NASDAQ:PLUG Plug Power Q2 2025 Earnings Report $1.65 -0.02 (-1.20%) Closing price 08/26/2025 04:00 PM EasternExtended Trading$1.64 0.00 (-0.30%) As of 07:12 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Plug Power EPS ResultsActual EPS-$0.16Consensus EPS -$0.15Beat/MissMissed by -$0.01One Year Ago EPSN/APlug Power Revenue ResultsActual Revenue$173.97 millionExpected Revenue$157.97 millionBeat/MissBeat by +$16.00 millionYoY Revenue GrowthN/APlug Power Announcement DetailsQuarterQ2 2025Date8/11/2025TimeAfter Market ClosesConference Call DateMonday, August 11, 2025Conference Call Time4:30PM ETUpcoming EarningsPlug Power's Q3 2025 earnings is scheduled for Tuesday, November 11, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Plug Power Q2 2025 Earnings Call TranscriptProvided by QuartrAugust 11, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Plug Power reported $174 million in Q2 revenue, up 21% year-over-year, with electrolyzer sales tripling to $45 million. Positive Sentiment: Gross margin swung from negative 92% to negative 31% in Q2, driven by operational efficiencies, pricing discipline, and cost reductions, with a target of gross margin neutrality by Q4. Positive Sentiment: Hydrogen plants in Georgia and Louisiana are meeting performance expectations and a newly executed supply agreement will deliver substantial cost savings in H2. Positive Sentiment: Plug Power has a $700 million electrolyzer revenue pipeline with anticipated closings in 2025 and several projects moving toward final investment decisions in 2026. Positive Sentiment: The company ended the quarter with over $140 million in cash, access to more than $300 million in debt capacity, and a >40% year-over-year drop in net cash burn. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallPlug Power Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Greetings, and welcome to the Plug Power Second Quarter Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Teal Hoyos, Vice President, Marketing and Communications for Plug Power. Please go ahead, Teal. Teal Vivacqua HoyosVP -Marketing & Communications at Plug Power00:00:32Thank you. Welcome to the twenty twenty five 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 of our 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. Teal Vivacqua HoyosVP -Marketing & Communications at Plug Power00:01:07We 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 ks for the fiscal year ending 12/31/2024, our quarterly report on Form 10 Q for the quarter ending 03/31/2025, as well as other reports we file from time to time with the SEC. These forward looking statements speak only as of the date 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. Andrew MarshCEO & Director at Plug Power00:02:16Good afternoon, and thank you for joining us. As we begin, I want to reaffirm the business priorities we set forth under project Quantum Leap. Priorities that continue to guide every decision we make. Item one, drive gross margin improvements through operational efficiencies, cost reductions, and improved pricing discipline. Two, streamline our operations by consolidating facilities, optimizing our manufacturing footprint, and accelerating productivity gains. Andrew MarshCEO & Director at Plug Power00:02:58Three, strengthening the reliability and performance of our service business, combining unit level improvements with better pricing models. Four, expand our hydrogen generation network while improving the cost structure of hydrogen supply. Five, advance our electrolyzer business by building a robust sales funnel and securing early stage agreements ahead of customers' final investment decisions. And six, maintain strict cash discipline to bridge the positive EBITDAS in the 2026. This quarter marks another important step forward delivering on these commitments, both operationally and financially. Andrew MarshCEO & Director at Plug Power00:03:46Our team continues to execute with discipline and the results we're sharing today reflect meaningful progress towards the long term goals we've outlined. We closed the second quarter with $174,000,000 in revenue, up 21% year over year, driven by strong demand across our GenDrive, GenFuel, and GenEcho platforms. Electrolyzer sales more than tripled from a year ago, reaching roughly $45,000,000 in the quarter, underscoring the growing role of GenEco as the preferred choice for industrial scale applications. Gross margins improved dramatically, moving from negative 92% in Q2 of last year to negative 31% this quarter. The improvement is a result of deliberate action, better service execution, competitive hydrogen pricing, and product cost reductions. Andrew MarshCEO & Director at Plug Power00:04:53Service performance is being driven by a combination of unit level improvements and pricing adjustments, and we see a clear path for continued project progress in the quarters ahead. Project Quantum Leap remains central to these gains as we streamline our operations, consolidate facilities, and drive efficiencies across the business. We remain on track for gross margin neutrality by q four with tangible steps in place to get there. Our hydrogen plants in Georgia and Louisiana are performing well, and a recently executed hydrogen supply agreement will deliver substantial and certain cost savings in the second half of the year. Pricing adjustments, particularly in service, were adding resilience to our margin profile while maintaining strong customer relationships. Andrew MarshCEO & Director at Plug Power00:05:54On the sales front, we were approximately $700,000,000 in revenue this year. Looking further ahead, our electrolyzer pipeline is robust. Some additional deals are expected to close this year, while several major contracts are moving towards final investment decisions in 2026. We're act also actively pursuing pre FID agreements to secure value earlier in the process. In material handling, we added new customer sites this quarter and our refreshed value proposition is more compelling than ever. Andrew MarshCEO & Director at Plug Power00:06:35A little known fact, we have already removed the equivalent of a medium sized power plant from the grid as customers have transitioned to hydrogen. Many applications today require significant electrical power, such as a large scale refrigeration system, and our solution succeeds in either removing that demand from the grid entirely or time shifting at the periods when the grid is less stressed. This not only lowers operational costs from customers, but also enhances energy reliability and sustainability. From a policy standpoint, recent congressional legislation has provided long term clarity on the 45 b production tax credit and 48 e investment tax credit. This is a meaningful tailwind that aligns perfectly with our strategy to expand hydrogen production and leverage tax credit monetization monetization to improve capital efficiencies. Andrew MarshCEO & Director at Plug Power00:07:41On the DOE loan, we continue to work constructively with the loan program office to align with evolving priorities. We may remain confident in our ability to begin construction on DOE supported projects before the end of the year, accelerating the expansion of our hydrogen generation network. We've also maintained strong cash discipline in the quarter. Net cash in operating and investing activities declined over 40% year over year. We ended the quarter with over a $140,000,000 in cash and have access to more than $300,000,000 in additional debt capacity. Andrew MarshCEO & Director at Plug Power00:08:27Stepping back, Plug today is executing with focus, delivering measurable results, and building the foundation for a prop for profitable growth. Our product portfolio from electrolyzers to fuel cells to our hydrogen network position us as a leader in a in a hydrogen economy that is gaining real momentum. The work we're doing now isn't just about meeting quarterly targets. It's about ensuring Plug is the premier hydrogen solution provider for years to come. I have with me Paul, Sanjay, and Jose, and we're now open to take questions. Operator00:09:09Thank you. We'll now be conducting a question and answer session. Our first question is coming from Colin Rusch from Oppenheimer. Your line is now live. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:09:36Thanks so much, guys. Now can you talk about the electrolyzer pipeline? Certainly, there's been a lot of interest around green hydrogen, but I'm curious how quickly projects are moving forward and how those sales are moving through your pipeline, and and how we should think about that cadence going forward. Andrew MarshCEO & Director at Plug Power00:09:54Carlo, I'm gonna let Jose take that question. Jose CrespoChief Revenue Officer at Plug Power00:09:58Hi, Colin. Thank you for your question. So we have a very strong fund, on the electrolyzer side, mainly driven by opportunities in, regions like, Europe. We discussed this in the last, earnings call. We see some projects closing before the end of the year, and, we are also seeing some projects going FID in 2026. Jose CrespoChief Revenue Officer at Plug Power00:10:26Andy mentioned that we're working with some of those projects to try to get agreements, pre FID to secure business and position ourselves better when these projects go FID in in 2026. We're also working in many of these projects, to set them up as, you know, revenue recognition, over time, which is gonna allow us also to accelerate a little bit when we see revenue after the booking. So, again, a strong very strong, sales funnel, and we see some opportunities closing in 2025 and other opportunities going FID in 2026. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:11:09Excellent. And then on the hydrogen production, of your own facilities, where can you or what can you tell us in terms of uptime yield, you know, how those are performing, relative to to, you know, design expectations, and how much you're how much leverage you're getting out of the, you know, that ramp in terms of helping close some of the other customers, whether it's on the material handling side around security supply or around electrolyzers? Andrew MarshCEO & Director at Plug Power00:11:37Yeah. So let me take those questions probably in reverse order, Colin. Security supply, we feel really, really good about. As you know, that was a big problem in 2023. Our ability to have hydrogen available, the network with having 40 tons of plug capacity available, it really has dramatically changed, the availability questions and challenges we faced in previous years. Andrew MarshCEO & Director at Plug Power00:12:17And it is a continue it is important that we bring Texas online over the next two years to continue to make sure that there is a robust network. From a performance point of view, when I look at Georgia, you know, what I'm really pleased with is that we can bring it up and bring it down when we like based on electricity prices. We have done a really, really good job at the operation of Georgia. And we're a year into Georgia, and, you know, it's operating and performing, you know, as we request. And so we're really, really pleased with Georgia. Andrew MarshCEO & Director at Plug Power00:13:02Louisiana is just beginning to ramp. So far the performance and the cost out of Louisiana, when we look at the relationship we have with Owen, is really our lowest cost lowest cost site to support our business. So we're quite honestly quite pleased with how both sites are performing and expect both to improve during the coming quarters. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:13:34Thanks so much, guys. Andrew MarshCEO & Director at Plug Power00:13:36Yeah. Thanks, Colin. Operator00:13:40Thank you. Next question today is coming from Craig Irwin from ROTH Capital Partners. Your line is now live. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:13:46Hi. Good evening, and and thanks for taking my questions. So, Jose CrespoChief Revenue Officer at Plug Power00:13:49Andy Hi, Craig. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:13:49I was hope hey. So I was hoping tonight we could, we could just discuss what's changed for you guys in the last couple weeks. Right? It was it was a couple weeks ago, we had a really nice surprise in the one big beautiful bill. Right? Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:14:0545 e, 48 e, lot longer life, and they're in healthy shape, for a while. Right? Yep. Your customers would have been surprised too. I I'm guessing maybe some of them lobbied for that, but, most of your customers would have been surprised. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:14:20Can you talk about the the conversation with customers, how this has maybe shaped things or or impacted plans over over the last couple weeks? Andrew MarshCEO & Director at Plug Power00:14:31Craig, I am gonna turn that over to Jose since he talks to customers every day. Wanna give it a shot, Jose? Jose CrespoChief Revenue Officer at Plug Power00:14:39Thank you. Thank you, Craig. And a very good question. It is it is fairly recent. As you said, it's only a couple of weeks ago, but we have already had many conversations with customers. Jose CrespoChief Revenue Officer at Plug Power00:14:51They are excited about it. It opens up in the case of electrolyzers with PTC, a a a big opportunity for customers to, number one, have more time to take advantage of the PTC, and number two, make the business cases, feasible. So lots of conversations, early stage, but this has definitely reignited a lot of the conversations, obviously, mainly in The US. As you know, we have already discussed in the prior, earnings call the opportunities that we have in Europe, and those continue to be exciting, and we continue talking to to customers in Europe about, opportunities for ELX. In the case of ITC, the investment tax credit, which, as a reminder, you know, it will give our customers the opportunity to take advantage of 30% tax credit starting in January 2026. Jose CrespoChief Revenue Officer at Plug Power00:15:48We are talking to many customers in the material handling business. We were already trying to make the the the business case for our customers stronger even without the ITC. So now that we're adding the ITC, we see many of our customers quite excited about this. They see the business case even stronger than ever. And, I believe that we're gonna see a healthy growth in material handling in 2026 because of that. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:16:19Excellent. Excellent. So my my second question is about, inventory liquidation. Right? This quarter, you had another $35,000,000 cash contribution from inventory. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:16:29And with 45 v, 48 e, ICC, all these things starting to chip in your direction, and I guess Texas, you you'll you'll be making more progress on Texas pretty soon. Can you talk about the the contribution to, cash flows from inventory this year? Is there anything we should specifically watch for or any large items that might move, tranches bigger than, you know, $3,050,000,000 that that that could impact the cash flows? Andrew MarshCEO & Director at Plug Power00:17:01Do you wanna take that, Paul? Paul MiddletonCFO at Plug Power00:17:03Sure. Hey, Craig. It's Paul. How you doing? Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:05Hey. Paul MiddletonCFO at Plug Power00:17:08Yeah. We're we're targeting targeting at least another $100,000,000 plus reduction in inventory this year. We obviously see it as a tremendous opportunity to leverage that working capital. You're starting to see it as the volumes start to pick up in the second quarter and we'll pick up more in context to what Andy shared for the full year guidance. And we think we're pretty well positioned with the inventory, largely the inventory we need to deliver a lot of that. Paul MiddletonCFO at Plug Power00:17:37So we think that's very obtainable and, you know, hopefully and and still leave some room, to be honest with you. We from an operational standpoint, you know, even as we move into next year, we're still targeting to go even lower. So, you know, I I'd use that as a proxy for this year, plus or minus, and and we see it as as more opportunity as we go into next year. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:59Excellent. And then just another cash flow question to slip it in before I hop back in the queue. You've done a good job bringing down the the PPA cash over the last couple years. Do we cons continue with a similar tempo, you know, roughly 200,000,000 a year? Or is there any any reason that this could maybe accelerate or or decelerate from there? Paul MiddletonCFO at Plug Power00:18:20Yeah. When you look at the portfolio because we're not you know, as you know, we made a a strategic strategic shift where we're not offering that program. We we're customers are now buying direct, which is better for us from a cash standpoint. You know? So we're not adding to that portfolio, but it's scheduled to to wind down, you know, over the three plus years, call it. Paul MiddletonCFO at Plug Power00:18:41So that 200,000,000 a year is a good proxy. As we move into next year and you start getting past the five year amortization cycle, there are opportunities to potentially buy out of that early. And since it's net positive to us to do so in context of what the corresponding obligations are, you know, it's something that we'll be pursuing aggressively. So it'll be at least 200 and could be more. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:08That's good to hear. Thanks again for taking my questions. Andrew MarshCEO & Director at Plug Power00:19:11Thanks, Craig. Operator00:19:13Thank you. Next question today is coming from Manav Gupta from UBS. Your line is now live. Manav GuptaExecutive Director at UBS Group00:19:18Good afternoon. My first question is to you about the your confidence level in getting to breakeven gross margins by year end, if you could talk about that. Andrew MarshCEO & Director at Plug Power00:19:31Paul, you wanna take a shot at that? Paul MiddletonCFO at Plug Power00:19:33Sure. So I think, you know, fortunately well, I say through hard work, you're seeing progress on the margin front already. And when you look at the second half, a couple things, you know, will continue. First of all, we've seen some of the benefits from Quantum Leap on the restructuring and things start to pay dividends in Q2, but you start to get full quarter benefits of those activities because as it takes some time to wind out some of those actions. Secondly, we announced the improvement in the cost pricing for the fuel contract. Paul MiddletonCFO at Plug Power00:20:11That really started July 1, and that will be a very meaningful amount every month. And so you're going to see tremendous leverage from that. The volume leverage that we get out of those incremental programs with increased sales will be certainly beneficial. And the other thing that's really super impactful is the progress we're making on service. I'd say we think we're really pleased with how we're seeing the cost rates come down on service, which really serves two benefits. Paul MiddletonCFO at Plug Power00:20:42One, it's less cash outlay to service units and two, puts us in a position to really have new programs being issued at very profitable profiles. So the combination of that activity really is going to continue to drive service and we expect a real traction there. So more things to come in terms of commercial developments and opportunities to work with customers to optimize. But those are some of the key drivers that are going to help us drive to that that margin profile positive. Manav GuptaExecutive Director at UBS Group00:21:19Thank you. That's all very encouraging. My quick follow-up here is you kind of mentioned the benefits of ITC to the material handling business. I'm coming in from a different direction. Can the benefits of ITC be used by a plug to go after the backup power market where, you know, you could provide the fuel cells for more backup power and then us, you know, companies can get ITC for it? If you could talk about the benefits of that. Andrew MarshCEO & Director at Plug Power00:21:46I first, Manav, I've been really very focused on keeping us on the ball, really looking at markets that are real today for plug. That's hydrogen generation material handling or electrolyzers. So we have done a rather large deployment, as you may know, in California, which is over eight megawatts. I think it's probably the largest stationary hydrogen deployment so far. A deployment that can leverage the ITC. Andrew MarshCEO & Director at Plug Power00:22:25I would just say that we will be very selective and thoughtful because we don't want anything to reduce the opportunity for us to achieve EBITDA breakeven in 2026, as well as, of course, near term gross margin breakeven. So there is an opportunity. You know, next year, we expect we will continue to grow our business. I would say when we look at near term opportunities that are not on the not as high profile. But we have been involved in a number of very interesting deals associated with energy transition projects where people are looking to leverage, fuels using blue hydrogen and liquid fuels. Andrew MarshCEO & Director at Plug Power00:23:29We have about 25% of our staff, especially a large percent of the folks who are in our liquefier business, who have rather unique skill sets in those areas, which we have been actively pursuing. You know, don't be surprised if we close deals which are the size of gross margin positive and profitable deals, which are the size of a large 100 megawatt electrolyzer project in the coming months. And, you know, I think that probably when you start thinking about upside opportunities in the near term with low risk, which aligns with the present business climate, that's really where Plug has some side focus to build the industry. Manav GuptaExecutive Director at UBS Group00:24:21Thank you. Andrew MarshCEO & Director at Plug Power00:24:23Thanks. Good question. Operator00:24:26Thank you. Next question is coming from David Ricardo from Morgan Stanley. Your line is now live. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:24:31Oh, hey. Thank you so much for taking my questions. Andrew MarshCEO & Director at Plug Power00:24:34Hi, David. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:24:37You know, could you maybe give an update on what you're seeing in terms of tariff impacts, on the business and your efforts to offset them? Where do those stand? Andrew MarshCEO & Director at Plug Power00:24:47Yeah. Let me, take the first crack, Paul, and then I'll turn it over to you. And I think you have to kinda separate out the three businesses. Our hydrogen generation business today has zero impact based on tariffs. The second business, our electrolyzer business, the impact is rather minimal. Andrew MarshCEO & Director at Plug Power00:25:13And you have to remember that we have a network of integrators around the world who, next to our stack, we will be procuring, most materials locally for that business. And when we do an evaluation of the impact of tariffs, for our electrolyzer business, it's really in the range of two to 3%. Our tariffs for the material handling business are really dominated by China. Over the past, you know, if you went five years ago, the majority of our bill of material was Chinese based. Today, for the material handling business, it's under 15% and continues to decline. Andrew MarshCEO & Director at Plug Power00:26:06You know, we can see tariff impacts over 10% in our cost for material handling, which like most folks, have to offset with price. That being said, I would say our competitors, especially when you think competitive technologies like material handling, have certainly, you know, using material handling using lithium batteries certainly have a much larger overhang when it comes to tariffs. So the impacts are important, but because of how we develop the supply chain for electrolyzers and the improvements we've made over the years to move away from China, you know, based on, you know, the tariff profiles that started years ago, you know, has positioned us to mitigate a lot of those issues. Paul, do you wanna add? Paul MiddletonCFO at Plug Power00:27:03Yeah. The only thing else I'd add, Andy, is that, you know, this is one time we're having a lot of that inventory has been helpful that, you know, it's allowed us to defer where there are some benefit impacts that as we leverage that inventory base that we already had paid for and procured, it generates cash, but it also defers some of those tariff impacts, which gives us more time to do things like, you know, co source and other locations that that don't that aren't subject to the tariffs. So, you know, it's that's that's actually been beneficial. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:27:38Got it. Yeah. That makes sense. That's helpful. And it so it sounds like so this wouldn't throw you off from your gross margin target this year. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:27:47And did I hear correctly, it's more on the pricing side of things that you'd be able to offset that? Andrew MarshCEO & Director at Plug Power00:27:54Yes. And and and, David, on the material handling side, it's really not problematic for either electrolyte for electrolyzers or hydrogen production. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:28:07Yep. Got it. And then would you be able to give an update on your plans for the Texas, facility? And also what, you know, what timing would be natural to consider bringing in a partner as you start to build that out? Andrew MarshCEO & Director at Plug Power00:28:25So we're looking to commence construction by the end of this year for taxes. You know, if you start thinking about taxes, we have a lot of we have the power from our 310 megawatt deal with NextEra at very competitive electricity prices. We've already we already have the water available at this site as we work very closely with the local community in establishing the availability of water. We have the equipment for Texas. We're working very closely with the DOE. Andrew MarshCEO & Director at Plug Power00:29:15You know, I had a I gotta tell you, we met with Greg Beard who heads the DOE loan program, and I walked away very, very impressed with his knowledge of the energy market and what we're looking to accomplish. You know, I think that we're looking at, you know, you know, working with the DOE to finalize their support for taxes, you know, with the new Trump administration, which quite honestly has been very supportive of this project. And we're looking to, you know a good chance we'll look to bring a partner in this by the fourth by the by mid fourth quarter. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:30:04Excellent. Andrew MarshCEO & Director at Plug Power00:30:05Did that help, David? David ArcaroExecutive Director - Equity Research at Morgan Stanley00:30:06Yes. Perfect. Appreciate it. Andrew MarshCEO & Director at Plug Power00:30:08Okay. Operator00:30:11Thank you. Next question today is coming from Eric Stine from Craig Hallum. Your line is now live. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:30:16Hi, everyone. Thanks for taking the questions. Andrew MarshCEO & Director at Plug Power00:30:18Hi, Eric. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:30:20Hey. So just thinking about margin improvement in your goal at exiting the end of the year, can you just talk about how you kind of expect that to play out over the next two quarters? You mentioned the three areas, quantum leap, some of the steps there. Obviously, the hydrogen supply agreement is huge, and then the service side. I mean, do you expect this to be kind of a a gradual from here to that level or, you know, potentially a bigger step up in improvement for q four? Paul MiddletonCFO at Plug Power00:30:56Yeah. I I I guess I'd qualify it as a gradual, you know, that that we we expect it certainly in q three. It's gonna be sequentially better, you know, obviously than than prior year, but but certainly, sequentially better than than last quarter or second quarter as well. And then we expect, you know, the real tipping point to hit in q four. Got it. And Andrew MarshCEO & Director at Plug Power00:31:21The equation's actually really simple. And Paul, correct me if I'm wrong. We have to sell more, which drops, you know, because of covering fixed cost, drops, you know, the contribution margins north of 35% Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:31:37Yep. Andrew MarshCEO & Director at Plug Power00:31:37When we sell more. We have to you know, the hydrogen improvements, we will see. The supply agreements guarantees it. The performance of the plants are very important. And third item is continue improvements with service, which were know, I've always, Erica, that's an area where I've always been cautious. Andrew MarshCEO & Director at Plug Power00:32:06But between the price increases we've seen as well as the improved performance of the units with our increased focus, it really puts us on a pathway that I think we all feel comfortable that gross margin neutrality is achievable and, you know, quite honestly, very easy to understand as we operate the business every day. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:32:36Got it. That that is helpful and a good segue, I guess, to my, my second question, which would just be, it looks like, unless I missed it, not guiding to specifics in terms of revenue for Q3. But safe to say that, you know, with that gross margin kind of improvement between here and the end of the year, you expect sequential growth between here and the end of the year? Andrew MarshCEO & Director at Plug Power00:33:03We expect that, the second half, and I've been real cautious just in case a program falls one way or another, you know, we are real we're very confident about our revenue targets for the second half. As you know, in previous quarters, we've ran into some quarterly issues, and we wanna avoid that. But we're feeling really good about the second half. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:33:30Okay. Thank you. Andrew MarshCEO & Director at Plug Power00:33:31Alright. Thanks, Eric. Operator00:33:33Thank you. Our next question is coming from Dushyah Helani from Jefferies. Your line is now live. Dushyant AilaniSVP at Jefferies Financial Group00:33:43Hey, guys. Thanks for taking my question. My first one is just on the cash burn for the year. I know that you guys have talked about inventory unwinding and some of the tailwinds. But, like, how do you think about just the need for cash? Dushyant AilaniSVP at Jefferies Financial Group00:34:01Do you think you'll have to tap into the credit facility or or the ATM, or are we good there? Paul MiddletonCFO at Plug Power00:34:09Yeah. Let me just for context, you know, first half is down, you know, over 40% from prior year, and we knew that it would be the heavier part of the year, given given that the volume's bigger in the second half, as Andy alluded to, as well as the progression of the the the the quantum leap of savings. And so I'm actually very I feel very good about our our posture as we go into the second half. You're gonna see not just reductions year over year, but you're gonna see you know, we expect meaningful reduction in the burn rate from the first half. And that puts us in a good position when you look at us ending with a 140,000,000 in cash plus another 100,000,000 of restrict under you know, the restricted cash getting released in the second half. Paul MiddletonCFO at Plug Power00:34:56And we do have the credit facility available to us to help help fund the business as well. And then we have additional initiatives, you know, that we're looking at in terms of monetizing assets and and doing things. So we've been doing a real good job, the first half of the year, and we expect that that will continue in the second half. And the combination of our cash and the the credit facility and other other, you know, means in our our disposal, we feel like we're in a really good really good position. Dushyant AilaniSVP at Jefferies Financial Group00:35:21Got it. Thank you. And then my second one is on with the '48 e kind of coming back starting 2026, are you hearing any of your customers kind of delay or push out any orders so that they can take advantage of that ITC 26 or not really? Andrew MarshCEO & Director at Plug Power00:35:38You wanna talk about that, Paul? Because it's really a question of when it's commissioned. Paul MiddletonCFO at Plug Power00:35:44Yeah. You know, over you know, we've been a part of billions of dollars of programs over the you know, my tenure here. And so I've learned more about ITC and qualification than I ever thought I would. And, you know, so what we're working with customers on is there's a lot of customers that like to mobilize early and get equipment getting get it going and get ready for success and be ahead of it. And so a lot of them are investing, you know, in in procuring equipment, you know, in in the latter part of this year for early first quarter deployments. Paul MiddletonCFO at Plug Power00:36:15And the ITC really counts when you commission the equipment. So it it actually enable that process enables them to, you know, procure the the in many cases, procure the the equipment early, which we get revenue, you know, when we ship the equipment. So that's beneficial to us as well. So that's how the a lot of them are playing it through the next three, six months given all their, you know, plans over that duration of when they're when they're timing turn things on. And it works really well for the customers anyway because, you know, they they like to really turn stuff on, you know, after they get past, you know, the the the busy periods. Paul MiddletonCFO at Plug Power00:36:52And so they'll make a lot of investments towards the end of the year with the ideas of either turning it in, you know, typically over Christmas or the first part of the year anyway. So that timing, you know, actually works well for everybody in addition to taking advantage of the ITC and enable us to get the revenue, you know, for some of those programs in in the back half. Dushyant AilaniSVP at Jefferies Financial Group00:37:11Got it. Thank you. Operator00:37:15Thank you. Next question is coming from Sameer Joshi from H. Wainwright. Your line is now live. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:37:21Hey. Good afternoon. Thanks for taking my questions. Congrats on the good progress on the gross margin. My first question is just about that. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:37:31It seems your equipment revenues sort of are flat or rather have increased, but the gross margin has not, increased as much. I I know your service is driving the, rep, gross margin improvement, but should we expect any improvement in the equipment costs? Andrew MarshCEO & Director at Plug Power00:37:54Do do you wanna take that, Paul? Hey. Hello me hello, Sameer. Go ahead, Paul. Paul MiddletonCFO at Plug Power00:37:59Hey, Sameer. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:38:00How are you? Paul MiddletonCFO at Plug Power00:38:01Yeah. The the short answer is yes. And, you know, when you look at the improvement, you know, service is certainly contributing. Paul MiddletonCFO at Plug Power00:38:08But as a percentage of revenue, you know, PPA and fuel and other things are contributing too, given the price hikes and the things that we're doing. But, you know, we as Andy alluded to in the in the guidance, you know, you can kind of impute what that means for volumes and and sales in the second half. And so growth helps a lot in leveraging the fixed the the the overhead and fixed cost on equipment. And then I would also add that a lot of the cost reductions in in Quantum Leap, as we've kinda talked about, you know, you start seeing some of those benefits in q two, but you'll see more full quarter benefits in the third and the fourth quarter now that those programs have been deployed and committed to. So as an example, some of the rooftop consolidations that we've been doing, you know, we may have completed those programs recently, but you don't have full quarters yet of those benefits. Paul MiddletonCFO at Plug Power00:38:57So, you know, those those things will start to compound. Mix helps a lot as we move into the second half, and and we're constantly looking at ways to continue reducing the the the cost of that that equipment. So volume, you know, supply chain leverage, Quantum Leap benefits, benefits, all those things will drive absolutely will drive, margin enhancement on equipment in the second half. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:39:21Understood. Thanks for that. And then just, stepping back and looking at, your future customers, you you have mentioned renewable diesel and SaaS. Are you engaging with those players? What what is the activity on your side on that front? Andrew MarshCEO & Director at Plug Power00:39:41So when you look at activities there, there is equipment that is used in a you know? And let me take a take a shot at a it's called a blue hydrogen plant. There are skills that we have for our liquefier business specifically that are, you know, transferable as well as they have worked in those areas before, which we can leverage for some rather large deployments which can be revenue positive for us and gross margin positive for Samir. So there are things like hydro treaters and other capabilities which we have embedded in the business that, it makes a great deal of sense for us to, provide support for blue hydrogen projects since, it's an area of expertise for us. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:40:52Got it. Thanks for that. Thanks for taking my questions. Operator00:40:55Thank you. Next question is coming from Amit Takkar from BMO Capital Markets. Your line is now live. Ameet ThakkarAnalyst at BMO Capital Markets00:41:04Hey. Good evening. Thanks for taking my questions. Andrew MarshCEO & Director at Plug Power00:41:08Good evening. Ameet ThakkarAnalyst at BMO Capital Markets00:41:09Thank you. On the 300, I guess, million dollars of kind of the credit facilities that's still available to you all, My understanding is that that's kind of structured in kind of two tranches for the remaining balance. For the second tranche, is there any sort of kind of, guess, requirement for you to have authorization to increase your share account? Paul MiddletonCFO at Plug Power00:41:34There's no requirement to decrease our share account. Andrew MarshCEO & Director at Plug Power00:41:37Decrease our share. Paul MiddletonCFO at Plug Power00:41:38Oh, increase our share account. Andrew MarshCEO & Director at Plug Power00:41:41As far as the Yorkville deal. Paul MiddletonCFO at Plug Power00:41:43Yeah. I'm I'm sorry. I misunderstood your question. No. There's no the only you know, there was a triggering effect on amortization, you know, when when if if and just if and when we we decided to to put actions in place, but there's no requirement in order for us to access the, you know, the additional committed portion of it. Ameet ThakkarAnalyst at BMO Capital Markets00:42:06Okay. And and so you could access the full 105,000,000 under that hunch, like, tomorrow if you wanted to? Paul MiddletonCFO at Plug Power00:42:15The the 105 is available to us as part of the agreement if, you know, if and when we it made sense and prudent that we wanted to access it, then it is available to us. Ameet ThakkarAnalyst at BMO Capital Markets00:42:26Great. And then the $80,000,000 of restructuring charges for, I guess, to become on the restructuring efforts, was any of that accounted for in in your COGS and which may have kind of, I guess, kind of artificially kind of depressed your gross margins for the quarter? Paul MiddletonCFO at Plug Power00:42:44I well, auto gross margins were a big improvement as, you know, because sequentially in year over year. But no. The the they're they're they show up in restructuring and other line items in our in our p and l. So it it it wasn't the you know, wasn't wasn't showing up in COGS. What I would tell you is those actions, you know, are part of a broader cadre of actions that we're taking that collectively are continuing to drive gross margin improvements. Paul MiddletonCFO at Plug Power00:43:10And so, you know, you'll see sequential benefits in the in the in the third quarter and in the fourth quarter and onward because of that, a lot of those actions that are that that, you know, stem some of those charges. Ameet ThakkarAnalyst at BMO Capital Markets00:43:23Great. Thanks. I'll pass it along. Operator00:43:27Thank you. Next question is coming from Sky Landon from Rothschild and Company Redburn. Your line is now live. Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:43:36Hey. Thanks, guys. Just coming back to the electrolyzer division and specifically the European electrolyzer projects, which are just closed in 2025, 2026. I was just wondering if you could maybe elaborate on what needs to happen for these projects to to actually take FID. Is it the I mean, is it the release of subsidies? Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:43:55Do they need funding confirmation, offtake contracts, grid connections? I think it'd be useful to sort of dig into what what needs to happen for those to actually kinda go ahead. Thanks. Andrew MarshCEO & Director at Plug Power00:44:07Jose, do you wanna take that? Jose CrespoChief Revenue Officer at Plug Power00:44:09Yeah. Absolutely. Hi, Scott. Thank you so much for the for the question. It's it's so in general, for an electrolyzer project to happen, you need a certain number of things to to to take place. Jose CrespoChief Revenue Officer at Plug Power00:44:24And you mentioned some of them. One of them is you gotta have the power, you gotta have the land, you gotta have you gotta have the water, You gotta have the the the funding, and that comes from government funding and also, you know, investments. And then finally, and and very importantly, you gotta have the offtakers. Right? So we have projects that are in different stages. Jose CrespoChief Revenue Officer at Plug Power00:44:47And, obviously, you know, the projects that we're talking about that we're thinking that are gonna go FID next year is because they are closer to those type of things, and we believe they can achieve those parameters next year. And then we have a few projects, a couple of them, for example, in The UK that we know they have all of that. They have, you know, they have the land, they have the power, they have off takers, and they have funding from car one. And we believe that and we've been told that, their FID is happening, you know, at the end of q three or q four. So it is it is you know, each project needs its own, but each project needs to hit all those parameters to happen. Jose CrespoChief Revenue Officer at Plug Power00:45:27So, you know, it's it's it's different in every project, and but all of them need to get those those items checked to go FID. Andrew MarshCEO & Director at Plug Power00:45:38Jose, you wanna talk about Spain you wanna talk about Spain too? Jose CrespoChief Revenue Officer at Plug Power00:45:44Specifically, any project in specifically, Andy, or in general? In general. Okay. So the Spanish market is is a market where we're seeing a lot of activity. It's it's a market that the government is helping and putting a lot of effort within the within the market to push some of these projects ahead. Jose CrespoChief Revenue Officer at Plug Power00:46:06And it's also a market where you're gonna see several projects coming online based on offtake agreements and offtake requirements in in that market. We have several gigawatts of projects that we have quoted in, in the in the Spanish market, and we expect that some of those are gonna come to FID in 2026, and we're gonna see some business in the in the Spanish market. As you know, we already have in that market a pretty large project with, you know, BP in in Castellon. It's a 25 megawatt project. And also in the Iberian Peninsula, not in not necessarily in Spain, but also, you know, in in the Iberian Peninsula in Portugal, we have another project for 100 megawatts with, GALT. Jose CrespoChief Revenue Officer at Plug Power00:46:56So those those projects are anchored projects, and we are seeing a lot of traction in in those markets for ELX projects and many of them meeting the criteria that I mentioned before. Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:47:11Great. Thanks. Operator00:47:13Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Andy for any further closing comments. Andrew MarshCEO & Director at Plug Power00:47:20Well, thank you for joining the call today. We are looking for continue we're focused on continuous progress in our gross margin for revenue generation as well as for continuing to improve the business for the future. So I really appreciate everyone taking the time today and look forward to talking to many of you throughout the quarter. Bye now. Operator00:47:53Thank 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.Read moreParticipantsExecutivesTeal Vivacqua HoyosVP -Marketing & CommunicationsAndrew MarshCEO & DirectorJose CrespoChief Revenue OfficerPaul MiddletonCFOAnalystsColin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLCManav GuptaExecutive Director at UBS GroupDavid ArcaroExecutive Director - Equity Research at Morgan StanleyEric StineSenior Research Analyst at Craig-Hallum Capital Group LLCDushyant AilaniSVP at Jefferies Financial GroupSameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLCAmeet ThakkarAnalyst at BMO Capital MarketsSkye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co RedburnPowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Plug Power Earnings Headlines3 Things Plug Power Would Need to Do Before I Would Buy the Stock3 hours ago | fool.comDid Plug Power's (PLUG) Cost Cuts and Margin Gains Just Shift Its Investment Narrative?August 26 at 12:42 AM | finance.yahoo.comTrump’s national nightmare is herePorter Stansberry and Jeff Brown say a new U.S. national emergency is already underway — and it could trigger the biggest forced rotation of capital since World War II. They reveal why Trump is mobilizing America’s tech giants… and name the two stocks most likely to soar as trillions shift behind the scenes.August 27 at 2:00 AM | Porter & Company (Ad)Plug Power Stock Is Cheap, but Does That Make It a Buy Now?August 24 at 10:10 AM | fool.comIs Plug Power Stock a Millionaire Maker?August 24 at 4:36 AM | fool.com1 Reason I'm Still Holding On to Hope for Plug Power StockAugust 23, 2025 | fool.comSee More Plug Power Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Plug Power? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Plug Power and other key companies, straight to your email. Email Address About Plug PowerPlug Power (NASDAQ:PLUG) Inc. develops hydrogen and fuel cell product solutions in North America, Europe, Asia, and internationally. The company offers GenDrive, a hydrogen-fueled proton exchange membrane (PEM) fuel cell system that provides power to material handling electric vehicles; GenSure, a stationary fuel cell solution that offers modular PEM fuel cell power to support the backup and grid-support power requirements of the telecommunications, transportation, and utility sectors; ProGen, a fuel cell stack and engine technology used in mobility and stationary fuel cell systems, and as engines in electric delivery vans; GenFuel, a liquid hydrogen fueling delivery, generation, storage, and dispensing system; GenCare, an ongoing Internet of Things-based maintenance and on-site service program for GenDrive fuel cell systems, GenSure fuel cell systems, GenFuel hydrogen storage and dispensing products, and ProGen fuel cell engines; and GenKey, an integrated turn-key solution for transitioning to fuel cell power. It also provides electrolyzers, a hydrogen generator for clean hydrogen production; liquefaction systems that provides liquid hydrogen to customers; cryogenic equipment for the distribution of liquified hydrogen, oxygen, argon, nitrogen and other cryogenic gases, including trailers and mobile storage equipment; and liquid hydrogen, an alternative fuel to fossil-based energy. The company sells its products through a direct product sales force, original equipment manufacturers, and dealer networks. Plug Power Inc. was incorporated in 1997 and is headquartered in Latham, New York.View Plug Power ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles After Earnings Miss, Walmart Is Still a Top Consumer Staples PlayRoyal Caribbean Earnings Beat Fuels Strong 2025 OutlookDLocal Stock Soars 43% After Earnings Beat and Raised GuidanceGreen Dot's 30% Rally: Turnaround Takes Off on Explosive EarningsElbit Systems Jumps on Record Earnings and a $1.6B ContractBrinker Serves Up Earnings Beat, Sidesteps Cost PressuresWhy BigBear.ai Stock's Dip on Earnings Can Be an Opportunity Upcoming Earnings Autodesk (8/28/2025)Marvell Technology (8/28/2025)Canadian Imperial Bank of Commerce (8/28/2025)Dell Technologies (8/28/2025)Toronto Dominion Bank (8/28/2025)Alibaba Group (8/29/2025)Salesforce (9/3/2025)Broadcom (9/4/2025)Oracle (9/8/2025)Synopsys (9/9/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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PresentationSkip to Participants Operator00:00:00Greetings, and welcome to the Plug Power Second Quarter Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Teal Hoyos, Vice President, Marketing and Communications for Plug Power. Please go ahead, Teal. Teal Vivacqua HoyosVP -Marketing & Communications at Plug Power00:00:32Thank you. Welcome to the twenty twenty five 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 of our 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. Teal Vivacqua HoyosVP -Marketing & Communications at Plug Power00:01:07We 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 ks for the fiscal year ending 12/31/2024, our quarterly report on Form 10 Q for the quarter ending 03/31/2025, as well as other reports we file from time to time with the SEC. These forward looking statements speak only as of the date 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. Andrew MarshCEO & Director at Plug Power00:02:16Good afternoon, and thank you for joining us. As we begin, I want to reaffirm the business priorities we set forth under project Quantum Leap. Priorities that continue to guide every decision we make. Item one, drive gross margin improvements through operational efficiencies, cost reductions, and improved pricing discipline. Two, streamline our operations by consolidating facilities, optimizing our manufacturing footprint, and accelerating productivity gains. Andrew MarshCEO & Director at Plug Power00:02:58Three, strengthening the reliability and performance of our service business, combining unit level improvements with better pricing models. Four, expand our hydrogen generation network while improving the cost structure of hydrogen supply. Five, advance our electrolyzer business by building a robust sales funnel and securing early stage agreements ahead of customers' final investment decisions. And six, maintain strict cash discipline to bridge the positive EBITDAS in the 2026. This quarter marks another important step forward delivering on these commitments, both operationally and financially. Andrew MarshCEO & Director at Plug Power00:03:46Our team continues to execute with discipline and the results we're sharing today reflect meaningful progress towards the long term goals we've outlined. We closed the second quarter with $174,000,000 in revenue, up 21% year over year, driven by strong demand across our GenDrive, GenFuel, and GenEcho platforms. Electrolyzer sales more than tripled from a year ago, reaching roughly $45,000,000 in the quarter, underscoring the growing role of GenEco as the preferred choice for industrial scale applications. Gross margins improved dramatically, moving from negative 92% in Q2 of last year to negative 31% this quarter. The improvement is a result of deliberate action, better service execution, competitive hydrogen pricing, and product cost reductions. Andrew MarshCEO & Director at Plug Power00:04:53Service performance is being driven by a combination of unit level improvements and pricing adjustments, and we see a clear path for continued project progress in the quarters ahead. Project Quantum Leap remains central to these gains as we streamline our operations, consolidate facilities, and drive efficiencies across the business. We remain on track for gross margin neutrality by q four with tangible steps in place to get there. Our hydrogen plants in Georgia and Louisiana are performing well, and a recently executed hydrogen supply agreement will deliver substantial and certain cost savings in the second half of the year. Pricing adjustments, particularly in service, were adding resilience to our margin profile while maintaining strong customer relationships. Andrew MarshCEO & Director at Plug Power00:05:54On the sales front, we were approximately $700,000,000 in revenue this year. Looking further ahead, our electrolyzer pipeline is robust. Some additional deals are expected to close this year, while several major contracts are moving towards final investment decisions in 2026. We're act also actively pursuing pre FID agreements to secure value earlier in the process. In material handling, we added new customer sites this quarter and our refreshed value proposition is more compelling than ever. Andrew MarshCEO & Director at Plug Power00:06:35A little known fact, we have already removed the equivalent of a medium sized power plant from the grid as customers have transitioned to hydrogen. Many applications today require significant electrical power, such as a large scale refrigeration system, and our solution succeeds in either removing that demand from the grid entirely or time shifting at the periods when the grid is less stressed. This not only lowers operational costs from customers, but also enhances energy reliability and sustainability. From a policy standpoint, recent congressional legislation has provided long term clarity on the 45 b production tax credit and 48 e investment tax credit. This is a meaningful tailwind that aligns perfectly with our strategy to expand hydrogen production and leverage tax credit monetization monetization to improve capital efficiencies. Andrew MarshCEO & Director at Plug Power00:07:41On the DOE loan, we continue to work constructively with the loan program office to align with evolving priorities. We may remain confident in our ability to begin construction on DOE supported projects before the end of the year, accelerating the expansion of our hydrogen generation network. We've also maintained strong cash discipline in the quarter. Net cash in operating and investing activities declined over 40% year over year. We ended the quarter with over a $140,000,000 in cash and have access to more than $300,000,000 in additional debt capacity. Andrew MarshCEO & Director at Plug Power00:08:27Stepping back, Plug today is executing with focus, delivering measurable results, and building the foundation for a prop for profitable growth. Our product portfolio from electrolyzers to fuel cells to our hydrogen network position us as a leader in a in a hydrogen economy that is gaining real momentum. The work we're doing now isn't just about meeting quarterly targets. It's about ensuring Plug is the premier hydrogen solution provider for years to come. I have with me Paul, Sanjay, and Jose, and we're now open to take questions. Operator00:09:09Thank you. We'll now be conducting a question and answer session. Our first question is coming from Colin Rusch from Oppenheimer. Your line is now live. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:09:36Thanks so much, guys. Now can you talk about the electrolyzer pipeline? Certainly, there's been a lot of interest around green hydrogen, but I'm curious how quickly projects are moving forward and how those sales are moving through your pipeline, and and how we should think about that cadence going forward. Andrew MarshCEO & Director at Plug Power00:09:54Carlo, I'm gonna let Jose take that question. Jose CrespoChief Revenue Officer at Plug Power00:09:58Hi, Colin. Thank you for your question. So we have a very strong fund, on the electrolyzer side, mainly driven by opportunities in, regions like, Europe. We discussed this in the last, earnings call. We see some projects closing before the end of the year, and, we are also seeing some projects going FID in 2026. Jose CrespoChief Revenue Officer at Plug Power00:10:26Andy mentioned that we're working with some of those projects to try to get agreements, pre FID to secure business and position ourselves better when these projects go FID in in 2026. We're also working in many of these projects, to set them up as, you know, revenue recognition, over time, which is gonna allow us also to accelerate a little bit when we see revenue after the booking. So, again, a strong very strong, sales funnel, and we see some opportunities closing in 2025 and other opportunities going FID in 2026. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:11:09Excellent. And then on the hydrogen production, of your own facilities, where can you or what can you tell us in terms of uptime yield, you know, how those are performing, relative to to, you know, design expectations, and how much you're how much leverage you're getting out of the, you know, that ramp in terms of helping close some of the other customers, whether it's on the material handling side around security supply or around electrolyzers? Andrew MarshCEO & Director at Plug Power00:11:37Yeah. So let me take those questions probably in reverse order, Colin. Security supply, we feel really, really good about. As you know, that was a big problem in 2023. Our ability to have hydrogen available, the network with having 40 tons of plug capacity available, it really has dramatically changed, the availability questions and challenges we faced in previous years. Andrew MarshCEO & Director at Plug Power00:12:17And it is a continue it is important that we bring Texas online over the next two years to continue to make sure that there is a robust network. From a performance point of view, when I look at Georgia, you know, what I'm really pleased with is that we can bring it up and bring it down when we like based on electricity prices. We have done a really, really good job at the operation of Georgia. And we're a year into Georgia, and, you know, it's operating and performing, you know, as we request. And so we're really, really pleased with Georgia. Andrew MarshCEO & Director at Plug Power00:13:02Louisiana is just beginning to ramp. So far the performance and the cost out of Louisiana, when we look at the relationship we have with Owen, is really our lowest cost lowest cost site to support our business. So we're quite honestly quite pleased with how both sites are performing and expect both to improve during the coming quarters. Colin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.00:13:34Thanks so much, guys. Andrew MarshCEO & Director at Plug Power00:13:36Yeah. Thanks, Colin. Operator00:13:40Thank you. Next question today is coming from Craig Irwin from ROTH Capital Partners. Your line is now live. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:13:46Hi. Good evening, and and thanks for taking my questions. So, Jose CrespoChief Revenue Officer at Plug Power00:13:49Andy Hi, Craig. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:13:49I was hope hey. So I was hoping tonight we could, we could just discuss what's changed for you guys in the last couple weeks. Right? It was it was a couple weeks ago, we had a really nice surprise in the one big beautiful bill. Right? Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:14:0545 e, 48 e, lot longer life, and they're in healthy shape, for a while. Right? Yep. Your customers would have been surprised too. I I'm guessing maybe some of them lobbied for that, but, most of your customers would have been surprised. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:14:20Can you talk about the the conversation with customers, how this has maybe shaped things or or impacted plans over over the last couple weeks? Andrew MarshCEO & Director at Plug Power00:14:31Craig, I am gonna turn that over to Jose since he talks to customers every day. Wanna give it a shot, Jose? Jose CrespoChief Revenue Officer at Plug Power00:14:39Thank you. Thank you, Craig. And a very good question. It is it is fairly recent. As you said, it's only a couple of weeks ago, but we have already had many conversations with customers. Jose CrespoChief Revenue Officer at Plug Power00:14:51They are excited about it. It opens up in the case of electrolyzers with PTC, a a a big opportunity for customers to, number one, have more time to take advantage of the PTC, and number two, make the business cases, feasible. So lots of conversations, early stage, but this has definitely reignited a lot of the conversations, obviously, mainly in The US. As you know, we have already discussed in the prior, earnings call the opportunities that we have in Europe, and those continue to be exciting, and we continue talking to to customers in Europe about, opportunities for ELX. In the case of ITC, the investment tax credit, which, as a reminder, you know, it will give our customers the opportunity to take advantage of 30% tax credit starting in January 2026. Jose CrespoChief Revenue Officer at Plug Power00:15:48We are talking to many customers in the material handling business. We were already trying to make the the the business case for our customers stronger even without the ITC. So now that we're adding the ITC, we see many of our customers quite excited about this. They see the business case even stronger than ever. And, I believe that we're gonna see a healthy growth in material handling in 2026 because of that. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:16:19Excellent. Excellent. So my my second question is about, inventory liquidation. Right? This quarter, you had another $35,000,000 cash contribution from inventory. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:16:29And with 45 v, 48 e, ICC, all these things starting to chip in your direction, and I guess Texas, you you'll you'll be making more progress on Texas pretty soon. Can you talk about the the contribution to, cash flows from inventory this year? Is there anything we should specifically watch for or any large items that might move, tranches bigger than, you know, $3,050,000,000 that that that could impact the cash flows? Andrew MarshCEO & Director at Plug Power00:17:01Do you wanna take that, Paul? Paul MiddletonCFO at Plug Power00:17:03Sure. Hey, Craig. It's Paul. How you doing? Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:05Hey. Paul MiddletonCFO at Plug Power00:17:08Yeah. We're we're targeting targeting at least another $100,000,000 plus reduction in inventory this year. We obviously see it as a tremendous opportunity to leverage that working capital. You're starting to see it as the volumes start to pick up in the second quarter and we'll pick up more in context to what Andy shared for the full year guidance. And we think we're pretty well positioned with the inventory, largely the inventory we need to deliver a lot of that. Paul MiddletonCFO at Plug Power00:17:37So we think that's very obtainable and, you know, hopefully and and still leave some room, to be honest with you. We from an operational standpoint, you know, even as we move into next year, we're still targeting to go even lower. So, you know, I I'd use that as a proxy for this year, plus or minus, and and we see it as as more opportunity as we go into next year. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:59Excellent. And then just another cash flow question to slip it in before I hop back in the queue. You've done a good job bringing down the the PPA cash over the last couple years. Do we cons continue with a similar tempo, you know, roughly 200,000,000 a year? Or is there any any reason that this could maybe accelerate or or decelerate from there? Paul MiddletonCFO at Plug Power00:18:20Yeah. When you look at the portfolio because we're not you know, as you know, we made a a strategic strategic shift where we're not offering that program. We we're customers are now buying direct, which is better for us from a cash standpoint. You know? So we're not adding to that portfolio, but it's scheduled to to wind down, you know, over the three plus years, call it. Paul MiddletonCFO at Plug Power00:18:41So that 200,000,000 a year is a good proxy. As we move into next year and you start getting past the five year amortization cycle, there are opportunities to potentially buy out of that early. And since it's net positive to us to do so in context of what the corresponding obligations are, you know, it's something that we'll be pursuing aggressively. So it'll be at least 200 and could be more. Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:08That's good to hear. Thanks again for taking my questions. Andrew MarshCEO & Director at Plug Power00:19:11Thanks, Craig. Operator00:19:13Thank you. Next question today is coming from Manav Gupta from UBS. Your line is now live. Manav GuptaExecutive Director at UBS Group00:19:18Good afternoon. My first question is to you about the your confidence level in getting to breakeven gross margins by year end, if you could talk about that. Andrew MarshCEO & Director at Plug Power00:19:31Paul, you wanna take a shot at that? Paul MiddletonCFO at Plug Power00:19:33Sure. So I think, you know, fortunately well, I say through hard work, you're seeing progress on the margin front already. And when you look at the second half, a couple things, you know, will continue. First of all, we've seen some of the benefits from Quantum Leap on the restructuring and things start to pay dividends in Q2, but you start to get full quarter benefits of those activities because as it takes some time to wind out some of those actions. Secondly, we announced the improvement in the cost pricing for the fuel contract. Paul MiddletonCFO at Plug Power00:20:11That really started July 1, and that will be a very meaningful amount every month. And so you're going to see tremendous leverage from that. The volume leverage that we get out of those incremental programs with increased sales will be certainly beneficial. And the other thing that's really super impactful is the progress we're making on service. I'd say we think we're really pleased with how we're seeing the cost rates come down on service, which really serves two benefits. Paul MiddletonCFO at Plug Power00:20:42One, it's less cash outlay to service units and two, puts us in a position to really have new programs being issued at very profitable profiles. So the combination of that activity really is going to continue to drive service and we expect a real traction there. So more things to come in terms of commercial developments and opportunities to work with customers to optimize. But those are some of the key drivers that are going to help us drive to that that margin profile positive. Manav GuptaExecutive Director at UBS Group00:21:19Thank you. That's all very encouraging. My quick follow-up here is you kind of mentioned the benefits of ITC to the material handling business. I'm coming in from a different direction. Can the benefits of ITC be used by a plug to go after the backup power market where, you know, you could provide the fuel cells for more backup power and then us, you know, companies can get ITC for it? If you could talk about the benefits of that. Andrew MarshCEO & Director at Plug Power00:21:46I first, Manav, I've been really very focused on keeping us on the ball, really looking at markets that are real today for plug. That's hydrogen generation material handling or electrolyzers. So we have done a rather large deployment, as you may know, in California, which is over eight megawatts. I think it's probably the largest stationary hydrogen deployment so far. A deployment that can leverage the ITC. Andrew MarshCEO & Director at Plug Power00:22:25I would just say that we will be very selective and thoughtful because we don't want anything to reduce the opportunity for us to achieve EBITDA breakeven in 2026, as well as, of course, near term gross margin breakeven. So there is an opportunity. You know, next year, we expect we will continue to grow our business. I would say when we look at near term opportunities that are not on the not as high profile. But we have been involved in a number of very interesting deals associated with energy transition projects where people are looking to leverage, fuels using blue hydrogen and liquid fuels. Andrew MarshCEO & Director at Plug Power00:23:29We have about 25% of our staff, especially a large percent of the folks who are in our liquefier business, who have rather unique skill sets in those areas, which we have been actively pursuing. You know, don't be surprised if we close deals which are the size of gross margin positive and profitable deals, which are the size of a large 100 megawatt electrolyzer project in the coming months. And, you know, I think that probably when you start thinking about upside opportunities in the near term with low risk, which aligns with the present business climate, that's really where Plug has some side focus to build the industry. Manav GuptaExecutive Director at UBS Group00:24:21Thank you. Andrew MarshCEO & Director at Plug Power00:24:23Thanks. Good question. Operator00:24:26Thank you. Next question is coming from David Ricardo from Morgan Stanley. Your line is now live. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:24:31Oh, hey. Thank you so much for taking my questions. Andrew MarshCEO & Director at Plug Power00:24:34Hi, David. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:24:37You know, could you maybe give an update on what you're seeing in terms of tariff impacts, on the business and your efforts to offset them? Where do those stand? Andrew MarshCEO & Director at Plug Power00:24:47Yeah. Let me, take the first crack, Paul, and then I'll turn it over to you. And I think you have to kinda separate out the three businesses. Our hydrogen generation business today has zero impact based on tariffs. The second business, our electrolyzer business, the impact is rather minimal. Andrew MarshCEO & Director at Plug Power00:25:13And you have to remember that we have a network of integrators around the world who, next to our stack, we will be procuring, most materials locally for that business. And when we do an evaluation of the impact of tariffs, for our electrolyzer business, it's really in the range of two to 3%. Our tariffs for the material handling business are really dominated by China. Over the past, you know, if you went five years ago, the majority of our bill of material was Chinese based. Today, for the material handling business, it's under 15% and continues to decline. Andrew MarshCEO & Director at Plug Power00:26:06You know, we can see tariff impacts over 10% in our cost for material handling, which like most folks, have to offset with price. That being said, I would say our competitors, especially when you think competitive technologies like material handling, have certainly, you know, using material handling using lithium batteries certainly have a much larger overhang when it comes to tariffs. So the impacts are important, but because of how we develop the supply chain for electrolyzers and the improvements we've made over the years to move away from China, you know, based on, you know, the tariff profiles that started years ago, you know, has positioned us to mitigate a lot of those issues. Paul, do you wanna add? Paul MiddletonCFO at Plug Power00:27:03Yeah. The only thing else I'd add, Andy, is that, you know, this is one time we're having a lot of that inventory has been helpful that, you know, it's allowed us to defer where there are some benefit impacts that as we leverage that inventory base that we already had paid for and procured, it generates cash, but it also defers some of those tariff impacts, which gives us more time to do things like, you know, co source and other locations that that don't that aren't subject to the tariffs. So, you know, it's that's that's actually been beneficial. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:27:38Got it. Yeah. That makes sense. That's helpful. And it so it sounds like so this wouldn't throw you off from your gross margin target this year. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:27:47And did I hear correctly, it's more on the pricing side of things that you'd be able to offset that? Andrew MarshCEO & Director at Plug Power00:27:54Yes. And and and, David, on the material handling side, it's really not problematic for either electrolyte for electrolyzers or hydrogen production. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:28:07Yep. Got it. And then would you be able to give an update on your plans for the Texas, facility? And also what, you know, what timing would be natural to consider bringing in a partner as you start to build that out? Andrew MarshCEO & Director at Plug Power00:28:25So we're looking to commence construction by the end of this year for taxes. You know, if you start thinking about taxes, we have a lot of we have the power from our 310 megawatt deal with NextEra at very competitive electricity prices. We've already we already have the water available at this site as we work very closely with the local community in establishing the availability of water. We have the equipment for Texas. We're working very closely with the DOE. Andrew MarshCEO & Director at Plug Power00:29:15You know, I had a I gotta tell you, we met with Greg Beard who heads the DOE loan program, and I walked away very, very impressed with his knowledge of the energy market and what we're looking to accomplish. You know, I think that we're looking at, you know, you know, working with the DOE to finalize their support for taxes, you know, with the new Trump administration, which quite honestly has been very supportive of this project. And we're looking to, you know a good chance we'll look to bring a partner in this by the fourth by the by mid fourth quarter. David ArcaroExecutive Director - Equity Research at Morgan Stanley00:30:04Excellent. Andrew MarshCEO & Director at Plug Power00:30:05Did that help, David? David ArcaroExecutive Director - Equity Research at Morgan Stanley00:30:06Yes. Perfect. Appreciate it. Andrew MarshCEO & Director at Plug Power00:30:08Okay. Operator00:30:11Thank you. Next question today is coming from Eric Stine from Craig Hallum. Your line is now live. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:30:16Hi, everyone. Thanks for taking the questions. Andrew MarshCEO & Director at Plug Power00:30:18Hi, Eric. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:30:20Hey. So just thinking about margin improvement in your goal at exiting the end of the year, can you just talk about how you kind of expect that to play out over the next two quarters? You mentioned the three areas, quantum leap, some of the steps there. Obviously, the hydrogen supply agreement is huge, and then the service side. I mean, do you expect this to be kind of a a gradual from here to that level or, you know, potentially a bigger step up in improvement for q four? Paul MiddletonCFO at Plug Power00:30:56Yeah. I I I guess I'd qualify it as a gradual, you know, that that we we expect it certainly in q three. It's gonna be sequentially better, you know, obviously than than prior year, but but certainly, sequentially better than than last quarter or second quarter as well. And then we expect, you know, the real tipping point to hit in q four. Got it. And Andrew MarshCEO & Director at Plug Power00:31:21The equation's actually really simple. And Paul, correct me if I'm wrong. We have to sell more, which drops, you know, because of covering fixed cost, drops, you know, the contribution margins north of 35% Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:31:37Yep. Andrew MarshCEO & Director at Plug Power00:31:37When we sell more. We have to you know, the hydrogen improvements, we will see. The supply agreements guarantees it. The performance of the plants are very important. And third item is continue improvements with service, which were know, I've always, Erica, that's an area where I've always been cautious. Andrew MarshCEO & Director at Plug Power00:32:06But between the price increases we've seen as well as the improved performance of the units with our increased focus, it really puts us on a pathway that I think we all feel comfortable that gross margin neutrality is achievable and, you know, quite honestly, very easy to understand as we operate the business every day. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:32:36Got it. That that is helpful and a good segue, I guess, to my, my second question, which would just be, it looks like, unless I missed it, not guiding to specifics in terms of revenue for Q3. But safe to say that, you know, with that gross margin kind of improvement between here and the end of the year, you expect sequential growth between here and the end of the year? Andrew MarshCEO & Director at Plug Power00:33:03We expect that, the second half, and I've been real cautious just in case a program falls one way or another, you know, we are real we're very confident about our revenue targets for the second half. As you know, in previous quarters, we've ran into some quarterly issues, and we wanna avoid that. But we're feeling really good about the second half. Eric StineSenior Research Analyst at Craig-Hallum Capital Group LLC00:33:30Okay. Thank you. Andrew MarshCEO & Director at Plug Power00:33:31Alright. Thanks, Eric. Operator00:33:33Thank you. Our next question is coming from Dushyah Helani from Jefferies. Your line is now live. Dushyant AilaniSVP at Jefferies Financial Group00:33:43Hey, guys. Thanks for taking my question. My first one is just on the cash burn for the year. I know that you guys have talked about inventory unwinding and some of the tailwinds. But, like, how do you think about just the need for cash? Dushyant AilaniSVP at Jefferies Financial Group00:34:01Do you think you'll have to tap into the credit facility or or the ATM, or are we good there? Paul MiddletonCFO at Plug Power00:34:09Yeah. Let me just for context, you know, first half is down, you know, over 40% from prior year, and we knew that it would be the heavier part of the year, given given that the volume's bigger in the second half, as Andy alluded to, as well as the progression of the the the the quantum leap of savings. And so I'm actually very I feel very good about our our posture as we go into the second half. You're gonna see not just reductions year over year, but you're gonna see you know, we expect meaningful reduction in the burn rate from the first half. And that puts us in a good position when you look at us ending with a 140,000,000 in cash plus another 100,000,000 of restrict under you know, the restricted cash getting released in the second half. Paul MiddletonCFO at Plug Power00:34:56And we do have the credit facility available to us to help help fund the business as well. And then we have additional initiatives, you know, that we're looking at in terms of monetizing assets and and doing things. So we've been doing a real good job, the first half of the year, and we expect that that will continue in the second half. And the combination of our cash and the the credit facility and other other, you know, means in our our disposal, we feel like we're in a really good really good position. Dushyant AilaniSVP at Jefferies Financial Group00:35:21Got it. Thank you. And then my second one is on with the '48 e kind of coming back starting 2026, are you hearing any of your customers kind of delay or push out any orders so that they can take advantage of that ITC 26 or not really? Andrew MarshCEO & Director at Plug Power00:35:38You wanna talk about that, Paul? Because it's really a question of when it's commissioned. Paul MiddletonCFO at Plug Power00:35:44Yeah. You know, over you know, we've been a part of billions of dollars of programs over the you know, my tenure here. And so I've learned more about ITC and qualification than I ever thought I would. And, you know, so what we're working with customers on is there's a lot of customers that like to mobilize early and get equipment getting get it going and get ready for success and be ahead of it. And so a lot of them are investing, you know, in in procuring equipment, you know, in in the latter part of this year for early first quarter deployments. Paul MiddletonCFO at Plug Power00:36:15And the ITC really counts when you commission the equipment. So it it actually enable that process enables them to, you know, procure the the in many cases, procure the the equipment early, which we get revenue, you know, when we ship the equipment. So that's beneficial to us as well. So that's how the a lot of them are playing it through the next three, six months given all their, you know, plans over that duration of when they're when they're timing turn things on. And it works really well for the customers anyway because, you know, they they like to really turn stuff on, you know, after they get past, you know, the the the busy periods. Paul MiddletonCFO at Plug Power00:36:52And so they'll make a lot of investments towards the end of the year with the ideas of either turning it in, you know, typically over Christmas or the first part of the year anyway. So that timing, you know, actually works well for everybody in addition to taking advantage of the ITC and enable us to get the revenue, you know, for some of those programs in in the back half. Dushyant AilaniSVP at Jefferies Financial Group00:37:11Got it. Thank you. Operator00:37:15Thank you. Next question is coming from Sameer Joshi from H. Wainwright. Your line is now live. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:37:21Hey. Good afternoon. Thanks for taking my questions. Congrats on the good progress on the gross margin. My first question is just about that. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:37:31It seems your equipment revenues sort of are flat or rather have increased, but the gross margin has not, increased as much. I I know your service is driving the, rep, gross margin improvement, but should we expect any improvement in the equipment costs? Andrew MarshCEO & Director at Plug Power00:37:54Do do you wanna take that, Paul? Hey. Hello me hello, Sameer. Go ahead, Paul. Paul MiddletonCFO at Plug Power00:37:59Hey, Sameer. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:38:00How are you? Paul MiddletonCFO at Plug Power00:38:01Yeah. The the short answer is yes. And, you know, when you look at the improvement, you know, service is certainly contributing. Paul MiddletonCFO at Plug Power00:38:08But as a percentage of revenue, you know, PPA and fuel and other things are contributing too, given the price hikes and the things that we're doing. But, you know, we as Andy alluded to in the in the guidance, you know, you can kind of impute what that means for volumes and and sales in the second half. And so growth helps a lot in leveraging the fixed the the the overhead and fixed cost on equipment. And then I would also add that a lot of the cost reductions in in Quantum Leap, as we've kinda talked about, you know, you start seeing some of those benefits in q two, but you'll see more full quarter benefits in the third and the fourth quarter now that those programs have been deployed and committed to. So as an example, some of the rooftop consolidations that we've been doing, you know, we may have completed those programs recently, but you don't have full quarters yet of those benefits. Paul MiddletonCFO at Plug Power00:38:57So, you know, those those things will start to compound. Mix helps a lot as we move into the second half, and and we're constantly looking at ways to continue reducing the the the cost of that that equipment. So volume, you know, supply chain leverage, Quantum Leap benefits, benefits, all those things will drive absolutely will drive, margin enhancement on equipment in the second half. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:39:21Understood. Thanks for that. And then just, stepping back and looking at, your future customers, you you have mentioned renewable diesel and SaaS. Are you engaging with those players? What what is the activity on your side on that front? Andrew MarshCEO & Director at Plug Power00:39:41So when you look at activities there, there is equipment that is used in a you know? And let me take a take a shot at a it's called a blue hydrogen plant. There are skills that we have for our liquefier business specifically that are, you know, transferable as well as they have worked in those areas before, which we can leverage for some rather large deployments which can be revenue positive for us and gross margin positive for Samir. So there are things like hydro treaters and other capabilities which we have embedded in the business that, it makes a great deal of sense for us to, provide support for blue hydrogen projects since, it's an area of expertise for us. Sameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLC00:40:52Got it. Thanks for that. Thanks for taking my questions. Operator00:40:55Thank you. Next question is coming from Amit Takkar from BMO Capital Markets. Your line is now live. Ameet ThakkarAnalyst at BMO Capital Markets00:41:04Hey. Good evening. Thanks for taking my questions. Andrew MarshCEO & Director at Plug Power00:41:08Good evening. Ameet ThakkarAnalyst at BMO Capital Markets00:41:09Thank you. On the 300, I guess, million dollars of kind of the credit facilities that's still available to you all, My understanding is that that's kind of structured in kind of two tranches for the remaining balance. For the second tranche, is there any sort of kind of, guess, requirement for you to have authorization to increase your share account? Paul MiddletonCFO at Plug Power00:41:34There's no requirement to decrease our share account. Andrew MarshCEO & Director at Plug Power00:41:37Decrease our share. Paul MiddletonCFO at Plug Power00:41:38Oh, increase our share account. Andrew MarshCEO & Director at Plug Power00:41:41As far as the Yorkville deal. Paul MiddletonCFO at Plug Power00:41:43Yeah. I'm I'm sorry. I misunderstood your question. No. There's no the only you know, there was a triggering effect on amortization, you know, when when if if and just if and when we we decided to to put actions in place, but there's no requirement in order for us to access the, you know, the additional committed portion of it. Ameet ThakkarAnalyst at BMO Capital Markets00:42:06Okay. And and so you could access the full 105,000,000 under that hunch, like, tomorrow if you wanted to? Paul MiddletonCFO at Plug Power00:42:15The the 105 is available to us as part of the agreement if, you know, if and when we it made sense and prudent that we wanted to access it, then it is available to us. Ameet ThakkarAnalyst at BMO Capital Markets00:42:26Great. And then the $80,000,000 of restructuring charges for, I guess, to become on the restructuring efforts, was any of that accounted for in in your COGS and which may have kind of, I guess, kind of artificially kind of depressed your gross margins for the quarter? Paul MiddletonCFO at Plug Power00:42:44I well, auto gross margins were a big improvement as, you know, because sequentially in year over year. But no. The the they're they're they show up in restructuring and other line items in our in our p and l. So it it it wasn't the you know, wasn't wasn't showing up in COGS. What I would tell you is those actions, you know, are part of a broader cadre of actions that we're taking that collectively are continuing to drive gross margin improvements. Paul MiddletonCFO at Plug Power00:43:10And so, you know, you'll see sequential benefits in the in the in the third quarter and in the fourth quarter and onward because of that, a lot of those actions that are that that, you know, stem some of those charges. Ameet ThakkarAnalyst at BMO Capital Markets00:43:23Great. Thanks. I'll pass it along. Operator00:43:27Thank you. Next question is coming from Sky Landon from Rothschild and Company Redburn. Your line is now live. Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:43:36Hey. Thanks, guys. Just coming back to the electrolyzer division and specifically the European electrolyzer projects, which are just closed in 2025, 2026. I was just wondering if you could maybe elaborate on what needs to happen for these projects to to actually take FID. Is it the I mean, is it the release of subsidies? Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:43:55Do they need funding confirmation, offtake contracts, grid connections? I think it'd be useful to sort of dig into what what needs to happen for those to actually kinda go ahead. Thanks. Andrew MarshCEO & Director at Plug Power00:44:07Jose, do you wanna take that? Jose CrespoChief Revenue Officer at Plug Power00:44:09Yeah. Absolutely. Hi, Scott. Thank you so much for the for the question. It's it's so in general, for an electrolyzer project to happen, you need a certain number of things to to to take place. Jose CrespoChief Revenue Officer at Plug Power00:44:24And you mentioned some of them. One of them is you gotta have the power, you gotta have the land, you gotta have you gotta have the water, You gotta have the the the funding, and that comes from government funding and also, you know, investments. And then finally, and and very importantly, you gotta have the offtakers. Right? So we have projects that are in different stages. Jose CrespoChief Revenue Officer at Plug Power00:44:47And, obviously, you know, the projects that we're talking about that we're thinking that are gonna go FID next year is because they are closer to those type of things, and we believe they can achieve those parameters next year. And then we have a few projects, a couple of them, for example, in The UK that we know they have all of that. They have, you know, they have the land, they have the power, they have off takers, and they have funding from car one. And we believe that and we've been told that, their FID is happening, you know, at the end of q three or q four. So it is it is you know, each project needs its own, but each project needs to hit all those parameters to happen. Jose CrespoChief Revenue Officer at Plug Power00:45:27So, you know, it's it's it's different in every project, and but all of them need to get those those items checked to go FID. Andrew MarshCEO & Director at Plug Power00:45:38Jose, you wanna talk about Spain you wanna talk about Spain too? Jose CrespoChief Revenue Officer at Plug Power00:45:44Specifically, any project in specifically, Andy, or in general? In general. Okay. So the Spanish market is is a market where we're seeing a lot of activity. It's it's a market that the government is helping and putting a lot of effort within the within the market to push some of these projects ahead. Jose CrespoChief Revenue Officer at Plug Power00:46:06And it's also a market where you're gonna see several projects coming online based on offtake agreements and offtake requirements in in that market. We have several gigawatts of projects that we have quoted in, in the in the Spanish market, and we expect that some of those are gonna come to FID in 2026, and we're gonna see some business in the in the Spanish market. As you know, we already have in that market a pretty large project with, you know, BP in in Castellon. It's a 25 megawatt project. And also in the Iberian Peninsula, not in not necessarily in Spain, but also, you know, in in the Iberian Peninsula in Portugal, we have another project for 100 megawatts with, GALT. Jose CrespoChief Revenue Officer at Plug Power00:46:56So those those projects are anchored projects, and we are seeing a lot of traction in in those markets for ELX projects and many of them meeting the criteria that I mentioned before. Skye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co Redburn00:47:11Great. Thanks. Operator00:47:13Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Andy for any further closing comments. Andrew MarshCEO & Director at Plug Power00:47:20Well, thank you for joining the call today. We are looking for continue we're focused on continuous progress in our gross margin for revenue generation as well as for continuing to improve the business for the future. So I really appreciate everyone taking the time today and look forward to talking to many of you throughout the quarter. Bye now. Operator00:47:53Thank 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.Read moreParticipantsExecutivesTeal Vivacqua HoyosVP -Marketing & CommunicationsAndrew MarshCEO & DirectorJose CrespoChief Revenue OfficerPaul MiddletonCFOAnalystsColin RuschMD & Head - Sustainable Growth & Resource Optimization at Oppenheimer & Co. Inc.Craig IrwinMD & Senior Research Analyst at Roth Capital Partners, LLCManav GuptaExecutive Director at UBS GroupDavid ArcaroExecutive Director - Equity Research at Morgan StanleyEric StineSenior Research Analyst at Craig-Hallum Capital Group LLCDushyant AilaniSVP at Jefferies Financial GroupSameer JoshiSenior Equity Research Analyst at H.C. Wainwright & Co., LLCAmeet ThakkarAnalyst at BMO Capital MarketsSkye LandonVP - Utilities & Renewables Equity Research at Rothschild & Co RedburnPowered by