Q2 2025 Bloom Energy Corp Earnings Call
Thank you for standing by. My name is Greg, and I will be your conference operator. Today, at this time, I would like to welcome everyone to today's Bloom Energy Q2 2025 Financial Results Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, press star 1 again. Thank you.
I would now like to turn the call over to Michael Tierney head of investor relations Michael.
Thank you and good afternoon, everybody. Thank you for joining us for Bloom Energy. Second quarter 2025 earnings call to supplement. This conference call we furnished, our second quarter 2025 earnings press release with the SEC on form a k and have posted it along with supplemental financial information that we will reference throughout this call to our investor relations website.
During this conference call Bonar prepared remarks and an answers to your questions. We may make forward-looking statements that represent our expectations regarding future events and our future financial performance.
These include statements about the company's business results. Products, new markets, strategy, Financial positions, liquidity, and full year, outlook for 2025,
These statements are predictions based upon our expectations estimates and assumptions. However as these statements deal with future events, they are subject to numerous known and unknown risks and uncertainties as discussed. In detail in our documents filed, with the SEC, including our most recently filed forms, 10K, and 10q.
We assume no obligation to revise any forward-looking statement made on today's call.
During this call and in our second quarter, 2025 earnings press release. We refer to gaap and non-gaap financial measures. The non-gaap financial measures are not prepared in accordance with us. Generally accepted accounting principles and are in addition to and not a substitute for or Superior to measures of financial performance prepared in accordance with gaps. A Reconciliation between the gaap. And non-gaap financial measures is included. In our second quarter, 2025 earnings press release available on our investor relations website. Joining me on the call today, are KR Street, R founder, chairman and chief executive officer and machek kazinsky are acting Principal Financial Officer, KR, will begin with an overview of our progress and then machek will review financial highlights for the
Order after our prepared remarks, we will have time to take your questions.
I will now turn the call over to KR.
Good afternoon and thank you for joining us today. Bloom had an excellent quarter, the highest revenue and most profitable second quarter in our 24-year history.
when the company was founded and again, in our IPO prospectus 7 years ago,
we painted a bold vision.
To become the power provider of choice for the digital world.
Over the last couple of calls.
Surging.
Now, there is tangible evidence.
6 months ago, we announced a strategic partnership with a major US utility company.
American Electric Power.
Yesterday AEP announced that Amazon web services and Co logics.
Both data center operators are deploying Bloom systems in Ohio.
A CEO Bill Furman noted that demand for power is I quote growing at a pace. I haven't seen in my 45 year career.
But he notes, interconnection agreements. Take 5 to 7 years in many US states.
Even for AEP, the largest owner of electric transmission systems in the US.
To avoid such a long delay, Bill also added that AEP is giving its customers solutions so they can come online quicker.
Fuel cells will get AWS and core Logics up and running quickly.
Indeed, AI companies. Need power at AI speed.
Waiting 5 to 7 years is untenable.
And Bloom moves at a high speed.
Just last week. For instance, we announced our partnership with Oracle to power, their AI data centers.
We have committed to having power available to their First Data Center in 90 days.
Time to power.
is 1 of many value propositions Bloom brings
We are also cleaner.
More reliable and more cost-effective than alternatives.
Because our Power Systems are designed and purpose-built for data centers and other Mission critical applications.
Our installations do not require the Band-Aids that turbines and engines need to power data centers.
For example.
We don't need multiple AC to DC converters or specialized equipment to suppress harmonics.
Eliminating, these Band-Aids enable data centers, to lower costs, increase reliability, and reduce carbon footprint.
We are excited to collaborate directly with Oracle to help them. Leverage all of the benefits, the bloom platform provides
the result.
Oracle can optimize the watts to flops ratio.
Resulting in increased Revenue, growth and margins.
Commercial and Industrial customers are also increasingly valuing the velocity with which we operate.
Quantum computer, for instance, builds the AI servers that are used in the AI data centers.
Their demand growth is highly correlated with AI data center, demand growth.
We informed you about our rapid deployment at their Fremont facility last year.
