A class action lawsuit was filed against Fluence Energy Inc. (FLNC) by Levi & Korsinsky on March 11, 2025. The plaintiffs (shareholders) alleged that they bought FLNC stock at artificially inflated prices between November 29, 2023 and February 10, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Fluence Energy stock during that period can click here to learn about joining the lawsuit.
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Fluence Energy is enabling the clean energy transition by providing energy storage products and services, as well as cloud-based software for renewables and storage. Fluence Energy was born in 2018 through a joint venture formed by two of the world’s largest energy storage companies; Siemens AG (SIEGY) and The AES Corp. (AES).
The company’s claims about its relationship with founders-turned-customers Siemens and AES, and growth prospects of Fluence’s battery energy storage business, are at the heart of the current complaint.
Fluence Energy’s Misleading Claims
According to the lawsuit, Fluence Energy and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the Company’s relationship with its founders and largest sources of revenue, and ancillary issues, from SEC filings and related material.
For instance, during the Class Period, the defendants continued to express confidence in Fluence’s energy storage business. The CEO stated during an earnings call that Fluence was proactively securing future performance by strengthening its battery supply for fiscal years 2024 and 2025, enabling the company to meet the growing demand.
However, the company did warn in its annual report that its controls related to its estimate at completion (EAC), which is used in the company’s percentage of completion (POC) accounting for its battery energy storage solutions were not effective.
Furthermore, during an August 8, 2024 earnings call, the CFO reiterated the company’s fiscal 2025 revenue growth guidance of 35% to 40%. The forecast was made by considering its Fiscal 2024 revenue guidance midpoint of $3 billion as a base. During the same all, the CFO rejected all allegations made by short-seller Blue Orca Capital. The CFO added that the Board’s Audit Committee had conducted an investigation, with the assistance of an outside counsel and forensic accountants, and concluded that all allegations in the report are “without merit.”
However, subsequent events (discussed below) revealed that Fluence Energy misled investors about its revenue expectations from its battery storage unit, despite knowing that Siemens and AES were planning to divest their investments.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business and prospects during the Class Period. Importantly, the defendants are accused of misleading investors regarding the company’s expectations for its battery storage business.
The information became clear via partial disclosures made in a Blue Orca Capital report released on February 22, 2024. The report accused Fluence Energy of strained relationships with Siemens and AES due to engineering failures and alleged fraud. The final truth became clear on February 10, 2025, when Fluence reported disappointing financial results for Q1FY25.
Fluence reported a net loss of $57 million, or $0.32 per share, which came in wider than the prior year quarter’s loss of $25.6 million or $0.14 per share. What’s worse, Fluence lowered its full-year Fiscal 2025 revenue guidance to a range of $3.1 billion to $3.7 billion, significantly lower from its previous outlook of $3.6 billion to $4.4 billion. The company attributed the reduced outlook to “customer-driven delays in signing certain contracts” and intensified competition. Following the news, FLNC stock collapsed 46.4%.
To conclude, the defendants allegedly misled investors about the company’s deteriorating relationship with Siemens and AES, which were also impacting its future revenue expectations. Owing to these challenges, FLNC stock has lost 69.6% so far this year.
