Q4 2023 Plug Power Inc Earnings Call

March 1, 2024

Operator: Hello, and welcome to the Plug Power fourth quarter, 2023 and year end earnings call and webcast. If anyone should comply operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placing a question at anytime by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Merle [inaudible], Marketing and Communications Manager for Plug Power. Please go ahead Merle.

As a reminder, this conference is being recorded.

Merrell: Now my pleasure to turn the call over to Mel address the marketing and communications manager for plug power. Please go ahead merrell.

Meryl Fritz: Thank you. Welcome to the Plug Power Q4 year-end earnings call. This will include forward-looking statements. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations, and developments in other matters that are not historical facts.

Unknown: Thank you. Welcome to the Plug Power Q4 year-end earnings call. This will include forward looking statements. These forward looking statements include among others statements of expectations beliefs, future plans and strategies, anticipated results from operations and development and other matters that are not historical facts. 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 and section 21E of the Securities Exchange Act of 1934. We believe that it's important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward looking statements, and such statements should not be read or understood as a guarantee of future performance or results. Such statements are based upon the current expectations, estimates, forecasts and production, as long as the current beliefs and assumptions of management, and are subject to significant 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 the risks and uncertainties discussed under item 1A, risk factors in our annual report on Form 10-K for the fiscal year ending December 31, 2023. And other reports we file from time to time with the Securities and Exchange Commission. These forward looking statements.

Operator 2: 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 and Section 21E of the Securities Exchange Act of 1934. We believe that it's important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of future performance or results.

Meryl Fritz: 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 and Section 21E of the Securities Exchange Act of 1934. We believe that it's important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of future performance or results.

Merrell: Covered by the Safe Harbor provisions for forward looking statements contained in section 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of 1934, we believe that it's important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on.

Forward looking statements and such statements should not be read or understood as a guarantee of future performance or results such statements are based upon the current expectations estimates forecasts and production as long as the current beliefs and assumptions of management and are subject to significant risks and uncertainties that could cause actual results or performance to differ materially from.

Operator 2: Such statements are based upon the current expectations, estimates, forecasts, and projections, as well as the current beliefs and assumptions of management, and are subject to significant 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 the risks and uncertainties discussed under Item 1A, Risk Factors, in our annual report on Form 10-K for the fiscal year ending 31 December 2023, and other reports we file from time to time with the Securities and Exchange Commission. These forward-looking statements speak only of day in which statements are made, and 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'd like to turn the call over to Plug Power CEO, Andy Marsh. Thank you, Meryl.

Meryl Fritz: Such statements are based upon the current expectations, estimates, forecasts, and projections, as well as the current beliefs and assumptions of management, and are subject to significant 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 the risks and uncertainties discussed under Item 1A, Risk Factors, in our annual report on Form 10-K for the fiscal year ending 31 December 2023, and other reports we file from time to time with the Securities and Exchange Commission. These forward-looking statements speak only of day in which statements are made, and 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'd like to turn the call over to Plug Power CEO, Andy Marsh.

Merrell: Those discussed as a result of various factors, including but not limited to the risks and uncertainties discussed under item one a risk factors in our annual report on Form 10-K for the fiscal year ending December 31, 2023, and other reports we file from time to time with the Securities and Exchange Commission. These forward looking statements.

Unknown: These forward looking statements speak only of day in which statements are made and 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'd like to turn the call over to Plug Power's CEO, Andy Marsh. Thank you Merle and thank you everyone for joining today's call. When January 24th Poland, I provided an overview of plug Power's results. Treatments from the past year. The highlight was the launch of our Georgia plant, making us a leader in the Perm Electrolyze your space and the world's foremost producer of liquid green hydrogen. This achievement signifies a leap forward for the hydrogen industry, placing plug power at the Vanguard green hydrogen production and challenging the status quo. Our ambitions continues with the initiation of a joint venture with Olin at Saint Gabriel, Louisiana poised to further assert our leadership in the liquid hydrogen production world with its upcoming operation expected in the third quarter.

Merrell: Speak only of day in which statements are made and 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'd like to turn the call over to plug Power's CEO Andy Marsh.

Andy Marsh: Thank you, Meryl. Thank you, everyone, for joining today's call. On 24 January, Paul and I provided an overview of Plug Power's results and achievements from the past year. A highlight was the launch of our Georgia plant, making us a leader in the PEM Electrolyzer space and the world's foremost producer of liquid green hydrogen. This achievement signifies a leap forward for the hydrogen industry, placing Plug Power at the vanguard of green hydrogen production and challenging the status quo. Our ambitions continue with the initiation of a joint venture with Olin at St. Gabriel, Louisiana, poised to further assert our leadership in the liquid hydrogen production world with its upcoming operation expected in Q3. Additionally, the securing of a $1.6 billion term sheet from the Department of Energy is a testament to our commitment to enhancing our hydrogen production capabilities across the United States.

Andrew J. Marsh: Thank you Merle and thank you everyone for joining today's call.

Operator 2: Thank you, everyone, for joining today's call. On 24 January, Paul and I provided an overview of Plug Power's results and achievements from the past year. A highlight was the launch of our Georgia plant, making us a leader in the PEM Electrolyzer space and the world's foremost producer of liquid green hydrogen. This achievement signifies a leap forward for the hydrogen industry, placing Plug Power at the vanguard of green hydrogen production and challenging the status quo. Our ambitions continue with the initiation of a joint venture with Olin at St. Gabriel, Louisiana, poised to further assert our leadership in the liquid hydrogen production world with its upcoming operation expected in Q3. Additionally, the securing of a $1.6 billion term sheet from the Department of Energy is a testament to our commitment to enhancing our hydrogen production capabilities across the United States.

Andrew J. Marsh: When January 24th Poland, I provided an overview of plug Power's results.

Andrew J. Marsh: Thank you, Merle. And thank you, everyone for joining today's call. In January 24th, Paul and I provided an overview of Plug Power's results and achievements from the past year. The highlight was the launch of our Georgia plant, making us a leader in the Pem Electrolyzer space and the world's foremost producer of liquid green hydrogen. This achievement signifies a leap forward for the hydrogen industry, placing Plug Power at the Vanguard green hydrogen production and challenging the status quo. Our ambitions continues with the initiation of a joint venture with Olin at Saint Gabriel, Louisiana, poised to further assert our leadership in the liquid hydrogen production world, with its upcoming operation expected in the third quarter.

Andrew J. Marsh: Treatments from the past year.

Andrew J. Marsh: The highlight was the launch of our Georgia plant, making us a leader in the Perm Electrolyze your space and the world's foremost producer of liquid green hydrogen.

Andrew J. Marsh: This achievement signifies a leap forward for the hydrogen industry, placing plug power at the Vanguard green hydrogen production and challenging the status quo.

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

Andrew J. Marsh: Additionally, the securing of a $1.6 billion term sheets from the Department of Energy is a testament to our commitment to enhancing our hydrogen production capabilities across the United States. We expect conditional approval under the term sheet in the coming weeks. Financially in the past quarter, we made important strides in improving cash management and fostering growth that bolsters cash generation, effectively addressing our going concern. We had operational successes, such as expanding our material handling footprint, with giants like Walmart, Home Depot, and Amazon, and pioneering with a 1-megawatt electrolyzer system for on-site green hydrogen generation at an Amazon facility.

Operator 2: We expect conditional approval under the term sheet in the coming weeks. Financially, in the past quarter, we made important strides in improving cash management and fostering growth that bolsters cash generation, effectively addressing our ongoing concerns. We had operational successes such as expanding our material handling footprint with giants like Walmart, Home Depot, and Amazon, and pioneering with a 1-megawatt electrolyzer system for on-site green hydrogen generation at an Amazon facility. Our launch of innovative platforms and products, including a high-power stationary fuel cell system and a 100-megawatt electrolyzer project for Galp, underscores our relentless pursuit of innovation and leadership in the green energy sphere. These efforts reflect our strategic intent to augment our product suite and enlarge our market footprint, cementing our role in spearheading a more sustainable energy future. As we move into 2024, our focus sharpens on fortifying our financial foundation and sustaining continued expansion.

Andy Marsh: We expect conditional approval under the term sheet in the coming weeks. Financially, in the past quarter, we made important strides in improving cash management and fostering growth that bolsters cash generation, effectively addressing our ongoing concerns. We had operational successes such as expanding our material handling footprint with giants like Walmart, Home Depot, and Amazon, and pioneering with a 1-megawatt electrolyzer system for on-site green hydrogen generation at an Amazon facility. Our launch of innovative platforms and products, including a high-power stationary fuel cell system and a 100-megawatt electrolyzer project for Galp, underscores our relentless pursuit of innovation and leadership in the green energy sphere. These efforts reflect our strategic intent to augment our product suite and enlarge our market footprint, cementing our role in spearheading a more sustainable energy future. As we move into 2024, our focus sharpens on fortifying our financial foundation and sustaining continued expansion.

Andrew J. Marsh: Financially in the past quarter, we made important strides in improving cash management and fostering growth the boat bolsters cash generation effectively addressing our going concern.

We had operational successes such as expanding our material handling footprint with Giants like Walmart home depot, and Amazon and pioneering with a one megawatt electrolyze your system for on site Green hydrogen generation at Amazon facility.

Andrew J. Marsh: Our launch of innovative platforms and products, including a high power stationary fuel cell system and a 100-megawatt electrolyzer project for GAAP underscores our relentless pursuit of innovation and leadership in the green energy sphere. These efforts reflect our strategic intent to augment our product suite and enlarge our market footprint. So, many are rowing and spearheading a more sustainable energy future. As we move into 2024, our focus sharpen on fortifying our financial foundation and sustaining continued expansion. Our resolve to propel the hydrogen economy is matched by our strategic shift towards capitalizing on existing investment and a cautious approach to cash management, setting the stage for persistent growth and innovation. Cornerstone of this year's strategic direction, it's a significant restructuring aim and unlocking $75 million in savings demonstrate our commitment to operation excellence and fiscal discipline.

Andrew J. Marsh: Mega Board Electrolyze your project for GAAP.

Andrew J. Marsh: Underscores our relentless pursuit of innovation and leadership in the Green energy sphere.

Andrew J. Marsh: These efforts reflect our strategic intent to augment our product suite and larger market footprint. So many are rowen spearheading a more sustainable energy future.

Andrew J. Marsh: As we move into 2024, our focus sharpen sore and fortifying our financial foundation and sustaining continued expansion.

Operator 2: Our resolve to propel the hydrogen economy is matched by our strategic shift towards capitalizing on existing investment and a cautious approach to cash management, setting the stage for persistent growth and innovation. A cornerstone of this year's strategic direction is a significant restructuring aim and unlocking $75 million in savings, demonstrating our commitment to operational excellence and fiscal discipline. Additionally, we've reevaluated our pricing to ensure it mirrors the unparalleled true value of our innovative offering. Looking ahead, investors can expect to see a marked improvement in our financial health, highlighted by improved gross margins and reduced cash outflows, supported by a decrease in working capital. These initiatives are critical for navigating financial complexities and laying down the groundwork for continuous innovation and leadership in the renewable energy sector, promising a clear trajectory for value creation and sustainable growth in the dynamic hydrogen economy.

Andy Marsh: Our resolve to propel the hydrogen economy is matched by our strategic shift towards capitalizing on existing investment and a cautious approach to cash management, setting the stage for persistent growth and innovation. A cornerstone of this year's strategic direction is a significant restructuring aim and unlocking $75 million in savings, demonstrating our commitment to operational excellence and fiscal discipline. Additionally, we've reevaluated our pricing to ensure it mirrors the unparalleled true value of our innovative offering. Looking ahead, investors can expect to see a marked improvement in our financial health, highlighted by improved gross margins and reduced cash outflows, supported by a decrease in working capital. These initiatives are critical for navigating financial complexities and laying down the groundwork for continuous innovation and leadership in the renewable energy sector, promising a clear trajectory for value creation and sustainable growth in the dynamic hydrogen economy.

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

Andrew J. Marsh: Cornerstone of this year's strategic direction, it's a significant restructuring aim and unlocking $75 million in savings demonstrate our commitment to operation excellence and fiscal discipline.

Andrew J. Marsh: Additionally, we are reevaluating our pricing, to ensure it mirrors the unparalleled view - value of our innovative offering. Looking ahead, investors can expect to see a marked improvement in our financial health, highlighted by improved gross margins and reduce cash outflows supported by a decrease in working capital. These initiatives are critical for navigating financial complexity and laying down the groundwork for continuous innovation and leadership in the renewable energy sector, promising a clear trajectory for value creation and sustainable growth in the dynamic hydrogen economy. Now, let me turn the discussion over to Paul for financial insights.

Looking ahead investors can expect to see a marked improvement in their financial health highlighted by improved gross margins and reduce cash outflows supported by a decrease in working capital.

These initiatives are critical for navigating financial complexity and laying down the groundwork for continuous innovation and leadership in the renewable energy sector, promising a clear trajectory for value creation and sustainable growth in the dynamic hydrogen economy.

Operator 2: Now, let me turn the discussion over to Paul for financial insights. Good morning, everybody. As I shared back in January in the business update, 2023 was another substantial year for Plug Power, and there were many positives. Focusing specifically on the 10-K filing last night, there are a few highlights I would point out. Based on our actions in the last few months, we have addressed the ongoing concern issue. As we finalized the accounting for the fourth quarter, sales for the fourth quarter came in at $222 million, which was slightly higher than the guidance we had provided back in January. Regarding the material weakness issues identified in our 2022 filing, based on the efforts in 2023, we have resolved the issues that were outstanding, and this reflects a substantial improvement in our key operations and processes.

Andy Marsh: Now, let me turn the discussion over to Paul for financial insights.

Andrew J. Marsh: Now, let me turn the discussion over to Paul for financial insights.

Paul Middleton: Good morning, everybody. As I shared back in January in the business update, 2023 was another substantial year for Plug Power, and there were many positives. Focusing specifically on the 10-K filing last night, there are a few highlights I would point out. Based on our actions in the last few months, we have addressed the ongoing concern issue. As we finalized the accounting for the fourth quarter, sales for the fourth quarter came in at $222 million, which was slightly higher than the guidance we had provided back in January. Regarding the material weakness issues identified in our 2022 filing, based on the efforts in 2023, we have resolved the issues that were outstanding, and this reflects a substantial improvement in our key operations and processes.

Paul B. Middleton: Good morning, everybody. As I shared back in January in the business update, 2023 was another substantial year for Plug Power, and there were many positives. Focusing specifically on the 10-K filing last night, there are a few highlights I would point out. Based on our actions in the last few months, we have addressed the going concern issue. As we finalize the accounting for the fourth quarter, sales for the fourth quarter came in at $222 million, which was slightly higher than the guidance we had provided back in January. Regarding the material weakness issues identified in our 2022 filing, based on the efforts in 2023, we have resolved the issues that were outstanding, and this reflects a substantial improvement in our key operations and processes. We have two new, specific issues in '23 that relate to new business dynamics, but these are much more narrow issues and we feel confident we can resolve these in the coming months.

Paul: As I shared back in January and the business update 2023 was another substantial year for plug power and there were many positives.

Paul: Focusing specifically on the 10-K filing last night there are a few highlights I would point out.

Paul: Based on our actions in the last few months, we have addressed the going concern issue.

Paul: As we finalize the accounting for the fourth quarter sales for the fourth quarter came in at $222 million, which was slightly higher than the guidance. We had provided back in January.

Paul: Regarding the material weakness issues identified in our 2022 filing based on the efforts in 2023, we have resolved the issues that were outstanding and this reflects a substantial improvement in our key operations and processes. We have two new specific issues in 'twenty three that relate to new business dynamics, but these.

Operator 2: We have two new specific issues in 2023 that relate to new business dynamics, but these are much more narrow issues, and we feel confident we can resolve these in the coming months. There are many challenges in 2023 as well, and some of these certainly impacted our Q4 2023 results. The chaos in the hydrogen fuel market in 2023, with an unprecedented number of industry fuel facility shutdowns, culminated in the Q3 and has since abated, but defects continued into the Q4. Our own hydrogen plant scale-up effort has taken longer than planned, and given our continued application growth and the new demand from these application sales, it has made the industry shortage and the new facility delays more of a pressing issue.

Paul Middleton: We have two new specific issues in 2023 that relate to new business dynamics, but these are much more narrow issues, and we feel confident we can resolve these in the coming months. There are many challenges in 2023 as well, and some of these certainly impacted our Q4 2023 results. The chaos in the hydrogen fuel market in 2023, with an unprecedented number of industry fuel facility shutdowns, culminated in the Q3 and has since abated, but defects continued into the Q4. Our own hydrogen plant scale-up effort has taken longer than planned, and given our continued application growth and the new demand from these application sales, it has made the industry shortage and the new facility delays more of a pressing issue.

Paul: Are much more narrow issues and we feel confident we can resolve these in the coming months.

Paul B. Middleton: There are many challenges in 2023 as well. Some of these, certainly impacted our Q4 2023 results. Chaos in the hydrogen fuel market in '23 was an unprecedented number of industry fuel facility shutdowns, culminated in the third quarter and has since abated, but the effects continued into the fourth quarter. Our own hydrogen plant scale up effort has taken longer than plan and given our continued application growth and the new demand from these application sales, it has made the industry shortage in the new facility delays more pressing issues. Doing big new things, generally often is harder than you plan. And often, in our new product platforms like the 5-megawatt electrolyzer system, or high power stationary, have held true to this, which in turn, pushed some of the sales into 2024 and has delayed some of the cost out activities associated with the new platforms.

Paul: Some of these certainly impacted our Q4 2023 results.

Paul: Chaos in the hydrogen fuel market in 'twenty, three with an unprecedented number of industry fuel facility shutdowns culminated in the third quarter and has since abated, but the effects continued into the fourth quarter.

Paul: Our own hydrogen plant scale up effort has taken longer than plan and given our continued application growth and the new demand from these application sales. It has made the industry shortage in the new facility delays more pressing issues.

Operator 2: Doing big new things generally often is harder than you plan, and our new product platforms, like the 5-megawatt electrolyzer system or high-power stationary, have held true to this, which in turn pushed some of the sales into 2024 and has delayed some of the cost-down activities associated with these new platforms. Some of the IRA guidance on varied provisions in 2023 were favorable to Plug, but recent guidance on PTC and manufacturing credits were not as favorable as hoped. We are active in the Treasury comment process and continue to advocate for final rules that will be more appropriate for the industry. And lastly, as we said last time, the overall economy and political factors, like the interest rate hikes, have not exactly made it easier to find debt capital efficiently.

Paul Middleton: Doing big new things generally often is harder than you plan, and our new product platforms, like the 5-megawatt electrolyzer system or high-power stationary, have held true to this, which in turn pushed some of the sales into 2024 and has delayed some of the cost-down activities associated with these new platforms. Some of the IRA guidance on varied provisions in 2023 were favorable to Plug, but recent guidance on PTC and manufacturing credits were not as favorable as hoped. We are active in the Treasury comment process and continue to advocate for final rules that will be more appropriate for the industry. And lastly, as we said last time, the overall economy and political factors, like the interest rate hikes, have not exactly made it easier to find debt capital efficiently.

Paul: Doing big New things generally often is harder than you plan and often in our new product platforms like the five megawatt electrolyze a system or high power stationary have held true to this which in turn pushed some of the sales into 2024 and has delayed some of the cost out activities associated with these new platforms.

Paul B. Middleton: Some of the IRA guidance on various provisions in 2023 were favorable to Plug, but recent guidance on PTC and manufacturing credits were not as favorable as hoped. We were active in the treasury comment process and continue to advocate for final rules, that'll be more appropriate for the industry. And lastly, as we said last time, the overall economy and political factors, like the interest rate hikes have not exactly made it easier to find dead capital efficiently. Given these factors, as we discussed in our January business update call, we have decided to make certain decisions posture for better cash position in lieu just revenue. As an example, instead of our normal PPA sale leasebacks, for which we get revenue, but must restrict a lot of the cash, we held many of those programs in Q4 that were underway in lieu of completing the standard sale leaseback transaction, and commenced a program under the new IRA Transferability rules, which we believe will allow us to sell the ITC benefits in 2024.

And political factors like the interest rate hikes have not exactly made it easier to find that capital efficiently.

Operator 2: Given these factors, as we discussed in the January business update call, we've decided to make certain decisions to posture for a better cash position in lieu of just revenue. As an example, instead of our normal PPA sale leasebacks for which we get revenue but must restrict a lot of the cash, we held many of those programs in Q4 that were underway in lieu of completing the standard sale leaseback transaction and commenced a program under the new IRA transferability rules, which we believe will allow us to sell the ITC benefits in 2024. We've also slowed new pilot programs for new platforms, given they generally consume more cash in the initial phases. These were business decisions that will guide our near-term focus as well.

Paul Middleton: Given these factors, as we discussed in the January business update call, we've decided to make certain decisions to posture for a better cash position in lieu of just revenue. As an example, instead of our normal PPA sale leasebacks for which we get revenue but must restrict a lot of the cash, we held many of those programs in Q4 that were underway in lieu of completing the standard sale leaseback transaction and commenced a program under the new IRA transferability rules, which we believe will allow us to sell the ITC benefits in 2024. We've also slowed new pilot programs for new platforms, given they generally consume more cash in the initial phases. These were business decisions that will guide our near-term focus as well.

Paul: Given these factors as we discussed in our January business update call, we have decided to make certain decisions posture for better cash position and Luke just revenue.

Paul: As an example, instead of our normal PPA sale leasebacks for which we get revenue, but must restrict a lot of the cash we held many of those programs in Q4 that were underway in lieu of completing the standard sale leaseback transaction and commenced a program under the new IRA Transferability rules, which we believe will allow us to sell the ITC.

Paul: Benefits in 2024 <unk>.

Paul B. Middleton: We've also slowed new pilot programs for new platforms, given the generally consume more cash and initial phases. These were business decisions that will guide our near term focus as well. During the fourth quarter, we had one of our significant traditional PPA customers move to a direct sales approach, and they purchased seven sites. However, given the fuel issues previously mentioned, they pushed the deployment into '24. Also as I mentioned, we purposely held off on traditional PPA sales leaseback transactions in the fourth quarter for other customers, which resulted in lower sales than historically. And on our 1 and 5-megawatt electrolyzer platforms, these are new designs, new offerings that have taken time to scale. Many new programs were shipped in Q4, but just did not get the final commissioning, hence the respective sales were pushed into '24. As of net impact, from overall lower sales than originally anticipated, this resulted in lower volumes and in turn lower fixed cost absorption. This coupled with continued new product investments and certain inventory valuation charges, as we continue to shape the business model and market approach, overall, resulted in lower gross margins than originally anticipated for the fourth quarter.

Paul: Or business decisions that will guide our near term focus as well.

Operator 2: During the fourth quarter, we had one of our significant traditional PPA customers move to a direct sales approach, and they purchased 7 sites. However, given the fuel issues previously mentioned, they pushed the deployment into 2024. Also, as I mentioned, we purposely held off on traditional PPA sales leaseback transactions in the fourth quarter for other customers, which resulted in lower sales than historically. And on our 1- and 5-MW electrolyzer platforms, these are new designs and new offerings that have taken time to scale. Many new programs were shipped in Q4 but just did not get to final commissioning, hence the respective sales were pushed into 2024. As a net impact from overall lower sales than originally anticipated, this resulted in lower volumes and, in turn, lower fixed cost absorption.

Paul Middleton: During the fourth quarter, we had one of our significant traditional PPA customers move to a direct sales approach, and they purchased 7 sites. However, given the fuel issues previously mentioned, they pushed the deployment into 2024. Also, as I mentioned, we purposely held off on traditional PPA sales leaseback transactions in the fourth quarter for other customers, which resulted in lower sales than historically. And on our 1- and 5-MW electrolyzer platforms, these are new designs and new offerings that have taken time to scale. Many new programs were shipped in Q4 but just did not get to final commissioning, hence the respective sales were pushed into 2024. As a net impact from overall lower sales than originally anticipated, this resulted in lower volumes and, in turn, lower fixed cost absorption.

Paul: During the fourth quarter, we had one of our significant traditional PPA customers move to a direct sales approach and they purchased seven sites. However, given the fuel issues previously mentioned they push the deployment into 'twenty four.

Paul: Also as I mentioned, we purposely held off on traditional PPA sales leaseback transactions in the fourth quarter for other customers, which resulted in lower sales and historically and.

Paul: And on our five 1% and five megawatt Electrolyzed platforms. These are new designs new offerings that have taken time to scale. Many new programs were shipped in Q4, but just did not get the final commissioning, hence the respective sales were pushed into 'twenty for us.

Paul: The net impact from overall lower sales than originally anticipated. This resulted in lower volumes and in turn lower fixed cost absorption.

Operator 2: This coupled with continued new product investments and certain inventory valuation charges, as we continue to shape the business model and market approach, overall resulted in lower gross margins than originally anticipated for the fourth quarter. The inventory provisions were non-cash charges, and we remained focused on how to monetize and maximize the leverage of these assets. Given the dynamics, it was prudent to record these valuation adjustments. The last comment I would make is that, given the softening of the capital markets and our stock price, it led us to do a more in-depth evaluation of goodwill we had on our balance sheet. As a result, we recorded a non-cash impairment charge for the goodwill of $250 million. Turning our focus to 2024, we know we must significantly improve margin and cash flow, and we see this as an opportunity to reset.

Paul Middleton: This coupled with continued new product investments and certain inventory valuation charges, as we continue to shape the business model and market approach, overall resulted in lower gross margins than originally anticipated for the fourth quarter. The inventory provisions were non-cash charges, and we remained focused on how to monetize and maximize the leverage of these assets. Given the dynamics, it was prudent to record these valuation adjustments. The last comment I would make is that, given the softening of the capital markets and our stock price, it led us to do a more in-depth evaluation of goodwill we had on our balance sheet. As a result, we recorded a non-cash impairment charge for the goodwill of $250 million. Turning our focus to 2024, we know we must significantly improve margin and cash flow, and we see this as an opportunity to reset.