Happy with our execution, they ordered an islanded load following micro grid which we installed in Q2.
We expect new orders from other AI Hardware ecosystem players soon.
Complimenting demand we see from our more traditional commercial and Industrial customers.
Bloom.
Is clearly delivering for customers.
on our strong fundamentals mean
We are also delivering for you. Our investors.
This quarter.
We had record profits and operating margin.
The third quarter in a row that we are hearing similar marks.
Our service business has been profitable for 6, quarters in a row.
And for the first time ever, we had double digit percentage margins.
Evidence of our increased reliability.
And we refinanced our debt notes that were previously due in 2025.
Providing increased optionality to finance growth.
1 other highlight for the quarter.
Us lawmakers. And the administration restored, tax, credit benefits to companies who install our fuel cell systems.
Our country's leaders recognize that base load power.
AI race.
Reassuring factories creating jobs and growing the economy.
The tax credit will be another Tailwind as we continue to grow our business.
Let me close by reflecting on our position.
Bloom is in a strong place.
In the 12 years since we began shipping product.
We have generated over 40, terawatt hours of electricity.
We have deployed more than 22,000 energy servers.
Our power generators totaling well over a million fuel cell stacks.
2 of those million-plus fuel cell stacks.
Has a unique digital twin.
And over our history.
We have collected over 4.5 trillion data points from the field.
Now.
Thanks to AI.
We are unlocking new ways to improve our performance.
Reduce costs and deliver more value to our customers.
We are operating at scale.
And our scaling with purpose.
Now, our robust product has robust demand.
We will double our Factory capacity from 1 gigawatt a year now.
To 2 gigawatts a year by the end of next year.
Our mission has never felt more urgent.
And we are ready.
Alternative to machek now.
And I look forward to answering your questions.
Thank you KR. I'm good afternoon. Everyone as KR mentioned selection of our Fuel Cell Energy service by Oracle to power their cloud. Computing is another proof point for how well, our technology suited on-site highly reliable and variable load following power, I am thrilled to see further adoption of a fuel cell technology by leaders in the AI space.
Beyond that. I'm going to limit my comments to our Q2 financial performance.
A consistent team at Bloom has been our Relentless focus on our product, cost reduction and discipline to run all other spend to drive profitable growth.
The first half of fiscal, 2025 is evidence of those efforts.
Bitcoin important commercial execution was strong.
All of this yielded, a strong second quarter and first half of for us.
Highlights included record, second quarter, revenue and gross margin. And our sixth consecutive quarter profitability in our service business.
As a reminder, I will focus my discussion on non-gaap adjusted cost and profitability Metric.
For a reconciliation of GAAP to non-GAAP, please see our press release and the supplemental deck on our website.
Revenue for the quarter was 401 million up 19.5% year-over-year.
In was 28.2%.
650 basis points higher than the 21.8%, gross margin in Q2 of 2024 attributable to mix and level loaded Manufacturing.
As we said last quarter, we took advantage of our balance sheet and our visibility into customer demand to maximize efficiency and level load. Our Factory during the first half of the year.
we expect to work down this inventory, as our shipment of product accelerate in the second half of fiscal 2025,
Our operating income was 28.6 Million versus 3.2 million loss in Q2 last year.
Adjusted ebita was 41.2 Million versus 10.224% versus a loss of 6 cents. A year ago. Again, these are all non-gaap results.
With this quarter, we have now had a profitable service business for 6 consecutive quarters. We expect this trend to continue to together with margin Improvement.
Finally, during the second quarter, we refinanced 113 million of our convertible note, that was due in August 2025 to provide more optionality to fund future growth.
It was exchanged into our existing 2029, convertible note.
Turning to the full year, we are reiterating our 2025 guidance.
As a reminder, we expect 2025 revenue of 1.65 to 1.85 billion.
Non-GAAP gross margin of approximately 29% and non-GAAP operating income of $135 million to $165 million.
Same level that you saw in fiscal 2024.
