WPRT

Good day, and thank you for standing by. Welcome to the Westport's Q1 2026 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ashley Nuell. Please go ahead.

Good morning, everyone. Welcome to Westport Fuel Systems' conference call regarding the first quarter 2026 financial and operational results. This call is being held to coincide with the press release containing our financial results that was issued yesterday after market close. On today's call, speaking on behalf of Westport Fuel Systems will be our Chief Executive Officer and Director, Dan Sceli, and our Chief Financial Officer, Elizabeth Owens. Attendance on this call is open to the public, but questions will be restricted to the analyst community. You are reminded that certain statements made on the conference call and our responses to certain may constitute forward-looking statements within the meaning of U.S. and applicable Canadian securities laws. As such, forward-looking statements are made based on our current expectations and involve certain risks and uncertainties. With that, I will turn the call over to you, Dan.

Thank you, Ashley, and good morning, everyone. I'll turn to our financial results. Cespira's momentum continues to build, with revenue up 33% year-over-year in the first quarter. That growth is increasingly material to Westport, reflecting stronger volumes, broader market adoption of HPDI, and progress with a second OEM. Importantly, we expect this momentum to continue through 2026, supported by favorable fuel economics, tightening emissions regulations, and growing OEM and fleet interest in practical low-carbon solutions. The significance for our investors is not only top-line growth, but the financial read-through. As Cespira continues to scale and improve operating performance, we expect our funding requirements for the joint venture to continue to decline. That creates a more direct link between commercial execution at Cespira and improved capital efficiency at Westport. The broader market backdrop also remains supportive.

Volvo Trucks recently announced it has delivered more than 10,000 gas-powered trucks globally, highlighting growing adoption in key European markets. Cognitive Market Research projects the European LNG heavy truck market to grow at a 12.5% growth rate through 2031. Together, those indicators reinforce our view that Cespira is participating in a market with both near-term momentum and multi-year growth potential. Our high-pressure controls business has also reflected improved results in Q1 2026, with a 21% increase in revenue compared with the same period last year. What makes it truly meaningful is how we delivered it. Our brand, GFI Control Systems, provides critical components that make this system viable. AFS ensures that the technologies come together as a complete real-world solution, enabling the performance, reliability, and control our customers expect.

Adding to this result, we commenced production at the expanded product development and manufacturing facility in Cambridge, Ontario, and GFI's new China Hydrogen Innovation Center and manufacturing facility in Zhengzhou, China. With production underway at all facilities, combined with strong demand from large industrial companies, we remain optimistic about its performance this year, building off this strong start. Moving on to some recent excitement at the ACT Expo in Las Vegas, I believe it provides some key insights into our experience. Getting this truck to Las Vegas on time, show ready, and performing was a complex, high-pressure effort, and the fact that we delivered it speaks volumes. At ACT, from the moment the show floor opened, we saw strong interest. Other exhibitors, fleets, and OEMs stopping to take a closer look and excited by what they saw because this is not a concept.

It's a fully integrated platform that proves we can deliver diesel performance with cleaner, more cost-effective fuel today. A focused team brought this to life, but their success reflects something bigger, our ability to execute, to integrate, and to lead. As we showcased this platform, we demonstrated what sets us apart, not just innovation, but the ability to bring it to market where it matters most, and fleets and OEMs are starting to notice. It was clear from the volume of interactions this year compared to previous years that this is an exciting time for Westport. We are making clear steps forward in expanding our technology reach. We see growing demand for high performance, lower emission alternatives.

The conference success was a clear signal that we are advancing our high-pressure CNG storage solution into a North American market with real momentum, positioning Westport to capture long-term growth opportunities in the global heavy-duty transportation market. I'll have Elizabeth run through some financial details, and then we'll come back. Elizabeth.

Thank you, Dan. Good morning, everyone. I'll highlight a few key milestones that Westport has achieved, the first of which remains our strong cash position through the first quarter of 2026. As of March 31st, 2026, our cash and cash equivalents position stood at $24.5 million compared to $27.2 million at December 31st, 2025.

Net cash used in operating activities from continuing operations was $3.4 million for the quarter ended March 31st, 2026, compared to $8.6 million in the prior year, an improvement of $5.2 million as a result of changes in working capital. Our capital contributions to the Cespira joint venture decreased from $4.7 million in the 1st quarter of 2025 to $2.9 million in Q1 of 2026, reflective of the improvement of Cespira's financial performance. Our total outstanding debt sits at $1.9 million, a reduction of $1 million from the $2.9 million reported at year-end 2025. This debt will be retired in the 3rd quarter of 2026.

