Hyliion Q2 2026 Earnings Report

Hyliion EPS Results

• Actual EPS: -$0.08
• Consensus EPS: -$0.08
• Beat/Miss: Missed by -$0.00
• One Year Ago EPS: N/A

Hyliion Revenue Results

• Actual Revenue: $4.94 million
• Expected Revenue: $2.40 million
• Beat/Miss: Beat by +$2.54 million
• YoY Revenue Growth: N/A

Hyliion Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 12, 2026
• Conference Call Time: 11:00AM ET

Hyliion (NYSEAMERICAN:HYLN) develops electrified powertrain solutions aimed at reducing fuel consumption and emissions for Class 8 commercial vehicles. Its flagship offerings include the Hypertruck ERX electric axle and hybrid powertrain systems that integrate battery packs with onboard natural gas generators. These modular solutions are designed to retrofit existing diesel trucks or to be incorporated by original equipment manufacturers, allowing fleets to transition toward lower-carbon operations without replacing entire fleets.

Founded in 2015 by Thomas Healy and based in Austin, Texas, Hyliion went public in 2020 via a special purpose acquisition company (SPAC) merger. Since its inception, the company has conducted demonstration programs and pilot deployments across North America, working with trucking fleets, railyards and logistics providers to validate real-world performance. Hyliion’s products are engineered to deliver fuel savings, extended range and reduced maintenance compared with conventional diesel drivetrains, supporting customers’ sustainability and total cost-of-ownership goals.

Under the leadership of CEO and co-founder Thomas Healy, Hyliion continues to invest in research and development, strategic partnerships and manufacturing scale-up. The company collaborates with component suppliers and technical advisors to advance zero-emission readiness, while maintaining a pathway for fleets to adopt hybrid and range-extended electric technologies today. With a focus on Class 8 applications, Hyliion positions itself as a key innovator in the transition toward decarbonized commercial transportation.

Hyliion Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Hyliion secured a record $41.7 million U.S. Navy contract to scale KARNO power modules above 2 megawatts and 3 megawatts, and expects additional military awards that could bring 2026 bookings near $50 million.
• Positive Sentiment: The company raised 2026 revenue guidance from $10 million to approximately $15 million, supported by Navy R&D work; it ended the quarter with $132.4 million in cash and investments and now expects to finish 2026 with $115 million-$120 million.
• Positive Sentiment: Hyliion expects to begin its first customer-site deployment next quarter and is targeting roughly 10 early-adopter KARNO cores this year, while data-center interest includes non-binding LOIs for approximately 750 cores and discussions spanning tens of megawatts to gigawatt-scale projects.
• Positive Sentiment: Additive-manufacturing software, printer utilization, and design improvements could increase printing speed and throughput by up to three times; the existing printer base is expected to support up to 15 megawatts of annual KARNO capacity, prompting a potential restart of printer purchases in 2027.
• Negative Sentiment: Commercialization remains dependent on ongoing durability testing and design work, with the 200-kilowatt data-center product now moving into 2027 and multi-megawatt data-center deliveries planned for 2028. Management also plans to establish an at-the-market equity program, creating potential shareholder dilution as future production growth requires additional capital.

Presentation

[Operator]

I will now hand the conference over to Greg Standley, Chief Accounting Officer. Greg, please go ahead.

[Greg Standley, Chief Accounting Officer at Hyliion Holdings]

Thank you, and good morning, everyone. Welcome to Hyliion Holdings' second quarter 2026 earnings conference call. Joining us today are Thomas Healy, Chief Executive Officer, and Jon Panzer, Chief Financial Officer. A slide presentation accompanying today's call is available on Hyliion's investor relations website at investors.hyliion.com. Please note that during today's call, we will be making certain forward-looking statements regarding the company's business outlook.

[Greg Standley, Chief Accounting Officer at Hyliion Holdings]

Forward-looking statements are predictions, projections, and other statements about anticipated events that are based on current expectations and assumptions. As such, are subject to risk and uncertainties. Many factors could cause actual results to differ materially from forward-looking statements made on this call. Factors that may cause such differences are discussed in our presentation and press release, as well as our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on forward-looking statements, and we undertake no duty to update this information, except as required by applicable law. With that, I'll turn the call over to Thomas.

