I would now like to turn the conference over to Kate Igbalode, Senior VP and Ballard's CFO. Please go ahead.
Thank you, operator, and good morning. My name is Kate Igbalode, CFO of Ballard. During today's call, we will be making forward-looking statements based on management's current expectations, beliefs, and assumptions concerning future events. Actual results could differ materially. Please refer to our most recent annual information form and other public filings for our complete disclaimer and related information.
Good morning, everyone, and thank you for joining us today. My name is Marty Neese, President and CEO of Ballard Power Systems, and I'm pleased to be here to discuss what I believe is a truly transformative day for Ballard. This morning, we announced that Ballard has entered into a definitive agreement to acquire GeoPura, a leading provider of zero-emission hydrogen energy solutions based in the United Kingdom. This is a pivotal moment for our company, and I look forward to walking you through the strategic rationale, the details of the business, and why we believe this combination creates significant long-term value for our shareholders. In addition to Kate, I'm also joined today by Andrew Cunningham, founder and CEO of GeoPura. Andrew has been a partner of Ballard since GeoPura's founding in 2019, and his leadership will be a tremendous addition to our team.
Over the past several quarters, we have outlined a clear path to build a more profitable and scalable Ballard, grow revenue, expand margins, and broaden our addressable markets while maintaining financial discipline. The acquisition of GeoPura accelerates that strategy by extending Ballard beyond fuel cell components and into delivered power solution provider. This transaction solves three critical challenges by removing adoption friction through seamless hydrogen access, providing a customer-ready, cost-competitive, stationary power solution, and laying out a pathway to high revenue growth and margin expansion. GeoPura has built capabilities across hydrogen production, logistics, and stationary power delivery through its hydrogen power units, or HPUs. By combining those capabilities with Ballard's fuel cell platform, we gain direct entry into stationary power, improve value capture, unlock growth, and reduce a key barrier to adoption, access to hydrogen.
Ballard has agreed to acquire GeoPura for GBP 275 million in upfront consideration and up to GBP 27.5 million in potential earn-outs. We've structured the transaction using a combination of stock and cash, enabling GeoPura shareholders to become Ballard shareholders while preserving our balance sheet strength. The acquisition is subject to customary approvals and expected to close in the second half of 2026. We've partnered with GeoPura since 2019, and we're confident that the people, assets, and technology add significant strategic and economic value to Ballard. At a high level, this transaction strengthens Ballard in four ways: faster growth, greater value capture, a significantly larger addressable market, and economics that already work today. We summarize that as three, five, 10 now. Three, GeoPura's high growth business accelerates our combined trajectory with an expected 3x revenue growth rate.
Five, by bundling the ecosystem upstream and downstream of the core hydrogen fuel cell technology, we expand our dollar value per megawatt capture by five times. 10, Ballard's total addressable market, currently focused on heavy-duty mobility markets, is expected to grow by 10 times. Through GeoPura's technology, a proven one-for-one diesel genset replacement, and hydrogen ecosystem capabilities, we open up the diesel genset market, the stationary and data center backup power market, and hydrogen sales across our portfolio. GeoPura's HPUs have reached diesel parity today. By leveraging our synergies, vertically integrating, and harnessing the hydrogen value chain, we win on pure economics. Too often, the options available to customers are either clean or economical. We achieve both by delivering operational, economic, and environmental value to our customers. This is a critical unlock to displacing incumbent technology and driving growth.
In short, the combination improves our growth rate, expands our share of value across the offering, opens materially larger markets, and does so with a solution that is already commercially viable. Let me now walk through the strategic logic for the combination. First, it improves our financial profile by adding a higher growth business with recurring revenue characteristics and a cleaner path to scale economics. Second, the combination moves Ballard closer to the customer by expanding our role from component supplier to solution provider with recurring touch points through equipment, fuel, and service. Third, it gives Ballard immediate exposure to stationary power through a proven product already operating in demanding customer environments across multiple countries. Fourth, it expands our addressable market meaningfully, especially in stationary applications where customer demand is increasing and regulatory support is improving. Finally, we know this business well.
Our long-standing partnership with GeoPura gives us confidence in the team, the product, and the execution plan. With that, let me turn it over to Andrew to provide an overview of GeoPura and the business he and his team have built.
