Q1 2025 Plug Power Inc Earnings Call
Greetings and welcome to the plug power first quarter 2025 earnings call.
At this time all participants are in a listen only mode. A question and answer session will follow the presentation.
If anyone should require operator assistance. During this conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.
Operator: Conference, please press star zero on your Please note this conference is being recorded.
Operator: I will now turn the conference over.
Speaker Change: I will now turn the conference over to Teal, Hoyos, Vice President marketing and communications. Thank you you may begin.
Teal Hoyos: Teal Hoyos, Vice President, Mark Thank you.
Teal Hoyos: Thank you.
Operator: Welcome to the 2025 First Quarter Earnings Call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial position or other forward-looking information. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is 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.
Teal Hoyos: Welcome to the 2025 first quarter earnings call. This call will include forward looking statements. These forward looking statements contain projections of our future results of operations or our financial position or other forward looking information.
Teal Hoyos: And these forward looking statements to be 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.
Teal Hoyos: We believe it is important to communicate our further expectation too and 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.
Operator: Such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under Item 1A, Risk Factors, and our annual report on Form 10-K. For the fiscal year ending December 31, 2024, our quarterly report on Form 10-Q for the quarter ended March 31, 2025, as well as other reports we file from time to time with the FDC. These forward-looking statements speak only as of the day in which the 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.
Teal Hoyos: Such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under item one a risk factors in our annual report on Form 10-K.
For the fiscal year, ending December 31, 2020 for our quarterly report on Form 10-Q for the quarter ended March 31, 2025, as well as other reports we file from time to time with the SEC.
Teal Hoyos: These forward looking statements speak only as of the date in which the 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 would like to turn the call over to plug CEO Andy Marsh.
Andrew Marsh: At this point, I would like to turn the call over to Plug's CEO, Andy Marshall. Good afternoon, everyone. Thank you for joining today. I am here with Paul, Sanjay, and Jose. I'm happy to report that in Q1... Plug met the financial. and Operational Targets We Set Out, Delivering a Quarter of Solid Execution in a Still Turbulent Macro Environment. Revenue came in at $134 million, in line with guidance. But more importantly, we made real progress on our path to profitability, improving margins, reducing cash burn, and continuing to strengthen execution across all business lines. We are projecting between $140 to $180 million in revenue in the second quarter.
Andy Marsh: Good afternoon, everyone. Thank you for joining today I'm here with Paul and Jane who is that.
Speaker Change: I'm happy to report that in Q1.
Speaker Change: Well I've met the financial.
Speaker Change: And operational targets, we set out.
Speaker Change: Delivering a quarter of solid execution, and there's still a turbulent macro environment.
Speaker Change: Revenue came in at $134 million in line with guidance.
Speaker Change: But more importantly, we made real progress on our path to profitability.
Speaker Change: Proving margins, reducing cash burn and continued to strengthen execution across all business lines.
Speaker Change: We are projecting between $140 million to $180 million in revenue in the second quarter.
Andrew Marsh: Let me start with some business highlights, followed by updates on cost actions, capital, tariffs, U.S. policy.
Speaker Change: Let me start with some business highlights followed by updates on cost actions Capitol towers U S policy.
Andrew Marsh: And then I'm going to hand it over to Jose to walk through Europe in depth. With respect to our business performance, we saw a new momentum in our material handling business in the first quarter. One of our largest pedestal customers placed a $10 million dollar initial order tied to over $200 million dollars in future opportunities under a safe harbor structure. We also expanded with new partners, including STEF in Spain, now deploying Plug's hydrogen-powered logistics systems at their own cold chain facilities. On the infrastructure front, our hydrogen generation build out is delivering. The 15 ton per day Louisiana plant was commissioned in Q1 on time.
Speaker Change: And then I'm going to hand, it over to Jose to walk through Europe and debt.
Speaker Change: With respect to our business performance, we saw grew new momentum in our material handling business in the first quarter.
Speaker Change: One of our largest pedestal customers placed a 10 billion dollar additional water.
Speaker Change: Over $200 million in future opportunities under safe Harbor structure we.
Speaker Change: We also expanded with new partners, including Steph in Spain.
Speaker Change: Now deploying plug hydrogen powered logistics systems at their tone cold chain facilities.
Speaker Change: When the infrastructure front, our hydrogen generation build out is delivering this.
Speaker Change: 15th time Forte, Louisiana plant was commissioned in Q1 all tie together.
Andrew Marsh: Together with Georgia and Tennessee, we now have 40 tons per day in internal production capacity, improving customer economics and availability while shielding margin from third party volatility. With respect to cost savings, internally, we launched a major program called QuantumLeap, targeting over $200 million in annualized run rate reductions. I'm pleased to report that most of these savings have already been executed. Program Spans Manufacturing, Logistics, Sourcing, and SG&A. Our Q1 cash burn was down nearly 50% year over year, and with quantum leap, we expect further reductions in cash burns in future quarters. This is Plug Power operating with discipline, precision, and a long-term mindset.
Speaker Change: Together with Georgia, and Tennessee, We now have 40 tons per day internal production capacity, improving customer economics and availability, while shielding margin from third party volatility.
Speaker Change: With respect to cost savings internally, we launched a major program called quantum leap.
Speaker Change: Targeting over $200 million in annualized run rate reductions.
Speaker Change: I am pleased to report that most of these savings have already been executed.
Program spans manufacturing logistics sourcing and SG&A.
Speaker Change: Q1, cash burn was down nearly 50% year over year and with quantum leap, we expect further reductions in cash burns in future quarters.
Speaker Change: This is plug power operating with discipline and precision and a long term mindset.
Andrew Marsh: When capital, we've taken some important steps to ensure financial flexibility. In March, we raised $280 million in equity, bolstering liquidity while reducing risk in a volatile market. We followed that with a $525 million dollar structure financing facility, part of which was used to retire convertible debt. Combined with the $1.66 billion Department of Energy loan guarantee, these moves provide a strong foundation to support our infrastructure culture. That said, I want to be forthright, with the change in administration, we're actively working with the DOE to advance the loan process. The underlying program is contracted, obligated, and we believe secure, and we continue to engage closely with the administration.
