Loop Energy Inc

TSX:LPEN

Earnings Call Transcript 2022-Q3

[Operator]

Good morning. My name is Chantel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Loop Energy's Q3 Financial Results Conference Call. [Operator Instructions]

I will now hand the call over to Damian Towns, Loop Energy's Chief Financial Officer and Corporate Secretary.

[Damian Towns, executive]

Thank you. Good morning, everyone. My name is Damian Towns, and I have the privilege of being the Chief Financial Officer and Corporate Secretary of Loop Energy. Joining me today for our Q3 2022 results conference call is Loop Energy's President and CEO, Ben Nyland.

Yesterday, after market close, the company filed its MD&A, financial statements and news release for the 3 and 9 months ended September 30, 2022, which can be found on our website at www.loopenergy.com.

I would like to remind our listeners that our comments and answers to your questions today may contain forward-looking information. Forward-looking information, by its nature, is subject to risks and uncertainties that may cause stated outcomes to differ materially from the actual outcomes. Certain material factors or assumptions were applied in drawing the conclusions or making the forecast or projections, which are included in the forward-looking information. Listeners are warned not to place undue reliance on forward-looking statements. Please refer to our 2021 annual information form dated March 23, 2022, for more information.

I would also like to caution our listeners that any projections provided today regarding Loop's future financial performance are effective as of today's date, November 3, 2022. It is our policy not to comment or update this guidance between quarters.

I would now like to turn the call over to Loop's President and CEO, Mr. Ben Nyland, for his initial comments.

[Ben Nyland, executive]

Thank you, Damian. Welcome, everybody. Q3 has been another great quarter of momentum in both our industry and our company. The themes of industry and corporate growth that we outlined in our last quarterly call have continued with the result of building our momentum and strengthening our company. As a reminder, the themes we discussed on the last call were that Loop's continued successful execution of our business plan is resulting in us exceeding the targets that we have set up for ourselves. The second theme is the ongoing growth in the zero-emission commercial mobility vehicle space, and specifically, the recognition of the critical role fuel cells are expected to play in this arena. And the third is the growing momentum in the macro environment for both hydrogen and fuel cells.

We are seeing growth in all sectors of our business: Staff, resources, customers, orders, and perhaps most importantly, revenue. In the first 9 months of 2022, we have already exceeded our original target of 60 purchase orders and are well on our way to our revised target of 100 purchase orders this year. In the first 9 months, we have almost doubled our 2021 annual revenues and almost tripled the number of units shipped. Our customer base continues to grow with almost double the number of customers in our customer adoption cycle than we had at the beginning of the year. We feel it is particularly notable that we have had 0 customer attrition from our customer adoption cycle ever, a testament, we believe, to the quality of both our products and the customer service that we provide.

We have more than tripled our staff since our IPO in February 2021. The team demonstrates day in and day out a desire to go above and beyond the call of duty. It is only through this type of exceptional effort the company has been achieving continuously improving results that we are. To accommodate this growth in staff and activity, we have added manufacturing, service and support facilities in Vancouver and Shanghai, and a service and distribution center in the U.K. This expanded global footprint positions Loop very well to effectively service our customers today while building capacity to service the growing needs tomorrow.

Major economies around the world continue to pour resources into clean energy technologies in general, and hydrogen in particular. Europe's momentum continues with the recent announcement of the ban on all new internal combustion cars and vans as of 2035, the creation of the European hydrogen Bank and numerous other announcements. In Q3, the United States passed the Inflation Reduction Act, which included landmark provisions for the build-out of clean energy infrastructure across the United States. These provisions included some of the most aggressive production tax credits for green hydrogen that have ever been rolled out. The expected impact of this incentive is to drive up the production and drive down the cost per kilogram of green hydrogen. This effort parallels similar initiatives in Europe and China to dramatically increase the cost competitiveness of hydrogen.

We believe that major anticipated reductions in hydrogen costs from programs like the Inflation Reduction Act may pave the way for TCO parity of diesel vehicles on a complete CapEx and OpEx basis. We would expect such a development to result in a tipping point and dramatic escalation in the quantity of hydrogen fuel cell-powered vehicles deployed. We believe that with the launch of our newest product line, our continually-growing customer base and rapidly growing order book, Loop is positioning to be one of the leading fuel cell engine suppliers in the world.

