Ballard(BLDP) - 2025 Q1 - Quarterly Report

Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Financial Position As of March 31, 2025, total assets decreased to $756.6 million from $777.3 million, primarily due to reduced cash, with total equity declining to $653.8 million Statement of Financial Position Summary (in thousands of U.S. dollars) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $675,120 | $698,878 | | Total assets | $756,610 | $777,307 | | Total current liabilities | $74,991 | $75,586 | | Total liabilities | $102,789 | $104,317 | | Total equity | $653,821 | $672,990 | | Total liabilities and equity | $756,610 | $777,307 | - Cash and cash equivalents decreased by $27.25 million during the quarter, from $603.9 million to $576.7 million[2] - Inventories increased from $56.4 million at the end of 2024 to $65.1 million as of March 31, 2025[2] Condensed Consolidated Interim Statements of Loss and Comprehensive Loss For Q1 2025, net loss significantly reduced to $21.0 million from $41.3 million in Q1 2024, driven by increased revenue and a 31% decrease in operating expenses Q1 2025 vs. Q1 2024 Performance (in thousands of U.S. dollars) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Product and service revenues | $15,389 | $14,452 | | Gross margin | ($3,608) | ($5,415) | | Total operating expenses | $25,452 | $37,060 | | Results from operating activities | ($29,060) | ($42,475) | | Net loss for the period | ($21,036) | ($41,292) | | Basic and diluted loss per share | ($0.07) | ($0.14) | - Research and product development expenses were significantly reduced to $18.1 million from $25.3 million year-over-year[4] - Net finance income rose to $11.0 million from $2.3 million in Q1 2024, primarily due to mark-to-market gains on investments[4] Condensed Consolidated Interim Statements of Changes in Equity Total equity decreased by $19.2 million in Q1 2025, from $673.0 million to $653.8 million, primarily due to a $21.0 million net loss Reconciliation of Equity for Q1 2025 (in thousands of U.S. dollars) | Description | Amount | | :--- | :--- | | Balance, December 31, 2024 | $672,990 | | Net loss | ($21,036) | | RSUs redeemed | ($488) | | Share-based compensation | $1,826 | | Foreign currency translation | $529 | | Balance, March 31, 2025 | $653,821 | Condensed Consolidated Interim Statements of Cash Flows In Q1 2025, cash used in operating activities increased to $24.4 million, while cash used in investing activities decreased to $2.7 million, resulting in a $27.3 million overall decrease in cash Cash Flow Summary (in thousands of U.S. dollars) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash used in operating activities | ($24,403) | ($19,992) | | Cash used in investing activities | ($2,735) | ($9,527) | | Cash used in financing activities | ($689) | ($693) | | Decrease in cash and cash equivalents | ($27,250) | ($30,465) | | Cash and cash equivalents, end of period | $576,698 | $720,665 | Notes to Condensed Consolidated Interim Financial Statements Note 1. Reporting entity Ballard Power Systems Inc. designs, develops, manufactures, sells, and services proton exchange membrane (PEM) fuel cell products for various applications including bus, truck, rail, marine, and stationary - The company's principal business is the design, development, manufacture, sale, and service of PEM fuel cell products[7] - Key application focus areas are bus, truck, rail, marine, stationary, and emerging markets[7] Note 2. Basis of preparation Financial statements are prepared under IAS 34 in U.S. dollars, with management assessing the company's going concern ability based on achieving profitability and securing financing - The financial statements comply with International Accounting Standard (IAS) 34 Interim Financial Reporting[9] - Management's going concern assessment is dependent on achieving profitable operations and securing additional financing as needed[14][15] Note 7. Property, plant and equipment In Q1 2025, a $2.2 million impairment charge was recognized on property, plant, and equipment, with capital expenditures significantly lower at $2.2 million compared to $7.3 million in Q1 2024 - An impairment charge of $2,223,000 was recognized on property, plant, and equipment during Q1 2025[23] - Additions to property, plant, and equipment totaled $2,230,000 for Q1 2025, a sharp decrease from $7,293,000 in Q1 2024[27] Note 9. Equity-accounted investments The primary equity-accounted investment is the 49% stake in Weichai Ballard JV, with Ballard recording an $818,000 share of the JV's loss in Q1 2025, decreasing the investment's carrying value to $7.5 million Weichai Ballard JV Investment (in thousands of U.S. dollars) | Description | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning balance | $8,238 | $13,901 | | Equity in loss | ($818) | ($4,941) | | Ending balance | $7,465 | $8,238 | - The Corporation's share of the net loss from the Weichai Ballard JV was $818,000 for Q1 2025, compared to $834,000 for Q1 2024[32] Note 