PLUG - Earnings call 4 2023

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Operator

Hello, and welcome to the Plug Power Fourth Quarter 2023 and Year-End Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Merrill [indiscernible] Marketing and Communications Manager for Plug Power. Please go ahead, Merrill.

Unknown Executive

Thank you. Power Earnings Plug the to QX Call. Year-end Welcome will include statements. forward-looking This and statements include, results beliefs, developments are statements forward-looking of historical from matters facts. not among and anticipated These strategies, others, expectations, that and future operations other plans to these Section Act the in safe covered intend XXE Exchange the of XXXX. Securities for We XXXX be statements of and Securities provisions Section forward-looking by of statements forward-looking contained XXA harbor Act of the investors. to to communicate our believe We it's expectations that important future

However, to not statements, read guarantee investors not and such results. or a forward-looking are rely on or cautioned unduly as performance statements be of should future understood

Such to, statements Item Form those significant in and discussed but and uncertainties to including, risks with uncertainties file that current expectations, the the other factors, beliefs the from forecasts reports are for and Exchange results of differ XX-K annual under discussed December our could assumptions materially to and cause risks and year and actual we and current or Commission. fiscal not XX, to various estimates, projections of performance as the time time as subject ending XXXX, as upon based result well management a Factors Risk the report limited from XA, Securities on are

speak Andy information. new to Plug Power's any statements of to after forward-looking point, statements statements Marsh. are or undertake update to a the made, this in result turn forward-looking only These which over I'd not this update intend and CEO, we call or do At as like call

Andrew Marsh

the overview from past Georgia electrolyzer producer was launch space green Paul the January foremost of joining for results year. A in liquid today's us and and and PEM our achievements you, On the you, Thank thank hydrogen. Power's Merrill, of making I leader an provided Plug and a world's XX, highlight plant, the of everyone, call.

production green at and quo. Plug forward achievement the This challenging placing Vanguard signifies hydrogen status for the industry, hydrogen Power a leap the

continues to with upcoming initiation in quarter. a the third world the joint Louisiana, Olin operation of assert poised venture leadership further production ambitions in with Gabriel, its the hydrogen Our our with expected at St. liquid

securing the testament commitment our to the Energy United our Department billion of [indiscernible] of term Additionally, a a sheet to capabilities the enhancing is from across $X.X States.

conditional effectively expect important coming made strides sheet the approval Financially, the that under management growth addressing We past cash concern. going and term improving weeks. our we cash in generation, fostering in bolsters in quarter, the

Home pioneering such for an We hydrogen expanding our Walmart, with handling and Amazon had like X-megawatt material successes and electrolyzer a with facility. operational generation Depot as system Amazon at giants footprint green on-site

Our in innovative a energy and launch high-power cell green XXX-megawatt system including for and project leadership stationary the and GAAP platforms products, of a pursuit innovation of underscores fuel sphere. relentless our electrolyzer

These to our enlarge efforts reflect and augment intent product market our suite strategic our footprint.

So a many are more sustainable energy future. role and spearheading

move into XXXX, foundation on and continued fortifying we our As expansion. sharpens sustaining our focus financial

stage shift and approach to for cash propel management. persistent economy the matched investment towards strategic Our the existing and capitalizing by cautious our resolve Setting a is to innovation. growth on hydrogen

Cornerstone discipline. fiscal restructuring excellence operational to is $XX on savings year's aim our commitment in direction significant unlocking strategic million and a this demonstrating in

our innovative reevaluated value we've to mirrors our unparalleled it pricing Additionally, the ensure of offering.

decrease initiatives and continuous These in the health, reduced by a innovation Looking financial cash in gross highlighted capital. a working are outflows by navigating critical for complexity for and can supported improvement our and renewable groundwork energy leadership sector. ahead, investors the to see laying expect improved in financial marked down margins

hydrogen economy. a in Promising value sustainable and clear creation growth trajectory dynamic for the

to over turn Paul me for insights. let financial Now discussion the

Paul Middleton

everybody. morning, Good

the back there were for year substantial Power, Plug XXXX business shared update, many January I another positives. As in and in was

I would addressed Based the highlights filing XX-K the the on few a we actions in our last issue. there point on concern last have specifically out. Focusing going night, few months, are

sales quarter fourth the we finalized higher the the had for we in slightly fourth for the January. came provided in million, accounting back than As guidance quarter, which at was $XXX

material filing based have XXXX, and issues this identified XXXX on and issues key were our reflects substantial we in the the Regarding our in a in weakness improvement outstanding, that the efforts processes. resolved operations

that in months. and XXXX X as issues are new have business well we many There narrow can much challenges these issues, some feel impacted XXXX results. specific dynamics, these our but QX new confident We 'XX certainly more the in coming relate are these we in and of to resolve

chaos market culminated shutdowns into with quarter number of continued abated and defects the but fourth in the industry The 'XX hydrogen since in the third facility unprecedented quarter. an in fuel fuel has

scale-up Our and pressing application new plant sales industry has hydrogen given has longer continued taken delays own issues. made and our a the than the more new effort these planned of facility and it the from -- demand growth shortage application

plan, this, sales things you new often turn, some delayed of has these pushed new system product down and big X-megawatt into in like have and XXXX Stationery of which associated our true than platforms. with is harder held and some often to generally high-power platforms new the Doing electrolyzer the cost activities -- or the

to hoped. on favorable guidance guidance were credits as in recent provisions PTC Some of XXXX manufacturing The on favorable the Plug. IRA and as not varied were

to are for process and We rules appropriate industry. advocate treasury the be the continue in comment that more active for final will

said have factors last hikes And like efficiently. economy interest it overall find the the we easier and rate time, capital exactly political made to debt not as lastly,

we've better January position Given business revenue. [indiscernible] certain call, these in cash to to decisions decided make for posture factors, discussed as we the in update

XXXX. commenced in of benefits will lieu rules, instead programs lot of get restrict we new allow the of many but sale under sell the our cash. in we program which sale-leaseback completing PPA of for which revenue, transferability and example, must standard underway normal to IRA held a in the transaction the an ITC were leasebacks that believe As We us the QX those

new near-term well. cash pilot consume business We've given for more are also platforms programs the as generally will slowed in phases. focus initial they guide These that decisions new our

our quarter, they had significant we of X move direct customers to a one fourth approach, PPA purchased the During sites. and sales traditional

