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SLINGERLANDS, N.Y. - Plug Power Inc. (NASDAQ:PLUG), currently valued at $1.6 billion and trading near $1.42, announced Wednesday a multi-year enhanced supply agreement with an unnamed leading U.S.-based industrial gas company that will extend their strategic relationship through 2030. According to InvestingPro data, the company faces significant operational challenges with negative gross margins of -77.5%.
The agreement secures liquid hydrogen supply for Plug’s applications business while reducing costs and improving cash flows, according to a company press release. The deal includes immediate cost reductions and collaboration on improved network efficiency - a crucial development given that InvestingPro analysis indicates the company is quickly burning through cash, with negative free cash flow of $948 million in the last twelve months.
Plug Power, which operates in the hydrogen solutions sector, currently serves over 275 hydrogen-consuming customer sites. The company stated this agreement aligns with its strategic objectives to strengthen margins and enhance operational flexibility.
"This contract is a win for Plug, our customers, our suppliers and our margin profile," said Andy Marsh, CEO of Plug Power, in the press release statement.
The company currently operates hydrogen plants in Georgia, Tennessee and Louisiana with a combined production capacity of 40 tons per day of liquid hydrogen. Plug Power indicated it plans to launch over 40 new sites in 2025.
The announcement comes following recent passage of energy and tax legislation supporting U.S. clean hydrogen development, which the company suggested would provide favorable conditions for market growth.
Plug Power has deployed over 72,000 fuel cell systems and 275 fueling stations to date, serving customers including Walmart, Amazon, Home Depot, BMW and BP, according to the press release. Despite this impressive customer base, InvestingPro’s comprehensive research report, available for over 1,400 US stocks, reveals the company maintains a "Weak" overall financial health score, with detailed analysis available to subscribers.
In other recent news, Plug Power Inc. announced the approval of several key proposals during its annual meeting of stockholders, including the election of three Class II directors and a reverse stock split. Shareholders also approved an amendment to increase shares reserved under the 2021 Stock Option and Incentive Plan. Additionally, H.C. Wainwright reiterated its Buy rating on Plug Power, maintaining a $3 price target, highlighting potential benefits from clean energy incentives in the One Big Beautiful Bill Act. The legislation includes tax credits that could support Plug Power’s operations, particularly with extended timelines for hydrogen production incentives. Moreover, Plug Power’s stock saw a rise after comments from Senator John Cornyn suggested a potential rescue plan for hydrogen tax credits. In another development, Plug Power’s CFO, Paul Middleton, purchased 650,000 shares of the company’s stock, signaling confidence in the company’s strategy and financial prospects. This move aligns with the company’s ongoing efforts to expand its hydrogen production facilities and commercialize its GenEco electrolyzers. These developments reflect Plug Power’s strategic focus on advancing its position in the hydrogen market.
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