Ballard Power Systems envisages a path to underlying profitability by the end of next year as it accelerates revenue growth and expands its hydrogen power fleet.
The Canadian producer of zero-emission fuel cell engines and stationary hydrogen power units, said Thursday it is targeting profitability on the basis of adjusted earnings before interest, taxes, depreciation and amortization by end-2027 and sustained annual profitability throughout 2028.
The company said it is targeting a 30% compound annual growth rate for revenue over the next two fiscal years, and gross margins exceeding 20% in 2027 and greater than 25% by 2028.
Ballard told investors it sees is no immediate need to invest in manufacturing expansion or hydrogen production, and that cash used for operating costs is expected to decrease over time as margins and revenue grow.
The company's business model has grown to add energy-as-a-service to existing equipment sales and services.
It said it plans to allocate between $80 million and $120 million to expand its hydrogen power unit fleet, with options to pace the investment. This capital is expected to be financed through asset-backed finance at greater than 80% loan-to-value, minimizing the cash outlay, Ballard said.
Ballard's revenue from fuel cell products and services rose in the second quarter of the year to $20.6 million, up 15% from C$17.8 million a year earlier. However, it posted a loss from continuing operations of $20.3 million and an adjusted loss before interest, taxes, depreciation and amortization of $9.8 million.
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