Hyliion Holdings Corp.

Hello everyone, thank you for joining us and welcome to the Hylion Holdings 4th Quarter 2025 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Greg Stanley, Chief Accounting Officer. Please go ahead.

Welcome to Hyliion Holdings' fourth quarter 2025 earnings conference call. On today's call are Thomas Healy, our chief executive officer, and John Panzer, our chief financial officer. A slide presentation accompanying today's call is available on Hyliion's investor relations website at investors.hylion.com. Please note that during today's call, we will be making certain forward-looking statements regarding the company's business outlook. Forward-looking statements are predictions, projections, and other statements about anticipated events that are based on current expectations and assumptions. As such, are subject to risk and uncertainties. Many factors could cause actual results to differ materially from forward-looking statements made on this call. For more information on both factors that may cause a company's results to differ materially from such forward-looking statements, please refer to our presentation and press release, as well as our filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on forward-looking statements, and we undertake no duty to update this information unless required by applicable law. With that, I will now turn the call over to Thomas.

Hello, and thank you for joining us for Hyliion's fourth quarter and full year 2025 earnings call. Heading into 2026, we are positioned strongly to deploy more early adopter units and move towards commercialization. As we shared on our last call, the Carno Power Module is now performing at a level that meets our initial customer needs. On today's call, we'll provide more details on our early customer deployment plans and cover the current status of UL certification and product performance, demand we're seeing across commercial and military markets, and how we are preparing to scale production to support growth. Turning first to UL certification. We made significant progress during the quarter and are now nearing completion of this important milestone. To provide additional context, UL certification for the Carnot power module occurs at three levels. The linear electric motor, the battery pack, and the full powered module. I'm pleased to share that we have successfully completed UL testing for both the linear electric motor and the battery pack, meaning we have completed two of the three certifications we need. We have completed our initial round of testing on the full power module. Through that process, we identified several small refinements, including gasket updates to further strengthen water ingress protection and the opportunity to incorporate recent power output improvements. With those enhancements now underway, we plan to begin our next round of UL testing shortly and expect to complete certification in the second quarter. Overall, we are very encouraged by the progress and view UL certification for the early adopter units as a near-term gating item towards delivering units to customer sites. Beyond certification progress, we now have five Carno units at our facility. two development units, and three early adopter customer units. These systems are being continuously exercised through a range of load profiles, extended duration testing, customer-specific operating scenarios, and military representative applications. As we shared last quarter, we achieved over 150 kilowatts of power generation, which is sufficient for initial customer deployments. We have since demonstrated 175 kilowatts of power production and testing following recent upgrades, and we expect to reach the full 200 kilowatt design power rating by year end as we transition into commercialization. These improvements include refinements to the piston design and updates to the cylinder liner material to enhance heat retention within the system. Importantly, we do not believe reaching the full power rating will require any fundamental architecture changes, but rather a series of incremental optimizations across the platform. The steady progress we have made the past couple of quarters reinforces our confidence in achieving the final 200 kilowatt design specifications this year. Fuel flexibility continues to be a key differentiator of the Carnot system, and we have made meaningful progress in this area during the quarter. We successfully demonstrated dynamic fuel switching with the Carnot power module transitioning between natural gas and propane. The system can automatically switch between fuels without shutting down and without any user input to indicate which type of fuel is being utilized. We simply change the incoming fuel supply and the unit continues to operate as designed, truly highlighting our unique fuel agnostic capability. Another recent accomplishment was successfully running a Carno core on diesel fuel and being able to export power to the grid while meeting tier four final emissions requirements without the use of exhaust after treatment systems. We expect to begin incorporating diesel capability into customer deployed systems this year. Diesel capability is particularly important for defense applications where it remains the dominant fuel source. More broadly, The majority of installed generators worldwide operate on diesel, which significantly expands the Carnot Power Module's addressable market in mission critical and prime power applications. For example, many data centers prefer pipeline natural gas for prime power, but still require on-site diesel for resiliency. We believe our ability to operate on both fuels will allow customers to avoid purchasing separate natural gas and diesel generators, instead relying on a single flexible platform for both primary and backup operations. Next, I'd like to share our outlook for 2026, including our deployment plans, product development priorities, business development activity, and manufacturing capacity. We are entering 2026 with strong demand across commercial, data center, and military markets. As previously shared, We have nearly 500 units under non-binding letters of intent, in addition to a broader set of customers actively evaluating the platform. The primary focus now is transitioning from development into real world field deployments and moving towards commercialization and scaling. From a deployment perspective, our overall plan remains consistent with what we have previously communicated. We expect to deploy approximately 10 early adopter units prior to commercialization, including the two units delivered to the Navy last year and a third unit that we have recently completed and that will go to a customer site following UL certification and product validation. Throughout 2026, we plan to deploy these systems into customer environments with commercialization to follow late in the year. One area where we are seeing particularly strong long-term interest is the data center market. With recent industry announcements pointing towards a shift to 800 volt DC architectures for next generation AI facilities, we believe our Carno technology is uniquely well positioned. Our platform already operates at 800 volts DC, which aligns directly with this emerging standard and has the potential to reduce conversion stages, lower equipment requirements, improve overall system reliability and efficiency, and simplify site electrical architecture. In 2026, we plan to demonstrate this capability in live environments to showcase the potential. Early this year, we successfully demonstrated a mission representative Navy load profile on a Navy-owned Carno asset. The system managed rapid load changes and sustained performance under high stress operating conditions, reinforcing its suitability for shipboard and defense use. This is an important