Arq (ARQ) investor relations material

Executive summary

• Revenue grew 13% year-over-year to $28.6 million in Q2 2025, driven by higher average selling prices, volumes, and end-market diversification.

• Achieved fifth consecutive quarter of positive Adjusted EBITDA, up over 200% year-over-year to $3.7 million.

• Completed commissioning of the first GAC line at Red River in August 2025, marking a major operational milestone and entry into higher growth, higher margin businesses.

• Net loss was $2.1 million in Q2 2025, slightly higher than the $2.0 million loss in the prior year period.

• Targeting a final investment decision for a second GAC line at Red River before year-end 2025.

Financial highlights

• Q2 2025 revenue: $28.6 million, up from $25.4 million year-over-year; six-month revenue: $55.8 million, up from $47.1 million.

• Gross margin improved to 33.3% in Q2 2025 from 32.2% a year ago, aided by pricing, volume, and customer mix.

• Adjusted EBITDA for Q2 2025: $3.7 million, up from $1.1 million in Q2 2024; six-month Adjusted EBITDA: $7.7 million, up from $0.7 million.

• Cash and restricted cash at June 30, 2025: $15.4 million, down from $22.2 million at year-end 2024.

• SG&A expenses reduced by 16% year-over-year to $5.9 million, mainly from lower payroll and admin costs.

Outlook and guidance

• Ramp-up of Red River GAC production targeting 25 million pounds annualized within six months.

• Full-year 2025 capital expenditures expected to remain within $8–$12 million guidance, funded by cash, cash generation, and cost reductions.

• Expects increased GAC demand in water purification due to new EPA PFAS regulations, with compliance deadlines potentially extended to 2031.

• Management expects sufficient liquidity for the next 12 months based on current cash and credit availability.

• Strategic price increases are expected to continue, though at a moderating pace.