Plug Power Inc. (PLUG) Q3 2026 Earnings Call Transcript

Operator: Greetings, and welcome to the Plug Power Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the conference over to Teal Hoyos, VP, Marketing and Communications. Thank you, Teal. You may begin.

Teal Vivacqua Hoyos: Thank you. Welcome to the 2026 Third 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, 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, 2025, and our quarterly reports on Form 10-Q for the quarters ended March 31, 2026, and June 30, 2026 as well as other reports we file from time to time with the SEC. These forward-looking statements speak only of the date that 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's CEO, Jose Luis Crespo.

Jose Crespo: Thank you, Teal. Good afternoon, everyone, and thank you for joining our third quarter 2026 earnings call. At the start of this year, we committed to 3 priorities: grow sales, enhance margins and improve cash flow. Q3 showed clear year-over-year progress on all 3, and it delivered our strongest quarterly net cash usage of the year. Revenue was approximately $201 million, up about 13% year-over-year and up roughly 13% from the second quarter. This was our highest revenue quarter of 2026 so far, and we expect the fourth quarter to be even higher. Gross margin was negative 2.7% compared with approximately negative 68% in the third quarter of last year. This is a significant improvement, and it reflects the cost and operating discipline we have built through Project Quantum Leap. It was slightly below Q2, and Paul will walk you through the drivers. Operating expenses were approximately $70 million compared with roughly $229 million a year ago, reflecting lower unusual charges and a structurally lower cost base. And most importantly, net cash usage fell to approximately $28 million, a record low and a reduction of about 54% from the second quarter. We achieved this without raising any capital, no proceeds from our ATM program and no other equity or debt raises during the quarter. We also reported positive GAAP basis earnings per share of approximately $0.07 compared with our negative $0.31 a year ago. Positive basic EPS of $0.07 was driven by noncash fair value gains on our convertible notes and warrants, and Paul will walk you through the components. Let me start with what is driving these results across the business. Our priorities for 2026 have not changed, disciplined execution, sales growth and continued improvement in cash utilization and operating leverage. Through the 3 quarters, the trend lines are what we said they would be. Revenue has grown every quarter this year from $163.5 million in Q1 to $178.3 million in Q2 to approximately $201 million in Q3. Gross margin has moved from approximately negative 13% in Q1 to near breakeven over the last 2 quarters. We are reaffirming our full year revenue growth guidance of 15% to 16%, which we raised on our last call. As we have said, our business is second half weighted with the fourth quarter benefiting from a year-end deployment cycles and our backlog and customer schedules support that partner -- pattern again this year. We are focused on delivering positive EBITDAS in the fourth quarter of 2026. And based on our current forecast, we expect net cash usage in Q4 to be approximately flat. Paul will take you through the drivers behind both. Material handling remains the foundation of our recurring revenue, and it continues to grow. We deployed 1,136 GenDrive units in the third quarter, more than double the 540 we deployed in Q3 last year. This is up 110%. Service margins kept improving because better unit reliability lets each service technician cover more units, and that is driving real overhead leverage. Service has gone from a drag on this business to a profit contributor. We're also investing in the next generation of GenDrives. During the quarter, we advanced the development of a new fuel cell solutions with a refined power management architecture, more reliable power electronics and enhanced control software. For customers, we expect these enhancements to mean higher fleet uptime, longer stack life and fewer unplanned shutdowns. Fuel revenue grew year-over-year. Fuel margins also improved meaningfully year-over-year, but we are still not satisfied with where we are today. Q3 was affected by unplanned downtime at some of our plants, which Paul will also cover, and we expect