Key Takeaways
Westport Fuel Systems Inc. (WPRT) reported a narrower-than-expected loss for the first quarter of 2026, as a 33 percent revenue surge in its Cespira joint venture offset a decline in consolidated revenue and growing liquidity concerns.
"Our Cespira momentum continues to build with revenue up 33% year over year in the first quarter," Chief Executive Officer Daniel Sceli said on the company's earnings call. "That growth is increasingly material to Westport, reflecting stronger volumes, broader market adoption of HPDI, and progress with the second OEM."
The Vancouver-based company posted a first-quarter loss of 33 cents per share, beating the Zacks Consensus Estimate of a 44-cent loss. Revenue of $2.29 million, while down 68.8 percent from the prior year after a transitional services agreement ended, topped the consensus estimate of $1.9 million. The year-over-year consolidated revenue decline reflects the 2025 transfer of certain operations to the Cespira joint venture.
The quarter's operational highlight was the Cespira joint venture with Volvo Group. The JV's revenue climbed 33 percent to $22.2 million, driven by a 48 percent increase in product revenue to $19.5 million. Cespira's gross margin improved to 7 percent from 3 percent a year ago, and its net loss narrowed by 65 percent to $2.5 million from $7.1 million in Q1 2025.
However, the company's cash position has weakened, casting a shadow over the operational improvements. Cash and cash equivalents fell to $24.5 million from $27.2 million at the end of 2025. In its filing, Westport stated that it projects "cash and cash equivalents will not be sufficient to fund our operations through the next twelve months," raising "substantial doubt about Westport's ability to continue as a going concern." Management said it is evaluating several funding alternatives.
The growth in the Cespira JV was attributed to higher sales volumes of its High Pressure Direct Injection (HPDI) fuel systems and expanding market adoption. Volvo recently surpassed 10,000 natural gas trucks on the road equipped with the system. Westport also confirmed it is supplying a second original equipment manufacturer (OEM) for truck trials and expects a decision on commercialization "before year end."
The company's High-Pressure Controls segment also saw revenue increase 21 percent to $2.3 million, driven by higher service revenues for product testing provided to an OEM customer.
The strong performance of the Cespira joint venture is challenged by the company's urgent need to secure new funding. Investors will be closely watching for news on financing alternatives or a definitive commercial agreement with the second OEM partner later this year.
This article is for informational purposes only and does not constitute investment advice.
