Plug Power Inc. (NASDAQ:PLUG) Q1 2026 Earnings Call Transcript

Plug Power Inc. (NASDAQ:PLUG) Q1 2026 Earnings Call Transcript May 11, 2026

Plug Power Inc. misses on earnings expectations. Reported EPS is $-0.18 EPS, expectations were $-0.09.

Operator: Greetings, and welcome to the Plug Power First Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It’s now my pleasure to turn the call over to Vice President, Marketing Communications, Teal Hoyos. Please go ahead, Teal.

Teal Vivacqua Hoyos: Thank you. Welcome to the 2026 First Quarter Earnings Call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial position or other forward-looking information. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements as such statements should not be reflect — should not be rather understood as a guarantee of future performance or results.

Such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors. including, but not limited to, risks and uncertainties discussed under Item 1A Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31, 2025, or a quarterly report on Form 10-Q for the quarter ending March 31, 2026, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the date in which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call as a result of new information. At this point, I would like to turn the call over to Plug’s CEO, Jose Luis Crespo.

Jose Crespo: Thank you, Teal. Good afternoon, everyone, and thank you for joining us on our first earnings call of 2026. The first quarter results we announced today represent another important step forward in achieving the objectives we laid out for the year. delivering positive EBITDAS in the fourth quarter and sustaining revenue growth directionally consistent with 2025. In the first quarter, revenue increased 22% year-over-year to $163.5 million, with growth across each of our 3 strategic focus areas; material handling, electrolyzers and hydrogen fuel. Gross margin also improved substantially year-over-year, increasing from negative 55% to negative 13%. This represents a 42 percentage point improvement in gross margin. The cost actions initiated under Project Quantum Leap are now substantially flowing through our P&L and we expect gross margin to improve sequentially through 2026.

This is supported by a combination of volume leverage, mix and continued cost discipline. In Material Handling, we continue to see a strong customer engagement driven by the combination of proven productivity gains, improved product reliability and reduce dependence on electrical grid. In addition, the reinstatement of the investment tax credit earlier this year has improved the economic attractiveness of hydrogen power solutions for many customers. As a result, we continue to project increasing demand from both Amazon and Walmart through new deployments and fleet refresh programs with activity levels increasing across both existing, including our automotive customers and new customer accounts. Our electrolyzer business continues to demonstrate a strong commercial and operational momentum.

Electrolyzer revenue increased significantly growing from $9.2 million in the first quarter of 2025 to $40.8 million in the first quarter of 2026. This reflects the timing of a specific project milestones across our portfolio with multiple large-scale projects now advancing through commissioning and delivery phases. We’re currently in the commissioning phase of the 25-megawatt project with Iberdrola and BP in Spain, and we are finalizing installation activities for the 100-megawatt project with GALP in Portugal. Two of the largest PEM electrolyzer projects currently under deployment in Europe. In addition, we recently announced the award of the front-end engineering design work for the 275-megawatt project with hydrogen in Canada, further strengthening our global project pipeline.

We’re also seeing continued advancement from Allied Green Ammonia on the 2 gigawatt project in Uzbekistan. where several important milestones were achieved during the quarter. In April, Allied Green secured a binding project implementation agreement with the Uzbekistan government establishing the tax and customs incentive framework supporting the project. Just this past Friday, Allied Green signed a memorandum of understanding with Uzbekistan airports to collaborate on SaaS and ESaaS deployment initiatives. We are seeing increased activity across our approximately $8 billion electrolyzer opportunity funnel. especially within the aviation sector where fuel availability due to the ongoing energy supply constraints and geopolitical instability affecting global fuel markets is renewing the interest in energy security and synthetic fuel production.

Our fuel business delivered approximately 20% top line growth year-over-year, driven primarily by new material handling site deployments. and with margin improving by 54 percentage points year-over-year. We continue to improve plant performance, logistics efficiency across the network and plant utilization. We still have a lot of work to do, but we are advancing in the right direction. From a liquidity standpoint, we ended the quarter with $223 million in unrestricted cash and $579 million in restricted cash for a total cash of $802 million. We continue to advance multiple asset monetization initiatives, including extreme data centers that are expected to generate more than $275 million in additional proceeds with the first transaction for approximately $142 million expected to close in June.

