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DATE

Wednesday, Aug. 12, 2026 at 9:30 a.m. ET

CALL PARTICIPANTS

  • Investor Relations - Ashley Nuell
  • Chief Executive Officer and Director - Daniel Sceli
  • Chief Financial Officer - Elizabeth Owens

TAKEAWAYS

  • Cespira Total Revenue -- $27.1 million, representing 125% year-over-year growth driven by increased product, aftermarket, and service volumes.
  • Cespira Product Revenue -- $18.9 million, up 127% year over year reflecting favorable price differentials between diesel and natural gas in Europe.
  • Cespira Net Loss -- $2.4 million, a 65% improvement from the $6.7 million loss in the second quarter of 2025 due to scaled revenue and a lower cost base.
  • High Pressure Controls Revenue -- $2.7 million, a 6% decrease from $2.9 million in the prior year quarter primarily due to lower sales volume during facility transitions.
  • High Pressure Controls Gross Profit -- $100,000, representing a 5% margin which was limited by transition-related manufacturing output constraints.
  • Cash and Cash Equivalents -- $23.9 million as of June 30, 2026, down slightly from $24.5 million at the end of the first quarter of 2026.
  • Equity Offering Proceeds -- $10 million gross proceeds from a June 2026 financing involving 1.6 million common shares and 3.3 million prefunded warrants.
  • Cespira Gross Profit -- $3.8 million, an improvement compared to a gross loss of $1.9 million in the second quarter of 2025.
  • Capital Contributions -- $3.5 million to the Cespira joint venture, down from $4.2 million in the prior year quarter as the venture moves toward breakeven.
  • Debt Repayment -- $1 million paid to EDC during the quarter, with the final payment scheduled for the third quarter of 2026.
  • Net Loss from Continuing Operations -- $11.4 million compared to $5.1 million in the second quarter of 2025.
  • Adjusted EBITDA -- Negative $6.3 million, widening from negative $1.0 million in the prior year period.
  • Cespira Aftermarket Revenue -- $5.5 million, more than doubling from $2.6 million due to higher global sales volumes.
  • Cespira Service Revenue -- $2.6 million, increasing 156% year over year based on achieved engineering project milestones.
  • Research and Development Expenses -- $1.2 million, a 23% decrease driven by the reallocation of engineering resources to manufacturing improvements.
  • Foreign Exchange Loss -- $1.7 million, primarily reflecting unrealized losses from the translation of U.S. dollar denominated debt.
  • Operational Footprint -- Production is currently active at facilities in Cambridge, Ontario and Jiangsu, China, following the relocation of equipment from Europe.
  • Total Trucks on Road -- Over 12,000 trucks are currently operating with the company's technology across 37 global markets.
  • Offering Purchase Price -- $2.06 per common share or prefunded warrant and associated private placement warrant.

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RISKS

  • Management stated in the MD&A that projected cash and operating requirements "raise substantial doubt about Westport's ability continue as a going concern within one year."
  • Sceli noted that "the hydrogen market itself is not growing at the rate we thought it would a year ago," indicating slower than anticipated adoption in mobility markets.
  • Sceli warned that facility relocations left the company "a bit behind on volume" as plants required certification and personnel training.

SUMMARY

Management reported that Cespira, the joint venture with Volvo Group, generated $27.1 million in revenue and reduced its net loss to $2.4 million during the quarter. The company stated that growth in the venture is driven by the consistent price differential between liquefied natural gas and diesel, alongside regulatory incentives for lower-emission trucks in Europe. Westport Fuel Systems Inc. (WPRT +2.86%) raised $10 million through an equity offering in June to support working capital and its strategic focus on high-impact clean transportation solutions. Management noted that manufacturing output at facilities in Canada and China is improving following the relocation of equipment from Europe, while the company continues to target 2027 as the breakeven year for Cespira.

  • Sceli reported that Cespira signed an agreement with Volvo Group to "complete development of a hydrogen-fueled engine" using HPDI technology.
  • Owens highlighted that capital contributions to Cespira decreased to $3.5 million, reflecting "the improvement of Cespira's financial performance."
  • Sceli stated that a second OEM customer is "planning out the second phase of their field trials" following a successful initial 200-truck trial.
  • Management identified that a significant engineering service project is expected to complete in the fourth quarter of 2026, ahead of a Euro 7 product launch.
  • Sceli attributed the 125% volume growth in Cespira to the market's acceptance that the "technology is proven" and "reliable" across 37 countries.
  • Owens noted that the June financing included settlement features requiring warrants to be accounted for as a liability and remeasured to fair value each reporting date.

INDUSTRY GLOSSARY

  • Cespira: The 55/45 joint venture between Westport and Volvo Group focused on HPDI technology.
  • EDC: Export Development Canada, a financial institution providing debt to the company.
  • Euro 7: An upcoming European Union emission standard for heavy-duty vehicles.
  • HPDI (High Pressure Direct Injection): A fuel system that allows diesel engines to run on gaseous fuels like natural gas or hydrogen with equivalent performance.
  • LNG/CNG/RNG: Liquefied Natural Gas, Compressed Natural Gas, and Renewable Natural Gas used as alternative fuels.
  • TSA (Transitional Service Agreement): An agreement where one company provides services to another following a reorganization or divestiture.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to Westport's Second Quarter 26 Conference Call. At this time, participants are in a listen-only mode. After speakers' presentation, there will be a question and answer session. To press *11 on your telephone, You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Ashley Nuell. Please go ahead.

