Plug Power Inc. (NASDAQ:PLUG), a leader in providing energy solutions that change the way the world moves, today announced its financial results for the third quarter of 2016. Plug Power continues to show growth and improvements in all areas of the business during the third quarter, including:
- Total GAAP revenues of $17.6 million;
- 50% growth in recurring service and fuel delivery revenue versus Q3 2015;
- Year-to-date bookings of $170 million with a full sales pipeline driving confidence in full year target;
- GAAP gross margins of 2.2%, demonstrating strong improvement versus Q3 2015;
- GAAP earnings per share (EPS) loss of $0.07 per share.
Beginning with this quarter, Plug Power’s quarterly financial releases will no longer include the non-GAAP measures of adjusted revenue, adjusted gross margin, adjusted EBITDAS or adjusted EPS, to reflect the impact of deployed Power Purchase Agreement (“PPA”) transactions under prior alternative financing arrangements. Plug Power will continue to provide supplemental information to all external stakeholders as it believes it is important to convey the Company’s overall progress in growth and cost downs and to maintain transparency.
Third quarter 2016 operational activity included system deployments at three sites where the Company utilizes a PPA. For those sites, the value of the systems deployed was $17.3 million and the costs to deploy the systems was $11.5 million. In 2015, the Company financed PPA deployments under arrangements which required revenue and cost recognition in the period deployed, whereas the finance arrangements utilized in 2016 do not allow such revenue and cost recognition in the period.
Two new customers were signed in the third quarter, along with continued progress expanding existing customers including Walmart, Home Depot and Sysco. One of the new customer sites was sold and implemented within the quarter, but revenues from the sale will be recognized in the fourth quarter of 2016 due to the timing of the customer’s greenfield site commissioning.
“Plug Power is executing on a balanced strategy of delivering sustainable returns within the material handling space while beginning to unearth new market opportunities to maintain our position as a global market leader in fuel cell technology,” said Andy Marsh, CEO of Plug Power. “Our third quarter results underline continued improvement in our operating model, with production and implementations on schedule, a robust and growing sales pipeline, and continued margin expansion. Looking ahead, we are encouraged at the immense long-term opportunity set we see for our technology within motive power electric vehicle applications worldwide.”
Financial Results
GAAP revenue for the third quarter of 2016 was $17.6 million as compared to $31.4 million of revenue in the third quarter of 2015. Third quarter 2016 revenue represents expansion and growth from new and existing direct customers as well as continued growth in PPA customer deployments.
Third quarter 2016 operational activity included system deployments at three sites where the Company utilizes a PPA, with the value of those systems totaling $17.3 million. In 2016 the Company is utilizing alternative financing arrangements for its PPA deployments to improve liquidity and long-term customer economics. The alternative financing requires different accounting treatment as compared to the previous arrangements, which required upfront revenue recognition of GenDrive shipments and hydrogen infrastructure deployed.
Key metrics include:
- Cumulative GenDrive units deployed for the nine months ended September 30, 2016 of 2,718, versus, 2,378 units for the same period in 2015;
- GenKey sites installed for the nine months ended September 30 is 13, versus 11 for the same period in 2015;
- More than 11,000 GenDrive units are under service or PPA contract at September 30, 2016, versus more than 7,500 under service contract at September 30, 2015.
GAAP gross margin in the third quarter of 2016 was $381 thousand, or 2.2% of sales, as compared to GAAP gross margin in third quarter 2015 of $76 thousand, or 0.2% of sales. To provide additional visibility regarding Plug Power’s progress on margin profile and cost downs, the value of PPA systems deployed in the quarter was $17.3 million, with associated equipment costs of $11.5 million. This quarter reflects the ongoing progress Plug is making in leveraging its cost base to significantly improve its margin profile.
Net loss attributable to common shareholders for the third quarter of 2016 was $13.4 million, or $0.07 per share on a diluted basis. This compares to a net loss attributable to common shareholders in the third quarter of 2015 of $10.2 million, or $0.06 per share on a diluted basis.
Cash and Liquidity
Net cash used in operating activities for the third quarter of 2016 and 2015 was $13.9 million and $13.0 million, respectively. As of September 30, 2016, Plug Power had total cash of $88.4 million, including cash and cash equivalents of $42.5 million and restricted cash of $45.9 million.
Conference Call
Plug Power has scheduled a conference call and webcast today at 8:30 am ET to review the Company’s results for the third quarter of 2016.
Interested parties are invited to listen to the conference call by calling 877-465-1289. Online, the webcast can be accessed at www.plugpower.com, by selecting the conference call link on the home page, or directly https://event.webcasts.com/starthere.jsp?ei=1123280. A playback of the call will be available online for a period following the event.
About Plug Power Inc.
The architects of modern hydrogen and fuel cell technology, Plug Power has revolutionized the industry with its simple GenKey solution, elements of which are designed to increase productivity, lower operating costs and reduce carbon footprints in a reliable, cost-effective way. Plug Power’s GenKey solution couples together all the necessary elements to power, fuel and serve a customer. Plug Power is the partner that customers trust to take their businesses into the future. For more information about Plug Power, visit www.plugpower.com.