Hyliion NYSEAMERICAN: HYLN reported second-quarter revenue growth driven by research and development services for U.S. Navy work, raised its full-year revenue outlook and highlighted a new $41.7 million Navy contract as it advances commercialization of its KARNO Power Module technology.
Revenue for the quarter was $4.9 million, compared with $1.5 million in the second quarter of 2025 and $2.8 million in the first quarter of 2026. Chief Financial Officer Jon Panzer said the increase primarily reflected production of components for an 800-kilowatt KARNO Power Module being built for the Office of Naval Research.
The company posted gross profit of $366,000 on cost of revenue of $4.6 million. Its net loss was $13.9 million, compared with a $13.4 million net loss a year earlier. Operating expenses were $15.7 million, roughly flat year over year, while research and development spending declined 6% to $9.5 million.
Navy Contract Meets Military Award Goal
Chief Executive Officer Thomas Healy said Hyliion secured its largest military contract to date during the quarter: a $41.7 million award from the U.S. Navy to scale KARNO Power Modules into multi-megawatt systems.
Under the contract, Hyliion expects to deliver two modules, one rated above 2 megawatts and another above 3 megawatts. Healy said both systems will use the company’s existing modular 800-kilowatt architecture, which is also being developed for data-center applications and the USX-1 Defiant autonomous Navy ship.
The award alone fulfills Hyliion’s prior goal of securing $40 million to $50 million in new military contracts during 2026. The company said it expects to close additional awards before year-end, including an approximately $7 million contract from another military service branch, bringing total new awards close to $50 million for the year.
Panzer said the company’s earlier military contracts, totaling roughly $20 million before the latest award, are expected to wind down during the current quarter. Work under the new Navy contract is expected to begin ramping in the fourth quarter, with most activity occurring in 2027 and 2028. He added that Hyliion expects future government contracts to layer onto existing work and, over time, include deliveries of commercial power systems rather than solely R&D services.
Commercial Deployments and Data-Center Interest
Hyliion said it is completing a set of design enhancements before moving early systems to customer locations. The changes include airflow and cooling improvements, upgraded insulation blankets, an improved piston, and software and controls updates. The first commercial customer unit has been upgraded and is expected to be the first deployed at a customer site.
The company continues to expect to complete approximately 10 KARNO cores in early adopter units this year. Its first customer-site deployment is expected to begin during the next quarter, with multiple units going to the initial site. Hyliion also plans a subsequent data-center deployment, while the remaining units are primarily Navy assets, including four cores for the 800-kilowatt system intended for the USX-1 Defiant.
Healy said the initial data-center deployment this year will use a 200-kilowatt system. The customer ultimately has interest in a multi-megawatt product, he said, but the smaller deployment is intended to allow customers to evaluate the technology before larger-scale orders. Hyliion expects to reach its 200-kilowatt power target by year-end, with regenerator design work remaining a key focus.
The company said it has non-binding letters of intent representing about 750 KARNO cores, which Healy said equates to roughly $400 million of potential revenue at current pricing. Those LOIs remain subject to definitive purchase agreements. Healy said the company is also in discussions with hyperscalers and data-center builders about potential deployments ranging from tens of megawatts to hundreds of megawatts.
For 2027, Hyliion plans to prioritize military deliveries and deploy 200-kilowatt modules at data-center AI test facilities. The company said those deployments may be structured as sales, loaned units or power purchase agreements. Its first multi-megawatt KARNO system for data-center customers is planned for 2028.
Additive Manufacturing Throughput Targeted for Improvement
Hyliion said it identified software, printer-operation and part-design improvements that it believes could increase additive manufacturing print speed and throughput by as much as three times, depending on the part. The company cautioned that the potential improvement remains under validation and will require further testing.
Healy said Hyliion’s existing fleet of 30 printers, including printers already on order, could support up to 15 megawatts of annual KARNO core production capacity once the improvements are incorporated. The company estimated that about $1.5 million of investment in printers and related manufacturing equipment could support roughly 1 megawatt of annual KARNO Power Module capacity. At current expected pricing, Hyliion said that 1 megawatt of annual capacity represents approximately $2.5 million to $3 million in annual revenue.
The company signed a beta machine agreement with Colibrium Additive, a GE Aerospace company and the manufacturer of Hyliion’s printers, to collaborate on next-generation additive manufacturing systems. Healy said Hyliion has enough leased space at its Austin, Texas, facility to add hundreds of additional printers and expects printer lead times could fall to a low number of quarters or potentially months.
Panzer said the manufacturing progress could enable Hyliion to restart printer purchases in 2027, earlier than its previously expected 2028 timing. The company has not finalized its 2027 capital spending plan.
Outlook Raised as Cash Spending Expectations Improve
Hyliion raised its 2026 revenue outlook to about $15 million from a prior range of $10 million to $15 million. Panzer said the new forecast reflects a faster-than-expected ramp in Navy R&D services. The company recorded $7.8 million in revenue during the first half, compared with $2 million in the first half of 2025.
Third-quarter revenue is expected to be approximately in line with the second quarter, at just under $5 million. The company generated $3.5 million in total revenue during 2025.
Hyliion ended the second quarter with $132.4 million in cash and short- and long-term investments. Cash use during the quarter was $6.9 million, down from $13.5 million a year earlier. The company expects second-half capital spending to be about $2 million, similar to its first-half spending, compared with nearly $24 million in total capital spending in 2025.
The company continues to expect an equipment-financing transaction this year, potentially generating $10 million to $15 million in proceeds. It now expects to finish 2026 with $115 million to $120 million of cash and investments, compared with its prior expectation of approximately $100 million. Panzer also said Hyliion is establishing an at-the-market equity program to provide financial flexibility, while stating that the company intends to consider capital needs and potential shareholder dilution carefully.
About Hyliion (NYSEAMERICAN:HYLN)
Hyliion Holdings Corp. 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.
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