Bloom Energy Corp (BE)

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Overview

Description of Bloom Energy

Our mission is to make clean, reliable energy affordable for everyone in the world. We developed the first large-scale, commercially viable solid oxide fuel cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy.

Our technology, invented and manufactured in the U.S., is one of the most advanced electricity and hydrogen producing technologies on the market today. Our fuel-flexible Bloom Energy Server systems can use biogas, hydrogen, natural gas, or a blend of fuels to create resilient, reliable and sustainable power at typically significantly higher efficiencies than traditional, combustion-based resources. In addition, the same fuel cell based platform that powers our Energy Server systems can be used to create hydrogen with our Bloom Electrolyzer. Hydrogen is increasingly recognized as a critically important tool for the decarbonization of the energy economy. Our enterprise customers include some of the largest multinational corporations in the world. We also have relationships with some of the largest utility companies in the U.S. and the Republic of Korea, with a growing presence in various international markets in Europe and Asia.

At Bloom Energy, we look forward to a net-zero future. Our technology is designed to help enable this future by delivering reliable, low-carbon electricity in a world facing unacceptable levels of power disruptions. Our resilient solid oxide fuel cell platform has kept electricity available for our customers through hurricanes, earthquakes, typhoons, forest fires, extreme heat and grid failures. Unlike traditional combustion power generation, our platform is community-friendly — emitting no noise, installed on movable skids and designed to significantly reduce emissions of criteria air pollutants. Our Energy Server systems provide electricity using natural gas, biofuels or hydrogen as feedstock and have applications that can provide both heat and power as well as enable carbon capture. We provide energy solutions that help organizations obtain reliable, resilient, lower emissions power today, thereby supporting net-zero objectives.

We market and sell our Energy Server systems primarily through our direct sales organization in the U.S. and in certain international markets. We also work with utilities to offer our energy solutions to their end customers, which can be either in front of the meter or on-site. Recognizing that deploying our solutions requires significant financial commitment, we have developed a number of financing options to support sales of our Energy Server systems to customers who may prefer to finance the acquisition using third-party financing and ownership.

Our typical target commercial or industrial customer has historically been either an investment-grade entity or a customer with investment-grade attributes such as size, assets and revenue, liquidity, geographically diverse operations and general financial stability. Given that our customers are typically large institutions with multi-level decision-making processes, we generally experience a lengthy sales process. Once the sale is completed, we are able to deploy our Energy Server systems in a matter of months, subject to permitting requirements. We have a large multi-disciplinary team to facilitate the deployment of our projects in a wide variety of locations under a myriad of regulatory environments.

We continue to innovate our solid oxide platform to offer energy solutions to our customers. In February 2024, we announced our Be FlexibleTM offering which introduced load following capabilities on our Bloom Energy Server system to enable customers and utilities to meet variable electricity load and demand. We believe that our Be Flexible offering is critical for data centers, as their power needs typically vary widely throughout the day. Our products are also designed to work with existing carbon capture utilization and storage (“CCUS”) and combined heat and power (“CHP”) technologies offered by third parties. CCUS can mitigate emissions from natural gas as an Energy Server system generates a relatively pure stream of CO2 that can be used or sequestered. In our experience, CCUS is an important capability for customers who need reliable power beyond what can be provided by renewable sources, while also reducing their greenhouse gas emissions. CHP allows the exhaust heat generated by an Energy Server system to be channeled and made available for use, including for heating and cooling, further increasing the efficiency of the system. This capability is important to data centers and other large power users seeking to repurpose generated heat to improve efficiency.

Energy Market Conditions

The global energy transition towards a net-zero environment has created new challenges and opportunities for utilities, suppliers of energy solutions, and customers. Shifts and uncertainty in market and regulatory dynamics and corporate and governmental policies are currently impacting the selling process and impacting sales cycles and timelines for our products. Increasing electricity rates, decreasing energy security and reliability, and delays in the development of transmission infrastructure and grid interconnection as well as other time-to-power challenges have led to increased customer interest in our

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power solutions. At the same time, ongoing natural gas supply and pricing concerns due to geopolitical stresses, as well as customers’ interest in meeting sustainability targets, have led to increased caution from potential customers in their buying decision for energy solutions. Increasing demand for power has forced utilities, states and countries to revisit less clean sources of baseload and intermediate power, which our technology is designed to replace. This supply and demand mismatch globally has threatened energy security, reliability, and availability.

Bloom enables customers to address these energy market challenges by offering fuel flexible solutions that are designed to provide cost predictable, resilient, and reliable energy in a timely fashion. As customers and utilities navigate the energy transition and evolving landscape, the ability of our power solutions to fit their economic, regulatory, and policy needs depends on a number of factors, including natural gas availability and pricing, electrical interconnection needs and availability, redundant back up power requirements, cost requirements, and sustainability profiles. These factors may impact a customer’s buying decision for an alternative power solution such as ours, even in those situations where the time to power from a utility is measured in years because the total cost to interconnect, including the cost to build out energy transmission infrastructure, is unknown before all interconnection studies are completed.

Policy changes commencing in 2025 may also affect customers’ demand for power solutions. Changes in permitting rules could boost domestic fossil fuel production and infrastructure, while proposals to limit environmental reviews under the National Environmental Policy Act and other statutes could incentivize investment in, and lower the cost of, fossil fuels, including natural gas. At the same time, proposals to halt new permits for wind projects, particularly offshore wind, could slow renewable energy adoption and the projected available supply of renewable energy. Bloom stands ready to meet these new opportunities with our low-emission Energy Server systems.

Many data center customers and other large power users have signed exclusivity arrangements with their utilities, and this often creates a more complicated dynamic for them to move to an on-site solution. The rising cost of natural gas in some locations, increases in gas distribution rates, limited availability of natural gas supply, as well as disruptions to the world’s gas markets, has increased the cost of our power solutions for customers and, in certain cases where there is a lack of fuel supply, a complete inability to operate the systems. In the U.S., the lack or slow development of pipeline infrastructure in the past has impacted the timing of customers being able to take advantage of our power solution opportunities. In certain jurisdictions in the U.S. and Europe, natural gas bans have prevented the use of our power solutions unless alternative fuels are available.

In addition, many of our potential data center and industrial customers are pursuing greenfield opportunities where the development cycle is long and laden with permitting requirements, and the uncertainty of these factors is leading to a more complex customer decision-making process and longer sales cycles. Data center greenfield projects require significant investments in real estate, facility costs, and technology, among other elements, in addition to the investment in our power solutions, and the timing and sequencing of those investments is largely outside of our control.

Key Macro Trends

Increases in Demand for Power, Driven by Data Centers and Artificial Intelligence (AI)

Demand for power has continued to significantly outpace the available power generation supply from the grid, with the need for power becoming more acute in 2024. Key factors driving the increasing demand include the transition towards the electrification of transportation and buildings, the rapid adoption of AI that has led to the expansion of existing data centers and plans for new greenfield data centers, and Federal incentives for domestic manufacturing, including semiconductor and battery production. These factors along with economic growth have put significant stress on the supply from the grid and has led companies to consider on-site distributed power, including Bloom Energy Server systems, to meet their power needs.

Time to Power Increases as Power Demand/Supply Mismatch Grows

In part because of the increases in demand for power, the importance of time to power has increased. According to a study published in April 2024 by the Lawrence Berkeley National Laboratory, the time from initiating a request for interconnection to the grid to the start of commercial operations has more than doubled from less than two years during the period from 2000-2007, to more than four years from 2018-2023. Bloom Energy Server systems can be configured as on-site fully-islanded, microgrid solutions that are not interconnected to the grid, which often can provide a customer power in months instead of years. Many utilities have informed data center and manufacturing customers that they cannot interconnect for a period of years because the utility has no power available to serve a customer’s needs, thus making the Bloom Energy Server system an attractive alternative. In addition, our fully-islanded microgrid solutions can provide power on-site, without the need for costly transmission and distribution system upgrades that often are required before a customer can interconnect to the electrical grid. We are seeing greater interest in fully-islanded, microgrid solutions among data center customers because of these interconnection-related delays. If a customer desires back up power or a “grid parallel” solution in combination with the

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Bloom Energy Server system, required interconnection studies and lengthy interconnection queues may remain, eroding the time to power value proposition.

Co-locating Large Loads with Distributed Generation Configured as Islanded Microgrids are Gaining in Traction as Energy Solutions to Bypass Long Interconnection Queues and Transmission Upgrades

Our islanded microgrid solution allow data center and other customers the ability to skip the interconnection queue and start construction. A key to this solution is that our Be FlexibleTM load following capability allows us to follow a customer’s variable loads without the need to import power from the transmission grid. We believe avoiding lengthy interconnection queues is key to unlocking time to power for our customers. Our islanded microgrid solution also creates ratepayer savings by reducing congestion charges resulting from constraints on the transmission grid and avoiding the need for network transmission investments and upgrades that may be allocated to all ratepayers. In addition to our distributed generation microgrid solution serving a single customer, utility companies can employ it to serve as an energy transmission asset, helping utility companies to serve their customers while avoiding the costs of new transmission and distribution infrastructure.

Utilities are Turning to Distributed Energy Solutions to Decrease their Customers’ Time to Power

Our utility customers are recognizing the challenge of keeping pace with the growing demand for power. Aging infrastructure, coupled with transmission and distribution bottlenecks, are making it more difficult for utilities to integrate additional sources of energy to add capacity. Building new transmission and distribution infrastructure is expensive, takes many years, and would likely cause utility rates to increase. As demand for power continues to grow, utility companies are struggling to meet the soaring demand of data centers, while customers’ time to power becomes increasingly important. Utility companies are exploring alternative means of producing and supplying energy to their end customers, including our Energy Server systems. We entered into multiple agreements with utilities in 2024, including a landmark 1 GW supply agreement with a customer that included a 100 MW order in 2024. We expect more utility customers in the future to supplement their power generation with the Bloom Energy Server system. As we work to reduce our product costs, and with utility rates expected to increase with new significant infrastructure investments projected to be needed over the next five years to meet rapid demand growth, we expect our energy solutions to become more cost competitive in more countries, communities, and industries around the world.

Fuel Flexible Solutions Address Reliability Concerns as well as Near- and Long-term Sustainability Considerations

The impacts of climate change, including more severe and unpredictable weather events, have placed further strain on aging utility grids and led to periods of power outages for those reliant on the grid. In addition, the recognition of the threat of climate change has led companies and governments to set ambitious emissions goals to reduce the release of carbon dioxide to the atmosphere. Large increases in demand for power are expected to challenge prevailing carbon reduction trajectories when large power users turn to conventional solutions to meet their needs. The Energy Server system is able to provide highly available power to displace dirtier and less efficient conventional combustion solutions like turbines and engines. Deeper decarbonization potential is enabled through fuel flexibility, CHP offerings and CCUS capability. In addition to natural gas, our non-combustion power solutions are designed to run on biofuels or hydrogen, emit near-zero criteria pollutants, and use no water during steady state operation.

Other Factors Affecting our Performance

Delayed Project

In the fourth quarter of 2022, we entered into a Power Purchase Agreement (the “Project PPA”) for the sale of electricity to a customer for three greenfield sites that were at various stages of development (the “Project”). The first site was expected to be operational with power by the third quarter of 2024. We sold 73 megawatts of the Energy Server systems to a distributor with the expectation that the distributor would support installation on the Project and install the Energy Server systems at the three Project sites. For site specific reasons, in the first quarter of 2024, the end customer decided not to deploy the Energy Server systems at the originally selected sites (the “Project Servers”) and commenced exploring alternative sites for deployment of the Energy Server systems. In the interim, the end customer commenced payments under the Project PPA and agreed to continue such payments for the earlier of the full term of the Project PPA or deployment of the Energy Server systems. During the fourth quarter of 2024, the end customer identified an alternative location to deploy the Project Servers (the “Alternative Project”) that is expected to be operational in 2027. Bloom and the end customer have agreed that the payments under the Project PPA will be suspended unless the end customer terminates the Alternative Project prior to it becoming operational in 2027, at which point, all suspended payments will be due and payable to us.

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Shifting Regulatory Environment

In the U.S., the Investment Tax Credit (“ITC”) for fuel cells running on a non-zero carbon fuel expired at the end of fiscal year 2024. Although the Company and its customers utilized compliant safe harbor mechanisms to secure deployment of a certain dollar amount of Energy Server systems through 2028, since the ITC was not extended for fuel cells running on a non-zero carbon fuel, U.S. bookings, revenue and gross margins could be materially impacted in 2025 and beyond. Also, it is possible that the expiration of the ITC increased demand for ITC-compliant sales of our solutions in 2024 due to customer desire to secure ITC for their projects through safe harboring.

The Inflation Reduction Act of 2022 (“IRA”) established a new clean electricity production credit and a clean electricity investment credit. Although the U.S. Treasury Department developed rules to implement credits and incentives for clean energy resources under President Biden’s administration, there is considerable uncertainty around whether, or the conditions under which such credits will be available for transactions involving our solutions in the future. In addition, delays in adoption of Renewable Fuel Standard regulations in the U.S. for the use of biogas to generate electricity for electric vehicles, along with minimal governmental focus on utilization of biogas outside of use by methane-fueled vehicles, have created uncertainty in prospects for broader biogas availability for industrial uses, including our power solutions. Furthermore, in most jurisdictions, air permits and various land use permits are required for installation of our solutions over a certain amount of megawatts, and generally the length of time to obtain these permits increased, while the level of certainty of issuance has decreased and if issued, the cost of compliance requirements can be cost prohibitive. We have experienced a reluctance in certain states to issue permits for gas generation equipment. Even if issued, states may require a blend of costly renewable fuels or other measures to advance climate goals.

In Ireland, which is a large data center market, a directive from the Minister of the Department of the Environment, Climate and Communications under the former administration to restrict grid connections to data centers and other large power users, along with a halt in high-pressure gas installations has delayed our selling activities. In 2023, the South Korean government moved to a new, government-run bidding process for fuel cell purchases, which has adversely impacted and may continue to impact demand for our power solutions.

Working with Utilities

The imbalance between power demand and supply has contributed to utilities seeking alternative sources of power to supply to their end customers. Utilities have been unable to meet this demand through the deployment of renewable sources of energy such as solar and wind power. Bloom Energy Server systems can be installed at the utility’s point of distribution or directly on the customer’s site. The energy produced by our systems can be utilized by utilities to provide power to a specific customer or customers or may be used by customers generally. As demand for power continues to grow, and time to power becomes increasingly important, utilities are exploring alternative means of producing and supplying energy to their end customers, including our Energy Server systems. We entered into multiple agreements with utilities in 2024, including a landmark 1 GW supply agreement with a customer that included a 100 MW order in 2024. We expect more utility customers in the future to supplement their power generation with the Bloom Energy Server system. Increasing the supply of available power can allow utilities to encourage end customers to remain in their current locations rather than relocating to areas where power is more available. In addition, co-locating our Energy Server systems on-site with large loads, can enable a utility to provide power to a large energy user without impacting its rate base and providing the onsite power as an islanded microgrid can avoid interconnection studies and wait times.

Hydrogen Market Developments

The interest, investment, and stimulation of clean hydrogen in the U.S., Europe and in many other regions across the globe have not yet had significant impacts on the supply of hydrogen. To date, while the number of proposed hydrogen production projects has grown rapidly, only a small fraction has reached the final investment decision stage, and an even smaller fraction has been deployed. In addition, the infrastructure needed to transport hydrogen, whether through pipelines or maritime or land-based tankers, is currently only sufficient for existing uses, and has not begun to be significantly extended for anticipated future uses, with hydrogen blending and other approaches remaining at pilot stages. It remains unclear whether regulators in some jurisdictions will allow hydrogen to be introduced into gas distribution systems, which could limit our customers’ ability to transport hydrogen from the point of production to the point of consumption. Additionally, while U.S. Treasury Department rules regarding the use of market-based renewable energy have been clarified, hurdles remain that could make it more difficult for hydrogen projects to scale significantly, and uncertainty exists as potential changes may be sought by the new U.S. federal administration and U.S. Congress.

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Lengthening Sales Cycles

Many of the factors discussed above have lengthened the selling cycles for our products and we have experienced delays in our anticipated bookings as a result. Our revenue, margins, and cash flow in any given year are dependent on bookings during previous years in addition to current bookings. Historically, the majority of our bookings occurred in the second half of the year, with a significant portion occurring in the fourth quarter, and this occurred once again in 2024. However, if a substantial portion of our anticipated bookings are delayed beyond our expectations, our revenue, margins, and cash flow in a particular period could be materially adversely impacted.

Supply Chain Constraints

We continue to see effects from global supply chain tightness due to the current inflationary environment, war in Ukraine, and trade tensions between the U.S. and China. We are not aware of, and do not expect any significant direct impact on our business or supply chain from the armed conflict in Israel and neighboring areas. While we have not experienced any significant component shortages to date, we are facing pressures from inflation. These dynamics could worsen as a result of continued geopolitical instability or escalation of current military conflicts or trade tensions. The new U.S. federal administration has implemented tariffs on steel and aluminum and has discussed implementing a number of other trade tariffs which may impact our operations. Our supply chain does not have significant exposure to China, but significant tariffs on imports from other countries where we do source materials could materially impact our costs. We are also reliant on third party providers of storage equipment, infrastructure equipment and pipelines, and other materials and technologies that work with our products to provide an energy solution for customers. In the event we are unable to mitigate the impacts of delays and/or price increases in raw materials and components, including as a result of new tariffs, it could delay the manufacturing and installation of, and increase the costs of, our products, which would adversely impact our cash flows and results of operations, including our revenues and gross margin. For example, we expect the 25% tariffs imposed on U.S. imports of steel and aluminum to adversely impact our cost of raw materials for our products.

Installations and Maintenance of our Products

In fiscal year 2024, our installation projects experienced some delays relating to, among other things, permitting, utility delays, and access to customer facilities. However, these delays did not significantly impact our revenue. If we are delayed in or unable to perform maintenance, our previously installed products would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. If we experience a significant increase of product failure in the future, our service expense may increase and we may fail to achieve the performance commitments to our customers, which could result in warranty and/or guaranty claims. Additionally, product failure and service costs may increase as we initially deploy new applications for our Energy Server system, including Be FlexibleTM load following, CCUS, and CHP.

Financing Constraints

As we grow our business globally and increase the size and number of customer orders, we will need to secure new customer financing options, the amount of financing available as well as the number of financing partners. As we offer an innovative new technology solution, obtaining new financing partners and available funds for customer financings often involves a rigorous and timely due diligence process on our technology, manufacturing and service capabilities. If we are unable to obtain adequate financing for our customers who desire to use third-party financing rather than purchasing the Energy Server systems for their own balance sheet, our revenue could be delayed or impacted. In addition, our ability to arrange financing for our products depends partly on the creditworthiness of our customers, and deterioration of our customers’ credit ratings could impact this financing. When interest rates rise, the cost of financing for our customers also increases, and the financiers of our installations demand a higher rate of return, putting pressure on our margins.

Manufacturing and Labor Market Constraints

As recently as 2022, we experienced impacts from labor shortages and challenges in hiring for our manufacturing facilities. While these constraints have since abated, and we reduced headcount as part of the Restructuring Plan adopted in September 2023, we may still experience difficulties with hiring and retention and may face additional labor shortages in the future. For details on the Restructuring Plan refer to Part II, Item 8, Note 12 — Restructuring. In addition, the current inflationary environment has led to rising wages and labor costs as well as increased competition for labor.

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Strategic Investment

On October 23, 2021, we entered into a Securities Purchase Agreement (the “SPA”) with SK ecoplant in connection with our strategic partnership. Pursuant to the SPA, on December 29, 2021, we sold to SK ecoplant 10,000,000 shares of our zero coupon, non-voting redeemable convertible Series A preferred stock, par value $0.0001 per share (the “Series A RCPS”), at a purchase price of $25.50 per share for an aggregate purchase price of $255.0 million (the “Initial Investment”). On November 8, 2022, each share of Series A RCPS was converted into 10,000,000 shares of Class A common stock.

Simultaneous with the execution of the SPA, we and SK ecoplant executed an amendment to the Joint Venture Agreement (the “JVA”), an amendment and restatement to our Preferred Distribution Agreement (“PDA Restatement”), and a new Commercial Cooperation Agreement regarding initiatives pertaining to the hydrogen market and general market expansion for Bloom solutions.

On March 20, 2023, SK ecoplant entered into an amendment of the SPA (the “Amended SPA”) with us, pursuant to which on March 23, 2023, we issued and sold to SK ecoplant 13,491,701 shares of non-voting Series B redeemable convertible preferred stock, par value $0.0001 per share (the “Series B RCPS”), at a purchase price of $23.05 per share for cash proceeds of $311.0 million, excluding issuance cost of $0.5 million.

On March 20, 2023, in connection with the Amended SPA, we also entered into a Shareholders’ Loan Agreement with SK ecoplant (the “Loan Agreement”), pursuant to which we had the option to draw on a loan from SK ecoplant with a maximum principal amount of $311.0 million, a maturity of five years and an interest rate of 4.6%, should SK ecoplant have sent a redemption notice to us under the Amended SPA. As of September 30, 2023, the loan commitment asset from SK ecoplant was derecognized as a result of automatic conversion of all shares of the Series B RCPS into shares of our Class A common stock.

On September 15, 2023, we entered into the Amended and Restated JVA and the Share Purchase Agreement (together, the “Amended JV Agreements”) with SK ecoplant which allowed SK ecoplant to increase its share of the voting rights in the Korean JV to 60% and increased the scope of assembly done by the joint venture facility in the Republic of Korea to full assembly. In January 2024, according to the Amended JV Agreements, SK ecoplant made a capital contribution to Korean JV of $4.0 million.

On September 23, 2023, all 13,491,701 shares of the Series B RCPS were automatically converted into shares of our Class A common stock pursuant to the Certificate of Designation, dated as of March 20, 2023, setting forth the rights, preferences, privileges, and restrictions of the Series B RCPS, as amended by the Certificate of Amendment to the Certificate of Designation, dated as of April 18, 2023. Upon conversion of all the Series B RCPS into shares of our Class A common stock, SK ecoplant became a related party to us.

Pursuant to that certain Investor Agreement, dated as of December 29, 2021, by and between us and SK ecoplant, as amended from time to time (the “Investor Agreement”), SK ecoplant has granted an irrevocable proxy to our Chief Executive Officer and Chief Financial Officer, as our designees, to vote all of SK ecoplant’s shares, in their sole discretion on all matters to be voted upon by stockholders. The proxy will terminate upon the earlier of the expiration or termination of the standstill term and the voting agreement set forth in Section 4.1 of the Investor Agreement. The standstill term continues until the later of (i) March 23, 2025, (ii) the date on which SK ecoplant ceases to have the right to designate a director to our board of directors, and (iii) the date on which SK ecoplant and its subsidiaries beneficially own less than five percent of the shares of our Class A common stock then issued and outstanding.

