Q4 2025 Earnings Call — March 2, 2026
Analyst Colin Rush (Oppenheimer): Guys, and congratulations on the progress here. So as you look at 2026 from a revenue growth perspective, can you just give us a bit more color around which drivers are actually moving the needle from a growth perspective? It looks like you're talking about kind of low double-digit growth overall. I'm just curious if there's one part of the product business that's actually making an outsized impact on that growth.
Executive Name (Title): Hi, Colin. How are you? So for 2026, as I mentioned, we are projecting similar growth as we saw in 2025. The main drivers for that growth are going to be material handling. What we're seeing in material handling is our pedestal customers are going back to growth. We're also seeing refreshes. Some of the sites that we have with some of the pedestal customers are sites that have been running between five and six, seven years. time to refresh. So we see an uptick on that. We also see new customers. As you know, we signed Floor on the Core last year, but we see other customers coming online in 2026. And also, the value proposition is just getting stronger. Our customers are beginning to see also that the material handling fuel cell solution allows them to reduce their utility demand on their sites, which is really valuable for customers in days where we all know that utility and electricity availability is becoming more challenging. But that's not the only area that we're going to see growth. As I mentioned, in the electrolyzer business, we also see growth and opportunities.
We just signed at the end of 2025 We announced that the agreement with Carlton Power for 55 megawatts. And we are looking at, in the next couple of months or so, signing a similar agreement for another project in Australia. We have a lot of the projects that we have in the funnel are beginning to move farther into FID. So we are expecting to see also growth in the electrolyzer business. So those are going to be the two main drivers for growth in 2026.
Analyst Colin Rush (Oppenheimer): Excellent. And, Gans, when you look at the fuel margins and the cost of that fuel, I know you're getting better at optimizing some of the production costs and timing around that, but I'm just curious about how quickly you can start driving some of those margins closer to break-even on the fuel side.
Executive Name (Title): Yeah. Thanks, Colin. You know, I think just to be clarified, if we kind of look back and we think about some of the things we've done, I mean, obviously turning on these three plants and vertically integrate and puts us in a great position. And we've seen that in the benefits and our results. We see that continuing to trend upwards. You know, we've been on this maturity curve of optimizing those facilities. We hit all-time records in the Georgia plant for many of the months in 2025. And we've seen a progression in the utilization and efficiency of the newer plant, Louisiana, as we've turned that on this year and scaled that up. So one thing we expect for 2026 is obviously better leverage on those facilities now that we can take those learnings and run those plants even more efficiently. Second thing is, obviously, we're adding, as Jose mentioned, more sites, more material handling customers, and a lot of that we're going to feed through those plants and so you get greater volume leverage, which is important. We've shown progression in our logistics network and how we can drive greater efficiency through that.
And then the last, one of the other challenges that we've been focused on and really made tremendous progress is efficiencies at the site, in terms of how the systems offer the recapture of the gas, how do you make sure that you minimize any loss of the molecule through the system. The combination of those things, coupled with the new agreement we signed with the third-party gas company last year that's reduced prices but also put us on a platform of working with them to optimize the network with which sites are sourced from which plants, all of those factors are what's been driving the improvement and we're going to see additional improvement this year. So I think we're going to directionally be moving there as we progress through the year. Part of it will be tied to the timing of turning on some of these volumes and getting additional leverage out of those facilities as the year progresses, but we expect that we have been, and we expect that we're going to continue to move in the right direction in that regard for the course of the year.
Analyst Craig Irwin (Ross Capital Partners): Good evening. Thanks for taking my questions. So first one I wanted to ask about is just an update on the cash needs this year. So you guys did a great job last year, $368 million in unrestricted cash exiting the year. You know, you got your cash burn, you know, down dramatically year over year. You know, you've put in place the 275 in asset sales. You're obviously continuing to execute on the... the restricted cash for your PPAs, your historical PPAs, as those roll off, and I guess as you make new sales, which is good. But can you maybe help us understand the tempo of cash needs across this year now that we don't have some of these big construction projects and that you've taken all these other steps to put in place, you know, the actions to get to positive EBITDA?
Executive Name (Title): Thank you for the question, Craig. Paul, do you want to go with that?
