Thank you for standing by. This is the conference operator. Welcome to the Ballard Power Systems First Quarter 2024 Results Conference Call. As a reminder, all participants are in listen-only mode. The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star, then zero. I would now like to turn the conference over to Kate Igbalode, Vice President, Investor Relations. Please go ahead. Thank you, operator, and good morning. Welcome to Ballard's First Quarter Financial and Operating Results Conference Call. With us on today's call are Randy MacEwen, Ballard's CEO, and Paul Dobson, Chief Financial Officer. Given that our 2023 year-end earnings call was only eight weeks ago, we will keep scripted remarks today relatively brief. We will be making forward-looking statements that are based on management's current expectations, beliefs, and assumptions concerning future events. Actual results could be materially different. Please refer to our most recent annual information form and other public filings for our complete disclaimer and related information. I'll now turn the call over to Randy. Thank you, Kate, and welcome everyone to today's conference call. In our last earnings call, in addition to providing 2024 OpEx and CapEx guidance ranges, we outlined four specific milestones that investors can expect from Ballard in 2024. We noted the following four milestones: First, continued growth in our order backlog. Second, a major order announcement from a bus customer. Third, a major order announcement from a stationary customer. And fourth, the announcement of our next manufacturing facility. In Q1, we delivered against each of these four milestones, highlighting our continuing journey to a commercial products company. I would like to comment on each of them in turn. So first, on continued growth in our order backlog. We're encouraged with our progress over the past six months with new order intake. After booking record new order intake of $64.7 million in the fourth quarter of 2023, we booked another $64.5 million of new orders in Q1, bringing total new bookings over the past two quarters to almost $130 million, a Ballard record for a six-month period. Our order backlog grew by 38% since the start of the year. Second, on a major order announcement from a bus customer. Here we announced a multiyear supply agreement and the largest order of fuel cell engines in Ballard's history. The supply of 1,000 engines through 2027 to Solaris for the European bus market. This landmark agreement is a testament to our collaborative partnership with Solaris over the past decade and the progress we've made with our fuel cell engines. We have proven our fuel cell engines as safe, reliable, and durable. This agreement also reflects an acceleration in adoption of fuel cell buses in Europe, supported by policy tailwinds and regulations to decarbonize public urban transport fleets. The transition to zero-emission city buses has accelerated as the value proposition of hydrogen fuel cells is increasingly understood. Zero tailpipe emissions, rapid refueling, long daily range in all weather conditions, and scalable refilling infrastructure as fleet sizes increase. Indeed, we believe we're on the road to achieving scaled deployment of fuel cell buses in the medium term, which is a critical lever to facilitate economies of scale and cost down initiatives, driving improved economics and reduced emissions for fleet operators. Now, I'd like to linger here for a moment on the bus market. Over the past five months, we've received orders, all repeat orders, orders from existing platform customers for a total of 1,200 engines for fuel cell buses in Europe and North America. This is very, very exciting. We see a tripling of the existing operating fleet in these markets over the next 2 years-3 years. Now let's move to the third milestone, the announcement of a major order in the stationary market. We announced a multi-year supply agreement and the largest order in Ballard's history for the stationary market, an order for 150 engines totaling 50 MW of fuel cell systems from a UK-based customer specializing in renewable off-grid power generation. Again, this is a repeat order from an existing customer and reflects a scaling in their market opportunities. Our customer is targeting the replacement of traditional diesel generators with fuel cell systems that can provide resilient, predictable, clean, and quiet solutions for on-site power generation in a variety of applications, including EV charging, filming, events, and construction. The customer also has an option to purchase an additional 296 engines by March 2026. Finally, to turn to the fourth milestone, the announcement of our next manufacturing facility. As context, as part of our local- for- local global manufacturing strategy, we conducted a comprehensive comparative analysis during 2023 of sequenced production capacity expansion options in North America, Europe, and China. Based on our review, we determined to prioritize the US as our next market for production capacity expansion. We announced our plan to build a new manufacturing facility to be located on a parcel of 22 acres of industrial land within the Rockwall Technology Park in Rockwall, just outside of Dallas, Texas. The facility is expected to have an initial nameplate production capacity of 8 million MEAs, 8 million bipolar plates, 20,000 fuel cell stacks, and 20,000 fuel cell engines per year, or the equivalent of 3 GW of fuel cells. Dubbed Ballard Rockwall Giga 1, we plan to manufacture next-generation fuel cell products, incorporating the benefits of our work related to technology, innovation, and design changes, supply chain collaboration, and