Good day and thank you for being here. Welcome to the Fluence Energy Fourth Quarter twenty twenty one Earnings Conference Call. At this moment, all participants are in listen-only mode. I would now like to turn the conference over to your speaker today, Sam Chong, Treasurer, Investor Relations. Please proceed.

Welcome everyone to our earnings call for the fourth quarter of fiscal year twenty twenty one, which ended on September thirty. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of Federal Securities Laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of nineteen ninety five. These forward-looking statements are neither promises nor guarantees and are based upon our current estimates and various assumptions and are subject to material risk and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. These and other risks are described in our filings made with the Securities and Exchange Commission. We encourage you to review these filings for a discussion of these factors, including our annual report on Form ten K for the fiscal year ended September thirty, twenty twenty one, which will be filed next week. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, and the company disclaims any obligation to update such statements for new information. This call will also reference non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is available in our earnings materials on the company's Investor Relations page at ir.fluenceenergy.com.

Thank you, Sam. I would like to extend a personal welcome to our investors, research analysts, employees, and customers who are listening to our first analyst call as a publicly traded company. This morning, I'm going to share our market outlook and provide an overview of our business for our new investor base. Afterwards, I will give an update on some recent developments and then I will hand the call over to our Fluence CFO, Dennis Fehr, who will discuss the financial performance and as well as provide some high-level revenue guidance. Before I jump into the market outlook, I would like to extend a sincere thank you to the entire Fluence team for their passion and commitment to delivering best-in-class products, services, and digital solutions to our customers. Our team has demonstrated tremendous strength and resilience during the ongoing pandemic. It is thanks to their contributions that we have successfully completed our IPO, generating almost a billion dollars to help track our next phase of growth. I will start on slide four on the quarterly earnings presentation with an overview of our business opportunity. Climate change is real and it causes an existential problem. We are finally seeing governments, companies, and citizens take serious steps to address this issue. The electric sector plays a great responsibility in leading that effort as the world transitions away from fossil fuels towards renewable energy. In fact, renewables are now one of the cheapest sources of electricity further accelerating this monumental shift. This huge transformation is driving three revolutions that are happening at the same time. The first is the decarbonization of our planet and the transition to clean energy to help address climate change. The second is the electric revolution, which is the electrification of everything. The third one is the digital revolution. Machine learning and artificial intelligence are disrupting traditional processes, redefining energy markets, and enabling new opportunities. Fluence uniquely sits at the core of these three revolutions. As clean energy assets proliferate, they also create issues for the grid because it was not originally designed to handle intermittent and variable power generation for renewables. Fluence energy store systems and digital applications enable the clean energy transformation of the grid. Third-party research shows that the clean energy transition will likely require over one hundred trillion dollars of investment over the next thirty years. Bloomberg New Energy Finance also projects one hundred and ninety four gigawatts of install energy storage capacity by twenty thirty alone. As conventional generation assets retire and are replaced by cheaper renewables the need for energy storage compounds even further as the grid will require energy storage for stability and reliability. This opportunity is immense and Fluence is well positioned to maintain our leadership position in energy storage solutions and digital applications. Turning to Slide number five, Fluence is uniquely situated to drive the global transition to clean energy, led by pioneers of the energy storage team members and leaders with the most experience in the industry. Many members of our current team literally invented the use of lithium-ion batteries on the grid. Fluence is a digital disruptor and customers far and wide recognize the value of our Fluence IQ platform. While still in the early stages, we are already optimizing over eighteen percent of all renewables in Australia with our Fluence IQ platform. One of the biggest factors that sets us apart from our competitors is our scale. We have one of the largest installed bases that helps to expand our ecosystem, product adoption, and cross-selling opportunities. Our scale is evident by our global offices and supply chain that has enabled us to operate in thirty markets across the world. We