2024
ANNUAL
REPORT
ballard.com
Message from the CEO
4
Our Financial Performance
6
Responsible, Sustainable Business
7
Management’s Discussion and Analysis
9
Financial Statements
59
TABLE OF CONTENTS
CAUTION REGARDING FORWARD LOOKING
STATEMENTS
This document contains forward-looking statements
concerning anticipated markets for our products,
implementation of government policy initiatives, planned
manufacturing capacity expansion, product cost reduction
activities and planned investments. These forward-looking
statements reflect Ballard’s current expectations as
contemplated under section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Any such statements are
based on Ballard’s assumptions relating to its financial
forecasts and expectations regarding its product development
efforts, manufacturing capacity, and market demand. For a
detailed discussion of the factors and assumptions that these
statements are based upon, and factors that could cause our
actual results or outcomes to differ materially, please refer to
Ballard’s most recent management’s discussion & analysis.
Other risks and uncertainties that may cause Ballard’s actual
results to be materially different include general economic
and regulatory changes, detrimental reliance on third parties,
successfully achieving our business plans and achieving and
sustaining profitability. For a detailed discussion of these and
other risk factors that could affect Ballard’s future
performance, please refer to Ballard’s most recent Annual
Information Form. These forward looking statements are
provided to enable external stakeholders to understand
Ballard’s expectations as at the date of this document and
may not be appropriate for other purposes. Readers should
not place undue reliance on these statements and Ballard
assumes no obligation to update or release any revisions to
them, other than as required under applicable legislation.
2024 was a tough year for our industry. Amidst prolonged policy uncertainty, there was a multi-
year push-out in the commercial adoption of clean hydrogen and PEM fuel cell applications. With
this backdrop, compounded by a difficult funding environment, an industry rationalization is
underway.
Ballard’s 2024 financial results reflected the industry challenges. 2024 revenue of $69.7 million
was down 32% compared to 2023, and gross margin of (32%) was 11 points lower. Total
operating expenses were $161.3 million, including $17.0 million in restructuring provisions.
Cash usage was $147 million, a 10% improvement.
Notwithstanding the industry headwinds and our disappointing financial results, Ballard made
important progress in 2024.
Record Orders
2024 was a record-breaking year for new order intake for our Power Products. 2024 new order
intake totaled $113 million, punctuated by $75.4 million in Q4. Both were Ballard records. We
ended 2024 with an Order Backlog of $173.5 million, up 41% compared to the prior quarter,
including a 12-month Orderbook of $98.9 million, up 48% compared to the prior year.
These outcomes are particularly noteworthy given the challenging industry dynamics and the
contrast with most competitors, underscoring Ballard’s technology and market position. We
were front and center for most major commercial order announcements in our target markets in
2024.
Record Shipments
Deliveries of fuel cell engines grew by approximately 30% to more than 660 engines in 2024,
totaling 56 MW. This accounted for over 90% of 2024 revenue. These shipment milestones
represent new records for Ballard and are proof points of our manufacturing execution
capabilities.
Bolstered by our 2024 shipments, we continue to grow our industry-leading field deployments in
Bus, with valuable real-world data on the performance of our engines in various operating
conditions. This rich field data is another Ballard differentiator and helps inform our next-
generation product development programs, reliability and warranty models, and field
maintenance approach. We are pleased to report we had another successful year with our
engines deployed and monitored in the field, with zero reported safety incidents, and fuel cell
engine availability around 99% in 2024.
Operating Cost Reductions
We initiated a global corporate restructuring to moderate our spend to better align with delayed
market adoption. We expect our restructuring to reduce total annualized operating expenses by
more than 30%, with most of the savings realized in 2025. We reduced our planned capital
expenditures, including pausing plans for US production capacity expansion. We reduced our
cost structure in China and halted any new investments in China, including in the Weichai
Ballard JV.
MESSAGE FROM THE CEO
2024 ANNUAL REPORT
Fellow shareholders,
ballard.com
4
Randy MacEwen
President and CEO
ballard.com
MESSAGE FROM THE CEO
2024 ANNUAL REPORT
We remain steadfast in our commitment to positioning Ballard as a
leading, profitable fuel cell company driving the transition to a low-
carbon economy.
5
Product Development Milestones
2024 was a banner year at Ballard for product innovation, including our programs on product
cost reduction. We made important progress against our technology and product roadmap, with
the execution of high-impact development programs. We launched our 9th generation high-
performance fuel cell engine. The FCmove -XD delivers significant improvements in reliability,
durability, efficiency, power density, scalability, and costs. We also continued our work to lower
costs for next-generation engines, including reducing part count and the introduction of new
balance-of-plant components. For our fuel cell stacks, we continued development programs for
MEAs, bipolar plates, and stack compression hardware.
We successfully completed the initial development phase of Project Forge, our new high-volume
bipolar plate manufacturing line. This project is expected to substantially lower bipolar plate
costs and increase plate manufacturing capacity, without expanding our Burnaby manufacturing
footprint.
Taken together, our product cost reduction initiatives are valuable levers to enable gross margin
expansion.
Looking Forward
We started 2025 with a strong order book, $603.9 million in cash, no bank debt, and no mid-
term financing requirements.
As we look ahead, we see continued policy uncertainty, particularly in the US, along with further
industry rationalization. We will continue to closely monitor factors impacting the commercial
adoption of our markets and products, and reassess our investment plans, cost structure, and
cash usage based on these factors.
Our 2025 focus is on our customers and our controllables, including prioritized product
development and product cost reduction programs, while also maintaining disciplined spending
and balance sheet strength for long-term competitiveness and sustainability.
In closing, I would like to extend my sincerest gratitude to our global team for their unwavering
dedication to our vision and values, as well as to our shareholders for your continued support.
®
Select annual financial information reflects results
from continuing operations. Results attributed to
Ballard Motive Solutions have been removed from
continuing operations in 2024, 2023 and 2022 as a
result of a restructuring of operations at Ballard
Motive Solutions that commenced in 2022, effectively
closing the operation.
FINANCIAL PERFORMANCE
FOR THE YEAR ENDING DECEMBER 31, 2024
Select Annual Financial Information
2024
2023
2022
2021
2020
Results of Operations
Revenues
69,731
102,368
81,860
104,367
103,877
Gross margin (loss)
(21,982)
(21,831)
(13,308)
14,066
20,984
Gross margin %
-32%
-21%
-16%
13%
20%
Total Operating Expenses
161,318
141,073
132,020
100,731
60,745
Cash Operating Expenses
115,931
119,327
111,992
82,630
50,029
Adjusted EBITDA
(168,133)
(150,088)
(132,635)
(80,981)
(38,944)
Net loss from continuing operations
(323,530)
(144,210)
(160,371)
(113,282)
49,469
Net loss from continuing operations per
share
(1.08)
(0.48)
(0.54)
(0.38)
(0.20)
Financial Position
Total Assets
777,307
1,077,542
1,247,077
1,440,943
975,600
Total non-current liabilities
28,731
15,740
14,998
29,567
22,621
Cash, cash equivalents and short-term
investments
606,052
753,243
915,741
1,126,899
765,430
Expressed in thousands of US dollars, except per share amounts and gross margin %)
ballard.com
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ballard.com
Ballard is committed to creating clean energy solutions that
address climate change, reduce our environmental impact,
support our employees, and uphold strong governance
practices.
Responsible,
Sustainable Business
7
ballard.com
Ballard is driven by a vision to deliver fuel cell power for a sustainable planet, with a business
strategy focused on commercializing fuel cell products and technology while capitalizing on
market opportunities for its intellectual property. Guided by its values and purpose of Here for
life™, Ballard recognizes that managing environmental, social, and governance (ESG) impacts
plays a crucial role in creating long-term value, reinforcing its leadership in the low-carbon
energy transition, and enhancing resilience for the business, the environment, and communities.
Ballard is integrating sustainability and ESG considerations into its strategy, operations, and
decision-making. This commitment was formally reinforced in 2023 through the signing of the
UN Global Compact. The initiative solidifies the company’s dedication to aligning with the
Compact's 10 principles and transparently reporting its progress.
Ballard discloses its progress through key sustainability documents that align with industry
standards, regulatory requirements, and best practices. These include the annual ESG Report,
which provides a comprehensive overview of its environmental, social, and governance
performance, the annual Conflict Minerals Report, and the Canadian Fighting Against Forced and
Child Labour annual report. Each of these documents highlights Ballard's commitment to ethical
business practices and community engagement. For more information on our sustainability
efforts, reach out to sustainability@ballard.com
Responsible, Sustainable Business
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements about expected events and the financial and operating performance of Ballard Power Systems Inc. (“Ballard”, “the
Company”, “we”, “us” or “our”). Forward-looking statements include any statements that do not refer to historical facts. Forward-looking statements are based on the beliefs of
management and reflect our current expectations as contemplated under the safe harbor provisions of Section 21E of the United States Securities Exchange Act of 1934, as
amended. Words such as "estimate", "project", "believe", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", the negatives of these words or other
variations thereof and comparable terminology are intended to identify forward-looking statements. Such statements include, but are not limited to, statements with respect to
our objectives, goals, liquidity, sources and uses of capital, outlook, strategy, order backlog, order book of expected deliveries, sales pipeline and future product sales; future
product roadmap, including expected product costs and selling prices, future product sales; future production capacities and volumes; the markets for our products; expenses
and costs; contributions and cash requirements to and from joint venture operations; research, technology and product development activities, including future product
performance, attributes, and launches and product cost reduction plans; as well as statements with respect to our beliefs, plans, objectives, expectations, anticipations,
estimates and intentions, including regarding our ability to implement, execute, complete or realize benefits of our restructuring initiatives on the timelines we expect, including
our expectations with response to our expected restructuring changes, cost savings and the reduction of our planned capital expenditure. These statements are not
guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. In particular, these forward-looking statements are based on
certain factors and assumptions relating to our expectations with respect to hydrogen and fuel cell market development; certain factors and assumptions relating to our
existing customer and partner relationships; the generation of new sales; producing, delivering, and selling the expected product and service volumes at the expected prices
and costs; and controlling our costs. They are also based on a variety of general factors and assumptions including, but not limited to, our expectations regarding technology
and product development efforts; manufacturing capacity and cost; product and service pricing; market demand; and the availability and prices of raw materials, labour, and
supplies. These assumptions have been derived from information available to the Company including information obtained by the Company from third parties. These
assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied, or forecasted in such forward-looking
statements. Factors that could cause our actual results or outcomes to differ materially from the results expressed, implied or forecasted in such forward-looking statements
include, but are not limited to: challenges or delays in our technology and product development activities; changes in the availability or price of raw materials, labour, supplies
and shipping; our ability to attract and retain business partners, suppliers, employees and customers; our ability to extract value from joint venture operations; global economic
trends and geopolitical risks, including changes in economic growth, rates of investment, inflation, interest rates or currency fluctuations in our key markets, including
magnitude of the rate of change of the Canadian dollar versus the U.S. dollar; geopolitical risk or an escalation of trade tensions such as those between the U.S. and China
and the U.S. and Canada; the rate of commercial adoption of our markets, products or related ecosystem, including the availability and cost of hydrogen; investment in
hydrogen fueling infrastructure and competitive pricing of hydrogen fuel; the relative strength of the value proposition that we offer our customers with our products or services;
changes in competitive technologies, including internal combustion engine, battery and fuel cell technologies; changes in our customers’ requirements, the competitive
environment and/or related market conditions; product safety, liability or warranty issues; warranty claims, product performance guarantees, or indemnification claims; changes
in product or service pricing or cost; market developments or customer actions that may affect levels of demand and/or the financial performance of the major industries,
regions and customers we serve, such as secular, cyclical and competitive pressures in the bus, truck, rail, marine and stationary sectors; cybersecurity threats; our ability to
protect our intellectual property; climate risk; changing government or environmental regulations, including subsidies, credits, incentives or penalties associated with the
adoption of clean energy products, including zero or low emission vehicles, hydrogen and fuel cells; our access to funding and our ability to provide the capital required for
product development, operations and marketing efforts, working capital requirements, and joint venture capital contributions; changes in U.S. tax laws and tax status related to
“passive foreign investment company” designation; potential merger and acquisition activities, including risks related to integration, loss of key personnel and disruptions to
operations; changes in U.S. tax laws and tax status related to the Inflation Reduction Act; and the general assumption that none of the risks identified in the Risks and
Uncertainties section of this document or in our most recent Annual Information Form will materialize. Readers should not place undue reliance on Ballard's forward-looking
statements. The forward-looking statements contained in this document speak only as of the date of this Management Discussion and Analysis (“MD&A”). Except as required
by applicable legislation, Ballard does not undertake any obligation to release publicly any updates or revisions to these forward-looking statements to reflect events or
circumstances after the date of this MD&A including the occurrence of unanticipated events.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
March 12, 2025
Section
Description
1.
Introduction
1.1 Preparation of the MD&A
1.2 Management’s Report on Disclosure Controls
and Procedures and Internal Controls over
Financial Reporting
1.3 Risks and Uncertainties
2. Core Strategy and Business
2.1 Core Business
2.2 Strategic Imperatives
3. Select Annual Financial Information
and 2025 Business Outlook
3.1 Select Annual Financial Information
3.2 2024 Performance Compared to 2024 Business
Outlook
3.3 2025 Business Outlook
4. Recent Developments
(Including Contractual Updates)
4.1 Corporate
4.2 Europe
4.3 North America
4.4 China and Rest of World
5. Results of Operations
5.1 Operating Segments
5.2 Summary of Key Financial Metrics –
Three months ended December 31, 2024
5.3 Summary of Key Financial Metrics –
Year ended December 31, 2024
5.4 Operating Expenses and Other Items –
Three months and year ended December 31,
2024
5.5 Summary of Quarterly Results
6. Cash Flow, Liquidity and Capital
Resources
6.1 Summary of Cash Flows
6.2 Cash Provided by (Used by) Operating
Activities
6.3 Cash Provided by (Used by) Investing Activities
6.4 Cash Provided by (Used by) Financing Activities
6.5 Liquidity and Capital Resources
7. Other Financial Matters
7.1 Off Balance Sheet Arrangements and
Contractual Obligations
7.2 Related Party Transactions
7.3 Outstanding Share and Equity Information
8. Use of Proceeds
8.1 Reconciliation of Use of Proceeds from
Previous Financings
9. Accounting Matters
9.1 Overview
9.2 Critical Judgments in Applying Accounting
Policies
9.3 Key Sources of Estimation Uncertainty
9.4 Recently Adopted Accounting Policy Changes
9.5 Future Accounting Policy Changes
10. Supplemental Non-GAAP Measures and
Reconciliations
10.1 Overview
10.2 Cash Operating Costs
10.3 EBITDA and Adjusted EBITDA
11
1. INTRODUCTION
1.1 Preparation of the MD&A
This discussion and analysis of financial condition and results of operations of Ballard Power Systems
Inc. (“Ballard”, “the Company”, “we”, “us” or “our”) is prepared as of March 12, 2025 and should be read in
conjunction with our audited consolidated financial statements and accompanying notes for the year
ended December 31, 2024. The results reported herein are presented in U.S. dollars unless otherwise
stated and have been prepared in accordance with International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board. Additional information relating to the
Company, including our Annual Information Form, is filed with Canadian (www.sedarplus.ca) and U.S.
(www.sec.gov) securities regulatory authorities and is also available on our website at www.ballard.com.
1.2 Management’s Report on Disclosure Controls and Procedures and Internal Controls over
Financial Reporting
Disclosure controls and procedures
Our disclosure controls and procedures are designed to provide reasonable assurance that relevant
information is gathered and reported to senior management, including the Chief Executive Officer (“CEO”)
and the Chief Financial Officer (“CFO”), on a timely basis so that appropriate decisions can be made
regarding public disclosures.
As of the end of the period covered by this report, we evaluated, under the supervision and with the
participation of management, including the CEO and the CFO, the effectiveness of the design and
operation of our disclosure controls and procedures, as defined in Rules 13a–15(e) and 15d-15(e) of the
Securities Exchange Act of 1934 (“Exchange Act”). The CEO and CFO have concluded that as of
December 31, 2024, our disclosure controls and procedures were effective to ensure that information
required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified therein, and accumulated and reported to
management to allow timely discussions regarding required disclosure.
Internal control over financial reporting
The CEO and CFO, together with certain other members of management, are responsible for establishing
and maintaining adequate internal control over the Company’s financial reporting. Internal control over
financial reporting is designed under our supervision, and overseen by the Company’s board of directors,
management, and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with IFRS.
There are inherent limitations in the effectiveness of internal control over financial reporting, including the
possibility that misstatements may not be prevented or detected. Accordingly, even effective internal
controls over financial reporting can provide only reasonable assurance with respect to financial
statement preparation. Furthermore, the effectiveness of internal controls can change with circumstances.
Management, including the CEO and CFO, have evaluated the effectiveness of internal control over
financial reporting, as defined in Rules 13a–15(f) of the Exchange Act, in relation to criteria described in
Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
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the Treadway Commission (“COSO”). Based on this evaluation, management has determined that
internal control over financial reporting was effective as of December 31, 2024.
KPMG LLP, our independent registered public accounting firm, has audited our consolidated financial
statements and expressed an unqualified opinion thereon. KPMG LLP has also expressed an unqualified
opinion on the effectiveness of our internal control over financial reporting as of December 31, 2024.
Changes in internal control over financial reporting
During the year ended December 31, 2024, there were no changes in internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting. Our design of disclosure controls and procedures and internal controls
over financial reporting includes controls, policies and procedures covering our subsidiaries including
Ballard Power Systems Europe A/S, Ballard Fuel Cell Systems Inc., and Guangzhou Ballard Power
Systems Co., Ltd.
1.3 Risks and Uncertainties
An investment in our common shares involves risk. Investors should carefully consider the risks and
uncertainties described below and in our Annual Information Form. The risks and uncertainties described
in our Annual Information Form are not the only ones that we face. Additional risks and uncertainties,
including those that we do not know about now or that we currently deem immaterial, may also adversely
affect our business. For a more complete discussion of the risks and uncertainties which apply to our
business and our operating results, please see our Annual Information Form and other filings with
Canadian (www.sedarplus.ca) and U.S. (www.sec.gov) securities regulatory authorities.
A summary of our identified risks and uncertainties are as follows:
•
We may not be able to successfully execute our business plan.
•
Commercial adoption of hydrogen in mobility and stationary power applications, including delays in
hydrogen adoption and negative market sentiment are beyond our control and may have an adverse
impact on our business, our joint venture, our key suppliers, and/or customers and our ability to raise
capital.
•
We expect our cash reserves will be reduced due to future operating losses, working capital
requirements, capital expenditures, and potential acquisitions and other investments by our business,
including in certain hydrogen infrastructure and growth equity funds, and we cannot provide certainty
as to how long our cash reserves will last or that we will be able to access additional capital when
necessary.
•
Potential fluctuations in our financial and business results make forecasting difficult and may restrict
our access to funding for our commercialization plan.
•
We depend on a limited number of customers for the majority of our revenues and are subject to risks
associated with early-stage market activities related to fuel cell bus, truck, rail, marine and stationary
applications.
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•
We are dependent on third party suppliers for the supply of key materials and components for our
products and services and may be subject to supply chain disruption.
•
We are dependent upon Original Equipment Manufacturers and Systems Integrators to purchase
certain of our products.
•
In China, a significant amount of operations are conducted by a joint venture that we do not control. In
addition, we provide certain technology solutions services to that joint venture.
•
We have limited experience manufacturing fuel cell products on a commercial basis and our
experience has been limited to relatively low production volumes.
•
We are subject to risks inherent in international operations, including restrictions on the conversion of
currencies and restrictions on repatriation of funds, and risks related to trade tariffs.
•
Certain of our customer supply agreements are subject to certain conditions or risks, including
achievement of certain product performance milestones, completion of product development
programs, or customer cancellation provisions.
•
Public policy and regulatory changes, including regulations relating to perfluoroalkyl and
polyfluoroalkyl substances (“PFAS”) used in our products, could hurt the market for our products and
services.
•
Adequate investment in hydrogen fueling infrastructure and competitive pricing of hydrogen fuel is
beyond our control.
•
Geopolitical events are beyond our control and may have an adverse impact on our business, our
joint venture, our key suppliers, and/or customers.
•
We currently face inflationary pressures, including relating to supply of materials and labour.
•
We currently face and will continue to face significant competition, and many current and future
competitors may have significantly more resources.
•
We could be adversely affected by risks associated with capital investments and new business
processes.
•
Our technology and products may not meet the market requirements, including requirements relating
to performance, integration and / or cost.
•
We may not be able to sell our products on a commercially viable basis on the timetable we
anticipate, or at all.
•
We could lose or fail to attract the personnel necessary to operate our business.
•
Warranty claims, product performance guarantees, or indemnification claims could negatively impact
our gross margins and financial performance.
•
A mass market for our products may never develop or may take longer to develop than we anticipate.
•
We may experience cybersecurity threats to our information technology infrastructure and systems,
and unauthorized attempts to gain access to our proprietary or confidential information, as may our
customers, suppliers and/or partners.
•
We depend on our intellectual property, and our failure to protect that intellectual property could
adversely affect our expected future growth and success.
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•
Climate change risks may adversely affect our operations, or the operations of our suppliers,
customers and/or partners.
•
Regulatory agencies could require us to modify or terminate existing investments, acquisitions or joint
ventures and could delay or prevent future opportunities.
•
Additional issuance of securities by Ballard may dilute existing securityholders, reduce some or all of
Ballard’s financial measures on a per share basis, reduce the trading price of the Common Shares or
other Ballard securities or impede Ballard’s ability to raise future capital.
•
Exchange rate fluctuations are beyond our control and may have a material adverse effect on our
business, operating results, financial condition and profitability.
•
Commodity price fluctuations are beyond our control and may have a material adverse effect on our
business, operating results, financial condition and profitability.
•
Our products use flammable fuels and some generate high voltages, which could subject our
business to product safety, product liability or other claims.
•
We could be liable for environmental damages resulting from our research, development or
manufacturing operations.
•
Ballard believes that it was a “passive foreign investment company” (“PFIC”) for our most recently
completed tax year, which may have adverse U.S. federal income tax consequences for U.S. Holders.
•
Emerging diseases may adversely affect our operations (including our joint venture in China), our
suppliers, our customers and/or partners.
•
We could be adversely affected by risks associated with mergers and acquisitions.
•
Proposed legislation in the U.S. Congress, including changes in U.S. tax law, and the Inflation
Reduction Act of 2022 may adversely impact Ballard and the value of common shares.
2. CORE BUSINESS AND STRATEGY
2.1 Core Business
At Ballard, our vision is to deliver fuel cell power for a sustainable planet. We are recognized as a world
leader in proton exchange membrane (“PEM”) fuel cell power system development and
commercialization.
Our principal business is the design, development, manufacture, sale and service of PEM fuel cell
products for a variety of applications, focusing on power products for bus, truck, rail, marine, stationary
and emerging market (material handling, off-road and other) applications, as well as the delivery of
services, including technology solutions, after sales services and training.
A fuel cell is an environmentally clean electrochemical device that combines hydrogen fuel with oxygen
(from the air) to produce electricity. The hydrogen fuel can be obtained from natural gas, kerosene,
methanol, ammonia, or other hydrocarbon fuels, or from water through electrolysis. Ballard’s PEM fuel
cell products are typically designed to feature high fuel efficiency, relatively low operating temperature,
high durability, low noise and vibration, compact size, quick response to changes in electrical demand,
and modular design. Embedded in each Ballard fuel cell product lies a stack of unit cells designed with
15
our proprietary PEM fuel cell technology. This technology includes membrane electrode assemblies,
catalysts, plates, and other key components, and draw on intellectual property from our patent portfolio,
together with our extensive experience and know-how, in key areas of PEM fuel cell stack design,
operation, production processes and systems integration.
We are based in Canada, with head office, research, technology and product development, engineering
services, testing, manufacturing and after-sale service facilities in Burnaby, British Columbia. We also
have sales and after-sale service facilities in Hobro, Denmark, a module assembly facility in Bend,
Oregon, and a sales, quality, supply chain, and after-sales service office in Guangzhou, Guangdong
Province, China.
We have a non-controlling, 49% interest in Weichai Ballard Hy-Energy Technologies Co., Ltd. (“Weichai
Ballard JV”), located in Weifang, Shandong Province, China. Weichai Ballard JV’s business is to
manufacture certain fuel cell products utilizing Ballard’s liquid cooled fuel cell stack (“LCS”) and LCS-
based power modules for bus, commercial truck, and forklift applications with certain exclusive rights in
China.
We also have certain non-controlling and non-equity accounted investments including: (i) a 7.3% equity
interest in Forsee Power SA (“Forsee Power”), a French public company specializing in the design,
development, manufacture, commercialization, and financing of smart battery systems for sustainable
electric transport; (ii) a 6.7% equity interest in Wisdom Group Holdings Ltd. (“Wisdom”), a Cayman Island
private holding company with operating subsidiaries whose business includes the design and
manufacture of vehicles, including zero emission fuel cell electric buses, trucks, and battery-electric
vehicles; and (iii) a 3% equity interest in Quantron AG (“Quantron”), a private German electric vehicle
integrator and specialty OEM to accelerate fuel cell truck adoption that is in insolvency proceedings.
We have also invested in three hydrogen infrastructure, decarbonization and/or growth equity funds: (i) a
12.4% interest in HyCap Fund I SCSP (“HyCap”), a special limited partnership registered in Luxembourg;
(ii) a 1.5% interest in Clean H2 Infra Fund (“Clean H2”), a special limited partnership registered in France;
and (iii) a 2% interest in Templewater Decarbonization I, L.P. (“Templewater”), a limited partnership
registered in Cayman Islands.
2.2 Strategic Focus and Context
We strive to build value for our shareholders by developing, manufacturing, selling, and servicing zero-
emission, industry-leading PEM fuel cell technology products and services to meet the needs of our
customers in target markets. More specifically, our business plan is to leverage our core competencies of
PEM fuel cell stack technology and engine development and manufacturing, our investments in advanced
manufacturing and production capacity, and our product portfolio by marketing our products and services
across select large and attractive addressable market applications and select geographic regions.
We typically select our target market applications based on use cases where the comparative user value
propositions for PEM fuel cells powered by hydrogen are strongest – such as where operators value low
emission vehicles that require high utilization, long driving range, heavy payload, fast refueling, and
similar user experiences to legacy diesel vehicles – and where the barriers to entry for hydrogen refueling
16
infrastructure are lowest – such as use cases where vehicles typically return to a depot for centralized
refueling and don’t require a distributed refueling network. Our current target markets include certain
medium- and heavy-duty mobility applications, such as bus, truck, rail, and marine, along with certain off-
road mobility and stationary power applications.
We select our target geographic markets based on a variety of factors, including addressable market
sizes of the target market applications in the geographic markets, historic deployments and expected
market adoption rates for hydrogen and fuel cells, supportive government policies, existing and potential
partner, customer, and end user relationships, and competitive dynamics. Our current key target markets
are the geographic regions of Europe, North America, and China.
While we recognize addressing multiple market applications and geographic markets in parallel increases
our near-term cost structure and investments, we believe offering the same core PEM fuel cell
technologies and substantially similar derivative PEM fuel cell products across multiple mobility and
power market applications and across select geographic regions will significantly expand and strengthen
our long-term business prospects. We believe this model approach will increase volume scaling in our
operations, enable lower product and production costs for the benefit of all markets, improve our
competitive positioning and market share, enable diversified revenue streams and profit pools, and
enhance our returns on investments in our technology, product development, and manufacturing.
There has been a material change in the outlook and sentiment for the hydrogen and fuel cell industry
over the past five years. Policies, market outlook and investor sentiment were favorable and supportive in
2020 and 2021, resulting in many companies planning investments in the hydrogen and fuel cell industry.
However, over the past few years, there have been significant changes in the industry context resulting
from a variety of factors, including: an uncertain macroeconomic outlook; a dynamic geopolitical
environment; prolonged policy uncertainty in the U.S., Europe and China; uncertain election cycles in key
countries; rising interest rates, inflation and material costs; and various funding challenges. These
changes have adversely impacted and delayed hydrogen projects across key global markets. We believe
there is a multi-year push-out of the hydrogen and fuel cell industry, including hydrogen project
development, the availability of low-cost hydrogen, the availability of hydrogen refueling infrastructure,
and the commercial adoption of PEM fuel cell applications.
In addition, over the past few years, there has been a negative change in investor sentiment towards pre-
profitability clean energy companies with long-duration investment horizons. In the hydrogen and fuel cell
industry, many companies have been struggling with compressed valuations, liquidity issues, and
restricted access to capital.
These factors have led to a rationalization across the hydrogen and fuel cell industry, starting in 2023.
This rationalization has included numerous corporate restructurings, failures and insolvencies across the
industry value chain. For example, in 2024, many hydrogen and fuel cell companies throughout the value
chain took restructuring actions to reduce their corporate costs and cash burn rate.
At Ballard, we also implemented certain restructuring activities in 2023 and 2024 to moderate our
investment intensity and pacing to better align with delayed market adoption.
17
In 2023, we implemented a modest headcount reduction, rationalized our product portfolio, reduced the
number of active product development programs, dropped new corporate development investments, and
discontinued certain legacy products and non-core activities, including Ballard Motive Solutions in the
U.K. We also suspended a proposed $130 million investment for the localization of a new MEA production
facility in China.
In 2024, we observed further indicators of slowing hydrogen and fuel cell policy implementation and
market adoption. We also noted a material weakening of the financial position of certain customers,
increasing the risk regarding the ability of certain customers to continue with their product development
programs and commercialization plans, in turn placing more risk on our sales order book and sales
pipeline, as well as on certain of our development programs, trade receivables and inventory investments.
We also observed a continued deterioration in the financing environment for certain customers and
partners.
