Greetings, and welcome to the Plug Power's Fourth Quarter and Year-End 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator instructions] It's now my pleasure to turn the call over to Teal Hoyos, Director of Marketing Communications. Please go ahead, Teal

Thank you. Welcome to the 2020 fourth quarter and year-end update call. This call will include forward-looking statements. The forward-looking statements contained projections of our future results of operations or our financial position or state other forward-looking information. We intend to these forward-looking statements to be covered by the safe harbor provision 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 and such statement should not be readily guaranteed 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, 2019, or quarterly report filed on Form 10-Q for the quarter end March 31, June 30 and September 30, 2020 as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day in which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call or it was also new information. At this point, I would like to turn the call over to Plug Power's CEO, Andy Marsh.

Thank you, Teal. Good morning everyone and thank you for joining Plug Power's end of the year conference call. 2020 as everyone knows for the world was a very challenging year. We have at Plug Powers and very fortunate as we participate and witness globally the acceptance of hydrogen, especially green hydrogen, as critical to help lead the world off fossil fuels. Estimates have been made by experts that hydrogen can represent 18% to 23% of world's energy by 2050 and is ramping today. We at Plug Power have been building our technology set for decades, waiting for this moments. At PowerPoint they're 10 years old to describe how our work then will position us at the right moment. The work was more than technology that building the first commercial market for fuel cells. Our first app material handling to [indiscernible] built the Company, proved their technology set and watch the full suite of products and new capabilities. Our turnkey solutions that provide end-to-end solutions including selling hydrogen that building fueling stations and fuel sales and providing aftermarket service really positions us today. Our relationships with Amazon and Walmart gave us insight into how they improved our offering, but also helps us identify the missing links in our portfolios. One of these insights was that large corporations, sustainability goals are real, and that's where the market to expand green hydrogen was in necessity. Green hydrogen also became practical over the last couple years. This is closely linked to the declining costs of renewable electricity. This insight drove us to make three decisions in 2020. We purchased a leading electrolyzer technology company, Giner ELX, that had the electrolyzer technology to convert electricity to hydrogen, green hydrogen. Two, we purchased United Hydrogen, the first private company that built a large scale liquid…

Thanks. We'll now be conducting a question-and-answer session. [Operator Instructions] Our first question today is from Eric Stein from Craig-Hallum. Your line is now live.

So you have mentioned in the prepared remarks, the SK partnership obviously the investment closed overnight, but maybe there's some clarity into how it's accelerated since that announcement. How do you view the opportunity and maybe which areas do you think move faster than others?

Sure. So, Eric, when we made the announcement I think that I started out by saying, I felt we were being conservative. We have developed actually six work streams in the development of this JV with teams are meeting two to three times a week. We've identified certain business opportunities, quite honestly, that are much larger than we even thought initially. And that, I think that the first three opportunities will be one large scale power generation. I would expect we'll be shipping products later this year or early next year. That's not enough for $75 million plan. I think the second is a SK has a real commitment to sustainability. I think you'll see electrolyzer products be moving over into SK for usage again early next year. And finally, there's a lot of work on going with hydrogen generation and fueling stations.

Got it. And just to clarify what I think, I heard that that's not in the 475, on the large scale.

Yes, that's not in the 470 -- the 475, as I mentioned in the prepared remarks, we have 93% in half at the moment. Usually, we're at the 75% level at this time.

Got it and maybe sticking with that topic. Can you get the four pedestal customers and materials handling, curious what type of mix you see from those four, the one recently added, but those four in 2021? And then, you typically don't give the four year outlook this early in the year at least, I don't remember that you have. So I'd love to hear what visibility you have is from the four customers you've got, and potentially some others that you add into that 2022 goal that you've given today.

Sure, so we have between those four customers and others, and Eric those four customers probably represent 80% of our deployments here in 2020-2021. That circle in the range that there's already $400 million in-house that's available for shipment this year. And I think that's one of those four will represent more like 30% and the rest will be kind of split a little bit even.

Got it. And just in terms of a little bit on 2022. I mean that maybe you have given the forward year and not the current year, but the forward year guide or outlook if early. But just curious you've got better visibility than you typically do in 2021, but what type of visibility do you have into 2022based on their plans? And how does that compare to historical?

