Hyliion Q3 revenue jumps 881.8% to $7.45M

Hyliion expects to demonstrate the 200 kW KARNO Power Module’s targeted power output by the end of 2026.

Available on EDGAR 11/10/2026 - 04:47 PM EST Accepted by SEC EDGAR 11/10/2026 - 04:47 PM EST Learn about SEC filing dates

Rhea-AI Filing Summary

Hyliion Holdings Corp. (HYLN) reported R&D services revenue of $7.452 million for the quarter ended September 30, 2026, versus $759,000 a year earlier. Net loss was $11.064 million versus $13.337 million. Revenue growth reflected the timing of contract performance; cost of revenue was $6.900 million versus $806,000, and gross profit was $552,000 versus a $47,000 loss.

The Office of Naval Research awarded Hyliion a contract of up to $41.7 million in July 2026. Up to $45.5 million in remaining ONR contract revenue could be recognized as of September 30, 2026. Hyliion may sell common shares at its discretion for an aggregate offering price of up to $100 million under its at-the-market program. It projects approximately $115 million to $120 million in cash, short-term and long-term investments at the end of 2026, excluding program sales.

A feature in a newer printed reactor was susceptible to fatigue from thermal stress after extended high-power operation, resulting in a unit malfunction. Hyliion redesigned the reactor and is printing updated parts it believes will eliminate the issue. Retrofit needs will delay approximately 10 early-adopter deliveries beyond the prior 2026 target; completion is now expected in late 2026 to early 2027. The first customer deployment is expected before the end of 2026.

2 points · 0 major

PositiveiHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 1 point

How the balance works

Positive

• Moderate pointQuarterly R&D-services revenue reached $7.452 million, up 881.8% year over year.
• Moderate pointQuarterly net loss narrowed 17.0% to $11.064 million.

Negative

• Moderate pointRetrofits push approximately 10 early-adopter deliveries beyond the prior 2026 target.

Filing Explained

At September 30, 2026, Hyliion reported $16.7 million cash, $37.9 million short-term and $66.7 million long-term investments; it said resources were sufficient for 12 months.

Form 10-Q is Hyliion’s unaudited quarterly report for the quarter ended September 30, 2026. In July, the company amended its headquarters lease, extending it through July 2032 and committing to $9.8 million in base rent over the 63-month extension.

Two further five-year extensions are options and are not included in the revised lease term. At quarter-end, Hyliion reported $16.7 million in cash, $37.9 million in short-term investments and $66.7 million in long-term investments; management said its current and long-term assets were sufficient for the next 12 months.

Key Figures

Quarterly R&D services revenue: $7.452 million Quarterly revenue increase: 881.8% Quarterly net loss: $11.064 million +5 more

8 metrics

Quarterly R&D services revenue $7.452 million Quarter ended September 30, 2026; $759,000 in 2025.

Quarterly revenue increase 881.8% Three months ended September 30, 2026, compared with 2025.

Quarterly net loss $11.064 million Three months ended September 30, 2026; $13.337 million in 2025, a 17.0% decrease.

Revised 2024 ONR contract value $21.6 million Modified in September 2026; includes an option of up to $2.5 million that ONR may exercise.

July 2026 ONR contract Up to $41.7 million Contract for 2-megawatt and 3-megawatt KARNO power-generation systems.

Remaining ONR contract revenue Up to $45.5 million As of September 30, 2026.

At-the-market aggregate offering price Up to $100 million Common shares Hyliion may sell at its discretion.

Projected year-end cash and investments Approximately $115 million to $120 million At the end of 2026; projection excludes sales under the at-the-market program.

Key Terms

cost-plus-fixed-fee, at-the-market sales agreement, held-to-maturity, work-in-process inventory, +1 more

5 terms

cost-plus-fixed-fee financial

"best effort cost-plus-fixed-fee contract of up to $41.7 million"

Cost-plus-fixed-fee is a payment method used in contracting where the buyer agrees to cover all the costs of a project plus an additional fixed amount as profit. This means the total payment depends on the actual expenses incurred, plus a set fee that doesn’t change regardless of the project's final costs. For investors, understanding this arrangement helps assess how project costs and profit margins are managed and how they might impact financial risk and potential returns.

at-the-market sales agreement financial

"entered into an at-the-market sales agreement"

An at-the-market sales agreement lets a company raise cash by selling newly issued shares directly into the open market at whatever price buyers are paying that day, using a broker to place the trades over time. Investors should watch these deals because they can dilute existing ownership and put downward pressure on the stock price while giving the company flexible, on-demand funding—like a store gradually listing extra items on an online marketplace at current prices.

held-to-maturity financial

"classified as held-to-maturity"

A held-to-maturity asset is a debt investment a company plans and is able to keep until the loan or bond reaches its scheduled end, when the principal is repaid. For investors, this classification matters because the holder treats the investment like a locked-in loan—avoiding short-term price swings in financial statements and signaling a steady income expectation, similar to lending money to a friend with a fixed repayment date.

work-in-process inventory financial

"classify it as work-in-process inventory"

Monte Carlo simulation technical

"valued at $1.57 per unit using a Monte Carlo simulation"

A Monte Carlo simulation is a computerized way to model many possible future outcomes by running thousands of randomized “what-if” scenarios, like rolling dice repeatedly to see the range of results. For investors it shows the probability of different returns, losses, or timing outcomes under varied assumptions, helping quantify uncertainty and compare risk — similar to using many practice runs to judge how often a plan succeeds or fails.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much revenue did HYLN report in the third quarter of 2026?

Hyliion reported $7.452 million of R&D services revenue for the quarter ended September 30, 2026, compared with $759,000 a year earlier. Cost of revenue was $6.900 million versus $806,000, and gross profit was $552,000 versus a $47,000 loss.

Why were HYLN’s KARNO deliveries delayed?

Hyliion said a feature in a newer printed reactor was susceptible to fatigue from thermal stress after extended high-power operation, resulting in a unit malfunction. The reactor was redesigned and updated parts are being printed; retrofits are expected to delay approximately 10 early-adopter deliveries beyond the prior 2026 target. Those deliveries are expected in late 2026 to early 2027, while the first customer-site deployment is expected before year-end 2026.

What does HYLN’s $41.7 million Navy contract cover?

The 36-month contract calls for Hyliion to design, develop, construct, test, and deliver 2-megawatt and 3-megawatt KARNO power-generation systems at locations identified by the Office of Naval Research. Work is expected to be completed by July 2029.

What are the terms of HYLN’s at-the-market share program?

Hyliion may offer common shares with an aggregate offering price of up to $100 million under its August 2026 agreement with Needham & Company, LLC and Northland Securities, Inc. The company is not obligated to sell shares, and any sales depend on market conditions, capital needs, and other factors. Possible sales could support investment in additive printing machines and related assets following commercialization.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File No. 001-38823

HYLIION HOLDINGS CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware						83-2538002
(State or Other Jurisdiction of Incorporation)						(IRS Employer Identification No.)
1202 BMC Drive, Suite 100, Cedar Park, TX						78613
(Address of Principal Executive Offices)						(Zip Code)

(833) 495-4466

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☐			Accelerated filer			☐
Non-accelerated filer			x			Smaller reporting company			x
						Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No x

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

HYLN

NYSE American LLC

Common Stock, par value $0.0001 per share

HYLN

NYSE Texas, Inc.

As of November 6, 2026, 178,923,821 shares of common stock, par value $0.0001 per share, were outstanding.

Table of Contents

HYLIION HOLDINGS CORP.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026

TABLE OF CONTENTS

						Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)			1
			Condensed Consolidated Balance Sheets			1
			Condensed Consolidated Statements of Operations			2
			Condensed Consolidated Statements of Changes in Stockholders’ Equity			3
			Condensed Consolidated Statements of Cash Flows			4
			Notes to Condensed Consolidated Financial Statements			5
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			28
Item 4.			Controls and Procedures			28
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			29
Item 1A.			Risk Factors			29
Item 2.			Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities			29
Item 3.			Defaults Upon Senior Securities			29
Item 4.			Mine Safety Disclosures			29
Item 5.			Other Information			30
Item 6.			Exhibits			30

i

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HYLIION HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands, except share data)

			September 30, 2026						December 31, 2025
			(Unaudited)
Assets
Current assets
Cash and cash equivalents			$	16,706					$	22,938
Accounts receivable, net			6,618						489
Inventory			742						—
Prepaid expenses and other current assets			5,289						4,597
Short-term investments			37,914						69,427
Assets held for sale			—						1,181
Total current assets			67,269						98,632
Property and equipment, net			33,031						40,461
Operating lease right-of-use assets			8,210						3,468
Other assets			1,017						1,004
Long-term investments			66,740						59,994
Total assets			$	176,267					$	203,559
Liabilities and stockholders’ equity
Current liabilities
Accounts payable			$	1,407					$	3,142
Current portion of operating lease liabilities			1,482						2,726
Accrued expenses and other current liabilities			5,746						3,995
Total current liabilities			8,635						9,863
Operating lease liabilities, net of current portion			7,166						1,646
Other liabilities			341						41
Total liabilities			16,142						11,550
Commitments and contingencies (Note 11)
Stockholders’ equity
Common stock, $0.0001 par value; 250,000,000 shares authorized; 178,883,166 and 187,878,790 shares issued at September 30, 2026 and December 31, 2025, respectively; 178,883,166 and 177,268,720 shares outstanding as of September 30, 2026 and December 31, 2025, respectively			18						19
Additional paid-in capital			403,836						413,122
Treasury stock, at cost			—						(14,132)
Accumulated deficit			(243,729)						(207,000)
Total stockholders’ equity			160,125						192,009
Total liabilities and stockholders’ equity			$	176,267					$	203,559

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Table of Contents

HYLIION HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar amounts in thousands, except share and per share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2026						2025						2026						2025
Revenues
Research and development services			$	7,452					$	759					$	15,228					$	2,763
Total revenues			7,452						759						15,228						2,763
Cost of revenues
Research and development services			6,900						806						14,100						2,667
Total cost of revenues			6,900						806						14,100						2,667
Gross profit (loss)			552						(47)						1,128						96
Operating expenses
Research and development			8,699						10,136						25,864						32,503
Selling, general and administrative			4,291						5,184						16,899						17,228
Exit and termination (benefits) costs			—						(70)						(672)						1,007
Total operating expenses			12,990						15,250						42,091						50,738
Loss from operations			(12,438)						(15,297)						(40,963)						(50,642)
Interest income			1,374						1,960						4,234						6,637
Net loss			$	(11,064)					$	(13,337)					$	(36,729)					$	(44,005)
Net loss per share, basic and diluted			$	(0.06)					$	(0.08)					$	(0.21)					$	(0.25)
Weighted-average shares outstanding, basic and diluted			178,719,035						175,652,193						178,280,291						175,106,583

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HYLIION HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollar amounts in thousands, except share data)

