Julian Nebreda: I mean, yeah, this is something we have looked at. We work with Google on a project. However, to be very sincere today, we’re so busy with utility scale projects that we are not – we haven’t really worked a lot on it recently. But we did have a project to test it with them. It went well but it’s something that we have not actually, in the recent quarters, something that we have not worked on. One of those opportunities were going to a point on battery cost reductions where these lowering of prices will start making these projects very attractive. It will make it a lot more attractive than what they were when we looked at it, I think, roughly a year ago. So I think this is kind of the type of things that that when we talked about the on demand elasticity.
Sorry for that, that you come that comes in. And it becomes this one off. You know, you, you put the price sets a point and turn, you turn the lights on and all this demand comes in those exist. And that’s a kind of my point to all of you on the tremendous head with – tremendous, tremendous tailwind of battery prices in our technology and how business cases start getting being pencil in and it becomes very, very attractive.
Andrew Crocco: Got it. That’s helpful. And I guess maybe just one more follow-up on that. When you had that pilot project or you did that demonstration with Google, was there anything on the software side or battery chemistry side that they were looking for to be changed versus your traditional utility customer?
Rebecca Boll: On the battery side, no, the chemistry same, the physical delivery of the product was the same based on the size of what we’re delivering for Google. There were some changes on the software side for the application space that that was working.
Operator: Our next question is going to come from the line of Julien Dumoulin-Smith Bank of America. Your line is open. Please go ahead.
Julien Dumoulin-Smith: Good morning, Julian. Team, good. Congrats again. I’m just coming back to the top of the Q&A roster here on the gross margin piece, I just want to come back to this a little bit. I mean, you guys obviously have this 10 to 15 and then 10 to 12 here in the near term. Starting off the year the way that you did with revenues really poised to scale through the year, again, I get there’s not an OpEx operating leverage piece here, but I mean to what extent can we expand to expect those gross margins to scale as revenues and the size of these projects conceivably continue to expand into the bulk of the year here? I mean, is there an argument to be trending higher within even that 10 to 12 range?
Ahmed Pasha: Julian, thanks for your complements. I think in terms of the gross margin, I think our, guidance was 10% to 12%. I think we feel pretty good about that range going through rest of the year. So I think it will be north of where we had realized in the first quarter, but I think we feel pretty good where, we will end up in terms of our range for the full year.
Julien Dumoulin-Smith: Got it. Excellent. And then, Julian, you mentioned this earlier on the domestic content. Your ability to potentially, I think, you said something like double AESC contributions here potentially if need be. I mean, just looking at the trade backdrop here, can you comment a little bit about like what the your ability to pivot is depending on any future shift in trade policy landscape here. I’m really curious about your ability shift even more so back to domestic product, especially if the ESS market demands it, what is your ability to bring that to market as you think about providing further disclosures to the year in scaling up, if you will.
Julian Nebreda: Yeah. I mean, this is a 2025 issue more than 2024. This line will come back will come online, or if these cells were coming up online, we are working with our suppliers to ensure that we have access to their additional demand – to additional production capabilities, and have a first right of refusal on the production that we move forward. This is a multiyear contract. So, this is what I can tell you. We haven’t really disclosed the volumes and stuff that we’re working with. But the way we, envision this project is a long-term relationship where we are able to take advantage of their increasing production as it continues moving forward. That’s the way I will put. So in case, I guess your questions indirectly, maybe I’m sorry that I’m implying is that what happens is that trade issues and then this production becomes even more value.
We, you know, we believe that we are putting to that into consideration the way we, at least for a period of time, to be able to scale up if this becomes a lot more attractive than what it is today due to potential trade disruptions.
Julien Dumoulin-Smith: Right. And your point is the 10% to 15% as it stands today, there’s fundamentally sort of upside as you disclose what that domestic content, sort of ASP is.
