Symposium 2024: Plug Doing Real Things Andy Marsh, CEO November 13, 2024 Copyright 2024, Plug Power Inc. Safe Harbor This presentation includes "forward-looking statements" about Plug Power Inc. ("Plug"). These forward-looking statements contain projections of Plug's future results of operations, or of Plug's business or financial position, or other forward-looking statements. Plug intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained i ...

Core Insights - Plug Power Inc. (PLUG) has experienced a 39% decline in stock price year-to-date, underperforming both the green hydrogen industry and the S&P 500 [1][2] - The company has been facing challenges due to high cash burn rates and negative gross margins, impacting its financial performance [4][11] Financial Performance - In Q1 2025, revenues increased by 11.1% year-over-year to $133.7 million, driven by stronger electrolyzer sales and materials-handling demand [7][16] - Cash burn decreased by 50% year-over-year, attributed to the launch of Project Quantum Leap, which aims for $200 million in annualized savings [7][18] - The gross margin improved to negative 55% in Q1 2025 from negative 132% in the same quarter last year, indicating some recovery [11][17] Market Dynamics - The decline in revenues is primarily due to reduced sales of hydrogen equipment and infrastructure, with hydrogen site installations dropping from 52 to 15 year-over-year [9][10] - The competitive landscape includes peers like FuelCell Energy and Bloom Energy, which are also navigating challenges in the green hydrogen market [13] Long-Term Outlook - The green hydrogen market is projected to grow to $30 billion by 2030, presenting long-term growth opportunities for Plug Power [14] - The company has a strong position in the electrolyzer market, with significant deployments in key projects [15] Valuation Metrics - Plug Power is trading at a forward price-to-earnings ratio of negative 2.57X, significantly lower than the industry average of 23.05X [20]

Core Viewpoint - Plug Power is positioning itself as a leader in the hydrogen economy, focusing on expanding its integrated ecosystem and securing significant projects to drive growth and profitability in the coming years [1][16]. Expansion of Hydrogen Economy - Plug Power has expanded its partnership with Allied Green Ammonia, securing a deal to supply 2 gigawatts (GWs) of proton exchange membrane (PEM) electrolyzers for a $5.5 billion sustainable fuels project in Uzbekistan [3][4]. - This project aims to produce sustainable aviation fuel, green urea, and green diesel, with government backing from Uzbekistan [3]. Project Developments - The collaboration with Allied Green continues from a previous commitment to supply 3 GWs of electrolyzers for a green ammonia facility in Australia [4]. - A final investment decision (FID) for the Australian project is expected in Q4 2023, later than the initial Q2 expectation, with manufacturing and delivery of PEM electrolyzers planned for 2027 [5]. Growth Targets - Plug Power is targeting a 30% compound annual growth rate in its energy business and applications business through 2030, driven by its electrolyzer and cryogenic solutions [7]. - The company anticipates 2025 to be a transformational year, aiming for a positive gross margin run rate and significant annual savings through its Project Quantum Leap [8]. Financial Challenges - The company has faced challenges in financing its operations, with net cash used in operating activities amounting to $728.6 million in 2022, $1.1 billion in 2023, and $828.6 million in the previous year [10]. - To fund operations, Plug Power has raised capital through issuing new stock, leading to a significant increase in outstanding shares and a decline in stock price by over 90% in the past three years [11][13]. Funding and Future Outlook - Plug Power has raised $280 million by selling over 185 million shares and secured a $525 million credit facility, along with a $1.66 billion loan guarantee from the U.S. Department of Energy [14]. - Despite these efforts, the company does not expect to reach profitability until 2028, raising concerns about potential future dilutive equity issuances [15].

Core Viewpoint - Plug Power has experienced increased investor confidence, particularly following a significant investment from BlackRock and positive developments in its business partnerships [1][4]. Group 1: Investment and Stock Performance - BlackRock disclosed a stake in Plug Power, holding just under 80 million shares valued at $107.5 million, indicating confidence in the company's long-term potential [1]. - As of the latest trading session, PLUG shares closed at $1.28, reflecting a 4.9% increase for the day and a 42% gain over the past month, although the stock is down 45% year-to-date [2]. - Wall Street analysts have set an average 12-month price target of $1.45 for PLUG, suggesting a 13% upside from current levels, with varying opinions among analysts [7]. Group 2: Business Developments - Plug Power is expanding its partnership with Allied Green Ammonia to supply hydrogen electrolyzer technology for a $5.5 billion green chemical facility in Uzbekistan, enhancing its role in global clean energy infrastructure [4]. - The company reported a first-quarter loss of $0.21 per share on revenue of $133.67 million, but sales of its GenEco electrolyzers surged 575% year-over-year [5][6]. - Looking ahead, Plug Power projects second-quarter revenue between $140 million and $180 million, exceeding analyst estimates [6]. Group 3: Analyst Sentiment - Among 20 analysts covering Plug Power, 12 rate it a 'Hold,' four recommend a 'Buy,' and another four suggest 'Sell,' reflecting mixed sentiment in the market [7]. - The most bullish analyst projects the stock could reach $3.50, representing over a 170% increase from its current price, while the most bearish projection estimates it at $0.50 [9].