[Thomas Healy, CEO at Hyliion Holdings]

Hello, and thank you for joining us for Hyliion's second quarter 2026 earnings call. This was a strong quarter for Hyliion, and we have a lot to cover on today's call. I'll organize my remarks around three topics: military progress, product progression towards initial customer site deployments, along with customer demand, and speed improvements in additive manufacturing. First, a few highlights. We were awarded a $41.7 million contract with the U.S. Navy, our largest military contract to date, and we still expect to secure additional military contracts before year-end. We are raising our full-year revenue guidance from $10 million-$15 million.

[Thomas Healy, CEO at Hyliion Holdings]

Finally, we have identified additive manufacturing speed improvements that we believe have the potential to increase print speed and throughput by up to three times. I will cover our progress against the 2026 milestones we laid out at the start of the year, update our three-year outlook, and then turn the call over to Jon for the financial results. Starting with the military. Last month, we announced a $41.7 million contract with the U.S. Navy to scale the KARNO Power Module into multi-megawatt systems. Under the contract, we expect to deliver two power modules, one rated above 2 MW and the other rated above 3 MW.

[Thomas Healy, CEO at Hyliion Holdings]

Both are built on the same modular 800 kW architecture we are developing today for data centers and the USX-1 Defiant autonomous Navy ship, which means we are scaling an existing building block rather than creating a new system. These larger modules expand the range of Navy applications from larger vessels to powering military bases. The contract also includes funding to further advance our additive manufacturing capabilities.

[Thomas Healy, CEO at Hyliion Holdings]

Coming into the year, we set a goal of securing $40 million-$50 million in new military contracts. This Navy award, on its own, achieves that goal. However, we expect to close additional military awards this year, including one from a different service branch for approximately $7 million. We expect these additional awards to bring us close to $50 million in new military contracts for 2026. The performance periods on these contracts run two to three years, depending on the specific contract and our pace of execution.

[Thomas Healy, CEO at Hyliion Holdings]

We expect additional military contracts next year and in the years to follow. Some will be cost-plus development contracts, similar to what we are executing on today, and increasingly, others will be for delivery of complete commercial power systems. The result is a steadily growing base of military and government contracts that support revenue growth in future years. This quarter, we engaged Abdul Subhani as a strategic advisor for military opportunities. Abdul serves as civilian aide to the Secretary of the Army for Texas, distinguished chair of innovation and senior advisor to the superintendent of the United States Military Academy at West Point, and U.S. technology advisor to the British Military Academy.

[Thomas Healy, CEO at Hyliion Holdings]

Abdul is assisting us with building relationships with new contacts throughout the military, particularly within the U.S. Army, to broaden awareness of our KARNO technology and build on our contract pipeline. Our engagements across all branches of the military increased significantly this past quarter. We held numerous meetings with senior-level officers to discuss the potential of our power system. We were also invited to participate in Senator McCormick's Defense and Innovation Summit, where President Trump, Energy Secretary Chris Wright, and Secretary of War Pete Hegseth all participated.

[Thomas Healy, CEO at Hyliion Holdings]

Overall, it was a terrific quarter for defense progress, with more engagements and business opportunities expected in the quarters ahead. Shifting to product development, I will cover where we stand with our development work and deployment of early adopter units. Overall, commercial interest remains strong as we near initial customer site deployments. Ahead of moving units to customer sites, we are completing a block of design enhancements that capture improvements from what we have learned from initial operation.

[Thomas Healy, CEO at Hyliion Holdings]

The block consists of changes spanning airflow and cooling improvements, upgraded insulation blankets, an improved piston, and software and controls enhancements. Together, we are expecting to increase system durability, performance, and power. We have recently completed updating our first commercial customer unit with these upgrades, and that will be the first system deployed to a customer site.

[Thomas Healy, CEO at Hyliion Holdings]

We are building a number of power modules in parallel, including the 800 kW Navy system, which is now in assembly. We are accumulating run hours across multiple systems simultaneously and performing extended duration runs to build operating hours and validate durability. We are also expanding our manufacturing capacity, including moving key assembly operations from Cincinnati to Austin.

[Thomas Healy, CEO at Hyliion Holdings]

We continue to expect to complete the remaining early adopter units, approximately 10 KARNO cores in total, this year. We expect our first customer site deployment to begin over the next quarter with multiple units going to that initial site. We are planning a data center deployment to follow, and the balance of units are Navy assets, including the 800 kW system for the USX-1 Defiant autonomous Navy ship. We also recently announced the successful operation of multiple KARNO Power Modules functioning together as a single scalable power unit.

