Good day, thank you for standing by. Welcome to the Fluence Energy, Inc. First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during this session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please pres s star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lexington May, Vice President, Investor Relations. Please go ahead. Thank you. Good morning, welcome to Fluence Energy's First Quarter 2023 Earnings Conference Call. A copy of our earnings presentation, press release and supplementary metric sheet covering financial results along with supporting statements and schedules, including reconciliations and disclosures regarding non-GAAP financial measures, are posted on the investor relations section of our website at fluenceenergy.com. Joining me on this morning's call are Julian Nebreda, our President and Chief Executive Officer, Manu Sial, our Chief Financial Officer, and Rebecca Boll, our Chief Product Officer. During the course of this call, Fluence management may make certain forward-looking statements regarding various matters relating to our business and company that are not historical facts. Such statements are based upon the current expectations and certain assumptions, are therefore subject to certain risks and uncertainties. Many factors could cause actual results to differ materially. Please refer to our SEC filings for our forward-looking statements and for more information regarding certain risks and uncertainties that could impact our future results. You are cautioned to not place undue reliance on these forward-looking statements which speak only as of today. Also, please note that the company undertakes no duty to update or revise forward-looking 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 measure is available in our earnings materials on the company's investor relations website. Following our prepared comments, we will conduct a question and answer session with our team. During this time, to give more participants an opportunity to speak on this call, please limit yourself to one initial question and one follow-up. Thank you very much. I'll now turn the call over to Julian. Thank you, Lex. I would like to send a warm welcome to our investors, analysts and employees for participating on today's call. This morning, I will provide a brief update on our business and then review our progress on our strategic objectives. Following my remarks, Manu will discuss our financial performance as well as our outlook for the rest of the fiscal year. Starting on slide 4 with the key highlights. I'm pleased to report that we recognized $310 million of revenue during the quarter. More importantly, we improved gross margin through the quarter, both on an adjusted and GAAP basis. Our demand was strong across all 3 of our business lines, and new orders were approximately $856 million, highlighted by the 1,200 MWh contract with Ørsted we announced on our December call. Our signed contract backlog of December 31st was $2.7 billion, a quarter-over-quarter increase of more than 20%. Over 70% of our backlog is with non-related parties. Our recurring revenue businesses which consist of our services and digital business, continued to grow during the quarter. Our service attachment rate was 11% for the fourth quarter. Our deployed service attachment rate is greater than 90%, which is based on our cumulative service contracts relative to our deployed storage. Most of our customers wait to sign service agreements closer to the point when the storage solution is coming online. There is a usually a lag between storage contracts and service contracts. We believe deployed attachment rate is more reflective of our true service attachment rate due to the contracted lag that I just mentioned. Moving forward, we will be providing you with both our contracted and our deployed attachment rates. Additionally, our digital business signed more than 800 megawatts of contracts since the fourth quarter, providing us visibility to future revenue. Turning to slide five. I would like to discuss the five strategic objectives that we highlighted on our last earnings call and provide you with an update on our progress. First, on delivering profitable growth. I'm pleased to report that we are raising our fiscal year 23 guidance for both revenue and adjusted gross profit. As Manu will discuss in more detail, we're able to raise our guidance due to incremental demand and better supply chain assurance. Second, we will continue to develop products and solutions that our customers need. We're now ready to begin offering Northvolt NMC batteries in our Gen 6 Cubes. This provides our customers with more optionality when looking at solar solutions, and helps to diversify our battery supply by adding a European battery. Third, we will convert our supply chain into a competitive advantage. I'm pleased to say we have all our fiscal year 2023 battery requirements, either in-country or in-transit. Providing us high confidence for execution and achieving guidance. You may recall from last year, one of the challenges we faced was getting our batteries on time from our battery banks. They were often delayed, and as a result, we incurred in liquidity damages. Our team has done a tremendous job in mitigating this risk for 23 by ensuring that all our battery needs are within our control. Where we stand today, we don't foresee supply chain issues that could derail our fiscal year 23 expectations. We continue to implement our risk management processes and procedures, and those provide us with high confidence. Additionally, if we identify any issues that could cause us to deviate from our plans, we will act swiftly to mitigate the risk to the extent possible. Fourth, we will use Fluence Digital as a competitive differentiator and a margin driver. I'm pleased to announce 2 significant milestones in our digital business. First, we entered the ERCOT market with our Mosaic bidding application. Have been awarded an initial contract with a non-related global SPP utility. ERCOT is a rapidly expanding market, and provides