Plug Power, Inc.

Greetings and welcome to the Plug Power third quarter 2025 earnings conference call and webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to Teal Hoyos. Please go ahead.

Thank you. Welcome to the 2025 Third 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 subject to 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 risks and uncertainties discussed under Item 1A, Risk Factors, in our annual report on Form 10-K for the fiscal year ending December 31, 2024, or subsequent quarterly reports on Form 10-Q, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as 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.

Andy Marsh Good afternoon, and thank you for joining us. Plug delivered a strong third quarter, one that reflects continual growth, improving margins, and discipline execution across our global hydrogen business. For the quarter, we reported $177 million in revenue with balanced strength across our core businesses. Our GenEco electrolyzer business generated about $65 million, up 46% sequentially and 13% year over year. Clear evidence that plug technology continues to gain traction globally as customers scale hydrogen production. I think just as important, we're improving the quality of the growth. Operation Cash Burn improved by more than 50% from the prior quarter, driven by pricing discipline, better execution, and tighter working capital management. These results show the tangible impact of Project Quantum Leap which is transforming Plug into a leaner, more efficient, and more profitable enterprise. Bottom leaf is about focus, simplifying the business, aligning investment to near-term profitability, and resolving legacy issues that have limited performance. The non-cash charges we recognize this quarter reflect that effort, cleaning up the past while sharpening our strategic priorities. As a result today, PLUG is more streamlined, more focused, and better positioned to deliver continual margin improvement and cash flow gains. Operationally, we continue to execute at scale. To date, PLUG has more than 230 megawatts of GenEco electrolyzer programs underway across Europe, Australia, and North America. A real highlight this quarter was delivery of our first 10-megawatt electrolyzer, the GAP project in Portugal, the first phase of a planned 100-megawatt installation, a clear validation of a plug's ability to deliver complex, world-class hydrogen infrastructure. Our hydrogen production network also continues to improve. In August, our Georgia green hydrogen plant produced 324 tons. with 97% uptime and 92.8% efficiency, underscoring the strength and reliability of our operating platform. Earlier today, we announced a strategic initiative to monetize our electricity rights in New York and one other location in partnership with a major U.S. data center developer. This transaction is expected to generate more than $275 million in liquidity through asset monetization and the release of restricted cash. It also positions Plug in the rapidly growing data center market where our fuel cell systems can deliver resilient zero-emission backup power to mission-critical facilities. This initiative is directly linked to our new global hydrogen supply agreement, with one of the world's leading industrial gas companies and potential purchases from some of our North American electrolyzer companies as they deploy hydrogen sites. The agreement secures competitively priced long-term hydrogen supply for plug-in-air customers, a major strategic milestone that reduces the need for near-term self-development of new plants. As a result, we suspended activities under the DOE loan program, allowing us to redeploy capital towards higher return opportunities across our hydrogen network. Together, these actions strengthen our balance sheet, expand our reach into dynamic new markets, and reinforces our disciplined approach to capital allocation. Finally, I want to touch on leadership. As announced last month, Jose Luis Crespo will become Chief Executive Officer on March 1. Jose's been instrumental in driving Plug's commercial growth and building our customer relationships worldwide. This transition represents continuity in strategy, not change. The roadmap we've built together remains in place, focused on growth, profitability, and discipline execution. Also, look, the world changes. It gives Jose the flexibility to evolve our strategy as the hydrogen market matures. He is the right leader for this next chapter, and I am confident Plug will continue to thrive under his direction. In summary, Plug's progress this quarter demonstrates a company that is executing, improving, and building momentum. Our technology, people, and strategy are delivering results, and the fundamentals of our business have never been stronger. With that, I'll turn the call over to Jose, who will discuss our commercial performance and marketing activities in more detail.

Jose. Thank you, Andy. Thank you, Andy.