the introduction of volume production processes and advanced automation to drive down costs. We also recently announced two separate non-dilutive funding awards to Ballard, totaling up to $94 million, consisting of $40 million in expected grants from the U.S. DOE Hydrogen and Fuel Cell Technologies Office, and up to another $54 million in expected advanced energy project tax credits, known as 48C, funded under the Inflation Reduction Act. Our capacity expansion plan comes at the very time that platform customers are being clear about what they need from Ballard in the future. They're counting on us to be there for them at volume and at the right cost. The ability for us to demonstrate a clear roadmap to high production volumes at significantly reduced costs is critical to customers transitioning from demonstrations to future scaled deployments. With Ballard Rockwall Giga 1, we plan to bring scaled advanced manufacturing of next generation fuel cells online in late 2027. At the same time, when we expect to reach capacity constraints of our existing North American production facilities based on our forecasted growth and production volumes. We expect to make a final investment decision on this facility later in 2024, pending completion of certain customary conditions, including necessary approvals and definitive documentation, including with Rockwall and with the US funding sources. Accordingly, we'll provide a detailed review of the plans of Ballard Rockwall Giga 1 during an earnings call later this year. We want to also provide two interesting updates on the rail market so far in 2024. First, one of our customers in the commuter rail market, Stadler, revealed that its FLIRT H2 train, powered by Ballard fuel cell engines, has been entered in the Guinness World Records for the longest distance achieved by a pilot hydrogen fuel cell, electric multiple unit passenger train without refueling or recharging, an impressive 1,742 miles. Second, and importantly, on April 16th, CSX unveiled its first fuel cell locomotive, developed through its partnership with CPKC, where CPKC provides CSX with a powertrain conversion kit using Ballard fuel cell engines to refurbish diesel locomotives. We view this as a very exciting development. We believe hydrogen fuel cells offer the only viable zero emission powertrain solution to replace or refurbish diesel locomotives in North America. The total North American fleet is estimated to be around 40,000 locomotives, and notably, CPKC has approximately 2,500 diesel locomotives, and CSX has approximately 3,500 diesel locomotives. With high power line haul locomotives using 2.4 MW of fuel cells, which is equivalent of amount of fuel cells would require to power about 24 buses, we believe this represents a large and attractive addressable market for Ballard. Now, before I turn the call over to Paul to review our Q1 financial highlights, I'd like to provide a headline summary of Q1 and some commentary on our setup moving forward. In Q1, we booked $64.5 million in new orders, increased our order backlog by 38%, announced total non-dilutive funding of up to $94 million for the planned build out of our Rockwall Gigafactory, grew revenue by 9%, improved gross margin by 5 points, and reduced cash operating costs slightly, while continuing to invest in next generation products and product cost reduction. Looking forward, in the context of an increasingly constructive policy environment, a growing order backlog, and with sustained investments in product cost reduction, advanced manufacturing capacity expansion, we see an exciting setup for the second half of 2024 and growth in 2025. We are well positioned to enable our customers to compete in the energy transition and the adoption of hydrogen fuel cells to decarbonize heavy-duty mobility and select stationary power applications. With that, I'll turn the call over to Paul to discuss our financials. Thanks, Randy. In Q1, Ballard delivered $14.5 million in revenue, driven by strong growth in the bus and stationary verticals. Heavy-duty motive applications accounted for approximately 84% of the total, and when added to stationary power, our fuel cell products as a whole represented approximately 88%, once again emphasizing our shift into a commercial products company. As a reminder, from previous years, we see that Ballard revenue is typically weighted approximately 30%, 70% between the first and second half of the year, and heavily indexed to Q4. 2024 looks to be no different. Even with the continued shift in revenue mix to power products and the burden of fixed production overhead costs being spread over seasonally low revenue, gross margin of -37% showed a 5-point improvement compared to Q1 2023. We are still anticipating underlying gross margins will break even in Q4 as revenue increases and product cost reduction activities have greater impact. We reported total operating expenses of $37.1 million and cash operating costs of $29.8 million, both relatively flat compared to the prior year comparables. Capital expenditures totaled $7.5 million in Q1. We are maintaining our guidance ranges for total operating expenses and capital expenditures for the year. Our guidance for 2024 includes capital for the initial design and scoping activities for the Rockwall Gigafactory, assuming FID. The expected U.S. government funding for the facility would impact our net capital expenditures in subsequent years, starting in 2025. We ended the quarter with a strong balance sheet, with cash and cash equivalents just over $720 million. With that, I'll turn the call over to the operator for questions. Thank you. To join the question queue, you may press