byrd. Thanks, So much for taking my question and congrats on the IPO.

I was wondering if I could just touch on influence on Q could you give an update on where things stand in the development pipeline for the next set of software apps and any indications and initial customer conversations as to what the interest level and demand might be for the next round of software.

Thank you very much.

Good morning, David.

I will pass us yet to give us more color on what is happening with affluence IQ platform, but overall very excited and very positive.

Very good feedback from our customers.

Sure. Thank you.

So just a little bit more color in terms of fluid. Thank you.

So we are continuing to see.

Strong demand in the market that we have a presence.

That's a national interest in the market in Australia, where we own about 20% of renewable share. So we expect to continue to grow in that market, California has been pretty strong for us we expect to continue to grow.

But unfortunately, what we saw in the recent Texas climate environment.

The reason I say unfortunate because theres a lot of.

Public sacrifices being made so our software is going to be a centerpiece in that market ramping up development of Ara.

<unk> application.

To be released this year.

Seeing a lot of volatility in that market resembling what we've seen the Australian market absence of the centralized capacity.

So of ERCOT market entry is top of the priority for us.

Investing heavily in the software development application to support power market optimization with Paul and thank you in the ERCOT market, but to your point as we kind of talked about during our analyst day as well the goal is to further kind.

Develop applications that go beyond town markets that is addressing dispatch applications for vertically integrated utilities, where we don't see a power market as being.

Kind of we don't see a presence of power markets.

And we're also thinking about mid term portfolio management applications long term investment applications. So all of that will be part of the business plan and the product development in fiscal year 'twenty two.

With an aim towards commercialization in fiscal year 'twenty three so we're on track, they're making a lot of progress on is investing in the team and talent to <unk>.

Support us with that vision of where things are shaping up.

Yeah.

That's really great color I appreciate that and maybe just one follow up on the demand side of things I was just wondering if you could give some color on geographically how is the backlog split.

We're the strongest where you're seeing the strongest demand in the different countries that you're operating in maybe heading into 2022.

Just to clarify David on the fluids IQ platform overall.

I was thinking more overall in terms of the energy storage product.

Portfolio overall beyond just <unk>.

Yeah.

Are you seeing to be honest.

We've seen a demand.

Picking up.

All markets. The fact that we enter into Taiwan. The fact that we have to record that.

The largest.

The largest project in Europe.

That we keep growing very fast in the California market with affluent IQ. So we have you.

Examples.

That.

Contracts being awarded in all three regions with record levels.

A level seen in all of them. So it's a.

It is a totally synchronized.

<unk> trajectory for all three regions, which is very encouraging.

Okay.

That's great to hear thanks, so much and congrats congrats again.

Thank you very much David.

Thank you our last question comes from Tom Curran with Seaport Research. Your line is open.

Okay.

Yeah.

Yeah.

Tom Please check your mute button.

Yeah.

Sorry.

Good morning, and to quote Bruce Willis and Diehard welcome to the party.

Yeah.

I'm curious about how much visibility and certainty you have on your role within Aes's renewable strategy so from <unk>.

<unk> 2021 through 2025, we understand the Aes is planning to add.

Four gigawatts per annum of solar capacity.

Tonnage of that do you expect to include storage and and given that represents assured locked in demand for fluids.

How are you modeling goes orders internally is there an annual floor for Aes orders that we can assume.

Yes.

Thank you. Thank you very much and good morning.

Tom.

And thanks for your kind words.

We're very excited about.

This new new new chapter in our.

History now of being a public company.

Yes indeed.

You all know Aes is that as a shareholder is.

He is one of the founders.

Thanks Sam.

Along with Siemens to establish these JV.

And have the vision.

We're the market, where we'll be going in.

<unk> proved to be true to be right on their decision and so we are very very happy and very excited and thankful for that.

Yeah on them.

On the on the specific.

Pipeline.

<unk> has been upgrading.

Their pipeline and their annual commitment.

We have a very strong influent conversation communication with them.

This is not new it has been therefore for years.

So.

We go in.

And to have with them.

We expect this 100%.

Whatever they are including a percent that they are creating their own <unk>.

Yes.

The expansion so we will be with them, we would be providing.

Our smart solutions services, and digital affluence IQ along with them and we're very excited that as part of our project plans.

Our plans as part of our business plan and and the fact that they are increasing their own numbers is is is that.

It's a tailwind for us.

And Meanwhile, we can assume that.

Whatever percentage of that.

New solar capacity there'll be building.

Yes, theyre going to include storage for that you'll.

You'll be winning 100% of that that will probably go to fluids.

Yes, yes, that's true.

And then if I.

I can just squeezing one more follow up before we run out of time here.

Where are you expecting the energy storage products divisions, adjusted gross margin to exit fiscal 2022.

Okay.

Hum.

Danny if you would like to take that one right. So.

Basically in line with what we have stated in our model during the IPO process, you can take that as a proxy.

Great So still on track for that.

Yes.

Thank you for taking my questions.

Thank you very much Tom.

There are no other questions in the queue I'd like to turn the call back to <unk> for closing remarks.

Thank you very much operator.

Thanks to everyone in all our I would like to thank again and I did it at the beginning of my.

My my speech.

And my words.

Then I will like to extend a sincere thank you to the entire fluids team.

They have been extremely passionate strong committed they have shown strength and resilience because all the COVID-19 pandemic. So thank you everyone. Thanks to our customers investors.

Analyst that had they made this possible.

And we are so so happy that you know.

