Fuel cell manufacturer Ballard Power Systems‘ total revenue dropped 45% year-over-year (YoY) to $14.8 million in the third quarter (Q3) of 2024, impacted by softening customer demand with the adoption curve for hydrogen and proton exchange membrane (PEM) fuel cells lengthening.

Within the heavy-duty mobility segment, revenue fell 38% YoY to $12.8 million due to reduced sales in the rail, truck, and marine verticals. However, bus revenue surged by 33% YoY to reach $11.2 million, offering a partial offset to the overall decline.

In other segments, stationary revenue dropped sharply by 82% YoY to $500,000, while emerging and other markets recorded a 60% reduction to $1.4 million.

Operating expenses for the quarter rose 58% to $54.9 million, driven by a $16.1 million restructuring charge and a $7.9 million impairment related to specific trade receivables.

Net loss from continuing operations stood at $204.5 million, an increase of 489.3% YoY. The loss includes $40.3 million in goodwill impairment charges and $106.8 million in impairments on property, plant, and equipment.

Excluding these impairments, the net loss was $57.5 million, compared to $34.7 million in Q3 2023.

The company reported a negative earnings per share (EPS) of $0.19, missing analyst estimates by $0.06.

Adjusted EBITDA went up to a loss of $60.1 million from $34.9 million, largely due to reduced revenue, a weaker gross margin, and the restructuring charge.

Order intake

New order intake for the quarter reached $7.1 million, offset by the removal of $39.2 million in previously booked orders from high-risk markets and customers, including China.

Orders delivered during Q3 were valued at $14.8 million, bringing the order backlog to approximately $122.7 million, a 28% decrease from the previous quarter.

The 12-month order book also dropped to $58.2 million at the end of Q3, impacted by the delivery of orders in the quarter, lower new order intake, and the removal of high-risk orders.

During the earnings call, Ballard’s CEO, Randy MacEwen highlighted the challenging landscape faced by the company and the broader sector. He noted that the current macroeconomic conditions and geopolitical uncertainties have created a difficult environment for growth and investment in hydrogen technologies.

Despite these challenges, Ballard said it remains committed to its strategic initiatives and is actively working on expanding its product offerings and enhancing its technological capabilities to better position itself for future opportunities in a rapidly evolving market.

The management team urged stakeholders to consider hydrogen’s potential as a clean energy solution, particularly as global policies increasingly favor sustainable energy sources.

The company’s Q2 2024 revenue reached $16 million, a 4% YoY increase, aided by a 48% YoY increase in fuel cell product sales, which constituted 84% of total revenue, up from 59% in Q2 2023.

The company recorded a net loss from continuing operations of $41.1 million in the first quarter of 2024, an increase of 26.8% YoY from a net loss of $32.4 million.

In January this year, Adani Enterprises signed an agreement to launch a pilot project to develop a hydrogen fuel cell electric truck with Ballard Power.