Plug Power, Inc.

Greetings and welcome to the Plug Power Q2 call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Teal Hoyos, Senior Director of Marketing and Communications. Thank you, Teal. You may begin.

Thank you. Welcome to the 2023 second quarter earnings 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 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 or understood as a guarantee of future performance or results. Such statements are based upon the current expectations, estimates, forecasts, and projections, as well as the current beliefs and assumptions of management, and are subject to significant risks 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, the 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, 2022, quarterly results on Form 10-Q, and other results we file from time to time with the Securities and Exchange Commission. These forward-looking statements speak only 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's CEO, Andy Marsh.

Thank you, Teal, and thank you everyone for joining the PLUG second quarter conference call. PLUG's in the process of developing an unparalleled hydrogen fuel cell platform. This encompasses a diverse array of products, extensive international collaborations, backing from government entities, financial partners, and our robust infrastructure. Our second quarter outcome reveals noticeable growth in several of our recently launched products, particularly in our cryogenic sector, which garnered $69 million in revenue, making a more than three-fold rise over the previous year. Our international collaborations are yielding positive results as well. Through our joint venture with Renault, the initial product from Hy-Veea garnered positive reviews. Kilometer Magazine, a renowned authority in the realm of commercial vehicles in France, bestowed the Heavy Commercial Vehicle of the Year 2023 award upon the Hy-Veea Fuel Cell Electric Vehicle Master Van. Through our partnership with SK, our joint venture Hyverse achieved a significant milestone as the first megawatt-scale electrolyzer to be certified in Korea. Our strong governmental backing spans across key global capitals, from Washington, D.C. to Brussels, Helsinki, Paris, and Seoul, plug its cultivated, robust connections with government authorities. Given the vital intersection of energy and climate change with governmental policies, we have proven ourselves as trustworthy experts capable of offering insights and impartial analysis on the path towards a carbon neutral world. This strategic policy alignment is reaping rewards in the present as the American manufacturing company Plug generated a $10 million increase in gross margin dollars during the second quarter, attributed to the provisions promoting American-made products under the IRA. We anticipate further advantages as we tack into manufacturing incentives within the IRA, along with the production tax credit for hydrogen. The IRA is starting to pay dividends to Plug. Furthermore, we have actively secured multiple sources of non-dilutive capital as we diligently expand our global green hydrogen generation network. Presently, PLUG is in the final stages of the second round of due diligence with the DOE Loan Program Office for a billion-dollar project financing facility. We have a term sheet framework, and we're working through final processes to get this structure approved and lost. Simultaneously, we're assessing various options, including corporate debt facilities for major financial institutions, alternative infrastructure project financing, and solutions for ITC project financings. Lastly, the unmatched nature of our manufacturing infrastructure is substantiated not only by our internal evaluation, but also by feedback from customers and potential clients. Initially designed to support 2.5 gigawatts of MEAs, our Rochester facility now boasts a scalable potential of up to 7.5 gigawatts as we advance the production process. I had the privilege of personally touring our VISTA facility, our 400,000 square foot integration factory, with a customer this past Tuesday. And quite honestly, they were astonished because they've been at everybody else's facilities. Additionally, our hydrogen plant in Georgia, for which we're hosting an investor day on August 23rd, stands as the largest green hydrogen plant in North America. Navigating the process of scaling our business presents its own set of challenges, and our ability to surmount these challenges serve as a distinct advantage for Plug. One's been our gross margin challenges. What's not readily apparent is that excluding one-time charges, our margins in the second quarter would have been minus 12%, over 20% better than Q1. Throughout the rest of 2023, we will see continual margin expansion. An industry leader shared with me recently, the endeavor is truly valuable when it comes with its share of challenges, and this, in the end, provides a differential advantage. The journey of mastering the construction of hydrogen plants, expanding factory capabilities, developing customers, and concurrently introducing an array of new products has undoubtedly been demanded. However, we firmly believe that the efforts invested in these undertakings will yield substantial benefits for all those vested in plug success. At this point, Paul, Sanjay, and I are prepared to address any questions you may have.