Hyliion (US:HYLN)2025-11-12 17:00Financial Data and Key Metrics Changes - In Q3 2025, the company recorded revenue of $800,000 from R&D services, compared to no revenue in Q3 2024, reflecting a significant increase in activity [18] - Operating expenses for Q3 2025 were $15.3 million, up from $14.2 million in Q3 2024, primarily due to higher R&D costs [19] - The net loss for Q3 2025 was $13.3 million, an increase from $11.2 million in Q3 2024, but flat compared to Q2 2025 [20] Business Line Data and Key Metrics Changes - The KARNO Power Module has achieved over 200 kilowatts of mechanical power and more than 150 kilowatts of electrical power generation, meeting the needs of initial customers [5][6] - The company has confirmed that the KARNO Power Module meets stringent air quality standards, achieving NOx levels below 2.5 parts per million [6][7] - The UL certification process for the KARNO Power Module is progressing well, with testing requirements for the linear electric motor passed on the first attempt [9] Market Data and Key Metrics Changes - Customer interest in the KARNO Power Module remains strong, with nearly 500 units under non-binding letters of intent [12] - The company is deepening engagement with the U.S. military for energy security applications, with plans to deliver additional KARNO Power Modules for specialized testing in 2026 [13] - The data center market is increasingly adopting 800-volt DC architectures, aligning with the KARNO Power Module's native output [15][46] Company Strategy and Development Direction - The company is focused on transitioning from R&D to commercialization of the KARNO Power Module, with full commercialization expected in 2026 [12][22] - Strategic decisions were made to implement design improvements before UL certification to avoid future recertification [42] - The company is exploring partnerships in the nuclear sector to enhance the efficiency of next-generation nuclear systems [14][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the performance of the KARNO Power Module and its alignment with market needs, particularly in data centers and military applications [24] - The company anticipates being supply-constrained due to strong demand for the KARNO system across multiple sectors [12][35] - Management highlighted the importance of optimizing existing manufacturing capabilities while planning for future expansions [40] Other Important Information - The company expects total cash expenditures of $65 million for 2025, with a year-end cash and investment balance projected at approximately $155 million [21][23] - A 30% tax credit for the KARNO Power Module is expected to accelerate adoption and support commercial ramp-up [18] Q&A Session Summary Question: What vertical is the customer that shifted its acceptance of the initial KARNO units from 2025 into 2026? - The customer is the Navy, with the unmanned ship scheduled to have KARNO units installed in 2026 [25][26] Question: When will all the UL testing be completed? - The completion of UL testing is expected in the next couple of months, with multiple phases of certification [30] Question: Can you provide context around the 500 units in LOI? - The 500 units represent dozens of customers, with a strong demand for the product and ongoing discussions with new potential customers [33][35] Question: How is the company addressing manufacturing scale-up challenges? - The company has brought production in-house and is focused on optimizing existing manufacturing processes while planning for future expansions [39][40]