improvement in Q4. We're working to reduce product and logistics costs across the network, and we expect further progress in the coming quarters. Our GenEco Electrolyzers business had one of its most important commercial quarters. Electrolyzer revenue this year reflects the timing of deployments as we move from smaller industrial systems to larger scale programs. And Paul will also cover the financial impact. Commercially, the momentum is clear. At the end of September, we signed a 280-megawatt GenEco supply agreement with Arcadia eFuels for Project ENDOR in Denmark. ENDOR is expected to produce roughly 110 tons of renewable hydrogen per day, combined with captured CO2 to make e-SAF. This agreement follows 3 years of joint engineering work and deliveries are expected to begin once the project issues notice to proceed. Just as important, we also signed a strategic cooperation agreement that positions Plug as the preferred electrolyzer supplier for 4 additional Arcadia projects in Europe and the Americas, more than 1 gigawatt of potential capacity. Arcadia's offtake agreement with Uniper for ENDOR e-SAF is an encouraging sign that the demand side of this market is taking shape. This is driven as much as by decarbonization as by the need for energy security in Europe. In July, we secured a 50-megawatt order from Orica following FID on the Hunter Valley Hydrogen Hub, the largest renewable hydrogen project to reach FID in Australia. We also shipped 1-megawatt GenEco system to HWR Hydrogen in New Zealand to fuel heavy-duty trucks, and we continue FEED work on the 275-megawatt hydrogen Courant project in Quebec. On execution, commissioning continues on our 25-megawatt project with Iberdrola and bp in Spain and our 100-megawatt project with Galp in Portugal. Additionally, we have already started activities for the Carlton Power projects in the U.K. and the Orica project in Australia. Now let me take a minute on how the role of hydrogen is evolving because this is the reason we expect electrolyzers to be a growth engine for Plug. The energy crisis that was created by the war in Ukraine and more recently, the developments in the Middle East have put energy security and energy independence at the top of the agenda, especially in import-dependent regions like Europe, which imports roughly 85% of the natural gas it consumes. Hydrogen is uniquely positioned to address this because it turns locally generated solar and wind power into fuels, ammonia and other projects that are imported today otherwise. The industry sees the same shift. The Hydrogen Council's Global Hydrogen Compass 2026 identifies energy security and resilience as the leading driver of hydrogen adoption ahead of decarbonization. The Hydrogen Council calls hydrogen a geopolitical insurance policy. Our European strategy is built around this shift. For example, most hydrogen used in European refineries today is made from natural gas. Much of it is imported. Replacing it with hydrogen made from local renewables removes that import exposure. The same logic applies to eFuels. These are exactly the kind of projects we are executing with Galp, Iberdrola-bp and Arcadia. The Renewable Energy Directive III began as a decarbonization policy, but energy security and energy independence are now at the center of how EU member states are writing its international law, turning policy into binding demand in refining, transport and sustainable aviation fuels. As we noted last quarter, our team estimates that in Spain, the draft framework alone could drive approximately 10 gigawatts of electrolyzer demand by 2030. With Galp, Iberdrola-bp, Carlton Power and now Arcadia, Plug has one of the strongest installed and contracted positions in Europe. Energy security and energy independence are fueling the adoption of green hydrogen, and we will discuss this in more depth during our Plug Symposium 2026 on November 19. This year, the symposium will be virtual, and I encourage you to sign up on Plug's website. To sum up, revenue is growing, gross margin is improving, operating expenses are lower and net cash usage is at a record low, all without raising capital. We are reaffirming our 15% to 16% revenue growth for the year, and we remain focused on a positive EBITDAS in the fourth quarter. With that, I will turn the call over to Paul for a more detailed review of the quarter, including our liquidity position and financial outlook. Paul?

