HYLN - Earnings call transcript Q4 2024

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Operator

Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hyliion Holdings 4Q 2024 Earnings Release. [Operator Instructions] I would now like to turn the call over to Greg Standley, Chief Accounting Officer. Please go ahead.

Greg Standley

morning, good and you, everyone. Thank Holdings Welcome Call. XXXX Conference Quarter to Hyliion Earnings Fourth

On our during regarding slide outlook. Thomas and are at forward-looking available the today call statements Relations Investor Healy, we conference and our website will Financial on certain Hyliion's this note Jon Chief business Chief call, Officer. the accompanies A that company's presentation investors.hyliion.com. Please call is today's Panzer, Officer; Executive make

based on statements anticipated are Forward-looking predictions, events other projections expectations about statements current are and assumptions. and that

subject such, factors this As statements materially and could cause to on are risks from uncertainties. actual call. made differ Many results to forward-looking

For more release as Commission. our such may from forward-looking the information statements, Securities filings please with as company's well the our that and press cause results refer Exchange to and materially both on differ to factors presentation

will are forward-looking on law. Thank update information undue unless cautioned required duty over statements and I turn put not applicable to You undertake no to Thomas. this now reliance by the call to we you.

Thomas Healy

Hello, us updates have we year that and Hyliion CFO, pleased exciting we fourth for Unit. Panzer. I'm of Today, number have This we Hyliion's joining notably, our by Jon joined time for for earnings Adopter call. delivered full is Customer XXXX and and to an announce quarter share. Most Early a significant you thank are our to first

complete we'll primarily aimed milestone last did cover late to call. initially this couple we today's a to due While of faced into on we XXXX year, it challenges shift that

is growing. customer generator and and technology in make interest our to with generator We testing progress continue validation

units. customers We LOIs for have executed XXX with nonbinding KARNO and more contracts than

the an power of KARNO years we the showcased supply center data call, sector of systems our last LOI to data ahead. On opportunity additional are first prime we pleased deployments for signed XX megawatts We in XXX have our X-shaft our site an or earnings up to KARNO centers, that X-shaft for to system. also share on in the

slide are as to presentation. genset what looks the present pleased we the enclosure like Now accompanying shown in

impressive footprint for a the the generator of of provide of power. is most KARNO One characteristics system to kilowatts XXX designed its compact

front power is it generator enclosure ideal which provides where similar and to enclosure plant enables it. The monitor customers arranged like a located. ability generator The remotely. is KARNO allowing radiators, ground interconnects handling above continuously the the EV offers for have of fans, ground controls The customers KARNO generator below and The mode operating and is is following type KARNO sources enclosure new designed levels of where also interface enable the to to generator the at functionality. being positioned and or can the transition to without to accordingly. The the learning modes the users detects the generator that fuel during the allows mixture the system output select fuel Since fuel be load at users designed On with such communicate DC connectivity, to above of enable and base are the rear with battery, generator used fuel for X-shaft seamlessly KARNO user agnostic, input. the is of with a to the operation cellular electricity adjusts support requiring air system fuel is balance enclosure of user as equipped an applications charging. cloud. This is control connection. The or the power to

to needs meet the power output to then AC customer inverter is AC, convert be electrical application. configured generator system. to which facility's into a is the used for Each will an XX-volt For intended needs, tied standard

initial launch. some be For and at features, performance deliveries, functions available will not characteristics

system connection enhancements validation, with added field customer testing as benefit that cellular we the and be as to continue via the product system We since feedback. One can is generator, we delivered have will be making over-the-air and software further many updates. trials enhancements we receive with

I'd like XXXX. for Now plans provide update our on an to

As last units our are early with customers. deployments first quarter, adopter we shared

will units initially be locations. our criteria, facility at further their deployed deployed application at others Some final validation, for be while will testing including customer-specific and

to Customer Units of Adopter XX deliveries through year, of additional these followed later the then middle plan is be approximately will Our in Early year. by deliver this the which

