Bloom Energy CorpBE
Bloom Energy Corp Commitments Disclosure
Commitments and Contingencies
Commitments
Purchase Commitments with Suppliers and Contract Manufacturers—In order to reduce manufacturing lead-times for an adequate supply of inventories, we have agreements with our component suppliers and contract manufacturers to allow long lead-time component inventory procurement based on a rolling production forecast. We are contractually obligated to purchase long lead-time component inventory procured by certain manufacturers in accordance with our forecasts. We can generally give notice of order cancellation at least 90 days prior to the delivery date. However, we occasionally issue purchase orders to our component suppliers and third-party manufacturers that may not be cancellable. As of December 31, 2025 and 2024, we had no material open purchase orders with our component suppliers and third-party manufacturers that are expected to be realized within more than a 12-month period and are not cancellable.
Performance Guarantees—We guarantee the performance of the Energy Server systems at certain levels of output and efficiency to our customers over the contractual term. We monitor the need for any accruals arising from such guaranties, which are calculated as the difference between committed and actual power output or between natural gas consumption at warranted
efficiency levels and actual consumption, multiplied by the contractual rates with the customer. Amounts payable under these guaranties are accrued in periods when the guaranties are not met and are recorded as service revenue in the consolidated statements of operations. For the years ended December 31, 2025, 2024 and 2023, we paid $18.0 million, $21.2 million and $25.9 million for such performance guarantees, respectively.
Letters of Credit—In 2019, pursuant to the PPA II repowering of the Energy Server systems, we agreed to indemnify our financing partner for losses that may be incurred in the event of certain regulatory, legal or legislative developments and established a cash-collateralized letter of credit facility for this purpose. As of December 31, 2024, the balance of this cash-collateralized letter of credit was $9.5 million. The entire balance of the cash-collateralized letter of credit related to PPA II was released in the second quarter of the fiscal year 2025 and the balance of the funds returned to us.
In December 2024, we issued a $100.0 million letter of credit in favor of one of our major customers to guarantee the performance in accordance with the limited indemnity and cooperation agreement dated November 14, 2024, related to the supply of 100 MW of Energy Server systems. This letter of credit was released in the first quarter of the fiscal year 2025.
In addition, we have other outstanding letters of credit issued to our customers and other counterparties in the U.S. and international locations under different performance and financial obligations. These letters of credit are collateralized through cash deposited in the controlled bank accounts with the issuing banks and are classified as Restricted cash in our consolidated balance sheets. As of December 31, 2025 and 2024, the balances of the cash-collateralized letters of credit issued to our customers and other counterparties in the U.S. and international locations other than PPA II were $26.6 million and $131.2 million, respectively.
Pledged Funds—In 2019, pursuant to the PPA IIIb repowering of the Energy Server systems, we established a restricted cash fund of $20.0 million, which had been pledged for a seven-year period to secure our operations and maintenance obligations with respect to the totality of our obligations to the financier. These funds will be released to us by the end of 2026 as long as the Energy Server systems continue to perform in compliance with our warranty obligations. In the fourth quarter of fiscal year 2025, $6.7 million of restricted cash pledged under the PPA IIIb repowering arrangement was released to us. As of December 31, 2025 and 2024, the balance of the restricted cash fund was $0.9 million and $7.4 million, respectively.
Revolving Credit Facility Letters of Credit and Assets Pledged as Collateral—Under the Revolving Credit Facility entered into on December 19, 2025, we have a $90.0 million sublimit available for the issuance of letters of credit. As of December 31, 2025, no letters of credit have been issued or drawn under the Revolving Credit Facility. Letters of credit, when issued, represent off-balance sheet commitments and may be used to support contractual, regulatory, or operational obligations. We are not currently required to maintain cash collateral for any letters of credit under the Revolving Credit Facility.
In connection with our Revolving Credit Facility, Bloom and certain subsidiaries have granted a first-priority lien on substantially all domestic assets and provided subsidiary guarantees, including a pledge of equity interests in material domestic subsidiaries and 65% of equity in certain foreign subsidiaries, to secure obligations under the Revolving Credit Facility. Additionally, material subsidiaries have provided guarantees of the Revolving Credit Facility obligations. These arrangements do not involve the transfer of financial assets but include pledged collateral and subsidiary guarantees that could have a material impact on our financial position and liquidity.
