Energy Vault Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
NRGV$3.24+15.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001828536-24-000143
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001828536-24-000190
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 156 previous paragraphs and 164 current paragraphs.
106 unchanged; 37 reworded; 19 added; 12 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
On September 13, 2024, the Company was notified by the NYSE that it was not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company’s Common Stock was less than $1.00 over a consecutive 30 trading-day period. The notice did not result in the immediate delisting of the Company’s Common Stock from the NYSE. On November 1, 2024, the Company received written notice from the NYSE informing the Company that it had regained compliance with the bid price rule as of October 31, 2024.
Current report
In October 2024 the Company executed an equipment supply contract with a customer and in November 2024 the Company executed an offtake agreement for the Cross Trails BESS with another customer. The equipment supply contract is for a fixed price and the offtake agreement includes both fixed and variable price components. The aggregate expected future revenue from these contracts, including variable fees that the Company believes is probable, is $90.7 million. The variable revenues are forecasted by an independent third-party firm using simulation software that factors in current and projected energy market dynamics, historical and forecasted volatility, and location specific data. The Company considers the low-end simulation results to be probable.
Current report
On November 12, 2024, the Company entered into an open market sales agreement (the “Sales Agreement”) with Jefferies LLC, as sales agent (the “sales agent”), pursuant to which the Company may, from time to time, sell shares of its common stock, having an aggregate offering price of up to $50.0 million through the sales agent. The Company is not obligated to, and cannot provide any assurances that it will, make any sales of its shares under the Sales Agreement.
Current report
Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the sales agent may sell the shares by methods deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act. Subject to the terms and conditions of the Sales Agreement, the sales agent will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon the Company’s instructions. The Sales Agreement contains customary representations, warranties and agreements, indemnification rights and obligations of the parties. The Company will pay the sales agent a commission for its services as sales agent of up to 3% of the gross sales price of the shares of the Company’s common stock sold through the sales agent pursuant to the Sales Agreement.
Current report
(1) In October 2024 the Company executed an equipment supply contract and in November 2024 the Company executed an offtake contract with two different customers with aggregate expected future revenue of $90.7 million/314 MWh. Prior to executing the equipment supply agreement, the Company and the customer were operating under a limited notice to proceed with a price of $3.0 million, which has already been included in bookings for the nine months ended September 30, 2024 and in backlog as of September 30, 2024.
Current report
Revenue for the three months ended September 30, 2024 decreased by $171.0 million to $1.2 million compared to $172.2 million for the three months ended September 30, 2023 and revenue for the nine months ended September 30, 2024 decreased by $210.6 million to $12.7 million compared to $223.3 million for the nine months ended September 30, 2023.
Current report
The decrease in gross profit for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 was primarily due to a decrease in revenue from the sale of energy storage projects due to the Company’s BESS projects being in their later stages in 2024. Additionally, gross profit for the nine months ended September 30, 2024 was negatively impacted by a $1.4 million increase in warranty expenses compared to the nine months ended September 30, 2023.
Current report
The increase in gross profit margin for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 was primarily due to higher margins from the sale of energy storage products, and the introduction of higher margin operation and maintenance services and software licensing in 2024. The higher margins from the sale of energy storage products in 2024 was due to the Company’s BESS projects being in their later stages when higher margin construction activities occur, compared to 2023 when the BESS projects were in their earlier stages when lower margin equipment deliveries occur.
Current report
Sales and Marketing Expenses
Current report
Sales and marketing expenses increased by $0.2 million to $4.3 million for the three months ended September 30, 2024, compared to $4.2 million for the three months ended September 30, 2023. The increase was primarily attributable to a $0.1 million increase in personnel-related expenses and a $0.2 million increase in consulting costs. These increases were partially offset by a $0.1 million decrease in marketing and public relations costs.
Current report
Sales and marketing expenses decreased by $0.2 million to $13.4 million for the nine months ended September 30, 2024, compared to $13.6 million for the nine months ended September 30, 2023. The decrease was primarily attributable to a $0.3 million decrease in personnel-related expenses and a $0.2 million decrease in marketing and public relations costs. These decreases were partially offset by a $0.2 million increase in consulting costs.
Current report
Research and Development Expenses
Current report
Research and development expenses decreased by $9.9 million to $19.6 million for the nine months ended September 30, 2024, compared to $29.6 million for the nine months ended September 30, 2023. The decrease was primarily attributable to a $5.1 million decrease in personnel-related expenses, a $3.1 million decrease in engineering costs, and a $1.8 million decrease in software expenses. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount.
Current report
General and Administrative Expenses
Current report
General and administrative expenses decreased by $3.4 million to $48.8 million for the nine months ended September 30, 2024 compared to $52.2 million for the nine months ended September 30, 2023. The decrease was primarily attributable to a $4.5 million decrease in personnel-related expenses, a $0.9 million decrease in software expenses, and a $0.4 million decrease in consulting costs. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount. These cost decreases were partially offset by a $2.0 million increase in the provision for credit losses and a $0.3 million increase in legal and professional fees.
