Hyliion Holdings Corp.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
HYLN$2.99-4.8%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001628280-26-055738
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001628280-26-072811
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 145 previous paragraphs and 154 current paragraphs.
101 unchanged; 35 reworded; 14 added; 9 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Development History and Progress
Current report
The 200 kW KARNO Power Module rating represents the electrical output delivered by the KARNO Core to the DC bus under standard-day conditions at sea level, consistent with industry practices for rating power generation equipment. This rating excludes power consumed by auxiliary components, such as fans and blowers, and actual net power output will vary based on customer configuration and environmental conditions, including ambient temperature and altitude. The use of standard-day conditions provides a consistent basis for comparing KARNO performance with alternative power generation technologies. Initial customer deployments are expected to operate below the 200 kW rating as we continue to implement component improvements intended to achieve the targeted power output which we expect to demonstrate by the end of 2026.
Current report
Early Customer Deployments
Current report
During the second half of 2026, we discovered that a feature in a key printed component, known as the reactor, was susceptible to fatiguing due to thermal stresses experienced after extended run time at high power levels, resulting in a unit malfunction. This issue affects a more recent version of the reactor but has not been observed in earlier designs. We have since redesigned the reactor to address the issue and are printing updated parts that we believe will eliminate the issue. In the interim, we are continuing production of KARNO Cores for initial customer deployments using earlier reactor designs that have not exhibited this issue.
Current report
The need to retrofit affected units will delay completion of our early adopter customer deliveries beyond our previous 2026 target. We now expect to complete and deliver the approximately 10 early adopter units between late 2026 and early 2027. We continue to expect the first customer deployment unit to be moved to the customer’s site before the end of 2026. This unit and other early adopter units deployed in 2027 will then undergo further testing and validation while operating in their intended commercial environments. These deployments, together with our ongoing development efforts, are expected to validate critical design specifications, including projected operating life, maintenance requirements and durability.
Current report
Certain stated performance capabilities and product features may not be available at initial commercialization of the KARNO Power Module. Initial customer deployments will be configured to operate on a single fuel source, with future product iterations expected to support a broader range of gaseous fuels and ultimately more than 20 identified fuel types, including both gaseous and liquid fuels. We expect customers to specify their primary fuel requirements, with the option to configure future KARNO Power Modules to operate on additional fuels.
Current report
Recent Testing and Engineering Activities
Current report
Additive Manufacturing Improvements
Current report
R&D expenses decreased $1.4 million due to significant efforts toward performance of our contracts with the ONR.
Current report
Selling, general, and administrative expenses decreased $0.9 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.
Current report
Comparison of Nine Months Ended September 30, 2026 to Nine Months Ended September 30, 2025
Current report
Selling, general, and administrative expenses decreased $0.3 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.
Current report
Our existing R&D contracts with the ONR are expected to provide a significant source of revenue and cash inflows to support our ongoing development activities. To date, we have been awarded ONR cost-plus-fixed-fee contracts totaling $67.1 million, of which approximately $45.5 million remained available as of September 30, 2026. We also anticipate receiving additional R&D contract awards totaling approximately $8 million before the end of 2026.
Current report
For the nine months ended September 30, 2026, cash flows used in financing activities were $0.4 million primarily due to payments of deferred equity offering costs.
Removed paragraphs (9)
Previous report
Also in 2025, we insourced linear electric motor production following an unsuccessful effort to outsource this work to a contract manufacturer. This transition is accelerating the ramp-up in motor production capacity and enabling greater control over manufacturing quality.
Previous report
We do not expect to generate significant R&D services revenue following substantial completion of the September 2024 ONR contract discussed in Note 3, “Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, until performance under the July 2026 contract increases substantially, which we expect to occur around mid-2027.
Previous report
R&D expenses decreased $0.6 million due to significant efforts toward performance of our contracts with the ONR.
Previous report
Selling, general, and administrative expenses increased $0.5 million attributable primarily to personnel expense, offset by other smaller changes.
Previous report
Comparison of Six Months Ended June 30, 2026 to Six Months Ended June 30, 2025
Previous report
We do not expect to generate significant R&D services revenue following substantial completion of the September 2024 ONR contract discussed in Note 3, “Summary of Significant Accounting Policies” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, until performance under the July 2026 contract increases substantially, which we expect to occur around mid-2027.