Given all the circumstances.

And the headwinds, we keep growing we keep beating our own records and expanding it and truly changing the way that we power our world for a more sustainable future.

Thanks, everyone.

This concludes today's conference call. Thank you for participating you may now disconnect.

[music].

Okay.

Yes.

Yes.

[music].

Thanks.

Okay.

Sure.

[music].

[music].

[music].

[music].

Welcome everyone to our earnings call for the fourth quarter of fiscal year 2021, which ended on September 30th.

Before we begin I would like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

These forward looking statements are neither promises nor guarantees and are based upon our current estimates and various assumptions and are subject to material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

These and other risks are described in our filings made with the Securities and Exchange Commission.

We encourage you to review these filings for a discussion of these factors, including our annual report on Form 10-K for the fiscal year ended September 30th 2021, which will be filed next week.

You are cautioned not to place undue reliance on these forward looking statements, which speak only as of today and the company disclaims any obligation to update such statements for new information.

This call will also reference non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's investor.

Relations page at IR, Scott fluids energy Dot com.

I will now turn the call over to our CEO Manuel Perez de book.

Thank you Sam I would like to extend a personal when it comes to our investors research analysts employees and customers who are listening to our first avnet skull as a publicly traded company.

This morning, I'm going to share our market outlook and provide an overview of our business for our new investor base.

After the war I will give an update on some recent developments and then I will hand, the call over to our fluids CFO Dan It's fair.

I'll discuss the financial performance.

And as well as provide some high level revenue guidance.

Before I jump into the market outlook.

Like to extend a sincere thank you.

The entire floor and scheme for their passion and commitment to delivering best in class products services and solutions to our customers. Our team has demonstrated tremendous strength and resilience during the ongoing pandemic.

It is thanks to the contributions that we have successfully completed our IPO generating almost daily and dollars to help drive our next phase of growth.

I will start on slide four.

On the quarterly earnings presentation, with an overview of our business opportunity.

Climate change is real and it poses an existential problem. We are finally seeing governments companies and citizens take serious steps to address this issue.

Electric sector bears great responsibility in leading that effort as the world transitions away from fossil fuels towards renewable energy.

In fact, the renewables are now one of the cheaper sources of electricity further accelerating this monumental shift.

This huge strength formation is drive in three of our evolution started happening at the same time. The first is a decarbonisation of our planet and the transition to clean energy to help address climate change. The second is the electric Revolution, which has an electrification of everything.

The third one is that they get better evolution met channel learning and artificial intelligence are disrupting traditional processes really fine in energy markets and enabling new opportunity.

Fluids uniquely sits at the core of this reader evolutions as Green energy assets Brookfield proliferate. They are also create issues for grid because he was not a regional design to handle intern maintain and variable power generation for renewables.

Fluence energy storage systems, and digital applications, enabling the clean energy transformation of the grid.

Third party research shows that the clean energy transition will likely require over a 100 trillion dollars of.

Over the next three years.

Bloomberg New energy Finance also project 194, Gigawatts of installed energy storage capacity by 2030 alone.

As conventional generation assets retire and now replaced by cheaper renewables they need for energy storage compounds, even further as the grid will require energy storage for stability and reliability.

This opportunity is immense and Florida is well positioned to maintain our leadership position in energy storage solutions and the adult applications.

Turning to slide number five.

Florence is uniquely situated to drive the global transition to clean energy.

Led by pioneers of the energy storage and team members and leaders with the most experience in the industry.

Many members of our current team literally invented they use of lithium ion batteries on the grid.

<unk> is a digital disruptor and customers far and wide to recognize the value of our fluids Iq platform.

While still in the early stages, we are already optimizing over 18% of all renewables in Australia with our fluids IQ platform.

One of the biggest factors that sets us apart from our competitors is our scale. We have one of the largest installed bases that helps to expand our ecosystem.

Adoption and cross selling opportunities our scale is evident by our global offices and supply change that has enabled us to operate in 30 markets across the world.

We are also battery agnostics.

Nonmanufacturing batteries. This is any strategic move for us as battery chemistries are constantly changing and evolving.

Enabling us to move quickly along the technology Corp, as better solutions come to the market.

And most importantly, we have secured over $1 7 billion in contracted backlog, which provides us with visibility to future cash flows that will be used to grow and accelerate our business.

Turning to slide six.

I would like to highlight this tremendous total addressable market, starting with energy storage for others B and E. F is forecasting a 24% compounded annual growth rate between 2020 and 2030. This equates to over 34 gigawatts of new installations in the year.

2030 alone for reference at the end of the quarter, we had an aggregate of three seven gigawatts of energy storage products deploy and contracted.

Also based on <unk> F forecast energy storage services are expected to grow 31% compounding annually between 2020 and 2030. This equates to over 193, he got what of cumulative installed services space for RAF brands.

<unk> of the quarter, we had approximately two seven gigawatts under management and contracted for our energy services.

And most exciting is the enormous total our total addressable market for our fluids IQ digital platform, where the Tam is nearly 8000 gigawatts.

Tam is so vast because we can optimize not only third party energy storage products, but also pure renewable assets, such a wind solar and hydro that do not have any storage components.

This means the growth potential of Fluence IQ is not limited by Instyle energy pace.

As of the end of the quarter fluids IQ is optimizing or has contracted four seven gigawatt. So it's easy to see why we are extremely excited about fluids Iq future.

Turning to slide seven and.

In our quarterly results.

