Earnings call transcript: Cavendish Hydrogen sees revenue drop in Q2 2025

Cavendish Hydrogen ASA (CAVH) reported a decline in Q2 2025 revenues to €5.6 million, down from €9.2 million the previous year, continuing a challenging trend with revenue declining 23% over the last twelve months. Despite this, the company saw a 32% improvement in EBITDA, reaching €4.6 million. The stock price rose by 1.95% following the earnings report, closing at €7.85. According to InvestingPro analysis, the company appears undervalued at current levels, though its overall financial health score remains weak. The company remains optimistic about its long-term prospects in the hydrogen mobility market.

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Key Takeaways

• Cavendish Hydrogen’s Q2 revenue fell significantly compared to last year.
• EBITDA improved by 32%, indicating better operational efficiency.
• The company is focusing on expanding its hydrogen fueling stations.
• The stock saw a 1.95% increase post-earnings announcement.
• Cavendish remains cautious about new station deliveries for 2025.

Company Performance

Cavendish Hydrogen’s performance in Q2 2025 was marked by a notable drop in revenue, attributed to fewer equipment deliveries and lower project activity. However, the company achieved operational efficiencies, resulting in improved EBITDA. The hydrogen mobility market is expanding, with Europe, particularly Germany, leading infrastructure development. Cavendish aims to capture 15% of the high-capacity hydrogen fueling market in Europe and the Americas.

Financial Highlights

• Revenue: €5.6 million, down from €9.2 million in Q2 last year
• EBITDA: €4.6 million, a 32% year-over-year improvement
• Cash Balance: Close to €29 million

Outlook & Guidance

The company has expressed a cautious outlook for the remainder of 2025, with expectations of zero new station deliveries. Despite this, Cavendish is optimistic about the heavy-duty transportation hydrogen market, planning to commercialize its next-generation stations by 2025. Analyst consensus shows a significant upside potential, with a target price of $2.09, though InvestingPro data indicates the company is burning through cash rapidly. Future EPS forecasts indicate continued challenges, with expected losses of $0.80 per share for FY2025.

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Executive Commentary

Ror Gurin, CEO of Cavendish Hydrogen, emphasized the company’s commitment to reducing emissions in mobility, stating, "We are in the business of ending emissions from mobility." He also highlighted hydrogen’s advantages over fossil fuels, noting, "Hydrogen has a strong advantage over fossil fuels like, for instance, no emissions."

Risks and Challenges

• Market Saturation: The hydrogen mobility market is competitive, with several players vying for market share.
• Economic Pressures: Macroeconomic conditions could impact funding and expansion plans.
• Regulatory Changes: Future regulations could influence hydrogen infrastructure development timelines.

Q&A

During the earnings call, analysts inquired about Cavendish’s strategies for accelerating order intake and managing its cash runway. The management responded by highlighting the hiring of a new Chief Commercial Officer and restructuring the sales organization to better capture market opportunities.

Full transcript - Cavendish Hydrogen ASA (CAVEN) Q2 2025:

Ror Gurin, CEO, Cavendish Hydrogen: Good morning, everyone, and welcome to Cavendish Hydrogen’s Q2 presentation. My name is Ror Gurin, and I am the CEO of Cavendish Hydrogen. And with me today, I have our CFO, Markus Halland. This presentation will last for approximately twenty five minutes, and there will be a live Q and A session after the presentation. Most of you know us pretty well by now, but for those of you who are not familiar with us or new to our company, I will start out with a brief introduction before I move on to the Q2 business update.

We, Cavendish Hydrogen, are in the business of ending emissions from mobility, and we do this through reliable hydrogen fueling solutions across the world. So again, why then are we talking about hydrogen in the first place? Well, hydrogen has a strong advantage over fossil fuels like, for instance, no emissions. And this is something that we see as an absolute, I would say, almost like a hygiene factor in the modern vehicle industry of today. But there are more advantages, especially over battery electric vehicles where the hydrogen vehicles have a longer driving range, where a well functioning truck of today needs to have a range of above 800 kilometers in one charge or one refill.

And finally, the grid connection needed to install a hydrogen fueling station for heavy duty mobility is significantly smaller than the grid connection needed for a heavy duty electrical charger, which is able to charge a truck in the comparable time. And this is especially important in today’s environment where the load on the grid, the general grid is getting higher and higher. And of course, the less demanding installation is, the better it is and the easier it is to get the connection to the grid. So in Cavendish, we offer the complete scope of equipment required for installation of a fueling station. If we start at the lower left end, we have the connection panel.

