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Why Bloom Energy is ‘really excited’ about Biden’s energy policies

Bloom Energy CFO Greg Cameron to discuss the company’s fourth-quarter results — which missed on earnings but topped revenue estimates — as well as the state of the fuel cell sector and what President Joe Biden’s policies mean for the industry.

Video Transcript


MYLES UDLAND: All right, welcome back to "Yahoo Finance Live" on this Thursday morning. We continue our discussion inside the C-suite across American business. One of the hottest trades over the last year has been what's happening in the renewable energy space. And Bloom Energy has certainly been a part of that.

Joining us now to talk about the company's latest results in its fiscal 2020 is Greg Cameron. He is Bloom Energy's CFO. Greg, Thanks so much for joining the show. I'd love to just begin with the guidance, both that you are issuing it at the annual run rate of where revenue got to in the fourth quarter and also just what you're seeing in the business that enables you to even offer guidance because obviously, at the beginning of 2020, so many companies were forced to pull that outlook. But now, clearly, you guys have enough visibility to start talking about 2021.

GREG CAMERON: Yeah, Myles, thank you. And thank you for having me today. So I joined Bloom Energy about a year ago. And at that time, we suspended our guidance through 2020 as we worked through the impacts of COVID on our business.

And as we went through the year, we were deemed an essential business in both of our large manufacturing sites. So we were able to continue to manufacture. Incredibly grateful to our supply chain team and operations team at just their ability to continue to work through there. And as we got through the year, we got more and more confidence, not only on our ability to manufacture, but our ability to install our projects within the US.

So we held an analysts' day in December. It was kind of our first big event since our IPO three years ago. And at that time, we talked about a framework going forward where Bloom Energy, we feel, could be a 25% to 30% growth company. We think we can expand our margins from 25% of gross margin today to 30% and move to being operating income-positive, expand those margins, and work our way towards being cash flow from operations-positive.

So we laid out that framework over five years. And then for next year, for 2021, this current year, we laid out our path as part of that with our objectives of being a $950 to $1 billion revenue company, which would be 25% over last year. We look at our fourth quarter performance, which we feel we had a very strong fourth quarter as a proof point that we were able to grow our revenues, expand our margins, and move closer to cash flow-positive. So we think it's valuable proof point on that journey.

JULIE HYMAN: Greg, it's Julie here. You guys, as we just showed on the screen, had a 16.6 increase in acceptances to 450, meaning people who have systems who turn them on. Who are your customers? I mean, I have to cop to not fully understanding fuel cells, how they work, where they fit into the energy ecosystem. So if you could explain briefly, if you don't mind, where they fit in and who your clients are.

GREG CAMERON: Sure. I'm a liberal arts econ major. So I had to learn the technology when I joined Bloom a year ago. So at its simplest form, a solid oxide fuel cell operates, it converts to electricity without combustion. So there's no SOx, there's no NOx, there's no particulates coming out of the machine. So it's very clean.

Our primary customers within the US are data centers, hospitals, universities, other industrials where we were able to provide for them very efficient very clean power on-site. We have a very strong franchise with our partner SKENC in Korea, where we have a strong business there as well, where we predominantly sell into the generation, the genco space. But we've got a broad customer base.

We are expanding who we sell to within the United States, given the work that the team's done on reducing our cost of the product. We're a lot more competitive. So we're going to be expanding to almost half the states within the US, starting with five this year where we think we're cost-competitive.

And at the same time, we've hired on a team internationally that is going to expand as well. And we're looking for similar types of relationships like we have in Korea to expand internationally as well. So we think there's a lot of opportunity for people to leverage our fuel cells as a way to provide clean and resilient power. It's going to be a big deal here as we move forward, especially with some of the disruptions we're seeing in the grid. Our ability to create the electricity on-site for many places and not have it disturbed if there are weather events, severe weather events, which we're going to continue to deal with--

BRIAN SOZZI: Greg, what policy or set of policies from the Biden administration do you think will be most financially beneficial to your company?

GREG CAMERON: Yeah, so we're really excited about what we're seeing happening in Washington. And we think it's a lot about an effort here to address climate change. We think it's a lot about investing in our aging infrastructure. And we think it's a lot to do with American jobs. So we are very excited to see the discussion that's going on there.

We were happy to see some of the extensions in the investment tax credit, which our customers take advantage of, utilize as part of their financial equation. I think similar types of activities there where we can continue to see the extension and maybe an increase back to where those rates were, an ability for folks to monetize those tax benefits would be very beneficial for our customers as they continue to evolve.

We've been able to reduce the cost of our product. 17% was the number I focused on last year. That's almost 30% year over year. So we continue to get more competitive. But these incentives are, for sure, a way which helps customers to make sure that they are seeing a return on the investments that they make. So we're really excited about what we're seeing in Washington right now.

MYLES UDLAND: Greg, just quickly before we let you go, I mentioned at the top that renewable energies has been such a popular trade within the market. I think investors are very excited. I'm curious as the CFO of a company where the stock price has gone up a couple hundred percent over the last few months, how you think about that dynamic and what it does for you, if anything, at this point.

GREG CAMERON: Yeah, so listen, I think within the company, when I got here last April, we had some issues that we needed to address. The company was already in process of doing that. So I was happy to participate in that. But we spent a lot of time through 2020 addressing some of the issues that we had with our debt and our liquidity.

So we exited 2020 in a much stronger balance sheet position. And I think the market recognized that as both an increase in our cash and a reduction in our debt. So as I look around the rest of the market, I think Bloom Energy, our valuations that we're seeing right now are extremely attractive relative to our peers. I think the work that we needed to do around the balance sheet has been done. I think our technology roadmap, as we continue a path toward decarbonization, is there. So I think Bloom Energy is at an inflection point. And I think it would continue to be an attractive investment for investors.

MYLES UDLAND: All right, Greg Cameron is the CFO at Bloom Energy. Greg, really appreciate you taking some time to talk with us this morning. I hope we can stay in touch.

GREG CAMERON: Great. Thanks so much for having me.