For additional details about the transaction with SK ecoplant, please see Part II, Item 8, Note 17 — SK ecoplant Strategic Investment, and for more information about our joint venture with SK ecoplant, please see Part II, Item 8, Note 11 — Related Party Transactions.

Sustainability

We are committed to the goal of providing consistent returns to our stockholders with a focus on corporate citizenship that places a high value on the environment, the welfare of our employees, the communities in which we operate, and the customers we serve. We believe that effectively managing our sustainability-related risks, opportunities, and programs provides financial and reputational benefits that create long-term value for our investors.

We strive to empower businesses and communities to responsibly take charge of their energy while addressing both the causes and consequences of climate change. We aim to serve our customers with products that are resilient, providing uninterrupted power with predictable pricing over the long-term, while developing an increasingly broad portfolio of decarbonized solutions.

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In April 2024, we released our 2023 Sustainability Report, Transforming Energy for the Digital Age (the “Sustainability Report”), using generally accepted sustainability frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Sustainability Report also utilized certain Global Reporting Initiative Standards and was mapped against the United Nations Sustainable Development Goals. We plan to issue a sustainability report on an annual basis.

The Sustainability Report can be found on our website at https://www.bloomenergy.com/sustainibility. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Inflation Reduction Act of 2022

On August 16, 2022, President Biden signed into law the IRA. It contains provisions that have had a significant impact on the development and financing of clean energy projects in the U.S. However, President Trump has expressed skepticism about the IRA and clean energy projects, thus creating uncertainty about its future. The IRA includes expanded tax credits for projects across the Bloom product portfolio as well as for manufacturing of clean energy equipment. It also introduces new mechanisms for tax credit monetization and transferability. The IRA includes targeted incentives intended to encourage development in low-income communities, the use of domestically produced materials, and compliance with certain labor-related requirements. We believe that the programs and credits included in the IRA align well with our business model and could provide significant benefits for our projects. Some or all of these benefits, however, may be at risk from the new U.S. Congress and federal administration, which have expressed interest in repealing, restricting or clawing back IRA funding and expanded tax credits.

The IRA introduces and updates several crediting mechanisms and incentive provisions that are relevant for us including:

•Section 48E — Clean Electricity Investment Credit, which starting December 31, 2024, replaces the previous investment tax credit framework for named clean energy technologies with a “tech neutral” framework anchored around the net carbon neutrality of energy generation from qualifying facilities. It provides incentives of up to 50% for qualifying energy property meeting domestic content and labor requirements.

•Section 45V — Credit for the Production of Clean Hydrogen, which provides a PTC of up to $3 per kg of qualified clean hydrogen produced at qualified facilities in the US, including Bloom’s Electrolyzer projects.

•Section 45Q — Credit for Carbon Oxide Sequestration, which provides up to a $60/tonne credit for carbon utilization and $85/tonne credit for geologic sequestration and can improve the cost effectiveness of Bloom’s carbon capture offerings.

•Section 45Z — Clean Fuel Production Credit, which provides a tax credit for the production of clean transportation fuels with lifecycle GHG emissions below certain levels. The credit can reach levels of up to $1.00/gallon for non-aviation fuel and $1.75/gallon for non-aviation fuel and is influenced by emissions associated with energy use including on-site power provided by Bloom.

•Section 48C — Qualified Advanced Energy Project, which provides an ITC through a competitive application process administered through the Department of Energy equal to 6% or 30% of the investment with respect to advanced energy projects

On December 21, 2023, we submitted the application for qualifying advanced energy project credit allocation under Internal Revenue Code Section 48C(e) for the manufacturing facility in Fremont, California (the “Facility”). On March 29, 2024, we received notification from the Internal Revenue Service (the “IRS”) of the acceptance of our application for a Qualifying Advanced Energy Project Credit of up to $75.3 million. After a technical review of Bloom’s Section 48C(e) application, the Department of Energy provided a recommendation to the IRS to grant a $75.3 million credit allocation for the Facility. The approval is subject to satisfaction of the underlying certification requirements, including the prevailing wage and apprenticeship requirements, within two years from the date of the application acceptance, and potential clearance by the Office of Management and Budget due to President Trump’s executive order halting the disbursement of funds under the IRA.

The U.S. Treasury Department has issued implementation guidance, and we intend to engage with the new U.S. federal administration to understand how shifting policy priorities might impact the revised guidance or changes to the law itself. Current Section 48E guidance places Bloom Energy Server systems running on natural gas in a class of Combustion and Gasification facilities required to demonstrate net-zero emissions in the production of electricity. If the U.S. federal administration does not clarify key aspects of the guidance related to our unique technology, our projects will no longer be

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beneficiaries of the ITC. If the ITC is not extended for fuel cells, U.S. bookings, revenue and gross margins could be materially impacted in 2025 and beyond. Also, it is possible that the expiration of the ITC may have increased demand for ITC-compliant sales of our Energy Server systems in 2024 due to customer desire to secure ITC for their projects through safe harboring. Bloom, its customers and financing partners executed safe harbor mechanisms in 2024 that permit deployment of Energy Server systems with the ITC Section 48 credit through 2028. However, if our customers or project-level investors prove reluctant to make sufficient cash outlays for purchases of Energy Server systems for future projects based on their safe harbor, our sales could be negatively impacted in future years.

The IRA also creates certain bonus tax credits relevant to our products placed in service in fiscal years 2023 and 2024, available by satisfying domestic content criteria and/or other criteria if such products are located within an “energy community,” as defined by the IRA. In fiscal years 2023 and 2024, contracts that included price adjustments related to the domestic content bonus tax credit were evaluated as variable consideration and we estimated variable consideration by using the most likely amount method of meeting the IRA domestic content criteria. When recognizing revenue, we constrained the estimate of variable consideration to an amount that was not probable of a significant revenue reversal.

New Foreign Tax Rules

In 2021, the OECD announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently multiple sets of administrative guidance have been issued. Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in. However, no material impact to our financial statements is expected due to the relatively small operations outside the U.S.

Liquidity and Capital Resources

A discussion regarding our liquidity and capital resources for 2024 compared to 2023 is presented in this section. A discussion of our liquidity and capital resources for 2023 compared to 2022 can be found under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.

We raised cash and supplemented liquidity by issuing the 3% Green Convertible Senior Notes due June 2029 (the “3% Green Notes due June 2029”) in the second quarter of 2024, as well as through financing activities with SK ecoplant in the first quarter of 2023 and issuing the 3% Green Convertible Senior Notes due June 2028 (the “3% Green Notes due June 2028”) in the second quarter of 2023. We expanded our warehouse space in Delaware and California to store more inventory to meet the anticipated increase in demand. If this increase in demand does not materialize to the degree we anticipated, our liquidity and financial condition may be adversely impacted.

On May 29, 2024, we issued the 3% Green Notes due June 2029 in an aggregate principal amount of $402.5 million due June 2029, unless earlier repurchased, redeemed or converted, less the initial purchasers’ discount of $12.1 million and other issuance costs of $0.7 million, resulting in net cash proceeds of $389.7 million. On May 29, 2024, we used approximately $141.8 million of the net proceeds from this issuance to repurchase $115.0 million, or 50%, of the outstanding principal amount of our 2.5% Green Convertible Senior Notes due August 2025 (the “2.5% Green Notes”) in privately negotiated transactions. The repurchase amount equaled 122.6% of the principal amount repurchased plus related accrued and unpaid interest.

As of December 31, 2024, we had unrestricted cash and cash equivalents of $802.9 million. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $749.4 million. We seek to maintain these balances with high credit quality counterparties, regularly monitor the amount of our credit exposure to any one issuer and diversify our investments in order to minimize our exposure.

As of December 31, 2024, we had $1,124.7 million of recourse debt, $4.1 million of non-recourse debt, and $9.2 million of other long-term liabilities. As of December 31, 2024, $114.4 million and $1,014.4 million of our debt were classified as short-term and long-term, respectively. For a complete description of our outstanding debt, please see Part II, Item 8, Note 7 — Outstanding Loans and Security Agreements.

The combination of our cash and cash equivalents and cash flow to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or are not received in a timely manner to satisfy our near-term or future cash needs, we may require additional capital from equity or

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debt financings to fund our operations, our manufacturing capacity, product development, and market expansion requirements and to timely respond to competitive market pressures or strategic opportunities, among other things. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. During the year ended December 31, 2024, we factored $184.2 million of accounts receivable. However, we may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. Although currently we do not have any floating-rate notes on the balance sheet, our overall cost of capital may increase if interest rates rise, if and when we refinance our fixed-rate convertible notes. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock.

Our future capital requirements depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds and the need for additional working capital, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our products, our ability to secure financing for customer use of our products, the timing of installations and of inventory build in anticipation of future sales and installations, and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.

A summary of our consolidated sources and uses of cash, cash equivalents, and restricted cash was as follows (in thousands):

Operating Activities

Our operating activities consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash provided by operating activities for the year ended December 31, 2024, related primarily to the changes in our working capital of $66.4 million predominantly due to an increase in deferred revenue and customer deposits by $115.9 million driven primarily by receipt of new customer deposits, partially offset by (1) an increase in contract assets by $103.8 million triggered by timing of achieving billing milestones, (2) an increase in inventory levels by $44.5 million to support future demand, (3) an increase in deferred cost of revenue by $12.9 million, and (4) the timing of payments to vendors.

Net cash provided by operating activities during the year ended December 31, 2024, was $92.0 million, an improvement of $464.5 million compared to the prior year period. The change in cash provided by operating activities during the year ended December 31, 2024, as compared to the prior year period, was primarily driven by an increase of $187.2 million and $97.0 million attributable to inventories and accounts receivable, respectively, a $182.5 million increase attributable to deferred revenue and customer deposits, partially offset by a decrease of $109.2 million and $14.7 million attributable to contract assets and deferred cost of revenue, respectively.

Investing Activities

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity. Cash used in investing activities during the year ended December 31, 2024, was $58.8 million, an improvement of $24.9 million compared to the prior year period, and was primarily due to the decrease in expenditures on tenant improvements for a newly leased engineering and manufacturing building in Fremont, California, which opened in July 2022. We expect to continue to make capital investments over the next few quarters to expand production capacity at our new manufacturing facility in Fremont, California, which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow to be generated from operations or through equity or debt financing. We may also evaluate and arrange equipment lease financing to fund this capital expenditures.

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Financing Activities

Our financing activities consist of borrowings and repayments of debt, proceeds, and repayments of financing obligations, distributions paid to noncontrolling interests, contributions from noncontrolling interests, payments of dividends, proceeds from the issuances of our common stock, and other financing activities. Net cash provided by financing activities during the year ended December 31, 2024, was $175.2 million, a decrease of $508.1 million compared to the prior year period, predominantly due to (1) a decrease in the proceeds from the issuance of redeemable convertible preferred stock of $311.0 million, net of paid issuance costs, as a result of the SK ecoplant Second Tranche Closing in the year ended December 31, 2023, (2) a decrease in proceeds from the issuance of debt by $234.6 million, and (3) an increase in repayment of financing obligations by $71.8 million. The decrease was partially offset by (1) the purchase in fiscal year 2023 of the capped call options of $54.5 million related to the 3% Green Notes due June 2028 issued in the second quarter of fiscal year 2023, and (2) a decrease in the repayment of debt by $50.4 million.

Net cash provided by financing activities for the year ended December 31, 2024, consisted of (1) the proceeds from issuance of the 3% Green Notes due June 2029 of $402.5 million, (2) the proceeds from issuance of common stock of $12.4 million, (3) the contribution from a noncontrolling interest of $4.0 million, (4) the proceeds from financing obligations of $1.8 million, (5) the partial repurchase of the 2.5% Green Notes of $141.0 million, (6) the repayment of financing obligations of $90.2 million, (7) the repayment of debt issuance costs of $12.8 million pertaining to the 3% Green Notes due June 2029, and (8) a dividend payment of $1.5 million.

We believe we have sufficient capital to operate our business over the next 12 months. Our working capital was strengthened with the supplemented liquidity through issuing the 3% Green Notes due June 2029 and the 3% Green Notes due June 2028 in the second quarter of 2024 and 2023, respectively, as well as financing activities with SK ecoplant in the first quarter of 2023. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part II, Item 8, Note 7 — Outstanding Loans and Security Agreements, and Part I, Item 1A, Risk Factors — Risks Related to Our Liquidity — Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs, for more information regarding the terms of and risks associated with our debt.

Purchase and Financing Options

Overview

In order to appeal to the largest variety of customers, we make available several options to them. Both in the U.S. and abroad, we sell our solutions directly to customers.

To appeal to a wide range of customers, we arrange several financing options. In the U.S., we also provide access to our Energy Server system through a Power Purchase Agreement, which is the purchase of electricity generated by the Energy Server system in exchange for a scheduled dollars per kilowatt hour rate, through a Capacity Agreement where the customer pays a capacity based flat payment, through a Lease Agreement where the customer pays for a monthly fixed fee for the use of the equipment, and through a Managed Services Agreement, whereby we sell and lease back the Energy Server system to supply energy services to our customers. Each of the foregoing are made possible through third-party financing arrangements by assembling such contracts into portfolios which are sold to investors.

Often our offerings take advantage of local incentives. In the U.S., our financing arrangements are structured to optimize both federal and local incentives, including the ITC (when available) and accelerated depreciation.

Whichever option is selected by a customer in the U.S. or internationally, the contract structure will include obligations (“O&M Obligations”) on our part to operate and maintain our products (“O&M Agreement”). In the U.S., the contract structure often includes obligations on our part to install our products (“Installation Obligations”). Consequently, our transactions may generate revenue from the sale of our products and electricity, the performance of the O&M Obligations, and performance of the Installation Obligations.

In addition to customary workmanship and materials warranties offered with the sale of our products, we provide warranties and guaranties regarding the efficiency and output of our products to the customer and, in certain financing structures, to the financing parties as well. We refer to a “performance warranty” as an obligation to repair or replace Bloom products as necessary to return performance of our products to the warranted performance level. We refer to a “performance guaranty” as an obligation to make a payment to compensate for the failure of our products to meet the guaranteed performance level. Our obligation to make payments under a performance guaranty is always contractually capped.

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Energy Server System Sales

There are customers who purchase our Energy Server systems directly from us pursuant to customary equipment sales contracts. In connection with the purchase of the Energy Server systems, the customers also enter into a contract with us for the O&M Obligations. The customer may elect to engage us to provide the Installation Obligations or engage a third-party provider. Internationally, we are sometimes required to use a local construction company to perform the Installation Obligations, as is the case in the Republic of Korea, and we contract directly with the customer to provide the O&M Obligations.

Customer Financing Options

With respect to the third-party financing options in the U.S., a customer may choose to contract for the purchase of electricity generated by the Energy Server systems in exchange for a scheduled dollars per kilowatt hour rate (a “Power Purchase Agreement” or “PPA”), or the use of our Energy Server systems owned by a financing party in exchange for a capacity-based payment (a “Capacity Agreement”) or the use of our Energy Server systems via an equipment lease (a “Lease Agreement”) or energy services provided via a sale-lease back structure (each, a “Managed Services Agreement”).

PPAs are typically financed on a portfolio basis. In the past, we have financed portfolios through tax equity partnerships, acquisition financings and direct sales to investors (each, a “Portfolio Financing”). Capacity-based payments in a Managed Services Agreement or Capacity Agreement are required regardless of the level of performance of the Energy Server system. Managed Services Agreements are then financed pursuant to a sale-leaseback with a financial institution (a “Managed Services Financing”).

In the U.S., our capacity to offer our Energy Server systems through these financed arrangements depends in large part on the ability of financing parties to optimize the tax benefits associated with the Energy Server systems, such as the ITC (when available) or accelerated depreciation. Interest rate fluctuations, and internationally, currency exchange rate fluctuations, may also impact the attractiveness of any financing offerings for our customers. Our ability to finance a PPA, a Capacity Agreement, or a Managed Services Agreement is also related to, and may be limited by, the creditworthiness of the customer. Additionally, a Capacity Agreement or Managed Services Financing option is limited by a customer’s willingness to commit to making the capacity-based payment to a financing party regardless of performance.

In each of our financing options, we typically perform the functions of a project developer, including identifying end customers and financiers, leading the negotiations of the customer agreements and financing agreements, securing all necessary permitting and interconnections approvals, and overseeing the design and construction of the project up to and including commissioning the Energy Server systems.

Each of our financing transaction structures is described in further detail below.

Portfolio Financings

In the past, we financed the Energy Server systems subject to our PPAs through two types of Portfolio Financings. In one type of transaction, we sold a portfolio of PPAs to a tax equity partnership in which we held a managing member interest (such partnership in which we hold an interest, a “PPA Entity”). In these transactions, we sold the portfolio of the Energy Server systems to a limited liability project company (such portfolio owner, a “Portfolio Company”) of which the PPA Entity was the sole member. Whether an investor, a tax equity partnership, or a single member limited liability company, the Portfolio Company was the entity that directly owned the portfolio. The Portfolio Company sold the electricity generated by the Energy Server systems contemplated by the PPAs to the customers. We recognized revenue as the electricity was produced. Our current practices no longer contemplate these types of transactions. In fiscal year 2023, we completed the process of restructuring our PPA Entities by (i) acquiring the outstanding equity interests of our previous investors and tax equity partners, (ii) selling 100% of the equity interests in the PPA Entities or the Portfolio Companies to new investors or tax equity partnerships in which we do not have an equity interest, and (iii) entering into new equipment supply and installation agreements and related agreements to repower and/or replace the Energy Server systems. In August 2023, we sold our last consolidated PPA Entity, 2015 ESA Project Company, LLC (“PPA V”), in connection with the repowering of its portfolio of the Energy Server systems. For further discussion, see Part II, Item 8, Note 10 — Portfolio Financings. The second type of Portfolio financing and our current practice consists of our selling a portfolio of PPAs, or Capacity Agreements or Managed Service Agreements or some combination thereof to a tax equity partnership in which we hold no interest (a “Third-Party Financing”).

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Managed Services Financing

Under our Managed Services Financing option, we enter into a Managed Services Agreement with a customer for a certain term. We sell the Energy Server systems to the financier who then leases it back to us pursuant to a sale-leaseback transaction. In the past, certain sale-leaseback transactions failed to achieve all of the criteria for sale accounting and consequently the proceeds from the transaction were recognized as financing obligations within our consolidated balance sheets. For successful sale-and-leaseback transactions, the financier of the Managed Services Agreement typically pays the purchase price for the Energy Server systems at or around acceptance, and we recognize the fair market value of the Energy Server systems sold and respective installation services provided to the financier within product and install revenue, respectively, and recognize an operating lease right-of-use (“ROU”) asset and an operating lease liability on our consolidated balance sheets. Any proceeds in excess of the fair value of the Energy Server systems are recognized as financing obligations.

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The duration of our current Managed Services Agreement offerings is between five and ten years. Under some Managed Services Agreements, we agree to provide remarketing assistance in the event a customer does not renew its agreement. Our Managed Services Agreements typically provide for performance warranties of both the efficiency and output of the Energy Server systems and may include other warranties depending on the type of deployment. We often structure payments from the customer as a dollar per kilowatt flat payment. In some cases, the structure may also include variable payment based on the Energy Server systems’ performance or a performance-related set-off. As of December 31, 2024, we had incurred no liabilities due to failure to repair or replace our Energy Server systems pursuant to these performance warranties.

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Purchase Alternatives

Our customers have several purchase alternatives for our Energy Server systems. The portion of total revenue attributable to each purchase option in the years ended December 31, 2024, and 2023, was as follows:

Delivery and Installation

Installation is required in order for our Energy Server systems to reach full power. Our role in the installation process varies based on the terms of the contract and/or the country of installation which can include, but is not limited to, design, engineering, permitting, procurement, construction, installation, start-up, performance testing, and commissioning of the systems. Bloom may contract with subcontractors to provide all or any part of the work. Depending on the acceptance milestones, we recognize installation revenue once the project has reached full power, or mechanical completion or on a percentage of completion basis.

Performance Guarantees

As of December 31, 2024, we had incurred no liabilities due to failure to repair or replace the Energy Server systems pursuant to any performance warranties made under the O&M Agreements.

For the O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $587.5 million (including $460.3 million related to portfolio financing entities and $127.2 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $489.4 million as of December 31, 2024. For the years ended December 31, 2024, and 2023 we made performance guarantee payments of $21.2 million and $25.9 million, respectively.

International Channel Partners

India. In India, sales activities are currently conducted by Bloom Energy (India) Pvt. Ltd., our wholly owned subsidiary; however, we continue to evaluate the Indian market to determine whether the use of channel partners would be a beneficial go-to-market strategy to grow our India market sales.

Japan. In Japan, sales activities are currently conducted by Bloom Energy Japan Limited, our wholly owned subsidiary.

The Republic of Korea. In 2018, Bloom Energy Japan consummated a sale of our products in the Republic of Korea to Korea South-East Power Company. Following this sale, we entered into a Preferred Distributor Agreement (“PDA”) in November 2018 with SK ecoplant for the marketing and sale of Bloom products for the stationary utility and commercial and industrial South Korean power market. In 2019, we entered into a PDA with SK D&D Co., Ltd. that in 2024 was transferred to SK eternix. The PDA with SK eternix has a term ending December 31, 2027.

As part of our expanded strategic partnership with SK ecoplant, the parties executed the PDA Restatement in October 2021, which incorporates previously amended terms and establishes: (i) SK ecoplant’s purchase commitments of at least 500 megawatts of power for our Energy Server systems between 2022 and 2024 on a take-or-pay basis; (ii) rollover procedures; (iii) premium pricing for product and services; (iv) termination procedures for material breaches; and (v) procedures if there are material changes to the Republic of Korea Hydrogen Portfolio Standard. In December 2023, we further expanded our business partnership with SK ecoplant through the increase of SK ecoplant’s purchase commitments for Bloom Energy products of 250

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megawatts through 2027 and extended the timing of delivery of the remaining take-or-pay commitment under the original agreement. For additional information, please see Part II, Item 8, Note 17 — SK ecoplant Strategic Investment.

Under the terms of the PDA Restatement, we (or our subsidiary) contract directly with the customer to provide operations and maintenance services for the Energy Server systems. We have established a subsidiary in the Republic of Korea, Bloom Energy Korea, LLC, to which we subcontract such operations and maintenance services. The terms of the operations and maintenance are negotiated on a case-by-case basis with each customer but are generally expected to provide the customer with the option to receive services for at least 10 years, and for up to the life of the Energy Server systems.

