• Operating Expenses: Q1 2024: $19 million, down from $31.9 million in Q1 2023.

• Net Loss: Q1 2024: $15.6 million, improved from $28.8 million in Q1 2023.

• Interest Income: Q1 2024: $3.4 million, approximately flat year-over-year.

• Cash and Investments: Ended Q1 2024 with $264 million, down from $299 million at the end of 2023.

• Share Repurchases: 8.7 million shares for $11.3 million in Q1 2024.

• Capital Expenditure Guidance: Estimated $40 million to $50 million for 2024.

• Revenue Forecast: Low double-digit millions expected in 2025 from Cardno generator sales.

• Gross Margin: Expected to be breakeven to slightly negative beyond 2025.

• Warning! GuruFocus has detected 3 Warning Signs with HYLN.

Release Date: May 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hyliion Holdings Corp (NYSE:HYLN) has successfully expanded its customer base and built a backlog of orders, indicating strong market demand.

• The company has secured a nonbinding LOI with H2 Energy for the adoption of up to 10 Cardno generators, showcasing potential future revenue and growth.

• Hyliion Holdings Corp (NYSE:HYLN) has identified four target markets for the Cardno generator, which diversifies its market reach and potential customer base.

• The company has formed a strategic partnership with Biotech to ensure a reliable hydrogen supply chain, enhancing the appeal of its hydrogen-powered solutions.

• Hyliion Holdings Corp (NYSE:HYLN) remains on track with its production and operational plans, with expectations to begin shipping units to customers later this year.

Negative Points

• The company recorded a net loss of $15.6 million for the first quarter, although this is an improvement from the previous year.

• Hyliion Holdings Corp (NYSE:HYLN) incurred $4.4 million in exit and termination expenses due to the shutdown of its powertrain business.

• The total cash expenditures for the Cardno generator business in 2024 are expected to be on the high end of the previously estimated range ($40 million to $50 million).

• The company's gross margin for 2025 is projected to be breakeven to slightly negative, indicating potential profitability challenges as it scales up.

• The timing of payments from the deployment of Cardno generator units remains uncertain, which could affect cash flow and financial planning.

Q & A Highlights

Q: Can you provide an update on the progress made with the Cardno generator this quarter? A: Thomas Healy, CEO: We've achieved critical milestones with the Cardno generator, keeping us on track with our timelines. We expanded our customer base and built a backlog of orders. We also executed a nonbinding LOI with H2 Energy for up to 10 Cardno generators, which will be deployed in the second half of 2025 to power a green hydrogen production site.

Q: What are the target markets for the Cardno generator? A: Thomas Healy, CEO: The target markets include EV charging stations, utilizing waste gas for electricity, prime power for buildings and industrial uses, and mobility applications like marine. We are actively discussing opportunities in all these areas and have secured agreements across these markets.

Q: Could you discuss the operational plans and production roadmap for the Cardno generator? A: Thomas Healy, CEO: We are on track to begin shipping units to customers later this year and to start scaling production next year. Our Ohio facility is focused on R&D, while our Austin facility will handle manufacturing and assembly. We're also increasing our production capacity with new additive printers.

Q: What were the financial results for this quarter? A: Jon Panzer, CFO: Operating expenses were $19 million, down from $31.9 million last year, mainly due to the shutdown of our powertrain business. Our net loss was $15.6 million, improved from $28.8 million last year. We ended the quarter with $264 million in cash and investments.

Q: What is the outlook for the Cardno generator's commercial deployment and financial performance? A: Jon Panzer, CFO: We expect to begin deploying Cardno generator units to customers in late 2024. For 2025, we anticipate ramping up deliveries and revenue, with sales in the low double-digit millions and a gross margin around breakeven to slightly negative. We believe our current capital will support commercialization efforts.

Q: Are there any new partnerships or collaborations that have been formed? A: Thomas Healy, CEO: We've partnered with Biotech, a leading producer of hydrogen production hubs, to ensure a reliable hydrogen supply chain. This collaboration allows us to offer a combined hydrogen and electricity solution and introduce our products to each other's customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.