Ashley Nuell: Thank you. Good morning, everyone. Welcome to Westport Fuel Systems conference call regarding its second quarter 2026 financial and operational results. This call is being held to coincide with the press release containing Westport's financial results issued yesterday after the markets closed. On today's call, speaking on behalf of Westport will be chief executive officer and director, Daniel Sceli, and chief financial officer, Elizabeth Owens. Attendance on this call is open to the public, but questions will be restricted to the investment community. You are reminded that certain statements made on this conference call and our responses to certain questions may constitute forward-looking statements within the meaning of U.S. and applicable Canadian securities laws.

Forward-looking statements are based on current expectations and involve risks and uncertainties that could cause-- that could actually result that could cause actual results to differ materially. Please refer to Westport's filings for a more complete discussion of these risks. Before I turn the call over to Daniel, I wanted to highlight that since our first quarter release in May, Westport has continued to advance several important corporate and commercial priorities, including superior Cespira's hydrogen development agreement with Volvo and the completion of the $10 million offering. And concurrent private placement. With that, I will turn the call over to you, Daniel.

Daniel Sceli: Thank you, Ashley, and good morning, everyone. Q2 was an important quarter for Westport. We continue to execute against our strategy of focusing the business around high impact scalable, clean transportation solutions, where our technology can deliver meaningful economic and emissions benefits without compromising performance. The quarter was also marked by important developments that strengthen our platform for future growth. First, Cespira, our joint venture with Volvo Group, signed an agreement with Volvo Group to complete development of a hydrogen-fueled engine. This is an important milestone because it reinforces the relevance of HPDI technology across multiple low carbon fuels, including hydrogen, natural gas, and renewable natural gas.

It also further validates the role of internal combustion-engine technology as part of the practical pathway to decarbonizing heavy duty transport. Second, we completed a $10 million offering in June. This financing provided additional working capital to support our ongoing operations and strategic priorities. As we continue to advance the business, We recognize the importance of managing capital carefully, and we remain focused on balancing investment and growth opportunities with continued financial discipline. Operationally, the quarter continued to reinforce the strategic value of our core platforms. At Cespira, we remain encouraged by the commercial momentum we are seeing in LNG powered heavy duty trucks and by the broader market context, supporting adoption.

The Q1 results showed a strong year over year revenue growth and in Q2, we continued building on that foundation through development work, customer engagement, and the hydrogen engine development agreement with Volvo. We have consistently indicated that 2027 would be the break-even year for Cespira, and the results we are seeing continue to build credibility behind that expectation. Since inception, Cespira has delivered quarter over quarter revenue growth with growth delivered in Q2 being particularly significant. That momentum, combined with continued operating leverage, as volumes scale reinforces our confidence that Cespira is progressing toward the financial profile we have been targeting for next year. The message is clear. Cespira is not a single fuel opportunity.

It is a platform that can support multiple lower-carbon pathways for heavy duty transport while preserving the power, range, and reliability fleets require. The volume growth we are seeing is being supported by a more resilient commercial backdrop for LNG heavy duty trucking. Despite ongoing geopolitical tensions, the price differential between LNG and diesel has continued to show consistency reinforcing the economic case for fleets evaluating lower-carbon alternatives that can also support operating cost discipline. At the same time, recent regulatory developments in the European Union are increasing the strategic value of emissions reducing technologies. OEMs are now able to generate additional CO2 credits in the years leading up to 2030, which may help with the compliance from 2030 onward.

That creates a stronger incentive for earlier deployment of lower-emission heavy-duty technologies such as HPDI where reduced emissions can translate into avoided compliance costs and potential emission credit value. In North America, our HPDI high pressure CNG fuel system remains an important area of focus. Following our ACT Expo showcase, we continue to build awareness around a solution designed to deliver diesel-like performance with lower fuel cost potential and reduced emissions. Over the last couple of months, we have had the opportunity to demonstrate our truck to several fleets at our Vancouver facility. Giving them the opportunity to put a driver into the truck.

The level of engagement we are seeing and the feedback we are receiving reinforces that fleets are looking for practical alternatives that can work within existing operating realities rather than requiring a wholesale change in how they run the business. Our high pressure controls business also remains a key part of Westport's value proposition. With production underway at our expanded Cambridge, Ontario facility, and at GFI's China Hydrogen Innovation Center and Manufacturing facility in Jiangsu, China, we continue to believe this business is well positioned to serve growing demand across hydrogen, natural gas, and industrial applications. With that, I will ask Elizabeth to walk through the financial results in more detail. Elizabeth, over to you.

