Plug Power Reports Net Loss of $283 Million in Q3 as Hydrogen Supply Challenges Mount
The company recorded a net revenue of $198.71 million, a YoY increase of 5.3%
Plug Power, a U.S.-based hydrogen fuel cell company, recorded a net loss of $283.48 million during the third quarter (Q3) of the financial year (FY) 2023, a year-over-year (YoY) increase in losses by 66% from $170.76 million.
Plug’s finances took a hit as the North American hydrogen supply faced unexpected challenges, causing delays in plan executions and service margin improvements.
The company believes that this hydrogen supply obstacle is a temporary issue, particularly with the anticipation that the facilities in Georgia and Tennessee will operate at full capacity by the end of the year.
During the quarter, the company recorded a net revenue of $198.71 million, a YoY increase of 5.3%.
The company’s operating losses stood at $273.97 million, a 74% YoY loss increase.
During the first nine months (9M) of the year, the company recorded a net loss of $726.44 million, a YoY increase of 45%.
The company’s revenue for the January to September period stood at $669.18 million, a YoY increase of 39%.
Plug’s operating losses for the period were recorded at $717.61 million, a YoY increase of 61%.
Despite challenges impacting overall gross margin, the company said there has been margin expansion in specific new product platforms.
Plug’s Georgia Green Hydrogen plant is on the verge of the final step of the commissioning process for liquefiers/cold box completion, anticipating liquid production between November 15 and year-end.
Developments in Louisiana, Texas, and New York are expected to contribute to a substantial step change in fuel margin expansion. The gas plant in Georgia has been operational for nearly a year, supporting high-pressure tube trailer filling for Plug and other customers.
In terms of business segments, electrolyzer sales have experienced significant growth, with Plug being recognized as a supplier for industrial-scale projects. The company has line-of-sight to additional electrolyzer orders in its backlog.
The liquefier and cryogenics businesses are also experiencing growth, with a sales pipeline exceeding $1.1 billion. Revenue in this segment has increased approximately three times YoY, with margins expanding more significantly in the same period.
The company said it continues to secure significant global projects, with potential catalysts such as Inflation Reduction Act guidance for project Final Investment Decisions (FIDs) in the U.S. Ongoing monitoring of new orders is in progress for the previously disclosed 7.5 GW pipeline of near-term projects approaching FID.
Large-scale stationary manufacturing is gearing up, with the commissioning of manufacturing lines and the expectation of delivering multiple units in Q4 2023 paving the way for substantial growth.
Plug said it continues to monitor cost trends and hydrogen market dynamics, acknowledging the possibility of additional service loss provisions in the future. The company also envisions expanding manufacturing capacity, anticipating meeting the growing demand while achieving continued manufacturing cost reduction.
Plug Power experienced a wider net loss of $236.4 million in the second quarter (Q2) of 2023, compared to $173.3 million in the same period last year.
Plug Power’s net loss widened to $206.6 million in Q1 FY2023 from $156.5 million YoY as the margins were squeezed by higher hydrogen molecule costs caused by elevated natural gas prices and supply chain disruptions.