HYLN · Hyliion Holdings Corp.

Hyliion’s Q1 2026 results reflect a pivotal operational inflection: revenue surged to $2.8 million — four times Q4 2025’s $0.7 million — driven almost entirely by accelerated execution under existing Office of Naval Research (ONR) contracts, including the build of an 800-kilowatt KARNO Power Module for an unmanned U.S. Navy vessel. This shift from internal R&D to revenue-generating development work explains both the top-line growth and the 37% YoY decline in R&D expense (to $7.7 million), as well as the $0.2 million gross profit — the first explicitly reported gross margin gain tied to KARNO-related services. Net loss improved 32% YoY to $11.7 million, aided by reduced Powertrain Exit costs and flat SG&A. Management reaffirmed full-year revenue guidance of ~$10 million — largely anchored to continued ONR work and initial commercial sales following year-end KARNO commercialization — and projected year-end cash of ~$100 million, implying ~$50 million in total 2026 cash use. Critically, the completion of UL non-recurring certification testing removes a major regulatory hurdle for customer deployments, and the nearly 750 KARNO Cores under non-binding LOIs — spanning data centers (e.g., VFG Holdings’ 250-core, 50-MW LOI), defense, and prime power — signal broadening market validation. While all financial metrics remain small-scale and pre-commercial, the quarter marks a transition from pure R&D toward monetized engineering delivery, with military and data center demand now structurally informing both revenue timing and product architecture (e.g., the 800-kW Navy unit serving as the foundational building block for scalable data center systems).