Elizabeth Owens: Thank you, Daniel. Our second quarter financial results have demonstrated meaningful progress. From a capital perspective, the June financing strengthened our near term liquidity profile. Westport closed the sale of 1.6 million common shares and 3.3 million prefunded warrants in a registered direct offering. Together with private placement warrants, to purchase up to 4.8 million common shares, The combined effective purchase price was US $2.06 per common share or prefunded warrant and associated private placement warrant. Generating gross proceeds of approximately $10 million before fees and expenses. The offering proceeds are intended for working capital and general corporate purposes.

In addition, if the private placement warrants are exercised in full for cash, Westport would receive additional gross proceeds of approximately US $10 million although the timing and likelihood of any exercise cannot be predicted. From an accounting perspective, the warrants contain settlement features that require us to account for these warrants as a liability Rather than equity. These liabilities will be remeasured to fair value at each reporting date. with changes recorded through earnings until the warrants are exercised or expire. As of the end of June, our cash and cash equivalents position stood at $23.9 million compared to $24.5 million at 03/31/2026.

The slight net decrease in cash was primarily driven by our operating losses including certain 1-time costs relating to the financing activities and to our cyber incident in Q1. And by the funding of the Cespira JV and debt repayment. This was offset by proceeds from the financing transaction. In the quarter, our capital contributions to Cespira decreased to $3.5 million in the current quarter compared to Q2 25, reflecting the improvement of Cespira's financial performance. We anticipate this number will continue to decrease in the coming year as Cespira continues to drive volume growth. We also paid $1 million in debt repayments to EDC, and we will make our final debt repayment in Q3. Turning to our operating segments.

Q2 26 revenue for our high pressure controls business was $2.7 million compared with 2.9 million for Q2 25. The decrease in revenue was primarily driven by lower sales volume in the quarter. That said, at the end of the quarter, we did see a backlog of demand from customers that are waiting to be fulfilled as we continue to improve the production output from our 2 main manufacturing plants in Canada and China. Gross profit was $100 thousand or 5% of revenue, similar to what we saw in Q2 25. We anticipate that as the manufacturing plants in Canada and China continue to work on localizing its supply-chain and improving its manufacturing processes and output.

Gross profit and margin will improve. Since Cespira's beginning, we have driven quarter over quarter revenue growth with Q2 26 being the strongest. At 125% as compared to Q2 25. The broader strategic direction remains consistent with what we outlined in Q1. ZESBIRA is benefiting from demand for practical, lower-carbon heavy-duty solutions. The hydrogen development agreement signed during the quarter along with the work completed by the second OEM all add important technology pathways to the existing LNG and renewable natural gas opportunity. Product revenue was up 127%. To $18.9 million compared to $8.3 million in Q2 25.

As Dan mentioned, Suspira's growth is influenced by the favorable price differential between diesel and natural gas and government regulation support in markets like Europe. Aftermarket revenue was 5.5 million compared to $2.6 million also driven by the increase in sales volumes. Service revenue was 2.6 million compared to $1 million in Q2 of 2025, primarily driven by the milestones achieved. Service revenue allocated to project milestones is weighted differently across the phases of an engineering service revenue project, 1 of Suspira's significant long term engineering service revenue projects is expected to complete in Q4 26. In advance of the anticipated launch of their Euro 7 product.

Gross profit was 3.8 million compared to gross loss of 1.9 million in Q2 25. Cespira had a net loss of $2.4 million, a 65% improvement over the $6.7 million in Q2 25 as a meaningfully increase product revenue and lowered their cost base. and continued to grow and scale the business. Year to date, we have seen our capital contributions to Cespira decrease, a trend that we see continuing, as Daniel mentioned, as they move towards an expected breakeven next year. With that, I will pass the call back to Daniel.

Daniel Sceli: Thank you, Elizabeth. As we look ahead, Westport is focused on disciplined execution. The developments since our Q1 release reinforced the progress we are making across the business. Cespira continues to advance to perform true heavy-duty decarbonization. The hydrogen engine development agreement with Volvo is the same with the rest of HPPI technology. Our high pressure CNG solution is gaining visibility in North America, and the June financing provided additional flexibility to continue advancing our priorities. We are operating in a market where customers are not looking for theory. They are looking for solutions that can reduce emissions, lower operating costs, and maintain the performance they need today. That is where Westport is focused.

We believe our technologies are well aligned with the realities of commercial transportation, and industrial applications. And we are committed to translating that alignment into commercial traction, improved financial performance, and long term shareholder value. Thank you for your time today, and we appreciate your continued interest in Westport. And we will now open the call for questions.

Operator: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press 11 on your telephone. If your question has been answered, you wish to remove yourself from the queue. Our first question comes from Amit Dayal with H. C. Wainwright. Your line is open.

Amit Dayal: Thank you. Good morning, guys.

Daniel Sceli: Hey, good morning. Hey, Daniel.

Amit Dayal: Good to see Cespira, you know, coming through in a strong way for you guys. Can you maybe give us a little bit more color on what are some of the tactical drivers? I know it is a practical solution. You know, it is available But in terms of any specific sales efforts or customer wins, is there anything that is supporting, you know, this trend?

