Energy Vault Holdings, Inc. Q3 FY2024 Earnings Call

Greetings and welcome to Energy Vault’s Third Quarter 2024 Earnings Call. Please note that this conference is being recorded. It is now my pleasure to introduce Michael Beer, Chief Financial Officer. Thank you, Michael. You may begin.

Thank you. Hello, and welcome to Energy Vault’s third quarter 2024 financial results conference call. As a reminder, Energy Vault’s third quarter earnings press release and presentation are available now on our investor website, and we’ll be referring to the presentation during this call. A replay of this call will be available later today on the Investor Relations portion of our website. This call is now being recorded. If you object in any way, please disconnect now. Please note that Energy Vault’s earnings release and this call contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are only estimates and may differ materially from the actual future results, and they may vary due to a variety of factors. Please refer to our 10-Q filing for a list of factors that cause our results to differ from those anticipated in any forward-looking statement. We undertake no obligation to publicly update or revise any forward-looking statements, except as required by law. In addition, please note that we will be presenting and discussing certain non-GAAP information. Please refer to the safe harbor disclaimer and non-GAAP financial measures presented in our earnings release for more details, including a reconciliation to comparable GAAP measures. Joining me on the call today is Robert Piconi, our Chairman and Chief Executive Officer. At this time, I’d like to hand the call over to Robert Piconi.

