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HH

Hyliion Holdings Corp. (HYLN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $0.759M, with a net loss of $13.3M and diluted EPS of -$0.08; cash and investments ended at $164.7M .
  • Hyliion delivered key operational milestones: 100 days of operation on a customer-configured KARNO module without unplanned hardware-related downtime, UL LEM test passed, and demonstrated fuel flexibility (natural gas/propane) .
  • Regulatory clarity: EPA determined the KARNO Power Module is not federally regulated as an internal combustion engine, streamlining deployments via local air permitting; internal emissions testing met stringent SCAQMD Rule 1110.3 thresholds (NOx <2.5 PPM; CO low single-digit PPM without aftertreatment) .
  • Guidance lowered: 2025 revenue now ~ $4M (from $5–$10M in Q2; from $10–$15M in Q1) due to early-adopter deliveries shifting into 2026; commercialization of KARNO now targeted for 2026; cash outlays for 2025 maintained at ~$65M and year-end cash ~ $155M .
  • Data center angle strengthened: native 800V DC output aligns with NVIDIA’s move toward 800V DC architectures for AI data centers; nearly 500 KARNO cores under non-binding LOIs, implying supply-constrained demand as production scales .

What Went Well and What Went Wrong

What Went Well

  • Reliability milestone: over 100 consecutive days of testing with no unplanned hardware-related downtime on a customer unit, validating durability and low-maintenance design .
  • Emissions and permitting: internal testing met SCAQMD Rule 1110.3 (NOx <2.5 PPM; CO low single-digit PPM) without aftertreatment; EPA determination removes federal engine permitting, enabling local-only air permitting pathways .
  • Strategic positioning: native 800V DC output matches evolving AI data center architectures; nearly 500 cores under LOIs indicate broad application demand and potential supply constraints as production ramps .

What Went Wrong

  • Topline softness and timing: Q3 revenue only $0.759M from R&D services; product revenue recognition now deferred to 2026 as early-adopter unit deliveries shift, cutting FY25 revenue guidance to ~$4M .
  • Elevated operating expenses: Q3 OpEx rose to $15.3M (from $14.2M YoY), driven by increased R&D as Hyliion advances testing and production; net loss widened YoY to $13.3M (from $11.2M) .
  • Cash usage and capex: year-to-date cash use of $55M, including $22M of capex; company continues to forecast total 2025 cash outlays of ~$65M, underscoring near-term cash burn ahead of commercialization .

Financial Results

Quarterly Financials (Q1 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Thousands)$489 $1,515 $759
Gross Profit ($USD Thousands)$12 $131 ($47)
Operating Expenses ($USD Thousands)$19,734 $15,754 $15,250
Net Loss ($USD Thousands)$(17,254) $(13,414) $(13,337)
Diluted EPS ($USD)$(0.10) $(0.08) $(0.08)
Cash & Investments ($USD Millions)$198.8 $185.3 $164.7

Year-over-Year (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Thousands)$0 $759
Operating Expenses ($USD Thousands)$14,181 $15,250
Net Loss ($USD Thousands)$(11,202) $(13,337)
Diluted EPS ($USD)$(0.06) $(0.08)

Revenue Breakdown (All revenue from R&D services)

Revenue Type ($USD Thousands)Q1 2025Q2 2025Q3 2025
Research & Development Services$489 $1,515 $759

KPIs and Operational Milestones

KPIQ1 2025Q2 2025Q3 2025
LOIs (KARNO Cores)>100 N/A~500
Reliability Run (No Unplanned Downtime)Initial Navy early-adopter system reliable; no unplanned downtime noted N/A100 days
Emissions (NOx PPM)N/AN/A<2.5 PPM; CO low single-digit PPM; no aftertreatment
EPA Engine Regulation StatusN/AN/ANot federally regulated as internal combustion engine; local air permitting only
UL LEM Certification StatusN/AN/ALEM passed all tests on first attempt; system-level UL certification expected in coming months
Data Center Architecture AlignmentN/AN/ANative 800V DC output aligned with NVIDIA’s 800V DC direction

