2022 first quarter update call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial position or other forward-looking information. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of performance or results. Such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under Item 1A, Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31st, 2021, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day on which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call or as a result of new information. At this point, I would like to turn the call over to Plug's CEO, Andy Marsh. Well, thank you, Teal, and thank you for joining Plug's first quarter earnings call. You can find a detailed review of the quarter in our shareholder letter. Let me give a few thoughts to start this call. I recognize that macroeconomic conditions are challenging. Like everyone, we have seen some of the challenges in supply chain and the price of natural gas. Plug's future is not based on the economy today, but the future. Let me highlight, the present is very bright. In the present, how many companies will increase by over 80% this coming year in revenue? In the future for hydrogen fuel cells, as outlined by Bloomberg and others, is a unique $10 trillion opportunity. All of our activities are tied to this opportunity and tied to a world that is energy independent and green. I'll contend that ultimately, green and energy independence are synonymous. As an indicator of our present is our sales funnel for electrolyzers. The funnel is approximately $50 billion. We've committed to book 1 GW this year in electrolyzers. We will most likely be increasing this goal soon. How about the futures? I'm sometimes asked, "Can this business scale?" Let me give you a simple example based on Q1 financials by telling you our gross margin improvement story. Let's start with products. Our GenDrive product gross margins is over 30%. The cost of our new products will continue to come down as we experience our traditional 25% learning curve for fuel cells and electrolyzers. All our present products at today's volumes will have a minimum of 30% gross margins. Our service learnings are being implemented and demonstrated now and will cut our service costs ultimately by 45%. With deployment of our green hydrogen network, 70 tons which will be available by year's end, our cost will be 1/3 today's cost. Our PPA, which includes assets we can ultimately own, will be net positive. These numbers align with our 2025 goal of $3 billion revenue, 20% EBITDA, 17% operating income. This is the equation for success. We're building the category king with the clear strategic and tactical plans, great customers, employees that's unmatched in the industry. I've never been more positive about the fit between our strategic and tactical plans as I feel today. Paul, Sanjay, and I are now ready to take your questions. Thank you. Ladies and gentlemen, at this time, we will conduct our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press the star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Christopher Souther with B. Riley. Please state your question. Hey, guys. Thanks for taking my question here. Nice to see some of the non-material handling stuff really take off here. Could you give us a sense of how that $45 million breaks down between electrolyzer, on-road, and any other end markets there? Go ahead. Hello, Paul. I'm gonna let Paul answer that question. Yeah, I would say it's, you know, and there'll be more detail in the queue, Chris, but, you know, it's about probably roughly a third electrolyzers, but, you know, that pipeline is growing and scaling. That business will be a lot bigger in the second half, given the ramp of the pipeline and the production capacity. The other stuff is mainly the acquisitions. Okay. Got it. Then just another one on the fuel margin improvements. Seems like you're, you know, continuing to be very positive on the long-term trajectory there. If we're looking at kind of one-third of the cost for green hydrogen versus kind of what we're paying today, you know, how should we kind of feather that in as the capacity ramps up? Do you think, you know, that's kind of an immediate, you know, when capacity comes online, you know, we should kind of assume that lower pricing or is, you know, during kind of the ramp up, is it gonna be, you know, take some time to kind of hit that type of rate? Chris, I'm gonna let Sanjay take this one. Great. Hey, Chris. How are you? Good question, right? Obviously the cost will go down as the plant ramps up. That's how it plays out. Having said that, we've said by, you know, by the end of 2023, you know, we're looking at break even, getting to cash flow positive from an operations standpoint 2024. You can kinda think about as the 17 tons come online, that will really reduce our blended cost in 2023. That cost will further improve in 2024. As you go to 2025, you know, we feel very confident that we get to that corporate gross margin target of 30%. That's really how it plays out from a cadence standpoint. One more thing, if I may add, right? I think in the month of April, our plant in Tennessee actually operated at 93% since we've expanded capacity, and that is going to help with our overall blended cost of molecule as well. That's what you will see happen. As the plants come online, we will gradually ramp up. Once the plants are at that 92% of the capacity, you know, from the utilization standpoint, you'll see the full benefit of the reduction in the fuel cost. Appreciate it. Thanks a lot for the keep. Thanks, Chris. Thank you. Our next question comes from James West of Evercore ISI. Please go ahead. Good afternoon, Andy. Hi, good afternoon, James. Andy, I'm curious about the recent MOU you signed with Olin Corporation to take away some of their byproduct hydrogen. I know the initial JV looks to be relatively small, but they produce, if I'm correct, a lot more hydrogen than the initial- Yeah. ...JV suggests. It seems like this could be game changing. Could you talk a little bit about kinda your strategic thinking here, the rationale and how this came about? Yeah. James, we do think it's an important step in building out our network. Olin, you know, has a waste stream, which is probably over 350 tons of hydrogen per day. That's significant. Yes. This relationship is really just the beginning. When you start looking at the cost, it is equivalent to under $0.02/kWh for electricity. Plus, on top of that, the complexity of the plant is much, much simpler. We think the relationship with Olin will become a critical element in building out our hydrogen network across the U.S., which will position us to expand even rapidly. This is, I think, you know, Sanjay, I think we feel we can get these plants up by the first quarter of next year. Absolutely. Which will be really beneficial for our cost. Sanjay, what have I missed? No, I think you've pretty much summed