10. Long-term financial investments Long-term financial investments increased to $42.1 million from $37.5 million, driven by a $4.4 million net mark-to-market gain in Q1 2025, reversing a prior-year loss, while the investment in Quantron AG was fully written off Change in Fair Value of Investments - Q1 2025 (in thousands of U.S. dollars) | Investment | Change in Fair Value | | :--- | :--- | | Forsee Power SA | $2,820 | | HyCap Fund | $798 | | Clean H2 Fund | $828 | | Total Change | $4,446 | - The investment in Quantron AG was fully impaired in 2024 and the company was liquidated in 2025, resulting in a carrying value of $0[40][41] - The company recognized a net mark-to-market gain of $4,446,000 in Q1 2025, a significant turnaround from the $6,302,000 loss recognized in Q1 2024[35] Note 14. Provisions Total current provisions decreased to $26.3 million from $30.4 million, primarily due to a reduction in the restructuring provision to $5.2 million as related costs were paid Provisions Breakdown (in thousands of U.S. dollars) | Provision Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Restructuring provision | $5,193 | $8,053 | | Warranty provision | $13,286 | $12,894 | | Onerous contracts provision | $7,869 | $9,460 | | Total Current Provisions | $26,348 | $30,407 | - The restructuring provision relates to a global corporate restructuring initiated in September 2024 to reduce costs[58] Note 17. Equity Share-based compensation expense decreased to $1.9 million in Q1 2025, while outstanding Restricted Share Units (RSUs) substantially increased to 10.1 million - Total share-based compensation expense was $1,866,000 for Q1 2025, down from $2,800,000 in Q1 2024[66] - The number of outstanding RSUs increased significantly from 4.6 million at year-end 2024 to 10.1 million at the end of Q1 2025, following new grants[71] - No stock options were exercised in Q1 2025, compared to 149,481 options exercised in Q1 2024[69] Note 18. Disaggregation of revenue Total revenue for Q1 2025 was $15.4 million, with Europe as the largest market at $9.4 million, and the Bus segment as the primary driver, growing to $12.5 million Revenue by Application (in thousands of U.S. dollars) | Application | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Bus | $12,467 | $8,868 | | Truck | $310 | $1,153 | | Stationary | $596 | $3,651 | | Other | $2,016 | $785 | | Total | $15,389 | $14,452 | Revenue by Geographical Market (in thousands of U.S. dollars) | Geographical Market | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Europe | $9,401 | $10,965 | | North America | $5,473 | $2,131 | | China | $189 | $1,148 | | Rest of World | $326 | $208 | | Total | $15,389 | $14,452 | Note 20. Finance income (expense) Net finance income significantly increased to $11.0 million in Q1 2025 from $2.3 million in Q1 2024, primarily due to a $4.4 million mark-to-market gain on financial assets Finance Income Breakdown (in thousands of U.S. dollars) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Investment income | $6,635 | $10,304 | | Mark-to-market gain (loss) on financial assets | $4,446 | ($6,302) | | Foreign exchange gain (loss) | $250 | ($1,292) | | Finance income and other | $11,501 | $2,709 | Note 21. Related party transactions Related party transactions primarily involve the Weichai Ballard JV, with Q1 2025 revenue from the JV at $184,000, a significant decrease from $1.0 million in Q1 2024 Transactions with Weichai Ballard JV (in thousands of U.S. dollars) | Transaction Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $184 | $1,007 | | Cost of goods sold and operating expense | $91 | $939 | Note 22. Discontinued operations The Ballard Motive Solutions business, closed in 2023, is reported as a discontinued operation, with no revenues or expenses in Q1 2025, compared to a $226,000 net loss in Q1 2024 - The historic operating results of the Ballard Motive Solutions business are presented separately as discontinued operations[83] Net Loss from Discontinued Operations (in thousands of U.S. dollars) | Period | Net Loss | | :--- | :--- | | Q1 2025 | $0 | | Q1 2024 | ($226) | Note 24. Operating segments The Corporation operates as a single operating segment, "Fuel Cell Products and Services," encompassing all activities related to PEM fuel cell product design, development, manufacture, sale, and service - The company operates in a single operating segment: Fuel Cell Products and Services[86] Note 25. Financial Instruments This note details financial instruments, with long-term investments showing a $4.4 million net mark-to-market gain in Q1 2025, reversing a $6.3 million loss from Q1 2024, and no additional ECL impairment losses recognized - The fair values of cash, short-term investments, receivables, and payables approximate their carrying values due to their short-term nature[87] - During Q1 2025, the Corporation recognized net mark-to-market and foreign exchange gains of $4,446,000 on its long-term financial investments, compared to a loss of $6,302,000 in Q1 2024[88]