Fluence Energy Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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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.
Jun 30, 2024 · Filed Aug 7, 2024
FLNC$5.27+3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001868941-24-000045
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001868941-24-000059
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 201 previous paragraphs and 200 current paragraphs.
127 unchanged; 59 reworded; 11 added; 13 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 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 (11)
Current report
Income Tax Expense (Benefit)
Current report
Net Income (Loss)
Current report
Depreciation and amortization increased by$1.4 million, or 60%, in the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily attributable to a $1.2 million cumulative adjustment in depreciation resulting from changing the useful life of IT equipment from five years to three years.
Current report
Depreciation and amortization increased by $1.2 million, or 17% in the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023, primarily attributable to a $1.2 million cumulative adjustment in depreciation resulting from changing the useful life of IT equipment from five years to three years.
Current report
Income Tax Expense (Benefit)
Current report
Income tax expense increased by $5.5 million, or 421%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in income tax expense for the three months ended June 30, 2024 is primarily attributable to an increase in pre-tax income in foreign tax jurisdictions without historical losses.
Current report
Income tax expense increased by $3.4 million, or 165%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The increase in income tax expense for the nine months ended June 30, 2024 was primarily attributable to an increase in pre-tax income in foreign tax jurisdictions without historical losses.
Current report
Net Income (Loss)
Current report
On August 6, 2024 (the "Amendment Effective Date"), Fluence Energy, Inc. entered into Amendment Number Three ("Amendment No. 3") to that certain ABL Credit Agreement by and among Fluence Energy, LLC, as parent borrower, the Company, as parent, the other borrowers party thereto, the other guarantors party thereto, the lenders party thereto, and Citibank, N.A., as administrative agent (as successor to Barclays Bank PLC) (such agreement, as so amended, the "2024 Credit Agreement") in order to (i) convert the existing ABL Facility to a senior secured cash flow revolving credit facility in an initial aggregate principal amount of up to $500.0 million (the "2024 Revolver"), (ii) replace Barclays as administrative agent under the 2024 Credit Agreement with Citibank, N.A., and (iii) make certain other modifications to the 2024 Credit Agreement as set forth therein. Capitalized terms used in this subsection that are not otherwise defined are defined in the 2024 Credit Agreement.
Current report
The 2024 Credit Agreement contains customary events of default for this type of financing. If an event of default occurs with respect to a borrower, the lenders will be able to, among other things, terminate the commitments immediately, cash collateralize any outstanding letters of credit, declare any loans outstanding to be due and payable in whole or in part, and exercise other rights and remedies. The maturity date and the date of termination of lending commitments under the 2024 Credit Agreement both remain unchanged at November 22, 2027. There are no borrowings and no letters of credit outstanding under the 2024 Credit Agreement as of August 7, 2024.
Current report
Net cash flows used in operations of $160.5 million for the nine months ended June 30, 2023, were primarily due to (i) net loss of $109.6 million, (ii) decreases in accounts payable of $139.3 million due to timing of purchases and payments to various vendors, (iii) net negative effects of changes in customer contract assets and liabilities, specifically, deferred revenue, inclusive of related parties increased in aggregate by $12.5 million, and receivables, inclusive of trade, unbilled AR and related parties decreased in aggregate by $27.9 million due to timing of various customer project billings and cash collections in accordance with contract milestone payment schedules, and (iv) advance payments to various vendors of $8.1 million. These negative effects were partially offset by positive effects of utilization of inventory of $145.9 million.
Removed paragraphs (13)
Previous report
On April 18, 2022, a 10 MW energy storage facility in Chandler, Arizona owned by AES experienced an overheating event. Fluence served as the energy storage technology provider for the facility, which was completed in 2019, and Fluence currently provides maintenance services for the facility. There were no injuries. The facility has been taken offline as teams from Fluence, AES, and the battery manufacturer investigate the incident. We are currently not able to estimate the impact, if any, that this incident may have on our reputation or financial results, or on market adoption of our products and solutions.
Previous report
Income Tax Benefit
Previous report
Net Loss
Previous report
(d) Costs related to the COVID-19 pandemic, the cargo loss incident, external expenses related to the ongoing remediation of our material weakness, and legal fees related to the 2021 and 2022 overheating events at customer facilities which the Company had historically excluded from Adjusted EBITDA, are no longer excluded. Adjusted EBITDA results for the three and six months ended March 31, 2023 have been recast for comparative purposes.
Previous report
Amount forthe six months ended March 31, 2023 included $0.3 million in severance costs related the restructuring plan.
Previous report
(d) Costs related to the COVID-19 pandemic, the cargo loss incident, andlegal fees related to the 2021 and 2022 overheating events at customer facilities, which the Company had historically excluded from Adjusted Gross Profit and Adjusted Gross Profit Margin, are no longer excluded. Adjusted Gross Profit and Adjusted Gross Profit Margin results for the three and six months ended March 31, 2023 have been recast for comparative purposes.
Previous report
Interest income, net decreased by $0.8 million, or 39%, in the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease was primarily attributable to an increase in interest expense of $0.6 millionon borrowing against a customer receivable.
Previous report
Interest income, net increased by $0.5 million, or 19%, for thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023. The increase in interest income, netfor the six months ended March 31, 2024 was primarily attributable to an increase in interest income of $1.3 million due to higher interest rates on cash deposits and investments, partially offset by additional interest expense of $0.4 million related to writing off a portion of capitalized debt issuance costs related to termination of the Revolver.
Previous report
Income Tax Benefit
Previous report
Income tax benefit increased by $1.5 million, or 1222%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in income tax benefitfor the three months ended March 31, 2024 is primarily attributable to a change in the mix of pre-tax losses globally.