However, given mentioned, issues deployment 'XX. they pushed into previously the the fuel

in that the not 'XX. time new are Also, commissioning, sales the sales just traditional And historically. off X-megawatt designs, leaseback transactions new respective scale. new as mentioned, other on held than pushed did to taken lower these shipped get but into were I quarter our to offerings PPA and which hence, X in in programs final we were Many for fourth electrolyzer QX, platforms, purposely customers, resulted sales on have

sales certain net lower this resulted to new than As in in margins lower originally continue cost valuation from as than we turn, originally business coupled quarter. fourth anticipated for approach and investments overall gross and the overall resulted fixed in This, anticipated, volumes shape lower the product charges inventory continued impact absorption. market with and a lower model

goodwill markets of last price, The that inventory And capital more the evaluation monetize charges, do sheet. we a of focused dynamics, on and leverage had to softening and given us balance given to it noncash the stock these the comment for would provision our is But these was led and assets. the on prudent maximize we I our in-depth of valuation make adjustments. it the remain report how to

million. impairment goodwill of a reported we for result, a the charge $XXX noncash As

improve and as focus flow, see we must to an 'XX. reset. we our We opportunity Turning margin cash and significantly know to this

payroll significant across freeze, costs. a and We which offerings, pursuing implemented service lower hiring We've equipment, price are reduction will fuel. a increases all and in workforce

streamlining and facilities consolidating processes. are We

growth, We're and reducing on hand. spend invested much on in XXXX non of means personnel the this have we in inventory we the for material support costs. We've ongoing need significantly to 'XX

and timing the traditional solution. investment. certain And PPA where focused subscribe enhanced commercial making such deployments our the focus as practice sales versus new We're so customers our significantly now decisions to cash we focus is platforms on and in the pushing direct We're certain of to with managing profitability. past inventory models reduce optimize

on these nurturing before ramp the continue the cost platforms, effort but curves focus we sales escalating efforts. We'll on

investment these to Tennessee, commissioned margin to costs. benefits. at until we the will slowed is that use be find fuel Now in facilities hydrogen and solution. Georgia the Costs new and York facilities we or of these Texas any drive follow-on New X/X facilities we've without financing in right hydrogen PTC market ITC the expected cost and plans the we've in improvement And

to prior In are and over next CapEx reduce burn we flow by a reduction improvements our cash and positive revenue the customers targeting working growth months. the cash PPA product rate to given achieve these and shift capital XXXX, near market is Raising to scaling slowing prices, the to in history leverage critical a paradigm will with direct targeting XXXX margins. we the in also XX traditional mean XX% We're lower investment and pushing in improved rate lower compared market a term think conditions. this sales in to from models collectively necessary new

equally will And improve are in our decisions and in and strategic burn, years the to improve the first confident grow foundation able about for will the We Plug to benefits seeing it come. profitably be which near-term these cash even we substantially important, more to rapidly to adjust focus quarter. feel and

aspect the ATM the us facility. exercise available the which address given concern In can analysis the facility, the addition, be an under to we for filed liquidity going used accounting to transaction of principal

continue the evaluating very the the in very to developing billion ATM project follow-on improving burn Our secure Work very reducing while Leverage financing the is develop facility investment, financing cash to inventory DOE and needed debt we CapEx, Drive develop DOE improvement with we project by new debt to $X.X solutions. significant as and margins near-term capital facility continuing tempering solutions reducing as opportunities. platform complementary spending. strategy focused. the are

I'll received the The burn be this for us company reduced to The of but that puts program, developing driven Part have offers, been it terms from interesting to back efforts, in to to to receive interest rate ATM Andy. turn more position the many has debt not coupled solutions. as cash the hikes. selective and continue these was we a now with ongoing company. they are continue

Andrew Marsh

questions. Well, thank ready to take we're you, and everyone,

Operator

[Operator Our question is from coming first Evercore today ISI. West James Instructions] from

James West

down, concerns, your secure market. -- and that lot there's the should debt to the parts work? financing financing DOE does that the accounting-wise, about here? The lot X we're then does in a of bridge plans we think of where ATM come of should when there's prepared of And but this. bridge has to two, the concern. that of cash One, does a you by Paul, Is a help lot first But question, I kind type guess a alluded comments, of relieve ability some the or your I loan. the ATM announce your course, recognize to point and at this

Paul Middleton

okay. That's

the solving ways. answering just guess question second DOE I but us well. It helps loan, other first. helps a concern many, going as not So only helps solutions Obviously, the many debt in

helpful. to to continue address so the that chase move while And that And of year we loan liquidity like will through and we significantly as something say use but capacity facility, and ongoing certainly the it's the DOE not it that use solutions develop all other we we can to future is things things.

last providers. focus was First vendors, done. concern, which helps debt customers, the other the quarter and That going have we tremendously foremost, with solving our

still sheets nurturing as of week, are get still different even of parties. nurturing We term solutions. we -- a We number we're and last

We're position significant would mentioned, already that will in first benefits good sitting year. expect And we I of as a come burn say so year. also we this a in reduction down start absolutely, the tremendously. the CapEx quarter. We're seeing as in the I

help things, that those and and leverage substantial is Inventory the success. a capital all success reduce can in asset working of our we burn get we

of things -- those we working posted absolutely as And forward. continue keep stage I solutions unfold. you reduction you quarter so number the better for will a second we'll burn, better sets we'll we'll will But and and which continue through new finding see have a keep to solutions to the move think the in as us

James West

Okay.

point, with pricing Okay. then last as Got new discussions and call, on know your I of addressed the Sanjay, kind this And playing market? how they never the out easy, at increases, pricing you that? in all I Andy or was customers? this there, you I successful? -- And Are early have of course. gone seeing the your days as you But how have asked of is it. guess, benefits maybe they that the the been are it have

Andrew Marsh

and from as progress. James, the at we've So about me an quoting But when good customer made you base, those easy discussions, January it's call, mentioned, half we discussion. we're never through our look

benefits main releases where I X quarter. press last in point deals. from the announced we to think to through second I see starting you'll new week the flow our to financials want

to customers. those higher newer we were actually deals, able the of price Both after those negotiations our achieve with initial structure

would we side. a the I some on So supply have it's never panacea. also that seen say support

in partners like these of the Our some resolve been market have helpful [indiscernible] us industrial gas challenges. helping in