			Nine Months Ended September 30, 2026
			Common Stock												Treasury Stock												Additional Paid-In Capital						Accumulated Deficit						Total Stockholders’ Equity
			Shares						Amount						Shares						Amount
Balance at December 31, 2025			187,878,790						$	19					(10,610,070)						$	(14,132)					$	413,122					$	(207,000)					$	192,009
Exercise of common stock options and vesting of restricted stock units, net			1,048,434						—						—						—						—						—						—
Share-based compensation			—						—						—						—						1,452						—						1,452
Net loss			—						—						—						—						—						(11,737)						(11,737)
Balance at March 31, 2026			188,927,224						$	19					(10,610,070)						$	(14,132)					$	414,574					$	(218,737)					$	181,724
Exercise of common stock options and vesting of restricted stock units, net			280,064						—						—						—						1						—						1
Share-based compensation			—						—						—						—						1,742						—						1,742
Net loss			—						—						—						—						—						(13,928)						(13,928)
Balance at June 30, 2026			189,207,288						$	19					(10,610,070)						$	(14,132)					$	416,317					$	(232,665)					$	169,539
Exercise of common stock options and vesting of restricted stock units, net			285,948						—						—						—						—						—						—
Share-based compensation			—						—						—						—						1,650						—						1,650
Retirement of treasury stock			(10,610,070)						(1)						10,610,070						14,132						(14,131)						—						—
Net loss			—						—						—						—						—						(11,064)						(11,064)
Balance at September 30, 2026			178,883,166						$	18					—						$	—					$	403,836					$	(243,729)					$	160,125

			Nine Months Ended September 30, 2025
			Common Stock												Treasury Stock												Additional Paid-In Capital						Accumulated Deficit						Total Stockholders’ Equity
			Shares						Amount						Shares						Amount
Balance at December 31, 2024			184,428,472						$	18					(10,610,070)						$	(14,132)					$	408,315					$	(149,812)					$	244,389
Exercise of common stock options and vesting of restricted stock units, net			1,414,392						1						—						—						(444)						—						(443)
Share-based compensation			—						—						—						—						1,295						—						1,295
Net loss			—						—						—						—						—						(17,254)						(17,254)
Balance at March 31, 2025			185,842,864						$	19					(10,610,070)						$	(14,132)					$	409,166					$	(167,066)					$	227,987
Exercise of common stock options and vesting of restricted stock units, net			203,342						—						—						—						(89)						—						(89)
Share-based compensation			—						—						—						—						1,386						—						1,386
Net loss			—						—						—						—						—						(13,414)						(13,414)
Balance at June 30, 2025			186,046,206						$	19					(10,610,070)						$	(14,132)					$	410,463					$	(180,480)					$	215,870
Exercise of common stock options and vesting of restricted stock units, net			536,192						—						—						—						(55)						—						(55)
Share-based compensation			—						—						—						—						1,378						—						1,378
Net loss			—						—						—						—						—						(13,337)						(13,337)
Balance at September 30, 2025			186,582,398						$	19					(10,610,070)						$	(14,132)					$	411,786					$	(193,817)					$	203,856

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HYLIION HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

			Nine Months Ended September 30,
			2026						2025
Cash flows from operating activities
Net loss			$	(36,729)					$	(44,005)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			6,028						4,066
Amortization and accretion of investments, net			(655)						(1,258)
Noncash lease expense			1,424						1,472
Gain on disposal of assets, including assets held for sale			(472)						(697)
Share-based compensation			4,844						4,059
Carrying value adjustment to assets held for sale			—						1,590
Other			1,233						—
Changes in operating assets and liabilities:
Accounts receivable			(6,129)						1,200
Inventory			(742)						—
Prepaid expenses and other assets			961						2,474
Accounts payable			109						457
Accrued expenses and other liabilities			1,740						(2,254)
Operating lease liabilities			(1,890)						(1,795)
Net cash used in operating activities			(30,278)						(34,691)
Cash flows from investing activities
Purchase of property and equipment			(2,372)						(22,003)
Proceeds from sale of property and equipment			1,853						1,192
Receipt of security deposit			—						41
Purchase of investments			(49,584)						(36,326)
Proceeds from sale and maturity of investments			74,504						101,026
Net cash provided by investing activities			24,401						43,930
Cash flows from financing activities
Payments of deferred equity offering costs			(356)						—
Proceeds from exercise of common stock options			1						—
Taxes paid related to net share settlement of equity awards			—						(588)
Net cash used in financing activities			(355)						(588)
Net (decrease) increase in cash and cash equivalents and restricted cash			(6,232)						8,651
Cash and cash equivalents and restricted cash, beginning of period			23,603						9,892
Cash and cash equivalents and restricted cash, end of period			$	17,371					$	18,543
Supplemental disclosure of noncash investing and financing activities:
Acquisitions of property and equipment in accounts payable and accrued expenses			$	29					$	950
Property and equipment recorded through recognition of asset retirement obligation			$	300					$	—
Vendor tariff credits recorded as reduction of property and equipment cost			$	1,237					$	—
Right-of-use assets obtained in exchange for lease obligations			$	6,166					$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HYLIION HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except as separately indicated)

Note 1. Overview

Hyliion Holdings Corp. is a Delaware corporation headquartered in Cedar Park, Texas, that designs and develops the KARNOTM Power Module for stationary and mobile applications and provides research and development (“R&D”) services. References to the “Company,” “Hyliion,” “we,” “our,” or “us” in this report refer to Hyliion Holdings Corp. and its wholly owned subsidiary, unless expressly indicated or the context otherwise requires.

The KARNO Power Module is a complete, fully integrated, enclosed, fuel-agnostic power generating solution, including balance of plant systems such as cooling, controls, fuel, and air handling, that generates electricity on command in stationary power generation applications powered by KARNO Cores. The KARNO Core is a heat-powered generator that uses linear motors in a four-shaft system to generate electricity. Heat is generated through the flameless oxidation of fuels while achieving near zero emissions without aftertreatment systems.

Note 2. Disposals

In November 2023, the Company initiated the wind-down of its powertrain business (the “Plan”), the majority of which activities were completed in 2025. See Note 2 to the consolidated financial statements in our 2025 Annual Report for additional information. The Company has not accounted for the impacts of the Plan as a discontinued operation as the underlying intellectual property has not been abandoned or sold. The Company recognized net (benefits) costs related to the Plan, consisting primarily of recoveries from sales of assets, of nil and $(0.1) million during the three months ended September 30, 2026 and 2025, respectively, and $(0.7) million and $1.0 million during the nine months ended September 30, 2026 and 2025, respectively, which are included in exit and termination (benefits) costs in the condensed consolidated statements of operations. Remaining accrued liabilities associated with the Plan were immaterial at September 30, 2026.

Note 3. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Hyliion Holdings Corp. and its wholly owned subsidiary. Intercompany transactions and balances have been eliminated upon consolidation. The condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements for the fiscal year then ended, but does not include all necessary disclosures required with respect to annual financial statements. In the opinion of the Company, these condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s 2025 Annual Report. Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.

These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company is an early-stage growth company and has generated negative cash flows from operating activities since inception. At September 30, 2026, the Company had total equity of $160.1 million, inclusive of cash and cash equivalents of $16.7 million and total investments of $104.7 million. Based on this, the Company has sufficient funds to continue to execute its business strategy for the next twelve months from the issuance date of the financial statements included in this Quarterly Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue, inventory, income taxes and valuation of share-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial statements.

5

Segment Information

ASC 280, Segment Reporting, defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company operates as a single operating segment from which all revenue and net income (loss) are derived and for which all assets are attributed. The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM assesses performance for the single operating segment and decides how to allocate resources based on consolidated net income (loss), which is reported on the condensed consolidated statements of operations, and does not segment the business for internal reporting or decision making. The CODM uses net income (loss), including the significant expense categories presented below, in the annual budgeting and forecasting process and monitors actual results against the budget and forecast on a quarterly basis. The CODM considers budget-to-actual variances in net income (loss) when making decisions about the allocation of operating and capital resources, including the level of investment in research and development activities related to the KARNO Power Module, spending on commercialization efforts, and resources devoted to performance under the Company’s government contracts. The CODM also uses net income (loss) to monitor the Company’s operating cash requirements and to evaluate the sufficiency of the Company’s liquidity to fund planned operations.

The significant expense categories and amounts that are regularly provided to the CODM and included in the reported measure of segment loss for the three and nine months ended September 30, 2026 and 2025 are summarized as follows (in millions):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2026						2025						2026						2025
Total revenues			$	7.5					$	0.8					$	15.2					$	2.8
Total cost of revenues			6.9						0.8						14.1						2.7
Gross profit (loss)			0.6						—						1.1						0.1
Administrative and office			1.7						1.6						5.0						4.8
Depreciation and amortization			1.8						1.7						6.0						4.1
Facilities			1.3						1.3						3.8						4.2
Personnel			5.8						5.7						20.0						18.3
Product development, exclusive of other costs presented			0.8						3.6						2.9						13.2
Professional services			1.2						1.3						4.1						4.2
Exit and termination (benefits) costs			—						(0.1)						(0.7)						1.0
Other operating expense			0.3						0.2						0.9						0.9
Total operating expenses			13.0						15.3						42.1						50.7
Other income, net			1.4						2.0						4.2						6.6
Net loss			$	(11.1)					$	(13.3)					$	(36.7)					$	(44.0)

Note: Amounts may not sum due to rounding.

Concentration of Supplier Risk

The Company is dependent on certain suppliers, many of which are single source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s products in a timely manner at prices, quality levels and volumes that are acceptable, or the Company’s inability to efficiently manage these components from these suppliers, could have a material adverse effect on the Company’s business, prospects, financial condition and operating results.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity date of 90 days or less at the time of purchase to be cash and cash equivalents only if in checking, savings or money market accounts. Cash and cash equivalents include cash held in banks and money market accounts and are carried at cost, which approximates fair value. The Company maintains cash in excess of federally insured limits at financial institutions, which it believes are of high credit quality, and has not incurred any losses related to these balances to date. The Company believes its credit risk, with respect to these financial institutions, to be minimal.

6

Restricted Cash

The Company has provided its corporate headquarters lessor with a letter of credit for $0.7 million to secure the performance of the Company’s lease obligations, backed by a restricted cash deposit to pay any draws on the letter of credit by the lessor. Total cash and cash equivalents and restricted cash as presented in the condensed consolidated statements of cash flows is summarized as follows:

			September 30, 2026						December 31, 2025						September 30, 2025						December 31, 2024
Cash and cash equivalents			$	16,706					$	22,938					$	17,878					$	9,227
Restricted cash included in other assets			665						665						665						665
			$	17,371					$	23,603					$	18,543					$	9,892

Accounts Receivable, Net

Accounts receivable are stated at the invoiced amount, net of an allowance for credit losses. The Company estimates expected credit losses on its receivables and maintains an allowance at a level considered adequate to provide for those losses based on its evaluation of current conditions as of the balance sheet date, changes in the character and size of the receivable balance, historical loss experience, and other pertinent factors. At September 30, 2026 and December 31, 2025, accounts receivable included amounts receivable from a single customer of $6.5 million and $0.5 million, respectively. At September 30, 2026 and December 31, 2025, there was no allowance for credit losses on customer receivables.

The Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, during the quarter ended March 31, 2026, applying the practical expedient under which the Company assumes that current conditions as of the balance sheet date do not change for the remaining life of its current accounts receivable in estimating expected credit losses. There was no material impact as a result of the adoption of this ASU.