Previous report
Selling, general, and administrative expenses increased $0.6 million attributable primarily to personnel expense, offset by other smaller changes.
Previous report
We have accepted a proposal from an equipment financing provider for up to $15 million of financing that would be secured by certain of our additive manufacturing, CNC machining and other production equipment, and paid a good faith deposit in July 2026. The proposal is non-binding, and the financing remains subject to the provider's credit approval, equipment inspection and execution of definitive documentation, and may not be completed on the proposed terms or at all. If completed, we expect to make monthly payments over a five-year term and to account for the arrangement as a secured borrowing. We expect to use any proceeds to fund capital investments supporting KARNO Power Module commercialization and for general corporate purposes.
Previous report
For the six months ended June 30, 2026, cash flows provided by financing activities were nominal.
Reworded paragraphs (35)
Previous wording
Beyond the 200 kW variant, Hyliion is advancing the development of a larger Multi-MW (2 MW+) KARNO system, which integrates multiple 200 kW KARNO Core units operating in tandem in a compact containerized footprint. The Multi-MW KARNO system will target key market segments such as data centers and industrial prime power applications. We are also developing a modular 800 kW system consisting of four KARNO Core units that is planned to be delivered to the U.S. Navy in 2026 as part of our project with ONR. We believe that this modular and scalable approach enables seamless power expansion while maintaining high efficiency and reliability. By utilizing multiple 200 kW generating blocks, the system offers built-in redundancy and the flexibility for customers to customize capacity to match their power needs.
Current wording
Beyond the 200 kW variant, Hyliion is advancing the development of larger Multi-MW (2 MW+) KARNO systems, which integrate multiple 200 kW KARNO Core units operating in tandem in a compact containerized footprint. The Multi-MW KARNO systems will target key market segments such as data centers and industrial prime power applications. We are also developing a modular 800 kW system consisting of four KARNO Core units that is planned to be delivered to the U.S. Navy in early 2027 as part of our project with ONR. We believe that this modular and scalable approach enables seamless power expansion while maintaining high efficiency and reliability. By utilizing multiple 200 kW generating blocks, the system offers built-in redundancy and the flexibility for customers to customize capacity to match their power needs.
Previous wording
Most of our current activities are focused on the R&D of our KARNO Power Module. We undertake significant testing and validation of our products and components to ensure that they will meet the demands of our customers. Our R&Dactivities primarily take place at our facility in Cincinnati, Ohio and at our headquarters in Cedar Park, Texas. Our R&D is primarily focused on:
Current wording
Most of our current activities are focused on the R&D of our KARNO Power Module, including testing and validation to ensure that our products meet design specifications and customer requirements. These activities primarily take place at our facility in Cincinnati, Ohio and at our headquarters in Cedar Park, Texas. Our R&D is primarily focused on:
Previous wording
Since acquiring the KARNO technology from GE in September 2022, Hyliion has made significant investments in research and development to commercialize the 200 kW KARNO Power Module while simultaneously developing an 800 kW system for the U.S. Navy. This 800 kW platform is also intended to serve as the foundational building block for future multi-megawatt KARNO systems targeting data centers and other large scale applications. Early efforts focused on the development of a 125 kW KARNO Core, which was successfully operated in our Ohio facility and utilized for extensive testing and further advancements. Through this system, we validated the ability of the KARNO Core’s fuel oxidation system to operate on a wide range of fuel sources, including natural gas, hydrogen, gas mixtures, and untreated landfill and Permian Basin well gas.
Current wording
Since acquiring the KARNO technology from GE in September 2022, Hyliion has made significant investments in R&D to commercialize the 200 kW KARNO Power Module while simultaneously developing an 800 kW system for the U.S. Navy. This 800 kW platform is also intended to serve as the foundational building block for future multi megawatt KARNO systems targeting data centers and other large power applications.
