Greetings, and welcome to the Plug Power Third Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Meryl Fritz, Marketing and Communications Manager. Please go ahead, Meryl.

Thank you. Welcome to the Plug Power Q3 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 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 ending December 31, 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 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.

Good morning, everyone, and thank you for joining us today. I'm pleased to share Plug Power's results for the third quarter of 2024 and provide an update on the steps we're taking to reinforce our leadership in the hydrogen economy. 2024 has been a pivotal year, a time of strategic consolidation and focused improvement. Through a disciplined approach to operational efficiency, financial management, and technological advancements, we're building a foundation that positions Plug for strong growth and resilience as we enter 2025. Our focus remains on executing our mission while staying in line with evolving governmental policy that continues to support the hydrogen and Plug economy. Plug Power has navigated a dynamic government affairs landscape over the years to help shape clean-energy policy. We played a critical role in advancing legislation like the investment tax credit under the first Trump administration, a key milestone for our industry. We have been deeply engaged in the development of hydrogen policy with the Biden administration, and we do expect that there will be a change in the political climate. This landscape is not completely clear. A positive indicator is that Politico has reported that the new administration is expected to continue to support hydrogen and nuclear power. For Plug, an important near-term consideration is that we expect guidance on the production tax credits soon, with more favorable terms to accelerate hydrogen projects announced prior to year's end. Additionally, we remain on track with the DOE loan process. Taken together, these policies underscore a supportive foundation for the US hydrogen economy. In Europe, support for hydrogen remains robust. I recently returned from meetings with European partners who are increasingly committed to hydrogen as a pillar of the sustainable energy transition. These discussions reinforce Plug Power's role as a global leader as our initiatives align with European climate goals and economic vision. Returning to our operations, our hydrogen production infrastructure in the US is advancing well. Plants in Georgia and Tennessee, along with our joint venture facility in Louisiana, are critical to building a secure hydrogen network. Louisiana is currently in the commissioning phase and is expected to be fully operational in the first quarter of next year, further strengthening our supply chain as demand for green hydrogen expands. Globally, Plug's leadership in PEM electrolyzer technology continues to set us apart. With 70 megawatts of electrolyzers deployed this quarter alone, Plug is now the largest single deployer of PEM electrolyzers worldwide. Bloomberg recently recognized Plug as the leading provider of green hydrogen solutions outside China. I also want to highlight that in our application business, we have installed, but not yet recognized, over 8 megawatts of stationary power systems with Energy Vault and are seeing new growth and new customers in our material handling business. My recent trip to Europe also offered the opportunity to meet with key partners, including Galp, with whom we'll be deploying the world's largest PEM electrolyzer systems starting in April 2025. With Iberdrola and BP, we're moving forward on a 25-megawatt order at their Castellon refinery, underscoring our ability to deliver at scale in international markets. These collaborations, coupled with Plug's 8 gigawatts in basic design and engineering package for the electrolyzer market reflects the strong demand for advanced hydrogen solutions and Plug Power's essential role in enabling a global energy transition. EDGAR has been down, but today, we announced a $200 million convertible deal with Yorkville Capital. Under the terms of this agreement, Yorkville is committed to a long position with a conversion price of $2.90 and is restricted from shorting Plug stock. Our focus remains on minimizing shareholder dilution by partnering with investors who recognize the company's intrinsic value. Additionally, we continue to explore debt financing and the sale of ITC benefits to further reduce future equity-based funding needs. In Q3, we reported revenue of $173.7 million, driven by strong demand for our solutions, particularly within electrolyzer and hydrogen infrastructure. Our gross margins rose by 37% quarter-over-quarter with gains across our equipment, service, and fuel businesses. We've also reduced cash burn by 27% compared to last quarter, demonstrating our disciplined approach to cash management and inventory optimization. These improvements highlight our commitment to building a financially resilient company prepared to grow profitably in a dynamic environment. As we close 2024, we're confident that the foundation we built this year has positioned us for success. With the strength and balance sheet, strategic global expansion, and working to ensure supportive government policy, Plug Power is poised to capitalize on new opportunities in the year ahead. Thank you, and I'd like to turn the call over to Paul for a few comments.

