Plug Power Inc. Q2 FY2025 earnings call

Business Priorities under Project Quantum Leap

• Drive gross margin improvements through operational efficiencies, cost reductions and improved pricing discipline.
• Streamline operations by consolidating facilities, optimizing manufacturing footprint and accelerating productivity gains.
• Strengthen reliability and performance of service business with unit level improvements and better pricing models.
• Expand hydrogen generation network while improving hydrogen supply cost structure.
• Advance electrolyzer business by building robust sales funnel and securing early-stage agreements ahead of customers' final investment decisions.
• Maintain strict cash discipline to bridge to positive EBITDAS in Q4 2026.

Q2 Financial Results

• Revenue of $174 million, up 21% year-over-year, driven by strong demand across platforms.
• Electrolyzer sales more than tripled to ~$45 million, highlighting GenEco's role in industrial scale applications.
• Gross margin improved from -92% in Q2 last year to -31% this quarter due to deliberate actions, better service execution, competitive hydrogen pricing and product cost reductions.
• Hydrogen plants in Georgia and Louisiana performing well; Georgia operating as requested, Louisiana ramping with Olin relationship being lowest cost site.
• On track for ~$700 million in revenue this year; electrolyzer pipeline robust with deals expected to close in 2025 and major contracts moving towards FID in 2026.

In the second quarter, Plug Power closed with $174 million in revenue, up 21% year-over-year. Driven by strong demand across GenDrive, GenFuel and GenEco platforms. Electrolyzer sales more than tripled from a year ago, reaching roughly $45 million in the quarter, which accounts for approximately 25.86% of the total revenue ($45 million / $174 million). Gross margins improved from negative 92% in Q2 of last year to negative 31% this quarter, due to operational efficiencies, better service execution, competitive hydrogen pricing and product cost reductions.

• Expect ~$700 million in revenue this year.
• Electrolyzer pipeline is robust with some deals expected to close in 2025 and major contracts moving towards FID in 2026.
• Aim for gross margin neutrality by Q4 2025.
• Remain on track to achieve positive EBITDAS in Q4 2026.
• Second half revenue is confident with progress on various fronts.

• Risks and uncertainties discussed in Item 1A Risk Factors in annual report on Form 10-K for fiscal year ending December 31, 2024, quarterly report on Form 10-Q for quarter ending March 31, 2025, and other SEC filings.
• Market uncertainties, policy changes, operational challenges in scaling hydrogen generation and electrolyzer businesses, and potential impacts of tariffs on material handling business.

Q: Can you talk about the electrolyzer pipeline?

A: Jose Luis Crespo said there's a very strong funnel on the electrolyzer side, mainly driven by opportunities in Europe. Some projects closed, some going FID in 2026. Working with projects to get agreements pre-FID and setting up revenue recognition over time.

Q: What's changed for you guys in the last couple of weeks with the 45E, 48E?

A: Jose Luis Crespo said customers are excited about it. For electrolyzers, it opens up a big opportunity for customers to take advantage of PTC and make business cases feasible. Reignited many conversations, especially in the U.S.

Q: Could you give an update on your plans for the Texas facility?

A: Andrew J. Marsh said they're looking to commence construction by the end of this year for Texas. Have power from NextEra deal, water available, working closely with DOE. Good chance to bring in a partner by mid-fourth-quarter.