PLUG

It's now my pleasure to turn the call over to Vice President of Marketing Communications, Teal Hoyos. Please go ahead, Teal.

Thank you. Welcome to the 2026 first quarter earnings call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of 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, as such statements should not be read or understood as a guarantee of future performance or results.

Such statements are subject to 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 risks and uncertainties discussed under Item 1A, Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31, 2025, our quarterly report on Form 10-Q for the quarter ending March 31, 2026, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day in which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call as a result of new information. At this point, I would like to turn the call over to Plug Power's CEO, Jose Luis Crespo.

Thank you, Teal. Good afternoon, everyone, and thank you for joining us on our first earnings call of 2026. The first quarter results we announced today represent another important step forward in achieving the objectives we laid out for the year, delivering positive EBITDAs in the fourth quarter and sustaining revenue growth directionally consistent with 2025. In the first quarter, revenue increased 22% year-over-year to $163.5 million, with growth across each of our three strategic focus areas: material handling, electrolyzers, and hydrogen fuel. Gross margin also improved substantially year-over-year, increasing from negative 55% to negative 13%. This represents a 42 percentage point improvement in gross margin. The cost actions initiated under Project Quantum Leap are now substantially flowing through our P&L, and we expect gross margin to improve sequentially through 2026.

This is supported by a combination of volume leverage, mix, and continued cost discipline. In material handling, we continue to see a strong customer engagement driven by the combination of proven productivity gains, improved product reliability, and reduced dependence on electrical grid. In addition, the reinstatement of the Investment Tax Credit earlier this year has improved the economic attractiveness of hydrogen-powered solutions for many customers. As a result, we continue to project increasing demand from both Amazon and Walmart through new deployments and fleet refresh programs, with activity levels increasing across both existing, including our automotive customers and new customer accounts. Our electrolyzer business continues to demonstrate a strong commercial and operational momentum. Electrolyzer revenue increased significantly, growing from $9.2 million in the first quarter of 2025 to $40.8 million in the first quarter of 2026.

This reflects the timing of a specific project milestones across our portfolio with multiple large-scale projects now advancing through commissioning and delivery phases. We're currently in the commissioning phase of the 25 megawatt project with Iberdrola and BP in Spain, and we are finalizing installation activities for the 100 megawatt project with Galp in Portugal, two of the largest PEM electrolyzer projects currently under deployment in Europe. In addition, we recently announced the award of the front-end engineering design work for the 275 megawatt project with Hy2gen in Canada, further strengthening our global project pipeline. We're also seeing continued advancement from Allied Green Ammonia on the 2 gigawatt project in Uzbekistan, where several important milestones were achieved during the quarter. In April, Allied Green secured a binding project implementation agreement with the Uzbekistan government, establishing the tax and customs incentive framework supporting the project.

Just this past Friday, Allied Green signed a memorandum of understanding with Uzbekistan airports to collaborate on SAF and eSAF deployment initiatives. We're seeing increased activity across our approximately $8 billion electrolyzer opportunity funnel, especially within the aviation sector, where fuel availability due to the ongoing energy supply constraints and geopolitical instability affecting global fuel markets is renewing the interest in energy security and synthetic fuel production. Our fuel business delivered approximately 20% top-line growth year-over-year, driven primarily by new material handling site deployments and with margin improving by 54 percentage points year-over-year. We continue to improve plant performance, logistics efficiency across the network, and plant utilization. We still have a lot of work to do, but we are advancing in the right direction.

From a liquidity standpoint, we ended the quarter with $223 million in unrestricted cash and $579 million in restricted cash, for a total cash of $802 million. We continue to advance multiple asset monetization initiatives, including the Stream Data Centers that are expected to generate more than $275 million in additional proceeds with the first transaction for approximately $142 million expected to close in June. Our first quarter results represent another important step towards achieving our stated objectives of positive EBITDA in the fourth quarter of 2026 and advancing our broader path towards long-term profitability. The foundation is in place. Our focus is now execution, margin expansion, and converting scale into sustained profitability. With that, I'll now turn the call over to Paul, our CFO, for a more detailed review of the quarter financials.

Paul?

Thanks, Jose Luis. Let me start by emphasizing a few key of the takeaways for this call. First, demand across our core platforms remains strong, driving 22% year-over-year revenue growth. We continue to drive margin improvement, and the year-over-year progress reinforces our belief that we've hit an inflection point. Lastly, we believe we have more than adequate capital to fund 2026 based on our existing cash position through ongoing operational improvements, the varied asset monetization efforts, significant reductions in CapEx, and the quarterly restricted cash releases. Now, let me dig a bit deeper into the sales growth. Year-over-year sales growth stemmed from traction across all core platforms and reflects strong customer interest, which positions for continued growth throughout 2026.

Q1 results also stem in part from the timing of program deliveries and our conscious efforts to pull programs forward where possible. We will continue to focus on accelerating programs, but as of today, we think the first half will be in the 40% range for the full year in context of our overall guidance of the full year sales growth of 13%-15%. More specifically, excluding charges for customer warrants, year-over-year material handling platform grew by 15%. Our electrolyzer platform grew by 343%, and our hydrogen fuel sales grew by 10%. There will be ebbs and flows as we progress through 2026, but these results are indicative that we continue to expand our core markets, and we expect all the core platforms to continue growing.

Regarding margins, the improvement we delivered in Q1 stems from a culmination of ongoing efforts to optimize and scale the investments we've made. We've made a conscious effort to focus on margin and cash flow improvement, that includes the actions undertaken based on our product cost down roadmaps and conscious efforts to increase leverage on our OpEx cost. What you're seeing in Q1 is how those efforts are clearly showing up in the underlying economics of the business. On a year-over-year basis, gross margin improved by 71%. The drivers are the same ones we've been talking about. First, sales growth drivers operating leverage across the platform. Second, service continues to improve with quarterly per-unit GenDrive service costs down more than 30% year-over-year, driven by improved stack reliability and the pricing actions we continue to undertake.