are also battery diagnostic not manufacturing batteries. This is a strategic move for us as battery chemistries are constantly changing and evolving, enabling us to move quickly along the technology curve as better solutions come to the market. And most importantly, we have secured over one point seven billion dollars in contracted backlog, which provides us with visibility to future cash flows that will be used to grow and accelerate our business. Turning to slide six. I would like to highlight this tremendous total addressable market. Starting with energy storage products, BNEF is forecasting a twenty-four percent compounding annual growth rate between twenty twenty and twenty thirty. This equates to over thirty four gigawatts of new installations in the year twenty thirty alone. For reference, at the end of the quarter, we had an aggregate of three point seven gigawatts of energy storage products deployed and contracted. Also, based on BNEF forecast, energy storage services are expected to grow thirty one percent compounded annually between twenty twenty and twenty thirty. This equates to over one hundred and ninety three gigawatts of community installed services. For reference, at the end of the quarter, we had approximately two point seven gigawatts under management and contracted for our energy services. And most exciting is the enormous total addressable market for our Fluence IQ digital platform, where the TAM is nearly eight thousand gigawatts. The TAM is so vast because we can optimize not only third-party energy storage products but also pure renewable assets, such as wind, solar, and hydro that do not have any storage components. This means the growth potential of Fluence IQ is not limited by the installed energy base. As of the end of the quarter, Fluence IQ is optimizing or has contracted four point seven gigawatts. So, it's easy to see why we are extremely excited about Fluence IQ's future. Turning to slide seven on our quarterly results. In both the fiscal fourth quarter and full year we will deliver record operational performance in our Fluence ecosystem, comprised of our three business lines. Looking first at new orders, our contracted megawatts of energy storage products increased year over year by fifty five percent. This resulted in a record one thousand and three hundred megawatts. Additionally, our services business grew nearly seven fifty percent year over year, which resulted in almost two thousand megawatts, a new all-time record for Fluence, and our Fluence IQ continued to build momentum as evidenced by our recent contract awards supporting our recurring revenue growth strategy. Speaking on Fluence IQ, we are extremely encouraged by the performance of our platform. In fiscal year twenty twenty one, we booked two point seven gigawatts of new orders, compared to one point three gigawatts of new orders for energy storage products, demonstrating the importance of Fluence IQ and its ability to optimize renewables beyond storage. We see substantial growth in all business lines, including our IQ platform setting the stage for a robust twenty twenty two and beyond. As we experienced this strong growth in order trends, like so many other companies, we have also faced challenges from excessive shipping charges as well as other project charges that are a compounding effect of the COVID-19 pandemic. In the fiscal fourth quarter, some of our APAC-based customer sites have experienced temporary work interruptions due to COVID-19. As such, we were not able to progress our installation workforce storage equipment at these affected sites as planned. These temporary site closures resulted in revenue recognition delays, as well as unanticipated costs related to these delays. We view these delays as temporary; however, we are realistic that the newly discovered COVID variant, Omicron, could prolong these delays even further, but it is still too early to make that determination. We are managing ongoing disruptions in our global supply chain, including the shipping of our products. We have experienced delays in delivery times, increases in shipping rates, and decreases in freight availability. These issues have resulted in delays for a number of product deliveries, driving increases in short-term expenses, including expedited shipping costs and payments for overtime labor. In response, we are working on multiple solutions to improve our global supply chain, including negotiating guaranteed capacity on ocean freight liners with Tier one shipping companies to ensure our products are delivered from our contract manufacturing location in Vietnam to our end customers around the world. We will continue to monitor freight markets closely and take additional measures to protect our customers and our revenue from future supply chain disruptions. This includes establishing a regional contract manufacturing and distribution model. In the coming several months, we expect to finalize the terms with our contract manufacturer to serve our North American market and thus reduce our reliance on shipping our products to Southeast Asia to the Americas. I would also like to make a few comments on the recent overheating event that occurred at one of our customer's facilities. On September fourth, twenty twenty one, a three hundred megawatt energy storage facility owned by one of our customers