San Francisco, Calif.–(Newsfile Corp. – January 1, 2025) – Shares of electricity storage and software provider Fluence Energy (NASDAQ: FLNC) are down more than 28% year-to-date as the company continues to see revenue decline amid an SEC investigation into the company’s alleged improper accounting practices.
Hagens Berman is investigating whether Fluence Energy may have violated US securities laws and is encouraging investors who have suffered significant losses to report their losses now. The company is also encouraging people with knowledge who could assist in the investigation to contact its attorneys.
Visit: www.hbsslaw.com/investor-fraud/flnc
Contact the company now: FLNC@hbsslaw.com
844-916-0895
Investigating Fluence Energy, Inc. (FLNC):
Fluence Energy continues to be dogged by allegations of improper accounting.
The company’s troubles first began on February 22, 2024, when the activist was a short seller Capital of the Blue Orcs published a research report accusing Fluence of artificially inflating revenue and profits through aggressive accounting tactics, including revenue recognition schemes and selective earnings adjustments. Blue orcas the report stated, “[i]In our view, Fluence’s purported improvement in recent quarters is a product of accounting plays that have significantly increased revenue growth and Adj. Gross margin, which we think helps explain why Fluence is the third CFO in just over two years.”
Blue orca explained, “we believe much of Fluence’s sales and earnings growth can be attributed to aggressive revenue pullbacks and selectively applied earnings adjustments[]” and “[w]The company is estimated to have inflated its L™ sales growth from 58% to more than 80% in the first quarter of fiscal 2023 simply by rewriting customer contracts that allowed it to recognize revenue from customers prior to product installation.” The company also said that ” selective earnings adjustments inflated its incremental adj. EBITDA by 40% in FY23, and its Adj. Gross margin from 3.9% to 6.6%.”
Fluence Energy tried to calm investors’ nerves by saying that in response to the Blue orca report, the Audit Committee of its board of directors completed an internal investigation, with the assistance of outside counsel and forensic accountants, into the allegations in Blue orca report and that after consultation with the Audit Committee, he believed that the internal investigation showed that the allegations of abuse contained in the Short Seller Report were unfounded.
But on Aug. 7, Fluence disclosed that the SEC was seeking information related to its financial statements and the company’s internal investigation into the allegations. Blue orca.
Since then, Fluence has posted lackluster results over the past two quarters, including the most recent on Nov. 26, 2024, when the company’s reported revenue missed significantly. The company reported a drop in revenue for its third quarter of 2024 and attributed the shortfall to the postponement of two significant projects valued at $100 million and a delay in starting other contracted businesses.
CFO Ahmed Pasha explained that the company’s financial performance will continue to be “underwhelming”, reflecting its focus on a smaller number of high-value projects. This concentration strategy, while potentially lucrative, exposes the company to greater volatility in quarterly results.
The earnings release comes as Fluence continues to navigate a challenging regulatory environment. Last week, the company disclosed that the Securities and Exchange Commission had opened a formal investigation into its accounting practices, prompted by allegations of impropriety made by an activist short seller. Capital of the Blue Orcs earlier this year.
Fluence executives vehemently denied the short seller’s allegations, claiming that an internal investigation conducted with the help of outside counsel and forensic accountants found “zero merit” to the claims. However, the company has yet to publicly release the underlying report and findings of this investigation.
Although Fluence maintains that the SEC’s investigation is unlikely to significantly affect its financial condition, the uncertainty surrounding the investigation has cast a shadow over the company. Fluence shares continue to decline by 25% since the announcement Blue orca report.
Prominent shareholder rights firm Hagens Berman launched an investigation into Fluence’s accounting and financial reporting practices.
“The firm is investigating potential allegations of inaccurate financial reporting by investors,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Fluence Energy and have significant losses, submit your losses now »
For more information and answers to frequently asked questions about the Fluence investigation, read more »
Whistleblowers: Persons with non-public information regarding Fluence Energy should consider their options to assist in the investigation or utilize the SEC’s Whistleblower Program. Under the new program, whistleblowers who provide original information can receive awards totaling up to 30 percent of each successful recovery by the SEC. For more information, call Reed Kathrein at 844-916-0895 or by email at FLNC@hbsslaw.com.
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About Hagens Berman
Hagens Berman is a global complex litigation firm focusing on corporate liability. The firm has a strong practice representing investors, as well as whistleblowers, workers, consumers and others in cases that achieve real results for those harmed by corporate negligence and other wrongdoing. The Hagens Berman team secured more than $2.9 billion in this area of law. You can find more about the firm and its achievements at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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