Third, our fuel margin rate improved by approximately 50.4 percentage points. We're getting better leverage out of our hydrogen platform, driving enhanced network efficiency, and the third-party gas sourcing agreement we signed last year continues to deliver cost downs. Still a lot of work to do, but these structural improvements are driving the right direction. Equally important to these overall results is the fact that we see continued progression as we drive towards our 2026 financial targets. We expect a full year of benefits in the actions undertaken last year, and we anticipate continued improvement. Incremental leverage from growth in sales given our installed capacity, continued improvements in service cost profile, additional improvements in fuel efficiency and network leverage, and continued scrutiny over OpEx.

Given these continued efforts, we expect the margin breakeven threshold to continue to lower given traction in cost downs and our increasing ability to get more out of the platforms we have. Turning to cash, as a reminder, Q1 has historically been our heaviest cash usage quarter, given the seasonality of sales and timing of working capital flows. Q1 of this year is consistent with that pattern. There are two things I'd flag specifically. First, we made strategic buyouts of certain operating lease liabilities associated with our legacy PPA business during the quarter, which added to outflows, but is a net positive for us going forward. This is based on a conscious effort to accelerate the wind down of the PPA business model, and these efforts will be accretive to margins and cash flow going forward, serves as a means to accelerate the release of restricted cash reserves.

We expect more of these transactions as we progress through the year. Second, the underlying burn in Q1 tracked moderately better than our internal plan. We ended with over 10% more cash than we initially anticipated. This stemmed from many factors, including ongoing focus on margin enhancement and working capital leverage. We expect sequential improvement in cash usage across the balance of the year as we move towards our target of positive EBITDA run rates in the Q4 of 2026. CapEx was very nominal in the quarter, only about $7 million, which is consistent with what we said on the last call. Our hydrogen production network is built. We're now in a leverage the asset base phase, the CapEx run rates reflects that.

It postures us really well because as we talk about getting to an EBITDA positive run rate in Q4 2026, the combination of margin progression and a very low CapEx run rate mathematically puts us in a position where the cash burn for the year is very manageable given our capital resources and liquidity management plans. On liquidity, we ended the quarter with over $802 million in total cash. That's a $223 million in unrestricted cash and cash equivalents, and approximately $570.9 million in restricted cash that is expected to release at a rate of approximately $50 million per quarter over the next several years. On top of that, we have several specific levers tracking through 2026.

The first is the asset monetization program we announced in the fourth quarter of last year, which includes the expected Stream Data Centers transactions. We expect approximately $275 million in aggregate proceeds from these hydrogen project monetization efforts. In addition, we're underway with the sale of the Section 48 investment tax credit associated with the St. Gabriel joint venture, the platform we have there in Louisiana. That's $39.2 million in total, currently targeted to close by the end of May. We have an effectively unleveraged balance sheet given the debt restructuring we did in Q4 of last year, which also lowered our cost of capital and extended our maturity profile. We have optionality.

Our working plan is that the existing capital plus the expected asset monetization proceeds, coupled with the restricted cash release schedule, we believe collectively will provide adequate capital to fund the operating plan for 2026. Our adjusted EPS for Q1 2026 was -$0.08 compared to adjusted EPS in Q1 of 2025 of -$0.17. Excluded from our adjusted EPS in Q1 2026 is approximately $140 million in primarily non-cash charges related to adjustments for convertible debt and warrant valuations associated with changes in the stock market and the company's stock price escalation. I think the progression in the adjusted EPS is illustrative of how operationally the company is making real progress. To wrap up, Q1 was another step on the same trajectory we've been on.

We're growing the top line, we're delivering structural margin improvement, we're being disciplined on operational expenses and CapEx, we have multiple identified levers to fund the operating plans for the year. We continue to be laser-focused on driving margin and cash flow improvement and achieving our fourth quarter goal of positive EBITDA run rate, which sits within the roadmap Jose Luis described, including positive operating income in 27 and full profitability in 28. With that, I'll turn the call back over to Jose Luis.

Thank you both. Now we can go on the question section of the call.

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, 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'd like to remove yourself from the queue. As a reminder, please ask one question and one follow-up, then return to the queue. Our first question today is coming from Colin Rusch from Oppenheimer. Your line is now live.

Thanks so much, guys. You know, Jose Luis, you know, you're close to all these European customers. You know, it's good to see some of the progress that you're seeing on the electrolyzer side. I'm just curious about, you know, urgency and what you can comment on that pipeline starting to move towards, you know, final investment decisions besides the projects that you've talked about, and how we could think about that, you know, starting to materialize here later this year or next.

We continue working on, as I mentioned, on all the projects that we have in the funnel. These projects are quite complex, as you know, Colin. They require a lot of different parts of the projects to align to get to FID. I'm just gonna give you an example. I have a project in Australia. It's a 50-megawatt project, 50. The project is completely approved by the financial committee of the company that I'm working with. There is one permit that they need from a port. It's an easement permit that is actually holding the FID of the project for a month or so. The project is gonna happen. There's some bureaucracy around it.

My point is that there is certain level of complexity getting all these, all the things aligned on the FID of the projects. It takes time to get them to the point of final investment decision. We have a lot of projects now in the last quarter in the eSAF industry that have started accelerating. As you can imagine, the situation in Iran has created an issue with the availability of jet fuel in many areas of the world. In Europe, companies like Ryanair announced a couple of weeks ago that they will have limited amount of jet fuel available to run their operations, and they could run out of some of that fuel by the end of May, beginning of June.

This is leading to many companies actually pushing towards trying to accelerate these type of projects. Energy independence is becoming and security is becoming also, again, an important item in Europe. We see that these projects are beginning to accelerate a little bit more than what we were seeing a couple of quarters ago.