As this context represents a significant headwind to our corporate growth plan, we initiated a global
corporate restructuring in September 2024 to moderate our investment intensity and pacing to better align
with delayed market adoption. We expect our restructuring to reduce total annualized operating costs by
more than 30%, with a substantial part of the anticipated reduction in annualized operating costs
expected to be realized in 2025. Our restructuring included a sizeable workforce reduction, rationalization
and consolidation of certain global operations and facilities, and a reduction in certain planned capital
expenditures.
Given continued uncertainties in hydrogen and fuel cell policies, including the impact on hydrogen policies
of the recent U.S. federal elections, and the uncertainties relating to the adoption rate and timing for PEM
fuel cells in heavy mobility applications, the business case for production capacity expansion investments
in the foreseeable future is extremely challenged. Accordingly, we have also repositioned our previously
planned Texas gigafactory expansion program, where we expect to defer our final investment decision to
2026 pending market adoption and demand indicators.
With continued policy and other challenges in the China fuel cell market and underperformance of the
Weichai Ballard JV, and as part of our global restructuring, we also reduced our corporate cost structure
in China and initiated a strategic review of the Weichai Ballard JV. After conducting our strategic review,
we have decided not to make any additional significant investments in China, including in the Weichai
Ballard JV, for the foreseeable future.
As we look to our long-term strategic plan and cascading capital allocation, we continue to believe
hydrogen and PEM fuel cells will play an important long-term role in decarbonizing select heavy mobility
and stationary power applications. We believe there are certain use cases where customers will be
attracted to the differentiated PEM fuel cell value proposition of long range, fast refueling, heavy payload,
and zero tailpipe emissions.
However, given ongoing market uncertainties, we expect further industry rationalization, failures,
restructurings and consolidation in 2025. We will continue to closely monitor various factors and
circumstances that may impact the commercial adoption of our markets and products, including factors
18
related to macroeconomic conditions and outlook, geopolitical context, climate change policies, hydrogen
and fuel cell industry growth, capital markets, supply chain development, and customer conditions. We
will continue to review our investment plans and cost structure based on these factors. We will also
remain focused on our customers and our controllables, including our development of next-generation,
low-cost fuel cell products, while maintaining disciplined spending and balance sheet strength for long-
term competitiveness and sustainability.
3. SELECT ANNUAL FINANCIAL INFORMATION AND 2025 BUSINESS OUTLOOK
3.1 Select Annual Financial Information
Results of Operations
Year ended,
(Expressed in thousands of U.S. dollars, except per share amounts and
gross margin %)
2024
2023
2022
Revenues
$
69,731
$
102,368
$
81,860
Gross margin
$
(21,982)
$
(21,831)
$
(13,308)
Gross margin %
(32%)
(21%)
(16%)
Total Operating Expenses
$
161,318
$
141,073
$
132,020
Cash Operating Costs (1)
$
115,931
$
119,327
$
111,992
Adjusted EBITDA (1)
$
(168,133)
$
(150,088)
$
(132,635)
Net loss from continuing operations
$
(323,530)
$
(144,210)
$
(160,371)
Net loss from continuing operations per share
$
(1.08)
$
(0.48)
$
(0.54)
Financial Position
At December 31,
(expressed in thousands of U.S. dollars)
2024
2023
2022
Total assets
$
777,307
$
1,077,542
$
1,247,077
Total non-current liabilities
$
28,731
$
15,740
$
14,998
Cash, cash equivalents and short-term investments
$
606,052
$
753,243
$
915,741
1) Cash Operating Costs and Adjusted EBITDA are non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP
measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. See
reconciliation to GAAP in the Supplemental Non-GAAP Measures section.
3.2 2024 Performance compared to 2024 Business Outlook
Consistent with the Company’s past practice, and in view of the early stage of hydrogen fuel cell market
development and adoption, we did not provide specific revenue or net income (loss) guidance for 2024
although we did provide certain quantitative and qualitative outlook expectations for 2024. Revenue in
2024 was modestly back-half weighted and indexed to our fourth quarter. Our 2024 outlook also included:
•
Total Operating Expenses: 2024 outlook range of $145 million to $165 million – Total Operating
Expenses (excluding discontinued operations) in fiscal 2024 of $161.3 million were at the high end of
our outlook range of between $145 million and $165 million. Excluding restructuring and related
expenses of $17.0 million, Total Operating Expenses would have been $144.3 million.
19
•
Capital Expenditures: 2024 outlook range of $25 million to $40 million – Total Capital Expenditures
(being additions to property, plant and equipment and investment in other intangible assets) in fiscal
2024 of $27.6 million were at the low-end of our outlook range of between $25 million and $40 million.
3.3
2025 Business Outlook
Consistent with the Company’s past practice, and in view of the early stage of hydrogen fuel cell market
development and adoption, we are not providing specific revenue or net income (loss) guidance for 2025.
We expect revenue in 2025 to be back-half weighted. Our 2025 outlook includes:
•
Total Operating Expenses: 2025 outlook range of $100 million to $120 million – We expect total
Operating Expenses (excluding discontinued operations) for fiscal 2025 to be between $100 million
and $120 million (compared to $161.3 million in fiscal 2024) as we continue to invest in our business,
including investments in research, technology development, continuation engineering, product
development, product cost reduction, advanced manufacturing, sales, marketing and customer
experience.
•
Capital Expenditures: 2025 outlook range of $15 million to $25 million – We expect total Capital
Expenditures (being additions to property, plant and equipment and investment in other intangible
assets) for fiscal 2025 to be between $15 million and $25 million (compared to $27.6 million in fiscal
2024) as we continue to optimize our manufacturing capacity in support of reducing product costs,
and continue with our ongoing planned investments in testing, advanced manufacturing, and
production.
Our expectations for 2025 are in part supported by our 12-month Order Book of approximately $98.9
million which is derived from our Order Backlog of approximately $173.5 million as of December 31, 2024.
Our Order Backlog represents the estimated aggregate value of orders at a given time for which
customers have made contractual commitments. Our 12-month Order Book represents the aggregate
expected value of that portion of the Order Backlog that the Company expects to deliver in the
subsequent 12-month period.
Our expectations are based on our internal forecast which reflects an assessment of overall business
conditions and takes into account actual sales, operating expenses, capital expenditures, and financial
results in the first two months of 2025; sales orders received for units and services expected to be
delivered in the remainder of 2025; risk adjustments to our sales orderbook and sales pipeline; purchase
and cost commitments currently in existence for fiscal 2025; an estimate with respect to the generation of
new sales and the timing of deliveries in each of our markets for the balance of 2025; an estimate of
purchase and cost commitments to be generated for the balance of 2025; and assumes an average U.S.
dollar exchange rate in the low-to-mid $0.70’s in relation to the Canadian dollar for 2025.
The primary risk factors to our business expectations for 2025 are customer, production, or program
delays or cancellations in delivering against existing orders, and delays from forecast in terms of closing
and delivering expected sales; adverse macro-economic and political conditions including trade, tariff, and
other geopolitical risks; changes in government subsidy and incentive programs; inadequate investment
in hydrogen infrastructure and / or excessive hydrogen fuel costs, all of which could negatively impact our
20
customers’ access to capital and the success of their program plans which could adversely impact our
business, including potential changes, delays or accelerations in our expected operating and capital
equipment requirements; disruptions due to delays of supply of key materials and components from third
party suppliers; disruptions as a result of our reliance on a limited number of product customers and
certain of those customer’s internal development and commercialization plans and financial liquidity;
disruptions as a result of our reliance on a limited number of technology service customers, including
Weichai Ballard JV, which are reliant on their internal commercialization plans and budget requirements;
disruptions as a result of delays in achieving technology solutions program milestones or receiving
payment for such programs; and fluctuations in the Canadian dollar relative to the U.S. dollar, as a
significant portion of our operating expense commitments and capital expenditure commitments are
priced in Canadian dollars.
In addition to hydrogen and fuel cell commercialization and market adoption risks, certain customers,
partners and suppliers are in their early stage of business development, and are subject to significant
corporate, product development, and financial risks, including risks on their development programs,
commercialization plans, financing plans and liquidity. If customers, partners or suppliers experience any
failures or delays in their plans or experience any liquidity or solvency challenges, our business may be
materially adversely impacted.
Our Order Backlog and our 12-month Order Book are currently comprised of a relatively limited number of
contracts and a relatively limited number of customers. Given the relative immaturity of our industry and
customer deployment programs, our Order Backlog and 12-month Order Book are potentially vulnerable
to risk of cancellation, deferral or non-performance by our customers for a variety of reasons, including:
risks related to continued customer commitment to a fuel cell program; risks related to customer liquidity;
credit risks; risks related to changes, reductions or eliminations in government policies, tariffs, subsidies
and incentives; risks related to macro-economic and political conditions including trade, public health, and
other geopolitical risks; risks related to slower market adoption; risks related to vehicle integration
challenges; risks related to the development of effective hydrogen refueling infrastructure; risks related to
the ability of our products to meet evolving market requirements; and supplier-related risks. Certain of our
customer supply agreements are also subject to certain conditions or risks, including achievement of
certain product performance milestones, completion of product development programs, or customer
cancellation provisions, and it is likely that some future supply agreements will also be subject to similar
conditions and risks. There can be no assurance that we will achieve or satisfy such conditions or that
customers will not cancel their orders. In addition, our supply agreements may include various pricing
structures or reduced pricing tiers based on various factors, including volumes and the timing of
deliveries. In setting these reduced pricing tiers, we may assume certain future product cost reductions
which are subject to execution risk, including future commodity costs, supply chain costs, and production
costs, and we may not be successful in achieving the planned cost reductions. In such circumstances,
these agreements may become future onerous contracts if our gross margins become negative and the
value of carried inventory to support product delivery under such contracts may also be adversely
impacted.
21
Furthermore, potential fluctuations in our financial results make financial forecasting difficult. In addition,
due to the early stage of development of the market for hydrogen fuel cell products, it is difficult to
accurately predict future revenues, operating expenses, cash flows, or results of operations on a quarterly
basis. The Company’s revenues, operating expenses, cash flows, and other operating results can vary
significantly from quarter to quarter. As a result, quarter-to-quarter comparisons of revenues, operating
expenses, cash flows, and other operating results may not be meaningful; instead, we believe our
operating performance should be assessed over a number of quarters and years. It is likely that in one or
more future quarters, financial results will fall below the expectations of securities analysts and investors
and the trading price of the Company's shares may be materially and adversely affected.
4.
RECENT DEVELOPMENTS (Including Contractual Updates)
4.1
Corporate
Ballard announces restructuring to lower total operating expenses by more than 30% to align with delayed
market adoption, while maintaining long-term competitiveness and balance sheet strength
On September 12, 2024, we announced a global corporate restructuring to reduce corporate spending
and to maintain balance sheet strength amid a slowdown in hydrogen infrastructure development and
delayed fuel cell adoption. Our restructuring measures impacted our global operations, and are expected
to yield anticipated annualized total operating expense savings in excess of 30%, with a substantial part
of the annualized savings being realized in 2025.
The reduction measures included a reduction in workforce, a rationalization of product development
programs, operational consolidation, and reduction in capital expenditures. Cost reduction measures are
not expected to impact product delivery and program execution required to fulfill customer commitments.
4.2
Europe
Ballard announces multiple orders totaling over 6 MW of fuel cell engines for European bus market
On December 20, 2025, we announced orders from two bus manufacturers to supply over 90 fuel cell
engines, representing approximately 6.4 MW of total rated power, for the European and UK city bus
market.
4.3
North America
Ballard to Supply 8 MW of Fuel Cell Engines to Stadler for Californian Passenger Rail
On December 9, 2025, we announced the signing of a multi-year supply agreement with Stadler US
(“Stadler”) to supply 8 megawatts of FCmove®-HD+ fuel cell engines to power trains for the California
Department of Transportation (Caltrans). The supply of the FCmove®-HD+ engines are expected to be
integrated into Stadler’s line of zero-emission passenger trains, the FLIRT H2.
The order builds on over three years of joint collaboration, including the successful integration of Ballard
fuel cell engines into the FLIRT H2, which became the first Federal Railroad Administration (FRA)
compliant hydrogen fuel cell powered passenger train demonstrated in the United States. The order
22
supports Caltrans’ purchase of 10 FLIRT H2 trains, with an option for an additional 19 trains, to
strengthen the state’s zero-emission passenger rail capabilities.
CPKC places follow-on order for approximately 20 MW of Ballard fuel cell engines for North American
locomotives
On December 5, 2025, we announced the signing of a new Long Term Supply Agreement (“LTSA”) with
Canadian Pacific Kansas City (“CPKC”), including the initial supply of 98 fuel cell engines for use in the
North American freight rail market. Each engine has a nameplate of 200 kW, totaling approximately 20
MW of fuel cell power. Deliveries of all 98 engines are expected in 2025.
The LTSA builds on an existing partnership between Ballard and CPKC, which started in 2021, and has
included delivery of approximately 10 MW of fuel cell engines to date and the successful integration of
Ballard fuel cell engines into hydrogen-powered locomotives for regular switching and freight service
applications in Alberta, Canada. The fuel cell engines purchased from Ballard are expected to support the
expansion of CPKC’s hydrogen locomotive program.
Prototype diesel freight locomotives retrofitted with hydrogen fuel cells, hydrogen storage and battery
packs have undergone various testing at CPKC since 2022. CPKC currently has three hydrogen
locomotives in operation.
Ballard announces purchase order to supply 200 fuel cell engines to New Flyer
On November 4, 2024, we announced a purchase order to supply 200 fuel cell engines to New Flyer, a
subsidiary of NFI Group Inc., a leading independent bus and coach manufacturer and a leader in electric
mass mobility solutions in North America and Europe.
The order of 200 fuel cell engines, representing a total of approximately 20 MW of power, is the second
purchase order under the long-term supply agreement announced in January 2024, and double the first
purchase order of 100 engines under this agreement. Delivery of the 200 engines is planned for 2025 and
are expected to power New Flyer’s next generation Xcelsior CHARGE FC™ hydrogen fuel cell buses for
deployment across the U.S., including California, Washington, Arizona, Nevada, and New York.
4.4
China and Rest of World
Ballard announces fuel cell engine order totaling approximately 5 MW for bus market
On March 4, 2025, we announced a multi-year supply agreement from Manufacturing Commercial
Vehicles (‘MCV’), a leading commercial vehicle manufacturer based in Egypt, for fuel cell engines totaling
approximately 5 MW.
The supply agreement for 50 FCmove®-HD+ engines, and initial order of 35 units, represents the
continued growth of the relationship with MCV which started in 2022 with fuel cell engine integration
support and the first fuel cell engine order placed in 2023. Deliveries of the 50 engines are expected
between 2025 and 2026 and will initially support projects in the EU.
Today, Ballard powers more than 1,800 fuel cell buses worldwide, which have collectively logged over 200
million miles of operational service. Ballard’s fuel cell engines have demonstrated a 99% availability rate
23
and zero reported safety incidents and offer an alternative to diesel engines without compromising on
routes, capacity, availability, or refueling times.
Weichai Power Co., Ltd. and Weichai Ballard Hy-Energy Technologies Co., Ltd.
On November 13, 2018, we announced the closing of a strategic collaboration transaction with Weichai.
Ballard’s strategic collaboration with Weichai included:
•
Equity Investment – an equity investment in Ballard made by Weichai representing a 19.9% interest in
the Company at that time. Weichai currently holds an approximate 15.4% interest in Ballard.
Ballard entered into an investor rights agreement with Weichai under which: (a) so long as Weichai
directly or indirectly holds at least 10% of Ballard’s outstanding shares, it has an anti-dilution right
entitling it to maintain its percentage ownership in Ballard by subscribing for Common Shares from
treasury at the same price as Ballard distributes Common Shares to other investors (to date,
Weichai’s anti-dilution rights with respect to all previous offerings of the Company have expired
unexercised); (b) for so long as Weichai directly or indirectly holds at least 15% of Ballard’s
outstanding Common Shares, it has the right to nominate two directors to Ballard’s board of directors;
and (c) if there is a third-party offer to buy Ballard, Weichai has the right to make a superior proposal
or otherwise it must vote its Common Shares in accordance with the recommendation of Ballard’s
board of directors.
•
China Joint Venture and Technology Transfer Agreement – Weichai and Ballard established a joint
venture company in Shandong Province in 2018 to support China’s Fuel Cell Electric Vehicle market,
with Weichai holding a controlling ownership interest of 51% and Ballard holding a 49% ownership
position. Weichai holds three of five Weichai Ballard JV board seats and Ballard holds two, with
Ballard having certain shareholder protection provisions.
Weichai Ballard JV develops and manufactures fuel cell modules and components including Ballard’s
LCS bi-polar plates, fuel cell stacks and FCgen®-LCS-based power modules for bus, commercial
truck, and forklift applications with exclusive rights (subject to certain conditions) in China and is to
pay Ballard a total of $90 million under a program to develop and transfer technology to Weichai
Ballard JV in order to enable these manufacturing activities. Revenue earned from the $90 million
Weichai Ballard JV technology transfer agreement ($nil million in the fiscal 2024; $2.3 million in the
fourth quarter of 2023; $4.9 million in fiscal 2023; $6.0 million in fiscal 2022; $18.2 million in fiscal
2021; $6.0 million in fiscal 2022; $18.2 million in fiscal 2021; $21.2 million in fiscal 2020; $22.5 million
in fiscal 2019; $1.2 million in fiscal 2018) is recorded primarily as technology solutions revenues in our
Heavy-Duty Mobility Truck market. During 2018, we received an initial $9.0 million program
prepayment from Weichai Ballard JV with additional amounts to be paid as program milestones are
successfully completed. We retain an exclusive right to the developed technologies outside China,
subject to certain restrictions on sublicensing outside China. The Weichai Ballard JV will also
purchase MEAs for FCgen®-LCS fuel cell stacks exclusively from Ballard under a long-term supply
agreement.
24
•
Fuel Cell Sales – In 2019, we announced the receipt of a purchase order from Weichai Ballard JV for
the delivery of MEAs valued at approximately $19 million under a long-term MEA supply agreement.
Revenue earned from this agreement ($nil million in the fourth quarter of 2024; $0.1 million in the
fiscal 2024; $1.5 million in the fourth quarter of 2023; $2.1 million in fiscal 2023) is recorded as
product revenue in our Heavy-Duty Mobility Truck market. As of December 31, 2024, an additional
$5.0 million of revenue associated with shipments on this order to Weichai Ballard JV remain
unrecognized until these products are ultimately sold by Weichai Ballard JV.
The Weichai Ballard JV operation, located in Weifang, Shandong Province, China, has commenced
production activities of LCS bi-polar plates, LCS fuel cell stacks and LCS-based modules to power bus
and truck FCEVs for the China market. The Weichai Ballard JV is expected to have annual production
capacity of 40,000 fuel cell stacks and 20,000 engines.
As a result of continued policy and other challenges in the China fuel cell market and underperformance
of the Weichai Ballard JV to date, we have initiated a strategic review of our China strategy with
consideration of all strategic options, including related to the Weichai Ballard JV and our relationship with
it.
5.
RESULTS OF OPERATIONS
5.1
Operating Segments
We report our results in the single operating segment of Fuel Cell Products and Services. Our Fuel Cell
Products and Services segment consists of the sale of PEM fuel cell products and services for a variety of
applications, including Heavy-Duty Mobility (consisting of bus, truck, rail, and marine applications),
Stationary Power, and Emerging and Other Markets (consisting of material handling, off-road, and other
applications). Revenues from the delivery of Services, including technology solutions, after sales services
and training, are included in each of the respective markets.
During the fourth quarter of 2023, we completed a restructuring of operations at Ballard Motive Solutions
in the U.K. and effectively closed the operation. As such, the historic operating results (including revenue
and operating expenses) of the Ballard Motive Solutions business have been removed from continuing
operating results and are instead presented separately in the statement of loss and comprehensive
income (loss) as loss from discontinued operations.
25
5.2
Summary of Key Financial Metrics – Three Months Ended December 31, 2024
Revenue and Gross Margin
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Heavy-Duty Mobility
$
16,818 $
29,004 $
(12,186)
(42%)
Bus
13,085
11,978
1,107
9%
Truck
598
5,991
(5,393)
(90%)
Rail
1,089
7,039
(5,950)
(85%)
Marine
2,046
3,996
(1,950)
(49%)
Stationary
6,934
12,805
(5,871)
(46%)
Emerging and Other
768
4,942
(4,174)
(84%)
Revenues
$
24,520 $
46,751 $
(22,231)
(48%)
Europe
$
16,669 $
24,907 $
(8,238)
(33%)
North America
7,123
15,106
(7,983)
(53%)
China
69
5,496
(5,427)
(99%)
Rest of World
659
1,242
(583)
(47%)
Revenues
24,520
46,751
(22,231)
(48%)
Cost of goods sold
27,747
56,918
(29,171)
(51%)
Gross Margin
$
(3,227) $
(10,167) $
6,940
68%
Gross Margin %
(13%)
(22%)
n/a
9 pts
Fuel Cell Products and Services Revenues of $24.5 million for the fourth quarter of 2024 decreased
(48%), or ($22.2) million, compared to the fourth quarter of 2023. The (48%) decrease was driven by
lower Heavy-Duty Mobility market, Stationary, and Emerging and Other revenues. Revenue declined in all
regions including Europe, North America, China and Rest of World.
Heavy-Duty Mobility revenues of $16.8 million in the fourth quarter of 2024 decreased ($12.2) million, or
(42%), due to lower sales of rail, truck and marine fuel cell products, partially offset by higher sales in the
bus sub-market. Heavy-Duty Mobility revenues on a quarter-to-quarter basis are impacted by product mix
due to varying customer requirements and various fuel cell products, including numerous power
configurations required by our customers (and the resulting impact on selling price) of our fuel cell
modules, fuel cell stacks, MEAs, and related component and parts kits. Heavy-Duty Mobility revenues of
$16.8 million in the fourth quarter of 2024 includes service revenues of $nil million earned on the Weichai
Ballard JV technology transfer program; $0.1 million from Weichai Ballard JV for the supply of a mix of
certain fuel cell products and components that will be used in the assembly of modules to power zero-
emission FCEVs in China; and $16.7 million from a variety of customers in Europe, North America, China,
and the rest of the world, primarily for shipments of FCmove™-HD, FCmove™-HD+, FCmove™-XD, and
FCwave™ fuel cell modules and related components for their respective bus, truck, rail and marine
programs.
Heavy-Duty Mobility revenues of $29.0 million in the fourth quarter of 2023 includes service revenues of
$2.3 million earned on the Weichai Ballard JV technology transfer program; $2.3 million from Weichai
Ballard JV for the supply of a mix of certain fuel cell products and components that will be used in the
26
assembly of modules to power zero-emission FCEVs in China; and $24.4 million from a variety of
customers in Europe, North America, China, and the rest of the world.
Stationary revenues of $6.9 million in the fourth quarter of 2024 decreased ($5.9) million, or (46%), due to
lower sales of stationary power generation fuel cell modules, stacks, products and services primarily in
Europe and North America. Stationary revenues also include technology solutions program revenues from
a variety of customer programs for stationary applications.
Emerging and Other market revenues of $0.8 million decreased ($4.2) million, or (84%), due primarily to
lower sales of fuel cell modules for mining and off-road applications and lower fuel cell stack shipments
for material handling applications.
Fuel Cell Products and Services gross margins were ($3.2) million, or (13%) of revenues, for the fourth
quarter of 2024, compared to ($10.2) million, or (22%) of revenues, for the fourth quarter of 2023. The
negative gross margin in the fourth quarter of 2024 was driven primarily by the impacts of revenue scaling
and manufacturing cost absorption and by a shift to lower overall product margin and service revenue mix
including the impacts of pricing strategy, declines of higher margin engineering services revenues, higher
fixed overhead costs due to cost structure, and increases in product component supply costs.
Gross margin in the fourth quarter of 2024 was also positively impacted by net warranty adjustments of
$2.1 million due to better than expected performance; and negatively impacted by inventory impairment
adjustments and net increases in onerous contract provisions of ($1.3) million. Gross margin in the fourth
quarter of 2023 was negatively impacted by inventory impairment adjustments and onerous contract
provisions of ($10.7) million; and positively impacted by net warranty adjustments of $0.3 million.
Operating Expenses and Cash Operating Costs
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Research and Product Development
$
19,909
$
24,459
$
(4,550)
(19%)
General and Administrative
6,275
5,042
1,233
24%
Sales and Marketing
3,066
3,716
(650)
(17%)
Operating Expenses
$
29,250
$
33,217
$
(3,967)
(12%)
Research and Product Development (cash
operating cost)
$
19,426
$
21,337
$
(1,911)
(9%)
General and Administrative (cash operating
cost)
4,615
4,233
382
9%
Sales and Marketing (cash operating cost)
3,152
3,380
(228)
(7%)
Cash Operating Costs
$
27,193
$
28,950
$
(1,757)
(6%)
Cash Operating Costs and its components of Research and Product Development (cash operating cost), General and Administrative (cash operating cost), and Sales and
Marketing (cash operating cost) are non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP measures do not
have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. See the reconciliation of
Cash Operating Costs to GAAP in the Supplemental Non-GAAP Measures and Reconciliations section and the reconciliation of Research and Product Development (cash
operating cost), General and Administrative (cash operating cost), and Sales and Marketing (cash operating cost) to GAAP in the Operating Expense section. Cash Operating
Costs adjusts operating expenses for stock-based compensation expense, depreciation and amortization, impairment losses on trade receivables, restructuring charges, the
impact of unrealized gains or losses on foreign exchange contracts, acquisition related costs, and financing charges.
Total Operating Expenses (excluding Other operating expenses) for the fourth quarter of 2024 were $29.2
million, a decrease of ($4.0) million, or (12%), compared to the fourth quarter of 2023. The (12%)
decrease was driven by lower research and product development expenses of ($4.6) million and lower
27
sales and marketing expenses of ($0.7) million, partially offset by higher general and administrative
expenses of $1.2 million.
Cash Operating Costs (see Supplemental Non-GAAP Measures and Reconciliations) for the fourth
quarter of 2024 were $27.2 million, a decrease of ($1.8) million, or (6%), compared to the fourth quarter of
2023. The (6%) decrease was driven by lower research and product development cash operating costs of
($1.9) million and lower sales and marketing cash operating costs of ($0.2) million, partially offset by
higher general and administrative cash operating costs of $0.4 million.
The ($1.8) million, or (6%), decrease in cash operating costs in the fourth quarter of 2024 was driven
primarily by the initial impacts of a global corporate restructuring initiated in September 2024 which
included a reduction in workforce, a rationalization in product development programs, and operational
consolidation. These cost savings were partially offset by the impact of inflationary wage pressures in
2024 as we continue to incur significant expenditures on technology and product development initiatives
including the design and development of next generation fuel cell stacks and engines for bus, truck, rail,
marine and stationary applications, and continuation engineering investment in our existing fuel cell
products, including activities related to product cost reduction.
Adjusted EBITDA
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Adjusted EBITDA
$
(36,004)
$
(44,083)
$
8,079
18%
EBITDA and Adjusted EBITDA are non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP measures do not
have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. See reconciliation of
Adjusted EBITDA to GAAP in the Supplemental Non-GAAP Measures and Reconciliations section. Adjusted EBITDA adjusts EBITDA for stock-based compensation expense,
transactional gains and losses, acquisition related costs, finance and other income, recovery on settlement of contingent consideration, asset impairment charges, and the
impact of unrealized gains and losses on foreign exchange contracts.
Adjusted EBITDA (see Supplemental Non-GAAP Measures and Reconciliations) for the fourth quarter of
2024 was ($36.0) million, compared to ($44.1) million for the fourth quarter of 2023. The decrease in
Adjusted EBITDA loss of $8.1 million was driven primarily by the decrease in gross margin loss of $6.9
million, lower Cash Operating Costs of $1.8 million, and lower equity in loss of investment in joint venture
and associates of $1.8 million attributed to the operations of Weichai Ballard JV. These improvements
were partially offset by increased impairment losses on trade receivables of ($1.8) million and higher
restructuring and related expenses of ($0.4) million.
Net Loss from Continuing Operations
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Net loss from Continuing Operations
$
(46,471)
$
(48,889)
$
2,418
5%
Net loss from continuing operations for the fourth quarter of 2024 was ($46.5) million, or ($0.16) per
share, compared to a net loss from continuing operations of ($48.9) million, or ($0.16) per share, in the
fourth quarter of 2023. The $2.4 million decrease in net loss in the fourth quarter of 2024 was driven
primarily by the decrease in Adjusted EBITDA loss of $8.1 million, lower depreciation and amortization
expense of $2.5 million, and lower stock-based compensation expense of $1.5 million. These
improvements were partially offset by increased impairment charges on property, plant and equipment
and intangible assets of ($3.9) million, lower finance and other income of ($4.0) million, and increased
losses on forward foreign exchange contracts of ($1.5) million.
28
In addition, operating margins, and costs in the fourth quarter of 2024 were impacted by the positive
impact of a weaker Canadian dollar, relative to the U.S. dollar, as compared to the fourth quarter of 2023.
As a significant amount of our net operating costs (primarily labour) are denominated in Canadian dollars,
gross margin, operating expenses, Adjusted EBITDA, and net loss are impacted by changes in the
Canadian dollar relative to the U.S. dollar. As the Canadian dollar relative to the U.S. dollar was
approximately (3%), or (200) basis points, lower in the fourth quarter of 2024 as compared to the fourth
quarter of 2023, positive foreign exchange impacts on our Canadian operating margins and cost base
were approximately $0.6 million. A $0.01 decrease in the Canadian dollar, relative to the U.S. dollar,
positively impacts annual operating margins and costs by approximately $1.2 million.
