Fluence Energy, Inc.: Form 10-Q for the period ended Mar 31, 2026

Overview

The following analysis provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Fluence and should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes thereto included in this Report and in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 25, 2025 (the “2025 Annual Report”). In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition, and prospects based on current expectations that involve risks, uncertainties, and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed in Part I, Item 1A. “Risk Factors” of the 2025 Annual Report and the section titled “Cautionary Statement Regarding Forward-Looking Information” included elsewhere in this Report. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Fluence Energy, Inc. is a holding company whose sole material assets are the limited liability interests in Fluence Energy, LLC (the “LLC Interests”). All of our business is conducted through Fluence Energy, LLC, together with its subsidiaries, and the financial results of Fluence Energy, LLC are consolidated in our financial statements. Except where the context clearly indicates otherwise, “Fluence,” “we,” “us,” “our,” or the “Company” refers to Fluence Energy, Inc. and all of its direct and indirect subsidiaries, including Fluence Energy, LLC.

Our fiscal year begins on October 1 and ends on September 30. References to “fiscal year 2025,” and “fiscal year 2026” refer to the twelve months ended September 30, 2025 and ending September 30, 2026, respectively.

Key Factors, Trends, and Uncertainties Affecting our Performance

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in Part I, Item 1. “Business” and in Part I, Item 1A. “Risk Factors” within our 2025 Annual Report.

Industry Outlook

The utility-scale battery storage industry continues to experience unprecedented growth fueled in large part by: (i) the global transition toward renewable energy, (ii) heightened focus on grid resilience, (iii) overall declining lithium-ion battery prices in the last decade or so, (iv) increased electricity demand, and (v) supportive regulatory frameworks. BloombergNEF estimated in its 2H 2025 Energy Storage Market Outlook published on October 20, 2025 that the global utility scale market, excluding China, will add approximately 3,201 GWh between 2024 and 2035.

Growth of the battery storage industry and the continued adoption of energy storage solutions by our customers has been driven in part by the overall decrease in cost of lithium-ion energy storage hardware, mainly the cost of lithium-ion batteries, over the last decade or so. However, we have recently seen an increase in prices of lithium carbonate and other commodities since December 2025. The market for energy storage continues to rapidly evolve and while we believe lithium-ion battery costs will continue to decline over the long-term, they may not decline or decline at the rates we expect, if at all over the long-term. Our revenue growth is directly tied to the continued adoption of energy storage products by our customers, which may be affected by commodity raw material price fluctuations and component price fluctuations. As we have not historically been the buyer of raw materials for our components and energy storage products, we have not historically entered into hedging arrangements to mitigate commodity risk. Significant price changes or reduced availability for our raw materials and components has had and may in the future have a deleterious effect on our business, financial condition, and results of operations.

Regulatory and Supply Chain Updates

Our energy storage business is supported by a strategically diversified global supply chain. We continue to work to align our U.S. procurement strategy with the Inflation Reduction Act of 2022 (the “IRA”) and the One Big Beautiful Bill Act (“OBBBA”) as well as related agency guidance relating thereto. We believe that continued expansion and emphasis on domestic content under the IRA, as modified by the OBBBA, will provide Fluence with a competitive advantage. As of the date of this Report, we believe that under the current language of the OBBBA, which is subject to Treasury guidance issued on February 12, 2026 and any future regulations, our U.S. domestic suppliers are in compliance with the new applicable prohibited foreign entity (“PFE”) restrictions set forth in the OBBBA. Our procurement operations, however, remain subject to a complex and evolving supply chain and regulatory landscape. For more information about the potential risks relating to regulation and compliance and our supply chain, see Part I, Item 1A. “Risk Factors” in our 2025 Annual Report.

Our energy storage solutions incorporate many components and materials sourced from a variety of countries, resulting in exposure to international supply chain risks and logistics disruptions. Uncertain potential actions, policies, and legislation of various government authorities on international and domestic trade, including new or increased tariffs or quotas, border taxes, embargoes, safeguards, duties arising out of various governmental investigations, trade controls, and customs restrictions may impact our ability to manage our costs of production which may then impact our business and results of operations. For example, on February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed by the U.S. government under the International Emergency Economic Powers Act (“IEEPA”). In March 2026, the U.S. Court of International Trade ruled that the U.S. Customs and Border Protection (“CBP”) must refund duties imposed under IEEPA. In response, CBP launched the Consolidated Administration and Processing of Entries portal within the Automated Commercial Environment on April 20, 2026, and the Company has filed a claim for a refund of IEEPA tariffs previously paid. In addition, immediately after issuance of the decision regarding the IEEPA tariffs, the U.S. government initiated new tariffs under alternative authorities. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs and surcharges, potential changes or pauses to such tariffs, the tariff refund process and timing related thereto, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on Fluence’s business. Fluence continues to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations. See Part I, Item 1A. “Risk Factors” in our 2025 Annual Report for further discussion on risks relating to changes in the trade environment.

