Nel ASA (NLLSF) Q2 2025 Earnings Call Transcript

Nel ASA reported Q2 2025 revenues of NOK 174 million, a 48% year-over-year decline, with a negative EBITDA of NOK 86 million, though results largely met analyst consensus. The quarter was notably impacted by the cancellation of a 40-megawatt alkaline electrolyzer contract by Statkraft, contributing to a low order intake of NOK 71 million, while the order backlog stands at NOK 1.25 billion. Despite these challenges, Nel highlighted the launch of Samsung E&A's CompassH2 solution with "Nel Inside" and a new MOU with HydePoint for modular hydrogen systems, maintaining a robust cash balance of NOK 1.9 billion.

Analysis

Nel ASA's second-quarter 2025 results reveal significant operational headwinds, with revenues declining 48% year-over-year to NOK 174 million and an EBITDA loss of NOK 86 million. While these figures were largely in line with analyst consensus, they underscore a challenging commercial environment. The quarter was marked by a substantial setback with the cancellation of a 40-megawatt electrolyzer contract by Statkraft, which contributed to a very low order intake of just NOK 71 million. This puts pressure on the existing NOK 1.25 billion order backlog. On a more positive note, the company is making strategic progress through partnerships, evidenced by Samsung E&A's launch of a hydrogen plant solution featuring "Nel Inside" and a new memorandum of understanding with HydePoint to develop modular hydrogen systems. Nel maintains a strong liquidity position with a cash balance of NOK 1.9 billion, providing a crucial buffer against the ongoing operational losses and revenue shortfall.

Key Decisions for Investors

• Investors should scrutinize future order intake and the conversion of the NOK 1.25 billion backlog into revenue, as the Statkraft contract cancellation highlights significant commercial risk.
• Given the negative EBITDA of NOK 86 million, the company's cash burn rate against its NOK 1.9 billion cash balance is a critical metric to monitor, especially with new orders lagging.
• The strategic partnerships with Samsung E&A and HydePoint are potential long-term catalysts, but their value depends on them translating into firm orders and material revenue streams in the coming quarters.