In both the fiscal fourth quarter and full year would deliver record operational performance in our fluids ecosystem.

Price of our three business lines.

Looking first at new orders, our contracted megawatts advantages startup products increased year over year by 55%.

This resulted in a record 1003 hundred megawatts. Additionally.

Additionally, our service.

Business grew nearly 750% year over year, which resulted in almost 2000 megawatts.

A new all time record for fluids.

And our fourth IQ continued to build momentum as evidenced by our recent our recent contract awards supporting our recurring revenue growth strategy.

Speaking on <unk> IQ, we are extremely encouraged by the performance of our platform in fiscal year 2021, We book two seven gigawatts from new orders compared to one three gigawatts of new orders for energy storage products, demonstrating the importance of fluids Iq.

And its ability to optimize renewables beyond storage.

We see substantial growth in all business lines, including our IQ platform setting the stage for a robust 2022 and beyond.

As we experienced strong growth in order trends like so many other companies. We have also challenged by excess of shipping charges.

Well as other project charges, where a compounding effect on the COVID-19 pandemic.

In the fiscal fourth quarter as some of our APAC based customer sites have experienced temporary work interruptions due to COVID-19.

As such we were not able to progress our installation workforce storage equipment at this affected sites as planned.

These temporary customer site closures resulted in delayed revenue recognition as well as an anticipated costs related to these delays.

We view these delays as temporary however, we are realistic that the newly discovered Covid variant omicron could prolong this delayed even further.

But it is still too much too early to make that determination.

We are managing ongoing disruptions in our global supply chain, including shipping of our products. We have experienced delays in delivery times increases in shipping rates and decreases in freight availability.

These issues have resulted in delays for a number of product deliveries.

Driving increases in short term expenses.

In expedited shipping costs and payments for overtime labor.

In response, we are working on multiple solutions to improve our global supply chain, including negotiating guarantee capacity or ocean freight liners with tier one shipping companies to ensure our products get delivered from our contract manufacturing manufacturing location.

In Vietnam to our end customers around the world.

We will continue to monitor freight markets closely and take additional measures to protect our customers and our revenue from future supply chain disruptions.

This includes establishing a regional contract manufacturing and distribution model.

In the coming several months, we expect to finalize the terms with our contract manufacturer to serve our north American market and thus reduce our reliance on shaping our product to southeast Asia to the Americas.

I would also like to make a few comments on the recent overheating event that occurred at one of our customers' facilities on September 4th 2021 our 300 megawatt energy storage facility on by one of our customers experienced an overheating.

Vent.

Fluids served as one of the contractor for this facility to provide and Instyle and energy storage technology, which was completed in fiscal year 2021.

As our customer reported the facility experienced an overheated in the event that resulted in the system shutting down as designed.

To further mitigate any possible damage.

No injuries were reported from the incident.

The facility has been taken offline as teens from fluids, our customer and the battery manufacturer investigate the incident.

We are currently not able to estimate the impact if any that this <unk> may have in all of our financial results as information becomes available we will update our shareholders accordingly.

Turning to slide eight and some of our recent developments.

Im pleased to announce fluid signing a contract during the quarter to provide our energy storage products to the largest energy storage portfolio in Europe.

Or in a total of 105 megawatts of energy storage system across two different locations. This order was placed by a repeat customer.

Which we believe reflects the value that we have already brought to that customer. This order was also accompanied by a 10 year service contract, providing us with visibility to future recurring revenue.

Also we recently announced a significant contract in Australia for the Haynesville would project with our partners.

Angie and Macquarie.

This is a significant achievement for us.

The award includes 150 megawatts of energy storage.

A 20 year service contract and the assets will be optimized by.

By our our fluids IQ platform. This is the perfect example of our cross selling opportunities that enable us to expand our ecosystem for all three business lines.

Continuing with this exciting awards and pleased to announce we have recently signed our first contract with a customer in Taiwan.

This commences our strategic entrance into the Taiwan needs market an area, we see tremendous growth over the next 10 years and will play a large part in our overall strategy.

For our services business line during the fourth quarter, we recognized 100% attachment rate for our services for energy storage probes that we sold in the EMEA region.

This is truly a spectacular.

And also builds on our model to generate recurring revenue through our services and fluency IQ platform.

Our fluency IQ during the fourth quarter, and we deploy our platform to optimize the trading of the largest solar farm in the southern atmosphere with equivalent output of power and 150000 pumps.

Additionally, just in the fourth quarter alone we added over one gigawatt under management as customers are realizing the value that fluids IQ can deliver.

In summary, and turning to slide nine.

We have a tremendous opportunity in front of us as a result of the enormous total addressable market for energy storage and digital applications.

We have positioned ourselves as a market leader.

Our scale experience and first mover advantage.

Not only that.

We are seeing very favorable momentum from foreign and domestic governments relating to policies and regulations. Most recently seen at the 2021, United Nations Climate change conference.

In addition, recent U S legislation, including the enacted infrastructure build and dependent build back better deal are extremely supportive of our strategy and business.

The infrastructure Bill was a good first step to paving the way for increased grid stability and reliability, but.

But we are even more encouraged by what we are seeing in relation to the triple B Bill.

This potential legislation may enable our industry also accelerate deployments.

On the pace needed to Decarbonize, the electric sector by 2035, which is aligned with the bite and some ministration is stated priorities.

Additionally, and nachman of this legislation will create a stable long term demand signal needed to accelerate the clean energy transition and to incentivize a robust energy storage supply change.

