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SLINGERLANDS, N.Y. - Plug Power Inc. (NASDAQ: PLUG), known for its hydrogen fuel cell solutions, announced today the signing of a secured debt facility agreement with Yorkville Advisors, totaling up to $525 million. The arrangement includes an initial tranche of $210 million, expected to close around May 2, 2025, with additional tranches that could bring the total to $525 million. According to InvestingPro data, the company already carries a significant debt burden of $1.08 billion, with a debt-to-equity ratio of 0.62.
The company plans to apply approximately $82.5 million from the first tranche to retire a significant portion of its existing convertible debenture with Yorkville, reducing potential share dilution associated with the conversion price.
In its preliminary Q1 2025 results, Plug Power forecasts revenue between $130 million and $134 million, with Q2 expectations ranging from $140 million to $180 million. Notably, the firm anticipates a decrease in net cash usage to approximately $142 million in Q1 2025, down from $268 million in the same period last year. This improvement is crucial as InvestingPro analysis shows the company has been rapidly burning through cash, with negative free cash flow of $1.06 billion in the last twelve months. Net cash usage measures the change in unrestricted cash and cash equivalents, factoring out certain financial transactions such as principal payments of convertible instruments.
Plug Power has also reported the completion of a new 15TPD hydrogen production plant in St. Gabriel, Louisiana, through its joint venture with Olin Corporation, Hidrogenii. This facility is set to bolster Plug’s hydrogen network and supply major clients like Amazon and Walmart.
To achieve cost savings, Plug Power implemented operational changes in Q1 2025, targeting over $200 million in annual cost reductions through organizational realignment and manufacturing efficiencies. The company expects these savings to contribute to margin improvement and progress toward profitability.
CEO Andy Marsh emphasized the strategic moves Plug Power has made, including bolstering the balance sheet, scaling hydrogen production, and streamlining operations, as key to the company’s long-term success in the hydrogen economy. These initiatives are critical given the company’s challenging financial metrics, including a -91.66% gross profit margin and -49.49% return on assets over the last twelve months.
Plug Power’s forward-looking statements, including its financial outlook and operational expectations, are based on current projections and subject to risks and uncertainties that could cause actual results to differ. The company has expressed confidence in its liquidity and does not plan to seek additional equity in 2025, highlighting its commitment to disciplined capital management. Trading near its 52-week low at $0.81, InvestingPro analysis suggests the stock is currently undervalued. Subscribers can access 16 additional ProTips and a comprehensive Pro Research Report, providing deeper insights into the company’s financial health and growth prospects.
The information in this article is based on a press release statement from Plug Power Inc.
In other recent news, Plug Power announced a $280 million stock offering, including 46.5 million shares and pre-funded warrants for an additional 138.9 million shares. The company plans to use the proceeds for working capital and general corporate purposes. H.C. Wainwright has maintained a Buy rating on Plug Power with a price target of $3.00, reflecting confidence in the company’s strategy to strengthen its balance sheet. Meanwhile, Jefferies revised its price target for Plug Power to $1.70 from $2.80, maintaining a Hold rating due to uncertainties in the company’s financial outlook. Jefferies highlighted Plug Power’s projected revenue of $771 million for fiscal year 2025 and noted the company’s cost-saving plans. Additionally, Plug Power’s CEO, Andy Marsh, opted to receive half of his 2025 compensation in company stock, indicating confidence in the company’s future performance. This move aligns executive interests with shareholder interests and underscores the company’s commitment to its long-term vision. Plug Power continues to focus on expanding its hydrogen production capacity and optimizing operations for sustainable growth.
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