Thanks, Andy. 2024 reflects a critical inflection point for Plug and the ongoing transformation of the company. We embarked on a journey a few years ago to significantly broaden our solutions in the hydrogen economy and vertically integrate on our hydrogen supply. We continue to nurture these offerings while doubling down on optimizing operations and cash management. During Q3 of 2024, we saw a meaningful deployment in sales into the market for many of our new platforms, which has set the stage for continued sales growth in Q4 '24 and '25 onward, particularly with the launch of a broad range of electrolyzer products. Q3 represents a major inflection point in ramping the electrolyzer business and recognizing the commercial growth in our results. We continue to optimize the first global green hydrogen plant in Georgia, which combined with the Tennessee facility provides us 25 tons per day of capacity and close to half our current annual hydrogen needs, and we have made great progress on the third facility in Louisiana that will provide us an additional 15 tons per day over the coming months. We continue to focus on optimizing the workforce of the company. Given the rapid growth over recent years, we had added a lot of resources. And this year, we've worked at optimizing that resource pool to maximize leverage. Since January 1, we've reduced the global workforce by over 15% through Q1 restructuring and ongoing attrition where we've not backfilled. We've completed many rooftop consolidations and have additional warehouses and facilities we are in the process of consolidating to our two main manufacturing sites in Albany, New York, and Rochester, New York. We have adjusted pricing across many equipment, fuel, and service platforms for which benefits can be seen in our Q3 results, particularly for fuel and service. These pricing impacts will continue to positively benefit results as the year progresses and we get full periods under these pricing measures. We've increased focus on asset leverage, particularly targeting inventory. We made a lot of investment over the last two years to enable the successful launch of these new product offerings. And this year, the focus is on optimizing these resources, and we expect a meaningful reduction in the near term as sales continue to ramp, which will provide a meaningful source of liquidity. Net cash used in operations combined with CapEx is down year-over-year from lower CapEx inventory reductions as well as margin enhancement. We expect the cash burn rate to improve even further over the near term as we continue to curtail CapEx and leverage working capital further and drive additional sales and margin growth. Turning to Q4 and 2025, we remain laser-focused on growing sales and margins, improving cash flow. Our strategy includes beginning commercial production at our new Louisiana hydrogen plant and further leverage of our Georgia and Tennessee facilities, driving more equipment sales given our expanded manufacturing capacity, which does not require more investment and provides us an opportunity to readily source three to four times more volumes, continue driving down costs with further workforce optimization, completing the targeting rooftop consolidation, driving additional leverage on our material vendors, and driving enhanced fuel network efficiency and service cost profiles. Lastly, leveraging the price increases and yielding full annual benefits as these continue to expand. In terms of liquidity, our unlevered balance sheet provides opportunities for liquidity from several different sources. First, our restricted cash balance continues to release quarterly at a $50 million rate. We've discussed at length the opportunity to leverage inventory. We're targeting additional reduction of $200 million to $250 million in the near term. Sales growth, price increases, improved mix, and continued cost downs will continue to improve operating cash flows. And we've been pursuing varied debt facilities and parties interested in equipment findings that we could expand on the platform like we established earlier this quarter with Antin. Lastly, we're working closely with the DOE to finalize the $1.7 billion loan facility. We've made tremendous progress and we meet with them regularly. We're targeting to close in the near term, and we're extremely clear on the access and process to successfully close this facility.

Well, thank you. I think we're ready for questions.

Our first question today is coming from Colin Rusch from Oppenheimer. Your line is now live.

Thanks so much, guys. Just looking at the balance sheet, can you talk a little bit about how quickly you can start monetizing the inventory here for the balance of the year and into the first quarter next year?

Sure, Colin. Good morning. I'm going to turn that over to Paul.

Yeah, obviously one core tacit of that is sales. And so you see some of that benefit start to be realized with Q3. And based on our guidance, you can anticipate a much bigger Q4. So we're definitely expecting even more benefit in that reduction in Q4, and we're working with the teams to continue that leverage. We have additional reductions in leverage anticipated for the first half of next year. So you should see continued meaningful reduction in that leverage on that in Q4 and onward.

Okay, thanks. And then on the restricted cash balances, obviously there's a variety of covenants that I'm sure you guys are working through. Can you just give us a sense of whether any of that restricted cash could loosen up here in the near term or if that is not a real strategy that you guys are thinking about?

Yeah, we definitely work in multiple angles on that and there are the routine servicing of those facilities which has our normal reduction releases. We also have a number of transactions we're closing that will release different pockets of those reserves probably a little bit faster than that, in some cases that $50 million per quarter. But we're also working angles like what we did with Generate a few years ago where we can actually back-lever that because it's effectively a deferred receivable. So it's a meaningful asset that parties like Generate definitely see value in it, and we definitely think there's opportunities to factor that deferred receivable effect similar to what we've done.