Great. Thank you, Michael, and good afternoon and morning and evening to everybody here on the call. Thanks for joining. I’m going to break precedent a little bit and start with how I normally finish my calls on our quarterly earnings, and that’s starting with our people. One word comes to mind: resiliency. Not a new word or concept in the energy storage world for us and generally storage solutions and grid resiliency. But in this case, I would like to recognize that it applies to our people here at Energy Vault. In the last 90 days, in particular, we’ve seen tremendous change and volatility in the capital markets and the geopolitical landscape, which continues to bring uncertainties, unprecedented energy demand to support what we see driven by data center expansions and the resurgence of interest in any clean or fossil power to meet it. We’ve seen a lot of news on SMRs, even Microsoft taking its interest in the Three Mile Island nuclear plant, a gap in power that clearly needs to be closed in terms of an economical solution for 24/7 dispatchable renewable energy. So it seems this future has arrived a little earlier than planned, and it will take the most resilience of all of us and companies, leadership, and the people that make up the foundation here at Energy Vault that I’m so proud to work alongside. We’ve just had the U.S. elections complete last week, which can always be polarizing, but in particular, around our national commitment to renewable energy and clean power and meeting that rising power demand, which I believe, irrespective of the election outcome, will still support a healthy clean energy transition and prevail. Strong, tough, robust, flexible. These are all synonyms for resiliency. As I was writing some of my thoughts and comments, it actually came up in the spell check as synonyms. But really, these words represent the foundational core of my colleagues here at Energy Vault that I work with, and I’m humbled to support every day due to the impact we can have, starting with our local communities that make up the global communities that our teams touch every day. I want to touch on a few examples from some recent travels on these themes. Sticking with the theme of resiliency, I just spent the last few days, late last week, in the community of Calistoga, California, where what we call our CRC, our California Resiliency Center, has achieved mechanical completion and is beginning soft commissioning activities of the largest hybrid green hydrogen energy storage system in the world. Craig Horn, who leads our advanced energy storage technology group, was there to host me along with Irwin Tanu, our Head of Commissioning, who has been at all of our initial sites in the United States for the first gigawatt hour across three projects that we turned over in 2023 and brought up in unprecedented time frames. These time frames, I would say, were not by accident, but through an approach we've taken due to the experience of our software development and team that brings people with 15 years plus experience in energy storage during its infancy and growth, particularly in the last 5 to 7 years, also on a multi-technology battery storage integration experience. The ability to turn up these systems quickly and efficiently is not by any luck, but through cell-level monitoring, for example, to detect problems before they manifest themselves, even pre-building digital twins of the site's design and environment. So, no stone is left unturned as we go from mechanical completion to system turn-up. This planning enhances all of our execution in the field that our customers uniformly would speak to. I am very happy others supported the visit there, including interactions in Calistoga with the local business owners and community advocates that are excited to have a sustainable solution to the noise and pollution from diesel generators that were part of their past, now wheeled in every year for the fire season or to deal with public safety power shutdown events. But a healthy amount too of wait and see as I spent time interacting in the local community asking, is it safe? Will it be noisy? That 150-foot-long tank filled with green hydrogen. In the end, we’re very excited, as is the local community there, to bring up this system, be the first of its kind in a microgrid, and the first of its kind for green hydrogen energy storage and something that we’ll be replicating. All of it starts here with the local communities and that impact. Reflecting on the last 12 to 18 months, Reid Gardner in Nevada was a large coal plant, among the largest polluters in the state. Delivering a 440-megawatt hour system there in an unprecedented timeframe of 4 months after taking control of the site. With a hybrid system delivered with Wellhead Electric in California to the Stanton, Orange County, Southern California residential community where our 4-hour, 275-megawatt hour system allows the gas plant to operate less frequently, reducing GHGs by up to 70% to 90%. Hal Dittmer, a real pioneer in California at 84 years old—not that he minds my mentioning it—looks 55 if you see him on the street. All about the impact here, and I would really be remiss if I didn’t spend a few minutes talking about my recent visit to Australia and the team there, led regionally by Luca Sadler on the commercial side and Aaron McCann on the execution side. We’ve talked about the Australian market and have made a few announcements in the last couple of weeks, all fairly large scale, given the size and importance of that market. The coexistence of many of our strategic investors, including Korea Zinc, the largest nonferrous metals producer in the world and their wholly owned subsidiary, Ark Energy, along with BHP, a major mining and iron ore company, who are investing in their own clean energy transition, has been fascinating. However, I was most impressed by the local government support from meetings in Melbourne, for example, with the Victorian Energy Minister, Liliana D’Ambrosio, the head of the State Electricity Grid, and the longest-tenured energy minister across all Australian states. She is a woman of great vision, passionate about what needs to be accomplished while being fully cognizant of how things are attained as being more important than the final results. We look forward to large partnerships and projects there, having built a tremendous pipeline well over the 5 gigawatt hour range now of projects that we will execute upon over the next 12 months and beyond. While I was there, we announced the first of what we believe will be many project partnerships with Ross Warby and the EnerVest team, our first 1 gigawatt hour project at Stoney Creek in New South Wales. Excited about the potential given the development and portfolio focus we have as a core strategy, working earlier in the pipeline development with companies and individuals whose expertise pinpoints grid weak points and opportunities to ensure better grid resiliency. It was a great week. Much of our core leadership team was there in person. We did a lot of planning for the coming years in the Australian market, including immediate investments in doubling the size of that team in the near term and tripling our investment in Australia over the next year, given the opportunities we see and the projects we have underway. Shifting a bit now to our results before turning it over to Michael, who will cover some of the financial details. Just very encouraged by what we’ve seen in the last 3 to 4 months and the progress, starting with one of our most important indicators of the future, our revenue backlog, which grew by over 33% in the quarter. This supports the revenue ramp we have coming in 2025 and beyond. While Australia will play an important role, very happy to announce new projects in the United States. We recently announced the Gridmatic offtake agreement for our Texas battery site that we’ll be building, owning, and operating. A fairly quick turnaround there, with COD expected in the second quarter of 2025. I am also pleased to announce, for the first time on this call, a new project with Jupiter Power; it's always nice to announce additional projects with prior customers. I think that's a great example of building faith, confidence, and trust from customers that have built projects with us. I feel very good about our execution on our strategy to not only build and deploy these systems but also to own and operate these storage assets. With the right development partnerships and our knowledge in designing, commissioning, and maintaining these systems, we optimize capital expenditures upfront through optimal design, which reduces operating expenses to operate and maintain these systems, ensuring their availability and uptime to meet customer needs, grid needs, and our investors' expectations regarding returns on these investments, which will bring long-term revenue streams at very attractive margins. From a revenue perspective, this was clearly a transitional quarter as we progress into our Q4 ramp with previous guidance, but we've maintained strong gross margins finishing projects. Gross margins achieved at 40% plus, while on a year-to-date basis, we have 28%, which bodes well for our year-end finish and the guidance of finishing the year with unit economics and gross margins of 15% to 20%. Encouragingly, we continue to see our OpEx reduce on a year-over-year basis by 13% and 7% on a quarter-over-quarter basis. This reflects changes we've made in our technology and business model as we looked at our licensing models back in the first half of the year, leading to adjustments in our organization and the team supporting that strategy. Michael will discuss more about the project financing we initiated with Jefferies on some of our first wholly owned projects in the United States, specifically California and Texas. While this reduced our revenue in terms of turning over projects and recognizing revenue this year, we've been very clear since we announced at our investor and analyst meetings in May about why that strategy is fundamental to our intermediate to long-term growth and our shareholders' interests in our operating model. We believe this model will create many dividends for shareholders, particularly as we plan for the coming 3 to 5 years. We've also added more global assets for this operating model, including what we are announcing in Australia, our development partnership with Enervest. We announced three months ago a 100-megawatt system in Italy at their largest coal plant in Sardinia, Carbosulcis. We’ll be installing the first EV Zero gravity system there and beginning commissioning, with a future integrated hybrid site coexistence of our gravity technology with batteries, delivering 100 megawatts of power to the local community. I’d be remiss if I didn’t mention a few of our innovation milestones as well. I already discussed the green hydrogen system in Calistoga, due to turn over in the next 2 to 3 months, while also applying our gravity technology in partnership with Skidmore, Owings & Merrill, integrating gravity energy storage into future superstructures. In particular, we’ll be able to have a carbon payback in short periods in the building sector, which contributes to nearly 30% to 40% of greenhouse gas emissions during both the building and operation phases. We’re excited about working with partners from Skidmore, Owings & Merrill and looking forward to the first projects for these superstructures in the coming years. I’m also excited to announce that Time Magazine recognized our Rudong gravity energy storage system as one of the best inventions in 2024. This is a tribute to Bill Gross, the founder of Energy Vault, whose vision and never give up attitude has been driving innovative solutions in energy storage. The recognition from Time Magazine is a testament to him and the hardworking teams at Energy Vault who are championing our gravity energy storage technology. In closing, I’m very happy to reaffirm our annual guidance as we tighten the range a bit as we approach the end of the year. We see shipments underway that will tie to revenue recognition. A lot is happening in these last 6 weeks, and we feel good about reaffirming that guidance as we look forward to a strong quarter of delivery. This includes the recognition of our range guidance previously given and continuing to build bookings and revenue backlog for a large ramp up into 2025 and beyond. And with that, I’ll turn it back to Michael Beer.

