• Q4 2024 Revenue: $75.1 million, a 14% decrease compared to Q4 2023.
• Full Year 2024 Revenue: $302.3 million, a 9% decrease compared to 2023.
• Q4 2024 Gross Margin: $14.3 million or 19% of revenue, up from $8 million or 9% in Q4 2023.
• Full Year 2024 Gross Margin: $57.6 million or 19% of revenue, up from $48.9 million or 15% in 2023.
• Q4 2024 Adjusted EBITDA Loss: $1.8 million, improved from a loss of $10 million in Q4 2023.
• Full Year 2024 Adjusted EBITDA Loss: $11.2 million, improved from a loss of $21.5 million in 2023.
• Cash and Cash Equivalents at End of 2024: $37.6 million, down from $54.9 million at the end of 2023.
• Net Cash Provided by Operating Activities 2024: $7.2 million, marking positive cash flow from operations.
• Net Cash Provided by Investing Activities 2024: $4.5 million, driven by proceeds from the sale of investments.
• Net Cash Used in Financing Activities 2024: $25.2 million.
• Divestiture Transaction Value: $75.1 million or EUR69.5 million, with potential earn-outs of $6.5 million or EUR6 million.

• Warning! GuruFocus has detected 6 Warning Signs with WPRT.

Release Date: March 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Westport Fuel Systems Inc (NASDAQ:WPRT) announced a significant transaction to divest its light-duty business, which is expected to strengthen its financial position.
• The company reported improvements in gross profit and gross profit margins for both the fourth quarter and full year of 2024.
• Westport Fuel Systems Inc (NASDAQ:WPRT) achieved positive net cash from operations for the first time, marking a significant milestone.
• The company is focusing on high-growth areas such as HPDI technology and high-pressure controls and systems, which are expected to drive future growth.
• The divestiture will allow Westport Fuel Systems Inc (NASDAQ:WPRT) to streamline operations and focus on hard-to-decarbonize segments of the heavy-duty transport and industrial markets.

Negative Points

• Westport Fuel Systems Inc (NASDAQ:WPRT) experienced a 9% decrease in revenue for the full year of 2024 compared to the previous year.
• The company reported an adjusted EBITDA loss of $11.2 million for the full year, although this was an improvement from the previous year.
• Cash and cash equivalents decreased from $54.9 million at the end of 2023 to $37.6 million at the end of 2024, primarily due to debt payments.
• The company projects that its cash and cash equivalents will not be sufficient to fund operations for the next 12 months under the current business plan.
• Westport Fuel Systems Inc (NASDAQ:WPRT) faces challenges in the adoption of its technologies, with the need to secure additional OEM partnerships to drive growth.

Q & A Highlights

Q: Can you provide an overview of the unit trends for HPDI in Q4 and expectations for 2025? A: We saw an increase in Q4 volumes due to our OEM customer ramping up production. This trend is expected to continue into 2025 as the market adopts the technology. The business is growing as planned, and we feel positive about its trajectory. - Daniel Sceli, CEO

Q: What is the status of bringing additional OEMs into the HPDI joint venture? A: Efforts to engage additional OEMs are ongoing and gaining momentum. We are actively in discussions with potential partners, and there is a noticeable shift in the market towards natural gas solutions, which is encouraging for our technology. - Daniel Sceli, CEO

Q: How much debt is associated with the light-duty business being divested? A: Nearly all the debt, except for approximately $7 million, is tied to the light-duty business. This debt will be removed from our balance sheet post-divestiture. - Bill Larkin, CFO

Q: Can you clarify the enterprise value of the light-duty business sale? A: The sale price of $73 million is net of everything, and the debt will be offset against the cash. The enterprise value of the whole transaction is over $100 million. - Bill Larkin, CFO

Q: What is the strategy for the remaining business post-divestiture, particularly regarding revenue growth? A: We are focusing on two main areas: increasing HPDI volumes as planned and expanding our high-pressure controls and systems business, particularly in the hydrogen and natural gas markets. We are pivoting to leverage our technology in the compressed natural gas market in North America. - Daniel Sceli, CEO

Q: What types of M&A opportunities are you considering, and is the focus on North America or global expansion? A: We are looking to expand our high-pressure controls into a full system capability, with a significant opportunity in North America. However, this is a global business, and we aim to shift from a component to a systems play. - Daniel Sceli, CEO

Q: Do you have the R&D capabilities in-house to support your strategic goals, or will you need to expand your team? A: Our high-pressure controls group, based in Cambridge, Ontario, is fully equipped to operate independently and support our technical and business development needs. - Daniel Sceli, CEO

Q: How do you plan to manage costs and maintain operational discipline moving forward? A: We are committed to managing our business with discipline and excellence, focusing on strategic decisions and operational execution while tightly controlling costs. Our team is motivated to execute our strategy effectively. - Daniel Sceli, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.