Plug Power Q1 Earnings Call Highlights

Key Points

• Plug Power said first-quarter revenue rose 22% year over year to $163.5 million, while gross margin improved sharply to negative 13% from negative 55% a year ago. Management credited cost cuts under “Project Quantum Leap” and said it still expects positive EBITDA in Q4 2026.
• The electrolyzer business was a major growth driver, with revenue jumping to $40.8 million from $9.2 million in the prior-year quarter. Plug highlighted progress on large projects in Spain, Portugal, Canada and Uzbekistan, though management noted permitting delays can still slow deployments.
• Plug ended the quarter with $802 million in total cash and said asset monetization efforts, including Stream Data Centers transactions and a tax credit sale, should support liquidity. The company also guided for 13% to 15% full-year sales growth and said it aims to cut inventory by at least $100 million in 2026.

Plug Power NASDAQ: PLUG reported higher first-quarter revenue and a narrower gross loss as management said cost cuts, stronger electrolyzer activity and improving hydrogen fuel economics supported progress toward its 2026 profitability targets.

On the company’s 2026 first-quarter earnings call, CEO Jose Luis Crespo said revenue rose 22% year over year to $163.5 million, with growth across material handling, electrolyzers and hydrogen fuel. Gross margin improved to negative 13% from negative 55% a year earlier, a 42 percentage-point improvement.

Crespo said the cost actions initiated under “Project Quantum Leap” are now “substantially flowing through” the company’s profit and loss statement, and he said Plug expects gross margin to improve sequentially through 2026. Management reiterated its objective of delivering positive EBITDA in the fourth quarter of 2026.

Electrolyzer Revenue Rises on Project Milestones

Plug’s electrolyzer business was a major contributor to growth in the quarter. Crespo said electrolyzer revenue increased to $40.8 million from $9.2 million in the first quarter of 2025, reflecting project milestones across the company’s portfolio.

The company said it is commissioning a 25-megawatt project with Iberdrola and BP in Spain and finalizing installation activities for a 100-megawatt project with Galp in Portugal. Crespo described those as two of the largest PEM electrolyzer projects currently under deployment in Europe.

Plug also recently announced front-end engineering design work for a 275-megawatt project with Hy2gen in Canada. Crespo said Allied Green Ammonia’s 2-gigawatt project in Uzbekistan also advanced during the quarter, including a binding project implementation agreement with the Uzbekistan government and a memorandum of understanding with Uzbekistan airports tied to SAF and eSAF initiatives.

During the question-and-answer session, Crespo said large electrolyzer projects remain complex and can be delayed by permitting and other approvals, citing a 50-megawatt project in Australia that he said was awaiting an easement permit from a port. He added that activity tied to eSAF projects has accelerated recently, driven in part by concerns around jet fuel availability, energy security and geopolitical instability.

Material Handling Demand Supported by Existing Customers

In material handling, Crespo said Plug continues to see strong customer engagement due to productivity gains, product reliability and reduced dependence on the electrical grid. He said the reinstatement of the Investment Tax Credit has improved the economics of hydrogen-powered solutions for many customers.

Management said it expects increasing demand from Amazon and Walmart through new deployments and fleet refresh programs. Crespo said Plug’s first Amazon site was deployed in 2016, and the company expects refresh activity to begin accelerating at the end of 2026 and into 2027. He said Plug expects a cadence of roughly 10 to 12 Amazon site refreshes annually for several years, representing around 20,000 units over that period.

Crespo also said Plug is discussing a substantial refresh of Walmart’s installed base in 2026 and 2027. Beyond those large customers, he cited activity with automotive customers including BMW and Stellantis, as well as an $11 million site with Southwire.

In response to an analyst question, Crespo said new customer discussions increasingly include the ability of hydrogen systems to reduce electricity demand at customer sites. He said a site with 200 forklifts can reduce demand by roughly 2 megawatts, which he called valuable given utility power constraints linked to demand from data centers and other industries.