Daniel Sceli: And how should we think about, you know, future growth versus-- sure. So I will break the market for the current LNG system into 2 chunks. You have got the European Union, and then you have got the other countries around the world. The European market is moving forward with its emission credit system with their, new mandates. So the trucking companies are all in OEMs and the fleets are all looking for ways to meet the new requirements that are coming up Euro 7 is a big part of that. For the new engine from Volvo. With our HPDI 3.0. And I think that we are going to see more and more of this increased growth.

The market is finding that it is no longer a question of the technology. The technology is proven. it is reliable. And the market's accepting the benefits that come with that. And now what we are seeing is the economics solutions are also becoming very prevalent and giving us the growth that we have been looking for, and then we knew would come And so we think it is going to continue. Then outside of the European Union, you know, the Volvo is moving and creating beachheads in South America and India. We are in 37 countries now, over 12 thousand trucks on the road. So that adoption is gonna continue to grow rapidly.

Not just in Europe, but in those other global countries. And then, of course, you know, our plan to bring HPDI to North America is mission critical as well. That, you know, we are bringing a new storage system, a CNG system that will allow HPDI to run-in North America. For us, it is very exciting to see this significant growth.

Amit Dayal: Yes. I understand. Thank you for that, Daniel. And then just to follow-up on, you know, the HPDI hydrogen efforts between Cespira and Volvo. There is no sort of requirement for Westport to maybe fund any of this. Right? This is just going to be between Cespira and Volvo, and they are gonna figure out, like, how to fund this effort, how to, you know, bring that to market.

Daniel Sceli: Well, it is a development contract that Volvo is funding the development of the HPDI system. For hydrogen. So it is a customer funded development program.

Amit Dayal: Okay. Understood. Yeah. that is all I have. I will get back in the queue, guys.

Daniel Sceli: Thanks. So-- Great. Thanks, Amit.

Operator: 1 moment for our next question. Our next question comes from Eric Stine with Craig Hallum Capital Group. Your line is open.

Eric Stine: Good morning, everyone.

Daniel Sceli: Hey. Good morning, Eric. How are you?

Eric Stine: Doing well. You?

Daniel Sceli: Doing alright.

Eric Stine: Good. So maybe I will just start with the high pressure segment. You alluded to, you know, some, I guess, unfulfilled demand as your 2 locations, Canada and China, ramp up. I am just curious. I mean, is this kind of just the typical ramp up now that your equipment has been moved to both locations, or is there something else that is maybe limiting that in visibility that is near term impact?

Daniel Sceli: Yeah. it is it is a bit of a combination. So, you know, the time we had to shut down, pick up the equipment, move it from Europe, to both Canada and China, install the equipment, get the facilities certified, and then up and running that is the primary issue. it is typical, you know, transferring of capital equipment. And then obviously launching it, you know, training people on this equipment and getting them hitting volume. So, you know, we are seeing a very typical changeover impact that has left us a bit behind on volume.

Eric Stine: And is this something I mean, once that is rectified in both locations that you know, it means there is know, some upside to these numbers. I mean, this quarter is the highest high pressure revenue you have had in, I guess, 4. So just curious, do you view that Q2 was limited in a big way on the top line? Or how should we think about that?

Daniel Sceli: Well, yeah. I think Q1, Q2 were the transition periods. As we go into Q3 and Q4, it is just ramping up volume meeting the various customer demands and so I do not I do not think we have any more roadblocks or bottlenecks that would prevent us from hitting the volumes that are in the plan.

Eric Stine: Got it. Okay. And then just on, Suspira, you mentioned that, 27 is when you are targeting breakeven. I know you have now had 2 consecutive quarters of positive gross margin in that joint venture. Just curious how we should think about that. And once you do get to breakeven, curious what that does, or could you remind us what that does in terms of reducing your capital contribution to the joint venture?

Daniel Sceli: Yeah. I mean, the moment they flip over to breakeven and do not need a cash contribution, that is a huge step in the right direction for, both Westport and Volvo. You know, as we have said in the talk, you know, volumes are up 125% over the same period last year. it is fantastic. And we see that continued strong growth in all 37 countries that are that are buying the system today. And with Volvo launching the new Euro 7 engine, which is a much, much improved engine. They have done a fantastic job on that engine. From all aspects.

Combined with our new HPDI 3.0, you know, we think that the market pull is going to be even stronger. So you know, we are very excited that we are crossing over that period. We figured it would be, you know, 3 or 4 years before we could get there. And with the volumes, we are getting there, maybe even cheaper than we thought. So we are pretty happy about it. We think it is going to continue. Now it is a question of, you know, getting the HPDI system into North America and adding volume to that.

Eric Stine: Yep. And so just to be clear, the contributions to the joint venture, those are not necessarily dictated over a period of time. that is really dictated by getting to that breakeven mark. And then once that is done, know, by and large, those contributions end.

Daniel Sceli: Yeah. it is really a cash need. It was not any fixed--you know, fixed numbers that were written into the agreement. It was a case of, you know, year by year, quarter by quarter, evaluating the cash needs of the business. Recall that you know, to start the business up back in 24, to be a certified tier 1, we needed a fully built out company. All disciplines, all so from day 1, we had the full overhead cost. And as volumes go up, we are not adding--I mean, that is in place. We do not have to add more of that.