Net Loss from Discontinued Operations
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Revenues
$
— $
323
$
(323)
(100%)
Cost of goods sold
—
108
(108)
(100%)
Gross margin
—
215
(215)
(100%)
Operating expenses
—
(2,699)
2,699
100%
Finance and other income (loss)
—
125
(125)
(100%)
Net loss from discontinued operations
$
— $
(2,359)
$
2,359
100%
Net loss from discontinued operations for the fourth quarter of 2024 was $nil million, or $nil per share,
compared to ($2.4) million, or ($0.01) per share, for the fourth quarter of 2024. During the fourth quarter of
2023, we completed a restructuring of operations at Ballard Motive Solutions in the U.K. and effectively
closed the operation. As such, the historic operating results of the Ballard Motive Solutions business have
been removed from continuing operating results and are instead presented separately in the statement of
comprehensive income (loss) as loss from discontinued operations.
29
5.3
Summary of Key Financial Metrics – Year Ended December 31, 2024
Revenue and Gross Margin
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Heavy-Duty Mobility
$
53,390 $
66,657 $
(13,267)
(20%)
Bus
44,163
29,265
14,898
51%
Truck
3,714
10,961
(7,247)
(66%)
Rail
2,647
19,100
(16,453)
(86%)
Marine
2,866
7,331
(4,465)
(61%)
Stationary
12,757
21,707
(8,950)
(41%)
Emerging and Other
3,584
14,004
(10,420)
(74%)
Revenues
$
69,731 $
102,368 $
(32,637)
(32%)
Europe
$
47,153 $
48,958 $
(1,805)
(4%)
North America
17,997
37,736
(19,739)
(52%)
China
2,631
11,980
(9,349)
(78%)
Rest of World
1,950
3,694
(1,744)
(47%)
Revenues
69,731
102,368
(32,637)
(32%)
Cost of goods sold
91,713
124,199
(32,486)
(26%)
Gross Margin
$
(21,982) $
(21,831) $
(151)
(-%)
Gross Margin %
(32%)
(21%)
n/a
(11 pts)
Fuel Cell Products and Services Revenues of $69.7 million for 2024 decreased (32%), or ($32.6) million,
compared to 2023. The (32%) decrease was driven by lower Heavy-Duty Mobility, Emerging and Other,
and Stationary market revenues. Revenue declined in all regions including North America, China, Rest of
World, and Europe.
Heavy-Duty Mobility revenues of $53.4 million in 2024 decreased ($13.3) million, or (20%), due to lower
sales of rail, truck and marine fuel cell products, partially offset by higher sales in the bus sub-market.
Heavy-Duty Mobility revenues on a quarter-to-quarter basis are impacted by product mix due to varying
customer requirements and various fuel cell products, including numerous power configurations required
by our customers (and the resulting impact on selling price) of our fuel cell modules, fuel cell stacks,
MEAs, and related component and parts kits. Heavy-Duty Mobility revenues of $53.4 million in 2024
includes service revenues of $nil million earned on the Weichai Ballard JV technology transfer program;
$2.5 million from Weichai Ballard JV for the supply of a mix of certain fuel cell products and components
that will be used in the assembly of modules to power zero-emission FCEVs in China; and $50.9 million
from a variety of customers in Europe, North America, China, and the rest of the world, primarily for
shipments of FCmove™-HD, FCmove™-HD+, FCmove™-XD, and FCwave™fuel cell modules and related
components for their respective bus, truck, rail and marine programs.
Heavy-Duty Mobility revenues of $66.7 million in 2023 includes service revenue of $4.9 million earned on
the Weichai Ballard JV technology transfer program; $3.2 million from Weichai Ballard JV for the supply of
a mix of certain fuel cell products and components that will be used in the assembly of modules to power
zero-emission FCEVs in China; $1.7 million of product and service revenues from Synergy Ballard JVCo;
and $56.9 million from a variety of customers in Europe, North America, China, and the rest of the world.
30
Stationary revenues of $12.8 million in 2024 decreased ($9.0) million, or (41%), due to lower sales of
stationary power generation fuel cell modules, stacks, products and services primarily in Europe and
North America. Stationary revenues also include technology solutions program revenues from a variety of
customer programs for stationary applications.
Emerging and Other market revenues of $3.6 million in 2024 decreased ($10.4) million, or (74%), due
primarily to lower fuel cell stack shipments for material handling applications and lower sales of fuel cell
modules primarily for mining and off-road applications.
Fuel Cell Products and Services gross margins were ($22.0) million, or (32%) of revenues, for 2024,
compared to ($21.8) million, or (21%) of revenues, for 2023. The negative gross margin in 2024 was
driven primarily by the impacts of revenue scaling and manufacturing cost absorption and by a shift to
lower overall product margin and service revenue mix including the impacts of pricing strategy, declines of
higher margin engineering services revenues, higher fixed overhead costs due to cost structure, and
increases in product component supply costs.
Gross margin in 2024 was also negatively impacted by inventory impairment adjustments and net
increases in onerous contract provisions of ($5.7) million; and positively impacted by net warranty
adjustments of $4.0 million due to better than expected performance. Gross margin in 2023 was
negatively impacted by net increases in inventory impairment and onerous contract provisions of ($15.0)
million; and negatively impacted by net warranty adjustments of ($0.3 million).
Operating Expenses and Cash Operating Costs
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Research and Product Development
$
94,494
$ 98,306
$
(3,812)
(4%)
General and Administrative
23,516
23,874
(358)
(1%)
Sales and Marketing
13,502
15,110
(1,608)
(11%)
Operating Expenses
$
131,512
$ 137,290
$
(5,778)
(4%)
Research and Product Development (cash operating cost)
$
84,590
$ 86,248
$
(1,658)
(2%)
General and Administrative (cash operating cost)
18,617
19,513
(896)
(5%)
Sales and Marketing (cash operating cost)
12,724
13,566
(842)
(6%)
Cash Operating Costs
$
115,931
$ 119,327
$
(3,396)
(3%)
Cash Operating Costs and its components of Research and Product Development (cash operating cost), General and Administrative (cash operating cost), and Sales and
Marketing (cash operating cost) are non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP measures do not
have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. See the reconciliation of
Cash Operating Costs to GAAP in the Supplemental Non-GAAP Measures and Reconciliations section and the reconciliation of Research and Product Development (cash
operating cost), General and Administrative (cash operating cost), and Sales and Marketing (cash operating cost) to GAAP in the Operating Expense section. Cash Operating
Costs adjusts operating expenses for stock-based compensation expense, depreciation and amortization, impairment losses on trade receivables, restructuring charges, the
impact of unrealized gains or losses on foreign exchange contracts, acquisition related costs, and financing charges.
Total Operating Expenses (excluding Other operating expenses) for 2024 were $131.5 million, a decrease
of ($5.8) million, or (4%), compared to 2023. The (4%) decrease was driven by lower research and
product development expenses of ($3.8) million, lower sales and marketing expenses of ($1.6) million,
and lower general and administrative expenses of ($0.4) million.
Cash Operating Costs (see Supplemental Non-GAAP Measures and Reconciliations) for 2024 were
$115.9 million, a decrease of ($3.4) million, or (3%), compared to 2023. The (3%) decrease was driven by
31
lower research and product development expenses of ($1.7) million, lower general and administrative
expenses of ($0.9) million, and lower sales and marketing expenses of ($0.8) million.
The ($3.4) million, or (3%), decrease in cash operating costs in 2024 was driven primarily by the initial
impacts of a global corporate restructuring initiated in September 2024 which included a reduction in
workforce, a rationalization in product development programs, and operational consolidation. These cost
savings were partially offset by the impact of inflationary wage pressures in 2024 as we continue to incur
significant expenditures on technology and product development initiatives including the design and
development of next generation fuel cell stacks and engines for bus, truck, rail, marine and stationary
applications, and continuation engineering investment in our existing fuel cell products, including activities
related to product cost reduction.
Program investment includes expenditures related to our FCmove™-HD+ and FCmove XD fuel cell
modules (our recently released 9th generation fuel cell engine) designed for buses and medium and
heavy-duty trucks, our FCgen®-HPS High-Power Density Fuel Cell Stack for light-medium-and heavy-
duty vehicles, our FCwave™ Fuel Cell Module for high power applications, and on the ongoing
improvement of all of our fuel cell products including our high performance fuel cell module, the
FCmove™-HD, and our high performance liquid-cooled fuel cell stack, the FCgen®-LCS.
Adjusted EBITDA
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Adjusted EBITDA
$
(168,133)
$
(150,088)
$
(18,045)
(12%)
EBITDA and Adjusted EBITDA are non-GAAP measures. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP measures do not
have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. See reconciliation of
Adjusted EBITDA to GAAP in the Supplemental Non-GAAP Measures and Reconciliations section. Adjusted EBITDA adjusts EBITDA for stock-based compensation
expense, transactional gains and losses, acquisition related costs, finance and other income, recovery on settlement of contingent consideration, asset impairment charges,
and the impact of unrealized gains and losses on foreign exchange contracts.
Adjusted EBITDA (see Supplemental Non-GAAP Measures and Reconciliations) for 2024 was ($168.1)
million, compared to ($150.1) million for 2023. The increase in Adjusted EBITDA loss of ($18.0) million
was driven primarily by higher restructuring and related expenses of ($15.5) million, higher impairment
losses on trade receivables of ($11.3) million, and by an increase in gross margin loss of ($0.2) million.
These declines were partially offset by lower Cash Operating Costs of $3.4 million, and lower equity in
loss of investment in joint venture and associates of $5.2 million attributed to the operations of Weichai
Ballard JV.
Restructuring and related expenses in 2024 of $17.0 million (included in Adjusted EBITDA loss) relate
primarily to a global corporate restructuring initiated in September 2024 consisting primarily of cost
reduction measures including a reduction in workforce, a rationalization of products and product
development activities, and a reduction or cancellation of certain capital projects. Restructuring expenses
include personnel severance costs, inventory impairment charges related to product rationalization,
contract exit and modification costs, grant adjustment charges, and legal and advisory costs, net of any
expected recoveries.
32
Net Loss from Continuing Operations
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Net loss from Continuing Operations
$
(323,530)
$
(144,210)
$
(179,320)
(124%)
Net loss from continuing operations for 2024 was ($323.5) million, or ($1.08) per share, compared to a net
loss from continuing operations of ($144.2) million, or ($0.48) per share, in 2023. The ($179.3) million
increase in net loss in 2024 was driven primarily by the increase in Adjusted EBITDA loss of ($18.0)
million, impairment charges on goodwill of ($40.3) million, increased impairment charges on property,
plant and equipment of ($110.1) million, impairment charges on intangible assets of ($0.7) million, lower
finance and other income of ($12.1) million, and higher finance expense of ($1.0) million, partially offset
by lower stock-based compensation expense of $3.3 million.
Goodwill impairment charges of ($40.3) million in 2024 consist of a write-down of the remaining corporate
goodwill balance to $nil as a result of the decline in the Company’s market capitalization. Property, plant
and equipment impairment charges of ($111.0) million in 2024 consist of a net impairment allowance
against consolidated assets of ($95.1) million to impair these operating assets to their estimated residual
value, and a write-down of certain specific assets of ($15.9) million located in Canada, Denmark and
China primarily as a result of the global corporate restructuring initiative initiated in September 2024.
The ($12.1) million decrease in finance and other income in 2024, as compared to 2023, was due to lower
investment income of ($6.5) million, higher negative mark to market and foreign exchange impacts of
($1.9) million on our long-term investments including Forsee Power, Wisdom, Quantron, HyCap, Clean
H2 and Templewater, and by higher foreign exchange losses on net monetary assets of ($4.0) million.
In addition, operating margins, and costs in 2024 were impacted by the positive impact of a weaker
Canadian dollar, relative to the U.S. dollar, as compared to 2023. As a significant amount of our net
operating costs (primarily labour) are denominated in Canadian dollars, gross margin, operating
expenses, Adjusted EBITDA, and net loss are impacted by changes in the Canadian dollar relative to the
U.S. dollar. As the Canadian dollar relative to the U.S. dollar was approximately (1.5%), or (140) basis
points, lower in 2024 as compared to 2023, positive foreign exchange impacts on our Canadian operating
margins and cost base were approximately $1.6 million. A $0.01 decrease in the Canadian dollar, relative
to the U.S. dollar, positively impacts annual operating margins and costs by approximately $1.2 million.
Net Loss from Discontinued Operations
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Revenues
$
— $
934 $
(934)
(100%)
Cost of goods sold
—
607
(607)
(100%)
Gross margin
—
327
(327)
(100%)
Operating expenses
(720)
(7,913)
7,193
91%
Finance and other (income) loss
5
337
(332)
(99%)
Impairment charges on intangible assets
—
(2,266)
2,266
100%
Impairment charges on goodwill
—
(23,991)
23,991
100%
Net loss from discontinued operations
$
(715) $
(33,506) $
32,791
98%
Net loss from discontinued operations for 2024 was ($0.7) million, or ($nil) per share, compared to ($33.5)
million, or ($0.11) per share, in 2023. During the fourth quarter of 2023, we completed a restructuring of
33
operations at Ballard Motive Solutions in the U.K. and effectively closed the operation. As such, the
historic operating results of the Ballard Motive Solutions business have been removed from continuing
operating results and are instead presented separately in the statement of comprehensive income (loss)
as loss from discontinued operations.
5.4
Operating Expenses and Other Items – Three Months and Year ended December 31, 2024
Research and product development expenses
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
Research and product development
2024
2023
$ Change
% Change
Research and product development expense
$
19,909 $
24,459 $
(4,550)
(19%)
Less: Depreciation and amortization expense
$
141 $
(1,832) $
1,973
108%
Less: Stock-based compensation expense
$
(624) $
(1,290) $
666
52%
Research and Product Development (cash operating cost)
$
19,426 $
21,337 $
(1,911)
(9%)
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Research and product development
2024
2023
$ Change
% Change
Research and product development expense
$
94,494 $
98,306 $
(3,812)
(4%)
Less: Depreciation and amortization expense
$
(5,587) $
(6,538) $
951
15%
Less: Stock-based compensation expense
$
(4,317) $
(5,520) $
1,203
22%
Research and Product Development (cash operating cost)
$
84,590 $
86,248 $
(1,658)
(2%)
Research and Product Development (cash operating cost) is a non-GAAP measure. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-
GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.
Research and Product Development (cash operating cost) adjusts Research and product development expense for depreciation and amortization expense and stock-based
compensation expense. See the reconciliation of the adjustments to Research and product development expense in the table above.
Research and product development expenses for the three months ended December 31, 2024,
were $19.9 million, a decrease of ($4.6) million, or (19%), compared to the corresponding period of 2023.
Excluding depreciation and amortization expense and stock-based compensation expense, research, and
product development cash operating costs (see Supplemental Non-GAAP Measures and Reconciliations)
were $19.4 million in the fourth quarter of 2024, a decrease of ($1.9) million, compared to the fourth
quarter of 2023.
Research and product development expenses for the year ended December 31, 2024, were $94.5
million, a decrease of ($3.8) million, or (4%), compared to the corresponding period of 2023. Excluding
depreciation and amortization expense and stock-based compensation expense, research and product
development cash operating costs (see Supplemental Non-GAAP Measures and Reconciliations) were
$84.6 million in 2024, a decrease of ($1.7) million, (2%), compared to 2023.
The respective ($1.9) million, or (9%), and ($1.7) million, or (2%), decreases in research and development
cash operating costs (see Supplemental Non-GAAP Measures and Reconciliations) in the fourth quarter
and fiscal year 2024, as compared to the fourth quarter and fiscal year 2023, was driven primarily by the
initial impacts of a global corporate restructuring initiated in September 2024 which included a reduction in
workforce, a rationalization in product development programs, and operational consolidation. These cost
savings were partially offset by the impact of inflationary wage pressures in 2024. Expenses in 2024
include expenditures on technology and product development activities including the design and
development of next generation fuel cell stacks and engines for bus, truck, rail, marine and stationary
applications, and continuation engineering investment in our existing fuel cell products, including activities
related to product cost reduction. Program investment includes expenditures related to our FCmove™-
HD+ and FCmove XD fuel cell modules (our recently released 9th generation fuel cell engine) designed for
buses and medium and heavy-duty trucks, our FCgen®-HPS High-Power Density Fuel Cell Stack for
light-medium-and heavy-duty vehicles, our FCwave™ Fuel Cell Module for high power applications, and
34
on the ongoing improvement of all of our fuel cell products including our high performance fuel cell
module, the FCmove™-HD, and our high performance liquid-cooled fuel cell stack, the FCgen®-LCS.
Depreciation and amortization expense (recovery) included in research and product development
expense for the three months and year ended December 31, 2024 was ($0.1) million and $5.6 million,
respectively, compared to $1.8 million and $6.5 million, respectively, for the corresponding periods of
2023. Depreciation and amortization expense relate primarily to depreciation expense on our increased
investment in research and product development facilities and equipment.
Stock-based compensation expense included in research and product development expense for the three
months and year ended December 31, 2024 was $0.6 million and $4.3 million, respectively, compared to
$1.3 million and $5.5 million, respectively, for the corresponding periods of 2023. The decrease in 2024
was due primarily to certain equity awards no longer expected to meet their vesting criteria.
General and administrative expenses
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
General and administrative
2024
2023
$ Change
% Change
General and administrative expense
$
6,275 $
5,042 $
1,233
24%
Less: Depreciation and amortization expense
$
(278) $
(556) $
278
50%
Less: Stock-based compensation expense
$
(530) $
(949) $
419
44%
Add: Impact of unrealized gains (losses) on foreign
exchange contracts
$
(852) $
696 $
(1,548)
(222%)
General and Administrative (cash operating cost)
$
4,615 $
4,233 $
382
9%
(Expressed in thousands of U.S. dollars)
Year ended December 31,
General and administrative
2024
2023
$ Change
% Change
General and administrative expense
$
23,516 $
23,874 $
(358)
(1)%
Less: Depreciation and amortization expense
$
(1,441) $
(1,997) $
556
28%
Less: Stock-based compensation expense
$
(2,363) $
(3,660) $
1,297
35%
Add: Impact of unrealized gains (losses) on foreign
exchange contracts
$
(1,095) $
1,296 $
(2,391)
(184%)
General and Administrative (cash operating cost)
$
18,617 $
19,513 $
(896)
(5%)
General and Administrative (cash operating cost) is a non-GAAP measure. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP
measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. General
and Administrative (cash operating cost) adjusts General and administrative expense for depreciation and amortization expense, stock-based compensation expense and the
impact of unrealized gains or losses on foreign exchange contracts. See the reconciliation of the adjustments to General and administrative expense in the table above.
General and administrative expenses for the three months ended December 31, 2024, were $6.3
million, an increase of $1.2 million, or 24%, compared to the corresponding period of 2023. Excluding
depreciation and amortization expense, stock-based compensation expense, and the impact of unrealized
gains (losses) on foreign exchange contracts, general and administrative cash operating costs (see
Supplemental Non-GAAP Measures and Reconciliations) were $4.6 million in the fourth quarter of 2024,
an increase of $0.4 million, or 9%, compared to the fourth quarter of 2023.
General and administrative expenses for the year ended December 31, 2024, were $23.5 million, a
decrease of ($0.4) million, or (1%), compared to the corresponding period of 2023. Excluding depreciation
and amortization expense, stock-based compensation expense, and the impact of unrealized gains
(losses) on foreign exchange contracts, general and administrative cash operating costs (see
Supplemental Non-GAAP Measures and Reconciliations) were $18.6 million in 2024, a decrease of ($0.9)
million, or (5%), compared to 2023.
The $0.4 million, or 9%, increase in general and administrative cash operating costs (see Supplemental
Non-GAAP Measures and Reconciliations) in the fourth quarter of 2024, as compared to the fourth
35
quarter of 2023, was due primarily to higher audit and related costs combined with the impact of
inflationary wage pressures, partially offset by the initial impacts of a global corporate restructuring
initiated in September 2024 which included a reduction in workforce.
The ($0.9) million, or (5%), decrease in general and administrative cash operating costs (see
Supplemental Non-GAAP Measures and Reconciliations) in 2024, as compared to 2023, was due
primarily to lower consulting and contractor services, recruiting, and insurance costs, partially offset by the
impact of inflationary wage pressures.
Depreciation and amortization expense included in general and administrative expense for the three
months and year ended December 31, 2024 was $0.3 million and $1.4 million, respectively, compared to
$0.6 million and $2.0 million, respectively, for the corresponding periods of 2023. Depreciation and
amortization expense relate primarily to our office and information technology intangible assets including
our ongoing investment in our ERP system.
Stock-based compensation expense included in general and administrative expense (recovery) for the
three months and year ended December 31, 2024 $0.5 million and $2.4 million, respectively, compared to
$0.9 million and $3.7 million, respectively, for the corresponding periods of 2023. The decrease in 2024
was due primarily to certain equity awards no longer expected to meet their vesting criteria.
The impact of unrealized (gains) losses on foreign exchange contracts included in general and
administrative expense for the three months and year ended December 31, 2024, was $0.9 million and
$1.1 million, respectively, compared to ($0.7) million and ($1.3) million, respectively, for the corresponding
periods of 2023. We use forward foreign exchange contracts to help manage our exposure to currency
rate fluctuations. We record these contracts at their fair value as of the balance sheet date as either
assets or liabilities with any changes in fair value in the period recorded in profit or loss (general and
administrative expense) as these contracts are not designated or qualified under hedge accounting
criteria.
Sales and marketing expenses
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
Sales and marketing
2024
2023
$ Change
% Change
Sales and marketing expense
$
3,066 $
3,716 $
(650)
(17%)
Less: Depreciation and amortization expense
$
— $
— $
—
-%
Less: Stock-based compensation expense
$
86 $
(336) $
422
126%
Sales and Marketing (cash operating cost)
$
3,152 $
3,380 $
(228)
(7%)
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Sales and marketing
2024
2023
$ Change
% Change
Sales and marketing expense
$
13,502 $
15,110 $
(1,608)
(11%)
Less: Depreciation and amortization expense
$
(2) $
(4) $
2
50%
Less: Stock-based compensation expense
$
(776) $
(1,540) $
764
50%
Sales and Marketing (cash operating cost)
$
12,724 $
13,566 $
(842)
(6%)
Sales and Marketing (cash operating cost) is a non-GAAP measure. We use certain Non-GAAP measures to assist in assessing our financial performance. Non-GAAP
measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Sales
and Marketing (cash operating cost) adjusts Sales and marketing expense for depreciation and amortization expense and stock-based compensation expense. See the
reconciliation of the adjustments to Sales and marketing expense in the table above.
Sales and marketing expenses for the three months ended December 31, 2024, were $3.1 million, a
decrease of ($0.7) million, or (17%), compared to the corresponding period of 2023. Excluding stock-
based compensation expense, sales and marketing cash operating costs (see Supplemental Non-GAAP
36
Measures and Reconciliations) was $3.2 million in the fourth quarter of 2024, a decrease of ($0.2) million,
or (7%), compared to the fourth quarter of 2023.
Sales and marketing expenses for the year ended December 31, 2024 were $13.5 million, a decrease
of ($1.6) million, or (11%), compared to the corresponding period of 2023. Excluding stock-based
compensation expense, sales and marketing cash operating costs (see Supplemental Non-GAAP
Measures and Reconciliations) was $12.7 million in 2024, a decrease of ($0.8) million, or (6%), compared
to 2023.
The ($0.2) million, or (7%), and ($0.8) million, or (6%), decrease in sales and marketing cash operating
costs (see Supplemental Non-GAAP Measures and Reconciliations) in the fourth quarter and fiscal year
2024, as compared to the fourth quarter and fiscal year 2023, was due primarily to decreased commercial
expenditures primarily in Europe and China, partially offset by the impact of inflationary wage pressures.
Stock-based compensation expense included in sales and marketing expense for the three months and
year ended December 31, 2024 was ($0.1) million and $0.8 million, respectively, compared to $0.3 million
and $1.5 million, respectively, for the corresponding periods of 2023. The decrease in 2024 was due
primarily to certain equity awards no longer expected to meet their vesting criteria.
Other operating expenses for the three months and year ended December 31, 2024, was $3.9
million and $29.8 million, respectively, compared to $1.8 million and $3.8 million, respectively, for the
corresponding periods of 2023. The following table provides a breakdown of other operating expense for
the reported periods:
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Impairment loss on trade receivables
$
3,206 $
1,436 $
1,770
123%
Restructuring and related costs (recovery)
708
322
386
120%
Acquisition related costs
—
(3)
(3)
(100%)
Other expenses (recovery)
$
3,914 $
1,755 $
2,159
123%
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Impairment loss on trade receivables
$
12,760 $
1,498 $
11,262
751%
Restructuring and related costs (recovery)
17,046
1,512
15,534
1027%
Acquisition related costs
—
773
(773)
(100%)
Other expenses (recovery)
$
29,806 $
3,783 $
26,023
688%
Impairment loss on trade receivables for the three months and year ended December 31, 2024 were $3.2
million and $12.8 million, respectively, compared to $1.4 million and $1.5 million, respectively, for the
corresponding periods of 2023, and consist primarily of receivables from certain customers in China no
longer deemed collectable. If we recover on an impaired trade receivable through legal or other means,
the recovered amount is recognized in the period of recovery as a reversal of the impairment loss.
Restructuring and related costs (recovery) for the three months and year ended December 31, 2024 were
$0.7 million and $17.0 million, respectively, compared to $0.3 million and $1.5 million, respectively, for the
37
corresponding periods of 2023. Restructuring and related expenses relate primarily to a global corporate
restructuring initiated in September 2024 consisting of cost reduction measures including a reduction in
workforce, a rationalization of products and product development activities, and a reduction or
cancellation of certain capital projects. Restructuring expenses include personnel severance costs,
inventory impairment charges related to product rationalization, contract exit and modification costs, grant
adjustment charges, and legal and advisory costs, net of any expected recoveries.
Acquisition related costs for 2024 were nominal, compared to $0.8 million for 2023, and consist primarily
of legal, advisory, and transaction related costs incurred due to corporate development activities.
Finance income (loss) and other for the three months and year ended December 31, 2024 was
($2.1) million and $18.9 million, respectively, compared to $1.9 million and $31.1 million for the
corresponding periods of 2023. The following table provides a breakdown of finance and other income
(loss) for the reported periods:
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
% Change
Employee future benefit plan expense
$
(9) $
(15) $
6
40%
Investment and other income (loss)
7,643
10,906
(3,263)
(30%)
Mark to Market gain (loss) on financial assets
(7,417)
(10,329)
2,912
28%
Foreign exchange gain (loss)
(2,296)
1,309
(3,605)
(277%)
Government levies
—
—
—
-%
Finance income (loss) and other
$
(2,079) $
1,871 $
(3,950)
(211%)
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
% Change
Employee future benefit plan expense
$
(20) $
(109) $
89
82%
Investment and other income (loss)
36,885
43,340
(6,455)
(15%)
Mark to Market gain (loss) on financial assets
(14,788)
(12,897)
(1,891)
(15%)
Foreign exchange gain (loss)
(3,144)
821
(3,965)
(483%)
Government levies
—
(100)
100
100%
Finance income (loss) and other
$
18,933 $
31,055 $
(12,122)
(39%)
Employee future benefit plan expense for the three months and year ended December 31, 2024 and 2023
were nominal and consist primarily of interest cost on plan obligations over the expected return on plan
assets on a curtailed and now terminated defined benefit pension plan for certain former United States
employees.
Investment and other income for the three months and year ended December 31, 2024 were $7.6 million
and $36.9 million, respectively, compared to $10.9 million and $43.3 million, respectively, for the
corresponding periods of 2023. Amounts were earned on our cash, cash equivalents and short-term
investments and have changed proportionately with the relative change in our overall average monthly
cash balances and the overall change in the underlying market rates during 2024 and 2023.
38
Mark to market gain (loss) on financial assets for the three months and year ended December 31, 2024
were ($7.4) million and ($14.8) million, respectively, compared to ($10.3) million and ($12.9) million,
respectively, for the corresponding periods of 2023. Mark to market gain (loss) consist primarily of
changes in the fair value of our long-term financial investments including Forsee Power, Wisdom,
Quantron, Templewater, HyCap and Clean H2. Mark to market gains and losses are also impacted by the
conversion of these long-term financial assets from their respective European Euro or Great British pound
denominated investment to the U.S. dollar.
Foreign exchange gains (losses) for the three months and year ended December 31, 2024 were ($2.3)
million and ($3.1) million, respectively, compared to $1.3 million and $0.8 million, respectively, for the
corresponding periods of 2023. Foreign exchange gains and losses are attributable primarily to the effect
of changes in the value of the Canadian dollar, relative to the U.S. dollar, on our Canadian dollar-
denominated net monetary position. Foreign exchange gains and losses are also impacted by the
conversion of Ballard Power Systems Europe A/S’ assets and liabilities from the Danish Kroner to the
U.S. dollar at exchange rates in effect at each reporting date which are recorded in other comprehensive
income (loss).
Government levies for the year ended December 31, 2024 were nominal, compared to ($0.1) million for
the corresponding period of 2023. Government levies relate primarily to withholding taxes deducted from
proceeds earned on certain commercial contracts.
Finance expense for the three months and year ended December 31, 2024 was ($0.5) million and
($2.1) million, respectively, compared to ($0.3) million and ($1.1) million, respectively, for the
corresponding periods of 2023. Finance expense represents the interest expense incurred on our right-of-
use assets with a lease term of greater than 12-months, including our head office building, manufacturing
facility, and related storage facilities in Burnaby, British Columbia, as well as similar right-of-use assets in
all of our subsidiaries.
Equity in income (loss) of investment in joint venture and associates for the three months and
year ended December 31, 2024 was ($2.5) million and ($4.9) million, respectively, compared to ($4.3)
million and ($10.1) million, respectively, for the corresponding periods of 2023. Equity in loss of
investment in joint venture and associates relates to the pickup of 49% of the net income (loss) of Weichai
Ballard JV in China due to our 49% ownership position which is accounted for using the equity method of
accounting.
The loss of investment in joint venture and associates in the operations of Weichai Ballard JV includes
research and product development expenses in the periods consisting primarily of amounts expended on
the ongoing $90 million technology transfer agreement with Ballard as Weichai Ballard JV continues to
establish operations. Weichai Ballard JV manufactures Ballard’s next-generation LCS bi-polar plates, fuel
cell stacks and LCS-based power modules for bus, commercial truck, and forklift applications with certain
exclusive rights in China.