Thank you. Next question is from Saumya Jain from UBS. Your line is now live.

Hey, you guys. Do you see additional price hikes for the rest of the year or in 2025? And I guess what are you seeing as your path to positive growth margins, what could drive that?

So I'm going to address price hikes. And then I'll let Paul talk about driving to positive margins. I would say that we have had significant price increases with many of our customers. Some of the legacy deals, especially in the electrolyzer business, are almost completed. And all future deals are being priced at a profitable level. I think a wildcard for future price increases will be if there is additional inflationary pressure in the US because of tariffs. So we are primarily a US manufacturing business. It is something we'll be conscious of and aware of if we need to increase pricing because the inflationary environment changes. But at the moment, I think the work we're doing to make sure we price everything profitably, along with working on cost reductions, well positions the company. I'll let Paul add on to that.

I believe Andy highlighted a crucial point. As we address the backlog and introduce new programs with improved pricing across material handling, electrolyzers, and other sectors, the product mix continues to enhance, leading to increased benefits. Looking ahead to 2025 and beyond, which we will discuss further in tomorrow's symposium, the focus will be on the fundamentals. This includes sales volume, reducing material costs, optimizing our workforce, and applying our successful strategies from material handling to these new platforms. You can expect to see ongoing improvements in margins, particularly in the fourth quarter, and this trend should continue into the first quarter and beyond.

And Paul, we observed a 37% improvement in Q3.

Exactly. Yeah. And that's a combination of volume, price increases, leverage of the PTC, a lot of factors that are working towards our benefit. And you see those themes continue into Q4.

Got it. Thank you.

Thank you. Next question today is coming from George Gianarikas from Canaccord Genuity. Your line is now live.

Hey, good morning, everyone. Thank you so much for taking my questions. Maybe as a first question, I'd love to ask a little bit about your views on the changing regulatory landscape in the United States and how that impacts the way you think about the company sort of at an existential level. In other words, do you see opportunities to maybe grow in other parts of the world and to kind of push the company forward more into Europe and maybe other parts of Asia? Thank you.

I want to address two aspects here. First, let’s discuss US policy. You may have seen the article in Politico about hydrogen, nuclear power, and sustainable aviation fuel. There is an expectation that these will continue to receive support from the new administration. When considering the regulatory environment, particularly regarding the production tax credit, we anticipate some easing before President Trump takes office. Additionally, looking at the Loper decision and interpreting its legal implications, we foresee potential opportunities with the production tax credit. The oil and gas industry is interested in hydrogen, which has had mixed implications for Plug. Regarding the Department of Energy loan, we have a clear strategy to close that out before the administration changes. While I won’t go into specifics, we are aware of the details and have a solid plan. We received a significant number of grants last year, with most contracts where we are the prime being finalized by October 1 for the manufacturing grants. We also contribute to job creation and are a US manufacturer competing globally against China. Regardless of opinions on trade wars, our relationships and the opportunities stemming from being American-made, building American products, and hiring American workers remain strong, regardless of the administration in power. When we consider the global landscape, our electrolyzer deployments are primarily taking place in Europe and Australia. We have developed worldwide capabilities in partnership with integrators to produce our electrolyzer products, as well as our stationary products and hydrogen infrastructure. Localization holds significance under any administration, whether Biden's or Trump's. Most of our stacks will originate from the United States, but we also maintain a strong international presence, especially in Australia. The 8 gigawatts of basic design and engineering work we're undertaking mostly occurs in Europe and Australia. While I recognize that challenges will arise, we have successfully collaborated with administrations across the political spectrum, including President Bush's, President Trump's, and various Republican and Democratic Congresses, and we will persist in doing so.

Thank you. And maybe as a follow-up, can you possibly share some more details on the convertible that you referenced during the call? That you filed. Thank you.

Sure. Paul, you want to give the breakdown?

Sure. We're working on getting it posted on our website for more information, and hopefully the EDGAR system gets up quickly so that it’ll be public in that form. The net of it is, it's a $200 million unsecured convertible with a fixed conversion price at $2.90, which is close to a 46% premium off of where the share price is now. It's 24 months at a 6% interest rate. And what I think is really equally important is that the fund has a long view on Plug and has agreed not to short the stock because they certainly have a very positive outlook. You can tell from the premium they expect where things are going to go with us over this duration. So more details to follow, but those are some of the key details of the deal.

Thank you.