Thank you, Marty. I am delighted to be here today and to be joining the Ballard team. We founded GeoPura in 2019 with a clear mission: to provide zero emission power that can be deployed wherever and whenever it is needed. We design, manufacture, and operate HPUs that convert hydrogen into clean electricity with proven responsiveness. We are vertically integrated across the hydrogen value chain, from molecule to megawatt. To date, we have delivered over 300 tons of green hydrogen using the largest hydrogen distribution fleet in the U.K., which feeds more than 60 HPUs, which are deployed directly to customers under a recurring revenue model. In partnership with Siemens Energy, we manufacture HPUs, which are powered by Ballard fuel cells.
These HPUs have customers across a large and growing addressable market in various industries, including construction, film and television, events, and data centers, where they have accumulated over 24 years' worth of operating hours. I want to spend a moment on where our HPUs are deployed today, because this is not a pilot stage technology. We have amassed over 200,000 hours of in-service operation with blue chip customers across demanding real world environments. We have powered the filming of over 70 major film and television productions, supplied hydrogen to the Lower Thames Crossing, Europe's largest construction project, and delivered live broadcast power to the BMW PGA Championship, on a number of occasions. These are customers who require consistent, reliable performance, and we have delivered. This track record spans industries facing distinct but complementary tailwinds. In construction and events, regulatory pressure is creating immediate demand for diesel alternatives.
In film and television, noise levels, air quality, and uninterrupted reliability are non-negotiable. Transportation and EV charging require supplementary on-site generation. Healthcare facilities need permanent backup power for new builds constrained by grid availability. Defense applications benefit from hydrogen's operational resilience. Lastly, data centers represent a transformative opportunity. Grid constraints require on-site backup and peak power. HPUs present the right solution for all of the above. While the decarbonization benefits of HPUs are real, our customers are also choosing us for the performance, logistics, and energy resilience advantages over diesel with economics that make sense. They are buying a better product, not just a cleaner one. That is what gives me confidence in the pace of adoption as we scale together with Ballard. In total, we are projecting approximately £38 million in revenue for calendar year 2026.
What excites me most is the ability to scale what we have already built together faster and into markets neither of us could address as effectively alone. Ballard and GeoPura's offerings, while rooted in the same leading fuel cell technology, tackle different use cases. Where Ballard has created a replacement for a diesel engine across heavy duty mobility, GeoPura's HPUs function as drop-in diesel genset substitutes requiring no change to how customers procure power. GeoPura's product suite spans the full operating range from the new Agile H, a compact and highly portable 80-kW unit suited to smaller scale deployments, to the HPU, the original 250-kW system that proves the model, through to the HPU2, the primary growth driver with over 500 kW per unit, scalable to 50 MW for temporary and permanent mission-critical power. These products capture over 70% of the genset market today. The customer value proposition is clear.
Zero emissions meeting the most stringent regulations, significantly lower noise, six nines of uptime for mission-critical confidence, simple refueling, modular scalability, and frictionless implementation as a drop-in genset replacement. HPUs already achieve a long-term cost advantage in the U.K. versus diesel, with total weekly operating costs equivalent or below an equivalent diesel Stage V generator when accounting for fuel, carbon, and emissions charges. With that, I'll turn it over to Kate.
Thanks, Andrew. Let me now explain why the broader hydrogen value chain matters to our growth. Historically, Ballard has participated primarily at the fuel cell levels. With GeoPura, we add capabilities on either side of that core technology. Upstream, we gain capabilities in hydrogen production. GeoPura currently produces 15 MW of hydrogen at High Marnham and additional volume at other U.K. sites. This ensures a reliable and cost-competitive source of hydrogen for customers. This is also supported by the strong regulatory structure of the U.K. HAR program. There is significant capital-efficient expansion potential up to 930 MW at High Marnham, along with other sites currently being contracted. Midstream, to maintain uninterruptible performance, GeoPura manages the U.K.'s largest hydrogen logistics fleet for compressed hydrogen refueling, which supports seamless HPU operation across the U.K. and Ireland. Downstream, hydrogen is converted into power through the HPU portfolio.