Impairment charges on property, plant and equipment for the three months and year ended
December 31, 2024 was ($4.3) million and ($111.0) million, respectively, compared to ($1.0) million and
($1.0) million, respectively, for the corresponding periods of 2023. Impairment charges in 2024 of ($111.0)
39
million consist of a net impairment allowance against consolidated assets of ($93.5) million to impair
these operating assets to their estimated residual value of approximately $9.0 million, and a write-down of
certain specific assets of ($17.5) million located in Canada, Denmark and China primarily as a result of
the global corporate restructuring initiative initiated in September 2024. Impairment charges in 2023 of
($1.0) million consists primarily of a write-down of assets in China.
Impairment charges on intangible assets for the three months and year ended December 31, 2024
was ($0.7) million in each of the periods and consists of a write-down of certain information technology
assets located in Denmark primarily as a result of the global corporate restructuring initiative initiated in
September 2024.
Impairment charges on goodwill for the year ended December 31, 2024 was ($40.3) million and
consists of a write-down of the corporate goodwill balance to nil as a result of the decline in the
Company’s market capitalization during 2024.
5.5
Summary of Quarterly Results
The following table provides summary financial data for our last eight quarters:
(Expressed in thousands of U.S. dollars, except per share amounts
and weighted average shares outstanding which are expressed in
thousands)
Quarter ended,
Dec 31,
2024
Sep 30,
2024
Jun 30,
2024
Mar 31,
2024
Revenues
$
24,520 $
14,756 $
16,003 $
14,452
Net loss from continuing operations
$
(46,471) $
(204,531) $
(31,463) $
(41,066)
Net loss from continuing operations per share, basic and
diluted
$
(0.16) $
(0.68) $
(0.11) $
(0.14)
Weighted average common shares outstanding
299,425
299,412
299,392
299,011
Dec 31,
2023
Sep 30,
2023
Jun 30,
2023
Mar 31,
2023
Revenues
$
46,751 $
27,060 $
15,314 $
13,243
Net loss from continuing operations
$
(48,889) $
(34,721) $
(28,213) $
(32,388)
Net loss from continuing operations per share, basic and
diluted
$
(0.16) $
(0.12) $
(0.09) $
(0.11)
Weighted average common shares outstanding
298,826
298,705
298,679
298,429
Summary of Quarterly Results: There were no significant seasonal variations in our quarterly results.
Variations in our net loss for the above periods were affected primarily by the following factors:
•
Revenues: Variations in fuel cell product and service revenues reflect the demand and timing of our
customers’ fuel cell vehicle, bus, and fuel cell product deployments as well as the demand and timing
of their engineering services projects. Variations in fuel cell product and service revenues also reflect
the timing of work performed and the achievements of milestones under long-term fixed price
contracts.
•
Operating expenses: Operating expenses were negatively impacted in the third quarter of 2024 by
restructuring and related charges of ($16.1) million and negatively impacted by impairment losses on
trade receivables of ($7.9) million. Operating expenses also include the impact of changes in the
40
value of the Canadian dollar, versus the U.S. dollar, on our Canadian dollar denominated
expenditures.
•
Net loss from continuing operations: Net loss from continuing operations is impacted by the above
noted impacts on Revenues and Operating expenses. Net loss in the fourth quarter of 2024 was
negatively impacted by impairment charges on property, plant and equipment and intangible assets of
($5.0) million. Net loss in the third quarter of 2024 was negatively impacted by impairment charges on
goodwill of ($40.3) million and negatively impacted by impairment charges on property, plant and
equipment of ($106.8) million. Net loss in the fourth quarter of 2024, third quarter of 2024, the second
quarter of 2024, the first quarter of 2024, the fourth quarter of 2023, the third quarter of 2023, the
second quarter of 2023, and the first quarter of 2023, was also impacted by mark to market gains
(losses) on financial assets of ($7.4) million, ($2.7) million, $1.7 million, ($6.3) million, ($10.3) million,
($2.5) million, $0.3 million, and ($0.5) million, respectively, related primarily to our investments in
Forsee Power, Wisdom, Quantron, HyCap, Clean H2 and Templewater.
6.
CASH FLOWS, LIQUIDITY AND CAPITAL RESOURCES
6.1
Summary of Cash Flows
Cash and cash equivalents were $603.9 million as of December 31, 2024, compared to $751.1 million as
of December 31, 2023. The ($147.2) million decrease in cash and cash equivalents in 2024 was driven
primarily by net cash operating losses (excluding non-cash items) of ($113.4) million, purchases of
property, plant and equipment and intangible assets of ($27.6) million, long-term financial investments of
($12.0) million consisting of new investments in HyCap, Clean H2 and Templewater, and by finance lease
repayments of ($3.3) million. These cash outflows in 2024 were partially offset by net working capital
inflows of $5.3 million, proceeds on disposition of certain small stationary assets in Denmark of $3.2
million, and net proceeds on the settlement of a now terminated defined benefit pension plan for certain
former United States employees of $1.5 million.
6.2
Cash Provided by (Used by) Operating Activities
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
2024
2023
$ Change
Cash Operating Loss
$
(23,938) $
(17,485) $
(6,453)
Change in Working Capital:
Trade and other receivables
(4,684)
(16,271)
11,587
Inventory
6,514
14,986
(8,472)
Prepaid expenses and other current assets
2,976
3,522
(546)
Trade and other payables
(6,916)
(954)
(5,962)
Deferred revenue
2,289
(4,030)
6,319
Warranty provision
(645)
1,893
(2,538)
(466)
(854)
388
Cash Used by Operating Activities
$
(24,404) $
(18,339) $
(6,065)
For the three months ended December 31, 2024, cash used by operating activities was ($24.4) million,
compared to ($18.3) million for the three months ended December 31, 2023. The ($6.1) million increase
in cash used by operating activities in the fourth quarter of 2024, as compared to the fourth quarter of
41
2023, was driven by the relative increase in cash operating losses of ($6.5) million, partially offset by the
relative decrease in working capital requirements of $0.4 million.
The relative ($6.5) million increase in cash operating losses in the fourth quarter of 2024 was driven by
several items included in cash operating losses but excluded from Adjusted EBITDA loss or vice-versa
totaling ($14.6) million, including changes in impairment losses on trade receivables, inventory
impairment and onerous contracts provision adjustments, restructuring expenses, finance and other
income (excluding mark to market fair value changes on investments), and equity investment losses in
joint venture and associates. These items were partially offset by the decrease in Adjusted EBITDA loss of
$8.1 million.
The total change in working capital of ($0.5) million in the fourth quarter of 2024 was driven by lower
accounts payable and accrued liabilities of ($6.9) million primarily as a result of the timing of restructuring
payments, supplier payments and annual compensation awards, and by higher accounts and contract
receivables of ($4.7) million primarily due to the timing of revenues and the related customer collections.
These fourth quarter of 2024 (outflows) were partially offset by lower inventory of $6.5 million primarily as
a result of fourth quarter shipments, by lower prepaid expenses of $3.0 million primarily due to the timing
of annual insurance renewals, and by higher deferred revenue of $2.3 million as we collected pre-
payments on certain product and service contracts in advance of work performed.
The total change in working capital of ($0.7) million in the fourth quarter of 2023 was driven by lower
inventory of $15.0 million due primarily to higher product shipments in the period, lower prepaid expenses
of $3.5 million primarily due to the timing of annual insurance renewals, and by higher warranty provisions
of $1.9 million. These fourth quarter of 2023 inflows were partially offset by higher accounts and contract
receivables of ($16.3) million primarily due to the timing of revenues and the related customer collections,
and lower deferred revenue of ($4.0) million as pre-payments on certain product and service contracts
were recognized.
(Expressed in thousands of U.S. dollars)
Year ended December 31,
2024
2023
$ Change
Cash Operating Loss
$
(113,335) $
(87,484) $
(25,851)
Change in Working Capital:
Trade and other receivables
13,349
(12,913)
26,262
Inventory
(16,946)
(898)
(16,048)
Prepaid expenses and other current assets
2,689
76
2,613
Trade and other payables
1,204
(3,580)
4,785
Deferred revenue
7,044
(3,442)
10,486
Warranty provision
(2,104)
3,671
(5,775)
5,236
(17,086)
22,323
Cash Used by Operating Activities
$
(108,099) $
(104,570) $
(3,528)
For the year ended December 31, 2024, cash used by operating activities was ($108.1) million compared
to ($104.6) million for 2023. The ($3.5) million increase in cash used by operating activities in 2024, as
compared to 2023, was driven by the relative increase in cash operating losses of ($25.9) million, partially
offset by the relative decrease in working capital requirements of $22.3 million.
The relative ($25.9) million increase in cash operating losses in 2024 was driven by the increase in
Adjusted EBITDA loss of ($18.0) million, and by several items included in cash operating losses but
excluded from Adjusted EBITDA loss or vice-versa totaling ($7.9) million, including changes in impairment
losses on trade receivables, inventory impairment and onerous contracts provision adjustments,
42
restructuring expenses, finance and other income (excluding mark to market fair value changes on
investments), and equity investment losses in joint venture and associates.
The total change in working capital of $5.2 million 2024 was driven by lower accounts and contract
receivables of $13.3 million primarily due to the timing of revenues and the related customer collections,
by higher deferred revenue of $7.0 million as we collected pre-payments on certain product and service
contracts in advance of work performed, and by lower prepaid expenses of $2.7 million. These 2024
inflows were partially offset by higher inventory of ($16.9) million primarily to support expected product
shipments in 2025, and by lower warranty provisions of ($2.1) million.
The total change in working capital of ($17.1) million in 2023 was driven by higher accounts and contract
receivables of ($12.9) million primarily due to the timing of revenues and the related customer collections,
lower accounts payable and accrued liabilities of ($3.6) million primarily as a result of the timing of
supplier payments and annual compensation awards, lower deferred revenue of ($3.4) million as pre-
payments on certain product and service contracts were recognized, and higher inventory of ($0.9)
million. These 2023 outflows were partially offset by higher warranty provisions of $3.7 million.
6.3
Cash Provided by (Used by) Investing Activities
Investing activities resulted in net cash outflows of ($6.1) million and ($36.5) million, respectively, for the
three months and year ended December 31, 2024, compared to net cash outflows of ($10.8) million and
($54.3) million, respectively, for the corresponding periods of 2023.
Investing activities in the fourth quarter of 2024 of ($6.1) million consist of capital expenditures of ($5.9)
million incurred primarily for production and test equipment and certain intangible assets, and long-term
investments in HyCap and Clean H2 hydrogen infrastructure and growth equity funds of ($3.3) million,
partially offset by proceeds on disposition of certain small stationary assets in Denmark of $3.2 million.
Investing activities in the fourth quarter of 2023 of ($10.8) million consist of capital expenditures of ($7.4)
million incurred primarily for production and test equipment and certain intangible assets, and additional
long-term investments in the HyCap and Clean H2 of ($3.5) million.
Investing activities in 2024 of ($36.5) million consist of capital expenditures of ($27.6) million incurred
primarily for production and test equipment and certain intangible assets, and additional long-term
investments in HyCap, Clean H2, and Templewater of ($12.0) million, partially offset by proceeds on
disposition of certain small stationary assets in Denmark of $3.2 million.
Investing activities in 2023 of ($54.3) million consist of capital expenditures of ($41.4) million incurred
primarily for production and test equipment and certain intangible assets, additional long-term
investments in Quantron, HyCap, and Clean H2 of ($11.9) million, and subsequent milestone attainment
cash acquisition investment in Ballard Motive Solutions of ($2.0) million. These 2023 cash outflows were
partially offset by a recovery of contributions in our long-term investment in Wisdom of $1.0 million.
43
6.4
Cash Provided by (Used by) Financing Activities
Financing activities resulted in net cash inflows (outflows) of $0.8 million and ($1.5) million, respectively,
for the three months and year ended December 31, 2024, compared to net cash outflows of ($1.1) million
and ($3.7) million, respectively, for the corresponding periods of 2023.
Financing activities in the fourth quarter of 2024 of $0.8 million consist of a recovery on settlement and
termination of the defined benefit pension plan for certain former United States employees of $1.5 million,
partially offset by finance lease payments of ($0.7) million.
Financing activities in the fourth quarter of 2023 of ($1.1) million consist of finance lease payments of
($1.2) million, partially offset by proceeds from the exercise of share purchase options of $0.1 million.
Financing activities in 2024 of ($1.5) million consist of a recovery on settlement and termination of the
defined benefit pension plan for certain former United States employees of $1.5 million, proceeds from
the exercise of share purchase options of $0.3 million, partially offset by finance lease payments of ($3.3)
million.
Financing activities in 2023 of ($3.7) million consist of finance lease payments of ($4.0) million, partially
offset by proceeds from the exercise of share purchase options of $0.3 million.
6.5
Liquidity and Capital Resources
As of December 31, 2024, we had total liquidity of $606.1 million. We measure liquidity as our net cash
and short-term investment position, consisting of the sum of our cash, cash equivalents and short-term
investments of $606.1 million, as we have no bank debt.
We have a Letter of Guarantee Facility (the “LG Facility”) enabling our bank to issue letters of guarantee,
standby letters of credit, performance bonds, or similar credits on our behalf from time to time up to a
maximum of $2.0 million. The LG Facility also enables us to enter into foreign exchange contracts (at face
value amounts in excess of the LG Facility). As of December 31, 2024, letters of credit of euro 1.0 million
and foreign exchange currency contracts to purchase a total of Canadian $17.5 million were outstanding
under the LG Facility.
Subsequent to December 31, 2024, we entered into a new Loan Agreement (the “Loan Agreement”)
enabling our bank to issue commercial credit cards, standby letters of credit, or similar credits on our
behalf from time to time up to a maximum of approximately Canadian $13 million.
Our liquidity objective is to maintain cash balances sufficient to fund at least six quarters of forecasted
cash used by operating activities and contractual commitments. Our strategy to attain this objective is to
continue our drive to attain profitable operations that are sustainable by executing a business plan that
continues to focus on revenue growth, improving overall gross margins, maintaining discipline over
operating expenses, managing working capital and capital expenditure requirements, and securing
additional financing to fund our operations as needed until we do achieve profitable operations that are
sustainable. We believe that we have adequate liquidity in cash and working capital to achieve our
liquidity objective.
44
Failure to achieve or maintain this liquidity objective could have a material adverse effect on our financial
condition and results of operations including our ability to continue as a going concern. There are also
various risks and uncertainties affecting our ability to achieve this liquidity objective including, but not
limited to, the market acceptance and rate of commercialization of our products, the ability to successfully
execute our business plan, and general global economic conditions, certain of which are beyond our
control. While we continue to make significant investments in product development and market
development activities necessary to commercialize our products, make increased investments in working
capital and capital expenditures as we grow our business, and make ongoing capital contributions in
support of our investment in certain hydrogen infrastructure and growth equity funds, our actual liquidity
requirements will also vary and will be impacted by future acquisitions and strategic partnerships and
investments, our relationships with our lead customers and strategic partners including their ability to
successfully finance and fund their operations and programs and agreements with us, our success in
developing new channels to market and relationships with customers, our success in generating revenue
growth from near-term product, service and licensing opportunities, our success in managing our
operating expense and working capital requirements, foreign exchange fluctuations, and the progress and
results of our research, development and demonstration programs.
We may also choose to pursue additional liquidity through the issuance of debt or equity in private or
public market financings. To enable the timely issuance of equity securities in the public market, we
renewed our Base Shelf Prospectus on file with the securities regulators in Canada on May 9, 2023. The
Base Shelf Prospectus, which is effective for 25-months ending in June 2025, was filed in each of the
provinces and territories of Canada, and a corresponding shelf registration statement on Form F-10 was
also filed with the United States Securities and Exchange Commission. These filings will enable offerings
of securities at any time during the 25-month period that the Base Shelf Prospectus remains effective. No
offerings of securities under this Base Shelf Prospectus have been issued to date.
No assurance can be given that any such additional liquidity will be available or that, if available, it can be
obtained on terms favorable to the Company. If any securities are offered under the Base Shelf
Prospectus, the terms of any such securities and the intended use of the net proceeds resulting from such
offering would be established at the time of any offering and would be described in a supplement to the
Base Shelf Prospectus filed with applicable Canadian securities regulators and/or the SEC, respectively,
at the time of such an offering.
7.
OTHER FINANCIAL MATTERS
7.1
Off-Balance Sheet Arrangements and Contractual Obligations
Periodically, we use forward foreign exchange contracts to manage our exposure to currency rate
fluctuations. We record these contracts at their fair value as either assets or liabilities on our statement of
financial position. Any changes in fair value are either (i) recorded in other comprehensive income if
formally designated and qualified under hedge accounting criteria; or (ii) recorded in profit or loss (general
and administrative expense) if either not designated, or not qualified, under hedge accounting criteria. As
of December 31, 2024, we had outstanding foreign exchange currency contracts to purchase a total of
45
Canadian $17.5 million at an average rate of 1.3591 Canadian per U.S. dollar, resulting in an unrealized
loss of Canadian ($1.0) million as of December 31, 2024. The outstanding foreign exchange currency
contracts have not been designated under hedge accounting.
As of December 31, 2024, we did not have any other material obligations under guarantee contracts,
retained or contingent interests in transferred assets, outstanding derivative instruments, or non-
consolidated variable interests.
As of December 31, 2024, we had the following contractual obligations and commercial commitments
calculated on a non-discounted basis (with the exception of Finance leases):
(Expressed in thousands of U.S. dollars)
Payments due by period,
Contractual Obligations
Total
Less than one
year
1-3 years
4-5 years
After 5 years
Finance leases
$ 33,213
$ 4,707
$ 9,468
$ 5,325
$ 13,713
Hydrogen supply agreement
9,441
-
3,056
6,385
-
Asset retirement obligations
2,718
-
-
-
2,718
Long-term investment (HyCap)
11,584
11,584
-
-
-
Long-term investment (Clean H2)
21,127
6,233
14,894
-
-
Long-term investment (Templewater)
473
473
-
-
-
Total contractual obligations
$ 78,556
$ 22,997
$ 27,418
$ 11,710
$ 16,431
Long-term investments include an investment committing us to be a limited partner in HyCap, a hydrogen
infrastructure and growth equity fund. HyCap is to invest in a combination of hydrogen infrastructure
projects and investments in companies along the hydrogen value chain. We have committed to invest
£25.0 million (including £15.8 million invested as of December 31, 2024) into HyCap.
Long-term investments also include an investment committing us to be a limited partner in Clean H2,
another hydrogen infrastructure and growth equity fund. Clean H2 is to invest in a combination of
hydrogen infrastructure projects and investments in companies along the hydrogen value chain. We have
committed to invest €30.0 million (including €9.7 million invested as of December 31, 2024) into Clean
H2.
Long-term investments also include an investment committing us to be a limited partner in Templewater, a
decarbonization climate technology and growth equity fund. We have committed to invest $1.0 million
(including $0.5 million invested as of December 31, 2024) in Templewater.
In addition, we have outstanding commitments of $14.5 million as of December 31, 2024, related primarily
to purchases of property, plant, and equipment. Capital expenditures and expenditures on other intangible
assets pertain to our regular operations and are expected to be funded through cash on hand.
In connection with the acquisition of intellectual property from UTC in 2014, we have a royalty obligation
in certain circumstances to pay UTC a portion of any future intellectual property sale and licensing income
generated from certain of our intellectual property portfolio for a period of 15-years expiring in April 2029.
No royalties were paid to UTC for the years ended December 31, 2024 and 2023.
46
As of December 31, 2024, we retain a previous funding obligation to pay royalties of 2% of revenues (to a
maximum of Canadian $5.4 million) on sales of certain fuel cell products for commercial distributed utility
applications. No royalties have been incurred to date due to this agreement.
We also retain a previous funding obligation to pay royalties of 2% of revenues (to a maximum of
Canadian $2.2 million) on sales of certain fuel cell products for commercial transit applications. No
royalties have been incurred to date due to this agreement.
In the ordinary course of business or as required by certain acquisition or disposition agreements, we are
periodically required to provide certain indemnities to other parties. As of December 31, 2024, we have
not accrued any significant amount owing, or receivable, due to any indemnity agreements undertaken in
the ordinary course of business.
7.2
Related Party Transactions
Related parties include our 49% owned equity accounted investee, Weichai Ballard JV. Transactions
between us and our subsidiaries are eliminated on consolidation. For the three months and year ended
December 31, 2024 and 2023, related party transactions and balances with Weichai Ballard JV are as
follows:
(Expressed in thousands of U.S. dollars)
Three Months ended December 31,
Transactions with related parties
2024
2023
Revenues
$
64 $
4,655
Cost of goods sold and operating expense
$
44 $
583
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Transactions with related parties
2024
2023
Revenues
$
2,480 $
8,099
Cost of goods sold and operating expense
$
1,819 $
1,996
(Expressed in thousands of U.S. dollars)
As at Dec 31,
As at Dec 31,
Balances with related parties
2024
2023
Accounts receivable
$
3,447
$
13,697
Investments
$
8,238
$
13,901
Deferred revenue
$
(1,831)
$
(1,904)
We also provide key management personnel, being board directors and executive officers, certain
benefits, in addition to their salaries. Key management personnel also participate in the Company’s
share-based compensation plans. Key management personnel compensation is summarized in note 28 to
our annual consolidated financial statements for the year ended December 31, 2024.
47
7.3
Outstanding Share and Equity Information
As of March 12, 2025
Common share outstanding
299,660,325
Options outstanding
3,616,418
DSUs outstanding
989,668
RSUs / PSUs outstanding (subject to vesting and performance criteria)
4,113,575
8.
USE OF PROCEEDS
8.1
Reconciliation of Use of Proceeds from Previous Financings
During 2021 and 2020, we completed the following offerings of our common shares (“Common Shares”):
•
On February 23, 2021, we closed a bought deal offering of 14.87 million Common Shares at a price of
$37.00 per Common Share for gross proceeds of $550.2 million and net proceeds of $527.3 million
(the “2021 Offering”).
•
On September 1, 2020, we announced an at-the-market equity program to issue a total of 16.45
million Common Shares from treasury (the “$250 million ATM Program”). The 16.45 million Common
Shares issued under the $250 million ATM Program were sold in the third and fourth quarters of 2020
at prevailing market prices at the time of sale for total gross proceeds of $250 million and total net
proceeds of $244.1 million.
•
On March 10, 2020, we announced an at-the-market equity program to allow the issuance of up to
$75 million of Common Shares from treasury (the “$75 million ATM Program” and together with the
$250 million ATM Program, the “2020 ATM Programs”). The 8.2 million Common Shares issued under
the $75 million ATM Program were sold in the first half of 2020 at prevailing market prices at the time
of sale for total gross proceeds of $66.7 million and total net proceeds of $64.7 million.
The net proceeds from the 2021 Offering of $527.3 million were intended to be used to further strengthen
the Company’s financial position, thereby providing additional flexibility to fund growth strategies,
including through activities such as product innovation, investments in production capacity expansion and
localization, future acquisitions and strategic partnerships and investments. The net proceeds from the
2020 ATM Programs of $308.8 million were intended to be used for general corporate purposes. Pending
their use, we disclosed our intention to invest the net proceeds from the 2021 Offering in short-term,
investment grade, interest bearing instruments or to hold them as cash and cash equivalents.
The following tables sets out a comparison of the Company’s disclosed expected use of net proceeds
from the 2021 Offering and the 2020 ATM Programs to the actual use of such net proceeds to December
31, 2024. As of December 31, 2024, the residual net proceeds from the 2021 Offering and the 2020 ATM
Programs were held in interest bearing cash accounts.
48
2021 Offering Net Proceeds $527.3M
Intended Use of Net Proceeds: Further strengthen the Company’s balance sheet, thereby providing additional flexibility to fund
growth strategies, including through activities such as product innovation, investments in production capacity expansion and
localization, future acquisitions and strategic partnerships and investments.
Actual Use of Net Proceeds (expressed in thousands of U.S. dollars)
Variance – (Over)/
Under Expenditures
Explanation of
Variance
Research and Product Development (cash Operating cost)
expenditures including product development of next
generation fuel cell stacks and modules
$94,110
N/A
N/A
Investments in property, plant and equipment and other
intangible assets including production capacity expansion
and localization
$34,996
N/A
N/A
Strategic partnerships and investments including Quantron,
Wisdom, Forsee Power, HyCap, Clean H2, Templewater,
Weichai Ballard JVCo, and acquisition related expenses
$15,524
N/A
N/A
Total expended to December 31, 2024
$144,630
2020 ATM Programs Net Proceeds $308.8M
Intended Use of Net Proceeds: General Corporate Purposes
Actual Use of Net Proceeds (expressed in thousands of U.S. dollars)
Variance – (Over)/
Under Expenditures
Explanation of
Variance
Gross Margin loss expenditures (net of inventory
impairment charges)
$37,219
N/A
N/A
General and Administration (cash Operating cost)
expenditures
$69,510
N/A
N/A
Sales and Marketing (cash Operating cost) expenditures
$41,094
N/A
N/A
Restructuring and related expenditures
$25,445
N/A
N/A
Working capital requirements
$24,712
N/A
N/A
Lease liability principal repayments
$11,395
N/A
N/A
Total expended to December 31, 2024
$209,375
9.
ACCOUNTING MATTERS
9.1
Overview
Our consolidated financial statements are prepared in accordance with IFRS, which require us to make
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income, and expenses. Actual results may differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
9.2
Critical Judgments in Applying Accounting Policies
Critical judgments that we have made in the process of applying our accounting policies and that have the
most significant effect on the amounts recognized in the consolidated financial statements is limited to our
assessment of our ability to continue as a going concern (See Note 2 (e) to our annual consolidated
financial statements).
Our material accounting policies are detailed in note 4 to our annual consolidated financial statements for
the year ended December 31, 2024. Effective January 1, 2025, we adopted a number of new standards
and interpretations, but they did not have a material impact on our financial statements.
49
9.3
Key Sources of Estimation Uncertainty
The following are key assumptions concerning the future and other key sources of estimation uncertainty
that have a significant risk of resulting in a material adjustment to the reported amount of assets,
liabilities, income, and expenses within the next financial year.
REVENUE RECOGNITION
Revenues are generated primarily from product sales, the license and sale of intellectual property and
fundamental knowledge, and the provision of engineering services and technology transfer services.
Product revenues are derived primarily from standard product sales contracts and from long-term fixed
price contracts. Intellectual property and fundamental knowledge license revenues are derived primarily
from standard licensing and technology transfer agreements. Engineering service and technology transfer
service revenues are derived primarily from cost-plus reimbursable contracts and from long-term fixed
price contracts.
Revenue is recognized when a customer obtains control of the goods or services. Determining the timing
of the transfer of control, at a point in time or over time, requires judgment.
On standard product sales contracts, revenues are recognized when customers obtain control of the
product, which is when transfer of title and risks and rewards of ownership of goods have passed, and
when obligation to pay is considered certain. Invoices are generated and revenue is recognized at that
point in time. Provisions for warranties are made at the time of sale. Revenue recognition for standard
product sales contracts does not usually involve significant estimates.
On standard licensing and technology transfer agreements, revenues are recognized on the transfer of
rights to a licensee, when it is determined to be distinct from other performance obligations, and if the
customer can direct the use of, and obtain substantially all of the remaining benefits from the license as it
exists at the time of transfer. In other cases, the proceeds are considered to relate to the right to use the
asset over the license period and the revenue is recognized over that period. If it is determined that the
license is not distinct from other performance obligations, revenue is recognized over time as the
customer simultaneously receives and consumes the benefit. Revenue recognition for standard license
and sale agreements does not usually involve significant estimates.
On cost-plus reimbursable contracts, revenues are recognized as costs are incurred, and include
applicable fees earned as services are provided. Revenue recognition for cost-plus reimbursable
contracts does not usually involve significant estimates.
On long-term fixed price contracts, the customer controls all of the work in progress as the services are
being provided. This is because under these contracts, the deliverables are made to a customer’s
specification, and if a contract is terminated by the customer, then the Company is entitled to
reimbursement of the costs incurred to date plus the applicable gross margin. Therefore, revenue from
these contracts and the associated costs are recognized as the costs are incurred over time. On long-
term fixed price contracts, revenues are recognized over time using cumulative costs incurred to date
relative to total estimated costs at completion to measure progress towards satisfying performance
obligations. Generally, revenue is recognized by multiplying the expected consideration by the ratio of
50
cumulative costs incurred to date to the sum of incurred and estimated costs for completing the
performance obligation. The cumulative effect of changes to estimated revenues and estimated costs for
completing a contract are recognized in the period in which the revisions are identified. If the estimated
costs for completing the contract exceed the expected revenues on a contract, such loss is recognized in
its entirety in the period it becomes known. Deferred revenue (i.e., contract liabilities) represents cash
received from customers in excess of revenue recognized on uncompleted contracts.
•
The determination of expected costs for completing a contract is based on estimates that can be
affected by a variety of factors such as variances in the timeline to completion, the cost of materials,
the availability and cost of labour, as well as productivity.
•
The determination of potential revenues includes the contractually agreed amount and may be
adjusted based on the estimate of our attainment on achieving certain defined contractual milestones.
Management’s estimation is required in determining the amount of consideration for which the
Company expects to be entitled and in determining when a performance obligation has been met.
Estimates used to determine revenues and costs of long-term fixed price contracts involve uncertainties
that ultimately depend on the outcome of future events and are periodically revised as projects progress.
There is a risk that a customer may ultimately disagree with management’s assessment of the progress
achieved against milestones, or that our estimates of the work required to complete a contract may
change.
During the three months and year ended December 31, 2024, and 2023, there were no significant
adjustments to revenues relating to revenue recognized in a prior period.