Legal Proceedings and Legal Contingencies

The results of any current or future litigation, government investigations, or other regulatory or legal proceedings to which we are a party cannot be predicted with certainty, and regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of claims, litigation, government investigations, and other regulatory or legal proceedings.

For a description of our material pending legal contingencies, please see “Note 14 - Commitments and Contingencies”, to the unaudited condensed consolidated financial statements included elsewhere in this Report.

Key Operating Metrics

The following tables present our key operating metrics as of March 31, 2026 and September 30, 2025. The tables below present the metrics in either Gigawatts (GW) or Gigawatt hours (GWh). Our key operating metrics focus on project milestones to measure our performance and designate each project as either “deployed”, “assets under management”, “contracted backlog”, or “pipeline”.

The following table presents our order intake for the three and six months ended March 31, 2026 and 2025. The table is presented in Gigawatts (GW):

Deployed

Deployed represents cumulative energy storage products and solutions that have achieved substantial completion and are not decommissioned. Deployed is monitored by management to measure our performance towards achieving project milestones.

Assets Under Management

Assets under management for service contracts represents our long-term service contracts with customers associated with our completed energy storage system products and solutions. In general, we start providing maintenance, monitoring, or other operational services after the storage product projects are completed. This is not limited to energy storage solutions delivered by Fluence. Assets under management for digital software represents contracts signed and active (post go live). Assets under management serves as an indicator of expected revenue from our customers and assists management in forecasting our expected financial performance.

Contracted Backlog

For our energy storage products and solutions contracts, contracted backlog includes signed customer orders or contracts under execution prior to when substantial completion is achieved. For service contracts, contracted backlog includes signed service agreements associated with our storage product projects that have not been completed and the associated service has not started. For digital applications contracts, contracted backlog includes signed agreements where the associated subscription has not started.

We cannot guarantee that our contracted backlog will result in actual revenue in the originally anticipated period or at all. Contracted backlog may not generate margins equal to our historical operating results. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our contracted backlog fails to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.

Contracted/Order Intake

Contracted, which we use interchangeably with “order intake”, represents new energy storage product and solutions contracts, new service contracts and new digital contracts signed during each period presented. We define “Contracted” as a firm and binding purchase order, letter of award, change order, or other signed contract (in each case an “Order”) from the customer that is received and accepted by Fluence. Our order intake is intended to convey the dollar amount and gigawatts (operating measure) contracted in the period presented. We believe that order intake provides useful information to investors and management because the order intake provides visibility into future revenue and enables evaluation of the effectiveness of the Company’s sales activity and the attractiveness of its offerings in the market.

Pipeline

Pipeline represents our uncontracted, potential revenue from energy storage products and solutions, service, and digital software contracts, which have a reasonable likelihood of contract execution within 24 months. Pipeline is an internal management metric that we construct from market information reported by our global sales force. Pipeline is monitored by management to understand the anticipated growth of our Company and our estimated future revenue related to customer contracts for our battery-based energy storage products and solutions, services and digital software.

We cannot guarantee that our pipeline will result in actual revenue in the originally anticipated period or at all. Pipeline may not generate margins equal to our historical operating results. Our customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. If our pipeline fails to result in revenue as anticipated or in a timely manner, we could experience a reduction in revenue, profitability, and liquidity.

Key Components of Our Results of Operations

The following discussion describes certain line items in our condensed consolidated statements of operations.

Total Revenue

We generate revenue from battery-based energy storage solutions contracts, service agreements with customers to provide operational services related to battery-based energy storage solutions, and digital application contracts. Fluence enters into contracts with utility companies, developers, and commercial and industrial customers.

We derive the majority of our revenue from selling battery-based energy storage solutions. Generally, we must design the project, as each energy storage solution is customized depending on a customer’s energy needs, procure the major equipment, obtain manufacturing slots from our contract manufacturers, coordinate the logistics, and assemble the solution prior to delivery and installation at our customer project sites. The Company recognizes revenue over time when we have enforceable right to payment for work performed to date and the solution, in its completed state, does not have an alternative use to the Company.

Our revenue from selling battery-based energy storage solutions is affected by volume fulfilled, which is dependent on customer schedules and demand, changes in price, which is primarily dependent on the cost of lithium-ion energy storage hardware, and mix of products and solutions purchased by our customers.

