Plug Power Inc.PLUGNASDAQ
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Operator: Greetings, and welcome to the Plug Power Third Quarter 2025 Earnings Conference Call and Webcast. At this time, a question and answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to Teal Vivacqua Hoyos. Please go ahead.
Teal Vivacqua Hoyos: Thank you. Welcome to the 2025 Third Quarter Earnings Call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations, or of our financial position or other forward-looking information. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933.
Andrew J. Marsh: And Section 21E of the Securities Exchange Act of 1934. However, we believe that it is important to communicate our future expectations to investors. Investors are cautioned not to unduly rely on forward-looking statements. Such statements should not be read or understood as a guarantee of future performance or results. Such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under Item 1A Risk Factors in our annual report on Form 10-Ks for the fiscal year ending December 31, 2024, or subsequent quarterly reports on Form 10-Q, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day on which the statements are made. We do not undertake or intend to update any forward-looking statements after this call or as a result of new information. At this point, I would like to turn the call over to Plug Power Inc.'s CEO, Andy Marsh.
Andy Marsh: Good afternoon. And thank you for joining us. Plug Power Inc. delivered a strong third quarter, one that reflects continual growth, improving margins, and disciplined execution across our global hydrogen business. For the quarter, we reported $177 million in revenue, with balanced strength across our core businesses. Our GenEco electrolyzer business generated about $65 million, up 46% sequentially and 13% year over year. Clear evidence that Plug Power Inc. technology continues to gain traction globally as customers scale hydrogen production. I think just as important, we're improving the quality of the growth. Operation cash burn improved by more than 50% from the prior quarter, driven by pricing discipline, better execution, and tighter working capital management. These results show the tangible impact of Project Quantum Leap, which is transforming Plug Power Inc. into a leaner, more efficient, and more profitable enterprise. Bottom leads about focus, simplifying the business, aligning investment to near-term profitability, and resolving legacy issues that have limited performance. The noncash charge we've recognized this quarter reflects that effort, cleaning up the past while sharpening our strategic priorities. As a result, today, Plug Power Inc. is more streamlined, more focused, and better positioned to deliver continual margin improvement and cash flow gains. Operationally, we continue to execute at scale. To date, Plug Power Inc. has more than 230 megawatts of GenEco electrolyzer programs underway across Europe, Australia, and North America. A real highlight this quarter was the delivery of our first 10-megawatt electrolyzer, the GAP project in Portugal. The first phase of a planned 100-megawatt installation, a clear validation of Plug Power Inc.'s ability to deliver complex world-class hydrogen infrastructure. Our hydrogen production network also continues to improve. In August, our Georgia green hydrogen plant produced 324 tons, with 97% uptime and 92.8% efficiency, underscoring the strength and reliability of our operating platform. Earlier today, we announced a strategic initiative to monetize our electricity rights in New York and one other location, in partnership with a major US data center developer. This transaction is expected to generate more than $275 million in liquidity through asset monetization and the release of restricted cash. It also positions Plug Power Inc. in the rapidly growing data center market, where our fuel cell systems can deliver resilient zero-emission backup power to mission-critical facilities. This initiative is directly linked to our new global hydrogen supply agreement with one of the world's leading industrial gas companies and potential purchases from some of our North American electrolyzer companies as they deploy hydrogen sites. The agreement secures competitively priced long-term hydrogen supply for Plug Power Inc. and our customers, a major strategic milestone that reduces the need for near-term self-development of new plans. As a result, we suspended activities under the DOE loan program, allowing us to redeploy capital towards higher return opportunities across our hydrogen network. Together, these actions strengthen our balance sheet, expand our reach into dynamic new markets, and reinforce our disciplined approach to capital allocation. Finally, I want to touch on leadership. As announced last month, Jose Luis Crespo will become Chief Executive Officer on March 1. Jose has been instrumental in driving Plug Power Inc.'s commercial growth and building our customer relationships worldwide. This transition represents continuity in strategy, not change. The roadmap we've built together remains in place, focused on growth, profitability, and disciplined execution. Also, look, the world changes. It gives Jose flexibility to evolve our strategy as the hydrogen market matures. He is the right leader for this next chapter, and I am confident Plug Power Inc. will continue to thrive under his direction. In summary, Plug Power Inc.'s progress this quarter demonstrates a company that is executing, improving, and building momentum. Our technology, people, and strategy are delivering results, and the fundamentals of our business have never been stronger. With that, I'll turn the call over to Jose, who will discuss our commercial performance and marketing activities in more detail. Jose?