And this is the interface for where we connect the hydrogen that is coming into a fueling station. And this can be a pipeline, it can be a trailer that comes and connects to the panel, it can be an electrolyte or something else. And then we have the hydrogen storage if you move over to the first dot on the right. The storage size depends on the type of connection you have. If you have your station connected to a pipeline, obviously, your storage can be smaller and so on.

And then we have the actual fueling station. And the fueling station is sort of the main act. This is where we have all the control and the compression and the cooling of the hydrogen before it can go into the dispenser, which is the last point you have there. And the dispenser, that is the interface to the vehicle where the operator is basically taking the hose, as you know, from a normal fueling station and connect it to the car. And then a number of minutes later, you are ready to go again.

So that’s the sort of the equipment range that we are supplying. And services on the services side, we are supplying services all the way from design and manufacturing down to operational services. So we you should be able to call it a once one shop stop or or something like that. So moving ahead, as many of you know, Cavendish was publicly listed on the Oslo Bosch in 2024. At the IPO, we stated a few things, where we said that in 2023, we initiated the development of the high capacity stations for heavy duty mobility.

And today, we are proud to say that the engineering design and the bill of materials are close to be completed, and we the product is now ready for pilot sales. We said at listing that we have and we will continue to capitalize on insights derived from the light duty market to standardized products and to derisk the high capacity fueling business case. And today, the design of new equipment, new high capacity hydrogen fueling stations have fully integrated the experience that we have gained from the light and medium duty fueling stations, which ensures reliability and operational robustness. And this is just something that you can also see now in the numbers where, for instance, I will come back to that later, but in this quarter, we have record high numbers dispensed worldwide, and we are also seeing really, really high availability numbers on our stations. And product happiness is significantly going up.

So that’s really positive. We also said that our next generation hydrogen fueling stations are expected to be commercialized by 2025. And again, as I said before, the product is now ready for the pilot sales phase. So that’s positive. The ambition at listing was to capture 15% of the high capacity market for hydrogen fueling in Europe and Americas, and the ambition remains.

We see Europe as a front runner, and this is, of course, thanks to the current tender activity that we see increasing and, of course, also thanks to the regulatory signals like the alternative fuels infrastructure regulation and the RED3, the renewables energy the renewables energy directive three, which is also really favoring hydrogen as fuel for heavy duty transportation. So moving on, I will now take you through the latest business update for the second quarter. And as I just mentioned before, we had an all time high dispensed volume of hydrogen, close to 300,000 kilos of hydrogen went through Cavendish equipment in the second quarter. So we are well on our way to have a year where we have above 1,100,000, 1,200,000 kilos dispensed across the world. And this is really, of course, a testament to that the equipment is being used and utilized and that the availability numbers are increasing all over the place.

We opened two new fueling stations in California together with a major U. S. Customer, and these were the first two stations with this customer. We are very proud to be able to do this, and the two stations are working fine, I’m coming back to that a little bit later. We also appointed a new Chief Commercial Officer to make sure that we are ready to grab the market opportunity out there and to increase our sales activities moving forward.

And if we are zooming in on the dispensed volumes, as earlier stated, this quarter, we again dispensed a record high volume through Cavendish installed equipment. Looking at it from a global perspective, we had a 41% increase year over year compared to last year. And this is a lot driven by higher utilization in the North American market, but also increases in Europe mainly. So we see that this is really going in the right direction. In North America, we are really happy to see that we have a close to 400% increase since the last quarter.

And this is really showing that hydrogen is now again back on the map in California and is being utilized after the hydrogen shortage seems to have been sort of resolved over there. Yeah. Last but not least, of course, the key takeaway here is that the higher utilization and reliable operations is, of course, also paving the way for future sales. So moving on to the operational part of the business. We have handed over or completed two sites together with our U.

S. Customer, and these are the two first sites that we have completed during the second quarter. And the third one is to be completed during or before the end of the year. In Italy, we are in the progress of installing our first Italian station ever, and it will be completed in the third quarter and be ready for the Winter Olympics in February 2026, where this station will be filling buses and cars for transporting of the athletes during the Olympic Games. So this is a pretty cool station up there.

In France, we are about to complete the installation and handover of our fourth station with also a new customer on the France French market. So quite some activities going on. And zooming in specifically on the two stations we opened up in Moreno Valley and Vacaville in California. Moreno Valley in the Southern part of California and Vacaville a little bit further up north. The stations are engineered to deliver, of course, industry leading performance, and the stations opened in the second quarter mid part of the second quarter twenty twenty five.

