What happened
Hyliion Holdings (HYLN -0.37%) reported year-over-year growth in its most recent quarter, but results were well below expectations. Investors were unimpressed, sending Hyliion shares down as much as 10.2% on Wednesday.
So what
Hyliion is a green-tech company focused on the commercial trucking industry, offering a solution that would avoid forcing large truck owners to mothball their existing fleets. The company is developing fully electric trucks but also offers a hybrid system that can be retrofitted onto existing vehicles.
Hyliion lost $0.19 per share in the second quarter, just slightly worse than expectations, but revenue of $266,000 was well below the $590,000 analysts had expected. Sales were up 58.8% year over year.
The company said it expects to consume about $150 million in cash this year on operating losses, capital spending, and working capital as it prepares to launch its new "Hypertruck" powertrain. But it does have $354 million in cash on its balance sheet and said it has no plans to raise additional capital in 2023.
"As Hyliion nears the commercial launch of the Hypertruck ERX, we face similar challenges as our peers in the path to electrify the commercial vehicle space," CEO Thomas Healy said in a statement. "Component cost, market shifts and a changing regulatory landscape will affect adoption rates. However, Hyliion has a favorable cash position and management will continue to assess our business model and strategic priorities to ensure we are using our capital most effectively."
Now what
As Healy notes, this market is proving to be a difficult one to crack. And the enthusiasm is clearly gone from this one-time SPAC darling. The company's shares have lost 67% of their value in the last year alone, leaving Hyliion valued by the markets at just $273 million.
Hyliion is continuing its work developing new powertrains and cab configurations, and has a partnership in place working on fuel-cell-powered vehicles. But this company remains a long shot to be successful, and its stock is priced accordingly. Any investor interested in buying in today needs to understand the risks involved and consider limiting Hyliion shares to a small part of a well-diversified portfolio.
