Rows of cabinets containing lithium ion batteries supplied by Fluence, a Siemens and AES Company, in Long Beach, California on September 16, 2022. Patrick T. Fallon | AFP | Getty Images (CNBC)
  • Fluence is predicting profitability in 2024, buoyed by unprecedented demand in the energy storage market.
  • The company says its siting on a record backlog and that the increasing integration of renewables into the U.S. grid, makes this all the more probable.
  • CEO says Fluence's technology underscores its pivotal role in balancing renewable energy supply and demand.

Fluence is on the brink of achieving profitability this year, buoyed by a record backlog, as announced by CEO Julian Nebreda.

This comes amidst a period of significant growth for the sector, driven by the increasing role of wind and solar energy in the U.S. power grid.

Despite a net loss in its most recent quarter, Fluence’s stock has seen an upward trajectory, rising about 13% over the week, a testament to the strong demand for energy storage solutions.

Founded in 2018 by giants Siemens and AES, Fluence quickly established itself as a pivotal player in the energy sector, going public in October 2021.

Although its shares have experienced volatility, declining about 36% since its IPO, the company has managed to secure a substantial contracted backlog worth $3.7 billion, thanks to a record quarterly intake of $1.1 billion.

This strong order book is indicative of the increasing utility sector’s reliance on advanced energy storage solutions to address the intermittency of renewable energy sources like wind and solar power.

The critical role of energy storage systems in balancing power supply and demand cannot be overstated.

As Nebreda pointed out, Fluence’s technology is essential for leveraging the full benefits of renewable energy, storing excess power generated during peak production times for use during demand peaks.

This capability is increasingly important as the grid transitions towards a more sustainable and renewable-focused energy mix.

Despite reporting a net loss for the quarter ending December 31, Fluence is optimistic about its financial outlook.

With a gross profit margin now in the double digits and a stable cost structure, the company forecasts profitability for the full year, backed by expected earnings before interest, taxes, depreciation, and amortization (EBITDA) of $50 million to $80 million in 2024.

This forecast is supported by a significant portion of Fluence’s revenue being backlogged towards the year’s end.

The energy storage market is poised for rapid expansion, with BloombergNEF predicting a 27% compound annual growth rate over the next six years.

This growth is fueled by the declining costs of battery technology, improved safety measures, and favorable legislation like the Inflation Reduction Act.

Analysts are increasingly bullish on Fluence’s prospects, with a majority rating the company’s stock as a buy and projecting substantial upside potential.

Derick Lila
Derick is a Clark University graduate—and Fulbright alumni with a Master's Degree in Environmental Science, and Policy. He has over a decade of solar industry research, marketing, and content strategy experience.

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