Yes, I mean, I think there's three items going on here that helps us with 2020 to be able to have the insight into 2022. So, obviously, after all these years with many of these material handling customers and I've talked about before, we're not doing short term planning, we're doing three to five year planning. So, there's a good deal of insight into their activities. The electrolyzer sales funnel was strong. And this year, we'll take that business and like we've been in material handling increasing by a factor seven or eight this year, we'll be in the $40 million plus range. And we have a funnel that's close to $1 billion already built up for the electrolyzer business. And I think -- and as you know everything that funnel doesn't have it. And finally, when I take a look at especially with SK with some of the initial deployments, as well as with every now, we're kind of sitting back feeling very, very good about how we achieved the 2021 goals.

Our next question today's is coming from Colin Rusch from Oppenheimer. Your light is now live.

Can you guys give us an update on where you're at, just in terms of specific projects, in terms of identifying sites on the renewable side for supporting the hydrogen rollout? And then, how thick the queue is behind that in terms of the size that you could grow into, as you start to see demand emerge?

So very clear, Colin, so we have four sites, three of them, which are moving into development stage. Two in the northeast, one in the southeast, and one in California, because of as you know, permitting issues in that. California can be can take a little bit longer, but we already actually own the land in California for the green hydrogen plant, in valley around [indiscernible]. We have probably over 15 to 17 renewable sites for looking at for the ability to generate green hydrogen, which are spread widely across the country. I think there are two plants first two or three plants you'll see go up. I think I see one in the northeast, one in the southwest and one in Texas.

Okay, and as you look at those opportunities, is that going to be an opportunity for you guys to also build some sort of regulation or storage type applications adjacent to those sites that help stabilize the grid? Certainly, that's one of the opportunities for hydrogen in terms of kind of being the connective tissue for some intermittent renewables and the larger power grid, but are those sites being chosen with multiple purposes in mind?

I'm going to say -- I'm going to give you a wishy-washy answer to. Yes, but not nearly as clearly defined as the generation permission. All these sites are grid connected. There will be four the leader, so that cost wholesale type prices. But -- and we've been, obviously thinking a great deal about the issues during that. First and foremost, and we are committed to green hydrogen and providing our customers green hydrogen. And I can tell you, one not surprising when we look at the wind farm activities that we're looking at in Texas. And by the way, the wind farm user we work with actually was very successful during the recent Texas storm. We certainly are looking at the wind energy, how we put wind back on the grid at the right time and how to use it at the right time. But we are also -- and that's really clearly defined, but certainly storage and generation is in the back of our mind, especially after what we see going on around the world.

Thanks, Andy.

By the way, Colin, I think that's the case just going to help us a great deal in those learnings.

Yes, that makes sense. Appreciate it. We'll take the rest offline.

Okay.

Thank you. [Operator Instructions] Our next question is coming from Jeff Osborne from Cowen. Your line is now live.

Hey, good morning, guys. Congratulations on all the success so far. You've got a lot of irons in the fire for 2021. And I was just wondering, if you can give us a sense of the operating expense trends and CapEx for modeling purposes as you gear up for the very heavy growth you've got for '22 through '24 that you talked about, Andy?

Sure. So Jeff, I would -- from the CapEx area, I would probably circle somewhere around $750 million with most of that going to support the expansion of these hydrogen plant. We've done CapEx modeling for the next five years. And we still see a significant surplus on our balance sheet even with our aggressive plans to build out these hydrogen plants. There is a reach to 500 tons a day and to achieve everything we're looking to do, which property somewhere in the $2 billion to $2.5 billion range, long term. As far as comp expense. Paul, you may want to comment on that. Jeff, I would expect there OpEx expense may be up to 30% higher this year. Paul, do you want to add to that?

Yes, I think. Yes, I'm sorry, Andy, can you hear me?

Yes.

The signals are not so great, I apologize, but I think that's right. I mean, I think in that 30 or low 30 range per quarter is a good number. And I think the one of the key things Jeff this year is, we're going to see definitely growth in sales and gross margins. And there's a strong focus there. And as Andy alluded, we're going to be investing in CapEx and some OpEx to, for all these growth platforms. Because there's a lot in the fire and a lot of things happening, and we see the opportunity to really accelerate the growth even further. So, you will see some of that this year.

Got it. And then, the 30% comment, is that off of the fourth quarter run rate or the aggregate number for all 2020?

