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Heliogen, Inc. (HLGN)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $1.53M, net loss was $(15.23)M, and diluted EPS was $(2.53); Adjusted EBITDA improved to $(14.94)M from $(23.85)M in Q4 2023 .
  • Liquidity declined to $60.7M (cash $58.2M, investments $2.5M) from $75.1M in Q4, and management disclosed substantial doubt about going concern absent additional funding; no debt outstanding .
  • Contracted revenue backlog was $76.2M; the opportunity pipeline was 1.9GW; West Texas steam plant remained on-track for mechanical completion by year-end 2024 .
  • Company withdrew its NYSE delisting appeal in April; shares trade OTCQX; stockholder rights plan extended to April 17, 2025—potential governance/takeover dynamics .
  • Wall Street consensus via S&P Global was unavailable (vendor mapping error), so beat/miss vs estimates cannot be assessed this quarter.

What Went Well and What Went Wrong

  • What Went Well

    • Executed on first commercial-scale West Texas steam plant milestones; management reiterated on-track mechanical completion by year-end 2024 .
    • Backlog held at $76.2M with added $1.8M DOE award for solar thermal calciner; validates industrial decarbonization demand and multi-product mix .
    • Q1 Adjusted EBITDA improved sequentially (Q4: $(23.85)M → Q1: $(14.94)M), reflecting cost actions and operating discipline .
    • CEO tone: “strong progress on our first commercial-scale project… highest priority remains securing additional commercial-scale contracts” .

  • What Went Wrong

    • Liquidity fell to $60.7M and management disclosed substantial doubt about going concern without added capital; operating cash outflow was $(14.3)M in Q1 .
    • Revenue decreased year over year (Q1’24: $1.53M vs Q1’23: $1.94M) as grant revenue fell and project revenue recognition moderated .
    • SG&A remained elevated at $12.39M despite prior cost reductions (benefit of 1Q23 one-time stock comp reversal inflates YoY comparison), limiting operating leverage .
    • Capella program cost inflation (disclosed in Q4) drove large Q4 loss and contract loss provisions, necessitating value engineering and external funding solutions for forward viability .

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD Millions)$2.273 $(1.159) $1.528
Gross Profit ($USD Millions)$0.414 $(55.444) $0.051
Operating Loss ($USD Millions)$(19.745) $(81.711) $(16.127)
Net Loss ($USD Millions)$(18.570) $(78.801) $(15.225)
Diluted EPS ($USD)$(3.13) $(13.15) $(2.53)
Adjusted EBITDA ($USD Millions)N/A$(23.854) $(14.942)

Revenue breakdown

Revenue Breakdown ($USD Millions)Q3 2023Q4 2023Q1 2024
Services Revenue$1.096 N/A (not disclosed in Q4 press release) $0.954
Grant Revenue$1.177 N/A (not disclosed in Q4 press release) $0.574
Total Revenue$2.273 $(1.159) $1.528

Balance sheet and KPIs

KPIQ3 2023Q4 2023Q1 2024
Cash & Equivalents ($USD Millions)$63.386 $62.715 $58.235
Investments ($USD Millions)$28.236 $12.386 $2.491
Liquidity (Cash + Investments) ($USD Millions)$91.6 $75.1 $60.7
Contract Liabilities ($USD Millions)$13.170 $17.008 $18.247
Contract Loss Provisions ($USD Millions)$26.648 $75.340 $74.516
Contracted Revenue Backlog ($USD Millions)$73.0 $76.0 $76.2
Opportunity Pipeline (GW)1.8 2.0 1.9
DebtNo substantial debt No debt No debt

Estimate comparison (S&P Global consensus unavailable)

MetricQ1 2024 ActualQ1 2024 ConsensusSurprise
Revenue ($USD Millions)$1.528 N/A (S&P Global unavailable)N/A
Diluted EPS ($USD)$(2.53) N/A (S&P Global unavailable)N/A