Cost of Goods and Services

Cost of goods and services consists primarily of product costs, including purchased materials and supplies, as well as costs related to shipping, customer support, product warranty, and personnel. Personnel costs in cost of goods and services includes both direct labor costs as well as costs attributable to any individuals whose activities relate to the transformation of raw materials or component parts into finished goods or the transportation of materials to the customer. Cost of goods and services are recognized when services are performed or when goods are included in our measure of progress as progress relevant costs, which is when they are restricted to a specific customer’s project.

Our product costs are affected by the underlying cost of raw materials, such as lithium-ion, and components to our solutions including inverters. Our product costs are also affected by technological innovation, economies of scale resulting in lower supply costs, and improvements in production processes and automation. We do not currently hedge against changes in the price of raw materials as we do not directly purchase raw materials; instead, we buy the components of energy storage products from our suppliers and we rely on our suppliers to hedge the underlying raw materials. We generally expect the ratio of cost of goods and services to revenue to decrease as sales volumes increase due to economies of scale, however, some of these costs, primarily personnel-related costs, are not directly affected by sales volume.

Gross Profit and Gross Profit Margin

Gross profit and gross profit margin may vary from quarter to quarter and are primarily affected by our volume fulfilled, product prices, product costs and project execution.

Operating Expenses

Operating expenses consist of research and development, sales and marketing and general and administrative expenses as well as depreciation and amortization. Personnel-related expenses are the most significant component of our operating expenses and include salaries, stock-based compensation, and employee benefits.

Research and Development Expenses

Research and development expenses consist primarily of personnel-related costs across our global research and development (“R&D”) centers for engineers engaged in the design and development and testing of our integrated products and technologies and costs of materials and services procured for research and development projects. Engineering competencies include data science, machine learning, software development, network and cyber security, battery systems engineering, industrial controls, UI / UX, mechanical design, power systems engineering, certification, and more. R&D expenses also support two current product testing labs located across the globe: a system-level testing facility in Pennsylvania that is used for quality assurance and the rapid iteration, testing, and launching of new Fluence energy storage technology and products and a testing facility located in Erlangen, Germany. We have an additional Hardware in the Loop testing facility, which is co-located with our technical team in Bangalore, India. We expect R&D expenses to generally increase in future periods to support our growth and as we continue to invest in R&D activities that are necessary to achieve our technology and product roadmap goals. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.

Sales and Marketing Expenses

Sales and marketing expenses consist primarily of personnel-related expenses, including salaries, stock-based compensation, and employee benefits. We have and intend to continue to expand our sales presence and marketing efforts to additional countries in the future.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related expenses, including salaries, stock-based compensation, and employee benefits, for our executives, finance, human resources, information technology, engineering and legal organizations that do not relate directly to the sales or research and development functions, as well as travel expenses, facilities costs, bad debt expense, and fees for professional services. Professional services consist of audit, legal, tax, insurance, information technology, and other costs.

Depreciation and Amortization

Depreciation consists of costs associated with property, plant, and equipment (“PP&E”) and amortization of intangibles consisting of patents, licenses, developed technology, and capitalized software over their expected period of use. We expect that as we increase both our revenues and the number of our personnel, we will invest in additional PP&E to support our growth resulting in additional depreciation and amortization.

Interest Expense (Income), net

Interest expense (income), net consists primarily of interest income net of interest expense. Interest income consists of interest earned on cash deposits and interest on customer notes receivables. Interest expense consists primarily of interest on borrowings against notes receivable pledged as collateral, interest from 2030 Convertible Senior Notes, unused line fees and commitment fees related to credit facilities, and amortization of debt issuance costs.

Other (Income) Expense, Net

Other (income) expense, net primarily consists of expense or income from foreign currency exchange gains and losses on monetary assets and liabilities, and income or expense due to estimated payments to be made to related parties under the Tax Receivable Agreement, dated October 27, 2021, by and among Fluence Energy, Inc., Fluence Energy, LLC, Siemens Industry, Inc., and AES Grid Stability, LLC (the “Tax Receivable Agreement”).

Income Tax Expense (Benefit)

We are subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income or loss of Fluence Energy, LLC and are taxed at the prevailing corporate tax rates. We are also subject to foreign income taxes with respect to our foreign subsidiaries and our expectations are that valuation allowances will be recorded in certain tax jurisdictions. In addition to tax expenses, we also will incur expenses related to our operations, as well as payments under the Tax Receivable Agreement, which we expect could be significant over time. We will receive a portion of any distributions made by Fluence Energy, LLC. Any cash received from such distributions from our subsidiaries will be first used by us to satisfy any tax liability and then to make payments required under the Tax Receivable Agreement.

Net Income (Loss)

Net income (loss) may vary from quarter to quarter and is primarily affected by our gross profit and operating expenses as defined above.

Results of Operations

Comparison of the three and six months ended March 31, 2026 and 2025

The following table sets forth our operating results for the periods indicated.

