Westport Fuel Systems reports first quarter 2025 financial results

Westport Fuel Systems Inc. (“Westport") (TSX:WPRT / Nasdaq:WPRT) reported financial results for the first quarter ended March 31, 2025, and provided an update on operations. All figures are in U.S. dollars unless otherwise stated.

“We continue to make significant strides in transforming Westport and sharpening our strategic focus. Our priorities remain clear: driving success through Cespira, our HPDI joint venture with Volvo Group; pursuing operational excellence through initiatives to streamline processes and reduce costs; and positioning Westport at the forefront of the alternative fuel shift.

These priorities are guiding us as we work towards a brighter future. We're seeing the impact of our efforts in our recent results – we significantly improved our net loss to $2.5 million in Q1 of 2025 from a net loss of $13.6 million in Q1 of 2024. This was supported by a $3.5 million increase in gross profit and an $8.1 million decrease in operating expenses. We also reported a substantial improvement in adjusted EBITDA as compared to the same period of the prior year.

Looking to the future, with the announcement of the proposed sale of our light-duty business, Westport is realigning to focus on the hard-to-decarbonize applications primarily in long-haul and heavy-duty trucking where our unique HPDI and high-pressure technologies offer significant growth potential. Critically, this transaction is designed to provide immediate cash proceeds that bolster our balance sheet and fund growth opportunities in Cespira and the High-Pressure Controls & Systems business.

Now, the conversation has changed. Our attendance at the Advanced Clean Transportation Expo or ACT Expo, the largest showcase of clean transportation technologies in North America, validated our view that the market recognizes that the internal combustion engine utilizing alternative fuels is an affordable solution that also decarbonizes long-haul, heavy-duty transport. Westport is the clean-tech innovation company to help drive this change. Through Cespira, the HPDI fuel system does the on-engine work to our High Pressure Controls and Systems business where our components do the off-engine work we are providing OEMs with simplified solutions to decarbonize.

Volvo recently highlighted that demand for their gas-powered trucks that utilize HPDI technology has been increasing, with sales up more than 25% in 2024, a trend that we saw continue into Q1 with Cespira delivering improved revenue driven by increased volumes as compared to Q1 of 2024. While we remain focused on scaling our alternative fuel solutions, including LNG, CNG, RNG, and hydrogen systems, we are matching the cleanest gaseous fuels with the most efficient engine technologies. We are committed to delivering practical, commercially viable low-carbon solutions today and providing sustainable, high-performance solutions that help our customers achieve their goals now and for years to come."

Dan Sceli, Chief Executive Officer

Q1 2025 Highlights

• Revenues decreased 9% to $71.0 million compared to the same period in 2024, primarily driven by decreased sales volumes in our Heavy-Duty OEM and High-Pressure Controls & Systems segments. This was partially offset by increased sales in our Light-Duty segment in the quarter. In Q1 2024, our Heavy-Duty OEM segment included the financial results of the HPDI business which are now accounted for as part of the Cespira joint venture.

• Net loss of $2.5 million for the quarter compared to net loss of $13.6 million for the same quarter last year. The decrease in net loss was driven by a $3.5 million increase in gross profit, decrease in operating expenditures by $8.1 million; change in foreign exchange gain or loss by $2.3 million and an increase in loss from investments accounted for by the equity method of $3.8 million.
• Adjusted EBITDA[1] of nil compared to negative $6.6 million for the same period in 2024.
• Cash and cash equivalents were $32.6 million at the end of the first quarter. Cash used in operating activities during the quarter was $4.9 million with net cash used by working capital of $8.1 million, partially offset by operating income of $1.7 million. Investing activities included the collection of $10.5 million in a holdback receivable related to our previous sale of CWI to Cummins in 2022, capital contribution into Cespira of $4.7 million and purchase of capital assets of $3.1 million. Cash used in financing activities was attributed to net debt repayments of $3.9 million in the quarter.

[1] Adjusted earnings before interest, taxes and depreciation is a non-GAAP measure. Please refer to NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation.

