Good afternoon, and welcome back to the SHARE Series Monday Management Update. I'm your host, Dan Aldridge, founder of the SHARE Series and Asbury Cove Advisors. With me today, I have the pleasure of speaking with Rob Piconi, CEO of Energy Vault. Rob has a great story. I'm gonna turn it over to him and let him talk to us about it. Tell us a little bit about Energy Vault, your service offerings, you know, the markets that you're in. Rob, I'll turn it over to you. Great, and good morning and afternoon to everybody, and thanks for having me, Dan. Energy Vault is focused on energy storage, pretty broadly, and we founded the company with a mission around decarbonization and focused on the energy storage criticality in that transition. That fundamentally means, when you're introducing more renewable energy sources like wind and solar onto the grid, you will need to be able to store those electrons due to the intermittency, to be able to essentially provide baseload power to substitute what today is primarily done with fossil fuel. In terms of our offerings, we focus broadly on the market, in terms of short duration, long duration, so long duration being typically north of four hours and up to 12+. And then we also are offering ultra-long duration or multi-day type of backup systems, as we announced with California's largest utility, that we'll talk about a little bit later. In terms of markets, I'd say geographically, we're targeting the largest markets in the world for storage, and that's not only in developing markets like here in the U.S., or in Europe or Japan, but also a lot of the larger developing markets. So pretty noteworthy in China, what we're doing with our gravity energy storage. We've made a few announcements in India, with some of the largest customers there in terms of initial deployments and looking at timing of those deployments now. In other developing parts of the world that are committed, whether through regulatory and/or other private commitments to energy storage. In terms of customer segments, just to round it out, we focus on utilities and the IPPs, independent power producers that serve them. We also target a lot of the larger industrial uses and customers that are looking at making that transition with 24/7 power, and even large players like sustainable aviation fuel, or any green fuel providers that really require long-duration storage, for example, for the production of green hydrogen to feed or power those processes. Perfect. So let's drill down on one of those, you know, in particular, the gravity energy storage technology. So can you tell us a little bit about the history there, you know, the technology that was developed, and how that first deployment's going? Sure, yeah. That was really foundational for us. As we founded the company, we definitely felt this urgency of time, so that we shouldn't be waiting, and therefore, a focus on technologies that were either proven or a combination of technologies that we could innovate around to get to market quickly. So hence the focus on gravity, initially, which is the basis of 90% of all energy storage today, are these large pumped hydroelectric dams. It was important the technology be sustainable, flexible. You know, we like to look at a longer technical life because that typically lends to better economics over time. You know, again, very similar to how utilities and customers have relied on pumped hydroelectric dams that have been around for about 100 years. And then this aspect of efficiencies of the system and this circular economic aspect was also important to us, so that we would be using materials that weren't scarce, but also potentially even recycled materials. So those were what really led us to begin with gravity, but also with a software platform that would automate that whole process of using gravity. In our case, we developed a way to mirror the good of pumped hydro, gravity moving a substance, in the case of pumped hydro, water, in our case, eco bricks or composite blocks, essentially up and down, that powers a motor that will discharge electricity, and for us, at height, those blocks represent potential energy. So that's where we initially focused and went through a process of developing a quarter scale and then a full-scale 5-megawatt system. We interconnected to the grid in Switzerland in 2020, and then adapted that design to go with a more modular solution called our EVx platform. And started essentially in the U.S., with Enel Green Power, in China, in 2022, breaking ground. So, sticking with gravity, particularly in China, can you talk about the project backlog there, and how the reception has been from other potential customers around the globe? Sure, yeah. That was really pioneering for us in getting started there, in a country in the world that I think, as most people know, produces the most greenhouse gases, actually, the most in the next five to seven countries combined. So, not lost on the world or on us, how important it is to help China in getting more renewables deployed. They also, as a country, have committed to a, what's called a Thirty/Sixty Plan, so by 2030, achieving net carbon neutral. There was recent news that Bloomberg reported that they're ahead of that plan. By 2060, essentially, getting to the point where they would be fully neutral. So 