And so we are gonna continue to take advantage of that volume and we will not have the cash calls as we have seen for the last or 2.5 years.

Eric Stine: Okay. Thank you very much.

Daniel Sceli: Alright. Take care, Eric.

Operator: And I am not showing any further questions at this time. I would like to turn the call back to Daniel for any further remarks.

Daniel Sceli: Well, I would like to thank everybody for joining today. I hope you find our talk-- sorry. I am sorry. I did not mean to interrupt.

Operator: We just-- we just did have someone queue up. Did you want to go and take the question?

Daniel Sceli: Absolutely. Sure.

Operator: 1 moment. Our next question comes from Christopher Dendrinos with RBC Capital Markets. Your line is open.

Christopher Dendrinos: Hi. Yes. Thanks for fitting me in. I apologize. No worries, Christopher.

Daniel Sceli: No worries.

Christopher Dendrinos: Steven [ph], but I missed it. Maybe just to start here and follow-up on a couple of the prior questions. But, you know, following on the on the Cespira commentary here, and you mentioned some additional work with that second potential OEM customer. Can you just you know, expand on that a little bit, where you all are at with them and you know, possible timing related to I guess, call it additional milestones or additional advancements?

Daniel Sceli: In that agreement? Yep. Yep. So that second OEM did the original. I think it was a 200-truck trial. And we are at the stage now where they are planning out the second phase of their field trials, which would be much larger than the original field trial. And we are imminently awaiting to hear their planning for that. And so it is probably going to be, you know, another month at least before we hear what their next their next phase is. But, you know, what we have heard so far is that phase 1, the initial field trials went extremely well. Got it.

Christopher Dendrinos: Thank you. Then maybe just to follow-up on Eric's question. In regards to the high pressure systems. Trying to nail you down on something here. So, you know, if you all were not kind of call it, bottlenecks on the manufacturing side of things, would you anticipate revenue growth in the in the back half of this year? Thanks.

Daniel Sceli: I think that, the revenue growth is going to come. We are-- you know, as I said, we, you know, we lost about 6 months in picking up the equipment, moving it, installing it. Getting the facilities recertified to the industrial and automotive standards. And so there is gonna be a bit of-- there is still a bit of backlog that we are filling. So, you know, the market itself, the hydrogen market itself is not growing at the rate we thought it would a year ago. I think we have all acknowledged that.

But I think that we are going to see specifically in China, as the government continues to push for the rapid growth of hydrogen across their markets, their mobility markets. We are gonna see some volume increases. In North America and Europe. I think we are gonna get right back to plan and we expect to beat our plan this year on volume.

Christopher Dendrinos: Got it. Thank you very much.

Daniel Sceli: Alright.

Operator: And that was our last question. Back to you, Daniel.

Daniel Sceli: Alright. Well, thank you, everybody for joining the call. I hope you leave as excited as we are about the growing business of Cespira. it is finally coming, to where we all thought it would. So, have a great day. Thank you.

Operator: Ladies and gentlemen, this does conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day. Thank you. Good day, and thank you for standing by. Welcome to Westport's Second Quarter 26 Conference Call. At this time, participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. Press 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised, today's conference is being recorded. I would now like to turn the conference over to your speaker today, Ashley Nuell. Please go ahead. Thank you. Good morning, everyone.

Welcome to Westport Fuel Systems conference call regarding its second quarter 2026 financial and operational results. This call is being held to coincide with the press release containing Westport's financial results issued yesterday after market close. On today's call, speaking on behalf of Westport will be chief executive officer and director, Daniel Sceli, and chief financial officer, Elizabeth Owens. Attendance on this call is open to the public, but questions will be restricted to the investment community. You are reminded that certain statements made on this conference call and our responses to certain questions may constitute forward-looking statements within the meaning of U.S. and applicable Canadian securities laws.

Forward-looking statements are based on current expectations and involve risks and uncertainties that could cause-- that could actually result that could cause actual results to differ materially. Please refer to Westport's filings for a more complete discussion of these risks. Before I turn the call over to Daniel, I wanted to highlight that since our first quarter release in May, Westport has continued to advance several important corporate and commercial priorities, including Cespira's hydrogen development agreement with Volvo and the completion of the $10 million offering. And concurrent private placement. With that, I will turn the call over to you, Daniel. Thank you, Ashley, and good morning, everyone. Q2 was an important quarter for Westport.

We continue to execute against our strategy of focusing the business around high impact scalable, clean transportation solutions, where our technology can deliver meaningful economic and emissions benefits without compromising performance. The quarter was also marked by important developments that strengthen our platform for future growth. First, Cespira, our joint venture with Volvo Group, signed an agreement with Volvo Group to complete development of a hydrogen-fueled engine. This is an important milestone because it reinforces the relevance of HPDI technology across multiple low carbon fuels including hydrogen, natural gas, and renewable natural gas. It also further validates the role of internal combustion-engine technology as part of the practical pathway to decarbonizing heavy duty transport.

