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Edited Transcript of BE.N earnings conference call or presentation 10-Feb-21 10:00pm GMT

·54 min read

Q4 2020 Bloom Energy Corp Earnings Call Feb 11, 2021 (Thomson StreetEvents) -- Edited Transcript of Bloom Energy Corp earnings conference call or presentation Wednesday, February 10, 2021 at 10:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Gregory D. Cameron Bloom Energy Corporation - Executive VP & CFO * K. R. Sridhar Bloom Energy Corporation - Co-Founder, President, Chairman & CEO ================================================================================ Conference Call Participants ================================================================================ * Benjamin Joseph Kallo Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst * Colin William Rusch Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst * Michael Weinstein Crédit Suisse AG, Research Division - United States Utilities Analyst * Noel Parks * Paul Coster JPMorgan Chase & Co, Research Division - Senior Analyst, Alternative Energy & Applied and Emerging Technologies * Pavel S. Molchanov Raymond James & Associates, Inc., Research Division - Energy Analyst * Stephen Calder Byrd Morgan Stanley, Research Division - MD and Head of North American Research for the Power & Utilities and Clean Energy * Suzanne Schmidt SMART Global Holdings, Inc. - IR Officer ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to the Bloom Energy Fourth Quarter 2020 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to Suzanne Schmidt with Investor Relations. Thank you. Please go ahead. -------------------------------------------------------------------------------- Suzanne Schmidt, SMART Global Holdings, Inc. - IR Officer [2] -------------------------------------------------------------------------------- Thank you, operator. Good afternoon, everyone, and thank you for joining us on Bloom Energy's Fourth Quarter 2020 Earnings Conference Call. To supplement this conference call, we have filed our Q4 2020 earnings press release with the SEC and have posted it along with supplemental financial information that we will periodically reference throughout this call to our Investor Relations website. The matters we will be discussing today include forward-looking statements regarding future events and the future financial performance of the company. These statements are subject to risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors, including those related to the COVID-19 pandemic that could cause actual results to differ materially from those contained in the forward-looking statements. These include statements about the effects of COVID-19 on the company's business results, financial position, liquidity and outlook. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our Q4 2020 earnings press release, we refer to GAAP and non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to, and not a substitute for or superior, to measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in our Q4 2020 earnings press release. Joining me on the call today are KR Sridhar, Founder, Chairman and Chief Executive Officer; and Greg Cameron, Chief Financial Officer. KR and Greg will review the operating and financial highlights of the quarter, and then we will take questions. I would also like to note that we are all dialed into this call remotely, so we apologize in advance for any audio issues that may occur. I will now turn the call over to KR. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [3] -------------------------------------------------------------------------------- Good day, and welcome to Bloom Energy's Fourth Quarter and Fiscal Year 2020 Earnings Call. Thank you for joining us. I'm delighted to report that because of our efforts in 2020, Bloom Energy is financially strong and even more resilient and transformative than ever before. 2020 was our best year yet on so many dimensions. Here are a few highlights. Our fourth quarter and full year revenue are a company record. Our annual non-GAAP gross margin is the highest to date. We improved our financial health by retiring the high interest debt that was coming due. We added 4 exceptional leaders to our management team with proven records of operational excellence. Our teams in supply chain, manufacturing, installation and service navigated through the myriad of local and global obstacle to safely manufacture, accept and service record numbers of Bloom servers, a clear demonstration of dedication and commitment. The announced applications and partnerships that leverage our platform in innovative ways. We are advancing the technology for our hydrogen fuel cells and electrolyzers, biogas power generation and carbon capture. We also forged a partnership to deploy our fuel cells on ship. The Bloom team's community spirit and contributions are also a highlight of 2020. We refurbished ventilators, provided emergency clean power to pop-up hospitals and hurricane victims and began co-hosting a COVID testing lab for local companies, schools and underserved community members. We made deliberate and tough decisions to ensure that we emerge out of the crisis as a stronger company and conserve our cash until we had strengthened our balance sheet. We delayed our manufacturing facility expansion in early 2020. We focused instead on increasing the production and reducing the cost of our current product in existing factories. We were able to sell out our manufacturing capacity for 2021 based on sales in our current geographies. This enabled us to defer market expansion-related expenses and further manage our cash position. We made sure that we kept our innovation team well funded. Since securing financing, we have initiated a plan to double our manufacturing output by the end of 2021. The new facility is architected and equipped to build our Gen 7.5 product. We are also making the requisite investment to expand to new states and countries. Our product, install and service cost reduction now enable us to offer our resiliency solutions in states where commercial and industrial customers pay $0.09 per kilowatt hour or more for power. At this price point, we are competitively positioned in a majority of the 50 states according to the U.S. Department of Energy data. In 2021, we will enter new states by securing orders with both existing and new customers. Outside the U.S., Bloom's Head of International Growth, Azeez Mohammed, is actively building a strong team to expand our global business. The maritime market is also a large growth opportunity for Bloom as we discussed during our Investor Day. I'm happy to report that Tim Schweikert, who was the President and CEO of General Electric Marine Solutions, has joined Bloom as a special adviser. Our collaboration with Samsung Heavy Industries is making good progress. With all these positive developments, we expect robust backlog growth in 2021. That expectation of robust backlog growth is strengthened by several policy and market tailwinds, both nationally and globally. In the U.S., President Biden's energy and climate agenda calls for the extension of existing clean energy incentives like the federal investment tax credit, increased subsidies for carbon capture and investments in blue and green hydrogen. The President has pledged to deploy billions of dollars to improve infrastructure and improve climate resilience. Bloom is ideally suited to provide the reliable power and clean energy solutions that the administration is looking for. Treasury Secretary Janet Yellen has pledged to pursue pro-market policies that augur well for increased investment in our infrastructure. Energy Secretary nominee, Jennifer Granholm, has called on American companies to partner in the clean energy transformation and create good paying jobs. She has emphasized the need for carbon capture and sequestration technology, which enable cleaner natural gas power generation, and ensure that the clean energy revolution also benefits gas-producing states. Bloom Energy's technology solutions and its American made products are well suited to meet these needs and aspirations. We have seen similar bold move from leaders in Europe and Asia in recent months. These policy announcements, coupled with market pull, create the potential for robust growth in several new areas. Let me highlight one such