it up, Andy. James, as you said, we're obviously pretty pleased with this partnership. More to come. As Andy said, there's a pretty big substantial volume. You know, again, you know, this is one of those opportunities which will be a pretty critical part of building this North American green hydrogen network together with a partner like Olin here. Right. Okay. Then maybe, Sanjay, if I can just ask why you or they or you guys chose the Saint Gabriel, Louisiana plant to start the project. Was there something unique about that, or is that just there's available capacity? Well, first off, this will be a 15-ton plant, right? Given the stage of where it is, availability of feed gas, you know, potential to actually make that feed gas also green. That's the rationale in terms of why we decided to work on that one there. This is a discussion we've been having for a long time, James, as you can imagine. Sure. It just materialized here just recently, but it's the first one and hopefully many more to come going forward. Okay. Got it. Great. Thanks, guys. Thanks, James. Our next question comes from Colin Rusch with Oppenheimer & Co. Please go ahead. Thanks so much, guys. Could you talk a little bit about how your- Good afternoon. Good afternoon, Colin. Good to talk with you, Andy. Could you talk a little bit about the evolution of your pricing strategy relative to adoption rates and any sort of cost management that you're doing? Obviously, inflation is impacting a lot of folks, you know, and certainly you guys can't be fully immune. But just trying to think about how you guys are approaching this with your customers to kinda thread the needle. Yeah. That's a good question, Colin. So if I take a step, you know, we are in a. You know, I always am hesitant to talk too much about pricing. But I would say that, look at the steps we're taking in hydrogen, we are more focused on managing our own costs to support our customers. We find that product pricing for GenDrive and fuel cells, you know, are reflective of the increase in cost in the marketplace. So much of our service is associated with reducing our cost, that you know, I think our service model is evolving to the point where, you know, Chris Suriano, who runs our service group, we clearly see the 45%. We're really looking to drive it down even further. You know, customers are, I'm not gonna say, light price increases, but are more understanding and open to price increases. Excellent. You know, just thinking about the new facility and the ramp there, you know, I guess, obviously it looks like there's an awful lot of new automation. I'm wondering if you can talk about kind of initial yields with that automation and what you're seeing so far as you start to ramp that up and get prepared? I think that's. I don't know if we kept it in the letter, but when we look at the stack cost for electrolyzers, the automation will allow that cost to be reduced by 70%. So it is significant. That, Colin, really makes our electrolyzers extremely competitive. It's why during the letter, my opening statement, I expressed such confidence in the 1 GW, which will be quite profitable for Plug. On top of that, I really do expect that number to increase as the year goes on. We're looking at projects alone that are 1 GW in size. Quite honestly, it's a nice market because people really aren't in a position in the free world to produce at this level. That's incredibly helpful. Thank you so much. You're welcome, Colin. Thank you. Next question comes from Bill Peterson with J.P. Morgan. Please go ahead. Yeah. Hi. Hi, Bill. How's it going? Yeah. Yeah. How are you doing today? Okay. Good. Good. My first question is on policy and I guess specifically in Europe. You probably saw last week the REPowerEU, the commissioner as well as a lot of industry CEOs signed a declaration to basically massively increase the electrolyzer capacity even within the next, you know, call it, you know, three, four years. I guess my question is that something that Plug feels it needs to be a part of in terms of having local manufacturing in Europe? I guess what does Plug need to do specifically in Europe to, you know, I guess obtain its fair share of the clearly growing opportunity in Europe? One of the hidden secrets, Bill, is that I probably invested more in fuel cells and electrolyzers in the past year than anyone else. I think that uniquely positions us. We do have discussions, and if you think about our brand launch the other week, we were well represented by Belgium and the Port of Antwerp, as well as many other entities. We have relationships with Lhyfe, which are experts in, you know, sourcing low-cost renewables in Europe. I do think, you know, this weekend I was with folks from our HYVIA JV down in Miami. When you look at that relationship, there is a good chance that we will be looking to putting electrolyzers, electrolyzer capacity in the. I'm not saying this right, so let me step back, Bill. When you start thinking about making MEAs, we are seriously looking at making that in Europe where they'll make fuel cells or electrolyzers. Look, we've made the next round of the JV in the European funding, and the amount of funding that JV can get can be substantial to support the activity. I would not be light about the U.S. either, Bill. Last week, I met with three senators from fossil fuel states here in the United States. All of them are thinking about how they can move their economies to hydrogen economies in the future. I can tell you one of those senators who's been getting a lot of press time is very, very bullish on making sure that part of the climate bill includes substantial extension of the ITC for fuel cells and hydrogen, as well as the production tax credit. From my time in D.C., I'm probably much more bullish than other folks because quite honestly, we were meeting with the folks who probably are the moderates in the debate, and all of them are strong supporters of hydrogen and fuel cells. Yeah. Thanks for that color. I guess maybe sticking closer to home, you know, I'm actually here in Long Beach at ACT Expo, and I know Plug has a presence here, but as does a number of your sort of peers in the hydrogen space. It's pretty clear that hydrogen is very much of interest here at the show. I know you're talking in your shareholder letter to share more on your potential strategy in the second half, but I guess in light of, you know, the clear interest, what is? I guess you said in the past, I think two quarters ago, you don't really wanna be just providing to an OEM for somebody else to monetize it. What can Plug do uniquely in a partnership? Would it be also not only providing the fuel cell but also the fuel itself? I'm just kind of curious on what is Plug looking to do in the heavy-duty space? Bill, I think if you look at the model we've used with HYVIA. And the model with HYVIA is that we brought our technology, they brought