Q3 2025 Plug Power Inc Earnings Call
Speaker #1: A question-and-answer session will follow the formal presentation. You may be placed into question cue at any time by pressing star one on your telephone keypad.
Speaker #1: As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Teal Hoyos.
Speaker #1: Please go ahead.
Speaker #2: Thank you. Welcome to the 2025 third-quarter earnings call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations, our financial position, or other forward-looking information.
Speaker #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.
Speaker #2: 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.
Speaker #2: 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.
Speaker #2: Including, but not limited to, risks and uncertainties discussed under item 1A risk factors in our annual report on form 10K for the fiscal year ending December 31st, 2024, or subsequent quarterly reports on form 10Q, as well as other reports we file from time to time with the SEC.
Speaker #2: These forward-looking statements speak only as 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.
Speaker #2: At this point, I would like to turn the call over to plug CEO Andy Marsh.
Speaker #3: Good Good afternoon. And thank you for joining us. Plug delivered a strong third quarter. One that reflects continual growth, improving margins, and discipline execution across our global hydrogen business.
Speaker #3: For the quarter, we reported 177 million dollars in revenue, with balance strength across our core businesses. Our GenEcho electrolyzer business generated about 65 million dollars, a 46 percent sequentially, and 13 percent year over year.
Speaker #3: Clear evidence that Plug Technology continues to gain traction globally as customers scale hydrogen production. I think just as important, we’re improving the quality of the growth.
Speaker #3: Operation cash burn improved by more than 50 percent from the prior quarter. Driven by pricing discipline, better execution, and tighter working capital management. These results show the tangible impact of project quantum lead, which is transforming Plug into a leaner, more efficient, and more profitable enterprise.
Speaker #3: Quantum leads about focus, simplifying the business, and aligning investment to near-term profitability. We are also resolving legacy issues that have limited performance. The non-cash charge we recognize this quarter reflects that effort.
Speaker #3: Cleaning up the past while sharpening our strategic priorities. As a result, today, Plug is more streamlined, more focused, and better positioned to deliver continual margin improvement and cash flow gains.
Speaker #3: Operationally, we continue executed scale. To date, Plug has more than 230 megawatts of GenEcho electrolyzer programs underway across Europe, Australia, and North America. A real highlight this quarter was delivery of our first 10 megawatt electrolyzer to gap project in Portugal.
Speaker #3: The first phase of a planned 100 megawatt installation. A clear validation of a Plug's ability to deliver complex world-class hydrogen infrastructure. Our hydrogen production network also continues to improve in August.
Speaker #3: Our Georgia Green Hydrogen Plant produced 324 tons with 97 percent uptime and 92.8 percent efficiency. Underscoring the strength and reliability of our operating platform.
Speaker #3: Earlier today, we announced the strategic initiative to monetize our electricity rights in New York and one other location. In partnership with a major U.S.
Speaker #3: data center developer. This transaction is expected to generate more than 275 million in liquidity through asset monetization and the release of restricted cash. It also positions Plug in the rapidly growing data center market, where our fuel cell systems can deliver resilient zero-emission backup power to mission-critical facilities.
Speaker #3: This is an initiative that is directly linked to our new global hydrogen supply agreement with one of the world's leading industrial gas companies. And potentially purchases from some of our North American electrolyzer companies as they deploy hydrogen sites.
Speaker #3: The agreement secures competitively priced long-term hydrogen supply for Plug and our customers. A major strategic milestone that reduces the need for near-term self-development of new plants.
Speaker #3: As a result, we suspended activities under the DOE loan program, allowing us to redeploy capital towards higher return opportunities across our hydrogen network. Together, these actions strengthen our balance sheet and expand our reach into dynamic new markets, and reinforce our discipline approach to capital allocation.
Speaker #3: Finally, I want to touch on leadership. As announced last month, Jose Luis Crespo will become Chief Executive Officer on March 1. Jose has been instrumental in driving Plug's commercial growth and building our customer relationships worldwide.
Speaker #3: This transition represents continuity in strategy, not change. The roadmap we've built together remains in place, focused on growth, profitability, and disciplined execution. Also, look, the world changes.
Speaker #3: It gives Jose the flexibility to resolve our strategy as the hydrogen market matures. He is the right leader for this next chapter, and I am confident Plug will continue to thrive under his direction.