Our first quarter results represent another important step towards achieving our stated objectives of positive EBITDAS in the fourth quarter of 2026 and advancing our broader path towards long-term profitability. The foundation is in place. Our focus is now execution, margin expansion and converting scale into sustained profitability. With that, I’ll now turn the call over to Paul, our CFO, for a more detailed review of the quarter financials. Paul?

Paul Middleton: Thanks, Jose Luis. Let me start by emphasizing a few key of the takeaways for this call. First, demand across our core platforms remained strong, driving 22% year-over-year revenue growth. We continue to drive margin improvement and the year-over-year progress reinforces our belief that we’ve hit an inflection point. And lastly, we believe we have more than adequate capital to fund 2026 based on our existing cash position through ongoing operational improvements, the varied asset monetization efforts, significant reductions in CapEx and the quarterly restricted cash releases. Now let me dig a bit deeper into the sales growth. Year-over-year sales growth stemmed from traction across all core platforms reflects strong customer interest, which positions for continued growth throughout ’26.

Q1 results also stem in part from the timing of program deliveries and our conscious efforts to pull programs forward where possible. We will continue to focus on accelerating programs, but as of today, we think the first half will be in the 40% range for the full year in context of our overall guidance of the full year sales growth of 13% to 15%. More specifically, excluding charges for customer warrants, year-over-year material handling platform grew by 15%. Our electrolyzer platform grew by 343%. And our hydrogen fuel sales grew by 10%. There will be ebbs and flows as we progress through ’26. but these results are indicative that we continue to expand our core markets, and we expect all the core platforms to continue growing. Regarding margins, the improvement we delivered in Q1 stems from a culmination of ongoing efforts to optimize and scale the investments we’ve made.

We’ve made a conscious effort to focus on margin and cash flow improvement. and that includes the actions undertaken based on our product cost down road maps and conscious efforts to increase leverage on our OpEx cost. And what you’re seeing in Q1 is how those efforts are clearly showing up in the underlying economics of the business. On a year-over-year basis, gross margin improved by 71%. The drivers are the same ones we’ve been talking about. First, sales growth drives operating leverage across the platform. Second, service continues to improve with quarterly per unit GenDrive service costs down more than 30% year-over-year, driven by improved stack reliability and the pricing actions we continue to undertake. Third, our fuel margin rate improved by approximately 54 percentage points.

We’re getting better leverage out of our hydrogen platform driving enhanced network efficiency and the third-party gas sourcing agreement we signed last year continues to deliver cost downs. Still a lot of work to do, but these structural improvements are driving the right direction. Equally important to these overall results is the fact that we see continued progression as we drive towards our ’26 financial targets. We expect a full year of benefits and the actions undertaken last year and we anticipate continued improvement, incremental leverage from growth in sales given our installed capacity, continued improvements in service cost profile, additional improvements in fuel efficiency and network leverage and continued scrutiny over OpEx. Given these continued efforts, we expect the margin breakeven threshold to continue to lower given traction in cost downs and our increasing ability to get more out of the platforms we have.

Turning to cash. As a reminder, Q1 has historically been our heaviest cash usage quarter given the seasonality of sales and timing of working capital flows. Q1 of this year is consistent with that pattern. There are 2 things I flagged specifically. First, we made strategic buyouts of certain operating lease liabilities associated with our legacy PPA business during the quarter, which added to outflows, but is a net positive for us going forward. This is based on a conscious effort to accelerate the wind down of the PPA business model and these efforts will be accretive to margins and cash flow going forward and serves as a means to accelerate the release of restricted cash reserves. We expect more of these transactions as we progress through the year.