Star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press Star, then two. We ask callers to kindly limit themselves to one question and one supplemental. The first question comes from Rob Brown with Lake Street Capital Markets. Please go ahead. Hi, good morning. I just wanted to follow up on the Solaris order, good scaling there. Could you give us a sense of sort of what the rollout schedule is and how, you know, how that market is developing and sort of what the sort of size of the market is, and penetration rates you get to by the end of kind of by the end of that contract? Good morning, Rob. Thanks for the question. Maybe just to step back a little bit and just remind everyone, we're really seeing the deployments of fuel cell electric bus scaling up, both in Europe and North America, driven largely by this transition to zero emission bus fleets, and it's supported by regulations and strong mandates, and of course, public funding. Just to give you a sense of kind of where we are right now, we at Ballard have about 158 fuel cell buses in operation that have Ballard engines inside in North America, and about 398 in Europe. In North America, I think we're probably right at 100%, 99%-100% market share, in Europe, over 80%. So we have really good visibility on what's happening in this market. And what you're seeing is that the proven operational advantages of fuel cell buses, including at a 500 km or 350 mi of range, you know, the ability to have that range consistent for every day and every season, and the rapid refueling time, kind of 6-12 minutes refill time, and then you add in the complexity that comes with depot electrification as you scale up, we're seeing a lot of operators really revisit their plans going forward. And to see a growing number of cities committing to what I would characterize as a larger deployment. So Bologna, for example, 127 buses, Venice, 90 fuel cell buses, Cologne, 150, Santa Cruz, 57. You've got many other cities in North America as well, Oakland, Philadelphia, Foothill in the L.A. Basin area, Las Vegas, New York City, and Edmonton in Canada, all kind of committing to fuel cell bus deployment. So we see probably going from this situation where you have roughly 500-600 buses in North America and Europe combined today to thousands, literally, you know, in a 3-4-year period. And so we're tracking a very healthy pipeline and with strong market share, with most of the OEMs that are offering fuel cell buses in North America and Europe, are powered by Ballard. So we feel very comfortable with our position in the market and the, and the growth opportunity we see. With Solaris specifically, I don't want to comment on any one customer and their rollout schedule. We'll let them do that, but I would, you know, just indicate that we expect those 1,000 engines to be deployed between 2024 and 2027. Okay, thanks for all the colors there, Randy. On the Rockwall expansion or new facility, what's the CapEx requirements there? I guess, obviously impacted by the government funding side, but what's the CapEx expected on that facility? Yeah, great question, Rob. So we're doing quite a bit of work in parallel right now. We're polishing our project scoping, final budget, timeline. There's a lot of work going on, completing the facility design, the plant layout, looking at the permitting process and finalizing our land acquisition agreement and our EPC contract. There's still some more work on equipment specification procurement. So what we expect to do, Rob, probably on the Q2 or Q3 call, is actually provide a fairly comprehensive review of Rockwall, once we get through FID, and include a CapEx range at that point. We had kind of indicated, you know, if I were to put kind of parameters on right now, I would say $100 million-$150 million, net of the funding is kind of the parameters, and we'll tighten that up as we get out later in the year. Great. Thank you. I'll turn it over. Great. Thanks, Rob. The next question comes from Aaron MacNeil with TD Cowen. Please go ahead. Morning. Thanks for taking the time to answer questions. Randy, you highlighted the upfront incentives to build Rockwall. Obviously, that's great, and a step in the right direction. I can also appreciate that a larger update is forthcoming, but I guess I'm just wondering, at a very high level, are there any production tax credits that you can take advantage of? And, you know, if the capacity is 3 gigawatts, do you have any early indications of sort of what sort of sales volume you think you need out of the facility for it to break even? And then, you know, embedded in that, to the extent that you can answer, what sort of unit cost reductions do you assume, relative to where you are today? Yeah. So we, we've canvassed the US market fairly carefully in terms of incentives, and I, you know, we actually have other opportunities for this facility beyond the $94 million that we've commented on. And of course, there's a package of incentives that comes with the Rockwall Economic Development Corporation. So I think all in will likely be higher than $100 million in total support opportunities there. Of course, all non-dilutive, so that's very powerful for us as we move forward. In terms of, like, kind of unit economics, volume, scale, et cetera, to get the profit to be, I think we'll wait till the upcoming call to manage those. What I would say is, just to be very clear, we don't have an order book at this time that satisfies the volume of 3 GW that we're talking about. Clearly, we are looking clearly at, you know, investing ahead of the adoption curve. But of course, we have a sales pipeline that is showing very strong growth indicators across