Good afternoon, everyone, and thanks for joining us today. This is my first earnings call as president and incoming CEO of Plug. And I have to say, I'm both excited and honored to take on this role. I've been with Plug for 12 years, helping drive our commercial growth and making sure customers are always at the heart of what we do. And that won't change. My focus will continue to be on growth, profitability, and discipline execution. As Andy mentioned earlier, we delivered $177 million in revenue in the third quarter, and we're seeing solid momentum across our core markets. Let's start with material handling. This business continues to perform well. And our customers are really seeing the productivity and energy benefits that come with the fuel cell technology. More than ever, customers are recognizing how fuel cells free up utility power in their distribution centers. Power that they can use elsewhere or simply save by reducing peak demand. And the investment tax credit for fuel cells has been reinstated. which makes the financial case for our customers stronger than ever. We're having great conversations with our major pedestal customers, Amazon, Walmart, about their 2026 plans, and we are expecting to continue growth there. And we are also excited about new customers, like Floor & Decor, where we deployed our GenDrive fuel cells, GenFuel hydrogen systems at their first Frederickson, Washington facility. Floor and Decor has a strong potential to grow into one of our next pedestal customers. Now I'm going to turn it into our GenEco electrolyzer business. We have delivered $124 million in revenue year to date. This is up 33% year over year, and it's putting us on track for a record year in the electrolyzer business, with around $200 million in expected sales. We continue to see big opportunities for green hydrogen, particularly in replacing gray hydrogen in refineries like GALP and BP. and in the production of e-fuels such as e-methanol, synthetic jet fuel, and ammonia. Our $8 billion electrolyzer funnel remains very active, and the quality of the projects we are pursuing right now is the best that we have ever seen. The probability of many of these projects reaching final investment decision, FID, has never been higher. In Australia, government support remains strong. Andy spent time there recently, and we are very encouraged by the progress on the 3-gigawatt Allied Green Ammonia project as it moves towards FID. We're also happy to have Alfred, Allied Green's CEO, speak at our symposium next week, November 18th. In Europe, we're seeing Policy clarity finally takes hold as the Green Deal and Red 3 mandates are being transposed by the EU member states and becoming law. This is giving our industrial customers more certainty around their green hydrogen targets and timelines. We're also seeing subsidy programs, like those from the European Hydrogen Bank, to start and launch real projects, many of which should reach FID in the next 12 to 18 months. And we are already executing at a scale in Europe. We deliver our first 10 megawatt electrolyzer array to God in Portugal, part of the 100 megawatt project we have in there, and 25 megawatts of containerized systems to Iberdrola and BP in Spain. These are flagship projects that demonstrate PLAC's ability to deliver large, complex systems globally. Here in the US, we announced our new partnership with Edgewood, PLAG will provide engineering, plant design, and commissioning for a facility that will convert waste streams into sustainable aviation fuel, renewable diesel, and biomethanol. If you want to hear more about that, Steve, Edgewood's CEO, will join us at the symposium November 18th, so I encourage you to come. Edgewood is a great example of how we are adapting to market conditions. The U.S. continues to support Blue Hydrogen, and we're using our deep experience with more than 20% of our team coming from oil and gas backgrounds to capitalize on those opportunities as well. Our path to profitability will be powered by growth. We have built real, scalable capabilities. We know how to produce, deploy, and operate hydrogen solutions, and we have an $8 billion funnel of opportunities ahead of us. that gives PLAC a unique position to lead as the hydrogen economy accelerates globally. Thanks again for joining us today, and I'm looking forward to sharing more at our PLAC Symposium on November 18th and to continue this journey towards sustainable, profitable growth. Back to you, Andy.

Okay, it's question time. Teal?

We're ready for questions, Kevin, please.

Thank you. While we're conducting a question and answer session, if you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Colin Rush from Oppenheimer. Your line is now live. Hey, Colin.

Hi there. You've got Andre Adams on for Colin. Hi, Andre. I've got a couple questions for you.

Hi there.

So, first, could you just speak to the cadence of fuel margin improvements and when we might expect margins for that business to turn positive? You want to take that poll?

