Q4 2025 Westport Fuel Systems Inc Earnings Call

April 24, 2026

Operator: Good day, ladies and gentlemen, and thank you for standing by. Welcome to Westport's Q4 2025 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone keypad. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Ms. Ashley Nuell. Ma'am, please begin.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone keypad.

Speaker #1: As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Ms. Ashley Nuell. Ma'am, please begin.

Speaker #2: Thank you. Good morning, everyone. Welcome to WESTPORT FUEL SYSTEMS conference call regarding its fourth quarter and full year 2025 financial and operating results. This call is being held to coincide with the press release containing WESTPORT's financial results that were issued yesterday after market close.

Ashley Nuell: Thank you. Good morning, everyone. Welcome to Westport Fuel Systems' conference call regarding its Q4 and full year 2025 financial and operating results. This call is being held to coincide with the press release containing Westport's financial results that were issued yesterday after market close. On today's call, speaking on behalf of Westport will be Chief Executive Officer and Director, Daniel Sceli, and Chief Financial Officer, Elizabeth Owens.

Speaker #2: On today's call, speaking on behalf of Westport will be Chief Executive Officer and Director Dan Sceli, and Chief Financial Officer Elizabeth Owens. You are reminded that certain statements made on this conference call and our responses to certain questions may constitute forward-looking statements within the meaning of the U.S.

Ashley Nuell: You are reminded that certain statements made on this conference call, and our responses to certain questions, may constitute forward-looking statements within the meaning of the US and applicable Canadian securities laws. As such, forward-looking statements are made based on our current expectations and involve certain risks and uncertainties. With that, I'll turn the call over to you, Dan.

Speaker #2: and applicable Canadian securities laws, and as such, forward-looking statements are made based on our current expectations and involve certain risks and uncertainties. With that, I'll turn the call over to you, Dan.

Speaker #3: Thank you, Ashley, and good morning, everyone. I want to begin by addressing recent events. We appreciate the patience and support of our shareholders as we work through our recent cybersecurity incident.

Daniel Sceli: Thank you, Ashley, and good morning, everyone. I want to begin by addressing recent events. We appreciate the patience and support of our shareholders as we work through our recent cybersecurity incident. Our priority was to ensure the integrity of our IT systems, business continuity, and financial reporting, and we are pleased to confirm that this review has been successfully completed. With this behind us, we're looking forward to executing on our strategy and delivering on the next phase of our business objectives. Turning to our financial results, the past year has been a defining one for Westport, marked by the successful divestiture of our light-duty business, the recent receipt of a $6.5 million payment, and further strengthened by Cespira's agreement with a leading OEM to manufacture and deliver HPDI components for a truck trial assessing the future commercialization.

Speaker #3: Our priority was to ensure the integrity of our IT systems, business continuity, and financial reporting, and we are pleased to confirm that this review has been successfully completed.

Speaker #3: With this behind us, we're looking forward to executing on our strategy and delivering on the next phase of our business objectives. Turning to our financial results, the past year has been a defining one for WESTPORT.

Speaker #3: Marked by the successful divestiture of our light-duty business, the recent receipt of a $6.5 million payment, and further strengthened by Sospira's agreement with a leading OEM to manufacture and deliver HPDI components for a truck trial assessing the future commercialization.

Speaker #3: These accomplishments, combined with ending the year with over $27 million in cash and very low debt, reflect the meaningful progress we have made in sharpening our strategic focus and building a stronger company.

Daniel Sceli: These accomplishments, combined with ending the year with over $27 million in cash and very low debt, reflect the meaningful progress we have made in sharpening our strategic focus and building a stronger company. The global heavy-duty transportation market is increasingly recognizing natural gas as a practical, lower-emission solution available today. This is evidenced by Volvo's recent milestone of delivering more than 10,000 natural gas trucks on the road, underscoring the accelerating adoption of Cespira's HPDI fuel system technology, and validates the strategic direction we have taken. From a market perspective, the UK leads the adoption of HPDI-powered LNG trucks, followed by Germany, Sweden, the Netherlands, Norway, and France. Emerging gas markets such as India and Latin America are also gaining momentum, with volume seeing steady growth.

Speaker #3: The global heavy-duty transportation market is increasingly recognizing natural gas as a practical lower-emission solution available today. This is evidenced by Volvo's recent milestone of delivering more than 10,000 natural gas trucks on the road, underscoring the accelerating adoption of Sospira's HPDI fuel system technology and validates the strategic direction we have taken.