And second, the underlying burn in Q1 tracked moderately better than our internal plan. We ended with over 10% more cash than we initially anticipated. This stem from many factors, including ongoing focus on margin enhancement and working capital leverage. We expect sequential improvement in cash usage across the balance of the year as we move towards our target of positive EBITDAS run rates in the Q4 of ’26. CapEx was very nominal in the quarter, only about $7 million, which is consistent with what we said on the last call. Our hydrogen production network is built. We’re now in a leverage the asset-based phase, and the CapEx run rate reflects that. It postures us really well because as we talk about getting to an EBITDAS positive run rate in Q4 ’26, the combination of margin progression and a very low CapEx run rate mathematically puts us in a position where the cash burn for the year is very manageable given our capital resources and liquidity management plans.

On liquidity, we ended the quarter with over $802 million in total cash, that’s a $223 million in unrestricted cash and cash equivalents and approximately $579 million in restricted cash that is expected to release at a rate of approximately $50 million per quarter over the next several years. On top of that, we have several specific levers tracking to ’26. The first is the asset monetization program we announced in the fourth quarter of last year, which includes the expected stream data centers transactions. We expect approximately $275 million in aggregate proceeds from these hydrogen project monetization efforts. In addition, we are underway with the sale of the Section 48 investment tax credit associated with the St. Gabriel joint venture, the platform we have there in Louisiana.

That’s $39.2 million in total, currently targeted to close by the end of May. We have an effectively unleveraged balance sheet given the debt restructuring we did in Q4 of last year, which also lowered our cost of capital and extended our maturity profile. So we have optionality. Our working plan is that the existing capital plus the expected asset monetization proceeds, coupled with the restricted cash release schedule, we believe collectively will provide adequate capital to fund the operating plan for ’26. Our adjusted EPS for Q1 ’26 was negative $0.08 compared to adjusted EPS in Q1 of ’25 of negative $0.17. Excluded from our adjusted EPS in Q1 ’26 is approximately $140 million and primarily noncash charges related to adjustments for convertible debt and warrant valuations associated with changes in the stock market and the company’s stock price escalation.

I think the progression in the adjusted EPS is illustrative of how operationally the company is making real progress. To wrap up, Q1 was another step on the same trajectory we’ve been on. We’re growing the top line. We’re delivering structural margin improvement. We’re being disciplined on operational expenses and CapEx, and we have multiple identified levers to fund the operating plans for the year. We continue to be laser-focused on driving margin and cash flow improvement and achieving our fourth quarter goal of positive EBITDAS run rate, which sits within the road map of as Luis described, including positive operating income in ’27 and full profitability in ’28. With that, I’ll turn the call back over to Jose Luis.

Jose Crespo: Thank you, Paul. So now we can go on the question section of the call.

Operator: [Operator Instructions] Our first question today is coming from Colin Rusch from Oppenheimer.

Q&A Session

Colin Rusch: Jose Luis, you cross all these European customers, it’s good to see some of the progress that you’re seeing on the electrolyzer side. I’m just curious about urgency and what you can comment on that pipeline starting to move towards following investment decisions besides the products that you’ve talked about and how we could think about that starting to materialize here later this year and next.

Jose Crespo: We continue working on, as I mentioned, on all the projects that we have in the funnel. These projects are quite complex, as you know, Colin, and they require a lot of different parts of the projects to align to get to FID. I’m just going to give you an example. I have a project in Australia. It’s a 50-megawatt project, 5-0 and the project is completely approved by the financial committee of the company that I’m working with. And there is 1 permits that they need from a Board. It’s an Eastman Permian that is actually holding the FID of the project for a month or so. The product is going to happen, but there is some bureaucracy around it. So my point is that there is a certain level of complexity, getting all the things aligned on the FID of the projects.

And it takes time to get them to the point of final investment decision. We have a lot of projects now in the last quarter in the ESaaS industry that have started accelerating. As you can imagine, the situation in Iran has created an issue with the availability of jet fuel in many areas of the world. But in Europe, companies like Ryanair announced a couple of weeks ago that they will have limited amount of jet fuel available to run their operations, and they could run out of some of that fuel by the end of May, beginning of June. So this is leading to many companies actually pushing towards trying to accelerate these type of projects. energy independence is becoming also — and security is becoming also, again, an important item in Europe. And we see that these projects are beginning to accelerate a little bit more than what we were seeing a couple of quarters ago.

