Nel ASA Q2 2025 presentation: revenue plunges 48% as hydrogen projects stall

Introduction & Market Context

Nel ASA (OSE:NEL), a leading pure-play electrolyser manufacturer, presented its second quarter 2025 results on July 16, revealing significant challenges as the hydrogen sector continues to face project delays and investment hesitancy. Despite maintaining a strong cash position of NOK 1.9 billion, the company reported a substantial revenue decline while accelerating its focus on next-generation technologies to improve competitiveness.

The Norwegian hydrogen technology provider, with over 7,000 electrolyser stacks delivered globally since 1927, is navigating a market where final investment decisions (FIDs) for hydrogen projects continue to be pushed back, despite a growing pipeline of potential projects. The company highlighted improved clarity around US regulations, particularly the 45V hydrogen tax credit secured through January 2028, as a potential catalyst for future demand.

Quarterly Performance Highlights

Nel reported revenue of NOK 174 million for Q2 2025, representing a steep 48% decline compared to NOK 332 million in the same quarter last year. The company’s EBITDA remained negative at NOK -86 million, slightly worse than the NOK -79 million reported in Q2 2024.

As shown in the following financial summary:

Order intake fell dramatically by 74% year-over-year to NOK 71 million, while the order backlog decreased 40% to NOK 1,249 million. The decline was particularly pronounced in the alkaline segment, where order intake plummeted 94% to just NOK 13 million, while PEM segment orders remained stable with a 2% increase to NOK 58 million.

The order intake and backlog trends are illustrated in this chart:

Nel’s alkaline segment was hit hardest, with revenue declining 70% compared to the same quarter last year. A significant setback came from Statkraft’s cancellation of a 40 MW alkaline electrolyser contract. Meanwhile, the PEM segment showed more resilience with revenue in line with the previous year and a modest EBITDA improvement of NOK 5 million year-over-year due to improved gross margins.

Strategic Initiatives

Facing market headwinds, Nel has implemented comprehensive cost reduction measures, including workforce reductions. The company reported a decrease in employee headcount as part of its efforts to preserve cash and extend runway while waiting for market conditions to improve.

The company’s quarterly cash burn rate was NOK 121 million in Q2 2025, as shown in the following chart:

On the commercial front, Nel announced a significant partnership with SAMSUNG E&A, which launched its CompassH2 hydrogen plant solution utilizing Nel’s alkaline technology. The system is designed to deliver world-class efficiency, scalability, and cost-competitiveness.

The CompassH2 solution combines Nel’s electrolyser technology with SAMSUNG E&A’s system-level engineering:

Additionally, Nel signed a Memorandum of Understanding with HydePoint to co-develop modular hydrogen systems for offshore and nearshore environments, potentially opening new market segments for the company.

Technology Development

Nel is placing significant emphasis on next-generation technologies to reduce the levelized cost of hydrogen (LCOH) and improve competitiveness. The company’s analysis shows that while first-generation technology is proven, substantial LCOH reduction is needed for wider market adoption.

The company’s LCOH breakdown for a US Gulf Coast gigawatt-scale project is illustrated here:

Nel’s next-generation pressurized alkaline system promises dramatic improvements, including an 80% reduction in system footprint, 40-60% lower CAPEX, and energy consumption below 50 kWh/kg. The company plans to validate a 6.25 MW prototype in Q3 2025, with commercial product launch scheduled for 2026.

The next-generation alkaline system’s performance metrics are detailed here:

Similarly, Nel’s next-generation PEM stack shows impressive advancements with over 140% higher capacity on the same footprint, approximately 70% reduction in stack CAPEX, and energy consumption below 48 kWh/kg.

The PEM stack improvements are quantified in this comparison:

Forward-Looking Statements

Despite current market challenges, Nel maintains an optimistic long-term outlook for the hydrogen sector. The company highlighted that its project pipeline is large and growing, with several target projects in the 20-200 MW range expected to reach final investment decisions in the coming quarters.

Nel is currently involved in 540 MW of paid Front-End Engineering and Design (FEED) studies for large-scale systems, with EPC partners involved in additional studies. The company expects improved clarity around US regulations, particularly the 45V hydrogen tax credit, to help stimulate demand.

For its next-generation technologies, Nel has outlined a clear roadmap: taking a final investment decision on gigawatt-scale production setup in Q3 2025, validating a 25 MW customer pilot in 2026, launching commercial products that same year, and delivering hundreds of megawatts by 2027.

While the hydrogen market continues to face near-term challenges with project delays and investment hesitancy, Nel’s focus on cost reduction, technological innovation, and strategic partnerships positions the company to capitalize on the sector’s long-term potential as the energy transition progresses.

Full presentation:

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