Investments

The Company’s investments consist of corporate bonds, U.S. treasury and agency securities, state and local municipal bonds and commercial paper, all of which are classified as held-to-maturity, with a maturity date of 36 months or less at the time of purchase. The Company determines the appropriate classification of investments at the time of purchase and re-evaluates such designation as of each balance sheet date. Investments are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity.

Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity, and any expected credit losses. Such amortization, along with interest, is included in interest income. The Company estimates expected credit losses for held-to-maturity investments by considering relevant available information and assessing the risk of loss over the assets’ contractual life. The Company’s portfolio of held-to-maturity investments is of a high credit quality with minimal expected credit losses. The Company uses the specific identification method to determine the cost basis of securities sold.

Fair Value Measurements

ASC 820, Fair Value Measurements, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level I: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement date;

Level II: Significant other observable inputs other than level I prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data; and

Level III: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

7

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company believes its valuation methods are appropriate and consistent with other market participants. However, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The Company’s financial instruments consist of cash and cash equivalents and restricted cash, accounts receivable, investments, accounts payable and accrued expenses. The carrying value of cash and cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of those instruments. The fair value of investments is based on quoted prices for identical or similar instruments in markets that are not active. As a result, investments are classified within Level II of the fair value hierarchy.

Inventory

As of September 30, 2026, we have not yet commercialized the KARNO Power Module. Unless such components are capitalizable, costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as R&D costs, resulting in zero cost basis for those components. As a result, certain components on hand have a zero cost basis, and inventory capitalized in future periods that incorporates these components will reflect carrying amounts, and related cost of revenue upon sale, that are lower than would result had those components been initially capitalized.

When inventory may be utilized in performance of our contracts with the United States Department of the Navy’s Office of Naval Research (“ONR”), we capitalize that inventory including certain allocations of overhead, labor, and other direct costs and classify it as work-in-process inventory. When this inventory is designated to and utilized in an activity, we record either an R&D or a cost of revenue charge in the period in which the utilization occurs.

All inventory recorded on the balance sheet at September 30, 2026 is classified as work-in-process. Inventory is valued using the specific identification cost method and is stated at the lower of cost or net realizable value. We review our inventory to determine whether its carrying value exceeds the net amount we expect to realize upon the ultimate sale of the inventory.

Revenue

The Company follows five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers, which are:

•Step 1: Identify the contract(s) with a customer;

•Step 2: Identify the performance obligations in the contract;

•Step 3: Determine the transaction price;

•Step 4: Allocate the transaction price to the performance obligations in the contract; and

•Step 5: Recognize revenue when (or as) a performance obligation is satisfied.

U.S. Government Contracts

In September 2024, the Company was awarded a best effort cost-plus-fixed-fee contract of up to $16.0 million by the ONR to research the suitability of its KARNO Power Module for Navy ships and stationary power generation applications. Under the agreement, the Company will provide R&D services through February 2027, including delivery of up to seven KARNO Cores and testing of power module systems. The ONR contract represented a significant change in business strategy toward providing R&D activities in the ordinary course of business in addition to developing Power Modules for stationary and mobile applications. In September 2026, the ONR contract awarded in September 2024 was modified to increase the contract value to $21.6 million to fund the cost of completing the remaining deliverables, including an option of up to $2.5 million that the ONR may exercise in the future.

In July 2025, the Company was awarded a Phase II best effort cost-plus-fixed-fee contract of up to $1.5 million by the ONR to demonstrate the conceptual feasibility of the Phase I effort contract awarded in July 2024 for up to $0.2 million and to show development progress towards successful application. Under the Phase II agreement, including the exercised option and amendments, the Company will provide R&D services through July 2027, including design reviews, simulations, and reporting.

8

In July 2026, the Company was awarded a best effort cost-plus-fixed-fee contract of up to $41.7 million by the ONR. This contract provides for the design, development, construction, testing and delivery of 2-megawatt and 3-megawatt KARNO power generation systems at locations identified by ONR. The Company began performance on this contract in the third quarter of 2026, and expects to increase performance in the second and third quarters of 2027, continuing through mid-2029. During the three months ended September 30, 2026, deposits of $1.2 million previously made on equipment expected to be used in production were charged to cost of revenues, as the related equipment was instead procured as a direct cost reimbursable under the Company’s contracts with the ONR.

There is a single research and development services performance obligation in each of these contracts that is measured over time as the services are performed. The Company generally invoices monthly, which corresponds directly with the value to the customers of the performance completed to date based on the cost of labor and materials utilized, and recognizes revenue in the amount that it has a right to invoice. Payment is ordinarily due within 90 days of invoice submission. Cost of R&D services revenue includes labor, allocated fringe and overhead, inventory, and equipment.

All revenue during the three and nine months ended September 30, 2026 and 2025 was recognized over time. The portion of our revenues from significant customers is summarized as follows and is attributable to customers located in the U.S.:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2026						2025						2026						2025
Customer A			100		%				75		%				100		%				76		%
Customer B			—						25						—						24
			100		%				100		%				100		%				100		%

Research and Development Expense

R&D costs did not meet the requirements to be recognized as an asset as the associated future benefits were at best uncertain and there was no alternative future use at the time the costs were incurred. R&D costs include, but are not limited to, outsourced engineering services, allocated facilities costs, depreciation on equipment utilized in R&D activities, internal engineering and development expenses, materials, internally-developed software and employee-related expenses (including salaries, benefits, travel, and share-based compensation) related to development of the Company’s products and services.

Recent Accounting Pronouncements

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable, including additional guidance on what disclosures should be provided in interim reporting periods. The pronouncement is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact of adoption.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The pronouncement is effective for fiscal years beginning after December 15, 2027 and interim periods within that fiscal year. We are currently evaluating the impact of adoption.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), and clarified by ASU 2025-01, to enable investors to better understand the major components of an entity’s income statement. The pronouncement is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, and we expect a material impact to our disclosures as a result of adoption.

9

Note 4. Investments

The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at September 30, 2026 and December 31, 2025 are summarized as follows:

			September 30, 2026
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Corporate bonds and notes			$	104,654					$	87					$	(616)					$	104,125
			$	104,654					$	87					$	(616)					$	104,125

			December 31, 2025
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Commercial paper			$	4,868					$	1					$	—					$	4,869
U.S. government agency bonds			3,000						—						—						3,000
State and municipal bonds			1,000						—						—						1,000
Corporate bonds and notes			120,553						492						(17)						121,028
			$	129,421					$	493					$	(17)					$	129,897

			September 30, 2026												December 31, 2025
			Amortized Cost						Fair Value						Amortized Cost						Fair Value
Due in one year or less			$	37,914					$	37,824					$	69,427					$	69,586
Due after one year through five years			66,740						66,301						59,994						60,311
			$	104,654					$	104,125					$	129,421					$	129,897

Note 5. Fair Value Measurements

The fair value measurements of our financial assets at September 30, 2026 and December 31, 2025 are summarized as follows:

			Fair Value Measurements at September 30, 2026
			Level I						Level II						Level III						Total
Cash and cash equivalents			$	16,706					$	—					$	—					$	16,706
Restricted cash			665						—						—						665
Held-to-maturity investments:
Corporate bonds and notes			—						104,125						—						104,125
			$	17,371					$	104,125					$	—					$	121,496

10

			Fair Value Measurements at December 31, 2025
			Level I						Level II						Level III						Total
Cash and cash equivalents			$	22,938					$	—					$	—					$	22,938
Restricted cash			665						—						—						665
Held-to-maturity investments:
Commercial paper			—						4,869						—						4,869
U.S. government agency bonds			—						3,000						—						3,000
State and municipal bonds			—						1,000						—						1,000
Corporate bonds and notes			—						121,028						—						121,028
			$	23,603					$	129,897					$	—					$	153,500

Note 6. Leases

In July 2026, the Company entered into an amendment to the lease of its Cedar Park, Texas headquarters facilities. The amendment extended the lease term for the Company’s approximately 125,000 square foot facility by 63 months, through July 2032, and provides for total base rent of $9.8 million over the extension period, inclusive of a three-month rent abatement, and a tenant improvement allowance of up to $0.6 million. The Company retains two options to further extend the lease term by five years each which are not included in the revised lease term as they are not reasonably certain to be exercised. The lease term for the subleased approximately 27,000 square foot facility was not extended and will expire in April 2027.

The Company accounted for the amendment as a modification of the existing lease rather than as a new lease. At the amendment date, the Company reassessed the lease and concluded it remains an operating lease, and remeasured the lease liability using the revised lease payments and an updated incremental borrowing rate. The remeasurement increased the operating lease right-of-use asset and operating lease liabilities by $6.2 million. The rent abatement and tenant improvement allowance are reflected in the remeasured lease liability and right-of-use asset, and the Company continues to recognize lease cost on a straight-line basis over the remaining lease term. The tenant improvement allowance, which had not yet been received as of September 30, 2026, allows for reimbursement of improvements made to the facility. The improvements are owned by the Company and are recorded in property and equipment as leasehold improvements, depreciated over the shorter of their useful lives or the remaining lease term.

In February 2025, the Company executed a sublease for a portion of its corporate office through April 2027. Sublease operating income which is included as reductions to R&D and selling, general and administrative expense in the condensed consolidated statements of operations for the three months ended September 30, 2026 and 2025 was $0.1 million and $0.1 million, respectively, and $0.3 million and $0.2 million, respectively, for the nine months ended September 30, 2026 and 2025.

Note 7. Property and Equipment, Net

Property and equipment, net at September 30, 2026 and December 31, 2025 is summarized as follows:

			September 30, 2026						December 31, 2025
Production machinery and equipment			$	44,961					$	46,905
Vehicles			379						379
Leasehold improvements			6,004						5,551
Office furniture and fixtures			300						287
Computers and related equipment			2,349						2,273
			53,993						55,395
Less: accumulated depreciation			(20,962)						(14,934)
Total property and equipment, net			$	33,031					$	40,461

During the three months ended September 30, 2026, the Company received credits against future purchases of $1.2 million from an equipment vendor for tariffs previously included in the purchase price of production machinery and equipment, which were recorded as a reduction of the cost of the related property and equipment.

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During the three months ended September 30, 2026, the Company applied $1.2 million in deposits previously made toward purchase of property and equipment to equipment purchased for and reimbursed under contracts described in Note 3. These amounts are included as an “other” adjustment to reconcile net loss to net cash used in operating activities in the condensed consolidated statements of cash flows for the nine months ended September 30, 2026.

Note 8. Share-Based Compensation

During the nine months ended September 30, 2026 and 2025, the Company granted 4.1 million and 4.4 million restricted stock units, respectively, which will vest over a period of one to three years, inclusive of the units described below with underlying closing stock price thresholds. During the nine months ended September 30, 2026 and 2025, 1.4 million and 0.1 million restricted stock units, respectively, were forfeited. Share-based compensation expense for the three months ended September 30, 2026 and 2025 was $1.7 million and $1.4 million, respectively. Share-based compensation expense for the nine months ended September 30, 2026 and 2025 was $4.8 million and $4.1 million, respectively.

The Company granted 2.3 million restricted stock units in the nine months ended September 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 25% of these awards which will vest December 31, 2028. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105% and a risk-free rate of 3.48%.

Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 20% of restricted stock units granted in 2025 which will vest between September 2027 and December 2027.

Note 9. Stockholders’ Equity

At-the-Market Offering Program

In August 2026, the Company entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $100 million. The Company pays the applicable sales agent a commission of up to 3.0% of the gross proceeds from each sale. The Company is not obligated to sell any shares under the agreement. No shares were sold under the agreement during the three months ended September 30, 2026, and $100 million remained available as of that date.

Treasury Stock Retirement

In the third quarter of 2026, the Company retired 10,610,070 shares of common stock held in treasury. The excess of the cost of the treasury shares over their par value was charged to additional paid-in capital and the retirement had no effect on total stockholders’ equity or on the number of shares outstanding.

Note 10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities at September 30, 2026 and December 31, 2025 are summarized as follows:

			September 30, 2026						December 31, 2025
Accrued professional services and other			$	2,455					$	1,342
Accrued compensation and related benefits			2,655						2,028
Other accrued liabilities			636						625
			$	5,746					$	3,995

Note 11. Commitments and Contingencies

Legal Proceedings

On August 28, 2026, two putative securities class action lawsuits captioned John Draftz v. Hyliion Holdings Corp., et al., Case No. 1:26-cv-02369 and Gustavo Olmeta v. Hyliion Holdings Corp., et al., Case No. 1:26-cv-02375, were filed in the United States District Court for the Western District of Texas against the Company, its Chief Executive Officer, and its Chief Financial Officer. The complaints, brought on behalf of a putative class of purchasers of the Company’s securities between May 12, 2026 and June 23, 2026, assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, alleging that the defendants made materially false or misleading statements or omissions concerning, among other things, a non-binding letter of intent with VFG Holdings, LLC, a data center counterparty. On September 11, 2026, the plaintiff

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in the Draftz action voluntarily dismissed the lawsuit without prejudice against all defendants. The Olmeta action remains pending and seeks unspecified compensatory damages, interest, and attorneys’ fees and costs. On October 27, 2026, three individuals filed separate motions each asking to be appointed as lead plaintiff and for their respective counsel to be appointed as lead counsel. The court has not yet appointed a lead plaintiff or lead counsel. Pursuant to a stipulation among the parties and court order, the defendants are not required to respond to the complaint until a time to be agreed following the court’s appointment of lead plaintiff and lead counsel. Additional lawsuits asserting similar allegations may be filed. The Company believes the claims are without merit and intends to defend against them vigorously.

On October 7, 2026, a shareholder derivative action captioned Jonathan Clark v. Thomas Healy, et al., Case No. 1:26-cv-02847, was filed in the United States District Court for the Western District of Texas purportedly on behalf of the Company against certain of its directors and officers, naming the Company as a nominal defendant. The complaint alleges, among other things, breaches of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Securities Exchange Act of 1934. These claims arise principally from the same underlying events described in the securities class actions above, including allegedly misleading statements concerning the Company’s non-binding letter of intent with VFG Holdings, LLC and alleged deficiencies in oversight and internal controls. The complaint also alleges materially misleading statements and omissions in the Company’s 2026 proxy statement concerning risk oversight and internal controls. The plaintiff seeks unspecified damages on behalf of the Company, restitution and disgorgement from the individual defendants, corporate governance reforms and other equitable relief, and attorneys’ and expert fees and expenses. This action is also at an early stage and other lawsuits asserting similar allegations may be filed.

Economic Incentive Agreement

During the quarter ended March 31, 2024, in connection with our operations in Cedar Park, Texas, the Company entered into an agreement with the Cedar Park Economic Development Corporation (“EDC”) that superseded prior agreements, whereby the Company would receive cash grants up to $1.1 million from the EDC at various measurement dates during the term of the agreement contingent upon the Company fulfilling and maintaining certain occupancy, investment, and employment requirements. The requirements must be met on or before specific measurement dates and maintained throughout the term of the agreement, which expires effective December 31, 2029. The Company has received payments to date of $0.4 million which are refundable as applicable performance requirements were not met and are included within accrued expenses and other current liabilities at September 30, 2026. Under the agreement, the EDC has the right to file a security interest to all assets of the Company.

Other Legal Proceedings

In addition to the matters described above, the Company is periodically involved in other legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to product liability, intellectual property, safety and health, employment and other matters. Based on currently available information, the Company does not believe that the outcome of such other legal proceedings, legal actions and claims will have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

Note 12. Net Loss Per Share

The computation of basic and diluted net loss per share for the three and nine months ended September 30, 2026 and 2025 is summarized as follows (in thousands, except share and per share data):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2026						2025						2026						2025
Numerator:
Net loss attributable to common stockholders			$	(11,064)					$	(13,337)					$	(36,729)					$	(44,005)
Denominator:
Weighted average shares outstanding, basic and diluted			178,719,035						175,652,193						178,280,291						175,106,583
Net loss per share, basic and diluted			$	(0.06)					$	(0.08)					$	(0.21)					$	(0.25)

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Potential common shares excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three and nine months ended September 30, 2026 and 2025 are summarized as follows:

			Three and Nine Months Ended September 30,
			2026						2025
Unexercised stock options			168,788						180,475
Unvested restricted stock units			8,878,685						8,143,888
			9,047,473						8,324,363

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Note 13. Related Party Transactions

In August 2026, the Company entered into a consulting agreement with Gustanski Technical Services LLC, an entity controlled by Mary Gustanski, a member of the Company’s Board of Directors. Under the agreement, the director provides technical and strategic advisory services relating to engineering, product commercialization, and the expansion of the Company’s manufacturing capabilities to support increased production. The agreement provides for fees of $25.0 thousand per month and reimbursement of reasonable expenses, has a twelve-month term, and may be terminated by either party upon thirty days’ notice. The fees are in addition to the compensation the director receives for service on the Board of Directors. The agreement was reviewed and approved by the Audit Committee in accordance with the Company’s related person transaction policy. The Company recognized an expense of $25.0 thousand under the agreement during the three months ended September 30, 2026, which is included in research and development and selling, general and administrative expenses in the condensed consolidated statements of operations.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to the “Company,” “Hyliion,” “we,” “our,” or “us” in this report refer to Hyliion Holdings Corp. and its wholly owned subsidiary Hyliion Inc., unless expressly indicated or the context otherwise requires. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report and our audited consolidated financial statements and related notes thereto in our 2025 Annual Report.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, contained in this Form 10-Q are forward-looking statements, including, but not limited to, statements regarding our strategy, prospects, plans, objectives, future operations, future revenue and earnings, projected margins and expenses, markets for our services, potential acquisitions or strategic alliances, financial position, and liquidity and anticipated cash needs and availability. The words “anticipates,” “believes,” “targets,” “should,” “contemplates,” “estimates,” “expects,” “intends,” “may,” “could,” “plans,” “projects,” “will,” “would,” “potential,” “remains,” “continues,” “likely,” or variations of such words and similar expressions or the negatives thereof are intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements represent our management’s expectations as of the date of this filing and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of risks and uncertainties including, but not limited to, those described in the section entitled “Risk Factors” included in our 2025 Annual Report on Form 10-K, this Form 10-Q, and in other documents we file from time to time with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) that disclose risks and uncertainties that may affect our business. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Commission. Furthermore, such forward-looking statements speak only as of the date of this Form 10-Q. Except as required by law, we do not undertake, and expressly disclaim any duty, to publicly update or revise these statements, whether as a result of new information, new developments, or otherwise and even if experience or future changes make it clear that any projected results expressed in this Form 10-Q or future quarterly reports, press releases or company statements will not be realized. Unless specifically indicated otherwise, the forward-looking statements in this Form 10-Q do not reflect the potential impact of any investments, divestitures, mergers, acquisitions or other business combinations that have not been completed as of the date of this filing. In addition, the inclusion of any statement in this Form 10-Q does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” included in our 2025 Annual Report on Form 10-K and in this Form 10-Q. These and other factors could cause our results to differ materially from those expressed in this Form 10-Q.

Overview

Hyliion is committed to creating innovative solutions that enable clean, efficient, and flexible electricity production while contributing positively to the environment in the energy economy. Hyliion’s primary product offering, the KARNO Power Module, is a modular, fully enclosed, fuel-agnostic and fully integrated power generating solution. The KARNO Power Module is powered by the KARNO Core, a heat powered linear generator, to produce electricity with significant improvements in efficiency, emissions and lifecycle cost compared to conventional generation technologies. Hyliion’s KARNO Power Modules enable effective power generation using a wide range of fuel sources, including conventional fuels such as natural gas, propane

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or diesel, waste fuels such as landfill gas, wellhead gas, and zero carbon fuels such as renewable hydrogen and ammonia. Hyliion is initially targeting the data center, defense, commercial, and industrial sectors with a locally-deployable generator designed to meet a wide range of power generation needs. The Company intends to scale up its KARNO Power Module solution to address larger utility-scale power needs and plans to develop future variants for industrial waste heat, nuclear, household use and e-mobility applications such as vehicles and marine vessels. Additionally, the KARNO Power Module technology is well-suited to provide combined heat and power in various stationary applications.

KARNO Power Modules

The KARNO technology emerged out of General Electric’s long-running R&D investments in aerospace and metal additive manufacturing across multiple industries and in areas such as generator thermal and performance design. Originally envisioned as a range-extending power source for our Hypertruck powertrain system, we now intend to commercialize the KARNO Power Module as a standalone product targeting power generation, defense, and e-mobility markets, as well as related R&D services that we have undertaken pursuant to contracts with the United States government. We believe that the unique capabilities of the KARNO Power Module will make it competitive in the market for distributed power systems, competing favorably against conventional generating systems and new alternative power systems such as fuel cells and other linear generators. The KARNO Power Module and KARNO Core technology, including the technology that we acquired from General Electric, and the technology developed by Hyliion subsequent to the acquisition, is protected by numerous patents and trademarks which we believe provide us with extensive and lasting protection for our intellectual property.

The Science of the KARNO Power Module

The KARNO Power Module is distinguished from conventional generating systems that rely on reciprocating internal combustion engines or gas turbines to drive a rotating shaft. Instead, the KARNO Core that powers the KARNO Power Module uses an innovative thermal converter to power a linear electricity generating system. The KARNO Core produces linear motion from temperature differences within the system. Heat is generated through flameless oxidation of fuels, such as natural gas, hydrogen, or propane. The thermal energy heats helium gas enclosed within a sealed cylinder, causing it to expand and drive linear motion in a connected piston-shaft system. The shaft includes a sequence of permanent magnets that pass through electrical coils as the system oscillates, generating electricity. Subsequently, the countermotion generated by a piston at the opposite end of the shaft flows the helium gas to the cold side of a piston in an adjacent shaft, where excess heat is efficiently dissipated. This cyclical process continues, resulting in a continuous source of electrical power as long as heat is supplied to the KARNO Core.

Linear generators present several advantages over conventional generators, including higher thermal efficiency, lower emissions and reduced maintenance, benefits that are partly attributable to the generator’s simplified design with few moving parts. Additionally, they exhibit high power density and higher efficiency by circumventing the mechanical losses linked to rotating components such as bearings and gears while producing less noise and vibration. In the case of the KARNO Core, each shaft relies on a single moving part and utilizes a pressurized helium bearing system in place of oil-based lubricants.