So side, support I pricing the but think you're also seeing supply support side. on on the some

I success done. the really largest in hydrogen had future the tell Plug one upon our dependent market me has is of the suppliers what of

so And looking folks apparent. in quarter, think to us. there ways are second are help I find who become to it the will And

James West

how guidance Well, hearing particularly that The guidance comment period the New Curious what State in Andy. obviously change? on here. on to in XX following up West close you're on the maybe may that, York is Virginia for in from you're

Andrew Marsh

it there If continue as bid in very, to XX,XXX were to back, a hubs place and hubs those if really the very that going are. remarkable comment one the that XX,XXX, will they has administration. was they to will take growth So slow the important DOE together over the James, been given I that And to guidance guidance are and stood be very is point guidance. and comments is the all step the said

would spent union there when from of I kill restrictions nuclear you'll options where folks union the that XXX,XXX look Hill the will union were with probably see which that think industry. lifted. we there on CEOs financing the expect And it, grandfathering, members I've leaders power the those I time be we be at nuclear many from would probably hydro, reduced when will one with think

I something the That's been on folks happen I lot wind solar there, industry will aggressive. think matching. time think has a and very of

Folks very perfect I right, have these which we're one me to and treasuries on think they the is initial announcements a have of up that from very hills many very, natural strict and will to loosened one dose, been gas point restricted.

think I for positive you'll be it those I that will the Not think I industry. positive. think -- And think changes. I won't but that see perfect changes

James West

Got it. right. All

Operator

Gupte Your UBS. Ana is question next from from coming

Unknown Analyst

can of One seeing area data over stuff. you lot your talk there. have contracts the even market use and Obviously, I this where exciting Can with think where that how and we're have a news, was you kind grow kind entire out and from of can AI-driven centers, or system of growth grid earlier To about Microsoft there? one for you missing in and leverage centers attack power. this you backup seeing leverage comments was your market and solutions what you're power of the backup data

Andrew Marsh

is with to So going during at call have make the deployment when because them and want diesel some next center do operators, sure them the year be planning. certainly, how engaged won't or major you This look mentioned you that of X test you engines X. to Plug restrictions and uptime. continuous of all data of And But because I'm of all. the initial you rapid as

premier Plug those product. peak big do a think also these but be this look, making all really will XXXX customers market product think X working with manage a event. operate the able as combination And grow. be to don't and only one the to able through to allow one's sure the we hydrogen. low not you use power really I And working center. to the it's And to backup developed going a system, through I the really shaving. how of we're No in challenge that has The to is data requirements

of will market lot we little consulting be market. of a XXXX to the some that seeing where a we bit. told deployments. could when dominant it's knows become -- the comprehensive I start a and going firms you leading hydrogen one spent more is the But ultimately that's approach and time than level else. who they a we've anyone marketing with take the me our in this world It's -- about that of And firms But have event think a scale. it late rather developed

Unknown Analyst

here. your hydrogen that bunch just you Andy. a quick On X the are there in outages calls whole within industry, which were you'd were Perfect, a restricting margins. times, And to to indicated quarter headwinds have but supply. the quarter the multiple unplanned also last get were indicated your Those Those improving clarification of into headwinds things third January. the margins are also fourth that as we

and least are that is own assume at downtimes should supply gone those your unplanned ramping So we of up. then some

So we would be as better some of addressed XXXX. those enter shortfalls

Andrew Marsh

is question your yes. to answer The

XXXX. has network it you been throughout at moment, If look stable the the at

increased production in not has which minute stable. -- worrying increased been XXXX. was hydrogen, our what I October, the rest dramatically think is I a network Our in relatively and spent would in network, about RESA And not the of customers receiving different the production, it have XXXX, like November,

Unknown Analyst

very That's hear. positive to

Operator

Craig from is question Next from Plug coming Power. Irwin

Craig Irwin

Ross I'm And from MKM.

Andrew Marsh

thought hired I you, Craig? I

Craig Irwin

but We've a long time, been no. Andy, friends

Andrew Marsh

I Craig. take don't how to know that,

Craig Irwin

Let's stay friends.

really ability a and is hydrogen, green intense hydrogen Plug obviously a a there's your cost costs, more take you product Andy, that procurement interest compelling make there to Power. customer amount obviously customer and a to online direct third-party of about So our which customers cost out bring while much your to

you you on bit give little us underlying of the half started maybe more can said roughly a contracts, the So color you've mix conversations.

the of they of that simplistically contracts. how there these years contractual And hundred year from have million from we burn come have these in if average every mix And do duration X that supply couple pricing contracts your do of position a -- annually, for there people. customers? flexibility typically up underwater with agreements do third-party was What's the are estimate you these on governs up hydrogen the the a last these come much a we with

you through should see Do it? mean, Do I of half that burn of we get look half that we it? how at eliminated?

Andrew Marsh

over just Sanjay. some partners have I'll months. industrial gas this mentioned let long-term our add been that and there's been into this of XX how my who in Sanjay? out more go here recognition, during to the going next Craig, we And XX Linde to on I I'm with playing But see remarks, detail like turn to that I'll Sanjay a helpful.

Sanjay K. Shrestha

Great. Thanks, Andy.

structure mentioned first, Andy suppliers. of couple about here. lot a a -- actually collaboration think are just several echo with it our consideration. been them, third-party think stands 'XX. an to end There constructive right? that let here, hydrogen comments there are correct contracting as to just today, you There's And when by take you And into So that comes several -- if and our me there I actually actually, of very that are comes several contracts what

Andrew Marsh

year. in Some this

Sanjay K. Shrestha

Exactly, the about then much as covers right? Craig, running including internal that production to you going when of and third the be think XX%. actually So as our that JV Olin the by end quarter, and up is

here Now sure customers. Make with our having has said of also pricing gas partners. that, work some to our collaborate the right, industrial our to is continue with is improved, pricing plan

from year you this see a driven on our from production and in talked overall of this the gas about, I driven margin change cost QX fuel you potentially like own Andy lower you will almost fuel to associated of Tennessee, from you see of coming step of from our that type that burn about but supplier pricing that Louisiana the half and year, X-way think trying facility, as industrial year QX profile on a you of really think coming customer. margin from internal step cost as lower QX pricing this add cash a change to we're third-party it's our second passed get from and So and our top really and think Georgia, where from with trying our get by I customer in of and that production better cost better then a our business. blend by the to will go lower situation our -- through We're cost

Craig Irwin

Excellent. Excellent.