The third quarter was particularly strong in terms of customer activity. We began the quarter with the announcement of the supply agreement with Tevva, becoming our first group customer to enter the commercialization phase of our customer adoption cycle. This agreement, which carries a minimum purchase commitment of USD 12 million by the end of 2023, set the stage for a strong finish to 2022 and solid growth in 2023.

Tevva's commitment to hydrogen vehicles was underscored by their announcement of both their 7.5 ton and 19 ton products during the quarter. During Q3, we've delivered some of the first systems covered by this supply agreement.

Tevva wasn't the only customer moving through the customer adoption cycle. In August, we were able to announce the Mobility & Innovation, a manufacturer of buses for the European market that moved from pilot phase to scale-up phase with the order of an additional 10 Loop fuel cell systems. These orders came after a successful European tour as the first M&I Loop bus resulted in strong customer demand.

Our expansion in the bus vertical continues across the core markets. NGVI in Korea in September, ARCC in Australia in October, and Rampini in Italy just a few weeks ago. Rampini is an Italian manufacturer of buses and trucks with over 50 years of distinguished history in specialty vehicle service, design and manufacturing sectors. As a company, they decided to turn away from diesel and internal combustion engines in 2018 and towards the future of electric vehicles and fuel cells. Rampini brings decades of experience developing bus, truck and specialty vehicles for the European market. With that comes not only deep expertise in vehicle development and manufacture, but a wide and very well-respected set of channels into the European market. They selected Loop's 30-kilowatt fuel cell module after a rigorous testing process. We are very proud to have been selected by Rampini and are looking forward to a long and prosperous relationship together.

We believe the success of our product offering is a result of, among other things, a strong grounding in performance, specifically fuel consumption in buses and trucks. We believe that our recent market experience confirms 2 things: first, that our products perform as advertised and better in the field. And second, our focus on fuel efficiency as a key value proposition is being recognized and rewarded by the market.

In addition to growing our customer base and product shipments, we continue to advance our technology into new products. In September, we launched the third product from our next-generation platform at the IAA Transportation in Hannover, Germany. Our next-generation platform takes advantage of a larger plate combined with our learnings from the first generation to deliver further improved efficiency and performance with an increased available set of power ranges. Our next-generation plate is designed to support products ranging from 60 to 300 kilowatts in single and multi-stack configurations.

The first product launched at IAA was our 120-kilowatt single-stack fuel cell module. This larger sized module opened new markets for new products, and more importantly, continues to enhance Loop's core value propositions of greater fuel efficiency, power and durability.

We believe that a strong sense of urgency is required for fuel cell companies to effectively address the needs of climate change and energy security. For this reason, we chose to model a new level of transparency for the fuel cell industry. We published fuel efficiency for this new module, not just as a single carefully selected operating point, but across the entire operating range of the module. We believe this is essential information that vehicle manufacturers and operators need to know in order to make informed and expedient decisions in the transition to zero-emission commercial vehicles.

We believe this efficiency curve shows that use of a vehicle powered by our Loop 120-kilowatt system could expect fuel cost parity with a comparable diesel vehicle, assuming today's hydrogen and diesel prices. We believe that this fuel cost parity is a critical step forward towards a competitive total cost of ownership between today's internal combustion vehicles and fuel cell vehicles. As many in the industry, we believe the achievement of total cost of ownership parity with diesel may represent the tipping point for the adoption of fuel cell vehicles. We believe Loop products can help get the industry to that tipping point faster, and that objective will continue to drive our innovation, product development and go-to-market plans.

In addition to the advancement of our fuel cell product line, we continue to progress our work in electrolyzers. Development work on the use of eFlow in electrolyzers continues to progress with our partners, and we look forward to providing updates on the results of this work in the coming months.

I'd like to now turn the call back over to CFO, Damian Towns.

[Damian Towns, executive]

Thanks, Ben. I'm delighted to provide an overview of our 3 and 9 months results for the period ended September 30, 2022.

We recognized a record quarterly revenue of CAD 1.4 million that led us to being able to recognize record annual revenues of CAD 2.6 million with 3 months still left in 2022. Our year-to-date sales now stand at 40 units, which represents 185% increase over our full year 2021 unit sales of 14 units. 22 of these units were sold in the third quarter, which exceeds our previous biz in the quarter by 38%. It all starts with our customer and our focus on providing a best-in-class experience to our customers and making the adoption of our products as easy as possible. We are delighted that this customer-first focus is continuing to manifest itself into purchase orders.

