Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Shares of the green
Speaker 1: hydrogen company plug Power closed two and a half percent
Speaker 1: lower last Tuesday, that was the first day of trading
Speaker 1: after the company reported net revenue for the second quarter
Speaker 1: that came in above estimates, but the bottom line was
Speaker 1: the issue. EPs missed the average analyst estimate. Plug provides
Speaker 1: hydrogen products including electrolizers, hydrogen transport, storage and dispensing solutions,
Speaker 1: and more to a variety of customers including Walmart, Amazon,
Speaker 1: Home Depot, Airbus, at and T, Kroger, FedEx Pgeni, Coca Cola,
Speaker 1: and more. We've got back with us Andy marsh, the
Speaker 1: CEO of plug Power. He joins us from just outside
Speaker 1: of Albany. Andy, always good to have you on the program.
Speaker 1: I want to start with your customers. I mentioned just
Speaker 1: about ten of them. The list goes on, what are
Speaker 1: you hearing from them in a world where green energy
Speaker 1: is no longer sort of the buzz phrase buzzword, there's
Speaker 1: not the same government incentives for this stuff that there
Speaker 1: was in the last administration. What are you hearing from
Speaker 1: them right now?
Speaker 2: So the last part of that, Tim's that true. The
Speaker 2: incentives for forty eighty, which is the tax credit for
Speaker 2: fuel cells, and the last bill is actually much better
Speaker 2: than it was.
Speaker 1: Well, I was talking about green energy as sort of
Speaker 1: a monoliths, just to be clear.
Speaker 2: Yeah, So when I look at first globally, the incentives
Speaker 2: for hydrogen and fuel cells and green energy remains robust.
Speaker 2: And if you look at our business in the second quarter,
Speaker 2: our revue in Europe for electoralizers and all of it's
Speaker 2: really primarily Europe, actually tripled to forty five million dollars
Speaker 2: from what it was a year ago. And here in
Speaker 2: the United States, you know, when we look at the
Speaker 2: tax lands, the credit landscape, we actually see it better
Speaker 2: today than it was a year ago. So why was happy? Well,
Speaker 2: I think because when you looked at the tax credit
Speaker 2: for fuel cells, it was not well structured or positioned
Speaker 2: in forty eight eight. And we see an extension of
Speaker 2: what was essentially the ITC, which was extended the last
Speaker 2: time under President Trump in twenty eighteen, in the latest bill,
Speaker 2: which extends a credit for fuel cells which is used
Speaker 2: by Amazon, Walmart and many of the customers you mentioned
Speaker 2: through twenty thirty two. So we're actually pretty thrilled with
Speaker 2: what happened for hydrogen, especially in the last bill.
Speaker 3: When you look at plug Power's earnings, the margins are
Speaker 3: still negative, but they have improved from the last year.
Speaker 3: What are your thoughts on just how much more runway
Speaker 3: you guys need before plug power is consistently profitable.
Speaker 2: So you know we I think you hit on the point.
Speaker 2: We moved gross margins from a year ago by over
Speaker 2: sixty percent and we are targeting it to be gross
Speaker 2: margin zero by the fourth quarter. And there's a clear
Speaker 2: map with our hydrogen plants and the improvements we've seen
Speaker 2: in service and more importantly, selling more and that really
Speaker 2: helps us a great deal. And we're targeting being EBODOS
Speaker 2: positive by the end of next year. And I think
Speaker 2: with our project Quantum Leap, where we really focus on
Speaker 2: cost and selling, that we are on the right track.
Speaker 2: And I think you're beginning to see it in the financials.
Speaker 2: Even the miss when EPs was right downs, which were
Speaker 2: non cash right downs associated with our plants. That really
Speaker 2: align the business for the future to be successful.
Speaker 1: What's the US market right now for green hydrogen that's
Speaker 1: hydrogen made from water using clean electricity to power the
Speaker 1: electrolysis process.
Speaker 2: So straight it is a bit slower than what you
Speaker 2: see in Europe and other places. You know, our primarily
Speaker 2: focus for electroalizers are really Europe Australia where the climate's right.
Speaker 2: But we actually operate the largest green hydrogen liquid hydrogen
Speaker 2: plant in the world at the moment in Georgia. And
Speaker 2: when I looked I reviewed this morning our demand for
Speaker 2: hydrogen from the second quarter of the fourth quarter, we
Speaker 2: actually see that our daily usage go up from fifty
Speaker 2: five tons per day to about sixty seven tons per
Speaker 2: day by the end of the year. So we're using
Speaker 2: our plants, we're creating green hydrogen, we're involved in some
Speaker 2: blue hydrogen projects, so we feel comfortable about the long
Speaker 2: term trajectory and even your term trajectory for hydrogen in
Speaker 2: the United States.
Speaker 3: Talk a little bit more about that demand and where
Speaker 3: it's coming from. Are you seeing customers, you know, pivoting
Speaker 3: from other sources of energy or are you seeing you know,
Speaker 3: just increasing need for more sources of energy and that's
Speaker 3: what's really driving your growth here.