Speaker #3: From a market perspective, the UK leads the adoption of HPDI-powered LNG trucks, followed by Germany, Sweden, the Netherlands, Norway, and France. Emerging gas markets such as India and Latin America are also gaining momentum, with volume seeing steady growth.

Speaker #3: When we introduced our proprietary CNG fuel storage and delivery system several months ago, we emphasized its potential to significantly expand our addressable market, particularly in North America.

Daniel Sceli: When we introduced our proprietary CNG fuel storage and delivery system several months ago, we emphasized its potential to significantly expand our addressable market, particularly in North America. Development has progressed well, and our confidence in the commercial opportunity continues to build. We look forward to showcasing this solution at the upcoming Advanced Clean Transportation Expo, ACT, where we will have the opportunity to show off our technology to industry partners and customers. By integrating advanced high-pressure CNG storage with Cespira's field-proven HPDI fuel system, we match or exceed the performance and efficiency expected from diesel engines with compelling economics in markets where CNG is the natural choice, like North America. We believe this innovation meaningfully enables Westport and Cespira to capture new opportunities as we move into field testing. Our GFI brand, through our high-pressure controls business, has also delivered important operational milestones.

Speaker #3: Development has progressed well, and our confidence in the commercial opportunity continues to build. We look forward to showcasing this solution at the upcoming Advanced Clean Transportation Expo, ACT, where we will have the opportunity to show off our technology to industry partners and customers.

Speaker #3: By integrating advanced high-pressure CNG storage with Sospira's field-proven HPDI fuel system, we match or exceed the performance and efficiency expected from diesel engines with compelling economics in markets where CNG is the natural choice, like North America.

Speaker #3: We believe this innovation meaningfully enables WESTPORT and Sospira to capture new opportunities as we move into field testing. Our GFI brand, through our high-pressure controls business, has also delivered important operational milestones.

Speaker #3: The opening of our is one of the world's fastest-growing hydrogen markets and in Canada represents a step in localizing manufacturing, reducing costs, and improving competitiveness.

Daniel Sceli: The opening of one of the world's fastest-growing hydrogen markets in Canada represents localizing manufacturing, reducing costs, and improving competitiveness. As the transportation industry continues to balance economic realities with sustainability objectives, we are confident that alternative fuel systems, including Cespira's HPDI technology and our high-pressure components, provide real-world solutions that deliver both performance and affordability. With the completion of our strategic transition and only a few milestones remaining, a growing market validation of Cespira's expansion, a path to address the North American market, and a clear strategic focus, Westport is excited to drive into this next phase. Now I'll have Elizabeth run through some financial details and then come back afterwards. Over to you, Elizabeth.

Speaker #3: As the transportation industry continues to balance economic realities, with sustainability objectives, we are confident that alternative fuel systems, including Sospira's HPDI technology, and our high-pressure components, provide real-world solutions that deliver both performance and affordability.

Speaker #3: With the completion of our strategic transition and only a few milestones remaining, a growing market validation of Sospira's expansion, a path to address the North American market, and a clear strategic focus, WESTPORT is excited to drive into this next phase.

Speaker #3: Now I'll have Elizabeth run through some financial details and then come back afterwards. Over to you, Elizabeth.

Speaker #2: Thank you, Dan. Before I dive into the details, I'll just touch on a few key milestones we achieved. The first of which is our strong cash position, reflective of the successful divestiture of the light-duty segment.

Elizabeth Owens: Thank you, Dan. Before I dive into the details, I'll just touch on a few key milestones that were just achieved. The first of which is our strong cash position, reflective of the successful divestiture of the light-duty segment. As of 31 December 2025, our cash and cash equivalents position increased by $12.4 million to $27.2 million, compared to $14.8 million at 31 December 2024. The increase in cash was primarily driven by the sale of our light-duty segment, as I mentioned, partially offset by cash used in our operating activities and debt repayments. Exiting 2025, with the proceeds from the disposition of Westport's light-duty segment, our long-term debt, including the current portion, reflected a 57% reduction to $2.9 million as at 31 December 2025. This was compared to $6.8 million in the prior year period. Including the long-term debt from discontinued operations, the reduction was more than 90%.

Speaker #2: As of December 31st, 2025, our cash and cash equivalents position increased by $12.4 million to $27.2 million compared to $14.8 million at December 31st, 2024.

Speaker #2: The increase in cash was primarily driven by the sale mentioned, partially offset by cash used in our operating activities and debt repayments. Exiting 2025 with the proceeds from the disposition of Westport's light-duty segment, our long-term debt, including the current portion, reflected a 57% reduction to $2.9 million as at December 31, 2025.

