PLUG - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the Plug Power Inc. Fourth Quarter Year-end 2018 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teal Vivacqua, Director, Marketing Communications. you. Thank

begin. may You

Teal Vivacqua

contained to morning, and to This Full statements. forward-looking include Good harbor the XXXX XXA to believe provisions We forward-looking call to and is Securities important Plug Fourth forward-looking XXXX our of that Act future investors. XXXX. statements statements for these XXE intend Quarter Act of Year of We the of covered communicate expectations Section the and you. in by Section Securities Exchange the safe welcome Power will be Thank Earnings it Call.

rely However, report and forward-looking December uncertainties discussed investors fiscal limited on are may discussed cautioned annual XXXX, not XA actual various item the year and ending under result because to differ risks not Factors unduly factors, involve a risks from in but our those on Form as to they and results XX, Risk for materially statements XX-K uncertainties of including, as statements the At time-to-time well over which are as other do call. to SEC. made any Marsh. day or to I forward-looking and this CEO, only like not the would update of speak Power's These after statements in statements intend we point, from turn the the Andy with to as undertake this reports to we filed Plug forward-looking call

Andrew Marsh

we'll reminder release, and for January, detail thank which fourth Good Today, provide open the for earnings the quarter investors, is to really update we'll our our questions. shareholder as then for for few had we the of In I in the and update customers for prior annual recap well just letter. morning, the results an upcoming in prior will provide and review today. highlights an a of XXXX, floor as described year you our plans our a the both the provides and call employees partners, call to joining year. outlook a

fourth $XXX.X XXXX The we fourth include of positive had $XX.X XXXX. in million the versus of in increase in XXXX. the gross in Some versus $XX.X total highlights $XXX,XXX. really fact billings quarter quarter first gross that the company million adjusted of billings XX% had gross of for XXXX, excited EBITDA fourth bookings XXXX quarter million, quarter about quarter a our We're fourth

positive first that vehicles We've the electric X,XXX delivering in emission in The the quarter. fourth quarter company's achieved history. X by over

qualified, at supplier to Investigation Since qualified May. identified expect -- X.Xx and completely production utilizing also, improperly is produced A the carbon the improperly not We in complete. the in Power P&G first the have cost tank supplier denser the fuel tank of our Plug our in the that units had ProGen XXXX, technology is tank standards. offer field. build with reduction prior in design plate material will are handling first metal Power and membrane finally, metal And volume. our fiber tanks stacks, be XX% ISO manufactured and was stacks than at the in supplier work Plug cell XXXX. in upon of membrane The over largest funding program to target XXXX our Plug coming in Power. will the to year. the manufacturer X,XXX revenue in year, the majority a we building such for our by This to some The that have as the dominated not did of challenges, have approximately That's replacement of the unfortunate impact financial event business. XXX,XXX say XXXX United it This proton States. membranes will become no occurred not success exchange in our program the

in million gross $XXX in adjusted allow to million us building to $XXX Our XXXX. out EBITDA success will in and this billings segment achieve positive

Power's Plug achieve a investors for run rate adjusted confidence and quarter high both EBITDAS provide billings in should these to fourth ability level goals. gross Our of

will this coupled expand America efficiency, effort in with our XXXX intense and to North an include in Additionally, sales hydrogen is improvements business strong. and ongoing costs Europe. service also Value proposition

Power include experienced higher heavy-duty forklift of ideal is Our and fleet applications, give e-mobility pull fuel usage is in density manufacturing. vehicles, in It the field, range, fast for aerial vehicles. simpler cells e-mobility and using Plug vehicles applications and like year in longer products could asset applications for our The cell power benefits support autonomous-guided our past fueling, the company work the our E-mobility design, vehicles ProGen taxis. and in emission multitude cells suite of stack e-mobility trucks, flawless line solutions that membrane been food fuel electric the applications. automotive like vans, the focused providing ground hybrid a on have performance customers are performance, heavy our in applications a applications. XX,XXX low-cost utilization and easily especially in most been equipment, increasing, almost have for and for delivery to service respect infrastructure distribution modules be with heavy largest manufacturing, X fuel With high of development adapted can developing in

applications coming and are is now larger making available to X committed new these Plug revenue. questions. percentage major business year, of them for will your I grows, be will e-mobility assure applications. our represent some and Power business a our investors announcements, of As Paul In I the

Operator

[Operator Instructions].

