Hello, everyone. Thank you for joining us. Welcome to the Hyliion Holdings Q4 2025 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Greg Standley, Chief Accounting Officer. Please go ahead.
Thank you, and good morning, everyone. Welcome to Hyliion Holdings Q4 2025 Earnings Conference Call. On today's call are Thomas Healy, our Chief Executive Officer, and Jon Panzer, our Chief Financial Officer. A slide presentation accompanying today's call is available on Hyliion's Investor Relations website at investors.hyliion.com. Please note that during today's call, we will be making certain forward-looking statements regarding the company's business outlook. Forward-looking statements or predictions, projections, and other statements about anticipated events that are based on current expectations and assumptions, as such, are subject to risk and uncertainties. Many factors could cause actual results to differ materially from forward-looking statements made on this call. For more information on those factors that may cause the company's results to differ materially from such forward-looking statements, please refer to our presentation and press release, as well as our filings with the Securities and Exchange Commission.
You are cautioned not to place undue reliance on forward-looking statements. We undertake no duty to update this information unless required by applicable law. With that, I will now turn the call over to Thomas.
Hello, thank you for joining us for Hyliion's Q4 and full year 2025.
Ladies and gentlemen, we are currently experiencing technical difficulties. Please stand by as we resolve the issue.
Hello, everyone, and apologies for the technical difficulties there. Thank you for joining us for Hyliion's Q4 and full year 2025 earnings call. Heading into 2026, we are positioned strongly to deploy more early adopter units and move towards commercialization. As we shared on our last call, the Karno Power Module is now performing at a level that meets our initial customer needs. On today's call, we'll provide more details on our early customer deployment plans and cover the current status of UL certification and product performance, demand we're seeing across commercial and military markets, and how we are preparing to scale production to support growth. Turning first to UL certification. We made significant progress during the quarter and are now nearing completion of this important milestone.
To provide additional context, UL certification for the KARNO Power Module occurs at three levels: the linear electric motor, the battery pack, and the full Power Module. I'm pleased to share that we have successfully completed UL testing for both the linear electric motor and the battery pack, meaning we have completed two of the three certifications we need. We have completed our initial round of testing on the full Power Module. Through that process, we identified several small refinements, including gasket updates to further strengthen water ingress protection and the opportunity to incorporate recent power output improvements. With those enhancements now underway, we plan to begin our next round of UL testing shortly and expect to complete the certification in the Q2 .
Overall, we are very encouraged by the progress and view UL certification for early adopter units as a near-term gating item towards delivering units to customer sites. Beyond certification progress, we now have five KARNO units at our facility: two development units and three early adopter customer units. These systems are being continuously exercised through a range of load profiles, extended duration testing, customer-specific operation scenarios, and military representative applications. As we shared last quarter, we achieved over 150 kW of power generation, which is sufficient for initial customer deployments. We have since demonstrated 175 kW of power production in testing following recent upgrades, and we expect to reach the full 200 kW design power rating by year-end as we transition into commercialization.
These improvements include refinements to the piston design and updates to cylinder liner material to enhance heat retention within the system. Importantly, we do not believe reaching the full rating will require any fundamental architecture changes, but rather a series of incremental optimizations across the platform. The steady progress we have made in the past couple of quarters reinforces our confidence in achieving the final 200 kW design specifications this year. One thing to note, we are still experiencing some technical difficulties, and we would ask that you please follow along on the slides that are posted on our website. Fuel flexibility continues to be a key differentiator of the KARNO system, and we made meaningful progress in this area during the quarter. We successfully demonstrated dynamic fuel switching with the KARNO power module transitioning between natural gas and propane.
The system can automatically switch between fuels without shutting down and without any user input to indicate which type of fuel is being utilized. We simply change the incoming fuel supply, and the unit continues to operate as designed, truly highlighting our unique fuel-agnostic capabilities. Another recent accomplishment was successfully running a KARNO Core on diesel fuel and being able to export power to the grid while meeting Tier 4 Final emissions requirements without the use of exhaust aftertreatment systems. We expect to begin incorporating diesel capability into customer-deployed systems this year. Diesel capability is particularly important for defense applications, where it remains the dominant fuel source. More broadly, the majority of installed generators worldwide operate on diesel, which significantly expands the KARNO Power Module's addressable market in mission-critical and prime power applications.
