Julian Nebreda: Yes. So, on the growth, we clearly – I think that the best evidence of our growth capabilities comes out of our pipeline. So, we looked at our pipeline for this last quarter. We grew our pipeline by $600 million roughly, on top of converting $735 million to backlog. So, in reality, we added $1.3 billion into the pipeline this quarter. And that’s where – that gives the annual view. And on top of that, something that we don’t disclose, we have leads, projects that we’re working on with customers that we do not believe today we can consider at a 50% chance of happening within the next two years. When we looked at our leads, when we’re talking to our customers, what we’re doing gives us a good – we feel very confident that we can do a 35% to 40% for 2025.
So, that’s essentially where it is. In terms of on that – this number compared to our prices, we built our planning based on our current view of prices or on cost. So, as long as prices stay within what we think, where we are today generally, which is kind of what we think is going to stay for the foreseeable future, I think we should be fine. But what we have also seen, just to be clear, that if prices were continuing to come down, I think that generally what we see is I think volumes increase. So, we don’t feel that necessarily the 35% to 40% today, we don’t believe that the 35% to 40% growth will be affected by cost coming down or battery costs coming down so much that we won’t be able to meet it because of that, because at the end of the day, what happens, a lot of more projects, they – let’s say are 50%.
More of our pipeline projects convert into a reality because they’re easier to meet the economics of the customers. So, I think that’s our view on that one. Your second point, sorry, I did not – you had a second point.
Brian Lee: Yes, you covered most of it. I guess my question around cost was whether or not, I guess you have margin risk either up or down based on the security of supply in 2025 on volumes, like how long are (technical difficulty)?
Julian Nebreda: We continue to be to be – our strategy is not to take battery price cost risks. So, we transfer to our customer that, and that – and our view has always been, lead with the RMI. So, our view has always been, as prices of lithium come down, it goes to our customers. If it were to go up, our customers will pay a higher number, and we don’t want to become a commodities. There are much better players. There are much better ways of betting on, on the commodity movements than our stock. So, we continue with a strategy that hasn’t changed. We feel very, very confident on our 10% to 15% margin. So, I don’t think that that will be affected in any way.
Manu Sial: And Brian, the margins have held up, right? The battery prices are materially different today than they were a year back, and are …
Julian Nebreda: Not only how off. They have gone up.
Manu Sial: They’ve gone up, right. So, from that perspective, I think Julian and I feel fairly comfortable.
Julian Nebreda: That’s right. I think the lower battery prices are an opportunity, not a risk. Clearly, we have organized ourselves in a way that it will not be – it does not affect or changes affects our margin, but they are – generally, we see them as an opportunity.
Brian Lee: Thank you. I appreciate that. That’s what I would figure. Thank you, guys.
Operator: Thank you. One moment for our next question, please. Our next question comes from Andrew Crocco with Morgan Stanley. Your line is now open.
Andrew Crocco: Great. Thanks so much for taking the question. I guess just to come back to Brian’s question, I just want to make sure I understand this correctly. For the 2025 battery supply, have you locked in the pricing with your suppliers on that? I’m just kind of curious, if battery prices continue to fall and you’ve locked in your pricing for 2025, is it going to be more difficult to sign a 10%, 15% gross margin contract if you have a higher priced battery versus where prices go from here?
Julian Nebreda: I think that I’ll put it this way. We have contracts with our suppliers that aligns with the current market world, in a world where prices are coming down. So, that’s generally – so we’re not committing to significant volumes or fixed prices that will be out of price. That’s conceptually one side of the aspect. No, that’s very, very important. Very, very important from our point of view to have very competitive pricing that is better at market or better and the ability, the access to volumes. And I think what we had been able to design our contracts in a way that meets those goals. And in terms of margins, as I said hey, I see this as – I don’t think the lower pricing will affect our margins, our 10% to 15% margins going forward.
This is more of good news, no more than negative news. And our 10% to 15%, we feel very confident that’s the way we do deals. And people might argue, hey, your volumes are going to come down because now you are going to come out of a lower price. But the reality is that, as I said, a lot of more projects meet the return criteria for investors, of our customers. So, the volume more than covers any potential price reduction you might see around. So, this is a – as I said earlier, you cannot dream – if I looked at when I arrived, at $180 per megawatt hour prices to today, not going to say a price, not to be – let my competitors know, but it’s a different world and it doesn’t get any better. Well, maybe I’d be surprised the next year will be even better, but …
Andrew Crocco: Understood that. That’s super helpful context. And then I guess my follow-up would be, as you look at your backlog or even the pipeline, what percentage of it is new renewable energy projects that are adding battery storage versus maybe a retrofit opportunity? Obviously, the IRA presents an interesting opportunity there for retrofit. So, I’m just kind of curious how that’s breaking down as you look at the pipeline and backlog