market opportunity, powering electric vehicles, which are becoming more prevalent. The federal government has recently pledged to convert its entire fleet into electric vehicles. General Motors aims to produce only zero-carbon vehicles by 2035, and many global automakers have set similar goals. Increased adoption of electric vehicles will put a greater strain on the aging electric grid. Toyota's President, Akio Toyoda, recently noted that Japan would run out of electricity in the summer if all cars were running on electric power. Even if the generation capacity were increased, the last-mile distribution upgrades in cities like New York, Tokyo and Mumbai would be cost prohibited. Additionally, power grids are often disrupted for prolonged periods of time after natural disasters. In a world replete with electric vehicles, resilient power is vital for safety and security, enabling people to evacuate, if needed, and for essential aid to be delivered. Bloom Energy offers that resilient solution. Our unparalleled always-on product includes 24/7 baseload power with very high availability, quality and point-of-consumption generation. Bloom provides an option for electric utilities to eliminate or mitigate the need to upgrade local distribution or create new generation capacity. This presents an opportunity for Bloom servers to be part of the infrastructure that powers up vehicles as fleet terminals or, more broadly, at a new network of charging stations. Our 400-volt direct current output is ideally suited for reliably, rapidly and most efficiently charging EV battery and offers the flexibility to operate on clean and green fuel. I want to stress the significant progress that Bloom Energy has made since the start of last year. We are a stronger company today than we were a year ago. We have balance sheet strength and flexibility. We have a very compelling value proposition. And our message to policymakers is resonating now more than ever. We are at the forefront of innovation in the energy sector. 20 years ago, we laid out a bold vision for energy transformation. We have been developing and delivering solutions based on that vision. We feel immensely encouraged by the momentum that we are generating and are confident in our ability to execute. With a strong leadership team, new solutions, new markets and multiple pathways to low- and zero-carbon energy, Bloom Energy is exceedingly well positioned for this moment. Let me now turn it over to Greg. -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [4] -------------------------------------------------------------------------------- Thanks, KR, and it's a pleasure to connect with everyone again. Before I jump into the financials, I want to highlight some of the changes we've implemented to our earnings process in order to provide additional transparency in a more standardized format. As you've hopefully already observed, we've increased the information in our earnings release. We will no longer be providing a shareholder letter but have included the relevant information into the earnings release. We have evolved the supplemental financial information presentation to provide additional insights into our operating environment. We've made these changes based on your feedback, and we'll incorporate additional input going forward. Now let me get into the financial performance for the fourth quarter and the year 2020. I'll be referring to the slide presentation posted to our website. While 2020 was an exceptionally challenging year, we were pleased with the progress we've made to advance our strategy, grow our business and deliver strong financial results, all while improving our balance sheet. We are well positioned in 2021 and beyond to enter new markets, evolve our technologies and build larger operating scale. We ended the year with 450 acceptances in the fourth quarter, up 16.6% versus the fourth quarter of 2019, bringing us to 1,326 systems for the total year, up 11% versus last year. These are record numbers for Bloom, both in the quarter and the total year, for acceptances. These acceptances also delivered record revenue for the fourth quarter of $249.4 million, up 16.8% versus the fourth quarter of 2019. Even in this challenging environment, we were able to improve our performance versus 2019, increasing our total year revenue by $9 million to $794.2 million for 2020. We are proud of our team's effort in a very difficult operating environment. Moving on to our profitability metrics. We continue to see improvement in our margins as we drove a reduction of nearly 17% in our total product cost for the year. In the fourth quarter, our non-GAAP gross margins were 27%, up 11.3 points (sic) [11.3%] versus the fourth quarter of the prior year and 23.1% for the total year, up 4.9 points (sic) [4.9%] versus 2019. As you'll see in the upcoming analysis on Slide 5 of the presentation, we continue to improve margins through lower product costs and better performance on installations. More to come on this later. The improvement in gross margins translated to improvements in operating income with non-GAAP operating income of $12 million for the fourth quarter, an improvement of $23.8 million versus the fourth quarter of last year. We improved our total operating income by $29.6 million versus 2019. We delivered adjusted EBITDA of $25.5 million for the fourth quarter and $45.5 million for the total year 2020. With the increase in acceptances and revenue, the fourth quarter was up $24.3 million versus prior year. This resulted in a total year increase of $2.6 million as the fourth quarter performance was enough to surpass the higher EBITDA profile of the repowerings of the second and third quarter of 2019. These margins and operating income performance, when coupled with the reduction in our debt costs, dramatically improved our adjusted EPS versus prior periods. With respect to our debt and balance sheet, it's important to revisit and, in the fourth quarter, we completed the retirement of the 10% senior secured notes due July 2024 and the conversion of the remainder of our 10% convertible notes due December 2021. This addressed our near-term maturity overhang and, when compared to last year, improved our cash position by $39 million while reducing our debt outstanding $131 million. Overall, we're pleased with our performance in 2020 and encouraged by the fourth quarter both in our ability to grow revenues and maintain our trajectory on profitability. These are meaningful proof points on our journey to the objectives we shared at Analyst Day. We feel we have a strong franchise with our core product. It's a platform that's flexible and adaptable. As we execute on our growth pillars, we can build additional applications for hydrogen fuel cells, electrolyzers, marine, biogas and carbon capture technologies. Now let's take a look at our bookings and backlog as we only provide this onetime each year. Even in a very difficult environment, we're pleased that we were able to maintain our backlog of nearly 2,000 systems. Customers, such as hospitals, universities and retailers were impacted by COVID, especially early in the year. But as we proceeded through the year, each quarter, we saw an increase in our bookings as customers reengaged. We are encouraged by the continued commercial momentum and are hopeful to see additional opportunities with the new administration's focus on clean infrastructure. In addition to our system backlog, we have a service backlog of $3.4 billion, in line with the increase in our installed base. When combined with our system backlog, our total backlog is $4.4 billion. As we discussed during the Analyst Day presentation, there is currently enough system backlog for nearly all of our planned acceptances required to support the $950 million to $1 billion of revenue targeted for 2021, meaning, within the U.S. market, we're not dependent upon any new bookings in 2021 to support our projections. And for our international business, given the short time frame between booking and acceptance, we planned 2021 acceptances either identified, in pipeline or backlog. Given our growth expectations, we've reached the point where we will be making investments to increase our manufacturing capacity. Today, we have capacity to support 200 megawatts of revenue system stacks. We are securing an additional 200 megawatts of