Jose Luis Crespo: Thank you, Andy. Good afternoon, everyone, and thanks for joining us today. This is my first earnings call as President and incoming CEO of Plug Power Inc. I have to say I'm both excited and honored to take on this role. I've been with Plug Power Inc. for twelve years, helping drive our commercial growth and making sure customers are always at the heart of what we do. And that won't change. My focus will continue to be on growth, profitability, and disciplined execution. As Andy mentioned earlier, we delivered $177 million in revenue in the third quarter, and we're seeing solid momentum across our core markets. Let's start with material handling. This business continues to perform well, and our customers are really seeing the productivity and energy benefits that come with fuel cell technology. More than ever, customers are recognizing how fuel cells free up utility power in their distribution centers, power that they can use elsewhere or simply save by reducing peak demand. And the investment tax credit for fuel cells has been reinstated, which makes the financial case for our customers stronger than ever. We're having great conversations with our major pedestal customers, Amazon and Walmart, about their 2026 plans, and we are expecting to continue growth there. We are also excited about new customers like Floor and Decor, where we deployed our GenDrive fuel cells and GenFuel hydrogen systems at the Frederickson, Washington facility. Floor and Decor has strong potential to grow into one of our next pedestal customers. Now I'm going to turn it into our GenEco electrolyzer business. We have delivered $124 million in revenue year to date. This is up 33% year over year, and it's putting us on track for a record year in the electrolyzer business, around $200 million in expected sales. We continue to see big opportunities for green hydrogen, particularly in replacing gray hydrogen in refineries like GALP and BP and in the production of e-fuels, such as e-methanol, synthetic fuel jet fuel, and ammonia. Our $8 billion electrolyzer funnel remains very active, and the quality of the projects we are pursuing right now is the best that we have ever seen. The probability of many of these projects reaching final investment decision (FID) has never been higher. In Australia, government support remains strong. Andy spent time there recently, and we are very encouraged by the progress on the three-gigawatt Allied Green Ammonia project as it moves towards FID. We're also happy to have Alfred Alight Green's CEO speak at our symposium next week, November 18. In Europe, we are seeing policy clarity finally take hold as the Green Deal and Red Free mandates are being transposed by the EU member states and becoming law. This is giving our industrial customers more certainty around their green hydrogen targets and timelines. We're also seeing subsidy programs like those from the European Hydrogen Bank start real projects, many of which should reach FID in the next twelve to eighteen months. And we are already executing at scale in Europe. We delivered our first 10-megawatt electrolyzer array to GALP in Portugal, part of the 100-megawatt project we have there, and 25 megawatts of containerized systems to Iberdrola and BP in Spain. These are flagship projects that demonstrate Plug Power Inc.'s ability to deliver large, complex systems globally. Here in the US, we announced a new partnership with Edgewood. Plug Power Inc. will provide engineering, plant design, and commissioning for a facility that will convert waste streams into sustainable aviation fuel, renewable diesel, and biomethanol. If you want to hear more about that, Steve Edgewood's CEO will join us at the symposium on November 18, so I encourage you to come. Edgewood is a great example of how we are adapting to market conditions. The US continues to support blue hydrogen, and we're using our deep experience with more than 20% of our team coming from oil and gas backgrounds to capitalize on those opportunities as well. Our path to profitability will be powered by growth. We have built real, scalable capabilities. We know how to produce, deploy, and operate hydrogen solutions. We have an $8 billion funnel of opportunities ahead of us that gives Plug Power Inc. a unique position to lead as the hydrogen economy accelerates globally. Thanks again for joining us today, and I'm looking forward to sharing more at our Plug Power Inc. symposium on November 18 and to continue this journey towards sustainable profitable growth. Back to you, Andy.
Andy Marsh: Okay. It gets question time. Teal? We're ready for questions, Kevin, please.
Operator: Thank you. We'll be conducting a question and answer session. If you'd like to be placed into question, you may press star 2. If you'd like to remove your question from the queue, for participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment please while we poll for questions. Our first question today is coming from Colin William Rusch from Oppenheimer. Your line is now live.
Colin William Rusch: Hey, Colin.
Andre Adams: Hi there. You've got Andre Adams on for Colin. But Hi, Andre. Got a couple questions for you. Hi there. So first, could you just speak to the cadence of JUUL margin improvements and when we might expect margins for that business to turn positive?