We also expect capex to be around the same level as fiscal 2024.
as we have mentioned, before we expect to see similar Revenue seasonality with roughly a 4060 first half second half split
We are committed to maintaining strong fiscal discipline as we continue to scale.
To conclude, we delivered record Q2 Financial results and our reiterating our 2025 guidance.
Our fuel cell solution was built for this moment. When on-site, scalable reliable low following power is required in a matter of months.
We are well positioned to meet the moment.
Operator. We are now happy to take questions.
Thank you very much. And at this time, I would like to remind everyone in order to ask a question, press star, then the number 1 on your telephone keypad. Once again star 1.
And we will pause. Just a moment to compile the Q&A roster.
And it looks like our first question comes from the line of David araro with Morgan Stanley, David, please go ahead.
Oh hi, thanks so much. I appreciate it.
Um, I'm wondering if you could...
Hi. I'm wondering if you could elaborate on your recent success with hyperscalers. How are you seeing Bloom servers being used? Are they the exclusive power source for these AI data centers? Are these large-scale deployments, and broadly with that customer set, could you see this Oracle partnership potentially act as an accelerant and spur more additional deals?
Uh, David first, uh, welcome to the family of analysts that are covering us, uh, nice to have you on. And, uh, yes, look, the Oracle deal.
Is the first time we as a company.
We are directly interacting with the hyperscaler as our customer.
and here, um, you yes, it is a uh,
It falls in the size class of the ai, ai data centers and it'll be 1 single.
Uh 1 single data center that the first project will power and we're working with them on many other projects, the sign and here again it's a islanded power.
It is not connected to the grid.
And so we carry the primary and the secondary load for this particular customer. So it is significant. It is exactly what we built this, you know, our architecture for, they will be able to use it.
To a lot of capability Bloom is able to offer and it offers an opportunity.
for us to get started there and keep
improving the number of,
Capable attributes that bloom brings.
Flowing all the way into the data center and thereby optimizing both Capital cost and operating cost for the customer.
So we see this as extremely significant, and we are the primary source. It is load following.
So it'll prove that we can load follow at Large Scale. It'll prove that we can operate at large scale and most importantly
AI speed. It'll prove that we can install stamp sizes.
at that level within the 90 days that we have, uh, told you we would do, um,
you know, our opening remarks
Excellent. Yeah, thanks for that color. Um, certainly quite an accomplishment and you know it may be following on that. What what gives you the confidence here now to double your production capacity? Um are you do you also have kind of an inflection in visibility and does the backlog give you confidence there um or is it the you know, under underlying fundamentals of the industry which uh which have certainly been indicating strong demand here?
Thank you, David. Um yes we have always stated when we have been asked
That we will never get past our headlights. So uh, we have told you in the past,
That in the last two quarters.
We have seen strong commercial activity.
We have told you that, uh, it is very diverse.
And uh, it is high quality at this point in time.
when we look at that pipeline,
It has gotten us to a level of confidence.
Feel like this is the right thing to do. That's why we are expanding the capacity number 1, right. Number 2.
This should be fairly simple and
it should be mind-boggling for all of us and we shouldn't get numb to this fact.
The large hyperscalers put together.
Are going to spend more than a billion dollars a day on capex.
Weekday and weekend. It's more than 500 billion dollars are going to be spent just in this calendar year by those people.
So, you take that number of $500 billion and you say,
an order of magnitude down at least, 50 billion dollars of power Capital Equipment needs to be spent
to Electrify that additional demand, that's going to come on.
And you take that and you do a simple math and say more than 1 sizable, nuclear power plants worth of Base load. Is what what what is needed every month?
And we all know what can be done by the existing Legacy electric infrastructure in this country. It cannot move at a high speed.
We are an obvious solution.
It is self-evident to me that our demand is going to be high.
And it would be wrong for us, not to go and invest that money because we have that level of confidence, not just from what we are seeing in the pipeline.
But when we look at this kind of investment,
And we look at, where is the tail for this? This is a secular Trend. It is not a 1 year or a 2 year Trend. You put that together. Absolutely. We should be building these factories. And the 2 gigawatt is a start to multi- gigawatts. We will keep building over time. Absolute confidence. Thank you.