Paul: This coupled with continued new product investments and certain inventory valuation charges as we continue to shape the business model and market approach overall resulted in lower gross margins than originally anticipated for the fourth quarter.

Paul B. Middleton: The inventory provision for non-cash charges and we remained focused on how to monetize and maximize the leverage of these assets, but given the dynamics, it was prudent to report these valuation adjustments. And the last commend I would make is that given the softening of the capital markets and our stock price, it led us to do a more in depth evaluation of goodwill we had on our balance sheet. As a result, we reported a non-cash impairment charge for the goodwill of $250 million. Turning our focus to '24, we know we must significantly improve margin and cash flow. And we see this as an opportunity to reset. We are pursuing significant price increases across all offerings. Equipment, service and fuel. We've implemented a reduction in workforce and a hiring freeze, which will lower payroll costs. We're consolidating facilities and streamlining processes. We are reducing spend on non-personnel cost.

Paul: As a result, we reported a noncash impairment charge for the goodwill of $250 million.

Paul: Turning our focus to 24, we know we must significantly improve margin and cash flow and we see this as an opportunity to reset.

Operator 2: We are pursuing significant price increases across all offerings: equipment, service, and fuel. We've implemented a reduction in workforce and a hiring freeze, which will lower payroll costs. We are consolidating facilities and streamlining processes. We are reducing spend on non-personnel costs. We've invested significantly in inventory in 2023 to support the ongoing growth, and this means we have much of the material we need for 2024 on hand. And so our focus now is to optimize and significantly reduce the inventory investment. We are making certain focused commercial decisions, such as pushing traditional PPA customers to the direct sales models versus our past practice, where we subscribe to solutions. We're managing the timing of deployments in certain new platforms with enhanced focus on cash and profitability. We'll continue the nurturing effort on these platforms but focus on escalating the cost curves before we ramp sales efforts.

Paul Middleton: We are pursuing significant price increases across all offerings: equipment, service, and fuel. We've implemented a reduction in workforce and a hiring freeze, which will lower payroll costs. We are consolidating facilities and streamlining processes. We are reducing spend on non-personnel costs. We've invested significantly in inventory in 2023 to support the ongoing growth, and this means we have much of the material we need for 2024 on hand. And so our focus now is to optimize and significantly reduce the inventory investment. We are making certain focused commercial decisions, such as pushing traditional PPA customers to the direct sales models versus our past practice, where we subscribe to solutions. We're managing the timing of deployments in certain new platforms with enhanced focus on cash and profitability. We'll continue the nurturing effort on these platforms but focus on escalating the cost curves before we ramp sales efforts.

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

Paul: We are reducing spend on non personnel cost.

Paul B. Middleton: We've invested significantly in inventory in 2023 to support the ongoing growth. And this means we have much of the material we need for '24 on hand. So, our focus now is to optimize and significantly reduce the inventory investment. We're making certain focused commercial decisions, such as pushing traditional PPA customers to direct sales models versus our past practice, where we subscribed a solution. We're managing the timing of deployments in certain new platforms with enhanced focus on cash and profitability. We will continue nurturing effort on these platforms, but focused on escalated in the cost curve, before we ramp sales efforts. Now that we've commissioned the new hydrogen facilities in Georgia and Tennessee, we will use these plants to drive margin improvement in fuel cost. Cost of these facilities is expected to be one third of the market cost, without any ITC or PTC benefits.

Paul: We're making certain focused commercial decisions such as pushing traditional PPA customers to direct sales models versus our past practice, where we subscribed a solution.

Paul: We're managing the timing of deployments in certain new platforms with enhanced focus on cash and profitability.

Paul: We will continue nurturing effort on these platforms, but focus on escalated in the cost curve before we ramp sales efforts.

Operator 2: Now that we've commissioned the new hydrogen facilities in Georgia and Tennessee, we will use these plants to drive margin improvement and fuel costs. Cost at these facilities is expected to be 1/3 of the market cost without any ITC or PTC benefits. We've slowed investment in the follow-on hydrogen facilities in Texas and New York until we find the right financing solution. In 2024, we are targeting to reduce the cash burn by over 70% from 2023 with lower CapEx, a reduction in investment working capital, and improved margins. We're also targeting to leverage these improvements to achieve a positive cash flow rate in the next 12 months. Raising prices, slowing new product scaling, and pushing traditional PPA market customers to direct sales models collectively will mean a lower revenue growth rate in the near term compared to our prior history.

Paul Middleton: Now that we've commissioned the new hydrogen facilities in Georgia and Tennessee, we will use these plants to drive margin improvement and fuel costs. Cost at these facilities is expected to be 1/3 of the market cost without any ITC or PTC benefits. We've slowed investment in the follow-on hydrogen facilities in Texas and New York until we find the right financing solution. In 2024, we are targeting to reduce the cash burn by over 70% from 2023 with lower CapEx, a reduction in investment working capital, and improved margins. We're also targeting to leverage these improvements to achieve a positive cash flow rate in the next 12 months. Raising prices, slowing new product scaling, and pushing traditional PPA market customers to direct sales models collectively will mean a lower revenue growth rate in the near term compared to our prior history.

Paul: Now that we've commissioned the new hydrogen facilities in Georgia, and Tennessee, We will use these plants to drive margin improvement in fuel cost.

Paul: Cost of these facilities is expected to be one third of the market cost without any ITC or PTC benefits.

Paul B. Middleton: And we've slowed investment in the follow on hydrogen facilities in Texas and New York until we find the right financing solution. In 2024, we are targeting to reduced cash burn by over 70% from 2023 with lower Capex, a reduction in investment working capital and improved margins. We're also targeting to leverage these improvements to achieve a positive cash flow rate in the next 12 months. Raising prices, slowing new products scaling, and pushing traditional PPA market customers to direct sales models, collectively will mean a lower revenue growth rate in the near term compared to our prior history, but we think this paradigm shift is critical and necessary, given the market conditions. And equally important, it will substantially improve the foundation for which Plug will be able to grow more rapidly and profitably in the years to come.

In 2024, we are targeting to reduce the cash burn by over 70% from 2023 with lower Capex.

Paul: The reduction in investment working capital and improved margins.

Paul: We're also targeting the leverage these improvements to achieve a positive positive cash flow right in the next 12 months.

Paul: Raising prices slowing new products scaling and pushing traditional PPA market customers to direct sales models collectively will mean, a lower revenue growth rate in the near term compared to our prior history, but we think this paradigm shift is critical and necessary given the market conditions and equally important it will substantially improve the foundation for which plug.

Operator 2: But we think this paradigm shift is critical and necessary given the market conditions. And equally important, it will substantially improve the foundation for which Plug will be able to grow more rapidly and profitably in the years to come. We feel confident about these strategic decisions to adjust our near-term focus and to improve cash burn, and we are seeing benefits even in Q1. In addition, we filed an ATM facility, which can be used to address the accounting exercise for the ongoing concern analysis, given the liquidity available to us under the principal transaction aspect of the facility. Our near-term capital strategy is very focused: drive significant improvement in the cash burn by reducing CapEx, reducing inventory investment, improving margins, and tempering new platform spending. Work with the DOE to secure the DOE $1.6 billion project financing facility while developing complementary follow-on project financing solutions.

Paul Middleton: But we think this paradigm shift is critical and necessary given the market conditions. And equally important, it will substantially improve the foundation for which Plug will be able to grow more rapidly and profitably in the years to come. We feel confident about these strategic decisions to adjust our near-term focus and to improve cash burn, and we are seeing benefits even in Q1. In addition, we filed an ATM facility, which can be used to address the accounting exercise for the ongoing concern analysis, given the liquidity available to us under the principal transaction aspect of the facility. Our near-term capital strategy is very focused: drive significant improvement in the cash burn by reducing CapEx, reducing inventory investment, improving margins, and tempering new platform spending. Work with the DOE to secure the DOE $1.6 billion project financing facility while developing complementary follow-on project financing solutions.

Paul: We will be able to grow more rapidly and profitably in the years to come.

Paul B. Middleton: We feel confident about these strategic decisions to adjust our near term focus and to improve cash burn and we are seeing benefits even in the first quarter. In addition, we filed an ATM facility, which can be used to address the accounting exercise for the going concern analysis, given the liquidity available to us under the principal transaction aspects of the facility. Our near term capital strategy is very focused, drive significant improvement in the cash burn by reducing Capex, reducing inventory investment, improving margins and temporary new platform spending. Work with the DOE to secure the DOE $1.6 billion project financing facility, while developing complementary follow on project financing solutions. Leverage the ATM facility is needed, as we continue to develop the very debt solutions we are evaluating.

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

Paul: Our near term capital strategy is very focused drive significant improvement in the cash burn by reducing capex, reducing inventory investment improving margins and temporary new platform spending.

Paul: Work with the Doe to secure the $1 $6 billion project financing facility, while developing complementary follow on project financing solutions.

Operator 2: Leverage the ATM facility as needed as we continue to develop the varied debt solutions we are evaluating and continuing to develop varied debt opportunities. The company has received and continues to receive many debt offers, but they have not been for terms that are interesting to the company. Part of this was driven from the ongoing interest rate hikes. The ATM program, coupled with the reduced cash burn efforts, puts us in a position to be more selective as we continue to develop these solutions. I'll now turn it back to Andy. Well, thank you, everyone. And we're ready to take questions. Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

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

Paul: Leverage the ATM facility as needed as we continue to develop the very debt solutions, we are evaluating and.

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

M program, coupled with the reduced cash burn efforts puts us in a position to be more selective as we continue to developing new solutions I'll now turn it back to Andy.

Andy Marsh: Well, thank you, everyone. And we're ready to take questions.

Andrew J. Marsh: Well, thank you, everyone. And now we're ready to take questions.

Operator: Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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 one. One moment, please, while we pull for questions. Our first question today is coming from James West from Evercore ISI. Your line is now live.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two 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 one. One moment, please, while we poll for questions. Our first question today is coming from James West from Evercore ISI. Your line is now live.

Speaker Change: Confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.

Operator 2: You may press star two 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 one. One moment, please, while we pull for questions. Our first question today is coming from James West from Evercore ISI. Your line is now live. Hey, good morning, Andy, Paul. Good morning, James. I got Sanjay here also. Oh, hey, Sanjay. Sorry. Good morning to you as well. The first question, Paul, you alluded to a lot of this in your prepared comments, but the bridge kind of debt financing, we're at a point where cash has come down, and there's a lot of concerns, of course, by the market. And I recognize the ATM should relieve a lot of that concern. But I guess there's two parts to this.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one one moment. Please while we poll for questions. Our first question today is coming from James West from Evercore ISI. Your line is now live.

James West: Hey, good morning, Andy, Paul.

James West: Hey, good morning, Andy and Paul. Morning, James I got Sanjay here also. Tastes object Saar. Good morning to you as well. Right.

James West: Hey, good morning, Andy and Paul.

Andy Marsh: Good morning, James. I got Sanjay here also.

James Carlyle West: Morning, James I got Sanjay here also.

Andrew J. Marsh: Morning, James. I got Sanjay here also. Tastes object Saar. Good morning to you as well. Right.

Andrew J. Marsh: Morning, James. I got Sanjay here also.

James West: Oh, hey, Sanjay. Sorry. Good morning to you as well. The first question, Paul, you alluded to a lot of this in your prepared comments, but the bridge kind of debt financing, we're at a point where cash has come down, and there's a lot of concerns, of course, by the market. And I recognize the ATM should relieve a lot of that concern. But I guess there's two parts to this.

Sanjay: Tastes object Saar.

James West: Oh, hey Sanjay, sorry. Good morning to you as well. First question, and then Paul, you alluded to a lot of this in your prepared comments, but the bridge kind of debt financing, we're at a point where cash has come down and there's a lot of concerns, of course, by the market. I recognize the ATM should relieve a lot of that concern. But does - I guess, there's two parts to this - one, when should we think about your ability, or your plans, to announce some bridge type financing here? And then two, does the ATM work - does that - accountingwise, does that help secure the DOE alone?

Sanjay: Good morning to you as well.

Sanjay: Right.

Sanjay: First question and then Paul you you alluded to a lot of this in your prepared comments, but the bridge.

Sanjay: Bridged kind of debt financing.

Sanjay: Yeah. We're we're at a point, where cash has come down and there's a lot of concerns of course by the market I recognize the ATM.

Sanjay: Should relieve a lot of that concern.

Speaker Change: But does I guess, there's two parts to this one when should we when should we think about.

Operator 2: 1, when should we think about your ability or your plans to announce some bridge type of financing here? And then 2, does the ATM work? Accounting-wise, does that help secure the DOE loan? There's a lot going back. Sorry. That's okay. So I guess just answering the second question first. Obviously, us solving the ongoing concern helps not only the DOE loan but helps other debt solutions as well. It helps in many, many ways. And so that is certainly significantly helpful. And the capacity of that facility, not to say we will use it all, but it's something that we can use ongoing as we move through the year to continue to address future liquidity solutions while we chase and develop things like the DOE loan and other things. First and foremost, our focus the last quarter was solving the ongoing concern, which we have done.

James West: 1, when should we think about your ability or your plans to announce some bridge type of financing here? And then 2, does the ATM work? Accounting-wise, does that help secure the DOE loan? There's a lot going back. Sorry.

Speaker Change: Your ability or your plans to announce some some bridge type financing here and then two does the ATM.

Speaker Change: Work does that count.

Speaker Change: Accounting wise is that helps.

Speaker Change: Help secure the D O E.

Speaker Change: Don.

Speaker Change: Yes.

Paul Middleton: That's okay. So I guess just answering the second question first. Obviously, us solving the ongoing concern helps not only the DOE loan but helps other debt solutions as well. It helps in many, many ways. And so that is certainly significantly helpful. And the capacity of that facility, not to say we will use it all, but it's something that we can use ongoing as we move through the year to continue to address future liquidity solutions while we chase and develop things like the DOE loan and other things. First and foremost, our focus the last quarter was solving the ongoing concern, which we have done.

Multiple: [inaudible] - Sorry. So that's okay.

Multiple: [inaudible] - Sorry.

Paul B. Middleton: - That's okay. - So, I guess just answering the second question first. Obviously, us solving the going concern helps not only the DOE alone, but helps other debt solutions as well. It helps in many, many ways and so, that is certainly significantly helpful. And the capacity of that facility - not to say, we will use it all - but it's something that we can use ongoing, as we move through the year to continue to address our future liquidity solutions, while we chase and develop things like the DOE alone and another other things. First and foremost, our focus the last quarter was solving the going concern, which we have done. That helps tremendously with customers, vendors, other debt providers. We're still nurturing a number of different parties, we still - even as of last week, we get term sheets, and we're nurturing solutions and so.

Speaker Change: So I guess just answered the second question first.

Speaker Change: Obviously are solving the going concern helps not only the doe loan but helps.

Speaker Change: Other debt solutions as well it helps in many many ways and so.

Speaker Change: Uh huh.

Speaker Change: That is certainly significantly helpful and and the capacity of that facility not to say, we will use at all.

Speaker Change: But it's something that we can use ongoing as we move through the year to continue to address our future liquidity solutions, while we chase and develop things like the OEM on another other things.

Speaker Change: We <unk>.

Speaker Change: First and foremost our focus the last quarter was solving the going concern, which we have done.

Operator 2: That helps tremendously with customers, vendors, other debt providers. We are still nurturing a number of different parties. Even as of last week, we get term sheets, and we're nurturing solutions. And so I would also say we absolutely, as I mentioned, expect a significant reduction in the burn this year. We're sitting in a good position as we start the year. We're already seeing benefits of that in Q1. CapEx will come down tremendously. Inventory is a substantial asset that we can leverage and help reduce the burn in our working capital. And all of those things, success begets success. And so we'll continue to I think we'll have a number of new solutions we'll keep working through the second quarter, and we'll keep you posted as those things unfold.

Paul Middleton: That helps tremendously with customers, vendors, other debt providers. We are still nurturing a number of different parties. Even as of last week, we get term sheets, and we're nurturing solutions. And so I would also say we absolutely, as I mentioned, expect a significant reduction in the burn this year. We're sitting in a good position as we start the year. We're already seeing benefits of that in Q1. CapEx will come down tremendously. Inventory is a substantial asset that we can leverage and help reduce the burn in our working capital. And all of those things, success begets success. And so we'll continue to I think we'll have a number of new solutions we'll keep working through the second quarter, and we'll keep you posted as those things unfold.

Speaker Change: That helps tremendously with customers vendors other debt providers.

Speaker Change: We're still nurturing a number of different parties, we still even though as of last week, we get term sheets, and we're nurturing solutions and so.

Paul B. Middleton: I would also say, we absolutely, as I mentioned, expect a significant reduction in the burn this year. We're sitting in a good position as we start the year, we're already seeing benefits of that in the first quarter. Capex will come down tremendously, inventory is a substantial asset that we can leverage and help reduce the burn in our working capital. And all of those things - you know, success begets success and so, we'll continue to - I think we will have a number of new solutions, we'll keep working through and through the second quarter and we will keep you posted as those things unfold. But, you will absolutely see a reduction in the burn, which sets the stage for us to continue finding better and better solutions as we move forward.

Speaker Change: We absolutely as I mentioned expect a significant reduction in the burn this year.

Speaker Change: We're sitting in a good position as we start the year, we're already seeing benefits of that in the first quarter.

Speaker Change: Capex will come down tremendously inventory is a substantial.

Speaker Change: Asset that we can leverage and help.

Speaker Change: <unk>, the burn and our working capital.

Speaker Change: And all of those things success begets success and so.

Speaker Change: We'll continue to I think we will have a number of new solutions will keep working through and through the second quarter and.

Speaker Change: We will keep you posted as those things unfold, but.

Operator 2: But you will absolutely see a reduction in the burn, which sets the stage for us to continue finding better and better solutions as we move forward. Okay. Okay. Got it. And then maybe, Andy or Sanjay, as you address the new pricing with your customers and I know I asked you this on your last call, and it was kind of early days there, and the discussions are never easy, of course, but how have they gone at this point? As the pricing increases, have they been successful? Are you seeing the benefits of that? I guess how is that all playing out in the market? So James, as you mentioned, quoting me from the January call, it's never an easy discussion. But when we look at our customer base, we're through about half those discussions, and we've made good progress.

Paul Middleton: But you will absolutely see a reduction in the burn, which sets the stage for us to continue finding better and better solutions as we move forward.

Speaker Change: You will absolutely see a reduction in the burn which sets the stage for us to continue finding better and better solutions as we move forward.

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

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

Speaker Change: Whereas you.

Speaker Change: To address the new pricing with your customers and I know I asked this on your last call. It was kind of early days, there, but and there's discussions are never easy of course, but how old they are gone.

At this point to have the pricing increases had they been successful are you seeing the benefits of that.

Speaker Change: I guess, how is that all playing out in the market.

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

Andrew J. Marsh: So, James, core issue, mentioned quoting me from the January call. It's never an easy discussion. But when we look at our customer base, we're through about half those discussions. We've made good progress. I think you'll see the main benefits starting to flow through our financials in the second quarter. I want to point to two press releases from last week, where we announced new deals. Both of those deals we were able to achieve our newer, higher price structure. Actually, after the initial negotiations with those customers. So, it's never a panacea. I would also say that.

James Carlyle West: As you mentioned quoting me from the January call.

James Carlyle West: It's never an easy discussion.

James Carlyle West: But when we look at our customer base.

Speaker Change: We're through about half those discussions.

Speaker Change: Okay. We've.

Speaker Change: We've made good progress I think you'll see the main benefits starting to flow through our financials in the second quarter.

Operator 2: I think you'll see the main benefits starting to flow through our financials in Q2. I want to point to 2 press releases from last week where we announced new deals. Both of those deals, we were able to achieve our newer, higher price structure, actually, after the initial negotiations with those customers. So it's never a panacea. I would also say that we have seen some support on the supply side. Our partners in the industrial gas market, like Linde, have been helpful in helping us resolve some of these challenges. So I think you're seeing support on the pricing side but also some support on the supply side. I had one of our largest suppliers tell me the success in the future of the hydrogen market really is dependent upon what Plug has done.

Andy Marsh: I think you'll see the main benefits starting to flow through our financials in Q2. I want to point to 2 press releases from last week where we announced new deals. Both of those deals, we were able to achieve our newer, higher price structure, actually, after the initial negotiations with those customers. So it's never a panacea. I would also say that we have seen some support on the supply side. Our partners in the industrial gas market, like Linde, have been helpful in helping us resolve some of these challenges. So I think you're seeing support on the pricing side but also some support on the supply side. I had one of our largest suppliers tell me the success in the future of the hydrogen market really is dependent upon what Plug has done.

Speaker Change: I want to point to two press releases from last week.

Speaker Change: Where we announced new deals both of those deals we were able to achieve our newer higher price structure.

Speaker Change: Actually after the initial negotiations with those customers so.

Speaker Change: It's never a panacea I would also say that.

Andrew J. Marsh: I would also say that we have seen some support on the supply side. Our partners in the industrial gas market, like Lindy, have been helpful in helping us resolve some of these challenges. So, I think you're seeing support on the pricing side, but also some support on the supply side. I had one of our largest suppliers tell me the success in the future of the hydrogen market really is dependent upon what Plug has done. And so, there are folks who are looking to find ways to help us. I think in the second quarter, it'll become apparent.

Speaker Change: We have seen some support on the supply side.

Speaker Change: Ara.

Speaker Change: Partners in the industrial gas market like Lindy.

Speaker Change: Had been.

Speaker Change: Have been helpful in helping us resolve some of these challenges so I think youre seeing.

Speaker Change: Support on the pricing side, but also some support on.

The supply side.

Speaker Change: I had.

Speaker Change: One of.

Speaker Change: Our largest suppliers tell me the success in the future of the hydrogen market really is dependent upon what plug has done and so.

Operator 2: So there are folks who are looking to find ways to help us. I think in Q2, it'll become apparent. Well, maybe following up on that, Andy, the comment period for the guidance on 45V is ending here. Curious what you're hearing from the US government and representatives that you're obviously close to, particularly in New York State and in West Virginia, on how the IRS guidance may change. So James, yeah, the guidance has been, there were over 29,000 to 30,000 comments to the guidance. If I was going to take a step back and point to one comment that came actually from all seven hydrogen hubs, the hubs are very important to the DOE and the Biden administration.

Andy Marsh: So there are folks who are looking to find ways to help us. I think in Q2, it'll become apparent.

Speaker Change: There are folks who are looking to find ways to help us.

Speaker Change: I think in the second quarter it'll become apparent.

James West: Well, maybe following up on that, Andy, the comment period for the guidance on 45V is ending here. Curious what you're hearing from the US government and representatives that you're obviously close to, particularly in New York State and in West Virginia, on how the IRS guidance may change.

James West: Well, maybe following up on that Andy. The comment period for the. Our guidance on 45. He is in here. Curious what you're hearing from the. The U S government and representatives. Obviously close to particularly. In New York State in West, Virginia on how that the our guidance may change. So.

James West: Well, maybe following up on that, Andy. The comment period for the guidance on 45D is in here. Curious what you're hearing from the U.S. government and representatives. But you're obviously close to, particularly in New York State, in West Virginia, on how the IRS guidance may change.

Andy: The comment period for the.

Andy: Our guidance on 45.

Andy: He is in here.

Andy: Curious what you're hearing from the.

Andy: The U S government and representatives.

Andy: Obviously close to particularly.

Andy: In New York State in West, Virginia on how that the our guidance may change.

Andy Marsh: So James, yeah, the guidance has been, there were over 29,000 to 30,000 comments to the guidance. If I was going to take a step back and point to one comment that came actually from all seven hydrogen hubs, the hubs are very important to the DOE and the Biden administration.

Andy: So.

Andrew J. Marsh: So, James, the guidance has been - there were over 29 - 30.000, comments to the guidance. If I was going to take a step back and point to one comment that came actually from all seven hygiene hubs. The hubs are very important to the DOE in the Biden administration. And it is remarkable that all of those hubs stood together and said that the guidance as given will be very, very - will really slow the growth, if they are continue in places they are. I've spent time on the hill with Union leaders, with on Union, where they were 500.000 members of the Union, folks from the - CEOs from the nuclear power industry. And I think when we look at it, we would expect that nuclear and hydro, there will be - reduce restrictions on those two. I think you'll probably see that Grandfathering, which would kill many financing options, probably it will be lifted. I think something will happen on time matching.

Andy: James.

James Carlyle West: Yeah the guidance.

James Carlyle West: Has been.

James Carlyle West: Yes, there were over 29, 30000, 30000 comments to the guide and some of them.

Speaker Change: Uh huh.

Speaker Change: If I was going to take a step back.

Speaker Change: And point to one comment that came actually from all seven hygiene hubs.

Speaker Change: The hubs are very important to the D O.

Speaker Change: Ministration.

Operator 2: It is remarkable that all those hubs stood together and said that the guidance is given will really slow the growth if they continue in place as they are. I've spent time on the Hill with union leaders, with one union where there were 500,000 members of the union, CEOs from the nuclear power industry. I think when we look at it, we would expect that nuclear and hydro, there will be reduced restrictions on those two. I think you'll probably see that grandfathering, which would kill many financing options, probably will be lifted. I think something will happen on time matching. I think a lot of folks there, the wind and solar industry has been very aggressive. Folks on the Hills will point me to, one, that many of these initial announcements from Treasuries have been very strict, and they have loosened up.

Andy Marsh: It is remarkable that all those hubs stood together and said that the guidance is given will really slow the growth if they continue in place as they are. I've spent time on the Hill with union leaders, with one union where there were 500,000 members of the union, CEOs from the nuclear power industry. I think when we look at it, we would expect that nuclear and hydro, there will be reduced restrictions on those two. I think you'll probably see that grandfathering, which would kill many financing options, probably will be lifted. I think something will happen on time matching. I think a lot of folks there, the wind and solar industry has been very aggressive. Folks on the Hills will point me to, one, that many of these initial announcements from Treasuries have been very strict, and they have loosened up.