Paul B. Middleton: You wanna take that, Paul? Which business did you ask about, Andre? Was there a specific one you mentioned there?
Andre Adams: Fuel. Fuel.
Paul B. Middleton: Oh, yeah. So I'd say what you see is a progression in the margin even in Q3. We had some plant issues in the network from the suppliers and from ours. But despite that, you see a progression because of the strategic agreement which dropped that, you know, we're starting to see the benefits from that. You'll see even incrementally more benefits from that in Q4 given, you know, the leverage of that. And there's certain of that agreement that allow us to work with them and collaborate to, you know, navigate the network more efficiently as we move forward. So, again, start to build. Plus, Plug Power Inc. is continually investing in its own infrastructure in our own networks and how we distribute and manage our plants. And so there's just this continual building process. So I expect to see, you know, another big step function improvement in Q4. And I think, you know, in the course of next year, kinda targeting kinda middle of the year, moving to that breakeven target, if not sooner. So we're laser-focused on it, and you know, we postured with the right cost structures between what we have in our supply and the supply agreement of the new arrangement that we can, you know, continue focusing on all the levers that drive in that direction.
Andre Adams: Great. Thanks. And then, appreciate the color on the electrolyzer pipeline and just hoping you could give us some expectations on the cadence of growth on an annual basis that you would expect for that business?
Jose Luis Crespo: You wanna take that, Jose?
Andy Marsh: I'm going to just add. We're not yet providing any guidance for 2026. No. But there is a good deal of activity in the electrolyzer business. You know, we would expect growth next year, and our plan is for the business to continue to grow. We've been very cautious about guidance because, you know, one quarter slip on a project developing can change your results, but as you could see, we grew 43% versus the last quarter. We have a strong quarter coming up. I think most of GAAP will be deployed by the fourth quarter. And that were shipped by the fourth quarter. So I think you'll continue to see, I think, some good announcements coming out. And good progress, especially later this quarter and the beginning of next quarter. With announcements.
Jose Luis Crespo: You're right. We will see some good progress in the next few weeks. And projects that we're gonna be able to deploy in 2026. So we will be able to see revenue from those projects in 2026. We've been working in many of the projects that we have in the funnel for years now. These projects take a long time to materialize and to go to FID. But we're seeing that many of these projects are gonna come to FID in 2026 and 2027. Because they are very large projects. It will take time to also deploy them once they go into execution mode. In many of them, we have the project-based revenue recognition in the contract. So we will see some revenue. And as Andy said, we will see growth in 2026. And as time goes by and more projects go FID, we're gonna continue to see that growth into the following years.
Andy Marsh: What I would add, Jose, is our sales team has said the quality of the engagements are so much higher than we've ever had.
Jose Luis Crespo: A 100%. I mentioned a little bit of that in the introduction. We're seeing the quality of projects and projects that have high probability to go FID in the funnel compared to a few years ago where we had a lot of projects that had, you know, not so many chances to actually materialize.
Andre Adams: That's great. Appreciate all the color.
Operator: Thank you. Next question is coming from Manav Gupta from UBS. Your line is now live.
Manav Gupta: Good morning. I just wanted to focus a little bit on the news announcements today morning. I think you signed a nonbinding letter of intent with the need to ask to raise to the monetizing of electricity to the data center. So help us understand a little bit your leverage to this entire data center and AI revolution. And various ways in which Plug Power Inc. can benefit from it. I'm assuming through power would be the primary ways. If you could help us elaborate on those.
Andy Marsh: Yeah. I think it's we've taken a step back and first, I wanna take a wanna make a note. We expect this transaction will close in the first quarter. It's been far along, you know, we've, you know, so, you know, think it's mid-first quarter when this closes. This will provide the liquidity on the balance sheet which, you know, which part of Project Quantum Leap has been about. And, you know, Plug Power Inc. next year, is gonna be sitting there with a strong balance sheet which will have a complementary improvement to our income statement. So it's really about liquidity to start. And the second item that's driven a good deal of this is, and I touched on in my opening remarks, about not only our relationship with a large industrial gas company, but relationships with people who are going to build hydrogen plants. Who want our electrolyzers. So, you know, we looked at the world and said, we know how to do a combination of sourcing competitive hydrogen and generating competitive generating hydrogen to balance those two out. As part of this program, we've been exploring with our product management team and development team opportunities to provide levels of backup power using hydrogen to support the data center deployments. It'll make sense in some applications, and so that is a real focus that Jose and the team will continue to be engaging in next year. So, you know, it's, you know, it's not going to be primary power. But, at least in 2026, I think when you get in out years, you know, us here in North America are not always aware of activities going in Europe including hydrogen pipelines. And in that case, you know, Plug Power Inc. fuel cells become a real viable solution even for primary power. So we're excited. I'm primarily excited that, you know, Jose and Paul next year will have not be spending as much time worrying about where's the cash gonna come from. You know, I think your cash usage last quarter was operational cash use. Was $90 million.