And since then, we have seen really good availability numbers and performance from these stations, where the site availability have been close to 100% on the locations. We have served more than 3,000 vehicles as of August 2025, and we have filled close to 9,000 kilos in those first few months of operation. So we can see that it’s positively received by the end users in California that there are new and operational stations in the market, and we are proud to be able to help this build out in the California market. We have as said before, we have excellent feedback from the end users where we really can see on, for instance, social medias that they are happy to have new stations coming into operation and also that these stations are being utilized. The third station is in construction as we speak and is expected to be completed before the end of the year, and that’s with the same customer in The United States.

So moving over to Europe and to Germany, where we see that Germany plans to build a large number of new hydrogen bus stations, which is signaling a robust infrastructure investment on the German market. The national and regional policies in Germany like the RED three, like that’s Renewable Energy Directive three, they are highly favorable for hydrogen adoption and which also helps accelerating the German market readiness. Cavendish has already installed two high performing bus stations in Germany, and each of these two stations are delivering a constant filling performance. On the customer side, they are actually demanding products and configurations that are highly aligned and a pretty good product fit with what Cavendish is currently supplying on the bus within the bus segment, where our equipment is perfect for a normal sized bus fleet of somewhere between 20 to 35 buses. So a very good product fit for the German market.

So in the end, we believe that Germany sets a really good example and forms a platform for a broader European expansion, which is backed both by demand from the customer and policies from the government and performance from ARC stations. So we believe that Germany could be something that we will come back to later. Moving ahead. We also, of course, mentioned in our report this quarter that we both see challenges, but there are also good signals out there. And obviously, the uncertain geopolitical climate is something that is affecting every business out there right now.

There are wars ranging around in the world and also on the borders of Europe. So that has a potential effect, sort of a slightly slowing down effect on decision making. We also see high energy and hydrogen prices that are affecting the customer business case, so the end customer business case. But also here, we see changes coming on the horizon. We see a lack of commitment or a delay from heavy duty hydrogen vehicle OEMs, where the vehicles are seemingly coming later than originally anticipated.

And we also see markets where we have incomplete or maybe inconsistent funding structure. And to put a few more words around that, that means that, for instance, you can have a region where you have CapEx funding. So it’s good to build the station, but there’s no OpEx funding. So the offtake of the hydrogen is not subsidized. So you have part of the business case subsidized, but not the end offtake subsidized.

And then but on the other hand, as I mentioned on the slide before, in the German markets, they seem to have understood that the whole value chain needs to be subsidized, and there are good funding initiatives in place. So good. So we see challenges, but of course, also good signals on the horizon. And still, AFIR is out there, alternative fuels infrastructure regulation, which mandates that one hydrogen refueling stations, heavy duty refueling station needs to be built every 200 kilometers along the Trans European transport network and in all European urban nodes. The AFIRI forces member states to define and submit targets for build out of hydrogen fueling networks, and they need to do that by the end of this year.

And already now, 11 member states have submitted their national policy frameworks under which they have also introduced the national targets for this. So and as mentioned before, the RED, the Renewable Energy Directive three is in Germany has been taken into legislation as well, and it also sets mandates for pushing hydrogen as a fuel in transport and specifically heavy duty transport. And just as a reminder, again, this is the timeline for those of you who don’t remember the timeline for alternative fuels infrastructure regulation. Last year, December, the the deadline for submission of the draft national policies were due. And in by the end of this year, the the the deadline for for the actual final national policy

And already now, as I said, 11 countries, member states of the European Union have submitted the targets their targets. So we are still waiting for the last ones, but already ahead of time, we see someone submitting their targets. So with that, I would like to hand over to Markus, our CFO, for a quick walkthrough of the key figures for the second quarter.

Markus Halland, CFO, Cavendish Hydrogen: Thank you, Robert. Let me try to shed some light on the financial performance in the second quarter. The revenues ended at EUR 5,600,000.0, a reduction from EUR 9,200,000.0 in the second quarter last year. And that reduction is a result of fewer equipment deliveries to customer. And also at the same time last year, we had a record high amount of simultaneous ongoing installation projects.

So the project revenue this quarter is lower due to the lower activity. There is a growth from the first quarter this year, and that is because of actually higher progress on installation projects currently. We have progress on the two stations in The U. S. That was completed and two projects in Europe that is to be completed now in the second half of the year.

The EBITDA were EUR 4,600,000.0, a development that is 32% better than the same quarter last year. Last year quarters included costs from the listing process of Cavendish. The EBITDA has a negative effect from lower sales volumes, and that is partly offset by lower indirect cost as a result of the restructuring that was completed in the first quarter this year and continued tight cost control. We continue to see improved margins on our service business due to operational improvements that leads to lower costs from running the stations. For the order intake and backlog, we have not succeeded with selling new stations in this quarter.

