Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fluence Corp Ltd (EMFGF, Financial) met its revised revenue and EBITDA guidance for 2024, despite earlier challenges.
- The company experienced significant growth in its core businesses, excluding the impact of the Ivory Coast addendum and Southeast Asia and China units.
- Recurring revenue increased by over 30% compared to fiscal 2023, indicating a successful shift in focus to SPS and recurring revenue lines.
- Fluence Corp Ltd (EMFGF) has a strong backlog entering 2025, with over $30 million in contracted backlog, an increase of approximately 30%.
- The company has improved its cash flow and expects to be cash flow positive in 2025, with a revolving credit facility in place to support new projects.
Negative Points
- 2024 was a disappointing year financially, with revenue down 26.5% compared to 2023 due to delays in the Ivory Coast project and weak performance in China.
- The company missed its order forecast for the second half of 2024, including a significant $38 million Bimini Boo expansion still under negotiation.
- Fluence Corp Ltd (EMFGF) faced cash flow issues in 2024, primarily due to project delays and the repayment of the Upwell facility.
- The Southeast Asia and China business units underperformed, prompting a restructuring and leadership changes.
- The company is not yet in a position to pursue very large contracts independently, requiring financing partners for bigger projects.
Q & A Highlights
Q: When does Fluence Corp Ltd expect to become profitable?
A: Tom Pokorski, CEO, stated that the company expects to have a profitable year in 2025.
Q: How will the fires in California affect potential orders?
A: Tom Pokorski, CEO, mentioned that it's hard to tell the exact impact, but there could be some water infrastructure work resulting from the fires. They are also considering strategies to work with emergency system providers for potential rental opportunities.
Q: What are the chances of exceeding fiscal 2025 guidance?
A: Ben Fas, CFO, indicated that exceeding guidance would likely require securing a larger project from their pipeline. However, they do not plan their budgets based on these potential projects, although several are in the pipeline.
Q: Is the cash flow now in a position to pursue bigger contract deals?
A: Ben Fas, CFO, explained that while cash flow has improved, allowing pursuit of some larger jobs, they are still cautious. They aim to demonstrate sustainable cash flow positivity before securing significant financing for very large contracts.
Q: Does the current share price align with the company's current state and strategic plan?
A: Ben Fas, CFO, refrained from commenting directly on the share price but expressed confidence that as operating results improve, the share price should follow. The focus is on demonstrating profitable growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
