Westport Fuel Systems (WPRT) Q2 2025 earnings summary

Executive summary

• Completed divestiture of Light-Duty segment, strengthening the balance sheet and sharpening strategic focus on commercial, industrial, and hydrogen markets.

• Strategic focus now on Cespira joint venture and High-Pressure Controls & Systems, targeting growth in heavy-duty, hydrogen, and alternative fuel markets.

• Relocated European manufacturing to Canada and China to align with innovation hubs, reduce costs, and support North American expansion.

• Cespira JV experiencing strong demand, with 25% year-over-year truck volume growth and global market penetration, especially in Europe.

• High-Pressure Controls & Systems segment expanding in China, with a new Hydrogen Innovation Center opening in late 2025.

Financial highlights

• Q2 2025 revenue from continuing operations was $12.5M, down 11% year-over-year; total consolidated revenue including discontinued operations was $88.9M.

• Cespira generated $12.0M in Q2 revenue, up from $4.1M, but gross margin was negative 16% due to scaling and investment phase.

• Adjusted EBITDA improved to negative $1.0M from negative $2.0M year-over-year, driven by reduced operating expenses.

• Gross margin from continuing operations was 6% in Q2 2025, down from 17% in Q2 2024, mainly due to lower revenue and higher material costs.

• Cash and cash equivalents at quarter-end were $6.1M; cash used in operating activities was $5.6M.

Outlook and guidance

• Cespira expected to deliver volume growth over the next 12 months, with expansion in Europe, North America, and emerging markets.

• High-Pressure Controls & Systems to open a Hydrogen Innovation Center in China by late 2025, targeting the fast-growing hydrogen market.

• Continued cash contributions required for Cespira as part of a three-year build-out and ongoing investment phase.

• Further cost reductions anticipated post-divestiture, with normalized OpEx run rate expected in 2026.

• Anticipates incremental growth from geographic expansion and new product launches, particularly in hydrogen and CNG/RNG markets.