Previous report
Income tax benefit increased by $2.2 million, or 292%, for the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The increase in income tax benefit for the six months ended March 31, 2024 was primarily attributable to a change in the mix of pre-tax losses globally and foreign exchange losses.
Previous report
Net Loss
Previous report
Net cash flows used in operations of $163.4 million for the six months ended March 31, 2023, was primarily due to (i) net loss of $74.6 million, (ii) increase in balance of trade receivables of $244.4 million due to timing of billings, and (iii) increase in balances of inventory of $103.5 million to support projects in second half of the fiscal year, which increased our cash used in operations. These effects on cash used were partially offset by increases in balances of (i) deferred revenue of $187.4 million, net of deferred revenue and payables with related parties, primarily driven by timing of execution of various customer projects and billings in accordance with contract milestone payment schedules and (ii) accounts payable of $93.4 million due to timing of payments to vendors, which decreased cash used in operations.
Reworded paragraphs (59)
Previous wording
The following analysis provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Fluence and should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q (this “Report”) and in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on November 29, 2023 (the “2023 Annual Report”). In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. “Risk Factors” of the 2023 Annual Report and Part II, Item 1A. “Risk Factors” and the section titled “Cautionary Statement Regarding Forward-Looking Information” included elsewhere herein. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “will,” “would,” and similar expressions to identify forward-looking statements.
Current wording
The following analysis provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Fluence and should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q (this “Report”) and in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on November 29, 2023 (the “2023 Annual Report”). In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed in Part I, Item 1A. “Risk Factors” of the 2023 Annual Report and Part II, Item 1A. “Risk Factors” and the section titled “Cautionary Statement Regarding Forward-Looking Information” included elsewhere in this Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “will,” “would,” and similar expressions to identify forward-looking statements.
Previous wording
Our fiscal year begins on October 1 and ends on September 30. References to “fiscal year 2023” and “fiscal year 2024” refer to the twelve months ended September 30, 2023 and September 30, 2024, respectively.
Current wording
Our fiscal year begins on October 1 and ends on September 30. References to “fiscal year 2023” and “fiscal year 2024” refer to the twelve months ended September 30, 2023 and ending September 30, 2024, respectively.
Previous wording
On June 30, 2022, Siemens Industry, Inc. exercised its redemption right pursuant to the terms of the Third Amended and Restated Limited Liability Company Agreement of Fluence Energy, LLC (the “LLC Agreement”) with respect to its entire holding of 58,586,695 LLC Interests of Fluence Energy, LLC, together with the corresponding cancellation of an equivalent number of shares of Class B-1 common stock of Fluence Energy, Inc., par value $0.00001 per share (the “Siemens Redemption”).
Current wording
On June 30, 2022, Siemens Industry, Inc. exercised its redemption right pursuant to the terms of the Third Amended and Restated Limited Liability Company Agreement of Fluence Energy, LLC (the “LLC Agreement”) with respect to its entire holding of 58,586,695 LLC Interests of Fluence Energy, LLC, together with the corresponding cancellation of an equivalent number of shares of Class B-1 common stock of Fluence Energy, Inc. (the “Siemens Redemption”).
Previous wording
On December 8, 2023, AES Grid Stability, Siemens Pension Pension-Trust e.V. (“Siemens Pension Trust”), Qatar Holding LLC (“QHL” and together with AES Grid Stability and Siemens Pension Trust in such context, the “Selling Stockholders”) sold an aggregate of 18,000,000 shares of Class A common stock in an underwritten public offering (the “Offering”). Fluence did not sell any of its shares of Class A common stock in the Offering and the Company did not receive any of the proceeds from the Offering. Pursuant to the terms of the Company’s Registration Rights Agreement, dated as of November 1, 2021, by and among the Company and the Original Equity Owners (as defined therein), the Company paid $0.7 million in certain expenses of the Selling Stockholders related to the Offering, while the Selling Stockholders paid all applicable underwriting discounts and commissions.
Current wording
On December 8, 2023, AES Grid Stability, Siemens Pension Pension-Trust e.V. (“Siemens Pension Trust”), Qatar Holding LLC (“QHL” and together with AES Grid Stability and Siemens Pension Trust in such context, the “Selling Stockholders”) sold an aggregate of 18,000,000 shares of Class A common stock in an underwritten public offering (the “Offering”). Fluence did not sell any of its shares in the Offering and the Company did not receive any of the proceeds from the Offering. Pursuant to the terms of the Company’s Registration Rights Agreement, dated as of November 1, 2021, by and among the Company and the Original Equity Owners (as defined therein), the Company paid $0.7 million in certain expenses of the Selling Stockholders related to the Offering, while the Selling Stockholders paid all applicable underwriting discounts and commissions.
Previous wording
In conjunction with the Offering, AES Grid Stability exercised its redemption right pursuant to the terms of the LLC Agreement with respect to 7,087,500 LLC Interests held by AES Grid Stability, together with the corresponding cancellation of an equivalent number of shares of Class B-1 common stock of Fluence Energy, Inc., par value $0.00001 per share (the “AES Redemption”). The Company elected to settle the AES Redemption through the issuance of 7,087,500 shares of the Company’s Class A common stock. The AES Redemption settled on December 8, 2023, the closing date of the Offering. All of the 7,087,500 shares issued to AES Grid Stability in connection with the AES Redemption were sold in the Offering. The AES Redemption increased the beneficial ownership interest of the Company in Fluence Energy, LLC to 71.12% as of December 8, 2023. The impact of the change in ownership interest did not result in a change in control. The AES Redemption has been accounted for as an equity transaction and the carrying amount of non-controlling interest has been adjusted.