The hydrogen is produced and delivered to the same integrated platform, all of which is supported by GeoPura's after-sales teams and 24/7 remote operating center. Each step of this value chain generates revenue and margin and delivers a highly reliable bundled power offering to customers. This matters because the lack of hydrogen availability at a competitive delivery cost remains an adoption constraint in the market today. The ability to have a greater control of the supply and logistics allows us to offer customers a more complete and dependable solution. The result is a business that participates in more of the value chain and can serve customers with a more integrated offering. All said, we expect our addressable market to grow by a factor of 10. We estimate the annual data center backup power opportunity in our target market at $4 billion U.S., based on today's diesel pricing.
Annual new backup demand is expected to grow at 18%, reaching approximately 24 GW by 2030. Grid constraints limit when new facilities come online, and there are also increasingly stringent regulatory hurdles to overcome, and major operators have made decarbonization commitments requiring diesel alternatives. HPUs meet these challenges and are able to serve the full backup spectrum, short duration instant-on through extended outages, plus dynamic grid services during peak demand. GeoPura has completed successful pilots with industry leaders, including Equinix and Microsoft, with whom GeoPura has enjoyed a fruitful partnership thus far. On Friday last week, GeoPura and Equinix announced the successful completion of their 12-week HPU pilot at their DB3 data center outside of Dublin, Ireland. The HPUs, also fueled by GeoPura, powered critical systems in a live environment, a first for Equinix globally.
The HPUs provide a direct alternative to traditional diesel or gas generators, with uninterruptible power supply and real-time response to grid capacity changes. Moving to the genset market, we estimate the annual revenue opportunity for HPU penetration in diesel genset replacement at approximately $16 billion U.S. in our target market, excluding data centers. Up to 105,000 new genset units on an install base of over 30 million units are anticipated every year through 2030. Lastly, the third vector of TAM growth is hydrogen supply. We estimate the market for green hydrogen across mobility and stationary applications to be an additional approximately CAD 20 billion annually in the U.K., Europe, and North America. As we've highlighted already, an important outcome of this acquisition is that Ballard will be able to capture a larger share of each deployed megawatt.
As a standalone fuel cell supplier, we participate in only one piece of the economics. With GeoPura, we add exposure to hydrogen supply, logistics, and direct-to-consumer equipment capabilities. Broader participation creates more revenue opportunities while also improving our ability to lower delivered costs for our customers. It also gives us more leverage to improve margins over time through scale, product optimization, and vertical integration. We expect these opportunities to result in approximately $25 million U.S. of annual EBITDA synergies by 2028. From hydrogen production expansion to higher HPU deployment volumes to internal fuel cell demand, each link of this chain can reinforce the others as the business scales. We also see opportunities to extend this model geographically, particularly in North America and Western Europe, and to apply hydrogen capabilities more broadly across our portfolio.
In short, greater value chain participation supports both stronger economics for Ballard and a more competitive total cost proposition for our customers. With that, pardon me. Lastly, this transaction also changes the shape of Ballard's revenue mix by adding recurring streams from HPU leasing, hydrogen supply, and service alongside equipment sales. That shift matters for three reasons. First, it broadens and stabilizes our growth profile. Second, it supports better margin potential as the install base grows. Third, it improves earnings quality by increasing the proportion of revenue that repeats over time. Taken together, this gives Ballard a more resilient business model with stronger visibility as we scale. I'll hand it back to Marty to wrap things up.
Thanks, Kate. To conclude, this acquisition strengthens Ballard strategically and financially. It adds a proven stationary power platform, increases recurring revenue exposure, expands our market opportunity, unlocks the hydrogen ecosystem, and is structured to preserve balance sheet flexibility. Just as importantly, we are moving forward with a business we know well and with a strong cultural alignment. As we integrate our teams, we are excited to welcome Andrew into Ballard as a President, working alongside me as CEO. Andrew will play a critical role in converting our joint technology into enterprise growth. Additionally, Ballard will be appointing Andrew and Lord Richard Harrington to its board of directors upon transaction closing. Their specialized skill sets will support our company through its next phase of transformation. Our history with GeoPura gives us confidence in the team, the technology, and the execution path ahead.
With that, I'll turn the call over to the operator for questions.
Thank you. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.
Good morning. Congratulations on a nice acquisition. Just wanted to follow up a little bit more on kind of the revenue model. Is it 100% kind of recurring revenue and how are the contracts structured in terms of duration? If you could give some color in kind of the business model would be helpful. Thank you.