Speaker Change: When capital we've taken some important steps to ensure financial flexibility and.
Speaker Change: In March we raised $280 million in equity bolstering liquidity, while reducing risk in a volatile market.
Speaker Change: Followed that with a $525 million structured financing facility part of which was used to retire convertible debt.
Speaker Change: Combined with the 1.66 billion department of energy loan guarantee.
Speaker Change: These moves provide a strong foundation to support our infrastructure calls.
Speaker Change: That said I Wanna be forthright with the change in administration, we are actively working with the Doj to advanced alone process. The underlying program contract. It obligated and we believe secure and we continue to engage closely with the administration.
Andrew Marsh: At quarter end, we held nearly $300 million in unrestricted cash. with meaningful additional capacity under the new facility. Our outlook remains unchanged. We do not anticipate raising additional equity in 2025, and we remain committed to that goal.
Speaker Change: At quarter end, we held nearly $300 million and run unrestricted cash.
Speaker Change: With meaningful additional capacity under the new facility.
Speaker Change: Our outlook remains unchanged, we do not anticipate raising additional equity in 2025, and we remain committed to that goal.
Andrew Marsh: Turning to tariffs, recent actions from the current administration have increased duties on Chinese imports that impact our core product lines like GenDrop. For some models, this has resulted in increased costs, particularly on ballast assemblies, battery modules, and plates. At the moment, a good deal of these items are in inventory that will be used in 2025. With today's announcements, obviously the pressure's a little bit off.
Speaker Change: Turning to towers recent actions from the current administration have increased duties on Chinese imports the impact our core Pas product lines like Gen drive.
Speaker Change: For some models. This has resulted in increased cost, particularly are imbalanced assembly battery modules in place.
Speaker Change: Good at the moment a good deal of these preferred inventory that will be used in 2025.
Speaker Change: With todays announcements.
Speaker Change: Obviously, the pressures a little bit off.
Andrew Marsh: Office. But we are continuing down our four-pronged mitigation plan. One is that if needed, we will add surge charges for customers based on sourcing mix and inventory timing. Your sourcing and resourcing, which we've really had in motion for a number of years. Engineer redesigns the reduced task for those components. and Geographical Diversification, leading further into APAC and U.S. suppliers. With these items, we expect even to reduce our costs in China by 50% in the next six months. Importantly, I think this is really important, our electrifier platform is minimally impacted even with the 145% tariff. and was internally developed with non-Chinese content.
But we are continuing down our four pronged mitigation plan.
Speaker Change: One is that if needed we will add surcharges for customers based on sourcing mix and inventory timing.
Speaker Change: Sure. So we're seeing resourcing, which he really had emotion for a number of years.
Speaker Change: Engineer Redesigns, the reduced tariffs exposed components.
Speaker Change: And geographical diversification leaning further into APAC and U S suppliers.
Speaker Change: Now with these items, we expect even to reduce our cost in China by 50% in the next six months.
Speaker Change: Importantly, I think this is really important our electric wiser platform is minimally impacted even with the 145% tariffs.
Speaker Change: And was internally developed with Melanie Chinese content.
Andrew Marsh: This is a team-wide response, and it's already helping us protect margin integrity.
Speaker Change: This is the team wide response, it's already helping us protect margin integrity.
Andrew Marsh: Finally, a brief word on U.S. policy. It's clear the transition in Washington has introduced some uncertainty about clean energy programs. The IRA is under pressure and there is active debate in Congress over the future of Section 45B of the Hydrogen Tax Credit and the long-term direction of de-carbonization incentives. That said, we're actively engaged with policymakers, both directly and through our leadership in FICHEA, which is a fuel cell and hydrogen energy association. We're also actively pursuing state and local funding opportunities where momentum continues. We remain focused on execution and will continue advocating aggressively for a stable, long-term hydrogen policy framework in the U.S.
Speaker Change: Finally, a brief word on U S policy.
Speaker Change: Clear the transition in Washington.
Speaker Change: <unk> introduced some uncertainty about clean energy programs.
Speaker Change: I R as under pressure and there's active debate in Congress over the future of section 45 of the hydrogen tax credit and the long term.
Speaker Change: Direction.
Speaker Change: Inflation incentives.
Speaker Change: That said, we were actively engaged with policymakers both directly and through our leadership in for chip.
Speaker Change: As a fuel cell and hydrogen Energy Association. We're also actively pursuing state and local funding opportunity where momentum continues.
Speaker Change: We remain focus on execution and we will continue advocating aggressively for stable long term hydrogen policy framework in the U S.
Andrew Marsh: Before I turn it over, let me frame one of the most exciting strategic frontiers Europe Between the EU Green Deal, Repower EU, and the UK Energy Act, we are tracking an Electrolyzer Opportunity Funnel worth over $21 billion across 2025 and 2026. What is different now is not just ambition. but enforceable procurement mandates, funded incentive schemes, and penalties for noncompliance. Plug has moved early and decisively in the region, and we're already embedded in some of the most transformative hydrogen projects across Europe. I'll let Jose walk through these specifics, but I'll close with this.
Speaker Change: Before I turn it over let me frame one of the most exciting strategic frontier is Europe.
Tween EU Green deal Repower, EU and the U K Energy Act, we are tracking an electrolyzed your opportunity funnel worth over $21 billion across 2025 and 26.
Speaker Change: What is different now it's not just ambition when it.
Speaker Change: Forcible procurement mandates funded insensitive schemes and penalties for noncompliance.
Speaker Change: Plug has moved early and decisively in the region.
Speaker Change: And were already embedded in some of the most transformative.
Speaker Change: Origin projects across Europe.
Speaker Change: I'll, let Jose walk through the specifics, but I'll close with this Europe Israel. The funnel was live plug is in position.
