Financial Performance - Revenue for the year ended December 31, 2025, was $250.2 million, a decrease of $38.3 million, or 13.3%, compared to $288.5 million in 2024[152]. - Gross profit decreased by $7.5 million to $42.5 million in 2025, with a gross profit margin of 17.0%, down from 17.3% in 2024[157]. - Net loss for the year ended December 31, 2025, was $(15.4) million compared to a net loss of $(15.1) million in 2024[168]. - Adjusted EBITDA for 2025 decreased 35.7% to $9.3 million from $14.5 million in 2024[171]. - The decline in revenue was primarily driven by headwinds from certain clients in the industrial end market, reducing revenue by $31.4 million[153]. - Incremental growth across the broader portfolio contributed approximately $7.0 million in revenue during 2025, with $29.4 million from new client growth[154]. Cost Management - Cost of revenue decreased to $207.7 million in 2025 from $238.5 million in 2024, primarily due to lower volumes related to customer attrition and divestiture of underperforming operations[156]. - Operating expenses decreased to $48.7 million in 2025 from $54.5 million in 2024, driven by labor-related cost savings and reduced professional fees[159]. - Interest expense decreased to $9.2 million in 2025 from $10.3 million in 2024, primarily due to reduced borrowings under the revolving credit facility[165]. Cash Flow and Working Capital - Net cash provided by operating activities improved significantly to $9.6 million in 2025, a positive change of $15.6 million compared to a cash outflow of $6.1 million in 2024[187]. - Cash provided by investing activities was $4.6 million in 2025, primarily from the sale of divested business operations, compared to a cash outflow of $6.0 million in 2024[190]. - Net cash used in financing activities was $(13.5) million in 2025, driven by net repayments of $5.7 million on notes payable and $7.5 million on the ABL Facility, contrasting with a cash inflow of $12.1 million in 2024[191]. - As of December 31, 2025, the company had working capital of $11.7 million, a decrease from $30.7 million in 2024, primarily due to the sale of $9.9 million in assets held for sale[175]. - The company had cash and cash equivalents of $1.0 million as of December 31, 2025, an increase from $0.4 million in 2024[175]. Debt and Financing - The principal amount of the senior secured term loan facility was $51.1 million as of December 31, 2025, with a maturity date of June 28, 2030[178]. - The company entered into a Loan and Security Agreement with Texas Capital Bank on March 12, 2026, providing for an asset-based revolving credit facility of up to $40.0 million[183]. - The company believes its existing cash, borrowing availability, and expected cash generation from operations will be sufficient to fund operations for the next 12 months[177]. Impairment and Valuation - The company performed its most recent goodwill impairment analysis in Q2 2025, with no impairment recorded[198]. - An impairment charge of $1.7 million was recognized for customer relationship intangible assets during the year ended December 31, 2025, due to recoverability issues[199]. - As of December 31, 2025 and 2024, the company established a full valuation allowance for all deferred tax assets[203]. - The company does not anticipate any significant unrecognized tax benefits will be recorded during the next 12 months[204]. Financial Instruments and Risks - Financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable, with no significant currency or credit risks identified[205]. - The fair values of financial instruments approximate their carrying values, based on short maturities or current borrowing rates[205]. - The company has no off-balance sheet debt or similar obligations[207]. Stock Options and Compensation - Stock options are estimated using the Black-Scholes model, with significant assumptions based on historical data and market conditions[200][208]. - Performance Stock Units (PSUs) may vest between 0% and 200%, but no compensation expense has been recognized as it was not probable that PSUs would be earned as of December 31, 2025[202].

