Good afternoon, and welcome to the Bloom Energy First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder this conference call is being recorded. I would now like to turn the conference over to Mark Mesler, Vice President of Finance and Investor Relations at Bloom Energy. Please go ahead.

Thank you, operator. Good afternoon all, and thank you for joining us on Bloom Energy's first quarter 2020 earnings conference call. To supplement this conference call, we have filed our Q1 2020 shareholder letter and earnings release with the SEC and have posted it along with supplemental financial information that we will periodically reference throughout this call to our Investor Relations website. The matters we will be discussing today include forward-looking statements regarding future events and the future financial performance of the company. These statements are subject to risks and uncertainties that we discussed in detail in our documents filed with the SEC, specifically the most recent reports on forms 10-K and 10-Q, which identify important risk factors including those related to the COVID-19 pandemic that could cause actual results to differ materially from those contained in the forward-looking statements. These include statements about the effects of COVID-19 on the company's business results, financial position, liquidity and outlook. We assume no obligation to revise any forward-looking statements made on today's call. During this call and in our Q1 2020 shareholder letter, we refer to GAAP and non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with U.S. generally accepted accounting principles and are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. A reconciliation between the GAAP and non-GAAP financial measures is included in our Q1 2020 shareholder letter. Joining me on the call today are K. R. Sridhar, Principal Co-Founder and Chief Executive Officer; and Greg Cameron, Bloom's new Chief Financial Officer. K. R. and Greg will review the operating and financial highlights of the quarter, and then we will take questions. I would also like to note that we are all dialed into this call remotely so we apologize in advance for any audio issues that may occur. I will now turn the call over to K. R.

Good day. Thank you, Mark and thanks to all of you for joining this call. These are unprecedented times and on behalf of all of us at Bloom, I send out prayers to those gravely impacted by COVID-19. We sincerely thank the heroes on the frontline, who have been relentlessly fighting the virus. I hope that those of you joining us today and your loved one are staying safe. I want to start by talking about COVID-19 and its effect on our business and the marketplace. Then I'll talk about our results and accomplishments this quarter. I will then turn it over to Greg Cameron, our new CFO to talk about the financial results, our balance sheet, steps we have been taking to de-risk our business and our outlook. I'll close with a few summary comments. Bloom Energy has continued to operate an essential business throughout this crisis. Our manufacturing operations, maintenance and service functions, and field installation teams have continued to work and sustain our core business. Above and beyond maintaining the continuity of our core business, the Bloom team answered a call to refurbish ventilators and delivered over 1,200 of them in working conditions to hospital at a time of national need. As importantly, we powered two pop-up field hospitals during this crisis with clean, reliable electricity using Bloom servers. In one case, we went from a standing start to powering the hospital in five days, showcasing the time to power capability of our solution. In another example, we upgraded an existing grid parallel installation with our always on micro grid option and routed to secure power to a field hospital in just three days, demonstrating the speed, flexibility and adaptability of our solution to meet the changing needs of our customers. I want to thank all of…

Thanks, K. R. First, let me begin by saying I'm very excited to take on the CFO role at such a category creating growth company. I'm here, because I sincerely believe in this company's mission and the basic societal need for the power it provides. I recognize the ability of our technology to transform how power is produced, delivered and consumed around the globe. No doubt, it's an interesting time to join a company. But what has really struck me is a deep belief of everyone in the mission of this organization and a desire to achieve real results for our partners, customers and shareholders. And I'm looking forward to bringing my experience in finance and operations, as well as GE rigor and best practices to bear on the behalf of Bloom. I officially became a Bloom employee on April 1st. Prior to joining I spent time learning about the business, industry and customers. I was also involved as K. R. mentioned at the tail end of the debt refinancing and had the opportunity to work with our finance team and partners to reach an agreement. I'm very impressed with our team. Over the past few weeks, I've also enjoyed meeting, either by phone or video or sell side analysts in connecting with some of our investors to hear their feedback. My guiding principle here at Bloom is to be open and transparent with the financial community. And overtime, I look forward to simplifying our financial reporting, and making it easier for you to understand and evaluate our financial health. Now, let's turn to the financials for the quarter. For your reference, we provided a summary of key financials along with a summary P&L and balance sheet. I don't plan to walk through each slide. But I do want to…