XXXX. call, you equation green color the price you've plans place XX% relative In the more discuss, and saw I in is give So piece hydrogen wanted that. contributes increases large piece a of reduction that's hydrogen in versus -- to pricing, then maybe an Can in you capital the rightsizing headcount have mentioned important as So the bringing from really bit you as place? you last the that online it's painful, us contribution in that how that and little that and but needs. of what I Obviously, far a for cash know a right? put reductions working 'XX

Andrew Marsh

want take Paul, do to one? that you

Paul Middleton

math. Yes. bit of big And I directionally more think make it there's little to follow a the a that couple easy numbers

Right If the to you year, that we're of look that trying at plan get million. We're is million. last year $XXX even now, of $XXX down. north tentative This number. cutting

look last reduction that's we year, inventory, roughly So itself. then at And substantial $XXX a you pretty in if million. it by grew

Obviously, this a going so year, million that its $XXX to own. we're improvement that's not on do

In that, we reduce inventory. we to think addition can actually

positive. capital working a be will that So

So $XXX it million could million be $XXX additional. or

plus that million $X.X those call alone. just $XXX X it, billion So -- events that's

obviously, streamlining cost we results some that the of mentioned, better. on to the working increases, the consolidations Andy of get processes. reduction the the expect facility that things price we're The like So and

burn the biggest really operating own facilities. getting from fuel the the well. contributor CapEx on The better dynamics But leverage. that our help That availability come inventory will reduction and as in the industry

that And we and QX, the following will quickly grow see already tremendous. And quarters. of so really as benefits move be we're mentioned, in those it as seeing -- I we'll we very into

Craig Irwin

these know EPs And embedded can and for everyone of the Okay. But process out receive to process. about requirements DOE overall on maybe you some there's loan you're funding. of for qualification conversation are plants very compliance that update hydrogen the sites the the about building included Excellent. loan there Excellent. the then how Nipa environmental pieces active been on I

Andrew Marsh

So I'm going to turn Sanjay. to it over

But deeper not about of Sanjay, to opening talk this remarks, expect approval Craig, by my if I the you sooner. prop? in the As month, end we mentioned want conditional

Sanjay K. Shrestha

most we -- right much benefit the have we incremental right? that think the getting project our is the have I is on work of developer to one one the we're that with that a very there really done And with worked is now the done focused project we leverage. out in Craig, Texas, of So lot we a now. program right where looking a here, actually And pointed that And process it obviously, guarantee past of can we're in was as lot environmental is there's that terms getting get work you that of in key, which loan the that to restarted rightfully permit that done.

has have versus that in on place in wind going that. about of we a exclusively with in especially credits a And being PPA, using have focused We before, using this are the Texas, right, ] the of getting we on to or faster done. process going matches the terms all renewable about should very are you of QX, the that standard we like that you've landmark been able plant you Energy, of good actually, timing that up we the we green get of loan where be end say one energy to the to program, additionality can actually with largest of timing heard here think we from relatively to believe be that We about in is guarantee that, Nipa Department to really process to [ a the the work hear done, everything where Texas, feel collaborate team done is a of able all project NEPA process that hydrogen terms especially us we're given that approval be your right, the liquid multiyear talking believe case that power, wind is certainly perspective. energy the it's wrap that leveraging actually by of when something we QX, the

has electrolyzer It's contract. the hydrogen sum probably plant and lump XX turnkey EPC XXX-megawatt plus tons be to a going green our first that [indiscernible]

that So needs where that's be been done with to that's pretty really now. primary we leveraging about all that has Craig, about past, we work it, feel in are we done focus really feel what the good and the process, right our how and

Craig Irwin

XX% not far a Excellent. So of this up going to that of for project's DOE us color of lot give for understanding but And people, loan sure XX% answer, can to I'm you to close do how is then wider is as as to slightly costs scope project top loan sort number, maybe of the incurred of some as other development and this you there's can but expenses -- some try fund eligibility also right? anyway. been being that maybe that have as receive think far funding or as a the the not rational I'm then question for spending, It's and mind of there, cost other you retroactive see can projects this you out costs some it might and total about associated conversation these just packages. about far as

opportunity finalize you as Is potential the Department that terms Plug to a with mentorship. look of for

Andrew Marsh

Craig, here. take going of to some let Sanjay half take Paul let and the I'm half So first second the

Paul Middleton

And We've used with serve to as worked We've DOE gotten and doing in how the I work. really, those the what as and Yes. to looked thinking and we doing have it, X.X the with proxies about this understand projects we're really we're why -- point will the baselines optimistic. very it to structuring how guess projects that way because we're looked good deployed. have we're they reason is at working years. we've last And last and the we've we've I'm on. extensively the at confident at

these full to so the And and feel while with that how about sourced good being very the And understanding DOE the utilize of applies. XX%. I are that and work able it and we the how coming to fruition costs have programs

that. so I know I feel and, if really good And don't about you?

Sanjay K. Shrestha

that it. I it been I there kind don't Yes. But of project having the a that, more final details look, you rightfully into think, And think, -- has get to get capital there's detail. out, through pointed obviously now. here, is spend where too going quite Craig, much and as captured right said of Paul, you we're probably want to bit

So about effort, pretty that been on it's getting think has of how project we position built, much development this in procurement all right? good I the it's whether actually items on our big whether money feel spent, goes

scenario that So could unfold.

given pointed at this as time. this -- in-depth discussion in we you here, we're As all that having point out

And I time spent where you're money to about our pretty more from probably do point feel has we would perspective your our there. much been equity and a than think from. logic, for this detail in get we too but that in that at position want into good the something point not coming understand getting lot is project Texas, contribution your of

Craig Irwin

on Congrats here. progress the

Operator

is Your from question Peterson from next JPMorgan. Bill coming

William Peterson

we focus if think third, -- a sort but cash again, starting should and a think of shifting cost than year, the in reduction second second Typically, from the the margins so PPAs, you halfway thinking of So first more with about away now? we 'XX. trajectories discussed growth How to preservation, improving pricing, half, have service the about half guys through through efforts, from context forth. pushing about your -- on revenue margins, quarter the business some shifting 'XX that's revenue X/X equipment XXXX first

handling, -- anything at how And forth. like materials discuss a the would and think especially more IRA in presumably weighted, to more trajectory be the then and maybe have But about buckets, you for this electrolyzers, level, -- year higher helpful. of the so breakouts be the growth if revenue larger around the kind which certainly might you can back-half

