Hyliion Reports Q3 2026 Results as KARNO Development Advances
Hyliion Holdings Corp. (NYSE American: HYLN), a developer of modular power plant technology, reported financial results for the third quarter ended September 30, 2026, and provided updates on its KARNO Power Module platform. The company cited higher-than-expected revenue, military contract opportunities and progress toward customer deployments as key developments supporting its outlook.
Hyliion generated third-quarter revenue of $7.5 million and raised its 2026 revenue guidance to approximately $18 million from $15 million. It ended September with $121.4 million in cash and investments and maintained its forecast for year-end cash and investments of $115 million to $120 million.
As of September 30, the company had $45.5 million in remaining authorized funding under existing military contracts, excluding approximately $8 million in additional awards anticipated before year-end. Those awards would bring new military contract awards for 2026 to approximately $50 million.
Founder and Chief Executive Officer Thomas Healy said revenue exceeded expectations and the company continued to make progress in system performance and customer deployments. Hyliion delivered another KARNO system to the U.S. Navy and began moving equipment to its first commercial customer site, where deployment is expected to be completed in the coming weeks. He said demand is growing across commercial and military markets, while the company is increasing manufacturing throughput and building capacity for higher production volumes in 2027.
KARNO Development and Customer Deliveries
During the third quarter, Hyliion delivered another early adopter KARNO Power Module to the U.S. Navy. The system is undergoing extended operation on diesel fuel to further validate durability. Equipment has also begun moving to the company’s first commercial customer site, with deployment expected to be completed in the coming weeks.
Additional early adopter units are in assembly, including a second commercial customer system and units supporting the Navy’s USX-1 Defiant autonomous vessel. Hyliion now expects to complete the vessel’s 800-kilowatt system in early 2027, consistent with the Navy’s schedule for integration ahead of sea trials.
The company expects to complete deliveries of its remaining early adopter units by its fourth-quarter earnings release in February 2027. The revised timing partly reflects a component redesign intended to address thermal fatigue identified during extended system operation.
KARNO development is focused on system reliability, manufacturing quality and power output. Extended operation is generating data used to refine components, software controls and manufacturing processes. Hyliion said successive builds are also improving production quality and consistency, supporting preparations for broader customer deployments.
Hyliion remains on track to achieve its year-end target of 200 kilowatts of 800-volt direct-current power from the KARNO Core. It is incorporating improvements to the density of the regenerator’s internal mesh into newly printed components. The regenerator retains heat within the system, and the company expects the enhancements to help achieve the targeted output.
Military Contract Activity
Hyliion expects additional military contract awards before the end of 2026. Following the $41.7 million U.S. Navy contract announced in July, the company is in final negotiations for two further awards: an anticipated $1 million Navy contract to evaluate KARNO technology for a new application and an approximately $7 million contract with another military branch.
If secured, the awards would bring new military contract awards for 2026 to approximately $50 million, the high end of Hyliion’s original $40 million to $50 million objective. During the third quarter, the company also received confirmation of approximately $3 million in additional funding under its existing Navy contract to develop the 800-kilowatt KARNO Power Module for the USX-1 Defiant.
Hyliion expects most work covered by the $45.5 million in remaining authorized funding under existing military contracts to be performed over the next two years, providing visibility into future revenue. It is also pursuing additional funding through the defense appropriations process and sees potential for future production-system deliveries as KARNO technology is validated in military applications.
Commercial Markets and Manufacturing
Customer interest in KARNO Power Modules is increasing across data centers, military, commercial and industrial markets. Hyliion said data center operators are interested in the system’s potential to address local power-generation concerns and environmental considerations. Its native 800-volt DC architecture may also align with emerging power requirements for artificial intelligence infrastructure.
Hyliion is discussing manufacturing investments and production capacity needed for larger deployments. The company believes approximately $1.5 million in manufacturing equipment could ultimately support one megawatt of annual production capacity. At current expected pricing, that capacity could represent approximately $2.5 million to $3 million in annual revenue.
Beyond data centers, Hyliion sees opportunities in military, commercial and industrial applications where customers are seeking alternatives to traditional grid power. The company is advancing additive manufacturing improvements that could increase printer speeds by up to three times and is consolidating additive manufacturing operations in Texas to support production throughput.
The third-quarter update highlighted progress in revenue, military contracting, customer deployments and manufacturing. Hyliion’s priorities include completing early adopter installations, advancing the KARNO Core toward its 200-kilowatt target, addressing issues identified during extended operation and preparing production capacity for expected demand. The company’s outlook remains dependent on execution, contract awards and customer deployment schedules, through planned customer and military deployments.
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