For example, many data centers prefer pipeline natural gas for prime power but still require on-site diesel for resiliency. We believe our ability to operate on both fuels will allow customers to avoid purchasing separate natural gas and diesel generators and instead rely on a single flexible platform for both primary and backup operation. I'd like to share our outlook for 2026, which can be seen on slide five. This includes our deployment plans, product development priorities, business development activity, and manufacturing capability. We are entering 2026 with strong demand across commercial, data center, and military markets. As previously shared, we have nearly 500 units under non-binding letters of intent, in addition to a broader set of customers actively evaluating the platform. The primary focus now is transitioning from development into real-world field deployments and moving towards commercialization and scaling.
From a development perspective, our overall plan remains consistent with what we have previously communicated. We expect to deploy approximately 10 early adopter units prior to commercialization, including the two units delivered to the Navy last year and a third unit that we recently completed, and that will go to a customer site following UL certification and product validation. Throughout 2026, we plan to deploy these systems into customers' environments and commercialization to follow later this year. One area where we are seeing particularly strong long-term interest is the data center market. With recent industry announcements pointing towards a shift to 800V DC architectures for next-generation AI facilities, we believe our KARNO technology is uniquely well-positioned.
Our platform already operates at 800V DC, which aligns directly with this emerging standard and has the potential to reduce conversion stages, lower equipment requirements, improve overall system reliability and efficiency, and simplify site electrical architectures. In 2026, we plan to demonstrate this capability in live environments to showcase this potential. Early this year, we successfully demonstrated a mission-representative Navy load profile on a Navy-owned KARNO asset. The system managed rapid load changes and sustained performance under high-stress operating conditions, reinforcing its suitability for shipboard and defense use. This was an important validation milestone and has accelerated discussions around additional defense platforms and with NASA, who is exploring coupling our KARNO technology with nuclear power generation.
We have identified several near-term opportunities across multiple branches of the military that are moving towards potential contract awards, which we expect to finalize this year. We believe these opportunities could represent $40 million-$50 million worth of new revenue opportunities on top of the approximately $20 million worth of contracts with ONR that we are currently executing on today. As part of our current Navy program, we plan to deliver additional KARNO Power Modules and KARNO Cores in 2026 for specialized shipboard testing. Once completed, these deliveries will represent about half of our early adopter units. One deliverable will be a multi-KARNO power module for the ship, demonstrating our ability to create high-power systems through coupling our 200 kW cores together.
Building on our work with the U.S. Navy, I'd like to provide an update on plans for a previously discussed 2-MW KARNO Power Module, which we believe aligns well with the needs for data center and other high-power applications. This can be found on slide six. In 2025, we spent significant time developing our multi-KARNO power module configuration for shipboard use. Through that effort, we identified substantial overlap between the U.S. Navy architecture and what is required for higher power commercial deployments. We have leveraged that design foundation to advance a modular, scalable configuration suitable for data center applications. Our initial concept was a 2-MW system comprised of 10 , 20O kW KARNO Cores integrated into a compact footprint, roughly the size of a 20-foot shipping container. Recent customer discussions have led us to evolve the configuration into a more flexible architecture.
The system is designed to scale in approximately 800 kW increments, allowing configurations such as 800 kW, 1.6 MW 2.4 MW, 3.2 MW, and so on. This modular approach aligns closely with feedback from data center customers, where power requirements vary depending on site electrical architectures. By enabling expansion through the addition of core sets, we can tailor output to specific customer needs while maintaining high power density and resiliency. Turning to slide seven. Moving on to our commercial customer deployments, we recently entered into a strategic partnership with ABM Industries to support the deployment of integrated distributed energy solutions. This collaboration, combined with KARNO technology, with ABM's site engineering, integration, and operational capabilities, helping simplify deployment and broader customer access across commercial, industrial, data center, and mission-critical applications.
ABM is also equipped to offer Energy-as-a-Service contracts with their customers. This partnership allows us to remain focused on advancing and commercializing the KARNO platform while leveraging an experienced partner to support end-to-end customer solutions. Turning to slide eight, where I'd like to provide a brief update on our manufacturing readiness. Today, we operate more than 30 additive manufacturing machines, the majority of which are located at our Austin facility. These printers span three different machine models with configurations that are able to produce one, two, or four parts at once. We expect to take delivery of several additional printers this year that we've had on order from last year. With these additions, we believe our additive manufacturing capability or capacity will be well positioned to meet planned production needs for 2026 and 2027, while providing a strong foundation for scaling further into 2028.