[Thomas Healy, CEO at Hyliion Holdings]

This matters for customers who will run more than one system at a site, and it completes another of the 2026 milestones we set out at the start of this year. We also continue to make progress towards our 200 kW target and expect to reach that power level by year-end. We are testing improvements across several components with our primary focus on continuing to iterate the design of the regenerator, which we believe is the remaining key enabler to achieve full power. Shifting to customers, our two largest segments of opportunities are data centers and the military, in that order.

[Thomas Healy, CEO at Hyliion Holdings]

Data centers represent our largest area of customer interest, driven by AI-related power demands and the sheer size of the market. Over time, we expect a significant portion of our production capacity to be directed towards this segment. We have quantified part of that interest through non-binding LOIs representing approximately 750 KARNO cores, which are subject to the execution of definitive purchase agreements.

[Thomas Healy, CEO at Hyliion Holdings]

Most of the interest we are hearing from customers is not yet reflected in LOIs or purchase contracts. While we have not announced new data center LOIs since our last update, we are engaged with a growing number of companies discussing interest in deployments ranging from tens to hundreds of megawatts. We are seeing three buckets of data center projects, low tens of megawatts, around 100 MW, and gigawatt scale. For the small and medium sites, our discussions center on the KARNO Power Module as the primary power solution given its efficiency, scalability, and compact footprint.

[Thomas Healy, CEO at Hyliion Holdings]

For gigawatt scale builds, a combined-cycle gas turbine will likely provide base load power, and we are being considered to handle 10%-20% of the overall need, specifically to handle transient loads. Across all three, there is a strong interest in our system's native 800 V DC capability, which is the architecture data centers are moving towards. On the military side, interest spans autonomous vessels, base power, and forward operating installations driven by mobility, fuel flexibility, and low maintenance requirements.

[Thomas Healy, CEO at Hyliion Holdings]

These opportunities include both R&D programs like our current Navy work, and over time, deliveries of production systems. Turning to 2027 deployments, we will focus on military deliveries against contracts we already hold, which generates near-term revenue. For data center customers, we plan to deploy 200 kW power modules at their AI test facilities so they can experience the technology firsthand, which we believe is the fastest path to larger volume orders of our multi-megawatt system that we plan to have initially ready in 2028.

[Thomas Healy, CEO at Hyliion Holdings]

These early deployments may be structured as outright sales, loaned units, or power purchase agreements. With this sequencing, we believe it will enable greater revenue in the near term. It will move commercialization of the 200 kW power module into 2027, but we believe it allows us to start deploying units sooner in the data center space and to build a substantially larger long-term customer pipeline. Now switching to scaling and manufacturing. As we discussed previously, one of the key milestones we set for 2026 was to work on improving the speed and throughput of the additive manufacturing process.

[Thomas Healy, CEO at Hyliion Holdings]

I am pleased to report that we are making significant progress. We have determined how to take advantage of the full laser power and capabilities available in the printers, implementing software enhancements that optimize how parts are printed, and are continuing to refine part design, including evaluating material changes where appropriate. Together, we believe these initiatives have the potential to increase overall printer speed and manufacturing throughput by up to three times, depending on the part. We have already begun demonstrating some of these speed improvements in prints we are making today.

[Thomas Healy, CEO at Hyliion Holdings]

Separately, we recently signed a beta machine agreement with Colibrium Additive, a GE Aerospace company, and the manufacturer of the additive printers we use at Hyliion. Through this collaboration, we are working together on the next generation of additive manufacturing systems. Up to this point, we have not yet sized our production capacity expectations because we were still assessing the capabilities of our fleet of 30 printers spanning different generations, sizes, and capabilities. Now that we have a better assessment of print speed capabilities, we have determined that our existing base of installed printers will be able to produce up to 15 MW per year of KARNO core capacity.

[Thomas Healy, CEO at Hyliion Holdings]

With the optimization work I described, we are now in a better position to share high-level expectations on the relationship between KARNO output and printer investment for printers we plan to purchase going forward. Based on our current manufacturing roadmap, we believe the advancements we are working on will significantly improve the capital efficiency of scaling KARNO production once fully implemented.

