Earning Date, Transcript Summary & Report

Record New Order Intake: Ballard Power Systems achieved record-breaking new order intake of approximately $113 million in 2024, with $75.4 million in Q4 alone, highlighting strong demand for their products.

Record Order Backlog Growth: The company ended the year with a record order backlog of $173.5 million, a 41% increase from Q3, indicating robust future revenue potential.

Fuel Cell Engine Growth: Fuel cell engine shipments grew by approximately 30% in 2024, totaling over 660 engines, marking the fourth consecutive year of growth and demonstrating strong manufacturing capabilities.

PEM Fuel Cell Revenue Dominance: Ballard's PEM fuel cell engines accounted for over 90% of total revenue in 2024, with a total of 56.5 megawatts shipped, reflecting a 10% increase from the previous year.

Safety and Reliability Achieved: The company reported zero safety incidents and maintained a fuel cell engine availability rate of around 99% in 2024, showcasing reliability and operational excellence.

Next-Gen Fuel Cell Engine: Ballard launched its ninth-generation fuel cell engine, FC Move XD, which sets a new industry standard for performance in heavy-duty mobility applications.

Bus Market Revenue Surge: The bus vertical saw significant growth, with Ballard's bus market revenue increasing by 51% to approximately $44 million, representing over 60% of total revenue for 2024.

Fuel Cell Engine Agreement: Ballard secured a landmark long-term supply agreement with CPKC for 98 fuel cell engines for freight locomotives, marking the largest PEM fuel cell engine contract in this sector globally.

Business Divestiture Strategy: The company divested its small backup power business to focus on high-power stationary applications, aligning with its core product strategy and enhancing operational focus.

Financial Stability Achieved: Ballard started 2025 with over $600 million in cash and no bank debt, ensuring financial stability and no near or mid-term financing requirements.

Hydrogen Industry Challenges: 2024 was a difficult year for the hydrogen fuel cell industry, marked by prolonged policy uncertainty and a multiyear push out in development of hydrogen projects.

Customer Financial Weakness: The financial position of certain customers weakened materially, indicating challenges in the market.

Deteriorating Financing Environment: The financing environment for the hydrogen and fuel cell industry continued to deteriorate, posing significant headwinds to corporate growth plans.

Corporate Restructuring Initiative: A global corporate restructuring was initiated to moderate investment intensity, which included a sizable workforce reduction and consolidation of operations.

Investment Decision Deferral: There is no business case for production capacity expansion investments for the foreseeable future, leading to a deferral of the proposed Gigafactory investment decision to 2026.

Joint Venture Underperformance: The Weichai Ballard joint venture underperformed, prompting a strategic review and a halt on significant investments in China.

Truck Market Challenges: The truck market has disappointed with adoption timelines being pushed out, and several business failures of smaller integrators have caused challenges.

Revenue Decline Analysis: Revenue for Q4 2024 was $24.5 million, a 42% decrease compared to the same period last year, and full-year revenue totaled $69.7 million, representing a 32% decline compared to 2023.

Negative Gross Margin Analysis: The Q4 gross margin was negative 13%, and the full-year gross margin reached negative 32%, reflecting pressure from lower annual revenue and a product mix weighted towards power products.

High Operating Expenses: Total operating expenses for the year were $161.3 million, including a $17 million restructuring provision, indicating high costs amid declining revenues.