technology, combining them together to offer a product rapidly to the market. I also want somebody who has sales channels, and I think that's really important for the future also. You know, we have people we're working with. We spent a lot of time on this issue. You know, I've always been maybe not first in making deals in certain areas, but we've always made, I think, smart deals when it comes to how we entered Europe, how we entered Asia, how we entered Australia. I think that patience will pay off for Plug. You know, I think you'll be hearing more in the second half of the year, as said in the earnings letter. I can tell you, we meet every week on our progress in this area. Thanks. Look forward to seeing more progress. Great. Thanks, Bill. Thank you. Just a reminder, to ask a question at this time, please press star one on your telephone keypad. To remove yourself from the queue, you can press star two. Once again, to get in the question queue, simply press star one on your telephone keypad. Our next question comes from Leo Mariani with KeyBanc. Please state your question. Hi, Leo. Hey, how are you? Okay. Great. I was hoping you could expand a little bit on, I think if I heard you right, you made a comment that you're looking at projects, you know, currently on the electrolyzer side that are 1 GW in size. Did I hear that right? You did hear that right, Leo. PEM's ideal for that. Let me take a step back. Do you realize that, if you did a gigawatt project like that, it's probably 6.5 football fields, you know, alkaline. With PEM, it's about 40 yards of a football field. That's one of the distinct advantages of PEM. When you start really looking at the total cost of ownership, PEM wins hands down. Right. Okay. This sounds like it would be a large scale potential power project that you're in negotiations on. It is. Okay. We have more than one we're in negotiations on. Okay. Let me just mention, Leo, negotiations and discussions. You know, it's not an overnight. None of the discussions we're having in this area is overnight. I've personally been in discussions on this for 14 months. Okay. Also just wanted to touch base on margins. Certainly just kinda noticing that your total gross margin, you know, was a little weaker here in first quarter, you know, versus fourth quarter. Could you maybe just give a little color on sort of what the main drivers were there? Then additionally, how do you expect to see margins progress, you know, during 2022? Do you think you'll see, you know, margins turn back positive by the end of the year? Paul, you wanna take that one? Sure. The first thing is, if you look at the, you know, sales volume, you know, it was down, sequentially, and that's because of the seasonality of our business. We always do about 1/3 of the volume in the first half. Q1 is always the lowest volume of that. It's just a natural phenomenon in the material handling business. It's also a phenomenon of scaling rapidly the way we are with some of these new, markets and products. You know, right now they're gonna be quite heavier in the second half just because of passage of time and scaling up that pipeline. With that, you know, my equipment revenues is down, sequentially against Q4. Just on apples-to-apples basis, you have a lower mix of, you know, higher margin business there. Having said that, you know, we've got more positive activities going on than the eight years I've been with this company. We're scaling a number of new products, which takes time to ramp and scale them up. As they ramp and scale, as Andy alluded to, they'll certainly be in that 30% gross margin profile. We've got the fuel activities, which we've talked about extensively, including on this call. I don't think people really appreciate the fact that it's a step function change when you can generate that molecule at 40% of the cost we're paying today. That's just dramatic, right? That's real exciting and the progress that we're making there and programs like we're doing with Olin really allow us to even accelerate that. Service. You know, not only are we shipping products out with a substantially improved reliability profile, we have extensive capabilities to go back and retrofit the units and site and application and get those benefits. We've got a tremendous amount of resources, more than we've ever had, focused on reliability and going back and putting in the improved stack software, the improved batteries, the different components that will really step function change that cost curve with units. Which is why Andy said that within a short period of time, we're gonna be reducing that cost by over 45%, all of those activities are actively ongoing in conjunction with growing by more than double this quarter from last year. You know, despite the growth, which is hard enough to navigate, we're doing all of those activities. I'm real excited as Andy is about, you know, all the prospects of what's happening and how this is gonna start to transition in a very short period of time. You know, you'll see it through the course of this year. If you look at the two-thirds sales volume, you know, that means we're gonna be doing, you know, more sales in the last six months of this year than we did all of last year, just to put it into context. You know, that's pretty substantial in terms of volume, which means. A lot of that means it's gonna be very heavily concentrated in product, which is where I get the best margin profile. It should be very accretive and will be very accretive as we move through the year. All right. Thank you very much. Thanks, Leo. Thank you. The next question comes from Eric Stine with Craig-Hallum. Please go ahead. Hey, Eric. How are you? Hi, everyone. Thanks for taking the questions. How are you doing today, Eric? Doing well. Thanks for taking the questions here. Well, maybe just to start, you announced the offtake with Walmart as part of the green hydrogen strategy. That was great to see. If we think longer term, and I know you by 2028, the 1,000 tons per day goal, you know, what is the right amount that you think you should have under offtake agreements? I mean, is there a certain percentage you wanna have to be able to sell at spot, I guess, for lack of a better way to say it? Or do you really wanna maximize that amount that's under contract? Craig, let me let Sanjay take that one. Great. Hey, Eric. How are you? Good question. Look, I think we touched on it a little bit on our last call as well. We don't wanna sell out the entire capacity, right? Because the way we're thinking about building this, green hydrogen generation network is it's gonna be a force majeure resilient network that is going to make sure that green hydrogen is economical, ubiquitous. Nobody should ever really worry about where the hydrogen comes from as they plan to adopt more and more fuel cell application, right? The number that we have been targeting and we've been internally discussing