Plug Power CEO: Is PLUG Stock Ready for a Hydrogen-Fueled Comeback?
Summary
Company Overview: Plug Power has been a leader in the hydrogen industry for 25 years, with significant global operations including the largest electrolyzer liquid hydrogen plant in the world.
Hydrogen Production: The company produces 40 tons of hydrogen daily across multiple states, surpassing NASA as the largest user of liquid hydrogen globally, with applications in fueling Amazon and Walmart's logistics operations.
Environmental Impact: Plug Power's green hydrogen initiatives aim to reduce CO2 emissions significantly, leveraging renewable energy sources like wind, solar, and nuclear to ensure zero carbon emissions.
Financial Performance: Despite challenges in the clean tech sector, Plug Power reported a 21% revenue growth, with plans to achieve gross margin break-even by the end of the year and EBITDA positive by 2026.
Growth Drivers: The company's electrolyzer sales nearly tripled, driven by global sustainability goals and industrial applications, including green ammonia and oil refinery projects.
Strategic Vision: Plug Power aims to be a major player in the global energy transition, focusing on low-cost hydrogen production to compete with natural gas, and expanding hydrogen infrastructure worldwide.
Competitive Landscape: The company emphasizes a strong, inclusive culture to attract top talent and focuses on customer service to maintain a competitive edge against other clean tech giants.
Innovation Focus: A key challenge is reducing construction costs for hydrogen plants, with future products designed for easy installation to accelerate market adoption and cost efficiency.
Transcript
Welcome to Opto Sessions, Andy. So, how are things? >> Well, uh almost Labor Day here and the summer's almost over and you know, for me and Plug, it's been a good summer. So, uh you know, just uh keep on pushing and working and moving ahead. >> Absolutely. Yeah. Look forward to hearing about some of that momentum in due course. Where are you talking to us from? >> I am in Slingerland, New York. And I suspect your office is saying, "Where the heck is Selenerland, New York?" Well, it's about five minutes from Albany, New York, the capital of the great state of New York, and about uh two and a half hours north of New York City. >> Lovely. Uh we've just opened well in the process of opening an office over in New York. Um so yeah, interested to to visit ASAP. >> I'd be happy to see you in your office there and do another interview. >> Yeah, that that would be great. Let's do a live one. Hopefully in the next couple of months we can get over there and do a live session. That would be great. >> Um I've uh I've got a couple of questions I here I suppose just to set the context and introduce Plug Power to any of our listeners that are unfamiliar with the company. So first of all, for anyone who hasn't been following the hydrogen revolution closely, perhaps you can just paint us a picture. What exactly is Plug Power building and why should people care? Well, first we're actually the ones who have built more than anyone else in the world. Uh we're not, you know, we we didn't enter hydrogen yesterday. We've been doing it for 25 years. And if you just span around, go around the world. Uh I'm sitting in our office here outside Albany, New York, which is a 350,000 square foot facility where we're in integrate fuel cells and electrolyers. >> Wow. >> About a hour and two hours west of us is our facility in Rochester, which is the largest stack manufacturer in the world. Uh you go around, you know, we have about 300 people in Europe. uh many of them developing electrolyer projects for uh the hydrogen activity going on all around the world. We have people in Pune, India. Uh we operate the largest uh electrolyer liquid hydrogen plant in the world producing 15 tons per day uh out in Georgia. So uh and we have two other hydrogen plants. So, uh, if you want to actually see the hydrogen at work today, it's a plug. >> Yeah. Fantastic. Well, let's dig into that then. Yeah, because you mentioned 15 tons there. I read that it was 40 tons daily across Georgia, Tennessee, and Louisiana. >> Yeah. >> Help help us kind of visualize that, you know, how many Amazon delivery trucks or homes is that fueling? >> Yeah. So best way to think about it is u about five years ago the largest user of liquid hydrogen in the world was actually NASA >> and plug is bigger than NASA today >> and so that just gives you a scale. So first we're the largest user in the world. Um when I think about uh 40 tons of hydrogen uh that's 40,000 kg and about a kilogram of hydrogen's about equal to two gallons of gasoline. So that's how much hydrogen it's we produce and that hydrogen's being used 247. And you know, about every two to three seconds in the United States, uh, there's probably a product mostly fuel cells for forklift trucks at places like Walmart and Amazon are being filled up with hydrogen produced by plug. And uh, here in the States, which is just a portion of our business, about 30% of retail food actually moves through products that are produced by plug power. >> Yeah. Fantastic. that helps to make it all less abstract for me and the listeners as well. Um I want to come back to your customer base but before we do um obviously a big part of hydrogen use is the benefit it provides in terms of CO2 prevention. So >> give us the real numbers you know how much CO2 are you preventing and is green hydrogen truly green yet? Yeah. So it all has to do with the you know if you look at it that the source of electricity just like the source you know if you think about our electrolyers just like the source of electricities for battery electric vehicles you know our electrolyers produces zero CO2. So then if you go back to the source know if you're running from wind like we will be doing in Texas you know even from a end to end point of view it'll be zero carbon emissions and what's really important is you build just like everybody wants charging stations built >> u and look uh some charging stations are powered by coal ultimately those charging stations are going to be powered by renewable energy and the infrastructures in place in many ways that's what we're doing with electrolyers you know pure you know a lot of times we run from very very clean sources like nuclear and solar and wind but in the end what's really critical is that these devices are there as the grid becomes