Which business did you ask about, Andre? Was there a specific one you mentioned?

Fuel. Fuel.

Oh, yeah. So... I'd say what you see is a progression in the margin even in Q3. We had, you know, some plant issues in the network from the suppliers and from ours. But despite that, you see a progression because of the strategic agreement we struck that, you know, we're starting to see the benefits from that. You'll see even incrementally more benefits from that in Q4. given the leverage of that. And there's certain aspects of that agreement that allow us to work with them and collaborate to navigate the network more efficiently as we move forward. So again, it'll start to build. Plus, Plug is continually investing in its own infrastructure and our own networks and how we distribute and manage our plants. And so there's just this continual building process. I expect to see, you know, another big step function improvement in Q4. And I think, you know, in the course of next year, kind of targeting kind of middle of the year, moving to that break-even target, if not sooner. So we're laser-focused in it, and, you know, we've postured with the right cost structures between what we have in our supply and the supply agreement of the new arrangement that we can you know, continue focusing on all the levers that drive it that direction.

Great. Thanks. And then appreciated the color on the electrolyzer pipeline. And just hoping you could give us some expectations on the cadence of growth on an annual basis that you would expect for that business.

You want to take that, Jose? I'm going to just add, We're not yet providing any guidance for 2026, but there is a good deal of activity in the electrolyzer business. We would expect growth next year, and our plan is for the business to continue to grow. We've been very cautious about guidance because You know, one quarter slip on a project developing can change your results. But as you could see, we grew 43% versus the last quarter. We have a strong quarter coming up. I think most of GALP will be deployed by the fourth quarter and that we're shipped by the fourth quarter. So I think you'll continue to see, I think, some good announcements coming out. And good progress, especially later this quarter and the beginning of next quarter with announcements.

You're right. We will see some good progress in the next few weeks and projects that we're going to be able to deploy in 2026. So we will be able to see revenue from those projects in 2026. We've been working in many of the projects that we have in the funnel for years now. These projects take a long time to materialize and to go to FID, but we're seeing that many of these projects are gonna come to FID in 2026 and 2027, because they are very large projects. It will take time to also deploy them once they go into execution mode. In many of them, we have the project-based revenue recognition in the contracts. So we will see some revenue. And as Andy said, we will see growth in 2026. And as time goes by and more projects go FID, we're going to continue to see that growth into the following years.

What I would add, Jose, is our sales team has said the quality of the engagements are so much higher than we've ever had.

A hundred percent. I mentioned a little bit of that in the introduction. We're seeing the quality of projects and projects that have high probability to go FID in the funnel compared to a few years ago where we had a lot of projects that had not so many chances to actually materialize.

That's great. I appreciate all the Thank you. Next question is coming from Medha Gupta from EBS.

Your line is now live.

Good morning. I just wanted to focus a little bit on the news announcements today morning. I think you signed a non-binding letter of intent as it relates to the monetizing of electricity at the data center. So help us understand a little bit your leverage to this entire data center and AI revolution and various ways in which Plug can benefit from it. I'm zooming through. power would be the primary ways, if you could help us elaborate on those.

Yeah. I think we've taken a step back. First, I want to make a note. We expect this transactional close in the first quarter. It's been far long. So we think it's mid-first quarter when this closes. This will provide the liquidity on the balance sheet, which part of Project Quantum Leap has been about. And Plug next year is going to be sitting there with a strong balance sheet, which will have a complementary improvement to our income statement. So it's really about liquidity to start. And the second item that's driven a good deal of this is, and I touched on in my opening remarks, remarks about not only our relationship with a large industrial gas company, but relationships with people who are going to build hydrogen plants who want our electrolyzers. So we looked at the world and said, we know how to do a combination of sourcing competitive hydrogen and generating hydrogen to balance those two out. As part of this program, we've been exploring with our product management team and development team opportunities to provide levels of backup power using hydrogen to support the data center deployments. It'll make sense in some applications. That is a real, real focus that Jose and the team will continue to be engaging in next year. So, you know, it's not going to be primary power, but at least in 2026, I think when you get in and out years, you know, us here in North America are not always aware of activities going in in Europe, including hydrogen pipelines. And in that case, you know, plug fuel cells become a real viable solution even for primary power. So we're excited. I'm primarily excited that, you know, Jose and Paul next year will not be spending as much time worrying about where's the cash going to come from. You know, Paul, I think your cash usage last quarter was operational cash usage. was $90 million. And that was a 50% improvement. And so we're going to have a good balance sheet to really position ourselves to achieving the goal of being cash flow neutral as soon as possible. And that is the goal.