Many thanks, Rob. As you noted, the company currently maintains a revenue backlog of $350 million, which increased 33% from the figure reported during our 2Q earnings results. This reflects an equipment contract with Jupiter for another 200-megawatt hour battery energy storage project and a 10-year offtake agreement with Gridmatic for the 57-megawatt 114-megawatt hour Cross Trails battery energy storage project in Snyder, Texas, the latter of which will remain on the balance sheet as part of our build, own and operate strategy. As part of the strategy discussed during our Investor and Analyst Day back in May, management expects to retain ownership of approximately $100 million in cash-generative storage assets such as Cross Trails and the Calistoga Resiliency Center, rather than generate legacy EPC and equipment-related revenue through the onetime sale of these projects this year. While this will impact near-term revenue in exchange for long-term value creation for our shareholders, we are encouraged by the pace of this transition over the past two quarters. With construction of two battery storage projects in Texas and Nevada now complete and new projects ramping in the fourth quarter, the company reported minimal project revenue in 3Q, significantly down year-over-year, with software and services contributing about $1.2 million in this period. As noted previously, we continue to expect revenue this year to be back-end loaded mainly due to the timing of equipment deliveries for our new project in Texas and the ACE projects in Australia. Excluding the projects on our balance sheet, we expect full-year revenue to be at the lower end of the guidance range, with upside associated with the timing of revenue recognition from existing and potential license agreements within our Gravity business in Southern Africa and Brazil. Our gross margin was 40.3% for the third quarter, up from 4.2% a year ago, reflecting a favorable revenue mix, largely associated with software and services, albeit on a significantly lower base of revenue. For the nine months of the year, gross margin is tracking at 28.3%, above the guided range of 15% to 25% for the full year 2024. However, given the anticipated back-end loaded mix of business in 4Q from equipment deliveries for our battery projects in Texas, we expect full year gross margin to normalize towards the low end of the guidance range, pending the timing of revenue recognition from high-margin license agreements within our Gravity business. Now on to adjusted operating expenses and EBITDA. During the third quarter, our adjusted operating expense was $15.2 million, which improved 13% year-over-year and 7% sequentially quarter-over-quarter, reflecting the organizational realignment in the first half of 2024. 3Q adjusted EBITDA was negative $14.7 million, which improved 5% quarter-over-quarter, but weakened compared to the year-ago period due to the timing of project completion and lower overall gross profit in the period. Other key noncash items added back in Q3 included $10.2 million for stock-based compensation expense, $1.9 million provision for credit losses, $800,000 for a change in the fair value of a derivative asset conversion option, and $1.4 million in net interest income. Management continues to expect adjusted EBITDA within the range of negative $45 million and negative $60 million for the full year. Regarding cash and project financings. As of September 30, 2024, the company had $78 million in cash, cash equivalents, and restricted cash versus $113 million in total on June 30. Restricted cash increased to $26 million associated with a letter of credit for a project that has since received final completion. Our primary uses of cash are cash operating expenses and working capital needs associated with equipment purchases for our energy storage projects and expenditures for those projects we’ve chosen to own and operate, which will likely be largely offset by anticipated project financing and monetization of tax credits. Year-to-date, cash used in investing activities increased to $48.3 million, mainly from construction in progress tied to our build, own and operate strategy. Management still expects our year-end cash balance to be within the range of $75 million to $125 million, depending on the timing of those project financings. The company maintains bonding capacity in excess of $1 billion to facilitate additional growth for projects both in the U.S. and in Australia. With the project financings for Calistoga and Cross Trails now underway with Jefferies, we expect to bring $60 million to $80 million in cash back onto the balance sheet once completed, including the monetization of tax credits. We anticipate returning $30 million from the Calistoga project anticipated to close by year-end and another $40 million from the Cross Trails project over the next two quarters. The company continues to execute its build, own, and operate strategy and has identified a strong development pipeline for storage asset ownership and infrastructure projects in the U.S. and Australia totaling over 30 gigawatt hours. We see a host of advantages and synergies across our legacy business as we leverage our project management expertise, solutions-based approach, and diversified storage product portfolio. While inherently more capital intensive than the EPC business, these accretive owned and operated projects enhance earnings visibility and margin profile. Once completed, we expect these projects to deliver unlevered double-digit IRRs and project EBITDA margins in the 70% to 80% range, underpinned by long-term offtake agreements. We will then seek to optimize the capital structure of each project depending on the nature of the offtake agreement, available tax credits, and project finance. With that, I’ll hand the call back over to Rob.