[Thomas Healy, CEO at Hyliion Holdings]

We currently estimate that approximately $1.5 million worth of investment in printers and related manufacturing equipment can support approximately 1 MW of annual KARNO Power Module production capacity. Based on our current pricing expectations, that 1 MW of annual capacity represents approximately $2.5 million-$3 million worth of annual revenue. We believe this ratio of investment to output will provide an attractive return on investment once we reach efficient production volumes.

[Thomas Healy, CEO at Hyliion Holdings]

It is still too early to determine exactly when we will achieve that level of production volume, but we now have an additive platform capable of throughput that justifies further investment. As a note of caution, the approximately three times improvement in printer speed that I discussed earlier is still being validated and will require additional testing. However, we have gained enough confidence in the improvements we are seeing that we now believe there is an opportunity to accelerate additional printer investment into 2027 that we had previously expected to make in 2028.

[Thomas Healy, CEO at Hyliion Holdings]

We look forward to providing additional updates on printer throughput improvements and our manufacturing investment plan in the coming quarters. Finally, I would like to remind everyone that buyers of the KARNO Power Module are eligible for a 30% Investment Tax Credit on both the purchase price of the system and qualifying investments required for its installation. Under current law, that credit is available to customers through 2036. Turning to the 2026 performance milestones that we laid out for the year, we checked off three more this quarter: new military contracts, printer speed enhancements, and demonstrating multi-power module operation.

[Thomas Healy, CEO at Hyliion Holdings]

We are just over halfway through the year and have completed half of the milestones we set. By our next earnings call, we expect to check off at least two more, including surpassing our $10 million revenue milestone and completing our initial customer site deployment with two additional milestones expected by year-end. As mentioned before, we will be prioritizing military opportunities and delivering 200 kW systems to data center test facilities, which will move commercialization of the 200 kW system into 2027.

[Thomas Healy, CEO at Hyliion Holdings]

We believe this plan will drive higher near-term revenue and larger long-term volume opportunities. On our three-year outlook, the overall trajectory remains the same, although the sequencing of our deployments has changed some. Our 2027 expectations include commercialization and ramp-up of 200 kW deliveries, the development of a multi-megawatt KARNO system for the U.S. Navy, and the resumption of printer acquisitions that will drive future production growth. For 2028, we plan to accelerate system deliveries and capital investment in growth assets while delivering our first multi-megawatt KARNO system to data center customers. With that, I'll turn the call over to Jon to walk through the financial results for the quarter.

[Jon Panzer, CFO at Hyliion Holdings]

Thank you, Thomas, and good morning, everyone. In the second quarter, we recorded revenue of $4.9 million from R&D services. This compares with revenue of $1.5 million in the second quarter of 2025 and $2.8 million in the first quarter of this year. Revenue growth this year is primarily attributable to increased production of components for the 800 kW Power Module we are building for the Office of Naval Research, including the four KARNO cores that will power the system and other Power Module components.

[Jon Panzer, CFO at Hyliion Holdings]

Cost of revenue was $4.6 million, resulting in gross profit of $366,000. Operating expenses for the second quarter were $15.7 million, approximately flat compared to the second quarter of 2025. R&D spending in the quarter was $9.5 million, down 6% from $10.1 million a year ago. The year-over-year decrease primarily reflects a shift in spending towards revenue-generating services for the Navy with the associated costs of that work reflected in cost of revenue. SG&A expenses were $6.4 million in the quarter, up approximately $500,000 or 8% compared to the second quarter of 2025.

[Jon Panzer, CFO at Hyliion Holdings]

On the powertrain exit and termination expense line, we recorded a credit of $258,000 related to asset sales. Our net loss for the second quarter was $13.9 million, compared with a net loss of $13.4 million in the second quarter of 2025. Turning to our year-to-date results, revenue for the first half of 2026 was $7.8 million, up significantly from $2 million in the first half of 2025. Cost of revenues was $7.2 million, resulting in gross profit of $576,000, compared with $143,000 in the same period of 2025.

[Jon Panzer, CFO at Hyliion Holdings]

Operating expenses for the first half were $29.1 million, down 18% compared with the first half of 2025, primarily reflecting a 23% reduction in R&D expenses. Our year-to-date net loss was $25.7 million, a 16% improvement compared with the $30.7 million net loss we recorded in the first half of 2025. Turning to our cash and investment position, we spent $6.9 million during the second quarter compared with $13.5 million in the second quarter of 2025 and $13.1 million in the first quarter of this year. The key drivers of the lower cash spend compared with last year were a lower net loss and lower capital spending.

