Core Insights - Fuel Tech reported a GAAP revenue shortfall of $5.6 million in Q2 2025, primarily due to delayed project execution in the Air Pollution Control (APC) segment, despite a GAAP EPS loss of $(0.02) beating consensus projections of $(0.03) [1][5][7] Financial Performance - Q2 2025 GAAP revenue was $5.6 million, down from $7.0 million in Q2 2024, representing a year-over-year decline of 20.9% [2][5] - GAAP gross margin improved to 45.5% in Q2 2025 from 41.9% in Q2 2024, with APC margin increasing to 43.9% and FUEL CHEM margin growing to 46.8% [6] - The company reported a GAAP net loss of $(689,000) for Q2 2025, wider than the previous year, and an adjusted EBITDA loss of $(0.9) million [7][10] Business Segments - The APC segment saw sales drop from $3.9 million to $2.5 million due to delayed customer contract execution, while FUEL CHEM segment revenue was $3.1 million [5][6] - The APC project backlog decreased from $10.3 million in Q1 2025 to $7.8 million in Q2 2025, but management expects new projects worth $2.5–$3.0 million to close by the end of August 2025 [7][8] Strategic Focus - Fuel Tech is focused on regulatory compliance, expanding its patent portfolio, and entering new markets such as data centers and water treatment facilities [3][4] - The company is developing its TIFI Targeted In-Furnace Injection system and advancing its water treatment initiative with Dissolved Gas Infusion technology [9] Future Outlook - Management did not provide formal guidance but expects improved performance in the second half of fiscal 2025, with anticipated revenue growth in the FUEL CHEM segment [10] - Key factors to monitor include the conversion of APC bookings, DGI demonstrations to commercial installations, and cost management amid revenue pressures [10][11]

Company Performance - Fuel Tech, Inc. reported a quarterly loss of $0.02 per share, which was better than the Zacks Consensus Estimate of a loss of $0.03, representing an earnings surprise of +33.33% [1] - The company posted revenues of $5.56 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 8.74%, and down from $7.04 million year-over-year [2] - Over the last four quarters, Fuel Tech has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates during this period [2] Stock Movement and Outlook - Fuel Tech shares have increased approximately 166.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.6% [3] - The future performance of Fuel Tech's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $9.43 million, and for the current fiscal year, it is -$0.06 on revenues of $29.9 million [7] Industry Context - The Pollution Control industry, to which Fuel Tech belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Fuel Tech's stock may also be influenced by the overall outlook for the industry, as empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Core Insights - Fuel Tech, Inc. reported a decline in consolidated revenues for Q2 2025 to $5.6 million from $7.0 million in Q2 2024, primarily due to lower revenues in the Air Pollution Control (APC) segment [6][8] - The company anticipates improved performance in the second half of 2025, driven by ongoing developments in its business segments and new contract opportunities, particularly in the APC segment related to data centers [2][3] - The company maintains a strong financial position with nearly $31 million in cash and no long-term debt as of June 30, 2025 [2][10] Business Segment Performance - The FUEL CHEM segment's revenue remained flat at $3.1 million, but gross margin improved to 46.8% from 45.5% due to increased sales activity [9] - APC segment revenue decreased to $2.5 million from $3.9 million, attributed to the timing of project execution, but the company expects to secure additional contracts worth between $2.5 million and $3.0 million soon [4][8] - The company is set to demonstrate its TIFI Targeted In-Furnace Injection technology in Q4 2025, which is expected to enhance its client base [3] Financial Overview - Consolidated gross margin for Q2 2025 increased to 45.5% from 41.9% in Q2 2024, reflecting improvements in both APC and FUEL CHEM segments [6] - SG&A expenses rose slightly to $3.3 million, leading to an increase in SG&A as a percentage of revenues to 60.2% from 46.1% [7] - The net loss for Q2 2025 was $(689,000), or $(0.02) per share, compared to a net loss of $(421,000), or $(0.02) per share in Q2 2024 [7][20] Cash and Investments - As of June 30, 2025, the company had cash and cash equivalents of $10.6 million, short-term investments of $12.4 million, and long-term investments totaling $7.9 million [10] - Stockholders' equity at the same date was $40.6 million, or $1.32 per share, with no debt reported [10][18] Geographic Performance - In Q2 2025, revenues from the United States were $4.4 million, while foreign revenues were $1.1 million, contributing to total revenues of $5.6 million [33] - For the six months ended June 30, 2025, total revenues were $11.9 million, slightly down from $12.0 million in the same period of 2024 [33]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FUEL TECH, INC. (Exact name of registrant as specified in its charter) Delaware 20-5657551 (State or other jurisdiction of incorporation of organization) (I.R.S. Employer Identification Number) Fuel Tech, Inc. 27601 Bella Vista Parkway Warrenville, IL 60555-1617 630-845-4500 www.ftek.com (Address and telephone number of princip ...