Speaker #3: In summary, Plug's progress this quarter demonstrates the company that has executed, improving, and building momentum. Our technology, people, and strategy are delivering results. And the fundamentals of our business have never been stronger.
Speaker #3: With that, I'll turn the call over to Jose. We'll discuss our commercial performance and marketing activities in more detail. Jose, thank you. Andy.
Speaker #2: Good afternoon, everyone. And thanks for joining us today. This is my first earnings call as president and incoming CEO of Plug. And I have to say, I'm both excited and honored to take on this role.
Speaker #2: I've been with Plug for 12 years, helping drive our commercial growth and making sure customers are always at the heart of what we do.
Speaker #2: And that won't change. My focus will continue to be on growth, profitability, and discipline execution. As Andy mentioned earlier, we deliver 177 million dollars in revenue in the third quarter.
Speaker #2: And we're seeing solid momentum across our core markets. Let's start with material handling. This business continues to perform well. And our customers are really seeing the productivity and energy benefits that come with fuel with the fuel cell technology.
Speaker #2: More than ever, customers are recognizing how fuel cells free up utility power in their distribution centers. Power that they can use elsewhere or simply save by reducing peak demand.
Speaker #2: And the investment tax credit for fuel cells has been reinstated, which makes the financial case for our customers stronger than ever. We're having great conversations with our major pedestal customers, Amazon and Walmart, about their 2026 plans.
Speaker #2: And we are expecting to continue growth there. We are also excited about new customers like Florian de Cour, where we deployed our GenDrive fuel cells and GenFuel hydrogen systems at their Frederickson, Washington, facility.
Speaker #2: Florian de Cour has a strong potential to grow into one of our next pedestal customers. Now I'm going to turn it into our GenEco electrolyzer business.
Speaker #2: We have delivered $124 million in revenue year-to-date. This is up 33 percent year over year and is putting us on track for a record year in the electrolyzer business, with around $200 million in expected sales.
Speaker #2: We continue to see big opportunities for green hydrogen particularly in replacing gray hydrogen in refineries like GALP and BP and in the reduction of e-fuels and, sorry, in the production of e-fuels such as e-methanol, synthetic jet fuel, and ammonia.
Speaker #2: Our $8 billion electrolyzer funnel remains very active, and the quality of the projects we are pursuing right now is the best that we have ever seen.
Speaker #2: The probability of many of these projects reaching final investment decision, FID, has never been higher. In Australia, governments support remains strong. Andy spent time there recently.
Speaker #2: And we are very encouraged by the progress on the three gigawatt allied green ammonia project as it moves towards FID. We're also happy to have Alfred, allied greens CEO, speak on our symposium next week, November 18th.
Speaker #2: In Europe, we're seeing policy clarity finally take hold as the Green Deal and Red Three mandates are being transposed by the EU member states and becoming law.
Speaker #2: This is giving our industrial customers more certainty around their green hydrogen targets and timelines. We're also seeing subsidy programs like those from the European Hydrogen Bank to start our local real projects.
Speaker #2: Many of which should reach FID in the next 12 to 18 months. And we are already executing at a scale in Europe. We deliver our first 10 megawatt electrolyzer array to GALP in Portugal, part of the 100 megawatt project we have in there.
Speaker #2: And 25 megawatts of containerized systems to Iberdrola and BP in Spain. These are flagship projects that demonstrate Plug's ability to deliver large, complex systems globally.
Speaker #2: Here in the U.S., we announced a new partnership with Edgewood. Plug will provide engineering, plant design, and commissioning for a facility that will convert waste streams into sustainable aviation fuel.
Speaker #2: Renewable diesel and biomethanol. If you want to hear more about that, Steve, Edgewood's CEO, will join us at the symposium on November 18th. So, I encourage you to come.
Speaker #2: Edgewood is a great example of how we are adapting to market conditions. The US continues to support blue hydrogen, and we're using our deep experience with more than 20 percent of our team coming from oil and gas backgrounds to capitalize on those opportunities as well.
Speaker #2: Our path to profitability would be powered by growth. We have built real scalable capabilities. We know how to produce, deploy, and operate hydrogen solutions, and we have an $8 billion funnel of opportunities ahead of us.
Speaker #2: That gives Plug a unique position to lead as the hydrogen economy accelerates globally. Thanks again for joining us today. And I'm looking forward to sharing more at our Plug symposium on November 18th and to continue this journey towards sustainable, profitable growth.
