Fluence Energy’s first quarter was marked by a sharp year-on-year revenue decline, but the company outperformed Wall Street’s expectations, leading to a positive market reaction. Management attributed this to accelerated project execution, particularly in the Americas and Asia-Pacific, and highlighted improvements in supply chain efficiency. CEO Julian Nebreda noted that the company achieved key project milestones earlier than planned and maintained double-digit adjusted gross profit margins. Fluence’s backlog remained robust, with $4.9 billion at quarter end, and the company continued to see growth in its recurring digital and services revenue platform. Nebreda emphasized, “Our execution helped us to deliver on project milestones earlier than expected.”
Is now the time to buy FLNC? Find out in our full research report (it’s free).
Fluence Energy (FLNC) Q1 CY2025 Highlights:
- Revenue: $431.6 million vs analyst estimates of $343.5 million (30.7% year-on-year decline, 25.7% beat)
- Adjusted EBITDA: -$30.41 million vs analyst estimates of -$31.55 million (-7% margin, 3.6% beat)
- The company dropped its revenue guidance for the full year to $2.7 billion at the midpoint from $3.4 billion, a 20.6% decrease
- EBITDA guidance for the full year is $10 million at the midpoint, below analyst estimates of $46 million
- Operating Margin: -10.4%, down from -2.5% in the same quarter last year
- Deployed Megawatts for Digital Contracts: 19,900, up 2,700 year on year
- Backlog: $4.9 billion at quarter end
- Market Capitalization: $802.6 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Fluence Energy’s Q1 Earnings Call
- Brian Lee (Goldman Sachs) asked about the scaling potential of domestic cell production and the impact of mixing domestic and imported batteries on revenue capacity. CEO Julian Nebreda and CFO Ahmed Pasha clarified that blending strategies allow for cost-effective offerings even under high tariffs and that domestic supply can support significant order volumes.
- George Gianarikas (Canaccord) inquired about potential regulatory restrictions on facility ownership and how the company would adapt. Nebreda stated that Fluence is prepared for ownership-related policy shifts and has plans in place with manufacturing partners to ensure compliance.
- Dylan Nassano (Wolfe Research) sought clarification on alternative cell sourcing outside China and the status of delayed Australian projects. Nebreda noted limited non-China supply but ongoing efforts to diversify, and confirmed that previously delayed Australian projects are expected to proceed within the year.
- Ameet Thakkar (BMO Capital Markets) questioned the composition of the $700 million in paused contracts and risk-sharing mechanisms. Nebreda explained that about half were executed contracts paused early in execution, with risk-sharing designed to align Fluence’s and customers’ interests in resuming work when conditions permit.
- Andrew Percoco (Morgan Stanley) asked why customers are not moving to 100% domestic cell offerings given tariff uncertainty. Nebreda answered that customers are waiting for tariff clarity before committing, as a tariff reduction could lower costs and change sourcing preferences.
Catalysts in Upcoming Quarters
Our analyst team is tracking (1) progress toward a resolution of U.S. tariff policy and any resumption of paused domestic contracts, (2) acceleration in international bookings, particularly in Australia and Europe, and (3) customer adoption and competitive positioning of Smartstack. Additionally, we will monitor Fluence’s ability to maintain margin discipline while scaling its domestic content strategy amid continued supply chain and regulatory changes.
Fluence Energy currently trades at $6.30, up from $4.50 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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