experienced an overheating event. Fluence served as one of the contractors for this facility to provide installed energy storage technology, which was completed in fiscal year twenty twenty one. As our customer reported, the facility experienced an overheating issue, which resulted in the system shutting down as designed to further mitigate any possible damage. No injuries were reported from the incident. The facility has been taken offline as teams from Fluence, our customer, and the battery manufacturer investigate the incident. We are currently unable to estimate the impact, if any, that this incident may have on our financial results. As information becomes available, we will update our shareholders accordingly. Turning to slide eight, I am pleased to announce Fluence signed a contract during the quarter to provide our energy storage products to the largest energy storage portfolio in Europe featuring a total of one hundred and five megawatts of energy storage systems across two different locations. This order was placed by a repeat customer, which we believe reflects the value that we have already brought to that customer. This order was also accompanied by a ten-year service contract, providing us with visibility to future recurring revenue. Also, we recently announced a significant contract in Australia for the Hazelwood project with our partners, ENGIE and Macquarie. This is a significant achievement for us. The award includes one hundred and fifteen megawatts of energy storage, plus a twenty-year service contract, and the assets will be optimized by our Fluence IQ platform. This is the perfect example of our cross-selling opportunities that enable us to expand our ecosystem for all three business lines. Continuing with these exciting awards, I'm pleased to announce we have recently signed our first contract with a customer in Taiwan. This commences our strategic entrance into the Taiwanese market, an area we see tremendous growth over the next ten years and will play a large part in our overall strategy. For our services business line, during the fourth quarter, we recognized a hundred percent attachment rate for our services for energy storage growth that we sold in the EMEA region. This is truly a spectacular result and also built on our model to generate recurring revenue through our services and Fluence IQ platform. For Fluence IQ during the fourth quarter, we deployed our platform to optimize the trading of the largest solar farm in the southern hemisphere with an equivalent output of power of one hundred and fifty thousand. Additionally, just in the fourth quarter alone, we added over one gigawatt under management as customers are realizing the value that Fluence IQ can deliver. In summary, and turning to slide nine, we have a tremendous opportunity in front of us as a result of the enormous total addressable market for energy storage, and digital applications. We have positioned ourselves as a market leader with our scale, experience, and first mover advantage. Not only that, we are seeing very little momentum from foreign and domestic governments relating to policies and regulations most recently seen at the twenty twenty one United Nations Climate Change Conference. In addition, recent U.S. Legislation, including the enacted infrastructure bill and the pending Build Back Better bill are extremely supportive of our strategy and business. The infrastructure bill was a good first step to paving the way for increased grid stability and reliability, but we are even more encouraged by what we are seeing in relation to the BBB bill. This potential legislation may enable our industry to accelerate deployments at the pace needed to decarbonize the electric sector by twenty thirty five, which aligns with Biden’s administration stated priorities. Additionally, the enactment of this legislation will create a stable long-term demand signal needed to accelerate the clean energy transition and incentivize a robust energy storage supply chain, domestically and abroad. Ultimately, the BBB bill will allow our customers to greenlight more projects, many of which were previously shelved due to not meeting internal rate of return requirements. While we are hopeful the bill moves forward, we do not include any potential upside of government subsidies or policy changes in our business model, and that would be an incremental benefit. I would like to thank our founders, Siemens and AES, who created Fluence as a joint venture in twenty eighteen. We will continue to operate with the tagline, Fluence, a Siemens and AES company, as they will continue to support our mission. As a global player, we are managing through supply chain challenges stemming from the global pandemic. We are taking short-term and long-term actions to mitigate the ongoing and future shipping delays. We view these delays as temporary, with the impact being strictly a shift in revenue recognition, which we expect to realize in the coming quarters. Finally, we have a best-in-class balance sheet and strong visibility to future cash flow, thanks to our significant backlog of one point seven billion dollars. This growing backlog will enable us to continue to invest in our people and our business so that we can transform the way that we power our world for a more sustainable future. And with that, I will turn it over to Dennis.

