Westport Fuel Systems (WPRT) Q2 2025 Earnings Call August 12, 2025 10:00 AM ET Speaker0Thank you for standing by and welcome to the Westport Fuel Systems Second Quarter twenty twenty five Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Ashley Newell, Vice President of Investor Relations. Please go ahead ...

NASDAQ: WPRT, TSX: WPRT August 11, 2025 Q2 2025 Results Driving Cleaner Performance Westport Fuel Systems Disclaimer and Forward-Looking Statements This presentation contains forward-looking statements, including statements regarding, future revenue expectations, future growth in markets, future of our development programs (including those relating to HPDI and Hydrogen), the global demand for our HPDI joint venture's products, the future success of our business and technology strategies, the future role of ...

Core Insights - Westport Fuel Systems Inc. reported a significant strategic transformation, highlighted by the divestiture of its Light-Duty Segment, which enhances its balance sheet and focuses on commercial transportation and industrial applications [2][13][4] Financial Performance - Revenues for Q2 2025 decreased by 11% to $12.5 million from $14.1 million in Q2 2024, primarily due to reduced sales volumes in High-Pressure Controls & Systems and Heavy-Duty OEM segments [6][21] - The company experienced a net loss from continuing operations of $5.1 million in Q2 2025, compared to a net income of $4.1 million in the same quarter last year [6][21] - Adjusted EBITDA improved to negative $1.0 million from negative $2.0 million in Q2 2024 [6][21] Strategic Focus - The company is concentrating on two main growth areas: Cespira and High-Pressure Controls & Systems, with Cespira gaining traction in Europe for trucks equipped with its fuel system [3][10] - Westport aims to leverage its core competencies in heavy-duty transportation and fuel-agnostic systems to reduce total cost of ownership and GHG emissions [7][4] Market Dynamics - Cespira's HPDI fuel system technology is gaining momentum in Europe, with a 25% growth in truck volumes in 2024, and is expanding into markets like India, South America, Africa, and East Asia [8][17] - The company is also focusing on the hydrogen market, particularly in China, where it plans to open a Hydrogen Innovation Center to meet increasing demand for hydrogen transportation solutions [12][11] Operational Changes - Westport is relocating its European manufacturing operations to Canada to align with its innovation hub, enhancing product design flexibility and speed to market [14] - The divestiture of the Light-Duty segment has allowed the company to reduce its outstanding debt by approximately $24.3 million, improving its financial position [13][6] Future Outlook - The company anticipates that the demand for CNG, LNG, and RNG in heavy-duty transportation will continue to grow, supported by favorable pricing and regulatory environments [10][19] - Westport's strategic initiatives aim to capture market share and improve financial results, despite the challenges posed by market conditions [15][16]

Core Viewpoint - Westport Fuel Systems Inc. has successfully closed the divestiture of its Light-Duty Segment, allowing the company to focus on higher-growth opportunities in the heavy-duty and industrial applications market [1][2][3]. Transaction Details - The Light-Duty Segment was sold to Heliaca Investments for a base price of approximately $79.5 million (€67.7 million), with potential earnouts of up to $3.9 million (€3.3 million) based on future performance [2]. - The transaction includes the sale of Westport Fuel Systems Italia S.r.l., which encompasses various Light-Duty OEM and aftermarket businesses [2]. Strategic Vision - The divestiture is seen as a pivotal step in strengthening the company's balance sheet and sharpening its focus on larger, higher-growth opportunities [3][4]. - Westport aims to provide economical solutions for heavy-duty and high horsepower commercial mobility, emphasizing decarbonization in these segments [3][5]. Market Positioning - The company recognizes the shifting transportation landscape and increasing customer demand for cleaner and more sustainable solutions [5]. - Westport is positioned to leverage its strengths in fuel-agnostic, high-pressure fuel systems to meet growing market demand [5][8]. Future Focus - Westport is initiating a comprehensive internal review to maximize economic benefits from the recent transaction and will provide further insights during the upcoming Q2 financial results conference call [6]. - Key priorities include strategic market expansion, technology leadership in heavy-duty transportation, and balancing opportunities with dynamic market conditions [8].

Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks with recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify opportunities [3] Group 2 - Westport Innovations (WPRT) has shown a price increase of 2.6% over the past four weeks, indicating growing investor interest [4] - WPRT has gained 1.5% over the past 12 weeks and has a beta of 2.92, suggesting it moves significantly more than the market [5] - WPRT has a Momentum Score of A, indicating a favorable time to invest based on its momentum characteristics [6] Group 3 - WPRT has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.17, indicating it is undervalued at 17 cents for each dollar of sales [7] - WPRT is positioned for significant growth potential while maintaining a reasonable valuation [8] Group 4 - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [9]

Financial Results Announcement - Westport Fuel Systems Inc. will release Q2 2025 financial results on August 11, 2025, after market close [1] - A conference call and webcast to discuss the financial results will be held on August 12, 2025, at 10:00 a.m. ET [2] Light-Duty Divestment Transaction Update - The company reaffirms its commitment to the sale of its Light-Duty Segment to Heliaca Investments, with the closing expected in July 2025 [3] - The revised timeline for the transaction reflects an updated regulatory review process [3] Company Overview - Westport Fuel Systems is a leading supplier of advanced fuel delivery components for clean, low-carbon fuels, serving the global transportation industry [4] - The company operates in approximately 70 countries and is headquartered in Vancouver, Canada [4]

It has been about a month since the last earnings report for Westport Innovations (WPRT) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Westport due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then? ...

Core Points - Westport Fuel Systems Inc. held its Annual General and Special Meeting of Shareholders virtually, where all resolutions were approved, including the election of directors and the sale of Westport Fuel Systems Italia S.r.l [1][2]. Summary by Category Election of Directors - All nominated directors were approved with varying levels of support: - Michele Buchignani: 81.22% votes for - Anthony Guglielmin: 87.16% votes for - Daniel M. Hancock: 61.47% votes for - Daniel Sceli: 91.10% votes for - Karl-Viktor Schaller: 61.28% votes for - Eileen Wheatman: 81.43% votes for [2]. Appointment of Auditors - KPMG LLP was appointed as the Company's auditors for the fiscal year with 93.83% votes for [2]. Executive Compensation - The advisory vote on executive compensation received 52.87% agreement [2]. Sale of Subsidiary - The sale of Westport Fuel Systems Italia S.r.l was approved with 83.38% votes for [2]. Company Overview - Westport Fuel Systems is a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels, serving approximately 70 countries globally [3].

Company Performance - Westport Innovations (WPRT) reported a quarterly loss of $0.14 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.47, and an improvement from a loss of $0.79 per share a year ago, indicating an earnings surprise of 70.21% [1] - The company posted revenues of $70.96 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.51%, and down from $77.57 million in the same quarter last year [2] - Over the last four quarters, Westport has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Outlook - Westport shares have declined approximately 19.1% since the beginning of the year, contrasting with the S&P 500's decline of -0.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.39 on revenues of $77.07 million, and for the current fiscal year, it is -$2.42 on revenues of $153.71 million [7] - The estimate revisions trend for Westport is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Automotive - Original Equipment industry, to which Westport belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Westport Fuel Systems Inc. reported a significant improvement in its financial performance for Q1 2025, with a net loss of $2.5 million compared to a net loss of $13.6 million in Q1 2024, driven by increased gross profit and reduced operating expenses [3][7][36] - The company is focusing on its HPDI joint venture with Volvo Group and plans to realign its operations towards hard-to-decarbonize applications in heavy-duty trucking, which presents substantial growth opportunities [2][4][6] Financial Performance - Revenues decreased by 9% to $71.0 million in Q1 2025 from $77.6 million in Q1 2024, primarily due to decreased sales volumes in the Heavy-Duty OEM and High-Pressure Controls & Systems segments [7][36] - Gross profit increased by 30% to $15.2 million in Q1 2025, up from $11.7 million in Q1 2024, resulting in a gross margin of 21% compared to 15% in the prior year [9][36] - Adjusted EBITDA improved to nil from negative $6.6 million in the same period last year, indicating a significant operational turnaround [7][33] Operational Updates - The company is pursuing operational excellence through cost-reduction initiatives and process streamlining, which contributed to an $8.1 million decrease in operating expenses [3][4] - Westport's light-duty segment saw a revenue increase to $64.2 million in Q1 2025 from $63.3 million in Q1 2024, driven by sales growth in the light-duty OEM and DOEM businesses [10][11] - The Heavy-Duty OEM segment's revenue dropped to $5.4 million in Q1 2025 from $11.9 million in Q1 2024, reflecting the transition of the HPDI business to the Cespira joint venture [14][36] Strategic Focus - The proposed sale of Westport's light-duty business is aimed at strengthening the balance sheet and funding growth opportunities in the Cespira joint venture and High-Pressure Controls & Systems business [4][6] - The company is committed to scaling alternative fuel solutions, including LNG, CNG, RNG, and hydrogen systems, to meet the growing demand for clean transportation technologies [5][6] Market Trends - Demand for gas-powered trucks utilizing HPDI technology has increased, with Volvo reporting over 25% sales growth in 2024, a trend that continued into Q1 2025 [6][19] - The market is increasingly recognizing the internal combustion engine using alternative fuels as a viable solution for decarbonizing long-haul, heavy-duty transport [5][6]