A leader in fuel cell solutions, Plug Power (PLUG -4.63%) is expected to report its third-quarter earnings on Nov. 7. Electrifying investors' enthusiasm over the summer, the company beat analysts' revenue and earnings expectations in the second quarter, reporting sales of $58.6 million and a loss per share of $0.08.

For the third quarter, analysts are looking for the company to report slightly more on the top line while repeating its Q2 performance and booking a quarterly loss per share of $0.08. Experienced investors, however, know that checking in with how the company did in meeting analysts' expectations belies the true indication of the company's performance. Therefore, investors would be better served to keep a close eye on some other metrics and commentary. 

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A top line by any other name

In terms of the consensus among analysts, Plug Power is expected to report revenue of $60.6 million. But when it comes to the income statement, the company often places more emphasis on what it generates in terms of gross billings, defined as revenue before removing provisions for common-stock warrants. Last quarter, Plug Power reported gross billings of $58.6 million -- a 50% increase compared to the same period last year. While the company hasn't issued a specific forecast for Q3, it has guided for gross billings of $154 million to $164 million in the second half of 2019.

During an investor presentation in September, Plug Power reiterated its 2019 gross billings forecast of $235 million to $245 million. It will, therefore, be interesting to see what the company reports on Thursday and whether it remains optimistic that it will achieve its full-year forecast.

Will profitability continue swinging up?

While Plug Power has achieved success in proving the viability of its fuel cell solutions to customers, the company -- like its peers -- has failed to prove that its endeavors in the fuel cell industry can be profitable. Management, however, has suggested this may be the year when that changes, forecasting the company will report adjusted positive EBITDA for 2019. Apparently, the company is on track to meet this target. In Q2, Plug Power reported positive adjusted EBITDA of $104,000, a considerable improvement over the adjusted EBITDA of negative $13.5 million that it reported during the same period in 2018. Due to a challenging first quarter, the company reported adjusted EBITDA of negative $10.8 million, so it will need to average about (positive) $5.5 million in Q3 and Q4 to achieve its forecast. 

In terms of what lies further down the road, management foresees the company growing annual adjusted EBITDA to about $200 million in 2024. Of course, if the company fails to attain its 2019 target, it may raise doubts about the company's ability to achieve its multiyear outlook.

On the road

Although the material handling market will continue to represent the lion's share of the company's revenue now and in the foreseeable future, Plug Power has been forthcoming about its interest in expanding into the electric-vehicle (EV) market. To this end, the company had, at one time, recognized China as a viable opportunity, but that no longer seems to be the case. Instead, the company's focus is on Europe. In May, Plug Power announced a deal with StreetScooter, an EV manufacturer located in Germany. Using Plug Power's ProGen hydrogen fuel cell engines, StreetScooter will supply Deutsche Post's DHL with 100 hydrogen fuel cell-powered trucks beginning in 2020. Suggesting that this may be the beginning of a beautiful friendship, Markus Reckling, the head of German operations at DHL Express, said, "If everything works as we imagine it would, there could soon be 500 vehicles worldwide."

During the Q3 results, therefore, investors should keep an eye out for any commentary that relates to the partnership with StreetScooter, indicating that the timeline remains on track, or if there is news about any momentum related to the EV market. After all, Plug Power forecasts that the EV market will account for about 20% of the $1 billion in gross billings that it projects for 2024.

What to look for from Plug Power

While I'm interested to see if Plug Power meets expectations and reports gross billings in the vicinity of $75 million, I'm especially curious to see if the company achieves its feat of generating adjusted EBITDA of about $5 million. If successful, it will be a remarkable achievement -- perhaps even an inflection point -- for a company that has long promised that profitability was within reach. Of course, one would be remiss to not remember that this achievement would be on an adjusted basis, raising the question of when investors can expect the company to report earnings on a generally accepted accounting principles (GAAP) basis, something that is not wholly unfamiliar for peers in the renewable energy industry writ large.