Thank you, Manuel, and good morning to everyone on the call. During today's call, I will recap our fourth quarter and fiscal year twenty twenty one results, discuss our outlook for fiscal year twenty twenty two, and talk through our capital allocation plans. As Manuel stated, we delivered a record year of new orders and have been successfully populating our ecosystems from both sides. We achieved record order intake of energy storage products and came out very strong on Fluence IQ orders. Turning to slide eleven, let me talk you through the numbers in the first table. In fiscal year twenty twenty one, we contracted a record one thousand three hundred eleven megawatts of energy storage products and a record one thousand nine hundred fifty-nine megawatts of energy storage services. Services megawatts exceeded product megawatts because we successfully sold service contracts on products sold in previous years. Overall, our aggregate attachment rate on services as of September thirty, twenty twenty one was approximately seventy-four percent. This attachment rate is very encouraging as it is a continuous proof of our ecosystem strategy and provides us with recurring revenues and visibility to future cash flows. As previously elaborated, we are seeing very strong demand for our Fluence IQ with a total of two thousand seven hundred forty-four megawatts contracted, which provides future cross-selling opportunities for our products and services. Now, moving to the second table. Despite delays in supply chain and temporary site restrictions due to COVID-19, demand in megawatts that we deployed for our energy storage products more than doubled, growing one hundred and eleven percent from the prior fiscal year. Due to our strong contracting and in part due to the delays, contracted backlog megawatts grew forty-three percent. Our product pipeline is being driven by strong tailwinds from the market and demand for proprietary generation fixed products and stood at fourteen thousand one hundred sixty megawatts at the end of fiscal year twenty twenty one. Turning to Energy Storage Services. Assets under management grew one hundred and eighty percent, while contracted backlog grew three hundred twenty-two percent from the prior year, driven by the strong contracting activities and the attachment rates mentioned earlier. Like our storage products, our services pipeline remains robust, standing at ten thousand nine hundred thirty megawatts at the end of fiscal year twenty twenty one. Moving to our Fluence IQ digital platform. During Q1 of fiscal year twenty twenty one, we acquired AMS. Since that time, our digital product has demonstrated tremendous growth and strong prospects for future growth. At fiscal year-end, digital assets under management were three thousand one hundred eight megawatts, while contracted backlog was one thousand six hundred twenty-nine megawatts. Our digital pipeline was three thousand three hundred one megawatts at the end of fiscal year twenty twenty one. Let me point out that our digital pipeline typically converts about three times faster than our product and service pipeline. Our combined assets under management and contracted backlog for the digital business exceed our products deployed and contracted backlog, reflecting the importance of Fluence IQ for our ecosystem and demonstrating that the growth of Fluence IQ is going beyond energy storage. Turning to slide twelve. Our fiscal year twenty twenty one revenue grew twenty one percent to a record six hundred eighty-one million versus five hundred sixty-one million for fiscal year twenty twenty. In the fourth quarter, revenue decreased twenty one percent as a result of mentioned shipping and COVID-19 related delays, whereby revenue recognition was delayed from the fourth quarter fiscal twenty twenty one into fiscal year twenty-two. We view the delays in revenue recognition as temporary with expectations that it will be resolved by H2 of fiscal year twenty twenty-two. Let me point out that this is strictly a shifting of revenue and does not represent any contract terminations. Turning to slide thirteen. Gross profit for fiscal year twenty one was negative sixty-nine million, compared to eight million in fiscal year twenty twenty-one. In the fourth quarter, gross profit was negative fifty-nine million. This decrease was driven by sixty-eight million of non-recurring expenses in Q4, which included sixteen point seven million related to non-recurring excess shipping costs, forty-eight point two million related to project charges, which are compounding effects of the COVID-19 pandemic, and two point six million related to the twenty twenty-one Cargo Loss Incident. Adjusting for these non-recurring items, we generated adjusted gross profit of fifteen million in fiscal year twenty one versus nine million in fiscal year twenty twenty. In the fourth quarter, adjusted gross profit declined in line with the decline in revenue. As Manuel already discussed, we are taking steps to help mitigate the impact of continued ocean freight challenges, such as securing guaranteed availability with Tier one shipping companies. The shipping delays have compounding effects on additional expenses that we are required to incur, such as additional expenses for contractors waiting on equipment and other project charges. For the first half of fiscal year twenty twenty two, we are forecasting at least fifty million to fifty-five million of non-recurring expenses related to shipping and other COVID-related items versus seventy-two million in fiscal year twenty twenty one. We are currently seeing that these expenses are decreasing from quarter four twenty-one to the first half of fiscal year twenty twenty-two. Continuing to slide fourteen, EBITDA in fiscal year twenty twenty one was impacted by the same non-recurring expenses as to gross profit. In addition, we have four point eight million of recurring IPO-related expenses, which did not qualify for capitalization. Other than that, we increased our expenses to support the future growth of the company, which drove the adjusted EBITDA to negative sixty-five million in fiscal year twenty twenty one. Moving on to slide fifteen and our revenue outlook. Based on our current contracted backlog of one point seven billion, we are providing guidance for fiscal year twenty twenty-two revenue in the range of one point one billion to one point three billion. Our guidance takes into consideration of potential delays in revenue recognition resulting from shipping and COVID-19 related delays and our ability to recognize revenue from our energy storage product on a timely basis in H2 fiscal year twenty twenty-two. Turning to slide sixteen. We would like to highlight the seasonality that we have in our revenues and order intake. This seasonality is due to customers' desires to have products operational in time for the peak demand in the Northern hemisphere. Historically, we recognized approximately seventy percent of our revenue mostly in our fiscal second half. This aligns with our patterns for order intake. As a result, fiscal first-half results will usually be lower compared to our second-half results. However, for this upcoming first half of fiscal year twenty twenty-two, there is a caveat to the seasonality; we expect a good portion of the delayed revenue from the fourth quarter fiscal year twenty twenty-one will be recognized during H1 fiscal year twenty two, leading to a slightly stronger revenue during that time. Moving on to page seventeen. As we look ahead to our next phase of growth, we would like to highlight our capital allocation strategy, which was bolstered by the strong balance sheet that we have set in place following the IPO. With the post IPO debt-free cash balance of approximately eight hundred fifty million, we are well positioned to invest to further strengthen our ecosystem. As we deploy capital, we will always stay true to our strategic framework, enhancing unit economics, expanding recurring revenues, and developing structured offerings with the primary focus on the former two initiatives. M and A is an additional avenue to help us execute our strategy, and we have a strong track record of making and integrating strategic acquisitions such as AMS. This concludes our prepared remarks.