Colin Rusch: That’s super helpful. Paul, just on the cash, 2 questions just in terms of OpEx run rate on a cash basis. Should we think about this first quarter run rate being stable here going forward? And then secondly, the inventory levels continue to remain relatively high. I’m just curious about how quickly you might be able to start drawing those down in a real meaningful way.

Paul Middleton: Thanks, Colin. Yes. On the OpEx, there was a few charges in there that won’t repeat. So we’re targeting roughly $75 million per quarter is where we expect that to land in. And we’re working hard to provide a lot of scrutiny over that, so we can keep it contained and not grow that investment base. On the inventory, there was a slight reduction over the quarter, but the reality is where you going to see the big movement this year is over the balance. Each quarter, we expect to grow sequentially and even more so in the second half. And so we’re targeting about $100 million reduction minimum this year in overall inventory levels, and we’re working hard to beat that target. So — but I think you’ll see the majority of that play out in the second half.

Operator: Your next question is coming from Jason Tilchen from Canaccord Genuity.

Jason Tilchen: I think last quarter and even in the prepared remarks, you’ve talked about the value proposition for the materials handling solutions only getting stronger. — with rising electricity prices. Just curious, can you talk a little bit more specifically to some of the conversations you’ve had with the prospective customers, not necessarily some of the core pedicles, but some of the ones that are either smaller current customers or prospective customers and how those conversations have evolved over the past few months?

Jose Crespo: Jason, thank you for the question. So mainly is the conversations are always around productivity or that’s our traditional value that we bring to the table. The addition of ITC or the renewal of ITC, it definitely helps in the business case. But in the latest type of conversations that we’re having with customers, there’s an addition, which is the reduction of electricity demand on the site, usually in a site with 200 forklifts. you can reduce the demand on the side by 2 megawatts or so. And that is really helpful given the constraints of utility power that we’re seeing in the country due to the demand from other industries like data centers. So that is a huge value for customers, added to our traditional value on productivity gains. it creates an additional tailwind for the business case. That is the main topic that we usually discuss with new customers and even with existing customers.

Jason Tilchen: Right. That’s really helpful. And then just one follow-up. In terms of the gross margin improvement, I believe you called out specifically the GenDrive service cost reduction. Can you maybe talk to some of the specific operational improvements and blocking of taxing that you’ve done that are really driving those savings there?

Paul Middleton: Yes. So it’s multifacet because there’s lots of elements to it. But if you just think about it Fundamentally, we have equipment. We’ve got service, we got fuel and equipment. As we continue to grow sales, you’re going to get volume leverage. There’s a lot of things we’re doing in our production processes, especially when you ramp electrolyzers as we have, as an example, we talked last year about a program we rolled out into the year which we call a new diffusion bonding process, that’s just a microcosm example of cost reduction opportunities. And that by using a new process, we were able to cut the cost of that component almost in half. and as you scale and you get more of those opportunities with volume, you can do more of those kind of things.

On the service front, we’ve rolled out a lot of programs, which is driving that per unit cost reduction. with less touches, — we’ve actually been able to reduce the labor tax this quarter for — and increase the unit per labor tech rate. And we’ve rolled out more programs and continue to expect more that we’ll continue to drive increased reliability on that. On the fuel, you’ve seen over the last 1.5 years, a continued progression in the margin every quarter continues to get better. And that’s a combination of leveraging on our plants. taking advantage of the new supply agreement with a third-party provider, driving enhanced delivery — reducing delivery costs and optimizing that network and driving network efficiency. So we still got a long way to go there, but it’s going in the right direction, and we expect those trends to continue.

So those are some of the themes that we’ve been able to take advantage of and certainly consistent with what we’re focused on to keep driving in the course of this year.