Andrew Marsh

that Bill, one. I'm going to take let Paul

Paul Middleton

Yes.

year-over-year. for from tempered slightly projects of even in I well factors revenue keep the think of year. overall, growth seasonality X/X follow-on will still not past transactions new the expect those scenario given those probably in both doing terms We the X/X, of leaseback and with that of in handling some a of terms It do as scaling will others. sale dynamics us kind as material years increases PPA just price of the the normal and and

whole the I using the think sales in trends think at So percentages is really those and our technology somewhere think and -- first that I strong think swath terms for business be range. I sets that of the but talk in overall, growing. XX% is how that's think And I'll think of half the half, I second the a in mix, all I the I statement mean of level. into probably a probably energy good ramping showing overall traditional I of things of business, higher sales, and more terms proxies

opportunities because I do in are And opportunities. I side we've of Andy still see substantial are programs And the a there. lot think, And mentioned, week, lot seeing even And that being what of announced those the we're on there. application we as interest hope the conservative markets. and our are fantastic signals last we're a excitement of

today, are So your we're as thoughts the guide said probably that that would being proxies think hopefully, you to we play. I on some how of those but give I conservative, will

William Peterson

XX tons you Okay. about talked looks Georgia. day? And is how what at it's and just nice see what output like sense a operations the day but looking just for get running trajectory running believe the trying per a and as of up achieving the But per are I George to snapshot, Tennessee, to out that is at? average

Andrew Marsh

production tons Bill, almost of per out XX we'll We by be Georgia. full back expect XX day. putting tons fine-tuning. XX second XX, of out all So to we're tons is Tennessee, mid out I produced the of quarter, Georgia, at XX

William Peterson

is of cash today what final the one $XXX current near-term last able just million. of January ahead. And housekeeping. update, Go above your you position say? sort -- to about Okay. if around -- What near-term unrestricted you're talked just cash is

Paul Middleton

north of even minus. range, what encouraging in very we're about we've in Yes. terms [indiscernible] we're still seen that down. and and to I something probably are narrowing we can couple further plus been. laser-focused first on mean all or CapEx -- it's of in we're that doing that's And talked we I the of things XXX that months the when it's mean and deferring drive

So.

Operator

coming Next Genuity. question from is from George Canaccord Gianarikas

George Gianarikas

have existential of I sort So an question.

areas beyond new some from digest should Power and offer geographies capital term? hydrogen we as of what returns sort from on expect the recover market you probably XXXX. or the long focus we treasury of focus of rules XXXX As Which best the in Plug

Andrew Marsh

have good we the see is That's I -- that a think we been issue. And you'll that what I lot George. -- think spent is on question, -- actually this during time actually this and a spending of

business this of well X/X that of the rest decade through represent revenue with generation as electrolyzers think the during of probably energy hydrogen I this as will our decade.

What George, existential. we especially there, said business, but you believe going And to is out see application that what you're way stationary products. not to to come me our XXXX, is growth go accelerated our in

I -- is will XX, think X XX, probably more as and dominating more hydrogen available. readily by applications again start by

energy to start on and sector, electrolyzer the U.S. think more actually the I our out. during Europe and ultimately, -- I will years the dominate that think will that balancing Europe our X energy on then sales next X sector,

would much our 'XX. obviously, look view of be better internal through what for that out 'XX our ball XX. is as is And we But kind crystal

for U.S. that So sector electrolyzers. Hope It's helps. applications. for energy it's your the the it's

George Gianarikas

X.X announced, U.S. Curious I handling. ago, support OEM a any share in And material detail. can as weeks to to maybe think, you as about a follow-up, more major a whether auto contract you

mentioned think will Any additional that of be the quarter you XX% I operational. first detail?

Andrew Marsh

a will you during be at which their tell quarters, allow a coming products, new perfect hydrogen-based to hope we look continue able deal. campus, will is when also more, opportunity the which it's include -- U.S.-based a customer. a it's big It's suppliers, customer. to which I to using It's we'll will because a It's us be it, but grow.

building. almost the there's a fueling that think hydrogen dozen I inside stations

new then this end new at and over you'll is about project this and today. products of elsewhere which grow up. have during pretty cells In XX how we the what have fuel the in typical seen year, think example, the it testing we've we initial buildings this with for products end. auto XXX facilities, where case, and George I those And duplicates run of think BMW, about I BMW with at started come Spartanburg, if could at rapidly

is base campus bigger supplier than will the what this I grow ultimately become integrated BMW to continue of because see there. you'll think So and all I think will

Operator

coming from question next Landon Your Skye Redburn. from is

Skye Landon

stages? XX% secondly, this Andy. of assume then in during we or Texas in auctions But projects moment. we've first In business, start Europe is does on on expect projects my some half or hydrogen order is base on first case, New electrolyte at hear in And clarification mean cash you half 'XX XXXX your for York XXXX? I to expect now now when the timing? new for reaching to in a CapEx production rules reduction U.S. are in interested question Hopefully, outlook be the case going the 'XX flow or contract-ready got any these Or And XXXX the get seeing the on you start? I'd the take guidance, burn base projects the this major see when coming do the to second do whether

Andrew Marsh

first I turn will to the and let take Paul Sanjay usage. it for capital then electrolyzer I'll over

Sanjay K. Shrestha

with you, XXXX. in Andy. electrolyzer multiple you a, right, in so actually we that some design Thank large saw on side, package customers Again, did basic we sure, the announced Europe. I'm guys engineering

world, engineering have would, package right? throughout actually of lot in even customers We basic you done the if design a those with XXXX,