SK ecoplant Joint Venture Agreement. In September 2019, we entered into a joint venture agreement with SK ecoplant to establish a light-assembly facility in the Republic of Korea for sales of certain portions of our Energy Server system for the stationary utility and commercial and industrial market in the Republic of Korea. The joint venture is a variable interest entity (“VIE”) of Bloom, and we consolidate it in our financial statements as we are the primary beneficiary and therefore have the power to direct activities which are most significant to the joint venture. The joint venture facility became operational in July 2020. Other than a nominal initial capital contribution by Bloom Energy, the joint venture is funded by SK ecoplant. SK ecoplant is our primary customer for the products assembled by the joint venture. In October 2021, as part of our expanded strategic partnership with SK ecoplant, the parties agreed to amend the joint venture agreement (“JVA”) to increase the scope of assembly work done in the joint venture facility.

On September 15, 2023, we entered into the Amended and Restated JVA and the Share Purchase Agreement (together, the “Amended JV Agreements”) with SK ecoplant which allowed SK ecoplant to increase its share of the voting rights in the Korean JV to 60% and increased the scope of assembly done by the joint venture facility in the Republic of Korea to full assembly. In January 2024, according to the Amended JV Agreements SK ecoplant made a capital contribution to Korean JV of $4.0 million.

Neither the Amended JV Agreements, nor the fact that SK ecoplant is considered to be our related party after the conversion of Series B RCPS into shares of our Class A common stock (for additional information, please see Note 11 — Related Party Transactions) changed our status as the primary beneficiary of the Korean JV. Therefore, we continue to consolidate this VIE in our financial statements as of December 31, 2024.

Comparison of the Years Ended December 31, 2024, and 2023

A discussion regarding our results of operations for 2024 compared to 2023 is presented in this section. A discussion of our results of operations for 2023 compared to 2022 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2023.

Key Operating Metrics

In addition to the measures presented in the consolidated financial statements, we have historically used the key operating metrics below to evaluate business activity, to measure performance, to develop financial forecasts, and to make strategic decisions:

•Product accepted — the number of customer acceptances of our Energy Server systems in any period. We recognize revenue when an acceptance is achieved. We used this metric to measure the volume of deployment activity. We measured each Energy Server system manufactured, shipped, and accepted in terms of 100 kilowatt equivalents.

•Product costs of product accepted in the period (per kilowatt) — the average unit product cost for the Energy Server systems that are accepted in a period. We used this metric to provide insight into the trajectory of product costs and, in particular, the effectiveness of cost reduction activities.

•Period costs of manufacturing related expenses not included in product costs — the manufacturing and related operating costs that are incurred to procure parts and manufacture the Energy Server systems that are not included as part of product costs. We used this metric to measure any costs incurred to run our manufacturing operations that were not capitalized into inventory and therefore, expensed to our consolidated statements of operations in the period that they were incurred.

•Installation costs on product accepted in the period (per kilowatt) — the average unit installation cost for the Energy Server systems that are accepted in a given period. This metric was used to provide insight into the trajectory of installation costs and, in particular, to evaluate whether our installation costs were in line with our installation billings.

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We have determined that the foregoing metrics no longer reflect key operating metrics of the company and therefore we will no longer report on these metrics in our reports for the following reasons. We are increasingly transitioning from selling our Energy Server system as a standalone product to offering energy and hydrogen solutions to our customers. This trend is occurring across our offerings, as we find ways to deliver additional value to customers. We are solving critical problems for our customers and bringing new technologies to the market. This requires us to expand the scope of what is delivered beyond our conventional “electricity-only” solution to electricity, heat, carbon capture, storage, and molecule solutions. As a result of these developments, our Energy Server product (electricity-only power module) cost is becoming a widely varying portion of the overall value of the energy solution we provide, and trends in costs and selling prices per kilowatt are less representative of our overall business performance. In management’s view, this trend will only continue to get stronger in the future. Specific highlights of our business evolution to offering energy and hydrogen solutions include:

•Time to power. Customers are looking for energy solutions that can be provided quickly. In order to speed up installation, we are now shipping solutions that are pre-packaged Energy Server systems mounted on pre-fabricated skids in the factory. This minimizes the sitework that is needed and allows us to deploy the solution quickly, giving the customer a faster path to power. This effort requires more factory costs, but it reduces installation costs and increases the value delivered to the customer.

•Power Density solutions. We have improved our power density for certain customer sites by factory building pre-packaged stackable Energy Server systems. This increases costs and requires us to add more hardware at the factory but delivers more value to customers who have space constraints.

•Combined heat and power. The CHP solution allows customers to take advantage of waste heat, boosting efficiency and economic return of the project. The CHP solution, however, requires significant infrastructure to deliver the waste heat from the Energy Server system to the customer. This infrastructure cost is additive to reported product costs but allows us to deliver more value to customers. Moreover, a kilowatt of heat does not have the same cost or value as a kilowatt of electricity. We optimize our solutions depending on the relevant project requirements, and as a result our cost structure can vary widely depending on the solution provided.

•Carbon Capture solutions. Our technology is well-suited to carbon capture when running on natural gas, the exhaust is a concentrated stream of CO2 relative to other energy generation technologies. This means our solution requires less energy and hardware to separate out the CO2 for capture and sequestration. However, this does require additional infrastructure onsite to separate the CO2 from the rest of the exhaust and to condition it appropriately for the application. This infrastructure cost is additive to reported product costs but allows us to deliver more value to customers by delivering low carbon power.

•Microgrid solutions. As the reliability of the electrical grid becomes more challenging in multiple geographies, customers are turning to our solutions in the form of grid-connected or islanded microgrids. The cost of the ancillary equipment associated with establishing a microgrid is significant, and thus further skews cost metrics measured on a per kilowatt basis.

•Bloom Electrolyzer. The Bloom Electrolyzer is designed to provide scalable and cost-effective hydrogen solutions based on the same solid oxide platform as our Energy Server systems. The Bloom Electrolyzer produces hydrogen rather than electricity, and a kilowatt measure attributable to an electrolyzer is not equivalent to a kilowatt measure attributable to a solid oxide fuel cell. Costs of solutions designed to produce hydrogen could vary widely depending on project specifics.

As our business has evolved to meet the energy needs of the market, ‘product accepted’ is no longer as relevant as an operating metric for our business due to the nature of the complexity in the solutions offered. For example, a solution offered to a customer who wants islanded power, which creates additional reliability, would carry additional costs due to the microgrids and other ancillary equipment needed to provide the solution. Similarly, a customer utilizing our Be FlexibleTM solution would need ancillary equipment such as storage. These factors can distort the cost or revenue per kilowatt metrics. Management relies primarily on revenue, non-GAAP gross and operating margins, as well as cash flows from operating activities to manage operations.

Results of Operations

A discussion regarding the comparison of our financial condition and results of operations for the years ended December 31, 2024, and 2023 is presented below.

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Revenue

PPA Portfolio Repowering

On August 25, 2023, November 22, 2022, and June 14, 2022, we sold PPA V, PPA IV, and PPA IIIa, respectively, and simultaneously entered into respective repowering agreements to upgrade the old Energy Server systems by replacing them with the new Energy Server systems and to provide related installation services (i.e., repowering of our PPA portfolios). These PPA portfolios repowering transactions had a material impact on our financial results for the year ended December 31, 2023, but did not repeat in the year ended December 31, 2024.

Total Revenue

Total revenue increased by $140.4 million, or 10.5%, for the year ended December 31, 2024, as compared to the prior year period. This increase was driven by a $109.9 million increase in product revenue, a $30.5 million increase in service revenue and a $29.5 million increase in installation revenue, partially offset by a $29.5 million decrease in electricity revenue.

Product Revenue

Product revenue increased by $109.9 million, or 11.3%, for the year ended December 31, 2024, as compared to the prior year period. This increase was primarily due to the increase in demand for our products, predominantly in the fourth quarter of fiscal year 2024, partially offset by (1) lower volume and pricing resulting from our PPA portfolios which contributed $172.5 million net decrease in revenue recognized in fiscal year 2024 compared to the prior year period, and (2) a large transaction in the first and the second quarters of fiscal year 2023 that did not repeat in fiscal year 2024.

Installation Revenue

Installation revenue increased by $29.5 million, or 31.8%, for the year ended December 31, 2024, as compared to the prior year period. The increase was primarily driven by the timing of achieving key project milestones on sites requiring installations by us in the year ended December 31, 2024, partially offset by the effect of repowering our PPA portfolios, which decreased revenue recognized in fiscal year 2024 by $25.2 million, as compared to the prior year period.

Service Revenue

Service revenue increased by $30.5 million, or 16.6%, for the year ended December 31, 2024, as compared to the prior year period. The increase was primarily driven by (1) a $21.2 million increase in revenue from maintenance contracts associated with our fleet of Energy Server systems, and (2) a decrease of $9.9 million in product performance guarantees that resulted from improved fleet performance. The overall increase was partially offset by the timing of revenue recognition on certain contracts. The repowering of our PPA portfolios decreased revenue recognized in fiscal year 2024 by $7.6 million, as compared to the prior year period.

Electricity Revenue

Electricity revenue includes both revenue from contracts with customers and revenue from contracts that contain leases.

Electricity revenue decreased by $29.5 million, or 35.8%, for the year ended December 31, 2024, as compared to the prior year period. The decrease was predominantly due to the decrease in installed units, as a result of repowering of some PPA and Managed Service portfolios, which decreased revenue recognized in fiscal year 2024 by $12.2 million, as compared to the prior year period.

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Cost of Revenue

Total Cost of Revenue

Total cost of revenue decreased by $66.5 million, or 5.9%, for the year ended December 31, 2024, as compared to the prior year period. The decrease was driven by a $140.0 million decrease in cost of electricity revenue, and a $6.0 million decrease in cost of service revenue, partially offset by a $55.7 million increase in cost of product revenue, and a $23.7 million increase in installation revenue.

Cost of Product Revenue

Cost of product revenue increased by $55.7 million, or 8.8%, for the year ended December 31, 2024, as compared to the prior year period. The increase in cost of product revenue was primarily driven by (1) the increase in demand for our products, predominantly in the fourth quarter of fiscal year 2024, and (2) by the release of $3.1 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal year 2023. The increase was partially offset by (1) (i) lower volume resulting from our PPA portfolios, which decreased cost of product revenue recognized in fiscal year 2024 by $75.4 million, as compared to the prior year period, and (ii) the effect of a large transaction in the first and the second quarters of fiscal year 2023 that did not repeat in fiscal year 2024, (2) our ongoing efforts to reduce material costs, (3) reduced labor and overhead costs through restructuring programs executed in fiscal year 2023, and (4) improved processes and automation at our manufacturing facilities.

Cost of Installation Revenue

Cost of installation revenue increased by $23.7 million, or 22.4%, for the year ended December 31, 2024, as compared to the prior year period. The increase was primarily driven by the timing of achieving key project milestones on sites requiring installations by us in the year ended December 31, 2024, partially offset by the effect of repowering our PPA portfolios, which decreased cost of installation revenue recognized in fiscal year 2024 by $20.9 million, as compared to the prior year period.

Cost of Service Revenue

Cost of service revenue decreased by $6.0 million, or 2.7%, for the year ended December 31, 2024, as compared to the prior year period. This decrease was primarily due to (1) a decrease in the deployment of field replacement units, contributing to a decrease of $8.8 million, (2) a $7.0 million decrease in repair and overhaul expenses, partially as a result of repowering our PPA portfolios in fiscal year 2023 which resulted in a relatively newer fleet that required less service, and (3) our cost reduction efforts to proactively manage fleet optimizations. The decrease was partially offset by an increase in maintenance material and labor and overhead costs of $10.0 million.

Cost of Electricity Revenue

Cost of electricity revenue includes both cost of revenue from contracts with customers and cost of revenue from contracts that contain leases.

Cost of electricity revenue decreased by $140.0 million, or 78.2%, for the year ended December 31, 2024, as compared to the prior year period. This decrease was predominantly due to a decrease in installed units, driven primarily by a $123.7 million impairment of the Energy Server systems as a result of the PPA V Repowering, which commenced in the third quarter of fiscal year 2023.

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Gross Profit (Loss) and Gross Margin

Total Gross Profit

Total gross profit increased by $206.9 million in the year ended December 31, 2024, as compared to the prior year period. This increase was predominantly driven by (1) a $110.4 million improvement of electricity gross profit (loss), primarily due to a $123.7 million impairment charge that resulted from the PPA V Repowering, which commenced in the third quarter of fiscal year 2023, (2) a $54.2 million increase in product gross profit, predominantly driven by higher demand for our products, leading to a 11.3% increase in product revenue and only an 8.8% increase in respective cost of revenue, (3) a $36.4 million improvement in service gross loss, due to our efforts to proactively manage fleet optimizations, and our ongoing efforts to reduce product costs, as well as (4) a $5.8 million improvement in installation gross loss.

Product Gross Profit

Product gross profit increased by $54.2 million in the year ended December 31, 2024, as compared to the prior year period. The increase was primarily driven by (1) the increase in demand for our products, predominantly in the fourth quarter of fiscal year 2024, (2) reduced labor and overhead costs through restructuring programs executed in fiscal year 2023, and (3) improved processes and automation at our manufacturing facilities. The overall increase was partially offset by (1) lower volume and pricing resulting from our PPA portfolios, which decreased product gross profit recognized in fiscal year 2024 by $97.1 million, as compared to the prior year period, (2) the effect of a large transaction in the first and the second quarters of fiscal year 2023 that did not repeat in fiscal year 2024, and (3) the release of $3.1 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal year 2023.

Installation Gross Loss

Installation gross loss improved by $5.8 million in the year ended December 31, 2024, as compared to the prior year period. The change for the period was primarily driven by (1) the timing of achieving key project milestones on sites requiring installations by us in the year ended December 31, 2024, and (2) other site related factors such as site complexity, size, local ordinance requirements, and location of the utility interconnect. The repowering of our PPA portfolios increased installation gross loss recognized in fiscal year 2024 by $4.3 million, as compared to the prior year period.

Service Gross Loss

Service gross loss improved by $36.4 million in the year ended December 31, 2024, as compared to the prior year period. This was primarily driven by (1) a $21.2 million increase in revenue from maintenance contracts associated with our fleet of Energy Server systems, and (2) a decrease of $9.9 million in product performance guarantees that resulted from improved fleet performance, (3) a decrease in the deployment of field replacement units, contributing to a decrease of $8.8 million, (4) repair

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and overhaul cost reductions of $7.0 million, and (5) our cost reduction efforts to proactively manage fleet optimizations. The improvement was partially offset by (1) an increase in maintenance material and labor and overhead costs of $10.0 million, and (2) the timing of revenue recognition on certain contracts. The repowering of our PPA portfolios increased service gross loss recognized in fiscal year 2024 by $7.6 million, as compared to the prior year period.

Electricity Gross Profit (Loss)

Electricity gross profit (loss) improved by $110.4 million in the year ended December 31, 2024, as compared to the prior year period. The improvement for the period was predominantly driven by a $123.7 million impairment charge as a result of the PPA V Repowering, which commenced in the third quarter of fiscal year 2023, partially offset by the effect of repowering our PPA portfolios, which decreased electricity gross profit recognized in fiscal year 2024 by $12.2 million, as compared to the prior year period.

Operating Expenses

Total Operating Expenses

Total operating expenses decreased by $25.0 million in the year ended December 31, 2024, as compared to the prior year period. This decrease was primarily attributable to (1) a decrease in consulting, advisory and other professional services costs of $8.8 million, (2) a decrease in office expenses of $8.5 million, (3) a decrease in consumable laboratory supplies and other laboratory related costs of $8.0 million, (4) a decrease in employee compensation and benefits of $4.6 million, predominantly as a consequence of the restructuring efforts in the second half of fiscal year 2023, as well as the voluntary resignation of certain of our executives in the second half of fiscal year 2023, partially offset by an increase in employee compensation for executive new hires and an increase in compensation expenses related to new awards to our Chief Executive Officer, and (5) a decrease in facility costs of $3.6 million, primarily due to reduction in rent and utility costs. The overall decrease was partially offset by an increase in (1) depreciation expenses of $4.0 million, (2) computer equipment maintenance expenses of $3.2 million, and (3) other operating expenses of $1.4 million.

Research and Development

Research and development expenses decreased by $7.2 million in the year ended December 31, 2024, as compared to the prior year period. This overall decrease was primarily driven by (1) a decrease in consumable laboratory supplies and other laboratory related costs of $7.9 million as a result of our cost reduction efforts initiated in fiscal year 2023, and (2) a decrease in employee compensation and benefits of $1.8 million, predominantly as a consequence of the restructuring efforts in the second half of fiscal year 2023. The decrease was partially offset by an increase in depreciation and amortization expenses and other research and development expenses of $0.5 million and $2.7 million, respectively.

Sales and Marketing

Sales and marketing expenses decreased by $22.0 million in the year ended December 31, 2024, as compared to the prior year period. The decrease was primarily driven by (1) a decrease in employee compensation and benefits of $13.2 million, predominantly as a consequence of the restructuring efforts in the second half of fiscal year 2023, as well as the voluntary resignation of our Executive Vice President and Chief Business Development and Marketing Officer on September 1, 2023, and (2) a decrease in consulting, advisory and other professional services costs of $7.1 million as a result of our cost reduction efforts initiated in fiscal year 2023.

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General and Administrative

General and administrative expenses increased by $4.2 million in the year ended December 31, 2024, as compared to the prior year period. This increase was primarily driven by (1) an increase in employee compensation and benefits of $10.3 million, predominantly due to (i) stock-based compensation expenses recognized in the fourth quarter of fiscal year 2024 as a result of an equity grant to our Chief Executive Officer, and (ii) an increase in employee compensation for executive new hires, partially offset by an effect of the restructuring efforts in the second half of fiscal year 2023, as well as the voluntary resignation of certain of our executives in the second half of fiscal year 2023, (2) an increase in depreciation expenses of $3.5 million, and (3) an increase in computer equipment maintenance expenses of $3.1 million. The overall increase was partially offset by (1) a decrease in office expenses of $8.0 million, (2) a decrease in facility costs of $3.2 million, primarily due to reduction in rent and utility costs, (3) a decrease in (i) consulting, advisory and other professional services costs, (ii) travel and entertainment, and (iii) other operating expenses of $0.7 million, $0.4 million, and $0.4 million, respectively, as a result of our cost reduction efforts initiated in fiscal year 2023.

Stock-Based Compensation

Total stock-based compensation for the year ended December 31, 2024, decreased by $4.1 million, as compared to the prior year period, and the decrease was predominantly related to a decrease in stock-based compensation costs related to the 2018 ESPP of $9.6 million and a decrease of stock-based compensation related to PSUs and RSUs of $1.1 million , partially offset by an increase of stock-based compensation costs related to stock options of $2.8 million; the remaining $3.8 million of the overall decrease includes capitalized stock-based compensation expenses and stock-based compensation cash component. The decrease was primarily driven by (1) the separation of full-time employees holding equity awards as a result of the restructuring in the second half of fiscal year 2023, (2) the change in the mix of award types, (3) a decrease in contributions to 2018 ESPP, and (4) the voluntary resignation of certain executives, including the former CFO, in fiscal years 2023 and 2024. The decrease was partially offset by (1) stock-based compensation expenses recognized in the fourth quarter of fiscal year 2024 as a result of a grant to our Chief Executive Officer, (2) stock-based compensation expenses related to granted RSUs, PSUs and the stock option awards (the “2024 Executive Awards”) in March, May and August 2024, and (3) stock-based compensation expense related to granted awards to new executive hires.

Other Income and Expense

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Interest Income

Interest income is derived from investment earnings on our cash balances, primarily from money market funds. The increase in interest income of $5.5 million for the year ended December 31, 2024, was primarily due to an increase in average cash balance in our money market funds for the respective period, as compared to the prior year period.

Interest Expense

Interest expense for the year ended December 31, 2024, decreased by $45.7 million, as compared to the prior year period. The decrease was primarily as a result of the redemption on June 1, 2023, of the 10.25% Senior Secured Notes due March 2027, the repayment of the 3.04% Senior Secured Notes due June 2031, on August 24, 2023, and the partial repurchase of the 2.5% Green Notes, on May 29, 2024. The decrease was partially offset by an increase in interest expense related to the 3% Green Notes due June 2028, and the 3% Green Notes due June 2029, issued on May 16, 2023, and May 29, 2024, respectively.

Other income (expense), net

Other income (expense), net is primarily derived from net gain (loss) on failed sale-and-leaseback transactions and foreign currency transactions. Other income (expense), net for the year ended December 31, 2024, improved by $18.7 million, as compared to the prior year period, primarily as a result of a $17.4 million net gain on failed sale-and-leaseback transactions in the fiscal year 2024 and an increase in loss from foreign currency transactions of $2.7 million.

For additional information regarding the failed sale-and-leaseback transactions, please see Part II, Item 8, Financial Statements and Supplementary Data, Note 10 — Portfolio Financings.

Loss on Extinguishment of Debt

Loss on extinguishment of debt for the year ended December 31, 2024, was $27.2 million, which was recognized as a result of a partial repurchase on May 29, 2024, of the 2.5% Green Notes, and consisted of repayment of the 22.6% premium of $26.0 million and the write off of $1.2 million in debt issuance costs.

Loss on extinguishment of debt for the year ended December 31, 2023, was $4.3 million, which was recognized as a result of the redemption on June 1, 2023, of the 10.25% Senior Secured Notes due March 2027, and the repayment on August 24, 2023, of the 3.04% Senior Secured Notes due June 2031 as part of the PPA V Repowering, and included the repayment of the 4% premium upon redemption of the 10.25% Senior Secured Notes due March 2027 of $2.3 million and derecognition of debt issuance costs of $2.0 million.

Loss on revaluation of embedded derivatives

(Loss) gain on revaluation of embedded derivatives is derived from the change in fair value of our sales contracts of embedded EPP derivatives valued using historical grid prices and available forecasts of future electricity prices to estimate future electricity prices. (Loss) gain on revaluation of embedded derivatives for the year ended December 31, 2024, as compared to the prior year period, was immaterial.

Provision for Income Taxes

Income tax provision consists primarily of income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance for domestic deferred tax assets, including net operating loss and certain tax credit carryforwards. The income tax provision for the year ended December 31, 2024, decreased by $1.0 million, as compared to the prior year period. The change was primarily due to fluctuations in the effective tax rate on income earned by international entities.

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Net Income (Loss) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

Net income (loss) attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the flip structure of the PPA Entities as discussed below.

Net income (loss) attributable to noncontrolling interests for the year ended December 31, 2024, as compared to the prior year period, improved by $7.8 million due to a $6.9 million decrease in losses attributable to PPA V, which was sold in the third quarter of fiscal year 2023, and an $0.9 million increase in income related to Korean JV, which is allocated to our noncontrolling interest.

Critical Accounting Estimates

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the U.S. (“U.S. GAAP”). The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our discussion and analysis of our financial results under Results of Operations above are based on our audited results of operations, which we have prepared in accordance with U.S. GAAP. In preparing these consolidated financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses, and net income. On an ongoing basis, we base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are representative of estimation uncertainty and are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating the consolidated financial condition and results of operations.

