Plug Power Inc Q4 2024 Earnings Call Transcript

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

Question: Colin Rusch - Oppenheimer - Analyst : Can you talk about the maturity of the financing for a number of the projects that you're talking about in that pipeline, the project financing oftentimes is a key gatekeeper, but just want to get a sense of cash flow, supporting all of those projects at this point.

Question: Colin Rusch - Oppenheimer - Analyst : Yeah, exactly on the electrolysers.

Question: Colin Rusch - Oppenheimer - Analyst : And then on the material handling side, obviously there was a lull in some of the spending in warehouse automation and some of the capacity getting digested in the warehouse space. You talk a little bit about what you're seeing from early indications, we saw some green shoots late in '24, on folks starting to spend again, but any material change in some of the spending patterns that you guys are seeing with some of those customers?

Question: Saumya Jain - UBS - Analyst : So how are you looking at data center backup power generation? How do you see plug benefiting from that in 2025?

Question: Bill Peterson - JP Morgan - Analyst : Want to maybe take the applications question more broader than just the high-power stationary. So I think at the symposium a few months ago, I guess there you thought that the materials handling should probably go to 20% to 30% year-on-year growth, and now you're kind of expecting 10% to 20%. More broadly, I guess, over the next few years, what is going to drive the application's business? Is it going to be materials handed at this stage given your comments around stationary power, not or at least the high-power backup and maybe not viable in the next few years and then mobility appears to be very challenged as well. So what's going to drive the applications business and what's the right way to think about the growth over the next few years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 1:30PM, PLUG.OQ - Q4 2024 Plug Power Inc Earnings Call

Question: Eric Stine - Craig-Hallum - Analyst : Hey, so I can appreciate it sounds like not guiding the fiscal '25, and I know Sanjay you gave Q1, but maybe just some commentary on the year. I mean, should we expect this to be your typical mix first half versus second half? How do you expect the year to play out sequentially? Any details to fill that in would be helpful.

Question: Eric Stine - Craig-Hallum - Analyst : And then maybe a good segue just on the cost reductions in your plan here in 2025. I mean, you gave pretty good detail there, I'm just curious how deep you see those. Is there more room to go if necessary and how do you kind of balance that between, as you said, I mean you've got even though now you're going to be more focused, material handling electrolysers, hydrogen still have a big growth opportunity. So how do you kind

Question: Eric Stine - Craig-Hallum - Analyst : And maybe I'll just sneak in one more just for the $150 million to $200 million in targeted savings, can you just give kind of the high-level mix between cost of goods and OpEx?

Question: George Gianarikas - Canaccord Genuity - Analyst : I'd like to ask, Andy, about your view on the policy environment in Washington. It's clearly quite confusing and just curious as to whether you can share any details on conversations you've had or your view as to how, the next 6 or 12 months will look.

Question: George Gianarikas - Canaccord Genuity - Analyst : Maybe as a follow up, I'd love your thoughts also on what's happening in Europe too.

Question: Tim Moore - Clear Street - Analyst : An important watch point by investors is the positive gross margin inflection point that investors have been eagerly waiting on. You made some really good progress announcing the cost savings plan. I think your prior guidance of the symposium was the expectation back then was to maybe be slightly positive gross margin exit rate for the year. I'm just wondering, now with the significant cost savings plans being rapidly implemented, do you think that exit rate still holds, or do you think you could pull it off in the third quarter for maybe positive third quarter gross margin?

Question: Tim Moore - Clear Street - Analyst : The other question I had is on a different topic. Maybe can you speak to maybe the liquid hydrogen appetite and the sentiment, the H2 hubs network rollouts, a little bit behind schedule. Just -- can you give any color or stories on progress there with some customers and green shoots for takeaway from your production facilities.

Question: Samantha Hoh - HSBC - Analyst : I hate to bring it back to -- hey, Andy. You mentioned a few times about the Texas plant being a very red district that's very pro hydrogen, and the one thing that's really striking me is just how much support the state of Texas has for hydrogen, like enthusiasm overall actually is quite palpable. Has there been any conversation in terms of Texas, funding in any sort of stimulus or what type of initiatives that they can provide to get the industry, the hydrogen industry more competitive or just accelerating the all the developments there if the federal government does kind of pull back on their support?

Question: Samantha Hoh - HSBC - Analyst : I guess the other thing that I'm kind of curious about that, it was like potential monetization of the PCC. I realized that there's still a lot of questions as to what's going to happen with like a potential tax plan ultimately. But what sort of conversations are happening behind the scenes in terms of opportunities to potentially monetize those once we have greater clarity? And then I guess, what are your thoughts in terms of how quickly that could, like, what kind of milestones should we be looking at? Like how quickly can anything on that side occur?

Question: Amit Dayal - H.C. Wainwright - Analyst : Andy, just -- we just sort of the macro environment right now and how you providing guidance. Part of the sales pipeline that was built up until say 2024 is still valid, can you give us a sense of how that aspect of the execution may have changed a little bit?

Question: Ameet Thakkar - BMO Capital Markets - Analyst : Just one quick one for me, given kind of your kind of path here to positive cost margins at the end of the year and the cost cutting, I was just wondering if you could kind of share with us what your plans are in terms of kind of relying on some of the facilities you have for external equity, how much is kind of baked into the year for that?

Question: Ameet Thakkar - BMO Capital Markets - Analyst : You have utilized the convertible facility, right, for like I think it's like you issuances of $22.5 million and I think the first two months of the year. Is that separate from that?

Question: Kashy Harrison - Piper Sandler - Analyst : So my first question is on Georgia. You've now had it running for around a year. Just curious where run rate utilization is on the project and how long it took to get there? And the same question for cost of goods sold. I think you guys were thinking about maybe $4 per kilo of production cost, but I'm just curious, where actual results have landed relative to those expectations.

Question: Kashy Harrison - Piper Sandler - Analyst : And sorry, where is the utilization?

Question: Kashy Harrison - Piper Sandler - Analyst : And then my follow up question is just thinking about just for capacity, I think you talked about 39 tons per day of current capacity, current demand, I believe at 55. You're working on bringing Texas online, which is 45, so you'll have excess capacity once Texas comes online, just given all the comments around, the slower market development than you anticipated. Just wondering where you're envisioning sending those excess volumes to?

Question: Andrew Percoco - Morgan Stanley - Analyst : Maybe just to start out coming back to the DOE loan for a second, I think in the press release you guys cited $400 million of of coverage from the DOE loan on $600 million of of incremental investment. I mean that implies about you know two-thirds coverage on an advance rate. I think 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. MARCH 04, 2025 / 1:30PM, PLUG.OQ - Q4 2024 Plug Power Inc Earnings Call guys had previously talked about 80% advance rates on the DOE loan so just curious what the delta is there and if there's been a change in in maybe the advance rate assumptions that you're having on that facility?

Question: Andrew Percoco - Morgan Stanley - Analyst : And maybe just sticking with CapEx for a second you quote $250 million that you've already spent on the project, another $600 million that you need to spend, gets you to about $850 million all in on a 45 ton per day plant. And if I just do that conversion, it implies like $19 million to $20 million of CapEx per ton per day of production, which I think is actually a little bit higher than Georgia. So just curious, can you just maybe walk through some of your assumptions there? I guess I would have thought it would be lower than Georgia just given some of the learnings that you guys have discussed. So any color there would be helpful.