[Jon Panzer, CFO at Hyliion Holdings]

Capital spending was approximately $200,000 in the second quarter and $2.1 million year-to-date. This compares with $11.6 million in the first half of 2025, when we had significantly higher spending on additive printing machines and related investments. Cash generated from asset sales was $1.9 million year-to-date. We finished the second quarter with $132.4 million of cash and short and long-term investments on our balance sheet. Next, I'd like to update our outlook for the remainder of the year.

[Jon Panzer, CFO at Hyliion Holdings]

Our research and development services work with the Navy has ramped up more quickly this year than we initially expected. We began the year projecting approximately $10 million of R&D services revenue for this year, but in the first half alone, we have recorded nearly $8 million of revenue. The work scope and funding under our existing Navy contracts will begin to wind down during the second half of the year, with a significant milestone being the expected completion of the 800 kW KARNO Power Module around the end of the year.

[Jon Panzer, CFO at Hyliion Holdings]

As that work nears completion, we will begin ramping up activity under the new $41.7 million Navy contract we signed a few weeks ago, although most of the work under that contract is expected to be performed in 2027 and 2028. Consequently, we now expect third quarter revenue to be approximately in line with the second quarter at just under $5 million, and total revenue for the year to be approximately $15 million.

[Jon Panzer, CFO at Hyliion Holdings]

As Thomas noted earlier, this represents a 50% increase from our previous 2026 revenue outlook and compares with total revenue of $3.5 million in 2025. Turning to capital spending, over the last couple of years, our investments have been directed primarily toward additive printing machines, related facility investments, and CNC machining equipment. As Thomas noted, this year, our focus has shifted towards optimizing our existing printer fleet and increasing the speed and throughput of those machines.

[Jon Panzer, CFO at Hyliion Holdings]

As a result, we expect capital spending in the second half of this year to be approximately in line with the $2 million spent during the first half. This represents a significant decrease from total spending of nearly $24 million in 2025. We have also previously discussed our expectation to enter into an equipment financing arrangement to monetize a portion of the value of our printer assets through either a sale, leaseback, or secured debt financing. We continue to expect this to close this year and generate between $10 million and $15 million of cash proceeds.

[Jon Panzer, CFO at Hyliion Holdings]

The combination of higher revenue, lower expected capital spending, and the anticipated equipment financing has resulted in a meaningful improvement in our cash outlook for the year. We previously expected to spend approximately $50 million during 2026, net of the equipment financing, and to finish the year with approximately $100 million of cash and investments on our balance sheet. We now expect to finish the year with between $115 million and $120 million, reflecting net cash spending during the year, including equipment financing of approximately $30 million-$35 million.

[Jon Panzer, CFO at Hyliion Holdings]

This improved outlook highlights the strength of our balance sheet and our continued focus on the careful deployment of capital as we begin deliveries of KARNO Power Module systems and continue to grow revenue. Next, as Thomas discussed earlier, we are gaining confidence in the ability of advancements in additive printing technology to deliver greater speed and throughput. This is the outcome we were targeting and a reason we slowed printer acquisitions this year.

[Jon Panzer, CFO at Hyliion Holdings]

Previously, we expected the next phase of the capital build-out of our additive printer fleet to begin in 2028. Based on the progress we are seeing, we now see an opportunity to restart printer purchases sometime next year, enabling a faster ramp-up in production capacity. We expect to be able to finance these growth investments with some combination of leases, debt, and cash. As we have stated in the past, we continue to believe the capital we have on hand today is sufficient to carry us through commercialization of the KARNO Power Module.

[Jon Panzer, CFO at Hyliion Holdings]

At the same time, additional capital will ultimately be required to support production growth. Finally, as part of our ongoing capital planning process, we are establishing an at-the-market equity program to provide additional financial flexibility. The program will allow us to raise capital opportunistically when market conditions are favorable and when we believe doing so supports our strategic priorities and long-term shareholder value. We intend to be disciplined in our use of the program, carefully considering both our capital requirements and the potential dilution to shareholders. Now I will turn the call back over to Thomas.