($in thousands)

NM - Not meaningful

Total Revenue

Total revenue increased by $33.3 million, or 8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in total revenue for the three months ended March 31, 2026 was mainly attributable to an increase in revenue from our battery-based energy storage products and solutions which was primarily driven by increased volumes of solutions projects fulfilled.

Total revenue increased by $321.7 million, or 52%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025. The increase in total revenue for the six months ended March 31, 2026 was mainly attributable to an increase in revenue from our battery-based energy storage products and solutions which was primarily driven by increased volumes of solutions projects fulfilled.

Cost of Goods and Services

Cost of goods and services increased by $29.2 million, or 8%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in cost of goods and services for the three months ended March 31, 2026 was mainly attributable to the increased volumes of solutions projects fulfilled as described above.

Cost of goods and services increased by $315.8 million, or 57%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025. The increase in cost of goods and services for the six months ended March 31, 2026 was mainly attributable to (i) the increased volumes of solutions projects fulfilled as described above, (ii) various cost increases incurred on certain solutions produced in the U.S., and (iii) negative effects of revisions of estimated total contract costs on certain projects due to delays and changes in scope.

Gross Profit and Gross Profit Margin

Gross profit increased by $4.0 million, or 10%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, while gross profit margin remained relatively flat. The increase in gross profit for the three months ended March 31, 2026 was primarily due to the increased volumes of solutions projects fulfilled described above in “Revenue.”

Gross profit increased by $5.9 million, or 9%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025, while gross profit margin decreased. The increase in gross profit for the six months ended March 31, 2026 was primarily due to the increased volumes of solutions projects fulfilled described above in “Revenue.” The decrease in gross profit margin for the six months ended March 31, 2026 was primarily due to the various cost increases incurred on certain solutions produced in the U.S. and negative effects of revisions of estimated total contract costs on certain projects due to delays and changes in scope described above in “Cost of Goods and Services.”

Research and Development Expenses

Research and development expenses were relatively flat for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Research and development expenses were relatively flat for the six months ended March 31, 2026, compared to the six months ended March 31, 2025.

Sales and Marketing Expenses

Sales and marketing expenses increased by $2.1 million, or 10%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in sales and marketing expenses for the three months ended March 31, 2026 was primarily attributable to a $3.6 million increase in salaries and personnel-related expenses due to an increase in accrued annual cash bonus expenses, offset by a $0.6 million decrease in costs of sales and marketing-related consulting services.

Sales and marketing expenses increased by $5.9 million, or 15%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025. The increase in sales and marketing expenses for the six months ended March 31, 2026 was primarily attributable to a $5.8 million increase in salaries and personnel-related expenses due to an increase in accrued annual cash bonus expenses.

General and Administrative Expenses

General and administrative expenses decreased by $4.2 million, or 10%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease in general and administrative expenses was primarily attributable to (i) a $2.5 million decrease in IT consulting costs primarily related to software development and (ii) a $2.1 million decrease in severance costs recognized.

General and administrative expenses were relatively flat for the six months ended March 31, 2026, compared to the six months ended March 31, 2025.

Depreciation and Amortization

Depreciation and amortization increased by $1.3 million, or 45%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily attributable to an increase in amortization of capitalized software.

Depreciation and amortization increased by $2.3 million, or 39%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025, primarily attributable to an increase in amortization of capitalized software.

Interest Expense (Income), Net

Interest expense, net increased by $2.4 million, or 606% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily attributable to a $2.1 million decrease in interest income on cash deposits and investments.

Interest expense (income), net increased by $4.5 million for the six months ended March 31, 2026, compared to the six months ended March 31, 2025, primarily attributable to (i) a $2.1 million increase in interest expense recognized for the 2030 Convertible Senior Notes and (ii) a $1.8 million decrease in interest income on cash deposits and investments.

Other (Income) Expense, Net

Other income, net increased by $12.7 million, or 823%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily attributable to (i) a $7.2 million net increase in favorable foreign currency exchange gains on monetary assets and liabilities period over period and (ii) a $5.5 million increase in net gains on derivative instruments not designated as hedges during the period.

Other (income) expense, net increased by $12.5 million for the six months ended March 31, 2026, compared to the six months ended March 31, 2025, primarily attributable to a $14.9 million net increase in favorable foreign currency exchange gains on monetary assets and liabilities period over period.

Income Tax Expense (Benefit)

Income tax expense (benefit) increased by $3.5 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in income tax expense for the three months ended March 31, 2026 was primarily attributable to an increase in pre-tax income in foreign tax jurisdictions without historical losses.

Income tax benefit increased by $2.6 million, or 71%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025. The increase in income tax benefit for the six months ended March 31, 2026 was primarily attributable to a decrease in valuation allowances.