Previous wording
Additionally, testing of the oxidation system demonstrated very low levels of pollutant emissions in the exhaust stream. The 125 kW KARNO Core also served as a platform for developing and validating key components that are now incorporated into the higher-power 200 kW KARNO Power Module slated for market launch. These advancements include improved helium gas bearings for greater durability, a magnetic encoder for precise shaft position detection and optimized printed components to increase KARNO Core power, efficiency and manufacturing speed. The 200 kW KARNO Core also incorporates a larger Hyliion-designed linear electric motor.
Current wording
Early development efforts focused on a KARNO Core that was designed for 125kW of power production, which was operated at our Ohio facility and served as a platform for extensive testing and technology advancement. Through this system, we validated the ability of the KARNO Core's fuel oxidation system to successfully operate on gaseous fuel. Testing also demonstrated very low levels of pollutant emissions. The 125 kW system enabled the development and validation of key components incorporated into the higher power 200 kW KARNO Power Module, including improved helium gas bearings for greater durability, a magnetic encoder for precise shaft position detection, optimized printed components to improve power, efficiency and manufacturing speed, and a larger Hyliion designed linear electric motor.
Previous wording
We have completed the design and sourcing of initial components for the balance-of-plant systems that support KARNO Core operation for the 200 kW system, incl uding the system enclosure. The balance-of-plant includes cooling, pressure control, fuel, battery, high and low voltage, inlet air and exhaust systems. Development work also includes control software, safety systems, the human-to-machine interface and the physical integration of systems. Validation of essential operating parameters, including efficiency, emissions and reliability, are also part of R&D activities.
Current wording
We have completed the design and sourcing of initial components for the balance of plant systems supporting the 200 kW KARNO Core, including the system enclosure, cooling, pressure control, fuel, battery, electrical, inlet air and exhaust systems. Development activities also include control software, safety systems, the human to machine interface and integration of these components into a complete generating system.
Previous wording
In 2025, key R&D activities included design enhancements to the regenerator, a critical printed component that functions as a thermal capacitor by storing heat as helium cycles between hot and cold temperature regions within the system. The regenerator is a critical component needed to achieve the KARNO Power Module’s target power and overall system efficiency. Early testing identified opportunities to improve the regenerator’s heat storage and transfer capability, leading to a redesigned architecture that has demonstrated improved performance during subsequent testing. Additional design enhancements were also made to improve the thermal insulation of other system components, further reducing heat loss. Development efforts continue to focus on optimizing the regenerator and related components, with the objective of converting more thermal energy into electrical output, thereby increasing both power output and overall system efficiency.
Current wording
In 2025, key R&D activities included enhancements to the regenerator, a critical printed component that functions as a thermal capacitor by storing heat as helium cycles between hot and cold temperature regions within the system. Early testing identified opportunities to improve the regenerator’s heat storage and transfer capabilities, leading to a redesigned architecture that demonstrated improved performance in subsequent testing. Additional design enhancements improved thermal insulation of other system components to reduce heat losses. Further optimization of the regenerator and thermal insulation remains an important development objective as we work to increase power output and overall system efficiency.
Previous wording
In 2025, we delivered two early adopter KARNO Power Modules to the U.S. Navy, along with two additional units for internal testing and Underwriters Laboratories (“UL”) certification. The Navy units are currently undergoing testing under our R&D contract with ONR and are performing in line with expectations. We have also completed development work enabling the Navy Power Modules to operate on liquid diesel fuel, a key requirement for shipboard applications, and to seamlessly switch between liquid and gaseous fuels under operation. We believe that initial KARNO Power Module deployments, along with our ongoing testing and development efforts, will validate critical design specifications, including projected operating life, maintenance requirements and durability.
Current wording
In 2025, we delivered two early adopter KARNO Power Modules to the U.S. Navy, along with two additional units for internal testing and Underwriters Laboratories (“UL”) certification. The Navy units previously underwent testing at our Ohio facility under our R&D contract with the Office of Naval Research (“ONR”) and performed in line with expectations. We also completed development work enabling these Power Modules to operate on liquid diesel fuel, a key requirement for shipboard applications, and to seamlessly switch between liquid and gaseous fuels during operation.
