15-05-2025
Westport Fuel Systems Inc (WPRT) Q1 2025 Earnings Call Highlights: Strategic Shifts and ...
Revenue: $71 million for Q1 2025, a 9% decrease compared to Q1 2024.
Cespira Revenue: $16.7 million, not included in top line due to equity accounting.
Net Loss: Improved to $2.5 million from $13.6 million in Q1 2024.
Gross Margin: Increased to $15.2 million or 21% of revenue, up from $11.7 million or 15% in Q1 2024.
Operating Expenditures: Reduced by $8 million year-over-year.
Adjusted EBITDA: Improved to nil from a loss of $6.6 million in Q1 2024.
Light-Duty Revenue: $64.2 million, up from $63.3 million in Q1 2024.
High Pressure Control & Systems Revenue: $1.4 million, down from $2.4 million in Q1 2024.
Heavy-Duty OEM Revenue: $5.4 million, decreased due to transition to Cespira.
Cash and Cash Equivalents: $32.6 million as of March 31, 2025, down from $37.6 million at December 31, 2024.
Net Cash Used in Operating Activities: $4.9 million for Q1 2025.
Warning! GuruFocus has detected 3 Warning Signs with WPRT.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Westport Fuel Systems Inc (NASDAQ:WPRT) reported a significant improvement in net loss, reducing it to $2.5 million from $13.6 million in Q1 2024.
Gross profit increased by $3.5 million, and operating expenditures decreased by $8 million, indicating improved operational efficiency.
The company is focusing on high-growth areas by divesting its Light-Duty business to concentrate on long-haul and heavy-duty transport solutions.
Cespira, the joint venture with Volvo, generated $16.7 million in revenue, showcasing strong performance and potential for future growth.
Westport Fuel Systems Inc (NASDAQ:WPRT) is strategically positioned as a leader in alternative fuels, with innovations like the CNG HPDI solution enhancing its market offerings.
Reported revenue for Q1 2025 was $71 million, a 9% decrease compared to the same period last year.
The transition of the Heavy-Duty OEM business into Cespira resulted in a shift of revenue, impacting reported figures.
High Pressure Control & Systems revenues decreased to $1.4 million from $2.4 million in Q1 2024, primarily due to a slowdown in the hydrogen industry.
Cash and cash equivalents decreased to $32.6 million from $37.6 million at the end of 2024, indicating a reduction in liquidity.
The hydrogen infrastructure development is slowing, which could delay the adoption of hydrogen-powered automotive and industrial applications.
Q: Just to clarify on the divestiture. Is this closing in 2Q or has it already been closed? A: Closing in Q2.
Q: And that is when the cash proceeds, et cetera, will show up in the Q2 financials? Or will we see those in the third quarter financials? A: We expect to close by the end of the quarter, so the cash should show up in our June 30 balance sheet.
Q: With respect to Cespira margins going forward, any color on what the path to higher margins looks like? Is it just more volume that will drive this? A: Getting Cespira profitable is a combination of things. Volume is key, along with reducing costs and managing the supply base better.
Q: Last quarter, you mentioned the CNG related opportunity in North America. Any progress on that front? A: The pendulum is swinging back to natural gases. The hydrogen solutions are further off than expected, and the new US administration is pushing for natural gas, which should create opportunities.
Q: Is China going to be a focus for you as well in the new emerging Westport? A: Yes, China is important, representing 50% of our high-pressure components business. We are seeing natural gas accelerate in China, and we are developing products for customers there.
Q: Regarding the development of a CNG HPDI solution, how long would it take for Volvo to bring it to North America if they decide to? A: Engine development is a long cycle, typically about four years, mainly due to the certification process. We are proactively working to shorten this cycle.
Q: On the High-Pressure Controls business, what growth opportunities do you see in that segment? A: We have a strong book of business in hydrogen components, and we are pivoting to include CNG components. The market is pulling for local supply, especially in China.
Q: On the Cespira business, where is the growth coming from, and what are the dynamics? A: Growth is primarily in Europe, with Volvo marketing heavily and exploring opportunities in India. The 25% growth was built into our business plan.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