and thinking about is between 70%-80% of that capacity we do wanna have under long-term contract, but we absolutely want to have that 20%-30% of that capacity as a flex capacity, so we can help other players in the industry, other potential customer in the industry so that, you know, the hydrogen really ends up being viewed as being very ubiquitous and the green hydrogen keeps on getting more and more economical. That's how we think about it. Okay. Eric, I think one other point, it's an important one to note here as well, right? Because when we think about this whole green hydrogen offtake strategy on a long-term basis is, and I think you know this, but it's probably important for others to keep in mind. The demand multiplier that comes from new application is a very important one as well that we all need to keep in mind. Like, forklift consumes 1 kg of hydrogen a day. You have your light commercial vehicle at about 6 kg-8 kg a day. Class 8 truck, 50 kg-60 kg a day. If you have a 24/7 1 MW stationary power, that's almost 1.4 tons a day. That's how the demand multiplies for hydrogen, and which is another reason why we're very strategic and thoughtful in terms of entering into this long-term contracts to make sure that there is enough hydrogen available for our pedestal core customers as they embrace and adopt new application. That hydrogen availability is never a concern and never an issue. Yep. No, that makes perfect sense. Good color there. Maybe just last one for me. Material handling, you know, strong quarter here. I think in the past you've said you're targeting three additional pedestal customers in 2022. Just maybe thoughts on how you're trending there, and can you remind me, I mean, are you counting on those three for your guidance? I guess they probably wouldn't have much of an impact even if you secured them today on 2022. It'd be more 2023. That's correct, Eric. Our guidance of $925 million in revenue does not include that. Just got a call with our head of that business, Jose Crespo. He's feeling very good about the two potential customers in Europe. I think in our earnings letter, we mentioned the relationship with Lidl, which is developing, and really feel good about the U.S. customer. We feel like we're trending well. You know, quite honestly, that's the easy business for us. That's the one that after these years, it's very, very systematic. Right. Got it. Okay, thanks. The next question comes from PJ Juvekar with Citi. Please state your question. Yes, good afternoon, Andy and Sanjay and Paul. Good afternoon, PJ. Andy, you know, with cost of natural gas going up in Europe, you know, you know, green hydrogen is at par or even cheaper than gray hydrogen in Europe. Your timing in Europe is great. Right. Can you talk a little bit about your Duisburg, Germany facility? Would that be a hub like Rochester? What are the plans there? You said water connection to different ports. What are the plans for that facility? Yeah. I would say, PJ, that that facility is a hub today for light manufacturing and distribution. I think the plans for Europe. I think you'll see a couple items. We announced a small deal for 10 megawatts in Hungary. I can tell you that in Europe alone there are probably. What did David Bo tell us today? 300 opportunities, Paul. Yeah. In Europe alone for electrolyzers. There is an incredible push. Between that and our activities with HYVIA in France, where, you know, there is strong financial support that we will probably get for putting a facility in Europe that, I think the opportunities in Europe are for electrolyzers with this issue of energy independence is enormous, and we see it. You're right, and Plug is uniquely positioned because we can actually build products today and ship them, which puts us in a much different position than I think others in the marketplace. Great. My second question is for Sanjay. Sanjay, you know, you mentioned here that the molecule cost could get cut in half next year as you start these green hydrogen plants. Can you give us a little bit more color on how does the cost go down by half, with green hydrogen? Just curious. Thank you. Sure. PJ, I think, you know, by the way, looking forward to being at your conference tomorrow. Let's take a step back, right? I mean, I think, you guys see it in our P&L as to how negative the fuel business margin is, right? That's a function of what has happened to price of natural gas and how that price of natural gas has gotten passed on to us, and we obviously don't pass that on to our end customers, right? Our margins are negatively impacted here. You know, you can almost extrapolate that those numbers are pretty substantial in high single digits to in some cases, low double digits, right? Now, we've told you all that in every single one of our green hydrogen plants, we have looked at securing low-cost renewable electricity. We've told you how much electricity is needed to produce one kilogram of liquid hydrogen. You know, the CapEx is not the biggest component in that particular case, right? If you're looking at a scenario where green hydrogen spot cost is closer to $4 a kilogram, that number is getting cut in half. Now, from a consolidated number perspective, you would not see that entire pickup in the gross margin right away. You see that continue to get better as we go forward because we still have some legacy contracts that will roll over in 2023, 2024, and 2025 timeframe, but you will continue to see the margin pick up. One other thing, right, as this plan keeps getting ramped up, as the utilization keeps going up. In the month of April, we actually had even more than 90% utilization in our plant in Tennessee. Despite everything that's happening in natural gas world right now, that is going to actually be a big contributor and will help us with the molecule cost even in Q2 versus Q1 of this year. Great. Thank you for that color. Absolutely. Thanks, PJ. Thank you. Our next question comes from Craig Irwin with Roth Capital Partners. Please go ahead. Good evening. Hi, Craig. Hey, Andy. Hi. Thanks for taking my questions. Definitely, you know, appreciate this. Andy, most of the things I wanted to talk about have been thoroughly covered at this point. Big picture, right? Plug is one of the very few companies that's really executing in the broader fuel cells hydrogen space. A key part of that is green hydrogen. You're working with the right partners. You're meeting major milestones on a frequent basis. What would you do possibly to go faster? I mean, is that feasible? You know, if you're more- Yeah, that's actually. ...spend $100 million, $100 million more a year, what could you do? Well, Craig, I can tell you, I give a lot of thought to how to really scale this electrolyzer business quicker. That means that duplicating our facility in Rochester sooner rather than later could have a big benefit to our business. Item two, Craig, is that the work