most of our vertical markets and of course, both for Europe and for North America. So, you know, as we look at our scaling over the next couple of years and basically using the production capacity, existing production capacity and actually some capacity expansion that's ongoing here for bipolar plates in Burnaby, British Columbia, what we see is kinda meeting capacity constraints in that 2027 timeframe based on our sales pipeline and our forecasting for our financial model. Makes sense. Happy to wait. You know, I don't want—I know you don't wanna go get specific on customers and orders and pricing, but, you know, you've mentioned $1,000 per kW in the past. For these big orders, like, is that still a good barometer, or, you know, are you giving some discounts in exchange for volume? Yeah, Aaron, I would say for lower volume orders, you know, you know, 1,000 is probably a good proxy. I you know, most cases we're probably below that, but 1,000 is a good proxy. As you get to higher volume orders, we are seeing, of course, pricing compression there, as we should be. And so, you know, this is not—these type of contracts are not at that level. Got it. Nope. Happy to turn it over there. Thanks, Randy. Yep. Great. Thanks, Aaron. The next question comes from Saumya Jain with UBS. Please go ahead. Hey, how do you guys see, you know, Ballard playing out in the U.S. rail market and specifically down the line? And how are you seeing the truck market growth in 2024 as well? Yeah. So just to clarify your question, I think you're asking about the truck market, is that correct? Yeah, and the rail market for U.S. Oh, oh, and rail. Okay. Yeah. So, so just on the rail market, we'll start there first. I think one of the market opportunities that's probably not very well understood is the freight locomotive market. So you have both commuter rail in Europe, and I would characterize it as modestly in North America, but certainly Europe, a larger market opportunity there. As you know, North America, just the volume of commuter rail traffic is much lighter than it is in Europe. But on the freight locomotive market, as I commented in the opening remarks, basically, you've got a market with about 40,000 diesel locomotives. Those locomotives are refurbished or replaced every 15 years. So roughly speaking, you have about 2,600 locomotives per year. If you look at each locomotive, depending on the requirement for that locomotive, being up to 2.4 MW, well, let's assume it's about 1.5 MW on average, per locomotive. You're talking about a couple billion-dollar-a-year market opportunity just for that market in North America. So it's a very exciting market opportunity for Ballard. We have a couple year period here over the next few years as customers like CPKC, and we're very excited with the work that CSX is doing as well. As these type of companies continue to validate the use of hydrogen for locomotive applications, including their hydrogen storage tender solutions, I think this is the only pathway for decarbonizing. And when you look at the emissions and the costs associated with diesel and the variability of diesel pricing, you know, I think the number one, Scope 1 emissions, is typically around 95% of Scope 1 emissions for these operators is diesel fuel. So, this is a you know, a real priority for these type of operators, who are looking at the future to really look at decarbonization, hydrogen is gonna play a big, big role there. I don't think you're gonna see, you know, kind of high volume in the next year or two. This is gonna take a number of years to validate, but we are very well positioned with the solutions we have, with the partnerships that we have, to play an important role in this market. On the commuter rail market, we have a number of partners there, Siemens, that we've announced, for the European commuter rail market. They obviously have an increasing presence in the North American commuter rail market, too. And then, Stadler, is another customer for the North American and European market as well. So we, we see, I would say, growth in this market by 2030. I think we're gonna see very clear validation, both for the commuter rail, and for the locomotive market, that puts it on a very strong pathway moving forward. For the truck market, this market is actually moving slower than I would like, and there are a variety of reasons for that. We have been focused on what I'd call the, the truck market opportunities where you have return to base refueling. So think about things like drayage trucks and regional haul trucks that are coming back to the same base or yard at night, so you can avoid that distributed refueling infrastructure. You know, we see a number of applications in different weight ranges that will have, I think, hydrogen fuel cells as the primary solution. There'll be some battery electric in some of these weight ranges as well, and I think it's gonna be a mixed solution. But it is taking longer, and I think the vehicle OEMs who've been investing quite a bit in you know different technologies, including autonomy, including battery electric, you know are now looking at the hydrogen fuel cell investments as well. So we see a number of opportunities that are in the, you know, I would say, early stages of validation with these customers as they're going through their RFP and RFQ processes, and we're very active on this front. So we are seeing, I'd say, increased activity from truck OEMs, the large credible ones who are looking to bring solutions to market on the 2028 to 2030 timeframe. In parallel to that, we're working with a number of what I would call the upfitters, so, you know, entrepreneurial companies that see a