Thank you. Our first question comes from Mark Strouse with JP Morgan. Your line is open.

Yes, thank you very much for taking our questions, and welcome to the public markets. Can we just dig into the comments around the project timing? Can you just talk about what gives you the confidence in claiming that you think that there will be a rebound in the second half of this fiscal year? Is that just the macro that you are seeing or is that based on specific commentary from your customers?

Thank you, Mark. And good morning, and thanks for welcoming us to the public market. Very exciting times. Yes, as we mentioned, the shipping delays, we see some level of stabilization on the shipping and reliability of those. So that as we get equipment on site, they have been installed and commissioned. We already mentioned some of the delays and our costs, but we are confident that there will be progress. We have the people on the ground, and we understand where the bottlenecks are. So, we're very confident that we will get those sites in operation fairly soon.

Okay. Thanks, Manuel. And then just a quick follow-up on the Digital IQ business. There were some pretty impressive metrics that you provided during your IPO regarding the customer savings that your customers were experiencing. Is there any update to that in the few months since the IPO? Any other encouraging metrics that you're able to present to new prospective customers? And then kind of a quick follow-up to that is, how should we be thinking about the potential revenue sharing upside from those contracts when we think about your guidance for the coming year?

Thank you, Mark, for the question. Yes, indeed we are very, very excited about our latest wins. They all demonstrate that our ecosystem that we create and populate across the three business lines is working well with all those cross-selling opportunities, and the optimization that we get from the Fluence IQ platform is very well received. The market is gaining more and more momentum. I would like to give a chance to our Chief Digital Officer, Seyed, to give us a little more color on those big wins that we had and showcased.

Sure. Thank you, Manuel. Seyed here. Just to answer some of the specifics of your questions, yes, we're seeing a lot of momentum in the platform KPIs. This is summarized for you, and since inception, we submitted over two hundred thousand economic bids in different wholesale markets, which is impressive, and exciting. Our uptime and runtime is being greater than ninety-nine point nine nine percent, which is excellent, and we're also continuing to provide upside to our customers based on their asset class and the geography they are located. So, a lot of momentum in terms of the KPIs and product performance. I just wanted to note that, but in terms of the continuous growth you're absolutely right. We had a pretty strong quarter.

Yes, it does. Thanks, Seyed. That's it for us. Thank you very much.

Thank you, Mark.

Thank you. Our next question comes from Maheep Mandloi from Credit Suisse. Your line is open.

Hi, good morning and thanks for taking the questions and welcome to the public markets. One question on the free cash flow, I think just trying to understand, you’ve given clarity around these delays and the more transitory nature and expect to realize them in the second half, but does that impact any of your prior free cash flow assumptions for the next year?

Yes. Thank you very much Maheep for your best wishes. And let me pass this to our CFO, Dennis, to give you more color on your specific question.

Right. Good morning also from my side. Thanks for the question. Overall, it does not change our view for the entire fiscal year twenty twenty-two, but certainly it impacts the timing within the fiscal year twenty twenty-two. So, as we are seeing some of these topics being resolved in the first half of fiscal year twenty twenty-two, we do expect that cash flow will be impacted by that throughout the first half versus in the second half, we will see a stronger recovery there, and then to close out the year as we expected.

Got it. And then just on the battery supply, I know you previously talked about having supply secured for twenty-two and twenty-three, but as you kind of look into procuring more batteries beyond that, are you seeing any challenges in the market? We keep hearing about supply constraints, so just trying to understand your visibility on that?

Thank you, Maheep. As we stated, yes, we are battery diagnostics, we have secured a significant capacity that will cover our immediate needs. We announced our strategic partnership with Northvolt in Europe. We’re talking to top tier battery manufacturers also in the U.S. that will come online. We are truly diversifying our supply chain and we're going regional on sourcing for the three large regions where we're doing business. So, on that regard, that aligns with the direction that we design our strategy toward.