Speaker Change: And it is remarkable that all of those hubs stood together and said that the guidance is given we will be.

Speaker Change: Very very.

Speaker Change:

Speaker Change: <unk>.

Speaker Change: Really slow the growth if they are continue in places they are.

I've spent time on the hill with Union leaders with.

Speaker Change: When Union, where they were 500000 members of the Union.

Speaker Change: Okay.

Speaker Change: Ceos from the nuclear power industry, and I think when we look at it we would expect that nuclear and hydro.

Speaker Change: Will be.

Speaker Change: Reduce restrictions on those two.

Speaker Change: Youll, probably see that Oh.

Speaker Change: Grandfathering, which would kill many financing options.

Speaker Change: Probably it will be lifted I think something will happen on time matching.

James West: Right. I think a lot of folks here at wind and solar industry has been very aggressive.

James West: Right.

Andrew J. Marsh: I think a lot of folks here at wind and solar industry has been very aggressive. Folks on the Hills will point to me to one that many of these initial announces from treasuries had been very strict in they have loosened up. And I think a perfect one is natural gas stoves, which were very restricted. I think that it won't - I think you'll see changes. And I think those changes will be positive for the industry. Not perfect, but positive.

Speaker Change: I think a lot of folks here at wind and solar industry has been very aggressive.

Speaker Change: Aye.

Speaker Change: Folks on the Hills will point to me to one that.

Many of these initiatives.

Initial announces from treasuries had been very strict in they have loosened up.

Operator 2: I think a perfect one is natural gas stoves, right, which were very, very restrictive. I think that it won't. I think you'll see changes. And I think those changes will be positive for the industry, not perfect, but positive. Got it. All right. Thanks, Andy. Thanks, Paul. Thanks, guys. Okay. Thanks, James. Thank you. Next question is coming from Manav Gupta from UBS. Your line is now live. Good morning, guys. One growth area where we're seeing a lot of exciting news, and I think you can have leverage. And what's kind of missing a little from the earlier comments was this entire AI-driven data centers, backup power. Obviously, you have contracts with Microsoft over there.

Speaker Change: And.

Andy Marsh: I think a perfect one is natural gas stoves, right, which were very, very restrictive. I think that it won't. I think you'll see changes. And I think those changes will be positive for the industry, not perfect, but positive.

Speaker Change: I think a perfect one is natural gas stoves, right, which were very restricted.

Speaker Change: I think that.

Speaker Change: I think that it won't I think youll see changes.

Speaker Change: And I think those changes will be positive for the industry not perfect are positive.

James West: Got it. All right. Thanks, Andy. Thanks, Paul. Thanks, guys.

James West: Got it. Thanks, Andy. Thanks, Paul.

Andy Marsh: Okay. Thanks, James.

Andrew J. Marsh: Thanks, James.

Operator: Thank you. Next question is coming from Manav Gupta from UBS. Your line is now live.

Operator: Thank you. Your next question is coming from Neal Gupta from UBS. Your line is now live.

Manav Gupta: Good morning, guys. One growth area where we're seeing a lot of exciting news, and I think you can have leverage. And what's kind of missing a little from the earlier comments was this entire AI-driven data centers, backup power. Obviously, you have contracts with Microsoft over there.

Manav Gupta: Good morning, guys. [inaudible] One growth area, where we're seeing a lot of exciting news and I think you can have leverage and we're kind of missing from the earlier comments was this entire AI driven data center backup power. Obviously, you have contracts that Microsoft over there can you talk about you know how you can use your leverage your system and what Youre seeing out there. To kind of attack that market and grow in this backup power market already linear after their solutions for data centers and stuff. So when you look at the three major data center operators. <unk> is engaged and planning and I am going to call them. Some initial deployment in tests with all.

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

Speaker Change: One good morning.

UBS: One growth area, where we're seeing a lot of exciting news and I think you can have leverage and we're kind of missing from the earlier comments was this entire AI driven data center backup power. Obviously, you have contracts that Microsoft over there can you talk about you know how you can use your leverage your system and what Youre seeing out there.

Operator 2: Can you talk about how you can leverage your system and what you're seeing out there to kind of attack that market and grow in this backup power market or even off-the-grid solutions for data centers and stuff? So when you look at the three major data center operators, Plug is engaged and planning, and I'm going to call them some initial deployment and test with all. This won't be rapid during the next year or two, but certainly all of them because of the restrictions of diesel engines, because of, as you mentioned, how you want to make sure you have continuous uptime. And look, Plug has developed the premier product. No one's going through all the requirements to be able to operate in a data center. The big challenge, and the one that we're working through, is making sure how you manage hydrogen.

Manav Gupta: Can you talk about how you can leverage your system and what you're seeing out there to kind of attack that market and grow in this backup power market or even off-the-grid solutions for data centers and stuff?

UBS: To kind of attack that market and grow in this backup power market already linear after their solutions for data centers and stuff.

Andy Marsh: So when you look at the three major data center operators, Plug is engaged and planning, and I'm going to call them some initial deployment and test with all. This won't be rapid during the next year or two, but certainly all of them because of the restrictions of diesel engines, because of, as you mentioned, how you want to make sure you have continuous uptime. And look, Plug has developed the premier product. No one's going through all the requirements to be able to operate in a data center. The big challenge, and the one that we're working through, is making sure how you manage hydrogen.

So when you look at the three major data center operators.

Andrew J. Marsh: So, when you look at the three major data center operators, Plug is engaged and planning. And I'm going to call them some initial deployment and test with all. This won't be rapid during the next year or two. But certainly, all of them because of the restrictions of diesel engines, because of - as you mentioned that how do you want to make sure you have continuous uptime, and look, Plug has developed the premier product. No one's gone through all the requirements to be able to operate in a data center. The big challenge and the one that we're working through is making sure how you manage hydrogen. And we really working with these customers to really use not only the product as a backup power system, but also to be able to do peak low shaving. And I think the combination of those two will really allow this market to grow. I don't think it's a 2024 event. I think it could be a late 2025 event where you start seeing some deployments. It's a little level of scale. But that's - we've spent a lot of time and we developed a rather comprehensive marketing approach with one of the leading firms and - consulting firms in the world who knows more about hydrogen than anyone else. And they have told me that this is the market that ultimately will become our dominant market. But it's going to take a bit.

UBS: <unk> is engaged and planning and I am going to call them. Some initial deployment in tests with all.

UBS: Yeah.

UBS: This won't be.

UBS: Rapid during the next year or two.

UBS: But certainly.

UBS: Yeah.

UBS: All of them because of the restrictions of diesel.

UBS: Engines because of <unk>.

UBS: As you mentioned that.

UBS: How do you want to make sure you have continuous uptime and I look at <unk>.

UBS: <unk> has developed the premier product no one's going through.

UBS: All the requirements to be able to operate in a data center.

UBS: Big Challenge and the one that we're working through is making sure how you manage hydrogen.

Operator 2: And we're really working with these customers to really use not only the product as a backup power system but also to be able to do peak-load shaving. And I think the combination of those two will really allow this market to grow. I don't think it's a 2024 event. I think it could be a late 2025 event where you start seeing some deployments. It's a little level of scale, but that's when we've spent a lot of time, and we developed a rather comprehensive marketing approach with one of the leading firms and the consulting firms in the world who knows more about hydrogen than anyone else. And they have told me that this is the market that ultimately will become our dominant market, but it's going to take a bit. Perfect, Andy. And just quick clarification here.

Andy Marsh: And we're really working with these customers to really use not only the product as a backup power system but also to be able to do peak-load shaving. And I think the combination of those two will really allow this market to grow. I don't think it's a 2024 event. I think it could be a late 2025 event where you start seeing some deployments. It's a little level of scale, but that's when we've spent a lot of time, and we developed a rather comprehensive marketing approach with one of the leading firms and the consulting firms in the world who knows more about hydrogen than anyone else. And they have told me that this is the market that ultimately will become our dominant market, but it's going to take a bit.

UBS: And.

We really are.

UBS: Working with these customers to really use not only the product as a backup power system, but also to be able to.

UBS: Do peak low shaving and I think the combination of those two.

UBS: We will really allow this market to grow.

UBS: I don't think it's a 2024 event I think it could be a late 2025 event, where you start seeing some deployments.

UBS: A little level of scale, but.

UBS: Yes.

UBS: When I when we we've spent a lot of time and we developed a rather comprehensive marketing approach with one of the leading Oh.

UBS: Firms and the consulting firms in the world, who knows more about hydrogen than anyone else and they have told me that this is the market that are.

UBS: Or the middle East will become our dominant market.

UBS: But it's going to take a bit.

Manav Gupta: Perfect, Andy. And just quick clarification here. On multiple calls in the last two times, you have indicated that there were a whole bunch of unplanned outages within the hydrogen industry, which were restricting supply. Those were the headwinds to your third-quarter margins. Those were also the headwinds to your fourth-quarter margins. But you'd also indicated that things are improving as we get into January. So should we assume that at least some of those unplanned downtimes are gone, and then your own supply is ramping up? So some of those shortfalls would be better addressed as we enter 2024?

Manav Gupta: Perfect, Andy. And just a quick clarification here. On multiple calls in the last two times, you have indicated that there are a whole bunch of unplanned outages within the hydrogen industry, which were restricting supply. Those were the headwinds to your third quarter margins. Those were also the headwinds to your fourth quarter margins, but you had also indicated that things are improving as we get into January. So, should we assume that at least some of those unplanned downtimes are gone and then your own supply is ramping up, so some of those shortfalls would be better addressed as we enter 2024?

Operator 2: On multiple calls in the last two times, you have indicated that there were a whole bunch of unplanned outages within the hydrogen industry, which were restricting supply. Those were the headwinds to your third-quarter margins. Those were also the headwinds to your fourth-quarter margins. But you'd also indicated that things are improving as we get into January. So should we assume that at least some of those unplanned downtimes are gone, and then your own supply is ramping up? So some of those shortfalls would be better addressed as we enter 2024? The answer to your question is yes. If you look at the network at the moment, it has been stable throughout 2024. Our increased production, the rest of the network, has been relatively stable.

Speaker Change: On my support of calls in the last two times you have indicated that there are a whole bunch of unplanned outages that didn't the hydrogen industry. Thank you restricting supply those were the headwinds to your third quarter margin that those were also there had been for your fourth quarter margins, but could also indicated that things are improving as we get into January so should we assume that at.

Speaker Change: Some of those unplanned downtime are gone and then your own supply is ramping up so some of those shortfalls would be better addressed as we enter 2024.

Andy Marsh: The answer to your question is yes. If you look at the network at the moment, it has been stable throughout 2024. Our increased production, the rest of the network, has been relatively stable. I would think I have not spent a minute in 2024 worrying about customers not receiving hydrogen, which is dramatically different from what it was like in October, November, and in 2023.

Andrew J. Marsh: The answer to your question is yes. If you look at the network at the moment, it has been stable throughout 2024. Our increased production, the rest of the network - our increased production, the rest of the network has been relatively stable. And I would think - I have not spent a minute in 2024 worrying about customers not receiving hydrogen, which is dramatically different what it was like in October, November, and in 2023.

Speaker Change: If you if you look at the network at the moment.

Speaker Change: It has been stable throughout 2024 hour increased production.

Speaker Change: The rest of the network or increase production.

Speaker Change: The rest of the network has been relatively stable.

Operator 2: I would think I have not spent a minute in 2024 worrying about customers not receiving hydrogen, which is dramatically different from what it was like in October, November, and in 2023. Thank you, Andy. That's very positive to hear. Thank you. You're welcome. Thank you. Next question is coming from Craig Irwin from Plug Power. Your line is now live. Good morning, Craig. Morning, Andrew. I'm from Roth MKM. You changed. I thought I hired you, Craig. No. We've been friends a long time, Andy, but no. I don't know how to take that, Craig. Yeah. No. Hey. Well, let's stay friends. Let's stay friends.

Speaker Change: And I would say I have not spent a.

Mid in 2024.

Speaker Change: We're in about customers not receiving hydrogen which is dramatically different what might what it was like in October November.

Speaker Change: In 2023.

Manav Gupta: Thank you, Andy. That's very positive to hear. Thank you.

Speaker Change: Thank you Andy that's a positive to hear thank you Youre welcome.

Manav Gupta: Thank you, Andy. That's very positive to hear. Thank you.

Andy Marsh: You're welcome.

Operator: Thank you. Next question is coming from Craig Irwin from Plug Power. Your line is now live.

Andrew J. Marsh: You're welcome.

Operator: Thank you. Next question is coming from Craig Irwin from Plug Power. Your line is now live.

Andy Marsh: Good morning, Craig.

Andrew J. Marsh: Good morning, Craig.

Craig Irwin: Morning, Andrew. I'm from Roth MKM.

Craig Irwin: Good morning, Andrew. And I'm from ROTH MKM.

Andy Marsh: You changed. I thought I hired you, Craig.

Andrew J. Marsh: [laughter] I thought I hired you, Craig.

Craig Irwin: No. We've been friends a long time, Andy, but no.

Craig Irwin: No.

Andrew: We've been friends, along time, Andy, but but yes.

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

Andrew J. Marsh: I don't know how to take that, Craig.

Craig Irwin: Yeah. No. Hey. Well, let's stay friends. Let's stay friends. So, Andy, there's obviously a really intense amount of interest out there about your ability to take your third-party hydrogen procurement cost and make that a customer cost, a direct customer cost, while you bring online green hydrogen, which is obviously a much more compelling product to your customers and to Plug Power. So can you maybe give us a little bit more color on the underlying mix of contracts? You said you've started roughly half the conversations. What's the average duration of the contracts that governs the pricing for your hydrogen supply agreements with these third-party customers? And do these come up annually? Do they come up typically on a mix every three years? How much flexibility do you have in there from the contractual position you have with people?

Craig Irwin: No way. Let's stay friends. So, Andy, there's obviously a really intense amount of interest out there about your ability to take your third-party hydrogen procurement cost and make that a customer cost, a direct customer cost while you bring online green hydrogen, which is obviously a much more compelling product to your customers and to Plug Power. So, can you maybe give us a little bit more color on the underlying mix of contracts? You said you started roughly half the conversations. What's the average duration of the contracts that governs the pricing for your hydrogen supply agreements with these third-party customers? And are these - do these come up annually? Do they come up typically on a mix every three years? How much flexibility do you have in there from the contractual position we have with people? And if we estimate simplistically that there was a burn of a couple hundred million last year from these underwater contracts, do you get through half of it? Do we see half of that burn eliminated? I mean, how should we look at it?

Speaker Change: So Andy.

Operator 2: So, Andy, there's obviously a really intense amount of interest out there about your ability to take your third-party hydrogen procurement cost and make that a customer cost, a direct customer cost, while you bring online green hydrogen, which is obviously a much more compelling product to your customers and to Plug Power. So can you maybe give us a little bit more color on the underlying mix of contracts? You said you've started roughly half the conversations. What's the average duration of the contracts that governs the pricing for your hydrogen supply agreements with these third-party customers? And do these come up annually? Do they come up typically on a mix every three years? How much flexibility do you have in there from the contractual position you have with people?

Speaker Change: This is obviously a really intense amount of interest out there about your ability to take.

Speaker Change: Take your your third party hydrogen procurement.

Speaker Change: Cost and.

Speaker Change: Make that a customer cost of direct customer cost, while you bring online green hydrogen, which is obviously a much more compelling product to our customers and to plug power. So can you maybe give us a little bit more color on the.

Speaker Change: Underlying mix of contracts you said you started roughly half the conversations.

Whats the average duration of the contracts that governs the pricing for your hydrogen supply agreements with third party customers.

Speaker Change: You know and.

Speaker Change: Are these do these come up annually do they come up you know typically on it makes every three years how much flexibility do you have in there.

Speaker Change: From the contractual position you have with people.

Operator 2: And if we estimate simplistically that there was a burn of $200 million last year from these underwater contracts, do you get through half of it? Do we see half of that burn eliminated? I mean, how should we look at it? Craig, I'm going to turn that over to Sanjay. But I'll just add that there's been a recognition, and I mentioned this in my remarks with some of our long-term industrial gas partners, like Linde, who have been helpful. And I'll let Sanjay go into more detail here on how he sees this playing out during the next 12 to 18 months. Sanjay? Great. Thanks, Andy. Hey, Craig. How are you? So a couple of comments here, Craig, first, right? And let me just echo what Andy just mentioned here. There's been a lot of very constructive collaboration with our hydrogen third-party suppliers.

Craig Irwin: And if we estimate simplistically that there was a burn of $200 million last year from these underwater contracts, do you get through half of it? Do we see half of that burn eliminated? I mean, how should we look at it?

Speaker Change: And you know if we if we estimate simplistically that there was a burn of a couple of hundred million dollars last year.

Speaker Change: These underwater contracts.

Speaker Change: When you get through how do we do we see that half of that burn eliminated I mean, how should we look at it.

Andy Marsh: Craig, I'm going to turn that over to Sanjay. But I'll just add that there's been a recognition, and I mentioned this in my remarks with some of our long-term industrial gas partners, like Linde, who have been helpful. And I'll let Sanjay go into more detail here on how he sees this playing out during the next 12 to 18 months. Sanjay?

Andrew J. Marsh: Craig, I'm going to turn that over to Sanjay. But I'll just add that there's been a recognition, and I mentioned this in my remarks, with some of our long-term industrial gas partners like Linde who have been helpful. And I'll let Sanjay go into more detail here on how we see this playing out during the next 12 to 18 months. Sanjay?

But I'll I'll just add that.

Sanjay: There has been a recognition.

Sanjay: And I mentioned this in my remarks.

Sanjay: With.

Sanjay: Some of our long term industrial gas partners like Lindy, who had been helpful.

Sanjay: I'll, let Sanjay go into more detail here on how we see this playing out during the next 12 to 18 months. So Ajay great. Thanks, Andy Hey, Craig how are you. So a couple of comments here Craig first right and I think let me just echo what Andy just mentioned here theres been a lot of very constructive collaboration.

I'll, let Sanjay go into more detail here on how we see this playing out during the next 12 to 18 months.

So Ajay great. Thanks, Andy Hey, Craig how are you. So a couple of comments here Craig first right and I think let me just echo what Andy just mentioned here theres been a lot of very constructive collaboration.

So Ajay

Sanjay Shrestha: Great. Thanks, Andy. Hey, Craig, how are you? So, a couple of comments here, Craig, first, right, and I think, let me just echo what Andy just mentioned here. There's been a lot of very constructive collaboration with our hydrogen third party suppliers. And when you think about our contracting structure with them, there are several - actually as it stands today, there are several contracts that actually comes to an end by '26, there are several that comes to an end by '27. And if you actually take that into consideration -

Sanjay Shrestha: Great. Thanks, Andy. Hey, Craig. How are you? So a couple of comments here, Craig, first, right? And let me just echo what Andy just mentioned here. There's been a lot of very constructive collaboration with our hydrogen third-party suppliers.

Sanjay: With our hydrogen third party suppliers.

Operator 2: And when you think about our contracting structure with them, there are several actually, as it stands today, there are several contracts that actually come to an end by 2026. There are several that come to an end by 2027. And if you actually take that into consideration and then, and some that go in this year, 2027. Exactly, right? And Craig, when you think about then, our internal production that is going to be up and running by the end of Q3, including the Olin and JV, that actually covers as much as 85%. Now, having said that, our plan here is to continue to work with some of our industrial gas partners, make sure the pricing is improved, pricing is right, collaborate with also our customers. So it's almost like a three-way type of a situation where we're trying to get that passed on to the customer.

Sanjay Shrestha: And when you think about our contracting structure with them, there are several actually, as it stands today, there are several contracts that actually come to an end by 2026. There are several that come to an end by 2027. And if you actually take that into consideration and then, and some that go in this year, 2027. Exactly, right? And Craig, when you think about then, our internal production that is going to be up and running by the end of Q3, including the Olin and JV, that actually covers as much as 85%. Now, having said that, our plan here is to continue to work with some of our industrial gas partners, make sure the pricing is improved, pricing is right, collaborate with also our customers. So it's almost like a three-way type of a situation where we're trying to get that passed on to the customer.

Sanjay: And when you think about our contracting structure with them. There are several actually as it stands today. There are several contract that actually comes to an end by 26. There are several dot com is joining us by 27% and if you actually take that into consideration and some that go in this year is exactly right. So and Craig when you think about that our internal production that is going.

And when you think about our contracting structure with them. There are several actually as it stands today. There are several contract that actually comes to an end by 26. There are several dot com is joining us by 27% and if you actually take that into consideration

and some that go in this year is exactly right. So and Craig when you think about that our internal production that is going.

Andrew J. Marsh: And some that go in this year, and '25.

Sanjay Shrestha: Exactly, right. And Craig, when you think about then our internal production that is going to be up and running by the end of third quarter, including the Olin JV, that actually covers as much as 85%. Now, having said that, our plan here is to continue to work with some of our industrial gas partners, make sure the pricing is improved, pricing is right, collaborate with also our customers. So, it's almost like a three-way type of a situation where we're trying to get that passed on to the customer, we're trying to get better pricing from our industrial gas customer, and then you blend in our lower-cost production from Georgia, from Tennessee, from Louisiana.

Sanjay: It'll be up and running by the end of third quarter, including the <unk> JV that actually covers as much as 85% now having said that our plan here is to continue to work with some of our industrial gas partners make sure. The pricing is improved pricing is right collaborate with also our customers. So it's almost like a three way type of situations, where we are.

Sanjay: We're trying to get that passed onto the customer we're trying to get better pricing from our industrial gas customer and then you blend in our lower cost production from Georgia from Tennessee from Louisiana, but anything as you really go through the second half of this year in Q4 of this year you will see a step change in our fuel cost and the overall margin.

We're trying to get that passed onto the customer we're trying to get better pricing from our industrial gas customer and then you blend in our lower cost production from Georgia from Tennessee from Louisiana,

Operator 2: We're trying to get better pricing from our industrial gas customer. And then you blend in our lower-cost production from Georgia, from Tennessee, from Louisiana. But I think as you really go through the second half of this year and Q4 of this year, you will see a step change in our fuel cost and the overall margin profile driven by better pricing that Andy talked about, driven by potentially lower cost coming from our third-party supplier. And add on top of that, our lower cost of production coming from our own internal facility. I think you will really see a step change as you think about Q3 and Q4 of this year from our fuel margin and cash burn associated with that business. Excellent. Excellent. So that's a large piece of the equation that I really wanted to discuss, right?

Sanjay Shrestha: We're trying to get better pricing from our industrial gas customer. And then you blend in our lower-cost production from Georgia, from Tennessee, from Louisiana. But I think as you really go through the second half of this year and Q4 of this year, you will see a step change in our fuel cost and the overall margin profile driven by better pricing that Andy talked about, driven by potentially lower cost coming from our third-party supplier. And add on top of that, our lower cost of production coming from our own internal facility. I think you will really see a step change as you think about Q3 and Q4 of this year from our fuel margin and cash burn associated with that business.

Sanjay Shreshta: But I think as you really go to the second half of this year and Q4 of this year, you will see a step change in our fuel cost and the overall margin profile, driven by better pricing that Andy talked about, driven by potentially lower cost coming from our third-party supplier, and add on top of that, our lower cost of production coming from our own internal facility, I think you will really see a step change as you think about Q3 and Q4 of this year from our fuel margin and cash burn associated with that business.

Sanjay: Profile, driven by better pricing that Andy talked about driven by potentially lower cost coming from our third party supplier and add on top of that our lower cost of production coming from our own internal facility. I think you will really see a step change as you think about Q3 and Q4 of this year from our fuel margin and cash flow associated with that.

Sanjay: That business.

Craig Irwin: Excellent. Excellent. So that's a large piece of the equation that I really wanted to discuss, right? So last call, you mentioned that you have plans in place for a 70% reduction in cash needs in 2024 versus what you saw in 2023. Obviously, right-sizing the hydrogen pricing, bringing online green hydrogen is an important piece of that. Can you maybe give us a little bit more color as far as working capital and how that contributes, and then the relative contribution from price increases and the I know it's painful, but the headcount reductions that you've put in place?

Craig Erwin: Excellent. So, that's a large piece of the equation that I really wanted to discuss, right? So, last call you mentioned that you have plans in place for a 70% reduction in cash needs in '24 versus what you saw in 2023. Obviously, right-sizing the hydrogen pricing, bringing online green hydrogen is an important piece of that. Can you maybe give us a little bit more color as far as working capital and how that contributes, and then, the relative contribution from price increases, and I know it's painful, but the headcount reductions that you put in place?

Operator 2: So last call, you mentioned that you have plans in place for a 70% reduction in cash needs in 2024 versus what you saw in 2023. Obviously, right-sizing the hydrogen pricing, bringing online green hydrogen is an important piece of that. Can you maybe give us a little bit more color as far as working capital and how that contributes, and then the relative contribution from price increases and the I know it's painful, but the headcount reductions that you've put in place? Paul, do you want to take that one? Yeah. And I think there's a couple of big numbers that make it directionally a little bit more easy to follow the math. If you look at CapEx last year of north of $650 million, this year, we're cutting that number. Right now, the tentative plan is $250 million. We're trying to even get that down.

Speaker Change: Hum.

Paul: Paul you mentioned that.

Paul: Do you have plans in place for a 70% reduction in cash needs.

Paul: In 24 versus what you saw in 2023, obviously right sizing the hydrogen pricing, bringing online green hydrogen and important piece of that.

Can you maybe.

Paul: Give us a little bit more color as far as working capital and how that contributes and then you know the relative contribution from price increases and.

Paul: <unk>.

Paul: I know, it's painful, but but the head count reductions.

Paul: That you've put in place.

Andy Marsh: Paul, do you want to take that one?

