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SEC filingBallard Power Systems reported a 32% revenue decline to $69.7M and a net loss of $324.2M, driven by $152.0M in impairment charges amid a delayed hydrogen market adoption.
Ballard Power Systems Inc. reported a significant decline in its financial performance for the fiscal year ended December 31, 2024, compared to the prior year. Total revenue was $69.7 million, a decrease of 32% from $102.4 million in 2023. This decline was broad-based, with decreases across all major market verticals: Heavy-Duty Mobility revenue fell 20% to $53.4 million, Stationary revenue decreased 41% to $12.8 million, and Emerging and Other market revenue dropped 74% to $3.6 million. The company attributed the revenue decline to lower product and service sales across bus, truck, rail, marine, and stationary applications, as well as a slowdown in hydrogen fuel cell market adoption.
Gross margin was negative $22.0 million, or -32% of revenue, compared to a negative $21.8 million, or -21% of revenue, in 2023. The deterioration in gross margin was driven by lower revenue scaling, an unfavorable shift in product and service revenue mix, higher fixed overhead costs, and increased product component supply costs. These negative impacts were partially offset by positive net warranty adjustments of $4.0 million.
Total operating expenses, excluding other operating expenses, decreased by 4% to $131.5 million, reflecting initial cost savings from a global restructuring initiated in September 2024. However, other operating expenses surged to $29.8 million from $3.8 million, primarily due to a $12.8 million net impairment loss on trade receivables and $17.0 million in restructuring and related costs. Consequently, the loss from operating activities widened to $183.3 million from $162.9 million.
The net loss from continuing operations was $323.5 million, or $1.08 per share, compared to a loss of $144.2 million, or $0.48 per share, in 2023. The primary driver of the increased loss was $152.0 million in non-cash impairment charges, including $111.0 million on property, plant and equipment and $40.3 million on goodwill. These impairments were triggered by a decline in the company's market capitalization and a strategic reassessment of its assets amid a delayed market recovery. Including a $0.7 million loss from discontinued operations, the total net loss for the year was $324.2 million.
As of December 31, 2024, total assets were $777.3 million, a significant decrease from $1,077.5 million at the end of 2023. This decline was largely due to the impairment of property, plant and equipment and goodwill, which reduced non-current assets. Cash and cash equivalents decreased by $147.2 million to $603.9 million, primarily reflecting cash used in operating activities and capital expenditures. Total equity fell to $673.0 million from $991.2 million, driven by the net loss for the year.
Cash used in operating activities was $108.1 million for 2024, compared to $104.6 million in 2023. The cash operating loss, before changes in working capital, was $113.3 million, an increase from $87.5 million in the prior year. This was partially offset by a $5.2 million inflow from working capital, driven by a decrease in trade receivables and an increase in deferred revenue, partially offset by an increase in inventories. Investing activities used $36.5 million, primarily for $27.6 million in capital expenditures and $12.0 million in contributions to long-term financial investments. Financing activities used $1.5 million, mainly for lease payments, partially offset by proceeds from option exercises and a pension settlement. The company's liquidity position remains strong with $606.1 million in cash, cash equivalents, and short-term investments, and no bank debt.
Management's discussion highlights a material change in the outlook for the hydrogen and fuel cell industry, characterized by delayed policy implementation, slow market adoption, and a negative shift in investor sentiment. In response, Ballard initiated a global corporate restructuring in September 2024 to reduce its cost structure and align investment pacing with market realities. The restructuring is expected to lower total annualized operating costs by more than 30%, with a substantial part of the savings to be realized in 2025.
For 2025, the company expects total operating expenses to be between $100 million and $120 million and capital expenditures to be between $15 million and $25 million. Revenue is expected to be back-half weighted. The company has deferred its final investment decision for a planned Texas Gigafactory to 2026, pending clearer market adoption signals. Management also decided not to make additional significant investments in China for the foreseeable future, following a strategic review of its joint venture.
The company operates in a single reportable segment, Fuel Cell Products and Services. Geographically, revenue declined in all major regions, with North America down 52%, China down 78%, and Europe down 4%. The company recognized significant non-cash impairment charges: $111.0 million on property, plant and equipment to write down assets to their estimated residual fair value, and $40.3 million on goodwill, reducing its balance to zero. A restructuring provision of $14.7 million was recorded, primarily for workforce reductions and product rationalization. The company also recorded a $12.8 million impairment loss on trade receivables, mainly from customers in China. Long-term financial investments, including stakes in Forsee Power and various hydrogen funds, decreased in fair value by $14.8 million.