Westport's Cespira JV hits stride as hydrogen engine deal with Volvo adds optionality
Q2 revenue up 125% at the joint venture, near-term breakeven in sight, while a $10M raise shores up liquidity.
WPRT · Earnings Call · 2026-08-12
A Quarter of Inflection
Westport Fuel Systems (WPRT) is a micro-cap story that just got more interesting. The second-quarter 2026 report, released August 12, delivered the strongest quarter yet for Cespira, the joint venture with Volvo Group. Revenue at the JV grew 125% year over year, with product revenue up 127% to $18.9 million. More importantly, Cespira's net loss narrowed 65% to $2.4 million, and gross profit swung to a positive $3.8 million. Management reiterated that 2027 is the target for breakeven, but the tone suggests it could come even sooner.
Since inception, Cespira has delivered quarter over quarter revenue growth with Q2 26 being the strongest. At 125% as compared to Q2 25.
The growth is not a one-off. Daniel Sceli, CEO, explained that the hydrogen engine development agreement signed with Volvo during the quarter adds a critical pathway: “it is a development contract that Volvo is funding the development of the HPDI system for hydrogen.” — Daniel Sceli, Likely CEO or Senior Executive · 2026-08-12 This is a customer-funded program, meaning Westport does not have to put up capital for the hydrogen variant. It also validates the HPDI platform across low carbon fuels, from LNG to renewable natural gas to hydrogen.
Cash, Control, and the Path to Break-even
On the balance sheet, Westport closed a $10 million offering in June, which included a direct placement and warrants. That brought cash to $23.9 million at quarter-end, essentially flat sequentially despite operating losses. Capital contributions to Cespira dropped to $3.5 million, and management expects them to keep falling as volumes scale. The company also made its second-to-last debt repayment to EDC, with the final one due in Q3. This is a company carefully managing a tight balance sheet while a core growth engine accelerates.
The high-pressure controls segment, however, remains a work in progress. Revenue dipped to $2.7 million from $2.9 million a year ago, as the transition of manufacturing from Italy to Canada and China caused a temporary production gap. But management highlighted that a backlog is building and Q3/Q4 should see volume ramp. “I think Q1, Q2 were transition periods. As we go into Q3 and Q4, it is just ramping up volume meeting the various customer demands.” — Daniel Sceli, Likely CEO or Senior Executive · 2026-08-12
In the Q&A, Sceli detailed the impact of the move: “we lost about 6 months in picking up the equipment, moving it, installing it, getting the facilities recertified.” — Daniel Sceli, Likely CEO or Senior Executive · 2026-08-12 The hydrogen market itself has been slower than expected, but China is being driven by government support, and the company expects to "beat our plan this year on volume."
What This Means for the Story
The market cap is just ~$35 million, so even small absolute wins move the equity. But the progress at Cespira is tangible. The breakeven milestone would dramatically reduce Westport's cash burn, and the hydrogen agreement with Volvo adds long-term optionality. In a global heavy-duty market where regulators are tightening emissions, the EU has allowed Euro 7 credits that favor early adoption of low-carbon tech. Westport's HPDI is positioned directly in that pocket.
It's worth noting that the second OEM trial—which management has repeatedly flagged—is still pending a decision. In the prior quarter, Sceli said: “I do feel more optimistic. I mean, the truck trial is going really well.” — Daniel Sceli, Chief Executive Officer · 2026-05-15 The current call reaffirmed that the trial is on track, with the next phase expected to be much larger. That gives a potential step-function catalyst, though timing remains uncertain.
The company's own keyword ranking has shifted sharply toward execution: "debt repayment," "capital contributions," and "breakeven" dominate. The controls business is still ramping, but the fundamental story is no longer a lab experiment—it's a commercial rollout.
Westport's challenge is scale and balance. But with growing volumes, a funded hydrogen program, and a clear path to JV breakeven, the second quarter stands as perhaps the most encouraging report in years. If the second OEM converts, this micro-cap could finally deliver upside that matches its technology narrative.