Westport Fuel Systems (NASDAQ:WPRT) said its second-quarter results reflected progress in its clean transportation platforms, led by revenue growth and improving losses at its Cespira joint venture with Volvo Group, while the company also completed a $10 million financing to support working capital and strategic priorities.
Chief Executive Officer Dan Sceli said the company remains focused on scalable transportation technologies that can reduce emissions and operating costs without sacrificing fleet performance. During the quarter, Cespira signed an agreement with Volvo Group to complete development of a hydrogen fuel engine using high-pressure direct injection, or HPDI, technology.
Cespira Revenue Growth and Path to Break-Even
Cespira, Westport’s joint venture with Volvo Group, reported its strongest year-over-year revenue growth since its inception, according to Chief Financial Officer Elizabeth Owens. Product revenue rose 127% to $18.9 million in the second quarter from $8.3 million a year earlier. Aftermarket revenue increased to $5.5 million from $2.6 million, while service revenue rose to $2.6 million from $1 million, aided by project milestones.
Owens said Cespira’s total revenue growth was 125% compared with the second quarter of 2025. Gross profit reached $3.8 million, compared with a gross loss of $1.9 million in the prior-year period. The venture’s net loss narrowed 65% to $2.4 million from $6.7 million.
Management continued to target 2027 as the year Cespira reaches break-even. Westport’s capital contributions to the venture fell to $3.5 million in the quarter, and Owens said the company expects those contributions to continue declining as Cespira increases volume.
Sceli said the venture’s growth is supported by adoption of liquefied natural gas-powered heavy-duty trucks, including the fuel-price differential between LNG and diesel. He also cited European emissions regulations and the potential value of CO2 credits for original equipment manufacturers deploying lower-emission technologies before 2030.
During the question-and-answer session, Sceli said Cespira’s systems are now operating in 37 countries and in more than 12,000 trucks. He added that Volvo is developing positions in markets including South America and India. A second OEM customer that previously completed a 200-truck trial is planning a larger second phase of field trials, although Sceli said the company expects it could take at least another month to learn the customer’s plans.
The hydrogen engine program with Volvo is customer-funded, Sceli said. The agreement calls for Volvo to fund development of the HPDI system for hydrogen.
High-Pressure Controls Faces Production Ramp-Up
Westport’s High-Pressure Controls segment generated second-quarter revenue of $2.7 million, down from $2.9 million a year earlier, primarily because of lower sales volume. Gross profit was $0.1 million, or 5% of revenue, consistent with the prior-year period.
Owens said demand backlog remained at the end of the quarter as the company works to improve output at manufacturing facilities in Cambridge, Ontario, and Changzhou, China. Sceli said the production constraints stemmed largely from moving equipment from Europe, installing it at the new locations, obtaining certifications, and training workers.
He said the company views the first and second quarters as a transition period and expects the facilities to ramp volumes in the second half of the year without additional major bottlenecks. Management expects the segment’s manufacturing processes, localized supply chains, output and margins to improve over time.
Sceli also noted that the broader hydrogen market has not expanded as quickly as the company expected a year earlier. However, he said Westport expects volume gains in China as the country continues to promote hydrogen in mobility applications and said the company expects to exceed its volume plan in North America and Europe this year.
Financing Adds Liquidity
In June, Westport completed a registered direct offering and concurrent private placement that generated approximately $10 million in gross proceeds before fees and expenses. The company sold 1.6 million common shares and 3.3 million pre-funded warrants, along with private placement warrants to purchase up to 4.8 million common shares, at a combined effective purchase price of $2.06 per common share or pre-funded warrant and associated private placement warrant.
The proceeds are intended for working capital and general corporate purposes. If the private placement warrants are fully exercised for cash, Westport could receive an additional approximately $10 million in gross proceeds, though Owens said the timing and likelihood of exercise cannot be predicted.
Cash and cash equivalents stood at $23.9 million at the end of June, compared with $24.5 million at March 31. Owens attributed the modest decrease primarily to operating losses, one-time financing and cyber-incident costs, Cespira funding and debt repayment, partly offset by financing proceeds.
Westport repaid $1 million of debt to Export Development Canada during the quarter and expects to make its final debt repayment in the third quarter.
Looking ahead, Sceli said the company will prioritize disciplined execution across Cespira, high-pressure compressed natural gas systems in North America, and its high-pressure controls operations serving hydrogen, natural gas and industrial applications.
About Westport Fuel Systems (NASDAQ:WPRT)
Westport Fuel Systems Inc is a Canadian-based company that designs, engineers and manufactures alternative fuel systems and components for transportation and industrial applications. Specializing in natural gas, propane and hydrogen technologies, the company develops complete fuel delivery systems, high-pressure direct injection solutions and fuel storage modules tailored for light-, medium- and heavy-duty vehicles. Its platforms are designed to reduce emissions and lower operating costs for original equipment manufacturers (OEMs) and fleet operators worldwide.
The company’s product portfolio includes compressed natural gas (CNG) and liquefied natural gas (LNG) fuel systems, electronic controls, injectors, pressure regulators and specialized fuel tanks.