we're doing on thinking through Class 8 vehicles over the next six months, you know, that's an area that we're fully committed to making a move and making a smart move. You know, I think there are two big ones. I think the electrolyzer business, a lot's going to be whoever has the capacity will win. I think during these times when people are getting nervous, we have the balance sheet to do it and to get aggressively ahead. It's not off the table that we would think through additional consolidation of this industry at the right time, at the right price to even grow Plug bigger, faster. You know, this is, you know, balance sheet gives us strength that I think sometimes is hidden by other items. Just as a follow-up then, it sounds like electrolyzers and Class 8 trucks are really key markets that you're prioritizing for potential acceleration, and that you're happy with the targets you have for green hydrogen over the next couple of years. You know, as the other side of that, you know, you just signed this excellent agreement with Olin, I guess, 250 tons-400 tons a day, available sort of at their facilities. You know, what would you say the right number. What would make you say the right number is 2,000? Do we need market development to move faster to allow you to service into that? Or, are you scaled appropriately for how this is developing? That's a real good question. I think that we are building a new 300,000 sq ft facility in New York that provides us the infrastructure to be bigger than we are today for equipment. It's the MEAs capacity of 2.5 GW that we have to give a lot of thought to scaling even quicker. You know, you hit on one of the main premises I have. The greater the availability of green hydrogen, the greater the availability. It's a flywheel effect, as my buddy Sanjay always says, which will drive these apps. To us, having that hydrogen on is critical to our success. So we're laser focused on that. The electrolyzer business, I you know, I can't tell you how big it could be because it's, y ou know, Sanjay, you throw around a number to me that they think there's. About 150 GW of potential pending opportunities out there. In the near term. Yeah. Nobody has the capacity or capability to build it. That's why I hired these folks from Tesla. You know, if you look at my ops team, Craig, I got the guy who built the Reno tech factory. I have the folks who ran supply chain for Musk in Reno. I have the folks who automated those factories who work for Plug today. We're bringing the talent and capability in to scale this business quick. Well, you definitely have the reputation for treating your staff a lot better, so I hope they're happy at Plug and watching your success. Touché. Touché, Craig. Thank you, guys. Thanks, Craig. Thanks, Craig. Thank you. Just a reminder. To queue up for a question, press star one on your telephone keypad. To remove your question from the queue, press star two. Once again, to ask a question, press star one on your telephone keypad. Our next question comes from Jeff Osborne with Cowen and Company. Please state your question. Hi, Jeff. Yeah, good afternoon. Two quick ones, clarifications and then one more strategic question. On the clarification side, just wanted to better appreciate on the nat gas pricing moves, how quickly that flows through, your P&L. Hypothetically, are your contracts three, six, 12 months in duration? If today was the peak of the market and you're buying, locking in a contract today, when would that flow throught on a P&L basis on a per price per kilogram basis? Yeah. I'm gonna let Sanjay take that, Jeff. Jeff, there is about a quarter lag in terms of that natural gas price being adjusted, right? You could almost see what happened to our fuel cost, you know, fuel costs that we buy today from our suppliers, natural gas represents about 40% of the cost of that. You know, as you can see what happened to the price of natural gas in Q4, right? That's the impact you saw in Q1. You know, you can also track what happened to the price of natural gas in Q1. You will actually see that impact in Q2. That actually gets reset in the beginning of the quarter. That's typically how it happens, Jeff. It's on a quarterly basis. Got it. That's very helpful. I appreciate it, Sanjay. Yep. Just, you know, a lot of moving pieces in your business, a lot of hiring, international expansion, multiple JVs. Could you give us either a formal or informal, OpEx and CapEx guidance for the year? Just things that you can control in life. It would be helpful to understand where your head's at, especially relative to the Q1 run rate. For Plug as overall? Yeah, I think. Exactly. Yeah, that $100 million is probably a good proxy, Jeff. You know, I think so, a lot of it's non-cash. As we've worked through the acquisition accounting, there's some amortization of intangibles and things like that that was probably a little bit higher than I expected as we worked through those early. You know, we did the three deals in the last, you know, over December and January. But I think as we sit today, kinda $100 million, $105 million per quarter is probably a good proxy on OpEx. On CapEx, I expect it to ramp, quite frankly. We've talked about getting up to $1 billion this year. I expect as we go through the balance of the year, with the plants that were the green hydrogen facilities as well as the new buildings that we're building, that pace will accelerate. Got it. That's helpful, Paul. Andy, maybe for you. You said you spent a lot of time thinking about how to scale the electrolyzer business. A two-part question for you, if you don't mind. One is, could you articulate why you're winning, A? B, you know, I'd love to understand some of the acquisitions that you've made that your competitors don't have, in particular on Frames on the EPC side and anything on the tanks and distribution side. What I'm trying to get at is when you're chasing this business and you're looking at the pipeline, could you give us a sense of, you know, what the attach rate or stickiness would be of EPC and storage and distribution, and then what that does, you know, on a revenue per megawatt basis for, say, you folks versus other people that are maybe just providing an equipment solution? That's a good question. I'm gonna let Sanjay take the second part of it, but let me take the winning part of it. You know, I think the equation comes down to that, there's always a technology aspect, Jeff, and you don't get to the next stage unless you have technology that can meet customers. I can tell you that, you know, with our deal with the consortium, it came down to the fact that they did the two-year study of who had what they thought was the best PEM electrolyzer technology, and they concluded that Plug had the best offering. I think the second item that folks look at is that who can put all the parts together and actually support the build-out of the plant. You