FuelCell Energy (FCEL) 9 Jun 222022 Q2 Earnings call transcript

Good morning. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the FuelCell Energy’s Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there’ll be a question-and-answer session. Senior your Finance conference. Gelston, you Investor Tom begin may Instructions] Vice and President, Relations, [Operator Tom you on for Good joining Gelston morning us the everyone, call and thank today.

FuelCell to this presentation www.fuelcellenergy.com. and our call This Consistent second are on in addition the of approximately available hours have will Form section slide with and press our earnings fiscal our a webcast and Investor recorded. X reminder, our we replay after on results call and release, quarter available is recorded practice, of XXXX, in our at press a website. for we our financial be the website, this This call. As our is XX-Q conclude posted morning earnings Energy being our the year quarterly released for on being website release report

some future begin, our include the and Such consist business hear our regarding with be please the provided note we the expectations, statements with Before meaning the statements and that will you of plans beliefs development, strategies. information regarding XXXX. respect financing results, or Exchange our Act forward-looking and anticipated technology intentions without plans expectations with limitation: continuing and commercialization, to fuel the and will that cell today, our express of of of statements Securities of financial and our

risk filed section Exchange our subsequently on in XX-K annual in of quarterly and of Form Harbor such is or uncertainties Commission, filings regarding Our actual risks the our risks presentation particularly information by future slide Securities the More a XX-Q. differ recently in on in Safe results and reports uncertainties. such with implied filed form could any available report described statements most and those and because factor from forward-looking the the materially of statement, number and

our you reconciliation for and our website the financial of to During presentation of measures be discussing non-GAAP release those certain measures. and refer will course financial we the earnings the press of we to measures appendix and slide GAAP this call, the to

earnings presentation are Our at today’s release available www.fuelcellenergy.com of on website Investors. copy under a press our webcast and

President Officer; Jason Mike For our Few, Bishop, and Energy’s our today, and joined Chief President, Chief Officer Executive I’m Executive by FuelCell Treasurer. and Vice call Financial

Following our prepared members available take other team. be by of for I remarks. Jason? remarks, to will our Jason we leadership questions the hand will your be now over joined to opening call and

today. morning, the Powerhouse Tom Thank continued In you, progress you made for on everyone. in we and second executing quarter our Thank good joining our call us Strategy. Business

get into I the the to I Before of company. quarter, the overview provide like results a brief always for

stationary power X, technologies. decarbonize as As proprietary as previously platforms globe. manufacturing what the new stated, we shown we do operate across summary, We on in FuelCell and leader we Slide our in focused is new produce in hydrogen. opportunities markets this a on three targeting leverage that across We do and are continents,

week, in a Africa. North In opportunity we fact, this just announced collaboration

we which located ways. chipping Energy and Our distribution, United requirements efficient positions constraints believe States, for supply important, global and increasingly Germany, locations clogged is Canada are currently content the and local given manufacturing chain in FuelCell which

commercial three Generation. of nearly feasibility have revenue revenue million demonstrate our Advanced in fiscal and which Technologies platforms believe products. from licenses, We operation, and XX categories, we In XXXX, service commercial the our year $XX of came

diversified contracts. represent revenue sources which under of All recurring multi-year of

years, have Over no product the had from past sales. two fiscal we revenue

which Energy's in year. of Korea, in our quarter replacement to returned were the this six existing in to the first year delivered an quarter However, revenue of with of product this modules XX initial POSCO order mix sales for service installations first

pursuant to of eight the additional in We POSCO for place the year the and order agreement from Energy, non-cancelable XX, we modules modules settlement third June Korea to of additional the a expect expect order FuelCell terms initial by deliver this XXXX. to with quarter

We fiscal continue to of target delivery of all by the XX XXXX. modules year end

open that in once the Asian agreement, product other as us again optimistic the will from result that sales Korea our markets, are sales. of as America, in have target to purpose. we Latin a East in future On revenues see select market Asian addition in will to well and countries With new Slide to Middle it as Europe, X, North priority product America, made we Africa, a you the where see we

an we supports in company clean The we compared company, reliable to by need while producing future, a we a to and the new costly be outs to and which can our when passionate living do solar standards high avoiding while decarbonizing on customers that by build believe a zero, emissions. challenges. producing can hydrogen in about we the X hydrogen, is believe communities and it in comes Today net minimizing we every and protecting and X this world will by and resource what committed projects, We deliver and which the the focus this the we practical industry that have technology realtime to land power power positioned. drives do created while our are do, power uniquely transition This secure and impacted purpose believe technology We Therefore, a power produce technologies wind to Scope adapting FuelCell energy. will safe, and localized and our world positioned manner. transmission when for simultaneously. of and work well hydrogen. always we and environmentally reducing platforms empowered use solutions is COX, doing. clean are zero. manner growth, As in benefits provide Energy’s Energy path only purpose to operate, FuelCell our of enabling carbon the water, capture believe environment, to assist strategic energy We to responsible and economic

the on for beginning to move will key quarter, Slide second I the X. messages Now, on