a significant number of opportunities for our Mosaic application. Mosaic now is in 3 markets, Australia, Japan, and Korea. As we discussed last time, we're looking to expand to 4 additional markets in the next 3 years. Additionally, we have now successfully launched expanded O&M capability onto battery energy storages. This offering now provides those customers with renewable asset portfolios the opportunity to utilize one asset performance management platform for all their assets rather than multiple platforms. Finally, our fifth objective is to work better. We're continuing to see success on executing on our transformation, including enhancing our risk management capabilities, improving our project execution, and optimizing our cost structure, which I will touch on a little later. Turning to slide 6. Demand for energy storage continues to accelerate. Our pipeline now sits at more than $10.3 billion. Nearly 4 times our current backlog of $2.7 billion. As you can see from the chart, our pipeline reflects some early projects that are attributable to the Inflation Reduction Act. We expect we will see some of these projects turn into signed contracts beginning in the second half of this year. Additionally, our project leads are at an all-time high, which is a good leading indicator of potential opportunities. As such, we expect the IRA to drive our U.S. revenue growth in 2024 to 40%-50%. Thus implying consolidated revenue growth of 35%-40%, predicated on a timely issuance of the IRA's guidance. While the exact timing of the IRA guidance is unclear, we're hopeful that some initial commentary will be released this spring. Continuing with demand. We're becoming increasingly important by the actions and commentary coming out of Europe. Early this month, the European Commission unveiled its Green Deal Industrial Plan, which aims to increase spending and reduce regulations and red tape in order to accelerate the expansion of renewable energy and sustainable technologies. While it's still early days, the details of the plan have not been shared. We applaud the efforts of the European Commission as they take feasible steps towards securing their energy independence by increasing their share of renewable energy, including battery energy storage. On slide 7, we are highlighting some of the reasons why our customers choose us to provide their energy storage solutions. First, they're looking for someone who can provide them with a safe product. We're proud to be one of the market leaders in safety, and have so far surpassed the industry standards. Time after time, our customers tell us that safety is at their top priority when selecting an energy source. We will continue to make safety our highest priority when developing additional solutions. Second, performance. Our customers demand not only a safe product, but one that performs at a high level. To that point, we're pleased to have deployed the world's fastest responding battery energy storage facility. Our team has achieved demand response times below 150 milliseconds on assets deployed in Austin, setting the pace for performance. Third, bankability. This is critical to our customers as they look for project financing, especially for the larger projects, which are becoming more and more common. Banks and financial institutions have told our customers they feel confident in underwriting projects with Fluence battery energy storage solutions. In fact, in December of year, Polillo Island energy storage system, called SERB. This is our report in which BNEF surveyed 185 industry participants. One of the survey questions asked participants to rank the bankability of system integrators and providers. We're proud to be ranked at the top for bankability, reflecting a successful track record. Four, supply chains change assurance. Our customers want someone who will be able to deliver their projects on time. This can be done only with efficient supply chain. We're proud to say that we have all our battery needs for the remainder of the fiscal year, either in country or in-transit. This significantly reduces the risk of project delays. Our track record on safety and performance, our standing with banks and other lenders, and the steps we have taken to significantly reduce supply chains risks allows us to continue attracting some of the world's largest energy infrastructure players as our customers. These customers are seeking a long-term relationship that begins with our storage solutions and opens up the opportunity for long-term service and digital contracts that provide recurring revenue. This is evident as greater than 90% of our community storage deployed has a long-term service contract. Turning to slide 8. We continue to expand our digital offerings in order to help our customers maximize their profits. First, we have officially entered the ERCOT market with our Mosaic bidding application. This is now the third market for Mosaic, with the others being Australia, NEM and CAISO. More importantly, we have been awarded our first contract in ERCOT. We signed a framework agreement with an unrelated global IPP and utility to optimize any ERCOT batteries for online in the next three years. The first allotment totals 289 MW. It's a significant award as it establishes our product in a new market with a blue chip customer. Second, as I briefly mentioned, we have officially launched on to battery energy storage, our Nispera asset performance management platform. This is a major milestone as our Nispera platform is one of the first APMs in the world to be deployed into all four major renewable asset classes: wind, solar, pump hydro, and now battery energy storage. Nispera initial battery capabilities include providing real-time monitoring of the batteries and subcomponents, data and performance analysis of the system, and ticketing for asset makers. The advantage of Nispera bringing is that many of our customers own more than one renewable asset class. Nispera can now provide them with 1 APM for all renewable assets in the portfolio. Instead of having different