Speaker #2: This was compared to $6.8 million in the prior year period. Including the long-term debt from discontinued operations, the reduction was more than 90%. This improved financial position provides Westport with greater flexibility to concentrate on markets that are best suited to our current strategy.

Elizabeth Owens: This improved financial position provides Westport with greater flexibility to concentrate on markets that are best suited to our current strategy. Cespira continues to drive meaningful improvements in our results. In Q4 2025, total revenue was $29.3 million, compared to $22.9 million in the same period last year, representing an increase of 28%. This progress is supported by strong market adoption, including Volvo reaching the milestone of more than 10,000 natural gas trucks on the road equipped with Cespira's HPDI fuel systems. We are also encouraged by the continued progress of a second OEM that is currently conducting truck trials. We are excited about the opportunities ahead as we target an improvement in Cespira's capital requirements. Turning to the details of our 2025 results, Westport reported revenue of $23.3 million for the year ended 2025, compared to $40.7 million in 2024.

Speaker #2: Sospira continues to drive meaningful improvement in our results. In the fourth quarter of 2025, total revenue was $29.3 million, compared to $22.9 million in the same period last year.

Speaker #2: Representing an increase of 28%. This progress is supported by strong market adoption including Volvo reaching the milestone of more than 10,000 natural gas trucks on the road, equipped with Sospira's HPDI fuel systems.

Speaker #2: We are also encouraged by the continued progress of a second OEM that is currently conducting truck trials. We are excited about the opportunities ahead as we target an improvement in

Speaker #1: The . As capital requirements Turning to the details of our 2025 results . Westport reported revenue of 23.3 million for the year ended 2025 , compared to 40.7 million in 2024 .

Speaker #1: The 43% decrease in revenue was primarily due to the end of the transitional service agreement for inventory and contract manufacturing between Westport and Cyspera.

Elizabeth Owens: The 43% decrease in revenue was primarily due to the end of the transitional service agreement for inventory and contract manufacturing between Westport and Cespira. Our adjusted EBITDA for 2025 was -$17.3 million, as compared to the -$11.4 million reported for 2024. We reported a net loss from continuing operations in 2025 of -$29.6 million, compared to a net loss from continuing operations of -$31.3 million for the prior year, with the decrease in net loss attributed to lower operating expenditures across R&D and SG&A, and a favorable change in foreign exchange rates, partially offset by a full-year pickup of Cespira's operating results in 2025 compared to the seven months in 2024.

Speaker #1: Our adjusted EBITDA for 2025 was negative $17.3 million as compared to the negative $11.4 million reported for 2020. We reported a net loss from continuing operations in 2025 of $29.6 million, compared to a net loss from continuing operations of $31.3 million for the prior year.

Speaker #1: With the decrease in net loss attributed to lower operating expenditures across our business, the slower adoption of automotive and industrial applications powered by hydrogen in Q3 2025.

Elizabeth Owens: Looking at our specific business units, high-pressure controls revenue for Q4 2025 increased 20% to $1.9 million, compared with $1.6 million in the prior year quarter, and decreased to $8.3 million for the year ended 31 December 2025, from $9.4 million for the prior year. The decrease in year-over-year revenue for the period ending 31 December 2025 was primarily driven by the general slowdown in the hydrogen infrastructure development, leading to a slower adoption of automotive and industrial applications powered by hydrogen. In Q3 2025, we kicked off the move of our manufacturing capacity from Italy to our new facilities in Canada and China, which required shutting down our operations. In late Q4 2025, we resumed selling products to our customers to meet the backlogged demand from the aforementioned shutdown.

Speaker #1: We kicked off the move of our manufacturing capacity from Italy to our new facilities in Canada and China, which required shutting down our operations in late Q4 2025.

Speaker #1: We resumed selling products to our customers to meet the backlogged demand from the aforementioned shutdown Gross profit for the year ended December 31st , 2025 decreased by 1.3 million to 0.9 million , or 11% of revenue , compared to 2.2 million , or 23% of revenue , for the prior year Moving on to Cyspera Total revenue generated in Q4 2024 .

Elizabeth Owens: Gross profit for the year ended December 31, 2025, decreased by $1.3 million to $0.9 million, or 11% of revenue, compared to $2.2 million, or 23% of revenue for the prior year. Moving on to Cespira. Total revenue generated in Q4 2024, pardon me, 2025, was $29.3 million, compared to $22.9 million in the same period last year, an increase of 28%. Cespira product revenue of $23.4 million increased 30% compared to Q4 2024, driven by higher volumes. Gross profit was -$1.1 million for Q4 2025, compared to $0.5 million in Q4 2024, with the negative variance driven primarily by an obsolete inventory provision of $1.7 million, and a recognized loss on one of our contracts valued at $2.8 million. As I previously mentioned, we had a cash and cash equivalents balance of $27.2 million as at December 31, 2025.