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY 2025$10–$15M (Q1) ~$4M (Q3) Lowered
Revenue ($USD)FY 2025$5–$10M (Q2) ~$4M (Q3) Lowered
Product Commercialization TimingLaunchLate 2025 (Q1) 2026 (Q2/Q3) Delayed (vs Q1); Maintained (vs Q2)
Year-end Cash & Investments ($USD)FY 2025~$155M (Q1) ~$155M (Q2/Q3) Maintained
Total Cash Outlays ($USD)FY 2025~$65M (Q1) ~$65M (Q2/Q3) Maintained
Capex ($USD)FY 2025N/A~$30M before ~$10M financing (Q3 slides) New detail (Q3)
Equipment Financing TimingFY 2025/26N/AMay shift into 2026 (Q3 slides) New detail (Q3)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/Data Center ArchitectureNo specific mention in Q1/Q2 press releases Native 800V DC output aligned with NVIDIA’s 800V DC plans for AI data centers Strengthening alignment
Supply Chain & ProductionQ1: LEM manufacturing moved in-house; depowdering solution under validation . Q2: LEM fully in-house; regen redesigned; throughput improving Reliability confirmed; UL LEM pass; expanded deployments planned into 2026 Improving execution
Tariffs/Macro Cost PressuresQ1: Cash spending raised due to tariffs ; Q2: cash outlays reflect tariff impacts No new tariff commentary in Q3 press release Stable headwind
Regulatory/LegalNo EPA classification commentary in Q1/Q2 press releases EPA: not federally regulated as ICE; local air permitting only Positive regulatory clarity
R&D Execution & EmissionsQ1: Early-adopter system reliable; ongoing upgrades . Q2: technical milestones and UL pathway progress Emissions met stringent local standards without aftertreatment; 100-day reliability Accelerating validation
Defense ProgramsQ1: First Navy unit operational under validation . Q2: Phase II SBIR up to $1.5M; second Navy unit delivered Navy autonomous vessel in sea trials; initial KARNO installations in 2026 Advancing program

Management Commentary

  • “This quarter marks a major turning point for Hyliion… The KARNO Power Module is now meeting our initial customers’ performance requirements, enabling further system deployments… and have received positive regulatory determination from the EPA that will streamline the deployment pathway for our customers.” — Thomas Healy, CEO .
  • “The completion of 100 days of operation without unplanned hardware-related downtime demonstrates the reliability and durability of our technology… advancing the KARNO platform toward commercial readiness and real-world deployment.” — Thomas Healy, CEO .
  • “This achievement validates the unique environmental performance benefits of our Power Module… we’re well positioned as we work with customers and permitting agencies across the country to deploy our Power Modules.” — Thomas Healy, CEO (emissions milestone) .

Q&A Highlights

  • Commercialization timeline and deployment cadence: Management reiterated commercialization in 2026 with additional early customer units completing through early 2026; deployments aligned with customer schedules .
  • Regulatory status and permitting: EPA’s non-ICE determination simplifies federal requirements; customers to work directly with local air agencies, accelerating deployment pathways .
  • Data center integration: Native 800V DC output enables direct integration into next-gen AI data center architectures; reduces conversion equipment needs and installation cost/complexity .
  • Demand signals: Nearly 500 cores under non-binding LOIs across applications; management highlighted potential supply constraints as production scales .
  • Defense program update: Navy vessel in sea trials with initial KARNO installations targeted for 2026; multi-megawatt architecture demonstrates scalability .

Estimates Context

  • S&P Global consensus estimates for Q3 2025 EPS, revenue, and EBITDA were unavailable via our data query; as a result, formal estimate comparisons are not provided here (see table note).
MetricActual Q3 2025S&P Global Consensus Q3 2025
Revenue ($USD Thousands)$759 N/A
Diluted EPS ($USD)$(0.08) N/A
EBITDA ($USD)N/AN/A

Note: S&P Global consensus data were unavailable for HYLN for Q3 2025 at the time of retrieval; therefore, comparisons to estimates are omitted. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term revenue limited; commercialization deferred to 2026, but operational and regulatory milestones de-risk deployment readiness and permitting pathways .
  • Cash runway appears adequate through commercialization with $164.7M in cash/investments and 2025 year-end target of ~$155M; total 2025 cash outlays maintained at ~$65M .
  • Demand indicators strong: nearly 500 cores under LOIs across diverse applications; management expects potential supply constraints as production scales .
  • Data center optionality: native 800V DC directly aligns with NVIDIA’s architecture direction, potentially reducing integration costs and complexity for AI data centers .
  • Defense validation: Navy program progressing to sea trials with initial installations planned in 2026; SBIR and multi-megawatt vessel architecture highlight scalability .
  • Emissions advantage: Internal testing confirms ultra-low NOx and CO without aftertreatment, strengthening Hyliion’s positioning in strict regulatory environments (e.g., SCAQMD) .
  • Trading lens: Narrative hinges on execution milestones, permitting clarity, and LOI conversion; limited product revenue near term may weigh on sentiment until deployments translate to commercialization and recognized sales in 2026 .