We continue to believe that our go-to-market strategy is best measured by the number of purchase orders we have received. Up to September 30, 2022, we had received 61 purchase orders in 2022. We have already tripled our 2021 apex and surpassed our initial 2022 guidance of 60 purchase orders. In Q3, we built on our 22 purchase orders from the first half of the year with over 80% of these year-to-date purchases coming from Europe.

As expected in the early stages of product commercialization, our gross margin remained negative with CAD 2.6 million and CAD 6.9 million in losses for 3 and 9 months ended September 30, 2022. As expected, these losses are higher than previous periods due to increased sales volumes. In our Q2 earnings call, we had indicated that we were pleased with the trajectory we assumed on our cost per unit sold, and we'd love to report on this in future periods.

We have started to see the benefits of economies of scale with our ramp-up in production and believe we are well placed to capture further cost savings as we leverage off Wright’s law. We had a stated objective of reducing our manufacturing costs by 25% in 2022. Although the year is not yet complete, we have seen a 39% reduction in unit cost in the first 9 months of 2022 compared with the 12 months for 2021, and therefore remain well placed to meet and exceed the 25% targeted cost reduction for 2022.

Our operating expenses were CAD 9.5 million and CAD 22.4 million, respectively, for 3 and 9 months ended September 30, which represents an 82% and 46% increase, respectively, over the comparative periods. We continue to invest in our product development, particularly our larger plates and 120-kilowatt fuel cell module, which was launched in September 2022.

We have grown our talent pool in Vancouver, almost doubling our engineering team and tripling our manufacturing team since the start of the year. Our investment in ensuring a positive customer experience and ease of implementation to our business development initiatives are continuing to bear fruit with an increase in our customer adoption cycle and the progression through the various phases all the way up to full production. The number of customers in our customer adoption cycle grew by over 10% in the third quarter and is up over 17% year-to-date.

We maintain a healthy cash position with CAD 37 million in cash and cash equivalents and a working capital of CAD 44 million as of September 30. Our cash position will enable us to continue to deliver on our 2022 objectives. In Q3 2022, we drew down CAD 4.9 million from the CAD 9.8 million Jobs and Growth Fund interest-free loan from Pacific Economic Development Canada that was announced in Q2 2022. We've also received CAD 1.1 million in SR&ED refunds during the quarter, and had subsequently in the quarter end received CAD 800,000 for the next SDTC milestone.

We've continued to receive and are very appreciative of the support provided from the Canadian government. We continue to explore ways of working with all levels of government within Canada to ensure that our business continues to flourish and deliver on Canada's desire to reduce global emissions.

We have taken the prudent step of growing our inventory levels to ensure that any impact from the global supply chains are mitigated as much as possible. To this effect, we have grown our raw material stockpiles from CAD 2.7 million to CAD 6.5 million in Q3 2022, before allowance for write-downs. We are now delivering at the top end of our projections and our decision to build capacity ahead of demand is paying dividends. The fuel cell market is growing, and we continue to build the foundation to capture this potential growth.

As part of leading ourselves for this anticipated growth, we've filed a base shelf prospectus in Q3 to ensure that we can take advantage of any capital market opportunities that might present themselves. For the 3 and 9 months ended September 30, we have invested CAD 2.5 million and CAD 7.4 million, respectively, into capital expenditures as we continue to build out our future capacity. During Q3 2022, we increased our manufacturing space via lease agreements in Canada by 60%, bringing our total space in Canada, including our engineering and administrative offices, to just over 37,000 square feet. This increase has enabled us to expand our manufacturing areas and house our growing technical services group.

In Q2, we secured a recent service location in the U.K. and have continued to build out that capacity in Q3 2022. We are forecasting total capital expenditures of around CAD 20 million for 2022.

In China, the commencement of first article production inspection is a significant step for our Loop Shanghai facility, particularly given the shutdowns due to the dynamic zero COVID policy in China that appeared in the second quarter. The growth in our physical space and talent pool makes us well placed to achieve our stated objective of being able to demonstrate production of 200 fuel cells per annum on a single shift basis by the end of 2022 from our facility in Burnaby, British Columbia.

In August, we had increased our guidance for 2022 by 67% to 100 purchase orders, and our 2023 guidance by 178% to 500 purchase orders. These increases mean that we are forecasting to quintuple our purchase orders each year for the next 2 years, including 2022. We have not previously provided revenue guidance to the market. The lag between purchase order and revenue recognition can vary significantly based on customer orders, their development time frames, and shipping trends. We would anticipate that around 60% of the purchase orders in 2022 would be converted into revenue, and this percentage would likely increase in future years, but could be impacted by the ongoing economic environment. In terms of realized price per unit, we would expect that the most recent 3 and 9 months realized price per unit would be a good measure going forward.