Andrew Marsh: Europe is real, the funnel is live, Plug is in position.
Jose: With that, let me turn it over to Jose to take you through the European Electrolyzer Strategy.
Speaker Change: With that let me turn it over Jose to take you through the European Electrolyze or strategy.
Jose: Jose. Thank you, Andy. As mentioned, Europe today is the most dynamic electrolyzer market in the world. driven by regulation in investment and execution timelines that are accelerating across the region. Plug is at the forefront of that shift.
Speaker Change: Jose.
Speaker Change: Yeah.
Speaker Change: Thank you Randy.
Speaker Change: As mentioned Europe today is the most dynamic electoral I send market in the world.
Speaker Change: Driven by regulation.
Speaker Change: Investment and execution timelines that are accelerating across the region.
Speaker Change: Black is at the forefront of that shift.
Jose: Let me start with the Policy Foundation. under the EU Green Deal. and the Renewable Energy Directive 3. The EU sets targets for 42% of industrial hydrogen to be renewable by 2030 and 60% by 2035. The FIT55 policy package sets the legally binding framework to decarbonize their energy-intensive sectors using green hydrogen. That includes mandates under the Fuel EU Aviation and Fuel EU Maritime. Fuel standards for aviation and maritime now come with real penalties, creating a direct pull for SAF and E-Methanol, both of which rely on electrolytic hydrogen.
Speaker Change: Let me start with the policy Foundation.
Speaker Change: And that the EU Green deal.
Speaker Change: And the renewable energy directive three that they set targets for 42% of industrial hydrogen to be renewable by 2030 and.
Speaker Change: And 60% by 2035.
Speaker Change: <unk> 55 policy package sets the legally binding framework to decarbonize their energy intensive sectors using green hydrogen.
Includes mandates under the fuel you aviation fuel EU maritime.
Speaker Change: He was a standout for aviation and maritime now come with real penalties, creating a direct pools for SaaS and E methanol, both of which rely on electoral it literally take hydrogen.
Jose: What's different this cycle is that governments are funding real projects with real data.
Speaker Change: What's different this cycle is that governments are funding real projects with real deadlines.
Jose: Let's start with aviation. In Denmark, PLAS has an opportunity for 300 megawatt of electrolyzer capacity for a SAS project. And the French government recently awarded $25 million for pre-feed and feed engineering for SAF projects to four companies that Plug is actively working with. This is an anchor example of plug involved at a scale for decarbonizing jet fuel.
Speaker Change: Let's just start with aviation in Denmark, plus it has an opportunity for 300 megawatt of electrolytic capacity for a SaaS project and the French government recently awarded $25 million for pre feed and feed engineering for SaaS projects.
Speaker Change: Our company is that black is actively working week.
Speaker Change: This is a noncore example of flagging balls at a scale for the cargo and I think yet Q.
Jose: Spain is targeting 12 gigawatts of electrolyzer capacity by 2030. Already 2.3 gigawatts have been pre-awarded across seven clusters. Cochrane Refining, SAS, Methanol and Ammonia. Plug is actively engaged in multiple of these projects, where our long-term service model helped lower LCOH versus competitiveness. These evaluations are real, and they include mandatory procurement scoring, which favors OEMs like Plug, with full life-cycle offerings and domestic engineering teams. refining is another major application Plug is delivering 100 megawatts to GALP in Portugal, a project supported by 84 million euros in operational subsidies from the European Hydrogen Bank. These are 10 year index subsidies covering OPEX, not just CAPEX, showing the EU's long term commitment to green hydrogen viability.
Speaker Change: Spain is targeting 12 gigawatts of Electrolyzed capacity by 'twenty three.
Speaker Change: Ready to say you've got what has been awarded across seven clusters covering refining.
Speaker Change: Thus methanol and ammonia.
Speaker Change: Flag is actively engaged in multiple of these projects, where our long term service model helped.
Speaker Change: Nowhere else T O H versus competitors.
Speaker Change: These evaluations are real and they include a mandatory procurement and scoring which favors Oems like black with full lifecycle offerings and domestic engineering teams.
Speaker Change: Refining is another major application.
Speaker Change: Black is delivering 100 Mega watts to got in Portugal, a project supported by 84 million euros in operational subsidies from the European hydrogen back. These are 10 year index subsidies go away in Opex, not just capex showing they use long term commitment to green hydrogen.
Speaker Change: The ability.
Jose: We are also delivering 25 megawatts for Ibedrola and BP in Castellon in Spain.
Speaker Change: We are also delivering 25 megawatts 40, bedroll app and BP in costs in Spain.
Jose: Now moving to the UK, the Energy Act of 2023 has created a stable regulatory framework. The government has already awarded £2 billion in revenue, support under Hydrogen Allocation Round 1, Hard 1, and Plug Technology is well positioned in over 60% of the capacity awarded. For the hydrogen allocation round two, hard two, the UK has shortlisted 1.2 gigawatts of new electrolyzer projects. with awards expected later this year. Plug is actively engaged in both centralized and decentralized proposals with total awards that potentially could exceed 875 megawatts. Importantly, these UK programs come with 15-year price support contracts structured under the Low Carbon Hydrogen Agreement model.
Speaker Change: Now moving to the U K.
Speaker Change: Energy Act of 2023 has created a stable regulatory framework. The government has already awarded 2 billion pounds in revenue support and their hydrogen allocation round one high one.
Speaker Change: Black technologies, well position in over 60% of the capacity awarded.
Speaker Change: For the house, how did your allocation round too hard to the UK has shortlisted one two gigawatts of new Electrolyze it projects with.
Speaker Change: Which I would suspect later this year.
Speaker Change: You certainly engaged in both centralized and decentralized proposals with total awards that potentially could exceed 875 megawatts.
Speaker Change: Importantly, these UK programs come with 15 year price support contracts structure under the low carbon hydrogen agreement model.
