Westport Reports Second Quarter 2025 Financial Results

Executive Summary

• Westport Fuel Systems reported Q2 2025 financial results, highlighting a strategic transformation following the divestiture of its Light-Duty Segment, which closed on July 29, 2025.
• The company reported a net loss from continuing operations of $5.1 million for Q2 2025, compared to a net income of $4.1 million in the prior year period, driven by a $13.3 million gain on deconsolidation in the prior year and decreased gross margins.
• The divestiture generated $62.5 million in net proceeds, allowing Westport to reduce outstanding debt by approximately $24.3 million and refocus on its High-Pressure Controls & Systems and Cespira joint venture businesses.

Key Details

• Financial Results (Q2 2025):
  • Revenues: $12.5 million (down 11% from $14.1 million in Q2 2024).
  • Net loss from continuing operations: $5.1 million (vs. net income of $4.1 million in Q2 2024).
  • Adjusted EBITDA: Negative $1.0 million (vs. negative $2.0 million in Q2 2024).
  • Cash and cash equivalents: $6.1 million at quarter-end.
  • Net loss per share (diluted): $1.98.
• Divestiture of Light-Duty Segment:
  • Closed on July 29, 2025.
  • Total net proceeds: $62.5 million (€53.6 million).
  • Proceeds breakdown: $41.2 million initial cash, $8.5 million deferred payments (expected Sept 2025), and $12.8 million held in escrow.
  • Potential earnouts of up to $3.8 million available based on specific conditions.
  • Escrow release schedule: Four tranches by year-end 2025, Jan 2026, Jan 2027, and May 2027.
  • Debt reduction: Outstanding debt reduced by ~$24.3 million due to the debt-free, cash-free nature of the transaction.
• Segment Performance:
  • High-Pressure Controls & Systems: Revenue of $2.9 million (down from $3.6 million in Q2 2024). Gross profit decreased to $0.1 million. Manufacturing operations relocating from Italy to Canada and China in Q3 2025.
  • Heavy-Duty OEM: Revenue of $9.6 million (down from $10.5 million in Q2 2024). Gross margin improved to 7% (vs. 12% in Q2 2024), aided by $1.5 million in supplier credits.
  • Light-Duty (Discontinued): Reported revenue of $76.4 million for Q2 2025. Included a write-down loss of $30.2 million for classification as discontinued operations.
• Cespira Joint Venture (Equity Method Investment):
  • Westport recorded a loss from investments of $3.7 million in Q2 2025.
  • Cespira reported revenue of $12.0 million for Q2 2025 (up 193% from $4.1 million in Q2 2024).
  • Cespira reported a net loss attributable to the Company of $3.7 million for Q2 2025.
• Strategic Initiatives & Operations:
  • Cespira: Focus on heavy-duty transportation; HPDI fuel systems on ~9,000 trucks in Europe; 25% YoY growth in 2024. Testing CNG storage/fuel supply solutions for North America.
  • China Expansion: Plans to open a Hydrogen Innovation Center and manufacturing facility in late 2025 to serve the growing hydrogen market.
  • Manufacturing Relocation: European manufacturing operations relocating to Canada to align with the North American innovation hub.
  • Market Context: Highlighted resurgence of natural gas (LNG/CNG) in transportation due to cost advantages over electrification in heavy-duty applications and regulatory shifts (e.g., California pausing Advanced Clean Fleets).

Notable Quotes

• “We made significant progress in advancing our strategic transformation this quarter, culminating in the recent successful divestiture of our Light-Duty Segment on July 29, 2025. This transaction strengthens our balance sheet and sharpens our strategic focus on high-impact opportunities in commercial transportation and industrial applications...” — Dan Sceli, Chief Executive Officer