Executive Name (Title): Yeah, thanks, Craig, and good to hear from you, man. A couple things. One, if you look at the progression in the last couple years, just the improvements in margin and just overall profitability and how that's been playing, as well as our leverage of our working capital, you've seen the reduction in operating cash flows and cash burn in general. You've also seen a big reduction in the CapEx. I mean, I think if you look at the Q4 rates, they're one of the lowest CapEx rates we've had in a long time. It postures us really well because we expect, you know, certainly as we talk about our financial targets this year and getting to EBITDA, you know, break even to positive in Q4, you know, we expect, you know, a similar reduction, you know, in the cash burn that we've experienced the last couple of years. And so if you just look at that mathematically, coupled with a very, you know, nominal CapEx rate, it mathematically puts you in a position where, you know, the opening cash position we have is almost enough to cover it all. You know, obviously the 275 puts us in a great position to fund the year.
So, you know, we sit today and our working plan is that we've got more than adequate existing capital and access to that capital that's coming in through those projects to fund this year without needing an incremental capital. I do have optionality. I have an unleveraged balance sheet, so it's not my preference to go out and get debt. But, you know, obviously, and now that we've restructured the debt, I've got an incredibly low cost of capital structure in place right now, that 7% range, and so I'm in a good spot overall in terms of lots of other factors. There's other positive things that are happening, like we've gotten past through some of the acquisitions and the earnouts, and we've got some of those things behind us. We've really tempered the JV investments. A lot of things have just put us in a good position where just the overall cash needs have dropped substantially, so I guess in conclusion, you know, and if you look at seasonality of the sales with the one-third, two-thirds, you know, you can expect probably a little bit heavier burn in the first half.
And as the, you know, volume grows in the second half and we convert those into collections and leverage even more inventory, you know, it'll even be better in the second half. And as we sit today, given the working capital position, you know, for me, EBITDA is kind of a proxy of cash flows. So you could almost I think there's a decent chance we might even get to break even a positive cash flow in the Q4, not just the EBITDA's KPI as well. So I think hopefully that helps, Greg.
Analyst Craig Irwin (Ross Capital Partners): Fantastic. That's very helpful. So along a similar theme, right, your new project, new sales commitments that you're making today are obviously made with a different discipline than you had in the market a few years ago with the pricing changes and you know, the complete focus on profitability now at Plugged. You know, can you maybe just give us a little bit more color on the 750 megawatts new engineering design package agreements you signed the quarter? Are customers paying for these engineering packages up front now? What do we see as a potential timeline for some of these fresh new orders to come through and potentially materialize as bookings and then revenue? You know, how do we look at these opportunities And is this mostly a new set of customers, or has this got significant overlap with the existing customer base?
Executive Name (Title): Craig, thank you. I'm just going to, you know, clarify is focus on profitability through growth. So growth is a very important part of our strategy. And yes, the 750 megawatts of BDPs that we have signed and started working in the last few months are all new projects. Some projects are in North America, a couple of them are in North America. We also have projects in Europe. The timeline is a little bit different for each one of them. A couple of them are, at least at the moment, the FID timeline is into 2017, but there is one project that actually we are replacing and an existing prior electrolyzer company that is no longer going to be doing this project, and they have picked us to do this VEDP for them. You can, you know, infer probably what the company is, and that project is already pretty advanced, and what we're doing right now is basically doing a very quick VEDP, and that project has probabilities to BEFID in 2026. So a little bit of a different timeline for the different projects, but all of them are in the next 12 to 24 months in the current planning for the FIDs.
Analyst Luke (Craig Hallam): Hey, this is Luke on for Eric. Thanks for taking our questions. So first one here, just how do you expect activity on the hydrogen pipeline front in Europe to progress after last month's delivery announcement in the Netherlands? Should we expect to see further inroads there in 2026?
Executive Name (Title): Hi, Luke. You mean like the deployment or the development of the actual pipeline in the European market?
Analyst Luke (Craig Hallam): Yeah, and just potential inroads that Plug might be making there in 2026 and beyond.
Executive Name (Title): So if I understand correctly the question, the pipeline that you're referring to is in the Netherlands, which was announced a couple of years ago that we're continuing to do the deployment in that pipeline. What Plug and in general the industry benefits from is that having a pipeline allows us to basically have a pipeline for generation. And what we see, for example, in the Netherlands, we have several projects that we are discussing of companies that are looking into generating to put into that pipeline in particular. So it's a positive development in the industry, and it will help with projects going FID, given that they can deliver hydrogen to that pipeline. I don't know if that answers your question, Luke.
Analyst Luke (Craig Hallam): No, I think so. That's helpful. Thanks for the color. And just as a quick follow-up here, so just quickly on the data center opportunity, I mean, you pointed it out last quarter as having potential for hydrogen-based backup power, obviously framed as very early stages. Just wondering if you had any updated thoughts on potential use cases in this market.