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) [Q2 2025 Highlights and Outlook](index=1&type=section&id=Q2%202025%20Highlights%20and%20Outlook) Fuel Tech reported its Q2 2025 financial results, expressing confidence in improved overall performance for the second half of the year. The company is actively pursuing new contract opportunities, particularly in the APC segment for AI-related data centers, and maintains a strong financial position with nearly $31 million in cash, cash equivalents, and investments, and no long-term debt - **Confidence in delivering improved overall performance** in the second half of 2025[2](index=2&type=chunk) - Actively pursuing new contract opportunities across APC and FUEL CHEM® business segments, including bids for SCR technology for AI-related data centers in the U.S[2](index=2&type=chunk) - **Strong financial position** at June 30, 2025, with **nearly $31 million in cash, cash equivalents, and investments**, and **no long-term debt**[2](index=2&type=chunk) [Company Description](index=3&type=section&id=Company%20Description) Fuel Tech develops and commercializes proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services, leading in nitrogen oxide (NOx) reduction and offering FUEL CHEM® and DGI® systems - Develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services[13](index=13&type=chunk) - Leader in nitrogen oxide (NOx) reduction and particulate control technologies, with over **1,300 installations** worldwide[13](index=13&type=chunk) - Offers FUEL CHEM® technology for improving combustion unit efficiency and DGI® Dissolved Gas Infusion Systems for water and wastewater applications[13](index=13&type=chunk) [Business Segment Performance Overview](index=1&type=section&id=Business%20Segment%20Performance%20Overview) [FUEL CHEM® Segment](index=1&type=section&id=FUEL%20CHEM%C2%AE%20Segment) The FUEL CHEM® segment maintained steady performance in Q2 2025 compared to the prior year, influenced by seasonal weather, and anticipates robust results for Q3 2025, projecting full-year revenue to reach its highest level since 2022, with a TIFI® technology demonstration starting in Q4 2025 - Performance was steady compared to last year's second quarter, reflecting seasonal weather transition[3](index=3&type=chunk) - Anticipates robust segment results for the full third quarter of 2025 and full-year segment revenue to reach its **highest level since 2022**[3](index=3&type=chunk) - A demonstration of TIFI® Targeted In-Furnace Injection™ technology will commence in Q4 2025 at a coal-fired unit in the Midwest[3](index=3&type=chunk) [Air Pollution Control (APC) Segment](index=2&type=section&id=Air%20Pollution%20Control%20(APC)%20Segment) The Air Pollution Control (APC) segment experienced a revenue decline in Q2 2025 due to project timing, but Fuel Tech expects to secure an additional **$2.5 to $3.0 million** in new contracts by the end of August, which will enhance its effective APC backlog - Segment revenue declined due primarily to timing of project execution on existing contracts[4](index=4&type=chunk) - Expected to be awarded **between $2.5 and $3.0 million** in additional contracts from new and existing U.S. and international customers before the end of August[4](index=4&type=chunk) - These new awards would **increase the effective APC backlog**[4](index=4&type=chunk) [Dissolved Gas Infusion (DGI®) Technology](index=2&type=section&id=Dissolved%20Gas%20Infusion%20(DGI%C2%AE)%20Technology) An extended demonstration of Fuel Tech's Dissolved Gas Infusion (DGI®) technology began in July at a fish hatchery in the Western U.S., expected to run until Q2 2026, to evaluate the benefits of precise dissolved oxygen levels for raising gamefish - Commenced an extended demonstration of its Dissolved Gas Infusion (DGI®) technology at a fish hatchery in the Western U.S. in July[5](index=5&type=chunk) - The demonstration is expected to last until the second quarter of 2026[5](index=5&type=chunk) - Designed