Apollo Power in the first quarter: products are selling, but the contracts still need to mature
In the first quarter, 81% of Apollo Power's revenue came from product sales, but the follow-on orders around GPM, Lippert, ZF and the European roofing partner still depend on delivery, exclusivity thresholds and customer conditions. This is real commercial progress, but not yet proof of a recurring pace that funds the factory.
Apollo Power opened 2026 with a stronger commercial signal than it had a year ago: most revenue now comes from product sales rather than projects, while new orders have accumulated across several channels. That is real progress, because the company is no longer relying only on a long backlog story or pilots with large customers. Still, the quarter does not close the commercialization test. The new orders sit at very different stages: some have been delivered, some still wait for delivery, some preserve exclusivity rights, and some depend on customer decisions or return rights. The current read is cautiously positive: demand is starting to appear in the accounts, but contract quality and collection pace still need to prove that the factory can fund the transition without continuing to burn cash. The next proof points are delivery of the Lippert and European partner orders, progress at the first GPM sites, and whether the inventory build turns into invoices and collections rather than trapped working capital.
Products moved to the front, but that is only half the proof
Apollo Power sits between industrial technology and an early commercialization manufacturer. The company develops and manufactures flexible solar panels at the Apollo Carmel plant, targeting mainly lightweight roofs, vehicles, leisure applications and defense uses. The old question was whether there was enough commercial interest in the technology. After the latest annual report, the test shifted to converting backlog into revenue and cash. The first quarter moves that test forward, but does not complete it.
Revenue for the quarter was NIS 6.29 million, up about 25% year over year. Gross profit rose to NIS 1.05 million, with a gross margin of 16.6%, compared with 15.1% in the comparable quarter. The more important figure appears in the revenue note: product sales contributed NIS 5.10 million, about 81% of revenue, compared with NIS 2.08 million and about 41% in the comparable quarter. Project revenue fell to NIS 1.19 million.
This is not only an accounting shift from point-in-time revenue recognition to revenue recognized over time. Product sales are the route through which Apollo has to show that the Apollo Carmel plant can produce volume, deliver on time and protect profitability. On that front, the report gives a positive signal: the Ministry of Defense contributed NIS 1.67 million and the order had been fully delivered by the reporting date, while other customers already appeared as a meaningful revenue layer. But this is still not enough to call it a recurring pace. Three unnamed customers together contributed almost NIS 2 million, and the disclosure does not show whether these are repeat customers, one-off orders, or the start of a broader sales channel.
The new orders are not all the same
The better way to read the quarter is not to count announcements, but to sort them by economic maturity. Some orders are close to revenue, some still depend on delivery, and some mainly keep a commercial door open. That is the difference between demand that starts funding the business and demand that still requires working capital, inventory and patience.
| Channel | What already exists | What still has to happen | Economic read |
|---|---|---|---|
| Ministry of Defense | An order of about NIS 1.67 million, fully delivered | Collection on 60-day payment terms from delivery | The closest proof of a product sale that reached execution |
| Lippert | An order of about $1.1 million, around NIS 3.5 million | Delivery by the end of 2026 | Real commercial demand, but not yet delivered in the quarter |
| European roofing partner | An order of about €1 million, around NIS 3.5 million | Half in Q2 and the balance by the end of 2026 | The order preserves exclusivity in France, Monaco and Andorra, so it is both a sale and a channel test |
| GPM | Seven NTPs for about $1.95 million and a prepaid equipment order of about $1.3 million | Equipment delivery, milestone execution and additional orders | Progress is now tangible, but the customer still controls the pace of the next sites |
| ZF | Initial order of about NIS 350,000 | Additional order of about NIS 400,000 by December 31, 2026 | A commercial signal, but the return right keeps the proof open |
The most unusual point is actually at ZF. The company received an initial order of about NIS 350,000, but the parties extended to December 31, 2026 the deadline for receiving the balance of the order required for Apollo's exclusivity toward ZF to begin. In addition, if ZF does not sell the systems under the initial order and chooses to return all or part of them by the end of 2026, Apollo will be required to buy them back as long as cumulative purchases have not reached NIS 750,000, unless otherwise agreed. This does not erase the value of the relationship with a large vehicle customer, but it puts the order in the right place: a commercial signal, not final demand proof.
GPM is further along, but also more complex. Seven notices to proceed have already been signed, and an equipment order of about $1.3 million was prepaid but not yet delivered at quarter-end. At the same time, GPM received warrants for up to 2.17 million shares, subject to cumulative orders of at least $8 million by December 31, 2026. The warrant accounting is not a technical detail: the company recognized a financial liability of NIS 1.80 million at quarter-end, and a matching asset that will be deducted from revenue from the engagement over the vesting period and until the agreed target is reached. In other words, part of the economic price of the large customer will sit inside future revenue, not only in potential dilution.
Cash still sets the runway for the transition
The all-in cash picture, meaning cash and deposits remaining after operating activity, investments, lease repayments and option exercises during the period, is still tighter than the order headlines suggest. Cash, cash equivalents and deposits totaled about NIS 21.9 million at the end of March, compared with about NIS 39.1 million at the end of 2025. That decline came despite NIS 1.44 million from warrant exercises and NIS 4.5 million of deposit withdrawals.
Operating cash flow was negative NIS 14.83 million, slightly better than the negative NIS 16.11 million in the comparable quarter, but not enough to show a change in the company's funding model. Inventory rose to NIS 15.89 million, up about 48% from year-end 2025, and trade receivables rose to NIS 7.41 million. On the other side, other payables jumped to NIS 13.43 million, mainly because of an advance from GPM for panel supply. That explains why the quarter is not only a regular cash-burn story: the company received an advance from a large customer and is preparing inventory for deliveries, but until that inventory turns into invoices and collections, growth still consumes balance-sheet capacity.
The NIS 40 million credit facility was extended to February 26, 2027, and was not utilized at quarter-end after immaterial amounts drawn during the period were fully repaid. The covenants are far away: SolarPaint's equity-to-assets ratio was 91% versus a 24% requirement, and the relevant equity was NIS 151.6 million versus a NIS 60 million requirement. That reduces immediate risk, but it does not turn the credit line into a comfortable growth engine. The first layer of the facility bears prime plus 9%, so any material use of it would change how the next quarters are read.
What may change the market read
The first quarter puts Apollo Power in a commercial proof year, not in a clean breakout year. Products are now at the front of the report, orders are arriving from several markets, and the GPM advance shows that a large customer is willing to pay before delivery. But each channel still has its own test: Lippert and the European partner need to turn into delivered orders, ZF has to move from an initial order to sales that are not returned, and GPM has to show that the first seven sites are not the end of the story.
The main bottleneck is not demand itself. It is conversion quality: how quickly orders turn into revenue, whether gross margin holds as product volume rises, and whether negative operating cash flow declines without material use of the credit line. If the inventory built during the quarter turns into deliveries and collections in the second half, the first quarter will look like the cost of moving into commercialization. If inventory stays high, revenue remains uneven and customers such as ZF or GPM move slowly, the market will read the product shift as another expensive stage on the path to proving the model.
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