Oppenheimer. Colin first coming next We'll Our Rusch of question the onto question. move from is

is from question Carter Our Driscoll of B. next FBR. coming Riley

Carter Driscoll

at end quite dizzy prepared comment, slept Andy. the there the remarks, of it's of a Well, a in you

be X color. about may announcements you additional year, talked could You give this major

over completely unexpected, the you've Some to, those believe, you street, some the been your about to announcements last at you're least, that of what related thinking business, couple something is handling of them is is core within obviously, material there e-mobility years find what pursuing? pursuing relative what

Andrew Marsh

That's good Carter. question,

strokes. of see if Let give -- broad a me I some can kind broad

that rather distribution We've channels And year. -- -- announcements limited been we've force. from obviously, later. e-mobility on think those my today, a handling working come of some will over our our I our is deals and sooner for activities them material for with some also equipment of First, to deal comments, direct may the And sales applications. than

distribution in hydrogen companies. with a sheet agreement wealthier in as Europe Asia, -- accelerate with maybe South that countries larger a but great global even some America. by in deal see think I thank really made growth there's as a North and other can here help look, on been not company well America, I a products, the industrial that, the much in of balance also announcements our of Carter gas being you'll

are you'll companies a in Air in partnership partner their honestly, see building and I companies. Praxair capacities Mainly those lots with one to liquid large a with may I you folks think industrial biggest Plug Liquide quite like a Products see we're of Power XX%, of in that prime want be building to us building them of the plant. plant, Also, Plug plants. because I believe X Power liquid Air of the U.S. liquid gas think hydrogen supplier the be and user increasing These the future. liquid

Carter Driscoll

helpful. your to X -- types That's agreements, could with technology to very be one Maybe fair of of existing focus something X on the that Is some more of it is of other applications. specifically, assume those Okay. particularly mobility with partners? was Amazon

Andrew Marsh

Yes.

Carter Driscoll

Okay. All right.

me leave Let there. it

strong very are the you reached a quarter first EBITDAS adjusted had your year, of you of end obviously, So profitability.

see a Amazon the I'm the a the still kind the domestically of provided, Walmart. range end basis. to on of maybe you're about a, for sizable takes talk, lower range? half in you blended size if to opportunity expectation an the still what that's Could of customer, end versus of whether do still influence potentially second the XXXX? the have EU you assuming get your kind add not and that going then, you of because in talked You or two to those puts tilt higher of the you and potentially bookings of a are a And

Andrew Marsh

off that last I'm answer going maybe get after and I'll one Carter, the to Paul? Paul, to that. you hand

Paul Middleton

Yes.

good across of bigger kind QX continue -- those front And be see we short what the year-over-year, business QX to seasonality you get yes, Carter, of to of last look to you think when automotive kind think question, so But end. quarter-over-quarter, concentration customers. will expect tends than I more traction at is similar back-end growth the and answer distributor thing. loaded continued than a we year I your being

that, be a where to continue But loaded. trend. back-end that But we're a a expect our good that year basis, to more go in on overall be as it'll so is every you'll million such now, And things which yes, position. forward our of on kind a magic see So and quarter of a sales, Andy upside that good the QX a it's And think terms mix we we that about to a reduction, closer end run-rate go those continue to we're the cost the and as of what lot that to to position talked doing getting when other breakeven, we but business that see and be chance we we of quarter, of from showing the in through announcements we're traction will things year, things, continue see you'll now year. all I that, do following down grow. it $XX in the

So can this some of about when trying it's we capitalize those we really some that, about to on elements, year. drive better getting if think or to of equal that

Carter Driscoll

maybe... just And

Andrew Marsh

I'm Carter, ahead Go sorry.

Carter Driscoll

a take -- I was just No, to question. no, please you I continue different to was because ask going going

Andrew Marsh

was an of that material quite Walmart just big to in to last to it going question. we us, obviously close announcement confident. organization, I'm I I close haven't remind Okay. handling. how as long your I Amazon to made Carter and me took add and took another remain -- frustrated, myself

Carter Driscoll

to equipment surprised it of a exogenous quarter are margin of the the kind effect? Paul, sale just I in surprising. was being Maybe there all some down related other this terms was Okay. again, reporting little in there was metrics services, a equipment or sequentially. little and SECs squeezing, downtick Is that margin

