Arq (ARQ) Q2 2025 earnings summary

Executive summary

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

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

• Commissioned the first GAC line at Red River in August 2025, marking a major operational milestone and enabling initial sales to new markets.

• Net loss was $2.1 million in Q2 2025, compared to $2.0 million in Q2 2024, mainly due to GAC commissioning costs.

• PAC business turnaround continues, with all 2025 PAC contracts now profitable and ongoing optimization initiatives.

Financial highlights

• Q2 2025 revenue: $28.6 million, up from $25.4 million in Q2 2024; six-month revenue: $55.8 million, up from $47.1 million.

• Gross margin improved to 33.3% from 32.2% year-over-year, reflecting pricing and customer mix improvements.

• Adjusted EBITDA was $3.7 million, up from $1.1 million in the prior year period.

• Net loss for Q2 2025: $2.1 million (EPS: $(0.05)), compared to $2.0 million (EPS: $(0.06)) in Q2 2024.

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

Outlook and guidance

• Six-month guidance to reach nameplate GAC capacity remains unchanged, with ramp-up targeting 25 million pounds annualized.

• Final investment decision for a second GAC line at Red River targeted by year-end 2025.

• 2025 CapEx forecast reiterated at $8–12 million, to be funded by existing 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.