Westport Fuel Systems (WPRT) Q2 2026 earnings summary

Executive summary

• Cespira, the joint venture, achieved 125% year-over-year revenue growth in Q2 2026, driven by strong demand for LNG HPDI trucks and increased customer orders, with gross profit up 298%.

• Signed a hydrogen engine development agreement with Volvo Trucks, targeting a European launch before 2030, reinforcing HPDI technology's relevance for hydrogen, natural gas, and RNG.

• Completed a $10 million financing round in June, with potential for an additional $10 million via warrants, strengthening liquidity and supporting strategic priorities.

• Regulatory developments in the EU and commercial momentum in LNG-powered heavy-duty trucks are supporting adoption and growth.

• Progress with a second OEM, with larger field trials planned following successful initial trials.

Financial highlights

• Cespira JV revenue surged 125% year-over-year to $27.1 million, with gross profit up 298% to $3.8 million (14% margin); net loss reduced by 65% to $2.4 million.

• Product revenue rose 127% year-over-year to $18.9 million in Q2 2026, driven by Cespira's growth.

• Aftermarket revenue increased to $5.5 million from $2.6 million, and service revenue reached $2.6 million, up from $1 million in Q2 2025.

• Cash and cash equivalents stood at $23.9 million at quarter-end, with long-term debt reduced to $1.0 million.

• Net loss from continuing operations increased to $11.4 million from $5.1 million year-over-year, primarily due to warrant liability changes, financing costs, and foreign exchange losses.

Outlook and guidance

• Cespira is expected to reach break-even in 2027, with capital contributions decreasing as volume grows.

• Management projects current cash will not be sufficient to fund operations through the next twelve months, raising substantial doubt about going concern status.

• Anticipates continued revenue growth as manufacturing bottlenecks are resolved and demand backlog is fulfilled.

• High-pressure CNG solution is gaining traction in North America, and further growth is expected as regulatory and market conditions remain favorable.

• Management is evaluating options to improve liquidity, including raising funds or borrowing, but outcomes are uncertain.