Sign in

You're signed outSign in or to get full access.

HH

Hyliion Holdings Corp. (HYLN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 results reflected early-stage R&D revenue and disciplined cash management while Hyliion pushed commercial launch of KARNO to 2026; revenue was $1.5M from R&D services, gross profit $0.13M, net loss $13.4M, and diluted EPS of $(0.08) .
  • Management lowered FY25 revenue guidance to $5–10M (from $10–15M) due to the commercialization shift, but maintained year-end cash/investments outlook ($155M) and total FY25 cash outlays ($65M); capex remains ~ $30M with $2–3M tariff impact embedded .
  • Operationally, Hyliion brought LEM production in-house, resolved depowdering for complex parts, and delivered a second U.S. Navy Early Adopter unit; 10 Early Adopter units are still expected in 2025, with one module designated for UL certification .
  • A new 30% ITC under the OBBBA for linear generators beginning construction in 2026 is a structural tailwind for adoption (data centers, C&I), while a $1B Saudi MOU and a Navy Phase II SBIR underscore strategic traction; both are pre-revenue and subject to definitive agreements .

What Went Well and What Went Wrong

  • What Went Well

    • Tax policy tailwind: 30% Investment Tax Credit under the OBBBA for linear generators beginning construction in 2026; management: “The 30% investment tax credit will incentivize more rapid adoption of fuel‑flexible, clean, and efficient KARNO generators” — Thomas Healy, CEO .
    • Manufacturing/engineering progress: Brought LEM production fully in-house; resolved depowdering challenges and redesigned the regen component to restore expected performance; nearing UL certification for a unit .
    • Commercial traction catalysts: $1B non‑binding MOU with Alkhorayef for Saudi deployments (targeting 2026) and a U.S. Navy Phase II SBIR (~$1.5M) to advance multi‑megawatt systems; Air Force designated KARNO an “awardable technology” .

  • What Went Wrong

    • Commercialization delay: Launch moved to 2026 (from late 2025), prompting a cut in FY25 revenue guidance to $5–10M from $10–15M; creates near‑term revenue/multiple compression risk .
    • Elevated OpEx and wider loss YoY: Q2 OpEx rose to $15.8M (vs $14.0M), net loss to $13.4M (vs $10.9M), driven by higher R&D for KARNO development and additive printing .
    • Tariff/capex headwinds: FY25 total cash outlays ~ $65M (higher vs initial plans) due to tariffs (+$2–3M), R&D acceleration, and additive capacity expansion; capex around $30M .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($M)— $0.49 $1.52
Gross Profit ($M)— $0.01 $0.13
Operating Expenses ($M)$14.02 $19.73 $15.75
Net Loss ($M)$(10.86) $(17.25) $(13.41)
Diluted EPS ($)$(0.06) $(0.10) $(0.08)
Interest Income ($M)$3.13 $2.47 $2.21

KPIs and cash

KPIQ2 2024Q1 2025Q2 2025
Cash & Investments (end of period) ($M)N/A$198.8 $185.3
Cash Use (quarter) ($M)N/A$20.9 $13.5
Capex (quarter) ($M)N/A$7.3 $4.3
FY25 Year‑End Cash Outlook ($M)N/A~ $155 ~ $155
FY25 Total Cash Outlays ($M)N/A~ $65 ~ $65
FY25 Capex Outlook ($M)N/A~ $30 ~ $30