Paul Middleton: Thanks, Jose Luis, and good afternoon, everyone. Jose Luis covered this quarter's revenue. I just would add that through the 9 months, we're at $542 million, up about 12% year-over-year. Gross margin was negative 2.7%, a roughly 65 percentage point improvement from negative 68% a year ago. It was slightly below our Q2 of '26, and I'll explain why, but the year-over-year trend shows the structural changes we've made are working. Revenue -- equipment revenue was $106 million, up from $97 million, driven by material handling. GenDrive deployments more than doubled, and we recognized 9 hydrogen site installations versus none a year ago. Year-to-date, we've already surpassed last year's material handling sales. Electrolyzer revenue was down about $40 million year-over-year, primarily on deployment timing. For the year, we expect electrolyzers to be slightly down versus last year. However, it's important to understand the dynamics of this market. As we've established this business, the early deployments were mainly small industrial applications and stack sales. Recently, we have shifted the focus to larger scale deployments and a much bigger pipeline. The overall portfolio traction in this transition is just coming into its own scale. The future growth will be driven by energy security and energy independence and decarbonization, as Jose Luis mentioned, and is anchored in real projects. 50 megawatts with Orica now in execution, the Carlton Power project in the U.K., 280 megawatts signed with Arcadia pending FID, 270 megawatts with Hy2gen in the FEED process and all the megawatts we are commissioning. Now on equipment margin, it was essentially breakeven versus negative 77% a year ago, driven by restructuring, volume, pricing and much lower inventory adjustments. Sequentially, it was a bit below Q2 because of electrolyzer scale-up costs, partly offset by better material handling margins. Also of note, customer warrant charges, which reduced revenue were higher in the quarter. It was $14.4 million versus $10.9 million a year ago, reflecting increased sales to Amazon. On service revenue, it grew 47% to $29 million, and margin reached 31%, up from 27% in Q2 and negative 2% a year ago. Better reliability means each technician covers more units and parts consumption is almost 50% down year-over-year. On PPA revenue, it was $28 million, up 13%. Margin improved to negative 16% from about negative 30% in Q2 and negative 85% a year ago. This was driven by pricing, lower maintenance costs and lower lease costs from our buyout program. Fuel revenue was $38 million, up 6% year-over-year. Margin was negative 52% versus negative 79% a year ago. This was on higher pricing and lower production and purchased fuel costs. Now the Q3 margin was slightly behind the Q2 because of unplanned outages at our plants in Q3, which forced more external purchases. These issues are largely resolved, and we've rebalanced sourcing, so we expect fuel margin to improve in Q4. Operating expenses for the quarter were $70 million, and this included gains and losses from asset monetizations and contract terminations. Normalizing for those and other unusual items, we see about $70 million to $75 million is the right near-term run rate. Net income attributed to Plug was $99.8 million or $0.07 positive per basic share. That reflects $192 million in noncash mark-to-market gains on our convertible notes and warrant liability, which equates to about $0.12 EPS on a diluted basis. Excluding those gains, we would have reported a net loss, but a far smaller one than a year ago, which reflects real operating improvement. These adjustments will continue each quarter in either direction until the instruments mature or are settled. Net cash usage was about $28 million, down from $61 million in Q2 and $145 million in Q1, and we raised no capital. Asset monetizations helped fund the year without dilution. Underneath that, the operating improvement is real, higher gross margin, structurally lower OpEx and reduced maintenance CapEx. Two monetization updates. On Stream, we received about $51 million this year, including $46 million in Q3. The remaining stages for this project depend on regulatory and permitting steps in Texas and New York that have taken longer than expected. Stream remains under contract and engaged, and we have -- but we have not included any of these proceeds in our Q4 forecast. Separately, we're working to release about $62 million of restricted cash posted as collateral for power supply at our Texas plant, targeting the end of Q1 '27. Inventory is down about $49 million from the year-end, and we expect another meaningful reduction in Q4. We ended the quarter with $134 million in unrestricted cash and $469 million in restricted cash. We think there's a good chance that Q4 net cash usage may be relatively flat. This means we could continue to not need new capital to fund our operational plan in the near term. We're reaffirming our full year revenue guidance, as Jose Luis said, to 15% to 16%, which implies Q4 revenue of roughly about $280 million. That's driven mainly by equipment in terms of growth and supported by our backlog and customer schedules. The biggest driver is material handling. We have a pipeline to potentially ship more GenDrive units in Q4 than the first 9 months combined, and this is at stronger contribution margins. We remain focused on positive EBITDAS in Q4, and this path runs mainly through gross margin, stemming from equipment volume leverage, manufacturing cost reductions, service reliability, fuel cost optimization and continued PPA buyouts. Volume and mix will determine the final result, but we believe we're well positioned. With that, let's open the line up for questions, and I'll turn it back to the operator.