Current report
Depreciation and Amortization Expense
Current report
Other expense, net increased by $0.9 million to $0.9 million for the three months ended September 30, 2024 compared to $8 thousand for the three months ended September 30, 2023. The increase in other expense, net is primarily due to a $0.8 million loss due to the change in the fair value of the Company’s derivative asset - conversion option due to a decrease in the probability of the Company exercising its conversion option in DG Fuels, LLC (“DG Fuels”).
Current report
On November 12, we entered into a open market sales agreement with Jefferies LLC, as sales agent (the “sales agent”), pursuant to which we may, from time to time, sell shares of our common stock, having an aggregate offering price of up to $50.0 million through the sales agent under an “at-the-market” equity offering program. Any offer and sale of shares of our common stock under the Sales Agreement will be made pursuant to our shelf registration statement on Form S-3 (No. 333-273089), which was declared effective by the SEC on July 20, 2023, and the related prospectus supplement dated November 12, 2024 and accompanying prospectus that form a part of the registration statement.
Current report
Effective September 30, 2024, the Company has included provision (benefit) for credit losses as a non-GAAP adjustment because management does not consider this item in assessing our ongoing performance. Prior periods have been adjusted to include provision (benefit) for credit losses as a non-GAAP adjustment.
Removed paragraphs (12)
Previous report
Revenue for the three months ended June 30, 2024 decreased by $35.9 million to $3.8 million compared to $39.7 million for the three months ended June 30, 2023 and revenue for the six months ended June 30, 2024 decreased by $39.6 million to $11.5 million compared to $51.1 million for the six months ended June 30, 2023.
Previous report
Gross profit and gross profit margin for the three and six months ended June 30, 2024 and 2023 were primarily attributable to the advancement of physical progress on the Company’s BESS projects. The decrease in gross profit for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was due to a decrease in revenue due to the Company’s BESS projects being their final stages in 2024. The increase in gross profit margin for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was primarily due to higher margin construction services that were provided in 2024 for the Company’s BESS projects, compared to the transfer of lower margin equipment for the BESS projects in 2023.
Previous report
S&M
Previous report
S&M expenses was $4.9 million for both the three months ended June 30, 2024 and 2023.
Previous report
S&M expenses decreased by $0.4 million to $9.0 million for the six months ended June 30, 2024, compared to $9.4 million for the six months ended June 30, 2023. The decrease was attributable to a decrease in personnel-related expenses of $0.4 million, primarily due to a reduction in headcount.
Previous report
R&D
Previous report
R&D expenses decreased by $7.5 million to $13.9 million for the six months ended June 30, 2024, compared to $21.4 million for the six months ended June 30, 2023. The decrease was primarily attributable to a $3.7 million decrease in personnel-related expenses, a $2.6 million decrease in engineering costs, a $1.0 million decrease in software expenses, and a $0.2 million decrease in consulting costs. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount.
Previous report
G&A
Previous report
G&A expenses decreased by $4.9 million to $31.5 million for the six months ended June 30, 2024 compared to $36.4 million for the six months ended June 30, 2023. The decrease was primarily attributable to a $4.2 million decrease in personnel-related expenses and a $0.6 million decrease in software expenses. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount.
Previous report
Depreciation and Amortization
Previous report
Other expense, net decreased by $0.1 million to $22 thousand for the three months ended June 30, 2024 compared to $0.1 million for the three months ended June 30, 2023.
Previous report
In addition, should Energy Vault enter into definitive collaboration and/or joint venture agreements or engage in business combinations in the future, we may be required to seek additional financing.
Reworded paragraphs (37)
Previous wording
The following discussion and analysis provide information which Energy Vault’s management believes is relevant to an assessment and understanding of Energy Vault’s consolidated results of operations and financial condition. The discussion should be read together with our unaudited interim condensed consolidated financial statements, the respective notes thereto, and other financial information included elsewhere in this Quarterly Report. The discussion and analysis should also be read together with the audited consolidated financial statements, the respective notes thereto, and other financial information included elsewhere in the Annual Report for the year ended December 31, 2023 filed by us with the SEC on March 13, 2024. This discussion may contain forward-looking statements based upon Energy Vault’s current expectations that involve risks, uncertainties, and assumptions. Energy Vault’s actual results may differ materially from those anticipated in these forward-looking statements. You should review the section titled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and the section titled “Risk Factors,” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Quarterly Report. Energy Vault’s historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless the context otherwise requires, all references in this Quarterly Report to “we,” “our,” “us,” “the Company,” or “Energy Vault” refer to Energy Vault Holdings, Inc., a Delaware corporation, and its subsidiaries both prior to the consummation of and following the Merger (as defined below).