Andrew J. Marsh: Paul, do you want to take that one?

Paul Middleton: Yeah. And I think there's a couple of big numbers that make it directionally a little bit more easy to follow the math. If you look at CapEx last year of north of $650 million, this year, we're cutting that number. Right now, the tentative plan is $250 million. We're trying to even get that down.

Paul B. Middleton: Yeah. And I think there's a couple of big numbers that make it directionally a little bit more easy to follow the math. If you look at Capex last year of north of $650 million. This year, we're cutting that number. Right now, the tentative plan is $250 million. We're trying to even get that down. So, that's a pretty substantial reduction in itself. And then, if you look at inventory, last year, we grew it by roughly $400 million. Obviously, we're not going to do that this year, so that's a $400 million improvement on its own. In addition to that, we actually think we can reduce inventory, so that'll be a working capital positive. So, it could be $200 million to $300 million additional. So, that's, call it, $700 million plus $400 million, that's $1.1 billion, just those two events alone.

Paul: We're actually a little bit more easy to follow the math, if you look at Capex last year.

Paul: North of $650 million.

Paul: This year, we're cutting that number right now tentative plan is $2 50, we are trying to even get that down so that's a pretty substantial reduction in itself.

Operator 2: So that's a pretty substantial reduction in itself. Then if you look at inventory, last year, we grew it by roughly $400 million. Obviously, we're not going to do that this year. So that's a $400 million improvement on its own. In addition to that, we actually think we can reduce inventory. So that'll be a working capital positive. So it could be a $200 to $300 million additional. So call it $700 million plus $400 million. That's $1.1 billion, just those two events alone. So obviously, we expect the results to get better, the things like price increases, the cost reduction that Andy mentioned, the facility consolidations that we're working on, some of the streamlining of the processes. That'll help the operating burn as well, the fuel dynamics getting better on the industry availability in our own facilities.

Paul Middleton: So that's a pretty substantial reduction in itself. Then if you look at inventory, last year, we grew it by roughly $400 million. Obviously, we're not going to do that this year. So that's a $400 million improvement on its own. In addition to that, we actually think we can reduce inventory. So that'll be a working capital positive. So it could be a $200 to $300 million additional. So call it $700 million plus $400 million. That's $1.1 billion, just those two events alone. So obviously, we expect the results to get better, the things like price increases, the cost reduction that Andy mentioned, the facility consolidations that we're working on, some of the streamlining of the processes. That'll help the operating burn as well, the fuel dynamics getting better on the industry availability in our own facilities.

Paul: And then if you look at inventory you know last year, we grew it by roughly $400 million, obviously, we're not going to do that this year. So that's a $400 million improvement on its own in addition to that.

We actually think we can reduce inventory so that'll be a working capital positive so.

Paul: It could be $2 million to $300 million additional so thats seven call it $700 million plus 400, Thats $1 1 billion just those two events alone. So obviously, we expect the results to get better.

It could be $2 million to $300 million additional so thats seven call it $700 million plus 400, Thats $1 1 billion just those two events alone.

Paul B. Middleton: So, obviously, we expect the results to get better. The things like price increases, the cost reduction that Andy mentioned, the facility consolidations that we're working on, some of the streamlining of the processes, those will help the operating burn as well. The fuel dynamics getting better on the industry availability in our own facilities. But the biggest contributors really come from that Capex reduction and the inventory leverage. And so, those will be tremendous. And as I mentioned, we're already seeing benefits that in Q1 and we'll see it really grow very quickly as we move into the following quarters.

Paul: Things like price increases the cost reduction that Andy mentioned the facility consolidations that we're working on some of the streamlining of the processes.

Paul: That'll that'll help the operating burn as well.

Paul: Fuel <unk>.

Paul: Dynamics getting better on the industry availability in our own facilities.

Operator 2: But the biggest contributors really come from that CapEx reduction and the inventory leverage. And so those will be tremendous. And as I mentioned, we're already seeing benefits of that in Q1, and we'll see it really grow very quickly as we move into the following quarters. Okay. Excellent. Excellent. And then there's been some very active conversation out there about the requirements for NEPA environmental compliance on the hydrogen plants that you're building. I know these are embedded pieces of the DOE loan process, but can you maybe update everyone on the overall loan process and how NEPA is included for qualification of sites to receive funding? Yeah. So I'm going to turn it over to Sanjay. As I mentioned in my opening remarks, Craig, we expect conditional approval by the end of this month, if not sooner. But Sanjay, do you want to talk about the NEPA process?

Paul Middleton: But the biggest contributors really come from that CapEx reduction and the inventory leverage. And so those will be tremendous. And as I mentioned, we're already seeing benefits of that in Q1, and we'll see it really grow very quickly as we move into the following quarters.

Paul: But.

Paul: The biggest contributors really come from that Capex reduction in the inventory leverage and so those will be tremendous and we're as I mentioned, we're already seeing benefits of that in Q1, and we'll see it really grow very quickly as we move into the following quarters.

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

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

Speaker Change: The requirements for NEPA environmental compliance on the hydrogen plants that Youre building.

Speaker Change: I know these are embedded pieces of the dhobi loan process, but can you maybe update everyone on.

Speaker Change: The overall loan process and how niklas included.

For for qualification of sites to receive funding.

Andy Marsh: Yeah. So I'm going to turn it over to Sanjay. As I mentioned in my opening remarks, Craig, we expect conditional approval by the end of this month, if not sooner. But Sanjay, do you want to talk about the NEPA process?

Andrew J. Marsh: So, I'm going to turn it over to Sanjay. As I mentioned in my opening remarks, Craig, we expect conditional approval by the end of this month, if not sooner. But Sanjay, do you want to talk about the NEPA process?

Speaker Change: I'm going to turn it over to Sanjay.

Sanjay: As I mentioned in my opening remarks Craig.

We expect we.

Sanjay: We expect conditional approval by the end of this month if not sooner.

Sanjay: Sanjay do you want to talk about the deeper crops showers. So Craig I think the most the one that we're really very much focused on right now is our project in Texas right and the one of the incremental benefit that we have there is we have done a lot of work with the developer that we worked with getting that project oil. It is right now and there's a lot of work.

Sanjay do you want to talk about the deeper crops showers.

Operator 2: Sure. So, Craig, I think the one that we're really very much focused on right now is our project in Texas, right? And one of the incremental benefits that we have there is we had done a lot of work with the developer that we worked with getting that project to where it is right now. And there's a lot of work that was done in the past that we can leverage. And obviously, we're looking to actually get that process restarted here, which is a key, as you rightfully pointed out, in terms of the loan guarantee program, getting that environmental permit done. We have a team that is exclusively focused on that. And you've heard us say this before, right?

Sanjay Shrestha: Sure. So, Craig, I think the one that we're really very much focused on right now is our project in Texas, right? And one of the incremental benefits that we have there is we had done a lot of work with the developer that we worked with getting that project to where it is right now. And there's a lot of work that was done in the past that we can leverage. And obviously, we're looking to actually get that process restarted here, which is a key, as you rightfully pointed out, in terms of the loan guarantee program, getting that environmental permit done. We have a team that is exclusively focused on that. And you've heard us say this before, right?

Sanjay Shrestha: Sure. So, Craig, I think the most - the one that we're really very much focused on right now is our project in Texas, right? And one of the incremental benefits that we have there is we have done a lot of work with the developer that we worked with getting that project to where it is right now. And there's a lot of work that was done in the past that we can leverage. And obviously, we're looking to actually get that process restarted here, which is a key, as you rightfully pointed out, in terms of the loan guarantee program, getting that environmental permit done. We have a team that is exclusively focused on that. And you've heard us say this before, right, that actually, especially in case of Texas, we believe that is going to be a relatively faster process versus your standard terms that you hear about multi-year process of getting the NEPA approval done.

Sanjay: Was done in the past that we can leverage and obviously, we're looking to actually get that process. We started here, which is a key as you rightfully pointed out in terms of the loan guarantee program getting that environmental permit done we have a team that is exclusively focused on that and you've heard us say this before right that actually especially in case of Texas. We believe that is going to be a relatively fast.

Operator 2: That actually, especially in case of Texas, we believe that is going to be a relatively faster process versus your standard terms that you hear about multi-year process of getting the NEPA approval done. We actually believe that that process is something that we should be able to wrap up here in Q2, certainly by the end of Q2, leveraging all the work that has been done. And given the timing of where we are with the loan guarantee program, timing of when we think we can get the NEPA done, we feel very good about really being able to collaborate with the Department of Energy, especially on a landmark project like Texas where you are using wind power, right?

Sanjay Shrestha: That actually, especially in case of Texas, we believe that is going to be a relatively faster process versus your standard terms that you hear about multi-year process of getting the NEPA approval done. We actually believe that that process is something that we should be able to wrap up here in Q2, certainly by the end of Q2, leveraging all the work that has been done. And given the timing of where we are with the loan guarantee program, timing of when we think we can get the NEPA done, we feel very good about really being able to collaborate with the Department of Energy, especially on a landmark project like Texas where you are using wind power, right?

Sanjay: Our process <unk> says you'll stand our titles that you hear about a multiyear process of getting that NIPA approval done we actually believe that that process is something that we should be able to wrap up here in Q2, certainly by the end of Q2, leveraging all the work that has been done and given the timing of where we are with the loan guarantee program timing of what we think we can get the knee, but we feel very good.

Our process <unk> says you'll stand our titles that you hear about a multiyear process of getting that NIPA approval done

Sanjay Shreshta: We actually believe that, that process is something that we should be able to wrap up here in Q2, certainly by the end of Q2, leveraging all the work that has been done. And given the timing of where we are with the loan guarantee program, timing of when we think we can get the NEPA done, we feel very good about really being able to collaborate with the Department of Energy, especially on a landmark project like Texas where you are using wind power, right? We're using - it's going to be one of the largest liquid green hydrogen plant that actually matches everything that we're talking about in terms of additionality to all the renewable energy credits to the low - PPA we have in place from the wind energy perspective. It's going to be our 120-megawatt electrolyzer, Plug 45 tons of liquefier, 15 and 30, and the first green hydrogen plant that probably has a lump sum turnkey EPC contract. So that's how we feel about it, Craig, and we feel pretty good about where we are with that process, what needs to be done, really leveraging all the work that has been done in the past. And that's really our primary focus right now.

Sanjay: About really being able to collaborate with the department of energy, especially on a landmark project like Texas, where youre using wind power right. We're using.

Operator 2: We're using it. It's going to be one of the largest liquid green hydrogen plants that actually matches everything that we're talking about in terms of additionality to all the renewable energy credits, to the PPA we have in place from the wind energy perspective. It's going to be our 120-MW electrolyzer plus 45-ton liquefier, 15 and 30, and the first green hydrogen plant that probably has a lump-sum turnkey EPC contract. So that's how we feel about it, Craig. And we feel pretty good about where we are with that process, what needs to be done, really leveraging all the work that has been done in the past. And that's really our primary focus right now. Excellent. And then this is a question that I'm not sure you can answer, but I'm going to try for it anyway. It's top of mind for a lot of people, right?

Sanjay Shrestha: We're using it. It's going to be one of the largest liquid green hydrogen plants that actually matches everything that we're talking about in terms of additionality to all the renewable energy credits, to the PPA we have in place from the wind energy perspective. It's going to be our 120-MW electrolyzer plus 45-ton liquefier, 15 and 30, and the first green hydrogen plant that probably has a lump-sum turnkey EPC contract. So that's how we feel about it, Craig. And we feel pretty good about where we are with that process, what needs to be done, really leveraging all the work that has been done in the past. And that's really our primary focus right now.

Sanjay: It's going to be the one of the largest liquid green hydrogen plant that actually matches everything that we're talking about in terms of additionality to all.

Sanjay: All the renewable energy credits.

Sanjay: <unk>, we have in place from the wind energy perspective, it's going to be our 120 megawatt Electrolyze are plus 45 ton local fire 15, and 30 and the first green hydrogen plant that probably as a lump sum turnkey EPC contracts. So that's how we feel about it Craig and we feel pretty good about where we are with that process what needs to be done really.

<unk>, we have in place from the wind energy perspective, it's going to be our 120 megawatt Electrolyze are plus 45 ton local fire 15, and 30 and the first green hydrogen plant that probably as a lump sum turnkey EPC contracts.

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

Sanjay: Leveraging all the work that has been done in the past and that's really our primary focus right now.

Craig Irwin: Excellent. And then this is a question that I'm not sure you can answer, but I'm going to try for it anyway. It's top of mind for a lot of people, right? So this DOE loan can fund up to 80% of a project's costs. Can you maybe give us color or some sort of understanding as far as how close to this 80% number you think is rational for you to receive as far as total project costs? And then there's conversation out there, not just about retroactive spending, but about scope maybe being slightly wider, that some of the expenses that have been incurred as far as the development costs and other associated projects might also see funding eligibility in some of these other loan packages. Is that a potential opportunity for Plug as you look to finalize terms with the Department of Energy?

Craig Irwin: Excellent. And then, this is a question that I'm not sure you can answer, but I'm going to try for it anyway. It's top of mind for a lot of people, right? So, this DOE loan can fund up to 80% of a project's costs. Can you maybe give us color or some sort of understanding as far as how close to this 80% number you think is rational for you to receive as far as total project costs? And then, there's conversation out there not just about retroactive spending, but about scope maybe being slightly wider, that some of the expenses that have been incurred as far as the development costs and other associated projects might also see funding eligibility in some of these other loan packages. Is that a potential opportunity for Plug as you look to finalize terms with the Department of Energy?

Craig Irwin: Excellent and then this is a question that I'm not sure you can answer, but I'm going to try for it anyway.

Craig Irwin: [laughter] hits at top of mind for a lot of people right. So there's the CLO loan.

Operator 2: So this DOE loan can fund up to 80% of a project's costs. Can you maybe give us color or some sort of understanding as far as how close to this 80% number you think is rational for you to receive as far as total project costs? And then there's conversation out there, not just about retroactive spending, but about scope maybe being slightly wider, that some of the expenses that have been incurred as far as the development costs and other associated projects might also see funding eligibility in some of these other loan packages. Is that a potential opportunity for Plug as you look to finalize terms with the Department of Energy? So, Craig, I'm going to let Paul take the first half and let Sanjay take some of the second half here. Do you want to start, Paul? Yeah. I guess I'm very confident and optimistic.

Can fund up to 80% of the project's costs can you maybe.

Craig Irwin: Give us color or some sort of understanding as far as you know how close to this 80% number you think is rational for you to receive as far as total project costs.

Craig Irwin: And then there's conversations out there not just about retroactive spending but about scope maybe being slightly wider.

Craig Irwin: That some of the expenses that have been incurred as.

Craig Irwin: As far as the development costs and other associated projects might also see funding eligibility and some of these other loan packages.

Craig Irwin: Is that a potential opportunity for plug.

Craig Irwin: You know as you look to finalize terms with the department of energy.

Andy Marsh: So, Craig, I'm going to let Paul take the first half and let Sanjay take some of the second half here. Do you want to start, Paul?

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

Paul B. Middleton: Yeah. I guess, I'm very confident and optimistic. And the reason why is because we've worked extensively with the DOE the last - really the last year and a half. And we've looked at projects we've deployed. We've looked at projects that we're working on. We've used those as proxies to understand what we're doing and how we're doing it. And they serve as good baselines to really have gotten to the point we're at with structuring it the way we have and thinking about how this will work. And so, I feel very good about that coming to fruition and being able to utilize the full 80% and the understanding that we have with the DOE of how these programs work and how the costs are sourced and how it applies. So, I feel really good about that. And Sanjay, I don't know if you -

Paul Middleton: Yeah. I guess I'm very confident and optimistic. The reason why is because we've worked extensively with the DOE really the last year and a half. We've looked at projects we've deployed. We've looked at projects that we're working on. We've used those as proxies to understand what we're doing and how we're doing it. They serve as good baselines to really have gotten to the point we're at with structuring it the way we have and thinking about how this will work. So I feel very good about that coming to fruition and being able to utilize the full 80% and the understanding that we have with the DOE of how these programs work and how the costs are sourced and how it applies. So I feel really good about that. And Sanjay, I don't know if you

Paul: I am very.

Paul: Confident and optimistic and the reason why is because we've worked extensively with the OE.

Operator 2: The reason why is because we've worked extensively with the DOE really the last year and a half. We've looked at projects we've deployed. We've looked at projects that we're working on. We've used those as proxies to understand what we're doing and how we're doing it. They serve as good baselines to really have gotten to the point we're at with structuring it the way we have and thinking about how this will work. So I feel very good about that coming to fruition and being able to utilize the full 80% and the understanding that we have with the DOE of how these programs work and how the costs are sourced and how it applies. So I feel really good about that. And Sanjay, I don't know if you Yeah. And I think, Paul, you kind of captured it.

Speaker Change: Really last year and a half.

Speaker Change: And we've looked at.

Speaker Change: Projects, we've deployed we've looked at projects that we're working on.

Speaker Change: Use those as proxies to understand what we're doing and how we're doing it and they serve as good baselines.

Speaker Change: Really have gotten to the point where at structuring it the way we have in thinking about how this will work and so I feel very good about.

Speaker Change: That come into fruition and being able to utilize the full 80%.

Speaker Change: And the understanding that we have with the OE of how these programs work.

Speaker Change: <unk>.

Speaker Change: Our sourced and how it applies and so I feel really good about that so in general yes.

Sanjay Shrestha: Yeah. And I think, Paul, you kind of captured it. Craig, I think, look, we're obviously going through final details here. And as you rightfully pointed out, probably don't want to get into too much more detail. But having said that, there's quite a bit of capital that have already been spent to get the project to where it is right now. So I think we feel pretty good about our position of how much money has been spent, whether it's on development effort, whether it's on all the big procurement items that actually goes in getting this project built, right? So that scenario could unfold as you pointed out here. But look, given that we're having all this in-depth discussion at this point in time, I think getting into too much more detail than that at this point in time is probably not something we would want to do.

Sanjay Shrestha: Yeah, and I think, Paul, you really kind of captured it. Craig, I think, look, we're obviously going through final details here. And as you rightfully pointed out, probably don't want to get into too much more detail. But having said that, there's been - there's quite a bit of capital that have already been spent to get the project where it is right now. So, I think we feel pretty good about our position of how much money has been spent, whether it's on development effort, whether it's on all the big procurement items that actually goes in getting this project built, right? So that scenario could unfold as you pointed out here. But look, given that we're having all this in-depth discussion at this point in time, I think getting into too much more detail than that at this point in time is probably not something we would want to do. But understand your logic, get your point where you're coming from, and a lot of the money has been spent from our equity contribution perspective for that project in Texas, and we feel pretty good about our position there.

Operator 2: Craig, I think, look, we're obviously going through final details here. And as you rightfully pointed out, probably don't want to get into too much more detail. But having said that, there's quite a bit of capital that have already been spent to get the project to where it is right now. So I think we feel pretty good about our position of how much money has been spent, whether it's on development effort, whether it's on all the big procurement items that actually goes in getting this project built, right? So that scenario could unfold as you pointed out here. But look, given that we're having all this in-depth discussion at this point in time, I think getting into too much more detail than that at this point in time is probably not something we would want to do.

Speaker Change: It's on all the big procurement items that actually goes in getting this project builds right. So thats scenario could unfold.

Speaker Change: As you're right as we pointed out here, but given that we are having all this in depth discussion at this point in time, I think getting into too much more detail than that at this point in time is probably not something we would want to do but I understand your logic gets you a point, where youre coming from and a lot of the money has been spent from our equity contribution perspective for that project in Texas.

Operator 2: But understand your logic, get your point where you're coming from. And a lot of the money has been spent from our equity contribution perspective for that project in Texas. And we feel pretty good about our position there. Great. Thanks, guys. Congrats on the progress here. Thanks, Craig. Thank you. Next question is coming from Bill Peterson from JPMorgan. Your line is now live. Yeah. Hi. Good morning, team. Thanks for taking the questions. Good morning, Bill. So if we think about 2024 revenue growth in the context of a focus on cash preservation, improving your equipment margins, service margins, and so forth, typically, you guys have discussed sort of a 1/3 first half, 2/3 second half.

Sanjay Shrestha: But understand your logic, get your point where you're coming from. And a lot of the money has been spent from our equity contribution perspective for that project in Texas. And we feel pretty good about our position there.

Speaker Change: Pretty good about our position there.

Craig Irwin: Great. Thanks, guys. Congrats on the progress here.

Speaker Change: Great. Thanks, guys. Congrats on the on the progress here. Thanks.

Craig Irwin: Great. Thanks, guys. Congrats on the progress here.

Andy Marsh: Thanks, Craig.

Andrew J. Marsh: Thanks, Craig.

Speaker Change: Thanks, Craig.

Operator: Thank you. Next question is coming from Bill Peterson from JPMorgan. Your line is now live. Yeah.

Operator: Thank you. Next question is coming from Bill Peterson from JP Morgan. Your line is now live.

Bill Peterson: Yeah. Hi. Good morning, team. Thanks for taking the questions.

Bill Peterson: Hi. Good morning, team. Thanks for taking the questions.

Andy Marsh: Good morning, Bill.

Andrew J. Marsh: Good morning, Bill.

Bill Peterson: So if we think about 2024 revenue growth in the context of a focus on cash preservation, improving your equipment margins, service margins, and so forth, typically, you guys have discussed sort of a 1/3 first half, 2/3 second half. But again, thinking about the cost reduction efforts, pushing pricing, shifting away from PPAs, some business from 2023 shifting to 2024, how should we think about the revenue trajectories through the year, starting with the Q1 that's more than halfway through now? And then if you can kind of discuss at a higher level the breakouts in the larger buckets, materials handling, electrolyzers, which presumably would be back half-weighted, especially in light of maybe more certainty around the IRA and so forth. But anything for how to think about the revenue growth this year and trajectory would be helpful.

Bill Peterson: So, if we think about 2024, revenue growth in the context of a focus on cash preservation, improving your equipment margins, service margins, and so forth, typically, you guys have discussed sort of a one-third first half, two-thirds second half. But again, thinking about the cost reduction efforts, pushing pricing, shifting away some PPAs, some business from '23 shifting to '24, how should we think about the revenue trajectories through the year, starting with the first quarter that's more than halfway through now? And then, if you can kind of discuss at a higher level, like the breakouts in the larger buckets, materials handling, electrolyzers, which presumably would be back-half weighted, especially in light of maybe more certainty around the IRA and so forth? But anything for - how to think about the revenue growth this year and trajectory would be helpful.

Bill Peterson: Improving your equipment margins service margins and so forth tipping.

Bill Peterson: Typically you guys have discussed sort of a one third first half two thirds second half.

Operator 2: But again, thinking about the cost reduction efforts, pushing pricing, shifting away from PPAs, some business from 2023 shifting to 2024, how should we think about the revenue trajectories through the year, starting with the Q1 that's more than halfway through now? And then if you can kind of discuss at a higher level the breakouts in the larger buckets, materials handling, electrolyzers, which presumably would be back half-weighted, especially in light of maybe more certainty around the IRA and so forth. But anything for how to think about the revenue growth this year and trajectory would be helpful. Bill, I'm going to let Paul take that one. Yeah.

Bill Peterson: But again thinking about the cost reduction efforts pushing pricing shifting away from Ppas. Some business from 'twenty three shifting to 'twenty four how should we think about the revenue trajectory through the year, starting with the first quarter thats more than halfway through now.

Bill Peterson: And then if you can kind of discuss at a higher level like the breakouts in the larger buckets materials handling electrolyze, which presumably would be back half weighted especially in light of more maybe more certainty around the IRA and so forth, but anything.

Bill Peterson: So how to think about the revenue growth this year in trajectory would be helpful.

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

Andrew J. Marsh: Bill, I'm going to let Paul take that one.

Paul Middleton: Yeah. I think both in terms of normal seasonality with material handling as well as the scaling of even follow-on and new projects, those factors will still keep us in that kind of 1/3, 2/3 scenario in terms of the revenue for the year. We do expect overall a growth year-over-year. It'll probably be slightly tempered from years past, just given some of those dynamics of price increases and not doing the PPA sales, these back transactions, and others. So I think for the overall, in terms of the first half and second half, I think using traditional trends and percentages is probably good proxies. I think overall, in terms of the sales mix, I'll talk at a more higher level.

Paul B. Middleton: Yeah, I think both in terms of normal seasonality with material handling, as well as the scaling of even follow-on and new projects, those factors will still keep us in that kind of the one third, two thirds scenario in terms of the revenue for the year. We do expect overall a growth year-over-year. It'll probably be slightly tempered from years past, just given some of those dynamics of price increases and not doing the PPA sale, lease back transactions and others. So, I think - but I think for the overall, in terms of the first half and second half, I think using traditional trends and percentages is probably good proxies.

Operator 2: I think both in terms of normal seasonality with material handling as well as the scaling of even follow-on and new projects, those factors will still keep us in that kind of 1/3, 2/3 scenario in terms of the revenue for the year. We do expect overall a growth year-over-year. It'll probably be slightly tempered from years past, just given some of those dynamics of price increases and not doing the PPA sales, these back transactions, and others. So I think for the overall, in terms of the first half and second half, I think using traditional trends and percentages is probably good proxies. I think overall, in terms of the sales mix, I'll talk at a more higher level.

Paul: Thank you.

Paul: In terms of normal seasonality with material handling as well as the scaling of even follow on and new projects.

Paul: Those factors will still keep us in that kind of a one third two thirds scenario in terms of the revenue for the year.

Paul: We do expect overall.

Our growth year over year.

Paul: It will probably be.

Paul: Probably slightly tempered from from years past, just given some of those dynamics of price increases in.

And not doing the PPA sale leaseback transactions and others.

So.

Paul: I think.

Paul: But I think for the overall in terms of the first half and second half I think using.

Paul: Traditional.

Paul: Trends in percentages is probably good proxies.