Operator: [Operator Instructions] Our first question comes from the line of Eric Stine with Craig-Hallum Capital Group.

Luke Persons: This is Luke on for Eric. So just for our first one here, for the outlook in material handling, can you give us some more context on how much of your expected growth can be contributed to the refresh cycle opportunity versus new site wins with both existing and new customers? So you've got that 20,000 unit number in the next 3 years on the refresh side that you've outlined before. Do you have visibility into a similarly sized opportunity for new sites?

Jose Crespo: So in fourth quarter, we're expecting to begin the refreshing cycle for Walmart. Our expectation is to see probably between 2,000 to 2,500 units to be refreshed in Q4. So that's where the cycle starts. And then as we mentioned before, the 20,000 units for refreshes are going to be done in the next 2 to 3 years. We expect that, that will be on top of the normal business that we have with our existing customers and with new customers. This year, we signed new customers, like, for example, Southwire. Southwire is going to be part of our symposium. And we're looking at a few new customers to be signed up next year.

Luke Persons: Got it. That's helpful. So just switching gears for a second question here on the electrolyzer side. How is some of the early operating data from some of your initial projects like with Galp and Iberdrola helping you generate and finalize new business on that front? Can you just talk a little about the value that these early projects are providing just as a reference for prospective customers?

Jose Crespo: I didn't hear well the question. Can you please repeat it?

Luke Persons: Yes. I mean just looking at the electrolyzer side, just some of the early progress you're making with whether that's some of the operating data you're getting just in this commissioning process, how that's helping you generate and finalize new leads, just kind of as a reference for prospective customers.

Jose Crespo: No, thank you. That's a good question. Very good question. Well, number one, it positioned us really well for second phases on these projects. The 25 megawatts for Iberdrola and bp is just a first phase on their refinery in Castellon in Spain. The refinery uses much more hydrogen than just the 25 megawatts. So first, it's positioning us very well for future business. The same thing with Galp. The first 100 megawatts is what we're doing right now, but Galp is also planning another 100 to 200 megawatts in the same site. And deployments are going well, commissioning is going well. So it's really helping for new business with the same customers. But the same thing is happening with other customers. I can tell you, for example, that I've been talking to another customer in Greece. It is a similar situation as bp and Iberdrola, is the local utility company with the local oil and gas company doing a joint venture to produce hydrogen. And the reference of Iberdrola is actually a similar project, 25 megawatts is really powerful when we are talking about, hey, we are already doing these type of projects. Not only we are planning them, we are now commissioning them. In the case of the Iberdrola and bp project, very, very close to operation now. So very good reference points for future business. And thank you for the question.

Operator: Our next question comes from the line of Craig Irwin with ROTH Capital Partners.

Craig Irwin: So Jose Luis, I wanted to ask about the regulatory environment. So first, I think we understand pretty well that the accommodative changes that President Trump made in the Big Beautiful Bill are part of the reacceleration that we're seeing now in the lift truck, the hydrogen lift truck market for you and allowing your customers, your pedestal customers to have the confidence to continue to invest in hydrogen. Now the changes in the regulatory environment on the back of changes to Democratic control in both the House and the Senate seems to set up a favorable environment for Plug over the next couple of years, given very strong Democrat support for hydrogen. And Plug has always had a champion in their corner in the state of New York with Senator Schumer. Can you maybe unpack for us what you think issues or -- issues or relevant factors could be for the regulatory environment for Plug over the next couple of years? What would you ask for to streamline the development of this business as you approach this new environment that hopefully is a little bit more accommodative against what actually has been pretty positive already?

Jose Crespo: Well, Craig, thank you for attending the call, and thank you for the question. I appreciate it. The changes in the midterms, the results of the midterms obviously are favorable to the Democratic Party. We -- it's very early to really tell or say where things are going to go. One thing I want to make clear is hydrogen has always been, and we've always seen it as a bipartisan matter. And we've gotten support from Republicans. We were able to extend, as you just said, the ITC under President Trump during this term. And it has really, really helped the growth that you're seeing right now with material handling. As Paul said, this year, in the 9 months of the year, we have already achieved more sales than in full year in 2025. So we've been able to manage hydrogen with both sides of the aisle. Now having said that, obviously, as you said, there are many things and many activities that we can have with the new Congress. And we definitely will try to work to make hydrogen a discussion during the legislature. If you ask me the type of things that I would like to ask, it will be ideal to be able to extend the Production Tax Credit. So projects associated with implementing electrolyzers are projects that will have the capability to use the Production Tax Credit for a longer time than the end of 2027. And those would be some of the things that we can discuss, and I'm sure they're going to be on the table during the legislature.

