Ballard Power Systems Q2 Earnings Call Highlights

Key Points

• Ballard plans to acquire GeoPura for £275 million, expanding beyond fuel-cell engine sales into hydrogen production, portable power units, equipment rentals and fuel supply. The deal is expected to close in September, pending regulatory and customary approvals.
• GeoPura is projected to generate about £38 million in 2026 revenue, while Ballard expects roughly $25 million in annual EBITDA synergies by 2028 and believes the combined business could grow three times faster than its prior trajectory.
• Ballard’s second-quarter results improved significantly: revenue rose 15% to $20.6 million, gross margin increased to 20% from negative 8%, operating expenses fell 34%, and adjusted EBITDA loss narrowed to $9.8 million. The company retained more than $502 million in cash and continues targeting profitability by the end of 2027.

Ballard Power Systems NASDAQ: BLDP reported higher second-quarter revenue, improved gross margin and lower operating expenses, while outlining plans to expand beyond fuel cell engine supply through its proposed acquisition of hydrogen power company GeoPura.

President and Chief Executive Officer Marty Neese described the planned GeoPura purchase as a transformative step that would broaden Ballard’s business model into hydrogen production, distribution, portable power equipment and equipment rental services. The transaction remains subject to customary closing conditions and regulatory approvals, with Ballard targeting a September close.

GeoPura Acquisition Expands Energy-as-a-Service Strategy

Ballard has agreed to acquire GeoPura for £275 million in upfront consideration. GeoPura designs, manufactures and operates hydrogen power units, or HPUs, that use Ballard fuel cell engines to convert hydrogen into electricity. The company also produces and distributes compressed hydrogen from electrolysis-based production sites.

Neese said GeoPura operates a fleet of more than 60 HPUs that are rented directly to customers along with hydrogen fuel supply, providing what he characterized as a complete energy-as-a-service offering. GeoPura’s portable units range from 100-kilowatt systems that can be towed by a pickup truck to 500-kilowatt HPU2 power blocks that can be combined for projects requiring up to 50 megawatts.

The combined company would seek to capture a larger share of the hydrogen value chain than Ballard does through standalone engine sales. Neese said Ballard estimates engine sales capture roughly 15% of the value chain on a U.S. dollar-per-megawatt basis, while owning equipment fleets and supplying fuel could provide access to more than 75% of that value.

Management said the acquisition would provide Ballard entry into stationary power and fuel markets, including an estimated $300 billion installed base of diesel generators, a data-center backup-power market estimated at $4 billion, and a hydrogen fuel supply market estimated at $20 billion. Neese said GeoPura’s products have achieved cost parity with diesel in certain U.K. markets supported by policies including the HAR program.

GeoPura has delivered hundreds of tons of green hydrogen and has customers in applications including television and film production, live events and construction. Neese said the company’s operating model is supported by high-margin rental and fuel revenue, with HPUs expected to have operating lives of about 15 years and capital payback periods of less than three years.

Growth and Synergy Expectations

Ballard said GeoPura is expected to generate approximately £38 million, or about $50 million, of revenue in 2026. The company also expects approximately $25 million of annual run-rate EBITDA synergies by 2028 from joint manufacturing, supply-chain integration, vertical integration cost reductions and commercial cross-selling.

Neese said Ballard views GeoPura’s current operations and organic growth as supporting an expected combined revenue growth rate three times higher than Ballard’s prior trajectory. That expectation does not include potential expansion of hydrogen production, fuel sales to heavy-duty mobility customers, data-center opportunities, or HPU sales and rentals in North America, he said.

In response to analyst questions, Neese said Ballard expects to use GeoPura’s approach of working with multinational customers that already operate in the U.K. and Europe to expand into Canada and the United States. Initial North American applications could include film, television, live productions, events and construction projects. The company intends to replicate the rental-and-fuel-supply model over time.

Ballard ended the quarter with more than $502 million in cash and cash equivalents. Neese said the company is also evaluating asset-backed financing structures to support equipment with 15-year asset lives and related cash flows, supplementing its existing balance-sheet capacity.

Second-Quarter Financial Results

Ballard reported second-quarter revenue of $20.6 million, up 15% from the second quarter of 2025. The increase was driven by bus, stationary and other markets, particularly materials handling, according to Chief Financial Officer Kate Igbalode.

• Order intake exceeded $64 million during the quarter.
• Gross margin was 20%, compared with negative 8% a year earlier.
• Total operating expenses declined 34% year over year to $20.9 million.
• Adjusted EBITDA was negative $9.8 million, compared with negative $30.6 million in the prior-year period.
• Cash used in operating activities was $11.4 million, versus $20.3 million a year earlier.

Igbalode said the 28-percentage-point improvement in gross margin reflected product cost-reduction efforts, lower manufacturing overhead and adjustments to warranty and inventory provisions. She said the warranty adjustments were one-time in nature, but stemmed from fuel cell engine reliability and durability that should also support ongoing product costs and margins.

Order intake included transit bus business from previously announced customer wins, including New Flyer, as well as a multiyear commitment for more than 150 fuel cell modules to GeoPura. Igbalode said that after the GeoPura transaction closes, sales to GeoPura would be treated as intercompany transfers rather than external revenue.

Outlook

Ballard did not provide specific revenue, net-income or margin guidance, citing the early stage of market development. The company continues to expect approximately 60% of its annual revenue to occur in the second half of the year.

For the year, Ballard expects total operating expenses of $65 million to $75 million and capital expenditures of $5 million to $10 million. Management said it expects to update its outlook following the anticipated closing of the GeoPura acquisition later this year.

Neese said the company remains focused on reaching profitability by the end of 2027, supported by cost reductions, revenue growth and the expansion into recurring equipment rental and hydrogen fuel supply services.

About Ballard Power Systems (NASDAQ:BLDP)

Ballard Power Systems NASDAQ: BLDP is a Canadian technology company specializing in the development and manufacture of proton exchange membrane (PEM) fuel cell products. Headquartered in Vancouver, British Columbia, Ballard designs and sells fuel cell stacks and modules that enable zero-emission power generation for a variety of applications, including heavy-duty motive systems, backup power, material handling equipment, and portable power solutions.

Since its founding in 1979, Ballard has built a strong intellectual property portfolio and a track record of innovation in PEM fuel cell technology.

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