Yes, I would use this. Go ahead, Paul. Paul. Jeff, can you hear me?

I can hear you, Andy. Just fourth quarter was up quite sharply. I just want to make sure I'm using.

I say, no, no, I would use the annual basis. Yes.

Got it. And then, how are we proceeding along just given a pretty heavy CapEx there over the year as well as the upcoming years for these facilities? Are we at a point in time now where these sites can use leverage? Or is this all going to be straight out of the cash balance?

I'll let Paul. So, I think he answered your questions. Yes. Paul, are you there? Okay, I guess I'm going to have to take it. No, I think you're going to see leverage coming into play. And I think you've hit on a good point, Jeff. We've done modeling to make sure we have sufficient cash balances during -- to do it on our own, but I think you're going to start probably seeing leverage in the second half of the year, as we start during the buildup. So, there has been work going on there, and I think you'll see probably from a conservative basis, we said to ourselves, right, if we did it with all equity, we can do that in a position to do that now. But we don't expect that to be the past.

And my last one for you, Andy. Just the two joint ventures, are we at a point in time? Where you can confirm that the results of those JVs will be consolidated in terms of revenue? Or will these all be below the line? That might be more of a question for Paul, but just in terms of the accounting treatment of the joint ventures themselves?

I know we're working in the negotiations to make sure we can consolidate, and I think we're getting there. I think that both partners understand the criticality at the Plug because, as you know, Jeff, there's a lot of accounting that goes into that a lot of the legal work that goes into that from working through it.

Thank you. Our next question today is coming from Craig Irwin from ROTH Capital Partners. Your line is now live.

Good morning and thanks for taking my question. I'll also say congratulation for.

Good morning, Craig. How are you?

Okay. I'll need to say congratulations to you. You guys had an absolutely phenomenal 2020 and let's continue that in 2021. So congrats.

My Board agrees with you, Craig.

Good. They should. So, Andy, one of the things we haven't talked about much, but there is actually tremendous appetite for out there is fuel cell trucks, right? Investors really want to see companies be successful in this market, given the opportunity to move away from oil, and the potential for long-term economics, even on green hydrogen to be really interesting. Can you maybe update us on what's going on in green, in the fuel cell trucks for you right now? Are there new partnerships sort of percolating up out there? What's the status with the different customers you've disclosed to-date?

So, Greg, I think that the model that we've used for Renault in Europe is one that we're looking to do quickly. And I can tell you that, a good deal of our forward-looking thinking at the moment has to do with how to express that market. I think there's a couple items we've concluded, And I think the big one is, we don't want to just be a first tier auto parts suppliers, and the JV with the structure that you're jointly selling vehicles, because we have seen what happens in the world, if you're just a part supplier to the auto industry. And I also don't know if you just go about doing it, the old way of just building cars as vehicles like the auto industry has done traditionally, that you end up in a purchasing office instead of a CEO office. We do have discussions going on in the United States and elsewhere, especially with a focus on heavy duty vehicles. One of our -- two of our big customers will actually be doing pilots with very shortly. We also have already done work with folks who are kind of two players like Bussan. I think finally, on top of that, we're, with Renault, we have a fairly aggressive plan to really start rollouts by the fourth quarter -- in the fourth quarter, early first quarter with some initial deployments. More in the light commercial vehicle space where there are apps for makes sense. When it comes to green hydrogen, I think like most people, we believe that electricity under $0.04 kilowatt hour makes green hydrogen, especially as a fuel, very competitive with great hydrogen today. And, you know, Sanjay has spent incredible amount of time thinking through how we can offer a better product and create hydrogen with green hydrogen at similar pricing and make margin for Plug Power. And I think you've been around this a long time, Craig. That's what our customers want me to pay a slight premium for green, but nobody's looking to pay a huge, huge premium to be green.

Understood. That makes a lot of sense. My next question is about the infrastructure to fuel trials, potential small fleets of fuel cell trucks. So last year, you didn't mention that Plug had done some work with its existing partners, retrofitting some of the fueling infrastructure that the church or forklift fleets, so that they could start with potentially doing fuel cell truck trials, maybe distribution centers and distribution center type work. Can you maybe update us on that? And then more importantly, Tesla makes $400 million a quarter basically in credit, and a large chunk of that 400 million comes from the installation of their supercharger network, their charging infrastructure out there under the California Incentive Programs. Can you talk about the potential to pull down some of these incentives just by building out the network for your customers? Have you already got applications in? When do you expect that to potentially be achievable?