The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, include:

Revenue Recognition

We apply Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). We identify our contracts with customers, determine our performance obligations and the transaction price, and after allocating the transaction price to the performance obligations, we recognize revenue as we satisfy our performance obligations and transfer control of our products and services to our customers. Most of our contracts with customers contain performance obligations with a combination of our solutions. For these performance obligations, we allocate the total transaction price to each performance obligation based on the relative standalone selling price using a cost-plus margin approach.

We generally recognize product revenue from contracts with customers at the point that control is transferred to the customers. This occurs when we achieve customer acceptance and typically occurs upon transfer of control to our customers, which depending on the contract terms is when the product is shipped and delivered to our customers, when the product is shipped and delivered and is physically ready for startup and commissioning (“Mechanical Completion”), or when the product is shipped and delivered and is turned on and operational (“COO”).

For certain installations, control of installations transfers to the customer over time, and the related revenue is recognized over time as the performance obligation is satisfied using the cost-to-total cost (percentage-of-completion) method. We use an

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input measure of progress to determine the amount of revenue to recognize during each reporting period when such revenue is recognized over time, based on the costs incurred to satisfy the performance obligation.

Service revenue is recognized ratably over the term of the first or renewed one-year service period. Given our customers’ renewal history, we anticipate that most of them will continue to renew their maintenance services agreements each year for the period of their expected use of Bloom products. The contractual renewal price may be less than the stand-alone selling price of the maintenance services and consequently the contract renewal option may provide the customer with a material right. We estimate the standalone selling price for customer renewal options that give rise to material rights using the practical alternative by reference to optional maintenance services renewal periods expected to be provided and the corresponding expected consideration for these services. This reflects the fact that our additional performance obligations in any contractual renewal period are consistent with the services provided under the standard first-year warranty. Where we have determined that a customer has a material right as a result of their contract renewal option, we recognize that portion of the transaction price allocated to the material right over the period in which such rights are exercised.

Given that we typically sell our products with a maintenance service agreement and have not provided maintenance services to a customer who does not have use of our products, standalone selling prices are estimated using a cost-plus approach. Costs relating to Bloom products include all direct and indirect manufacturing costs, applicable overhead costs and costs for normal production inefficiencies (i.e., variances). We then apply a margin to the products which may vary with the size of the customer, geographic region and the scale of the products deployment. Costs relating to installation include all direct and indirect installation costs. The margin we apply reflects our profit objectives relating to installation. Costs for maintenance service arrangements are estimated over the life of the maintenance contracts and include estimated future service costs and future material costs. Material costs over the period of the service arrangement are impacted significantly by the longevity of the fuel cells themselves. After considering the total service costs, we apply a lower margin to our service costs than to our products as it best reflects our long-term service margin expectations and comparable historical industry service margins. As a result, our estimate of our selling price is driven primarily by our expected margin on both the products and the maintenance service agreements based on their respective costs or, in the case of maintenance service agreements, the estimated costs to be incurred.

The total transaction price is determined based on the total consideration specified in the contract, including variable consideration in the form of a performance guaranty payment that represents potential amounts payable to customers. The expected value method is generally used when estimating variable consideration, which typically reduces the total transaction price due to the nature of the performance obligations to which the variable consideration relates. These estimates reflect our historical experience and current contractual requirements which cap the maximum amount that may be paid. The expected value method requires judgment and considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each performance obligation. Depending on the facts and circumstances, a change in variable consideration estimate will either be accounted for at the contract level or using the portfolio method.

For successful sales-leaseback arrangements, we recognize product and installation revenue upon meeting criteria, demonstrating we have transferred control to the customer (the Buyer-Lessor). When control of the Energy Server systems is transferred to the financier, and we determine the leaseback qualifies as an operating lease in accordance with ASC 842, Leases (“ASC 842”), we record an operating lease ROU asset and an operating lease liability, and recognize revenue based on the fair value of the Energy Server systems with an allocation to product revenue and installations revenue based on the relative standalone selling prices. We recognize as financing obligations any proceeds received to finance our ongoing costs to operate the Energy Server systems.

Valuation of Assets and Liabilities of the SK ecoplant Strategic Investment

On March 20, 2023, the Company amended its SPA (the “Amended SPA”) with SK ecoplant and simultaneously entered into the Loan Agreement (collectively “the Agreements”). On March 23, 2023, pursuant to the Amended SPA, we issued and sold to SK ecoplant shares of non-voting Series B RCPS. The Amended SPA triggered the modification of the equity-classified forward contract on Class A common stock, which resulted in the derecognition of the pre-modified fair value of the forward contract given to SK ecoplant. The Series B RCPS was accounted for as a stock award with liability and equity components. The liability component of the Series B RCPS was recognized at the redemption value net of issuance costs, and the equity component was recognized at its fair value on March 20, 2023, and represented the option of SK ecoplant to convert the Series B RCPS to Class A common stock (the “Conversion Option”). Pursuant to the Loan Agreement we had the option to draw on a loan from SK ecoplant, should SK ecoplant have sent a redemption notice to us under the Amended SPA. The Agreements provided us with a loan commitment asset from SK ecoplant.

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The liability component of the Series B RCPS, the Conversion Option, and the loan commitment asset were accounted for under the guidance of Topic 718, Compensation – Stock Compensation (“ASC 718”), and applicable subsections of ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). We used third-party valuation experts to provide us with (i) the pre-modified fair value of the forward contract given to SK ecoplant, (ii) the fair value of the issued Series B RCPS equity component, and (iii) the fair value of the loan commitment asset from SK ecoplant.

Pre-modified forward contract. We valued the forward contract as the difference between (i) our Class A common stock trading price adjusted by a discount for lack of marketability (“DLOM”) as of the date of Amended SPA (the “Valuation Date”) and (ii) the present value of the strike price, with further reduction associated with the expected outcome of the Second Tranche Closing.

Series B RCPS equity component (the Conversion Option). We valued the conversion feature of the Series B RCPS as a European-type call option under the guidance of ASC 718 by applying the Black-Scholes valuation model using inputs of the strike price, maturity, risk-free rate, and volatility. In addition, DLOM was applied to the Class A common stock price.

Loan commitment asset from SK ecoplant. We concluded that the loan commitment was a freestanding financial instrument as of the Valuation Date. We valued the loan commitment asset based on the difference between the present value of cash flows associated with a loan with a market-participant based interest rate (i.e., the rate for which the value of the hypothetical loan agreement equals the face value of the Loan Agreement) and the cash flows associated with the loan committed to by SK ecoplant, and applied a redemption probability to the difference. The Series B RCPS redemption probability was obtained from a lattice model used to value the Series B preferred stock. As of September 30, 2023, the loan commitment asset from SK ecoplant was derecognized as a result of automatic conversion of all shares of the Series B RCPS into shares of our Class A common stock.

We determined our final estimates of fair values based on internal reviews and in consideration of the estimates received. The objective of the fair value measurement of our estimate was to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We determined the reasonableness of our valuation methodology and underlying assumptions and reviewed the mathematical accuracy of the calculations before recording in our consolidated statements of operations and consolidated balance sheets.

For additional details about the transaction with SK ecoplant, please refer to Part II, Item 8, Note 17 — SK ecoplant Strategic Investment.

Modification of Performance-Based Stock Unit Awards

On December 18, 2024, the board of directors of the Company cancelled 1,150,000 Performance-Based Stock Unit (“PSU”) awards from the equity package the Chief Executive Officer (the “CEO”) received on May 12, 2021 (the “2021 PSU awards”), accompanied by the concurrent grant of replacement awards (the “Replacement Awards”) consisting of: (i) 1,500,000 PSU awards and (ii) 500,000 Restricted Stock Unit (“RSU”) awards (together, the “2025 Equity Package”), and (iii) a one-time award of 600,000 PSU awards (the “One-Time Grant”). The cancellation of the 2021 PSUs accompanied by the concurrent grant of the Replacement Awards was accounted for as a modification of the terms of the cancelled award according to ASC 718. On December 18, 2024, the Company recognized incremental compensation cost of $42.4 million measured as the excess of the fair value of the Replacement Awards over the fair value of the cancelled awards immediately before the terms were modified. This incremental compensation cost, along with the remaining unamortized original expense of the 2021 PSU awards of $2.3 million, will be recognized over the period from the modification date through the end of the requisite service period of the Replacement Awards of approximately 3 years.

The Company has engaged a third-party valuation expert to provide us with the fair value of the 2021 PSU awards under the original terms of the award in order to determine the incremental expense associated with issuing the Replacement Awards. To determine the pre-modification fair value of the 2021 PSU awards, a Monte Carlo simulation technique was used with the following assumptions: (i) valuation date of December 18, 2024, (ii) valuation date stock price of $23.46 per share of our Class A common stock, (iii) simulation term of 5.4 years, (iv) expected volatility of 93.83%, (v) risk-free interest rate of 4.36%, and (vi) no expected dividend yield. In order to allow for the impact of the post-vesting restrictions, represented by a two-year holding period, on the fair value of the 2021 PSU awards immediately before modification, the third-party valuation expert estimated the magnitude of the discount for illiquid awards of 10% using a Finnerty Method.

The cancellation of the 2021 PSU awards on December 18, 2024, was considered a Type I modification because the 2021 PSU awards were expected to vest under both the original award terms and the terms of the Replacement Awards.

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Income Taxes

We account for income taxes using the liability method under ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on net operating loss carryforwards, research and development credit carryforwards and temporary differences resulting from the different treatment of items for tax and financial reporting purposes. Deferred items are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. This determination is based on expected future results and the future reversals of existing taxable temporary differences. Furthermore, uncertain tax positions are evaluated by management and amounts are recorded when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits. Significant judgement is required throughout management’s process in evaluating each uncertain tax position including future taxable income expectations and tax-planning strategies to determine whether the more likely than not recognition threshold has been met. We have provided a full valuation allowance on our domestic deferred tax assets because we believe it is more likely than not that our deferred tax assets will not be realized.

Principles of Consolidation

Our consolidated financial statements include the operations of our subsidiaries in which we have a controlling financial interest. We use a qualitative approach in assessing the consolidation requirements for our VIEs. This approach focuses on determining whether we have the power to direct those activities that significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIEs. The consideration for VIE consolidation is a complex analysis that requires us to determine whether we are the primary beneficiary and therefore have the power to direct activities which are most significant to the VIEs.

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Overview

Description of Bloom Energy

Our mission is to make clean, reliable energy affordable for everyone in the world. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy.

Our technology, invented in the U.S., is one of the most advanced electricity and hydrogen producing technologies on the market today. Our fuel-flexible Bloom Energy Servers can use biogas, hydrogen, natural gas, or a blend of fuels to create resilient, sustainable and cost-predictable power at typically significantly higher efficiencies than traditional, combustion-based resources. In addition, our same solid oxide platform that powers our fuel cells can be used to create hydrogen with our Bloom Electrolyzer. Hydrogen is increasingly recognized as a critically important tool for the decarbonization of the energy economy. Our enterprise customers include some of the largest multinational corporations in the world. We also have strong relationships with some of the largest utility companies in the U.S. and the Republic of Korea, with a growing presence in various international markets.

At Bloom Energy, we look forward to a net-zero future. Our technology is designed to help enable this future by delivering reliable, low-carbon electricity in a world facing unacceptable levels of power disruptions. Our resilient platform has kept electricity available for our customers through hurricanes, earthquakes, typhoons, forest fires, extreme heat and grid failures. Unlike traditional combustion power generation, our platform is community-friendly and designed to significantly reduce emissions of criteria air pollutants. We have made tremendous progress towards renewable fuel production through our biogas, hydrogen and electrolyzer programs, and we believe that we are well-positioned as a core platform and fixture in the new energy paradigm to help organizations and communities achieve their net-zero objectives.

We market and sell our Energy Servers primarily through our direct sales organization in the U.S., and we also have direct and indirect sales channels internationally. Recognizing that deploying our solutions requires a significant financial commitment, we have developed a number of financing options to support sales of our Energy Servers to customers who lack the financial capability to purchase our Energy Servers directly, and who may prefer to finance the acquisition using third-party financing or to contract for our services on a pay-as-you-go model.

Our typical target commercial or industrial customer has historically been either an investment-grade entity or a customer with investment-grade attributes such as size, assets and revenue, liquidity, geographically diverse operations and general financial stability. We have also expanded our product and financing options to below-investment-grade customers and have also expanded internationally, including deployments on a wholesale grid. Given that our customers are typically large institutions with multi-level decision-making processes, we generally experience a lengthy sales process. Once the sale is completed, we have a large multi-disciplined team to facilitate the deployment of our projects in a wide variety of locations under a myriad of regulatory environments.

Strategic Investment

On October 23, 2021, we entered into a Securities Purchase Agreement (the “SPA”) with SK ecoplant in connection with our strategic partnership. Pursuant to the SPA, on December 29, 2021, we sold to SK ecoplant 10,000,000 shares of our zero coupon, non-voting redeemable convertible Series A preferred stock, par value $0.0001 per share (the “Series A RCPS”), at a purchase price of $25.50 per share for an aggregate purchase price of $255.0 million (the “Initial Investment”). On November 8, 2022, each share of Series A RCPS was converted into 10,000,000 shares of Class A common stock.

Simultaneous with the execution of the SPA, we and SK ecoplant executed an amendment to the Joint Venture Agreement (the “JVA”), an amendment and restatement to our Preferred Distribution Agreement (“PDA Restatement”), and a new Commercial Cooperation Agreement regarding initiatives pertaining to the hydrogen market and general market expansion for the Bloom Energy Server and Bloom Energy Electrolyzer.

On March 20, 2023, SK ecoplant entered into an amendment of the SPA (the “Amended SPA”) with us, pursuant to which on March 23, 2023, we issued and sold to SK ecoplant 13,491,701 shares of non-voting Series B redeemable convertible preferred stock, par value $0.0001 per share (the “Series B RCPS”), at a purchase price of $23.05 per share for cash proceeds of $311.0 million, excluding issuance cost of $0.5 million.

On March 20, 2023, in connection with the Amended SPA, we also entered into a Shareholders’ Loan Agreement with SK ecoplant (the “Loan Agreement”), pursuant to which we had the option to draw on a loan from SK ecoplant with a

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maximum principal amount of $311.0 million, a maturity of five years and an interest rate of 4.6%, should SK ecoplant have sent a redemption notice to us under the Amended SPA.

On September 15, 2023, we entered into the Amended and Restated JVA and the Share Purchase Agreement (together, the “Amended JV Agreements”) with SK ecoplant which changed the share of our voting rights in the Korean joint venture to 40% and increased the scope of assembly done by the joint venture facility in the Republic of Korea to full assembly.

On September 23, 2023, all 13,491,701 shares of the Series B RCPS were automatically converted into shares of our Class A common stock pursuant to the Certificate of Designation, dated as of March 20, 2023, setting forth the rights, preferences, privileges, and restrictions of the Series B RCPS, as amended by the Certificate of Amendment to the Certificate of Designation, dated as of April 18, 2023. Upon conversion of all the Series B RCPS into shares of our Class A common stock, SK ecoplant became a related party to us with the beneficial ownership of 10.5% of our outstanding Class A common stock.

For additional details about the transaction with SK ecoplant, please see Part II, Item 8, Note 17 — SK ecoplant Strategic Investment, and for more information about our joint venture with SK ecoplant, please see Part II, Item 8, Note 11 — Related Party Transactions.

Certain Factors Affecting our Performance

Energy Market Conditions

The global energy transition to a zero-carbon environment has created new challenges and opportunities for utilities, suppliers of energy solutions and customers. Shifts and uncertainty in market and regulatory dynamics and corporate and governmental policies are currently impacting the selling process and extending sales cycles and timelines for our natural gas-, biogas- and hydrogen-related products. Increasing electricity rates, decreasing energy reliability, and delays in the development of transmission infrastructure and grid interconnection have led to increased customer interest in our power solutions. At the same time, natural gas supply and pricing concerns due to geopolitical stresses and resulting market changes as well as increasing focus on sustainability targets have led to increased caution from potential customers. The increased use of renewable power generation and the weather effects of climate change have exacerbated aging grid fragilities, increased the occurrence of power outages, created grid transmission shortages, and lengthened already extensively delayed interconnection cycles. Low- and zero-carbon sources of baseload energy have also been curtailed and even banned in some locations, forcing utilities, states and countries to revisit less clean sources of baseload and intermediate power in an attempt to ensure energy reliability. This supply and demand mismatch globally has threatened energy security reliability, reduced the availability of energy, and increased the cost of energy.

Bloom’s power solutions enable customers to address these energy market challenges by offering fuel flexible solutions that are designed to provide cost predictable, resilient, and reliable energy in a timely fashion. As customers and utilities navigate the energy transition and evolving landscape, the ability of our power solutions to fit their economic, regulatory, and policy needs depends on a number of factors, including natural gas availability and pricing, electrical interconnection needs and availability, redundant back up power requirements, cost requirements, and sustainability profile. Even in those situations where the time to power from the utility is years away in light of the need to build out energy transmission infrastructure, these factors still may impact a customer’s buying decision. For example, although our power generation solutions can operate as microgrids, independent from the grid, if a customer desires back up power or a “grid parallel” solution in combination with the Bloom microgrid, required interconnection studies and lengthy interconnection queues remain, eroding the time to power value proposition. According to the Lawrence Berkeley National Lab, U.S. interconnection queue delays are growing, with a forty percent year over year increase in 2022. The typical project interconnection process for large scale projects grew to five years in 2022 compared to three years in 2015 and two years in 2008. In addition, many data center customers and other large power users have signed exclusivity arrangements with their utilities, and this often creates a more complicated dynamic for them to move to a behind the meter solution. To add to this, the rising cost of natural gas, increases in gas distribution rates, limited availability of natural gas supply, as well as disruptions to the world gas markets, has increased the cost of our power solutions for customers and, in certain cases where there is a lack of fuel supply, a complete inability to operate the systems. In the U.S., the lack or slow development of pipeline infrastructure is impacting the timing of customers being able to take advantage of our power solution opportunities. In certain jurisdictions in the U.S. and Europe, natural gas bans have been enacted that prevent the use of our power solutions unless alternative fuels are available. In addition, there is a growing hesitancy among potential customers to purchase our power solutions to run on natural gas. Increasingly, customers want a zero-carbon solution for power, and, although our power solutions are designed to run on biofuels or hydrogen (in addition to natural gas) and help our customers achieve their sustainability goals, these fuels continue to have very limited availability and, for most customers, are not yet economical. This impetus by customers to use zero-carbon solutions today, combined with the current lack of availability of zero-carbon fuels, is adversely impacting our power solution selling opportunities. In addition, many of our

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potential data center and industrial customers are pursuing greenfield opportunities where the development cycle is long and laden with permitting requirements and the uncertainty of these factors is leading to a more difficult customer decision-making process and longer sales cycles. For example, in the fourth quarter of 2022, we entered into a PPA contract for the sale of electricity to a customer for three greenfield sites that were at various stages of development (the “Project”). The first site was expected to be operational with power by the third quarter of 2024. We sold 73 megawatts of the Energy Servers to a Distributor with the expectation that the Distributor would support installation on the Project and install the Energy Servers at the three Project sites. The Project is currently delayed, and we are in discussions with the end customer regarding if and how to move forward. If the Project continues to be delayed or is terminated we may work with the Distributor to deploy the Energy Servers at our future installation sites with a different customer or customers or the Distributor may decide to reduce future orders or cancel existing orders until the Energy Servers are deployed, and either action could materially and adversely affect our product revenue and the timing of the associated cash flows in 2024.

Corporate procurement policies are also undergoing change that creates uncertainty; while some customers are increasingly focused on decarbonizing their own direct energy supply, including aligning the timing of their zero-carbon power generation with their energy consumption, others are shifting to prioritize overall carbon emissions from the energy system, both of which are impacting our sales.

The regulatory environment for energy solutions continues to shift. In South Korea, the government recently moved to a new, government-run bidding process for fuel cell purchases, which has impacted and may continue to impact demand for our power solutions. In the U.S., the ITC for fuel cells running on a non-zero carbon fuel currently expires at the end of 2024. In Ireland, which is a large data center market, a directive from the Minister of the Department of the Environment, Climate and Communications to restrict grid connections to data centers and other large power users, along with a halt in high-pressure gas installations has delayed our selling activities in Ireland. Delays in adoption of Renewable Fuel Standard regulations in the U.S. for the use of biogas to generate electricity for electric vehicles, and minimal governmental focus on utilization of biogas outside of its direct use by methane-fueled vehicles, have created uncertainty in prospects for broader biogas availability for industrial uses, including our power solutions. In addition, in most jurisdictions, air permits and various land use permits are required for installation of our solutions over a certain amount of mega-watts, and generally the length of time to obtain these permits increased, while the level of certainty of issuance has decreased and if issued, the cost of compliance requirements can be cost prohibitive. We have experienced a reluctance in certain states to issue permits for gas generation equipment. Even if issued, states may require a blend of costly renewable fuels or other measures to advance climate goals. This has adversely impacted our selling activities.

Significant governmental interest, investment and stimulation of clean hydrogen in the U.S., Europe and in many other regions across the globe have not yet had significant impacts on demand for hydrogen. To date, while the number of proposed hydrogen production projects has grown rapidly, only a small fraction has reached the final investment decision (FID) stage, and an even smaller fraction have been deployed. In addition, the infrastructure needed to transport hydrogen, whether through pipelines or maritime or land-based tankers, is currently only sufficient for existing uses, and has not begun to be extended for anticipated future uses, with hydrogen blending and other approaches remaining at pilot stages. It remains unclear whether regulators in some jurisdictions will allow hydrogen to be introduced into gas distribution systems, which could effectively preclude or severely limit our ability to transport hydrogen from the point of production to the point of consumption.

All of these factors have lengthened the selling cycles for our electrolyzer product and power solutions, and we have experienced delays in our anticipated bookings. Our revenue, margins, and cash flow in any given year are largely dependent on bookings during the prior year. Historically, the majority of our bookings have occurred in the second half of the year, with a significant portion occurring in the fourth quarter. That trend did not continue to the same degree in 2023. If a substantial portion of our anticipated bookings continue to be delayed, our future revenue, margins and cash flow could be materially adversely impacted.

Supply Chain Constraints

We continue to see effects from global supply chain tightness due to the current inflationary environment, war in Ukraine, and trade tensions between the U.S. and China. We are not aware of, and do not expect any significant direct impact on our business or supply chain from the Israel-Gaza Strip armed conflict. While we have not experienced any significant component shortages to date, we are facing pressures from inflation. These dynamics could worsen as a result of continued geopolitical instability. In the event we are unable to mitigate the impacts of delays and/or price increases in raw materials and components, it could delay the manufacturing and installation, and increase the costs of, our products, which would adversely impact our cash flows and results of operations, including our revenues and gross margin. We expect these supply chain challenges to continue in the short term.