Consolidated Results							Over /
($ in millions, except per share amounts)							(Under)
	1Q25			1Q24			%
Revenue	$	71.0		$	77.6		(9	)%
Gross Profit(2)		15.2			11.7		30	%
Gross Margin(2)		21	%		15	%
Income (loss) from Investments Accounted for by the Equity Method(1)		(3.8	)		—		(100	)%
Net Loss		(2.5	)		(13.6	)	82	%
Net Loss per Share - Basic		(0.14	)		(0.79	)	82	%
Net Loss per Share - Diluted		(0.14	)		(0.79	)	82	%
EBITDA (2)		(0.1	)		(9.2	)	99	%
Adjusted EBITDA (2)		—			(6.6	)	100	%

(1) This includes income or loss primarily from our investments in Cespira and Minda Westport Technologies Limited
(2) Gross margins, EBITDA and Adjusted EBITDA are non-GAAP measures. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES for the reconciliation to equivalent GAAP measures and limitations on the use of such measures.

Segment Information

Light-Duty

Revenue for the three months ended March 31, 2025 was $64.2 million compared with $63.3 million for the three months ended March 31, 2024. Light-Duty revenue increased by $0.9 million compared to the prior year and was primarily driven by increase in sales in our light-duty OEM and DOEM businesses. The light-duty OEM business had an increase in sales from its Euro 6 program compared to the prior year. In the first quarter of 2024, DOEM had a significant decrease in sales to a customer. This was partially offset by lower sales in our IAM, electronics and fuel storage businesses compared to the prior year.

Gross profit for the three months ended March 31, 2025 increased by $1.6 million to $14.0 million, or 22% of revenue, compared to $12.4 million, or 20% of revenue, for the same prior year period. This was primarily driven by a change in sales mix with an increase in sales to European customers and a reduction in sales to developing regions.

High Pressure Controls & Systems

Revenue for the three months ended March 31, 2025 was $1.4 million compared with $2.4 million for the three months ended March 31, 2024. The decrease in revenue for the three months ended March 31, 2025 compared to the prior year was primarily driven by the hydrogen industry slowdown impacting demand for hydrogen components.

Gross profit for the three months ended March 31, 2025 decreased by $0.2 million to $0.2 million, or 14% of revenue, compared to $0.4 million, or 17% of revenue, for the same prior year period. This was primarily driven by lower sales volumes increasing the per unit manufacturing costs in the quarter.

Heavy-Duty Original Equipment Manufacturer ("OEM")

Revenue for the three months ended March 31, 2025, was $5.4 million, compared to $11.9 million for the prior year. The decrease in revenue for the three months ended March 31, 2025, is a result of the continuation of the business in Cespira. The revenue earned in the current quarter was from our services provided under the transitional service agreement with Cespira that is expected to end by Q2 2026.

Gross profit for the three months ended March 31, 2025, increased by $2.1 million to $1.0 million, or 19% of revenue, compared to negative $1.1 million or negative 9% of revenue, for the same prior year period. The Heavy-Duty OEM segment received $0.9million in credits from component suppliers for inventory sold in the quarter.

Selected Cespira Statements of Operations Data

We account for Cespira using the equity method of accounting. However, due to its significance to our long-term strategy and operating results, we disclose certain Cespira's financial information in notes 7 and 17 of our interim financial statements for the three months ended March 31, 2025.

The following table sets forth a summary of the financial results of Cespira for the three months ended March 31, 2025.

(in millions of U.S. dollars)		Three months ended March 31,								Change
			2025				2024			$				%
Total revenue		$	16.7			$	—			$	16.7			—	%
Gross profit		$	0.5			$	—			$	0.5			—	%
Gross margin1			3	%			—	%
Operating loss		$	(7.1	)		$	—			$	(7.1	)		—	%
Net loss attributable to the Company		$	(3.9	)		$	—			$	(3.9	)		—	%

1Gross margin is non-GAAP financial measure. See the section 'Non-GAAP Financial Measures' for explanations and discussions of these non-GAAP financial measures or ratios.

Revenue

Cespira revenues for the three months ended March 31, 2025, were $16.7 million. In the prior year, the Heavy-Duty OEM segment, which included our HPDI business, had revenues of $11.9 million. This was primarily driven by an increase in HPDI fuel systems sold in the period.

Gross Profit

Gross profit was $0.5 million for the three months ended March 31, 2025. In the prior year, the Heavy-Duty OEM segment had negative $1.1 million in gross profit primarily driven by the increase in sales volumes compared to the prior year and reductions in manufacturing cost.

Operating loss

Cespira incurred operating losses of $7.1 million for the three months ended March 31, 2025. Cespira continues to incur operating losses as it scales its operations and expand into other markets.