Hope that helped. Thank you so much for taking my questions. I'll turn it over.

Yeah. Thank you. Next question is coming from Eric Stein from Craig Hallam. Your line is now live.

Hi, everyone. Thanks for taking the questions.

Hey, Eric. How are you doing?

Hey, doing well. Thanks. So just sticking with the data center opportunity, I remember several years ago you had a – I think it was a pilot project with Microsoft – to some degree. And so I'm curious, I know that over the last, I don't know, year to two years, you've been prioritizing some other growth initiatives, but curious kind of how that product offering has evolved or the technology has evolved, because clearly, certainly sensing a higher level of confidence that that potentially is something near term, at least in terms of whether that means near-term deployments or not, I guess, remains to be seen.

I would say we've gained a lot of experience, Eric, both in providing we have sites where we're actually powering electric vehicles. We have done some smaller backup power deployments. We do see opportunities there. I don't want to overstate the opportunities, but the products work. We have confidence in the products. We think a lot about hydrogen all the time. And we're working with people who actually get things done. So I would just say that I don't want to, you know, the big growth opportunities for us is certainly electrolyzer projects that's going on around the world. Material handling next year will be core to this company's success. But I think you'll keep on seeing more and more activities associated with data centers and hydrogen as you think through how you can provide sensibly cost hydrogen to provide that critical backup.

Okay, thank you for that. And then maybe last one for me. It sounds like you've obviously got a lot of confidence in getting to that gross margin positive or neutral level exiting the year, but I guess I'm unclear whether you're sticking with that. And then I also notice in your commentary.

So let me be clear. We're sticking with that.

Okay, good. All right. That's good to hear. It seemed like it, but just clarifying. And then on EBITDA positive, that previously had been an end of 26 goal. And I noticed in your release that it looks like that may now be a mid-26 goal. So maybe, or I'm sorry, let's see, target in the second half, but potentially before the end of the year. So maybe some of the drivers that are leading to that increased confidence as well.

I think I'll let Paul answer that one.

Yeah, and I think, you know, it may be terminology. We're focused on the second half, just given our projections and thoughts on cadence of sales and volumes and cost downs and things that we're doing. I'd say the good news is it doesn't take much movement of the needle on sales to have a meaningful effect. So our focus is to keep doing the prudent things and driving costs down and doing all the different cost initiatives we have and trying to ramp those as fast as possible. But we definitely see continued strength in the pipeline and the efforts that we've got going on the sales channels. And so our focus is to continue trying to pull as much of that forward as we can. So More to come, I guess, as we unfold the next couple quarters and see how it's tracking. But it's definitely in the art of the possible to go sooner. But, you know, we're laser focused on driving volumes and driving cost downs and maintaining headcount, you know, not growing the overall resource base so that we can achieve those goals as fast as possible.

Got it. Thank you.

Thank you. Next question is coming from Craig Irwin from Ross Capital Partners. Ross Capital Partners, your line is now live.

Good evening. Thank you for taking my questions. Hey, Craig. Hey. The thing you said in the prepared remarks that got me the most excited is that your pedestal customers are moving again. Can you unpack that a little bit for us? Can you maybe explain what they're seeing or what's changed for them that has these very important customers saying it's time to buy again, grow our fleets, and, you know, use more fuel cells going forward?

