Shares of Plug Power (PLUG) tumbled 5.45% in pre-market trading on Friday, as investors reacted to the company's recently released second-quarter results, which highlighted persistent financial challenges. The hydrogen fuel cell manufacturer continues to grapple with negative gross margins and substantial cash burn, raising concerns about its long-term viability.

The Q2 report revealed that while Plug Power's revenue increased by 21% to $174 million, the company's gross margins remained deeply negative at -31%. Although this represents an improvement from the -92% gross margin reported a year ago, it underscores the ongoing struggle to achieve profitability. The company's cash position is also becoming increasingly precarious, with only $140.7 million in unrestricted cash remaining at the end of the quarter and a negative free cash flow of $230.4 million for Q2 alone.

Despite these challenges, Plug Power maintains its revenue forecast of around $700 million for the year and projects reaching gross margin neutrality by the fourth quarter. The company's outlook is somewhat buoyed by recent U.S. budget reconciliation legislation, which provides support for the hydrogen industry through production and investment tax credits. This legislative backing could potentially help Plug Power secure a partner for its planned Texas hydrogen plant and improve its long-term prospects. However, with its current financial trajectory, the company faces significant hurdles in the near term, and the stock remains a high-risk investment.