Previous wording
In 2026, R&D activities have focused on testing and validating KARNO Power Module operation and software controls while building additional units for early adopter customers for field testing, including the U.S. Navy. We project that we remain on track to complete approximately 10 early adopter units during 2026. To date, testing of both engineering development units and customer units has been conducted at our Ohio facility, allowing engineers to closely monitor system operation and rapidly incorporate design enhancements intended to improve performance and reliability. Later in 2026, these initial units are expected to be deployed to customer sites, where they will undergo continued testing and validation while simultaneously operating in their intended commercial environments.
Current wording
In 2026, our development activities focused on testing and validating KARNO Power Module operation and software controls while producing additional units for early adopter customers. Testing of engineering development and customer units has been conducted at our Ohio facility, allowing engineers to closely monitor system performance and rapidly incorporate design enhancements intended to improve reliability.
Previous wording
In the second quarter, we successfully completed the non-recurring portion of Underwriters Laboratories ("UL") certification testing for the KARNO Power Module, a key milestone required before delivering units to customer sites. Testing included the linear electric motor, battery system, and complete Power Module. Individual production units will continue to undergo final operational testing before receiving final UL certification until completion of facility level certification, which is expected in the coming months.
Current wording
Earlier in 2026, we successfully completed the nonrecurring portion of UL certification testing for the KARNO Power Module, a key milestone required before delivering units to customer sites. Testing included the linear electric motor, battery system and complete Power Module. Individual production units will continue to undergo final operational testing before receiving final UL certification until completion of facility level certification, which is expected in 2027.
Previous wording
Recent accomplishments include the successful demonstration of uninterrupted operation while switching among hydrogen, natural gas, and diesel fuels, validating the system's fuel agnostic architecture in which both gaseous and liquid fuels are supported within a single integrated system rather than through separate hardware configurations. Following this milestone, we began extended durability testing of the complete KARNO Power Module using diesel as the primary fuel source.
Current wording
Recent development accomplishments include the successful demonstration of uninterrupted operation of the reactor while switching among hydrogen, natural gas and diesel fuels. This validates the system's fuel agnostic architecture, which supports both gaseous and liquid fuels within a single integrated system rather than through separate hardware configurations. This reactor design will go through validation and then be integrated into the KARNO Core.
Previous wording
We also successfully demonstrated the operation of multiple Power Modules as a single coordinated generating system. During testing, two 200 kW units automatically shared changing electrical loads while maintaining stable power delivery. This capability is important for applications with variable electrical demand and supports development of a standardized 800 kW building block for future multi megawatt power plant configurations.
Current wording
We also successfully demonstrated the coordinated operation of multiple Power Modules as a single generating system. During testing, two 200 kW units automatically shared changing electrical loads while maintaining stable power delivery. This capability is important for applications with variable electrical demand and supports development of a standardized 800 kW building block for future multi megawatt power plant configurations.
Previous wording
Development also continues on design enhancements intended to increase the generator's power output and efficiency toward design specifications. These efforts include further optimization of the regenerator to increase its thermal storage capacity during operating cycles, as well as improvements to the thermal insulation of other system components to further reduce heat losses.
Current wording
Development efforts also continue to focus on increasing generator power output and efficiency toward design specifications. These activities include further optimization of the regenerator to increase thermal storage capacity during operating cycles and improvements to thermal insulation to reduce heat losses. Finally, during the fourth quarter of 2026, we expect to begin extended durability testing of the complete KARNO Power Module using diesel as the primary fuel source.
Previous wording
Another major R&D objective in 2026 has been optimizing the throughput of our additive manufacturing fleet. Following the acquisition of approximately two dozen additive printers over the past two years, we have focused on increasing printer speed and throughput while simultaneously optimizing the design of printed Power Module components for manufacturability and performance. We are encouraged by the progress to date and have identified machine enhancements that we believe can increase print speeds by a factor of two to three, depending on the specific part and printer model. Based on these expected improvements, together with anticipated technological advances in next generation additive manufacturing systems expected to become available in the coming quarters, we currently expect to accelerate planned purchases of additional printers from 2028 into 2027. Additional testing and validation remain necessary before these improvements can be confirmed, but initial results have been encouraging.
Current wording
We have identified machine enhancements that we believe can increase print speeds by a factor of two to three, depending on the specific part and printer model. Based on these expected improvements, together with anticipated advances in next generation additive manufacturing systems expected to become available in the coming quarters, we currently expect to accelerate planned purchases of additional printers from 2028 into 2027. Additional testing and validation remain necessary before these improvements can be confirmed, but initial results have been encouraging.