Jose: These are predictable, inflation-linked revenue streams critical for bankability and capital deployment.
Speaker Change: These are predictable inflation linked linked revenue streams.
Speaker Change: Gulf of bank ability on capital deployment.
Jose: What sets Plug apart in this market is our full-stack offering, proven PEM systems, integrated plant engineering, long-term service, and strong European and execution teams. This is why we are strategically positioned against competitors in both RFP scoring and LCOH evaluation.
Speaker Change: What sets <unk> apart in this market is our full stack offering proven Pam systems integrating plant engineering long term service and a strong European and execution teams. This is why we are strategically positioned against competitors in both ISP as Corrine and S. T O H.
Evaluation.
Jose: To summarize. Europe is a fully active electrolyzer market and Plug is in the pole position on project feasibility, regulatory fit, and delivery readiness. We expect Europe to be a multi-gigawatt contributor to bookings and revenue over the next 18 to 24 months, with meaningful margin contribution as projects move from backlog to commission.
Speaker Change: To summarize Europe is a fully active electrolytes of market and black leasing the pole position on project visibility.
Speaker Change: Regulatory fit and delivery rate readiness.
Speaker Change: We expect Europe to be a multi gigawatt contributor to.
Speaker Change: Bookings and revenue over the next 18 to 24 months with meaningful margin contribution as projects move from backlog to commissioning.
Operator: Thank you, Jose, and Paul, Jose, Sanjay, and I are ready for your questions. Thank you. And at this time we will conduct our question and answer session.
Speaker Change: Thank you Jose and Paul Jose Sanjay and I are ready for your questions.
Speaker Change: Thank you.
Speaker Change: At this time, we will conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Operator: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question period. Press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, to ask a question, press star 1.
Speaker Change: Confirmation tone will indicate that your line is in the question queue.
Speaker Change: You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys once again to ask a question press star one.
Speaker Change: Okay.
William Peterson: And our first question comes from... Bill Peterson with J.P. Morgan. Yeah, good afternoon, everyone. Thanks for taking the question. I'm sure you've seen, Andy and team the the I guess the initial proposal for the TAC The tax bill. And my question is really around the 45E. And maybe a few full, a few full questions.
Speaker Change: And our first question comes from Bill Peterson with Jpmorgan. Please state your question.
Speaker Change: Yeah, Hi, good.
Speaker Change: Good afternoon, everyone and thanks for taking the questions.
Speaker Change: I'm sure you've seen Andy and team the.
Speaker Change: I guess the initial proposal for the tax.
Speaker Change: Tax Bill and my question is really around the 45.
Speaker Change: And maybe a few fall a few full questions first of all.
William Peterson: First of all, assuming this, this does get written into law, what are the potential impacts for your Texas facility or the DOE loan? I presume you're going to try to accelerate and begin construction before the end of the year in order to qualify. And more broadly, how should we think about the impacts to the mason green hydrogen industry in the US? You know, clearly with ample fossil fuels, the cost structure for green is not in a way to https://www.youtube.com.au And I appreciate the comments from Jose on Europe.
Speaker Change: Assuming this does get written into law, what are the potential impacts for your Texas facility or the Doa alone.
I presume you're going to try to accelerate.
Speaker Change: Construction before the end of the year in order to qualify.
Speaker Change: And more broadly how should we think about the impacts to the nascent green hydrogen industry in the U S.
Speaker Change: Clarity with ample fossil fuels are the cost structure for green is not in a way to compete.
Speaker Change: Well without this tax credit and I appreciate the comments from Jose on Europe, because this with this.
William Peterson: Does this presumably mean you'd be focusing on markets such as Europe and Australia rather than the US? Thank you.
Speaker Change: Presumably you mean you'd be focusing on markets, such as Europe, and Australia, rather than in the U S. Thank you.
Andrew Marsh: Good question, Bill, and let me, I think you, first I'm going to take a step back. I was happy that 45V was continuing through 2025 and that it would be, even in the first draft, you know, a safe harbor provision for construction that would start this year. My first reaction was, we're going to have to work to start construction this year to make sure that that plant would qualify under 45V. I was also pleased because I think we're probably the only fuel cell company that can leverage 48E, and that seems like it's timely at 2031, so that would give us time, again, to continue to grow the fuel cell business.
Bill Peterson: Good question Bill.
Bill Peterson: Let me I think you summer first I'm glad to take a step back.
Bill Peterson: I wish you happy that 45 B was.
Bill Peterson: <unk> through 2025.
Bill Peterson: You can see even in the first draft.
Bill Peterson: Our safe Harbor provision for construction that would start this year.
Bill Peterson: Hi, My first reaction was we're going to have to work to start construction. This year to make sure that Oh that plant would qualify under 45 D.
Bill Peterson: I was also pleased because I think we're probably the only fuel cell company that can leverage 40, a D and that seems like it's time timely.
Bill Peterson: 31, so that would give us time again to continue to grow the fuel cell business.
Andrew Marsh: I think, look, you know, Jose and I worked on this presentation for the day. Prior to the announcement, we have become more and more focused on York because we see that the biggest opportunities for expanding the hydrogen industry today resides in York. When you look at it... The only part of our products, which are actually American manufactured, will be the stacks. The rest we are leveraging integrators across the EU and the Middle East for our products. So look, there's a lot to go on Congress.
Bill Peterson: I think.
Bill Peterson: Look.
Bill Peterson: Hussain I work during this presentation for today.
Bill Peterson: Prior to [laughter].
Bill Peterson: Prior to the announcement.
Bill Peterson: We have become more and more focus on Europe, because we see the biggest opportunities for expanding the hydrogen industry today resides in Europe.
Bill Peterson: When you look at it.
Bill Peterson: The only part.
Bill Peterson: Viewer of power products, which are actually American manufacturer will be the stacks.
Bill Peterson: The rest we are leveraging integrators across the U and the middle East for our products. So.
Speaker Change: Look oh.
Bill Peterson: There's a lot to go on Congress.