Thermal converters offer the advantages of fuel flexibility and high operating efficiency. The KARNO Core stands out for its ability to maximize heat transfer between components and working fluids. Enabled by advances in additive manufacturing systems, parts are designed with many intricate flow channels for the movement of heat, coolant, helium and exhaust gases such that contact surface areas for heat transfer are maximized. This enables the KARNO Power Module to achieve high levels of efficiency.

The KARNO Power Module is expected to surpass the efficiency of many conventional generating systems when employing various fuel sources and its high efficiency is expected to remain consistent across a broad range of output power levels. In comparison, fuel cells reach peak efficiency at low power levels but experience diminishing efficiency as output increases towards full power. Internal combustion engines typically achieve peak efficiency within a limited operational output range and may suffer increased wear at low power levels. The KARNO Power Module offers a distinct advantage in power adjustment by modulating the rate of heat introduction, enabling seamless power adjustments without compromising efficiency.

We anticipate that the KARNO Power Module will initially achieve an electrical generating efficiency of approximately 45%, calculated by considering the usable power output in relation to the energy from the fuel source. We believe that ongoing engineering improvements are expected to increase the KARNO Power Module’s efficiency to 50% or higher in future design iterations. High efficiency is expected to remain relatively consistent across a wide range of output power levels, spanning from tens of kilowatts to multiple megawatts. In contrast, internal combustion diesel or natural gas generators typically operate within an efficiency range of 25% to 40% over a similar power spectrum, while the U.S. electrical power grid is estimated to operate at an efficiency between 33% and 40%. Notably, best-in-class grid-level combined cycle gas turbine powerplants can

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obtain efficiencies above 50% but often incur transmission and distribution losses between 5% and 10% which the KARNO Power Module is expected to circumvent by being located near the point of power consumption.

Conventional generators emit pollutants because of incomplete combustion of fuel-air mixtures and sub-optimal operating conditions, with the formation of nitrous-oxide (“NOx”) and carbon monoxide (“CO”) compounds being particularly prominent. Unlike conventional generators, the KARNO Power Module is designed for continuous flameless oxidation of the fuel at lower temperatures and extended reaction times. This is achieved partly through the recirculation of exhaust gases, which serves to prolong oxidation, and by pre-heating incoming air. As a result, the KARNO Power Module is anticipated to achieve ultra-low levels of emissions, with NOx and CO emissions expected to be reduced by over 95% compared to best-in-class diesel or natural gas engines and meeting South Coast Air Quality Management District (“SCAQMD”) Rule 1110.3 emission standards without the need for aftertreatment.

One of the notable advantages of the KARNO Power Module in comparison to traditional generating units is the expected reduction in maintenance requirements and cost. Conventional generators typically incur periodic and usage-based maintenance expense that can range between 5% to 20% of their total operating cost throughout their lifespan, influenced by factors such as utilization and operating parameters. The KARNO Power Module’s primary advantage arises from having only a single moving part per shaft (4 shafts per 200 kW KARNO Core), which glides on low friction helium bearings. This innovative design mitigates efficiency losses attributed to friction, enhancing the system’s operational longevity and eliminating the need for oil-based lubricants.

The KARNO Power Module derives advantages from its expected capability to operate across a diverse spectrum of over 20 available fuel sources and fuel blends. These include natural gas, propane, gasoline, jet fuel, and alternative fuels like biodiesel, hydrogen and ammonia. Moreover, the KARNO Power Module can seamlessly transition between these fuels or fuel blends. This versatility enables a single KARNO Power Module to adapt to different use cases. For example, the KARNO Power Module may operate on natural gas for prime power generation when a pipeline connection is available, on waste gas near a landfill or dairy farm, and switch to locally stored diesel fuel for continuous generation if its primary fuel supply is interrupted. Furthermore, we expect that as hydrogen becomes more widely available, the KARNO Power Module will be able to adapt to this cleaner fuel. As the energy landscape evolves, we believe that the KARNO Power Module’s fuel-agnostic nature positions it as a flexible solution to electricity generation needs, enhancing energy security.

Benefits of the KARNO Power Module Versus Conventional Competitors

We believe the versatility and operating characteristics of the KARNO Power Module make it an effective system for a variety of conventional and emerging electricity generating applications. Key attributes of the KARNO Power Module distinguish it from its conventional generator counterparts:

•Efficiency: The anticipated operating efficiency of the KARNO Power Module could result in lower marginal cost of electricity generation versus conventional generating systems and, in some markets, grid power.

•Low Maintenance: With only a single moving part per shaft, the simplicity of the KARNO Power Module is expected to reduce both periodic maintenance expenses and overhaul costs and deliver longer uptime.

•Fuel Agnostic: While many traditional generators operate on a single fuel source or require system modification to achieve fuel flexibility, the KARNO Power Module is designed to be fuel-agnostic and can switch between fuel choices during operation with few or no modifications.

•Low Noise and Vibration: Unlike conventional generators, the KARNO Power Module operates without internal combustion, resulting in a significantly lower noise level under normal operating conditions of approximately 67 decibels at six feet.

•High Power Density: The unique architecture and features of the KARNO Power Module that are enabled by advances in additive manufacturing are expected to enable the KARNO Power Module to achieve a high power density relative to competing power generation technologies.

•Modularity: The DC output of the KARNO Power Module allows multiple KARNO Power Modules to be connected on a single bus to achieve higher power outputs without impacting other performance characteristics.

Market Opportunity

As economies and industries evolve, the demand for electricity is accelerating, driven by the electrification of society, urbanization, increasing industrial output and technological growth. Electricity powers factories, drives the digital revolution, supports healthcare, education, and financial services, and serves as the foundation of economic productivity. Additional drivers include the projected widespread growth of artificial intelligence, automation, expanding data centers and the electrification of

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transportation. However, as global energy demand rises, traditional centralized power generation and distribution models face mounting challenges.

The aging of grid transmission infrastructure is creating new challenges as operators work to balance the availability of affordable, reliable power with maintaining grid stability and integrating new sources of clean power generation. The addition of intermittent renewable power generation further complicates grid management, emphasizing the need for resilient and adaptive electricity systems. Distributed power generation offers a solution by decentralizing electricity production, reducing transmission needs and delivering power closer to points of consumption.

We believe that Hyliion’s KARNO Power Module is an innovative solution in the emerging distributed generation space, offering a reliable power generator that combines high efficiency, fuel flexibility, and low emissions. Designed for both stationary and mobile applications, the KARNO Power Module addresses many of the challenges that have traditionally limited the widespread adoption of onsite power solutions. These include high operating costs, reliability issues, complex maintenance, noise pollution, space constraints, and dependency on limited fuel sources.

Hyliion’s initial KARNO Power Module product is a 200 kW system that is power-dense and easy to deploy. It features a compact, space-efficient rectangular design with a footprint of approximately 25 square feet, housing a single four-shaft linear generating unit and integrated balance-of-plant components. The KARNO Power Module supports fuel switching during operation without power loss, while flexible deployment options allow it to operate in grid-following, grid-forming, or islanded configurations (when paired with an external inverter), making it suitable for a wide range of applications. Additionally, the KARNO Power Module features real-time monitoring of over 1,000 operational parameters through its KARNO Cloud® platform, enabling proactive diagnostics, predictive maintenance, and performance optimization, ensuring maximum uptime. With cloud connectivity, users gain instant access to remote monitoring and control features, providing insights into system performance, fuel efficiency, and system health.

Beyond the 200 kW variant, Hyliion is advancing the development of larger Multi-MW (2 MW+) KARNO systems, which integrate multiple 200 kW KARNO Core units operating in tandem in a compact containerized footprint. The Multi-MW KARNO systems will target key market segments such as data centers and industrial prime power applications. We are also developing a modular 800 kW system consisting of four KARNO Core units that is planned to be delivered to the U.S. Navy in early 2027 as part of our project with ONR. We believe that this modular and scalable approach enables seamless power expansion while maintaining high efficiency and reliability. By utilizing multiple 200 kW generating blocks, the system offers built-in redundancy and the flexibility for customers to customize capacity to match their power needs.

Hyliion also plans to expand the KARNO product line over time with both larger and smaller capacity versions, adjusting power levels by varying the number of generator shafts and component sizes. Initially, the KARNO Power Module will target power applications ranging from 200 kW to the low megawatt range, addressing a broad spectrum of distributed generation needs. With its ability to deliver reliable, fuel-flexible, and highly efficient power, the KARNO Power Module is uniquely positioned to serve a variety of key market segments, including:

•Data Centers: As cloud computing, artificial intelligence, machine learning, and edge computing continue to expand, data centers are projected to consume an increasing share of global energy demand. Onsite power generation is an emerging solution for new data center developments, although conventional generating technologies often face local resistance due to noise or emissions concerns. Hyliion’s Multi-MW KARNO system is being designed to meet the needs of data center developers by providing a scalable, fuel-flexible onsite power solution with significantly reduced levels of noise and emissions than conventional diesel or natural gas generators. Capable of operating on more than 20 different fuels, the KARNO Power Module enables data center developers to minimize onsite generation infrastructure. Its ability to easily transition between pipeline-supplied fuels, such as hydrogen or natural gas, and onsite stored fuels, like methanol or diesel, eliminates the need for separate backup generation systems, reducing capital and operational costs. Additionally, as data center rack power densities rise to support increased AI workloads, Hyliion’s KARNO Power Module’s native 800V DC architecture simplifies power system design and enhances site resiliency.

•Commercial & Industrial: As electricity demand increases and grid infrastructure struggles, microgrids and onsite prime power solutions are becoming essential for industries facing high consumption charges, peak demand pricing, and grid reliability concerns. Businesses, industrial sites, and remote facilities increasingly seek localized power generation to mitigate rising energy costs, monetize assets, and improve operational resilience. With relatively high efficiency, fuel adaptability and low maintenance needs, KARNO Power Modules provide a cost-effective alternative to grid electricity, allowing businesses to optimize energy costs while ensuring uninterrupted operations. Its ability to integrate with energy storage and renewable sources is expected to enable installation of effective hybrid energy

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solutions. Additionally, the KARNO Power Module’s cogeneration capabilities may allow industries to utilize both electricity and thermal energy, improving overall system efficiency and recovering usable waste heat.

•Defense: Defense organizations around the world are pursuing advanced energy solutions to support modern, rapidly evolving, distributed operations across land, sea, air, and autonomous platforms. Hyliion’s fuel-agnostic KARNO platform is engineered to meet these changing mission profiles with a combination of versatility, efficiency, and durability. Designed to operate on over 20 fuels, including JP-8 and its variants, diesel, ammonia, and hydrogen, the KARNO system enhances logistical adaptability across diverse applications. Its low acoustic and thermal signatures support stealth and operational security, while its high fuel efficiency enables longer runtimes and reduced refueling needs. Built with minimal moving parts and robust architecture, the KARNO technology delivers extended maintenance intervals and high system uptime under challenging conditions. Whether deployed in forward operating bases, shipboard power systems, microgrids, or unmanned autonomous platforms, we expect that the scalable KARNO Power Module can deliver reliable, next-generation power for the strategic and tactical demands of global defense operations.

