Fuel cell builder Bloom Energy continues streak of business math errors and lack of profits


pv magazine covers solar power, of course, but the publication also covers solar-plus-everthing, energy storage, hydrogen and microgrids. That provides enough justification to cover fuel cells. (Reasons not to cover fuel cells: they are powered by fossil fuels and are dirtier than the California electric grid.)

Here’s an updated list of profitable publicly-held fuel cell firms.


A likely profitless 2019 brings Bloom’s streak to 76 profitless quarters. (Ballard Power, another fuel cell company has not been profitable since 1979.)

That brings us to Bloom’s most recent business math error, which has the profitless firm restating years of earnings.

According to Bloomberg, Bloom Energy will restate its earnings “after reporting an accounting error that boosted revenues for one of the fuel-cell company’s services. Correcting the error, which the company said was not the result of misconduct, will lower Bloom’s total revenue for the period less than 10%, according to a statement.”

The restatement “increases Bloom’s net loss by $55 million to $75 million for the same period, which stretches from the first quarter of 2016 through the third quarter of 2019.”

Now would be a good time for a quote from an independent accountant, but instead Bloom provides a quote from John Doerr, lead independent director: “We are committed to upholding the highest standards of oversight and compliance.”

According to Bloomberg, “The error involved Bloom’s ‘managed services’ program, one of several ways the company sells its electricity-generating fuel cells. Under the program, Bloom sells fuel cells to banks and enters into service agreements with customers that use the power. The customer pays the bank a fixed fee and pays Bloom for operations and maintenance.”

Bloom claims, “The revenue for the Managed Services transactions will now be recognized over the duration of the contract instead of upfront. Additionally, these adjustments are unrelated to the service business, life of the servers, or service contracts. The adjustment has no impact on Bloom’s total cash and cash equivalents or cash flows and the adjustment does not impact the economic terms or substance of the MSAs”

Bloom also issued an update for Q4 2019:

  • Bloom closed the fourth quarter of 2019 with record backlog of 1,983 systems, an increase of over 43% year-over-year.
  • Bloom had a record number of Q4 2019 and 2019 acceptances of 386 and 1,194, respectively.
  • Consolidated cash balance was $377.4 million, an increase of $19 million from Q3 2019.
  • Bloom has retained Jefferies to run the process to refinance its December 2020 debt maturities

More Bloom Energy math errors 

This is not the first time that Bloom has made math and accounting errors.

Shortly after its IPO in 2018, Bloom CEO K.R. Sridhar told MarketWatch that Bloom would be “cash-flow positive and GAAP-profitable this year.” He also said that Bloom is “a profitable company as of [the second quarter],” and that he expected that trend to continue.

Bloom PR reps quickly walked that back to: “Bloom Energy expects to be GAAP-profitable at the operating level, and thus cash-flow positive, this year, not net profitable.”

Then Dan Primack of Axios noted that Bloom was profitable only on an adjusted operating basis, meaning that the walk-back needed a walk-back.

Bloom was forced to issue a filing, disclaiming those and a few other of its CEO’s utterances: “The company disclaims any statement regarding its expectations for future profitability or cash flows, makes no such forecast or prediction at this time regarding its future operating results, and undertakes no obligation to do so in the future.”

Primack suggested that Sridhar might not “understand or appreciate the difference between GAAP and non-GAAP accounting or cash-flow vs. net income.”

In 2019, Axios and Primack published an investigation of Bloom’s finances outlining a pattern of “overpromising and underdelivering” by the firm’s executives. Axios told the tale of less-than-reputable and now-defunct investment bank Advanced Equities, “following an SEC lawsuit charging its two co-founders with misleading investors about Bloom’s business prospects.” Axios found instances where Bloom executives misrepresented its costs and profit expectations to the press and its own board of directors, “as well as putting both closed sales and mere letters of intent” in the “backlog bucket.”

Back in 2012, when Primack worked at Fortune, he noted that Bloom Energy claimed it had $101 million in pro forma Q3 2012 revenue alone and the firm suggested it would turn a profit.

There’s also this bit of questionable math in calculating Bloom’s CO2 emissions versus the emissions of the California electric grid during an imbroglio concerning a California incentive program.

Bloom is currently trading at $10.70 after going public at $22.60 per share in July of 2018. Bloom expects to release its full-year 2019 results on or before March 16.

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