Current wording
The following discussion and analysis provide information which Energy Vault’s management believes is relevant to an assessment and understanding of Energy Vault’s condensed consolidated results of operations and financial condition. The discussion should be read together with our unaudited interim condensed consolidated financial statements, the respective notes thereto, and other financial information included elsewhere in this Quarterly Report. The discussion and analysis should also be read together with the audited consolidated financial statements, the respective notes thereto, and other financial information included elsewhere in the Annual Report for the year ended December 31, 2023 filed by us with the SEC on March 13, 2024. This discussion may contain forward-looking statements based upon Energy Vault’s current expectations that involve risks, uncertainties, and assumptions. Energy Vault’s actual results may differ materially from those anticipated in these forward-looking statements. You should review the section titled “Cautionary Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and the section titled “Risk Factors,” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Quarterly Report. Energy Vault’s historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless the context otherwise requires, all references in this Quarterly Report to “we,” “our,” “us,” “the Company,” or “Energy Vault” refer to Energy Vault Holdings, Inc., a Delaware corporation, and its subsidiaries both prior to the consummation of and following the Merger (as defined below).
Previous wording
In June 2024, the Company implemented a series of cost savings measures, expected to result in realized cost savings of $3.0 to $4.0 million in the second half of 2024, and $6.0 million to $8.0 million annually. During the three months ended June 30, 2024, the Company recognized reorganization costs of $1.7 million, consisting of personnel reduction costs, related to these cost saving measures.
Current wording
In June 2024, the Company implemented a series of cost savings measures, expected to result in realized cost savings of $6.0 million to $8.0 million annually. During the nine months ended September 30, 2024, the Company recognized reorganization costs of $1.7 million, consisting of personnel reduction costs, related to these cost saving measures.
Previous wording
(1) Developed pipeline is a new key operating metric that the Company began tracking during the second quarter of 2024, therefore prior period comparable figures have not been included.
Current wording
(2)Developed pipeline is a new key operating metric that the Company began tracking during the second quarter of 2024, therefore prior period comparable figures have not been included.
Previous wording
(2)The Company changed its definition of backlog during the second quarter of 2024, therefore the Company has presented the comparable amounts as of December 31, 2023 and June 30, 2023 per the new definition.
Current wording
(3)The Company changed its definition of backlog during the second quarter of 2024, therefore the Company has presented the comparable amounts as of December 31, 2023 and September 30, 2023 per the new definition.
Previous wording
Bookings represent the total aggregate contract value and total MWhs to be delivered from customer contracts signed during the period, net of the total aggregate value and total MWhs of contracts that were cancelled during the period. The aggregate contract value excludes any potential future variable payments or intellectual property (“IP”) royalties. Due to the long-term nature of our contracts, bookings are a key metric that allows us to understand and evaluate the growth of our Company and our estimated future revenue related to our customer contracts.
Current wording
Bookings represent the total aggregate contract value and total MWhs to be delivered from customer contracts signed during the period, net of the total aggregate value and total MWhs of contracts that were cancelled during the period. The aggregate contract value includes any potential future variable payments from tolling and offtake arrangements that the Company believes is probable of being realized. Probable future variable payments are forecasted by an independent third-party firm using simulation software that factors in current and projected energy market dynamics, historical and forecasted volatility, and location specific data. The Company considers the low-end simulation results to be probable. Potential future intellectual property (“IP”) royalties are not included in bookings. Due to the long-term nature of our contracts, bookings are a key metric that allows us to understand and evaluate the growth of our Company and our estimated future revenue related to our customer contracts.
Previous wording
Backlog represents contracted but unrecognized revenue from projects and services yet to be completed, unrecognized revenue or other income from IP licensing agreements, and unrecognized revenue from tolling arrangements. Backlog excludes any potential future variable payments or IP royalties. Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Effective in the second quarter of 2024, we updated our methodology for computing backlog. Under our previous methodology, our backlog was equivalent to our remaining performance obligations under GAAP. We believe our new methodology for computing backlog allows us to better evaluate the growth of our Company and estimate future revenue.
Current wording
Backlog represents contracted but unrecognized revenue from projects and services yet to be completed, unrecognized revenue or other income from IP licensing agreements, and unrecognized revenue from tolling arrangements. Backlog includes any potential future variable payments from tolling and offtake arrangements that the Company believes is probable of being realized. Probable future variable payments are forecasted by an independent third-party firm using simulation software that factors in current and projected energy market dynamics, historical and forecasted volatility, and location specific data. The Company considers the low-end simulation results to be probable. Potential future intellectual property (“IP”) royalties are not included in backlog. Backlog is a common measurement used in our industry. Our methodology for determining backlog may not, however, be comparable to the methodologies used by others. Effective in the second quarter of 2024, we updated our methodology for computing backlog. Under our previous methodology, our backlog was equivalent to our remaining performance obligations under GAAP. We believe our new methodology for computing backlog allows us to better evaluate the growth of our Company and estimate future revenue.
