Hyzon Motors Inc., Announces Second Quarter 2023 Financial and Operational Results

Recent Highlights 

"Hyzon has made significant strides in the second quarter, both in the advancement of our 200kW fuel cell technology and in the commercialization of our heavy-duty fuel cell electric truck platforms, ” said Parker Meeks, Hyzon Chief Executive Officer. “We have been hard at work streamlining our vehicle offerings, operations, and geographies, and we are proud of the progress we have made at our U.S. fuel cell system production facility. Looking ahead to the remainder of the year, we are excited by the continued advancement of our commercial pipeline across our focused FCEV platforms, with commercial deployments ongoing toward our 10-20 vehicle goal this year. We believe our intense focus and disciplined execution of our operational milestones as well as significant improvements to streamline our business have positioned Hyzon well in the accelerating hydrogen industry.”  

(1) These non-GAAP financial measures have been reconciled to the nearest GAAP measure in the tables under “Non-GAAP Financial Measures” within this press release. These measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate in the same fashion. 

Fuel Cell Electric Vehicle Deployments 

By the end of the second quarter, Hyzon had deployed seven vehicles under commercial agreements to customers in 2023; three additional vehicles were deployed subsequent to the quarter end. Of those vehicles, three were deployed to customers in Europe, while seven coach buses were deployed to a customer in Australia and are currently in the process of completing final site acceptance steps. 

With a total of ten vehicles deployed to date, Hyzon met the lower end of its previously announced 2023 guidance of 10-20 vehicles deployed under commercial agreements. Hyzon also has collected $2.9 million in cash receipts year-to-date against those vehicles. 

U.S. 110kW Truck Program Moves from Prototype to Production 

At the beginning of August, the Company completed its first U.S. 110kW truck built with production tooled components, which has progressed to a third-party test track in Michigan for durability testing. With this vehicle, built in collaboration with Fontaine Modification, the Company's third-party assembly partner, Hyzon's U.S. 110kW program moves from prototype to production. By commercializing the 110kW vehicle, Hyzon builds experience through product realization and customer engagement to support the future deployment of 200kW FCEVs. 

North America Trial Program Expansion and Commercial Relationship Activation 

The Company's North American trial program continued to expand, with 15 trials completed since March  2022, of which seven trials were completed in 2023. The Company has accumulated over 40,000 miles on its conventional truck platform in customer trial and track testing, gaining experience with and learnings from real world operations for future FCEV deployments. 

Five 110kW FCEV Agreement Reached with Performance Food Group with 15 additional 200kW FCEVs upon successful completion of 200kW Trial 

In June, Hyzon signed its first commercial agreement in the U.S. with PFG for five FCEVs in a pilot phase, with the potential for up to 50 FCEVs total. The first five FCEVs will be upfit with Hyzon Class 8 110kW fuel cell systems, and an additional 15 FCEVs will be upfit with Hyzon’s next-generation single-stack 200kW fuel cell system conditional on a successful 200kW vehicle trial. Following these vehicles, PFG and Hyzon also have agreed to work together regarding a mutually agreeable option for 30 additional FCEVs. The first five vehicles remain on track to be delivered in 2023. 

Six Single-Stack 200kW Fuel Cell System B-samples completed in the second quarter of 2023, from three completions in the first quarter of 2023 

In the second quarter, the Company announced completion and factory acceptance testing of six single-stack 200kW FCS B-samples at its production and innovation center in Bolingbrook, IL. This followed successful completion and factory acceptance testing of the initial three single-stack 200kW FCS during the first quarter of 2023.  The Company achieved this efficiency improvement in part by successfully commissioning Hyzon's proprietary, automated roll-to-roll Membrane Electrode Assembly ("MEA") production line, the semi-automated single cell manufacturing line, and the fully automated fuel cell stack manufacturing line. The Company remains on track to complete the additional 16 B-samples in the second half of 2023 for a total of 25 200kW B-samples in 2023, along with C-sample declaration by the end of 2023.  