more and more renewable uh our hydrogen becomes from end to end solution completely green >> yeah fantastic let's move on to recent growth. You've touched on a couple of the key growth drivers and also your customers as well. So, let's cover all of that now. >> Um, you recently posted 21% revenue growth to $174 million, I believe. So, in in a market where many clean tech companies are are struggling, perhaps you can tell me whether that's a fair characterization as well. What's working at Plug that others are missing? Well, I think the fact that uh we've always thought about value and the value has in many cases have to be more than just green. When you think about our work in material handling, uh so much of it is tied to the fact that they're able to be more productive. You know, the vehicles, you know, the forklift trucks run longer, they fuel faster. think uh all those kind of attributes uh you need less labor so you move 8% less good so >> the value proposition isn't just sustainability our customers do care about sustainability when you think about our electrolyer business I think uh especially your listeners in Europe and Australia and around the world maybe a little bit more than the United States recognize the commitments to lower CO2 is real. >> And I and when customers come to our plants in Georgia, you know, the value is we can actually make the products. Uh, you know, we we talked about earlier the great factories we have, but we actually have products that work and uh and long experience working with customers. It's a lot different. You know, I'm a I worked at Bell Labs. You're probably too young to remember what Bell Labs was, but it was the premier research lab in the world >> in the United States. And uh we're a lot of theoretical type of folks and theor theory is great. Making things that work and run every day, that's what plug does and that really differentiates us. >> Yeah. Fantastic. Well, let's get on to some of the applications of the technology that you've described so far already. Amazon are already customers. I think you've you've mentioned that and beyond the forklifts that we've discussed as well. What new applications of your technology will drive adoption at scale do you think? Well, I think the important item I'm going, you know, I think uh interesting and you may not think about this. Uh there's two which are almost indirect and I can talk about other products like our stationary but I'm going to talk about the fact that uh when you look at what we've done already, we've taken off the equivalent of 400 megawatts of electricity off the grid. uh uh and we either did that uh through timeshifting in many cases by cleaning up dirty hydrogen sources and you and and cleaning it up. We've actually prevented electricity. You know, in 400 megawws is really equivalent to a medium-siz power plant. And when you start thinking about the drive for data centers, think about the fact that by moving the fuel cells uh hydrogen uh more electricity is available for other usage and I don't think people think about that a great deal. Uh the second area that uh I give a lot of thought to is that um our electrolyers products make renewables possible. You know one of the biggest challenge with um renewables is you know you take a place like Germany in May over 15% of the electricity was negative. If you could be generating hydrogen when electricity prices are low uh you're actually making the electrolyers load on the grid which makes the value proposition for solar and wind stronger and really help to create growth in those industries. I could go on and talk about the interesting stationary products we're doing. We uh you know there's a forest fire out in California at the moment for change and uh we actually with a partner have over eight megawws which is powering a city uh when there's a fire using plug powered fuel cells and plug powers hydrogen. So I mean and those kind of products also become very important for the grid long term because when the wind's not shining this the wind's not blowing wind doesn't shine this the sun shines you know you have a you can be running u your grid through fuel cells and hydrogen and that hydrogen was produced when uh there was way too much wind and way too much solar. So it's really makes the possibility of a complete renewable network realizable and it's going to happen. You know, I can't tell you it's going to happen tomorrow, >> but the steps are in place for it to happen for the future. >> Yeah, really exciting times. You you mentioned your electrolyer product a couple of times, so I just want to circle back on that because obviously it's very important. Um I think sales for that nearly tripled to $45 million. Um so huge growth there as well uh on the monetary side. So give us a sense of you know who's who's buying the product what's driving the urgency in that particular product line. >> So I if you look around I I think there are two drivers and a lot of it is um nations goals to meet sustainability. you know within the EU uh you have u companies which have you know countries and have goals to reduce their CO2 footprint because they understand that uh you know there's externalities which aren't just captured in price that uh unless you do something to uh facilitate uh technologies which are clean it's not really um viable long term for the And now I think what has changed over the past couple years and this is really important that uh folks recognize call 25% of world's CO2 comes from industrial processes >> and think which are molecules in many cases. So um if you look at the markets where hydrogen's taking off today and electrolyers it's really in those kind of applications it is things like green ammonia I think everybody knows the war in Ukraine really created crunch for ammonia um it's applications like believe it or not oil refinery probably the biggest user great hydrogen today and we have some great projects going on with galp and pork jigle in Spain with Iberdola and BP that uh is changing out the process. Uh I know today we're doing a tour with a uh a large South America oil producer is looking to move to green hydrogen. Uh so those kind of applications and uh and one that uh I see over and over again is people looking to use electrolyers to produce SAF and there in Europe where you're you're in the UK is one of the leaders that really try to drive this. UK has a real aggressive program to build out hydrogen