ITM Power: The Electrolyzer Maker Wants to Own the Plant, Not Just Sell It
Record revenue and a cleaner backlog are the past; a 150MW build-own-operate refinery deal, Rheinmetall synthetic fuels and a cash-burning build phase are the future
ITM.L · Earnings Call · 2026-10-19
A record year, but the story is the pivot
ITM Power's FY26 was genuinely strong: revenue of GBP43.6m, up 68%, gross loss cut from GBP23.7m to GBP6.1m, adjusted EBITDA loss down from GBP33m to GBP20.2m, and cash up GBP8.6m to GBP215.6m. The contract backlog held at GBP144m while 83% of it is now profitable contracts, versus 60% a year ago and zero in January 2023. That is the transformation Dennis Schulz promised. But this capital-market update was not really about the past year. It was about Hydropulse, the build-own-operate model, and a 150MW heads-of-terms deal with a leading EU oil refinery — a 10-year operational contract, FID targeted for 2027, production in 2029. The Hydropulse project would be by far ITM's largest contract and would turn an equipment vendor into a long-term hydrogen producer. The catch is capital. CFO Amy Grey was explicit: traditional equipment sales are cash-neutral at worst, but Hydropulse has a two-to-three-year build phase with no customer receipts. “Without any financing, that would be a cash outflow for two to three years.” — Amy Grey, Chief Financial Officer (CFO) · 2026-10-19 That is a sharp contrast with the prior call, when Dennis said “Hydropulse is, by its business model, not designed to drain cash from ITM but to deliver cash.” — Dennis Schulz, Chief Executive Officer · 2025-08-17 Both can be true — once operational, the project is profitable from day one and cash-generative — but the financing bridge is new and material. Management is talking to banks about project financing and bringing forward customer receipts. For a company whose balance sheet was just praised as a competitive advantage, this is the risk the market must now underwrite.Better backlog, lumpier revenue
The quality of the backlog has improved, but the shape of revenue is changing. ITM now recognizes Neptune, Poseidon and Alpha projects on a percentage completion basis, and GBP3.9m of FY26 revenue came that way. In January, Amy described the order book as “roughly speaking, 85% completed contracts and 15% percentage of completion.” — Amy Grey, Likely CFO or senior finance executive (discusses financial results and guidance) · 2026-01-31 By April, 17% of the GBP144m backlog was legacy, point-in-time work, fully provided for; the rest is percentage-of-completion. FY27 guidance of GBP50-60m revenue assumes about two-thirds comes from profitable contracts recognized progressively, with the legacy tail largely done. But the order intake itself is getting lumpier. Larger refinery and industrial projects mean longer FEED cycles and fewer, bigger decisions. Dennis did not sugarcoat it: “it's pretty black or white in terms of lumpy order intake.” — Dennis Schulz, Executive / Senior Management · 2026-10-19 That cuts both ways — ITM is now in a smaller pool of credible large-project suppliers, but a single slipped FID can move a year's numbers. The flat backlog despite record revenue is the tell: replenishment is happening, but in bigger, slower chunks.Defense, synthetic fuels, and a data-center shrug
The genuinely new theme is defense. ITM's collaboration with Rheinmetall targets decentralized synthetic-fuel plants under the Giga PtX program, using green hydrogen and captured CO2 to make drop-in diesel, jet and marine fuel. Dennis framed it as strategic sovereignty: “drop-in diesel, jet, and marine fuel fully compatible with existing NATO equipment.” — Dennis Schulz, Executive / Senior Management · 2026-10-19 The synthetic fuel opportunity is company-unique in this dataset; no other recent reporter is pitching it as a primary growth line. It also plugs into the global tape's defense bid, though ITM's angle is fuel logistics rather than weapons. Management declined to guide on pilot timing, and the deal could land as either an equipment sale or a Hydropulse-style build-own-operate. That optionality is attractive, but it is not yet revenue. The contrast is data centers. Simon Bourne poured cold water on the hype: “I think it is slightly over-hyped at the minute.” — Simon Bourne, Technical / Engineering Executive · 2026-10-19 He noted hydrogen for data centers is not incentivized like refineries, and ITM is engaging bottom-up rather than chasing headlines. That is a useful reality check against the data centers theme that dominates so much market chatter — and the global tape shows AI data-center baskets fading over the last 30 and 90 days. ITM is not denying the opportunity; it is refusing to let it distort the sales pipeline.The UK paradox and the alkaline argument
ITM has just taken GBP86.5m of UK government support — GBP40m equity from Great British Energy and a GBP45.5m DESNZ grant — to validate Chronos and build a 1GW/year manufacturing line. Yet Dennis was strikingly blunt about the UK's Hydrogen Allocation Round 2:The government is simultaneously a shareholder, a grantor and a bottleneck. That is an uncomfortable triangle, and it explains why ITM's commercial momentum is concentrated in Germany, Iberia and the Nordics rather than the UK. On technology, the alkaline debate that ran hot in prior calls has cooled. Simon was definitive: “It is no longer a question of PEM versus alkali. It is PEM is delivering today at large scale.” — Simon Bourne, Technical / Engineering Executive · 2026-10-19 Lingen One is the largest operating electrolyzer in Europe at 100MW; Lingen Two is commissioning. The Lingen One reference plant is the proof point that customers — and the market — have been waiting for. The argument has shifted from chemistry to execution.If I had one wish to make, it would just be government just crack on and award the HAR2 funding so that our customers can build the projects for their off-takers deploying our technology.