Paul Middleton

the hydrogen margin comparability factor factors you is, standpoint in the mix margin have can is grow product with -- is customer have a mid-teens that, for little in they're GenDrives news the analysis of lines is have now infrastructure. to profiles, but a apples-and-apples. and margin product across out of and But that higher and continue makes bit that net the to where overall to in which continuing hydrogen If allocate all grow it good the infrastructure growing the best quarter on us from yes, a we mix warrants terms more the And impactful. of your on percentage lines, of but having we and depending Well, line, nicely us other in the product that profile a challenging. their there's be

a we than QX. stationary bit probably little The is had higher in average other thing sales

we get that margin the So same nice profile forklift again, quite very GenDrive. on business, but that not in the

it, impacts we and that that look them, trend if So you margin to continue expect line as go continue the between go in terms bottom of of north all they at profiles but fundamentally, to forward. the we

Andrew Marsh

And Paul, we way across fourth the in is that the the Is product correct? comparison dominated to lines. launch recognize by quarter, the have

Paul Middleton

the SKUs bit. of kind it's Unfortunately, numbers Yes. in comparison a

Carter Driscoll

the And that well? Okay. line as of to that applies service

Paul Middleton

Yes.

Operator

next coming Rusch is Oppenheimer. Our question from Colin of

Colin Rusch

from seeing talk the bit love terms seeing about some you're a what that front. development to see that power development, on me in Tier just Xs powertrain terms We you to It in of of we little Can seems and engagement? were medium-duty -- you're lightening and -- light vehicles. that movement seeing for on

Andrew Marsh

well of I'm -- and both those Toyota the are the seeing as motors, I space folks today. here Colin, -- in, GM call, So own X in that of going we activity Tier developing and visitor and matter as auto technology some their out. Honda, obviously providers have one to I'll of engines a we're like of a of There other there from think is fact, companies number OEMs, and separate is answer

So certainly level much higher. is that engagement

has is engine that making about box, think be vehicles. We to We build more also who would we we and is going a pick there the apply that are how are and We're really sales the membranes, stacks, to than that's channels our attach And been to as that to hard denser because best has in motors, globally competition. thinks area. it's going deploy -- we than that's the the very there's for lot What winners work delivery our seeing our other other work we be e-mobility pick to good whole to our And work to not and it's space. but X the deal to the going easy is attacking about that how in not implication, market. believe having heart really certainly, ProGen winners, by that's on the -- but in chassis, qualify light-duty power what position losers. activity comes vehicles, someone efforts, that -- really be different and to vans It our honestly on how to electric in I out a seeing lithium of engines may integrator are X X, a how the applications we're not of only levels, batteries who part the market. the on can one about of buy quite

Colin Rusch

I I then, revenue? from migrated have How missed we should perspective, capital have just unwind up first accounts And capital about working to helpful. but levels just in super it, may of for you a That's needs higher guys but that the think receivable? company. Okay. to of working the you're year, see the assuming want of to little understand bit this part the going a

Paul Middleton

Yes.

I in use them of close think, thing -- the one that finance favor these quarter to to our to incentivized banks is specific our company tax before are the the I receivables, credit, guess, that ends. customers they get works and because

and range kind company, with haven't a And big much, midpoint things and you AR as year, know talking in you hope get of we supply to you actually big but I but the do the a inventory we -- at have vendors I I volume comes get that, and process, if of chain anything AR we're in a continue everyday that's will the meaning growth time a favor big answers... don't Then that this high-class bit. -- of big the expect think And I that there it down ticks growth had just that the an It's working continue to and but don't unexpectedly, necessarily worked if to I I we in see But that announcements our look these sheer is if processes balance, I business regard. we'll this year. with better you even a Andy run that think in the of I it's have -- that front, planning surge. that one problem. a up grow so big to lean up expect that slightly, business our to get up goes we one on number a have even work doing think tick run I if more should don't which by about. of that say standpoint, win, from -- think we traditionally XX%, always our through our manifest Hope production it to

Operator

Sameer Our next Joshi Wainwright. question from of coming H.C. is

Sameer Joshi

else? with the on should someone is we clarification announcement Is FedEx expecting. a just it with So e-mobility that it be or

Andrew Marsh

that question. non-committal be to Sameer, going going I'm but ducking -- just on hate little to I'm I a questions,

answer So is, the soon. we expect it

Sameer Joshi

okay. Okay,

you these the of to we have have you it Or also or expect provided incremental deals into guidance should the baked you that announce, terms the deals additional and that that expect the is to guidance are In guidance? provided?

