ITM Power: Pioneering the Green Hydrogen Revolution with Breakthrough Efficiency and Strategic Expansion

The green hydrogen sector is on fire—and ITM Power is one of the companies lighting the fuse. With a 50% year-on-year revenue surge to £26 million in FY25 and a £145 million order backlog, this UK-based leader in proton exchange membrane (PEM) electrolyser technology is positioning itself as a cornerstone of the global energy transition. But is ITM Power a compelling long-term play, or is it overhyped in a crowded market? Let's break down the numbers, the strategy, and the risks.

Operational Gains: Efficiency and Capacity at the Core

ITM Power's recent operational improvements are nothing short of transformative. The company's latest 2 MW MEP 2.0 and 5 MW Gigastack modules boast a 10% efficiency leap over prior models, a critical edge in an industry where incremental gains can mean the difference between profitability and obsolescence. This isn't just incremental progress—it's a leap forward in scalability.

Production capacity is another story of reinvention. While ITM initially aimed for 5 GW by 2024, it's now adopting a more disciplined approach, ramping up to 700 MW at its Bessemer Park facility within six months and scaling to 1.5 GW in two years. The £250 million equity raise in Q4 2021 has been a game-changer, funding automation and process improvements that reduce costs and accelerate delivery. Investors should note that ITM's ability to scale without overleveraging is a major plus in a sector prone to capital-intensive pitfalls.

Strategic Contracts: Building a High-Margin Future

The Hydropulse “Build, Own, Operate” model is ITM's secret sauce. By assuming capital and operational risk, the company locks in long-term revenue streams while customers enjoy cost-effective green hydrogen. This shift has flipped the script: 60% of ITM's backlog is now profitable, a stark contrast to its legacy contracts that dragged on margins.

Recent wins underscore this strategy. The 20 MW West Wales Hydrogen project with MorGen Energy and the 120 MW Humber H2ub® FEED contract with Uniper are not just volume plays—they're blueprints for industrial decarbonization. Meanwhile, the partnership with Eternal Power in Germany targets decentralized hydrogen production, a growing niche where ITM's Hydropulse model shines. These contracts aren't just about today's revenue; they're about securing a dominant position in a market projected to grow at 25% annually through 2030.

Competitive Edge: PEM Leadership in a Crowded Field

ITM isn't the only name in the PEM electrolyser space. Nel ASA, Siemens Energy, and Plug Power are all vying for market share. But ITM's vertical integration—owning core manufacturing processes and R&D—gives it a unique edge. Its Bessemer Park gigafactory is the largest of its kind, and its Chronos stack platform is poised to further reduce costs and enhance efficiency.

The global electrolyser market, valued at $216 million in 2025, is expected to balloon to $700 million by 2033. ITM's focus on PEM technology, which dominates 60% of the market, positions it to capture a significant slice of this growth. While competitors like Nel and Siemens Energy are formidable, ITM's strategic partnerships (Shell, Linde, Sumitomo) and geographic diversification in Europe and Asia-Pacific give it a leg up.

Financials and Risks: A Work in Progress

Let's not sugarcoat it: ITM is still unprofitable. FY25 saw a £45.4 million pretax loss, driven by legacy contracts and under-absorbed factory costs. But the path to profitability is clearer now. The company expects a narrower loss of £27–29 million in FY26 as it phases out low-margin projects and ramps up production. With £207 million in cash, ITM has the firepower to invest in R&D and automation without diluting shareholders.

The risks? Execution. Can ITM scale production as quickly as it promises? Can it maintain its technological lead against rivals? And can it navigate the volatility of the hydrogen market, where policy shifts and supply chain bottlenecks are par for the course? These are valid concerns, but the company's strong balance sheet and strategic focus on high-margin projects mitigate many of them.

The Verdict: A High-Conviction Buy for the Green Hydrogen Era

ITM Power isn't a short-term play—it's a long-term bet on the energy transition. The company's operational improvements, strategic contracts, and Hydropulse model position it as a leader in a sector that's only going to grow. While the path to profitability is bumpy, the fundamentals are solid.

For investors with a 5–10 year horizon, ITM Power is a compelling addition to a green energy portfolio. The key metrics to watch? EBITDA trends, margin improvement, and the pace of backlog conversion. If ITM can execute on its FY26 guidance and maintain its technological edge, this could be a multi-bagger.

In a world racing to net-zero, ITM Power isn't just keeping up—it's setting the pace. For those willing to ride the hydrogen wave, the time to act is now.