to evaluate the benefits of delivering consistent and precise levels of dissolved oxygen on the raising of gamefish in a controlled environment[5](index=5&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) [Second Quarter 2025 Consolidated Results](index=2&type=section&id=Second%20Quarter%202025%20Consolidated%20Results) Fuel Tech's consolidated revenues for Q2 2025 declined to **$5.6 million** from **$7.0 million** in Q2 2024, primarily due to lower APC revenues, yet consolidated gross margin expanded to **45.5%**, resulting in a net loss of **$(689,000)** or **$(0.02)** per share, and an Adjusted EBITDA loss of **$(0.9) million** Q2 2025 Consolidated Financial Performance | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change | | :----------------------- | :--------------------- | :--------------------- | :----- | | Revenues | $5,558 | $7,042 | -21.1% | | Gross Margin | 45.5% | 41.9% | +3.6 pp | | SG&A Expenses | $3,347 | $3,245 | +3.1% | | Interest Income | $537 | $334 | +60.8% | | Net Loss | $(689) | $(421) | +63.7% | | Basic Net Loss per Share | $(0.02) | $(0.01) | +100% | | Diluted Net Loss per Share | $(0.02) | $(0.01) | +100% | | Adjusted EBITDA Loss | $(948) | $(529) | +79.2% | Segment Performance (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Revenue (in thousands) | Q2 2024 Revenue (in thousands) | Q2 2025 Gross Margin | Q2 2024 Gross Margin | | :---------------- | :----------------------------- | :----------------------------- | :------------------- | :------------------- | | APC | $2,505 | $3,949 | 43.9% | 39.1% | | FUEL CHEM | $3,053 | $3,093 | 46.8% | 45.5% | - Consolidated APC segment backlog at June 30, 2025, was **$7.8 million**, compared to **$10.3 million** at March 31, 2025, and **$6.2 million** at December 31, 2024[8](index=8&type=chunk) [Financial Condition](index=3&type=section&id=Financial%20Condition) As of June 30, 2025, Fuel Tech maintained a strong financial position with **$10.6 million** in cash and cash equivalents, **$12.4 million** in short-term investments, and **$7.9 million** in long-term investments, with total stockholders' equity at **$40.6 million** and no debt Financial Position at June 30, 2025 | Asset/Equity | Amount (in thousands) | | :---------------------- | :-------------------- | | Cash and cash equivalents | $10,589 | | Short-term investments | $12,420 | | Long-term investments | $7,925 | | Total Stockholders' Equity | $40,664 | | Debt | None | [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of **$47.0 million** at June 30, 2025, a decrease from **$48.8 million** at December 31, 2024, with current assets increasing slightly, long-term investments decreasing, total liabilities decreasing, and stockholders' equity seeing a minor reduction Condensed Consolidated Balance Sheets (Selected Items) | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total current assets | $31,011 | $29,619 | | Total assets | $47,003 | $48,797 | | Total current liabilities | $5,326 | $5,855 | | Total liabilities | $6,339 | $6,842 | | Total stockholders' equity | $40,664 | $41,955 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, revenues were **$5.6 million**, down from **$7.0 million** in the prior year, with an operating loss of **$(1.3) million** and a net loss of **$(689,000)**; for the six months, revenues were flat at **$11.9 million**, with a net loss of **$(1.4) million** Condensed Consolidated Statements of Operations (Selected Items) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------------- | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenues | $5,558 | $7,042 | $11,940 | $11,999 | | Cost of sales | $3,029 | $4,090 | $6,452 | $7,018 | | Selling, general and administrative | $3,347 | $3,245 | $6,688 | $6,590 | | Research and development | $490 | $422 | $1,060 | $798 | | Operating loss | $(1,308) | $(715) | $(2,260) | $(2,407) | | Net loss | $(689) | $(421) | $(1,428) | $(140) | | Basic net loss per common share | $(0.02) | $(0.01) | $(0.05) | $(0.00) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) The comprehensive loss for Q2 2025 was **$(678,000)**, compared to **$(416,000)** in Q2 2024, while for the six months ended June 30, 2025, it was **$(1,282,000)**, an increase from **$(278,000)** in the prior year, primarily driven by the net loss Comprehensive Loss | Period | 2025 (in thousands) | 2024 (in thousands) | | :----------------------- | :------------------ | :------------------ | | Three Months Ended June 30 | $(678) | $(416) | | Six Months Ended June 30 | $(1,282) | $(278) | - Foreign currency translation adjustments **contributed positively** to other comprehensive income in both periods of 2025[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was **$1.5 million**, a significant improvement from net cash used of **$(2.7) million** in the prior year, with investing activities providing **$0.7 million** and financing activities using **$(0.2) million**, resulting in an overall increase in cash and cash equivalents of **$2.1 million** Net Cash Flow Activities (Six Months Ended June 30) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------ | :------------------ | :------------------ | | Net cash provided by (used in) operating activities | $1,487 | $(2,664) | | Net cash provided by (used in) investing activities | $700 | $(4,311) | | Net cash used in financing activities | $(222) | $(95) | | Net increase (decrease) in cash and cash equivalents | $2,079 | $(7,174) | | Cash and cash equivalents at end of period | $10,589 | $10,404 | - **Significant positive change in operating cash flow**, driven by changes in accounts receivable and employee retention credit receivable[23](index=23&type=chunk) [Segment Data - Reporting Segments](index=8&type=section&id=Segment%20Data%20-%20Reporting%20Segments) For Q2 2025, the APC segment generated **$2.5 million** in revenue with a gross margin of **$1.1 million**, while the FUEL CHEM segment reported **$3.1 million** in revenue with a gross margin of **$1.4 million**; for the six months ended June 30, 2025, FUEL CHEM revenue (**$8.1 million**) significantly outpaced APC revenue (**$3.8 million**) Segment Revenues and Gross Margins (Three Months Ended June 30) | Segment | 2025 Revenues (in thousands) | 2024 Revenues (in thousands) | 2025 Gross Margin (in thousands) | 2024 Gross Margin (in thousands) | | :---------------- | :--------------------------- | :--------------------------- | :------------------------------- | :------------------------------- | | Air Pollution Control | $2,505 | $3,949 | $1,099 | $1,544 | | FUEL CHEM | $3,053 | $3,093 | $1,430 | $1,408 | | Total | $5,558 | $7,042 | $2,529 | $2,952 | Segment Revenues and Gross Margins (Six Months Ended June 30) | Segment | 2025 Revenues (in thousands) | 2024 Revenues (in thousands) | 2025 Gross Margin (in thousands) | 2024 Gross Margin (in thousands) | | :---------------- | :--------------------------- | :--------------------------- | :------------------------------- | :------------------------------- | | Air Pollution Control | $3,808 | $6,267 | $1,524 | $2,434 | | FUEL CHEM | $8,132 | $5,732 | $3,964 | $2,547 | | Total | $11,940 | $11,999 | $5,488 | $4,981 | [Geographic Segment Financial Data](index=9&type=section&id=Geographic%20Segment%20Financial%20Data) For Q2 2025, U.S. revenues were **$4.4 million**, while foreign revenues were **$1.1 million**; for the six months, U.S. revenues were **$9.8 million**, and foreign revenues were **$2.1 million**, with the majority of assets located in the United States Revenues by Geographic Area (Three Months Ended June 30) | Region | 2025 (in thousands) | 2024 (in thousands) | | :------------ | :------------------ | :------------------ | | United States | $4,442 | $4,471 | | Foreign | $1,116 | $2,571 | | Total | $5,558 | $7,042 | Revenues by Geographic Area (Six Months Ended June 30) | Region | 2025 (in thousands) | 2024 (in thousands) | | :------------ | :------------------ | :------------------ | | United States | $9,801 | $8,066 | | Foreign | $2,139 | $3,933 | | Total | $11,940 | $11,999 | Assets by Geographic Area (June 30, 2025 vs. December 31, 2024) | Region | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------ | :----------------------------- | :------------------------------- | | United States | $44,130 | $44,430 | | Foreign | $2,873 | $4,367 | | Total | $47,003 | $48,797 | [Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA) Fuel Tech provides Adjusted EBITDA as a non-GAAP measure to enhance understanding of financial performance and cash flow generation; for Q2 2025, the Adjusted EBITDA loss was **$(948,000)**, an increase from **$(529,000)** in Q2 2024, while for the six months, Adjusted EBITDA loss improved to **$(1,683,000)** from **$(2,025,000)** in the prior year Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------------ | :------------------ | :------------------ | | Net Loss | $(689) | $(421) | | EBITDA | $(1,050) | $(653) | | Adjusted EBITDA | $(948) | $(529) | Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :------------------------ | :------------------ | :------------------ | | Net Loss | $(1,428) | $(140) | | EBITDA | $(1,895) | $(576) | | Adjusted EBITDA | $(1,683) | $(2,025) | - **Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation expense, amortization expense, stock compensation expense, and gain on employee retention credit**[30](index=30&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Conference Call](index=3&type=section&id=Conference%20Call) Fuel Tech will host a conference call on Wednesday, August 6, 2025, at 10:00 am ET / 9:00 am CT to discuss the Q2 2025 results and business activities, with participation available via phone or the company's website - Management will host a conference call on Wednesday, August 6, 2025, at 10:00 am ET / 9:00 am CT[12](index=12&type=chunk) - The call will discuss results and business activities and will be accessible via phone or the Upcoming Events section of www.ftek.com[12](index=12&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements, identified by specific terminology, which are subject to various risks, uncertainties, and other factors detailed in Fuel Tech's SEC filings, including its Form 10-K, and the company undertakes no obligation to update them - This press release contains "forward-looking statements" as defined in Section 21E of the Securities Exchange Act of 1934, as amended[15](index=15&type=chunk) - Statements are subject to various risks, uncertainties, and other factors, including contracts being awarded to competitors, project delays, and other risks discussed in Fuel Tech's Annual Report on Form 10-K[15](index=15&type=chunk) - Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements[15](index=15&type=chunk)

Core Viewpoint - Fuel Tech, Inc. is set to release its financial results for the second quarter of 2025 on August 5, 2025, after market close, indicating ongoing business activities and performance tracking [1]. Financial Results Announcement - The financial results for the second quarter ended June 30, 2025, will be announced on August 5, 2025, after the stock market closes [1]. - A conference call to discuss these results will take place on August 6, 2025, at 10:00 am ET / 9:00 am CT, allowing for live participation and questions from interested parties [2]. Company Overview - Fuel Tech specializes in advanced engineering processes for emissions control systems and water treatment technologies, serving utility and industrial applications [1]. - The company is recognized for its leadership in nitrogen oxide (NOx) reduction and particulate control technologies, with over 1,300 installations worldwide [4]. - Fuel Tech's proprietary technologies include FUEL CHEM for combustion unit optimization and DGIDissolved Gas Infusion Systems for water treatment, showcasing its commitment to cost-effective and environmentally sustainable solutions [4].