Current wording
In conjunction with the Offering, AES Grid Stability exercised its redemption right pursuant to the terms of the LLC Agreement with respect to 7,087,500 LLC Interests held by AES Grid Stability, together with the corresponding cancellation of an equivalent number of shares of Class B-1 common stock of Fluence Energy, Inc. (the “AES Redemption”). The Company elected to settle the AES Redemption through the issuance of 7,087,500 shares of the Company’s Class A common stock. The AES Redemption settled on December 8, 2023, the closing date of the Offering. All of the 7,087,500 shares issued to AES Grid Stability in connection with the AES Redemption were sold in the Offering. The AES Redemption increased the beneficial ownership interest of the Company in Fluence Energy, LLC to 71.12% as of December 8, 2023. The impact of the change in ownership interest did not result in a change in control. The AES Redemption has been accounted for as an equity transaction and the carrying amount of non-controlling interest has been adjusted.
Previous wording
In December 2021, we entered negotiations with our largest battery module vendor to amend our battery supply agreement. As part of the discussions, the vendor sought to renegotiate the price we were to pay for battery modules purchased in calendar year 2022, as well as those expected to be purchased during the remainder of calendar year 2022 and calendar year 2023. As part of these negotiations, we also discussed settlement of contractual claims by Fluence to the vendor. These negotiations continued throughout calendar year 2022. On December 15, 2022, we finalized an agreement with the vendor, amending the supply agreement and resolving our claims. The approxim ately $19.5 million settlement for our claims was recognized as a reduction of “costs of goods and services” for the six months ended March 31, 2023.
Current wording
In December 2021, we entered negotiations with our largest battery module vendor to amend our battery supply agreement. As part of the discussions, the vendor sought to renegotiate the price we were to pay for battery modules purchased in calendar year 2022, as well as those expected to be purchased during the remainder of calendar year 2022 and calendar year 2023. As part of these negotiations, we also discussed settlement of contractual claims by Fluence to the vendor. These negotiations continued throughout calendar year 2022. On December 15, 2022, we finalized an agreement with the vendor, amending the supply agreement and resolving our claims. The approxim ately $19.5 million settlement for our claims was recognized as a reduction of “costs of goods and services” for the nine months ended June 30, 2023.
Previous wording
Our revenue growth is directly tied to the continued adoption of energy storage products and solutions by our customers. The cost of lithium-ion energy storage hardware has declined significantly in the last decade and has resulted in a large addressable market today. The market for energy storage continues to rapidly evolve and while we believe costs will continue to decline over the long term, there is no guarantee that they will decline or decline at the rates we expect. If costs do not continue to decline long term, this could adversely affect our ability to increase our revenue or grow our business. For example, we saw price increases in 2022. During calendar year 2023, prices returned to their historical trend of declining year-over-year and we continued to see declines through the first six months of fiscal year 2024.
Current wording
Our revenue growth is directly tied to the continued adoption of energy storage products and solutions by our customers. The cost of lithium-ion energy storage hardware has declined significantly in the last decade and has resulted in a large addressable market today. The market for energy storage continues to rapidly evolve and while we believe costs will continue to decline over the long term, there is no guarantee that they will decline or decline at the rates we expect. If costs do not continue to decline long term, this could adversely affect our ability to increase our revenue or grow our business. For example, we saw price increases in 2022. During calendar year 2023, prices returned to their historical trend of declining year-over-year and we continued to see declines through the first nine months of fiscal year 2024.
Previous wording
Through fiscal year 2021, we experienced variability in the timing of our order intake, with higher volumes of orders coming the second half of our fiscal year. However, in fiscal years 2022 and 2023, order intake was relatively consistent across each quarter. In fiscal year 2024, we currently expect to see a higher amount of our order intake in the second half of the fiscal year. The variability in our order intake in the most recent quarters has been primarily driven due to the ambiguity regarding the timing of the proposed domestic content guidelines being released by the US Department of the Treasury which did not occur until the third quarter of fiscal year 2023, which can and has impacted customers decisions, and timing of customer approvals which typically coincides with their own internal budgeting processes. The timing of our order intake can be difficult to predict, and could result in significant variation among fiscal quarters.
Current wording
Through fiscal year 2021, we experienced variability in the timing of our order intake, with higher volumes of orders coming the second half of our fiscal year. However, in fiscal years 2022 and 2023, order intake was relatively consistent across each quarter. In fiscal year 2024, we currently expect to see a higher amount of our order intake in the second half of the fiscal year. The variability in our order intake in the most recent quarters has been primarily driven due to the ambiguity regarding the timing of the proposed domestic content guidelines being released by the US Department of the Treasury, which occurred in May of 2024. As a result, we continue to expect our order intake to be higher in the second half of the fiscal year 2024. The timing of our order intake can be difficult to predict, and could result in significant variation among fiscal quarters.
Previous wording
Governments across the globe have announced and implemented various policies, regulation and legislation to support the transition from fossil fuels to low-carbon forms of energy and to support and accelerate adoption of clean and/or reliable distributed generation technologies. Although we generally are not regulated as a utility, federal, state, and local government statutes and regulations concerning electricity heavily influence the market for our product and services. The operation of our business and our customers’ use of our products and services are impacted by these various government actions. For example, in August 2022, the United States passed the Inflation Reduction Act of 2022 (the “IRA”), which consists of a number of renewable energy related provisions including an investment tax credit (ITC) for standalone energy storage and incentives for grid modernization equipment including domestic battery cell manufacturing, battery module manufacturing and its components, as well as various upstream applications.
Current wording
Governments across the globe have announced and implemented various policies, regulation and legislation to support the transition from fossil fuels to low-carbon forms of energy and to support and accelerate adoption of clean and/or reliable distributed generation technologies. Although we generally are not regulated as a utility, federal, state, and local government statutes and regulations concerning electricity heavily influence the market for our product and services. The operation of our business and our customers’ use of our products and services are impacted by these various government actions. For example, in August 2022, the United States passed the Inflation Reduction Act of 2022 (the “IRA”), which consists of several renewable energy and energy storage related provisions, including an investment tax credit for standalone energy storage and incentives for grid modernization. These include incentives for domestic battery cell manufacturing, battery module manufacturing and its components, and various upstream applications as well as incentives for energy project owners utilizing battery energy storage systems that include certain U.S. manufactured products and/or product components.