Speaker #1: Pardon me ? 2025 was 29.3 million compared to 22.9 million in the same period last year . An increase of 28% . Cyspera product revenue of 23.4 million increased 30% compared to Q4 2024 , driven by higher volumes .

Speaker #1: Gross profit was negative 1.1 million for Q4 2025 , compared to 0.5 million in Q4 2020 . Four . With a negative variance driven primarily by an obsolete inventory provision of 1.7 million and a recognized loss on one of our contracts , valued at 2.8 million .

Speaker #1: As I previously mentioned , we had a cash and cash equivalents balance of 27.2 million as at December 31st , 2025 , net cash used in operating activities from continuing operations was 14.2 million for the year ended December 31st , 2025 , compared to 5.8 million in the prior year , an increase of 8.4 million .

Elizabeth Owens: Net cash used in operating activities from continuing operations was $14.2 million for the year ended 31 December 2025, compared to $5.8 million in the prior year, an increase of $8.4 million. The decrease in net cash provided by investing activities was mainly driven by $21.7 million in capital contributions to Cespira, and purchases of property, plant, and equipment of $2.7 million, partially offset by proceeds from the sale of the light-duty segment. As noted, we also strengthened our balance sheet with total outstanding debt of $2.9 million, down from $6.8 million, while reducing the complexity of our corporate structure in 2025. Our business is focused on the right markets for us, and we are continually looking at ways to streamline our operations. With that, I will pass it back to you, Dan.

Speaker #1: The decrease in net cash provided by investing activities was mainly driven by $21.7 million in capital contributions to Cyspera and purchases of property, plant, and equipment of $2.7 million, partially offset by proceeds from the sale of the Light Duty segment.

Speaker #1: As noted, we also strengthened our balance sheet with total outstanding debt of $2.9 million, down from $6.8 million, while reducing the complexity of our corporate structure in 2025.

Speaker #1: Our business is focused on the right markets for us , and we are continually looking at ways to streamline our operations . With that , I will pass it back to you , Dan .

Speaker #2: Thank you . Elizabeth . As we look to 2026 , we see a transportation market increasingly grounded in economic reality Operators are seeking solutions that deliver measurable emission reductions without sacrificing durability or operating economics Natural gas is playing a larger role in that equation , not as a transitional concept , but as a fuel that can compete on performance and cost .

Daniel Sceli: Thank you, Elizabeth. As we look to 2026, we see a transportation market increasingly grounded in economic reality. Operators are seeking solutions that deliver measurable emission reductions without sacrificing durability or operating economics. Natural gas is playing a larger role in that equation, not as a transitional concept, but as a fuel that can compete on performance and cost today. The HPDI platform, delivered through Cespira, is central to that opportunity. By pairing compression ignition performance with the advantages of natural gas, including the potential to incorporate hydrogen blends over time, we are providing OEMs and fleets with a pathway that aligns emission reductions with commercial expectations.

Speaker #2: Today , the Hpdi platform delivered through Cyspera , is central to that opportunity . By pairing compression , ignition performance with the advantages of natural gas , including the potential to incorporate incorporate hydrogen blends over time , we are providing OEMs and fleets with a pathway that aligns emission reductions with commercial expectations As I mentioned earlier , Volvo's milestone of more than ten 000 natural gas trucks on the road in over 30 countries , featuring Spira's Hpdi fuel systems highlights our combined success in helping drive this path of success .

Daniel Sceli: As I mentioned earlier, Volvo's milestone of more than 10,000 natural gas trucks on the road in over 30 countries, featuring Cespira's HPDI fuel systems, highlights our combined success in helping drive this path of success. We are encouraged by the progress of a second OEM conducting a full truck trial throughout 2026, which we further believe validates additional commercial potential. 2026 will be a pivotal year as we advance demonstrations and fleet trials, present this exciting new platform at the ACT conference this spring, and follow with targeted show-and-tell sessions with Canadian fleets through the spring and summer. Together, these initiatives position us to build momentum across our portfolio and translate technology progress into tangible commercial interest. I can appreciate the investment community's interest in our 2026 outlook. We are focused on delivering disciplined execution, continued advancement of OEM programs, and converting technical validation into new commercial opportunities.