Margins Improve Across Service and Fuel

CFO Paul Middleton said the first-quarter results reinforce the company’s belief that it has reached an “inflection point” on margins. Excluding charges for customer warrants, he said material handling grew 15% year over year, electrolyzers grew 343% and hydrogen fuel sales grew 10%.

Middleton said GenDrive service costs per unit were down more than 30% year over year, driven by improved stack reliability and pricing actions. He said the company has reduced service labor needs at some sites as equipment requires fewer touches. Crespo added that stack life has doubled and, in some models, tripled, lowering parts costs and field service work.

Plug also reported improvement in hydrogen fuel margins. Middleton said the fuel margin rate improved by approximately 50.4 percentage points, supported by better leverage from Plug’s hydrogen platform, improved network efficiency and a third-party gas sourcing agreement signed last year. Crespo said the fuel business delivered approximately 20% top-line growth year over year, driven primarily by new material handling site deployments, with margins improving by 54 percentage points.

Middleton said Plug is still sourcing hydrogen through a mix of internal production and third-party supply, with the portfolio currently about 50/50. He said the company is focused on increasing utilization of its plants, optimizing delivery and improving storage and dispensing efficiency.

Liquidity and Cash Usage Remain Central Focus

Plug ended the quarter with $802 million in total cash, including $223 million in unrestricted cash and $579 million in restricted cash, Crespo said. Middleton said restricted cash is expected to be released at roughly $50 million per quarter over the next several years.

The company also pointed to asset monetization efforts as a source of liquidity. Crespo said Stream Data Centers transactions are expected to generate more than $275 million in additional proceeds, with the first transaction for approximately $142 million expected to close in June. Middleton also said Plug is working on the sale of a Section 48 investment tax credit associated with the St. Gabriel joint venture in Louisiana, totaling about $39.2 million and targeted to close by the end of May.

Middleton said first-quarter cash usage was consistent with Plug’s historical seasonality, though underlying burn was moderately better than the company’s internal plan. He said Plug ended the quarter with more than 10% more cash than anticipated. Capital expenditures were about $7 million, reflecting what Middleton described as a shift from building the hydrogen production network to leveraging the existing asset base.

Plug reported adjusted earnings per share of negative $0.08, compared with negative $0.17 in the prior-year quarter. Middleton said adjusted EPS excluded approximately $140 million in primarily non-cash charges related to convertible debt and warrant valuation adjustments.

Management Reiterates 2026 Targets

Looking ahead, Plug said it expects full-year sales growth of 13% to 15%, with the first half accounting for roughly 40% of full-year revenue. Middleton said second-quarter revenue is expected to increase sequentially from the first quarter, though possibly only slightly, and said the company expects gross margin rates to improve quarter over quarter.

Middleton also said Plug is targeting at least a $100 million reduction in inventory this year, with most of the progress expected in the second half. Operating expenses are expected to run at roughly $75 million per quarter, excluding some first-quarter charges that management said will not repeat.

Crespo closed the call by saying Plug’s priorities remain sales growth, disciplined execution, cost structure improvement, lower cash usage and positive EBITDA in the fourth quarter. Middleton said the company’s roadmap includes positive operating income in 2027 and full profitability in 2028.

About Plug Power NASDAQ: PLUG

Plug Power Inc is a U.S.-based company specializing in the design and manufacture of hydrogen fuel cell systems that serve as clean energy replacements for conventional batteries in electric vehicles and material handling equipment. Its core solutions include ProGen fuel cell engines, GenDrive power systems for forklifts and warehouse vehicles, and GenFuel hydrogen refueling infrastructure. These offerings are sold as standalone components or integrated turnkey solutions under the GenKey brand, providing customers with on-site refueling, equipment installation and maintenance services.

In addition to its fuel cell and refueling products, Plug Power develops backup power and off-grid energy solutions through its GenSure line, which targets telecommunications, data centers and utility applications.

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