Hyliion Holdings Corp. Q3 FY2024 earnings call

• Product development: Achieved second-to-last milestone in Carnot generator commercialization, completed beta development work, moving to testing and validation stage; manufacturing components in Cincinnati and Austin.
• Office of Naval Research contract: Won up to $16 million contract to work with Navy on Carnot generator for naval and stationary power applications, includes sale of up to seven systems.
• Market interest: Secured LOIs exceeding 2025 shipment plans; increased interest from data center sector; planning to develop 2-megawatt Carnot system early 2025 with first units in 2026.
• California RPS qualification: Carnot generator qualifies under California's Renewable Portfolio Standard, opening opportunities in renewable energy.
• Additive manufacturing: Expanding in Austin, growing additive print machine fleet, receiving new printers from GE, improving throughput of existing machines.

No specific product segment financial performance with absolute terms and revenue contribution % provided in the transcript.

• Expect to ship several dozen units in 2025, generating low double-digit million revenue.
• Revenue recognition starts in Q4 2024 from R&D services; commercialization of Carnot generator expected around mid-2025.
• 2025 revenue forecasted as low double-digit millions; gross margins negative initially but expected to improve quickly with scale efficiencies.
• Cash usage forecasted at approximately $55 million in 2024.

• Uncertainties in actual results differing materially from forward-looking statements.
• Risks related to commercialization timeline, production capacity constraints, and market adoption challenges.

Q: What was the experience in the beta period and key learnings?

A: Beta phase built on learnings from the alpha version, addressing issues like linear electric motor and bearings; now in test validation phase, working closely with early adopter customers for feedback.

Q: Details on the data center product?

A: 2-megawatt system has ten 200-kilowatt Carnot generators integrated, focus on packaging and accessories, deliveries expected in 2026.

Q: Production capacity for 2025?

A: Expect to ship several dozen units in 2025, generating low double-digit million revenue.

Q: Revenue recognition for 2025 units?

A: Revenue recognized post-commercialization around mid-2025 after certification and meeting operating performance criteria.

Q: Production capacity and capital spending?

A: Capital spending ~$15 million in 2024, increasing next year; capacity growing with additive printers, more machines on order.

Q: Navy contract revenue details?

A: Continuous R&D work with Navy, revenue from engineering, sales, testing, and outsourcing, part of core service offerings going forward.