Hudson Technologies (HDSN) investor relations material

Executive summary

• Revenue grew 9% year-over-year to $60.2 million in Q1 2026, driven by strong sales execution, 20% sales volume growth, warm weather, and firming HFC prices, partially offset by product mix.

• Net income declined to $0.3 million ($0.01 per share) from $2.8 million ($0.06 per share) in Q1 2025, mainly due to higher SG&A expenses and lower gross margin.

• Operational progress included management and board restructuring, ERP system launch, and a key licensing agreement for next-generation refrigerants.

• Completed the acquisition of Refrigerants Inc. in December 2025, expanding market reach and supply chain capabilities.

• Share repurchases totaled $2.5 million in Q1 2026.

Financial highlights

• Gross profit was $11.8 million (20% margin), down from $12.1 million (22% margin) in Q1 2025 due to less favorable sales mix.

• SG&A expenses increased to $9.5 million from $8.2 million, mainly due to ERP implementation and strategic initiatives.

• Operating income was $1.5 million, down from $3.1 million; net income was $0.3 million versus $2.8 million in Q1 2025.

• Cash and cash equivalents at quarter-end were $19.4 million, down from $39.5 million at year-end 2025.

• Working capital stood at $143.0 million, a decrease of $3.2 million from December 2025.

Outlook and guidance

• Q2 2026 revenue guidance is $73–76 million, supported by firming HFC prices.

• Management expects gross margin to improve through the selling season, targeting mid-20s% for the year.

• Anticipate higher sales volume in Q2, but pricing to be lower year-over-year due to normalization after last year's HFO shortage.

• Management expects to satisfy working capital needs from operations and available credit, but notes potential risks from unanticipated expenses or market changes.

• Ongoing DLA contract bid protest may impact future government business, but current contract runs through July 2026.