Westport Fuel Systems(WPRT) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Westport reported revenue of $1.6 million for Q3 2025, a decline from $4.9 million in the same quarter last year [4] - Adjusted EBITDA for the quarter was negative $5.9 million, compared to negative $0.8 million in Q3 2024 [5] - Net loss from continuing operations was $10.4 million for the quarter, compared to a net loss of $6 million in the same quarter last year [6] - Cash and cash equivalents totaled $33.1 million as of September 30, 2025, reflecting a significant increase from the sale of the light-duty business [9] Business Line Data and Key Metrics Changes - High-pressure controls and systems revenue for Q3 2025 was $1.6 million, a slight decrease from Q3 2024 [8] - Sospira generated $19.3 million in Q3 2025, up 19% from the same period last year [9] - Gross profit for Sospira was negative $1.1 million in Q3 2025, compared to negative $0.2 million in Q3 2024 [9] Market Data and Key Metrics Changes - The global truck market is expected to reach 1.95 million units in 2025 [17] - The long-haul truck market is focusing on total cost of ownership, with natural gas being an affordable alternative to diesel fuel [18] Company Strategy and Development Direction - The divestiture of the light-duty segment is aimed at simplifying the business and focusing on core heavy-duty and alternative fuel systems [12] - Westport is pursuing strategic market expansion via technological leadership in heavy-duty transportation and truck OEMs [16] - The company is developing a new CNG solution to enhance its offerings in North America [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, highlighting the strengthened balance sheet and the strategic return to core operations [18] - The company is making difficult economic decisions to enhance future shareholder value, including planned reductions in capital expenditures and SG&A [19] Other Important Information - The company incurred one-time costs of approximately $1 million for severance and restructuring [7] - Net cash used in operating activities from continuing operations was $4.5 million, an improvement from $11.7 million in the same quarter last year [10] Q&A Session Summary Question: Can you provide more detail on the new OEM development with Sospira? - Management indicated that the development programs should be shorter due to proven technology, with feedback expected from the OEM by mid-2026 [24][25] Question: What are the capital needs for the Sospira joint venture over the next 12 months? - Management confirmed that additional capital will be needed next year as part of the three-year build-out plan for the joint venture [36] Question: When do you expect to have manufacturing fully moved out of Italy? - Management stated that the manufacturing is completely out of Italy, with equipment installation ongoing in Canada and China, expected to be operational by year-end [37] Question: What is the timeline for the CNG solution deployment? - Management clarified that the CNG solution is being developed for North America, with initial steps involving demonstration fleets before commercialization [45][46] Question: Is the engineering revenue recognized in the quarter ongoing or one-time? - Management confirmed that the engineering revenue is ongoing, as development work for hydrogen systems is a continuous part of the business [47]