•Vehicle Charging: The adoption of electric vehicles (“EVs”) is placing increasing strain on grid capacity, a challenge expected to grow with the introduction of commercial EVs, including buses, delivery vans, and heavy-duty trucks. These vehicles require substantial power for charging, intensifying grid demands. While Direct Current (“DC”) fast charging technology and infrastructure are evolving to meet this need, many commercial operators cite limited grid capacity and high electricity costs as barriers to scaling their EV fleets. We believe the KARNO Power Module offers an advantaged solution for commercial EV charging. Its native DC output integrates with DC fast charging infrastructure, eliminating power losses associated with conversion. Additionally, the KARNO Power Module’s compact footprint and quiet operation will make it suitable for deployment in space-constrained locations, such as urban charging hubs, fleet depots, and remote charging stations where grid access is limited or expensive. When paired with onsite energy storage systems and renewable energy sources like solar or wind, KARNO Power Modules can enable resilient and sustainable microgrids for EV charging.

•Biogas (Landfill, Wastewater & Digester Gas): Biogas sourced from landfills, wastewater treatment plants, and dairy digesters represents a growing market as industries and municipalities seek to convert methane-rich waste gases into electricity and prevent methane, a potent greenhouse gas, from escaping into the environment or being flared. Current power generation technologies often struggle to process biogas due to contaminants such as hydrogen sulfide and siloxanes, as well as moisture and fluctuating gas compositions, necessitating preconditioning and purification before the fuel can be utilized. We believe the KARNO Power Module’s advanced architecture and corrosion-resistant materials enable it to operate with minimal gas preconditioning, making it a cost-effective, high-performance solution for converting waste gas into reliable power.

•Oil & Gas and Syngas: The oil and gas industry is electrifying due to growing power needs across drilling, production, refining, and transportation operations. However, wellhead and flare gas, byproducts of oil and gas extraction, are often wasted due to insufficient pipeline capacity or poor gas quality, leading to lost energy and increased emissions. The KARNO Power Module enables conversion of waste gas into usable electricity with minimal pre-treatment, enabling onsite power generation and grid integration. We believe the KARNO Power Module’s fuel flexibility, use of corrosion-resistant materials, and ability to handle variable fuel quality make it a suitable technology of choice for oilfield electrification while significantly reducing emissions. Additionally, the KARNO Power Module’s fuel-agnostic capability allows it to generate clean electricity from hydrogen-rich syngas, a valuable byproduct of gasification or industrial processes.

•Mobility: The KARNO Power Module is designed to be particularly suitable for applications that require a source of electric power in mobile applications such as electric vehicles, railroad locomotives, remote power generation and marine vessels. Compared to conventional power sources, the KARNO Power Module is expected to offer higher efficiency, lower emissions, quieter operation, reduced maintenance needs and the flexibility to operate on a wider range of fuel sources. Additionally, the KARNO Power Module’s high power density, modularity and native DC power output offer an added advantage where space constraints and integration are considerations.

•Backup Power: The market for local backup power generators is well established and positioned to grow due to decreasing grid reliability, the increasing share of intermittent renewable energy sources, rising extreme weather events, and the need for uninterrupted power. Also, the grid balancing and servicing market is expanding as utilities and independent power producers seek fast-ramping, distributed generation assets to balance supply and demand fluctuations. Innovative business models such as Resiliency-as-a-Service and Virtual Power Plants have emerged to leverage distributed generation assets for grid resilience. With growing concerns over emissions from internal combustion engine-powered generators in the backup power market, we believe the KARNO Power Module presents

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an opportunity to provide solutions for end users that desire a lower emissions profile and in the event emissions regulations are further tightened.

•Waste Heat: In hard-to-decarbonize industrial sectors such as cement, glass, and primary metals production, vast amounts of high-grade waste heat (1000°C+) are released during manufacturing processes. Traditionally, much of this thermal energy is lost due to limited efficient recovery solutions. Since the KARNO Power Module uses heat as its primary energy source to generate electricity, high-temperature industrial waste heat is expected to be able to be directly utilized to produce clean electricity, enabling industries to recover wasted energy, improve efficiency, and reduce emissions.

KARNO Power Module Development

Research and Development

Most of our current activities are focused on the R&D of our KARNO Power Module, including testing and validation to ensure that our products meet design specifications and customer requirements. These activities primarily take place at our facility in Cincinnati, Ohio and at our headquarters in Cedar Park, Texas. Our R&D is primarily focused on:

•development of the KARNO Core and KARNO Power Module including testing and validation;

•integration of the KARNO Core and KARNO Power Module technology into various applications;

•accelerated lifetime testing to improve reliability, maintainability and system-level robustness;

•development of battery systems that can be used as a starter power source for the KARNO Power Module or as a load buffer solution;

•data analytics; and

•alternative products for existing and in-development components and technology.

Development History and Progress

Since acquiring the KARNO technology from GE in September 2022, Hyliion has made significant investments in R&D to commercialize the 200 kW KARNO Power Module while simultaneously developing an 800 kW system for the U.S. Navy. This 800 kW platform is also intended to serve as the foundational building block for future multi megawatt KARNO systems targeting data centers and other large power applications.

Early development efforts focused on a KARNO Core that was designed for 125kW of power production, which was operated at our Ohio facility and served as a platform for extensive testing and technology advancement. Through this system, we validated the ability of the KARNO Core's fuel oxidation system to successfully operate on gaseous fuel. Testing also demonstrated very low levels of pollutant emissions. The 125 kW system enabled the development and validation of key components incorporated into the higher power 200 kW KARNO Power Module, including improved helium gas bearings for greater durability, a magnetic encoder for precise shaft position detection, optimized printed components to improve power, efficiency and manufacturing speed, and a larger Hyliion designed linear electric motor.

The 200 kW KARNO Power Module rating represents the electrical output delivered by the KARNO Core to the DC bus under standard-day conditions at sea level, consistent with industry practices for rating power generation equipment. This rating excludes power consumed by auxiliary components, such as fans and blowers, and actual net power output will vary based on customer configuration and environmental conditions, including ambient temperature and altitude. The use of standard-day conditions provides a consistent basis for comparing KARNO performance with alternative power generation technologies. Initial customer deployments are expected to operate below the 200 kW rating as we continue to implement component improvements intended to achieve the targeted power output which we expect to demonstrate by the end of 2026.

We have completed the design and sourcing of initial components for the balance of plant systems supporting the 200 kW KARNO Core, including the system enclosure, cooling, pressure control, fuel, battery, electrical, inlet air and exhaust systems. Development activities also include control software, safety systems, the human to machine interface and integration of these components into a complete generating system.

In 2025, key R&D activities included enhancements to the regenerator, a critical printed component that functions as a thermal capacitor by storing heat as helium cycles between hot and cold temperature regions within the system. Early testing identified opportunities to improve the regenerator’s heat storage and transfer capabilities, leading to a redesigned architecture that demonstrated improved performance in subsequent testing. Additional design enhancements improved thermal insulation of

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other system components to reduce heat losses. Further optimization of the regenerator and thermal insulation remains an important development objective as we work to increase power output and overall system efficiency.

Early Customer Deployments

In 2025, we delivered two early adopter KARNO Power Modules to the U.S. Navy, along with two additional units for internal testing and Underwriters Laboratories (“UL”) certification. The Navy units previously underwent testing at our Ohio facility under our R&D contract with the Office of Naval Research (“ONR”) and performed in line with expectations. We also completed development work enabling these Power Modules to operate on liquid diesel fuel, a key requirement for shipboard applications, and to seamlessly switch between liquid and gaseous fuels during operation.

In 2026, our development activities focused on testing and validating KARNO Power Module operation and software controls while producing additional units for early adopter customers. Testing of engineering development and customer units has been conducted at our Ohio facility, allowing engineers to closely monitor system performance and rapidly incorporate design enhancements intended to improve reliability.

During the second half of 2026, we discovered that a feature in a key printed component, known as the reactor, was susceptible to fatiguing due to thermal stresses experienced after extended run time at high power levels, resulting in a unit malfunction. This issue affects a more recent version of the reactor but has not been observed in earlier designs. We have since redesigned the reactor to address the issue and are printing updated parts that we believe will eliminate the issue. In the interim, we are continuing production of KARNO Cores for initial customer deployments using earlier reactor designs that have not exhibited this issue.

The need to retrofit affected units will delay completion of our early adopter customer deliveries beyond our previous 2026 target. We now expect to complete and deliver the approximately 10 early adopter units between late 2026 and early 2027. We continue to expect the first customer deployment unit to be moved to the customer’s site before the end of 2026. This unit and other early adopter units deployed in 2027 will then undergo further testing and validation while operating in their intended commercial environments. These deployments, together with our ongoing development efforts, are expected to validate critical design specifications, including projected operating life, maintenance requirements and durability.

Earlier in 2026, we successfully completed the nonrecurring portion of UL certification testing for the KARNO Power Module, a key milestone required before delivering units to customer sites. Testing included the linear electric motor, battery system and complete Power Module. Individual production units will continue to undergo final operational testing before receiving final UL certification until completion of facility level certification, which is expected in 2027.

Certain stated performance capabilities and product features may not be available at initial commercialization of the KARNO Power Module. Initial customer deployments will be configured to operate on a single fuel source, with future product iterations expected to support a broader range of gaseous fuels and ultimately more than 20 identified fuel types, including both gaseous and liquid fuels. We expect customers to specify their primary fuel requirements, with the option to configure future KARNO Power Modules to operate on additional fuels.

Recent Testing and Engineering Activities

Recent development accomplishments include the successful demonstration of uninterrupted operation of the reactor while switching among hydrogen, natural gas and diesel fuels. This validates the system's fuel agnostic architecture, which supports both gaseous and liquid fuels within a single integrated system rather than through separate hardware configurations. This reactor design will go through validation and then be integrated into the KARNO Core.

We also successfully demonstrated the coordinated operation of multiple Power Modules as a single generating system. During testing, two 200 kW units automatically shared changing electrical loads while maintaining stable power delivery. This capability is important for applications with variable electrical demand and supports development of a standardized 800 kW building block for future multi megawatt power plant configurations.

Development efforts also continue to focus on increasing generator power output and efficiency toward design specifications. These activities include further optimization of the regenerator to increase thermal storage capacity during operating cycles and improvements to thermal insulation to reduce heat losses. Finally, during the fourth quarter of 2026, we expect to begin extended durability testing of the complete KARNO Power Module using diesel as the primary fuel source.

Additive Manufacturing Improvements

Another major R&D objective in 2026 has been improving the throughput of our additive manufacturing fleet. Following the acquisition of approximately two dozen additive printers over the past two years, we have focused on increasing printer speed and throughput while optimizing the design of printed Power Module components for manufacturability and performance.

We have identified machine enhancements that we believe can increase print speeds by a factor of two to three, depending on the specific part and printer model. Based on these expected improvements, together with anticipated advances in next

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generation additive manufacturing systems expected to become available in the coming quarters, we currently expect to accelerate planned purchases of additional printers from 2028 into 2027. Additional testing and validation remain necessary before these improvements can be confirmed, but initial results have been encouraging.