Manav Gupta: Yeah.
Andy Marsh: And that was a 50% improvement. And so, you know, we're gonna have a good balance sheet to really position ourselves to achieve being, you know, achieving the goal of being cash flow neutral as soon as possible. And that is the goal. Hope that helped.
Manav Gupta: Thank you so much for taking my questions. I'll turn it over.
Operator: Thank you. Next question is coming from Eric Stine from Craig Hallum. Your line is now live.
Eric Stine: Everyone. Thanks for taking the questions.
Andy Marsh: Hey, Eric. How are you doing?
Eric Stine: Hey. Doing well. Thanks. So just sticking with the data center opportunity, I remember several years ago, you had a, I think it was a pilot project with Microsoft to some degree. And so I'm curious. You know, I know that over the last, I don't know, year to two years, you've been prioritizing some other growth initiatives, but curious kinda how that product offering has evolved or the technology has evolved because, clearly, you know, certainly sensing a higher level of confidence that that potentially is something near term, at least in terms of announcements, whether, you know, whether that means near-term deployments or not, I guess, remains to be seen.
Andy Marsh: Yeah. I would say we've gained a lot of experience, Eric. Both in providing we have sites where we're actually powering electric vehicles. We have done some smaller backup power deployments. We do see opportunities there. Don't want to overstate the opportunities, but you know, the products work. We have confidence in the products. You know, we think a lot about hydrogen all the time. And you know, we're, you know, working with people who actually get things done. So I would just say that I don't want to, you know, the big growth opportunities for us is certainly electrolyzer projects that's going on around the world. Material handling, next year will be core to this company's success. But I think we'll keep on seeing more and more activities associated with data centers in hydrogen. As you think through how you can provide sensibly cost hydrogen to provide that critical backup.
Eric Stine: Okay. Thank you for that. And then maybe last one for me. Just, I'm it sounds like you've obviously got a lot of confidence. In getting to that gross margin positive or neutral level exiting the year, but I guess I'm unclear whether you're sticking with that. And then I also noticed in your commentary.
Andy Marsh: So let me be clear. We're sticking with that.
Eric Stine: Okay. Good. Alright. That's good to hear. It seemed like it, but just clarifying. And then on, EBITDA positive, that previously had been an end of '26 goal. And I noticed in your release that it looks like that may now be a mid-'26 goal. So maybe or I'm sorry. Let's see. Target in the second half. But potentially before the end of the year. So maybe some of the drivers that are leading to that increase confidence as well.
Paul B. Middleton: I think I'll let Paul answer that one.
Paul B. Middleton: Yeah. And I think, you know, we maybe terminology, we're focused on the second half just given our projections and thoughts on cadence of sales and volumes and cost downs and things we're doing. I'd say the good news is it doesn't take much movement of the needle on sales to have a meaningful effect. So our focus is to keep doing the prudent things and driving cost down and doing, you know, all of the different cost initiatives we have and trying to ramp those as fast as possible. But you know, we definitely see continued strength in the pipeline and the efforts that we got going on in the sales channels. And so, you know, our focus is to continue trying to pull as much of that forward as we can. So more to come, I guess, as we evolve the next couple quarters and see how it's tracking. But it's definitely in the art of the possible to go sooner. But you know, that's we're laser-focused on driving volumes and driving cost downs and maintaining headcount, you know, not growing the overall resource base so that we can achieve those goals as fast as possible.
Eric Stine: Got it. Thank you.
Operator: Thank you. Next question is coming from Craig Irwin from ROTH Capital Partners. Your line is now live.
Craig Irwin: Good evening. Thank you for taking my questions.
Andy Marsh: Hey, Craig.
Craig Irwin: The thing you said in the prepared remarks that got me the most excited is that your pedestal customers are moving again. Can you unpack that a little bit for us? Can you maybe explain what they're seeing or what changed for them that has these very important customers saying it's time to buy again, grow our fleets, and, you know, use more fuel cells going forward?