So, if I look at that, I'm going to use two examples for you Craig. When we look at the LCFS credits in California, we look at where we believe we can come with CI scores, especially since we're looking to be moving hydrogen with green hydrogen trucks, that at the pump, we believe the credit can be up to $4 a kilogram. So for those who are listening here who don't -- we may not understand I mean that makes our costs depending how you split the green hydrogen, that almost makes the green hydrogen and probably does make it very, very less than fossil fuel diesel energy significantly. There's also bills began to circulate around Congress associated with the Biden Green Climate plan, which is suggesting up to a $2 credit per kilogram for green hydrogen. That makes the choice between green hydrogen and great hydrogen incredibly competitive. So, I think once Sanjay has his first 100 tons up that there will be a great deal of government supports and credits, and a real huge opportunity to increase the margin for Plug Power long term.

Excellent, thank you, Andy, and thanks again for taking my questions.

Thank you, Craig. Take it easy.

Thank you. Our next question today is coming from Jed Dorsheimer from Canaccord Genuity. Your line is now live.

Hey, thanks, Andy. Thanks for taking my questions.

Good morning, Jed. How are you?

I'm doing well. Thanks.

So I'm going to do a quick check here. I just want to know if my partner's back on the line with me.

Okay.

Yes, Andy. I am here. I'm so sorry. Yes, I'm here Andy. I don’t why this got out, but I am back.

Okay, all right, Jed.

All right, perfect. So, a couple questions, I guess just one, on the material handling side and this might be better served for Paul, because it kind of gets into warrants structure a little bit. But, if I look at two of your four major customers, I've actually in 20 years, I've never seen this. I mean, it's actually a fantastic situation where your customers are literally getting paid to take the product based on the kind of the warrants in 2017 because your stocks been so strong. So with the expiration of Amazon, I'm just wondering how and now only Walmart, how does that change the visibility in terms of or how do you, Paul, kind of think about the bookings when this starts to pivot away, because I'm assuming here that Walmart would also exercise, the exploration here too?

I'm going to take that question. I'm going to hand it off to Paul. So, Jed, the warrants have not, most the warrants have not been exercised. Walmart and Amazon, both have say little bit interest in the success of Plug Power financially. It's obviously -- I'm sure they wouldn't strike any basic price and they basically quite pleased with what happened. They are -- and I'm going to hand it off to Paul. But they are committed to see both companies do that hydrogen is critical for a long term to meet their long term climate goals. And that they as a partner with Plug Power that goes well beyond financials that has proven that we can deliver the products that they need and they continue to help us both of them to find new opportunities for fuel cells and green hydrogen. I can tell you one of them actually introduced me to two of their other investments in the last three weeks to help us grow and propel this business beyond just directives within. On that note Paul, I hand it up to you.

Thanks, Andy. And I guess, the main comment that I would make is that, by the fact that these are all expenses for the one customer and all reflected and reported at this point. There won't be additional charges for those in the future, and that would significantly make it easier and more simple in terms of interpretation on the results as we go forward. And I expect we've been using gross billings as a means by which to communicate, the revenue and sales activities without those charges. But I think going forward, that number should be a lot closer to the GAAP revenue number, which were make it easier as well, as we move forward.

Got it. And just to be clear, I mean, I'm not challenging their commitment. But if I just look at it, if their strike price is at 13, and to buy products, and your stock is at 50. They are being paid a significant amount of money to actually take your product. So it does change kind of the relationship a bit once that expires. I guess that was really the core of my question. I think you answer on the Walmart isn't?

And to be clear, Jed, and I'm not going to name specific customer name. They still have all those companies, a lot of warrants that have not been exercised.

Got it, Amazon as well?

Yes, Amazon as well. Amazon over the last warrants, have not been exercised.