Thank you. Next question today is coming from Eric Stine from Craig-Hallum. Your line is now live.

Hi, Andy. Hi, Paul.

Good morning, Eric.

Good morning.

Good morning. Hey, so when I look at the fourth quarter guide, it seems to me that it's a little wider than maybe it would typically be. Just curious, can you talk to kind of what's in there for the low end, what gets you to the high end? And then I guess my follow-up would just be, I know you had electrolyzer sales in Q2, which, a good portion of those were not recognized, were in Q3, just curious how much of that is left and will impact Q4?

So, in many ways, Eric, we're now focusing on the electrolyzer products, with most of the recognition coming from Q2. There may be some final commissioning activities that could account for approximately 15%, possibly one deal that hasn't been completed yet. Overall, we anticipate that the electrolyzer business will see an increase in the fourth quarter due to the integration and commissioning of products that were mostly manufactured in the third quarter and are being shipped now. Looking ahead to the fourth quarter, I think three points are important. First, the liquefier market operates on a binary scale, where the likelihood of an event can either be substantial or nonexistent. This influences the range in that business. Second, while the electrolyzer sales funnel is strong, our understanding of how to recognize revenue, similar to what we did in the second quarter, suggests it may not be as extensive as we initially believed, despite significant preparatory activities for early 2025. We continue to expect growth in the electrolyzer sector. Lastly, in the apps business, material handling is improving, and I foresee us achieving a growth path of 20% to 30% by 2025. That summarizes my perspective, Eric.

All right. That's very helpful. Thanks a lot.

Okay.

Thank you. Next question is coming from Bill Peterson from JPMorgan. Your line is now live.

Good morning, Bill.

Hey, good morning, Andy and team. Thanks for providing all the details here. Maybe following on the question on the range of outcomes, I guess within your base case and assuming mix, how should we think about the exit rate of gross margin in the fourth quarter and maybe also taking into account any sort of cost reductions you're able to provide? And then specifically, how should we think about gross margins in your fuel business?

Go ahead, Paul.

Tomorrow, we'll provide more detailed information regarding our expectations for 2025 and beyond. For the fourth quarter, we anticipate a significant increase in sales volume, which will greatly benefit us. We have substantial capacity, and utilizing it will enhance our product margins as we continue our ramp-up. I wouldn't be surprised if the improvements we see are in line with the progress from Q3 to Q2, potentially better at the higher end of our guidance. In terms of fuel, our disclosed numbers indicate we are moving in the right direction. We still have opportunities to maximize our existing facilities, and we are exploring additional sales into the direct merchant market with improved pricing. We're also implementing enhanced efficiency measures. Consequently, you should see the combined effects of recent pricing benefits recognized in Q4, along with efficiency gains and fuel mix improvements, leading to substantial progress in Q4 and beyond.

Yeah, thanks for that, Paul. And then I might have missed it, but I guess to the extent that you can speak to it, how much is left to be done on the DOE loan closing conditions? Is there any sort of long poles, I guess, in particular for Texas? It seems like the nuclear is going well, but maybe on the capital side, is there any additional capital on top of what you just announced today? Or is the DOE looking at further contingency or reserve requirements? Just trying to get a sense of what is remaining to be done and what timing you're thinking as of now.

Yeah, so Bill, I'm going to let Paul talk about a process we have going on looking for equity partners, but that is not tied to the DOE loan. And I know everybody would like me to provide detail by detail. All I can say to you is that we know we don't see any tall pole in the tent. We know how to execute against it. We've worked with the DOE on making sure there's a clear schedule of events, and certainly the election in some ways helped to structure a schedule that allows us to get there. I'll let Paul talk about the process, though we're not dependent upon it, but the process we're using to look to bring in an equity investor also, to sit side by side with us at the project level.

Yeah, we've kicked off, I think we've talked about a parallel process that's looking at strategic and project finance funds and others that could be interested in participating in the capital stack for our pipeline. That's going very well. We've had a number of partners express interest and we're engaging in those dialogues. Actually, some of those partners will be at our symposium tomorrow to learn more about the company and learn more about what we're doing there. So I would say the theme is that they look at the commercial proposition of what we're doing in Georgia and what we're forecasting to do out of Texas, and that's very attractive in addition to the fact the DOE is postured with this facility to provide incredibly low-cost capital for the majority of that pipeline. So those factors, in addition to the success of us executing on delivering on Georgia, all bode well and is what's driving a lot of interest in this to move forward. So very encouraged, and we're working hard at bringing all those things to fruition and more to come in the near term.