Speaker #2: Back to you, Andy.
Speaker #1: Okay. Question time. Teal?
Speaker #2: Yeah, ready for questions, Kevin, please.
Speaker #3: Thank you. While we're 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.
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Speaker #3: For participants using speaker equipment, it may be necessary to pick up your handset before pressing *1. One moment, please, while we pull for questions.
Speaker #3: Our first question today is coming from Colin Rush from Oppenheimer. Your line is now live.
Speaker #1: Hey, Colin.
Speaker #4: Hi Hi there. You've got Andre Adams on for Colin, but.
Speaker #1: Hi, Andre.
Speaker #4: I've got a couple of questions for you. Hi there.
Speaker #1: Okay.
Speaker #4: So first, could you just speak to the cadence of fuel margin improvements and when we might expect margins for that business to turn positive?
Speaker #1: take that, Paul? Which business did you ask about, Andre? Was there a specific one you mentioned? Oh,
Speaker #4: Fuel. Fuel.
Speaker #1: Yeah. So I'd say what you see is a progression in the margin, even in Q3. We had some plant issues in the network from the suppliers and from ours, but despite that, you see a progression because of the strategic agreement we struck that we're starting to see the benefits from that.
Speaker #1: You'll see even incrementally more benefits from that in Q4 given the leverage of that. And there's certain aspects of that agreement that allow us to work with them and collaborate to navigate the network more efficiently as we move forward.
Speaker #1: So again, it'll start to build. Plus, Plug is continually investing in its own infrastructure and our own networks and how we distribute and manage our plants.
Speaker #1: And so there's just this continual building process. So I expect to see another big step function improvement in Q4. And I think in the course of next year, kind of targeting kind of middle of the year, moving to that break-even target if not sooner.
Speaker #1: So we're laser-focused in it. And we've postured with the right cost structures between what we have in our supply and the supply agreement of the new arrangement that we can continue focusing on all the levers that drive it that direction.
So it's really about liquidity. The start and the second item that's driven a good deal of this is.
And I touched on it. In my opening remarks remarks about not only our relationship with a large industrial gas company.
But we have relationships with people who are going to build hydrogen plants and want our electrolyzers.
So, you know, we looked at the world and said, we know how to do a combination of sourcing competitive, hydrogen, and generating competitive, generating hydrogen to balance those 2 out.
As part of this program, we've been exploring with our product management, team and development team opportunities to provide uh levels of backup power using hydrogen to support the data center deployments.
It'll make sense in some applications. And so, um, that is a real real Focus that, uh, Jose and the team will continue to be engaging in in next year. So, you know, it's, you know, it's not going to be primary power, uh, but uh, at least in 2026, I think when you get an out years, you know, us here in North America and not always aware of activities going in Europe, including hydrogen pipelines. And in that case, you know, plug fuel cells become a real viable solution even for primary power. So, we're excited. Uh, I'm primarily excited that, uh, you know,
Where's the cash going to come from? You know, Paul, I think your cash usage last quarter was operational cash flow of $90 million. Yeah, and that was a 50% improvement. So, you know, we're going to have a good balance sheet to really position ourselves to achieve being.
You know, achieving the goal of, uh, uh, being cash flow neutral as soon as possible is the target.
Hope that helped.
Thank you so much for taking my questions. I'll turn it over. Yeah.
Thank you. Next question, is coming from Eric Stein, from Greg Callum. Your line is now live.
Hi everyone. Thanks for taking the questions.
Hey Eric, how you doing? Hey doing. Well thanks. Um, so just sticking with the data center.
Opportunity. I I remember several years ago you had a, I think it was a pilot project with Microsoft uh to some degree and and so I'm curious, you know, I know that um over the last I don't know, year or 2 years, you've been prioritizing
Some other growth initiatives, but curious kind of how that product offering has evolved or the technology has evolved because clearly, um, you know, certainly sensing a higher level of confidence that that potentially is something near-term. At least in terms of announcements. Whether you know, whether that means your term, deployments are not I guess remains to be seen.
yeah, I would say, um,
We've gained a lot of experience. Eric uh, both in providing a a we have sites where we're actually powering electric vehicles.
uh, we have
Done. Some smaller backup power deployments.
Um, we do see opportunities there. I don't want to.
Overstate the opportunities but uh, you know, the products work.
Um, we have confidence in the products. You know, we think a lot about hydrogen all the time.