Base executing have progress, toward agenda, working process Connecticut, strategic on Navy platforms the in Groton, site. steady the the to of against commissioning our installed completed X.X advancing the at and backlog project of our of two we continue Submarine megawatt commercialization one technologies. At new U.S. We make

The commissioning. resume platform final component additional when complete, then of work, stage and the will that's requires we second

microgrid to increase Navy's stability the its commitment of effort resilience. It U.S. the will expect while U.S. operational, We with FuelCell reliable clean, microgrid to project fortify capacity operational expected and at platforms into demonstrating Energy's to be energy our commercially to the will the supply, platform’s this it portfolio. to Military's to summer, support fully added incorporation grid the base is be demonstrate capabilities. time When which Generation the power

will key electricity, civil we equipment Another of advanced. hydrogen platform for Toyota site, has been water. FuelCell work are X.X and at and megawatt is the and construction project significantly Port Beach built delivered the Tri-Generation that the Long has platform to produce constructing

of completion construction or the the project nearing be with activity are in project We late the early of XXXX the remaining to XXXX. phase completed anticipated

a by deliver When the result, and area project Class improve a achieves and conditions, extension energy to Beach, we expected Once The drought completed, and made our that will quality. carbon-neutral air delayed beyond fuel substantial hydrogen region rail, while platform power in expect heavy and do the commercial to repower passenger commercial and request needed anticipate California, how experiencing project will power be the water of agreement. electricity, can quality produced an we platform provide extreme including this project this busing trucks. Toyota have to green XXXX, and in air real hydrogen sector, is need sector from hydrogen duty we distributed As purchase in operations, to maritime, progress, by June to more. Long the refuel transportation the an operations green will hampered world be and X receive deployed aviation, we example a XXth, both will poor the hydrogen to transportation vehicles be

During we platform our storage. which patented and driving oxide in continued capital invest focused on power generation, commercialization is much solid deliver the energy internal to of our of quarter, R&D, to electrolysis

latter the with a is to we goal recent platform, carbonite increasing capacity in annualized of the making The lower achieving Additionally, development integrated manufacturing that throughput. progress megawatts XXX expected capacity. being are while for costs, of conditioning onsite and key optimizing

also on technology are capture of and commercialization. carbon advancement to we toward separation carbon the Second, continuing focus

application achievement of continue the Following the joint and entered storage with capture advance into agreement our our to capture working and under critical companies development Engineering with to our ExxonMobil Technology carbon an of differentiated enabling FuelCell collaborative technical EMTEC, our milestone associated we technology. development agreement, carbon extension or Company

applications. industrial conducting across pursue demonstration are study also joint and partners a projects, for a opportunities strategies identify we Additionally, application commercialization to capture define carbon market landscape potential broad pilot of or and as we

that During XXXX, and our combined highlighted trillion with approximately our March SEC technology on recent through leveraging Investor X Day X-K capture we believe filed our market XXXX. cumulative presentation XXst, is the the for carbon we

also a oil the world of power includes continuing are Asia. message capture My we supporting Canadian largest with in our third entities. biomass Canadian the Drax, is and carbon technologies. one capture work first key progress government to that in companies, consortium We National This to Resource and our forward our carbon are path storage Kingdom of generation build Limited, sand United making with plants the some in and

Government market. to organization quality of roadmap projects, in opportunities requirements in economy build to given Energy’s The Korean efforts in thermal the aggressive attributes market. district support in Asian in previously choice the technology should create utility the We support build We high desirable announced believe commercial an exciting country. a highly scale that opportunities our is heating hydrogen continue Korea its this which FuelCell for that Korea in differentiated broader new our

hydrogen also to usage hydrogen bringing forward and transition. in to and In announced looks generation Asia market our targets. goals addition, as look platforms unique Japan hydrogen to distributed to We the expand Asian distributed supply the has lead cost