Great. Thank you, Michael. I think one last thing I’ll just emphasize that you just went through. We’ve received some questions from investors asking to understand how some of the own-and-operate projects will work and how the working capital flows and returns operate. Michael just walked through that well. But just to highlight, these projects, as we look at building, have criteria for investing in them that have been and will continue to be in this low double-digit unlevered operating range. The EBITDA margins for them going forward, together with project financing as we announced with Jefferies just a few weeks back, are very attractive for creating long-term and predictable revenue streams for our investors. As we leverage our expertise, this is a fundamental point given the experience we have in design and optimization, which translates to reducing the CapEx associated with project development. We’ve built a strong reputation for execution. As you’ve seen since the very beginning of our company, we’ve always maintained positive unit economics and gross margins. That’s not common in our industry for those of you who follow energy storage, and it was one of the surprises when we started executing projects. That is a strength we will continue to leverage. As it comes to commissioning these projects, our experience and the way we’ve developed our software platform, led by Shaheen Prakhar, who drives our EMS software development, brings significant experience from various industries, including aerospace, to ensure we have no surprises when we reach the field. I mentioned earlier about creating digital twins in our operating environment, our cell-level technology for monitoring systems, which is fundamentally important for safety and dealing with lithium-ion technologies. Our customers have come to appreciate this. As we bring up our systems, we have completed our first projects quickly—from mechanical completion to uptick as we look toward full commissioning for our battery projects. This presents a unique opportunity for us. I want to thank all the people at Energy Vault and all of our investors and partners that have supported us as we’ve executed over the past few years. And with that, I’d like to turn it back to the operator for questions.

And the first question comes from Justin Clare with ROTH Capital Partners. Please proceed with your question.

Hi, good afternoon.

Hey, Justin.

So first, I just wanted to ask about the different ownership opportunities that you’re looking at here. And I wanted to see if you could share how much capacity you could potentially be looking to add to your balance sheet in 2025 or 2026? Just trying to think of the volume and then also the capital that would be needed to finance these projects and how you’re thinking about the funding sources.