Net Loss

Net loss decreased by $12.7 million, or 30%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease in net loss for the three months ended March 31, 2026 was primarily attributable to an increase in “Other (income) expense, net” and a decrease in “General and administrative expenses” partially offset by an increase in “Sales and marketing expenses” and “Interest expense,net” as described above.

Net loss decreased by $7.1 million, or 7%, for the six months ended March 31, 2026, compared to the six months ended March 31, 2025. The decrease in net loss for the six months ended March 31, 2026 was primarily attributable to an increase in “Other (income) expense, net,” partially offset by an increase in “Sales and marketing expenses” as described above.

Non-GAAP Financial Measures

This section contains references to certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Profit Margin, and Free Cash Flow.

Adjusted EBITDA is calculated from the condensed consolidated statements of operations using net income (loss) adjusted for (i) interest expense (income), net, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, and (v) other non-recurring income or expenses. Adjusted EBITDA also includes amounts impacting net income related to estimated payments due to related parties pursuant to the Tax Receivable Agreement.

Adjusted Gross Profit is calculated from the condensed consolidated statements of operations using gross profit, adjusted to exclude (i) stock-based compensation expenses, (ii) depreciation and amortization, and (iii) other non-recurring income or expenses. Adjusted Gross Profit Margin is calculated using Adjusted Gross Profit divided by total revenue.

Free Cash Flow is calculated from the condensed consolidated statements of cash flows and is defined as net cash provided by (used in) operating activities, adjusted to exclude purchases made under supply chain financing arrangements, less purchase of property and equipment made in the period. We expect our Free Cash Flow to fluctuate in future periods as we invest in our business to support our plans for growth.

These non-GAAP measures are intended as supplemental measures of performance and/or liquidity that are neither required by, nor presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). We believe that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis, or capital structure.

These non-GAAP measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP and may not be comparable to similar measures presented by other entities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP. These non-GAAP measures and their reconciliation to GAAP financial measures are shown below. With respect to Free Cash Flow, limitations on its use include (i) it should not be inferred that the entire Free Cash Flow amount is available for discretionary expenditures (for example, cash is still required to satisfy other working capital needs, including short-term investment policy, restricted cash, and intangible assets); (ii) Free Cash Flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities; and (iii) this metric does not reflect our future contractual commitments.

The following tables present our non-GAAP measures for the periods indicated.

($in thousands)

(a) Amount for the three months ended March 31, 2026 includes approximately $0.3 million for legal and consulting fees related to potential strategic transactions and $0.5 million of impairment expense related to an equity method investment. Amount for three months ended March 31, 2025 includes $3.1 million in severance costs related to restructuring. Amounts for six months ended March 31, 2026 includes approximately $3.3 million for legal and consulting fees related to potential strategic transactions and $0.5 million of impairment expense related to an equity method investment. Amount for the six months ended March 31, 2025 includes $3.1 million in severance costs related to restructuring.

($in thousands)

($in thousands)

Liquidity and Capital Resources

Since inception and through March 31, 2026, our principal sources of liquidity have been the proceeds from our initial public offering (“IPO”), our cash and cash equivalents from operations, short-term borrowings, borrowings available under our debt agreements, proceeds from the issuance of the 2030 Convertible Senior Notes (as defined below), supply chain financing, capital contributions from AES Grid Stability, LLC (“AES Grid Stability”) and Siemens Industry, Inc. (“Siemens Industry”), proceeds from the investment by QIA Florence Holdings, LLC, an affiliate of Qatar Holding LLC in 2021, and proceeds from sale of accounts receivable.

We believe our existing cash and cash equivalents, which includes cash flows from operations, and proceeds from the issuance of the 2030 Convertible Senior Notes, in addition to our supply chain financing arrangements, and availability under our Revolver (as defined below) will be sufficient to meet our expense and capital requirements for at least the next 12 months following the filing of this Report.

Our capital requirements, and ability to generate cash flow, have been and may in the future vary materially from those planned and will depend on many factors, including our rate of revenue growth, the timing and extent of our growth initiatives, our introduction of new products, services, and digital application offerings and related costs and expenses, and overall regulatory and macroeconomic conditions, including, among others, factors relating to inflation, interest rate environment, impacts of tariffs and trade restrictions, labor shortages, supply chain disruptions, changing consumer behavior, increased competition, and pandemics. To the extent that current or anticipated future sources of liquidity are insufficient to fund our future business activities and cash requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilutions to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations, and financial condition.