So I want to start off by, you know, I think that, you know, the customers, Craig, have always loved the solution. I mean, we do help the Walmarts and Amazons move more goods. And that's the business they're in. I think that what they have seen over the past, and I can tell you with one of these customers I had deep discussions with over the last three months, what they have seen that Plug is actually on the right track and financially much stronger. And third, when you look at policy, And I think all of us were presently surprised that the bill that passed in July extended the investment tax credit through 2032, which Republicans have always supported. If you go back to the last time it passed, it was under President Trump in 2018. So they like the application. They can see that Quantum Leap is actually working. The government supports it. Basically, what's always driven was they save money by using fuel cells and not using batteries. That's why they're growing. It's never been a loss of desire to use the product. I think us getting our financial house in order has dramatically change our relationship with these customers who want to do business with us.

That's really nice progress. That's good to hear. So my next question is really one of clarification and I may be reading the tea leaves a little bit here, but your Gallup commentary in the press release, you know, 10 megawatts on the a hundred megawatt project, it sounds like you could probably ship the rest of that pretty quickly. Is it possible that we see the rest of GALP shipped in the fourth quarter, or is this something that's going to go out over the course of 26?

We are going to ship the majority of it before the end of the year. There's going to be a portion of it that is going to be shipped in Q1, mainly stacks, because the stacks, we want to get them there as close as possible to installation and commissioning. So you're correct, we are aiming at shipping the majority of Gulf in the next couple of months.

Jose, I think this is probably the largest real deployment in Europe. The largest MDRL deployment in Europe right now, yes.

Excellent. Well, congratulations again on the progress. Thank you. Thanks, Greg. Thank you, Greg.

Thank you. As a reminder, that's star one to be placed into question queue. Our next question today is coming from Sharif Al-Maghrabi from BTIG. Your line is now live.

Hey, thanks for taking my questions. First on the electricity rights, are those permanently being signed over? Or some years down the road, do you have the ability to come back and use that power to produce green hydrogen?

We are permanently signing them over. Doesn't mean that there couldn't be other relationships. established, but we are permanently signing them over. And look, as I mentioned before, by showing we can build plants, we dramatically changed the competitive environment for purchasing hydrogen. And our goal is to continue to work with these folks and look for opportunities to deploy hydrogen where it makes sense. And look, I think when you look at what this will do for our balance sheet and the fact that we'll take care of a good deal of the debt overload overhang, I think investors will see this will be a real good decision for the company long term.

Thanks, Andy. And then on the equipment side, for these plants reaching FID over the next 12 to 18 months, sounds like mostly in Europe, can you tell us a little more about the different sectors they're in, like oil refining, for example? And really here, I'm just hoping to get a sense of the revenue opportunity for downstream equipment.

So, Sheriff, we're getting the majority of the opportunities on green hydrogen right now on – on transformation from grey hydrogen in industry, especially in Europe, to green hydrogen. This is the directive from the European Green Deal. So given that, what we're seeing right now is opportunities, as you mentioned, in refineries. There's a lot of opportunity there. There's a lot of hydrogen that needs to be converted. The laws at the members levels at the at the country levels are being finalized right now it's not final already in many of the countries and they determine the pace and The quantities of hydrogen that needs to be converted into green so that's going to drive adoption also when you think about the same kind of concept you have the EU moving or pushing industries like aviation and maritime towards e-fuels. So we see a lot of the opportunities also on sustainable aviation fuels and ammonia or e-methanol. So we are seeing the majority of the projects at scale in those areas in Europe and really globally. Same thing in Australia. We are working with Allied Green for an ammonia project, which is kind of the same logic. And the majority of the large projects are in those markets.

That's a great caller. Again, thank you both. No, thank you. Thank you. Our next question today is coming from Samir Joshi from HG Wainwright.

Your line is now live.