Excellent, thank you so much for taking my questions.
Thanks David.
And our next question comes from the line of Mark Strauss uh with JP Morgan Mark. Please go ahead.
Hey, this is Michael on from Mark uh I guess just to follow up on that. Last question, how long do you expect it to take to build out this capacity? And I guess what's the timeline in terms of when you expect to exceed the current 1 gigawatt of capacity?
Thanks.
so,
Look, uh, I think uh, the exact timelines, uh, are not something that we would, we would be discussing at this point in time.
but here is the point, Michael
Uh, we pride ourselves on moving at a high speed.
We are going to make sure that we have the capacity.
All of this here and all of next year.
To meet the kind of timelines.
That others can can't or definitely what our customers want.
And uh, so the capacity we built and how quickly we get that on we you know we were built for this moment it is not like you can take any Factory of any other Legacy technology.
And expand capacity at this rate.
It takes deliberate thought process to have said, I need the supply chain ready? I need the manufacturing ready, I need the equipment, ready?
We can move on a dime.
We can increase capacity in this month.
And we can, in most cases, I would venture to guess, provide that kind of additional capacity faster than a data center can stand up their own data center.
So, this is where we are today. This is where we'll continue to be through 2026 and that is why we're doing this expansion plan.
Okay. Great, maybe if I could just throw 1 more and is there any estimate on how much this this will cost or or how should we expect you to to fund the expansion?
So we are funded for what we you know we're well funded for what we need to do uh in terms of going to 2 gigawatts. Yeah around ballpark numbers think about a hundred million dollars is how you should be thinking about this and it'll it'll it'll it'll come uh spread over quarters and we have enough uh you know we have well funded for it.
All right. Thank you, Mark. And our next question comes from the line of Manav Gupta, with UBS. So now, please go ahead.
To focus a little bit on the Improvement. We are seeing in the operating margin. I mean, you are at already about 7.1 and if you look at, you know, your guide for this year, it's it's close to like 8.5. If I take the midpoint of it, so making excellent progress on the operating margins will help us understand what's driving it. And then when we look at 2026 or 27, um would the target be to get to double digit? Operating margin levels. Also
On on service.
So so operating margin. Yeah, so that's a great question, look.
uh as you as you clearly understand and you are looking at the numbers and you've been predicting, you know, you've been predicting our models, what you're seeing is tremendous, fiscal discipline,
Right? So we have a finance team here that works so well with the rest of our organization.
Yen managing
Uh, how we spend?
Uh, whether it's an Opex, whether it is and how we procure, and whether and and also we have a we have a commercial team.
That's extremely good at making sure that our customers get great value, at the same time we get value for what we bring to them in terms of time to power and other issues between that combination.
And our cost reduction continuing, you should absolutely expect our operating income to keep getting better.
As we as we go forward, will it vary quarter to quarter within a year? Absolutely, that depends on mix and volume that will happen. But what has helped us this year is we are more level loaded by choice and you're seeing that in our inventory. Hold when you look at our cash okay you're seeing that that is a deliberate choice that we have made and we and overall for the entire year we will reap the benefits of it by level loading that factory.
Perfect, sir. Uh, we were on the a call yesterday and they said some very nice things about you and, and your scalability of your product. I'm just trying to understand, um, you can scale up that order, I think uh you doing couple of data centers through a. And as you work with them, do you continue to see more AAP B collaboration and more deployment of your product through AEP?
You know, uh I as you know, the service agreement was for 1 gigawatt.
And if you just look at the AEP numbers and look at where their demand and where that Gap is, uh, we are hopeful that working together that we can fulfill that gigawatt and think about future, you know, agreements like this very soon and, uh, we are working together. It's not just a hope. Uh, there is a pipeline and that pipeline for a is again, robust and we work with them and, uh, you'll, you'll hear more. I'm sure in the coming months.