Thanks, Andy and Paul, look forward to seeing you tomorrow.

Great. Looking forward to it, Bill.

Thank you. Next question is coming from Craig Irwin from Roth Capital Partners. Your line is now live.

Thank you. Good morning, guys. Hey.

Good morning, Craig.

Hey, Andy. So I'm going to ask a tough question because I know a lot of the investors out there are really looking at it from the standpoint. And I guess it's best to answer these questions in public when we can, right? So, Andy…

Sure, Craig.

I hate to be the one that brings this, but it hopefully lifts the dark cloud, right? So in the event that we do not see the DOE loan funded, how much flexibility do you have to sort of restructure the operations and pivot versus the business plan you've been working on this last year?

Yes, Craig, we've explored various roadmaps. Looking at the business in 2025 and most of 2026, whether Texas is operational or not won't significantly affect our financials. I can mention that there are European investors I've collaborated with for a long time who would be interested in joining us as equity partners in Texas. Regarding Texas, we already have the necessary equipment; it primarily involves building out the plant. From a project standpoint, securing a DOE loan would be more advantageous, but if Texas doesn't come to fruition, we would need to increase our efforts to find an equity partner. Overall, this situation won't dramatically alter the next two years. If we reflect on our business growth this quarter and the last 18 months, I've been in Europe for a decade, and I've doubled the number of material handling installations there in that time. Most of our electrolyzer revenue is coming from international activities, and many growth opportunities are planned outside the US. As I mentioned earlier, no one has the integration capabilities that Plug has gained through our acquisitions in the oil and gas sector. We have excellent integrators in Vietnam, Dubai, and Europe. Therefore, if US policies become more unfavorable than anticipated, we will likely shift our focus internationally. I noted that the Trump administration was beneficial initially, and the Chevron overturn is certainly a positive development. Having followed elections since 1968, I've observed that things in America often tend to move towards the center.

I completely agree with that. Thank you. My next question is about Plug's history, particularly your early success with Walmart. You wouldn't have achieved such great success, with tens of thousands of forklifts operating daily, without being able to save your customers money with these products, deliver them reliably in a more environmentally friendly way, and help them reduce costs.

Okay. I've let my buddy Sanjay not have to speak during this call. I'm going to give him an opportunity to speak up. All I can say is I'm going to touch on electrolyzers, and I will let you expound. To me, electrolyzers is all about the efficiency of the stacks and construction costs.

And the price of electricity.

So I'll let you run on this one, Sanjay.

So, Craig, I think your question is the right one, right? There's many instances where we are working on some pretty large mega deals, as Andy referred to on our 8 gigawatt of basic engineering design packet. And the electrolyzer offering is in pretty large scale. And by the way, we're being able to talk and have a very healthy discussion with some of these customers because it's basically for a lot of different kinds of hydrogen derivatives, if you would, sort of like, things like E-fuels, ammonia, where electrolyzer combined with the right source of power combined with right efficiency, yes, does allow them to provide a very, very attractive economic value proposition, right? That's item number one. Item number two is something I want to elaborate on. When discussing the heavy-duty mobility market, we have introduced a mobile refueler product which serves as an ideal solution since the entire hydrogen fueling infrastructure is still being developed. This product effectively acts as mobile hydrogen delivery, enabling faster testing and quicker rollouts of vehicles even before the complete infrastructure is in place. Regarding our liquefier business, while progress has been slower, we haven't missed any opportunities; projects have simply not advanced quickly. Despite that, we offer one of the best energy efficiency solutions available. Transitioning from gaseous to liquid hydrogen through our offering enhances the economic value for our customers. Additionally, we see potential in selling a combination of our electrolyzer, liquefaction technology, and hydrogen fueling solutions as a comprehensive enterprise and facility sale. This approach allows for design optimization, cost reduction, and increased economic benefits for our customers. Ultimately, these factors contribute to significant cost savings and a more compelling value proposition, which we believe will drive our growth.

Excellent. Then last question, if I may. There have been some really interesting things that have come across my desk in the last 25 years. Green hydrogen is interesting and it looks like it could be a phenomenal business over the next number of years, but something that probably has a much longer gestation period is the use of small nuclear reactors for direct production of hydrogen. Now you guys get approached by pretty much everybody in the market since you are the market leader. Do you see any potential breakthrough hydrogen production technologies that could be available in the next decade that could bring down the cost of energy production by an order of magnitude?