That's super helpful. Thanks, guys. Paul, just on the cash, you know, two questions. In terms of OpEx run rate on a cash basis, should we think about this first quarter run rate being stable here going forward? Secondly, you know, the inventory levels continue to remain relatively high. I'm just curious about how quickly you might be able to start drawing those down in a real meaningful way.

Thanks, Colin. On the OpEx, there was a few charges in there that won't repeat. You know, we're targeting roughly $75 million per quarter is where we expect that to land in. We're working hard to provide a lot of scrutiny over that so we can keep it contained and not grow that investment base. On the inventory, there was a slight, you know, reduction over the quarter, but the reality is, where you're gonna see the big movement this year is over the balance. Each quarter, we expect to grow sequentially, and then, and even more so in the second half. We're targeting about a $100 million reduction minimum this year in overall inventory levels, and we're working hard to beat that target.

I think you'll see the majority of that play out in the second half.

Perfect. Thanks so much, guys.

Thank you, Colin.

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

Good afternoon, everyone. Thanks for taking my question. I think last quarter, and even in prepared remarks, you've talked about the value proposition for the materials handling solutions only getting stronger with rising electricity prices. Just curious, could you talk a little bit more specifically to some of the conversations you've had with the prospective customers? Not necessarily some of the core customers, but some of the ones that are either smaller current customers or prospective customers, and how those conversations have evolved over the past few months. Thanks.

Hi, George Gianarikas. Thank you for the question. Mainly is, the conversations are always around productivity or that's our traditional value that we bring to the table. In the latest type of conversations that we're having with customers, there's an addition, which is the reduction of electricity demand on the site. Usually, in a site with 200 forklifts, you can reduce the demand on the site by 2 MW or so. That is really helpful, given the constraints of utility power that we're seeing, you know, in the country due to the demand from other industries like data centers. That is a huge value for customers.

Added to our traditional value on productivity gains, it creates an additional tailwind for the business case. That is the main topics that we usually discuss with new customers and even with existing customers.

Great. That's really helpful. Just one follow-up. In terms of the gross margin improvement, I believe you called out specifically the GenDrive service cost reductions. Maybe talk to some of the specific operational improvements and blocking and tackling that you've done that are really driving those savings there.

You wanna go with that?

Yeah. you know, it's multifaceted 'cause there's lots of elements to it. If you just think about it fundamentally, you know, we have equipment, we got service, and we got fuel. On equipment, you know, as we continue to grow sales, you're gonna get volume leverage. There's a lot of things we're doing in our production processes, you know, especially when you ramp electrolyzers as we have as an example. We talked last year about a program we rolled out at the end of the year, which we called a new diffusion bonding process that's just a microcosm example of cost reduction opportunities. In that, by using a new process, we were able to cut the cost of that component almost in half, you know.

It's as you scale and you get more of those opportunities with volume, you can do more of those kind of things. On the service front, you know, we've rolled out a lot of programs that's which is driving that per unit cost reduction. With less touches, we've actually been able to reduce the labor techs this quarter and increase the unit per labor tech rate. We've rolled out more programs and expect more that will continue to drive increased re-reliability on that. On the fuel, you've seen over the last, you know, year and a half, you know, a continued progression in the margin. Every quarter, it continues to get better.

That's a combination of leveraging on our plants, taking advantage of the new supply agreement with the third party provider, driving enhanced delivery, reducing delivery costs and optimizing that network and driving network e-efficiency. We've, you know, still got a long way to go there, but it's, you know, going the right direction. We expect those trends to continue. Those are some of the themes that we've been able to take advantage of and certainly consistent with what we're focused on to keep driving in the course of this year.

On services for GenDrive, for material handling, I'm just gonna add that the stack life of the product, we've been able to double it and in some type of models, even triple. That helps with the cost of parts for services, which is really important, but also because we're doing less changes in the field and less touches, as Paul was saying. We have also been able to reduce the labor in each one of the sites by one tech in some cases, or even two in some cases, which has had an incredible impact on the cost of labor for services.

Great. That's very helpful. Thank you very much.

Thank you.

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

Hi, Jose Luis. Hi, Paul.

Hi, Eric.

Hey, Eric.

Hey. So maybe just on material handling, as we think about 2026 and 2027, just curious, thoughts on how we should view the makeup, new versus existing customers. Also, in your prepared remarks, you talked about, you know, with Walmart and Amazon that you've got some new sites but also some refreshes. Just curious kinda where you see things in terms of that refresh of sites that, you know, maybe you did five, 10 years ago.

Thank you for the question, Eric. On material handling, for refreshes, we're gonna see in the next few years, specifically for Amazon, a refresh of the complete fleet. Our first site with Amazon was in 2016, and we are in 2026. They basically are using the GenDrives for about 10 years. Our first site, as I said, was in October of 2016. We're gonna begin to see big refreshes at the end of this year because the following year we did about 12 sites. We're gonna see a refresh of 12 sites between the end of 2026 and 2027. Then you will see a cadence of around 10 to 12 sites for the next 5 or 6 years or so.

We're gonna get refreshes of around 20,000 units during that timeframe. Walmart is similar. With Walmart, we have done refreshes in years five and six, and we are right now discussing a substantial refresh of the install base in 2026 and 2027. That is gonna create a increase on demand for GenDrives. As Paul was saying before, equipment margins are usually healthy, so we will see the impact of that in the next few years. In terms of new, and even growth with other existing customers, what we're seeing is, for example, on the automotive side, we are doing refreshes on new sites with BMW, a couple of new sites in Europe with BMW.

We are also seeing some growth with Stellantis and other European automakers. We are signing either second sites or new sites with other customers. Like, for example, this quarter, we signed a brand-new pretty large site with Southwire, with a value of $11 million. We're seeing activity everywhere. We still see, you know, obviously, our two main customers, Walmart and Amazon, and two of the largest companies in the world. We are gonna see, you know, a lot of impact on their demand in the next couple of years, but that's just healthy. We have the diversification of all of our other products.

We see the material handling market moving forward and growing in this year and in the following years.