Speaker 2: That's actually a real good question because when we look
Speaker 2: at the world the United States, with what we've deployed
Speaker 2: already about it's you know, two hundred and seventy five
Speaker 2: sites in our material handling business across the US. We've
Speaker 2: actually taken off the grid approximately five hundred megawatts of electricity,
Speaker 2: and as I think everybody knows, it has become more
Speaker 2: and more challenging to bring electricity to you know, there's
Speaker 2: over a three and a half year backlup log to
Speaker 2: get electricity to facilities no typical distribution center. We take
Speaker 2: off two to three megawatt off the grid, which can
Speaker 2: then be used to things increasing freezer capabilities. So if
Speaker 2: you think about if you're a fuel food retailer and
Speaker 2: you want to sell more frozen goods, which is a
Speaker 2: growth area, one way you can one way you can
Speaker 2: increase the size of your freezer and not have to
Speaker 2: worry about the power needs is actually use fuel sales
Speaker 2: and hydrogen from plug Power.
Speaker 1: We're speaking with Andy marsh, the CEO of Plug Power,
Speaker 1: joining us from just outside of Albany. Andy, I want
Speaker 1: to go back to regulatory issues, tax credits and that
Speaker 1: sort of thing, because you did say that demand is better.
Speaker 1: We were in a better position than you were a
Speaker 1: year ago. Our own will wide and team reporting that
Speaker 1: a year ago credits were expected to help lead about
Speaker 1: one point two million metric tons of annual green hydrogen
Speaker 1: production by twenty thirty that's according to bn F or
Speaker 1: in house Bloomberg New Energy Finance. Now, projects with just
Speaker 1: one hundred and fifty thousand tons of production capacity are
Speaker 1: expected to qualify for the incentives, dramatically reducing anticipated US output.
Speaker 1: This is after the Trump administration's tax and spending legislation
Speaker 1: significantly limited tax credits to produce the fuel. How is
Speaker 1: that affecting you?
Speaker 2: Well, when I take a when I look at I'm
Speaker 2: already using the tax credits. We expect to have online
Speaker 2: our additional Texas plant by twenty twenty eight before they fire,
Speaker 2: which allows us to use those credits through twenty thirty two.
Speaker 2: I think when we look at our own needs, you know,
Speaker 2: we're looking at other expansion opportunities, you know, we think
Speaker 2: that we'll be able to generate the hydrogen to meet
Speaker 2: our customers' needs and be able to take tax credits
Speaker 2: through twenty thirty two. So, you know, quite honestly, I'm
Speaker 2: very comfortable with the present legislation.
Speaker 3: Back in January, there was a Bloomberg News story about
Speaker 3: the White House confirming a one point six billion loan
Speaker 3: guarantee for plug power to build hydrogen plants. How have
Speaker 3: you guys received that that loan yet and how crucial
Speaker 3: is support like that to continue to grow plug power.
Speaker 2: It's important, but it's not you know, we will still
Speaker 2: move ahead with building plants. Ultimately, we're focused and I've
Speaker 2: been down to the DOE recently, uh and we're working
Speaker 2: on details to make sure we can pull down funding
Speaker 2: for the plant in Texas, which is a plant that
Speaker 2: gets very very low cost electric electric electric energy from
Speaker 2: a next era wind farm. When we take a look
Speaker 2: at that, we're working through the final details to start
Speaker 2: being able to pull down funding from the DOE. I
Speaker 2: know they've canceled many projects. We haven't been on the
Speaker 2: cancel list, and we have a good relationship. I think
Speaker 2: the Trump administration and their goals of being energy dominant.
Speaker 2: You know, the world's going to one green saff the
Speaker 2: world's going to one green pneumonia. The US is well
Speaker 2: positioned to be the leader in providing those fuels in
Speaker 2: green hydrogen is critical the becoming energy dominant for the
Speaker 2: long term. Additionally, hydrogen generation is really important for national security.
Speaker 2: I mean, next to SpaceX, all the vehicles use hydrogen,
Speaker 2: so we really think about the long term benefits. And
Speaker 2: then on top of that, when you think about hydrogen,
Speaker 2: over thirty percent of detail food moved through a plug
Speaker 2: power fuel cells. Boy, you don't want that disrupted overnight.
Speaker 1: No you don't. Andy, We only have about a minute
Speaker 1: and a half left, and I want to talk about
Speaker 1: the stock price. It's down about ninety seven percent since
Speaker 1: the twenty twenty one highs. Even though you're a relatively
Speaker 1: small company, you're still among at least today the most
Speaker 1: actively traded stocks, with fifty four point seven million dollars
Speaker 1: or million shares rather trading today. It's massive. The volume
Speaker 1: this year has been massive. You've got twenty eight percent
Speaker 1: of your shares floated. What's your message to investors and
Speaker 1: traders right now.
Speaker 2: Well, I think I would tell them it's a great
Speaker 2: opportunity to come in. You you can look at the financials,
Speaker 2: revenue growing at twenty percent, gross margin improving dramatically. The
Speaker 2: deployments in Europe, where the electoralizer industry is really happening today,
Speaker 2: has tripled in the past year. You know, I think
Speaker 2: this is the opportunity to successfully enter the stock and
Speaker 2: it's one of the reasons. Our CFO has made significant
Speaker 2: investments and I'm putting about twenty five percent of my
Speaker 2: salary to work buying stock, actually fifty percent of my
Speaker 2: salary to work buying stock every week.
Speaker 1: Andy, thanks for coming on. Appreciate you taking the time
Speaker 1: this afternoon. Always get to check in with you, and
Speaker 1: it has been quite a few months since we last spoke,
Speaker 1: so don't be a stranger. Come back soon. Andy Marsh,
Speaker 1: CEO of Plug Power, joining us from just outside of Albany,