Hyliion Holdings Corp. (HYLN)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $0.50M from R&D services, gross margin ~breakeven ($0.01M gross profit), and net loss widened to $17.3M; diluted EPS was $(0.10) .
• Guidance: revenue maintained at $10–$15M for FY2025; cash outlays raised to ~$65M (from ~$60M), year-end cash guided to ~$155M; capex expected “closer to $30M” vs prior $25M, with tariff headwinds of $2–$3M highlighted .
• Commercialization cadence: Early Adopter deliveries remain targeted at 10 units in 2025 with commercialization late-2025; some deployments shifted to 2H due to linear electric motor and depowdering remediation while reliability of the Navy unit was emphasized .
• Customer traction catalysts: >100 KARNO units under LOIs; Mesa LOI (200 kW with expansion options), USAF/DOD CDAO selection; Saudi MOU indicating a potential $1B opportunity; public unveiling at ACT Expo broadened pipeline visibility .
• Balance sheet remains robust with $198.8M cash and investments at quarter-end; Hyliion reiterated expectation that current capital suffices through commercialization .

What Went Well and What Went Wrong

What Went Well

• Strong pipeline and visibility: >100 KARNO units under non-binding LOIs spanning data centers, EV charging, military, waste gas and industrial sectors .
• Reliability progress: First Navy Early Adopter unit ran with “no unplanned downtime” in planned operation testing since March; management emphasized consistent reliability and software improvements .
• Strategic wins and validation: USAF/DOD CDAO “Awardable” selection for multi-fuel resilience; Mesa LOI (demo + 200kW, options to 2.4MW); Saudi MOU with Alkhorayef indicating a potential $1B opportunity .
• Management confidence quote: “Customer interest continues to remain strong… and we remain on track to commercialize the KARNO Power Module by year-end” — Thomas Healy .

What Went Wrong

• Deployment delays: Early Adopter shipments shifted later due to linear electric motor (LEM) contract manufacturing ramp and depowdering issues; in-house LEM production being resumed to supplement capacity .
• Higher cash burn outlook: Total FY2025 cash outlays raised to ~$65M (from ~$60M) due to tariffs on EU-assembled additive printers ($2–$3M impact), higher R&D, and opportunistic printer purchases; capex now expected closer to $30M vs $25M prior .
• Revenue softness vs prior quarter: Q1 R&D revenue of $0.49–$0.50M was below Q4’s $1.5M given postponed deployments; net loss increased YoY to $17.3M .

Financial Results

Notes: Gross margin % values are computed directly from reported revenue and gross profit (citations indicate source lines).

Revenue breakdown

Balance sheet and cash KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We’re excited to share… we unveiled our KARNO Power Module… and we remain on track to commercialize… by year-end.” — Thomas Healy .
• “We now expect total cash outlays… closer to $65 million… [tariffs]… R&D expenses running somewhat higher… capex could be closer to $30 million.” — Jon Panzer .
• “Overall, we are very encouraged by [the Navy unit’s] performance and reliability… no unplanned downtime.” — Thomas Healy .
• “We now have well over 100 units under nonbinding LOIs… across data centers, EV charging, waste gas, industrial and military.” — Thomas Healy .

Q&A Highlights

• Reliability and testing cadence: Healy detailed daily operation of the Navy unit with consistent reliability and ongoing software improvements; no teardown/rebuild required to date .
• Schedule impact and mitigation: Delays largely from LEM manufacturing; Hyliion adding in-house assembly to supplement contractor and incorporating regen improvements; commercialization still targeted for late 2025 and scale-up not expected to be impacted in 2026 .
• Cost drivers and tariffs: CFO quantified EU tariff impact of $2–$3M on GE additive printers and raised capex outlook to ~$30M, offset partially by ~$10M equipment financing .
• Competitive positioning vs fuel cells and engines: Pricing targeted between natural gas engines ($1,000–$1,500/kW) and fuel cells ($3,000–$3,500/kW), with expected advantages in efficiency, maintenance, and energy density for data centers .
• Services/maintenance model: Near-term Hyliion to maintain units; long-term aim to partner or have customers take maintenance responsibilities .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2025 revenue and EPS was unavailable; therefore, no beat/miss assessment can be made for the quarter. S&P Global consensus for the next reported quarters also returned no values (consensus not available).*

*Values retrieved from S&P Global.

Key Takeaways for Investors

• Commercialization remains targeted for late-2025, with 10 Early Adopter units in 2025 and broader deployments in 2H as LEM and depowdering constraints are resolved .
• Pipeline credibility improved: >100 units under LOIs, USAF/DOD CDAO selection, Mesa LOI, and Saudi MOU signal growing multi-vertical demand and potential international scale .
• Cost outlook tightened: FY2025 cash outlays raised to ~$65M, capex closer to $30M, with tariffs and accelerated R&D driving higher spend; monitor cash trajectory vs guided year-end ~$155M .
• Reliability a differentiator: Navy unit operating without unplanned downtime supports commercialization confidence; continued software and design upgrades should enhance performance .
• Data center thesis intact: Positioning vs fuel cells on cost, footprint, energy density, and maintenance underpins multi-MW opportunity; watch for additional definitive agreements .
• Near-term revenue cadence: Q1 R&D services revenue was $0.49–$0.50M (below Q4’s $1.5M) due to deployment timing; management expects higher R&D revenue in later quarters as deployments resume .
• Actionable: Stock narrative likely moves on concrete milestones—resumption of deployments, in-house LEM ramp, definitive customer contracts converting LOIs, and sustained reliability metrics; tariff/cost updates are key risk markers .