Executive Name (Title): For the particular case of the data center opportunity, we agreed with Stream that we were going to be working on potential use. We have been concentrating with them right now on closing the deal itself, but open discussion on what we could use fuel cells for. So at this moment, we are concentrating on closing the deal. And in terms of applications, we're going to start discussing with them about what stationary applications we could launch together once the deal is closed.
Analyst Jason Tilchen (Canon Core Genuity): Good afternoon. Thanks for taking my question. With regard to material handling, I think the last call you said this is a $14 billion opportunity overall, and you've only really started to scratch the surface with this. Obviously, the price and availability of hydrogen could be a major gating factor. I'm curious, beyond that, what are some of the other things within your control that the company can do to sort of help capture an incrementally greater share of that opportunity going forward?
Executive Name (Title): Well, we're working with all of our main customers, pedestal customers like Amazon and Walmart, making sure that they can extract as much value of the technology as possible. One of the things that we are seeing, I think I mentioned that before, is that many of our customers are seeing the value of the utility advantages of using fuel cells. For many of our customers, they need between one and two megawatts to power batteries if they use batteries in their distribution centers. But when you use fuel cells, you open up that capacity for other uses or actually just to be able to reduce consumption and connection to the grid. Those type of things are the type of things that little by little we are discovering and working with customers to understand better how they can take advantage of the technology and to make sure that the business case can be expanded to as many applications within material handling as possible. We believe that as time goes by, we will be able to unlock further markets within the material handling business.
Analyst Jason Tilchen (Canon Core Genuity): Great. That's very helpful. And one follow-up. In the release, you talked about launching multiple follow-on actions to continue reducing costs and improving cash flow in 2026. I'm wondering if you could share a little bit more about specifics of some of those initiatives.
Executive Name (Title): Yeah. I think, you know... We are constantly looking at things like our bill of materials, our designs. We have opportunities to look at our manufacturing processes and think about how to streamline those. We're thinking about where we deliver from a distribution standpoint, a fabrication standpoint, our network for electrolyzers, for example. If you look at the last 10, 12 years, you know, the things that we've done and from looking at, you know, working with vendors on the supply cost to, you know, structures what we have with how we manage the supply chain to, you know, our manufacturing processes to, you know, even additional ways to optimize facilities as we would continue to reduce inventory. We need less warehouses as an example. So, we look at it holistically, and we believe we're still very early in the curve of opportunities over the next couple of years. So those are just some of the examples and ideas of things that we have active efforts around. We've had some very conscious efforts the last two years to deliver these specific targets and improvements, and we think that it's just themes that we can continue to optimize the overall company to continue driving the margin profile.
Analyst Chris Tendrinos (RBC Capital Market): Yeah, thank you. Maybe just to echo the congratulations on the positive gross margins this quarter. Following up on the last question, the press release I think also says that you're potentially looking at other asset monetizations that have been impaired. Can you maybe discuss what those might be, potential timelines on those opportunities?
Executive Name (Title): Yeah. Well, let me say it this way. If you go back the last couple of years, the themes that we've been talking about in some of these markets, you know, haven't kind of developed as fast as we thought. And so from an accounting standpoint, you do, you go through your accounting exercises and it kind of, you know, you land on the conclusions of what you can include in your forecast and so forth to, you know, that may or may not and create those impairments. But, you know, we still, we have incredible portfolio of assets and opportunities that we can either look for alternative ways to monetize it, like the data center sales, or we still have opportunities in the pipeline, you know, in these different markets that can manifest. And, you know, as they start to manifest, and we really believe it's a question of when. You know, I mean, I don't think anybody doesn't believe markets like mobility and high-power stationery, just to pick a few, aren't going to happen. It's just, you know, a question of when. And so as those things start to unfold, we still have all of these assets that we can really truly leverage. And so it could be a combination of, you know, sales in those spaces, or it could be a combination of alternative uses that we look at. So, you know, it happens, it's just one of the ways that we're really, you know, centering in with how do we get the best value of this big asset portfolio in the short term.
Analyst Chris Tendrinos (RBC Capital Market): Got it. And then I guess maybe as a follow-up here, you know, to You've got the $8 billion pipeline and just trying to think through, you know, maybe how much of this year's outlook is secured by that pipe or maybe what's in the backlog and just how you're thinking about, you know, I guess overall kind of confidence in the year given kind of existing commitments.
