LATHAM, N.Y.– Plug Power Inc. (NASDAQ: PLUG) (the “Company”), a global leader in comprehensive hydrogen solutions for the green hydrogen economy, announced its financial results and operational milestones for the first quarter of 2024.
First-Quarter Results
- Earnings-Per-Share (EPS) and Revenue: The Company reported revenue of $120.3 million and EPS loss of $0.46 for the quarter ended March 31, 2024.
- Enhanced Focus on Cash Management: Net cash used in operating activities and capital expenditures (includes purchases of property, plant, and equipment and purchases of equipment related to power purchase agreements and equipment related to fuel delivered to customers) collectively decreased 38% quarter-over-quarter (QoQ), and 42% year-over-year (YoY), with incremental improvement expected as internal hydrogen supply and pricing increases make an impact in coming quarters. Inventory reduction remains a key priority in our cash management strategy for 2024.
- Gross Margins: The Company saw headwinds on equipment margins given focus on lowering inventory and limiting production, coupled with lower sales level collectively generating unfavorable overhead absorption; but given the restructuring announced coupled with ramp on volume for the balance of the year, the Company is postured to drive overhead leverage to improve equipment margins. The Company saw improvements in the quarter’s gross margins for Fuel Delivered, Service, and Power Purchase Agreements versus the first and fourth quarters of 2023, as well as lower operating expenses.
Consistently with past seasonality and continued new product scaling, Plug expects that one-third of its full year revenue will be in the first half of 2024. As of the Q1 2024 earnings date, Plug currently has 20 electrolyzer systems undergoing commissioning at third-party customer sites, with further deliveries to be made over the balance of 2024. The Company is also experiencing rebounding sales in its material handling business following the recalibration of pricing and changing of the business model to direct sales or customer-financed leases. In Q1 2024, for example, Plug expanded its partnership with Uline, extending hydrogen infrastructure and fuel cell solutions to an additional four sites and secured a substantial deal with a leading U.S. automotive manufacturer to provide its extensive new 6 square-mile manufacturing campus with Plug’s hydrogen infrastructure and fuel cell solutions. These commercial successes are clear demonstrations on Plug’s value proposition following changes to our pricing and sales model.
Hydrogen Generation Network Milestones and Advancement
In Q1 2024, Plug’s hydrogen generation network reached significant milestones. The Georgia and Tennessee plants have produced at nameplate capacity, with a combined liquid hydrogen production capacity of 25 tons-per-day (TPD). Additionally, Plug’s Louisiana plant is on track for completion and first production in 2024, adding 15 TPD and bringing the Company’s total liquid hydrogen production capacity to 40 TPD. The addition of the Louisiana plant capacity will effectively meet the majority of Plug’s customer demand through its internal hydrogen generation network.
Plug continues to advance the pending loan guarantee from the Department of Energy (DOE) and awaits conditional commitment approval announcement; this program is expected to bolster the build out of Plug’s liquid hydrogen facilities throughout the U.S. Commensurately, the Company has commenced a process with advisors to complement its anticipated DOE project with project equity investors and/or project finance partners to finance the build out of the plants.
DOE Grants to Advance Capacities at State-of-the-Art Manufacturing Facilities
Through a highly competitive process, Plug, alongside project partners, secured awards from the DOE for grants of up to $163 million for use in Clean Hydrogen Electrolysis, Manufacturing, and Recycling projects. These grants will continue to advance Plug’s fuel cell and electrolyzer manufacturing capacities at its state-of-the art facilities in Rochester and Albany NY. Plug received the most awards in the $750 million total funding aimed to reduce the cost of hydrogen in the U.S., showcasing its leadership and commitment in the hydrogen and fuel cell industry.
Continued Growth in Electrolyzer Basic Engineering and Design Package (BEDP) Offering
Recent announcements in Q1 2024, bring the Company’s total amount of global BEDP contracts to ~4.5 gigawatts (GW) for Projects in the U.S. and Europe. Electrolyzer sales present a substantial growth lever for Plug, and the BEDP success underscores Plug’s strong industry positioning and market growth, while enabling customers to reach Final Investment Decision (FID) on their hydrogen projects.
Expansion in Cryogenic Sales
Plug has seen ongoing expansion in cryogenic equipment sales with customer agreements encompassing storage tanks, trailers, vaporizers, and portable units, both domestically in the U.S. and internationally. Additionally, Plug has delivered several first-of-its-kind liquid hydrogen portable refuelers to transit agencies and trucking fleet customers.
Financial Updates
- Q1 Financial Performance: Sales of $120M reflect seasonality in our equipment sales and timing impacts from electrolyzer deployments.
- Internal Hydrogen Supply: With Plug now producing up to ~25 TPD from our Georgia and Tennessee hydrogen plants, the Company will be able to displace higher cost third-party fuel with our own internal supply.
- Pricing Increases: To better reflect the economic value of our product offering, Plug has worked with customers to put in place price increases across our entire product portfolio with a specific focus on hydrogen pricing. We expect to see a positive impact to our margins in coming quarters as a result of these actions.
- Restructuring, Impairment, and Other Provisions: As a result of the evolving market dynamics, Plug mobilized certain cost down actions in the first quarter. This included headcount reduction, rooftop consolidation, and non-payroll cost downs. This resulted in restructuring costs of ~$6 million in the quarter. In addition, given certain business dynamics, the Company wrote down certain assets which resulted in non-cash charges recorded in Q1 2024 of ~$40 million. Further details regarding these charges are provided in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
Plug CEO Andy Marsh stated: “We continue to make steady progress by following our established goals and business priorities. As we enhance our financial performance in the upcoming quarters, Plug is set to retain its leadership role in advancing the hydrogen economy, which is anticipated to experience swift expansion and widespread adoption globally in the future decades.”
Conference Call
Plug Power has scheduled a conference call today, May 9, at 8:30 am ET to review the Company’s results for the first quarter of 2024. Interested parties are invited to listen to the conference call by calling 877-407-9221 / +1 201-689-8597.
The webcast can be accessed at:
https://event.webcasts.com/starthere.jsp?ei=1666679&tp_key=8ea4578409
A playback of the call will be available online for a period following the event. A presentation will be made available in connection with the call at: https://www.ir.plugpower.com/events-and-presentations/default.aspx
About Plug
Plug is building an end-to-end green hydrogen ecosystem, from production, storage, and delivery to energy generation, to help its customers meet their business goals and decarbonize the economy. In creating the first commercially viable market for hydrogen fuel cell technology, the company has deployed more than 69,000 fuel cell systems and over 250 fueling stations, more than anyone else in the world, and is the largest buyer of liquid hydrogen.
With plans to operate a green hydrogen highway across North America and Europe, Plug built a state-of-the-art Gigafactory to produce electrolyzers and fuel cells and is developing multiple green hydrogen production plants targeting commercial operation by year-end 2028. Plug delivers its green hydrogen solutions directly to its customers and through joint venture partners into multiple environments, including material handling, e-mobility, power generation, and industrial applications.
For more information, visit www.plugpower.com.
Plug Media Contact
Fatimah Nouilati
Allison
[email protected]
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