2030 is when they expect to stop increasing GHGs. 2060, the full net carbon neutral. So we targeted there and worked with a partner through U.S. and the Bush Family Foundation that has a lot of ties there, as well as with a local remediation player, public company in China, and have developed that system and are in the commissioning phases now. Already, infrastructure in place for the grid connection, so we announced that for last September. And I'd say in terms of backlog... Pretty interesting and impressive, I would say, from how they've executed, not only in their progress through two COVID shutdowns and getting the first 100 MWh system, but with announced about 3.3 GWh of projects. So those are formal contracts that in six or seven different provinces across China, and all of those, very interesting for us and for our investors, is those will all have future royalty streams for Energy Vault. So shifting gears a little bit to some of the other services. Let's talk about battery energy storage solutions, and can you give us an overview of really what that is, the success you've seen so far, and what else is in the works? Yeah, sure. We were very successful in our first year in announcing quite a few projects, and really, again, it really starts with the team. I would say, and the experience that we've built around that team, which really for the last 15 years, we've got folks that have been involved in some of the earliest deployments, both with integration of software as well as different technologies that were evolving, in those, in those first periods. And then fundamentally, that same team has architected a solution for our battery that is different. Of course, battery or the conventional techs that being deployed today, I think 95% of most all storage today are shorter duration lithium-ion. And that differentiation starts first with hardware, where we have an energy density that's helped us win some initial deals, in particular in California, where things are tight in some spaces, and helps with safety. The hardware also helps with a distributed architecture, and very modular, and helps with both reducing CapEx, the initial deployment, by about 3%-5%, which can be big, a big number overall, as well as the operating expense. Secondly, that gets to the software platform and how that gets managed, both in the operation of the system, but as well as other higher value add offerings in asset management and bid optimization. And then I'd say finally, in the core execution capability and the supply chain. There's been a lot of, I think, industry news about the difficulty of the supply chain, not only for batteries, which was probably the last 12 months has been more topical, but more recently, things like transformers and inverters, given the demand that's out there, driving a lot of the infrastructure growth in electronics. That's where we've built in flexibility. For example, our first battery deployments, we announced over a gigawatt-hour in our first year. Those were across different battery manufacturers, so Samsung out of Korea, BYD out of China with Nevada Energy, but as well, our own solution, our B-VAULT with Jupiter Power in Texas, and that's with the REPT, which is another Chinese provider, but integrated in our own, what's called an AC vault solution. I would say that those solutions overall, combined with what I started with the people, is really what has played well with some of the largest utilities and customers in the world. So one coming in from the audience, and I was gonna ask this one anyway, but it's competition, right? And so speak to competition, but across the different services you provide, and in particular, with battery storage. There's a lot of competitors out there, and so how do you guys differentiate? Yeah, it's... If you look at our first win, so let's talk about those, because those are already banked, and we're executing on those. A lot of that had to do with us having more of a flexible approach to the customer need. And we always talked about this internally, we're very focused on listening to our customers, and as we evolved the last three years, in particular, and some of this even surprised people that we were able and flexible enough to offer different duration solutions. So not only what I think people knew us in the earlier years with Gravity, but the fact that we developed and built a software platform to address customer needs broadly. And what we found is, in particular with utilities, is they're going through a transition where right now, the economics are paying for this short duration, 2-4-hour shifting, to hit those demand peaks. As more renewables are getting deployed, that's gonna shift to longer duration. So typically, you aren't addressing short duration with the same technology, you're addressing long duration, in general. And then we had even another utility, that came to us, with a multi-day type of solution, where we did a hybrid solution to solve that problem. But so with batteries in particular, we were very flexible, which led to wins with Wellhead, that just got deployed last quarter. We have the ribbon cutting actually this week down in Southern California, with some local officials who'll be there. I think with Nevada Energy, it was our supply chain capability that helped us win that