Plug Power Inc Q3 2024 Earnings Call Transcript

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

Question: Colin Rusch - Oppenheimer - Analyst : Thanks so much, guys. Just looking at the balance sheet, guys, can you talk a little bit about how quickly you can start monetizing the inventory here for the balance of the year, and into the first part of next year?

Question: Colin Rusch - Oppenheimer - Analyst : Okay, thanks. And then on the restricted cash balances. Obviously there's a variety of covenants that I'm sure you guys are working through. Can you just give us a sense of whether any of that restricted cash could loosen up here in the near term, or if that is not a real strategy that you guys are thinking about?

Question: Colin Rusch - Oppenheimer - Analyst : Fantastic guys. Thanks so much.

Question: Somaya Jane - UBS - Analyst : Hey guys, do you see good price hike? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: Somaya Jane - UBS - Analyst : Good morning. Do you see additional price hikes for the rest of the year or '25? And I guess what are you seeing as your path to positive growth margins, what could drive that?

Question: Somaya Jane - UBS - Analyst : Got it. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: George Gianarikas - Canaccord Genuity - Analyst : Hey, good morning, everyone. Thank you so much for taking my questions. Maybe as a first question, I'd love to ask a little bit about your views on the changing regulatory landscape in the United States, and how that impacts the way you think about the company sort of at an existential level. In other words, do you see opportunities to really grow in other parts of the world to kind of push the company forward into more into Europe and maybe other parts of Asia? Thank you.

Question: George Gianarikas - Canaccord Genuity - Analyst : Thank you. And maybe as a follow-up, can you possibly share some more details on the convert that you referenced during the call? (multiple speakers)

Question: George Gianarikas - Canaccord Genuity - Analyst : Thank you.

Question: Eric Stine - Craig-Hallum Capital Group, LLC - Analyst : Hi, Andy, Paul.

Question: Eric Stine - Craig-Hallum Capital Group, LLC - Analyst : Good morning. Hey, so when I look at the fourth quarter guide, seems to me that it's a little wider than maybe it would typically be just curious. Can you talk to kind of what's in there for the low end? What gets you to the high end? And then I guess my follow up would just be, I know you had electrolyzer sales in Q2, which a good portion of those were not recognized. We're in Q3, just curious how much of that is left and will impact Q4?

Question: Eric Stine - Craig-Hallum Capital Group, LLC - Analyst : All right, that's very helpful. Thanks a lot.

Question: Bill Peterson - JPMorgan - Analyst : Hey, good morning, Andy and team. Thanks for providing all the details here. Maybe following on the question on the range of outcomes. I guess within your base case and assuming mix, how should we think about the exit rate of gross margin in the fourth quarter, and maybe also taking account of any sort of cost reductions you're able to provide. And then specifically, how do we think about gross margins in your fuel business?

Question: Bill Peterson - JPMorgan - Analyst : Yeah, thanks for that Paul. And then I might have missed it, but I guess to the extent that you can speak to, how much is left to be done on the DoE loan closing conditions. Is there any sort of long hold, I guess in particular for Texas, it seems likely is going well but -- or maybe on the capital side, is there any additional capital on top of what you just announced today, or as a DoE looking at further contingency or reserve requirements. Just trying to get a sense of what is remaining to be done, and at what time you're thinking as of now?

Question: Bill Peterson - JPMorgan - Analyst : Thanks, Andy and Paul. I look forward to seeing you tomorrow.

Question: Craig Irwin - Roth Capital Partners - Analyst : Thank you. Good morning guys.

Question: Craig Irwin - Roth Capital Partners - Analyst : Hey Andy. So I'm going to ask a tough question because I know a lot of the investors out there are really looking at it from the standpoint. And I guess it's best to answer these questions in public when we can, right?