market gap today and are rushing to market with, in many cases, both battery electric and fuel cell electric, depending on the use case, and are looking to Ballard to provide them with fuel cell engines. And so that, you know, upfitter market is a market that we're also working on. So we have, you know, two flows of traffic, if you will, two streams of opportunity in the truck market. We're advancing both of them, but it is taking longer than we'd like. Got it. Thank you so much. The next question comes from MacMurray Whale with Cormark Securities. Please go ahead. Hey, good morning. As you noted, Randy, strong six months for new orders. I'm wondering, what are your thoughts on the variability of that going forward? I mean, we've seen in the past, when you get these big orders, and it sort of draws some activity level from the next quarters. Or do you think you're through that now with these big long-term sales agreements? Or do you think we're gonna see some, or we should be sort of expecting maybe a little bit more soft on the new order side? What are your thoughts there? Yeah. Great, great question, Mac. You know, what I would say is, this is still very much a, you know, early stage demonstration market, where some customers are earlier in their processes. But I, I do see that while there will be lumpiness in some of the market opportunities we're pursuing, like, for example, the backup power market for data centers or the marine market or even the rail market, you're looking at much larger size applications, power applications, and if you get scale orders there, it's quite different than, you know, the type of orders you'd see from the bus market. So I think we're gonna see, continue to see a lot of variability and a lot of lumpiness. It will be based in some part on seasonality and some part based on, you know, when funding sources are available. And of course, a couple of the contracts we've signed are long-term supply agreements with fixed volumes associated with them. So, you know, that doesn't happen every quarter. So there will be some variability, but I would see the trend is towards larger order books, and the trend is towards getting a smoother cadence of, you know, growth going forward. We do see a very strong sales pipeline, expect to see some additional large orders through the year. So our job is to close those out. Okay. And I guess related to that, I guess, more as more evidence to support that is, if you look at the twelve-month backlog, it's actually kind of back to where it was in 2021 when you had, correct me if I'm wrong, a lot more technology-related sales in the twelve-month order book. Is that correct? Yeah, and I think that's one thing that's probably been misunderstood in some ways. You know, people kind of look at the revenue as being flat, and as in some cases, the order book as being flat, which has been true for a number of years, but the composition has changed dramatically. And so, you know, we're going to a situation now where we're reaching almost 90%, you know, revenue and similar on the order book front, and certainly on the sales pipeline, you know, it's heavily, heavily dominated by the sale of fuel cell engines now. So just as an illustrative example, last year, we shipped over 500 fuel cell engines, a record year for Ballard on that front. You know, in the first quarter, we shipped over 100, which is, you know, a record for Q1. Okay, and just as a second question, just switching gears on the, you kind of addressed this a little bit on the gigafactory in the U.S. When that's up and running, I know it's still a few years out, what does the contribution margin look like? In the past, you've spoken about contribution margin as opposed to sort of the margins you're reporting. Is there any change in what you expect to see when that's up and running? Yeah. I'm not sure how you want to frame that. Yeah. Yeah. So we will see a significant reduction in our costs as we move forward on manufacturing. And so when you look at the processes for MEA, the processes for bipolar plate production, those are the areas we're seeing significant cost reduction opportunity with automation and different processes that really help with things like yield and scrap rates, et cetera, that all go back to cost. So we will see a very significant difference in material costs, direct material and direct labor costs, as we scale in a high automated facility. And then as you move from contribution margin to gross margin, then it becomes a function of getting the volume and getting your fixed overhead absorption across a bigger book of business. We're actually very excited about the opportunity for both contribution margin expansion and gross margin expansion, particularly as volume hits in that new facility. Okay. Great, thanks. Thanks, that's all my questions. Thank you. Thanks, Mac. The next question comes from Rupert Merer with National Bank. Please go ahead. Hi, good morning. Thanks for taking the question. I wanted to follow up on the cost reduction and pricing strategy. With the orders you've announced recently, are the prices you've offered for larger volumes out to 2027 representative of prices that are sustainable in the long run? Or, or to put that another way, are your prices getting to a level that could be competitive with diesel buses on a TCO basis? Yeah, I think what we'll see is that as we move forward, we're gonna see, and this happened very similarly in the solar industry and wind and happened in the battery electric market. There are some variability in those markets, particularly when depending on supply and demand balances, but also very high dependency in some cases on, you