Summary of Fuel Tech Inc (FTEK) Conference Call - May 22, 2025 Company Overview - **Company Name**: Fuel Tech Inc (FTEK) - **Industry**: Environmental Solutions, specifically Air Pollution Control and Water Treatment - **Business Segments**: - Air Pollution Control (APC) - FUEL CHEM (Chemical Technologies) - DGI (Dissolved Gas Infusion) as a developing business opportunity [3][4] Financial Performance - **Cash Position**: Approximately $31 million in cash with no outstanding debt [6][42] - **Revenue Target for 2025**: Approximately $30 million, indicating an improvement over previous years [6][12] - **Backlog**: Highest backlog in three years, over $10 million at the end of Q1 [6][13][24] - **Gross Margin**: Improved gross margin performance expected to remain consistent throughout 2025 [12][13] Market Dynamics - **Power Generation Demand**: Anticipated increase in demand for power generation driven by AI and other needs, leading to potential growth opportunities for Fuel Tech [10][11][18] - **Regulatory Environment**: No new regulations expected from the current administration, but existing regulations provide a solid base for business opportunities [21][51][52] - **Coal-Fired Units**: Extension of life for coal-fired units due to the need for reliable power generation, with some units previously scheduled for shutdown now being extended [18][19] Business Opportunities - **Air Pollution Control**: - Focus on nitrogen oxides emissions control with a suite of technologies including SNCR and SCR [22][25] - Project pipeline estimated between $50 million to $75 million, with potential for larger contracts from data centers [23][24] - **Chemical Technologies**: - Primarily focused on coal-fired units, generating approximately $15 million to $16 million in revenue for 2025 [29][30] - Historical revenue of nearly $50 million with gross margins over 50% [29] - **Dissolved Gas Infusion (DGI)**: - New initiative with potential applications in water and wastewater treatment, agriculture, and aquaculture [34][35][38] - Requires demonstrated success in end markets to scale operations [50] Competitive Advantages - **Modeling Capabilities**: Advanced mathematical modeling used to predict product performance, providing a competitive edge [14][15] - **Customer Education**: Focus on educating customers about the long-term benefits of solutions, enhancing customer relationships [15] Risks and Considerations - **Regulatory Risks**: Potential risk of relaxed regulatory requirements impacting emissions control standards [51][52] - **Market Competition**: Need to establish a strong presence in the DGI market and demonstrate success to gain traction [50] Conclusion - Fuel Tech is positioned for a strong year in 2025 with a solid financial foundation, a robust backlog, and favorable market conditions for its air pollution control technologies. The company is optimistic about growth opportunities in both existing and new business segments, particularly in response to increasing power generation demands and the development of its DGI technology [40][41][42].

Company Overview - Fuel Tech, Inc. is a technology company specializing in emissions control systems and water treatment technologies for utility and industrial applications [3] - The company is recognized for its advanced engineering processes and has installed solutions on over 1,300 utility, industrial, and municipal units globally [3] - Fuel Tech's proprietary technologies include nitrogen oxide (NOx) reduction and particulate control, as well as water treatment technologies like Dissolved Gas Infusion Systems [3] Upcoming Events - Chairman and CEO Vince Arnone will present and conduct one-on-one meetings with investors at the Sidoti Micro-Cap Virtual Investor Conference on May 21-22, 2025 [1] - The presentation is scheduled for May 22, 2025, at 3:15 PM Eastern Time, and will be accessible via a live webcast on Fuel Tech's website [2]

Financial Data and Key Metrics Changes - Revenues for the first quarter of 2025 rose 29% to $6,400,000 from $5,000,000 in the prior year period, primarily driven by the robust performance from the FUEL CHEM business segment [17][5] - Consolidated gross margin improved to 46% from 41% in the prior year, reflecting a higher proportion of FUEL CHEM segment revenue [18] - The operating loss narrowed to $952,000 from $1,700,000 in the previous year, indicating improved revenue profit [22] - The net loss for the quarter was $739,000 or $0.02 per share, compared to net income of $281,000 or $0.01 per share in the same period last year [22] Business Segment Data and Key Metrics Changes - FUEL CHEM segment revenue increased by 92% to $5,100,000 from $2,600,000 in the prior year, comprising nearly 80% of total revenues for the quarter [17][8] - APC segment revenue declined to $1,300,000 from $2,300,000 in the previous year, primarily due to the timing of project execution [17][9] - APC backlog improved significantly, reaching $10,300,000 as of March 31, 2025, up from $6,200,000 at December 31, 2024 [19] Market Data and Key Metrics Changes - The company is encouraged by the global landscape of business development activities, driven by manufacturing expansion and growing demand for power generation [6] - The demand for emissions control solutions is increasing due to the need for compliance with environmental regulations across various markets [7] Company Strategy and Development Direction - The company aims to maintain its revenue guidance for 2025, expecting total revenues to approximate $30,000,000, with both business segments exceeding their performance in 2024 [14] - The company is pursuing additional FUEL CHEM opportunities both domestically and internationally, including a new demonstration of TIFI technology [8] - Investment in water quality and infrastructure is growing, with the company