Appreciate that color as well, and just one last one from me, and then I’ll hop back, and just a housekeeping matter. The services contracted backlog seems flattish quarter over quarter. I know you added more contracts in the quarter for services as well, so just trying to understand that or if I’m sort of missing anything over there? Thanks.

Yes. Thank you, Maheep. I think that's not exactly the case, but I’m giving Dennis a chance to provide more specific numbers in that regard. But actually, they're going up.

Right. Hi, Maheep. In June, we disclosed one thousand one hundred ninety-eight megawatt contracted backlog as of June thirty; we increased it to one thousand nine hundred eighteen as of September thirty. So, we are seeing basically a sixty percent increase within the quarter in line with the strong contracting which we have seen.

Thank you. We have a question from James West with Evercore ISI. Your line is open.

Thank you, everyone, and good morning. Congratulations on your public market debut. Manuel, could you share your insights on the current level of demand in the market? It seems like we’ve reached a significant turning point in the last six months. Last time we spoke, you were quite busy, so I didn’t get a chance to follow up on your thoughts. There appears to be a global recognition of the urgent need for advancements in energy storage. I’d love to hear your perspective on the changes in the market, what triggered this turning point, and how customers are currently viewing the situation.

Yes. Thank you very much, James, and thanks for the opportunity. It is true. There's significant demand building up everywhere in the world. The fact that we just expanded into a new market in Taiwan; we got record year orders in every single one of our three business lines, and we are not even counting on additional regulation or any subsidies that might come from the infrastructure bill, BBB, or any other new regulation in other parts of the world. We have seen strong commitments from the United Nations Climate Change Conference with significant commitments for example from India. They are announcing a substantial amount of energy storage going to that market. They are expanding the regulation where every renewable project should include energy storage associated with it. So, we are looking at that market. The fact that we are expanding in our three regions shows we see significant worldwide adoption of the technology, and the understanding that it is impossible to decarbonize the planet just with renewables. We need energy storage smart solutions with digital optimization on top of that.

And then maybe a follow-up here. More of a housekeeping item, but the contract manufacturing rollout of additional facilities—when should we expect to see some of those come online, apart from what you've been doing in Vietnam to somewhat distribute your supply chain?

Yes, thanks for that question, James. This goes exactly in our strategic direction. We already have selected contract manufacturing locations in Europe and the U.S. We are negotiating those terms that will expand and give us flexibility to our capacity to deliver products to those regions or between regions and significantly reduce our exposure to shipments or any logistic delays. Also, it will allow us eventually—if there are some elements of local content being required—it will give us the flexibility and optionality to do that. We’re moving exactly in that direction and it's very much part of our strategy.

And do those come on early calendar twenty-two?

Yes, we’re saying that those might be up and running by the end of twenty twenty-two, perhaps the first half of twenty twenty-three.

Okay, got it. Thanks, Manuel.

Thank you.

Thank you. Our next question comes from Julien Dumoulin-Smith from Bank of America. Your line is open.

Hey, good morning team and congratulations again. Thank you for the time. Just to follow-up here, I’m just thinking through twenty-two; how are you thinking about the incremental or the degree to which Hazelwood, for instance, is an incremental project there or what have you versus how you were thinking about things for the year? If you can try to quantify some of the mitigating factors you alluded to regarding logistics and trying to contract this ahead of time, etc. you know, order of magnitude; how much could that help offset some of the impacts here? Again, trying to understand some of the puts and takes, maybe degree of conservatism reflected in the numbers here?

Yes, thank you very much, Julien, and good morning again. Thanks for your kind words. We’re so happy that you are here with us and following our story and our success. Yes, I mean, what we have seen in the Hazelwood contract and project is exactly what we want to do around the world. It’s a very significant customer that understands our technology, takes advantage of it, and enters a market that they see as promising and financially attractive. By having this Fluence IQ platform on top of that with revenue sharing potential, it really brings value not just to the customer, but to our offering and our ecosystem concept. On the shipping delays, we have taken short-term and long-term measures that I discussed about. The long term ones include the full regionalization of our supply chain, contract manufacturing, and logistics. On the short term, yes, we're talking to top tier freight liners to secure capacity and to have them scalable a few months ahead of us.

Let me come back to the Hazelwood item, where Manuel already highlighted. I want to highlight again the tremendous win where we’re really able to sell all three items of our ecosystem and, therefore, as you may remember Julien from our discussion, we have been very conservative regarding how we look at the performance contracting side. We see tremendous upside on the digital side of the business, and that is evident. The products and services side are basically in line with what we have contemplated in all business plans, and we are proud of that.