know, rare earth metals and certain commodities. I don't see that going forward here on the commodity front in terms of variability. But what I would say is we're gonna expect to see selling price reduction on an annual basis, and our job is to make sure that our costs reduction exceed selling price erosion, so that we're effectively seeing margin expansion. And so that's what we currently have in our plan, is we're assuming a certain percentage. It varies by year, but there is a, you know, kind of an overall blended percentage of, of cost reduction that's expected, you know, customers are expecting. And certainly in the larger long-term supply agreements that we've been signing up recently, we have cost reduction and selling price, we have selling price assumptions, reductions in there, and it's supported by cost reduction assumptions that we have in our plan. Great, thanks. And to follow up on that, so you've talked about some of the advantages you're going to have of scaling up your bipolar plate and MEA. Of course, a big part of your cost is coming from balance of plant. Can you give us an update on the cost reductions you're seeing there and the commitments from your suppliers to bringing their costs down to where they need to be? Yeah, great, great question. And, you know, I think it's worth knowing, too, like, we're working now on our ninth generation of fuel cell engine. And, you know, we've learned a lot through eight generations, as you would expect, and including eight generations operating in the field. So we have a massive competitive advantage on this front. But what I would say is we kind of, you know, the... If you look at the ninth generation, we have more of what we characterize as an open architecture, and this has enabled us to integrate the DC-DC, but also reduce significantly the number of parts, reduce the volume and the weight, and improve the powertrain integration and ease of service, but also significantly reducing the manufacturing time or the assembly time. So this is all gonna help reduce costs and improve the total cost of ownership for customers. You know, what I would say is the balance of plant component is a very significant, you know, cost reduction initiative at Ballard. We have a fairly large balance of plant team that is working with the supply chain every day on making sure we're improving performance, reliability, availability and uptime, warranty terms, payment terms, but importantly, moving down costs. And we've seen step change cost reductions on a number of components that will be coming into production in 2025. So we're pretty excited about some of the cost reductions we're seeing on the balance of plant components. We look forward to kind of unveiling the ninth generation of product, including some of the, you know, metric improvements that we're seeing there. That's great. Thanks for the color. Yeah. Thanks, Rupert. The next question comes from Jordan Levy with Truist Securities. Please go ahead. Morning, all, and thanks for taking my questions. Maybe just to start on the stationary side, nice to see the work and some of the momentum there with your customer in Europe. Maybe if you could just talk to kind of the opportunity size over in that market near term, and then, you know, how you see that progressing over the next couple of years? Yeah, I would say so far, we've been fairly constrained in our view on the market opportunity size for kind of the total TAM for the stationary power market. We characterize it kind of around $4 billion. I think that's dramatically understated. I think what's changed in the last year since we kind of assessed that $4 billion TAM market opportunity is really the data center market opportunity. And, you know, obviously, there's a lot of publications out the last six months on the, you know, growth and the expected growth of the data center market. And, you know, the number one challenge the data center operators have, particularly the hyperscalers, is the access to green energy. And then I would say number two, importantly, is having, you know, the opportunity to get permitted quickly. One of the challenges with permitting is to make sure that you have total clean energy solutions. We're seeing a number of markets that are cracking down to make sure that backup power is also clean energy solutions. So we see a very significant market opportunity for data centers, and that's a market that I think is gonna take that TAM significantly higher. So we have more work to do this year with a couple of key partners that are very large players in the data center market to kind of validate that TAM. But I would say, you know, there's gonna be a market that we're gonna see a lot of lumpiness, and we expect to see more opportunities in 2024. You know, obviously, we've announced this 15-megawatt opportunity, orders. We expect to see more developments in this market in 2024 that will really set us up in 2025 and 2026 to make sure that we have the right partners and customers to really move forward in that market. Appreciate that. And then, you know, as a follow-up, separate topic, recognize the solid benefits of 48C and maybe some of the other credits that you can realize from the Rockwall plant. But maybe just talk to how important you see finalized PTC guidance to the local market opportunity for that plant and maybe more broadly, the investment case for Rockwall. Yeah. First of all, you know, Rockwall is designed to provide us with product that we can use globally, frankly, but it, you know, it's gonna be used to provide products primarily for the North American and European market. And that will take us, in my opinion, likely through to at least 