Hey, Samir. Hi. Hey, Andy, how are you? Okay. Thanks for taking my questions. Jose, first of all, congratulations for the new role. Looking forward to working with you. Thank you. Just sort of follow-ups on some of the earlier questions. Of course, we have Portugal 10 megawatts and maybe a majority of the 100 megawatts before the end of the year. And then Australia is also emerging. Given the international exposure, are you planning to deploy resources? Like, are you increasing your sales presence in Europe and Australia and other regions?

Yeah.

So, Samir, we have a big presence, especially in Europe already. We have probably close to 300 people in Europe, Paul.

Yes.

So, you know, we have, you know, if you look at our product development activity, a good deal of that happens in Alphen in the Netherlands. If you start thinking about how we build an electrolyzer product, the products that are going to gout, the system portion of it, were actually built with one of our fabricators in the Middle East. And it's sent to Portugal, and our stacks are married at the site. We have activity in Vietnam. We have a large integrator. We have large integrators in Europe. So we do have a relatively large international footprint, both with fabricators and our own people, to support the business. So, you know, we have people in the Middle East today, for example. So there's, you know, that footprint, you know, we've been able to build this business because we do have a sales team in Europe. We do have a sales team in Australia. We do have sales people in the Middle East. So, you know, that, you know, we don't expect, you know, there may be some strategic decisions to make some expansions. But we are there already. And I think, and more important, we can make products there already. So if you think about GAO, what we're using doesn't really have, you know, the Trump tariffs have almost zero impact on us at GAO.

Yeah, no, it makes sense. Thanks for that color, Andy. On the cash and balance sheet front, of course, this transaction will provide additional cash or free up additional cash. I think when the last capital raises competed, there was talk about paying down some of the Yorkville loan. Given all these dynamics, how long do you have a runway? I mean, I think is it going to extend beyond 2026 with your current cash on hand, or how should we look at your cash burn over the next 12 to 18 months?

Yeah, that's a good question. I guess I'd just put context that if you look over the last two years, the fact that each consecutive year we continue to reduce the burn by 50 to 60 percent, directionally it's going the right way, right? When you look at next year, I mean, we haven't given exact guidance and thoughts on next year, but I would tell you, I certainly expect that trend to continue. And it should be, you know, a much more nominal amount. And when you look at the combination of the capital that we had on our balance sheet as the end of the third quarter, plus the capital raised from the recent equity transaction from an existing investor, And then you look at the $275 million targeted on this data center deal, you know, we feel like we have more than ample capital accessible to us to bridge through that positive cash flows. So we're in a great position. And that, you know, we even have more if we wanted to deleverage some of that, we could. And probably will work with our lenders to do that. So, you know, it's just a question of timing, but We feel like we're in a great position to navigate through that bridge and to get to a point when we get that positive cash flow.

Understood. Thanks a lot, Paul, for that. And thanks for taking my question.

Thanks, Samir. Thanks. The next question is coming from George Janarikis from Tenant Court, January. Your line is now live.

Hi, everyone. Thank you so much for taking my question. Sure. Thanks. So maybe this is for Luis. I'm just curious. First, congratulations on the new role coming next year. But also, if we look to March of 2028, two years after having taken the position, how do you think Plug will look different? What are the metrics by which we should sort of judge the performance of the company by then? Obviously, profitability is a big milestone. But what growth drivers do you think we should look forward to over the next couple of years that may be underestimated by us on this side of the table? Thank you.

So first, George, thank you. It's exciting to take over this new role. And on the question, 2028, well, you know, from... Yeah, he has about 22 years. Two years from now.

I gave you two years. I gave you two years.

You were only giving him a few months. Well, number one, the financials of the company would be in line to what we've been discussing. Profitable company, now, you know, being able to – probably think about growth in other areas of the hydrogen market and have access to be able to finance that type of growth. We will concentrate still on ELX. ELX has a lot of room to grow all the way to the end of this decade, if not beyond, and we will keep on being the leaders in that market. And the more we deploy, the more profitable we will become. Our values will go higher and the profitability of the company will improve. On material handling, we will keep on growing. We were looking today at what is the available market for material handling, and it's over $14 billion. And obviously, we have only started scratching the surface on that market, right? More hydrogen is available. The cost of the technology goes down. We will go deeper into that market as well. And then, as you said before, and we were talking before, we kind of put a little bit of a pause on high power stationary. But by that time, probably we will be thinking about taking again on that product line and thinking about growing it for applications like what we were talking before, the data center market, once we understand and find solutions for the hydrogen equation on that market. And there will be a pretty substantial opportunity for growth in that market as well.