Andrew Marsh: I've been around a long time. I was just happy to build a 45B. was mentioned and that it wasn't completely cut out like I've heard threats for the whole IRA. So I can't say I was thrilled with the announcement, but I wouldn't give it you know, it it's not there's a way to work through what's been announced.
Speaker Change: <unk> been around long time.
Speaker Change: I was just happy build at 45 B.
Speaker Change: It was mentioned that it wasn't completely cut out like Ive heard threats for the whole why all right. So oh.
Speaker Change: I can't say I was thrilled with the announcement, but I wouldn't give it yes, it's not a it was a way to work through what's been announced so.
Andrew Marsh: So I'll just have one last item not to ramble on Bill. I think it'll be really interesting because there seems to be very very strong support for hubs in red districts and look the hubs don't work without The production tax credit. And I think that's well, well known. So I think there's a lot to go. Lots still going on in DC. Hope that would help.
Speaker Change: I'll just add one last thing I'm not to ramble, one bill I think will be really interesting.
Speaker Change: Because there seems to be very very strong support for hubs in red districts.
Speaker Change: And look.
Speaker Change: Look the hubs don't work without.
Speaker Change: The production tax credit and I think that's well well known so I think there's a lot to go lot still going on in D. C.
Speaker Change: Yeah.
Speaker Change: Okay sure.
William Peterson: Sure. Yeah, no, it was helpful. I'm sure you and others will probably be working to see if there's any way to massage the existing draft.
Speaker Change: Yeah.
Speaker Change: Its helpful. I assure you and others, you'll probably be working to see if there's any way to massage the existing.
William Peterson: But my second question is somewhat related, but looking at your BEDP pipeline shortly after last earnings, you had close to eight gigawatts of electrolyzer orders set to FID within this year. Just want to get a sense, you know, did you close each of these orders you had expected in the first quarter? Are you on track thus far into the second quarter? And again, most of these are outside of the U.S. to begin with. Yeah, most of these projects, I mean, are really, you know, we have about $200 million in backlog for this year with electrolyzer.
Speaker Change: But my second.
Speaker Change: Somewhat related but looking at your B D. D. T pipeline. Shortly after our last earnings you had close to eight gigawatts of Electrolyzed order set that fit within this year just wanted to get a sense did you close.
Speaker Change: Each of these orders you had expected in the first quarter or are you on track thus far in the second quarter.
Speaker Change: And again most of these are outside of the U S could you give us more.
Speaker Change: Most of these projects I mean.
Speaker Change: Really you know we have about $200 million in backlog for this year with electrical wires.
Andrew Marsh: Most of these projects, we expect, you know, call, you know, two gigawatts will go to FID by year-end. But, you know, I would just caution, Bill, you know, these projects, you know, the electrolyzers are many of these projects are billion-dollar investments, and the plants themselves can be three to four billion dollars. Oh, probably, you know, you know, I want to be cautious and say, yes, a lot of them may close this year, but some of them certainly will fall into 2016.
Speaker Change: Most of these projects.
We expect you know.
Speaker Change: Called two two Gigawatts will go down by year end.
Speaker Change: But.
Bill Peterson: I would just caution bill.
Speaker Change: You know these projects do you the Electrolyze yours or many of these projects are billion dollar investments and the plants themselves can be $3 billion to $4 billion.
Bill Peterson: Oh, probably.
Bill Peterson: You know I want to be cautious and say yeah.
Bill Peterson: Yes, a lot of them may close this year, but some of them.
Bill Peterson: Certainly you'll fall into 'twenty six.
Bill Peterson: Yeah.
Operator: Understood.
Operator: Thanks for the taking the questions and you know, good luck navigating this this environment. Thank you. All right. Thanks, Bill.
Bill Peterson: Understood. Thanks for the taking the questions and good luck getting this this environment. Thank you alright. Thanks Bill.
George Gianarikas: Your next question comes from George Gianarikas with Canaccord Genuity, please state your question. Hi, good afternoon, and thank you for taking my question. Hi, George. Hi, sort of had a question on the cost cuts and the business Rationalization.
Speaker Change: And your next question comes from George <unk> with Canaccord Genuity. Please state your question.
Bill Peterson: Yes.
George: Hi, good afternoon, and thank you for taking my question.
George: Hi, George.
Bill Peterson: Hi.
Bill Peterson: Just sort of I had a question on the cost cuts and the business rationalization.
George Gianarikas: Other other things that could be done, you know, whether inorganic sort of maybe Selling parts of the business that could maybe accelerate your path to profitability.
Bill Peterson: Are there other things that can be done you know, whether it's inorganic sort of maybe.
Bill Peterson: Selling parts of the business that could maybe accelerate your path to profitability.
Bill Peterson: Yes.
Andrew Marsh: George, we don't, and Paul, I'll let you, we have no plans and we're doing no work for selling portions of the business at the moment. Thank you. It is a follow up to just talk about the momentum in Europe.
Bill Peterson: George We don't Paul I'll, let you have we have no plans and we're doing no work for selling portions of the business at the moment.
Bill Peterson: Thank you.
Bill Peterson: And then just as a follow up.
Bill Peterson: To just talk about the momentum in Europe, I'm curious as to any additional steps you're taking from a people power perspective to reallocate resources to that part of the world instead of others that may be seeing a little bit of Oh.
Andrew Marsh: I'm curious as to any additional steps you're taking from a people power perspective to reallocate resources to that part of the world instead of others that may be seeing a little Slow down the momentum. So I'll start then I'll let Paul add on. We've invested significantly in Europe over the past three years. We have a major development facility for electrolyzers actually resides in the Netherlands. We have a strong business development sales operations with centers in France. We have activities in Spain. We have integrators across Europe that we work with. Europe, you know, this is not a new focus for Plug.
Bill Peterson: Or a slowdown in momentum thank you very much.
Speaker Change: Well I'll start then I'll, let Paul add on.