Core Insights - Quest Resource Holding Corporation experienced a challenging fourth quarter in 2025, with a revenue decline of 16% year-over-year and a 7% sequential decrease, primarily due to soft industrial market conditions and the divestiture of a mall-related business [16][18][14] - The company remains optimistic about future performance, citing strong relationships with industrial clients and a healthy pipeline of potential new business, despite current economic uncertainties [5][6][7][18] Financial Performance - Revenue for Q4 2025 was $58.9 million, down from the previous year, with a $10.7 million decline attributed to industrial clients and the divested business [16][18] - Gross profit for Q4 was $9.1 million, reflecting a 15% decrease year-over-year and a 21% sequential decline, resulting in a gross margin of 15.5% [18][19] - SG&A expenses were reduced to $7.7 million, a 24% decrease year-over-year, due to headcount reductions and cost-cutting measures [22][23] Operational Initiatives - The company is focused on operational excellence initiatives, which have shown positive results, including improved vendor relationships and reduced service disruptions [13][36] - Efforts to enhance share-of-wallet opportunities with existing clients are ongoing, with a focus on expanding service offerings and optimizing client relationships [8][10][11] Market Conditions - The industrial sector continues to face challenges, but the company has not lost any industrial clients, indicating potential for recovery as market conditions improve [5][18] - Economic uncertainty has led to elongated sales cycles and decision delays among potential clients, but the overall business pipeline remains healthy [6][7] Future Outlook - The company anticipates improved financial performance in 2026, driven by new client wins and wallet share expansions, despite expected margin pressures in the industrial sector [21][15] - Continued focus on cash generation and debt reduction is planned, with a goal of further optimizing operational efficiencies [27][28]

Financial Data and Key Metrics Changes - Revenue for the fourth quarter was $58.9 million, a 16% decrease year-over-year and a sequential decrease of 7% compared to the third quarter [14] - Gross profit dollars totaled $9.1 million, a decline of 15% year-over-year and a sequential decline of 21%, resulting in a gross margin of 15.5% [16] - SG&A expenses were $7.7 million, a 24% reduction year-over-year and a 17% reduction sequentially [20] Business Line Data and Key Metrics Changes - The decline in revenue was primarily driven by clients in the industrial end market and the divested mall-related business, accounting for a $10.7 million reduction in quarterly revenue [14] - Despite challenges, the remaining two-thirds of the business saw modest growth of $7.4 million, or about 5% [15] - New business wins and wallet share initiatives launched in the fourth quarter are expected to contribute positively in 2026 [15][18] Market Data and Key Metrics Changes - The overall pipeline remains healthy, but economic uncertainty has led to decision delays among potential clients [7] - The industrial end market continues to face challenges, impacting volumes from industrial customers [5][14] Company Strategy and Development Direction - The company is focused on operational excellence initiatives to drive efficiencies and improve financial performance as market conditions normalize [8][13] - There is an emphasis on expanding wallet share with existing customers and onboarding new clients to enhance revenue streams [10][13] - The company aims to reduce debt and improve cash generation while navigating a challenging operating environment [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year due to volume declines from the industrial end market, but expressed confidence in future recovery as macroeconomic conditions improve [12][26] - The company is committed to controlling operational efficiencies and costs despite external challenges [30] Other Important Information - The company divested an underperforming business, complicating year-over-year comparisons [12] - Cash generation improved, with $1 million generated from operations and $1.7 million of free cash flow in the fourth quarter [21] Q&A Session Summary Question: Update on KPIs and operational efficiency initiatives - Management confirmed that KPIs and operational efficiency initiatives are on track, with positive trending despite volume challenges [29][30] Question: Health of the vendor network - Management reported improved relationships with vendors, with lower service disruptions and costs associated with those disruptions at historic lows [31][32] Question: Opportunities for cross-selling and market share expansion - Management indicated that if industrial clients expand operations, the company stands to benefit due to strong relationships with these clients [35][36]