As and I that initial our sourcing supply some validation we mentioned part encountered time back to deployments earlier, challenges line. processing set testing and customer our chain and related impacted

up this production standing is processes on developing contract the we than design KARNO One the of are the electric our and the linear underway assembling manufacturer component motor for after assembly produced improving took and has production finalizing longer throughput. for now generator. We activities part. Transferring to the of learnings primary motor a components our manufacturer but in-house prototype anticipated, been contract initial working

Additionally, are and initial and of while additional generators was The as undergone system. performance we to powder the released have powder for following we in work operating enhancements identified parts metal slowly cleaning removal. residual that weren't being that were on improvements generator, metal cleaned sufficiently further traces the within printing. Parts powder being used to facilitate traced

This to the production we of in Customer recognize including end and and recognizing of KARNO the estimate the schedule the generators deliveries for R&D $XX ongoing in anticipate Early Early begin revenue year, number to year, continue, million commercializing $XX from which expect also a the sometime couple may if issues address includes of activities. the Customer system expect in the the also year we taking the volumes continue exciting dozen the some customers chain. We and for for sales units plan This we additive leaves to middle at support second of to throughout and XXXX. sale of Units associated deployments Adopter capacity the parallel, the generator with our supply will are testing determined generator year, learnings of other as the at R&D pace manufacturing our supply we with the includes and generate and new to actively plan delivery point have million ramp-up to now Early and Customer building our revenues deliver the between customer By Adopter base facility, in year. I'd sales. Overall, the use year, will half of ahead, arise. Later generator Adopter produced time higher we by to improving printing shift to Austin we updates. deployments unanticipated earlier services. revenue commercial of like we which This strengthening Looking production our Units the Units. In time generator and machines through of to operating they from delivery validating continue approximately parameters.

oil see units. and for have pleased for are share level exceeds generator interest demand KARNO charging, segments, to and XXXX contracts XXX applications, increasing our waste deployments KARNO now to gas now customer strong including the continue planned LOIs of over This gas We a establishes data foundation secured a and of we market well LOIs centers. EV for and for XXXX. These we variety that and span

generator The deploying approximately enclosure of of KARNO KARNO marine accounting that we up now expected excited for last KARNO are a This of executed is currently LOI to XX plans house Research XX Office plan megawatts also we deployments an with for we unveiled units are onboard one also generator the to quarter, the to X-megawatt of KARNO have and X-shaft past power U.S. X-megawatt more units LOIs. This with Navy system developers. than XXX to developing. systems I'm X share agreement X-megawatt XX units, the the to of have deployment opportunity quarter data Each the vessels. This includes that We targets data Naval equates units. as center LOI our a the under configuration. of multiyear center leading and a with XXX that of opportunity our in

in and compact are benefits working are redundancy develop emissions first and customers. The with are center low XXXX. as for X-megawatt the fuel-agnostic critical noise X-megawatt system added efficiency, low center constraints key high the where configuration We and space The capability maintenance considerations. data customer applications needs requirements, generator's we in closely are plan levels data and KARNO deployment this

We a we in the awarded strong were year, launch powering KARNO data for is the are firmly solution believe partner product the strong excited future. Late last for centers and to have generator X-megawatt a methane emissions reducing $X emissions to grant X the oil to up of reduction with the Energy of million deployment goal gas megawatts methane of of in sector. a support a Department and KARNO generators

working We with the be as are units excited to facilitator these for the customer of and Electrigen deployments. the

printer that up Al for key and a subject Khorayef offering we've are the recently deployment higher Saudi criteria the focus are of performance player XX in on signed the Khorayef is priority and intent play execution agricultural equilibrium agreements Similarly, LOI Arabia. updates KARNO we've a further of the and emissions M generator powering sector. lower LOIs market will and deployments a quarter, maintenance letters with Al and with our we our we data GE manufactured growth. delivery performance discussed remains capacity our role of contingent Scaling successful first of the took to additive Line key and manufacturing is on a some manufacturing deployments additive opportunity in leading generators nonbinding requirements. The efficiency to generator. Shifting agricultural binding provider in with customer in on early center now effort. Last KARNO farms Initial discussed advancements an this customers. to Finally, by of Aerospace. manufacturing

parts the be of first capabilities, these GE to one enhances existing machines system U.S. This production to machines. print to our to customer of as X many significantly next-generation are outside to We in us manufacturing additive proud our receive the Xx compared simultaneously allowing

printers will our M scale XXXX of we further Line order, We taking additional throughout capacity. have to delivery on which production be