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Customer Financing Constraints

Our ability to obtain financing for our Energy Servers depends partially on the creditworthiness of our customers, and deterioration of our customers’ credit ratings can impact the financing for their use of our Energy Servers. Regional banking and financial institution instability, such as the failure of Silicon Valley Bank in the first quarter of 2023, may make it more difficult for our customers to obtain financing. Rising interest rates have also increased the cost of financing for our customers. As interest rates rise, the financiers of our installations demand a higher rate of return, which puts pressure on our margins. We continue to work on obtaining the financing required for our 2024 installations, but if we are unable to secure such financing, our revenue, cash flow, and liquidity could be materially impacted. We expect that in the U.S., the IRA and the transferability of tax credits, should make the financing market more robust in 2024, thereby easing some of these customer financing constraints, but this cannot be assured.

Manufacturing and Labor Market Constraints

As recently as 2022, we experienced impacts from labor shortages and challenges in hiring for our manufacturing facilities. While these constraints abated in 2023 and we reduced headcount as part of the Restructuring Plan adopted in September 2023, we may still experience difficulties with hiring and retention, and may face additional labor shortages in the future. The Restructuring Plan included (i) an optimization of our workforce across multiple functions, (ii) a relocation of a portion of our R&O department of our manufacturing and warehousing facility in Newark, Delaware, to Mexico, and (iii) a closure of a manufacturing, warehousing, R&D facility in Sunnyvale, California. According to the Restructuring Plan, 74 full-time employees and 48 contractors separated from the Company in September 2023. An additional 71 full-time employees and 8 contractors separated from the Company in October 2023. Also, in October 2023 we communicated to 61 full-time manufacturing employees about their forthcoming separation from the Company. These employees were sent on paid leave and left the Company in January 2024. For additional information, please see Part II, Item 8, Note 12 — Restructuring. In addition, the current inflationary environment has led to rising wages and labor costs as well as increased competition for labor. In the event these constraints return, and we are unable to continue to mitigate the impacts of these challenges, it could delay the manufacturing and installation of our Energy Servers or Electrolyzers, and we may be unable to meet customer demand, which could adversely impact our cash flows and results of operations, including our revenues and gross margin.

Installations and Maintenance of Energy Servers

In 2023, our installation projects experienced some delays relating to, among other things, permitting, utility delays, and access to customer facilities. However, these delays did not significantly impact our revenue.

If we are delayed in or unable to perform maintenance, our previously installed Energy Servers would likely experience adverse performance impacts, including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. Further, due to the nature of our Energy Servers, if we are unable to replace worn parts in accordance with our standard maintenance schedule, we may incur higher costs in the future. During the year ended December 31, 2023, we experienced no significant delays in servicing our Energy Servers.

Environmental, Social and Governance (“ESG”)

We are committed to a goal of providing consistent returns to our stockholders while maintaining a strong sense of good corporate citizenship that places a high value on the environment, welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole. We believe that prioritizing, improving, and managing our ESG related risks, opportunities, and programs help us to better create long-term value for our investors.

In April 2023, we released our 2022 Sustainability Report, Advancing the Mission of Decarbonization (the “Sustainability Report”), using generally accepted ESG frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Sustainability Report also utilized certain Global Reporting Initiative standards and was mapped against the United Nations Sustainable Development Goals. We plan to issue a sustainability report on an annual basis.

Our mission is to make clean, reliable energy affordable for everyone in the world. To that end, we strive to empower businesses and communities to responsibly take charge of their energy while addressing both the causes and consequences of climate change. We aim to serve our customers with products that are resilient, providing uninterrupted power with predictable pricing over the long-term, while addressing sustainability issues by developing an increasingly broad portfolio of solutions for decarbonization.

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The Sustainability Report can be found on our website at https://www.bloomenergy.com/sustainibility. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Inflation Reduction Act of 2022

On August 16, 2022, President Biden signed into law the IRA. It contains provisions which have a significant impact on the development and financing of clean energy projects in the U.S. The IRA includes the extension and expansion of the ITC and the Production Tax Credit (the “PTC”) and the addition of expanded tax credits for other technologies and for manufacturing of clean energy equipment as well as terms allowing parties to more easily monetize the tax credits. The IRA also includes some targeted bonus credit incentives intended to encourage development in low-income communities, the use of domestically produced materials, and compliance with certain labor-related requirements.

The IRA contains several credits and incentive provisions that may be relevant to us, which we have summarized below:

•Section 48 – the ITC, which provides a tax credit based on capital investment in a variety of renewable and conventional energy technologies to incentivize investment in new energy resources and more efficient use of fuel, including fuel cell technology;

•Section 48C – Qualified Advanced Energy Project (reenacted), which provides the ITC through a competitive application process administered through the Department of Energy equal to 6% or 30% of the investment with respect to advanced energy projects;

•Section 45V – Clean Hydrogen, which provides a PTC of up to $3 per kg of qualified clean hydrogen over a 10-year credit period for the production of qualified clean hydrogen at a qualified facility in the U.S.; and

•Section 45Q – Carbon Capture Sequestration, which provides a credit ranging from $12-$17 or $60-$85 per metric ton based on the amount of carbon oxides captured from a qualified facility over a 12-year period.

We believe that the programs and credits included in the IRA align well with our business model and could provide significant benefits with respect to incentivizing the purchase of our current product offerings and technologies. In particular, the IRA authorized a competitive process to apply for credits to expand or enhance manufacturing capacity under IRC 48C, and we have applied for a credit under this provision; at this time, we cannot be assured our application will ultimately be accepted or result in our receipt of credits. Also, the new PTC for qualified clean hydrogen and credit for carbon capture could result in increased demand for commercial solutions to hydrogen production technology and carbon capture, including our solid oxide fuel-cell based Electrolyzer and Energy Servers.

New Foreign Tax Rules

In 2021 the OECD announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. Subsequently multiple sets of administrative guidance have been issued. Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in. However, no material impact to our financial statements is expected due to the relatively small operations outside the U.S.

Liquidity and Capital Resources

We raised cash and supplemented liquidity through financing activities with SK ecoplant in the first quarter of 2023 and issuing the 3% Green Convertible Senior Notes due June 2028 (the “3% Green Notes”) in the second quarter of 2023. At the same time, we increased our working capital spent. In addition, we expanded our warehouse space in Delaware and California to store more inventory to meet the anticipated increase in demand. If this increase in demand does not materialize to the degree we anticipated, our liquidity and financial condition may be adversely impacted.

On March 20, 2023, we entered into the Amended SPA, with SK ecoplant, pursuant to which we issued and sold to SK ecoplant 13,491,701 shares of Series B RCPS for cash proceeds of $311.0 million, excluding issuance cost of $0.5 million.

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On March 20, 2023, in connection with the Amended SPA, we also entered into the Loan Agreement, pursuant to which we were entitled to draw down on a loan from SK ecoplant with a maximum principal amount of $311.0 million, if SK ecoplant sent a redemption notice to us under the Amended SPA or otherwise had reduced any portion of its current holdings of our Class A common stock. On September 23, 2023, all 13,491,701 shares of the Series B RCPS were automatically converted into shares of our Class A common stock. For further information on the strategic investment with SK ecoplant, see Part II, Item 8, Note 17 — SK ecoplant Strategic Investment.

On May 16, 2023, we issued the 3% Green Notes with an aggregate principal amount of $632.5 million due June 2028, unless earlier repurchased, redeemed, or converted, resulting in net cash proceeds of $612.8 million. On June 1, 2023, we used approximately $60.9 million of the net proceeds from this offering to redeem all of the outstanding principal amount of our 10.25% Senior Secured Notes due March 2027. The redemption price equaled 104% of the principal amount redeemed plus accrued and unpaid interest. We also used approximately $54.5 million of the net proceeds from the offering to purchase the privately negotiated capped call options (the “Capped Calls”). The remaining portion of the 3% Green Notes was planned to be used for working capital investment and general corporate purposes.

On August 24, 2023, as part of the PPA V Upgrade, we paid off the outstanding balance and related accrued interest of $118.5 million and $0.5 million, respectively, of our 3.04% Senior Secured Notes due June 30, 2031.

For further information on issuance of 3% Green Notes, redemption of our 10.25% Senior Secured Notes, and repayment of 3.04% Senior Secured Notes, please see Part II, Item 8, Note 7 — Outstanding Loans and Security Agreements.

As of December 31, 2023, we had cash and cash equivalents of $664.6 million. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds of $601.1 million. We maintain these balances with high credit quality counterparties, regularly monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.

As of December 31, 2023, we had $842.0 million of recourse debt, $4.6 million of non-recourse debt and $9.0 million of other long-term liabilities. As of December 31, 2023, all of our debt was classified as long-term liabilities. For a complete description of our outstanding debt, please see Part II, Item 8, Note 7 — Outstanding Loans and Security Agreements.

The combination of our cash and cash equivalents and cash flow to be generated by our operations is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient or are not received in a timely manner to satisfy our near-term or future cash needs, we may require additional capital from equity or debt financings to fund our operations, our manufacturing capacity, product development, and market expansion requirements and to timely respond to competitive market pressures or strategic opportunities, among other things. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. During the year ended December 31, 2023, we factored $291.4 million of accounts receivable. However, we may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. Although currently we do not have any floating-rate notes on the balance sheet, rising interest rates may increase our overall cost of capital, if and when we refinance our fixed-rate convertible notes. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences, and privileges senior to those of holders of our common stock.

Our future capital requirements depends on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds and the need for additional manufacturing space, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our products, our ability to secure financing for customer use of our Energy Servers, the timing of installations and of inventory build in anticipation of future sales and installations, and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing. Failure to obtain this financing in future quarters may affect our results of operations, including our revenues and cash flows.

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A summary of our consolidated sources and uses of cash, cash equivalents, and restricted cash was as follows (in thousands):

Net cash provided by (used in) our PPA Entities (as defined below), which are incorporated into the consolidated statements of cash flows, was as follows (in thousands):

1 The PPA Entities’ operating and financing cash flows are a subset of our consolidated cash flows and represent the stand-alone cash flows prepared in accordance with U.S. GAAP. Operating activities consist principally of cash used to run the operations of the PPA Entities, the purchase of Energy Servers from us, and principal reductions in loan balances. Financing activities consist primarily of changes in debt carried by our PPAs, and payments from and distributions to noncontrolling partnership interests. We believe this presentation of net cash provided by (used in) PPA activities is useful to provide the reader with the impact on consolidated cash flows of the PPA Entities in which we had only a minority interest. In fiscal 2022 we sold PPA IIIa and PPA IV entities. In August 2023, we sold our last consolidated PPA entity — PPA V. For more details, please see Part II, Item 8, Note 10 — Portfolio Financings.

Operating Activities

Our operating activities consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. Net cash used in operating activities during the year ended December 31, 2023, was $372.5 million, an increase of $180.8 million compared to the prior year period. The increase in cash used in operating activities during the year ended December 31, 2023, as compared to the prior year period, was primarily a result of an increase in working capital of $379.4 million due to (1) an increase in inventory levels of $231.7 million to support future demand, (2) an increase in accounts receivable of $89.8 million, which was primarily due to the timing of revenue transactions and corresponding collections, and (3) the timing of payments to vendors.

Investing Activities

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity. We expect to continue such investing activities as our business grows. Cash used in investing activities during the year ended December 31, 2023, was $83.7 million, a decrease of $33.1 million compared to the prior year period and was primarily due to the decrease in expenditures on tenant improvements for a newly leased engineering and manufacturing building in Fremont, California, which opened in July 2022. We expect to continue to make capital expenditures over the next few quarters to expand production capacity at our new manufacturing facility in Fremont, California, which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.

Financing Activities

Historically, our financing activities consisted of borrowings and repayments of debt, proceeds and repayments of financing obligations, distributions paid to noncontrolling interests, contributions from noncontrolling interests, and proceeds from the issuances of our common stock. Net cash provided by financing activities during the year ended December 31, 2023, was $683.3 million, an increase of $472.0 million compared to the prior year period. The increase was primarily due to (1) proceeds from the issuance of the 3% Green Notes of $612.8 million, net of paid issuance costs of $19.7 million, (2) proceeds from the issuance of redeemable convertible preferred stock of $310.6 million, net of paid issuance costs of $0.4 million, as a

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result of SK ecoplant Second Tranche Closing, (3) proceeds from the issuance of common stock of $16.9 million, (4) a contribution from noncontrolling interest of $7.0 million, (5) proceeds from financing obligations of $5.0 million, and (6) proceeds from issuance of non-recourse debt of $4.6 million. This was partially offset by (1) a settlement of the 3.04% Senior Secured Notes due June 30, 2031 of $127.4 million, (2) repayment of 10.25% Senior Secured Notes due March 2027 of $64.0 million, (3) purchases of Capped Calls of $54.5 million, (4) repayment of financing obligations of $18.4 million, and (5) the acquisition of all interest in the PPA V for $6.9 million net of distributions to Intel’s noncontrolling interest of $2.3 million.

We believe we have sufficient capital to operate our business over the next 12 months. Our working capital was strengthened with the supplemented liquidity through financing activities with SK ecoplant in the first quarter of 2023 and issuing the 3% Green Notes in the second quarter of 2023. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Part II, Item 8, Note 7 — Outstanding Loans and Security Agreements, and Part I, Item 1A, Risk Factors — Risks Related to Our Liquidity — Our indebtedness, and restrictions imposed by the agreements governing our outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs, for more information regarding the terms of and risks associated with our debt.

Purchase and Financing Options

Overview

In order to appeal to the largest variety of customers, we make available several options to them. Both in the U.S. and abroad, we sell the Energy Servers directly to customers. In the U.S., we also enable customers’ use of the Energy Servers through a power purchase arrangement or a managed services financing (whereby we sell and lease back the Energy Servers in order to supply energy to our customers), both made possible through third-party financing arrangements.

Often our offerings take advantage of local incentives. In the U.S., our financing arrangements are structured to optimize both federal and local incentives, including the ITC and accelerated depreciation. Internationally, our sales are made primarily to distributors who sell to, and install for, customers; these deals are also structured to use local incentives applicable to our Energy Servers. Increasingly, we use trusted installers in the U.S. to generate transactions.

Whichever option is selected by a customer in the U.S. or internationally, the contract structure will include obligations (“O&M Obligations”) on our part to operate and maintain the Energy Server (“O&M Agreement”). The O&M Agreement may either be (i) for a one-year period, subject to annual renewal at the customer’s option, which historically are almost always renewed year-over-year, or (ii) for a fixed term. In the U.S., the contract structure often includes obligations on our part to install the Energy Servers (“Installation Obligations”). Consequently, our transactions may generate revenue from the sale of the Energy Servers and electricity, performance of the O&M Obligations, and performance of the Installation Obligations.

In addition to customary workmanship and materials warranties offered with the sale of Energy Servers, we provide warranties and guaranties regarding the efficiency and output of our Energy Servers to the customer and, in certain financing structures, to the financing parties as well. We refer to a “performance warranty” as an obligation to repair or replace the Energy Servers as necessary to return performance of the Energy Servers to the warranted performance level. We refer to a “performance guaranty” as an obligation to make a payment to compensate for the failure of the Energy Servers to meet the guaranteed performance level. Our obligation to make payments under a performance guaranty is always contractually capped.

Energy Server Sales

There are customers who purchase our Energy Servers directly from us pursuant to customary equipment sales contracts. In connection with the purchase of the Energy Servers, the customers also enter into a contract with us for the O&M Obligations. The customer may elect to engage us to provide the Installation Obligations or engage a third-party provider. Internationally, sales often occur through distribution arrangements pursuant to which local construction service providers perform the Installation Obligations, as is the case in the Republic of Korea, and we contract directly with the customer to provide the O&M Obligations.

Customer Financing Options

With respect to the third-party financing options in the U.S., a customer may choose to contract for the purchase of electricity generated by the Energy Servers in exchange for a scheduled dollars per kilowatt hour rate (a “Power Purchase Agreement” or “PPA”), or the use of our Energy Servers owned by a financing party in exchange for a capacity-based payment and, in some cases, an output-based payment based on kw/hour (each, a “Managed Services Agreement”).

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PPAs are typically financed on a portfolio basis. In the past, we have financed portfolios through tax equity partnerships, acquisition financings and direct sales to investors (each, a “Portfolio Financing”). Capacity-based payments in a Managed Services Agreement are required regardless of the level of performance of the Energy Server. Managed Services Agreements are then financed pursuant to a sale-leaseback with a financial institution (a “Managed Services Financing”).

In the U.S., our capacity to offer our Energy Servers through either of these financed arrangements depends in large part on the ability of financing parties to optimize the tax benefits associated with the Energy Servers, such as the ITC or accelerated depreciation. Interest rate fluctuations, and internationally, currency exchange rate fluctuations, may also impact the attractiveness of any financing offerings for our customers. Our ability to finance a PPA or a Managed Services Agreement is also related to, and may be limited by, the creditworthiness of the customer. Additionally, a Managed Services Financing option is limited by a customer’s willingness to commit to making the capacity-based payment to a financing party regardless of performance.

In each of our financing options, we typically perform the functions of a project developer, including identifying end customers and financiers, leading the negotiations of the customer agreements and financing agreements, securing all necessary permitting and interconnections approvals, and overseeing the design and construction of the project up to and including commissioning the Energy Servers. Increasingly, however, we are making sales to third-party developers.

Each of our financing transaction structures is described in further detail below.

Portfolio Financings

In the past, we financed the Energy Servers subject to our PPAs through two types of Portfolio Financings. In one type of transaction, we sold a portfolio of PPAs to a tax equity partnership in which we held a managing member interest (such partnership in which we hold an interest, a “PPA Entity”). In these transactions, we sold the portfolio of the Energy Servers to a limited liability project company (such portfolio owner, a “Portfolio Company”) of which the PPA Entity was the sole member. Whether an investor, a tax equity partnership, or a single member limited liability company, the Portfolio Company was the entity that directly owned the portfolio. The Portfolio Company sold the electricity generated by the Energy Servers contemplated by the PPAs to the customers. We recognized revenue as the electricity was produced. Our current practices no longer contemplate these types of transactions. In fiscal 2023 we completed the process of restructuring our PPA Entities by (i) acquiring the outstanding equity interests of our previous investors and tax equity partners, (ii) selling 100% of the equity interests in the PPA Entities or the Portfolio Companies to new investors or tax equity partnerships in which we do not have an equity interest, and (iii) entering into new equipment supply and installation agreements and related agreements to upgrade and/or replace the Energy Servers. In August 2023, we sold our last consolidated PPA Entity, 2015 ESA Project Company, LLC (“PPA V”), in connection with the repowering of its portfolio of Energy Servers. For further discussion, see Part II, Item 8, Note 10 — Portfolio Financings.

Moving forward, we plan to finance PPAs by selling a portfolio of Energy Servers or a Portfolio Company to an investor or tax equity partnership (in either case, an “Equity Investor”) in which we do not have an equity interest (a “Third-Party PPA”). The Equity Investor owns the Portfolio Company or the Energy Servers directly, and in each case, sells the electricity generated by the Energy Servers contemplated by the PPAs to the customers.

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When we finance a portfolio of the Energy Servers and the PPAs through a Portfolio Financing, we typically enter into, with the Portfolio Company or directly with the Equity Investor, as the case may be, a sale, engineering, procurement, and construction agreement (“EPC Agreement”) and an O&M Agreement, including the provision of performance warranties and guaranties. As owner of the portfolio of the PPAs and related Energy Servers, the portfolio owner receives all customer payments generated under the PPAs, the benefits of the ITC and accelerated tax depreciation, and any other available state or local benefits arising out of the ownership or operation of the Energy Servers, to the extent not already allocated to the customer under the PPA.

The sales of our Energy Servers in connection with a Portfolio Financing have many of the same terms and conditions as a direct sale. Payment of the purchase price is generally broken down into multiple installments, which may include payments prior to shipment, upon delivery, when the Energy Servers are physically ready for startup and commissioning (i.e., “Mechanical Completion”), and upon substantial completion (i.e., “Commencement of Operations”, “COO”).

Obligations to Portfolio Companies

Our Portfolio Financings involve many obligations on our part to the Portfolio Company or Equity Investor, as applicable. These obligations are set forth in the applicable EPC Agreements and O&M Agreements, and may include some or all of the following obligations:

•designing, manufacturing, and installing the Energy Servers, and selling such Energy Servers to the Portfolio Company or Equity Investor;

•obtaining all necessary permits and other governmental approvals necessary for the installation and operation of the Energy Servers, and maintaining such permits and approvals throughout the term of the EPC Agreements and O&M Agreements;

•operating and maintaining the Energy Servers in compliance with all applicable laws, permits and regulations;

•satisfying the performance warranties and guaranties set forth in the applicable O&M Agreements; and

•complying with any other specific requirements contained in the PPAs with customers.

The O&M Agreement grants the Equity Investor the right to obligate us to repurchase the Energy Servers in the event the Energy Servers fail to comply with the performance warranties and guaranties in the O&M Agreement and we do not cure such failure in the applicable warranty cure period, or that a PPA terminates as a result of any failure by us to perform the obligations in the O&M Agreement.

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In some Portfolio Financings, we have also agreed to pay liquidated damages to the applicable Portfolio Company or Equity Investor, as the case may be, in the event of delays in the manufacture, installation, and commissioning of our Energy Servers, either in the form of a cash payment or a reduction in the purchase price for the applicable Energy Servers.

Administration of Portfolio Companies

In August 2023, we sold our last consolidated PPA Entity, PPA V. Before the sale, as we had determined that we were the primary beneficiary of this VIE, we consolidated 100% of the assets, liabilities, and operating results of PPA V, including the Energy Servers and lease income, in our consolidated financial statements. We recognized the Equity Investors’ share of the net assets of the investment entity as noncontrolling interests in the subsidiary in our consolidated balance sheets. We recognized the amounts that are contractually payable to these investors in each period as distributions to noncontrolling interests in our consolidated statements of changes in stockholders’ equity (deficit). PPA V contained debt that was non-recourse to us.

Our consolidated statements of cash flows reflect cash received from the Equity Investors in PPA V as proceeds from investments by noncontrolling interests in the subsidiary. Our consolidated statements of cash flows also reflect cash paid to these investors as distributions paid to noncontrolling interests in the subsidiary. We reflect any unpaid distributions to these Equity Investors in PPA V as distributions payable to noncontrolling interests in the subsidiary on our consolidated balance sheets.

For further information about our Portfolio Financings, see Part II, Item 8, Note 11 — Portfolio Financings.