Previous wording
The Company generates revenue from the sale and licensing of our energy storage solutions. To date, the Company has primarily generated revenue from the sale of our BESSs and from licensing our EVx technology. In addition to these sources of revenue, in the future we expect to generate revenue from the sale of our GESSs, the sale or licensing of the Company’s software solutions, the sale of long-term service agreements to maintain customer owned energy storage systems, and through tolling arrangements in connection with energy storage systems that we intend to own and operate.
Current wording
The Company generates revenue from the sale of our energy storage solutions, the licensing of the Company’s software solutions and intellectual property, and from long-term service agreements to maintain customer owned energy systems. To date, the Company has primarily generated revenue from the sale of our BESSs and from licensing our EVx technology. In addition to these sources of revenue, in the future we expect to generate revenue from the sale of our GESSs and through tolling arrangements in connection with energy storage systems that we intend to own and operate.
Previous wording
When the Company sells a BESS, the Company recognizes revenue over time as we transfer control of our product to the customer. When the Company licenses its intellectual property, revenue is recognized at the point in time at which the customer obtains control of the licensed technology.
Current wording
When the Company sells a BESS, the Company recognizes revenue over time as we transfer control of our product to the customer. When the Company licenses its intellectual property, revenue is recognized at the point in time at which the customer obtains control of the licensed technology. When the Company licenses its software solutions or provides maintenance services, the transaction price for each contract is recognized as revenue on a straight-line basis over the term of the contract.
Previous wording
G&A expenses consist of information technology expenses, legal and professional fees, travel costs, and personnel-related expenses for our corporate, executive, finance, and other administrative functions, including expenses for professional and contract services. Personnel-related expenses consist of salaries, benefits, and stock-based compensation expense. To a lesser extent, general and administrative expenses include investor relations costs, insurance costs, rent, office expenses, and maintenance costs.
Current wording
G&A expenses consist of information technology expenses, legal and professional fees, travel costs, and personnel-related expenses for our corporate, executive, finance, and other administrative functions, including expenses for professional and contract services. Personnel-related expenses consist of salaries, benefits, and stock-based compensation expense. To a lesser extent, general and administrative expenses include investor relations costs, insurance costs, rent, office expenses, maintenance costs, and the provision for credit losses.
Previous wording
Consolidated Comparison of Three and Six Months Ended June 30, 2024 to June 30, 2023
Current wording
Consolidated Comparison of Three and Nine Months Ended September 30, 2024 to September 30, 2023
Previous wording
The Company recognized revenue for the product and service categories as follows for the three and six months ended June 30, 2024 and 2023 (amounts in thousands):
Current wording
The Company recognized revenue for the product and service categories as follows for the three and nine months ended September 30, 2024 and 2023 (amounts in thousands):
Previous wording
(1) Includes revenue from the build and transfer of energy storage systems and from the sale of spare parts for energy storage systems. Revenue from the sale of spare parts was included within “Other” in prior periods. $0.3 million in revenue from the sale of spare parts reported within the “Other” line for the three months ended March 31, 2024 has been included within “Sale of energy storage products” for the six months ended June 30, 2024.
Current wording
(1) Includes revenue from the build and transfer of energy storage systems and from the sale of spare parts for energy storage systems. Revenue from the sale of spare parts was included within “Other” in prior periods. $0.3 million in revenue from the sale of spare parts reported within the “Other” line for the three months ended March 31, 2024 has been included within “Sale of energy storage products” for the nine months ended September 30, 2024.
Previous wording
The decrease in revenue for the three and six months ended June 30, 2024 was primarily attributable to a decrease in revenue from the sale of energy storage products due to a reduction in revenue from the build and transfer of BESS projects. Partially offsetting the decrease in revenue from the sale of energy storage products was revenue from maintenance services of $0.5 million, revenue from software licensing of $0.2 million, and revenue from intellectual property licensing of $0.1 million. The revenue from providing maintenance services and software licensing are new revenue streams for the Company in 2024 and are from two of the customers that purchased BESSs. The Company began providing these services to the customers upon substantial completion of their BESSs.
Current wording
The decrease in revenue for the three and nine months ended September 30, 2024 was primarily attributable to a decrease in revenue from the sale of energy storage products due to a reduction in revenue from the build and transfer of BESS projects. Partially offsetting the decrease in revenue from the sale of energy storage products was revenue from operation and maintenance services, software licensing, and intellectual property licensing. The revenue from providing operation and maintenance services and software licensing are new revenue streams for the Company in 2024, and are from customers that previously purchased BESSs. The Company began providing these services to the customers upon substantial completion of their BESSs.