This the our detail, am revenue $XXX capital. with anticipate services $XX the pleased with product. we Naval revenue will of launch of the with million will associated XXXX for $X.X as Research. We I strong with million. a This more contracts have use in balance the in we us in sheet KARNO KARNO And the U.S. that the R&D development recognizing work to approximately totaling Office XXXX. out Jon generator that related of share under is sustain generator quarter begun fourth to cash of closed for XXXX million commercial through positions us cover Lastly,

to turn Jon for the call financial will I over update. our Now

Jon Panzer

no fourth quarter was recorded the write-down driven by and were to revenue services for of sale related morning, powertrain Thomas, higher Research. Cost exit held in lower $XX,XXX Naval of during $X.X XXXX. Included quarter of good with are $XX.X research of XXXX $XXX,XXX operating the as was by well powertrain in expenses, to in was the of in we of announced the offset loss quarter spending XXXX. on fourth was gross fourth offset our $XX,XXX This income from million our partly expenses of million in and the expenses quarter contracts XXXX R&D other of quarter assets for which powertrain recorded $XX.X adjustment were In the sales compared during business $X.X mostly million, results, that termination the you, of a development along and and million revenue This for of XXXX we assets SG&A gains Starting powertrain sheet. sale quarter. as and discontinued as $X.X assets $XXX,XXX. million by Office cost fourth costs, of of expenses exit $XX.X balance termination million in the of with recorded previously lower of $X.X sales XXXX, the in Thank resulting a with $XX,XXX. Operating decrease million fourth everyone. and

million Our the exit compared total XXXX. in fourth of in and expenses sale costs, million quarter XXXX. from quarter compared $XX.X net to year Expenses the asset XXXX $XX.X $XX.X termination net was operating $XXX.X XXXX. down of in totaled million Full of million to in million $X for million, loss gains powertrain include $XX.X fourth

repurchases, the assets, As our wind-down into if to year, of as repurchased of is we continue or but to to may date aggregate which deemed early close cost repurchase for share XX.X powertrain complete, and activity close expect and we except we an suspended the out the XXXX. million largely shares resume XXXX. Also XXXX, expect program sale repurchasing upon do million a later in not ongoing for further at in appropriate. execute of May per We $X.XX $XX

sales Turning interest from of position. cash spent investment million net asset during to fourth quarter XXXX, We $XX.X and of receipts our and income. the

printing directed for spending mostly of and investments cash, the cash income. towards finished with million purchase balance activities For the of and full cash sheet. Breaking and machines were the million including $XX.X core year, $XXX.X net previously related development additive year, investments we cash million totaled our of the on and of full of uses KARNO year restricted of Capital million $XX.X used $XX.X investments on equipment. down interest

noted share we repurchases. As spent $XX million on earlier,

shutdown asset spent partially was million on $X.X $XX powertrain of we offset Finally, million sales. powertrain generated which activities, from cash by

Turning to XXXX.

between earlier, the in mentioned revenue, expectation this and $XX we and year customers. recognize Implicit of of revenue terms KARNO units. The as achievement include Thomas permitting sales will of performance As also including timing early of expect both generator in the from second terms million of R&D $XX when as assumption in adopter and commercializing to to of generator XXX-kilowatt KARNO revenue our generator customer expect to actual of operating sale These to commercialization. would is half as be criteria. recognition and generate services we certification the the million subject the well payments systems of the

in We to XXXX during of also the report expected development. the R&D gross phase margin the depending Our to is R&D may product components on services reported of commercialization sales timing positive current margin expensing of for positive. gross be purchase due for KARNO