As referenced on prior earnings calls, we recognized our value proposition is not based on the 12 to 24-month revenue stream, but it does continue to validate our go-to-market strategy, demonstrate our ability to obtain market share, and deliver into this exciting and developing market. The significant increases in our near and midterm guidance does help illustrate the potential of our technology and our longer-term prospects.

This concludes our prepared remarks, and we now turn the call back over to the operator for the question-and-answer session.

[Operator]

[Operator Instructions] Our first question comes from Viveck Panjabi with National Bank Financial.

[Viveck Panjabi, analyst]

Viveck here. Just wanted to circle back on the purchase orders. I was hoping if you could provide some commentary on where you're seeing the biggest momentum, whether it can be in Europe, U.K. or China that could essentially help bridge the gap for year-end guidance of 100 units?

[Ben Nyland, executive]

Viveck, yes, thank you. Great question. We're actually seeing, as we mentioned, momentum globally. A lot in Asia Pacific, even outside of China. But I would say the vast majority of the momentum is occurring in the European market, and we're seeing good momentum across multiple customers as we indicated. Obviously, with the announcement of Tevva in the third quarter, that represents a significant portion of what we're seeing, and they're obviously based in Europe.

[Viveck Panjabi, analyst]

Sure, sure. And on the 3 customers that recently launched the hydrogen electric bus, the NGVI, Rampini and the ARCC, could you outline what were the next steps took under that partnership?

[Ben Nyland, executive]

Absolutely. I think, they are all different countries, they've got slightly different audiences.

Rampini, I outlined a little bit. They're really focused on the European market. That particular bus is an 8-meter bus. It's designed for smaller cities, and so we expect a number of demonstrations to go into municipalities around Europe, probably single and small quantities of vehicles that would lead towards more volume orders and deployments over time.

NGVI in Korea has their bus now working with the local -- demonstrating with the local bus authority, and so they expect also to see those numbers scale. And we would expect that to look very similar to what we've seen in other customer adoption cycles where they go from a single demonstration to 10. Ramping would be the same thing.

And then ARCC is based in Australia, and they've developed a phenomenal aluminum chassis bus that they're actually looking at some international opportunities for as well. And so we're working through a demonstration with them and would expect that to scale as well. But again, going into municipal fleets, both in Australia and hopefully internationally also.

[Viveck Panjabi, analyst]

Sure. And probably just one last one on my end. So you talked about the inventory levels that have increased. Just trying to get a sense, would you say that you have all the bill of materials or raw materials in place to service some of the next orders? And did you see any inflation impact in those raw materials?

[Damian Towns, executive]

It's Damian. I think in terms of inflation impacts, we're not really seeing that because of the scale that we're now ordering on. In previous years, we were ordering just the tens or whatever else. Now with our revised outlook, we certainly have larger volumes, so we're getting better pricing on the principal raw materials. So we've not necessarily been able to see an inflation impact through that because it's probably being covered off by those increased volumes.

In terms of would I say that we've had all of our supply chain addressed with our inventory and we're well placed. Look, we're going to continue to evaluate the supply chain and make sure our critical suppliers are addressed and continue to build inventory as we require it.

[Operator]

Our next question comes from Michael Glen with Raymond James.

[Michael Glen, analyst]

Ben, can you give us an update on the partnership in China you have with the deployment in Nanjing. How that's going? How many -- are those buses still driving around? What's the expectation there?

[Ben Nyland, executive]

So Michael, we've been very pleased. As you know, we've had a number of conversations about this fleet. Very pleased with the performance of our systems within the buses and pleased with the buses themselves. As you're also, I think, aware, COVID has had probably a more dramatic impact economically and operationally in China than other countries around the world. That particular fleet, the buses stopped operating at the end of February of this year, so they'd achieved over 400,000 kilometers of in-service mileage at that point. The issue had nothing to do with the vehicles themselves or our fuel cell systems, but rather that the fleet had been initially given a temporary hydrogen fueling station license, and that license expired at the end of 2021.

And so it's our understanding that Nanjing anticipates continuing to run that program and ultimately expand it, but I think that progress has been stalled a little bit by some of the complications with COVID.