Just Andy, just pivoting a little bit to the upstream, and I was wondering if I -- we kind of looked at the electrolyzer side of the business and, by the way, congratulations on the SK deal. I agree, I mean, looks like a fantastic deal. If you kind of look at the difference between reclamation using methane versus that of green, one of the main differences is kind of the natural companies on the methane reformation would logically be kind of a nat gas or chemical that that have experienced in the downstream, complex plumbing systems. I'm just wondering on the green side of things with the windmill companies. Is it -- are the discussion, I'm assuming the discussions but how are those companies thinking about sort of the risk profile in terms of, do you see more partnerships where pulling in, I guess, a downstream or midstream, refiner, and you see that's kind of when markets that starts to look more like driving through New Jersey, for example, without the flaring? I'm just wondering how that how that shakes out, I guess, if you will?

So, I think you're really asking an interesting question, you had about the evolution of how hydrogen will be distributed, especially hydrogen that needs to quality and standards you need for fuel cell engines. And there is a slight difference and how one goes up to about generating that hydrogen. But, initially, most hydrogen that's green will be transported in liquid form. And, much like it is today. Ultimately, you're going to see, more and more, I think we had earlier call, which was talking about storage. You're going to see more and more on-site storage with hydrogen being generated. Some of that will be in caverns for very, very long-term storage, in like natural gas is done today. And like hydrogen is done in the refining industry today. And finally, I think that maybe sooner, when you see some work going on in Europe, you're going to see that we've been already thinking about this, how to build plants close to pipelines, so that you can start injecting hydrogen directly into the natural gas pipeline. Now, initially, a few percentage and gradually increasing, so that all that's going into our thought process. Having grown up in Philadelphia and knowing what those smokestacks look like, I don't think we'll see anything like that.

One last question then back to the queue. Just as a reminder of the split of the business, if we kind of looked this year, the vast majority is still going to be material handling and selling the fuel cells and as well as the equipment to support that market. Can you just give us a reminder of the 24th guide in terms of the breakdown of the biz?

Sure. And I think it is in interesting point. Every expects somewhere in 2023, there's actually transition where the other businesses are bigger than material. And 2023 we expect that about 750 million to come from material handling between hydrogen electrolyzers, we would expect to be in the $500 million range. And the rest will be involved in a large scale stationary and on road vehicles.

[Operator Instructions] Our next question today is coming from Amit Dayal from H.C. Wainwright. Your line is now live.

So Andy, you secured pretty solid partnerships on the downstream side in terms of distribution with Brookfield, SK, Renault, et cetera. Do you need partnerships sort of on the upstream side with some of these renewable energy companies as well to just compete this value chain, if you will?

Help me with that Amit because I may not understand completely because I think it's kind of Brookfield as providing us to renewable electricity, I'm probably missing something.

Okay, so do we need others like Brookfield as well or some of those types of partnerships for you guys?

I think you'll see more of those partners. So to answer your question is there will be additional renewable partners, even here in United States. And I think you'll probably see announcements in the foreseeable future.

And then just moving on to the 4Q'20 results, maybe this could be for Paul. It looks like there could be the green $43 million to $44 million in onetime costs in the fourth quarter. And within this, you talk about some hydrogen supplier issues, if you could just provide us any color on what it says and whether these are one-time costs that are out of the way? Or is there any other one-time cost that may come into play in the next few quarters?

Sure, Amit. Yes, I think there's a number of things going on, I would say, we had a force majeure issue close to year end with one of the hydrogen producers at one of their facilities that we worked through, whenever those events happen, there's some costs that you incur to kind of navigate through it. It doesn't happen frequently. So I would agree with your comment there. Like a lot of companies, even though we've had great success, and growing the business and new platforms doing a lot of things. There are some challenges with COVID, in terms of navigating through that from the operational side. And we saw some of those events. But then the other thing that's important to note is there was a lot of strategic joint ventures and new business development activities announced in the last couple months, and obviously, we've been working extensively on that in fourth quarter to prepare for those. And some of those were announced early in January for example. So there's a lot of investment to accommodate that. So those are the big things. And yes, I would say, we obviously don't do those every quarter, and don't expect that to happen routinely.

And then, just on a margin perspective, going into '22, '23 timeframe. As for Andy's comments, if material handling is going to start becoming a smaller portion of revenues. What kind of impact on the margins should we see from this shift in revenue mix?

Paul, you want to take that.

Yes, can you hear me?

Yes.