Research and Development Services

We provide R&D services to third parties, including the ONR. In September 2024, Hyliion was awarded a cost-plus-fixed-fee contract of up to $16.0 million by the ONR to assess the suitability of the KARNO Power Module for Navy vessels and stationary power applications. In September 2026, the contract was modified to increase its value to $21.6 million to fund completion of the remaining deliverables, including an option of up to $2.5 million that the ONR may exercise in the future. The contract supports ONR’s objective of leveraging advanced technology to reduce its carbon footprint while enhancing operating capabilities.

In 2025, we delivered two KARNO Cores under this contract and an additional core in 2026, all of which we have been testing at our R&D facility in Cincinnati. In early 2027, we expect to deliver a four-core 800 kW KARNO Power Module system, which aligns with the Navy's schedule. The U.S. Navy has identified its USX-1 Defiant vessel as the platform for KARNO Core sea trials, supporting both ship propulsion and auxiliary power. We also plan to expand testing to include long duration operation, diesel fuel integration, simulation of ship motion and the ability of the system to operate in extreme temperature environments. Upon successful validation and demonstration, the KARNO Power Module could be used in future Navy platforms and for stationary power applications.

In July 2026, the Company was awarded a cost-plus-fixed-fee contract of up to $41.7 million by the ONR in support of the High Efficiency/Low Maintenance Ultra Reliable (“HELMUR”) Megawatt Scale Power Generation Units program. Under the 36-month contract, the Company will design, develop, construct, test and deliver 2-megawatt and 3-megawatt KARNO power generation systems to locations identified by ONR. The contract also includes work to advance the Company’s core technology, develop alternative core components to enhance system capabilities and reduce supply-chain risk associated with magnet availability, and further develop additive manufacturing processes. Work under the contract will be performed primarily in Cedar Park, Texas and is expected to be completed by July 2029. Funding for the contract was obligated at the time of award using fiscal year 2025 and 2026 Navy research, development, test and evaluation appropriations.

We expect to continue to provide R&D services under existing contracts and anticipate entering into additional R&D agreements in 2026 and 2027 with ONR and other government customers. These customers engage Hyliion to explore and validate KARNO technology for their specific applications and operating requirements. Areas of interest include the system’s low-emissions flameless oxidation system, high power output, compact configuration and ability to operate on multiple fuels. R&D services may also include testing under harsh environmental conditions, evaluating mobile applications and validating different power configurations to determine their suitability for customer requirements.

Key Factors Affecting Operating Results

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including but not limited to economic uncertainties, supply chain disruptions, inflation, high interest rates, and other risks discussed below and referenced in Part II, Item 1A “Risk Factors.”

Commercialization of KARNO Power Module

Our focus remains on the continued development and testing of our fuel-agnostic KARNO Power Module, together with the deployment of initial units with early adopter customers. We are targeting commercialization of the 200 kW KARNO Power Module following completion of these initial deployments and once sufficient testing and operating experience has been obtained to validate reliable operation and achievement of our design criteria. We anticipate that a substantial portion of our capital resources and efforts in the near future will be focused on these activities. The amount and timing of our future funding requirements will depend on many factors, including but not limited to the pace of completing initial KARNO Power Module testing and validation, the timing of KARNO Power Module commercialization, the pace at which we invest in KARNO Core additive printing capacity, our plans for manufacturing KARNO Power Module components (whether in-house or through outsourcing to third parties), the range of product offerings we plan to bring to market and external market factors beyond our control.

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Key Components of Statements of Operations

Revenue

We generate revenue by providing R&D services under contracts with third parties, including the U.S. government. Additionally, we expect to begin generating product revenue following the commercialization of our KARNO Power Module.

Cost of Revenue

Cost of revenue includes costs associated with R&D services revenue, such as direct costs, including labor, materials and equipment, and applicable overhead costs.

Research and Development Expense

R&D expenses consist primarily of costs incurred for the discovery and development of our KARNO Power Module, which include:

•personnel-related expenses including salaries, benefits, travel and share-based compensation, for personnel performing R&D activities;

•fees paid to third parties such as contractors for outsourced engineering services and to consultants;

•expenses related to components for development and testing, materials, supplies and other third-party services;

•depreciation for equipment used in R&D activities; and

•allocation of general overhead costs.

We expect to continue to invest in R&D activities to achieve operational and commercial goals.

Selling, General and Administrative Expense

Selling, general and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, information technology, sales, marketing and other administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, software licenses, depreciation, amortization, travel, sales and marketing costs. Personnel-related expenses consist of salaries, benefits and share-based compensation. Factors that also affect selling, general and administrative expense include the total number of employees, costs incurred as a result of operating as a public company, including compliance with the rules and regulations of the U.S. Securities and Exchange Commission, legal, audit, insurance, investor relations activities and other administrative and professional services.

Exit and Termination Costs

Exit and termination costs consist primarily of recoveries from resale of assets.

Other Income

Other income currently consists primarily of interest income earned on our investments.

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Results of Operations

Comparison of Three Months Ended September 30, 2026 to Three Months Ended September 30, 2025

Our results of operations for the three months ended September 30, 2026 (the “current quarter”) and 2025 on a consolidated basis are summarized as follows (in thousands, except share and per share data):

			Three Months Ended September 30,
			2026						2025						$ Change						% Change
Revenues
Research and development services			$	7,452					$	759					$	6,693					881.8		%
Total revenues			7,452						759						6,693						881.8		%
Cost of revenues
Research and development services			6,900						806						6,094						756.1		%
Total cost of revenues			6,900						806						6,094						756.1		%
Gross profit (loss)			552						(47)						599						N/A
Operating expenses
Research and development			8,699						10,136						(1,437)						(14.2)		%
Selling, general and administrative expenses			4,291						5,184						(893)						(17.2)		%
Exit and termination (benefits) costs			—						(70)						70						(100.0)		%
Total operating expenses			12,990						15,250						(2,260)						(14.8)		%
Loss from operations			(12,438)						(15,297)						2,859						(18.7)		%
Interest income			1,374						1,960						(586)						(29.9)		%
Net loss			$	(11,064)					$	(13,337)					$	2,273					(17.0)		%
Net loss per share, basic and diluted			$	(0.06)					$	(0.08)					$	0.02					(25.0)		%
Weighted-average shares outstanding, basic and diluted			178,719,035						175,652,193						3,066,842						1.7		%

Revenue and Cost of Revenues

Revenue for R&D services increased $6.7 million and associated cost of revenues increased $6.1 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.

In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.

Research and Development

R&D expenses decreased $1.4 million due to significant efforts toward performance of our contracts with the ONR.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses decreased $0.9 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.

Exit and Termination (Benefits) Costs

Exit and termination benefits decreased by $0.1 million as a result of the adoption of the Plan and items discussed in Note 2, “Disposals” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, including recoveries from assets sold.

Interest Income

Interest income decreased $0.6 million primarily due to the decline in our investment balance.

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Comparison of Nine Months Ended September 30, 2026 to Nine Months Ended September 30, 2025

The following table summarizes our results of operations on a consolidated basis for the nine months ended September 30, 2026 (the “current nine months”) and 2025 (in thousands, except share and per share data):

			Nine Months Ended September 30,
			2026						2025						$ Change						% Change
Revenues
Research and development services			$	15,228					$	2,763					$	12,465					451.1		%
Total revenues			15,228						2,763						12,465						451.1		%
Cost of revenues
Research and development services			14,100						2,667						11,433						428.7		%
Total cost of revenues			14,100						2,667						11,433						428.7		%
Gross profit			1,128						96						1,032						1,075.0		%
Operating expenses
Research and development			25,864						32,503						(6,639)						(20.4)		%
Selling, general and administrative expenses			16,899						17,228						(329)						(1.9)		%
Exit and termination (benefits) costs			(672)						1,007						(1,679)						N/A
Total operating expenses			42,091						50,738						(8,647)						(17.0)		%
Loss from operations			(40,963)						(50,642)						9,679						(19.1)		%
Interest income			4,234						6,637						(2,403)						(36.2)		%
Net loss			$	(36,729)					$	(44,005)					$	7,276					(16.5)		%
Net loss per share, basic and diluted			$	(0.21)					$	(0.25)					$	0.04					(16.0)		%
Weighted-average shares outstanding, basic and diluted			178,280,291						175,106,583						3,173,708						1.8		%

Revenue and Cost of Revenues

Revenue for R&D services increased $12.5 million and associated cost of revenues increased $11.4 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.

In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.

Research and Development

R&D expenses decreased $6.6 million due to significant efforts toward performance of our contracts with the ONR, including the production of capitalized inventory that may either be utilized for future revenue generation under these contracts or for R&D activities.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses decreased $0.3 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.

Exit and Termination (Benefits) Costs

Exit and termination costs decreased by $1.7 million as a result of the adoption of the Plan and items discussed in Note 2, “Disposals” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, including recoveries from assets sold.

Interest Income

Interest income decreased $2.4 million primarily due to the decline in our investment balance.

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Liquidity and Capital Resources

At September 30, 2026, our total current assets were $67.3 million, consisting primarily of cash and cash equivalents of $16.7 million, short-term investments of $37.9 million, accounts receivable of $6.6 million and prepaid expenses of $5.3 million. Our total current liabilities were $8.6 million and were primarily comprised of accounts payable, accrued expenses and operating lease liabilities. We also had $66.7 million of investments in longer-term liquid securities which we maintain to generate higher income on capital that we do not expect to spend in the next 12 months.

We believe the credit quality and liquidity of our investment portfolio at September 30, 2026 is strong and will provide sufficient liquidity to satisfy operating requirements, working capital purposes and strategic initiatives. The unrealized gains and losses of the portfolio may remain volatile as changes in the general interest rate environment and supply and demand fluctuations of the securities within our portfolio impact daily market valuations. To mitigate the risk associated with this market volatility, we deploy a relatively conservative investment strategy focused on capital preservation and liquidity whereby no investment security may have a final maturity of more than 36 months from the date of acquisition or a weighted average maturity exceeding 18 months. Eligible investments under the Company’s investment policy bearing a minimum credit rating of A1, A-1, F1 or higher for short-term investments and A2, A, or higher for longer-term investments include money market funds, commercial paper, certificates of deposit and municipal securities. Additionally, all of our debt securities are classified as held-to-maturity as we have the intent and ability to hold these investment securities to maturity, which minimizes any realized losses that we would recognize prior to maturity. However, even with this approach we may incur investment losses as a result of unusual or unpredictable market developments, and we may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline further due to unpredictable market developments. In addition, these unusual and unpredictable market developments may also create liquidity challenges for certain of the assets in our investment portfolio.

Based on our past performance, we believe our current and long-term assets will be sufficient to continue to execute on our business strategy and meet our capital requirements for the next twelve months. Our primary short-term cash needs are costs associated with KARNO Power Module development, building our initial deployment units and capital investments for additive printer acquisitions and other assets. Longer term, our capital needs will be determined by our go-to-market strategy as well as governmental R&D, which may include development of our own KARNO Power Module manufacturing capacity or outsourcing this work to third parties or business partners. We have up to $6.1 million remaining authorized for repurchases under our $20 million share repurchase program but have currently paused any additional repurchases.