APMs for each asset class, they can now have just 1 for the entire portfolio. Similar to our Mosaic offering, the overall objective of our Nispera product is to maximize our customer profits. By having an asset performance management platform, we're able to help lower the total cost of ownership for our customers and increase our customers' return on us. Turning to slide 9, as is evident from our financial results, we're making a tremendous progress on our transformation. As we briefly discussed on our last call, our transformation is focused on 3 main areas. The first is enhancing our risk management. We have put in place a set of managerial and commercial initiatives to ensure we identify all material risks, assume the one we can manage more efficiently and effectively, and ensure all risks are quantified and mitigated to the extent possible with the proper confidence. The more robust risk management allows us to be more confident on our prospective financial results. As all these processes and measures continue to mature, we will continue to provide further clarity on the prospects of our performance. There's still some way to go in our endeavors. However, I am confident in our ability to continue moving this path forward. Second, improving our execution. A major driver of our execution is our product development capabilities. We recently revamped our product roadmap initiatives by breaking down our product development projects into smaller units. Moving away from the concept of generation milestones and concentrated on improvements rather than big overhauls. The smaller projects are easier to manage, more efficient, and faster to market. In addition, our recently established testing facility allows us to test each new improvement at a system level, and we are able to troubleshoot issues and identify problems before going to the customer site. Third, optimizing our cost structure. As we mentioned on our last call, we have been increasing our resources on an India technology center. We have been undertaking a competitive workforce strategy that reduces resources in higher cost countries and increases resources in lower cost countries. As part of this, we're utilizing our India technology center to provide necessary support functions and to retool our digital platform. I'm pleased to report that we made significant progress in this endeavor, and plan to double the number of employees in India by the end of our fiscal year. As a result, we expect India to represent 10%-15% of our talent, which provide us with the necessary resources for our significant growth. By focusing on our resources in lower cost countries like India, we're able to reduce our operating leverage as a% of revenue, as Manu will later touch on. I'm pleased with the achievement of the first quarter. We're mindful there's still a lot of work to be done. We will look to continue this momentum as we progress through the remainder of the year. This concludes my prepared remarks. I will now turn the call over to Manu. Thank you, Julian. Good morning, everyone. I will begin by reviewing our financial performance for the first quarter and then discuss our outlook and guidance for fiscal year 2023. Please turn to slide 11. In the first quarter, in addition to having the highest order quarter in our history, we delivered $310 million in revenue, representing an increase of 78% year-over-year. We continue to effectively manage our global supply chain and execute on our backlog, including working through our legacy backlog. Greater than 95% of our first quarter sales was made up of legacy backlog. We expect to be materially complete by the end of fiscal year 2023. Moving to gross profit, I'm pleased to report that we generated positive gross profit in the first quarter. We continue to strengthen our contract compliance controls and risk management practices. Our gross margin number in the first quarter includes the recovery of net gains worth $80 million we had made against one of our battery suppliers that we previously disclosed and was accounted for as a reduction of two cost of goods sold. The important takeaway is that we are instilling stronger contract compliance procedures to enable us to recover damages per our contract terms if necessary. With regard to operating expense and Adjusted EBITDA, first quarter operating expense, excluding stock compensation, was approximately $54 million, which is in line with the fourth quarter of 2022. As Julian mentioned, we are executing on our plan to optimize our global workforce, including through leveraging our India technology center. Our previously communicated model of holding operating expense growth to less than 50% of revenue growth is intact, and we expect full year 2022 operating expense spend as a percentage of sales to represent the high watermark. This model helps create operating leverage and will drive the improvement in Adjusted EBITDA that we expect in 2023 and beyond. Turning to our cash balance. We ended the quarter with approximately $460 million of total cash, including short-term investments and restricted cash. This figure is in line with our comments on our Q4 earnings call. Rounding out the balance sheet discussion, inventory increased by approximately $400 million versus the prior quarter as a risk mitigation strategy to provide us with supply chain assurance for our 2023 revenue guidance. As Julian mentioned, all of our battery needs for 2023 are now either in country or in transit from China. The inventory build in the first quarter significantly de-risked our 2023 revenue guidance and a significant portion was funded by customer advances and milestone payments. Given our planned first quarter inventory build, we expect our cash usage in the second quarter to be slightly higher than in the first quarter. We do expect inventory turns to improve as we exit 2023 and end 2023 with liquidity greater than $500 million between cash balance and undrawn revolver in line with previously communicated cash framework. We do not believe we need to raise any