Greetings, and welcome to the Plug Power first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Meryl Fritz, Marketing Communications Manager. Thank you, Meryl. You may begin. Thank you. Welcome to the Plug Power Q1 earnings call. This call will include forward-looking statements. These forward-looking statements include, among others, statements of expectations, beliefs, future plans and strategies, anticipated results from operations and developments, and other matters that are not historical facts. We intend these forward-looking statements to be covered by the Safe Harbor Provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 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 to not unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of future performance or results. Such statements are based upon the current expectations, estimates, forecasts, and projections, as well as the current beliefs and assumptions of management and are subject to significant 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, the risks and uncertainties discussed under Item 1A, Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31st, 2023, subsequent quarterly reports on Form 10-Q, and other reports we file from time to time with the Securities and Exchange Commission. These forward-looking statements speak only as of the day in which these 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 Power's CEO, Andy Marsh. Thank you, Meryl, and good morning, everyone, and thank you for joining us today. This quarter has been pivotal for Plug. As we continue to execute on our mission to drive the green hydrogen economy, we are focused intensely on enhancing our cash management strategies and accelerating sales growth. These efforts are crucial as we now navigate through the recalibrations necessary for long-term sustainable growth. Our strategic decisions this quarter are designed to solidify our leadership in the green hydrogen economy. We've made significant strides in scaling up our operations. Our hydrogen generation network has been particularly, has seen substantial growth. The production facilities in Georgia, Tennessee, are currently performing at full capacity, and we're eagerly anticipating the completion of our new plant in Louisiana. This addition will not only boost our production capacity by 15 tons per day, but also significantly reduce our dependency on third-party hydrogen suppliers. Building on this momentum, we're planning the development of up to six additional hydrogen plants across the United States. This expansion is critical for meeting the demand for green hydrogen as industry and transport sectors seek sustainable energy solutions. The strategic placements of these plants will help mitigate logistical challenges, reducing the cost of hydrogen delivery and enhancing our competitive edge in the market. Plug continues to advance the pending loan guarantee from the Department of Energy and awaits the conditional commitment approval announcement. This program is expected to bolster the build-out of Plug's liquid hydrogen facilities throughout the United States. Commensurately, the company has started a process with advisors to complement our anticipated DOE projects with project equity investors, tax equity investors, and project finance partners to finance the build-out of the plants. Our strategy, expanding partnerships and securing new deals, has continued to bear fruit this quarter. The extension of our partnership with Uline and Skanska and securing a substantial deal with the top U.S. automotive manufacturer are a testament to our robust business model and our ability to deliver comprehensive hydrogen solutions that meet diverse customers' needs. These partnerships not only demonstrate our market leadership, but also reinforces the trust that major industrial players place in Plug to support their transition to sustainable energy practices. In Europe, our significant expansion efforts are highlighted by the commissioning of 20 PEM electrolyzer systems at sites throughout the continent, representing the largest build-out of its kind in the Western world. This is a key part of our strategy to meet the rapidly growing demand for our products globally. Pivotal component of our strategy for electrolyzers is the Basic Engineering and Design Package, which currently encompasses projects totaling approximately 4.5 GW. These BEDP contracts are just not a testament to our technology and market leadership. They represent potential future sales that could be transformative for Plug. By facilitating our customers' journey to final investment decisions, These packages can significantly shorten the sales cycle and enhance our ability to lock in substantial long-term contracts. As we continue to advance our technology and increase our project capabilities, Plug is enhancing its footprint, not just in the U.S., but globally. This strategic expansion aligns perfectly with our mission to lead in the green hydrogen economy, ensuring that we remain at the forefront of delivering innovative and sustainable energy solutions. Look, despite our successes, we have faced challenges, particularly this quarter, with equipment margins due to strategic inventory reductions and this quarter of product sales. In response, we've implemented a series of restructuring measures aimed at reducing costs and improving efficiencies. This includes headcount reductions and operational considerations, which are difficult but necessary decisions to enhance our long-term sustainability and profitability. Looking to the future, Plug is poised for substantial growth. Foundations we're building today through operational excellence, strategic expansion, and a real focus on robust financial health, are designed to solidify our leadership in the hydrogen market. As the world continues to turn to sustainable solutions, Plug will be ready to meet and exceed the demands of the growing industry. To conclude, we remain deeply committed to our strategic goals and are optimistic about the opportunities ahead. Now, Paul, Sanjay, and I are ready to take your questions and provide further insights into our journey. Thank you. We will now be conducting a 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 your line is in the question queue. You may press Star 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. One moment please, while we poll for your questions. Our first question comes from the line of James West with Evercore ISI. Please proceed with your questions. Hey, good morning, Andy. How are you? Okay, James. Good morning. So we're a few more months into your pricing strategy adjustments, and curious, you know, initially, how that went, how it's going now. I suspect your customers will kind of understand that the pricing needed to be adjusted, but I'd love to hear your kinda thoughts, or your views on how that process has gone so far and what we should expect over the next several quarters. So, James, you know, our primary focus, first and foremost, has been looking to increase the value of the price of hydrogen and also the price of service. When we look at, you know, our top eight customers, six of those customers, we have come to final written contractual agreements, and the two remaining customers, we've actually at the point where we're down to final steps in the negotiations. Okay. We expect that, you know, the hydrogen business will be approaching gross margin break-even by the fourth quarter, which will be a major accomplishment. But I think even, you know, and this is broadly with the material handling market, but we've actually learned a lot along this journey about