2030 Convertible Senior Notes

In December 2024, the Company issued $400.0 million aggregate principal amount of 2.25% convertible senior notes due 2030 (the “2030 Convertible Senior Notes”). The 2030 Convertible Senior Notes were issued pursuant to, and are governed by, an indenture, dated as of December 12, 2024, between the Company and UMB Bank, National Association, as trustee (the “Indenture”). In connection with the 2030 Convertible Senior Notes, the Company purchased capped calls with certain financial institutions pursuant to capped call confirmations (collectively the “Capped Calls”). For discussion of the 2030 Convertible Senior Notes and the Capped Calls, refer to “Note 12- Convertible Senior Notes, Net” to our condensed consolidated financial statements included elsewhere in this Report and incorporated herein.

Supply Chain Financing

We provide certain of our suppliers with access to two different supply chain financing programs through two different third-party financing institutions. For greater discussion of the Company’s supply chain financing programs, refer to “Note 17- Supply Chain Financing” to our condensed consolidated financial statements included elsewhere in this Report and incorporated herein.

Shelf Registration Statement

On August 11, 2023, we filed an automatic shelf registration statement on Form S-3 with the SEC (the “Form S-3”) which became effective upon filing and will remain effective through August 11, 2026, subject to our continued eligibility to use such form. The Form S-3 allows us to offer and sell from time-to-time Class A common stock, preferred stock, depository shares, debt securities, warrants, purchase contracts or units comprised of any combination of these securities for our own account and allows certain selling stockholders to offer and sell 117,666,665 shares of Class A common stock in one or more offerings.

The Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions, and our future capital needs. The terms of any future offering under the Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.

Revolving Credit Facility

On August 6, 2024, Fluence Energy, Inc. entered into Amendment Number Three to the existing asset-based syndicated credit agreement by and among Fluence Energy, LLC, as parent borrower, the Company, as parent, the other borrowers party thereto, the other guarantors party thereto, the lenders party thereto, and Citibank, N.A., as administrative agent (as successor to Barclays Bank PLC) (such agreement, as so amended, the “2024 Credit Agreement”) converting the outstanding asset-based lending facility into a senior secured cash flow revolving credit facility in an initial aggregate principal amount of up to $500.0 million (the “Revolver”). On March 31, 2026, we entered into Amendment Number Four (“Amendment No. 4”) to the 2024 Credit Agreement (such agreement, as so amended by Amendment No. 4, the “Credit Agreement”), which, among other things, (i) extends the “Trigger Date” under the Credit Agreement from December 31, 2025 to December 31, 2026, (ii) extends the minimum liquidity covenant of $150.0 million through December 31, 2026, and (iii) moves the initial test date of the consolidated leverage ratio covenant from January 1, 2026 to January 1, 2027. Following the entry into Amendment No. 4, the Credit Agreement now requires the borrowers to post $50.0 million in cash collateral if the Total Revolving Extensions of Credit exceed $450.0 million. Capitalized terms used in this subsection that are not otherwise defined are defined in the Credit Agreement.

The Revolver is secured by (i) a first priority pledge of the Company’s equity interests in Fluence Energy, LLC and Fluence Energy Global Production Operation, LLC, (ii) first priority security interests in substantially all tangible and intangible personal property of the Company, Fluence Energy, LLC, Fluence Energy Global Production Operation, LLC and certain of its foreign subsidiaries, in each case, subject to customary exceptions and limitations, and (iii) a pledge of the Company’s equity interests in certain of its foreign subsidiaries and security interests in certain assets of such foreign subsidiaries. For greater discussion of the Company’s Revolver and Credit Agreement, as may be amended from time to time, refer to “Note 11 - Debt” to our condensed consolidated financial statements included elsewhere in this Report and incorporated herein.

Master Receivables Purchase Agreement

On February 27, 2024, Fluence Energy, LLC entered into the Master Receivables Purchase Agreement, by and among Fluence Energy, LLC and any other seller from time to time party thereto, as sellers and servicers, and Credit Agricole Corporate and Investment Bank (“CACIB”), as purchaser, of certain receivables on an uncommitted basis (the “MRPA”). The MRPA provides that the outstanding amount of all purchased receivables under the MRPA will not exceed $75.0 million, with sublimits for each account debtor and for certain kinds of receivables. The MRPA contains other customary representations and warranties and covenants.

Master Drafts Sale Agreement

On October 7, 2025, Fluence Energy, LLC entered into a Master Drafts Sale Agreement (“MDSA”), by and among Fluence Energy, LLC as seller and CACIB as purchaser. Pursuant to the MDSA, Fluence Energy, LLC may sell negotiable drafts or bills or exchange (the “Drafts”) identified in Purchase Requests to CACIB, and CACIB may agree to purchase the Drafts on an uncommitted basis. Each Draft represents unconditional payments owed to Fluence Energy, LLC by its customers.

