PLUG - Earnings call transcript Q2 2019

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Operator

Greetings and welcome to the Plug Power’s Second Quarter Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow this presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Teal Vivacqua Hoyos, Director of Marketing and Communications. begin. may you you, Thank

Teal Vivacqua Hoyos

covered XXE Thank you. XXXX include in We the Section believe our is to the statements that Power to welcome XXXX contained statements. Securities future for Harbor morning quarter of earnings and Act be communicate statements second investors. XXA forward-looking it will intend Section to the call. Safe We provision Plug these forward-looking Securities Good expectations by This forward-looking the Exchange of Act and of XXXX. to of call important

fiscal cautioned to Form forward-looking result materially for a not are uncertainties and only which XX-K statements Item from are under December intend risks on as from involve Factors file as XXXX we and the These investors and the statements not because and reports any update this SEC. limited to as discussed of However, time or after uncertainties year other our do call. day to discussed we in ending various unduly on risks Annual Risk the made, of differ the Report forward-looking those to well XA time statements, factors, rely undertake statements XXst, forward-looking actual including, and may results with as not they speak but

Andy point, I Marsh. CEO, over call Power’s this At Plug would like the to to turn

Andy Marsh

quarter shareholder well provides for joining quarter as we the remainder outlook year. which second conference our for letter, the the second you about Today, quarter our Thank our call. details as performance second of issued

quarter. good was start Let it me by a saying,

of both This and EBITDA. $XX our improvement operating structure. million, are model. at current in in underscores This our a cost billing on showed a we The key improvement margins operating substantial rate basis. gross highlight and quarterly is inherent At business about leverages break-even sequential we adjusted year-over-year is that,

In threshold. this addition, continue reductions cost ongoing to lower

year-over-year XX% units, billings $XX.X deployed the and million, over of X,XXX year-over-year. for up up highlights company the quarter include; XX% reported Some GenDrive gross

in company the was the time quarters. the three second past Additionally, EBITDA breakeven for

We acquisition applications suite scale commercial subsidiary deployment UAV offerings cells robotics technology a secured expanded cell of vehicle on-road a our small our logistics, for complement and first for also broader logistics small tuck-in scale into of and completed markets. ProGen with of fuel hydrogen on-road fuel DHL. We to StreetScooter,

would, be cells. largest be Markus including people the of world's to logistics service works Express, to Head everything vehicles DHL hybrid and expected units He at there it communication soon According starting delivery on-the-road As would we XX% with company, worldwide”. DHL could a XXX that is vehicles as be imagine and batteries Reckling, system, XX% “If vehicles added likely programmed of Operations know mail further last-mile for XXX to and the expand. fuel German

announcements. DHL’s on before finally, when gross and customer between items question-and-answers. adjusted four the million to StreetScooter XXXX, we exclude $XXX for our year will to EBITDA more major are revenues make our warrants. million; company the Few full One, reiterating for charges the Three, moving XXXX non-cash first. you was guidance; $XXX

experience players, Symposium we'll share will growth hydrogen key the the group a leaders that ask major to fuel including their them together cell industry. suppliers issues to and Also, thought on Program New be and feature and discuss XXth the industrial We're aspirations. bringing Latham, pertinent Plug growth hosting Power we in help will accelerate and of the of will customers, September industry’s York. XXth

highlighting Power’s on second the insights near-term plans. Additionally, and day, we’ll additional both long-term share Plug

Paul and now open I questions. will your be to

Operator

question [Operator Please comes will & Rusch Our question. state our first begin Thank Instructions] session. you. and Company. your with this at we gentlemen, Colin Ladies from time, question-and-answer Oppenheimer

Colin Rusch

quarter back M&A into the half infrastructure build-out with activity and next guys. talk for think Thanks there's of the much, are Can a implications into bankability as the little and space. some significant and go you about past Cummins bit the this Obviously, the what through year? move year in availability been so of in we you infrastructure sector that

Andy Marsh

we view that is Colin, whole a for globally. take the a we industry. fuel for ecosystem cell hydrogen think that's it going I acquisition on good just piece of small And pie the bigger

billion you this by made are they industry look is that I that being infrastructure over think over when there next view years, be obviously XX the part companies that. to at $XXX that that of large investments will XX commitments of

but think it I has this, more which I have view real think in hydrogen built we're a And company, has and for parochial that look, of deployed else, when hydrogen fact Power anyone infrastructure, is more that well than I growing this take the think of Plug results opportunity I an a for a positioned we the units, more our used we this quarter indicator is expanding industry long-term past that. think