Paul B. Middleton: I think overall in terms of the sales mix. I'll talk at a more higher level I mean I think. The energy technology segment of the business the whole swath of all of those things. Probably be 60% of our sales somewhere in that range. And I think that's a strong statement showing how that business is really ramping and growing. <unk>. I hope, we're being conservative on the application side, because we do see a lot of opportunities and as Andy mentioned, even in the programs that we've announced in the last week or I think are fantastic signals of what our opportunities are there and those are substantial markets and we're saying there's still a lot of interest and excitement there. So. Hopefully, we're being conservative, but I think as we sit today those are probably the the proxies that I would give you. The guide some of your thoughts on how that will play. Okay. Thanks for that and just as a snapshot.

Paul B. Middleton: I think, overall, in terms of the sales mix, I'll talk at a more higher level. I think the energy technology section of the business, the whole swath of all of those things, probably be 60% of our sales somewhere in that range. And I think that's a strong statement showing how that business is really ramping and growing. And I hope we're being conservative on the application side because we do see a lot of opportunities. And as Andy mentioned, even the programs that we've announced in the last week I think are fantastic signals of what our opportunities are there. And those are substantial markets, and we're seeing still a lot of interest and excitement there. So, hopefully, we're being conservative. But I think, as we said today, those are probably the proxies that I would give you to guide some of your thoughts on how that will play.

Paul: I'll talk at a more higher level I mean I think.

Operator 2: I mean, I think the energy technology section of the business, the whole swath of all of those things, would probably be 60% of our sales, somewhere in that range. I think that's a strong statement showing how that business is really ramping and growing. I hope we're being conservative on the application side because we do see a lot of opportunities. As Andy mentioned, even the programs that we've announced in the last week, I think, are fantastic signals of what our opportunities are there. Those are substantial markets. We're seeing still a lot of interest and excitement there. So hopefully, we're being conservative. But I think as we sit today, those are probably the proxies that I would give you to guide some of your thoughts on how that will play. Okay. Thanks for that.

Paul Middleton: I mean, I think the energy technology section of the business, the whole swath of all of those things, would probably be 60% of our sales, somewhere in that range. I think that's a strong statement showing how that business is really ramping and growing. I hope we're being conservative on the application side because we do see a lot of opportunities. As Andy mentioned, even the programs that we've announced in the last week, I think, are fantastic signals of what our opportunities are there. Those are substantial markets. We're seeing still a lot of interest and excitement there. So hopefully, we're being conservative. But I think as we sit today, those are probably the proxies that I would give you to guide some of your thoughts on how that will play.

Paul: The energy technology segment of the business the whole swath of all of those things.

Paul: Probably be 60% of our sales somewhere in that range.

Paul: And I think that's a strong statement showing how that business is really ramping and growing.

Paul: <unk>.

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

Paul: Hopefully, we're being conservative, but I think as we sit today those are probably the the proxies that I would give you. The guide some of your thoughts on how that will play.

Bill Peterson: Okay. Thanks for that. Just as a snapshot, it's nice to see that Georgia is up and running in Tennessee. But what is the average output per day? I believe you talked about achieving 15 tons per day out of Georgia. But just trying to get a sense for how the operations are running, what the trajectory looks like looking ahead.

Speaker Change: Okay. Thanks for that and just as a snapshot.

Bill Peterson: Okay. Thanks for that. And just as a snapshot, it's nice to see that Georgia is up and running and Tennessee, but what is the average output per day? I believe you talked about achieving 15 tons per day out of Georgia, but just trying to get a sense for how the operations are running and what the trajectory looks like looking ahead?

Operator 2: Just as a snapshot, it's nice to see that Georgia is up and running in Tennessee. But what is the average output per day? I believe you talked about achieving 15 tons per day out of Georgia. But just trying to get a sense for how the operations are running, what the trajectory looks like looking ahead. So, Bill, we're fine-tuning. We've produced 11 tons of the 15 out of Georgia. Tennessee is almost back to full production at 10, 11 tons per day. I expect by mid-Q2, we'll be putting out all 15 tons out of Georgia. Okay. Thanks for that. Just one final, just sort of housekeeping. In the last January update, you talked about your current near-term unrestricted cash of above $100 million. What is the near-term cash position today, if you're able to say? Go ahead. Yeah.

Speaker Change: It's nice to see that George is up and running in Tennessee, but what is the average output per day I believe you talked about achieving 15 tons per day out of Georgia, but.

Speaker Change: Just trying to get a sense for how the operations are running and what the trajectory looks like.

Speaker Change: Looking ahead.

Sanjay Shrestha: So, Bill, we're fine-tuning. We've produced 11 tons of the 15 out of Georgia. Tennessee is almost back to full production at 10, 11 tons per day. I expect by mid-Q2, we'll be putting out all 15 tons out of Georgia.

Andrew J. Marsh: So, Bill, we're fine tuning. We've produced 11 tons of the 15 out of Georgia. Tennessee is almost back to full production of 10, or 11 tons per day. I expect by mid-second quarter, we'll be putting out all 15 tons out of Georgia.

Speaker Change: Fine tuning, we produced 11 tons of the 15 out of Georgia.

Tennessee is almost back to full production at 10% to 11 tons per day.

Speaker Change: I expect by the second quarter, we will be putting out all 15 tons out of Georgia.

Bill Peterson: Okay. Thanks for that. Just one final, just sort of housekeeping. In the last January update, you talked about your current near-term unrestricted cash of above $100 million. What is the near-term cash position today, if you're able to say? Go ahead.

Speaker Change: Last January update you talked about.

Speaker Change: Near term unrestricted cash in.

Speaker Change: Of above $100 million. What is what is then the near term cash position today, if youre, if youre able to say.

Andrew J. Marsh: Go ahead, Paul.

Speaker Change: Go ahead.

Sanjay Shrestha: Yeah. I mean, it's probably north of 300, something in that range, plus or minus. I mean, we're the first couple of months are very encouraging in terms of what we've seen in curtailing the spend. And we're laser-focused on narrowing CapEx even further and deferring when we can and doing all the things that we talked about to drive that down, so.

Operator 2: I mean, it's probably north of 300, something in that range, plus or minus. I mean, we're the first couple of months are very encouraging in terms of what we've seen in curtailing the spend. And we're laser-focused on narrowing CapEx even further and deferring when we can and doing all the things that we talked about to drive that down, so. Great. Thanks for all the color and insights. Thank you. Thanks, Bill. Thank you. Next question is coming from George Gianarikas from Canaccord Genuity. Your line is now live. Hey. Good morning. And thank you for taking my question. Morning, George. So I have sort of an existential question. As you recover in 2024 and digest some of the new rules from Treasury, what sort of focus should we expect from Plug Power long-term?

Paul B. Middleton: Yeah, I mean, it's probably north of $300 million, something in that range, plus or minus. I mean, the first couple months are very encouraging in terms of what we've seen in curtailing the spend. And we're laser focused on narrowing Capex even further and deferring when we can and doing all the things that we talked about to drive that down, so -

Speaker Change: We're.

Speaker Change: The first couple of months are very encouraging in terms of what we've seen in from tail on the spin.

And.

Speaker Change: We're still we're laser focused on.

Speaker Change: Narrowing capex, even further and deferring when we can and doing all the things that we've talked about to drive that down so.

Bill Peterson: Great. Thanks for all the color and insights. Thank you.

Bill Peterson: Great. Thanks for all the color and insights. Thank you .

Andy Marsh: Thanks, Bill.

Andrew J. Marsh: Thanks, Bill.

Operator: Thank you. Next question is coming from George Gianarikas from Canaccord Genuity. Your line is now live.

Operator: Thank you. Next question is coming from George Gianarikas from Canaccord Genuity. Your line is not live.

George Gianarikas: Hey. Good morning. And thank you for taking my question.

George Gianarikas: Hey, good morning, and thank you for taking my question.

Andy Marsh: Morning, George.

Andrew J. Marsh: Good morning, George.

George Gianarikas: So I have sort of an existential question. As you recover in 2024 and digest some of the new rules from Treasury, what sort of focus should we expect from Plug Power long-term? Which areas of the hydrogen market or geographies probably offer the best returns on capital as we focus beyond 2024? Thank you.

George Gianarikas: So, I have sort of an existential question. As you recover in 2024 and digest some of the new rules from Treasury, what sort of focus should we expect from Plug Power long term? Which areas of the hydrogen market or geographies probably offer the best returns on capital as we focus beyond 2024? Thank you.

George H. Burwell: <unk>.

George H. Burwell: Recover in 2024 and digest some of the new rules from Treasury.

George H. Burwell: What sort of focus should we expect from plug power long term, which areas of the hydrogen market or geographies probably offer the best returns on capitalized we focus beyond 2024. Thank you.

Operator 2: Which areas of the hydrogen market or geographies probably offer the best returns on capital as we focus beyond 2024? Thank you. That's actually a good question, George. And I think that I think what you'll see is that during the and this is actually we have been spending a lot of time on this issue. I think through this decade, that the energy business with electrolyzers as well as generation of hydrogen will probably represent two-thirds of our revenue during the rest of this decade. What we believe is that come 2030, what you're going to see is accelerated growth in our application business, especially our stationary products. And not to go way out there, George, but you said to me existential, I think by 2032, 2033, applications will start probably dominating again as more and more hydrogen is readily available.

Andy Marsh: That's actually a good question, George. And I think that I think what you'll see is that during the and this is actually we have been spending a lot of time on this issue. I think through this decade, that the energy business with electrolyzers as well as generation of hydrogen will probably represent two-thirds of our revenue during the rest of this decade. What we believe is that come 2030, what you're going to see is accelerated growth in our application business, especially our stationary products. And not to go way out there, George, but you said to me existential, I think by 2032, 2033, applications will start probably dominating again as more and more hydrogen is readily available.

Andrew J. Marsh: That's actually a good question, George. And I think that - I think what you'll see is that during the - and this is actually we've been spending a lot of time on this issue. I think through this decade that the energy business with electrolyzers as well as generation of hydrogen will probably represent two thirds of our revenue during the rest of this decade. What we believe is that, come 2030, what you're going to see is accelerated growth in our application business, especially our stationary products.

Speaker Change: And.

Speaker Change: I think that.

Speaker Change: I think what Youll see is that.

Speaker Change: During the.

Speaker Change: And this is actually we spent we've been spending a lot of time on this issue I think through this decade.

Speaker Change: That the energy business with electric <unk> as well as the generation of hydrogen will probably represent.

Speaker Change: Two thirds of our revenue during the rest of this decade.

Speaker Change: What we believe is that.

Speaker Change: Come 2030, what youre going to see is accelerated growth in our application business.

Speaker Change: Especially our stationary products.

Andrew J. Marsh: And not to go way out there, George, but you said to me existential. I think by '22 - by '32, '33, applications will start probably dominating again as more and more hydrogen is readily available. I think during the next two to three years, when the energy sector - Europe will actually dominate our electrolyzer sales. And then, ultimately, I think that on that energy sector, the U.S. and Europe will start balancing more out. And that would be kind of what our internal view is as we look out through '35. But obviously, our crystal ball is much better for '24, '25. So, it's the energy sector, it's Europe for electrolyzers, it's the U.S. for applications. Hope that helped.

Speaker Change: Not to go way out there George for you you said to me existential I think by 'twenty. Two by 32 33 applications will start probably dominating again as more and more hydrogen is readily available.

Operator 2: I think during the next 2 to 3 years, the energy sector Europe will actually dominate our electrolyzer sales. Then ultimately, I think that on that energy sector, the US and Europe will start balancing more out. And that would be kind of what our internal view is as we look out through 2035. But obviously, our crystal ball is much better for 2024, 2025. So it's the energy sector. It's Europe for electrolyzers. It's the US for applications. Hope that helped. Good. Thank you. And maybe as a follow-up, you announced, I think, about a week and a half ago, a contract to support a major US auto OEM in material handling. Curious as to whether you can share any more detail. I think you mentioned the first quarter of 2025 that'll be operational. Any additional detail? Thank you. Yeah. It's a new customer.

Andy Marsh: I think during the next 2 to 3 years, the energy sector Europe will actually dominate our electrolyzer sales. Then ultimately, I think that on that energy sector, the US and Europe will start balancing more out. And that would be kind of what our internal view is as we look out through 2035. But obviously, our crystal ball is much better for 2024, 2025. So it's the energy sector. It's Europe for electrolyzers. It's the US for applications. Hope that helped.

Speaker Change: I think during the next two to three years when the energy sector.

Speaker Change: Our Europe will actually dominate our electrolyze or sales and then ultimately I think that on that energy sector.

Speaker Change: The U S and Europe will start balancing more route and that would be kind of.

Speaker Change: What our internal view is as we look out through 35.

Speaker Change: But.

Speaker Change: Obviously, our crystal ball is much better for 2425, so it's the energy sector.

Speaker Change: Europe, we're electrolyze, there's it's the U S for applications.

Speaker Change: Hope that helps.

George Gianarikas: Good. Thank you. And maybe as a follow-up, you announced, I think, about a week and a half ago, a contract to support a major US auto OEM in material handling. Curious as to whether you can share any more detail. I think you mentioned the first quarter of 2025 that'll be operational. Any additional detail? Thank you.

George Gianarikas: Thank you. Maybe as a follow-up, you announced, I think, about a week and a half ago a contract to support a major U.S. auto OEM in material handling. Curious as to whether you can share any more detail. I think you mentioned the first quarter of '25 that'll be operational. Any additional detail? Thank you.

Speaker Change: And maybe as a follow up you announced I think about a week.

Speaker Change: Week, and a half ago, a contract to support a major U S auto OEM.

Speaker Change: Youll handling.

Speaker Change: Curious as to whether you can share any more detail I think you've mentioned in the first quarter.

Speaker Change: A 25 that will be operational.

Speaker Change: Final detail. Thank you.

Andy Marsh: Yeah. It's a new customer. It's a US-based customer. When we look at it, it is a perfect opportunity because it's a campus, which will include their suppliers, which also will be using hydrogen-based products, which will allow us to continue to grow. I hope during the coming quarters, we'll be able to tell you more. But it's a big deal. I think that there's almost a dozen hydrogen fueling stations inside the building. And this is pretty typical how new buildings come up.

Andrew J. Marsh: It's a new customer. It's a U.S.-based customer. When we look at it, it is a perfect opportunity because it's a campus which will include their suppliers, which also will be using hydrogen-based products, which will allow us to continue to grow. I hope during the coming quarters, we'll be able to tell you more, but it's a big deal. I think that there's almost a dozen hydrogen fueling stations inside the building. And this is pretty typical how new buildings come up. Georgia, if I think about BMW in Spartanburg, where we started with about 75 products, and you'll have initial run of those products and testing during the end - in this case, at this project at the end of the year, which duplicates what we've seen elsewhere with new auto facilities, and then it could rapidly grow. At BMW, for example, I think we have over 600 fuel cells today. So, I think what you'll see is this campus will continue to grow and I think will become bigger than BMW ultimately because of all the supplier base integrated there.

Speaker Change: It's a new customer it's a U S based customer.

Operator 2: It's a US-based customer. When we look at it, it is a perfect opportunity because it's a campus, which will include their suppliers, which also will be using hydrogen-based products, which will allow us to continue to grow. I hope during the coming quarters, we'll be able to tell you more. But it's a big deal. I think that there's almost a dozen hydrogen fueling stations inside the building. And this is pretty typical how new buildings come up. George, if I think about BMW in Spartanburg, where we started with about 75 products, and you'll have initial run of those products and testing during the end in this case, at this project, at the end of the year, which duplicates what we've seen elsewhere with new auto facilities. And then it could rapidly grow. At BMW, for example, I think we have over 600 fuel cells today.

Speaker Change: It's.

When we look at it.

Speaker Change: It is a perfect opportunity because it's a campus which will include their suppliers, which also will be using hydrogen based products, which will allow us to continue to grow.

Speaker Change: I hope during the coming quarters, we will be able to tell you more.

Speaker Change: But it's a big deal.

Speaker Change: I think that there is almost a dozen hydrogen fueling stations inside the building and this is pretty typical Hal new buildings come up.

Andy Marsh: George, if I think about BMW in Spartanburg, where we started with about 75 products, and you'll have initial run of those products and testing during the end in this case, at this project, at the end of the year, which duplicates what we've seen elsewhere with new auto facilities. And then it could rapidly grow. At BMW, for example, I think we have over 600 fuel cells today. So I think what you'll see is this campus will continue to grow. And I think it'll become bigger than BMW ultimately because of all the supplier base integrated there.

Speaker Change: George.

Speaker Change: Think about BMW and Spartan for where we started with about 75 products and Youll have initial run of those fracs and testing.

Speaker Change: During the and in this case at this project at the end of the year, which duplicate what we've seen elsewhere with new new auto facilities and that it could rapidly grow at BMW. For example, I think we have over 600 fuel cells today, So I think.

Operator 2: So I think what you'll see is this campus will continue to grow. And I think it'll become bigger than BMW ultimately because of all the supplier base integrated there. Great. Thank you so much. You're welcome, George. Thank you. Next question is coming from Skye Landon from Redburn Atlantic. Your line is now live. Hi. Thanks for taking my questions. Morning, Sky. Hi, Andy. In the base case, my first question is, the 70% cash burn reduction guidance, does this assume any CapEx for new hydrogen projects in Texas or New York during 2024, or are these projects now, in the base case, a 2025 start? And then secondly, on the outlook for the electrolyzer business, when do you now expect to start seeing major projects reaching contract-ready stages? And when do you expect to see order flow coming in?

Speaker Change: What Youll see is this campus will continue to grow and I think will become bigger than BMW ultimately because of all the supplier base integrated there.

George Gianarikas: Great. Thank you so much.

Andy Marsh: You're welcome, George.

Andrew J. Marsh: You're welcome, George.

Operator: Thank you. Next question is coming from Skye Landon from Redburn Atlantic. Your line is now live.

Skye Landon: Hi. Thanks for taking my questions.

Sky Landon: Hi, Thanks for taking my questions.

Andy Marsh: Morning, Sky.

Andrew J. Marsh: Good morning, Skye.

Skye Landon: Hi, Andy. In the base case, my first question is, the 70% cash burn reduction guidance, does this assume any CapEx for new hydrogen projects in Texas or New York during 2024, or are these projects now, in the base case, a 2025 start? And then secondly, on the outlook for the electrolyzer business, when do you now expect to start seeing major projects reaching contract-ready stages? And when do you expect to see order flow coming in? I mean, we've got production auctions going on in Europe at the moment. Hopefully, we'll get some clarification on the rules in the US. But I'd be interested to hear your take on whether this is a first half 2024 or a second half 2024 or a 2025 timing. Thank you.

Skye Landon: Hi, Andy. In the base case, my first question is, the 70% cash burn reduction guidance, does this assume any Capex for new hydrogen projects in Texas or New York during 2024, or are these projects now in the base case of 2025 start? And then secondly, on the outlook for the electrolyzer business, when do you now expect to start seeing major projects reaching contracts-ready stages? And when do you expect to see order flow coming in? I mean, we've got production auctions going on in Europe at the moment. Hopefully, we'll get some clarification on the rules in the U.S. But I'd be interested to hear your take on whether this is a first-half '24 or second-half '24, or a 2025 timing. Thank you.

Sky Landon: And the base case My first question is the 70% cost reduction.

Sky Landon: Does this assume any capex for new hydrogen projects in Texas, and New York During 2024 or are these projects now in the base case of 2025.

Sky Landon: And then secondly.

Sky Landon: On the outlook for the electronics business.

Sky Landon: When do you now expect to start seeing major projects, reaching contracts ready stages and when do you expect to see order flow order flow coming in.

Operator 2: I mean, we've got production auctions going on in Europe at the moment. Hopefully, we'll get some clarification on the rules in the US. But I'd be interested to hear your take on whether this is a first half 2024 or a second half 2024 or a 2025 timing. Thank you. I will let Sanjay take the electrolyzer bit first. And then I'll turn it over to Paul for capital usage. Thank you, Andy. Hey, Skye. Again, on the electrolyzer side, right? So I'm sure, bro, you guys saw we announced that we actually did multiple basic engineering design packages with some large customers in Europe in 2024. We have actually done a lot of those basic engineering design packages with customers throughout the world, if you would, even in 2023, right?

Sky Landon: We've got production auctions going on in Europe at the moment and hopefully we'll get some clarification on the rules in the U S.

But I'd be interested to hear you'll take on whether this is a first half 'twenty for second half 'twenty four or 2020, followed as Tom. Thank you.

Andy Marsh: I will let Sanjay take the electrolyzer bit first. And then I'll turn it over to Paul for capital usage.

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

Tom: First and then I'll turn it over to Paul for capital usage.

Sanjay Shrestha: Thank you, Andy. Hey, Skye. Again, on the electrolyzer side, right? So I'm sure, bro, you guys saw we announced that we actually did multiple basic engineering design packages with some large customers in Europe in 2024. We have actually done a lot of those basic engineering design packages with customers throughout the world, if you would, even in 2023, right?

Sanjay Shrestha: Thank you Andy his Scott again on the Electrolyze it side right. So. I'm sure you guys saw we announced that we actually did. Multiple basic engineering design package with some large customers in Europe. In 2024, we have actually done a lot of those basic engineering design package with customers throughout the world. If you would even in 2023 right. So when you think about our book of business or the work that we're doing within the basic engineering design package that is actually approaching almost four gigawatt. When you really think about that now some of this. <unk> needs to get there, but we're working hand in hand, with our customers, helping them think through the design, helping them tuned to what's the optimal way to think about the plant build out and that's where having bill George Yes, having had 40 megawatt and the world's largest larger.

Sanjay Shrestha: Thank you, Andy. Hey, Skye. Again, on the electrolyzer side, right, so I'm sure you guys saw we announced that we actually did multiple basic engineering design package with some large customers in Europe in 2024. We have actually done a lot of those basic engineering design packages with customers throughout the world, if you would, even in 2023, right? So, when you think about our book of business or the work that we're doing within the basic engineering design package that is actually approaching almost 4-gigawatt when you really think about that.

Scott: I'm sure you guys saw we announced that we actually did.

Sanjay: Multiple basic engineering design package with some large customers in Europe.

Sanjay: In 2024, we have actually done a lot of those basic engineering design package with customers throughout the world. If you would even in 2023 right. So when you think about our book of business or the work that we're doing within the basic engineering design package that is actually approaching almost four gigawatt. When you really think about that now some of this.

Operator 2: So when you think about our book of business or the work that we're doing within the basic engineering design package, that is actually approaching almost 4 gigawatts when you really think about that. Now, some of this project still needs to get to FID. But we're working hand in hand with the customers, helping them think through the design, helping them think through what's the optimal way to think about the plant buildout. And that's where having built Georgia, having had 40 megawatts and the world's largest PEM electrolyzer in the Western Hemisphere actually goes a long way to support customers in terms of thinking through that basic engineering design package as well. Now, when it comes to the revenue for 2024, we actually have a pretty robust backlog when you think about it, right? We have a lot of 5-megawatt projects already in the backlog.

Sanjay Shrestha: So when you think about our book of business or the work that we're doing within the basic engineering design package, that is actually approaching almost 4 gigawatts when you really think about that. Now, some of this project still needs to get to FID. But we're working hand in hand with the customers, helping them think through the design, helping them think through what's the optimal way to think about the plant buildout. And that's where having built Georgia, having had 40 megawatts and the world's largest PEM electrolyzer in the Western Hemisphere actually goes a long way to support customers in terms of thinking through that basic engineering design package as well. Now, when it comes to the revenue for 2024, we actually have a pretty robust backlog when you think about it, right? We have a lot of 5-megawatt projects already in the backlog.

Sanjay Shrestha: Now, some of these projects needs to get to FID, but we're working hand in hand with the customers, helping them think through the design, helping them think through what's the optimal way to think about the plant build out. And that's where having built Georgia, having had 40 megawatt and the world's largest PEM electrolyzer in the Western hemisphere actually goes a long way to support customers in terms of thinking through that basic engineering design package as well.

Sanjay: <unk> needs to get there, but we're working hand in hand, with our customers, helping them think through the design, helping them tuned to what's the optimal way to think about the plant build out and that's where having bill George Yes, having had 40 megawatt and the world's largest larger.

Sanjay: Largest perm electrolyze it in the Western Hemisphere actually goes a long way to support customers thinking through that basic engineering design packages as well.

Sanjay Shrestha: Now, when it comes to the revenue, for 2024, we actually have a pretty robust backlog when you think about it, right? We have a lot of 5-megawatt projects already in the backlog. We also do have some large projects that we're already executing that's in the backlog. We do have 1-megawatt system in the backlog. So, '24 is really about executing, really about delivering on that existing backlog and puts us in a really good position to be able to do a few things. One, convert the inventory into cash. This business is really going to be our cash generation in 2024, as well as drive the top-line growth. The second piece you're going to see in 2024, as we execute in this backlog, margins will not be as great in Q1. It will improve in Q2, but margins as well as cash flow will again improve in the second half of the year, as you start to see cost going down, as you also start to see higher price opportunity flow through that P&L.

Operator 2: We also do have some large projects that we're already executing, that's in the backlog. We do have a 1 megawatt system in the backlog. So 2024 is really about executing, really about delivering on that existing backlog, and puts us in a really good position to be able to do a few things. One, convert the inventory into cash. This business is really going to be our cash generation in 2024 as well as drive the top-line growth. Second piece you're going to see in 2024, as we execute in this backlog, margins will not be as great in Q1. It will improve in Q2. But margins as well as cash flow will, again, improve in the second half of the year as you start to see cost going down, as you also start to see higher price opportunity flow through that P&L.

Sanjay Shrestha: We also do have some large projects that we're already executing, that's in the backlog. We do have a 1 megawatt system in the backlog. So 2024 is really about executing, really about delivering on that existing backlog, and puts us in a really good position to be able to do a few things. One, convert the inventory into cash. This business is really going to be our cash generation in 2024 as well as drive the top-line growth. Second piece you're going to see in 2024, as we execute in this backlog, margins will not be as great in Q1. It will improve in Q2. But margins as well as cash flow will, again, improve in the second half of the year as you start to see cost going down, as you also start to see higher price opportunity flow through that P&L.

