Hyliion Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third-quarter 2026 revenue was $7.5 million, compared to $0.8 million in the third quarter of 2025.
• Revenue for the first nine months of 2026 was $15.2 million, compared to $2.8 million in the corresponding period of 2025.
• Gross profit for the third quarter was $0.6 million, compared to a gross loss of $0.047 million in the prior-year quarter; year-to-date gross profit was $1.1 million versus $0.1 million in 2025.
• Operating expenses for the third quarter were $13.0 million, a 15% decrease from $15.3 million in the third quarter of 2025; year-to-date operating expenses declined 17% to $42.1 million from $50.7 million.
• Research and development expenses were $8.7 million in the third quarter, down 14% from $10.1 million in the prior-year quarter; SG&A expenses were $4.3 million, down approximately 17% from $5.2 million.
• Net loss for the third quarter was $11.1 million, an improvement of 17% from $13.3 million in the third quarter of 2025; year-to-date net loss improved 17% to $36.7 million from $44.0 million.
• Net cash spending during the third quarter was $11.0 million, compared to $20.6 million in the third quarter of 2025; year-to-date capital spending was $2.4 million versus $22.0 million in 2025.
• The company ended the quarter with $121.4 million in cash and investments.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance was increased to approximately $18 million, up from the previous $15 million and the $10 million guidance at the start of the year.
• The company expects approximately $3 million in fourth-quarter revenue as work on the 800-kW Navy system nears completion.
• Hyliion anticipates approximately $8 million in additional military contract awards before year-end, bringing total new military awards for 2026 to approximately $50 million.
• The company expects to end 2026 with $115 million to $120 million in cash and investments.
• The majority of the $45.5 million in remaining authorized funding under existing military contracts is expected to be performed over the next two years.
• Hyliion anticipates resuming printer purchases in 2027 to expand production capacity.

Business Segments and Product Lines:

• Delivered another early adopter KARNO Power Module to the U.S. Navy for extended operation validation on diesel fuel.
• Began moving equipment to the first commercial customer deployment site, with completion expected in the coming weeks.
• Additional early adopter units are in assembly, including a second commercial customer unit and systems for the U.S. Navy's USX-1 Defiant autonomous vessel.
• The 800-kW system for the Navy vessel is expected to be completed in early 2027, consistent with the Navy's sea trial schedule.
• The company remains on track to achieve the KARNO Core 200-kW power output target by year-end.
• Manufacturing operations are being consolidated to Texas, with six additive printers and KARNO Core assembly relocating from Ohio, which will focus on R&D and multi-megawatt systems.
• Additive manufacturing improvements could increase printer speeds by up to three times through laser power utilization, software enhancements, and hardware modifications.
• Hyliion is collaborating with Colibrium Additive, a GE Aerospace company, on next-generation printing systems.

Market and Competitive Landscape:

• Customer interest in KARNO Power Modules is growing across military, data center, commercial, and industrial markets.
• Data center customers are showing increased interest due to the system's ability to address local power generation and environmental concerns.
• The KARNO Power Module's native 800-volt DC architecture aligns with emerging power requirements for AI infrastructure.
• Hyliion estimates that approximately $1.5 million in manufacturing equipment investment can support one megawatt of annual production capacity, representing $2.5 million to $3.0 million of annual revenue at current pricing.

Risks and Challenges:

• The company faces risks associated with being an early-stage company with a history of losses and expectations of significant expenses and continuing losses.
• Potential delays in the development, production, and commercialization of the KARNO generator and system are noted risks.
• Challenges include the ability to scale manufacturing operations and obtain necessary capital to support increased production.
• Risks exist regarding the execution of the strategic shift from the powertrain business to the KARNO business.
• The company must comply with governmental regulations related to defense spending and procurement.
• Forward-looking statements are subject to uncertainties regarding the retention of CEO Thomas Healy and the performance of the KARNO system.

Management Commentary and Tone:

• CEO Thomas Healy stated the company delivered a "strong quarter" with revenue well above expectations and continued progress on system performance and customer deployments.
• Management highlighted growing customer demand across commercial and military markets.
• The company is building capacity and the team to support higher production volumes in 2027.
• Hyliion elected not to pursue an equipment financing transaction in 2026 given current market terms, relying instead on higher expected revenue and lower expenses to maintain cash levels.

Other Key Points:

• Hyliion entered the fourth quarter with $45.5 million in remaining authorized funding under existing military contracts.
• The company received confirmation of approximately $3 million in additional funding under its existing Navy contract supporting the 800-kW KARNO Power Module for the USX-1 Defiant.
• A component redesign to address thermal fatigue identified during extended system operation has revised the delivery timing for the remaining early adopter units to the fourth quarter of 2027.
• The company has filled key leadership positions in Program Management, Quality, and Manufacturing Engineering.
• Current printer capacity is expected to deliver up to 15 MW of yearly production throughput once speed enhancements are achieved.
• Accounts receivable increased significantly to $6.6 million as of September 30, 2026, from $0.489 million at December 31, 2025.
• Inventory was recorded at $0.742 million as of September 30, 2026, compared to zero at the end of 2025.