2030. So we have very good, you know, kind of capacity coming out of Rockwall and very cost effective and efficient additional incremental phasing if we wanted to scale that up in the future. So in terms of the PTC, you know, we have the guidance that was published in December. The whole industry has provided feedback. I personally have talked to the U.S. DOE recently about the volume of feedback they've received and kind of the nature of the feedback. So there's a lot of work going on there, you know, with the IRS and the DOE looking at the feedback to kind of square, you know, the objectives of making sure that they have the right incentive mechanisms to support the growth they want, while also trying to make sure that, you know, the hydrogen that is produced has the, you know, a clean hydrogen attributes that the policy is targeting. You know, there's a lot of debate around the regionality, the additionality, and the time matching. I think regardless of how this gets settled, there's really no major impact to us from, you know, the sales opportunities that we see through 2030 for Rockwall. You know, really, I think the cost and availability of hydrogen with the PTC, even in the constrained case, where they take the most onerous or the most restrictive interpretation of the PTC, still provides us with the cost of hydrogen that is significantly lower than it is today. I think with $3 per kilogram of production tax credit for clean hydrogen, as that's defined, you know, you're probably looking at around 50% of the cost of green hydrogen being subsidized. So, for us, we view this as a really significant enabler to the market. Of course, we'd like to see the most, you know, flexible interpretation of PTC, but we'll see how that shapes up. We've submitted our response to the guidance and are waiting to see how that bakes out. Super helpful. Thanks so much. Great. Thank you. The next question comes from Craig Shere with Tuohy Brothers. Please go ahead. Good morning. Thanks for taking the question. To start with, give or take, you're bleeding about $20 million cash a quarter in operating cash flow. And I understand you're saying that your margins will, gross margin will approach break even by the fourth quarter on higher volume. But higher volume can have a working capital impact, and then you've already alluded to cyclical seasonality, like the first half next year might then return to lower volumes and negative margins. So just in terms of this $20 million cash burn from operating cash flow, do you have any trends, color, expectations, heading into the fourth quarter and first half next year about what we might anticipate? Yeah, sure. So thanks for the question. You know, it's something that we look at all the time, is this still a relatively, you know, immature market, you know, on the impact on our cash flows, and we look at different scenarios all the time. What we have to factor into that, though, is, you know, balancing what's in our sales pipeline and talking to customers, their expectations. They want a supplier that is gonna be able to grow with them as they deploy these, you know, their various fleets and various applications. Also, our investments in products and to reduce the our product costs, as we've talked about, not only decrease the unit costs, but increase the performance and quality and the investment in manufacturing to enable, you know, the scale benefits and grow. You know, balancing all of that against the cash on hand, and I think we've said in the past that we're looking at our funding and seeing all of these coming together and seeing that, you know, we're gonna need funding, additional funding, probably in the 2026, 2027 timeframe. And so we're looking at various ways of doing that. We're very fortunate to announce the DOE grants and the investment tax credits. As Randy alluded to, there are other things that we're looking at as well, non-dilutive financing, that is gonna be helpful there. We're also having a hard look at all of our activities across the business and our, you know, where we're doing business in various locations and finding ways of, you know, redirecting spending or reducing overall spending of both OpEx and CapEx to kind of rationalize the product set and, you know, the rest of our costs. You saw in our Q1, you know, as we said in Capital Markets Day, our costs were relatively flat. Lower CapEx spending and operating costs that were relatively flat, and that's bumping up against, you know, a relatively higher inflationary environment as well. We are looking very hard at all of our costs and focusing the company on where the market opportunities are. We'll be able to, as we explore these other financing options, with particular emphasis on the non-dilutive ones, we'll bring out, you know, more information as those become more solid. Fair, fair enough. Just on that first question, to finish this point, I mean, you had a very strong fourth quarter and sales seasonally fell, and you had a working capital benefit. Is it unreasonable to think that heading into a fourth quarter surge, that there'd be a working capital drain? Yes. Yeah, we would expect that. As sales come up, you know, our receivables and inventory is building throughout the year. Our receivables will be building, and then we'll see the receivable inflow, you know, in Q1, as we did, this Q1. So, you know, we expect that, that pattern, to continue. We are, though, also, as part of, you know, as we're looking at our, our cash flows and, and, you know, as we come up to scale, looking at, you know, all aspects of working capital, customer terms, inventory, you know, reduction, inventory management, tighter on