LATHAM, N.Y. — Plug Power Inc. (NASDAQ: PLUG), a leading provider of turnkey hydrogen solutions for the global green hydrogen economy, has announced today its 2022 first quarter results.
The quarterly shareholder letter has been posted at https://www.ir.plugpower.com/Q122Plug.
- Reaffirms Full-Year Targets
- Clear Path and Strategic Initiatives to Deliver Margin Expansions
- Announced Strategic Acquisitions and Collaborations, Positioning Plug as the Global
- Leader for Green Hydrogen Solutions
- Strong Balance Sheet to Execute on Growth Objectives
- Plug Rebrand Reflects Commitment to Guiding the World to a More Sustainable Futur with Accessible, Reliable and Cost-effective Green Hydrogen Energy
Summary of First Quarter Financials
Revenue was $140.8 million this quarter compared to $72 million for the first quarter of 2021. Material handling represented approximately $96 million in revenue in the quarter, with other product offerings representing approximately $44.8 million in revenue in the first quarter of 2022, including electrolyzer solutions and recent acquisitions. We would like to remind investors that, historically, the first half typically represents 30% of full year revenue with second half revenue representing 70%. We expect this seasonality to continue into 2022.
Plug remains focused on delivering on our previously announced target to reduce services costs on a per unit basis by 30% in the next 12 months, and 45% by the end of 2023. We are pleased to report that we have begun to see meaningful improvement in service margins on fuel cell systems and related infrastructure with a positive 30% increase in first quarter of 2022 versus the fourth quarter of 2021. The service margin improvement is a direct result of the enhanced technology GenDrive units that were delivered in 2021 which reduce service costs by 50%. The performance of these enhanced units demonstrates that the products are robust, and we expect these products will help support our long-term business needs. We believe service margins are tracking in the right direction with potential to break even by year end.
Also highlighted in our last earnings call, margins in the fuel business continue to remain under pressure and were down sequentially due to increased hydrogen molecule cost associated with higher natural gas prices. Natural gas prices at Henry Hub, on average, were up over 13% in the fourth quarter of 2021 versus the third quarter of 2021. This had a direct effect on the average price paid per molecule by Plug. We expect margins to remain under pressure in Q2 2022 driven by continued increase in natural gas prices. We are also focused on reducing logistics costs and improving system efficiency to mitigate some of these commodity and inflationary pressures in the near term. As we have previously highlighted, we should see a step change in margin profile for the fuel business in 2023 as we expect to see the cost of molecules decline by more than half
as our green hydrogen plants come online.
Read the Entire Letter to Investors
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