Previous wording
Revenue from three customers accounted for 46%, 30%, and 14% of total revenue for the three months ended June 30, 2024 and revenue from two customers accounted for 69% and 19% of total revenue for the six months ended June 30, 2024. Revenue from one customer accounted for 90% of total revenue for the three months ended June 30, 2023 and revenue from two customers accounted for 80% and 14% of total revenue for the six months ended June 30, 2023.
Current wording
Revenue from two customers accounted for 51% and 35% of total revenue for the three months ended September 30, 2024 and revenue from two customers accounted for 67% and 18% of total revenue for the nine months ended September 30,
Previous wording
Cost of revenue for the three months ended June 30, 2024 decreased by $33.0 million to $2.7 million compared to $35.7 million for the three months ended June 30, 2023 and cost of revenue for the six months ended June 30, 2024 decreased by $36.3 million to $8.4 million compared to $44.7 million for the six months ended June 30, 2023.
Current wording
Cost of revenue for the three months ended September 30, 2024 decreased by $164.3 million to $0.7 million compared to $165.1 million for the three months ended September 30, 2023 and cost of revenue for the nine months ended September 30, 2024 decreased by $200.7 million to $9.1 million compared to $209.8 million for the nine months ended September 30, 2023.
Previous wording
Cost of revenue decreased due to the Company’s BESS projects in progress during the three and six months ended June 30, 2024 being in their final stages, compared to the projects being in earlier stages during the three and six months ended June 30, 2023.
Current wording
Cost of revenue decreased due to the Company’s BESS projects in progress during the three and nine months ended September 30, 2024 being in their later stages, compared to the projects being in earlier stages during the three and nine months ended September 30, 2023.
Previous wording
For the three and six months ended June 30, 2024, gross profit was $1.0 million and $3.1 million, respectively and gross profit margin was 27.8% and 27.0%, respectively. For the three and six months ended June 30, 2023, gross profit was $3.9 million and $6.4 million, respectively, and gross profit margin was 9.9% and 12.5%, respectively.
Current wording
For the three and nine months ended September 30, 2024, gross profit was $0.5 million and $3.6 million, respectively and gross profit margin was 40.3% and 28.3%, respectively. For the three and nine months ended September 30, 2023, gross profit was $7.1 million and $13.5 million, respectively, and gross profit margin was 4.2% and 6.1%, respectively.
Previous wording
R&D expenses decreased by $3.3 million to $7.0 million for the three months ended June 30, 2024, compared to $10.2 million for the three months ended June 30, 2023. The decrease was primarily attributable to a $2.2 million decrease in personnel-related expenses, a $0.8 million decrease in software expenses, a $0.2 million decrease in engineering costs, and a $0.2 million decrease in consulting costs. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount.
Current wording
Research and development expenses decreased by $2.5 million to $5.7 million for the three months ended September 30, 2024, compared to $8.2 million for the three months ended September 30, 2023. The decrease was primarily attributable to a $1.4 million decrease in personnel-related expenses, a $0.8 million decrease in software expenses, and a $0.5 million decrease in engineering costs. These cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount. These cost decreases were partially offset by a $0.1 million increase in consulting costs.
Previous wording
G&A expenses decreased by $0.7 million to $16.3 million for the three months ended June 30, 2024 compared to $17.0 million for the three months ended June 30, 2023. The decrease was primarily attributable to a $0.4 million decrease in software expenses, a $0.3 million decrease in legal costs, and a $0.2 million decrease in personnel-related expenses. The cost decreases were primarily attributable to a focus on cost controls and a reduction in headcount.
Current wording
General and administrative expenses increased by $1.5 million to $17.3 million for the three months ended September 30, 2024 compared to $15.8 million for the three months ended September 30, 2023. The increase was primarily attributable to a $1.9 million increase in the provision for credit losses and a $0.4 million increase in legal and professional fees. These increases were partially offset by a $0.3 million decrease in personnel-related expenses, a $0.3 million decrease in consulting costs, and a $0.3 million decrease in software expenses.
Previous wording
Depreciation and amortization expense increased by $0.1 million to $0.3 million for the three months ended June 30, 2024, compared to $0.2 million for the three months ended June 30, 2023. The increase is primarily due to $0.1 million in amortization costs related to the Company’s capitalized software. Certain capitalized software products were placed into service effective January 1, 2024, resulting in $0.1 million in amortization expense during the three months ended June 30, 2024. There was no comparable expense for the three months ended June 30, 2023.
Current wording
Depreciation and amortization expense increased by $16 thousand to $0.3 million for the three months ended September 30, 2024, compared to $0.2 million for the three months ended September 30, 2023. The increase is primarily due to $0.1 million in amortization costs related to the Company’s capitalized software. Certain capitalized software products were placed into service effective January 1, 2024, resulting in $0.1 million in amortization expense during the three months ended September 30, 2024. There was no comparable expense for the three months ended September 30, 2023.
