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SEC filingWestport Fuel Systems reported substantial operating losses and a net loss of $61.6 million for FY 2025, as revenue contracted to $23.3 million. The company faces significant liquidity challenges, with management expecting 2026 cash requirements to exceed operational cash generation.
Westport Fuel Systems generated $23.3 million in revenue for the fiscal year ended December 31, 2025. The increase in product revenue was primarily driven by the full year of sales volume in 2025 compared to seven months of sales in the prior year, specifically tied to increased volume to their initial OEM customer. However, this top-line performance was insufficient to offset the company's cost structure, resulting in a gross profit of $2.7 million and an 11.5% gross margin. The gross profit performance was impacted by a provision for obsolete inventory and a loss on an onerous contract, which partially offset the benefits of increased sales volume.
The company reported an operating loss of $14.2 million, translating to a -61.0% operating margin. This substantial negative margin reflects the challenge of maintaining a high fixed-cost base against a reduced revenue scale following strategic portfolio changes. The operational signals indicate that the company has undertaken restructuring actions, including restructuring its operating footprint in India in 2024, to align its cost structure with its current business profile. However, the gap between revenue and operating costs remains significant.
The net loss for the fiscal year totaled $61.6 million, or $3.56 per diluted share. This represents a substantial loss that underscores the company's current financial strain. Management commentary highlights that risks and difficulties, if they materialize, could disrupt ongoing business, distract management, result in the loss of key human capital, increase expenses, and otherwise have a material adverse effect on business and financial performance. The company also noted a cybersecurity incident in Q1 2026, though management believes it has not had a material impact on operations or financial condition to date.
Capital expenditures for the year totaled $2.7 million. Looking ahead, the company's outlook is cautious regarding liquidity. Management explicitly stated that cash requirements during 2026 are expected to exceed cash generated from operations and will require capital contributions to fund planned capital expenditures. This forward-looking statement signals the need for external financing or strategic capital raises to sustain operations and execute on business plans.
The strategic focus remains on executing operational improvements and managing the business through this transition period. Management continues to provide educational sessions to directors on industry-specific topics, reflecting an emphasis on governance and strategic alignment. Investors should monitor the company's ability to secure necessary capital contributions, the effectiveness of cost management initiatives, and the progression of sales volume to existing and new OEM customers as key indicators of financial stabilization.