Plug Power Raises Revenue Guidance After Mixed Q3, Announces Frames Acquisition

Plug Power, Inc. PLUG shares are slipping following the release of its quarterly results.

Plug Power's Q3 Metrics: Plug Power reported a loss of 19 cents per share, wider than the year-ago loss of 18 cents per share.

Third-quarter net revenues increased from $107.048 million in 2020 to $143.922 million in 2021, representing a 34% year-over-year increase. The revenues were in line with the consensus estimate of $143.93 million.

Plug Power said it shipped 4,559 GenDrive units and had revenue associated with 16 hydrogen infrastructure systems, compared to 3,709 GenDrive units and 13 hydrogen infrastructure systems in the third quarter of 2020.

The company also raised its revenue guidance for 2022 to $900 million to $925 million, citing acquisitions and commercial traction. Analysts, on average, estimate revenue of $811.17 million.

The company sees improvement in service margin run rates materializing in 2022. It expects margin trends of its fuel business to improve in 2022, with a breakeven margin by 2023 as its green hydrogen plants come on line in the second half of 2022. By 2024, the fuel business' margin will likely improve to be in line with the overall corporate target of more than 30% gross margin.

Plug Power, however, expects margins to remain under pressure until the end of the year, largely impacted by increases in natural gas prices.

Related Link: Why This Plug Power Analyst Turned Bullish Ahead Of Investor Day

Deepens European Expansion With Frames Buy: Separately, Plug Power announced a definitive agreement to acquire Netherlands-based Frames Group, which builds processing equipment, separation technologies, flow control and safeguarding systems, for water and renewable energy solutions, for 85 million euros ($98.54 million) in cash and 30 million in earnouts.

Frames has about 300 employees located largely in Europe and India.

The Frames acquisition will support Plug Power's goal to reach an installed electrolyzer capacity of three gigawatts by 2025.

With Frames' long-standing roots in Europe, supported by an extensive European customer base, supply chain and manufacturing capabilities, Plug Power expects to build out and deepen its European presence. The company will now have 200 employees in Europe. It also expects to open its new European headquarters in North Rhine-Westphalia, Germany, in early 2022.

Plug Power shares were down 2.8% at $39.55 in after-hours trading.