Ballard Power Systems Inc. Q3 FY2025 earnings call

• Progress on turnaround efforts with year-over-year growth in shipments and revenue, margin expansion, and disciplined capital spending. - Launched FC Move SC at Bus World with positive OEM feedback. - Decided not to pursue Texas Gigafactory development due to capital discipline and existing capacity. - Reduced involvement in the Way Ballard joint venture in China to focus on North America and Europe. - Stadler's Flirt H2 hydrogen-powered train entered service, a milestone in sustainable transportation. - Stationary power market sees innovation with FC Move XD for backup power solutions.

Ballard's third quarter 2025 showed a 120% year-over-year revenue increase, primarily driven by bus and rail deliveries, which accounted for more than 70% of the quarter's revenue. The marine segment recorded its largest order ever, totaling 6.4 megawatts to ECAP and Samskip. The stationary power market is a focus with product innovation like the FC Move XD enabling higher power densities. In absolute terms, revenue was $32,500,000, gross margin improved to 15% from negative 56% in Q3 2024.

• Anticipate further gross margin improvement in 2026 supported by pricing, growth initiatives, product cost reductions, and sales of FC Move SC. - Expect growth in material handling and stationary power markets. - Capital expenditures reduced to 8-12 million from prior guidance of 15-25 million, reflecting disciplined capital allocation.

• Early stage of market development for marine and stationary power segments. - Intense competition in the fuel cell bus engine space. - Need for continued efforts to achieve cash flow positivity and long-term sustainability.

Q: Thoughts on bus market growth and gross margin baseline?

A: Strong reception at Bus World, infrastructure constraints favor fuel cells; gross margin slightly negative without one-time benefits, expecting incremental progress.

Q: Texas facility and material handling strategy?

A: Project Forge still in flight without Texas; interest in air-cooled material handling with extended durability.

Q: Marine order evolution?

A: Developed over years, FCwave product DNB certified, collaborative effort with customers