Our High Pressure Controls Business Segment saw meaningful growth, with revenue for Q1 2026 increasing 21% to $2.3 million from $1.9 million reported in Q1 2025. Higher year-over-year sales volumes drove the revenue increase with gross profit of $0.5 million, consistent with the prior period. As Dan highlighted, Cespira's revenue growth is accelerating as we enter 2026. In Q1 2026, total revenue generated was $22.2 million, compared to $16.7 million in the same period last year, representing an increase of 33%, driven by higher sales volumes. Cespira product revenue of $19.5 million increased 48% compared to $13.2 million in Q1 2025. Cespira gross profit improved to $1.6 million compared to $0.4 million one year ago.

Gross margin improved in Q1 2026 to 7% from 3% in Q1 2025. Cespira also significantly improved the bottom line with a net loss in Q1 2026 of $2.5 million, a 65% reduction from the $7.1 million net loss reported in the prior year quarter. This progress is supported by strong market adoption, including Volvo reaching the milestone of more than 10,000 natural gas trucks on the road equipped with Cespira's HPDI fuel system. We are also encouraged by the continuing progress of a second OEM that is currently conducting truck trials. We're excited about the opportunities ahead as we target an improvement in Cespira's capital requirements. With that, I'll pass the call back to Dan.

Thank you, Elizabeth. We are operating from where the fundamentals continue to strengthen. We are seeing solid year-over-year growth in our Cespira joint venture with Volvo Group, supported by increasing demand for LNG-powered heavy-duty trucks in Europe and other parts of the world and favorable fuel economics that are driving adoption. At the same time, tightening emissions regulations and the need for practical lower emission solutions are reinforcing the role of technologies like ours in the transition of the heavy-duty sector. Against this backdrop, Westport is well positioned to capitalize on these trends. Cespira's HPDI fuel system takes diesel delivery like performance with lower emissions, and we are seeing growing validation through increased volumes with both Volvo and an additional OEM undergoing testing as we speak.

The momentum we demonstrated at ACT Expo highlights our ability to bring fully integrated solutions to market, and we are now focused on execution, scaling commercial volumes, advancing our high-pressure CNG solutions into North America, and expanding into new regions and applications. Together, these efforts position us to build meaningful scale and capture long-term growth opportunities across the global heavy-duty transportation market. Thank you. That concludes the discussion.

As a reminder, to ask a question, please press star one one on your touch tone telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question will come from the line of Eric Stine of Craig-Hallum Capital Group. Your line is open, Eric.

Good morning, everyone.

Hey, good morning, Eric.

Hey, maybe just starting with Cespira. The second truck trial, I mean, it does-- I know we just connected, what, a couple weeks ago, but it does feel like you're giving a more optimistic tone about that trial. Curious, I mean, am I reading that right? And with that in mind, you know, can you remind us of next steps for that or the timeline we should look for, you know, over the remainder of 2026 and then in 2027?

Sure. Yeah, I do feel more optimistic. I mean, the truck trial is going really well. You know, discussions, negotiations continue for the next phase of this, which is a higher volume. The initial truck trial, I think, was around 200 trucks. Moving on to larger volumes and, you know, commercializing this is the discussion that's ongoing right now.

Okay. Timeline in terms of, I think last time you'd said that you expected a, you know, a decision and maybe it's a decision as part of the negotiations you mentioned later this year. Does that still hold?

It does. Yeah.

Okay. Got it.

A determination on this project before year-end.

Okay. maybeYou know, I mean, you gave a lot of detail about Q4 and the end of 25 in terms of some of the new markets that Volvo, well, and Cespira is seeing momentum on a global basis, obviously North America a big focus. Just curious, I mean, are there any other contributors to Q1 that are worth highlighting, you know, as awareness of that product expands?

We do see, you know, beachheads opening up in India and Brazil. There's already trucks in Peru and Chile. You know, India and Brazil are two massive markets and, you know, we're seeing strong interest in those markets to move to alternative fuel. We're very excited about that opportunity coming to us.