Andy Marsh: So I wanna start off by, you know, I think that, you know, the customers, Craig, have always loved the solution. I mean, we do help the Walmarts and Amazons move more goods. And that's the business they're in. I think that what they have seen over the past, and I can tell you, one of these customers I had deep discussions with over the last three months. What they have seen that Plug Power Inc. is actually on the right track and financially much stronger. And third, when you look at policy, and I think all of us were pleasantly surprised that the bill that passed in July, you know, extended the investment tax credit through 2032. Republicans have always supported. If you go back to last time it passed, it was under President Trump in 2018. So they like the application. They can see that Quantum Leap is actually working. The government supports it. And they basically what's always driven was they save money by using fuel cells. And not using batteries. So that's why they're growing. It's never been a loss of desire to use the product. I think us getting our financial house in order has dramatically changed our relationship with these customers. Who want to do business with us.
Craig Irwin: That's really nice progress. That's good to hear. So my next question is really one of clarification. And I may be reading the tea leaves a little bit here, but your GALP commentary in the press release, you know, 10 megawatts on the 100-megawatt project, it sounds like you could probably ship the rest of that pretty quickly. Is it possible that we see the rest of GALP shipped in the fourth quarter, or is this something that's gonna go out over the course of '26?
Jose Luis Crespo: We are gonna ship the majority of it before the end of the year. There's gonna be a portion of it that is gonna be shipped in Q1, mainly tax because the tax we wanna get them there, you know, when as close as possible to installation and commissioning. So you're correct. We are aiming at shipping the majority of GALP in the next couple of months.
Andy Marsh: And just I think this is probably the largest real deployment in Europe. The largest real deployment in Europe. Right now. Yes.
Craig Irwin: Excellent. Well, congratulations again on the progress. Thank you.
Andy Marsh: Thanks, Craig.
Operator: Thank you. Our next question today is coming from Sherif Elmaghrabi from BTIG. Your line is now live.
Sherif Elmaghrabi: Thanks for taking my questions. First, on the excuse me, first on the electricity rights, are those permanently being signed over or, you know, some years down the road, do you have the ability to come back and use that power to produce green hydrogen?
Andy Marsh: We are permanently signing them over. Doesn't mean that there couldn't be other relationships established. But we are permanently signing them over. And look, as I mentioned before, you know, by showing we can build plans, we dramatically change the competitive environment for purchasing hydrogen. And that, you know, our goal is to continue to work with these folks and look for opportunities to deploy hydrogen where it makes sense. And look. I think when you look at what this will do for our balance sheet, and the fact that, you know, we're taking care we'll take care of a good deal of the debt overload overhang. I think it'll be I think investors will see this as really will be a real good decision for the company long term.
Sherif Elmaghrabi: Thanks, Andy. And then on the equipment side, for these plans reaching FID over the next twelve to eighteen months, sounds like mostly in Europe. Can you tell us a little more about the different sectors they're in, like oil refining for example? And really here, I'm just hoping to get a sense of the revenue opportunity for downstream equipment.
Jose Luis Crespo: So, Sherif, we're getting the majority of the opportunities on green hydrogen right now. On transformation from gray hydrogen in industry, especially in Europe, to green hydrogen. This is the directive from the European Green Deal. So given that, what we're seeing right now is opportunities, as you mentioned, refineries. There's a lot of opportunity there. There's a lot of hydrogen that needs to be converted. The laws, you know, at the members levels, at the country levels, are being finalized right now. If not final already in many of the countries. And they determine the pace and the quantities of hydrogen that needs to be converted into green. That's gonna drive adoption. Also, when you think about the same kind of concept, you have the EU moving or pushing industries like aviation and maritime towards e-fuels. We see a lot of the opportunities also on sustainable aviation fuels and ammonia or in methanol. So we are seeing the majority of the projects at scale in those areas in Europe and really globally. Same thing in Australia. We are working with Allied Green for an ammonia project. Which is kind of the same logic. And then the majority of the large projects are in that in those markets.
Sherif Elmaghrabi: That's great color. Again, thank you both.
Andy Marsh: No. Thank you.
Jose Luis Crespo: Thank you.
Operator: Our next question today is coming from Sameer S. Joshi from H. C. Wainwright. Your line is now live.
Sameer S. Joshi: Hey, Andy. How are you?
Andy Marsh: Okay. Thanks for taking my questions.
