Plug Power (NASDAQ:PLUG) raised its full-year revenue growth outlook after reporting second-quarter results that showed improving margins, lower operating expenses and reduced cash usage, while management reiterated its goal of achieving positive EBITDA in the fourth quarter.
Revenue totaled $178.3 million in the second quarter, up about 9% sequentially from the first quarter. First-half revenue reached $342 million, an 11% increase from the prior-year period, according to Chief Financial Officer Paul Middleton.
Margins Near Breakeven as Cost Reduction Efforts Continue
Chief Executive Officer Jose Luis Crespo said gross margin improved to about negative 0.9% in the quarter, compared with negative 30.7% a year earlier and negative 13% in the first quarter. Middleton described the result as essentially breakeven gross margin, representing an improvement of roughly 30 percentage points from the prior-year period.
The company attributed the progress to its Project Quantum Leap restructuring initiative, better service margins, manufacturing and supply-chain improvements, tariff recoveries, and higher utilization at its hydrogen production plants.
Service revenue increased 82% year over year to $29.8 million, while service margin reached 27%. Crespo said improving unit reliability and stack performance enabled technicians to service more units, creating overhead leverage. He also said the company had increased service pricing over the past several years to better reflect servicing costs.
Fuel revenue grew approximately 15% year over year to $39.5 million. Fuel gross margin improved to negative 48%, from negative 91% a year ago, driven by utilization and production-efficiency gains at facilities in Georgia, Tennessee and Louisiana, along with network optimization and supply agreements.
Middleton said power-purchase-agreement loss rates improved to roughly negative 30%, compared with negative 92% a year earlier. He cited service-cost reductions and the company’s sale-leaseback buyback program, which reduced equipment lease costs.
Management said it expects higher second-half equipment volumes to be the primary driver of further margin improvement. Middleton said the company expects second-half revenue to be about 40% above first-half levels, with much of the increase coming from equipment sales.
Operating Expenses, Cash Use and Liquidity
GAAP operating expenses were $62 million, down 50% from a year earlier. However, Middleton said that figure included $39.7 million in recoveries of previously impaired assets, principally a $37 million gain related to the June settlement of a customer contract dispute.
Excluding certain items, including the recovery, transaction fees, impairments, restructuring and other non-cash changes, Middleton said Plug remained on track toward an operating-expense run rate of roughly $75 million per quarter that it discussed in May.
The company reported a GAAP loss per share of $0.14, compared with a loss of $0.20 a year earlier. Adjusted loss per share was $0.07, compared with $0.18 in the prior-year period. The GAAP result included approximately $104 million in non-cash mark-to-market valuation charges associated with convertible debt and warrant liabilities, which Middleton said were primarily driven by Plug’s stock-price appreciation during the quarter.
Net cash usage was about $61 million, a 58% improvement from the first quarter. Inventory declined about $28 million from year-end, and management continues to expect at least $100 million of inventory reduction for the full year, weighted toward the second half. Capital spending was below $9 million in the first half.
Plug ended the quarter with $161.9 million of unrestricted cash and $510 million of restricted cash. Middleton said more than $115 million of restricted cash was released during the first half and about $155 million of the remaining balance is scheduled to be released over the next 12 months.
The company also updated investors on its asset monetization program. Plug said it had received $47 million from a transaction involving its Graham, Texas project and a staged closing at New York Gateway. The transactions are expected to generate approximately $80 million of near-term liquidity and represent the first stage of an initiative intended to unlock more than $275 million through asset monetization and non-dilutive financing.
Material Handling and Electrolyzer Pipeline
In material handling, Plug deployed 1,666 GenDrive units during the quarter, more than double the 739 units deployed in the second quarter of 2025. Crespo said two of the company’s largest material-handling customers plan to refresh more than 20,000 GenDrive units over the next three years. He characterized the opportunity as largely driven by the normal replacement timing of fleets already in operation, in addition to customer site growth.
Plug also outlined progress in its electrolyzer business. The company announced a final investment decision for the 30-megawatt Barrow Green Hydrogen project for Carlton Power in the United Kingdom, part of a 55-megawatt award made in November 2025. Plug expects the remaining 25 megawatts to reach final investment decision during 2026.
During the quarter, Plug was selected for the 275-megawatt Hy2gen Courant project in Quebec. Management said it is working on the front-end engineering and design phase, with an estimated final investment decision in early 2027, though Crespo noted the timing could shift.
After quarter-end, Plug announced a 50-megawatt Giner ELX electrolyzer order for Orica’s Hunter Valley Hydrogen Hub in Australia following that project’s final investment decision. Crespo said it was the largest renewable hydrogen project to reach final investment decision in Australia.
The company said its 100-megawatt project with Galp in Portugal and a 25-megawatt project involving Iberdrola and BP in Spain continued to progress through commissioning.
European Policy Developments and Outlook
Management pointed to European policy developments as a potential catalyst for electrolyzer demand. Crespo said Spain released a draft framework that would establish an 11% renewable fuels of non-biological origin target by 2040, including penalties for non-compliance and tradable carbon-reduction certificates. Based on Plug’s preliminary internal analysis, he said the framework alone could drive approximately 10 gigawatts of electrolyzer demand in Spain by 2030.
Plug also cited a EUR 780 million Dutch subsidy program targeting 400 megawatts of electrolyzer capacity and the European Commission’s planned fourth hydrogen auction in December 2026, with a budget of up to EUR 500 million.
For the remainder of 2026, Crespo said Plug will focus on disciplined execution, pipeline conversion, non-dilutive liquidity initiatives and its target of positive EBITDA in the fourth quarter. The company has not provided additional guidance for 2027 and 2028 beyond its previously stated expectation of operating-income positivity in the fourth quarter of 2027 and overall profitability in 2028.
About Plug Power (NASDAQ:PLUG)
Plug Power Inc is a U.S.-based company specializing in the design and manufacture of hydrogen fuel cell systems that serve as clean energy replacements for conventional batteries in electric vehicles and material handling equipment. Its core solutions include ProGen fuel cell engines, GenDrive power systems for forklifts and warehouse vehicles, and GenFuel hydrogen refueling infrastructure. These offerings are sold as standalone components or integrated turnkey solutions under the GenKey brand, providing customers with on-site refueling, equipment installation and maintenance services.
In addition to its fuel cell and refueling products, Plug Power develops backup power and off-grid energy solutions through its GenSure line, which targets telecommunications, data centers and utility applications.
