Fluence Corporation - Contrasting trends continue

The contrasting trends observed in Q3 continued into Q4. While Custom Engineering Solutions (CES) sales stalled, Smart Product Solutions (SPS) grew substantially (doubling q-o-q). Guidance for SPS to rise ‘at least’ 20% in FY20 appears prudent given current uncertainties over China. However, it probably understates the commercial progress made in the last six months. We trim our FY20 top-line forecast, but with financial closure on the Ivory Coast contract achieved, Fluence should still be EBITDA positive.