Plug Power Resolves ‘Going Concern’ Doubts as 2023 Revenues Increase by 27%

The company aims to significantly reduce costs in 2024 to bolster liquidity

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Plug Power, a U.S.-based hydrogen fuel cell company, reported a revenue of $891 million for 2023, up 27% from the prior year, allaying fears about its ability to continue operations.

The company said it now has sufficient financial resources and liquidity to sustain its ongoing activities “for the foreseeable future.”

Last November, the company said that its cash reserves and available equity securities were inadequate to fund operations over the ensuing 12-month period.

The company posted a net loss of $1.37 billion, which nearly doubled from $724 million in 2022, as increased investments in growth weighed on profitability.

Plug Power said it is implementing a major strategic shift in 2024 aimed at significantly improving its cash position and driving towards profitability. The hydrogen fuel cell company plans to raise prices across its product lines, consolidate facilities, reduce headcount and inventory levels, and slow scaling of some new platforms.

“Recognizing past challenges with cash management, we are dedicated in 2024 to bolstering our financial profile,” said CEO Andy Marsh. “Our commitment to the hydrogen economy remains unwavering, but we will leverage existing investments with a prudent cash management approach.”

Plug expects these initiatives to reduce cash burn by over 70% from 2023 levels and achieve positive cash flow within the next 12 months, albeit with lower near-term revenue growth. The company is targeting $75 million in cost savings from a major restructuring.

To improve liquidity, the company filed for a $1 billion at-the-market equity offering while working to secure $1.6 billion in conditional loan commitments from the U.S. Department of Energy.

During the earnings call with analysts, the company also said it is “engaged and planning” with “the three major data center operators” without naming them. It expects the demand for its green hydrogen fuel cell systems as backup power for data centers to rise, driven by artificial intelligence’s need for higher computing.

The company added that initial tests are planned for 2024, with significant deployments at scale anticipated in late 2025, as major data center operators like Amazon, Microsoft, and Google aim to reduce their carbon footprint and diesel usage.

In the third quarter, the company’s net loss ballooned by 66% as delays in plan executions hurt the bottom line. Significant cost escalations widened its losses in the previous quarter as well.

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