X doing of that within book actually our or that. engineering almost package is the gigawatts work you about business think think the when about we're approaching that design basic you when So really

largest think design optimal helping and world's XX-megawatt design a that's customers actually well. the to to electrolyzer we're about Now them the long think with FID, had needs in out hand-in-hand of support and working the customers, the through having of Western the way to plant as package having where thinking in build Hemisphere the built project engineering way these goes some think terms but prime basic get to that through helping them what's Georgia,

a we you for of in have think We backlog have revenue, about a already right? it, lot backlog. the to when comes it projects XXXX, robust actually pretty when X-megawatt the Now

do delivering projects to already in existing do cash. One, also do megawatt in the really really that about XX have the that backlog a position able is some We that's one executing large system We backlog. good executing, a us few we're in into so to puts things. about really inventory and the convert be have backlog on

as cash our going is be to the drive really business generation well in XXXX line as growth. This top

in to Second see piece, XXXX. you're going

start in P&L. see opportunity second to will as you that will As we half price down cash improve again margins margins costs see in as to but great the start not execute in higher in well be of this improve the as will flow flow QX, going QX. backlog, also as It as year through you

projects very pretty whether done by that to revenue XXXX package the in But a much of giving really Europe, become opportunity a that be lot these it's this and backlog Australia, and in the actually on about so in us where going year. feel that U.S., these opportunity, predictable clear, base beyond about projects, XXXX, of design whether is let's real it's to a large projects fantastic revenue, going be XXX-megawatt There's we for going right, not it's predictable it's margin. many on middle whether very starts basic have winning business plus So but more the into do project concrete. really of we FID good engineering

Europe, very see we give us for you still us. robust both near growth existing in very the strong This this our as business in support the of will as Supporting executing year even about Again, X-megawatt backlog performance feel good in that and for really generation, new visibility. U.S. for in a product And about XXXX. on also business cash growth term, for in electrolyzer XXXX. where Paul? is on us to focused line XXXX, well we're materialize book that's to

Paul Middleton

not and Olin projects predominantly current in that developing opened we're a finalization completed. And of had kind end for is now the of funding we're residual have year On York, term money. of Louisiana I at the vendor building for and a plan. on couple lot had already we and plant on rolling and paying we spent that program. the that that of the we New out the It's last extended guess of things. some given it's Texas of with the Georgia investments the we've Yes. program retention One, hydrogen the and

the in majority, turn solution we launched fund that solutions. in near spend. position But tempered us all it term the the we've if and the good we that would until retailed a as of kind that financing right money We've not launch that new that spent, we the given on those of puts incremental

into in half covered we the on as year, of we next expect that or be to the majority turn that second financing. So new with

Andrew Marsh

as I fact -- do the electrolyzer, the of the file things much like in already, electrolyzers as stock, Have example, as that as storage of mean have well to the Paul, we equipment. well the for rectifiers, [indiscernible] many liquefiers

Paul Middleton

Yes, lot of things we a have. there's already

Andrew Marsh

you, jumping think I of ahead Kevin, ahead. go it's

Operator

from next Stine question Craig coming from Eric is Hallum. Our Instructions] [Operator

Eric Stine

the stick one the of here with just end call. towards I'll

when given So going Is for side the year? do and balance it I many guiding the hydrogen, commercial opportunities, not just green focus what more can XX, longer side. curious, what's versus term, appreciate cash you on expense that when you XX? on the with But think so that

been at you've several on back rapid Is traditional more that on growing it a years you the growth pretty get in when for path, one clip.

Andrew Marsh

on things 'XX deployments. and XX, reference costs would as in expect to and expect was line Eric. to part made this remarks, traditional looking I come I we we have remarks. let risk out going to energy year. year, of we I'm In expect project and didn't separate in to that There's performance. And expect his the if comments, in this growth that Paul expect certain but getting it year. zero think going timing was he let going on to it application But I business, Paul's I Paul would that, I back the his would business, the think think we I our Paul probably get to focused healthy grow take That I'm always this

at and better my margins. but in are think Paul, I grow clear we pricing year, this to opening want expand it comments, continue this really to you business, better I made add? But do to looking and

Paul Middleton

and I I one certainly upside of this don't year, would overpromise we lots but Yes, anything believe you say want that is everything to hope I thing opportunities. there's that think is add

think towards we the better as think certainly 'XX. even definitely there's we're position ourselves a kind there's X growth, work we even and upside -- year So as move though can growth tempering for through we and incremental into of that we posturing on chance

Andrew Marsh

respected. if the electrolyzer you can in to look involved build our the well facility really think have. activity plants, nobody the doing Netherlands that a tell for about you is When we ability this design the about like Sanjay think we've talent So with deeply business, Eric, in I and I have folks that has been who been

And believe I to And so we've unique the made in puts a investments strategic support there. the out that us really position. infrastructure in buildouts. versus large-scale the competition

Operator

Securities. from Next coming Levy Jordan from question Truth is

Jordan Levy

I equation. through this trying that volumes all run we and term do you inventories the in for while a as think optimizing kind reduce that on sense. of coming about the lot I you this scale what right details. comment to of appreciate is to for plant and Sanjay, -- just built it long to maybe and the time electrolyzer up But curious, of of Maybe the is go makes you're the I'm about rate to back think year, you've of that point here just how at this going last side, out recognize how balance do sort kind

Sanjay K. Shrestha

executing about is lot been year, of on a Great in-house, make thinking use lot We're sure time it, to question. that. again, that there right? obviously, through this That's we've going really of So through we spending, something right? already inventory a it's and

There's we I -- a this in quite of product already have that's is right? as backlog, a it, think So X-megawatt said. bit just really to the focus about on

it, projects, using year per execute we've is has a of not labor this All product really about these think megawatt with procurement about sales, already partners, bought. to of backlog. when one the strategic been what And on optimizing We strategic some we the the overhead or stack that's made So some that really quite in the se. capacity have you do right? bit already also the It's right? about more utilization

like. start see should in you will out But as generation will that out to a actually burning start to then is not into think what step you revenue in was see the I change to the existing to design one, half QX Number way the So as the see into another margin you'll these quarters just but the the also that to step this stack you then change for in profile, year, stack go lower actually about well in one similar are of going QX, the the cost somewhat QX revenue QX inventory. QX. go single it change think the QX cash we of we we'll work that with in as in this comes step as down of us new margin because on every cost see you and a the allows that business helping cash change, improved you as And a of QX will generation is start step year. this second also in

lot So the having wonderful have refer of working to sure the for customers. the we some got site hand-in-hand a the to it's making do cases, really a about goes different things acceptance been to acceptance not really then It's as we've lot to when in site what test been actually unit with more of and challenging. collaboration In you with factory about test customers, opportunity find business that electrolyzer from go needing XXXX. we

here, trajectory really not what pretty to but I new we've go to to is through be is That margin position think bookings. we're together, do in great you year this that business. way going not do good a think the cash to -- in long learning I puts and generation a deliver changing as say We're to going come a us continue which a