Second, we completed a $10 million offering in June. This financing provided additional working capital to support our ongoing operations and strategic priorities. As we continue to advance the business, We recognize the importance of managing capital carefully, and we remain on balancing investment and growth opportunities with continued financial discipline. Operationally, the quarter continued to reinforce the strategic value of our core platforms. At Suspira, we remain encouraged by the commercial momentum we are seeing in LNG powered heavy duty trucks and by the broader market context, supporting adoption.

The Q1 results showed a strong year over year revenue growth and in Q2, we continued building on that foundation through development work, customer engagement, and the hydrogen engine development agreement with Volvo. We have consistently indicated that 2027 would be the break-even year for Cespira, and the results we are seeing continue to build credibility behind that expectation. Since inception, Cespira has delivered quarter over quarter revenue growth with growth delivered in Q2 being particularly significant. That momentum, with continued operating leverage, as volumes scale reinforces our confidence that Spirit is progressing toward the financial profile we have been targeting for next year. The message is clear. Cespira is not a single fuel opportunity.

It is a platform that can support multiple lower-carbon pathways heavy duty transport while preserving the power, range, and reliability fleets require. The volume growth we are seeing is being supported by a more resilient commercial backdrop for LNG heavy duty trucking. Despite ongoing geopolitical tensions, the price differential between LNG and diesel has continued to show consistency reinforcing the economic case for fleets evaluating lower-carbon alternatives that can also support operating cost discipline. At the same time, recent regulatory developments in the European Union are increasing the strategic value of emissions reducing technologies. OEMs are now able to generate additional CO2 credits in the years leading up to 2030, may help with the compliance from 2030 onward.

That creates a stronger incentive for earlier deployment of lower-emission heavy-duty technologies such as HPDI reduced emissions can translate into avoided compliance costs and potential emission credit value. In North America, our HPDI high pressure CNG fuel system remains an important area of focus. Following our ACT Expo showcase, we continue to build awareness around a solution designed to deliver diesel-like performance with lower fuel cost potential and reduced emissions. Over the last couple of months, we have had the opportunity to our truck to several fleets at our Vancouver facility, giving them the opportunity to put a driver into the truck.

The level of engagement we are seeing and the feedback we are receiving reinforce that fleets are looking for practical alternatives that can work within existing operating realities rather than requiring a wholesale change in how they run the business. Our high pressure controls business also remains a key part of Westport's value proposition. With production underway at our expanded Cambridge, Ontario facility, and at GFI's China Hydrogen Innovation Center and Manufacturing, facility in Jiangsu, China, we continue to believe this business is well positioned to serve growing demand across hydrogen, natural gas, and industrial applications. With that, I will ask Elizabeth to walk through the financial results in more detail over to you. Thank you, Daniel.

Our second quarter financial results have demonstrated meaningful progress. From a capital perspective, the June financing strengthened our near term liquidity profile. Westport closed the sale of 1.6 million common shares and 3.3 million prefunded warrants in a registered direct offering. Together with private placement warrants, to purchase up to 4.8 million common shares, The combined effective purchase price was US $2.06 per common share or prefunded warrant and associated private placement warrant. Generating gross proceeds of approximately $10 million before fees and expenses. The offering proceeds are intended for working capital and general corporate purposes. In addition, if the private placement warrants are exercised in full for cash, Westport would receive additional gross proceeds of approximately US $10 million.

Although the timing and likelihood of any exercise cannot be predicted. From an accounting perspective, the warrants contain settlement features that require us to account for these warrants as a liability Rather than equity. These liabilities will be remeasured to fair value at each reporting date with changes recorded through earnings until the warrants are exercised or expire. As of the end of June, our cash and cash equivalents position stood at $23.9 million compared to $24.5 million at 03/31/2026. The slight net decrease in cash was primarily driven by our operating losses including certain 1-time costs relating to the financing activities and to our cyber incident in Q1. And by the funding of the Cespira JV and debt repayment.

This was offset by proceeds from the financing transaction. In the quarter, our capital contributions to Cespira decreased to $3.5 million in the current quarter compared to Q2 25, reflecting the improvement of Cespira's financial performance. We anticipate this number will continue to decrease in the coming year as Cespira continues to drive volume growth. We also paid $1 million in debt repayments to EDC, and we will make our final debt repayment in Q3. Turning to our operating segments, Q2 26 revenue for our high pressure controls business was $2.7 million compared with $2.9 million for Q2 25. The decrease in revenue was primarily driven by lower sales volume in the quarter.

That said, at the end of the quarter, we did see a backlog of demand from customers that are waiting to be fulfilled as we continue to improve the production output from our 2 main manufacturing plants in Canada and China. Gross profit was $100 thousand or 5% of revenue, similar to what we saw in Q2 25. We anticipate that as the manufacturing plants in Canada and China continue to work on localizing its supply-chain and improving its manufacturing processes and output. Gross profit and margin will improve. Since Cespira's beginning, we have driven quarter over quarter revenue growth with Q2 26 being the strongest. At 125% as compared to Q2 25.

