Since its establishment, Plug power (NASDAQ: PLUG ) It has never changed its annual operating profit. The company is looking to build a vertically integrated green hydrogen ecosystem, but it has faced persistent negative margins and high cash burn.
Although it is constantly losing money, the company has been looking for a turnaround for ages. Investors got a glimpse of that progress in recent earnings results, and management expects more progress by the end of this year. With the stock trading below $3 per share, is now a good time to buy?
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Plug Power’s fourth quarter 2025 earnings results gave investors reason for optimism. In the quarter, the hydrogen company reported revenue of $225 million and a loss per share of $0.06, both of which exceeded analysts’ expectations. More importantly, the company achieved a positive gross profit of $5.5 million, translating into a gross margin of 2.4%. This was a huge improvement from last year’s fourth quarter, when it had a gross margin the negative 122%
This gross margin improvement was driven by ‘Project Quantum Leap’, the company’s initiative to improve margins and cash flow by streamlining its operations. Last year, it launched a restructuring plan that included strategic workforce reductions and price increases in some product offerings. It has also prioritized some hydrogen infrastructure and new product investments.
PLUG Cash from Operations (TTM) data by YCharts
In addition, it reduced hydrogen production costs and expanded its fuel network using its vertically integrated hydrogen platform, scaling up internally owned plants in Georgia, Tennessee, and Louisiana. Together, the three plants can produce up to 40 tons of liquid hydrogen per day and help the company eliminate the need for intermediary suppliers, which has contributed to its high cash burn.
Management estimates that Project Quantum Leap could generate $150 million to $200 million in annual cost savings and is optimistic that the company can achieve positive earnings before interest, taxes, depreciation, and amortization — or EBITDA — in the fourth quarter of this year.
Another positive development for investors was the revised licensing agreement with PlugPower Walmart. Under the new agreement, PlugPower agreed to grant Walmart “a limited, limited-use license to access and use materials related to certain escrowed GenKey systems.” In return, Walmart agreed to forfeit its issued warrants and cancel any remaining unvested shares, eliminating potential future dividend dilution of 42 million shares of Plug Power stock.