Got it. All right, maybe last one for me. Just because of how things are trending with the joint venture and, you know, expectations that that momentum continues, can you just update us on, maybe current thoughts on contributions needed to the joint venture, here going forward?

Yeah. Obviously, you saw that we've, you know, the contributions are going down at a steady rate simply because volumes are going up at a steady rate. I mean, the product revenue alone, over the last 48, we're expecting it to have that rate even grow further. You know, as we approach, you know, 2027, mid-2027, those cash contributions will be reduced a lot more.

Okay. You were cutting in and out there, but I guess I'll take that. Clarify some stuff offline. Thank you.

Okay. Thanks, Eric.

Our next question will be coming from the line of Chris Dendrinos of RBC Capital Markets.

Yeah, good morning. Thank you.

Good morning.

Maybe just to follow up here a bit on Cespira here. You know, a good quarter with some solid gross margin there. You know, how are you thinking about gross margin for the remainder of the year? I guess what I'm kind of curious about is you highlighted some deliveries to the test OEM, and I'm curious what that volume looks like maybe for the rest of the year and how that's playing out in terms of gross margin. Thanks.

Yeah, sure. I mean, as we've been talking about, you know, for the last year, Cespira's margins are gonna continue to grow just simply based on volume. You know, we built out this business completely. To be a tier 1 to a automotive OEM like Volvo, you need to have a completely built out and certified business. That was, you know, day 1 almost 2 years ago. You know, all disciplines, all departments, full certifications in IATF, all that. The expense of building out the business was laid down. We're now, you know, structuring volume to cover those product costs. As we continue to, you know, build forward and find positive margin impressions, everything we spoke to Q2, quarter four, Cespira and the business is safe.

I mean, the business we have plans to grow in the upcoming year to accelerate it through the rest of the year. In terms of the second OEM, you know, Fred, we're in discussion with them. As you can see from here, I mean, we're not allowed to discuss who or when or how, but Cespira is very excited to go after marketing plans and understand their capabilities. We should be able to kind of speak to that in the back half of the year as the program progresses more.

Got it. Thanks. Maybe just as a follow-up here, you know, there was the service segment, and I think that project rolls off at the end of this year. Is there anything that would potentially come in and replace that? Thanks.

I mean, that service is really 2 major projects. HPDI 3.0, which is, you know, in conjunction with Volvo launching its case engine at the end of this year. You know, it's an advanced HPDI system. It's an advanced Volvo engine. That's the first part that we'll be wrapping up. The second is we are still doing the development work for Volvo's hydrogen project. They've recently announced their, you know, perhaps on the road, we are doing that development work over the next couple of years. That service work is gonna continue.

We're looking at additional service work, which engineering development work, on a couple of other projects that we're not allowed to talk about yet, as you can understand. We hope that we can announce them further down the road.

Got it. Thank you very much.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. Our next question will be coming from the line of Rob Brown of Lake Street Capital Markets. Your line is open, Rob.

Hey, good morning, Rob.

Thank you. Good morning. Just kind of at a high level, what are the next steps in the North American market? You had good, kind of a good showing at the ACT Expo and good interest. What's sort of the next steps in the North American market development?

Yeah, Rob Brown, I gotta tell you, it was more than, you know, successful. It was overwhelming. The excitement, the interest that we got at the ACT Expo. We, you know, we built out a truck. Volvo got us a truck and an engine. We built it out and drove it down from Vancouver to Las Vegas. The funny thing was we had a chase car. The truck spent $280 on gas getting there, less than the chase car. And the interest is just overwhelming. There's an awful lot of discussion right now between fleets, dealers, and the OEM on what's next. Certainly, you know, we are planning to do more demos, fleet to fleet-driven demos.

There's planning to be done for the EPA certification to launch this. That's all activity that, you know, is picking up pace just coming out of the ACT Expo because of the interest from multiple fleets, multiple very large fleets. We're very excited about that.

Okay. Thank you. In the high pressure controls business, you had a good step-up in gross margin. I assume that has a lot to do with getting China production running. How is the gross margin trends in the controls business going forward?

Yeah, we expect to, you know, down the road as the volume, because it is a volume issue. We shut down to move the manufacturing equipment out of Italy and move it to between Cambridge and China. The China piece was really built out to focus on the China market only for localized cost, localized manage politics. Of course, we're gonna be, you know, localizing some of the components. We expect the margins to grow there, but we need the volume to pick up. There is still the pause in hydrogen, you know, we're hearing from the Chinese government that's going to get pushed forward again. The underlying product is a very high product that we can get good margins on.