all to quarter, in target XX of of delivery we recall POSCO none settlement the Energy, year it while a during called detail. will fiscal delivered we with base. more existing installed agreement were last for Six to reached delivered its modules over to turn Mike? And Additionally, were replacement the XXXX financial fiscal quarter, this by that XXXX. to end quarter last to I modules modules results discuss year XX now Mike continued be ordered and service quarter which

that to today. our thanks And call those Jason. you, have Thank joined

of to million of on XXXX approximately quarter reported like I'd the of XX increase second beginning quarter ‘XX, in minutes seven. million providing second XX%. to the second quarter compared revenues few an slide our the In spend we on Now XX.X for details financial some results fiscal XXXX, fiscal of fiscal of a

third were quarter quarter there We received of the second modules first of XX POSCO category, in with by revenues modules product module subsidiary do we as a revenues Energy at we the delivered. to as Looking revenues in quarter, expect product consistent XXXX. order the no no expectations from the fiscal our expect in there additional deliver were from

of the Energy pursuant for the June a additional eight settlement Additionally, agreement XXth, to order Energy, to with POSCO terms non-cancelable place modules. XXXX a of we subsidiary by POSCO expect

quarter. the second offset from targeting was partially Toyota loss, the construction expenses the sales maintenance million of its fiscal fact XX, the exchange government or of replacements and to module the to hydrogen in portfolio and XXXX of X.X acceleration $XX.X of by of from output gross expenses the million The up million XXXX, loss. development of ExxonMobil to delivery namely expenses. increased a due or from year during increase X.X Technologies Long Technologies gross of company's fiscal there six quarter Operating to We our recognized loss X.X is expenses year commercialization to and of to by by year. the Project the Company XXXX, development XXXX, the which refurbished second formerly accelerating Technologies fiscal X.X and Authority loss Generation operating XX.X the by the teams, during activities second quarter and increasing X.X quarter solid January are operating in a approximately revenues XX% Engineering commercialization three ended lower under our and of X.X by XXXX, resulted non-recoverable for the XX million of compensation of fiscal million gross increased loss of quarter, to to of and size to an of and quarter. quarter Generation the XXXX, the of first offset million primarily of Yaphank XXXX expenses. due administrative fiscal manufacturing X $XXX,XXX Engineering to of modules, in revenues million, and in and increase project marketing Net as non-routine revenues in million XXXX million second quarter quarter investing agreement related fiscal were Advanced months other initiatives, X.X from delivered Service totaled Gross XXXX. an end loss in related and which quarter XX.X second in of the contract including quarter XX% of second Advanced selling were oxide of fiscal variances, six with second Company compared the project, costs recognized compared reduced $XXX,XXX. on the and for ExxonMobil of quarter marketing consulting higher increase fiscal million fiscal last impact LIPA quarter the its reflecting was prior our of the revenue higher in as million revenues rebranding costs of XXX% compared and sales fiscal spending revenues of months for construction driven of X.X Technology to during contract contracts loss Service fleet excluding Research from development Power Advanced were efforts XX.X The Island million during quarter X.X in the agreements platform. second the increase the all costs million million, to to for higher sales, second result completion related in the during the increased Research second net the increased Toyota due the was in the loss is in as reduced the company Generation primarily comparable a under gross higher non-recoverable XXXX. of known gross the and module XXXX efforts, million higher driven commercial decreased EMTEC a second fiscal the XXXX lower fiscal the X.X joint margin increased

including issuances net second in and fiscal negative XXXX. net of was higher The adjusted to to offset second was second share XXXX is the $XX.X Adjusted Please $XX.X expense stockholders, compared of $X.XX attributable loss million million the $XX.X in higher appendix the quarter due of the basic weighted quarter non-GAAP of and April attributable EBITDA to at see the to compared XXXX. interest since share per average loss second share stockholders the due partially fiscal to quarter Additionally, shares to fiscal to net fiscal of adjusted common in EBITDA period. common the primarily in the prior of by second of our the discussion the basic higher number fiscal measures, quarter financial of year loss common XXXX. XXXX end per earnings the outstanding release. $XX totaled quarter XXXX, negative EBITDA per million at XX, million share compared diluted $.XX of diluted higher in or in or The

for side please to performance the turn numbers backlog. we the on our hand 'XX. of just fiscal X Next, additional and reviewed of quarters Slide for at certain and shows 'XX the The details years chart graphically left financial second

of Service continued backlog and adjustments offset the a of finished and product and slightly to execution a reduction the at the sales Technologies Advanced of backlog, was as Looking Slide, Generation right backlog, of billion, with backlog partially we primarily to reflecting by of the quarter year-over-year $X.XX addition the backlog. side hand that up a result

in the Specifically changes the addition sales and backlog subsidiary future that POSCO exchanges Energy of our and to order backlog from to Generation to expected of product are from a contribute output portfolio reflect module higher revenues. received module