Jose Crespo: And on services for GenDrive for material handling, I’m just going to add that the stock life of the product. We’ve been able to double it and in some type of models even triple. That helps with the cost of parts for services, which is really important, but also because we’re doing less changes in the field and less touches, as Paul was saying, we have also been able to reduce the labor in each 1 of the sites. by 1 tech in some cases or even 2 in some cases, which has had an incredible impact on the cost of labor for services.

Operator: The next question is coming from Eric Stine from Craig-Hallum Capital Group.

Eric Stine: So maybe just on material handling, as we think about 2026 and 2027, just curious thoughts on how we should view the makeup new versus existing customers? And then also, in your prepared remarks, you talked about with Walmart and Amazon that you’ve got some new sites, but also some refreshes. And so just curious kind of where you see things in terms of that refresh of sites that maybe you did 5 10 years ago.

Jose Crespo: So thank you for the question, Eric. On material handling for refreshes, we’re going to see in the next few years specifically for Amazon, a refresh of the complete fleet. Our first site with Amazon was in 2016, and we are in 2026. And they basically are using the GenDrives for about 10 years. So our first site, as I said, was in October of 2016, we’re going to begin to see big refreshes at the end of this year because the following year, we did about 12 sites. So we’re going to see a refresh of 12 sites between the end of 2026 and 2027. And then you will see a cadence of around 10 to 12 sites for the next 5 or 6 years or so. So we’re going to get refreshes of around 20,000 units during that time frame. Walmart is similar with Walmart, we have done refreshes in years 5 and 6, and we are right now discussing a substantial refresh of the installed base in 2026 and 2027.

So that is going to create an increase on demand for GenDrives and as Paul was saying before, equipment margins are usually healthy. So we will see the impact of that in the next few years. In terms of new and even growth with other existing customers, what we’re seeing is, for example, on the automotive side, we are doing refreshes and new sites with BMW, a couple of new sites in Europe with BMW. We are also seeing some growth with Stellantis and other European automakers. And we are signing either second sites or new sites with other customers. like, for example, this quarter, we signed a brand-new privilege site with South wire with a value of $11 million. So we’ve seen activity everywhere. We still see, obviously, our 2 main customers, Walmart, Amazon and 2 of the largest companies in the world.

So we’re going to see a lot of impact on the demand in the next couple of years, but that’s just healthy and then we have the diversification in all of our other products. So we see the material handling market moving forward and growing in the next — in this year, next year and the following years.

Operator: [Operator Instructions] Our next question is coming from Sherif Elmaghrabi from BTIG.

Sherif Elmaghrabi: Paul, you touched on this, but Q1 saw another big improvement in fuel margins and the new gas supply contract is obviously helping with that. But have all of your legacy contracts with the IGCs rolled off at this point? And I guess, really, I’m trying to understand if there is room to increase utilization at your captive plant, Louisiana, Georgia and Tennessee.

Paul Middleton: Yes. So the short answer to your question is on the sourcing — they all — the portfolio runs at different cycles in some of those contracts, and so they all terminate at different time periods. Today, consciously, it’s roughly 50-50 sourcing third-party versus internally leveraging on our plants. And there’s a strategic reason why to keep that relationship and good standing and leverage those because our plants are as an example, in the Southeast. And so it can be expensive to truck hydrogen all the way over to California or up to the Northeast. Fortunately, with the agreement that we signed, it put us in a good footing with a substantial reduction in the cost per molecule as well as a means by which to work with them to continue driving, improved efficiencies and network optimization.

But the drivers for us as we go forward are leveraging our plants and as we continue to grow sales and more sites, we certainly will do — and third-party sales. You’ve seen some smaller announcements recently where we’re starting to sell into the merchant market as an example and take an opportunistic — opportunities there where we can to do that. So leveraging those plants will continue to grow and scale and leverage that overhead. The second is really optimizing the delivery network, really getting into how you deliver and when you deliver and how you manage that. There’s tons of opportunities there and then other efficiencies in the network. We made huge strides on improving efficiencies of our storage systems and our dispensing capabilities, but there’s still opportunities there as well.

