Q3 2024 Fluence Corporation Ltd Earnings Call Transcript
Key Points
- Fluence Corp Ltd (EMFGF) has seen strong growth in its core business units, particularly in industrial water and reuse, and industrial wastewater and biogas, with revenue growth of 17% and 15% respectively.
- The company's shift in focus to SPS and recurring revenue products and services has resulted in improved gross margins, increasing to 31.8%, up 5.5% from the same period in 2023.
- Fluence Corp Ltd (EMFGF) has significantly reduced SG&A and R&D costs, realizing $3.1 million in cost savings year-to-date, which is 20% lower than the same period last year.
- The company has repaid $17.7 million of debt year-to-date and replaced the Upwell facility with a more favorable revolving facility, providing considerable interest savings and operating flexibility.
- Fluence Corp Ltd (EMFGF) has a strong sales pipeline, now 88% higher than a year ago, and a backlog expected to convert to revenue in the next 12 months sitting at over $70 million, 39% higher than at the beginning of the year.
- The company's financial performance has been negatively impacted by project delays, particularly the Ivory Coast addendum, which has pushed expected 2024 revenue into 2025.
- Revenue through Q3 of 2024 was $30.3 million, 28% lower than the same period in 2023, primarily due to the reduction in revenue from the Ivory Coast project.
- Fluence Corp Ltd (EMFGF) has experienced a year-to-date EBITDA loss of $5.1 million, largely due to delays in the Ivory Coast project and ongoing softness in the China market.
- Operating cash flow in Q3 was negative $3.5 million, underperforming compared to forecasts due to delays in the Ivory Coast project and collection delays in other regions.
- The company has revised its guidance downward to $50 million to $60 million of revenue and an EBITDA loss of $3.5 million to $4.5 million, reflecting the impact of project delays and challenges in the China market.
Good day, everyone. Welcome to our Q3 2024 business update call as the moderator stated, I am Tom Pokorski, the Fluence CEO and Managing Director. With me on the call today is Doug Brown, our Chairman of the board, as well as Ben Fash, our CFO.
By now, many of you have likely seen the update report we lodged with ASX. I'll make some brief comments about the year-to-date and then I'll turn over to Ben to comment on the details. Then we'll take questions.
So, our results for the year have primarily been negatively affected by project delays. The most significant of which is the Ivory Coast addendum work as well as a sluggish China market.
Despite the disappointing financial performance, we still remain encouraged that the core areas of our business are performing well and showing healthy growth. Last year, about the same time, we told you that we were going to transition away from large CES projects for a number of reasons. Primarily due to lower margins and lumpy cash flow. But also,
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