So the order backlog is not being replenished at the same rate as we use it. As Robert said, it is a challenging market, and that is evident that customer decisions are taking longer time than what we anticipate. On the positive side, the tender activity in Europe is increasing, and we expect that our proven, reliable operational performance will have positive influence on the customers’ decision time. With the decreasing order backlog, our financial outlook for the second half of the year is cautious. We expect to have zero new stations deliveries, so the equipment revenue will be lower, while the revenue from the ongoing installation projects and the service business will be at similar levels as the first half of this year.

And finally, we ended the second quarter with a solid cash balance of close to EUR 29,000,000.

Ror Gurin, CEO, Cavendish Hydrogen: Great. Thank you, Markus, for that financial summary. We are now going over to a short summary and outlook, and then we will, after that, go into the Q and A session. But as Markus said before, Q2 largely expect or ended as expected. Our fueling stations are operating steadily at customer sites around the world, and we see positive feedback through channels like social media, Facebook, LinkedIn, etcetera, where people are posting positive comments now on our equipment, which is really, really good to see and also good to see that there is activity out there also, for instance, on light duty filling market in California.

We as you said, we see positive signals in the challenging hydrogen market with examples like the RD three being taken into legislation in Germany and the AFIRI is still standing strong in the European Union with 11 countries already submitting their plans. Have a financially, we have a cautious outlook for the remainder of the year, but we see positively on the long term market outlook for heavy duty transportation. And as Cavendish, we are well positioned to take on the long term market opportunities. So with that, we are done with the main part of the presentation. And I just wanted to remind you that the third quarter presentation will be in November later this year.

And with that said, we are opening up for our Q and A session. And just from a practical point of view, we would like to remind you to raise your hand if you have a question. Tell us who you are and in case you’re representing someone, who you’re representing. And remember to unmute the microphone on your end before you speak. So we are now opening up for any questions that might be.

So, Lars, if you please unmute and then state who you are and where you’re coming from and what your question is?

Lars, Equity Research Analyst, Fernley Securities: Yes. My name is Lars, and I’m working as an equity research analyst in Fernley Securities. I was just wondering like what specific measures is management taking to accelerate new order intake and rebuild the backlog, especially given customers’ delays and cancellations in the market? Thank you.

Ror Gurin, CEO, Cavendish Hydrogen: Thank you, Lars, very much for that question. Well, as we presented earlier in the presentation, we have onboarded a new Chief Commercial Officer, who is also sort of restructuring the whole commercial team and the commercial organization, so the sales organization, where we are also currently onboarding more members, so more hands and legs in relation to being out and meeting the customer. We believe that being close to the customer is really key to understanding the customer decision process, but also being able to close orders together with the customers. So that’s the main initiative.

Lars, Equity Research Analyst, Fernley Securities: Thank you.

Ror Gurin, CEO, Cavendish Hydrogen: Yeah. Thank you. Any other questions? Yeah. We will give it another few minutes for if anyone is coming up with a question.

And maybe as a completing information to your question before also, Lars, we also have introduced a separate team called application engineering that is working closely in line with the sales organization to make sure that we are fast on the customer feedback in relation to technical requests and potentially also smaller configuration and adaptation requests that might come from a customer so that we are always on the toes and close to the customer also from the technical perspective. So so that’s also something that we have since our restructuring introduced, and we see that that gives us a better connection to the customer.

Lars, Equity Research Analyst, Fernley Securities: Yes. I I can also just one more question. Like, how how comfortable how comfortable are you with the current cash runway going forward? Like, what’s your what’s your expectations?

Markus Halland, CFO, Cavendish Hydrogen: We we have we have a comfortable cash balance currently, and we took some pretty drastic measures in the first quarter with the restructuring, which, of course, has improved our cost basis. But, of course, we are actively doing, adjustments as needed, and of also targeting short term sales opportunities is key, key for us.

Ror Gurin, CEO, Cavendish Hydrogen: Yeah. Absolutely.

Markus Halland, CFO, Cavendish Hydrogen: Yeah. But we have a robust and solid cash balance at the moment.

Lars, Equity Research Analyst, Fernley Securities: Yes. Thank you.

Ror Gurin, CEO, Cavendish Hydrogen: Thank you very much. Thank you very much. So it seems like there are no more questions and that the presentation was clear to everyone participating. Of course, there is always the opportunity to mail additional questions to ir cavandish h dot com if there are any questions that might come up afterwards and that you would like to have the answer on. And we encourage everyone who has questions to also do that afterwards.

So but with that, we would like to say thank you to everyone for logging on this morning, and have a great day. And we see you again for the third quarter presentation in November. So thank you, everyone, and have a great day.

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