additional capital to meet our needs. Please turn to slide 12. As Julian briefly mentioned, we are increasing our fiscal year 2023 guidance for both revenue and adjusted gross profit. We now expect our total revenue to be between $1.6 billion and $1.8 billion, which is up from our previous revenue guidance of $1.4 billion to $1.7 billion. Additionally, we now expect our adjusted gross profit to be between $85 million and $115 million. This is up from our previous adjusted gross profit guidance of $60 million to $100 million. The guidance increase is due to the incremental demand and better supply chain visibility. We provided more detail in our appendix, similar to last quarter. We're coming into the second quarter with 99% of our 2023 expected revenue in our backlog, providing us high visibility to achieving our guidance. In terms of revenue seasonality, we still expect to see a split of approximately 40% in the first half and 60% in the second half of our fiscal year. As Julian briefly touched on, we expect the IRA tailwinds to benefit order growth in the second half of 2023, with the benefit to top line revenue and gross profit mostly occurring in 2024 and beyond. Thus, we have not included any IRA impact in our 2023 revenue and gross profit guidance. Before I turn this call back to Julian for final remarks, I would like to reiterate that we are committed to and on track to being Adjusted EBITDA positive in 2024. With that, I'll turn the call back over to Julian. Thank you, Manu. In closing, I want to reiterate what I consider the main takeaways from this quarter results. First, we had a strong quarter in terms of our financial performance. We are with our highest order intake in Fluence history, providing us with a solid base from which we can launch the strong growth we foresee for our company. We continue to make significant progress on our risk management, most notably for this quarter, reducing our supply chain risk through several actions, as reflected in having ordered 2023 battery needs in country or in transit. We continue to expand our offerings, also grow our networks in developing new products and solutions that create value for our customers, especially relevant this quarter, the new Nispera battery management software. All the efforts covered in today's call provide us with high confidence to increase our total revenue and adjusted gross profit guidance for fiscal year 2022 and achieve the positive EBITDA in 2024. This will conclude my prepared remarks. We are now open it up for questions. Thank you. Thank you, everyone. Thank you. As a reminder, to ask a question, you'll need to press star one one on your telephone. To withdraw your question, please press star 1 1 again. Please wait for your name to be announced. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from the line of James West with Evercore ISI. Your line is now open. Hey, good morning, guys. Hey, James. Hey, James. Good morning. Julian, you know, obviously really strong order intake this quarter and it raised guidance, so very positive moves there. I'm curious what you're seeing in terms of pricing because demand is running, you know, well ahead of supply in the market. Kind of thinking about your drive here, you and Manu's drive to, you know, to profitable growth, I mean, significant growth but profitable growth, are you at the point where you can exact some pricing power onto the market? You know, we see pricing, as you said, you know, demand is strong. We see pricing supporting our 10%-15% margin of, you know, what we have set to the market. I think within that range, some segments are better, some, you know, some segments are in the upper side of the range. Some segments are in the lower side. Generally, you know, we are kind of in that range. That's where Okay. Okay. Understood. Okay. Yeah. just to add is you can start to see that in the new deals we are signing. Right. Every six months as well. Okay. Okay. Makes sense. Maybe a follow-up for me, a little bit unrelated, but on the software side of the business, there's a good uptake on Mosaic, and Nispera is seeing some progress here as well. What's the go-to-market strategy with those software packages? Do you sell them as a package? Do they go individually? What's the, I guess, how is that process run and, yeah. As we, you know, communicated in the last earnings call, remember, one of the things that we're doing is integrating our sales channels better. Right. The reality is that the Nispera product is a global product, so we can sell it all around the world in all our batteries, wherever they are located. Mosaic is a market product that works in Australia, in California, and now in ERCOT. Okay. You know, you cannot integrate the two together because they are different and depends on the business case that each of our customers ask. We're integrating with our offering to make it to be a lot more efficient in the way we sell it. That's the way to think about it. You will see, I think a closer integration of our APM or Nispera offering into our product sales as we continue to move forward. It is a global product, the same as our products. Okay, understood. Got it. Thanks, Julian. Thank you. Thank you, James. Thank you. Thank you. One moment for our next question. Our next question comes from the line of George Gianarikas with Canaccord Genuity. Your line is now open. Hey, good morning, everyone. Thank you for taking my question. Good morning, George. I'd like to ask about gross margins, and I don't wanna put the cart before the horse, but you've done a really good job getting them back into the mid-single digits. You know, previously, you had guided for your hardware business to be somewhere in the mid-teens, I believe. Is that, given there have been multiple structural changes to the way you contract, is there potential upside to that mid-teens gross margin target long term? No. I think as I said, I think we're still seeing these, you know, between 10 and 15, you know, lower teens. Some markets doing better, some markets doing, you know, a lot