We've invested significantly in Europe.
Speaker Change: Over the past three years.
Speaker Change: We have.
Speaker Change: Major our major development facility for Electrolyze yours actually resides in the Netherlands.
Speaker Change: We have the.
Speaker Change: Our strong business development sales operations, which centers in France.
Speaker Change: We have activities in Spain.
Speaker Change: We have integrators across Europe that we work with.
Speaker Change: Europe No this is not a.
Speaker Change: A new focus for plug it has been investments that we've been making over three years to four years Jose would you like to add to that.
Jose: It has been investments that we've been making over three to four years.
Jose: Jose, would you like to add to that? No, you're right. I mean, we have activities all over the European Union. namely the facility in the Netherlands, but as you said, we have commercial operations in the UK, in Spain, Germany, in France, and this is not a new focus, as Andy said, and the relationships that we have over there have been built over the last 34 years, so it's, there is. A good amount of resources to face the opportunities that we have in Europe, in the NEST. And I would say, Jose, for real products in the ground, using PEM technology...
Jose: You're right I mean, we have activities all over the European Union.
Jose: Namely the facility in the Netherlands, but as you said we have.
Initial operations in the U K, and Spain, Germany and in France.
Andy Marsh: This is not a new focus as Andy said.
Andy Marsh: And the relationships that we have or where there have been built over the last three four years or so.
Andy Marsh: There is.
Andy Marsh: Good amount of our resources to face the opportunities that we have been in Europe, and Dennis and I would say Jose for real products in the ground using <unk> technology.
Operator: Nobody has more. Thank you. Thanks, George.
Andy Marsh: Nobody is more.
Andy Marsh: I agree.
Andy Marsh: Thank you.
Andy Marsh: Yes George.
Colin Rusch: Your next question comes from Colin Rusch with Oppenheimer. Thanks so much guys.
Speaker Change: Your next question comes from Colin Rusch with Oppenheimer. Please state your question.
Colin Rusch: Thanks, So much guys can you give us an update on how the hydrogen production facilities.
Andrew Marsh: You know, can you give us an update on how the hydrogen production facilities are operating, you know, what you're looking at from a yield perspective versus expectations and, and how, you know, how the ramp I think he probably means Louisiana, Colin. Yeah, exactly. Thank you for that. Yeah. So... I think Georgia, we had our best month ever. Yeah, April was a record in terms of production and yield. Yeah. So I think, how many tons was it, 300 tons out in Georgia? April. Yeah, so Georgia is beginning to run Without too much management involvement, Colin, it turns on and runs every day.
Colin Rusch: Our operating you know where you are looking at it from a yield perspective versus expectations and.
Colin Rusch: And how you know how the ramp is going on in Texas at this point.
Colin Rusch: Uh huh.
Colin Rusch: I think you've probably means Louisiana Colin.
Colin Rusch: Yeah exactly thank you for that yeah. So.
Colin Rusch: I think GA, we had our best month ever Yes April was a record in terms of production and yield yeah. So I think how many tons was in 300 tons out Georgia.
And.
Colin Rusch: April yes.
Colin Rusch: Yeah, So Georgia is beginning to run.
Colin Rusch: Without too much management and bomb and calling it turns on and runs every day.
Andrew Marsh: Louisiana, boy, it's probably, you know, I think what I've been most impressed with is, look, it's our third time around. It's a much cleaner design than Louisiana, than Georgia and Tennessee. We really have learned how to build plants, which is really important for Jose in building out the electrolyzer market. So, we're quite pleased with the progress we're seeing at all three sites.
Colin Rusch: Louisiana.
Colin Rusch: Boy, it's probably.
Colin Rusch: Think what I've been most impressed with is.
Colin Rusch: Look it's.
Colin Rusch: Our third time around it's a much cleaner design in Louisiana, and then Georgia, and Tennessee, We really have learned how to build plans, which is really important for Jose in building out the Electrolyze route market.
Colin Rusch: We're quite pleased with that.
Colin Rusch: The progress we're seeing.
Colin Rusch: At all three sites.
Andrew Marsh: You know, we, you know, I think the question is, you know, we need to get Texas started by year's end, and I think that's a real focus of the business. Thanks so much.
Colin Rusch: We I.
Speaker Change: I think the question is we need to get Texas started by year's end and I think that's a real focus of the business.
Speaker Change: Thanks, So much and then from a material handling standpoint, you know theres been kind of a mixed demand not just for you guys, but you know broadly speaking around warehousing automation and capacity building I guess at this point are you seeing folks outside the U S start to expand capacity at all.
Andrew Marsh: And then from a material handling standpoint, you know, there's been, you know, kind of some mixed demand, not just for you guys, but, you know, broadly speaking around warehousing, automation and capacity building. I guess at this point, are you seeing folks outside the US start to expand capacity at all? You know, are there some green shoots that we can be thinking about as Did you get into the back half of this here and prepare for... What's interesting, I have one of my major pedestal company that kind of suggested to me that Automation may not be working as well as they We're hoping, which is good for our material handling business.
Speaker Change: Are there some green shoots that we can be thinking about as you get into the back half of this year and prepare for 2026.
Speaker Change: Well, it's interesting I have one of my major pedestal Cup for companies that have kind of suggested to me that.
Speaker Change: Automation may not be working as well as they were.
Speaker Change: We're opening which is good for our material handling business do you want to touch on material handling for Europe is that yes. So in Europe, we have.
Jose: Do you want to touch on material handling for Europe, Jose? Yeah, so in Europe, we have Mates on Inroads, and I think we announced this a few weeks ago. with BMW in Europe, with two new facilities that we're going to be deploying there. And we also, Andy also mentioned STEF, which is the largest free service company in the European market, I think. We've also done a couple of facilities with them, one in Madrid and one in... In France, so we've seen some activity and some new opportunities happening in the European market as well.
Speaker Change: Maidstone in growth.
We announced a few weeks ago.