Our current focus is on maximizing the speed, power, and productivity of each machine. During the Q1 of 2026, we initiated efforts to improve printer throughput, and we'll be dedicating both printer time and engineering resources to these optimization initiatives throughout the year. In parallel, we plan to take delivery of and begin testing one or more printers equipped with the latest laser technology from GE Equilibrium, which we believe has the potential to further improve print speed and efficiency. On our last earnings call, we discussed the potential risk related to magnet supply, particularly given the export constraints from China. We are pleased to share that we have made meaningful progress in mitigating that risk and have already begun receiving components. While this does not fully eliminate supply chain risk, it substantially reduces our exposure and improves our confidence in supporting planned production. Turning to slide nine.
To wrap up, I'd like to share our key milestones for 2026, which are summarized on the slide, and highlight the achievements we expect to deliver over the course of the year. We began the year with an early win by successfully operating the KARNO Core on liquid fuel and meeting emissions requirements. Looking ahead, we expect to achieve UL certification for the early adopter KARNO Power Modules during the Q2 of this year, which will enable broader customer site deployments. In parallel, we expect to achieve the full 200 kW design power by the end of 2026. We also plan to complete the remaining early adopter units during the year.
These deployments are an important step towards validating system performance across real-world applications, and will support our plan to commercialize the 200 kW KARNO Power Module in late 2026, which will then allow us to begin scaling production. In addition, we expect to complete a multi-KARNO Core platform featuring the systems and controls required to coordinate multiple units operating in tandem. This configuration will serve as a stepping stone towards a larger multi-megawatt KARNO system designed to support data center and other customers with higher power requirements. We expect to secure additional U.S. military contracts with a total revenue opportunity of $40 million-$50 million, further advancing the development work underway to support autonomous Navy vessels and other mission-critical defense applications.
Taken together, these milestones support our expectation of generating approximately $10 million worth of revenue during 2026 from a combination of commercial customer activity and R&D service contracts. Turning to slide 10. Looking ahead, over the next three years, we plan to build on the progress achieved in 2026 as the KARNO Power Module transitions from early deployment into scaled commercialization. In 2027, we expect to ramp commercial deliveries and expand the range of applications where KARNO is deployed. This includes advancing the development of our multi-megawatt KARNO Power Module for data center applications. We view 2027 as a year where we'll transition from initial commercialization into meaningful production scale. In parallel, we plan to expand our additive manufacturing capability or in capacity, in preparation for anticipated growth in 2028.
By 2028 and beyond, we expect to accelerate commercial growth as increased production capacity enables us to address a broader portion of customer demand. This includes fulfilling interest in multi-megawatt systems for data centers, as well as continued expansion within military applications. Turning to slide 11. To wrap up, 2025 was a year focused on resolving product and production challenges, strengthening the core architecture of the KARNO Power Module, and expanding its operating capabilities across fuel and mission-critical profiles while also improving performance. In 2026, our focus shifts from development to deployment and commercialization. With UL certification nearing completion, early adopter units, moving into the field, growing military engagements and strong data center interest, we believe we are well-positioned to transition from validation to scaled execution over the coming years.
With that, I'll turn the call over to Jon to walk through the financial update, starting on slide 12.
Thank you, Thomas, and good morning, everyone. In the Q4 , we recorded revenue of $700,000 from research and development services related to our contracts with the Office of Naval Research. Cost of sales was $600,000, resulting in a small gross margin gain. In the Q4 of 2024, we recorded $1.5 million of R&D revenue and a $100,000 gross margin gain. As a reminder, R&D services revenue reflects the sale of KARNO cores and related components to the U.S. Navy, and the work we perform to test and validate these units. Total operating expenses for the Q4 were $15 million, down from $17.2 million in the Q4 of 2024.
The decrease was driven by lower R&D and SG&A costs, as well as a $500,000 gain from asset sales in connection with the powertrain exit and termination. R&D work continued at a strong pace in the quarter, but was lower than 2024 when we were purchasing components at a faster pace. SG&A expenses were down about 6% compared to the Q4 of 2024, primarily due to lower facilities and insurance costs, partially offset by a small increase in labor costs. Our total net loss for the Q4 was $13.2 million, down from $14.4 million in the Q4 of 2024. For the full year 2025, we recorded revenue of $3.5 million, all from R&D services, and gross profit of $170,000.