fuel cell manufacturing line as part of our Bloom 7.5 introduction. This combined capacity will provide 400 megawatts of fuel cell or nearly 1 gigawatt of electrolyzer capacity that we can allocate based upon market demand. As KR mentioned earlier, a significant benefit of our platform is that we can utilize the same manufacturing for all our applications with limited investment or customization. And the investments we do make are very efficient, an investment of $50 million to $75 million required to double our capacity as a payback of less than 1 year when fully utilized. On Bloom 7.5, we completed our first customer installation in December. The unit is functioning as expected, and we are gathering performance data. We will operationalize the manufacturing of Bloom 7.5 and increase production throughout 2021. And in 2022, Bloom 7.5 will cross over to being the majority of our systems being manufactured. Given the strong performance of our current Bloom 5.0 technology, as demonstrated in our margins, for now, we'll continue to manufacture it at its current levels. The new investments will be made for Bloom 7.5. And the manufacturing facility that we are securing will have the space to triple our capacity of our first line. With 2021 underway, our team is focused on increasing our bookings to support at least 25% growth in 2022. We've made adjustments to our sales force and focused on expanding in the U.S. with additional states and through new partnerships both domestically and internationally. These expansions, coupled with the technology road map of our fuel flexible platform, provide multiple avenues to secure new bookings to support our growth. Moving on to Slide 5 for our margin analysis. Here, we've broken down our non-GAAP gross profit and margins by source of revenue. Our overall increase in non-GAAP gross margins is relatively driven by improvements to the product margin, resulting from continued reductions in product costs. For the fourth quarter, we achieved our targeted 40% non-GAAP gross margin for product. We had a good quarter on our performance on installations where we nearly broke even. For the year, we were roughly the same as 2019. Remember, this is a part of our business where we're targeting breakeven as we pass along the budgeted cost of installation to our customers. Going forward, we are exploring partnerships that would be accretive to our margins as those partners will perform the installs and earn the revenue, thus reducing the operating complexity and dilution to our margins. For consistency, we have included the dollar per kilowatt analysis that we have historically provided in our shareholder letter. The profit per kilowatt results are similar to the total business with an increase in profitability in 2020 versus 2019, especially in the fourth quarter of 2020. As we go forward, I would expect that each quarter, there may be some variation in our profitability depending upon acceptance mix. Our service business lost nearly $7 million for the fourth quarter. We have committed resources to achieve profitability in the near future. If you turn to Slide 6, we lay out the changes and results to our service business. KR referenced this in his opening remarks, so I'd like to share some additional details. We have more than doubled the life of our power modules since 2012 and expect our most recent vintages to season with over a 5.5-year life. We've also made changes using data from our systems in the field and how to optimize the fleet by targeting specific power modules for replacement. These changes are important as they reduce the frequency of providing power modules, which is a significant portion of our service cost. In addition, since 2012, we've reduced the cost of each of these power modules by 61%. The combination of all of these changes results in less service costs as we are required to provide less power modules and those we do provide are at a lower cost. In the second half of 2020, we made an investment to provide additional power modules to increase the power output for our customers, which increased our cost. As part of our pathway to profitability, we plan to make that investment over the course of 2 years. And when additional modules became available, we took the opportunity to accelerate the shipments and move the business towards profitability sooner. At Analyst Day, I committed to the service business being profitable by 2022. Now with these investments, we are projecting to achieve profitability for the year 2021, earlier than we anticipated. And we expect the service revenue to grow and profitability to be sustained over the long term, a very positive development for our overall business. As part of our commitment for increased transparency, we are planning to host an investor event this month to provide additional detail on the economics and processes underlying our service business. We think these focused presentations and the follow-on discussions are a good way to go a little bit deeper into our business and help the financial community understand our approach. I look forward to sharing more on the team's performance as we deliver through 2021. The next slide is an analysis of our cash flows, cash balances and debt levels. A few highlights on the page, going forward, we will focus our cash performance on cash flow from operating activities, or CFOA, as this provides insights into the cash-generation capability of the business. While we were a user of cash in 2020, I note we reduced our usage in the fourth quarter through an increase in our EBITDA and a reduction in our cash payments for debt interest. These improvements were not enough to offset the needs for working capital within the quarter. Specifically, we secured an additional $22 million in safe harbor inventory to ensure our customers retain the ITC benefits scheduled to be reduced at year-end. While ITC was extended for 2 years in December, it occurred so late in the year that we were unable to significantly adjust these inventory levels. Over the course of 2021, we expect to utilize these inventories while avoiding additional investments, thus reducing our working capital. Our cash balances have increased since last year. Total cash increased by $39.3 million to $416.7 million, and the unrestricted component grew by slightly more, up $44.1 million versus prior year to reach $246.9 million. The reduction in unrestricted cash from the third quarter was driven by the payoff of the 10% senior secured notes due July 2024 for approximately $79 million. We have reduced our recourse debt by $117 million over the [course of the year] both by paying off high coupon notes and the exchange to equity of our legacy convertible debt. These reductions and the decrease in comparable interest rate for the convertible green bonds issued in August have reduced our annual debt service cost by $44 million since the first quarter. These savings place Bloom in a much stronger liquidity position than we were just 9 months ago and provide us with the opportunity to further invest in growth. On Slide 8, we revisit the outlook we provided in December, and we are reaffirming all of our 2021 targets. For revenue, based upon the visibility of our backlog and pipeline, we expect to be between $950 million and $1 billion. Non-GAAP gross margins are targeted at around 25%, and we expect to deliver a positive non-GAAP operating income of roughly 3% of revenue. With the extension of ITC, we should be able to reduce our inventory levels, creating less need for working capital, providing an opportunity to improve on the cash metric. As CFOA is a new metric for us to forecast, I've left the outlook as approaching positive. As we proceed through the year and gain more visibility, I will provide updates on this expectation. While we are not providing quarterly guidance, each earnings call, we plan to provide an update on performance and expectations versus our 2021 framework. I'll endeavor to highlight anomalies, while incorporated in our internal plan, may not be apparent in the total year framework. One example, just as in prior years, we expect the second half revenue to be greater than the first half. Also, like most product companies, we expect to be a user of cash in the first half of the year as we build inventories for the second half deliveries. In summary, we had a very strong operating performance in the fourth quarter. And given the environment, it was a really good year for us in 2020. We are gaining momentum in our commercial operations and are expanding our footprint in the U.S. and internationally. We continue to have great relationships and growth opportunities in South Korea and are focused on new market opportunities and geographies as well as partnerships both domestically and internationally. Our service business outlook is improving, and we now expect to be profitable a year sooner. Our liquidity position has strengthened versus a year ago with increased cash and reduced debt. Lastly, we are reaffirming our 2021 framework. Bloom Energy is well positioned and has a road map to create significant shareholder value. With that, operator, let's open up the line for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from the line of Stephen Byrd from Morgan Stanley. -------------------------------------------------------------------------------- Stephen Calder Byrd, Morgan Stanley, Research Division - MD and Head of North American Research for the Power & Utilities and Clean Energy [2] -------------------------------------------------------------------------------- Hope you all are doing well. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [3] -------------------------------------------------------------------------------- Great, Stephen. -------------------------------------------------------------------------------- Stephen Calder Byrd, Morgan Stanley, Research Division - MD and Head of North American Research for the Power & Utilities and Clean Energy [4] -------------------------------------------------------------------------------- I wanted to explore a couple of technology and product developments, if I could. Maybe first, just on carbon capture. I'm just interested in your latest thoughts in terms of both the technical product feasibility as well as sort of the commercial interest in the product and sort of your general views on the progression. KR, you noted that there certainly is potential support here at the federal level. But I was just curious on your thoughts on your own product development and sort of commercial rollout. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [5] -------------------------------------------------------------------------------- So Stephen, great question, and this is extremely important. If you look at whether it is the Department of Energy, whether it's the IPCC, whether it is IEA, they all talk about carbon capture being essential in this transformation as we go forward, an abridge to decarbonizing, which is the most important thing for climate change. And the beauty of our technology here, there is a change since we last talked to you of connecting the hydrogen demand and carbon capture together. And that makes this even better, really one plus one being greater than two kind of an example here, right, which is with our server, we can now bring in natural gas and we can produce blue hydrogen, electricity and carbon capture. And we can dial between the amount of blue hydrogen we produce and the electricity we produce. If you remember our old technology flow diagram from the hydrogen analysis that we showed you, coming out of our system, we can separate out hydrogen and carbon dioxide. We can either send the hydrogen back into the fuel cell to produce electricity or we can supply that hydrogen for hard-to-decarbonize industrial uses, which becomes a premium product, so being able to work in 20-, 50-, 100-megawatt chunks where we can produce tri-generation, if you want to think about it that way, of electricity, hydrogen and carbon dioxide together. So this is a technology that's being rapidly developed in the lab. We are working on it. And I think given what you have seen in the federal government and the interest in saying all of the above to decarbonize as a technology, I'm very bullish about it. Did you understand the ability to combine carbon capture and blue hydrogen? -------------------------------------------------------------------------------- Stephen Calder Byrd, Morgan Stanley, Research Division - MD and Head of North American Research for the Power & Utilities and Clean Energy [6] -------------------------------------------------------------------------------- Yes, that makes sense. And the ability to sort of toggle and flex makes sense. And I guess I would have thought the energy sector broadly would be highly interested in this product and interested in rollout. Is that fair to say that there is interest in the energy sector for this? -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [7] -------------------------------------------------------------------------------- There is interest in the energy sector for this, and we are building our lab demonstrations and we're working very hard to demonstrate it. And the beauty with our system that, again, I want to emphasize, is unlike many technologies that you develop in the lab in small scale but when you scale it, you have scaling issues. Because of the modular architecture that we have, we can build this add-ons to the platform and demonstrate it at a power module level. And the scaling is not a scaling issue for us unlike anybody else, so that's one advantage. And the second advantage here is also, while we are focused on CO2, let's also remember that this is the only technology that does not bring about the air pollution and does not require water and does not need that big land use you need, in some other cases, an EP to permit. You put those things together, it becomes a very compelling value proposition. -------------------------------------------------------------------------------- Stephen Calder Byrd, Morgan Stanley, Research Division - MD and Head of North American Research for the Power & Utilities and Clean Energy [8] -------------------------------------------------------------------------------- That makes sense. And then maybe just for my other area of focus, EV charging. And this, I guess, carry links to the power density point you raised. And I think it's an important point that as we think about fast charging, it is challenging for utilities to put in place the infrastructure needed for very high-voltage, very fast charging. So I see the potential advantage here of what you offer. Could you just maybe speak a little bit more to the path to sales for this and sort of how you might approach this? I'm just kind of curious, everything from likely types of customers to any certifications or just other sort of qualifications needed to sort of have your product be a viable option here for fast charging. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [9] -------------------------------------------------------------------------------- Sure. So there are 3 or 4 things that I want to talk about and for people to appreciate, which I am sure you do, but for everyone to understand, right? Just imagine a significant double-digit adoption of electric vehicles happening very soon. We don't have to imagine, it's going to happen, right? So when you see those happen in metro areas, if every family has an electric car and they need to charge it, the increase in the amount of electricity needed in any one zip code is going to be so large at that last-mile, transmission, distribution upgrade that needs to happen. And imagine having fleets of vehicles whether -- either delivery vehicles, warehouse vehicles, all those things. If they had a fleet of vehicles that need to be charged, if there are bus depots that need to get charged, school buses that need to get charged, a significant amount of power that needs to come in. And that now poses a very good option for the utility to consider: am I going to invest in transmission, distribution, last mile issues that are very difficult to permit or do I want to put resilient power right where I can charge and the efficiency of not having the transmission, distribution market. The efficiency of not converting power from DC to AC and then back to DC to charge a vehicle, to get that high-voltage right where you need it, to not create instability in the grid, it's a huge advantage. So the question you ask there is, with all these advantages, who is an ideal customer? That's a great question. And it could be -- depending on the locations and depending on the customers, it could be very different. In many places, I would imagine, the utility would want to own that asset and be able to provide that power and rate base it because they can defer T&D cost, and it's a win-win for the customer and the utility and for the local rate player. In some other cases, it could be the fleet vehicle owners that want to offer not only the fleet vehicles but also the charging as a service. And in that case, it will be the fleet owner that will be the customer. In some cases, it could be the large corporations that own these, very similar to them buying the PPA electricity from us, would also want us to be part of it. And in some other cases, it could be the charging infrastructure people that would want to not provide the charging infrastructure but also have the generation so they can avoid the demand charges and standby charges that come from the utility. So it could be all of the above. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- Your next question comes from the line of Michael Weinstein from Crédit Suisse. -------------------------------------------------------------------------------- Michael Weinstein, Crédit Suisse AG, Research Division - United States Utilities Analyst [11] -------------------------------------------------------------------------------- I guess in the past, you've been limiting the backlog updates to once a year. And I think that because of the lumpiness of bookings over the course of the year, it could make it a highly volatile statistic to be, I guess, updating. But I wonder if in this case, for this year, maybe it might make sense to maybe a mid-year update on it just to -- I mean you've said it's -- you expect a pretty good year for bookings this year, and you know you're going to get asked a lot about this for the rest of this year, so... -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [12] -------------------------------------------------------------------------------- Yes. Michael, it's Greg. So listen, we went through and got a lot of feedback, especially around the Analyst Day, on what the expectation was from folks in how they think about it. And overwhelming -- for sure, no one was encouraging us for every quarter to put that out just because of the volatility, some of our large bookings and the distraction that may create from our operating performance. I think, though, going forward, rather than maybe doing it quarterly or even semiannually, what I'll endeavor to do is similar to how we're approaching our total year framework and not providing specific guidance on each quarter, I think there's insight that we can give on each one of these calls on how we're doing. Without providing you the number, right, are we making progress, are we seeing activity internationally, are we getting into the additional states that we thought we would, are we getting interest there or is that leading to bookings, and are we establishing the partnerships we want. So feedback well taken and, going forward, I'll take it on personally to make sure I'm providing some transparency on that even if we don't publish a number. -------------------------------------------------------------------------------- Michael Weinstein, Crédit Suisse AG, Research Division - United States Utilities Analyst [13] -------------------------------------------------------------------------------- Great. And also on service profitability, I think you mentioned it might -- it will be coming in earlier than expected. Is that this year? Do you think you'd be profitable on a run rate basis by the end of this year? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [14] -------------------------------------------------------------------------------- Yes, yes. So we are -- Glen and the team there has done an amazing job of positioning that business both in driving cost out of the individual power modules as well as the cost to provide service. The backlog continues to grow -- or the installed base continues to grow. And we fully expect that business to be profitable for the total year 2021. And on top of that, we expect revenues to grow in line with the installed base and to maintain that profitability on a go-forward basis. So -- and you'll remember that, that was a business that, from a profitability standpoint, struggled and incurred some big losses in the past. So we feel like we've turned the page on that business, and we're really encouraged to see that to be a contributor to our gross margins and the net positives to our operating income. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [15] -------------------------------------------------------------------------------- Michael, let me add a line -- Michael, this is KR, let me add a line to what Greg just said, right? Ever since the first time I think you said -- you were asking me questions. This was one of the big concerns in the industry and for all of you, right, on service and what does this mean for our long-term contracts and things like that. So the key point that Greg made, and I will emphasize again, we will break even and get to profitability this year. But every year, we expect that margin to grow. And this is going to be a huge, good annuity business for us. And this is what we believe in, this is what we built the infrastructure for and we can see a clear pathway to that. -------------------------------------------------------------------------------- Michael Weinstein, Crédit Suisse AG, Research Division - United States Utilities Analyst [16] -------------------------------------------------------------------------------- When do you think you'll get to 20% gross margins? I think that was the original goal, right? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [17] -------------------------------------------------------------------------------- Yes. So we're pricing at that today, so those deals go in. And as we continue to mix and as well as continue to take the cost down in our current contracts, it will move towards profitability. I wouldn't commit to you. It's not a 21%. It's not a 22%. As we forecast it out, it's probably more in the 23% range until we get to that level of profitability, maybe 24% on the outset. But we will definitely be profitable, and we'll move up to that 20% as we continue to price at that level and book new deals at that level. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [18] -------------------------------------------------------------------------------- And again, the key point here is the contracts we are writing today over the life of the contract will be at that or better margins as what we expected, right? -------------------------------------------------------------------------------- Michael Weinstein, Crédit Suisse AG, Research Division - United States Utilities Analyst [19] -------------------------------------------------------------------------------- Yes. Another question, could you -- do you think we'll see a cash flow-positive situation for 2021, especially since no safe harbor purchases are going to be needed? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [20] -------------------------------------------------------------------------------- Yes. So we've spent a lot of time on that metric, and I try to give you the context how I see it. It is a new metric for us to forecast. We've obviously been publishing our CFOA and investing and financing components for a long time. But as we forecast that number, it is not the easiest number to forecast. It has a bunch of different variables across the business that all come into that. I would agree with you that not having the ITC and the safe harbor, it's the $22 million that we invested in '21. And then there was probably that number and again some that was originally in our '21 plan. So those should be good tailwinds. I want to get through a quarter or 2 on it, but we are targeting on being cash flow positive, and we are much more confident in our approaching positive. And I'm hopeful that I can update that outlook for folks in a quarter or 2 as we just get some more operating experience under our belt, if that makes sense. But I would agree with you, based on the changes to the ITC, based on the improvements that we expect in our EBITDA, based on the reductions in our debt service cost, all those are big tailwinds to getting us from being a cash user to a cash provider. -------------------------------------------------------------------------------- Michael Weinstein, Crédit Suisse AG, Research Division - United States Utilities Analyst [21] -------------------------------------------------------------------------------- Got it. One more question, just to get it on the record, what's the service life of a Gen 5 module now? And where do you think 7.5 is going to come in at? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [22] -------------------------------------------------------------------------------- Yes. So I'll give you -- on 5, so there's a little bit -- there's always the -- what we're observing versus what we're seeing. So from the things that are out in the field that are at that median life, they are observed now right at about the 5 year, if not a little above that. The ones that we are forecasting, so the 5.0 that have gone out last year as well as will go out this year, are well over 5.5 and continuing to push forward. Our expectation, as we roll out Gen 7.5, is that we'll continue to extend that life towards 6 years as we get more experience in operational capability and our manufacturing, but our goal is to be moving towards at 6-year life. -------------------------------------------------------------------------------- Operator [23] -------------------------------------------------------------------------------- Our next question comes from the line of Paul Coster from JPMorgan. -------------------------------------------------------------------------------- Paul Coster, JPMorgan Chase & Co, Research Division - Senior Analyst, Alternative Energy & Applied and Emerging Technologies [24] -------------------------------------------------------------------------------- So it sounds like you are growing at the pace at which you are investing capacity this year. Is that a true statement? Are you essentially leaving money on the table? Or is it -- could you be growing faster? What is the growth rate that you think the market can support? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [25] -------------------------------------------------------------------------------- Yes. It's a great question, Paul. And now that we've got the balance sheet in place and giving us a lot more flexibility, we're very happy that we've secured this manufacturing space for our stack manufacturing. We're going to put our first line in for 200 megawatts. There's 160,000 square feet there. We can put 3 lines in place, and it's relatively capital efficient. So for the $50 million to $75 million that we put in, for another $150 million, we could get to a total 600 megawatts amount of fuel cells capacity, and that would get us towards 2 gigawatts of electrolyzer capacity. So I don't think that for the -- for our current list of orders and where we're at that we are limiting our acceptances based on our manufacturing capacity. But it is my full expectation that I will be back to KR and the Board sometime through the course of the year in timing when we add that additional capacity, so we don't run into that situation. -------------------------------------------------------------------------------- Paul Coster, JPMorgan Chase & Co, Research Division - Senior Analyst, Alternative Energy & Applied and Emerging Technologies [26] -------------------------------------------------------------------------------- Is it conceivable, too, that you could do upside to 2021 revenues? Or is it just simply you've locked in now? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [27] -------------------------------------------------------------------------------- Yes. I think, Paul, we've got the space. We're putting it in place. We've ordered the long-lead items, but they're really not going to be fully operationalized towards the back end of the year. So we are a bit limited on that. But as we start to move into '21 and we build the order book like we expect, that capacity will come online and support growth that year. -------------------------------------------------------------------------------- Paul Coster, JPMorgan Chase & Co, Research Division - Senior Analyst, Alternative Energy & Applied and Emerging Technologies [28] -------------------------------------------------------------------------------- Got it. Okay. And then just a little bit on the international markets, which still mystify us because so much of it is career and little else at the moment, but you've talked of other parts of Asia. And you've got a team now that's focused on it. You haven't mentioned Europe at all, which is -- seems to be a hot bed of hydrogen. Can you just give us some sense of what's happening? Where do you think your best prospects are? And are you going to build it and then they will come? Or are you going to follow your customers into the markets? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [29] -------------------------------------------------------------------------------- It's a little bit of -- a little different strategy depending upon the geography we're in. I was on the phone this morning at 7:00 a.m. bright and early with Azeez Mohammed's extended team. He's done a really good job of finding some industry expertise in market, especially in Europe, for some people that can help advise as we look for partners to build out. As you know, Paul, the amount of euros that are being invested, especially in Europe, especially around hydrogen as well, is a huge opportunity around our electrolyzer. But we think there's opportunities for our fuel cell technology there as well, maybe not everywhere where there is strong resiliency in the grid, but there's definitely opportunities for it. So I think as you think about Europe, the countries that you think about are the ones you'd expect us to be working on: the Frances, the Germanys, the Italys, the Spains, the U.K.s. And we're putting resources on ground there to begin to engage. I think the Middle East is incredibly attractive. And I think parts of Asia are attractive as well. So I'm very hopeful that the resources that Azeez has been building out will be bringing opportunities for us, and I would expect you to be hearing about those over the course of the year. I think it's a huge opportunity. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [30] -------------------------------------------------------------------------------- And Paul, this is KR, to add to the 2 questions that you asked. They are the right questions you should be asking us. And I think we made it very clear, until we secured our balance sheet and stabilize financially, we were prudent in the use of our cash and we made sure that we sweated as much of the assets that we had already invested in the factory and got the maximum out of it. We reduced our product cost heavily. We invested in the future and build to that. And as soon as we secured it, starting in Q4, we have greenlighted both the factory expansion as well as, as you're seeing very visibly, put money into market expansion. And this is a long-lead market expansion so expect, starting this year, to see expansion both in the 50 United States as well as international. -------------------------------------------------------------------------------- Paul Coster, JPMorgan Chase & Co, Research Division - Senior Analyst, Alternative Energy & Applied and Emerging Technologies [31] -------------------------------------------------------------------------------- Got it. My last question then is you've seen one of your competitors really sort of go for gold. Every opportunity that's coming along of any scale, they're grabbing and they're unafraid of entering into joint venture partnerships and accepting third-party cash to scale fast. And now you could easily build another -- if it's only $50 million to $75 million to build the capacity in this big chunk, then you could easily double, triple, quadruple your capacity with the help of third parties in other regions. Is this a strategy that you are open to? Or is there -- you seem to be the embodiment -- in this space at the moment. I'm just trying to understand what your risk appetite is. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [32] -------------------------------------------------------------------------------- Look, I don't think -- given that we went out and our investor base, our management team, our leadership, our employees, for 10 years, worked on the technology that nobody could make happen in 100 years and we know how to do it, I don't think anybody can question whether we have the appetite for risk. We have the appetite for risk, and we take the most prudent risks that we need to take. We think the market opportunity is so large, it's not the first person who comes to the market and grab something out there. This is the transformation of an energy industry that's multitrillion dollars. And the factories we are building, unlike what other people do, are flexible to build fuel cells, to use any kind of fuel, to be able to do a carbon capture, to either produce hydrogen for the automotive market or electricity for the automotive market. If you look at transportation, we cover both ends of it. If you look at electricity generation, we can do it at small utility scale with carbon capture. We can do it right at the site for resilience. If you look at industrial heat being replaced by electricity, we can electrify. So we have -- we are building factories that build these platforms where we don't have to wait for a market -- one market to develop within a time or not have our capacity, we can use that capacity for all these other features. So we think we are building a very prudent approach to how we build for the future. And we are marching to that and very comfortable with it. As Greg pointed out, now that we are focusing on the top line, we are going to make sure that we are not going to leave money on the table, to answer your question earlier, when the opportunity arises. But we want to be prudent about watching when the market develops as opposed to what people think it will develop into. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- Your next question comes from the line of Colin Rusch from Oppenheimer. -------------------------------------------------------------------------------- Colin William Rusch, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [34] -------------------------------------------------------------------------------- Can you give us a sense of how much of the backlog in your expected 2021 revenue is coming from the international markets? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [35] -------------------------------------------------------------------------------- Yes. It's -- on the backlog, it's hard because they all price -- not price, the acceptance time frame is different. I think the way I'd answer it, we broke out how our revenues are today kind of internationally on that percentages. I would say, going into next year, the total year will look very similar to what the total year this year looked like on it. I would say, early in the year, my expectation is there are some large deals that will get shipped, that, that ratio may be a little bit tilted internationally. But as we go through the course of the year and complete some of our U.S. installations based on their size, I'd expect to get very close back to the ratio we had for this year. -------------------------------------------------------------------------------- Colin William Rusch, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [36] -------------------------------------------------------------------------------- Okay. And then from a project-level capital perspective, can you give us a sense of where project capital is pricing out and what you're doing with kind of the available pricing power that, that enables? It seems to me that with interest rates where they're at right now, there's an awful lot of give in terms of the pricing model out to your customers. -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [37] -------------------------------------------------------------------------------- Yes. So we're in that process now. We're working with a couple of providers on it. We definitely expect it to price inside of where it's been traditionally. That's partly driven by some of the improvements in our own credit outlook as well as continue to work with new providers to provide that capital. I'd tell you that the biggest issue remains not the quantity in capital, the biggest issue in the marketplace remains the tax capacity that's there. So while we were all very encouraged to see ITC extended, and I understand there's some bills out that would not only extend but increase, the most hope that I would ask from our friends who are in decision-making places was to help us create the capacity on that. We're doing very well on our process as we go through it. But it's an effort to make sure that we are securing that for the behalf of our customers. And given the amount of capital that's out there, bringing in more tax capacity would definitely make -- for the whole industry, make it easier. -------------------------------------------------------------------------------- Operator [38] -------------------------------------------------------------------------------- Your next question comes from the line of Noel Parks from Tuohy Brothers. -------------------------------------------------------------------------------- Noel Parks, [39] -------------------------------------------------------------------------------- Just a couple of things. As you're in the process of making the transition from the Bloom 5.0 to the 7.5 modules, just curious, could you just sort of talk about -- a little more about how the manufacturing transition happens? I know you said that the 5.0 volumes would probably be relatively unchanged while you ramp up 7.5. I was just curious, as far as actual implementation of the 7.5, do you -- or does it make a difference? Or are there advantages to rolling them out as upgrades in place to existing installations versus going into a brand-new installation just with all the 7.5s? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [40] -------------------------------------------------------------------------------- Yes. So Noel, it's a great question. So how we're operationalizing manufacturing of 7.5, that is part of the new facility that we're securing in California. So we are tooling that, all the tools we're buying are specific to the 7.5. We're doing it in a way in which we're not going to disrupt 5.0 because it's a great product, we continue to find ways to take cost out of it and it does what we need. But we'll operationalize 7.5. And once we figure out all the process of that, we will -- we can expand from 1 line to 2 and, ultimately, to 3 lines within that space. But listen, the plan is -- we always are backward-compatible, in everything around our different rollouts of our technologies. And for the most part -- I'd say, for the complete part, our customers are indifferent on which technology that we ship. So it will be -- for us, we can continue to supply the 5.0. As 7.5 comes on, we'll begin bringing that into our installation process, and that will be really just part of our new installations to start with. And at some point, that will be the predominant technology out there, and that will be part of our replacement power modules that we'll bring into the fleet as part of our service offering. -------------------------------------------------------------------------------- Noel Parks, [41] -------------------------------------------------------------------------------- Great. And just to touch, again, a little bit more on international expansion. You've talked about having a good success in hiring with your new International Business Chief -- Head in command. And any thoughts as far as what that might mean for sales cycles. I'm sure it wouldn't move the needle on the full company's numbers. But also, is there a point that we're going to be seeing pretty distinctive ramp-ups in sales and marketing expenses, maybe in advance of realizing the revenues from new partnerships and so forth? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [42] -------------------------------------------------------------------------------- Yes. Noel, hopefully, you saw -- we included the page, I didn't reference it in my comments, but it was posted. We're making investments not only to our R&D and our technology but to our sales and marketing team. And as part of what we lay out on our financial model here, we're going to improve our gross margins each year to get to -- from the 25% to 30% like we laid out at Analyst Day. We're going to increase our investment in -- that will show up as expense not only in our R&D but in our sales and marketing. Part of that, a big part of that, will be building out our presence internationally. Listen, I think the right model to have will be one through partners. Similar to what we use with SK in South Korea. So that team is focused on finding partners for us to distribute our products through. And I wouldn't expect to build out a direct sales force internationally. But they'll be -- these are very senior people that are very steep in their geographies and their -- and can be very helpful to us to not only make introductions but to build the types of partnerships that we're going to need. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- Your next question comes from the line of Ben Kallo from Baird. -------------------------------------------------------------------------------- Benjamin Joseph Kallo, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [44] -------------------------------------------------------------------------------- Just a question about SK because I get it from investors. I'm trying to differentiate -- between the difference between what you're doing with them and what Plug is doing with them in their investment. And then just a second question is minutia. With the CO2, is there another revenue stream you can get from capturing that, like maybe -- like bricks or soda or something like that? Or what do you do with CO2 when you capture that? -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [45] -------------------------------------------------------------------------------- Sure. So Ben, let me answer that question, and I'll keep it fairly short because we are running over time. And so first question on SK. Look, they are a large Korean conglomerate. They were in energy before they formed the partnership with us, and they have many lines of their energy business. And each one of those business units operate as independent businesses. SK E&C, with whom we have the partnership, is different from SK E&S that Plug signed the deal with; and b, that SK E&C are working on stationary power generation and scale in Korea and also with hydrogen electrolyzers and hydrogen fuel cells. And that relationship is strong and, going forward, very well. We are not exclusive to them. They are not exclusive to us. And -- but it's a very strong partnership. And the fact that they are signing up other deals shows that they are completely committed to the synergy transformation. And there are many other areas like the automotive there. It is not a play for us, and they need other players and partners. With respect to CO2, there is a 45Q federal subsidy that -- our understanding is the administration is going to improve upon for capturing carbon. And that carbon being provided for use in so many industrial cases, it's definitely an application. It will definitely -- for the early applications of CO2 capture, it will be there. But once CO2 capture becomes ubiquitous, the amount of CO2 generated will be very large. And at that point in time, you would have to sequester it rather than just utilize it. But in the early days, or at least a few years, there'll be lots of uses for that carbon dioxide to be utilized in industrial processes. -------------------------------------------------------------------------------- Operator [46] -------------------------------------------------------------------------------- We have time for one last question. Your final question comes from the line of Pavel Molchanov from Raymond James. -------------------------------------------------------------------------------- Pavel S. Molchanov, Raymond James & Associates, Inc., Research Division - Energy Analyst [47] -------------------------------------------------------------------------------- I'll ask just one. This one's kind of high level. Cost of capital, as we see in -- across cleantech is extremely low. You have moved away from the Bloom Electrons model many years ago. But I'm wondering, would there be any appetite for reviving the recurring revenue nature of the business in terms of leasing out assets on your own balance sheet? -------------------------------------------------------------------------------- Gregory D. Cameron, Bloom Energy Corporation - Executive VP & CFO [48] -------------------------------------------------------------------------------- Pavel, it's good to hear you. And as the next GE capital person who had a $100 billion balance sheet of leasings in his last job, it's definitely something we think about. But I think as we prioritize our capital today, where we really want to make sure we're using it is for investing in our manufacturing capacity, in investing in our technology and investing in our brand and product management. I think there'll probably be a few areas, especially where we can't find sources of capital at a competitive basis, then I'd be willing to use some of our own balance sheet there to help facilitate maybe a new technology or a new application. But for the most part, given the amount of capital that's out there and where there's great expertise on that, I'll leave it for there. Our cost of capital wouldn't be one in which we'd look attractive given where other providers would be in the space. And if anything, what we're finding, as we line up with some of our future providers, is they can take on some of the operating complexity that we've had here, right? We've had -- our teams that had been built over time help build different structures and things for our customers. I'm anxious to find people who we can leverage the partnerships knew that and need to take that talent and work with them to apply them on some other opportunities that we have in the company. It's a sure way of saying it's not something I don't think about, especially given my background. But I think, given our priorities, we're going to focus on growing the business from there and leave the leverage to people who have it. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- That concludes Q&A for today. I now turn the call to CEO, KR Sridhar, for closing remarks. -------------------------------------------------------------------------------- K. R. Sridhar, Bloom Energy Corporation - Co-Founder, President, Chairman & CEO [50] -------------------------------------------------------------------------------- Thank you very much. I know that we're running way over time. So I'll keep this very short. To our employees, to all our stakeholders who helped build 2020 into a tremendous year under these challenging circumstances, I want to say thank you, and to our shareholders, thank you for your continued support. If you just look at where we are as a company, we're so much stronger today. In any place where commercial customers are buying electricity for $0.09 or higher, we can economically compete with them. Think about the strength of that value proposition, the resilient power. You don't have to worry about natural disasters. You don't have to worry about future cost of electricity coming to your grid. You don't have to worry about sustainability because we are future-proofing you. You can start with natural gas. You can go to biogas. You can get carbon capture. You can use hydrogen. You can -- if you electrify your vehicles, we offer the best option for you. That combined value proposition with not polluting the air, not using water, having electricity where you need it so you can control your electricity destiny, means that with our existing customers and with our new customers, we can at least approach a majority of the 48 United States, the contiguous United States, today. And that is room for growth. In addition to that, what we're doing internationally helps us grow. So when we look to 2021, we are excited to be building more capacity. We're excited for our top line growth. And optimistic that we will have a great year and a great future going forward. We are extremely well positioned and couldn't be more thrilled with the momentum you're experiencing. Thank you very much. -------------------------------------------------------------------------------- Operator [51] -------------------------------------------------------------------------------- Thank you, everybody, for joining today. That concludes today's conference call. You may now disconnect.