Previous wording
We provide R&D services to third parties, including the ONR. In September 2024, Hyliion was awarded a cost-plus-fixed-fee contract of up to $16.0 million by the ONR to assess the suitability of the KARNO Power Module for Navy vessels and stationary power applications. The contract aligns with ONR’s objective of leveraging advanced technology to reduce its carbon footprint while enhancing operating capabilities. Upon successful validation and demonstration, the KARNO Power Module could be used as an electric power system in future platforms and for stationary power needs. In 2025, we delivered two KARNO Cores under this contract which we have been testing at our R&D facility in Cincinnati. In 2026, we expect to deliver additional KARNO Cores, including a four-core 800 kW KARNO Power Module system. The U.S. Navy has identified its USX-1 Defiant vessel as the platform for KARNO Core sea trials, supporting both ship propulsion and auxiliary power. The 800 kW KARNO Power Module being built for the vessel under this contract is in assembly, with completion expected during 2026. We will also expand testing to include long duration operation, diesel fuel integration, simulation of ship motion and the ability of the system to operate in extreme temperature environments.
Current wording
In 2025, we delivered two KARNO Cores under this contract and an additional core in 2026, all of which we have been testing at our R&D facility in Cincinnati. In early 2027, we expect to deliver a four-core 800 kW KARNO Power Module system, which aligns with the Navy's schedule. The U.S. Navy has identified its USX-1 Defiant vessel as the platform for KARNO Core sea trials, supporting both ship propulsion and auxiliary power. We also plan to expand testing to include long duration operation, diesel fuel integration, simulation of ship motion and the ability of the system to operate in extreme temperature environments. Upon successful validation and demonstration, the KARNO Power Module could be used in future Navy platforms and for stationary power applications.
Previous wording
We will continue to provide R&D services to third parties under existing contracts and anticipate entering into additional R&D agreements in 2026 and 2027 with ONR and other government customers. Customers engage Hyliion to explore and validate the KARNO Power Module’s capabilities tailored to their specific requirements. Key areas of interest include testing its low-emissions flameless oxidation system and evaluating applications that leverage the KARNO Power Module’s high power output, compact configuration and versatility, including the ability to easily transition between fuels. R&D services may also involve testing the KARNO Power Module under various operating conditions, including harsh environments, and in mobile applications to assess its performance. Certain customers seek to measure and validate the KARNO Power Module’s low emissions profile and test different power configurations to ensure the technology aligns with their operational and environmental needs.
Current wording
We expect to continue to provide R&D services under existing contracts and anticipate entering into additional R&D agreements in 2026 and 2027 with ONR and other government customers. These customers engage Hyliion to explore and validate KARNO technology for their specific applications and operating requirements. Areas of interest include the system’s low-emissions flameless oxidation system, high power output, compact configuration and ability to operate on multiple fuels. R&D services may also include testing under harsh environmental conditions, evaluating mobile applications and validating different power configurations to determine their suitability for customer requirements.
Previous wording
Cost of revenue includes costs associated with R&D services revenue, such as direct costs, including labor and materials, and applicable overhead costs.
Current wording
Cost of revenue includes costs associated with R&D services revenue, such as direct costs, including labor, materials and equipment, and applicable overhead costs.
Previous wording
Revenue for R&D services increased $3.4 million and associated cost of revenues increased $3.2 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $5.7 million as of June 30, 2026. We may incur losses in the performance of these contracts.
Current wording
Revenue for R&D services increased $6.7 million and associated cost of revenues increased $6.1 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.
Previous wording
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We expect to begin performance on this contract in the fourth quarter of 2026, increasing performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Current wording
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Previous wording
Interest income decreased $0.8 million primarily due to the decline in our investment balance.
Current wording
Interest income decreased $0.6 million primarily due to the decline in our investment balance.
Previous wording
The following table summarizes our results of operations on a consolidated basis for the six months ended June 30, 2026 (the “current six months”) and 2025 (in thousands, except share and per share data):
Current wording
The following table summarizes our results of operations on a consolidated basis for the nine months ended September 30, 2026 (the “current nine months”) and 2025 (in thousands, except share and per share data):
Previous wording
Revenue for R&D services increased $5.8 million and associated cost of revenues increased $5.3 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $5.7 million as of June 30, 2026. We may incur losses in the performance of these contracts.