deal, against, you know, some of the largest groups. In, in that case, it was Tesla. And then in Texas, and with Jupiter Power, again, that came down to timeframes and supply chain and flexibility, to meet their needs. So I would say that, the, both the hardware, software differentiation I, I mentioned, things like energy density, that were important, as I said, in California, as well as just our ability to execute and commit, from a supply chain that's been dynamic, to, to say the least. Let's shift gears a little bit and talk about your energy management system software. Can you talk about how it's integrated into your offering and how it's differentiated compared to your peers? Sure. I'd say fundamentally, we architected it to be flexible, which you have to be in this day and age. You know, we have customers sometimes that have their preferences, for example, for batteries. So in the case of Nevada Energy that works with BYD in large scale, or any customer that will have their preferences. So that flexibility has shown its value, as we've announced some deals with utilities and IPPs. The other thing is we focus, I would say, that at the ground level or at the first layer, if you can think about our software stack, is moving up the stack. But that ground layer has to do with the performance of the system itself, and that gets into the inner workings for how it's gonna work back into the grid environment, how it's gonna operate, and even predict using predictive analytics, that performance and, and potential failures, and getting in front of those markers that you can see as a failure might be coming. It gets fundamental for safety. So as we've heard about some of the large chemical fires out in the industry, that's creating concern and creating in places like New York and California, even formal government taking a more active role and starting to investigate the cause of some of those fires. So safety is table stakes for us. So I mean, it really starts there for us to be able to provide that. That software and that interaction with the hardware becomes fundamental. So that's a key part of the, I'd say, the performance of the battery system itself, and that helps to the CapEx and OpEx optimization. The second piece of this is where you're moving up the stack for higher value add in applications, for example, for asset management, for economic dispatching. And in our case, with our platform, we can manage the coexistence of generation technology with storage technologies and look at optimization KPIs around those. And that can add value to a lot of customers that have to manage that coexistence. All right, so let's talk a little bit about the market. You know, how big is it? Kinda what the total addressable market is that you guys are looking to serve? Yeah, there are some pretty big numbers out there. You know, I'm not gonna go out to 2040 because I don't think it's worthwhile looking out that far. But let's just look at the next 5-10 years. The numbers are big, I think up to in and around $300 billion. Now that's storage broadly. I'd say unique to Energy Vault, and I think this is important for investors, if you look at the deals we've announced across getting started with Gravity in Texas, with Enel Green Power, and in China with Atlas, getting started on over a gigawatt hour of battery solutions in the United States with Nevada Energy, Jupiter Power, Wellhead in California, and then the largest green hydrogen storage system announced in the United States, and I believe the world, for 300 megawatt-hours of capacity to back up, so for 2-4 days. It has expansion to go up to 4 days of power for the city of 5,000 residents. You know, our ability to address a large portion of that TAM is unique and remains unique. It's not just what, you know, we say we're going to do, but they're with announced deals with the largest customers, whether it be utility or IPPs in the world, and that are under execution now. So I'd say that gives us the ability to address a larger portion of that TAM. Now, let me share what we're not addressing. We aren't going behind the meter per se, or looking at the smaller C&I market. We don't staff ourselves to do that. We focus on large utility-scale and larger deals generally. Everything we've announced has been well north of 100 MWh, for example, unless we're doing some customer demonstration. So I think that's somewhat unique to us. The other thing that's unique from a market perspective is we're an early entrant in what either is the largest or will be the largest markets in the world, for example, China. We're an approved technology there already, going through our permissioning with gravity, as an alternative to pumped hydro, using gravity. And I think those things for investors, as they look at diversity and some of the larger markets and spending in the world, we're out in front in getting, you know, this, this, or I would say, our foot in the ground in some new and developing areas as well. I think Australia is another one that we're gonna. You're gonna be hearing more from us on that, given the nature of our investor base. Perfect. So let's talk a little bit about, you know, how your product, you know, it contributes to the adoption of energy storage. Can you discuss policy developments like the IRA, the Green New Deal, and