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Managed Services Financing

Under our Managed Services Financing option, we enter into a Managed Services Agreement with a customer for a certain term. We sell the Energy Servers to the financier who then leases it back to us pursuant to a sale-leaseback transaction. In the past, certain sale-leaseback transactions failed to achieve all of the criteria for sale accounting and consequently the proceeds from the transaction were recognized as financing obligations within our consolidated balance sheets. For successful sale-and-leaseback transactions, the financier of the Managed Services Agreement typically pays the purchase price for the Energy Servers at or around acceptance, and we recognize the fair market value of the Energy Servers sold and respective installation services provided to the financier within product and install revenue, respectively, and recognize an operating lease right-of-use (“ROU”) asset and an operating lease liability on our consolidated balance sheets. Any proceeds in excess of the fair value of the Energy Servers are recognized as financing obligations.

The duration of our current Managed Services Agreement offerings is between five and ten years. Under some Managed Services Agreements, we agree to provide remarketing assistance in the event a customer does not renew its agreement. Our Managed Services Agreements typically provide for performance warranties of both the efficiency and output of the Energy Servers and may include other warranties depending on the type of deployment. We often structure payments from the

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customer as a dollar per kilowatt flat payment. In some cases, the structure may also include a variable payment based on the Energy Servers’ performance or a performance-related set-off. As of December 31, 2023, we had incurred no liabilities due to failure to repair or replace our Energy Servers pursuant to these performance warranties.

Delivery and Installation

Installation is required in order for our Energy Servers to reach full power. Our role in the installation process varies based on the terms of the contract and/or the country of installation which can include, but is not limited to, design, engineering, permitting, procurement, construction, installation, start-up, performance testing, and commissioning of the systems. Bloom may contract with subcontractors to provide all or any part of the work. Depending on the acceptance milestones, we recognize installation revenue once the project has reached full power, or mechanical completion or on a percentage of completion basis.

Performance Guarantees

As of December 31, 2023, we had incurred no liabilities due to failure to repair or replace the Energy Servers pursuant to any performance warranties made under the O&M Agreements.

For the O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $564.0 million (including $438.3 million related to portfolio financing entities and $125.7 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential payment related to these underperformance obligations was approximately $491.9 million as of December 31, 2023. For the year ended December 31, 2023, we made performance guarantee payments of $25.9 million.

International Channel Partners

India. In India, sales activities are currently conducted by Bloom Energy (India) Pvt. Ltd., our wholly owned subsidiary; however, we continue to evaluate the Indian market to determine whether the use of channel partners would be a beneficial go-to-market strategy to grow our India market sales.

Japan. In Japan, sales activities are currently conducted by Bloom Energy Japan Limited, our wholly owned subsidiary.

The Republic of Korea. In 2018, Bloom Energy Japan consummated a sale of Energy Servers in the Republic of Korea to Korea South-East Power Company. Following this sale, we entered into a Preferred Distributor Agreement (“PDA”) in November 2018 with SK ecoplant for the marketing and sale of Bloom Energy Servers for the stationary utility and commercial and industrial South Korean power market.

As part of our expanded strategic partnership with SK ecoplant, the parties executed the PDA Restatement in October 2021, which incorporates previously amended terms and establishes: (i) SK ecoplant’s purchase commitments of at least 500 megawatts of power for our Energy Servers between 2022 and 2024 on a take-or-pay basis; (ii) rollover procedures; (iii) premium pricing for product and services; (iv) termination procedures for material breaches; and (v) procedures if there are material changes to the Republic of Korea Hydrogen Portfolio Standard. In December 2023, we further expanded our business partnership with SK ecoplant through the increase of SK ecoplant’s purchase commitments for Bloom Energy products of 250 megawatts through 2027 and extended the timing of delivery of the remaining take-or-pay commitment under the original agreement. For additional information, please see Part II, Item 8, Note 17 — SK ecoplant Strategic Investment.

Under the terms of the PDA Restatement, we (or our subsidiary) contract directly with the customer to provide operations and maintenance services for the Energy Servers. We have established a subsidiary in the Republic of Korea, Bloom Energy Korea, LLC, to which we subcontract such operations and maintenance services. The terms of the operations and maintenance are negotiated on a case-by-case basis with each customer but are generally expected to provide the customer with the option to receive services for at least 10 years, and for up to the life of the Energy Servers.

SK ecoplant Joint Venture Agreement. In September 2019, we entered into a joint venture agreement with SK ecoplant to establish a light-assembly facility in the Republic of Korea for sales of certain portions of our Energy Server for the stationary utility and commercial and industrial market in the Republic of Korea. The joint venture is a variable interest entity (“VIE”) of Bloom, and we consolidate it in our financial statements as we are the primary beneficiary and therefore have the power to direct activities which are most significant to the joint venture. The joint venture facility became operational in July 2020. Other than a nominal initial capital contribution by Bloom Energy, the joint venture is funded by SK ecoplant. SK ecoplant is our primary customer for the products assembled by the joint venture. In October 2021, as part of our expanded strategic

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partnership with SK ecoplant, the parties agreed to amend the joint venture agreement (“JVA”) to increase the scope of assembly work done in the joint venture facility. The joint venture was further developed in 2022 and 2023.

On September 15, 2023, we entered into the Amended and Restated JVA and the Share Purchase Agreement (together, the “Amended JV Agreements”) with SK ecoplant which changed the share of our voting rights in the Korean joint venture to 40% and increased the scope of assembly done by the joint venture facility in the Republic of Korea to full assembly. Neither the Amended JV Agreements, nor the fact that SK ecoplant is considered to be our related party after the conversion of Series B RCPS into shares of our Class A common stock (for additional information, please see Part II, Item 8, Note 11 — Related Party Transactions) changed our status as the primary beneficiary of the Korean joint venture. Therefore, we continue to consolidate this VIE in our financial statements as of December 31, 2023.

Comparison of the Years Ended December 31, 2023 and 2022

A discussion regarding our results of operations for 2023 compared to 2022 is presented in this section. A discussion of our results of operations for 2022 compared to 2021 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2022.

Key Operating Metrics

In addition to the measures presented in the consolidated financial statements, we use certain key operating metrics below to evaluate business activity, to measure performance, to develop financial forecasts, and to make strategic decisions:

•Product accepted — the number of customer acceptances of our Energy Servers in any period. We recognize revenue when an acceptance is achieved. We use this metric to measure the volume of deployment activity. We measure each Energy Server manufactured, shipped, and accepted in terms of 100 kilowatt equivalents.

•Product costs of product accepted in the period (per kilowatt) — the average unit product cost for the Energy Servers that are accepted in a period. We use this metric to provide insight into the trajectory of product costs and, in particular, the effectiveness of cost reduction activities.

•Period costs of manufacturing related expenses not included in product costs — the manufacturing and related operating costs that are incurred to procure parts and manufacture the Energy Servers that are not included as part of product costs. We use this metric to measure any costs incurred to run our manufacturing operations that are not capitalized into inventory and therefore, expensed to our consolidated statements of operations in the period that they are incurred.

•Installation costs on product accepted in the period (per kilowatt) — the average unit installation cost for the Energy Servers that are accepted in a given period. This metric is used to provide insight into the trajectory of installation costs and, in particular, to evaluate whether our installation costs are in line with our installation billings.

Product Acceptances

We use acceptances as a key operating metric to measure the volume of our completed Energy Server installation activity from period to period. Acceptance typically occurs upon transfer of control to our customers, which depending on the contract terms is when the system is shipped and delivered to our customer, when the system is shipped and delivered and is physically ready for startup and commissioning (i.e., “Mechanical Completion”), or when the system is shipped and delivered and is turned on and producing power (i.e., “Commencement of Operations”, “COO”).

The product acceptances in the years ended December 31, 2023 and 2022 were as follows:

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Product accepted increased approximately by 401 systems, or 17.6%, for the year ended December 31, 2023, as compared to the prior year period, which is the equivalent of 40 megawatts. Acceptance volume increased as demand increased for the Energy Servers.

The increase in acceptances of 268 megawatts achieved for the year ended December 31, 2023 was added to our installed base and, therefore, increased our total megawatts accepted, net, from 973 megawatts to 1,241 megawatts.

Purchase Alternatives

Our customers have several purchase alternatives for our Energy Servers. The portion of acceptances attributable to each purchase alternative in the years ended December 31, 2023 and 2022 was as follows:

The portion of total revenue attributable to each purchase option in the years ended December 31, 2023 and 2022 was as follows:

Costs Related to Our Products

Total product related costs for the years ended December 31, 2023 and 2022 was as follows:

Product costs of product accepted decreased by $345 per kilowatt, or 14.1%, for the year ended December 31, 2023, as compared to the prior year period. The decrease in costs was primarily driven by our continued efforts to reduce material costs, implement cost reduction programs with our vendors, and reduce our labor and overhead costs through increased volume, improved processes, and automation at our manufacturing facilities.

Period costs of manufacturing related expenses increased by $8.3 million, or 14.6%, for the year ended December 31, 2023, as compared to the prior year period. Our period costs of manufacturing related expenses increased primarily as a result

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of costs incurred to support capacity expansion efforts, which are expected to be brought online in future periods, partially offset by a $5.3 million release from one-time benefit related to a grant from the Delaware Economic Development Authority.

Installation costs on product accepted decreased by $62 per kilowatt, or 13.6%, for the year ended December 31, 2023, as compared to the prior year period. Each customer site is unique and installation costs can vary due to a number of factors, including site complexity, size, and location of gas, among other factors. As such, installation on a per kilowatt basis can vary significantly from period to period. For the year ended December 31, 2023, this decrease in cost was primarily driven by the change in the mix of sites requiring Bloom installation.

Results of Operations

A discussion regarding the comparison of our financial condition and results of operations for the years ended December 31, 2023 and 2022 is presented below.

Revenue

Total Revenue

Total revenue increased by $134.3 million, or 11.2%, for the year ended December 31, 2023, as compared to the prior year period. This increase was driven by a $94.6 million increase in product revenue, a $32.1 million increase in service revenue, a $7.0 million increase in electricity revenue, and a $0.7 million increase in installation revenue.

Product Revenue

Product revenue increased by $94.6 million, or 10.7%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by higher product acceptances of 17.6%, offset by the lower average selling price. Upgrades of our PPA portfolios contributed $20.7 million net increase in revenue recognized compared to the prior year.

Installation Revenue

Installation revenue increased by $0.7 million, or 0.7%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by the timing of key project milestones on sites requiring installations by us in the year ended December 31, 2023.

Service Revenue

Service revenue increased by $32.1 million, or 21.3%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by 223 megawatts of the Energy Servers reaching full power in fiscal 2023, which contributed to a $42.5 million increase in revenue from maintenance contracts associated with our fleet of the Energy Servers, partially offset by the impact of product performance guarantees of $8.5 million and a $0.7 million decrease in state incentives.

Electricity Revenue

Electricity revenue includes both revenue from contracts with customers and revenue from contracts that contain leases.

Electricity revenue increased by $7.0 million, or 9.3%, for the year ended December 31, 2023, as compared to the prior year period, primarily due to an accelerated amortization of incentive related deferred revenue of $5.0 million resulting from the PPA V Upgrade.

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Cost of Revenue

Total Cost of Revenue

Total cost of revenue increased by $84.8 million, or 8.1%, for the year ended December 31, 2023, as compared to the prior year period. The increase was driven by a $52.4 million increase in cost of service revenue, a $16.9 million increase in cost of electricity revenue, a $13.9 million increase in cost of product revenue, and a $1.6 million increase in cost of installation revenue.

Cost of Product Revenue

Cost of product revenue increased by $13.9 million, or 2.3%, for the year ended December 31, 2023, as compared to the prior year period. The increase in cost of product revenue was primarily driven by a 17.6% increase in product acceptances, including the net effect of $16.2 million from the upgrades of our PPA portfolios. This increase was partially offset by (1) a lower cost per unit attributable to our ongoing efforts to reduce material costs, (2) cost reduction programs with our vendors and a reduction in labor and overhead costs due to increased volume, (3) improved processes and automation at our manufacturing facilities, and (4) one-time benefit of $5.3 million related to a grant from the Delaware Economic Development Authority recognized against payroll related costs in the third quarter of fiscal 2023.

Cost of Installation Revenue

Cost of installation revenue increased by $1.6 million, or 1.6%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by the timing of key project milestones on sites requiring installations by us in the year ended December 31, 2023.

Cost of Service Revenue

Cost of service revenue increased by $52.4 million, or 31.1%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily due to the deployment of field replacement units, contributing an increase of $43.6 million, and an increase in maintenance material costs of $6.6 million. This increase was partially offset by cost reductions and our actions to proactively manage fleet optimizations and a portion of released grant liability of $2.9 million recognized against payroll related costs incurred in the third quarter of fiscal 2023.

Cost of Electricity Revenue

Cost of electricity revenue includes both cost of revenue from contracts with customers and cost of revenue from contracts that contain leases.

Cost of electricity revenue increased by $16.9 million, or 10.4%, for the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by a $14.9 million net increase in the impairment of the Energy Servers as a result of the upgrades of our PPA portfolios.

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Gross Profit (Loss) and Gross Margin

Total Gross Profit

Gross profit increased by $49.5 million in the year ended December 31, 2023, as compared to the prior year period. This change was mostly due to an $80.7 million increase in product gross profit, primarily driven by a 17.6% increase in product acceptances resulting from higher demand, lower cost per unit attributable to our ongoing efforts to reduce product costs. This increase was offset by a $20.3 million increase in service gross loss, primarily due to the deployment of field replacement units, and a $9.9 million increase in electricity gross loss, predominantly driven by a $14.9 million net increase in impairment charges of the old Energy Servers resulting from the upgrades of our PPA portfolios.

Product Gross Profit

Product gross profit increased by $80.7 million in the year ended December 31, 2023, as compared to the prior year period. The increase was primarily driven by a 17.6% increase in product acceptances due to higher demand for our products, one-time benefit of $5.3 million related to a grant from the Delaware Economic Development Authority recognized against payroll related costs in the third quarter of fiscal 2023, and our ongoing cost reduction efforts to reduce material costs and our reduction in labor and overhead unit cost due to increased volume, improved processes and automation at our manufacturing facilities.

Installation Gross Loss

Installation gross loss worsened by $0.9 million in the year ended December 31, 2023, as compared to the prior year period. This change was primarily driven by the timing of key project milestones on sites requiring installations by us in the year ended December 31, 2023 and other site related factors such as site complexity, size, local ordinance requirements, and location of the utility interconnect.

Service Gross Loss

Service gross loss worsened by $20.3 million in the year ended December 31, 2023, as compared to the prior year period. This was primarily due to deployments of field replacement units contributing to an increase in service gross loss of $43.6 million, an increase in maintenance material costs of $6.6 million, and the impact of product performance guarantees of $8.5 million, partially offset by 223 megawatts of the Energy Servers reaching full power in fiscal 2023, which contributed to a $42.5 million increase in revenue from maintenance contracts associated with our fleet of the Energy Servers, the release of $2.9 million of grant liability recognized against payroll related costs incurred in the third quarter of fiscal 2023, and cost reductions and our actions to proactively manage fleet optimizations.

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Electricity Gross Loss

Electricity gross loss worsened by $9.9 million in the year ended December 31, 2023, as compared to the prior year period. The change was primarily driven by a $14.9 million increase in the impairment charges of the old Energy Servers resulting from the upgrades of our PPA portfolios, partially offset by a $5.0 million accelerated amortization of incentive related deferred revenue as a result of PPA V Upgrade.

Operating Expenses

Total Operating Expenses

Total operating expenses decreased by $2.6 million in the year ended December 31, 2023, as compared to the prior year period. This decrease was primarily attributable to (1) a decrease in employee compensation and benefits expenses of $17.5 million, predominantly related to a decrease in stock-based compensation expenses, (2) a decrease in professional services and consulting and advisory costs of $2.3 million, and (3) a decrease in other operating expenses of $4.3 million. The decrease was partially offset by (i) our continued investment in R&D capabilities to support our technology roadmap, (ii) our investment in business development, as well as (iii) increases in facility costs, depreciation costs, office expenses, and travel expenses of $10.7 million, $5.1 million, $3.4 million, and $1.7 million, respectively.

Research and Development

Research and development expenses increased by $5.3 million in the year ended December 31, 2023, as compared to the prior year period. This increase was primarily driven by (1) an increase in employee compensation and benefits of $2.0 million, (2) an increase in travel expenses of $0.5 million, (3) an increase in professional services costs of $0.6 million, (4) an increase in depreciation expenses of $0.5 million, and (5) an increase in other research and development costs of $3.7 million, partially offset by a decrease in consumable laboratory supplies and other laboratory related costs of $2.2 million.

Sales and Marketing

Sales and marketing expenses decreased by $1.0 million in the year ended December 31, 2023, as compared to the prior year period. This decrease was primarily driven by a decrease in employee compensation and benefits of $5.6 million, partially offset by an increase in consulting, advisory, and outside professional services expenses of $4.5 million, and an increase in travel expenses of $0.3 million.

General and Administrative

General and administrative expenses decreased by $6.9 million in the year ended December 31, 2023, as compared to the prior year period. This decrease was primarily driven by (1) a decrease in employee compensation and benefits of $13.9 million, predominantly related to a decrease in stock-based compensation expenses, (2) a decrease in professional services costs of $7.4 million, and (3) a decrease in other general and administrative expenses of $7.8 million. The increase was partially offset by (i) an increase in facility costs of $10.7 million, primarily due to rent expenses and utility costs, (ii) an increase in office and other expenses of $3.5 million, primarily driven by the impairment of non-recoverable production insurance of $6.4 million as a result of the PPA V Upgrade, offset by $4.5 million of prepaid insurance impairment per the PPA IV Upgrade in fiscal 2022, and factoring and financing fees of $2.1 million, (iii) an increase in depreciation expenses of $4.6 million, (iv) an increase in computer equipment expenses of $2.3 million, and (v) an increase in travel expenses of $1.0 million.

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Stock-Based Compensation

Total stock-based compensation for the year ended December 31, 2023 compared to the prior year period decreased by $26.9 million. The decrease was primarily driven by (1) a decrease in compensation expense for stock awards of $18.2 million, (2) a decrease in option expense of $6.7 million compared to the year ended December 31, 2023, as existing options were either exercised, expired, or cancelled, (3) the separation of full-time employees holding equity awards as a result of the restructuring, (4) the voluntary resignation of our Executive Vice President and Chief Business Development and Marketing Officer on September 1, 2023, and (5) a decrease in ESPP expense of $0.7 million.

Other Income and Expense

Interest Income

Interest income is derived from investment earnings on our cash balances primarily from money market funds. The increase in interest income of $16.0 million was due to a $309.2 million increase in cash balance in our money market funds for the year ended December 31, 2023, as compared to the prior year period.

Interest Expense

Interest expense is primarily due to our debt held by third parties.

Interest expense for the year ended December 31, 2023, as compared to the prior year period, increased by $54.8 million. The increase was primarily driven by the expensing of loan commitment assets of $52.8 million immediately upon the automatic conversion on September 23, 2023, of Series B RCPS to Class A common stock as a result of the Second Tranche Closing with SK ecoplant, and an increase in interest expense related to the 3% Green Convertible Senior Notes due June 2028, issued on May 16, 2023. The increase was offset by a decrease in interest expense as a result of the redemption on June 1, 2023 of 10.25% Senior Secured Notes due March 2027, and the repayment of the 7.5% Term Loan due September 2028, the 6.07% Senior Secured Notes due March 2030, and the 3.04% Senior Secured Notes due June 2031 on June 14, 2022, November 22, 2022, and August 24, 2023, respectively.

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Other (Expense) Income, net

Other (expense) income, net is primarily derived from investments in joint ventures, the impact of foreign currency transactions, and adjustments to fair value for derivatives.

Other income, net for the year ended December 31, 2023, as compared to the prior year period, decreased by $7.8 million primarily as a result of the gain on the revaluation of the Option to purchase Class A common stock of $9.0 million upon receipt of the notice of exercise from SK ecoplant on August 10, 2022 for the year ended December 31, 2022, and an increase in unrealized and realized foreign exchange loss of $1.3 million. The decrease was partially offset by the loss on remeasurement of our equity investments of $3.5 million recorded for the year ended December 31, 2022.

Loss on Extinguishment of Debt

Loss on extinguishment of debt for the year ended December 31, 2023 was $4.3 million, which was recognized as a result of the redemption on June 1, 2023 of the 10.25% Senior Secured Notes due March 2027, and the repayment on August 24, 2023 of the 3.04% Senior Secured Notes due June 2031 as part of the PPA V Upgrade, and included the repayment of the 4% premium upon redemption of the 10.25% Senior Secured Notes due March 2027 of $2.3 million and derecognition of debt issuance costs of $2.0 million.

(Loss) Gain on Revaluation of Embedded Derivatives

(Loss) gain on revaluation of embedded derivatives is derived from the change in fair value of our sales contracts of embedded EPP derivatives valued using historical grid prices and available forecasts of future electricity prices to estimate future electricity prices.

Gain on revaluation of embedded derivatives for the year ended December 31, 2023, as compared to the prior year period, decreased by $2.2 million due to an increase in the fair value of our embedded EPP derivatives in our sales contracts, offset by a payment of $3.2 million to one of our customers in the second quarter of fiscal 2023.

Provision for Income Taxes

Income tax provision consists primarily of income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance for domestic deferred tax assets, including net operating loss and certain tax credit carryforwards. The income tax provision increased for the year ended December 31, 2023 as compared to the prior year period. The increase was primarily due to fluctuations in the effective tax rates on income earned by international entities.

Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests

Net loss attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the flip structure of the PPA Entities.

Net loss attributable to noncontrolling interests for the year ended December 31, 2023, as compared to the prior year period, improved by $7.9 million primarily due to changes in loss in PPA V, PPA IV and PPA IIIa of $4.9 million, $2.5 million, and $0.3 million, respectively, partly offset by a decrease in gain in the joint venture in the Republic of Korea of $0.1 million.

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Critical Accounting Policies and Estimates

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles as applied in the U.S. (“U.S. GAAP”). The preparation of the consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. Our discussion and analysis of our financial results under Results of Operations above are based on our audited results of operations, which we have prepared in accordance with U.S. GAAP. In preparing these consolidated financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses, and net income. On an ongoing basis, we base our estimates on historical experience, as appropriate, and on various other assumptions that we believe to be reasonable under the circumstances. Changes in the accounting estimates are representative of estimation uncertainty and are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected. We believe that the following critical accounting policies involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to understanding and evaluating the consolidated financial condition and results of operations.

The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, include:

Revenue Recognition

We apply Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). We identify our contracts with customers, determine our performance obligations and the transaction price, and after allocating the transaction price to the performance obligations, we recognize revenue as we satisfy our performance obligations and transfer control of our products and services to our customers. Most of our contracts with customers contain performance obligations with a combination of our Energy Server product, installation and maintenance services. For these performance obligations, we allocate the total transaction price to each performance obligation based on the relative standalone selling price using a cost-plus margin approach.