What we need right now is volume, and that volume is starting to come. you know, we're seeing it already this year. you know, one of our, I'm sure you follow them as well, customers in that had their call earlier this week are going to bring up. all over, volume is starting to go up for HyPro and as that volume goes up, the margins are gonna be there.

I'm showing no further questions. I would now like to turn the call to Dan for closing remarks.

Well, for your time today. Earlier in the quarter, we're very excited about where we're headed. Lots of positive trends. You know, emphasize this both ABCI and of course, controls. Look forward to the next call.

This concludes today's conference. Thank you for participating. You may now disconnect.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Westport's fourth quarter 2025 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone keypad. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference over to Ms. Ashley Nuell. Ma'am, please begin.

Thank you. Good morning, everyone. Welcome to Westport Fuel Systems conference call regarding its fourth quarter and full year 2025 financial and operating results. This call is being held to coincide with the press release containing Westport's financial results that were issued yesterday after market close. On today's call, speaking on behalf of Westport will be Chief Executive Officer and Director, Dan Sceli, and Chief Financial Officer, Elizabeth Owens. You are reminded that certain statements made on this conference call and our responses to certain questions may constitute forward-looking statements within the meaning of the U.S. and applicable Canadian securities laws. As such, forward-looking statements are made based on our current expectations and involve certain risks and uncertainties. With that, I'll turn the call over to you, Dan.

Thank you, Ashley, and good morning, everyone. I want to begin by addressing recent events. We appreciate the patience and support of our shareholders as we worked through our recent cybersecurity incident. Our priority was to ensure the integrity of our IT systems, business continuity, and financial reporting, and we are pleased to confirm that this review has been successfully completed. With this behind us, we're looking forward to executing on our strategy and delivering on the next phase of our business objectives. Turning to our financial results, the past year has been a defining one for Westport, marked by the successful divestiture of our light-duty business, the recent receipt of a $6.5 million payment, and further strengthened by Suspowera's agreement with a leading OEM to manufacture and deliver HPDI components for a truck trial assessing the future commercialization.

These accomplishments, combined with ending the year with over $27 million in cash and very low debt, reflect the meaningful progress we have made in sharpening our strategic focus and building a stronger company. The global heavy-duty transportation market is increasingly recognizing natural gas as a practical, lower emission solution available today. This is evidenced by Volvo's recent milestone of delivering more than 10,000 natural gas trucks on the road, underscoring the accelerating adoption of Westport's HPDI fuel system technology and validates the strategic direction we have taken. From a market perspective, the U.K. leads the adoption of HPDI-powered LNG trucks, followed by Germany, Sweden, the Netherlands, Norway, and France. Emerging gas markets such as India and Latin America are also gaining momentum, with volume seeing steady growth.

When we introduced our proprietary CNG fuel storage and delivery system several months ago, we emphasized its potential to significantly expand our addressable market, particularly in North America. Development has progressed well, and our confidence in the commercial opportunity continues to build. We look forward to showcasing this solution at the upcoming Advanced Clean Transportation Expo, ACT, where we will have the opportunity to show off our technology to industry partners and customers. By integrating advanced high-pressure CNG storage with Suspowera's field-proven HPDI fuel system, we match or exceed the performance and efficiency expected from diesel engines with compelling economics in markets where CNG is the natural choice, like North America. We believe this innovation meaningfully enables Westport and Suspowera to capture new opportunities as we move into field testing. Our GFI brand, through our high-pressure controls business, has also delivered important operational milestones.

The opening of our facility is one of the world's fastest-growing hydrogen markets and in Canada represents a step in localizing manufacturing, reducing costs, and improving competitiveness. As the transportation industry continues to balance economic realities with sustainability objectives, we are confident that alternative fuel systems, including Suspowera's HPDI technology and our high-pressure components, provide real-world solutions that deliver both performance and affordability. With the completion of our strategic transition and only a few milestones remaining, a growing market validation of Suspowera's expansion, a path to address the North American market, and a clear strategic focus, Westport is excited to dive into this next phase. Now I'll have Elizabeth run through some financial details and then come back afterwards. Over to you, Elizabeth.