Thank you, Greg. I'd like to close by emphasizing the following. One, amid the COVID-19 pandemic, we delivered on our financial and operational guidance for the first quarter and we were able to successfully refinance our debt and strengthen our balance sheet. Number two, we entered the year with a backlog of over $1 billion worth of system that remained solid throughout this crisis. Those contracted systems have the potential for an additional $1.1 billion in service revenue from high quality established customers. And our installed fleet has more than $2.1 billion of service revenue to be recognized in the future. Number three, this table backlog combined with our demonstrated ability to operate as an essential business, the reopening in South Korea, signs of progress in California and the Northeast give us optimism about our prospects for the rest of the year and beyond. Number four, we have a leadership team and board that is seasoned in crisis management. We have taken steps to derisk our business by managing our costs and preserving cash. We have done so while affording ourselves the flexibility and optionality to ramp up our business quickly as we emerge from this crisis. We are also ensuring that we are preserving and protecting our innovative edge. This will allow us to further cement our leadership position and emerge even stronger in the future. Number five, the situation around the world underscored that reliable, clean, safe, cost-effective, localized power is a critical need for all people. As we emerge from this crisis, we expect air quality related to power generation to be an important topic as a result of COVID 19. As we return to a more normalized operation post COVID, we intend to work to help businesses and communities that are increasingly taking their energy needs into their own hands in order to deal with major disruptions and challenges. I could not be prouder of our team's efforts during this challenging time. Thank you again with that. We will now take your questions.

[Operator Instructions] Your first question comes from the line of Stephen Byrd from Morgan Stanley.

Hey, good afternoon. I hope you all are doing well.

Hey Steven, we're doing well. Thanks for asking and I hope you and your family and all of Morgan Stanley staff are doing well too.

Thank you very much and Greg, congratulations on the new role. Look forward to working with you. I wanted to just touch on the first on the point about, 2Q guidance. And Greg and K.R, I think your commentary was clear as I understand it. Just given the uncertainty of acceptances given restrictions like building access restrictions driven by the shelter in place rules. It's challenging to be able to give second quarter guidance because acceptances of course are driven by installations and I think I understand that. As you, think about states starting to gradually relax their shelter in place requirements, I'm just not familiar enough with how that would impact specifically, customer acceptances on site. How quickly can that come back or is that potentially going to be a little bit lagging because you need permitting offices to be restaffed and other things that could take a little bit longer to actually get back in place? I'm just not familiar with how that sort of restarts.

So, that's a very good question, Stephen. And if you remember our cycle, the first six months since we have an order to install an order is when we go to permits with the local cities. We go to with permission to database. And then we do the design working with our customer and any upgrades that's needed at the customer site. The actual installation process itself can be a matter of weeks to two to three months depending for most projects. There are some projects that’s fallen either side of the spectrum, but that’s just a spectrum for you. So it is very easy for us when things are moving forward, especially when you look at projects that are to be accepted this quarter. You have something installed if you get a go ahead already even a few weeks prior to the end of the quarter, you should be able to install and have access to it. So, it is going to purely depend for this quarter, which is your question. We should be able to pull-in some sites, many sites, if we have given access and permission in the next couple of weeks, next three weeks so to say. And we are seeing signs of that. We are optimistic. But as you very well know, it is extremely difficult to handicap that on a day-to-day basis sitting on chair.

Understood. And so with that, it's just difficult because you just can't predict the behavior of customers in terms of their staffing or their facilities. Their final sign off to accept and allow delivery and that's driven by lack of availability of people onsite. And I guess other issues like that.

And one thing we have seen though that I have to emphasize is the customers realize the importance and need for our product, especially at this time. Many of them are essential businesses. The last thing they want is not have power and they clearly understand it. Basically hospitals understand the need for this clean power. They want to get it done sooner. So we have not seen customers asking for us to delay the installation of their projects. As soon as we have local jurisdiction permissions to move forward in certain places, we should be able to move. And we have seen in California for example, we are being given permission to do those things. So we are optimistic that will happen in the Northeast too.

Understood. And then just as a follow-up, your system installed costs went down quite a bit, which is very encouraging. I think from about $4,500 down to about a little over $3,500. Would you mind just talking to the outlook for product costs? And I guess certainly COVID I guess can have some impact on cost. But just on maybe a more normalized level, where do you see product costs trending? We're obviously seeing some improvement there. And I'm curious what the outlook is.

