Hyliion Signs Letter of Intent with Flexnode to Deploy Up to 10 KARNO Generators to Power High-Performance Flexible Micro Data Centers

Rhea-AI Summary

Hyliion Holdings Corp. (NYSE: HYLN) has signed a non-binding Letter of Intent (LOI) with Flexnode to supply up to 10 KARNO generators, totaling 2MW capacity, for powering high-performance flexible micro data centers. Initial deliveries are expected to begin in 2025. The collaboration aims to support Flexnode's mission of elevating high-density digital infrastructure for AI and machine learning applications.

Key points:

• KARNO generators are fuel-agnostic, capable of using hydrogen, natural gas, biogas, and propane
• Flexnode offers a universal building platform for liquid-cooled data center infrastructure
• The partnership addresses challenges in data center availability, carbon intensity, and energy costs
• KARNO generators are expected to provide lower maintenance costs and reduced emissions compared to conventional technologies

Positive

• Non-binding LOI signed for potential supply of up to 10 KARNO generators (2MW total capacity)
• Initial deliveries anticipated to commence in 2025
• Partnership addresses critical factors limiting data center growth: availability, carbon intensity, and energy costs
• KARNO generators offer fuel-agnostic operation, potentially reducing operational costs and environmental impact

Negative

• LOI is non-binding and subject to execution of a binding purchase agreement
• Initial deliveries not expected until 2025, indicating a long lead time before potential revenue realization

Insights

Tech Expert

Hyliion's partnership with Flexnode marks a significant step in addressing the growing power demands of data centers. The KARNO generator's fuel-agnostic capability is a game-changer, offering flexibility and potential cost savings. However, the 2025 delivery timeline suggests a long wait for tangible results. The non-binding nature of the LOI also introduces uncertainty. While the technology promises efficiency and reduced emissions, its real-world performance remains unproven at scale. The 2MW total capacity is relatively small for data center standards, indicating this may be more of a pilot project than a full-scale deployment. Investors should monitor the progression from LOI to binding agreement and any technical validations in the interim.

Market Research Analyst

This partnership taps into two high-growth markets: sustainable energy and data centers. The global edge data center market is projected to reach $18.38 billion by 2027, with a CAGR of 25.4%. Flexnode's modular approach aligns with the trend towards edge computing and AI infrastructure. However, Hyliion faces stiff competition from established players in the power generation sector. The lack of financial details in the announcement makes it difficult to assess the deal's immediate impact on Hyliion's bottom line. Investors should consider this as a long-term strategic move rather than a near-term revenue driver, given the 2025 delivery timeline and the non-binding nature of the agreement.

Financial Analyst

While this LOI signals potential future revenue for Hyliion, its financial impact remains uncertain. The lack of binding terms and specific financial details limits our ability to quantify the deal's value. Hyliion's stock performance has been volatile, down over 90% from its 2020 highs, reflecting investor skepticism about its long-term prospects. This partnership could provide a new revenue stream, diversifying from Hyliion's core trucking focus. However, with deliveries not expected until 2025, any material financial impact is distant. Investors should focus on Hyliion's ability to secure binding agreements and demonstrate commercial viability of the KARNO technology in the interim. The company's cash burn rate and path to profitability remain critical factors to monitor.

AUSTIN, Texas--(BUSINESS WIRE)--

Hyliion Holdings Corp. (NYSE: HYLN) (“Hyliion”), a developer of sustainable electricity-producing technology, today announced the signing of a non-binding Letter of Intent (LOI) with Flexnode^TM, an innovative digital infrastructure company. Under the terms of the LOI, Hyliion will supply up to 10 KARNO^TM generators (2MW total capacity) to Flexnode, with the initial deliveries anticipated to commence in 2025. This collaboration aims to support Flexnode's mission of elevating the standard for high-density digital infrastructure that truly unlocks the potential of artificial intelligence and machine learning for years to come. By integrating highly efficient, fuel-agnostic KARNO generators, Flexnode expects to easily deploy digital infrastructure with reliable and clean on-site power generation.

Flexnode offers a cutting-edge universal building platform that seamlessly integrates liquid-cooled data center infrastructure for bespoke computing, storage, and networking solutions. Flexnode's innovative, adaptable design empowers businesses to deploy data center capacity incrementally, aligning infrastructure growth with demand. Flexnode’s solutions deliver rapid scalability, optimize edge performance for latency-sensitive workloads, and enhance efficiency through advanced cooling technologies, significantly reducing operational costs and environmental impact. This digital-first approach ensures unparalleled flexibility and resilience, meeting the needs of today’s most demanding IT environments.