Speaker Change: We'd be in W. In in Europe, with two new facilities that we are going to be deployed there and we also on deals formation.
Speaker Change: <unk>, which is the largest.
Speaker Change: Three sir.
Speaker Change: Company in the European market, Inc.
Speaker Change: We've also done a couple of facilities, we then wanting Madrid unwinding.
Speaker Change: In France, so we've seen some activity on some neat opportunities happening in the European market as well.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Thanks, guys.
Operator: Okay, thanks, Colin.
Speaker Change: Thanks Colin.
Operator: And a reminder to the audience to ask a question at this time, press star one. Once again, to ask a question now, press star 1.
Speaker Change: And a reminder to the audience to ask a question at this time press Star one on your telephone keypad. Once again to ask a question now press star one on your telephone keypad.
Eric Stine: Your next question comes from Eric Stine with Craig Hallam. Hey, everyone. Hey, hey, Eric. Good afternoon. Hey, so Colin, I know we're just talking about kind of geographic mix and material handling. But I'm curious if you could just talk about, you know, what you're seeing today. And I know part of this is because you've transitioned to the direct sales model. Away from PPA, you've also put through price increases for margins. You know, as a result, does that mean that the business today is for expansion with current customers? Or I mean, you did mention a new customer, but just curious, the economics are different, it may take a little bit more time to get people up to speed on that.
Speaker Change: Your next question comes from Eric Stine with Craig Hallum. Please state your question.
Speaker Change: Hey, everyone.
Speaker Change: Hey, Eric.
Speaker Change: Good afternoon, Hey, so collyn I know, we're just talking about kind of geographic mix and material handling.
Speaker Change: But I'm curious if you could just talk about what you're seeing today and I know part of this is because you've transitioned to the direct sales model.
Speaker Change: Away from PPA, you've also put through price increases for margin.
Speaker Change: As a result does that mean that the business today is more expansion with current customers.
Speaker Change: Before I mean, you did mention a new customer, but just curious if the economics are different and they take a little bit more time to get people up to speed on that.
Eric Stine: Just how should we think about that?
Speaker Change: Should we think about that.
Jose: Do you want to take that, Jose? So. The we are growing in both sides with existing customers and they mentioned one of our largest customers. having said Harvard $200 million or potential business at the end of 2024. But we are also talking and expanding with new customers, new opportunities. The customer I just described in Europe is a brand new customer. So we do see expansion in both sides. And the economics, you know, given that we will be looking at the 4080 possibility is still there. And we keep on pushing the market. Got it. That is helpful.
Jose: Do you want to take that Jose.
Speaker Change: So.
Speaker Change: We are growing in both sites with existing customers and dimension, one of our largest customers, having safe harbor $200 million of potential business.
Speaker Change: At the end of 'twenty 'twenty four but we are also talking in earnest.
Speaker Change: And expanding with new customers opportunities. They the customer that I. Just described in Europe is a brand new customer. So we do see expansion in both sites.
Speaker Change: The economics, even though we would be looking at 848.
Speaker Change: Possibility still there and.
Speaker Change: We keep on pushing the market.
Speaker Change: Got it.
Andrew Marsh: And then maybe, could you just remind us, I know you gave us the Q2 guide, you know, so I'm not trying to dial this in too specifically in terms of annually, but I mean, do you expect this to be a similar year in terms of the breakdown first half, second half? I would say this, Eric, we are trying to be Very clear to investors of our performance. Quarter after quarter. Look, it's no, as you know, that we've had a couple years where we've missed. So we want to make sure that we don't mislead folks and and you know, this quarter, you know, we have a clear plan how to get the 140 to 180.
Speaker Change: That was helpful.
Speaker Change: And then maybe could you just remind us I know you.
Speaker Change: You gave us the Q2 guide so I'm not trying to dial the same piece specifically in terms of annually, but I mean do you expect that that'll be a similar year in terms of the breakdown for second half.
Speaker Change: I would say this Eric.
Speaker Change:
Speaker Change: We're trying to be.
Speaker Change: Very clear to investors of our performance.
Speaker Change: Uh huh.
Speaker Change: Quarter after quarter look it's no.
Speaker Change: As you know that we.
Speaker Change: We've had a couple of years, where we've missed.
Speaker Change: So we want to make sure that we don't mislead folks in.
Speaker Change: And.
Speaker Change: This quarter.
Speaker Change: We have a clear plan how to get to $1 40 to $1 80.
Operator: We're focusing on becoming gross margin break-even by the end of the year. That is the focus and you know, that's you know, we're trying not to provide any additional additional guidance. So understood, worth asking, but I get it.
Speaker Change: We're focusing on becoming gross margin breakeven by the end of the year.
Speaker Change: That is the focus and.
Speaker Change: That's oh, we're trying not to.
Speaker Change: Provide any additional.
Speaker Change: Additional guidance.
Speaker Change: Yes.
Speaker Change: No understood.
Speaker Change: But I get it.
Operator: Thank you very much. Bye. Bye, Art. Thank you.
Speaker Change: Thank you very much.
Speaker Change: Okay.
Speaker Change: Bye bye.
Speaker Change: Hi art.
Speaker Change: Thank you and your next question comes from Duchenne.
Dushyant Ailani: And your next question comes from Dushyant Ailani with Jeff. Thank you for taking my question, guys. I just wanted to follow up on the 45V real quick. I know that there are some safe harbor rules, right, 5% spend or if you start constructing. Could you kind of remind us how much have you already spent on taxes and then how much what the gap We've spent $250 million. The CapEx is $800 million. The DOE loan is for approximately $400 million. and we've been working with a equity investor for the. So we've already spent, 250 over 800 is about 37%.
Speaker Change: <unk> with Jefferies. Please state your question.
Speaker Change: For taking my question guys I'm just wanted to follow up on the 45 the real quick.
Speaker Change: I know that there are some you know safe Harbor rules right, 5% spend or if you start construction could you remind us how much have you already spent on Texas and then how much what the capex looks like.
