Plug Power Inc Q1 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : My first question is on policy. And I guess, specifically in Europe, you probably saw last week the Repowering EU the commissioner as well as a lot of industry CEOs signed a declaration to basically massively increase the electrolyzer capacity even within the next, call it, 3, 4 years. I guess my question is that something that Plug feels need to be a part of in terms of having local manufacturing in Europe? And I guess what does Plug need to do specifically in Europe to, I guess, obtain its fair share of the 30 drilling opportunity in Europe? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 09, 2022 / 8:30PM, PLUG.OQ - Q1 2022 Plug Power Inc Earnings Call

Question: William Chapman Peterson - JPMorgan Chase & Co, Research Division - Analyst : And I guess maybe sticking closer to home. I'm actually here in Long Beach (inaudible) I know Plug has a decent presence here. But as there's a number of your sort of peers in the hydrogen space, pretty clearly the hydrogen is very much of interest here at the show. I know you're talking in your shareholder letter to share more on your potential strategy in the second half. But I guess in light of the clear interest, what is -- I guess, -- you said in the past, I think, 2 quarters ago, you don't really want to be providing to an OEM to somebody else to monetize it. But what can Plug do uniquely in a partnership? Would it be also not only provided the fuel cell, but also the fuel itself. I'm just kind of curious what is Plug looking to do in the heavy-duty space.

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : Great. I was hoping you could expand a little bit. And I think if I heard you right, you made a comment that you're looking at projects currently on the electrolyzer side that are 1 gigawatt in size. Did I hear that right?

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : Right. Okay. I guess that was -- so it sounds like it would be a large-scale potential power project that you're in negotiations on.

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : Okay.

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : Okay. And I also just wanted to touch base on margins. So certainly, just kind of noticing that your total gross margin was a little weaker here in first quarter versus fourth quarter. Could you maybe just give a little color on sort of what the main drivers were there. And then additionally, how do you expect to see margins progress during '22? Do you think you'll see margins turn back positive by the end of the year?

Question: Ameet Ishwar Thakkar - BMO Capital Markets Equity Research - Analyst : Just a real quick the acquisitions added $40 million of revenue in this quarter. And I was just wondering on a gross margin basis, like how did that kind of fare relative to, say, your core material handling business and your other products business?

Question: Ameet Ishwar Thakkar - BMO Capital Markets Equity Research - Analyst : Great. And I think Sanjay has kind of touched on a couple of times on the call. But like I think you guys had talked about being able to kind of get PPAs in the $0.025 to $0.03 kilowatt power range. But kind of given higher prevailing power prices and the DOC investigation, the PPA prices have come up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 09, 2022 / 8:30PM, PLUG.OQ - Q1 2022 Plug Power Inc Earnings Call But just to kind of be clear, like are we to kind of understand the kind of all of the kind of power capacity you need for the 70 ton per day exit rate in '22 is largely kind of in place and you kind of be kind of opportunistic and layering kind of additional power capacity to get to the 500 tons per day after this kind of settled down. Is that the right way of looking at it?

Question: Biju Z. Perincheril - Susquehanna Financial Group, LLLP, Research Division - Analyst : A quick question. Thanks for breaking out the revenue contribution from the recent acquisition. So -- the question is, as you sort of ramp your hydrogen production capacity, is there still going to be an opportunity for third-party sales from the equipment from Joule and ACT, et cetera? And Also, can you give us a sense of how much that could be, like in your $3 billion target for 2025, how much is that could come from sort of B sources?

Question: Biju Z. Perincheril - Susquehanna Financial Group, LLLP, Research Division - Analyst : Got it. That's helpful. And then just a quick clarification. The 500 tons per day of capacity you talked about for 2025, is that inclusive of all in volumes? Or is that going to be separate?

Question: Biju Z. Perincheril - Susquehanna Financial Group, LLLP, Research Division - Analyst : And gives you a lot of leverage in your PPA discussions as well as...