Speaker #2: We are encouraged by the progress of a second OEM conducting a full truck trial throughout 2026 , which we further believe validates additional commercial potential 2026 will be a pivotal year as we advance demonstrations and fleet trials present this exciting new platform at the eight conference this spring and follow with targeted show and tell sessions with Canadian fleets through the spring and summer Together , these initiatives position us to build momentum across our portfolio and translate technology progress into tangible commercial interest .

Speaker #2: I can appreciate the investment community in community's interest in our 2026 outlook . We are focused on delivering disciplined execution , continued advancement of OEM programs , and converting technical validation into new commercial opportunities in our high pressure control segment .

Daniel Sceli: In our high-pressure controls segment, we're optimistic that volumes can increase as customers' facilities ramp up production, while we actively pursue cost reduction opportunities in China through greater total sourcing and supply chain optimization. With a focused organization and technologies aligned with market demand, we believe 2026 represents an important step forward, and we intend to deliver. Thank you.

Speaker #2: We're optimistic that volumes can increase as customers , facilities ramp up production . While we actively pursue cost reduction opportunities in China through greater total sourcing and supply chain optimization with a focused organization and technologies aligned with market demand .

Speaker #2: We believe 2026 represents an important step forward , and we intend to deliver Thank you

Operator: Ladies and gentlemen, at this time, if you have a question or comment, please press star one one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one one again. Again, if you have a question or comment, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Amit Dayal from H.C. Wainwright. Your line is open.

Speaker #3: Ladies and gentlemen, at this time, if you have a question or comment, please press star one one on your telephone keypad.

Speaker #3: If your question has been answered, or you wish to remove yourself from the queue, simply press star one. Once again, star one.

Speaker #3: If you have a question or comment , please press star one . One on your telephone keypad . Please stand by while we compile the Q&A roster Our first question or comment comes from the line of Amit from H.C.

Speaker #3: Wainwright . Your line is open , sir .

Amit Dayal: Hey, good morning, everyone. Thank you for taking my questions.

Speaker #4: Hey , good morning everyone . Thank you for taking my questions .

Daniel Sceli: Hey. Good morning, Amit.

Speaker #2: Good morning Amit

Amit Dayal: Just on the margin side of things, it looks like inventory issues and relocation issues were sort of pressuring margins in Q4. Do you think we see some bounce back in Q1 and the rest of 2026 on the margin side?

Speaker #4: So Dan , just on the margin side of things , it looks like inventory issues . And you know , relocation issues were sort of pressuring margins in the fourth quarter .

Speaker #4: Do you think we see some bounce back in Q1 and the rest of 2026 on the margin side?

Daniel Sceli: Yeah, for sure. I think this transition. I'll start with the high pressure controls transition from Italy to Canada and China. Launching the two new production facilities, moving the equipment over, managing the inventory transfers, starting up getting the plants certified, which is quite an extensive process. Yeah, that put a lot of pressure on margins, and we do expect margins to improve and volumes as well. We're already seeing some pickup in volumes as we move through the year.

Speaker #2: Yeah , for sure . I think , you know , this transition I'll start with the the high pressure controls transition from Italy to Canada and China , you know , launching the two new production facilities .

Speaker #2: Moving the equipment over , managing the inventory transfers , starting up , getting the plants certified , which is quite an extensive process .

Speaker #2: You know , that put a lot of pressure on , on margins . And we do expect margins to improve and volumes as well .

Speaker #2: We're already seeing some pickup in volumes as we move through the year.

Amit Dayal: Understood. For the high pressure control segment, can you talk a little bit about how maybe the China market or the Indian market, et cetera, the international opportunities you highlighted could start ramping for you? What should we expect in terms of go-to-market strategy in these geographies?

Speaker #4: Understood For the pressure control segment , you know , can you talk a little bit about sort of , you know , how .

Speaker #4: Maybe the China market or the Indian market , etc. , you know , the international opportunities you highlighted could , you know , start ramping for you like , what should we expect in terms of , you know , like go to market sort of strategy in these , in these geographies ?

Daniel Sceli: Sure. I'll start with China. I think everybody knows that China is the fastest growing hydrogen market. The government goals that they set out are driving volume increases. We're in a bit of a lull right now where volumes globally have slowed down on hydrogen, but we expect them to begin to pick up again at some point here in China. Having our plant there allowed us to compete locally. It allowed us to have local costs, source local suppliers. For us, it's the right strategy to compete in China for the Chinese market. Shipping from Italy or from Canada just didn't make sense. The comment on India. India is really a huge opportunity for Cespira in the long-haul trucking market. India has now put in a multi-state highway system. They're investing in clean fuel stations.