Sanjay: About delivering on that existing backlog and puts us in a really good position to be able to do a few things one converting inventory into cash. This business is really going to be a cash generation in 2024 as well as drive the topline growth second piece youre going to see in 2024 as we execute in this backlog margins will.

Not be as great in Q1, it will improve in Q2, but margins as well as cash flow will again improve in the second half of the year as you start to see cost going down as you also start to see higher price opportunity flow through the P&L. So for 2024, it's not so much about really going and winning more business, but we do feel pretty.

Operator 2: So for 2024, it's not so much about really going and winning more business. But we do feel pretty good about a lot of these projects where we have done basic engineering design packages on 100-megawatt-plus projects that starts to actually become concrete. There's many projects going into FID by the middle of this year. But let's be clear, right? Real revenue opportunity on these large projects, whether it's in Europe, whether it's in the US, whether it's in Australia, that is really going to be 2025 and beyond opportunity, giving us a fantastic base at that backlog, very predictable revenue, very predictable margin. And in the near term, even to support growth in 2025, we're also very focused on our 5-megawatt product line, both for the US as well as for Europe.

Sanjay Shrestha: So for 2024, it's not so much about really going and winning more business. But we do feel pretty good about a lot of these projects where we have done basic engineering design packages on 100-megawatt-plus projects that starts to actually become concrete. There's many projects going into FID by the middle of this year. But let's be clear, right? Real revenue opportunity on these large projects, whether it's in Europe, whether it's in the US, whether it's in Australia, that is really going to be 2025 and beyond opportunity, giving us a fantastic base at that backlog, very predictable revenue, very predictable margin. And in the near term, even to support growth in 2025, we're also very focused on our 5-megawatt product line, both for the US as well as for Europe.

Sanjay Shrestha: So, for 2024, it's not so much about really going and winning more business, but we do feel pretty good about a lot of these projects where we have done basic engineering design package on 100-megawatt-plus project that starts to actually become concrete. There's many projects going to FID by the middle of this year. But let's be clear, right, real revenue opportunity on this large project, whether it's in Europe, whether it's in U.S., whether it's in Australia, that is really going to be 2025 and beyond opportunity, giving us a fantastic base of that backlog, very predictable revenue, very predictable margin.

Sanjay: Good about lot of these projects, where we have done basic engineering design package on 100 megawatt plus project that starts to actually become concrete there's many projects going by the middle of this year, but let's be clear right real revenue opportunity on those large projects, whether it's in Europe, whether it's in U S. Whether it's in Australia that is really good.

Sanjay: <unk> 2025, and beyond the opportunity, giving us a fantastic base at our backlog very predictable revenue very predictable margin and in the near term even to support growth. In 2025. We're also very focused on our five megawatt product line multiple U S as well as for Europe, and Thats, where you will still.

<unk> 2025, and beyond the opportunity, giving us a fantastic base at our backlog very predictable revenue very predictable margin

Sanjey Shrestha: And in the near term, even to support growth in 2025, we're also very focused on our 5-megawatt product line, both for U.S. as well as for Europe. And that's where you will still see new book of business materialize for us supporting that growth in 2025. Again, we feel very good about cash generation, strong visibility. This year is really about executing on this existing backlog for us to give us a robust performance in the electrolyzer business in 2024. Paul?

Operator 2: That's where you will still see new book of business materialize for us supporting that growth in 2025. Again, we feel very good about cash generation, strong visibility. This year is really about executing on this existing backlog for us to give us a robust performance in the electrolyzer business in 2024. Paul? Yeah. I guess a couple of things. One, on the hydrogen investments that we have in the current plan is predominantly the retention and finalization of the Georgia plant that we've completed. It's the funding for the Louisiana program we have with Olin that we're developing, building, and rolling out. Then it's kind of residual projects that we had open at the end of last year that we're paying now for, given extended terms on some of the vendor programs. On Texas and New York, we already had spent a lot of money.

Sanjay Shrestha: That's where you will still see new book of business materialize for us supporting that growth in 2025. Again, we feel very good about cash generation, strong visibility. This year is really about executing on this existing backlog for us to give us a robust performance in the electrolyzer business in 2024. Paul?

Sanjay: We see new book of business materialize for us supporting that growth in 2025 again, we feel very good about cash generation strong visibility. This year was really about executing on this existing backlog for us to give us a robust.

Sanjay: <unk> and the Electrolyze it business in 2024.

Paul Middleton: Yeah. I guess a couple of things. One, on the hydrogen investments that we have in the current plan is predominantly the retention and finalization of the Georgia plant that we've completed. It's the funding for the Louisiana program we have with Olin that we're developing, building, and rolling out. Then it's kind of residual projects that we had open at the end of last year that we're paying now for, given extended terms on some of the vendor programs. On Texas and New York, we already had spent a lot of money.

Paul B. Middleton: Yeah. And I guess a couple things. One, on the hydrogen investments that we have in the current plan is predominantly the retention and finalization of the Georgia plant that we've completed. It's the funding for the Louisiana program we have with Olin that we're developing, building, rolling out. And it's kind of residual projects that we had open at the end of last year that we're paying now for, given extended terms on some of the vendor programs. On Texas and New York, we already had spent a lot of money. We kind of tailed and tempered that in the near term until we turn on the right financing solutions. But given the money that we spent, it puts us in a good position that as we launch those, the new solution that we would launch would fund the majority, if not all, of that incremental spend. So, as we turn that on in the second half or into next year, we expect the majority of that to be covered with new financing.

Sanjay: On the on the hydrogen investments that we have in the current plan is predominantly the retention and finalization of the Georgia plant that we've completed.

Sanjay: Funding for the Louisiana program, we have with <unk> that we're developing building and rolling out and then it's.

Sanjay: Kind of residual projects that we had opened at the end of last year that were paying paying now for given its been determined on some of the vendor program on Texas and New York, We already had spent a lot of money.

Operator 2: We've kind of curtailed and tempered that in the near term until we turn on the right financing solutions. But given the money that we've spent, it puts us in a good position that as we launch those, the new solution that we would launch would fund the majority, if not all, of that incremental spend. So as we turn that on in the second half or on into next year, we expect the majority of that to be covered with new financing. I mean, we do have already, for example, in stock things like the rectifiers, Paul, as well as much of the electrolyzers, many of the electrolyzers, as well as the fact that Plug electrolyzer storage equipment. Yeah. There's a lot of things we already have. Perfect. Great, Connor. Thank you. Great. Eric, I think it's now I'm jumping ahead of you, Kevin. Go ahead.

Paul Middleton: We've kind of curtailed and tempered that in the near term until we turn on the right financing solutions. But given the money that we've spent, it puts us in a good position that as we launch those, the new solution that we would launch would fund the majority, if not all, of that incremental spend. So as we turn that on in the second half or on into next year, we expect the majority of that to be covered with new financing.

Sanjay: We kind of detailed and tempered that in the near term until we turn on the.

Sanjay: Right financing solutions, but given the money that we've spent that puts us in a good position as we launch those.

Sanjay: New solutions.

Sanjay: <unk> launched would fund the majority if not all of that incremental spend so as we turn it on in the second half or.

Next year, we expect the majority of that to be covered with with new financing.

Sanjay Shrestha: I mean, we do have already, for example, in stock things like the rectifiers, Paul, as well as much of the electrolyzers, many of the electrolyzers, as well as the fact that Plug electrolyzer storage equipment. Yeah. There's a lot of things we already have.

Andrew J. Marsh: We do have already, for example, in stock, things like the rectifiers, Paul, as well as the much of the electrolyzers, many of the electrolyzers as well as the fact of liquefiers, the Plug of liquefier. Storage equipment, yeah, there's a lot of things we already have.

Sanjay: Rectifiers, Paul as well as the much.

Sanjay: Much of the Electrolyzed than many of the Electrolyze yours as well as.

The fact of microfiber supply the liquid storage equipment, yes, there is a lot of things we already have.

Paul B. Middleton: Storage equipment, yeah, there's a lot of things we already have.

Skye Landon: Perfect. Great, Connor.

Skye Landon: Perfect. That's great color. Thank you.

Andy Marsh: Thank you. Great. Eric, I think it's now I'm jumping ahead of you, Kevin. Go ahead.

Andrew J. Marsh: Great. Eric, I think, is now jumping ahead of you, Kevin. Go ahead.

Operator: Before we do that, just to remind everyone that if you wanna be placed into the question queue, please press star one on your telephone keypad. Once again, that's star one to be placed in the question queue. Our next question is coming from Eric Stine from Craig Hallum. Your line is now live.

Operator 2: Before we do that, I just want to remind everyone that when we place into question Q, please press star 1 on your telephone keypad. Once again, that's star 1 to be placed into question Q. Our next question is coming from Eric Stine from Craig-Hallum. Your line is now live. Good morning, everyone. Hey. I'll just stick with 1 here towards the end of the call. Good morning, Eric. Eric, can appreciate, yeah. Good morning. Hey. For 2024, can appreciate not guiding given the focus more on the cash side and the expense side. Just curious, longer term, when you balance that versus so many commercial opportunities, what's going on with green hydrogen? When do you think that, what year? Is it 2025? Is it 2026?

Operator: Before we do that, I just want to remind everyone that when we place into question Q, please press star 1 on your telephone keypad. Once again, that's star 1 to be placed into question Q. Our next question is coming from Eric Stine from Craig-Hallum. Your line is now live.

Eric Stine: Good morning, everyone. Hey. I'll just stick with 1 here towards the end of the call.

Eric Stine: Good morning, everyone. Hey, I'll just stick with one here towards the end of the call.

Andy Marsh: Good morning, Eric. Eric, can appreciate,

Eric Andrew Stine: Good morning, Eric and appreciate yes, good morning, Hey, so for 'twenty four.

Andrew J. Marsh: Good morning, Eric.

Eric Stine: yeah. Good morning. Hey. For 2024, can appreciate not guiding given the focus more on the cash side and the expense side. Just curious, longer term, when you balance that versus so many commercial opportunities, what's going on with green hydrogen? When do you think that, what year? Is it 2025? Is it 2026? When you get back on that more traditional gross path, the one you've been on for several years, growing at a pretty rapid clip?

Eric Stine: Yeah, good morning. Hey. So for '24, I can appreciate not guiding given the focus more on the cash side and the expense side. But just curious, longer term, when you balance that versus so many commercial opportunities, what's going on with green hydrogen? When do you think that what year, is it '25, is it '26, when you get back on that more traditional growth path, the one you've been on for several years growing at a pretty rapid clip?

Eric Andrew Stine: I appreciate not guiding given.

Eric Andrew Stine: The focus more on the cash side and the expense side.

Eric Andrew Stine: But just curious longer term when you balance that versus so many commercial opportunities what's going on with green hydrogen.

When do you think that what year is it 25 is it 2006, when you get back on that more traditional growth.

Operator 2: When you get back on that more traditional gross path, the one you've been on for several years, growing at a pretty rapid clip? I'm going to let Paul take that, Eric. But I think Paul sent his remarks. We didn't expect zero growth this year. That was part of Paul's remarks. And I think if I was going to separate it out, the energy business, we expect to grow healthy this year. There's always certain risk and timing in the project deployments. And the application business, I would expect that come 2025, as we have focused on getting our costs in line this year. But I would expect 2025 and I'm going to let Paul, and I think he probably made reference to it in his comments, we would expect that things get looking back to traditional performance.

Eric Andrew Stine: Path <unk> been on for several years growing at a pretty pretty rapid clip.

Andrew J. Marsh: I'm going to let Paul take that, Eric. But I think Paul said in his remarks, we didn't expect zero growth this year. That was part of Paul's remarks. And I think if I was going to separate it out, the energy business, we expect to grow healthy this year. There's always certain risk and timing in the project deployments. In the application business, I would expect that come '25, as we have focused on getting our costs in line this year, but I would expect '25, and I'm going to let Paul, and I think he probably made reference to it in his comments, we would expect that things get looking back to traditional performance. But this year, I think in my opening comments, I really made it clear, we are looking to continue to expand and grow this business but at better pricing and better margins. Paul, do you want to add?

Andy Marsh: I'm going to let Paul take that, Eric. But I think Paul sent his remarks. We didn't expect zero growth this year. That was part of Paul's remarks. And I think if I was going to separate it out, the energy business, we expect to grow healthy this year. There's always certain risk and timing in the project deployments. And the application business, I would expect that come 2025, as we have focused on getting our costs in line this year. But I would expect 2025 and I'm going to let Paul, and I think he probably made reference to it in his comments, we would expect that things get looking back to traditional performance.

Eric Andrew Stine: I think Paul said in his remarks, we didn't expect the year over this year.

Eric Andrew Stine: That was part of Paul's remarks, and.

Paul: I think if I was going to separate out the energy business, we expect to grow healthy this year.

Paul: There's always certain risk and timing of project deployments in the application business.

Paul: I would expect that to come 25.

As we have.

Paul: <unk> on getting our cost in line this year, but I would expect 25% and I'm going to let Paul and I think he probably made reference to it in his comments.

Paul: Would expect that things get looking back to traditional performance.

Operator 2: But this year, I think in my opening comments, I really made it clear, we are looking to continue to expand and grow this business, but at better pricing and better margins. Paul, do you want to add? Yeah. I think everything you said is right, Andy. And I guess the only thing I would add is that we don't want to overpromise anything this year. But I certainly hope and believe that there's lots of upside opportunities. So as we work through the year and position ourselves for 2025, we think there's definitely a chance it can even though we're kind of tempering incremental growth, we think there's upside and certainly posturing towards even better growth as we move into 2025. So, Eric, if I think about the electrolyzer business, nobody has a facility like we have.

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

Paul: But.

Paul: This year.

I think in my opening comments.

Paul: I really made it clear.

Paul: We are looking to continue to expand and grow this business, but at better pricing better margins.

Paul: Paul do you want to add yes, I think everything you said is right in and I just I guess, the only thing I would add is that we don't want to over promise anything this year, but.

Paul do you want to add

Paul Middleton: Yeah. I think everything you said is right, Andy. And I guess the only thing I would add is that we don't want to overpromise anything this year. But I certainly hope and believe that there's lots of upside opportunities. So as we work through the year and position ourselves for 2025, we think there's definitely a chance it can even though we're kind of tempering incremental growth, we think there's upside and certainly posturing towards even better growth as we move into 2025. So, Eric, if I think about the electrolyzer business, nobody has a facility like we have.

Paul B. Middleton: Yeah. I think everything you said is right, Andy. And I guess the only thing I would add is that we don't want to over-promise anything this year. But I certainly hope and believe that there's lots of upside opportunities. So, as we work through the year and position ourselves for 2025, we think there's definitely a chance it can, even though we're kind of tempering incremental growth, we think there's upside and certainly posturing towards even better growth as we move into '25.

Paul: Certainly hope and believe that there's lots of upside opportunity. So.

As we work through the year and position ourselves for 2025.

Paul: We think.

Paul: Definitely the chance it can even though we are kind of tempering.

Paul: Incremental growth.

Paul: We think there is upside and certainly posturing towards even better.

Paul: Growth as we move into 'twenty five.

Andrew J. Marsh: So, Eric, if I think about the electrolyzer business, nobody has a facility like we have. When you look about the ability to build plants, and I think that Sanjay can tell you for folks that we've been doing the design with, our talent in the Netherlands, who have been deeply involved in this activity, really is well respected. And so, I believe we've made the investments in the infrastructure to support large-scale build-outs and that really puts us in a unique strategic position versus the competition out there.

Operator 2: When you look about the ability to build plants, and I think that Sanjay can tell you for folks that we've been doing the design with, our talent in the Netherlands who have been deeply involved in this activity really is well-respected. And so I believe we made the investments in the infrastructure to support large-scale buildouts. And that really puts us in a unique strategic position versus the competition out there. Okay. That's helpful. Thanks. All right. Thanks, Eric. Thank you. Next question is coming from Jordan Levy from Truist Securities. Your line is now live. Hey. I appreciate all the details. Maybe just to go back to kind of that last comment on the electrolyzer side, I recognize you've kind of built up the scale for the long term here. And it makes a lot of sense.

Paul Middleton: When you look about the ability to build plants, and I think that Sanjay can tell you for folks that we've been doing the design with, our talent in the Netherlands who have been deeply involved in this activity really is well-respected. And so I believe we made the investments in the infrastructure to support large-scale buildouts. And that really puts us in a unique strategic position versus the competition out there.

Eric Andrew Stine: When you look about the ability to build plans.

Eric Andrew Stine: Think that Sanjay can tell you for folks that we've been doing the design wins.

Eric Andrew Stine: Our talent in the Netherlands, who have been deeply involved in this activity.

Eric Andrew Stine: Really is well respected.

Eric Andrew Stine: So.

Eric Andrew Stine: Aye.

Eric Andrew Stine: I believe we made the investments in the.

Eric Andrew Stine: Infrastructure to support large scale build outs and that really puts us in a unique strategic position.

Eric Andrew Stine: Versus the competition.

Eric Stine: Okay. That's helpful. Thanks. All right.

Speaker Change: Okay. That's helpful. Thanks, Alright, thanks, Eric.

Eric Stine: Okay. That's helpful. Thanks.

Andy Marsh: Thanks, Eric.

Andrew J. Marsh: Alright. Thanks, Eric.

Operator: Thank you. Next question is coming from Jordan Levy from Truist Securities. Your line is now live.

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

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

Operator 2: But I'm just curious, as we think about going through this year, how do you and maybe this is for Sanjay, how do you think about optimizing volumes coming out of that plant while you're trying to reduce inventories? And sort of what is the right run rate at this point in time to balance that equation? Great question. That's something we've been spending, obviously, a lot of time thinking through, right? So this year, again, is really about executing on the backlog. And there is a lot of inventory already in-house, right? We're going to make sure that we use through that. So this is really a focus on just to think about it, right? We have quite a bit of 5-megawatt product that's already in the backlog, as I said. We have quite a bit of 1-megawatt product that's already in the backlog.

Jordan Levy: Out of that plant, while you are trying to reduce inventories and sort of what is the right run rate at this point in time.

Jordan Levy: That equation.

Sanjay Shrestha: Great question. That's something we've been spending, obviously, a lot of time thinking through, right? So this year, again, is really about executing on the backlog. And there is a lot of inventory already in-house, right? We're going to make sure that we use through that. So this is really a focus on just to think about it, right? We have quite a bit of 5-megawatt product that's already in the backlog, as I said. We have quite a bit of 1-megawatt product that's already in the backlog.

Sanjary Shrestha: Great question, that's something we've been spending obviously a lot of time thinking through right. So this year again, it's really about executing on the backlog. There was a lot of inventory already in house right, we're going to make sure that we use used through that so this is really a focus on just to think about it right. We have quite a bit of a five megawatt product that's already in the backlog as I said, we have quite a bit of one megawatt product thats already in the backlog and with some of the strategic partners. We also do some strategic stock sales right. So when you really think about is this share is not about optimizing the capacity utilization or the labor overhead per se, it's really more about using <unk>. We've already bought all the procurement that has been made to execute on this project right. The way you should think about it is Q1 is going to start out.

Sanjary Shrestha: Great question. That's something we've been spending obviously a lot of time thinking through, right? So, this year, again, it's really about executing on the backlog. And there is a lot of inventory already in-house, right? We're going to make sure that we use through that. So, this is really a focus on - just to think about it, right? There's a - we have quite a bit of 5-megawatt product that's already in the backlog, as I said. We have quite a bit of 1-megawatt product that's already in the backlog. And with some of the strategic partners, we also do some strategic stack sales, right? So, when you really think about it, this year is not about optimizing the capacity utilization or the labor overhead per se. It's really more about using what we've already bought, all the procurement that has been made to execute on this project, right?

Sanjay: There was a lot of inventory already in house right, we're going to make sure that we use used through that so this is really a focus on just to think about it right.

Sanjay: We have quite a bit of a five megawatt product that's already in the backlog as I said, we have quite a bit of one megawatt product thats already in the backlog and with some of the strategic partners. We also do some strategic stock sales right. So when you really think about is this share is not about optimizing the capacity utilization or the labor overhead per se, it's really more about using <unk>.

Operator 2: And with some of the strategic partners, we also do some strategic stack sales, right? So when you really think about it, this year is not about optimizing the capacity utilization or the labor overhead per se. It's really more about using what we've already bought, all the procurement that has been made to execute on these projects, right? So the way you should think about it is Q1 is going to start out somewhat similar to what the Q4 was like. But I think you will see a step change in that revenue as you go into Q2, Q3, and Q4. Number one, you will see cash generation out of this business in every single one of these quarters because we are burning through the existing inventory.

Sanjay Shrestha: And with some of the strategic partners, we also do some strategic stack sales, right? So when you really think about it, this year is not about optimizing the capacity utilization or the labor overhead per se. It's really more about using what we've already bought, all the procurement that has been made to execute on these projects, right? So the way you should think about it is Q1 is going to start out somewhat similar to what the Q4 was like. But I think you will see a step change in that revenue as you go into Q2, Q3, and Q4. Number one, you will see cash generation out of this business in every single one of these quarters because we are burning through the existing inventory.

Sanjay: We've already bought all the procurement that has been made to execute on this project right. The way you should think about it is Q1 is going to start out.

Sanjary Shrestha: The way you should think about it is Q1 is going to start out. Somewhat similar to what the Q4 was like but I think youll see a step change in that revenue as you go into Q2, Q3, and Q4 number one you will see cash generation out of this business and every single one of this quarters, because we are putting to the existing inventory and then you will actually see a step change not just in the revenue, but also in the margin. And as you start to go into the second half of the year as the cost comes down as we work on this new stack design that actually also allows us to lower the cost of that stack that will start helping in Q3 than cash generation with the improved margin profile, we will see a step change in Q3, another step change in Q4 as well for this year. So it's not about really.

Sanjary Shrestha: So, the way you should think about it is, Q1 is going to start out somewhat similar to what the Q4 was like, but I think you will see a step change in that revenue as you go into Q2, Q3, and Q4, number one. You will see cash generation out of this business in every single one of these quarters, because we are burning through the existing inventory. And then, you will actually see a step change, not just in the revenue, but also in the margin as you start to go into the second half of the year as the cost comes down, as we work on this new stack design that actually also allows us to lower the cost of that stack that will start helping in Q3. Then, cash generation with the improved margin profile will see a step change in Q3, another step change in Q4 as well for this year.

Sanjay: Somewhat similar to what the Q4 was like but I think youll see a step change in that revenue as you go into Q2, Q3, and Q4 number one you will see cash generation out of this business and every single one of this quarters, because we are putting to the existing inventory and then you will actually see a step change not just in the revenue, but also in the margin.

Operator 2: Then you will actually see a step change, not just in the revenue but also in the margin as you start to go into the second half of the year, as the cost comes down, as we work on this new stack design that actually also allows us to lower the cost of that stack that will start helping in Q3. Cash generation with the improved margin profile will see a step change in Q3, another step change in Q4 as well for this year. It's not about really needing to find more opportunity for electrolyzer business in 2024. It's really about working hand in hand with customer, making sure that we go from what we refer to as the factory acceptance test when the unit goes to the site. Then you got to do the site acceptance test.

Sanjay Shrestha: Then you will actually see a step change, not just in the revenue but also in the margin as you start to go into the second half of the year, as the cost comes down, as we work on this new stack design that actually also allows us to lower the cost of that stack that will start helping in Q3. Cash generation with the improved margin profile will see a step change in Q3, another step change in Q4 as well for this year. It's not about really needing to find more opportunity for electrolyzer business in 2024. It's really about working hand in hand with customer, making sure that we go from what we refer to as the factory acceptance test when the unit goes to the site. Then you got to do the site acceptance test.

Sanjay: And as you start to go into the second half of the year as the cost comes down as we work on this new stack design that actually also allows us to lower the cost of that stack that will start helping in Q3 than cash generation with the improved margin profile, we will see a step change in Q3, another step change in Q4 as well for this year. So it's not about really.

Sanjary Shrestha: So, it's not about really needing to find more opportunity for electrolyzer business in 2024. It's really about working hand in hand with customer, making sure that we go from what we refer to as the factory acceptance test, when the unit goes to the site, then you got to do the site acceptance test, and we've actually been having a lot of wonderful collaboration with a lot of different customers. In some cases, things have been challenging. We're learning together, but I think we've come a long way here, which I think puts us in a pretty good position to deliver what is going to be a great cash generation and a really changing margin trajectory as you go through the year in this business.

Needing to find more opportunity for electric lines of business in 2024, it's really about working hand in hand with customers, making sure that we go from what we refer to as the factory acceptance test when the unit goes to the site. Then you got to do the site acceptance test and we've actually been having a lot of wonderful collaboration with a lot of different customers in some cases things up.

Operator 2: And we've actually been having a lot of wonderful collaboration with a lot of different customers. In some cases, things have been challenging. We're learning together. But I think we've come a long way here, which I think puts us in a pretty good position to deliver what is going to be a great cash generation and a really changing margin trajectory as you go through the year in this business. That is not to say that we're not going to continue to do new bookings. You will see new bookings coming on our 5MW product line, both for the US as well as Europe, that will support growth in 2025. And then just think about the opportunity that we have with this basic engineering design package approaching 4GW.

Sanjay Shrestha: And we've actually been having a lot of wonderful collaboration with a lot of different customers. In some cases, things have been challenging. We're learning together. But I think we've come a long way here, which I think puts us in a pretty good position to deliver what is going to be a great cash generation and a really changing margin trajectory as you go through the year in this business. That is not to say that we're not going to continue to do new bookings. You will see new bookings coming on our 5MW product line, both for the US as well as Europe, that will support growth in 2025. And then just think about the opportunity that we have with this basic engineering design package approaching 4GW.

