PLUG POWER INC Fair Value Disclosure
8. Fair Value Measurements
The Company records the fair value of assets and liabilities in accordance with ASC 820. Refer to Note 2, “Summary of Significant Account Policies,” for further information.
There were no transfers between Level 1, Level 2, or Level 3 for the year ended December 31, 2025. Financial instruments not recorded at fair value on a recurring basis include equity method investments that have not been remeasured or impaired in the current period, such as our investments in AccionaPlug S.L. and Clean H2 Infra Fund. For the one equity method investment that was measured at fair value on a nonrecurring basis, refer to Note 7, “Investments,” for further information.
The following table summarizes the carrying amount and estimated fair value of the Company’s financial instruments at December 31, 2025 and 2024 (in thousands):
As of December 31, 2025 | |||||||||||||||
Carrying | Fair | Fair Value Measurements | |||||||||||||
| Amount | | Value | | Level 1 | | Level 2 | | Level 3 | ||||||
Liabilities | |||||||||||||||
$7.75 Warrants | $ | 52,323 | $ | 52,323 | $ | — | $ | — | $ | 52,323 | |||||
6.75% Convertible Senior Notes | 431,014 | 431,014 | 431,014 | — | — | ||||||||||
Contingent consideration | 11,777 | 11,777 | 4,353 | — | 7,424 | ||||||||||
As of December 31, 2024 | |||||||||||||||
Carrying | Fair | Fair Value Measurements | |||||||||||||
| Amount | | Value | | Level 1 | | Level 2 | | Level 3 | ||||||
Liabilities | |||||||||||||||
6.00% Convertible Debenture | $ | 173,150 | $ | 173,150 | $ | — | $ | — | $ | 173,150 | |||||
Contingent consideration | 60,746 | 60,746 | — | — | 60,746 | ||||||||||
The liabilities measured at fair value on a recurring basis that are based on quoted prices for identical liabilities and are therefore categorized as Level 1 are the 6.75% Convertible Senior Notes and a portion of contingent consideration. The liabilities measured at fair value on a recurring basis that have unobservable inputs and are therefore categorized as Level 3 are related to the $7.75 Warrants, a portion of contingent consideration and the 6.00% Convertible Debenture.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
$7.75 Warrants
The fair value of the $7.75 Warrants as of December 31, 2025 was comprised of a single financial liability under ASC 825, Financial Instruments (“ASC 825”), with changes in fair value recorded in gain/loss from changes in fair value of warrant liabilities recorded in the consolidated statements of operations.
The Company estimated and recorded the fair value of the $7.75 Warrants upon its issuance date of November 21, 2025 and as of December 31, 2025 based on a Black-Scholes Option Pricing Model. The valuations utilized significant Level 3 unobservable inputs, including volatility. Other significant assumptions include risk-free rate, exercise price, the Company’s common stock price and maturity date. Significant judgment is required in selecting the significant inputs and assumptions. Actual assumptions may differ from our current estimates and such differences could materially impact the fair value of the $7.75 Warrants.
Refer to Note 12, “Warrant Liabilities,” for the significant assumptions utilized in the fair value of the $7.75 Warrants at issuance and as of December 31, 2025, respectively, as well as the change in the carrying amount of the $7.75 Warrants for the year ended December 31, 2025.
6.75% Convertible Senior Notes
The fair value of the 6.75% Convertible Senior Notes as of December 31, 2025 was comprised of a single financial liability in which the Company elected the fair value option under ASC 825, with changes in fair value recorded in gain/loss from change in fair value of convertible debt instruments and debt within in the consolidated statements of operations. The
Company elected the fair value option due to its multiple conversions features required to be presented at fair value. The Company has also elected to present interest expense separately from the change in fair value of convertible debt instruments and debt measured at fair value through earnings. Total changes in the fair value of the liability that resulted from a change in the instrument-specific credit risk are separately recorded in other comprehensive income. There was no change in the instrument-specific credit risk during the year ended December 31, 2025.