Andrew Marsh

a question. That's good

increases a based to level announcements. deal but you hope slight revenue when on, very, I about -- what a of we guidance good see we the of high very things confidence the may to increases it's increases we've went marginal I and been obviously will you I bigger, may -- year, and, implications the the think on of margins have announcements as know, achieving. these as XXXX. some based guidance able is past more guidance year see on some you increase last think -- have were slight in one able over the But

Sameer Joshi

Understood. also In power to quarter you that that response pace? to than to stationary expected. mentioned stronger fourth you one stronger you Do the the at grow of the expect a was questions, in segment continue

Andrew Marsh

will in deals been be I do but the network. new their with years do, discussed. have It's I areas. X publicly buildout pending other Company now, for been almost We Southern of it Sameer, their think working intermittent. We've supporting

cells through for that applications. that into say that think of perspective, our material higher But integrate I business the make to ProGen be at Ones footprint. module years. do cabinet, your global then coming And coming -- Fuel products, unlike be radios a than the to we'll LTE few a that, like from to predictability. Some to power partners allow able save some handling, and which I in would have I a in regular back-up generators a of networks. will getting footprint, leveraging level advantages into start deploy think higher able the those much and density products cabinet, XG diesel smaller revenue-producing customers able

So networks world's in not not exist there's into top value actually to a XG will XG The and of really on changing. did previous that deployments in go because other. each proposition those detail, build

think I X the for industry and years. next to the Plug X good that's Power over

Sameer Joshi

of just the Or to right contains been ProGen going slow Understood. How now And more. actually much that a has deployment? one be metal stack? it is the shipped

Andrew Marsh

to be slow Going We've a deployment. thoughtful. been

aren't plate products And out products say a be expect We by the I I stack, the to see the Xs We've think that been metal like Class some shipping starting And XXX,XXX aggressive. this would year, by of incorporating lot. our membranes. stack. year-end, membranes. shipping ProGen we you'll with shipping we're

again, on hit view highlight. from really will scope The scope the highlighting to used used scale and GenDrives are point that leverage want in will focus engines point, used identical you other on-road be of as interesting the which vehicles -- how economies. be future to think our applications, on that engine I -- I and in really our technology a

Operator

Instructions]. [Operator

of Craig-Hallum. Eric next question Stine is Our coming from

Eric Stine

from So me. couple just a

potentially margins mean, given prepared given investment space lowest-cost tank just and improve up the gas answer and do to there, been in a as in about I the the owning able with lot source as then similar industrial hydrogen, source investment remarks it of part company, provider? from in and you so and that potentially talked terms maybe possibly the where there, hydrogen a that, just early of You of the Plug tying the is stand being but there's to way the

Andrew Marsh

been a little I've actually We own dozen that a doing already. tanks. Eric, of probably

we that is continue that an to pursue. activity So

Eric Stine

I -- up mean, And helps well, something on changes you potentially guess, it or margin if that that you someone tie maybe if with I potentially the side?

Andrew Marsh

Yes.

Eric Stine

maybe vehicles, good from and there us, when mean, in And then, here announcement not or Okay. in is handling you near talk quite term, me you I this a the got I'm Plug's autonomous last materials what maybe for just a reminder one an to experience potentially about is hear to you've mistaken? autonomous but there that the EV if few field. already point, vehicles in do somewhat

Andrew Marsh

That is correct, Eric.

are and highlight to GenDrive me in We operating our an have continue expect warehouses units, the gives opportunity Power on to that of Rensselaer we Also, are with to XXXX. and in probably fuel which work fueling manufacturing X,XXX over doing expand it Plug autonomous facilities, cells, with which robotic we're units.

will which and of I forward facilities warehouses the lights the we'll AGVs, would some up in just a think, unit fueling, on-road next the I and one able future step will fill thinks be on we'll will to robotic expect us. road, at up maybe the feed and out, arm that units manufacturing be for pull -- it to So it's back be huge be and the unit the deploying when year, and

Operator

is Canaccord Moore Our Genuity. from of next question coming Chip

Chip Moore

to circle just guidance. to wanted I back

shippable the talking we updates coverage XX% XX% for a were it's Any I visibility couple out talked months. about on think, of outlook? of when been backlog, to we January, in

Paul Middleton

deliver obviously at we're execution closer to team it's I probably little [indiscernible]. -- -- range. not our year-out. day ticked higher. XX%, we're We've actually able XX% orders -- sales every pretty say that just I'm we've concerned. been has up and it's I year-in would a -- not and We're probably really

Chip Moore

opportunity telecom that years start Got and to is wanted up, size position can XG expansion out you to opportunity, and talked right, advantage network really you to we about take Andy, as And the just look way we see it. space? cell yourself the buildout X-plus And of densification, follow that? in when tower to there that a how