Excellent, guys. Thank you. And just if I can follow up your nuance here, you talked about some project delays getting pushed from twenty-one to twenty-two. You provided this calendar year approximate percentage of revenue, but presumably as we think about Q1 twenty-two more specifically rather than the generic number that you guys provided here, in theory, the first half should be stronger than the percent revenues you guys talked about here on a sort of generic go forward basis, right? I just wanted to clarify the bridge from twenty-one to twenty-two versus this sort of ongoing guidance?

Right, Julien. Our seasonality stands with the typical seventy percent in the second half, as I also covered in the statement before. We certainly with this delay see a slightly stronger revenue than the normal seasonality in H1, but it's not to the level that we would see H1 becoming stronger than H2. So, certainly there is some higher number there than the typical thirty percent, but not up to a level of fifty percent or more.

Got it. Alright, excellent. I will leave it there guys. Thank you so much, cheers.

Thank you very much, Julien.

We have a question from Brian Lee with Goldman Sachs. Your line is open.

Hey guys. Thanks for taking the questions. Good morning. A couple sort of modeling-related ones, if I could. If I calculate right, I think the revenue push-out was about one hundred and twenty million dollars—or in that ballpark—is that fair? And how many projects were impacted? You mentioned seeing this all getting recognized in the first half of fiscal twenty twenty-two. What's the kind of cadence you're expecting between Q1 and Q2? Fifty-fifty or are we going to see more of that revenue from the push outs in one particular quarter versus another?

Thank you, Brian. Again, thanks for your good words about us. On the specifics, I will pass to Dennis to give us more color on your question.

Right. Hi, Brian. Good morning. In regards to the push-out, you're right that there has been that push-out from Q4 into Q1 or the first half of fiscal year twenty-two. I think the number you mentioned is in the ballpark range. We would expect a larger portion of that to be recovered in Q2 and probably somewhere in the range of thirty to forty percent of that in Q1 fiscal year twenty two.

Great. That's super helpful color. And then just a second one and I'll pass it on. Nice backlog growth here. I think last quarter you guys in June had mentioned one point three billion; now you're at one point seven billion contracted backlog. I know you give it on a volume basis, but any sense, rough ballpark, what the mix is of that one point seven billion on a dollar basis between energy storage products, services, and digital? I guess just in that context, it seems like the revenue guide of one point one to one point three given the backlog at one point seven would be supportive of higher, so just wondering if you could remind us how you define backlog and kind of comment a bit on the mix to give us some context there as well? Thanks, guys.

Sure, Brian. So, out of the one point seven billion, we have approximately one point three billion on the product side, and then the remainder is on the recurring side of the business—that means on the services as well as on the digital side. In that regard, when you think about the guidance of one point one billion to one point three billion, and as we also stated in our prepared remarks, we are certainly still looking also to H2 potential delays there. Therefore, we have put out the guidance of one point one billion to one point three billion based on what we are seeing in the backlog.

Okay. Just last one to clarify on the non-storage product portion of the backlog at four hundred million. What's the average duration? It's not a twelve-month backlog; it represents going forward two to five years of revenue; could you remind us what you characterize that as on the services and digital?

Right. Typically, the mixture between the service and the digital sites on services we are seeing somewhere ten to twelve years, on the digital side, somewhere in the range of three to five years. Overall, this backlog covers up to twelve years. It was a bit more of forward-loaded pattern here due to the digital mix.

Yes. If you allow me to elaborate a little bit on that, there are two elements here that are very significant. The first is that we got a one hundred percent attachment rate on services in the EMEA region—which is fantastic. Overall, almost seventy-five percent, seventy-four percent attachment rate overall, which is also a very high number. So, it brings and it ratifies the confidence that we're seeing from our customers that the whole package, the whole ecosystem that we are offering in the three business lines makes a lot of sense for them and brings value to them. The fact that the Hazelwood project has a twenty-year service contract is a testament to the value that we are creating and providing to them.

Alright, that's great. I'll pass it on. I'll also echo everyone else’s congrats. Thanks, guys.

Thank you very much, Brian.

We have a question from Stephen Burt with Morgan Stanley. Your line is open.

Hi. This is Dave Ricker on for Stephen Burt. Thanks so much for taking my question and congrats on the IPO. I was wondering if I could just touch on Fluence IQ. Could you give an update on where things stand in the development pipeline for the next set of software apps? And any indications and initial customer conversations as to what the interest level and demand might be for the next round of software?