Colin Rusch

things give just but sense here the development a you're of the on many magnitude folks on how of those of cadence the the there's terms of talking Okay. market. magnitude kind the number going move lot in programs, are And conversations is to in mentioned can obviously of to then terms about likely follow-up of on, forward? new really then you us number order of you of make, over the announcements awful kind to the how expect of Obviously, you road activity and of an order

Andy Marsh

company has position. in And, integrate a back to with so outside think announcement Power with to not let which it potential the about from been step come engine, tied I puts unique just in have we ProGen easy that that OEMs that, And us into well-defined integrators, a and their pre-package, level up makes we the anyone. folks DHL a for is it Colin, StreetScooter to Plug say, pureplay remain Sure. with products. And opportunities. first, and take engaging came the publicity helpful and me it of

OEMs here see that especially Tier deployments coming Plug I that say these just integrators, been dealing year I'll announcements And, visit in our Power sectors. We've by us. continual that worldwide the have States United the Europe with you'll over and that, to we for in would had X and expect

just people a about talking our interested It we're that -- in and type one years, that my engaging has tenure not -- to program has one that's show. development opened the for I'll focus want item two here, or always during add, that lead entire we’re units we And few haven't all and to long-term of to with. been project we're and I

Operator

you. Thank

with question. your comes question Stine Please state Eric Craig-Hallum. Our next from

Eric Stine

Hi, Hi, Andy. Paul.

Andy Marsh

Hey, Eric.

Eric Stine

Hey, just interested in talking more.

price. certainty hydrogen, maybe that know and to at objectives? you your adoption. price tanks, achieve newsletter are I steps some obviously, But so availability you can key for some details for your about your in it the mentioned can that to You you starting more hydrogen potential more priorities take source optimal own

Andy Marsh

– number think, you'll in I different Eric see activity see you’ll of Colin, areas.

– tanks, hit I think on you mentioned You I point. it's think a critical

I where announcements longer-term stability hydrogen think price the that do for the with liquid of we'll see you'll companies. one deal a

into to for our about is be will deeper in make presentations the I think think business. take that margins you'll And will of closer and move cost kick question out, effective our also strategic customers. taking the improve available the our see the at of move kind Colin that, I into not part sure the think mid-September, symposium hydrogen, to some that steps Plug generation to we're I steps hydrogen

Eric Stine

four. being is those I mean, it in talked believe And the when it. something an that Is earlier should I four still think case? fair the about the partner, Got I you that one was announcements fair we that, to gas with about think year major say, industrial it

Andy Marsh

Yes.

Eric Stine

then just or the know trending an you should maybe for I to going steps there to And how forward? margin think related objective just that, that's the fuel get that's what providing to Okay. improve that on and mean we side. look I

Andy Marsh

to Paul, view how do want trending? you you take it’s

Paul Middleton

timing you're to there's different again, ebbs and events in progression to volatility flows, that. going continue the years over given see of think I and a of seen continued you've but last couple dynamics, Yeah, of

tanks own of out XX% Eric, as example, in our You the only all of sites. mentioned scenarios earlier, we about of tank today the an

However, we've up work field as refreshers renewal a for come year those on replacing in of rolling customers. got or actually many a and where in we program with out, those programs next the year now and over the we're half

going have fuel our a and that's dramatic carriers supply. our our with so pricing impact And to negotiate in ability to

not to make. that to So the all efficiency we investments of we and mention have continue made

even I So you'll kind range move break-even somewhere post as XX that north, near-term. the into see in move months, then – think and migrate that in that we on be we breaking should of positive we the towards next

better. and expect we it results continue good far to So, so get to

Eric Stine

Got it.

me. just one maybe and with Okay margins, last for just one sticking

just maybe number, very Just to a mean, and between good product gross a that on this margin, and good infrastructure down XX% about I think the breaks going forward? is how level GenDrive

Andy Marsh

Paul. that, take you let I'll

Paul Middleton

quarter, this units. Yeah, all particular so it in was

as So a helps, in as infrastructure we we a see that our of of a infrastructure, was trend units revenue helps. of great programs have growth lot so the shipping We margin we that progress. that of a shipments tremendous the to that we But so deal. had profile migration were but lot majority of and seen lot of, continued the to we’ve

Eric Stine

Thank it. you. Got

Operator

state comes question question. next Amit Please Wainwright. H.C. with your Our Dayal from

Amit Dayal

morning, morning, Good Good you. Thank Andy. Paul.

level $XX.X of the million On off you sort few next side, this if the operating leverage OpEx number quarters? for where

Andy Marsh

take to that? want Paul, you

Paul Middleton

sorry. I'm

Andy Marsh

Essentially, about, this quarter in is question we expect off the where a it's level future? this for to expense operating

Paul Middleton

good Hey, morning. Amit. Yeah,

with every expect think back a to I level I a kind bump of little million million year $XX.X programs. in that we $XX our bit we next quarter - forward. quarter, second progress as – annual compensation we’ll of The reserve have But we to that Sorry. the

Amit Dayal

if right. Andy EnergyOr, that I'm don't This recent I you. thank Understood, know pronouncing acquisition,

Andy Marsh

That is correct.