ASSET IMPAIRMENT
The carrying amounts of our non-financial assets, other than inventories, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indicator exists, then the
asset’s recoverable amount is estimated. For assets that have indefinite useful lives including goodwill,
intangible assets, and property, plant and equipment, the recoverable amount is estimated annually, or
whenever events or circumstances indicate that the carrying amount may not be recoverable.
As a result of indicators of potential impairment including a decline in the Company’s market capitalization
in 2024, the initiation of a global corporate restructuring in September 2024, and indicators of slowing
hydrogen and fuel cell policy implementation and market adoption, we updated our goodwill and non-
financial asset impairment tests as of September 30, 2024 and again as of December 31, 2024.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. In assessing fair value less costs to sell, the price that would be
received on the sale of an asset in an orderly transaction between market participants at the
measurement date is estimated. For the purposes of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other groups of assets. The allocation of
goodwill and other non-financial assets to cash-generating units reflects the lowest level at which these
assets are monitored for internal reporting purposes. Many of the factors used in assessing fair value are
51
outside the control of management, and it is reasonably likely that assumptions and estimates will change
from period to period. These changes may result in future impairments. For example, our revenue growth
rate could be lower than projected due to economic, industry or competitive factors, or the discount rate
used in our value in use model could increase due to a change in market interest rates.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its
estimated recoverable amount. Impairment losses are recognized in net loss. Impairment losses
recognized in respect of the cash-generating unit are allocated first to reduce the carrying amount of any
goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a
pro-rata basis. However, individual assets within the cash-generating unit are not impaired below their
residual fair market value.
An impairment loss in respect of goodwill is not reversed. In respect of other assets including property,
plant and equipment, impairment losses recognized in prior periods are assessed at each reporting date
for any indications that the cumulative loss has decreased or no longer exists. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized.
As a result of the impairment tests performed at September 30, 2024 and December 31, 2024 and our
assessment of current events and circumstances, we recognized goodwill impairment charges of ($40.3)
million in the three months ended September 30, 2024 to write-down goodwill to nil. In addition, we
recognized impairment charges on property, plant and equipment of ($106.8) million in the three months
ended September 30, 2024, consisting of a fair value impairment allowance of ($105.0) million against
consolidated capital assets to impair these operating assets to their estimated residual value of
approximately $9.0 million, and a write-down of certain specific assets of ($1.8) million located primarily in
Denmark and China that were discontinued pursuant to the global corporate restructuring.
During the three months ended December 31, 2024, we recognized adjustments to the net ($105.0)
million fair value impairment allowance on property, plant and equipment at September 30, 2024
consisting of (i) additions to the allowance for capital additions in the period of ($4.6) million as the
Company’s market capitalization remained depressed; (ii) deductions to the allowance for specifically
identified capital assets totaling $14.5 million that were directly impaired or disposed of in the period; and
(iii) deductions to the allowance for depreciation and amortization expense of $1.6 million that would have
been recognized had the underlying assets not been fully impaired to estimated residual value. As of
December 31, 2024, the net fair value impairment allowance recognized against consolidated property,
plant and equipment approximated ($93.5) million. In the event that the Company’s market capitalization
recovers in the future, this impairment allowance may be reversed in part or in full.
During the three months and year ended December 31, 2024, we also recognized impairment charges on
intangible assets of ($0.7) million relating to certain information technology assets located in Denmark.
During the year ended December 31, 2023, impairment charges on goodwill of ($24.0) million and
impairment charges on intangible assets of ($2.3) million were recognized in net loss from discontinued
operations consisting of the write-down of acquired goodwill and technology intangible assets to their
estimated fair value as a result of the restructuring and effective closure of operations of Ballard Motive
Solutions in the U.K.
52
WARRANTY PROVISION
A provision for warranty costs is recorded on product sales at the time of shipment. In establishing the
accrued warranty liabilities, we estimate the likelihood that products sold will experience warranty claims
and the cost to resolve claims received.
In making such determinations, we use estimates based on the nature of the contract and past and
projected experience with the products. Should these estimates prove to be incorrect, we may incur costs
different from those provided for in our warranty provisions. During the three months and year ended
December 31, 2024, we recorded provisions to accrued warranty liabilities of $2.3 million and $6.3 million,
respectively, for new product sales, compared to $2.5 million and $6.0 million, respectively, for the three
months and year ended December 31, 2023.
We review our warranty assumptions and make adjustments to accrued warranty liabilities quarterly
based on the latest information available and to reflect the expiry of contractual obligations. Adjustments
to accrued warranty liabilities are recorded in cost of product and service revenues. As a result of these
reviews and the resulting adjustments, our warranty provision and cost of revenues for the three months
and year ended December 31, 2024, were adjusted downwards (upwards) by $2.1 million and $4.0
million, respectively, compared to adjustments of $0.3 million and ($0.3) million, respectively, for the three
months and year ended December 31, 2023.
INVENTORY AND ONEROUS CONTRACT PROVISIONS
In determining the lower of cost and net realizable value of our inventory and establishing the appropriate
provision for inventory obsolescence, we estimate the likelihood that inventory carrying values will be
affected by changes in market pricing or demand for our products and by changes in technology or design
which could make inventory on hand obsolete or recoverable at less than cost. We perform regular
reviews to assess the impact of changes in technology and design, sales trends, and other changes on
the carrying value of inventory. Where we determine that such changes have occurred and will have a
negative impact on the value of inventory on hand, appropriate provisions are made. If there is a
subsequent increase in the value of inventory on hand, reversals of previous write-downs to net realizable
value are made. Unforeseen changes in these factors could result in additional inventory provisions, or
reversals of previous provisions, being required.
A provision for onerous contracts is also assessed and measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the contract, which
is determined based on the incremental costs of fulfilling the obligation under the contract and an
allocation of other costs directly related to fulfilling the contract. Before an onerous contract provision is
established, we recognize any impairment loss on the assets (including through an inventory provision)
associated with that contract.
During the three months and year ended December 31, 2024, negative inventory impairment and onerous
contract provision adjustments of ($1.3) million and ($5.7) million, respectively, were recorded as a charge
to cost of product and service revenues, compared to negative inventory impairment and onerous
53
contract provision adjustments of ($10.7) million and ($15.0) million, respectively, in the three months and
year ended December 31, 2023.
FAIR VALUE MEASUREMENT (INCLUDING LONG-TERM FINANCIAL INVESTMENTS)
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the principal or, in its absence, the
most advantageous market to which the Company has access at that date. The fair value of a liability
reflects its non-performance risk. A number of the Company’s accounting policies and disclosures require
the measurement of fair values, for both financial and non-financial assets and liabilities.
When one is available, the Company measures the fair value of an instrument using the quoted price in
an active market for that instrument. A market is regarded as “active” if transactions for the asset or
liability take place with sufficient frequency and volume to provide pricing information on an ongoing
basis. If there is no quoted price in an active market, then the Company uses valuation techniques that
maximize the use of relevant observable inputs and minimize the use of unobservable inputs. This
involves developing estimates and assumptions consistent with how market participants would price the
instrument. Management bases its assumptions on observable data as far as possible, but this is not
always available. In that case, management uses the best information available. Where they are
available, the fair value of investments is based on observable market transactions. Estimated fair values
may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting
date.
The best evidence of the fair value of a financial instrument (including investments) on initial recognition is
usually the transaction price – i.e., the fair value of the consideration given or received. If the Company
determines that the fair value on initial recognition differs from the transaction price and the fair value is
evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a
valuation technique for which any unobservable inputs are judged to be insignificant in relation to the
measurement, then the financial instrument is initially measured at fair value, adjusted to defer the
difference between the fair value on initial recognition and the transaction price. Subsequently, that
difference is recognized in profit or loss on an appropriate basis over the life of the instrument but no later
than when the valuation is wholly supported by observable data, or the transaction is closed out.
During the three months and year ended December 31, 2024, we recognized mark to market gain (loss)
on financial assets of ($7.4) million and ($14.8) million, respectively, compared to ($10.3) million and
($12.9) million, respectively, for the three months and year ended December 31, 2023. Mark to market
gain (loss) consist primarily of changes in the fair value of our long-term financial investments including
Forsee Power, Wisdom, Quantron, Templewater, HyCap and Clean H2.
9.4
Recently Adopted Accounting Policy Changes
Effective January 1, 2024, we adopted a number of new standards and interpretations, but they did not
have a material impact on our financial statements.
54
9.5 Future Accounting Policy Changes
The following is an overview of accounting standard changes that we will be required to adopt in future
years. We do not expect to adopt any of these standards before their effective dates and we continue to
evaluate the impact of these standards on our consolidated financial statements.
Presentation and Disclosure in Financial Statements (IFRS 18)
On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to
improve reporting of financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements.
It carries forward many requirements from IAS 1 unchanged.
The new Accounting Standard introduces significant changes to the structure of a company’s income
statement, more discipline and transparency in presentation of management's own performance
measures (commonly referred to as 'non-GAAP measures,') and less aggregation of items into large,
single numbers. The main impacts of the new Accounting Standard include:
•
introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses
to be allocated between three new distinct categories based on a company’s main business activities
(i.e. operating, investing and financing);
•
requiring disclosure about management performance measures (MPMs); and
•
adding new principles for aggregation and disaggregation of information.
IFRS 18 applies for annual periods beginning on or after January 1, 2027. Early application is permitted.
The extent of the impact of adoption of IFRS 18 has not yet been determined.
10.
SUPPLEMENTAL NON-GAAP MEASURES AND RECONCILIATIONS
10.1 Overview
In addition to providing measures prepared in accordance with GAAP, we present certain supplemental
non-GAAP measures. These measures are Cash Operating Costs (including its components of research
and product development (operating cost), general and administrative (operating cost) and sales and
marketing (operating cost)), EBITDA and Adjusted EBITDA. These non-GAAP measures do not have any
standardized meaning prescribed by GAAP and therefore are unlikely to be comparable to similar
measures presented by other companies. We believe these measures are useful in evaluating the
operating performance of the Company’s ongoing business. These measures should be considered in
addition to, and not as a substitute for, operating expenses, net income, cash flows and other measures
of financial performance and liquidity reported in accordance with GAAP. The calculation of these non-
GAAP measures has been made on a consistent basis for all periods presented.
10.2 Cash Operating Costs
This supplemental non-GAAP measure is provided to assist readers in determining our operating costs on
an ongoing cash basis. We believe this measure is useful in assessing performance and highlighting
trends on an overall basis.
We also believe Cash Operating Costs is frequently used by securities analysts and investors when
comparing our results with those of other companies. Cash Operating Costs differs from the most
comparable GAAP measure, total operating expenses, primarily because it does not include stock-based
compensation expense, depreciation and amortization, impairment losses or recoveries on trade
55
receivables, restructuring and related costs, acquisition related costs, the impact of unrealized gains and
losses on foreign exchange contracts, and financing charges. The following tables show a reconciliation
of total operating expenses to Cash Operating Costs for the three months and year ended December 31,
2024 and 2023:
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
Cash Operating Costs
2024
2023
$ Change
Total Operating Expenses
$
33,164 $
34,972 $
(1,808)
Stock-based compensation expense
(1,068)
(2,575)
1,507
Impairment recovery (losses) on trade receivables
(3,206)
(1,436)
(1,770)
Acquisition related costs
—
3
(3)
Restructuring and related (costs) recovery
(708)
(322)
(386)
Impact of unrealized gains (losses) on foreign exchange
contracts
(852)
696
(1,548)
Depreciation and amortization
(137)
(2,388)
2,251
Cash Operating Costs
$
27,193 $
28,950 $
(1,757)
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Cash Operating Costs
2024
2023
$ Change
Total Operating Expenses
$
161,318 $
141,073 $
20,245
Stock-based compensation expense
(7,456)
(10,720)
3,264
Impairment recovery (losses) on trade receivables
(12,760)
(1,498)
(11,262)
Acquisition related costs
—
(773)
773
Restructuring and related (costs) recovery
(17,046)
(1,512)
(15,534)
Impact of unrealized gains (losses) on foreign exchange
contracts
(1,095)
1,296
(2,391)
Depreciation and amortization
(7,030)
(8,539)
1,509
Cash Operating Costs
$
115,931 $
119,327 $
(3,396)
The components of Cash Operating Costs of research and product development (cash operating cost),
general and administrative (cash operating cost), and sales and marketing (cash operating cost) differ
from their respective most comparable GAAP measure of research and product development expense,
general and administrative expense, and sales and marketing expense, primarily because they do not
include stock-based compensation expense, depreciation and amortization expense, and acquisition
related costs. A reconciliation of these respective operating expenses to the respective components of
Cash Operating Costs for the three months and year ended December 31, 2024 and 2023 is included in
Section 5.4 Operating Expenses and Other Items.
A breakdown of total stock-based compensation expense for the three months and year ended December
31, 2024 and 2023 are as follows:
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
Stock-based compensation expense
2024
2023
$ Change
Total stock-based compensation expense recorded as
follows:
Cost of goods sold
$
— $
— $
—
Research and product development expense
624
1,290
(666)
General and administrative expense (recovery)
530
949
(419)
Sales and marketing expense (recovery)
(86)
336
(422)
Stock-based compensation expense
$
1,068 $
2,575 $
(1,507)
56
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Stock-based compensation expense
2024
2023
$ Change
Total stock-based compensation expense recorded as
follows:
Cost of goods sold
$
— $
— $
—
Research and product development expense
4,317
5,520
(1,203)
General and administrative expense
2,363
3,660
(1,297)
Sales and marketing expense (recovery)
776
1,540
(764)
Stock-based compensation expense
$
7,456 $
10,720 $
(3,264)
A breakdown of total depreciation and amortization expense for the three months and year ended
December 31, 2024 and 2023 are as follows:
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
Depreciation and amortization expense
2024
2023
$ Change
Total depreciation and amortization expense recorded as
follows:
Cost of goods sold
$
858 $
1,136 $
(278)
Research and product development expense
(141)
1,832
(1,973)
General and administrative expense
278
556
(278)
Sales and marketing expense
—
—
—
Depreciation and amortization expense
$
995 $
3,524 $
(2,529)
(Expressed in thousands of U.S. dollars)
Year ended December 31,
Depreciation and amortization expense
2024
2023
$ Change
Total depreciation and amortization expense recorded as
follows:
Cost of goods sold
$
4,527 $
4,211 $
316
Research and product development expense
5,587
6,538
(951)
General and administrative expense
1,441
1,997
(556)
Sales and marketing expense
2
4
(2)
Depreciation and amortization expense
$
11,557 $
12,750 $
(1,193)
10.3 EBITDA and Adjusted EBITDA
These supplemental non-GAAP measures are provided to assist readers in determining our operating
performance. We believe this measure is useful in assessing performance and highlighting trends on an
overall basis. We also believe EBITDA and Adjusted EBITDA are frequently used by securities analysts
and investors when comparing our results with those of other companies. EBITDA differs from the most
comparable GAAP measure, net loss from continuing operations, primarily because it does not include
finance expense, income taxes, depreciation of property, plant and equipment, and amortization of
intangible assets. Adjusted EBITDA adjusts EBITDA for stock-based compensation expense,
transactional gains and losses, acquisition related costs, finance and other income, recovery on
settlement of contingent consideration, asset impairment charges, and the impact of unrealized gains and
losses on foreign exchange contracts. The following tables show a reconciliation of net loss to EBITDA
and Adjusted EBITDA for the three months and year ended December 31, 2024 and 2023:
57
(Expressed in thousands of U.S. dollars)
Three months ended December 31,
EBITDA and Adjusted EBITDA
2024
2023
$ Change
Net loss from continuing operations
$
(46,471) $
(48,889) $
2,418
Depreciation and amortization
995
3,524
(2,529)
Finance expense
539
270
269
Income taxes (recovery)
18
40
(22)
EBITDA
$
(44,919) $
(45,055) $
136
Stock-based compensation expense
1,068
2,575
(1,507)
Acquisition related costs
—
(3)
3
Finance and other (income) loss
2,079
(1,871)
3,950
Impairment charge on property, plant and equipment
4,258
967
3,291
Impairment charge on intangible assets
658
—
658
Impact of unrealized (gains) losses on foreign exchange
contracts
852
(696)
1,548
Adjusted EBITDA
$
(36,004) $
(44,083) $
8,079
(Expressed in thousands of U.S. dollars)
Year ended December 31,
EBITDA and Adjusted EBITDA
2024
2023
$ Change
Net loss from continuing operations
$
(323,530) $
(144,210) $
(179,320)
Depreciation and amortization
11,557
12,750
(1,193)
Finance expense
2,146
1,105
1,041
Income taxes (recovery)
121
158
(37)
EBITDA
$
(309,706) $
(130,197) $
(179,509)
Stock-based compensation expense
7,456
10,720
(3,264)
Acquisition related costs
—
773
(773)
Finance and other (income) loss
(18,933)
(31,055)
12,122
Impairment charge on goodwill
40,277
—
40,277
Impairment charge on property, plant and equipment
111,020
967
110,053
Impairment charge on intangible assets
658
—
658
Impact of unrealized (gains) losses on foreign exchange
contracts
1,095
(1,296)
2,391
Adjusted EBITDA
$
(168,133) $
(150,088) $
(18,045)
58
Consolidated Financial Statements
(Expressed in U.S. dollars)
BALLARD POWER SYSTEMS INC.
Years ended December 31, 2024 and 2023
59
MANAGEMENT’S REPORT
Management’s Responsibility for the Financial Statements and Report on Internal Control over Financial
Reporting
The consolidated financial statements contained in this Annual Report have been prepared by management in
accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting
Standards Board. The integrity and objectivity of the data in these consolidated financial statements are
management’s responsibility. Management is also responsible for all other information in the Annual Report and for
ensuring that this information is consistent, where appropriate, with the information and data contained in the
consolidated financial statements.
Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial statements for external reporting
purposes in accordance with IFRS. Internal control over financial reporting may not prevent or detect fraud or
misstatements because of limitations inherent in any system of internal control. Management has assessed the
effectiveness of the Corporation’s internal control over financial reporting based on the framework in Internal Control
– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and concluded that the Corporation’s internal control over financial reporting was effective as of
December 31, 2024. Some of the assets and liabilities include amounts, which are based on estimates and
judgments, as their final determination is dependent on future events.
The Board of Directors oversees management’s responsibilities for financial reporting through the Audit Committee,
which consists of eight directors who are independent and not involved in the daily operations of the Corporation.
The Audit Committee meets on a regular basis with management and the external and internal auditors to discuss
internal controls over the financial reporting process, auditing matters and financial reporting issues. The Audit
Committee is responsible for appointing the external auditors (subject to shareholder approval), and reviewing and
approving all financial disclosure contained in our public documents and related party transactions.
The external auditors, KPMG LLP, have audited the financial statements and expressed an unqualified opinion
thereon. KPMG has also expressed an unqualified opinion on the effective operation of the internal controls over
financial reporting as of December 31, 2024. The external auditors have full access to management and the Audit
Committee with respect to their findings concerning the fairness of financial reporting and the adequacy of internal
controls.
“RANDALL MACEWEN”
“KATE IGBALODE"
RANDALL MACEWEN
KATE IGBALODE
President and
Senior Vice President and
Chief Executive Officer
Chief Financial Officer
March 12, 2025
March 12, 2025
60
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Ballard Power Systems Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Ballard Power Systems Inc. and
subsidiaries (the Corporation) as of December 31, 2024 and 2023, the related consolidated statements of loss and
comprehensive income (loss), changes in equity, and cash flows for each of the years then ended, and the related
notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements
present fairly, in all material respects, the financial position of the Corporation as of December 31, 2024 and 2023,
and its financial performance and its cash flows for each of the years then ended, in conformity with International
Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Corporation’s internal control over financial reporting as of December 31, 2024, based on
“criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission”, and our report dated March 12, 2025 expressed an unqualified
opinion on the effectiveness of the Corporation’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Corporation in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the
risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our
opinion.
61
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Evaluation of the recoverable amount of property, plant and equipment and goodwill
As discussed in Notes 4 (h) (ii), 5 (b), 9 and 11 to the consolidated financial statements, the carrying amounts of the
Corporation’s non-financial assets are reviewed at each reporting date to determine whether there is any indication
of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss
is recognized if the carrying amount of an asset or cash generating unit (“CGU”) exceeds its estimated recoverable
amount. For the year ended December 31, 2024, the Corporation recognized impairment of its property, plant and
equipment of $111,020 thousand and goodwill of $40,277 thousand.
We identified the evaluation of the recoverable amount of property, plant and equipment and goodwill as a critical
audit matter. The Corporation’s estimate of the recoverable amount involved significant estimation uncertainty.
Significant assumptions in determining the recoverable amount included the control premium in determining the
estimated fair value less costs to sell of the CGU and the residual fair value of the property, plant and equipment.
Subjective auditor judgment was required to evaluate the Corporation’s estimate of the recoverable amount and
residual fair value of the property, plant and equipment as at September 30, 2024.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of internal controls related to the Corporation’s development of the
recoverable amount, including the control premium, and the residual fair value of the property, plant and equipment.
We inspected and recalculated the Corporation’s estimate of the recoverable amount of the CGU using the
Corporation’s share price at September 30, 2024, the number of shares outstanding and considering a control
premium. For a selection of assets, we agreed the estimated residual fair value to underlying supporting
documentation provided by the Corporation’s management’s specialists. In addition, we involved valuation
professionals with specialized skills and knowledge, who assisted in evaluating the Corporation’s control premium
applied in the Corporation’s recoverable amount calculation by comparing to market data for comparable entities.
/s/ KPMG LLP
We have served as the Corporation’s auditor since 1999.
Vancouver, Canada
March 12, 2025
62
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Ballard Power Systems Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Ballard Power Systems Inc. and subsidiaries’ (the Corporation) internal control over financial
reporting as of December 31, 2024, based on “criteria established in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission”. In our opinion, the
Corporation maintained, in all material respects, effective internal control over financial reporting as of December
31, 2024, based on “criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission”.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated statements of financial position of the Corporation as of December 31, 2024 and
2023, the related consolidated statements of loss and comprehensive income (loss), changes in equity, and cash
flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements),
and our report dated March 12, 2025 expressed “an unqualified opinion on those consolidated financial
statements”.
Basis for Opinion
The Corporation’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Responsibility for the Financial Statements and Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Corporation’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
63
Definition and Limitations of Internal Control Over Financial Reporting
A corporation’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A corporation’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the corporation; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the corporation are being made
only in accordance with authorizations of management and directors of the corporation; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
corporation’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/ KPMG LLP
Vancouver, Canada
March 12, 2025
64
BALLARD POWER SYSTEMS INC.
Consolidated Statements of Financial Position
(Expressed in thousands of U.S. dollars)
Note
December 31,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
603,948
$
751,130
Short-term investments
2,104
2,113
Trade and other receivables
7
31,983
58,565
Inventories
8
56,417
45,870
Prepaid expenses and other current assets
4,426
7,063
Total current assets
698,878
864,741
Non-current assets:
Property, plant and equipment
9
30,424
116,325
Intangible assets
10
1,757
1,406
Goodwill
11
—
40,277
Equity-accounted investments
12
8,238
13,901
Long-term financial investments
13
37,515
40,345
Other long-term assets
495
547
Total assets
$
777,307
$
1,077,542
Liabilities and Equity
Current liabilities:
Trade and other payables
15
$
35,637
$
39,696
Deferred revenue
16
6,643
4,588
Provisions and other current liabilities
17
30,407
21,797
Current lease liabilities
18
2,899
4,505
Total current liabilities
75,586
70,586
Non-current liabilities:
Non-current lease liabilities
18
20,995
13,393
Deferred gain on finance lease liability
18
69
485
Non-current deferred revenue
16
4,989
—
Other non-current liabilities and employee future benefits
19
2,678
1,862
Total liabilities
104,317
86,326
Equity:
Share capital
20
2,428,618
2,425,641
Contributed surplus
20
309,974
306,042
Accumulated deficit
(2,060,837)
(1,737,505)
Foreign currency reserve
(4,765)
(2,962)
Total equity
672,990
991,216
Total liabilities and equity
$
777,307
$
1,077,542
See accompanying notes to consolidated financial statements.
Approved on behalf of the Board:
“Kathy Bayless”
“Jim Roche”
Director
Director
65
BALLARD POWER SYSTEMS INC.
Consolidated Statements of Loss and Comprehensive Income (Loss)
For the years ended December 31
(Expressed in thousands of U.S. dollars, except per share amounts and number of shares)
Note
2024
2023
Revenues:
Product and service revenues
22 & 30
$
69,731
$
102,368
Cost of product and service revenues
91,713
124,199
Gross margin
(21,982)
(21,831)
Operating expenses:
Research and product development
94,494
98,306
General and administrative
23,516
23,874
Sales and marketing
13,502
15,110
Other expense
24
29,806
3,783
Total operating expenses
161,318
141,073
Results from operating activities
(183,300)
(162,904)
Finance income and other
25
18,933
31,055
Finance expense
25
(2,146)
(1,105)
Net finance income
16,787
29,950
Equity in loss of investment in joint venture and associates
12 & 28
(4,941)
(10,131)
Impairment charges on property, plant and equipment
9
(111,020)
(967)
Impairment charges on intangible assets
10
(658)
—
Impairment charges on goodwill
11
(40,277)
—
Loss before income taxes
(323,409)
(144,052)
Income tax expense
27
(121)
(158)
Net loss from continued operations
(323,530)
(144,210)
Net loss from discontinued operations
26
(715)
(33,506)
Net loss
$
(324,245) $
(177,716)
Other comprehensive income (loss):
Items that will not be reclassified to profit or loss:
Actuarial gain on defined benefit plans
19
913
970
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences
(1,803)
(1,472)
Other comprehensive loss, net of tax
(890)
(502)
Total comprehensive loss
$
(325,135) $
(178,218)
Basic and diluted loss per share
Continued operations
$
(1.08) $
(0.48)
Discontinued operations
$
—
$
(0.11)
Loss per share for the period
$
(1.08) $
(0.59)
Weighted average number of common shares outstanding
299,310,384
298,661,041
See accompanying notes to consolidated financial statements.
66
BALLARD POWER SYSTEMS INC.
Consolidated Statements of Changes in Equity
(Expressed in thousands of U.S. dollars except number of shares)
Number of
shares
Share
capital
Contributed
surplus
Accumulated
deficit
Foreign
currency
reserve
Total
equity
Balance, December 31, 2022
298,394,203
$ 2,420,396
$
300,764
$ (1,560,759) $ (1,490) $ 1,158,911
Net loss
—
—
—
(177,716)
—
(177,716)
Deferred share consideration related to acquisition
(note 20)
224,902
3,053
(3,068)
—
—
(15)
DSUs redeemed (note 20)
31,736
194
(365)
—
—
(171)
RSUs redeemed (note 20)
132,745
1,494
(2,079)
—
—
(585)
Options exercised (note 20)
152,120
504
(169)
—
—
335
Share-based compensation (note 20)
—
—
10,959
—
—
10,959
Other comprehensive income (loss):
Defined benefit plan actuarial gain (note 19)
—
—
—
970
—
970
Foreign currency translation for foreign operations
—
—
—
—
(1,472)
(1,472)
Balance, December 31, 2023
298,935,706
$ 2,425,641
$
306,042
$ (1,737,505) $ (2,962) $
991,216
Net loss
—
—
—
(324,245)
—
(324,245)
RSUs redeemed (note 20)
347,901
2,505
(3,360)
—
—
(855)
Options exercised (note 20)
154,509
472
(164)
—
—
308
Share-based compensation (note 20)
—
—
7,456
—
—
7,456
Other comprehensive income (loss):
Defined benefit plan actuarial gain (note 19)
—
—
—
913
—
913
Foreign currency translation for foreign
operations
—
—
—
—
(1,803)
(1,803)
Balance, December 31, 2024
299,438,116
$ 2,428,618
$
309,974
$ (2,060,837) $ (4,765) $
672,990
See accompanying notes to consolidated financial statements.
67
BALLARD POWER SYSTEMS INC.
Consolidated Statements of Cash Flows
For the years ended December 31
(Expressed in thousands of U.S. dollars)
Note
2024
2023
Cash provided by (used in):
Operating activities:
Net loss for the year
$
(324,245) $
(177,716)
Adjustments for:
Depreciation and amortization
11,973
13,527
Deferred gain amortization
(416)
(417)
Impairment loss on trade receivables, net of cash recoveries
13,411
1,537
Inventory impairment and onerous contracts provision adjustments
5,657
14,978
Unrealized (gain) loss on forward contracts
1,095
(1,296)
Equity in loss of investment in joint venture and associates
12 & 28
4,941
10,131
Net decrease in fair value of investments
13 & 31
14,788
12,897
De-recognition of lease
(190)
120
Impairment charges on property, plant and equipment
9
111,020
967
Impairment charges on intangible assets
10
658
2,266
Impairment charges on Goodwill
11
40,277
23,991
Accretion on decommissioning liabilities
19
243
532
Employee future benefits
19
8
48
Employee future benefits plan contributions
19
(11)
(8)
Share-based compensation
20
7,456
10,959
(113,335)
(87,484)
Changes in non-cash working capital:
Trade and other receivables
13,349
(12,913)
Inventories
(16,946)
(898)
Prepaid expenses and other current assets
2,689
76
Trade and other payables
1,204
(3,580)
Deferred revenue
7,044
(3,442)
Warranty provision
(2,104)
3,671
5,236
(17,086)
Cash used in operating activities
(108,099)
(104,570)
Investing activities:
Contributions to long-term investments
13
(11,958)
(11,911)
Recovery of contributions to long-term investments
13
—
1,000
Additions to property, plant and equipment
(25,849)
(41,214)
Investment in intangible assets
10
(1,768)
(154)
Proceeds on sale of assets
9
3,170
—
Consideration paid related to acquisition
17
(100)
(2,000)
Cash used in investing activities
(36,505)
(54,279)
Financing activities:
Principal payments of lease liabilities
18
(3,327)
(4,013)
Net proceeds on issuance of share capital from share option exercises
20
308
335
Net proceeds on defined benefit obligation settlement
19
1,489
—
Cash used in (provided by) financing activities
(1,530)
(3,678)
Effect of exchange rate fluctuations on cash and cash equivalents held
(1,048)
(73)
Decrease in cash and cash equivalents
(147,182)
(162,600)
Cash and cash equivalents, beginning of year
751,130
913,730
Cash and cash equivalents, end of year
$
603,948
$
751,130
Supplemental disclosure of cash flow information (note 29). See accompanying notes to consolidated financial statements.