U.S. You in growth that product support our as both line, on come will XXXX. X-megawatt will well see as Europe in new bookings for

predictable, just was And well high very really into and with stable, this approaching have X as us. very as that puts position then not build design a margin us this backlog cash-generating where for a think basic at this we opportunity looking that gigawatts, we're business package XXXX engineering the good making is about beyond the XX%, in going but

Jordan Levy

cycle you that. with a maybe communication of quick get helpful. this the just as the that. and belabor And guys in so timing where term here, constant there's at Or on a all you then of still with the point? much the the Appreciate are Is to in at point of back at I'm a and sheet this in can court the curious point get forth say, in just really follow-up, where to the of That's kind only sense not just DOE's you're sort but know them. I DOE process. trying are ball we and I'm to

Andrew Marsh

So quarter, think March, and as my I comments, do the end should There this conditional written approval end negotiations be we I will month. of do mentioned of this be is -- we we be view that And expect and then. expect the our in should finalize. by it is the by third

Operator

from Elmaghrabi Sherif from is BTIG. today coming Next question

Sherif Elmaghrabi

Andy.

bit of in question, the but a nuanced So I QX. guess price I for fuel significantly higher a noticed cell average was

have So already from a just are is may cells? my story? we bigger that shift is, a been fuel mix quarter to impact seeing 'XX Or efforts? an more question of this And still pricing

Paul Middleton

to Yes. sell We In Xs QX often. QX, it probably was more more lot in mix. tend a Class

'XX helps But in pricing see that impact more so to. in of at when as you'll is structure. look alluded think terms Andy you of probably and more overall that So as the I QX,

Sherif Elmaghrabi

color. helpful That's it. Got Okay.

Operator

coming H.C. is from Dayal from question Next Wainwright. Amit

Amit Dayal

Andy.

right? on focus growth earlier, assume versus margin not sales and that we coming XXXX your is for on on of improvements a really from bit Just for just on loan, the execution quick this given the in plan one one me So through dependent should based little XXXX And the facility. you DOE aggressive X. the comments operational this

the a Just for with the you give can resources? support overall help of that needs sense cash would available that us business basically what just

Andrew Marsh

Yes.

Amit, the for So we're not operationally, DOE 'XX. loan upon dependent

see significant our move We will, investments the some we have in capital DOE because Texas, that already finalize, once activity. in more from support loans the Texas especially we've and to that even to opportunities coming made activity aggressively, ahead DOE

we we've XX/XX, a -- think So Texas, made we at you feel of already a -- the the lot investments. for capital it about deal, look good example, when in

Operator

is from Capital question from Markets. Ameet coming next Thakkar Your BMO

Ameet Thakkar

from kind in the detail a I gross from in margin of all 'XX? time? on revenue starting just of point, For that guess Is in this 'XX what sort

Andrew Marsh

Go ahead, Paul.

Paul Middleton

with I numbers, specific guess, to given be really haven't We candid you.

And expect improvement I that is on you'll see think the of see numbers. what margin a we're revenue definitely we we've alluded you'll off the obviously, definitely three, pretty to significant -- anticipating front. growth growth

that's So where we stand.

Ameet Thakkar

we're your plants? of of kind with 'XX Texas is the since then forward impact guess, And waiting move DOE getting from on to any won't and kind to margins of be I New there off-takers in Okay. York, fuel that from those any fuel

Andrew Marsh

I'll No. plan. the Sanjay that. let not in But take no

Sanjay K. Shrestha

mean that level we have I impact of No. is XXX. don't any in

Ameet Thakkar

both from plants? there offtakers are there But those

Sanjay K. Shrestha

a we we've we've have us I Georgia, do and been the Again, the this always offtakers was many the in North How American used focused build to really you question think Yes. think a reason Like, guys example, for for on, said right? Georgia network. help to lot. way to was for I get

in to our really optimize the always we cost when So there's been the New plant trying Second, than right? that's really our Texas about think and price, lower more York, But focus. which actually you in why a that. kick Texas, impact some lot of from doesn't there whatsoever offtake, right, plant should discussion that in but is XXXX, no see in was the

Operator

Ailani is coming question Dushyant from from Next Jefferies.

Dushyant Ailani

the question one you lateralize that the a mentioned. cutting just bit? quick on us cost had through just Maybe little I tax guys that on walk

Andrew Marsh

Yes.

in really much -- process to manufacturing it's produced cost allow mentioned be cuts. changes It's stack a we to fashion. simpler So the

dependent done upon it think tour a increase suppliers a I the facility -- So for upon time dependent it's and improvements. manufacturing on and really actually helps if you've it's not process stack it's it

That cost and and the really the the level reductions materials on we require we've assembly simplifies some had made, stack technique. dramatic of which really

Operator

question from Percoco is next Our Morgan Andrew Stanley. from coming

Andrew Percoco

a down a the just bit. And gross the margins quarter? start in with quite Well, maybe in that. there have impact number a Was after came follow-up Great. quarter embedded Product fourth item. housekeeping fourth I then in noncash that any

Andrew Marsh

Paul. Go ahead,

Paul Middleton

assets And dynamic part have noncash into when probably that affects was so cash lower part going leverage absorption margins. and in XXXX. it. there have Yes, that But when of then other the million GAAP that was equipment roughly -- you or -- intentions the those have them estimate you equipment on side, adjustments. was That's to we basis. so $XX Obviously, valuation are to I'm a still our

a we've in lot announced, those activities And as production labor and restructuring actually specifically of were targeted the towards overhead activities.