that, and, payment terms with our suppliers as well. So all of it is a, is a big focus of mine. Right. And I want to turn just a little- Craig, I- Go ahead. Sorry, Craig, I might just add to that. You know, when we kind of look at 2023, last year, we really implemented a number of activities to really sharpen the focus, to make sure that we have this right balance of investing for the future, making sure we have competitive products, not just today, but five years from now and 10 years from now, and at the right cost structure, et cetera. And so, you know, we rationalized the product portfolio last year. We reduced the number of active product development programs. We dropped corporate development investments and discontinued certain legacy, non-core activities. So, you know, we're taking a very careful look to make sure that we are investing resolutely, kind of on the long term, but protecting the balance sheet. Okay, that's very helpful, and it feeds right into my second question, which also digs into the answer to Rupert's first question. And that related to this, you know, multiyear contracts and providing your customers lower pricing on an annual basis, and planning to kind of, you know, leg into that with even more reductions on your internal costs. It feels like that is a challenging effort. I mean, very hard to predict with certainty the timelines for these things, when the market will scale, and if you have, you know, a growing order book with falling annual pricing, but the ultimate market scaling takes whatever, another 12 or 18 months for various reasons beyond anyone's control, that may be, Is that very challenging in your mind? Is there a risk that if things turn dramatically different than anticipated for any macro reason, that you could suddenly find yourself needing a lot more cash in 18 months than expected? Yeah. So, so Craig, everything about the hydrogen fuel cell industry is challenging, right? This is not for the faint of heart. But what I would say is, when we sign a long-term agreement, and we're committing to future forward pricing, we have very high probability on what our costs are. We're not taking risk on that, right? So there is some, development risk, and there's some very modest volume risk, but not, not kind of what you're talking about. So we, I feel very confident, very confident that our cost reductions will exceed our selling price reductions based on the work that we're doing and based on the supply chain, visibility. I don't view that, you know, there's lots of risks I, I, I think about at night, that's not one of them. Great. Good to hear. Thank you. Our next question comes from Vikram Bagri with Citi. Please go ahead. Hi there. A couple questions on gross margin. Could you just remind us if there are any impairments, this quarter? And then, just looking at the power products backlog, it looks like that ticked up this quarter. How should we be thinking about that going forward, and how does that impact, your outlook for the fourth quarter for that, for that breakeven target? Is that mix consistent with the next 12-month order book that you see? Yeah, Vikram, so just on the gross margin question. So as we stated, we've had a gross margin of minus 37%, which was a 5-point improvement from Q1. And then looking underneath the gross margin, if we just talk about contribution margin, so price minus the direct labor and direct materials, it was, you know, broadly the same quarter to quarter. But both the products contribution margin as well as TS improved. So we are starting to see, you know, some expansion in the products, you know, as we become more of a commercial products company. But it was flat overall because the mix of products. We have more products, you know, with generally lower contribution margins than our technology solutions. So overall, it was flat, but underneath, the product contribution margin is expanding. Then looking at our, you know, fixed and other costs, including the fixed overhead, warranties, and other provisions, that improved by about 6 points overall. We had a net reduction in our warranty approvals as certain warranties expired, and that provided the benefit, a net benefit, with. We also had a few other very small inventory write-down in the quarter, but nothing like what we saw in Q4 of last year. Overall, you know, as we continue to invest in our products, we continue to expect to deliver product cost reductions. When combined with the increasing sales volume and spreading that sales over our fixed costs, we expect to see gross margins improving over time. Got it. Okay, that's, that's very helpful. And just one follow-up. Last quarter, there was a customer that had impacted the backlog. I think their project was being delayed. Could you just talk about if there's any update there? Could we expect to see that customer reenter the backlog at some point? Just any update would be, would be helpful. Thanks. Yeah, we're, we're staying very close to that situation, literally, almost daily. So we, we have very good visibility on what's happening there. And, and, they've made a lot of progress, since December, and we'll, we're expecting them to get resolved likely in the next, you know, quarter, let's call it. But we'll wait to see that, and we'll see at that time what the impact is to the, order backlog. Got it. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Randy MacEwen for any closing remarks. Please go ahead. Thank you for joining us today. Paul, Kate, and I look forward to speaking with you next quarter. Thank you. This concludes today's conference call. You may disconnect your line. Thank you for participating, and have a pleasant day.