So, what we would tell you is look for the long-term trend because when you include both the product cost and the install cost, it'll purely depend on the mix of the product. So depending on what kind of an install it is, you can have a spectrum of install costs. However, here is the most important thing is Bloom's product cost per kilowatt continues to drop even in our 5.0 platform at that roughly 20% a year numbers that you've seen before. And we are continuing to bring down the cost of the current platform, which is doing extremely well for us. And you're absolutely right to point that out. And we are again on the install side, looking at every best practice there is to bring those costs down. So ultimately a, we give our customers a great price on electricity and b, we get a good margin for flow. So we are continuing to do that. Greg, would you add anything to that?

No, I would just emphasize the point around the mix of products of projects that we're doing. While overall for sure the long-term trend around product cost continues to decrease. And on installation costs a quarter over quarter change, either this quarter or in the future could be more driven by the mix of projects that we have and the installation type that's there. So our focus is definitely to drive that down over time. But if you get any more complex, more difficult installation, it may drive up a cost on a particular project. So on an average it may increase, but overall the trend will continue to go down.

So Steven, I would summarize it as the following. Don't look at the weather, look at the climate. Quarter-to-quarter would be your weather pricing. But here's what the climate is. Since they introduced this 5.0 product, we have done amazing cost reductions over and over and over again, and the product is performing better on the field. Now we are working on the install costs to come down and service costs is to come down. So that combination put together with the electricity prices going up in the utility creates a very good opportunity, both for customers to get a value proposition and for us to commend the margin.

That's helpful and fair point. The selling price went down, $500 per kilowatt, and part of that, I presume can be mix, but the cost went down $1000. So, I guess the climate result is a higher profit per kilowatt, which I guess is the ultimate goal. Thanks very much. I'm going to let others ask questions. Thank you very much.

Your next question comes from the line of Paul Coster from JPMorgan.

Yes, thanks very much for taking my questions. Greg, welcome to the fray. And I've got a few quick ones. First up if you look at the backlog, and you look at accounts, receivables and so on. Do you see any credit risks or industry specific risks, hospitality this brings to mind, some education facilities, where we should be focused? Thank you.

Yes. I'll take that one, Paul and thank you for the welcome. It's an interesting time as I said to join a company and to meet a new team. Listen on the on the backlog as well as our installed base we monitor that very closely, given the service component as well as our future installation. We have, it's a as KR as went through the names that is a very strong list of customers that are there today, we have not had any issues and will continue to monitor that going forward. On the AR side there's very little trade receivables that we carry at any particular quarter went through that with a theme or closing process not to forget that. Other than to many material amounting nothing related to revenue. We haven't had any pressure on our AR given the current environment.

Okay. Quick follow up on your point about inventory. I was just trying to decipher what the meaning here that you said the inventory level supports revenue is similar to last year, in the second half of this year, but what was the point of that. Because obviously there's risk of, well that's not going to happen, right?

Yes. So, listen, I think part of it comes in is how we came into the year right. The team had a very strong finish to the year in the third and especially into the fourth quarter around taking orders that we would expect to install in the second half of this year. So as they looked at the forecast there and looked at the amount of capacity, we had in order to deliver those units from a manufacturing standpoint, we made the decision, the team made a decision early on to pre build those systems and leave those in inventory. And we would have those to meet the surgeon acceptances in the second half. So, I just really wanted to make sure I highlighted that. Now if you look at the inventory balance on our balance sheet that may stay flat year-over-year and you got to dig a bit into our footnotes and see that we increase the amount of finished goods in our inventory balance. So more finished versus a whip or raw. And then as well there's other places on the balance sheet that we can point out to you on where we may have shipped units ahead of time based on the type of contractor that's there. So, as we get in through the rest of the year, we're going to hold our manufacturing capacity about the same as acceptances grow and we hope to work our way through the risks that we talked about from a revenue recognition standpoint. But as we continue to ship more units, that inventory will move out to the conference site and hopefully it will actually become acceptances and we'll have that inventory to support a larger number of acceptances in the second half than the first half.

Okay. So thing that come into the year, you started to ramp-up some expenses in readiness for the next generation server right. And now you've got inventory finished goods inventories included sitting there, I'm assuming on current generation service. Is there anything in this scenario that delays the transition to the 7.5 server? And what does this also mean in terms of customer sort of bookings customers' readiness for that server or some of them hanging back until they see what it delivers?

