Q3 2024 Summary
Published Feb 7, 2025, 7:58 PM UTC- Exceptional Performance Exceeding Expectations: Hyzon's fuel cell electric trucks have outperformed both company and customer expectations during trials. The Class 8 trucks have achieved up to 500 miles in a single day, carrying heavy loads and tackling steep grades with 50% better fuel efficiency than diesel. The refuse trucks have completed over 1,300 bin lifts per day, effectively doubling the work rate of battery electric trucks, and have demonstrated up to 300% better fuel efficiency than diesel. This exceptional performance proves that Hyzon's vehicles can fully replace combustion engines without compromise, positioning the company as an industry leader.
- Technological Advantage with 200-kilowatt Fuel Cell System: Hyzon's proprietary 200-kilowatt single-stack fuel cell system is claimed to be 2 to 3 years ahead of competitors outside China, offering the highest power output and most compact design for mobile fuel cell systems in trucks today. Early production has shown confidence in quality and durability, backed by an ISO 9001 certification. With over 50 significant design improvements made during the development process, Hyzon is well-positioned to maintain its technological edge and drive down costs as production scales.
- Strong Commercial Momentum and Revenue Potential: Following successful trials, Hyzon is actively negotiating contracts with major fleets, including those averaging 4,200 trucks, with 10 fleets over 5,000 trucks. The swift conversion of trials into sales is exemplified by the purchase order from GreenWaste for 12 fuel cell electric refuse trucks—the first of its kind in North America. With favorable market conditions, including funding programs and increasing demand for zero-emission vehicles, Hyzon anticipates significant revenue growth. For instance, selling 100 trucks at approximately $500,000 per truck could generate around $50 million in revenue.
- Reliance on additional capital raising and potential dilution: The company acknowledges the need to raise capital and has been using an at-the-market program, raising approximately $5 million in proceeds primarily in the fourth quarter. There is uncertainty around securing strategic partnerships for funding, and this reliance on equity fundraising could lead to dilution for existing shareholders.
- Delayed revenue realization and uncertain timing of orders: Despite announcing a purchase agreement with GreenWaste, initial vehicle deliveries are scheduled to begin as soon as Q4 2025, but the company is "not committing to the fourth quarter of 2025," and it may slip into 2026. Additionally, the timing of converting trials into firm contracts with other customers remains uncertain.
- Technical and operational risks due to evolving technology: The company has implemented over 50 significant design changes in its 200-kilowatt fuel cell system during the development process. This indicates that the technology is still evolving, which may pose risks associated with scaling up production and meeting performance expectations.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | From $0.0M to $0.134M | The introduction of modest revenue mainly reflects early-stage commercialization, including limited operating lease income and/or upfit services. This contrasts with no revenue in the prior period, when vehicle deliveries or related services were not recognized. |
COGS | -91% (from $3.286M to $0.301M) | The significant decrease in cost of goods sold is primarily due to lower inventory write-downs and fewer provisions for customer contracts compared to the prior period. Previously, elevated COGS included inventory adjustments in Europe and other regions. |
SG&A | +41% (from $21.0M to $29.7M) | The increase in selling, general, and administrative expenses likely stems from higher legal, accounting, and consulting fees, along with increased personnel and office-related costs. Previously, legal matters and regulatory investigations were major cost drivers, which appear to have continued or expanded. |
R&D | -26% (from $10.9M to $8.1M) | The decrease in research and development spending reflects reduced material costs and a more focused scope of development projects compared to last year. This contrasts with the previous period of higher investment in vehicle design, fuel cell systems, and related technology. |
Operating Income | Improved 7% (from -$40.1M to -$37.4M) | The narrowing loss is driven by lower research and development outlays and some gains from operational efficiencies, partly offset by the continued rise in SG&A. Previously, heavy legal fees and inventory charges contributed to more negative operating results. |
Net Income | Improved 6% (from -$44.1M to -$41.3M) | The slight improvement in net loss primarily reflects lower R&D costs and some reduction in previously elevated legal and regulatory expenses, although ongoing SG&A growth persists. In the prior period, heightened expenses and lack of significant revenue weighed more heavily on net income. |
EPS (Diluted) | From -$0.18 to -$24.08 | The significant drop reflects both the share count impact and continued net losses. Large negative swings in fair-value items or adjustments in the prior period were partly offset by fewer shares outstanding, whereas the current period’s deeper per-share loss is driven by a similar net loss over fewer weighted shares. |
Cash & Equivalents | -72% (from $110.6M to $30.4M) | The substantial decline stems from ongoing operating losses, as well as investments in development and restructuring. Previously, the company had stronger liquidity from short-term investments and less cash burn, whereas current expenditures and fewer financing inflows have strained remaining cash. |
Shareholders’ Equity | -93% (from $177.8M to $12.2M) | The sharp reduction in equity is primarily due to accumulated net losses and any inventory or asset write-downs taken over the period. In the prior year, the equity base was higher from proceeds of earlier financing rounds and fewer markdowns, whereas continuing losses have eroded equity in the current period. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Average monthly recurring net cash burn | FY 2024 | $6.5 million by year-end 2024 | $6.5 million by year-end 2024 | no change |
Class 8 and refuse truck trials | Q3 2024 | no prior guidance | 20+ remaining Class 8 and refuse truck trials | no prior guidance |
Large fleet multiyear agreements | Q3 2024 | no prior guidance | 50+ truck multiyear agreements | no prior guidance |
Success rate for trial conversions | Q3 2024 | no prior guidance | 40% success rate | no prior guidance |
-
Strategic Partnerships and Financing
Q: Any updates on strategic partners and financing?
A: Management stated they are in a strong position with potential strategic partners, particularly fuel providers, and are negotiating partnerships that might include capital investments. They mentioned that customers are aware of their financial plans and have not made orders contingent on financing. They also noted plans to capitalize on equity fundraising opportunities when the stock reacts positively to news. -
Revenue Opportunity per 100 Trucks
Q: What's the revenue per 100 trucks?
A: Management indicated that the revenue potential per 100 trucks is approximately $50 million, assuming a $500,000 price per truck. They noted that the refuse truck is slightly more expensive due to the added body. -
Timelines for Fleet Agreements and Orders
Q: Can you update on fleet agreements and order timelines?
A: Management is actively negotiating fleet agreements and hopes to finalize them soon, given the strong performance of their trucks in trials. They remain optimistic about achieving these goals by the end of the year. -
Timeline for GreenWaste Order Delivery
Q: What's the timeline for delivering the GreenWaste order?
A: Management expects to deliver initial vehicles to GreenWaste as soon as Q4 2025, though it could extend into 2026. They are integrating the 200-kilowatt fuel cell into the refuse truck and accelerating the start of production. -
Accelerated Timelines for Other Customer Orders
Q: Will other customers expedite orders like GreenWaste?
A: Management believes that other motivated fleets may move quickly to contracts, similar to GreenWaste. They are focusing on customers who are sustainability leaders and see commercial opportunities with zero-emission trucks. -
Vehicle Performance Exceeding Estimates
Q: How are the trials exceeding expectations?
A: The trucks have shown exceptional performance, handling heavy loads up to 90,000 pounds, climbing steep grades, and achieving up to 50% better fuel efficiency than diesel in Class 8 trucks. The refuse trucks showed up to 300% better fuel efficiency than diesel and could complete full routes without refueling. -
Learnings from 200-kilowatt Production
Q: What have you learned from early production?
A: Through producing nearly 50 units from samples to preproduction, they made over 50 significant design changes, improving durability and performance. They believe they're ahead in bringing a 200-kilowatt single-stack system to market.