how they impact Energy Vault? Sure. Yeah, we're involved in watching very closely, but not only watching, but both acting and educating, I'd say, as far as our presence in D.C. and ensuring that, you know, we have an active presence there to meet with policymakers. And I'm there about twice a quarter, so once every essentially six to eight weeks, I'm there and meeting with congressmen and women and senators, and discussing some of the things either specific to states or to policy. And the IRA, I think, is a great example of the U.S. leading and setting a precedent in the world that is now being replicated in what Europe is looking at, what Australia is looking at, and other countries of the world that even are mandating, for example, energy storage. So China is, I think, a great example where they have mandated energy storage at a certain percentage of any renewable power that's gonna get deployed, and right now that's up to 20%. If you announce, you know, a 500-megawatt, you know, solar plant, you're gonna have to have 100 megawatts of storage, and typically times 2-4- hours in China initially. And that gets large in a hurry. So I'd say, I think from a U.S. perspective or from what we're looking at globally, not only keeping well in touch with what's happening, but influencing and educating around, for example, alternative forms of storage. When people hear about storage, they think batteries, I think immediately. There's a lot of different technologies besides a lithium-ion battery that will play a role in this clean energy transition. Perfect. So as we're getting to the bottom of the hour, I want to really shift toward growth, right, and expectations going forward. We've got several questions from the audience. But the first one's really high level, you know, and can you provide us really with an overview of what the milestones investors should be looking for, right, for the next 12-24- months from growth from Energy Vault? Sure. Let me start just very near term, meaning what's happening now in terms of milestones. I think we had our first one just this past quarter with the first system we've turned over, that generated back last quarter, almost 13 GWh in energy to the grid. So I think one of the things people were looking for and are looking for this year is based on larger deals we announced last year, across technologies, how are we gonna turn them over? While it seems for me much longer, you know, the reality is we're just deploying our first systems now, and our company's still relatively young at about 6 years old. So I think the milestones for this second half of the year are around our execution and turning over our first systems, how is our software performing, and what are our customers saying about that? And I think we had a first data point with some announcements and some pretty flattering type of quotes from our customer in terms of how we performed on the first 275 MWh in California. And now this quarter, as a part of the ramp, and we announced our largest quarter to date, last quarter, at $174 million of revenue, and positively contributing to our bottom line in gross margin. And this is, I would say, as expected, we have a large second half ramp. This quarter, also a large ramp. So I'd say those, the milestones and our initial deals getting turned over would be one. Secondly, we're deploying our first gravity systems, and that's in China, we're under commissioning with that first system, so that would be a milestone coming both this quarter and into the next quarter and first half of the year on those other announced projects that are getting started. We've been public with what we're doing with Enel Green Power in Texas. So I think keeping an eye on how gravity's gonna evolve, deploy. I think looking at new territory expansions. We've announced an ability to license this technology, which you know, I think makes a lot of sense for gravity because it's primarily a locally deployed solution. It, it's a construction project, it's a building. There are power electronics and motors, in some of the larger countries, those can also be done locally. So I think those milestones, as you get into the next, you know, 3, 6, 9, 12 months around the technology and continuing to turn over systems, our first green hydrogen systems, that'll be an important milestone in June next year. And the first one in the world, looking at multi-day storage and backup capabilities, that's gonna be an area to watch. Think about all the data centers and the hyperscalers and what's happening there, where they're tremendous consumers of energy, and it's mission critical, they can't be down, those systems. So they have to try to get a sustainable source of backup. Very difficult economically today, but I think new things coming along, that, that can be an important market for us, too. So obviously, the flip side, right, to that question is risk, right? And so can you talk to us a little bit about what are the key risks, right, that you perceive, right, that would preclude you from reaching those goals? Yeah, I look. I think let's start macro first. I, you know, I think we continue to see that things are, and we're expecting to continue to be volatile from a capital markets perspective. That's driven by things like the interest rate environment, which still remains