Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hyliion Holdings Corp (HYLN, Financial) successfully delivered its first early adopter customer unit, marking a significant milestone.
- The company has executed contracts and non-binding LOIs for over 100 Karno units, indicating strong customer interest.
- Hyliion Holdings Corp (HYLN) secured a $6 million Department of Energy grant for methane emissions reduction, supporting further deployments.
- The company has begun recognizing revenue for R&D services related to the KARNO generator, totaling $1.5 million in Q4 2024.
- Hyliion Holdings Corp (HYLN) has a strong balance sheet with $220 million in capital, positioning it well for future growth and commercialization efforts.
Negative Points
- The delivery of the first early adopter unit was delayed into 2025 due to supply chain and part processing challenges.
- Initial customer deployments were impacted by issues with supply chain sourcing and part processing, affecting testing and validation timelines.
- Residual metal powder issues were identified in the generator system, requiring additional cleaning and enhancements.
- The company anticipates cash use of approximately $60 million for 2025, which could impact financial flexibility.
- Hyliion Holdings Corp (HYLN) reported a net loss of $14.4 million for Q4 2024, reflecting ongoing financial challenges.
Q & A Highlights
Q: Can you tell us more about this first early adopter unit? Who is it going to and where is it located?
A: The first early adopter unit is going to the US Navy. We've been working with the Navy for several years, and this unit will initially stay in Ohio for further testing and validation. The long-term goal is to use the KARNO generator in military vessels and stationary applications. (Thomas Healy, CEO)
Q: How does the KARNO generator compete against fuel cells and other power solutions in the data center space?
A: The KARNO generator offers a compact footprint, fuel flexibility, ultra-low maintenance, and low emissions, making it competitive against fuel cells and traditional natural gas or diesel engines. We've secured a partner for deploying our two-megawatt system in data centers, with a potential for up to 70 megawatts of deployments. (Thomas Healy, CEO)
Q: Can you discuss the pricing of the KARNO generator compared to traditional gensets and fuel cells?
A: Conventional natural gas engines cost between $1,000 to $1,500 per kilowatt, while fuel cells are around $3,000 to $3,500 per kilowatt. The KARNO generator is priced in between these two. Despite a higher upfront cost than conventional engines, the KARNO generator offers superior efficiency and lower maintenance, providing a compelling ROI over the long term. (Thomas Healy, CEO)
Q: What is the impact of the new GE additive printer on production costs and scalability?
A: The new GE M-line printer can produce two to four times as many parts simultaneously compared to previous technology, enhancing throughput. We have more printers on order for 2025 to scale capacity for 2026. Cost reductions will also come from working with suppliers to lower component costs. (Thomas Healy, CEO)
Q: Can you share more about the LOI with Al Korea and your plans for international deployment?
A: Al Korea is a leading generator provider in the Middle East, and the initial KARNO units will be used in farm applications. The Middle East is accustomed to using generators, and the KARNO generator offers lower operating costs and fuel flexibility, aligning with regional goals. We also have an LOI with Jardine for Hong Kong, indicating strong international market potential. (Thomas Healy, CEO)
Q: Will Hyliion maintain the KARNO generators, or will there be service contracts?
A: Initially, Hyliion will maintain the generators. Long-term, we aim to partner with established service providers or customers to handle maintenance, avoiding the need to set up facilities globally. (Thomas Healy, CEO)
Q: How confident are you in resolving the supply chain and metal powder issues?
A: We've started production with our contract manufacturer for the linear electric motor, and we're scaling throughput. For the metal powder issue, we've improved our cleaning process and are making part enhancements. We're confident in our current position and will continue refining as needed. (Thomas Healy, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