Previous wording
Depreciation and amortization expense increased by $0.1 million to $0.6 million for the six months ended June 30, 2024, compared to $0.4 million for the six months ended June 30, 2023. The increase is primarily due to $0.2 million in amortization costs related to the Company’s capitalized software. Certain capitalized software products were placed into service effective January 1, 2024, resulting in $0.2 million in amortization expense during the six months ended June 30, 2024. There was no comparable expense for the six months ended June 30, 2023.
Current wording
Depreciation and amortization expense increased by $0.2 million to $0.8 million for the nine months ended September 30, 2024, compared to $0.7 million for the nine months ended September 30, 2023. The increase is primarily due to $0.3 million in amortization costs related to the Company’s capitalized software. Certain capitalized software products were placed into service effective January 1, 2024, resulting in $0.3 million in amortization expense during the nine months ended September 30, 2024. There was no comparable expense for the nine months ended September 30, 2023.
Previous wording
For the three and six months ended June 30, 2024, asset impairment and loss on sale of assets totaled$0.6 million, comprised of $0.5 million in asset impairments and $0.1 million in loss on sale of assets. Asset impairment relates to the write-off of leasehold improvements in the Company’s Westlake Village office due to the Company relocating its corporate office. The loss on sale of assets relates to the sale of acement plant at the Company’s R&D site in Switzerland. The Company did not recognize any impairments or loss on sale of assets during the three and six months ended June 30, 2023.
Current wording
For the three months ended September 30, 2024, asset impairments and loss on sale of assets wasnominal. For the nine months ended September 30, 2024, asset impairment and loss on sale of assets totaled$0.6 million, comprised of $0.5 million in asset impairments and $0.1 million in loss on sale of assets. Asset impairment relates to the write-off of leasehold improvements in the Company’s Westlake Village office due to the Company relocating its corporate office. The loss on sale of assets relates to the sale of acement plant at the Company’s R&D site in Switzerland. The Company did not recognize any impairments or loss on sale of assets during the three and nine months ended September 30, 2023.
Previous wording
Interest income decreased by $0.5 million to $1.7 million for the three months ended June 30, 2024 compared to $2.3 million for the three months ended June 30, 2023 and interest income decreased by $0.7 million to $3.6 million compared to $4.2 million for the six months ended June 30, 2024. The decrease in interest income is primarily due to a decrease in interest income from our money market funds.
Current wording
Interest income decreased by $0.5 million to $1.4 million for the three months ended September 30, 2024 compared to $1.9 million for the three months ended September 30, 2023 and interest income decreased by $1.1 million to $5.0 million compared to $6.1 million for the nine months ended September 30, 2024. The decrease in interest income is primarily due to a decrease in interest income from our money market funds.
Previous wording
Other income (expense), net improved by $1.9 million to other income, net of $1.6 million for the six months ended June 30, 2024 compared to other expense, net of $0.3 million for the six months ended June 30, 2023. The change in other income (expense), net is primarily due to a $1.5 million gain resulting from the derecognition of a contract liability with a related party during the six months ended June 30, 2024. In 2019, the Company received a $1.5 million deposit for a gravity-based system from a customer that was owned by one of its primary shareholders. During the six months ended June 30, 2024, the Company concluded it was no longer obligated to provide a gravity-based system to the customer and that the deposit was nonrefundable. As a result, the Company derecognized the $1.5 million liability and recognized it as a gain during the six months ended June 30, 2024. There was no such comparable gain during the six months ended June 30, 2023.
Current wording
Other income (expense), net improved by $1.0 million to other income, net of $0.7 million for the nine months ended September 30, 2024 compared to other expense, net of $0.3 million for the nine months ended September 30, 2023. The improvement in other income (expense), net is primarily due to a $1.5 million gain resulting from the derecognition of a contract liability with a related party during the nine months ended September 30, 2024. In 2019, the Company received a $1.5 million deposit for a gravity-based system from a customer that was owned by one of its primary shareholders. During the nine months ended September 30, 2024, the Company concluded it was no longer obligated to provide a gravity-based system to the customer and that the deposit was nonrefundable. As a result, the Company derecognized the $1.5 million liability and recognized it as a gain during the nine months ended September 30, 2024. There was no such comparable gain during the nine months ended September 30, 2023. Partially offsetting this gain was a $0.8 million loss due to the change in the fair value of the Company’s derivative asset - conversion option due to a decrease in the probability of the Company exercising its conversion option in DG Fuels.
Previous wording
Since inception, we have financed our net cash used in operating and investing activities primarily through the issuance and sale of equity, and with the proceeds from the reverse recapitalization and private investment in public equity that occurred in 2022. Our cash equivalents are highly liquid investments purchased with an original or remaining maturities of three months or less. Substantially all of our restricted cash balance is held by banks as collateral for the Company’s letters of credit.
Current wording
Since inception, we have financed our net cash used in operating and investing activities primarily through the issuance and sale of equity, and with the proceeds from the reverse recapitalization and private investment in public equity that occurred in 2022.