Speaker #2: Sure . So I'll start with China . I think everybody knows that China is the fastest growing hydrogen market . The the government goals that they set out are driving volume increases .

Speaker #2: We're in a bit of a lull right now where volumes globally have slowed down on hydrogen , but we expect them to begin to pick up again at some point here in China .

Speaker #2: Having our plant there allowed us to compete locally . It allowed us to have local costs source , local suppliers . It's , you know , for us , it's the right strategy to compete in China for the Chinese market .

Speaker #2: Shipping from Italy or from Canada . Just didn't make sense . The comment on India . India is really a huge opportunity for Cyspera in the long haul .

Speaker #2: Trucking market . You know , India has now , you know , put in a multi-state highway system . They're investing in clean fuel stations .

Daniel Sceli: We see that a number of trucking OEMs look at India as a beachhead for growth, and that market's going to pick up, we believe, pretty significantly.

Speaker #2: And we see that a number of trucking OEMs look at India as a beachhead for growth. And that market's going to pick up.

Speaker #2: We believe , pretty significantly

Amit Dayal: Understood. Just last one from me. Any opportunities or possibilities in the power generation or backup power space for you guys?

Speaker #4: Understood this last one. For me, any opportunities or possibilities in the PowerGen or backup power space for you guys?

Daniel Sceli: Well, interesting you ask. We've been looking into power generation. We currently supply into power generation today. We have a customer that used to be Kohler, Rehlko, that we supply out of our high pressure controls business. We see that opportunity growing with the investments going into power generation across North America and, of course, globally. We think that there's an opportunity to build out that business and are expected to grow there.

Speaker #2: Well , the interesting you asked . So we've been looking into PowerGen . We currently supply into PowerGen today . We have a customer that used to be Kohler Rocco that we supply out of our high pressure controls business .

Speaker #2: We . We see that opportunity growing , you know , with the investments going into PowerGen across North America . And of course globally .

Speaker #2: We think that there's an opportunity to build out that business and are expected to grow there.

Amit Dayal: Understood. That's all I have, guys. I'll take my other questions offline. Thank you.

Speaker #4: Understood . That's all I have guys I'll take my other questions offline . Thank you .

Daniel Sceli: Great. Thanks, Amit.

Speaker #2: Great . Thanks . Amit

Operator: This question or comment comes from the line of Rob Brown from Lake Street Capital Markets. Mr. Brown, your line is open.

Speaker #3: Second. Next question or comment comes from the line of Rob Brown from Lake Street Capital Markets. Mr. Brown, your line is open.

Rob Brown: Good morning.

Daniel Sceli: Hey, good morning, Rob.

Speaker #5: Hi . Good morning

Speaker #2: Hey , good morning Rob .

Rob Brown: First question's on the OEM trial at Cespira, the second OEM. I know you can't give a lot of detail, but I think you said this year is sort of when the trial's happening. What's the decision point on that? Is it sort of work this year and then just make decisions and then start potentially ramping into a production model or just sort of the outlines of the process would be helpful.

Speaker #5: First questions on the OEM trial at the second OEM. I know you can't give a lot of detail, but I think you said this year is sort of when the trial is happening.

Speaker #5: You know, what's sort of the decision point on that? Is it sort of work this year and then just make decisions and then start?

Speaker #5: Potentially ramping into a production model, or just sort of the outlines of the process, would be helpful.

Daniel Sceli: Sure. I wish I could say who it was, but in this commercial truck world, they're very, very careful about their commercial information. The trial's ongoing right now, right? There's trucks on the road running. There's discussions about expanding it, but we believe decisions will be made in H2 at some point. We don't know the exact timing. It depends when they get the miles on the trucks. Our expectation is that in H2, we're going to start getting feedback. Of course, if it all goes well, we're hoping this is going to lead to a commercial launch.

Speaker #2: Sure , sure . I mean , I wish I could say who it was , but , you know , in this commercial truck world , they're very , very careful about their commercial information .

Speaker #2: But the trial is ongoing right now , right ? There's trucks on the road running . There's , you know , discussions about expanding it .

Speaker #2: And but we , we believe decisions will be made , you know , in the second half of the year at some point .

Speaker #2: We don't know the exact timing . It depends when they get the miles on the on the trucks . But , you know , our expectation is that in the second half of the year , we're going to start getting feedback .

Speaker #2: And, of course, if it all goes well, we're hoping this is going to lead to a commercial launch.

Rob Brown: Okay. Got it. Back to the high-pressure controls business run rate. Can I just get a sense of what's the sort of revenue run rate now that you've gotten the production transitioned? Is it sort of growing off the Q4 run rate or I guess, how much of the Q4 run rate was depressed from that, I guess? Just a sense of the run rate in that business.