[Michael Glen, analyst]

Okay. And then just looking at China overall, do you have any updated expectations? I know things have taken longer across the board in terms of how they have progressed so far. But any recent developments there that give you more optimism in 2023 for China?

[Ben Nyland, executive]

Michael, it continues to be a somewhat opaque market, so we're very optimistic about it in the longer term. We certainly have some question marks in the near term. A lot of it, as I said, related to zero COVID policy, and there's 2 impacts that has a bit of a drag on business. And as you know, in the initial stages in China, a lot of fuel cell deployments are dependent on government subsidies, and there's been a financial impact to most municipalities and provinces in China as well.

So we have question marks. We're seeing promising signs. But at this point, we have chosen not to include any projections within China in our unit projections for 2023. So when we're providing guidance for this year of 100 units and guidance for 2023 of 500 units, that is all based on business that we have outside of China. It's not that we don't think we'll have business inside China, it's just difficult to see exactly what that's going to look like right now.

[Michael Glen, analyst]

Okay. And then just on the gross margin. Is there a way -- and I know that you're talking about the cost savings being realized, but is there a way to peel back some of the numbers and get to a clear view or a clear understanding of what the underlying gross margin is on the modules, or what the target gross margin is on the modules?

[Damian Towns, executive]

Yes. Look, I think, Michael, a good question. I think as we continue to grow, we'll provide more guidance to the market and enhanced reporting surrounding that. I think right now, we're very focused on getting that 25% cost out that we stated in driving those costs out, and we're obviously delighted of where we sit today with 39% reduction based on 2021. But certainly, going forward, we'll be looking to provide more visibility. It's also a wee bit tougher right now because, obviously, we've got unlimited volume of sales, so obviously, it becomes very obvious to point to certain customers. So I think as we continue to have higher revenue levels, we'll be able to provide better visibility not only our cost of goods sold, but also our gross margins going forward.

[Operator]

[Operator Instructions] Our next question comes from Mac Whale with Cormark Securities.

[MacMurray Whale, analyst]

Ben, I'm wondering, could you talk a bit about your view on the Inflation Reduction Act in terms of potential acceleration of activity or engagement with U.S. customers? Like, have you started to see an impact?

[Ben Nyland, executive]

Mac, it's a very interesting question. I think the biggest impact of the Inflation Reduction Act is around the production tax credits for green hydrogen. And so there's a very significant economic incentive for the build-out of infrastructure and production of green hydrogen for various applications. As that cost comes down, we expect to see a pretty significant impact on the total cost of ownership in vehicles and in fleets, and so we expect the vehicle demand to be somewhat lagging. It would follow a similar pattern to what we've seen in other markets like China and Europe. And so we're not seeing an immediate impact in terms of activity in our customer base today, but looking forward, we can see the potential for it and we're going to be watching very closely, and we're engaging in conversations.

As you know from previous discussions we've had, our philosophy at Loop is that we want to be in markets where there's market pull as opposed to us trying to push a technology solution on the market. And so we're seeing that pull in Europe in a significant way. We have seen it in China, expect to continue to see it in China and other parts of Asia Pacific, and we'll be watching the U.S. markets closely for that pull over the next months and quarters.

[MacMurray Whale, analyst]

Okay. Some of the projections I've seen on some analyses on that CAD 40,000 per vehicle incentive kind of puts battery electrics online with diesel on a sort of 6, 7-year basis, with fuel cell sort of being on par over time. Obviously, it depends on that hydrogen price. I'm curious to see whether that -- I mean, it's a big dollar value per vehicle, whether fleets -- perhaps they need to understand better the tax implications for their eligibility, but I would imagine that's a pretty big benefit to them. But it sounds as if your first choice is not to go out and sort of market an incentive to a customer, it's more about engagement from someone that is looking to you because they've already decided this is the way they have to go.

I know it's a bit of a rambling question, but I'm wondering, does that make you think that your stance towards the market will change because of that? Or do you think CAD 40,000 is not that great an incentive at this point?

[Ben Nyland, executive]

Well, look, I think, Mac, that in the context of a rapid scale-up and significant numbers of vehicles, CAD 40,000 is a very significant number. In the context of some prototype deployments, probably not as significant. I think you mentioned the total cost of ownership parity of battery with diesel with that CAD 40,000 incentive. Obviously, batteries got a few years head start on us. But as you know, fuel cells bring a number of operating requirements to the table that make them very compelling for commercial vehicles. And we are seeing fleet operators around the world and in the United States recognizing that there is no one-size-fits-all solution, but rather they need battery electric solutions. They also need fuel cell solutions in the fleet.