Sanjay: Been challenging we're learning together, but I think we've come a long way here, which I think puts us in a pretty good position to deliver what is going to be a great cash generation and a really changing margin trajectory as you go through the year in this business that is not to say that we're not going to continue to new bookings you will see new bookings come in on our five megawatt product line.

Been challenging we're learning together, but I think we've come a long way here, which I think puts us in a pretty good position to deliver what is going to be a great cash generation and a really changing margin trajectory as you go through the year in this business

Sanjey Shrestha: That is not to say that we're not going to do - continue to do new bookings. You will see new bookings coming on our 5-megawatt product line, both for U.S. as well as Europe. That will support growth in 2025. And then, just think about the opportunity that we have with this basic engineering design package approaching 4-gigawatts, that really puts us in a position where not just '25, but we're looking at very good backlog build going into '26 and beyond as well as making this a very stable, predictable, high margin as well as a cash-generating business for us.

Sanjay: Both for U S as well as Europe that will support growth in 2025, and then think about the opportunity that we have with this basic engineering design package approaching 40 gigawatt that really puts us in a position where not just 25, but we're looking at very good backlog build going into 'twenty, six and beyond as was making.

Operator 2: That really puts us in a position where not just 2025, but we're looking at very good backlog build going into 2026 and beyond as well, making this a very stable, predictable, high-margin as well as a cash-generating business for us. That's really helpful. Appreciate that. And then maybe just as a quick follow-up, not to belabor the timing on the DOE here, and I know there's only so much you guys can say, but I'm just trying to get a sense of kind of at this point in the cycle with the term sheet and all of that, is the ball sort of in the DOE's court at this point, or are you still at a point where you're in constant communication back and forth with them? I'm just curious to get where we are in the process.

Sanjay Shrestha: That really puts us in a position where not just 2025, but we're looking at very good backlog build going into 2026 and beyond as well, making this a very stable, predictable, high-margin as well as a cash-generating business for us.

Sanjay: So very stable predictable high margin as well as a cash generating business for us.

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

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

Speaker Change: I'm, just trying to get a sense of kind of at this point in the cycle.

Speaker Change: Term sheet and all of that is the ball sort of in the Dod's Court. At this point are you still at a point where you are.

Speaker Change: In constant communication back and forth with them I'm, just curious to get where we are in the process.

Andrew J. Marsh: So, as I mentioned in my comments, we do expect - this is March, and we do expect conditional approval by the end of this month. There'll be negotiations then. And I think our view is that by the end of the third quarter, those negotiation - it should be written and it should be finalized.

Operator 2: So as I mentioned in my comments, we do expect, this is March, and we do expect conditional approval by the end of this month. There'll be negotiations then. And I think our view is that by the end of Q3, it should be written, and it should be finalized. Thanks for all the details. Okay, Jordan. Thank you. Next question today is coming from Sherif El-Sabbahy from BTIG. Your line is now live. Hey. Thanks for squeezing me in. Good morning, Sherif. Morning, Andy. So I guess a bit of a nuanced question, but I noticed the average price for a fuel cell was significantly higher in Q4. So my question is, are we already seeing an impact from pricing efforts, or is that still more of a '24 story? And this quarter may have just been a mix shift to bigger fuel cells. Yeah.

Andy Marsh: So as I mentioned in my comments, we do expect, this is March, and we do expect conditional approval by the end of this month. There'll be negotiations then. And I think our view is that by the end of Q3, it should be written, and it should be finalized.

Speaker Change: As I.

Speaker Change: Mentioned in my comments, we do expect this is March and we do expect conditional approval.

Speaker Change: By the end of this month there will be negotiations then.

Speaker Change: And I think our view is that by the end of the third quarter.

Speaker Change: Negotiate it.

Speaker Change: It should be written and we should be finalized.

Jordan Levy: Thanks for all the details.

Andy Marsh: Okay, Jordan.

Andrew J. Marsh: Okay, Jordan.

Operator: Thank you. Next question today is coming from Sherif Elmaghrabi from BTIG. Your line is out live.

Operator: Thank you. Next question today is coming from Sherif El-Sabbahy from BTIG. Your line is now live.

Sherif El-Sabbahy: Hey. Thanks for squeezing me in.

Sherif Elmaghrabi: Hey, thanks for squeezing me in.

Andy Marsh: Good morning, Sherif.

Andrew J. Marsh: Morning, Sherif.

Sherif El-Sabbahy: Morning, Andy. So I guess a bit of a nuanced question, but I noticed the average price for a fuel cell was significantly higher in Q4. So my question is, are we already seeing an impact from pricing efforts, or is that still more of a '24 story? And this quarter may have just been a mix shift to bigger fuel cells.

Sherif Elmaghrabi: Good morning, Andy. So, I guess a bit of a nuanced question, but I noticed the average price for a fuel cell was significantly higher in Q4. So, my question is, are we already seeing an impact from pricing efforts, or is that still more of a '24 story and this quarter may have just been a mixed shift to bigger fuel cells?

Speaker Change: So I guess a bit of a nuanced question, but I noticed the average price for fuel cell was significantly higher in Q4.

Andy: My question is are we already seeing an impact from pricing efforts or is that still more of a 24 story and this quarter may have just been a mix shift to bigger fuel cells.

Paul Middleton: Yeah. In Q4, it was probably more mixed. We tend to sell a lot more Class 1s in Q4 often. So that helps in terms of the overall pricing structure. But I think as you look at 2024 is when you'll see more of that impact and probably more so in Q2, as Andy alluded to.

Paul B. Middleton: Yeah. In Q4, it was probably more mixed. We tend to sell a lot more class 1s in Q4 often, so that helps in terms of the overall pricing structure. But I think as you look at '24 is when you'll see more of that impact and probably more so in Q2, as Andy alluded to.

Operator 2: In Q4, it was probably more mixed. We tend to sell a lot more Class 1s in Q4 often. So that helps in terms of the overall pricing structure. But I think as you look at 2024 is when you'll see more of that impact and probably more so in Q2, as Andy alluded to. Okay. Got it. That's helpful, Connor. Thank you. Thank you. Next question is coming from Amit Dayal from H.C. Wainwright. Your line is now live. Thank you. Good morning, everyone. Good morning, Amit. Hi, Andy. Just one quick one from me on the DOE loan, right? So given the focus on the operational and margin improvements versus aggressive sales growth for 2024 and based on just your comments a little bit earlier, should we assume that the 2024 execution plan is not really dependent on this coming through for you in 2024, this facility?

Speaker Change: Structure.

Speaker Change: I think as you look at 'twenty four is when youll see more of that that impact and probably more so in Q2 as Andy alluded to.

Sherif Elmaghrabi: Okay. Got it. That's helpful color. Thank you.

Sherif El-Sabbahy: Okay. Got it. That's helpful, Connor. Thank you.

Operator: Thank you. Next question is coming from Amit Dayal from H.C. Wainwright. Your line is now live.

Operator: Thank you. Next question is coming in from Amit Dayal from H.C. Wainwright. Your line is now live.

Amit Dayal: Thank you. Good morning, everyone.

Andy Marsh: Good morning, Amit.

Andrew J. Marsh: Good morning, Amit.

Amit Dayal: Hi, Andy. Just one quick one from me on the DOE loan, right? So given the focus on the operational and margin improvements versus aggressive sales growth for 2024 and based on just your comments a little bit earlier, should we assume that the 2024 execution plan is not really dependent on this coming through for you in 2024, this facility? Just that would help basically give us a sense of what the cash needs just overall for the business that you can support with the available resources.

Amit Dayal: Hi, Andy. Just one quick one from me on the DOE loan, right? So, given the focus on the operational and margin improvements versus aggressive sales growth for 2024, and based on just your comments a little bit earlier, should we assume that the 2024 execution plan is not really dependent on this coming through for you in 2024, this facility? That would help basically give us a sense of what the cash needs just overall for the business that you can support with the available resources.

Amit Dayal: The operational and margin improvements versus aggressive seems includes between greenfield and based on this year.

Amit Dayal: Comments.

Amit Dayal: Should we assume that.

Amit Dayal: Tony any execution plan is not really dependent on this coming through for you in 2020 for this facility.

Amit Dayal: Just basically give us a sense of.

Operator 2: Just that would help basically give us a sense of what the cash needs just overall for the business that you can support with the available resources. Yeah. So Amit, operationally, we're not dependent upon the DOE loan for 2024. We will, once the DOE loan is finalized, move ahead more aggressively, especially in our Texas activity. And that because we've already made significant investments in Texas, we see opportunities to even have some capital come in from the DOE to support that activity. So we look at it a lot of the when you think about 80/20, we feel a good deal. For example, in Texas, we've already made the capital investments. Understood, Andy. That's all I have. Thank you. Okay. Thanks, Amit. Thank you. Next question is coming from Ameet Thakkar from BMO Capital Markets. Your line is now live. Hi. Good morning. Thanks for taking my question.

Amit Dayal: What the cash.

Amit Dayal: Cash needs.

Tony: For the business.

Tony: You can support with the available resources.

Andy Marsh: Yeah. So Amit, operationally, we're not dependent upon the DOE loan for 2024. We will, once the DOE loan is finalized, move ahead more aggressively, especially in our Texas activity. And that because we've already made significant investments in Texas, we see opportunities to even have some capital come in from the DOE to support that activity. So we look at it a lot of the when you think about 80/20, we feel a good deal. For example, in Texas, we've already made the capital investments.

Andrew J. Marsh: Yeah. So, Amit, operationally, we're not dependent upon the DOE loan for '24. We will, once the DOE loan is finalized, move ahead more aggressively, especially in our Texas activity, and that - because we've already made significant investments in Texas, we see opportunities to even have some capital come in from the DOE to support that activity. So, we look at it, a lot of the - when you think about 80-20, we feel a good deal. For example, in Texas, we've already made the capital investments.

Speaker Change: Sure.

Operationally, we're not dependent upon the Doe loan for 24.

Speaker Change: We will want to do loans finalized.

Speaker Change: Move ahead, more aggressively, especially in our Texas activity and that.

Speaker Change: Because we've already made significant investments in Texas.

Speaker Change: We see opportunities even.

Speaker Change: Some caf will come in from the deal.

Speaker Change: For that activity.

Speaker Change: So.

Speaker Change: We look at it.

Speaker Change: A lot of the when you think about 80 20.

Speaker Change: We feel a good deal for example in Texas, we've already made the capital investments.

Amit Dayal: Understood, Andy. That's all I have.

Speaker Change: Understood I think that's all thank you okay. Thanks, Amit.

Amit Dayal: Understood, Andy. That's all I have. Thank you.

Andy Marsh: Thank you. Okay. Thanks, Amit.

Operator: Thank you. Next question is coming from Ameet Thakkar from BMO Capital Markets. Your line is now live.

Andrew J. Marsh: Thanks, Amit.

Operator: Thank you. Next question is coming from Ameet Thakkar from BMO Capital Markets. Your line is now live.

Ameet Thakkar: Hi. Good morning. Thanks for taking my question. Thank you for all the detail on the cash plan. I guess just from a starting point, what sort of kind of revenue in 2024 and gross margin in 2024 is that promised time?

Ameet Thakkar: Hi, good morning. Thanks for taking my question. Good morning.

Ameet Thakkar: Hi, good morning. Thanks for taking my question.

Andrew J. Marsh: Good morning.

Operator 2: Thank you for all the detail on the cash plan. I guess just from a starting point, what sort of kind of revenue in 2024 and gross margin in 2024 is that promised time? Go ahead, Paul. We haven't really given specific numbers, I guess, to be candid with you. I think what we've alluded to is that we definitely expect growth off of 2023. You'll definitely see growth off the revenue numbers, and obviously, we're anticipating pretty significant improvement on the margin front. That's where we stand. Okay. Since we're kind of waiting on the DOE to move forward with Texas and New York, I guess, is there any kind of impact to your fuel margins in 2024 from any off-takers that won't be getting fuel from those plants? No. I'll let Sanjay take that.

Ameet Thakkar: Good morning. And thank you for all the detail on the cash burn. I guess just from a starting point, what sort of kind of revenue in '24 and gross margin in '24 is that premised on?

Amit Dayal: And thank you for all the detail on the cash then I guess just from a starting point, what sort of kind of revenue and 24% gross margin and 24 is that from a pump.

Andy Marsh: Go ahead, Paul.

Andrew J. Marsh: Go ahead, Paul.

Paul Middleton: We haven't really given specific numbers, I guess, to be candid with you. I think what we've alluded to is that we definitely expect growth off of 2023. You'll definitely see growth off the revenue numbers, and obviously, we're anticipating pretty significant improvement on the margin front. That's where we stand.

Paul B. Middleton: We haven't really given specific numbers, I guess, to be candid with you. I think what we've alluded to is that we definitely expect growth off of 2023. You'll definitely see growth off the revenue numbers and you're obviously - we're anticipating pretty significant improvement on the margin front. So, that's where we stand.

Paul: What we've alluded to is that we definitely expect growth off of 2023.

Paul: Youll see youll definitely see growth off the revenue numbers and obviously, we're anticipating pretty.

Paul: Significant improvement on the margin front so.

Paul: Sure.

Speaker Change: That's where we stand.

Ameet Thakkar: Okay. Since we're kind of waiting on the DOE to move forward with Texas and New York, I guess, is there any kind of impact to your fuel margins in 2024 from any off-takers that won't be getting fuel from those plants?

Ameet Thakkar: Okay. And then, since like we're kind of waiting on the DOE to move forward with Texas and New York, I guess, is there any kind of impact to your fuel margins in '24 from any off-takers that won't be getting fuel from those plants?

Speaker Change: We're kind of waiting on the dose to move forward with Texas, and New York I guess.

Speaker Change: Is there any kind of impact here.

Fuel margins in 'twenty four from any off takers that wont be getting fuel from those plants.

Andy Marsh: No. I'll let Sanjay take that. But no, that's not in the plan.

Andrew J. Marsh: No. I'll let Sajay take that, but no, that's not in the plan.

Operator 2: But no, that's not in the plan. No. I mean, we don't have any of that impact whatsoever in 2024. But there are off-takers there for both those plants? Yeah. Again, I think the way we've been focused on, right, is for example, I think this was a question we used to get a lot, "How many off-takers do you guys have in Georgia?" And we've always said, "Part of the reason to build Georgia was for us to really help the North American network, second, really lower the cost more than really trying to optimize the price," right? So that's always been our focus. But when you think about our plant in Texas and New York, there's a lot of discussion. In the plant in Texas, there is some offtake, right?

Sanjay Shrestha: Ameet, we don't have any of that impact whatsoever in '24.

Ameet Thakkar: No. I mean, we don't have any of that impact whatsoever in 2024. But there are off-takers there for both those plants?

Sanjay: In 2012.

Ameet Thakkar: But there are off-takers here for both those plants?

Sanjay: Both those plants.

Sanjay Shrestha: Yeah. Again, I think the way we've been focused on, right, is for example, I think this was a question we used to get a lot, "How many off-takers do you guys have in Georgia?" And we've always said, "Part of the reason to build Georgia was for us to really help the North American network, second, really lower the cost more than really trying to optimize the price," right? So that's always been our focus. But when you think about our plant in Texas and New York, there's a lot of discussion. In the plant in Texas, there is some offtake, right? But that doesn't kick in in 2024, which is why you should actually see no impact whatsoever from that.

Sanjay Shrestha: Yeah. Again, I think the way we've been focused on, right, is like, for example, I think this was a question we used to get a lot, how many off-takers do you guys have in Georgia? And we've always said, for the reason to build Georgia was for us to really help the North American network. Second, really lower the cost more than really trying to optimize the price, right? So, that's always been our focus. But when you think about our plant in Texas and New York, there's a lot of discussion in the plant in Texas. There was some off take, right, but that doesn't kick-in in 2024, which is why you should actually see no impact whatsoever from that.

Sanjay: <unk> North American network.

Sanjay: Really lower the cost more than really trying to optimize the price right. So that's always been our focus but when you think about an hour.

Sanjay: In Texas, and New York, There's a lot of discussion in the plant in Texas. There was some off take rate, but that doesn't kick in in 2024, which is why you should actually see no impact whatsoever from that.

Operator 2: But that doesn't kick in in 2024, which is why you should actually see no impact whatsoever from that. Thank you. Thank you, Amit. Thank you. Next question is coming from Dushyant Ailani from Jefferies. Your line is now live. Hi. Thanks for squeezing me in. I just had one quick question on the electrolyzer stack cost cutting that you guys mentioned. Could you talk a little bit about where you are seeing those cost cuts? And yeah, maybe just walk us through that a little bit. Yeah. So we mentioned cost cuts. It's really manufacturing process changes to allow the stack to be produced in a much simpler fashion. So I think if you've done it to our facility, it actually helps increase the time for manufacturing the stack.

Ameet Thakkar: Thank you.

Andy Marsh: Thank you, Amit.

Andrew J. Marsh: Thank you, Ameet.

Operator: Thank you. Next question is coming from Dushyant Ailani from Jefferies. Your line is now live.

Speaker Change: <unk> from Jefferies. Your line is that life.

Dushyant Ailani: Hi. Thanks for squeezing me in. I just had one quick question on the electrolyzer stack cost cutting that you guys mentioned. Could you talk a little bit about where you are seeing those cost cuts? And yeah, maybe just walk us through that a little bit.

Dushyant Ailani: Thanks for squeezing me in. I just had one quick question on the electrolysis stacks, the cost cutting that you guys mentioned. Could you talk a little bit about where you're seeing those cost cuts and maybe just walk us through that a little bit?

Well, let's let the stacks.

Speaker Change: Got it.

Jefferies: You guys mentioned could you talk a little bit about where you are seeing those cost cuts.

Speaker Change: Maybe just walk us through that a little bit.

Andy Marsh: Yeah. So we mentioned cost cuts. It's really manufacturing process changes to allow the stack to be produced in a much simpler fashion. So I think if you've done it to our facility, it actually helps increase the time for manufacturing the stack. And it's not dependent upon suppliers, and it's dependent upon process improvements that we've made, which really simplifies the stack and has some really dramatic cost reductions on the level of materials we require and the assembly technique.

Andrew J. Marsh: Yeah. So, we mentioned cost cuts. It's really manufacturing process changes to allow the stack to be produced in a much simpler fashion. So, I think if you've done a tour of a facility, it actually helps increase the time for manufacturing the stack. And it's really not dependent upon suppliers, and it's dependent upon process improvements that we've made, which really simplifies the stack and has some really dramatic cost reductions on the level of materials we require and the assembly technique.

Speaker Change: We mentioned cost cuts.

Speaker Change: Really manufacturing process changes to allow the stack to allow the stack to be produced in a much simpler fashion. So I think if you have done a tour our facility.

Speaker Change: It actually helps increase the time time for manufacturing stack and it's really it's not dependent upon suppliers and it's dependent upon process improvements that we've made which really simplifies the stack and has some really dramatic cost reductions.

Operator 2: And it's not dependent upon suppliers, and it's dependent upon process improvements that we've made, which really simplifies the stack and has some really dramatic cost reductions on the level of materials we require and the assembly technique. Thank you. You're welcome. Thank you. Next question is coming from Andrew Percoco from Morgan Stanley. Your line is now live. Great. Thanks so much for taking the question and squeezing me in. One quick question. Good morning, Andrew. Good morning, Andy. How are you? Okay. Great. Well, just to maybe start out with a housekeeping item, product gross margins in the fourth quarter came down quite a bit. Was there any non-cash impact embedded in that number in the fourth quarter? And then I have a follow-up after that. Go ahead, Paul. Yeah. There was probably. I'm going to estimate roughly $60 million or so non-cash valuation adjustments.

So on.

Speaker Change: The level of materials, we require and the assembly technique.

Dushyant Ailani: Thank you.

Andy Marsh: You're welcome.

Andrew J. Marsh: You're welcome.

Operator: Thank you. Next question is coming from Andrew Percoco from Morgan Stanley. Your line is now live.

Andrew Percoco: Great. Thanks so much for taking the question and squeezing me in.

Andrew Percoco: Great. Thanks so much for taking the question and squeezing me in. One quick question. Good morning, Andrew. Good morning, Andy. How are you? Okay. Great. Well, just to maybe start out with a housekeeping item, product gross margins in the fourth quarter came down quite a bit. Was there any non-cash impact embedded in that number in the fourth quarter? And then I have a follow-up after that.

Andrew J. Marsh: Good morning, Andrew.

Andrew Percoco: Good morning, Andy how are you okay.

Andrew Percoco: Good morning, Andy. How are you?

Andrew J. Marsh: Okay.

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

Andrew: Product gross margins in the fourth quarter came down quite a bit was there any noncash impact embedded in that number in the fourth quarter and then I.

Andrew: I have a follow up after that.

Andy Marsh: Go ahead, Paul.

Andy: Go ahead, Paul Yes, there was.

Andrew J. Marsh: Go ahead, Paul.

Paul Middleton: Yeah. There was probably. I'm going to estimate roughly $60 million or so non-cash valuation adjustments. That's a gap basis. Obviously, we still have those assets, and our intentions are to leverage them into cash in 2024. So that was part of it. And then the other part was lower absorption. When you have on the equipment side, when you have that dynamic, that affects equipment margins. And as we've announced, a lot of those restructuring activities actually were specifically targeted towards labor and overhead in the production activities. And so that should yield benefits as we move into 2024. So I guess those are some of the key things in relation to your question on equipment margins.

Paul B. Middleton: Yeah, there was probably, I'm going to estimate, roughly $60 million or so non-cash evaluation adjustments. That's a GAAP basis. Obviously, we still have those assets, and our intentions are to leverage them into cash in 2024. So, that was part of it. And then, the other part was lower absorption. When you have - on the equipment side, when you have that dynamic, that affects equipment margins. And as we've announced, a lot of those restructuring activities actually were specifically targeted towards labor and overhead in the production activities. And so, that should yield benefits as we move into '24. So, that was - I guess those are some of the key things in relation to your question on equipment margins.

Paul: Probably I'm going to estimate roughly $60 million or so noncash valuation adjustments.

Operator 2: That's a gap basis. Obviously, we still have those assets, and our intentions are to leverage them into cash in 2024. So that was part of it. And then the other part was lower absorption. When you have on the equipment side, when you have that dynamic, that affects equipment margins. And as we've announced, a lot of those restructuring activities actually were specifically targeted towards labor and overhead in the production activities. And so that should yield benefits as we move into 2024. So I guess those are some of the key things in relation to your question on equipment margins. Got it. Okay. That's helpful. And then as my follow-up, and I think most of my other questions related to kind of cash flow and balance sheet dynamics have been answered. So I'll just maybe shift to a longer-term question on the PPA environment.

Paul: Thats, a GAAP basis, obviously, we still have those assets and our intentions are to leverage them into cash in 2024, but so that was part of it and then the other part.

Paul: Does lower absorption.

Paul: When you have.

Paul: On the equipment side.

Paul: When you have that dynamic.

Paul: It affects equipment margins.

Paul: And.

Paul: As we've announced a lot of those restructuring activities actually were specifically targeted towards.

Paul: Labor and overhead in the production activities and so that should yield benefits as we move into 'twenty four.

Andrew Percoco: Got it. Okay, that's helpful. And then, as my follow-up, and I think most of my other questions related to kind of cash flow and balance sheet dynamics have been answered. So, I'll just maybe shift to a longer-term question on the PPA environment. I think, as others have already noted on the call, there's a lot of demand for clean electricity, AI data centers, other electrification efforts. And I think what you're seeing across the developer landscape is that returns are actually increasing in some cases, PPA prices are increasing as a result. What does that mean for your unit economics of your business beyond 2024 and 2025? I know you secure a lot of your PPAs for the plants that you're working on today, but does the unit economics of green hydrogen in the U.S. work if PPA prices don't fall from here?

Paul: I guess those are some of the key things in relation to your question on equipment margins.

Andrew Percoco: Got it. Okay. That's helpful. And then as my follow-up, and I think most of my other questions related to kind of cash flow and balance sheet dynamics have been answered. So I'll just maybe shift to a longer-term question on the PPA environment. I think as others have already noted on the call, there's a lot of demand for clean electricity, AI data centers, other electrification efforts. And I think what you're seeing across the developer landscape is that returns are actually increasing. In some cases, PPA prices are increasing as a result. What does that mean for the unit economics of your business beyond 2024 and 2025? I know you've secured a lot of your PPAs for the plants that you're working on today. But do the unit economics of green hydrogen in the US work if PPA prices don't fall from here?

Speaker Change: Got it okay. That's helpful.

Speaker Change: And then as my follow up and I think most of my other questions related to kind of cash flow and balance sheet dynamics have been answered. So I'll, just maybe shift to a longer term question on.

Speaker Change: The PPA environment, I think as others have already noted on the call. There's a lot of demand for clean electricity.

Operator 2: I think as others have already noted on the call, there's a lot of demand for clean electricity, AI data centers, other electrification efforts. And I think what you're seeing across the developer landscape is that returns are actually increasing. In some cases, PPA prices are increasing as a result. What does that mean for the unit economics of your business beyond 2024 and 2025? I know you've secured a lot of your PPAs for the plants that you're working on today. But do the unit economics of green hydrogen in the US work if PPA prices don't fall from here? Andrew, maybe Andy, I can take that one. Yeah. Go ahead, Sanjay. So Andrew, I think we're glad that we've secured the PPA pricing in Texas, as you know, right?

Speaker Change: AI data centers other electrification efforts and I think what you are seeing across the developer landscape is that returns are actually increasing in some cases PPA prices are increasing as a result.

Speaker Change: What does that mean for your debt.

Speaker Change: Unit economics that in your business beyond 2024, and 2025 I know you secure a lot of your PPA for the plant that you're working on today.

Speaker Change: The unit economics of Green hydrogen in the U S, where if PPA prices don't fall from here.