Core Insights - Plug Power Inc. has demonstrated strong executive confidence through the recent purchase of 650,000 shares by CFO Paul Middleton at an average price of $1.0339 per share, indicating a belief in the company's long-term strategy and financial trajectory [1][2][3] Company Developments - The recent share purchase follows an earlier investment by Middleton, reinforcing his commitment to Plug's strategy and growth potential in the hydrogen sector [2][3] - Middleton emphasized the operational progress of Plug, including the ramp-up of hydrogen production plants and the commercialization of GenEco electrolyzers, which are crucial for meeting growing demand in material handling and industrial markets [3][4] Industry Position - Plug Power is recognized as a leader in the hydrogen economy, providing a fully integrated ecosystem that includes production, storage, delivery, and power generation [5] - The company has deployed over 72,000 fuel cell systems and 275 fueling stations globally, making it the largest user of liquid hydrogen [6] - Plug's hydrogen plants in Georgia, Tennessee, and Louisiana are capable of producing 39 tons of hydrogen per day, supporting its expansion and reliability in supply [6]

Core Insights - Plug Power has expanded its partnership with Allied Green Ammonia, adding a new 2 GW electrolyzer opportunity in Uzbekistan, bringing the total partnership capacity to 5 GW globally [1][3] - The Uzbekistan project is part of a $5.5 billion green chemical production facility that will produce sustainable aviation fuel, green urea, and green diesel, supported by the Government of Uzbekistan [2] - Plug's electrolyzer technology is recognized as a key component in global decarbonization efforts, with projects spanning multiple continents [4][6] Company Developments - Plug Power's CEO highlighted the company's leadership in the hydrogen transition, emphasizing the successful execution of large-scale projects [3] - The company has deployed over 72,000 fuel cell systems and 275 fueling stations, making it the largest user of liquid hydrogen [6] - Plug is rapidly expanding its hydrogen generation network, with operational plants in Georgia, Tennessee, and Louisiana, capable of producing 39 tons of hydrogen per day [6] Industry Position - Plug Power is positioned as a preferred electrolyzer provider for global decarbonization initiatives, showcasing its ability to support ambitious decarbonization goals [2][4] - The collaboration with Allied Green reflects a shared vision for accelerating the global shift to low-carbon hydrogen across various industries [4] - Plug's integrated hydrogen ecosystem includes production, storage, delivery, and power generation, advancing energy independence and decarbonization at scale [5]

Core Viewpoint - Plug Power's stock surged by 13% as investors received positive signals regarding the company's potential to avoid a reverse stock split, which could negatively impact investor morale [1]. Group 1: Company Actions - Plug Power has proposed to increase the number of authorized shares from 1.5 billion to 3 billion in its preliminary proxy statement for the upcoming annual general meeting [3]. - The company is also seeking approval for a reverse stock split with a ratio between 1-for-5 and 1-for-200, as it struggles to generate profits from its fuel cell and hydrogen sales [3]. - With the current share count nearing 1.1 billion, Plug Power must either authorize more shares or implement a reverse split to maintain its operations [3]. Group 2: Investor Sentiment - Investors are encouraged by Plug Power's assurances that increasing the ceiling on shares outstanding could help the company avoid a reverse stock split [4]. - This positive sentiment among investors is reflected in the rising stock price of Plug Power [5].

Core Insights - Plug Power Inc. (PLUG) has struggled to achieve profitability, leading to a reliance on external capital for operational funding [1] - The company's first-quarter 2025 results indicate some recovery, with revenues of $133.7 million, an 11.1% year-over-year increase [2] - Despite revenue growth, PLUG continues to face challenges with negative gross margins and cash inflows [2][3] Financial Performance - In Q1 2025, PLUG reported a net loss of approximately $197 million (21 cents per share), an improvement from a $295.6 million loss in the same quarter last year [3] - The operating cash outflow for Q1 2025 was $105.6 million, down from $167.7 million in the previous year [3] - The gross margin was negative 55% in Q1 2025, an improvement from negative 132% in the year-ago quarter, attributed to cost reduction and supply-chain optimization efforts [4] Cash Management and Strategic Initiatives - PLUG's cash burn rate decreased nearly 50% year-over-year in Q1 2025, aided by pricing actions and supply-chain improvements [5] - The company launched Project Quantum Leap, aiming for over $200 million in annualized savings, which is expected to enhance cash flow and further reduce cash burn [5] Peer Comparison - FuelCell Energy, a peer of PLUG, had cash and cash equivalents of $116.1 million and used net cash of $75.6 million from operating activities, down 21% year-over-year [6] - Bloom Energy, another competitor, exited Q1 2025 with cash and cash equivalents of $794.8 million and used net cash of $110.7 million from operating activities, down 24.8% year-over-year [7] Market Performance - PLUG shares have declined by 59.1% year-to-date, compared to an 8.3% decline in the industry [8] - The stock is currently trading at a forward price-to-earnings ratio of negative 1.69X, significantly lower than the industry average of 22.83X [10] Earnings Estimates - The Zacks Consensus Estimate for PLUG's bottom line has increased for the second quarter of 2025 and for the full year 2025 over the past 60 days [11]