Andrew Marsh

mentioned, more And likely I'm in relation is be if opportunities And North urban cabinet, to -- people and thinking Two in a you about all adding items, those about, Verizon, their going suburban with our cells denser. first-generation like think become generators what fuel And and that and the us do we and functionality their and and AT&T, important Power have to that's cabinets hydrogen if I'll of opportunity in and XG, integrate Sprint, I density. more eliminate sales them business be buildout us, separate users to force be put Asia. where in part simple America always direct Plug new T-Mobile, the you'll able say, where probably -- start to will diesel part areas strong challenges has the in way And to, call, deliver deployed more the really the been to our will you as chip. a most networks sites. have you'll of products us, and of gives

aspect. that's one think I So

homes, is a might have today I of think qualified this I already. deployments. there'll the at I build out the can all and It providers we later have service a think, I and service we be and new low-cost if are looking But of probably another to density, provide networks, because opportunity product think is I if you the effectively with can when home, you there's way opportunity little be huge broadband just to with opportunities -- for large a and to at And have do Company. with deliver there. the how them density Southern these look there some to providers associated for bandwidth when rural it there look hydrogen

Operator

Chris Souther from of Cowen. coming is question next Our

Christopher Souther

customers of both build X cell shift fuel about the and Class and a purpose NexGen Can for month, Plug get this kind and partner the just you lifts? from power of idea mentioned ownership? -- is purpose-built of that takes potential, servicing you'd trucks more bit what the cost products the kind strategy production lift an service to total also, is towards cost want talk Or sales initial more global starting with puts the around And of and perspective, perspective, the distribution of whether distribution that? kind

Andrew Marsh

So with applicable of long, and Chris, when think about applications. we've we can ProGens, how a metal we work is stacks membranes the range done were make units across that wide

I of a it to of that's So one can and unit. as units point these our have much capability than step all -- our you us as think to units and but really, you able that, those learnings. X vans taxis. service a the when to products. I the view, great to done. vehicles again, may support the year and that's as much units way in as that's And a our footprint of mobility-oriented in than we're base because half, felt fuel, hydrogen deal a comfortable move From that and be have ground get found easier we've distributors been And products the long-term makes to products, that as maybe that continue you get to mentioned people to we more more to business becomes over important it, to sell core distribution to has watched costs infrastructure with designing autonomous-guided of become service simplicity Power wider, almost of think, units. distribute Plug this, the watched those someday we from everything learnings don't building improve the that will handling service the leveraging we we and the costs down continuously as that and broader our -- material in simpler as uptime grow almost And boxes watch continue could us replaceable future and the allow items improve service mass past I does delivery finally combination those our kind equipment a it us And is XX,XXX well aerial of and same start makes it work drive help much business, have produce use others into applications,

Christopher Souther

revenue And XXXX appreciate there. give the XXXX? I of, Walmart what idea and of of, an of can that's guidance you is into And just kind in that? color percent with Amazon kind kind baked And where then maybe kind the as talking are you're That far to two great. customers of of growth and the real would food going in the new about leverage automotive? some be as things of versus those be

Andrew Marsh

You Paul? give that want a to shot,

Paul Middleton

Yes.

base percentage going And check. with the use of approximation traction think, I'm kind think, on in too, keeps I but continue to get we about XX%-or-so. as additional their to Amazon customers, that it of I Walmart and continues to grow

over you time programs. XXXX of revenue, customers down percentage traction others another we're see given that, percentage and getting goes as probably that will -- another think a with and in I just

be say. minus in go slightly And But plus lower that so exact I numbers for XXXX, it's may to and we XX-ish or forward. range as and think hard it's

Christopher Souther

Okay.

So faster? the little but kind to both just pieces other of it's growing grow are a starting

Paul Middleton

Yes.

Operator

time, over this I'd turn At Marsh to to the closing like back floor Mr. comments. for

Andrew Marsh

call. to of Thank Plug public. today's a discuss answer from hydrogen business to energy cells hear role like economy. the hosting session you questions numerous the you, from in opportunity topics core an provide everyone, today earnings ranging session from for fuel us, to joining open And Power's our The to will if me I'm more general

home you, can everyone, the for on You your access session Plug directly page. Power's at from or Thank time link the core today.

Operator

today's conference. your you participation. concludes This gentlemen, for and Ladies thank

and You a may disconnect have your lines wonderful at this time, day.

Plug Power (PLUG) 7 Mar 192018 Q4 Earnings call transcript