Ballard margins swing positive as rail segment drives sales surge

Ballard Power Systems (NASDAQ:BLDP) reported a sharp improvement in profit margins and a double-digit revenue climb for the first quarter, bolstered by a massive spike in rail-related deliveries that helped mitigate a cooling bus market.

The Vancouver-based fuel cell manufacturer posted revenue of $19.4 million for the quarter ended March 31, a 26% increase year-over-year.

The standout performer was the company’s rail segment, where revenue skyrocketed more than 4,400% to $5.1 million.

This growth helped offset a 46% decline in bus revenue, which fell to $6.8 million as the company navigated timing shifts in vehicle deployments.

The quarter’s most notable achievement was a 37-point year-over-year surge in gross margin, which reached 14%.

Chief Executive Officer Marty Neese attributed the swing to disciplined cost management and a more favorable mix of higher-margin engine shipments.

Total operating expenses were slashed by 36% to $16.4 million, reflecting a leaner organizational structure.

While Ballard remains in a net loss position, its adjusted EBITDA loss narrowed to $11.4 million, and its use of cash for operations improved to $7.8 million.

The company ended the period with a robust cash position of $516.8 million, providing a substantial runway as it targets sustainable positive cash flow within the next two years.

Order backlog stood at $112.9 million at the end of March, with a 12-month orderbook of $52.8 million.

Meanwhile, management reaffirmed its 2026 outlook for operating expenses in the range of $65 million to $75 million and capital expenditures between $5 million and $10 million.