Operator: The next question comes from the line of Colin Rusch with Oppenheimer and Company. Your line is open.
Colin Rusch: Thanks so much, guys. Given…
Greg Cameron: Hey, Colin, we lost you.
Operator: His line appears to have dropped. Your next question comes from the line of Jeff Osborne with TD Cowen. Your line is open.
Jeff Osborne: Good evening. A couple questions on my side. I was wondering if we could just address that PPA V, I think it was about $150 million in revenue in the quarter. And so I’m just curious, Greg, what visibility do you have into Q4? I guess, originally — maybe steer me in the right direction, originally I was thinking the Amazon PDX 109 site in Oregon would be coming online here in late in the second half, as well as South Korea would be ramping up. And it doesn’t look like either of those have to happening with open — with the Oregon sites. So I’m just curious, can you just better flesh out the visibility for Q4? Would be helpful.
Greg Cameron: Yeah. Thanks Jeff. So when we went and looked at, we looked at the year and we looked at the sites that we expected to get over the course of the year, that’s still consistent. It was how we came in the year. I would say we did really well in the third quarter and making sure that we got everything closed and accepted, which gave us a nice lift even off of where I thought we’d be this time three months ago when we had this call. And I kind of gave a soft guidance for the quarter. But it doesn’t change. Based on the list of acceptances that we have planned in the US, in Korea and a few internationally, we see a path here to get — to stay consistent with the guidance we’ve given you based on what we anticipate to accept here over the next couple months.
Operator: And we have the line of Colin Rusch with Oppenheimer and Company back again. Your line is open.
Colin Rusch: Thanks so much guys. I’m not sure what happened there. Can you talk about the potential for pricing power given what we’re seeing in terms of interconnection delays, some of the rate increases that we’re seeing at the utilities and the level of demand that you’re talking about with some of these remote locations?
Greg Cameron: Yeah. I’ll start and then I’ll give it to KR. Listen, on a pricing basis, right, if you look at what we’ve been able to report over the past several quarters, even with some increases on IRRs and other things from the financiers, our pricing is flat to slightly up in certain places in markets. That’s driven not only by an increase in the ITC, but how we are positioning ourselves versus the grid and where they see prices increasing versus decreasing. So we’re holding onto that pricing power so far and we’ve been able to hold that in each of the quarters over the last couple — last two years. And that’s contributed a lot to our margin expansion that we’ve had. Going forward, I would say that trend will only continue, and we continue to prioritize our units in markets based on where we can get the best opportunity for growth in margin.
So we’re executing a lot of discipline to make sure we stay at these pricings even as we continue to grow at the levels we are. KR, are you — from a strategic standpoint, how you think about it?
KR Sridhar: Yeah. From a strategic point, Colin, I think you’ve been with us since IPO, the big question back then used to be, are we going to have pricing discipline or is pricing going to have to shrink pretty significantly as we scale up in volume? If you just look at the supply/demand mismatch, if you just look at the price of utility, electricity going up the way it is, there is no reason for us to not have pricing discipline. At the same time, we are not a instantaneous commodity. We are building these relationships over 15 years, 20 years with solid C&I customers who are going to be with us for a long time. So we clearly exercise our pricing in such a way that this is be fairly priced it for them, for us, and from a market perspective. That’s how we think about it.
Operator: The next question comes from the line of Michael Blum with Wells Fargo. Your line is open.
Michael Blum: Thanks. Good evening, everyone. I wonder if we just go back to the hydrogen hubs for a minute. Just want to get a better sense of — just any way you can size the opportunity and then, the timeline where you would actually start to see shipments that would start to hit the P&L.
KR Sridhar: So of the four hydrogen hubs out of the seven that we were participating in that actually won the DOE selection. What has come out so far is the DOE announcement, right? What needs to come out in addition to this is where PTC is and things like that, because that’s a very big part for the developers doing these hubs to figure out who the off-takers of their electricity are going to be and what the rules are. Then it’s about selecting and negotiating with the DOE and getting to where it needs to go. Most people would tell us today when we talk to the principals who are running these hubs, it’s in the 2025, 2026 timeframe is when we should see these projects going on. So the impact of this on our revenue, that’s the timeframe we think about, but there’s a very important case to be made out here, the DOE going through a very rigorous process and selecting these winners and the criteria for these winners send a huge market signal, not just in the US, but in Europe, in Asia, in Australia, where people are thinking about big projects.
So we think of this signal as a huge market signal and an affirmative market signal for Bloom.
Greg Cameron: Yeah. I’d say — I’d just add to that KR and Michael, I think our view on electrolyzer revenue remains intact. We always thought 2024 — we didn’t expect much material. As we move into 2025, you’ll begin to see some electrolyzer shipments that will impact revenue. And we expect this market to scale very quickly. It’s going to look very different to how we entered the fuel cell market and grew that over a consistent period of time at double-digits. This is going to scale very quickly, consistent with the 10-year guidance we put out two years ago, we still have confidence that’s the way this market’s going to develop.
KR Sridhar: And if you look at the policies, whether it’s local, state, federal, or global, all those policy incentives coming together is going to be a huge catalyst. And that’s the reason why Greg is saying you should expect the off-take once it takes off to be a pretty steep ramp and not the normal adoption of a new technology.
