On the conference call, management reiterated expectations for cash usage to decrease by more than 70% year-over-year due to a substantial reduction in capital expenditures and anticipated working capital releases. However, the company still has to catch up on payments for last year's equipment purchases, as admitted to by CFO Paul Middleton on the conference call (emphasis added by author): (...) the hydrogen investment that we have in the current plan is predominantly the retention and finalization of the Georgia plant that we've completed. It's the funding for the Louisiana program we have with Olin that we're developing, building, rolling out. And it's kind of residual projects that we had open at the end of last year that we're paying now for, given extended terms on some of the vendor programs. In addition to lowering capital expenditures, the company is looking to generate cash from reducing its electrolyzer inventory while putting less focus on adding new business. So, this year, (...) it's really about executing on the backlog. (...) this year is not about optimizing the capacity utilization or the labor overhead per se. It's really more about using what we've already bought. Moreover, Plug Power has essentially stopped providing lease financing to customers, which should result in a substantial reduction of its massive restricted cash position over time
Based on the numbers provided by management, full-year cash usage is expected to be approximately $500 million. That said, even when assuming a whopping $1 billion in lower cash usage from capex reductions, working capital swings and restricted cash releases, the company would still have to improve losses from operations by another $300 million to arrive at Plug Power's stated target which management expects to achieve by a combination of lower hydrogen fueling costs and price increases across the board. However, raising prices and reducing financing options is likely to result in further deterioration in the company's material handling business. Consequently, management expects Plug Power's new business segments like electrolyzers and liquefaction technology to contribute the majority of revenues this year. Despite anticipated headwinds from the former core business, management still anticipated year-over-year revenue growth. Analysts on average expect Plug Power to achieve approximately 35% growth this year, which I consider way too optimistic again.
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