Westport Fuel Systems Inc. Q3 FY2025 earnings call

• The company completed the light-duty segment divestiture, focusing on core heavy-duty and alternative fuel systems.
• Revenue for Q3 2025 was $1.6 million, with adjusted EBITDA negative $5.9 million and net loss from continuing operations $10.4 million. Foreign exchange losses were $1.3 million in Q3 2025 vs. a gain of $1.7 million in Q3 2024, and there were onetime severance/restructuring costs of approximately $1 million.
• High-Pressure Controls & Systems is moving production to Canada and China, with facilities expected online by year-end. Cespira saw revenue growth and is pursuing OEM expansion.
• The balance sheet had cash and cash equivalents of $33.1 million and debt of $3.9 million. The company plans to reduce CapEx by 60% and SG&A by 15% in 2026.

Westport reported revenue of $1.6 million for Q3 2025. The High-Pressure Controls & Systems segment had revenue of $1.6 million in Q3 2025, a slight decrease from $1.8 million in Q3 2024. Production lines in Italy (from light-duty divestiture) are being moved to Canada and China; construction is ongoing with initial product expected late 2025, and gross profit was slightly up as a percent of revenue due to higher margin engineering services. Cespira generated $19.3 million in Q3 2025, up 19% from the same period last year. However, gross profit for Cespira was negative $1.1 million in Q3 2025 compared to negative $0.2 million in Q3 2024, as it needs higher volumes for a positive margin on a per unit basis.

• Expect more cost reductions in the near future as the company adjusts to being a smaller organization post-light-duty divestiture.
• Cespira aims for volume growth in the next year, expanding geographies and adding OEM customers.
• High-Pressure Controls & Systems facilities in Canada and China are expected to be online by year-end.
• Planned reductions of 60% in CapEx and 15% in SG&A in 2026.

• Foreign exchange risks: Unrealized losses from translation of U.S. dollar-denominated debt in Canadian legal entities.
• Macro environment uncertainties: Impact on market momentum and adoption of natural gas as a transport fuel.

Q: Can we get more detail on new OEM development with Cespira?

A: Development follows industry standard, with expected feedback from the OEM mid-2025.

Q: What are the capital needs for the Cespira joint venture?

A: Need additional capital next year as part of a 3-year build-out for the joint venture.

Q: When will High-Pressure Controls manufacturing be fully moved out of Italy?

A: Facilities in Canada and China are expected to be online by year-end, with a lower revenue run rate during the transition.

Q: What's the timing for potential deployment of the CNG solution?

A: Initial steps involve demonstration fleets, followed by commercialization after proving out.

Q: Is engineering revenue ongoing?

A: Yes, it's an ongoing revenue stream from development work for hydrogen systems, with R&D cash out before customer payments.