Current wording
Revenue for R&D services increased $12.5 million and associated cost of revenues increased $11.4 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.
Previous wording
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We expect to begin performance on this contract in the fourth quarter of 2026, increasing performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Current wording
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Previous wording
R&D expenses decreased $5.2 million due to significant efforts toward performance of our contracts with the ONR, including the production of capitalized inventory that may either be utilized for future revenue generation under these contracts or for R&D activities.
Current wording
R&D expenses decreased $6.6 million due to significant efforts toward performance of our contracts with the ONR, including the production of capitalized inventory that may either be utilized for future revenue generation under these contracts or for R&D activities.
Previous wording
Interest income decreased $1.8 million primarily due to the decline in our investment balance.
Current wording
Interest income decreased $2.4 million primarily due to the decline in our investment balance.
Previous wording
At June 30, 2026, our total current assets were $71.6 million, consisting primarily of cash and cash equivalents of $13.2 million, short-term investments of $51.0 million, accounts receivable of$2.7 million and prepaid expenses of $3.6 million. Our total current liabilities were $9.4 million and were primarily comprised of accounts payable, accrued expenses and operating lease liabilities. We also had $68.2 million of investments in longer-term liquid securities which we maintain to generate higher income on capital that we do not expect to spend in the next 12 months.
Current wording
At September 30, 2026, our total current assets were $67.3 million, consisting primarily of cash and cash equivalents of $16.7 million, short-term investments of $37.9 million, accounts receivable of$6.6 million and prepaid expenses of $5.3 million. Our total current liabilities were $8.6 million and were primarily comprised of accounts payable, accrued expenses and operating lease liabilities. We also had $66.7 million of investments in longer-term liquid securities which we maintain to generate higher income on capital that we do not expect to spend in the next 12 months.
Previous wording
Based on our past performance, we believe our current and long-term assets will be sufficient to continue to execute on our business strategy and meet our capital requirements for the next twelve months. Our primary short-term cash needs are costs associated with KARNO Power Module development, building our initial deployment units and capital investments for additive printer acquisitions and other assets. Longer term, our capital needs will be determined by our go-to-market strategy as well as governmental R&D, which may include development of our own KARNO Power Module manufacturing capacity or outsourcing this work to third parties or business partners. We have up to $6.1 million remaining authorized for repurchases under our $20 million share repurchase program but have currently paused any additional repurchases. Based on current projections of operating expenses, capital spending, working capital growth and historical share repurchases, we expect to have approximately $115 million to $120 million in cash, short-term and long-term investments remaining on our balance sheet at the end of 2026. This projection assumes the completion of approximately $10 million to $15 million of equipment financing during 2026 under the proposed arrangement described below, and does not assume any sales of common stock under our at-the-market offering program. The equipment financing remains subject to credit approval and agreement execution, and the amount and timing of any fundings will depend on equipment delivery and acceptance. The financing may be delayed, completed for a lesser amount, or not completed at all.
Current wording
Based on our past performance, we believe our current and long-term assets will be sufficient to continue to execute on our business strategy and meet our capital requirements for the next twelve months. Our primary short-term cash needs are costs associated with KARNO Power Module development, building our initial deployment units and capital investments for additive printer acquisitions and other assets. Longer term, our capital needs will be determined by our go-to-market strategy as well as governmental R&D, which may include development of our own KARNO Power Module manufacturing capacity or outsourcing this work to third parties or business partners. We have up to $6.1 million remaining authorized for repurchases under our $20 million share repurchase program but have currently paused any additional repurchases.
Previous wording
In August 2026, we entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which we may sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $100 million. We are not obligated to sell any shares under the program, and any sales will depend on market conditions, our capital needs and other factors. Sales under the program, if any, would provide an additional source of liquidity to accelerate investments in assets needed for growth following commercialization, primarily additive printing machines and related assets, and would be dilutive to existing stockholders. We expect to use the ATM program opportunistically based on our capital requirements, and market conditions. Sales of shares under the program, if any, may cause dilution to stockholders. For additional information, see “Part II—Item 5. Other Information—At-the-Market Offering Program.”