We achieving scale continue and end KARNO our manufacturing for margins to generating outlook a gross will the is volume the breakeven expect as on drive quickly we out cash that basis system. Therefore, down roll X-megawatt as we production we current XXXX. of near costs

$XX expect increase We take XXXX higher as million and equipment up expenditures to printing of plan needed around be XXXX approximately KARNO with assets to $XX We $XX for to other that offset ramp financing. million million capital continue than delivery we production. additive will new generator of machines or that

expected With these are for total be equipment cash to XXXX, XXXX. assumptions, net financing our to outlays similar of

spent reminder, income. $XX we KARNO interest a XXXX capital development As million for of and in expenditures, generator net

around to million our cash $XXX end on with We and balance expect of XXXX investments sheet.

to sales. will for the continue be generator we we commercialization capital sufficient of on KARNO that hand foreseeable have future, including Finally, expect the the today

over the I'll to turn Now call Thomas. back

Thomas Healy

Hyliion, The of the past Customer been months Units few marked launch have by time Adopter program. an at Early official exciting our

We are for strong key a encouraged units the have from and deploying data the by space. secured are growing center and customers interest to excited our initial in partner

technology for on we'll XXXX our focus Q&A. our adopter Looking look early deployments, to pivotal be turn executing the the the updates next refining additional and as early and a of successful call preparation sharing on on manufacturing We deployments earnings ahead, year units forward we call. With XXXX. that, further scaling will to the over for of progress now program in back operator

Operator

[Operator call that Instructions] no It are Please appears there Thomas. ahead. to questions. I'll the hand go over

Thomas Healy

Thank you.

couple will a prior one for So us. had we the Greg that questions came call. to first the in of read

Greg Standley

and tell is about going unit? you adopter it more located? this who first And us Can to where early is it

Thomas Healy

Absolutely.

adopter is first U.S. unit early actually this to going So the Navy.

quarter extended we for that we you As recall, last contract had may $XX our another million. announced Navy

got the extended. the with going working and been this is it unit first now to we've multiple So And Navy Navy. for years then

goal as long-term Navy as ship to first recently It's KARNO generator the is that exciting well our both built generator actually vessels use Actually, the be putting stationary background, in KARNO bit relationship of pretty little just applications. received of we the photos military the a of we'll the presently. into. being in For with

then then from So outlined. the through be initial there, in it Ohio further units a be that testing, ship Navy stationary be initially protocols producing unit And going applications. That into great opportunity going further test will validation, has staying for we'll and both and here. will

Operator

comes of Our Milligan from the Janney. Sean line question with

Sean Milligan

the ability KARNO's made -- data seen deals you've some fuel guess, cells. comments fuel of to hydrogen center announce We've larger In against the KARNO cells, in kind for the Bloom space. compete I about past,

question. the cells? was us my kind prime I out in could if being these That's also? curious that landscape against fits of like first gensets seeing you how we're then remind in KARNO just competitive what So of centers fuel And announced nat gas power also larger are data of some

Thomas Healy

Absolutely.

So of backup And supply. have we're just to in it's I shift make to your own grid power this think power, and data onsite you're the touching the thread into centers, tap right? the past, seeing on been

Now really to for where shines. the extremely own prime it's make which that's moving power application, your us generator because exciting power, is KARNO

point, we working that with data they're Bloom Now centers. made have companies your announcements to seen like have

customer. deployments up they I to one a think recently, announced gigawatt with of

for as is, well. So forward what's benefits lot a that exciting us we more we see bring also like emissions those energy the forward new low alternative but bring aspect,

critical we well. we'd as benefits that competing the for data KARNO So generator, emissions. or then center natural the and And ultra-low more engines be as than low diesel fuel flexibility, the mentioned added even is very then have with which compact maybe compact the with conventional of the I before, maintenance gas space, the footprint

to interest by which So which when forward we're we those data space, tie center that with from established this then center we've megawatts a up to call, together, announced opportunity deployed the that is XX lot KARNO of in you seeing to we've same a all system. deploy highlighted get today's that multiyear And a on X-megawatt the LOI, customer of coming is could first LOI generators. partner be data outlined to that