Thank you, Dan. Before I dive into the details, I'll just touch on a few key milestones that were just achieved, the first of which is our strong cash position, reflective of a successful divestiture of the light-duty segment. As of December 31st, 2025, our cash and cash equivalents position increased by $12.4 million to $27.2 million, compared to $14.8 million at December 31st, 2024. The increase in cash was primarily driven by the sale of our light-duty segment, as I mentioned, partially offset by cash used in our operating activities and debt repayments. Exiting 2025, with the proceeds from the disposition of Westport's light-duty segment, our long-term debt, including the current portion, reflected a 57% reduction to $2.9 million as at December 31st, 2025.

This was compared to $6.8 million in the prior year period. Including the long-term debt from discontinued operations, the reduction was more than 90%. This improved financial position provides Westport with greater flexibility to concentrate on markets that are best suited to our current strategy. Suspowera continues to drive meaningful improvements in our results. In the fourth quarter of 2025, total revenue was $29.3 million, compared to $22.9 million in the same period last year, representing an increase of 28%. This progress is supported by strong market adoption, including Volvo reaching the milestone of more than 10,000 natural gas trucks on the road equipped with Suspowera's HPDI fuel systems. We are also encouraged by the continued progress of a second OEM that is currently conducting truck trials. We are excited about the opportunities ahead as we target an improvement in Suspowera's capital requirements.

Turning to the details of our 2025 results, Westport reported revenue of $23.3 million for the year ended 2025, compared to $40.7 million in 2024. The 43% decrease in revenue was primarily due to the end of the transitional service agreement for inventory and contract manufacturing between Westport and Suspowera. Our adjusted EBITDA for 2025 was -$17.3 million as compared to the -$11.4 million reported for 2024. We reported a net loss from continuing operations in 2025 of $29.6 million, compared to a net loss from continuing operations of $31.3 million for the prior year, with the decrease in net loss attributed to lower operating expenditures across R&D and SG&A and a favorable change in foreign exchange rates, partially offset by a full-year pickup of Suspowera's operating results in 2025 compared to the seven months in 2024.

Looking at our specific business units, high-pressure controls revenue for the fourth quarter of 2025 increased 20% to $1.9 million, compared with $1.6 million in the prior year quarter, and decreased to $8.3 million for the year ended December 31st, 2025, from $9.4 million for the prior year. The decrease in year-over-year revenue for the period ending December 31st was primarily driven by the general slowdown in the hydrogen infrastructure development, leading to a slower adoption of automotive and industrial applications powered by hydrogen. In Q3 2025, we kicked off the move of our manufacturing capacity from Italy to our new facilities in Canada and China, which required shutting down our operations. In late Q4 2025, we resumed selling products to our customers to meet the backlogged demand from the aforementioned shutdown.

Gross profit for the year ended December 31st, 2025, decreased by $1.3 million to $0.9 million, or 11% of revenue, compared to $2.2 million or 23% of revenue for the prior year. Moving on to Suspowera. Total revenue generated in Q4 2025 was $29.3 million, compared to $22.9 million in the same period last year, an increase of 28%. Suspowera product revenue of $23.4 million increased 30% compared to Q4 2024, driven by higher volumes. Gross profit was -$1.1 million for Q4 2025, compared to $0.5 million in Q4 2024, with the negative variance driven primarily by an obsolete inventory provision of $1.7 million and a recognized loss on one of our contracts valued at $2.8 million. As I previously mentioned, we had a cash and cash equivalents balance of $27.2 million as at December 31st, 2025.

Net cash used in operating activities from continuing operations was $14.2 million for the year ended December 31st, 2025, compared to $5.8 million in the prior year, an increase of $8.4 million. The decrease in net cash provided by investing activities was mainly driven by $21.7 million in capital contributions to Suspowera and purchases of property, plant, and equipment of $2.7 million, partially offset by proceeds from the sale of the light-duty segment. As noted, we also strengthened our balance sheet with total outstanding debt of $2.9 million, down from $6.8 million, while reducing the complexity of our corporate structure in 2025. Our business is focused on the right markets for us, and we are continually looking at ways to streamline our operations. With that, I will pass it back to you, Dan.