Amit Dayal

Any how of should growth How your potentially efforts in up efforts? to this support on your product When this expect part become will into or your sales your color suite? results? does this show fit we

Andy Marsh

has call the warehouse very vehicles. there And out effective which deeply in we're aspects intelligent here, that automatic platform. EnergyOr I’ll Amit, developed X,XXX mid-term and actually there what is we actually about two one is, low probably what our a units near think future, we So with power involved guided is have to cost when now done, are and the

is this for we is designed that robots future. even intelligent the of the important though And for see drones technology really

our but future the customers not helps us move today, So only our really to for customers to support hydrogen. it

talk longer worked aviation scale from a have aviation also view taxis from have I things opportunities, like lives. robotics about, people, they've of that understanding deep probably company They a bit though a as acquisition. And in out. small past aerial joined I we short-haul would now, the also their

fuel of and real from travelling view and that aerial batteries, recognized done exploring an have to far folks company. we has really have area believe that really with technology a greatly have it's from on-road at is opportunity an point what both distance contributed joining since have we people weight we taxis are and minutes, who using discussions engagements around with it XX somewhere and cells But felt to we're travel EnergyOr for the had like limitations vehicles superior batteries. those sets the And a

Amit Dayal

moving timeline on you've still Then the to as of the end to highlighted remaining presented the catalysts these Is to Street? Understood. be for well. previously three year the catalysts the

Andy Marsh

Yes. sure Symposium. one Power hear the on And at Plug I’m you’ll

Amit Dayal

thank Understood, you.

last XX last year? And of level XXX changed? we targeting sites that at we fueling are Just end the has still the one were the on for the number, quarter,

Andy Marsh

Yeah.

Amit Dayal

first the change increase in Any XX – Okay. quarter? to any from

Andy Marsh

than We are be believe that XX it's that more XX Paul? and - own, I we may

Paul Middleton

Yeah.

we So But of that for of the again, there's will The gone the terms the year. infrastructure have that's have in revenues where right, a when roll the a it. up into associated timing and will with some that’s bit. fueling – number the difference

Amit Dayal

I Okay, understood. all so you guys. much have. That's Thank

Andy Marsh

All right.

Operator

state question Instructions] with from Please Thank you. Souther [Operator comes Chris Our question. Cowen. next your

Chris Souther

taking for question. my thanks Hey,

much Material GenDrive how mentioned XX% impressive. to basis. for I’m kilowatt which for over from XX FCVs to last reduction the idea pricing the the to cost Handling get of I systems be get the an a You units you an how just larger wanted the business? is does going years idea, cost like transfer can parts modular and on compare how new trying are [ph] and

Andy Marsh

a stacks thinking were second That's are ship about was no today, an look, beginning stacks last if And almost a XX% design with and the plug that we day to good example, you of the I vehicles. in take certainly question, Chris. that for into start when stacks did acquisition that and quarter shipped a directly applicable plug membrane new And and And, applicable stack design, you membranes. year. the on-road the

about stack, thinking used electronic start used the monitoring much on-road for you to stack like if and system, the product, for the plant system which which about, vehicles. items very think the identical you then the And control any and of is is control balance controlling almost manage that's

similar So, beneficial the new Plug component very set is applications and very, for very Power. to very,

Chris Souther

Got you talk as far bit StreetScooter as it. planned providing the you around spending XXX next, the of place after And building first then a kind the you that's deal? by to part be then What DHLs would build-out take can for are versus the about How infrastructure much about guys third-parties? the that – the other and up of and to XXX talking that? needs as

Andy Marsh

were fuel extensions. Chris there XXX So, already in over Germany,

involved stations. using of be fleet vehicles. in available will those much for publicly And will so, stations, available It'll for around publicly Power been DHL build-out be stations, the very has Plug be available StreetScooter the setup not publicly fueling we centered those using the as -

So, for the how hydrogen a, many infrastructure good handled The today. is, is there places the those be it's other unlike the going what's world, infrastructure not on, products. news will that's that's of

Chris Souther

That's just the last one. then great. And

and XX% it's entirely Your into the it we year, almost heading existing that continued so. new StreetScooter far deals? heading fourth larger XXXX this customers and gets kind StreetScooter look some forward business, three for And excluding that business pipeline should recognized about XXXX what core the other think penetration for as the looks or as about of of the customers? like grown that maybe handling like Q does guides, How you’ve as XX%, material

Andy Marsh

Sure.