Sanjay Shrestha: Andrew, maybe Andy, I can take that one.

Sanjay Shrestha: Andrew - maybe, Andy, I can take that one. Yeah, go ahead, Sanjay.

Sanjay Shrestha: Andrew - maybe, Andy, I can take that one.

Andy Marsh: Yeah. Go ahead, Sanjay.

Andrew J. Marsh: Yeah, go ahead, Sanjay.

Sanjay Shrestha: So Andrew, I think we're glad that we've secured the PPA pricing in Texas, as you know, right? I think even in Georgia, given how we have that deal with sort of the overall natural gas price market dynamics, that power pricing is playing out pretty well in our favor as well, right? We have some other discussion where power prices are going to actually remain pretty attractive in some of the even other development effort we still have going on. Obviously, the focus here is, as we've already talked about, what we're trying to do in 2024. We're prioritizing two key projects here. You really think about all this in the second half of 2025. Having said that, we've always said, as long as the power prices stay between that $30 to 40 per megawatt-hour level, all in, fully loaded, green hydrogen economics work.

Sanjay Shrestha: So Andrew I think we're good. Glad that will secure the PPA pricing in Texas as you know and I think even in Georgia, given I think we have that deal with sort of the overall natural gas price market dynamics that actually PPA power pricing is playing out pretty well in our favor as well right. So we have some other discussion where. Power prices are are going to actually remained pretty attractive and some of the even other development. Therefore, we still have going on obviously the focus here is as we've already talked about what we're trying to do in 24 hour prioritizing two key projects here and then you really think about all of this in the second half of 2025, having said that we've always said right as long.

Sanjay Shrestha: So, Andrew, I think we're glad that we've secured the PPA pricing in Texas, as you know, right? And I think even in Georgia, given I think how we have that deal with sort of the overall natural gas price market dynamics that actually PPA - that power pricing is playing out pretty well in our favor as well. So, we have some other discussion where power prices are going to actually remain pretty attractive in some of the even other development effort we still have going on. Obviously, the focus here is, we've already talked about what we're trying to do in '24, how we're prioritizing two key projects here, and then you really think about all this in the second half of 2025.

Glad that will secure the PPA pricing in Texas as you know and I think even in Georgia, given I think we have that deal with sort of the overall natural gas price market dynamics that actually PPA power pricing is playing out pretty well in our favor as well right. So we have some other discussion where.

Operator 2: I think even in Georgia, given how we have that deal with sort of the overall natural gas price market dynamics, that power pricing is playing out pretty well in our favor as well, right? We have some other discussion where power prices are going to actually remain pretty attractive in some of the even other development effort we still have going on. Obviously, the focus here is, as we've already talked about, what we're trying to do in 2024. We're prioritizing two key projects here. You really think about all this in the second half of 2025. Having said that, we've always said, as long as the power prices stay between that $30 to 40 per megawatt-hour level, all in, fully loaded, green hydrogen economics work.

Speaker Change: Power prices are are going to actually remained pretty attractive and some of the even other development. Therefore, we still have going on obviously the focus here is as we've already talked about what we're trying to do in 24 hour prioritizing two key projects here and then you really think about all of this in the second half of 2025, having said that we've always said right as long.

Sanjay Shrestha: having said that we've always said right as long. The power prices stay between that $30 to $40 a megawatt hour level. All in fully loaded green hydrogen economics work in la. And I think and we've all been through this cyclic. Cyclicality of the power market right, where the rates impacts have had impacts on the <unk> cost of electricity, but directionally. We believe that the power prices. In any given year it could go up in any given year. It could go down but directionally are you still is it means that the power prices probably will continue to go down but does it have to go down dramatically from these levels here. The green hydrogen economics to make sense in the U S probably not that's number one and number two we also have been very thoughtful about really being in the right location right opportunity set as we think about some of these green hydrogen opportunity also in Europe, as well, where we can leverage low cost hydro complementing that with low cost renewable electricity. So.

Sanjay Shrestha: Having said that, we've always said, right, as long as the power prices stay between that $30 to $40 a megawatt hour level, all in fully-loaded, green hydrogen economics work. And look, and I think, Andrew, we've all been through this cyclicality of the power market, right, where the rates impacts have had impact from the levelized cost of electricity. But directionally, we believe that the power prices, in any given year, it could go up, any given year, it could go down. But directionally, our view still remains that the power prices probably will continue to go down. But does it have to go down dramatically from those levels here for the green hydrogen economics to make sense in the U.S.? Probably not. That's number one.

Speaker Change: The power prices stay between that $30 to $40 a megawatt hour level.

Speaker Change: All in fully loaded green hydrogen economics work in la.

Operator 2: And look, and I think, Andrew, we've all been through this cyclicality of the power market, right, where the rates' impacts have had impact from the levelized cost of electricity. But directionally, we believe that the power prices in any given year, it could go up. Any given year, it could go down. But directionally, our view still remains that the power prices probably will continue to go down. But does it have to go down dramatically from these levels here for the green hydrogen economics to make sense in the US? Probably not. That's number one. And number two, we also have been very thoughtful about really being in the right location, right opportunity set as we think about some of this green hydrogen opportunity also in Europe as well, where we can leverage low-cost hydro, complementing that with low-cost renewable electricity.

Sanjay Shrestha: And look, and I think, Andrew, we've all been through this cyclicality of the power market, right, where the rates' impacts have had impact from the levelized cost of electricity. But directionally, we believe that the power prices in any given year, it could go up. Any given year, it could go down. But directionally, our view still remains that the power prices probably will continue to go down. But does it have to go down dramatically from these levels here for the green hydrogen economics to make sense in the US? Probably not. That's number one. And number two, we also have been very thoughtful about really being in the right location, right opportunity set as we think about some of this green hydrogen opportunity also in Europe as well, where we can leverage low-cost hydro, complementing that with low-cost renewable electricity.

And I think and we've all been through this cyclic.

Speaker Change: Cyclicality of the power market right, where the rates impacts have had impacts on the <unk> cost of electricity, but directionally.

Speaker Change: We believe that the power prices.

Speaker Change: In any given year it could go up in any given year. It could go down but directionally are you still is it means that the power prices probably will continue to go down but does it have to go down dramatically from these levels here.

Speaker Change: The green hydrogen economics to make sense in the U S probably not that's number one and number two we also have been very thoughtful about really being in the right location right opportunity set as we think about some of these green hydrogen opportunity also in Europe, as well, where we can leverage low cost hydro complementing that with low cost renewable electricity. So.

Sanjay Shrestha: And number two, we also have been very thoughtful about really being in the right location, right opportunity set as we think about some of this green hydrogen opportunity, also in Europe as well, where we can leverage low-cost hydro, complementing that with low-cost renewable electricity. So, look, and if there is any relief from the inflationary environment, if anything, you will probably start to see the cost for the wind turbine also go down at some point, that should have a benefit. And that hopefully is enough to offset the rise in the interest rate environment and the return hurdle that some of these developers are looking for, right?

Operator 2: So look, and if there is any relief from the inflationary environment, if anything, you will probably start to see the cost for the wind turbine also go down at some point. That should have a benefit. And that hopefully is enough to offset the rise in the interest rate environment and the return hurdle that some of these developers are looking for, right? So we really don't need the price to go down a lot. But again, our sort of working view at this point in time is when you really think another five years out, directionally, levelized cost of renewable electricity should still continue to go down, but certainly not at the rate that we've seen in the last 10 years. And Andrew, I would just add that a bigger picture, I've mentioned work we've done with the leading consulting firm for hydrogen.

Sanjay Shrestha: So look, and if there is any relief from the inflationary environment, if anything, you will probably start to see the cost for the wind turbine also go down at some point. That should have a benefit. And that hopefully is enough to offset the rise in the interest rate environment and the return hurdle that some of these developers are looking for, right? So we really don't need the price to go down a lot. But again, our sort of working view at this point in time is when you really think another five years out, directionally, levelized cost of renewable electricity should still continue to go down, but certainly not at the rate that we've seen in the last 10 years. And Andrew, I would just add that a bigger picture, I've mentioned work we've done with the leading consulting firm for hydrogen.

Speaker Change: Look I think there was any relief from the inflationary environment, if anything it will probably start to see the cost of the wind turbine also go down at some point that should have a benefit and that hopefully is enough to offset the rise in the interest rate environment and the return hurdle. That's some of those developments are looking for right. So we really don't need the price to go down a lot but again.

Look I think there was any relief from the inflationary environment, if anything it will probably start to see the cost of the wind turbine also go down at some point that should have a benefit and that hopefully is enough to offset the rise in the interest rate environment and the return hurdle. That's some of those developments are looking for right.

Sanjay Shrestha: So, we really don't need the price to go down a lot. But again, our sort of working view at this point in time is when you really think another five years out directionally levelized cost of renewable electricity should still continue to go down. But certainly not at the rate that we've seen in the last 10 years.

Speaker Change: Our sort of the working view at this point in time is when you really take another five years out directionally localized cost of renewable electricity should still continue to go down, but certainly not at the rate that we've seen in the last 10 years and Andrew I would just add that.

Our sort of the working view at this point in time is when you really take another five years out directionally localized cost of renewable electricity should still continue to go down, but certainly not at the rate that we've seen in the last 10 years

Andrew J. Marsh: And Andrew, I would just add that a bigger picture. I've mentioned work we've done with the leading consulting firm for hydrogen. And they'll tell you they expect in the U.S. at least 50% of hydrogen will be green in 2030. And as you know in Europe, they have very, very stringent goals where I think the number is 43% by 2030 has to be green. So, there are other dynamics that come into play.

Speaker Change: A bigger picture I've mentioned work we've.

Speaker Change: Don with the leading consulting firm for hydrogen and they'll tell you. They expect in the U S. At least 50% hydrogen will be green in 2030.

Operator 2: And they'll tell you they expect in the US, at least 50% of hydrogen will be green in 2030. And as you know, in Europe, they have very, very stringent goals where I think the number is 43% by 2030 has to be green. So there are other dynamics that come into play. Great. Thanks so much. Okay. Thanks, Andrew. Thank you. Next question is coming from Kashy Harrison from Piper Sandler. Your line is now live. Good morning, everyone. And appreciate you getting me on the call here. Good morning, Kashy. Yeah. Good morning, Andy. So I guess my first one, you're highlighting $75 million of expected savings in 2024. And I fully appreciate that. Reductions are extremely difficult for the people involved. So not trying to, well, basically, what I'm asking is, why aren't you cutting something more aggressive?

Sanjay Shrestha: And they'll tell you they expect in the US, at least 50% of hydrogen will be green in 2030. And as you know, in Europe, they have very, very stringent goals where I think the number is 43% by 2030 has to be green. So there are other dynamics that come into play.

Speaker Change: And as you know in Europe, they have very very stringent goals were.

Speaker Change: The number is 43% by 2030 has to be green so.

Speaker Change: So there are other dynamics that come into play.

Andrew Percoco: Great. Thanks so much.

Speaker Change: Great. Thanks, so much okay. Thanks, Andrew.

Andrew Percoco: Great. Thanks so much.

Andy Marsh: Okay. Thanks, Andrew.

Andrew J. Marsh: Okay. Thanks, Andrew.

Operator: Thank you. Next question is coming from Kashy Harrison from Piper Sandler. Your line is now live.

Kashy Harrison: Good morning, everyone. And appreciate you getting me on the call here.

Kashy Harrison: Good morning, everyone, and appreciate you getting me on the call here.

Kasope Oladipo Harrison: Good morning, everyone and I appreciate you getting me on the call here.

Andy Marsh: Good morning, Kashy.

Andrew J. Marsh: Good morning, Kashy.

Kashy Harrison: Yeah. Good morning, Andy. So I guess my first one, you're highlighting $75 million of expected savings in 2024. And I fully appreciate that. Reductions are extremely difficult for the people involved. So not trying to, well, basically, what I'm asking is, why aren't you cutting something more aggressive? Why aren't you targeting something more aggressive? Because your OpEx at this point is 42% of revenue, and that's up from 22% in 2019. So why aren't you trying to cut OpEx in half this year?

Kashy Harrison: Yeah, good morning, Andy. So, I guess my first one, you're highlighting $75 million of expected savings in 2024. And I fully appreciate that reductions are extremely difficult for the people involved. So, not trying to be - basically what I'm asking is why aren't you cutting something more aggressive? Why aren't you targeting something more aggressive? Because your Opex at this point is 42% of revenues, and that's up from 22% in 2019. And so, why aren't you trying to cut Opex in half this year?

Kasope Oladipo Harrison: Youre highlighting $75 million of expected savings in 2024.

Kasope Oladipo Harrison: And I fully appreciate that reductions are extremely difficult for the people involved so not not tried to be.

Kasope Oladipo Harrison: Not trying to.

Speaker Change: Well basically what I'm asking is why aren't you cutting something more aggressive why arent you targeting something more aggressive because your opex at this point is 42% of revenue.

Operator 2: Why aren't you targeting something more aggressive? Because your OpEx at this point is 42% of revenue, and that's up from 22% in 2019. So why aren't you trying to cut OpEx in half this year? I think, Kashy, because it may look good for some folks in 2024, but it'll be a huge mistake in 2028. Those same folks are critical for us to achieving the gross margin targets. Those same folks are critical for improving our customer experience. Those same folks are important to building out plants like Texas. We modeled this so that the company can become operationally cash flow positive in 2025. But what was that chainsaw guy at chainsaw Jack? I don't think he built race businesses. Business is much more than the Excel spreadsheet that you put in front of yourself. Yep. Fair enough.

Speaker Change: And that's up from 22% in 2019, and so why aren't you trying to cut opex and half this year.

Paul Middleton: I think, Kashy, because it may look good for some folks in 2024, but it'll be a huge mistake in 2028. Those same folks are critical for us to achieving the gross margin targets. Those same folks are critical for improving our customer experience. Those same folks are important to building out plants like Texas. We modeled this so that the company can become operationally cash flow positive in 2025. But what was that chainsaw guy at chainsaw Jack? I don't think he built race businesses. Business is much more than the Excel spreadsheet that you put in front of yourself.

Andrew J. Marsh: I think, Kashy, because it may look good for some folks in 2024, but it will be a huge mistake in 2028. Those same folks are critical for us to achieving the gross margin targets. Those same folks are critical for improving our customer experience. Those same folks are important to building out plants like Texas. We modeled this so that the company can become operationally cash flow positive in '25. But chainsaw - what was that [inaudible], I don't think he built great businesses. And business is much more than the Excel spreadsheet that you put in front of yourself.

Speaker Change #100: It may look good for.

Speaker Change #100: Some folks in 2024.

Speaker Change #101: It'll be a huge mistake in 2028.

Speaker Change #101: Those same folks are critical for us to achieving the gross margin targets.

Speaker Change #101: Those same folks are critical for improving our customer experience Hussein folks who are important to building out plants like Texas.

Speaker Change #101: We we.

Speaker Change #101: We modeled this so that the company can become operationally cash flow positive in 'twenty five but.

Speaker Change #101: <unk>.

Speaker Change #101: Chainsaw.

Speaker Change #101: Has that changed so guide.

Speaker Change #102: Since all Jack.

Speaker Change #103: I don't think he built grease businesses.

Speaker Change #103: <unk> business is much more than the excel spreadsheet that you put in front of yourself.

Kashy Harrison: Yep. Fair enough. And then my follow-up question, maybe a bit more mechanical in nature, can you walk us through how the change from sale leasebacks to direct purchase works with the customers within material handling? I think there was a comment in the K that now the customers are dealing directly with the banks. And so I was wondering if you could just help us think through exactly how the sales process works today versus how it did prior. Thank you.

Kashy Harrison: Yeah, fair enough. And then, my follow-up question, maybe a bit more mechanical in nature. Can you walk us through how the change from sale leasebacks to direct purchase works with the customers within material handling? I think there was a comment in the K that now the customers are dealing directly with the banks. And so, I was wondering if you could just help us think through exactly how the sales process works today versus how it did prior. Thank you.

Operator 2: And then my follow-up question, maybe a bit more mechanical in nature, can you walk us through how the change from sale leasebacks to direct purchase works with the customers within material handling? I think there was a comment in the K that now the customers are dealing directly with the banks. And so I was wondering if you could just help us think through exactly how the sales process works today versus how it did prior. Thank you. Yeah. So I guess as a preface, that industry, a lot of customers like to lease their asset solutions. And so they lease their tractor-trailers. They lease their forklifts. They lease their racking equipment. It's just the way they like to access that market. Historically, we've offered both options. We've offered customers the ability to buy the equipment, and some do that.

Speaker Change #105: And then my follow up question, maybe a bit more mechanical in nature.

Speaker Change #105: Can you walk us through how the change from our sale.

Speaker Change #105: Sale leasebacks to direct purchase works with the customers within material handling I think there was a comment in the K that now the customers are dealing directly with the banks and so I was wondering if you could just help us think through exactly how is the sales process works today versus how it did prior thank you.

Paul Middleton: Yeah. So I guess as a preface, that industry, a lot of customers like to lease their asset solutions. And so they lease their tractor-trailers. They lease their forklifts. They lease their racking equipment. It's just the way they like to access that market. Historically, we've offered both options. We've offered customers the ability to buy the equipment, and some do that.

Paul B. Middleton: Yeah. So, I guess as a preface, that industry, a lot of customers like to lease their asset solutions. And so, they lease their tractor trailers. They lease their forklifts. They lease their racking equipment. It's just the way they like to access that market. Historically, we've offered both options. We've offered customers the ability to buy the equipment, and some do that. And then, we've offered options where we lease it to them. Because it's eligible for investment tax credits, it has been a bit more challenging to monetize those benefits when we offer that leasing solution. And it's limited in terms of the banks and participants you can go to.

Speaker Change #105: No.

Speaker Change #105: I guess as a preface that industry.

Speaker Change #105: Lot of customers like to lease their asset solutions. So they lease their tractor trailers or at least their forklifts. They lease their racking equipment is just the way they like to access that market.

Speaker Change #106: Historically, we've offered.

Speaker Change #106: Both options, we've offered customers the ability to buy equipment and some do that.

Operator 2: And then we've offered options where we lease it to them. Because it's eligible for Investment Tax Credits, it has been a bit more challenging to monetize those benefits when we offer that leasing solution. And it's limited in terms of the banks and participants you can go to. So historically, for those customers, they would subscribe to it, and we would deploy it. And then we would package that up and sell it to a bank and then monetize the benefits. Because where we are in the maturity curve, we've had to use a lot of the cash in those transactions to kind of back to the Investment Tax Credit aspects. And so going forward, those customers will probably still lease the solutions. But we've been pushing them towards working with the banks themselves and us being more of the middleman to facilitate that.

Paul Middleton: And then we've offered options where we lease it to them. Because it's eligible for Investment Tax Credits, it has been a bit more challenging to monetize those benefits when we offer that leasing solution. And it's limited in terms of the banks and participants you can go to. So historically, for those customers, they would subscribe to it, and we would deploy it. And then we would package that up and sell it to a bank and then monetize the benefits. Because where we are in the maturity curve, we've had to use a lot of the cash in those transactions to kind of back to the Investment Tax Credit aspects. And so going forward, those customers will probably still lease the solutions. But we've been pushing them towards working with the banks themselves and us being more of the middleman to facilitate that.

Speaker Change #106: And then we've offered options, where we lease it to them because it's it's eligible for investment tax credits. It becomes it has been a bit more challenging to monetize those benefits when we offer that leasing solution.

And it's limited in terms of the banks and participants you can go to.

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

Speaker Change #106: They would subscribe to it and we would deploy it and then we would take that package that up and sell it to the bank.

Speaker Change #106: And then monetize the benefits.

Speaker Change #106: Because where we are in the maturity curve we had to.

Speaker Change #106: A lot of the cash in those transactions to kind of back to the investment tax credit aspects.

So going forward those customers will probably still leased the solutions, but.

Speaker Change #106: We've been pushing them towards working with the banks themselves and us being more of the middle man to facilitate that and I would just add that when we started early on another dynamic was it was newer technology. So it also kind of made.

We've been pushing them towards working with the banks themselves and us being more of the middle man to facilitate that

Operator 2: I would just add that when we started early on, another dynamic was it was newer technology. So it also kind of made banks don't like new things. They like things that have been around for 100 years, and they can go to the book and open up and turn to the section for cars or trucks or forklifts. And there hasn't been a fuel cell section. The fact that we've been doing this for 10 years and broadly as we have, and there's so many banks that are involved now, the comfort level with the customers and the banks on these technologies is substantially broader and more understood. And so that makes it easier. And we've built a fairly big portfolio of banks that we can now work with.

Paul B. Middleton: And I would just add that when we started early on, another dynamic was that it was newer technology, so it also kind of made banks - banks don't like new banks. They like things that have been around for 100 years and they can go to the book and open up and turn to the section for cars or trucks or forklifts and there hasn't been a fuel cell section. The fact that we've been doing this for 10 years and broadly as we have, and there's so many banks that are involved now, the comfort level with the customers and the banks on this technology is substantially broader and more understood. And so that makes it easier. And we've built a fairly big portfolio of banks that we can now work with. And so, now when we put the customers to those banks, it becomes a much easier conversation for them to put those programs in place. And so that's what we're working towards is that we're no longer the middleman, that we're just the facilitator and we still treat it as a Capex sale for us, whether the customer's buying it or they're having their bank buy it and leases it to them. And that's what we're pushing for.

Paul Middleton: I would just add that when we started early on, another dynamic was it was newer technology. So it also kind of made banks don't like new things. They like things that have been around for 100 years, and they can go to the book and open up and turn to the section for cars or trucks or forklifts. And there hasn't been a fuel cell section. The fact that we've been doing this for 10 years and broadly as we have, and there's so many banks that are involved now, the comfort level with the customers and the banks on these technologies is substantially broader and more understood. And so that makes it easier. And we've built a fairly big portfolio of banks that we can now work with.

Speaker Change #106: Banks banks don't like new things they like.

Things that have been around for 100 years and it can go to the book and open upturn to the section for cars or trucks or forklifts and there hasnt been a fuel cell section. The fact that we've been doing this for 10 years and broadly as we have in there is so many banks that are involved now the comfort level with the customers and the banks on this technology is.

Speaker Change #106: Italy.

Speaker Change #106: Our broader and more understood and so that makes it easier.

Speaker Change #106: And we've built a fairly big portfolio of banks that we can now work with and so now when we put the customers to those banks it becomes a much easier conversation for them to put those programs in place and so that's what we're working towards is that we're no longer.

And we've built a fairly big portfolio of banks that we can now work with and so now when we put the customers to those banks it becomes a much easier conversation for them to put those programs in place

Operator 2: And so now when we put the customers to those banks, it becomes a much easier conversation for them to put those programs in place. And so that's what we're working towards, is that we're no longer the middleman, that we're just the facilitator. And we still treat it as a CapEx sale for us, whether the customer's buying it or they're having their bank buy it and lease it to them. And that's what we're pushing for. Appreciate it. Thank you. Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Andy for any further closing comments. Thank you, Kevin. And I just want to reiterate a sentence or two from my opening statement. As the company moves into 2024, we're focused on fortifying our financial foundation but also sustaining continual expansion.

Paul Middleton: And so now when we put the customers to those banks, it becomes a much easier conversation for them to put those programs in place. And so that's what we're working towards, is that we're no longer the middleman, that we're just the facilitator. And we still treat it as a CapEx sale for us, whether the customer's buying it or they're having their bank buy it and lease it to them. And that's what we're pushing for.

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

Speaker Change #106: The middleman that were just the facilitator, we still treated as a capex sale.

Speaker Change #106: For us whether the customers buying it or they're having their bank by it and lease it to them.

Speaker Change #106: That's what we're pushing for.

Kashy Harrison: Appreciate it. Thank you.

Kashy Harrison: I appreciate it. Thank you.

Operator: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Andy for any further closing comments.

Operator: Thank you we've reached end of our question and answer session I'd like to turn the floor back over to Andy for any further closing comments. Thank you Kevin.

Operator: Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Andy for any further closing comments.

Andy Marsh: Thank you, Kevin. And I just want to reiterate a sentence or two from my opening statement. As the company moves into 2024, we're focused on fortifying our financial foundation but also sustaining continual expansion. Now, we are resolved to propel the hydrogen economy, but it's also matched by our strategic shift towards capitalizing on existing investments and a cautious approach to cash management. Let me be clear. It sets the stage for persistent growth and innovation. I thank everyone for the time today and looking forward to talking to many of you over the next months. Have a good day.

Andrew J. Marsh: Thank you, Kevin. And I just want to reiterate a sentence or two from my opening statement. As the company moves into 2024, we're focused on fortifying our financial foundation, but also sustaining continual expansion. Now, we are resolved to propel the hydrogen economy, but it's also matched by our strategic shift towards capitalizing on existing investments and a cautious approach to cash management. And this is, and let me be clear, it sets the stage for persistent growth and innovation. I thank everyone for the time today, and looking forward to talking to many of you over the next months. Have a good day.

Andy: I just want to reiterate.

Andy: Sentence or two from my opening statement.

Andy: As the company moves into 2024.

Andy: We're focused on fortifying our financial Foundation.

Andy: But also sustaining continual expansion.

Operator 2: Now, we are resolved to propel the hydrogen economy, but it's also matched by our strategic shift towards capitalizing on existing investments and a cautious approach to cash management. Let me be clear. It sets the stage for persistent growth and innovation. I thank everyone for the time today and looking forward to talking to many of you over the next months. Have a good day. Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Andy: No we are resolved to propel the hydrogen economy, but its also matched by our strategic shift towards capitalizing on existing investments and a cautious approach to cash management.

Andy: And this is and let me be clear it sets the stage for persistent growth and innovation.

Speaker Change #108: Thank everyone for the time today and looking forward to talk to many of you over the next months.

Speaker Change #109: Have a good day thank.

Andy Marsh: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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.

Speaker Change #110: For your participation today.

Q4 2023 Plug Power Inc Earnings Call

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