the value we are bringing to customers. And it is why, you know, I expect this during the coming three quarters, that you're going to see equipment sales, and we know where they're going to be for the second quarter, are going to rebound. We feel really good about that after this recalibration process. And when I look at the electrolyzer business, I can tell you that, we have been very successful, in raising prices, 10%-15% as we negotiate and work with the customers. Across the board, it's been a difficult journey, a learning journey, but I think it's been, you know, really beneficial for the long-term success of this business. Okay, got it. And then just a follow-up for me with Georgia, Tennessee online and Louisiana coming online soon, and I think the focus probably shifts to Texas next. But as we think about, as we're getting towards, you know, maybe now or to the end of the year, how much of your current hydrogen supply—I guess green hydrogen supply—that you're providing to customers, are you now and going to be satisfied by year-end with your own production versus, you know, buying from third parties? Yeah. James, I would expect we'll be in the 65% range because of growth this year. Okay. So today, you know, today we're about at 50 tons per day. I expect we'll be closer to 65 tons per day by year-end. We'll have about, you know, 45 tons of our own capacity, and you're right, the next big event after that is bringing Texas online, and that should be late in 2025, and that would bring 45 tons per day of hydrogen. Got it. Okay, great. Thanks, Andy. Thanks, James. Thank you. Our next questions come from the line of Eric Stine with Craig-Hallum. Please proceed with your questions. Good morning, everyone. Morning, Eric. Hey, so, you called out the cost savings measures taken in the quarter. And I know previously you had talked about targeting $75 million in annual cost savings. So just curious, as what you just disclosed for 1Q, is that above and beyond the $75 million? And maybe just some thoughts on, you know, given this path you're going down, margins, profitability, you know, where those cost savings can go, all in. I'm going to turn that over to Paul. Yeah, so a couple things, Eric. One, you know, we, we've made really good progress. A lot of the actions that we had announced and thought about have been completed, and you're starting to see that in the rates. You'll see a full quarter benefit of that in Q2, you know, because it was kind of mid-quarter when some of those were taken. There's also actions that are underway. So some things like rooftop consolidations, you know, some we were able to do fairly quickly, and some will be completed in Q2, and so you'll see some of those benefits start to manifest in Q2 and progress, you know, on into Q3. You know, we've come out of the gate laser-focused on cash management, and across this organization, everybody understands that, you know, cost curtailment and cost downs are critically important. So I'm absolutely optimistic and excited that I'm sure there's more opportunities as we progress through the year that we're gonna continue to find and look to reduce the cost. So, some things are pretty clear, and we're able to act on those pretty quickly, and some things just take some time to work through to figure out what those best actions and activities are. So, I think we're, you know, in a great position in terms of what we announced and in a great position of what we can do incrementally. All right. That's a good color. Thank you. And maybe just follow up, the DOE loan, I know you've had confidence in that all along, but it does seem like your commentary this morning, you know, would maybe take that up another notch. You know, maybe just current thoughts on timing and next steps. Well, look, I think you hit it on the head, Eric. We continue to advance the process with the DOE, and, you know, we're anxiously awaiting the committed approval announcement. And look, you know, it is, you know, if you talk about items we're laser focused on, we're laser focused on it. Got it. And amount, I mean, no changes there. It's just, it's consistent with- No, it- with what you've talked about in the past. It is consistent with what we talked about in the past. Okay. Thank you very much. You're welcome, Eric. Thank you. Our next questions come from the line of Manav Gupta with UBS. Please proceed with your questions. Good morning, guys. It looks like during the quarter, the equipment margins came under particular pressure. There were some improvements in other gross margin, but this is an area where you saw some pressure. But just trying to understand the outlook of it, do you expect this to improve based on some of the other commentary you have made? But generally, what's your outlook for the equipment margins, and do you genuinely believe that, like, 1 Q could be the bottom here in equipment margins? Yeah, absolutely. I think, you know, I would say this, you know, we've been pretty consistent that, you know, scale and volume make a big difference, and so when you look at the level of equipment sales in Q1, you know, those are... That was a lower level that, you know, those are situations that don't drive the most opportunistic, you know, leverage on labor and overhead. We've got the facilities and the capacity to produce substantially more than we're shipping at the moment, so there's nothing but upside. And if you look at our forecast, you know, Q1 is, you know, as we've been consistently sharing, is always, you know, the lowest quarter of the year, and it's in that, you know, 10%-12% range of our sales. And so if you think about that mathematically, that means we're gonna be, you know, shipping a substantial amount more and recognizing a lot more in the balance of the year. So just volume alone is a big, big benefit, but, you know, even some of the the cost reduction benefits that we announced in the first quarter, you know, those, a lot of those were operational. When you think about rooftop consolidations and headcount reductions, and those will pay dividends as we balance through the year, and we start to realize the full benefits of that. So it's absolutely upside from here. Okay. The second question is, you know, what your outlook for your electrolyzer business, and do you think, you know, once the government absolutely finalizes the 45V guidance, there'll be more people who would know exactly what the guidance has looked like, so they'll be more comfortable placing those electrolyzer orders? So just trying to understand, what's your outlook for the sale of electrolyzers for the rest of the year? I'm going to turn that, Manav, over to Sanjay. But I would highlight, you know, when you look at the activities we have, we're on the ground commissioning 50 MW in Europe today... And there's, you know, that activity in Europe is going to grow and continue to grow. And, you know, we expect that, if I was going to use a crystal ball at the moment, you may even get some in-between guidance in June-July time frame. And I would suspect, at the moment, final guidance at the end of the year. But I'll let Sanjay talk about what he expects as the head of that business in 2024. Sure. So, Manav, I think, you know, you should absolutely expect meaningful sequential growth, as Andy just talked about it, right? We have over 20 systems that's going through site acceptance tests, as well as final commissioning that will start to show up in Q2, they'll start to show up in Q3. And by the way, for 2024, our electrolyzer business is really about executing on a pretty substantial backlog that we already have. Having said that, what