BLDP

Definitive Agreement to Acquire GeoPura

• Ballard has signed a definitive agreement to acquire UK-based GeoPura, a horizontally integrated hydrogen energy company, for an upfront purchase price of 275 million pounds. Closing is expected in the second half of 2026 (targeting September) pending customary closing conditions and regulatory approvals. GeoPura is already profitable on a clear trajectory and will strengthen Ballard's path to profitability by the end of 2027.
• GeoPura designs, manufactures, and rents hydrogen power units (HPUs) that use Ballard fuel cell engines, and also produces and distributes green hydrogen, delivering an end-to-end energy-as-a-service (EaaS) solution. The acquisition is transformative for Ballard, expanding it from a component supplier to a full value chain integrated player.
• Strategic benefits of the combination are summarized by the '3, 5, 10, Now' framework:
  • 3X revenue growth: GeoPura's high-growth business is expected to triple the combined company's baseline organic growth rate, with additional upside from cross-selling, new markets (including data centers and North American expansion), and scaled hydrogen production.
  • 5X value capture: Vertical integration expands value capture per deployed megawatt to over 75% of total value chain, up from approximately 15% for standalone fuel cell engine sales, creating high-margin recurring revenue.
  • 10X total addressable market: Expansion beyond heavy-duty mobility into a $300 billion installed base of diesel gensets, $16 billion annual replacement market, $4 billion data center backup power market, and $20 billion hydrogen supply market.
  • Cost parity now: GeoPura's HPUs already achieve cost parity with diesel gensets in markets with supportive policy (such as the UK HAR program), with further cost reductions expected from scale and integration.
• GeoPura has a proven operating track record, with an operating fleet of over 60 HPUs, the largest hydrogen distribution fleet in the UK, and blue-chip customers including live event producers and the Lower Thames Crossing construction project. The HPU business has a 15-year asset life and a capital payback period under 3 years, creating a self-reinforcing profitable growth model.
• 25 million pounds of annual run-rate EBITDA synergies are expected by 2028 from joint manufacturing, supply chain integration, vertical integration cost cuts, and cross-selling.

Q2 2026 Operational and Financial Progress

• The company continued progress toward its goal of profitability by the end of 2027, delivering another quarter of improving gross margins and lower year-over-year operating expenses and cash burn.
• Gross margin improvement was driven by product cost reduction initiatives, lower manufacturing overhead, and one-time warranty provision reversals stemming from demonstrated higher-than-expected reliability and durability of Ballard fuel cell engines in the field, with underlying performance improvements expected to support ongoing margins.
• Ended the quarter with $502 million in cash and cash equivalents, maintaining a strong balance sheet with significant liquidity and no near-term financing requirements.

• Ballard maintains its prior policy of not providing specific full-year revenue, net income, or margin guidance given the early stage of hydrogen market development.
• Full-year 2026 revenue is still expected to be roughly 60% back-half weighted.
• Full-year 2026 total operating expenses are guided to be between $65 million and $75 million, and capital expenditures are expected to be between $5 million and $10 million.
• Management will update full-year guidance after closing the GeoPura acquisition, which is anticipated in the second half of 2026.

Total company revenue for Q2 2026 was $20.6 million, representing 15% year-over-year growth. Growth was driven by increases across three core market segments: transit bus, stationary power, and materials handling. No separate revenue breakdowns or contribution percentages were provided for individual segments. Order intake for the quarter exceeded $64 million, led by transit bus market wins and a multi-year order for over 150 fuel cell modules from GeoPura. Gross margin for the quarter was 20%, a 28 percentage point improvement from negative 8% in Q2 2025. Total operating expenses were $20.9 million, a 34% year-over-year reduction. Adjusted EBITDA was negative $9.8 million, compared to negative $30.6 million in the prior year quarter. Cash used in operating activities was $11.4 million, down from $20.3 million in Q2 2025.

• Completion of the GeoPura acquisition is subject to unmet customary closing conditions and regulatory approvals, which may delay or prevent closing.
• Actual results of the acquisition, including projected growth, synergies, and profitability, may differ materially from management's current expectations due to integration challenges, market adoption risks, and unforeseen operational issues.
• Expansion into the North American HPU and hydrogen market may face unforeseen regulatory, competitive, or customer adoption barriers that slow growth projections.
• Development of larger HPU solutions for high-power applications such as data centers carries technical and cost execution risk.

Q: What is Ballard's plan for entering the North American HPU market, and will the existing GeoPura EaaS rental and fuel model be replicated there? / A: Ballard will leverage GeoPura's existing multinational customers that already operate in North America to launch deployments, starting with the high-demand market segments of film/live events and large construction that have already driven GeoPura's success in the UK. The full energy-as-a-service model, combining HPU rentals and green hydrogen supply, will be replicated in North America, with long-term plans to become a major green hydrogen supplier via both integrated production and partnerships.