Sean Milligan

crossover of nat like in way pricing gas Is center the some Great. space might genset? have about data be the gas a more KARNO there traditional the nat gensets to a for KARNO happens, think Okay. to beneficial of where maybe kind versus where than it the or

Jon Panzer

Yes.

it. So just to to put some numbers

is, nat those the cells, Then power in the to -- are look of somewhere we're those gas for could per of usually $X,XXX be fuel be middle you kilowatt. engine in $X,XXX said X conventional around at of to prime between seeing could a pricing. our kilowatt. What $X,XXX we're when between on that's So -- we've per kind $X,XXX

to where long fuel terms upfront to but the at that's what be a economical run. the less than right? about, we players. And the They're conventional are less is capital shine see cell ROI, really customers going care though, we a this we and about in I think frankly, premium of the cost, engine, So more where about worried in

in And these usually XX-plus like gas which looking lower be we're compelling, would so natural we to at for that, especially a since these that the able as they efficiency a provide years, deployed. that expect to superior well ROI conventional maintenance pretty XX-plus engine having have assets as to looks programs, to drives compared of years where some are addition

Sean Milligan

you to scale kind the talk just prints as ability with thought, like ramp quickly, just ] how line and you printer [ have scale mentioned of that so you you're on of one, operable? then the to stay and And as of additive cost? And Okay. customer. mean, of you I mentioned move two, XX a new center printers, down order printing, them you up currently the about get megawatts impact the and the quickly printers visibility can new how in you that your your what Can costs. using there you GE to multiple drive pathway that the like data potentially to can terms

Jon Panzer

Yes.

So of a layers there. couple

terms So answer first. in part last -- the I'll

with our to already give And assets printers to of GE, think that, getting on is to it it more lead visibility capacity. in the for XXXX. to on better on in printing XX we you'd the Obviously, XXXX, probably supplier way will we can order additional be more you help us when from order we to throughout Line scaling as off have for So which when times. are best more X months that the then about M capacity these

I different -- of cost X into would it buckets. Now in put terms down, break

is is touched produce you printers how units. which these can So the fast first what on,

many M generations with is thing compared still So great, past and as of M technology technology. that once great are operating now we printer anywhere to to this compared at as from it's print can Xx the but X past the still the Line Line to parts

be a us increase time able to allows that the line map then its be road and how same to continue will So of have throughput. increase we throughput. But M that to from thing to is over other improved already modified that nice GE printer,

So as we not go has manufacturing a see scaling but forward. capabilities us only platform for that faster because today, then we great it up is as for it

is with And The probably second I would end greater agreements actually driving presently We kind of because position the been just cost R&D our though, our is our supply that aspect now coming from of commitments, I levels. actually than we're on cost side buying on cost more is working printer actually an throughput. need our to going components base. of sort with cost in move into printer that's savings right of where that say okay already we've volume of to down, down. And at think the see focus we're having initial where just suppliers,

Sean Milligan

more if I a And more. there's couple any not questions, have

Thomas Healy

Sure.

So another came question we've in beforehand. that got

Greg Standley

the opportunity? an announced will And East first You Could share Middle you Khorayef. international Al about with LOI more deployment? be your this

Thomas Healy

Yes.

player So Al leading to dominant space. in as is Khorayef of as this. agricultural the provider have Middle a East we're the generators a excited in well announced

initial so be to applications as will in being used And well as prime applications farm provide these other power. gensets

engines, we exciting off East. diesel to about entire already what's where for just engines were was they in a XX facilities before instances, recently facility grid get a heard interconnect. some diesel And compared trip them. And that a this is, U.S. then Middle generators operating very over story did warehouse to different years was connected to most Now able of is customer to a have what the of the the I

also so very that's And different.

already And using used so is using to generators. engines, the region

to it on And goals forward the maintenance, levels like move solution of use so region. that but you're only generators LPG plant, of or a this us being future so but -- like fuel also meet give looking diesel has to to and is them or to small region kind allows think the we there, this that the a and scale costs, has able operating deploying a lower flexibility the to that not lower KARNO bringing plant, as fuels modular power power of doing performance about fuels

excited something it's So we're about.