Sameer S. Joshi: Jose, first of all, congratulations on the new role. Looking forward to working with you.
Jose Luis Crespo: Thank you.
Sameer S. Joshi: Just to follow-up sort of follow-up on some of the earlier questions. We, of course, we have Portugal megawatts and maybe a majority of the 100 megawatts going before the end of the year. And then Australia is also emerging. Given the international exposure, are you planning to deploy resources? Like, are you increasing your sales presence in Europe and Australia and other regions?
Andy Marsh: Yeah. So, Sameer, we have a big presence, especially in Europe already. We have probably close to 300 people in Europe. Paul?
Paul B. Middleton: Yeah.
Andy Marsh: So, you know, we have, you know, if you look at our product development activity, a good deal of that happens in alpha and in the Netherlands. If you start thinking about how we build an electrolyzer product, the products that are going to GALP, the system portion of it were actually built with one of our fabricators in The Middle East. And it's sent to Portugal, and our stacks are married at the site. You know, we have activity in Vietnam. We have large integrators in Europe. So we do have a relatively large international footprint both with fabricators and our own people to support the business. So, you know, we have people in The Middle East today, for example. So there's, you know, that footprint, you know, we've been able to build this business because we do have a sales team in Europe. We do have a sales team in Australia. Do have salespeople in The Middle East. So, you know, that, you know, we don't expect, you know, there may be some strategic decisions to make some expansion. But we are there already. And I think and more important, we can make products there already. So if you think about GALP, that's good. What we're using doesn't really have, you know, the Trump tariffs have almost zero impact on us at GALP.
Sameer S. Joshi: Yeah. No. It makes sense. Thanks for that color, Andy. On the cash and balance sheet front, of course, this transaction will provide additional cash or free up additional cash. I think when the last capital raise was completed, there was talk about paying down some of the Yorkville lower. Given all these dynamics, how long do you have a runway? I mean, I think it is is it going to extend beyond 2026 with your current cash on hand? Or how should we look at your cash burn over the next six to twelve to eighteen months?
Paul B. Middleton: Yeah. It's a good question. I guess I just put context that if you look over the last two years, the fact that each consecutive year we continue to the burn by 50% to 60% directionally it's going the right way, right? So when you look at next year, I mean, we haven't given exact guidance and thoughts on next year, but I would tell you I certainly expect that trend to continue. And it should be, you know, a much more nominal amount. And when you look at the combination of the capital that we had on our balance sheet at the end of the third quarter plus the capital raise from the recent equity transaction from an existing investor and then you look at the $275 million targeted on this data center deal, you know, we feel like we have more than ample capital accessible to us to bridge through that positive cash flows. So we're in a great position and that, you know, we even have more if we wanted to deleverage some of that, we could. So and probably will work with our lenders to do that. So, you know, it's just a question of timing, but we feel like we're in a great position to navigate through bridge and to get to a point when we get that positive cash flows.
Sameer S. Joshi: Understood. Thanks a lot, Paul, for that, and thanks for taking my question.
Andy Marsh: Thanks, Sameer.
Operator: Thank you. Next question is coming from George Gianarikas from Canaccord Genuity. Your line is now live.
George Gianarikas: Hi, everyone. Thank you so much for taking my questions.
Andy Marsh: Sure.
George Gianarikas: Oh, thanks. So maybe this is for Jose Luis. I'm just curious, you know, first, congratulations on the new role coming next year, but also yeah, if we look to March of 2028, two years after having taken the position, you know, how do you think Plug Power Inc. will look different? Like, what are the metrics by which, you know, we should sort of judge the performance of the company by then? Obviously, profitability is a big milestone, but what growth drivers do you think we should look forward to over the next couple of years that may be underestimated by us on this side of the table? Thank you.
Jose Luis Crespo: So, first, George, thank you. It's exciting to take over this new role. And, on the question, 2028, well, you know, from 2028? Yeah. He asked about twenty twenty years ago. Two years from now. I gave you two years. We've only given him a few months. Well, number one, the financials of the company would be in line to what we've been discussing. Profitable company, now, you know, being able to probably think about growth in other areas of the hydrogen market. And have access to. To be able to finance us to that type of growth. We will concentrate on still on ELX. ELX has a lot of room to grow all the way to the end of this decade or if not beyond. And we will keep on being the leaders in that market. And the more we deploy, the more the more profitable we will become. Our values will go higher and, you know, profitability of the company will improve. On material handling, we will keep on growing. We were looking today at what is the available market for material handling. And it's over $14 billion. And, obviously, we have only started scratching the surface on that market. Right? So as you know, more hydrogen is available, the cost of the technology goes down, we will go deeper into that market as well. And then as you said before and we were talking before, we kind of put a little bit of a pause on high power stationary. By that time, probably, we'll be we will be thinking about taking again on that the data center market, once we understand and find solutions for the hydrogen equation on that market. And there would be a pretty substantial opportunity for growth in that market as well.