Okay. I appreciate it. I'll leave it there. Thanks.

Thank you.

Thank you. Our next question is coming from Sherif Elmaghrabi from BTIG. Your line is now live.

Hey, good afternoon. Thank you. Paul, you touched on this, Q1 saw another big improvement in fuel margins. The new gas supply contract is obviously helping with that. Have all of your legacy contracts with the IGCs rolled off at this point? I guess really I'm trying to understand if there's room to increase utilization at your captive plants, Louisiana, Georgia, and Tennessee.

The short answer to your question is on the sourcing, you know, the portfolio runs at different cycles in some of those contracts, and they all terminate at different time periods. Today, consciously, it's, you know, roughly 50/50 sourcing third party versus internally leveraging our plants. You know, and there's strategic reason why to keep that relationship in good standing and leverage those because our plants are as an example are in the Southeast. It, you know, it can be expensive to truck, you know, hydrogen all the way over to California or up to the Northeast.

Fortunately, with the agreement that we signed, it put us in a good footing, with a substantial reduction in the cost per molecule, as well as a means by which to work with them to continue driving improved efficiencies and network optimization. You know, the drivers for us as we go forward are, you know, leveraging our plants, you know, and as we continue to grow sales in more sites, and third-party sales. You know, you've seen some smaller announcements recently where we're starting to sell into the merchant market, as an example, and take an opportunistic opportunity there where we can to do that. Leveraging those plants will continue to grow and scale and leverage that overhead.

The second is really optimizing the delivery network, really getting into, you know, how you deliver and when you deliver and how you manage that. You know, there's tons of opportunities there. Then, the efficiencies of network. We've made huge strides on improving efficiencies of our storage systems and our dispensing, you know, capabilities, but there's still opportunities there as well. Those are some of the drivers as to what you've seen as to why the margin continues to get better quarter after quarter. It's certainly the same themes that we've got a daily focus on across all those opportunities, that will continue to drive that over the course of this year.

Got it. That's helpful. Paul, I have one more for you. I missed how much you're expecting from the monetization of the Louisiana tax credit, and if you could share how that compares with Georgia, that'd be helpful.

Yeah. Absolute value, it's actually a little bit more. On a gross basis, it's like $39.4 million, I think the number was. It's just to clarify, it's for our joint venture that we have in Louisiana. That's proceeds that joint venture will get for selling that. We obviously, as you, I think you probably know, we consolidate that entity, those results will show up in our consolidated results. We'll work with the JV partner, whether we leave that $39 million in the JV to fund operations or whether they take their portion and we take our portion. Obviously, if it goes that route, it's incremental $20 for plug to fund operations, which is obviously very helpful.

We actually got better terms on that than we did in Georgia just because of the, you know, passage of time and the learnings that we got out of the Georgia sale. On a net basis, in terms of the gross tax credit, we got a better rate.

Great. Thanks again.

Thank you.

Thank you. Our next question today is coming from Dhrushant Alani from Jefferies. Your line is now live.

Yes, thanks for taking my question. Just one quick one. I guess, if you're talking about the revenue progression for the year, you know, I think it implies that maybe 2Q might be slightly down quarter-over-quarter. Is that correct? Then maybe, you know, what's kind of driving that? Was there any demand kind of pulling in, into 1Q? Then also, if 2Q is gonna be down quarter-over-quarter, then how do we think about just the margin progression there in terms of, you know, the polymetric leverage that you have shared previously?

Yeah. Let me try. There's many parts to your question, you know, if you look historically, we're somewhere between one-third to 40%. You know, on the first half of any year, it varies a lot based on timing of customer programs and, you know, most times Q1 is lower than Q2. You know, let me, let me be clear. We expect Q2 to grow sequentially. I think, you know, we're giving you guys a directional guidance and using that 40% in relation to our 13%-15% growth rate for this year. You know, it may only be slight growth off of Q1, but it's definitely gonna be, you know, slightly better.

Then, and then, you know, then you have the second half. The timing of that, we know, you know, we'll see as we continue to progress through the year how that's gonna play. On the margin progression, you know, again, just to be direct, we absolutely expect the margin rate to continue to improve sequentially quarter-over-quarter. All the cost down and things that we're doing, you know, are gonna continue to drive incremental benefits. We expect that margin rate to improve, you know, in Q2 and then, and then continue to ramp from there.

Volume makes a big difference, the fact that the second half is, you know, using my math, of roughly 60% of the sales, you know, it means there's even more equipment sales in that second half, that means it's even more accretive. You know, I think what you're gonna see is quarter-over-quarter, you're gonna see growth in the sales number, you're definitely gonna see or I should say, you know, we expect it to see growth in the margin rate.

Yeah. I just want to reinstate what you just said, Paul. Q2 will be progression in terms of top line compared to Q1.

Got it. Thank you.

Thank you. Next question is coming from Chris Dendrinos from RBC Capital Markets. Your line is now live.

Thank you. I just wanted to circle back to Europe a little bit here. I'm curious, you know, looking at some of these refineries and then the customer base there, are they kind of ultimately settling out on a long-term partner here and, and picking tech? I guess just looking back over some of these, you know, the competitors out there, it looks like there have been, you know, testing of different technologies, et cetera. I'm just kinda curious what you're seeing on that front. Thanks.

We're seeing specifically with the companies that we're doing business in the refinery side, the largest ones that I mentioned during the call. We're seeing that they are looking at expansions in the sites that we have done and in other sites. We're seeing that the progression that we're making on the commissioning of the product is very satisfactory, and we are looking with them about working together for some of those expansion projects.

Given the directives that the EU is pushing through every country, through a process that they call transposition, which is as simple as a European law converted into a law in each one of the countries that are members of the EU, they have a mandate to convert a certain percentage of the hydrogen they use into green hydrogen, and this is what's driving these projects. They are committing to do it, and we're working with them to satisfy those needs.