Domestically and abroad.

You ultimately the Triple B Bill will allow our customers to green light more projects many of which were previously shelf due to not meeting our internal rate of return requirements.

While we are hopeful that build was forward. We do not include any potential upside of government subsidies or policy changes in our business model.

And that would be an incremental benefit.

I will like to thank our founders Siemens and Aes.

Who create influence as a joint venture in 2018.

We will continue to operate with the tagline fluent.

Siemens and Aes company.

As they will continue to support our mission.

As a global player we are managing through supply chain challenges.

Coming from the global pandemic, and we are taking short term or long term actions to mitigate the ongoing and future shipping delays.

We view these delays as temporary.

With the impact being strictly at shift in revenue recognition, which we expect to realize in the coming quarters.

Okay.

And finally, we have a best in class balance sheet, and a strong visibility to future cash flows.

Same store, our significant backlog of $1.7 billion.

This growing backlog will enable us to continue to invest in our people and our business.

So that we can transform the way that we power our world for a more sustainable future.

And with that I will turn it over to Dennis.

Thank you Manuel and good morning to everyone on the call.

During today's call I will recap, our fourth quarter and fiscal year 2021 results discuss our outlook for fiscal year 2022, and talk through our capital allocation plans.

As modeled stated we delivered a record year of new orders and have been successfully populating our ecosystems from both sides.

Achieved record order intake of energy storage products and came out very strong on the <unk> IQ orders.

Turning to slide 11 talking you through the numbers of the first table.

In fiscal year 2021 re contracted at a record 1311 megawatts of energy storage products and the record 1959 megawatts of energy storage services to.

Services megawatt exceeded product megawatt because we successfully sold service contracts on products sold in previous years.

Overall, our aggregate attachment rate on services as of September 32021 was approximately 74%.

This attachment rate is very encouraging as it is a continuous proof of our ecosystem strategy and provides us with recurring revenues and visibility to future cash flows.

As already elaborated we are seeing very strong demand for fluence ICU was a total 2000 and 744 megawatt contracted.

Which provides future cross selling opportunities for our products and services.

Now moving to the second table.

Despite delays in supply chain and temporary site restrictions due to COVID-19, the amount of megawatts that we deployed for energy storage products more than doubled.

111% from the prior fiscal year.

Due to our strong contracting and in part due to the delays.

Contracted backlog megawatts grew 43%.

Product pipeline is being driven by a strong tailwind from the market and demand for proprietary generation fixed product and stood at 14160 megawatts at the end of fiscal year 2021.

Turning to energy storage services.

Assets under management grew 180%, while contracted backlog grew 322% from the prior year driven by the strong contracting activities and then touched on rates mentioned earlier like our starch products or services pipeline remains robust standing at 10930 megawatts at the end.

For fiscal year 2021.

Moving to our fluids IQ digital platform during Q1 of fiscal year 2021 we acquired Ams.

Since that time, our digital product has demonstrated tremendous growth and strong prospects for future growth.

At fiscal year end digital assets under management was 3108 megawatts contracted backlog was $1 629 megawatts.

Our digital pipeline was 3301 megawatts at the end of fiscal year 2021.

Let me point out that our digital pipeline typically converts about three times faster than our product and service pipeline.

Our combined assets under management and contracted backlog for the digital business.

<unk> our product.

<unk> deployed and contracted backlog, reflecting the importance of fluids IQ for our ecosystem and demonstrating that the growth of fluence IQ is going beyond energy storage.

Turning to slide 12.

Our fiscal year 2021 revenue grew 21% to a record $681 million versus $561 million for fiscal year 2020.

In the fourth quarter revenue decreased 21% as a result of dimension shipping and COVID-19 related delays whereby revenue recognition was delayed from the fourth quarter of fiscal 'twenty one into fiscal year 'twenty two.

We view the delay of revenue recognition as temporary with expectations that it will be resolved by age two of fiscal year 2022, Let me point out that this was strictly a shifting of revenue and does not represent any contract terminations.

Turning to slide 13.

Gross profit for fiscal year, 'twenty, one was negative $69 million compared to $8 million in fiscal year 2021.

In the fourth quarter gross profit was negative $59 million.

This decrease was driven by $68 million of nonrecurring expenses in Q4, which included $16 7 million related to nonrecurring excess shipping costs $48 2 million related to project charges, which are compounding effects of the COVID-19, pandemic and $2 6 million related to the 2021.

Cargo loss incident.

Adjusting for these nonrecurring items, we generated adjusted cross profit of $15 million in fiscal year, 'twenty, one versus $9 million in fiscal year 2022 in the fourth quarter adjusted gross profit declined in line with the decline in revenue.

As Manuel already discussed we are taking steps to help mitigate the impact of continued ocean credit challenges such as securing guaranteed availability. It was tier one shipping companies.

The shipping delays have compounding effect on additional expenses that were required to incur some.

Additional expenses for contractors waiting on equipment and other project charges.

The first half of fiscal year 2022, we are forecasting at least $50 million to $55 million of nonrecurring expenses related to shipping and other COVID-19 related items versus $72 million in fiscal year 2021. We're currently seeing that these expenses are decreasing from quarter 421 sort of <unk>.

First half of fiscal year 2022.

Continuing to slide 14.

EBITDA in fiscal year 2021 was impacted by the same nonrecurring expenses list across profit. In addition, there are $4 8 million of nonrecurring IPO related expenses, which did not qualify for capitalization.

