PLUG 1Q: Better Revenue and Gross Margins, but Cash Burn Steeper than Expected

Research evidence excerpt

PLUG 1Q: Better Revenue and Gross Margins, but Cash Burn Steeper than Expected

PLUG 1Q: Better Revenue and Gross Margins, but Cash Burn

Steeper than Expected

Bottom Line: PLUG delivered improved top-line growth and meaningful margin progress in 1Q26,

but gross margins still remain well negative. More importantly, the investment case should remain

dominated by liquidity concerns, with cash burn (-$158 MM this quarter vs our estimate of around

-$70 MM) and a reliance on asset monetization proceeds that have yet to be realized and appeared

to be delayed leave current unrestricted cash balance with little room form margin. In addition, we still

see same structural challenges to grow PLUG's hydrogen fuel cell PEM solution. Reiterate Underperform

rating.

1Q 2026 Earnings Recap

Revenue beats and negative margin narrows. PLUG's focus on its cost reduction program and

growth on a more narrow set of applications of its hydrogen fuel cell technology (material handling

and electrolyzers) has started to bear some fruit. 1Q26 revenue of ~$164MM (+22% y-o-y) exceeded

our estimate of $155MM and consensus estimates of $141MM. Gross margin of -13% in-line with

consensus and reflects a narrower loss compared to -55% last year. Besides the company's cost

controls, we think the majority of the better financial performance compared to last year is better pricing

for the company's supply of hydrogen fuel supply driven by price increases last year as well as better

performance of the company's production facility. That said, while some of the company's more onerous

legacy fuel supply contracts from industrial gas companies for gray hydrogen have rolled off we do think

some of the better margin could be ascribed to lower natural gas prices which gray hydrogen often tends

to be indexed to.