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
West Texas steam plant mechanical completionFY 2024On-track for mechanical completion by year-end 2024 Remains on-track by year-end 2024 Maintained
Liquidity runwayThrough 2025“Sufficient liquidity to execute our plans into March 2025” (as of 12/31/23) Substantial doubt about going concern; existing liquidity sufficient through end of 2024 absent new funding Lowered
Strategic alternatives review2024Initiated comprehensive review to enhance value Ongoing; engaged third-party financial advisor Maintained
Listing status (NYSE/OTC)2024Trading OTC; previously appealed NYSE delisting Withdrew NYSE appeal; expects formal delisting; continues OTCQX Revised
Stockholder rights plan2024–2025Rights plan expiring April 17, 2024 Extended to April 17, 2025; exercise price adjusted to $26.40 Extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
AI/technology initiativesEmphasized AI-enhanced heliostat control and Gen 4/5 roadmap Closed-loop software validated at Sandia on third-party heliostats; licensing potential Continued execution noted; focus on differentiated solar energy technology Positive validation; moving toward commercialization/licensing
Capella project (Gen 3 CSP)FEED progress and demo milestones; DOE collaboration Cost estimate increased by ~$53M; value engineering and external funding pursued No new quantitative update; Capella referenced as part of backlog and DOE award context Cost pressure; mitigation efforts ongoing
Commercial pipeline and developer partnershipsPipeline grew to 1.8GW; pre-FID 65MW Omanor JDA in Mexico; pipeline >2.0GW; engineering contracts targeted Pipeline 1.9GW; backlog $76.2M; priority to secure additional commercial-scale contracts Active pursuit; slight pipeline pullback QoQ
Regional trends (Mexico)Identified initial geographies (U.S., Chile, Australia, Mexico) Omanor JDA; initial 50–100MW concept and offtaker discussions No incremental geographic detail disclosed Building beachhead via JDA
Funding/strategic alternativesLiquidity adequate for 12 months (as of Q3) Cost reduction plan; strategic review to add growth capital Substantial doubt on going concern; advisor engaged; multiple capital avenues explored Funding need more urgent
Listing/governanceNYSE suspension; OTC trading commenced OTC trading; appeal status noted Withdrew appeal; expects NYSE delisting; rights plan extended Formal delisting; defenses extended

Management Commentary

  • “Our team has made strong progress on our first commercial-scale project in west Texas… Our highest priority remains securing additional commercial-scale contracts” — CEO Christie Obiaya (Q1 press release) .
  • “We believe we have sufficient liquidity to execute our plans into March 2025… proactively engaged a financial advisor to assist us in reviewing strategic alternatives” — CEO (Q4 press release) .
  • On Capella cost increase and mitigation: pursuing value engineering (reduced scope, materials) and third-party funding to close ~$53M gap; “we do not intend for Heliogen to absorb that future cash loss” — CEO (Q4 call) .
  • Sandia validation: “advanced control system… significantly improve[s] pointing accuracy… confirmed to work on third-party hardware,” supporting licensing potential — CEO (Q4 call) .

Q&A Highlights

  • Capella overrun drivers and implications: inflation and first-of-kind development costs drove ~$53M increase; not expected to affect hybrid CSP-PV pipeline projects; mitigation via value engineering and external funding underway .
  • Software licensing opportunity: brownfield and greenfield CSP sites represent near-term licensing revenue; third-party validation expands addressable base (over ~8GW CSP installed ex-China focus) .
  • Mexico JDA details: Omanor provided concrete site ideas; early offtaker and authority engagements targeting initial 50–100MW project; incremental to published pipeline at the time .
  • Government funding: actively pursuing federal/state clean energy funding aligned with Gen 3 CSP and industrial heat (e.g., calcination DOE grants) .

Estimates Context

  • S&P Global consensus for Q1 2024 EPS and revenue was unavailable due to missing CIQ mapping for HLGN in the vendor dataset; as a result, we cannot quantify beats/misses relative to Wall Street estimates this quarter.

Key Takeaways for Investors

  • Sequential improvement in Adjusted EBITDA (Q4 → Q1) and maintenance of a ~$76M backlog demonstrate operational progress, but revenue remains modest and lumpy given project timing .
  • Liquidity is declining, and management disclosed substantial doubt about going concern absent new capital; near-term catalysts are funding actions and progress on strategic alternatives .
  • The West Texas steam plant remains a tangible milestone (mechanical completion targeted year-end 2024) that can provide operational data to support performance guarantees and commercial traction .
  • Capella’s cost inflation and large Q4 loss highlight execution and funding risks for first-of-kind Gen 3 CSP; mitigation includes value engineering and external funding, but outcome timing remains a swing factor .
  • Sandia validation of Heliogen’s control software on third-party heliostats opens a nearer-term licensing pathway independent of large EPC scopes, potentially diversifying revenue sources .
  • Governance and listing changes (NYSE delisting withdrawal, OTCQX, rights plan extension) may influence investor base, capital access, and takeover dynamics; monitor for any corporate actions .
  • Trading implications: stock likely sensitive to funding announcements, contract wins (especially engineering/design and performance guarantees), and demonstrable milestones at West Texas/Capella; absence of consensus estimates reduces typical beat/miss volatility anchors this quarter .