Earnings call transcript: Cavendish Hydrogen stock drops after Q1 2025 call

Cavendish Hydrogen ASA experienced a significant stock price decline following its Q1 2025 earnings call, with shares falling by 25.86% to close at €11.6. Despite achieving a record 288,000 kilos of hydrogen dispensed, the company’s guidance and market focus left investors wary. According to InvestingPro data, the stock has shown high price volatility, with a -51.67% return over the past year. The company maintains impressive gross profit margins of 51.31%, though analysts don’t expect profitability this year.

Key Takeaways

• Cavendish Hydrogen’s stock price dropped 25.86% after the earnings call.
• Achieved a record high of 288,000 kilos of hydrogen dispensed in Q1 2025.
• No specific revenue figures were disclosed in the earnings call.
• Focus remains on established markets: Europe, US, and South Korea.

Company Performance

Cavendish Hydrogen closed the first quarter of 2025 with a robust cash position of €34.5 million and achieved a record high in hydrogen dispensed. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with a healthy current ratio of 3.97x. However, the data also indicates rapid cash burn, which could impact its strategic position. The company continues to focus on its core markets—Europe, the United States, and South Korea—while not expanding into emerging markets like the Middle East and India. This strategic focus aligns with the company’s emphasis on building and expanding hydrogen infrastructure in regions where it already has a strong presence.

Financial Highlights

• Cash position: €34.5 million at the end of Q1 2025.
• Hydrogen dispensed: 288,000 kilos, marking an all-time high.

Market Reaction

Following the earnings call, Cavendish Hydrogen’s stock plummeted by 25.86%, closing at €11.6. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels. The company’s revenue reached $32.48 million in the last twelve months, with a modest growth of 3.15%. This decline positions the stock at its 52-week low of €4, reflecting investor concerns over the company’s future prospects and lack of disclosed revenue figures. For deeper insights into Cavendish Hydrogen’s valuation and 14 additional ProTips, consider exploring the comprehensive Pro Research Report available on InvestingPro. The market sentiment appears cautious, given the absence of specific guidance and the company’s decision not to pursue expansion into high-growth emerging markets.

Outlook & Guidance

Cavendish Hydrogen did not provide specific financial guidance during the earnings call. However, the company reiterated its commitment to the European, US, and Korean markets, focusing on enhancing infrastructure and monitoring regulatory developments within these regions. The company anticipates growth in the hydrogen mobility segment, although no detailed projections were shared.

Executive Commentary

Robert Bourin, CEO of Cavendish Hydrogen, highlighted the company’s operational achievements, stating, "We have had a new all-time high 288,000 kilos of hydrogen dispensed from our equipment during the first quarter." He emphasized the company’s geographic presence, adding, "We are currently present in the Korean, the European, and the North American market, which is United States and Canada."

Risks and Challenges

• Market Expansion: The decision not to expand into emerging markets like the Middle East and India could limit growth opportunities.
• Regulatory Environment: Changes in infrastructure regulations in key markets could impact operations.
• Revenue Transparency: Lack of disclosed revenue figures may lead to investor uncertainty.
• Technological Competition: Maintaining technological reliability and customer satisfaction is crucial amidst growing competition.

In summary, while Cavendish Hydrogen demonstrated operational success with record hydrogen dispensing, the lack of financial transparency and cautious market strategy contributed to a sharp decline in stock value. The company’s future performance will likely depend on its ability to navigate regulatory landscapes and capitalize on hydrogen mobility growth.

Full transcript - Cavendish Hydrogen ASA (CAVEN) Q1 2025:

Robert Bourin, CEO, Cavendish Hydrogen: Good day, everyone, and welcome to this Q and A session about Cavendish Hydrogen’s First quarter result.

Michael Dahl, Head of Strategy, Cavendish Hydrogen: Okay. That should be working.

Robert Bourin, CEO, Cavendish Hydrogen: Just try one of the other ones too. Can you hear us? I think there is Okay. Yeah. Okay.

Good. Now we’re starting. So let’s take it from the beginning. But hello everyone and welcome to this Q and A session about Cavendish Hydrogen’s first quarter result. Today is 05/15/2025 and my name is Robert Bourin.