Julian Nebreda: That’s right. That’s our current view. We’ll talk more as we move forward and we sign these contracts and the competitive environment settles. But essentially, just going back, it is, our customers need to feel comfortable with their business cases. That they can capture more than what they usually capture and that we will capture part of what they that upside that we’re giving them. So that that’s kind of how all this works out. And we’re working with them on that process. And as soon as that settles down in a way that we’re comfortable is the way it’s going to work for a period of time. We’ll communicate to the financial markets what it what it is.
Operator: Our next question comes from the line of Kashy Harrison with Piper Sandler. Your line is open.
Kashy Harrison: First question is for 2024 guidance. You indicated that you have 80% already locked in and you should be able to 100% shortly, but I was just wondering if you could give a sense of how of where you were at this point last year, were you 80% booked last year as well, or were you 100% booked at this point for the prior year. And then just in general, how should we conceptually think about the amount of revenues that can be booked and captured within a year.
Julian Nebreda: Yeah. So last year, if you looked at our order, what we had in the backlog last year at the end of the first quarter, compare against where we ended in revenue, not where we were guiding. As you remember, we guided up over the years, so that gives a little bit of I’ll get we were roughly at 90%. So 90% of our revenue for 2023 was in our backlog, at this stage. So we’re a little bit behind compared to last year from that point of view. However, you know, looking at the late stage of development of our contracts and how we’re going to, – how we’re going to how we’re going – where these contracts are we have very, very high confidence that we will be able to secure the contracts we need to meet our guidance. That’s the way it is and that’s it. We feel very, very good. We have there are several contracts. They’re all we’re very positive in all of them, and it should allow us to be at a point that we’ll meet our guidance for the year.
Ahmed Pasha: Yes, Kashy, this is Ahmed. And I think your second part of your question was on the profile for rest of the year. I think as I discussed in my comments, you know, I mean, 70% of our revenue – annual revenue is in the second half. And it’s more back end loaded, but that is frankly all, based on our current contracts that we have, which are when we execute, it’s a timing when we are delivering those contracts. So it’s more driven by the timing of the projects that we have in our pipeline or backlog.
Kashy Harrison: Thanks for both of those responses. And my follow-up question is just around the order intake. You know, $1.1 billion clearly very impressive. If we look at last year in the prior year, it seems like your order – there was some type of order seasonality where the second quarter orders look about the same as the first quarter, then you have like a dip into 3Q and then somewhat of a recovery into 4Q. Is that directionally how we should, without giving, you know, super explicit order guidance, I’m just wondering if that’s how we should think about seasonality for orders in your in your business moving forward?
Julian Nebreda: I mean, if you look back every year it is very different. So I don’t think there is a strong seasonality in our order intake. So it moves around. So, it’s more of how things worked out and something that can be signed on December 15 or January 15 is quite nothing to do with season. It’s more of whether people want to take vacation to give you a sense of this quarter. We are cannot give you a view on seasonality product orders.
Operator: Our next question comes from the line of Mark Strouse with JP Morgan. Your line is open. Please go ahead.
Mark Strouse: Good morning, everybody. Thanks for taking our questions. I appreciate the color that you were giving earlier about no margin risk from changes in pricing because your contracts with your suppliers and your customers are locked in. Can you talk about the ability though of our customers to potentially cancel in order? I mean, especially if pricing goes lower enough, and if so, can you kind of give us what your average deposits that you’re collecting on those on those contracts? And then on the other side, do you then have the ability to turn around and cancel any orders with suppliers?
Julian Nebreda: Yeah, what we’re bringing our back log, our binding contracts that the customer cannot get out with making us hold on any on any cancellation. To this day, we have never seen a cancellation of our contract in our backlog. There’s a reason for it. We are very, very strict of what comes in. Even though we have contracts that we have signed, which are not in our backlog until they meet the conditions to ensure that the if there’s a cancellation, everybody’s covered. So, you know, haven’t seen a cancellation. Nobody has turned down. So that’s never been a risk and the contract will make it difficult for the customer to get out if they – if they will have significant financial penalties to ensure they meet and make us whole. But as I said, that has never happened. And your second question, sorry, can you mind reminding me?
