4Q21 & FY21 Results: Solid Performance Despite a Challenging Backdrop; Strategic Priorities for FY22

  • On June 10, 2021, Capstone Green Energy announced earnings results for 4Q21 and FY21. The company also outlined its strategic priorities for FY22.
  • Gross bookings increased +40% y/y and +21% q/q to $12.7 million, and they have grown sequentially in each of the last four quarters. The company expects to see more backlog in 1Q22 and is excited about the back half of FY22.
  • 4Q21 revenue increased +55% y/y and beat consensus estimates fueled by the microturbine business which grew +145% y/y. FY21 revenue fell -2% y/y amid a challenging macro environment and was largely attributable to the parts & service business. The company is laser-focused on top-line growth heading into FY22.
  • Gross margins were compressed in 4Q21 and FY21 decreasing -$3.0 million and -$2.2 million y/y, respectively. The main driver was a $4.9 million reliability repair accrual established to replace remaining fielded units affected by a supplier defect. On an adjusted basis, gross margins improved y/y for both the quarter and the fiscal year.
  • Net income increased +$2.2 million and +$3.6 million y/y in 4Q21 and FY21, respectively, but diluted EPS missed street estimates by -$0.13 and -$0.23, respectively. Adjusted EBITDA and EBITDA margin also missed estimates, but did see significant expansion y/y. The company anticipates additional margin expansion as volumes increase.
  • The company also posted its highest ever annual operating cash flow at $1.7 million. Cash on hand increased to $49.5 million as of March 31, 2021, from $15.1 million as of March 31, 2020. The increase was largely driven by the $20 million upsize of the company’s Goldman Sachs term note and net proceeds of $15.9 million from its ATM offering.
  • Management did not give specific guidance for FY22 but did layout its strategic priorities and objectives. Heading into FY22, management is focused on building out its comprehensive clean energy solutions to expand the company’s TAM through both organic and inorganic margin accretive opportunities including increased focus on the higher margin EaaS business, rental business recovery, and strategic M&A opportunities. The company expects to capitalize on the multifold growth in microgrid capacity over the next decade through its new sales force, supply chain improvements, and its expanded business development team.



Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.

WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information p...