validation milestone and has accelerated discussions around additional defense platforms and with NASA, who is exploring coupling our Carnot technology with nuclear power generation. We have identified several near-term opportunities across multiple branches of the military that are moving toward potential contract awards, which we expect to finalize this year. We believe these opportunities could represent $40 to $50 million of new revenue opportunities on top of the approximately $20 million of contracts with ONR that we are currently executing on today. As part of our current Navy program, We plan to deliver additional Carnot power modules and cores in 2026 for specialized shipboard testing. Once completed, these deliveries will represent about half of our early adopter units. One deliverable will be a multi Carnot power module for the ship, demonstrating our ability to create higher power systems through coupling our 200 kilowatt cores. Building on our work with the Navy, I'd like to provide an update on our plans for the previously discussed two megawatt Carnot power module, which we believe aligns well with the needs of data centers and other high power applications. In 2025, we spent significant time developing a multi Carnot power module configuration for shipboard use. Through that effort, we identified substantial overlap between the Navy architecture and what is required for higher power commercial deployments. As a result, we have leveraged that design foundation to advance a modular scalable configuration suitable for data center applications. Our initial concept was a two megawatt system comprised of 10, 200 kilowatt Carno cores integrated into a compact footprint, roughly the size of a 20 foot shipping container. Recent customer discussions have led us to evolve the configuration into a more flexible architecture. The system is designed to scale in approximately 800 kilowatt increments, allowing configurations such as 800 kilowatts, 1.6 megawatts, 2.4 megawatts, 3.2 megawatts, and so on. This modular approach aligns closely with feedback from data center customers where power requirements vary depending on site electrical architecture. By enabling expansion through the addition of core sets, we can tailor output to specific customer needs while maintaining high power density and resiliency. Moving on to our commercial customer developments, we recently entered into a strategic partnership with ABM Industries to support the deployment of integrated distributed energy solutions. This collaboration combines Carnot technology with ABM's site engineering, integration, and operational capabilities helping simplify deployment and broaden customer access across commercial, industrial, data center, and mission-critical applications. ABM is also equipped to offer energy-as-a-service contracts with their customers. This partnership allows us to remain focused on advancing and commercializing the Carno platform while leveraging an experienced partner to support end-to-end customer solutions. Next, I'll provide a brief update on our manufacturing readiness. Today, we operate more than 30 additive manufacturing machines, the majority of which are located at our Austin facility. These printers band three different machine models with configurations that are able to produce one, two, or four parts at once. We expect to take delivery of several additional printers this year that we've had on order from last year. With these additions, we believe our additive manufacturing capacity will be well positioned to meet planned production needs for 2026 and 2027, while providing a strong foundation for scaling further into 2028. Our current focus is on maximizing the speed, power, and productivity of each machine. During the first quarter of 2026, we initiated efforts to improve printer throughput, and we'll be dedicating both printer time and engineering resources to these optimization initiatives throughout the year. In parallel, we plan to take delivery of and begin testing one or more printers equipped with the latest laser technology from GE Calibrium, which we believe has the potential to further improve print speed and efficiency. On our last earnings call, we discussed the potential risk related to magnet supply, particularly given export constraints from China. We are pleased to share that we have made meaningful progress in mitigating that risk and have already begun receiving components. While this does not fully eliminate supply chain risk, it substantially reduces our exposure and improves our confidence in supporting planned production. To wrap up, I'd like to share our key milestones for 2026, which are summarized on this slide and highlight the achievements we expect to deliver over the course of the year. We began the year with an early win by successfully operating the Carno core on liquid fuel and meeting emissions requirements. Looking ahead, we expect to achieve UL certification for the early adopter Carno power modules during the second quarter of this year, which will enable broader customer site deployments. In parallel, we expect to achieve the full 200 kilowatt design power by the end of 2026. We also plan to complete the remaining early adopter units during the year. These deployments are an important step towards validating system performance across real-world applications and will support our plan to commercialize the 200 kilowatt Carnot power module in late 2026, which will then allow us to begin scaling production. In addition, we expect to complete a multi-Carno core platform featuring the systems and controls required to coordinate multiple units operating in tandem. This configuration will serve as a stepping stone towards a larger multi-megawatt Carno system designed to support data centers and other customers with high power requirements. We expect to secure additional US military contracts with a total revenue opportunity of $40 to $50 million. further advancing the development work underway to support autonomous Navy vessels and other mission-critical defense applications. Taken together, these milestones support our expectation of generating approximately $10 million of revenue during 2026 from a combination of commercial customer activity and R&D service contracts. Looking ahead over the next three years, we plan to build on the progress achieved in as the Carnot Power Module transitions from early deployments into scaled commercialization. In 2027, we expect to ramp commercial deliveries and expand the range of applications where Carnot is deployed. This includes advancing the development of a multi-megawatt Carnot Power Module for data center applications. We view 2027 as the year where we transition from initial commercialization into meaningful production scale. In parallel, we plan to expand our additive manufacturing capacity in preparation for anticipated growth in 2028. By 2028 and beyond, we expect to accelerate commercial growth as increased production capacity enables us to address a broader portion of customer demand. This includes fulfilling interest in multi-megawatt systems for data centers, as well as continued expansion within military applications. To wrap up, 2025 was a year focused on resolving product and production challenges, strengthening the core architecture of the Carno power module, expanding its operating capabilities across fuel and mission profiles, and improving performance. In 2026, our focus shifts from development to deployment and commercialization. With UL certification nearing completion, early adopter units moving into the field, growing military engagement, and strong data center interest, we believe we are well positioned to transition from validation to scaled execution over the coming years. With that, I'll turn the call over to John to walk through the financial update.