LiqTech International (LIQT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $4.5 million, down 10% year-over-year, with a net loss of $2.1 million, driven by lower sales and unfavorable product mix; gross margin declined to 16% from 23.3% last year.

• Secured new pilot orders for produced water treatment from major energy companies, marking the third consecutive quarter of such orders in oil & gas.

• Expanded distribution partnerships in oil & gas, marine scrubber, and pool markets, including new agreements in China, Greece, and South Korea.

• Achieved NSF certification for U.S. pool systems, enabling entry into the U.S. market and ongoing partner discussions.

• Six-month revenue was $8.72 million, with a net loss of $4.5 million, and gross margin for the period at 11.3%.

Financial highlights

• Q2 2024 revenue was $4.5 million, a 10% decrease year-over-year, with gross profit of $0.7 million (16% margin), and net loss of $2.1 million.

• System sales and aftermarket services totaled $1.9 million, up sequentially from $1.5 million in Q1.

• DPF and ceramic membrane sales were $1.7 million, slightly down from $1.8 million year-over-year.

• Plastic revenue was $0.95 million, down from $1.1 million last year.

• Cash and restricted cash at June 30, 2024 was $5.5 million, down from $10.4 million at year-end 2023.

Outlook and guidance

• Q3 2024 revenue expected between $4.0 million and $5.0 million, similar to Q2.

• Management anticipates a significantly stronger Q4, driven by oil & gas, marine scrubber, and pool markets.

• Break-even on Adjusted EBITDA basis targeted at $7 million quarterly revenue, potentially lower with favorable mix.

• Management expresses substantial doubt about the company's ability to continue as a going concern due to ongoing losses and cash burn.

• Future success depends on accelerating growth, restoring profitability, and raising capital.