And that we increased our expenses to support the future growth of the company, which drove the adjusted EBITDA to negative $65 million in fiscal year 2021.

Moving on to slide 15, and our revenue outlook.

Based on our current contracted backlog of $1 7 billion, we are providing guidance for fiscal year 2022 revenue in the range of $1 1 billion to $1 3 billion.

Our guidance takes into consideration of potential delays in revenue recognition, resulting from shipping and COVID-19 related delays and our ability to recognize revenue from our energy storage product on a timely basis and age to fiscal year 2022.

Turning to slide 16.

We would like to highlight the seasonality that we have on our revenues and order intake.

This seasonality is due to customers' desires to have products operational in time for summer in the northern hemisphere.

Historically, we recognized approximately 70% of our revenue mostly in our fiscal second half.

This is aligned with our patterns for order intake.

As a result.

Fiscal first half results will usually be lower compared to our second half. However for this upcoming first half of fiscal year 2022, there is a caveat to the seasonality and that we expect a good portion of the delayed revenue from the fourth quarter of fiscal year 2021 will be recognized during H one physically.

22, leading to a slightly stronger revenue during that time.

Moving on to page 17.

As we look ahead to our next phase of growth, we would like to highlight our capital allocation strategy.

Which was bolstered by the strong balance sheet that we have set in place following the IPO.

With a post IPO that free cash balance of approximately $850 million, we are well positioned to invest to further strengthen our ecosystem.

As we deploy capital we will always stay true to our strategic framework golf enhancing unit economics.

Pending recurring revenues and.

And developing structured offerings with a primary focus on the former two initiatives.

M&A as an additional avenue to help us executing our strategy and we have a strong track record of making and integrating strategic acquisitions such as Ams.

This concludes our prepared remarks, operator, we're now ready to take questions.

Thank you as a reminder to ask a question you will need to press star one on your telephone.

I'll answer all your question press the pound key.

Our first question comes from Mark Strouse with Jpmorgan. Your line is open.

Yes. Thank you very much for taking my questions and welcome to the public markets.

Can we just dig into the comments around the the.

Project timing.

Can you just talk about.

What gives you the confidence and claiming that you think that there will be a rebound in the second half of this fiscal year or is that just.

The the macro that you're seeing or is that based on specific commentary from your customers.

Yeah.

Thank you Mark.

Good morning, and thanks for welcoming us to the public markets were very excited at times.

Yes.

We as we mentioned.

The the shipping delays, we've seen some level of stabilization.

On the <unk>, NAND and and reliability of those.

So that we get in there with min.

The site being installed and commission.

We already mentioned about some of the delays in our cost, but we are confident that there will be progressing we have the people on the ground and we have a.

We're understanding where the bottlenecks are so we're very confident that we will get those sites.

In operation fairly soon.

Okay. Thanks Manuel.

And then just a quick follow up on the digital IQ business. There were some pretty impressive metrics that you were provided at providing during your IPO as far as the.

The customer savings.

That your your your customers, where we're experiencing.

Is there any update to that.

Few months that we've had since the IPO any other encouraging metrics that youre able to go out to new prospective customers with it.

And then kind of a quick follow up to that is how should we be thinking about the potential.

Revenue sharing upside from those contracts when we think about your guidance for the coming year.

Thank you Mark for the question, Yes. Indeed, we are very very excited about our latest win.

They all demonstrate that our ecosystem that we're creating and populating.

Across the three business lines, it's working well.

With all of those cross selling opportunities and the optimization that we are getting from the fluids IQ platform is.

Very well received by the market is getting more and more momentum.

I would like to give a chance.

Our chief digital officers are yet to give us a little bit more color on those big wins that we had and we demonstrated.

Alright, Thank you Manuel said here just.

So some of the specifics of your question, Yes, we're seeing a lot of momentum on the platform. This is.

Summarize that for you.

Since inception.

We submitted over 200000 economic bids in different wholesale markets, which is.

Pretty impressive and exciting and delays.

Time and run time has been greater than 99 point.

99%, which is pretty impressive and we're also continuing to provide upside to our customers based on their asset class in the geography, they're located so a lot of momentum in terms of the kpis and the product performance.

Just wanted to note that but in terms of the.

The continuous growth Youre, absolutely right, we had a pretty strong quarter you can see some of the diversity of the product applications that we are deploying the Hazelwood project has been pretty impressive Brian can add more color there but.

Just to go back and tie that to the holistic vision that we're pursuing which is to transform the way we power world.

Should note the power of combining.

Smart connected energy storage systems digital applications and services and Thats been showcasing itself for the Hazelwood project in many projects to come.

Let me pause there to see if that answers your question I'm happy to elaborate further.

Yes, it does thanks Dan.

Is it for us thank you very much.

Thank you Mark.

Thank you. Our next question comes from the heap mentally from credit Suisse. Your line is open.

Hey, good morning, and thanks for taking our questions.

Come to the public markets.

One question, if I may just on free Hey, Michael one question on the free cash flow I think just trying to understand.

Given our strategy around these delays and that's more transitory and expect to realize them in the second half, but does that impact any of your prior free cash flow assumptions for the next year.

Yes, thank you very much.

For your best wishes.

Let me, let me pass to our CFO Dennis to.

To give you more color on your specific question.

Hi, Good morning also from my side and thanks for the question.

So overall it does not change our view for the entire fiscal year 2022, but certainly it impacts the timing within the fiscal year 2022, So as we are seeing.

Some of these topics being.

