How are energy investors positioned?
Introduction & Market Context
Hyliion Holdings Corp (NYSE:HYLN) presented its second quarter 2025 earnings on August 13, highlighting progress with its KARNO power generation technology while acknowledging delays in full commercialization. The clean energy technology company’s stock has struggled in recent months, trading at $1.57 at market close on August 12, up 7.64% for the day but still near its 52-week low of $1.11.
The company emphasized potential benefits from the recently passed "One Big Beautiful Bill Act," which provides a 30% Investment Tax Credit for businesses deploying linear electric motors or fuel cells – a key component of Hyliion’s technology strategy.
As shown in the following slide highlighting the policy benefit and KARNO system:
Quarterly Performance Highlights
Hyliion reported modest R&D service revenue for Q2 2025, with a gross margin of $0.1 million. The company’s financial results showed continued investment in product development, with higher R&D expenses partially offset by lower SG&A costs. The company also recorded a $0.3 million gain related to sales of powertrain assets.
The detailed financial results are presented in this table from the earnings presentation:
Cash utilization for the quarter totaled $13.5 million, with capital spending of $4.3 million. Hyliion ended Q2 with $185.3 million in cash, providing runway through its commercialization phase. The company projects total cash use of approximately $65 million for 2025, down from $79.6 million in 2024.
The following chart details the company’s cash use projections:
Strategic Initiatives & Partnerships
Hyliion’s presentation highlighted several key partnerships that validate its technology. The company delivered its second early adopter unit to the U.S. Navy and is nearing completion of two more KARNO Power Modules in the coming weeks.
Military partnerships represent a growing opportunity for Hyliion, with two KARNO units in testing for the U.S. Navy and a Phase II Small Business Innovation Research contract worth up to $1.5 million. The company has also been designated as an "Awardable" technology by the U.S. Air Force and the Department of Defense’s Chief Digital and Artificial Intelligence Office.
The following slide shows Hyliion’s military partnership progress:
On the commercial front, Hyliion announced significant customer agreements, including a potential $1 billion opportunity in Saudi Arabia with Alkhorayef and plans to deploy up to 600 kW KARNO Power Modules in the commercial and industrial sectors with MMR.
These partnerships are illustrated in the following slide:
Financial Analysis
Hyliion’s revised financial outlook reflects ongoing challenges in its transition to commercial production. The company lowered its full-year 2025 revenue guidance to $5-10 million, down from the $10-15 million projected in its Q1 earnings report. This reduction aligns with the company’s announcement that full product commercialization will shift into 2026.
The company also disclosed a tariff impact of $2-3 million and increased its capital expenditure projection to approximately $30 million, up from the previous estimate of $25 million. Despite these challenges, Hyliion maintains a strong balance sheet with $185.3 million in cash, which management believes is sufficient to fund operations through commercialization.
This represents a significant decline from the $198.8 million reported at the end of Q1 2025, reflecting the company’s continued cash burn as it works toward product launch. The company’s production updates show progress with key components:
Forward-Looking Statements
Hyliion’s roadmap for 2025-2026 includes delivering 10 Early Adopter Customer Units in 2025, with full product commercialization now expected in 2026. The company plans to continue building inventory of printed components for KARNO Power Modules to support this timeline.
Management projects reaching gross margin neutral on a cash basis in late 2026, suggesting a longer path to profitability than previously indicated. The delay in full commercialization represents a significant shift in the company’s timeline and helps explain the reduced revenue guidance for 2025.
The company’s roadmap is illustrated in this slide:
While Hyliion continues to make technical progress with its KARNO technology, investors may need to adjust expectations regarding the timeline for commercial success. The stock’s performance, trading near 52-week lows despite the day’s gains, reflects market concerns about the extended path to profitability and reduced near-term revenue expectations.
Full presentation:
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