Got it. Thank you. I guess maybe as a follow-up here, you know, just on the opportunity with Allied Green and Uzbekistan and maybe in Australia as well, you know, can you speak to the potential timing of this and how you see that kind of trend, I guess, playing out over the course of the year? Thank you.

Yes. I mean, I can speak to the timing that I've discussed with Alfred from Allied Green in the last discussions I had with him as last week, right? These timings, as I said before, because of the complexity of these type of projects, usually, you know, change. Right now, the objective will be to do a BDEP on the Uzbekistan project in the second. BDEP is a Basic Design and Engineering Package. In the second half of 2026. His target is to get to FID in the following months with a potential loan notice to proceed to Plug earlier than that.

It is a project that could, and I insist, I don't, I don't wanna create an expectation that I cannot live up to because there are so many things that are outside of my control in these projects, right? In the last conversations, it's, it's a project that should be moving forward in the next 12 months, with a BDEP happening before and with a loan notice to proceed also, in that timeframe.

Got it. Thank you very much.

Thank you.

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

Hey, guys. It's Andrew on for Craig. Thank you for taking my questions. I've been hopping across a couple calls, so I apologize. If this has been asked already, just let me know, I can ask something else. You guys called out expansion with Amazon and Walmart with the material handling. Can you guys kind of talk to any new logo pipeline expansion? Just overall kind of the mix between, you know, site expansion with the existing customers versus, you know, new customer wins, that would be great.

Our team was in MODEX. MODEX is the largest event for manufacturing and supply chain in April. Our team met with a large amount of companies, new companies, new logos that were interested in the material handling business case, given the points that I made before, mainly associated with productivity, with the ITC, and also the advantages associated with reducing the grid demand. At this moment, the majority of the growth that I see in 2026 are related to existing customers. As I said before, mainly Amazon, mainly Walmart, and also associated with automotive. We have new projects with BMW, we have projects with Stellantis and with other European automakers. We closed another second site with Southwire, as I mentioned before.

That's not a new name, but it's a second site that we closed with them. We have a fairly, you know, healthy pipeline of new names and new customers. At this moment, I'm not in position to tell you right now that we're gonna get, you know, orders for certain specific names, but I can tell you that the team is working in a few new potential accounts that could be added between now and the end of the year for projects in 2027.

Great. Well, I really appreciate the color there. Second for me, kind of in the same vein, I noticed the GenDrive cost per unit was down 30% year-over-year. Can you just kind of talk about the potential to, you know, leverage cost reduction throughout your install base?

Yeah. I think our anticipation is that that unit cost will continue to come down, and it really comes from 2 key drivers. Well, I'd say 3. First is the parts cost continues to go down as we get the units to continue to run longer, so you just need less parts to keep them up and running. Second is, as that happens, you need less touches of the units throughout the year. When you need less touches, then you can manage the fleet with less labor techs. We're able to, as Jose said earlier in the call, we're able to reduce, in some cases, 1 tech per site, in some cases, even 2 techs per site. You know, we expect that leverage continues as we get and continue to grow and scale.

The third is you sell more units and you grow your sales base, you know, you can leverage the overhead for that service business. That continues to scale and grow and ramp as well. You know, we expect that rate per unit will continue to go down in the course of the year. You know, we expect that to continue to drive in the right direction.

Understood. Appreciate the detail, and congrats on the continued progress.

Thank you so much.

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

Well, thank you, everyone, for for the questions and for your engagement and your support. The first quarter results that we just announced provide a solid foundation for the balance of the year. Our priorities for 2026 are the same. They remain unchanged. Drive continued sales growth, execute with discipline, continue improving our cost structure, reduce cash usage, and deliver positive EBITDAs in the fourth quarter. The underlying business fundamentals continue to improve. Demand drivers across our core markets are strengthening, and now it's just about consistent delivery. Again, we appreciate your continued support and look forward to updating you on our progress in the next quarter. Thank you, everyone. Have a nice evening.

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

Greetings, and welcome to the Plug Power Q4 and Year-End 2025 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Teal Hoyos, Vice President, Marketing and Communications. Please go ahead, Teal.

Thank you. Welcome to the 2025 Fourth Quarter Earnings Call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations, of 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 subject to 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, risks and uncertainties discussed under Item 1A Risk Factors in our annual report, on Form 10-K for the fiscal year ending December 31, 2024, or quarterly reports on Form 10-Q for the quarters ended March 31, 2025, June 30, 2025, and September 31, 2025, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day in 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 new CEO, Jose Luis Crespo.