Yeah, I would only like to say, 1 Thing concludes, the 3 quarters ago. I think asked you a question that, you know, this deep seek is happening and some data center. Providers are pulling back and you are very firm. This is a blip. Do not look at it. Things will correct very quickly and you had great vision and foresight.
Absolutely, it was a blip. Nobody's even talking about it now. So thank you.
Thank you. I appreciate that. Comment.
All right. Thanks manov. And just an update folks from this point forward in the interest of time. We ask that all callers, please limit yourselves to 1 question to allow everyone that has a question to ask it. Thanks in advance for your understanding.
And it looks like our next question comes from the line of Chris Dendrinos with RBC Capital Markets. Chris, please go ahead.
Yeah, thank you. Um, I wanted to ask about the value proposition you all you all bring and I guess maybe specifically on the combined heat power solution. I know in the past you've kind of spoken about it and it seems really appealing from an efficiency standpoint. So, I'm curious, you know, are you deploying that with Oracle here and if not, I mean what, what's kind of the interest level? And where are you at kind of in in that, um, solution process with other potential customers. Thanks.
Uh this is a very good question, Chris. And here is what we see um, in our pipeline
The interest as soon as our customers know that we can offer the CHP solution. Commercially is very high.
So, uh, most customers we are talking to today.
Their approaches. Give us this quick time to power ASAP.
And within a few months, can we come back to you and retrofit the combined heat and power?
The beauty of our solution is, we're able to offer that.
Right. It's it's like adding an app on your phone. We can add the CHP as an app.
And that flexibility, that beauty of our technology is very appealing to them. So we are seeing that not just from data center customers. But from our commercial and Industrial customers, uh, whose factories need to be air conditioned, uh, or whose factories need steam. So, we are seeing this across the board in every area and you are correct to point out from a value proposition wise, right? It is the equivalent of not needing 20% of your power in a data center.
Right. It is the equivalent of not paying for it when you have taken care of your Cooling.
With our waist with the waste heat, as opposed to putting more electricity in, that's a big deal.
Thank you.
All right. Thanks Chris.
And 1 more update, folks uh I forgot to mention before the last caller, even though we are asking you to limit yourself to 1 question, moving forward, feel free to re-enter the queue. If you do have an additional question, thank you.
And our next question comes from the line of Mahip. Mandalo, Mahip. Uh, excuse me, with Meizuo, Mahip, please go ahead.
Hi, thanks for taking the question. This is actually David Benjamin, I'm from a heap. Um, so I understand there's a robust demand um and looks like, you know, based on our guys, um, 40% first half um
It looks like you guys are on track towards the top end of the guidance. I was wondering, just the first part is like, uh, what would it take to, uh, you know, raise that that up, um, the bottom end and then, secondly are are, are there any, uh, concerns with? Um, push outs from the fourth quarter, uh, due to potentially, uh, like OTC being available next year?
Thank you.
A great question. So uh or or a 2-part question? Uh you know those nice of you to sneak in the 2 questions together. So so, so so, so let me answer the second part first, uh, David on ITC.
Uh, I should have been clearer in my prepared remarks, but let me try to be very slow. Deliberate and perfectly clear. So everybody understands this
Our customers.
Have no Gap.
From a timing perspective on ITC, they used to enjoy ITC last year through this year. They'll continue enjoying all of this year, and it'll continue from '26 all the way to '302.
Okay, there is zero Gap. There seems to be some confusion.
Among among people reading this. Yes, you're absolutely right. The BBB
Uh, reinstated ITC for fuel cells. Starting January of 2026.
Okay. However,
We have.
Secured enough volume.
Under Safe Harbor.
So our customers in 25 don't have to wait for a 26 to be to Avail of those credits and therefore there should be no penalty for any customer or no advantage to any customer to push out.
Buying or installing their systems in 2025.
Is that clear?
Okay. Now, okay, now, uh, uh, yeah, in terms of the guidance and where we are.
Uh, we have reiterated the guidance.
Where we fall in that range. Why do we give you a range? It has nothing to do with our ability to ship the systems.