Energy, the our EMTEC. Our performed partially development Department with Advanced U.S. contracts backlog from agreement new of by work reflects offset joint Technologies under

liquidity Slide would an give ongoing to in update to X, I project on our and assets. Turning investment like the enhanced

cash an total the had and blue of an bar, equivalents About generating at cash program we fiscal unrestricted up the represented restricted sold XXXX, under shares stock, of Jeffries XXth, darker quarters slide million second center bar. million our approximately cash the of fiscal cash, net offering liquidity the proceeds lighter on program the last fourth common chart million. million of year, and of company we cash a April quarter XXXX approximately year by and market million XXXX, of restricted common net sold to of commenced $XX.X our $XXX.X $XXX.X $XXX in of $XXX cash the equivalents and in strengthen million. cash flexibility, proceeds blue Barclays of of June XX XX.X to financial and and the includes In offer approximately to in by the equivalents $XXX.X of resulting the of ago, million In shares we additional to approximately an third the This stock. As we represented with Capital million.

project as which construction. the At capital the capital right spent project and intend spent side excludes illustrating to make assets XXXX, at total the assets. approximately portfolio depreciation. totaled grow of accumulated million, on the continue portfolio. project our completed our fiscal is chart development company-owned assets, operating Looking to quarter our hand a of of projects reflect We and Investments gross currently of construct there develop, to-date on which end up in second $XXX.X as well projects, under generation our slide,

April XX.X operating totaled assets on megawatts XX.X process. megawatts our XXXX. this the detailed XX.X Slide assets XX portfolio in projects and of in of includes of of of as This As presentation, XXth, Generation megawatts appendix

expected they process higher revenue. contribute commercial begin are to operation, As projects in

process Additionally, long-term and transactions further as business. these seek mechanical to to projects reinvest achieve or as Slide Please we leveraged well back XX. commercial tax into in equity reach operation, debt completion as the back additional financing, turn expect to capital

our in As and in of will of investments in are Capital we capacity laboratory targeting March primary our to out an and the spending of Day shared business Investor capital upgrades and filings, Generation tests increased portfolio. our build and in public systems. we research during development continued previously areas additional and our expansion be areas, expansion, three facilities expenditures,

our decreasing earlier million million million certain an XXXX. that of $XX estimated timing CapEx in are will from to of We due investments estimate $XX $XX to full be of a fiscal to range $XX expect year we million rather made year than XXXX, now to

focused at are and energy Development, commercialization Looking Research including of efforts technologies, R&D our long hydrogen duration on our storage.

estimated R&D a to to of decreasing are year expenses We $XX to million estimate $XX our of full million million. an from $XX million $XX earlier range

should We out recurring our growth build begin from are benefit as to committed under power operation which Generation the the projects continuing agreements. purchase portfolio, in of revenues,

had As XXXX. of cash the $XX investment fiscal expected April million. XXth, of projects some this remaining to to in in XXXX, under XXth, beginning year out construction, flows assets XXXX, To in the are portfolio which build generate approximately megawatts be of operating XX.X of estimate development projects April company we as

$XX to be we $XX in expenditures For million. forecast projects fiscal year to XXXX, million range the asset of

in We accelerating result investments well positioned transition. expect the that participate and energy in FuelCell is we the to these believe for Energy growth company, to

over that future. the focus excess $XXX being we time, backlog, our our have while will the months, In of in keep recognize with potential the there we by of now the the impacted view progress in in of that of the fleet us continued fiscal substantial Day, our closing, for this will our coming are discussed sales XXXX, negatively sectors well revenue At $X fiscal to for the that are million and and by Jason. end we have from recurring revenue the end turn pleased Jason? combination year is of to be targets call current some made. As in back XXXX. excess year continued Investor billion positioned established I