Craig Irwin: Understood. Understood. So then second question I wanted to ask is an open question about pedestal customers. So you have your 2 early pedestal customers, both Walmart and Amazon recommitting to hydrogen fuel cells and expanding their fleets again. Can you maybe unpack for us the opportunity for pedestal customers, whether or not you see potential for new names to be added to the list? The political certainty as far as support and potential extension of the Production Tax Credit, something that maybe some of these customers would view as positive. What do you think is fair as far as an expectation around pedestal customers this next year?

Jose Crespo: So we continue working with new names and new customers. As I mentioned before, Southwire is a customer that signed up last year. We have implemented during this year in 2026. They are having an increase in business because of all this electrification and they -- as the name indicates, they do electrical equipment. It's one of those customers that we believe we can have a very healthy growth with. Other customers that we continue working with that are not as large as Amazon and Walmart are Home Depot and Grainger, which are also pedestal customers, which we have several sites in each one of the cases. We continue, as I said, trying to sign new customers. We are talking right now to 4 or 5 potential new customers for 2027. And in those cases, in all the cases, we always try to figure out a way to try to have repeat business and convert them into pedestal customers. Obviously, ITC, the Investment Tax Credit that was extended with the first couple of years of President Trump is really helping with existing pedestal customers and definitely with new customers. So we continue working on that, and we continue trying to get new pedestal customers as we advance as always.

Craig Irwin: Well, that's really encouraging.

Operator: Our next question comes from the line of Sameer Joshi with H.C. Wainwright.

Sameer Joshi: I just have 2 quick ones. The next-generation GenDrive is in the -- I mean, already there. So just wanted to see if -- when you talk to customers about GenDrive sales, are they saying that they will wait for the next-generation to arrive? And is that affecting your backlog buildup on that front?

Jose Crespo: No, we are -- number one, we are improving -- we're putting many of these improvements already on the existing GenDrives. We do updates to GenDrive, software updates, and we do -- as we do service and maintenance to the GenDrives, we include some of those upgrades in our GenDrives. All new GenDrives that we manufacture, we also include the new upgrades. They come native from manufacturing, which is always a better option than actually doing the upgrades in the field. But we are not seeing any slowdown on purchases based on the new -- the next-generation plus the new next-generation GenDrives till, we're going to have them probably early in 2027, right?

Sameer Joshi: Understood. Understood. Got it. And then my second question is on the cash burn and more sort of getting a little bit of nuance on this, the restricted cash release of that. Do we have sort of an internal expectation as to how much -- how fast or the pace at which you will have the release of restricted cash? I think has been steadily going down. So that's good. But just wanted to see what the cadence is over the next 2, 3, 4 quarters.

Jose Crespo: I'm going to let Paul answer that one.

Paul Middleton: So one -- just for context of your question, one thing we've talked publicly about is that we've transitioned the business model away from this legacy subscription-based PPA structure. And so we're on the process of converting those legacy customers to buying the equipment and there'll be sales of the equipment and move into service. And so the legacy PPA contracts are winding down and the -- and then the bank deals that back those deals, which is what the restricted cash is largely associated with are winding down. So there's a natural progression anyway. And it's -- historically, it's been about $50 million a quarter. It's probably about down to about $40 million a quarter at the moment. We certainly expect that to continue. But one other thing that we're doing is where we can, we're actually buying out a lot of those programs early. And that enables us to release that restricted cash, which is why you see it coming down probably a little faster than normal. And that means we can use that money to pay off the leases and buy the equipment back at very reasonable terms, and it's helping a lot with the profitability of that line because then we can take those assets over longer periods of time. And in some cases, we're actually able to sell that equipment to the customer, underlying customer. So I'd say I expect it over -- the majority of it to wind down over the next 2 years or so. But again, it's probably $40 million on par per quarter minimum and then it may go faster if we continue to buy out more of these bank deals over time.