Our results in the first half of fiscal year 2022, we do expect that certainly cash flow will be impacted by that throughout the first half versus the second half we will see a stronger recovery there and then to close the year as we expect.

Got it and then.

Just on the battery supply.

You talked about having enough supply for 'twenty, two and 'twenty three.

But as you kind of like looking into procuring more batteries for beyond that.

Seeing any challenges in the market keep hearing about supply constraints and just trying to understand.

Lithium.

Yeah.

Thank you Omar.

As we stated.

Yes, we bought it agnostic we have secured.

Significant capacity that will cover our immediate needs.

We announce.

Our strategic partnership with North Board in Europe.

We do and we're talking to top tier.

Battery manufacturers also in the U S that eventually will come on line. So we are truly diversified.

Our supply chain and we're going regional on the sourcing for the three large regions. The three large areas, where we're doing business. So on that regard that goes extract.

Exactly in the direction that we design our strategy and we are really analyzing our contract manufacturing and supply chain.

I appreciate that.

Just one last one for me and then held back and just more housekeeping.

Services.

Backlog seems flattish quarter over quarter.

More contracts in the quarter on for services as well, so just trying to understand that.

If I'm missing anything of it.

Yes, Thank you and I hate I think that that is not it's not exactly why are we seeing that.

Given the.

Then as a chance to give you more and more specific numbers on that regard, but actually they are going up right.

So all in all.

<unk> disclosed 1198 megawatt contracted backlog as of June 30 increased to.

1918 as of September 30th.

So we are seeing basically a 60% increase within the quarter in line with still strong contracting that you have seen.

Perfect ill follow the rest are neutral okay.

Yes.

Thank you.

Thank you we have initially a COO.

Question from James West with Evercore ISI Your line is open.

Yes. Thanks, Thanks, guys. Good luck.

Morning.

Congrats as well.

The public markets.

I was curious if you could.

Describe the level of demand that youre seeing in.

In the market today, it seems to have hit some type of tipping point in the last six months or so I know the last time, we connected.

Sure.

So thats a good time, but you are on a plan that was.

Taking all of them had to jump off at the end there and it was.

Certainly you were.

We're going to see customers.

Yes.

Seems to be this.

Knowledge meant worldwide.

We need to get going fast on it.

<unk> storage and so I'd love to hear your kind of commentary around.

What's maybe changed in the market.

It was.

Our customers are thinking about this now.

Yes, Thank you very much James and.

And thanks for the opportunity to tell what we'd seen.

It is true.

There is a significant demand building up.

Everywhere in the World. The fact that we expand into do we just spend it to a new market in Taiwan.

We got record year orders on every single of our three business line.

And we are not even counting on an addition of regulation or any subsidies that might come from.

The infrastructure, bill or triple B or any other new regulation in other part of the world we have seen out of the United Nations.

Any chance conference there.

A very strong commitment for example from India.

They they are announcing a substantial amount of energy storage going to that market.

They are expanding their their regulation where every.

Renewable projects should have energy story associated with it so we're looking at that market.

It is the fact that we are expanding in our three regions.

Yes, we see a significant worldwide adoption of that technology and understanding that is impossible to decarbonize. The plan Ed just would renewables that we need and then you start X smart solutions with digital optimization on <unk>.

Of that.

And then maybe a follow up here.

Of a housekeeping item, but the contract manufacturing.

Rollout of additional facilities when should we expect to see some of those come online.

What you've been doing in Vietnam.

Somewhat the distributors the budget.

Yes, yes, thanks for that question James Yes.

Just goes exactly on.

Our strategy direction.

We already have selected <unk>.

Contract manufacturing in Europe, and in the U S. We are negotiating those terms.

That.

We'll expand and give us flexibility.

So our capacity to deliver products to those regions or <unk>.

Between regions and Anne.

He has significantly reduced our exposure.

Two cheered men's or any logistic delays.

Also it will allows us eventually if there's some elements of local content that is being require it will give us the flexibility and the optionality to do that so we're moving into exactly in that direction and he's very very much our strategy.

And as those come on early calendar 'twenty two.

Yeah.

That that might be.

<unk> up and running by the end of 2022, perhaps the first half of 2023, yes.

Okay got it thanks Bill.

Thank you.

Thank you. Our next question comes from Julien Dumoulin.

Smith from Bank of America. Your line is open.

Yeah.

Hey, good morning team congratulations indeed again.

Thanks for the time, just a follow up here just thinking through through 'twenty two.

How are you thinking about the incremental or the degree to which Hazelwood for instance is an incremental project or what have you versus how you were thinking about things through the course of the year and really if you can try to quantify some of the minimum <unk>.

Mitigating factors when you alluded to logistics and trying to contract. This ahead of time et cetera, you don't.

Order of magnitude.

How much could that help offset some of the impacts here again trying to understand some of the puts and takes maybe a degree of conservatism are reflected in the numbers here.

Yes, Thank you very much Julian and good morning again, thanks for your kind words.

So happy that you are here with us.

And following our story and our success.

Yes.

I mean, what we have seen in the Haynesville would cause.

Contract and project. It is exactly what we wanted when we wanted to do around the world.

Is is it's a very significant customer.

That is understanding our technology is taking advantage of it is entry into a market that they they see from rising and financially attractive and by having this.

Fluids IQ platform on top of that with <unk>.

Revenue sharing type of potential it really really brings.

Value to not just to the customer, but our offering and our ecosystem concept.

