Key Points
- Q3 revenue of $483.3 million was down 10% year over year.
- Adjusted EBITDA turned positive at $15.6 million, up significantly from a negative $27.5 million last year.
- Backlog reached a robust $4.5 billion, with a record $1.3 billion in quarterly orders.
Energy storage solutions provider Fluence Energy (FLNC 4.85%) reported fiscal 2024 third-quarter results on Wednesday that showed substantial profit improvements and a record increase in backlog and order intake. Revenue was $483.3 million, down from $536.4 million in the same quarter last year.
Despite the revenue drop (attributed to product delivery timing), the company achieved a net income of $1.1 million, showing a turnaround from a net loss of $35 million the prior year. Overall, the quarter showed improvements in profitability as well as strong market demand for Fluence products.
| Metric | Q3 2024 | Q3 2023 | Change (YOY) |
|---|---|---|---|
| Revenue | $483.3 million | $536.4 million | (10%) |
| Net Income | $1.1 million | ($35 million) | N/A |
| Adjusted EBITDA | $15.6 million | ($27.5 million) | N/A |
| Order Intake | $1.3 billion | $565 million | 130% |
| Backlog | $4.5 billion | $3.7 billion | 22% |
Understanding Fluence Energy
, an industry leader in energy storage, offers a range of solutions to enhance grid flexibility and reliability. Its products and services span energy storage systems, operational services, and digital applications. Major products include Gridstack, Sunstack, Edgestack, and the newly introduced Gridstack Pro line. The company's success hinges on its ability to capitalize on growing global demand for energy storage driven by the transition to and supportive governmental policies.
Recently, on expanding its product portfolio and entering strategic partnerships to bolster market credibility. Critical to its success are effective delivery of new technologies, strong market demand, and seamless integration with major partners such as Siemens (SIEGY -0.83%) and AES (AES -1.05%).
Quarterly Performance and Highlights
Fluence saw a substantial increase in Adjusted EBITDA in its fiscal third quarter, reporting $15.6 million compared to a negative $27.5 million in 2023's Q3. This marks a clear focus on profitability through cost control measures.
The company's backlog rose to $4.5 billion as of June 30, up from $3.7 billion on March 31. This growth was driven by a record $1.3 billion in new orders during the quarter, compared to $565 million in the same period last year. Such robust order intake highlights strong market demand and effective sales strategies.
Fluence's focus on addressing market demands and scaling its offerings were evident in its recent activities. The introduction of the Gridstack Pro product line came on schedule, aimed at meeting U.S. domestic content requirements by early 2025. These enhancements are aligned with federal incentives under the Inflation Reduction Act (IRA), which support the use of domestically-manufactured components.
Financially, Fluence improved its cash position to $513.3 million, reflecting positive free cash flow of $64.3 million in the first nine months of fiscal 2024. This financial strength provides a strong foundation for future strategic initiatives and operational expansions. The company also highlighted the progress of its U.S. battery module production, set to start in September 2024, which is expected to enhance supply chain efficiencies and align with regulatory incentives.
Given the quarter's 130% increase in order intake and 22% rise in backlog, it's clear that market demand remains strong. The successful management of partnerships and product innovation ensures Fluence is well-equipped to meet this demand, despite potential delays in revenue realization.
Looking Ahead
Adjusted revenue guidance for the full fiscal year has been lowered to a range of $2.7 billion to $2.8 billion, from the earlier $2.7 billion to $3.3 billion. The change reflects signed contracts for which the majority of the associated revenue is now expected to be realized in fiscal 2025. Adjusted EBITDA guidance was adjusted to $55 million to $65 million (the previous range was $50 million to $80 million). The company also raised its annual recurring revenue target to approximately $100 million from $80 million, indicating confidence in sustainable growth.
Management's outlook for the upcoming quarters remains cautiously optimistic. The narrowed full-year revenue guidance and raised adjusted EBITDA projections reflect a balanced perspective, recognizing both potential market opportunities and execution challenges. Investors should keep an eye on the company's ability to manage order deliveries and capitalize on the substantial backlog.