Executive Name (Title): So... For the year, on the outlook that we just discussed, which it is a growth similar to what we saw in 2025, we have very high confidence of probably close to 80% of that revenue amount, and also high confidence that we would be able to close the additional 20%. Entering the year with that high backlog, if you want to call it that way, it is a very good position to be able to project where we think we're going to end the year. Obviously, years advance as they go, but at this moment, we feel pretty confident on the projection that we just gave on similar growth as 2025.
Analyst Sherif El-Moghrabi (BTIG): Hey, thanks for taking my question. When you think about a potential hydrogen plant like New York versus the liquidity opportunity that presents, any insight you can share to how you balance that cash with, you know, your hydrogen fuel demand two years down the road, five years down the road?
Executive Name (Title): Hi, Sherif. Thank you for the question. So we have looked very carefully at our hydrogen needs and the potential or the probability or the possibility to monetize the assets like we did, that we're planning to do in New York. We mentioned this also in the prior earnings quote. What we have been able to do is we have been able to get to a an agreement with one of the largest IGCs to provide hydrogen for us at reasonable cost, much better cost than we were getting before. That added to the current capacity that we have right now, which is about 40 tons a day nominal capacity, and added to the possibility that we have also, and we are discussing with some customers that are planning to do liquefaction to take some offtake from those potential projects. We're comfortable that we have a good path to cover the demand in the next few years based on our projections for growth, especially in the material handling market. So we found that the capability to be able to monetize those assets was something that it was more valuable for PLAG at this moment than making the investment of building a plant in New York. We have not.
We put all those plans for growth for production on hold at this moment. That doesn't mean that in the future we may not pick up some of these plans when we are able to show that we can perform financially and maybe able to finance these projects in a much more efficient way. But at the moment, monetizing those projects. And with the hydrogen availability that we have visibility for, we feel that this is the best solution and the best path forward for PLAG.
Analyst Sherif El-Moghrabi (BTIG): Got it. Thanks, Jose Luis. And then the one big beautiful bill act reinstated tax credits, but it also introduced stricter requirements for eligibility. And that's something that's been a supply chain headache for some renewables players. So I'm wondering if Plug Power has had to retool its supply chain meaningfully.
Executive Name (Title): So for the IPC, the investment tax credit, what we have seen is that the requirements to be able to take advantage of the tax credit were meaningfully simplified from what they were before the bill that passed recently. Last year in Congress. So at this moment, actually, this 30% tax credit has become even a simpler way for our customers to take advantage of, and we've been discussing with many of our customers on this, and they agree on this point. So, you know, it's actually been an improvement on the tax credit process for our customers.
Analyst Samir Joshi (H-E-Bain): Hey, good afternoon. Good evening. Thanks for the questions. Hey, congrats on the new role, officially the new role.
Executive Name (Title): Thank you.
Analyst Samir Joshi (H-E-Bain): So I think I just wanted to hit on two broad categories. One, revenues from material handling. Are we looking to add additional pedestal customers just like the flooring company that was at the symposium? And then how on the electrolyzer front, the 8 gigawatt pipeline that you spoke about, how is that planned to be converted into orders?
Executive Name (Title): Thank you, Samir. On the material handling side, we are talking to many new potential customers. I think we're going to see some new customers being signed. And some of them, like you mentioned, floor and decor, can be multi-side or what we call pedestal customers. So there is an open door for new pedestal customers in 2026 and beyond. On the $8 billion funnel for electrolyzers, we continue working with many of the companies that we have in that funnel towards FID, towards the financial investment decision, final investment decision. What we're seeing in many cases is especially in the European market, but also, as I said, we're going to see some new opportunities closing in Australia, and we closed the opportunity in the UK with Cartoon Power and Shredder at the end of last year, which will be executed this year.
What we're seeing in the European market is that the RET3 regulation is being converted into law in many of the countries in Europe, which requires a certain percentage of the hydrogen use for transportation purposes, including refineries, to convert to green hydrogen at a rate of about 1% by 2030. This means that refineries like BP or GALP or other refineries in Europe are looking into ways to meet that requirement those requirements. And this is what is accelerating the investment decision in many of these projects. What we're going to see is in the next 12 to 24 months, as the mandate becomes law, we're going to see these projects come into fruition, and we're expecting to take a fair share of that funnel.
Analyst Samir Joshi (H-E-Bain): Thanks for that, Kala. And then on the margins front, I mean, really congratulations on the success on bringing margins down, especially on the services and also on the equipment. On the equipment sales going forward, should we continue, like, should we see 1Q positive gross margins or because of lower revenues expected seasonally, margins will be still in sort of negative teams. You want to go with that, Paul?
Executive Name (Title): For equipment in specific, yeah.
