Hexagon Purus ASA's Q1 2025: Navigating a Rocky Start in the Hydrogen Economy

Hexagon Purus ASA, a leader in hydrogen storage and zero-emission mobility solutions, reported a challenging start to 2025, with its first-quarter financial results revealing significant headwinds. Despite a 44% year-over-year revenue decline to NOK 230 million, the company highlighted strategic wins and a robust order backlog, suggesting resilience in its long-term growth narrative.

The Numbers Tell a Story of Struggle and Potential

The quarter’s results were marked by stark contrasts. While revenue collapsed from NOK 409 million in Q1 2024 to NOK 230 million, the company’s order backlog grew to NOK 792 million, signaling sustained demand. EBITDA turned deeply negative at NOK -242 million, reflecting restructuring costs of NOK 65 million and non-recurring expenses. Even after adjusting for these one-time items, the adjusted EBITDA margin hit -77%, underscoring margin pressures.

Segment Performance: A Mixed Bag

• Hydrogen Mobility and Infrastructure (HMI): Revenue fell 47% to NOK 204 million, driven by a steep drop in hydrogen infrastructure sales (-81%). The segment’s EBITDA margin worsened to -70%, with restructuring costs (NOK 38 million) and bad debt provisions (NOK 16 million) exacerbating losses.
• Battery Systems and Vehicle Integration (BVI): Revenue grew 35% to NOK 25 million, fueled by deliveries to Hino and Toyota. However, EBITDA remained negative (NOK -54 million) due to inventory write-downs and restructuring.

Strategic Wins Amid the Storm

Despite the financial turbulence, Hexagon Purus secured critical partnerships:
1. MCV Order: A first-of-its-kind contract with Egypt’s MCV for hydrogen fuel storage systems targeting European public transit buses.
2. Stadler Agreement: A multi-year deal with Stadler for hydrogen rail applications in California.
3. CIMC-Hexagon Progress: The Chinese joint venture began commercial production of hydrogen cylinders in Shijiazhuang, targeting European markets.

These milestones underscore the company’s ability to secure high-value contracts, even as macroeconomic headwinds persist.

The Elephant in the Room: Geopolitical Risks and Cost Management

CEO Morten Holum framed the quarter as a “challenging start,” citing weakened demand outlooks and geopolitical uncertainty, particularly around U.S. policy shifts impacting global trade. The company is now prioritizing cost discipline, aiming to achieve EBITDA and cash flow breakeven through portfolio reviews and operational efficiency.

Valuation and Investor Considerations

Hexagon Purus’ shares trade at a 14.2x forward P/E ratio, reflecting cautious optimism about its long-term prospects. This valuation is modest compared to peers in the hydrogen sector, suggesting investors are pricing in near-term execution risks while acknowledging the company’s leadership in critical technologies.

Conclusion: A Company at a Crossroads

Hexagon Purus faces a critical juncture. Its Q1 results highlight vulnerabilities to geopolitical shifts and macroeconomic uncertainty but also demonstrate strategic resilience through new contracts and backlog growth. The company’s path forward hinges on three key factors:
1. Cost Management: Can it execute its restructuring plan to stabilize margins without stifling innovation?
2. Geopolitical Navigability: How will U.S. policies and global trade dynamics impact demand for hydrogen infrastructure?
3. Execution in Key Markets: Will European hydrogen transit bus demand offset declines in heavy-duty sectors?

With NOK 794 million in cash and a backlog signaling future revenue, Hexagon Purus has the runway to weather current storms. However, investors should remain wary of its negative cash flow (NOK -183 million) and equity decline (19.6% year-over-year).

The company’s role in the $1.2 trillion hydrogen economy—projected to grow exponentially by 2030—positions it as a long-term winner, provided it can navigate near-term turbulence. For now, the jury remains out, but the data suggests a cautious “hold” with an eye on Q2 updates and geopolitical developments.

In the race to decarbonize transportation, Hexagon Purus’ advanced technologies are essential. Its ability to turn today’s losses into tomorrow’s gains will determine whether it becomes a pioneer or a casualty of the energy transition.