Good afternoon, everyone, and thank you for joining us. As many of you know, today is my first earnings call as CEO. I would like to begin by acknowledging the foundation I am inheriting. Andy led this company for almost 20 years with vision and determination, building Plug into a global leader in the green hydrogen ecosystem. That is a platform a few CEOs are fortunate to inherit and I am grateful for it. My mandate is clear. I will work to convert this leadership position into sustained profitable growth. I have been part of building this company, setting and executing on its strategy. I deeply understand both the opportunity in front of us and the discipline required to realize it. We entered 2025 focused on these objectives: grow the top line; improve margins, targeting margin neutral in Q4; reduce cash usage; expand hydrogen production, including commissioning the Louisiana plant all while strengthening liquidity. We delivered against those objectives. In 2025, we achieved approximately 13% revenue growth while turning gross positive margin in the fourth quarter. Gross margin improved by 125 percentage points, from negative 122.5% in Q4, 2024 to positive 2.4% in Q4, 2025. A 125 percentage point improvement in gross margin is a meaningful milestone in strengthening our operating performance. The results we delivered were not accidental. They reflect ambition paired with discipline, focused execution and the hard work of the entire Plug team. 2025 was a defining year for Plug. In a highly uncertain macroeconomic environment, we grew revenue at double-digit rates and achieved positive margin. A combination that has been challenging for many companies in our sector. We believe this represents an inflection point. Now that said, we are not done. We still have work to do to achieve sustained profitability while maintaining growth. My responsibility now is to build on this momentum and continue progressing toward profitability. In 2026, our focus remains on advancing toward profitable growth. We currently expect revenue growth in 2026 to be directionally comparable to 2025, driven primarily by our material handling and electrolyzer business. In material handling, favorable conditions have emerged. The reinstatement of the investment tax credit in January, combined with increased demand from pedestal customers such as Amazon and Walmart position us for renewed growth in this segment. We are seeing new developments and fleet refresh programs at key customer sites, while activity increased across both new and repeat customers. Our electrolyzer business continues to develop and expand globally. Today, the company has shipped over 300 megawatts of our GenEco electrolysis globally, and are now deployed on six continents, demonstrating significant operating experience across multiple markets. In 2025, we delivered equipment for major projects, including a 25-megawatt project with Iberdrola and BP in Spain, and a 100-megawatt project with GALP in Portugal, resulting in a record $188 million in electrolyzers revenue. Europe's regulatory mandates and funded incentive programs provide a structural support for hydrogen adoption. We see significant opportunity in refinery decarbonization and in the production of e-methane, e-methanol, synthetic jet fuel and ammonia. We estimate that meeting European mandates just for transportation could require 4 to 6 gigawatts of electrolyzer capacity by 2030, and we intend to compete for a meaningful portion of that opportunity. We remain focused on converting as much as possible of our approximately $8 billion electrolyzer funnel into revenue-generating projects that will support Plug's long-term growth. In 2026 we expect to begin executing projects with Carlton and Schroders in the U.K., and we will continue progressing with Allied Green Ammonia towards FID on the 3-gigawatt project in Australia, and the 2-gigawatt project in Uzbekistan. As an example of the activity in the market, over the last 2 months, we executed 750 megawatts of new basic engineering design packages agreements. In 2026, we expect to see full year benefit of the Quantum Leap initiatives launched in 2025. These improvements are expected to be further supported by continued cost reductions and optimization efforts across the business. Together with revenue growth, these actions position us to achieve positive EBITDAS in the fourth quarter of 2026, consistent with our previously stated targets. We also intend to continue reducing cash usage in 2026. We ended 2025 with $368.5 million in unrestricted cash. We currently expect continued improvement in cash usage similar to the reduction achieved in 2025. With ongoing cash flow improvements and the planned $275 million proceeds from the monetization of assets, and associated rights announced in Q4, 2025, which we expect to close in the first half of 2026, we believe we are well positioned to support our operation plans through 2026. In conclusion, we continue our journey towards profitability. 2025 was about margin progression, optimizing the platform we have built, enforcing cost discipline, strengthening infrastructure control, improving liquidity and sharpening our strategic focus. 2026 will be about continued sales growth and advancing the financial milestones outlined in our road map, including our target of achieving positive EBITDAS in Q4, 2026, a milestone within our road map towards positive operating income in 2027, and full profitability in 2028. With that, I will now turn the call over to Paul for a detailed review of the fourth quarter and full year financial results. Paul?

Thanks a lot, Jose Luis. Let me first expand on the margin results. The significant improvement we achieved stems from a culmination of efforts over the last 2 years to optimize and scale the investments we have made. We've made a conscious effort to really focus on margin and cash flow improvement. And this includes multiple actions undertaken within Project Quantum Leap and our overall product cost down road maps. More specifically, in Q4, the results benefited from significant improvements in the unit service costs; achieving rates almost half of what they were over -- a little over a year ago; ramping our hydrogen platform through our three facilities, including Louisiana that was turned on and scaled up this year; scaling sales volumes as increased sales provides tremendous incremental overhead leverage and continued discipline and scrutiny over discretionary spending. Equally important to these Q4 results is the fact that we see this progress as a platform to continue driving towards our 2026 financial targets. Regarding cash usage, we saw improvements throughout the year, and these actions were associated with Project Quantum Leap and included targeted price increases, labor optimization, rooftop consolidations, improvements in production costs and leveraging our hydrogen platform, and clear focus on reducing our OpEx resource investment. We expect 2026 to include a full year of benefits from these activities undertaken last year. In addition, we see significant upside to continue this optimization effort and drive even more leverage as we grow sales. We anticipate continued improvement, incremental leverage from growth in equipment sales, given our capacity, continued improvements in our service cost profile, additional improvements in fuel efficiency and network leverage, and continued scrutiny over OpEx and resources. We continue to be laser-focused on driving growth in margins and cash flows in near term and achieving our Q4 goal of positive EBITDAS. Despite the progress we made, as conveyed in our filing, we determined it was prudent for Plug to record a net $763 million in various charges associated predominantly with noncash charges for asset impairments and the capital transactions we undertook in Q4. The impairment charges stem from multiple factors, including overall market conditions, resulting in slower growth than anticipated for certain products. In terms of impairments, this relates to property, plant and equipment, intangible assets, and assets associated with power purchase agreements and fuel. As a result of these impairments, it will reduce our future amortization and depreciation in '26 and onward. In terms of liquidity, as Jose mentioned, we ended with over $368 million in unrestricted cash. We recently executed the first of three transactions associated with monetizing the $275 million for the data center project sales. We have an effectively unleveraged balance sheet, given our debt restructuring we undertook, which also lowered our cost of capital and extended the maturity. We have also significantly curtailed our CapEx expenses, and we believe we have the platform we need to deliver our financial goals, so we anticipate even lower CapEx rates in 2026. These factors, coupled with the focus on improvement in margins and cash flows put us in a strong position to achieve our near-term and midterm financial goals, and fund our operating plan for '26. GAAP EPS for Q4 '25 was $0.63 negative, compared to GAAP EPS of negative $1.48 for Q4 '24. But if we exclude the unusual charges in each period, adjusted EPS for Q4 '25 was negative $0.06, versus adjusted EPS for Q4 '24 of negative $0.29. And the progression in this is just another illustration of how operationally the company is making progress holistically in growing overall sales and margin profiles. I'll now turn the call back over to Jose Luis.