Executive Name (Title): Yeah, Samir, hey, bud. It's Paul. Yeah, I would say if you just look at it mathematically, with how Q1 typically is in relation to our annual sales on a seasonality standpoint, and you kind of apply that to the, you know, you know, the math that Jose shared with looking at sales projections next year, you know, I think you would see sequentially it coming down from Q4, you know, it should be, you know, probably better than, you know, in that range of the same percentage from last year's Q1. But just sequentially with the lower volume, equipment really is tied to leverage. And most of it is just timing of those sales. And so without that incremental volume in the quarter, comparatively speaking, it's definitely going to affect margins. So you probably see a bit of a dip on the absolute and on the equipment margin in particular. But there are some favorable opportunities events, you know, we definitely, all the rooftop consolidations, all the things we've been doing last year, you know, that play well in terms of mitigating some of that. So, on the whole, yes, but probably directionally better, certainly better than Q1 last year.
You're going to see progress both on sales and margin, you know, quarter over quarter, you know, I'm sorry, year over year on each quarter. So, you know, you probably, but if you look at one-third of sales happening in the first half of the year, you know, in two-thirds in the second half, you know, a lot of it is tied to volume. And, you know, when you look at what we've talked about for Q4 in particular, getting to that EBITDA's positive, you know, range with kind of a 300 million sales proxy, it just gives you a tone of, you know, how that might play for the year. So hopefully that helps.
Analyst Samir Joshi (H-E-Bain): Yeah, no, that is really helpful. And I wanted to reconfirm that. You're still targeting, or from where you sit right now, you still are seeing two-thirds of the field in second half, right?
Executive Name (Title): Yes.
Analyst Samir Joshi (H-E-Bain): Yes. Got it. Okay. Thanks a lot for taking the questions.
Executive Name (Title): No, thank you.
Analyst Chris Sung (Wolf Research Alliance): Hey, guys. Good afternoon. Congrats. Hey, congrats, Jose, on your first day on the job.
Executive Name (Title): Thank you.
Analyst Chris Sung (Wolf Research Alliance): Yeah, so most of my questions have already been asked, but I guess if you were to just provide some sort of guidance on your outlook for 2026, are you able to share the segment mix you're assuming across materials handling, electrolyzers, fueling, et cetera?
Executive Name (Title): So it's going to be similar to what we've seen in 2025. Probably we're talking in the 20, I will have to get the numbers a little bit more detail in there, but probably material handling would be in the 30 to 40% of revenues, right? And then you're going to see a similar amount, probably a little bit less on electrolyzers. And then the rest is going to be, you know, our fuel and cryo business. So that's kind of the mix that we're going to see. Material handling is still going to be the largest revenue generator for the company in 2026.
Analyst Chris Sung (Wolf Research Alliance): Right. And that makes sense. And just to follow up on one of your responses earlier, about 80% of 2026 kind of like firm or high confidence in the other 20. Is that kind of, is the right way to think about that the 20% are external factors for customers that need to hit specific milestones or outside of your control, or how do you think about that?
Executive Name (Title): That 20% is projects that we are in the process of closing right now, that probably we're looking into closing them in the next few months, that will secure the revenue for 2026. The other 80%, 77% to 80% is what I calculated that we have in high probability are projects that we either have a firm commitment from the customer or it's being finalized, the commitment. So that 20% is projects that are right now being negotiated, and we're expecting to close them within the year to be able to realize revenue within the year as well.
Analyst Amit Thakkar (BMO Capital Markets): Your line is now live. Amit, perhaps your phone is on mute. Please pick up your handset.
Analyst Amit Thakkar (BMO Capital Markets): Hi, thank you. Hi, good evening. Thanks for squeezing me in. Just one quick one for us. And Congrats. You mentioned kind of momentum and kind of growing with your existing pedestal customers. One of your larger pedestal customers, Walmart, you executed a release event license agreement with them earlier in this year. I was just wondering with your larger pedestal customers, to the extent they want to add more sites with you, do you anticipate kind of executing similar agreements with them before kind of doing so and throughout 2026?
Executive Name (Title): Are you referring to the licensing agreement? No, that was a very specific agreement with Walmart that we executed an agreement that actually will help us to continue building and growing the relationship with Walmart, but I'm not expecting any similar agreements with any other customers in 2026.
Analyst Amit Thakkar (BMO Capital Markets): Okay, and just maybe one quick follow-up on a different topic. I know Mueve in Spain, in Andalusia, kind of greenlit a very large electrolyzer project today. We're just wondering if you...