Hyzon Motors Inc. (HYZN)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 revenue was $0.313M, down sharply sequentially from $9.983M in Q1, and up from $0 in Q2 2023; diluted EPS was $(0.21) versus $(0.14) in Q1 and $(0.25) a year ago .
• Cost of revenue surged on inventory write-downs tied to exiting Europe/Australia and transitioning to the 200kW platform, driving operating loss to $(56.1)M (vs. $(30.7)M in Q1) and net loss to $(50.8)M .
• Liquidity at quarter end was $55.1M in cash and short-term investments; average monthly net cash burn was $9.2M, and management targets ~$6.5M by year-end after restructuring completion .
• Commercially, Hyzon launched 200kW Class 8 trials with multiple large fleets; early data show ~6 mpg equivalent vs. 4 mpg diesel on steep heavy-haul routes, strengthening the thesis for fuel cell trucks in demanding duty cycles .
• Capital markets catalyst: Hyzon executed its first registered direct offering since listing, raising $4.5M and materially improving trading liquidity, while retaining PJT Partners to pursue strategic capital options .

What Went Well and What Went Wrong

What Went Well

• Launched 200kW Class 8 FCEV trials with positive initial results; in one case, the FCEV averaged over six mpg equivalent vs. four mpg diesel on a heavy-haul, steep route, implying ~50% better fuel efficiency and supporting TCO parity even with hydrogen at a premium .
• C-sample progress: 16 200kW fuel cell system C-samples built in Q2 (21 in 1H), durability testing advanced, and SOP remains on track for 2H 2024; targeted initial capacity ~700 systems on three shifts with minimal remaining CapEx .
• Cost discipline delivered average monthly net cash burn of $9.2M (low end of guidance) and a path to ~$6.5M with international exits and U.S. cost actions; R&D and SG&A were below the low end of Q2 guidance ranges .
  • Quote: “R&D expenses of $9.8 million, SG&A expenses of $25.5 million, and net cash burn of $27.5 million all… at or below the low-end of our guidance ranges.” — CFO Stephen Weiland .

What Went Wrong

• Revenue recognition dropped to $0.313M, reflecting lease accounting for PFG trucks and timing-specific recognition; near-term revenue lumpiness will persist under risk-sharing provisions and acceptance milestones .
• Cost of revenue spiked to $18.4M on inventory write-downs tied to restructuring (Australia/Europe) and 110kW-to-200kW transition, compressing reported margins and widening operating losses .
• Strategic exits underscore funding/macro headwinds; management halted Netherlands/Australia operations due to waning subsidies and continues to pursue capital and strategic alternatives (including acknowledging potential need for bankruptcy protection if financing fails) .

Financial Results

KPIs and Operating Metrics

Segment breakdown: Not applicable; Hyzon does not report distinct revenue segments in these materials .

Implications:

• Sequential revenue drop and elevated cost of revenue largely reflect accounting mechanics (lease treatment, acceptance timing) and restructuring/transition costs; underlying trial momentum and SOP milestones support medium-term commercialization trajectory .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We expect to reach SOP for our single stack 200-kilowatt fuel cell system and 200-kilowatt Class 8 fuel cell truck platform in the second half of 2024.” — CEO Parker Meeks .
• “Our fuel cell truck averaged over six miles per gallon equivalent, roughly 50% better than diesel…fuel comprises 50% of total cost of ownership for a heavy-duty truck.” — CEO Parker Meeks .
• “R&D expenses of $9.8 million, SG&A expenses of $25.5 million, and net cash burn of $27.5 million…all at or below the low-end of our guidance ranges.” — CFO Stephen Weiland .
• “We estimate our average recurring monthly cash burn to be further reduced to approximately $6.5 million by year-end…after halting operations in the international markets.” — CFO Stephen Weiland .

Q&A Highlights

• Refuse viability: Battery refuse trucks face payload penalties up to ~40% and incomplete duty cycles; Hyzon’s fuel cell refuse truck achieved full-day routes with up to 3x diesel efficiency in Australia, underpinning strong NA demand and economics even at higher H2 prices .
• Hydrogen fueling approach: Mobile fuelers support early trials; scalable path to on-site dispensing for 30–40+ trucks at a facility; grid constraints make BEV charging timelines/costs challenging for large fleets .
• Trial execution capacity: 25 trials concentrated in CA/Alberta with rotating mobile fueling and additional trial trucks coming online; early Class 8 results are encouraging (steep grade, heavy-haul routes) .
• Customer validation: C-sample design changes, enhanced QC/testing, and transparent learnings build fleet confidence; second-tranche deliveries expected to remove buyback provisions (accelerating revenue recognition) .

Estimates Context

• Wall Street consensus (S&P Global): Not available via S&P Global for HYZN due to missing CIQ mapping in the system at this time. As a result, we cannot provide a reliable comparison to consensus EPS or revenue estimates for Q2 2024. If needed, we can revisit when CIQ mapping is updated.

Key Takeaways for Investors

• Near-term results reflect accounting/timing and restructuring costs more than underlying demand; early trial data (fuel efficiency and duty-cycle success) validate the fuel cell thesis in heavy-haul/refuse use cases .
• SOP of 200kW systems/trucks in 2H 2024 is the critical execution milestone; initial capacity of ~700 systems provides a base for multi-year fleet scaling .
• Focused NA strategy aligns with policy tailwinds (EPA Clean Ports, HVIP, Hydrogen Hubs, 45W tax credit), creating a multi-pronged demand funnel (drayage, refuse, back-to-base fleets) .
• Liquidity improved with a $4.5M raise; cash burn trending down to ~$6.5M monthly by year-end post exits; balance sheet remains the gating factor for pace of commercialization, with PJT exploring strategic options .
• Trading: Near-term catalysts include additional positive trial readouts, initial definitive agreements from trials, and formal SOP declarations; any second-tranche PFG order without buyback provisions could also be a recognition/credibility catalyst .
• Medium-term thesis: Hyzon’s single-stack 200kW architecture (weight/volume/cost/performance advantages) and asset-light manufacturing position it to win in demanding routes where BEVs struggle, with potential expansion into stationary/data center power over time .

Notes:
- All quantitative data above are sourced from Hyzon’s Q2 2024 press release and 8-K exhibits and Q2 2024 earnings call/transcript. See citations in each table cell and statement.
- S&P Global consensus estimates for HYZN were unavailable due to missing CIQ mapping at time of analysis; no estimate comparison is provided.

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