Thank you, Paul. We will now open the call for questions.

[Operator Instructions] Our first question today is coming from Colin Rusch from Oppenheimer.

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?

So for 2026, as I mentioned, we are projecting similar growth as we saw in 2025. And 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 are also seeing refreshes. Some of the sites that we have with some of the pedestal customers are sites that have been running between 5 and 6, 7 years, time to refresh. So we see an uptick on that. We also see new customers. As you know, we signed Floor and Decor last year, but we see other customers coming online in 2026. And also the value proposition is just getting stronger when -- and I think we mentioned this during the symposium. 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 further 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.

Excellent. And guys, 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 breakeven on the fuel side?

Yes. Thanks, Colin. I think just to clarify, 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 them puts us in a great position and we've seen that in the benefits in our results. We see that continuing to trend upwards. 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 in 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 we've been focused on and really made tremendous progress is the efficiencies at the sites in terms of how the systems -- the -- recapture the gas, how do you make sure that you minimize any losses of the molecule through the system. So 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. And part of it will be tied to -- the -- timing of turning on some of these volumes, getting additional leverage out of those facilities as the year progresses. But we expect that we're -- 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.

Next question today is coming from Craig Irwin from ROTH Capital Partners.

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 restricted -- in unrestricted cash exiting the year. You got your cash burn down dramatically year-over-year. You've put in place the $275 million in asset sales. You're obviously continuing to execute on 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, the actions to get to positive EBITDA?

Thank you for the question, Craig. Paul, do you want to cover that?

Yes. Thanks, Craig. A couple of things. One, if you look at the progression in the last couple of 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 were one of the lowest CapEx rates we've had in a long time. So it postures us really well because we expect certainly, as we talk about our financial targets this year and getting to EBITDAS breakeven to positive in Q4, we expect a similar reduction 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 nominal CapEx rate, it mathematically puts you in a position where the opening cash position we have is almost enough to cover it all, but obviously, the $275 million puts us in a great position to fund the year. So 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 incremental capital. I do have optionality. I have an unleveraged balance sheet. And so it's not my preference to go out and get debt. But obviously -- and now that we've restructured the debt, I've got an incredibly low cost of capital structure in place right now, in 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 earn-outs, and we've got some of those things behind us. We've really tempered the JV investments. A lot of things have just been very -- put us in a good position where just the overall cash needs have dropped substantially. So I guess in conclusion -- and if you look at seasonality of the sales, with the 1/3, 2/3, you can expect probably a little bit heavier burn in the first half. And as the volume grows in the second half when we convert those into collections, and leverage even more inventory, it will even be better in the second half. And as we sit today, given the working capital position, for me, EBITDAS is kind of a proxy of cash flows. So you could almost -- I think there's a decent chance we might even get to breakeven to positive cash flows in the Q4, not just the EBITDAS KPI as well. So I think, hopefully, that helps, Craig.

Fantastic. That's very helpful. So along the -- 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 the complete focus on profitability now at Plug. Can you maybe just give us a little bit more color on the 750 megawatts in new engineering design package agreements you signed in the quarter? Are customers paying for these engineering packages upfront now? What do we see as a potential time line for some of these fresh new orders to come through and potentially materialize as bookings and then revenue? 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?

Thank you. I'm just going to clarify is, focus on profitability through growth. So growth is a very important part of our strategy. And yes, the 750 megawatts of BEDPs 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 time line is a little bit different for each one of them. A couple of them are -- at least at the moment, the FID time line is into 2017 (sic) [ 2027, ] but there is one project that actually we are replacing, an existing -- a prior electrolyzer company that is no longer going to be doing this project, and they have picked us to do this BEDP for them, you can 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 BEDP. And that project has probabilities to be FID in 2026. So a little bit of a different time line for the different projects, but all of them are in the next 12 to 24 months, in the current planning for the FIDs.

Congratulations on the progress here.

[Operator Instructions] Our next question is coming from Eric Stine from Craig-Hallum.

This is Luke on for Eric. 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? Is that -- should we expect to see further inroads there in 2026?

Luke, do you mean like the deployment, or the development of the actual pipeline in the European market?

Yes. And just potential inroads that Plug might be making there in '26 and beyond.

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 an offtaker 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.

No, I think so. That's helpful. And just as a quick follow-up here. So just quickly on the data center opportunity. I mean, you pointed out last quarter as having potential for hydrogen-based backup power. Obviously, framed it as very early stages. Just wondering if you had any updated thoughts on potential use cases in this market?

For the particular case of the data center opportunity, we agreed with Stream that we were going to be working on potential applications. We have been concentrated 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 concentrated in 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.

Your next question today is coming from Jason Tilchen from Canaccord Genuity.

With regard to material handling, I think in 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 is clearly a major gating factor. But 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?

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 1 and 2 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 types 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. And we believe that as time goes by, we will be able to unlock further markets within the material handling business.

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 '26, wondering if you could share a little bit more about specifics of some of those initiatives?

Do you want to cover that, Paul?

Yes. I think we are constantly looking at things like our bill of materials or designs. We have opportunities to look at our manufacturing processes and think about how to streamline those. We're thinking about how we -- where we deliver from a distribution standpoint, a fabrication standpoint, our network for electrolyzers as an example. There's just -- we -- if you look at the last 10, 12 years, the things that we've done and from looking at -- working with vendors on the supply cost to structures that we have with how we manage the supply chain to our manufacturing processes to even additional ways to optimize facilities. As we continue to reduce inventory, we need less warehouses as an example. So we look at it holistically. And there's -- we just -- 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 in the last 2 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.

Next question is coming from Chris Dendrinos from RBC Capital Markets.

Maybe just to echo the congratulations on the positive EBIT -- 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 had been impaired. Can you maybe discuss what those might be, potential time lines on those opportunities?

You want to...