Financial Data and Key Metrics Changes - Revenue for the fourth quarter was $58.9 million, a 16% decrease year-over-year and a sequential decrease of 7% compared to the third quarter [14] - Gross profit dollars totaled $9.1 million, a decline of 15% year-over-year and a sequential decline of 21%, resulting in a gross margin of 15.5% [16] - SG&A expenses were $7.7 million, a 24% reduction year-over-year and a 17% reduction sequentially [20] Business Line Data and Key Metrics Changes - The decline in revenue was primarily driven by clients in the industrial end market and the divested mall-related business, accounting for a $10.7 million reduction in quarterly revenue [14][15] - Despite challenges, the remaining two-thirds of the business saw modest growth of $7.4 million, or about 5% [15] Market Data and Key Metrics Changes - The company observed a soft volume environment affecting industrial customers, with no loss of customers reported [5][6] - New business pipeline has been impacted by economic uncertainty, leading to elongated sales cycles [7] Company Strategy and Development Direction - The company is focused on operational excellence initiatives to drive efficiencies and improve financial performance as market conditions normalize [8][13] - There is an emphasis on expanding wallet share with existing customers and onboarding new clients, particularly in non-industrial markets [10][13] Management Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year due to volume declines from the industrial end market, but expressed confidence in future performance as macroeconomic conditions improve [12][26] - The company is well-positioned to accelerate financial performance and drive shareholder value as conditions improve [27] Other Important Information - The company generated over $1 million in cash from operations and $1.7 million of free cash flow in the fourth quarter [21] - A refinancing of the ABL with Texas Capital Bank was completed to improve financing costs and provide greater flexibility [24] Q&A Session Summary Question: Update on KPIs and operational efficiency - Management reported that KPIs and operational efficiency initiatives are on track, with positive trending despite the difficult volume environment [29][30] Question: Health of the vendor network - Management indicated that vendor relationships have improved, with vendors accepting payment to term and experiencing the lowest service disruptions in history [31][32] Question: Opportunities for cross-selling and market share expansion - Management noted that if industrial clients expand operations, the company stands to benefit due to strong relationships with these clients [35]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $58.9 million, a 16% decrease year-over-year and a sequential decrease of 7% compared to Q3 2025, primarily due to challenges in the industrial end market and the divestiture of a mall-related business [14][15] - Gross profit for Q4 was $9.1 million, a decline of 15% year-over-year and a sequential decline of 21%, resulting in a gross margin of 15.5% [16] - SG&A expenses were $7.7 million, a 24% reduction year-over-year and a 17% reduction sequentially, attributed to headcount reductions and increased efficiencies [19] Business Line Data and Key Metrics Changes - The industrial end market faced significant volume declines, contributing to a $10.7 million reduction in quarterly revenue compared to the prior year [14][15] - Despite challenges in the industrial sector, the remaining two-thirds of the business saw modest growth of $7.4 million, or about 5% [15] - New business wins and wallet share initiatives launched in Q4 are expected to contribute positively in 2026 [15][18] Market Data and Key Metrics Changes - The overall pipeline remains healthy, but economic uncertainty has led to decision delays among potential clients [6] - The company has not lost any customers in the industrial end market, indicating strong relationships that may benefit from future recovery [5] Company Strategy and Development Direction - The company is focused on operational excellence initiatives to drive efficiencies and improve financial performance as market conditions normalize [8][13] - There is an emphasis on expanding wallet share with existing customers and onboarding new clients to enhance revenue streams [10][13] - The company aims to reduce debt and improve cash generation while continuing to