Contingencies
Indemnification Agreements—We enter into standard indemnification agreements with our customers and certain other business partners in the ordinary course of business. Our exposure under these agreements is unknown because it involves future claims that may be made against us but have not yet been made. To date, we have not paid any claims or been required to defend any action related to our indemnification obligations. However, we may record charges in the future as a result of these indemnification obligations.
Investment Tax Credits—Beginning January 1, 2026, our Energy Server systems may qualify for investment tax credits under the new technology-neutral Section 48E of the Internal Revenue Code, subject to meeting applicable eligibility requirements. Qualified fuel cell property is eligible for a credit of 30% of the tax basis, without regard to greenhouse gas emission rates, provided construction begins after December 31, 2025. The ITC program includes operational criteria that extend for five years following the property’s placed-in-service date. If the energy property is disposed of or otherwise ceases to be qualified as investment credit property before the close of the five-year recapture period, a partial reduction of the incentives may occur.
Legal Matters—We are involved in various legal proceedings that arise in the ordinary course of business. We review all legal matters at least quarterly and assess whether an accrual for loss contingencies needs to be recorded. We record an accrual for loss contingencies when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Legal matters are subject to uncertainties and are inherently unpredictable, so the actual liability in any such matter may be materially different from our estimates. If an unfavorable resolution were to occur, there exists the possibility of a material adverse impact on our consolidated financial condition, results of operations or cash flows for the period in which the resolution occurs or in future periods.
In February 2022, Plansee SE/Global Tungsten & Powders Corp. (“Plansee/GTP”), a former supplier, filed a request for expedited arbitration with the World Intellectual Property Organization Arbitration and Mediation Center in Geneva Switzerland (“WIPO”), for various claims allegedly in relation to an Intellectual Property and Confidential Disclosure Agreement between Plansee/GTP and Bloom Energy Corporation. Plansee/GTP’s statement of claims includes allegations of infringement of U.S. Patent Nos. 8,802,328, 8,753,785 and 9,434,003. On April 3, 2022, we filed a complaint against Plansee/GTP in the Eastern District of Texas to address the dispute between Plansee/GTP and Bloom Energy Corporation in a proper forum before a U.S. Federal District Court. Our complaint seeks the correction of inventorship of U.S. Patent Nos. 8,802,328, 8,753,785 and 9,434,003 (the “Patents-in-Suit”); declaratory judgment of invalidity, unenforceability, and non-infringement of the Patents-in-Suit; and declaratory judgment of no misappropriation. Further, our complaint seeks to recover damages we have suffered in relation to Plansee/GTP’s business dealings that, as alleged, constitute acts of unfair competition, tortious interference contract, breach of contract, violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and violations of the Clayton Antitrust Act. On June 9, 2022, Plansee/GTP filed a motion to dismiss the complaint filed in the Eastern District of Texas and compel arbitration (or alternatively to stay). On February 9, 2023, Magistrate Judge Payne issued a report and recommendation to stay the district court action pending an arbitrability determination by the arbitrator for each claim. On April 26, 2023, Judge Gilstrap stayed the district court action pending arbitrability determinations by the arbitrator in the WIPO proceeding. On October 2, 2023, the arbitrator in the WIPO proceeding issued a ruling concluding that all the parties’ claims were arbitrable.
On November 18, 2023, the arbitrator bifurcated the arbitration into a first phase focusing on Bloom’s claims directed to improper inventorship of the Patents-in-Suit and Bloom’s defective product claims. Briefing on the first phase took place throughout 2024 and the first half of 2025. An evidentiary hearing with witness testimony commenced on July 21, 2025, and continued through August 1, 2025. Post hearing briefs were submitted on October 3, 2025. There is no set time frame for a decision from the Arbitrator on the first phase of the arbitration. We are unable to predict the ultimate outcome of the arbitration at this time.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 9, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 31, 2020 | |
| 2018 | Mar 22, 2019 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.