Credit Support and Reimbursement Agreement

We are party to an Amended and Restated Credit Support and Reimbursement Agreement, dated June 9, 2021, with The AES Corporation (“AES”) and Siemens Industry (the “Credit Support and Reimbursement Agreement”) whereby they may, from time to time, agree to furnish credit support to us in the form of direct issuances of credit support to our lenders or other beneficiaries or through their lenders’ provision of letters of credit to backstop our own facilities or obligations. Currently, the Company has outstanding performance guarantees issued pursuant to the terms of the Credit Support and Reimbursement Agreement by AES and Siemens Industry and their respective affiliates that guarantee Fluence’s performance obligations with certain Fluence customers. Guarantees are also issued by AES and Siemens Corporation, pursuant to the terms of the Credit Support and Reimbursement Agreement, in connection with a supplier chain financing program (as described in greater detail above).

Commitments, Contingencies, and Off-Balance Sheet Arrangements

As of March 31, 2026, the Company had outstanding bank guarantees, parent guarantees, letters of credit, and surety bonds issued as performance security arrangements for a large number of customer projects. In addition, we have a limited number of parent company guarantees and letters of credit issued as payment security to certain vendors. The Company also has certain battery purchase obligations and spending requirements under our master supply agreement with suppliers. We are also party to both assurance and service-type warranties for various lengths of time. Refer to “Note 14 - Commitments and Contingencies” in our unaudited condensed consolidated financial statements included elsewhere in this Report for more information regarding our contingent obligations, including off-balance sheet arrangements, and legal contingencies.

Historical Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the periods presented.

($in thousands)

Net cash flows used in operating activities were $347.9 million for the six months ended March 31, 2026, compared to net cash used in operating activities of $257.4 million for the six months ended March 31, 2025. The $90.5 million increase in net cash used in operating activities period over period was primarily due to net changes in working capital related balances of $99.8 million, partially offset by a decrease in net loss of $7.1 million. Below we describe in more detail the cash flows used in operating activities for each period:

• Net cash flows used in operating activities of $347.9 million for the six months ended March 31, 2026 were primarily due to (i) net loss of $91.8 million, (ii) increases in inventory of $299.6 million due to cash expenditures on inventory, (iii) decreases in accounts payable of $127.9 million due to the timing of purchases and payments and to various vendors, and (iv) increases in advances to suppliers of $80.5 million. These cash outflows were partially offset by positive net effects of changes in customer contract related assets and liabilities. Specifically, deferred revenue, inclusive of related parties, increased in aggregate by $151.9 million and receivables, inclusive of trade, unbilled accounts receivable and receivables from related parties, decreased in aggregate by $112.5 million due to timing of various customer project billings and cash collections in accordance with contract milestone payment schedules.
• Net cash flows used in operating activities of $257.4 million for the six months ended March 31, 2025 were primarily due to (i) net loss of $98.9 million, (ii) increases in inventory of $520.2 million due to cash expenditures on inventory, and (iii) decreases in accounts payable of $202.9 million due to the timing of purchases and payments to various vendors. These cash outflows were partially offset by positive net effects of changes in customer contract related assets and liabilities. Specifically, deferred revenue, inclusive of related parties, increased in aggregate by $379.7 million and receivables, inclusive of trade, unbilled accounts receivable and receivables from related parties, decreased in aggregate by $247.1 million due to timing of various customer project billings and cash collections in accordance with contract milestone payment schedules.

Net cash flows used in investing activities were $16.1 million for the six months ended March 31, 2026, which were due to purchases of property and equipment of $8.3 million and capital expenditures on software and other of $7.8 million.

Net cash flows used in investing activities were $12.8 million for the six months ended March 31, 2025, which were due to purchases of property and equipment of $6.5 million and capital expenditures on software and other of $6.3 million.

Net cash flows provided by financing activities were $66.6 million for the six months ended March 31, 2026, which were primarily due to $70.8 million of purchases under the supply chain financing arrangements, partially offset by $2.7 million related to Class A common stock withheld related to settlement of employee taxes for stock-based compensation awards.

Net cash flows provided by financing activities were approximately $359.1 million for the six months ended March 31, 2025, which were primarily due to the proceeds received from the issuance of the 2030 Convertible Senior Notes of $400.0 million, partially offset by (i) premiums paid for the purchases of the Capped Calls of $29.0 million and (ii) payments for the debt issuance costs of $11.6 million primarily related to the 2030 Convertible Senior Notes.