Well, that's a great question. This is KR. Good afternoon to you and I hope you and your family are staying safe. So look here's the beauty of our business, right. Our customers more than 90% somewhere in the 90% range pretty much buy electricity that comes from our servers. They don't buy a particular model of a device, they don't. It is not like a cell phone business where if you went out and said, I'm coming out to the new model somebody is going to wait to buy, not by the old model till the new model comes. None of our contracts the $1 billion plus and whatever else is in the pipeline. Does the customer specify that they want this particular model server or not? So the first thing you need to understand this, neither with our backlog, nor with our prospective customers, nor ordinary sales outreach, that timing of a new product, impair our ability to sell. That's the first point. The second one is our 5.0 product continues to do and bring the cost down continuously even better than what we were originally planning. So, that's number two. Number three on 7.5, I'm very happy to report to you that our prototypes we have built now multiples of these power modules and put them together in a system, lots of operating types. And they are performing to technical specs and doing extremely well. Not to be surprised. This is the first time this team is bringing out that next generation product and every single time they are fitted out of the park. This is no different. What we are doing right now is to say, let's take this extra time that we have right now and further reduce the cost because the team is able to see even further improvements to performance, and further improvements in cost compared to the prototypes that they've done. We're going to do that so when we launched the product, it will even be a better product for us financially and a better product for the customer. And in doing so we can use our existing resources, our existing engineers to be doing that with the inventory we have. We don't have to ramp up on that inventory right now. So it helps us in multiple ways. Number one, it makes us launch the product even better. Number two, it helps us be prudent with cash at this point in time, which is the right thing to do.

Got it. Thanks. I've got one last question. I do apologize for the flurry of questions here, the sales team and their effectiveness. Is COVID-19 gaining in the way of finding customers developing the pipeline closing deals and getting bookings?

Very good question Paul. And what we are seeing is an increased interest from the sectors that you would expect, essential businesses. The fact that we did these two pop up hospitals. The fact that we were doing ventilator alone, created quite a bit of awareness within the hospital sector for us. On top of that, when we were doing the pop up hospitals. So the strong interest from the hospital sector. So we're getting inbound calls are saying, can you provide this power to us. And that should make sense. How can a hospital that's trying to cure people of the respiratory illness have backup generators that few dirty chemicals that affect the respiratory health of a patient as their backup? That just absolutely makes no sense. And we have a great option. So we are finding inbound calls coming in from the hospital sector, coming in from the manufacturing sector and from food services, which now understands why they need to stay on no matter what. So, the funnel is robust. The sales team is extremely busy. The sales team is also working on some strategic channels and partners in very early stages. So they're extremely busy. However, I think what you pointed out the signature cycles that are required at the very large last stage from the executives given that they are dealing with the immediate tactical save my business now issues. Those closing of those orders will get pushed out by a little bit. But given our long sales cycle and given that these orders are not required for us to fulfill for a while, it is not impacting our business at all.

Great, thank you.

And your next question comes from the line of Michael Weinstein from Credit Suisse.

Hi guys. I just wanted to say congratulations again to Greg. And also, good work on the ventilators in California. Hey, I wanted to ask you a little bit more about the profit per kilowatt and the ASP and TISC statistics that you put out. Looks like there's a big change from the way it was presented in the Q4 release and the Q1 release, especially if you look at the Q4 '19 numbers, looks they look pretty different in this latest release. Can you explain that a little bit?

Yes, I can take it first and then Mark can add more details, since are working in the fourth quarter. As we have gone through the process of cleaning up on our statement and work through that there may have been some issues to just presentation and what our '19 numbers are to what our '20 numbers. But anything that we’re putting out now should be on a consistent basis and able to drop these off it. I'm looking at Mark, on the video, making sure that I stated that correctly and he's giving me the thumbs up.

I guess what I'm going to assume is that maybe now you pulled out the leases that you're not allowed to account for that COVID.

Yeah, I'm getting number back, Michael and make sure that's the case and circle back to you if it's not, but overall the trench is presented now. It should be on the same basis.

A related question is you have a nearly pretty big increase there. $651 profit per kilowatt going up to $1,055 quarter sequentially. But the gross margins are pretty consistent going from the 15% range up to 16.2% or so in this quarter. Is that because one includes leases and one does not, what's the main reason why that, what is the difference there?

No, I think they're both going to be presented on the same way and revenue is going to be recognized the way we recognize it and we'd have it in our revenue and EBITDA all on the same basis. So I think from doing any comparison on a quarter to quarter basis, whether it's on ASP or on profit, you have a little bit of just what the mix is on the revenue and in the variables there. I talked a little bit before about the installation costs being a little bit different than - and that would drive an increase in revenue but not an increase in margin if that to pass through to our customers. But you also have the geographical location of our customer, the type of solution that we're providing to that and the complexity of the install. So all that would be included in those numbers and drive the variances on a quarter over quarter.