It's got everything to do with if the customer is ready.
Many of these things are Greenfield.
Uh, they they they need to finish.
their Factory or they their data center on time, they need to be able to connect
Gas needs to be there and, you know, like permits need to be there. So it could easily move out couple of weeks on either side or a month or either side. Uh none of these projects are in Jeopardy of coming in or not but when we recognize Revenue will depend on those things and until we have Clarity on that, we have to give you a range.
Okay, thank you. David.
And our next question comes from the line of Chris sung, with wolf research, Chris, please go ahead.
Hey, thanks for taking my question. Um, so congrats on the Oracle deal. I was just curious since that order was expected to be delivered, within 90 days yet, there was no change in the full year. Guidance, should we assume this is already embedded? Or would you need to announce additional deals in order to achieve those targets? Thanks.
Via we have told you from the beginning of the year and we'll continue to reiterate that statement that a portion of our revenue for the year.
Would be would come from.
Deals that we booked build ship and recognize Revenue in the same year.
It's a wonderful thing.
You know, I just remember right after our IPO, it used to be 18 to 24 months on average.
To book something and then get a deal done.
Right. The pace at which business is moving.
Now, allow us to do that, uh, to shrink that cycle.
Very well, and we would be concerned about that shrunk cycle.
If those reasons lead us to believe that it's not a secular trend and it's just a seasonal move, we don't see this as a seasonal move.
and the fact that we have a secular trend,
where the pace of business, the velocity of being able to convert a deal to a booking happens, faster is all fantastic from where we sit
Thank you, Chris.
And our next question comes from the line of Desant Aulani with Jeffrey Desant. Please go ahead.
Hi, thanks for taking my question. Um, just the 1 on, I guess, in the past, you've talked about opportunities outside the US. Um,
I think you've also mentioned a Taiwan in the past, but you kind of briefly mentioned how those conversations are progressing and what opportunities you seeing outside the US.
Look, um, today I, uh, when we look at our business in general, roughly 30%.
Of that comes from International and 70% comes from domestic. Okay? And we, we expect to continue that ratio at least to the next year or so because as all, as all of, you know, and follow from what's going on, this tremendous action here in the US market
Okay. And, uh, we see that, but we truly believe in the diversity of the market. Not only are we continuing to show strength in Korea and keep that business going, we are developing new markets. I think we have mentioned to you that Taiwan, Germany, Italy, and the UK are the obvious next places we are looking at. And in all those places...
We are making progress, uh, establishing into a new market, uh, and uh, being able to get the policy makers The Regulators.
Lined up with something new to them, uh, very similar to, it was new to people in California and uh, you know, like New England when we started in the early days, uh, that process is going. Uh, but I'm very happy with the progress. We are making in those places.
All right, thank you, Dan.
And our next question comes from the line of Colin Rusch, with Oppenheimer and Company. Colin please go ahead.
Thanks so much. Um, guys, as you look out at the landscape of opportunities, you know, are there, uh, situations where you could end up being, um, you know, used as temporary power for a couple of years and then have those servers move on to to other locations and, and are you starting to see any sort of incremental demand growth for longer, cycle Industrials, and potentially chemical plants and other things?
That are um, that are looking to ramp and have, you know, power shortages, as well as the the data center opportunity. You guys talked about
Calling. That's a very good question and the answer is absolutely. Yes.
okay, and this is the reason, if you remember
Uh, we completely changed our uh, how we install our systems?
From a go and for concrete and install it on concrete to on a skid, okay? Think of this as good to go.
Okay, we can just take these units on a truck and drop it in a site.
And then move that's good from 1 location to another with ease.
And all it takes is 3 connections, the gas connection, the electric connection, and the, and the like Communications, which is Wireless.
And here is another interesting thing, right? It is even better than if you think of temporary power coming from combustion engines because you can't take a few blades.
And put it in one location, and a few other blades in another location. If you want to take 100 megawatts and break it into 5, you know, like 20 megawatts.
With our Bloom systems, the modular nature of it.