infrastructure. Spain has a real aggressive program. I had a wonderful time being up in Northern Ireland on the 4th of July. Uh and uh you know they already have 6 gawatts of wind power and they have a dream of building it out to 36 gawatts of wind power on the island and using that wind to create things to create SAF to create green ammonia to be able to ship it around the world out of the port of Belfast. It's really uh you know how you use your natural resources and it provides great opportunities for uh countries and uh cities that you would never think be part of the energy generation business. And let me tell you, the wind blows in Northern Ireland. It was blowing 30 miles per hour when I was up there at 60° on the 4th of July. Uh not my uh warmest Fourth of July ever, but uh but it it was u you know when you see that you can see how it all possible and you have government and people and universities and great companies just not plugged really thinking about how to build that future. >> Yeah, fantastic. I'm really interesting to hear about that momentum closer to home for for us here at the UK. Um >> I guess next I'm interested to hear about how that translates to the company's bottom line and your overall balance sheet. Um margins have improved I think versus last year. Um still negative I believe but walk us through your playbook to reach break even and then beyond that. >> Yeah it's actually the reach break even is actually pretty straightforward. >> Um there's really three elements. one, we have to sell them and uh you know, we have to do over $200 million in a quarter. I talked about these great facilities, they also carry fixed load with them. So, uh even if they're not cash burdens, they're burdens on the income statement. So, uh we know we have to reach about 200 million in revenue. Um we've taken the necessary steps uh in the in our hydrogen activity both with building our plants as well as working with some key supplier uh to make sure that our costs are lower. You know those that's actually a given. The third one is our service business and we've seen dramatic improvements and that is continuing and we believe those three elements allow us to reach gross margin break even by the end of this year and probably more important the steps we're taking really position the company to be ebidos positive by the end of 26. >> Great. Fantastic times ahead then. Um and uh back in 2023 um we read anyone interested in implied will have read about auditors issuing a going concern warning to to the business. So having talked about the positives, let's cover a quick negative. What what was the kind of bet the company move that pulled you back from the brink? You can tell me whether that's a fair characterization or not. Um and yeah, give us a sense of what what happened there and how you're moving forward. >> Well, u you know, it's funny. I was thinking about, you know, it really didn't when you were talking there, I really wasn't on the brink. I, you know, we knew exactly what we were going to do. Unfortunately, our timing for raising capital between the end of the third quarter and the beginning of the fourth quarter, uh, you know, the auditors had to follow the rules and they gave us a going concern. uh but you know by you know the next filing that was gone >> and if you really look at it when the auditors do analysis even today they look 15 months ahead and uh we have a clean opinion uh we have one blimp um but uh it was really never I knew that we had customers who wanted our products >> I knew we had a business plan that would allow us to execute and look we brought our hydrogen plants online. That helped us a great deal. So, I can't say that uh I was ever worried about that I was in a position that uh the company was ever at risk. >> Yeah. Fantastic. Well, there's a couple more recent news then. I read again that the DOE just conditionally approved a 1.66 billion loan guarantee. talk to us about how or what needs to happen for that conditional to become a done deal and and what actually derail it if anything. Yeah, I mean we've been um look uh now obviously the environment in the United States changed with the change of administration u and but the administration is very supportive of hydrogen >> and if you take a look at the recent bill passed in the United States from a hydro from a fuel cell point of view it was much more beneficial than the IRA uh our fuel cells have a tax credit of over 30% through 2032. Um that really wasn't available under the IRA which actually helps the growth of our fuel cell business here in the United States. Uh I think u what we're trying to work through with the DOE with is the final steps and know we're looking to bring an equity provider in into the project itself. Mhm. Um DOE, you know, I I have to tell you, I've met with the new head of the DOE loan program. Top topnotch. You know, the Trump DOE is actually quite knowled, you know, it's a a business environment and it's transactional. >> And uh we're working to make sure the transactions good for the United States and good for plug. >> Yeah. Fantastic. Um, and I suppose to move on, having covered some risks or challenges to the business, >> I'm also interested to hear about the competitive landscape. You know, you're competing with um Tesla, Rivian, for example, and other clean tech giants for talent. I'm talking about specifically here. H how do you how do you go about winning that a fight and attracting the best-in-class talent to plug? It's, you know, I I would think um the culture plug is um really important to the company. >> Um you know, it's we fundamentally believe uh everybody adds value, you know, from our service people in the field, from the people in the factory. That's really important to plug the community of u how we work together. Uh not one you know you know Andy Marsh is not going to make plug successful. It's everybody working together. I think the u this is a very and our survey show it. It's a very comfortable place to work because you can be yourself. M >> uh you know you know I I my personal philosophy uh even though I've been here 17 years I think it goes back to the original history of the company. My personal philosophy is I don't care what I don't care where you came from what religion you are what sex you are what your orientations are. If you can help make the company better I want you on our team. And I think people who come work here recognize that