mentioned Frames. If you look at organization, we're really deeply involved in the transition from fossil fuel to hydrogen. So many of our people come from the oil and gas industry, and know how to do big projects. When you start talking about 1 GW plant, how you manage the water, how you manage the drying of the hydrogen. I think the capability that we bring to the table, especially with the Frames acquisition and all the back office support activity we have in India, 'cause you really need, for these kind of opportunities, lots and lots of documentation, lots and lots of support. I think the third item, it's. I'll give you a fourth item, too. Third is we have manufacturing capability, and we know how to make the products. That may seem basic, but the fact of the matter is, Plug has been doing this for a long time in one industry, and the fact you actually know how to buy components, do drawings, build things, make things that work, understand those issues uniquely qualify us. I can tell you the fourth one that Evercore said to me, they concluded that Plug was gonna be the leader in this industry, and they wanted to be with the leader. Sanjay, I think now you can kind of talk about the stickiness and opportunities for liquefiers and trailers and other opportunities. Yeah. Absolutely. Jeff, one of the, you know, sort of recent example here with one of the potential customer was, you know, there was an electrolyzer team, right? Then we had our team that were actually talking about why we have the potentially one of the most energy efficient liquefiers. We didn't stop there. We said, "We can actually build you on-site storage. We can actually build you tankers, right? Liquid hydrogen tankers as well." When you really look at it from that perspective, as Andy talks about it, right? This really gives us that really, really unique opportunity to a portfolio sale. It's one-stop shop. We can manage your supply chain better. We can give you better pricing. We can really give you a turnkey end-to-end solution, and that's where, you know, one, it's sticky, two, it's obviously a higher dollar per customer opportunity, even thinking about it as our liquid hydrogen perspective, right? That's where it becomes a pretty substantial opportunity for us. Jeff, from the numbers perspective, just for your sort of the modeling of the benefit as well, this is how we run it. When you think about a 15 tons per day liquid hydrogen plant, you need about 7 or so liquid tankers, right? That's the math you wanna think about. You will at least have about two to three 60,000-gallon storage on-site as well. Once you go to 45-ton plant, then that's where you would actually be a large scale to actually do the storage on-site, and that's not where on-site storage would actually be as applicable from an application perspective. Got it. That's helpful. Appreciate it, Sanjay. Of course. Thank you. Next question comes from Andrew Percoco with Morgan Stanley. Please state your question. Great. Thank you for the time. Appreciate the Hi. The question. How are you doing, Andrew? Good. How are you, Andy? Okay. Just, you know, one quick one on site selection for renewables. Just hoping you can give an update in terms of what you're seeing on, you know, supply cost inflation, your ability to source PPAs for additional green hydrogen production facilities and if there's any risk to that 500 ton per day, you know, goal by 2025 in North America given this, you know, recent Department of Commerce anti-circumvention case on the solar industry. Go ahead, Sanjay. Great. Hey, Andrew. How are you? Very good question, right? Look, I think, first thing, we've been very thoughtful about diversity of that power source. We have hydro PPAs, we have wind PPAs, and we have solar, number one. Right. Number two, when you really look at our funnel here between 2022, 2023, and even into 2024, there are some PPAs that have already been signed, which puts us, if anything, in probably more of a competitive position versus the other way around. Now, even for one of our opportunity in the West Coast, we've actually locked in the module price when we actually entered into the development agreement. That really puts us in a very unique position versus what you're seeing to the solar module prices here in the market. You're absolutely right. Here in the near term, we've seen an escalation in the solar and the wind PPAs. As you know, you know, when you see this, increase in the module prices, fast-forward 18 months, there is typically a very large capacity that gets added. We've seen that again and again happen in the PV and the solar industry. Prices do tend to come down. We've been very thoughtful about not really sort of jumping into this very high module prices and therefore high solar PPA. We've been strategic about that. We've been looking at opportunity that's already secured that gets us to where we need to get to. Andy also touched on it, right? This Olin partnership really also puts us in a very unique position, not just to get to that 500 tons per day number, but potentially even exceed that. That's the approach we're taking. We're being very thoughtful about it and not just jumping into wanting to sign a solar PPA given what has happened to the module prices here in the near term, as well as what has happened to the PPA for the new greenfield sites, if you would. Great. That's super helpful. Just one last one for me. I think, Andy, before you alluded to some potential, you know, additional M&A. Is there anything left, like, to vertically integrate, you know, or would it be more of a potentially more of a strategic acquisition to expand into a new, you know, geography, that you don't currently operate in? I would say, Andrew, that we obviously are thinking a great deal about Class 8 trucks, and that's probably an opportunity for additional vertical integrations. I think we're also and probably more in the partnership side, thinking a lot about, you know, large-scale storage and pipelines. Nothing, you know, I don't think we would do either without partners, but that's certainly an area we're giving a lot of attention to. Quite, you know, and really kind of also those kind of activities are kind of tagged to the broader infrastructure bill that is law and the broader hubs, for example, in New York, where we think those type of offerings could be really beneficial in supercharging the hydrogen economy. Awesome. Okay, I'll leave it there. Thank you. Okay. Thanks, Andrew. Our next question comes from Ameet Thakkar with BMO Capital Markets. Please state your question. Hello, Ameet. Hey, thank you for taking my question, Andy. Hope you're well. Just real quick, the acquisitions added $40 million of revenue in this quarter, and was just wondering on a gross margin basis, like, how did that kind of fare relative to your core material handling business and your other products business? It's lower. I