Arq (ARQ) Q2 2026 earnings summary

Executive summary

• Revenue increased 5% year-over-year for the quarter, reaching $29.9 million, driven by higher pricing and increased sales volumes in the power generation market.

• Adjusted EBITDA rose 59% to $5.8 million, marking the ninth consecutive quarter of positive results.

• Net loss narrowed to $0.7 million for the quarter and $1.9 million for the six months, compared to $2.4 million in both periods last year.

• The biennial Red River Plant turnaround was completed under budget without disrupting operations.

• GAC production remains paused due to design flaws; optimization review is ongoing, with no GAC output expected in 2026 or 2027.

Financial highlights

• Gross margin improved to 38.5%, up from 33.3% in Q2 2025, aided by the plant turnaround and favorable product mix.

• Quarterly revenue: $29.9 million (up from $28.6 million year-over-year); six-month revenue: $58.9 million (up from $55.8 million year-over-year).

• Cost of revenue (excluding D&A) decreased 4% for the quarter; gross margin improved.

• Operating expenses rose 2% for the quarter, mainly due to higher SG&A and depreciation, including $0.9 million in severance and recruiting costs.

• Adjusted EBITDA for the quarter was $5.8 million, up from $3.7 million year-over-year.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: revenue of $120–$125 million and Adjusted EBITDA of $17–$20 million.

• Expect continued revenue growth driven by demand for PAC products and stable natural gas prices.

• Gross margin anticipated to improve as fixed costs from paused GAC production diminish.

• Sufficient liquidity projected for the next 12 months based on current cash and credit availability.

• Capex guidance for 2026 reiterated at $8–$10 million.