Now that's an interesting question. I'm going to let Sanjay take a shot at it, and then maybe I will add on when you get done, Sanjay.

So, Craig, if you think further out, we have seen discussions about small modular reactors in the near term. When considering our electric grid and its challenges, as well as the increasing amount of renewables added to it, the transition to a more renewable grid will heavily rely on hydrogen. Hydrogen can serve as an energy carrier and storage solution. This allows us to utilize stranded renewables, even at negative clearing prices, to produce hydrogen. We can store this hydrogen efficiently in pipelines or salt caverns, which are not costly and have substantial storage capacity. We can then use that hydrogen in our stationary products. Currently, we expect that electrolyzers will drive significant growth for our company through the end of this decade, and during that timeframe, we anticipate a major growth inflection point for our stationary products. This vision includes reaching nearly 100% renewable electric grid in North America, with hydrogen playing a key role and our stationary products supporting not just data centers and EV charging but also peaker plants and potentially serving as baseload power when hydrogen costs are favorable. As for small modular reactors, it's essential to consider the levelized cost of hydrogen, which hinges on the levelized cost of electricity. If the economics of small modular reactors improve as they scale, we could see a beneficial combination of that technology with green hydrogen production. Would you like to add anything?

I share a similar perspective, Sanjay, regarding the world where hydrogen is produced when there is a need to put that load on the grid.

Stabilizing the grid.

Stabilizing the grid is important, and when considering the associated costs and the efficiency of the electrical system, it becomes a capital cost issue. We have plans in place to continue working towards achieving peak maximum efficiency of 37 kilowatt hours per kilogram.

There is a significant amount of research and development focused on improving the efficiency of our systems. We are working on creating modular systems that require minimal on-site construction. As a result, we anticipate learning curves of 20% to 25% for electrolyzers when considering construction and efficiency improvements, along with our ability to generate hydrogen during off-peak hours. Additionally, enhancing the efficiency of stationary products is crucial, as these efficiency gains are central to maximizing the effectiveness of electrolyzers and fuel cells, thereby enhancing the value proposition for our potential customers.

Understood. Well, thank you for that and I look forward to tomorrow. Thanks.

Great. See you then, Craig.

Our next question is coming from Dushyant Ailani from Jefferies. Your line is now live.

Hi, thank you for taking my…

Good morning.

Good morning. I just wanted to quickly ask on the planned maintenance for Georgia and Tennessee. Just given the recent startup, could you just share a little bit about what's the maintenance involved and how do we think about maintenance cadence going forward?

I don't think there is anything unusually surprising. Like most facilities of this kind, we had a shutdown in early October for general maintenance that lasted about a week. Typically, we will have shutdowns that last seven to ten days each year, probably occurring twice a year. We recently completed one in Tennessee, and it was a pretty standard procedure. It's crucial to ensure that during the maintenance in Georgia and Tennessee, we maximize local storage so that the on-site storage can provide adequate backup while we are down for outages.

Got it. That's helpful. And then just a second one on the ITC transfer monetization. I think you guys have previously talked about roughly $31 million and then I think a total of roughly $70 million. Just wanted to check on the timing of that and how do you see that shaking out?

You want to take that, Paul?

We are actively working on it. It's challenging because, like many things we do at Plug, this is a first-time endeavor. It has taken longer than we anticipated, but we have several parties interested and are fostering those discussions. I believe there is a good chance we can finalize it in the upcoming weeks, and there are significant additional opportunities following this initial one. We have engaged a top-tier brokerage firm in the US that specializes in tax equity monetization for numerous companies, and they are collaborating with us. Therefore, I am quite optimistic that we could achieve this, potentially even before the end of the year, if not sooner.

Got it. Thank you.

Thank you.

Thank you. Next question is coming from Chris Senyek from Wolfe Research. Your line is now live.

Good morning, Chris.

Hey, good morning, Andy. How are you?

Okay.

Good. Good. I wanted to just ask about the DOE loan in other ways. Just given the pending change in administration, wanted to get your thoughts on perhaps like the durability of the loan, like do you need to reach financial close in order for it to be considered safe or can the conditional commitment, like, can the conditional commitment be canceled?

Yeah. I would just say we are laser-focused with the DOE to close before the change in administration. And from my discussions with the DOE, I feel quite comfortable, but I'll let Paul add anything he thinks we should add.