Estimates vs. actuals

  • S&P Global consensus estimates for Q2 2025 EPS and revenue were unavailable; no beat/miss assessment can be made. Values retrieved from S&P Global (no estimate values returned).*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025$10–15M (Q1 update) $5–10M Lowered
Year‑End Cash & InvestmentsFY2025~ $155M ~ $155M Maintained
Total Cash OutlaysFY2025~ $65M (incl. tariffs, R&D, equipment) ~ $65M Maintained
CapexFY2025~ $30M (CFO: closer to $30M) ~ $30M Maintained
Tariff ImpactFY2025$2–3M $2–3M Maintained
Commercialization timingInitial KARNOLate 2025 (prior) 2026 Delayed
Gross margin (cash basis)TargetPositive R&D in 2025; breakeven late 2026 Positive R&D in 2025; breakeven late 2026 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Policy incentives (ITC)No ITC for linear generators discussed 30% ITC under OBBBA for 2026+ projects; 10‑yr window Positive catalyst; new tailwind
Manufacturing/LEMsContract manufacturer ramp lag; moving to in‑house assembly Fully transitioned LEM production in‑house; throughput improving Execution risk reduced
Depowdering/regenResidual powder issue identified; new cleaning methods in validation Issue resolved; new regen mesh design to restore performance Technical de‑risking
Customer pipeline/LOIs>100 units under LOIs; data center LOI up to 70MW MOU with Alkhorayef (~$1B potential, non‑binding); LOIs continue Growing but non‑binding
Defense tractionONR revenue began; first Early Adopter to U.S. Navy 2nd Navy unit delivered; Phase II SBIR up to $1.5M; USAF “awardable” Strengthening
Commercialization timing2H25 target reiterated (Q4/Q1) Shifted to 2026 Negative near‑term
Capex/additive scaleM Line printers added; more on order Continued additive expansion; capex ~$30M Scaling for 2026
Tariffs/macroTariff exposure highlighted; $2–3M impact Tariff impact reiterated Persistent headwind

Management Commentary

  • “The 30% investment tax credit will incentivize more rapid adoption of fuel‑flexible, clean, and efficient KARNO generators by our customers.” — Thomas Healy, CEO .
  • “We addressed the significant issues that slowed deployments earlier in the year, including successfully transitioning LEM manufacturing to our Austin facility… and designing a new regen we believe will achieve our performance requirements.” — Thomas Healy, CEO .
  • FY25 framework: Revenue $5–10M (R&D + initial units as possible), year‑end cash/investments ~ $155M, total cash use ~ $65M, capex ~ $30M, cash gross margin breakeven by end of 2026 .

Q&A Highlights

  • The company held its Q2 2025 earnings call on Aug 13, 2025; public transcripts confirm themes of: 30% ITC as an adoption catalyst, resumption of deliveries after resolving LEM/depowdering, commercialization shift to 2026, and defense interest (Navy/USAF) .
  • Management emphasized that the ITC applies to projects beginning construction in 2026 and supports adoption across data centers and C&I power; consistent with the press release .
  • Guidance clarifications: FY25 revenue reduced to $5–10M due to timeline shift; cash outlook and capex intact; R&D gross margins positive in 2025; cash gross margin breakeven targeted by end‑2026 .
  • Defense: continued Navy collaboration, Phase II SBIR to develop multi‑megawatt system software/control; USAF designation as “awardable” technology .

Estimates Context

  • S&P Global consensus for Q2 2025 revenue and EPS was unavailable at query time; no beat/miss analysis is possible. Values retrieved from S&P Global (no estimate values returned).*

Key Takeaways for Investors

  • Commercialization slip to 2026 pushes out revenue inflection; near‑term multiple risk, but cash runway (~$185M at Q2; YE25 ~ $155M) appears adequate to scale through 2026 milestones .
  • 30% ITC for linear generators (2026+) creates a structural demand catalyst in data centers/C&I; could enhance project ROIs and accelerate adoption post‑commercialization .
  • Execution de‑risking: in‑house LEM production and resolved depowdering/regen design reduce bottlenecks; upcoming UL certification is a key gating item for commercialization .
  • Pipeline quality vs. convertibility: LOIs and MOUs (Saudi ~$1B; MMR LOI; Navy/Air Force programs) demonstrate interest but are non‑binding/pre‑revenue; monitor conversion to definitive orders/revenue .
  • FY25 framework is cash‑focused: revenue $5–10M, cash/outlays ~$65M, capex ~$30M; tariff headwinds ($2–3M) persist; watch for quarterly cash use moderation as deployments resume .
  • Defense could be a bridge market: SBIR funding and Navy deployments provide validation and incremental funding while commercial market readies .
  • Near‑term trading: stock likely sensitive to (1) UL certification progress; (2) Early Adopter unit deployments cadence; (3) any definitive commercial orders; (4) additional policy/tax credit clarity — potential catalysts/mileposts.

Supporting Documents and Releases Reviewed

  • Q2 2025 8‑K and press release (financials, guidance, business updates) .
  • Q2 2025 earnings slides (cash/capex outlook) .
  • Q2 2025 related press releases: 30% ITC under OBBBA; Navy Phase II SBIR; MMR LOI .
  • Prior quarters: Q1 2025 press release and call transcript; Q4 2024 press release and call transcript for trend analysis .