Dylan Nassano: Got it. Thank you. That’s it for me.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Ben Kallo with R.W. Baird. Your line is now open. Just following up on the last question, how do we think about your cell supply matching up with your geographic opportunities? Just being US cell supply or for domestic content, how are you guys thinking about that in 2025, 2026 and beyond with those contracts?
Julian Nebreda: We have – I think we are – besides the US sales, we manage the rest of the world as a global market. So, today, we don’t – there’s no risks from cells not having supply to any of our markets in a specific deal. Our deal for the US supply is a multi-year deal that will cover a few years, and I will expect that – that becomes a – solidifies, and it will continue for many years. And I will tell you something that I think is important. We do see that the US will have both domestic and import content. Also, we’ll have a mix at the end of the day. So, it’s not like the US market will become a fully only domestic content market, at least not at the beginning. For a while, you’ll see both imported batteries and the domestic content batteries competing here, so.
Ben Kallo: Thank you. In the past, you’ve made some acquisitions. I’m just wondering about – looking at your Slide 21, the different technologies either on hardware or software, if there’s areas that you see opportunities going forward.
Julian Nebreda: We have said from there that we were not going to do any M&A until we had a profitability. So, that continues to be the case. Clearly, this quarter has been good. My view on potential acquisitions is as follows. Clearly, we see M&A as an opportunity, maybe one of our value – ways of offering value to our customers. If we were to do any acquisitions, will be connected most likely to our product development, accelerating our product development. But we have no – we’re not working on any acquisitions. There’s nothing in the works, or we’re not talking to anybody. So, don’t be – there’s enough work with our current business and for us to make it happen, so.
Ben Kallo: Okay, sounds good.
Julian Nebreda: But if we do anything. It’ll be more on the technology side and connected to our product roadmap.
Ben Kallo: Great. Thank you.
Operator: Thank you. One moment for our next question, please. Our next question comes from line of Kashy Harrison with Piper Sandler. Your line is now open.
Kashy Harrison: Hey, good morning. Thank you for taking the questions. So, maybe just a quick follow-up on gross margins. Your fiscal 2024 guidance calls for 10% to 12%, but Manu discussed 10% to 15% as we think about fiscal 2025. And so, just wondering, what are some of the factors that could potentially push you towards the high end of that range, that 15%, versus the low end of the range of 10%?
Julian Nebreda: I think that clearly our execution capabilities move those higher up. But I think something as I mentioned that could be a material – I mean, I say a material driver will be the US content offering, if we can capture higher margins on that offering. So, that’s generally – when you looked at it, see it will be a combination of maybe even better execution. So, we can do better than what we expected and the US content offering, which might – the domestic content offering, which might – as I said, this is something that we might see as an opportunity for higher margins.
Kashy Harrison: That’s helpful. Thank you. And then just my follow up. Manu said this as well, and just doing the quick math, it’s clear that you guys think you’re going to be generating free cash flow. As we think about fiscal 2025, I know it’s very early, but if you actually do successfully – if Fluence actually successfully begins generating free cash flow, how do you think about capital allocation priorities for that free cash flow? Is it – are you going to look to M&A? Are you going to look to returning capital to shareholders to shore up the balance sheet? Maybe just thoughts on how you want to use free cash flow to create capital to shareholders?
Julian Nebreda: I think my view on it today, I don’t know if – supporting our growth. Technology, that’s what I think that where we – I don’t see us distributing cash flows or distributing dividends or anything of that sort. The growth is so – if the growth continues, as we expect it to continue, and I would see in the world, we will need all those resources to meet our customer needs to create – and that I think will be the best use of money and it will create the most value for shareholders. So, that’s our view. It might change over time, but that – if you ask me about 2025, that’s the way I think about it.
Kashy Harrison: Got it. Thank you.
Operator: Thank you. One moment for our next question, please. Our next question, our next question comes from line of Julien Dumoulin-Smith with Bank of America. Your line is now open.
Alex Vrabel: Hey, guys, Alex Vrabel on for Julian. Congratulations to you guys. Congrats to you, Manu. We’ll miss you in your next journey, but great results here. Maybe my first question just to – you guys obviously a lot of growth guided for next year, and obviously the indication for fiscal 2025 robust as well. I’m curious, just – we think about the bookings cadence to support that. If I look back in time, it seems like you guys see a pretty big step up in the first quarter, and then things seem to be sort of levelized one times or a little bit greater book to bill throughout the rest of the year. Is that what we should look for kind of next year, or is there any kind of gyrations or things we should watch for on cadence around IRA allowing projects to move forward or not that we should think about just as far as getting confidence in 2025?
Julian Nebreda: Yes, maybe what I think will be kind of the next step up will be the domestic content going back to it, so that which it will happen over the year. It’s difficult to have a seasonality on order intake, to be very, very sincere with you. It changes over time. So, I cannot give you a guidance and say you should expect much bigger first quarter and then everything kind of staying the same. It’s difficult to give you a view on that from where we are today. What we can say is that we feel very, very comfortable about our 2024 and 2025 guidance and with what – when we see how we’re converting pipeline into backlog, and when we are in discussions with our customers, we feel that we’re going to be able to meet very, very comfortably the 2024 and 2025 volume guidance that we just mentioned, so.
Alex Vrabel: Got it. Super helpful.
Julian Nebreda: That’s what I can say it. I don’t want – first, I don’t want to manage this company by quarter. I’ve told my team, listen, get the deals, the right deals. Don’t worry about meeting a quarter number because in terms of backlog, it doesn’t really matter. As long as we feel confident that we can make it happen, just do it whenever we get it.