[Thomas Healy, CEO at Hyliion Holdings]

To wrap up, the second quarter advanced all three of the areas I opened with. We signed our largest military contract to date at $41.7 million and expect to close very near $50 million worth in new military awards this year. We increased our revenue guidance for 2026 by 50%, from $10 million to about $15 million. We unlocked additive manufacturing improvements that we believe support up to a threefold increase in throughput, which will enable us to begin scaling faster to meet the demand we are seeing.

[Thomas Healy, CEO at Hyliion Holdings]

For the remainder of 2026, our focus is on completing the early adopter units, deploying the first systems to customer sites, closing the remaining military contracts, and building the 800 kW Navy system for the USX-1 Defiant autonomous Navy ship. We are excited about the opportunity ahead and about the position we are in to capture it. I will now hand the call over to the moderator to open up for Q&A.

[Operator]

We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Sean Milligan with Needham & Company. Sean, your line is open. Please go ahead.

[Sean Milligan, Analyst at Needham & Company]

Hey, Thomas and Jon. Good morning. Thanks for taking the questions. I guess just real quick on the current capacity of the 30 printers, just want to clarify, did you say 15 MW a year or 50 MW per year?

[Thomas Healy, CEO at Hyliion Holdings]

Morning, Sean. It was 15 MW per year. We see that the existing install base and the printers that we already have on order and expected to come in, that will be able to produce up to 15 MW a year. Now with that is rolling in all the advancements that we discussed throughout today's call.

[Sean Milligan, Analyst at Needham & Company]

Okay, great. On the data center side, I think you said roughly half of your LOIs are data centers today, but you are engaged with a growing number of customers. Just curious how you see that progressing with the customers in your pipeline. Do you see the opportunity to sign additional LOIs or MoUs, or are you going to move more to test orders? Just trying to think through potential catalysts for the rest of the pipeline there.

[Thomas Healy, CEO at Hyliion Holdings]

Sure. Maybe just to start, we have about 750 KARNO cores worth of LOIs that are executed that represents around $400 million of potential revenue opportunity at current pricing. What I will say, though, is that is only a fraction of the customer engagements and customer interest that we are seeing and engaging in. As we announced on today's call, we are working with multiple hyperscalers as well as numerous additional data center builders. We are in discussions with them, and some of the questions we have been getting from them are like, "How do you get to 100 MW a year of production capacity just for me?"

[Thomas Healy, CEO at Hyliion Holdings]

Or one of them is even at the 400 MW of production capacity just for me. So they want to understand really how are we going to scale the additive manufacturing side of things. That is one of the big reasons why we were excited today to be able to share more about what that scaling journey looks like and the capital efficient path that we have ahead of us. But the demand we are seeing from the data center sector, the military sector, as well as the base commercial customers that we have been working with, is phenomenal, frankly. The big focus right now is how are we going to be able to scale to meet that demand.

[Sean Milligan, Analyst at Needham & Company]

Okay, that's really helpful. Kind of along those lines, you gave the numbers, the $1.5 million for printers and manufacturing equipment to support 1 MW of KARNO cores per year. Just curious about the supply chain there. Especially on the printer side, I guess how quickly can you order printers? Can you bring printers in? Is there any constraints in terms of the number of printers you could bring in in a year? Because to your point, it seems like the bring your own power space is accelerating, the demand from data centers is accelerating. Just curious about the ability to accelerate your supply chain, especially on the additive manufacturing side.

[Thomas Healy, CEO at Hyliion Holdings]

Sure. Maybe let's start with the infrastructure that we have in place. In our Austin, Texas facility, the existing square footage that we already have under lease, that has the capability of adding hundreds of additional printers to it. We have plenty of space there. That's not going to be our issue. The next question is, what does the supply chain look like in order to be able to source these and get them in? As you're aware, we procure the systems from Colibrium Additive, which is a GE company.

[Thomas Healy, CEO at Hyliion Holdings]

The great thing is these are the same printers that they use in aerospace. They're selling into the healthcare industry, and even are being brought into other industries as well. These are not unique printers that are just for Hyliion. These are standard printers that they're scaling for other customers as well.

[Thomas Healy, CEO at Hyliion Holdings]

Now, in terms of their ability to deliver on those, they have been in production of additive machines for over a decade, so it's something that they have confidence, and we've had discussions with them that as our capacity is scaling up, they'll be able to deliver towards them. We do anticipate lead times on printers getting into the low number of quarters, even potentially months of lead time as we go forward. That's obviously something we'll work closely with GE on.

