Fluence Corp Ltd (EMFGF) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic …

• Revenue: $30.3 million through Q3 2024, 28% lower than the same period in 2023.

• Core Business Revenue Growth: Increased by $2.9 million or 11% excluding Ivory Coast impact.

• SPS and Recurring Revenue: $29.1 million, 13% higher than the same period last year.

• Gross Margin: Increased to 31.8%, up 5.5% from the same period in 2023.

• Industrial Water and Reuse Revenue Growth: $1.8 million or 17% through the first three quarters.

• Industrial Wastewater and Biogas Revenue Growth: $0.7 million or 15% with a backlog of $12.8 million.

• Municipal Water and Wastewater North America Revenue Growth: 44% year-to-date in 2024.

• SG&A and R&D Cost Savings: $3.1 million year-to-date, 20% lower than the same period last year.

• EBITDA Loss: $5.1 million year-to-date.

• Revised Revenue Guidance: $50 million to $60 million with an EBITDA loss of $3.5 million to $4.5 million.

• Cash Position: $4.9 million with $7.5 million in short- and long-term deposits.

• Operating Cash Flow: Negative $3.5 million in Q3, expected to be positive in the second half of 2024.

• Debt Repayment: $17.7 million repaid year-to-date, replaced Upwell facility with a $20 million revolving facility.

• Sales Pipeline Growth: 88% higher than a year ago.

• Backlog: Over $100 million, with $70 million expected to convert to revenue in the next 12 months.

Release Date: October 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Fluence Corp Ltd (EMFGF) has seen strong growth in its core business units, particularly in industrial water and reuse, and industrial wastewater and biogas, with revenue growth of 17% and 15% respectively.

• The company’s shift in focus to SPS and recurring revenue products and services has resulted in improved gross margins, increasing to 31.8%, up 5.5% from the same period in 2023.

• Fluence Corp Ltd (EMFGF) has significantly reduced SG&A and R&D costs, realizing $3.1 million in cost savings year-to-date, which is 20% lower than the same period last year.

• The company has repaid $17.7 million of debt year-to-date and replaced the Upwell facility with a more favorable revolving facility, providing considerable interest savings and operating flexibility.

• Fluence Corp Ltd (EMFGF) has a strong sales pipeline, now 88% higher than a year ago, and a backlog expected to convert to revenue in the next 12 months sitting at over $70 million, 39% higher than at the beginning of the year.

• The company’s financial performance has been negatively impacted by project delays, particularly the Ivory Coast addendum, which has pushed expected 2024 revenue into 2025.

• Revenue through Q3 of 2024 was $30.3 million, 28% lower than the same period in 2023, primarily due to the reduction in revenue from the Ivory Coast project.

• Fluence Corp Ltd (EMFGF) has experienced a year-to-date EBITDA loss of $5.1 million, largely due to delays in the Ivory Coast project and ongoing softness in the China market.

• Operating cash flow in Q3 was negative $3.5 million, underperforming compared to forecasts due to delays in the Ivory Coast project and collection delays in other regions.

• The company has revised its guidance downward to $50 million to $60 million of revenue and an EBITDA loss of $3.5 million to $4.5 million, reflecting the impact of project delays and challenges in the China market.

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