The Company recorded the fair value of the 6.75% Convertible Senior Notes upon its issuance date of November 21, 2025 at its cash value. The fair value of the 6.75% Convertible Notes as of December 31, 2025 utilized Level 1 inputs as it was based on the average par value of 99.9% for trades of the 6.75% Convertible Senior Notes made on December 30, 2025.
Refer to Note 13, “Convertible Senior Notes,” for the change in the carrying amount of the 6.75% Convertible Senior Notes for the year ended December 31, 2025.
Contingent consideration
The fair value of contingent consideration as of December 31, 2025 and 2024 was related to the Joule Processing LLC (“Joule”) acquisition in 2022 and the Frames Holding B.V. (“Frames”) acquisition in 2021.
In connection with the Joule acquisition, the Company initially recorded on its consolidated balance sheets a liability of $41.7 million representing the fair value of contingent consideration payable. The fair value of this contingent consideration was $9.4 million and $48.2 million as of December 31, 2025 and 2024, respectively. The decrease compared to the year ended December 31, 2024 was primarily due to a decrease of $21.2 million recorded in change in fair value of contingent consideration in the consolidated statements of operations during the year ended December 31, 2025. In addition, payments were made that reduced the fair value of the liability by $17.6 million during the year ended December 31, 2025. During 2025, the Company reached an agreement with Joule’s sellers to partially settle the outstanding balance of the contingent consideration. In accordance with the agreement, $2.0 million of the remaining $9.4 million contingent consideration liability as of December 31, 2025 will be paid during the first quarter of 2026 and is classified as a Level 1 measurement.
In connection with the Frames acquisition, the Company recorded on its consolidated balance sheets a liability of $29.1 million representing the fair value of contingent consideration payable. The fair value of this contingent consideration was $2.4 million and $12.5 million as of December 31, 2025 and 2024, respectively. During 2025, the Company entered into an agreement with Frames’ sellers to finalize the outstanding balance of the contingent consideration. The decrease compared to the year ended December 31, 2024 was primarily due to payments that reduced the fair value of the liability by $9.4 million. In addition, a decrease of $2.3 million was recorded in change in fair value of contingent consideration in the consolidated statements of operations for the year ended December 31, 2025. Partially offsetting these decreases, the fair value of the liability increased by $1.5 million during the year ended December 31, 2025 due to foreign currency translation losses. In accordance with the agreement, the remaining $2.4 million contingent consideration liability as of December 31, 2025 will be fully paid during the first quarter of 2026 and is classified as a Level 1 measurement.
In the consolidated balance sheets, contingent consideration was recorded in the contingent consideration, loss accrual for service contracts, and other liabilities financial statement line item, and was comprised of the following Level 3 unobservable inputs for the year ended December 31, 2025:
Financial Instrument | Fair Value | Valuation Technique | | Unobservable Input | | Weighted Average | |||
Contingent consideration | $ | 7,424 | Scenario-based method | Credit spread | 11.77% | ||||
Discount rate | 15.44% - 15.45% | ||||||||
7,424 | |||||||||
In the consolidated balance sheets, contingent consideration was recorded in the contingent consideration, loss accrual for service contracts, and other liabilities financial statement line item, and was comprised of the following unobservable inputs for the year ended December 31, 2024:
Financial Instrument | | Fair Value | | Valuation Technique | | Unobservable Input | | Weighted Average | |
Contingent consideration | $ | 60,746 | Scenario-based method | Credit spread | 11.83% | ||||
Discount rate | 15.91% - 16.00% | ||||||||
60,746 | |||||||||
The change in the carrying amount of contingent consideration for the year ended December 31, 2025 was as follows (in thousands):
Beginning balance as of December 31, 2024 | $ | 60,746 | |
Cash payments | (27,005) | ||
Change in fair value of contingent consideration | (23,486) | ||
Foreign currency translation adjustment |
| 1,522 | |
Ending balance as of December 31, 2025 | $ | 11,777 |
15.00% Secured Debenture
The fair value of the 15.00% Secured Debenture was comprised of a financial liability for the initial tranche of $190.4 million and a financial liability for the second tranche of $51.2 million in which the Company elected the fair value option for both tranches under ASC 825 with changes in fair value recorded in change in fair value of debt in the consolidated statements of operations.