you're going to see here is, you know, Andy touched on our basic engineering design package, where we have about 4.5 GW of that basic engineering design package. Some of that is in the US, a lot of that is in Europe. We also have pretty big opportunity on that basic engineering design package in Asia Pacific. Many of these customers, right, some of them are going into final investment decision by the end of this year. Some of them are going to final investment decision by early 2025, and you will start to see, you know, the basic engineering design package convert into backlog. And the good thing for us with that is it not only provides us with a substantial growth as you start to look beyond this year and into 2025 and 2026, it also makes this business very, very predictable. We can manage costs, we can manage working capital. We're working off of a very substantial backlog. So when you look at that and then think about also a concept from cost reduction perspective, right? Facility consolidation, things we are doing to reduce the overall cost of our stack. So as you go into the end of this year, you should see pretty substantial change in the margin profile for that electrolyzer business, and that trend will only go to the right and keeps getting better as you go into 2025 and beyond. That's how you should think about it. Thanks, Sanjay, for a very detailed response. Thank you. Of course. Thanks, Manav. Thank you. Our next questions come from the line of Bill Peterson with JP Morgan. Please proceed with your questions. Hi, good morning, everyone. Thanks for taking the questions. Morning, Bill. We'd like to talk about the full year and also the first quarter. It did, it did come in light. You did reiterate, you know, one third in first half, two thirds in the second half. I believe you had, you had previously expected to drive year-on-year growth for your overall business in 2024, perhaps even double-digit growth. I think that you were expecting originally maybe around 15% of full year revenue would land in the first quarter. That would infer the quarter was lighter than expectation. I guess first off, do you still expect to be able to drive year-on-year growth this year for the business overall? If that's the case, that implies a pretty large step up in 2Q revenues in a 1/3, 2/3 scenario, maybe some of which is driven by what Sanjay just said. But- Yeah. You know, were some of the revenues in the first quarter that they didn't show up and they're showing up in the second quarter? What's driving the step up in, in the second quarter, and more importantly, what's driving the step up in the back half of the year? If you could parse by applications and energy and so forth, that'd be helpful. Sure. So Bill, let me take a step back, and I'm gonna hand it off to Paul. We do expect, and I've, as I said on the last call, growth this year. It certainly, you know, it'll be, you know, we would expect that, when we look at the numbers, that, by the first quarter, you know, into the second quarter, we expect to be about 33%. So I think the analysts have us out there, and the consensus the analysts have today, when we review it in general, we think they're about right for the second quarter. And, so I think what the street's guiding for the second quarter is in line with our revenue expectations. Paul, maybe you can talk about... I know, you know, part of it's the commissioning of the electrolyzers, which kind of slipped from the first to second. I know there's one material handling customer had three sites that were slipping into the quarter, but you may want to talk about that. Yeah, and I guess I'd just preface it by saying, if you look at the math and you know, assume, you know, Q1 being, call it, you know, 11%-12%, 10%-12% in that range of the full year, mathematically, that infers the full year absolutely is gonna grow off of last year, as an example. So that, that's for sure. And as Andy said, there's, you know, you know, the 5 MW system, we're really excited about that deployment, the pipeline, the backlog, the traction that we're making, you know, getting the customers to deploy that and working through those startup activities. That just provides a learning wheel that we can accelerate deployments as we balance through the year with all of those that we have in the pipeline. So, you know, those will come in in Q2, and there's a lot of activity for what will happen in the second half. You know, if you look at the second half, I mean, you know, two-thirds of our sales as we inferred, and you have the typical seasonality with material handling, and then you have the added compounding benefit of the scaling of these new things that we're doing with electrolyzers and liquefaction and new cryogenic liquid hydrogen products that are, you know, starting to get traction. So it's the those are the real compounding factors that drive that second half effect. You know, I think as we feel pretty good about Q2, and we feel really good about the full year. ... Sanjay, maybe you can describe the electrolyzer business, because you have the backlog there, as well as you in your, most of your cryogenic business. So maybe you can touch on that, and I'll touch a little on application. Absolutely. So, Bill, I think one of the key things here that actually did have an impact in Q1, as Paul alluded to, right? So, you know, all this 5 MW system that we're going through commissioning process, rev rec happens when you actually do a full site acceptance test, right? A lot of that is on us, some of that is on customers, and there's a lot of factors you got to navigate through. And we've done that, right? Now, I think as we sit here in Q2, you will actually see a lot of those get completed, and based on the number of systems we're working on, you should anticipate that there's gonna be a pretty big sequential jump in that revenue going from Q1 to Q2, then to Q3, and that's what's going to really help the energy business sales. Second piece here is also our cryogenic business, where, you know, and let me break that into two pieces here, right? As you think about our second half of the year, for our cryo business, you should expect a meaningful growth in our mobile refueler. You should also expect meaningful growth in our liquid hydrogen trailer business, which obviously has a higher ticket item, as well as a better margin profile, giving you a much bigger second half in that business than even in the first half. And finally, on the liquefaction side of our business, we anticipate new awards here, but these are big-ticket items as well, right? So I think when you-- the way you wanna think about it, meaningful revenue contribution happens really in the second half of the year, not so much in the first half of the year, and that's why this 1/3 and 2/3 is the reason why we feel pretty good about based on sort of the high-level growth number we're talking about for the full year. Andy? Yeah, and on the application side, Bill, we just got done a board meeting, and I can tell you, Jose Crespo, who runs our application business, feels that, you know, you know, we don't include hydrogen in that business, but we feel pretty confident, probably just like, some of the cryo business and the electrolyzer business, that the funnel's there, the orders are there, and that 35% of our revenue will be associated with applications. Most of that material handling customers, mostly people we've done business with for a long time. So, I think in general, you know, this was a rough quarter recalibrating customers to get through, you know, not doing PPAs anymore, so it took a little bit more time