The broader strategic direction remains consistent with what we outlined in Q1. Cespira is benefiting from demand for practical, lower-carbon heavy-duty solutions. The hydrogen development agreement signed during the quarter along with the work completed by the second OEM all add important technology pathways to the existing LNG and renewable natural gas opportunity. Product revenue was up 127% to $18.9 million compared to $8.3 million in Q2 25. As Dan mentioned, Suspira's growth is influenced by the favorable price differential between diesel and natural gas and government regulation support in markets like Europe. Aftermarket revenue was $5.5 million compared to $2 million also driven by the increase in sales volumes.

Service revenue was 2.6 million compared to 01/2025, primarily driven by the milestones achieved. Service revenue allocated to project are weighted differently across the phases of an engineering service revenue 1 of Suspira's significant long term engineering service revenue projects is expected to complete in Q4 26. In advance of the anticipated launch of their Euro 7 product. Gross profit was 3.8 million compared to gross loss of 1.9 million in Q2 25. Cespira had a net loss of $2.4 million, a 65% improvement over the $6.7 million in Q2 25. as it meaningfully increased product revenue and lowered their cost base. and continued to grow and scale the business.

Year to date, we have seen our capital contributions to Cespira decrease, a trend that we see continuing, as Daniel mentioned, as they move towards an expected breakeven next year. With that, I will pass the call back to Daniel. Thank you, Elizabeth. As we look ahead, Westport is focused on disciplined execution. The developments since our Q1 release reinforced the progress we are making across the business. Cespira continues to advance to perform true heavy-duty decarbonization. The hydrogen engine development agreement with Volvo is the same with the rest of HPPI technology. Our high pressure CNG solution is gaining visibility in North America, and the June financing provided additional flexibility to continue advancing our priorities.

We are operating in a market where customers are not looking for theory. They are looking for solutions that can reduce emissions, lower operating costs, and maintain the performance they need today. That is where Westport is focused. We believe our technologies are well aligned with the realities of commercial transportation and industrial applications. And we are committed to translating that alignment into commercial traction, improved financial performance, and long term shareholder value. Thank you for your time today, and we appreciate your continued in Westport, and we will now open the call for questions. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press 11 on your telephone.

If your question has been answered, Our first question comes from Amit Dayal with H. C. Wainwright. Your line is open. Hey, Daniel. Good to see Cespira, you know, coming through in a strong way for you guys. Can you maybe give us a little bit more color on what are the some of tactical drivers? I know it is a practical solution. You know, it is available But in terms of any specific sales efforts or customer wins, is there anything that is supporting, you know, this trend? And how should we think about, you know, future growth versus-- sure. So I will break the market for the current LNG system into 2 chunks.

You have got the European Union, and then you have got the other countries around the world. The European market is moving forward with its emission credit system with their new mandates. So the trucking companies are all in OEMs and the fleets are all looking for ways to meet the new requirements that are coming up Euro 7 is a big part of that. For the new engine from Volvo. With our HPDI 3.0. And I think that we are going to see more and more of this increased growth. The market is finding that it is no longer a question of the technology. The technology is proven. it is reliable.

And the market's accepting the benefits that come with that. And now what we are seeing is the economic solutions are also becoming very prevalent and giving us the growth that we have been looking for, and we knew would come And so we think it is going to continue. Then outside of the European Union, you know, the Volvo is moving and creating beachheads in South America and India. We are in 37 countries now, over 12 thousand trucks on the road. So that adoption is gonna continue to grow rapidly. Not just in Europe, but in those other global countries.

And then, of course, you know, our plan to bring H to North America is mission critical as well. That, you know, we are bringing a new storage system, a CNG system that will allow each PDI to run-in North America. For us, it is very exciting to see this significant growth Yes. I understand. Thank you for that, Daniel. And then just to follow-up on, you know, the HPDI hydrogen efforts between Cespira and Volvo. There is no sort of requirement for Westport to maybe fund any of this. Right?

This is just going to be between Cespira and Volvo, and they are gonna figure out, like, how to fund this effort, how to, you know, bring that to market. Well, it is a development contract that Volvo is funding the development of the HPDI system. For hydrogen. So it is a customer funded development program. Okay. Understood. Yeah. that is all I have. I will get back in the queue, guys. Thanks so much. Great. Thanks, Amit. 1 moment for our next question. Our next question comes from Eric Stine with Craig Hallum Capital Group. Your line is open. Good morning, everyone. Hey. Good morning, Eric. How are you? Doing well. You? Doing alright. Good.

So maybe I will just start with the high pressure segment. You alluded to, you know, some, I guess, unfulfilled demand as your 2 locations, Canada and China, ramp up. I am just curious. I mean, is this kind of just the typical ramp up now that your equipment has been moved to both locations, or is there something else that is maybe limiting that in visibility that is near term impact? Yeah. it is it is a bit of a combination.