The Company estimated and recorded the fair value of the initial tranche of the 15.00% Secured Debenture upon its issuance date of May 5, 2025. The Company estimated and recorded the fair value of the second tranche of the 15.00% Secured Debenture upon its issuance date of September 30, 2025. The fair values of the initial and second tranches of the 15.00% Secured Debenture 2025 were based on a Probability-Weighted Expected Return Method (“PWERM”). The PWERM includes the Discounted Cash Flow (“DCF”) method corresponding to the relevant amortization schedule in each scenario and a Black-Scholes Option Pricing Model was utilized to estimate the fair value of the 15.00% Secured Debenture Warrant. Additionally, based on the fair values of the initial and second tranches of the 15.00% Secured Debenture and the purchase price of the initial and second tranches, we estimated the implied yield at the valuation date. The valuations utilized significant Level 3 unobservable inputs, including implied yield, volatility, and risky discount rate. Other significant assumptions include risk-free rate, principal value, the Company’s common stock price and maturity date.
The 15.00% Secured Debenture was fully repaid during the fourth quarter of 2025 with a portion of the net proceeds from the issuance of the 6.75% Convertible Senior Notes. Refer to Note 14, “Long-Term Debt,” for the change in the carrying amount of the 15.00% Secured Debenture during the year ended December 31, 2025.
6.00% Convertible Debenture
The fair value of the 6.00% Convertible Debenture as of December 31, 2024 was comprised of a single financial liability in which the Company elected the fair value option under ASC 825, with changes in fair value recorded in gain/loss from changes in fair value of 6.00% Convertible Debenture recorded in the consolidated statements of operations.
The fair value of the 6.00% Convertible Debenture was based on a Monte Carlo simulation of stock price of the Company on a daily basis and a discounted cash flow model that incorporates the amortization schedule, contingent on the daily simulated stock price. The valuation utilized significant Level 3 unobservable inputs, including implied yield, volatility, and risky discount rate. Other significant assumptions include risk-free rate, principal value, the Company’s common stock price, maturity date and the various conversion features and prices per the agreement.
The 6.00% Convertible Debenture was fully repaid during the second quarter of 2025 with the net proceeds from the initial tranche of the 15.00% Secured Debenture. Refer to Note 13, “Convertible Senior Notes,” for the change in the carrying amount of the 6.00% Convertible Debenture for the year ended December 31, 2025.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject long-lived assets and finite-lived intangible assets to non-recurring fair value measurements. During the year ended December 31, 2025, property, plant and equipment, intangible assets, right of use assets related to finance leases, net and right of use assets related to operating leases, net were written down to their estimated fair values. The inputs to these models are considered to be Level 3 significant unobservable inputs.
The Level 3 significant unobservable inputs that were used in the valuation of the long-lived assets during 2025 were:
Financial Instrument | | Valuation Technique | | Unobservable Input | | Weighted Average |
Property, plant and equipment, net | Cost approach | Residual value | 0.0% - 20.0% | |||
Market approach | Sales probability | 50.0% | ||||
Discount rate | 21.5% | |||||
Equipment related to power purchase agreements and fuel delivered to customers, net | Cost approach | Residual value | 10.0% - 20.0% | |||
Income approach (DCF method) | Discount rate | 9.6% | ||||
Intangibles assets, net | Relief from royalty method | Royalty rate | 2.0% - 3.0% | |||
Discount rate | 19.5% - 22.5% | |||||
Obsolescence factor | 6.7% | |||||
Multi-period excess earnings method | Discount rate | 19.5% | ||||
Right of use assets related to finance leases, net | Cost approach | Residual value | 10.0% - 20.0% | |||
Income approach (DCF method) | Discount rate | 9.6% | ||||
Right of use assets related to operating leases, net | Cost approach | Residual value | 10.0% - 20.0% | |||
Income approach (DCF method) | Discount rate | 9.6% |
Refer to Note 21, “Impairment,” for further information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2019 | Mar 10, 2020 | |
| 2018 | Mar 13, 2019 | |
| 2017 | Mar 12, 2018 | |
| 2016 | Mar 10, 2017 | |
| 2015 | Mar 15, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.