This compares with revenue of $1.5 million and gross profit of $100,000 in 2024. Full-year operating expenses were $65.7 million, compared to $64.4 million for all of 2024. The small increase compared to 2024 is related to higher R&D expenses this year, partially offset by lower SG&A and powertrain exit and termination expenses. Our full-year net loss was $57.2 million, compared to $52 million in 2024. Turning to slide 13, our cash and investments position. We spent $12.4 million during the Q4 and $67.4 million for all of 2025. Full-year capital spending was $23.7 million and consisted primarily of additive printing machines and related equipment, along with facility investments to support printer operations.
Cash generated from asset sales for the full year was $2.2 million. As a reminder, asset sales relate to the monetization of equipment previously used in our powertrain division and will continue into 2026. We finished the Q4 with $152.4 million of cash and short and long-term investments on our balance sheet. While this outcome was a little lower than the $155 million we projected for the end of the year, we did end up deferring $10 million of planned equipment financing into 2026. Excluding that deferral, our year-end cash and investment balance would have been about $7.5 million higher than projected, mostly due to lower CapEx and lower OpEx.
Looking forward into 2026, as Thomas noted earlier, we expect to generate approximately $10 million in revenue this year from both R&D services and commercial customers. Commercialization of the KARNO Power Module is expected to occur late in the year. As Thomas mentioned, we plan to slow capital spending in 2026 as we work to optimize the output of the printers we have on hand today. We are planning to execute equipment financing for up to $10 million this year, although that amount may shift up or down based on actual capital expenditures and available lease capital. For 2026, higher revenue, thoughtful expense control, lower capital spending, and planned equipment financing are expected to result in a lower level of total spending compared to 2025.
Our current forecast is for net spending of just over $50 million during the year, resulting in a year-end cash and investment balance of approximately $100 million. On past calls, we've consistently noted that we expect that the capital we have on hand today will be sufficient to carry us through commercialization of the KARNO Power Module. Based on our current plans, that continues to be the case. Last quarter, we noted that we anticipate that additional capital will eventually be required to support production growth, particularly for the purchase of additional additive manufacturing equipment. In anticipation of that eventuality, we have filed a standard S-3 shelf registration statement with the SEC to provide us with additional capital raising flexibility in the future.
An S-3 is a valuable tool commonly used by established public companies to efficiently and opportunistically raise funds from time to time through the issuance of debt or equity. Now I'll turn the call back over to Thomas.
Thank you, Jon. As we look ahead, our focus for 2026 is clear: we'll be building units and getting them into the field and expanding real-world customer operating experience. We believe this year will be defining for Hyliion as customers begin operating the platform in live environments, and we transition from development to scaled execution. Beyond initial deployments, we seek significant opportunity in both data center infrastructure and military applications. The shift towards an 800V DC architecture in next generation AI data centers aligns directly with KARNO's design, and we believe our modular and fuel flexible platform is well positioned to position this evolution. At the same time, resilient and mission-critical power remains a priority for the U.S. military. We are excited by the opportunity ahead and our focus on execution as we move into the next phase of growth.
I will now hand it over to the moderator to open up for Q&A.
We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Our first question comes from the line of Martin Malloy with Johnson Rice. Your line is open. Please go ahead.
Good morning. Congratulations on all the progress you're making. Wanted to ask about the commercialization later this year. You mentioned, I think, half the units will be going to the U.S. Navy. Could you talk maybe about the end markets for the other units and where you're seeing customer interest from? You mentioned data centers. Is that where the other half of the units are going?
Sure. Appreciate the question. Military is a huge focus for us this year. You know, we're at the point where we're actually starting to put the systems together that will go into that unmanned autonomous ship, so that's a very exciting one for us this year. Other applications include just prime power. Think about, like, powering facilities, providing power for EV charging, those sort of opportunities. The last one is that data center side of things. Ultimately, data centers are looking for that larger platform, that, you know, 2.4 MW, 3.2 MW system. One of the focuses for this year is we can really showcase and, you know, provide the benefits to data centers, even on a 200 kW system.
One of the things that we decided to do is take some of these early adopter units and actually use them as mobile units that we can showcase in various applications. One of the ones we do plan on showcasing this year is a data center opportunity.
Thank you. Just for a follow-up question, could you maybe talk about the capacity that you'll have as you exit this year in terms of manufacturing on a megawatt annual basis? Or give us some measures what it would cost to add additional megawatts per year in manufacturing capacity, so we can get a feel for how 2027 might look?