Our existing R&D contracts with the ONR are expected to provide a significant source of revenue and cash inflows to support our ongoing development activities. To date, we have been awarded ONR cost-plus-fixed-fee contracts totaling $67.1 million, of which approximately $45.5 million remained available as of September 30, 2026. We also anticipate receiving additional R&D contract awards totaling approximately $8 million before the end of 2026.

In August 2026, we entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which we may sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $100 million. We are not obligated to sell any shares under the program, and any sales will depend on market conditions, our capital needs and other factors. Sales under the program, if any, would provide an additional source of liquidity to accelerate investments in assets needed for growth following commercialization, primarily additive printing machines and related assets. Sales of shares under the program, if any, may cause dilution to stockholders. For additional information, see “At-the-Market Offering Program” in Note 9 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

Based on current projections of operating expenses, capital spending, working capital growth and historical share repurchases, we expect to have approximately $115 million to $120 million in cash, short-term and long-term investments remaining on our balance sheet at the end of 2026. This projection does not assume any sales of common stock under our at-the-market offering program, and we do not plan to proceed with the equipment financing arrangement described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We may evaluate equipment financing or other debt arrangements in the future.

We expect to continue to incur net losses in the short term as we execute on our strategic initiatives by completing the development and commercialization of the KARNO Power Module with customer deployments anticipated to continue throughout 2026. However, actual results could vary materially and adversely as a result of a number of factors including, but not limited to, those discussed in Part II, Item 1A. “Risk Factors.”

The amount and timing of our future funding requirements will depend on many factors, including the scope and results of our R&D efforts, the breadth of product offerings we plan to commercialize, the growth of sales, working capital needs, and our long-term manufacturing plan for the KARNO Power Module, including the pace of investments in additive manufacturing assets and the methods of financing those investments, as well as factors that are outside of our control. We regularly evaluate our funding needs and sources of capital and may seek external funding in the appropriate circumstances. While we believe that we have sufficient capital to support the anticipated commercialization of the KARNO Power Module, we expect to seek

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additional capital in the future to accelerate investments in production capacity. Potential sources include sales under our at-the-market program, other financing arrangements, and direct investments by customers in production assets dedicated to producing KARNO Power Modules for their purchase. Any such financing may include equity or debt securities and may not be available on acceptable terms, or at all. With our current cash and investments, we believe we are well positioned to be deliberate and opportunistic in determining the timing and structure of any additional capital raise.

During the periods presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

Cash Flows

Net cash, cash equivalents and restricted cash provided by or used in operating activities, investing activities and financing activities for the nine months ended September 30, 2026 and 2025 is summarized as follows (in thousands):

			Nine Months Ended September 30,
			2026						2025
Cash from operating activities			$	(30,278)					$	(34,691)
Cash from investing activities			24,401						43,930
Cash from financing activities			(355)						(588)
			$	(6,232)					$	8,651

Cash from Operating Activities

For the nine months ended September 30, 2026, cash flows used in operating activities were $30.3 million. Cash used primarily related to a net loss of $36.7 million, adjusted for a $6.0 million change in working capital accounts and $12.4 million in non-cash expenses (including $4.8 million related to share-based compensation, $6.0 million related to depreciation and amortization, $1.2 million related to property and equipment deposits applied to cost of revenues, $1.0 million related to prepaid expenses and other current assets, and $1.8 million related to accounts payable, accrued expenses and other current liabilities, partially offset by $6.1 million related to accounts receivable and $0.7 million related to inventory).

For the nine months ended September 30, 2025, cash flows used in operating activities were $34.7 million. Cash used primarily related to a net loss of $44.0 million, adjusted for a $0.1 million change in working capital accounts and $9.2 million in non-cash expenses (including $4.1 million related to share-based compensation, $4.1 million related to depreciation and amortization, $2.5 million related to prepaid expenses and other current assets, and $1.6 million in assets held for sale carrying value adjustments, partially offset by $1.8 million related to accounts payable, accrued expenses and other liabilities and $0.7 million related to gain on asset sales).

Cash from Investing Activities

For the nine months ended September 30, 2026, cash flows provided by investing activities were $24.4 million. Cash provided related to the sale or maturity of investments of $74.5 million and the proceeds from sale of assets of $1.9 million, offset by the purchase of investments of $49.6 million and acquired property and equipment of $2.4 million. We further recorded a $1.2 million reduction of property and equipment as a result of non-cash vendor tariff credits received for use against future purchases.

For the nine months ended September 30, 2025, cash flows provided by investing activities were $43.9 million. Cash provided related to the sale or maturity of investments of $101.0 million and the proceeds from sale of assets of $1.2 million, offset by the purchase of investments of $36.3 million and acquired property and equipment of $22.0 million.

Cash from Financing Activities

For the nine months ended September 30, 2026, cash flows used in financing activities were $0.4 million primarily due to payments of deferred equity offering costs.

For the nine months ended September 30, 2025, cash flows used in financing activities were $0.6 million, primarily due to taxes paid related to the net share settlement of equity awards.

Critical Accounting Policies and Estimates

In preparing our condensed consolidated financial statements, we applied the same critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, supplemented by those described below, that affect judgments and estimates of amounts recorded for certain assets, liabilities, revenues and expenses.

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Inventory

As of September 30, 2026, we have not yet commercialized the KARNO Power Module. Unless such components are capitalizable, costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as R&D costs, resulting in zero cost basis for those components. As a result, certain components on hand have a zero cost basis, and inventory capitalized in future periods that incorporates these components will reflect carrying amounts, and related cost of revenue upon sale, that are lower than would result had those components been initially capitalized.

When inventory may be utilized in performance of our contracts with the ONR, we capitalize that inventory including certain allocations of overhead, labor, and other direct costs and classify it as work-in-process inventory. When this inventory is designated to and utilized in an activity, we record either an R&D or a cost of sale charge in the period in which the utilization occurs.

All inventory at September 30, 2026 is classified as work-in-process. Inventory is valued using the specific identification cost method and is stated at the lower of cost or net realizable value. We review our inventory to determine whether its carrying value exceeds the net amount we expect to realize upon the ultimate sale of the inventory.

Share-Based Compensation

We account for share-based payments that involve the issuance of shares of our common stock to employees and non-employees and meet the criteria for share-based awards as share-based compensation expense based on the grant-date fair value of the award. The Company has elected to recognize the adjustment to share-based compensation expense in the period in which forfeitures occur. We recognize compensation expense for awards with only service conditions on a straight-line basis over the requisite service period for the entire award.

If we were to utilize different assumptions, including the estimate of underlying share volatility of our market-conditioned awards, share-based compensation cost could be under or overstated. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our research and development and selling, general and administrative expenses.

The Company granted 2.3 million restricted stock units in the nine months ended September 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 25% of these awards which will vest December 31, 2028. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105% and a risk-free rate of 3.48%.

Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 20% of restricted stock units granted in 2025 which will vest between September 2027 and December 2027.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Based on our management’s evaluation (with the participation of our Principal Executive Officer and Principal Financial Officer) of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our Principal Executive Officer and Principal Financial Officer have concluded that, at September 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth under “Legal Proceedings” in Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q is incorporated herein by reference. From time to time, we may be involved in other legal proceedings arising in the ordinary course of business; based on currently available information, we do not believe any such other proceedings, individually or in the aggregate, will have a significant adverse effect on the Company’s financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

A description of the risk factors associated with our business is contained in the “Risk Factors” section of our 2025 Annual Report. Except as set forth below, there have been no material changes to our Risk Factors as therein previously reported.

We are, and may in the future become, subject to legal proceedings, government investigations and other claims, and unfavorable outcomes could adversely affect our business, results of operations, financial condition and stock price.

From time to time, we are subject to claims, lawsuits, demands, and other legal proceedings, and additional matters may arise in the future. For example, as described in Note 11, “Commitments and Contingencies,” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, a putative securities class action lawsuit is pending against us and certain of our officers, a shareholder derivative action has been filed purportedly on our behalf against certain of our directors and officers, and we have received a shareholder demand to inspect certain of our books and records. These matters are at an early stage, and additional lawsuits or demands asserting similar allegations may be filed or made.

We may also become subject to other claims, including, without limitation, claims relating to intellectual property, product liability, commercial disputes and our contracts with the U.S. government. Regardless of any legal proceedings’ merit, defending against litigation or taking other actions in response can be expensive, time-consuming and disruptive to our operations, and can divert the attention of our management. The outcome of these matters is inherently uncertain, and settlements may not be available on acceptable terms. An adverse outcome could require us to change our business practices, and harm our reputation and our relationships with customers, including the U.S. government, and other business partners. Pending or future litigation, and any related publicity, may also adversely affect the market price of our common stock and our ability to raise additional capital on acceptable terms.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Issuer Purchases of Equity Securities

The following table provides information regarding repurchases of our Common Stock during the quarter ended September 30, 2026:

			Total Number of Shares Purchased						Average Price Paid per Share						Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)						Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
July 1 - 31, 2026			—						$	—					—						$	6,144,349
August 1 - 31, 2026			—						$	—					—						$	6,144,349
September 1 - 30, 2026			—						$	—					—						$	6,144,349
Total			—												—

(1) Share repurchases are conducted under our share repurchase program announced in December 2023, which has no expiration date, authorizing the repurchase of up to $20 million in shares. A total of 10,610,070 shares were purchased and retired under this program, which has been paused.

(2) This column includes the total value of shares available for repurchase under the Company’s share repurchase program. Shares under our share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, or through privately negotiated transactions. The timing, manner, price and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated or modified at any time for any reason.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements

During the three months ended September 30, 2026, none of our officers or directors (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

ITEM 6. EXHIBITS

Exhibit Number						Description
1.1						Sales Agreement, dated August 11, 2026, by and among Needham & Company, LLC, Northland Securities, Inc. and Hyliion Holdings Corp. (incorporated by reference to Exhibit 1.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-38823) filed with the SEC on August 11, 2026).
3.1						Second Amended and Restated Certificate of Incorporation of the Company, dated October 1, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-38823) filed with the SEC on October 7, 2020).
3.2						Amended and Restated Bylaws of the Company, dated October 1, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-38823) filed with the SEC on October 7, 2020).
10.1						Sixth Amendment to Industrial Lease, dated July 31, 2026, by and between GSNTR ATX 1200 BMC Drive Owner LP, GSNTR ATX 1202 BMC Drive Owner LP, and Hyliion Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-38823) filed with the SEC on August 11, 2026).
10.2*†						Consulting Agreement, dated August 30, 2026, by and between Hyliion Inc. and Gustanski Technical Services LLC.
10.3†						Hyliion Nonqualified Deferred Compensation Plan and Adoption Agreement, effective September 28, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-38823) filed with the SEC on October 2, 2026).
31.1*						Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						XBRL Instance Document
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101)

*    Filed herewith.

**    Furnished herewith.

†     Indicates a management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 10, 2026			HYLIION HOLDINGS CORP.
			/s/ Thomas Healy
			Name:			Thomas Healy
			Title:			Chief Executive Officer (Principal Executive Officer)
			/s/ Jon Panzer
			Name:			Jon Panzer
			Title:			Chief Financial Officer (Principal Financial Officer)

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