Sure. Thanks, Justin. So as we announced previously with Jefferies, we’re in the market and raising funds for attractive project opportunities. One thing we see working well in the market is the availability of capital for attractive and high-IRR projects. Therefore, we do not see shortages of capital and expect to find attractively priced capital given the current market environment—not only in the U.S., but also in Australia. We’ve mentioned some large multi-gigawatt-hour projects in the Australian market that we're looking at. We announced a few that are in the multi-hundreds, including the last one we announced, which is a full gigawatt hour. So we don’t see a shortage of opportunities to deploy capital. Over the last two years, we have built a reputation of executing well with positive unit economics and transitioning projects into operational status. To answer the latter part of your question, we’re open to attractive projects and funding sources in the hundreds of millions of dollars as we capitalize on this growth, with a variety of strategic investors interested in collaborating with us.

Okay. Got it. And then just a follow-up. I’m curious, considering you could either own projects or deliver the batteries and carry out the EPC for a project and recognize revenue immediately, how are you thinking about these different approaches and their implications for your outlook for 2025 and the targets you’ve provided at this point?

Sure. It’s a great question. In all cases, we’re considering the commitments we made that were established during our first investor and analyst meeting, and we’re happy to reaffirm and tighten that guidance here as we look into this year. As we think about next year and the guidance we’ve given, considering the growing backlog announced quarter-over-quarter and several opportunities on the horizon, we’ll make decisions based on what’s best for the company's long-term interest, our customers, and our shareholders. Some analysts were surprised we took our revenue down this year to a $50 million to $100 million range because of some immediate revenue we could’ve recognized at a 10% to 12% gross margin, choosing instead to pursue long-term outcomes with lower double-digit unlevered IRRs and sustainable revenue streams that yield EBITDA streams in the 60% to 75% range. For next year's guidance, we'll be cognizant of previous commitments and will act with our cash return strategy in mind, which may lead us to deliver projects for our customers or retain them on our balance sheet.

Okay. Great. Thank you.

And the next question comes from the line of Alec Scheibelhoffer with Stifel. Please proceed with your question.

Hi. Thanks everyone and thanks for taking my question here. So I just want to focus in a little bit on the ‘24 guidance. Naturally, the quarterly revenue progression could be a little lumpy here, but I was just wondering if you could provide us a benchmark for what you expect to hit in the fourth quarter, what you feel most confident about, and just some of the timing on the pending projects?

Sure. Yes, we formally provided guidance in our announcement, tightening it a bit towards the mid-to-lower end based on how we see shipments and revenue recognition today. We are confident in reaching that lower end, and depending on operational items and shipping schedules, we’ll assess how close we come to the mid or upper ranges. I wouldn’t rule out unexpected positive developments similar to last year, where we had about $80 million in unanticipated revenue through expedited shipments. Visibility for reaching that lower range is strong, but we will see how our operational items unfold.

Got it. Appreciate the color there. And then, as has been highlighted during the investor conference and throughout this call, building out the own and operate strategy is aimed at achieving quarterly progression and greater visibility. I’m curious about the expected quarterly progression in ‘25. What projects would be expected to fall within that timeframe versus potentially spilling over into ‘26 or beyond?

Yes. I’ll provide a bit of color on that. At our next quarterly for Q4, we will give a full formal update on 2025 guidance. But as you build and operate projects with long-term contracts spanning 10 to 15 years, revenues will build over time. Our goal is to increase annualized EBITDA over the next 12 to 24 months to a quarterly rate of $50 million to $100 million. This will include ongoing execution around supporting gravity license expansions. Importantly, our energy storage strategy allows us to monetize licenses and royalties, which is a unique advantage we hold in this industry. We continue innovating across project types, leveraging civil and structural engineering and material science to optimize designs for energy density in constrained spaces, a concern for data center expansions. Specifically, we focus on solving customers' problems, as demonstrated with the Calistoga RFP that sought backup power solutions rather than specific designs. Our approach emphasizes our unique position as we increase revenue predictability and margins while maintaining innovation in energy technology.

Excellent. That’s great color. Appreciate taking my questions here, and I will turn it back.

Alright. Thanks, Alec.

And the next question comes from the line of Chris Ellinghaus with Siebert Williams Shank. Please proceed with your question.

Hey. Good afternoon everybody. Have you made any adjustments at all to the Snyder project in terms of capacity or your thoughts on capital costs or anything along those lines?