So those are some of the drivers as to what you’ve seen as to why the margin continues to get better quarter after quarter. And it’s certainly the same themes that we’ve got a daily focus on across all those opportunities that will continue to drive that over the course of this year.

Sherif Elmaghrabi: Got it. That’s helpful. Paul, I have one more for you. I missed how much you’re expecting from the monetization of the Louisiana tax credit? And if you could share how that compares with Georgia, that would be helpful.

Paul Middleton: Yes. So absolute value, it’s actually a little bit more on a gross basis. It’s like $39.4 million, I think what the number was. And it’s — just to clarify, it’s for our joint venture that we have in Louisiana. So that’s proceeds that, that joint venture will get for selling that. And we obviously, as you — I think you probably know, we consolidate that entity. So those results will show up in our consolidated results. And we’ll work with the JV partner, whether we use — believe that $39 million in the JV to fund operations or whether they take their portion and we take our portion. Obviously, if we do take — if it goes that route, we’ve got that it’s incremental $20 for Plug to fund operations, which is obviously very helpful.

But it is — we actually got better terms on that than we did in Georgia, just because of the passage of time and the learnings that we got out of the Georgia sales. So on a net basis in terms of the gross tax credit, we got a better rate.

Operator: Our next question today is coming from Dushyant Ailani from Jeffrey.

Dushyant Ailani: Just one quick one. I guess, if you’re talking about the revenue progression for the year, I think it implies that maybe 2Q might be slightly down quarter-over-quarter. Is that correct? And then maybe what’s kind of driving that? Is there — was there any demand kind of pulling into 1Q? And then also, if 2Q is going to be down quarter-over-quarter. Then how do we think about just the margin progression there in terms of the volumetric leverage that you have shared previously?

Paul Middleton: Yes. So let me try — there’s many parts to your question, but — so if you look historically, we’re somewhere between 1/3 to 40%. It is slightly on the first half of any year. It varies a lot based on timing of customer programs and sometimes most times, Q1 is lower than Q2. But let me be clear, we expect Q2 to grow sequentially. I think we’re giving you guys a directional guidance and using that 40% in relation to our 13% to 15% growth rate for this year. It may only be slight growth off of Q1 but it’s definitely going to be slightly better. And then you have the second half and the timing of that, we’ll see as we continue to progress through the year, how that’s going to play. On the margin progression, again, just to be direct, we absolutely expect the margin rate to continue to improve sequentially quarter-over-quarter.

We’re doing — all the cost down and things that we’re doing, we’re going to continue to — should continue to drive incremental benefit. So we expect that margin rate to improve in Q2 and then continue to ramp from there. Volume makes a big difference. And so the fact that the second half is using my math of roughly 60% of the sales, means there’s even more equipment sales in that second half. So that means it’s even more accretive. But I think what you’re going to see is quarter-over-quarter, you’re going to see growth in the sales number and you’re definitely going to see growth in well, I should say we expected to see growth in the margin rate.

Jose Crespo: And I just want a state what you just said, Paul, will be progression in terms of top line compared to Q1.

Operator: Next question is coming from Chris Dendrinos from RBC Capital Markets.

Christopher Dendrinos: I just wanted to circle back to Europe a little bit here. And I’m curious, looking at some of these refineries and the customer base there. Are they kind of ultimately settling out on a long-term partner here and picking tech, I guess, just looking back over some of these competitors out there, it looks like there have been testing of different technologies, et cetera. And so I’m just kind of curious what you’re seeing on that front?

Jose Crespo: We’re seeing, specifically with the companies that we’re doing business in the refinery side, the largest ones that I mentioned during the call, we’re seeing that they are — looking at expansions in the sites that we have done and in other sites, we are seeing that the progression that we’re making on the commissioning of the product is very satisfactory. and we are looking with them about working together for some of those expansion projects. So given the directives that the EU is pushing through every country, through a process that they call transposition, which is as simple as a European law converted into allow in each 1 of the countries that are members of the EU. They have a mandate to convert a percentage — a certain percentage of the hydrogen they use into green hydrogen. And this is what’s driving these projects. And they are committing to do it, and we are working with them to satisfy those needs.