At this stage, we haven't shared exact specifics around what you're asking. Reason being is we really wanna showcase, improve this printer speed improvements that we are highlighting. That's gonna be a big focus of this year. You know, just to give a little background there, as you buy an additive machine, and you start utilizing it, there are levers you can pull, like how much power in the lasers, how many parts you're producing on a build plate, things like that, to increase the throughput. That's gonna be the focus for this year, and then with that'll give us a stronger clarity on exactly, you know, how much capacity we have with the existing install base.
All that being said, we are highly confident that with the strong production capacity for 26 and 27, and then as we look at 2028, that's where we envision we'll really need to start adding additional printers to start scaling capacity. I know that does not give you the exact color you were looking for, but hopefully you understand why, you know, we wanna focus on those printer speed improvements, improving that we can get to the throughput that we anticipate.
Thank you. Very helpful, and I'll pass it back.
Our next question comes from Sean Milligan with Needham & Company. Your line is open. Please go ahead.
Hey, Thomas. Thanks for taking the questions.
Hey, Sean. It's good to hear you.
When you, when you talk about the incremental $40 million-$50 million of potential from the military, I'm trying to understand, is that Like, do you consider that scaled deployments, or is that, like, additional testing, across different platforms and different agencies, things like that would then scale, you know, could scale beyond that $40 million-$50 million range?
Yeah. It is really focused on additional applications and more unique development for the military. Right now, we have our Navy work we're doing. It's really focused around being the prime power on a fully unmanned autonomous ship platform. We are also looking at stationary power deployments, think about, like, powering a base, doing that with the Navy. These additional contracts are both a continuation of that work, plus, adding actually new applications, new opportunities. Think about, like, different ship platforms, think about, other branches of the military, how they need prime power solutions as well, and starting to expand the use cases of the KARNO technology.
It's not so much just, you know, placing a standard PO to just buy additional equipment, but obviously, all this work we're doing with the military is in an effort to go to that stage.
Okay, great. Thank you. On this new 800 kW module that you're talking about, I think historically, you gave some numbers around KPIs for the KARNO versus, like, fuel cells or traditional gas. I was curious if there's any update in terms of, like, how this, you know, module might change that. Does it look more attractive for you as you scale up to the larger, you know, the larger platforms here? What kind of risks are there, you know, scaling up from the 200 to the 800 and then the three point two ultimately? What do you need to work through on your side to prove that up and get that done?
A few pieces to that question. First is around kind of how it compares against other solutions in the market. We see the customers looking at kind of the conventional internal combustion engines, looking at fuel cell, and then, you know, looking at technology like ours. In terms of how it shapes up, and I'll put some broad numbers to it, is with a normal internal combustion engine, cost per kilowatt, maybe I'll use, you know, if you look at our 200 kW system, what the end numbers would be. If you bought a 200 kW internal combustion engine, really designed for prime power and natural gas solutions, you're probably going to be approaching that $250,000-$300,000 for that actual solution.
As you look at our system, we're more around half a million dollars. As you look at fuel cells, you're up closer around that $700,000. It really still puts us in the middle of those two, which is where we're targeting to be. You know, obviously, our system has benefits over those other solutions that really drive the payback, the ROI. That's improved efficiency, so you're actually gonna use less fuel, and then, on the maintenance side, having lower maintenance as well, is what we're anticipating, which will then, help you with driving a faster, payback and ROI. That's kinda how we shape up against the competition.
Another one of the benefits of this modular platform is it allows customers to really match the power they need with the amount of capacity we're giving them. Different data centers have different architectures, and this 800 kW system allows that flexibility. In terms of the risks you asked about of going from 200- 800 to then the three point two, the key thing here is the actual power generation unit, that 200 kW KARNO Core, remains the same in every size iteration. Once we validate and have confidence in that 200 kW architecture, you're really just replicating it. I would equate it to think of like, going and buying an electric vehicle. You can buy ones that have different ranges.
At the end of the day, they're just putting more of the same batteries in the vehicle to get you longer range. We're taking the same approach to power generation, where we're putting more of the same KARNO cores back together to give you more capacity. In 2025, we actually spent a lot of time, a lot of effort on developing this 800 kW system because that is what's being utilized for the Navy. From there, what we said is, "Well, as opposed to going and doing a reengineering and doing a two-megawatt system, why don't we just take that 800 kilowatt and make that modular so that those can be stacked together?" We're already well underway with the development of that system, actually.