On the on the shipping delays and yes, we have taken a short term measures and long term measures that I discussed about the long term ones, which is really the full regionalisation of our supply chain contract manufacturing and logistics.

The short term, yes, we are talking to the top tier freed liners to up to secured capacity and to have a very very good scalable that is usually a few a few months ahead of us.

On our specific numbers.

We'll allow Daniel who will give us more color about what we can say is that we've seen in established Asian, boating prizes and reliability.

Yes, let me come back to the Haynesville, what item monal already highlighted and let me highlight again the tremendous when we're really able to sell off.

All three items of our ecosystem and therefore as Sumit remember Julien from our discussion that we have been very conservative in regards how we look at the performance contracting side and we see tremendous upside on the digital side of the business.

This contract.

The products on the services side are basically in line with what we have contemplated in our business plans and we're also quite proud of that that we have achieved that.

Excellent guys. Thank you and just if I can follow up.

Nuance here you talked about some project delays getting pushed from 'twenty one to 'twenty. Two you provided this this calendar year approximate percentage of revenue, but presumably as we think about <unk> 22, more specifically rather than the generic number that you guys provided here in theory, the first half should be stronger than the percent of revenues that you guys talked about here on sort of.

The generic go forward basis, right I, just wanted to sort of clarify the bridge 'twenty one to 'twenty two versus this sort of ongoing guidance.

Alright, Julian so.

Our seasonality is stance was the typical 70% in the second half.

Also the covered and the.

And the statement before we certainly have us this delay slightly stronger revenue than the normal seasonality in H, one, but it's not to the level that we would see that H, one is becoming stronger NH towards so certainly there is some some higher number than the typical 30%, but not up to a level of 50%.

Omar.

Got it alright excellent I will leave it there guys. Thank you so much cheers.

Thank you Julien.

We have a question from Brian Lee with Goldman Sachs. Your line is open.

Hey, guys. Thanks for taking the questions good morning.

Couple.

Sort of a modeling related ones if I could.

If I calculate it right I think the revenue push out was about $120 million.

In that ballpark is that is that fair and how many projects were impacted and you mentioned seeing that's all getting recognized in the first half of fiscal 'twenty two.

What's kind of the cadence you're expecting between Q1 and Q2 dollars 50, 50 or are we going to see more of that revenue rec.

On the push outs in one particular quarter versus another.

Thank you. Thank you, Brian and again, thanks for good morning, and thanks for your good words.

And on the specifics I will pass.

Dan is to give us more color on that on your question right Hey, Brian Good morning.

In regards to the push out basically.

Youre right that hasnt been that push out from Q4 into Q1 or the first half of fiscal year.

22, and I think the number which you mentioned are somewhere in the ballpark range. We would expect a larger portion of that to be recovered in Q2, and probably somewhere in the range of.

30% to 40% of that in Q1 fiscal year 'twenty two.

Great. That's super helpful color and then just a second one and I'll pass it on.

Nice backlog growth here I think the last quarter, you guys and Jude had mentioned $1 3 billion now you're at one 7 billion contracted backlog.

I know you gave it on a volume basis any sense a.

Rough ballpark, what the mix is of that $1 7 billion and on a dollar basis between.

Energy storage products.

<unk> digital and then I guess just in that context.

It seems like the revenue guide one one to one three given given the backlog at 107% it would be supportive of higher so just wondering if you could.

Remind us how you define backlog and kind of comment a bit on the mix to give us some context, there as well thanks guys.

Sure, Brian So out of the $1 $7 billion, we have approximately $1 3 billion on the product side and then the remainder is basically on the recurring side of the business that means on the services as well as of the of the digital side. So in that regard when you think about the guidance.

One one to $1 3 billion.

We also stated in our prepared remarks that we're certainly still looking also about H two potential delays there and therefore, we have to put out the guidance of one 1% to $1 3 billion based on what we're seeing in the backlog.

Okay, and just last one to clarify on the non storage product portion of the backlog that 400 billion. What's the average duration, it's not 12 months backlog its backlog that you know.

Represents sort of forward two to five year revenue could you.

Remind us what what you characterized that as on the services and digital.

Right.

Typical as it is a mixture between the service on the digital side Fund services, we're seeing somewhere 10 to 12 years on on the digital side somewhere in the range of three to five years. So in that regard.

<unk>.

This revenue was up two audits backlog covers up to 12 years, certainly it was a bit more.

Forward loaded.

Pattern due to the digital side of the mix.

If you allow me.

To elaborate a little bit on that.

There are two elements here that arent very significant the first one is that.

We got a 100% attachment rate on services in the EMEA region, which is fantastic overall, almost 75%, 74% attachment rate overall, which is also very very high high number so it brings.

And Andy Ratifies.

The confidence that we see in front of our customers that the whole package the whole ecosystem that we are offering in the three business lines. It makes a lot of sense for them and brings value to the fact that the hazelwood probably that has a 20 year service contract is that is a testament of.

Everybody that we are creating and providing to them.

Alright, that's great I'll pass it on I will also echo everyone else's. Congrats thanks guys.

Thank you very much Brian.

We have a question from Stephen Byrd with Morgan Stanley. Your line is open.

Yes.

Oh, Hi, this is <unk> on for Stephen Byrd. Thanks, So much for taking my question and congrats on the IPO.

I was wondering if I could just touch on influence on Q could you give an update on where things stand in the development pipeline for the next set of software apps and any indications and initial customer conversations as to what the interest level and demand might be for the next round of software.

Thank you very much.