Sameer Joshi: That color was helpful. Maybe I'll squeeze one more question here. And this is -- and sorry if it has been already addressed, but for the product margin -- the product revenue margins, how should we expect that to trend? Would the fourth quarter be a positive and a significantly positive product sale quarter -- margin quarter, I mean?

Paul Middleton: Yes. For Q4, we absolutely expected a step function improvement. And the reason why is if you look at the math and you follow what our projections are and we're forecasting the full year, 15%, 16%, it kind of translates out to that $280 million number for Q4. And that's about a 40% improvement off of Q2 sales level, and the majority of that is material handling equipment. So that postures us very well where you should see a very strong contribution margin off of that equipment in Q4. And so that means you're going to see progression in the margin for equipment as well.

Sameer Joshi: Got it. That is helpful. And good luck with the 4Q. It looks like this is going to be an exciting quarter.

Operator: [Operator Instructions] Our next question comes from the line of Colin Rusch with Oppenheimer.

Colin Rusch: Can you talk a little bit about the impact of the moratorium and the kind of the flux of the political wins around in a couple of different states given your process around the asset sales and how you think that impacts timing and some of the cash flow elements?

Jose Crespo: Yes. So, thank you, Colin. Thank you for the question. Paul covered this a little bit during his remarks. For Stream, so far, we have received about $51 million on the transactions. That includes $46 million that we got in the third quarter. Now there is -- like we all know, I think data centers have been one of the main topics during the midterms. There's a lot of discussions and a lot of regulatory and permitting questions that are being brought around data centers. Now we continue working with the Stream. I've been working very closely with the CEO of Stream, Michael, and we're very engaged in trying to figure out how these projects can move forward. We, out of caution, have decided not to include any of the proceeds from the transactions in our Q4 projections. So the numbers that you have seen in terms of cash that Paul has discussed include no proceeds from Stream. We're pushing to see if this can happen faster, but it's going to take a little bit longer than we all expected. Now Paul also mentioned, and I think it's important to highlight is that during -- in the package of these assets that we are trying to monetize, we had a PPA, a wind PPA that we own in Texas. We're trying to sell that PPA, that's completely independent on the data center moratoriums and discussions that I just talked about. And that can release about $62 million on restricted cash that we posted as collateral for that PPA. Those discussions are going fairly well, and we're expecting that sometime in Q1, we will see that cash release. So slower than we were expecting. We're still working very hard with Stream to see how we can move the projects forward. And in the meantime, we're concentrating on trying to get the PPA restricted cash produced.

Colin Rusch: Okay. That's perfect, guys. And then just from a cost perspective, I'm just thinking about the next 15 to 18 months and some of the kind of volatility in the supply chain kind of broadly speaking, in commodity prices. Just want to get a sense of how you're managing some of those inputs and how we might think about that getting potentially passed through from a pricing perspective.

Paul Middleton: There's a couple of different elements to your point, your comments, but let me talk about -- if Jose Luis is okay, I'll talk about the supply chain and the cost side. I'd actually say I'm super excited because the last couple of years, we've been really focused on driving inventory levels down, and that's created a challenge of working with the supply chain of driving additional leverage. But we've made a lot of progress. And even though we have additional opportunity there, the shift is coming to a point where with the growth of sales, we can actually work with suppliers with next-generation of improvements, next-generation of price downs. And so we're actually seeing a resurgence, if you will, of opportunities where we're actually getting more leverage on that supply chain scope and working with our partners. And obviously, sales growth helps a lot in that. So -- and things -- there's -- volume helps a lot in terms of being able to optimize your manufacturing process from a scrap and standpoint. So there's those dynamics. But we actually haven't seen tremendous pressure at a point where some of the -- we don't have the same reliance on things like copper and other precious metals at that level that create that kind of dynamic. So we haven't really felt that. There's always some levels of it, but I'd say it's more on the positive side in terms of the leverage of the volumes and so forth. And on the pricing side, I guess I'll turn to Jose Luis in terms of pricing strategy and so forth with -- working with customers, but they're pretty astute. They pay attention to what's going on in the market. They're pretty astute to what's going on with us. And so pricing is more of a holistic conversation with them, but I don't know that I necessarily see the need or the opportunity to kind of focus specifically on commodities in terms of pushing those kind of pricing points through to the customer base.