Powerhouse Business our strategy guiding Slide toward for Strategy, I long to which On Mike. term our highlights XX, the want is reiterate of Thanks growth. our journey

first for to technology. segments pursue significant The want opportunities where growth. tenant see is in We our we and growth customer markets

believe the investing second and achieve to extending innovate. capital in, organization. will We is enable our continued XXXX market is us we The third, platform the plan scale that will hydrogen focus of Two in deliver cumulative And leadership help and our trillion, on expect and existing participation purpose. our economy carbon on capture and by markets. the scale believe total than to our deepening growth we the $X.X our combined greater where growth we innovation opportunities human through across

accelerated and to Strategy our Business evolved couple is important has focus pace, role The years will play global believe our Powerhouse over past at an of society helping energy growth. sustainability the technologies Our in we transition on achieve goals. happening an

capabilities investments with and growing capability, markets. of is more XX, more global the strengths mean forward On achieving over Part the moving our product I in have in with global am optimizing are are we an enhanced achieve the working recent are will the sales the of provided by by we market enhance on capacity, returns Investor capitalizing as which technology our deliver years, on our how long-term shareholder run. We and this targets talent, the Slide we to capture organization are proud how opportunities. to team believe growth business and goal progress ability of making long our key shared coming pursuing detail and at core we our we opportunity Day. we which over of

manufacturing and the module revenue example to to sales one Just product growth. our Korea These today. existing cells utilize that meaningful processes add we FuelCell is technology discussed

been customer segments expand Asia, Chief are his joined To and very across in forward have to across geographies Vice across happy important am we to in Mark drive and build targeting leadership our our on this, Korea look and and further commercial the One and as and has our excellence strengthen of by as team relationships recently and geographically goals geographic Feasel, to Europe support President to helping our applications, Officer. world. well sales of United focused of Commercial I opportunities the as Executive opportunities market, States markets. customer-centric rest I

significant in our sales sales force We in region. opportunities the have progress that made in increasing Asia our building of with goal

Chief Parimal Oxide first added multi-pronged as Parimal also and pursue remains SVP, February, that oxide. commercialize I SVP, scale Corporate Officer dedication report, our to our forefront. solid we growth we John Development We as in our X and we Manufacturing as Solid net published sustainability Torrance, and the strategy In achieving want to highlight

on achieving Scope and We XXXX committed to by emissions and X are Scope net X X Scope emissions by XXXX. X

that organizations aligned are and leading Climate we with can the goals We Action the UN impact. standard

Beyond of a our business. which commitments, on aspect diverse, and company we communities Board every equitable and This live focused equally in our and people we and inclusive teammates, work the our our our and is the organization. in in shared be are environmental across commitment

positioned remarks strengthen conclude on have balance XX, cost on enhanced borrowing, we strategic company of we reduced liquidity Finally, to our to have my believe sheet, several to our growth actions execute Slide our the executed strategy. which and

well-established have We financing with relationships providers.

make equity the scale investments and as operations the and to continue company source sales we provides to transactions by evidenced well as our liquidity our the as and in commercializing today discussed We technologies our of expand liquidity tax with flexibility marketing.

play of supporting infrastructure developing the contracts. our capture grid, believe and industrial goals a have long-term We $X.X that of investments energy existing to the decarbonizing recurring global hydrogen revenues technologies role solutions. differentiated the have We economy billion in with and carbon from with key backlog

we will over full to cycle Finally, we it stewardship intend environmental to a through our leader technology the platforms. turn of I operator Q&A. the begin and sustainability be life the in deliver to now and

comes [Operator Our question Oppenheimer & from first Instructions] from Rusch Colin Company.

the update to progress just of lot capture an you monetize curious a on bit little are things continue make more technology I'm there? a way plans in beyond your the how development agreement. carbon as concrete to get We emerging

Colin. Sure,

about Exxon the developing that around And extension balance the the plan the marketing that's we've through a agreement joint technology. the of commercialization extended also than things this we with of announced, we is year. includes -- talked As different this agreement what and one previously

work geographies will, go that as think and customer the so done technology carbon as can against after target. X, first we kind applications really to of our capture And effectively to of that the capability industrial about is segments Phase if for to the us being demonstrate you

so cut petrochemical about industrial applications we're doing example, manufacturing in boiler And the might like of upgrade Canada, about really are project we're talk will a or processes. When we be boiler a that or other that that carbon across. process applications, refining used like for it where where thinks from capturing -- in kind application boilers

segment a and likely that of set. kind that as to a we'll of kind So really to technology that's -- that as types. we'll effort. the market the look full-on include different of different try focus part solution of against to of demonstrate couple And And against couple of look a geographies well as

we're of not example, going actually actually COX against So what's what's to move that sequestration. sequestration, to point the the kind worker infrastructure the subsurface but the to just carbon capture, execute to use technology for a of an

will commercialize it the to how and a technology wholesome forward. full be we're around going So move plan it

on That's working rate really business might some the need you sell terms And where little you side super Can product and guys resources where you to dynamics talk the got driving helpful. about some and additional competitive in now PGR. changes then revenue? growing competing that are bit that of on you've make well, some a sales