Summary of Clean Hydrogen Landscape Conference Call Industry Overview - The discussion focused on the clean hydrogen sector, particularly the implications of recent policy changes and macroeconomic factors affecting the industry [1][2]. Key Points 1. **Impact of the House's Reconciliation Bill**: - The bill accelerates the expiration of the 45V clean hydrogen production credit from January 1, 2033, to January 1, 2026, for new construction projects starting after December 31, 2025 [1]. - There is ongoing bipartisan discussion regarding potential extensions to the 45V tax credit, with some support in the Senate, particularly from states benefiting from hydrogen projects [1]. - A final ruling on the tax credit is anticipated by late 2025, rather than the ambitious July 4 deadline [1]. 2. **Project Viability and Tariff Risks**: - Most 45V projects are unlikely to proceed unless construction has already begun and materials are secured [2]. - Tariff risks are creating uncertainty, making it challenging for projects to reach final investment decisions [2]. - Smaller-scale projects may have a better chance of proceeding compared to larger ones due to lower overhead costs [2]. 3. **Cost Challenges and Market Dynamics**: - Many green hydrogen projects were canceled due to higher-than-expected costs for electricity and equipment, driven by high construction costs and limited developer experience [2]. - The industry may benefit from decreasing Western electrolyzer costs and improved reliability of Chinese electrolyzers over the next 5-10 years [2]. - The growth of fuel cell trucks may be slower if the Levelized Cost of Hydrogen (LCOH) remains high [2]. 4. **Regional Developments**: - Green hydrogen is gaining traction in Europe due to stringent carbon reduction targets and renewed focus on hydrogen projects [3]. - Asia, particularly China, is experiencing a surge in green hydrogen deployments, supported by renewable energy resources and initiatives to enhance the electrolyzer supply chain [3]. - In the U.S., state-level incentives may still support hydrogen projects aimed at decarbonizing ports and power generation [3]. 5. **Outlook for Plug Power (PLUG)**: - The U.S. green hydrogen industry's growth is expected to be limited without the 45V tax credit, affecting PLUG's sales pipeline, which may skew towards markets outside the U.S. [7]. - PLUG could benefit from specific customer demand for green hydrogen, given its operational plants eligible for the 45V credit [7]. - The growth trajectory for PLUG's sectors, including material handling, mobility, and stationary power, is anticipated to remain flat until LCOH costs decline [7]. Additional Insights - The clean hydrogen sector is facing significant challenges due to policy changes and cost dynamics, which may hinder growth in the short term [2][7]. - The focus on smaller projects and international markets may provide some opportunities amidst the uncertainty in the U.S. market [2][3][6].

Core Viewpoint - Plug Power is experiencing severe financial difficulties, with a significant decline in stock price and alarming cash outflows [1][3]. Financial Condition - Plug Power's debt has reached $1.1 billion, exceeding its market capitalization of $999 million, resulting in a Debt-to-Equity Ratio of 108% [2]. - The company reported an operating income of -$988 million, leading to an Operating Margin of -153.8% [5]. - Operating Cash Flow (OCF) was -$666 million, reflecting an OCF Margin of -103.8% [5]. - The net income for the period was -$2.0 billion, resulting in a Net Income Margin of -312.3% [5]. Recent Earnings and Projections - Sales increased by 11% year-over-year to $134 million, with a net loss decreasing to $0.21 per share from $0.46 per share in Q1 2024 [6]. - For Q2, the sales forecast ranges from $140 million to $180 million, with a midpoint of $159 million aligning with analyst expectations [6]. - Plug Power has initiated "Project Quantum Leap," a cost-reduction program aimed at achieving over $200 million in annualized savings [6]. Investment Considerations - The current financial circumstances raise significant questions about Plug Power's long-term viability as an investment, despite its involvement in the hydrogen fuel cell sector [3][4]. - Investors are advised to assess whether Plug Power represents a turnaround opportunity or a continued downward trajectory, especially in light of planned cost-cutting measures [4].