invest in growth opportunities [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year due to volume declines from the industrial end market, but expressed confidence in the company's ability to recover as macroeconomic conditions improve [12][26] - The company is well-positioned to accelerate financial performance and drive shareholder value as conditions improve [26] Other Important Information - The company generated over $1 million in cash from operations and $1.7 million of free cash flow in Q4 [21] - The company reduced its debt by approximately $2 million in Q4, bringing the full-year debt reduction to $13.2 million, a 16.4% reduction [23] Q&A Session Summary Question: Update on KPIs and operational efficiency initiatives - Management stated that all KPIs and operational efficiency initiatives are on track, with positive trending despite the difficult volume environment [30][31] Question: Health of the vendor network - Management reported improved relationships with vendors, with vendors now accepting payment to term and experiencing the lowest service disruptions in history [32][33] Question: Cross-sell opportunities with industrial customers - Management indicated that if industrial clients expand operations, the company stands to benefit due to strong relationships and service satisfaction [34][36]

Core Insights - The company is experiencing improved underlying performance through strategic initiatives and new customer acquisitions, despite facing ongoing pressures from the sector and macroeconomic environment [1][5] - Significant share of wallet expansions have been launched with two major customers, and a new full-service restaurant customer has been onboarded [1][6] - The company has successfully reduced its debt by $2.0 million in the quarter, totaling a $13.2 million reduction for the year, which represents a 16.4% decrease [1][6] Fourth Quarter 2025 Highlights - Revenue for the fourth quarter was $58.9 million, reflecting a 15.8% decrease compared to the fourth quarter of 2024 and a 7.0% decrease from the third quarter of 2025 [6] - Gross profit was $9.1 million, down 15.1% from the fourth quarter of 2024 and down 20.6% from the third quarter of 2025 [6] - GAAP net loss was $1.7 million, an improvement from a net loss of $9.5 million in the fourth quarter of 2024 [6] Fiscal Year 2025 Highlights - Total revenue for the fiscal year was $250.2 million, a 13.3% decrease compared to the same period in 2024 [6] - Gross profit for the year was $42.5 million, a 14.9% decrease from the previous year [6] - GAAP net loss for the year was $15.4 million, slightly higher than the net loss of $15.1 million in 2024 [6] Recent Highlights - The company has launched a significant expansion with an existing retail customer and has seen positive traction with share-of-wallet initiatives [6][7] - The refinancing of the ABL credit facility with Texas Capital Bank has provided additional financial flexibility and covenant easements into 2027 [6][7] - The company is focused on operational efficiency and is optimistic about its outlook for 2026, despite current challenges [5][6]

Financial Performance - Revenue for Q4 2025 was $58.9 million, a 15.8% decrease compared to Q4 2024, and a 7.0% decrease from Q3 2025[5] - Gross profit for Q4 2025 was $9.1 million, a 15.1% decrease compared to Q4 2024, and a 20.6% decrease from Q3 2025[5] - GAAP net loss for Q4 2025 was $1.7 million, an improvement from a net loss of $9.5 million in Q4 2024[5] - Adjusted EBITDA for Q4 2025 was $2.1 million, compared to $1.7 million in Q4 2024[5] - Total revenue for fiscal year 2025 was $250.2 million, a 13.3% decrease compared to 2024[5] - Gross profit for fiscal year 2025 was $42.5 million, a 14.9% decrease compared to 2024[5] - GAAP net loss for fiscal year 2025 was $15.4 million, consistent with a net loss of $15.1 million in 2024[5] Debt and Financial Flexibility - Debt was reduced by $13.2 million in 2025, representing a 16.4% reduction from December 31, 2024[5] - The ABL credit facility was refinanced with Texas Capital Bank, providing additional financial flexibility through 2027[6] Asset and Liability Changes - Total current assets decreased from $75,139 million in 2024 to $51,198 million in 2025, a decline of approximately 31.9%[18] - Cash and cash equivalents increased significantly from $396 million in 2024 to $1,014 million in 2025, representing a growth of 156.6%[18] - Accounts receivable decreased from $62,252 million in 2024 to $49,010 million in 2025, a reduction of about 21.3%[18] - Total liabilities decreased from $121,489 million in 2024 to $105,039 million in 2025, a decline of approximately 13.5%[18] - Current liabilities