Yeah, I would just say that the federal government has committed the money to the program. This is more about executing the document, and it's not an absolute requirement that we finish it by a certain time. However, it would certainly be easier and beneficial for everyone involved to get this settled quickly. It's significant for Plug and the program itself, and everyone is dedicated to completing it as soon as possible. I believe it would simplify things for us to finalize it quickly. The important factor for me is that we clearly understand all the final steps involved, and there is good alignment on this. As Andy mentioned, we have a detailed plan outlining everything that needs to be done, and the engagement from their side is impressive. The support and energy they are providing to help us complete this project are substantial and very beneficial. I'm excited and optimistic that we will accomplish this ahead of schedule, and we will continue to share updates as the situation develops.

Okay, thanks. I just have one more question. I understand this might be the last opportunity to hear from you before the 45V rules are finalized.

You'll hear from me tomorrow.

Yes. And look forward to seeing you tomorrow.

Yeah, we actually have some real experts that will be there tomorrow who are Republican lobbyists and Democrat lobbyists and you'll get to hear from them. But sure, what's the question?

Just, like, what would Plug's ideal final rules be? Is it loosening additionality, time matching, regionality? What would you guys want?

Well, we believe as many of the senators who wrote the bill that additionality is not in the legislation and additionality should not be part of the rules and regulations. I think on time matching, we'd be very comfortable looking like Europe where it's 2030, 2032, where it fully takes in. I think again on time matching, it's really questionable whether that was part of the legislation. And I think regionally, we like to see about four or five regions across the United States and that probably would be the ideal situation for Plug. And I got to tell you, that's probably one of the reasons, I mentioned that, because of Loper, we think anything that's different probably will be challenged by others.

All right. Appreciate the color. Thanks and look forward to seeing you guys tomorrow.

All right. See you tomorrow.

Thank you. Next question is coming from Amit Dayal from H.C. Wainwright. Your line is now live.

Thank you. Good morning, everyone.

Good morning, Amit.

Hey, Andy. So with respect to these 8-gigawatt BEDP contracts that you have, what's the delivery timeline for these contracts, is it like next 12 to 24 months or maybe longer?

I'm going to let Sanjay take that, Amit.

Yeah. So, I mean, it all varies, right? So I think what you should expect, however, though, out of that 8 gigawatt, we certainly believe there is more than a gigawatt that likely gets to FID and goes from being basic engineering design packet to actual new orders and bookings sometime in 2025. And keep in mind, we're going to keep adding to this 8 gigawatt. This number is not going to stay stagnant, right? And I'm sure there'll be some that are going to drop out as well, but that's how you should think about it in terms of how this goes from sort of like the front-end study to getting to full FEED study, detailed engineering design, then getting to final investment decision and we've actually identified quite a few of those opportunities that we believe talking to our customer does get to FID in 2025 and becomes a bookings opportunity.

And, Sanjay, is that 8 gigawatts, I know it's an early stage overall, but is that dependent on any sort of regulatory incentives, et cetera to materialize in a complete manner?

Yeah. In that entire 8 gigawatt of basic engineering design packet, a lot of that, as Andy referred to earlier, right, the majority of that is really in Europe and Australia where the policy here in the US doesn't really have any interplay with that. We do, however, have about a 300-megawatt opportunity related to the US market. That could actually get pushed to the right or that could actually meet some further clarity. But out of that 8 gigawatt, for example, there is a 3-gigawatt opportunity in Australia. There is another 1.5-gigawatt opportunity, again, in Australia. There's a 500-megawatt opportunity out of that 8 gigawatt that's in Europe, right? So most of this mix is really Europe and Australia, if you would, in terms of what makes that up.

Thank you. And maybe, Andy, just last one for you from me. Do you see nuclear as a competing energy source relative to hydrogen or should we think about how hydrogen and nuclear can power sort of different applications and be designed for different purposes? How do we see because it's going to take time for nuclear to come about as well. So it's not a near-term threat obviously, but longer term, how do you see nuclear and hydrogen sort of coexisting?

I actually see as a good thing. I kind of view them as complementary. Sanjay talked a great deal about how to use nuclear power to generate hydrogen when demand is low. Even though with the new nuclear power device issue, we were able to ramp up and down. Certainly, you want to generate as much electricity as you can to support the network. And I think you have a combination of hydrogen being generated off hours, which is important for us to drive down equipment costs as well as construction costs to make sure that hydrogen is low-cost as possible feeding stationary products, which replace gas turbines to put power on the grids during peak hours. Now, we did a lot of work with one of the leading consulting firms in the world who really believe electrolyzers are the big market opportunity for Plug today and during the rest of this decade. But as those electrolyzers get deployed and as stationary products become more and more efficient, they are the replacement for gas turbines. And I think we have some activities going on kind of in the '28 type timeframe, which can tap into hydrogen pipelines and data centers. And actually, I think that will be kind of the first view of what that world will evolve into. So during the next five years, electrolyzers for generating hydrogen for substitution in ammonia markets, in refineries, in concrete manufacturing, all work that we're doing today, but ultimately, I'm a real believer in nuclear and it's really nuclear and hydrogen and fuel cells and solar and wind, which make the grid up ultimately.