mean, you know, these are businesses that we're scaling with new products right out of the gate. You know, if you look at our electrolyzer business as an example, it's probably gonna be, you know, 6x, 7x the volume we did last year. It's scaling quickly and rapidly. I expect the margin on that, particularly in the second half, as that starts to really scale to size, to really be in that, you know, start approximating that 30% target. It's on a mixed basis. I mean, there's a lot of different components in that, so it's hard to probably get in detail on this phone call. I would just say in general, think about it as new products that we're, you know, quickly scaling and rapidly growing. It's, you know, anywhere from low double-digit to you know, in some cases up north of 20%. We'll scale all of them up to that 30% as we move to the second half of the year and onward. Great. I think Sanjay's kind of touched on it a couple of times on the call, but, like, I think you guys had talked about being able to kind of get PPAs in the $0.025-$0.03 kW power range. Kind of given higher prevailing power prices and the DOC investigation, you know, the PPA prices have come up. Just to kind of be clear, like, are we to kind of understand that the kind of all of the kind of power capacity you need for the 70-ton per day exit rate in 2022 is largely in place and you're gonna be kind of opportunistic in layering kind of additional power capacity to get to the 500 tons per day after this kind of settles down? Is that the right way of looking at it? Yeah. I mean, short answer is yes, but let me add even some more to that, right? It's actually beyond that 70 tons per day where we've actually secured power pricing just so you know, right? You know, so again, look, I think we'll obviously be thoughtful about it in terms of when do we think is the right time. You know, so obviously seeing a pretty meaningful impact on the PV module prices as well as the solar PPAs. We're not gonna jump into entering into a PPA that we have to live with for the next 15 years given short-term dynamics here in the market. It actually gets us well beyond that 70-ton numbers in terms of the already signed PPA with wind and, you know, even some of the solar deals and also some of the other hydro deals that we have. Great. Thank you for taking my questions, guys. Thank you. Our next question comes from Alex Kania with Wolfe Research. Please state your question. Hi, Alex. Great. Hi there. How are you? Okay. Great. Two questions. First one is just, you know, I know that we're expecting maybe a little bit more detail from the EU on their REPowerEU proposal, I guess, in the next couple weeks. You know, from your perspective, what are the most important things that you're looking for from that, if anything? That would be the first question. Maybe the second one is, you know, one of your renewable PPA providers is also talking or has announced kind of a broad integrated sort of hydrogen project down on the Gulf Coast, involving midstream and renewables and that. Just, you know, kind of conceptually, you know, kind of what role and what things are you looking for, you know, for the perspective of maybe either participating in that or similar types of projects and maybe how, you know, midstream, you know, kind of assets and things like that might, you know, might kind of be written off over time? Sanjay, you wanna talk about the, you know, the support and the relationship with our PPA provider? Yes. Alex, on this, right, I mean, I think, the way we look at it is this is such a massive market. There are times when, we're gonna be working together. It's almost like the co-opetition kind of an approach, if you would, right? Where you're cooperating at times, and maybe there are times where you might be competing. Look, we have a really, really attractive PPA with this, particular partner, especially in the, Texas area, and we're pretty pleased with that. Look, hydrogen is a massive market and, you know, again, we also do have additional component that we can provide to some of these partners as well. Please don't read into this, but we're certainly in a position to be able to provide them with additional solutions if you would. Like Andy just talked about it, there's not a lot of players with the kind of electrolyzer capacity like we are. There's not a lot of folks that can provide liquefiers like we can or the liquid hydrogen tankers or the on-site storage. Nothing to share on this call at this point in time. Look, we're not surprised that there are others that are coming into this production of the green hydrogen, you know, from a liquid or the perspective. We'll probably expect to see more and more of that, and that's only a positive for the industry because it will help grow more apps, which is the business we're in as well. You know, that's how we think about that particular situation. Great, thank you. Oh, yeah, on the European side. Yeah, on the European side, I think the key to us is the support for low-cost renewables. Quite honestly, this is what we've been working with European governments on, is low-cost renewables to support deployment of green hydrogen. That, to me, Alex, is kind of the key to success. The reason is really kind of clear. You know, about what, 75% of the cost for generating green hydrogen really tied to the cost of renewable power. Anything that supports renewable electricity that can be used for generation of green hydrogen, we believe is critical, Alex. Great. Thanks so much. Okay. Thank you. Our next question comes from Biju Perincheril with Susquehanna. Please state your question. Hi. Good afternoon. Hi, Biju. How are you today? How are you, Andy? I'm doing good. Very good. Hey, a quick question. Thanks for breaking out all the revenue contribution from the recent acquisition. The question is, as you sort of ramp your hydrogen production capacity, is there still going to be an opportunity for third-party sales from the equipment from Joule and ACT, et cetera? Also, can you give us a sense of how much that could be like in your $3 billion target for 2025, how much of it could come from sort of these sources? The answer to the question is absolutely yes. I'm gonna let Sanjay, who overlooks those activities, give you his thoughts about how he sees that as part of our 2025 revenue. Yeah. Biju, short answer is, we absolutely expect a lot of third-party sales from both of those businesses. Look, we're here to support the energy transition, right? We're here to help and work with many companies out there because it's a massive opportunity, number one. Number two, you know, with what we could do from our Applied Cryo, now Plug Cryo business, you know, we can certainly provide liquid hydrogen tankers, on-site storage as well. There is also additional business for liquid oxygen, liquid nitrogen as well as a part of that business that we do. Look, I mean, I think, you