So what's the thing that you think is different between those two data sets though or those two tables? What's the included in one not good and the other?

Yeah. I mean, what we presented last year versus this year, that difference would be the changes that we implemented at the end of Q4 ….

Not just that, the difference on a per kilowatt basis versus an overall gross margin number.

Yes. Other than mixed Michael, I'd have to sit down with you and go through it.

Okay, fair enough. And can you maybe kind of give us a preview of the second half will differ from the first half in terms of gross margin percent improvements? And where do you think costs TISC will go and ASP might go in the second half as you ramp up on acceptances?

Yeah, I think our overall… KR you want to take it….

Michael you're asking some forward looking numbers which we don't present. Were you trying to make the new GAAP model? So I was trying to make sure that Greg doesn't answer that question before I had a chance, and I'll follow there. If we are in the room, I would've said I'm taking this, but this is the problem of... But anyways, look like I said, our material cost continues to come down quarter over quarter. Okay. We are doing good progress. So you should be seeing an impact relating to that. Number two, we are knowing that we are in this regime, there's a slide up there that then go through. We are trying to be as conservative as we can with our cash. And that should also have an impact on what you see in terms of margins. Now separately, what you would have seen in 2017, 2018, 2019, this is where I can walk you through is in the second half has had greater volume and is more robust than the first half. And because of that, the absorption numbers get better, the overhead numbers get absorbed better and you see a benefit coming from that. Assuming 2020 is that way and I gave you the reasons why we should be optimistic that it is that way. We should be able to see very similar trends there also. So those are, if you're asking me what the drivers are those are the drivers. And at this point in time we're trending well and all those drivers.

Okay. One last question, California wildfire season starts in May typically. That's right about now. Are you guys seeing preparing for any kind of major uptick in sales interest in California as a result of that?

Look, I think there is a significant opportunity there. And a lot of our customers have been asking us, will you be able to install in a very short notice if we need you to install and we are preparing ourselves. And I want to make a point up here, Michael that you would have seen in the deck, I mentioned it but it's worth mentioning. On this one project, there we had the cooperation of the state, the local utilities, the local government and our customer. From the day we got a green light to the day we installed was five days. We have told you our typical install cycle is 9 months to 15 months, that 9 month to 15 month got shrunk in five days when the need was there. So in a pandemic war, if you have to shelter-in-place, evacuation is not an option. So microgrids for critical infrastructure is the way to go. And we can do this rapidly with what we have today. And we will be reaching out - you can believe that we will be reaching out to local governments and saying why don't you allow us to do.

Very interesting complement to the disasters that saves the state. Thank you very much and have a good night, guys.

Thanks, Michael.

Thank you.

Your next question comes from the line of Jeff Osborne from Cowan and Company.

Good afternoon. A couple of questions on my end. KR, in terms of the gen 7.5 recognizing you're not selling products, but it certainly expands the market for your sales folks to go out and offer additional states and countries et cetera. I just wanted to follow-up on Paul's question. Is that product still slated to launch in the Q4ish timeframe?

That product will be out for field trials like we told you in the end of Q4. How exactly the sequence of ramping it out or we ramp it out? It's not something they've given you other than it'll happen next year. And that is still our intent and that's what we do. But we're taking - what I'm trying to say, we're taking extra time to make sure even by the time we launched that product, that product has very close to cost parity that we would like to see, and give us the advantages that we need to see. But we will be having field trials out in the field end of this year, like we're good.

Got you. And is there any lessons learned or customer behavior, and it goes from Korea, as they've recovered. And how that might transpire in the U.S. or in Korea? I no piece of the business is tenders and RFPs for larger projects that are utility run. It's my understanding, but so I'm not sure how applicable it is, but I was just curious any comments that line of questioning?

Look, that's a very good question, Jeff. And one of the things that we noticed, we had a call a couple weeks ago with our counterparts, SK or like other partners in South Korea. And what we see, what we actually see and what we heard from them. There was a pause, there was a moratorium very similar to the moratorium sort here on working on construction, things like that. But the very first lifting of those moratoriums, the reopening, happened in construction and construction method relates to infrastructure. And so you will see a picture in our staff showing a 19.8 megawatt installation that got finished construction after they reopened, and it's imminently going to be accepted. That is one. The second thing in addition to that is when we look at our pipeline, and when we look at the funnel, every indication that all those things are moving forward as normal. So they expect, unless something else happens going forward, based on where they are today that their year will look very much like what they have predicted the year to be.