Question: Craig Irwin - Roth Capital Partners - Analyst : I hate to be the one that brings this, but it hopefully lifts the dark cloud, right? So in the event that we do not see the DoE loan funded, how much flexibility do you have to sort of restructure the operations and pivot, versus the business plan you've been working on this last year. You guys have shown a continuous ability to raise capital. So congratulations on the $200 million this morning. You still have substantial cash tied up in the PPAs. What do you feel about the flexibility to take a slightly different path than what you've already laid out for us?

Question: Craig Irwin - Roth Capital Partners - Analyst : I would definitely agree with that. Thank you. So my next question, if we look back in history of Plug, right, to your success -- your early success with Walmart, you would never have been able to have the tremendous success, tens of thousands of forklifts operating every day unless you were able to save your customers money with these products, deliver reliably in a more environmentally sound package, and save them money. Now, in the last several years, we've looked at different pieces of the business model, and you've invested a lot of capital in some of these opportunities. Do you still see the same opportunity to save your customers money in things like electrolyzers, in things like heavy transport trucking. And some of these other applications that we've talked about on and off in this last 10 years.

Question: Craig Irwin - Roth Capital Partners - Analyst : Excellent. Then last question, if I may. There's been some really interesting things that have come across my desk in the last 25 years, right? So green hydrogen is interesting, and looks like it could be a phenomenal business over the next number of years. But something that probably has a much longer gestation period is the use of small nuclear reactors for direct production of hydrogen. Now, you guys get approached by pretty much everybody in the market since you are the market leader. Do you see any potential breakthrough hydrogen production technologies that could be available in the next decade that could bring down the cost of energy production by an order of magnitude.

Question: Craig Irwin - Roth Capital Partners - Analyst : Understood. Well, thank you for that, and I look forward to tomorrow. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: Dushyant Ailani - Jefferies - Analyst : Hi, thank you for taking my question. Morning. Just wanted to quickly ask on the plant maintenance for Georgia and Tennessee. It just given the recent start up, could you just share a little bit about what the maintenance involved, and how do we think about maintenance guidance going forward.

Question: Dushyant Ailani - Jefferies - Analyst : Got it. That's helpful. And then just the second one on the ITC transfer monetization. I think you guys have previously talked about roughly $31 million, and then I think a total of roughly $70 million. Just wanted to check on the timing of that. And how do you see that shaping out?

Question: Dushyant Ailani - Jefferies - Analyst : Got it. Thank you.

Question: Chris Sung - Wolfe Research - Analyst : Hey, good morning Andy, how are you?

Question: Chris Sung - Wolfe Research - Analyst : Good, good. I wanted to just ask about the DoE in other way. Given the pending change in administration, wanted to get your thoughts on perhaps like the durability of the loan. Like do you need to reach financial close in order for it to be considered safe, or is the conditional commitment -- like can the conditional commitment be canceled?

Question: Chris Sung - Wolfe Research - Analyst : Okay, thanks. And just one more for me. I know it's probably the last time we're going to hear from you guys before the 45B rules are finalized.

Question: Chris Sung - Wolfe Research - Analyst : Oh, yeah. And we look forward to seeing you tomorrow.

Question: Chris Sung - Wolfe Research - Analyst : Just like what would like Plug's ideal final rules be, is it loosening additionality, time matching? What would you guys want?

Question: Chris Sung - Wolfe Research - Analyst : (inaudible) Appreciate the color, thanks and look forward to seeing you guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: Amit Dayal - H.C. Wainwright & Co. - Analyst : Thank you. Good morning Andy.

Question: Amit Dayal - H.C. Wainwright & Co. - Analyst : Yeah. So with respect to this 8 gigawatt BEDP contracts that you have, what's the delivery time line for these contracts? Is it like next 12 to 24 months or maybe longer?