On the ABM dealer partnership, can you just give us a little more background on ABM, and maybe, like, their expertise in terms of power deployment and, like, what end markets they are, you know, stronger in?
Absolutely. ABM has a lot of breadth and experience in this space, in power generation. You know, their skills are widespread. Everything from they've got a strong customer base, customers they're already working with, that are coming to them saying, "Hey, we need additional power. We need to scale and expand." They can actually do the site engineering, so look at, you know, how do you integrate the actual power unit? They can actually do that integration work, the actual deployment. They're set up to also do the long-term continuing service and upkeep of that site as well.
In addition to all that, they also offer Energy-as-a-Service solutions to their end customer, which, for background there, that means that, you know, ABM would actually come in and procure and buy the technology, the solutions, and then they would charge the end customer based on a cost per kilowatt type of a purchasing agreement to make it easier for customers to adopt solutions for power gen. ABM, very well-versed in this space, you know, one of the large players there. Their focuses range everywhere from, you know, things like airports, to data centers, to mission-critical applications. We've already started discussions with ABM and end customers together, and we're excited to see, you know, where that will take us here in 2026 and beyond.
Great. Thank you for the time.
Our next question comes from Tedd Jackson with Northland. Your line is open. Please go ahead.
Thanks. Hey, Thomas. Hey, Jon.
Hi, Ted.
I got a few questions for you. Let's start with just making sure I understand, you know, kind of, you know, CapEx and capacity. Right now, exiting, say, exiting 25 at 30 printers. If I understand, then you're gonna add one or two more during 2026, and rather than expand the fleet, the effort is really focused on using it better. When we exit this year, roughly speaking, you'll be at 32 units, but you'll be running them, you know, at a much higher throughput rate. Is that the message?
Yeah, I think, Ted, I think you've got it summarized accurately. We don't know exactly how many we'll add, maybe a handful this year, so I wouldn't say exactly two. It might be a little more than that, but those are units we had on order from last year. You're thinking about it correctly. We've got a certain amount of capacity, and that capacity rate has been growing as we get more of these printers commissioned and operating to their optimum state. As Thomas was mentioning earlier, some of these are the latest generation printers, which have higher laser power than what we're used to. The work that we're gonna do to increase print speed this year will be related to taking advantage of that higher power and also just other programming opportunities that just make the printers run faster.
You know, that's a lot of... The, the good news is that's great increase in output with a not a whole lot of investment in terms of dollars. That's what our focus will be on this year. Yeah, we'll end 2026 with a, you know, a handful more printers and more throughput from the ones that we have.
Then the range of your printers is everything from, you know, there's the older ones with one laser, and then you have some with two, and then you have some with four. These, the ones we'd be purchasing will be more of these, of the four laser printers. Is that correct?
Actually, it's a mix. Thomas also mentioned that GE is working on some new laser technology, and we're excited to help them out on development of that or trying to test out what that's capable of, and that will actually be one of the printers with the smaller number of plates. We've really got opportunities across the range of our printer fleet.
Okay. I mean, I know you probably won't tell me this, but to kind of get a sense, you know, in terms of just sort of understanding as you roll through this, you start, you know, your capacity expansion in the CapEx. I mean, roughly speaking, you know, for, like, the ideal printer, whatever one it might be, what's the outlay for a singular unit?
The cost?
Yep.
What are you asking? For a printer-
Yeah, that's what I meant.
Or for... Um-
You know.
Yeah, I mean, these are commercially available printers, so our exact cost, yeah, we can't share. You know, that is information that if you're looking at what additive printing machines cost, that's pretty readily available.
Maybe, Ted, just to add slightly more, just, you know, some machines can actually come in less than $1 million, and then other machines can be in the, you know, low single-digit millions.
Okay. Going over to the kind of your revenue forecast and the development work you do. You're guiding to $10 million of revenue, a mix between development work and I assume some unit revenue recognition. Starting with the development work, you had $20 million of revenue with the U.S. Navy. If you kind of go through it, you've rolled through about $5 million of that so far. You've got about $15 million of that kind of left to work through. You got another, let's call it $40 million or $50 million that across other things that you think you can bring in.
When we look at, you know, let's start with, you know, the older stuff. I mean, when will you recognize, you know, a significant piece of that remaining $15 million in 2026? How do we think about that? What would be the timeline, if you would, for the new revenue that if you get these contracts in, where you would start seeing it happen? You know, kind of what are the milestones that you have to do to recognize that and get paid? Get that financial.