Andy Marsh: So those are some of the things that, you Andy, you may have other other ideas. 2021. I would just say, a strong balance sheet, strong revenue growth in our core markets, will give you opportunities to explore new applications for hydrogen and fuel cells as they evolve. It's clear that hydrogen needs to be part of the global energy solution. Whether as a substitute in things like ammonia or methanol production oil refineries, but, you know, execution over the next year will open up a whole new array of opportunities. And I'll be cheering for you as the chairman.
George Gianarikas: Thank you. And maybe as a follow-up, clearly, a thawing or an increase in activity from an electrolyzer perspective in Europe, when you go into these competitive bids, what's the, I guess, couple reasons that you're winning, and who are you seeing from a perspective? Thank you.
Jose Luis Crespo: So the other day, somebody asked exactly the same question to one of our customers. And the way that the customer answered was when we look at other electrolyzer companies, there's no other electrolyzer manufacturer that actually has deployed their own technology and operates the technology the way that Plug Power Inc. does. That is incredibly valuable for companies that have not deployed electrolyzers before. Knowing that the OEM, the partner that they're working with, in this case, Plug Power Inc., has done it, is doing it, and is operating those plants. That is a competitive advantage that no other electrolyzer company can put on the table. On top of that, we have deployed at scale. We are, you know, we've been in this market for almost three decades. And that's also really valuable. And when we start and when we have started to show that we can turn around the company and our financials are beginning to improve, this makes a very strong partner for anybody that is looking to deploy an electrolyzer project anywhere in the world, really. Thank you.
Operator: Thank you. Next question is coming from Chris Tsung from Wolfe Research. Your line is now live.
Chris Tsung: Hey, guys. Good afternoon. Thank you for taking my question.
Andy Marsh: Hey, Chris.
Chris Tsung: Hey, Andy. I wanted to just clarify on Texas, like, about the DOE loan with activities paused, is that the other location where the electricity rights that was sold?
Andy Marsh: You know, Chris, I would love to answer the question, but I've been asked not to. As part of the LOI.
Chris Tsung: Okay. Alright. Understood. Alright. And then could you just as you continue to shore up your balance sheet, which is certainly better and better, just potentially look to divest or monetize your Georgia asset or maybe even your Tennessee Louisiana, like, liquefaction sites.
Andy Marsh: I don't expect to. Don't expect to. Going to keep we're going to keep offering them. Those facilities give us first cost competitive hydrogen. But, look, it lets people know, you know, we can deliver hydrogen ourselves and produce cost-effective hydrogen. So I think it's a healthy it gives us a healthy negotiating position. The fact we know how to build. Right? Okay. Go ahead, Chris.
Operator: Thank you. Next question today is coming from Ryan Finks from B. Riley Securities. Your line is now live.
Ryan Finks: Hey, guys. Thanks for taking my questions.
Andy Marsh: Hey, Ryan.
Ryan Finks: Andy, you're gonna be my last question ever. Is this CEO on an earnings call.
Andy Marsh: That's why I waited to hit star one because I wanted that honor, actually.
Ryan Finks: So that would be a good question, Ryan. Bill Peterson just supplied it to you. So I'm sure someone else is gonna hop back in the queue now, but I appreciate it. Alright. So for the electricity rights monetization, are there other opportunities to complete similar transactions based on the assets that you have today or will this likely be the only announcement of this kind?
Andy Marsh: The first question is, we do have other assets. And I noticed I didn't use plural. And I don't know if it'll be the last one, but we have been engaging in another asset.
Ryan Finks: Understood. Appreciate that. And then for 2025 guidance, not sure if I missed it, but are we still targeting $700 million in revenue for this year?
Jose Luis Crespo: Yes.
Ryan Finks: Excellent. Thanks, guys. I'll turn it back.
Andy Marsh: Okay. Sorry there. I was hoping you were the last. But, Bill, next question is coming from Bill Peterson from JPMorgan. Your line is now live.