Christopher Dendrinos: Got it. And then I guess maybe as a follow-up here, just on the opportunity with Allied Green in Uzbekistan and maybe in Australia as well. Can you speak to the potential timing of this and how you see that kind of trend, I guess, playing out over the course of the year?

Jose Crespo: Yes. I mean, I can speak to the timing that I’ve discussed with Alfred Vernal green in the last discussions I had with him as last week, right? Now these timings, as I said before, because of the complexity of these type of projects, usually change. But right now, the idea is to — the objectives will be to do a BDP on the Uzbekistan project in the BDP is the basic engineering and design package. — in the second half of 2026. And then his target is to get to FID in the following months. with a potential notice to proceed to Plug earlier than that. So it is a project that could and I insist, I don’t want to create an expectation that I cannot leave up to because there are so many things that are outside of my control in these projects, right? But in the last conversation, it’s a project that should be moving forward in the next 12 months with BDP happening before with a long notice to proceed also in that time frame.

Operator: Next question is coming from Craig Irwin from ROTH Capital Partners.

Craig Irwin: It’s Andrew on for Craig. I’ve been hopping across a couple of calls, so I apologize. This has been asked early, let me now I can ask something else, but has called out expansion with Amazon and Walmart with material handling. But can you guys kind of talk to any new logo pipeline expansion? And then just overall, kind of the mix between site expansion with the existing customers versus new customer wins that would be great.

Jose Crespo: We are — our team was in Molex. Molex is the largest event for manufacturing and supply chain in April. And our team met with a large amount of companies, new companies, new logos that were interested in the material handling business case given the points that I made before, mainly associated with productivity with ITC and also the advantages associated with reducing the grid demand. At this moment, the majority of the growth that I see in 2026, are related to existing customers. As I said before, mainly in Amazon, mainly Walmart and also associated with automotive. We have new projects with BMW. We have projects with Stellantis and with other European automakers. We closed another second site with software as I mentioned before, that’s not a new name, but it’s a second site that we close with them.

And we have a fairly healthy pipeline of new names and new customers. At this moment, I’m not in position to tell you right now that we’re going to get orders for certain specific names. But I can tell you that the team is working in a few new potential accounts that could be added between now and the end of the year for projects in 2027.

Craig Irwin: Great. Well, I really appreciate the color there. And then second for me kind of in the same vein. I noticed the GenDrive cost per unit was down 30% year-over-year. Can you just kind of talk about the potential to leverage — leveraged cost reduction throughout your installed base?

Paul Middleton: Yes. I think our anticipation is that, that unit cost will continue to come down. And it’s really — it comes from 2 key drivers. One is, well, I’d say 3. First is the parts cost continues to go down as we get the units to continue to run longer. So you just need less parts to keep them up and running. Second is, as that happens, you need less touches of the units throughout the year. So when you need less touches and you can manage the fleet with less labor tax. And so we’re able — as Jose said earlier in the call, we were able to reduce in some cases, 1 tech per site, in some cases, even 2 techs per site. And so we expect that leverage continues as we and continue to grow in scale. And then the third is you sell more units and you grow your sales base, you can leverage the overhead for that service business.

So that continues to scale and grow and ramp as well. So we expect that rate per unit will continue to go down in the course of the year. And we expect that to continue to drive in the right direction.

Operator: We reached the end of our question-and-answer session. I’d like to turn the floor back over to Jose Luis for any further closing comments.

Jose Crespo: Well, thank you, everyone, for the questions and for your engagement and your support. The first quarter results that we just announced provide a solid foundation for the balance of the year. Our priorities for 2026 are the same. They remain unchanged, drive continued sales growth, execute with discipline, continue improving our cost structure, reduce cash usage and delivered positive EBITDAS in the fourth quarter. The underlying business fundamentals continue to improve, demand drivers across our core markets are strengthening and now it’s just about consistent delivery. We, again, we appreciate your continued support and look forward to updating you on our progress in the next quarter. Thank you, everyone. Have a nice evening.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.