In for addition Hong LOI also announced that, would to which Kong. we Jardine, be an with have

see we then extremely So this for technology. And Sean. international to being markets hand back call the we'll promising over as

think said had questions. you you I additional some

Sean Milligan

I a recently You some capturing prime a service deal there is they and the they're contract side. more operating type Accelerus customer was maintaining gen because all kind where power curious the on of power [ economics JV formed signed KARNO, data ] center and of there? the with

So it some just, I think about moving about data forward kind for Is there? other with just model business centers. guess, should thoughts of the that sales? there we Or is stream revenue

Thomas Healy

Yes.

So established space maintaining be want generators to Long-term, partner in going and with the are them who and/or to to would they have that we're take with that as beginning, that are maintenance the the working interest end want it's take us on the others of expressed the these some customers in that maintenance potentially would on have well. we out in though, already field.

with to that. will set U.S. in long-term, short-term, doing globally on all as it to opposed of facilities to business that others us the up brick-and-mortar So work to well. as or having us be we the take But want would across the part

Sean Milligan

process go would of that into adopter field? great. terms Just out did at before of chain operating issues the have How supply thought Okay. kind just worked And just issues be the through of confidence long any those. kind you've contract system that and your like there mentioned working the and manufacturer they you then -- early you facilities through up powder metal confidence some issue, then ramping in

Thomas Healy

Yes, absolutely.

color faced So to both maybe this to of just the challenges past we that add quarter.

of call, on for actually generator the in coils, produce magnets this the electricity. linear that center the clarity So the anyone electric the just KARNO on is motor, for the so

and this in-house and the is things to initial through. process to unfortunately, a we we IP to generators anticipated, Now made, some electric components motor. We needed that Hyliion's that that solution. were we decided than linear But for used -- shift that manufacturer. Hyliion a produced longer just And work we process took designed, there contract actually, the

of And then what and a contract so unit. And We production. was manufacturer ] early the the units deliveries getting -- adopter us which of that's LEMS delivery getting end, [ 'XX, them. we not in shifted started push-out from early that first until started initial from so from the

and process the the part in of so using to I residual to more means The up was powder goal things, trapped parts. metal it. lot were the that of the what in what quarters throughput. And there's found is, then sufficiently. and getting that the a of it the we're producing And what's powder taking remove so so that's But And going think here before the welding we some metal good powder be that around we part over you need we color de-powder and weren't is able extract with out bit to metal familiar who's side anyone a a ahead for you're additive printing, there. on little shape months scaling basically not

changed the go can even enhancements, opportunities cleaning cleaning even changes, we where we then we process. But our do improve some So we part as see still, further forward.

shipping been a have parts where to will to we've that's So we to able happen, units. enough to start clean the something sufficiently these continue but that point gotten

go So hopefully, encountered the had. now, we'll to as that We ready. position on that's we we're we refining some early but forward. Great. of we what getting on helpful in units kind questions believe believe them as continue I a background work these we're good concludes

adopter the out and get A ahead the on to the to for early continue over excited going this update I how excited everyone -- next you earnings to the today's to the here quarter, months then deployments So those deliver appreciate all are as and initial unit quarters joining. early and joining call over past there, to you Thank extremely progress additional of lot systems. units continue adopter performance to call. to of

Operator

today's that for call. gentlemen, all joining. Ladies and concludes you Thank

disconnect. now may You

Hyliion (HYLN) 26 Feb 252024 Q4 Earnings call transcript