Previous wording
Energy Vault has incurred negative operating cash flows and operating losses in the past. We may continue to incur operating losses in the future due to our on-going research and development activities. We may seek additional capital through equity and/or debt financings depending on market conditions. If we are required to raise additional funds by issuing equity securities, dilution to stockholders would result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of our common stock. If we raise funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of common stock. The terms of debt securities or borrowings could impose significant restrictions on our operations. The credit market and financial services industry have in the past, and may in the future, experience periods of uncertainty that could impact the availability and cost of equity and debt financing.
Current wording
Energy Vault has incurred negative operating cash flows and operating losses in the past and we may incur operating losses in the future. We may seek additional capital through equity and/or debt financings depending on market conditions. If we are required to raise additional funds by issuing equity securities, dilution to stockholders would result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of our common stock. If we raise funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of common stock. The terms of debt securities or borrowings could impose significant restrictions on our operations. The credit market and financial services industry have in the past, and may in the future, experience periods of uncertainty that could impact the availability and cost of equity and debt financing.
Previous wording
Our principal commitments as of June 30, 2024 consisted primarily of obligations under operating leases, finance leases, deferred pensions, warranty obligations, and issued purchase orders. Our non-cancellable purchase obligations as of June 30, 2024 totaled approximately $5.0 million.
Current wording
Our principal commitments as of September 30, 2024 consisted primarily of obligations under operating leases, finance leases, a deferred pension, warranty liabilities, and issued purchase orders. Our non-cancellable purchase obligations as of September 30, 2024 totaled approximately $2.0 million.
Previous wording
During the six months ended June 30, 2024 and 2023, used in operating activities totaled $11.8 million and $91.8 million, respectively.
Current wording
During the nine months ended September 30, 2024 and 2023, cash used in operating activities totaled $21.0 million and $116.1 million, respectively.
Previous wording
During the six months ended June 30, 2024, operating cash flows were negatively impacted by a net loss of $47.3 million and a decrease in operating liabilities of $59.7 million. The decrease in operating liabilities was primarily attributable to a $62.7 million decrease in accounts payable and accrued expenses, partially offset by a $3.5 million increase in deferred revenue. Operating cash flows were positively impacted by a $75.2 million decrease in operating assets and non-cash charges of $20.0 million. The decrease in operating assets was primarily attributable to a $51.0 million decrease in contract assets and a $23.8 million decrease in accounts receivable. The non-cash charges were primarily composed of $19.2 million in stock-based compensation expense, $0.6 million in depreciation and amortization, $0.6 million in asset impairments and loss on sale of assets, and a $0.4 million provision for credit losses, partially offset by $0.8 million in non-cash interest income.
Current wording
During the nine months ended September 30, 2024, operating cash flows were negatively impacted by a net loss of $74.0 million and a decrease in operating liabilities of $53.1 million. The decrease in operating liabilities was primarily attributable to a $55.5 million decrease in accounts payable and accrued expenses and a $1.0 million decrease in other long-term liabilities, partially offset by a $3.5 million increase in deferred revenue. Operating cash flows were positively impacted by a $73.0 million decrease in operating assets and non-cash charges of $33.0 million. The decrease in operating assets was primarily attributable to a $56.9 million decrease in contract assets, a $24.6 million decrease in accounts receivable, and a $1.5 million decrease in customer financing receivable. The decrease in contract assets and accounts receivable was due to the Company’s BESS projects being in their final stages and the Company having collected most of the remaining balances due. The non-cash charges were primarily composed of $29.4 million in stock-based compensation expense, a $2.2 million provision for credit losses, $0.8 million in depreciation and amortization expense, $0.8 million in change in fair value of derivative asset - conversion option, $0.6 million in asset impairments and loss on sale of assets, and $0.3 million in foreign exchange losses, partially offset by $1.2 million in non-cash interest income.
Previous wording
During the six months ended June 30, 2023, cash used in operating activities of$91.8 million was negatively impacted by a net loss of$57.3 million, an increase in operating assets of $50.9 million, and a decrease in operating liabilities of $7.7 million. The increase in operating assets was primarily due to a $54.9 million increase in advances to suppliers related to equipment purchases for our BESS projects, and a $34.8 million increase in contract assets primarily due to an increase in unbilled receivables. These increases in operating assets were partially offset by a $32.3 million decrease in accounts receivable, a $4.4 million decrease in inventory, and a $2.1 million decrease in prepaid and other current assets. The decrease in operating liabilities was primarily due to a $46.0 million decrease in accounts payable and accrued expenses, partially offset by a $38.9 million increase in deferred revenue. Operating cash flows were positively impacted by non-cash charges of $24.1 million, which was primarily due to $23.8 million in stock-based compensation expense.
