Nel ASA's Paradox: Record Loss Amidst Soaring Order Book

Nel's 2025 report reveals a paradox: a 364% surge in Q4 orders contrasts with a record 870M NOK quarterly net loss, driven by impairments and shifting market demand.

The Norwegian hydrogen technology firm Nel ASA has presented its 2025 annual report, revealing a stark financial dichotomy. The company is navigating a period of profound contrast, where one of the strongest quarters for new orders in its history coincides with the deepest net loss it has ever recorded. This paradoxical situation underscores a market in transition, albeit not unfolding precisely as anticipated.

A Surge in New Business

The most striking positive signal from the report is the explosive growth in order intake. During the fourth quarter, Nel secured new orders worth 686 million NOK. This figure represents a staggering 364% increase compared to the 148 million NOK booked in the same period last year, making it the company's second-best quarter ever for new business. The total order backlog subsequently grew to 1.3 billion NOK, with approximately 70% attributed to its PEM (Proton Exchange Membrane) technology.

This trend indicates a notable market shift. While customers appear hesitant to commit to large-scale, customized projects, demand is accelerating for standardized, containerized PEM solutions. Key contract wins highlighted include the HyFuel and Kaupanes projects for Hydrogen Solutions AS. These two ventures, with a combined capacity of 40 megawatts, are valued at over 50 million USD. Furthermore, Switzerland's H2 Energy placed an order for another containerized MC500 unit—its third such purchase from Nel.

Persistent Revenue Pressure and Record Losses

Despite the robust order book, revenue challenges persisted throughout the year. For the full year 2025, Nel reported revenues of 963 million NOK, a 31% decline from the 1,390 million NOK achieved in 2024. Fourth-quarter revenues alone fell to 330 million NOK, down 20% year-over-year from 416 million NOK. Total income, including other earnings, reached 361 million NOK in the final quarter.

The volatility in revenue is attributed to the irregular delivery schedule of large electrolyzer projects, which are dependent on the development stages of customer installations worldwide. The EBITDA for Q4 remained negative at minus 36 million NOK, unchanged from both the previous quarter and the year-earlier period.

The bottom line, however, shows dramatic deterioration. Nel posted a net loss of 870 million NOK for the fourth quarter, a sharp decline from the 64 million NOK loss in Q4 2024. This was primarily driven by non-cash impairment charges totaling 799 million NOK. Of this, 439 million NOK related to goodwill and intangible technology assets in the PEM segment, while a further 361 million NOK concerned production facilities for alkaline electrolyzers at the Herøya site. For the full year 2025, the net loss ballooned to 1,265 million NOK, compared to 258 million NOK in 2024.

Strategic Bet on Next-Generation Technology

In a significant strategic move, Nel's board approved the industrialization of its "Next Generation Pressurized Alkaline" platform at Herøya in December 2025. This technology, in development since 2018, has successfully completed its prototype phase.

The first phase of expansion, targeting one gigawatt of capacity, will require investments of approximately 300 million NOK before the deduction of public grants. The project has secured substantial support from the EU Innovation Fund, with funding of up to 135 million euros covering about 60% of the eligible costs. Nel's long-term vision for the site involves scaling annual production capacity to as much as 4 gigawatts. Market launch is scheduled for the first half of 2026, with larger-scale deliveries expected from 2027 onward.

Financial Position and Market Context

Nel concluded the fourth quarter with a solid liquidity position, holding cash and equivalents of roughly 1.6 billion NOK. The company's shares traded around 2.10 NOK on February 20, 2026, within a 52-week range of 1.95 NOK to 3.61 NOK. Based on approximately 1.84 billion outstanding shares, its market capitalization stood near 4 billion NOK at the end of January.

The broader industry headwinds noted by the company remain relevant. European regulators pointed out in December 2025 that high production costs and sluggish infrastructure development continue to constrain the hydrogen sector's growth. Nel's new alkaline platform is specifically engineered to address these very challenges by targeting lower system costs and improved energy efficiency.

All eyes will now be on the first-quarter 2026 results, due on May 6, to assess whether the powerful inflow of new orders can begin its crucial translation into sustained revenue. With the ramp-up of its new alkaline technology and the Herøya expansion, the coming months will be a critical observation period for Nel's strategic execution.