Ballard Power Systems (NASDAQ:BLDP) reported fourth-quarter and full-year 2025 results that management said reflected both record shipment volumes and “structural progress” toward a goal of achieving sustained positive cash flow within the next two years.
On the call, CEO Marty Neese highlighted record engine shipments in 2025 of “approaching 800 engines” representing more than 75 megawatts of power delivered. He said megawatts shipped grew 38% versus 2024, with most shipments going to Europe and North America and particularly strong activity in Canada. CFO Kate Igbalode said full-year revenue exceeded $99 million, up 43% year-over-year, while fourth-quarter revenue was approximately $34 million, up 37% from the prior-year period.
Record shipments and expanding commercial activity
In response to analyst questions on the New Flyer agreement, management said it was not disclosing the contract duration, and instead emphasized the megawatts and unit volumes. Neese characterized the relationship as long-standing and flexible, adding that the installed base supports a “long-term service tail” that grows as the fleet expands.
Neese also said the company expected additional activity in stationary and rail markets in the coming months.
Margin improvement and restructuring-driven cost reset
Management framed 2025 as a year of both growth and cost structure changes. Neese said Ballard reduced cash operating costs in the fourth quarter by 41% compared with the same period last year, “fundamentally resetting” its cost base. He said the company posted a 17% gross margin in the fourth quarter and a 5% gross margin for the full year, both improving year-over-year. Neese added that quarterly results were not yet “ratable” due to seasonality, but said the margin profile was strengthening.
Igbalode attributed the year-over-year gross margin improvement in the fourth quarter primarily to a decline in onerous contract provisions, product cost reduction initiatives taking hold, and lower manufacturing overhead costs resulting from the company’s global corporate restructuring. She said fourth-quarter gross margin improved to 17%, representing a 30-point increase year-over-year, and full-year gross margin improved to positive 5%, up 37 points from 2024.
Total operating expenses for 2025 were approximately $109 million, which Igbalode said was 32% lower than the prior year and in the middle of the company’s guidance range of $100 million to $120 million. Excluding restructuring and related expenses of $23 million, she said operating expenses would have been approximately $86 million, below the lower end of the guidance range.
Looking ahead, Igbalode guided to 2026 total operating expenses of $65 million to $75 million. In the Q&A, she said the company does not anticipate additional major restructuring in 2026 similar to 2024 or 2025.
When asked about the drivers of incremental cost contraction, management emphasized ongoing efforts such as manufacturing efficiencies, innovation initiatives, and scaling, with a greater focus on product cost reductions rather than further large reductions in operating expense. Neese said the company used a “zero-based budgeting approach” in 2025 and “re-baselined everything we spend money on,” adding that the work was starting to pay off, including around operating expenses that are variable in nature.
Cash flow milestone, liquidity position, and 2026 outlook items
One of the most notable items management highlighted was fourth-quarter operating cash flow. Neese said Ballard generated $11 million in cash flow from operating activities in the fourth quarter, calling it evidence that structural actions are working. Igbalode emphasized that while performance may not be ratable due to revenue cyclicality, it was a “huge milestone,” and noted that nearly all of the quarter’s revenue came from fuel cell product sales.
Igbalode also said cash usage for the full year 2025 was down nearly 50% compared to 2024. Ballard ended the year with nearly $530 million in cash, up $1.4 million from the third quarter, and she said the company had no bank debt and no near- or mid-term financing requirements.
On capital allocation, management discussed moderating capital expenditures. Igbalode said 2025 capital expenditures were $10.2 million, within the revised outlook range of $10 million to $12 million. For 2026, she expects capital expenditures to be between $5 million and $10 million.
On seasonality, Igbalode said a “40-60 split” between the first and second halves of 2026 is a reasonable expectation, while adding that Ballard is looking at ways to smooth quarter-to-quarter variability.
Five near-term focus areas: terms, cost, services, market expansion, and new models
Neese outlined five near-term focus areas intended to support revenue and margin expansion as part of the company’s cash flow goals:
- Improving commercial terms: Neese said newer agreements include more comprehensive pricing structures and “balanced commercial terms,” including protections against tariff exposure, exchange rates, inflation, and precious metal volatility. He said, in some cases, working through improved structures shifted certain order announcements into 2026.
- Product cost reductions: Neese said Ballard is pursuing cost reductions through negotiations, execution, and innovation. He highlighted FCmove-SC as achieving a 40% reduction in total part count while improving power density, durability, and capability. He also discussed Project Forge, an automated bipolar plate manufacturing line that he said is on track for serial production mid-year and could deliver plate cost reductions of up to 70% at full volume.
- Enhanced fleet services: Neese said the company’s installed base includes thousands of engines globally and nearly 300 million kilometers of operating experience. He said remote data units transmit performance data, enabling preventive maintenance today and supporting future prognostic maintenance offerings. He described an opportunity to expand recurring revenue through Ballard Fleet Services, including long-term service agreements, parts supply, monitoring, training, and stack servicing.
- Expanding product reach into near-term markets: Neese cited materials handling as one example, saying Ballard has developed a stack aimed at superior total cost of ownership due to longer lifetime. He also emphasized stationary power opportunities, including replacing diesel gen sets and powering data centers, and said Ballard’s stationary power products have generated over 100,000 hours of power across deployments.
- Business model innovations: Neese said Ballard is exploring flexible commercial and financial structures, service-based offerings, partnerships, and extended warranties to reduce adoption barriers tied to upfront capital costs, infrastructure complexity, and performance risk.
On stationary power in particular, Neese said Ballard can address applications using platforms such as FCmove-XD and FCveloCity-HD, with work focused on configuration and “packaging” for different scales. He also said the company is pursuing improvements that increase kilowatts per engine. In response to questions about what has changed from earlier stationary efforts, Neese said customer requirements have shifted, describing “speed and cost” as central, and referenced multi-day customer workshops with teams serving hyperscalers.
Asked about commercialization geographies for stationary, Neese said it “stands to reason” that Europe and Canada would be focal points, describing them as home markets and referencing projects advancing to final investment decision and the need for hydrogen offtake partners.
Closing the call, Neese said Ballard had strengthened the foundation of the business in 2025 through improved financial performance, commercial discipline, record volumes, cost reduction, and margin expansion, while maintaining a significant cash position to support strategic capital deployment.
About Ballard Power Systems (NASDAQ:BLDP)
Ballard Power Systems (NASDAQ:BLDP) is a Canadian technology company specializing in the development and manufacture of proton exchange membrane (PEM) fuel cell products. Headquartered in Vancouver, British Columbia, Ballard designs and sells fuel cell stacks and modules that enable zero-emission power generation for a variety of applications, including heavy-duty motive systems, backup power, material handling equipment, and portable power solutions.
Since its founding in 1979, Ballard has built a strong intellectual property portfolio and a track record of innovation in PEM fuel cell technology.
