HydrogenPro Q3 2025 slides: Improved margins amid hydrogen project delays

HydrogenPro AS reported mixed Q3 2025 results, with revenues of 35 million NOK and a significantly improved gross margin of 55%, up from 22% in Q2, driven by successful cost-cutting measures. However, the company still posted a negative EBITDA of 45 million NOK, leading to a 6.98% stock decline as investors remain concerned about persistent operational losses and industry-wide project delays, with 90% of green hydrogen projects facing at least a one-year delay. Despite these near-term headwinds, HydrogenPro is advancing flagship projects and expanding partnerships, while the broader green hydrogen market shows long-term growth potential and increasing regulatory support.

Analysis

HydrogenPro AS reported mixed Q3 2025 results, with revenues of 35 million NOK and a significantly improved gross margin of 55%, more than doubling Q2's 22%, driven by successful cost-cutting initiatives. Despite these operational efficiencies, the company posted a negative EBITDA of 45 million NOK, leading to a 6.98% stock decline as investors remain concerned about persistent operational losses. The cash position improved to 121 million NOK, primarily due to a 70 million NOK equity investment.

The green hydrogen sector faces significant headwinds, with 90% of projects scheduled for 2023-2024 experiencing at least a one-year delay, contributing to HydrogenPro's declining backlog to 252 million NOK. Despite this, the company is advancing flagship projects like ACES and SALCOS, and strengthening partnerships in emerging markets such as India and the Middle East. The appointment of a new Chief Commercial Officer underscores a focus on commercial execution.

While near-term challenges persist, the fundamental outlook for green hydrogen remains robust, with global electrolyzer capacity growing from 0.5 GW in 2021 to 7.9 GW in 2025. Regulatory support is expanding, exemplified by the US 45V tax credit extension and the EU's €992 million investment. The International Energy Agency projects a 70-fold growth in green hydrogen production, indicating strong long-term market potential.

Key Decisions for Investors

• Investors should closely monitor HydrogenPro's path to sustained profitability, as improved gross margins and cost savings have not yet translated into positive EBITDA.
• Evaluate the impact of industry-wide project delays on HydrogenPro's backlog conversion and revenue growth trajectory, as this remains a significant near-term headwind.
• Consider the long-term growth potential of the green hydrogen sector and HydrogenPro's strategic positioning with advanced technology and partnerships, while exercising caution regarding near-term execution risks.