tighter. You know, our view hasn't changed. Not today. You know, things, you know, this is something that clearly we're on top of. I'm, you know, I'm clearly always talking to our sales team to ensure we looked at the segments where we can, you know, capture better margins. Today, we are reading what we told you. What Jessel kind of explained why we are not seeing that in our results today. As you know, we are getting out of our legacy contracts. You know, we probably will be out completely our legacy contracts by with the time we close this fiscal year. You should see not only improvement on margin during the year. We should see the new contract coming full in 2024 going forward. Thank you. And maybe as a follow-up, you know, we continue to read about auto companies, not only obviously building cells, battery cells, but investing in lithium mines. I'm curious as to, you know, when you think strategically over the next couple of few years, I know you have enough supply currently, but is getting deeper into the supply chain something that's of interest and or do you have to maybe partner with, more deeply partner with a cell manufacturer long term? Thank you. No. Last quarter, we announced that we were moving into volume production, which is a little bit of a further vertical integration with a way of trying or with the objective of commoditizing the cells, essentially. Opening up the people we can buy from, accelerating the time at which we can integrate cells and for getting, you know, a stronger position in the cell, you know, supply chain structure. We don't have plans to go further down, you know, that's essentially what we're doing. I would think that our current view is that we're in the soft commodity, that going further down, you know, it's not, it will not be efficient or effective for us. Thank you. Thanks, George. All right. Our next question will come from the line of Maheep Mandloi with Credit Suisse. Your line is now open. Hey, morning. Hi, everyone. Thanks for taking the questions here. Hi, Maheep. Good Good morning. Yeah, absolutely. Maybe just start with, can you just talk more about the, you know, the supply chain improvements you're seeing here? Is this something you're seeing throughout the year here? Is it, you know, from a timing perspective? How should we think about that, like, kind of going into next year? Could we expect You know, just going back to the growth margin question, but, like, do you expect an earlier, faster ramp to your gross margin target here? You know, 1 of the reasons why we were able to raise our guidance for the year is that we feel more confident on our supply chains. You know, last year, at the end of last year, when the zero COVID policy in China ended, there was this view that we might enter into similar situation like what we had, you know, when COVID started. Remember? That didn't materialize. That made us make the decision to try to accelerate. Because it was not costly, it wasn't require a lot of working capital, we could do it, accelerate our battery and get as much of them out under our control as possible. We're able to get the most out. The reality is that we have seen no disruption. You know? That's the reality. Great action, we feel makes us feel confident. It gives us further assurance to meet our guidance. We have seen no delays, you know. No, our supply chains seems to be, you know, it's normalized and it's fine. You know, logistics, which was a main issue a year ago, no longer an issue. The prices of transferring, you know, moving things around are not back to pre-pandemic prices, but are in line with what, you know, are considered normal. You know, we're happy. I will tell you, this is my view on this, where we are today. Our view of the world connects with our financial guidance to the market. As the world improves, and it improves to a point that we believe that we will do better, we'll communicate it to you like we're doing today, you know, and that's how we see. But we're very confident that the world as it is today and where with our, with our risk management tools will lead us to the, you know, the range in terms of gross profit and revenue we've set for ourselves for this year. Having said that, and being maybe a little optimistic, and maybe different words that maybe come back to haunt me, I think the market, you know, demand is growing. You know, there's a lot more supplies, getting things moving things are cheaper, you know. you know, growth have ways that might improve our world, our view later on, but I think that where we are today, the world as we see it today leads us to the guidance we're providing. Yeah, Armando, please. I think the only thing, Maheep, you'd appreciate, you know, we have both narrowed the range and upped the range in terms of our revenue guidance that's on the max, both from a backlog confidence perspective and supply chain. We provide more, you know, firmness on our 2024 of how to think about from a revenue perspective. That is also driven by the fact that we feel confident about our supply chain assurance going into 2024 more. Got it. No, that's really helpful. Maybe just on manufacturing, I know you guys talked about all the benefits from IRA, but could you just take a remind on the module manufacturing you CAISO were talking about on the last call? Yeah. -timing on- Yeah. Yeah. Sorry, go ahead. Thank you for the call. I mean, for the question. As we said last time, we are in the process of developing the technology and putting in place the manufacture. Our view is that we'll be ready summer of 2024. It's going well, you know? Milestones are being met. You know, we met the team yesterday, you know, and the update looks very good. I'm, you know, very happy with the process. We should be able to start, you know, manufacturing out of our manufacturing facility here in the U.S. in the summer of 2024 as we. Very happy, you know. Gotcha. No, thanks for the update. Yes, I'll jump back in the queue. Thank you. Thank you Maheep. Thank you. Our next question comes from the line of Brian