uh that culture is very valuable. And look, there's great upsides plug financially. It's a great place for engineers to innovate. I mean, all those other items, but to me, it's the um it's that everyday culture and you know, I like being in this environment. I like coming to work every day, most days. uh and uh you know it's important to the leadership team at plug in and the board that employees like coming here every day. >> Yeah, absolutely. Really interesting to get that kind of on the ground insight into your culture and the working environment. So thanks for that. Um I mean we typically end these sessions by focusing on looking ahead I suppose and getting an idea of the vision for the business and the kind of landscape that you expect over the next 5 to 10 years. So um I've got one question on China. you know, China's going all in on hydrogen at the moment. Are you planning >> or are you playing offense or defense in relation to that and in relation to your international strategy? >> I think um I have a lot of respect for u everything Chinese have done. Um but I also um believe that u you know and I quite honestly know today our technology is ahead of China >> just like in any competitive environment we need to continue to innovate and keep on making sure our products are better u we need to service our customers and uh you know I have a great chairman he's always told me over the 17 years don't worry about the competition worry about serving customers and that's how I and that's how we at Plug think about. >> Yeah. Fantastic. Okay. Well, as I say, looking ahead five years from now, where do you see Plug Power's role in the global energy transition? Oh, look um I think it's the question is where's what's hydrogen's role >> and plug will be a leading player in hydrogen ro and I think that um you know we'll be building more and more hydrogen plants uh not only here in the United States around the world um some of those plants uh will be built own and operated uh some will be in partners partnership with customers. You know, for this industry to succeed, lowcost available hydrogen is really, really important and that's really a critical goal for Plug and has been for the last 17 years because nothing works unless hydrogen's competitive. And we talked about as the grid becomes more renewable, that's really an opportunity for hydrogen to become very very competitive. There's going to become a point and it's not too far out where hydrogen is on par with natural gas from energy content because we will be able to be generating that hydrogen. Late at night when everybody's asleep, hydrogen will be being produced. And when the cost of hydrogen is equal to the cost of natural gas, there will be no reason for people to buy natural gas turbines. U they'll be natural gas generators. Everybody will be moving to hydrogen. So applications today where u you know people say we can't do it because of cost. We're going to be on the same track as solar where there's going to be a day call five years from now where people are going to look at the cost of moving the fuel cells and hydrogen versus the cost of new using natural gas. They're or oil and they're going to sit back and say, you know, 50% of the time I want hydrogen. And when that day comes, we're building for it. We're ready. We have the facilities in place. We have the people in place. we have the capabilities in place. Plugs gonna be a big big winner in that journey. >> Yeah. Fantastic. Really exciting picture you're painting there. Um I guess just to build on that with the final sort of closing question then >> I thought that was the final question. You're you're throwing me off. I gave a passionate last answer now. >> Well, it it was too good an answer that you beat so much that I need to ask a follow-up now. >> Okay. The um the uh optto sessions tagline is invest in the next big idea. So we're interested to hear from public company leaders about the next big idea within their particular industry or their sector that's perhaps under represented unspoken about that you think deserves more visibility. So, is there an innovation in your space, a particular product line, uh something even more niche or nuanced than that that you think needs to be spoken about more and that represents the next big idea in the hydrogen space? >> And I think um it may not sound like a big idea, but it's really important. Do you know what my biggest challenge is? My biggest challenge is construction cost. Right? If you take a look at building a hydrogen plant, probably 60 65% of it is construction cost. >> So one of u when we think about products like our stationary to power the grid or our electrolyer projects, it's how to and this is no different than how people may be thinking about how you build homes in the future. We have to design our products so that they can just be dropped in place that uh there's very very little construction next to interconnects happening. >> I talked about that vision of how we're competitive with natural gas. If 60% of my cost is construction, if I that's the part that I need to reduce and that's really where our next generation products will actually be designed so that they're more drop, you know, more Lego style, drop and play. >> And uh customers have to do very little. It accelerates the time to market. It makes cost dramatically lower. uh and it uh really uh makes it possible that hydrogen's competing with other energy sources immediately. That's the key. And it's not as sexy as is telling you we're going to develop the next MEA without precious metals. It does those sort of those sort of activities don't compare to what it cost to construct >> and as I said uh you know plug lives in the real world every day. And you know I come from a very scientific background but in the real world u that's the difference and that's going to accelerate it. It's just as simple as you know how you know making fueling stations available for electric vehicles made that industry take off made it easy. You know the construction's the simple item that's uh will dramatically uh drive this industry and drive plug to success. Yeah, fascinating. Um, glad I asked it. That was, as promised, indeed my final question. >> I really enjoyed the discussion today. >> Thank you very much, Andy. So did I. Um, and just thanks again for joining us on OPTO sessions. It's been a real pleasure. >> Real pleasure. Thank you very much. Take it easy now.