planning to demonstrate its dissolved gas infusion technology [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the near-term outlook for business development opportunities, indicating that 2025 will be a year of growth [4] - The company does not expect specific tailwinds from new regulations but is confident in capturing opportunities driven by general business expansion [11][31] - Management noted that the extension of life for coal-fired units could benefit the company due to increased demand for reliable power [31] Other Important Information - The company has no long-term debt and maintains a strong financial position with approximately $31,000,000 in cash and investments [6][24] - Research and development expenses increased to $570,000, reflecting ongoing investment in water and wastewater treatment technologies [21] Q&A Session Summary Question: How is the company positioned regarding the current political environment and regulations? - Management indicated that the current administration is not deterring business opportunities, and general business expansion is driving growth [29][31] Question: Can the company share any names of partners in the data center market? - Management refrained from naming specific partners but mentioned working with OEM suppliers and large tech companies [33] Question: What is the potential size of the data center opportunity? - Management noted that opportunities could be significant, with costs per unit ranging from $1,000,000 to $2,000,000 [35] Question: What is needed for the Mexican opportunity to materialize? - The Mexican government needs to allocate funds for pollution remediation systems to begin receiving orders [39] Question: Is there a plan for stock buybacks given the current trading levels? - Management discussed the potential for stock buybacks but believes there is enough positive momentum to drive stock price without using cash for buybacks at this time [68]

Financial Data and Key Metrics Changes - Revenues for the first quarter of 2025 rose 29% to $6,400,000 from $5,000,000 in the prior year period, primarily driven by the robust performance of the FUEL CHEM business segment [17][6] - Consolidated gross margin improved to 46% from 41% in the prior year, reflecting a higher proportion of FUEL CHEM segment revenue [18] - The operating loss narrowed to $952,000 from $1,700,000 in the previous year, indicating improved financial performance [22] - The net loss for the quarter was $739,000 or $0.02 per share, compared to net income of $281,000 or $0.01 per share in the same period last year [22] Business Line Data and Key Metrics Changes - FUEL CHEM segment revenue increased by 92% to $5,100,000 from $2,600,000 in the prior year, comprising nearly 80% of total revenues for the quarter [17][8] - APC segment revenue declined to $1,300,000 from $2,300,000 in the previous year, primarily due to the timing of project execution [17][9] - APC backlog improved significantly, reaching $10,300,000 as of March 31, 2025, up from $6,200,000 at the end of 2024 [19] Market Data and Key Metrics Changes - The company is encouraged by the global landscape of business development activities, driven by manufacturing expansion and growing demand for power generation [6][7] - The demand for emissions control solutions is increasing due to the need for compliance with environmental regulations [7][12] Company Strategy and Development Direction - The company aims to maintain revenue guidance for 2025 at approximately $30,000,000, with expectations that both business segments will exceed their performance in 2024 [14] - The focus remains on pursuing additional FUEL CHEM opportunities domestically and internationally, with plans for new demonstrations of technology [8][9] - The company is actively engaging in discussions regarding the expansion of its chemical technology in Mexico, aligning with the new government's environmental policies [9][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current business environment, noting that uncertainties in the market have not significantly deterred business activity [31] - The company is not expecting any specific tailwinds from new regulations but is confident in capturing opportunities driven by general business expansion [30][31] - The management highlighted the potential for growth in the data center market, driven by increasing energy demands [11][35] Other Important Information - The company has no long-term debt and maintains a strong financial position with cash and investments totaling approximately $31,200,000 [22][24] - Research and development expenses increased due to ongoing investments in water and wastewater treatment technologies [20][21] Q&A Session Summary Question: Current political environment and its impact - Management indicated that the new administration is not deterring business opportunities, and general market drivers are favorable for growth [30][31] Question: Data center partnerships - While specific names could not be disclosed, management confirmed collaboration with OEM suppliers and large tech companies in the data center market [32][33] Question: Mexico opportunity and funding - The Mexican government needs to allocate funds for pollution remediation systems to facilitate order placements [39] Question: Environmental regulations and data center opportunities - Management noted that opportunities are not solely driven by new regulations but are influenced by existing EPA regulations [46][47] Question: DGI sales representatives - The company is engaging sales representatives to enhance market access for DGI technology, with positive feedback from recent shows [50][51] Question: Stock buyback considerations - Management discussed the potential for stock buybacks but emphasized confidence in organic growth as a better use of cash at this time [68]