Hudson Technologies (HDSN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 17% year-over-year to $75.3M, mainly due to lower refrigerant prices, despite a 17% increase in sales volume.

• Net income for Q2 2024 was $9.6M ($0.20–$0.21 per diluted share), down from $19.2M ($0.41–$0.42 per share) in Q2 2023, impacted by lower prices and higher SG&A costs.

• Completed the $20.7M acquisition of USA Refrigerants in June 2024, expanding recovery, reclamation, and customer reach.

• Board authorized a $10M share repurchase program through 2025, reflecting confidence in long-term growth.

• Gross margin dropped to 30% in Q2 2024 from 41% in Q2 2023.

Financial highlights

• Q2 2024 revenue was $75.3M, down from $90.5M in Q2 2023; six-month 2024 revenue was $140.5M, down from $167.7M.

• Q2 2024 gross profit was $22.6M, down from $36.6M; six-month gross profit was $44.0M, down from $67.0M.

• Operating income for Q2 2024 was $12.8M, down from $27.7M in Q2 2023.

• SG&A expenses for Q2 2024 were $9.0M, including $0.7M in non-recurring acquisition and IT costs.

• Cash and equivalents at June 30, 2024 were $30.5M, with no debt outstanding.

Outlook and guidance

• Full-year 2024 revenue expected between $240M and $250M, with gross margin around 30%, assuming current pricing persists.

• Management anticipates incremental revenue and higher margins from the USA Refrigerants acquisition in 2025.

• Long-term growth expected as HFC phasedown accelerates reclamation activity and profitability.

• EPA Refrigerant Management Rule finalization and other regulatory changes may impact future guidance.

• Working capital needs expected to be met by cash flow and available credit, but risks remain from unanticipated expenses or revenue shortfalls.