sure. Yes,

we see just resilience across part producing big markets. hydrogen In our we mean sequestration. beverage, us see we side. demonstrated of of we see of And and CF at we good markets, as and U.S., And ways going quite the we in that's on for for terms say you district And today EU, standpoint, look biofuels kind market U.S. be I Mid across big us. utilization into world, then and not look business from to there, like -- deliver some when the distributed like processing, hydrogen you great in XX% more going food X that then microgrid, Times, and of to about strong talk So a represent hydrogen. its food think we applications. of and reliability, Asia, distributed our folks I at Cheshire, as markets if opportunities opportunity see capabilities and applications of cooling as think world see the also we the to see seeing around inclusive applications, and to given example, look those opportunity I we're fertilizer and really if impact a think strong opportunities see a it so that's we we and interest about to and We about Financial and globe COX the and for of opportunity of the the those meat when just markets, definitely at opportunity rest for that international the uniqueness And look shutting look break on opportunities our only when number in on we the COX at. we particularly the of just kind of example, multiple there. East, we carbonate plants of but Korea, have the because Industries the we heating a particular in And an for continue effectively reported then compete about that is an utility for supply, Africa, LatAm, was of all U.S. when one across have XX% that's and fertilizer example. an down across that not you our

U.S. kind the produced from out of distributed of we that's hydrogen fuel. coming of the hub being see infrastructure demand outside package, even So concept

technology hydrogen our North great that's of the as markets around interest we're in And so North announced level, to Africa, port hydrogen pipelines we interest an and port electrolysis the in for that to electrolysis we're Africa and think MAU resource into course, and as the of a leverage that well other U.S. seeing to we distributed seeing at lot around being coverage Toyota movement project, all a as then, then a in that's but only Italy the strong able we of leveraging as and world. move just demonstrate not back sun shore, parts EU goods or example. and the strong And a as in ship project

Our next from Laurence Alexander from comes Jefferies. question

[Kevin This Alexander. Estock] is actually on for Laurence

question hear I blue think my hydrogen. would and out I first you project. So curious I'm is I just do green guess thought there build of might interested broad bit has guess the Toyota And gross it with to you question of how to do a sort to expect take further guess long and green something to be commentary to do helpful. you And any my them And be with that's capacity. Basically, turn second would positive? in? has you hydrogen when margins.

Yes.

really Toyota because a that because of about really and or that when applications green use be those we opportunities project, carbon-neutral think delivering and going hydrogen about think we're And cases. hydrogen about and kind of to think pink leveraging or think more R&D, that's way internationally. to that's a for we color, continue the to carbon case we kind the green hydrogen, So we you we're hydrogen, a think delivering going hydrogen better standpoint of project. particular both power on hydrogen projects be try or us, are delivered to intensity blue to the domestically for pick from we're water real it In

rapidly forward those of in projects putting tube we it on a it. hydrogen move truck because have of for an putting think and a moving without electrolysis the infrastructure challenge a the and that's still so some that a you things there's bit trailer of projects is there hydrogen it And green to versus maybe one pure opportunity more moving

hydrogen And both internationally. And a domestically ability opportunity so I'll strong to and do let and in there's And maybe work done expanding opportunities that deliver application more for that little very profile. to still a there, margin the of will us. yes, be leveraging think our we about fuel hydrogen that distributed but interested bit Mike in talk even we are needs green and those be

Jason. Thanks, Sure.

my our So from line there. you I'll walk just through items and maybe perspective P&L a give perspective, margin on

XX% That was of we our million have That any POSCO consistent million with quarter, product we Recall balance expect $XX product $XX of that did the We not from order. had margins. about this revenue. generated a Energy. So order. quarter, expectations, do last revenue subsidiary of a

of expect that balance the our of We to by be the end delivered fiscal year.

negative So this Service you'll line quarter, about coming that margin. Service that revenue margin see from additional $X.X is variable. revenue and was item. million

positive through see What's expect margins to negative fleet coming things. As expands, is service you'll we flat. from typically the margins really X generation, Generation do

costs been depreciation. line expensing project we've have to the also Toyota project in that We item. then And related

with EBITDA company on range positive the then the those the targeting Technologies if for So quarter, Advanced Technologies, margins how to Advanced out line our you margins that technologies. margins the is EBITDA in And in this back basis. XX% Generation you've And consistently of mentioned, just you items XX% margins brings is XX% that Advanced thinks finally, you an Technologies, around -- I EMTEC X a Typically, that about advanced we're XX%. of really quarter. seen work And combination saw coming from through or ExxonMobil. EBITDA

comes Parks question Noel Tuohy from next from Brothers. Our

visibility about I One things. mention was a into have Generation earlier exchanges how of of that the module is those? couple much you the there portfolio. And do timing in have a