I am the CEO of Cavendish Hydrogen and with me today I have our CFO, Markus Hallan. This morning we published a presentation of Cavendish Hydrogen’s first quarter results where the main points for the presentation were that we have several new installations in progress globally. We continue to see enhanced uptime and improved reliability and good customer satisfaction on the delivered equipment, which is really good. We have had a new all time high 288,000 kilos of hydrogen dispensed from our equipment during the first quarter. And we closed the quarter with a solid cash position of EUR34.5 million.

So now we look forward to answering your questions and Michael Dahl, Head of Strategy, will manage the question. So please go ahead.

Michael Dahl, Head of Strategy, Cavendish Hydrogen: Thanks, Robert. So for those of you who want to ask questions, use the raise your hand function and we will call you in and take the next in line. Please start off by stating your name and where you called from. So you can go ahead ask questions.

Robert Bourin, CEO, Cavendish Hydrogen: Yes, so please go ahead and ask questions if there are any. Seems like our morning presentation was absolutely clear, and that’s, of course, positive. We will give it a couple of minutes more to give people time to log on also if there are no other questions in this audience.

Michael Dahl, Head of Strategy, Cavendish Hydrogen: I just need to repeat that. If there are any questions, please raise your hand, and then we’ll unmute you before you can actually activate your microphone. Oh, yeah. Please please raise your hand, and then I’ll unmute you. Exactly.

Yeah. So

Robert Bourin, CEO, Cavendish Hydrogen: if that wasn’t clear, use the raise hand function, which is the hand on top of your Teams window, and, we will see if you have a question, and then you will be unmuted. Oh, there we have one.

Michael Dahl, Head of Strategy, Cavendish Hydrogen: Good. So there’s a question from there, Cliff. Just unmuting here.

Robert Bourin, CEO, Cavendish Hydrogen: So, Cliff, please go ahead.

Michael Dahl, Head of Strategy, Cavendish Hydrogen: And you need to unmute yourself as well.

Robert Bourin, CEO, Cavendish Hydrogen: If we I think you’re still muted on your side, so, you need to unmute.

Cliff, Analyst/Investor: Oh, yes. Yes. Sorry. Yes. I just look at I understand from your report that you, focuses on increase in revenue in the coming quarters.

So I’d like to ask your strategy to expand internationally to some major emerging market like Middle East and India. Yeah.

Robert Bourin, CEO, Cavendish Hydrogen: As as of right now, our strategy is to focus on the European, US, and Korean markets where we are currently present. Within the European market, for instance, we are we have just started up or we are in the middle of construction of a project in Italy. And we are also looking at the alternative fuels infrastructure and infrastructure regulation plans for countries like Spain, for instance, who has quite recently delivered their plans for those countries on how to comply with build out of the high capacity or heavy duty network. So far, we have not looked at entering Middle East or India.

Cliff, Analyst/Investor: I see.

Robert Bourin, CEO, Cavendish Hydrogen: Thank you for the question. A very relevant question.

Cliff, Analyst/Investor: Thank you.

Robert Bourin, CEO, Cavendish Hydrogen: So any other questions? And as we said before, please raise use the raise your hand function, and we will see that you have a question. And then we can unmute you on this side and then you need to unmute on your side. So, Cliff, do you had a have a question more? And again, unmute on your side.

Yes. Cliff, please go ahead.

Cliff, Analyst/Investor: Yes. So following the last, question, so may I shall I understand that you due to the focus for this year, you for international expansion, you are mainly focused in US and Europe market only. Yeah. Yeah. Yeah.

Yes.

Robert Bourin, CEO, Cavendish Hydrogen: As we said, I mean, we we are currently present in the Korean, the European, and the North American market, market, which is United States and Canada. And those markets are currently our core focus areas. And we believe also that those markets are going to be where we see the first growth in the hydrogen mobility segment. So that’s also why we are focusing in these three different geographical regions for now. I could see that there was someone else raising their hand in between, but that disappeared.

You wanted to say something, please raise your hand again, and we will unmute your microphone. Okay. Then I think we can conclude on the Q and A session for today. We thank you very much for logging on to the session today. And please also remember that our presentation from this morning is available on our homepage and on various other trading platforms.

So please have a look at that if there was something that you missed or was unclear about. So we thank you everyone again for logging on this day, and we see you again for the next quarterly report. Thank you very much.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.