Plug Power Inc. (NASDAQ:PLUG) Q3 2023 Earnings Call Transcript November 9, 2023
Operator: Greetings, and welcome to the Plug Power Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Teal Hoyos, Director of Marketing and Communications. Thank you, Teal. You may begin.
Teal Hoyos: Thank you. Welcome to the 2023 third quarter earnings call. This call will include forward-looking statements. These forward-looking statements contain projections of future results of operations or 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 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 not to 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 ended December 31, 2022, quarterly reports on Form 10-Q for the quarters ending March 31, 2023 and June 30, 2023 and other reports we file from time to time with the SEC. These forward-looking statements speak only as of the date 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 Power’s CEO, Andy Marsh.
Andrew Marsh: Thank you, Teal, and thank you for joining the third quarter conference call. It’s a difficult quarter, driven primarily by the availability of hydrogen. Over the past several months, there has been enormous challenges associated with the availability of hydrogen, primarily due to down plants, including our Tennessee facility and temporary plant outages across the entire hydrogen network. For many days, demand outstripped supply. For example, many of the California fueling stations have been without fuel or had limited fuel on a regular basis over the past several months. Additionally, the price of these stations for hydrogen has been over $30 per kilogram at the pump, about twice the normal price. To service our customers, Plug has been moving hydrogen from the West Coast to the East Coast.
This has been a yeoman’s effort and has been accomplished while reducing the core cost of hydrogen compared to the second quarter. Good news is the network has now stabilized and many of these planned outages have subsided, plus additional capacity will be coming online. We expect our Tennessee plant will be back online producing hydrogen by the end of the year. This plant when fully operational provides about 20% of our production needs. One of our major suppliers is upgrading one of their facilities to allow the plant to operate at full nameplate capacity in the coming months. The planned output has been producing between 0% to 25% of capacity. We are continuing to see progress at our Georgia plant, and we are finishing the last step in the construction process, commissioning the liquefier.
We expect the plant to be online by year-end. A few other points, Plug’s hydrogen network also caused the delay of deployment of some of our North American material handling customers. These sites will be commissioned as the hydrogen issues resolved. It’s just a timing issue. Many of those facilities actually the fuel cells in hydrogen plant or infra fueling structure are already available. We believe though that this experience reaffirms the criticality of building our nationwide hydrogen network to support our fuel cell business as well as the financial benefits that this network could accrue to the company for both that business and the additional applications that are beginning to be realized. Furthermore, this experience underscores the wisdom of our business diversification model.
In the fourth quarter, we anticipate the revenue from our new ventures will surpass revenue from our traditional business for the first time as our electrolyzers and cryogenic businesses continue to grow. Finally, I’d like to just like to reflect on the conversation I had yesterday morning with a European customer supplier and partner. He gets toward our facilities and remind me that no one has built hydrogen infrastructure on the scale we have. No one has our product set, no one has technical talent, no one has our customer relationships and no one has our real life experiences. It remains our belief and his there is the market for hydrogen fuel cell grows, no one is in a better position than Plug to take advantage of this opportunity. This is just a bump on the road.
Paul, Sanjay and I are now available for questions.
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