Nel ASA: Hydrogen Orders Are Pouring In — So Why Is the Cash Pile Shrinking?

The Norwegian electrolyser maker Nel ASA is living a contradiction. Its order intake just exploded by 224 percent, its newest technology platform is commercially live, and yet the second-quarter numbers released in mid-July tell a story of widening losses, a legal settlement hangover, and a balance sheet that keeps getting thinner.

Revenue for the quarter came in at 182 million Norwegian kroner, down from 215 million a year earlier, while the net loss stretched to 189 million kroner versus 131 million in the same period of 2025. The culprit, at least in part, was a one-off payment tied to the settlement of a legal dispute with Iwatani Corporation of America — a 70 million kroner charge that helped push the operating loss to 205 million kroner. The agreement, reached in early June, drew a line under the litigation but left a visible dent in the income statement.

The Order Book Tells a Different Story

Strip out the settlement, and the underlying picture brightens considerably. New orders hit 230 million kroner in the quarter, more than tripling the 71 million kroner booked a year earlier, with PEM electrolyser equipment accounting for 96 percent of the intake. The order backlog stood at 1.213 billion kroner at quarter-end — down 3 percent year on year but up 9 percent sequentially.

The gap between that swelling pipeline and the actual revenue line is the crux for investors. CEO Håkon Volldal framed the quarter as one of encouraging commercial momentum, pointing to two significant purchase orders and the commercial launch of the pressurized alkaline PA-Series platform. But the market has yet to be convinced: the shares closed Thursday at €0.1962, some 46 percent below their 52-week high of €0.3655, with a monthly decline of 5.45 percent.

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Wall Street Cuts Its Ambitions

The skepticism is reflected on the sell side. JPMorgan analyst Patrick Jones trimmed his price target on the stock to 1.80 kroner from 2.90 kroner on Wednesday, keeping a “Hold” rating. The rationale: persistent pressure on near-term business performance even as order momentum improves. An automated analysis service did upgrade the stock from “Sell” to “Hold/Accumulate,” though such technical signals carry limited weight against the fundamental headwinds.

Those headwinds extend beyond Nel’s own numbers. BP’s announcement on Monday that it is scaling back its hydrogen ambitions sent a chill through the sector, with Nel shares dropping 6.03 percent that day to 2.18 kroner, erasing the prior session’s 9.02 percent gain. The broader industry backdrop, in other words, remains uncertain even as individual companies report strong demand.

Should investors sell immediately? Or is it worth buying Nel ASA?

Cash, Leadership, and the Road Ahead

Liquidity is another source of investor unease. Nel ended the quarter with 1.328 billion kroner in cash, down from 1.928 billion a year earlier. CFO Kjell Christian Bjørnsen sought to reassure on the earnings call, insisting the company has a solid cash position and feels no urgency to raise capital — while conceding that Nel would take action if needed to maintain its financial footing.

Adding to the transitionary feel is the leadership situation. Volldal announced in June he would step down as president and CEO to join packaging group Elopak, remaining at the helm through a six-month notice period. That leaves Nel navigating a pivotal commercial phase without a permanent chief executive locked in.

A Platform Bet That Needs to Deliver

The strategic answer to Nel’s margin and cost challenges is the PA-Series platform, which received its final investment decision in May for production at Herøya in Norway, backed by EU Innovation Fund support. The company is targeting a 40 to 60 percent reduction in system capital costs and plans to reach 500 megawatts of production capacity by the end of 2026. Third-party partnerships are central to the rollout: Samsung E&A has completed a 100-megawatt design package for Nel’s pressurized alkaline technology, branded “Compass H2-A+,” enabling turnkey plant delivery with long-term service agreements, while Italy’s Saipem offers its “IVHY 100” solution based on Nel’s atmospheric alkaline technology for projects ranging from 20 to over 100 megawatts.

Segment performance was mixed: PEM electrolyser revenue rose 31 percent sequentially to 97 million kroner but remained 10 percent below the prior-year level, while alkaline electrolyser sales fell 14 percent year on year with EBITDA roughly flat. The Reliance Industries project in India continues to advance, with key suppliers under contract and construction expected to begin in 2026.

Volldal also used the earnings call to push for faster regulatory progress in Europe, urging member states to transpose the EU renewable energy directive into national law — Germany, he noted, has partially done so on the transport side.

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The next test comes on October 21, when Nel reports third-quarter results. By then, investors will want to see whether the order boom is finally translating into revenue — and whether the balance sheet can hold up until it does.