I would just say a strong balance sheet, strong revenue growth in our core markets will give you opportunities to explore new applications for hydrogen and fuel cells as they evolve. It's clear that hydrogen needs to be part of the global energy solution, whether as a substitute in things like ammonia or methanol production, oil refineries. But, you know, execution over the next year will open up a whole new array of opportunities. And I'll be cheering for you as the chairman.

Thank you.

And maybe as a follow-up, clearly, a thawing or an increase in activity from an electrolyzer perspective in Europe. When you go into these competitive bids, what's the, I guess, top couple of reasons that you're winning and who are you seeing from a competitive perspective? Thank you.

So the other day, somebody asked exactly the same question to one of our customers. And the way that the customer answered was, when we look at other electrolyzer companies, there's no other electrolyzer manufacturer that actually has deployed their own technology and operates the technology the way that PLAG does. That is incredibly valuable for companies that have not deployed before electrolyzers, knowing that the OEM, the partner that they're working with, in this case PLAG, has done it, is doing it, and is operating those plants. That is a competitive advantage that no other electrolyzer company can put on the table. On top of that, we have deployed a scale. We've been in this market for almost three decades, and that's also really valuable. And when we start and when we have started to show that we can turn around the company and our financials are beginning to improve, This makes a very strong partner for anybody that is looking to deploy an electrolyzer project anywhere in the world, really.

Thank you. Thank you. Next question is coming from Chris Sung from Wolf Research. Your line is now live.

Hey, guys. Good afternoon. Thanks for taking my question. Hey, Chris. Hi. Hey, Andy. I wanted to just clarify on Texas, like about the DOE loan with activities paused. Is that the other location for the electricity rights that was sold?

You know, Chris, I would love to answer the question, but I've been asked not to as part of the LOI. Okay.

All right. Understood. All right. And then maybe just as you continue to shore up your balance sheet, which is starting to look better and better, could you – potentially look to divest or monetize your Georgia asset or maybe even your Tennessee and Louisiana liquefaction sites?

I don't expect to. We're going to keep operating. Those facilities give us first cost-competitive hydrogen. But look, it lets people know we can deliver hydrogen ourselves and produce cost-effective hydrogen. So I think it's a healthy, it gives us a healthy negotiating position. The fact we know how to build.

Okay, go ahead, Chris. Thank you. Next question today is coming from Ryan Finks from B Reilly Securities.

Your line is now live.

Hey, guys. Thanks for taking my questions.

Hey, Ryan, you're going to be my last question ever as a CEO on an earnings call.

Andy, that's why I waited to hit star one, because I wanted that honor, actually.

Go ahead.

That would be a good question, Ryan. Bill Peterson just supplied to you. Okay.

I'm sure someone else is going to hop back in the queue now, but I appreciate it. So for the electricity rights monetization, are there other opportunities to complete similar transactions based on the assets that you have today, or will this likely be the only announcement of this kind?

The first question is, we do have other assets. And notice I didn't use plural. And I don't know if it'll be the last one, but we have been engaging in another asset.

Understood. Appreciate that. And then for 2025 guidance, not sure if I missed it, but are we still targeting $700 million in revenue for this year?

Yes.

Excellent. Thanks, guys. I'll turn it back.

Okay. Sorry there. I was hoping you were the last.

Our next question is coming from Bill Peters from J.P. Morgan. Your line is now live, sir.