Um, so I would just say that uh, I don't want to uh, you know, the big growth opportunities for us is certainly electrolyzer projects that's going on around the world.
Material handling next year will be core to this company's success.
If I think you'll keep on seeing more and more.
Uh, activities associated with data data centers and hydrogen. As you think through how you uh can provide sensibly cost hydrogen to provide that critical backup.
Okay, thank you for that. Um, and then maybe uh, last 1 for me, just I'm it's sounds like you've obviously got a lot of confidence in getting to that gross margin, uh, positive or neutral level exiting the year. But I guess I'm unclear. Whether you have, you know, you're sticking with that. Um and then I also noticed in your commentary. So so let me be clear, we're sticking with that.
Okay, good. All right. That's good to hear it. It it seemed like it but um, just clarifying. Um,
And then on uh ebita positive, that previously had been an end of 2016 goal and I noticed in your release that it looks like that may now be a mid 26 goal. Um, so maybe or I'm sorry. Let's see Target in the second half but potentially before uh the end of the year. So maybe some of the the drivers that are leading to that increased confidence as well.
I think I left Paul answer that 1 uh,
Yeah, and I I, I think, you know, we it may be terminology. We're we're focused on the second half, just given our projections and thoughts on Cadence of sales, and volumes, and cost downs and things that we're doing. I'd say the good news is, uh, it doesn't take much movement of the needle on sales to have a meaningful effect.
Uh, you know, not growing the overall resource base so that we can.
achieve those goals as fast as possible.
Got it. Thank you.
Thank you. Next question is coming from Craig Irwin from Roth Capital Partners. Your line is now live.
Good evening. Thank you for taking my questions. Hey, Craig, Andy. Hey, um, the thing you said in the prepared remarks that got me the most excited is, uh,
That your pedestal customers are moving again.
You can you can you unpack that a little bit for us? Can you maybe explain what they're seeing or or what's changed for them? That has these very important customers saying it's time to buy buy, again grow our fleets and uh, you know, use more fuel cells going forward.
So I want to start up, but you know,
you know, I think that
Uh, you know, the customers.
I mean, we do help the Walmarts in Amazon's move more goods.
And that's the business they're in.
I think that what they have seen,
Over the past. And I can tell you with 1 of these customers, I had deep discussions with over the last 3 months.
and third, when you look at policy and I think all of us were presently surprised that the, uh,
bill that passed in July.
They uh they can see the Quantum Leap is actually working.
The government supports it. And uh, they basically, what's always driven. It was, they save money by using fuel cells.
and,
Not using batteries. So that's why we're growing; it's never been a loss of desire to use the product. I think, uh, us getting our financial house in order.
That's a really nice progress. That's good to hear.
So my next question is really 1 of clarification? And I may be reading the tea leaves a little bit here, but your galp, uh, commentary in the press release. You know, 10 megawatts on the 100th. It sounds like you could probably ship the rest of that pretty quickly. Is it possible that we see uh the rest of galp shipped in the uh in the fourth quarter or is this something that's going to go out over the course of uh, of 26?
We are going to see the majority of it uh before the end of the year, there's going to be uh portion of it that is going to be shipped in q1 mainly uh stocks because the stocks we want to get them there, you know, when as close as possible to uh to installation and commissioning. So you're you're correct. We are we are aiming at shipping the majority of guys in the next couple of months.
I think this is probably the largest real deployment in Europe and I just uh am real deployment in in Europe right now. Yes.
Excellent. Well, congratulations again on the progress. Thank you.
Thanks Greg. Thank you. Greg.
Thank you as a reminder that star 1 to be placed into question Q.
We are permanently signing them over, uh, doesn't mean that there couldn't be other relationships established, but we are permanently signing them over.
and look, uh, as I mentioned before,
You know, you know, by showing we can build plans, we dramatically change the competitive environment for purchasing hydrogen.
These folks and look for opportunities to deploy hydrogen, where it makes sense. So, and look, uh, I think, uh,
when you look at what this will do for our balance sheet, uh, and the fact that uh,
You know, we're taking care, we'll take care of a good deal of the debt overload.
overhang, I think it'll be, uh,
Thanks Eddie. And then on the, um, on the equipment side, for these plants, reaching, FID, over the next 12 to 18 months, sounds like mostly in Europe. Uh, can you tell us a little more about the different sectors? They're in, like, oil refining, for example, and really here, I'm just hoping to get a sense of the um, the revenue opportunity for Downstream equipment.
so uh Sherry's uh we we getting um the majority of the opportunities on green hydrogen right now on um,
On transformation from great, hydrogen in Industry, especially in Europe to Green hydrogen. This is the directive from the uh, the um, European green deal. So given that what we're seeing right now is opportunities. As you mentioned in refineries, there's a lot of opportunity there. There's a lot of hydrogen that needs to be converted.
