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Driving Cleaner Performance Q1 2025 Results May 14, 2025 NASDAQ: WPRT, TSX: WPRT
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Westport Fuel Systems 2 Disclaimer and Forward-Looking Statements This presentation contains forward-looking statements, including statements regarding, future revenue expectations, future growth in markets, future of our development programs (including those relating to HPDI and Hydrogen), the global demand for our products, the future success of our business and technology strategies, the future role of HPDI in internal combustion engines, intentions of partners and potential customers, the performance and competitiveness of Westport Fuel Systems’ products, shareholder approval of the divestiture of the Light-Duty business and our ability to successfully carry out the transaction and realize the benefits therefrom, including, potential earn-out payments; future market opportunities, the ability to carry-out our commitment to maintaining a stronger balance sheet, our ability to align our cost structure with that of a more efficient organization as well as Westport Fuel Systems management’s response to any of the aforementioned factors. These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance or achievements expressed in or implied by these forward-looking statements. These risks, uncertainties and assumptions include those related to our revenue growth, operating results, industry and products, changes in business strategies, shifts in market demand, the general economy including impacts due to inflation, the effects of competition and pricing pressures, conditions of and access to the capital and debt markets, access to required semiconductors, solvency, governmental policies, trade restrictions or other changes to international trade agreements, sanctions and regulation including the imposition of tariffs, technology innovations, fluctuations in foreign exchange rates, operating expenses, continued reduction in expenses, ability to successfully commercialize new products, the performance of our joint ventures, the availability and price of natural gas, government incentive programs and new environmental regulations, the acceptance of and shift to natural gas vehicles, the relaxation or waiver of fuel emission standards, the inability of fleets to access capital or government funding to purchase natural gas vehicles, the development of competing technologies, our ability to adequately develop and deploy our technology, the actions and determinations of our joint venture and development partners, as well as other risk factors and assumptions that may affect our actual results, performance or achievements or financial position discussed in our most recent Annual Information Form and other filings with securities regulators. For a detailed discussion of these and other risk factors that could affect the Corporation's future performance, please refer to the Corporation's most recent Annual Information Form filed on SEDAR+ at www.sedarplus.ca. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward-looking statements except as required by National Instrument 51-102. The contents of any website, RSS feed or twitter account referenced in this press release are not incorporated by reference herein. NASDAQ: WPRT, TSX: WPRT
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Dan Sceli Chief Executive Officer Nasdaq/TSX: WPRT 3 Bill Larkin Chief Financial Officer NASDAQ: WPRT, TSX: WPRT Speaking Today...
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Financial Highlights: • Revenues for the period ended March 31, 2025 was $71.0 million. In addition, Cespira generated $16.7 million in revenue. • Gross profit of $15.2 million (21% of revenue) in Q1 2025, compared to $11.7 million in the prior year (15% of revenue). • Adjusted EBITDA of $nil during the period ended March 31, 2025, as compared to negative $6.6 million in the prior year. • Net loss of $2.5 million for the quarter ended March 31, 2025, compared to a net loss of $13.6 million for the prior year. Strategic Highlights: • On March 31, 2025, announced a return to its roots via the proposed divestiture of the Light-Duty segment for $73.1 million (€67.7 million), subject to certain adjustments and potential earnouts. • On April 30, 2025, Westport’s board, executives, and multiple shareholders signed lock-up agreements to vote in favor of the Company’s proposed divestiture transaction. Setting the Stage for a New Beginning 1 Adjusted earnings before interest, taxes and depreciation is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 4 NASDAQ: WPRT, TSX: WPRT $77.6 $71.0 1Q24 1Q25 Adjusted EBITDA[1] (Millions) Revenue (Millions) -$6.6 $0.0 1Q24 1Q25 + Cespira earned $16.7 million of revenue in 1Q25
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Enhancing Value Through Focus 5 NASDAQ: WPRT, TSX: WPRT Near-, medium- and long-term priorities: 1 2 3 Driving Success via our HPDI Joint Venture Shaping a Future Powered by Alternative Fuels Improving Operational Excellence and Reducing Costs
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Now ‘til Next – Future Focused 6 NASDAQ: WPRT, TSX: WPRT Westport's products are timeline agnostic – meeting the diverse market needs with products and technologies that enable the use of net zero and lower-carbon fuels now while also having an affordable solution when H2 becomes more available Now: • Natural gas, including RNG provides significant opportunity to decarbonize heavy-duty and offroad applications now • A variety of growth opportunities with strong economics • Westport has IP that is expected to provide a competitive advantage Next: • Long-term hydrogen will play a role in ‘hard to decarbonize’ mobility and industrial applications
