Westport Fuel Systems’ Earnings Call: Growth Amid Challenges

Westport Fuel Systems (US) ((TSE:WPRT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Westport Fuel Systems (US) recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company showcased significant progress in revenue growth, loss reduction, strategic partnerships, and innovation in fuel solutions. However, it also acknowledged hurdles such as a slowdown in the hydrogen industry and decreased cash reserves. Nevertheless, Westport’s strategic divestment and focus on high-potential growth areas indicate a strong future potential.

Revenue Growth and Loss Reduction

Westport reported a revenue of $71 million for Q1 2025. When accounting for its 55% ownership share in Cespira, total revenue would have exceeded $80 million, surpassing the $77.6 million reported in Q1 2024. The net loss improved significantly to $2.5 million from a net loss of $13.6 million in Q1 2024, highlighting the company’s effective cost management and operational efficiency.

Improved Gross Profit and Operating Expenditures

The company achieved a $3.5 million increase in gross profit while reducing operating expenditures by $8 million. This improvement in financial performance is further reflected in the year-over-year enhancement of adjusted EBITDA, showcasing Westport’s commitment to financial discipline.

Successful Partnership with Volvo

Westport’s partnership with Volvo Trucks has been fruitful, with Volvo’s gas-powered solution using Cespira’s HPDI technology seeing a sales increase of over 25% in 2024. This momentum continued into Q1 2025, demonstrating the growing demand for Westport’s innovative fuel solutions.

Strategic Divestment of Light Duty Business

Westport announced the proposed sale of its light-duty business to better align with applications that are hardest to decarbonize. This strategic move is expected to deliver immediate cash proceeds, strengthening the balance sheet and fueling growth in both Cespira and high-pressure controls and systems business.

Innovative Fuel Solutions Development

The development of a CNG HPDI solution running on 700 bar storage without a compressor marks a significant advancement in cleaner fuel alternatives. This innovation opens up new decarbonization pathways, reinforcing Westport’s leadership in sustainable fuel technology.

New Production Facility in China

Westport is set to complete a new hydro innovation center and manufacturing facility in China later this year. This facility will focus on delivering to the Chinese market, further expanding Westport’s global footprint and market reach.

Revenue Decrease in High Pressure Control and Systems

The company reported a decrease in revenue for its High Pressure Control and Systems segment, with Q1 2025 revenues at $1.4 million, down from $2.4 million in Q1 2024. This decline is attributed to a slowdown in the hydrogen industry, impacting adoption rates.

Challenges with Hydrogen Infrastructure Development

Westport faces challenges with the slowing development of hydrogen infrastructure, which has led to slower adoption of hydrogen-powered automotive and industrial applications. This presents a hurdle for the company as it seeks to expand its hydrogen-related offerings.

Decrease in Cash and Cash Equivalents

Cash and cash equivalents decreased to $32.6 million as of March 31, 2025, from $37.6 million at the end of 2024. The net cash used in operating activities was $4.9 million, highlighting the need for careful cash management moving forward.

Forward-Looking Guidance

During the earnings call, Westport provided a comprehensive overview of its financial and operational performance, emphasizing its strategic pivot towards decarbonizing long-haul transport. The company is focused on innovations like the CNG HPDI solution and is committed to sustainable growth. The proposed sale of the light-duty business is anticipated to close in Q2 2025, aligning Westport’s focus on heavy-duty and alternative fuel solutions.

In summary, Westport Fuel Systems’ earnings call painted a picture of a company on the move, with a positive outlook despite some industry challenges. The strategic initiatives and financial improvements underscore Westport’s potential for sustainable growth and innovation in the fuel solutions sector.