Jose Crespo: Yes. We went through price adjustments, as you know, over the last couple of years, especially on the hydrogen side. We continue every year reviewing hydrogen because that's specifically the one that is affected more on a year-over-year basis. I always think about pricing with customers associated to the value the solution provides. We believe that material handling brings a lot of value to our customers. And this is why we are able to hold prices over time. The other thing is that over time, also, we discover more value that the technology brings to customers. For example, in the environment that we live in today with utility power constrained, our solutions actually bring an advantage to our customers in terms of managing better the utility power that they use. We've discussed this in past calls. So as we evolve, the technology evolves and the use of it evolves, the value that we provide to customers also evolves and increases. So from that point of view, we believe we are well positioned to keep the pricing what it is. And in the case of the hydrogen side, we review pricing as needed based on the cost of production.

Operator: Our next question comes from the line of Jason Tilchen with Canaccord Genuity.

Jason Tilchen: Apologies if this has already been covered off as I'm jumping between a few calls. But I was hoping you could maybe walk us through the bridge from Q3 to Q4 on an EBITDA basis. I understand I think you referenced gross margin being the biggest factor there contributing to that improvement, but maybe a little bit more color, especially on the equipment side of things, how much of that coming from operating leverage, higher throughput versus some of the other efficiencies that would be very helpful.

Jose Crespo: Thank you, Jason. Good question. I'm going to let Paul answer that.

Paul Middleton: My favorite question I get to answer all the time, and I think I'm excited because we're knee-deep in the quarter, and we're seeing it unfold. There's still a lot of work to do and a lot of things we've got to accomplish. But at a high level, I guess what I would share with you is, what I have shared is that if you look at our guidance that we reaffirmed today in context of where we're at to date, it would -- mathematically, it gets you to roughly about $280 million of sales in Q4. And that's about 40% growth off of Q2. Majority of that is equipment sales, and most of that is material handling, which we've actually -- we've really ramped the margin profile on that. If you ever have the luxury of coming to see our plant here, and one of the things you notice is that we have a tremendous amount of opportunity to scale volume and get even greater operating leverage. So every incremental piece of equipment and dollar for sales, especially on the equipment side for material handling, offers significant contribution margin. It can be in the upward range of 30% to 40%. So that's going to be super powerful. We talked about fuel to date, and I'm knocking on wood. We've been running our plants very well this quarter by avoiding -- rebalancing the sourcing mix. We think that could be $5 million to $7 million of opportunity to improve that margin profile by not having to do so many pickups. And then there's a handful of other dynamics. Warrants, we expect to be slightly down because of the mix with higher sales to Walmart as an example. And there's other operational efficiencies we're driving. But the key is really fundamentally sales, volume and mix. That's the key driver for the quarter and will be one of the biggest bridge factors as we look to achieve our targets for Q4.

Jose Crespo: Yes. So we are laser-focused on executing. As Paul said, there's mix, there's other things that we need to actually get done in the quarter. There are a couple of commercial items that we also need to close. We have a line of sight. It's going to take work. And -- and but we are, as I said, focused on getting to EBITDAS positive in Q4.

Operator: Our next question comes from the line of Saumya Jain with UBS.

Saumya Jain: Just one quick one for me. So you maintained your full year '26 revenue growth guide. So with year-to-date revenue around $543 million, what specific customer installations, orders or developments are fully locked in to give you the confidence in hitting that target for the remainder of the year?

Jose Crespo: So it's a little bit of a mix, right? We have projects that are locked in and in execution with Amazon, with Walmart, with other material handling customers. As I mentioned before, we also have a fair amount of refreshes of units of GenDrives with Walmart that we're working on. And on the electrolyzer side, we have mainly the finalization or basically commissioning of some of the projects that we have in Europe, a few projects here in the U.S. as well and also the progress -- revenue recognition for progress in projects like Galp, like Iberdrola, but also some of the revenues coming from Orica already and from Carlton Power. So it's a little bit of a mix. We have a lot locked in, in terms of commercial agreements, and now it's a matter of execution. Q4 is going to be a matter of execution and a matter of producing, installing and commissioning.