Current wording
During the nine months ended September 30, 2023, cash used in operating activities of$116.1 million was negatively impacted by a net loss of$76.3 million, an increase in operating assets of $2.9 million, and a decrease in operating liabilities of $71.5 million. The increase in operating assets was primarily due to a $36.8 million increase in contract assets, partially offset by a $21.7 million decrease in advances to suppliers and a $10.6 million decrease in accounts receivable. The increase in contract assets was primarily due to an increase in unbilled receivables on the Company’s BESS projects. Advances to suppliers decreased during the period as the Company received the BESS equipment that related to the deposits, and accounts receivable decreased due to the timing of billings and cash collections. The decrease in operating liabilities was primarily due to a $44.8 million decrease in deferred revenue and a $25.8 million decrease in accounts payable and accrued expenses. The decrease in deferred revenue primarily resulted from the recognition of revenue associated with the beginning deferred revenue balance on the Company’s BESS projects. Operating cash flows were positively impacted by non-cash charges of $34.7 million, which was primarily due to $34.5 million in stock-based compensation expense.
Previous wording
During the six months ended June 30, 2024 and 2023, cash used in investing activities totaled $20.8 million and $24.8 million, respectively.
Current wording
During the nine months ended September 30, 2024 and 2023, cash used in investing activities totaled $48.1 million and $33.2 million, respectively.
Previous wording
Cash used in investing activities for the six months ended June 30, 2024 consisted of $21.1 million for the purchase of property and equipment, primarily related to the construction of the Snyder CDU, Snyder BESS, and the hybrid energy storage system being constructed in Calistoga, California, partially offset by $0.2 million in proceeds from the sale of a cement plant at the Company’s R&D site in Switzerland.
Current wording
Cash used in investing activities for the nine months ended September 30, 2024 consisted of $48.3 million for the purchase of property and equipment, primarily related to the construction of the Snyder CDU, Cross Trails BESS, and the hybrid energy storage system being constructed in Calistoga, California, partially offset by $0.2 million in proceeds from the sale of a cement plant at the Company’s R&D site in Switzerland.
Previous wording
Cash used in investing activities for the six months ended June 30, 2023 consisted of $18.8 million for the purchase of property and equipment, primarily related to the construction of the Snyder CDU and the hybrid energy storage system being constructed in Calistoga, California. Additionally, the Company purchased$6.0 million of equity securities in KORE.
Current wording
Cash used in investing activities for the nine months ended September 30, 2023 consisted of $27.2 million for the purchase of property and equipment, primarily related to the construction of the Snyder CDU and the hybrid energy storage system being constructed in Calistoga, California. Additionally, the Company purchased$6.0 million of equity securities in KORE.
Previous wording
During the six months ended June 30, 2024, cash provided by financing activities totaled $0.4 million, compared to cash used in financing activities of $4.5 million for the six months ended June 30, 2023.
Current wording
During the nine months ended September 30, 2024, cash provided by financing activities totaled $0.6 million, compared to cash used in financing activities of $4.7 million for the nine months ended September 30, 2023.
Previous wording
For the six months ended June 30, 2024, cash provided by financing activities was attributable to $1.7 million in proceeds from insurance premium financings, partially offset by $0.8 million in insurance premium financing repayments, $0.3 million in tax payments related to the net settlement of equity awards, and $0.2 million in payments for finance lease obligations.
Current wording
For the nine months ended September 30, 2024, cash provided by financing activities was attributable to $2.7 million in proceeds from insurance premium financings, partially offset by $1.6 million in insurance premium financing repayments, $0.4 million in tax payments related to the net settlement of equity awards, and $0.2 million in payments for finance lease obligations.
Previous wording
During the six months ended June 30, 2023, cash used in financing activities was primarily attributable to $4.6 million in tax payments related to the net settlement of equity awards, partially offset by $0.1 million in cash proceeds from the exercise of stock options.
Current wording
During the nine months ended September 30, 2023, cash used in financing activities was primarily attributable to $5.7 million in tax payments related to the net settlement of equity awards and $0.4 million in insurance premium financing repayments. Partially offsetting these uses of cash was $1.3 million in proceeds from insurance premium financings and $0.2 million in cash proceeds from the exercise of stock options.
Previous wording
In evaluating adjusted EBITDA, one should be aware that in the future we may incur expenses similar to the adjustments noted above. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance under
Current wording
In evaluating adjusted EBITDA, one should be aware that in the future we may incur expenses similar to the adjustments noted above. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these types of adjustments. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net loss, operating loss, or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Revenue from two customers accounted for 59% and 38% of total revenue for the three months ended September 30, 2023 and revenue from three customers accounted for 47%, 33%, and 20% of total revenue for the nine months ended September 30, 2023.
Current report — wording carried from elsewhere
Our cash equivalents are highly liquid investments purchased with an original or remaining maturities of three months or less. Substantially all of our restricted cash balance is held by banks as collateral for the Company’s letters of credit.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
GAAP and should not be considered as an alternative to net loss, operating loss, or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.