to get things closed, working through the price increases. But, I feel good we've come out of it, Bill. So, and, you know, so we feel we're, you know, we feel that pretty good about the year, and as Paul said, we're probably at 10%-12% of the year, and that we've always said we expect revenue to increase this year. Yeah, yeah. Thanks for all the, the color and insights there. On the, on the, on the DOE loan, conditional loan approval, this, this looks like this has been shifted out by, you know, around, you know, 1.5 months. I thought, I thought prior expectations were the end of March. So I guess, what is your latest expectation around timing, the feasibility of securing a loan this year? I, I guess also even, especially ahead of a presidential election, and based off the press release, it, it sounds like you're thinking the, the DOE, the process could be waiting on additional, I guess, partners or project, equity investors. If you can explain more of you know why the delay and what the next steps are and what we should assume and to think about for the full year—for the year on this DOE loan. So, Bill, I may have confused you on that writing. That activity with equity investors is separated completely from the activity with the DOE. It is activity we started as we think about making sure those projects are fully funded. Look, I remain really excited, and it can, you know. You know, I can tell you that the conditional commitment application is moving forward. The momentum is good, and boy, we really do hope to share more news soon. Thank you. Our next question has come from the line of Colin Rusch with Oppenheimer. Please proceed with your questions. Thanks so much, guys. You know, on the material handling side, could you talk about the trend lines on diversity of customers? How many more customers are you guys seeing? Are you seeing folks scale up within that business? Just trying to get a sense of what that opportunity set looks like now. Yeah, that's a good question, Colin. I can tell you that we are doing two customers for the first time this coming quarter. Both of them probably have distribution centers combined, which are in the 150 type distribution range, center range. Brand new, brand new activity. Our penetration in the auto market continues to be really good. And you know, we have worked through, and as I said, I think our value proposition as we've gone through this price increases, have really shown that there was more opportunity for Plug. And you know, I would expect... I know what's in Jose's and Tim Terrill's funnel. You'll see continued customer expansion this year, and the next three quarters, you'll see us back to normal operation in material handling. ... Thanks so much. Then my follow-up is for Sanjay. You know, as you guys are looking at the opportunity set for the electrolyzer business and doing site selection and looking at the underlying cost structure, can you talk a little bit about your strategy around procurement of power? You know, obviously, there's a lot going on in the power markets right now with interconnection as well as, you know, data center demand, you know, electrification. Just wanna understand where your thought process is right now on that procurement. I'm going to hand that to Sanjay, but what you say is actually a big opportunity for our stationary business, Colin. That's, that's right. Go ahead, as well as our hydrogen business. But go ahead, Sanjay. So, Colin, I think as it relates to our customer mix, right? I think, majority opportunity, if we were to think about this, basic engineering design package, right, that we talked about, a 4.5 GW, a lot of that is really going and displacing gray hydrogen in the refining industry to make it green hydrogen. That's some of the opportunity. Second set of the opportunity there that you're seeing is really on sort of like sustainable aviation fuels, if you would, right? Where they are really identifying a location where they can get access to low-cost power in the European market. So you can imagine, right, where you have a lot of hydro, where you can actually tap into some of the wind electricity with the low cost. That's where we're seeing some of this basic engineering design package work. Another big opportunity in places like Australia, where you're actually talking about big solar farms, low-cost solar, and this is really more of a green ammonia opportunity to, in fact, export into the Asian market, right? So one of the good things here, Colin, is as a company that now has the largest PEM electrolyzer running in the Western world, we're actually able to also work with our customers on things we have learned, what, you know, challenges we went through, how we can help them with that. And then we're looking at the customer's win. You know, who are the ones that actually have, as you rightfully pointed out, source of that power, source... You know, the outlook for that offtake, whether it's going into the refining industry or going to the green ammonia market, going to the sustainable aviation fuel, you got to have the power, you got to have the land, you got to have the water, and that is what really gets you to that final investment decision, right? So, you know, and again, look, working hand in hand with them as a part of this FEED study, really puts us in a very unique and a strong position to be able to collaborate with them, and that's clearly the key criteria we use. And at the end of the day, Colin, it's really about selling value here for our customers, right? Bringing all that to the table, and it's not just about price versus cost. Are we bringing value that allows them to have that attractive levelized cost of hydrogen, thereby a very attractive green ammonia, as well as opportunity to be able to play in the refining industry? Excellent. Thanks so much, guys. Thanks, Bill. Thank you. Our next questions come from the line of Chris Dendrinos with RBC Capital Markets. Please proceed with your questions. Yeah, good morning. Thank you. Morning, Chris. I guess I wanted to start out—Morning. I guess I wanted to start out here just on the cash burn a little bit. And, you know, there is some decent sequential improvement, as far as, you know, limiting the cash flow from ops out spend. So, any color you can give around the cadence for the rest of the year, should we expect kind of continued improvement from where we sit today? Just how should we think about that? Thanks. Yeah. Yeah, we're, you know, obviously excited that we, you know, it's close to 40% reduction year-over-year in the first quarter. You know, we've talked about the full year being in that 70% reduction, so. And, and the reason why and that infers the second half is even bigger, right, in terms of that reduction. And the reason why that is, is for a couple different reasons. One, the CapEx will be down year-over-year overall, but for the CapEx that we did plan for this year, it's a little bit heavier concentrated in the first half, but that'll dissipate a lot, you know, obviously, in the second half. Second thing is, is that, you know, we anticipate, and you already see it, you know, with, with the working capital getting better in the first quarter, but we anticipate even substantially more leverage opportunity and inventory in particular, in, in the, in the coming quarters and, and even more so in the second half. So that's, that's a big contributor. And then the third thing is, you know, improving the margins and improving the cash flows in the business. And so scale will make a difference as we, as we, you know, with two-thirds of sales half in the second half. But the other factor