Plug Power Inc. (NASDAQ:PLUG) Q2 2023 Earnings Call Transcript

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Ameet Thakker: Just real quick, just thinking about kind of the cadence of kind of cash needs for the balance of the year. It looks like between kind of cash flow from operations and your CapEx today, you’ve kind of — you’re kind of burned about $1 billion in cash. And I know you guys mentioned maybe $1 billion from the DOE program. Would that be funded all at once and then kind of cover your — kind of your Georgia, New York and Texas plants, is that how we should think about it?

Andy Marsh: I’m going to turn the questions over to Paul here. Paul?

Paul Middleton: I guess a couple of things I would share with you. First and foremost, when you look at the volume that we’re projecting, it’s almost double or more in the second half. So it was a pretty heavy investment in working capital preparing for all of these new offerings, scaling up electrolyzer, scaling up stationary, scaling of mobility solutions, pretty heavy investment in inventory. We actually expect that to come down. So I expect to have that from an impact standpoint to — to actually generating cash for us in the second half. Second thing is, when you look at, as Andy shared, all of the traction, we’re making with growing volume as well as the cost down, that’s going to impact our operating — our margin profile.

So that helps as well. So you should see a softening of that in the second half. The short answer to your question is on the DOE program, until it’s done, it’s not done. But the timing of exactly how that will play will be to be determined in terms of the inflow. We are actually working, again, as Andy mentioned, with other solutions as well. I think if you look at the next couple of years, there’s going to be a combination of debt solutions from corporate debt, to project finance, to enhanced ITC financings. And all of those things, you’ll see more of from us in the coming months as we start to enroll some of those solutions. And so it’s going to come from one of those programs in the short term, midterm and long term as we roll all of those solutions out.

Ameet Thakker: And just one quick housekeeping question. In the investor letter, I know you guys reiterated kind of the revenue guide for the year. I didn’t see that for the gross margins. I was just wondering if you could kind of level set us on that for the year.

Paul Middleton: We didn’t necessarily give specific updates on the full year margin profile. But I think when you look at the second half, you’re going to see tremendous sequential progress. I mean it’s going to be really — you’re going to see a big step function in Q3, the volume growth and then even more substantial step function in Q4 as we deliver the back half. It’s probably in the 30%, 40% range of sales for the back half in Q3 and then kind of 50%, 60% range, giving you rough ranges there in terms of volume in the fourth quarter. And when you get to that high level of sales, it’s very accretive and especially when you think about the complement of equipment programs that are in there. So we expect sequential growth and you’re going to see strong performance and strong growth in the margin profile as we progress through the year.

Operator: [Operator Instructions] Our next question comes from Amit Dayal with H.C. Wainwright.

Amit Dayal: So Andy, you highlighted moving selling prices higher in your investor letter. Can you talk a little bit about which product offerings you’re targeting first for this effort and then how this translates into the rest of our portfolio?

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