Lee with Goldman Sachs. Your line is now open. Hey, Ryan. Hey. Good morning. Hey, guys. Good morning. Good morning. Kudos on the last execution here. Hey, Manu. Couple questions from me, I guess. I really appreciate all the additional disclosure and color around the guidance here and even kind of the first look at 2024. I know most of it is focused around kind of volume demand, revenue upside, as you factor in the impact of IRA. I think you alluded to also embedding some impact on profit margins. Can you maybe elaborate a little bit on what you're assuming in 2024 in terms of impact of IRA, whether it's pricing, it's something on, you know, the COG side? Just it sounds like there's some margin, uplift you're assuming and just trying to get a sense of what you're embedding in there and also, where the puts and takes are if you could see even more versus what you're base casing right now. Thank you, Ryan. You know, our core view on the IRA is that it's the same today. What we are embedded in our view of the market we're communicating to you is a volume. We are feel more confident, so we can give you the guidance of, you know, on 35%-40% increase in revenue for next year, and that will be profitable, EBITDA profit. I just said EBITDA profitable for today for, you know, in line with what kind of communicated and improvement. It's a volume. Today, I don't think we are at a stage where we are today that we can commit or embed in our guidance increases in margin, you know. We continue, as I said, 10-15, some segments higher, some segments on the lower side, but in line with what we've been telling the market, you know, what we're gonna do. We're not at a point that we can expand our margin objects. Okay, fair enough. We'll, we'll look out for more color. I guess, second question from me, and I'll pass it on, is on the contract to backlog, you know, a healthy number here, $2.7 billion. You clearly have the revenue guidance, in your crosshairs for 2023. Can you remind us sort of how you define backlog? You know, the $2.7 billion, why wouldn't it translate to potentially a higher revenue, opportunity in 2023 versus the $1.6 billion-$1.8 billion you're guiding to today? And then also the mix of the backlog, if you could kind of articulate what the $2.7 billion is comprised of? Thanks, guys. Sure. I'll let Manu. Yeah, sure. Just from a layering in, if you take the remaining, you know, three quarters of the year, and take our midpoint to our first quarter actual, that's roughly $1.4 billion. Sort of the $2.7 billion, $1.4 billion translates into the year. Typically, from a cycle time perspective, our backlogs translate into revenue between, call it, 12-18 months, and some may be a little longer, some may be, you know, towards the lower end of the 12 months. I think that's been a normal kind of translation of backlog from a revenue perspective going into 2023 and 2024. Look, as we tighten up from an execution perspective and a supply chain assurance perspective, is it possible that some of that backlog that we have articulated for 2024 feeds back into 2023 and gets us closer to the top end of our guidance range? Yeah, that's certainly something that we internally strive for. From a guidance perspective and from a color perspective, we are comfortable with what we've told you, which is, we've narrowed the range, increased the midpoint to $1.7 billion, and we've kind of provided a firmer footing to our 2024 number of revenue guidance between 35%-40%, and that's on the strength of what we are seeing in the backlog and, more importantly, what we expect to see come down the pipe in the second half of the year from the IRA perspective. Okay, fair enough. I'll pass it on. Thanks, guys. Thanks, Ryan. Thank you. Our next question comes from the line of David Peters with Wolfe Research. Your line is now open. Good morning, David. Yeah. Hey, good morning, everybody. Morning. Hey, on slide six, just you're pointing to the IRA driving revenue growth of 40%-50% in the U.S. Just on the consolidated top-line growth that you're pointing to, I think that implies international growth just above 20. Just on the international piece, curious if you could speak to the visibility there at this point. Is most of that coming from Europe or Asia? I think it's a combination. Both markets are similar in size from our point of view. Some of the markets are, you know, if you move at some point faster or slower as we move forward. That's kind of the way I, you know, I think a lot about it. You know, where are the markets where we see the most growth? The U.K., Australia are probably the ones where growth seems to be. Taiwan and the Philippines have been attractive markets for us. We'll work with them. You know, Germany with a transmission project has proven to be a good market for growth. I think that, you know, long term, these two markets should tend to, you know, represent roughly the same size. Today, in fact, in our numbers, they're a little bit smaller, but we see significant growth coming forward. Okay, great. Then just specifically with what you need clarification on from the IRS by April or this spring, I guess, just to ensure that the 2024 growth expectation in the U.S. materializes, just what specifically do you need clarification on? I don't think that, you know, it won't affect in any way 2022 revenue. It could affect some time in 2024, but, you know, I'm, you know, fairly confident that, I think that the clarifications for what we're waiting for is someone seems to ensure that we can have U.S. manufacturing content and that, you know, they are developed, you know, as we continue to look at capturing some of the value that comes out of the fresh air that we can capture more than anything. I will say that it's very unlikely that the guidance will affect what we are telling you for 2024. Okay, great. Thank you. Thank you. Our next question comes from Ryan Levine with Citi. Your line is now open. Good morning. Good morning, Ryan. I'm looking at your go-to-market strategy. Good morning. Regarding the Mosaic entrance