[Sean Milligan, Analyst at Needham & Company]

Okay, great. I'll hand it back over. Thank you so much.

[Operator]

As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Edward Jackson with Northland. Edward, your line is open. Please go ahead.

[Edward Jackson, Analyst at Northland]

Thanks very much. Good morning, Thomas. Good morning, Jon.

[Thomas Healy, CEO at Hyliion Holdings]

Good morning.

[Edward Jackson, Analyst at Northland]

I wanted to start out and just make sure I understood. You talked about the 10 units that you are going to, well, roughly 10 units, that you are still on track for, and you are going to have a chunk of that be in the U.S. Navy, so 800 kW, that takes care of four of them. Then you said that you were going to have an initial customer site with a data center. Is that for a 200 kW system or is that for multiple systems?

[Edward Jackson, Analyst at Northland]

Given the fact that it is going in there and they are going to be knocking it around, I assume there is no product revenue associated with that. I wanted to make sure that I understood that right. Am I correct then that the remaining kind of half of the units you are going to be using to do validation work with other data center opportunities? Is that the way to think about those 10 units?

[Thomas Healy, CEO at Hyliion Holdings]

Yeah. So a few different parts to the question. So maybe first is, the data center opportunity we are targeting for this year. So that will be with a 200 kW system, as you mentioned, so the base smaller enclosure. That customer ultimately has long-term interest in the multi-megawatt product. But the great thing is that the technology on the inside of the box is the same. It is more of just a scaling equation.

[Thomas Healy, CEO at Hyliion Holdings]

That was one of the things we wanted to convey on today's call is over the early adopter units, as well as units that will be getting out into the field next year that are going into data center sites, they will be taking the 200 kW, and it is really to build confidence in the technology and get to experience it firsthand for a roadmap of multi-megawatt systems going forward.

[Thomas Healy, CEO at Hyliion Holdings]

In terms of the revenue on these early systems, until we get to actual commercialization on the unit, we would not have recognized revenue for them. However, when we are selling these units to customers, we are charging them for them. It is more from an accounting standpoint that it does not go to revenue recognition, which Jon can obviously share more on. In terms of the additional units, the remainder of the 10 are actually all Navy assets. And the couple of customer units that we have, or a couple of customer sites, and then the remainder are going to the Navy.

[Edward Jackson, Analyst at Northland]

Okay. Got that one for me. With regards to, the prior question with regards to printer availability and the ability to get them in ramped and if it is going to take months or quarters before you can get printers from order, when do you think you will have that finalized, your kind of CapEx needs for 2027 and be able to highlight that more? I mean, it seems that are you expecting to have that done in months or by end of year?

[Edward Jackson, Analyst at Northland]

You are just kind of trying to get a sense of when that spend is going to kick in for next year. I mean, obviously you are doing it because you are coming up to the point where you want to be, which is selling product. But just to kind of get a little better sense in terms of timing, because there was obviously a runway before you can get those units in and put into work.

[Jon Panzer, CFO at Hyliion Holdings]

Yeah. Hi, Ted. This is Jon. I'll take that one. While we haven't finalized 2027 capital spending needs yet, we do think that these print speed improvements are going to enable us to start spending again on printer acquisitions. I think if you do the math on what I projected on capital spending this year, it's going to be $4 million compared to like $23 million, I think it was, in 2025. Next year we would start to ramp that back up again. What's going to dictate that, the initial step is when you place orders, you put deposits down. There could be an opportunity to actually get the printers delivered.

[Jon Panzer, CFO at Hyliion Holdings]

Some of it depends on just when some of the technology will be available, but we certainly want to send the message that we're going to restart that effort next year, and whether the deliveries happen late next year or into 2028 or middle of next year is yet to be determined. But I think that the good news in the messaging is that we have an opportunity to pull ahead our ability to bring the printers in that will drive production capacity growth in the future. I guess stay tuned, but it's certainly going to be closer than it is, than we previously had expected.