Thank you, Andy. That's all I have. Appreciate the color.

All right.

Thank you. Next question is coming from Jordan Levy from Truist Securities. Your line is now live.

Hi, all, it's Henry on for Jordan here. Thank you for squeezing me in.

Hi, Henry.

Hi, Andy. Maybe to start with just on the near-term outlook for the material handling business, can you just talk to the improvements you're seeing around customer receptiveness to some of the price increases from the beginning of the year?

Yeah. It's always tough to increase prices and we had to increase prices pretty dramatically. But you will see an uptick in the material handling business in the fourth quarter. We review it actually twice a week and feel real good about that. And we see a growth of 20% to 30% next year, which Jose and others will roll out during the symposium tomorrow.

Thanks for that. And then just…

I should mention that during this challenging process, we discovered that our value proposition is stronger than we realized, which has been echoed back to us by our customers. For many of them, there really isn't an alternative. They need to move goods quickly and provide electricity to buildings, which is increasingly difficult. The backlog on the grid is 3.5 years long, and the resilience of our value proposition in material handling is evident. After a tough year, we eliminated Power Purchase Agreements, and our revenue could have been about $100 million higher this year if we had kept them. However, the strength of our value proposition is much greater than we initially thought.

Thanks. That's helpful. And then just looking at the path to gross margin positive here, and maybe this is more of a question for next year, but are there business lines you all have looked at or could look at to divest of in the future to kind of further improve cash flow and the margin profile here?

We're always looking at the businesses, and we've sat down and we've looked at the value, and we don't see when you look at the whole spectrum and Sanjay, myself, and Paul have spent a lot of time on this over the months. And so the answer to your question directly is no, today.

Thank you. Next question is coming from Tim Moore from Clear Street. Your line is now live.

Good morning. My DOE conditional loan and…

Good morning.

Hey, good morning. I'm actually at the airport coming to your symposium, but my DOE conditional loan and 45 production tax credit questions were already answered, but I wanted to ask based on the election outcome last week, when would you maybe start marketing or targeting oil and gas customers?

Well. If you look at our electrolyzer business, I think our biggest customers are oil and gas customers.

Absolutely. We already are.

We already are. So I mean Galp, Iberdrola, BP, MOL, they're all oil and gas companies, and probably a good deal of that eight gigawatts in backlog is oil and gas.

And hydrogen derivatives.

Hydrogen derivatives. Okay.

There has been a significant focus on the market for hydrogen and green hydrogen. This is encouraging because it doesn't require a complete overhaul of business practices. Essentially, it involves the substitution of gray hydrogen with green hydrogen. In Europe, there is a target of achieving 42% green hydrogen to replace gray hydrogen by 2030, and whether this occurs by 2030 or 2033, there is a strong push towards this goal.

Understandable. Yeah, I was just wondering if you're going to target them more because we keep reading about their appetite for blue hydrogen, I'm just wondering if you're really going to step it up and try to substitute blue hydrogen when you've…

Yeah. We are, and we're doing it today.

Good. And the other question I had was on your BEDP of the 3 gigawatts with Australia, the Ally Green ammonia, you put out that nice press release last month about the binding framework agreement that talked about late 2026 or early 2027 for system delivery. Do you think there'd be a sizable amount of revenue recognition that could flow through your income statement in the first half of 2026, given that it's a complicated design package deal with milestones?

I'll let Sanjay take that one and see where this fits into his daily responsibilities.

Yeah. So first half 2026, probably not a big revenue recognition opportunity. It's probably second-half '26 and '27. Just given the size of the project and the scale of the project, there's a decent amount of work that we're both going to have to do, right? So given where we are today, it's probably more second half rather than the first half of that year.

Great. Thanks, and I'll see you tomorrow at the symposium.

See you tomorrow. Safe journey.

Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

So, thank you for taking the time today, and I look forward to seeing many folks either online or in person at the Plug Symposium tomorrow. So thank you, everyone. Bye now.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.