Plug Power, Inc.

Hello, and welcome to the Plug Power third quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Teal Hoyos. Teal, please begin.

Thank you. Welcome to the Plugged Power 2020 Third Quarter Earnings Call. This call will include forward-looking statements. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements because they involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under Item 1A, Risk Factors, in our annual report on Form 10-K for the fiscal year ending December 31, 2019, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day in which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call. At this point, I would like to turn the call over to Plug Power's CEO, Andy Marsh.

Thank you, Teal, and thank you for joining Plug Power's third quarter conference call. I'd just like to provide a few minutes overview. Please refer to our investor letter for detailed description of the past quarter. First, I'd like to highlight our operational performance. Company achieved 126 million in gross billing. This represents 106% increase from the third quarter of 2019. Second, this quarter, is really a strong validation of our business model in years to come. I think many of you know we're targeting 20% EBITDA in 2024. We achieved 19% EBITDA on an adjusted basis this past quarter, generating $21.2 million of adjusted EBITDA. The cost of warrants greatly increased this past quarter because of our increasing stock price, which can hide this significant achievement. Third, and just to highlight the acceleration of our business, in all of 2018, we shipped approximately 5,000 units versus the 4,000 gen drive units delivered the past quarter. We also built 13 hydrogen fuel stations this quarter. Again, another record. This business is growing as expected. And we are moving in to on-road vehicles and large-scale backup power systems. First on on-road vehicles, we have deals with Linde, Doosan, and Lightning. We also have a fourth large OEM, which we are deploying vehicles for testing in Europe. Our approach to the on-road vehicle market is really straightforward. Partnerships for ventures with large OEMs, which may require some product modifications on our part for large-scale business, and standard products for integrators and low-volume applications. Now, the reason we can do it is because of the high density of our ProGem module, which is 30% to 45% higher power density than our competitors, making our products easier for customers to integrate into existing battery electric vehicles. very similar to our approach to electric forklift trucks. These same pro-gen building blocks we've developed for on-road vehicles is leveraged into our large-scale backup power solution. We have closed deals for this product, and we'll be deploying units at the end of the second quarter of 2021. I've become increasingly more excited about this opportunity for both data center customers And now I'm finding logistic customers. The same restrictions limiting deployment of internal combustion engines in certain regions for vehicles, we are now also seeing similar regulations impacting the deployment of diesel generators for large-scale backup power systems. Fuel cell and hydrogen, because of energy and gravimetric density, have the same advantages in the markets as on-road vehicles versus batteries. An example that I've been told from both a logistic customer and a data center customer that the regional restrictions are real. For example, California is forming customers that they must prepare to have 96 hours of backup power because of the instability of the electrical grid. And by the way, they say, you can't use diesel gensets. We believe that hydrogen fuel cells are really the only viable solution to meet this requirement. And I think what's more important, in my opinion, I think you're hearing end customers say the same. I'd also like to highlight our progress in building five green hydrogen plants that will generate 100 tons of green hydrogen by 2024. We have announced partnerships with APEX and Brookfield to provide a source of green hydrogen from solar, wind, or hydropower. We're in the design phase for two of our new hydrogen plants and expect completion by the end of 2022. We're leveraging our expertise in operating designing plants from our recent United acquisition and the ability to convert renewables into green hydrogen from our acquisition of Giener ELF. The demand for green hydrogen is closely tied to our present customers' sustainability goals. Plug Power is projecting that by 2024, our own internal demand will approach 100 times per day. With another note of interest to investors, our Gigafactory is progressing, and with the election now over, we expect an announcement will be forthcoming for the location. The equipment to support the Gigafactory is on order, and we expect first production in late Q2 2021. And finally, I'd like to highlight that we will be increasing our gross billing target for this year from $310 million to $325 to $330 million. The demand for our products will continue to grow, and this will be another record quarter. Paul and I are now ready to take questions.