that will make a big difference is the cost downs that we're, we're driving. So, you know, we'll start to see more and more of the benefits and some of the actions we've taken in the first quarter and what we're completing in the second quarter, and then the impact of the fuel. You know, it's pretty, pretty impactful in terms of the price increases and turning on these facilities that we're turning, which again, will start to have benefit in Q2 and even more benefit in Q3 and Q4. So those are the drivers that, you know, we're laser focused on to improve it. And, you know, we're still, you know, optimistic that we're gonna get to that 70% reduction year-over-year. So you should just definitely see continued progression as we move through the year. Got it. Thank you. And then I guess maybe just shifting gears here a little bit to the BEDP, 4.5 GW of opportunity. You know, I know in the past, you guys have commented that the conversion rate on that, on that type of activity is extremely high. I guess my question is, you know, what portion of those projects should we expect to kind of go forward? I guess maybe historically, you know, as you do the BEDP activity, you know, what's the conversion rate on just the project actually, you know, moving forward into development with it? Thanks. I think it's to put a precise number there, I think, you know, it's... Look, we probably want to go through some more time here, but let me give you an explanation of how we're thinking about it, right? So, when we do a basic engineering design package that really gets a customer to a point where they can actually now go and do a final investment decision. That's the key thing here, right? They got to get to their FID. And the key for them to get to their FID is really going to come down to the entire facility. We're doing a very significant piece of that FEED work related to the electrolyzer. You know, we are obviously pretty much involved with the customer, thinking about right design, architecture, right? What it's really going to come down to is, for them, source of power, you know, for them, offtake in terms of what product are they actually, in fact, making from a hydrogen derivative standpoint. As we look at our BEDP funnel, we feel very good about some of them getting into the final investment decision this year. Many will get into final investment decision in 2025. So it's really all about building that base of business and that backlog throughout this year into next year, and really puts us in a position where it becomes a very substantial growth business for us, not just for one or two year, but for many years to come, and really a great visibility when you think about it, for the till even really the end of this decade, if you would, right? So that's how we think about it, rather than really trying to handicap 80% will move or 70% will move. We're really working with the customer in terms of making sure that they can get to their final investment decision, so it ends up going from BEDP, in fact, new award bookings, and therefore, the backlog to really support our growth in the business. One of the items, Sanjay, that I, why I see this so positive, because it really is part of the sales cycle, and you have the customer paying you to work with you. Hundred percent. - which shows a level of seriousness about their plans going forward. Hundred percent. And that's probably, you know, from a business point of view, is one of the real values I think we're getting from these engagements. 100%. Yep, absolutely. Understood. Thank you. Thank you. Our next questions come from the line of Craig Irwin with Roth. Please proceed with your questions. All right. Thank you. So most of my questions have actually been answered, so, you know, I want to step back into the bigger picture, right? You have some really exciting pedestal customers in the materials handling market, you know, people using hydrogen forklifts. I guess more than 40% of the groceries in America move around on your hydrogen forklifts. And, you know, I assume that there's several other companies of similar character to your pedestal customers that are, you know, evaluating the technology, maybe have small implementations and, you know, represent interesting longer-term opportunities. Can you maybe sort of scope out for us what you're saying to those customers now with your repositioning of this business? You know, do you feel that you will be adding pedestal customers over the next few years? And you know, anything else that you think would be useful for us to understand the longer-term trajectory after we get through this short-term repositioning? So Craig, this is Andy. Good morning. First and foremost, the answer to your question is yes. But, taking it to a higher level, I can tell you we are doing deployments with two customers this quarter who have 150 warehouses and distribution centers, you know, who we have never done business before. So I-- you know, so that is, and I can tell you there is a active, active sales activity going on, that we expect material handling business to get back to normal, starting in the second quarter and continuing throughout the year. You know, I can tell you at, you know, at MODEX, which is the big material handling show, we probably had as much interest from new customers as we've seen any years. So, we're especially here in the U.S., you know, we weren't. You know, had to go through this readjustment, we would have been even more focused in the first quarter. But, boy, we're not, we actually expect we'll be naming names over the coming year. So, the answer to your question is yes, Craig. And, you know, look, when I look at our business, you know, if you want to take a step back, Sanjay's activity in electrolyzers will become our dominant business probably in 25. And, you know, that because when you look at the growth rate and the amount of activity he has going on. But material handling will remain a substantial portion of our business, and it'll, you know, remains a driver of our hydrogen business. As I mentioned earlier in the call, you know, by the end of the year, we expect to be using 30% more hydrogen than we did at the end of last year. So, there is growth. Luckily, because the value, you know, part of what we've gone through here, we've been able to see the value proposition stronger. And, you know, not only is there growth, but we think, with hydrogen, we'll be close to breakeven by the end of the year. And so, we see, you know, significant expansion of the business. Excellent. And then, just two quick questions around green hydrogen. Do you maybe have a cumulative tons or some other, you know, metric that you could share on the production from Georgia and Tennessee? ... you know, that would be really helpful for people to frame out, you know, how that ramp has gone. And then on green hydrogen, you know, $18 a kilogram, you know, I've talked to different people in the market, and there are suggestions that you can get quite a lot more than that for green hydrogen. So there may still be a little bit of a, little bit of an arbitrage if you, if you can sell that in the open market. Can you, can you maybe- I'm going to take the first part, then I'm gonna let the analyst here beside me take the second part of that question. Sanjay, no problem. I know. I know. I know. So, you know, as an operation guy, we're running Tennessee and Georgia about at 80%-85% at the moment. When I look at the... You know, we've been ramping the-- you know, we can't get 100% capacity out. You know, logistically, you're probably, you know, you know, just from an optimization point of view