Thank you very much and good morning, David. I will pass to Seyed to give us more color on what is happening with the Fluence IQ platform, but overall, the feedback from our customers is very exciting, very positive.

Sure. Thank you, and thanks David. So, just a little bit more color in terms of Fluence IQ. We are continuing to see strong demand in the markets where we have a presence, like the national electricity market in Australia, where we own about twenty percent of renewable share. We expect to continue to grow in that market. California is being pretty strong for us. We expect to continue to grow. Unfortunately, what we saw in the recent Texas climate environment was unfortunate due to the public sacrifices we made. Our software is going to be a centerpiece in that market. We are ramping up the development of our ERCOT application to be released this year. We’re seeing a lot of volatility in that market, similar to what we've seen in the Australian market in absence of the centralized capacity team. So, ERCOT market entry is at the top of our priority. We're investing heavily in the software development application to support our market optimization with Fluence IQ in the ERCOT market. Moreover, we are also working on mid-term portfolio management applications and long-term investment applications. All of this will be part of the business plan and product development in fiscal year twenty-two with an aim towards commercialization in fiscal year twenty-three. We’re making a lot of progress, obviously investing in the team and talent to support our vision, things are shaping up well.

That's really great color. I appreciate that. And maybe just one follow-up on the demand side of things. I was just wondering if you could give some color on geographically. How is the backlog split? Where are you seeing the strongest demand in the different countries that you're operating in, maybe heading into twenty twenty-two?

Just to clarify, David, on the Fluence IQ platform or overall?

I was thinking more overall in terms of the energy storage product portfolio, overall, beyond just Fluence IQ.

Yes. We see—honestly, we see demand picking up in all markets. The fact that we have just entered Taiwan, the fact that we secured the largest project in Europe, and the fact that we continue to roll very fast in the California market with Fluence IQ. We have examples of contracts being awarded in all three regions with record levels in all of them. It is a synchronized growth trajectory, which is very encouraging.

That's great to hear. Thanks so much, and congrats again.

Thank you very much, David.

Our last question comes from Tom Curran with Seaport Research. Your line is open.

Sorry. Good morning and to quote Bruce Willis in Die Hard, 'welcome to the party'. Curious about how much visibility uncertainty you have on your role within AES's renewable strategy? From twenty twenty-one through twenty twenty-five, we understand that AES is planning to add four gigawatts per annum of solar capacity. What percentage of that do you expect to include storage? And given that represents assured locked-in demand for Fluence, how are you modeling those orders internally? Is there an annual floor for AES orders that we can assume?

Yes. First, thank you, Tom, and good morning. We're very excited about this new chapter in our history now as a public company. Yes, indeed, you know AES is a shareholder; they are one of the founders, and I thank them along with Siemens for establishing this joint venture and have the vision where the market will be going, and they proved to be right on their decision. So, we are very excited and very grateful for that. Regarding the specific pipeline, AES has been upgrading their pipeline and annual commitments; we have a very strong and fluent communication with them. This is not new; it has been there for years. So, we're going hand in hand with them. What we expect is no hundred percent of whatever they include, a percentage they include in their own projects and expansions. We will be with them providing our smart solutions, services, and digital Fluence IQ, and we are very excited. That is part of our strategy.

And Manuel, can we assume that whatever percentage of that new solar capacity they'll be building, if they're going to include storage for that, you'll be winning one hundred percent in that, that will exclusively go to Fluence?

Yes. Yes, that's true.

And then if I could just squeeze in one more follow-up before we run out of time here. Where are you expecting the energy storage products divisions adjusted gross margin to exit fiscal twenty twenty-two?

In line with what we have stated in our model during the IPO process, you can take that as a proxy.

Great. So, still on track for that?

Yes.

Thank you for taking my questions.

Thank you very much, Tom.

There are no other questions in the queue. I'd like to turn the call back to Manuel Perez for closing remarks.

Thank you very much, operator. Thanks to everyone, and I would like to thank again, as I did at the beginning of my remarks, a sincere thank you to the entire Fluence team. They have been extremely passionate and committed; they have shown strength and resilience during the COVID pandemic. So, thank you everyone. Thanks to our customers, investors, and analysts who made this possible. Despite all the circumstances and the headwinds, we continue to grow, we continue to beat our own records, and expand, truly changing the way that we power our world for a more sustainable future. Thank you. Thanks everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.