Question: Amit Dayal - H.C. Wainwright & Co. - Analyst : And Sanjay, is that 8 gigawatts? I know it's early stage overall, but is that dependent on any sort of regulatory incentives, et cetera, to materialize in a complete manner. Sanjay Shrestha - Plug Power Inc - General Manager - Energy Solutions, Chief Strategy Officer, Executive Vice President Yeah, in that entire 8 gigawatt of basic engineering design packet, I mean, a lot of that as Andy referred to earlier, right? Majority of that is really in Europe and Australia where so the policy here in the US doesn't really have any interplay with that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call We do, however, have about 300 megawatt of opportunity related to the US market, could actually get pushed to the right or that could actually need some further clarity. But out of that 8 gigawatt, for example, there is a 3 gigawatt opportunity in Australia, there is another 1.5 gigawatt opportunity again in Australia, there's 500 megawatt opportunity out of that 8 gigawatt that's in Europe. So most of this mix is really Europe and Australia if you would, in terms of what makes that up.

Question: Amit Dayal - H.C. Wainwright & Co. - Analyst : Thank you, Andy. That's all, I appreciate the color.

Question: Tim Moore - Clear Street - Analyst : Good morning. My DoE conditional loan, and hey, good morning, actually at the airport coming to your Symposium. But my DoE conditional loan and 45 production tax credit questions were the answer. But I wanted to ask based on the election outcome last week, when would you maybe start marketing or targeting oil and gas customers?

Question: Tim Moore - Clear Street - Analyst : Understandable. Yeah, I was just wondering if you're going to target them more, because we keep reading about their appetite for blue hydrogen. I'm just wondering if you're really going to step it up and try to substitute a blue hydrogen wave.

Question: Tim Moore - Clear Street - Analyst : Good. Now, and the other question I had was on your BEDP of the 3 gigawatts with Australia, the alloy green ammonia. You put out that nice press release last month about the binding framework agreement that talked about late 2026 or early 2027 for system delivery. Do you think there'd be a sizable amount of revenue recognition that could flow through your income statement in the first half of 2026, given that it's complicated design package deal with milestones. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: Tim Moore - Clear Street - Analyst : Great, thanks. And I'll see you tomorrow at the Symposium.

Question: Andrew Percoco - Morgan Stanley - Analyst : Thanks for taking the question. Good morning Andy, thanks for taking the question. I have a higher level and maybe more longer term strategy question here. And it's just kind of -- it's around the thoughts around some of these new market like stationary power, on-road vehicles. Obviously, it's been somewhat of a challenge to scale those businesses. The unit economics of green hydrogen is kind of ebb and flowed, depending on prices of renewable electricity, which obviously has drifted higher here over the last two years. I'm just wondering is there a scenario where you would be okay, just kind of going back to your roots, and providing the material handling units, and maybe meaningfully reducing your exposure to some of these newer fuel cell markets. Just in order to kind of get your business and your company back to a point of financial strength.

Question: Andrew Percoco - Morgan Stanley - Analyst : Understood. And maybe if you could just elaborate on what global markets, you do see the most attractive unit economics for electrolyzers and maybe some of your fuel cell technologies. I mean, I think we've seen obviously in the US some challenges, but even in Europe, there's been a number of some fairly high profile green hydrogen projects get canceled or pushed to the right a little bit. So I'm just kind of curious where that bullish commentary, or thought comes from what global markets are you seeing that, right?

Question: Andrew Percoco - Morgan Stanley - Analyst : Understood. I'll take the rest of it offline. Thank you guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 1:30PM, PLUG.OQ - Q3 2024 Plug Power Inc Earnings Call

Question: Kashy Harrison - Piper Sandler - Analyst : Hey, good morning, all. And thank you for taking my question. I just have one. I want to be mindful of the time here. I had a question about the fuel cell ITC. It expires at the end of this year. And I was wondering if you expect your fuel cell products to qualify for the tech neutral ITC or PTC. And if not, just how are you approaching the expiration of ITC in your pricing discussions with customers for 2025? Thank you.

Question: Kashy Harrison - Piper Sandler - Analyst : Thank you.

Question: Ameet Thakkar - BMO Capital - Analyst : I don't know about the last part. But a quick -- two quick ones. Just wanted to follow-up on the convert real quick. So the buyer of the convert, they do have the ability to convert into common shares, I guess monthly, is that correct? And what are the conditions that they have to have to kind of convert on a monthly basis?