Nel (NEL) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was NOK 155 million, down 44% year-over-year, with EBITDA at -NOK 115 million and a net loss of NOK 179 million; order intake reached NOK 311 million and order backlog was NOK 1.46 billion.

• Cash balance at quarter-end was NOK 2.059 billion, supported by a NOK 353 million private placement with Samsung E&A, now the largest shareholder.

• Significant cost reduction and capacity adjustment measures were implemented, including a temporary halt at the Herøya facility and workforce reductions.

• Record high PEM order intake, driven by strong demand for containerized solutions and major contracts with US steel producers and the US Navy.

• Awarded USD 29 million in US tax credits for Michigan expansion and received a EUR 135 million EU Innovation Fund grant for pressurized alkaline technology.

Financial highlights

• Revenue declined 44% year-over-year to NOK 155 million, mainly due to lower alkaline activity; EBITDA margin remained negative.

• PEM revenues increased 64% year-over-year, while alkaline segment revenue fell 69% year-over-year.

• Order intake dropped 22% year-over-year; order backlog declined 31% year-over-year to NOK 1.46 billion.

• Cash burn rate and CapEx have been significantly reduced, with CapEx for 2025 expected to decrease by nearly 50% from 2024.

• Net cash flow from operations was NOK -58 million; cash and cash equivalents at quarter-end were NOK 2.059 billion.

Outlook and guidance

• Order intake for 2025 is expected to exceed 2024, with higher quality projects in the pipeline and stricter qualification requirements.

• Market demand currently favors small and medium-sized PEM projects, with large-scale projects expected to proceed in stages as regulatory clarity improves.

• Cost base and employee count to decrease further, supporting a more sustainable cash burn rate and improved profitability over time.

• Investments expected to decrease by about 50% in 2025 following PEM plant expansion.

• Continued investment in next-generation technology is prioritized to maintain competitiveness.