Speaker Change: We have spent $250 million the capex is $800 million.
Speaker Change: The loan is for approximately $400 million.
Speaker Change: And we've been working with a equity investor for the breast.
Speaker Change: So we've already spent.
Speaker Change: $2 50 over 800 is about 37%.
Speaker Change: Yeah.
Andrew Marsh: So do you think that the Texas project is largely safe harbored with the 45V since you've already, you know, I would say this. This is a going to be a interesting time as these rules, you know, laws are finalized. And I think the initial You know, the fact that 45 V's in the mix and that there is a safe harbor aspect, I take as a real positive for Texas. That being said, I know this will go through gyrations in both the House and ultimately the Senate, and then ultimately in reconciliation between the two bodies. So, I don't want to What we think it is today, there's one thing I can promise you.
Speaker Change: So do you think that the Texas, probably is the largest public with the 45 b since you've already you know.
Speaker Change: Yeah.
Speaker Change: I would say this.
Speaker Change: Oh.
Speaker Change: This is a.
Speaker Change: It's going to be a.
Speaker Change: Interesting time.
Speaker Change: As these rules.
Speaker Change: Walls are finalized and I think the initial.
Speaker Change: The fact that <unk> 45 in the mix.
Speaker Change: And that there is a safe harbor aspect I take as a real positive for taxes that being said I know this will go through gyrations in both the house and ultimately the Senate and then ultimately a reconciliation between the two bodies. So Oh I'm not I don't want to.
Speaker Change:
Speaker Change: You know.
Speaker Change: What we think it is today.
Speaker Change: One thing I can promise you.
Andrew Marsh: It won't be the same, whether it's the end of May, whether it's before the August recess, before December, you know, this is going to, it's going to be sorted out. This is kind of the first, first written volley. Fair enough, fair enough. I agree there.
Speaker Change: It won't be the same whether it's the end of May whether it's before the August recess before December.
Speaker Change: This is going to it's going to be sorted out this is kind of.
Speaker Change: The first one.
Speaker Change: First written involved.
Speaker Change: Okay Fair enough fair enough I agree there and then just my follow up I think I've mentioned in your prepared remarks around conversations with customers do you know on Dot is just maybe adding surcharges.
Andrew Marsh: And then just my left follow-up, I think you had mentioned in your prepared remarks around conversations with customers. Unknown Speaker maybe adding surcharges. How have those conversations been? Have you started those conversations with your customers? You know, one of our, there has been some initial conversation. Now, at the moment. We're pretty much so we had Unfortunately, inventory that we're trying to burn down, and we have goals to reduce that significantly during this year. So we are protected on the inventory level, which actually has not really caused our costs to go up yet. If I look at again, at the towers, which The Tower's Truce that went into effect, it really doesn't impact us.
Speaker Change: How have those conversations been IV started those conversations with your customers yet.
Speaker Change: Yeah.
Speaker Change: One of our there has been some initial conversation.
Speaker Change: At the moment.
Speaker Change: <unk>.
Speaker Change: We're pretty much so.
Speaker Change: We had.
Speaker Change: Unfortunately inventory that we're trying to burn down and we have a goal to reduce that significantly during this year. So we are protected on the inventory level.
Speaker Change: Which actually has not really caused our costs to go up yet.
Speaker Change: And.
Speaker Change: If I look at again at the tower switch.
Speaker Change: The towers truths that went into effect and it really doesn't impact us on the Electrolyze your business as we mentioned.
Andrew Marsh: And on the electrolyzer business, as we mentioned... Products were just about signed. not looking to have Chinese content. So when you put all that together, we feel We, you know, I don't know if that's going to be a requirement quite honest. I mean I think that I think that's one of the challenges at the level of uncertainty remains.
Speaker Change: The products will just buy side.
Speaker Change: Not looking to have Chinese content.
Speaker Change: So when you put all that together.
Speaker Change:
Speaker Change: We feel.
Speaker Change: We.
Speaker Change: I don't know, if that's going to be required and quite honestly.
Speaker Change: Yeah.
Speaker Change: Got it. Thank you I mean, I think that's I think that's one of the challenges that the level of uncertainty.
Speaker Change: Remains.
Speaker Change: Fair enough. Thank you.
Speaker Change: Youre welcome.
Operator: Thank you and there are no further questions at this time, so I'll hand, the floor back to Andy Marsh for closing remarks. Thank you.
Operator: And there are no further questions at this time, so I'll hand the floor back to Andy Marsh for closing.
Speaker Change: Yeah.
Andrew Marsh: Well, thank you, everyone. Look, this quarter. We met the numbers we said we were going to meet. Clear about our expectations for the second quarter for revenue. We expect continuous improvements on item site gross margins in the second quarter. We've proven and unlike anyone else in the world. that, who's not a large industrial gas company. We actually know how to build hydrogen plants. And finally, there's a huge, huge market opportunity for plug and electrolyzers in your UK. I guess UK is still part of Europe and Australia. So thanks everyone, I appreciate your time and looking forward to talking to many of you soon.
Speaker Change: Well, thank you everyone.
Speaker Change: Look this quarter.
Speaker Change: We met the numbers, we said we were going to meet.
Speaker Change: No.
Speaker Change: We're clear about our expectations for the second quarter for revenue.
Speaker Change: We expect continuous improvements.
Speaker Change: One item site gross margin in the second quarter.
Speaker Change: We've proven.
Speaker Change: And unlike anyone else in the world.
Speaker Change: Who's not a large industrial gas company, we actually know how to build hydrogen plants.
Speaker Change: And finally, there is a huge huge market opportunity for plug in Electrolyze yours in Europe U K I guess U K is still part of viewer.
Speaker Change: Australia. So thanks, everyone I appreciate your time and looking forward to talking to many of you soon bye now.
Operator: Bye now.
Operator: This concludes today's conference. All parties may disconnect.
Speaker Change: This concludes today's conference all parties may disconnect have a good day.