So you know, the time we had to shut down, pick up the equipment, move it from Europe to both Canada and China, install the equipment, get the facilities certified, and then up and running that is the primary issue. it is typical, you know, transferring of capital equipment. And then obviously launching it, you know, training people on this equipment and getting them hitting volume. So, you know, we are seeing a very typical changeover impact that has left us a bit behind on volume. And is this something I mean, once that is rectified in both locations that you know, it means there is know, some upside to these numbers.

I mean, this quarter is the highest high pressure revenue you have had in, I guess, 4. So just curious, do you view that Q2 was limited in a big way on the top line? Or how should we think about that? Well, yes. I think Q1, Q2 were transition periods. As we go into Q3 and Q4, it is just ramping up volume meeting the various customer demands and so I do not I do not think we have any more roadblocks or bottlenecks that we would end up of hitting the volumes that are in the plan. Got it. Okay. And then just on, Suspira, you mentioned that, 27 is when you are targeting breakeven.

I know you have now had 2 consecutive quarters of positive gross margin in that joint venture. Just curious how we should think about that. And once you do get to breakeven, curious what that does, or could you remind us what that does in terms of reducing your capital contribution to the joint venture? Yeah. I mean, the moment they flip over to breakeven and do not need, cash contributions, that is a huge, a huge, step in the right direction for, both Westport and Volvo. You know, as we have said in the talk, you know, volumes are up 125% over the same period last year. it is fantastic.

And we see that continued strong growth in all 37 countries that are that are buying the system today. And with Volvo launching the new Euro 7 engine, which is a much improved engine. They have done a fantastic job on that engine. From all aspects. Combined with our new HPDI 3.0, you know, we think that the market pull is going to be even stronger. So know, we are very excited that we are crossing over that period. We figured it would be, you know, 3 or 4 years before we could get there. And with the volumes we are getting there, than we thought. So we are pretty happy about it. We think it is going to continue.

Now it is a question of getting the, HPDI system into North America and adding volume to that. Yep. And so just to be clear, the contributions to the joint venture, those are not necessarily dictated over a period of time. that is really dictated by getting to that breakeven mark. And then once that is done, know, by and large, those contributions end. Yeah. it is really a cash need. It was not any fixed--you know, fixed numbers that were written into the agreement. It was a case of you know, year by year, quarter by quarter, evaluating the cash needs of the business.

Recall that you know, to start the business up back in 24, to be a certified tier 1, we needed a fully built out company. All disciplines, all so from day 1, we had the full overhead cost. And as volumes go up, we are not adding--I mean, that is in place. We do not have to add more of that. And so we are gonna continue to take advantage of that volume and we will not have the cash calls as we have seen for the last or 2.5 years. Okay. Thank you very much. Alright. Take care, Eric. And I am not showing any further questions at this time.

I would like to turn the call back to Daniel for any further remarks. Well, I would like to thank everybody for joining today. I hope you find our me there. I am sorry. I did not mean to interrupt. We just-- we just did have someone queue up. Did you want to go and take the question? Absolutely. Sure. 1 moment. Our next question comes from Christopher Dendrinos with RBC Capital Markets. Your line is open. Hi. Yes. Thanks for fitting me in. I apologize. No worries, Christopher. No worries. Steven [ph], but I missed it. Maybe just to start here and follow-up on a couple of the prior questions.

But, you know, following on the on the Cespira commentary here, and you mentioned some additional work with that second potential OEM customer. Can you just you know, expand on that a little bit, where you all are at with them and you know, possible timing related to I guess, call it additional milestones or additional advancements? In that agreement? Yep. Yep. So that second OEM did the original. I think it was a 200-truck trial. And we are we are up the stage now where they are planning out the second phase of their field trials, which would be much larger than the original field trial. And we are imminently awaiting to hear their planning for that.

And so it is probably going to be, you know, another month at least before we hear what their next their next phase is. The know, what we have heard so far is that phase 1, the initial field trials went extremely well. Got it. Thank you. Then maybe just to follow-up on Eric's question. In regards to the high pressure systems. Trying to nail you down on something here. So Yeah. You know, if you all were not kind of call it, bottlenecks on the manufacturing side of things, would you anticipate revenue growth in the in the back half of this year? Thanks. I think that, the revenue growth is going to come.

We are-- you know, as I said, we, you know, we lost about 6 months in picking up the equipment, moving it, installing it. Getting the facilities recertified to the industrial and automotive standards. And so there is gonna be a bit of-- there is still a bit of backlog that we are filling. So, you know, the market itself, the hydrogen market itself is not growing at the rate we thought it would a year ago. I think we have all acknowledged that. But I think that we are going to see specifically in China, as the government continues to push for the, the rapid growth hydrogen across their markets, their mobility markets.

We are gonna see some volume increases And in North America and Europe, I think we are gonna get right back to plan and we expect to beat our plan this year on volume. Got it. Thank you very much. Alright. And that was our last question. Back to you, Daniel. Alright. Well, thank you, everybody for the call. I hope you leave as excited as we are about the growing business of Cespira. it is finally coming, to where we all thought it would. So, have a great day. Thank you. Ladies and gentlemen, this does conclude today's presentation. We thank for your participation. You may now disconnect, and have a wonderful day.