- Total revenue was $27.6 million in the quarter, up 29% year-over-year.
- Heavy Duty Mobility revenue of $21.1 million increased 67%, driven primarily by higher revenues from the rail and marine verticals, partially offset by lower revenues in bus and truck.
VANCOUVER, BC– Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial results for the third quarter ended September 30, 2023. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS).
Ballard Power Systems Q3 Results (CNW Group/Ballard Power Systems Inc.)
“We delivered robust revenue growth in Q3, with shipments to our core mobility markets substantially improved both year-over-year and quarter-over-quarter,” said Randy MacEwen, President and CEO. “Revenue generated from Power Products represented close to 80% of total revenues in the quarter, tracking the consistent increase in product revenues as a proportion of our total Order Backlog.”
“Concurrent with our strong revenue growth in Q3, we also delivered a substantial improvement in our gross margin performance. We are pleased with the momentum heading into the fourth quarter as we continue to focus on Q4 deliveries, customer platform wins, order intake for 2024 revenue, and product cost reduction initiatives,” said Mr. MacEwen.
“Amidst an uncertain economic environment, we continue to exercise cost discipline, with Q3 cash operating costs roughly flat and cash burn significantly reduced compared to the prior year. We continue to track to our full-year guidance ranges for operating and capital expenditures, and we ended the quarter with cash and cash equivalents of $781 million,” Mr. MacEwen added.
“We are encouraged by constructive hydrogen policy developments in the US and Europe. The US Department of Energy announced $7 billion in funding for seven selected regional clean hydrogen hubs, six of which have use cases aligned with our target verticals. We expect these hydrogen hubs to support the mid-term availability of low-cost, low-carbon hydrogen – a key enabler for fuel cell adoption. Concurrently, the European Union’s recently proposed CO2 emission standards for heavy-duty vehicles are highly supportive of fuel cells in our target markets of bus and truck,” concluded Mr. MacEwen.
Q3 2023 Financial Highlights
(all comparisons are to Q3 2022 unless otherwise noted)
- Total revenue was $27.6 million in the quarter, up 29% year-over-year.
- Heavy Duty Mobility revenue of $21.1 million increased 67%, driven primarily by higher revenues from the rail and marine verticals, partially offset by lower revenues in bus and truck.
- Stationary revenue of $2.9 million decreased 5% primarily due to lower sales in North America, partially offset by higher revenues in Europe.
- Emerging and Other Markets revenue of $3.6 million decreased 37% compared to the prior year, driven primarily by lower shipments to Europe.
- Gross margin was (10)% in the quarter, an increase of 12-points, driven by higher revenues, product cost reduction initiatives, and a reduction in inventory provisions.
- Total Operating Expenses and Cash Operating Costs3 were $36.3 million and $30.3 million, respectively, a decrease of 9% and an increase of 1%, respectively, from Q3 2022. The decrease in Total Operating Expenses was driven primarily by lower general and administrative expenses, largely offset by an increase in sales and marketing expenses.
- Total Cash Used by Operating Activities was $22.0 million, compared to $30.3 million in the prior year, while Total Cash Used by Investing Activities was $11.1 million, compared to $15.5 million in Q3 2022. Cash and cash equivalents was $781.0 million at the end of Q3 2023 compared to $955.4 million in the prior year.
- Adjusted EBITDA3 was ($36.2) million, compared to ($35.1) million, primarily as a result of a higher loss attributable to the Weichai Ballard JV, the increase in Cash Operating Costs and partially offset by the improvement in gross margin loss.
- As a result of further proposed restructuring of operations at Ballard Motive Solutions, non-cash impairment charges for goodwill and intangible assets of $26.3 million were recognized in the quarter.
- Ballard received approximately $14.8 million of new orders in Q3, and delivered orders valued at $27.6 million, resulting in an Order Backlog of approximately $134.6 million at the end of Q3. Orders from customers in Europe and North America and for Power Products now represent close to 80% of the total Order Backlog.
- The 12-month Order Book was $72.7 million at end-Q3, a decrease of $13.1 million, or approximately 15%, due to slower order bookings and an increase in product shipments during the quarter.
| Order Backlog ($M) | Order Backlog at End-Q2 2023 |
Orders Received in Q3 2023 |
Orders Delivered in Q3 2023 |
Order Backlog at End-Q3 2023 |
| Total Fuel Cell Products & Services |
$147.5 | $14.8 | $27.6 | $134.6 |
2023 Outlook
In 2023, Ballard maintains its guidance ranges for Total Operating Expense3 and Capital Expenditure4 as noted below. Capital Expenditures for 2023 are expected to be in the low end of the guidance range for the full year period.
| 2023 | Guidance |
| Total Operating Expense3 | $135 – $155 million |
| Capital Expenditure4 | $40 – $60 million |
Q3 2023 Financial Summary
| (Millions of U.S. dollars) | Three months ended September 30 | ||
| 2023 | 2022 | % Change | |
| REVENUE | |||
| Fuel Cell Products & Services:1 | |||
| Heavy-Duty Mobility | $21.1 | $12.6 | 67 % |
| Bus | $8.6 | $9.2 | (6 %) |
| Truck | $1.9 | $2.5 | (25 %) |
| Rail | $9.3 | $0.4 | 2,133 % |
| Marine | $1.3 | $0.5 | 156 % |
| Stationary | $2.9 | $3.1 | (5 %) |
| Emerging and Other Markets | $3.6 | $5.7 | (37 %) |
| Total Fuel Cell Products & Services Revenue | $27.6 | $21.3 | 29 % |
| PROFITABILITY | |||
| Gross Margin $ | ($2.8) | $(4.8) | 41 % |
| Gross Margin % | (10 %) | (22 %) | 12pts |
| Total Operating Expenses | $36.3 | $40.0 | (9 %) |
| Cash Operating Costs2 | $30.3 | $30.0 | 1 % |
| Equity loss in JV & Associates | ($4.0) | ($1.0) | 300 % |
| Adjusted EBITDA3 | ($36.2) | ($35.1) | (3 %) |
| Net Loss | ($62.5) | ($42.9) | (46 %) |
| Loss Per Share | ($0.21) | ($0.14) | (49 %) |
| CASH | |||
| Cash provided by (used in) Operating Activities: | |||
| Cash Operating Loss | ($22.8) | ($35.7) | 36 % |
| Working Capital Changes | $0.8 | $5.4 | (85 %) |
| Cash used by Operating Activities | ($22.0) | ($30.3) | 27 % |
| Cash and cash equivalents | $781.0 | $955.4 | (18 %) |
For a more detailed discussion of Ballard Power Systems’ third quarter 2023 results, please see the company’s financial statements and management’s discussion & analysis, which are available at www.ballard.com/investors, www.sedar.com and www.sec.gov/edgar.shtml.
Conference Call
Ballard will hold a conference call on Tuesday, November 7, 2023 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review third quarter 2023 operating results. The live call can be accessed by dialing +1.604.638.5340. Alternatively, a live audio and webcast can be accessed through a link on Ballard’s homepage (www.ballard.com). Following the call, the audio webcast and presentation materials will be archived in the ‘Earnings, Interviews & Presentations’ area of the ‘Investors’ section of Ballard’s website (www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems’ (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.
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