Well, let me say it this way. If you think -- if you go back the last couple of years, the themes that we've been talking about in some of these markets, 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 land on the conclusions of what you can include in your forecast and so forth that may or may not create those impairments. But we still -- we have an 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 in these different markets that can manifest. And as they start to manifest -- and we really believe it's a question of when. I mean, I don't think anybody doesn't believe markets like mobility and high-power stationary, just to pick a few, aren't going to happen. It's just 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 sales in those spaces, or it could be a combination of alternative uses that we look at. So it happens. It's just one of the ways that we're really centering in with how do we think get the best value of this big asset portfolio in the short term.

Got it. And then I guess maybe as a follow-up here. You've got the $8 billion pipeline. And just trying to think through, 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, I guess, overall kind of confidence in the year, given kind of existing commitments.

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 -- confidence that we will be able to close the additional 20%. So 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 for similar growth as 2025.

Our next question today is coming from Sherif Elmaghrabi from BTIG.

When you think about a potential hydrogen plant like New York versus the liquidity opportunity that presents, any insight you can share as to how you balance that cash with your hydrogen fuel demand 2 years down the road, 5 years down the road?

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 call. What we have been able to do is we have been able to get to an agreement with one of the largest IGCs to provide hydrogen for us at reasonable cost, much better cost than we were getting before. And 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 for -- 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 Plug 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 Plug.

Got it. 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?

So for the ITC, 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 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 it's actually been an improvement on the tax credit process for our customers.

Your next question is coming from Sameer Joshi from H.C. Wainwright.

Congrats on the new role, officially the new role. So I think, I just wanted to hit on two broad categories on 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 electrolyte front -- electrolyzer front, the 8-gigawatt (sic) [ $8 billion ] pipeline that you spoke about, how is that planned to be converted into orders?

So on -- thank you, Sameer. 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-site, 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 with some -- especially in the European market, but also, as I said, we saw -- we're going to see some new opportunities closing in Australia, and we closed the opportunity in the U.K. with Carlton Power and Schroders at the end of last year, which will be executed this year. What we're seeing in the European market is that the RED III regulation is being converted into law in many of the countries in Europe, which requires certain -- especially for the transportation sector, 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 to ways to meet that -- 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 coming to fruition, and we're expecting to take a fair share of that funnel. So that is kind of the time line that I'm looking at right now for conversion of the funnel.

And then on the margin 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 teens?

Do you want to cover that, Paul?

For equipment in specific. Yes.

Yes. Sameer, it's Paul. Yes. I would say if you just look at it mathematically with how Q1 typically is in relation to our annual sale on a seasonality standpoint and you kind of apply that to the math that Jose shared with looking at sales projections, next year, I think you would see sequentially, it coming down from Q4. It should be probably better than in that range of that same percentage from last year's Q1 but just sequentially with the lower volume. Equipment really is tied to leverage. So -- 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 margin. So you probably see a bit of a dip on the absolute and on the equipment margin in particular. But there are some favorable events. We definitely -- all the rooftop consolidations, all the things we've been doing last year 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 quarter-over-quarter -- I'm sorry, year-over-year on each quarter. So you probably -- but if you look at 1/3 of sales happening in the first half of the year and 2/3 in the second half, a lot of it is tied to volume. And when you look at what we've talked about for Q4, in particular, of getting to that EBITDAS positive range with kind of a $300 million sales proxy, it just gives you a tone of how that might play for the year. So hopefully, that helps.

Yes. 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 2/3 of the sales in second half, right?

Yes.

Yes.

[Operator Instructions] Our next question is coming from Chris Senyek from Wolfe Search.

Congrats, Jose, on first day on the job. Yes, 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 '26, are you able to share the segment mix you're assuming across materials handling, electrolyzers, fueling, et cetera?

So it's going to be similar to what we've seen in 2025. Probably we're talking in the -- I will have to get the numbers, a little bit more detail in there. But probably material handling will be in the 30% to 40% of revenues, right?

Yes.

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 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.

Right. And that makes sense. And just a quick follow-up on one of your responses earlier about 80% of '26 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 are -- that need to hit like specific milestones, or like outside of your control? Or how do you think about that?

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.

Congrats again on a nice quarter.

Our next question today is coming from Ameet Thakkar from BMO Capital Markets.

Just one quick one for -- Jose, congrats. Just you mentioned kind of momentum in 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?

Yes, you're 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.

Okay. And just maybe one quick follow-up on a different topic. I know Moeve in Spain, in Andalusian kind of greenlit a fairly large electrolyzer project today. I was just wondering if you guys have any kind of role in that project while I have you.

No, that was a project that was announced earlier in 2024. So it's been a project that has been out there for a while. It seems like it went FID this week, today. And as far as I know, and I will have to kind of look at that, it is an alkaline project. It's a 300-megawatt alkaline project, and we are not part of that project. We are talking to other -- and we're talking to refineries in Spain about projects as well, but that project, in particular, is a 2024 project that seems to be going FID at this moment. But I think it's good news in terms of the conversion that we're going to start seeing, as I was saying before, of projects to FID. These are projects that have been hanging for the last 24 months, and now they're coming to fruition. This is kind of what we're expecting to see in the near future with the projects that we have in our funnels.

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

Well, thank you, everyone, for the thoughtful questions and for your continued engagement, and for joining us on, my first, earnings call as the CEO. Let me leave you with this: 2025 mark a structural turning point for Plug. We demonstrated that we can grow revenue while restoring margin discipline, and that combination matters. In 2026, our focus and targets are clear: execute with discipline, reduce cash usage and deliver EBITDAS positive in the fourth quarter. The foundation is in place. The cost structure is improving, and the demand drivers are strengthening. We really appreciate your support and look forward to updating you on our progress next quarter. And also, you are free -- Friday, I'm going to be closing the bell at Nasdaq. So you can go to our website, and you're going to have a link to see me and a big part of the Plug team that has made the results this year in 2025 possible, closing the bell with me. Thank you, everyone. Really appreciate your time.

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.