Previous wording
We believe we are well positioned to capture incentives contained in the IRA and that its enactment is favorable to our business and future operations with our forthcoming battery module manufacturing as well as our contract manufacturing facility in Utah and our supply agreement for U.S. manufactured battery cells. However, as applicable U.S. Department of Treasury and Internal Revenue Service proposed guidelines were not published until the third quarter of fiscal year 2023, we have not yet seen the impact IRA-related incentives may have on our business, operations and financial performance and cannot guarantee we will realize all, or any, of the anticipated benefits of IRA-related incentives. We are continuing to evaluate the overall impact and applicability of the IRA to our business and expected results of operations going forward.
Current wording
We believe we are well positioned to benefit from incentives contained in the IRA and that its enactment is favorable to our business and future operations with our forthcoming battery module manufacturing facility in Utah and our supply agreement for U.S. manufactured battery cells. However, we have not yet seen the full impact IRA-related incentives may have on our business, operations and financial performance and cannot guarantee we will realize all, or any, of the anticipated benefits of IRA-related incentives. We are continuing to evaluate the overall impact and applicability of the IRA to our business and expected results of operations going forward.
Previous wording
Research and development expenses consist of personnel-related costs across our global research and development (R&D) centers for engineers engaged in the design and development and testing of our integrated products and technologies. Engineering competencies include data science, machine learning, software development, network and cyber security, battery systems engineering, industrial controls, UI / UX, mechanical design, power systems engineering, certification, and more. R&D expenses also support three product testing labs located across the globe, including a system-level testing facility in Pennsylvania that is used for quality assurance and the rapid iteration, testing, and launching of new Fluence energy storage technology and products. We are standing up an additional Hardware in the Loop testing facility which is co-located with our technical team in Bangalore, India. We expect R&D expenses to generally increase in future periods to support our growth and as we continue to invest in research and development activities that are necessary to achieve our technology and product roadmap goals. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.
Current wording
Research and development expenses consist of personnel-related costs across our global research and development (“R&D”) centers for engineers engaged in the design and development and testing of our integrated products and technologies. Engineering competencies include data science, machine learning, software development, network and cyber security, battery systems engineering, industrial controls, UI / UX, mechanical design, power systems engineering, certification, and more. R&D expenses also support three product testing labs located across the globe, including a system-level testing facility in Pennsylvania that is used for quality assurance and the rapid iteration, testing, and launching of new Fluence energy storage technology and products. We have established an additional Hardware in the Loop testing facility, which is co-located with our technical team in Bangalore, India. We expect R&D expenses to generally increase in future periods to support our growth and as we continue to invest in R&D activities that are necessary to achieve our technology and product roadmap goals. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.
Previous wording
Interest income, net consists of interest income net of interest expense. Interest income consists of interest earned on cash deposits and interest on customer notes receivables. Interest expense consists primarily of interest on borrowings against notes receivable pledged as collateral, unused line fees related to the revolving credit facility (the “Revolver”) pursuant to a credit agreement, dated November 1, 2021, by and among Fluence Energy, LLC, as the borrower, Fluence Energy, Inc., as a parent guarantor, the subsidiary guarantors party thereto, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent (the “Revolving Credit Agreement”), which was terminated upon repayment in full of all obligations under the Revolver, effective November 22, 2023, and amortization of debt issuance costs. Interest income, net also consists of unused line and commitment fees related to the asset-based syndicated credit agreement (the “ABL Credit Agreement”) by and among Fluence Energy, LLC, as parent borrower, Fluence Energy, Inc., as parent, the other borrowers party thereto, the other guarantors party thereto, the lenders party thereto (the “ABL Lenders”), and Barclays Bank PLC (“Barclays”), as administrative agent, as amended from time to time, that was entered into on November 22, 2023.
Current wording
Interest income, net consists of interest income net of interest expense. Interest income consists of interest earned on cash deposits and interest on customer notes receivables. Interest expense consists primarily of interest on borrowings against notes receivable pledged as collateral, unused line fees related to the revolving credit facility (the “Revolver”) pursuant to a credit agreement, dated November 1, 2021, by and among Fluence Energy, LLC, as the borrower, Fluence Energy, Inc., as a parent guarantor, the subsidiary guarantors party thereto, the lenders party thereto and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent (the “Revolving Credit Agreement”), which was terminated upon repayment in full of all obligations under the Revolver, effective November 22, 2023, and amortization of debt issuance costs. Interest income, net also consists of unused line and commitment fees related to the ABL Credit Agreement (as defined below).
Previous wording
Net loss may vary from quarter to quarter and is primarily affected by our gross profit and operating expenses as defined above.
Current wording
Net income (loss) may vary from quarter to quarter and is primarily affected by our gross profit and operating expenses as defined above.
Previous wording
The following table presents our order intake for the three and six months ended March 31, 2024 and 2023. The table is presented in Gigawatts (GW):
Current wording
The following table presents our order intake for the three and nine months ended June 30, 2024 and 2023. The table is presented in Gigawatts (GW):
Previous wording
We cannot guarantee that our pipeline will result in actual revenue in the originally anticipated period or at all. Pipeline may not generate margins equal to our historical operating results. We have only recently begun to track our pipeline on a consistent basis as performance measures, and as a result, we do not have significant experience in determining the level of realization that we will achieve on these contracts. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our pipeline fail to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity. .