And as the fleet operators, who really start to understand what their needs are, they then put pressure on the vehicle manufacturers. And I'm not meaning to say to you that we're not involved in conversations or we're completely ignoring those conversations, we talk to North American fleet operators and vehicle manufacturers all the time. It's just that we don't want to get involved in incentive-dependent pushes. We want to be working with customers to see a path to commercialization and path to scaling up the numbers as we've got our commercial adoption cycle.

So that's where we're focusing our effort. And like I say, I expect to start seeing those in North America over time.

[MacMurray Whale, analyst]

Okay. My second question was about cost reductions. When you look at your plan, can you give some insight into the areas in which you've made those reductions this year versus, say, what you have in store next year? I'm just wondering whether it gets harder in terms of when you look at the sort of low-hanging fruit, I mean, is that how you're doing this? Or is it manufacturing? Is it raw materials? Just can you give us an idea how that road map evolves from sort of easy to hard through the course of the next couple of years?

[Damian Towns, executive]

For sure, and it's a great question. Obviously, the easier dollars come first. So when you look at where cost savings are coming, that we'd be able to recognized so far. They're certainly coming out of effectively material costs and being able to order at volumes. And you're also being able to engineer the product slightly again to make sure that we are utilizing raw materials and components that have a better cost profile. So I think it's principally coming out of the parts that are going in. I think over time, we'll be able to realize cost savings as we start ramping up efficiencies of our plant and just getting the volumes through as well. So I think the initial victories have come relatively quickly because of scale of purchasing through raw materials.

[Ben Nyland, executive]

And I think, Mac, I would just add to that. Like any company, hopefully, we've got a specific plan. It's a multi-year plan to drive cost out, and it's always a positive indicator for companies when you find that you're executing ahead of the plan. And that's where we sit at this stage.

And so yes, certainly, there are natural cost outs that happen when you move from shipping 1 or 2 or 3 units to a customer to ship in dozens of units to various customers, just like there will be efficiencies that come out of the cost as we move into hundreds and thousands as well. And so I think the efforts that we've gone to, to reduce the costs today are giving us confidence that the plan is solid, and that we're in a good position to achieve the targets that we're looking for, for the next few years.

[MacMurray Whale, analyst]

Okay. Because I think when I was there last, it was relatively -- there's big changes in the way you were doing assembly. And I would imagine you haven't really had -- like this quarter, we were not -- the quarter you just reported wouldn't really reflect a huge amount of time at that new mode. Is that correct?

[Ben Nyland, executive]

It actually doesn't reflect any time at that moment. So that equipment that you saw is being commissioned, we would expect it to start impacting costs in 2023.

[MacMurray Whale, analyst]

Yes, okay. And if you look at that shape of that curve, the level of savings you've got this year, does it start to slow down? Or can you get that level again next year? I mean, that's a question about what part of that slope are we at? Are we still relatively to the left where it's been?

Like, I'm just wondering about the savings you got this year. Can we see that level next year, or do you expect to expect a slowing down in that percentage?

[Ben Nyland, executive]

Yes. Apologies, Mac, we were having a bit of a mute button -- I wasn't ignoring the question.

Look, this would fall -- I'll defer to Damian on this, but I think this would fall under areas of guidance that we're going to hold off on until future dates.

[Damian Towns, executive]

I think we'll look to provide more visibility going forward. That sort of why I caveated the 39% cost saving that we had as that's year-to-date, and we're well on track to achieving the 25%. That may also go up and down as well. So I think -- we'd love to provide better visibility to the market when we just have a more stable platform to talk from.

[Operator]

There are no further questions at this time. I'll now turn the call back over to Ben for closing remarks.

[Ben Nyland, executive]

Well, thank you, everybody, for joining us on the call today. As you know, as you've heard, we're very excited about the way the business is progressing. It is in many areas exceeding our expectations and we hope to continue to do that into the future. We very much appreciate all of the support that our shareholders have provided over the years, both those that have been with us up to 20 years, those who just joined us maybe yesterday. And we will continue to work extremely hard to achieve the goals that Loop has and to position Loop as one of the leading fuel cell engine companies globally over the coming years.

So thank you again for joining the call, and we'll talk to you again in 3 months.

[Operator]

This concludes today's conference call. You may now disconnect.