Plug Power’s Margin Rebound and Fleet Renewal Cycle Bolster Turnaround, but Cash Burn Lingers

Plug Power’s first-quarter results landed well ahead of analyst estimates, offering a rare moment of optimism for a company that has struggled to turn a profit. Revenue rose 22% year over year to $163.5 million, beating the roughly $140 million consensus. Behind the top-line growth, the underlying numbers tell a story of structural improvements: the gross margin swung hard, landing at negative 13% — a dramatic tightening from previous quarters. That gain came from cheaper hydrogen sourcing, better network efficiency, and a new third-party gas contract that widened margins in the fuel business by more than 50 percentage points.

The material-handling division — the core business of supplying fuel cells for forklifts and warehouses — posted a 15% revenue increase. Service costs per unit fell by over 30%, a sign that the equipment already in the field is becoming cheaper to maintain. That operational leverage is critical as Plug Power prepares for a multi-year renewal wave with its largest customer, Amazon. The first Amazon site was installed in 2016, and starting in late 2026 the company expects to refurbish roughly 10 to 12 sites annually, representing about 20,000 units over several years. Walmart is also planning upgrades, and new projects with BMW, Stellantis, and cable manufacturer Southwire are in the pipeline.

Beyond the established material-handling base, Plug Power is scaling its electrolyzer business. In Spain, a 25-megawatt project with Iberdrola is under way, and in Portugal a 100-megawatt venture with GALP is moving forward. The company puts its total project pipeline at roughly $8 billion. The January reintroduction of the U.S. investment tax credit for hydrogen has further improved the economics for potential customers, adding a tailwind that could accelerate order conversions.

Should investors sell immediately? Or is it worth buying Plug Power?

None of this growth comes cheap. The company reported a net loss of $245.3 million for the quarter, inflated by a $140 million accounting charge tied to the stock’s rally. Stripping out that non-cash item, the adjusted loss per share came to just $0.08 — better than many on the Street had feared. Still, operating cash burn hit roughly $150 million in the period, and the cumulative deficit now stands at $8.2 billion.

To bridge the gap to profitability, management is leaning on asset sales and tax-credit monetizations. A deal with Stream Data Centers is expected to bring in $142 million in June. Separately, the sale of investment tax credits tied to the St. Gabriel project should yield another $39.2 million by the end of May. Together with existing cash, these infusions should cover operating needs for the rest of 2026 — assuming no delays in the release of restricted funds or in closing the tax-credit transactions.

The market has rewarded the restructuring narrative. Plug Power shares have gained about 78% since January, closing Wednesday up 11% on the day after the earnings release. The stock now trades at roughly €3.39 (or the equivalent in dollars), well above its 200-day moving average. Analysts at B. Riley and Craig-Hallum lifted their price targets to $5, reflecting cautious confidence that the turnaround is on track.

CEO Jose Luis Crespo continues to target positive EBITDAS by the fourth quarter of 2026. Success depends on whether the margin improvements persist, the fleet renewal wave materializes on schedule, and the company can execute its cash-raising plan without stumbling. The next major checkpoints will come with the half-year results, when investors will see if the momentum from the first quarter can be sustained.

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