Plug Power CEO: Is PLUG Stock Ready for a Hydrogen-Fueled Comeback?
Summary
Transcript
Welcome to Opto Sessions, Andy. So, how are things? >> Well, uh almost Labor Day here and the summer's almost over and you know, for me and Plug, it's been a good summer. So, uh you know, just uh keep on pushing and working and moving ahead. >> Absolutely. Yeah. Look forward to hearing about some of that momentum in due course. Where are you talking to us from? >> I am in Slingerland, New York. And I suspect your office is saying, "Where the heck is Selenerland, New York?" Well, it's about five minutes from Albany, New York, the capital of the great state of New York, and about uh two and a half hours north of New York City. >> Lovely. Uh we've just opened well in the process of opening an office over in New York. Um so yeah, interested to to visit ASAP. >> I'd be happy to see you in your office there and do another interview. >> Yeah, that that would be great. Let's do a live one. Hopefully in the next couple of months we can get over there and do a live session. That would be great. >> Um I've uh I've got a couple of questions I here I suppose just to set the context and introduce Plug Power to any of our listeners that are unfamiliar with the company. So first of all, for anyone who hasn't been following the hydrogen revolution closely, perhaps you can just paint us a picture. What exactly is Plug Power building and why should people care? Well, first we're actually the ones who have built more than anyone else in the world. Uh we're not, you know, we we didn't enter hydrogen yesterday. We've been doing it for 25 years. And if you just span around, go around the world. Uh I'm sitting in our office here outside Albany, New York, which is a 350,000 square foot facility where we're in integrate fuel cells and electrolyers. >> Wow. >> About a hour and two hours west of us is our facility in Rochester, which is the largest stack manufacturer in the world. Uh you go around, you know, we have about 300 people in Europe. uh many of them developing electrolyer projects for uh the hydrogen activity going on all around the world. We have people in Pune, India. Uh we operate the largest uh electrolyer liquid hydrogen plant in the world producing 15 tons per day uh out in Georgia. So uh and we have two other hydrogen plants. So, uh, if you want to actually see the hydrogen at work today, it's a plug. >> Yeah. Fantastic. Well, let's dig into that then. Yeah, because you mentioned 15 tons there. I read that it was 40 tons daily across Georgia, Tennessee, and Louisiana. >> Yeah. >> Help help us kind of visualize that, you know, how many Amazon delivery trucks or homes is that fueling? >> Yeah. So best way to think about it is u about five years ago the largest user of liquid hydrogen in the world was actually NASA >> and plug is bigger than NASA today >> and so that just gives you a scale. So first we're the largest user in the world. Um when I think about uh 40 tons of hydrogen uh that's 40,000 kg and about a kilogram of hydrogen's about equal to two gallons of gasoline. So that's how much hydrogen it's we produce and that hydrogen's being used 247. And you know, about every two to three seconds in the United States, uh, there's probably a product mostly fuel cells for forklift trucks at places like Walmart and Amazon are being filled up with hydrogen produced by plug. And uh, here in the States, which is just a portion of our business, about 30% of retail food actually moves through products that are produced by plug power. >> Yeah. Fantastic. that helps to make it all less abstract for me and the listeners as well. Um I want to come back to your customer base but before we do um obviously a big part of hydrogen use is the benefit it provides in terms of CO2 prevention. So >> give us the real numbers you know how much CO2 are you preventing and is green hydrogen truly green yet? Yeah. So it all has to do with the you know if you look at it that the source of electricity just like the source you know if you think about our electrolyers just like the source of electricities for battery electric vehicles you know our electrolyers produces zero CO2. So then if you go back to the source know if you're running from wind like we will be doing in Texas you know even from a end to end point of view it'll be zero carbon emissions and what's really important is you build just like everybody wants charging stations built >> u and look uh some charging stations are powered by coal ultimately those charging stations are going to be powered by renewable energy and the infrastructures in place in many ways that's what we're doing with electrolyers you know pure you know a lot of times we run from very very clean sources like nuclear and solar and wind but in the end what's really critical is that these devices are there as the grid becomes more and more renewable uh our hydrogen becomes from end to end solution completely green >> yeah fantastic let's move on to recent growth. You've touched on a couple of the key growth drivers and also your customers as well. So, let's cover all of that now. >> Um, you recently posted 21% revenue growth to $174 million, I believe. So, in in a market where many clean tech companies are are struggling, perhaps you can tell me whether that's a fair characterization as well. What's working at Plug that others are missing? Well, I think the fact that uh we've always thought about value and the value has in many cases have to be more than just green. When you think about our work in material handling, uh so much of it is tied to the fact that they're able to be more productive. You know, the vehicles, you know, the forklift trucks run longer, they fuel faster. think uh all those kind of attributes uh you need less labor so you move 8% less good so >> the value proposition isn't just sustainability our customers do care about sustainability when you think about our electrolyer business I think uh especially your listeners in Europe and Australia and around the world maybe a little bit more than the United States recognize the commitments to lower CO2 is real. >> And I and when customers come to our plants in Georgia, you know, the value is we can actually make the products. Uh, you know, we we talked about earlier the great factories we have, but we actually have products that work and uh and long experience working with customers. It's a lot different. You know, I'm a I worked at Bell Labs. You're probably too young to remember what Bell Labs was, but it was the premier research lab in the world >> in the United States. And uh we're a lot of theoretical type of folks and theor theory is great. Making things that work and run every day, that's what plug does and that really differentiates us. >> Yeah. Fantastic. Well, let's get on to some of the applications of the technology that you've described so far already. Amazon are already customers. I think you've you've mentioned that and beyond the forklifts that we've discussed as well. What new applications of your technology will drive adoption at scale do you think? Well, I think the important item I'm going, you know, I think uh interesting and you may not think about this. Uh there's two which are almost indirect and I can talk about other products like our stationary but I'm going to talk about the fact that uh when you look at what we've done already, we've taken off the equivalent of 400 megawatts of electricity off the grid. uh uh and we either did that uh through timeshifting in many cases by cleaning up dirty hydrogen sources and you and and cleaning it up. We've actually prevented electricity. You know, in 400 megawws is really equivalent to a medium-siz power plant. And when you start thinking about the drive for data centers, think about the fact that by moving the fuel cells uh hydrogen uh more electricity is available for other usage and I don't think people think about that a great deal. Uh the second area that uh I give a lot of thought to is that um our electrolyers products make renewables possible. You know one of the biggest challenge with um renewables is you know you take a place like Germany in May over 15% of the electricity was negative. If you could be generating hydrogen when electricity prices are low uh you're actually making the electrolyers load on the grid which makes the value proposition for solar and wind stronger and really help to create growth in those industries. I could go on and talk about the interesting stationary products we're doing. We uh you know there's a forest fire out in California at the moment for change and uh we actually with a partner have over eight megawws which is powering a city uh when there's a fire using plug powered fuel cells and plug powers hydrogen. So I mean and those kind of products also become very important for the grid long term because when the wind's not shining this the wind's not blowing wind doesn't shine this the sun shines you know you have a you can be running u your grid through fuel cells and hydrogen and that hydrogen was produced when uh there was way too much wind and way too much solar. So it's really makes the possibility of a complete renewable network realizable and it's going to happen. You know, I can't tell you it's going to happen tomorrow, >> but the steps are in place for it to happen for the future. >> Yeah, really exciting times. You you mentioned your electrolyer product a couple of times, so I just want to circle back on that because obviously it's very important. Um I think sales for that nearly tripled to $45 million. Um so huge growth there as well uh on the monetary side. So give us a sense of you know who's who's buying the product what's driving the urgency in that particular product line. >> So I if you look around I I think there are two drivers and a lot of it is um nations goals to meet sustainability. you know within the EU uh you have u companies which have you know countries and have goals to reduce their CO2 footprint because they understand that uh you know there's externalities which aren't just captured in price that uh unless you do something to uh facilitate uh technologies which are clean it's not really um viable long term for the And now I think what has changed over the past couple years and this is really important that uh folks recognize call 25% of world's CO2 comes from industrial processes >> and think which are molecules in many cases. So um if you look at the markets where hydrogen's taking off today and electrolyers it's really in those kind of applications it is things like green ammonia I think everybody knows the war in Ukraine really created crunch for ammonia um it's applications like believe it or not oil refinery probably the biggest user great hydrogen today and we have some great projects going on with galp and pork jigle in Spain with Iberdola and BP that uh is changing out the process. Uh I know today we're doing a tour with a uh a large South America oil producer is looking to move to green hydrogen. Uh so those kind of applications and uh and one that uh I see over and over again is people looking to use electrolyers to produce SAF and there in Europe where you're you're in the UK is one of the leaders that really try to drive this. UK has a real aggressive program to build out hydrogen infrastructure. Spain has a real aggressive program. I had a wonderful time being up in Northern Ireland on the 4th of July. Uh and uh you know they already have 6 gawatts of wind power and they have a dream of building it out to 36 gawatts of wind power on the island and using that wind to create things to create SAF to create green ammonia to be able to ship it around the world out of the port of Belfast. It's really uh you know how you use your natural resources and it provides great opportunities for uh countries and uh cities that you would never think be part of the energy generation business. And let me tell you, the wind blows in Northern Ireland. It was blowing 30 miles per hour when I was up there at 60° on the 4th of July. Uh not my uh warmest Fourth of July ever, but uh but it it was u you know when you see that you can see how it all possible and you have government and people and universities and great companies just not plugged really thinking about how to build that future. >> Yeah, fantastic. I'm really interesting to hear about that momentum closer to home for for us here at the UK. Um >> I guess next I'm interested to hear about how that translates to the company's bottom line and your overall balance sheet. Um margins have improved I think versus last year. Um still negative I believe but walk us through your playbook to reach break even and then beyond that. >> Yeah it's actually the reach break even is actually pretty straightforward. >> Um there's really three elements. one, we have to sell them and uh you know, we have to do over $200 million in a quarter. I talked about these great facilities, they also carry fixed load with them. So, uh even if they're not cash burdens, they're burdens on the income statement. So, uh we know we have to reach about 200 million in revenue. Um we've taken the necessary steps uh in the in our hydrogen activity both with building our plants as well as working with some key supplier uh to make sure that our costs are lower. You know those that's actually a given. The third one is our service business and we've seen dramatic improvements and that is continuing and we believe those three elements allow us to reach gross margin break even by the end of this year and probably more important the steps we're taking really position the company to be ebidos positive by the end of 26. >> Great. Fantastic times ahead then. Um and uh back in 2023 um we read anyone interested in implied will have read about auditors issuing a going concern warning to to the business. So having talked about the positives, let's cover a quick negative. What what was the kind of bet the company move that pulled you back from the brink? You can tell me whether that's a fair characterization or not. Um and yeah, give us a sense of what what happened there and how you're moving forward. >> Well, u you know, it's funny. I was thinking about, you know, it really didn't when you were talking there, I really wasn't on the brink. I, you know, we knew exactly what we were going to do. Unfortunately, our timing for raising capital between the end of the third quarter and the beginning of the fourth quarter, uh, you know, the auditors had to follow the rules and they gave us a going concern. uh but you know by you know the next filing that was gone >> and if you really look at it when the auditors do analysis even today they look 15 months ahead and uh we have a clean opinion uh we have one blimp um but uh it was really never I knew that we had customers who wanted our products >> I knew we had a business plan that would allow us to execute and look we brought our hydrogen plants online. That helped us a great deal. So, I can't say that uh I was ever worried about that I was in a position that uh the company was ever at risk. >> Yeah. Fantastic. Well, there's a couple more recent news then. I read again that the DOE just conditionally approved a 1.66 billion loan guarantee. talk to us about how or what needs to happen for that conditional to become a done deal and and what actually derail it if anything. Yeah, I mean we've been um look uh now obviously the environment in the United States changed with the change of administration u and but the administration is very supportive of hydrogen >> and if you take a look at the recent bill passed in the United States from a hydro from a fuel cell point of view it was much more beneficial than the IRA uh our fuel cells have a tax credit of over 30% through 2032. Um that really wasn't available under the IRA which actually helps the growth of our fuel cell business here in the United States. Uh I think u what we're trying to work through with the DOE with is the final steps and know we're looking to bring an equity provider in into the project itself. Mhm. Um DOE, you know, I I have to tell you, I've met with the new head of the DOE loan program. Top topnotch. You know, the Trump DOE is actually quite knowled, you know, it's a a business environment and it's transactional. >> And uh we're working to make sure the transactions good for the United States and good for plug. >> Yeah. Fantastic. Um, and I suppose to move on, having covered some risks or challenges to the business, >> I'm also interested to hear about the competitive landscape. You know, you're competing with um Tesla, Rivian, for example, and other clean tech giants for talent. I'm talking about specifically here. H how do you how do you go about winning that a fight and attracting the best-in-class talent to plug? It's, you know, I I would think um the culture plug is um really important to the company. >> Um you know, it's we fundamentally believe uh everybody adds value, you know, from our service people in the field, from the people in the factory. That's really important to plug the community of u how we work together. Uh not one you know you know Andy Marsh is not going to make plug successful. It's everybody working together. I think the u this is a very and our survey show it. It's a very comfortable place to work because you can be yourself. M >> uh you know you know I I my personal philosophy uh even though I've been here 17 years I think it goes back to the original history of the company. My personal philosophy is I don't care what I don't care where you came from what religion you are what sex you are what your orientations are. If you can help make the company better I want you on our team. And I think people who come work here recognize that uh that culture is very valuable. And look, there's great upsides plug financially. It's a great place for engineers to innovate. I mean, all those other items, but to me, it's the um it's that everyday culture and you know, I like being in this environment. I like coming to work every day, most days. uh and uh you know it's important to the leadership team at plug in and the board that employees like coming here every day. >> Yeah, absolutely. Really interesting to get that kind of on the ground insight into your culture and the working environment. So thanks for that. Um I mean we typically end these sessions by focusing on looking ahead I suppose and getting an idea of the vision for the business and the kind of landscape that you expect over the next 5 to 10 years. So um I've got one question on China. you know, China's going all in on hydrogen at the moment. Are you planning >> or are you playing offense or defense in relation to that and in relation to your international strategy? >> I think um I have a lot of respect for u everything Chinese have done. Um but I also um believe that u you know and I quite honestly know today our technology is ahead of China >> just like in any competitive environment we need to continue to innovate and keep on making sure our products are better u we need to service our customers and uh you know I have a great chairman he's always told me over the 17 years don't worry about the competition worry about serving customers and that's how I and that's how we at Plug think about. >> Yeah. Fantastic. Okay. Well, as I say, looking ahead five years from now, where do you see Plug Power's role in the global energy transition? Oh, look um I think it's the question is where's what's hydrogen's role >> and plug will be a leading player in hydrogen ro and I think that um you know we'll be building more and more hydrogen plants uh not only here in the United States around the world um some of those plants uh will be built own and operated uh some will be in partners partnership with customers. You know, for this industry to succeed, lowcost available hydrogen is really, really important and that's really a critical goal for Plug and has been for the last 17 years because nothing works unless hydrogen's competitive. And we talked about as the grid becomes more renewable, that's really an opportunity for hydrogen to become very very competitive. There's going to become a point and it's not too far out where hydrogen is on par with natural gas from energy content because we will be able to be generating that hydrogen. Late at night when everybody's asleep, hydrogen will be being produced. And when the cost of hydrogen is equal to the cost of natural gas, there will be no reason for people to buy natural gas turbines. U they'll be natural gas generators. Everybody will be moving to hydrogen. So applications today where u you know people say we can't do it because of cost. We're going to be on the same track as solar where there's going to be a day call five years from now where people are going to look at the cost of moving the fuel cells and hydrogen versus the cost of new using natural gas. They're or oil and they're going to sit back and say, you know, 50% of the time I want hydrogen. And when that day comes, we're building for it. We're ready. We have the facilities in place. We have the people in place. we have the capabilities in place. Plugs gonna be a big big winner in that journey. >> Yeah. Fantastic. Really exciting picture you're painting there. Um I guess just to build on that with the final sort of closing question then >> I thought that was the final question. You're you're throwing me off. I gave a passionate last answer now. >> Well, it it was too good an answer that you beat so much that I need to ask a follow-up now. >> Okay. The um the uh optto sessions tagline is invest in the next big idea. So we're interested to hear from public company leaders about the next big idea within their particular industry or their sector that's perhaps under represented unspoken about that you think deserves more visibility. So, is there an innovation in your space, a particular product line, uh something even more niche or nuanced than that that you think needs to be spoken about more and that represents the next big idea in the hydrogen space? >> And I think um it may not sound like a big idea, but it's really important. Do you know what my biggest challenge is? My biggest challenge is construction cost. Right? If you take a look at building a hydrogen plant, probably 60 65% of it is construction cost. >> So one of u when we think about products like our stationary to power the grid or our electrolyer projects, it's how to and this is no different than how people may be thinking about how you build homes in the future. We have to design our products so that they can just be dropped in place that uh there's very very little construction next to interconnects happening. >> I talked about that vision of how we're competitive with natural gas. If 60% of my cost is construction, if I that's the part that I need to reduce and that's really where our next generation products will actually be designed so that they're more drop, you know, more Lego style, drop and play. >> And uh customers have to do very little. It accelerates the time to market. It makes cost dramatically lower. uh and it uh really uh makes it possible that hydrogen's competing with other energy sources immediately. That's the key. And it's not as sexy as is telling you we're going to develop the next MEA without precious metals. It does those sort of those sort of activities don't compare to what it cost to construct >> and as I said uh you know plug lives in the real world every day. And you know I come from a very scientific background but in the real world u that's the difference and that's going to accelerate it. It's just as simple as you know how you know making fueling stations available for electric vehicles made that industry take off made it easy. You know the construction's the simple item that's uh will dramatically uh drive this industry and drive plug to success. Yeah, fascinating. Um, glad I asked it. That was, as promised, indeed my final question. >> I really enjoyed the discussion today. >> Thank you very much, Andy. So did I. Um, and just thanks again for joining us on OPTO sessions. It's been a real pleasure. >> Real pleasure. Thank you very much. Take it easy now.