Bloomberg Audio Studios, podcasts, radio news. Shares of the green hydrogen company plug Power closed two and a half percent lower last Tuesday, that was the first day of trading after the company reported net revenue for the second quarter that came in above estimates, but the bottom line was
the issue. EPs missed the average analyst estimate. Plug provides hydrogen products including electrolizers, hydrogen transport, storage and dispensing solutions, and more to a variety of customers including Walmart, Amazon, Home Depot, Airbus, at and T, Kroger, FedEx Pgeni, Coca Cola, and more. We've got back with us Andy marsh, the CEO of plug Power. He joins us from just outside of Albany. Andy, always good to have you on the program. I want to start with your customers. I mentioned just
about ten of them. The list goes on, what are you hearing from them in a world where green energy is no longer sort of the buzz phrase buzzword, there's not the same government incentives for this stuff that there was in the last administration. What are you hearing from them right now?
So the last part of that, Tim's that true. The incentives for forty eighty, which is the tax credit for fuel cells, and the last bill is actually much better than it was.
Well, I was talking about green energy as sort of a monoliths, just to be clear.
Yeah, So when I look at first globally, the incentives for hydrogen and fuel cells and green energy remains robust. And if you look at our business in the second quarter, our revue in Europe for electoralizers and all of it's really primarily Europe, actually tripled to forty five million dollars from what it was a year ago. And here in the United States, you know, when we look at the tax lands, the credit landscape, we actually see it better
today than it was a year ago. So why was happy? Well, I think because when you looked at the tax credit for fuel cells, it was not well structured or positioned in forty eight eight. And we see an extension of what was essentially the ITC, which was extended the last time under President Trump in twenty eighteen, in the latest bill, which extends a credit for fuel cells which is used by Amazon, Walmart and many of the customers you mentioned
through twenty thirty two. So we're actually pretty thrilled with what happened for hydrogen, especially in the last bill.
When you look at plug Power's earnings, the margins are still negative, but they have improved from the last year. What are your thoughts on just how much more runway you guys need before plug power is consistently profitable.
So you know we I think you hit on the point. We moved gross margins from a year ago by over sixty percent and we are targeting it to be gross margin zero by the fourth quarter. And there's a clear map with our hydrogen plants and the improvements we've seen in service and more importantly, selling more and that really helps us a great deal. And we're targeting being EBODOS
positive by the end of next year. And I think with our project Quantum Leap, where we really focus on cost and selling, that we are on the right track. And I think you're beginning to see it in the financials. Even the miss when EPs was right downs, which were non cash right downs associated with our plants. That really align the business for the future to be successful.
What's the US market right now for green hydrogen that's hydrogen made from water using clean electricity to power the electrolysis process.
So straight it is a bit slower than what you see in Europe and other places. You know, our primarily focus for electroalizers are really Europe Australia where the climate's right. But we actually operate the largest green hydrogen liquid hydrogen
plant in the world at the moment in Georgia. And when I looked I reviewed this morning our demand for hydrogen from the second quarter of the fourth quarter, we actually see that our daily usage go up from fifty five tons per day to about sixty seven tons per
day by the end of the year. So we're using our plants, we're creating green hydrogen, we're involved in some blue hydrogen projects, so we feel comfortable about the long term trajectory and even your term trajectory for hydrogen in the United States.
Talk a little bit more about that demand and where it's coming from. Are you seeing customers, you know, pivoting from other sources of energy or are you seeing you know, just increasing need for more sources of energy and that's what's really driving your growth here.
That's actually a real good question because when we look at the world the United States, with what we've deployed already about it's you know, two hundred and seventy five sites in our material handling business across the US. We've actually taken off the grid approximately five hundred megawatts of electricity, and as I think everybody knows, it has become more and more challenging to bring electricity to you know, there's over a three and a half year backlup log to
get electricity to facilities no typical distribution center. We take off two to three megawatt off the grid, which can then be used to things increasing freezer capabilities. So if you think about if you're a fuel food retailer and you want to sell more frozen goods, which is a growth area, one way you can one way you can increase the size of your freezer and not have to worry about the power needs is actually use fuel sales and hydrogen from plug Power.
We're speaking with Andy marsh, the CEO of Plug Power, joining us from just outside of Albany. Andy, I want to go back to regulatory issues, tax credits and that sort of thing, because you did say that demand is better. We were in a better position than you were a year ago. Our own will wide and team reporting that a year ago credits were expected to help lead about one point two million metric tons of annual green hydrogen production by twenty thirty that's according to bn F or
in house Bloomberg New Energy Finance. Now, projects with just one hundred and fifty thousand tons of production capacity are expected to qualify for the incentives, dramatically reducing anticipated US output. This is after the Trump administration's tax and spending legislation significantly limited tax credits to produce the fuel. How is that affecting you?
Well, when I take a when I look at I'm already using the tax credits. We expect to have online our additional Texas plant by twenty twenty eight before they fire, which allows us to use those credits through twenty thirty two. I think when we look at our own needs, you know, we're looking at other expansion opportunities, you know, we think that we'll be able to generate the hydrogen to meet our customers' needs and be able to take tax credits
through twenty thirty two. So, you know, quite honestly, I'm very comfortable with the present legislation.
Back in January, there was a Bloomberg News story about the White House confirming a one point six billion loan guarantee for plug power to build hydrogen plants. How have you guys received that that loan yet and how crucial is support like that to continue to grow plug power.
It's important, but it's not you know, we will still move ahead with building plants. Ultimately, we're focused and I've been down to the DOE recently, uh and we're working on details to make sure we can pull down funding for the plant in Texas, which is a plant that gets very very low cost electric electric electric energy from a next era wind farm. When we take a look at that, we're working through the final details to start being able to pull down funding from the DOE. I
know they've canceled many projects. We haven't been on the cancel list, and we have a good relationship. I think the Trump administration and their goals of being energy dominant. You know, the world's going to one green saff the world's going to one green pneumonia. The US is well positioned to be the leader in providing those fuels in green hydrogen is critical the becoming energy dominant for the long term. Additionally, hydrogen generation is really important for national security.
I mean, next to SpaceX, all the vehicles use hydrogen, so we really think about the long term benefits. And then on top of that, when you think about hydrogen, over thirty percent of detail food moved through a plug power fuel cells. Boy, you don't want that disrupted overnight.
No you don't. Andy, We only have about a minute and a half left, and I want to talk about the stock price. It's down about ninety seven percent since the twenty twenty one highs. Even though you're a relatively small company, you're still among at least today the most actively traded stocks, with fifty four point seven million dollars or million shares rather trading today. It's massive. The volume this year has been massive. You've got twenty eight percent
of your shares floated. What's your message to investors and traders right now.
Well, I think I would tell them it's a great opportunity to come in. You you can look at the financials, revenue growing at twenty percent, gross margin improving dramatically. The deployments in Europe, where the electoralizer industry is really happening today, has tripled in the past year. You know, I think this is the opportunity to successfully enter the stock and
it's one of the reasons. Our CFO has made significant investments and I'm putting about twenty five percent of my salary to work buying stock, actually fifty percent of my salary to work buying stock every week.
Andy, thanks for coming on. Appreciate you taking the time this afternoon. Always get to check in with you, and it has been quite a few months since we last spoke, so don't be a stranger. Come back soon. Andy Marsh, CEO of Plug Power, joining us from just outside of Albany,