and delivery and logistics, you know, we'll probably be running that 85% pretty much to 90% all quarter. That's how we're kind of looking at it, Craig. We're not, we're not looking at 100% capacity. But when I look at the flows the last three or four weeks, that's about where we are. So, Sanjay, maybe you can talk about the arbitrage opportunity and how you're thinking about that. So, so, Craig, you're absolutely right about that, right? Given, I think, what we have done here in Georgia. So, but look, our mission always has been, make sure that you keep driving the price of hydrogen to a level where it's a great value proposition for our end customer, and not try to be more opportunistic, if you would, right? Having said that, given our production capacity, given some of the discussion we're having, so there is clearly an opportunity for us to do a spot sale. We are having those discussion, live discussion with many players in the industry as we sit here right now, given that, you know, Georgia is now at, as Andy talked about it, at the capacity that it is. Tennessee is running at, you know, about 80%-85% capacity, and we've got Louisiana coming online. We know what we need internally, we know what's available, and those discussions are having. And, your logic there is absolutely a right one, and on this call, I probably don't wanna quite get into the exact pricing number, but your point is very well taken. And yes, there is an arbitrage opportunity, and that should absolutely help, especially as you think about Q4 of this year, really helping margin, growth, revenue, and everything for our fuel business. Great. Well, congratulations, guys, on some significant progress in a difficult period. You made a big difference in a number of items. Thank you, Craig. Thank you. Our next questions come from the line of Chris Seng with Wolfe Research. Please proceed with your questions. Hey, good morning, guys. Thanks for taking my question. Morning, Chris. I wanted to just follow up, Andy, on a previous question clarifying the DOE loan. You don't need an equity investor for conditional commitment, but would you need investors or partners to reach a financial close? No. All right. That's an easy- That was easy. That's an easy one. Sorry, Chris. Yeah, that's helpful. And then can you perhaps remind us on the timing for receipt of proceeds from the DOE loan upon receipt of the conditional commitment? You know, Chris, you know, when I look at it, we wanna keep you really informed about what's going on and the, you know, exciting development ahead. You know, it's important to recognize we have ongoing progress since we've really been teaming well with the DOE. And, as I said, you know, earlier, you know, we're really, you know, we have great forward momentum, and, on all this, we really hope to share more information soon. All right. Fair enough. And I guess this is my final question: As on the volumes or spot volumes that you could probably sell into, you know, once Louisiana comes online, can you perhaps quantify how much you would be able to sell- Yeah, could take it- customers? Yeah. Thank you. Yeah. Take a shot at that, Sanjay. Based on our ongoing discussion right now, we anticipate it could be somewhere in that 10 tons per day kind of a neighborhood. All right. Thank you, guys. Turn it over. Okay. All right, Chris. Thank you. Our next questions come from the line of Jordan Levy with Truist Securities. Please proceed with your questions. Morning, all, and appreciate all the details. Maybe, maybe for Sanjay here. On the electrolyzer sales side, I think you touched on this, and I, and I appreciate there's a lot of complexity in the sales process and shipment process there. But maybe just to, to take a step back, given some of the commissioning delays and that sort of thing, can you just comment on sort of the overall visibility of that segment, and, and what might give you confidence in that visibility improving through, you know, the next quarter and the remainder of the year? I mean, Jordan, as we touched on this a bit, right? For 2024, this is really about executing on our existing backlog, right? So we are executing on over 25 5 MW system. We have over 25 1 MW system. We are executing on multiple 100 MW large-scale projects. So it's really execute, execute, and execute again, right? So that's the theme for electrolyzer business for 2024. Now, another piece here also is, you know, look, I mean, we are doing a lot of installation. We're operating in so many different countries and continent, if you would, and specification, requirements, all the different things that goes on from the site acceptance tests tend to vary from location to location, and this is something we're learning along with our customers. Frankly speaking, as we're launching the product, getting into this rapid ramp mode, there's been a lot of learnings, and it, some of this have taken a bit longer than we anticipated, which is why we got the Q1. Some of that is shifting into Q2. Some of the Q2 likely goes also into Q3. As we get enough systems installed here in Q2, this also helps us from being able to actually do a transfer of the title to the customer, even before we complete the entire site acceptance test, makes it even easier from the revenue recognition perspective, right? That's why, from a cadence standpoint, we feel pretty good about it. Look, there's a lot of work that the entire team is doing. Very proud of everything that they do on an every day basis to make sure that this is all happening. You should expect that there is gonna be a pretty big sequential growth in Q2, then another one in Q3, and it should really be a pretty meaningful year for our electrolyzer business in 2024. Beyond that, you should also expect, based on this BEDP, new bookings materializing, setting the stage for 2025, 2026, and beyond, as all this BEDP work that we're doing with our customers, working hand in hand, gets into that final investment decision. Got it. Appreciate that. Separate topic, a quick follow-up. On the $40 million in write-downs, you referenced in the release, I know we'll get more details on that in the queue, but, just wondering if we should expect those to kind of continue through the year or anything on that? Yeah. A lot of that is labor and overhead in the plants. You know, when you have lower level of production activities and sales activities, you know, you just don't get the opportunity to absorb as much. And so, you know, there may be a little bit of that in Q2. As we continue to ramp and scale, we expect it to dissipate tremendously in the second half as we you know, move towards substantially more sales activities and more production. There are also another favorable counter to that, is that the continued progress in the cost down. And so you have both effects happening, which is we're reducing costs, and we're increasing absorption by producing more and selling more. I think that you'll see that trend down substantially, you know, as we move through the year. Got it. Thank you all. Thank you. Our next questions come from the line of Ameet Thakkar with BMO Capital Markets. Please proceed with your questions. Hey, good morning, everyone. You've got [audio distortion] on here for Ameet. Thanks for taking our question. Good morning. So I was just wondering if you guys would be able to provide an update on where the cash balance is today, and sort of along those lines, like, if you were planning to provide an interim update on the issuance under the ATM program since the last update at the end of February? You know, just if you'd tap that at all this current