know, we have not obviously given what that could be as a part of that $3 billion number. We just have to have similar growth rate, like kind of the growth that we're talking about for the Plug parent as a whole. That's one. Second, on the liquefier side, since we acquired Joule Processing, now Plug Process system, we believe we have one of the most efficient energy consumption for the liquefier. We also have partnership with the likes of Atlas Copco and Fives that allows us to control supply chain better, both for our own internal consumption as well as a third-party sale. Now, when you think about could those business be between $400 million-$500 million in 2025, that should – that does not sound like a stretch to us at all. Got it. That's helpful. Just a quick clarification. The 500 tons per day of capacity you talked about for 2025, is that inclusive of all-in volumes, or is that gonna be separate? Yes. Is the answer. We're very happy obviously with this partnership, and we're just getting started in one location here. You know, hopefully more to come. You know, obviously very like-minded companies. We're thinking about hydrogen economy in a very similar way. This certainly gives us a lot of flexibility and a lot of diversity, if you would, in terms of how we expand and get to that 500 tons. It certainly could get us to a number higher than that as well. All right. Gives you a lot of leverage in your PPA discussions as well as. I'm gonna take your word on that one, Biju, and I think I'm gonna use that going forward as we're negotiating the PPA. I agree with you. Thank you. Appreciate it. Thanks, Biju. Thank you. Our next question comes from Craig Shere with Tuohy Brothers. Please go ahead. Hi, Craig. How are you today? Good, thank you. Thanks for taking the question. Oh, no problem. I've got a multi-part on fuel, but some of the answers might be very brief. Sure. If we're looking at 70 tons per day green hydrogen at the end of the year, and you wanna keep 30% flex capacity, that sounds like you're roughly balanced to meet maybe 50 tons per day internal need. Maybe that means that you're not under pressure to find pure play just fuel offtakers like at refiners, utilities and others, till maybe next year. That's kind of the second part of the question. The third part of the question, are you prepared to share anything about proportional roll-off on your industrial gas supply agreements from 2023 to 2025? Then I noticed your Walmart announcement, and it sounds good, but I'm a little confused. Do you need formal agreements, or can you just naturally swap in your own green hydrogen in lieu of third-party industrial gas supply? My final part to the question is, at what point can you think about starting to secure very low-cost project debt on these completed green hydrogen plants? Wow, a lot of questions there, Craig. You're the last one of the day, but not the least. I'm gonna take the Walmart one. Okay. I'll let Sanjay take a few of the others, and we'll figure out what we've left open. When I look at the Walmart one, it reminds me of 2008 when we started with 63 forklift trucks, which eventually became, you know, call it 9,500 today, call it 10,000. That's really just the start. The focus is on material handling. The focus is on providing stationary power. The focus is for auto vehicles. This is just to get started in their distribution centers, and it is an expansion of what we're using today. If you think about 20 tons, that probably supports, call it 80, 90 distribution centers. We're at 45 today, so there is an expansion there. I think what's really more important is it's just a start on Walmart's journey to reduce their suppliers' carbon footprint and their carbon footprint by 1 gigaton by 2030. Sanjay, you want to talk about some of the other items that Craig brought up? Sure. Craig, on the first one, question about our demand versus what our capacity is going to be and not needing to necessarily look for a lot more offtake, you're right. Having said that, keep in mind, right, like very similar to the traditional energy industry, there is always going to be some sort of a swap agreement. Look, we wanna continue to be, you know, buying from some of our hydrogen suppliers right now on a long-term basis. Pricing has to be right. We might be selling them some green hydrogen. You know, and they might be selling us some. You know, they might continue to sell us some of this gray hydrogen here in the near term, right? I wouldn't say that we will stop buying hydrogen from some of our existing supplier. One caveat is the price has to be right. That's the key, 'cause we gotta keep focusing on driving the hydrogen economy forward. Now, on the second piece of, when do these contracts roll over, and I hope you can appreciate the fact that we do not wanna get into that level of granularity, but we will share with you that typically these contracts are for about five years. That's typically how they're structured. You know, but beyond that, I think at this point in time, we probably don't wanna get into too much granularity. What part of the question did I miss? You hit it almost all of it. The last question was, at what point can we start securing very low-cost project debt on completed plants? Sure. I'd say, as you know, it's gonna be very similar to any other renewable assets, if you would, right? I mean, I think, you know, today, you know the cap structure for solar, you know the cap structure for wind. If there is a production tax credit for this green hydrogen facilities, you could expect that there'll be similar cap structure like that, depending on the structure of that production tax credit, right? Now, having said that, fast-forward a year when the plant is fully ramped into generating cash flow, you know, we feel quite confident that it could do back leverage. We can probably use some sort of a green bond against these plants, and that's certainly a part of the calculus for us in terms of how we plan to recycle capital as we continue to build out this green hydrogen generation network, both in North America as well as on a global basis. Great. Thank you so much. Thank you. Thank you. There are no further questions at this time. I'll turn the floor back to Andy Marsh for closing remarks. Sure. Well, thank you everyone for joining the call today. When I look at, we are building out the hydrogen ecosystem, we're doing it. We're building the plants. We have the trailers to deliver the products. We have the customers, which is critical. We have the electrolyzers. We have the fuel cells. No one's in a better position to take advantage of this trend, for the hydrogen economy for the coming years. We're excited. We're going to deliver our $925 million this year, and I look forward to talking to everyone on the second quarter call. Thanks, everyone. Thank you. This concludes today's conference. All parties may disconnect. Have a good day.