So, Chris will rate. key at I continue grow the to think business that to the

for kind think key well that. as we our question we about kick Amazon and and the of adding out expectations again, our symposium I years. five is XXXX the the serve roll next as Walmart will September, another feel confident beliefs At not in the the

I aggressive have – I has continue for Material in been is doing of would this So timing been I've years an and grow we the – expand and a do now. point plan momentum never segments business. company. view, Handling from the say the that to other And XX greater for this The

Chris Souther

great. more the symposium then. I forward Thanks. look at about hearing that That's to

Andy Marsh

Chris. Thanks,

Operator

ROTH Our Instructions] [Operator with next Partners. you. state Thank from your Please comes question Craig Irwin question. Capital

Craig Irwin

Good questions. thanks for morning taking and my

Andy Marsh

Hi, Craig.

Craig Irwin

Hi, Paul. Andy and

cost over outs the for Are the for that for cost that continue production there when us US, years? you cost in the the in as components you pull and look the I producer out overall you look we is forward, maybe on right, backwards see did largest your potential the when frame opportunity really So equation impressive. to forward, continued in fruit But mean be you Plug? accomplishment to next could looking economics say end of by couple the this continued improve a there reduction stack that out system? that of low-hanging on maybe trajectory expect we you Are pieces the Can for presentation the the year? the

Andy Marsh

And, the – answer good very question. is think Craig a I

yes year answer say over stack and your too except, the don't membrane changes detail of based go the questions, the down or can I I example, on XX% want but pull see value for higher itself. would design think cost another this. we to public, on the that two, based to stack I on production, to we next

activities, industry here early other and for look at stages stack we're When costs. the in fuel the cell I in down very driving

moving it. of fewer my you boards, a the a in lot levels I single to integration think at board, continue multiple at the itself telecom, I components, of much very look design look like for and higher experience

XX% rest innovation ultimately, always has five-year team that, five XX how be to a And four our supply I roadmap on Craig, chain a bring continue can track this think three of say I cost from XX% our design – and to comes from I would years. more we volume to for down we costs. good and at comes reduction the or this, looked When and

Craig Irwin

good that's hear. Great, to

to is I about wanted a picture thing ask big Next question.

with it's trucks. when room a of cells fuel the - has re-fuelling to large the sense real batteries, you operation of lots for time cells. facilities is superior And get fuel real So, have a makes something recharge I it, plus that and

competitively this of lead ion that that making positive over it does where the the years? share industry, an Or lithium ion acid. about see standpoint the bit some lithium more to potential is Can couple it opportunity fitting an you it in Is fuel little seems also cells But, maybe in something a for of see you a threat? attributes inroads economic bit than is expensive be from do, as quite maybe a Plug? talk next you

Andy Marsh

good to technology Craig, apps. That's fleet on-road been means, actually even it's handling, who fueling, step where all Whether take application. that range another is, for fast cells successful. it fuel a That never constant perfect going question. material higher. questions. a I that deal. all – that's fuel that attributes adds answer I've a you we’re are said, up power, if someone And vehicles your the you use asset vehicles, great the to and have value cells longer

was seriously of trucks, think a would I of this And facility, and fuel shifts put I if three looking look I a a lithium I long-term, running may at I always from grow ship looking two I be that was at in. would If single think customer batteries. I think XX at and point cells with same fleet about to to it view,

be think batteries in be the material sense. where cells where like think there'll just broader think I handling I And So applications sense. I market, make applications electrification make there'll fuel

Craig Irwin

you, Andy. Thank for Thanks questions. response. that I And my like taking

Andy Marsh

Craig. Thank you,

Operator

back closing time. at There Andy to you. remarks. are questions Marsh further I'll this for it no turn Thank Thanks.

Andy Marsh

to analysts Plug our the all I'm looking call our for much. And forward very everyone you Thank you at joining today. seeing Symposium. Power thank Well, upcoming

Operator

This concludes disconnect. today's day. Have great a conference. All may parties

Plug Power (PLUG) 6 Aug 192019 Q2 Earnings call transcript