68
1. Reporting entity:
The principal business of Ballard Power Systems Inc. (the “Corporation”) is the design, development,
manufacture, sale and service of proton exchange membrane ("PEM") fuel cell products for a variety of
applications, focusing on power products for bus, truck, rail, marine, stationary and emerging market (material
handling, off-road and other) applications, as well as the delivery of services, including technology solutions,
after sales services and training. A fuel cell is an environmentally clean electrochemical device that combines
hydrogen fuel with oxygen (from the air) to produce electricity.
The Corporation is a company domiciled in Canada and its registered office is located at 9000 Glenlyon
Parkway, Burnaby, British Columbia, Canada, V5J 5J8. The consolidated financial statements of the
Corporation as at and for the years ended December 31, 2024 and 2023 comprise the Corporation and its
subsidiaries (note 4(a)).
2. Basis of preparation:
(a) Statement of compliance:
These consolidated financial statements of the Corporation have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”).
The consolidated financial statements were authorized for issue by the Board of Directors on March 13, 2025.
Details of the Corporation's material accounting policies are included in note 4.
(b) Basis of measurement:
The consolidated financial statements have been prepared on the historical cost basis except for the following
material items in the statements of financial position:
•
Financial assets classified as measured at fair value through profit or loss (FVTPL); and
•
Employee future benefits liability is recognized as the net of the present value of the defined benefit
obligation, less the fair value of plan assets until settled in the year ended December 31, 2024
(c) Functional and presentation currency:
These consolidated financial statements are presented in U.S. dollars, which is the Corporation’s functional
currency.
(d) Use of estimates:
The preparation of the consolidated financial statements in conformity with IFRS requires the Corporation’s
management to make estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are revised and in any future periods affected.
Significant areas having estimation uncertainty include revenue recognition, asset impairment (including
goodwill, intangible assets, and property, plant, and equipment), warranty provision, inventory and onerous
contract provisions, and fair value measurement (including long-term financial investments). These estimates
and judgments are discussed further in note 5.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
69
2. Basis of preparation (cont'd):
(e) Future operations:
The Corporation is required to assess its ability to continue as a going concern or whether substantial doubt
exists as to the Corporation’s ability to continue as a going concern into the foreseeable future. The
Corporation’s ability to continue as a going concern and realize its assets and discharge its liabilities and
commitments in the normal course of business is dependent upon the Corporation having adequate liquidity
and achieving profitable operations that are sustainable. The Corporation's liquidity objective to remain a going
concern into the foreseeable future is to maintain cash balances sufficient to fund at least six quarters of
forecasted cash used by operating activities and contractual commitments.
The Corporation’s strategy to attain this liquidity objective is to continue its drive to attain profitable operations
that are sustainable by executing a business plan that continues to focus on revenue growth, improving overall
gross margins, maintaining discipline over operating expenses, managing working capital and capital
expenditure requirements, and securing additional financing to fund its operations as needed until the
Corporation does achieve profitable operations that are sustainable. Failure to implement this plan could have
a material adverse effect on the Corporation’s financial condition and or results of operations.
3. Changes in accounting policies:
The Corporation has consistently applied the accounting policies set out in note 4 to all periods presented in
these consolidated financial statements.
Effective January 1, 2024, the Corporation adopted a number of new standards and interpretations, but they did
not have a material impact on the Corporation's consolidated financial statements.
4. Material accounting policies:
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, unless otherwise indicated.
(a) Basis of consolidation:
The consolidated financial statements include the accounts of the Corporation and its principal subsidiaries as
follows:
Percentage ownership
2024
2023
Ballard Motive Solutions
100 %
100 %
Guangzhou Ballard Power Systems Co., Ltd.
100 %
100 %
Ballard Power Systems Europe A/S
100 %
100 %
Ballard Hong Kong Ltd.
100 %
100 %
Ballard US Inc.
100 %
100 %
Ballard Services Inc.
100 %
100 %
Ballard Fuel Cell Systems Inc.
100 %
100 %
Ballard Power Corporation
100 %
100 %
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
70
4. Material accounting policies (cont'd):
(a) Basis of consolidation (cont'd):
Subsidiary Entities
Subsidiaries are entities controlled by the Corporation. The Corporation controls an entity when it is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases. Intercompany
balances and transactions are eliminated in the consolidated financial statements.
During the year ended December 31, 2023, the Corporation completed a restructuring of operations at Ballard
Motive Solutions ("BMS") and effectively closed the operation. As such, the historic operating results of the
BMS business for 2023 have been removed from continuing operating results and are instead presented
separately in the statements of loss and comprehensive income (loss) as loss from discontinued operations.
Equity Investment Entities
The Corporation also has a non-controlling, 49% interest (2023 - 49%), in Weichai Ballard Hy-Energy
Technologies Co., Ltd ("Weichai Ballard JV"). This associated company is accounted for using the equity
method of accounting.
(b) Foreign currency:
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Corporation
and its subsidiaries at the exchange rate in effect at the transaction date. Monetary assets and liabilities
denominated in other than the functional currency are translated at the exchange rates in effect at the
statement of financial position date. The resulting exchange gains and losses are recognized in earnings.
Non-monetary assets and liabilities denominated in other than the functional currency that are measured at
fair value are translated to the functional currency at the exchange rate at the date that the fair value was
determined. Non-monetary items that are measured in terms of historical cost in other than the functional
currency are translated using the exchange rate at the date of the transaction.
(ii) Foreign operations
The assets and liabilities of foreign operations are translated to the presentation currency using exchange
rates at the reporting date. The income and expenses of foreign operations are translated to the
presentation currency using exchange rates at the dates of the transactions. Foreign currency differences
are recognized in other comprehensive income (loss).
(c) Financial instruments:
(i) Financial assets
The Corporation initially recognizes loans and receivables and deposits on the date that they originated and
all other financial assets on the trade date at which the Corporation becomes a party to the contractual
provisions of the instrument. The Corporation de-recognizes a financial asset when the contractual rights to
the cash flows from the asset expire, or when it transfers substantially all the risks and rewards of
ownership of the financial asset.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
71
4. Material accounting policies (cont'd):
(c) Financial instruments (cont'd):
(i) Financial assets (cont'd)
Financial assets are classified as measured at: amortized cost; fair value through other comprehensive
income ("FVOCI") or fair value through profit or loss ("FVTPL"). The classification of financial assets is
generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics. Derivatives embedded in contracts where the host is a financial asset in the scope of the
standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for
classification. The Corporation's financial assets which consist primarily of cash and cash equivalents,
short-term investments, trade and other receivables, contract assets and long-term financial investments
are classified at amortized cost except for long-term financial investments which are measured at fair value
through profit or loss.
The Corporation also periodically enters into foreign exchange forward contracts to limit its exposure to
foreign currency rate fluctuations. These derivatives are recognized initially at fair value and are recorded as
either assets or liabilities based on their fair value. Subsequent to initial recognition, these derivatives are
measured at fair value and changes to their value are recorded through profit or loss.
(ii) Financial liabilities
Financial liabilities comprise the Corporation’s trade and other payables. The financial liabilities are initially
recognized on the date they are originated and are de-recognized when the contractual obligations are
discharged or cancelled or expire. These financial liabilities are recognized initially at fair value and
subsequently are measured at amortized cost using the effective interest method, when materially different
from the initial amount. Fair value is determined based on the present value of future cash flows, discounted
at the market rate of interest.
(d) Inventories:
Inventories are recorded at the lower of cost and net realizable value. The cost of inventories is based on
the first-in first-out principle, and includes expenditures incurred in acquiring the inventories, production or
conversion costs and other costs incurred in bringing them to their existing location and condition. In the
case of manufactured inventories and work in progress, cost includes materials, labor and appropriate
share of production overhead based on normal operating capacity. Costs of materials are determined on an
average per unit basis.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses. In establishing any impairment of inventory, management
estimates the likelihood that inventory carrying values will be affected by changes in market demand,
technology and design, which would impair the value of inventory on hand.
(e) Property, plant and equipment:
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any
accumulated impairment losses. The cost of self-constructed assets includes the cost of materials, costs
directly attributable to bringing the assets to a working condition for their intended use, and the costs of
dismantling and removing items and restoring the site on which they are located. If significant parts of an
item of property, plant and equipment have different useful lives, then they are accounted for as separate
items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
72
4. Material accounting policies (cont'd):
(e) Property, plant and equipment (cont'd):
(ii) Depreciation
Depreciation is calculated to write-off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives, and is recognized in profit or
loss.
The estimated useful lives of property, plant and equipment for current and comparative periods are as
follows:
Computer equipment
3 to 10 years
Furniture and fixtures
5 to 10 years
Leasehold improvements
The shorter of initial term of the respective lease and
estimated useful life
Production and test equipment
4 to 15 years
Leased assets are depreciated over the shorter of the lease term or their useful lives unless it is reasonably
certain that the Corporation will obtain ownership by the end of the lease term.
Right-of-use asset - Property
1 to 15 years
Right-of-use asset - Office equipment
4 to 7 years
Right-of-use asset - Vehicles
1 to 5 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(f) Leases:
IFRS 16 Leases is based on a single, on-balance sheet accounting model for lessees. As a result, the
Corporation, as a lessee, has recognized right-of-use assets representing its rights to use the underlying assets,
and lease liabilities representing its obligation to make lease payments.
At inception of a contract, the Corporation assesses whether a contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
i.
As a Lessee
The Corporation recognizes a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated
useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In
addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Corporation’s incremental borrowing rate. Generally, the Corporation uses its incremental
borrowing rate as the discount rate.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
73
4. Material accounting policies (cont'd):
(f) Leases (cont'd):
i.
As a Lessee (cont'd)
The lease liability is subsequently measured at amortized cost using the effective interest method. It is
remeasured when there is a change in future lease payments arising from a change in an index or rate, if there
is a change in the Corporation’s estimate of the amount expected to be payable under a residual value
guarantee or if the Corporation changes its assessment of whether it will exercise a purchase, extension or
termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
The Corporation presents right-of-use assets in ‘Property, plant and equipment’ and lease liabilities in ‘Lease
liability’ in the statement of financial position.
The Corporation has elected not to recognize right-of-use assets and lease liabilities for short-term leases of
properties, equipment and vehicles that have a lease term of 12 months or less. The Corporation has elected
not to recognize right-of-use assets and lease liabilities for low value leases that have initial values of less than
$5,000. The Corporation recognizes the lease payments associated with these leases as an operating expense
on a straight-line basis over the lease term.
(g) Goodwill and intangible assets:
(i) Recognition and measurement
Goodwill
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed.
Research and development
Expenditure on research activities is recognized in profit or loss as incurred.
Development expenditure is capitalized only if the expenditure can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are
probable and the Corporation intends to and has sufficient resources to complete development
and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent
to initial recognition, development expenditure is measured at cost less accumulated
amortization and any accumulated impairment losses.
Intangible assets
Intangible assets, including patents, know-how, in-process research and development,
trademarks and service marks, customer contracts and relationships, non-compete
agreements, and software systems that are acquired or developed by the Corporation and
have finite useful lives are measured at cost less accumulated amortization and any
accumulated impairment losses.
(ii) Amortization
Amortization is calculated to write-off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives, and is recognized in profit or loss. Goodwill is not
amortized.
The estimated useful lives for current and comparative periods are as follows:
ERP management reporting software system
5 to 7 years
Internally generated fuel cell intangible assets
3 to 5 years
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
74
4. Material accounting policies (cont'd):
(h) Impairment:
(i) Financial assets
An ‘expected credit loss’ ("ECL") model applies to financial assets measured at amortized cost and debt
investments at FVOCI, but not to investments in equity instruments. The Corporation's financial assets
measured at amortized cost and subject to the ECL model consist primarily of trade receivables and
contract assets.
In applying the ECL model, loss allowances are measured on either of the following bases:
•
12-month ECLs: these are ECLs that result from possible default events within the 12
months after the reporting date; and
•
lifetime ECLs: these are ECLs that result from all possible default events over the expected
life of a financial instrument.
The Corporation measures loss allowances for trade receivables and contract assets at an amount equal to
lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Corporation considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on historical experience and informed credit assessment and including
forward-looking information.
(ii) Non-financial assets
The carrying amounts of the Corporation’s non-financial assets other than inventories are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then
the asset’s recoverable amount is estimated. For assets that have indefinite useful lives including goodwill,
intangible assets, and property, plant and equipment, the recoverable amount is estimated annually or
whenever events or circumstances indicate that the carrying amount may not be recoverable.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. Fair value less costs to sell is defined as the estimated price that
would be received on the sale of the asset in an orderly transaction between market participants at the
measurement date. For the purposes of impairment testing, assets that cannot be tested individually are
grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other groups of assets ("cash-generating units").
The allocation of goodwill to cash-generating units reflects the lowest level at which goodwill is monitored
for internal reporting purposes.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its
estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses
recognized in respect of the cash generating unit are allocated first to reduce the carrying amount of any
goodwill allocated to the unit, and then to reduce the carrying amounts of the other assets in the unit on a
pro-rata basis. However, individual assets within the cash generating unit are not impaired below their
residual fair market value.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
75
4. Material accounting policies (cont'd):
(h) Impairment (cont'd):
(ii) Non-financial assets (cont'd)
An impairment loss in respect of goodwill is not reversed. In respect of other assets including property,
plant, and equipment, impairment losses recognized in prior periods are assessed at each reporting date for
any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no impairment loss had been recognized.
(i) Provisions:
A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required
to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and the risk specific to the liability. The
unwinding of the discount is recognized as a finance expense.
Warranty provision
A provision for warranty costs is recorded on product sales at the time the sale is recognized. In establishing the
warranty provision, management estimates the likelihood that products sold will experience warranty claims and
the estimated cost to resolve claims received, taking into account the nature of the contract and past and
projected experience with the products.
Decommissioning liabilities
Legal obligations to retire tangible long-lived assets are recorded at the net present value of the expected costs
of settlement at acquisition with a corresponding increase in asset value. These include assets leased under
operating leases. The liability is accreted over the life of the asset to the ultimate settlement amount and the
increase in asset value is depreciated over the remaining useful life of the asset.
(j) Revenue recognition:
The Corporation generates revenues primarily from product sales, the license and sale of intellectual property
and fundamental knowledge, and the provision of engineering services and technology transfer services.
Product revenues are derived primarily from standard product sales contracts and from long-term fixed price
contracts. Intellectual property and fundamental knowledge license revenues are derived primarily from
standard licensing and technology transfer agreements. Engineering service and technology transfer services
revenues are derived primarily from cost-plus reimbursable contracts and from long-term fixed price contracts.
Revenue is recognized when a customer obtains control of the goods or services. Determining the timing of the
transfer of control, at a point in time or over time, requires judgment. On standard product sales contracts,
revenues are recognized when customers obtain control of the product, that is when transfer of title and risks
and rewards of ownership of goods have passed and when obligation to pay is considered certain. Invoices
are generated and revenue is recognized at that point in time. Provisions for warranties are made at the time of
sale.
On standard licensing and technology transfer agreements, revenues are recognized on the transfer of rights
to a licensee, when it is determined to be distinct from other performance obligations, and if the customer can
direct the use of, and obtain substantially all of the remaining benefits from the license as it exists at the time of
transfer. In other cases, the proceeds are considered to relate to the right to use the asset over the license
period and the revenue is recognized over that period. If it is determined that the license is not distinct from
other performance obligations, revenue is recognized over time as the customer simultaneously receives and
consumes the benefit.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
76
4. Material accounting policies (cont'd):
(j) Revenue recognition (cont'd):
On cost-plus reimbursable contracts, revenues are recognized as costs are incurred, and include applicable
fees earned as services are provided.
On long-term fixed price contracts, the customer controls all of the work in progress as the services are being
provided. This is because under these contracts, the deliverables are made to a customer’s specification, and
if a contract is terminated by the customer, then the Corporation is entitled to reimbursement of the costs
incurred to date plus the applicable gross margin. Therefore, revenue from these contracts and the associated
costs are recognized as the costs are incurred over time.
On long-term fixed price contracts, revenues are recognized over time using cumulative costs incurred to date
relative to total estimated costs at completion to measure progress towards satisfying performance obligations.
Generally, revenue is recognized by multiplying the expected consideration by the ratio of cumulative costs
incurred to date to the sum of incurred and estimated costs for completing the performance obligation. The
cumulative effect of changes to estimated revenues and estimated costs for completing a contract are
recognized in the period in which the revisions are identified. In the event that the estimated costs for
completing the contract exceed the expected revenues on a contract, such loss is recognized in its entirety in
the period it becomes known.
Deferred revenue (i.e. contract liabilities) represents cash received from customers in excess of revenue
recognized on uncompleted contracts.
(k) Finance income and expense:
Finance income comprises interest income on funds invested, gains (losses) on the disposal of available-for-
sale financial assets, foreign exchange gains (losses), and changes in the fair value of financial assets
(including long-term financial investments) at fair value through profit or loss, pension administration expense,
and employee future benefit plan expense. Interest income is recognized as it accrues in income, using the
effective interest method.
(l) Income taxes:
The Corporation follows the asset and liability method of accounting for income taxes. Under this method,
deferred income taxes are recognized for the deferred income tax consequences attributable to differences
between the financial statement carrying values of assets and liabilities and their respective income tax bases
(temporary differences) and for loss carry forwards. The resulting changes in the net deferred tax asset or
liability are included in profit or loss.
Deferred tax assets and liabilities are measured using enacted, or substantively enacted, tax rates expected to
apply to taxable income in the years in which temporary differences are expected to be recovered or settled.
The effect on deferred income tax assets and liabilities, of a change in tax rates, is included in income in the
period that includes the substantive enactment date. Deferred income tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
77
4. Material accounting policies (cont'd):
(m) Employee benefits:
Defined benefit plans
A defined benefit plan is a post-employment pension plan other than a defined contribution plan. The
Corporation’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in return for their service in the current and
prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and
the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on AA credit-
rated bonds that have maturity dates approximating the terms of the Corporation’s obligations and that are
denominated in the same currency in which the benefits are expected to be paid. The calculation is performed
annually by a qualified actuary using the projected unit credit method.
When the calculation results in a benefit to the Corporation, the recognized asset is limited to the total of any
unrecognized past service costs and the present value of economic benefits available in the form of any future
refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of
economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the
Corporation. An economic benefit is available to the Corporation if it is realizable during the life of the plan, or on
settlement of the plan liabilities.
The Corporation recognizes all remeasurements arising from defined benefit plans, which comprise actuarial
gains and losses, immediately in other comprehensive income (loss). Remeasurements recognized in other
comprehensive income (loss) are not recycled through profit or loss in subsequent periods.
Other long-term employee benefits
The Corporation’s net obligation in respect of long-term employee benefits other than pension plans is the
amount of future benefit that employees have earned in return for their service in the current and prior periods;
that benefit is discounted to determine its present value, and the fair value of any related assets is deducted.
The discount rate is the yield at the reporting date on AA credit-rated bonds that have maturity dates
approximating the terms of the Corporation’s obligations. The calculation is performed using the projected unit
credit method. Any actuarial gains and losses are recognized in other comprehensive income or loss in the
period in which they arise.
Termination benefits
Termination benefits are recognized as an expense (restructuring expense recorded in other operating
expense) when the Corporation is committed demonstrably, without realistic possibility of withdrawal, to a formal
detailed plan to either terminate employment before the normal retirement date, or to provide termination
benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary
redundancies are recognized as an expense if the Corporation has made an offer of voluntary redundancy, it is
probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits
are payable more than 12 months after the reporting period, then they are discounted to their present value.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash bonus or profit sharing plans if
the Corporation has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee, and the obligation can be estimated reliably.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
78
4. Material accounting policies (cont'd):
(n) Share-based compensation plans:
The Corporation uses the fair-value based method of accounting for share-based compensation for all awards
of shares, share options, restricted share units, and deferred share units granted. The resulting compensation
expense, based on the fair value of the awards granted, excluding the impact of any non-market service and
performance vesting conditions, is charged to profit or loss over the period that the employees unconditionally
become entitled to the award, with a corresponding increase to contributed surplus.
Fair values of share options are calculated using the Black-Scholes valuation method as of the grant date and
adjusted for estimated forfeitures. Restricted share units and deferred share units are valued at the fair-value
price at grant date. For awards with graded vesting, the fair value of each tranche is calculated separately and
recognized over its respective vesting period. Non-market vesting conditions are considered in making
assumptions about the number of awards that are expected to vest. At each reporting date, the Corporation
reassesses its estimates of the number of awards that are expected to vest and recognizes the impact of any
revision in the statement of profit or loss with a corresponding adjustment to contributed surplus. For awards
with market conditions, the fair value is determined at grant date using a complex financial simulation model and
there is no subsequent true-up to actual.
The Corporation issues shares, share options, restricted share units, and deferred share units under its share-
based compensation plans as described in note 20. Any consideration paid by employees on exercise of share
options or purchase of shares, together with the amount initially recorded in contributed surplus, is credited to
share capital. The redemption of restricted share units and deferred share units are non-cash transactions that
are recorded in contributed surplus and share capital.
(o) Earnings (loss) per share:
Basic earnings (loss) per share is computed using the weighted average number of common shares
outstanding during the period, adjusted for treasury shares. Diluted earnings per share is calculated using the
treasury stock method.
Under the treasury stock method, the dilution is calculated based upon the number of common shares issued
should deferred share units (“DSUs”), restricted share units (“RSUs”), and “in the money” options, if any, be
exercised. When the effects of outstanding stock-based compensation arrangements would be anti-dilutive,
diluted loss per share is not shown separately.
(p) Segment reporting:
An operating segment is a component of the Corporation that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Corporation’s other components. Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head
office expenses, and income tax assets and liabilities.The Corporation operates in a single operating segment,
Fuel Cell Products and Services, as the Corporation's chief executive officer reviews the results of the business
as a whole.
5.
Critical judgments in applying accounting policies and key sources of estimation uncertainty:
Critical judgments in applying accounting policies:
Critical judgments that management has made in the process of applying the Corporation’s accounting policies
and that have the most significant effect on the amounts recognized in the consolidated financial statements are
limited to management’s assessment of the Corporation’s ability to continue as a going concern (note 2(e)).
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
79
5.
Critical judgments in applying accounting policies and key sources of estimation uncertainty (cont'd):
Key sources of estimation uncertainty:
The following are key assumptions concerning the future and other key sources of estimation uncertainty that
have significant risk of resulting in a material adjustment to the reported amount of assets, liabilities, income and
expenses within the next financial year.
(a) Revenue recognition:
On long-term fixed price contracts, revenues are recorded over time using costs incurred to date relative to total
estimated costs at completion to measure progress towards satisfying performance obligations. Revenue is
recognized by multiplying the expected consideration by the ratio of cumulative costs incurred to date to the
sum of incurred and estimated costs for completing the performance obligation. The cumulative effect of
changes to expected revenues and expected costs for completing a contract are recognized in the period in
which the revisions are identified. If the expected costs exceed the expected revenues on a contract, such loss
is recognized in its entirety in the period it becomes known.
(i)
The determination of expected costs for completing a contract is based on estimates that can be
affected by a variety of factors such as variances in the timeline to completion, the cost of materials,
the availability and cost of labour, as well as productivity.
(ii)
The determination of potential revenues includes the contractually agreed amount and may be
adjusted based on the estimate of the Corporation’s attainment on achieving certain defined
contractual milestones. Management’s estimation is required in determining the amount of
consideration to which the Corporation expects to be entitled and in determining when a performance
obligation has been met.
Estimates used to determine revenues and costs of long-term fixed price contracts involve uncertainties that
ultimately depend on the outcome of future events and are periodically revised as projects progress. There is a
risk that a customer may ultimately disagree with management’s assessment of the progress achieved against
milestones, or that the Corporation's estimates of the work required to complete a contract may change.
(b) Asset impairment:
Many of the factors used in assessing fair value are outside the control of management and it is reasonably
likely that assumptions and estimates will change from period to period. These changes may result in future
impairments. For example, the revenue growth rate could be lower than projected due to economic, industry or
competitive factors, or the discount rate used in the value in use model could increase due to a change in
market interest rates.
In the current environment, certain of these estimation uncertainty risks have increased in magnitude, primarily
with respect to property, plant and equipment, intangible assets, and goodwill.
The carrying amounts of the Corporation's non-financial assets, other than inventories, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indicator exists, then the
asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the
greater of its value in use and its fair value less costs to sell. However, individual assets within the cash-
generating unit are not impaired below their residual fair market value. Once goodwill is impaired, it is not
reversed in the future.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
80
5.
Critical judgments in applying accounting policies and key sources of estimation uncertainty (cont'd):
Key sources of estimation uncertainty (cont'd):
(c) Warranty provision:
A provision for warranty costs is recorded on product sales at the time of shipment. In establishing the warranty
provision, management estimates the likelihood that products sold will experience warranty claims and the cost
to resolve claims received. In making such determinations, the Corporation uses estimates based on the nature
of the contract and past and projected experience with the products. Should these estimates prove to be
incorrect, the Corporation may incur costs different from those provided for in the warranty provision.
Management reviews warranty assumptions and makes adjustments to the provision at each reporting date
based on the latest information available, including the expiry of contractual obligations. Adjustments to the
warranty provision are recorded in cost of product and service revenues.
(d) Inventory and onerous contracts provision:
In determining the lower of cost and net realizable value of inventory and in establishing the appropriate
provision for inventory obsolescence, management estimates the likelihood that inventory carrying values will
be affected by changes in market pricing or demand for the products and by changes in technology or design
which could make inventory on hand obsolete or recoverable at less than the recorded value. Management
performs regular reviews to assess the impact of changes in technology and design, sales trends and other
changes on the carrying value of inventory. Where it is determined that such changes have occurred and will
have a negative impact on the value of inventory on hand, appropriate provisions are made.
If there is a subsequent increase in the value of inventory on hand, reversals of previous write-downs to net
realizable value are made. Unforeseen changes in these factors could result in additional inventory provisions,
or reversals of previous provisions, being required.
A provision for onerous contracts is also assessed and measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of continuing with the contract, which is
determined based on the incremental costs of fulfilling the obligation under the contract and an allocation of
other costs directly related to fulfilling the contract. Before an onerous contract provision is established, the
Corporation recognizes any impairment loss on the assets (including through an inventory provision) associated
with that contract.
(e) Fair value measurement (including long-term financial investments) and residual fair value of property, plant
and equipment:
A number of the Corporation’s accounting policies and disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
When one is available, the Corporation measures the fair value of an instrument or asset using the quoted price
in an active market for that instrument or asset. A market is regarded as “active” if transactions for the asset or
liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If
there is no quoted price in an active market, then the Corporation uses valuation techniques that maximize the
use of relevant observable inputs and minimize the use of unobservable inputs. This involves developing
estimates and assumptions consistent with how market participants would price the instrument or asset.
Management bases its assumptions on observable data as far as possible, but this is not always available. In
that case, management uses the best information available. Where they are available, the fair value of
investments is based on observable market transactions. Estimated fair values may vary from the actual prices
that would be achieved in an arm’s length transaction at the reporting date.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
81
5.
Critical judgments in applying accounting policies and key sources of estimation uncertainty (cont'd):
Key sources of estimation uncertainty (cont'd):
(e) Fair value measurement (including long-term financial investments) and residual fair value of property, plant
and equipment (cont'd):
The best evidence of the fair value of a financial instrument or asset (including long-term financial investments)
on initial recognition is usually the transaction price – i.e., the fair value of the consideration given or received. If
the Corporation determines that the fair value on initial recognition differs from the transaction price and the fair
value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a
valuation technique for which any unobservable inputs are judged to be insignificant in relation to the
measurement, then the financial instrument or asset is initially measured at fair value, adjusted to defer the
difference between the fair value on initial recognition and the transaction price. Subsequently, that difference is
recognized in profit or loss on an appropriate basis over the life of the instrument or asset but no later than
when the valuation is wholly supported by observable data, or the transaction is closed out.
6. Recent accounting pronouncements and future accounting policy changes:
The following is an overview of accounting standard changes that the Corporation will be required to adopt in
future years. The Corporation expects to adopt these standards as at their effective dates and will continue to
evaluate the impact of these standards on the consolidated financial statements.
Presentation and Disclosure in Financial Statements (IFRS 18)
On April 9, 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve
reporting of financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements. It carries
forward many requirements from IAS 1 unchanged.
The new Accounting Standard introduces significant changes to the structure of a company’s income statement,
more discipline and transparency in presentation of management's own performance measures (commonly
referred to as 'non-GAAP measures,') and less aggregation of items into large, single numbers. The main
impacts of the new Accounting Standard include:
•
introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to
be allocated between three new distinct categories based on a company’s main business activities (i.e.
operating, investing and financing);
•
requiring disclosure about management performance measures (MPMs); and
•
adding new principles for aggregation and disaggregation of information.
IFRS 18 applies for annual periods beginning on or after January 1, 2027. Early application is permitted. The
extent of the impact of adoption of IFRS 18 has not yet been determined.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
82
7. Trade and other receivables:
December 31,
2024
December 31,
2023
Trade accounts receivable, gross
$
29,475
$
39,157
Allowance for doubtful accounts
(5,292)
(1,667)
Trade accounts receivable, net
24,183
37,490
Other receivables
4,654
7,806
Contract assets
3,146
13,269
$
31,983
$
58,565
Contract assets
Contract assets primarily relate to the Corporation's rights to consideration for work completed but not billed as
at December 31, 2024 for engineering services and technology transfer services.
