Westport Fuel Systems (US) ((TSE:WPRT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the latest earnings call, Westport Fuel Systems (US) presented a mixed sentiment. The company celebrated notable achievements, including a significant increase in Cespira’s revenue, an improved gross margin, and a robust cash position. However, these positives were tempered by an overall revenue decline, increased net loss, negative adjusted EBITDA, and foreign exchange losses. The strategic shift towards heavy-duty systems is promising, yet challenges persist.
Cespira Revenue Increase
Cespira’s revenue saw a notable increase of 19% over the same period last year, reaching $19.3 million in the quarter. This growth was primarily driven by higher volumes, showcasing the potential of Cespira as a key revenue driver for Westport.
Improved Gross Margin
Westport reported an impressive improvement in its gross margin, which rose to 31% in Q3 2025 from 14% in Q3 2024. This enhancement was attributed to higher-margin engineering services revenue, reflecting the company’s efforts to optimize its profitability.
Strong Cash Position
The company ended the quarter with a strong cash position of $33.1 million and reduced its outstanding debt to $3.9 million. This financial strengthening provides Westport with a solid foundation to support its strategic initiatives.
Strategic Focus on Heavy-Duty and Alternative Fuel Systems
Following the divestiture of its Light-Duty segment, Westport is now concentrating on its core heavy-duty and alternative fuel systems. This strategic shift is aimed at capitalizing on emerging market opportunities and aligning with the company’s long-term vision.
Revenue Decline
Westport experienced a revenue decline to $1.6 million for the quarter, down from $4.9 million in the same quarter last year. This decrease was largely due to the divestiture of the Light-Duty business, highlighting the transitional phase the company is undergoing.
Negative Adjusted EBITDA
The company reported a negative adjusted EBITDA of $5.9 million for the quarter, compared to negative $0.8 million in the same quarter last year. This decline was influenced by lower gross profit and increased operating expenditures.
Net Loss Increase
Westport’s net loss from continuing operations increased to $10.4 million for the quarter, compared to a net loss of $6 million for the same quarter last year. This was mainly due to increased operating expenditures and foreign exchange losses.
Foreign Exchange Losses
The company recognized foreign exchange losses of $1.3 million this quarter, compared to a gain of $1.7 million in the same period last year. These losses impacted the overall net loss, adding to the financial challenges faced by Westport.
Forward-Looking Guidance
Looking ahead, Westport anticipates further cost reductions, projecting a 60% decrease in CapEx and a 15% reduction in SG&A by 2026. The company is focusing on its core heavy-duty and alternative fuel systems markets, with significant developments expected in the Cespira joint venture and new CNG solutions for the North American market. These strategic initiatives are aimed at driving future growth and enhancing operational efficiency.
In summary, Westport Fuel Systems (US) presented a mixed earnings call, with both achievements and challenges. While the company is making strides in its strategic focus areas, it continues to face financial hurdles. The forward-looking guidance suggests a commitment to cost reduction and market expansion, providing a cautiously optimistic outlook for the future.