Plug Power, Inc.

Greetings. Welcome to the Plug Power second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Teal Hoyos, Director of Marketing and Communications. Thank you. You may begin.

Thank you. Welcome to the 2021 second quarter update call. This call will include forward-looking statements. These forward-looking statements contain projections of future results of operations or of our financial position or state other forward-looking information. 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, and such statements should not be read as a guarantee of future performance or results. Such statements are subject to risks and uncertainties, that could cause actual results to perform or differ materially from those discussed as a result of various factors, including but not limited to risk factors and uncertainties discussed under item 1A risk factors in our annual report on Form 10-K for the fiscal year ending December 31, 2020, 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 or as a result of new information. At this point, I would like to turn the call over to Plug Power's CEO, Andy Marsh.

Thank you, Teal, and thank you, everyone, for attending our call today. This quarter had a mixture of successes and challenges. The successes were easy to rattle off. Revenue increased dramatically by over 75% versus the prior year. Shipment of DrenDriveU into new sites dramatically increased versus the prior year. We closed to Hy-Vee at JV with Renault, targeting the light commercial market for vehicles in Europe. This market is expected to be 500,000 vehicles in 2030, with over 30% of the market captured by the JV. We did have some challenges in the quarter associated with hydrogen costs. There are two major drivers. The cost of ending our relationship with air products. This had a short-term impact on pricing and construction costs to replace air products liquid tanks. This is about two-thirds of the increase of the hydrogen cost for the quarter. There also was a Crisis with the availability of hydrogen due to a force majeure. The force majeure was due to a major hydrogen plant going down for two months in the southeast. This local disruption impacted the U.S. hydrogen network. What I think is really important, we at Plug Power made sure our customers had hydrogen throughout this event. Let me talk briefly about our near and mid-term corrective actions. The air product changes were a one-time event and now won't be duplicated. We're also now not strangled whole by having industrial gas companies own equipment at any of our customer sites, giving us greater flexibility in making sure we have cost-effective hydrogen solutions for our customers. Second, the force majeure for hydrogen was an unprecedented event. In July, additional capacity was brought online by our partner, Linde, over 30 tons per day, which will alleviate future issues, just to give people a feel this is an increase of over 10% of U.S. capacity. We're also increasing our own capacity in October by 3.5 tons in our Tennessee plant. Plug Power will have an additional 70 tons online in the third quarter of 2022, and additional sites online in early 2023. And just to remind folks, we use about 50 tons of hydrogen a day at the moment. And we've already announced additional green hydrogen sites across the board in New York, Pennsylvania, Georgia, and Texas. This week, we broke ground at our Georgia site, and the site to New York and Texas will be the largest green hydrogen plants in the world. Some may ask, Why did we absorb the cost of the force majeure? We believe in the near term, protecting our customers from the challenges in the market today will pay off in the near term. We want our customers to know they can count on hydrogen being available, and more importantly, can count on plug power meeting their needs. They will be critical in helping us fill up our new plants. We have exciting news coming up in the coming quarters. We're increasing our gross billing guidance in 2021 to $500 million. This means we'll be increasing our gross billings by over 50% from our 2020 numbers. We will close our JV with SK this quarter as planned. We're working on the final details of the relationship. Both of us are really quite excited. And, uh, We'll also be closing our JV with Axiona in the Iberia Peninsula. We plan to build 30 tons of liquid hydrogen capacity with Axiona, making us one of the largest liquid hydrogen producers in Europe. We're also targeting bookings of 250 to 500 megawatts of electrolyzers in 2021, with 250 megawatts shipping out of our new gigafactory. We'll be making announcements in the second half. for additional takeoff agreements for our hydrogen plants. Finally, and this is really important, with the Gigafactory, we're utilizing state-of-the-art automated equipment in our new manufacturing processes. We're planning to match our unprecedented capabilities in sale and design of fuel cells and electrolyzers and become not only a leader in manufacturing those devices, but a global manufacturing leader. That's why we hired Dave Midrich, who ran the Tesla Gigafactory in Nevada. We remain incredibly excited about the future. We'll be holding our third annual Plug Power Symposium on October 14th. We're moving to a virtual event because of the recent uptick in COVID cases. You'll be able to sign up online next week And we expect to have an in-person event in the spring once this pandemic recedes to show off our facility in Rochester. I was there yesterday. It's just great. Finally, we're operating now with four general managers for our different businesses. Keith Schmidt for new markets. That includes stationary and on-road vehicles. Keith's done a marvelous job closing out the Hy-Vee at JV. And as you know, Keith has been Plug COO for seven years. Ole Hoffman, running our electrolyzer business. Ole worked at Air Laquite for 29 years and ran their U.S. hydrogen business for many, many years. Jose Crespo, as a lead, has led our sales efforts for six years and is now the head of our material handling business. And Sanjay Shrestha, with a long career in renewable energy, is running our energy business. Quarterly, I'll ask one of them to join the call. You know, they're focused on building the business, and I'm sure the analysts would like to speak with them. And this quarter, I've asked Sanjay to join me as well as our CFO, Paul Middleton. We're ready now to take questions.