Mike. I'll This is take one. that

assets. quarter, recent portfolio company the first higher the recurring Generation about came So come the and from held portfolio Generation on revenues These for And cash that's example, company you're coming is reason long-term by our are these benefit why portfolio, seeing online, sheet. to to are have the retained assets you've online has the as through. way in LIPA XX-year And think balance Generation quarters increased a typically our projects why seen in Yaphank from revenues project the the flows.

-- fleet, higher kind from we about we is coming think this out way will through this build of -- portfolio. continue that you'll see So revenues as the the to what

sort that are module -- those exchanges And the Okay. of predictable economics --

I'm sorry.

the Just life of our purchase X cycle current over -- exchanges. module the The around works that modules you will to we the replace follow years. is today of way the we're modules is the -- so technology power on and course deploying to agreement,

that So exchanges. module out over the module visibility revenue have to when XX% those essentially about we able will its lead plan degrades be occur, because they life. to to higher And

So that's comes you're seeing slight reductions in new revenue to over revenue online, the time. leads the what increase. And then module when

Sorry, I my clear there. answer wasn't in first

problem touch I the just No project. wanted Toyota all. at to on And

And times for future? of is just of ahead commissioning mentioned represented booking the final that in about looking get a there shift upon of approaching a cost we'll You've the it, that. how couple in costs or the see

contract to a project, Toyota way that we renewable gas secured not we project. have the that the think yet project, -- So for about natural

as So project a economics. fully to not we're the able estimate result,

So doing expensing quarters, what capitalizing is which accounting going what has disclosed, been essentially plant and which recoverable calling we've and power nonrecoverable the and work back site been several from we're an perspective costs, costs. we're

will The clearer, positive or about I costs we positive for really project. be an get talked closer to our in project, are there other EBITDA on the but securing range and project. do as flow we as dependent cost is -- the economics capitalize the that cash we renewable economics of of the part mentioned, that source, be expensing As capital expect I working going projects. that that But company the gas of opportunity might additional on become forward, commissioning, is future to to natural

I And wonder of topic. just general a sort as Great.

fit I foresee We months the of hydrogen have from And adoption what in in projects, where and there different support those over more, hydrogen you many or whether see past infrastructure X regions, business? year. guess, your bill potential just the have the hub I financed, overall would independently X just on also of for across an you About mix. them is hearing been with influence developing those wonder, own as those trends might sort

this we an think Few. Yes. are Look, is Jason the Noel, exciting opportunity. hydrogen hubs

of kind about out seen actually at and additional there's hydrogen up to got DOE the submit those items, these R&D to pair probably of about [$X.X] conventional do a was kind now If $X.X what to by was hubs hydrogen that $X hydrogen And country, programs you've least DOE or at billion hubs, described that allocated going between billion states infrastructure another proposals X or package. infrastructure toward around billion. the everything and/or intent be was signed the of to of a wisdom opportunities. from allocated number you be total hydrogen-related trillion-plus win kind what then to is roughly right hub the position which actually are The you've look package infrastructure $X that's is Biden, by of And original to X%. in entities President

those. an New part as But number example, and we're give participating Connecticut, example, that example. Jersey, one So we a an as to York an in Massachusetts are includes just in of of Connecticut, New

that project, there'll plan the to will to projects companies hydrogen show to and be compelling and funding want is to put support a in DOE be you corridor, together the DOE, try if production want do they've think from from they make Northeast program one demonstrating about utilization. there DOE, consider so the is the indicated be And of to the that, for the that the sources. those funding And things States successful the that in of multitude hydrogen a what from to you production as will

just the with to can company, So doing our for demonstrate, produce as a give you perspective fuel. we we're to hydrogen utilizing ability Toyota,

wind might hydrogen. renewable hydrogen that show hydrogen from also showing for other transportation via to use production some want fuel, They to that able way that one DOE So application the is distributed being solar. or energy be interested and like produced be perhaps for in

for that's commercialize production then down working power fuel electrolysis and using gas it carbon for using applications hydrogen that our into replacement to we're potentially gas. be that could blending and energy demonstrate manufacturing hydrogen using that water So renewable to or platform potential hydrogen in intensity bring technology converting steel or the a where to like in that utilized as

come not waiting will, So has And those. a if earnest. is in you together. the yet, kick think hubs participating these number number of in DOE's on The different RFP, out come of really we so ways that. off going a everyone are that We're will process to