Thank you, Elizabeth. As we look to 2026, we see a transportation market increasingly grounded in economic reality. Operators are seeking solutions that deliver measurable emission reductions without sacrificing durability or operating economics. Natural gas is playing a larger role in that equation, not as a transitional concept, but as a fuel that can compete on performance and cost today. The HPDI platform delivered through Suspowera is central to that opportunity by pairing compression ignition performance with the advantages of natural gas, including the potential to incorporate hydrogen blends over time. We are providing OEMs and fleets with a pathway that aligns emission reductions with commercial expectations. As I mentioned earlier, Volvo's milestone of more than 10,000 natural gas trucks on the road in over 30 countries, featuring Suspowera's HPDI fuel systems, highlights our combined success in helping drive this path of success.

We are encouraged by the progress of a second OEM conducting a full truck trial throughout 2026, which we further believe validates additional commercial potential. 2026 will be a pivotal year as we advance demonstrations and fleet trials, present this exciting new platform at the ACT conference this spring, and follow with targeted show-and-tell sessions with Canadian fleets through the spring and summer. Together, these initiatives position us to build momentum across our portfolio and translate technology progress into tangible commercial interest. I can appreciate the investment community's interest in our 2026 outlook. We are focused on delivering disciplined execution, continued advancement of OEM programs, and converting technical validation into new commercial opportunities. In our high-pressure controls segment, we're optimistic that volumes can increase as customers' facilities ramp up production, while we actively pursue cost reduction opportunities in China through greater total sourcing and supply chain optimization.

With a focused organization and technologies aligned with market demand, we believe 2026 represents an important step forward, and we intend to deliver. Thank you.

Ladies and gentlemen, at this time, if you have a question or comment, please press star one one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star one one again. Again, if you have a question or comment, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Amit Dayal from H.C. Wainwright. Your line is open, sir.

Hey, good morning, everyone. Thank you for taking my questions.

Hey. Good morning, Amit.

Just on the margin side of things, it looks like inventory issues and relocation issues were sort of pressuring margins in the fourth quarter. Do you think we see some bounce back in 1Q and the rest of 2026 on the margin side?

Yeah, for sure. I think this transition, I'll start with the high-pressure controls transition from Italy to Canada and China. Launching the two new production facilities, moving the equipment over, managing the inventory transfers, starting up getting the plants certified, which is quite an extensive process. Yeah, that put a lot of pressure on margins, and we do expect margins to improve and volumes as well. We're already seeing some pickup in volumes as we move through the year.

Understood. For the high-pressure controls segment, can you talk a little bit about how maybe the China market or the Indian market, et cetera, the international opportunities you highlighted could start ramping for you? What should we expect in terms of go-to-market sort of strategy in these geographies?

Sure. I'll start with China. I think everybody knows that China is the fastest growing hydrogen market. The government goals that they set out are driving volume increases. We're in a bit of a lull right now where volumes globally have slowed down on hydrogen, but we expect them to begin to pick up again at some point here in China. Having our plant there allowed us to compete locally. It allowed us to have local costs, source local suppliers. For us, it's the right strategy to compete in China for the Chinese market. Shipping from Italy or from Canada just didn't make sense. The comment on India is really a huge opportunity for Suspowera in the long-haul trucking market. India has now put in a multi-state highway system. They're investing in clean fuel stations.

We see that a number of trucking OEMs look at India as a beachhead for growth, and that market's going to pick up, we believe, pretty significantly.

Understood. Just last one from me. Any opportunities or possibilities in the power gen or backup power space for you guys?

Well, interesting you ask. We've been looking into power gen. We currently supply into power gen today. We have a customer that used to be Kohler, Roco, that we supply out of our high-pressure controls business. We see that opportunity growing with the investments going into power gen across North America and of course, globally. We think that there's an opportunity to build out that business and are expected to grow there.

Understood. That's all I have, guys. I'll take my other questions offline. Thank you.

Great. Thanks, Amit.

Second, this question or comment comes from the line of Rob Brown from Lake Street Capital Markets. Mr. Brown, your line is open.

Hi, good morning.

Hey, good morning, Rob.

First question's on the OEM trial at Suspower, the second OEM. I know you can't give a lot of detail, but I think you said this year is sort of when the trial's happening. What's sort of the decision point on that? Is it sort of work this year and then just make decisions and then start potentially ramping into a production model or just sort of the outlines of the process would be helpful.

