ITM Power's 68% Revenue Leap Is Real — the £144 Million Question Is Whether It Converts

ITM Power's chief executive sold shares on Thursday. The disclosure says why, and it has nothing to do with hydrogen.

Dennis Schulz exercised options and offloaded part of the resulting stock to settle tax obligations, leaving him with an economic interest of 517,894 shares. Employee share allocations and the vesting of earlier awards belong to the same compensation machinery. None of it speaks to demand for electrolysers or to the company's earnings trajectory. Investors weighing the stock should draw a hard line between remuneration housekeeping and operating progress — only the latter can justify a re-rating.

Thursday's 4.2% share price gain doesn't fill that gap either. It records one session's trading reaction, not evidence of a turning point in the business.

Growth and loss reduction arrived together

The figures published on 19 October for fiscal 2026 are where the substance sits. Revenue reached £43,647 million — £43.6 million in round terms — against £26.04 million a year earlier, an increase of 68%.

Growth on its own would be an incomplete yardstick. The companion number matters just as much: the adjusted EBITDA loss narrowed to £20.2 million from £33.0 million. More business genuinely came with a smaller shortfall.

That deserves attention without being mistaken for profitability. ITM has demonstrated progress, not a breakthrough. Anyone who conflates the two turns an improvement into a finished transformation.

Management's outlook for fiscal 2027 extends the same trajectory rather than announcing a leap into the black: revenue of £50 million to £60 million, alongside an adjusted EBITDA loss of £17 million to £20 million. That range is a forecast, not earned results — growth paired with further loss reduction, not breakeven. A bullish case should be built on this more modest bar. Meeting it would prove operating momentum; it would not prove a durably profitable business.

An order book is not yet revenue

The backlog gives those expectations a firmer footing than hope alone. At the close of fiscal 2026, ITM reported orders worth £144 million, 83% of which the company classifies as profitable contracts. That is a more concrete foundation than a thesis resting purely on future hydrogen projects.

Yet contracts must be executed before they touch the top line, and their profitability must show up in the company's results. A high share of profitable contracts does not mean ITM as a whole is already profitable. The test is delivery, not the size of the book.

Liquidity of £215.6 million at year-end provides a financial cushion. It does not substitute for improving the underlying result.

Hydropulse shows how long the road can be

The gap between a project agreement and production is illustrated by ITM's subsidiary Hydropulse, which roughly two weeks ago agreed outline terms with a European oil refinery. The plan envisages a 150 MW green hydrogen project under a proposed ten-year build-own-operate model — tying plant construction to a long-term operator role.

Joint technical front-end planning is under way. A final investment decision has not been taken; it is targeted for 2027, with production expected in 2029. The outline agreement should therefore not be equated with a completed investment or a secured start of output. It opens a perspective while remaining contingent on further decisions.

What actually decides the case

The bear argument is straightforward: a large backlog and individually profitable contracts guarantee neither the timing of revenue recognition nor a rapid reduction in group losses. If execution slips, the expected earnings improvement slips with it, and the cash buffer would not paper over that operating weakness.

So long as ITM converts existing contracts and keeps narrowing losses, the improvement scenario holds. Should order conversion stall, neither the liquidity nor fresh project prospects would on their own validate the growth assumptions. The final investment decision on Hydropulse is the next concrete checkpoint for that project — a milestone still to be reached, not a development already secured.

The investment case thus hinges far less on recent share movements by executives than on demonstrable progress in the business. Betting on an upturn means betting on contract execution and falling losses. A more cautious stance demands proof first that the backlog actually produces the results it promises.