Um, the laws at the members levels at the at the country levels are are being finalized right now, if not final already, in many of the countries and they determine the pace and the quantities of hydrogen that needs to be converted into green. So that's going to drive adoption. Also, when you think about the same kind of concept, you have, um, the uh, the EU moving or pushing Industries like Aviation and Maritime towards ewells. So we see a lot of the opportunities also on, uh, on sustainable Aviation fuels and, uh, ammonia or ethanol. So, we are seeing the majority of the projects at scale in those areas, uh, in, in in Europe and really globally. Same thing in, in, in Australia, we are working with Oli green, for an ammonia project, which is kind of the same logic. And um, and the, the majority of the large projects are in that in in those
Markets.
That's a great color again. Thank you, both.
No, thank you.
Thank you. Our next question. Today is coming from Samir. Joseph you from HC Wayne Wright. Your line is now live.
Hey Samir. Hey, Andy. How are you? Uh, okay. Thanks for taking my questions. Uh, Jose. First of all, congratulations for the new role, uh, looking forward to working with you.
Uh uh just uh follow sort of follow-ups on some of the earlier questions. Um, we of course we have uh Portugal 10 megawatts and maybe a majority of the 100 megawatts going before the end of the year. Uh and then Australia is also emerging uh given the international exposure are you, um planning to deploy uh resources like are you increasing um your sales uh presence uh in Europe and Australia and other regions?
Yeah. So uh
Samir, we have a big presence, especially in Europe already.
We have probably close to 300 people in Europe, Paul. Yeah, so, you know, we have, you know, if you look at our product development activity, a good deal of that happens in, uh, alphan in the Netherlands.
uh, if you start thinking about how we
Build an electrolyzer product. Uh, the products that are going to, uh,
Gap. Uh, the system portion of it are actually built with 1 of our fabricators in the Middle East and it's sent to, uh, sent to Portugal and our Stacks are married at the site. You know, we have, uh, activity in Vietnam. We have a large integrator. We have large integrators in Europe so we do have a relatively large.
Was we do have a sales team in Europe. We do have a sales team in Australia, we do have sales people in the Middle East. So you know that, uh, you know, we don't expect, you know, there may be some strategic decisions to make some expansion but we are there already.
And I think and more important we can make products there already.
So if you think about gal, what we're using doesn't really have. You know, the Trump tariffs have almost zero impact on as a gap.
Yeah, no, it makes sense. Uh, thanks for that color, Andy. Um, on the, on the cash. Uh, and balance sheet front. Of course, this, uh, uh, transaction, uh, will provide additional cash or free up additional cash. Uh, I think when the last couple of days was, uh, completed, they will talk about, uh, paying down some of the York will lower.
Um, given all these Dynamics, uh, how long, uh, do you have a Runway meaning? I think it is, is it going to extend beyond 2026 with your current cash on hand, or how should we look at your cash flow and over the next 12 to 18 months?
Yeah, it's a good question. Um, I guess I just put contacts that, if you look over the last 2 years, the fact that each consecutive year, we continue to reduce the burn by 50 to 60% directionally. It's going the right way. Right? So when you look at next year, I mean we haven't given exact guidance and and thoughts on next year, but I would tell you, I certainly expect that Trend to continue, um, and it should be, you know, uh, a much more nominal amount. And when you look at, um, the the combination of the capital that we we had on our balance sheet as the end of the third quarter. Plus the capital rates from the recent, uh,
Uh, Equity transaction from an existing investor and then you look at uh, the 275 million targeted on this data center deal, you know? Uh, we we, we feel like we we have more than ample Capital accessible to us to, uh, to bridge through that positive cash flows and so we're in a great position and and that, you know, we we even have more if we wanted to to de-lever some of that we could. So and and probably will work with our lenders to do that. So, um, you know, it's just a question of timing, but uh, we feel like we're in a great position to to navigate through that bridge and and to get to a point when we we get that positive, cash flows,
Understood. Thanks a lot. Paul for that. Uh, and thanks for taking my question. Thanks Samir.
