Christopher Ellinghaus: The revenues were surprisingly good, but Jan was talking about the margins. Can you give us any more color on the shifting? And what does this tell us anything about the Wellhead margin, for instance?
Robert Piconi: Sure. Yes. Let me comment on that. And I think Jan Kees mentioned this. But in any quarter, we’re going to be taking deliveries. And in particular, if you do the math on the second half ramp for us and the fact that we’re reaffirming our guidance, we took deliveries of a lot of material in Q3 and under POC accounting and GAAP accounting until we add value to some of that material, some of the profit on it does not get recognized. So hence, there’s some delay as we’re going to be now in the middle of adding value as we’re integrating equipment, for example, and doing more of the services onsite, which as you saw in some of the earlier quarters drove some of the higher double-digit margins. So it is a little bit lumpy, Chris, and as you can expect, in an EPC type of business for the shorter duration type of solutions we’re providing.
But I also want to make sure you’re aware that none of that quarter’s gross margin has anything to do with anything on Wellhead. So Wellhead was a successful project that we implemented. We did it on time. There were no LDs impacting gross margin. And so, that’s not a reflection on the Wellhead piece. It’s more of a reflection of we have a 440-megawatthour project, of which there’s a very large substantial component of that project, almost 70% of it is related to the battery portion alone, which that is going through the overall project because we’re integrating the entire thing. So I’d look at this more of a timing of where we are in the second half ramp. And I think we can expect these things to smooth out a bit more as we go forward.
Christopher Ellinghaus: Okay. Great. I think the press release sort of suggests there are additional projects in Nevada. Can you give us any color on what you’ve added to the pipeline there?
Robert Piconi: I don’t know how specific on Nevada we were in the release, but we’ve added more projects in the U.S. for sure as part of our bookings growth. And in addition, I mentioned this before, we’re seeing a very interesting uptake in our gravity applying some of our gravity technology to some very specific customer needs and specifically in the utility space in the West. So we’re going to be saying more about those things as we progress those through definitive agreements with customers. But suffice to say, I’m very encouraged by what I’m seeing in terms of market book development, adoption and discussions around applying our various technologies. And that includes, by the way, the backup systems and approach that we started with in the first project with PG&E.
Christopher Ellinghaus: Okay. Just looking at the income statement, SG&A and R&D lines specifically, are either of those two sort of starting to hit their normalized run rate for the near term?
Robert Piconi: Yes. By the way, great question and observation. I would say that we’re generally there, meaning if you take our Q4 times for last year, you’ll see that we’re quite a bit below that. Obviously, the Q4 has some onetime items, but even if you normalize it, we’re actually running flattish to slightly even down from the Q4 times for last year. Now we had initially had a growth investment plan even on OpEx this year, and we’ve adjusted that just by nature of where the markets are, obviously, given what we’re seeing on both the macro and I think given investor requirements here in a higher inflation environment. So we got in front of that in the first half of the year. We’re seeing some of those results now, and we’re continuing to look at that as we look at next year because we’re very focused on not only any one quarter of cash flow or adjusted EBITDA, I guess, positive.
But doing that for the full year, and we’ll be able to update that as we give guidance at the next quarterly earnings.
Christopher Ellinghaus: Okay. Great. I appreciate the color. Thanks, Rob.
Robert Piconi: Thank you, Chris.
Operator: Your question will come from Thomas Boyes with TD Cowen. Please go ahead.
Thomas Boyes: Thanks for taking my questions. I appreciate it. I was hoping if you could provide some insight on the company’s Vault-Bidder solution that was introduced, they’re at already plus. What does customer feedback been like there? And then maybe what’s kind of the time frame to have that solution deployed with customers?
Robert Piconi: Great. Good to hear you, Thomas. Yes, look, this is really exciting and a part of the development of our software platform and investments we’ve been making really the last 24 months. But this is giving additional capabilities to customers to look at optimizing their economic both charging and discharging of electricity in some unique ways. Just to remind everyone, we have a team made up of — well Energy Vault a newer company. Our team is made up of people that were at some of the leading companies in the software and the integrator space through essentially the periods from 2012 and beyond. And so we’ve essentially taken a lot of that experience and looked at how we can help customers optimize how they’re going to get more out of their systems.
