Ballard Power Systems, Inc. Q1 FY2026 earnings call

Marty Neese mentioned solid start to the year with deliveries in bus and rail markets driving revenue growth and third consecutive quarter of positive gross margin. Focus areas include deepening partnerships with bus OEMs and key geographies, improving fleet services capabilities, lowering costs through automation. Ralph Robinette introduced his background and spoke about operations, prioritizing quality, cost reduction, etc., with Project Forge for bipolar plate manufacturing. Also discussed fleet services being part of sales with service level agreements and rail business showing potential.

Total revenue for the quarter was $19.4 million, a 26% growth compared to last year, driven by rail and bus verticals. Gross margin improved to 14%, a 37-point increase compared to Q1 2025, and it's the third consecutive quarter of positive gross margin. Revenue contribution: rail and bus verticals drove the growth.

Consistent with past practice, not providing specific revenue or net income guidance for 2026. Expect revenue weighted toward second half. 2026 guidance: total operating expense $65 to $75 million, capital expenditures $5 to $10 million.

Q: Elaborate on drivers behind strong growth in stationary revenues and bus segment decline.

A: Stationary growth largely diesel genset replacement, data center exploration. Bus decline due to timing, EU funding slowness but Wright Bus and Solaris wins.

Q: Fleet services business model.

A: New sales come with service level agreements, extended service tail.

Q: Rail business outlook.

A: Prior rail work opening future opportunities, potential annuity type accounts.

Q: Hydrogen infrastructure and generation.

A: Progress in hydrogen availability, green hydrogen gaining with renewables