Instructions] Craig-Hallum. Our from Eric Stine comes [Operator question from next

you the an Or I construction, sticking you what little you a to said you get the but look any and on extension steps you're forward? into challenges maybe with do on next we for with that? almost detail? PPA. a kind of anticipate just more should I things left So going just done are Toyota. need go Could know more there few mean, are

I'll And Jason. the start, is this maybe, itself. Eric, Mike Lisowski talk maybe project -- turn Mike to just Yes. about to it and to I'll over maybe then

the progress Toyota issues in these process we're wanting We in this delayed we I mean, utility to with remains on you of through We as that part as the extensions projects about project this and very the may or result just we as if initially things. project. PUC. solid project. were go a of indicated, you this you the types And very back the to to believe those challenge mechanical think making side. work close to very of beginning, to the some recall, are committed And is

had initial work that began issues, project. those really through the this we to in delay So

that so Port to the this, view we they Beach mean actually right committed this think impressive now, think that's worked you extensions have and as a we were through be at very there. would project. I get both to Toyota if and in of you FuelCell think and see of platform that previously in fact, we'll I pretty And And Long through the remain well, the

don't more. as projects And to talk so the you about I I know are think they're we. Mike, if excited want

advancement this Mike And Jason. of I'm of Officer. you, execution quite and Lisowski, proud for Eric, Thank the progress Chief the project. on This Yes. is question. made you, Operating thank

the built think And execution We've been have together. Just site been mechanical design project have electrical the construction site, complete of work year commissioning about the equipment of this Jason progress commissioning the launched perhaps to and to it engage the with element portion quite through assembled nearing that connected operation, on and march delivered the it unpack the the we're and we'll of bit, But collaboratively -- and And operation. is assembly the mechanical to as we'll calendar Toyota all way the to beginning highlighted, into and next will, and commercial is and The very being we skids to visible, work. that up completion, very little calendar bringing thoughtfully plant remaining work is all site civil later of is plant process. and -- bringing is that's as the launch indicated of ahead the the the then Jason once then year. as the and engineered highlighted. and forward fabricated the of completion impressive, complete, on the to a continuing is looking equipment commercial through platform steps

gas. I natural that lot activity facility? to but also -- the I in a safe about going know to you're a I mean, of in lot mean would it is not those on that feed an all say R&D renewable competition for of volumes, And contract -- I terms worried of there's

major you're they're that is getting integrated they this major And positive we around to you're volumes going given in we I believe the the that think other a that of think going number a be going participate are what think that's just in No. which large seeing, be getting for to Look, do. thing is we that volumes there, in development going is the not space challenge a continued seeing is R&D. way. we And because there's that projects area are at the facility, that R&D to on the R&D into California, the mean,

so And that. we pretty feel good about

absolutely. Yes,

maybe me. Well, for Okay. last then

the on I you've you're product -- know Just on focused certainly that. side.

around more a You've mean positive, when of you willing detail the pipeline. I levels in curious, or But with POSCO. I'm on product see quoting terms you're amended of the timing give And not to outside got some agreement make the maybe the can if momentum you sure clearly or agreement prediction might just you're anything but of replacement modules?

Yes.

But is much XXXX, well I we is sales would it XX-month, between resolved, we from example, of is overhang as XXXX as the as we that. think lifted. or sales we June agreement, that going, we think has was would there say what and prospective of know, that now like cloud the We --- had give in a still cycle cycle, that had kind engagement tell that Here's about terminated dispute customers that's existing forecast our -- POSCO now that, I for you level although stronger don't and the on something would out that. say you what that, XX-month I I with

to that really that. markets, traditional broader feel in be business. just parts And world, our in in and team than about experience expanding more to we and as we sales tend markets would which focus our the of EU, product so purchase having general, continue, And the see PPA that in certainly to expect then focus has where in we markets been would growing other around we're the a good world expect the our

over in to further have call no We Few remarks. Jason turn I'd for closing back questions the queue. like to

want that for call everyone the Julianne, very I today. much. and appreciate thank to really joining you thank

work day, and empowered goal to for about great to look our Strategy enabling delivering again speaking have continue Thank a The you next Thank Powerhouse of you. optimizing be and the growth returns. a and on you we deliver will team to Business world execute Energy We our with excited FuelCell to clean quarter. of to on purpose energy. our is forward joining,

Thank today's your participation. call. for concludes This conference you

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