quarter. Thanks. Yeah, obviously, we're gonna be filing our queue today, so there'll be, you know, 100 pages of detail that'll have a lot of that in there. But, you know, I'd say, you know, it was roughly—what you'll see is roughly $150 million that we raised. It's disclosed in the queue. And that's where we sit, you know, through today. You know, we... I will share with you, you know, this wasn't part of your question, but I'll share this. We, we're laser-focused on debt solutions. I mean, we, we've been working that conversation for a long time. We've got a couple parties that we're closer to, you know, that than we've ever been under terms that are things that... You know, our, our biggest challenge today has just been in finding terms that we feel like are, are meaningful and, and helpful for us and where we're going. But these are two parties that, you know, we, we feel extremely well about and have done a lot of diligence and know them very well. And, you know, we'll see whether that manifests into conclusion. But, you know, that's our primary—that has been and it continues to be my primary focus, is finding debt solutions that can fund the balance of our firm, which, you know, if you do the math, it means we, you know, in terms of the total context of, you know, the 70% reduction off the last year, in terms of what we need, you know, we're more than halfway of that capital sourcing. So, you know, the need will start to dissipate a lot, which is helpful, but—and progress that we continue to show is putting us in a better and better position for sourcing that capital. So, hopefully, that helps provide a little bit of color on how we think about it. Yeah, that's great. Thank you so much. Thank you. Our next questions come from the line of Andrew Percoco with Morgan Stanley. Please proceed with your questions. Great. Thanks, thanks so much for taking the question this morning. I guess, you know, my first question's a little bit higher level and coming back to, I think, Colin's question before on just power procurement strategies, and I think I've asked this before, but, you know, the market seems to be evolving pretty quickly. AI power demand, you know, there's a lot of demand for clean power. Seems like we're pretty constricted in terms of how much supply we can bring to market, at least in the U.S. You know, your business is very much dependent on low PPA prices. So that supply-demand imbalance has been pushing up PPA prices, at least in the U.S. I'm just curious, can you just provide a little bit more context in terms of how you're thinking about power procurement for your additional green hydrogen facilities in the U.S. beyond, you know, Texas and New York, which obviously already have offtake agreements signed? So- Go ahead, Sanjay. Hey, Andrew, how are you? So look, I think we've actually had this conversation on our last call as well, right? So this has obviously been very core to our strategy in terms of identifying the location. As you can imagine, you know, it's gonna be really region by region basis, right? In terms of where do you wanna go? How do you wanna, you know, where do you wanna put the plant? When we think about building this green hydrogen generation network, not just the plant, but the network in North America, we've always said we want to go to a location where there is going to be either an existing player we can work with, that's pretty far along from a development standpoint, that can provide us with that green electron at a price where economics makes sense, right? And in that green electrons, you should think about, obviously, solar, wind, complemented with nuclear and hydro. That's how we think about it, right? And today, as you rightfully pointed out, Georgia, pricing's looking pretty attractive for us. New York, you know, we're getting a lot of hydro allocation for that. Texas, I'm glad we signed the PPA when we did, based on some of the comments you're making. So, you should think about this as like, you know, we're looking at the West Coast, where we believe that you can actually get some hydro as well as solar power in terms of the location of where we build the next plant from a network standpoint. But we're also looking at an opportunity in the middle of the country, where you might be able to access low-cost, attractive nuclear power. We're also looking at somewhere between that middle of the country and the West Coast, where they are really doing a lot of solar, wind development as well in that region. Don't be surprised if there is a plant number 2 and 3 in Texas as well. We can obviously always expand our existing footprint and the presence in Georgia as well. But look, I mean, I think on this power pricing, given everything that's going on, you are right, there is probably some inflationary pressure here. But let's not forget, right, as the supply chain comes back in line, as the rates do what they do, levelized cost of electricity, it's not just one-faceted, you know, one-faceted situation, right? You got a variety of different things, and directionally, it should continue to go down, while there might be some disruption on a short-term basis. This is a long game at the end of the day, right? If there is a situation where the power prices went up for the next six months, you know, we will more likely wait to make sure that it is normalized before we really go down the path of doing anything. But today, for us to accomplish what we're looking to accomplish, we certainly have tentacles in a lot of different locations where we don't feel like there is any need to change our strategy in terms of what we're trying to do. Would you like to add anything to that? Yeah, I would just say that, you know, if you listen to Craig's comments and questions, you listen to, you know, what the price we're paying in Georgia, what the price we're paying in Texas, what the price we'll pay in New York, I think it's incredible differential advantage that we already have these contracts in place to allow us to do future, you know, for our future expansions over the next couple of years. So I, I actually think it makes me feel pretty good. I agree, Andy. This is one of the key benefits of being a first, first move. Yeah. Got it. Understood. I guess just to follow up on that, do you have any excess power supply kind of banked already or transmission access banked already, or for additional projects beyond Texas and New York? Or would you be kind of starting from scratch on those additional facilities? So we've been in this development journey now for over three years, Andrew, right? So, nothing is really for us in terms of what we're thinking about the new build and the new opportunities starting from scratch, right? Now, having said that, have we secured a PPA for opportunity in the West Coast? Look, I mean, this is, depends on what kind of power you're looking to get, what kind of opportunity you're looking to get, right? You can think about California, you can think about Arizona, right? Arizona is probably the likely location where, you know, we're really trying to figure out what's the best model that works. So, like in case of Georgia, we already have additional power allocation if we wanted to expand that capacity. Texas, you know very well, there are reasons in Texas where you can still get pretty attractive renewable electricity, right? So, you know, nothing is from scratch, but again, the level of activity I wouldn't say is completely buttoned up, but it's far along enough that it really gives us a view on multiple new plans where we think what our input cost is going to look like, that really gives us that arbitrage and the profit