into the ERCOT market, can you speak to how the product differentiated for ERCOT versus CAISO? Should we be looking for additional markets that you'd be entering in the near term on that product? You know, this, our Mosaic product has its main go-to frame. It is, you know, very good foresight. You know, the ability to predict with attracted to what's gonna happen in the markets in the high 90s. That happens for every market, you need to really, you know, to really work to get to high numbers, you need to ensure your database and your artificial intelligence tools are working effectively. That's why it essentially happens. The tool provides the same, you know, a height of where the market is gonna play in terms of volumes and price going forward. In terms of growth, what we have, you know, as we discussed in our last call, we are re-platforming the Mosaic tool. Why? It had proven that it was, you know, it was too costly and too cumbersome, the process of the architecture needed some improvements to ensure that we can move, you know, standard into new markets at more reasonable costs. You know, clearly that didn't really matter in California and ERCOT because these are very, very attractive markets, very liquid. A lot of players, you know. As we go into markets that are not as big, not as liquid, you know, we really needed to ensure that we manage the cost of the adaptation to new markets going forward. We're in that process, as we announced in the last call of re-platforming the tool. Our plan is to, once this re-platform is done, which will be around this year or early next year, our objective will be within the next three years to enter into four new markets. That's how we're thinking on it. We have not set dates, specific dates of which when each market will come, but, you know, you should expect them coming, you know, in 2024. As the product continues to evolve, are you seeing certain types of customers being more appropriate for this type of software package in terms of type of resource generation versus some of the initial asset classes that you identified through the IPO? I think we are working with the same, with the same, you know, global IPPs who are trading their stuff. That hasn't changed, the who we're working with. You know, it might change as we move into new markets, but for ERCOT and CAISO, I mean, them, we work with the same type of customers. Okay. Thank you. Thank you, Ryan. Thank you. Our next question comes from the line of Ben Kallo with Baird. Your line is now open. Hey, thank you, guys. Good quarter. Hey, Ben. Hey, just on the supply chain, could you talk to us and remind us about your cell supply and how you are with your current relationships and, you know, intent on if there is one on expanding those relationships? How you think about geographic risk on the supply chain from that front and mitigating that? I have a follow-up. Thank you. As you know, just to ensure, we're currently buying modules. We're not buying cells yet. We'll start buying cells once we have our own modules in, you know, for the summer of 2024. We're buying modules. We are. In terms of, today, we're actively looking to diversify the players we work with. We have replaced players. There is a significant or the great majority of our supply chain comes from China. You know, now we're working hard to diversify to Europe with the Nord Pool process we're doing, and we're working with some, you know, some other markets where we are, some Korean in production. Generally, when you look at it today, it's mostly China. As we move forward, I think we will continue, and I guess that's your question. We will continue to work with some of the people that we're working today. As we start buying cells, we will expand significantly the we can buy cells from. I think we will expand not only from these companies but also geographic. That's kind of where we are. We are actively, you know, diversification is the rule of the game. We have said just to our view of our companies that scale is fundamental for this company because scale is the only way to diversify at an optimal level. That's kind of, you know, our process. You know what I mean? I'll tell you that's where we are. Okay. Thank you. Just on slide seven, you talk about bankability. I'm just wondering, you know, if that, if, you know, the leadership you show here, if that makes a bigger difference, you know, now with the IRA and ITC from, you know, tax equity perspective? Thank you. Yeah. That's a great question. Thank you. Bankability is very important, especially for the in the U.S. market, where the project team are bigger and they are required, in some cases, more, you know, complex tax function or structures to make it work. We see sometimes that we are one of the few that are called to discuss this project because there are not that many players with whom you can build this and put it properly elsewhere. That, I think, is reflected in the fact that we're already seeing, you know, the IRA, you know, reflected in our pipeline. As we said, that we should see that higher volumes in 2024 coming out of that. It's clearly a competitive advantage, something that we take care of, you know, ensure that we're always, you know, the way we structure our deals and the way we think our product to ensure that we keep that leadership position in bankability. Thank you. Thanks, Dan. Thank you, Ed. Thank you. Our final question comes from the line of Julien Dumoulin-Smith with Bank of America. Your line is now open. Hey, Julian. Hey, guys. Good morning. Good morning. Hey, guys. Good morning. It's Alex Vrabel, actually on for Julian. Thanks for taking our question here. I appreciate it. Got it. Apologies here. This one's probably for Manu. It's a little bit in the weeds, but just trying to make sure we understand. You know, when we look at the deployed, I guess gigawatts, looks up pretty modestly versus the rev recognition coming up quite a bit. But I saw, I guess, unbilled receivables kind of shot up as well. Just trying to understand maybe the nuances there