Yeah. Maybe I can start and then Andrew can jump in and say a little bit more about how GeoPura has handled things on their end. As you know, traditionally, Ballard has been a CapEx sales business model. That means we would sell an engine directly to GeoPura. GeoPura would pay us for the CapEx, integrate the engine, and then they would use the fuel cell for various purposes. Once those modules or engines are integrated into an HPU, GeoPura has a number of pathways to turn that revenue into either recurring revenue from both fuel and power or as equipment sales. Maybe with that, Andy, you can talk a little bit about some of the different alternatives you've taken so far.
Sure. Thank you, Marty. The primary way that we obtain revenue is rental, which is something the market is very used to. We charge a rental rate or a lease rate, and then we charge for fuel on top of that, which is, I think, a traditional approach in the market. That doesn't mean that we don't sell units. It's a smaller proportion of what we do, but occasionally that suits a particular customer's way of operating. One particular customer, ESB in Ireland, they're the national generator, they're grid operator, they have bought units outright from GeoPura for their operations. Both work for us. The recurring revenue is an excellent model though.
I would add that there are additional capabilities, in some cases, to do multiyear contracts for long-term supply of both power and fuel, or fuel independently. Those have all been promulgated by GeoPura successfully to date.
Okay. Thank you. Then, just on the geographic expansion potential, I guess am I right to assume it's mostly a U.K. based business at this point and you can expand globally or maybe just a sense of the geographic footprint today and the opportunity?
Yeah. The majority of the relationships are directly in the U.K. and in the EU. GeoPura has a footprint in Denmark, as does Ballard. Between the U.K. and the EU, those are the principal go-to-market approaches today. There's clearly an opportunity to do more in North America and supplement the U.K. and EU markets.
Thank you. I'll turn it over.
Once again, if you have a question, please press star then one. The next question comes from Michael Glen with Raymond James. Please go ahead.
Hey. Just a few questions. Can you indicate what the last year revenue was for GeoPura and build maybe a bit of a bridge as to how you get from the last year revenue run rate to the GBP 38 million of revenue being projected this year?
Thanks, Michael, for the question. Kate, you want to take a shot at that?
Sure. We aren't at this point in time providing historical revenue details, but we will be as part of our required financial filings, and regulatory processes between now and closing until it's closed.
Okay. Looking at the GBP 38 million of revenue, can you give a breakdown as to what that would be for Energy-as-a-Service versus project sales?
The overwhelming majority would be a mixture of HPU leasing and rental, as well as fuel sales. As Andy pointed out, it's a pretty small proportion of the overall revenue mix that is actual equipment sales.
Okay. How do we sort of model this? In the presentation, you talk about six tons per day of hydrogen production capacity. How do we model that? Do we just assume a rate per kilogram for hydrogen? Is that kind of the best way to think about that?
Yeah, I think why don't we take that offline in terms of just more detailed modeling questions.
Okay. Then maybe my last question is, Marty, when you talked about the long-term accretion, can you just maybe shed some light on the determination of the multiple paid for the acquisition? Thank you.
Sorry, Michael, I didn't get the last part of that. Say the last part of the question again.
Yeah. You're paying a touch below 8x projected sales. I'm just interested in having some insights into how we assess the long-term earnings accretion from the acquisition and when you would expect the company to be, say, EBITDA positive.
Yeah. I think we can safely say that we're going to see like the three, five, 10 now model illuminates. We expect to see accelerated growth of 3x what Ballard has historically done, and then we're sticking with the same commitment that we've been putting out there for the last several quarters around getting to profitability by 2028.
Okay. Thank you.
This concludes the question and answer session. I would like to turn the conference back over to Marty Neese for any closing remarks. Please go ahead.
Thank you. At its core, this transaction is about accelerating hydrogen adoption by delivering a complete solution for customers. By combining Ballard's fuel cell leadership with GeoPura's hydrogen ecosystem capabilities, we're creating a stronger company with broader growth opportunities and a clear pathway to profitability. Thank you to the teams of both companies and to our shareholders. We look forward to providing a deeper look at our combined strategy and outlook at the Ballard Forum on October 22nd, later this year. Thank you very much.
This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day