Speaker #5: Okay . Got it . And then and then turn it back to the high pressure controls business run rate . Get a sense of what's the sort of revenue run rate now that you've gotten the production transition ?

Speaker #5: Is it is it sort of growing off the Q4 run rate , or is it , you know , I guess , how much of the Q4 run rate was depressed from that ?

Speaker #5: I guess just a sense of the run rate in that business.

Daniel Sceli: Sure. The Q4 run rate was depressed. Number one, the market has slowed down somewhat, but also with shutting down the equipment in Italy, moving it all to the two new plants. Obviously, we weren't producing for some time while that transition happened. Yeah, we do see that market starting to grow. We see volumes increasing over what we expected for 2026 already. It's on a good path, and we believe that, I think specifically the Chinese market is the one that will take off first as the Chinese government puts those goals in place for hydrogen transition in both automotive and in the industrial markets.

Speaker #2: Sure . The Q4 run rate was depressed . Number one , you know , the market has slowed down somewhat , but also with shutting down the equipment in Italy , moving it all to the two new plants , obviously , we weren't producing for some time .

Speaker #2: While that transition happened . But yeah , we do see that market starting to grow . You know , we see volumes increasing over what we expected for 2026 already .

Speaker #2: So , you know , it's on a good path . And we we believe that , you know , the , I think specifically the Chinese market is the one that will take off first as the Chinese government puts those goals in place for hydrogen transition in in both automotive and in the industrial markets

Rob Brown: Okay. Thank you. I'll turn it over.

Speaker #5: Okay . Thank you . I'll turn it over .

Daniel Sceli: Thank you.

Speaker #2: Thank you .

Operator: Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. Our next question or comment comes from the line of Mr. Eric Stine from Craig-Hallum Capital Group. Mr. Stine, your line is open.

Speaker #3: Thank you again, ladies and gentlemen. If you have a question or comment at this time, please press star one one on your telephone keypad.

Speaker #3: Our next question or comment comes from the line of Mr. Eric Stein from Craig-Hallum Capital Group. Mr. Stein, your line is open.

Eric Stine: Hi, Dan. Hi, Elizabeth. Good morning.

Daniel Sceli: Hey. Good morning, Eric.

Speaker #6: Hi , Dan . Hi , Elizabeth . Good morning .

Speaker #2: Hey . Good morning . Eric .

Eric Stine: Dan, you touched on HPDI in India and in your prepared remarks, Latin America and some other markets. In terms of in North America, I know that's a very high priority. You did mention some trials that you are planning or that the joint venture is planning in Canada. Could you maybe go into that a little bit? Anything you can share?

Speaker #6: Dan , you touched on hpdi . In India and in your prepared remarks , Latin America and some other markets . But in terms of in North America , I mean , I know that's a very high priority .

Speaker #6: You did mention some trials that you are planning or that the joint venture is planning in Canada . Could you maybe go into that a little bit ?

Daniel Sceli: Sure

Eric Stine: ... should we assume then that Canada is kind of the initial spot in North America that you would target?

Speaker #6: Anything you can share ? And should we assume then that Canada is kind of the the initial spot in North America that you would target

Daniel Sceli: I think it is a Westport product, not a Cespira product. Obviously, Cespira has the on-engine HPDI technology that will be part of the solution, but the back-of-cab high-pressure storage, smart storage system is a Westport product. We have already got the first truck. Volvo got us a truck, and we've already put the back-of-cab system on it. It's been running miles developing data. The reason that is that we're not having to redevelop any of these systems. It's a matter of putting these systems together. It's not a huge development project. It's more of a market development that's required. The truck, as I said, is on the road. The truck will be on its way shortly to Las Vegas for the ACT show. I hope you're going to be there, Eric, and see it. We have a booth right next to Volvo there.

Speaker #2: You know , I think if There is a Westport product , not a product , obviously , Sispara has the . On engine Hpdi technology that will be part of the solution .

Speaker #2: But the the back of cab high pressure storage , smart storage system is a Westport product . We have already got the first truck Volvo got us a truck and we've already put the back of cab system on it .

Speaker #2: It's been running miles , developing data . And the reason that is , is that , you know , we're not having to redevelop any of these systems .

Speaker #2: It's a matter of , of putting these systems together . And so it's not a huge development project . It's more of a market development that's required .

Speaker #2: The truck, as I said, is on. The truck will be on its way shortly to Las Vegas for the ACT show.

