Introduction

ITM Power plc (LSE:ITM) is one of the UK’s best-known clean-energy names, a manufacturer of electrolysers that produce green hydrogen using renewable electricity. After a turbulent few years in which the green-hydrogen sector cooled and the company restructured, ITM Power (ITM) has refocused on profitable projects and operational discipline. Its most recent results pointed to record Revenue and a growing order Backlog, suggesting the turnaround strategy is gaining traction even as the broader hydrogen market remains at an early stage.

Why ITM Power (ITM) is in focus now

ITM Power (ITM) is in focus because of a cluster of positive developments: record half-year revenue, a substantially expanded order backlog, a major UK government grant and a strategic Equity injection from Great British Energy. The company also raised its revenue guidance significantly. For a Business in a sector that has seen sentiment swing sharply, these milestones have reignited interest in whether ITM can convert its strong Balance Sheet and technology into sustainable, profitable growth.

Business overview

ITM Power designs and manufactures proton-exchange-membrane (PEM) electrolysers, which split water into hydrogen and oxygen using electricity. When powered by renewables, the hydrogen produced is “green” and can be used in industry, transport and energy storage as a low-carbon fuel. ITM operates a Manufacturing Facility in Sheffield and works with industrial and energy customers on hydrogen projects. The company’s strategy has shifted towards prioritising profitable, deliverable projects over Volume, alongside Investment in automating manufacturing to reduce costs.

Latest Earnings explained

For the first half of FY2026, ITM Power reported record half-year revenue of about £18m. The company subsequently guided to full-year revenue of between £40m and £43m, an increase of around 35% on the prior year. While ITM remains in a development phase and is working to reduce losses on legacy contracts, the revenue growth and the rising proportion of profitable work in the backlog indicate progress. As is typical for early-stage clean-energy manufacturers, the focus for investors is as much on backlog quality, cash and Margin trajectory as on headline profit.

Revenue, profit, margins, Cash Flow and balance sheet

ITM Power’s balance sheet is a key strength. Cash stood at about £197.8m, with only a modest reduction of around £9.2m over twelve months, reflecting tighter cost control. A £46.5m UK government grant for automating the Sheffield factory (the Chronos programme), combined with a £40m strategic equity injection from Great British Energy, lifted ITM’s net Liquidity forecast to between about £210m and £215m, up from an earlier range of around £170m–£175m. The order backlog reached about £152m, of which roughly 71% is considered profitable, with management aiming to work down legacy lower-margin projects through 2026 and 2027.

What management said

Management has emphasised the shift towards profitable projects and operational discipline, framing the record revenue and growing backlog as evidence that the strategy is working. Commentary highlighted the importance of the government grant and the Great British Energy investment as endorsements of ITM’s role in the UK hydrogen economy, and as support for automating manufacturing to lower unit costs. Executives have been careful to stress the focus on Quality of Earnings and cash preservation rather than growth at any cost.

Latest news and announcements

Recent announcements include the record half-year results, raised revenue guidance, the £46.5m Chronos grant from the Department for Energy Security and Net Zero, and the £40m strategic equity investment from Great British Energy. These developments strengthen both ITM’s finances and its strategic positioning. Investors are also watching a number of hydrogen projects moving towards final investment decisions, which could convert pipeline into firm, profitable orders.

Share-price performance and market reaction

ITM Power (ITM) shares have traded around 148p, and the stock has been volatile, reflecting both company-specific news and shifting sentiment towards the hydrogen sector. The combination of record revenue, government support and the Great British Energy investment has been supportive, but the shares remain sensitive to news on project timing, policy and the pace of the energy transition. As a pre-profit growth company, ITM’s valuation carries a higher degree of uncertainty.

Growth drivers

The principal growth drivers for ITM Power (ITM) are the long-term expansion of the green-hydrogen market, supported by decarbonisation policy and government funding; the conversion of its pipeline into profitable orders as projects reach final investment decisions; and cost reduction through factory automation. A strong balance sheet allows ITM to invest and to be selective about the projects it pursues. UK policy support, including grants and the involvement of Great British Energy, provides additional momentum.

Key risks for investors

ITM Power faces significant risks. The green-hydrogen market is still nascent, and Demand depends heavily on policy support, subsidies and customer investment decisions, which can be delayed. ITM has historically been loss-making, and the path to sustained profitability is not assured. Legacy contracts carry margin risk until worked through. Competition in electrolysers is intensifying, and technological or execution setbacks could affect delivery. Sentiment towards the sector is volatile, and the shares can move sharply on policy or project news.

Dividend position

ITM Power (ITM) does not pay a dividend. As a development-stage clean-energy company prioritising investment in growth, manufacturing automation and project delivery, it retains its Capital to fund the business. Investors should not expect income; the proposition is centred on Long-term Growth in the hydrogen economy and the company’s ability to reach sustainable profitability.

Outlook for the next 6–12 months

Over the next 6–12 months, the focus will be on delivering against the raised revenue guidance of £40m–£43m, progressing key projects towards final investment decisions, and continuing to improve the quality of the order backlog. Progress on factory automation funded by the Chronos grant will be watched as a route to lower costs. Policy developments and the broader pace of the hydrogen transition will remain important swing factors for both the business and the shares.

Investor takeaway

ITM Power (ITM) has delivered record revenue, a stronger backlog and a reinforced balance sheet, with notable backing from the UK government and Great British Energy. The turnaround towards profitable, disciplined growth is encouraging, but the company operates in an early-stage market, remains pre-profit and is exposed to policy and execution risk. This article is for information only and is not financial advice; investors should carry out their own research.