margin opportunity while continuing to drive the cost of hydrogen down. Understood. Thank you. Sure. Thank you. Our next question comes from the line of Amit Dayal with H.C. Wainwright. Please proceed with your questions. Thank you, and good morning, everyone. Hey, Amit. Hey, hey, how are you? Okay. So yeah, I mean, just have some adjacent questions to things already discussed. You know, starting with maybe the sales mix for this year, excluding, fuels and other services, just on the equipment side, you know, material handling versus other, hardware offerings, for 2024, what the sales mix would look like, and then how that changes in 2025 and 2026. So, Paul, I'll take an initial shot at this, and I'll let you answer. I would expect about a third of our business, so 35% will be material handling, probably about 30% will be electrolyzers, probably 10%-15% hydrogen, and the remaining will be associated with liquefaction. Other cryo business. Other cryo business. Understood. Thank you for that. Okay. Does this remain similar in 2025, or do you see some other parts of the business outside material handling, like, ramping more aggressively? Yeah, I think, Amit, we think electrolyzers will be the biggest part of our business come 2025, and that I would expect our liquefaction business to grow in 25 to be a larger percentage. Okay. Thank you. Uh- And then maybe for Paul. Go ahead. Just maybe for Paul, you know, from an operating cost perspective, Paul, like, what should we sort of assume on a quarterly basis going forward, you know, 2Q onwards for the rest of 2024? Yeah. So from our OpEx run rate, you know, we expect, you know, from last year to this year to be down for a host of reasons, and one of the biggest drivers is the cost reductions that we've been focused on. A lot of the things we did in Q1 will benefit that. So I would... I think a good proxy is about, you know, let's call it $100 million-$125 million on a quarterly run rate, you know, going on through the balance of the year. Okay, thank you. That's very helpful. Yeah, that's all I have, guys. I appreciate it. All right. Thank you, bye. Thank you. Our next question has come from the line of Skye Landon with Redburn Atlantic. Please proceed with your question. Good morning, Skye. Hi, good morning, guys. Firstly, we recently had the results from the EU Hydrogen Bank auction, where we saw what were lower than expected winning bids. I'd be interested to hear your thoughts on the results, because on one hand, it's great to have a low figure, as this kind of provides higher electrolyzer capacities, but on the other end of things, potentially adds more risk to projects reaching FID. So, do you think the subsidy is enough, or would you actually prefer to see a higher subsidy level but with less capacity awarded? And then related to this, if you could provide any commentary on your involvement with any of the winning bids and projects there, that would be great as well. Thanks. I would just say, Skye, yes, we would like to have seen the prices higher. And Sanjay, you've been involved, and maybe you can talk about our customers. I know some of our customers were successful. Yep. Some, some of our customers are, but I think, Andy, this is still an evolving process. Right. So I think. Look, we'd love to talk about, as you rightfully pointed out, right? I think this is an evolving process, you know. Look, I think, like an energy industry, subsidies should be fair, even to every piece of the energy industry. So we want to see how it all unfolds and, maybe not get into the customer-specific thing at this point in time. Yeah, I think that probably is helpful. Yeah. I know that doesn't help you, but, Skye, I think that's the general consensus of us in the hydrogen industry. Fair enough. No, that's, that, that's color. And then, and maybe on the, on the 20 electrolyzer systems that you're currently, I guess, commissioning is currently undergoing on, are you able to put a, a capacity figure on this? And, and then also, while I'm sure there's differences on a project-by-project basis, can you share a little bit more about the process involved to, to kind of get the site acceptance, and the process of, you know, getting, getting some of the equipment to site and, and the process it needs to go through in order to actually reach revenue recognition, just so that we can get a bit more- Yeah ... clarity around exactly how this works? Absolutely. And look, and this is something we've obviously been spending a lot of time and very fair question, Skye, right? So the breakdown here of all this commissioning effort that's going on, it is actually there's over 25 MW system, okay? And just to put that in context, all of that is not Q2, it's throughout the year. But there's over 25 MW system that we're actually going through commissioning phases, making sure that the customers are ready, and there is over 21 1 MW system. And as we just touched on it, right, there's also some large-scale projects that are continuing to go through, you know, fabrication, enough work, rectifiers and things like that. But here is the key when it comes to going from. So you got a couple of process, right? You do a factory acceptance test when the system leaves the factory, and you don't, you know, depending on the situation, sometimes you produce. How much hydrogen is produced in that factory acceptance test depends on whether it's a 1-megawatt system versus a 5 MW system. And the key to actually get the site acceptance test is make sure that you have, you know, stack performance buttoned up in terms of what the turndown of that stack needs to be like. Make sure that all the compliance and the documents are ready to go. That's another piece. And finally, what it really comes down to is, have you produced enough hydrogen at the specification for that site? And that's really the final piece before you do the handover and say, "All right, we've completed the site acceptance test." That's really what it comes down to. So, uh- Just to follow up on that, would it be fair to say that, you know, some of these, some of the sort of delays in commissioning is on the customer side of things as well, rather than just on Plug Power side of things? Look, we always work hand in hand with customers, right? But the customer side also has to be ready. It's not just our commissioning team and everything we do. You're absolutely right about that. And look, there are some situations where some of those sites could end up being Q3 rather than Q2, but we have tremendous activities going on where the customer is also ready, and the team is really working hand in hand with them to be sure that we can do the handover and get the site acceptance test done. But you are right. In some cases, there are things that customers need to do as well. Perfect. Thanks, thanks for the extra detail, guys. Cheers. Thank you. So I'm gonna close it out. I want to thank everyone for joining us today. I look forward to discussions with our analysts throughout the quarter. And look, the foundations, you know, I walked Georgia, I walked Louisiana. I head over of our factories with one of our key partners to help us build these hydrogen plants in Rochester. And, you know, no one has the infrastructure, the customer relationships, the vision for this industry that I believe that Plug has. I think it's a real differential advantage. It's been a tough four or five months, but we're moving in the right direction. So I look forward to our engagements throughout the quarter and throughout the year. So thank you everyone for joining the call. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.