Current wording
We cannot guarantee that our pipeline will result in actual revenue in the originally anticipated period or at all. Pipeline may not generate margins equal to our historical operating results. We have only recently begun to track our pipeline on a consistent basis as performance measures, and as a result, we do not have significant experience in determining the level of realization that we will achieve on these contracts. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our pipeline fails to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.
Previous wording
Adjusted EBITDA is calculated from the consolidated statements of operations using net income (loss) adjusted for (i) interest income, net, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, (v) certain other income or expenses and (vi) non-recurring income or expenses. Adjusted EBITDA may in the future also be adjusted for amounts impacting net income related to the Tax Receivable Agreement liability.
Current wording
Adjusted EBITDA is calculated from the consolidated statements of operations using net income (loss) adjusted for (i) interest income, net, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, and (v) other non-recurring income or expenses. Adjusted EBITDA may in the future also be adjusted for amounts impacting net income related to the Tax Receivable Agreement liability.
Previous wording
Adjusted Gross Profit is calculated using gross profit, adjusted to exclude (i) stock-based compensation expenses, (ii) amortization, (iii) certain other income or expenses, and (iv) non-recurring income or expenses. Adjusted Gross Profit Margin is calculated using Adjusted Gross Profit divided by total revenue.
Current wording
Adjusted Gross Profit is calculated using gross profit, adjusted to exclude (i) stock-based compensation expenses, (ii) amortization, and (iii) other non-recurring income or expenses. Adjusted Gross Profit Margin is calculated using Adjusted Gross Profit divided by total revenue.
Previous wording
(a) Interest income, net for the three and six months ended March 31, 2023 have been recast to conform with current period presentation as described in “Footnote 2 - Summary of Significant Accounting Policies and Estimates, Reclassifications.”
Current wording
(a) Interest income, net for the three and nine months ended June 30, 2023 have been recast to conform with current period presentation as described in “Footnote 2 - Summary of Significant Accounting Policies and Estimates, Reclassifications.”
Previous wording
Amount for the six months ended March 31, 2024 includes approximately $1.2 million of costs related to the termination of the Revolving Credit Agreement and $0.8 million in costs related to the Offering. Amount for the six months ended March 31, 2023 included $3.5 million in severance costs and consulting fees related to the restructuring plan
Current wording
(c) Amount for the three months ended June 30, 2024 includes $1.0 million in severance costs related to restructuring. Amount for the three months ended June 30, 2023 included $2.0 million in severance costs and consulting fees related to the restructuring plan from November 2022. Amount for the nine months ended June 30, 2024 includes approximately $1.0 million in severance costs related to restructuring, $1.2 million of costs related to the termination of the Revolving Credit Agreement and $0.8 million in costs related to the Offering. Amount for the nine months ended June 30, 2023 included $5.4 million in severance costs and consulting fees related to the restructuring plan from November 2022.
Previous wording
(c) Amount for the three months ended March 31, 2023 included $0.1 million in severance costs related to the restructuring plan.
Current wording
(c) Amount for the three and nine months ended June 30, 2023 included $0.1 million and $0.4 million, respectively in severance costs related to the restructuring plan from November 2022.
Previous wording
Comparison of the Three and Six Months Ended March 31, 2024 to the Three and Six Months Ended March 31, 2023
Current wording
Comparison of the Three and Nine Months Ended June 30, 2024 to the Three and Nine Months Ended June 30, 2023
Previous wording
Total revenue decreased by $21.5 million, or 2%, for the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The decrease in total revenue for the six months ended March 31, 2024 was mainly attributable to a decrease in revenue related of our battery-based energy storage products and solutions by $29.5 million, partially offset by an increase in services revenue of $7.3 million. The decrease in revenue from our battery-based energy storage products and solutions was primarily driven by (i) favorable impacts in the prior period due to price increase change orders issued during the period of $24.3 million where the performance obligations were substantially satisfied in previous periods and (ii) decrease in revenue from consulting services provided to AES of $5.9 million.
Current wording
Total revenue decreased by $53.0 million, or 10%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease in total revenue for the three months ended June 30, 2024 was mainly attributable to a decrease in revenue from our battery-based energy storage products and solutions by $57.7 million, partially offset by an increase in services revenue of $4.7 million. The decrease in revenue from our battery-based energy storage products and solutions was primarily driven by decreased volumes of Gen6 solutions delivered in the current period due to timing based upon customer schedules partially offset by a period over period increase in changes in transaction prices of $7.1 million, from performance obligations substantially satisfied in previous periods. The increase in services revenue is primarily driven by additional battery-based energy storage products and solutions being deployed and transitioned to assets under management.
Previous wording
Total revenue decreased by $75.0 million, or 11%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in total revenue for the three months ended March 31, 2024 was mainly attributable to a decrease in revenue from our battery-based energy storage products and solutions by $80.2 million, partially offset by an increase in services revenue of $5.0 million. The decrease in revenue from our battery-based energy storage products and solutions was primarily driven by (i) decreased volumes of Gen6 solutions delivered in the current period due to timing, (ii) favorable impacts in the prior period due to price increase change orders issued during the prior period of $12.8 million where the performance obligations were substantially satisfied in previous periods, and (iii) decrease in revenue from consulting services provided to AES of $7.4 million.
Current wording
Total revenue decreased by $74.6 million, or 5%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The decrease in total revenue for the nine months ended June 30, 2024 was mainly attributable to a decrease in revenue related of our battery-based energy storage products and solutions by $86.0 million, partially offset by an increase in services revenue of $11.5 million. The decrease in revenue from our battery-based energy storage products and solutions was primarily driven by (i) decreased volumes of Gen6 solutions delivered in the current period due to timing based upon customer schedules, (ii) a period over period decrease in changes in transaction prices of $9.9 million, from performance obligations substantially satisfied in previous periods, and (iii) a decrease in revenue from consulting services provided to AES of $8.4 million. The increase in services revenue is primarily driven by additional battery-based energy storage products and solutions being deployed and transitioned to assets under management.