Contract assets
December 31,
2024
At January 1, 2024
$
13,269
Additions to contract assets
1,375
Invoiced during the year
(2,320)
Impaired during the year
(9,178)
At December 31, 2024
$
3,146
Information about the Corporation's exposure to credit and market risks, and impairment losses for trade
receivables and contract assets is included in note 31.
8. Inventories:
December 31,
2024
December 31,
2023
Raw materials and consumables
$
15,306
$
15,085
Work-in-progress
6,622
15,041
Finished goods
26,952
7,169
Service inventory
7,537
8,575
$
56,417
$
45,870
In 2024, the amount of raw materials and consumables, finished goods and work-in-progress recognized as
cost of product and service revenues amounted to $81,785,000 (2023 - $103,850,000).
In 2024, the Corporation recorded negative inventory impairment and onerous contract provision adjustments of
$11,818,000 (2023 - $17,181,000) and reversed previously recorded adjustments of $6,200,000 (2023 -
$2,203,000) primarily related to the sale or consumption of inventory previously provided for including on certain
onerous contracts, resulting in net negative inventory impairment and onerous contract provision adjustments of
$5,618,000 (2023 - $14,978,000). Write-downs and reversals are included in either cost of product and service
revenues, or research and product development expense, depending on the nature of inventory.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
83
9. Property, plant and equipment:
December 31,
2024
December 31,
2023
Property, plant and equipment owned
$
9,000
$
102,206
Right-of-use assets
21,424
14,119
$
30,424
$
116,325
Property, plant and equipment owned
Net carrying amounts
December 31,
2024
December 31,
2023
Computer equipment
$
545
$
1,405
Furniture and fixtures
3,300
1,436
Leasehold improvements
3,600
2,245
Production and test equipment
95,081
97,120
Impairment reserve
(93,526)
—
$
9,000
$
102,206
Cost
December 31,
2023
Additions
Disposals
Reclass
Effect of
movements in
exchange rates
December 31,
2024
Building
$
—
$
852
$
—
$
(852) $
—
$
—
Computer equipment
7,356
178
—
—
—
7,534
Furniture and fixtures
2,764
10
(376)
3,101
(3)
5,496
Leasehold improvements
10,780
1,227
—
2,335
7
14,349
Production and test equipment
146,097
23,075
—
(5,574)
(10)
163,588
$
166,997
$
25,342
$
(376) $
(990) $
(6) $
190,967
Accumulated depreciation
December
31, 2023
Depreciation
Disposals
Impairment
Reclass
Effect of
movements
in exchange
rates
December
31, 2024
Building
$
—
$
—
$
—
$
852
$
(852)
$
—
Computer equipment
5,951
455
—
585
—
(2)
6,989
Furniture and fixtures
1,328
474
(200)
458
140
(4)
2,196
Leasehold improvements
8,535
1,171
87
850
109
(3)
10,749
Production and test equipment
48,977
6,714
—
13,199
(387)
4
68,507
Impairment reserve
—
(1,550)
—
95,076
—
—
$
93,526
$
64,791
$
7,264
$
(113) $
111,020
$
(990) $
(5) $
181,967
During the year ended December 31, 2024, the Corporation recognized impairment charges on property, plant,
and equipment of $111,020,000 consisting of a net fair value impairment allowance against consolidated capital
assets of $95,076,000 to impair these operating assets to their estimated residual fair value of approximately
$9,000,000 (based on a level 3 fair value determination) and a write-down of certain specific assets of
$15,944,000 located primarily in Canada, Denmark, and China, primarily as a result of the global corporate
restructuring initiated in September 2024. In the event that the Corporation's market capitalization recovers in
the future, this impairment may be reversed.
During the year ended December 31, 2024, the Corporation disposed of certain small stationary assets in
Denmark consisting of property, plant, and equipment of $263,000 and inventory of $2,907,000 for net proceeds
of $3,170,000, resulting in a gain/loss of $nil.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
84
9. Property, plant and equipment (cont'd):
Property, plant and equipment owned (cont'd)
During the year ended December 31, 2023, impairment charges of $967,000 consisted primarily of a write-down
of assets in China of $936,000 and charges of $31,000 for production and test equipment that was never placed
in service and was determined not required to support the Corporation's future manufacturing or testing
capabilities.
Cost
December 31,
2022
Additions
Disposals
Reclass
Effect of
movements in
exchange
rates
December 31,
2023
Building
$
—
$
936
$
—
$
—
$
—
$
936
Computer equipment
6,741
745
—
(130)
—
7,356
Furniture and fixtures
2,406
328
—
—
30
2,764
Leasehold improvements
9,650
1,103
—
—
27
10,780
Production and test equipment
109,202
38,102
(111)
(1,041)
(55)
146,097
$
127,999
$
41,214
$
(111) $
(1,171) $
2
$
167,933
Accumulated depreciation
December
31, 2022
Depreciation
Disposals
Impairment
Reclass
Effect of
movements
in exchange
rates
December
31, 2023
Building
$
—
$
—
$
—
$
936
$
—
$
—
$
936
Computer equipment
5,534
491
—
—
(73)
(1)
5,951
Furniture and fixtures
1,083
245
—
—
(12)
12
1,328
Leasehold improvements
8,100
431
—
—
4
—
8,535
Production and test equipment
42,938
7,132
(23)
31
(1,090)
(11)
48,977
$
57,655
$
8,299
$
(23) $
967
$
(1,171) $
—
$
65,727
Right-of-use assets
The Corporation leases certain assets under lease agreements, comprising primarily of leases of land and
buildings, office equipment and vehicles (note 18).
Net carrying amounts included in property, plant and equipment
December 31,
2024
December 31,
2023
Property
$
21,179 $
13,691
Equipment
34
70
Vehicle
211
358
$
21,424 $
14,119
Cost
December 31,
2023
Additions
De-recognition
Reclass
Effect of
movements in
exchange rates
December 31,
2024
Property
$
34,447
$
13,460
$
(14,731) $
102
$
14
$
33,292
Equipment
176
—
—
—
—
176
Vehicle
637
91
(353)
263
(10)
628
$
35,260
$
13,551
$
(15,084) $
365
$
4
$
34,096
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
85
9. Property, plant and equipment (cont'd):
Right-of-use assets (cont'd)
Accumulated depreciation
December 31,
2023
Depreciation
De-recognition
Reclass
Effect of
movements in
exchange rates
December 31,
2024
Property
$
20,757
$
3,794
$
(12,434) $
1
$
(5) $
12,113
Equipment
106
35
—
—
1
142
Vehicle
278
121
(353)
364
7
417
$
21,141
$
3,950
$
(12,787) $
365
$
3
$
12,672
Cost
December 31,
2022
Additions
De-recognition
Effect of
movements in
exchange rates
December 31,
2023
Property
$
28,844
$
5,676
$
(73) $
—
$
34,447
Equipment
188
—
(11)
(1)
176
Vehicle
637
150
(135)
(15)
637
$
29,669
$
5,826
$
(219) $
(16) $
35,260
Accumulated depreciation
December 31,
2022
Depreciation
De-recognition
Effect of
movements in
exchange rates
December 31,
2023
Property
$
17,357
$
3,382
$
(3) $
21
$
20,757
Equipment
72
41
(7)
—
106
Vehicle
223
109
(58)
4
278
$
17,652
$
3,532
$
(68) $
25
$
21,141
10. Intangible assets:
December 31,
2024
December 31,
2023
ERP management reporting software system
$
1,757
$
1,406
Accumulated
Net carrying
Balance
Cost
amortization
amount
At January 1, 2023
$
79,227 $
74,013 $
5,214
Additions to intangible assets
154
—
154
Amortization expense
1,696
(1,696)
Impairment on intangible assets (note 26)
2,266
(2,266)
At December 31, 2023
79,381
77,975
1,406
Impaired asset retirement adjustment
(19,799)
(19,799)
—
Adjusted opening balance at December 31, 2023
59,582
58,176
1,406
Additions to intangible assets
1,768
—
1,768
Amortization expense
—
759
(759)
Impairment on intangible assets
658
(658)
Impaired asset retirement adjustment
(6,269)
(6,269)
—
At December 31, 2024
$
55,081 $
53,324 $
1,757
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
86
10. Intangible assets (cont'd):
Additions to intangible assets in 2024 of $1,768,000 (2023 - $154,000) consist primarily of costs to expand and
enhance the capabilities of the ERP management reporting software system.
Amortization expense on intangible assets is allocated to research and product development expense or
general and administration expense depending upon the nature of the underlying assets. During the year ended
December 31, 2024, amortization of $759,000 (2023 - $1,696,000) was recorded.
During the year ended December 31, 2024, the Corporation recognized impairment charges on intangible
assets of $658,000 consisting of a write-down of certain information technology assets located in Denmark
primarily as a result of the global corporate restructuring initiated in September 2024.
During the year ended December 31, 2023, the Corporation recognized impairment charges on intangible
assets of $2,266,000 in net loss from discontinued operations consisting of the write-down of technology
intangible assets to their estimated fair value of $nil as a result of the restructuring and effective closure of
operations of Ballard Motive Solutions in the U.K. (note 26).
11. Goodwill:
The carrying amounts of the Corporation's non-financial assets, other than inventories, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indicator exists, then the
asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives, the
recoverable amount is estimated annually, or whenever events or circumstances indicate that the carrying
amount may not be recoverable. The recoverable amount of an asset or cash-generating unit is the greater of
its value in use and its fair value less costs to sell. However, individual assets within the cash-generating unit
are not impaired below their estimated residual fair value.
As a result of indicators of potential impairment including the decline in the Corporation's market capitalization in
2024, the initiation of a global corporate restructuring (notes 17 and 24) in September 2024, and indicators of
slowing hydrogen and fuel cell policy implementation and market adoption, the Corporation updated its goodwill
and non-financial asset impairment tests as of September 30, 2024.
The goodwill impairment testing requires a comparison of the carrying value of the asset to the higher of (i)
value in use; and (ii) fair value less costs to sell. Value in use is defined as the present value of future cash
flows expected to be derived from the asset in its current state. The Corporation’s fair value less costs to sell
test is a modified market capitalization assessment, whereby the fair value of the Fuel Cell Products and
Services segment is determined by first calculating the value of the Corporation at September 30, 2024 based
on the average closing share price in the month of September, adding a reasonable estimated control premium
to determine the Corporation’s enterprise value on a controlling basis after adjusting for excess cash balances,
deducting the fair value of long-term financial investments, and then deducting the estimated costs to sell to
arrive at the fair value of the Fuel Cell Products and Services segment.
As a result of the impairment tests performed at September 30, 2024, the Corporation recognized goodwill
impairment charges of $40,277,000 to write-down corporate goodwill to $nil. Impairment losses on goodwill are
not reversed.
During the year ended December 31, 2023, the Corporation recognized goodwill impairment charges of
$23,991,000 related to the the restructuring and effective closure of operations of Ballard Motive Solutions in the
U.K. (note 26).
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
87
12. Equity-accounted Investments:
For the year ended December 31, 2024, the Corporation recorded $4,941,000 (2023 - $10,131,000) in equity
loss of investment in joint venture and associates, consisting of equity loss in Weichai Ballard JV of $4,941,000
(2023 - $9,931,000) and equity loss in Synergy Ballard JV Co of $nil (2023 - $200,000).
On completion of an Equity Transfer Agreement in October 2023, the Corporation disposed of its 10%
investment in Synergy Ballard JVCo valued at $nil as of December 31, 2023.
Investment in Weichai Ballard JV
Investment in Weichai Ballard JV
December 31,
2024
December 31,
2023
Beginning balance
$
13,901
$
24,026
Recognition (deferral) of 49% profit on inventory not yet sold to third party, net
(168)
1,205
Equity in loss
(4,941)
(9,931)
Cumulative translation adjustment due to foreign exchange
(554)
(1,399)
Ending balance
$
8,238
$
13,901
Weichai Ballard JV is an associate in which the Corporation has significant influence and a 49% ownership
interest. At December 31, 2024, as specified in the Equity Joint Venture Agreement, the Corporation has
fulfilled its capital contribution commitments to Weichai Ballard JV.
The following tables summarize the financial information of Weichai Ballard JV as included in its own financial
statements as of December 31, 2024, adjusted for foreign exchange differences, the application of the
Corporation's accounting policies, and the Corporation's incorporation costs.
December 31,
2024
December 31,
2023
Percentage ownership interest (49%)
Current assets
$
40,993
$
63,023
Non-current assets
50
132
Current liabilities
(18,398)
(29,265)
Net assets (100%)
22,645
33,890
Corporation's share of net assets (49%)
11,096
16,607
Incorporation costs
324
324
Elimination of unrealized profit on downstream sales, net of sale to third party
(3,182)
(3,030)
Carrying amount of investment in Weichai Ballard JV
$
8,238
$
13,901
December 31,
December 31,
2024
2023
Revenue (100%)
$
2,290
$
12,705
Net loss (100%)
10,084
20,268
Corporation's share of net loss (49%)
$
4,941
$
9,931
13. Long-term financial investments:
In addition to the above equity-accounted investments, the Corporation has also acquired ownership interest in
various other investments, which are recognized at fair value (note 31).
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
88
13. Long-term financial investments (cont'd):
Net carrying value
December 31,
2023
Contributions
(Proceeds)
Change in Fair
Value
December 31,
2024
Long-term investment - Forsee Power
$
14,969 $
— $
(12,699) $
2,270
Long-term investment - Wisdom Motor
4,100
—
(2,200)
1,900
Long-term investment - Quantron AG
4,400
1
(4,401)
—
Long-term investment - HyCap Fund
12,801
6,102
5,084
23,987
Long-term investment - Clean H2 Fund
4,075
5,328
(360)
9,043
Long-term investment - Templewater Fund
—
527
(212)
315
$
40,345 $
11,958 $
(14,788) $
37,515
Net carrying value
December 31,
2022
Contributions
(Proceeds)
Change in Fair
Value
December 31,
2023
Long-term investment - Forsee Power
$
18,470 $
— $
(3,501) $
14,969
Long-term investment - Wisdom Motor
10,000
(1,000)
(4,900)
4,100
Long-term investment - Quantron AG
5,333
3,304
(4,237)
4,400
Long-term investment - HyCap Fund
7,963
4,624
214
12,801
Long-term investment - Clean H2 Fund
565
3,983
(473)
4,075
$
42,331 $
10,911 $
(12,897) $
40,345
During the year ended December 31, 2024, changes in fair value and foreign exchange adjustments for long-
term investments totalling $14,788,000 (2023 - $12,897,000) were recognized as an unrealized loss in the
consolidated statements of loss and comprehensive income (loss) and included in finance income and other
(notes 25 and 31).
Investment in Forsee Power SA
In October 2021, the Corporation acquired a non-controlling 9.8% equity interest in Forsee Power SA ("Forsee
Power"), a publicly traded French company specializing in the design, development, manufacture,
commercialization, and financing of smart battery systems for sustainable electric transport.
During the year ended December 31, 2024, changes in fair value and foreign exchange adjustments totalling
($12,699,000) (2023 - ($3,501,000)) were recognized as an unrealized loss in the consolidated statements of
loss and comprehensive income (loss) and included in finance income and other (notes 25 and 31), resulting in
net fair value investment in Forsee Power of $2,270,000 as of December 31, 2024 (2023 - $14,969,000), now
representing a non-controlling 7.3% equity interest.
Investment in Wisdom Motor Holdings Ltd.
In June 2022, the Corporation invested $10,000,000 and acquired a non-controlling 7.2% interest in Wisdom
Group Holdings Ltd. ("Wisdom Motor"), a privately held Cayman Islands holding company with operating
subsidiaries whose business includes the design and manufacture of vehicles, including zero emission fuel cell
electric buses, trucks, and battery-electric vehicles. During the year ended December 31, 2023, the Corporation
assigned its option held to purchase additional Series A Preferred Shares in Wisdom for consideration of
$1,000,000, resulting in recovery of contributions of $1,000,000. The exercise of this option by the acquiring
counterparties, diluted the Corporation's ownership interest from 7.2% to 6.7% as of December 31, 2024.
During the year ended December 31, 2024, changes in fair value totalling ($2,200,000) (2023 - ($4,900,000))
were recognized as an unrealized loss in the consolidated statements of loss and comprehensive income (loss)
and included in finance income and other (notes 25 and 31), resulting in net fair value investment in Wisdom
Motor of $1,900,000 (2023 - $4,100,000) as of December 31, 2024.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
89
13. Long-term financial investments (cont'd):
Investment in Quantron AG
In September 2022, the Corporation invested €5,000,000 ($5,183,000) and acquired a non-controlling 1.9%
equity interest in Quantron AG, a privately held German electric vehicle integrator and specialty OEM to
accelerate fuel cell truck adoption. During the year ended December 31, 2023, the Corporation made a
committed additional contribution of €3,000,000 ($3,304,000) to exercise its option to purchase an additional
793 shares, resulting in a non-controlling ownership interest of 3.0% in Quantron AG as of December 31, 2024.
In May 2024, the Corporation made a nominal additional contribution of $1,000 to purchase additional shares in
order to maintain its non-controlling 3.0% equity interest. During 2024, Quantron AG commenced insolvency
proceedings.
During the year ended December 31, 2024, changes in fair value and foreign exchange adjustments totalling
($4,401,000) (2023 -($4,237,000)) were recognized as an unrealized loss in the consolidated statements of loss
and comprehensive income (loss) and included in finance income and other (notes 25 and 31), resulting in net
fair value investment in Quantron AG of $nil (2023 - $4,400,000) as of December 31, 2024.
Investment in Hydrogen Funds
HyCap Fund I SCSp
In August 2021, the Corporation invested in HyCap Fund I SCSp (“HyCap”), a special limited partnership
registered in Luxembourg. During the year ended December 31, 2024, the Corporation made additional
contributions of £4,768,000 ($6,102,000) (2023 - £3,771,000 ($4,624,000)) for total contributions of
£15,755,000 ($20,314,000).
During the year ended December 31, 2024, changes in fair value and foreign exchange adjustments totalling
$5,084,000 (2023 - $214,000) were recognized as an unrealized gain in the consolidated statements of loss
and comprehensive income (loss) and included in finance income and other (notes 25 and 31), resulting in net
fair value investment in HyCap of $23,987,000 (2023 - $12,801,000) as of December 31, 2024.
Clean H2 Infrastructure Fund
In December 2021, the Corporation invested in Clean H2 Infrastructure Fund I ("Clean H2"), a special limited
partnership registered in France. During the year ended December 31, 2024, the Corporation made additional
contributions of €4,962,000 ($5,328,000) (2023 - €3,705,000 ($3,983,000)) for total contributions of €9,663,000
($10,475,000).
During the year ended December 31, 2024, changes in fair value and foreign exchange adjustments totalling
($360,000) (2023 - ($473,000)) were recognized as an unrealized loss in the consolidated statements of loss
and comprehensive income (loss) and included in finance income and other (notes 25 and 31), resulting in net
fair value investment in Clean H2 of $9,043,000 (2023 - $4,075,000) as of December 31, 2024.
Investment in Decarbonization and Climate Technology Fund
Templewater Fund
In February 2024, the Corporation invested in Templewater Decarbonization I, L.P ("Templewater"), a special
limited partnership registered in Cayman Islands. During the year ended December 31, 2024, the Corporation
made initial contributions of $527,000 (2023 - $nil) representing a 2% equity interest, on a total commitment of
$1,000,000, remainder yet to be paid.
During the year ended December 31, 2024, changes in fair value totalling ($212,000) (2023 - $nil) were
recognized as an unrealized loss in the consolidated statements of loss and comprehensive income (loss) and
included in finance income and other (notes 25 and 31), resulting in net fair value investment in Templewater of
$315,000 (2023 - $nil) as of December 31, 2024.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
90
14. Bank facilities:
The Corporation has the following bank facilities available to it.
Letter of Guarantee Facility
The Corporation has a Letter of Guarantee Facility (“LG Facility”), enabling the bank to issue letters of
guarantee, standby letters of credit, performance bonds, or similar credits on the Corporation's behalf from time
to time up to a maximum of $2,000,000. At December 31, 2024, EUR €979,000 (CDN $1,463,000) (2023 -
EUR €979,000 (CDN $1,433,000) was outstanding on the LG Facility.
The LG Facility also enables the Corporation to enter into foreign exchange contracts (at face value amounts in
excess of the LG Facility). At December 31, 2024, the Corporation had outstanding foreign exchange currency
contracts to purchase a total of CDN $17,500,000 (2023 – CDN $31,500,000) at an average rate of 1.36 CDN
per U.S. dollar, resulting in an unrealized gain (loss) of CDN ($685,000) (2023 – CDN $542,000) at
December 31, 2024. The unrealized gain on forward foreign exchange contracts is presented in prepaid
expenses and other current assets in the statement of financial position and the unrealized loss on forward
foreign exchange contracts is presented in trade and other payables.
Subsequent to December 31, 2024, the Corporation entered into a new Loan Agreement enabling the bank to
issue commercial credit cards, standby letters of credit, or similar credits on the Corporation's behalf from time
to time up to a maximum of approximately CDN $13,000,000.
15. Trade and other payables:
December 31,
2024
December 31,
2023
Trade accounts payable
$
12,300
$
13,724
Compensation payable
17,111
19,235
Other liabilities
5,579
5,628
Taxes payable
647
1,109
$
35,637
$
39,696
16. Deferred revenue:
Deferred revenue (i.e. contract liabilities) represents cash received from customers in excess of revenue
recognized on uncompleted contracts.
Deferred revenue
December 31,
2024
December 31,
2023
Beginning Balance
$
4,588
$
8,030
Additions to deferred revenue
17,291
21,790
Revenue recognized during the year
(10,247)
(25,232)
Ending Balance
$
11,632
$
4,588
December 31,
2024
December 31,
2023
Current deferred revenue
$
6,643
$
4,588
Non-current deferred revenue
4,989
—
Ending balance
$
11,632
$
4,588
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
91
17. Provisions:
Restructuring
Warranty
Onerous
Contingent
Legal
Balance
provision
provision
contracts
consideration
provision
Total
At January 1, 2023
$
137 $
11,327 $
4,400 $
2,078 $
2,968 $
20,910
Provisions made during year
1,459
7,210
2,600
—
—
11,269
Provisions used/paid during year
(1,176)
(2,652)
—
(2,000)
(2,968)
(8,796)
Provisions reversed/expired during year
—
(910)
(700)
—
—
(1,610)
Effect of movements in exchange rates
2
22
—
—
—
24
At December 31, 2023
422
14,997
6,300
78
—
21,797
Provisions made during year
14,706
6,364
3,855
—
—
24,925
Provisions used/paid during year
(6,849)
(4,369)
—
(100)
—
(11,318)
Provisions reversed/expired during year
—
(4,182)
(713)
—
—
(4,895)
Effect of movements in exchange rates
(226)
84
18
22
—
(102)
At December 31, 2024
$
8,053 $
12,894 $
9,460 $
— $
— $
30,407
Restructuring provision
During the year ended December 31, 2024, the Corporation incurred $14,706,000 in restructuring expenses
initially in provisions and other current liabilities, related primarily to a global corporate restructuring initiated in
September 2024 consisting of cost reduction measures including a reduction in workforce, a rationalization of
products and product development activities, and a reduction or cancellation of certain capital projects.
Restructuring expenses include personnel severance costs, inventory impairment charges related to product
rationalization, contract exit and modification costs, grant adjustment charges, and legal and advisory costs, net
of any expected recoveries. This provision will be adjusted as actual costs are incurred each quarter.
Restructuring expenses are recognized in other operating expense (note 24). As of December 31, 2024,
restructuring costs totalling $8,053,000 (2023 - $422,000) remain accrued.
Warranty provision
The Corporation recorded warranty provisions of $6,364,000 (2023 - $7,210,000), comprised of $6,304,000
(2023 - $5,916,000) related to new product sales and $60,000 (2023 - $1,294,000) related to upward warranty
adjustments. This was offset by warranty expenditures of $4,369,000 (2023 - $2,652,000) and downward
warranty adjustments of $4,182,000 (2023 - $910,000), due primarily to contractual expirations and changes in
estimated and actual costs to repair. As of December 31, 2024, total warranty provision of $12,894,000 (2023 -
$14,997,000) has been accrued in provisions and other current liabilities.
Onerous Contracts
Upon completion of a review of the Corporation's "open" contracts as of December 31, 2024, total onerous
contract costs of $9,460,000 (2023 - $6,300,000) have been accrued in provisions and other current liabilities.
The Corporation will continue to review open contracts on a quarterly basis to determine if any ongoing or new
contracts become onerous, and if any of the underlying conditions or assumptions change which would require
an adjustment to the accrued provision.
Contingent Consideration
As part of the post-acquisition restructuring of operations at Ballard Motive Solutions in the UK in 2022 (note
26), there was a change in estimate in the fair value of contingent consideration due to changes in expectation
of achieving milestones. The contingent consideration has now been fully paid and thus has a remaining
balance of $nil (2023 - $78,000).
During the year ended December 31, 2024, cash payments of $100,000 (2023 - $2,000,000) were made by the
Corporation upon successful achievement of certain performance milestones.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
92
18. Lease liability:
The Corporation leases certain assets under lease agreements. The lease liability consists primarily of leases of
land and buildings, office equipment and vehicles. The leases have interest rates ranging from 2.95% to 9.42%
per annum and expire between June 2025 and February 2035.
December 31,
2024
December 31,
2023
Property
$
2,805
$
4,368
Equipment
28
38
Vehicle
66
99
Lease Liability, Current
$
2,899
$
4,505
Property
$
20,847
$
13,078
Equipment
2
32
Vehicle
146
283
Lease Liability, Non-current
$
20,995
$
13,393
Lease Liability, Total
$
23,894
$
17,898
During the year ended December 31, 2024, the Corporation made principal payments on its lease liabilities of
$3,327,000 (2023 - $4,013,000). The Corporation is committed to future minimum lease payments (comprising
principal and interest) as follows:
Maturity Analysis
December 31,
2024
Less than one year
$
4,707
Between one and five years
14,793
More than five years
13,713
Total undiscounted lease liabilities
$
33,213
Deferred gains were also recorded on closing of a finance lease agreement and are amortized over the lease
term. At December 31, 2024, the outstanding deferred gain was $69,000 (2023 – $485,000).
19. Other non-current liabilities and employee future benefits:
December 31,
2024
December 31,
2023
Other non-current liabilities
$
2,580
$
2,337
Employee future benefits
98
(475)
Other non-current liabilities and employee future benefits
$
2,678
$
1,862
Non-current liabilities: Decommissioning liabilities
A provision for decommissioning liabilities has been recorded for the Corporation’s head office building in
Burnaby, British Columbia and is related to estimated site restoration obligations at the end of the lease term.
The Corporation has made certain modifications to the leased building to facilitate the manufacturing and testing
of its fuel cell products. Consequently, the site restoration obligations relate primarily to dismantling and
removing various manufacturing and test equipment and restoring the infrastructure of the leased building to its
original state of when the lease was entered into.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
93
19. Other non-current liabilities and employee future benefits:
Non-current liabilities: Decommissioning liabilities (cont'd)
Due to the long-term nature of the liability, the most significant uncertainty in estimating the provision is the
costs that will be incurred. The Corporation has determined a range of reasonably possible outcomes of the
total costs for the head office building. In determining the fair value of the decommissioning liabilities, the
estimated future cash flows have been discounted at 2.96% per annum (2023 – 3.17%).
The Corporation performed an assessment of the estimated cash flows required to settle the obligations for the
building as of December 31, 2024. Based on the assessment, an increase of $373,000 in the provision (2023 -
$449,000) was recorded against decommissioning liabilities, in addition to accretion costs of $58,000 (2023 -
$43,000) and the effect of movements in exchange rates of ($188,000) (2023 - $40,000).
The net discounted amount of estimated cash flows required to settle the obligation for the building as of
December 31, 2024 is $2,580,000 (2023 - $2,337,000) which is expected to be settled at the end of the lease
term which was recently extended for another 10 years to 2035.
Employee future benefits
December 31,
2024
December 31,
2023
Net defined benefit pension plan liability (asset)
$
—
$
(582)
Net other post-retirement benefit plan liability
98
107
Employee future benefits
$
98
$
(475)
The Corporation historically maintained a defined benefit pension plan covering existing and former employees
in the United States. The benefits under the pension plan were based on years of service and salary levels
accrued as of December 31, 2009. In 2009, amendments were made to the defined benefit pension plan to
freeze benefits accruing to employees at their respective years of service and salary levels obtained as of
December 31, 2009.
During the year ended December 31, 2023, the Corporation completed a settlement agreement with an external
party to transfer 100% of its liability for the plan retiree population of the plan. On final settlement, $5,887,000
of the plan assets were distributed to this external party who then assumed the full liability of the retiree group.
During the year ended December 31, 2024, the Corporation effectively terminated and wound-down the defined
benefit pension plan through the settlement of the remaining plan liability. Surplus assets on termination of
$1,489,000 were transferred to the Corporation's defined contribution 401K plan in the U.S.
Certain employees in the United States are also eligible for post-retirement healthcare, life insurance, and other
benefits.
The Corporation accrues the present value of its obligations under employee future benefit plans and related
costs, net of the present value of plan assets.
The following tables reconcile the opening balances to the closing balances for the net defined benefit liability
and its components for the two plans. The expense recognized in statement of loss and comprehensive income
(loss) is recorded in finance income and other (note 25).