Sure. I wish I could say who it was, but in this commercial truck world, they're very careful about their commercial information. The trial's ongoing right now, right? There's trucks on the road running. There's discussions about expanding it, but we believe decisions will be made in the second half of the year at some point. We don't know the exact timing. It depends when they get the miles on the trucks. Our expectation is that in the second half of the year, we're going to start getting feedback. Of course, if it all goes well, we're hoping this is going to lead to a commercial launch.

Okay. Got it. Turning back to the high-pressure controls business run rate, get a sense of what's the sort of revenue run rate now that you've gotten the production transitioned. Is it sort of growing off the Q4 run rate? Or I guess, how much of the Q4 run rate was depressed from that, I guess? Just a sense of the run rate in that business.

Sure. The Q4 run rate was depressed. Number one, the market has slowed down somewhat, but also with shutting down the equipment in Italy, moving it all to the two new plants. Obviously, we weren't producing for some time while that transition happened. Yeah, we do see that market starting to grow. We see volumes increasing over what we expected for 2026 already. It's on a good path, and we believe that, I think specifically the Chinese market is the one that will take off first as the Chinese government puts those goals in place for hydrogen transition in both the automotive and in the industrial markets.

Okay, thank you. I'll turn it over.

Thank you.

Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star one one on your telephone keypad. Our next question or comment comes from the line of Mr. Eric Stine from Craig-Hallum Capital Group. Mr. Stine, your line is open.

Hi, Dan. Hi, Elizabeth. Good morning.

Hey, good morning, Eric.

Dan, you touched on HPDI in India and in your prepared remarks, Latin America, and some other markets. In terms of in North America, I know that's a very high priority. You did mention some trials that you are planning or that the joint venture is planning in Canada. Could you maybe go into that a little bit? Anything you can share-

Sure.

Should we assume then that Canada is kind of the initial spot in North America that you would target?

I think it is a Westport product, not a Suspower product. Obviously Suspower has the on-engine HPDI technology that will be part of the solution, but the back-of-cab high-pressure storage, smart storage system is a Westport product. We have already got the first truck. Volvo got us a truck, and we've already put the back-of-cab system on it. It's been running miles developing data. The reason that is that we're not having to redevelop any of these systems. It's a matter of putting these systems together. It's not a huge development project. It's more of a market development that's required. The truck, as I said, is on the road. The truck will be on its way shortly to Las Vegas for the ACT show. I hope you're gonna be there, Eric, and see it. We have a booth right next to Volvo there.

As you know, this CNG storage system is primarily focused on the North American market. We will be doing the initial trials in Canada. We will, at some point here, be moving to the U.S. for trials as well.

Got it. Okay. I misunderstood that. Thank you for the clarification. I guess the follow-up then would be just about bringing HPDI, the joint venture, and since you just talked about back-of-cab, but HPDI to North America.

Yeah.

I would assume that that would be Volvo, right?

Yes. Well, as a starting point, for sure.

Yeah.

this whole CNG, I mean, HPDI is growing fast globally. The difference is that all the growth to 10,000 trucks are on LNG because that's how those countries receive their natural gas. Natural gas in North America is primarily delivered through compressed, right? It's a CNG market. Our on-engine system really doesn't care whether it's compressed or liquid. The system adapts to that. The storage system is the big difference, going from a liquid storage to a compressed storage, and that's what we're bringing in, and the first truck on the road is a Volvo truck. It's their new truck, and we're very excited to have it showing up at ACT. Yeah, this is pretty exciting for us. We're finally getting to execute on this strategy, and any growth we have on this back-of-cab system obviously pulls through HPDI for Suspowera.

Yep. Nope. Absolutely. Okay, thanks for that. Just housekeeping for my last question or questions. Just, I might have missed it, but did you quantify or estimate what you think the move did in terms of limiting Q4 for the high-pressure segment?

Oh, sure. I think we lost probably a couple of months of production. We had built up some inventory, but when you lose a couple of months production, you got to play catch up. That coincides with a bit of the market pause that had happened. We've launched both plants. Both plants are up and running and shipping product. We've gotten through that transition hump, through the launch hump, and we're pretty excited about where that's gonna go. We have the control in our hands.

Okay. Thank you.

Perfect. All right. Thanks, Eric. Well, that's all the questions we have for today. I want to thank you for your time, everyone, and have a great, wonderful weekend.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers stand by.