decreased from $44,391 million in 2024 to $39,527 million in 2025, a reduction of about 11.5%[18] - Notes payable decreased from $76,265 million in 2024 to $63,999 million in 2025, a decline of approximately 16.0%[18] Equity and Deficit - Stockholders' equity decreased from $54,156 million in 2024 to $40,512 million in 2025, a drop of about 25.2%[18] - Additional paid-in capital increased from $179,246 million in 2024 to $180,984 million in 2025, a rise of approximately 1.0%[18] - The accumulated deficit increased from $125,111 million in 2024 to $140,493 million in 2025, reflecting a worsening of about 12.3%[18] - Total assets decreased from $175,645 million in 2024 to $145,551 million in 2025, a decline of approximately 17.1%[18] Business Development - The company launched significant expansions with existing customers and onboarded a new full-service restaurant customer[5]

Core Viewpoint - Quest Resource Holding Corporation will release its financial results for Q4 and the year ended December 31, 2025, on March 12, 2026, after market close [1] Group 1: Financial Results Announcement - The financial results will be discussed in a conference call on the same day at 5:00 PM ET [2] - Investors can participate in the call by dialing specific phone numbers or accessing a webcast on the company's investor relations website [2] Group 2: Webcast and Playback Information - The webcast will include forward-looking information and will be archived for at least 90 days [3] - A telephonic playback of the conference call will be available approximately 3 hours after the call ends, accessible until March 26, 2026 [3] Group 3: Company Overview - Quest is a national provider of waste and recycling services, helping businesses achieve environmental and sustainability goals [4] - The company offers tailored solutions across various industry sectors, providing data that tracks environmental results and improves business operations [4]

Core Insights - Long Cast Advisers reported a cumulative net return improvement of 4% in Q3 2025, with a total cumulative return of 266% net of fees since inception in November 2015, translating to a 14% CAGR [1] Company Overview: Quest Resource Holding Corporation (NASDAQ:QRHC) - Quest Resource Holding Corporation provides waste and recycling services and is headquartered in The Colony, Texas [2] - The stock experienced a one-month return of 29.66%, but has lost 73.82% of its value over the past 52 weeks, closing at $1.88 per share with a market capitalization of $39.236 million on November 27, 2025 [2] Performance Analysis - Year-to-date, Quest Resource Holding Corporation has been a significant detractor for Long Cast Advisers' portfolio, leading to its removal from the top-five holdings [3] - The company reported revenue of $63.3 million in Q3 2025, which is a 13% decrease compared to Q3 2024 but a 6.4% increase from Q2 2025 [4] Management and Valuation Concerns - The company has improved management and operational processes, making it a more reasonable investment despite its past performance [3] - There is a notable discrepancy between $80 million in goodwill and a $35 million market capitalization, which is expected to trigger an annual impairment test [3] Hedge Fund Interest - Quest Resource Holding Corporation is not among the 30 most popular stocks among hedge funds, with only 8 hedge fund portfolios holding the stock at the end of Q3 2025, down from 12 in the previous quarter [4]

Company Overview - Quest Resource Holding Corporation (QRHC) is a national provider of waste & recycling solutions to large businesses [1,8] - The company serves a $200B+ North American waste and recycling industry [10] - Quest offers expertise with 130+ waste streams and has a nationwide footprint, delivering services in every zip code in the U S [10] - The company focuses on large clients with complex waste streams, including Fortune 1000 businesses [11,13] Financial Performance - The company has experienced ~20% CAGR in Gross Profit dollars from 2016 to 2024 [14] - Quest's revenue for the trailing twelve months (TTM) ending in Q3 2025 was $261.281 million [10,17] - Gross profit for the same period was $44.162 million [17] - Adjusted EBITDA for TTM 3Q25 was $8.853 million, representing a 3.4% margin [17,78] Business Strategy - Quest employs an asset-light model, differentiating itself from asset-based integrated majors and fragmented players [34,32,36] - The company's platform delivers nationwide waste and recycling services, regulatory compliance, and comprehensive data reporting [24] - Quest aims to improve clients' sustainability, reduce waste footprint, and improve efficiencies & cost control [24]