Plug Power (NASDAQ: PLUG) moves up in pre trading session on Wednesday as Andy Marsh, the company’s CEO, is optimistic about the fuel cell and hydrogen supplier’s hopes of increasing revenue to $1.4 billion this year, despite falling short of 2022 estimates owing to construction delays and higher-than-expected natural gas costs.
The Latham maker reported $210.3 million in revenue in the first quarter of this year, a roughly $70 million rise over the same period last year. For the first three months of the year, Plug also recorded a negative 33% gross margin.
Plug sales increased by about 40% in 2022, but fell short of the $900 million-plus objective set at the outset of the year.
“This year, our focus is really on execution,” Marsh said during the company’s results call on Tuesday. “Our primary goal is to generate $1.4 billion in revenue.”
Marsh’s revenue growth and margin improvement strategy is dependent on how rapidly the firm can develop hydrogen generation plants while growing output of fuel cells and hydrogen generating electrolyzers.
Plug anticipates that its $80 million-plus liquid hydrogen factory in Kingsland, Georgia, will achieve full capacity of 15 tons per day in June. That project took 11 months to complete. Using that knowledge, the business anticipates that its Louisiana factory will be fully operational by the fourth quarter of this year. The same goal is expected to be reached by hydrogen facilities in New York and Texas in the first half of 2024.
“Plug’s green hydrogen generation network buildout should accelerate the energy transition while driving meaningful margin enhancement for Plug,” the business said in a letter to shareholders in May. “To clarify the impact of this strategy, with a forecasted full-year average customer demand of 65 tons of hydrogen fuel delivered per day in 2023, Plug would be able to achieve a $100 million gross margin improvement annually by sourcing all hydrogen internally from our plant network.”
The business is also focusing on growing electrolyzer output at its Rochester facility while scaling up manufacturing of fuel cells and high-powered stationary products at its new $125 million factory in Bethlehem and Slingerlands.
“These plants have garnered interest from both equity and debt investors,” Marsh told analysts.