Good morning, David.

I would pass through C. Yet to give us more color on what is happening with affluence IQ platform, but overall very excited and very positive.

Very good feedback from our customers.

Sure. Thank you.

So just a little bit more color in terms of flow and thank you.

So we are continuing to see strong demand in the markets that we have a presence.

The national interest in the market in Australia, where we own about 20% of renewable share.

We expect to continue to grow in that market.

Beforehand, as being pretty strong for us we expect to continue to grow.

But unfortunately, what we saw in the recent Texas climate environment. The reason I say unfortunate because theres a lot of pump.

Public sacrifices being made so our software is going to be a centerpiece in that market do a ramping up development of our ERCOT application.

To be released this year, we're seeing a lot of volatility in that market resembling what we see in the Australian market absence of a centralized capacity team.

The ERCOT market entry is top of the priority for us.

That's been heavily in the software development application to support power market optimization with Colin Thank you in the ERCOT market.

To your point as we kind of talked about during our analyst day as well the goal here.

Further kind of develop applications that go beyond tower market that is addressing dispatch applications for vertically integrated utilities, where we don't see a power market as being.

We don't see a presence of power markets.

We're also thinking about mid term portfolio management applications long term investment applications. So all of that will be part of the business plan and the product development in fiscal year 'twenty two.

With an aim towards commercialization in fiscal year 'twenty three.

We are on track, they're making a lot of progress.

<unk> and the team and talent.

To support us in that vision of where things are shaping up.

Okay.

That's really great color I appreciate that and maybe just one follow up on the demand side of things I was just wondering if you could give some color on geographically.

As the backlog split.

The strongest where you're seeing the strongest demand in the different countries that you're operating in maybe heading into 2022.

Thanks.

Just to clarify David on the fluids, the IQ platform overall.

Oh I was thinking more overall in terms of the energy storage product.

Portfolio overall beyond just <unk>.

Yeah.

To be honest, we are seeing demand.

Picking up.

All markets. The fact that we enter into Taiwan. The fact that we have to record that.

Lodges.

The largest project in Europe.

That we keep growing very fast in the California market with it.

Fluence IQ so we have you.

Examples.

That.

In our contracts being awarded in all three regions with record levels.

Our levels and in all of them so.

Yeah.

It is a totally synchronized.

Growth trajectory for all three regions, which is very encouraging.

Okay.

That's great to hear thanks, so much and congrats again.

Thank you very much David.

Thank you our last question comes from Tom Curran with Seaport Research. Your line is open.

Okay.

Yeah.

Yeah.

Tom Please check your mute button.

Yeah.

Sorry.

Good morning, and to quote Bruce Willis and Diehard welcome to the party.

Yeah.

I'm curious about how much visibility and certainty you have on your role within Aes's renewable strategy so from <unk>.

2021 through 2025, we understand the Aes is planning to add.

Four gigawatts per annum of solar capacity.

Tonnage of that do you expect to include storage and and given that represents assured locked in demand for fluids.

How are you modeling goes orders internally is there an annual floor for Aes orders that we can assume.

Yes.

As you know.

Thank you. Thank you very much and good morning.

Tom.

And thanks for your kind words.

We're very excited about this new new new chapter in our.

History, now being a public company.

Yes indeed.

You all know Aes.

As a shareholder.

One of the founders and I thank them.

Along with Siemens too.

To establish this JV and.

And have that vision.

We're the market, where we'll be going and they may prove proof to beat to be true to be right on their decision and so we are very very happy and very excited and thankful for that.

Yeah on them.

And on the specific.

Pipeline.

<unk> has been.

Upgrading.

Their pipeline and their annual commitment.

We have Ah.

Very strong influence conversation communication with them.

This is not new it has been therefore for years.

So we.

We go into.

Hand to hand with them.

We expect this 100% of whatever they are including are presented there including their own.

Projects and expansion, so we will be with them, we would be providing.

Our smart solutions services and digital affluence Iq.

Along with them.

We're very excited that as part of our project and MRO.

Our plans as part of our business plan and and the fact that they are increasing their own numbers is is is that.

It's a tailwind for us.

And Meanwhile, we can assume that.

Whatever percentage of that.

New solar capacity there'll be building.

Yet theyre going to include storage for that.

You'll be winning 100% that that won't necessarily go to fluids.

Yes, yes, that's true.

And then if I could just squeezing one more follow up before we run out of time here.

Oh.

Where are you expecting the energy storage products divisions, adjusted gross margin to exit fiscal 2022.

Okay.

Dennis you would like to take that one right. So.

Basically in line with what we have data in our model during the year.

IPO process, you can take that as a proxy.

Great So still on track for that.

Yes.

Thank you for taking my questions.

Thank you very much Tom.

Yes.

There are no other questions in the queue I'd like to turn the call back to <unk> for closing remarks.

Thank you very much operator.

So everyone in all our I would like to thank again and I did it at the beginning of my.

My my pitch.

And my words.

Again, I will like to expand our seniors here. Thank you.

Entire fluids team.

They have been extremely passionate strong committed they have shown strength and resilience.

Because all the Covid pandemic. So thank you everyone, thanks to our customers and investors.

Analyst that had they made this possible.

And we are so so happy that.

<unk>.

Given all the circumstances.

And the headwinds, we keep Brian we keep beating our own records and expanding it and truly changing the way that we power our world for a more sustainable future.

Thanks, everyone.

This concludes today's conference call. Thank you for participating you may now disconnect.