And so that into should move as 'XX. benefits yield we

I to are -- was that of on [indiscernible] things the guess your key some equipment So margins. those and question

Andrew Percoco

of And answered. have my then follow-up, other I sheet dynamics as Okay. cash related That's been most and and questions to helpful. my kind flow balance think of

seeing electrification as developer returns that increasing. the So a others longer-term to on what cases, already And landscape noted prices the just lot maybe of for clean question actually result. as some have increasing In a environment, I on a other are you're I'll shift the is think, demand call, efforts. think PPA data are I across there's electricity, centers, AI PPA

mean What on if a working of unit PPA XXXX. know for from of the don't prices your green your today. secure plant unit for does But you're business hydrogen PPAs in economics economics lot do the and that that you I U.S. beyond the your work XXXX here? fall of

Sanjay K. Shrestha

Andy, can that. take I Maybe

Andrew Marsh

Yes. Sanjay. Go ahead,

Sanjay K. Shrestha

Texas, effort, the in well natural of I do PPA where is discussion think think Obviously, Georgia, some in our So of still sort the power have that some development the trying in deal favor right? we think other prioritizing here X remain attractive key to right? gas actually that have pricing given we are that I in going pretty to we're as actually focus have market about, playing on. pretty talked price I Andrew, prices as is, even we're And well, here. with power glad as in dynamics know, we pricing projects other what we've the we're out going -- that already 'XX, we've secured So you even overall

of hydrogen you said, the half second all in hour -- prices always power the rates right? of and and loaded, megawatt XXXX. power Having think that, $XX as the about of that electricity. power we've down. U.S., level, to that year, As down. in could go to directionally, year up even remains this continue stay have But number economics said And from the market, really view look, does $XX the I could sense green it long then That's all price the our go the and the we a these in go to any in directionally, For is work believe green economics that from will go we've still But impact have think one. down had where here? and this -- probably hydrogen But fully prices power impacts cost it levels through given cyclicality to levelized make it dramatically all been right, the between not. probably

can in about opportunity some Europe hydro, we opportunity hydrogen two, this very really green as renewable been low-cost we also And as think where about being right in we that location complementing set number low-cost with the well, cities. also of thoughtful leverage electric right have

the are anything, to from turbine that that these relief rate any some So right? environment. also look, should cost down the the that at there enough will rise the probably some interest if looking environment wind the inflationary in have see to go If and point, start of developers you return of the is hopefully and and a offset for, hurdle benefit is

rate but So go should time directionally, another you view years. we really working not need cost in electricity seen really point X years that we've sort to don't of of down go levelized a still the But XX price this think when at again, renewable certainly in at our the continue out, down, the lot. to is last

Andrew Marsh

to have they XX% the green you be I in hydrogen, we've XXXX tell a I XXXX. XX% with in And they'll of U.S. will bigger Europe, would hydrogen is just for picture, least at green. and know, goals Andrew, number expect the think in has And add very that leading as I've mentioned where the consulting be they stringent very, by work done you

come So there are that play. into other dynamics

Operator

from Sandler. question next from is coming Kasope Our Harrison Piper

Kashy Harrison

you getting here. me the on appreciate call I

you're So And involved. in for that my fully one, first difficult highlighting I XXXX. I guess reductions appreciate are million savings extremely expected people $XX of the

targeting be is, more to you aggressive? cutting to asking something not aren't you aggressive? why not aren't So try basically, more I'm Why what Well, trying something

this up XX% Because XXXX. at is revenues your OpEx and that's XX% of from in point

aren't why to And year? in this you half so trying OpEx cut

Andrew Marsh

some are same Kashi, us because targets. Those XXXX. be like gross margin good for folks improving in to folks this are that folks Those but can it Texas. become experience. mistake important the cash to building positive a the same same for folks plants We for customer think, I are will may critical model critical look it achieving in in Those our flow 'XX. company so huge XXXX, operational and out

yourself. in [indiscernible] I off, don't chains and But business put keep Excel front think Belgrade that businesses than more the of much spreadsheet is you

Kashy Harrison

mechanical from dealing in Fair how purchase K a with in walk leasebacks think are then banks. now maybe my customers there the follow-up Okay. change question, through more bit direct the the the comment that directly works to I And enough. customers nature. Material was a Handling, us the Can with you sale within

if was And process prior. how it you did today sales works could so us through I help the just versus exactly how wondering think

Paul Middleton

a that guess, I preface, of solutions. their like lease asset So customers as lot to a industry,

credits forklifts, benefits it's lease both those to. is lease do offered and they when eligible participants been they banks go Historically, the terms And to We've the options so you options. limited to because in of market. to more and a it access that has is we it tax them it can lease bit -- investment monetize for where solution challenging becomes leasing that we offer the the then equipment their and ability like their offered customers we've lease they they equipment their trailers, tractor racking to and some just buy that offered we've way

will the to us subscribe a to it, banks of are that of working going and forward, those probably and investment we pushing historically, the we would up man So but sell package towards lot deploy benefits. the aspects for where middle cash those being back themselves maturity the customers, and to and to tax curve, been to we've still would solutions, facilitate use would transactions to then and those take Because so kind of had they in that it and lease that. monetize the bank more credit the then customers we it, them with in we've the a

just was technology. was it would on, dynamic started that we add newer I early And when another

The level been book section. drops kind things cell fact banks a go broadly doing as have, technology and there and it that more banks So They the on to with and are years and customers don't and so are the understood. that substantially up for we for or now, open the been like years, fuel and many can this broader we've been have the is made forklifts or the banks section turn comfort XX like also and involved this of and new to banks. they XXX cars that there around hasn't

And with. of And easier. we've so fairly that now it that banks makes we work portfolio big a can built

the place. much programs conversation easier a for becomes so those when put to banks, put in to we customers And them those it now

is is sale as longer it and so lease buying the and still that that's what we're they're their just we're we're middleman we're for the pushing to towards whether or bank And for. it what customer treat it them, no the us, we that's having working that facilitator buy CapEx and a

Operator

the reach comments. to Andy to back our the floor like further I'd end question-and-answer session. turn for We of any over closing

Andrew Marsh

opening statement. Kevin, my X sentence Thank and or want you, for reiterate I just to

XXXX, months. and and talking and economy, the focused by for And and our foundation, to moves also capitalizing let it company approach -- everyone propel we Have innovation. the the sustaining persistent to sets cash good I it's the towards be thank also but for of existing cautious looking management. growth forward but stage to resolved me matched are strategic a are this time we you financial over No on hydrogen our investments As next is continual shift to the fortifying on expansion. a into clear, today day. many

Operator

Thank and teleconference does webcast. today's you. That conclude

today. a time, have you thank at this wonderful You line may and We participation day. disconnect your your for

Plug Power (PLUG) 1 Mar 242023 Q4 Earnings call transcript