dynamic. Other geopolitical events, you know, we came off of a 2020, 2021 dominated by COVID, the pandemic, and shifted and continue to remain, unfortunately, in areas where we've got, you know, wars going on in the world, and that's unfortunate. And those types of things will create instability and potentially instability in particular, if they involve countries that have influence in supply chain or rare earth metals. So I think that macro environment we are planning to expect to continue. Obviously, if things improve, that's great, and that'll be upsides for sure. I'd say specific other risks for us have to do with some areas we're managing in and around our supply chain. We've been quite successful with that as far as batteries go. I think most recently, there's been more tightness around things like transformers, inverters, breakers, so circuit breakers and things that are feeding this infrastructure build-out that I talked about earlier. So I think that can influence timing of some of our customers' final CODs, and therefore, the notice to proceed, so we call NTPs for us. So that could influence, you know, actual revenue recognition. But I think it's important investors continue to look at backlog and bookings and those things will play out over time, whether there's some short-term constraints, I think. I'd say that's a risk potentially that may influence timing, but shouldn't influence the longer term thesis of investing in a company like ours in a growth, you know, growth segments that will continue to grow at good double-digit CAGRs. Perfect. So as a reminder to the audience, use the question feature at the top right of the video player to submit any questions directly to Rob and I. One more that just came in, specifically on growth. You, you mentioned the licensing royalty piece before. You know, can you give any color on how you expect that to grow? And should investors really start to think of that as, like, a ratable subscription-type revenue going forward? Sure, yeah. That's, if you think about a royalty, that comes on the heels of a license agreement that gets paid. In our case, with our Gravity solution, there's already been announcements. So I think looking at project announcements outside of a first project like we're building, and then the timing of those for expectations, we expect for the—from a royalty perspective, for, Energy Vault to come in in the second half of next year, and then essentially become a larger percentage of our revenue stream. Obviously, those come in at pretty much pure profit, so there's really not much cost left to allocate against that, because we've already turned over the technology as a part of the license. And so while those revenues are gonna be small and start in a single-digit% portion of our revenue, they're gonna be pure octane or high octane type of revenue, and that's always a good thing. That participation is not only on project revenues, but any revenues that our partners will receive. That includes maintenance revenues and things over time. So this will be a growing part of our business, the very, very high margin. And you know, investors looking at us announcing more territory expansions, for example, I'd keep an eye on those as milestones as we progress. But you're looking at something to set expectations properly out in the second half of 2024 and then 2025, 2026 and beyond, that'll become a higher percentage of our revenue stream. Thanks for that color. We're actually running out of time. We could probably talk for another 30 minutes, but wanted to thank you, Rob, for coming on. It was a great conversation. Wanna turn it back over to you for closing comments, then I'll end with some logistical thoughts. Sure. Well, Dan, first of all, just to thank you and the people that have tuned in here. We are in the middle of a very intense execution phase. Right now, as a company in parallel deployment here in the U.S., as well as commissioning in China and also the building out in Texas on the Gravity side of our Gravity technology there. So we're doing a lot, doing a lot globally, as you've seen, I think from our recent announcements. And as I said after our last earnings, we're very encouraged by what we're seeing now in more adoption in and around the Gravity technology. As you know, as both countries and customers are looking at long technical life assets that are flexible, and have very good levelized cost economics over time and proven tech, these factors become very important. Safety, so just to share that, that safety, reliability, this circular economic aspect, that's becoming more important to investors, and investors in terms of where they're gonna be putting money, whether that be in the equity markets or even in the debt markets, and how projects are gonna be financed. So I think those are things that have been important to us from our founding, and again, I would say somewhat unique in what we're addressing, how we're addressing it across multiple durations in the market today. So I'll leave it at that. Awesome. Well, Rob, thank you very much for the time. For the audience, thank you for participating. Up next at 2:00 P.M. is FendX, and that will be followed up at 2:30 P.M. by Starco Brands. Thanks for your participation, and I look forward to seeing you next time. Bye. All right.