Okay, there's a lot of pieces there, so remind me if I forget one of them. You're correct, that most of the revenue that we project to earn this year would be from R&D services, although there will be commercial revenue from following commercialization of the very initial units that are early deployment units. That part that is R&D services revenue is part of that $20 million, roughly, of R&D contracts that we have. Part of that we spent in 2024, part of it last year. I think you're right, about $5 million spent so far. There is upside opportunity to that, just based upon the pace of our work. Some of that could roll into 2027 as well.
The new contracts that we were talking about today, we plan to get those, you know, we hope to get those under contract, and those will are really more of kind of next fiscal year, and really will provide us that runway and pathway into 2027 and beyond. Let's see. Again, the timeline for those new contracts, we expect it to be kind of late in the year. On the commercialization side, the milestones, obviously, we want to get a lot of hours on the units that we have, get these initial early adopter customer units in the customer's hands, finish testing them at our location, put them on customer sites. They have to meet customer specifications in terms of their operating capabilities.
We mentioned UL certification has to be completed. There's some steps around just our manufacturing processes and so forth, that have to be optimized and repeatable and so forth. There's, you know, a lot of steps, fairly well-defined things that we have to do, which we expect to get done over the course of this year. Does that catch everything you were asking?
It did. It did. Thanks. Then, on the 10 systems, I mean, I know 10 systems is, it's a rough guesstimate for what you think you'll be able to put out in the field, during 2026. Half of those are from the military, I'm gonna assume those are not like, you know, the boxes, if you would, that, you know, I've seen in, you know, these testing facilities, but, you know, a little more bespoke. The, let's call it the remaining five, will you recognize revenue on any of those?
I mean, I'm hard-pressed to see, you know, like, if you're gonna do 10 that, and you have $10 million in revenue, that you're gonna recognize revenue on, you know, all 10 units that you're, you know, kind of circling in for, you know, kind of being, you know, put to customers. You know what I mean? Will you recognize revenue on, you know, KARNO modules outside of the military during 2020?
Sure. Maybe just to start off with the color of, you know, the units. Yes, about half of them going to military now, that is actually a split of some of them, and that's that 800 kW module designed for going into the ship. Actually, just to your point, Ted, about that the military will also be taking delivery of boxes as well, units that are in a full 200 kW enclosure, which is more focused on base deployments and prime power applications. We're actually doing both with the military, which is pretty exciting. On the units, the remaining units, which are more commercial ones, some of those will be going out to customer sites, you know, deployed.
They are paying for these systems, even though we won't recognize revenue right on the front end. They are paying for the systems and then some of those units, well, a couple of them, we're also anticipating having them as units that we can, as we were talking about, bring out to data centers, showcase the abilities there, integrate into customer sites, and really prove that application. Because as we look at, you know, 2028, 2029, 2030, there is so much growth happening in the data center space, that we want to make sure that people will view us this year as a viable solution in that market. That's where it's important for us to showcase that. I'll then hand it over to John on how it works in terms of actually recognizing that early adopter unit revenue, though.
Just, you know, just as an example, some of the early units that we expect to deploy initially here and some that are already, you know, built and operating. Once we have reached, you know, official commercialization, then we would expect to recognize revenue for those. There could be some that are still in the process of acceptance and so on, that may slip outside of that. That's the point of commercialization, is that we can recognize revenue, and the earliest ones that we deliver would be the prime candidates for that recognition right away.
... Yeah, but so just to make sure I understand, you will recognize some revenue, but when you talk about the 10 units, it's not 10 units that are gonna flow through, you know, in terms of your PNL, it's 10 units that you're actually gonna, like, for lack of a better term, you're gonna ship them. They're gonna be... You know what I'm saying? They may not have been accepted, revenue recognized-
Yeah.
You'll have-
You're correct. Maybe just to decompose the revenue a little bit further, there's gonna be services related to R&D services, so testing and engineering work, even stuff we contract out. The deliveries that Thomas just mentioned of full systems and 800 kW system, and then what we would call commercial customers, the initial units that we're deploying now with our early adopter customers, those will turn into revenue once we've crossed the threshold of commercialization, as well as making sure individually on those contracts that we've met the contract, the customer contractual requirements.
Okay. My, my very last question, 'cause I've taken up more time than I'm allowed, I think. You know, you know, you're up to 175 kW with regards to the KARNO now, Thomas. You've got, you said, you know, as you've kind of gone through testing, I mean, it's part of, it's part of the process of why you go through beta and everything. It all under the sun is, you know, you got more tweaks to do to get up to that 200 kW.
Can you take a little time and kind of talk about, you know, where the things are that you need, you know, that you've discovered, you know, to, that you need to revise and kind of where you are in the process to resolving those issues, for lack of a better term, so that you can get to that 200 kW goal? This is my last question. Thanks very much.
Perfect. All right. Obviously, great progress in the quarter, getting to that 175. Another core thing is we don't see it as fundamental architecture changes to get to the full 200 kW. It's really about refinement. To use an analogy, like, this is a heat-powered solution, right? It's almost like squeezing a balloon. When you go, you know, contain the heat in one area, like squeezing a balloon, it wants to expand and go out other areas. We talked about earlier in the year of 2025, the regenerator, that's really the fine mesh, the thermal battery. We saw a deficiency there. Once we solved that, it was like squeezing the balloon in that area to then it showcased some other areas we needed to work on.
To give examples, those are, over the past quarter, we've been working on a new cylinder wall sleeve that has better thermal properties, so it doesn't let heat transfer through as easily. We working on a new piston design that reduces the amount of radiation, so heat that can actually flow through it, as well as, you know, smaller things like improved thermal blankets around the solution that keeps heat in better, some unique materials that can, you know, stop heat from transferring from one part to the other. All this, you know, as noted, it's small changes. Some of the things that I mentioned just now have already been rolled in. That's what got us to those improved power levels.
Others are at a stage where, we just got the first batch of these new cylinder wall sleeves in, just this past week. Pistons, we expect to get those in in the coming weeks. We are in the middle of still evolving that, but, you know, tying this all back together, it's important to note, like, we're at the point where the power that these systems are producing now is sufficient to get the initial units out there. That is the prime focus right now, and then in parallel, we'll work on continuing to get up to that 200 kW. Hopefully that adds some helpful color.
It does. It does. Okay. Thanks very much, and thanks for all the time.
Thanks, Ted.
Our next question comes from Martin Malloy with Johnson Rice. Your line is open. Please go ahead.
Thank you for taking a follow-up question. Just wanted to ask about the control systems that you mentioned. Is that something you're developing internally, or could we see some sort of partnership there?
Yeah, we've really taken the approach of developing all the software in-house, so it is Hyliion's IP, designed, developed in-house, in-house by Hyliion. We see this as, you know, a key part of our solution and one that, you know, I didn't mention this in Ted's last question, but we even see some software improvements that we can make that will even squeak out some additional kilowatts out of the system. With all that in-house solution owned by us, where we will integrate with others is for site integration, right? We will not be the primary controller on a site. That is, you know, something that we will integrate with other site systems or others' EV charging pedestals, things like that, and then, you know, let them operate it.
It is key to note, though, we do have the ability to integrate into other DC architectures. So think about like a battery pack. You can plug a battery pack right into the KARNO Power Module, and we can communicate directly with that and even control the battery. We see it as a very advanced software and one that customers who have been on site have actually seen it as a little bit of like a Tesla moment, where Tesla was the first to really put a large screen and display into their cars.
you know, believe we're one of the first to really put a large screen and a lot of information that a user can look at real time on the actual power module and get feedback, both at the unit or through the cloud. Yeah, we've got a very strong software and controls team, and many of them were some of our top people back when we had our powertrain division. We've been really able to leverage those, the skill set of those people.
Terrific. Thank you for your time.
Thank you.
If there are additional questions at this time, please raise your hand by pressing star one to join the queue. There are no further questions at this time. I will now turn the call back to Thomas for closing remarks.
Thank you, everyone, for joining today's call. Apologies again for the technical difficulties at the start there, but glad we were able to get that resolved. You know, just setting the stage again for 2026, this is a year that we're focused on getting units out there into the field, getting those customer deployments out there, and really showcasing the units working. We started the deployments of early adopter units last year, continue that this year and get units out into the field. Then as we look at the years ahead, I mean, a lot of exciting opportunities growing, not just in prime power, but then the other two that we mentioned heavily on this call with the military, expanding upon military contracts and then also the data center space.
We look forward to hopefully sharing further good news in those two areas throughout this year. Thank you again for joining the call, and we look forward to chatting again on our next earnings call.
This concludes today's call. Thank you for attending. You may now disconnect.