Plug Power, Inc.

Greetings and welcome to the Plug Power first quarter 2022 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 that this call is being recorded. I will now turn the conference over to our host, Teal Hoyos, Director of Marketing and Communications. Thank you. You may begin.

Thank you. Welcome to the 2022 first quarter update call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial position or 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 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 or understood as a guarantee of performance or results. Such statements are subject to risk and uncertainties that could cause actual results or performance to 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, and our annual report on Form 10-K for the fiscal year ending December 31, 2021, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day on 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's CEO, Andy Marsh.

Well, thank you, Teal, and thank you for joining Plug's first quarter earnings call. You can find a detailed review of the quarter in our shareholder letter. But let me give a few thoughts to start this call. I recognize that macroeconomic conditions are challenging. Like everyone, we have seen some of the challenges in supply chain and the price of natural gas. The future is not based on the economy today, but the future. But let me highlight the present is very bright. In the present, how many companies will increase by over 80% this coming year in revenue? And the future for hydrogen fuel cells, as outlined by Bloomberg and others, is a unique $10 trillion opportunity. All of our activities are tied to this opportunity and tied to a world that is energy independent and green. I'll contend that ultimately green and energy independence are synonymous. And as an indicator of our present is our sales funnel for electrolyzers. The funnel is approximately $50 billion. We've committed to book one gigawatt this year in electrolyzers. We will most likely be increasing this goal soon. How about the futures? I'm sometimes asked, can this business scale? Let me give you a simple example based on Q1 financials by telling our gross margin improvement story. Let's start with products. Our GenDrive product gross margins is over 30%. The cost of our new products will continue to come down as we experience our traditional 25 percent learning curve for fuel cells and electrolyzers. All our present products at today's volumes will have a minimum of 30 percent gross margins. Our service learnings are being implemented and demonstrated now and will cut our service costs ultimately by 45 percent. With deployment of our green hydrogen network, 70 tons, which will be available by year's end, our cost will be one-third today's cost. And our PPA, which includes assets we can ultimately own, will be net positive. These numbers align with our 2025 goal of $3 billion in revenue, 20% EBITDA, 17% operating income. This is the equation for success. We're building the category, King, with the clear strategic and tactical plans great customers, employees that's unmatched in the industry. I've never been more positive about the fit between our strategic and tactical plans as I feel today. Paul, Sanjay, and I are now ready to take your questions.