Yeah. Hi, Andy, Jose, Luis, and Paul. And I thought I had star one like 45 minutes ago, but apparently I didn't. So happy to be your last question here. Actually, probably a few sort of clarifiers or follow-ups to some of the prior questions. Maybe first on the quarter, you just had reiterated that $700 million is the target. maybe within that sort of the puts and takes amongst the various segments you have. And then on gross margin neutral, I think you're probably saying that's coming off the adjusted loss of 37 million, not the gap loss of 120. So I guess similarly amongst your various segments, what are the puts and takes that gets you there? That's my first question. Then I'll save the last one for Andy on the second one.

Okay. You want to go, Paul?

Yeah. And there's three elements, Bill. One is, if you think about the math on the volume, that means it's higher volume in Q4 than Q3. So volume, particularly in equipment sales, is incredibly lucrative for us. So every incremental dollar of equipment sales means a lot. Number two is, you know, we've already been making a lot of traction on service. We're trying to be prudent and thoughtful about that progression. But we expect that to continue, and that will actually provide meaningful margin enhancement in Q4 and onward just from that continued progression. It helps us in many different ways, but that's another step function change as we continue to enjoy that positive trend. And then the last, as I talked about earlier, is fuel. You know, we saw certainly progression in Q3. We expect to see a lot more progression in Q4 as we leverage that new platform, and we really continue to drive improvements off of our efficiency. So those are the biggest drivers that kind of drive the levers here for Q4.

Terrific. And then, again, somewhat similar to some earlier lines of questions, but You know, in the last year or so, you've been focusing primarily on materials handling. It sounds like data center is now maybe back to be an emerging application. So can you speak to when you may actually need to make investments to bring on new hydrogen capacity? Would you prefer to still pursue Texas or maybe expand your supply agreements with the third parties under, you know, renegotiated terms? I guess I'm trying to get a sense at this stage, would you need to pull the trigger around Texas at some point, or maybe it is your second site you're talking about, Or is there any other types of funding you could be considering if not, you know, the DRE loan, which is off the table?

So, Bill, I, when I take a look at our new agreement with the industrial gas company, when I look at opportunities Jose's been developing for folks who are looking to build plants, we're going to be strategic and thoughtful about when we build next. I don't foresee a need in the immediate future. We've spent a lot of time looking at this, and we sat down and we thought about it from a financial performance point of view. You know, it feels, quite honestly, Bill, it feels really good to hand off to Jose and Paul a balance sheet that works. You know, we've discussed a lot over the last year about Quantum Leap being improving the income statement. But look, Jose's going to be and Paul are going to have essentially zero debt, you know, Between the $150,000 we ended with or $160,000, the $350,000 we raised, this activity, we're going to focus on let's get our debt down. I look in and I want to position them. We want to position, because we're doing this as a team, be positioned that Next year, when Jose goes to see customers, he can say to them, look how strong my balance sheet is. Look how strong my income statement is. And as I mentioned earlier in the call, people want to buy from us. And a strong balance sheet will make it a lot easier. And for every electrolyzer dollar Jose sells, it really contributes 30 to 40 cents to the bottom line every dollar. So I think the company is much healthier. And with Jose's leadership, I think the company will continue to expand. And I think growth is tied very, very tightly to this balance sheet. And now it's going to be a much, much better balance sheet.

I appreciate that, Andy. I appreciate the dialogue in the past several years. I look forward to following the progress and look forward to hearing more about the strategy in a few weeks, or actually next week.

Thanks. Great. Good, good, good end for us, Bill, because I need to remind folks, you can, Teo, you can register for digitally for the listening to plug symposium. You know, it's an exciting event. We have many customers. What customers are going to be here, Teal?

Oh, we have lots of customers. We'll be showcasing our electrolyzers with customers like Arcadia. We have customers like Amazon and Uline presenting our customer panels. So we'll have lots of customers showcased throughout the different panels we're excited about. Yeah.

I am excited, and I know... The team's put a lot of effort in, and we really want to show folks all the great progress. Plug is made to date, but probably more important, where Jose is going to take us in the future. So thank you, everybody.

Thank you. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Thank you.