One thing is proven is scale matters and because as Andy said, I think in the past, we're actually using a lot of the core technologies and resources that we have to go into these other markets. It's not like they're completely new business channels that take their own resources and own technologies and completely independent. So there's a lot of leverage capability and our forecasts and plans are keep moving north. So I think you're going to see your progression over the course of this year, for the full year should be in the high teens and even in the year we may be approaching 20% or north on a run rate basis. And I think you're going to see that continue on into 2022. And all these businesses will be accretive holistically as we continue to grow and scale from there.

Got it, Paul. Thank you, guys. That's what I have appreciated.

Okay. Take it easy, Amit.

Thank you.

Our next question is coming from Tristan Richardson from Truist Securities. Your line is now live.

Just a quick question on the data side. I think on the update call, you've talked about a potential data customer this year. Do you still see that as the case? And then can you talk about scale here, either with the opportunity set with this customer? Is it possible you could see a data customer elevate to the level of a pedestal customer? Or is this kind of more of early days pilot type of deployment for now?

Good question, Tristan. So, we'll be doing our first large scale stationary backup deployment with one of the largest data center customers in that and that shipments, the worst shipments happening as we speak, and that customers could be in one of our largest pedestal customers, and there are plans to how this business can rollout in 2022, 2023 and 2024. As a customer has come to the conclusion that fuel cells and hydrogen over the next few years will be very, very cost competitive with the large-scale onsite diesel generation. On top of that, you have additional value of the sustainability aspects of green hydrogen, coupled with the fact that a lot of these large data centers, new pollution is a big, big issue.

And then, just going back to the margin question, I think, talking about accelerating margins through the year kind of exiting with it to handle when instead of a team handle thinking. Is this purely a function of scale, or I think we thought of fuel supply as being margin accretive at some point on the timeline fat as a driver or the fuel supply potential is more out into '22 and beyond?

I give you my quick answer and I hand it off to Paul. It won't be until late 2022 that the hydrogen margins will significantly increase until we have our sights, bigger sites online. There will be some improvements in this year. We're expanding our own site in Tennessee. Plus, we're beginning to take over about 15 to 20 of our traditional sites with our plan in Tennessee, which will help our margins, but the real margin growth will happen out in 2023. Paul, you made for the hydrogen business. Paul, you may want to comment on that.

I think that's right, Andy. And across all the businesses, similar things that we've shared in the past, I mean, there's overhead, leverage their supply chain leverage, there's design enhancements going on. There's vertical integration, opportunities that we've made that we're starting to leverage and scale. So those things are paying dividends in all our businesses from a margin enhancement, and even see some of those themes even in our current field business as we grow and scale, but from, so we're going to get that margin appreciation or accretion largely from those core themes, but as Andy said, in terms of significant contribution from the fuel side, it will be middle '22 into '23 is that let's start to pay off.

And one just last one, if I could, I think on the update call, you mentioned, the auto industry with respect to materials handling may actually be more intensive on a unit basis, per site. Is that still the cases is I think, 500 to 700 units per site is still a good high level way to think about the opportunity. And is it the four sites is still kind of the near term potential for your foot pedestal customer?

So, I think in general, that's a pretty obviously different sites can be different sites, Tristan, but I'll give you an example our BMW facility in Spartanburg has well over 700 units. Some of them may not immediately be 700 fuel cells or there can be -- because they way order factories structured, there can be some gradual deployments in some of those facilities, but that's not a bad number to be stick with that. And I think I would add on top of that, I think there is an opportunity with the new pedestal customer that the expansion could go a lot quicker.

Your next question is coming from Moses Sutton from Barclays. Your line is now live.

In the 2024 guidance, 1.7 billion, can you break out specifically third-party hydrogen? I know you group them together with neutralizers? And how do you expect to sort of see the long-term off-take on those contracts? As you complete the plans, you'll have some rolling contracts or do you expect to have more spot price exposure?