Thank you. Next question is coming from George from core, Junior. Your line is not live.
Hi everyone. Uh, thank you so much for making my questions.
Sure. Oh thanks. Uh, so maybe this is for uh, Australia Luis. I'm just curious, you know. First congratulations on the new role um, coming next year but also
yeah, if we look to March of of 2028,
for 2 years after having taken the position, you know, how, how do you
Think plug will look different. I mean, what are the metrics by which, you know, we should sort of Judge the performance of the company, by then, obviously, profitability is is a big milestone, but what?
Growth drivers. Do you think we should look forward to over the next couple of years that may be underestimated by by us on the side of the table? Thank you.
So, first George, thank you. Um, he's excited to uh, to take over this uh, these new role. And uh, on the question 2028, uh well, you know from 28. Yeah, he asked about 20 years, do you somehow
Gave I gave you 2 years, I gave you 2 years, you're only giving him a few months. Um,
In line to what we've been discussing profitable company. Now, uh, you know, being able to, um,
14 over 14 uh billion dollars. And obviously we we we have only studied scratching the surface on that market, right? So as you know more hydrogen is available. Uh the cost of the technology goes down, we will we will uh go deeper into that market as well. And then, as you said before and we were talking before, um, we kind of put a little bit of a pause on, um, high power stationary. But by that time, probably we'll be, we will be thinking about taking again on that product line and thinking about growing it for applications, like what we were talking before the uh the data center Market once we understand and and find solutions for the hydrogen equation on that market. And there will be a pretty um substantial opportunity for growth in that market as well.
so,
Those are some of you may have other ideas on 2028. Well, I would just say, um, a strong balance sheet, strong Revenue growth in our core markets.
It's clear that hydrogen needs to be part of the global Energy Solution.
Whether as a substitute in things like ammonia or methanol, methanol production, oil refineries... but you know,
execution over the next year, will open up a whole new array of opportunities.
And I'll be cheering for you as a chairman.
Thank you, and maybe as a follow-up, clearly.
A thing, or an increase in activity from a legacy perspective in Europe. When when you go into these competitive bids, what's the? I guess? Top couple of reasons that you're winning and who are you seeing from a competitive perspective? Thank you.
Uh, and the way that the customer answered was, um,
when we look at other electrolytes or companies,
almost 3 decades.
And uh, and that's also really valuable and when we when we start, and when we have started to show that we can turn around the company and our financials are beginning to improve. This makes a very strong partner for anybody. That is looking to deploy an electronic, uh, project in anywhere in the world, really
thank you.
Thank you. Next question is coming from Chris Sing from Wolfe Research. Line is now live.
Andy, I, I wanted to just clarify on Texas, like about the doe loan with the activities. Pauses, is that the other location for the electricity rights? That was sold?
Okay. All right. I understood. Um, all right, and then maybe just as you continue to show up your balance. You were just starting with better and better just cuz you potentially looked at that best or monetized, your Georgia asset, or maybe even your Tennessee and Louisiana like liquefaction sites.
I don't expect to.
We're going to keep, we're going to keep operating those facilities. Give us, um, first cost competitive hydrogen, but look, it, it, it lets people know,
uh, you know, you know, we can um,
We can deliver hydrogen our cells and produce cost effective hydrogen.
So, I think it's a
Um, a healthy, it gets us a healthy negotiating position.
the fact, we know how to build.
That? Okay. Go ahead. Chris.
Today is coming from buying things from, uh, B, Riley security. Your line is now live.
Hey guys, thanks for taking my questions. Hey Ryan. Ryan Ryan, you're going to be my last question. Ever is the CEO on an earnings call?
Andy. That's why I waited to hit star 1 because I wanted that honor, actually.
That would be a good question. Ryan, Bill Peterson just
For the electricity rights. Monetization are there other opportunities to complete similar transactions based on the assets that that you have today or will this likely be the only announcement of, uh, of this kind?
Yes.
Excellent. Thanks, guys. I'll turn it back. Okay, sorry there. I was hoping you were the last, but still, our last question is coming from Bill Peters from JP Morgan. Your line is live.