Previous wording
Cost of goods and services decreased by $108.4 million, or 16%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in cost of goods and services for the three months ended March 31, 2024 was mainly attributable to (i) the decrease of volume of Gen6 solutions delivered due to timing, (ii) net improvement of gross margins on the portfolio of newer Gen6 solutions projects delivered during the current period, and (iii) a decrease in warranty expense for the period of $7.7 million, due mostly to a change in estimate that occurred in the prior period but did not reoccur this period.
Current wording
Cost of goods and services decreased by $114.3 million, or 22%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease in cost of goods and services for the three months ended June 30, 2024 was mainly attributable to (i) the decrease of volume of Gen6 solutions delivered due to timing based upon customer schedules, and (ii) net improvement of gross margins on the portfolio of newer Gen6 solutions projects delivered during the current period due to operational efficiencies, partially offset by an increase in services cost due to additional battery-based energy storage products and solutions being deployed and transitioned to assets under management.
Previous wording
Cost of goods and services decreased by $79.3 million, or 8%, for the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The decrease in cost of goods and services for the six months ended March 31, 2024 was primarily attributable (i) net improvement of gross margins on portfolio of newer Gen6 solutions projects delivered during the current period and (ii) a decrease in warranty expense for the period of $7.5 million due mostly to a change in estimate that occurred in the prior period but did not reoccur in the current period. These decreases in costs of goods and services were partially offset by the favorable impact of a settlement of contractual claims with our largest battery module vendor of $19.5 million recognized in December 2022.
Current wording
Cost of goods and services decreased by $193.5 million, or 13%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The decrease in cost of goods and services for the nine months ended June 30, 2024 was primarily attributable to (i) the decrease of volume of Gen6 solutions delivered due to timing based upon customer schedules, (ii) net improvement of gross margins on portfolio of newer Gen6 solutions projects delivered during the current period due to operational efficiencies, and (iii) a decrease in warranty expense for the period of $11.2 million due mostly to a change in estimate that occurred in the prior period but did not reoccur in the current period. These decreases in costs of goods and services were partially offset by (i) the favorable impact of a settlement of contractual claims with our largest battery module vendor of $19.5 million recognized in December 2022 and (ii) an increase in services cost due to additional battery-based energy storage products and solutions being deployed and transitioned to assets under management.
Previous wording
Gross profit increased by $33.4 million, or 108%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in gross profit for the three months ended March 31, 2024 was primarily due to (i) net improvement of gross margins on the portfolio of newer Gen6 solutions projects in the current period and (ii) a decrease in warranty expense as described above in “Costs of goods and services.” These increases in gross profit were partially offset by (i) the favorable impacts in the prior period due to price increase change orders described above in “Total revenue” that did not reoccur in the current period and (ii) a decrease in gross profit from consulting services provided to AES of $5.4 million when compared to the prior period.
Current wording
Gross profit increased by $61.2 million, or 281%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in gross profit for the three months ended June 30, 2024 was primarily due (i) to net improvement of gross margins on the portfolio of newer Gen6 solutions projects delivered in the current period due to operational efficiencies as described above in “Costs of goods and services” and (ii) increases in revenue due to changes in transactions prices from performance obligations substantially satisfied in previous periods described above in “Total revenue.”
Previous wording
Gross profit increased by $57.7 million, or 135%, for the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The increase in gross profit for the six months ended March 31, 2024 was primarily due to (i) net improvement of gross margins on the portfolio of newer Gen6 solutions projects in the current period and (ii) a decrease in warranty expense as described above in “Costs of goods and services.” These increases in gross profit were partially offset by (i) favorable impacts in the prior period due to price increase change orders described above in “Total revenue”, (ii) the favorable impact of a settlement of contractual claims with our largest battery module vendor described above in “Costs of goods and services” that did not reoccur this period, and (iii) a decrease in gross profit from consulting services provided to AES of $4.2 million when compared to the prior period.
Current wording
Gross profit increased by $118.9 million, or 184%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The increase in gross profit for the nine months ended June 30, 2024 was primarily due to (i) net improvement of gross margins on the portfolio of newer Gen6 solutions projects in the current period due to operational efficiencies and (ii) a decrease in warranty expense as described above in “Costs of goods and services.” These increases in gross profit were partially offset by (i) decreases in revenue due to changes in transaction prices from performance obligations substantially satisfied in previous periods described above in “Total revenue”, (ii) the favorable impact in the prior period of a settlement of contractual claims with our largest battery module vendor described above in “Costs of goods and services”, and (iii) a decrease in gross profit from consulting services provided to AES of $6.8 million when compared to the prior period.
Previous wording
Research and development expenses decreased by $5.1 million, or 23%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in research and development expenses for the three months ended March 31, 2024 was primarily attributable to a $3.6 million reduction in salaries and personnel-related costs, including stock-based compensation, due to relocation of certain R&D activities to lower cost locations.
Current wording
Research and development expenses increased by $5.1 million, or 51%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in research and development expenses for the three months ended June 30, 2024 was primarily attributable to a $4.7 million reduction in internal software development costs capitalized related to development of our technology products when compared to the prior period.
Previous wording
Research and development expenses decreased by $8.8 million, or 21%, for thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023. The decrease in research and development expensesfor the six months ended March 31, 2024 was primarily attributable to a $6.8 million reduction in salaries and personnel-related costs, including stock-based compensation, due to relocation of certain R&D activities to lower cost locations.