between rev rec and kind of the deployed number as well as, you know, what's reflected in the contracted backlog versus rev rec, if that makes sense. You know, just try to square all those pieces. Sure. Let me give you a couple of comments, and then we have more detailed definitions on slide 15 of our deck, and then there's a little bit more on our metric sheets. Just a way to think about it, right? Deployed, as we talk about that, is projects or solutions that have achieved substantial completion. Right. That's one. From a rev rec basis, as you know, we do a percentage of complete from a revenue recognition perspective, and therefore there is some portion of our, you know, megawatt hours that we recognize as we go. The reason we gave you the megawatt hours tied to revenue recognition because it's a good volume metric tied to our revenue dollars. I think that's one way to think about it. That way you can think about how we are doing in terms of our volume, pricing. This makes modeling easy. It's also, it's also a key metric that shows operational progress on a particular project. For a variety of reasons, that's a great metric for us to have a conversation on. We do give you the deployed megawatts and megawatt hours to show what projects have achieved substantial completion. Right. That's one. Our contracted backlog is a dollar number that is tied to the value of the project, and the layering in of that contracted backlog revenue dollars between the fiscal years 2023, 2024 is influenced in part by the percentage of completion methodology on how we book our revenue. Said differently, we may recognize revenue on a project in 2023 that may achieve substantial completion in 2024. Hopefully that was helpful. We can clear up any of the follow-ups in our comments. Yeah, no, I appreciate. I know it's kind of an in the weeds question, maybe one that's less in the weeds. Let's just talk about, you know, you guys obviously sourcing more and more from Northvolt. I think it's really impressive actually, that you say, you know, everything in country or in transit, a lot of line of sight there on that backlog. I mean, when you think about more, let's say, non-China sourcing, and sort of this IRA demand wedge on the other end. I mean, when we think about backlog, do you have a, I guess, a broad heuristic as far as line of sight that you anticipate, whether it's, you know, one year, two year or a lot longer, in this business? Clearly, it's evolving, but I think the, you know, the tea leaves would point towards you guys could have a lot more line of sight than you have had historically on that piece of the business. Just curious how you think about that? I'm not sure I follow completely the question. I mean, I do, you know, I, you know, I'll tell you kind of how I think or the insight, you know, or, you know, how we're looking forward. Supply chains diversifying, reducing the risk so that we can create. Clearly our strategic plan is to capture the IRA, so modules and then buy U.S. manufactured cells and manufacture our products here. In terms of what we're seeing today is, I will say what we see now what we can see eyesight today with our backlog is essentially products that are in line what we were doing. These are not we're not reflecting a U.S. manufactured product. We're not reflected, you know. Those will come up as we move forward, and we can, you know, secure the batteries, we can secure the supply chains, and we can get this forward. That will allow us clearly another point of size and maybe another, and another point of volumes that we have had, potentially, you know, a better view or a different view on markets. I don't know if I'm answering your question completely, maybe, Manuel. That's, that's how I, how I, how we think about it. Today we're very confident on 23, very, you know, very confident on the top line in 24, on the EBITDA line on 24, that's actually what we can compete on what we're seeing. Let me just bring this to a close as to how I thought about the question, similar to what Julien said. We've got 2023 supply chain all locked up, like we said. We've got backlog locked up as well. For 2024, we have great line of sight, both from a top-line perspective, we provided a fair bit of comments in this call. From a supply chain perspective, we have great line of sight of 2024, which gives us the confidence to get to the range we provided of 35%-40%, largely on the backs of the growth in energy management. From a diversification perspective, the way to think about diversification is we are going up the chain, and making our own BMS on our modules. The Northvolt also provides us a source of diversification. It's certainly on top of our mind, and there are multiple angles to it, like we articulated, both in terms of making our own systems as well as identifying sources that are non-China. No, that's helpful. Apologies if it was a little bit confusing. I'll take the rest offline. Thanks, guys. Thank you. Thank you. I would now like to turn the conference back over to Mr. Julian Nebreda for closing remarks. Thank you. Thank you very much. Thank you, everybody, for participating. You know, we're very, very happy with the quarter. I mean, I think that we have seen the initial effects of our turnaround. There's a long way to go. There's a lot of work we need to do. We need to continue maturing, you know, capturing our, you know, what we said, our objectives. Continue growing this company so we can, you know, capture the value through the scale, supply chains, de-risking, diversifying, capture the IRA and continue developing products and going with the markets and offering their customers the products that make their life different and make their world different. There's a lot of work, but, you know, we're happy. Probably will celebrate today, but the celebration will be more of an impulse to continue working as we're working. Great. Thank you all for participating and hope to talk to you all during the next, you know, few weeks. Bye-bye. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.