Current wording
In August 2026, we entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which we may sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $100 million. We are not obligated to sell any shares under the program, and any sales will depend on market conditions, our capital needs and other factors. Sales under the program, if any, would provide an additional source of liquidity to accelerate investments in assets needed for growth following commercialization, primarily additive printing machines and related assets. Sales of shares under the program, if any, may cause dilution to stockholders. For additional information, see “At-the-Market Offering Program” in Note 9 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
Previous wording
The amount and timing of our future funding requirements will depend on many factors, including the scope and results of our R&D efforts, the breadth of product offerings we plan to commercialize, the growth of sales, working capital needs, and our long-term manufacturing plan for the KARNO Power Module, including the pace of investments in additive manufacturing assets and the methods of financing those investments, as well as factors that are outside of our control. We regularly evaluate our funding needs and sources of capital and may seek external funding in the appropriate circumstances. While we believe that we have sufficient capital to support the anticipated commercialization of the KARNO Power Module, we do anticipate that, at some time, we will seek further capital to accelerate these growth investments, whether through sales under our at-the-market program or other financing sources. Any such financing may include equity or debt securities and may not be available on acceptable terms, or at all. With our current cash and investments, we believe we are well positioned to be deliberate and opportunistic in determining the timing and structure of any additional capital raise.
Current wording
The amount and timing of our future funding requirements will depend on many factors, including the scope and results of our R&D efforts, the breadth of product offerings we plan to commercialize, the growth of sales, working capital needs, and our long-term manufacturing plan for the KARNO Power Module, including the pace of investments in additive manufacturing assets and the methods of financing those investments, as well as factors that are outside of our control. We regularly evaluate our funding needs and sources of capital and may seek external funding in the appropriate circumstances. While we believe that we have sufficient capital to support the anticipated commercialization of the KARNO Power Module, we expect to seek additional capital in the future to accelerate investments in production capacity. Potential sources include sales under our at-the-market program, other financing arrangements, and direct investments by customers in production assets dedicated to producing KARNO Power Modules for their purchase. Any such financing may include equity or debt securities and may not be available on acceptable terms, or at all. With our current cash and investments, we believe we are well positioned to be deliberate and opportunistic in determining the timing and structure of any additional capital raise.
Previous wording
Net cash, cash equivalents and restricted cash provided by or used in operating activities, investing activities and financing activities for the six months ended June 30, 2026 and 2025 is summarized as follows (in thousands):
Current wording
Net cash, cash equivalents and restricted cash provided by or used in operating activities, investing activities and financing activities for the nine months ended September 30, 2026 and 2025 is summarized as follows (in thousands):
Previous wording
For the six months ended June 30, 2026, cash flows used in operating activities were $19.8 million. Cash used primarily related to a net loss of $25.7 million, adjusted for a $1.7 million change in working capital accounts and $7.6 million in non-cash expenses (including $3.2 million related to share-based compensation, $4.2 million related to depreciation and amortization, $1.3 million related to prepaid expenses and other current assets, and $1.6 million related to accounts payable, accrued expenses and other current liabilities, partially offset by $2.2 million related to accounts receivable and $1.2 million related to inventory).
Current wording
For the nine months ended September 30, 2026, cash flows used in operating activities were $30.3 million. Cash used primarily related to a net loss of $36.7 million, adjusted for a $6.0 million change in working capital accounts and $12.4 million in non-cash expenses (including $4.8 million related to share-based compensation, $6.0 million related to depreciation and amortization, $1.2 million related to property and equipment deposits applied to cost of revenues, $1.0 million related to prepaid expenses and other current assets, and $1.8 million related to accounts payable, accrued expenses and other current liabilities, partially offset by $6.1 million related to accounts receivable and $0.7 million related to inventory).
Previous wording
For the six months ended June 30, 2025, cash flows used in operating activities were $24.0 million. Cash used primarily related to a net loss of $30.7 million, adjusted for a $0.6 million change in working capital accounts and $6.1 million in non-cash expenses (including $2.7 million related to share-based compensation, $2.4 million related to depreciation and amortization, $1.9 million related to prepaid expenses and other current assets, and $1.6 million in assets held for sale carrying value adjustments, partially offset by $0.9 million related to accounts payable, accrued expenses and other liabilities and $0.6 million related to gain on asset sales).
Current wording
For the nine months ended September 30, 2025, cash flows used in operating activities were $34.7 million. Cash used primarily related to a net loss of $44.0 million, adjusted for a $0.1 million change in working capital accounts and $9.2 million in non-cash expenses (including $4.1 million related to share-based compensation, $4.1 million related to depreciation and amortization, $2.5 million related to prepaid expenses and other current assets, and $1.6 million in assets held for sale carrying value adjustments, partially offset by $1.8 million related to accounts payable, accrued expenses and other liabilities and $0.7 million related to gain on asset sales).
Previous wording
For the six months ended June 30, 2025, cash flows provided by investing activities were $30.9 million. Cash provided related to the sale or maturity of investments of $60.0 million and the proceeds from sale of assets of $0.8 million, offset by the purchase of investments of $18.4 million and acquired property and equipment of $11.6 million.
Current wording
For the nine months ended September 30, 2026, cash flows provided by investing activities were $24.4 million. Cash provided related to the sale or maturity of investments of $74.5 million and the proceeds from sale of assets of $1.9 million, offset by the purchase of investments of $49.6 million and acquired property and equipment of $2.4 million. We further recorded a $1.2 million reduction of property and equipment as a result of non-cash vendor tariff credits received for use against future purchases.
Previous wording
For the six months ended June 30, 2026, cash flows provided by investing activities were $10.0 million. Cash provided related to the sale or maturity of investments of $45.0 million and the proceeds from sale of assets of $1.9 million, offset by the purchase of investments of $34.7 million and acquired property and equipment of $2.1 million.
Current wording
For the nine months ended September 30, 2025, cash flows provided by investing activities were $43.9 million. Cash provided related to the sale or maturity of investments of $101.0 million and the proceeds from sale of assets of $1.2 million, offset by the purchase of investments of $36.3 million and acquired property and equipment of $22.0 million.
Previous wording
For the six months ended June 30, 2025, cash flows used in financing activities were $0.5 million, primarily due to taxes paid related to the net share settlement of equity awards.
Current wording
For the nine months ended September 30, 2025, cash flows used in financing activities were $0.6 million, primarily due to taxes paid related to the net share settlement of equity awards.
Previous wording
The Company granted 2.3 million restricted stock units in the six months ended June 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through June 30, 2026, there was no achievement of underlying closing stock price thresholds on these awards. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105% and a risk-free rate of 3.48%.
Current wording
The Company granted 2.3 million restricted stock units in the nine months ended September 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 25% of these awards which will vest December 31, 2028. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105% and a risk-free rate of 3.48%.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Another major R&D objective in 2026 has been improving the throughput of our additive manufacturing fleet. Following the acquisition of approximately two dozen additive printers over the past two years, we have focused on increasing printer speed and throughput while optimizing the design of printed Power Module components for manufacturability and performance.
Current report — wording carried from elsewhere
We provide R&D services to third parties, including the ONR. In September 2024, Hyliion was awarded a cost-plus-fixed-fee contract of up to $16.0 million by the ONR to assess the suitability of the KARNO Power Module for Navy vessels and stationary power applications. In September 2026, the contract was modified to increase its value to $21.6 million to fund completion of the remaining deliverables, including an option of up to $2.5 million that the ONR may exercise in the future. The contract supports ONR’s objective of leveraging advanced technology to reduce its carbon footprint while enhancing operating capabilities.
Current report — wording carried from elsewhere
Based on current projections of operating expenses, capital spending, working capital growth and historical share repurchases, we expect to have approximately $115 million to $120 million in cash, short-term and long-term investments remaining on our balance sheet at the end of 2026. This projection does not assume any sales of common stock under our at-the-market offering program, and we do not plan to proceed with the equipment financing arrangement described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We may evaluate equipment financing or other debt arrangements in the future.
Current report — wording carried from elsewhere
Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 20% of restricted stock units granted in 2025 which will vest between September 2027 and December 2027.