Not only can you take our units and put them in different locations, you can fragment it or aggregate it as you wish.
And, uh, so uh, it is definitely a very attractive option that we can offer. And even the hyperscalers are very interested in that because in some locations, if they're able to get power, they can easily move it to another location where they need more power.
Right. So this becomes very, very attractive in fact.
To us. This is an amazing selling point.
And are we concerned about? Will they need the power 2 years from now? Anybody who thinks
2 years is the bridge and something miraculous is going to be there. You're just, you know, you're just going to go to the next Bridge, you know, it's a bridge to a bridge. It's not a bridge to a solution and you all know that
All right. Thank you very much, Colin.
And our next question comes from the line of Sheree Elmer with btig share. Please go ahead.
Hey thanks for taking my question. Um another tax, credit question, a safe harbor aside. The Triple B does give more visibility uh and my understanding is that domestic content bonuses have actually been raised.
So my question is with the tax credit picture is set. Hopefully set. Does that put you in a position to push pricing?
Uh,
Sorry, something got cut off on this. I I'm, I'm like really sorry on our end. Can you just repeat that question. 1 more time if you don't mind sharing? Sorry sure. Um I I'm saying the Triple B crystallizes the uh tax credit picture um and I think in some cases it actually increases the benefit so does that does that give you does that level of visibility put you in a position to push pricing?
Yeah, so what happens with the BBB is there is no domestic content. Uh,
Adder.
Uh, when it comes to the ITC, right? So I think I'm answering your question if not let me know, and I'll answer it. So so so it is a flat 30%.
okay, whereas, uh, in the previous version of the bill that ended last year, but say far, but now,
Uh, our customers can avail of either 40% or 50%.
Depending on whether they are.
Uh not in a energy Community or in energy Community, if they're not in energy Community, it's 40%. If they're in energy Community, it's 50%. So from that perspective, yes, their subsidies go down a little bit but given how high, the price of electricity has gone up, uh, at 30% are attractiveness will be extremely high. And, uh, you, you also know that every year we bring down cost reductions between those 2 things. Uh, we don't see any issues with relate with relation to maintaining our margins. If that's your question.
Yeah, that's very helpful. Thanks, care.
All right. Thank you share.
So we're going to... and our next question comes from the line of Null Parks with 2 Brothers. Oh, please go ahead.
Hello, good afternoon. Um, I wonder if you could talk a bit about product development and um, maybe update us on your upcoming generation of the Blue Man energy server and what incremental benefits, um, you're anticipating from that. And uh, any comment you have on the the effect on the economics uh, for the product uh, for you would be
No. Uh, thank you very much for that question. So,
Uh, here is what is really interesting.
About the bloom platform going forward. Okay.
That Improvement that we are talking about, does not need to happen by Generations as a step function.
It is happening continuously quarter after quarter of things coming uh of new ideas.
Being robust.
Uh completely uh manufacturable and entering into production in a line. So think of
Improving as opposed to going from one model of a product to another model of a product.
And we are able to incorporate that seamlessly. So, lots of developments are continuing to happen.
And in a way, uh, if you saw earning script, we are maintaining guidance so far on our margin. Even though there can be a 4%, uh, uh, you know, like Tariff affect on our materials.
Right? All that is coming from further. Improvements coming into our product, so we don't anymore.
talk about our product in terms of generations, but in terms of
It is getting healthier and healthier as the days go by, and it's getting better and better. Why is that again? It goes back to if you look at my script.
We get real-time feedback from the digital twins.
That we have set in place.
the 4 trillion data points that come into us and how we analyze it, how we learn from it, how we improve, it gives us a unique ability that I don't think exists in the power industry other than red bloom
Where we are able to improve our product. So this is you will see this as a continuous Improvement as opposed to a step Improvement, going forward, and we bring new attributes. So, for example, CHP was a new attribute load following was a new attribute being able to operate islanded and load following was a new attribute. So we bring these attributes into the product.
Great. Thanks for the question. No.
And our next question comes from, looks like we've got another question from Chris dendrinos, with RBC Capital markets, Chris, please go ahead.