Operator: Our next question comes from the line of Chris Tsung with Wolfe Research.

Peiwu Tsung: I wanted to just ask about the 8-gigawatt in BEDP pipeline. How much of that is still active? How much has it grown? And how much could you realistically contribute that to '27 revenue?

Jose Crespo: So that -- most of it is active. Some of it is what you're already seeing converting. For example, the 280 megawatts with Arcadia. And a couple of the projects that we have with Arcadia, specifically one in Texas, another 280 megawatts, very similar to the one in Denmark are part of those 8 gigawatts. So you're seeing already some of those projects either moving towards FID, signing agreements until with pending notice to proceed. You will see other projects that we're going to hopefully announce before the end of the year. But out of the 8 gigawatts, most of it is still at play. Most of it are still moving ahead. Some of the revenues we're already seeing. As I said, Orica is already in percentage of completion revenue recognition, and we're going to see a little bit of it in Q4 and the majority of it in 2027. The Carlton Power projects are the same thing. As we get the notice to proceed for the projects with Arcadia, you will see some revenue and the revenue will start very quickly because the majority of these projects being so large are projects that are set up for percentage of completion. I would also say that we always talk about the 8 gigawatts funnel of qualified projects and opportunities. In reality, we have a much larger funnel on electrolyzers. We just -- and I think I mentioned this before, we try to pick the projects that we feel are better qualified to convert into FID in that funnel and in that part of the funnel. Some of them come in, some of them come out. But as a total, we believe that we have a good opportunity to keep converting those projects into reality. And as I mentioned before, the legislation in Europe is becoming a reality. In countries like Spain, in France, there's also a big push for that. In countries like in Germany, we are seeing some of those projects becoming more and more feasible and more and more bankable. We're not going to talk a lot about that during our symposium. We have some of our customers like Arcadia coming to the symposium. We have a couple of bankers. We have Hy24 and we have Societe Generale also coming to the symposium to talk about how these projects are moving and are advancing to FID. So I recommend that you join the symposium, and we can talk a little bit more about how these projects are becoming financeable.

Peiwu Tsung: Yes, fantastic. I'll definitely attend. And just on maybe the refresh cycle. I know you talked about that 20,000 unit number. I believe that's over for 3 years, and you gave the data point of 2,000 to 2,500 units in 4Q. Just are you able to share sort of cadence for the rest of the remaining refresh cycle?

Jose Crespo: I mean we could. But just -- so you get the idea is we did our first project with Amazon, and I think I mentioned this in a prior call in October of 2016. And after that, we started basically deploying in large numbers, sites every year. So 2017, 2018, 2019. One of the years, I remember, we deployed probably about 30 sites with around 250 to 300 units per site. So that's going to be the cadence that we're going to see. And that's going to be just with the Amazon side. With the Walmart side, as I said, we start the kind of the new wave of refreshes in Q4. With Walmart, we've been doing refreshes for several cycles already. But the new wave of refreshes start now with 2,500 or so units. And next year, we'll see some more as well. So it's going to be -- the cadence is the same cadence as when we installed them originally.

Operator: There are no further questions at this time. I'd like to turn the floor back over to Jose Luis for closing comments.

Jose Crespo: Okay. Thank you, you all for your questions and your continued engagement. Our priorities for the rest of 2026 are clear: deliver the fourth quarter, as we just discussed, convert our commercial pipeline, which we also discussed today, protect our liquidity through reducing our cash needs and achieve positive EBITDAS in Q4. Three quarters into this year, the numbers tell a consistent story. Sales are up, margins are improving, operating expenses are down, and we are still steadily reducing our cash needs. We still have work to do, we still have work to do, but Plug's team is doing what we said we would do. Now it's about finishing the year. Thank you for your support, and we look forward to reporting on our fourth quarter and our full year results. And I'm looking forward also to seeing you during the symposium, November 19. Thank you, everyone.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.