There have been adjustments; I’d say initially, as we announced that project with Enel, we had a series of asks from them regarding our gravity energy storage technology. We purchased the interconnect for the Cross Trails project, which is one of the sites we will own and operate because we bought the land and interconnect. In line with Enel’s request, we looked at our EVx technology and aimed for full-scale demonstration, including products we announced at our Investor and Analyst Day. This includes the EVy, which is our slope-based technology applicable to various landscapes, and the EV0, our modular pump hydro technology. The EV0 equipment arrived at Snyder about a month ago. The EVy is set to be the first technology up and running, with customer visits planned before year’s end, and EVx will follow in Q1. We’ve essentially developed Snyder into a multi-asset, multi-technology site representing our latest innovations, integrated with our software capabilities. I’m excited about the demonstration potential as the interconnect progresses, and I would love to host you if you visit the area—it’s about a four-hour drive outside of Dallas.

Okay, great. That’s helpful. Do you have any insight that you can provide on the unannounced Australian 200-megawatt hour project, when that might be public?

Yes, sure. We expect that announcement this quarter. I met with some principles for that project while in Australia, and we hope to share this news soon.

As far as financing goes going forward, you’re working on project financing and monetization of credits at the moment. Is that what you foresee for the foreseeable future as the standard paradigm, or do you see adding other strategies to your toolkit as well?

It’s a great question. We’ll continue with standard project financing, which has been successful. We have found these models effective in accessing very liquid markets for tax equity and investment tax credits. We announced we are working with Jefferies on expanding these financing abilities for multiple projects, especially in the U.S. and Australia, where we have a considerable pipeline. It’s unlikely we will pursue financing purely off our balance sheet as we did for the first two projects. We’ve maintained the flexibility to invest from our balance sheet, and that will continue while we get project financing issued simultaneously. Going forward, we’ll strategically explore ways to add non-dilutive capital while potentially bringing in partners interested in our funding.

That’s great. You seem to gloss over the December 11th, 12th dates; I was curious if you had any other details for that. And since you bring up Snyder, are you thinking about doing some kind of event at Snyder next year?

It was not our intention to gloss over that! We’re excited about the event in Calistoga and will provide more details soon. We selected Calistoga due to the microgrid's uniqueness and the excitement surrounding the community's sustainable solution. We plan to interact there during soft commissioning, allowing us to show more of the site, and it will be our first ultra-long-duration storage solution. We absolutely intend to plan an event at Snyder once the technologies arrive and user visits are scheduled; I appreciate your proactive approach to this suggestion.

And the next question comes from the line of Noel Parks with Tuohy Brothers. Please proceed with your question.

Hi. Good afternoon. I had a battery storage question and a gravity storage question. So, you did mention applying your expertise to look at achieving greater energy density. I was thinking about technology improvements in general on the battery storage side. If we achieve advancements in battery lifetime, what would these do to project economics over time? I think longer contracts for possibly upgrading modules could enhance the outlook.

First, we’re focusing on announcing innovations aimed at achieving higher energy density by integrating structural options with civil and material science expertise within battery energy storage technology. We intend to improve low costs and safety—for instance, we’re exploring alternatives to rebar and steel in concrete design, replacing them with fiber reinforcements. We see this as an opportunity to address safety and meet local safety standards. Importantly, we approach our customer problems flexibly. We’re collaborating with customers to develop new solutions, and while we aren’t ready to make announcements yet, our projects will include joint products that fit specific requests.

Great. Thanks. Regarding Rudong, with all the experience now having built the first gravity storage project there, do you see subsequent projects achieving greater efficiency and shorter timelines? Anything in particular you look forward to for future projects in China?

It’s a great question! Our learning has been invaluable. Licensing our technology allows customization for each region or country. In China, while we hold the core technology license, we innovated around fiber-reinforced concrete. However, they opted for cast in place due to lower local labor costs resulting in a different scope. It reflects how gravity energy storage can be tailored locally. I’m thrilled to note our Rudong project achieved round-trip efficiency of 82% to 83% despite adjustments related to local design standards. Such performance is unprecedented among non-lithium ion storage systems. We are excited that our experience will enhance future iterations, and we’re currently assessing how to apply innovations from Rudong to projects in other regions.

Ladies and gentlemen, we have reached the end of the Q&A session. I would like to turn the floor back over to Robert Piconi for any closing comments.

Great. I want to thank everybody for their time. I apologize for not getting to all questions; we will follow up as normal post-call. We’re excited about our progress and an exciting finish to the year. Execution of our long-term strategy is manifesting with announcements on the way, and I thank our employees at Energy Vault and our investors and partners for supporting our advancement in recent years. Thank you all.

And ladies and gentlemen, that does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.