[Edward Jackson, Analyst at Northland]

And then you've made a comment, Jon, that you were going to looking for some equipment financing, and you thought to get $10 million-$15 million in cash proceeds from doing it this year. Then I thought you made another comment with regards to another $30 million or $35 million in equipment financing. What was-

[Jon Panzer, CFO at Hyliion Holdings]

Yeah. Let me. Yeah. Sorry, Ted. Let me clarify. Initially, our projections this year were to consume and spend net $50 million. That would have left us with $100 million of cash in investments at the end of the year. That included $10 million of equipment financing. Now what we are changing is that our actual cash forecast of spending is improving by $15 million, and I am also projecting that we may upsize that equipment financing from $10 million-$15 million.

[Jon Panzer, CFO at Hyliion Holdings]

That is where you get up to $20 million improvement in our total cash forecast. That cash forecast was $50 million of net spending, and now it is somewhere between $30 million and $35 million. I did not mean to imply that the financing would be in the $30 million-$35 million. The financing will be $10 million-$15 million. Does that make sense?

[Edward Jackson, Analyst at Northland]

Yep, it does.

[Jon Panzer, CFO at Hyliion Holdings]

Yeah. Again, I just want to reiterate that because of higher revenue, lower spending overall, and lower capital spending, our net cash burn is going to be about $15 million better than we previously expected.

[Edward Jackson, Analyst at Northland]

Got it. My last question, and I will get out of line, is, on the Navy contracts, you have got, let us call it $42 million in revenue. You have commented on it being, rolling in and starting to contribute in 2027 and 2028. When we think about those two years, basically we should think about somehow the cadence is, it will be putting at least $42 million of developmental revenue into the model, across 2027 and 2028. Then I want to verify with the commentary of the ramp down of the original contract, there will be no revenue from that original contract carrying forward into 2027?

[Jon Panzer, CFO at Hyliion Holdings]

Yeah. Let me try and unpack that a bit. We had a roughly $20 million of military contracts preceding the one that we just signed for $41.7 million, and we've been spending on those contracts since the end of 2024. I think we had $1.5 million in 2024, $3.5 million in 2025. We've already booked almost $10 million. That's going to start to wind down by the end of the next quarter, this quarter that we're in now. At the same time, we're going to be ramping up spending on new contracts, including the one we just signed, and then we're anticipating additional contracts to be signed this year as well. I think the answer to your last question is yes.

[Jon Panzer, CFO at Hyliion Holdings]

The old contracts, if I can call them that, will start to wind down this quarter because we'll have spent that money, and the new contracts will start up in Q4 of this year. Then those will accelerate in 2027 and 2028. But I do want to reiterate, we do expect to sign more contracts in 2027 and 2028. So what we expect to see is layering of incremental government military contracts on top of each other, which will enable steady, continuous revenue growth on our R&D services line over time.

[Jon Panzer, CFO at Hyliion Holdings]

Then maybe one other caveat, some of those contracts will turn into more, it won't be R&D, they'll actually be commercial systems. For example, base power or forward operating base power. Those will be R&D initially, but then they will just turn into commercial units of special types for the military. So again, we should see growing revenue over time. The $41.7 million contract we just signed, the bulk of that will be spent over 2027 and 2028.

[Edward Jackson, Analyst at Northland]

Okay. All right. Thanks for all the clarification. Congrats on the quarter.

[Jon Panzer, CFO at Hyliion Holdings]

You bet. Thanks, Ted.

[Operator]

As a reminder, if you would like to ask a question, please press star one to raise your hand. We have reached the end of our Q&A session. I will now turn the call back to Thomas for closing remarks.

[Thomas Healy, CEO at Hyliion Holdings]

Thank you all for joining today's call. As we highlighted, a lot of exciting work happening, customer demand, both with military commercial customers, specifically the data center front. We're seeing data centers really viewing this as a viable technology to meet this power need that they have. We're excited to get some of our early units out there into their operations to really showcase the product benefits.

[Thomas Healy, CEO at Hyliion Holdings]

Coupling to that, being able to highlight more on the roadmap ahead of what scaling additive manufacturing looks like. We believe we, with these breakthroughs, have had a very economical way to scale the business going forward, and are excited about the state-of-the-art nature of what these machines are looking like. With that, thank you for joining this quarter, and we look forward to updating further on earnings calls ahead.

[Operator]

This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Greg Standley, Chief Accounting Officer
• Thomas Healy, CEO
• Jon Panzer, CFO

Analysts

• Sean Milligan, Analyst at Needham & Company
• Edward Jackson, Analyst at Northland