Yeah. Hi, Andy. Uh, Jose Luis and Paul and I thought I had Star 1 like 45 minutes ago at a Bernie. I didn't, so happy to be your last question here. I'm actually probably a few sort of clarifiers that your follow-up students of the prior questions. Um, maybe first on the quarter, you just reiterated that $700 million is a target. Um, maybe within that, sort of the puts and takes amongst the various segments you have on the common, and then on gross margin neutral. I think you're probably saying that's coming off the adjusted loss of $37 million and not the GAAP loss of $120 million. So I guess, similarly amongst your various segments, what are the puts and takes that get you there? That's my first question, and then I'll save the last one for Andy on the second one. Okay. You want to go, Paul? Yeah, and then there's three elements. Bill, one is, if you think about the math on the volume, that means it's higher volume in Q4 than Q3.
So, uh, volume particularly in equipment, sales is incredibly lucrative for us. So that every every incremental dollar of equipment sales Means A Lot, Number 2 is, um, you know, we, um,
We've already been making a lot of traction on service, we're trying to be prudent and thoughtful about, uh, that progression, but we expect that to continue. And that will actually provide, uh, meaningful, uh, margin enhancement and, and Q4 and onward, just from that continued progression. Um, it it helps us in many different ways, but, uh, that's another step function change. As we, we, we, we continue to, to enjoy that.
Positive trend. And then the last as I talked about earlier is fuel, you know, we saw certainly progression in Q3, uh, we we expect to see a lot more progression in in Q4 as we leverage that new platform and we we really continue to drive uh improvements off of our efficiency. So those are the the biggest drivers, that kind of kind of Drive the the levers here for Q4.
Yeah, terrific. And then again it's somewhat similar to the submerged lines of questions but you know in the last year or so you've been focusing primarily on Materials Handling. It sounds like data center is now maybe back to being an emerging application. So can you speak to when you may actually need to make investments to bring on new hydrogen capacity? Um, would you prefer to still pursue Texas or maybe?
Expand your your supply agreements with the third parties under, you know, renegotiated terms. I guess I'm trying to get a sense at this stage. Would you, would you need to pull the trigger around taxes at some point? Or maybe it is your second time you're talking about, or is there any other types of funding you could be considering if that you know, the dealer own which is off the table.
so, um,
I when I take a look, uh,
At uh, or new agreement.
With the industrial gas company.
When I look at opportunities, Jose's been developing for folks who are looking to build plants.
We're going to be.
I don't foresee a need.
In the immediate future.
um,
no, I, you know, we've, uh, we've spent a lot of time, looking at this, uh,
And uh, we sat down and we thought about it from a financial performance point of view, you know, if feels quite honestly bill, it feels really good.
To hand off to Hosea and Paul, I have a balance sheet that works.
You know, we've discussed a lot over the last year about
Quantum Leap. Being improving the income statement.
but uh, look
Um, Jose is going to be and Paul are going to have essentially zero debt.
You know, between the 150 we ended with or 160, the 350, we raised this activity. Um, you know, we're going to focus on. Let's get our debt.
um,
And, uh, now I look at and I want to position them. So, um, and we want to position because we're doing this as a team.
Be positioned that uh you know next year, you know, when Jose goes to see customers, uh, he can he can say to them. Look how strong my balance sheet is look how strong my income statement is. And uh as I mentioned earlier, in the call, people want to buy from us.
And uh, a strong balance sheet, will make it a lot easier. And for every electrolytic dollar whose a cells,
I think, um,
I think the company is much healthier.
And with Jose's leadership.
I think the company will.
Continue to expand. And, you know, I think growth,
Is tied, very, very tightly to this balance sheet and now it's going to be a much. Much better balance sheet.
I appreciate that Andy. I appreciate the dialogue in the past several years. Uh look forward to following the progress and look forward to hearing more about the strategy uh in a few weeks or actually next week. Thanks great, good good. Good end for us bill because I need to remind folks, you can till you can register for digitally, for the, uh, listening to the plugs and poziom. Um,
You know, it's uh, exciting event. We have many C. What customers are going to be here to you? Oh, we have lots of customers.
Uh, we have customers like Amazon and Uline presenting on customer panels. Um, so we'll have lots of customers showcased throughout the different panels. We're excited about that.
I am excited, and I know, uh, teams put a lot of effort in, and we really want to show folks all the great progress.
Plug is made to date, but probably more important is where Jose is going to take us in the future.
So, thank you, everybody.
Thank you.
Thank you that does conclude today's teleconference webcast. Let me disconnect your line at this time and have a wonderful day. We thank you for your participation today.