We generally recognize product revenue from contracts with customers at the point that control is transferred to the customers. This occurs when we achieve customer acceptance and typically occurs upon transfer of control to our customers, which depending on the contract terms is when the system is shipped and delivered to our customers, when the system is shipped and delivered and is physically ready for startup and commissioning (“Mechanical Completion”), or when the system is shipped and delivered and is turned on and producing power (“COO”).

For certain installations, control of installations transfers to the customer over time, and the related revenue is recognized over time as the performance obligation is satisfied using the cost-to-total cost (percentage-of-completion) method. We use an input measure of progress to determine the amount of revenue to recognize during each reporting period when such revenue is recognized over time, based on the costs incurred to satisfy the performance obligation.

Service revenue is recognized ratably over the term of the first or renewed one-year service period. Given our customers’ renewal history, we anticipate that most of them will continue to renew their maintenance services agreements each year for the period of their expected use of the Energy Servers. The contractual renewal price may be less than the standalone selling price of the maintenance services and consequently the contract renewal option may provide the customer with a material right. We estimate the standalone selling price for customer renewal options that give rise to material rights using the practical alternative by reference to optional maintenance services renewal periods expected to be provided and the corresponding expected consideration for these services. This reflects the fact that our additional performance obligations in any contractual renewal period are consistent with the services provided under the standard first-year warranty. Where we have determined that a customer has a material right as a result of their contract renewal option, we recognize that portion of the transaction price allocated to the material right over the period in which such rights are exercised.

Given that we typically sell the Energy Servers with a maintenance service agreement and have not provided maintenance services to a customer who does not have use of the Energy Servers, standalone selling prices are estimated using a cost-plus approach. Costs relating to the Energy Servers include all direct and indirect manufacturing costs, applicable overhead costs and costs for normal production inefficiencies (i.e., variances). We then apply a margin to the Energy Servers which may vary with the size of the customer, geographic region and the scale of the Energy Servers deployment. Costs relating to installation include all direct and indirect installation costs. The margin we apply reflects our profit objectives relating to

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installation. Costs for maintenance service arrangements are estimated over the life of the maintenance contracts and include estimated future service costs and future material costs. Material costs over the period of the service arrangement are impacted significantly by the longevity of the fuel cells themselves. After considering the total service costs, we apply a lower margin to our service costs than to our Energy Servers as it best reflects our long-term service margin expectations and comparable historical industry service margins. As a result, our estimate of our selling price is driven primarily by our expected margin on both the Energy Servers and the maintenance service agreements based on their respective costs or, in the case of maintenance service agreements, the estimated costs to be incurred.

The total transaction price is determined based on the total consideration specified in the contract, including variable consideration in the form of a performance guaranty payment that represents potential amounts payable to customers. The expected value method is generally used when estimating variable consideration, which typically reduces the total transaction price due to the nature of the performance obligations to which the variable consideration relates. These estimates reflect our historical experience and current contractual requirements which cap the maximum amount that may be paid. The expected value method requires judgment and considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each performance obligation. Depending on the facts and circumstances, a change in variable consideration estimate will either be accounted for at the contract level or using the portfolio method.

For successful sales-leaseback arrangements, we recognize product and installation revenue upon meeting criteria, demonstrating we have transferred control to the customer (the Buyer-Lessor). When control of the Energy Servers is transferred to the financier, and we determine the leaseback qualifies as an operating lease in accordance with ASC 842, Leases (“ASC 842”), we record an operating lease ROU asset and an operating lease liability, and recognize revenue based on the fair value of the Energy Servers with an allocation to product revenue and installations revenue based on the relative standalone selling prices. We recognize as financing obligations any proceeds received to finance our ongoing costs to operate the Energy Servers.

Valuation of Assets and Liabilities of the SK ecoplant Strategic Investment

On March 20, 2023, the Company amended its SPA (the “Amended SPA”) with SK ecoplant and simultaneously entered into the Loan Agreement (collectively “the Agreements.”) On March 23, 2023, pursuant to the Amended SPA, we issued and sold to SK ecoplant shares of non-voting Series B RCPS. The Amended SPA triggered the modification of the equity-classified forward contract on Class A common stock, which resulted in the derecognition of the pre-modified fair value of the forward contract given to SK ecoplant. The Series B RCPS was accounted for as a stock award with liability and equity components. The liability component of the Series B RCPS was recognized at the redemption value net of issuance costs, and the equity component was recognized at its fair value on March 20, 2023 and represented the option of SK ecoplant to convert the Series B RCPS to Class A common stock (the “Conversion Option”). Pursuant to the Loan Agreement we had the option to draw on a loan from SK ecoplant, should SK ecoplant have sent a redemption notice to us under the Amended SPA. The Agreements provided us with a loan commitment asset from SK ecoplant.

The liability component of the Series B RCPS, the Conversion Option, and the loan commitment asset were accounted for under the guidance of Topic 718, Compensation – Stock Compensation (“ASC 718”), and applicable subsections of ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). We used third-party valuation experts to provide us with (i) the pre-modified fair value of the forward contract given to SK ecoplant, (ii) the fair value of the issued Series B RCPS equity component, and (iii) the fair value of the loan commitment asset from SK ecoplant.

Pre-modified forward contract. We valued the forward contract as the difference between (i) our Class A common stock trading price adjusted by a discount for lack of marketability (“DLOM”) as of the date of Amended SPA (the “Valuation Date”) and (ii) the present value of the strike price, with further reduction associated with the expected outcome of the Second Tranche Closing.

Series B RCPS equity component (the Conversion Option). We valued the conversion feature of the Series B RCPS as a European-type call option under the guidance of ASC 718 by applying the Black-Scholes valuation model using inputs of the strike price, maturity, risk-free rate, and volatility. In addition, DLOM was applied to the Class A common stock price.

Loan commitment asset from SK ecoplant. We concluded that the loan commitment was a freestanding financial instrument as of the Valuation Date. We valued the loan commitment asset based on the difference between the present value of cash flows associated with a loan with a market-participant based interest rate (i.e., the rate for which the value of the hypothetical loan agreement equals the face value of the Loan Agreement) and the cash flows associated with the loan committed to by SK ecoplant, and applied a redemption probability to the difference. The Series B RCPS redemption probability was obtained from a lattice model used to value the Series B preferred stock. As of December 31, 2023, the loan

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commitment asset from SK ecoplant was derecognized as a result of automatic conversion of all shares of the Series B RCPS into shares of our Class A common stock.

We determined our final estimates of fair values based on internal reviews and in consideration of the estimates received. The objective of the fair value measurement of our estimate was to represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We determined the reasonableness of our valuation methodology and underlying assumptions and reviewed the mathematical accuracy of the calculations before recording in our consolidated statements of operations and consolidated balance sheets.

For additional details about the transaction with SK ecoplant, please refer to Part II, Item 8, Note 17 — SK ecoplant Strategic Investment.

Income Taxes

We account for income taxes using the liability method under ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on net operating loss carryforwards, research and development credit carryforwards and temporary differences resulting from the different treatment of items for tax and financial reporting purposes. Deferred items are measured using the enacted tax rates and laws that are expected to be in effect when the differences reverse. We must assess the likelihood that deferred tax assets will be recovered as deductions from future taxable income. This determination is based on expected future results and the future reversals of existing taxable temporary differences. Furthermore, uncertain tax positions are evaluated by management and amounts are recorded when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits. Significant judgement is required throughout management’s process in evaluating each uncertain tax position including future taxable income expectations and tax-planning strategies to determine whether the more likely than not recognition threshold has been met. We have provided a full valuation allowance on our domestic deferred tax assets because we believe it is more likely than not that our deferred tax assets will not be realized.

Principles of Consolidation

Our consolidated financial statements include the operations of our subsidiaries in which we have a controlling financial interest. We use a qualitative approach in assessing the consolidation requirements for our VIEs. This approach focuses on determining whether we have the power to direct those activities that significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits that could potentially be significant to the VIEs. The consideration for VIE consolidation is a complex analysis that requires us to determine whether we are the primary beneficiary and therefore have the power to direct activities which are most significant to the VIEs.

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Overview

Description of Bloom Energy

Our mission is to make clean, reliable energy affordable for everyone in the world. We created the first large-scale, commercially viable solid oxide fuel-cell based power generation platform that empowers businesses, essential services, critical infrastructure and communities to responsibly take charge of their energy.

Our technology, invented in the United States, is one of the most advanced electricity and hydrogen producing technologies on the market today. Our fuel-flexible Bloom Energy Servers can use biogas, hydrogen, natural gas, or a blend of fuels to create resilient, sustainable and cost-predictable power at significantly higher efficiencies than traditional, combustion-based resources. In addition, our same solid oxide platform that powers our fuel cells can be used to create hydrogen, which is increasingly recognized as a critically important tool for the decarbonization of the energy economy. Our enterprise customers include some of the largest multinational corporations in the world. We also have strong relationships with some of the largest utility companies in the United States and the Republic of Korea.

At Bloom Energy, we look forward to a net-zero future. Our technology is designed to help enable this future by delivering reliable, low-carbon, electricity in a world facing unacceptable levels of power disruptions. Our resilient platform has kept electricity available for our customers through hurricanes, earthquakes, typhoons, forest fires, extreme heat and grid failures. Unlike traditional combustion power generation, our platform is community-friendly and designed to significantly reduce emissions of criteria air pollutants. We have made tremendous progress towards renewable fuel production through our biogas, hydrogen and electrolyzer programs, and we believe that we are well-positioned as a core platform and fixture in the new energy paradigm to help organizations and communities achieve their net-zero objectives.

We market and sell our Energy Servers primarily through our direct sales organization in the United States, and we also have direct and indirect sales channels internationally. Recognizing that deploying our solutions requires a material financial commitment, we have developed a number of financing options to support sales of our Energy Servers to customers who lack the financial capability to purchase our Energy Servers directly, who prefer to finance the acquisition using third-party financing or who prefer to contract for our services on a pay-as-you-go model.

Our typical target commercial or industrial customer has historically been either an investment-grade entity or a customer with investment-grade attributes, such as size, assets and revenue, liquidity, geographically diverse operations and general financial stability. We have also expanded our product and financing options to below-investment-grade customers and have also expanded internationally to target customers with deployments on a wholesale grid. Given that our customers are typically large institutions with multi-level decision making processes, we generally experience a lengthy sales process.

Strategic Investment

On October 23, 2021, we entered into a Securities Purchase Agreement (the “SPA”) with SK ecoplant Co., Ltd. (“SK ecoplant,” formerly known as SK Engineering & Construction Co., Ltd.) in connection with our strategic partnership. Pursuant to the SPA, on December 29, 2021, we sold to SK ecoplant 10 million shares of our zero coupon, non-voting redeemable convertible Series A preferred stock, par value $0.0001 per share (the “RCPS”), at a purchase price of $25.50 per share for an aggregate purchase price of $255 million (the “Initial Investment”). On November 8, 2022, each share of Series A Preferred Stock was converted into 10,000,000 shares of Class A Common Stock.

Simultaneous with the execution of the SPA, we and SK ecoplant executed an amendment to the Joint Venture Agreement (the “JVA”), an amendment and restatement to our Preferred Distribution Agreement (“PDA Restatement”) and a new Commercial Cooperation Agreement regarding initiatives pertaining to the hydrogen market and general market expansion for the Bloom Energy Server and Bloom Energy Electrolyzer. For additional details about the transaction with SK ecoplant, please see Note 17 - SK ecoplant Strategic Investment, and for more information about our joint venture with SK ecoplant, please see Note 12 - Related Party Transactions in Part II, Item 8, Financial Statements and Supplementary Data.

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Certain Factors Affecting our Performance

Global Macroeconomic Conditions

We generally are seeing worsening global macroeconomic conditions, including rising interest rates, recession fears, foreign exchange rate volatility and inflationary pressures, as well as increasing geopolitical instability. These conditions impact our business in several ways. For example, the strengthening U.S. dollar has caused our Energy Servers to become more expensive in several markets outside the United States, which, coupled with worsening global macroeconomic conditions, has the potential to adversely impact demand for our Energy Servers. Our Energy Servers run on a variety of fuels, including natural gas. The rising cost of natural gas, limited availability of natural gas supply, as well as disruptions to the world gas markets has increased the cost of our Energy Servers for the end customers. These conditions also impact our manufacturing and supply chain, as discussed below. To date, the potential impact of these conditions on customer demand largely has been offset by the customers’ need for resiliency and a quick time to power that our Energy Server provides as well as the sustainability that both our Energy Servers and Electrolyzers provide.

Supply Chain Constraints

We continue to see effects from global supply chain disruptions and are experiencing supply chain challenges and logistics constraints. While we have not experienced any significant component shortages to date, we are facing pressures from longer lead times, shipping and freight delays, and increased costs of raw materials. These dynamics could worsen as a result of continued increase in geopolitical instability. In addition, the current inflationary environment and war in Ukraine has led to an increase in the price of components and raw materials. In the event we are unable to mitigate the impacts of delays and/or price increases in raw materials, components and freight, it could delay the manufacturing and installation of our Energy Servers and increase the costs of our Energy Servers, which would adversely impact our cash flows and results of operations, including our revenues and gross margin. We expect these supply chain challenges and logistics constraints to continue for the foreseeable future.

Manufacturing and Labor Market Constraints

We are experiencing impacts from the ongoing labor shortage and continue to face challenges in hiring for our manufacturing facilities. While we continue to dedicate resources to supporting our capacity expansion efforts, we are experiencing difficulties with hiring and retention, particularly for our new manufacturing facility in Fremont, California. In addition, the current inflationary environment has led to rising wages and labor rates as well as increased competition for labor. To date, we have been able to mitigate any significant impact to production through a contingent workforce and other measures. In the event we are unable to continue to mitigate the impacts of these challenges, it could delay the manufacturing and installation of our Energy Servers or Electrolyzers and we may be unable to meet customer demand, which could adversely impact our cash flows and results of operations, including our revenues and gross margin. We expect the hiring and retention challenges arising from the labor shortages to continue for the foreseeable future.

Customer Financing Constraints

Our ability to obtain financing for our Energy Servers partly depends on the creditworthiness of our customers, and deterioration of our customers’ credit ratings can impact the financing for their use of an Energy Server. We continue to work on obtaining the financing required for our 2023 installations, but if we are unable to secure such financing our revenue, cash flow and liquidity could be materially impacted. We expect that in the United States, the Inflation Reduction Act of 2022 (the “IRA”) and the transferability of tax credits, should make the financing market more robust.

Installations and Maintenance of Energy Servers

In 2022, our installation projects have experienced some delays relating to, among other things, shortages in available parts and labor for design, installation and other work, and the inability or delay in our ability to access customer facilities due to shutdowns or other restrictions. Despite the impact on installations during the year ending December 31, 2022 and given our mitigation strategies, we only had a couple instances of a significant delay in the installation of our Energy Servers as a result of supply chain issues that pushed installations out a quarter.

If we are delayed in or unable to perform scheduled or unscheduled maintenance, our previously installed Energy Servers would likely experience adverse performance impacts including reduced output and/or efficiency, which could result in warranty and/or guaranty claims by our customers. Further, due to the nature of our Energy Servers, if we are unable to replace worn parts in accordance with our standard maintenance schedule, we may be subject to increased costs in the future. During the year ended December 31, 2022, we experienced no delays in servicing our Energy Servers.

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COVID-19 Pandemic

We continue to monitor and adjust, as appropriate, our operations in response to the COVID-19 pandemic. We maintain protocols to minimize the risk of COVID-19 transmission within our facilities. We will continue to follow CDC and local guidelines. For more information regarding the risks posed to our Company by the COVID-19 pandemic, refer to Part I, Item 1A, Risk Factors – Risks Related to Our Products and Manufacturing – Our business has been and continues to be adversely affected by the COVID-19 pandemic.

Environmental, Social and Governance (“ESG”)

We are committed to a goal of providing consistent returns to our shareholders while maintaining a strong sense of good corporate citizenship that places a high value on the environment, welfare of our employees, the communities in which we operate, the customers we serve, and the world as a whole. We believe that prioritizing, improving, and managing our Environmental, Social, and Governance (“ESG”) related risks, opportunities and programs will allow us to better create long-term value for our investors.

We released our 2021 Sustainability Report, Solutions for a Decarbonized Future, (the “Report”) during the first quarter of 2022 using accepted ESG frameworks and standards, including alignment with Sustainability Accounting Standards Board standards and the Task Force on Climate-related Financial Disclosures recommendations. In addition, the Report also utilized certain Global Reporting Initiative standards and was mapped against United Nations Sustainable Development Goals. We plan to issue the Report on an annual basis.

Our mission is to make clean, reliable energy affordable for everyone in the world. To that end, we strive to empower businesses and communities to responsibly take charge of their energy while addressing both the causes and consequences of climate change. We aim to serve our customers with products that are resilient, providing uninterrupted power with predictable pricing over the long-term, while addressing sustainability issues by developing an increasingly broad portfolio of decarbonized solutions.

The Report can be found on our website at https://www.bloomenergy.com/sustainibility. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report.

Inflation Reduction Act of 2022 – New and Expanded Production and Tax Credits for Manufacturers and Projects to Support Clean Energy

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”). The IRA contains provisions which we expect will have a significant impact on the development and financing of clean energy projects in the United States. The IRA includes the extension and expansion of the Investment Tax Credit (“ITC”) and Production Tax Credit (“PTC”) and the addition of expanded tax credits for other technologies and for manufacturing of clean energy equipment as well as terms allowing parties to more easily monetize the tax credits. The IRA also includes some targeted bonus credit incentives intended to encourage development in low-income communities, the use of domestically produced materials, and compliance with certain labor-related requirements.

The IRA contains several credits and incentive provisions that may be relevant to us, which we have summarized below:

•Section 48 – ITC, which provides a tax credit based on capital investment in a variety of renewable and conventional energy technologies to incentivize investment in new energy resources and more efficient use of fuel, including fuel cell technology;

•Section 48C – Qualified Advanced Energy Project (reenacted), which provides an ITC through a competitive application process administered through the Department of Energy equal to 6% or 30% of the investment with respect to advanced energy projects;

•Section 45V – Clean Hydrogen, which provides a PTC of up to $3 per kg of qualified clean hydrogen over a 10-year credit period for the production of qualified clean hydrogen at a qualified facility in the US; and

•Section 45Q – Carbon Capture Sequestration, which provides a credit ranging from $12-$17 or $60-$85 per metric ton based on the amount of carbon oxides captured from a qualified facility over a 12-year period

We believe that the programs and credits included in the IRA align well with our business model and could provide significant benefits with respect to incentivizing the purchase of our current product offerings and technologies. In particular, the new PTC

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for qualified clean hydrogen and credit for carbon capture could result in increased demand for commercial solutions to hydrogen production technology and carbon capture, including our solid oxide fuel-cell based electrolyzer and energy server. As Treasury has not yet issued guidance on several of the provisions that applicable to our business, we continue to assess the impact.

Liquidity and Capital Resources

We improved our liquidity in 2022 and at the same time increased our working capital spend. We have entered into new leases intended to maintain sufficient manufacturing facilities to meet anticipated demand in 2023 and beyond, including new product line expansion. In addition, we have also increased the amount spent on working capital to enhance our marketing efforts and to expand into new geographies both domestically and internationally.

On August 10, 2022, pursuant to the SPA, SK ecoplant notified us of its intent to exercise its option to purchase additional shares of our Class A common stock, pursuant to a Second Tranche Exercise Notice (as defined in the SPA). It elected to purchase 13,491,701 shares (the “Second Tranche Shares”) at a purchase price of $23.05 per share, calculated as a 15% premium to the volume-weighted average closing price of the 20 consecutive trading day period immediately preceding the exercise of the option. The aggregate purchase price approximates cash proceeds to be received by us of $311.0 million, net of related incremental direct costs of $0.1 million. The closing of this purchase (the “Second Closing Date”) was expected to be the later of the parties receiving clearance from the U.S. Department of Justice and the Federal Trade Commission of the purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1974 (the “HSR”), as amended (which was October 7, 2022), and December 6, 2022.

On December 6, 2022, SK ecoplant and Bloom mutually agreed to delay the Second Closing Date until March 31, 2023, unless an earlier date is mutually agreed upon, and subject to and assuming the satisfaction of applicable regulatory clearance.

On August 19, 2022, we completed an underwritten public offering, pursuant to which we issued and sold 13,000,000 shares of Class A common stock at a price of $26.00 per share (the “Offering”). As a part of the Offering, the underwriters were provided a 30-day option to purchase an additional 1,950,000 shares of our Class A common stock at the same price, less underwriting discounts and commissions, which was exercised contemporaneously with the Offering. The aggregate net proceeds received by us from the Offering were $371.5 million, after deducting underwriting discounts and commissions of $16.5 million and incremental costs directly attributable to the Offering of $0.7 million.

As of December 31, 2022, we had cash and cash equivalents of $348.5 million. Our cash and cash equivalents consist of highly liquid investments with maturities of three months or less, including money market funds. We maintain these balances with high credit quality counterparties, continually monitor the amount of credit exposure to any one issuer and diversify our investments in order to minimize our credit risk.

As of December 31, 2022, we had $285.8 million of total outstanding recourse debt, $125.8 million of non-recourse debt and $9.5 million of other long-term liabilities. For a complete description of our outstanding debt, please see Note 7 - Outstanding Loans and Security Agreements in Part II, Item 8, Financial Statements and Supplementary Data.

The combination of our existing cash and cash equivalents is expected to be sufficient to meet our anticipated cash flow needs for at least the next 12 months. If these sources of cash are insufficient to satisfy our near-term or future cash needs, we may require additional capital from equity or debt financings to fund our operations, in particular, our manufacturing capacity, product development and market expansion requirements, to timely respond to competitive market pressures, strategic opportunities or otherwise. We may, from time to time, engage in a variety of financing transactions for such purposes, including factoring our accounts receivable. We may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.

Our future capital requirements will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the rate of growth in the volume of system builds, the need for additional manufacturing space, the expansion of sales and marketing activities both in domestic and international markets, market acceptance of our products, our ability to secure financing for customer use of our Energy Servers, the timing of installations, and overall economic conditions. In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through an equity or debt financing. Failure to obtain this financing or financing in future quarters may affect our results of operations, including our revenues and cash flows.

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As of December 31, 2022, the current portion of our total debt was $26.0 million, of which $13.3 million was outstanding non-recourse debt.

A summary of our consolidated sources and uses of cash, cash equivalents and restricted cash was as follows (in thousands):

Net cash provided by (used in) our PPA Entities, which are incorporated into the consolidated statements of cash flows, was as follows (in thousands):

1 The PPA Entities’ operating and financing cash flows are a subset of our consolidated cash flows and represent the stand-alone cash flows prepared in accordance with U.S. GAAP. Operating activities consist principally of cash used to run the operations of the PPA Entities, the purchase of Energy Servers from us and principal reductions in loan balances. Financing activities consist primarily of changes in debt carried by our PPAs, and payments from and distributions to noncontrolling partnership interests. We believe this presentation of net cash provided by (used in) PPA activities is useful to provide the reader with the impact to consolidated cash flows of the PPA Entities in which we have only a minority interest.