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
94
19. Other non-current liabilities and employee future benefits (cont'd):
Employee future benefits (cont'd)
Defined benefit obligation
Fair value of plan assets
Net defined benefit liability
Defined benefit pension plan
2024
2023
2024
2023
2024
2023
Balance at January 1
$
6,703
$
14,402
$
(7,285) $
(14,054) $
(582) $
348
Included in profit or loss
Current service cost
56
26
—
—
56
26
Interest cost (income)
163
700
(215)
(683)
(52)
17
219
726
(215)
(683)
4
43
Included in other comprehensive income (loss)
Remeasurements loss (gain):
Actuarial loss (gain) arising from:
Financial assumptions
—
113
—
—
—
113
Experience adjustment
(918)
(600)
—
—
(918)
(600)
Return on plan assets excluding interest
—
—
7
(486)
7
(486)
income
Plan expenses
(110)
(54)
110
54
—
—
Settlements
(5,887)
(7,326)
5,887
7,326
—
—
(6,915)
(7,867)
6,004
6,894
(911)
(973)
Other
Benefits paid
(7)
(558)
7
558
—
—
Transfer of excess assets
—
—
1,489
—
1,489
—
(7)
(558)
1,496
558
1,489
—
Balance at December 31
$
—
$
6,703
$
—
$
(7,285) $
—
$
(582)
Defined benefit obligation
Fair value of plan assets
Net defined benefit liability
Other post-retirement benefit plan
2024
2023
2024
2023
2024
2023
Balance at January 1
$
107
$
107
$
—
$
—
$
107
$
107
Included in profit or loss
Interest cost
4
5
—
—
4
5
4
5
—
—
4
5
Included in other comprehensive income (loss)
Remeasurements loss (gain):
Actuarial loss (gain) arising from:
Financial assumptions
(4)
1
—
—
(4)
1
Experience adjustment
2
2
—
—
2
2
(2)
3
—
—
(2)
3
Other
Contributions paid by the employer
—
—
(8)
(8)
(8)
(8)
Benefits paid
(11)
(8)
8
8
(3)
—
(11)
(8)
—
—
(11)
(8)
Balance at December 31
$
98
$
107
$
—
$
—
$
98
$
107
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
95
19. Other non-current liabilities and employee future benefits (cont'd):
Employee future benefits (cont'd):
Included in other comprehensive income (loss)
December 31,
2024
December 31,
2023
Defined benefit pension plan actuarial gain
$
911
$
973
Other post-retirement benefit plan actuarial gain (loss)
2
(3)
$
913
$
970
Pension plan assets comprise:
2024
2023
Cash and cash equivalents
— %
100 %
Equity securities
— %
— %
Debt securities
— %
— %
Total
— %
100 %
The significant actuarial assumptions adopted in measuring the fair value of benefit obligations at December
31 were as follows:
2024
2023
Pension plan
Other benefit
plan
Pension plan
Other benefit
plan
Discount rate
n/a
5.32 %
4.88 %
4.67 %
Rate of compensation increase
n/a
n/a
n/a
n/a
The significant actuarial assumptions adopted in determining net expense for the years ended December 31
were as follows:
2024
2023
Pension plan
Other benefit
plan
Pension plan
Other benefit
plan
Discount rate
n/a
5.32 %
5.00 %
4.67 %
Rate of compensation increase
n/a
n/a
n/a
n/a
Impacts of assumed health care cost trend rates applicable to the other post-retirement benefit plan at
December 31, 2024 including a one-percentage-point change in assumed health care cost trend rates would
not have a material impact on the Corporation’s financial statements.
20. Equity:
Share-based compensation
December 31,
2024
December 31,
2023
Option Expense
$
896
$
3,035
DSU Expense
511
397
RSU Expense
6,049
7,288
Total share-based compensation for continuing operations (per statement of loss)
$
7,456
$
10,720
Discontinued operations
—
239
Total share-based compensation (per statement of equity)
$
7,456
$
10,959
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
96
20. Equity (cont'd):
(a) Share capital:
During the year ended December 31, 2023, the Corporation issued the second and final third tranches of
224,902 common shares valued at $3,068,000 as required for a prior year acquisition, offset by miscellaneous
deferred financing costs of $15,000.
At December 31, 2024, 299,438,116 ( 2023 - 298,935,706) common shares were issued and outstanding.
(b) Share options:
The Corporation has options outstanding under a consolidated share option plan. All directors, officers and
employees of the Corporation, and its subsidiaries, are eligible to participate in the share option plans although
as a matter of policy, options are currently not issued to directors. Option exercise prices are denominated in
either Canadian or U.S. dollars, depending on the residency of the recipient. Canadian dollar denominated
options have been converted to U.S. dollars using the year-end exchange rate for presentation purposes.
All options have a term of seven years from the date of grant unless otherwise determined by the board of
directors. One-third of the options vest and may be exercised, at the beginning of each of the second, third, and
fourth years after granting.
As at December 31, options outstanding from the consolidated share option plan were as follows:
Balance
Options for
common shares
Weighted average
exercise price
At January 1, 2023
4,807,620
$
9.19
Options exercised
(152,120)
2.25
Options forfeited
(263,253)
10.39
Options expired
(2,025)
1.36
At December 31, 2023
4,390,222
8.65
Options exercised
(154,509)
1.89
Options forfeited
(152,282)
8.73
Options expired
(320,411)
9.50
At December 31, 2024
3,763,020
$
8.85
The following table summarizes information about the Corporation’s share options outstanding as at
December 31, 2024:
Options outstanding
Options exercisable
Number
Weighted
average
remaining
contractual life
Weighted
average
exercise
Number
Weighted
average
Range of exercise price
outstanding
(years)
price
exercisable
exercise price
$1.86 - $3.06
812,156
1.0
$
2.77
812,156
$
2.77
$3.35 - $5.17
392,397
0.8
3.65
386,186
3.62
$6.51 - $10.64
1,782,164
3.1
9.41
1,532,083
9.52
$11.88 - $26.13
776,303
3.0
16.55
776,303
16.55
3,763,020
2.4
$
8.85
3,506,728
$
8.86
During 2024, compensation expense of $896,000 (2023 – $3,035,000) was recorded in net loss based on the
grant date fair value of the awards recognized over the vesting period.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
97
20. Equity (cont'd):
(b) Share options (cont'd):
During 2024, 154,509 (2023 - 152,120) options were exercised for an equal amount of common shares for
proceeds of $308,000 (2023 -$335,000).
As at December 31, 2024, options to purchase 3,763,020 common shares were outstanding (2023 –
4,390,222).
(c) Share distribution plan:
The Corporation has a consolidated share distribution plan that permits the issuance of common shares for no
cash consideration to employees of the Corporation to recognize their past contribution and to encourage future
contribution to the Corporation. At December 31, 2024, there were 8,621,503 (2023 – 17,140,498) shares
available to be issued under this plan.
During 2023 and 2024, no shares were issued under this plan and therefore no compensation expense was
recorded against profit or loss.
(d) Deferred share units:
Deferred share units (“DSUs”) are granted to the board of directors and executives. Eligible directors must elect
to receive at least half of their annual retainers and executives may elect to receive all or part of their annual
bonuses in DSUs. Each DSU is redeemable for one common share in the capital of the Corporation after the
director or executive ceases to provide services to the Corporation. Shares will be issued from the Corporation’s
share distribution plan.
Balance
DSUs for common shares
At January 1, 2023
709,680
DSUs granted
93,188
DSUs exercised
(65,499)
At December 31, 2023
737,369
DSUs granted
252,299
DSUs exercised
—
At December 31, 2024
989,668
During 2024, compensation expense of $511,000 (2023 - $397,000) was recorded in net loss relating to
252,299 DSUs (2023 - 93,188) granted during the year.
During 2024, nil DSUs (2023 – 65,499) were exercised, net of applicable taxes, which resulted in the issuance
of nil common shares (2023 – 31,736), resulting in an impact on equity of $nil (2023 - $171,000).
As at December 31, 2024, 989,668 DSUs were outstanding (2023 – 737,369).
(e) Restricted share units:
Restricted share units (“RSUs”) are granted to certain employees and executives. Each RSU is convertible into
one common share, net of statutory tax withholdings. The RSUs vest after a specified number of years from the
date of issuance, and under certain circumstances, are contingent on achieving specified performance criteria
and/or market criteria. A performance factor adjustment is made if there is an over-achievement (or under-
achievement) of specified performance criteria, resulting in additional (or fewer) RSUs being converted. Certain
RSUs granted in 2023 and 2024 include an additional market criteria with weighted vesting over three years.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
98
20. Equity (cont'd):
(e) Restricted share units (cont'd):
The Corporation has two plans under which RSUs may be granted, the consolidated share distribution plan and
the market purchase RSU plan. Awards under the consolidated share distribution plan are satisfied by the
issuance of treasury shares on maturity.
Balance
RSUs for common shares
At January 1, 2023
1,002,080
RSUs granted
2,996,387
RSUs exercised
(279,668)
RSUs forfeited
(577,353)
At December 31, 2023
3,141,446
RSUs granted
3,151,939
RSUs exercised
(642,850)
RSUs forfeited
(1,058,440)
At December 31, 2024
4,592,095
During 2024, compensation expense of $6,049,000 (2023 - $7,288,000) was recorded in net loss.
During 2024, 3,151,939 (2023 – 2,996,387) RSUs were issued. The fair value of RSU grants is measured
based on the stock price of the shares underlying the RSU on the date of grant or by using a complex
simulation model, depending on the type of RSU.
During 2024, 642,850 RSUs (2023 – 279,668) were exercised, net of applicable taxes, which resulted in the
issuance of 347,901 common shares (2023 – 132,745), resulting in an impact on equity of $855,000 (2023 -
$585,000).
As at December 31, 2024, 4,592,095 RSUs were outstanding (2023 – 3,141,446).
21. Commitments and contingencies:
As at December 31, 2024, the Corporation is committed to minimum lease payments (note 18).
Long-term financial investments include two investments committing the Corporation to be a limited partner in
hydrogen infrastructure and growth equity funds (note 13). The Corporation has committed to investing
£25,000,000 (including £15,754,000 invested as of December 31, 2024) into HyCap. The Corporation has
committed to investing €30,000,000 (including €9,663,000 invested as of December 31, 2024) into Clean H2.
Long-term financial investments also include an investment committing the Corporation to be a limited partner in
Templewater, a decarbonizaton and climate technology and growth equity fund. The Corporation has
committed to investing $1,000,000 (including $527,000 invested as of December 31, 2024) into Templewater.
As at December 31, 2024, the Corporation has outstanding commitments aggregating up to a maximum of
$14,512,000 relating primarily to purchases of property, plant and equipment.
As at December 31, 2024, the Corporation has has outstanding commitments totalling $9,441,000 over the next
5 years related to a hydrogen supply agreement.
In connection with the acquisition of intellectual property from UTC in April 2014, the Corporation retains a
royalty obligation in certain circumstances to pay UTC a portion of any future intellectual property sale and
licensing income generated from certain of the Corporation's intellectual property portfolio for a period of 15
years expiring in April 2029. No royalties were paid to UTC in the years ended December 31, 2024 and
December 31, 2023.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
99
21. Commitments and contingencies (cont'd):
The Corporation retains a previous funding obligation to pay royalties of 2% of revenues, to a maximum of
$4,613,000 (CDN $5,351,000), on sales of certain fuel cell products for commercial distributed utility
applications. As of December 31, 2024, no royalties have been incurred to date for this agreement.
The Corporation also retains a previous funding obligation to pay royalties of 2% of revenues, to a maximum of
$1,896,000 (CDN $2,200,000), on sales of certain fuel cell products for commercial transit applications. As of
December 31, 2024, no royalties have been incurred to date for this agreement.
In the ordinary course of business or as required by certain acquisition or disposition agreements, the
Corporation is periodically required to provide certain indemnities to other parties. As of December 31, 2024, the
Corporation has not accrued any significant amount owing, or receivable, due to any indemnity agreements
undertaken in the ordinary course of business.
22. Disaggregation of revenue:
The Corporation's operations and main revenue streams are the same as those described in note 4. Revenues
from the delivery of services, including technology solutions, after sales services and training, are included in
each of the respective markets. The Corporation's revenue is derived from contracts with customers.
In the following table, revenue is disaggregated by geographical market, by market application, and by timing of
revenue recognition.
December 31,
December 31,
2024
2023
Geographical markets
Europe
$
47,153 $
48,958
North America
17,997
37,736
China
2,631
11,980
Rest of World
1,950
3,694
$
69,731 $
102,368
Application
Bus
$
44,163 $
29,265
Truck
3,714
10,961
Rail
2,647
19,100
Marine
2,866
7,331
HD Mobility subtotal
53,390
66,657
Stationary
12,757
21,707
Emerging Markets and Other
3,584
14,004
$
69,731 $
102,368
Timing of revenue recognition
Products transferred at a point in time
$
59,734 $
78,769
Products and services transferred over time
9,997
23,599
$
69,731 $
102,368
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
100
23. Personnel expenses:
Personnel expenses are included in cost of product and service revenues, research and product development
expense, general and administrative expense, sales and marketing expense, and other expense.
December 31,
2024
December 31,
2023
Salaries and employee benefits
$
112,563
$
103,868
Share-based compensation (note 20)
7,456
10,720
$
120,019
$
114,588
24. Other operating expense:
December 31,
2024
December 31,
2023
Net impairment loss on trade receivables
$
12,760
$
1,498
Restructuring and related costs
17,046
1,512
Acquisition related costs
—
773
$
29,806
$
3,783
Net Impairment loss on trade receivables
During the year ended December 31, 2024, the Corporation recorded a net impairment loss on trade
receivables of $12,760,000 (2023 - $1,498,000), consisting primarily of various receivables from certain
customers in China no longer deemed collectible. In the event that the Corporation recovers any amounts
previously recorded as impairment losses, the recovered amount will be recognized as a reversal of the
impairment loss in the period of recovery.
Restructuring and related costs
During the year ended December 31, 2024, total restructuring and related charges of $17,046,000 consist of
$14,706,000 initially in provisions and other current liabilities and $2,340,000 initially in prepaid expenses.
These charges relate primarily to a global corporate restructuring initiated in September 2024 consisting of cost
reduction measures including a reduction in workforce, a rationalization of products and product development
activities, and a reduction or cancellation of certain capital projects. Restructuring expenses include personnel
severance costs, inventory impairment charges related to product rationalization, contract exit and modification
costs, grant adjustment charges, and legal and advisory costs, net of any expected recoveries.
During the year ended December 31, 2023, total restructuring and related charges of $1,512,000 consist
primarily of certain cost cutting measures and related personnel change costs.
Acquisition related costs
Acquisition related costs of $773,000 for the year ended December 31, 2023 consist primarily of legal, advisory,
and transaction related costs incurred due to corporate development activities.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
101
25. Finance income and expense:
2024
2023
Employee future benefit plan expense
$
(20) $
(109)
Investment income
36,885
43,340
Mark to market and foreign exchange loss on financial assets (notes 13 & 31)
(14,788)
(12,897)
Foreign exchange gain (loss)
(3,144)
821
Government levies
—
(100)
Finance income and other
$
18,933
$
31,055
Finance expense
$
(2,146) $
(1,105)
26. Discontinued operations:
On November 11, 2021, the Corporation acquired Ballard Motive Solutions (formerly Arcola Energy Limited), a
UK-based systems engineering company specializing in hydrogen fuel cell systems and powertrain integration.
Subsequent to the acquisition, the Corporation re-evaluated the business model of Ballard Motive Solutions and
during the year ended December 31, 2022, the Corporation decided to exit the vehicle integration business of
Ballard Motive Solutions and made certain restructuring changes to its operations.
During the year ended December 31, 2023, the Corporation completed a restructuring of operations at Ballard
Motive Solutions and effectively closed the operation. As such, the historic operating results of the Ballard
Motive Solutions business for 2023 have been removed from continuing operating results and are instead
presented separately in the consolidated statements of loss and comprehensive income (loss) as loss from
discontinued operations.
Net loss from discontinued operations for the years ended December 31, 2024 and 2023 is comprised of the
following:
2024
2023
Product and service revenues
$
— $
934
Cost of product and service revenues
—
607
Gross margin
—
327
Total operating expense
(720)
(7,913)
Finance income and other
—
337
Finance expense
5
—
Impairment charges on intangible assets
—
(2,266)
Impairment charges on goodwill
—
(23,991)
Net loss from discontinued operations
$
(715) $
(33,506)
During the year ended December 31, 2024, net loss from discontinued operations of $715,000 includes net
impairment loss on trade receivables of $444,000 (2023 - $nil) consisting primarily of receivables no longer
deemed collectible.
During the year ended December 31, 2023, net loss from discontinued operations includes impairment charges
on intangible assets of $2,266,000 and impairment charges on goodwill of $23,991,000 consisting of the write-
down of acquired goodwill and technology intangible assets to their estimated fair value of as a result of the
restructuring and effective closure of operations of Ballard Motive Solutions in the U.K.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
102
26. Discontinued operations (cont'd):
Net cash flows from discontinued operations for the years ended December 31, 2024 and 2023 is as follows:
2024
2023
Cash used in operating activities
$
(593) $
(3,601)
Cash provided by investing activities
—
47
Cash used in financing activities
—
(234)
Cash used in discontinued operations
$
(593) $
(3,788)
27. Income taxes:
(a) Current tax expense:
The components of income tax benefit (expense) included in the determination of the profit (loss) from
continuing operations comprise of:
2024
2023
Current tax expense
Current period income tax
$
121
$
64
Withholding tax
—
94
Total current tax expense
$
121
$
158
Deferred tax expense
Origination and reversal of temporary differences
$
(14,279) $
(45,050)
Adjustments for prior periods
1,648
2,174
Change in unrecognized deductible temporary differences
12,631
42,876
Total deferred tax expense
$
—
$
—
Total income tax expense from continuing operations
$
121
$
158
The Corporation’s effective income tax rate differs from the combined Canadian federal and provincial statutory
income tax rate for companies. The principal factors causing the difference are as follows:
2024
2023
Net loss before income taxes (from continuing operations)
$
(323,409) $
(144,052)
Expected tax recovery at 27.00% (2023 – 27.00%)
$
(87,320) $
(38,894)
Increase (reduction) in income taxes resulting from:
Non-deductible expenses (non-taxable income)
53,847
(993)
Expiry of losses and ITC
310
96
Investment tax credits earned
(4,703)
(4,009)
Foreign tax rate and tax rate differences
3,415
4,165
Change in unrecognized deductible temporary differences
34,514
39,674
Other
58
119
Income taxes from continuing operations
$
121
$
158
(b) Unrecognized deferred tax asset:
At December 31, 2024, the Corporation did not recognize any deferred tax assets resulting from the following
deductible temporary differences for financial statement and income tax purposes.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
103
27. Income taxes (cont'd):
(b) Unrecognized deferred tax asset (cont'd):
2024
2023
Scientific research expenditures
$
148,077
$
143,663
Investments
43,891
36,315
Share issuance costs
4,633
14,145
Losses from operations carried forward
440,572
394,599
Capital losses carried forward
4,843
10,703
Investment tax credits
48,277
46,810
Property, plant and equipment and intangible assets
226,425
221,365
$
916,718
$
867,600
Deferred tax assets have not been recognized in respect of these deductible temporary differences because it is
not currently probable that future taxable profit will be available against which the Corporation can utilize the
benefits.
The Corporation has available to carry forward the following as at December 31:
2024
2023
Canadian scientific research expenditures
$
148,077
$
143,663
Canadian losses from operations
288,258
262,887
Canadian capital losses from operations
9,827
12,958
Canadian investment tax credits
48,277
46,810
German losses from operations for corporate tax purposes
—
46
US federal losses from operations
42,949
46,784
Denmark losses from operations
81,130
65,786
Hong Kong losses from operations
128
116
UK losses from operations
20,440
13,085
UK research and development tax credits
120
122
The Canadian scientific research expenditures may be carried forward indefinitely. The Canadian losses from
operations may be used to offset future Canadian taxable income and expire over the period from 2034 to 2044.
The German, Hong Kong, Denmark and UK losses from operations may be used to offset future taxable income
in Germany, Hong Kong, Denmark and UK for corporate tax and trade tax purposes and may be carried forward
indefinitely.
The US federal losses from operations incurred prior to January 1, 2018 may be used to offset future US
taxable income and expire over the period from 2024 to 2038 and may be carried forward indefinitely for losses
incurred after January 1, 2018.
The Canadian investment tax credits may be used to offset future Canadian income taxes otherwise payable
and expire over the period from 2024 to 2044. The UK scientific research and development tax credits may be
carried forward indefinitely.
28. Related party transactions:
Related parties include shareholders with a significant ownership interest in the Corporation, including its
subsidiaries and affiliates, and the Corporation’s equity accounted investee, Weichai Ballard JV (note 12).
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
104
28. Related party transactions (cont'd):
For the year ended December 31, 2024 and 2023, related party transactions and balances with the
Corporation's 49% owned equity accounted investee, Weichai Ballard JV, were as follows:
Balances with related party - Weichai Ballard JV
2024
2023
Trade and other receivables
$
3,447
$
13,697
Investments
8,238
13,901
Deferred revenue
1,831
1,904
Transactions during the year with related party - Weichai Ballard JV
2024
2023
Revenues
$
2,480
$
8,099
Cost of goods sold and operating expense
1,819
1,996
Corporation Directors and Executive Officers
The Corporation provides key management personnel, being board directors and executive officers, certain
benefits, in addition to their salaries. Key management personnel also participate in the Corporation’s share-
based compensation plans (note 20).
In addition to cash and equity compensation, the Corporation provides the executive officers with certain
personal benefits, including car allowance, medical benefit program, long and short-term disability coverage, life
insurance and an annual medical, financial planning allowance and relocation allowances and services as
necessary.
The employment agreements for the executive officers are substantially the same with slight variations by
individual. The maximum obligation that is required to be provided in the event of termination is notice of 12
months plus one month for every year of employment completed with the Corporation (to a maximum of 24
months), or payment in lieu of such notice, consisting of the salary, bonus and other benefits that would have
been earned during such notice period. If there is a change of control, and if the executive officer’s employment
is terminated, including a constructive dismissal, within 2 years following the date of a change of control, the
executive officer is entitled to a payment equivalent to payment in lieu of a 24 month notice period. The
minimum obligation that is required is limited to that required by employment standards legislation plus one day
for every full month of employment since hire date, with no distinction made for a change of control situation.
Key management personnel compensation is comprised of:
2024
2023
Salaries and employee benefits
$
4,587
$
3,817
Post-employment retirement benefits
102
65
Termination benefits
1,039
—
Share-based compensation (note 20)
1,557
2,622
$
7,285
$
6,504
29. Supplemental disclosure of cash flow information:
Non-cash financing and investing activities:
2024
2023
Compensatory shares
$
2,505
$
1,688
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
105
30. Operating segments:
The Corporation operates in a single operating segment, Fuel Cell Products and Services, which consists of the
design, development, manufacture, sale and service of PEM fuel cell products for a variety of applications,
focusing on power products for bus, truck, rail, marine, stationary and emerging market (material handling, off-
road and other) applications, as well as the delivery of services, including technology solutions, after sales
services and training.
In 2024, revenues included sales to two individual customers of $20,176,000 and $10,451,000, respectively,
which exceeded 10% of total revenue. In 2023, revenues included sales to one individual customer of
$10,882,000 which exceeded 10% of total revenue.
Revenues from continuing operations by geographic area, which are attributed to countries based on customer
location for the years ended December 31, are as follows:
Revenues
2024
2023
Poland
$
21,655
$
11,262
United States
14,995
25,702
United Kingdom
12,774
8,178
Germany
4,184
14,490
France
4,023
3,307
Canada
3,002
12,034
China
2,631
11,980
Denmark
2,157
2,240
Taiwan
727
1,381
Netherlands
668
4,812
Belgium
634
2,089
Korea
357
109
Norway
267
779
Spain
260
857
Japan
180
76
India
92
2,034
Australia
11
51
Other countries
1,114
987
$
69,731
$
102,368
Non-current assets by geographic area are as follows:
December 31,
December 31,
Non-current assets
2024
2023
Canada
$
63,883
$
186,109
China
8,249
13,916
United States
4,322
8,600
Denmark
1,975
4,176
$
78,429
$
212,801
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
106
31. Financial instruments:
(a) Fair value:
The Corporation’s financial instruments consist of cash and cash equivalents, short-term investments, trade and
other receivables, long-term financial investments, and trade and other payables. The fair values of cash and
cash equivalents, trade and other receivables, and trade and other payables approximate their carrying values
because of the short-term nature of these instruments.
Long-term financial investments (note 13) comprise investment in hydrogen infrastructure and growth equity
funds: HyCap Fund and Clean H2 Fund, investment in a decarbonization and climate technology fund:
Templewater, and an investment in Forsee Power, Wisdom Motor, and Quantron AG. Changes in fair value and
foreign exchange adjustments are recognized as gains or losses in the consolidated statements of loss and
comprehensive income (loss) and included in finance income and other (note 25). During the year ended
December 31, 2024, the Corporation recognized net mark to market and foreign exchange losses of
$14,788,000 (2023 - $12,897,000).
Increase (decrease) in fair value due to MTM and foreign exchange
December 31,
2024
December 31,
2023
Long-term investment - Forsee Power
$
(12,699) $
(3,501)
Long-term investment - Wisdom Motor
(2,200)
(4,900)
Long-term investment - Quantron AG
(4,401)
(4,237)
Long-term investment - HyCap Fund
5,084
214
Long-term investment - Clean H2 Fund
(360)
(473)
Long-term investment - Templewater Fund
(212)
—
Decrease in fair value of investments
$
(14,788) $
(12,897)
Fair value measurements recognized in the statement of financial position must be categorized in accordance
with the following levels:
(i)
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
(ii)
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices);
(iii) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The Corporation's above-mentioned investment in Forsee Power is categorized as Level 1 whereas the other
investments are all categorized as Level 3.
(b) Financial risk management:
The Corporation primarily has exposure to foreign currency exchange rate risk, commodity risk, interest rate
risk, and credit risk.
Foreign currency exchange rate risk
Foreign currency exchange rate risk is the risk that the fair value of deferred cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates. The Corporation is exposed to currency risks
primarily due to its holdings of Canadian dollar denominated cash equivalents and its Canadian dollar
denominated purchases and accounts payable. Substantially all receivables are denominated in U.S. dollars.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
107
31. Financial instruments (cont'd):
(b) Financial risk management (cont'd):
Foreign currency exchange rate risk (cont'd)
Periodically, the Corporation uses foreign exchange currency contracts to manage exposure to currency rate
fluctuations. These contracts are recorded at their fair value as either assets or liabilities in the statement of
financial position. Any changes in fair value are either (i) recorded in the statements of loss and comprehensive
income (loss) if formally designated and qualified under hedge accounting criteria; or (ii) recorded in the
statements of loss and comprehensive income (loss) if either not designated, or not qualified, under hedge
accounting criteria. The outstanding foreign exchange currency contracts are not qualified under hedge
accounting.
The Corporation limits its exposure to foreign currency risk by holding Canadian denominated cash and cash
equivalents in amounts up to 100% of forecasted twelve month Canadian dollar net expenditures and up to 50%
of the following twelve months of forecasted Canadian dollar net expenditures, thereby creating an economic
hedge. Periodically, the Corporation also enters into forward foreign exchange contracts to further limit its
exposure. At December 31, 2024, the Corporation held Canadian dollar denominated cash and cash
equivalents of CDN $68,322,000 and outstanding forward foreign exchange contracts to buy a total of CDN
$17,500,000 in 2024 at an average rate of CDN $1.36 to US $1.00.
The following exchange rates applied during the year ended December 31, 2024:
$US to $1.00 CDN
$CDN to $1.00 US
January 1, 2024 Opening rate
$0.755
$1.325
December 31, 2024 Closing rate
$0.695
$1.439
Fiscal 2024 Average rate
$0.730
$1.370
Based on cash and cash equivalents and forward foreign exchange contracts held at December 31, 2024, a
10% increase in the Canadian dollar against the U.S. dollar, with all other variables held constant, would result
in an increase in foreign exchange gains of approximately $6,938,000 recorded against profit or loss. If the
Canadian dollar weakened 10% against the US dollar, there would be an equal, and opposite impact, on profit
or loss. This sensitivity analysis includes foreign currency denominated monetary items, and adjusts their
translation at year-end, for a 10% change in foreign currency rates.
Commodity risk
Commodity risk is the risk of financial loss due to fluctuations in commodity prices, in particular, for the price of
platinum and palladium, which are key components of the Corporation’s fuel cell products. Platinum and
palladium are scarce natural resources and therefore the Corporation is dependent upon a sufficient supply of
these commodities. To manage its exposure to commodity price fluctuations, the Corporation may include
platinum and or palladium pricing adjustments directly into certain significant customer contracts.
Interest rate risk
Interest rate risk is the risk that the fair value of deferred cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Corporation is exposed to interest rate risk arising primarily
from fluctuations in interest rates on its cash and cash equivalents. The Corporation limits its exposure to
interest rate risk by continually monitoring and adjusting portfolio duration to align to forecasted cash
requirements and anticipated changes in interest rates.
Based on cash and cash equivalents at December 31, 2024, a 1.0% decline in interest rates, with all other
variables held constant, would result in a decrease in investment income of $6,044,000. If interest rates had
been 1.0% higher, there would be an equal and opposite impact on investment income.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
108
31. Financial instruments (cont'd):
(b) Financial risk management (cont'd):
Foreign currency exchange rate risk (cont'd)
Credit risk
Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Corporation’s receivables from
customers.
IFRS 9 Financial Instruments requires impairment losses to be recognized based on “expected losses” that will
occur in the future, incorporating forward looking information relating to defaults and applies a single ECL
impairment model that applies to all financial assets within scope. ECLs are a probability-weighted estimate of
credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between
the cash flows due to the Corporation in accordance with the contract and the cash flows that the Corporation
expects to receive). Under IFRS 9, at each reporting date the Corporation is required to assess whether
financial assets carried at amortized cost are credit-impaired.
As a result of this review for the year ended December 31, 2024, the Corporation did not recognize any
additional estimated ECL impairment losses, excluding specific impairment losses (note 24). At December 31,
2024, the total amount accrued was $500,000.
BALLARD POWER SYSTEMS INC.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, and 2023
(Tabular amounts expressed in thousands of U.S. dollars, except per share amounts and numbers of shares)
109
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