Plug Power, Inc.

Greetings, and welcome to the Plug Power Incorporated third quarter 2021 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded. It's Tuesday, November the 9th, 2021. I would now like to turn the conference over to Teal Hoyos, Director of Marketing and Communications. Please go ahead.

Thank you. Welcome to the 2021 Third Quarter Update Call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or our financial position or state forward-looking information. We intend these forward-looking statements to be covered by the safe harbor provision 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 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. As such, statements are subject to risks and uncertainties that cause actual results or performance to differ materially from those disclosed 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 31st, 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 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 CEO, Andy Marsh.

Well, thank you, Teal, and welcome, everyone, to Plug's third quarter conference call. My opening will be brief since details are provided in our investor letter. I was at COP26 last week in Glasgow, and hydrogen was front and center at the event. It really reiterates Plug's belief that our first mover advantage will be a definite benefit as we advance our business. We plan to remain the leader in building out of the global hydrogen economy. We're aggressive on all fronts, and have a vision of building out the hydrogen ecosystem today. Let me emphasize today, and this is one of the reasons we are building out the first green hydrogen network in the United States. We view green hydrogen as a great accelerator of all fuel cell applications, many of which will be provided by plug power. We don't believe we can do this alone. We've done this via successful acquisitions, such as American Fuel Cell, to provide us with leading-edge MEA technology. We are doing this with joint ventures with leaders such as SK, Renault, Fortescue, and Axiona, also through partnerships with companies such as Airbus and Life. Acquisitions and partnerships have provided us both technology and access to markets. You'll continue to see Plug travel down this path as we aggressively stake our claim in the potential market of $10 trillion. The acquisition of Frames provides Plug multiple benefits. Let me just name a few. Frames is used to executing on large projects and has worked with Plug for a number of years. They provide us with integration capabilities to address large-scale gigawatt electrolyzer plants. This matches with their global supply chain reach, provides us a unique capability when we match this with plugs, leading edge stack and electrolyzer technology. Now, let me just divert a second. I mean, just yesterday, I was in London working on a 750 megawatt deal. Being able to do large scale plants is really, really critical. When the technology front Frames brings in expertise in water management, which is critical in the electrolyzer industry. We are now in a better position to address waste and ocean water to provide ourselves and our customers a better, more cost-effective, environmentally friendly solution. We are thinking a great deal about offshore electrolyzers, and between Frames' water management expertise and offshore platforms' expertise, This is real value. Additionally, their ability to manage gases such as drying hydrogen is a critical capability that FRANES brings to the table. Also, it makes us very European. Of the pure plate hydrogen fuel cell companies, we will have one of the largest employee footprints in the industry with operations in France, the Netherlands, and Germany. They also provide us 150 employees in India to provide back-office engineering support for both our electrolyzers and stationary products. Finally, they have long-term relationships throughout the world with companies that have net-zero carbon goals. We believe this acquisition provides us the strongest technical and operational team in the electrolyzer industry. Also, I'd like to comment on applied cryotechnology announcement that may have been lost in all the activity around the plug power symposium. Today, liquid hydrogen is the only practical means for storing and delivering hydrogen to most customers based on the high volumetric density versus gases hydrogen. We believe the future storage and delivery of hydrogen will be a mixture of gaseous hydrogen delivered by pipelines, salt caverns, and liquid hydrogen. We believe liquid hydrogen will be a necessity in storage for mobility and stationary application, even when hydrogen is delivered to a depot via pipelines. We believe applied cryotech provides us with the following. A liquid hydrogen delivery network and fleet, liquid hydrogen storage, and a real cool one hydrogen mobility fueling, which is particularly important for ports. And as you know, that hydrogen will be exclusively green. Again, Applied Cryotech was a company known by Plug. When we analyzed our need for hydrogen trailers for the coming four years and recognized the cash saving associated with this transaction paid for the acquisitions. They also bring us market and technologies. We're also aggressively pursuing increasing the sales for applied cryotech, especially with some of our announced partners. These acquisitions allow us to increase our guidance to $900 million to $925 million in 2022. Finally, I'd like to discuss gross margins, especially hydrogen service. We are the largest user of liquid hydrogen in the world. and are building a green hydrogen network that is resilient and is not burdened by fluctuating commodity pricing. We have taken the burden managing the hydrogen network so our customers always have hydrogen. You know, our competition is electricity, and for large customers, electricity is always there, and with long-term contracts, pricing is consistent. With our green hydrogen network across the U.S., we can be the same. Our green hydrogen network will eliminate price variability and simplify logistics. In the short term, we're taking the burden so that green hydrogen is viewed as a dependable source of energy. This activity, as our network comes online, will become quite profitable for Plug Power. The service business, Plug, has demonstrated over 50 sites that we have the right equation to have a cost-effective service offering. We'll now roll these changes out across our network. In our shareholder letter, we said we expect a 30% savings by the end of 2022 and 45% by the end of 2023 in our service business. We also see even more advances with our next generation product. So now let me turn the phone over to questions. I have three members of our team with me today. Paul Middleton, our CFO, Sanjay Shrestha, who's the GM of our hydrogen energy business, as well as Jose Crespo, GM of our material handling business. We're now ready to take your questions.