Hyliion Posts Q2 Revenue Miss and Delay

Hyliion (HYLN 7.64%), an early-stage company developing clean power solutions for distributed generation, released its second quarter 2025 earnings on August 12, 2025. The company cut its 2025 revenue guidance to $5 to $10 million, down from $10 to $15 million—and a delay of the company’s commercial launch from late 2025 to 2026. GAAP revenue for the quarter totaled $1.5 million, entirely from research and development services, slightly below analyst expectations of $1.6 million (GAAP). Net loss (GAAP) widened to $13.4 million from $10.9 million year-over-year, as higher research and development costs offset a small gain in gross profit. Overall, the period showed technical and partnership progress, but financial results remained constrained by continued high operating losses and delays in product rollout.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding Hyliion’s business and growth priorities

Hyliion develops fuel-flexible generator systems called the KARNO Power Module. These modules are designed to generate electricity with high efficiency and low emissions, using a variety of fuels including hydrogen, ammonia, natural gas, and waste gases. The company’s technology focuses on distributed power—generating electricity close to where it’s needed rather than relying on large central power plants and long-distance transmission.

The company’s growth strategy centers around proving the KARNO generator in demanding settings and building scale through government contracts, pilot deployments, and commercial agreements. Recent areas of focus include overcoming technical challenges, streamlining production, and forming strategic partnerships, particularly with the U.S. Navy. Hyliion also emphasizes the ability to scale up output as it shifts from early pilot units to broader commercial sales. Success will depend on advancing technical capabilities, closing binding sales contracts from current expressions of interest, and commercializing its platform on schedule.

Quarter highlights: Progress, delays, and financial trends

All GAAP revenue in Q2 2025 came from research and development services for the U.S. Navy, showing continued progress in government partnerships but not yet from commercial product sales. The reported GAAP revenue for the quarter missed analyst estimates by $0.1 million. Operating expenses rose 12.9% to $15.8 million, compared to $14.0 million in the prior-year quarter, driven mainly by a jump in research and development costs—up to $10.1 million from $8.3 million—as the company invested further in product development and technical capacity. Selling, general and administrative expenses (GAAP) saw a small decrease to $6.0 million from $6.3 million year-over-year, helping offset the overall rise in costs.

Net loss (GAAP) for the quarter was $13.4 million, a further decline from the $10.856 million net loss a year earlier. Cash and investments (GAAP) at quarter-end totaled approximately $185 million, with company projections showing a year-end cash and investment balance of approximately $155 million due to continued high cash usage. Cash outlays for 2025 are now expected to be about $65 million, up from previous estimates due to tariffs, faster R&D spending, and further capital expenditures as Hyliion ramps up production.

On the operational front, the company addressed previously reported bottlenecks by bringing the manufacturing of key components, like linear electric motors, in-house. This transition was expected to improve production throughput to meet deployment targets. Hyliion also solved a challenge with cleaning (“depowdering”) a core part of its generator known as the “regen,” redesigning it to improve performance. Additionally, the company delivered a second early adopter KARNO unit to the U.S. Navy, with two more nearing completion—one targeting a safety certification, and another for a commercial customer.

Despite these advances, a significant development was the postponement of Hyliion’s full commercialization timeline to 2026. The shift pushed expected 2025 GAAP revenue lower, cutting the forecast in half to $5 to $10 million, down from the prior $10 to $15 million guidance. The company plans to deploy all ten Early Adopter customer units this year, but expects any broader market sales to begin after this deployment and as its technology secures key certifications. Management explained that the delay results from extra time needed to validate its technical improvements and ramp up component production.

The quarter also saw Hyliion expand its strategic reach. The company signed a new government contract—Phase II of a Small Business Innovation Research award worth up to $1.5 million—to develop versions of the KARNO Power Module for larger-scale Navy applications. Internationally, a memorandum of understanding with Saudi-based Alkhorayef Industries outlined aspirations for a possible $1 billion deployment, though this agreement is not yet binding and is targeted for 2026. The U.S. government has also recognized the company’s technology for a 30% Investment Tax Credit on eligible projects that begin construction in 2026 or later, improving future customer economics. The company declared no dividend for the period.

Looking ahead: Guidance and key trends to monitor

For the rest of 2025, Hyliion now expects total GAAP revenue between $5 and $10 million—down from the prior $10 to $15 million range—reflecting a revised commercial launch target of 2026 and delays in shifting from research revenue to product sales. Year-end cash is projected near $155 million, supporting ongoing investments in production and development. The company has not provided further detailed annual or quarterly guidance beyond these headline figures. The objectives for the coming months are to complete all Early Adopter unit deployments, secure safety certifications, and finalize additional large contracts that could translate prior non-binding agreements into sales.

Management did not announce any plans to pay a dividend and continues to caution that future revenue depends on successful scaling and commercial acceptance of the KARNO module. Investors should monitor further technical developments, progress with government and commercial partners, and the conversion of memoranda of understanding into binding contracts. With product commercialization now several quarters away, Hyliion’s ability to manage cash flow, prove reliability in field deployments, and demonstrate customer interest will be especially critical. HYLN does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.