That's great to hear. I might have missed it, but as it relates to COVID-19. Is there any impact to the supply chain or any of your suppliers from Asia or other parts of the world that you're reliant on as you ramp up to the second half that maybe you're concerned about?

So, everybody globally is affected by this. And we were, we had our own challenges, but we have a phenomenal supply chain team. In the Q1, we had no power shortages. In Q1, the team made sure that through global diversity, bringing a few people on and doing what they needed to do, they not only satisfied Q2, but also built us a safety stock. So should there be a short term emergency somewhere we can withstand it while we divert from one part of the globe to the other to get what we need to do and at this point in time, they're busy procuring Q3. So at this point in time, I would say as we sit here, the team's doing a great job managing our supply chain.

Excellent. That's all I had. Thank you.

Your next question comes from Pavel Molchanov from Raymond James.

Thanks for taking the question. You referenced some of the slowdown in deployments due to the lockdowns and stay at home orders. My understanding is in most US states, anything energy related has been classified as an essential business, including installation of new power infrastructure. Are there any particular states where you've had regulatory restrictions?

The answer is yes. And without naming names, towns and cities, here's the dynamics that we have to deal with. There are examples where a state, the state capital and the governor would have issued those orders exactly similar to what you said Pavel, but there could be a local jurisdiction in city, that's later moratorium. And when it comes to construction, I'm not a lawyer, but I understand according to the local laws, that local jurisdiction can basically trump whatever the state puts as a regulation. So, there have been cases where we have been delayed. And here again, we are optimistic by going and showing the importance of what we do. And in most places where we are, you're correctly pointing out by not having that reliable, resilient, clean power. They're subjecting themselves to potential more crisis than disaster season hits, whether it's the hurricane season or the wildfire season or whatever it is, right. So, we are optimistic, but we have experienced delays because of these.

Understood. And a follow-up question regarding India, which has had I think the strictest lockdown maybe of any diction. You don't have a lot of sales there, but some. So I'm curious what the impact was over the last six weeks that India's economy has been completely shut down.

Very good question. So in India, anything relating to infrastructure, the government has actually been doubling up and doing it faster because if you've been to India and the roads are empty, this is the best time to repair the roads, right. So that's the kind of approach they're taking, anything infrastructure related and construction related, it's not a problem. However, the place where we are impacted is any sales opportunities, because pretty much all the offices and all the things that we would have to deal with, are not allowed to work, not allowed to travel, they're not even allowed to get out of home to go to where they need to go. And so I would say that's a delay, but like you correctly pointed out, Pavel, given that it's such a small fraction of our total business, that delay for a few months is not impacting the business but for sure that will get slowed down.

Appreciate that.

Thank you.

And we have time for one more question. Your last question comes from the line of Collin Rush from Oppenheimer.

Thanks so much guys. I was wondering if you could help us understand that the growth in deferred cost it looks like up $20 million in the quarter. Just want to understand that dynamic and I have one follow up.

Yeah. Colin, it's Greg, I'll take that. That's one of the places as we talked about, earlier on our [indiscernible] not necessarily an inventory, but that represents a unit as well as deferred costs on our shipments. So at the end of December, I think about 47ish units were in there. And that's increased, not quite doubled, but increased up 70 or so, low 70s in that number. So a lot of that is so that would be representing systems that we had that we have manufactured, completed, shipped to a customer site or being installed but have not yet taken revenue on and they'll move from there when the acceptance is complete and will move into revenue from there.

Okay, great, thanks. And then just, the borrowings from the related parties, there's about $30 million on the cash flow of the debt, related to or issues related parties. Can you just give me some more specifics on what that is? And I'll let you guys go. Thanks so much.

Yeah. So that was the new debt that we announced at the time of the refinancing. So we took $30 million in from our partners, historical partners for this year, that was that $30 million.

Alright, perfect. Alright, thanks a lot guys.

Thanks. Well, with that, I want to thank everybody for joining our call and we hope all of you and your families will remain safe and healthy as we move through the COVID 19 pandemic. While this has been a challenging period for everyone, our team at Bloom Energy has to remain focus on operating our business and serve the needs of our partners and customers while staying safe and healthy at the same time. And I want to assure you that we are all unwavering in our commitment to continue our mission, to provide clean, reliable, and affordable energy for everyone. The need for this has never been clearer, and the high value of resilient power is more evident now than ever before. We are confident in our long-term strategy, our team's ability to execute it, and our ability to create value for you, our shareholders. Thank you very much for your continued support. Stay safe.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.