Tax Receivable Agreement

In connection with the IPO, we entered into the Tax Receivable Agreement with Fluence Energy, LLC and Siemens Industry and AES Grid Stability (together, the “Founders”). Under the Tax Receivable Agreement, we are required to make cash payments to the Founders equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (1) the increases in our share of the tax basis of assets of Fluence Energy, LLC and its subsidiaries resulting from any redemptions or exchanges of LLC Interests from the Founders and certain distributions (or deemed distributions) by Fluence Energy, LLC; and (2) certain other tax benefits arising from payments under the Tax Receivable Agreement. The payment obligation under the Tax Receivable Agreement is an obligation of Fluence Energy, Inc. and not of Fluence Energy, LLC. We expect to use distributions from Fluence Energy, LLC to fund any payments that we will be required to make under the Tax Receivable Agreement. To the extent we are unable to make timely payments under the Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement resulting in the acceleration of payments due under the Tax Receivable Agreement. Fluence Energy, Inc. expects to benefit from the remaining 15% of cash tax benefits, if any, it realizes from such tax benefits. For purposes of the Tax Receivable Agreement, the cash tax benefits will be computed by comparing the actual income tax liability of Fluence Energy, Inc. to the amount of such taxes that Fluence Energy, Inc. would have been required to pay had there been no such tax basis adjustments of the assets of Fluence Energy, LLC or its subsidiaries as a result of redemptions or exchanges and had Fluence Energy, Inc. not entered into the Tax Receivable Agreement.

On June 30, 2022, Siemens Industry exercised its redemption right pursuant to the terms of the Third Amended and Restated Limited Liability Agreement of Fluence Energy, LLC, dated October 27, 2021, as may be amended from time to time (the “LLC Agreement”) with respect to its entire holding of 58,586,695 LLC Interests of Fluence Energy, LLC, together with the corresponding cancellation of an equivalent number of shares of our Class B-1 common stock, par value $0.00001 per share (“Class B-1 common stock”). On December 8, 2023, AES Grid Stability exercised its redemption right pursuant to the terms of the LLC Agreement with respect to 7,087,500 LLC Interests of Fluence Energy, LLC, together with the corresponding cancellation of an equivalent number of shares of our Class B-1 common stock.

The redemptions resulted in increases in the tax basis of the assets of Fluence Energy, LLC and certain of its subsidiaries. The increases in tax basis and tax basis adjustments increases (for tax purposes) the depreciation and amortization deductions available to Fluence Energy, Inc. and, therefore, may reduce the amount of U.S. federal, state, and local tax that Fluence Energy, Inc. would otherwise be required to pay in the future, although the Internal Revenue Service may challenge all or part of the validity of that tax basis, and a court could sustain such a challenge.

As a result of the tax basis adjustment of the assets of Fluence Energy, LLC and its subsidiaries upon the redemptions and our possible utilization of certain tax attributes, the payments that we may make under the Tax Receivable Agreement will be substantial. The redemptions will result in future tax savings of $137.6 million. The Founders will be entitled to receive payments under the Tax Receivable Agreement equaling 85% of such amount, or $117 million; assuming, among other factors, (i) we will have sufficient taxable income to fully utilize the tax benefits; (ii) Fluence Energy, LLC is able to fully depreciate or amortize its assets; and (iii) there are no material changes in applicable tax law. The payments under the Tax Receivable Agreement are not conditioned upon continued ownership of us by the Founders. Although the timing and extent of future payments could vary significantly under the Tax Receivable

Agreement, we anticipate funding payments from the Tax Receivable Agreement from cash flow from operations of our subsidiaries, available cash or available borrowings under any future debt agreements.

With the exception of an estimated $0.3 million of Tax Receivable Agreement payment realized as of June 30, 2025, we have determined it is not probable payments under the Tax Receivable Agreement would be made, given the projected inability to fully utilize the related tax benefits over the term of the agreement. Therefore, the Company has not recognized the remaining liability. Should we determine that the additional Tax Receivable Agreement payment is probable, a corresponding liability will be recorded and as a result, our future results of operations and earnings could be impacted as a result of these matters.

Critical Accounting Policies and Use of Estimates

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In the preparation of these financial statements, we consider an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the consolidated financial statements.

During the six months ended March 31, 2026, there were no significant changes in application of our critical accounting policies or estimation procedures from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Use of Estimates” in our 2025 Annual Report and the notes to the audited consolidated financial statements appearing elsewhere in the 2025 Annual Report.

There have been no material changes with respect to our exposure to market risk as disclosed in Part II, Item 7A., “Quantitative and Qualitative Disclosures About Market Risk” of our 2025 Annual Report.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026, the end of the period covered by this Report. Based upon that evaluation, management concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to the risk factors previously disclosed in our 2025 Annual Report. You should carefully consider the risks described in Part I, Item 1A. “Risk Factors” of our 2025 Annual Report along with our unaudited condensed consolidated financial statements and the related notes, as well as our other public filings with the SEC, before making an investment decision. Our business, financial condition, and results of operations could be materially and adversely affected by any of these risks or uncertainties.