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Revenue Story: Stability via Cespira 7 7 NASDAQ: WPRT, TSX: WPRT Q1 24 Heavy-Duty OEMLight-Duty Q1 25 $77.6 $0.9 -$1.0 -$6.5 $71.0 Revenue ($ millions) High-Pressure Controls and Systems + Euro 6 Light-Duty business gains + Q1 2024 experienced a temporary decline in DOEM sales due to excess customer inventory - Decreased sales in Heavy-Duty OEM a result of the continuation of the business in Cespira - Deceased sales in the High-Pressure Controls & Systems segment due to industry slowdown Cespira earned $16.7 million in Q1 2025 + Cespira earned $16.7 million in revenue in 1Q25
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Adjusted EBITDA (1) Year Over Year Pluses: + $9.1 million improvement in EBITDA + Gross margin improvement + Reduced operating expenses in HD OEM and Corporate Minuses: - Cespira loss in Equity Income 1 Adjusted earnings before interest, taxes and depreciation is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 2 Gross margin is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation 8 8 NASDAQ: WPRT, TSX: WPRT -$6.6 -$3.8 $2.5 $7.9 $- Q1 2024 Equity Income Gross Margin Operating Expenses Q1 2025 Adjusted EBITDA ($ millions)
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$63.3 $64.2 Q1 24 Q1 25 Revenue ($ Millions) 1% Financial Performance – Light-Duty Revenue: • Increase in sales driven by Euro 6 program • DOEM sales improvement following significant decline in sales in Q1 2024 due to customer inventory build • Partially offset by lower sales in our IAM, electronics and fuel storage businesses compared to the prior year Gross Margin: • Change in sales mix with an increase in sales to European customers and a reduction in sales to developing regions • Slight increase in sales volumes 9 [1]Gross margin is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. NASDAQ: WPRT, TSX: WPRT Gross margin 14% of revenue Gross margin 1% of revenue Gross margin 9% of revenue $12.4 $14.0 Q1 2024 Q1 2025 Gross Margin(1) ($ Millions) 13% Gross margin 20% of revenue Gross margin 22% of revenue
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Revenue: • General slowdown in the hydrogen infrastructure development Gross margin: • Lower sales volumes, increasing the per unit manufacturing costs in the quarter [1]Gross margin is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 10 Gross margin 28% of revenue Gross margin 18% of revenue NASDAQ: WPRT, TSX: WPRT Financial Performance High-Pressure Controls and Systems Gross margin 20% of revenue Gross margin 25% of revenue $2.4 $1.4 Q1 2024 Q1 2025 Revenue ($ Millions) -42% $0.4 $0.2 Q1 2024 Q1 2025 Gross Margin(1) ($ Millions) -50% Gross margin 14% of revenue Gross margin 17% of revenue
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Revenue: • Continuation of the business transitioned to Cespira (which earned revenue of $16.7 million in Q1 2025) • Ongoing revenue related to amounts earned under a Transitional Services Agreement with Cespira Gross Margin: • Received $0.9 million in credits from component suppliers for inventory sold in the quarter [1]Gross margin is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 11 Gross margin 28% of revenue Gross margin 18% of revenue NASDAQ: WPRT, TSX: WPRTFinancial Performance – Heavy-Duty OEM Gross margin 20% of revenue Gross margin 25% of revenue $11.9 $5.4 Q1 2024 Q1 2025 Revenue ($ Millions) -55% -$1.1 $1.0 Gross Margin(1) ($ Millions) Gross margin (9)% of revenue Gross margin 19% of revenueQ1 2024 Q1 2025
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Revenue: • Revenue increased by $4.8 million compared to the Heavy-Duty OEM segment revenue from Q1 2024 driven by increased HPDI fuel systems sold Gross Margin: • Gross Margin increased compared to the previous year due to the increase in sales volumes and reduction in manufacturing costs. [1]Gross margin is a non-GAAP measure. Please refer to GAAP and NON-GAAP FINANCIAL MEASURES in Westport’s Management Discussion and Analysis for the reconciliation. 12 Gross margin 28% of revenue Gross margin 18% of revenue NASDAQ: WPRT, TSX: WPRTFinancial Performance – Cespira Gross margin 20% of revenue Gross margin 25% of revenue $16.7 Q1 2025 Revenue ($ Millions) $0.5 Q1 2025 Gross Margin(1) ($ Millions) Gross margin 3% of revenue
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Liquidity Debt Repayments & Inventory Optimization 13 • Cash used in operating activities of $4.9 million • Net cash used in working capital of $8.1 million • Operating income of $1.7 million • Collected $10.5 million in a holdback receivable • Capital contribution into Cespira of $4.7 million • Purchase of capital assets of $3.1 million • Debt repayments of $3.9 million NASDAQ: WPRT, TSX: WPRT $37.6 $32.6 Q4 2024 Q1 2025 Cash (Millions) $33.7 $31.1 Q4 2024 Q1 2025 Debt (Millions)
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14 NASDAQ: WPRT, TSX: WPRT Q1 2025 Highlights: • Demonstrating continued improvement in key financial metrics. • Cespira joint ventures generates increased revenue and improving gross profits. Proposed Light-Duty Segment Sale Recap: • A strategic return to the Company’s roots, with a focus on providing solutions for hard- to-decarbonize mobility and industrial applications. • Significantly strengthens balance sheet. • Provides essential proceeds to focus on strategic growth opportunities. • Continued leadership in fuel system solutions for clean, low carbon fuels. • Subject to shareholder approval and other customary closing conditions, the target closing date is expected to be in late Q2 2025. Westport is delivering practical applications today; helping to lead the energy transition in transport that is currently underway In Closing…
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15 NASDAQ: WPRT, TSX: WPRT Thank you