Global battery storage system integrator Fluence grew revenues 78% and doubled its gross profit margin in October-December 2022, its first financial quarter under the helm of new CEO Julian Nebreda.
The company’s first quarter of its financial 2023 year – which runs from 1 October, 2022, to 30 September, 2023 – was the first period with Nebreda as CEO, having replaced Manuel Perez Dubuc at the end of the company’s fourth quarter 2022.
Revenue for Q1 2023 was US$310 million, up 78%, while GAAP gross profit margin increase to 3.9% versus 2% the previous quarter. This was a substantial improvement on the previous Q1’s -30%, with the company attributing the difference to the absence of an adjustment for Q1 2023 which was made during Q1 2022 related to Covid-19 impacts.
Fluence is the largest battery storage system integrator globally according to IHS Markit but has increasingly been moving into digital energy asset optimisation covering all renewables.
Including “…previously disclosed settlement of liquidated damages recovered from a supplier during the quarter,” the gross profit margin for Q1 2023 increase to 4.7%. Including that settlement, adjusted EBITDA was -US$25.5 million.
The company is guiding for revenues in financial year 2023 of between US$1.4 billion and US$1.7 billion and expects to be EBITDA-breakeven in 2024. Its total backlog reached US$2.7 billion as of the end of calendar year 2022/Q1 2023.
The path to profitability was said to be the key goal of new CEO Nebreda by Evercore ISI Research’s senior research analyst James West in an interview with Energy-Storage.news in October, with Fluence all but confirming this in its response to our request for comment at the time.
This would entail being more selective with projects pursued while still maintaining strong growth. Having said that, the growth was still higher than the same quarter last year (50%) but lower than Q2 2023’s 250% increase, for example.
Perhaps it should come as no surprise that the company has been relatively quiet on project announcements since Nebreda took over, with only one major new deal being a 250MW Grid Booster unit for German TSO TransnetBW.
Commenting on the quarter, Nebreda said “We delivered a strong quarter highlighted by our robust order intake complemented by our improvements in gross margin. We continue to see growing demand for our solutions and have improved our visibility in our supply chain that gives us the confidence necessary to raise our financial guidance for fiscal 2023.”
“Furthermore, we are seeing early signs of incremental activity from our customers in the United States as a result of the Inflation Reduction Act that we believe will start to materialize in the second half of the year.”
In an interview with in August, senior director of manufacturing for Fluence Peter Silveira told Energy-Storage.news that the Act would accelerate efforts to move battery cell production closer to the US, a prediction shown in figures which this site revealed a few months later.
A month later, head of commercial Kiran Kumaraswamy described the Act to Energy-Storage.news as “…10 years of certainty that we’ve developed for this entire marketplace.”
See all Energy-Storage.news’ coverage of Fluence here.
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