So there's actually a reason I was a, one of the ones we think about all the time is, there's opportunities in the electrolyzer space and why put them kind of together, where we're working through whether we sell equipment or whether we sell green hydrogen. So that's why I'm a little bit hesitant to just pull it all out today. Taking one deal specifically, that could be huge and it could go either way, and could be really great off take for our green hydrogen. So that's kind of Moses, we've been trying to work these bills going both ways with people because of our capabilities. When you think about the stock price and I think I'm going to give both an input and an output side. On the input side, Sanjay has really done an incredible job in the negotiation of these contracts. To really have a mixture of how one thinks about grid power, how one thinks about rigs for renewable content, how one thinks about, any third parties that can help bridge any power gap. So we have been negotiating set price contracts on the input side. On the output side, some of our customers, i.e. the big material handling customers, it will be a set price but we also have a set price of electricity. So it's very, very well controlled. Yes, the spot market is probably a real opportunity for us to sell and have significant margin enhancement upside when we look at some of the spot pricing going on. Our main concern now is making sure we provide customers who are especially commercial customers green hydrogen, that's cost competitive with grey hydrogen cost competitive with diesel so that they accelerate the deployment of their fleets in material handling be on road vehicles, the backup power generation by using green hydrogen at a price they can.

That's very helpful. Thanks. And Paul and you both discussed margin expansion. I don't see it just EBITDA guidance or reconciliation in the investor letter. Is the metric no longer going to be provided? What would a general range look like for 21 and update on the 2024 for net for the $1.7 billion?

So I think, Paul and for '21. And Paul, I'm going to let you jump in after all, I did. I mean, we're targeting revenue and gross Billings, almost an hour equal, Moses, with the acceleration of the warrants. So, we're looking at $475 million revenue and margins in the high teens for grace margins, and expenses about 30% higher than the run rate of last year. Paul, if you could add to that.

Yes, okay.

And last one for me on Walmart tenderize. I noticed in the letter, you quote 9,500 or above 9,500 in operations. I think you've noted like 10,000, or more operational ads, as recent as last May. We're any taken out of operations? Or am I not looking at an apples-to-apples metric there?

I can tell you, I've deployed more units. So I'll say this, we're going to -- so the answer is the number of years of Walmart's increase in this year as we noted, we're actually beginning to move into other applications in their internet centers, our net distribution centers and where we have, I think, three sites already moving and more coming. So, Moses, we'll be happy to help you reconcile that. But I can tell you, we sold more units in the businesses growing.

Got it. Thanks. Okay. Great. I'll take that offline. Thanks.

Okay.

Thank you. This question is coming from Paul Coster from JP Morgan. Your line is now live.

Yes, thanks. Good morning. Thanks for taking my question.

Good morning, Paul. How are you?

I'm good. So first up, I noticed in the in the press release that you're looking to deploy $125 million of expense in New York State to build out the gigafactory, which I'm sure is very welcome there. That sounds high relative to what my prior understanding was for the cost of the gigafactory at around about 45 million, 50 million. Am I just misreading that?

I think part of that Paul and I'll let you, I think part of that expense dollar over the coming years as far as good personnel.

Should we assume that the gigafactories, CapEx only still in that $50 million range and just start to complement?

Yes, it's 50 million, right Paul.

And it seems quite fairly modest CapEx, which is great, except that it also suggests that the barriers to entry for others are fairly low. Now, obviously, there's IP and knowhow all kinds involve, but how do you respond to that thought, Andy?

It's actually a very thing you may now think about is electrical generation required for facilities. And I can tell you, first, we went into a building and selected a building because it was an old awesome switchgear factory that has incredible levels of power provided into the building that allows us to build large-scale electrolyzer systems, test all these. I think future buildings, we won't be so lucky. And I think you'll probably see costing 25%, 30% higher.

What about the argument that it's not very high barrier to entry for others whose competence in technology to get into the gigafactory business?

Well, I would step back and say that. First, you have to have customers, actually I should start by saying, Paul, first, you have to have the technology, and we have folks who have actually been working on MEA development. For over 30 years, when you look at your background, even before, I think then you have this take a step back and have people who've been developing fuel cell stacks and making enhancements for 25 years and have thought through the manufacturing process, from role-to-role processing, to stamping in place. I look at there's both the, as you mentioned, IP. There's also the issue of what I always kind of referred to as tribal knowledge, which I think people always underestimate. I think there's an issue of having the capital where with all of the make the right investments to build out the factory at the right place. I mean, when you look at the facility itself, we've been able to get incredibly low rates for electricity to support this activity. And the fourth item, I think that people often have an issue with is you got to have the demand. And I've already at Plug Power thinking about as you could see building up, the next gigafactory and to really help to build up.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to Andy for any further or closing comments.

Well, thank you, Kevin. And thank you, everyone for joining the call today. Looking forward to speaking with everyone in our first quarter update call. So thanks again and talk soon. Bye now.

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