Operating Activities

Our operating activities consisted of net loss adjusted for certain non-cash items plus changes in our operating assets and liabilities or working capital. The increase in cash used in operating activities during the year ended December 31, 2022, as compared to the prior year period of $60.7 million, was primarily due to the increase in our net loss of $121.7 million and the increase in working capital of $141.8 million during the year ended December 31, 2022 due to the timing of revenue transactions and corresponding collections, the increase in accounts receivable triggered by the increase in sales compounded by the decision not to sell our receivables in the fourth quarter of 2022, the increase in inventory levels to support future demand, and the timing of payments to vendors.

Investing Activities

Our investing activities have consisted of capital expenditures, including investments to increase our production capacity. We expect to continue such investing activities as our business grows. Cash used in investing activities of $116.8 million during the year ended December 31, 2022, an increase of $70.1 million compared to the prior year period, was primarily due to expenditures on tenant improvements for a newly leased engineering and manufacturing building in Fremont, California, opened in July 2022. We expect to continue to make capital expenditures over the next few quarters to prepare our new manufacturing facility in Fremont, California for production, which includes the purchase of new equipment and other tenant improvements. We intend to fund these capital expenditures from cash on hand as well as cash flow to be generated from operations. We may also evaluate and arrange equipment lease financing to fund these capital expenditures.

Financing Activities

Historically, our financing activities have consisted of borrowings and repayments of debt, proceeds and repayments of financing obligations, distributions paid to noncontrolling interests, contributions from noncontrolling interests, and the proceeds from the issuance of our common stock. Net cash provided by financing activities during the year ended December 31, 2022 was $211.4 million, a decrease of $95.0 million compared to prior year period, and was comprised primarily of the repayment of debt related to PPA IIIa and PPA IV of $100.7 million and other debt of $19.9 million, repayment of financing

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obligations of $35.5 million, purchase of noncontrolling interest of PPA IV and PPA V of $12.0 million, and distributions and payments to noncontrolling interests of $6.9 million, partially offset by the proceeds from our public share offering of $371.6 million and the proceeds from our issuance of common stock of $15.3 million.

We believe we have sufficient capital to operate our business over the next 12 months, including the completion of the build out of our manufacturing facilities. Our working capital was strengthened with the initial investment by SK ecoplant and our public offering. In addition, we may still enter the equity or debt market as needed to support the expansion of our business. Please refer to Note 7 - Outstanding Loans and Security Agreements in Part II, Item 8, Financial Statements and Supplementary Data; and Part I, Item 1A, Risk Factors – Risks Related to Our Liquidity – Our substantial indebtedness, and restrictions imposed by the agreements governing our and our PPA Entities’ outstanding indebtedness, may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs, and We may not be able to generate sufficient cash to meet our debt service obligations, for more information regarding the terms of and risks associated with our debt.

Purchase and Financing Options

Overview

In order to appeal to the largest variety of customers, we make available several options to our customers. Both in the United States and abroad, we sell Energy Servers directly to customers. In the United States, we also enable customers’ use of the Energy Servers through a power purchase or lease option, made possible through third-party ownership financing arrangements.

Often our offerings take advantage of local incentives. In the United States, our financing arrangements are structured to optimize both federal and local incentives, including the ITC and accelerated depreciation. Internationally, our sales are made primarily to distributors who on-sell to, and install for, customers; these deals are also structured to use local incentives applicable to our Energy Servers. Increasingly, we use trusted installers and other sourcing collaborations in the United States to generate transactions.

Whichever option is selected by a customer in the Unites States or internationally, the contract structure will include obligations on our part to operate and maintain the Energy Server (“O&M Agreement”). The O&M Agreement may either be (i) for a one-year period, subject to annual renewal at the customer’s option, which historically are almost always renewed year over year, or (ii) for a fixed term. In the United States, the contract structure often includes obligations on our part to install the Energy Servers (“Installation Obligations”). Consequently, our transactions may generate revenue from the sale of Energy Servers and electricity, performance of O&M Obligations, and performance of Installation Obligations.

In addition to customary workmanship and materials warranties, as part of the O&M Agreement, we provide warranties and guaranties regarding the efficiency and output of our Energy Servers to the customer and, in certain financing structures, to the financing parties as well. We refer to a “performance warranty” as an obligation to repair or replace the Energy Servers as necessary to return performance of an Energy Server to the warranted performance level. We refer to a “performance guaranty” as an obligation to make a payment to compensate for the failure of the Energy Server to meet the guaranteed performance level. Our obligation to make payments under a performance guaranty is always contractually capped.

Energy Server Sales

There are customers who purchase our Energy Servers directly from us pursuant to customary equipment sales contracts. In connection with the purchase of Energy Servers, the customers also enter into a contract with us for the O&M Obligations. The customer may elect to engage us to provide the Installation Obligations or engage a third-party provider. Internationally, sales often occur through distribution arrangements pursuant to which local construction service providers perform the Installation Obligations, as is the case in the Republic of Korea, and we contract directly with the customer to provide O&M Obligations.

In the past, a customer could enter into a contract for the sale of our Energy Servers and finance that acquisition through a sale-leaseback with a financial institution. In most cases, the financial institution completed its purchase from us immediately after commissioning. We both (i) facilitated this financing arrangement between the financial institution and the customer and (ii) provided ongoing operations and maintenance services for the Energy Servers (such arrangement, a “Traditional Lease”). Our current practices no longer contemplate these types of transactions.

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Customer Financing Options

With respect to the third-party financing options in the United States, a customer may choose to contract for the use of our Energy Servers in exchange for a capacity-based payment and, in some cases, an output-based payment based on kw/hour (each, a “Managed Services Agreement”), or for the purchase of electricity generated by the Energy Servers in exchange for a scheduled dollars per kilowatt hour rate (a “Power Purchase Agreement” or “PPA”).

Capacity-based payments in a Managed Services Agreement are required regardless of the level of performance of the Energy Server. Managed Services Agreements are then financed pursuant to a sale-leaseback with a financial institution (a “Managed Services Financing”).

PPAs are typically financed on a portfolio basis. We have financed portfolios through tax equity partnerships, acquisition financings and direct sales to investors (each, a “Portfolio Financing”).

In the United States, our capacity to offer our Energy Servers through either of these financed arrangements depends in large part on the ability of financing parties to optimize the tax benefits associated with an Energy Server, such as the ITC or accelerated depreciation. Interest rate fluctuations, and internationally, currency exchanges fluctuations, may also impact the attractiveness of any financing offerings for our customers. Our ability to finance a Managed Services Agreement or a PPA is also related to, and may be limited by, the creditworthiness of the customer. Additionally, the Managed Services Financing option is limited by a customer’s willingness to commit to making the capacity-based payment to a financing party regardless of performance.

In each of our financing options, we typically perform the functions of a project developer, including identifying end customers and financiers, leading the negotiations of the customer agreements and financing agreements, securing all necessary permitting and interconnections approvals, and overseeing the design and construction of the project up to and including commissioning the Energy Servers. Increasingly, however, we are making sales to third-party developers.

Each of our financing transaction structures is described in further detail below.

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Managed Services Financing

Under our Managed Services Financing option, we enter into a Managed Services Agreement with a customer for a certain term. The fixed capacity-based payments made by the customer under the Managed Services Agreement are applied toward our obligation to pay down our periodic lease liability under a sale-leaseback transaction with a financier. We assign all our rights to such fixed payments made by the customer to the financier, as lessor.

Once we enter into a Managed Services Agreement with the customer, and a financier is identified, we sell the Energy Server to the financier, as lessor, who then leases it back to us, as lessee, pursuant to a sale-leaseback transaction. Certain of our sale-leaseback transactions failed to achieve all of the criteria for sale accounting and consequently were re-characterized for accounting purposes. For such re-characterized transactions, the proceeds from the transaction were recognized as a financing obligation within our consolidated balance sheet. For successful sale-and-leaseback transactions, the financier of a Managed Services Agreement typically pays the purchase price for an Energy Server at or around acceptance, and we recognize the fair market value of the Energy Servers sold within product and install revenue and recognize a right-of-use (“ROU”) asset and a lease liability on our consolidated balance sheet. Any proceeds in excess of the fair value of the Energy Servers are recognized as a financing obligation.

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The duration of our current Managed Services Agreement offerings is between five and ten years.

Our Managed Services Agreements typically provide for performance warranties of both the efficiency and output of the Energy Server and may include other warranties depending on the type of deployment. We often structure payments from the customer as a dollars per kilowatt flat payment. In some cases, the structure may also include a variable payment based on the Energy Server’s performance or a performance-related set-off. As of December 31, 2022, we had incurred no liabilities due to failure to repair or replace our Energy Servers pursuant to these performance warranties.

Portfolio Financings

In the past, we financed the Energy Servers subject to our PPAs through two types of Portfolio Financings. In one type of transaction, we sold a portfolio of PPAs to a tax equity partnership in which we held a managing member interest (such partnership in which we hold an interest, a “PPA Entity”). In these transactions, we sold the portfolio of Energy Servers to a limited liability project company of which the PPA Entity was the sole member (such portfolio owner, a “Portfolio Company”). Whether an investor, a tax equity partnership, or a single member limited liability company, the Portfolio Company was the entity that directly owned the portfolio. The Portfolio Company sold the electricity generated by the Energy Servers contemplated by the PPAs to the customers. We recognized revenue as the electricity was produced. Our current practices no longer contemplate these types of transactions, and we are in the process of restructuring existing PPA Entities by (i) acquiring the outstanding equity interests of our investors and tax equity partners, (ii) selling 100% of the equity interests in the PPA Entity or the Portfolio Company to a new investor or tax equity partnership in which we do not have an equity interest, and (iii) entering into a new equipment supply and installation agreement and related agreements to upgrade and/or replace the Energy Servers owned by the Portfolio Company. As of December 31, 2022, we only had one PPA Entity remaining known as PPA V. Bloom does not have active and formal plans to sell this entity.

We also finance PPAs through a second type of Portfolio Financing pursuant to which we (i) directly sell a portfolio of PPAs and the Energy Servers to an investor or tax equity partnership or (ii) sell a Portfolio Company, in each case to an investor or tax equity partnership (in either case, an “Equity Investor”) in which we do not have an equity interest (a “Third-Party PPA”). Like the other Portfolio Financing structure, the Equity Investor owns the Portfolio Company or the Energy Servers directly, and in each case, sells the electricity generated by the Energy Servers contemplated by the PPAs to the customers. For further discussion, see Note 11 - Portfolio Financings in Part II, Item 8, Financial Statements and Supplementary Data.

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When we finance a portfolio of Energy Servers and PPAs through a Portfolio Financing, we typically enter into, with the Portfolio Company or directly with the Equity Investor, as the case may be, a sale, engineering, procurement and construction agreement (“EPC Agreement”) and a multi-year O&M Agreement, including the provision of performance warranties and guaranties. As owner of the portfolio of PPAs and related Energy Servers, the portfolio owner receives all customer payments generated under the PPAs, the benefits of the ITC and accelerated tax depreciation, and any other available state or local benefits arising out of the ownership or operation of the Energy Servers, to the extent not already allocated to the customer under the PPA.

The sales of our Energy Servers in connection with a Portfolio Financing have many of the same terms and conditions as a direct sale. Payment of the purchase price is generally broken down into multiple installments, which may include payments prior to shipment, upon shipment, delivery, or when the Energy Servers are shipped and delivered and are physically ready for startup and commissioning, and upon acceptance of the Energy Server.

Obligations to Portfolio Companies

Our Portfolio Financings involve many obligations on our part to the Portfolio Company or Equity Investor, as applicable. These obligations are set forth in the applicable EPC Agreement and O&M Agreement, and may include some or all of the following obligations:

•designing, manufacturing, and installing the Energy Servers, and selling such Energy Servers to the Portfolio Company or Equity Investor;

•obtaining all necessary permits and other governmental approvals necessary for the installation and operation of the Energy Servers, and maintaining such permits and approvals throughout the term of the EPC Agreements and O&M Agreements;

•operating and maintaining the Energy Servers in compliance with all applicable laws, permits and regulations;

•satisfying the performance warranties and guaranties set forth in the applicable O&M Agreements; and

•complying with any other specific requirements contained in the PPAs with customers.

In some cases, the EPC Agreement obligates us to repurchase the Energy Server in the event of certain IP infringement claims. In others, a repurchase of the Energy Server is only one optional remedy we have to cure an IP infringement claim. The O&M Agreement grants the Equity Investor the right to obligate us to repurchase the Energy Servers in the event the Energy

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Servers fail to comply with the performance warranties and guaranties in the O&M Agreement and we do not cure such failure in the applicable warranty cure period, or that a PPA terminates as a result of any failure by us to perform the obligations in the O&M Agreement. In some of our Portfolio Financings, our obligation to repurchase Energy Servers under the O&M Agreement extends to the entire fleet of Energy Servers sold in the event a systemic failure that affects more than a specified number of Energy Servers.

In some Portfolio Financings, we have also agreed to pay liquidated damages to the applicable Portfolio Company or Equity Investor, as the case may be, in the event of delays in the manufacture, installation and commissioning of our Energy Servers, either in the form of a cash payment or a reduction in the purchase price for the applicable Energy Servers.

Administration of Portfolio Companies

In each of our Portfolio Financings in which we hold an equity interest in the PPA Entity, we perform certain administrative services as managing member, including invoicing the end customers for amounts owed under the PPAs, administering the cash receipts of the Portfolio Company in accordance with the requirements of the financing arrangements, interfacing with applicable regulatory agencies, and other similar obligations. We are compensated for these services on a fixed dollar-per-kilowatt basis.

For those Portfolio Financings with project debt, the Portfolio Company owned by each of our PPA Entities (with the exception of one PPA Entity) incurred debt in order to finance the acquisition of the Energy Servers. The lenders for these transactions are a combination of banks and/or institutional investors. In each case, the debt is secured by all of the assets of the applicable Portfolio Company, such assets being primarily comprised of the Energy Servers and a collateral assignment of each of the contracts to which the Portfolio Company is a party, including the O&M Agreement and the PPAs. As further collateral, the lenders receive a security interest in 100% of the membership interest of the Portfolio Company. The lenders have no recourse to us or to any of the other equity investors in the Portfolio Company for liabilities arising out of the portfolio.

We have determined that we are the primary beneficiary in the remaining PPA V Entity, subject to reassessments performed as a result of upgrade transactions. Accordingly, we consolidate 100% of the assets, liabilities and operating results of the PPA V Entity, including the Energy Servers and lease income, in our consolidated financial statements. We recognize the Equity Investors’ share of the net assets of the investment entity as noncontrolling interests in the subsidiary in our consolidated balance sheet. We recognize the amounts that are contractually payable to these investors in each period as distributions to noncontrolling interests in our consolidated statements of changes in stockholders’ equity (deficit).

Our consolidated statements of cash flows reflect cash received from the Equity Investors in the PPA V Entity as proceeds from investments by noncontrolling interests in the subsidiary. Our consolidated statements of cash flows also reflect cash paid to these investors as distributions paid to noncontrolling interests in the subsidiary. We reflect any unpaid distributions to these Equity Investors in the PPA V Entity as distributions payable to noncontrolling interests in the subsidiary on our consolidated balance sheets. However, the PPA V Entity is a separate and distinct legal entity, and we may not receive cash or other distributions from the PPA V Entity except in certain limited circumstances and upon the satisfaction of certain conditions, such as compliance with applicable debt service coverage ratios and the achievement of a targeted internal rates of return to the Equity Investors, or otherwise.

For further information about our Portfolio Financings, see Note 11 - Portfolio Financings in Part II, Item 8, Financial Statements and Supplementary Data.

Delivery and Installation

The transfer of control of our product to our customer based on its delivery and installation has a significant impact on the timing of the recognition of our product and installation revenue. Many factors can cause a lag between the time that a customer signs a contract and our recognition of product revenue. These factors include the number of Energy Servers installed per site, local permitting and utility requirements, environmental, health and safety requirements, weather, customer facility construction schedules, customers’ operational considerations and the timing of financing. Many of these factors are unpredictable and their resolution is often outside of our or our customers’ control. Customers may also ask us to delay an installation for reasons unrelated to the foregoing, such as, for sales contracts, delays in their financing arrangements. Further, due to unexpected delays, deployments may require unanticipated expenses to expedite delivery of materials or labor to ensure the installation meets the timing objectives. These unexpected delays and expenses can be exacerbated in periods in which we deliver and install a larger number of smaller projects. In addition, if even relatively short delays occur, there may be a significant shortfall between the revenue we expect to generate in a particular period and the revenue that we are able to recognize.

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Performance Guarantees

As of December 31, 2022, we had incurred no liabilities due to failure to repair or replace Energy Servers pursuant to any performance warranties made under an O&M Agreement. For O&M Agreements that are subject to renewal, our future service revenue from such agreements are subject to our obligations to make payments for underperformance against the performance guaranties, which are capped at an aggregate total of approximately $524.5 million (including $416.6 million related to portfolio financing entities and $107.9 million related to all other transactions, and include payments for both low output and low efficiency) and our aggregate remaining potential liability under this cap was approximately $477.9 million against future O&M Agreements subject to renewal. For the year ended December 31, 2022, we made performance guarantee payments of $12.1 million.

International Channel Partners

India. In India, sales activities are currently conducted by Bloom Energy (India) Pvt. Ltd., our wholly owned subsidiary; however, we continue to evaluate the Indian market to determine whether the use of channel partners would be a beneficial go-to-market strategy to grow our India market sales.

Japan. In Japan, sales were previously conducted pursuant to a Japanese joint venture established between us and subsidiaries of SoftBank Corp., called Bloom Energy Japan Limited (“Bloom Energy Japan”). Under this arrangement, we sold Energy Servers to Bloom Energy Japan and we recognized revenue once the Energy Servers left the port in the United States. Bloom Energy Japan then entered into the contract with the end customer and performed all installation work as well as some of the operations and maintenance work. As of July 1, 2021, we acquired Softbank Corp’s interest in Bloom Energy Japan for a cash payment and are now the sole owner of Bloom Energy Japan.

The Republic of Korea. In 2018, Bloom Energy Japan consummated a sale of Energy Servers in the Republic of Korea to Korea South-East Power Company. Following this sale, we entered into a Preferred Distributor Agreement in November 2018 with SK ecoplant for the marketing and sale of Bloom Energy Servers for the stationary utility and commercial and industrial South Korean power market.

As part of our expanded strategic partnership with SK ecoplant, the parties executed the PDA Restatement in October 2021, which incorporates previously amended terms and establishes: (i) SK ecoplant’s purchase commitments of at least 500MW of power for our Energy Servers between 2022 and 2025 on a take or pay basis (ii) rollover procedures; (iii) premium pricing for product and services; (iv) termination procedures for material breaches; and (v) procedures if there are material changes to the Republic of Korea Hydrogen Portfolio Standard. For additional details about the transaction with SK ecoplant, please see Note 17 - SK ecoplant Strategic Investment.

Under the terms of the PDA Restatement, we (or our subsidiary) contract directly with the customer to provide operations and maintenance services for the Energy Servers. We have established a subsidiary in the Republic of Korea, Bloom Energy Korea, LLC, to which we subcontract such operations and maintenance services. The terms of the operations and maintenance are negotiated on a case-by-case basis with each customer but are generally expected to provide the customer with the option to receive services for at least 10 years, and for up to the life of the Energy Servers.

SK ecoplant Joint Venture Agreement. In September 2019, we entered into a joint venture agreement with SK ecoplant to establish a light-assembly facility in the Republic of Korea for sales of certain portions of our Energy Server for the stationary utility and commercial and industrial market in the Republic of Korea. The joint venture is a variable interest entity (“VIE”) of Bloom and we consolidate it in our financial statements as we are the primary beneficiary and therefore have the power to direct activities which are most significant to the joint venture. The joint venture facility became operational in July 2020. Other than a nominal initial capital contribution by Bloom Energy, the joint venture is funded by SK ecoplant. SK ecoplant, who currently acts as a distributor for our Energy Servers for the stationary utility and commercial and industrial market in the Republic of Korea, is our primary customer for the products assembled by the joint venture. In October 2021, as part of our expanded strategic partnership with SK ecoplant, the parties agreed to amend the JVA to increase the scope of assembly work done in the joint venture facility. The joint venture was further developed in 2022.

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Comparison of the Years Ended December 31, 2022 and 2021

A discussion regarding our results of operations for 2022 compared to 2021 is presented in this section. A discussion of our results of operations for 2021 compared to 2020 can be found under Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2021.

Key Operating Metrics

In addition to the measures presented in the consolidated financial statements, we use certain key operating metrics below to evaluate business activity, to measure performance, to develop financial forecasts and to make strategic decisions:

•Product accepted - the number of customer acceptances of our Energy Servers in any period. We recognize revenue when an acceptance is achieved. We use this metric to measure the volume of deployment activity. We measure each Energy Server manufactured, shipped and accepted in terms of 100 kilowatt equivalents.

•Product costs of product accepted in the period (per kilowatt) - the average unit product cost for the Energy Servers that are accepted in a period. We use this metric to provide insight into the trajectory of product costs and, in particular, the effectiveness of cost reduction activities.

•Period costs of manufacturing expenses not included in product costs - the manufacturing and related operating costs that are incurred to procure parts and manufacture Energy Servers that are not included as part of product costs. We use this metric to measure any costs incurred to run our manufacturing operations that are not capitalized (i.e., absorbed, such as stock-based compensation) into inventory and therefore, expensed to our consolidated statement of operations in the period that they are incurred.

•Installation costs on product accepted (per kilowatt) - the average unit installation cost for Energy Servers that are accepted in a given period. This metric is used to provide insight into the trajectory of install costs and, in particular, to evaluate whether our installation costs are in line with our installation billings.

We no longer consider billings related to our products to be a key operating metric. Billings as a metric was introduced to provide insight into our customer contract billings as differentiated from revenue when a significant portion of those customer contracts had product and installation billings recognized as electricity revenue over the term of the contract instead of at the time of delivery or acceptance. Today, a very small portion of our customer contracts has revenue recognized over the term of the contract, and thus it is no longer a meaningful metric for us.

Product Acceptances

We use acceptances as a key operating metric to measure the volume of our completed Energy Server installation activity from period to period. Acceptance typically occurs upon transfer of control to our customers, which depending on the contract terms is when the system is shipped and delivered to our customer, when the system is shipped and delivered and is physically ready for startup and commissioning, or when the system is shipped and delivered and is turned on and producing power.

The product acceptances in the years ended December 31, 2022 and 2021 were as follows: