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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Shares of the green

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Speaker 1: hydrogen company plug Power closed two and a half percent

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Speaker 1: lower last Tuesday, that was the first day of trading

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Speaker 1: after the company reported net revenue for the second quarter

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Speaker 1: that came in above estimates, but the bottom line was

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Speaker 1: the issue. EPs missed the average analyst estimate. Plug provides

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Speaker 1: hydrogen products including electrolizers, hydrogen transport, storage and dispensing solutions,

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Speaker 1: and more to a variety of customers including Walmart, Amazon,

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Speaker 1: Home Depot, Airbus, at and T, Kroger, FedEx Pgeni, Coca Cola,

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Speaker 1: and more. We've got back with us Andy marsh, the

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Speaker 1: CEO of plug Power. He joins us from just outside

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Speaker 1: of Albany. Andy, always good to have you on the program.

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Speaker 1: I want to start with your customers. I mentioned just

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Speaker 1: about ten of them. The list goes on, what are

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Speaker 1: you hearing from them in a world where green energy

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Speaker 1: is no longer sort of the buzz phrase buzzword, there's

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Speaker 1: not the same government incentives for this stuff that there

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Speaker 1: was in the last administration. What are you hearing from

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Speaker 1: them right now?

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Speaker 2: So the last part of that, Tim's that true. The

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Speaker 2: incentives for forty eighty, which is the tax credit for

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Speaker 2: fuel cells, and the last bill is actually much better

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Speaker 2: than it was.

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Speaker 1: Well, I was talking about green energy as sort of

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Speaker 1: a monoliths, just to be clear.

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Speaker 2: Yeah, So when I look at first globally, the incentives

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Speaker 2: for hydrogen and fuel cells and green energy remains robust.

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Speaker 2: And if you look at our business in the second quarter,

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Speaker 2: our revue in Europe for electoralizers and all of it's

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Speaker 2: really primarily Europe, actually tripled to forty five million dollars

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Speaker 2: from what it was a year ago. And here in

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Speaker 2: the United States, you know, when we look at the

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Speaker 2: tax lands, the credit landscape, we actually see it better

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Speaker 2: today than it was a year ago. So why was happy? Well,

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Speaker 2: I think because when you looked at the tax credit

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Speaker 2: for fuel cells, it was not well structured or positioned

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Speaker 2: in forty eight eight. And we see an extension of

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Speaker 2: what was essentially the ITC, which was extended the last

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Speaker 2: time under President Trump in twenty eighteen, in the latest bill,

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Speaker 2: which extends a credit for fuel cells which is used

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Speaker 2: by Amazon, Walmart and many of the customers you mentioned

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Speaker 2: through twenty thirty two. So we're actually pretty thrilled with

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Speaker 2: what happened for hydrogen, especially in the last bill.

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Speaker 3: When you look at plug Power's earnings, the margins are

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Speaker 3: still negative, but they have improved from the last year.

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Speaker 3: What are your thoughts on just how much more runway

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Speaker 3: you guys need before plug power is consistently profitable.

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Speaker 2: So you know we I think you hit on the point.

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Speaker 2: We moved gross margins from a year ago by over

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Speaker 2: sixty percent and we are targeting it to be gross

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Speaker 2: margin zero by the fourth quarter. And there's a clear

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Speaker 2: map with our hydrogen plants and the improvements we've seen

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Speaker 2: in service and more importantly, selling more and that really

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Speaker 2: helps us a great deal. And we're targeting being EBODOS

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Speaker 2: positive by the end of next year. And I think

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Speaker 2: with our project Quantum Leap, where we really focus on

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Speaker 2: cost and selling, that we are on the right track.

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Speaker 2: And I think you're beginning to see it in the financials.

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Speaker 2: Even the miss when EPs was right downs, which were

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Speaker 2: non cash right downs associated with our plants. That really

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Speaker 2: align the business for the future to be successful.

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Speaker 1: What's the US market right now for green hydrogen that's

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Speaker 1: hydrogen made from water using clean electricity to power the

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Speaker 1: electrolysis process.

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Speaker 2: So straight it is a bit slower than what you

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Speaker 2: see in Europe and other places. You know, our primarily

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Speaker 2: focus for electroalizers are really Europe Australia where the climate's right.

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Speaker 2: But we actually operate the largest green hydrogen liquid hydrogen

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Speaker 2: plant in the world at the moment in Georgia. And

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Speaker 2: when I looked I reviewed this morning our demand for

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Speaker 2: hydrogen from the second quarter of the fourth quarter, we

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Speaker 2: actually see that our daily usage go up from fifty

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Speaker 2: five tons per day to about sixty seven tons per

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Speaker 2: day by the end of the year. So we're using

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Speaker 2: our plants, we're creating green hydrogen, we're involved in some

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Speaker 2: blue hydrogen projects, so we feel comfortable about the long

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Speaker 2: term trajectory and even your term trajectory for hydrogen in

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Speaker 2: the United States.

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Speaker 3: Talk a little bit more about that demand and where

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Speaker 3: it's coming from. Are you seeing customers, you know, pivoting

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Speaker 3: from other sources of energy or are you seeing you know,

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Speaker 3: just increasing need for more sources of energy and that's

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Speaker 3: what's really driving your growth here.

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Speaker 2: That's actually a real good question because when we look

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Speaker 2: at the world the United States, with what we've deployed

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Speaker 2: already about it's you know, two hundred and seventy five

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Speaker 2: sites in our material handling business across the US. We've

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Speaker 2: actually taken off the grid approximately five hundred megawatts of electricity,

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Speaker 2: and as I think everybody knows, it has become more

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Speaker 2: and more challenging to bring electricity to you know, there's

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Speaker 2: over a three and a half year backlup log to

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Speaker 2: get electricity to facilities no typical distribution center. We take

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Speaker 2: off two to three megawatt off the grid, which can

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Speaker 2: then be used to things increasing freezer capabilities. So if

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Speaker 2: you think about if you're a fuel food retailer and

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Speaker 2: you want to sell more frozen goods, which is a

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Speaker 2: growth area, one way you can one way you can

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Speaker 2: increase the size of your freezer and not have to

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Speaker 2: worry about the power needs is actually use fuel sales

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Speaker 2: and hydrogen from plug Power.

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Speaker 1: We're speaking with Andy marsh, the CEO of Plug Power,

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Speaker 1: joining us from just outside of Albany. Andy, I want

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Speaker 1: to go back to regulatory issues, tax credits and that

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Speaker 1: sort of thing, because you did say that demand is better.

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Speaker 1: We were in a better position than you were a

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Speaker 1: year ago. Our own will wide and team reporting that

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Speaker 1: a year ago credits were expected to help lead about

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Speaker 1: one point two million metric tons of annual green hydrogen

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Speaker 1: production by twenty thirty that's according to bn F or

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Speaker 1: in house Bloomberg New Energy Finance. Now, projects with just

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Speaker 1: one hundred and fifty thousand tons of production capacity are

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Speaker 1: expected to qualify for the incentives, dramatically reducing anticipated US output.

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Speaker 1: This is after the Trump administration's tax and spending legislation

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Speaker 1: significantly limited tax credits to produce the fuel. How is

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Speaker 1: that affecting you?

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Speaker 2: Well, when I take a when I look at I'm

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Speaker 2: already using the tax credits. We expect to have online

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Speaker 2: our additional Texas plant by twenty twenty eight before they fire,

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Speaker 2: which allows us to use those credits through twenty thirty two.

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Speaker 2: I think when we look at our own needs, you know,

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Speaker 2: we're looking at other expansion opportunities, you know, we think

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Speaker 2: that we'll be able to generate the hydrogen to meet

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Speaker 2: our customers' needs and be able to take tax credits

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Speaker 2: through twenty thirty two. So, you know, quite honestly, I'm

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Speaker 2: very comfortable with the present legislation.

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Speaker 3: Back in January, there was a Bloomberg News story about

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Speaker 3: the White House confirming a one point six billion loan

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Speaker 3: guarantee for plug power to build hydrogen plants. How have

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Speaker 3: you guys received that that loan yet and how crucial

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Speaker 3: is support like that to continue to grow plug power.

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Speaker 2: It's important, but it's not you know, we will still

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Speaker 2: move ahead with building plants. Ultimately, we're focused and I've

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Speaker 2: been down to the DOE recently, uh and we're working

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Speaker 2: on details to make sure we can pull down funding

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Speaker 2: for the plant in Texas, which is a plant that

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Speaker 2: gets very very low cost electric electric electric energy from

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Speaker 2: a next era wind farm. When we take a look

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Speaker 2: at that, we're working through the final details to start

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Speaker 2: being able to pull down funding from the DOE. I

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Speaker 2: know they've canceled many projects. We haven't been on the

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Speaker 2: cancel list, and we have a good relationship. I think

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Speaker 2: the Trump administration and their goals of being energy dominant.

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Speaker 2: You know, the world's going to one green saff the

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Speaker 2: world's going to one green pneumonia. The US is well

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Speaker 2: positioned to be the leader in providing those fuels in

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Speaker 2: green hydrogen is critical the becoming energy dominant for the

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Speaker 2: long term. Additionally, hydrogen generation is really important for national security.

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Speaker 2: I mean, next to SpaceX, all the vehicles use hydrogen,

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Speaker 2: so we really think about the long term benefits. And

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Speaker 2: then on top of that, when you think about hydrogen,

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Speaker 2: over thirty percent of detail food moved through a plug

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Speaker 2: power fuel cells. Boy, you don't want that disrupted overnight.

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Speaker 1: No you don't. Andy, We only have about a minute

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Speaker 1: and a half left, and I want to talk about

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Speaker 1: the stock price. It's down about ninety seven percent since

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Speaker 1: the twenty twenty one highs. Even though you're a relatively

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Speaker 1: small company, you're still among at least today the most

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Speaker 1: actively traded stocks, with fifty four point seven million dollars

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Speaker 1: or million shares rather trading today. It's massive. The volume

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Speaker 1: this year has been massive. You've got twenty eight percent

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Speaker 1: of your shares floated. What's your message to investors and

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Speaker 1: traders right now.

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Speaker 2: Well, I think I would tell them it's a great

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Speaker 2: opportunity to come in. You you can look at the financials,

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Speaker 2: revenue growing at twenty percent, gross margin improving dramatically. The

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Speaker 2: deployments in Europe, where the electoralizer industry is really happening today,

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Speaker 2: has tripled in the past year. You know, I think

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Speaker 2: this is the opportunity to successfully enter the stock and

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Speaker 2: it's one of the reasons. Our CFO has made significant

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Speaker 2: investments and I'm putting about twenty five percent of my

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Speaker 2: salary to work buying stock, actually fifty percent of my

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Speaker 2: salary to work buying stock every week.

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Speaker 1: Andy, thanks for coming on. Appreciate you taking the time

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Speaker 1: this afternoon. Always get to check in with you, and

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Speaker 1: it has been quite a few months since we last spoke,

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Speaker 1: so don't be a stranger. Come back soon. Andy Marsh,

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Speaker 1: CEO of Plug Power, joining us from just outside of Albany,