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**Revenue Surge and Margin Turnaround**: Q3 revenue jumped 120% to $32.5 million, with gross margin improving to 15% (vs. -56% last year). 
- **Bus Market Dominance**: Fuel cell buses now 70% of revenue; 60% of new bus sales are zero-emission. 
- **Strategic Shifts**: Exited Texas Gigafactory and China JV to focus on North America/Europe. 
- **New Product Breakthrough**: FC Move SC offers 2x durability, winning OEM interest. 
- **Financial Discipline**: Operating expenses down 36% YoY; 2026 capex reduced to $12 million. 
- **Marine Milestone**: Largest order ($6.4 million) highlights DNV-certified tech’s versatility across markets.

**【CEO Summary Section】**
- **Revenue Growth and Margin Improvement**: Q3 2025 revenue reached $32.5 million, up 120% year-over-year, driven by bus and rail deliveries. Gross margin improved to 15% (vs. -56% in Q3 2024), reflecting cost reductions and contract term improvements.
- **Bus Market Momentum**: Fuel cell buses now account for over 70% of revenue. Marty Neese highlighted strong reception at Bus World 2025, with 60% of new bus sales now zero-emission. Ballard’s FC Move SC product offers 2x stack durability and lower total cost of ownership, attracting OEMs.
- **Strategic Realignment**: Exited the Texas Gigafactory project to focus on existing global capacity. Reduced involvement in China’s Weichai Ballard JV to prioritize North America and Europe. 2026 outlook includes further gross margin expansion and cash flow positivity efforts.
- **New Market Expansion**: Re-entering material handling with air-cooled stacks offering 2x durability, targeting customers with long-term service needs. Stationary power solutions for data centers and backup power are evolving to 2-3 MW modules.

**【CFO Financial Commentary】**
- **Financial Health**: Ended Q3 with $525.7 million in cash, no debt. Operating expenses fell 36% YoY to $34.9 million (excluding restructuring). Adjusted EBITDA improved to -$31.2 million (vs. -$60.1 million in Q3 2024).
- **Guidance**: 2025 revenue back-half weighted; 2026 operating expenses expected below $100 million-$120 million range. Capital expenditures reduced to $8 million-$12 million, reflecting disciplined spending.
- **Gross Margin Context**: Q3 gross margin boost included one-time benefits (e.g., off-road sales). Excluding these, margin would be slightly negative but improving sequentially.

**【Q&A Highlights】**
- **Bus Market Dynamics**: Europe showing steady adoption; North America flat YoY. Infrastructure constraints are driving interest in fuel cells over batteries.
- **Gross Margin Outlook**: Kate Igbalode expects low to mid-single-digit gross margins in 2026, with incremental progress from Q3’s 15% baseline.
- **Texas Facility Decision**: Project Forge automation initiatives continue in Canada, independent of Texas plans.
- **Material Handling Strategy**: Air-cooled stacks with 2x durability targeting new customers; no immediate plans for liquid-cooled solutions.
- **Marine Segment**: Largest marine order ($6.4 million with Samskip) leverages DNV-certified FC Wave product, opening opportunities for cross-market adoption (e.g., stationary power).

Ballard Power Systems Inc (BLDP) Q3 2025 Earnings Call Transcript

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