Current wording
Research and development expenses decreased by $3.8 million, or 7%, for thenine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The decrease in research and development expenses for the nine months ended June 30, 2024 was primarily attributable to (i) a $6.6 million reduction in salaries and personnel-related costs, including stock-based compensation, due to relocation of certain R&D activities to lower cost locations, (ii) a reduction of consulting services of $2.9 million, and (iii) a reduction of severance costs of $1.6 million. This decrease was partially offset by (i) a $4.3 million increase in information technology cost allocations to support our growth and (ii) an increase in expenditures for materials and supplies of $3.3 million related to R&D activities for our forthcoming battery module manufacturing.
Previous wording
Sales and marketing expenses increased by $5.4 million, or 52%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in sales and marketing expenses for the three months ended March 31, 2024 was primarily attributable to (i) a $1.5 million factoring discount on sale of accounts receivable recorded in the current period and (ii) a $1.4 million increase in salaries and personnel-related expenses, including stock-based compensation, due to an increase in headcount.
Current wording
Sales and marketing expenses increased by $4.7 million, or 46%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in sales and marketing expenses for the three months ended June 30, 2024 was primarily attributable to (i) a $2.1 million increase in salaries and personnel-related expenses, including stock-based compensation, due to an increase in headcount and (ii) a $1.5 million increase in information technology cost allocations to support our growth.
Previous wording
Sales and marketing expenses increased by $7.3 million, or 38%, for the six months ended March 31, 2024, compared to the six months ended March 31, 2023. The increase in sales and marketing expenses for the six months ended March 31, 2024 was primarily attributable to (i) a $2.7 million increase in information technology cost allocations to support our growth, (ii) a $1.5 million factoring discount on sale of accounts receivable recorded in the current period, and (iii) a $1.0 million increase in salaries and personnel-related expenses, including stock-based compensation, due to an increase in headcount.
Current wording
Sales and marketing expenses increased by $12.0 million, or 41%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The increase in sales and marketing expenses for the nine months ended June 30, 2024 was primarily attributable to (i) a $4.2 million increase in information technology cost allocations to support our growth, (ii) a $3.0 million increase in salaries and personnel-related expenses, including stock-based compensation, due to an increase in headcount, and (iii) a $1.5 million factoring discount on sale of accounts receivable recorded in the current period.
Previous wording
General and administrative expenses increased by $12.3 million, or 39%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in general and administrative expense for the three months ended March 31, 2024 was primarily attributable to (i) an increase in salaries and personnel-related costs, including stock-based compensation, of $12.0 million due to higher headcount to support our growth and (ii) a $3.3 million increase in information technology licenses and consulting services related to implementation of new systems to support our growth. This increase was partially offset by a reduction in consulting services of $2.6 million, which were mostly related to the restructuring plan from fiscal year 2023 that is substantially completed and other non-recurring consulting services.
Current wording
General and administrative expenses increased by $7.0 million, or 18%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in general and administrative expenses for the three months ended June 30, 2024 was primarily attributable to (i) an increase in salaries and personnel-related costs, including stock-based compensation, of $11.3 million due to higher headcount and (ii) a $3.4 million increase in information technology licenses and consulting services related to implementation of new systems to support our growth. These increases were partially offset by (i) a $4.7 million increase in information technology cost allocations to other departments which reduces general and administrative costs and (ii) the capitalization of an additional $3.5 million in internal software development costs related to implementation of new systems.
Previous wording
General and administrative expenses increased by $18.8 million, or 30%, for thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023. The increase in general and administrative expenses for the six months ended March 31, 2024 was primarily attributable to (i) an increase in salaries and personnel-related expenses, including stock-based compensation, of $19.1 million due to higher headcount and (ii) a $5.3 million increase in information technology licenses and consulting services related to implementation of new systems to support our growth. This increase was partially offset by a reduction in consulting services of $2.3 million, which were mostly related to the restructuring plan from fiscal year 2023 that is substantially completed and other non-recurring consulting services.
Current wording
General and administrative expenses increased by $25.7 million, or 25%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The increase in general and administrative expenses for the nine months ended June 30, 2024 was primarily attributable to (i) an increase in salaries and personnel-related expenses, including stock-based compensation, of $30.4 million due to higher headcount and (ii) a $12.1 million increase in information technology licenses and consulting services related to implementation of new systems to support our growth. These increases were partially offset by (i) a $12.7 million increase in information technology cost allocations to other departments which reduces general and administrative costs and (ii) the capitalization of an additional $7.2 million in internal software development costs related to implementation of new systems.
Previous wording
Depreciation and amortization was relatively flat in the three months ended March 31, 2024, compared to the three months ended March 31, 2023.
Current wording
Interest income, net was relatively flat in the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Previous wording
Depreciation and amortization was relatively flat in thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023.
Current wording
Interest income, net was relatively flat in thenine months ended June 30, 2024, compared to thenine months ended June 30, 2023.
Previous wording
Other expense, net decreased by $2.8 million, or 93%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in other expense, net for the three months ended March 31, 2024 was primarily attributable to (i) a $2.1 million decrease in unfavorable foreign currency exchange losses for monetary assets and liabilities period over period and (ii) the factoring income of $1.5 million related to the MRPA (as defined below) and recorded in the current period, partially offset by gains that did not reoccur in the current period on changes in fair value of short-term investments of $0.6 million.
Current wording
Other expense, net increased by $1.3 million, or 177%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in other expense, net for the three months ended June 30, 2024 was primarily attributable to a $1.6 million increase in unfavorable foreign currency exchange losses for monetary assets and liabilities period over period.
Previous wording
Other (income), net decreased by $7.2 million, or 88%, for thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023. The decrease in other (income), net for thesix months ended March 31, 2024 was primarily attributable to (i) a decrease in favorable foreign currency exchange adjustments for monetary assets and liabilities of $7.1 million and (ii) gains that did not reoccur in the current period on changes in fair value of short-term investments of $1.3 million, partially offset by the factoring income of $1.5 million related to the MRPA recorded in the current period.
