On November 8, 2023, Hyliion Holdings Corp (HYLN, Financial), a developer of electric powertrain and generator technologies, announced its third-quarter financial results for 2023. The company revealed a significant strategic shift, deciding to focus on the KARNO generator and wind down its powertrain operations. This move is aimed at preserving the company's financial stability and aligning with the growing demand for electricity generation solutions.
Strategic Shift and Powertrain Business Transition
Hyliion has completed the commercialization steps for its Hypertruck ERX powertrain, including receiving CARB certification and launching extended fleet trials. However, the company faced challenges such as lower-than-expected industry adoption rates, rising component costs, and evolving regulatory requirements. As a result, Hyliion's Board of Directors engaged expert advisors to explore strategic alternatives for the powertrain business. The decision to discontinue the powertrain business and focus on the KARNO generator is seen as a necessary step to maintain financial stability in the current economic climate.
The decision around our powertrain business was very difficult, but we believe it is a necessary step to safeguard our financial stability, especially given the current economic climate," said Hyliion’s Founder and CEO, Thomas Healy. "Our focus on KARNO aligns with the growing demand for electricity. With commercial deliveries planned for the upcoming year, the KARNO generator offers a more capital-efficient path to market," added Healy.
KARNO Generator Development and Commercialization
Hyliion remains committed to the KARNO generator's ongoing commercialization, having made substantial progress in development and validation. The company has successfully delivered power to the grid, executed customer showcases, and performed simulations indicating that the production unit design will meet power, efficiency, and emissions objectives. Hyliion anticipates its first revenue-generating deployments of the KARNO generator to occur in late 2024 and is in discussions with inaugural customers.
Financial Performance and Outlook
Hyliion reported third-quarter operating expenses of $33.3 million, a significant reduction from the $62.9 million in the prior-year quarter, which included one-time expenses associated with the purchase of KARNO generator technology. The net loss for the quarter was $30.3 million, with a basic and diluted net loss per share of $0.17. The company ended the quarter with $324 million in cash, short-term, and long-term investments. Hyliion provided forward guidance for 2023, expecting full-year operating expenses of approximately $140 million, including expenses associated with winding down powertrain operations. The company anticipates no additional revenue from powertrain sales in 2023 and projects a year-end cash and investments total of approximately $285 million. The cash burn for 2024 is projected at approximately $40 million, excluding potential revenues or monetization of powertrain assets or technology.
Hyliion's strategic reorientation towards the KARNO generator reflects its commitment to creating innovative solutions for clean, flexible, and affordable electricity production. With a strong cash position and a clear focus on a capital-efficient path to market, Hyliion is poised to address the commercial space with its locally-deployable generator and explore future mobile applications.
For more detailed information on Hyliion's financials and strategic direction, investors and interested parties are encouraged to visit www.hyliion.com and review the company's filings with the SEC.
Explore the complete 8-K earnings release (here) from Hyliion Holdings Corp for further details.