Bill Peterson: Yes. Hi, Andy, Jose Luis, and Paul. And I thought I hit star one, like, forty-five minutes ago, but apparently, I didn't. So I'm happy to be your last question here. Actually, probably a few sort of clarifiers that are follow-ups to some of the prior questions. Maybe first on the quarter, you just had reiterated that $700 million is a target. Maybe within that, sort of the puts and takes amongst the various segments you have, and then on gross margin neutral, I think you're probably saying that's coming off the adjusted loss of $37 million not the GAAP loss of $120 million. So I guess, similarly, amongst your various segments, what are the puts and takes that gets you there? That's my first question. Then I'll save the last one for Andy on the second one.
Andy Marsh: K. You wanna go, Paul?
Paul B. Middleton: Yeah. And there's three elements, Bill. One is if you think about the math on the volume, that means that higher volume in Q4 than Q3. So volume, particularly in equipment sales, is incredibly lucrative for us. So that every incremental dollar of equipment sales means a lot. Number two is, you know, we've already been making a lot of traction on service. We're trying to be prudent and thoughtful about that progression. But we expect that to continue and that will actually provide meaningful margin enhancement in Q4 and onward just from that continued progression. It helps us in many different ways, but that's another step function change as we continue to enjoy that positive trend. And then the last, as I talked about earlier, is fuel. You know, we saw certainly progression in Q3. We expect to see a lot more progression in Q4 as we leverage new platform, and we really continue to drive improvements off of our efficiencies. So those are the biggest drivers that kind of drive the levers here for Q4.
Bill Peterson: Yeah. Terrific. And then again, somewhat similar to some earlier lines of questions, but you know, in the last year or so, you've been focusing primarily on materials handling sounds like data center is now maybe back to being an emergent application. So can you speak to when you may actually need to make investments to bring on new hydrogen capacity? Would you prefer to still pursue Texas or maybe expand your supply agreements with the third parties under, you know, the renegotiated terms? Guess I'm trying to get a sense, at this stage, would you need to pull the trigger around taxes at some point, or maybe there's your second set you're talking about? Or is there any other types of funding you could be considering if that, you know, the deal amount, which is off the table.
Andy Marsh: So, Bill, I when I take a look at our new agreement with the industrial gas company, when I look at opportunities Jose has been developing for folks who are looking to build plans, we're gonna be strategic and thoughtful about when we build next. I don't foresee a need in the immediate future. You know, we've spent a lot of time looking at this. And we sat down and we thought about it from a financial performance point of view, you know, it feels quite honestly, Bill, it feels really good. To hand off to Jose and Paul a balance sheet that works. You know, we've discussed a lot over the last year about Quantum Leap being improving the income statement. But look, Jose is gonna be and Paul are gonna have essentially zero debt. You know, and we between the $150 million we ended with or $160 million, the $350 million we raised, this activity, you know, we're gonna focus on let's get our debt down. And, you know, I look in and I wanna position them. So and we wanna position because we're doing this as a team. The position that next year, you know, when Jose goes to see customers, he can say to them, look how strong my balance sheet is. Look how strong my income statement is. And as I mentioned earlier in the call, people want to buy from us. And strong balance sheet will make it a lot easier. And for every electrolyzer dollar Jose sells, you know, it really contributes 30 to 40¢ to the bottom line every dollar. So I think the company is much healthier. And with Jose's leadership, I think the company will continue to expand. And, you know, I think growth is tied very, very tightly to this balance sheet. And now it's gonna be a much, much better balance sheet.
Bill Peterson: Appreciate that, Andy. I appreciate the dialogue in the past several years. Look forward to following the progress and look forward to hearing more about strategy in a few weeks. Or actually next week. Thanks.
Andy Marsh: Great. Good. Good. Good. And for us, Bill, because I need to remind folks. You can too, you can register for digitally for the listening to Plug Power Inc. symposium. Know, it's an exciting event. Have many cast what customers are gonna be here, Teal?
Teal Vivacqua Hoyos: Oh, we have lots of customers. We'll be showcasing our electrolyzers with customers like Arcadia. We have customers like Amazon and Uline. Presenting on customer panel. So we'll have lots of customers showcased throughout the different panels we're excited about.
Andy Marsh: Yeah. I am excited, and I know teams put a lot of effort in and we really wanna show folks all the great progress. Plug Power Inc. has made to date. Probably more important, where Jose is gonna take us in the future. So thank you, everybody.
Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.