Current wording
Other income, net decreased by $8.5 million, or 95%, for thenine months ended June 30, 2024, compared to thenine months ended June 30, 2023. The decrease in other income, net for the nine months ended June 30, 2024 was primarily attributable to (i) a decrease in favorable foreign currency exchange adjustments for monetary assets and liabilities of $8.8 million and (ii) gains that did not reoccur in the current period on changes in fair value of short-term investments of $1.3 million, (iii) partially offset by the factoring income of $1.5 million related to the Master Receivables Purchase Agreement dated February 27, 2024 (the “MRPA”) recorded in the current period.
Previous wording
Net loss decreased by $24.5 million, or 66%, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The decrease in net loss for the three months ended March 31, 2024 is primarily attributable to (i) an increase in “Gross profit” and (ii) a decrease in “Research and development expenses” as described above. This was partially offset by (i) an increase in “General and administrative expenses” and (ii) an increase in “Sales and marketing expenses” as described above.
Current wording
Net income increased by $36.1 million, or 103%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase in net income for the three months ended June 30, 2024 is primarily attributable to an increase in “Gross profit” as described above. This was partially offset by (i) an increase in “Research and development expenses,” (ii) an increase in “Sales and marketing expenses” and (iii) an increase in “General and administrative expenses,” each as described above.
Previous wording
Net loss decreased by $36.2 million, or 48%, for thesix months ended March 31, 2024, compared to thesix months ended March 31, 2023. The decrease in net loss for thesix months ended March 31, 2024 is primarily attributable to (i) an increase in “Gross profit” and (ii) a decrease in “Research and development expenses” as described above. This was partially offset by (i) an increase in “General and administrative expenses”, (ii) an increase in “Sales and marketing expenses”, and (iii) an decrease in “Other expense (income), net” each as described above.
Current wording
Net loss decreased by $72.3 million, or 66%, for the nine months ended June 30, 2024, compared to the nine months ended June 30, 2023. The decrease in net loss for the nine months ended June 30, 2024 is primarily attributable to (i) an increase in “Gross profit” and (ii) a decrease in “Research and development expenses” as described above. This was partially offset by (i) an increase in “General and administrative expenses,” (ii) an increase in “Sales and marketing expenses,” and (iii) a decrease in “Other (income), net”, each as described above.
Previous wording
We believe the proceeds received from our IPO, cash flows from operations, which includes sales of accounts receivable under the MRPA, borrowings against notes receivable and borrowings available under the ABL Facility will be sufficient to meet our expense and capital requirements for at least the next 12 months following the filing of this Report.
Current wording
We believe the proceeds received from our IPO, cash flows from operations, which includes sales of accounts receivable under the MRPA, borrowings against notes receivable and borrowings available under the 2024 Revolver (as defined below) will be sufficient to meet our expense and capital requirements for at least the next 12 months following the filing of this Report.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The 2024 Revolver is secured by (i) a first priority pledge of the Company's equity interests in Fluence Energy, LLC and Fluence Energy Global Production Operation, LLC, (ii) first priority security interests in substantially all tangible and intangible personal property of the Company, Fluence Energy, LLC, Fluence Energy Global Production Operation, LLC and certain of its foreign subsidiaries, in each case, subject to customary exceptions and limitations, and (iii) a pledge of the Company's equity interests in certain of its foreign subsidiaries and security interests in certain assets of such foreign subsidiaries.
Current report — wording carried from elsewhere
The 2024 Credit Agreement sets forth that (i) loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus 2.00%, (ii) loans comprising each Term Benchmark Borrowing shall bear interest at the Term SOFR Rate or the Adjusted EURIBOR Rate, as applicable, plus 3.00%, and (iii) the loans comprising each RFR Borrowing shall bear interest at the Daily Simple RFR plus 3.00%, in each instance subject to customary benchmark replacement provisions including, but not limited to, alternative benchmark rates, customary spread adjustments with respect to borrowings in foreign currencies and benchmark replacement conforming changes. Fluence Energy, LLC is required to pay to the lenders a commitment fee on the average daily unused portion of the commitments through maturity, which shall accrue at the rate of 0.50% per annum. The 2024 Credit Agreement provides for a cash draw sublimit of $150.0 million as well as a letter of credit sublimit in the amount of $500.0 million if certain conditions are met.
Current report — wording carried from elsewhere
The 2024 Credit Agreement contains customary covenants for this type of financing, including, but not limited to, covenants that restrict our and certain of our subsidiary’s ability to: incur indebtedness; incur liens; sell, transfer, or dispose of property and assets; make investments or acquisitions; pay dividends, make distributions or other restricted payments; and engage in affiliate transactions. The 2024 Credit Agreement limits our ability to make certain payments, including dividends and distributions on Fluence Energy, LLC's equity, the Company's equity and other restricted payments. Under the terms of the 2024 Credit Agreement, Fluence Energy, LLC and its subsidiaries are currently limited in their ability to pay cash dividends to, lend to, or make other investments in the Company, subject to certain exceptions. In addition, we are required to maintain (i) from the Amendment Effective Date through December 31, 2025, Total Liquidity of no less than $150,000,000, (ii) from January 1, 2026 and thereafter, Total Liquidity of no less than $100,000,000 or a Consolidated Leverage Ratio as of the last day of any Measurement Period not to exceed 3.50:1.00, and (iii) certain other financial requirements at each Guarantor Coverage Test Date. Such covenants will be tested on a quarterly basis and upon the occurrence of other certain restricted payments, the incurrence of indebtedness, certain dispositions, and other specified transactions.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
2022 Overheating Event at Customer Facility
Previous report — wording carried elsewhere
(c) Amount for the three months ended March 31, 2023 included $2.0 million in severance costs and consulting fees related to the restructuring plan.