Bloom Energy will be profitable this year, CEO says after IPO

Wall Street seemingly could not get enough of Bloom Energy Corp. on Wednesday, with shares rising more than 60% after an initial public offering that chief executive and founder K.R. Sridhar credited to his company’s ability to explain its purpose.

Investors “understood very clearly what the size of the market is, they understood what the opportunity is,” Sridhar told MarketWatch in a telephone interview.

Other solutions for rising global energy needs are “Band-Aids” that are not as reliable, as resilient to power fluctuations or as sustainable, he said.

Sridhar went on to say that Bloom Energy BE, +66.67% will be cash-flow positive and GAAP-profitable this year, and sustainably onward.

The company is already profitable as of the second quarter, he said.

In a pre-IPO regulatory filing, Bloom listed profits from operations of $5.7 million in the three months ended in March, mostly on a $121.3 million boost from products delivered, compared with $28 million in the three months ended March 2017. That reflected in part a $43.9 million one-time product revenue benefit due to a retroactive renewal of federal tax credits. It listed a net loss attributed to shareholders of $18 million.

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Bloom early Wednesday priced its initial public offering, selling 18 million shares at $15 apiece, the top of a $13-$15 range set earlier in July, to raise $270 million and valuing the company north of $2 billion.

Shares opened 30% higher on the New York Stock Exchange by midday Wednesday, and rapidly surpassed that to close at $25, up 67%.

Bloom, founded in 2001 and located in Sunnyvale, Calif., last had a valuation in private markets around $2.9 billion seven years ago.

Bloom Energy makes solid oxide fuel cells that are used in stationary power-generation servers as small as half the size of a typical shipping container. The servers, placed at client locations, convert natural gas or biogas into electricity through electrochemical reactions that result in lower emissions than traditional energy generation.

In a sign of confidence, almost a third of the shares reserved in the IPO for board members and Bloom Energy employees and family were solo, Sridhar said. Bloom backers included venture-capital powerhouses such as Kleiner Perkins Caufield & Byers and New Enterprise Associates.

“We had to restrict it,” Sridhar said. It was very positive that board members and employees didn’t see the IPO as an exit strategy, but wanted more, he said.

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The CEO said Bloom was “constantly scanning” for opportunities in other markets, having recently entered South Korea and being present in India and Japan.

Sridhar kept mum on potential acquisitions down the line, and said current the current business climate, with concerns about trade wars and tariffs pushing raw-materials prices higher, is unfortunate, but not a stumble for Bloom.

“We have multiple suppliers in several countries, including the U.S.,” he said. “It’s not a big deal for us at this point.”

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