Yeah, thanks for taking the follow-up. Um, I wanted to go back to the value proposition and I think you you slightly hit on this and Collins question, but maybe just comparing y'all's solution to like a natural gas turbine, and we've seen those get deployed in in some situations. And I think, you know, could you just help us? I guess paint a better picture of where you see, your solution really being the most optimal compared to a guest or what? I mean, to me, it looks like it should always be. But there's there's certainly reasons that are driving some customers to take up a gas turbine. So just trying to get a sense of um, what those kind of driving forces, might be thanks.
Uh, Chris, I completely agree with you, but, you know, uh, nobody gets fired for buying IBM, right? So, uh, uh anyway, uh,
if you look at economics,
here is what I can tell you.
You look at the demand growth.
And you look at where numbers are going, what we heard even six months ago of 20% of data centers maybe islanded and not connected to the grid, that number is now however at 40%.
The, the amount.
Of data centers that are telling us in the surveys.
That they would use islanded power is going up when you go there.
The monolithic turbine.
Needs 1 additional monolith.
To be able to, uh, so when 1 unit is being serviced other unit is on standby, you put that together.
Compared to the blue architecture, where it's 1 Lego block.
And you compare apples and apples for a grid level. Availability of 999.
Or even a high 9's available of 5 nines or 69.
You compare that apples and apples are CapEx.
Compares.
Favorably.
Or at a minimum at parity.
With turbans.
On the other hand, those turbines have at least,
15 to 20% ages, you know like percentage points.
More fuel than they will consume.
Compared to us. So on the Opex,
This is significant win, and on top of that, we have no air pollution.
Whereas getting an air permit to put a lot of turbines. If you live in a populated area is very difficult, you're probably reading in the Press.
So you combine all those things.
A because we are easier to permit.
We remove the friction to permitting.
Unfavorably to any other alternative way of producing electricity.
All right, thank you for the follow-up. Chris
And our next question comes from the line of Sky Landon with Rothschild & Co. Redbarn, Sky. Please go ahead.
Hi thanks so much. Um, more of a cleric clarification for myself. Um, on the a
Um announcement um recently regarding the Amazon web services um and they have a company. Are you able to confirm whether those
Projects are included within the 100 megawatts or if those are additional on top of the 100s.
Uh, it is, it is part of the 100s that was in the PO and the other 900 megawatts are what what we are working. Actively on the pipeline. Thank you.
Perfect. Thanks.
Thanks, Skye.
And our final question today comes from the line of dimple gasai with Bank of America dippel. Please go ahead.
Hi, good evening. Thank you so much for taking my question. I actually have two, if that's okay. The first one is just trying to get more clarity or understanding around the Oracle deal. Is this a done deal? Is there a framework to deploy? Any KPIs that need to be met? Any color would be super helpful for us. Um, and the second question is if you can talk a little bit about your capital needs.
It's a liquidity issue in terms of funding the manufacturing expansion.
Thank you.
Um, so on the first question on the Oracle deal. Um,
We are a company that doesn't discuss earnings calls, LOI, and MOU, and things like that. Okay, this is a purchase order. We are executing, and they'll have power in a 90-day period.
Uh, in in terms of how much capacity and dollars we need, you may have joined us late. I don't want to hold everybody up on that. We have already answered that question. It'll be in the transcripts. Thank you very much. And with that last question, let me
Say that look, AI is moving faster than any technology in history.
Faster than the internet.
and of course,
...orders of magnitude faster than the electricity industry.
and,
Its demanding more.
More power.
More data centers, more urgency.
Our company bloom.
Our entire company was built for such a moment.
We are ready?
And we can move at a high speed.
The advantages of our purpose-built digital platform have never been more obvious and relevant to everybody.
And the opportunity in front of us is both massive and secular.
We are confident in our strategy.
We are confident in our execution.
And internally, we ourselves have shifted to a higher gear because we are going to blaze forward.
We thank you for your confidence in us and your continued support. We wish you a good day.
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