"Availability, carbon intensity, and energy costs are critical factors currently limiting the growth and deployment of data centers. Integrating Hyliion KARNO generators into our Flexnodes for on-site clean energy production allows our customers to accelerate their plans and deploy data centers on demand without compromises," said Flexnode co-founder and CEO, Andrew Lindsey. "Hyliion’s sustainable power generation technology perfectly aligns with our vision of creating high-performance, efficient data centers that push the boundaries of traditional infrastructure."

The KARNO generator is a groundbreaking fuel-agnostic solution that utilizes a linear generator architecture to produce electricity both economically and efficiently. Capable of operating on various fuels including hydrogen, natural gas, biogas, and propane, the generator is expected to offer lower maintenance costs and a significantly reduced emissions profile compared to conventional technologies.

“Our KARNO generator technology is ideally suited to meet the increasing power and energy demands of data centers,” said Thomas Healy, Founder and CEO of Hyliion. “By combining KARNO generators with Flexnode’s cutting-edge digital infrastructure solutions, we are pioneering a new approach to deploying modular, highly efficient data centers in the industry.”

The LOI between Hyliion and Flexnode is subject to the execution of a binding purchase agreement. For more information about Hyliion and its innovative electrification solutions, please visit www.hyliion.com. For more information about Flexnode, please visit www.flexnode.io.

About Flexnode

Flexnode™ is at the forefront of reimagining digital infrastructure innovation, offering a revolutionary platform that simplifies the configuration, deployment, and operation of high-density data centers worldwide. By leveraging advanced methodologies, Flexnode delivers purpose-built, liquid-cooling-enabled data centers that excel in speed, scalability, and adaptability. Founded in 2019 and based in Bethesda, Maryland, Flexnode is driven by a team of industry experts dedicated to transforming the future of data centers. Flexnode - Built for you, built for anywhere. For more information, visit www.flexnode.io.

About Hyliion

Hyliion is committed to creating innovative solutions that enable clean, flexible and affordable electricity production. The Company’s primary focus is to provide distributed power generators that can operate on various fuel sources to future-proof against an ever-changing energy economy. Headquartered in Austin, Texas, and with research and development in Cincinnati, Ohio, Hyliion is initially targeting the commercial and waste management industries with a locally deployable generator that can offer prime power as well as energy arbitrage opportunities. Beyond stationary power, Hyliion will address mobile applications such as vehicles and marine. The Company aims to offer innovative, yet practical solutions that contribute positively to the environment in the energy economy. For further information, please visit www.hyliion.com.

Forward Looking Statements

The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, regarding Hyliion and its future financial and operational performance, as well as its strategy, future operations, estimated financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward looking statements. When used in this press release, including any oral statements made in connection therewith, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Except as otherwise required by applicable law, Hyliion expressly disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements herein, to reflect events or circumstances after the date of this press release. Hyliion cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of Hyliion. These risks include, but are not limited to, our status as an early stage of the Company with a history of losses; our expectation of incurring significant expenses and continuing losses for the foreseeable future; our ability to develop key commercial relationships with suppliers and customers; our ability to retain the services of Thomas Healy, our Chief Executive Officer; the expected performance of the KARNO generator and system; the execution of the strategic shift from our powertrain business to our KARNO business, and the other risks and uncertainties described under the heading “Risk Factors” in our SEC filings including in our Annual Report (See item 1A. Risk Factors) on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 13, 2024 for the year ended December 31, 2023. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Additional information concerning these and other factors that may impact Hyliion’s operations and projections can be found in its filings with the SEC. Hyliion’s SEC Filings are available publicly on the SEC’s website at www.sec.gov, and readers are urged to carefully review and consider the various disclosures made in such filings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240805651666/en/

Hyliion Holdings Corp.

press@hyliion.com

Investor Relations

ir@hyliion.com

Source: Hyliion Holdings Corp.

FAQ

What is the capacity of the KARNO generators Hyliion (HYLN) plans to supply to Flexnode?

Hyliion plans to supply up to 10 KARNO generators with a total capacity of 2MW to Flexnode.

When are the initial deliveries of KARNO generators from Hyliion (HYLN) to Flexnode expected to begin?

The initial deliveries of KARNO generators from Hyliion to Flexnode are anticipated to commence in 2025.

What types of fuel can Hyliion's (HYLN) KARNO generators use?

Hyliion's KARNO generators are fuel-agnostic and can operate on various fuels including hydrogen, natural gas, biogas, and propane.

What are the main advantages of Hyliion's (HYLN) KARNO generators for data centers?

KARNO generators offer lower maintenance costs, reduced emissions, fuel flexibility, and efficient electricity production, making them suitable for meeting the increasing power demands of data centers.