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Hexagon Purus (Oslo, Norway) has released results for Q4 and preliminary full-year (FY) 2024. Q4 generated NOK 396 million (~$35.1 million) in revenue, up 8% from the corresponding period in 2023, and FY 2024 revenue ended at NOK 1.876 million (~$166,312), up 42% year over year (though this differed slightly from expectations of at least 50%, due to delay or shift in completing certain customer deliveries). Hydrogen infrastructure, hydrogen mobility, and battery systems and vehicle integration have been the main drivers of growth year over year.

“We grew revenue by 8% from last year and improved annualized EBITDA margin by another percentage point. We also met several important milestones during the quarter — we raised NOK 1 billion [~$88.6 million] of equity capital and we delivered the first battery-electric trucks to the Hino program,” says Morten Holum, CEO of Hexagon Purus.

Holum notes that, looking forward, the market appears more challenging. “The near-term market outlook deteriorated significantly, following the U.S. presidential election,” he explains. “With a weaker near-term outlook and lower visibility, we have decided to adjust our cost base accordingly. We are therefore reducing our annualized costs by approximately NOK 200 million [~$17.7 million], including an approximate 15% reduction in the workforce.”

Q4 2024 and preliminary FY 2024 consolidated financials

Total operating expenses in Q4 2024 ended at NOK 500 (494) million (~$43.8 million), leading to an EBITDA of NOK -104 (-129) million (~-$11.4 million), equivalent to an EBITDA margin of -26% (-35%). For FY 2024, the EBITDA margin was -19% (-34%), a significant improvement compared to the same period last year and in line with expectations.

Total assets at the end of Q4 2024 amounted to NOK 4.934 (3.773) million (Q4: ~$437,703). The year-over-year increase in total assets is mainly driven by increases to property, plant and equipment, and right-of-use assets resulting from the company’s capacity expansion program, combined with an increase in working capital to cater for higher revenue as well as a higher cash balance following the company’s equity capital raise completed during Q4. Inventory amounted to NOK 694 (482) million (Q4: ~$61.5 million) as of the end of Q4, and the majority of inventory consists of raw materials and items in work in progress. Trade receivables decreased sequentially to NOK 351 (275) million (Q4: ~$31 million).

Increases in equity and non-current liabilities compared to Q4 2023 are mainly driven by the NOK 1 million (gross) equity raise completed during Q4 2024, and an increase in lease liabilities related to production facilities and equipment as part of the company’s capacity expansion program. Trade payables stood at NOK 260 (220) million (Q4: ~$23 million) and was sequentially down compared to Q4 2024. At quarter-end, the company had an equity ratio of 43% (51%).

Net cash flow from operating activities was NOK -99 (-138) million (Q4: ~-$8.8 million). Changes in net working capital was stable compared to Q3 2024.

Net cash flow from investing activities was NOK -112 (-111) million (Q4: ~-$9.9 million) in Q4 2024, of which NOK 66 million (~$5.8 million) relates to investments in production equipment and facilities related to the company’s capacity expansion program. Capitalized product development expenditure was NOK 36 (9) million (Q4: ~$3.2 million), and loans to associated companies amounted to NOK 17 (6) million (Q4: ~$1.5 million). Interest received on bank deposits in the fourth quarter of 2024 was NOK 7 (10) million (Q4: ~$621,000).

Cash and cash equivalents ended at NOK 1.028 (307) million (Q4: ~$91,196)

Hydrogen mobility and infrastructure (HMI)

Revenue for the HMI segment in Q4 2024 totaled NOK 355 million (~$31.5 million), broadly unchanged compared to the corresponding period in 2023. For FY 2024, revenue amounted to NOK 1.782 million (~$157,971), which represents growth of 40% compared to FY 2023. Sixty-two percent (60%) of Q4 2024 HMI segment revenue stemmed from hydrogen infrastructure solutions, which grew 3% year over year. Within hydrogen infrastructure solutions, hydrogen distribution solutions made up most of the revenue in the quarter with product deliveries to customers like Air Liquide, Norwegian Hydrogen and Linde. Revenue from mobile refueling stations and stationary storage solutions also increased year over year as units were delivered to among other Deutsche Bahn Energie during Q4.

EBITDA for the HMI segment in the fourth quarter of 2024 ended at NOK -25 (-33) million (Q4: ~-$2.2 million), equivalent to an EBITDA margin of -7% (-9%). For FY 2024, EBITDA ended at NOK -12 (-94) million (Q4: ~-$1.1 million), equivalent to an EBITDA margin of -1% (-7%).

Battery systems and vehicle integration (BVI)

Revenue for the BVI segment in Q4 2024 was NOK 47 (9) million (Q4: ~$4.2 million). The year-over-year revenue growth was mainly driven by initial vehicle deliveries of the Tern RC8 to Hino as well as deliveries of battery systems to Toyota Motors North America. For FY 2024, revenue ended at 97 (40) million (Q4: ~$8.6 million).

BVI segment EBITDA ended at NOK -33 (-34) million (Q4: ~-$3 million). For FY 2024, EBITDA ended at -139 (-140) million (Q4: ~-$12.3 million).

Outlook

As discussed in the company’s Q3 2024 report released in November 2024, the new administration following the U.S. presidential election has significantly increased uncertainty around the near-term outlook for the energy transition and zero-emission mobility in North America. Customers, especially in California, are awaiting clarification around legislation and funding mechanisms. In addition, the hydrogen industry and project realization is developing slower than expected in Europe, impacting Hexagon Purus’ customers.

With an uncertain near-term outlook and lower visibility, the company is launching a program targeting annualized cost reduction of approximately NOK 200 million (~$17.7 million), including an approximate 15% reduction in workforce. The company is also launching a review of its overall business portfolio to make additional adjustments to secure the company’s cash runway to EBITDA and cash break-even.

The Company has a well-diversified customer base and are exposed to a range of attractive end-use applications at varying stages of maturity. A delay in roll-out of green hydrogen projects will impact near-term growth for the hydrogen infrastructure business, but the company continues to expect a base level of demand for its distribution solutions for industrial use cases from its existing customer base of blue-chip industrial gas companies. Hexagon Purus’ hydrogen transit bus business is experiencing strong growth as end user demand is mainly made up of public authorities with local decarbonization agendas, both in Europe and North America. The company’s hydrogen and battery electric heavy-duty vehicle business, centered around the U.S. market is, on the other hand, experiencing uncertainty and low demand visibility following the U.S. election. Year over year, battery electric business is expected to grow in 2025, but with a slower ramp-up curve compared to earlier expectations.

Given the recent chain of events, it is no longer deemed realistic that the market will grow as previously guided in the near-term, and the company has decided to postpone further guiding until better visibility is gained.