New Board Member Appointment 

In July, the Company appointed Matthew Foulston, an accomplished finance executive who served as CFO for three publicly listed companies: Covetus, Treehouse Foods, and Compass Minerals. Foulston serves as the Chair of the Audit Committee and as a member of the Compensation Committee. 

Second Quarter 2023 Financial Results   

For the quarter ended June 30, 2023, the Company reported cost of revenue of $2.4 million, research and development ("R&D") expense of $12.6 million, and selling, general, and administrative ("SG&A") expenses of $49.1 million. The current quarter SG&A expense included elevated legal and regulatory charges of $25.9 million, of which $22.0 million represents a loss contingency accrued in light of management’s assessment of the SEC investigation. The Company expects $7.0 million of this accrual to be paid within the next twelve months. There is no assurance that this loss contingency accrual will be adequate to resolve matters covered by the SEC investigation. Net loss attributable to Hyzon was $(60.2) million, as compared to net income attributable to Hyzon of $42.0 million for the quarter ended June 30, 2022. The change was largely driven by greater non-cash gains of $8.4 million and $66.1 million for the changes in estimated fair value of private placement warrant liability and earnout liability, respectively, reported for the quarter ended June 30, 2022. Basic and diluted loss per share was $(0.25) for the quarter ended June 30, 2023. For the second quarter ended June 30, 2022, the Company reported basic income per share of $0.17 and diluted income per share of $0.16. 

For the six months that ended June 30, 2023, the Company reported cost of revenue of $3.2 million, R&D expense of $21.9 million, and SG&A expense of $80.0 million. The year-to-date SG&A expense included elevated legal and regulatory charges of $33.6 million, of which $22.0 million represents loss contingency accrued in light of management’s assessment of the SEC investigation. The Company expects $7.0 million of this accrual to be paid within the next twelve months. There is no assurance that this loss contingency accrual will be adequate to resolve matters covered by the SEC investigation. Net loss attributable to Hyzon was $(90.5) million, as compared to net income attributable to Hyzon of $35.5 million for the six months ended June 30, 2022. The change was largely driven by greater non-cash gains of $9.9 million and $69.3 million for the changes in estimated fair value of private placement warrant liability and earnout liability, respectively, as well as a non-cash net gain of $10.1 million due to a fair value change in equity securities reported for the six months ended in June 30, 2022. Basic and diluted loss per share was $(0.37) for the six months ended June 30, 2023. For the six months ended June 30, 2022, the Company reported basic and diluted income per share of $0.14. 

As of June 30, 2023, unrestricted cash, cash equivalents and short-term investments were $172.4 million, approximately $36.6 million lower than the March 31, 2023 balance of $209.0 million. The current quarter net cash outflow is the lowest since the fourth quarter of 2021. As of July 31, 2023, unrestricted cash, cash equivalents and short-term investments were approximately $158 million. Approximately $5 million of the $14 million July spend was for our annual D&O insurance coverage. 

Non-GAAP Financial Measures 

The Company reported adjusted EBITDA of $(33.0) million and $(60.3) million for the three and six months ended June 30, 2023, respectively. The Company reported adjusted EBITDA of $(28.0) million and $(48.8) million for the three and six months ended June 30, 2022. The changes in adjusted EBITDA were primarily due to higher personnel related costs driven by increased global headcount and continued investment in advancing our hydrogen-powered fuel cell technology. These non-GAAP financial measures have been reconciled to the nearest GAAP measure in the tables under “Non-GAAP Financial Measures” within this press release. 

Conference Call Information  

The Hyzon management team will host a conference call to discuss its second quarter 2023 financial results on Tuesday, August 8, 2023, at 8:30 a.m. Eastern Time. The conference call can be accessed by dialing 1 (833) 470-1428 and entering the access code 848699. International participants can access the call via the corresponding number listed here and enter the access code 848699.  

To listen to the live audio webcast and Q&A, visit the Hyzon investor relations website at investors.hyzonmotors.com. A replay and transcript of the webcast will be available on the website within 24 hours after the call. Hyzon's earnings press release and related materials will also be available on the Company's investor relations website.