Speaker #2: I hope you're going to be there . Eric , and see it . We have a booth right next to Volvo . There and the as you know , this CNG storage system is primarily focused on the North American market .

Daniel Sceli: As you know, this CNG storage system is primarily focused on the North American market. We will be doing the initial trials in Canada. We will, at some point here, be moving to the US for trials as well.

Speaker #2: We will be doing the initial trials in Canada and . But we will at some point here be moving to the US for trials as well

Eric Stine: Got it. Okay. I misunderstood that. Thank you for the clarification. I guess, the follow-up then would be just about bringing HPDI, the joint venture, and since you just talked about back of cab, but HPDI to North America.

Speaker #6: Got it . Okay . I misunderstood that . Thank you for the clarification . So then I guess the follow up then would be just about each bringing H PDI the joint venture .

Speaker #6: And since you just talked about back of cab , but HPDI to North America . Yeah , I would assume that that would be Volvo right .

Daniel Sceli: Yeah.

Eric Stine: I would assume that that would be Volvo, right?

Daniel Sceli: Yes. Well, as a starting point, for sure.

Speaker #2: Well , as a starting point for sure , but you know , this whole C and G , I mean , HPD is , is growing fast globally .

Eric Stine: Yeah.

Daniel Sceli: This whole CNG HPDI is growing fast globally. The difference is that all the growth to 10,000 trucks are on LNG because that's how those countries receive their natural gas. Natural gas in North America is primarily delivered through compressed, right? It's a CNG market. Our on-engine system really doesn't care whether it's compressed or liquid. The system adapts to that. The storage system is the big difference, going from a liquid storage to a compressed storage, and that's what we're bringing in, and the first truck on the road is a Volvo truck. It's their new truck, and we're very excited to have it showing up at ACT. Yeah, this is pretty exciting for us. We're finally getting to execute on this strategy, and any growth we have on this back-of-cab system obviously pulls through HPDI for Cespira.

Speaker #2: The difference is that , you know , all the growth , the 10,000 trucks are on LNG , because that's how those countries receive their their natural gas , natural gas in North America is primarily delivered through compressed .

Speaker #2: Right . It's a CNG market . So what are on engine system really doesn't care whether it's compressed or liquid . You know , the system adapts to to that the storage system is the big difference going from a liquid storage to a compressed storage .

Speaker #2: And that's what we're bringing . And , and the first truck on the road is a Volvo truck . It's their new , new truck .

Speaker #2: And we're very excited to have it showing up at Act and yeah , this is , this is pretty exciting for us . We're , you know , we're finally getting to execute on this , this strategy and any growth we have on this back of cab system obviously pulls through Hpdi for Cyspera .

Eric Stine: Yep. Nope. Absolutely. Okay. Thanks for that. Just housekeeping for my last question or questions. Just, I might have missed it, but did you quantify or estimate what you think the move did in terms of limiting Q4 for the high-pressure segment?

Speaker #6: Yep . Nope . Absolutely . Okay . Thanks for that . And just housekeeping for my last question or questions , just I might have missed it , but did you quantify , you know , or estimate what you think the move did in terms of limiting Q4 for the high pressure segment ?

Daniel Sceli: Oh, sure. I think we lost probably a couple of months of production. We had built up some inventory, but when you lose a couple of months production, you got to play catch up. That coincides with a bit of the market pause that had happened. We've launched both plants. Both plants are up and running, and shipping product. We've gotten through that transition hump, through the launch hump, and we're pretty excited about where that's going to go. We have the control in our hands.

Speaker #2: Oh , sure . I mean , we , I think we lost probably a couple of months of production and , you know , we had built up some inventory , but when you lose a couple of months production , you got to play catch up .

Speaker #2: And you know , that coincides with a bit of the market pause that had happened . But we've launched both plants . Both plants are up and running and and shipping product .

Speaker #2: So , you know , we've gotten through that transition hump through the , you know , the launch hump and , you know , we're , we're pretty excited about where that's going to go .

Speaker #2: We have the control in our hands .

Eric Stine: Okay. Thank you.

Speaker #6: Okay . Thank you .

Daniel Sceli: Perfect. All right. Thanks, Eric. Well, that's all the questions we have for today. I want to thank you for your time, everyone. Have a great, wonderful weekend.

Speaker #2: Perfect . All right . Thanks , Eric . Well , that's , that's all the questions we have for today . I want to thank you for your time , everyone , and have a great , wonderful weekend .

Operator: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, standby.

Speaker #3: Ladies and gentlemen , thank you for participating in today's conference . This concludes the program . You may now disconnect . Everyone , have a wonderful day .

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