Hexagon Purus ASA: Navigating Stormy Waters in the Hydrogen Transition

Hexagon Purus ASA (HEXA) reported a stark Q2 2025 financial performance, with revenue plummeting 63% year-over-year to NOK193 million. The drop underscores the volatility of the hydrogen infrastructure market, where project delays, economic uncertainty, and supply chain bottlenecks have stalled growth. Yet beneath the headlines of operational losses lies a company executing a disciplined strategy to position itself for the long game in the green energy transition. Is this a buyable dip, or a warning sign for investors?

The Q2 2025 Results: A Snapshot of Challenges

The hydrogen distribution segment—once a growth engine—saw revenue collapse by 95% year-over-year, as key customers delayed projects. Even in the hydrogen mobility segment, which includes transit buses and aerospace, revenue fell 20%, though order intake surged 33% across these applications. This dichotomy reflects a market in flux: demand is there, but execution is hindered by macroeconomic headwinds and regulatory lags.

The company's negative EBITDA of NOK161 million (vs. NOK97 million in Q2 2024) and rapid cash burn—NOK74.67 million over the past 12 months—highlight the urgency of its restructuring plans. A total cost reduction program, expanded to NOK350 million, includes a 30% workforce reduction in Germany and a strategic review of its Battery Mobility & Vehicle Integration (BVI) segment. These moves aim to achieve breakeven EBITDA by 2026, but investors remain skeptical: shares fell 15.5% pre-market on the earnings release.

Strategic Resilience: Betting on the Hydrogen Future

Hexagon Purus' technology is its crown jewel. Its Type 4 high-pressure cylinders—lightweight, durable, and cost-efficient—are critical for hydrogen storage in transit buses, trucks, and industrial applications. As the market for green hydrogen infrastructure matures, these systems are poised to gain traction.

The hydrogen storage market itself is growing, albeit unevenly. shows volatility, but the sector's long-term potential is undeniable. By 2030, the market could reach USD21.66 billion (Grand View Research), driven by government subsidies, renewable energy integration, and corporate ESG goals. Hexagon's 62% backlog allocation for hydrogen infrastructure projects in 2025 signals strong demand from industrial partners like Air Liquide and Linde, which rely on its cylinders for distribution networks.

Growth Catalysts on the Horizon

While Q2's struggles are real, Hexagon Purus is leveraging three levers to drive future growth:

1. Order Backlog Strength: A NOK792 million order backlog (as of Q1 2025) includes contracts for European hydrogen transit buses, U.S. aerospace projects, and industrial gas storage systems. The 33% order intake growth in select segments suggests market share gains.
2. Geopolitical Diversification: New partnerships, such as the joint venture with China's CIMC for cylinder production, and expanded manufacturing in Germany and Texas, reduce reliance on any single region.
3. Cost Discipline: The NOK350 million cost-cutting program targets non-core operations and excess capacity, with a focus on maintaining liquidity until breakeven.

Risks and Regulatory Uncertainties

The path is not without potholes. The EU's delayed green hydrogen regulations and U.S. trade policy shifts post-election have slowed project timelines, particularly in heavy-duty vehicle markets. The BVI segment's losses (NOK-33 million in Q4 2024) also highlight execution risks in diversifying beyond hydrogen storage.

Investment Thesis: A High-Reward, High-Risk Play

Hexagon Purus is a classic “value in transition” story. Its technology is best-in-class, and its backlog suggests demand is robust when projects clear regulatory hurdles. However, near-term cash burn and geopolitical risks demand a cautious approach:

• Bull Case: By 2026, the company achieves breakeven EBITDA, and hydrogen infrastructure spending accelerates as governments meet net-zero targets. The stock could rebound to pre-2024 levels (NOK100+).
• Bear Case: Delays persist, and competitors (e.g., Linde or Air Liquide developing in-house storage) erode Hexagon's margins. The stock could languish in the NOK30–50 range.

Conclusion: A Bumpy Road to Green Energy Dominance

Hexagon Purus is navigating a sector in flux, where short-term pain could pave the way for long-term gain. For investors with a 3–5 year horizon and a tolerance for volatility, the company's strategic moves—coupled with its technological moat—make it a compelling pick. Yet those seeking stability should tread carefully: the hydrogen transition's pace remains the ultimate wildcard.

Investment Rating: Hold with a cautiously bullish outlook.
Key Watchlist: Q3 order intake, EU hydrogen policy updates, and cash runway progress.